Martin Schneider
GHG Monitor
5/23/2014
The Department of Energy this week issued an amendment to the final Request for Proposals for Research and Development—Implementation and Support (RADIS) Services at the National Energy Technology Laboratory, making minor technical corrections and leaving the June 12 due date unchanged. Notably, though, a set of Q&A’s released alongside the amendment provides insight into the Department’s approach to penalties for the departure of key personnel in the RFP, which are some of the toughest in recent DOE contracts.
DOE envisions a cost-plus award-fee contract with a five year base period and up to five years in additional award team. The potential for option years will be assessed every six months, with the contractor eligible to earn an additional six months of award term for an “excellent” rating and an additional three months of award term for a “very good” rating. In the final RFP, the penalties for key personnel departures were reduced from the draft, with the penalty reduced from $500,000 to $300,000 for early departure of the program manager. However, the RFP states that the penalty can be assessed anytime key personnel leaves during the life of the contract for any reason, a provision questioned by potential bidders.
One potential bidder noted that the clause “appears to be in conflict” with language asking for two-year commitment letters for key personnel, but DOE responded: “For Key Personnel, the penalty is intended to be effective anytime a change in Key Personnel occurs during the life of the contract, unless a waiver is requested and approved by the Contracting Officer in accordance with the clause. For essential personnel it is tied to their proposed commitment. No change has been made to the RFP resulting from this question.” Likewise, another questioner stated that the language “does not seem reasonable,” noting that there are many instances—changes at DOE direction, medical conditions, etc.—that should be clearly exempted from penalty. DOE, though, reiterated its stance on the penalties, noting that “NETL has established the fee pool reduction amounts based on the need for continuity of services for the contract and the importance placed on the Key Personnel positions.”
DOE acknowledged that “sometimes changes in Key Personnel [are] to the be benefit of NETL in order to address performance concerns or to improve overall performance and that in some situations the change in Key Personnel may be due to catastrophic reasons (e.g. serious medical condition, death). To accommodate such incidents, the clause includes in subparagraph D.3 the provision for the Contractor to request a waiver of all or part of the reduction from the Contracting Officer … The amounts were reduced from the draft RFP to the final RFP. The amounts identified in the clause are consistent with the relative importance associated with those positions and a change to those amounts is not warranted.”
