Martin Schneider
GHG Monitor
3/28/2014
Additional clarification is needed from the Department of Energy on its draft Request for Proposals for Research and Development – Implementation and Support (RADIS) Services at the National Energy Technology Laboratory if there is to be adequate competition on the contract, potential bidders told GHG Monitor this week. The draft RFP, which seeks a contractor to “actively perform and provide support for fundamental and applied research efforts” and perform “interdisciplinary, collaborative R&D with federal in-house technical staff,” was issued March 11 and DOE is seeking comments through April 11. NETL’s current contract with incumbent contractor URS expires on Nov. 14, 2014.
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. “Award term earned will be accumulated during the initial contract term and not awarded until the final performance year of the initial contract term,” the draft states. “At that time the ATDO will determine the total amount of award term earned by the Contractor, taking into account the deductions, eligibility restrictions, and conditions specified elsewhere in this clause.” Notably, the draft RFP states that “award term is subject to reductions for fee periods where the Contractor is assessed by the FDO to have achieved an overall rating of good, satisfactory, or unsatisfactory,” and if the contractor fails to earn award term in three or more evaluation periods the contractor becomes ineligible to earn any additional award term extensions under the contract.
Four Teams Considering a Bid
At least four companies—URS, Lockheed Martin, Fluor and Battelle—are considering leading teams to pursue the contract, but several industry executives involved in assessing the draft RFP this week emphasized that a number of changes will likely need to be made in the final RFP to attract bids from all of those teams. Foremost among the concerns is the future role of the university consortium currently involved in NETL’s work—the Regional University Alliance. Established in 2010, the RUA “is a unique partnership of academic, industry, and federal researchers with a diverse and exciting portfolio of answers to America’s energy questions,” according to NETL’s website. “The Alliance combines NETL’s fossil energy expertise in research, development, and demonstration with the diverse capabilities of industry member URS Corporation and five nationally recognized research universities: Carnegie Mellon University, the Pennsylvania State University, the University of Pittsburgh, Virginia Polytechnic Institute and State University, and West Virginia University.”
Potential bidders are concerned, though, that the draft RFP does not clarify the role RUA going forward, perhaps allowing RUA or its member universities to be exclusive to only one of the bidding teams. “With the strategic importance NETL places on the RUA, you’ve got a situation that could chill competition,” one industry executive told GHG Monitor. Likewise, another potential bidder told GHG Monitor: “The notion that you are allowing them to be exclusive to someone doesn’t make a lot of sense. Certainly from a competitive standpoint there are issues. I would imagine there are some teams that won’t bid if that’s not clarified.”
Bidders suggested a change in the final RFP that would clarify RUA’s role and availability. “I believe a common sense approach to solving this issue is to modify the Final RFP so that the RUA is available to all bidders alike by novating the current contracts or similar move,” another industry executive told GHG Monitor. “Most of the universities are state institutions, and I would guess by charter available to all comers. In the final analysis, I believe the universities will transcend any change in contractor, so it would seem like this approach makes sense.”
Key Personnel Penalties Questioned
Potential bidders also pointed to the key personnel language included in the draft RFP as some of the strongest in any recent DOE contract. While the draft RFP seeks “letters of commitment” for key personnel for a minimum of 24 months, DOE puts no time restrictions on when the contracting officer can levy penalties for changing key personnel. The draft RFP notes: “Notwithstanding approval by the Contracting Officer, anytime the Program Manager (the initial Program Manager or any substitution approved by the Contracting Officer) is changed for any reason after being placed in the position, the total Available Award Fee Pool (sum of all individual CLIN award fee pools), may be permanently reduced, for the fee period in which the change occurs, by $500,000 for each and every occurrence of a change to the Program Manager.” A similar penalty of $100,000 is included for key personnel other than the program manager. “The Contractor may request, in writing, that the Contracting Officer consider waiving all or part of a reduction in the available award fee pool,” the draft RFP states. “Such written request shall include the factual basis for the request. The Contracting Officer shall have unilateral discretion to make the determination to waive or not waive all or part of a reduction in the available award fee pool."
Industry executives noted that the $500,000 penalty is on par with DOE contracts that are exponentially larger in scale and not really tailored to the size of the RADIS contract. “It seems out of whack, that’s for sure,” one executive said. “And it needs to be clear whether the contractor is on the hook for $500,000 for changing out the program manager for the life of the contract or just for that 24-month period. Hopefully, DOE will clarify that.”
