Collaborative Procurement for Sustainability Projects

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Collaborative Procurement for Sustainability Projects. CGSA Conference April 2, 2014. Agenda . Intro Why collaboration? What weve done Lessons learned Q&A . Sustainability at Alameda County . Why Collaboration? . Competitive pricing - PowerPoint PPT Presentation

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Collaborative Procurement for Sustainability ProjectsCGSA Conference April 2, 2014

CGSA Conference

Alameda County1Agenda Intro Why collaboration? What weve done Lessons learned Q&A

CGSA Conference #Alameda County2Sustainability at Alameda County

CGSA Conference #Alameda CountyAbout 20% of overall fleet is hybrid, EV, or 30+ MPG. 3Why Collaboration? Competitive pricingImproved regional cooperation/efficiency to advance common goalsParticipating agencies benefit by finding support despite lack of expertise, bandwidth, and funding for these projectsMore streamlined processes for bidders

#CGSA Conference Alameda CountyAlameda County4Collaborative Procurement Projects

Local Government EV Fleet Demonstration Project

CGSA Conference #Alameda County5InSearch of aCreative SolutionIn a time of shrinking budgets and scarce staff resources,how do we increase the use of renewable energy at public facilities to save on energy costs and reduce greenhouse gas emissions from government operations?

#CGSA Conference Alameda CountyAlameda CountyThe benefits of the use of renewable energy at publicly-owned facilities are clear - the result is not only a reduction in energy costs, but also a reduction in greenhouse gas emissions from government operations. However in a time when most agencies can no longer afford to pay for projects with General Fund dollars, and staff resources are becoming more and more scarce, its necessary to find creative solutions in order to adopt renewable energy.

6Agencies across four counties collaborating on the procurement of distributed renewable energy systems for public facilities

#CGSA Conference Alameda CountyAlameda CountyOne such solution is collaborative procurement of renewable energy by public agencies. The Regional Renewable Energy Procurement Project is an Alameda County led collaborative procurement of renewable energy for public agencies that includes cities, counties and special districts throughout four Bay Area counties. 7Utilize Proven ModelSilicon Valley Renewable Energy Procurement (SV-REP)

Completed in 2010Led by Santa Clara County and Joint Venture Silicon Valley Network9 Agencies70 Sites

CGSA Conference #Alameda CountyThis model was successfully executed in Silicon Valley (Silicon Valley Renewable Energy Procurement) several years ago. The project was led by Santa Clara County and Joint Venture Silicon Valley Network. There were 9 agencies and 70 sites included in that collaborative procurement. Using this proven model, the County of Alameda has executed the largest public agency procurement of renewable energy to date in the United States.

8R-REP Project TeamLead Agency Conveners19 Public AgenciesCities (11)Special Districts (4)Counties (3)Educational Institutions (1)Participating AgenciesConsultants

CGSA Conference #Alameda CountyLead Agency conducted outreach and lead the solicitation.Conveners Assisted with outreach and educational materials.Participating Agencies Included sites in the solicitation; contributed to writing key terms included in the template contract documents from the RFP.Consultants Technical and financial advisors (more on their role later in the presentation).

9R-REP Sites19 Agencies186 Sites31 MW

#CGSA Conference Alameda CountyAlameda CountyEach red dot on the map above represents the approx. 186 sites that were included in the solicitation.10R-REP TimelineOutreach phase beginsSeptember 2011Feasibility studies completedFebruary 2013Consultants engagedMarch 2013RFP releasedSeptember 2013Vendors selectedMarch 2014 Contracts taken to Councils/BoardsSpring Summer 2014Site installations/site commissioning activitiesSummer Fall 2014 Project completionWinter 2014 Spring 2015

CGSA Conference #Alameda CountyOutreach for this project began in the fall of 2011. The County led the Participating Agencies through feasibility assessments (IRFQ); numerous workshops and conference calls to educated agencies and maintain stakeholder engagement; legal review of contract documents, and review of RFP prior to posting. At this time, the project is about to enter the negotiations phase. 11Alameda County as Regional LeaderAchieving policy objectives

Increasing the use of renewable energyReducing greenhouse gas emissions from County operationsRegional leadership

Leader in renewable energy adoption 14 solar projects in operations at its facilities

CGSA Conference #Alameda CountyThe Countys decision to lead this program stems not only from its desire to move forward its policy objectives of increasing the use of renewable energy and reducing greenhouse gas emissions from County operations, but also to show regional leadership. The County has been a leader in renewable energy adoption for quite some time already has 14 solar projects in operations at its facilities, 4 MW total capacity. The Countys Climate Action Plan for Government Services and Operations Resolution (Adopted in 2010) put forth a blueprint for achieving at least 15% greenhouse gas emissions reductions by 2020 and 80% by 2050.

12The challenges of renewable energy adoption are weighing public agencies down$$$ComplexityTimeRenewable EnergyPublic Agency

#CGSA Conference Alameda CountyAlameda CountyAfter hearing a bit of background on the R-REP, lets now discuss exactly how collaborative procurement allows public agencies to overcome many of the challenges of renewable energy adoption. Renewable energy procurement is complex and for many agencies uncharted territory. Determining where to pursue renewable energy; how to evaluate the feasibility and economics of a project; and writing an RFP can be very challenging and very time-consuming.

There are many challenges to public agency adoption of renewable energy:

High upfront costs associated with purchase and installation;Significant transaction costs and admin time; andA lack of understanding of renewable energy economics; financing options; available incentives; and complex technical considerations.

These challenges are weighing agencies down and preventing more wide-spread adoption of renewable energy.

13Collaboration allows public agencies to tip the scalesPublic AgencyComplexityTime$$$Renewable EnergyPublic AgencyPublic AgencyPublic Agency

#CGSA Conference Alameda CountyAlameda CountyWhen public agencies band together and collaborate, however, the essentially tip the scales back in their favor. 14Leverage Investment of the Lead AgencyLeverage prior experience of lead agency in renewable energy procurement

Lead agency invests significant staff resources, participating agencies save resources:SV-REP Agencies saved 75-90% in admin costs and time ComplexityTime

CGSA Conference #Alameda CountyLeveraging the invest of time and money put forward by the Lead Agency allows the Participating Agencies to break through the challenges of complexity and staff resources. The Countys prior experience in renewable energy procurement provides an advantage to those participating agencies with little or no prior experience in that they are able to help them navigate many of the challenges posed by renewable energy adoption. The lead agency also invests significant staff resources and thus saves participating agencies from investing their own precious resources.

15Leverage Investment of Lead AgencyOutreachNegotiated MOUIRFQ for sites assessmentsRFP for consultantsManaged consulting teamRFI - Vendor outreach

CGSA Conference #Alameda CountyTo help illustrate the significant time invested by the Lead Agency, here are some of the key project milestones accomplished by the Lead Agency over the last 2.5 years.Conducted significant outreach to generate interest among agencies to participate in the projectNegotiated an MOU by and between the Participating AgenciesPosted an IRFQ to qualify engineering/consulting firms to perform feasibility analyses for the agencies participating in the project. The IRFQ contained a specified scope of work and we established a not to exceed amount for the scope so that agencies were guaranteed a certain price for their feasibility analyses.We then posted an RFP for consulting services and once the consulting team was on-board weve managed the teamWe also posted an RFI to query the vendor community on certain elements of the RFP and also to generate interest in the project with the goal of attracting increased competition.

16Leverage Investment of Lead AgencyWrote RFQ/PGathered detailed information on sitesStandardized template documentsLed evaluation of bids

CGSA Conference #Alameda CountyIn its role, the County also took the lead on writing the RFP. This required extensive data gathering on a majority of the sites included in the solicitation. This included: utility data, as-builts, geotech info and all of the general conditions and unique contracting requirement document for each of the agencies that participated in the project.

The County convened a selection committee comprised of staff people from R-REP to and facilitated their evaluation process.The County included both a standard PPA template (which was reviewed by all Participating Agencies).

Finally, the County led workshops, conference calls and provided education materials.

17Leverage Investment of the Lead AgencyConsulting team funded through Countys Designated Energy Fund incentives from past energy projects and rebates from current projects

$$$

CGSA Conference #Alameda CountyAnother way that Participating Agencies leveraged the investment of the Lead Agency is that consultant fees were funded through the Countys Designated Energy Fund, which was established by the County in 1993, originally to roll the incentives that it receive through PG&Es Power Savings Partners program into a fund that could be used for future energy and efficiency projects. The Power Savings Partners program was designed to incent public and private organization to reduce load. Over 10 years, the County received $3 Million in incentives from PG&E through this project. The fund is now replenished by other incentives and also from rebates. 18Consultants Play Key RoleBundling strategyEconomic/technical analysis of sitesAssistance in writing RFP Advised on the evaluation of bids

Leverage Investment of the Lead AgencyComplexityTime$$$

CGSA Conference #Alameda County19The consultants were critical to the success of the project. The collaborative model uses a bundling strategy to group sites together, which was executed by the consultants. The consultants also performed additional economic/technical analysis of sites to help participating agencies determine which sites were best suited for inclusion in the solicitation. The consultants assisted in writing the RFP, providing guidance on the technical specifications to include in the bid documents, how to structure the bid forms and other aspects of the solicitation. Finally, the evaluation of bids (pricing, financial strength of vendors, review of technical specifications) would not have been possible without the consultants.Collaboration Leads to Lower PricingEconomies of scale leads to lower pricingStandardized procurement documents lowers transaction costsLower pricing translates to higher energy cost savings over the life of the project

$$$

CGSA Conference #Alameda CountyThe work of the consultants and the Lead Agency in vetting sites, bundling sites and assisting with the solicitation and contract documents has several key results that lead to cost savings:

The economies of scale in the procurement mean that participants are able to achieve volume pricing discounts and the overall size attracts more competition from bidders. The SV-REP project resulted in costs savings 10-15% lower than go-it-alone (all PPA projects). Though pricing for R-REP cannot yet be shared (since we are still in the evaluation process), we did achieve favorable pricing (compared to go-it-alone).

If we successfully standardize procurement documents and standard agreements across all participating agencies that translates into reduced transaction costs for the vendors and those savings may be passed along to agencies. This should also reduce the time necessary for negotiations, thus saving the agencies additional time/resources.

Lower pricing translates to higher energy cost savings over the life of the project. Based on the economic analysis presented in the site assessment reports, which utilized 2012 Pacific Gas and Electric (PG&E) electricity rates, the County would save approximately $26 million in electricity costs through the implementation of these projects, over the expected twenty-five (25) year life of the systems.

20Financing ProjectsVendor asked to offer pricing under both a PPA and cash purchase.Most agencies interested in 3rd party ownership model.Workshops hosted for Participating Agencies on financing and renewable energy economics.

ComplexityTime$$$

CGSA Conference #Alameda CountyTo develop the projects, agencies can utilize a variety of financing mechanisms to fund their projects including: state and federal incentives using various mechanisms such as Clean Renewable Energy Bonds; Power Purchase Agreements; and Equipment Leases.Vendor asked to offer pricing under both a PPA and cash purchase.Consultants calculated levelized costs of energy (LCOE) to determine the best value for each Participating Agency.The County hosted several workshops to educate the Participating Agencies on various types of financing and the economics of renewable energy projects. Education was key throughout this project.

21Environmental BenefitsAnnual emissions reductions across all sites:Equivalent to the CO2 emissions from the electricity use of over 6,300 homes in Alameda County

CGSA Conference #Alameda CountyIf the projects across all Participating Agencies included in the solicitation were installed, the total GHG annual emission reduction would be 9,734 metric tons of carbon dioxide per year, or the equivalent to the CO2 emissions from the electricity use of over 6,300 homes in Alameda County for one year. For the twenty (20) sites the County is including in the solicitation, total GHG annual emission reduction would be 4,610 metric tons of carbon dioxide per year, or the electricity use of close to 3,000 Alameda County homes for one year.

22Regional Economic GrowthRegional economic growth: If all projects paid for through a cash acquisition, total project costs would be an estimated $131.4 million.

Job creation: 839 jobs created as a result of the initiative if all projects are developed.

RFP included 40% GFE Workforce Requirement.

CGSA Conference #Alameda CountyThe large scale of these collaborations means that we as a region are both stimulating economic activity and accelerating the deployment of renewable energy.If all projects included in the solicitation were paid for through a cash acquisition, total project costs would be an estimated $131.4 million.An IMPLAN analysis was run on the projects, and the economic development study found that 839 jobs will be created as a result of the initiative if all projects are developed (please see IMPLAN analysis attached).The RFP required all vendors to put forward a GFE to hire 40% local (Bay Area) and demonstrate in a Workforce Plan how they would achieve this target. We also hosted two workforce conference (one of which was mandatory) to bridge the relationship between vendors and local workforce organizations.

23Lessons Learned Engage internal staff earlyExecutive sponsorPurchasing DepartmentLegalMaintain engagement of all outside stakeholdersEducation is keyStandardize assumptions for site assessmentsExpert consultants are key

CGSA Conference #Alameda CountyEngage internal staff - It is necessary to engage an executive staff sponsor, and adequate staff-people, including purchasing staff, and legal resources. There has to be a champion for the project who is well-versed in renewable energy procurement. Engage Purchasing staff early in the process. Collaborative, multi-agency procurements challenge purchasing processes, procedures and staff need time to modify existing processes.

Its important to engage participating agency staff and decision makers early on in the process and continuously update them. We did this through monthly conference calls, email updates, and other e- correspondence that staff could then forward to decision-makers, or rework into reports for approving authorities.

Clearly defining the assumptions to be used by firms performing the site assessments (e.g. utility escalation rate; cost of install/kw etc.) is important so that there is consistency in the data gathered, how it is assessed and presented across the agencies/sites. Choose qualified firms to conduct the work.

Engaging a technical advisor/financial advisor is extremely valuable and the evaluation of proposals would not be possible without them.

24Collaborative ProcurementA Creative SolutionPublic AgencyComplexityTime$$$Renewable EnergyPublic AgencyPublic AgencyPublic Agency

#CGSA Conference Alameda CountyAlameda CountyCollaboration allows public agencies to overcome many of the challenges of renewable energy adoption and tip the scales back in their favor. Its a creative solution to advance the adoption of renewable energy at public facilities in a time when most agencies can no longer afford to pay for projects with General Fund dollars, and staff resources are increasingly scarce.

25Local Government EV Fleet Demonstration Project

CGSA Conference #Alameda CountySegue into EV project a little bit of history 26Electric Vehicle (EV) Initiatives at Alameda County Installed 40 EV Charging Stations in 2013 free to the public until end of 2014 Will purchase 26 EVCS in 2014 Over 20 EVs in fleet (Miles Electric, Volt, Focus, RAV4, C-MAX, Prius) Additional 26 EVs in next few months

CGSA Conference #Alameda County27Why EVs? VehicleFuel CostAvg. MPGCost per MileCost/8000 miles Compact $4.5027$0.16$1,280Intermediate$4.5021$0.21$1,680Full Size$4.5012$0.37$2,960Hybrid$4.5037$0.12$960EV-Peak$0.15 per kWh100 miles per charge$0.036$288EV-Off Peak$0.08 per kWh100 miles per charge$0.019$152 Eliminate tailpipe pollution, drastically reduce GHG emissions Greener over time Fits duty-cycle: most trips under 40-50 miles Cost savings Fun to drive!

CGSA Conference #Alameda County28Challenges

??

CGSA Conference #Alameda CountyCost Evs have a sticker price that is $15K - $20K more expensive than regular fleet vehicles. Operational costs are much cheaper though, challenge is to reduce ROI and upfront costs.

Charging stations cost money too! most of the time, they require electrical upgrades such as new power panels, transformers, etc. how much will that cost? Staff can be unfamiliar with charging station installation procedure, as well. Opting for turn-key services should help!

Federal funding regulations cumbersome, especially for partners that have never received federal funds. As lead agency, we coordinated partial buy-America waiver. We also had staff to serve as Caltrans liaisons who have had plenty of federal funding experience.

29Local Government EV Fleet Demonstration Project Partners Collaborative procurement with 10 other Bay Area municipal government 90 all-electric vehicles and charging stations

CGSA Conference #Alameda County30Grant Funding for EVs40 EV Charging Stations BAAQMD TFCA - $84,960CEC/ABAG - $182,762Total - $267,72226 EV Charging Stations $286,00026 EVs$526,000.Total - $812,000

CGSA Conference #Alameda County31Local Government EV Fleet Demonstration Project - Grant Details Federal Highway Administration (FHWA), Congestion Mitigation and Air Quality (CMAQ) funding through the Metropolitan Transportation Commission (MTC) $2.8 million to fund the incremental cost of an all-electric fleet vehicle and fully fund purchase and install of EV charging stations

CGSA Conference #Alameda CountyStart with the money, grant details from FHWA. 32Cost Breakdown Incremental cost covered in grant (about $19K - $21K per vehicle) Match = appx. $15K Full cost of charging station and install (up to $11K)

Estimated EVCS costs: $4,000 -$7,000 per station (level 2) Appx. $9,500 - $11,000/station for installation $13,500 - $16,000 total Dual ports reduce cost!

CGSA Conference #Alameda CountyCounty cost for 1st 40 stations:$3,915/station (level 1 and 2 hybrid) Range for install is based on engineering costs

Chargepiont 4000:- Single is $5K, dual is about $7K 33Project TeamLead Agency Participating AgenciesConsultantsConvenerFunding

10 Public AgenciesCities (5)Water Districts (2)Counties (2)City/County (SF)

#CGSA Conference Alameda CountyAlameda CountyExplain acronyms 34EV Charging Station Locations

CGSA Conference #Alameda County90 stations. Appx 34 sites across the Bay Area. 35How we did thisProcess Non-profit project convener lead agency Buy America waiver Environmental clearance Memorandum of Understanding (MOU) Preparation of bids Procurement and award * Handover to partner agencies * Stakeholders Project partner contacts (fleet & sustainability) Alameda County purchasing & legal Partners purchasing & legal Caltrans liaisons (Alameda County) Partners engineering External consultants

CGSA Conference #Alameda County36Role of lead agency Led RFQ/P process, including review/approval by all participating agencies, drafting of procurement documents, purchasing process Developed MOU and coordinated approval Managed environmental review Caltrans liaison (federal funding) Created A/E site designs for project

CGSA Conference #Alameda County37Timeline ProcessProject kicks offNovember/December 2010 (Completed AC Board Resolution and MOUs in November and MTC Council approval in December 2010)FHWA issues partial Buy-America waiverOctober 2011Environmental review June 2012Second MOUAugust 2012 July 2013Electric vehicle procurement September 2013 - March 2014Site designs (Design/bid/build), including consultants hiringNovember 2013 June 2014Charging stations procurement July 2014 October 2014Installation of charging stationsNovember 2014 December 2014

CGSA Conference #Alameda CountyMore details on the project, including timing

Mention why we did two MOUs

Briefly explain design, bid, build. 38Tangible financial benefits EV bid saved over $349,000 in the purchase of new EVs (based on manufacturer's MSRP) nearly $4,000 per vehicle. Focus - $31,360 Leaf (SV) - $33,947 Successful utilization of federal tax-incentive in vehicle bid

CGSA Conference #Alameda County39Tangible environmental benefits EV fleet is expected to achieve fuel costs savings of $500,000 and 1.5 million lbs. of net CO2 pollution prevention over the next five years.

CGSA Conference #Alameda County40EV + PV

3 sites (11 charging stations total) currently connected to buildings with PV solar arrays Approx. 26%-52% of power for charging stations from solar panels R-REP - potential for EV + PV at 2 more sitesCGSA Conference #Alameda County41Lessons learned Anticipate delays participating agencies need various Council/Board approval and budget appropriations Engage all stakeholders early (purchasing department, legal, etc.) Balance inclusiveness and expedience

CGSA Conference #Alameda CountyDelays approval process across agencies takes time. Stakeholders- lead agency engage internal stakeholders first and make sure partners are also engaging their stakeholders early too. minimize surprises early onParticipating agencies keep everyone engaged and invested. For us, we had grant funding on the line, so meeting deadlines was critical. Partners that are holding the project back should be deferred to later rounds, if possible. 42For more

http://www.acgov.org/sustain/documents/2013_Alameda_County_Transportation_Annual_Report.pdf

CGSA Conference #Alameda County43Q&Awww.acgov.org/sustain

Kayla PlattManagement Associate IIKayla.Platt@acgov.org Phillip KobernickSustainability Project Manager, GSA TransportationPhillip.Kobernick@acgov.org

CGSA Conference #Alameda CountyGSA logo or Susty logo?? 44

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