>
1
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
ESPC
Contracts- HHSC00 Experience
Victor Moore, Architect
Director, Maintenance
& Construction
Texas Health and Human
Services Commission
2
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
Overview
HHSC00 ESPC Contract
Structure- Three Contracts
Key Components of Each Contract
Supplemental Documents
3
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
Background- Concerns
Prior to Starting ESPC Process
Mixed reputation of previous
ESPC initiatives due to past performance of some ESCOs
Uncertainty about the M&V
plan, and ability to ensure the guaranteed savings are truly achieved
Had not previously implemented
a design-build, fast track project
Did not have a contract
document for design-build and would have to develop it
Unique security, safety,
coordination, etc. requirements for state hospitals and state schools
4
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
Background- Positive
Outcomes
Have accomplished a great
deal of improvements
Significantly reduced energy
and water consumption
Standardized temperature
and lighting settings to provide better living conditions for clients
and staff
Installed a state-wide energy
management and oversight system
Have an involved partner
for the next 15 years who will provide facility maintenance assistance
and support to ensure energy and water savings are achieved
Recognitions:
00ighting Up00 an article
included in the May 2005 edition of Fiscal Notes
2005 ICI Water Conservation
Award from the City of Austin
Honorable Mention for the
2006 Innovations Award from the National Association of State Facilities
Administrators (NASFA)
5
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
The Project Lifecycle
#2- Detailed
Utility
Audit Contract
Project
Development
Engineering
Post-Installation
Savings Reports
Performance
Assurance
Performance Period
#3-
Implementation
and Savings Guarantee Contract
Installation
Installation
Period
#1-
Master Contract
6
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
Overview of HHSC00
Three Contracts
Contract Development
#1- Master Contract
#2- Detailed Utility Audit
Contract
#3- Implementation Contract
7
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
#1- Master Contract
Purpose
Establishes contractual
relationship between agency and ESCO
Describes services to be
provided by ESCO
Structure
Related documents- RFQ response,
T&Cs, etc
Service Description
Invoices & Payments
Reports & Records
Insurance
Key Points
No cost contract
Allows ESCO to begin collecting
data
Agency and ESCO define overall
project- phases, financing, etc
8
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
#2- Detailed Utility
Audit (DUA) Contract
Purpose
Establishes scope and performance
criteria of DUA
Describes cost and payment
terms for DUA
Structure
Identifies facilities &
buildings to be audited
Description of performance
criteria
Financial, environmental,
codes
Content of DUA
Payment terms
Cost per ft2 of buildings
audited
Conditions of payment
9
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
#2- Detailed Utility
Audit (DUA) Contract (continued)
Key Points
Cost of audit included in
Implementation Contract
M&V plan developed as
part of DUA
3rd
party engineer reviews DUA and M&V
plan
SECO approval of DUA
and M&V plan required before Implementation Contract is executed
10
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
#2- Scope for Detailed Utility Audits
The DUA report included the following:
A list of all viable UCMs,
planned for each facility:
All UCM00 must be acceptable
to HHSC
Estimate the cost, savings
and life expectancy of each UCM
Specify the O&M procedures
which will be impacted by the
proposed UCM
Include analysis methodology
UCM interaction with the
existing equipment in the facilities
A detailed baseline for
utility consumption for each facility
The proposed measurement
and verification plan with:
Detailed calculations,
including proposed methods of baseline adjustments
Sample of all reports and
the detailed reconciliation methodology
The yearly reconciliation
with assumptions and calculations
must be acceptable to all parties
11
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
A financial analysis of
the effect on annual cash flow by the UCMs
A guaranteed utility services
contract
A set of detailed calculations
for any rate savings proposals
A utility analysis demonstrating
effect of installed UCMs
A Performance Assurance
Support Services Plan for
the facilities
A plan for contractor provided
training for on-site personnel
Assistance in developing
multi-facility wide operations
and maintenance standards
Coordinate with HHSC to
determine the level of operations and maintenance services to be provided
by contractor
#2- Scope for Detailed Utility Audits (cont00)
12
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
#3- Implementation and
Savings Guarantee Contract
Purpose
Defines scope, cost,
and savings of project
Defines how savings are
guaranteed
Structure
Typical construction contract:
scope, payment process, terms & conditions
Savings guarantee: what,
how much, cash payment for shortfall
Owner00 and ESCO responsibilities
Key Points
SECO approval required before
execution
HHSC00 Implementation
Contract based on other agencies, standard TDMHMR construction contract,
and Uniform General Condition
13
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
Authorities and Responsibilities
Document
Purpose
Used to address specific
issues, details, and coordination items not covered in the Implementation
Contract
Identifies responsibilities
of the facility staff, ESL, M&C, and ESCO
Structure
Required submittal documents
and approval process
Decision making authority
and lines of communication
Process for modifications
to scope that impact energy savings
Key Points
Document can be modified
by mutual agreement
Document is shared with
all partners at beginning of construction
14
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
Suggestions
Be aware that this contracting
method isn00 all peaches and cream
There will be issues to
address and deal with
Staff involvement will be
required
Educating your administration
on the processes and benefits will probably be required
Select the best ESCO possible
(i.e. develop good selection criteria and committee)
Build a good team (ESCO,
facility staff, ESL, M&C, TPFA, SECO, 3rd party engineer)
Stay involved and understand
what is going on
Address issues promptly
and be part of the decision making
Be as flexible as reasonably
possible
Develop appropriate
lines of communication, keep them open, and make sure the partners follow
them
15
ESPC Workshop- Contracts
(Victor Moore, HHSC)
November 2, 2006
For More Information
Victor Moore
Director, Maintenance & Construction,
HHSC
Victor.Moore@hhsc.state.tx.us
(512) 206-5893
download Slide 1
