Louisiana Administrative Code
Title 34 - GOVERNMENT CONTRACTS, PROCUREMENT AND PROPERTY CONTROL
Part V - Procurement
Chapter 25 - Procurement of Professional, Personal, Consulting, Social Services, and Energy Efficiency Contracts
Subchapter A - General Provisions
Section V-2505 - Performance-Based Energy Efficiency Contracting [Formerly LAC 34:V.105]
Universal Citation: LA Admin Code V-2505
Current through Register Vol. 50, No. 9, September 20, 2024
A. Preparation of Requests for Proposals
1. Performance
contracts shall be considered to be consulting services contracts under the
provisions of title 39, chapter 17 of the Louisiana Revised
Statutes and shall be awarded in accordance with the provisions of
that chapter, the rules and regulations promulgated by the Office of State
Procurement pursuant to that chapter and this Section.
2. Prior to its preparation of an RFP, a
state agency, as defined in
R.S. 39:2
(hereinafter, "user agency") shall perform a needs analysis in accordance with
the provisions of title 39, chapter 17 of the Louisiana Revised
Statutes and the rules and regulations promulgated by the Division of
Administration, through its Office of State Procurement ("OSP") pursuant to
that chapter. Such needs analysis shall be in a form approved by the
Commissioner of the Division of Administration or his designated agent and
shall include a detailed audit of energy use.
3. Prior to its preparation of an RFP, a user
agency shall submit its needs analysis to the Commissioner of the Division of
Administration or his designated agent for approval.
4. Upon approval of a user agency's needs
analysis pursuant to this Section, such user agency shall prepare an RFP in a
form approved by OSP, which form shall require proposers to separately itemize
the costs and savings associated with each proposed energy cost savings measure
("ECSM"). In accordance with the provisions of title 39, chapter 17 of the
Louisiana Revised Statutes and the rules and regulations
promulgated by OSP pursuant to that chapter, every RFP shall indicate the
relative importance of price and other evaluation factors, shall clearly define
the tasks to be performed under the performance contract, the criteria to be
used in evaluating the proposals and the time frames within which the work must
be completed. Prior to advertising its RFP, a user agency shall submit it to
the Commissioner of Administration or his designated agent and obtain his
written consent to the advertisement of the RFP.
5. Upon approval of a user agency's RFP, such
user agency shall advertise its RFP in accordance with the provisions of title
39, chapter 17 of the Louisiana Revised Statutes and the rules
and regulations promulgated by OSP pursuant to that chapter.
B. Evaluation of Submitted Proposals
1. A user agency shall review any
proposals it timely receives in response to its RFP and shall submit to the
Office of Facility Planning and Control ("FPC") the results of its review,
along with each proposal that is responsive and responsible and otherwise in
accordance with the provisions of title 39, chapter 17 of the Louisiana
Revised Statutes, the rules and regulations promulgated by OSP
pursuant to that chapter and this Section. A user agency shall not make a final
selection from among the proposals it submits to FPC.
2. Prior to the award of any performance
contract, FPC shall evaluate all proposals submitted by a user agency for that
performance contract. In its evaluation, FPC shall include suggestions, if
appropriate, for the resolution of any unique issues arising in connection with
a particular proposed performance contract. FPC's evaluation shall also
include, but not be limited to, a consideration of the following:
a. whether proposed ECSMs are in compliance
with the provisions of
R.S.
39:1622;
b. whether proposed ECSMs will generate net
savings, as those terms are defined in Subsection E of this Section;
and
c. whether the proposed
protocol for measuring and verifying the energy savings guaranteed in the
contract conforms to the latest standards set forth by the International
Performance Measurement and Verification Protocol.
3. FPC shall, within 60 days of the receipt
of the submitted proposals, forward to the Commissioner of Administration or
his designated agent its written evaluation of the submitted proposals, along
with the results of the review of the submitted proposals by the user agency.
FPC shall not make a final selection from among the proposals it forwards to
the Commissioner of the Division of Administration except if FPC has been
designated as the Commissioner's agent for that specific purpose.
4. Prior to the award of any performance
contract, the Commissioner of the Division of Administration or his designated
agent may retain an independent consultant in accordance with this Section.
Such independent third-party consultant shall evaluate all proposals and
written evaluations submitted to the Commissioner of the Division of
Administration or his designated agent. Such evaluation shall be in accordance
with the provisions of title 39, chapter 17 of the Louisiana Revised
Statutes, the rules and regulations promulgated by OSP pursuant to
that chapter and this Section. After completing its evaluation, an independent
consultant shall submit to the Commissioner of the Division of Administration
or his designated agent the written results of such evaluation. An independent
consultant shall not make a final selection from among the proposals it
evaluates.
5. Prior to retaining an
independent third-party consultant pursuant to this Section, the Commissioner
of the Division of Administration or his designated agent shall require every
proposed independent consultant to execute a written certification verifying
that he or she has no direct conflict of interest as to the user agency that
requested the proposals to be evaluated, the proposals themselves and/or those
who submitted the proposals to the user agency. Such written certification
shall be in a form approved by the legislative auditor. In order to assist the
legislative auditor in verifying the independence of a proposed independent
consultant, such proposed independent consultant shall provide to the
legislative auditor any documentation or information the legislative auditor
requests. A proposed independent consultant shall not be retained, unless the
legislative auditor has determined that such proposed independent consultant
has no direct conflict of interest as to the user agency that requested the
proposals to be evaluated, the proposals themselves and/or those who submitted
the proposals to the user agency.
6. After completing his review of the
submitted proposals and evaluations prepared by the independent consultant, if
any, pursuant to this Section, the Commissioner of the Division of
Administration or his designated agent shall provide written notification to a
user agency that the Commissioner of the Division of Administration or his
designated agent has consented to the award of a performance contract to a
specified energy services company ("ESCO") or that he has not consented to the
award of a performance contract. Pursuant to the provisions of Title 39,
chapter 17 of the Louisiana Revised Statutes, the rules and
regulations promulgated by OSP pursuant to that chapter and this Section, such
consent shall be given to the responsible ESCO whose proposal is determined by
the Commissioner of the Division of Administration or his designated agent to
be the most advantageous to the state of Louisiana, taking into consideration
all of the evaluation factors set forth in the RFP, as well as any evaluations
or recommendations provided by the user agency, and the independent consultant,
if any. In the event that the Commissioner of the Division of Administration or
his designated agent determines that consent to the award of a performance
contract would not be advantageous to the state of Louisiana, he shall provide
the user agency with written reasons for his decision to withhold his
consent.
7. Except as explicitly
set forth in this Section, no party shall disclose information derived from
submitted proposals prior to the consent by the Commissioner of the Division of
Administration or his designated agent to the award of a performance contract
to a specified ESCO.
C. Negotiation of Performance Contracts
1. A user
agency shall negotiate with an approved ESCO a performance contract in a form
approved by OSP. The process of such negotiation shall be in accordance with
the provisions of title 39, chapter 17 of the Louisiana Revised
Statutes, the rules and regulations promulgated by OSP pursuant to
that chapter and this Section. The Commissioner of the Division of
Administration or his designated agent may require that an independent
consultant retained pursuant to this Section participate on behalf of a user
agency in the negotiation of a performance contract with an approved ESCO.
a. Notwithstanding any other provisions of
this Section, every performance contract negotiated pursuant to this Section
shall set forth the total units of energy saved, the method, device or
financial arrangement to be used to establish the amount of such savings, the
cost per unit of energy and, if applicable, the basis for any adjustment in the
cost per unit of energy during the term of the contract.
b. Notwithstanding any other provisions of
this Section, every performance contract negotiated pursuant to this Section
shall, with respect to each ECSM included in such performance contract and in
addition to fulfilling any other requirements set forth in this Section, state
the following:
i. the detailed scope of work
to be performed pursuant to the performance contract;
ii. the initial price to be paid by the user
agency;
iii. the annual energy cost
savings guaranteed by the ESCO;
iv.
the annual maintenance savings guaranteed by the ESCO, including, but not
limited to, services, parts, materials, labor and equipment;
v. the annual new maintenance costs,
including operating expenses added as a result of new equipment installed or
service performed by the ESCO; and
vi. the total annual savings guaranteed by
the ESCO. Total annual savings means annual energy cost
savings plus annual maintenance savings minus annual new maintenance
costs.
c.
Notwithstanding any other provisions of this Section, no payment shall be made
to an ESCO pursuant to a performance contract unless such performance contract
complies with Paragraph C. 1.
2. The term of every performance contract
negotiated pursuant to this Section and term of any obligation incurred by a
user agency to fund a performance contract shall be for a period equal to the
lesser of 20 years or the average life of the equipment installed by the ESCO
and shall contain a guarantee of energy savings, which guarantee shall, at a
minimum, ensure total annual savings sufficient to fully fund any financing
arrangement entered into pursuant to such performance contract.
3. Every performance contract negotiated
pursuant to this Section shall contain the following clause: "The continuation
of this contract is contingent upon the appropriation of funds by the
legislature to fulfill the requirements of the contract. If the legislature
fails to appropriate sufficient monies to provide for the continuation of the
contract, the contract shall terminate on the last day of the fiscal year for
which funds have been appropriated. Such termination shall be without penalty
or expense to the agency, board or commission except for payments which have
been earned prior to the termination date."
4. A user agency shall submit a negotiated
performance contract to OSP for its review and approval. A user agency's
submission of a negotiated performance contract shall be in accordance with the
provisions of title 39, chapter 17 of the Louisiana Revised
Statutes, the rules and regulations promulgated by OSP pursuant to
that chapter and this Section.
5.
At the time a performance contract is executed, the contracting ESCO shall
submit a certified or cashiers check, payable to the Commissioner of the
Division of Administration or his designated agent, in a sum equal to no more
than 2 1/2 percent of the total value of the proposed performance contract. The
percentage of such total value and the means of calculating such total value
shall be determined by the Commissioner of the Division of Administration or
his designated agent and shall be set forth in the performance contract.
D. Audits of Performance Contracts
1. An ESCO that enters
into a performance contract shall provide the user agency with all performance
information and other reports required by the performance contract.
a. An ESCO's reports to the user agency shall
conform with the standards of the International Performance Measurement and
Verification Protocol.
b. An ESCO's
reports to the user agency shall, in addition to fulfilling any other
requirements set forth in its performance contract or in this Section, state
the following:
i. the name of the user
agency;
ii. the ESCO's name and
address;
iii. whether the payment
obligation under the performance contract is either:
(a). set as a percentage of the annual energy
cost savings attributable to the services or equipment under the performance
contract; or
(b). guaranteed by the
ESCO to be less than the annual energy cost savings attributable to the
services or equipment under the performance contract;
iv. the total annual savings guaranteed by
the ESCO;
v. the total amount the
user agency is required to pay under the performance contract and the term of
the contract;
vi. the total amount
paid to date by the user agency and the amount paid each year to date under the
performance contract;
vii. any
costs paid by the user agency which were associated with the set-up or
maintenance of the performance contract or with repair or maintenance of the
equipment used under the performance contract;
viii. the annual cost to the user agency of
energy or other utilities beginning two years prior to operation of the
performance contract and during the operation of the performance contract;
and
ix. the annual energy cost
savings each year, shown also as a percentage of the annual amount to be paid
by the user agency under the performance contract. When calculating annual
energy cost savings, maintenance savings shall be included. Maintenance
savings means operating expenses eliminated and future capital
replacement expenditures avoided by the user agency as a result of new
equipment installed or services performed by the ESCO.
2. Upon a request by a user
agency, by the Commissioner of the Division of Administration or his designated
agent or by the legislative auditor, an ESCO shall provide any working
documents, accounting records or other materials relating to costs, pricing or
any other aspect of the ESCOs performance pursuant to a performance contract.
Documents, records and other materials provided by an ESCO in accordance with
this Section shall be subject to review and verification by a user agency, by
the Commissioner of the Division of Administration or his designated agent, by
the legislative auditor, or by an independent third party selected by a user
agency, by the Commissioner of the Division of Administration or by the
legislative auditor.
3. User
agencies shall provide to the legislative auditor copies of all performance
information and other reports submitted by an ESCO pursuant to a performance
contract or this Section. The legislative auditor shall conduct periodic audits
of performance contracts, both during the term of such performance contracts
and upon the completion of such performance contracts.
E. Retention by User Agencies of Net Savings Generated by Energy Cost Savings Measures
1.
Pursuant to
R.S.
39:254.B(l), a user agency that is able to
demonstrate net savings from implementing an ECSM by means of a performance
contract may retain its net savings relating to such ECSM, until the investment
costs of implementing the ECSM are paid in full, and thereafter may retain one
half of such net savings over the remaining useful life of the ECSM. Such
retained net savings shall be from funds appropriated or allocated to the user
agency for utility costs.
2. The
Commissioner of the Division of Administration or his designated agent shall
develop and promulgate such rules and regulations as are necessary to provide
for the measurement and verification of net savings relating to
ECSMs.
3. For the purposes of these
rules, ECSM refers to a repair, equipment modification, procedure, course of
action or other step taken which lowers energy costs.
4. For the purposes of these rules,
net savings from the implementation of ECSMs shall be defined
as measurable and verifiable energy cost savings that directly result from such
implementation and shall be determined in accordance with the following
provisions.
a. ESCOs shall employ energy
savings measurement techniques that embody the best practical methods of
determining net savings generated by the ECSMs to be evaluated. Such
measurement techniques shall be fully defined and set forth in the RFP and
performance contract that includes the ECSMs. In selecting a measurement
technique, an ESCO shall consider the complexity of the ECSM to be evaluated
and other factors that may affect energy use, such as changes in the mission of
a facility, population, space utilization and weather.
b. Energy savings measurement may be based
upon estimates, calculations or computer models, if metering is not
practical.
c. Every RFP and
performance contract shall set forth in detail the method to be used by an ESCO
in order to determine the unit energy costs by which an energy baseline and
energy savings are to be multiplied. For the purposes of these rules, an energy
baseline shall be defined as the amount of energy that would be consumed
annually without implementation of a given ECSM and shall be based upon
historical metered data, engineering calculations, submetering of buildings or
other energy-consuming systems, building load simulations, statistical
regression analysis, or some combination of these methods.
d. The selection of every energy savings
measurement technique and method of determining unit energy costs or energy
baseline shall be subject to the approval of the Commissioner of the Division
of Administration or his designated agent, who shall have the authority to
modify such techniques and methods if he determines, in his sole discretion,
that such modification is warranted by changed conditions or other
circumstances affecting the accuracy or appropriateness of such techniques and
methods.
e. Net savings must be
real savings of money that the state of Louisiana either is currently spending
or has budgeted to spend in the future. Such money must be available in the
state's budget for payments against the performance contract involved. Net
savings may be either recurring or one-time cost savings.
f. Examples of net savings shall include, but
not be limited to, recurring operation, maintenance and repair tasks, which are
currently performed by the state or its agents and which are directly related
to the energy-consuming system affected by an ECSM. The savings associated with
such tasks shall be net savings, if the ESCO assumes such tasks, reduces the
burden of such tasks or eliminates such tasks. The Commissioner of the Division
of Administration or his designated agent shall determine whether an ESCO's
action with respect to a given recurring task generates net savings and shall
determine the value of such net savings.
g. Net savings may also include one-time cost
savings of money budgeted by the state and available to fund a project or task
that is made unnecessary by the implementation of an ECSM. The Commissioner of
the Division of Administration or his designated agent shall determine whether
an ESCO's action with respect to a given one-time project or task generates net
savings and shall determine the value of such net savings.
h. Any utility company rebates or other
incentives arising in connection with the implementation of an ECSM shall be
the property of the user agency. An ESCO shall provide any assistance necessary
in order to permit a user agency to apply for and receive such rebates or other
incentives.
i. In accordance with
the provisions of
R.S.
39:1622(H), if at any time
after the execution of a performance-based energy efficiency contract, a state
agency makes a unilateral change or modification to the scope of work under the
contract, the annual energy cost savings attributable to the services or
equipment shall be adjusted to account for any expended costs and any projected
savings that can no longer be measured or verified as a result of the change or
modification. However, any adjustment that reduces the annual energy cost
savings attributable to the services or equipment by 20 percent or more shall
require approval of the Joint Legislative Committee on the Budget prior to the
amendment of the contract. This Subsection shall apply to all performance-based
energy efficiency contracts in effect on and after January 1, 2010, and all
future contracts executed pursuant to this Section.
F. Grandfathered Performance Contracts
1. Notwithstanding any other
provision of this Section, where an RFP or a proposed performance contract is
exempt from the application of subparagraphs (a) through (d) of
R.S.
39:1622(E)3.a.(ii), the
selected ESCO shall, at the time a performance contract is executed, submit a
certified or cashiers check, payable to the Commissioner of the Division of
Administration or his designated agent, in a sum equal to no more than 1
percent of the total value of the proposed performance contract. The percentage
of such total value and the means of calculating such total value and the means
of calculating such total value shall be determined by the Commissioner of the
Division of Administration or his designated agent and shall be set forth in
the performance contract.
2. Where
an RFP or a proposed performance contract is exempt from the application of
subparagraphs (a) through (d) of
R.S.
39:1622(E)3.a.(ii), such RFP
or proposed performance contract shall not be subject to the application of
Subsection A or B of this Section but shall be subject to the remaining
provisions of this Section.
AUTHORITY NOTE: Promulgated in accordance with R.S. 39:1490(B).
Disclaimer: These regulations may not be the most recent version. Louisiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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