April 2003
Innovative Solid Waste
 Contracting Methods


I  Acknowledgements
his Resource Management Contracting Manual was developed by the
U.S. Environmental Protection Agency's (EPA) WasteWise program.
                        EPA wishes to thank WasteWise partner organizations and others that have
                        been instrumental in developing and testing resource management. The
                        majority of information in this manual comes from resource management
                        projects with the following partner organizations:
                          Clark County, Nevada
                          Fair-view Health Services*
                          General Dynamics Defense Systems*
                          General Motors Corporation*
                          Healthcare Waste Solutions, LLC
                          Jackson County, Missouri*
                          Massachusetts Department of Environmental Protection*
                          Northeast Utilities*
                          One Beacon Street (CB Richard EUis-Whittier Partners)*
                          Public Service Enterprise Group (PSEG)*
                          Iowa Department of Natural Resources
                          The Saunders Hotel Group
                          Shattuck Hospital
                          Texas Instruments*
                          West Des Moines School District

                          * WasteWise partners


                      Chapter 1: Introduction	1
                        What is RM Contracting?	1
                        What are the Benefits to Waste Generators?	<	2
                        Using This Manual	3
                      Chapter 2: Planning for RM Contracting	5
                        Establish an RM Team	,	5
                        Define Goals and Objectives	7
                        Develop Work Plan and Timeline	7
                        Identify and Overcome Internal Barriers to RM Contracting	8
                      Chapter 3: Characterizing Your Current Waste/Recycling
                                  Activities  and Costs  	11
                        Identify Current Waste and Recycling Activities	 12
                        Estimate Current System Cost	15
                             External contracted  costs	15
                             Internal costs	16
                        Estimate Baseline Recycling Rate	17
                      Chapter 4: Designing Your RM Program	19
                        Define Program Scope	19
                             What materials, waste streams, and services to include	19
                             Tying your cost baseline to services in the RFP	21
                             What to do with miscellaneous waste streams	21
                             What if existing contracts have restrictions	21
                         Develop Your Commercial RFP	'.	22
                             Elements of an RMRFP	22
                       Chapter 5: Selecting  an RM Contractor	25
                         Identify Contractor Pool	25
                         Issue the Request for Proposal (RFP)	26
                             Issue the RFP	26
                             Convene pre-bid meeting	,	26
                             Receive bidders questions and provide responses	27
                             Inform internal personnel about the RFP	27
                             Accept bids or proposals and acknowledge receipt	28
                         Evaluate Bids and Select Contractor	28
                             Develop evaluation  criteria and weightings	28
                             Evaluate cost savings using baseline costs	29
                             Down-select bidders for further discussion/evaluation	31
                                            i ii

Chapter 6: Signing the Contract and Measuring Program
            Success	33
  Final Notes on Negotiation and Inking the Contract	,	33
  Measuring RM Contractor Performance and Program Success	34
                             i                  i !'
  Appendix A:   RM Resources .,	 37
     Resource management ....'.	37
     Waste composition and characterization	37
     Recycling and materials recovery	38
     Weight-to-volume conversion factor	38
  Appendix B:   Sample RM Presentations	 39
     1. Presentation: Introduction to resource management 	39
     2. Presentation: Baseline estimate of resource management potential .... 45
  Appendix C:  Sample Work Plan	51
  Appendix D:  Model Language for an RM Request for Proposal ...... 54
  Appendix E:   RM Compensation Options	87
  Appendix F:   Comparison of Cost Proposals  	92
     1. Estimate savings potential	92
                             I                  I !                  '    ' !"
     2. Modeling the costs and benefits	92
     3. Testing the sensitivity of your estimation	94
  Appendix G:  Climate Change Benefits	95
  Appendix H:  WasteWise Partners Innovate with
               Resource Management	98
               WasteWise parftaer registration form	100

  Chapter   1  :    Introduction
What  is RM  Contracting?
                          TT"\ esource management (RM) is an innovative contractual partnership
                          f^ between a waste-generating organization and a qualified contractor
                         JL V. that changes the nature of current disposal services to support waste
                         minimization and recycling. As a performance-based contract strategy, RM
                         taps into the expertise of external contractors to bolster -waste reduction and
                         recycling through value-added services, such as improved reporting, dedicated
                         customer service, and analysis. The key to success in RM contracting is chang-
                         ing the compensation structure to provide incentives for contractors and
                         reward them for achieving mutually determined goals—shifting the contrac-
                         tors' profitability model from  "haul/dispose more volume'" to Kminimize
                         waste and manage resources better.'"
         Examples of Successful RM
          '     Implementation
              .-J.i^-aS,--^,,,  <  ">      ^
  , (Auto* Manufacturer):  ;;,"/„"•-•
   • o Reduced waste ma h|ge'rjtent -expenses by
    "30" percent in "the first 3 years
  " * vehicle wastje.
   Public Service Interpjisjrc£rc»up' (Utility):
   • sRediicfd hazardou'sj/vasterfKom 1,460
   1< tpnfto 103 tons,(1992xto 2000), and -'; -
    - recycled more" 'trTarT94 percent of non- , "" "
    "                  (IdbO). ^«f«» '™: '.t?
  >  Reducfed*total waste management costs
     *,28 percent
  :    irT 1 990 to more thaa'Sfi p^ccent in 1 999.
   • ,Recluced washes, and recycling costs by 60
   .\^percent through avoided dispo'sfrt/cdsts^'^
    " ,and incre'a^ed'recyciing revenue	-
  RM contracting is based on three premises: 1) significant cost-effective opportuni-
ties to reduce waste, boost recycling, and otherwise optimize services exist; 2) con-
tractors will pursue them when offered proper financial incentives; and 3) financial
                       incentives to contractors are supported by the savings
                       generated through cost-effective improvements to your
                       current waste/recycling system. For example, if contrac-
                       tors identify cost-effective recycling markets for disposed
                       materials or techniques for preventing waste altogether,
                       they receive a portion of the savings resulting from the
                       innovation. This arrangement enhances the recovery of
                       readily recyclable materials while promoting opportuni-
                       ties to develop new markets for difficult-to-recover
                       materials. As a result, RM promotes a business-driven
                       effort—rather than regulatory initiatives—to  make waste
                       reduction and pollution prevention a priority.
                          Since most organizations contract for waste disposal
                       services, recruiting a waste/recycling contractor is a
                       standard part of business operations. This manual can
                       help you evaluate, plan, and implement an .RM program
                       by hiring an RM contractor. It provides a step-by-step
                       process for organizations interested in developing an RM
                       program—from evaluating your current activities and
                       costs, to issuing a request for proposal, to designing
                       appropriate financial incentives, to implementation.

Additional resources
on RM contracting
are listed in
Appendix A.
What Are the Benefits to Waste  Generators?

       Solid waste and recycling contracts directly influence how the vast majority of
       waste streams are managed. Most waste and recycling contracts, however, feature
       a profit incentive to contractors to maximize disposal levels (hauls) and/or a lim-
ited scope of service with multiple contractors handling separate waste streams or recy-
clables. This "fragmented" approach often lacks an emphasis on recycling and resource
efficiency1. Furthermore, waste and recycling contracts are often loosely managed—once
rates are established, waste generators tend to only contact their contractors if waste and
recycling containers overflow. For these .reasons, traditional contracts do not tend to
support waste reduction efforts.
   RM makes good business sense because it allows organizations to save money, while
receiving better service and improving resource efficiency. RM contracting helps you
achieve a higher level of recycling and wpte minimization. Although the degree of
success in existing recycling and waste minimization programs varies widely in different
organizations,  even the most successful pirograms reach a plateau. Benefits of RM
contracting include:
• Reduced cost and potential liabilities
• Increased quantities of materials currently being recycled

• Addition of new materials for recycling
• Increased waste minimization opportunities

• Improved data tracking and reporting
   Most organizations believe they could improve current recycling operations and
waste minimization if they had more resources. Using an external RM contractor to
perform additional activities for which there are no internal resources helps overcome
this problem. RM contractors bring expertise that is simply not found in traditional
waste and recycling contracts.                               :
   A number of WasteWise partners have already demonstrated that RM contracting
benefits their bottom line while also conserving resources. Based on their experiences—
highlighted in the enclosed  WasteWise Update—and the valuable input they have provid-
ed for this manual, WasteWise  encourages other organizations to explore RM and the
benefits of implementing this innovative contracting strategy.
                           1 Resource efficiency refers to source reduction, reuse, and recycli
                           other means to decrease generation and disposal of waste (e.g
                           procurement/delivery techniques, material handling, or use).
 g/diversion, or

 Figure 1.1: Activities by Chapter
              Relevant Guidebook Chapter
 Major Activities
                    Planning for
                   RM Contracting
                  Characterizing Your
                   Current Contracts,
                 Waste/Recycling Syste
                      and Costs
                  Designing Your RM
                     Soliciting an
                    RM Contractor
                   Signing the Contract
                    And Measuring
                    Program Success
Form team (define roles) and
assign coordinator/champion
Secure management support
Select facility or facilities

Map processes and current
service levels
Perform cost accounting
Select waste streams and
life cycle scope
Develop RFP language
Determine compensation and
incentive options
Distribute RFP
Select an RM contractor
Negotiate contract
Ongoing monitoring, issue
resolution, and performance
Using This Manual

      'his manual is intended to help commercial entities consider and implement
       an RM program. The term "commercial" in this guide is meant to include
       all commercial, institutional, and industrial settings, as the contracting
methods in each of these settings is similar. The step-by-step approach to establish-
ing an RM program is shown in Figure 1.1. Note that the appendices contain many
useful tools such as sample language to develop a request for proposals and suggest-
ed compensation mechanisms.
   This manual uses a variety of icons to highlight key concepts and suggestions
for the reader.
                The  toolbox icon highlights references to tools listed
                in the appendices.

                The  stop sign signifies key "decision points," which are critical
                steps in the RM process where the internal team analyzes and
                discusses a set of data or information and comes to a consensus
                on whether/how to move forward.
               The hand signifies work steps required for a particular phase in
               the RM process.

               The light bulb indicates ideas, examples, and
               success stories.


  Chapter   2:    Planning   for   RM
       efore beginning the planning process, you should conduct a quick
       appraisal of your current system to identify any immediate impedi-
       ments to RM contracting.. Fundamental questions to consider include:
Is RM possible for
your organization?
•  Can you hire a new contractor within the next year or do you have long-term
   contractual commitments?

•  How many vendors currently handle your waste and recyclables?
•  If you were given more resources, do opportunities to improve your current
   solid waste/recyclables management exist (including reuse and waste reduction

   If your answer to the first question is that you are locked into your current con-
tract for at least 2 years, and you will incur penalties if you break it, you will likely
want to postpone development of an RM program until about 8 months prior to the
end of the contract. The second two questions can help you assess whether RM can
offer benefits. If you have two or more vendors,  transitioning to RM would allow one
contractor to take over all waste-related services. By doing so, the RM contractor can
adopt a systems approach to manage all waste-related activities, instead of multiple
contractors taking a piecemeal, waste-stream-by-waste-stream approach.
   RM contracting reinvents the current processes of handling and managing
resources—or what was previously known as waste. Like  any new business model,
fundamental change might be resisted or misunderstood. RM's success relies, by and
large,  on acceptance of innovations and a fundamental change of mindset. Careful
planning lays the foundation a successful RM program.

Figure 2.1: Initial Planning Steps for an RM
              Contracting Program
Establish working team and
secure management support
Define goals, objectives, and
•m k
Develop work plan and timeline

                         Establish an RM Team
                                 address all concerns during program development and implementation, you
                               must involve key stakeholders from the initial planning stage. Equally impor-
                               tant is securing top management commitment at the outset. You can take
                         several critical steps to accomplish this:

Steps to establish an
BM team.
 See Appendix B for a
 sample presentation
 to use in explaining
 RM contracting to
 upper management.
                                                    i  I
• Assign an RM leader to spearhead the planning process and oversee RM imple-
  mentation. The team leader must;haye knowledge of current internal waste and
  recycling activities, as well as an understanding of the current external contract-
  ing process,                   i
• Assemble a working team with representatives from departments or divisions
  with responsibilities for people who generate or handle waste or manage
  waste/recycling activities. Include procurement staff that oversee contracts (or, in
  the absence of a contract, those who hire waste/recycling contractors under
  informal agreements). Also include representatives from finance, accounting,
  environmental health and safety operations, facilities engineering, manufacturing,
  and legal staff. Some roles might not apply, depending on .the structure of your
  organization/facility.                                 ;
     jllMl^mm.				- -	-	•irmrri	• ^^•yM""'""""""^«mnMB»^mAjafeaAL	ijiijiuiii :^!^^maillMi^~.*J.v~~iiaai^^
Figure 2.2: A Cross-functional RM Team
                               Material Management/
                                                                  Environmental, Health,
                                                                      and Safety
                                      Upper   »,
                                    Management It
                                     Champion  "'

                                    Other Business Units
   A cross-functional team ensures idhat the concerns of different functional units are
 addressed during the planning and implementation stage. The team members have
 access to vital information for characterizing the current waste management process.
 They also play a key role in communicating with and securing buy-in from their
 respective divisions. A team with procurement, environmental, and operational'
 individuals helps you strike the right balance between cost reduction, environmental
 goals, and service needs.          |
 • Secure top management support early in the development of an RM program.
   Appropriate management decision-makers must be informed about, and commit-
   ted to, the program during its development and throughout its implementation.
   Identifying and establishing communication channels with an upper management cham-
   pion is important. At a rriimmum,;the champion should be regularly informed of
   the working team's progress. The champion plays a key role in ensuring that suf-

Sample goals and
objectives are avail-
able in the sample
KFP in Appendix D.
Example RM goals.
  ficient resources are allotted for the whole program and providing support and
  direction throughout the process. He/she will be extremely valuable in helping
  your organization overcome any potential institutional or organizational barriers.
  The management champion is essential to ensure timely and organized commu-
  nication between the RM team and other upper management decision-makers.
• Define the roles of the working team and the responsibilities of each team
  member. Individual responsibilities will generally align with respective organiza-
  tional units.

Define Goals  and Objectives
        our goals and objectives should clearly identify why your organization
        wants to implement an RM program and what it expects the program to
        achieve. "Your goals should be developed with support from your team and
should address the most pressing needs of the organization. Where possible, RM
program goals should be linked to broader organizational strategies or goals (e.g.,
mandated recycling targets, corporate environmental policy and goals, EMS).
  Goals can include the following:
• Promote efficient use of resources and cut costs by reducing waste at the source,
  reusing materials, and recycling.
• Improve environmental performance and workers' health and safety.
• Contribute to improvements in quality of production (e.g., by helping reduce
  scrap rates).
  Specifically, clear objectives and measurable targets contribute to achieving each
goal. Objectives should lend themselves to measurable results through performance
metrics once your program has been implemented. Achieving consensus on pro-
gram goals and objectives at the beginning of the process will avoid backtracking or
straying "off course" as the program develops.

Develop Work Plan and Timeline
        nee the team establishes and agrees upon the goals,  objectives, and targets,
        it should develop a work plan outlining all stages of the RM contracting
        process. The three major tasks to include in the work plan are:
        Evaluate your current system and conduct a comprehensive cost baseline.
        Design your RM program and issue a Request for Proposal (RFP).
3 .
                                 Select an RM contractor and implement the program.
                            Under each task, the work plan should itemize what actions are needed, who will
                          be responsible, when the tasks will be completed, and what resources are required.
                          Establish regular meetings with the team to complete the tasks of the work plan.
                          Make sure you establish a recordkeeping mechanism to record decisions and
                          responsibilities for these meetings.

See Appendix C for
a sample work plan.
Ideas for overcoming
  To establish an internal timeline, use the three major tasks on the previous page
as milestones. The first task of evaluation and conducting the baseline might take
between 1 to 3 months, depending on the speed of your team and the availability of
data. Designing your program and finalizing the RFP can take between 1 to 2
months. Finally, from the point the RFP is issued until you implement a program
should require 2 to 3 months. The eintire process can be completed in 4 to 8
months. Note that during this time, there -will be periods of inactivity, such as wait-
ing for RFP responses.           j                   i j
  Establishing goals, a project timeline, and a work plan can be accomplished by
convening a kick-off meeting in which all team members participate and contribute
their thoughts. If possible, the management champion should also participate to
show support. The team leader shoiild create draft materials and distribute them
prior to the kick-off meeting.

Identify and Overcome Internal Barriers  to
RM  Contracting
        Developing an RM program involves introducing some very different ideas
        and processes. Any type olF change—even those that promise net benefits
        to the organization—can upset the balance of what is comfortable and
familiar. Some internal obstacles you might encounter are summarized in the table
below. The majority of the obstacles can be overcome through effective communi-
cation,  good listening, and careful planning and preparation 'that address the under-
lying reasons for reluctance or skepticism. Internal consensus is critical to secure an
environment in which the contractor is free to focus all of its energy on improving
your system and not becoming sidettacked by internal discord.
                         Table 2.1: Internal Obstacles and Suggested Strategies
                                    Internal Obstacle
  Lack of understanding and realistic
  expectations of RM contracting.
  RM is a new contractual relationship
  that will succeed when the company
  understands it is a true partnership
  and that the contractor will be inter-
  acting more in internal operations, not
  just at the loading dock        !
Provide education and outreach.
Clearly state the^ expected benefits and
realistically convey the required com-
mitment. Use information from case
studies (in presentations in Appendix
B) to show how RM contracting has
worked in other organizations.

         Internal Obstacle
"We can do it better internally"
argument. There might be resistance
to the suggestion that an "outsider"
can improve the current system. An
associated concern is the perceived
threat to job security for those with
responsibilities for waste/recycling or
contracts management.
Conduct an objective assessment of
the current waste/recycling system
to look for potential opportunities
to improve cost-effectiveness. RM
contracting is not strict "outsourcing,"
but adds resources to recycling and
waste reduction activities.
Loss of control. An unspoken fear is
that in providing an increased scope of
service and more access to a single
RM contractor, some element of con-
trol is surrendered. In fact, organiza-
tions often gain greater visibility and
control of their services and resources
because they possess better informa-
tion to make decisions. Under RM,
you make the decisions, set the goals,
and guide the process, while the con- ,
tractor brings ideas, innovations, and
resources to help implement change.
Properly characterize the nature of
the relationship between your
organization and the RM contrac-
tor. It is a partnership, but you remain
the final decision-maker. The RM
team and the contractor should estab-
lish a mutually agreed upon protocol
for decision-making and resolving
concerns that might arise.
Waste/recycling issues are not a
priority. The costs of waste and recy-
cling contracts often comprise less
than 0.1 percent of total operating
costs for an organization. Thus,
reducing costs in this arena are gener-
ally not a priority for companies, and
waste and recycling often does not
receive management attention.
Conduct a baseline assessment to
identify how much your organization
is actually paying for waste, recycling,
and associated activities. This activity
might be eye-opening to some and
might be what is needed to stimulate
interest in pursuing the RM contract-
ing option.

I1       l!       :   :„ 111

Chapter    3:    Characterizing   Your
                            Current   Waste/
                            Recycling   Activities
                            and   Costs
                         ~Jf  ~J~nderstanding your current waste and recycling system,—internal
                         i    I activities, contracts, current recycling levels, and associated costs—is
                         X—X  crucial for you to evaluate KM. contracting. This "baseline" will be
                        used to design key elements of an KM program, including the nature of ser-
                        vices you wish to receive, pricing structure, and financial incentives. In estab-
                        lishing a baseline, you will also uncover areas for improvement for your cur-
                        rent program. Thus, your current waste and recycling baseline is a systematic
                        documentation and cost assessment of activities you are currently performing.
                        At the same time, it allows you  to identify what you are not doing and what
                        activities an KM contractor could perform to help you reduce waste and costs.
                           In conducting the baseline assessment, you will be forced to question how materi-
                        als you purchase ultimately end as waste or recyclables. After all, any material that
                        ends as waste is originally purchased, delivered, stored, and used. It is then consoli-
                        dated and collected by an external contractor and ultimately disposed of or recycled.
                        These activities, during any material's life cycle (see Figure 3.1) within your organi-
                        zation, will comprise the baseline.

                           The material life cycle provides a framework to help you characterize your waste
                        and recycling system and the costs associated with it. Through material procure-
                        ment, product/process design, material use, and internal material handling processes,
                        your organization has a direct influence on the types and composition of waste gen-
                        erated and how materials are ultimately managed at the end of their life. Note that
                        activities related to waste minimization and reporting cut across all other internal
                        activities in the material life cycle. Indeed, waste minimization activities can occur at
                         Figure 3.1: Material Life Cycle (Waste Generator
                                            Internal Activities
External Contract Activities
                                                1 1

Steps to characterize
Examples of external
contract activities.
any point in a material's life cycle. Note also that the stages of the life cycle are cate-
gorized by internal material management activities and external waste and recycling
contractor activities. This distinction is important because, at its core, RM contract-
ing seeks to provide external contractors with more responsibility over internal activ-
ities to assist you in diverting more waste or eliminating waste altogether.
   There are three key steps to characterizing your waste and recycling system. Using
the material life cycle, your baseline is made from the completion of the following steps:
1. Identify internal and contracted waste/recycling activities
2. Estimate current costs for each waste and recycling activity
                                                   I !        •
3. Estimate current diversion rates                      ;
   By design or by default, many iniiividuals in your organization affect waste relat-
ed activities. This chapter will help you document what your organization is already

Identify Current Waste and  Recycling
Activities                                    ;
                               i        *             i
       This first step is primarily meant to identify major activities performed by
       internal staff and external contractors related to waste and recycling. Once
       current activities have been identified, you will assigr^ costs to each task.
Remember that as you gather data on what you are doing in this first step, you
might be able to capture much of the cost data required for the next step.
   At the end of this first step you should have three lists: 1) external contractor activi-
ties, 2) internal activities related to waste or recycling initiatives, and 3) internal areas
where little or no activity is taking place. Think of this third list as your "wish list" or
areas for improvement that can be addressed by an RM contractor.

Table  3.1: Sample Record of Externally Contracted Activities
Facility A
Facility B
Facility C
Facility D
Number of Contractors
Frequency of Service
3x week
Trash: 3x
week pick-up
paper: Ix
OCC and paper
Metals: Ix month
OCC & office
paper: Ixweek
Aluminum: Ix
OCC & office
paper: Ix weekly
Aluminum; Ix
Organics: Ix weekly
Metals: on call
Trash: $90/haul, $55/ton
rip fee
Monthly fee: $$50/month/
compactor (compactor rental,
hauling & disposal)
Additional pick-up: $125/haul
Trash: $110/haul, $70/ton
landfill tip fee, $105/month
container rental
Monthly fee: $275/month/
container (hauling & disposal)
Container rental: $75/month
Shredding fee for confidential
paper: $3/minute
No service fee
No service fee
Receive half of
the revenue
from OCC and
No fee except
for organics
collection fee)

   External contracted activities should not be difficult to identify (see Table 3.1).
Determine how many contractors are serving your facilities, the service received,
the current frequency of service, and length of service contract. For example, you
might have one solid waste hauler that services four containers 7 days each week
and two recycling companies that come to your site weekly. Your current contract
or hilling statements can tell you your current service levels. Listing the current ser-
vice level and the compensation structure for the external contracted activities will
provide the foundation to assign costs to contracted services. Table 3.1 shows a sam-
ple of records on service arrangements and levels for externally contracted activities.
   Current internal activities might be a bit more challenging to identify. Table 3.2
shows major functions, responsibilities, and cost elements (applicable for estimating
costs in next section) for each internal activity. As you go through the activities in
the table, note which of the activities are being performed, who has responsibility
for each, and where each is being performed. Engaging the whole RM team in. this
exercise is important because team members will have different perspectives on
waste and recycling activities. You should brainstorm with your internal team to ask
numerous questions related to the life-cycle stages such as:
• Who manages the contract? What activities are involved?
• Who communicates with contractors when problems arise or additional service is
• How are waste and recyclables collected  internally?
• Who is responsible for internal waste and recyclables movement, consolidation,
   and processing (e.g., bailing or sorting of recyclables)? What activities are
• If janitorial contractors are responsible for internal material movement, what is
   their role and who manages their services?
• Do we have anybody who devotes time to identifying waste reduction or recy-
   cling opportunities? What does this involve?
•  Do we systematically look at how material  choices in packaging, product design,
    and procurement affect downstream activities?
    As you examine each material life  cycle stage (see Table 3.2), list the waste and
recycling activities currently being performed. For example, note who is responsible
for issuing the waste contract, who interacts with waste and recycling contractors,
and who has responsibility over waste minimization. Make sure you identify individ-
uals who need or gather waste data for any types of reports or regulatory permits as
well as individuals who handle billing and paying contractors.

                    Table 3.2: Sample Organizational Functions,
                               Responsibilities, and Cost Elements
Examples of Internal
Life Cycle

Associated Cost Elements

Opportunities to Improve

External Contract Activities
Waste hauling
and disposal

hauling and

• EH&S*
• Facilities
• Janitorial

• Facilities
• Janitorial

• Waste hauling and disposal
fees for external
• Labor for information tracking
and reporting on waste and
service levels
• Recycling processing fees for
external contractors
• Labor to track recycling levels
and revenue from sales of
recyclables '
• Recycling revenues

• Optimize waste hauling
• Improved reporting on waste and service

• Increased recycling ofmaterials that
are currently recycled
• Explore recycling markets for other
• Optimize recycling hauling
• Improved education to minimize
• Improved reporting on recycling and
service levels
Internal Activities ;





Waste related


process design

• Facilities
• Janitorial
• Operations
• Janitorial
• Facilities

• Operations
• Facilities
• Janitorial

• Facilities
• Janitorial
• Operations
• Operations
• Facilities
• Training

• Waste storage
• Inventory
• Material
• Facilities or
whoever manages
janitorial services
and waste and
recycling services
• Design and '
choose the types

• Labor to gather reporting data
• Labor to monitor hazardous
waste management

• Labor and expenses associated
with onsite consolidation of
materials («.g., bailing of
recyclablesj operation of
• Labor and expenses associated
with onsite waste collection,
material separation, and waste
• Staff time 1:0 identify and
implement.specific waste
minimization program

• Labor to ububleshoot problems,
maintain manufacturing
operations, etc.
• Training on hazardous material
• Onsite stoipge and requirements
for hazardous and non-
hazardous waste
• Management of waste/recycling
• Management of janitorial
• Billing validation/payment

• Labor to l6ok at the choices
of material use that allow
increased reuse and recycling,
or minimis:e downstream waste
• Improved reporting in waste and
recycling service levels
• Improved tracking and reporting on
hazardous materials

• Minimize contamination
• Optimize!onsite material consolidation

• Improvement in at-source separation
• Increase recovery ofmaterials through
optimizing internal material handling
process :
• Improvement in onsite waste treatment
• Source reduction
• Increased recycling
• Increased waste diversion

• Process improvement can lead to
reduction' in non-product waste
• Improved training on hazardous material
handling to minimize accidents

• Less waste stored on site

• Establish transparent billing structure
minimizes labor to track and validate cost
• Consolidation of waste/recycling
contractors minimizes administrative cost
• Environmental preferential procurement

• Work with supply chain on packaging
• Reusable|drums/pallets initiatives
• Inclusion of waste minimization as one
criterion in material choice

                     *EH&S - environmental, health, and safety

  You might find that your organization does very little internally to proactively
manage waste and recyclables. Research and experience shows many organizations
simply do not devote much time or attention to waste minimization on a continu-
ous basis, probably because waste is typically a small fraction of overall operating
costs and is not a core activity of many organizations. Research further shows that
cost saving opportunities do exist, and most organizations admit they could improve
this area of business if they could devote more time or resources.
  An important task in this step is to identify what additional waste-related activi-
ties currently are not performed (or are performed on a limited basis), but which
you might perform if you had more people, time, or money to do them. This step
will constitute your third list that you can consider your "wish list." For example,
better education and training, expanded programs to recycle other materials, and
improved research on secondary commodity markets are all examples that can be
put on your wish list. This is where an RM program can help your organization—to
use external contractor expertise and resources to continuously improve your waste
and recycling system. The whole point of an RM program is to encourage an exter-
nal RM contractor to devote resources to internal activities where you are doing lit-
tle or nothing.
   You should have three lists before moving to the next step.
• A list of external contractor services and responsibilities (similar to those on
  Table 3.1).
• A list of internal activities you are currently conducting.
• A wish list defining the scope of services you will request in an RM program as
   developed in Chapter 4.

Estimate Current System Cost
      *o estimate your current system costs, you must assign costs to your external
       contractor activities and the items identified on your internal activities list.
       The external costs often comprise the majority of costs for many commer-
cial organizations. Internal costs are often low simply because organizations do not
spend much time or effort on many of the internal activities we show in the materi-
al life cycle. The sum of external fees paid to contractors and internal costs your
company incurs is the baseline that you will use to compare current system costs
with the costs for adopting RM contracting.
External Contracted Costs
   Fees you paid to an external contractor typically include all waste and recycling
services, including costs for collection, disposal, and recycling processing and any
container rental fees. You should estimate these costs from the last 12 months of
bills you paid your contractors. Table 3.3 shows an example of total external con-
tracted costs separated by waste costs and recycling costs; note that in Table 3.1 you
already identified the activities.

                           Table 3.3:  Sample of External  Contracting Costs
Examples of external
contracting costs.
Facility A
Facility B
Facility C
Facility D
Annual Waste

Not Annual
Recycling Cost

Rental Cost
N/A ,

Total Annual
                              Research has shown that actual fees paid to external contractors often differ from
                           agreed-upon fee schedules and levels of service. Differences fcan be due to addition-
                           al waste or recycling services requested that might not be documented in your con-
                           tract. Also, many contractor bills do not separate individual services, but instead bill
                           a single lump fee for numerous services. Such billing practices make it difficult to
                           discern exactly what you are paying. In some  extreme cases, prganizations are over-
                           charged for services they are not receiving and continue to pay for such services
                           simply because they pay bills without checking them. For these reasons, it is impor-
                           tant to use the last 12 months of bills to estimate your baseline costs for external
                           fees to contractors. A key element of RM is establishing transparent, itemized pric-
                           ing and hilling so the services you are paying for are clear.
                           Internal Costs
                              Internal costs must now be estimated for the list of internal activities you previ-
                           ously identified. These include:  1) the labor costs associated with internal material
                           handling (movement of trash or recyclables within facilities) and administrative or
                           overhead costs related to contract management, billing, and reporting; and  2) costs
                           of owned equipment (e.g., bailers, compactors, recycling containers). You might not
                           be incurring costs from ownership of equipment because organizations often
                           include these costs (such as container rental) in contractor  fees. If you do own
                           equipment, however, estimate these, internal costs.
                              Most internal costs are labor costs. The magnitude of these costs will depend on
                           how much your organization is actively promoting recycling and waste minimiza-
                           tion. Costs will include labor for any individuals who perform internal activities
                           related to any stage of the material  life cycle. For example, labor costs of staff
                           responsible for internal material movement and handling should be included here as
                           should an estimate of environmental staff time for gathering data for reporting or
                           compliance related activities. Similarly, time spent managing contractors  (including
                           labor costs for accounts payable and contract management), ;or separating or consol-
                           idating waste should be included. Refer again to Table 3.2  "Sample Organizational
                           Functions, Responsibilities, and Cost Elements" on page 12 j which lists cost ele-
                           ments for internal activities to ensure you identified all relevant internal costs.

  To estimate labor costs, you will need to communicate directly with staff to get
an estimate of individuals' time spent on waste and recycling related issues. Once
you have time estimates, you will need labor rates to convert time into money. Your
finance department can provide you with these different labor rates. For the pur-
pose of this exercise, use fully burdened labor rates (i.e., inclusive of all benefits).
 ' An RM program can either eliminate or greatly reduce some of your internal
labor costs. Note that many of the labor costs will likely be a portion of a person's
time. For example, you might have two individuals that spend only 25 percent of
their time collecting recyclables. Although such costs might not be completely
eliminated with RM, understanding these costs is important for two reasons. First,
for labor tasks currently performed internally, an RM program will  likely reduce or
eliminate the time needed for mese tasks (e.g., reporting), allowing  you to use time
on more strategic, core activities. Second, and perhaps more importantly, it gives
you a good idea of what you are doing now and how RM contracting can offer
additional services. Such additional services can be added to your wish list and
highlights the value of RM contracting to provide additional services.
   If you are not  focusing on recycling and waste reduction internally, your cost
baseline might be predominantly external contractor fees with minor internal labor
costs for the management of contractors and waste or recycling environmental
reporting tasks.

Estimate  Baseline  Recycling  Rate
      -*o balance the cost side of the baseline, you now want to see how well your
       organization is managing waste and recyclables (e.g., your resources). Tb mea-
       sure your performance, you will want to create a minimum set of baseline
metrics that includes your current recycling rate(s). Baseline metrics are important
because RM contracting financial incentives are based on cost savings from diversion
and waste nunimization activities. You must be able to measure your  RM contractor's
performance from your baseline to reward the contractor when it performs well. In
addition, if your baseline recycling rate is very low, many opportunities probably exist
for your RM contractor to immediately help your organization improve.
   Surprisingly, many organizations do not track the basic information that will be  ,
required to calculate a recycling rate, so you might have to use the best information
you  can locate. If you do not currently measure waste and recycling tonnage, you
will  likely need to request information from your current waste or recycling haulers
so you can estimate tonnage. Information usually has to be culled from bills and,
depending on your current pricing structure, you will likely only be able to obtain
information such  as number of pick-ups or number of containers hauled. Customers
might be provided with data on waste and recycling tonnage if the haulers' compen-
sation is based on tons of materials handled, or such information is required under
the contract agreement. Research has shown, however, that most organizations do
not receive tonnage data so you will likely need to estimate waste tonnage and
recycling amounts to calculate metrics.

For the standard vol-
ume-to-weight con-
version factors for var-
ious types of materials
and general trash,
refer to the resource
guide in Appendix A.
Appendix A lists
several resources that
provide guidance on
estimating recycling
capture rates.
                          Your estimate can be based on:     I
                                                          i                    i I
                          • Collection frequency                                i
                                                          i                    i i                    '
                          • Volume of waste/recyclable containers

                          • Percentage of containers filled at the time of collection

                          • Volume-to-weight conversion factor for waste and recyclajbles

                            Your contractor will, at a minimum, bill you for the first two items, so daese data
                          should be readily available. You should check with your internal RM team to verify
                          this information and to check, on average, the fullness of containers when the con-
                          tractor services them.

                            Estimate annual waste tonnage using the following equation:
 I1 Annual waste tonnage =  Volume of waste container (yd3)
 i i iiiiWiliiiililiilili f I  (in) ii Mln" i in ill § l ii f town 11 (  i-ipw™- ,1 > •  >-=•    ,—k '—•».„• , fnt\
                   [i        x Pctrcentage of container filled (%}
                   i         v i^CKrWniek.upsperyST^'*''          ,"
                                          g,,  » / y •"•"•"- »*  -  ?r,*f"~' "        i
  Similarly, you can estimate annual recovered tonnage using the equation below.
Calculate the tonnage recovered for each material you currently recycle.

 Annual recovered =  Container volume for the selected recyclaible (yd?)
 recyclables           x Conversion factor (ton/yd3)
                       x Percentage of container filled (%)               ,
                                        -ups per year
                                         n™1 "ctr~"'       |— *~"
  Finally, estimate your baseline recycling rate by using the following equation:
I" Recycling rate = Total annual reycling tonnage
Jt_^___,.; _ ,^^ __ ^^^.;^_
                  Annual recycling tonnage + Annual waste tonnage  /
                  ./L;.'            *H    ^f™™._"*^»»HlfM,         I  j,
  In addition to your overall recycling rate for all materials, you might want to cal-
culate individual recycling capture rates for. each material you currently recycle. To
calculate individual recycling capture rates, divide the total amount of a given mate-
rial that is recycled by the total amoiunt of that material generated (the amount
recycled plus the estimated amount that is still disposed).

  Your baseline recycling rate will be used later. Establishing quantifiable perfor-
mance targets (see Chapter 6 for examples) is a core component of an RM program.
These targets should be tied to the baseline recycling rates 6r other baseline met-
rics. An advantage to adopting RM contracting is that, by nature, RM programs
track this information.             !

  Your baseline should now be complete and this information will be used in
developing your RFP, evaluating bids, and negotiating.

Chapter   4:    Designing   Y p u r
                                                                 R M
Steps to define pro-
gram scope.
                         TT~ TT "TTith your baseline costs in hand, the next steps are to:
                          I/\/   1) define the specific scope of services you want the RM con-
                         v  r     tractor to perform, and 2) develop a request for
                        proposal (RFP) that clearly articulates your desired services and program
                        scope to potential RM companies that will bid for your work.  These activi-
                        ties should occur somewhat simultaneously, as they are interrelated.
                        Remember: there is no right or wrong way to design your RM program;
                        this process is meant to be flexible to fit your particular needs and context.
                        Define Program  Scope
                             efining your program scope involves determining the materials and related life
                             cycle services2 you want your RM contractor to perform.
                                                to Define Program Scope . -
                            Review 'baseline data from Cha pter 3-y-,      y<: ^ [r'"
                            •  Cucr^rjt external cprrtratted services. "   »^''
                            •  CurrentJnternai activities and ccjsis..    '"«*•"*""    «„-»,»,
                            •-"IvVish list of newTs'ervices.   , - '<  „        " ,^     7,---*-
                           ,,,-,,.  .  -            ^ -N^.     Vx^-t - ,>   J#~^*-'<^v    - ^ ^- ,,
                           ,.G,rpup RM materials aqd services'irrto two areas.  ^±.
                           "•."^ Include• all current'exterrjajservices'and'interriaj activities.  «
                           I;'' NewtSe^vic^sl^entified fnjyour wish Jist.    *'t*T~"     Y^
                            Consider Jeaymg'out sporadic or miscellaneous .waste st^ea^ms,
                            roll tliemJntojthe program after implementfti'cin",      \  ;w
                        What Materials, Waste Streams, and Services Should Be
                           Include all externally contracted waste streams and recycling in your RM program.
                        Dividing responsibilities among multiple contractors results in a fragmented
                        approach, wherein different contractors compete for the total amount of your
                        "resources" that end as waste or recyclables. RM contracting fosters a "systems view"
                        by giving responsibility to a single contractor to manage all your waste/resource
                        streams. The more materials you allow your RM contractor to manage, the more
                        2 These are services such as material handling, education/training programs,
                         reporting, etc.

Example RM services.
                         likely the contractor can bring innovation and improvement to your program.
                         Further, selecting one RM contractor; sends a strong signal to RM bidders and your
                         internal stakeholders that your progntm is about more efficient material/resource
                                 Services in the RFP Must be Structured to Ask Bidders:
                                                                     '       '              '
                            •  How much will it cost you t
Tying Your Cost Baseline to Services in the KFP
   Categorizing services as either existing and new will allow you to compare bids to
current costs, determine who is the most qualified bidder, and maximize the poten-
tial of RM contracting. Keeping  existing services separate is extremely important
since this will be structured as the base scope of work in the RFP. You will ultimately
compare a bidders' proposal (financial bids from prospective RM contractors to
manage your existing service) directly to your current baseline costs.
   Evaluating the value of new services is not so straightforward. As mentioned
above, the base financial bids for securing existing services will be compared to your
baseline costs and you can immediately determine if you will see cost savings.
Because you currently are not incurring costs for the proposed new services, howev-
er, a similar direct financial comparison is not possible. Ultimately, you will not be
able to evaluate the full value of an RM program until you receive RFP responses
back. Further discussion on evaluating bids is provided in Chapter 5.

What To Do With Miscellaneous Waste Streams
    Many organizations generate sporadic or small waste streams such as fluorescent
light bulbs, batteries, construction and demolition debris, electronic waste, and some
hazardous waste. Although an RM might be able to help you manage this waste
more effectively and increase reuse, recycling, and diversion, you might consider ini-
tially leaving these services out of your base scope of services in the RFP. The prima-
ry reason is that predicting the level of service and frequency of service you will
require for such waste streams is difficult.  From the bidders' perspective, accurately
 placing a bid on these services will be difficult, and therefore your evaluation of the
 bid will be difficult too.
    If you want to see the  value that potential RM contractors can bring to manage
 specific miscellaneous waste streams, you can include them in the RFP, but keep the
 descriptions and the financial bids separate from your base scope of work for manag-
 ing existing services. In this way you can test the market for specific waste streams by
 requesting prices to handle certain quantities of waste in the RFP (see Appendix E
 for an example bid table). Research has shown that these services have typically been
 rolled into RM programs once your RM contractor proves it can manage these waste
 streams better than you can internally. This requires the RM contractor to better
 understand your operation to make such a case, however. Thus, it is best to leave
 miscellaneous waste streams out of the base scope of work When you can predict a
 large amount of work will be required, as is the case for construction and demolition
 debris, you can ensure the winning bidder has the first chance to bid on such work as
 it develops.
 What If Existing Contracts Have Restrictions
    Some of your current contractual obligations might limit what you  can immedi-
 ately include in the RM program. For instance, if your organization has recycling
 or waste contracts that are long-term and involve penalties for breaking, you might
 not be able to immediately include services in the old contract as a service in your

Appendix D provides
a sample RFP that can
be used in commer-
cial, institutional, and
industrial contexts.
The model REP lan-
guage in Appendix D
provides examples and
more detail on each of
these RFP elements.
                                                                                  Golden Rules
                                                                                     for RF;Ps
                                                                                 •  Keep it simple
                                                                                 *  Keep it short
                                                                                 •  Be,open and
                                                                                    flexible'  '
 new RM contract. Similarly, many commercial organizations might be required to
 use a single franchise hauler for waste services. We still recommend that your RM
 contractor manage these waste stresyns; however, you will be required to use your
 existing contracted price from your franchise agreement. In this case, the RM con-
 tractor will treat hauling and disposal as a "pass-through" cost3. The RM contrac-
 tor can then re-bid any "pass-through" services as the applicable contracts expire.
                               I                   I  I
 Develop  Your Commercial  RFP

       The RFP is the vehicle by which bidders will tell
       you how they can improve ybur current system,
       so it is important to encourage open dialogue.
 Two overarching principals govern contracting: 1) make
 sure you ask for what you want, and 2) make sure you get
 what you requested. Contracting failures can almost
 always be attributed to not following; one or both of these
 critical principals. Thus, the RFP must provide informa-
 tion to prospective bidders explaining the services you are
 requesting. In bidders' responses, you then evaluate their qualifications—focusing on
 capabilities, experience, and staffing-^and assess their ability to provide the request-
 ed services. The RFP is where you communicate clearly and concisely what you want
 in terms of services and results.    !
  You should follow three fundamental rules in drafting your RFP: 1) keep it sim-
 ple, 2) keep it short, and 3) keep it open and flexible. The most important aspect of
 the RFP is simple, clear, and unambiguous language so that every bidder provides
 proposals and financial quotes with lie same understanding. To keep it short, ask
 only for information that will enables you to judge bidders' qualifications to meet
 the needs established in your goals and objectives.
  Be open and flexible in allowing bidders to tell you how they will improve your
 system. Because you are seeking moife value-added services, stressing your goals and
 desired outcomes is essential but do not necessarily outline how to meet your goals.
Think "outside the box" and give the contractor maximum autonomy to achieve
results. In doing so, you allow bidders to bring ideas to the table before the
program has even begun.         .
Elements of an RM RFP
  Although each organization might be different in the services it requests, the fol-
lowing six elements should be part of any RFP and are essential to clearly document
your requirements to potential bidders.
  The Cover Letter. This piece is an often unnoticed,  but important aspect of the
RFP, as it is the first document the bidders read. The cover letter sets the tone for
the RFP process and should invite bidders to submit proposals and describe the
1 "Pass through" costs are the existing fee structures that determine your baseline
 costs. An RM contractor can still manage the materials and work to reduce these
 costs, but must respect existing agreements.

general intent of your program. Yon should express the goals and objectives of your
RM program in a few sentences—emphasize that your organization is looking for
more than hauling and disposal. The cover letter should also include essential infor-
mation such as dates for the bidders' briefing, when responses are due, and when
you expect to award a contract.
   The Introduction. This section provides background information on your orga-
nization and the underlying purpose of the services you are requesting. A descrip-
tion of your organization might include the number and location of facilities you
want to include in the RM program, including descriptions of their size (e.g.,
employees, square footage, or other appropriate measures). You should also include
a succinct description of the nature of your business (e.g., processes, services, prod-
ucts) and the comprehensive nature of services you are requesting.
   The most important aspect of the introduction is conveying your organization's
purpose in implementing an RM contracting approach. You might begin by
describing the corporate philosophy and reasons for seeking RM services from an
outside contractor. This section leads into more detailed and specific objectives that
your organization is seeking to accomplish by soliciting RM contracting services.
Much of this work will have taken place in the planning process. Don't create a
laundry list; limit yourself to three to five such objectives. This activity will force
you to focus on identifying core goals. Contract length and  overall partnership
approach should also be stated.
   Bid Instructions. Bid instructions provide a roadmap for bidders on how to
assemble and present their materials including format, content, and delivery
requirements. Specific elements to consider for this section  are included in the
model commercial RFP language in Appendix D.
   Scope of Work. This section is the main section of the RFP and describes the
scope of services and, specifically, RM requirements the awarded bidder is expected
to provide. As the model RFP language (Appendix D) shows, you should describe
the scope of work in two areas:
   1.    Scope of Services provides a broad overview of services required under
        the RM program.  Specific services are detailed in the RM Requirements
        section. In this section, define the length of the contract, materials to be
        managed, number of facilities, and service locations. It should be very brief.
   2.    RM Requirements asks bidders to detail how they intend to provide new,
        value-added services. This will be done through narrative responses and by
        requesting bidders to submit an operations plan to obtain and improve
        upon existing services. This section also outlines the desired results and
        performance requirements for new, value-added services. Appendix D,
        Section 4 has detailed examples and sample language.

Appendix E provides
example bid forms
and incentive struc-
   Breaking the scope of work into two separate sections—RM requirements and
scope of services—emphasizes that you are requesting something different from-a
typical hauling and disposal contract. Remember to be open and flexible. Your pri-
mary concern is that your needs are met, not how they are met. It is important to
clearly state the desired end result or expected outcome, but the manner in which
the work is to be performed should IDC left to the bidder's discretion. For instance,
you can state that you want to increase diversion by 40 percent during the first 3
years of your RM program and ask bidders how they intend to help you meet this
goal. If you are too vague or imprecise (e.g., our organization is committed to recy-
cling), you run the risk of having bidders not respond directly. If you are too pre-
scriptive (e.g., you want your RM to increase recycling of all materials by 'the same
amount), you risk stifling any innovation that the contractor ;might express in their
response. Flexibility provides bidders the latitude and freedom to innovate and pro-
vide you with more options to best to meet your performance objectives.
   Normally, bidders will respond to how they can meet the scope of work through
a combination of a "narrative proposal" or "operations plan"; and their qualifications
in performing similar services for their existing clients. You want the bidders
response to the proposed scope of work to detail how they intend to conduct all
activities specified in the scope of work.
   Payment for Service and Incentives for Waste Reduction and Efficiency.
The RFT? must contain language to guide bidders on how you want the financial
bids submitted. You must include fees  you will pay the RM contractor for obtaining
the current waste hauling, disposal, and recycling services and compensation for
other RM services.
   Proposal Evaluation Criteria. The RFP must communicate how you intend to
evaluate the bidders responses. See Chapter 5  for a sample set of criteria and
detailed methods to use these criteria.

Chapter   5:   Selecting   an   RM
                           C o n t r a c t o r
                           yrf s you finalize the RFP, you can start to prepare for the solicitation
                         /-M process. You should establish bidding procedures to ensure that each
                      ^. _A_ step—-from the identification of prospective providers to evaluation
                       of proposals to final selection of contractors—is fair and open. An open and
                       competitive bidding system provides a level playing field to all contractors
                       and minimizes the potential for outside pressure on the final bid selection.

                       Identify Contractor Pool
                              ecause RM contracting is an emerging service model, growth and delineation
                              of the contractor base will continue to be dynamic. RM contracting requires a
                              broader range of knowledge and management expertise. Many types of compa-
                       nies are converting to RM contractors. Companies from more established sectors (e.g.,
                       waste, industrial cleaning) are applying their know-how (as well as acquiring new com-
                       petencies) to offer a new type of performance-based service. Supplying RM services is
                       by no means limited to traditional waste management companies. Other companies,
                       such as recycling companies, consultants, and property managers and brokers, are also
                       making inroads to supplying RM services. RM contractors commonly obtain many of
                       the responsibilities and subcontract other services. For example, property managers and
                       consultants will manage internal systems and give hauling and other external activities
                       to subcontractors. In fact, many companies that now provide RM services see this con-
                       tracting strategy as a new source of revenue to diversify their profits and as a competi-
                       tive advantage in marketing themselves to new customers.
                         ^  *~  • Who Arejthe IRM Cont^rt^                              ^,*
                         "A!/jeast three categories of established companies are providing RM „,, -„
                           i "  ™ ,  ^ *««-j*.v.      '    , , ~ 1 //'         "                    » *8sVt.     "X ss ^•
                          services to waste generators:   ,  ~.           - >       -'•'s^f~      * >
                          ^,      «       <    , <~      """"* — "     industnargeneratQrs!:as:part qj tn-pjant servidsTOther smaller
                           ^h,andlins,and, disposal companies also:bffer RM ser|Jces.    -^rf.'^
                         ^;Companies vvlth specialized exlxfetttsiln intern^I'vvaste or process    ,
                         i - management and/o'rfisource efflciericy^inciluSing cusJodjaWirms,
                          "  industrial cleaniijg^ornpaniejsy property, management companies, r^:?
                                                               '                   ~          "
                             "\A/aste brokefr|,,^ a Vapklj^ffowing segment of ,the solid waste* ^.—
                                ustry^thaf provides Jhauli/ig and; (disposal contract managerijent
                                       ''           "'*"         ''  '
                                                                        ^   v
                         J";hese companies see"RM service, aliaimarket 'icij&.eren'tiator:" Jhat"will
                         .allow thelm^to gain pr'/etain arfaccount in an extremely confpetitive x,-
                         xjndiistryjand as a conduit to diversify prq|it^by^supplying a'wider range,
                          of high-value utility a'nd environmental support functions, ^        ^ ;

Ideas for finding
Steps for issuing
the RFP.
  Although several large national companies offer RM contracting services, much
of the solid waste and recycling market is local or regional. Start with the following
sources to identify prospective contractors:               :
• Your current contractors with whom you have positive experiences.
• List of pre-qualified contractors obtained from your purchasing/procurement
• Recommendations from other companies/local governments that have RM-like
  programs.                    ;                   ;  ,
• Organizations that advance the RM approach4.
  Because RM contracting is still relatively new, some providers might have the
ability, expertise, and willingness to provide these services, but are unfamiliar with
how to structure their contracts according the RM principles. By sending the RFP
to a wide array of companies you mspdmize your chances of locating interested con-
tractors and receiving responsive bids. As the market for RM contracting matures, a
more distinct group of top RM contractors will surely emerge.

Issue the Request for Proposals (RFP)
    Iollowing a defined process will ensure that all providers are provided with the
    same information. The main steps in issuing an RFP include:
1. Issue RFP                    j                     :
                               I	;	       !• •!   	:•• •   :  	C
2. Convene pre-bid meeting      ;
3. Receive bidders questions and provide responses
4. Inform internal personnel, apart from the RM team, about the RFP
5. Accept proposals/bids and acknowledge receipt
Issue RFP
                               I                    i i
  Once the list of prospective contractors is finalized, issue the RFP. Attached to
the RFP should be a form that requires bidders to acknowledge receipt of the RFP
and indicate whether they plan to submit a proposal. This form should also ask for
contact information of contractor representatives planning to attend the pre-bid
meeting. The RFP can be issued electronically or in hard copy. Managing the
process to the greatest extent possible through e-mail will save time and shorten the
overall schedule for the competitive process.
Convene Pre-bid Meeting
  A pre-bid meeting is usually organized within 2 to 4 weeks after the release of
RFP. The meeting can last from 2 to 4 hours and should include an overview of
your facilities and a description of RM program goals. Allow time for a followup
question-and-answer period. After the meeting, arrange a site/facility tour to let
                          * The Tellus Institute  is in the process of compiling an RM supplier
                           contacts database.

Ideas for a pre-bid
                         the contractors understand the working environment and to better assess their cost
                         for implementing the new KM. program. The pre-bid meeting serves two mam
                         purposes:                   r
                         • Provides a forum for interested contractors to pose questions about the RFP, the
                            proposal preparation process,  and the organization procuring RM services.

                         • Provides an opportunity for your team to clarify instructions, and—most impor-
                            tantly—ensure that the rationale of RM contracting and goals of your program
                            are understood by all bidders.

                            For the above reasons, you should strongly encourage contractors to attend the
                         pre-bid meeting if they have indicated that they will be submitting a proposal. Key
                         members of RM internal working team should attend the pre-bid meeting to
                         address questions about different aspects of the RFP. The RM team leader should
                         run the meeting.
          '       .< &&'
-A,»- ^Company overview "-» ^ f%

                                                                                      %        s

                                 ^ ' •  CStibludjrjg remark^and Feftatement of schedule  °"^%^
                         Receive Bidders Questions and Provide Responses
                            Even after the pre-bid meeting, additional queries will certainly arise. There are
                         some questions prospective bidders will not want to ask in front of their competi-
                         tors. The RFP should include a deadline after the pre-bid meeting for any prospec-
                         tive bidders to submit written questions. The RM team leader should manage all
                         submittals and inquiries. Internal RM team members should be prepared for ad hoc
                         meetings in case queries require discussion and input from several team members.
                         All questions, together with answers, amendments, and/or addenda should be sent
                         to all contractors that have received the RFP. This process will ensure a level
                         playing field.
                         Inform Internal Personnel About the RFP
                            The RM leader should coordinate RM team outreach activities to inform all
                         employees about the status of the RFP process. Include in the update the number
                         of bids you expect to receive and the schedule for the internal review process.
                         This activity raises the profile of the RM program and helps achieve buy-in during
                         implementation when those affected have felt engaged and informed throughout the
                         planning and RFP process. Ensure your management champion is engaged so
                         he/she can communicate progress to upper management.

Accept Bids or Proposals and Acknowledge! Receipt
                               '                   '  !
  All incoming proposals should be:properly logged and checked for completeness.
You should promptly send notifications to contractors who have submitted com-
plete proposals. For incomplete bid submission, a reminder should be sent to
inform the bidders the missing item;; (if you decide not to disqualify them).

Evaluate  Bids and Select Contractor
        You are now in the final stage of the process-bid evaluation and contractor
        selection. Remember that the aim of this solicitation should not be to
        focus exclusively on the lowest-priced bid, but to seek qualified contrac-
tors who provide the best value. In the long run, the "best value" bidders are those
that will be able to provide the most: complete service at the least cost. Your selec-
tion should rest on the technical soutndness and creativity of the proposals, cost, and
qualifications of the bidders.                          M
                               |                   i  i            ,     '  .
   Make sure the evaluation process and results are well documented so that your
team can justify your recommendation to top management.
Develop Evaluation Criteria and Weightings
   A structured evaluation process v/ill keep you and your team on  track. You
should have included the evaluation criteria in the RFP. At this stage, you should
establish the specifics of each criterion based on questions raised or issues  highlightr
ed in the RFP and determine the weightings for each criterion and their sub-com-
ponents. Table 5.1 presents sample evaluation criteria and example weightings that
might be assigned to each criteria. The criteria and weights should reflect your own
program goals and service needs. Weightings for each criterion and their sub-com-
ponents should be discussed and agreed upon by the whole team. This process is
meant to aid your discussion, and responses within a few points of each other can
 be considered roughly equal.                   •

                         Table 5.1: Sample Evaluation Criteria and Weightings
Examples of bid
evaluation criteria.
Technical Aspects of the Proposal
Potential for resource efficiency improvements
Operations and maintenance for existing services
Education and outreach activities
Facilities / equipments provided
Information Management
Measuring and reporting service levels and waste
generation source reduction/recycling rates
Measuring and reporting savings
Methods / mechanisms for information sharing
Financial aspects of the proposal
Base service fee (for existing operation)
Gain sharing proposal / estimated cost savings
Method of determining payments and terms
of payments
Experience, background, and qualifications
Relevant experience
General management capability
i Total

                            The best strategy for evaluating bids is to have all team members rate each pro-
                         posal. After the individual grading is complete^ convene a meeting to review the rat-
                         ings collectively to reach consensus on the final selection.
                         Evaluate Cost Savings Using Baseline Costs
                            The bids are structured so bidders submit their base proposal to take over exist-
                         ing services. These are the only fees your organization should pay. New services are
                         financed from cost savings realized as a result of your program's waste diversion
                         successes. Cost savings from an RM program are derived in two areas:
                         • Immediate savings for an RM contractor to take over existing services.
                         • Potential savings one expects once an RM contractor launches the program and
                            helps you improve your program.
                            Immediate savings for an RM contractor to acquire existing services can be
                         determined by comparing the bids to your current baseline costs (see Chapter 3) for
                         these existing services. We will call these savings "transition savings." In addition to
                         savings on cost of current service,  you might have other transition savings, such as
                         immediate reductions in any owned equipment (e.g., containers) that might be
                         eliminated under the new program. Transition savings might also result from par-

Appendix F provides
more details on evalu-
ating bids and creating
summaries that model
cost and benefits.
tially relieved resources on labor as tusks are transferred to the contractor (e.g., redi-
recting the environmental manager's time on waste-related reporting to more strate-
gic environmental activities). Although many organizations do not consider these
"hidden" savings in making a business decision, you should note them in your
analysis of transition savings in addition to the obvious "bottom-line" transition sav-
ings.                             i   •   •    •• -• •        it''              ' :
   Potential savings are what one expects once an RM contractor starts to help you
improve your program. These saving;s come from the new services you will receive
in your RM program, and we will cal these "RM savings from continuous improve-
ments." RM savings from continuou!, improvements will be an estimate at best.
Evaluating new services and your RM contractor's ability to reduce costs is tricky
because you are, in effect, evaluating what you think they can do. Recall the under-
lying premise of RM is that new services are financed  from the savings that result
from continuous improvements.    |                    M
   So how do you know if these additional services will really deliver improvements
and costs savings? You will not know at the time you are evaluating the bids; howev-
er, there is a way to estimate the potential savings from continuous improvement.
Appendix F walks through such an analysis. Savings will depend on the amount of
waste they can reduce, the amount elf recycling they will increase, or additional
cost-effective improvements to your program. Savings will also depend on the type
of RM compensation structure in place (e.g., how these savings are shared between
your organization and the RM  contractor).
   You can now compare your current program cost with the estimated program
cost of various proposals. Hopefully you have competitive bids that represent an
immediate decrease in costs through transition savings, and you receive additional
new RM services at this reduced cost. This then leads to savings from continuous
improvements after the program is launched if it is successful. If all bids are higher
than your current baseline costs, your RM team should decide whether the pro-
posed additional services justify anyiincrease over current costs.
   A final word of advice on the value of RM—in evaluating'the benefit of an RM
 program, we recommend you take a. "cost neutral" stance. Cost neutral means that
 you pay no more than you are  currently paying and still get new RM related ser-
 vices. In short, you get more "bang for your buck" since you receive additional RM
 services at no cost. Most organizations do not (or cannot afford to) devote signifi-
 cant resources to design and implement waste minimization and recycling programs.
 Allowing an external RM to share cpst savings with you if they help you improve
 the management of your waste and recyclables makes good business sense. If your
 RM contractor successfully helps you find cost-effective ways to divert waste from
 landfills, then you will also share in the cost savings. More importantly, the  environ-
 mental impact of your organization will be reduced.

Down-Select Bidders for Further Discussion/Evaluation
  In some cases, an obvious "winner" will emerge. For example, one bidder might
be well below other bids, offer you immediate savings, and meet all qualifications.
You will hope to receive several competitive bids from which you can choose the
best-valued proposal, however. To save team members' time, you can choose several
top proposals based on the results of the evaluation criteria and focus only on those.
You can then invite the "down-selected" bidders to give oral presentations to help
the team make their decision. If you decide to have bidders give a presentation,
your team members should prepare a set of standard questions for all bidders.
Those questions should address the most important issues and relate to issues that
are most difficult to elaborate in the proposal, or can be better explained through
interactive discussions. You might have specific questions for one bidder, but gath-
ering information that is comparable among the selected bidders is easiest.
  For all qualified bidders, seek recommendations from the bidders' references and
summarize them for the team. The exhibit on the following page offers a sample list
of some standard questions to ask each reference to ensure you make fair comparisons
amongst bidders.

Examples of questions
for bidder references.
            Sample Questions for Bidder References
Scope of Your Program       '       "^'^  -         /" ,-,
  1.   What services does Company X provide for you? (e.g., recycling,
      marketing of recyclablesi management of waste and recycling
      data, environmental reporting, outreach, and education)
  2.   What types of materials |are covered by Company X's services ?V
Compensation                           /  ; - > ..     > -
  3.   How is Company X compensated?                  '  .
                          J>w » *
Communications           t      "                 ^   r//,  ' "'
  5.   Who is the point of conlbd at~Company/X?'By what means and
      how often do you comrajiuriicate with Company X?     "
  6.   Does Company X respond to you promptly? Are you satisfied  *-
      with the level of communication? '„              ~ ,,      ^
Performance of Vendor
                                                     /« "' V               "~ ••   "  f ~~?~'
                             7.  Is Company X providing gufficient resources to meet your needs !
                             8.  Are you satisfied with tf»e service provided by Comparfy X?   *;,
                                                      ^ '                   *
                                                      ^  ,<  *    p*9mw *     i-    *       * '
                             9.  Has Company X exceedejd your expectations or the!/, promise in  (
                                any way? Have they fallen short in any way?
                             10. Have you ever experienced problems working with CompanyiX?
                                If so, how have these prpblems been resolved?
                             1 1 . Have the services provided by Company X helped you to
                                enhance waste diversion, recyciihg^and source reduction?      >
                                If so, please provide exapiples of initiatives that have helped you ,
                                to achieve your program goals.                         <.'     >,
                             12. Would you recommend Comp'any X as,af resource management
                                provider? Why or why not? '          *,!,,,,'   ^ ( ,  :« , *
                                                     L  Vs'. "Jst^                  " ..,,  '" *
                              [ ] Highly recommended  [ ] Recommended
                              [] Doubtful            j['] Unsuitable             "'  "[   '' a
                        Select the Bidder and Present Your Recommendation to
                        the Top Management     ]
                          As you move toward negotiations, you will follow one of two approaches. If you
                        have identified one clear winner, yoii will simply work with that bidder.
                        Alternatively, if you have identified sieveral qualified bidders, you might decide to
                        negotiate with more than one company to see if you can again leverage to increase
                        services or reduce costs. Limit negotiations to two or three bidders. Before you
                        enter negotiations, ensure that whoever does the negotiations has the authority to
                        make decisions, compromises, or tradeoffs.

Chapter   6:    Signing   the   Contract
                           and   M[,e a s u r in g
                           Program   Success
                        TT TT "TTith  the hard part of the solicitation process behind you, you
                        I/f/   are now  ready to  enter final negotiations with the selected
                        y r     provider and sign a  contract. The contract will not be a
                       totally new document. Much of the contract is about packaging work
                       products that have already been completed and making any necessary
                       changes. The contract will consist of three main components:

                         1.    Standard terms and conditions. Your organization should have a standard set
                              of terms and conditions you can use. Consult your legal and procurement staff.
                         2.    Scope of services. These can be taken directly from the RFP and the win-
                              ning bidder's response. Make sure reporting and billings requirements, as
                              well as any training and meeting participation requirements, are clearly
                         3.    Compensation and RM incentives. This section can be taken directly from
                              the RFP, the winning bidder's response, and the terms of any subsequent
                         In some cases, the contract can be  the RFP and response to the RFP (after all
                       points have been negotiated), along with the standard terms and conditions. Thus,
                       your contract is largely created already and the payoff for your hard work is almost
                       at hand.

                       Final Notes  on Negotiation and  Inking the
                               rour goals in negotiation should reflect the nature of your RM program—a
                                strategic partnership. Obtaining a fair price for existing service is important,
                                but rewarding your RM contractor for making your program a success is
                       equally important. Waste costs are often a small cost center, and the real value of KM. is
                       obtaining value-added services -without increasing your overall costs. Before negotiation, you
                       should bear in mind that the key to success of an RM program is cooperation and
                       mutual benefits.
                         When the negotiation is complete, you should seek management approval for the
                       final contract. Once the contract is signed, your company is entering a new relation-
                       ship with your RM contractor. The contract represents the living document that will
                       define your expectations and relationship with your RM. A clearly defined contract
                       will avoid ambiguity about responsibilities and payment and is the foundation for an
                       equitable partnership.

Measuring RM  Contractor Performance
and Program Success

       RM is based on a strong relationship between you and your contractor built
       on trust. The true success of an RM program will be (determined in the long
       run by how effectively you communicate with your contractor (and vice
versa), monitor and review performance, and take joint action to meet the stated RM
objectives. Paying attention to all of the interconnected issues should facilitate pro-
gram launch and foster continuous improvement in your program.

  Monitoring your RM performance against simple, measurable metrics will ensure
that standards and expectations are being met. Both you and your RM contractor
should mutually agree upon reported metrics. Your baseline diversion and recycling
rate(s) are a good starting point. The one reason for waiting until after the program
                              i                  i  [
is awarded is to address any uncertainty over the quality and/or availability of data.
Metrics should be finalized in the first 3 to 6 months of the contract. A suggested set
of metrics is provided in the text bos: below.
                    Sample Performance Metrics
     Waste generation (tons/time period/ft units)—Normally mea-
     sured as tons per time peripd (week/month) normajged to some
     business critical measure (eljg., per 10f/wjdgets produced), ^Turiits
     produced (manufacturer), wguest'nights (hotel),* # square feet,
     employees, or net sales (retail).                        -      '*,
                              | tt,   -4. ,. * \ »T&gfaft s, ?/    ,        /       "
     Hauling cost per ton discarded ($/ton)—This measures the
     efficiency with which the R\\A contractor Js. managing the cost of
     hauling  materials (recyclables/waste) by optimizing compactor use.
     hauling only full containers
     waste should remain constant.
     Recycling rate (%)-^Equa
 etc. The actual disposal tip fee on
s weight recycled divided by (weight
     recycled plus weight disposed) multiplied by 100. This is a standard
     metric that is most often useS to jtrack recycling progress. Be aware
     that this measure can be affected by a decrease in total generation
     (lowering the denominator;.         ,   /';                   '
                             1 $ ^ftn Afa&a  / f                   f
     Capture rates for differeiitj||ateriajls (%)—Equals weight of ~
     material recycled divided b^(v^icp?vt'recycled plus weight disposed)
     multiplied by 100, Same calculation as/ecycle rate, only by material.
     This can be calculated only'fTecyclables of interest are^segregated
     and waste sorts occur to dejjjjprjpirie thf amount of the interested
     material disposed of as tras i.    __        "     ',',,'
     User satisfaction surveys— Fpr the pejople components (corn-
     plaints, on time pick-ups, responsiveness to inquiries, improvement
     proposals, etc.).          '-'"'""" ""'  T'''"  -
                             '*#'>•   «« JA'     '  '     /*'„',
     Environmental benefits siKh 35 greenhouse gas,reductions (s,ee
     Appendix G).

Example perfor-
mance metrics.
                         Figure 6.1: Linkages Between RM Objectives,
                                        Performance Measurement, and
                                                                 Performance Metrics
                                                                  Compensation and
  The more integrated the performance metrics, monitoring, and reporting require-
ments, the easier it will be to ascertain whether RM program goals are being met.
See Figure 6.1. Although most data tracking and reporting will be completed by the
RM contractor, you will be responsible for monitoring and managing progress.
  Establishing reasonable but explicit communication protocols and conflict resolu-
tion processes will lead to mutual understanding and commitment to the program.
The RM program and business relationship with your RM contractor is more likely
to succeed if you plan for the following important communication pathways:
• Meet on a quarterly basis with your RM team to discuss progress, status, and
  performance of services. You should assign a single point of contact within your
  own organization who is primarily responsible for overseeing the RM contractor.
  Remember, your own employees will play a large role in making the program a
  success, and you might need to pull in your own personnel affected by the pro-
  gram (e.g., operations/facility maintenance, procurement) as necessary. These
  meetings provide a basis for regular communication and number of benefits:
  — They instill the "partnership approach" that leads to shared responsibility
      and initiative to work towards waste elimination.
  — In reviewing metrics, the RM contractor and your RM team can identify
      potential trends, and predict and preempt problems.
  — When a problem does present itself, meetings provide a venue in which to
      take action to resolve the issue early on before it becomes more costly to
      resolve. Meetings might reduce the chance of recurrence if problems are
      explicitly addressed.
  — They provide time to review contractor reports detailing waste reduction
      activities, cost savings, reductions in greenhouse gas emissions, and other
      metrics that gauge performance. The most detailed metrics will do no good
      unless tracked.

• The contract should have established ground-rules and procedures to
  resolve issues and conflicts, since questions will invariably arise. A protocol to
  discuss and escalate these issues to the proper decision-makers for resolution is
  key to keeping the program on track.
• Ensure that proper support is being given to contractor to help implement
  improvement activities.          i
  Your RM contractor should also Establish a broad internal (communications plan
that informs internal players outside:of the RM team of the status of the program.
This step can be as simple as update postings in company circulars or newsletters, or
optional "program update" brown bag meetings for interested employees. Because
employees are on the "front lines," they can be an excellent source of information to
bring up issues, concerns, or ideas. Your RM contractor has an incentive to play a
key role in providing this internal communication because it will help keep the
program on track and increase its chance of success.
            Elements of Well-managed Performance-based
                        Contractor Relationships
     Clear communication of company's business culture and program
     Performance-based comper
     Objective performance crit<
satton and incentives,
  \<  "W     ^                     ""
ria that are negotiated, measured^
     \^r l_r|C\_ll V v.. kswl iwtli lui i^.w \-» i v> i i vi t,i iv* i. MI v« ii^^vviv* w\* vijr r 9 i*_,«^«*rf wi« *_>uif
     and reviewed periodically tb ensure consistency with, program
     direction,                                       •  '

     Ongoing monitoring and exchange of knowledge and information.
     Formal process/reporting structurse for issue resolution.
  A. final word of advice: the RM contractor's performance is only half of the pic-
ture—the other half is your job. Many organizations that have engaged in strategic
partnerships with external vendors have run into problems and immediately assumed
the contractor was not performing adequately. Success of the RM program is contin-
gent on attentive management, timely feedback, and appropriate support for the
contractor. The communication and performance measurement that is so essential to
program success is a two-way street.

Appendix   A:   RM    Resources
                        Resource Management
                        •  EPA2s WasteWise Program - What is Resource Management?
                        •  From Waste to Resource Management: Reinventing Waste Contracts and Services (A
                           discussion paper prepared for EPA) 
                        •  Resource Management Case Studies:
                           • Resource Management in Clark County, Nevada
                           • Advancing Resource Management in Nebraska: A Research and Demonstration
                        • "Strategic Contracting Increases Waste Prevention and Materials Recycling,"
                           Resource Recycling, March 2001. 
                        • "Waste Service Providers Become Resource Managers," Biocycle, April 2000, p.51.
                        • "Resource Management: Strategic Partnerships for Resource Efficiency,"
                           WasteWise Update, March 2002. 
                        Waste Composition and Characterization
                        • California Integrated Waste Management Board - Solid Waste Characterization
                        • Minnesota MSW Composition Study
                        • Alameda County Waste Management Authority - Waste Characterization Studies
                           (1995-1996, 2000) 
                        • California Integrated Waste Management Board - Statewide Solid Waste
                           Characterization. Study in 1999 
                        • Oregon Department of Environmental Quality - State Waste Composition
                           Studies from 1994, 1996, 1998 and 2000.
                        • Missouri Recycling Association - 1999 Solid Waste Composition Study

Appendix  A:
RM   Resources
                                     I                   i  I
      • Washington Department of Ecology - Solid Waste in Washington State 10th
        Annual Status Report ; Solid Waste and
        Recycling Data 

      Recycling and Materials BLecovery
      • Oregon Department of Environmental Quality - 2000 Oregon Material
        Recovery Survey Report                           \  ',

      • Minnesota Office of Environmental Assistance - SCORJfc Report: An Annual
        Evaluation of Minnesota's Recycling and Waste Management Programs
      • California Integrated Waste Management Board - Disposal and Diversion Waste

      Weight-to-Volume Conversion Factor
                                     i                   i  i
       • Standard Volume-to-Weight Conversion Factor         \

Appendix  B:   Sample  R M
                  1. Presentation: Introduction to Resource Management
                              Resource Management:
                           From Waste to Resource Efficiency

                      • What is resource management (RM)?
                      • Why use RM to improve waste management
                        and recycling?
                      • What are RM services?
                      • Where do contractor incentives come from?
                      • Who else is doing it?
                      • What are the benefits?
                      • How do we get started?
                      What is resource management (RM)?

                       •  RM is a strategic alternative to traditional waste
                         contracting and recycling
                       •  RM contracts emphasize/reward resource
                         efficiency (e.g., prevention, reuse, recycling,
                         composting) throughout material life cycle rather
                         than disposal
                         - Pays single contractor for quality of service and
                           continuous improvement in resource efficiency,
                           rather than the quantity of waste disposed of

Appendix  B:  Sample R M Presentations
                         RM contracts align contractor and customer
                         incentives and benefits
                         Traditional Disposal Contracts
                             Conflicting Incentives
                                          Wants service
     RM Contract
   Aligned Incentives
Wants service
Wants service
                          Why use RM to improve waste
                          management and recycling?

                           •  Funds spent on separate trash and recycling
                             services could be pooled and put to
                             better/more strategic use
                                             i              ;
                           •  Contractors are the experts (and can do it
                             cheaper in many cases)
                           •  Resource (people) constraints internally
                                             I              |
                             - Means we focus] on other more urgent priorities

Appendix  B j  Sample  RM  Presentations
Why use RM to improve waste
management and recycling? (cont'd)
•K ...^imii-w*.' $mj!rz??z*~™zi:~f->,'-""^rtn''      •• •• •
   Significant cost-effective opportunities to reduce
   waste, boost recycling, and optimize services
    - RM contractors will pursue them when offered proper
      financial incentives
    - Results in continuous improvement, no additional cost,
      and freedom to focus on core work
   Improve understanding, data visibility
    - To get incentives, contractor has to prove performance
      through documentation (ask yourself: do we have a
      good handle on our recycling rate? What is the potential
      to save by diverting/reducing?)
 What are RM services?
   Single supplier for all services pertaining to
   resource efficiency (e.g., waste reduction, reuse,
   recycling, waste hauling)
   Range of services:
    - Management of subcontracts, oversight of internal
      processes to improve efficiency
    - Technical support: waste auditing, recycling
      improvements., waste reduction identification and
    - Employee education/training
    - Comprehensive reporting, consolidated billing, and data
      management for environmental reporting            6

Appendix  B:  Sample  RM  Presentat lo n s
                           Where do contractor incentives £ome from?
                                  Financed from savings contractor achieves from
                                  the baseline (provided your performance targets
                                  met). Might include:
                                   - Avoided disposal cpsts, recycled material revenue from
                                      diverting more (less; processing costs)
                                   - Avoided purchase and other costs for waste
                                      reduction/reuse initiatives implemented by contractor
                                   - More efficient haulmg and material handling
                                   - Economies of scalel leveraged purchasing rates for
                                      subcontracted services
                                Who else is doing it?
                                  Savings at General Motors; plants that have had RM contracting
                                  in place for one year or more:
                                  - Source reduction impabts: 20% reduction in overall waste
                                    generation (30,000 ton decrease)

                                  - Recycling impacts: 65% increase in recycling (from 50,000
                                    tons to over 82,000 toils)

                                  - Disposal impacts: 60% decline in annual tonnage disposed of

                                  - Cost impacts: 15 to 30% decrease in waste management
                                    contract costs       i
                                  Multiple RM service conf actors bid—suggesting profitable
                                  service provision       ',

 Appendix  B:  Sample  KM  Presentations
 Who else is doing it? (cont'd)
• Public Service Enterprise Group (PSEG)
   - Rationale:
      • Collaborate with RM contractor to harvest lost
        recovery/recycling opportunities
      • Share responsibilities/benefits, organizationally aligned to
   - Piloted at 40 facilities, now 120+
   - Reduced hazardous waste from 1,460 tons to 103 tons (1992-
   - Reduced cost for haz and non-haz waste from $6 million to
     $4.25 million from 1994-1996
   - Recycled 94% of non-haz waste (80,712 tons) in 2000
   - Savings of $1.75 million for waste disposal/recycling over 3
     years                                            '•
 Who else is doing it? (cont'd)

 •  Office buildings, universities, hotels, electronics
   and defense contractors, and hospitals committed
   to implement RM contracting in coming year
 •  Applicable to diverse organizations: commercial,
   industrial, institutional, municipal
 •  For more information, see WasteWise Update at:

Appendix  B:  Sample R M Presentations
                          What are the benefits?
                          • Cost-effective semce improvements

                          • Reduced contract administration
                             - Single supplier manages all subcontracts
                                                           I i
                             - Consolidate billing

                          • Aligned contractor/customer goals
                                             I       •, •  ^  i i   •
                          • Focus on "core competency"
                                             "" I'"              i :
                          • Improved data tracking, reporting
                          How do we getlstarted?
                          • Establish cross-functional team
                          • Identify your management champion
                          • Verify current contractual obligations/contract
                            expiration dates with purchasing department
                          • Assess baseline waste and recycling costs and
                            service levels     ;               ;
                                             i              | L
                          • Develop options for improving resource
                            management (internal vs.. external provider)
                          • Develop proposal for management approval

     Appendix  B:  Sample  KM Presentation
2. Presentation: Baseline and Estimate of Resource
                 Management Potential
              Resource Management:
           Baseline and RM Potential Estimate

       Current waste management programs
       Current contract costs
       RM objectives
       RM potential
       Proposed RM program and benefits
       Next steps
     Current waste management programs
        Outline the following information, if known:
        - Number of waste/output streams
        — Waste handling/disposal systems (including personnel/contractor
          responsibilities, flow chart from waste to end disposal for wastes,
          including containers)
        - Tonnage/volume for each waste stream (exact reported in invoices
          or estimate of each waste stream based on service levels/assumed
          densities) can be presented as pie chart and/or separated by
          building if multiple facilities included
        - Identify what is recycled and present estimated or actual recycle
          rate (= total output as trash & recycling divided by recycling)
        - Number of vendors involved in handling all waste/recycling

iple RM Presentat
Current waste man
"™l"illl™li m 	 ''
Building/Waste Stream
or Contract Tras
agement programs
i 	 , „
r ..,..'
/-; ~* ..•'',
h Tons Recycle Ton Recycle Rate
445.2 	 T7.£ 	 ; 	 4% 	
36.5 20,7 36%
109.2 19.8 15%
139.2 9.3 6%
106.0 77.8 42%
93,6.2 144.9 15%

Current contract c|osts
• Outline the following information, if known:
- number of contracts to handle waste/recycling and materials
handled in each, and scope of service (e.g., container rental,
hauling, disposal) .
- Amount paid (or credited) in last calendar year on each
contract, and brief explanation of rates (e.g., $/haul/$/ton,
credit for recycling revenue determined by Official Board
- Net cost for all contracts
- Cost per ton managed for each
• Can be presented in table (see example next slide)

 Appendix   B:   Sample  RM   Presentations
irrent contra.ct costs (cont'd)
WP^ '~~~^^^~^~~^^^--^^ -^ ^~- > ^ ^y^
Est. average
$1 ,845

Net cu.

Est. tons


RM objectives
      Can include (but not limited to):
         Pursue continuous improvement in resource efficiency (waste
         reduction, reuse, recycling/composting)
         Reduce hazardous waste generation
         Hold overall contract costs at or below current levels
         Optimize current hauling, garbage disposal, and recycling
         operations and services to reduce overall waste management
         system costs
         Have RM contractor develop a detailed tracking, reporting, and
         invoicing system to support goal setting, performance tracking,
         and decision-making ability
         Tap contractor resources to help conduct educational outreach
         on aspects of the RM program or solid waste management

Appendix B: Sample  RM  Presentations
                         RM potential
                           Insert results from your estimate of
                           potential RM diversion and cost savings
                           Normally consistis of a chart or graphic with
                           scenario depicting incremental increases in
                           recycling and potential cost savings that
                           might be used as contractor incentives (see
                           example next slide)
                         RM potential (cjont'd)

Scenario 1
Scenario 2
Scenario 3
Savings as a %
of Net Contract

Appendix  B:  Sample  KM  Presentations
 Proposed RM program and benefits
• Outline the following information:
   - Scope of services
   - What will change (e.g., contractor as partner,
    better reporting)
   - Potential metrics to ensure cost savings,
    recycling, and waste reduction performance
   - Timing of implementation
   — Estimated resources needed to implement
Proposed RM program and benefits
(confd)      __

• Benefits
   - Cost-effective service improvements
   - Reduced contract administration
     • Single supplier manages all subcontracts
     • Consolidate billing
   - Aligned contractor/customer goals
   - Focus on "core competency"
   - Improved data tracking, reporting

Appendix B:  Sample RM  Presentations
                                                                          I  '11
                        Next steps
                        • Verify expiration dates of major contracts
                        • Approval from to|p management to begin
                          developing the RpP
                        • Hold initial kick-off meeting of cross-
                          functional team
                        • Set workplan and schedule
                        • Begin drafting RFP

Appendix   C:  Sample   Work  Plan
Action Item
Evaluate Current System, Conduct Cost Baseline, and Design Your RM Program
Identify current contractual
obligations and terms
Evaluate existing waste/
recycling system and cost
Identify potential cost
savings and other benefits
from diversion (note: this
step is optional)
Determine die scope of RM
• Seek assistance from contract and procurement
departments to identify the current contractors for
waste and recycling related services, the lengdi and
terms of the services contracts, and whether you will
incur any penalties for switching contractors
• Get all team members to characterize the current
waste and recycling system (map material flows)
• Baseline current service level, and waste and recycling
• Finance department to provide information for
estimation of total system cost (compare prices set out
in contracts with actual bills for services; include
internal management cost)
• Estimate the potential cost savings from increased
diversion and recycling
• Estimate the potential in reduction of greenhouse gas
• Estimate reduction in energy use
• Determine initial range of services/materials to be
covered by contract
Chapter 2
Chapter 3
Chapter 3
Chapter 4
Develop a Request for Proposal (RFP)
Draft RFP
Review draft RFP
Finalize RFP
Approval of RFP
• Draft an RFP that includes program goals and services
• Get all team members to review draft RFP — set a firm
deadline for comments
• Receive and incorporate comments as appropriate
• Upper management/legal department sign-off on RFP

Chapter 4


peiidix C: Sample Work Plan
Action Item
Solicit Bids
Compile list of prospective
RFP release to prospective
Pre-bid conference
Deadline for submission of
questions on RFP
Receive bidder questions
Send out summary of
questions, comments and/or
amendments of RFP to
all candidates
Receive proposals
• Using local and other resou
associations (recycling, wast
list of potential providers
• Release RFP to those intere
• Inform organization person
issued (give them this sched
• Conduct a pre-bid meeting
organization, nature of RM
game," and facilities
• Allow bidders to submit qu<
• Acknowledge receipt of eac
when responses will be sent
• Compile list of all question!
to all bidders
• Acknowledge receipt of eac

rces, such as trade
;, environmental), compile
sted bidders
lei that an RFP has been
to familiarize bidders with
and goals, "rules of the
:stions on RFP
i query and indicate
i and answers and submit
i proposal
Chapter 5
Bid Review and Selection of Contractor
Develop evaluation criteria/
Bid evaluation
Request further presentation
for downselected bidders
(Optional and only if a clear
selection has not yet
been made)
Present recommendation to
upper management
Approval and notification of
the selected provider
• Establish criteria by which the bids will be evaluated
• Have all team members separately rate each proposal
according to the pre-deterniined scheme. Convene a
meeting to achieve consensus or down select two to
three bidders.
• Invite downselected bidders to give oral presentation
• Once a final bidder has been selected, develop
presentation with key costs and benefits of the
proposed RM program and an implementation plan
• Make presentation and apppint negotiation team
to enter into contract negotiation
• Notify the selected provider of the decision and all
unsuccessful bidders
Chapter 5
52 :

Appendix   C  j    Sample   T*Fo JT k   JP 1
Action Item
Contract Preparation and Negotiation
Draft RM contract based on
Review draft RM contract
Negotiate RM contract,
determine transition start
Finalize and sign contract
• Draft RM contract based heavily on RFP and winning
proposal, use legal department as resource where
appropriate (e.g., for terms and conditions)
• This task falls to the champion and legal department
• Might involve up to a to full day working session,
depending on scope
• Sign contract and celebrate your hard work!
Chapter 6
Contract Implementation
Begin implementation
• If there is a time lag, have periodic meetings between
contract signing and start date to chart plans and
resolve any outstanding issues (gets the partnership
off on the right foot!)
Chapter 6

Appendix   D:   Model   Language  for
                            Resource   M!anagemen1
                            Request  for  Proposal
                            (RFP) — Conimercial
                            /Industrial \ Sector
                             This appendix presents model language to help'you develop your
                             RFP for RM services. It provides key RFP components and a for-
                             mat to successfully solicit RM services.
                      The model RFP is just an example, however, it will not cover all condi-
                      tions and circumstances. It is suitable for use in most commercial,, indus-
                      trial, and institutional settings.^ The suggested language should be consid-
                      ered a point of departure to begin building your own tailored RFP. You
                      will likely need to make some modifications to suit your specific organiza-
                      tion's needs and situation.

                      For each section and subsection,  normal font text is our suggested
                      model language, while italicized text represents our
                      comments or guidance on what should generally be included
                      in a section, and/or its relevance to the overall RFP process.
                      References to "Attachments" tire documents  in the main text of the
                      RFP to:  1) provide supplementary guidance to bidders, and 2) request
                      more information  (references, general information, RM compensation
                      tables). These should not be confused  with the Appendices to this RM
                      manual.                    \

                           Appendix   D:  Model   Language  for   KM  RFP

To:    Prospective Bidders

Subject: Request for Proposals (REP): Resource Management Services for X Company
X Company requests interested and qualified firms to submit offers in response to this RFP seeking resource manage-
ment (RM) services for its [number and location] facilities.

X Company feels there is opportunity to improve its resource efficiency by reducing waste generation, beneficially
reusing materials, and increasing recycling of materials currently disposed of as waste. X Company wishes to enter
into a multi-year partnership with the right provider to drive, implement, and manage these efforts. The purpose of
this RFP, therefore, is to obtain the expert management services of an RM contractor (henceforth "Contractor") to
eliminate, reduce, re-use and recycle materials as well as (as a last resort) dispose of all wastes generated at our com-
pany. Further information on resource management can be found in Attachment I to the RFP and at the EPA's
WasteWise Website at . The program will include economic incentives for the
Contractor to divert materials currently going to the landfill and incinerator, or otherwise reduce waste generation.

This RFP seeks bidders who are committed to proactively partnering with X Company to ensure the application of
best practice to increase overall resource efficiency at X Company's facilities. We seek a proven, high-performing
contractor with management and technical staff and significant corporate commitment to achieve the RM objectives
detailed in [section reference] of this RFP.

This letter provides a summary of the salient elements of the RFP. Bidders are cautioned to carefully examine the
entire RFP and the requirements contained therein before responding.

The following are key milestones for this solicitation:
     •  Bidders intending to propose must fax Attachment B - "Statement of Receipt, Authority, and Intent to
        Propose" to the X Company primary contact by [date/time].
     •  A pre-bid conference (required) will take place on [date] from [time period], beginning at [location]. After
        the meeting, tours of the  facilities will be provided.
     •  Questions and clarifications to the RFP must be submitted by [date/time].
     •  Proposals are due on [date/time].
     •  The contract is expected  to be awarded by [date].

Bidders are encouraged to submit questions and clarifications pertaining to the RFP (by e-mail to the primary con-
tact) as soon after its release as possible to allow us time to respond as fully as possible.

Proposals will be evaluated on the basis of the evaluation criteria listed in [section reference] of the RFP. The highest
rated, competitive bidders may be required to make presentations to X Company sometime in [date range] for clarifi-
cation or expansion on specific portions of their proposals. X Company will subsequently select the firm that offers
the best overall value to X Company considering their response to the RM requirements and evaluated approach to
optimizing total system-wide resource efficiency to achieve environmental gains and share cost-savings. X Company
reserves the right to hold discussions with bidders that are the most competitive, or to reject any or all bids. The con-
tract will be for a base period of [length of intended base contract] years with [number and length, e.g., 2 one-year]
year extension options contingent X Company's satisfaction with the chosen contractor's RM program.

Appendix  D:   Model  Language  for   R M   RFP
      The RFP contains the following sections:                           ,                        :

               •  Section 1: Introduction - Organizational background, goals/objectives for RM program
               •  Section 2: Bid Instructions - Provides required content and format for proposals, schedule, evaluation
                  criteria, and other "ground rules" for the solicitation process.                      ;
               •  Section 3: Scope of Services - General requkements and terms for the contract (i.e., sprvices requested,
                  terms, locations, supplier capabilities and other requirements).
               •  Section 4: RM Requirements - Provides the requirements! bidders' proposed RM services must meet,
                  and provides the format "template" that must be followed in preparing their narrative responses.
               •  Section 5: General Specifications - The initial business terms that must be agreed to by the successful
                  bidder.                                             i
               •  Section 6: Pricing - Gives instructions on how to provide bids for the base financial proposal and
                  guidelines for proposals on the required resource management compensation structure. (Attachment C
                  provides the template and further instructions for pricing.)
               •  Attachments A-I - Supporting information and several reference and authorization forms that must be
                  returned and completed by bidders for their proposals to bi; considered responsive.
                                                                     i             '         i|
                                                                     !'                      '
      X Company has provided bidders the opportunity to propose their own approach to certain elements of contract com-
      pensation, including gain-sharing of documented cost savings from diversion and waste reduction initiatives. The
      objective is to provide bidders the flexibility to innovate and distinguish themselves while meeting our requirements.

      All communications for submittal of questions and proposal correction or withdrawal prior to the closing data should
      be made via e-mail to the primary contact:                         :                        :
       We hope you will choose to submit a proposal to provide RM services at X Company's facilities, and look forward to
       seeing you at the pre-bid conference!                              I                        >


                     Appendix  D:  Model  Language  for  KM  RFP
                                "X" COMPANY
                     REQUEST FOR PROPOSAL (RFP):
                                     Issued by:
                                    X Company
                                    Date Issued:

                                 Response Deadline:
Information included in this RFP, including information subsequently released by X Company during the RFP
process, is strictly confidential, and may not be used for any purpose other than responding to this RFP, and may not
be disclosed to any third parties without the prior written consent of X Company,

Appendix  D:  Model  Language  for  RM  RFP
     CONTENTS                                        I
                                                      4                 i (
     1.0 INTRODUCTION	|	.	 i.	1
        1.2 RM PROGRAM PURPOSE	,;,	1
        2.3 QUERIES AND PRIMARY CONTACT PERSON	:[:.......,.::.	i.'............ 4
        2.5 PROPOSAL SCHEDULE	|	1.;.	5
        2.6 RESPONSE EVALUATION CRITERIA	j,		,.,,.	.6
        2.10 CONFIDENTIALrrY OF PROPOSALS	'..]...'.	7
        2.11 RESPONSIBILITY FOR COSTS  	,	,.,..,.,.	,.|.'....,..........7
        2.12 NON-STANDARD PROPOSAL SUBMISSIONS 	,	..;....'	8
        2.13 RESERVATIONS AND LIMITATIONS 	!	I .|	:	8     ,
     3.0 SCOPE OF SERVICES 	|,..;.	|..|	8     I
        3.1 GENERAL	j	|..;.............8
        3.2 PERIOD OFPERFORMANCE	:	.'	:.... 9     I
        3.3 SUPPLIER CAPABILITIES	i	!..'........ i... I'O
        3.4 ADDITIONAL SERVICES 	j	10     |
     4.0 RM REQUIREMENTS 	j	10
        42 ENVIRONMENT AND SAFETY ISSUES	'.j ,,.,••• • •,,.....,..	• •	• • • • U
        4.3 OPERATIONS PLAN	j	;. .\............ 11
           4.3.1  Reduce Waste Generation	,	11
           4.3.2  Reuse/Return/Donate	.[	 72
                                                                        11              '   D«
           4.3.3  Recycle/Compost	12
           4.3.4  Waste Disposal	12
           4.3.5  Process for Continuous Improvement	13
        4.4 WASTE COMPOSITION	'.,	13
        4.5 BILLING 	|	',.'?	 .13
        4.7 BIDDER'S REFERENCES 	!	 14
        5.1 EQUIPMENT 	J	.,,	15     ,
        5.2 SUBCONTRACTING 	,	.'	15
        5.3 THIRD-PARTY INDEMNIFICATION 	L......,.....,,	...,.:..;.......,.,,.,,. 15
        5.4 INSURANCE 	i	.:	15

                    Appendix  D:  Model  Language  for  KM  KFF
6.0 PRICING	16
   6.1 GENERAL	16
      6.2.1  Disposal	17
      6.2.2  Recycling 	17


Appendix  D:   Model   Language   for   KM   RFP
         This section provides information on X Company, the purpose and objectives of this solicitation and the
         resource management program, and an overview of the current waste management and recycling program at
         the X Company facilities included in this RFP. This section provides bidders an introduction to your organiza-
         tion and your purpose for the RM contract on which they are bidding.

         1.1     Organizational Background
                                                                                            i  i
         Tills section should present information that you feel is relevant to tKf providing bidders with a solid overview
         of your organization, its purpose, geographical location, key clientele and partners, size, and
         environmentaVsodal/business ethic as rationale for pursuing an RM\partnership. Much of this information can
         be gathered and condensed from your general business communications or marketing materials. Information
         that you should consider might include (but is not limited to):       \                      \  [
                                                                           1                 !  =
             •  Business sector/mission/purpose
             •  Brief organization structure (if there are multiple operating \entities, for example)
             •   General operating area/region, and extent/scope of RFP (# facilities included)
             (Note: Detailed facility information, if there are multiple facilities, may go in an attachment, which you
             may wish to reference in this section)
             •  Number of employees       .                           j                        ;
             •   Facility square footage                                 \
             •   Other size indicators ($ revenue, etc.)                    ;
             •   Other general information that distinguishes your organization and would provide bidders a better
                 understanding of your operating environment             \

         Not all of this information may be available or relevant.  This section should generally be less than one page in
         1.2     RM Program Purpose

         The purpose of X Company's RM program is to obtain the expert management services of an RM
         contractor (henceforth "Contractor") to eliminate, reduce, re-use and recycle materials as well as (as a last
         resort) dispose of all wastes generated at X Company's properties/facilities/other. Further information on
         resource management can be found in Attachment I. The program will include an economic incentive for the
         Contractor to divert materials currently going to the landfill, or othei;wise reduce waste generation. This initia-
         tive is a strategic sourcing partnership in which X Company wishes to collaborate closely with the selected
         Contractor to meet X Company's goals while creating value for both parties through savings from improved
         resource efficiency. It is intended that the successful bidder will be the driving force behind increased diver-
         sion, working in partnership with X Company's employees and contractors. Further, the chosen RM contractor
         will perform its wo± in the spirit of X Company's environmental policy (see Attachment F).

                         Appendix   D:   Model   Language  for   KM  R F P
If there are other specific purposes for your organization's RM program, please add these here as text
or bullet items.

1.3     RM Program Objectives

The Contractor's program shall meet the following objectives:

             1.   Pursue continuous improvement in resource efficiency (waste reduction, reuse,
                 recycling/composting), and with X Company's approval, take a lead role in identifying,
                 designing, and implementing innovative, cost-effective means to reduce waste generation
                 and increase diversion at X Company's facilities.
             2.   Optimize current hauling, garbage disposal, and recycling operations and services to reduce
                 overall waste management system costs.
             3.   Develop a detailed tracking, reporting, and billing/invoicing system to support X
                 Company's goal setting, performance tracking, and decision-making ability.
             4.   Collaborate with X Company's staff to implement the RM program. This includes conduct-
                 ing educational training and outreach as necessary on aspects of the RM program, including
                 but not limited to, recycling procedures or waste minimization.

1.4          Overview of Current Solid Waste Management at X Company

This section provides bidders with a concise but comprehensive description of "material flow" and waste/recy-
cling/composting processes within your organization. This should include, at a minimum, the following
             •    Identification of operations/areas/processes that generate different types of waste (e.g.,
                 kitchens generate over X% of our corrugated cardboard and organic wastes).
             •    Identification of key internal or contracted labor that handle/transport/separate waste inter-
                 nally (e.g., internal/contracted custodial, specific types of employees, all employees).
             •    System to separate and transport from point of generation to loading dock to contractor
             •    Identification of materials that are currently recycled, and amounts (volume or tonnage,
                 with tonnage the preference) identified for one or more recent years.
             •    Identification of tonnage disposed of in one or more recent years.
             •    Service levels for all contracts (all recycled, disposed streams to be included in the scope of
 :                RM contract) - this includes rented container/compactors numbers and volume, pick-up sta-
                 tus (given schedule, such as Sxper week on 35-yd compactor, or state "as needed" if your
                 service is on an "on call" basis),  and details on any other waste/recycling services for which
                 you incur costs, such as shredding/confidential services, etc. (see Table Al of Attachment A).

Appendix   D:   Model   Language  for  KM  RFP
                      •    The nature of annual generation (i.e., identify fairly constant streams and those that are
                          more sporadic, such as end of year clean out in a university setting). As noted in Chapter 4
                          of this manual, it is best to leave the sporadic waste streams out of the base scope of work.
                          Ttie sporadic waste stream can always be rolled into the RM program as "additional ser-
                        •  vice" per Section 3.5 of this RFP.                                 .      ;
                      •    Estimated diversion rate (including recycling and, any composting programs).
                      •    Particularly successful or planned recycling programs, or areas for improvement or pro-
                          grams that you have been thinking about (e.g., recycling/reusing fly ash, initiating reusable
                          containers program) and would like help implementing.
                      •    Any operational issues that may affect program, such as planned renovations/ construction
                          projects, or other potential constraints.
                      •    Any other details that will allow bidders to get a Better sense of your current programs and
                          services.                                     \:	   ...    :„,; ...       ,  ,;,  ;,   ,;	  .. '

         You should also have a statement pointing to an attachment that you will put together detailing all
         volumes/tonnages and service levels, such as: "Attachment A provides X Company's solid waste and recycling
         volume estimated for [most recent year] and the current waste/recycling service levels." As a general rule, it is
         to your advantage not to disclose current rates or costs of services.  \ ,
         The following section provides instructions for preparation of bid materials that must be followed if a bidder is
         to be considered responsive. The information in this section should tie considered the "ground rules" for the
         solicitation process and is intended to assist you in preparing your proposal.
                                                                      "'                   '   !  !
         Hie section that follows is intended to provide general terms that should be followed, and as indicated above,
         delineates the general procedures and conditions for the solicitation^The most critical components of this sec-
         tion are the required proposal components and format (2.4), and the evaluation criteria (2.6). These 2 sections
         can also go in its own stand-alone section to call out its importance. In addition to those paragraphs presented
         here, your procurement office may have additional standard instructions that might need to be included.

         2.1      Statement of Receipt, Authority, and Intent to Propose

         All bidders must submit a Statement of Receipt, Authority, and Interjt to Propose (Attachment B) via fax to the
         X Company primary contact, [name], (see Section 2.3) on or before [time and time zone], [date], [year].
         Failure to return an executed Attachment B by this date will disqualify the prospective provider.
         Tliis gives bidders the first requirement up front to complete the relevant attachment and return by a specific
         date. The form allows you to ascertain the number of companies that will bid, the number declined, and pro-
         vides a single point of contact for each bidder for all communications. The form is also a type of solicitation
         contract that has each party sign off on certain conditions, such as confidentiality, independent preparation of

                                                             rj'.^r, 'III


                         Appendix  D:   Model  Language  for  KM  RFP
proposals (ensuring open competition and eliminating potential for collusion), and certification that the
signatory has the authority to make a binding proposal on behalf of his/her company.

2.2      Pre-bid Conference and Facility Tours

A pre-bid conference and tours of the facilities included in this RFP will be held at [location] on [date], [year]
from [time] to [time]. Bidders who intend to submit a response are required to attend the pre-bid meeting
and tours. Bidders should also provide, on the "Statement of Receipt, Authority, and Intent to Propose" form
(Attachment B and see Section 2.1), the names and contact information of all persons from your company who
are planning to attend the conference and tour. Please limit the number of people attending from your company
to three (3).

The preliminary agenda includes:

                 Overview presentation by X Company explaining purpose of RM and operational overview
                 Q&A by bidders
             •    Facility (or facilities) tour (one consideration is whether you will provide transportation/or
                 bidders if the tour is of multiple facilities in a locale/region)

2.3     Queries and Primary Contact Person

All inquires about this RFP must be made in written form, via e-mail, to the X Company primary contact:

Name:   [name]
E-mail:  [e-mail\                                                                        '    •
Fax:    [area code + fax]
Address: [regular mailing address]

In  the interest of fairness and the best program outcome, any questions and responses will be distributed via
e-mail to all prospective providers who have indicated an intent to submit a proposal. The identity of compa-
nies who submitted questions will be kept confidential. All questions must be received by [date], [year], before
 [time]. Responses to all questions will be issued to all providers by X Company on  [date], [year], before [time].

 2.4     Proposal Required Contents and Format

 At a minimum, each base proposal should address all of X Company's requirements in two volumes:

          1.       A narrative response specifying a preliminary operations plan for an RM program that
                  addresses services requested in Sections 3 (Scope of Services) and 4 (RM Requirements)
                                                                                                         s 1

Appendix   D:   Model   Language   for   KM   RFP

while taking into consideration service levels in 1
mitted response must follow the same headings p
2. A base proposal and proposal for RM compensate
. and Attachment C (Bid Response Forms).
You should also bear in mind the proposal evaluation criteria outline
es. Complete responses must be received via 1) e-mail and 2) ma
on [date], \year], to the primary contact noted in Section 2.3. Pro
specified above will be declined. A complete proposal for this RFP
on 100% recycled paper with at least 50% post-consumer recycled f
to submit an electronic copy of a complete response as Microsoft W
via e-mail by the above date and time.
Bidders should respond to the points raised as directly as possible. F
endorsed, do not follow the requested format, or otherwise are contr
rejected as non-responsive.
2.5 Proposal Schedule
The following timeline will be used for this selection process. (If yo
erables, be sure to specify appropriate time zone).
[Date], [Year]
[Date], [Year]
[Date], [Year]
[Date], [Year]
[Date], [Year]
[Date], [Year]
[Date], [Year]
[Date], [Year]
.ttachment A. (Please note that the sub
rovided in Section 4).
on in accordance with Section 6 (Pricing)
d in Section 2.6 in preparing your respons-
il/courier no later than [time, time zone]
posals received after the time and date
should contain two (2) hard copies printed
ber content. All bidders are also requested
3rd6 (or other required format) documents
roposals that are incomplete, not properly
uy to the guidelines of this RFP may be
i choose to add times for milestone deliv-
: -• ..:..- 4;w> >//, 'i < ', , - i
ACTION -::^'.' I ,-
                         Appendix   D:   Model   Language  for  KM  RFP
2.6      Response Evaluation Criteria

The evaluation criteria for RM responses include the following: (criteria are not in order of ranking or weight-
ing, although you may wish to do so and assign approximate percentage to each)

         1.   Proposal Presentation
             •    Thoroughness/completeness of proposal
             •    Clarity and adherence to format

         2.   Bidder's Qualifications
             •    Overall company quality in terms of reputation, financial strength, continuity of
                 management, and ability to support indemnification and performance guarantees
             •    Corporate experience and performance in waste reduction, and management of
                 contracts of similar size and nature
 :            •    Product quality offered, customer focused processes

         3.   Technical/Service
             •    Ability to meet X Company's RM requirements (per Sections 3,4)
             •    Proposed approach to transition that minimizes impact on facility operations, overcome
                 barriers, and quickly launches RM program
             •    Service capabilities and responsiveness
                 —  Supply chain management
                 —  Source capabilities/Tier I integration (ability to source and manage any
                 —  Environmental health & safety experience and record with respect to applicable
                     regulatory programs
                 —  Customer communications
                 —  Technical staff qualifications
             •    Ability to provide continuous, value-added strategic services to achieve goals
             •    Ability to facilitate continuous reduction in waste generation and increase diversion

         4.   Management
             •    Management leadership

         5.   Financial Benefit
             •    Demonstrated price/cost reductions for total waste  management system

X Company intends to award a negotiated contract to one firm to provide the services required under the terms
and conditions it considers to be most favorable among those offered. Lowest price will not be the sole deter-
mining factor in awarding the contract, but rather X Company may award to the bidder whose proposal, in our
opinion, represents the lowest and best value bid. The winning bidder should demonstrate how it can provide
the best level of service in relation to cost. For example, the bidder will have the ability to handle the full vari-
ety of resource management requirements, a reputation of providing exceptional service, a good financial con-
dition, experienced management, reliability, demonstrated experience  in comparable operations, a good
                                                                             ._'       5'

Appendix  D:   Model  Language   for   RM  RFP
         safety record, a high level of compliance with all relevant regulation^, and a record of strong support for recy-
         cling, composting and waste prevention efforts.

         Tlie above list of evaluation criteria is not exhaustive and your organization, from its past contracting experi-
         ence, may have additional factors that it wishes to consider. These can be added as necessary.

         2.7      Proposal Correction or Withdrawal of Proposal Prior t» Closing Date
         Any proposal may be withdrawn or modified by written request of the bidder provided such request is e-mailed
         to X Company by the deadline stipulated hi Section 2.4. Modifications received after the due date will not be
         allowed. Each correction to your proposal must be clearly marked and initialed by the bidder. X Company or
         its representatives reserves the right at any time to request clarification from any or all bidders submitting a
         proposal.                                                    *           ': •,        !  !     •    :
                                                                     i                         i         '
         2.8      Additional Information, Investigation and Inspection j                       .
         X Company reserves the right to request site visits to one or more of the bidder's existing customer facilities,
         to speak directly to a provider's references, and to make independent investigations as to the qualification of
         any bidder at anytime during the process. Performance information bay be solicited from any available source.
         X Company may request additional information by suppliers to clarify elements of their bid proposals. X
         Company will notify companies after all bids are received on whether a presentation is required.

         2$      Confidentiality of X Company Information
         The terms of this RFP, and all other information provided, are to be [treated by your company as strictly confi-
         dential and proprietary. All data and business information is to be uiled solely for the purpose of responding to
         this inquiry. Access to this information shall not be granted to third parties except upon prior written consent of
         X Company and upon the written agreement of the intended recipient to treat the same as confidential. No
         news releases, public announcements or any other references to this; proposal shall be made without the prior
         written consent of X Company. We may request at any time that any of our material be returned.

         Should there be a breach of this request for confidentiality or other restrictions identified in this RFP, the bid-
         der will be eliminated from consideration for this RFP.           !                         !

         2.10    Confidentiality of Proposals                         j
         All proposal materials shall become the property of X Company ami will be held confidential. Any copies of
         submitted proposals will be limited to X Company employees and consultants on a need-to-know basis. No
         proposals or associated documentation will be returned.          h                      ,  :    .
                                                                     i                       i
                                                                     i                       i
         2.11    Responsibility for Costs
         X Company will not reimburse any bidder for any costs involved in the preparation and submission of the pro-
         posals, in making an oral presentation, or in contract negotiations. Bidders are responsible for all costs associ-
         ated with responding to and submitting a proposal as part of this solicitation process.

                          Appendix   D:   Model   Language   for   KM
2.12     Non-Standard Proposal Submissions
While we recognize that this RHP may request that you describe your business in ways that are different than
your normal business practice, we nonetheless require that proposals be submitted in accordance with the
instructions contained in this RHP. Suppliers are cautioned that proposals must follow the required format as
outlined in this section, Section 4 (RM Requirements), and Attachments B through E.

2.13     Reservations and Limitations
X Company reserves the following rights and options:
         «    To reject any and all proposals that fail to meet the literal and exact requirements of the specifi-
             cations provided in this RHP document
         •    To accept the proposal that is, in the judgment of X Company, in the best interest of X Company
             and its facilities
         •    To reject any and all non-responsive proposals
         •    To waive irregularities hi any proposal as X Company may elect to waive
         •    To reject all proposals without cause
         •    To issue subsequent requests for new proposals
         •    To discontinue its negotiations after commencing negotiations with a finalist, if progress is
             unsatisfactory, and commence discussions with another bidder

This section provides a general description of the scope of services sought, period of performance, locations
of service,  and other issues pertaining to providing RM  services. The minimum RM elements that should be
considered hi bidders' narrative proposals are further detailed in Section 4.

This section lays out the basic understanding for what services are requested, period andplace(s) of perfor-
mance, and considerations including additional work and sub-contractor relationships.

3.1      General
The Contractor will be required to expertly manage all wastes generated by X Company at the facility/
facilities enumerated in Attachment A according to the following hierarchy: (1) reduce generation of discards1,
(2) reuse/return/donate2, (3) recycle/compost, and (4) dispose. Services required of the successful bidder
include the following:
1 This includes any mutually agreed upon material that is deemed "waste," recyclables/compost, or surplus. The emphasis is limiting
 materials that need to be managed as outputs.
2 This may include, for example, internal reuse programs, working with suppliers on return/takeback arrangements, or donating surplus
 materials to charitable organizations.

Appendix  D:   Model   Language   for   KM  RFP
                                                                                            i  i
         •        Provide containers, collection, pick-up, transportation, segregation, specific processing, shipment and
                 marketing of discarded materials;

                 •   Development and implementation of plans for the reduction, reuse, recycle and/or final disposal
                     of all waste materials generated by X Company's facility/facilities with X Company's approval;
                 •   Oversight and coordination of on-site source separation;

                 •   Training for X Company staff and limited X Company contractors;

                 •   Performance monitoring, data tracking, and comprehensive reporting;
                                                                                            I  i
               ,  •   Consolidated billings for applicable facilities at required level of detail;

                 •   Participation in X Company RM team meetings as required;                   [

                 •   The successful bidder shall also—with X Company's iissistance—develop, maintain and follow
                     work instructions, safety rules, and established policies & procedures as they apply to non-haz-
                     ardous and hazardous waste management activities,   i

         Bidders shall submit, as the main portion of the narrative proposal, aj three (3) year Operations Plan per Section
         4.3 that details the approach and methods for achieving the stated purpose and objectives of the resource man-
         agement Program while managing wastes according to the hierarchy given in Section 3.1. The remainder of the
         narrative proposal will cover other critical elements of the program zis enumerated above and detailed in
         Section 4.

         Upon negotiation and mutual agreement at a later date, additional materials, including universal wastes, may
         be added to the scope of services.

         3.2      Period of Performance
         X Company is looking for a strategic long-term partner and undersUtnds many resource efficiency initiatives
         will take time to  develop a comprehensive program. As such, this ccjntract will be awarded for a minimum
         period of [# of years of base contract] with [# of years for renewal option] one-year renewal options. The
         initial three-year period is a commitment to work with the contractoir on the RM program,  after which the
         program may be extended for a maximum of four one-year periods if the program is successful and meets X
         Company's expectations.                                       i                      !  !
         Note: As the success of an RM program rely on a established strategic partnership, we recommend the base
         contract length be no less than 3 years.                          \

                         Appendix  IT:   Model   Language   for   KM   RFP
3.3     Supplier Capabilities
It is understood that the primary supplier responding to this request for proposal may not have the capability
to undertake all the tasks outlined. The successful candidate may develop cooperative agreements with
subcontractors in order to provide and manage the full scope of services requested by X Company. Detailed
information on these collaborations must be submitted as part of the original proposal (see Section 4.1).

3.4     Additional Services
From time to time the RM contractor may be asked to perform extra services not specified within this scope of
work. This work will be reimbursed by X Company under a separate purchase order. This type of work may, at
X Company's discretion, be competitively bid.
This section outlines minimum responsibilities and activities the Contractor will be required to perform. All
narrative proposals should follow the headings below, and provide concise responses to the information
requested. Bidders are expected to respond to all items in as much detail as necessary for X Company, its rep-
resentatives and consultants to make a fair evaluation of your firm and the proposal for ranking.

This section spells out the specific RM requirements that bidders will need to respond to in the narrative
portion of their proposals.

4.1      RM Program, Management, and Business Systems
Provide a brief description of your overall management and business systems as they pertain to the following:

         •   Describe your vision of an RM program for X Company.

         •   Identify your specific project personnel or teams that will be devoted to X Company's RM pro-
             gram. Include how staff devoted to X Company's RM program will interact or utilize overall
             company resources/expertise (include training they may receive or corporate resources or net-
             works that will benefit X Company).

         •   Employee stability is essential to the programs success. What does your company do to maintain
             a stable workforce?

         •   Discuss the relationships that you plan to establish with X Company and each of its facilities
            ' included in this RFP. Include hi your discussion, where applicable, the relationships you propose
             to establish with X Company staff and contractors or suppliers.

         •   Your response must identify any third parties with whom you will partner to provide the RM ser-
             vices requested in this RFP, including which elements you propose each third party will cover,
             and their credentials to provide these services.

         •   Complete Attachment D, "Supplier General Information."

Appendix  D:   Model  Language  for  R M   RFP
         4.2     Environment and Safety Issues                        [
         The RM contractor must comply with all applicable regulations (loca, State, Federal) and X Company
         policies governing the recycling, storage, transportation and disposal of waste streams. Lack of knowledge of
         the bidder shall in no way be a cause for relief from responsibility or constitute a defense against the legal
         effects thereof.                                                                        j
                 •   Describe your environmental and safety programs that ipply to managing risks associated with
                     the primary supplier function. Discuss the regulatory expertise of the staff members you propose
                     to work for X Company.                           '                        I

         43     Operations Plan                                     i                       . ;
         The RM shall provide a preliminary 3-year plan that outlines the approach and methods for achieving the pur-
         pose and objectives of RM hi Sections 1.2 and 1.3 and the management of wastes per the management hierar-
         chy in Section 3.1. X Company understands that data hi this RFP is limited and that the successful bidder will
         refine their plan as they become more familiar with individual faciUtigs. The operations plan in the proposal
         should provide a methodology, labor, equipment, and concrete oppormnities for improvement in managing X
         Company wastestreams. The proposal should also include an approach for program transition, a tentative
         schedule for implementing ideas proposed to meet the RM programsj goals, and prior experience rolling out
         these types of programs with other clients comparable to X Company.

         Attachment A contains existing levels of service for the X Company facilities covered in this solicitation.
         Bidders can base their operations plan on existing levels of service aijd the facility tours to be conducted after
         the pre-bid conference.                                         1                        i
                                                                                             i i
         The operations plan should specifically address how you propose to handle the management of wastes in areas
         below. The following paragraphs outline minimum expectations/responsibilities of successful bidders in each
         of the four areas:

         4.3.1    Reduce Waste Generation                             j
                  •    Identify all opportunities at each site to reduce the volume of waste generated with consent and
                      collaboration of facility management.               j                        ;

                  •    Work with designated X Company and designated personnel to develop plans and project
                      savings.                                         [
                  •    Obtain X Company approval for implementation.

                  •    Implement and monitor outcomes and savings, and report metrics in writing to X Company on a
                      quarterly basis.       '                           '.	:':	 ~"	  ::	"""  	'H "J	:
                  •    Educate and train X Company employees as needed oil source reductions measures.

                         Appendix   D:   Model   L a n g M a g e  for  RM  J8 F JP
4.3.2    Reuse/Return/Donate
        •    Identify opportunities to eliminate waste being disposed of or landfilled by reusing or returning
             purchased materials (e.g., shipping containers or pallets) or packaging. This will involve working
             with X Company and operating company procurement/purchasing staff and their suppliers.

        •    Work with designated X Company and facility-designated personnel to develop plans and
             project savings.

        •    Obtain X Company approval for implementation.

        •    Implement and monitor outcomes and savings, and report metrics in writing to X Company on a
             quarterly basis.

        •    Educate and tram X Company employees as needed on any instituted reuse/return programs.

4.3.3    Recycle/Compost
        •    Develop plans to source separate, collect, process, segregate, store, weigh, and keep records for
             all recyclable materials diverted from X Company waste streams.

        •    Identify the best markets for recycled materials and arrange for collection, processing and trans-
             portation of these resources.

        •    Identify opportunities to increase diversion through improvements to existing recycling programs
             and new recycling or composting programs.

        «    Current recycling programs include (list all programs here, including any composting). The suc-
             cessful RM contractor will be expected to expand and improve these programs, while adding
             additional materials for recovery  where practicable.

        •    Design and implement effective source separation and recycling programs while decreasing
             overall operational costs.

        •    The volume, weight, frequency of pickup, and revenue from recycled materials, tonnage and all
             other relevant metrics must be reported to X Company on a quarterly basis.

        •    The Contractor will be required to maintain third-party receipts,  for the duration of the contract,
             showing weights of materials sold, resulting costs and revenues. X Company maintains the right
             to review all such documentation, within one working day of its request, at any time during the

        •    Educate and train X Company employees as needed on proper compost procedures, segregation
             of recyclables/waste, and effects  of recyclable contamination.

4.3.4    Waste Disposal
        •    Arrange pick-up schedule, transportation, and disposal of all non-recyclables from X Company's

Appendix  D:   Model   Language   for   KM   RFP
                 •   Measure X Company's waste destined for off-site facilities, maintain accurate records of each
                     pickup's weights and volumes, and provide cost breakout for transportation and disposal fees
                     (and any container rental fees if applicable) with each bill.

                 •   Review, modify, maintain or establish all necessary waste management practices which provide
                     contractor and X Company with understandable and controllable work instructions.

                 •   Comply with all applicable regulations and X Company's policies governing the recycling, stor-
                     age, transportation, and disposal of trash.

                 •   Report in writing, the tonnage, costs, and disposal sitejX) of all X Company waste, and imple-
                     ment and monitor outcomes and savings, and report metrics in writing to X Company on a quar-
                     terly basis.                                       ,

                 •   The Contractor will be required to maintain third-party receipts, for the duration of the contract,
                     showing weights of materials disposed and tip fees, acid X Company maintains the right to
                     review all such documentation.                     i
         4.5.5    Process for Continuous Improvement                   	
                 •    Explain your process to provide continuous improvern|ent over the term of the contract (audits,
                      outreach and communications, etc).
        Waste Composition
        •    Describe the approach you will use to measure or estimate the composition of X Company waste
             streams.                                         \           :             !    ;     ;

        •    Identify your data information management tools that will be used to track X Company waste
             streams.                                         :

        •    The contractor shall provide monthly billing statements to X Company with all hauling costs
             separate from secondary material processing, recycling revenues/fees, or waste disposal tip fees.
             Propose line items you envision that meet the above requirements for cost transparency.
                                                             I                       ;
        •    Present your procedures for billing and allocation of costs (from pick-up to bill).
         Reporting and Performance Review                  j
The selected RM contractor will provide a comprehensive quarterly report that includes all activities related to
recycling and waste minimization efforts including costs, metrics, service levels, etc., and that provides visibili-
ty into waste minimization/recycling progress, performance, and cosits/savings. With this hi mind:

                          Appendix  D:   Model   Language  for  KM  RFP
         •    Discuss what should be included in quarterly progress reports to X Company.

         •    Discuss your approach for validating cost savings and increased diversion.

         «    Identify the performance metrics you will employ and your procedures for formally, both inter-
             nally and with the X Company, reviewing and assessing your performance.

The specific reporting elements will be mutually determined during the implementation phase and adjusted as
necessary throughout the contract. It is anticipated that the successful bidder will generate a draft quarterly
report after the first 3 months of the program. In this first report, the RM contractor will note specific data defi-
ciencies that may prevent its ability to report data by facility and by waste stream as agreed upon, and propose
how these deficiencies can be overcome. It is anticipated the second report, after month 6 of the program, will
be fairly complete and establish the format for subsequent reports.

As noted in the above sections, the successful RM contractor will be required to maintain third-party receipts,
for the duration of the contract, showing volume and weights of materials disposed/recycled and any
revenues/tip fees. X Company maintains the right to review all such documentation at its premises within one
working day of request.

The resource management Team at X Company and the RM contractor shall meet on a regular basis (at least
quarterly) to discuss progress, status, and performance of services. The successful bidder will be largely
responsible for spearheading and facilitating these meetings.

         •    Discuss what issues you expect to cover in these meetings and a proposed format.

4.7      Bidder's References
         •    List three of your current major customers and provide the information requested in Attachment
             E.  Include as many customers as possible that are comparable to X Company's requirements
             insofar as size and resource management requirements are concerned.

These are the general terms and conditions that will be included in the contract if a successful bidder is chosen.
The terms and conditions in the final contract will not be limited to those below, but may include additional
standard contractual terms and conditions.

Note: This section should not be lengthy, and you might even choose to exclude this section altogether and
only include all specific terms and conditions in the contract. The purpose of this section is to give bidders
advanced notice  on some of the major specifications, most of which they should be familiar with. Once again,
the content is heavily dictated by your organization's contracting experience and specific needs,  especially with
respect to insurance or other sensitive issues.


Appendix   D:   Model   Language  for  KM  RFP
                                                                                                                           fc	r	;	:,!!
         5.1     Equipment
         The Contractor shall furnish all the labor and supervision, tools, machinery and equipment to perform the work
         outlined in these specifications, unless otherwise indicated.

         5.2     Subcontracting
         The Contractor has full responsibility for: the coordination of the Subcontractor's work, including control of
         the quality, compliance with all federal, state, and local regulations and ordinances, and fulfillment of sched-
         ules. X Company reserves the right to reject any sub-contractor.    |                         ;
                                                                      • i"                       i

         53     Third-Party Indemnification
         The Contractor shall indemnify and hold harmless X Company and IJheir agents and employees from and
         against all claims, damages, losses and expenses including attorney'!! fees arising out of or resulting from the
         performance of the work, provided any such claim, damage, loss or expense (1) is attributable to bodily injury,
         sickness, disease, or death or to injury to or destruction of tangible property, and (2) is caused in whole or in
         part by any negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly
         employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it
         is caused in part by a party indemnified hereunder. In any and all claims against X Company or any of their
         agents or employees by any employee of the Contractor, any subcontractor, or anyone directly or indirectly
         employed by any of them, or anyone for whose acts any of them may be liable; the indemnification obligation
         under this paragraph shall not be limited in any way by any limitaticjn on the amount or type of damages, com-
         pensation, or benefits payable by or for the Contractor or any subcontractor under Workmen's Compensation
         Acts, disability benefits acts, or other employee benefits acts.

         5.4     Insurance
         The Contractor shall purchase and maintain such insurance as will protect them from claims under Workmen's
         Compensation Acts and other employee benefits Acts, including but not limited to, from claims or damages
         because of bodily injury, including death, and from claims or damages to property which may arise out of or
         result from the Contractor's operation under this contract, whether siiich operation be by themselves or by any
         subcontractor or anyone directly or indirectly employed by any of thiem. The insurance shall be written for not
         less than any limits of liability specified as part of this contract, or required by law, whichever is greater.
         5.5     Performance Bond
         A performance bond and also a labor and materials or payment bond and a lien bond, with a surety company
         qualified to do business under the laws of [the state where your facilities are located] and satisfactory to X
         Company each in the penal sum to 100% of the contract amount, may be required of the successful bidder.

         5.6     Health and Safety Considerations                    ;
         The Contractor shall take all reasonable precautions in the performatice of the work under this contract to pro-
         tect the health and safety of employees and of members of the public, and to minimize the danger from all

                         Appendix   D:   Model   Language   for   KM   RFP
hazards to life and property. The Contractor will be responsible for supervising all its personnel to insure that
the provisions of the Occupational Safety and Health Act of 1970 are being complied with, especially OSHA
Standard for Machinery and Machine Guarding, 29 CFR 1910.212,1984, and OSHA Standard for Personal
Protective Equipment, 29 CFR 1910.132-136,1994. In the event that the Contractor fails to comply with said
regulations, X Company may without prejudice to any other legal or contractual rights, issue an order stopping
all or any part of the work; thereafter a start order for resumption of work may be issued at the discretion of X
Company. The Contractor shall make no claim for compensation or damages by reason of or in connection
with such work stoppage.

5.7     Nondiscrimination and Sexual Harassment Issues
The Contractor agrees to post in a conspicuous place available to employees and applicants for employment,
notices setting forth the provisions of the nondiscrimination clause hi the contract. The Contractor shall also
periodically train all drivers and other  service personnel serving X Company on awareness and prevention of
sexual harassment.

5.8     Termination
X Company reserves the right to terminate this  contract, or any part thereof, on 30 days written notice if, hi X
Company's sole judgment, which shall be final, such action seems justified.

6.0     PRICING
This section outlines the guidelines for preparing your quote for RM services at X Company. In addition to the
narrative proposal outlining your.RM program (see Section 2.4), you should prepare your quote for the
requested  services over a 3-year period (note: the base contract length). Consistent with the goals of the RM
program, quantities of waste currently disposed are expected to decrease over this three-year period. X
Company has divided requested services to be bid in two sections: 1) a base financial proposal, and
2) a resource management compensation structure.

6.1      General
X Company recognizes that any supplier will provide on-site services for whatever level of services the buyer
chooses to purchase. X Company also recognizes that the typical approach hi the marketplace to providing
these services is to charge a management fee in addition to the cost of hauling and disposal. This is not the type
of approach X Company desires. Rather, X Company is prepared to make an extraordinary commitment to the
right partner(s) and develop a compensation structure that is tied directly to contractor performance allowing
the successful partner(s) to share in the savings achieved under this program. This rewards the successful part-
ner(s) for bringing technical expertise, process discipline, best industry practices, new technologies,  metrics
and industry talent to implement a successful program.

X Company will only consider responses that meet all of the requirements for the RM program (see Section 4),
and is consistent with program objectives (see Section 1).  X Company seeks an RM provider who can achieve
favorable pricing on waste and recycling, and provide a range of additional resource management


Appendix  D:   Model   Language   for   I
        services. To successfully meet its goals, X Company is prepared to dejvelop a strategic partnership with a
        provider over a minimum [initial contract length] year period.       I
                                                                     T           ,           ;  !
        6.2     Base Financial Proposal
        X Company is seeking a supplier that can achieve competitive pricing on existing waste and recycling services
        to all of its facilities. Part of the base proposal must include the billing, reporting and data management
        requirements as defined in Sections 4.5 and 4.6 of this RFP.

        The base proposal must consist of two components: a bid for hauling, recycling, and disposal services and an
        estimate of revenues or costs associated with existing recycling levels!. In short, the base proposal should
        reflect (lie price to overtake the existing levels of service as detailed in Attachment A. Bidders must submit a
        base proposal in the format of Attachment C to this REP (Tables C-I imd C-II) and be prepared to break out
        costs by facility if requested.                                    I
        6.2.1    Disposal
                 •   Separate costs for hauling and disposal must be submitted.

                 •   There are to be no volume guarantees on behalf of X Company. The objective of the program is
                     to decrease the amount of waste sent to the landfill.                            ]

                 •   Costs must be broken out by facility.                ;

        6.2.2    Recycling
                 •   Hauling and processing costs must be separate.       ;
                                                                                            I  i
                 •   Provide revenue estimates or costs for secondary commodities for the materials listed in
                     Attachment C, Table C-H.                                                  '','',.

                 •   X Company is open to innovative structures such that X Company and the successful bidder
                     share in the benefits of recycling during high commodity markets and share the risk during low
                     markets.                                         ;

        63      Proposals for Resource Management Compensation
        The goal of the RM program is to allow the successful bidder to profit from helping X Company achieve cost
        effective diversion and waste reduction. X Company understands the| successful bidder will incur costs to pro-
        vide RM related services. Instead of proposing additional fees for the:se services, the successful bidder is
        expected to propose a means to cover any recurring expenses, along with its profit margin, from overall RM
        program savings.  You may also choose to propose a cost recovery mechanism for start-up expenses (see
        Attachment G to this REP). Your proposal for resource management compensation that will provide you with
        an incentive for waste reduction, efficiency, and service enhancement should  be completed following
        Attachment C, Bid Section C-HI.                                '

        Savings may come from avoided landfill disposal costs, reduced hauling fees, increased recycling revenues or
        the elimination of a waste stream altogether, or any other documented cost savings. Overall program savings


                          Appendix   D:   Model  Language   for   KM   KFP
must be documented against reductions in the baseline costs. Baseline savings can be achieved in a number of
ways, including but not limited to:

        •    Increased recycling from existing programs through better education and outreach to X
             Company's employees.

        •    Stream lined logistics through optimization of container sizes and pick up schedules.

        •    Implementation of new recycling programs (new materials or new facilities).

        •    Working up stream with suppliers on packaging or returnable drum/pallet systems.

        •    Other diversion initiatives.

Within the first 6 months of the program, the successful bidder and X Company will establish a mutually
agreed upon baseline. This baseline will be calculated based upon the negotiated prices as set forth in the base
proposal and the existing levels of service as detailed in Attachment A, and will serve as the current level from
which diversion levels and cost savings will be measured.

Attachment G outlines some options for different compensation elements that you may wish to consider for
your proposal.


> p e n d i x D: Model Lan
for E
I 	 • :
Tlie following two tables are sample template of waste and recycling volume and service levels.
Table Al. Waste and Recycling Volume Estimated for 2001

Facility A
Facility B
Disposal *

Recycling *
11 0.6 tons


Plastics Est.
1.0 25%

* Hypothetical figures '
Table A2. Waste and Recycling Service Level

Container Size and Collection Frequency

Facility A
Facility B
One 40-yd
on-call service
One 35-yd
on-call service
Cardboard N
Two 2-yd T\
containers; c<
5 times o
weekly w
Three 2-yd O
containers; c<
once per o
week w
wo 0.5-yd
ice per
ne 0.5-yd
nee per
Mixed Office Bottles and
One 2-yd Two 0.5-yd
container; containers;
once per once per
week week
Two 0.5-yd Two 1 -yd
containers; containers;
once per twice a
week month


                        Appendix   D:   Model   Language  for  KM   RFP

Please return your response to this attachment (this and folio wing page) via fax to [name of contact] at
\phone number} by no later than [time] on [date]. Detailed information on the pre-bid meeting (directions,
agenda, etc.) will be sent [number of days] prior to the meeting.


The individual submitting the Proposal represents and certifies as part of the Proposal that he/she is authorized
to act as an agent for the company responsible for this Proposal.


The information and data contained in this REP is confidential and may not be discussed or disseminated to
any third party without X Company's prior written permission. Company shall not disclose any information
contained in or concerning this Request for Proposal, directly or indirectly, to any person or business entity
except for a limited number of employees directly involved in preparing a response to this RFP. No news
releases, public announcements or any other references to this proposal shall be made without the prior written
consent of X Company.

Independent Preparation of Proposal

Any proposal submitted in response to the RFP will be developed independently, without consultation, commu-
nication, or agreement for the purpose of restricting competition, to any matter relating to costs or terms with
any other respondent or any representative of such respondent.

A. Statement of Receipt and Intent to Propose
 Hereby acknowledge Receipt of RFP

 Print name

. Authorized Signature


 Please "BOLD" one and delete the other BEFORE RETURNING THIS PAGE.

 We plan to submit a proposal in response to the X Company RFP1 for resource management Services.
 (Please fill in Part B and C)

 We do not plan to submit a proposal in response to the X Company RFP for resource management Services.
 (Cont'd on next page)

Appendix  D:   Model   Language   for  K M   R FP
        B. Authority and Intent to Propose                           i

        Companies must designate one point of contact for all proposal communicadons. Each bidder is responsible for
        notifying X Company immediately of any change to such point of contact.
        Name of Authorized Agent:
        Title of Authorized Agent:
        Company Represented:
        Signature of Authorized Agent
        RFP Contact:
        Contact Address:
        Contact E-mail:
        Contact Phone:
        C. Representatives Attending Pre-bid Conference and Facility Tour
        Number Attending Site Visits (max. 3)
         1. Name and title of attendee #1
          E-mail Address:
        2. Name and title of attendee #2
          E-mail Address:
        3. Name and title of attendee #3
          E-mail Address:

                          Appendix   D:   Model   Language   for   JR M   KFF
  Bid Section C-L Base Proposal - Waste and Recycling Service Cost

  The following tables provide a template for bidders to follow.  It forces them to disaggregate their pricing and
  make their bids "transparent".

  Please provide your waste and recycling service costs for Contract Year 20XX based on the service level in
  Attachment A. You are also given space below the table to document any expected rate changes in subsequent
  contract years.

  If this bid is accepted, the contract will in no way guarantee the successful bidder the current estimated tonnage
  or levels of service (see Attachment A) over the life of the  contract. In fact, it is {X Company }'s intent with an
  RM program to increase diversion such that land filled tonnages and waste hauling service will decrease while
  recycling service will increase over the contract period.

  Waste Disposal Bid
Contract Year 20XX

(per pick-up,
35-yd compactor)
(per pick-up,
40-yd open box)
Add hauling for
other containers
per above rows
(per ton)
Other Costs ++

Unit cost
Estimated No. Units *

Estimated Total Waste Collection and Disposal Cost
  * Base estimates on service level in baseline year (see Attachment A)
  ++ Specify the type of costs (e.g. container rental) in space given in table

  Indicate in the table below if you expect changes in Contract Years 2 and 3 to the rates bid for Contract

Hauling rate change (container 1)
Hauling rate change (container 2)
Disposal Rate change
Other cost change
Year 2



Appendix  D:   Model   Language   for   EM   RFP
         Paper Recycling

         Indicate the number and size of receiver containers (provide costs of containers, if any, in "Other Costs" por-
         tion of table below):
                              Contract Year 20XX
         (per pick-up)
         (per ton)
         Other Costs -H-
                              Unit cost
                 Estimated No. Units *
         Estimated Total Paper Recycling Cost
         * Base estimates on service level in baseline year (see Attachment A)                           ,
         -H- Specify the type of costs (e.g. container rental) in space given in fable
                                                                      i                       i
         Indicate in the table below if you expect changes in years 2 and J3 to the bids given for contract year
         2oxx.                                                       '!"           '•        '  !
          Hauling rate change
          Disposal Rate change
          Other cost change
                                                Year 2
                                                                             Year 3
          Note: Tlie Paper Recycling table can be duplicated for other recyclable streams (corrugated cardboard, com-
          mingles containers, etc.) to provide a form for all current recycling,services.)                          i


                          Appendix  D:   Model  Language  for  RM  RFP
 Bid Section C-EL Resource Management Compensation

 The request for a proposed RM compensation mechanism should remain fairly flexible. You might want to
 insert language like that below and provide examples to bidders on how they may choose to structure their
 compensation proposal in a separate attachment to your RFP, given in this sample RFP as Attachment G

 {X Company} intends to share documented savings that come from resource efficiency improvements pro-
 posed by the RM contractor, including but not limited to: avoided hauling cost, avoided disposal cost, com-
 modity revenue or other cost savings the successful bidder can document. The bidder is required to propose a
 feasible and equitable contract mechanism outlining how cost savings will be shared for the three contract
 years. Provide required descriptive support and tables in this section.

 Please see Attachment G for examples of potential compensation mechanisms. Bidders are encouraged to pro-
 pose innovative, equitable compensation schemes. As per Section 5.3 of this RFP, the Contractor and {X
 Company} will establish a mutually agreed upon baseline in die first 6 months of the program.

 Note: The successful bidder will be required to track and report savings that come from the RM program. The
 actual compensation mechanism for RM services will be negotiated and finalized during contract negotiation.
 (Attach additional pages as necessary)

  Company Name:

Confidential                                                                                 xxn

Appendix   D:   Model   Language
for    MM   R
Please provide the information requested below. ;
' i !,

Supplier name:
Hours/days of operation:
Emergency operation hours/services:
1 i '


	 i i .
General company description:
Years in business:
Company Status (Public, Private,
2001 Revenue:
Number of customers:
Number of customers in the [geographical
area, e,g., Northeast] US Region:
Number of customers in the [x] industry:
Number of employees:
Number of employees in the
[geographical area, e.g., Northeast]
US Region:
Number of employees servicing the
[x] industry:
Office locations:
Provide a description of your client base:
List parent company and/or subsidiaries:

! • , ,



Confidential i xxiii
maaauuj "mn'isa a^Mia'.i^^jjm^ iffliiM^^^Sw^-sgteS^^.fe^^^^^M^^^^«^ajJg;i^^ '"& "<* "'"""

Appendix    D:    Model    Language    for    RM    RFP
Provide the names, contact and other information of three current customers with sunilar facility management
needs and organizational structure as X Company whom we may contact for references. By providing this
information, you authorize X Company (or designated representative) to contact these customers.

Customer Reference #1:
Company name
Business type
Contact person
Services provided
Approximate contract value ($)
and/or tonnage managed
Number of years as customer
Waste minimization/recycling milestones

Customer Reference #2:
Company name
Business type
Contact person
Services provided
Approximate contract value ($)
and/or tonnage managed
Number of years as customer
Waste minimization/recycling milestones

Customer Reference #3:
Company name
Business type
Contact person
Services provided
Approximate contract value ($)
and/or tonnage managed
Number of years as customer
Waste minimization/recycling milestones




Confidential xxiv |
^£j£^^K_^_ _—**_. ' ™^»i»ia>SS£LJ,-- ,^_i*> -J^jaSP'.MJl. _-S*±k^, _!5&i-* •* 	 _~~*— iJ

Appendix  D:  Model  Language  for  I
       [Insert your company's / organization's environmental policy.]
       [See Appendix E of this RM manual.]

       i. Facility A
       [Map of Facility A]
       [Address of Facility A]
       ii. Facility B
       [Map of Facility B]
       [Address of Facility B]
       [See enclosed Waste Wise Update.]                       :


Appendix   E:   RM   Compensation
                           As we've seen in Appendix D, your RFP should be structured to request com-

                        pensation proposals from bidders so you can ascertain:

                        •  How much it will cost for the RM contractor to take over existing services ("base

                           proposal") (see Appendix D, sections 3.1, 6.2).

                        •  The bidders' proposed compensation format for other RM services (basically a

                           formula for splitting cost savings achieved from the base proposal costs, see

                           Appendix D, section 6.3 and "RM Compensation Options" below).

                        •  Pricing for additional miscellaneous waste streams that not regularly generated

                           and are not specifically included in your request for proposals (see

                           "Miscellaneous Waste Streams" below).

                           Structuring services in this way will allow you to compare proposed costs with

                        your current cost baseline. It will also allow you to evaluate several different bid-

                        ders' proposed compensation options to determine which is likely to make the most

                        of RM by providing strong incentives for the selected contractor to reduce, reuse,

                        recycle, and maximize efficiency of service.

                           This appendix provides sample tables and examples to help structure the RM

                        compensation components of the bid and miscellaneous waste streams as effectively

                        as possible.
                                                between'BaseProposals and RM...,' "^ ^ -^
                             ^<"{ "   *'"'   - ~J"~- Transparency is the Key '  '"\   s-^*  -

                           Getting bidders^present sepajate pricing for servicelcornponents^   -
                           slices hauling, disposaLprocessing fees, container cha/gesTetc is  ^
                           ~necessat/for RM to wo'rk.  |y making prices "trpnsparent", cos^sav-
                           -irvgs^rdrn recycling, waste^reductjon^altcl other, efficiencies can be  -  -
                          ''-'realized.  You aTe.then sible to redistributed portion or all of the cost
                          ' savings resulting"frbrrurnprovernents to youY.fiivl contractor.' This isn't
                           ppssible^whenjptrarVsimply paying a lumped fee^for a|[sery5ces"
                           '(which results in a"fixe4 level of-service at"a«fi)ced cost)/^
                          *LOur" experience has shownWat disposal and^HaulingAcosts;t)'ften can- ^4 I
                          - not be disaggregated because It-is not ecorfomica/to^put scaj.es on'*
                           .'trUcks (which may be collecting, wasteTrom other clients),' iri thjs^ase,^'
                          "struciynng p/icing on a $$/pick-up leye|,:while les&preferableVwould
                          -  still allow you^O'Telcoup, costs forxefch avso!d|d'pick-up (as a^result of   «

Appendix  E:  RM  Compensation   Op It ions
                              RM Compensation Options
                                 Two main options exist for the Rl^l compensation component. These can be pro-
                              vided as samples in an Attachment t your RFP. The final choice of which method is
                              selected will be determined by the level of comfort the customer and bidders have
                              with each option and whether consensus can be reached. The goals of such a mech-
                              anism is to create a mutually beneficial business relationship that drives inefficiency
                              and cost out of system, reduced costs, achieves cost-effective resource efficiency,
                              recovers savings, and shares savings between you and your RM contractor. The
                              compensation and incentives should ibe tied to continuous improvement in resource
                              efficiency such that your RM contractor's profit margins improve from helping you
                              decrease waste generation and increase f euse and diversion (recycling and compost-
                              ing). Two different compensation options follow:
   Option 1. Pass-Through of Service Costs with "Shared Savings" and
Performance Bonus. The contractor provides all required services (e.g., tip fees,
hauling fees, container rental) on a "post pass-through" basis. This cost pass through
is based on the bids received to take :over existing services (Base Financial Proposal).
When the contractor implements changes or improves the system to permanently
decrease costs, the contractor shares in some of those savings. Examples of savings
opportunities include diverting more materials (taking advantage of marginal total
cost of recycling vs. disposal), making handling and hauling procedures more effi-
cient, "right-sizing" containers  for cost savings and behavioral change (e.g., smaller
trash bins, more prominent recycling stations), and helping to reduce waste genera-
tion in the first place,              i
                                                                           '     f1
   Shared savings can work in numerous ways, especially in varying the percent of       !
savings received by the customer and the contractor. Several options are outlined
below; the percentage split in shared  savings is shown for exemplary purposes.
   You and the contractor share all cast savings at 50/50 percent.
                                                     i  '        .
   You get 100 percent of the savings up to a predetermined level (for example, 5
percent). Once this level has been reached, then you and the contractor split the
                              savings above this amount usually in
                              pie, you could get the first 5 percent
                                 a ratio that benefits the contractor. For exam-
                                                     !     '
                                 and then above this amount, you get 30 per-
                              cent of the savings and the contractor gets 70 percent.
                                                               i                    i
                                The use of a performance bonus is a third option. Under such a scheme, you
                              increase the percentage of cost savings given to the contractor when the company
                              meets certain performance targets. For example, as a variation on option 1, initial
                              savings are split 50/50. If the contractor is able to meet certain performance targets,
                              however (such.as increasing overall recycling by 10 percent in any given year), you
                              allow the shared savings to be split at a level of 60 percent to the contractor and 40
                              percent to you.

                                Option "1-c" is recommended du>; to its focus on measurable improvements to
                              performance. Without this link betwjeen incentives and environmental goals, there is
                              the risk that only the "easy" cost savings from economies of scale and leveraged buy-
                              ing are pursued. Its intent is to increase the incentive to the contractor and die cus-

     Appendix  E :   R M  Compensation  Options
tomer to decrease system wide costs and achieve pre-determined diversion and waste
reduction goals. By tying increasing levels of diversion/waste reduction to increasing
incentive levels, there is a proportionately higher incentive to commit resources for
these improvements and higher diversion levels.
  ^bu may choose to ask for a performance bonus proposal as a more favorable split
for the contractor, like this:
  Tying Diversion Improvement to the Contractor Performance Bonus
Diversion Rate
Current diversion rate
Current diversion rate +15%
Current diversion rate +20%
Current diversion rate +>25%
Split (% Client/Contractor)
   Tying Waste Reduction to the Contractor Performance Bonus
Waste Reduction (as measured
from baseline, % in total generation,
normalized if possible)
Split (% Client/Contractor)
   Option 2. Fixed Cost with Guaranteed Cost Reductions. The RM contractor
provides all services (e.g., hauling, recycling, disposal, containers, personnel, equip-
ment/materials) for a pre-defined, fixed annual cost. This cost is determined based
on the previous year's total costs and includes a guaranteed cost reduction.
   For example, assume after the initial contract period that for the scope of facili-
ties included in the contract, the customer is paying $120,000 per year for its ser-
vices. The initial monthly cost would then be $10,000. Further assume that the con-
tractor agrees to provide the customer with a 5 percent1 annual cost reduction
($6,000 total or $500 per month). Under this option, the customer would then pay
the contractor $9,500 per month during the first year. This would be a profitable
proposition for the contractor if the company has a decent level of confidence it can
realize greater than 5 percent cost savings within the first year. For example if the
company achieves a 15 percent reduction in costs, they would keep 10 percent while
maintaining the guaranteed 5 percent reduction to the customer. This arrangement
can work well when the amount of waste generated remains relatively constant. The
1 Note: All percent splits are used as examples and may be adjusted for each specific

Appendix   E:   RM   Compensation   Options
                               contract would contain a clause that if waste generation exceeds a threshold (for
                               example +/- 5 percent) over the baseline that was used to determine the annual cost
                               of services, the base fee is revisited. Thus, if some external circumstances (such as
                               expansion of a facility) cause a large increase or decrease over this threshold, both
                               parties reset the base fixed fee.                         • j  j
                                  The advantage of this mechanism is that it is .relatively simple, and the customer
                               is able to budget for each year with a high degree of certainty. It provides an incen-
                               tive to the contractor to provide the jrequired services in a more cost  effective way,
                               since savings go straight to the contractor's bottom line.2 It would also shift more of
                               the responsibility to the contractor to drive down costs. In theory, however, the cus-
                               tomer does not have a direct financial incentive to continue to improve since it is
                               guaranteed 5 percent cost reduction i(no more and no less). This arrangement gen-
                               erally is used when generation levelsj have been fairly predictable and stable. It
                               might not be appropriate if generation fluctuates wildly and both parties are con-
                               stantly re-setting the base fixed fee.
                                  A simple bid table for this option might look like the following:
                                  Sample Bid Table for "Fixed Cost" Proposals
Compensation Component

1. Resource management fee. Indicate the
annual fixed fee for the first 3 years to
cover the all base services as derailed in
Attachment X and additional ILM
Requirements per Section X of this RFP.
2. Guaranteed savings as a percei
it for each
contract year
3. Indicate gain-shared savings sj
guaranteed savings shared beta
lit beyond
X Corporation and contractor;
X Corporation % / Contractor %

Year 2

Year 3

                                   Other Options:
                                                            Compensation per unit
                                (e.g., $/per unit of product made or $/employee, hotel guest, square foot for institu-
                                                     tional clients), $$/square foot for retail)
                                   Advantages are that costs "self-adjust" to production or work loads, and there is
                                an incentive to the contractor to decrease costs for larger profit margin. As with
                                other compensation options, however, unavoidable cost increases (rates) can require
                                renegotiation. This "per unit" medr.od is extremely difficult to apply in cases where
                                there are many different types of "tinits" in play. It may work well for an auto pro-
                                 1 This can occur either by reducing the unit price of disposal, or, more importantly,
                                 decreasing the volume disposed/increasing diversion, or managing the process
                                 (hauling, handling, contract management) more efficiently.

     Appendix   E:  RM  Compensation  Options
ducer or company that makes a single or limited number of products, but will not
work well for manufacturers who make tens of hundreds of different products. If
the contractor and the customer are confident in the costs, such a mechanism may
be worth investigating.
   Compensation for any capital expense type project
   Some improvements may require some upfront capital costs - the purchase of
hew recycling containers, for example. In such cases, either the contractor or cus-
tomer can put up the capital, but any capital costs should be fully recouped before
the gain-sharing split takes effect.
   Savings should be determined from a baseline of a minimum of 6 months of ser-
vice/cost records. Savings will first be used to recoup 100 percent (or another pre-
determined percentage, with dollar cap) of any additional costs associated with the
implementation of a proposed activity. Eligible costs should include any costs asso-
ciated with additional containers, equipment, processing fees, but will not include
the contractor labor to design and implement the program. Once any eligible costs
have been recouped, the contractor and the customer can split the remaining sav-
ings at a 50/50 split, or choose some other split as described above.
   In summary, the  RM compensation structure must be established in a way that is
beneficial for both parties. Mutual benefit is critical to establishing a strong, long-
term relationship. Note, however, that the above are EXAMPLES, and other rea-
sonable compensation options that meet the above program goals should be consid-
Miscellaneous Waste Streams
   Similar to baseline existing services, the goal is to obtain transparent pricing for
additional services that might be requested, such as disposal or recycling of univer-
sal wastes (e.g., batteries, fluorescent lighting tubes).
Unit Priced Items
Mixed batteries per pound
Lead acid batteries, per pound
Fluorescent bulbs per bulb:
- 4 foot
-8 foot
- U-shape, circular, compact
Broken bulbs, per pound
Mercury, per pound
Unit Rate


Appendix   F:   Comparison   of   Cost
                           This appendix provides a guide for comparing and evaluating the cost proposals
                        submitted by the bidders. As noted in the manual (Chapter 5), the cost saving
                        potential presented in the cost proposals depends on different assumptions. The
                        best way to evaluate and compare the bid is to model each compensation proposal
                        in a spreadsheet so that you can vary the assumptions to test the sensitivity of cost
                        saving estimations. If an obviously favorable proposal exists, you might not need to
                        perform this exercise.              i
                           The analysis comprises three main tasks:
                        1.      Estimate savings potential
                           The first step is to read through iill compensation proposals, list the fees pro-
                        posed and the hypothetical cost savitigs, and identify assumptions made for the cost
                        savings estimation. For each type of cost savings, estimate the savings that you can
                        realize—for some cost reduction items, you might need to share the savings with
                        your contractor (e.g., reduced disposal cost). Remember to use your baseline cost
                        data as a reference against all proposed scenarios.
                        2.      Modeling the costs and benefits
                           Table F-l presents a sample worisheet for modeling costs and benefits for a
                        single bid. The example used in Table F-l  assumes that your organization pays
                        $78,000 a year in external contracted costs and incurs additional costs of $2,500 that
                        are spread across several individuals to handle billing, environmental reporting, etc.
                        You should have estimated these costs in Chapter 3  of this manual. Company A has
                        submitted a bid, and the potential savings based  on this bid are discussed below the
                        table.                            !
f	'•	:	JJ

Appendix  F:   Comparison,  of  Cost  Proposals
       Table F-1:  Sample Worksheet for Modeling Costs and
            Benefits for Company A's Financial Proposal

A. Baseline cost
Al.Current waste and recycling contract costs
A2.Internal management cost
Bid Received from Company A— Potential Savin
B. Transition savings
Your company's share
C. Savings from waste disposal cost
Your company's share *
^^Q. %ur^mpany%javings ~ " •-
D. Savings from waste hauling fee
Your company's share *
E. Increased recycling revenue
Your company's share *
-' EliTSottTcompany's sayings __*, ....,.«
Potential Cost Increase
F. Increased recycling processing and hauling fees
^VoorTpj^j^elSavingsCBI.^Cl^Bl t El -i)J
$ 80,500
$ 78,000
$ 2,500
$ 3,000
l^^ 3,000 v
$ 5,000
$ 2,500 < ,
$ 2,500
$ 1,500

$ 1,000
v.$, 6',5QO'^
Year 2
$ 80,500
$ 78,000
$ 2,500

$ 3,000
1$ "5,000
$ 7,500
"$_ ,3,75(T
$ 3,125
$ 2,250

$ 1,300
$ 8,138"""
j ^*
$ 80,500
$ 78,000
$ 2,500

$ 3,000
" $ " 1113:
$ 9,000
ri'_ 4,506 ~
$ 3,750

' $ 2,700
T~ 1,350

$ 1,600
s i
Appendix  F:  Comparison  of   Cost   P
                              RM Savings from Continuous Improvements
                                C.   Savings from waste disposal cost, which could come from enhanced
                                     recycling and/or reduced resources use (e.g., change of disposal packaging
                                     to reusable ones, beneficial use of coal a,sh). These are hypothetical savings
                                     estimated according to the bidders' assumptions on the potential reduction
                                     in disposal tonnage as a result of enhanced recycling and other resource
                                     efficiency improvements. YDUT share of savings is based on the proposed
                                     percentage of gain-sharing bid. (Line C)
                                D.   Savings from waste hauling fee, which could come from waste reduction
                                     and optimizing hauling arri ingement. These are hypothetical savings based
                                     on bidders' assumptions on
                               waste reduction potential as a result of resource
                                     efficiency improvements and optimizing hauling arrangement. Your share
                                     of savings is determined based upon the proposed percentage of gain-shar-
                                     ing bid. (Line D)
                                E.   Increased recycling revenue, which comes from increased recycling. This
                                     is estimated based on bidders' assumption on recycling tonnage and the
                                     potential market price of reicyclables. Your share of savings is determined
                                     based upon the proposed percentage of gain-sharing bid. (Line E)
                              Increased Recycling Fees
                                F.   Increased recycling processing and hauling fees, which is the service
                                     charge for hauling and processing recyclables. Such a fee is expected to
                                     increase over time as more recyclable materials are diverted from the waste
                                     stream. This fee is estimated based on the bidders' assumptions on
                                     increased recycling throughout the contract term, and the proposed recy-
                                     cling processing and hauling fee. (Line F)
                              Total Net Savings              !
                                     Total net savings equals to the sum of all savings (Line B1 + C1 + D1 +
                                     El) minus the increased recycling processing and hauling fee (Line F).
                                     Testing the sensitivity of your estimation
                                Once you have established your model, you can test the sensitivity of your esti-
                              mation to various assumptions. Those assumptions include, but  are not limited to:
                                                                                : i
                              • Prices of recycling commodities
                              • Cost for waste disposal and recyc ling processing
                              • Reduction in waste disposal
                              • Composition of increased recycling
                                                                                 | |
                                Run a few scenarios for each bidder's proposal, and provide your team members
                              a summary sheet of each compensation proposal. By doing so, your team should be
                              able to compare and rank the proposals and assign the scores for various proposals.
                                                                                                            i	,,,,'

Appendix    G:   Climate    Change
                           By providing financial incentives to the RM contractor, a successful RM program
                         increases waste diversion, reduces consumption of resources, and fosters source
                         reduction in your organization. As a result, your impacts on climate change can be
                         reduced in the following ways:
                         • Reducing the volume of waste sent to landfills and incinerators, which results in
                           fewer methane emissions from landfills, and reduced carbon dioxide and nitrous
                           oxide emissions from combustion.
                         • Minimizing the demand for virgin materials, thereby reducing energy consump-
                           tion to extract, process, and manufacture the products from those virgin materi-
                           als. The reduction in energy use minimizes fossil fuel consumption, thus result-
                           ing in fewer emissions of carbon dioxide and nitrous oxide.
                         • Slowing the logging of trees and hence maintaining the carbon dioxide storage
                           capacity provided by forests.
                           An EPA report—Solid Waste Management and Greenhouse Gases (GHG): A Life
                         Assessment of Emissions and Sinks3—provides greenhouse gas (GHG) emission factors
                         for 16 types of materials under different waste management strategies, including
                         source reduction, recycling, landfilling, incineration, and composting. Based on the
                         level of waste, diversion and source reduction through RM contracting, you can
                        i quantify the GHG reductions from increased waste diversion or source reduction
                         by using these emission factors. The following table lists the GHG emission factors
                         presented in metric tons of carbon equivalent (MTCE)4.
                           Periodic calculations based on measured diversion results should be performed to
                         evaluate the actual effectiveness of your RM program on mitigating GHG emis-
                         sions. These calculations may be something delegated to the RM contractor as part
                         of the normal reporting process.
                         3 The report is downloadable at: http://yosemite.epa.gov/oar/
                         4 The report also presents GHG emission factors in metric tons of carbon dioxide.


Appendix  G:  Environmental   Bene
fits   and  Energy   Savings
                                 Table G-1: Net GHG Emissions from Source Reduction and
                                            MSW Management Options—(MTCE/Ton)1
Aluminum Cans
Steel Cans
Corrugated Cardboard
Magazines/Third-class Mail
Office Paper
Dimensional Lumber
Medium-density Fiberboard
Food Discards
Yard Trimmings
Mixed Paper
Broad Definition
Residential Definition
Office Paper Definition
Mixed Plastics
Mixed Recyclables
Mixed Organics
Mixed MSW as Disposed


: -0.67

-0.21 :


                               Note that totals might not add due to rounding and more digits might be displayed than are significant.
                               NA: Not applicable, or in the case of composting of paper, not analyzed.                                    '
                               ' MCTE/ton: Metric tons of carbon equivalent per short ton of material. Material tonnages are on an as-managed
                                (wet-weight) basis.                      ;  '   ;; '""  "V,;1     '„'['";"*'  .'}.'.':. ;"''.   ;   '.    ""!"    ! I ""!  "'"'
                               2 Source reduction assumes initial production using the current mix of virgin and recycled inputs.
                                                                 • \                      i  .         ,                   | in i  	
                               ' There is considerable uncertainty in our estimate of net GHG emissions from composting;                      ,
                                the values of zero are plausible values based on 'assumptions and a bounding analysis.                          ,
                               4 Values are for mass burn facilities with national average rate of ferrous recovery.                             .
                               * Values reflect estimated national average methb ne recovery in year 2000.                                  [
                               * Excerpted from Solid Waste Management and Greenhouse Gases: A Life Assessment of Emissions and Sinks,        '
                                Exhibit ES-4.                       "!	:'""'	"	:	:	    '  ' '  	';	'  "
                                                                                                   :                 •  |
                                  Using the GHG 'emission factors! from the EPA report, the Agency has also          ;
                               developed a  user-friendly spreadsheet tool, WAste Reduction Model (WARM), to       :
                               help companies calculate the GHG impact of waste reduction or recycling activities.
                               By simply entering the baseline waste generation and recycling information, the         ;^.
                               tonnage of waste disposed, source reduced, and recycled after the implementation of   •••
                                                                                                   !     '             ~

Appendix  G:  Environmental   Benefits  and  Energy   Savings

                              RM, and some information about the current waste management system, the tool
                              can generate an estimate of the net GHG impact. This model could also estimate
                              the energy impact of an RM program. A Microsoft Excel and Web-based version of
                              this tool is available online at .

Appendix   H:   Waste Wise   Partners
                               Innovate   with
                               Resource   Management
                           WasteWise is a free, voluntary pai tnershipprogram that helps organizations
                         eliminate costly municipal solid wastb (MSW), benefiting their bottom line and the
                         environment. Through WasteWise, EPA teams with businesses, governments, and
                         institutions to improve source reduction, recycling, and demand for products with
                         recycled content.                 [
                           At its core, WasteWise revolves around resource efficiency. Partners do more
                         with less: they strive to reduce waste in their operations, to recycle the waste they
                         do produce, and to dispose only as a
last resort. WasteWise and RM naturally com-
                            J~      '          •*•                                ,
                         plement each other. For many WasteWise partners, RM simply means aligning
                         waste contractors' efforts with existing WasteWise activities.
                         The WasteWise Advantage
                            WasteWise partners implementing RM can take advantage of an array of
                         resources to facilitate the effort. WasteWise maintains an RM Web page,
                         , that provides an overview of RM and links
                         to other information. Partners can participate in workshops and meetings focused
                         on resource efficiency, contracting, and performance evaluation. WasteWise publi-
                         cizes best RM practices and highlights partners' RM success stories in its publica-
                         tions, on its Web site, and at its annual, national awards ceremony.
                            Every WasteWise partner works with a dedicated account representative, a single
                         point of contact and industry specialist who can bring partners together to share
                         RM information and connect partners with relevant outside experts and state and
                         local officials. Account representatives also help set waste reduction goals, track
                         progress, and measure success.  ThisJ type of technical assistance can play a signifi-
                         cant role in helping an organization! structure tracking and reporting efforts for RM
                         implementation. Partners implementing RM as part of their WasteWise goals track,
                          measure, and report progress on an
annual basis, making them eligible to receive
                          national public recognition from EPA for their efforts.
                            WasteWise is currently piloting 'die methodology contained in this manual,
                          Resource Management: Methods to Improve Resource Efficiency Opportunities, with two
                          partners, Raytheon Company and Fairview Health Services, and will use this manu-
                          al as a "how to" guide for other members. WasteWise partners indicated in the
                          Acknowledgements section have alsb been critical to testing RM principles and
                          guidelines that are addressed in thisj manual.

   To capture the manual's suggestions in condensed form, the program recently
dedicated an issue of the WasieWise Update, its technical assistance publication, to
RM. The Update summarizes KM philosophy and practices and gives examples of
successful implementation (to download a copy, go to
Making It Work
   Some of the biggest names in RM participate in WasteWise, and many
Waste Wise partners view RM as a natural continuation of their environmental and
operational leadership. General Motors Corporation (GM), which coined the term
"resource management," is a WasteWise charter member. GM first tested RM in
1991 and expects to complete its domestic RM roll-out by 2003. At its Orion
Assembly Plant in Michigan,  GM realized a 30 percent decrease in 3-year waste
management costs and a 25 percent reduction in per-vehicle waste generation.
   Public Service Enterprise Group (PSEG), another WasteWise charter member,
began RM in 1993. PSEG's program comprises both MSW and hazardous waste;
results include decreased waste management costs, generation rates, and disposal
volumes. Between 1994 and 1996, PSEG saved $1.8 million through its RM efforts.
For RM case studies on PSEG, GM, and other partners, see the WasteWise Update
enclosed in this manual.
Get on Board!
   WasteWise and RM go hand-in-hand. If you are considering RM, consider
WasteWise. The program provides the tools, expertise, and assistance that can make
successful RM a reality. Contact WasteWise today to sign up for reduced waste and
improved performance:
                       "^ "     www.ep^gov/wastewise  ^ 5

                                                                       OMB No. 2050-0139
                                                                       Expiration Date: May 31, 2004
Preserving Resources,
  Preventing Waste
   Partner  Registration Form
                                 i                i
] Yes! My organization is ready to Ibecome a WasteWise Partner.
 Please send me a membership packet.
 (Please complete sections A, B, and C)
] I would like more information about the program.
 (Please complete sections A and B )
  Section A: How did you hear about the WasteWise program?
  O Another Company, Government, or Institution (Name)	
  Q Direct Mail from WasteWise	.	
  O Other EPA Program (Name)		
  n Periodical/Publication (Name)	
  [_] PSA/Advertisement (Location)		
  C] Trade Association (Name).		
  Q WasteWise Website	—	-
  Q Workshop/Conference (Sponsor).
  D Other (Specify)	
  Section B: Complete and return for more information or visit our website at
  Organization Name:	.	—-j—
  SIC Code or Industry Sector, or Type of Government:	.	\—
  Check if a: [^Subsidiary or C] Division. Name of Parent Company (if applicable}: _
  Principal Contact:	_	—
  Phone Number:,
                                     . State:.
                                     _ Fax: .
  Section C: Continue with this section ONLY if you ar« joining as a partner.
                                                      i                !
  Facilities to be included in initial waste reduction efforts:
  (e.g., corporate or government headquarters only, regional facilities, all offices and; plants, etc.)
  Approximate Total Number of Employees in these Facilities:
  Signature of Senior Official:	
  Print Name:
   Please fold and mail or fax to WasteWise at 703 308-8686 or register electronically at
   .      1 0 0