resource recovery plant implementation
guides for
municipal officials
planning and overview
technologies risks
and contracts markets
accounting format
financing
further assistance
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ft. j.
This publication is part of a special series of reports prepared
by the U.S. Environmental Protection Agency's Office of Solid Waste
Management Programs. These reports are designed to assist municipal
officials in the planning and implementation of processing plants to
recover resources from mixed municipal solid waste. Alan Shilepsky
is responsible for overall project direction.
The title of this series is Resource Recovery Plant Implementation:
Guides for Municipal Officials. The parts of the series are as follows:
1. Planning and Overview (SW-157.1)
2. Technologies (SW-157.2)
3. Markets (SW-157.3)
4. Financing (SW-157.4)
5. Procurement (SW-157.5)
6. Accounting Format (SW-157.6)
7. Risks and Contracts (SW-157.7)
8. Further Assistance (SW-157.8)
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This environmental protection publication (SW-157.5) in the solid
waste management series was prepared for the U.S. Environmental Protection
Agency by The Mitre Corporation, Bedford, Massachusetts, under Contract
No. 68-01-2647 for which Alan Shilepsky served as EPA's Project Officer.
Technical content of this report was approved by the Resource Recovery
Division, Office of Solid Waste Management Programs. Mention of commercial
products or services does not constitute endorsement of the U.S. Government.
Single copies of this publication are available from Solid Waste
Information, U.S. Environmental Protection Agency, Cincinnati, Ohio 45268.
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TABLE OF CONTENTS
SECTION I PROCUREMENT OF RESOURCE RECOVERY SYSTEMS -
AN OVERVIEW
OTHER IMPLEMENTATION ACTIVITIES
DECIDING HOW TO PACKAGE THE PROCUREMENT
Conventional Approach
Turnkey Approach
Full Service Approach
DECIDING HOW TO CONDUCT PROCUREMENT
Formal Advertising
Competitive Negotiation
SECTION II MANAGING THE RESOURCE RECOVERY SYSTEM
PROCUREMENT PROCESS
PRELIMINARY ACTIVITIES
BIDDER SOLICITATION
Prequalification Request
Qualification Evaluation
Preparation for Qualification Evaluation
Evaluation of Qualifications
The RFP
Bidders' Briefing
RFP Amendments
Proposal Due Date
PROPOSAL EVALUATION
Preparing for Proposal Evaluation
Evaluation Forms
Evaluation Staff
Evaluation Team Training
Evaluation Calendar
Administrative Details
Proposal Evaluation Phase
Log-in Procedure
Proposal Handling
Preliminary Screening
Detailed Evaluation
Rating Scheme
Site Visits
Evaluation Summary
2
4
4
5
5
5
6
7
9
11
11
11
12
12
16
16
17
17
17
17
17
18
18
25
25
25
25
26
26
27
27
28
28
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TABLE OF CONTENTS (Continued)
SECTION II (CONCLUDED)
Review Committee Analyses 30
In-house Presentation of Results 30
Notification of Bidders 30
Public Notice 31
Competitive Negotiation 31
Sponsor Preparation 31
Competitive Negotiation Procedure 32
Contractor Selection 32
Contract Negotiation 33
SECTION III PREPARING THE REQUEST FOR PROPOSALS FOR
RESOURCE RECOVERY SYSTEMS 34
CONTENTS OF THE RFP 34
INTRODUCTORY MATERIALS 36
General Program Description 35
Solicitation Purpose 37
Project Goals and Objectives 37
Summary of Specific Project Features 33
Program History and Sponsor's Legal
Authority 33
Proposal Schedule 39
System Description and Performance
Requirements 39
Technical Performance Requirements 39
Management Performance Specifications 45
Economics and Financing 43
Environmental and Aesthetic Specifications 50
Contractual Considerations 51
Proposal Requirements (Formal Instructions to
Bidders) 53
General Requirements 53
Detailed Proposal Requirements 54
Evaluation Process 62
Methodology/Approach 62
Evaluation Team 62
Evaluation Techniques 54
Evaluation Criteria 64
Appendices 66
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SECTION I: PROCUREMENT OF RESOURCE RECOVERY SYSTEMS - AN OVERVIEW
State and local governments have recently experienced difficul-
ties in acquiring from contractors the equipment, facilities, or
services needed to fully implement resource recovery systems. These
procurement difficulties have been created by a number of character-
istics, unique to resource recovery, which make the procurement pro-
cess more complex than that of traditional public works projects:
• Technological complexity -- many of the technologies
have not yet been proven in operational use.
• Political sensitivity -- the costly and highly visi-
ble solid waste management function involves intense
political and public participation.
• Financial self-sufficiency -- a resource recovery
project should be a business operation which finan-
cially stands on its own whether operated by govern-
ment or industry.
• Variety of contractors -- services may be obtained
from consulting engineers, turnkey or full-service
contractors, or construction contractors.
• Long-term contracts -- a resource recovery project
can involve contracts that can extend up to twenty
years for operation, disposal of residuals, and
sale of products.
0 Multiple system options -- various combinations of
technology, markets, ownership and operation, finan-
cing and risk sharing are available for consideration.
• Multi-jurisdictional -- for economical operation, many
of the resource recovery technologies must be designed
and constructed as large capacity facilities, requir-
ing refuse from a number of jurisdictions.
• Extraordinary procurement -- in some cases, procure-
ment of the system may not involve an actual "purchase"
at all, but rather selection and award of a "franchise"
for a full-service arrangement.
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The purpose of this guide is to provide assistance to state and
local government officials in the procurement of resource recovery
systems and services. It is important to note at the outset that
each procurement must be tailored to fit the particular application
and needs of the local sponsor, within legal and equitable bounds.
It is recognized that every state and local government must operate
with unique traditional and legal procurement procedures and, for
this reason, the information in this guide is advisory. Each govern-
ment must design its own best procurement approach.
Primary emphasis in this guide is on defining and explaining a
competitive negotiation approach to procurement. This approach offers
flexibility and is appropriately used to procure not only equioment
and facilities, but also a "system designer", whether a consulting
engineer or a design and construct contractor. Two topics are treated
in some detail: (a) managing the procurement process, i.e., proce-
dures for soliciting and evaluating proposals; and (b) preparing the
Request for Proposals (RFP).
OTHER IMPLEMENTATION ACTIVITIES
System procurement is only one of many activities necessary to
implement resource recovery (Figure 1). Preceding procurement
are the planning studies needed to provid an in-depth
understanding of the area's solid waste problem, and to choose from
among the many total systems options available. Experience to date
indicates that these planning studies can take a year or more to
complete. Details concerning the planning process are presented in
PJanning and Oyerview in this series of Implementation Guides.
System procurement can begin after necessary key decisions have
been made about the overall project concept. The first step is pre-
paring a Request for Proposals (RFP) or Invitation for Bid (IFB)
package. Procurement extends through design, construction, and
shakedown, and is completed only after the system is accepted as
operational. (Operational activities are not treated in this guide.)
The process of developing the RFP or IFB, soliciting and evaluating
proposals, and negotiating contracts can take at least one year;
detailed design and construction can require an additional two to
three years.
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DECIDING HOW TO PACKAGE THE PROCUREMENT
One reason that resource recovery procurement is substantially
more complex than most other public procurements is that it is not
always apparent which facilities and services should be procured to-
gether.
A resource recovery "system" can be defined as a single plant,
or a combination of elements of the overall solid waste management
system, such as transfer stations, transport activities, and residue
disposal sites. For some projects an important decision concerns
which of the many required services, facilities, or equipment should
be procured as a "package" from one contractor, and which should be
purchased separately. Other questions include:
• Should the central processing facility be procured
via a conventional formal advertising approach
using an Invitation for Bid (IFB) prepared by a
design firm?
• Should a turnkey or full-service arranqement be
procured for design and construction via a Request
for Proposals (RFP) and competitive negotiation?
The advantages of packaged procurements include the possibility of
obtaining a lower overall system cost and better system integration.
Key disadvantages include procurement complexity and relative loss of
control over component selections. The approaches for packaging the
procurement are discussed below.
Conventional Approach
The conventional approach for procuring public works projects
may involve two procurements: one for engineering services and one
for construction. A professional engineering consultant is hired to
participate in planning and to prepare system plans and specifications
which serve as a competitive bid package for construction. The same
consultant might also be retained to perform other services such as
construction supervision and plant startup.
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Turnkey Approach
An extension of the conventional approach is to assign one party
total responsibility for facility design, construction, and startup.
This approach involves a single procurement of services, and requires
that the contractor provide a guarantee of system performance by
demonstrating that the system can meet operational, rather than de-
sign, acceptance tests.
Full Service Approach
A further extension of procurement packaging is the inclusion of
private operation and possibly private ownership (although private
operation c_an indeed be contracted as a separate service under any
approach). Under a full service arrangement, a systems contractor
has full responsibility for financing, design, construction, opera-
tion, and possible ownership. In essence, the full service contrac-
tor offers the government sponsor a disposal service instead of a
facility.
DECIDING HOW TO CONDUCT PROCUREMENT
Laws and procedures governing state and local government procure-
ment of products and services vary widely among jurisdictions and
appear to be changing. The variety of procedures used seems to be
limited only by the ingenuity and courage of procurement officials
and their legal counsel. In general, formal procurement laws and
procedures are established to specify the conduct of procurements for
small purchases, engineering and other professional services, con-
struction, and equipment items.
The three standard methods normally used in procurement of these
products and services are (1) purchase order, for small purchases,
(2) formal advertising (including two-step formal advertising), for
construction projects and equipment, and (3) negotiated procurement
for engineering and other professional services. When more than one
Under some of the financing mechanisms and leasing arrangements being
used today for tax and depreciation reasons, actual ownership of the
facility is at times a moot point. The key issue is who ultimately
bears the various risks associated with the facility and its operations.
These risks are discussed in the Risks and Contracts Guide of this
series.
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professional service firm is being formally considered, negotiated
procurement may be termed competitive negotiation. Both formal ad-
vertising and competitive negotiation can be used in the procurement
of resource recovery systems and services. Because competitive nego-
tiation is a newer concept, this guide focuses on it, but both meth-
ods are defined below.
Formal Advertising
This is a standard procurement method used by state and local
governments to procure equipment, facilities and the construction of facil'
ities. Strictly speaking, the overall formal advertising method
involves competitive procurement of the engineering consultant who
would be responsible for system design and probably other tasks as
well. An Invitation for Bid (IFB), prepared by the consultant, is
used to solicit bids based upon specifications and attachments pre-
pared to permit full and free competition. All bids are opened pub-
licly at the time and place stated. Prompt award is made to the
responsible bidder whose bid, conforming to the IFB, will be most
advantageous to the government, price and other factors considered.
Formal advertising is an effective method of procurement when
the following conditions are present:
t Definitive specifications exist.
• Lowest bid is a major criterion.
• More than one bid is anticipated.
Formal advertising can be used in the procurement of resource
recovery systems and services. A simplified description of the pro-
cedure is as follows:
1. Qualifications of appropriate architect-engineering
(A&E) consultants are examined.
2. An architect-engineering (A&E) consultant is hired.
3. The consultant participates in planning, designs
the resource recovery system and prepares detailed
drawings and specifications.
4. Invitation for Bid (IFB) package is prepared.
5. Sealed bids are received.
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6. Bids are opened in public and reviewed for com-
pleteness and responsiveness.
7. Bidders are ranked by both: (a) technical merits
and (b) cost.
8. Award is made to the lowest and best bidder.
The formal advertising method is treated in most state and local pro-
curement laws, and virtually all state and local jurisdictions have
had considerable experience with it.
Competitive Negotiation
Traditionally, competitive negotiation has been reserved for
procurement of professional services, such as engineering or project
management, while construction and equipment have been procured by
formal advertising. But because of the aforementioned complexity of
resource recovery systems and services, state and local governments
have shown an interest in utilizing competitive negotiation for all
phases of resource recovery projects. One reason for this interest
is the consideration now being given to private operation and owner-
ship of resource recovery facilities. When this ownership option is
chosen, traditional rules and procedures requiring use of the formal
advertising procurement method frequently do not apply and thus can
be avoided since the government is not actually "purchasing" the
facility.
Competitive negotiation has two important characteristics; it
removes lowest bid as the primary criterion for selection, and it
allows the sponsor to discuss the proposals with bidders before a
selection is made. This two-way exchange of information between
bidder and sponsor provides an opportunity to fully consider the
important technical, financial, marketing, environmental, and manage-
ment interrelationships of a proposal.
The complete competitive negotiation procedure is somewhat com-
plex. It involves solicitation and evaluation of bidder qualifica-
tions, preparation of a Request for Proposals (RFP) package, evalua-
tion of proposals, and participation in a substantive discussion-
negotiation process to select one bidder with whom contract negotia-
tions will take place. It should be noted that the sponsor's RFP
should be as specific as possible, with respect to preferred tech-
nology, markets, management, financing, etc., to reduce misunderstandings
at the outset and to ensure comparability of proposals.
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Although time-consuming, the procedure can be very useful in
clarifying what otherwise may be an extremely complicated resource
recovery procurement. The procedure fosters close understanding
between bidder and sponsor before actual contract negotiations
begin enabling subsequent contract negotiations to be accomplished
more quickly and less expensively (some have taken almost a year to
complete).
It should be noted that it is indeed possible to treat the
discussion-negotiation efforts (before selection of a single "final-
ist") and contract negotiations as a single process. What this means
is that a single bidder might be chosen for contract negotiations
immediately after proposal evaluation, or that contract negotiations,
in effect, could be conducted competitively with two or more bidders.
The advantages of these variations must be considered in light of the
particular situation and the capabilities of the sponsor.
8
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SECTION II: MANAGING THE RESOURCE RECOVERY SYSTEM PROCUREMENT PROCESS
The management of resource recovery procurement involves a series
of activities beginning when the key system decisions have been made
and extending to the time when the system is fully operational. The
purpose of this section is to outline those activities.
The formal advertising procurement method has been well documen-
ted, so this section describes the steps involved in the competitive
negotiation method. This method can be used to procure a turnkey or
full service contractor, or, in a shortened version, the design ser-
vices of a consulting engineer. The actions required by the sponsor
in competitive negotiation procurement, as described below, include
the preliminary activities to prepare for solicitation of proposals,
proposal evaluations, contractor selection, and contract award (Fig-
ure 2).
In the case that the sponsor is using competitive negotiation to
procure a turnkey or full service contractor, it is imperative that
it have adequate technical, legal, financial, and managerial assist-
ance in the process. Usually, this entails engaging the services of
knowledgeable consultants, such as consulting engineers, management
consultants, and financial advisors.
PRELIMINARY ACTIVITIES
First, the sponsor must plan the specific steps of the procure-
ment process it intends to use. One major decision is whether or not
to conduct a prequalification stage, that is, an examination of bidder
credentials and selection of qualified bidders prior to issuance of
the RFP. This process, if permitted by state and local law, will save
unqualified bidders considerable money and effort in preparation of
proposals and will save the sponsor time and effort in proposal eval-
uations.
The sponsor must also prepare a set of evaluation criteria which
will be used to evaluate proposals. The criteria should reflect the
sponsor's goals in the system implementation; they should outline key
issues for consideration and emphasize the issues of most importance
to the sponsor. More discussion of evaluation criteria is provided
in Section III.
To select a contractor using the competitive negotiation approach,
the sponsor will solicit proposals by preparing and issuing a Request
for Proposals (RFP) "package". The RFP should be based upon the pre-
established evaluation criteria and sponsor goals for the resource
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Procurement Method Selection
T
PRELIMINARY
ACTIVITIES
Prequalification Decision
i
Announce Proposed Project
Issue Preliminary Request for Qualification (optional)
BIDDER
1 D1UULK
Receive and Evaluate Qualifications (optional) SOLICITATION
Issue RFP
Conduct Bidders' Briefing
Receive Proposals
PROPOSAL
EVALUATION
Evaluate Proposals
Negotiate with Bidders
NEGOTIATION/
SELECTION
Select Contractor
Negotiate with Contractor
i
CONTRACT
AWARD
Complete Contractual Agreements
Figure 2. Procurement Steps: A sponsor's procurement activities are
based upon previous planning (Figure 1) and range from the development
of a procurement strategy to the signing of contracts. Contractor
responsibilities may include design, construction, and/or operation.
10
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recovery system. Section III describes the process of preparing the
RFP and its contents. The rest of this section describes the other
steps involved in the competitive negotiation process.
BIDDER SOLICITATION
The bidder solicitation can be accomplished by using one of two
approaches. In one approach bidders are prequalified in order to
receive the RFP; in the other the RFP is released to all requesters.
(In some cases, such as the selection of a consulting engineer, the
final selection may be made immediately after the qualification stage.
Prequali fication Request
If prequalification is going to be used, the first solicitation
of bidders should occur at least one month prior to the issuance of
the RFP. Depending upon public bidding requirements, legal notices
may be published, press releases issued, and letters sent directly to
possible bidders to provide a brief system description (system size,
extent of resource recovery, ownership requirements, types of refuse,
etc.) and request letters of interest from bidders. Then a Request
for Qualifications (RFQ) is issued to the bidders, containing more
details of system performance, management and financing requirements,
and procurement schedule. It should also request the types of qual-
ification information listed below from each potential bidder.
• Resource recovery products, services, new business
ventures
• Existing production facilities and equipment
• Management and financial performance
• Personnel description
• Resource recovery-related experience
• Corporate brochures
Qua!i fi cati on Evaluati on
Evaluation of the qualifications of potential bidders is not an
inherently detailed process. The purpose is to encourage a number of
capable firms so as to ensure a proposal response representative of
the industry, and secondly to eliminate firms that are obviously in-
capable of fulfilling the requirements.
11
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Preparation for Qualification Evaluation
A form should be prepared containing questions which will enable
the evaluator to assess the data supplied in the qualification state-
ments. An example of a useful format is contained in Table 1. It
should be noted that the four major areas, i.e., technology, manage-
ment, marketing and finance are emphasized and can be evaluated inde-
pendently if so desired.
The Creation of a Rating Scheme
Since the evaluation of qualifications serves only to screen the
unqualified bidders from those qualified, it should be kept as simple
and straightforward as possible. A detailed rating scheme is not re-
quired; however, a numeric scheme may be utilized to assure that all
of the factors have been considered. A numerical measure will enable
evaluators to assign relative weights to the more important attributes,
as well as allow for ease in presentation of results.
Creation of an Evaluation Team
The size of the evaluation team will be influenced by the expect-
ed number of replies. However, the group should be representative of
the interested principals and should possess skills in the four impor-
tant areas: financing, technology, management and marketing. A
training meeting should be held prior to the evaluation effort to
ensure a uniform interpretation of evaluation criteria.
Other details which must not be overlooked are the physical loca-
tion of the team during their evaluation effort, the log-in and track-
ing procedure of the replies to the RFQ and an assignment plan for
handling the workload.
Evaluation of Qualifications
The actual evaluation begins with the receipt of the qualifica-
tions statements and includes the steps listed below.
Log-in
All the responses should be recorded and maintained in an access-
ible file for future reference.
12
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Table 1
Checklist for Evaluation of Responses
to Requests for Qualification
C R I I t R I A
Process Technology
a Does the applicant propose a proven process that is within the "state of the art"'
b Based on the number of locations indicated in the response, has the proposed process had
sufficient operating experience7
c Does the proposed process have adequate processing capacity in tons per day either
singularly or modularly7
d Has the contractor demonstrated other experience in the field of resource recovery or
municipal solid waste disposal'
OVERALL: Is the proposed process a viable process? (Consider answers to a-d)
Management
a Does the type of organization proposed give sufficient prominence to resource recovery7
b Has the firm a history of corporate success7 (See when established, profits)
c. Has the firm a background in resource recovery' (See length of time in resource recovery,
market history, and backlog)
d. Has the firm indicated future emphasis in solid waste? (See research)
e Does the corporate structure indicate a high enough level of control and responsibility7
f. Does the overall staff have skill and experience to successfully man and run a plant of the
size proposed'
OVERALL, Does the level of control, the corporate structure, and the highest level of
responsibility suggest a firm commitment on the part of the management of the firm?
{Consider answers to a-f)
Marketing
a. Is the corporate marketing arrangement adequate for marketing resource recovery products'
b. Does the firm have background in dealing with recovered products'
c. Has the firm researched potential markets for the marketing of resource recovery products7
d. Does the proposed marketing staff have adequate experience and responsibility'
OVERALL- Does the marketing data submitted indicate sufficient interest and planning by the
firm in the marketing area7 (Consider answers a-d)
Financial
a Can the firm successfully weather daily operating contingencies7 (See cash and working
capital )
b. What are the possibilities for raising additional funds if needed7 (See credit rating,
debt to equity ratio)
c Does the firm give indication of being capable of surviving future long term contingencies7
(See net worth, profits, long term debt)
d Is the firm capabJe of taking on additional projects? (See current backlog)
OVERALL: Does the overall financial picture indicate sufficient financial backing for this
project'
r
7 "l~f
///
COMMENTS
13
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Initial Scan
The purpose of the initial scan is to provide overall familiarity
with the candidates and to divide them into two groups. The first
group consists of all contractors whose capabilities are not subject
to question. The remaining candidates comprise the second group.
Detailed Study
The candidates in the second group should be given a more careful
analysis than those in the first. The financial specialists should
examine each qualifications statement, paying particular attention to
the net worth, debt to equity ratio and the value of other resource
recovery work commitments. The remaining members of the team should
review the technical, marketing and management areas. However, it is
desirable that each person review every qualifications statement. A
team of three to four members should be capable of reviewing 30 to 40
replies in two to three days.
Final Summary
In this step the results of the previous reviews are arranged
into three groups. The first consists of those respondents who qual-
ify without question. The second group includes those firms that are
acceptable, with noted deficiencies. For exanple, a firm or consor-
tium may have an unclear corporate or management structure or a high
debt to equity ratio which may indicate the need for additional fi-
nancial backing. The final or third group includes those firms who
appear unacceptable and consequently should be discouraged from sub-
mitting a proposal.
For summary purposes a rudimentary point system can be employed
based on the format demonstrated in Table 1. The technical rating
of one point may be given to firms possessing a low level of techni-
cal expertise and little operational experience. A two point rating
may be assigned to firms which demonstrate technical expertise but
have not yet been committed to a full scale facility. The highest
rating, three points, may be awarded for demonstrated technical exper-
tise and a conmitment to a full scale facility. Similar ratings can
be used for the other three areas. These ratings can be summarized
in a format such as the one shown in Table 2.
Since this is an evaluation of the companies' qualifications to
implement a complicated and capital intensive facility, the final
decision should be weighed more heavily toward the technical and fi-
nancial areas, with consideration given to the comments in the remarks
column. Typical remarks might include: high debt to equity ratio,
14
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a local firm, lack of data, etc. The comments for possibly rejected
qualifications will require some understanding and detail to support
that judgment.
Notification of Respondents
All firms responding to the RFQ must be notified of the results
of the evaluation. The firms rated highest can be notified by mail.
Included with the letter of acceptance should be a copy of the RFP
and a list of qualified bidders. Those firms which possess some defi-
ciency can simultaneously be mailed the same RFP package, with the
sponsor's recommendation of the corrective action to be included in
their proposals. Finally, the firms which are to be discouraged or
prevented from bidding should be informed of the reasons for their
poor rating. Such reasons may include insufficient resource recovery
experience, insufficient financial backing, limited management, mar-
keting, or technical capabilities. In the event that the evaluation
team does not want to preclude anyone from bidding, it may allow an
insistent bidder to submit a proposal anyway.
The RFP
The RFP package should include a notice of the total number and names
of bidders to whom it was issued, a review of the procurement schedule
and the name and phone number of the sponsor. Section III provides
a detailed outline of the RFP contents. The information and bidder
requirements which are presented in the RFP should be as specific and
detailed as possible.
Bidders' Briefing
A meeting with all bidders should be held to review the RFP,
clarify any misunderstandings of the RFP contents, and survey bidder
sentiment concerning the RFP or procurement schedule. The meeting
should be scheduled two weeks to a month following the issuance of
the RFP to allow bidders time to become familiar with the RFP contents
before the briefing and to allow sufficient time between the briefing
and the proposal due date to permit bidders to incorporate any changes
or clarifications into the proposals.
A briefing of the RFP contents or a discussion of major issues
may be presented. The most important item during the bidders' brief-
ing, however, will be the response to the bidders' questions. Ques-
tions may be asked orally or may be submitted to the sponsor in writ-
ing prior to the meeting. (The desired approach should be specified
in the RFP.) It is important that an accurate written record of the
16
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conference, preferably a stenographic transcript, be provided to the
bidders following the conference to ensure fairness and equity to
all bidders. This record, in addition to response to written ques-
tions and any changes in the procurement schedule, should be sent to
the bidders as soon as possible.
RFP Amendments
If as a result of the bidders' briefing or generation of new
information, any changes in the RFP are desired by the sponsor, they
should be made and bidders officially notified as quickly as possible.
It is important that each bidder receive the amendments. Follow-up
calls or letters from the sponsor to the proposal manager for each
firm may be necessary to ensure that information has not been lost
and that no bidders have been overlooked.
Proposal Due Date
The bidders should be given 90 days or longer after the issuance
of the RFP to prepare proposals. If extensive changes are made in
the RFP at the time of the bidders' briefing, the deadline may have
to be extended to allow bidders time to prepare responsive proposals.
The sponsor should be receptive to bidder sentiment about the reason-
ableness of the time schedule.
PROPOSAL EVALUATION
The evaluation of proposals is a considerably more detailed and
time consuming procedure than the evaluation of qualifications. The
purpose is to select the most qualified firm and process not solely
on the basis of low cost, but based unon a number of major criteria
including technical system design and operation, marketing consider-
ations, system management, financial considerations, environmental
impact and aesthetics, and pricing and economics. Careful prepara-
tion and evaluation are therefore necessary, as described below.
Preparing for Proposal Evaluation
The preparation for proposal evaluation should begin well before
the receipt of proposals. Preparation steps include the following
items.
Evaluation Forms
It is extremely important to develop comprehensive evaluation
forms based upon the detailed evaluation criteria defined during the
17
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RFP preparation. Examples of evaluation forms are shown in Tables 3
through 8. The forms should be designed to force the evaluators to
consider every important detail in the proposal and to accurately
summarize the proposal's merits and weaknesses.
Evaluation Staff
The evaluation committee should consist of specialists in engi-
neering, finance and economics, marketing and environmental control,
as well as people familiar with the political and operational environ-
ment in which the facility will be implemented. The sponsor's tech-
nical advisors should be involved and legal counsel should be avail-
able. Every effort should be made to include representatives of the
various government agencies who are involved with the project, such
as members from the Departments of Public Works or Sanitation, En-
vironmental Affairs, Public Health, Administration and Finance and
other involved state, county, regional or local agencies. The spe-
cific number of evaluators depends upon the number and detail of pro-
posals expected and the number of specialists who can devote the time
required by the evaluation effort. The evaluation must be a full
time assignment for the key evaluators.
It is recommended that the evaluation staff be subdivided into
teams to focus upon each of the major evaluation criteria. To cor-
respond with the evaluation criteria outlined in Table 13, three
teams could be formed to focus upon Financing and Economics; Environ-
mental Impact; and Marketing, Management and Technical Design. Eval-
uators and government representatives should be assigned according to
their expertise. For example, representatives from a Comptroller's
Department should be on a financial team, representatives from a
Department of Public Health on a technical or environmental team as
appropriate.
Evaluation Team Training
Approximately one week prior to the beginning of the evaluation
effort a team training and orientation meeting should be held. The
calendar or scheduling of the evaluation effort should be explained
at this meeting. Among the more important aspects to be discussed
are the standards for acceptable responses in each of the areas being
investigated. It is essential that each evaluator understand the
standards so proposals are treated equally. All evaluators must be
kept aware of revisions in standards so that all proposals will be
evaluated by the same standards.
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Table 3
Technical System Design & Operation Evaluation
(Sample Form)
I. Develop a brief discussion of the system design and operating philosophy with special attention paid to the following
major subjects
* Design Technology
• Energy Balance
* Reliability
• Alternative Site
( Emergency Procedures
• Start-up Procedures
II. Develop an evaluation of the system design and operation based on the specific items shown in the sample table below
CRITERIA
Design
Process "State of Art"
Capability (TPD)
Completeness
Efficiency of Equipment
Storage Capacity
Technology Back-up
Peripheral Equipment
Volume Reduction
Traffic Handl ing
Energy Balance
Ratio of Energy Used/Energy Produced
Output Materials
Residue Quality
RATING
CRITERIA
Reliability
Operating Time (days/year)
Scheduled Downtime
Unscheduled Downtime
Maintenance Schedule
Downtime Related to Storage Capacity
Necessary Redundancy
Emergency Procedures
Safety Precautions
Overflow of Storage Capacity
Discussion and Suggested Solution of
Major Equipment Difficulties
Discussion and Suggested Solution of
Other Problem Areas
RATING
CRITERIA
AHj;r™ tm?. Jj_te_
Local Assignment
Access
Size
RATING
A = acceptable, S = some problems U - unacceptable
III. Prepare a summary discussion of major technical weaknesses.
IV. Prepare a summary discussion of major technical strengths.
V. List all sources of information in addition to the proposal (e.g., phone calls, visits, etc.
19
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Table 4
Marketing Evaluation
(Sample Form)
I. Develop a brief discussion of the marketing, strategy, highlighting the following:
• Description of Markets
* Market Experience
* Product Commitments
II. Develop an evaluation of the marketing based on the specific items shown in the sample table below.
CRITERIA
Market Description
Quantities (total est.)
Location of Markets
Long Term Plans
RATING
CRITERIA
Marketing Experience
Evidence of successful efforts
Staff qualifications
Organization Qualification
RATING
CRITERIA
Product Commitments
Evidence of Commitments
Quantity
Length of Time
Price Range
RATING
A = acceptable, S = some problems, U = unacceptable
III. Prepare summary discussion of major marketing weaknesses.
IV. Prepare summary discussion of major marketing strengths.
V. List all sources of information in addition to the proposal (e.g., phone calls, visits, etc.
20
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Table 5
Financial Evaluation
(Sample Form)
I. Develop a brief discussion of the proposed financing including:
« Share of investment
« Method of private equity financing
» Method of providing non-private equity financing
• Anticipated interest rates
( Corporate financial capabilities
II. Develop an evaluation of the financing based on the specific items shown in the sample table below.
CRITERIA
Contractor share of investment
Methods of providing private equity financing
Methods of providing non-private equity financing
Anticipated interest rate
Corporate capabilities
Net worth vs. resource recovery backlog
Ability to raise capital
Ability to meet normal financial contingencies
RATING
A = acceptable, S = some problems, U = unacceptable
III. Prepare a summary discussion of the major financial weaknesses.
IV. Prepare a summary discussion of the major financial strengths.
V. List all sources of information in addition to the proposal (e.g., phone calls, visits, etc.).
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Table 6
Pricing/Economics Evaluation
(Sample Form)
I. Develop an evaluation of the general pricing and economic factors based on the specific items shown in
the sample table following:
CRITERIA
Cost Data
Completeness
Accuracy
Support Data
Assumptions
Escalation clause
A = acceptable, S = some problems, U = unacceptable
RATING
II. Compare the various alternatives based on the items shown in the sample table below.
CRITERIA
Investment Cost
Total $/ton thruput
Annual cost/ton thruput
OSM Cost
$/ton
% labor cost
Total annual cost/ton
Ratio of investment/O&M cost
Estimated product revenue/ton
% product commitment
Annual net cost/ton
Disposal fee/ton*
Return on contractor's investment (20 yrs)
Profit sharing*
Escalation*
x tors/day
y tons/day
2 tons/day
*
These items may be subject to negotiation in which case the figures here are
just a starting point for negotiation and should not be considered when com-
paring alternative proposals.
III. Prepare a summary discussion of the major pricing/economic weaknesses.
IV. Prepare a summary discussion of the major pricing/economic strengths.
V. List all sources of information in addition to the proposal (e.g., phone calls, visits, etc.
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Table 7
Management Evaluation
(Sample Form)
I. Develop a brief discussion of the management philosophy emphasizing:
• Management concepts
• Design and engineering personnel
« Operating personnel
* Master plan
* Policies
• Schedules
II. Develop an evaluation of the management based on the specific items shown in the sample table below.
CRITERIA
Management Concepts
Corporate Structure
Level of Control
Participants
Role Definition
Contractual Services
Design & Engineering Personnel
Identification of Key Personnel
Qualifications
Experience
Responsibilities
RATING
CRITERIA
Operating Personnel
Identification of Key Personnel
Qualifications
Experience
Responsibil ities
Subcontractor Identification
Description of Master Plan
Completeness
Clarity
Reasonableness
Schedules
RATING
CRITERIA
Policies
Maintenance Philosophy
Visitor Accommodations etc.
Safety Policies
Entire Project
Milestone Identification
Shakedown 8 Start-up
Budget Controls
Progress Controls
RATING
A = acceptable, S = some problems, U = unacceptable
III. Prepare a summary discussion of the major management weaknesses.
IV. Prepare a summary discussion of the major management strengths.
V. List all sources of information in addition to the proposal (e.g., phone calls, visits, etc.).
23
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Table 8
Environmental Impact & Aesthetics Evaluation
(Sample Form)
I. Develop a brief discussion of the proposed environmental impact, with particular attention to the following areas:
t Architecture design and aesthetics
t Construction
• Operation
II.
Develop an evaluation of the environmental impact & aesthetics on the basis of the specific items shown in the
sample table below.
CRITERIA
Architecture,Site Design & Aesthetics
Professional capabilities
Architectural rendering
Aesthetics
Alternative Plans
Methods
Estimated utility requirements
Energy Conservation
Traffic
Atmospheric emission
CO
SO?
NOX
* Control during construction
Air
Noise
Water effluents
• Solid waste disposal
• Additional data
RATING
CRITERIA
Process Design & Plant Operation
* Estimated utility requirements
• Reduction of energy consumption
* Atmospheric emission
CO
S02
NOX
Special atmospheric emissions control
Alternative emission controls
Noise level investigation
Noise level controls
Alternative Noise level control
Treatment of water effluents
Water effluents control
Alternative water effluents control
Product evaluation
Impact of noise, dust on employees
Provisions for employee protection
Additional supporting data
RATING
A = acceptable, S = some problems, U = unacceptable
III. Prepare a summary discussion of the major environmental and aesthetic weaknesses.
IV. Prepare a summary discussion of the major environmental and aesthetic strengths.
V. List all sources of information in addition to the proposal (e.g., phone calls, visits, etc.).
24
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Evaluation Calendar
The calendar should be established to allow sufficient time to
perform a detailed analysis of each proposal, to ask and receive an-
swers to questions which may arise and finally, to visit the respon-
dents' facilities and existing sites of similar facilities to verify
data as the necessity arises. A sample calendar is presented below:
SAMPLE CALENDAR
<-. Allotted Time Working Days From
p (days) Receipt of Proposals
1. Log-in 0-1 1
2. Preliminary Screening 3-5 4-6
3. Detailed Evaluation 15-30 19-36
4. Visits 5 24-41
5. Evaluation Summary 3-5 27-46
6. Analysis by Review Committee 2-3 29-49
7. Selection of Finalists 1-2 30-51
Administrative Details
Since proposal evaluation may take as long as two months, it is
important that arrangements be completed in advance for such adminis-
trative details as: office space, stationery, secretarial help, tel-
ephones, and a workable filing and distribution system for the pro-
posals. An equally important measure is the assignment of teams and
team workload, according to the total number of proposals received.
Proposal Evaluation Phase
A great amount of detailed information is required for assuring
procurement of the best resource recovery plant possible. Because of
the large financial commitment required for the facility and also the
cost to the contractor of preparing the proposal, the sponsor is ob-
ligated to conduct a conscientious and thorough evaluation. The ac-
tual evaluation begins with the receipt of the proposals and includes
the items addressed below.
Log-in Procedure
A filing procedure should be established to record the replies
and the date they are received. (In a competitive negotiation pro-
curement, no purpose is served by a public opening of proposals and
price comparison. The proposals will be evaluated for more than just
25
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price; furthermore, the prices stated in the proposals may be subject
to change in the evaluation and negotiation processes that follow.)
Proposal Handling
Proposals must be handled in such a way that bidders are treated
equitably and all proposals are accounted for at all times.' This re-
quires that they are safeguarded and that one individual has the prime
responsibility for their whereabouts once they are officially received.
In cases where proprietary information is proposed, extra precautions
must be taken to assure that information will not be compromised.
When not in use, proposals should be stored in a secure location, pref-
erably in a locked container.
As a matter of policy, the sponsor may indicate in the RFP that
any proposals or parts of proposals received after the deadline are
deemed unresponsive and will be disqualified from evaluation, or the
sponsor may make provisions that under special circumstances late
proposals will be taken under advisement on an individual basis for
just cause such as inclement weather, extraordinary market commit-
ments, or last minute changes in the RFP initiated by the sponsor.
Each sponsor must decide for itself the policy it wishes to use and
must strictly adhere to it.
The sponsor should establish a policy regarding missing informa-
tion. Proposals with missing information may be viewed as being un-
responsive or the bidder may be allowed to supply the additional in-
formation by a prescribed deadline.
With the proposals, the sponsor may receive bid deposits. These
are to be considered as part of the proposals and, as such, are sub-
ject to the same provisions regarding safeguards and lateness. The
deposits, which are normally in the form of a certified cashiers'
check or draft, should be fully accounted for at all times by the
sponsor.
Preliminary Screening
The initial effort by the evaluators should be an overall read-
ing of each proposal. The purpose of this review is to ensure that
the proposals are complete and responsive to the RFP. It also per-
mits the staff to develop a familiarity with the replies. Any pro-
posal judged as non-responsive at this stage should be referred to
the key members of the evaluation team for a final decision. This
stage will require 3-5 days.
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Detailed Evaluation
Evaluation teams should then meet to begin detailed proposal
review and evaluation. Because proposals should be submitted in
separate or easily separable volumes, the volumes can be distributed
to appropriate teams; however, each member should review all parts
of all proposals. The detailed review should consume three to six
weeks, depending upon the number and complexity of proposals. In-
cluded in this interval is ample time to hear bidder presentations
or make inquiries of bidders as needed.
During this time the teams will complete the evaluation forms
(e.g., Tables 3 through 8).
Rating Scheme
A rating scheme can be an important aid in the evaluation pro-
cess. It is not, however, proposed to be a single measure for ac-
ceptance or rejection, but rather serves three other important pur-
poses: to discipline evaluators to examine each criterion; to pro-
vide a mechanism for quantifying differences among proposals; and to
provide a communication medium for evaluators. Like the evaluation
forms, a rating scheme should be developed prior to receipt of pro-
posals.
To be effective, the scheme should incorporate, as a minimum,
the following characteristics:
t Simplicity; that is, it should be easy to apply,
explain and understand
• Completeness; it should be applied to all important
i terns
• Fairness and objectivity; it should result in rat-
ings that will reflect the true requirements asso-
ciated with the procurement
One suggested numerical rating scheme is the following:
• For every proposal, evaluation team members assign
points (e.g., on a range from 0 to 10) for each
subjective criterion, that is for each criterion
which does not already have a numeric value.
27
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• Each team then discusses and agrees upon one point
assignment for each iten in each proposal. Points
can be summed for the major evaluation categories.
t If desired, weights can he assigned to the various
evaluation criteria, accordinq to the priorities
of the project. (Table 9)
• Points are assembled from all of the teams onto a
master chart (Table 9). Point ratings are multi-
plied by weighting factors to obtain a new weighted
score for each category. These scores are then sum-
med to give a "bottom line" evaluation score to each
proposal.
Total point scores should be used with care. Critical factors
and differences must be considered even if they do not lend themselves
to quantification and numeric ranking. Also, additive rankings may be
misleading, in that a bidder's failure in a single area can totally
undermine a proposal's chance of success. It is important to realize,
therefore, that a numerical system should be used as an aid, not as a
replacement for the complex evaluation decisions which must be made.
If the bottom line scores must be released publicly, they must be
accompanied by prices and statements about proposal strengths and
weaknesses.
Site Visits
The evaluators may visit some of the contractors to acquire addi-
tional data and to meet some of the personnel assigned to the project.
Visits to sites may also be made for the purpose of reviewing and
verifying the technical characteristics of the project. Approximately
one week should be allowed for all visits.
Evaluation Summary
A large matrix can be used to display the results of the apprais-
als in each area along with the rating as shown above, and pertinent
comments pertaining to each proposal (Table 9). Comments provided for
technical system design, for example, might relate to specific ques-
tions of process reliability or feasibility. This matrix could be
used as a means for presenting the reasons for selection of certain
finalists for negotiation.
28
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If the evaluators feel that sufficient information has been nre-
sented to justify selection of finalists for negotiation, the matrix
should be presented to the review committee for approval. The eval-
uators should be very careful when completing the forms to include
sufficient reasons for all decisions for use in subsequent debrief-
ings and indication of questions which may be left open until the
further negotiations.
Review Committee Analyses
After the teams have completed their evaluations, the results
should be analyzed by a committee composed of the project leader and
a representative of the various departments concerned with the pro-
ject, i.e., the Departments of Public Health and Public Works. Their
function should be to look for things that might have been overlooked
by the staff. However, in most cases, the members of the review com-
mittee will have been involved in the evaluation, and so this review
will serve as a final check before any announcement is made; two to
three days should suffice.
In-house Presentation of Results
This step in the evaluation process ensures that all personnel
associated with the evaluation are conversant with the results. It
is also a final opportunity for objections to be raised. This pre-
sentation should be approximately two days in duration.
Notification of Bidders
At this point the sponsor must notify all bidders of the selec-
tion of finalists for negotiation. Finalists should be informed of
the schedule and procedures for further discussions. Those bidders
who are disqualified from further consideration should be told speci-
fically why they were disqualified. Of course, to justify disqual-
ification, the sponsor must indicate those objective evaluation cri-
teria in which a disqualified bidder scored low. The sponsor should
also allow time for discussing proposals with disqualified bidders.
The sponsor has an obligation to notify bidders of the disposi-
tion of their proposals prior to public announcements. This need
not be fully adhered to in those areas where evaluation procedures
are subject to public review. It is important, though, for the spon-
sor to form a policy regarding the extent to which proposal evaluation
and proposal contents will become public knowledge.
30
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Public Notice
To acquire and maintain public support of the resource recovery
project, reports or press releases should be issued to the public at
this point and throughout the selection process to keep them informed
of major milestones.
Competitive Negotiation
The competitive negotiation step consists of two-way discussions
with bidders to question, explore, and bargain in vital areas of pro-
posals, in order to gather sufficient information to be able to select
one final contractor.
There is no formal procedure for competitive negotiation. It
occurs as an extension of proposal evaluations and leads into final
contract negotiations, but there is no prescribed time period or order
of events. Negotiations may be carried on with all finalists equally,
or if one finalist appears most qualified, negotiations can be con-
ducted solely with him until such time as he is selected or the spon-
sor decides that it is necessary to negotiate with the other finalists.
Other parties such as potential markets may be brought in for discus-
sions. The sponsor has to determine the negotiation approach and
schedule to be used according to the project needs and complexities,
and the qualifications of the bidders. The basic steps of the nego-
tiation process are discussed below.
Sponsor Preparation
Beforehand, the sponsor should determine the tasks it wishes to
accomplish in the negotiation. In most cases, the major objective
will be to examine specific details, such as market commitments, fi-
nancing, changes in original assumptions or design modifications
which need to be addressed further. To do this, the sponsor must
prepare the specific questions it wishes to ask of bidders in order
to gather sufficient information to select a final contractor.
The sponsor should also establish the negotiation objectives
which will lead to the best arrangement for the sponsor (or other
public contracting party, in the event that the sponsor is obtaining
the system for a community or region). It may, for example, wish to
introduce contractual considerations even before the final selection
in order to determine the attitudes of the competitors towards the
arrangement desired by the sponsor. However, the sponsor must also
remain flexible to clarification or changes which may be necessary
31
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to fit the system chosen, or which offer greater benefit to the spon-
sor. The sponsor must also choose representatives for the negotiations,
In general, the negotiating team must have expertise in financial,
technical, and management issues and timely assistance from personnel
in relevant government agencies. The sponsor may also desire to in-
clude outside professional (e.g., legal or technical) advisors. The
representatives must be familiar with the aspects of future contractual
agreements desired by the sponsor, and with specific tactics and ques-
tions which need to be discussed with bidders.
Competitive Negotiation Procedure
Negotiation sessions can be informal; in fact, specific issues
can be discussed by individual mail correspondence, phone conversa-
tions, site visits or meetings. Sessions should be held privately
with each firm, but may be held concurrently with several firms. In-
formation or proposal changes which are generated during the sessions
are generally not shared with other bidders.
The discussions are conducted to establish that the sponsor and
contractor(s) fully understand what their responsibilities will be
and to make the proposals more firm in any way possible. Areas usu-
ally in need of improvement are the development of markets for materi-
als and energy, establishment of security for financing the project
and sharing of risks. Other areas might be costs and profit, perform-
ance requirements, and methods of payment.
There is no prescribed negotiation strategy which can be follow-
ed for every procurement or for every firm. However, to prepare for
negotiation sessions, the sponsor should strive as quickly as possible
to determine any areas of disagreement and their relative importance.
Using normal negotiation and bargaining techniques, the sponsor should
then strive toward a level of understanding which is adequate for en-
tering contract negotiations with a final contractor. It is essential
that both the sponsor and the bidder understand what their negotiation
limits are before contract negotiations begin.
Contractor Selection
During the process of competitive negotiation, the sponsor will
select a final contractor, based upon the evaluation criteria, any
changes or clarifications of proposals, and positions and detailed
information learned during the sessions. The winner should be noti-
fied by official documentation. The sponsor should inform unsuccess-
ful bidders verbally or by mail of the selection, the criteria which
32
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were used in proposal evaluation, and specifically how their proposals
failed to meet the criteria. The reasons must be well thought out and
accurate in order to avoid bidder contest of the decision.
A public announcement of the selection should also be made.
Contract Negotiation
Final contract negotiations can begin once a single bidder has
been chosen. It may be advantageous to set a schedule and deadline
for contract negotiations in order to provide pressure to the con-
tractor. Other procedures and strategies should be similar to nor-
mal contract negotiation techniques.
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SECTION III: PREPARING THE REQUEST FOR PROPOSALS
FOR RESOURCE RECOVERY SYSTEMS
The Request for Proposals (RFP) is the most important procure-
ment document for communicating the requirements of the sponsor to
the potential bidder. The document must be carefully prepared, con-
cise and complete, because the bidders' decisions whether or not to
respond and the quality of their responses will be highly influenced
by the RFP.
In preparing the RFP the sponsor should first define for himself
the overall program concept he desires to express. (The results of
the planning efforts should have enabled him to do this.) He should
then make sure that all appropriate items are considered and included
in the RFP.
There is no such thing as a standard RFP; each RFP must be tai-
lored to fit the needs of a specific project. This section provides
general discussion and examples of each required information category,
and available options for presenting the information. A checklist of
the RFP information categories is provided (Table 10). The sponsor
should read the description and the options provided in each section
below and ask himself what characteristics of his system should be
described. He can then adapt and expand the example given to fit the
special needs of the project.
The examples provided here are not intended to stand alone as a
completed RFP; they are merely illustrative of the type of language
and the type of considerations which must be presented in each RFP
section. In some cases only partial examples are provided because
the level of detail required would make complete examples overly long.
An actual RFP will be much more specific than the examples given here
with respect to technology, markets, site, waste characteristics,
financing and management. The sponsor will have to decide what to
include in a specific RFP. This guide and examples are designed to
aid it in making those decisions.
CONTENTS OF THE RFP
The overall organization of the RFP as described here consists
of the following major divisions:
Introductory Materials - This section includes a table
of contents and glossary of terms.
34
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Table 10
RFP CHECKLIST
CATEGORIES
CATEGORIES
GLOSSARY
TABLE OF CONTENTS
GENERAL PROGRAM DESCRIPTION
Purpos2 (subject) of solicitation
Project goals/objectives
Specific features of project/system
History/background of project
Issuing sponsor
Authority of sponsor
Proposal schedule
Bid briefing
Proposal due date (address and sponsor contact)
Estimated selection/negotiation dates
SYSTEM DESCRIPTION AND PERFORMANCE REQUIREMENTS
Technical performance requirements
Process restraints, preferences, requirements
Detailed specs (A&E approach)
Performance specs
Process input/output description
Solid wastes inputs
Quantity (municipal, commercial, industrial, etc.)
Composition
Solid wastes deliveries
Number and type of truck
Schedule
Solid wastes excluded
Quantity/quality of residual required
Fuel and material product specs
Type of transfer/transport required
Arrangements required for residue sale/disposal
Size of facility (capacity)
Process redundancy/reliability requirements
Receiving, storage and product/residue handling
Back-up landfill
Disposal methodology
Future expansion/addition to facility
Other provisions (e.g., visitors, signs, fences, etc.)
Management performance specifications
Schedule (design & construction,test, operation)
Management methodology and controls
Contractor responsibilities
Control techniques
Reporting channels
Program interactions
Participant responsibilities
Auditing procedures
Approval process (procedures, responsibilities)
Labor & hiring specs (equal opportunity employer, etc.)
Marketing responsibi1ities/arrangements
Personnel qualifications
Economics and Financing
Sources of financing anticipated
Legal stipulations
Fees and payments
Escalator factors
Revenue sharing
Environmental and aesthetic specifications
Contractual considerations
Ownership (land, facility, refuse, landfill, products)
Lease arrangements
Process guarantees
Insurance
Patent rights
Royalties
Payments and schedules
Risk sharing
Tonnage guarantees
Negotiable terms and conditions
Re-opener clauses
PROPOSAL REQUIREMENTS
General
Proposal bid bond or deposit (refundaoility, etc.)
Submission deadlines
Number of copies, page limits
Issuer's financial and legal liability
Amount of time proposal and bond are good
Handling proprietary information
Executive summary
Detailed proposal requirements
Technical design proposal (reports, drawings, etc.)
Management proposal (pert charts, flow diagrams, etc.)
Bidder qualifications
Marketing proposal (letters of intent, etc.)
Financial proposal
Cost assumptions (financing charge, rental fees, etc.)
Environmental impact and aesthetics
EVALUATION PROCESS
Methodology/approach
Evaluation team - arrangements/participants
Technique/format
Evaluation criteria
APPENDICES
Related reports
Site information (soils, borings, access, etc.
Permit regulations/requirements
State, local, federal, legal requirements
Environmental
Zoning
Building
Sample contract or lease
Letters of intent
35
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• General Program Description - This section provides an
overview of the resource recovery program.
• System Description and Performance Requirements - This
section describes the sponsor's plans for the system
and defines the responsibilities required of the se-
lected contractor.
• Proposal Requirements - This section describes the re-
quired format and contents of the bidders' proposals.
• Evaluation Process - This section describes the cri-
teria and process for evaluation of proposals.
This format is provided as an example of a method for supplying
organized and complete information to the bidders. Variations on
this format may be utilized where special issues dictate.
INTRODUCTORY MATERIALS
Both a table of contents and a glossary should be included in
the initial section of the RFP. A full table of contents is critical
to permit readers easy access to specific RFP sections. Likewise, it
is important to include a glossary of terms used in the RFP in order
to prevent misunderstandings. Terms (such as processing, facility,
residue, contractor and user fee) should be clearly defined according
to the intent of their usage. The glossary should be placed at the
beginning of the RFP to provide the bidders early familiarity with
the terms and to permit easy reference during the bidders' reading of
the RFP.
Examp le:
Facility - The building and machinery to be constructed to
recover resources from solid waste as a result of this solicitation.
General Program Description
This section gives an overview of the resource recovery program
and provides information about the specific project and the personnel
who have been involved in its planning and implementation. It also
defines the purpose of the solicitation. The more important subjects
to be addressed are discussed below.
36
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Solicitation Purpose
The prospective bidder will want to know on what elements of the
overall solid waste resource recovery system he is bidding. These
elements could include:
• design only
• project management
• design and construction
• design, construction and operation
t design, construction, operation and ownership
• supply or operation of transfer stations, vehicles, etc.
This section may take the form of a work statement to indicate to the
bidder the elements for which he, as contractor, will be responsible.
Example:
The procurement sponsor shall select a contractor to perform the
following services:
0 To design the solid waste resource recovery facility
in accordance with the sponsor's conceptual design,
and supervise the construction activities on behalf
of the sponsor under a fixed price agreement. The
sponsor will issue separate contracts for construc-
tion.
9 To provide supplemental management services and
personnel during plant start-up, on a cost plus
fixed-fee agreement.
9 To provide operating, maintenance and marketing
management services for a 5-year period on a fixed
tonnage basis, subject to annual renegotiations.
Project Goals and Objectives
This section should outline key characteristics of the planned
resource recovery system. For instance, low capital cost, low opera-
ting cost, high technical reliability, highly marketable products,
37
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high percentage of recovery, strong financial position or any combina-
tion of the above may be critical to the sponsor's decision in choos-
ing a system. The bidder should be informed of the sponsor's stand-
ards, although these standards or preferences do not have to be ex-
pressed in weighted values. If the sponsor expects the contractor to
accommodate source separation programs, this intention should also be
stated.
Summary of Specific Project Features
Although detailed specifications of the system will be provided
later in the RFP, a summary of the features of the project as it is
envisioned in the planning stage will be helpful to the bidders'
initial understanding.
Potential items to be included in the summary description are:
• Numbers and types of major facilities to be constructed
(processing facility(s), transfer stations)
• Method of financing
• Responsibilities for collection, transfer, transport,
processing, marketing and disposal of refuse
• Ownership
• Term and type of contract
• Method of ultimate disposal
Program History and Sponsor's Legal Authority
This section should describe the history and current status of
resource recovery planning in the area, especially an identification
of the procurement sponsor and its authority to carry out the plan.
This information will indicate to prospective bidders the amount of
effort already expended on resource recovery planning, the serious-
ness of the sponsor and the legalities involved in the selection of a
contractor. Relevant legal authorities of the sponsor which should
be described include such issues as its control over the waste stream,
ability to engage in negotiated contractor selection, authority to
enter long term contracts, financing authority, and ability to enter
minimum guarantee contracts.
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Proposal Schedule
The introductory section may also include a summary of the pro-
posal schedule. Specifically, the date and location for bidders'
briefing, proposal due date, address, sponsor contact, and estimated
selection or negotiation dates should be provided.
System Description and Performance Requirements
The purpose of this section is to provide the specifications for
the system and other information which may be useful to the bidder in
preparing a proposal. The section may be organized in any order de-
sired by the sponsor but should include the subjects described below.
Technical Performance Requirements
The technical performance requirements should address the process
requirements, refuse inputs, processing plant outputs, facility capac-
ity, and process reliability. The degree of technical specification
depends upon the amount of detail which is known to the sponsor at the
time of RFP preparation. Process or product choices, the waste stream
composition and quantity, and the degree of process reliability de-
sired should be defined as fully as possible, so the bidder knows the
design parameters within which he is to propose.
Process Requirements
The purpose of this section is to describe the sponsor's choice
of technology and the products to be produced. The process require-
ments can range from being highly specific about the technology and
products desired to requesting the bidder to propose the process and
products. If the sponsor has studied and selected a desired tech-
nology-market configuration or if it has obtained strong market com-
mitments, it may be able to specify the technology and product types.
An advantage of selecting the process and product prior to the RFP
preparation is that the evaluation of proposals will be easier if all
bidders propose similar equipment and products. On the other hand,
the sponsor may desire to keep the selection of technology and process
open so as to encourage participation by a number of bidders and pro-
cesses.
Three levels of specification and their'respective process re-
quirements are provided here:
Specified Process and Product. If the product and process types
are preselected, but a detailed design has not been done, the RFP can
provide a definite process specification and a product specification(s),
39
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Process specifications generally enumerate the unit processes required,
specific equipment desired, provisions for process redundancy, modular
design, contingency design, and plant flexibility.
Product specifications generally prescribe the type of products
required from the facility. These include such requirements as: tem-
perature, pressure and quality for steam, quality and form for ferrous
metals, quality and color limitations for glass, quality and form for
shipment for paper, and physical form, BTU content, chemical composi-
tion, and moisture content for fuels.
Specified Product. If a market for recovered products has been
determined, but a process has not been selected, the technical spe-
cification can consist of product specifications as described above.
Open Process. If neither process nor product is specified, the
RFP should provide operational requirements which generally describe
only the plant capabilities desired. The plant capabilities include
such requirements as plant capacity, site, downtime, degree of volume
reduction, environmental impact, delivery schedule, safety and stor-
age. These requirements should also be provided for product and pro-
cess specified RFP's, as will be outlined in the following sections.
Example:
Specified Process and Product
The bidder will propose to design, construct and operate an ad-
vanced solid waste resource recovery system using shredders, air
classifiers and magnetic separators. The system will ultimately be
capable of processing a nominal 2000 tons per day of municipal solid
waste in redundant process lines to produce a ferrous metal product,
mixed nonferrous metal product, and a shredded paper fuel material
suitable as a supplemental fuel in suspension-fired, coal burning
boilers.
Specified Product
At the minimum, the plant must be capable of producing steam to
meet the specifications of the market, recovering ferrous metals, and
providing at least 80% volume reduction of all solid waste delivered.
The Acme Light and Power Company will cooperate with prospective
proposers to the extent of quoting a price schedule and product spec-
ifications for the purchase of steam.
40
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Open Process
The bidder will propose a system to recover resources from solid
wastes which can be marketed. These resources may be in the form of
energy such as shredded fuel material, oil3 gas, steam or electricity,
or in the form of materials such as paper, corrugated paper, pulp,
metals, or glass. No specific products are required. Marketing guid-
ance is provided in the Appendix.
Solid Wastes Inputs
For all types of RFP's, the characteristics of solid wastes in
the area which is to be serviced by the facility should be described
as fully as is practicable. If knowledge of local waste quantities
or composition is limited, further studies may be necessary. If com-
position studies are done, it should be remembered that waste char-
acteristics can change significantly from season to season. Some
characteristics which may be described are:
• Quantity and types of refuse - municipal, commercial,
industrial, demolition, sludge, etc.
t Composition - percentage of paper, glass, ferrous,
and non-ferrous metals, plastics, leather, rubber,
textiles, wood, food wastes, yard wastes, moisture,
etc.
t Refuse categories which are excluded from the pro-
cessor's responsibilities, e.g. hazardous, patho-
genic, demolition, etc.
• Number and types of vehicles which will deliver
refuse
t Schedule of refuse deliveries
Example:
The contractor will process municipal and commercial refuse. The
contractor will not be responsible for processing hazardous, pathogenic
or explosive wastes. The municipal refuse has been estimated through
a series of sampling studies to have the following composition by
weight:
41
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% of Total by
Refuse Category Net Weight
Paper 35.8
Glass 8.4
Ferrous metals 7.6
Non ferrous metals .6
Plastics 1.S
Leather, rubber 1.4
textiles 2.9
Wood 2.3
Nonfood Product Total 59. 3
Food Wastes 18. 7
yard Wastes 20.4
Miscellaneous 1.6
Total 100.0
Refuse will be delivered in municipal collection vehicles (
per day), private packer trucks ( per day) and in transfer vans
( per day). Regular deliveries will be made during the follow-
ing hours: 7:SO a.m. to 4:00 p.m., Monday through Friday, and on
Saturdays from 7:30 a.m. to noon. Saturday delivery hours will be
extended to 4:00 p.m. during holiday weeks.
Processing Plant Outputs
All known specifications of products and residue which will be
produced by the facility should be indicated. These descriptions
should be as specific as possible even if the process is unspecified
in the RFP. Requirements might include:
t Minimum recovery, by weight or volume, or
• Limitation on quantity of raw refuse which can be
disposed by alternative means.
• Process residue specifications (quantity and quality).
• Fuel and material product specifications, including any
specifications for marketable products which have been
committed, and including transportation responsibilities.
42
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• Specific markets that must be serviced.
• Arrangements required for residue sale or disposal in-
cluding transportation, secondary processing markets
for residue, specified disposal locations, or required
backup disposal capabilities, etc., if determined.
Examp 1e:
Residual Products
The residue from the resource recovery process must not exceed
20 percent) by weight, of the incoming solid waste.
Fuel and Material Product Specs
0 Specified process: The product specifications are
provided in the Appendix.
0 Open Process: The bidder is required to make market
arrangements for his own product(s). Some marketing
guidance is provided in the Appendix.
Transportation
The contractor must arrange for transportation of its products
to the market and for transportation of its residue to the residue
disposal site located 15 miles from the facility site.
Residue Sale
The contractor may arrange for sale or delivery of the residual
materials to any residue processing facility.
Residue Disposal
The contractor shall dispose of process residues in a sanitary
landfill operating under a permit from the State Department of En-
vironmental Conservation.
Facility Capacity
The capacity of the facility, requirements for storage, and ac-
commodations for variations in the quantity of refuse delivered should
be included as precisely as possible.
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Examp le :
The facility must be capable of receiving a nominal 2000 tons
per day of TOW refuse. Seasonal variations will range from 80% to
130% of this figure. The facility must be capable of storing up to
one week's raw refuse under cover in periods of downtime.
Process Reliability
There are several ways in which the reliability of the system
may be guaranteed. One way is to require specific technical design
such as a large storage area and/or equipment redundancy which will
accommodate equipment malfunction. Another way is to establish a re-
liability requirement (e.g., a maximum number of days of raw refuse
landfill), with damages to be paid to the sponsor if this maximum is
exceeded. This method allows the bidder to determine his own tech-
nical means of establishing reliability. The requirement which is
established by the sponsor should be carefully outlined because it is
as an important factor in bidder design and cost calculations.
Example:
Technical Design Requirement
It is desirable that the facility be designed so that no single
point of failure will prevent the plant from functioning. Complete
duplication of dry fuel preparation lines is to be utilized to lessen
the probabilities of total plant shutdown due to mechanical failures.
The facility shall be in condition to process the required capacity
for a minimum of 50 weeks each year.
Reliability Requirement
In lieu of establishing a specific reliability requirement3 a
clause will be negotiated to require the contractor to make damage
rebates to the sponsor for every day over 12 per annum that it uses
the raw refuse contingency landfill.
Material Handling
If there are any specific methods desired by the sponsor for
handling of raw or processed materials, they should be described to
the bidder. These methods might include storage under cover, safety
considerations, movement of equipment, fire control, scale specifica-
tions and traffic patterns.
44
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Example:
All unloading shall be done under cover and the unloading areas
shall be constructed so as to minimize wind interference. The traffic
pattern shall be designed to provide efficient operation and use of
space. Scales will be equipped with automatic printers which will
record the time, date and scale weight for Identification and account-
ing of loads.
Future Expansion
Any future requirements in terms of capacity, additional recovered
products or new types of wastes (e.g., sewage sludge) should be identi-
fied, along with any necessary information such as land availability,
power restrictions, or environmental requirements. A requirement on
the contractor to plan or implement such future additions should also
be identified.
Example:
The bidder is encouraged to Include plans for future construction
of additional resource recovery operations which may be economically
merited, for Instance, aluminum recovery, newsprint separation, residue
processing or electrical generation.
Other Considerations
There may be other technical specifications of the system, such
as accommodations for visitors, identification signs, fences, etc.,
which should be described here.
Management Performance Specifications
The purpose of this section is to identify the responsibilities
and roles of the sponsor and contractor, as well as the schedules in-
volved in system implementation and operation. The items that should
be included are scheduling, management methodology and controls, re-
porting channels, auditing procedures, approval requirements, labor
and hiring specifications, marketing responsibilities and arrangements,
and personnel qualifications. A description of each is presented below,
with examples where appropriate.
Scheduling
The bidder must be aware of the anticipated schedules for all
phases of the system implementation and operation. For the design
and construction phase, provisions must be indicated for compliance
45
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with a predetermined construction schedule or for negotiation of that
schedule. A shakedown period schedule for testing of the facility
prior to full operation should include time periods, notification
dates, provision for delivery and payment for refuse. Operating
schedules should designate refuse receiving hours, operating hours,
maintenance schedules, and facility downtime. Known schedules for
additions or expansions of the facility should be included. The
schedule should also define the term of agreement for operation of
the facility.
Example:
The facility shall be fully constructed in 2. 5 years from the
contract date. An additional 6-month period shall be allowed for
purposes of shakedown and testing.
Upon completion of plant construction, the contractor shall
notify the sponsor that it wishes to accept refuse for shakedown.
The contractor may specify the schedule for and quantities of refuse
to ~be delivered to the facility for testing.
Management Methods and Controls
This section should summarize the contractor's management respon-
sibilities and control requirements. Specifically, a description of
the techniques and controls which are necessary for management of
successful facility implementation should be provided. These controls
may include reporting procedures, monitoring responsibilities, payment
responsibilities and management master plans.
Examp le:
The contractor is expected to employ project management and con-
trol techniques to provide the necessary information to both the
sponsor and the contractor for effective management of the program.
It is responsible for providing experienced management and technical
staffing to support all project phases. A FEET chart shall be pre-
pared by the contractor for the sponsor's use in monitoring progress.
The contractor shall supply verbal weekly activity reports,
monthly letter reports and detailed quarterly reports during all
phases through initial operation.
Monthly financial reports shall be submitted to detail the
budget, reflecting actual expenditures, commitments, and projected
expenditures.
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Reporting Channels
This section should outline the required interactions among par-
ticipants at all stages of implementation and operation. Some major
issues to be discussed include sponsor or other agency contacts during
the design and construction stage and notification of facility readiness
for testing and for sponsor inspection.
Responsibilities of Participants
Responsibilities of all participants (communities, private indus-
try, sponsor, contractors) in collection, transport, processing, mar-
keting and disposal of refuse and processing output should be defined.
Auditing Procedures
If the sponsor intends to require that the contractor allow audit-
ing of certain books, the provisions for audit should be outlined in
the RFP. A description of the persons who will conduct the audit and
notice of the audit frequency should be provided and a format may be
specified.
Example:
The sponsor wi.11, reserve the right to audit the books of the re-
source recovery facility. Sponsor audits will be conducted annually
at the sponsor's expense.
Approval Requirements
After selection of the contractor, many public approvals may be
required during design, construction and operation of the facility.
The approvals and their estimated time requirements should be specif-
ically identified. Such approvals may include site assignment, design
approval, equipment approval, safety and other local permit approvals,
building permits, environmental impact approvals, legal contract ap-
provals and financing approvals. The RFP should define the specific
approving agency and the party (sponsor, contractor and other) respon-
sible for obtaining the approval.
Marketing Responsibilities and Arrangements
If arrangements have been made for marketing of products recov-
ered from the refuse, these arrangements should be described in detail
including degrees of commitment for purchase, market contact names and
47
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addresses, product specifications, transportation distances, quantities
committed, and any other available information. A description of the
contractual and operational market relationship among the contractor,
the sponsor and the markets should also be given.
If no market commitments have been obtained, the bidder should be
provided with a definition of his market responsibilities and the re-
sponsibilities of the sponsor or of other parties. Market contacts or
other leads will be useful to the bidder in establishing market arrange-
ments and should be provided in the Appendix.
Example:
It shall be the responsibility of the contractor to seek out,
negotiate for and develop markets for the materials recovered through
processing. Letters of intent outlining product specifications, quan-
tities3 and price ranges for all energy and ferrous products must be
included with the proposal. A number of potential markets and custom-
ers for recovered products have been identified and are outlined in
the Appendix.
Personnel Qualifications
The sponsor may require specific personnel qualifications during
design, construction and operation of the facility such as professional
engineer registration. If so, the requirements, the stages for which
they are applicable, and reference to applicable statutes should be
provided.
Safety Specifications
Any applicable health and safety regulations such as OSHA regula-
tions or local fire codes should be stipulated.
Labor and Hiring Specifications
Hiring requirements such as equal opportunity employment and use
of local wage rates or local union labor force must be described.
Economics and Financing
This section should describe all aspects of the financing plan
proposed for the system including sources, legal stipulations, fees
and payments, escalator factors, and revenue sharing. A description
of each aspect is provided below, with examples where appropriate.
48
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Financing Source
The source(s) of financing which is available for the project
has to be identified along with an outline of the respective respon-
sibilities of the sponsor and contractor in obtaining or proposing
such financing. The relative contribution of each financing source,
mechanism for obtaining each, and estimated interest rates should
also be identified.
The sponsor may have goals for financing of the facility. For
example, public or private financing may be preferred. If so, these
preferences and the reasons for them should be noted.
Examp le:
It is the intention of the sponsor that the system will be finan-
ced by publicly issued tax-free pollution control revenue bonds, un-
less it is determined that contractor or other private party financing
can provide a lower user cost.
For the purpose of calculating a debt service cost, the bidder
should assume that revenue bond financing is available at a cost of
capital of 7%. He may3 in addition^ indicate whether private equity
is available to him and what the resulting impact on net cost would
be.
Legal Stipulations
Any existing legal requirements or constraints for financing of
resource recovery activities via particular financing means should be
noted.
Fees and Payments
A definition should be given of all fees and payments which will
involve the contractor. Such fees may include service fees from the
communities, revenue from markets, disposal fees for disposal of resi-
due, and administrative fees for services performed by the sponsor or
other agency. Payor and recipient should be identified along with the
method for determining the amount of each payment, either by bid, nego-
tiation, cost basis, or other calculation. A specific schedule for
payments should also be included.
49
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Escalator Factors
The bidder should be informed of provisions for escalator factors
or he may be asked to propose them himself. Furthermore, escalators
may be applied during any or all of the design, construction and opera-
ting periods.
Example:
The contractor shall propose methods of user fee and construction
cost escalation and shall specify which cost factors are subject to
such escalation. Escalators may be renegotiated before a contract is
finalized,.
Revenue Sharing
If not addressed under Fees and Payments, arrangements for shar-
ing of market revenues with the user communities should be defined.
Again the sponsor may specify the revenue sharing plan, or may ask
the bidder to propose one.
Examp le:
For the purpose of calculating net disposal fees, the contractor
shall assume that resource recovery revenues are shared with the user
communities on a 50%-50% basis. The contractor may additionally pro-
vide an alternative revenue sharing schedule, with a justification
for it. This addendum may be a basis for later negotiations.
Environmental and Aesthetic Specifications
The bidder should be informed of all environmental standards and
regulations with which he will be required to conform, in addition to
other environmental or aesthetic specifications of the sponsor. The
relevant environmental regulations and a list of necessary permits
may be included in the Appendix.
Example:
The proposed project shall meet all pertinent Federal, state and
local environmental and health requirements and standards. Such reg-
ulations cover all aspects of the project including construction and
operation, all solid/liquid/gaseous emissions, and all salable and
non-salable products of the process. A list of the pertinent regula-
tions and requirements is included in the Appendix.
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Contractual Considerations
The pattern of design, construction, management, ownership and
operating responsibilities selected for the facility requires certain
legal instruments. Some of the possible types of instruments are:
• design and engineering services contract
• construction contract
t project management contract
• equipment supply contract
t full service contract
t lease for land (if sponsor owns)
The bidder should be informed as to which of these instruments
apply to the given solicitation. The bidder should also be given an
indication of any contractual issues which have not been described
earlier. These issues may include: ownership responsibility, lease
arrangements, performance guarantees, insurance, patent rights, roy-
alties/taxes, risk sharing, and negotiable terms and conditions. A
description of the type of information required in each of these
areas is provided below.
Ownership
Ownership of various components of the system (land, facility,
refuse, transfer stations, landfill, products) during the construction
period, the operation period, and the end of the term of agreement
should be defined. Specific application of financing provisions or
other laws which govern ownership should also be cited.
Lease Arrangements
If any part of the land or facilities is to be rented, the terms
and arrangements for lease, ownership and payments should be outlined.
Performance Guarantees
Provisions for performance bonds and/or labor and materials bonds
should be defined. The amount of the bonds or the process for the
determination of the amounts should also be listed.
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If the sponsor desires liquidated damage provisions in the con-
tract, these should be described with occasions for use and amounts
and basis for determination. In addition, if there are any limits to
the financial risk to be placed upon the contractor, mention of the
maximum should be made here.
Insurance
Statutory insurance requirements should be identified so that
the bidder may include them in his costs.
Patent Rights
Any special provisions for retaining or acquiring patent rights
should be stated.
Royalties or Taxes
The facility may be subject to state or local property taxes or
to a royalty fee in lieu of taxes. These provisions and the amounts
to be assessed should be identified so that the bidder may include
them in his costs. If an exact figure is unknown, a reasonable as-
sumption should be provided for the purpose of bidding.
Sharing of Risk
The subject of risk sharing is one of the most important in the
procurement process since a variety of uncertainties exist in the
areas of technology, markets, and environmental control. Provisions
for the sharing of risk will have to be clearly outlined in the con-
tract and in the RFP, if such provisions are known at the time of
preparing the RFP. Frequently, process, product and financing uncer-
tainties make it inappropriate to discuss risk sharing provisions in
the RFP; in such a case, the RFP should define the process for nego-
tiation of the risk sharing provisions which have not yet been deter-
mined. The Risks and Contracts Guide of this series of Implementa-
tion Guides discusses risks in more detail and relates the risk shar-
ing formulae that have been used in some cities.
Negotiable Terms and Conditions
A number of other issues in a service contract between the pro-
cessor and the user communities or in a contract for facility con-
struction and operation may need to be negotiated at a later date.
These issues should be identified. Major negotiable items may in-
clude:
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• Actual user fees and residue disposal fees based upon
cost changes since the time of proposals
• Escalator factors
• Revenue sharing formulas
• Operation of the facility beyond the initially agreed
term of operation
• Minimum and/or maximum guarantees of refuse as inputs
to the facility, the periods for which they are guar-
anteed, the frequency with which they may be readjusted
t Failure to perform clauses (i.e., liquidated damages)
• Contract re-opener clauses
0 Cost readjustment clauses for future introduction of
governmental rules or regulations which may impose cost
or operating penalties upon the contractor.
Proposal Requirements (Formal Instructions to Bidders)
The purpose of this section is to specify the contents and the
format of the proposals so that all proposals will contain the infor-
mation required by the sponsor displayed in a uniform fashion.
It is important that the evaluation criteria and procedure for
evaluation be selected by the sponsor prior to RFP preparation. Then,
the dictated proposal format will correspond to these evaluation cri-
teria, sectioned according to evaluation procedures. For instance,
the major evaluation criteria which are chosen may be bidder qualifi-
cations, management and marketing capabilities, technical design, and
costs and pricing. The proposals should then be structured so that
bidder qualification, management and marketing, technical design, and
costs and pricing information are in separate sections for the pur-
pose of evaluation. Within each section, specific information should
be requested and specific forms or tables may also be required.
General Requirements
Certain general information concerning proposal submission must
be provided to the bidders. The deadline for submission of proposals,
the number of copies requested and any relevant page limitations must
be included. The bidders will need to know what type of bid bond or
53
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deposit if any is required, its amount, its form, the term and
conditions of its retention, and the conditions for its refund.
This introduction should also include a description of specific
financial or legal responsibilities of either the procurement sponsor
or the bidder. Examples of specific responsibilities might be statu-
tory requirements for handling of proprietary information in proposals,
competitive bid laws which require specific procedures for handling
and reimbursing bid bonds or time limitations for validity of proposals.
Any such specific requirements must be clearly outlined for the bidders
to prevent improper submission of proposals or proposal bonds.
Example:
Prospective bidders are notified that all information submitted
as a part, or in support, of proposals will be available for public
inspection in compliance with Chapter of the State Statutes.
The next step in the explanation of proposal requirements is a
more elaborate description of the information which is desired in each
proposal section. The Executive Summary should be the first item re-
quired. Its page limitations should be noted and a list of the items
which are required in the Executive Summary should be given in just a
few sentences. The detailed proposal requirements should then be out-
lined as described below.
Detailed Proposal Requirements
The proposal should be organized according to evaluation criteria
categories to allow for systematic review and evaluation. The sugges-
ted proposal format shown here corresponds to the detailed sample
evaluation criteria and evaluation process description provided in the
Evaluation Process section of the RFP (e.g., Table 14).
In some sections it may be desirable to provide charts or tables
for the bidder to fill in with the requested information. Although
it may be extremely difficult to provide a complete, universally ap-
plicable table in some cases, the standardized table method can
facilitate the evaluation process. Sample tables are included under
the specific topics to which they apply.
Technical Design Proposal
This section should specifically request all of the technical
design information which the sponsor requires to determine if the
proposed design is reasonable and will meet the disposal needs of the
community(ies) it will serve.
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Specific design information that may be requested from bidders
might include the following:
0 A statement and discussion of the total proposed process
(preliminary design) including: technical specifications,
total storage capacity, design and optimal processing
capabilities for each unit, and the proposed general con-
figuration of the system components.
• A proposed Statement of Work with explanation of technical
approaches, and a detailed outline of the proposed program
for executing the technical requirements.
• A complete process flow diagram.
• Graphic representations including: layouts, sketches,
diagrams, calculations, curves, and other data necessary
to illustrate the proposed technical approaches and pro-
nram
gram.
A general plan identifying all equipment in the process
flow and locating such equipment showing general dimen-
sions, buildings and surrounding structures.
Plans which clearly indicate the function, size, opera-
tion, performance and quality of each unit process shown
in the process flow diagram.
A statement and schematic presentation of the energy and
materials flow indicating: the quantities and types of
input materials, the energy required in BTU's for each
of the major processing functions, the materials output
at each of the major processing functions where appli-
cable, the quantity of residue as percentage of raw
refuse input, and a statement of equivalent BTU's per
input ton of refuse where output is a form of energy.
A statement and discussion of anticipated downtime,
including scheduled allowances for major overhaul and
other repairs and an estimate of time for unscheduled
shutdown and a statement of the possible causes.
A statement of the number of expected days of process
downtime when refuse accumulation will exceed the
storage capacity.
55
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• A statement of agreement to use the specified site and
a discussion of any site-related construction or opera-
tional problems that are anticipated.
t Plans for emergency conditions, including safety pre-
cautions, quench areas, preventative maintenance, re-
dundancy and storage capabilities.
• A statement and discussion of anticipated major equip-
ment difficulties and other problem areas, together
with potential or recommended approaches for their
resolution.
Marketing Proposal
This section should specifically request the marketing informa-
tion which is necessary for selection of a process and contractor.
The amount of information will depend upon whether the sponsor or the
contractor is responsible for marketing of products. The following
is an example of requests for marketing information where the sponsor
has performed only a preliminary market survey.
Example:
Specific marketing information provided by the bidder should in-
clude the following:
0 Full description of markets for recovered materials and
energy including quantities3 locations, degree of com-
mitment, quality specifications, and further marketing
efforts planned to meet long term market changes.
0 Concrete (written) evidence of successful marketing for
the products described in this proposal. (This type of
evidence will weigh heavily in the contract award delib-
erations. The level of commitment will be evaluated on
the basis of whether signed contracts or letters of in-
tent for products exist.)
» Market commitments should specify the following: quan-
tity of product to be sold, quality of the material to
be sold, product specifications, provisions and dura-
tion of commitment, price range or basis for pricing
of salable products.
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Management Qualifications and Proposal
This section should specifically request the management informa-
tion which is necessary to determine whether the bidder has acceptable
management capabilities and whether the proposed management for the
facility is adequate.
Some of the background of the bidder's management capabilities
may be provided in a qualifications statement received prior to issu-
ance of the RFP. In this case, management background does not need
to be requested again. If there is no prequalification stage, it will
be necessary to require a statement of management capability in the
proposal. A table format can be utilized for this purpose. Informa-
tion which should be requested in the RFP concerning the proposed
management of the facility includes:
• Full description of the proposed management philosophies,
incentives, roles and responsibilities of participating
firms, individuals or other groups, and contractual ser-
vices required.
• Documentation of commitment and backing of parent com-
pany or other firm, if applicable, which will lend man-
agement, financial or other support to the enterprise.
• Personnel who will be assigned responsibilities for de-
sign and construction supervisory services on this pro-
gram. Information which will show the composition of
the task or work group, its general qualifications, and
recent experience with similar programs is required.
Included should be names of registered designers and
engineers responsible for preparing the design and pro-
posal. Special descriptions shall be given of direct
technical supervisors and key personnel, and the ap-
proximate percentage of the total time each will be
available for this program. Resumes are desirable to
indicate education, background, recent experience and
specific scientific or technical accomplishments.
• A table of personnel organization for the management
and operation of the plant and related functions with
job descriptions of each personnel classification.
Resumes of key management and technical personnel are
also desirable to indicate education, background and
recent experience.
57
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• Additional personnel, and organizations, if any, who
will be required for full-time employment, or on a
subcontract or consultant basis. The technical areas,
character and extent of subcontract or consultant ac-
tivity should be indicated, and the anticipated sources
should be both specified and qualified.
• Description of long term management or master plan.
• Description of maintenance policies, including a list-
ing of maintenance personnel indicating work schedules
and job descriptions.
• Description of policies for accommodating public or
governmental visitors in accordance with specifications.
t A detailed schedule of the entire project from incep-
tion of design through full-scale operation, including
construction completion date, and schedule for plant
shakedown and startup.
• A description of the safety policies.
Financial Proposal
The sponsor must know the financial status of the bidder and the
financial plan proposed. Some financial data may be obtained from
the bidders during a prequalification stage, but if not, Table 11 is
a sample of requests for bidder financial information. Regardless of
whether or not prequalification is utilized, a basic description of
the proposed financial plan must also be required.
Economic Proposal
This section should specifically request the economic information
needed by the evaluators to determine the economic impact of each pro-
posal. The degree of detail requested will depend upon the level of
economic analysis to be conducted during the evaluation stage. How-
ever, the minimum economic information required in the RFP is the
system's capital cost, annual debt service, operating costs, antici-
pated market revenues, and an anticipated net per ton disposal fee.
An example of requested economic information is shown below. A stan-
dardized cost table may be used if a tabular approach is preferred,
such as the one provided in the Accounting Format Guide of this series
of guides.
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Table 11
Request for Bidder Financial Data
(Sample Form)
Contractor Name:
Total Current Assets*:
Total Fixed Assets:
Reserve for Depreciation
Buildings (Net)
Equipment (Net)
Total Current Liabilities:
Working Capital:
Current Ratio:
Annual Interest Expense (Long term debt):_
Equity Composition:
Preferred Stock
Common Stock
Earned Surplus
Debt to Equity Ratio:
Sales (Annual $ Volume):
Profit:
Return on Equity (last complete year)_
Return of Equity (average)
Current Backlog in Resource Recovery:
Current Credit/Bond rating (e.g., Dunn & Bradstreet):
Proposed Financing Plan:
Contractor's Share (%) of Total Investment
Source of Funds:
Source Interest Rate
*Provide financial data for most recent complete year.
59
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Examp le:
Requested Economic Information
The following minimum data and information should be provided in
the economic proposal:
• A firm fixed per ton user fee for each different
operating level outlined in the RFP.
0 A full description of the contractor's proposed
formula for adjusting the user fee for cost
changes in the price over the program life or
for variations in the annual tonnage throughput.
0 A breakout of the debt service component of the
user fee.
• A full description of the resource recovery reve-
nue sharing schedule.
0 Cost proposals fully supported by cost and pricing
data adequate to establish the reasonableness of
the proposed user fee.
• Cost data for all stages of construction and opera-
tion including,, but not limited to, site development
cost, direct construction costs, contractor costs,
equipment costs, costs of performance and labor and
materials bonds, financing costs, O&M costs, expan-
sion costs, and market or transportation costs.
• A full description of the contractor's proposed
formula for adjusting the construction cost to the
initial starting date.
It may be necessary to provide certain cost assumptions to the
bidder because many economic factors are unknown until the implemen-
tation of the plan. In this case, cost assumptions in the RFP will
permit the bidders to base their price proposals on the same assump-
tions so that they can be evaluated comparatively. Some economic
factors which may have to be assumed are: financing charge (interest
rate), escalator factors, inflation factor, rental expenses, property
taxes, landfill disposal, and transportation costs.
60
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Example:
The cost assumptions below are provided to the bidder for his
use in preparing proposals. A base per ton user fee will be proposed
by the bidder on the basis of these assumptions. Where actual costs
(i.e., landfill costs3 financing charges, rentals etc.) are found to
differ from the assumed costs, the user fee will be adjusted during
contract negotiation to reflect the actual costs.
0 All costs are to be submitted in 1975 dollars.
0 The contractor is to contract with local communi-
ties for a 20-year fixed price, full service con-
tract.
0 Seasonal variations in raw refuse input are ex-
pected to vary from 80% to 130% of expected
monthly tonnages.
0 A site will be provided with a 20-year lease.
The land rental will be paid directly to the
sponsor. For purposes of pricing it may be
assumed that the rental will be $12,500/year.
0 The host community is to receive a disposal
fee of one dollar per input ton as an equiva-
lent for property taxes.
0 Any non-salable residue will be transported to
and disposed of at a landfill for a total cost
of $5.00 per ton of residue.
Raw refuse will be disposed of during periods
of downtime for a total transport and disposal
cost of $8.00 per ton.
0 Twenty year Industrial Development Revenue Bonds
will be available at a 7 1/2% carrying charge.
Environmental Impact and Aesthetics Proposal
This section should request the environmental and aesthetics
information which the sponsor requires to determine whether the pro-
posed facility will comply with appropriate environmental quality
regulations and aesthetics standards.
0
61
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Some environmental information may not be known before the facil-
ity is fully designed or constructed. Nevertheless, as much detail
as possible should be requested for certain critical areas of major
environmental impact. Requests for information should include data
which will be useful for preparation of environmental impact state-
ments or permit applications so that preparation of these documents
can begin early. A brief example is shown below and a more complete
presentation of some required data is shown in Table 13.
Example:
The proposals will -Include the following environmental 'informa-
tion :
Architecture
0 Professional qualifications of a registered architect
who will be responsible for the building, site and
landscape designs. Include photographs of at least
three projects designed by this person, at least one
of which is an industrial building.
• Architectural rendering of the proposed processing
plant and environmental setting, including in detail
the landscaped appearance from the road and other
directions, with both planometric and isometric views.
Evaluation Process
The purpose of this section is to describe to the bidder how the
proposals will be examined and which subject areas will be most close-
ly scrutinized. It is important for the bidder to be aware of the
criteria by which proposals will be judged in order for them to devote
adequate proposal effort to the most critical areas. A detailed des-
cription of the evaluation process itself is less crucial and may be
optional in the RFP.
Methodology/Approach
This section should reiterate the project goals and objectives,
with particular emphasis on their relation to the evaluation process.
Evaluation Team
The bidder will want to know who will participate in proposal
evaluation. This section need not identify specific persons; the
names of groups or agencies involved and the areas of evaluation with
62
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Table 12
Sample List of Environmental and Aesthetic Data to be Considered
in Resource Recovery Facility Implementation
Architecture
• Professional qualifications of a registered architect who will be responsible for the building, site and landscape designs Include photographs of
at least three projects designed by this person, at least one of which is an industrial building.
t Architectural rendering of the proposed processing plant and environmental setting, including in detail the landscaped appearance from the road and
other directions, with both planometnc and isometric views.
• Percentage of the project cost that will be earmarked for the aesthetic aspects of architectural design, and in what manner will these funds be spent
• Measures and architectural features proposed to enhance the appearance of the processing plant and its harmony with the environment.
t Major alternative measures and architectural features that have been considered to enhance the appearance or environmental harmony of the proposed
plant, and why rejected
Construction (List as much of this information as is available)
• A complete outline of the methods of construction, keyed where possible to the timetable described in the RFP. Include estimated numbers and
categories of employment, an inventory of types and quantities of equipment, and types, amounts, and sources of construction materials.
t Special construction methods or techniques proposed as a result of the particular geologic, hydrologic, and other environmental aspects of the
proposed site
• Comprehensive estimates of utility requirements (e.g , water, gas, oil, electricity) during construction.
• Any traffic impacts expected during construction, e.g., the temporary diversion of vehicular traffic, and the use of or effect on nearby roads
(reference approximate daily timetables)
• Measures proposed to reduce the amount of air pollution caused by construction (e.g., selection of equipment, dust controls).
t Approximate noise levels, if known, for each type of equipment.
• Extent and character of construction noise, and what provisions will be taken to minimize damage from construction-related noise.
i Nature, composition, flow, and provisions for water effluents occurring during construction.
t Nature, composition, quantities, and provisions for disposal of solid wastes occurring during construction.
• Any additional environmental emissions, data, effects, measures, and alternatives related to or resulting from construction.
Process Design and Plant Operation (Include relevant information for all anticipated scales of operation)
t Comprehensive estimates of utility requirements (e g., water, sewer, gas, oil, electricity) during the test period and during full operation.
Measures proposed to reduce energy consumption during plant operation
reouce energy consumption ouring piant operation
: emissions arising from the operation of the proposed plant (e.g , levels of S0;>, CO, NOX, hydrocarbons, particulates, ash,
ler) To the extent feasible, provide supporting data and methods used in arriving at these air quality determinations,
lat all oertinent air oualitv standards are met bv the orooosed plant.
Include relevant features of the plant or process
All known atmospheric
sulfur» chlorine, other) To the extent feasible, provide supporting data and methods use
including evidence that all pertinent air quality standards are met by the proposed plant.
Special measures and controls proposed to minimize the levels of harmful atmospheric emissions.
design.
Alternatives to these measures and controls that have been seriously considered, and why rejected.
Expected noise levels (above the background level) inside and outside the plant, and at the site boundaries, during plant operation. To t
feasible, present supporting data, measurements, approximate noise levels of plant components (e.g., shredders), and methods of analysis.
Measures proposed to reduce noise levels during plant operation Include special features of the plant or process design
or process design
Alternatives to these measures that have been seriously considered, and why rejected
Known composition and properties of all saleable and nonsaleable products of the proposed process. For fuels this might include particle size,
heat value, ash contents, sulfur content, and moisture content, as well as amounts of chlorine, sodium, potassium, and other constituents.
Supporting data should be presented where appropriate.
Estimated impacts of noise, dust (from raw refuse and otherwise), odor, and other atmospheric or aesthetic features inside and outside the proposed
plant, on employees and users of the facility, on visitors and passers by, and on nearby residential and recreational areas.
Other safety problems.
Provisions proposed to minimize any such negative impacts, and also to safeguard the health and safety of those affected persons.
Any additional environmental emissions, data, effects, measures, and alternative measures related to or resulting from process design or plant
nprn
63
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which they will be involved is sufficient. A description of evalua-
tion team arrangement may also be given, that is, whether teams will
be arranged by evaluation criteria, proposal type or other division.
Evaluation Techniques
The RFP should briefly describe the evaluation process which is
anticipated, identifying screening procedures and more detailed re-
view stages.
Evaluation Criteria
The criteria to be used in evaluation should be outlined to indi-
cate the project areas which the sponsor considers to be the most im-
portant. A detailed version of these criteria provide the sponsor
with a basis for outlining the prescribed proposal format.
The criteria may be summarized by category of emphasis, as shown
below. This indicates to the bidders which general areas will receive
most attention from the sponsor.
Examp le:
Evaluation Criteria
Proposals will be judged for:
0 Technical soundness, including market commitments
0 Technical and management qualifications of the bidder
and proposed system
0 Financial qualifications of the bidder and proposed
system
0 Cost, including the net user fee proposed
0 Environmental impact and aesthetics, including con-
formance to federal, state and local regulations, and
other environmental considerations.
A more detailed outline of criteria must also be included to en-
courage the bidder to provide sufficient information in the important
areas. It will also show the bidder that the sponsor's goals are well
established and thus increase the RFP credibility. Table 13 is an
example of how the evaluation criteria may be elaborated.
64
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For some systems it may be possible to have very specific cri-
teria which can be measured quantitatively and which facilitate the
evaluation process. It may also indicate to the bidder the exact
criteria which the sponsor seeks. However, such specificity limits
the sponsor's flexibility in adapting his evaluation to unexpected
trends in the proposals which are received.
Appendices
A certain amount of supplemental information may be desirable in
the RFP. Such information often may offer more detail than is neces-
sary in the body of the RFP and may be placed in an appendix. Pos-
sible appended materials include the items listed below.
t
Technical, economic, planning, etc., studies which have
already been conducted pertaining to the designated
region.
• Site information such as detailed maps, soils and seis-
mic information, test borings, availability of utilities,
access conditions.
t Maps of the region showing the processing site(s), dis-
posal locations, transportation routes, transfer sta-
tions, refuse generation centers, etc.
• Permit requirements indicating the specific local, state,
and federal permits required and the appropriate auth-
ority for each.
• Other local, state and federal legal requirements such
as environmental standards, zoning laws, building codes,
fire and safety codes, professional registration require-
ments.
t Legislation pertaining to public financing options.
t Sample contract or lease for the facility.
t Letters of intent indicating community interest in re-
gional participation, or market commitments.
t Marketing guidance such as history of market interest,
testing programs, names and phone numbers of market con-
tacts, and fuel or material product specifications.
66 uu.S. GOVERNMENT PRINTING OFFICE.1976 634-930/198 1-3
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