How Does Solomon Run an RFP?

Many Solomon Energy clients are required to manage a formal RFP or Request for Proposal process. Municipalities, for example, must conduct such formalities under municipal or state law. Other clients are not required to conduct such a process but will do so in order (i) to avoid any conflicts of interest pursuant to corporate policy and (ii) to obtain competitive pricing.

The RFP process consists of a few discrete steps:

1. List of Eligible Contractors

Depending on the project Solomon Energy’s team will assemble a list of contractors who have the experience and reputation for quality and efficiency that Solomon believes are appropriate for the job.

In assembling this list of eligible contractors, Solomon Energy will weigh a number of criteria, including:

  • Experience with solar or the technology being applies;
  • Reputation for quality;
  • Reputation for efficiency and ability to complete projects on time;
  • Quality and experience of team;
  • Availability of team to perform the work;
  • Adequacy of insurance.

2. Information Requested

Solomon Energy will launch the RFP process by distributing via email a request for proposals to solar and energy efficiency contractors who are professional, experienced, and meet the other criteria described in section 1 above. The RFP will request, for example, the following information from bidders:

  • Description of the contractor’s experience in the industry
  • A description of prior projects like the one being built
  • Key personnel that will work on the project
  • Size of the proposed project
  • Proposed engineering configuration of the project, subject of course to further due diligence and refinement
  • Projected costs to buy or lease the project
  • If a power purchase agreement (PPA) is proposed, what is the price per kilowatt hour in the first year and the annual escalator, if any?
  • Term of the proposed agreement (e.g., 15-, 20- or 25-years)
  • Specifications of the equipment the contractor will propose using
  • Warranties that will be delivered with the equipment
  • Insurance protection that will be delivered with the contractor
  • References from satisfied customers

3. Apples-to-Apples Comparison

After receipt of bids and immediately following the deadline set out in the RFP Solomon Energy, Solomon Energy’s team will open the bids. For municipalities, after reaching out to 30 or so contractors, we have been averaging at least 5 bids (with smaller projects getting less interest and larger ones over 1 megawatt attracting more proposals). For commercial property owners we will reach out to 5 or so contractors and generally receive 3 or 4 replies.

We then compare the bids on a spread sheet that breaks down key element such as:

  • Price
  • Size of system
  • Equipment specified
  • Time to completion
  • Availability of experienced teams to complete.

We will also summarize each bidder’s qualifications.

4. Clarifying the Bids

Almost without exception bids are incomplete or contain ambiguous or inconsistent information. In those cases we will reach out to the bidders to clarify their submissions. In all cases we resist the temptation to help the bidders become more competitive, giving them a chance to compete without unfairly disadvantaging others who might have replied properly to the RFP request.

5. Recommendation

Solomon will make a recommendation to our client, usually including a minimum of two top contenders.

Price is not the only or even the most important criterion in determining our recommendation. Often subjective issues like reliability and experience weigh heavily in the final analysis.

6. Negotiate Contracts

Assuming our client chooses one of the contractors who submitted a proposal we will request contracts from the successful bidder. We will then help our client and its lawyers negotiate the contracts, trying in all cases to obtain contractual protections that we think are important. Because of our experience in the industry we know what is reasonable to request. At the same time we are fierce advocates for our clients’ position. After all, our interests are aligned and only if our client is completely satisfied will the project be completed…and will we be paid!

7. Oversee Project Implementation

Once contracts are negotiated and all prerequisites to construction are in place – e.g., permits, interconnection agreements, etc. – we will play a role in overseeing the contractor’s completion of the project.

Of course, this summary of our process is a generic one. Some of our engagements may include more or less education of stakeholders, appearing before boards and municipal councils, preparing reports, seeing legal assistance, recommending that our clients seek tax advice, and so forth.

Each project presents unique challenges, many of which we have faced before but some of which may be new. Because our interests are so closely aligned with our clients we are constantly interacting with them at every stage as we help them realize the benefits that they originally retained us for.