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StE~riv~'~ JIB _ S~.._. ~ ~ .~2~n~> ,Energy r-~-i`~f~cxtEr~~~c:~rtivn May 2, 2005 Barbara Bell, Director Department of Environmental Management County of Hawaii 25 Aupuni Street, Room 210 Hilo. HI 96720-4252 Subject: Request for Proposal (RFP) No. 2146 and response to B. Bell letter of April 29, 2005 Dear Ms. Bell: We were very disappointed to receive your notification that the County has decided to cancel the procurement. We remain convinced that a solid waste reduction facility, specifically a Barlow waste to energy facility, remains the best option to address the long term waste management problems facing East Hawaii. I appreciate your willingness to indicate the evaluation committees concerns with our proposal. As I indicated to Mr. Gray in my letter of April 26`", the procurement of a 20 year service contract to provide waste reduction services from a facility that is to be privately f"manced is a very complex process. Your letter expresses four areas where the evaluation committee deems our proposal and responses to be deficient. I want to take this opportunity to again respond to the committees stated concerns. 1. A commitment to a $S million performance bond. Harlow's April 7`" 2005 letter to the County indicates that Barlow will either provide a surety bond for this amount or its performance will be '`otherwise secured in a manner satisfactory to the purchasing agency" as provided by HRS Section 103D-324. While the surety bond is one form of security to be considered, Barlow must have the opportunity to pursue alternative forms of security such as Irrevocable Letters of Credit due to the current volatility of surety markets. This is a comm fitment. If a letter of credit is the chosen form of security it can be written with the County as benefiiciary. 2. A clear commitment to county ownership at the end of 20 years. Harlow's April 7`" 2005 letter indicates very clearly how the facility can be purchased at the end of the contract term at fair market value and further indicates that this amount cannot be determined by either Barlow or the County but must be determined by an independent appraiser. This requirement is necessary to satisfy the IRS requirements of the leveraged lease form of financing proposed by Barlow to satisfy the County's requirement that the facility he privately financed. The evaluation committee can get a reasonable estimation of the future sales price through the independent appraiser. 3. Cost breakdowns nat sufficient. Harlow is proposing, as requested by the County to provide a waste reduction "service" by building a privately owned and operated facility. We have tried to indicate through the RFP pricing forms that our proposal is comprehensive and thorough. 4. Lack of adequate experience with a representative system. The evaluation committees concerns over our experience are unfounded. Barlow has stated its qualifications on numerous occasions but let me summarize one more time. a. Barlow has built a number of facilities that demonstrate our technology. 2000 Vermont Drive, Fort Collins, Colorado, USA PH: (970) 226-8557 FAX: (970) 226-8559 W WW.BARLOWPROJECTS.COM