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HomeMy WebLinkAboutCOM 0210.004 2004-2006 - t`_r _ ~ 2 - s. . SAY 0.-- - t r> 1 ~ ~~r~e va~re Energy f ; re tt~ext Gereradair May 2, 2005 Honorable Stacy K. Higa Chairperson Hawaii County Council 25 Aupuni Street Hilo, Hawaii 96720 Re: Council Resolution No. 218-04; County of Hawaii Request for Proposal (RFP) No. 2146 Dear Chairperson Higa: Barlow Projects, Inc. ("Barlow")has been advised by the County's Director of Environmental Management that RFP No. 2146 will be cancelled. We are extremely concerned that cancellation of the RFP process at this point may make it even more difficult for the County to incorporate a safe, efficient and cost- effective means of reducing and disposing of its solid waste. Given the limited life of the Hilo Sanitary Landfill and the urgency recognized by the Council in its adoption of Resolution 218-04, we suggest that this Council encourage continued negotiations between the administration and all interested vendors to this RFP in order to resolve any differences, real or perceived, in arriving at an executed agreement by the July 31, 2005 deadline set out in the Resolution. Based on the feedback received from the Director in her April 29~' letter, it is our sincere belief that there may been some misunderstanding in the written communications between the County and the interested vendors. As an example, her letter indicates that Barlow failed to agree to provide the County with the $5,000,000 performance bond. However, in response to the County's request for written clarification on this matter, Barlow agreed to provide this security in its April 7, 2005 letter to the County Purchasing Agent: "As previously stated, Barlow will provide the County with any required security for the services provided by the privately owned and operated facility including the $5 Million performance bond requested by the County in the RFP. 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 in HRS Section 103D-324. While the surety bond is one form of security that will be considered, Barlow must have the opportunity to pursue alternative forms of security such as Irrevocable Letters of Credit due to the volatility of the surety markets." We believe the Council's continued interest and participation can only help to secure the successful completion of this project. Therefore, we respectfully request that you schedule an update of the status of the Resolution and the subject RFP on the Council's agenda at its earliest possible meeting. 2000 Vermont Drive, Fort Collins, Colorado, USA PH: (970) 226-8557 FAX: (970) 226-8559 ~®mm. ~ WWW.BARLOWPROJECTS.COM Rif. T®: ~2~f. U~}005 I have included a copy of a full response to Ms. Bell for your review and distribution to the Council. Thank you for your interest and assistance in this matter of critical importance to the County of Hawaii. Sincerely, ti i~~'"""'""" Ron Barmore, Sr. VP Business Development Attachment: Letter to Director of Environmental Management dated May 2, 2005 2000 Vermont Drive, Fort Collins, Colorado, USA PH: (970)226-8557 FAX: (970)226-8559 W W W.BARLOWPROJLCTS.COM 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 b. Barlow is operating a facility in Tulsa, Oklahoma that is five times larger than the proposed facility and which incorporates Barlow's technology. c. In Tulsa, Barlow is operating a facility that produces and sells steam to a very demanding steam customer in quantities that are five times what will be produced by the proposed facility. d. Barlow is building a project in Harrisburg, PA that is four times larger than the proposed facility and will produce and sell 20 MW of electricity to Pennsylvania Power and Light. e. Renewable l:~awaii, Inc., a wholly owned subsidiary of HECO, has endorsed our technology and is interested in investing in this project. If the County is serious about this procurement effort, we would expect that it would want to discuss these matters face-to-face and work towards a mutually acceptable resolution. Without exception, 1 am convinced that a solution exists for all of your stated concerns. We continue to be very surprised that we have not been afforded the opportunity to appear before the selection committee. We look forward to meeting and discussing the committees concerns in detail in the very near future. Sincerely, Ron Barmore, Sr. VP Business Development Cc: Hawaii County Council 2000 Vermont Drive, Fort Collins, Colorado, USA PH: (970) 226-8557 FAX: (970) 226-8559 W WW.BARLOWPROJECTS.COM