HomeMy WebLinkAboutCOM 0731.001 1996-1998 ~s
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4OJMTV OF N9jL'
~,I,V;~.. Donna Fay K Kiyosaki
Stephen K Yamashiro ~ chieJEng;neer
~9°r • ~ Jiro A. Sumada
~rF oi'nF'M Deputy Chief Engineer
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DEPARTMENT OF PUBLIC W~f~KS
25 Aupuni Sueet, Room 202 Hilo, Hawaii 96720-4252
(808)961-8321 Fax (808) 961-8630
March 13, 1998
MR JOHN KIMURA
JK ELECTRIC INC
16-206 WILIAMA PLACE
KEAAU HAWAII 96749
SUBJECT: PROPOSAL B-3408 PROVIDE ENERGY PERFORMANCE
CONTRACTING SERVICES
Reference is made to the following:
1. Your March 12, 1998 facsimile to the Chief Engineer, same subject, requesting
the bid date for the subject project be postponed.
2. Your undated letter to Mayor Yamashiro, the Chief Engineer and Mr. Ray Carr,
Department of Research and Development, stating that the wording in the subject
RFP is unfair and offers an unjust advantage to mainland companies.
We have reviewed your suggestions in the referenced correspondence. We regret to inform you
that we will not postpone the submittal date for the subject RFP. Once proposals are received,
we will examine all proposals and make a determination as to whether to award a contract for the
work or not.
In response to your concerns, we offer the following feedback.
1. While you may feel the RFP is unfair to local contractors, the RFP does not
preclude local Contractors from forming their own team of Engineering,
Construction, and Financing firms to submit a proposal that would compete for
the project. Similar to the design-build contracting method that brings together
the design engineer and the construction contractor, the performance contracting
method brings the financier into the picture to also be part of a team. Therefore,
local contractors do have an opportunity to serve as a prime contractor, it just
requires the effort to find the other partners to form a team. ,73 D /
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Mr. John Kimura
Mazch 13, 1998
Page 2
2. The traditional construction contracting method for improvement projects requires
the government agency to pay for the study, design, and construction up front.
The expected cost savings are realized after the project is completed through the
reduced energy cost. With the performance contracting method, the government
is able to use the financial capital of private industry to fund the project with no
government money up front. This serves as a form of a loan to the government.
The loan is repaid in the cost savings of a reduced energy bill.
Since no government funds are used up front for performance contracts, limited
County capital improvement funds can then be used for other construction
projects that could be done in the traditional design, bid, construct method.
Therefore, by using the performance type contracts, there is more construction
work being bid out for contractors to compete for, rather than if all work was done
in the traditional contracting methods where the government funds everything.
We feel it is important for the Department to continue to try new and innovative methods to
make our limited resources go farther. We regret that there may be an initial inconvenience to
some Contractors to adjust to these changes. We feel we are getting competitive prices for the
work that is accomplished and the project does serve the interests of the general public as a
whole.
If you have any questions, please call me at 961-8464.
JIRO SUMADA
e ty Chief Engineer
cc: Hugh Willocks, Willocks Construction
Alden Chai, Aircond Hawaii Inc
James Arakaki, County Council Chairman
Dominic Yagong, Councilman
Ray Carr, Research and Development