B -- FINANCIAL SERVICES

Notice Date

September 12, 2001

Contracting Office

Department of Agriculture, Rural Development, Procurement Management Division, 1400 Independence Ave., S.W. Mail Stop 0741, Washington, DC, 20250

ZIP Code

20250

Solicitation Number

IB-31ME-1-1003

Response Due

September 24, 2001

Point of Contact

Myrtis Robinson, Contract Specialist, Phone 202-692-0115, Fax 202-692-0235, Email myrtis.robinson@usda.gov

Description

This is a combined synopsis/solicitation for commercial items prepared in accordance with the format in Subpart 12.6, as supplemented with additional information included in this notice. Invitation For Bid (IFB) No IB-31ME-1-1003 is being issued as a IFB, and incorporates the provisions and clauses in effect through Federal Acquisition Circular(FAC) 97-27. This requirement is a small business set-aside. A three year Time And Materials contract will be be awarded with no option periods. Under SIC/NAIC(s) Code 8748/541618, Size Standard: 5 Million, the contractor certifies that it: is( ), is not( ), small business concern; is( ) is not ( ), socially disadvantaged; is( ), is not ( )woman-owned; is( ), is not( ), located___ in a hub-zone; is( ), is not( )veteran; is( ), is not( ), an 8(a) firm. The provision at 52.212-1, Instructions to Offerors-Commercial(www.arnet.gov/far), applies to this acquisition. Offeror(s) shall include a copy of the provision at 52.212-3, Offeror Representations and Certifications -- Commercial Items, with its offer. The clause at The clause at 52.212-4, Contract Terms and conditions-Commercial Items, and 52.212-5, Contract Terms and Conditions Required To Implement Statues or Executive Orders-Commercial Items, applies to this acquisition.=20 Section B Item No. Services Facilities, personnel, technical expertise, and materials to provide analytical support, and financial/economic counsel in support of ongoing litigation and negotiations for the Rural Utilities Serivce's(RUS) Financial Services Staff and its troubled or bankrupt electric borrowers.=20 0001 Kansas 2000 Quality Unit Rate Total Price =20 0001AA Project Manager ______ ___ ____ ____=20 0001AB Sr. Financial/Econ Anaylst ______ ___ ____ ____=20 0001AC Utility Information Specialist ______ ___ ____ ____ 0001AD Sr. Industry Specialist ______ ___ ____ ____ =20 0001AE Sr. Utility Modeler ______ ___ ____ ___ =20 0001AF Travel ______ ___ ____ ___ 0001AG Other Direct Cost ______ ___ ____ ___ 0001 Total ______ =20 0002 Risk Management 2000 0002AA Project Manager ______ ___ ____ ____=20 0002AB Sr. Financial/Econ Anaylst ______ ___ ____ ____=20 0002AC Utility Information Specialist ______ ___ ____ ____ 0002AD Sr. Industry Specialist ______ ___ ____ ___ =20 0002AE Sr. Utility Modeler ______ ___ ____ ___ =20 0002AF Travel ______ ___ ____ ___ 0002AG Other Direct Cost=20 0002 Total ___ 0003 Metlakatia 0003AA Project Manager ______ ___ ____ ____=20 0003AB Sr. Financial/Econ Anaylst ______ ___ ____ ____=20 0003AC Utility Information Specialist ______ ___ ____ ____ 0003AD Sr. Industry Specialist ______ ___ ____ ___ =20 0003AE Sr. Utility Modeler ______ ___ ____ ___ =20 0003AF Travel ______ ___ ____ ___ 0003AG Other Direct Cost=20 0003 Total _____=20 0004 Management IIA =20 0004AA Project Manager ______ ___ ____ ____=20 0004AB Sr. Financial/Econ Anaylst ______ ___ ____ ____=20 0004AC Utility Information Specialist ______ ___ ____ ____ 0004AD Sr. Industry Specialist ______ ___ ____ ___ =20 0004AE Sr. Utility Modeler ______ ___ ____ ___ =20 0004AF Travel ______ ___ ____ ___ 0004AG Other Direct Cost=20 0004 Total ____ Total Contract Price ________=20 STATEMENT OF WORK C.1. INTRODUCTION The Financial Services Staff (FSS) of the Rural Utilities Service (RUS) is the focal point for dealing with RUS' troubled electric borrowers and the specialized risk management function. FSS negotiates debt restructures, plans of reorganization, debt compromises, or other appropriate settlements to maximize the Government's debt recovery, and is RUS's representative in all regulatory, bankruptcy and other legal proceeding relative to such troubled borrowers. C.2. BACKGROUND The FSS is involved in a number of (a) critical cases involving ongoing litigation and negotiation with troubled and bankrupt borrowers, and (b) key risk assessment activities. During the performance period of Contract No. 53-3158-5-33101, the FSS has been working with Sunflower Electric Power Corporation (Sunflower) since 1997 on a potential restructuring of its debt, with Kansas Electric Power Cooperative (KEPCO) since 1997 on power supply purchase options and merger opportunities, with Sunflower and KEPCO's member systems since 1997 on system inspection studies, with Cajun Electric Power Cooperative (Cajun) on bankruptcy and post bankruptcy litigation issues since 1995, with the Metlakatla Indian Community (Metlakatla) since early 2000 on a loan default and potential restructuring of its debt, and on risk assessment activities since 1999. The contractor has been providing continuing consulting services to the FSS in these cases and activities pursuant to task orders under Contract No. 53-3158-5-33101. All of these cases and activities require continued analytical support and financial/economic counsel from the contractor until such time as the cases and activities are completed. The contractor is extremely familiar with the issues in these cases and has spent considerable time developing models and analyses on each of these cases and activities. =20 The use of the original contractor's consulting services to continue and complete all nonseverable work under these task orders assures that (a) the Government?s interests in (1) the recovery of the almost $800 million in outstanding debt for three troubled electric borrowers, and (2) the $50+ million post bankruptcy breach of contract lawsuit brought by the Government are protected; (b) non-negotiated losses are prevented; (c) appropriate debt, organizational or other appropriate settlements are ultimately achieved; and (c) risk assessment activities, to further protect the RUS loan portfolio and the RUS borrowers, are continued. =20 C.3. SCOPE The contractor shall provide continuing analytical support and financial and economic counsel to the FSS for troubled borrower negotiating support and risk assessment activities. These consulting services enable the FSS to have continued access to the special knowledge, skills and expertise of credentialed experts in the areas of electric utility and cooperative operation, production cost and bulk power market modeling, technical evaluation, financial, economic, regional power market, risk, and alternate fuels analyses, rate assessment, utility bankruptcy, utility debt and organizational restructures. =20 Major activities to be performed by the contractor include: =20 financial, economic, regional power market, and alternate=20 fuels analyses, (b) integrated financial models, forecasts and=20 risk assessments, (c) specialized and speedy ad hoc analyses during=20 the course of ongoing negotiations, (d) industry specific financial=20 and economic counsel, and (e) testimony for court proceedings and before state regulatory bodies and make presentations to outside organizations involved in ongoing negotiations. A detailed breakdown of the types of work that are required under task assignments is included in Attachment A. C.4. OBJECTIVES Five task orders entitled Kansas, Metlakatla, Cajun, Risk Management, and Contract Management will be issued under this new contract. The specific tasks to be performed under each task order shall be identified by FSS and work will be assigned to the contractor in the form of written task assignments. =20 Each task statement shall identify: Purpose of the task Description and parameters of the studies, =20 assessments, analyses required Schedule of Deliverables The contractor will be required to respond to unanticipated or unscheduled needs for work assignments under each task order under agreed upon turn-around bases. The contractor shall provide the necessary experienced personnel, materials, and facilities to fulfil the requirements in this statement of work. All products produced by the contractor under this contract shall become the property of the Government. =20 Tasks issued under this contract may include technical or advisory assistance at RUS headquarters as well as at locations outside of the Washington metro area, including borrower facilities, regulatory or U.S. Courts venues. C.5. STATEMENT OF WORK ? CONTRACTOR REQUIREMENTS The contractor shall have the capability to provide and perform analytical support, utilizing or developing the following types of models: Regulatory Economic Model, PTI Power Flow Model, Off-System Sales Contract Analysis Model, Transmission Cost Analysis Model, Surplus Sales Analysis Model, Tradelec Wholesale Price Forecasting Model, Policy Office Electricity Modeling System Integrated Energy Model, Interconnection Model, Production Cost Analysis Model, National Energy Modeling System, McGraw Hill Power Markets Week Price Index Database, Sparks Spread Model, Single Asset Model, Cost Comparison Database, Production Plant Database, Risk Measurement Model, Risk Management Database, Sunflower Integrated Model, Metlakatla Power Supply Forecast, financial models for KEPCO and Metlakatla, and regional power price forecasts for Sunflower, KEPCO, Metlakatla and Cajun.=20 The contractor shall have the capability to obtain and use other documented energy industry models as well as develop or modify other analytical tools or models to focus on required analyses. The contractor shall have the capability to provide spreadsheet and other reduced form versions of models and forecasts for use by the contractor and FSS in conducting evaluations, analyses, and negotiations. The contractor shall apply proven economic, statistical, financial, operations research, engineering and management techniques to solve problems and provide analyses as requested. The contractor shall have the ability to meet currently undefined analytical support and counsel requirements that might arise in these troubled borrower cases and risk management activities due to, for example, declaration of bankruptcy, state or federal electric industry deregulation, change in RUS policies or strategy, potential for debt restructuring (not initially contemplated), or court imposed requirements. =20 The contractor shall possess current up-to-date in-depth knowledge, from on-staff personnel, of the ongoing Sunflower, KEPCO, Metlakatla, and Cajun troubled borrower cases and the ongoing risk management activities. The contractor shall have the capability, using on-staff expertise, to provide expert financial and economic counsel to the FSS in the Sunflower, KEPCO, Metlakatla, Cajun troubled borrower cases, and the ongoing risk management activities. The contractor shall have the capability to make presentations of various financial/economic/regional power markets/alternate fuels analyses performed to borrower representatives, state and federal regulatory authorities, or in court proceedings. The contractor shall attend and participate, with the RUS, in meetings with borrower representatives, regulatory authorities, federal and state officials, other creditors, etc., and in FSS strategy sessions. The contractor shall have the capability, using on-staff expertise, to perform the following analytical support services for the FSS: C.5.1. Analysis and assessments for new Holcomb II coal-fired generating site on the following: regional market wholesale power prices need for capacity in electric reliability region potential value associated with a coal-fired generating station Valuation of coal-fired capacity development rights, additional costs and benefits associated with the construction and operation of additional capacity given planned transmission interconnections in the region economies of scale associated with the operation of a second unit,emission impacts of a second coal-fired unit and their implications on the environmental permitting and constraints on=20 the operation of the existing and new generating units implications of the second unit on improved reliability and associated reduced catastrophic exposure to a single event of risk alternative corporate structures and relationships between the owner-operator of the second unit=20 C.5.2. Analysis and assessment on the proposed Sunflower debt=20 restructuring and rate case:integrated financial and cash flow model economic efficacy of existing and anticipated nonmember sales agreements contributions of member and nonmember contracts to support debt service payments to RUS off-system sales opportunities into the regional wholesale market, utilizing alternative fuel price and economic scenarios bundled and unbundled rate making methodologies to accommodate RUS "B" Note recognition in rates viability of borrower generated rate cases, restructuring proposals, power sales and purchase contracts, financial models, and otherrelated items risk exposure in event of failure of one of the units adequacy of generation outage risk mitigation=20 C.5.3. Analysis and assessment of KEPCO power supply options regional wholesale power prices financial and cash flow model of KEPCO's system potential merger with neighboring systems and for new capacity economic trade-offs of alternative purchase power contracts viability of borrower generated rate cases, power sales and purchase contracts, financial models, and other related items rate impacts of alternative replacement power options C.5.4. Sunflower and KEPCO member system inspections. Tabulate, analyze and validate the template data collected to date Determine benchmarks and savings potentials that flow from efficiency improvements at the participating member systems Make assumptions and extrapolate savings to all member systems Brief FSS on benchmarks, savings potentials and extrapolated savings potentials for all member systems Conduct technical workshops with each of participating member systems on results of inspections and opportunities for efficiency improvements C.5.5. Analysis and assessment on the proposed Metlakatla debt=20 restructuring: financial and cash flow model of Metlakatla's operations rates and financial implications of loss of revenues from large power loads, debt/organizational restructures, impact of new rural development projects and initiatives, and alternative debt scenarios/sensitivities viability of borrower generated rate cases, restructuring proposals, power sales and purchase contracts, financial models, and other related items rate making methodologies for new and existing loads. C.5.6. Analysis and assessment of Metlakatla power supply=20 opportunities power requirements projections evaluation of Metlakatla's existing generation facilities Valuation of existing assets Identification of facilities which are critical to providing a source of reliable power on the island reasonable projection of capital additions, maintenance activities, O&M expenses to ensure reliable supply of power on the island opportunities to sell power into the Alaska mainland C.5.7. Analytical support and counsel for the Cajun related=20 RUS-Pennsylvania Electric Company lawsuit Update regional power price forecast Cost assessment of operating and maintenance expenses and capital addition costs of River Bend Nuclear Facility (River Bend)a. Valuation of River Bend b. Review of nuclear related filings and nuclear transactions in past 5 years c. Estimate potential damage from the breach of sales contract d. Review of all materials filed with the court and with all court orders e.Testifying in court proceedings f. Preparation of nterrogatories of witnesses g. Review of direct and rebuttal testimony h. Complying with subpoena and other document requests C.5.8. Support and counsel for the Cajun related RUS-Louisiana Public Service Commission litigation Review of direct and rebuttal testimony Preparation of interrogatories of witnesses Testifying in court proceedings Review of all materials filed with the court and with all court orders Complying with subpoena and other document requests C.5.9. Analytical support for RUS risk management function=20 Risk Mapping -- assess impacts of regulatory, legal, market based, financial and operational risks on RUS portfolio and borrowers: 10-year time series cross sectional database and systematic framework of electric and telephone borrowers (2) Key indices for monitoring and tracking singular and aggregate risk profiles. Queries to extract select data for ratio Analysis Detailed spreadsheet capability to allow risk measurement analysis of select data visual displays of risk profiles and trends in different dimensions. The financial exposure of generation & transmission borrowers (G&T's) to varying generating capacity forced outages. Develop survival index. White papers: Lessons learned regarding impact on G&T?s and distribution borrowers of state deregulation programs using Pennsylvania as a case study Identify scope and resources required for RUS to implement and monitor risk management capability in-house. Impact on RUS portfolio and its borrowers of systematic exposures to regulatory, market, legal, operational, and financial risks. Identify risks to RUS programs/borrowers, techniques to assess risks (quantitatively and qualitatively), and risk mitigation measures. =20

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Record

Loren Data Corp. 20010914/BSOL004.HTM (D-255 SN50X422)