Responsible Division: Vice President for Finance and Administration

Approving Official: Vice President for Finance and Administration

Effective Date: April 8, 2019

Last Revision Date: New Policy

1. INTRODUCTION
   1. This policy establishes procedures for administering guaranteed energy, water, and wastewater performance savings contracts.
2. POLICY
   1. This document describes the procedures for the administration of guaranteed energy, water, and wastewater performance savings Agreements, including selection of an energy performance contractor, delineation of feasibility analysis requirements, design and construction, performance guarantees, measurement and verification, payments, and Contract Amendments.
      1. SELECTION OF THE ENERGY PERFORMANCE CONTRACTOR (EPC)
         1. A guaranteed energy, water, and wastewater performance savings contractor shall be selected via the University’s authority granted in 287.057, F.S. to utilize a joint agreement previously entered into by the Florida Department of Management Services. The EPC shall be a person or business licensed pursuant to chapter 471, chapter 481, or chapter 489. The University shall evaluate the statements of qualifications and performance data of Energy Performance Contactors who hold current State Term Contracts and develop a list of no less than three providers for further evaluation. Team evaluation criteria may include: related experience of team personnel, past performance, minority business participation, current workload, special abilities relative to the proposed Project, business history, and other criteria as proposed by the University. The University shall rank the proposed teams and may require public presentations to demonstrate the teams’ qualifications, if necessary.
         2. Alternatively, the University may opt to competitively select an EPC utilizing procedures consistent with the University’s selection of a Design-Build team, Florida State University Policy 4-OP-B-12.
      2. DEVELOPMENT OF THE FEASIBILITY REPORT
         1. Upon selection, the Energy Performance Contractor shall develop a Feasibility Report for the Project. The Feasibility Report shall examine the potential development strategies for the Project and shall provide an assessment of the Project’s viability and a recommendation for how the Project may reduce the University’s use of energy, water, and wastewater. This report shall be performed by the EPC at no cost to the University. Abandonment of the project may occur, if the anticipated outcome fails to identify a viable Project.
      3. PROJECT DEVELOPMENT AGREEMENT
         1. If after receipt of the Feasibility Report the University elects to proceed with the development of the Project, the EPC shall submit a proposal which defines the scope, predicted savings, and funding strategy. This Agreement includes the proposed design and development costs to be paid directly to the EPC. The proposed fees shall be supported by back-up documentation sufficient to allow review and determination that all costs to be reimbursed to the EPC are reasonable. Payment of fees for Project Development may be delayed until the implementation phase.
         2. The Project Development Agreement shall be recommended by University Facilities, reviewed by University Counsel, and executed by the Vice President for Finance & Administration. At completion of the Project Development Agreement services, the EPC shall submit a report and other documents as necessary to provide:
            1. Final design including: savings calculations for energy, operational and deferred capital expense, other savings and a defined measurement and verification plan for the performance contract.
            2. Final cost data and all other project related costs that will be used in the performance contract on a not to exceed cost basis.
            3. A draft version of the Implementation Contract.
      4. DESIGN SERVICES
         1. All design services shall be performed by an appropriate professional consultant holding licensure in the State of Florida. The Energy Performance Contractor shall competitively select a design professional, or if the University agrees, design may be performed utilizing the EPC’s “in-house” personnel. The University shall review qualifications and concur with the selection of all design personnel.
      5. CONSTRUCTION SERVICES
         1. The Energy Performance Contractor may competitively select a Contractor, Construction Manager, Project Manager, or with the approval of the University, may elect to self-perform construction. Work eligible for self- performance includes: highly specialized services possessed by the EPC for which few competitors exist, general conditions, scope which is too small to attract sufficient interest, work deemed to constitute an emergency, or other conditions as approved by the University. All contractors and subcontractors shall be licensed to perform the respective trade. The University shall review the selection and concur with the selection of the contractor/subcontractors.
      6. COMMISSIONING SERVICES
         1. Commissioning services shall be performed by an authority independent of the design and construction personnel. The Commissioning Authority shall be a licensed engineer and possess industry standard commissioning credentials. The Commissioning Authority may be part of the EPC team or, if elected by the University, may be employed directly by the University.
      7. WORK PERFORMED BY EPC’S OWN FORCES
         1. All work to be performed by utilizing employees of the EPC shall comply with University requirements for self-performance and disclosure of interests.
      8. LIFE CYCLE COST ANALYSIS
         1. A life cycle cost analysis is required and shall evaluate the potential savings over a period not to exceed (20) years after the date of improvements installation. Proposed Performance Contract measures shall produce anticipated savings greater than the anticipated expenditures which would occur without the implementation of the Performance Contract measures.
      9. PREPARATION OF THE AGREEMENT/IMPLEMENTATION CONTRACT
         1. The Agreement is a lump sum agreement and shall be prepared by the Energy Performance Contractor in accordance with their previously negotiated Florida Department of Management Services term contract. It shall be specifically amended by University attachments appended to provide for University policy and practices. A clause shall be added stating that amendments made by the University shall supersede and take precedence over other Contract terms.
      10. GUARANTEED ENERGY, WATER, AND WASTEWATER PERFORMANCE SAVINGS
          1. The Contract for services shall comply with the terms of F.S. 489.145 and F.S. 1013.23, including terms for third-party financing. The Contract must include a provision stating that the EPC guarantees that annual energy cost savings will meet or exceed the amortized cost of energy conservation. The form of this guarantee may include: a letter of credit, an insurance policy, or corporate guarantee. Other forms of guarantee may be considered on an individual basis.
      11. RECOMMENDATION OF AWARD
          1. The University shall publish a Notice of Intent to Award a Guaranteed Energy, Water, and Wastewater Performance Savings Contract on the FSU Facilities website for a period of no less (72) hours prior to issuance of the Award.
      12. QUALITY CONTROL
          1. Design and installation of energy conservation measures and equipment shall be compliant with all applicable codes. Measures and materials shall comply with University Design Guidelines & Standards unless specifically waived in writing by the University Facilities Office.
      13. MEASUREMENT AND VERIFICATION
          1. Methods of measurement and verification of energy savings shall be reviewed and approved by FSU Facilities prior to contract execution. An annual report shall be submitted to the University indicating the measurement of energy use and validating that the savings have occurred. The Energy Performance Contractor shall be liable for any savings shortfall. Excess savings shall not be used to offset shortages in future years’ savings.
      14. PAYMENTS TO THE ENERGY PERFORMANCE CONTRACTOR
          1. Interim payments to the EPC for the cost of design and installation of energy conservation measures and equipment shall be submitted electronically in the University’s standard invoicing format. Submissions should include all information required to substantiate a lump sum payment and shall bear the signature of a company officer authorized to commit company resources. Payment terms shall be defined in the Project Development Agreement and Implementation Contract. The executed Contracts shall include a requirement for compliance with University policies and procedures for subcontractor payments, release of lien, and provisions for withholding of retainage.
      15. INSURANCE
          1. The Energy Performance Contractor shall provide a 100% public construction bond for performance as per F.S. 255.05. The EPC shall, also, provide other bonds and general liability insurance in accordance with University policies and Florida Statutes.
      16. FINANCING
          1. At the University’s discretion and in compliance with F.S. 1013.23 and/or 489.145, the University may elect to finance the cost of energy saving improvements for a period not to exceed (20) years post construction. (The construction period shall not exceed 2 years). Final review and authorization shall be by the Sr. Associate Vice President of Finance & Administration. The submittal for approval shall include:
             1. Savings guarantee in the Contract to the extent necessary to make annual payments required to satisfy the financing Contract.
             2. An investment grade audit, or equivalent, stating that the cost savings are appropriate and sufficient for the term of the Contract.
             3. Recommendation of approval by the Sr. Associate Vice President for Facilities.
      17. DIRECT PURCHASE OF EQUIPMENT AND CONSTRUCTION MATERIALS
          1. The EPC shall only include savings generated via the University’s direct purchase program if approved in advance by the FSU Project Manager. If incorporated, the EPC shall follow all University direct purchase procedures, including execution of off-site storage agreements and provision of insurance coverages.
      18. CHANGE ORDERS/AMENDMENTS
          1. For Contracts utilizing third party financing, changes or Amendments must remain within the guarantees and requirements of F.S. 1013.23 and 489.145.
      19. PROJECT COMPLETION AND ACCEPTANCE
          1. Project Substantial Completion shall not occur until the FSU Building Inspector has issued a Certificate of Occupancy, if required. The EPC shall submit as-builts, warranty, and operating data consistent with University requirements.
      20. LIQUIDATED DAMAGES
          1. Facilities Design & Construction shall include in the amendment a clause providing for assessment of liquidated damages should the EPC fail to complete the Work in a timely manner. Calculation of liquidated damages shall be according to FSU policy OP-B-11-E.
      21. WARRANTY
          1. The Contract should provide for all warranties to begin concurrently and extend for (12) months minimum beyond Substantial Completion.
      22. ANNUAL EVALUATION
          1. The work performance and professional services provided by the Energy Performance Contractor will be evaluated annually.
3. LEGAL SUPPORT, JUSTIFICATION, AND REVIEW OF THIS POLICY
   • Sections 1013.23, 489.145, 287.064