NC Dept. of Administration

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1 NC Dept. of Administration State Construction Office REQUEST FOR PROPOSAL FOR GUARANTEED ENERGY SAVINGS PERFORMANCE CONTRACTING January 8, 2016 RFP # 12328

2 REQUEST FOR PROPOSALS FOR NC Dept. of Administration, State Construction Office STATE OF NORTH CAROLINA GUARANTEED ENERGY SAVINGS PERFORMANCE CONTRACT TABLE OF CONTENTS Page PART 1 GENERAL INFORMATION 4 PART 2 PROPOSED PROJECT SCHEDULE 10 PART 3 EVALUATION PROCESS AND CRITERIA 11 PART 4 SUBMISSION OF PROPOSALS 12 SIGNATURE PAGE (to be first page of Proposal) 23 ATTACHMENT A PRELIMINARY ECM COST / SAVINGS MATRIX - Do not submit 24 with response ATTACHMENT B ESCO's PRELIMINARY COST PROPOSAL 25 (Using best rate ESCO can arrange) - Do not submit with response ATTACHMENT C PRELIMINARY ANNUAL CASH FLOW ANALYSIS 27 (Using ESCO s Rate) - Do not submit with response APPENDIX I FACILITIES TO BE ANALYZED 28 APPENDIX II MINIMUM INSURANCE REQUIREMENTS 42 APPENDIX III GUIDELINES FOR MINORITY BUSINESS PARTICIPATION 43 APPENDIX IV INVESTMENT GRADE AUDIT CONTRACT AND SCHEDULES 51 APPENDIX V GUARANTEED ENERGY SAVINGS CONTRACT 66 APPENDIX VI DESIGN REVIEW MATRIX 93 Performance Contract RFP 1/08/2016 Page 2

3 NC Dept. of Administration, State Construction Office STANDARD REQUEST FOR PROPOSAL GUARANTEED ENERGY SAVING PERFORMANCE CONTRACT 1. GENERAL INFORMATION 1.1. Issuing Office: This RFP is issued by NC Department of Administration, State Construction Office (hereinafter referred to as ISSUER ). The following Issuing Officer is the sole point of contact for this RFP: Robert L. Talley, PE Building Systems Engineer NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone robert.talley@doa.nc.gov 1.2. Purpose. This Request for Proposals (RFP) contains the information provided by ISSUER and requirements for Qualified Providers as defined in Chapter 143 Article 3B Part 2 of the General Statutes (hereinafter referred to as ESCO ) and submit to the ISSUER a Preliminary Technical Proposal for a guaranteed energy savings contract (referred to herein as the Guaranteed Energy Savings Contract ). The ESCO s response to this RFP (the Proposal ) must be based on the ESCO s assessment of the facilities selected by the ISSUER and listed in Appendix I. The ISSUER reserves the right to consider additional energy conservation measures as that term is defined in Chapter 143 Article 3B Part 2 of the General Statutes ( ECMs ) identified during the investment grade audit for evaluation and inclusion in the project. This RFP, including any amendments, contains the only instructions governing the proposals and material to be included therein; a description of the service to be provided by the successful applicant; general evaluation criteria; and other proposal requirements Mandatory pre-proposal meeting: A mandatory pre-proposal Meeting will be conducted by NC Dept. of Administration, State Construction Office on January 12, 2016, at the State Construction Office, Suite 450, 301 N Wilmington St, Raleigh, NC, at 2 PM. Any questions should be directed to Issuing Officer identified in 1.1. Proposals from ESCOs who fail to attend the pre-proposal meeting will receive no consideration. ALL PROPOSALS WILL BE RECEIVED and OPENED AND ANNOUNCED AT 2 pm February 11, 2016, in the State Construction Office, Suite 450, 301 N Wilmington St, Raleigh, NC. REQUIRED INFORMATION MUST BE SENT TO THE FOLLOWING ADDRESS: Robert L. Talley, PE NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Mark on the lower right corner of the submittal: RFP # Performance Contract RFP 1/08/2016 Page 3

4 1.4. Objective: The objective of the ISSUER in issuing this RFP is to maximize energy cost saving and related costs in order to pay for facility upgrades to the facilities listed in Appendix I and services that will be financed through a Guaranteed Energy Savings Contract at no cost to the ISSUER. The services may include but are not limited to: (1) A preliminary audit to be performed on the project sites identified in Appendix I in accordance with A, (2) The highest ranked qualified provider will prepare a cost benefit analysis conducted in accordance with Attachments A, B and C on the measures identified in the preliminary audit, (3) An investment grade audit to be conducted on all project sites to identify appropriate ECMs, (4) The design, acquisition, installation, modification, commissioning and maintenance of the ECMs, (5) The training of staff in the operation of existing equipment and new ECMs, (6) Energy and operational cost savings, such as fuel switching, demand reductions, on-site generation, utility bill auditing, utility rate changes, distribution upgrades. Any stipulated energy and/or operational cost savings that may be attributed to this project will be rigorously reviewed and, if agreed to, will be limited to those that can be thoroughly documented and approved by the ISSUER. No Guaranteed Energy Savings Contract shall exceed 20 years in duration from the date of the installation and acceptance of the project, as defined in B, and must comply with all other applicable statutes, regulations, and procurement laws. Proposals for this RFP shall not exceed the term stated in section 1.7. The cost savings achieved by the installed ECMs must be sufficient to cover all project costs including maintenance and monitoring fees on an annual basis for the duration of the term of the Guaranteed Energy Savings Performance Contract. The ESCO must guarantee sufficient energy savings, as defined in , to enable the ISSUER to meet its payment obligations to the ESCO and the entity financing the Guaranteed Energy Savings Performance Contract. ESCOs will be required to guarantee energy savings on an annual basis. No credit for the achievement of energy savings above and beyond the annual guarantee will be credited to satisfy performance guarantees in other years of the contract. Annual reconciliation of the achieved energy savings will be required Security Requirements: The Office of State Treasurer has determined that the following general types of security for the guaranteed energy savings would be acceptable, however specific instruments of security as part of a financing contract for energy conservation measures will need to be approved by the Office of the State Treasurer as per N.C.G.S B.(c) for each guaranteed energy savings performance contract. These general types are: A corporate guarantee by the ESCO provided that the ESCO has a long-term investment grade corporate rating from one or more of the national credit rating agencies. Currently, this would be a minimum rating of BBB from Standard and Poor s, Baa from Moody s Investors Service, or BBB from Fitch Ratings A corporate guarantee from the parent company of an ESCO which is owned as a subsidiary of the parent. The parent company would be required to maintain a long-term investment grade rating from one or more of the national credit rating agencies (see above.) Performance Contract RFP 1/08/2016 Page 4

5 An irrevocable letter of credit from a financial institution which covers the entire term of the contract, without need of renewal A surety bond which covers the entire term of the contract, without need of renewal Financing by the ESCO in which the ESCO provides all financing required for the entire term of the contract. Financing may only be transferred or assigned to the extent that energy savings are realized, and State property may not be encumbered in any form as part of the financing. All forms of security would be required to be in place at the initiation of the guaranteed energy savings performance contract covering (100%) of the guaranteed energy savings for the term of the guaranteed energy savings performance contract. In the case of corporate guarantees, should the guarantor s credit rating drop below long-term investment grade, the guarantor is required to inform the governmental unit, the Division of Environmental Assistance and Customer Service Utility Savings Initiative (USI), and the Local Government Commission (LGC) within 30 days and replace the corporate guarantee with one of the other forms of security acceptable to Office of the State Treasurer Description of the Procurement Process: The process for the procurement of these guaranteed energy savings services will proceed as follows: Solicitation of proposals. The ISSUER will issue a request for proposals that is open to all ESCOs who have been prequalified by USI. Notice of the request must be published at least 15 days in advance of the time specified for opening of the proposals in at least one newspaper of general circulation in the geographic area in which the facility or facilities are located. In addition, the ISSUER will place a notice regarding the solicitation on the USI home page with instructions on how to obtain the solicitation. If only one proposal from an ESCO is received, then the ISSUER shall re-issue this RFP unless this is the second release at which time a single response may be accepted Opening of proposals. Proposals are to be opened in accordance with the instructions in Section 1.3. All proposals received by the specified time will be opened by a member or employee of the ISSUER at a public opening who will announce the name of the ESCO submitting the Proposal and verify the execution of the signature page by the ESCO. Unsigned proposals will be rejected Evaluation of proposals. Responding ESCOs shall conduct a preliminary audit of the facilities listed in Appendix I. This preliminary audit will form the basis of the ESCOs written Preliminary Proposal. The Proposals must be in substantial conformity with Part 4 (Submission of Proposals) and other conditions set forth in the RFP. The ISSUER will evaluate or cause its designated representatives to evaluate the ESCOs Preliminary Proposals. The proposal shall be evaluated by a Qualified Reviewer as defined in Chapter 143 Article 3B Part 2 of the General Statutes ( Qualified Reviewer ). The Qualified Reviewer may be selected from the ISSUER s staff or a third-party engineer or architect may be engaged by the ISSUER. The evaluation shall be based on the criteria listed in Part 3 of this RFP. The Qualified Reviewer shall also review Attachments A, B, and C to determine if project scope, costs and savings are achievable. Performance Contract RFP 1/08/2016 Page 5

6 Client reference checks. The ISSUER shall review and evaluate the ESCO client references provided in the Proposal in accordance with the evaluation criteria identified in Part Shortlist. The ISSUER shall shortlist ESCOs on the basis of the rankings of evaluating the written proposal and the client references using the criteria in Part Oral interview. Each shortlisted ESCO may be required to participate in an oral interview. The purpose of this session is to clarify specific aspects of the technical proposal and to answer questions posed by the evaluation team. These oral interviews may be recorded. ESCO responses given in the oral interview will be part of the overall evaluation, but the ESCO will not be allowed to vary the written Proposal or improve the competitive position of the ESCO Selection of ESCO to develop the project. The ISSUER shall have the highest ranked ESCO prepare Attachments A, B, and C for the proposed contract. Only the energy conservation measures identified in Part 4 Section 5.1 of the proposal may be included in the attachments. The ISSUER may require that the ESCO competitively bid any of the products or contractors required to implement the project. Copies of all such bids shall be sent to the ISSUER. If the ISSUER and ESCO cannot negotiate acceptable terms, pricing, savings estimates, and percentages the ISSUER or ESCO may terminate the process at which time the ISSUER may begin negotiations with the second highest ranked ESCO. Once the second highest ranked ESCO is engaged the ISSUER may not return to the highest ranked ESCO. The ISSUER S Qualified Reviewer, shall also review Attachments A, B, and C to determine if project scope, costs and savings are reasonable and achievable. USI shall review the selected ESCO's proposal, all Attachments, and other relevant documents prior to the ISSUER announcing the award. The ISSUER shall provide published notice of the time and place of the meeting at which it proposes to award the contract, the names of the parties to the proposed contract, and the contract's purpose. This announcement shall be published 15 days prior to award or meeting The ISSUER shall notify all responders of the ranking results Type of Contracts: The successful applicant will be required to enter into an Investment Grade Audit Contract (IGAC) that substantially conforms to the IGAC located in Appendix V. Where the ISSUER elects to enter into a Guaranteed Energy Savings Performance Contract after the ESCO performs an IGA, the ESCO will be required to enter into such contract in substantially the same form to that located in Appendix VI. The preferred term of the Guaranteed Energy Savings Contract shall be for a maximum of Eight (8) years from the date of acceptance of the project, as defined in B. During the Investment Grade Audit the ISSUER reserves the right to adjust the term based on final cost and interest rate. The ISSUER shall own all installed equipment which shall be free and clear of all liens and encumbrances upon transfer of ownership to the ISSUER Rejection of Proposals: The ISSUER reserves the right to reject any and all proposals received. If the ISSUER decides to terminate this process the ISSUER shall notify all responders of such decision within 30 days. Performance Contract RFP 1/08/2016 Page 6

7 1.9. Incurring Costs: The ISSUER is not liable for any cost or expenses incurred by ESCOs in the preparation of their Proposals or for attendance at any conferences and meetings related to this RFP Amendments to the RFP: If it becomes necessary to revise any part of this RFP, an addendum will be issued to all ESCOs who attended the mandatory pre-proposal meeting. If any ESCO has questions prior to opening the proposal, those questions must be submitted and answered in writing in accordance with the schedule listed in Part 2. A copy of all questions and answers submitted will be sent to all ESCOs that attended the mandatory pre-proposal meeting Error / Clarification: When a proposal contains an obvious error or otherwise where an error is suspected, the circumstances may be investigated and then may be considered and acted upon. Any action taken shall not prejudice the rights of the public or other offering companies. Where offers are submitted substantially in accordance with this RFP but are not entirely clear as to the intent or to some particular fact where there are other ambiguities, clarification may be sought and accepted Restriction of Contact: From the date this RFP is issued until a determination is made regarding the final selection of an ESCO for the Project, all contacts with the ISSUER concerning this RFP shall be made in writing through the Issuing Officer, identified in Part 1.1, only Debriefing: As a courtesy, the ISSUER will notify in writing ESCOs who are not awarded within a reasonable period following the ISSUER s selection of an ESCO pursuant to this RFP. The ESCO may request a debriefing with the ISSUER at this time which shall be granted in a reasonable time Proposals: To be considered, Proposals must include responses to all requests for information in this RFP. Proposals must be straightforward, concise presentations without extraneous material. Font size may be no smaller than 10 point. The ESCO shall make no other use of the proposal. An official authorized to bind the ESCO must sign the proposal. The proposal shall constitute a valid firm offer for 90 days after the opening of proposals submitted pursuant to this RFP. The contents of the proposal of the selected ESCO will become part of the ESCO s contractual obligations to the extent that the proposal does not conflict with provisions of this RFP Site Visits: The Issuing Officer or his or her designated representative will arrange inspection tours of the buildings to be audited. Site representatives will be available to escort ESCOs and their representatives through the facilities. Questions arising out of these tours shall be submitted in writing to the Issuing Officer. Technical information supplemental to material contained in this RFP will be made available for review and inspection onsite. Only ESCOs who were represented at the pre-bid are eligible to participate in these site visits Late Offers, Modifications or Withdrawals: No late offer, late modification, or late withdrawal shall be considered unless received before Opening Date, and the offer, modification, or withdrawal would have been timely but for the action or inaction of one of the ISSUER s employees or agents. The ESCO shall bear the sole responsibility of Performance Contract RFP 1/08/2016 Page 7

8 having its proposal delivered on time, regardless of the mode of delivery used, including the U.S. Postal Service or any other delivery services available. The time allowed for the acceptance of offers may be extended by the ISSUER Minority Business Participation: In accordance with N.C.G.S , State agencies and universities have adopted a policy to achieve verifiable goals of participation by minority businesses in each renovation project. A copy of guidelines is included in Appendix IV. All applicants shall comply with the policy and guidelines ESCO Responsibility: The selected ESCO will be required to assume total responsibility for all services and/or equipment offered in the Proposal. The selected ESCO is responsible for obtaining all applicable permits, reviews and meeting all licensing requirements. The selected ESCO will be considered the Prime Contractor and the sole point of contact with regard to the Project Payment and Performance Bond: The selected ESCO shall be required to provide construction payment and performance bonds in conformance with NCGS 44-A, Article 3 and in the amount of 100% of the total financed project cost as shown on Attachment B. The ESCO s proposal must include the form of two payment and performance security instruments as follows: 1.) The first security instrument, a payment and construction performance bond, is to be conditioned for the faithful performance and fulfillment of the installation of the Energy Conservation Measures and which shall be valid until the completion of the installation work, with construction approved by the ISSUER and accepted on behalf of the State 2.) The second security instrument shall be a written guarantee, which will be contained in the contract, which states that the annual energy or operational costs savings will meet or exceed the total cost of the contract, including (without limitation) financing, installed equipment costs, contract security instruments required by the Office of State Treasurer, an annual fee for a third party engineer, and measurement and verification for the entire length of the contract period. This security instrument must be in a form and amount acceptable to the Office of State Treasurer as listed in Part References and Proprietary Information: Submission of a Proposal grants permission to the ISSUER to make inquiries concerning the respondent and its officers to any persons or firms deemed appropriate by ISSUER. Any proprietary information will be treated as provided for in N.C. Public Records Act. Data or information so identified will be used by the ISSUER solely for the purpose of evaluation and contract negotiations North Carolina Products: Where quality and availability allow, specifications shall be based on products manufactured by and services provided by North Carolina businesses. This special interest in North Carolina products is intended to encourage and promote their use, but shall not be exercised to the exclusion of other products or to prevent fair and open competition Proposal Funding: The Treasurer may reject any potential contract if the actual cost of financing has exceeded the estimated cost of financing when the contract is submitted to the Office of the Treasurer for approval. The ESCO receiving the contract award shall Performance Contract RFP 1/08/2016 Page 8

9 submit a total contract cost option and cash flow analysis based on ESCO or third party financing at best available rate. This is the basis for Attachment B and Attachment C Annual Reconciliation: The energy savings shall be monitored and reported on in accordance with the measurement and verification plan created in the IGA commencing with the date of the Certification of Final Acceptance to be signed by the ISSUER. The reconciliation report is due no more than 60 days from the anniversary of the Certification of Final Acceptance. In the event that the actual savings are less than the guaranteed savings, the ESCO shall provide cash reconciliation of the difference within thirty (30) calendar days of written demand by the ISSUER. A surplus in any one year shall not be carried forward or applied to a shortfall in any other year Independent Consulting Engineer: The ISSUER may engage an independent thirdparty professional engineer or architect licensed in North Carolina experienced in the design, installation, and implementation of energy efficiency measures and who shall act as the ISSUER s representative. This professional shall provide services in the review of the IGA and annual reconciliation report. The ESCO shall include an annual cost of 1.5% of annual savings for the third party consulting engineer or architect to review the reconciliation report. This cost shall be financed and paid from the savings for the contract life. Performance Contract RFP 1/08/2016 Page 9

10 2. ANTICIPATED PROJECT SCHEDULE NC Dept. of Administration, State Construction Office Activity Date Issue RFP and have posted on USI website January 8, 2016 Mandatory pre-proposal meeting January 12, 2016 Site Visits (to be arranged) January 18-21, 2016 Questions due January 27, 2016 Answers distributed February 1, 2016 Proposals Due February 11, 2016 Proposals Reviewed, Evaluated and Ranked February 26, 2016 Oral Interviews and selection of ESCO State Building Commission Approval To Be Determined (TBD) TBD Highest ranked ESCO completes Attachments A, B and C TBD Advertise award per section IGAC Negotiated IGA Conducted Owner and USI IGA review Release Financial RFP Financial RFP Due Contract Preparation and review State Building Commission approval Financial RFP and contract Treasurer & LGC approval Council of State approval Contract Presented and Signed TBD TBD TBD TBD TBD TBD TBD TBD TBD Performance Contract RFP 1/08/2016 Page 10

11 3. EVALUATION PROCESS AND CRITERIA Each proposal will be reviewed for completeness and scored pursuant to the evaluation criteria as described in this section Completeness. Responses will be initially evaluated based on the completeness and quality of the information provided in Part 4, ESCO Proposal: Sections 1 through 19, and when requested Attachment A ECM matrices, Attachment B preliminary cost proposal, Attachment C preliminary cash flow analysis. A Proposal will be considered complete if all requested sections are included in the proper order and properly completed. An incomplete Proposal may be disqualified Evaluation Criteria. The ISSUER will utilize the following criteria in its evaluation of proposals: Proposal and ESCO Appraisal Criterion Point Value Clarity, organization, and level of detail in written proposal 4 Substantial conformity with RFP requirements 5 ECMs included meet ISSUER s expectations as expressed in Appendix I 8 Qualifications of proposed project staff to be assigned 5 General reputation, experience, reliability, working relationship and performance capability 10 of the ESCO Proposed training meets ISSUER s requirements 3 Total: 35 Technical Approach Criterion Point Value ESCO identified additional ECMs not referenced in this RFP 3 Quality of ECMs in response 10 Quality of proposed project delivery approach 10 Implementation schedule achievable 5 Quality of proposed project-specific Commissioning Approach 5 Quality of proposed project-specific Maintenance Approach 5 Quality of proposed project-specific Measurement and Verification Approach 5 Understanding of customer s operation, and challenges 7 Additional benefits to ISSUER identified in proposal 5 Quality of approach to use Local Contractors 10 Performance Contract RFP 1/08/2016 Page 11

12 Quality of approach to encourage HUB Contractor Participation 10 Total: 75 Oral Interview Criterion Point Value Quality of communication skill exhibited by ESCO representatives 5 Demonstrated clear understanding of the ISSUER s needs 5 Answered questions in concise manner staying on topic 5 Presenters were knowledgeable and professional 5 Appropriate project specific employees participated in interview 5 Total: 25 Grand Total: Review of RFP Responses The ISSUER, or their designees, will evaluate each Proposal to this RFP pursuant to criteria listed in section 3.2 above. The evaluators will grade the Proposals on their merit and responsiveness to the needs of the ISSUER. Responses will be evaluated in light of the material and substantiating evidence presented in the Proposal. The evaluation process may include verification of references, confirmation of financial information, and may also include interviews, site visits, or other information as directed by the ISSUER. In accordance with A sections (c) and (c1) the Proposals shall be evaluated by a Qualified Reviewer (to be designated by the ISSUER). The cost of this architect or engineer may be included in the total cost of the contract Final Selection and Notification The ISSUER shall have USI and the qualified reviewer review the selected ESCO's proposal, cost-benefit analysis, and other relevant documents after which the ISSUER shall announce the award. The ISSUER reserves the right to reject any and all proposals received and is not required to furnish a statement of the reason why a particular proposal was not deemed to be the most advantageous. The ISSUER will reasonably notify each responder of the successful ESCO. 4. SUBMISSION OF PROPOSALS 4.1. Form of Proposal. All Proposals shall be submitted on 8 ½ x 11" sheets of paper (unless specifically exempted from this requirement below) that are numbered sequentially by section (example: 1-1) and use labeled tabs to separate sections. Font size must be no smaller than 10 point, utilizing the front and back of pages. Applicants must also include a Table of Contents that indicates the section and page numbers corresponding to the information included. The Applicant must submit to the ISSUER one original, two hard copies and one electronic copy. When requested by the ISSUER Attachments A, B, and C will be submitted electronically in MS Excel format. Performance Contract RFP 1/08/2016 Page 12

13 4.2. Content of Proposal. Each Applicant is required to complete all sections listed below. Section 1: Company Profile and History. The ESCO shall comply with proper contractor licensing requirements to perform construction if selected. Indicate on page one of this section the license under which work will be performed. Include an actual template of the form of security to be provided. The security must be one of the five forms accepted by the Department of State Treasurer (see Part 1.5). (2 page limit double sided the security template may be additional pages) Section 2: Project Summary (2 page limit double-sided) ESCO may include an anticipated percent energy unit reduction (not dollars) for the buildings in Appendix I. Section 3: Project Team including resumes Name of Project Team Member: Current Job Title: Job responsibilities: Number of years with ESCO: Primary Office Location: Employment History Company Name: Primary job responsibilities: Number of years with firm: Educational Background List all academic degrees, certifications, licenses, professional affiliations, relevant publications and technical training. List all energy performance contracting projects this individual has been involved with during past 5 years. Include project location, type of facilities, year implemented and dollar value of installed project costs. Describe the specific role and responsibilities this individual had for each listed project. Provide a detailed description of the role and responsibilities this individual will have for the duration of this project. Describe any other relevant technical experience. Indicate the total years of relevant energyrelated experience for this individual. Section 4: Existing Conditions. Performance Contract RFP 1/08/2016 Page 13

14 ECM ID Section 5: Energy Conservation Measures. Performance Contract RFP 1/08/2016 Section 5.1: ECMs included in Proposal (limit to one double sided page for each measure). For each ECM provide data in following format: ECMs specified in this section shall be included when completing Attachments A, B and C Building or Utility System ID IPMVP protocol typically used for this type measure Assumptions Brief narrative including product recommendations (place all product specification sheets in separate binder) Section 5.2: ECMs identified but to be investigated during the IGA. Section 5.3: ECMs Considered but not included. Be sure to state reason for rejection. Section 5.4: Details of work that will be performed outside of the United States. Section 6: Operational Savings: ISSUER labor savings may be considered in cost savings only if an occupied position is eliminated as a result of the Project. Operational and maintenance savings will have to be substantiated through invoices showing the expenses claimed are real. Include the number of years savings will be realized. Section 7: Project Commissioning Approach. Provide general outline for this project. Section 8: Project M&V Approach, provide general outline. Any guaranteed energy and operational savings shall be determined by using one of the measurement and verification methodologies listed in the United States Department of Energy's "Measurement and Verification Guideline for Energy Savings Performance Contracting," the "International Performance Measurement and Verification Protocol," or "ASHRAE " If due to existing data limitations or the nonconformance of specific project characteristics, none of the measurement and verification methodologies listed above is sufficient for measuring guaranteed savings, the ESCO shall develop an alternate method that is compatible with one of the three and mutually agreeable with the ISSUER. Section 9: Project Maintenance Approach for proposed equipment. The plan should describe how ECMs will be maintained over the duration of the contract period. The plan should identify who is responsible for maintaining Page 14

15 and repairing equipment installed. In particular it should address how building automation or other electronic systems will be kept updated and current. Section 10: Hazardous Material Handling Approach - describe your firm s plans for the disposal and recycling of any equipment or materials removed from the premises as part of an ECM. Be sure to include proper tracking of hazardous materials such as lamps and ballasts. Section 11: Implementation Approach and Schedule - provide proposed implementation schedule with milestones. The 8 ½ x 11" sheet size limitation does not apply to this section. Section 12: ISSUER Training - describe your approach to training both during implementation and during guarantee period. Provide details on number of participants expected, topics and location for training. Section 13: Project Financing - provide your proposed approach to project financing and assistance. Section 14: Other Project Impacts - provide information on positive and/or negative impacts that the installation of recommended ECMs may have on air quality emissions, waste reduction, health, occupant comfort or other items not specifically requested. This can refer to non-tangible benefits such as improvements to the learning environment, teaching opportunities, green building considerations, greenhouse gas reductions, anti-drought measures Section 15: Open Book Pricing - describe your firm s approach and experience in providing open-book pricing. The ESCO will fully disclose all costs, including all costs of subcontractors and sub-tier vendors. The ESCO will maintain cost accounting records on authorized work performed showing actual costs for labor and materials, or other basis requiring accounting records. The ESCO will provide access to records and preserve them for a minimum of three years and if any federal funds are used to support the Contract, for five years. The retention period runs from the date of payment for the relevant goods or services by the ISSUER or from the date of termination of the Contract, whichever is later. Retention time shall be extended when an audit is scheduled or in progress for a period reasonably necessary to complete an audit and/or to complete any litigation in any forum which may arise. Section 16: References using the forms included, list at least 3 energy performance contracting projects in repayment by and currently under contract with your firm. Limit your Proposal to ONLY those projects that have been managed directly by the specific branch, division, office or any individual in such branch, division or office who will be specifically assigned to this project. Attach additional sheets as necessary. Please put an asterisk by any project references involving buildings similar to the building(s) described in Appendix I. Make sure all contact information is current. All information requested is required. Performance Contract RFP 1/08/2016 Page 15

16 Project Table: Project Name and Location; Number of Buildings; Primary Use; Total square footage Project Dollar Amount (installed project costs); Source of Project Financing Primary ECMs Installed; ESCO Services Provided Construction Start & End Dates Contract Start & End Dates Dollar Value and Type of Annual Operational Cost Savings (if applicable) (e.g., outside maintenance contracts, material savings, etc.) Method(s) of Savings Measurement and Verification Provide CURRENT and ACCURATE telephone and address orfax numbers of the owner(s) representatives with whom your firm did business on this project. You should ensure that all representatives are familiar with this project. Describe the specific roles and responsibilities of ESCO personnel associated with the identified project. Limit your Proposal to only those personnel who will be directly involved in Customer s project. ESCO Notes or Comments Performance Contract RFP 1/08/2016 Page 16

17 Annual Energy Savings Data Form (Energy Units) Name of Project: Name of ESCO: Projected Guaranteed Achieved Comments Year 1 Year 2 Year 3 Year 4 Year 5 KWH KW Demand Nat Gas Therms Water(Gallons) Other (Specify) Other (Specify) Information for each of the headings listed above MUST be completed using the above format. DO NOT provide savings data in terms of BTU s or dollars. Data should be given in the form of fuel units which appear in the utility bills. Additional forms should be reproduced as needed.

18 Annual Energy Savings Data Form (Energy Dollars) Projected Guaranteed Achieved Comments Year 1 Year 2 Year 3 Year 4 Year 5 KWH KW Demand Nat Gas Therms Water(Gallons) Other (Specify) Other (Specify) Information for each of the headings listed above MUST be completed using the above format. Provide savings data in terms of dollars for the units saved. Additional forms should be reproduced as needed. Performance Contract RFP 1/08/2016 Page 18

19 Section 17: Submit SEC Form 10-K for the two most recent years in this section. If Form 10-K is not filed then submit the ESCO s two most recent years audited financial statements. This section may be submitted in electronic form only. Section 18: Risk responsibility matrix: 1. Financial 1. RESPONSIBILITY/DESCRIPTION ESCO PROPOSED APPROACH a. Interest rates: Neither the ESCO nor the ISSUER has significant control over prevailing interest rates. During all phases of the project, interest rates will change with market conditions. Higher interest rates will increase project cost, financing/project term, or both. Please state your approach to mitigate fluctuating interest rates. b. Energy prices: Clarify how future energy costs will be treated. c. Construction costs: If, during construction, costs may overrun the fixed budget explain how the project will be brought back on target with the approved budget and cash flow. d. M & V costs: The ISSUER assumes the financial responsibility for M & V costs directly or through the Contractor. Explain the relationship between M&V cost and savings accuracy calculations. e. Delays: Both the Contractor and the ISSUER may cause delays. Failure to implement a viable project in a timely manner costs the ISSUER in the form of lost savings, and can add cost to the project (e.g. construction interest, remobilization). Clarify schedule and how delays will be handled. f. Major changes in facility: Major changes in facility use, including closure may occur during the term of the contract. Clarify responsibilities in the event of a premature facility closure, loss of funding, or other major change. 2. Operational

20 a. Operating hours: The ISSUER generally has control over operating hours. Increases and decreases in operating hours can show up as increases or decreases in savings depending on the M&V method (e.g., operating hours multiplied by improved efficiency of equipment vs. wholebuilding/utility bill analysis). Clarify whether operating hours are to be measured or stipulated and what the impact will be if they change. If the operating hours are stipulated, the baseline should be carefully documented and agreed to by both parties. b. Load: Equipment loads can change over time. The ISSUER generally has control over hours of operation, conditioned floor area, intensity of use (e.g. changes in occupancy or level of automation). Changes in load can show up as increases or decreases in savings depending on the M & V method. Clarify whether equipment loads are to be measured or stipulated and what the impact will be if they change. If the equipment loads are stipulated, the baseline should be carefully documented and agreed to by both parties. c. Weather: A number of energy efficiency measures are affected by weather. Neither the Contractor nor the ISSUER has control over the weather. Changes in weather can increase or decrease savings depending on the M&V method (e.g. equipment run hours multiplied by efficiency improvement vs. whole-building/utility bill analysis). If weather is normalized, actual savings could be less than payments for a given year, but will average out over the long run. Clearly specify how weather corrections will be performed. d. User participation: Many energy conservation measures require user participation to generate savings (e.g., control settings). The savings can be variable and the Contractor may be unwilling to invest in these measures. Clarify what degree of user participation is needed and utilize monitoring and training to mitigate risk. If performance is stipulated, document and review assumptions carefully and consider M&V to confirm the capacity to save (e.g., confirm that the controls are functioning properly). 3. Performance Performance Contract RFP 1/08/2016 Page 20

21 a. Equipment performance: Generally the Contractor is responsible for proper installation, commissioning, and performance of equipment. Generally the Contractor has responsibility to demonstrate that the new improvements meet expected performance levels including specified equipment capacity, standards of service, and efficiency. Clarify who is responsible for initial and long-term performance, how it will be verified, and what will be done if performance does not meet expectations. b. Operations: Responsibility for operations is negotiable, and it can impact performance. Clarify responsibility for operations, the implications of equipment control, how changes in operating procedures will be handled, and how proper operations will be assured. c. Preventive Maintenance: Responsibility for maintenance is negotiable, and it can impact performance. Clarify how long-term preventive maintenance will be assured, especially if the party responsible for long-term performance is not responsible for maintenance (e.g., Contractor provides maintenance checklist and reporting frequency). Clarify who is responsible for long-term preventive maintenance to maintain operational performance throughout the Contract term. Clarify what will be done if inadequate preventive maintenance impacts performance. d. Equipment Repair and Replacement: Responsibility for repair and replacement of Contractor-installed equipment is negotiable; however it is often tied to project performance. Clarify who is responsible for replacement of failed components or equipment throughout the term of the Contract. Specifically address potential impacts on performance due to equipment failure. Specify expected equipment life and warranties for all installed equipment. Discuss replacement responsibility when equipment life is shorter than the term of the Contract. Performance Contract RFP 1/08/2016 Page 21

22 Section 19: Utilize section 19 in proposal to place attachments: A, B and C. Instructions: Only the highest ranked ESCO shall complete this part when requested by the ISSUER Only measures documented in Part 4 Section 5.1 may be included in the attachments All measures included in Part 4 Section 5.1 must be included in the attachments The time allowed for preparation of the attachments shall be negotiated based on the scope of work presented in Part 4 Section 5.1 The terms negotiated within the attachments shall form the basis for the IGA and final project pricing The cost and availability of all equipment, materials, and supplies associated with the performing of the services described herein have been determined and included in the proposed cost. All labor costs, direct and indirect, have been determined and included in the proposed cost. Performance Contract RFP 1/08/2016 Page 22

23 PROPOSAL SIGNATURE PAGE (this page should be the first page of the proposal) By submitting this proposal, the Applicant certifies the following: This proposal is signed by an authorized representative of the firm. It can obtain the bonds and insurance certificates as required. The Applicant has attended the mandatory Pre-Proposal Meeting and is aware of prevailing conditions associated with performing these services. The potential ESCO has read and understands the conditions set forth in this RFP and agrees to them with no exceptions. The applicant has read, understands, and response complies with all revisions. All information provided in this application has been gathered based on diligent inquiry and is true, accurate, and complete in all respects, and does not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained herein not materially misleading, to its best knowledge and belief. Therefore, in compliance with this Request for Proposals, and subject to all conditions set forth herein, the undersigned offers and agrees. ESCO: ADDRESS: CITY, STATE, ZIP: TELEPHONE NUMBER: FAX: FEDERAL EMPLOYER INDENTIFICATION NUMBER: Principal Place of Business if different from above: Will any of the work under this contract be performed outside of the United States? Yes No (If yes, describe in Part 4.2 Section 5.3) BY: TITLE: DATE: (Signature) (Typed or printed name) Performance Contract RFP 1/08/2016 Page 23

24 ATTACHMENT A Preliminary ECM Cost / Annual Savings Matrix ECM Description Bldg. 1 ID Bldg. 2 ID Bldg. 3 ID TOTALS Cost Savings Cost Savings Cost Savings Cost Savings Lighting 25,000 5,000 55,000 12,000 15,000 3,500 SUM SUM Lighting controls 49,000 7, ,000 6,000 SUM SUM AHU VFDs TOTALS SUM SUM Values in dollars = ECM included in project Cell Blank = ECM not included for that building Note: The purpose of this Matrix is to summarize the project by ECM by building. The above is a sample. Please add columns and rows as necessary to include all buildings and measures addressed in Part 5. The 8 ½ x 11" sheet size does not apply to this Attachment. As in Part 4 Section 5; the Cost includes: Labor Costs, Subcontractor Costs, Cost of Materials and Equipment and Related Items. It does NOT include ESCO overhead, mark-up, or profit. The sum of all costs shall equal the Estimated Project Cost in Attachment B. Electronic copy should be in EXCEL spreadsheet form. Enter zero amount for ECM s not performed. To be completed only at the request of the ISSUER after all written responses have been evaluated and ranked Performance Contract RFP 1/08/2016 Page 24

25 ATTACHMENT B ESCO s Preliminary Cost Proposal (see form next page) Attachment B is available in Excel format. To be completed only at the request of the ISSUER after all written responses have been evaluated and ranked Performance Contract RFP 1/08/2016 Page 25

26 ESCO'S COST PROPOSAL AGENCY NAME: Department XYZ BANK QUOTED INTEREST RATE: 2.400% ESCO NAME: ESCO ABC TOTAL PROJECT COST: $43 TOTAL FINANCED COST: $48 TOTAL GUARANTEED FIRST YEAR SAVINGS: $8 % of Total Project Costs Financed Costs Other Costs Paid from Savings (not financed) Other Benefits to Owner and Notes Project Cost Breakdown Total ECM material & labor and subcontracts 46.51% $20 Investment Grade Audit 4.65% $2 Engineering and Design 4.65% $2 General Conditions 4.65% $2 Contractor's Insurance (i.e. performance bond) 4.65% $2 Project Management 4.65% $2 Commissioning 4.65% $2 First Year Training Fees 4.65% $2 M&V set-up 4.65% $2 Cost of Guarantee Security Instrument 4.65% $2 Overhead (cost of running the business) 4.65% $2 ESCO net profit 4.65% $2 [Other Contractor Costs - list specifics] 2.33% $1 Subtotal A (equals Schedule A Total) $43 Other costs Bond Council Fees $3 Loan Issuance Fees $3 Third Party Engineering Fees $3 Paid by XYZ Subtotal B (financed) $6 Subtotal C (not financed) $3 Adjustments to Project Costs Rebates, incentives, grants) (Will be negative number) $ (3) Other Subtotal D -$3 Construction Period Interest $2 Dollar ($) Value of Annual Service Fees % of First Year's Savings 1st Year Service Fees Measurement and Verification (ESCO) 0.20% $1 Third Party review of reconciliation report 0.20% $1 Maintenance 0.20% $1 Equipment Performance Monitoring 0.20% $1 Yearly Training Services 0.20% $1 Subtotal E $5 Summaries Project Cost = Subtotal A Total Financed Costs = Subtotals A+B+D+ possibly Const. Period Int. Costs Covered by Energy Savings = Subtotals A+B+C+D+E+ possibly Const Period Interest. If construction period interest is capitalized in loan, this will be zero. Owners payments made to ESCO = Subtotals A+D $43 $48 $56 $40 1 Other fees must be explained 2 Source of incentives must be explained Performance Contract RFP 1/08/2016 Page 26

27 ATTACHMENT C ESCO's PRELIMINARY ANNUAL CASH FLOW ANALYSIS USING ESCO S PROPOSED INTEREST RATE Financed Amount: Escalation Rate by Utility/Fuel Finance Term: Electric: 0.0% Annual Interest Rate: Natural Gas: 0.0% Construction Months Steam: 0.0% Annual Payment Water: 0.0% Principal other (specify): 0.0% Interest Escalation Rate for Annual Fees: 0.0% Yr. Calculated Electric Dollar Savings Calculated Natural Gas Dollar Savings Other Calculated purchased fuel Dollar Savings Calculated Water Dollar Savings Other Please Specify Calculated Operational Dollar Savings Total Calculated Dollar Savings Guaranteed Dollar Savings ( a ) Annual Service Fees ( b ) Financing Cost (P&I) ( c ) Net Savings = a-b-c To be completed only at the request of the ISSUER after all written responses have been evaluated and ranked Total NOTES: Net savings must never be negative. A surplus in one year cannot be carried forward to create positive cash flow in a subsequent year. Electronic copy should be in EXCEL spreadsheet form. See page 24.

28 APPENDIX I FACILITIES TO BE ANALYZED This project includes fourteen facilities as listed below and detailed on the following information sheets. Administration Building Agriculture Building Agriculture Annex Building Archives and History Building (State Library) Bath Building Caswell Building Cooper Memorial Building Old Education Building Old Health Building Old Revenue Building Parking Deck 65 Parking Deck 76 Parking Deck 64 State Record Building For all facilities in this project the work shall be performed after normal working hours. Normal working hour schedules are provided in the information sheets for each facility. All electrical work shall be designed and installed in accordance with the State Construction Office Electrical Guidelines and the NC Electrical Code. Due to security concerns the original construction drawings and asbestos reports will be available to the successful bidder. The owner is willing to include the use of load shedding technology under the Duke Energy Progress load shed program to obtain savings from buildings that have generators. The intent of this project is to replace the existing T12 lamps in the building listed with more energy efficient products. The existing T8 lamps are not required to be replaced. It will be up to the Project Design team to find the most cost effective method for implementing the changes necessary to remove the T12 lamps. Please to: leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone

29 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 116 W. Jones St. Raleigh Building Name: Administration Building Total Floors: 7 Building Age: 48 - Built in: 1967 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: varies Phone: Building Type: Business Offices and conference rooms Building Total Square Footage: sq. ft. Additions/Renovations: Describe Renovations: Building had electrical panels replaced in 2012 Operating Schedule: Daily: 15 hours a day Weekend: No Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. No work above the ceiling is allowed. There is a time clock on the lighting circuits in this building. The lights turn on at 6 am and turn off at 9 pm Monday through Friday. Lights are turned on after hours and weekends by an override hall switch. The owner is willing to include the use of load shedding technology under the Duke Energy Progress load shed program to obtain savings. Special Needs or Circumstances Sprayed asbestos containing fireproofing was used to protect the building and will impact access above the ceilings in most areas of the facility. Asbestos reports are available. Please to : leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 29

30 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 2 W. Edenton St. Raleigh Building Name: Agriculture Building Total Floors: 6 Building Age: _91 - Built in: 1924 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Tim Pendergrass Phone: Building Type: Business Offices and Conference rooms Building Total Square Footage: sq. ft. Additions/Renovations: The Agriculture Annex was attached Describe Renovations: Total renovation 1979, Windows were replaced in recent years Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is not on a time clock. SCO believes the lights are ON during normal Business hours from 6 am to 7 pm Monday thru Friday 5 days a week and as needed on weekends. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 30

31 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 102 N. Salisbury St. Raleigh Building Name: Agriculture Annex Total Floors: 7 Building Age: 61 - Built in: _1954 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Todd Wahler Phone: Building Type: Business Offices and Conference rooms Building Total Square Footage: sq. ft. Additions/Renovations: Building is attached to the Agriculture Building Describe Renovations: Windows were replaced in recent years Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: (included with Agriculture building) Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is not on a time clock. SCO believes the light are ON during normal Business hours from 6AM to 7Pm Monday thru Friday 5 days a week and as needed on weekends. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 31

32 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 109 E. Jones St. Raleigh Building Name: Archives and History (State Library) Total Floors: 6 Building Age: 46 - Built in: 1969 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Rick White Phone: Building Type: Business Offices, library and stack storage Building Total Square Footage: sq. ft. Additions/Renovations: Building was modified with State Records was Built Describe Renovations: Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is not on a time clock. SCO believes the lights are ON during normal Business hours from 6AM to 7Pm Monday thru Friday 5 days a week and on an as needed basis after normal hours. Special Needs or Circumstances Contractor will only be allowed to access the facility with a staff escort due to security concerns. Please to : Appendix 1 RFP 1/08/2016 leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Page 32

33 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 306 N. Wilmington St. Raleigh Building Name: Bath Building Total Floors: 5 Building Age: 41 - Built in: _1974 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Ricky Taylor Phone: Building Type: Business offices and lab space Building Total Square Footage: sq. ft. Additions/Renovations: Describe Renovations: Some area were renovated as flex space in Lights were replaced on floors 1, 2 and 3 during the renovation. Operating Schedule: Daily: 15 hours a day Weekend: No lights Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is on a time clock. The lights are ON during normal Business hours from 6 am to 7 pm Monday thru Friday 5 days a week. Lights are turned on after hours and weekends by an override hall switch. The owner is willing to include the use of load shedding to obtain savings. Special Needs or Circumstances Formerly used as the State Health Lab the upper floors of the facility are now used for storage. Asbestos containing fireproofing was used during construction and reports are available. Please to : Appendix 1 RFP 1/08/2016 leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Page 33

34 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 200 W. Jones St. Raleigh Building Name: Caswell Building Total Floors: 6 Building Age: 76 - Built in: 1939 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Milton Tart Phone: Building Type: Business Offices and conference rooms Building Total Square Footage: sq. ft. Additions/Renovations: 3 rd floor received HVAC renovation in 2015 Describe Renovations: Many ceilings were upgraded in 2015 Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is not on a time clock. The lights should be ON during normal Business hours from 6 am to 7 pm Monday thru Friday 5 days a week and as needed on weekends. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 34

35 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 225 N. McDowell ST. Raleigh Building Name: Cooper Memorial Building Total Floors: 6 Building Age: 61 - Built in: 1954 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Brenda Horne Phone: Building Type: Business Offices and conference rooms Building Total Square Footage: sq. ft. Additions/Renovations: Electrical wiring and panels were replaced recently Describe Renovations: Corridors and lobbies were renovated. HVAC is being renovated Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: Yes Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is not on a time clock. SCO believes the lights are ON during normal Business hours from 6AM to 7Pm Monday thru Friday 5 days a week and as needed otherwise. Special Needs or Circumstances Asbestos survey was performed and reports are available. Please to : leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 35

36 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 114 W. Edenton St. Raleigh Building Name: Old Education Building Total Floors: 7 Building Age: 77 - Built in: 1938 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Scarlett Hargis Phone: Building Type: Business Offices and conference rooms Building Total Square Footage: sq. ft. Additions/Renovations: Describe Renovations: some of the lighting has been renovated by recent projects Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that has T12 lamps. The lighting in this building is not on a time clock. SCO believes the light are ON during normal Business hours from 6AM to 7Pm Monday thru Friday 5 days a week and as needed otherwise. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 36

37 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 216 W. Jones St. Raleigh Building Name: Old Health Building Total Floors: 3 Building Age: Built in: 1898 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Gloria Johnson Phone: Building Type: Business Offices and Conference rooms Building Total Square Footage: sq. ft. Additions/Renovations: Elevator and restroom wings appear to have been added Describe Renovations: On going renovations to modify HVAC system and 3 rd floor Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: No Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is not on a time clock. SCO believes the light are ON during normal Business hours from 6AM to 7Pm Monday thru Friday 5 days a week and as needed otherwise. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 37

38 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 2 South Salisbury St. Raleigh Building Name: Old Revenue Building Total Floors: 7 Building Age: 88 - Built in: _1927 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Gina Bell Phone: Building Type: Business Offices, conference rooms and mail processing Building Total Square Footage: sq. ft. Additions/Renovations: Describe Renovations: Recent projects have renovated the fire alarm and HVAC systems Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: Yes Gas Meter for Building: No Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is not on a time clock. SCO believes the lights are ON during normal Business hours from 6 am to 7 pm Monday thru Friday 5 days a week and as needed otherwise. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 38

39 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 430 North Salisbury ST. Raleigh Building Name: Parking Deck 65 Total Floors: 2 Building Age: 41 - Built in: _1974 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Ricky Taylor Phone: Building Type: Parking Deck Building Total Square Footage: 323,000 sq. ft. Additions/Renovations: lighting was replaced with fluorescent in recent years Operating Schedule: Daily: 19 hours a day Weekend: 19 hours a day Electric Meter for Building: No fed from multiple buildings Gas Meter for Building: No Water Meter for Building: No served by Dobbs system Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract The lighting in Deck 65 is on from 5AM to 12 Midnight 7 days a week. Investigate the replacement of the fans and controls with more energy efficiency equipment. CO monitoring is required to be part of the control system. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 39

40 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: Building Name: Parking Deck 76 Total Floors: 5 Building Age: 26 - Built in: 1989 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Ricky Taylor Phone: Building Type: Parking deck Building Total Square Footage: 306,000 sq. ft. Additions/Renovations: Describe Renovations: Operating Schedule: Daily: 19 hours a day Weekend: 19 hours a day Electric Meter for Building: Yes Gas Meter for Building: Yes Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate the upgrade of the existing lighting from HID to a more energy efficient fixture with a water proof housing. The lights in Deck 76 are on from 5 am to 12 Midnight seven days a week. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 40

41 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: Building Name: Parking Deck 64 Total Floors: NA Building Age: 39 - Built in: 1976 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Ricky Taylor Phone: Building Type: Parking deck Building Total Square Footage: 191,760 sq. ft. Additions/Renovations: Describe Renovations: Operating Schedule: Daily: 19 hours a day Weekend: 19 hours a day Electric Meter for Building: Yes Gas Meter for Building: Yes Water Meter for Building: Yes Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate the replacement of the 16 fixture poles and fixtures located on the top of the deck for replacement with hinged poles and energy efficient fixtures and water proof housings. The lights in Deck 64 are on from 5 am to 12 Midnight seven days a week. Not Applicable Please to : Special Needs or Circumstances leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 41

42 FACILITIES TO BE ANALYZED Date: September 1, 2015 Name of Agency or University: NC Department of Administration Division: State Construction Office Department: Design and Construction Office Contact Person _Robert Talley, PE Title Electrical Engineer Phone Fax Address of Building or Complex: 215 N. Blount St. Raleigh Building Name: State Records Building Total Floors: 4 Building Age: 40 - Built in: 1975 Addition: - Age: Number of Buildings: 1 Building Operator: Ricky Taylor Phone: Building Engineer: Robert Talley Phone: Building Manager: Chris Denning Phone: Building Type: Business Offices and stack storage Building Total Square Footage: sq. ft. Additions/Renovations: Describe Renovations. Operating Schedule: Daily: 13 hours a day Weekend: 12 hours Electric Meter for Building: yes shared with Archives and History Building Gas Meter for Building: No Water Meter for Building: shared with Archives and History Steam Meter for Building: No Chilled Water Meter for Building: No Issues to be Addressed by Performance Contract Investigate upgrade of existing lighting system that uses T12 lamps. The lighting in this building is not on a time clock. SCO believes the lights are ON during normal Business hours from 6AM to 7Pm Monday thru Friday 5 days a week and as needed otherwise. Special Needs or Circumstances Sprayed asbestos fireproofing on the structure of the building is an issue and may impact the work on the fixtures mounted to the structure. Asbestos survey reports are available. Contractor will only be allowed to access the facility with a staff escort due to security concerns. Please to : leo.mckeithan@doa.nc.gov Leo C McKeithan Engineering Technician NC DOA / State Construction Office 1307 Mail Service Center Raleigh, NC Phone Appendix 1 RFP 1/08/2016 Page 42

43 APPENDIX II MINIMUM INSURANCE REQUIREMENTS The work under this contract shall not commence until the contractor has obtained all required insurance and verifying certificates of insurance have been approved in writing by the owner. These certificates shall document that coverages afforded under the policies will not be cancelled, reduced in amount or coverages eliminated until at least thirty (30) days after mailing written notice, by certified mail, return receipt requested, to the insured and the owner of such alteration or cancellation. If endorsements are needed to comply with the notification or other requirements of this article copies of the endorsements shall be submitted with the certificates. a. Worker s Compensation and Employer's Liability The contractor shall provide and maintain, until final acceptance, workmen's compensation insurance, as required by law, as well as employer's liability coverage with minimum limits of $100,000. b. Public Liability and Property Damage The contractor shall provide and maintain, until final acceptance, comprehensive general liability insurance, including coverage for premises operations, independent contractors, completed operations, products and contractual exposures, as shall protect such contractors from claims arising out of any bodily injury, including accidental death, as well as from claims for property damages which may arise from operations under this contract, whether such operations be by the contractor or by any subcontractor, or by anyone directly or indirectly employed by either of them and the minimum limits of such insurance shall be as follows: Bodily Injury: $500,000 per occurrence Property Damage: $100,000 per occurrence / $300,000 aggregate In lieu of limits listed above, a $500,000 combined single limit shall satisfy both conditions. Such coverage for completed operations must be maintained for at least two (2) years following final acceptance of the work performed under the contract. c. Property Insurance (Builder s Risk/Installation Floater) The contractor shall purchase and maintain property insurance until final acceptance, upon the entire work at the site to the full insurable value thereof. This insurance shall include the interests of the owner, the contractor, the subcontractors and sub-subcontractors in the work and shall insure against the perils of fire, wind, rain, flood, extended coverage, and vandalism and malicious mischief. If the owner is damaged by failure of the contractor to purchase or maintain such insurance, then the contractor shall bear all reasonable costs properly attributable thereto; the contractor shall effect and maintain similar property insurance on portions of the work stored off the site when request for payment per articles so includes such portions. d. Deductible Any deductible, if applicable to loss covered by insurance provided, is to be borne by the contractor. e. Other Insurance The contractor shall obtain such additional insurance as may be required by the owner or by the General Statutes of North Carolina including motor vehicle insurance, in amounts not less than the statutory limits. f. Proof of Carriage The contractor shall furnish the owner with satisfactory proof of carriage of the insurance required before written approval is granted by the owner. Appendix II RFP 1/08/2016 Page 43

44 APPENDIX III MINORITY BUSINESS PARTICIPATION GS establishes a ten percent (10%) goal for participation by minority businesses in total value of work for each State building project. The document, Guidelines for Recruitment and Selection of Minority Businesses for Participation in State Construction Contracts including Affidavits and Appendix E are hereby incorporated into and made a part of this contract

45 Appendix III RFP 1/08/2016 Page 45

46 Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Identification of HUB Certified/ Minority Business Participation I,, (Name of Bidder) do hereby certify that on this project, we will use the following HUB Certified/ minority business as construction subcontractors, vendors, suppliers or providers of professional services. Firm Name, Address and Phone # Work Type *Minority **HUB Category Certified (Y/N) *Minority categories: Black, African American (B), Hispanic (H), Asian American (A) American Indian (I), Female (F) Socially and Economically Disadvantaged (D) ** HUB Certification with the state HUB Office required to be counted toward state participation goals. The total value of minority business contracting will be ($). MBForms 2002-Revised July 2010

47 Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid State of North Carolina AFFIDAVIT A Listing of Good Faith Efforts County of Affidavit of (Name of Bidder) I have made a good faith effort to comply under the following areas checked: Bidders must earn at least 50 points from the good faith efforts listed for their bid to be considered responsive. (1 NC Administrative Code 30 I.0101) 1 (10 pts) Contacted minority businesses that reasonably could have been expected to submit a quote and that were known to the contractor, or available on State or local government maintained lists, at least 10 days before the bid date and notified them of the nature and scope of the work to be performed. 2 --(10 pts) Made the construction plans, specifications and requirements available for review by prospective minority businesses, or providing these documents to them at least 10 days before the bids are due. 3 (15 pts) Broken down or combined elements of work into economically feasible units to facilitate minority participation. 4 (10 pts) Worked with minority trade, community, or contractor organizations identified by the Office of Historically Underutilized Businesses and included in the bid documents that provide assistance in recruitment of minority businesses. 5 (10 pts) Attended prebid meetings scheduled by the public owner. 6 (20 pts) Provided assistance in getting required bonding or insurance or provided alternatives to bonding or insurance for subcontractors. 7 (15 pts) Negotiated in good faith with interested minority businesses and did not reject them as unqualified without sound reasons based on their capabilities. Any rejection of a minority business based on lack of qualification should have the reasons documented in writing. 8 (25 pts) Provided assistance to an otherwise qualified minority business in need of equipment, loan capital, lines of credit, or joint pay agreements to secure loans, supplies, or letters of credit, including waiving credit that is ordinarily required. Assisted minority businesses in obtaining the same unit pricing with the bidder's suppliers in order to help minority businesses in establishing credit. 9 (20 pts) Negotiated joint venture and partnership arrangements with minority businesses in order to increase opportunities for minority business participation on a public construction or repair project when possible (20 pts) Provided quick pay agreements and policies to enable minority contractors and suppliers to meet cash-flow demands. The undersigned, if apparent low bidder, will enter into a formal agreement with the firms listed in the Identification of Minority Business Participation schedule conditional upon scope of contract to be executed with the Owner. Substitution of contractors must be in accordance with GS (d) Failure to abide by this statutory provision will constitute a breach of the contract. The undersigned hereby certifies that he or she has read the terms of the minority business commitment and is authorized to bind the bidder to the commitment herein set forth. Date: Name of Authorized Officer: Signature: Title: SEAL State of, County of Subscribed and sworn to before me this day of 20 Notary Public My commission expires MBForms 2002-Revised July 2010

48 Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid Attach to Bid State of North Carolina --AFFIDAVIT B-- Intent to Perform Contract with Own Workforce. County of Affidavit of (Name of Bidder) I hereby certify that it is our intent to perform 100% of the work required for the (Name of Project) contract. In making this certification, the Bidder states that the Bidder does not customarily subcontract elements of this type project, and normally performs and has the capability to perform and will perform all elements of the work on this project with his/her own current work forces; and The Bidder agrees to provide any additional information or documentation requested by the owner in support of the above statement. The Bidder agrees to make a Good Faith Effort to utilize minority suppliers where possible. The undersigned hereby certifies that he or she has read this certification and is authorized to bind the Bidder to the commitments herein contained. Date: Name of Authorized Officer: Signature: Title: SEAL State of, County of Subscribed and sworn to before me this day of 20 Notary Public My commission expires MBForms 2002-Revised July 2010

49 Do not submit with bid Do not submit with bid Do not submit with bid Do not submit with bid State of North Carolina - AFFIDAVIT C - Portion of the Work to be Performed by HUB Certified/Minority Businesses County of (Note this form is to be submitted only by the apparent lowest responsible, responsive bidder.) If the portion of the work to be executed by HUB certified/minority businesses as defined in GS (g) and 128.4(a),(b),(e) is equal to or greater than 10% of the bidders total contract price, then the bidder must complete this affidavit. This affidavit shall be provided by the apparent lowest responsible, responsive bidder within 72 hours after notification of being low bidder. Affidavit of (Name of Bidder) I do hereby certify that on the (Project Name) Project ID# Amount of Bid $ I will expend a minimum of % of the total dollar amount of the contract with minority business enterprises. Minority businesses will be employed as construction subcontractors, vendors, suppliers or providers of professional services. Such work will be subcontracted to the following firms listed below. Attach additional sheets if required Name and Phone Number Dollar Value *Minority Category **HUB Certified Y/N Work Description *Minority categories: Black, African American (B), Hispanic (H), Asian American (A) American Indian (I), Female (F) Socially and Economically Disadvantaged (D) ** HUB Certification with the state HUB Office required to be counted toward state participation goals. Pursuant to GS (d), the undersigned will enter into a formal agreement with Minority Firms for work listed in this schedule conditional upon execution of a contract with the Owner. Failure to fulfill this commitment may constitute a breach of the contract. The undersigned hereby certifies that he or she has read the terms of this commitment and is authorized to bind the bidder to the commitment herein set forth. Date: Name of Authorized Officer: Signature: SEAL State of Title:, County of Subscribed and sworn to before me this day of 20 Notary Public My commission expires MBForms 2002-Revised July 2010

50 State of North Carolina AFFIDAVIT D Good Faith Efforts County of (Note this form is to be submitted only by the apparent lowest responsible, responsive bidder.) If the goal of 10% participation by HUB Certified/ minority business is not achieved, the Bidder shall provide the following documentation to the Owner of his good faith efforts: Affidavit of (Name of Bidder) I do hereby certify that on the (Project Name) Project ID# Amount of Bid $ I will expend a minimum of % of the total dollar amount of the contract with HUB certified/ minority business enterprises. Minority businesses will be employed as construction subcontractors, vendors, suppliers or providers of professional services. Such work will be subcontracted to the following firms listed below. (Attach additional sheets if required) Name and Phone Number *Minority Category **HUB Certified Y/N Work Description Dollar Value *Minority categories: Black, African American (B), Hispanic (H), Asian American (A) American Indian (I), Female (F) Socially and Economically Disadvantaged (D) ** HUB Certification with the state HUB Office required to be counted toward state participation goals. Examples of documentation that may be required to demonstrate the Bidder's good faith efforts to meet the goals set forth in these provisions include, but are not necessarily limited to, the following: A. Copies of solicitations for quotes to at least three (3) minority business firms from the source list provided by the State for each subcontract to be let under this contract (if 3 or more firms are shown on the source list). Each solicitation shall contain a specific description of the work to be subcontracted, location where bid documents can be reviewed, representative of the Prime Bidder to contact, and location, date and time when quotes must be received. B. Copies of quotes or responses received from each firm responding to the solicitation. C. A telephone log of follow-up calls to each firm sent a solicitation. D. For subcontracts where a minority business firm is not considered the lowest responsible sub-bidder, copies of quotes received from all firms submitting quotes for that particular subcontract. E. Documentation of any contacts or correspondence to minority business, community, or contractor organizations in an attempt to meet the goal. F. Copy of pre-bid roster G. Letter documenting efforts to provide assistance in obtaining required bonding or insurance for minority business. H. Letter detailing reasons for rejection of minority business due to lack of qualification. I. Letter documenting proposed assistance offered to minority business in need of equipment, loan capital, lines of credit, or joint pay agreements to secure loans, supplies, or letter of credit, including waiving credit that is ordinarily required. Failure to provide the documentation as listed in these provisions may result in rejection of the bid and award to the next lowest responsible and responsive bidder. Pursuant to GS (d), the undersigned will enter into a formal agreement with Minority Firms for work listed in this schedule conditional upon execution of a contract with the Owner. Failure to fulfill this commitment may constitute a breach of the contract.

51 Do not submit with bid Do not submit with bid Do not submit with bid Do not submit with bid The undersigned hereby certifies that he or she has read the terms of this commitment and is authorized to bind the bidder to the commitment herein set forth. Date: Name of Authorized Officer: Signature: Title: SEAL State of, County of Subscribed and sworn to before me this day of 20 Notary Public My commission expires MBForms 2002-Revised July 2010

52 APPENDIX IV IGA

53 IGA 9/29/2015 STATE OF NORTH CAROLINA GUARANTEED ENERGY PERFORMANCE CONTRACTING PROGRAM INVESTMENT GRADE ENERGY AUDIT AGREEMENT This Energy Audit Agreement is entered into on, 20, by and between the Insert name of Governmental Unit (herein after called the Issuer ) and (the Energy Service Company herein after called the "ESCO"). Issuer and the ESCO are referred to herein as the "Parties". WHEREAS, the Issuer has issued a Request For Proposals ( RFP ) to select a Qualified ESCO for a guaranteed energy savings contract; and WHEREAS, the ESCO submitted a response to the RFP and participated in a competitive evaluation procedure designed to select a Qualified ESCO; and WHEREAS, the Issuer has accepted the ESCO s proposal, selected the ESCO to complete the project; and WHEREAS, the Issuer is responsible for the operation, payment of the utilities, management and maintenance of the buildings and/or facilities as identified in the RFP, Appendix I (collectively referred to herein as Buildings ); and WHEREAS, a comprehensive energy use and savings analysis (the "Investment Grade Energy Audit") is required to be performed for the Buildings in order to verify the feasibility of entering into a Guaranteed Energy Savings Performance Contract to provide for the installation and implementation of energy conservation measures (ECMs) at the Buildings; and WHEREAS, if the ECMs are verified to be feasible, and if the amount of energy savings can be reasonably ascertained and guaranteed in an amount sufficient to cover all costs associated with an energy performance contracting project at the Buildings, the Parties have contracted to negotiate a final Energy Services Agreement (ESA) under which the ESCO shall design, procure, implement, provide training, commission, offer maintenance services, monitor such energy conservation measures at the Buildings; NOW THEREFORE, the Parties agree as follows: ARTICLE 1 SCOPE OF INVESTMENT GRADE ENERGY AUDIT Pursuant to G.S B The ESCO will perform the Investment Grade Energy Audit and prepare a detailed engineering and economic report (herein after called the "Report") which specifically identifies the energy improvements and operational changes which are recommended to be installed or implemented at the Buildings. The Report shall contain detailed projections of energy and cost savings to be obtained at the Buildings as a result of the installation of the recommended energy conservation measures (ECMs). The savings calculations must utilize assumptions, projections and baselines which best represent the true value of future energy or operational savings for the Buildings, including accurate marginal cost for each unit of savings at the time the audit is performed; documented material and labor costs that may be actually avoided; adjustments to the baseline to reflect current conditions at the Buildings, compared to the historic base period; calculations which account for the interactive effects of the recommended ECMs; etc. The Report shall clearly describe how utility tariffs were used to calculate savings for all ECMs. The Page 53

54 Report shall describe in detail the ESCO s plan for installing or implementing the measures in the Buildings, including all anticipated costs associated with such installation and implementation. The ESCO s required tasks in performing the Energy Audit and preparing the Report are the following: A. Scope of Work Include RFP response ECMs in this section. ECMs detailed in the RFP shall provide the scope of work for the IGA. Include below any additional potential ECMs either the ESCO or ISSUER wish to include for investigation during the IGA. Additional ECMs to be investigated: B. Collect General Information For Each Building (This information is to be included in Schedule A of the Report). The ESCO shall collect detailed building information such as: size, age, construction type, condition and general use of each building except as provided below. The ESCO shall also collect and summarize building utility cost and consumption data for the most recent 36-month period. If after reasonable inquiry, the ESCO can demonstrate that less than 36 months of data is available, the ESCO with the written approval of the Issuer may collect such data as is available, but in any event not less than 24 months of data. The ESCO shall evaluate the impact on utility cost and consumption for any energy measures currently being installed or currently contemplated to be installed by the Issuer in the building which will remain separate from the Energy Services Agreement throughout the duration of the ESA. The Issuer shall furnish, or cause its energy suppliers to furnish, all available records and data concerning energy and water usage for the building for the most current 36 month period, if available, including but not necessarily limited to, utility records, occupancy information, descriptions of any changes in the structure of the building or its heating, cooling, lighting or other systems or energy requirements, descriptions of all major energy and water consuming or energy and water saving equipment used in the Facility, and description of energy management procedures presently utilized. The Issuer shall also furnish a record of any energy related improvements or modifications that have been installed during the past 3 years, or are currently being installed or are currently contemplated to be installed by Issuer in the Building separate from the ESA throughout the duration of that agreement. Issuer shall also provide copies of drawings, equipment logs and maintenance work orders to the ESCO insofar as this information is readily available. The Issuer shall make available any FCAP, IES, or other survey reports available for that building. C. Inventory Existing Systems and Equipment. (This information is to be included in Schedule A of the Report) The ESCO shall compile an inventory based on a physical inspection of the major electrical and mechanical systems at the building, that will be impacted by the ECMs to be included in the project including: i. Cooling systems and related equipment ii. Heating and heat distribution systems iii. Automatic temperature control systems and equipment iv. Air distribution systems and equipment v. Outdoor ventilation systems and equipment vi. Kitchen and associated dining room equipment, if applicable vii. Exhaust systems and equipment IGA 9/29/2015 Page 54

55 viii. Hot water systems ix. Electric motors 5 HP and above, transmission and drive systems x. Interior and exterior lighting xi. Laundry equipment, if applicable xii. Water consumption end uses, such as restroom fixtures, water fountains, irrigation, etc. xiii. Other applicable energy using systems identified in the RFP or during the performance of this audit. The inventory shall address the following considerations: 1. The loads, proper sizing, efficiencies or hours of operation for each system (Where measurement costs, facility operating or climatic conditions necessitate, engineering estimates may be used, but for large fluctuating loads with high potential savings, appropriate measurements are required unless waived by the Issuer). 2. Current operating condition for each system. 3. Remaining useful life of each system, identifying or describing the method used to determine that remaining useful life. 4. Feasible replacement systems. 5. Hazardous materials and other environmental concerns. The ESCO shall use data loggers and/or other measurement and recording devices and conduct interviews with building operation and maintenance staff regarding the building s system operation, occupancy patterns and problems with comfort levels or equipment reliability. D. Establish Base Year Consumption and Reconcile with End Use Consumption Estimates. (This information is to be included in Schedule C of the Report) The ESCO shall examine the most recent 36 months of utility bills except as previously noted in Article 1 Section A and establish Base Year consumption for electricity, fossil fuels and water by averaging; or selecting the most representative contiguous 12 months. The ESCO shall consult with building staff and account for any unusual or anomalous utility bills which may skew Base Year consumption from a reasonable representation. The ESCO shall estimate loading, usage and/or hours of operation for all major end uses representing more than 5% in aggregate of total Facility consumption including, but not limited to: IGA 9/29/2015 i. Water ii. Lighting iii. Heating iv. Cooling v. HVAC motors (fans and pumps) vi. Plug load vii. Kitchen equipment viii. Other equipment ix. Miscellaneous Page 55

56 Where loading or usage is highly uncertain the ESCO shall employ spot measurement and/or short term monitoring at its discretion, or at the request of Issuer. Reasonable applications of measurement typically include variable loads that are likely candidates for conservation measures, such as cooling equipment. The annual end use estimated consumption shall be reconciled with the annual Base Year consumption to within 5% for electricity (kwh), fossil fuels and water. The contribution to electric peak demand for each end use shall also be reconciled to within 5% of the annual Base Year peak. The miscellaneous category shall not be more than 10% and each component shall be separately set forth. The purpose of this is to place reasonable limits on potential savings. E. Develop List of Potential Energy Conservation Measures (ECMs). (The information generated from this list should be included in Vol. 2) The ESCO shall: 1. Identify and propose potential ECMs for installation or implementation at the building including cut sheets on proposed equipment. For non-standard ECMs provide information regarding product site installations. 2. Provide an estimate of the cost, savings and life expectancy of each proposed ECM. Prepare a Life Cycle Cost Analysis in accordance with State Construction Office guidelines as directed by the Issuer. 3. Specify operations and maintenance procedures of the building which will be affected by the installation/implementation of the proposed ECMs. 4. Provide analysis methodology, supporting calculations and assumptions used to derive baselines (e.g. lighting operating hours) and estimate savings. Provide the existing and proposed air and hot water temperatures, volume of outdoor air ventilation (CFMs) lighting and acoustic levels. Provide copies of the utility tariffs and commodity price histories used in savings calculations. Manual calculations should disclose essential data, assumptions, formulas, etc. so that a reviewer may replicate the calculations based on the data provided. 5. For savings estimates using computer simulations, the ESCO shall provide access to the program and all inputs and assumptions used, if requested by the Issuer. 6. Provide a preliminary savings Measurement and Verification plan for each proposed ECM. 7. Provide a detailed preliminary commissioning plan for the proposed ECMs. 8. Provide detailed calculations for any rate saving proposals. 9. Provide detailed supporting calculations for any proposed maintenance, material or other operational savings. Describe annual variances in savings from year to year (e.g. lighting, warranties). 10. Estimate any environmental costs or benefits of the proposed ECMs (e.g. disposal costs, avoided emissions, water conservation, etc.). Provide emissions reductions data for NOX, CO2 and SO2. Segment emissions data for direct site emissions reductions (e.g. fossil fuels) and indirect emissions reduction data (e.g. electricity/water). IGA 9/29/2015 Page 56

57 11. For all proposed ECMs, the ESCO shall comply with all applicable State, Federal and local codes and regulations in effect at the time of this analysis. This list shall be compiled and submitted to the Issuer within ninety (90) days of the execution of this Agreement. F. Select Final Recommended ECMs. The ESCO shall, in consultation with the Issuer, recommend specific ECMs from its preliminary compilation for installation and implementation at the Building and or Facility. G. Cost and Fee Estimates. (This information is to be included in Schedule E of the Report) The ESCO shall provide detailed estimates of costs associated with the installation, implementation and commissioning of each of the ECMs proposed in the Audit including breakouts for labor, materials, and equipment. Open book pricing is required. ESCO will fully disclose all costs, including all costs of subcontractors and sub-tier vendors. The ESCO will maintain cost accounting records on authorized work performed showing actual costs for labor and materials, or other basis requiring accounting records. The ESCO will provide access to records and preserve them for a minimum of six years. The retention period runs from the date of payment for the relevant goods or services by the Issuer or from the date of termination of the Contract, whichever is later. Retention time shall be extended when an audit is scheduled or in progress for a period reasonably necessary to complete an audit and/or to complete any administrative and judicial litigation which may ensue. In addition, project cost data must be provided in the format included in Schedule O of the Report ESCO Cost Proposal and Cash Flow Analysis. The ESCO shall also provide estimates of monthly costs associated with sustaining the project performance including breakouts for maintenance fees, monitoring fees, and training fees. H. Savings Estimates. I. (This information is to be included in Schedule E of the Report) The Issuer has endeavored to provide the ESCO with sufficient general and specific guidance in this Article 1 to develop the savings estimates for the Report. In the event that questions arise as to the calculation of savings or whether certain items will be allowed as savings, the ESCO should seek written guidance from the Issuer. The Issuer reserves the right to reject items claimed as savings which are not in the Issuer s utility budget line or which have been claimed contrary to the guidance given in this Agreement or contrary to written guidance given to the ESCO. The Issuer also reserves the right to reject the ESCO s calculations of savings when it determines that there is another more suitable or preferable means of determining or calculating such savings. For the purposes of completing the Cash Flow Analysis in Schedule M of the Report, the following items will be allowed as savings or in the development of savings: Escalation rates of 0 % for natural gas 1 Escalation rates of 0 % for electricity IGA 9/29/2015 Page 57

58 Escalation rates of 0 % for oil Escalation rates of 0 % for steam Escalation rates of 0 % for water Escalation rates of 0 % for other fuel type (specify) Escalation rates of % for operation and maintenance cost savings Escalation rates of % for material/commodity cost savings Escalation rates of % for allowable labor savings It should be noted that the base value for each fuel and water unit will not devalue in the event of any rate decrease. The issuer reserves the right to impose ceiling rates for fuel escalations. The following items will not typically be credited as savings derived from a proposed ECM: Issuer s in-house labor cost, Issuer s deferred maintenance cost and offset of future Issuer s capital costs. The ESCO may seek, in writing, permission to include such items from the Issuer on a case-by-case basis. However, the final determination of allowable savings in each case considered shall reside with Issuer. J. Report Format. The ESCO shall prepare a two volume report as follows: Each volume should be submitted using 8 ½ " x 11" sheets of paper double sided printing and a font size no smaller than 10 point. The pages in each volume should be numbered sequentially, include a Table of Contents and tabbed with the visible titles of corresponding Schedules and Sections. Volume 1 shall include the presentation of information in the following Schedules required for the ESA to the extent the information has been developed during the course of performing this audit. Schedules may be finalized during negotiations, prior to execution of the ESA. 1. Executive Summary: Provide an executive summary which describes the buildings, measures evaluated, analysis methodology, results and a summary table presenting the cost and savings estimates for each recommended measure. Include a summary of the recommended measures and costs using the table format in Schedule E. 2. Schedules: Schedule A Schedule B Schedule C Schedule D Schedule E Schedule F Schedule G Schedule H Schedule I Schedule J Schedule K Schedule L Schedule M Schedule N IGA 9/29/2015 Existing known conditions, systems and hazardous materials inventory Current and Known Future Capital Projects at the Premises Baseline Energy Consumption Standards of Comfort ECMs and Equipment to be installed by the ESCO Savings Measurement & Verification Calculation Formulae Baseline Adjustment Methods for Weather, Changes in Building Use or Operating Hours Systems Start-Up and Commissioning; Operating Parameters of Installed Equipment Construction and Installation Schedule ESCO and ISSUER Training Responsibilities Warranties (including Equipment) Maintenance Checklist and ISSUER & ESCO responsibilities Proposed Final Project Cost & Final Project Cash Flow Analysis Energy Savings Guarantee including form of Security Page 58

59 Schedule O Schedule P Schedule Q Schedule R Exhibits Exhibit I (i) Exhibit II (ii) Compensation to the ESCO Insurance and Bonds Financing Agreement Loan Amortization Certificate of Acceptance Technical Audit Certificate of Acceptance Installed Equipment Volume 2 shall include all of the information required in Article 1 Section E and the Sections below, and presented in the following format: 1. Measures Not Evaluated: Include a discussion of measures not evaluated in detail and the explanation of why a detailed analysis was not performed. 2. Appendices: Provide thorough appendices which document the data relied upon to prepare the analysis and how that data was collected. K. Submission of the Report. The Report shall be completed within 90 (Ninety) days of the date of selection of ECMs as referenced in Article 1 Section E. The not-to-exceed cost for the completed Energy Audit and Report will be. One electronic (single CD or thumb drive) with all information in Microsoft Office Suite products format shall be delivered to the NC Energy Office. If the results of this Audit, as described in the Report, are not: (a) within ten percent (10%) of the $ guaranteed savings shown in the ESCO s proposal for the Buildings, and (b) within ten percent (10%) of the $ total project cost shown in the ESCO s proposal for the Buildings, then either the Issuer or the ESCO may elect to terminate with the project. If this event occurs, the Issuer will not be obligated to pay the Energy Audit and Report Fee. However, if the Issuer terminates the project after this Audit and Report are completed and the results are within both of the ten percent (10%) ranges listed above, then the Issuer will be required to pay the ESCO this Audit and Report Fee, and the results of this Audit and Report shall become the property of the Issuer. L. Report Review. In the event Issuer requests an increase in the scope of the Report, ESCO and Issuer will negotiate in good faith an increase in the not-to-exceed cost of the Report. In the event that financing or bonding costs of the project increase after the ESCO submits the Report, ESCO and Issuer will negotiate in good faith adjustments necessary in scope, costs and guaranteed savings required to provide positive cash flow for the project. M. The report in its entirety shall be submitted to the State Construction Office for review. IGA 9/29/2015 Page 59

60 ARTICLE 2 ENERGY SERVICES AGREEMENT (ESA) Upon the verification of the final Energy Savings under this agreement, the ESCO is obligated to execute an ESA under which the ESCO shall design, install and implement energy conservation measures that the Parties have agreed to and provide certain training, maintenance and monitoring services as agreed to by both Parties. However, nothing in this Agreement should be construed as an obligation on any of the Parties to execute such an ESA. The precise terms and provisions of such an ESA shall be set forth in a separate agreement. ARTICLE 3 PAYMENT Payment to the ESCO for services performed in connection with this Agreement shall be made by the Issuer only in accordance with the provisions of Article 1, Section I and Article 4 contained herein. A. By the ESCO: ARTICLE 4 TERMINATION The ESCO may terminate this Agreement prior to the completion of the Energy Audit and Report or subsequent to the scheduled completion of the Energy Audit and Report if: (i) (ii) The ESCO determines that it cannot guarantee a minimum savings in energy costs through the implementation of an energy performance contracting project at the Buildings and or Facilities; or The ESCO determines that even though it can guarantee a savings in energy costs, that the amount would be insufficient to cover the costs associated with performing this Audit, installing energy conservation measures and related training, maintenance and monitoring services. In the event the ESCO terminates the Agreement pursuant to Article 4 A (i) or (ii) the Issuer shall not be obligated to pay any amount to the ESCO for services performed or expenses incurred by the ESCO in performing the Energy Audit and Report required under this Agreement. The ESCO shall provide the Issuer with any Audit documents (preliminary notes, reports or analysis) which have been produced or prepared prior to the effective date of the termination. The ESCO will return any documents or information that was provided by the Issuer. Termination under this article shall be effective upon the Issuer s receipt of written notification from the ESCO stating the reason for the termination and all documents which support termination as prescribed herein. B. By the Issuer: The Issuer may terminate this Agreement: (i) IGA 9/29/2015 If the ESCO fails to complete the Energy Audit and deliver the Report to the Issuer by the date established in Article 1 I. above; or fails to obtain a written extension of that Page 60

61 date from the Issuer. Termination under this subsection shall be effective upon the ESCO s receipt of written notification from the Issuer that the deadline for submission of the Energy Audit and Report has past. In this event, the Issuer shall not be obligated to pay any amount to the ESCO for services performed or expenses incurred by the ESCO in performing the Energy Audit and preparing the Report required under this Agreement. The ESCO will return any documents or information that was provided by the Issuer. (ii) (iii) If, prior or subsequent to the completion of the Energy Audit or Report, the ESCO notifies the Issuer in writing that it is unable to guarantee a sufficient level of savings pursuant to Article 4 above, termination under this subsection shall be effective upon ESCO's receipt of written notification of termination from the Issuer. In this event, the Issuer shall not be obligated to pay any amount to the ESCO for services performed or expenses incurred by the ESCO in performing the Energy Audit and preparation of the Report required under this Agreement. The ESCO will return any documents or information that was provided by the Issuer. If, prior or subsequent to the completion of the Energy Audit or Report, the Issuer notifies the ESCO in writing that it has elected to terminate this Agreement and not enter into an ESA, the Issuer shall reimburse the ESCO for either the actual expenses incurred or the percent of the Audit and Report completed whichever is greater but shall not exceed the amount stated in Section I, as of the effective date of the termination, the amount being determined as fair and equitable by the Issuer. Termination under this subsection shall be effective upon the ESCO receipt of written notification from the Issuer. The ESCO agrees to provide the Issuer with any records of expenses incurred and any preliminary notes, reports or analyses which have been produced or prepared prior to the effective date of the termination. Such documentation shall be used by the Issuer to determine the extent of work completed by the ESCO prior to termination and shall become the property of the Issuer. If after completion and acceptance of the Report, the Issuer does not enter into an ESA with the ESCO within 60 (sixty) days, the Issuer shall reimburse the ESCO for the cost of the Energy Audit as detailed herein. Termination under this subsection shall be effective upon the ESCO receipt of written notification from the Issuer. The Energy Audit and Report will become the property of the Issuer. If the Parties successfully negotiate and execute an ESA, no payment shall be due for the Energy Audit or Report under the terms of this Agreement. This Agreement shall automatically terminate upon the execution of an ESA by the ESCO and the Issuer for a guaranteed energy performance contracting project at the Building and or Facilities. It is further understood that provisions for payment for the Energy Audit shall be incorporated into the ESA. IGA 9/29/2015 Page 61

62 ARTICLE 5 STANDARD TERMS AND CONDITIONS Section 1. Agreement Term The Agreement term shall commence on and end on, unless earlier terminated pursuant to the provisions of Article 4 above. Notwithstanding, the ESCO shall adhere to the deadlines set forth in Article 1 regarding the completion and submittal of the list of ECMs and the Report. Section 2. Materials, Equipment, and Supplies The ESCO shall provide or cause to be provided all facilities, materials, equipment, and supplies necessary to perform the Energy Audit and prepare the Report. Section 3. Patent, Copyright, and Trademark Responsibility The ESCO agrees that any material or design specified by the ESCO or supplied by the ESCO pursuant to this Agreement shall not knowingly infringe any patent copyright or trademark, and the ESCO shall be solely responsible for securing any necessary licenses required for patented, copyrighted, or trademarked material utilized by the ESCO in the performance of the Energy Audit and preparation of the Report. Section 4. Customer Access to Records The Issuer shall have the right, throughout the term of this Agreement and for a minimum of years following completion of the Agreement, to inspect, audit and obtain copies of all books, records, and supporting documents which the ESCO is required to maintain according to the terms of this Agreement. Section 5. Personnel All personnel necessary for the effective performance of the Energy Audit shall be employed by the ESCO, and its designated subcontractors shall be qualified to perform the services required under this Agreement, and shall in all respects be subject to the rules and regulations of the ESCO governing staff members and employees. Neither the ESCO nor its, agents, subcontractors, or assigns shall be considered agents or employees of the Issuer. Section 6. Compliance with Applicable Law In performance of its obligations pursuant to this Agreement, the ESCO shall comply with all applicable provisions of Federal, State, and local law. All limits or standards set forth in this Agreement to be observed in the performance required under this Agreement are minimum requirements, and shall not affect the application of more restrictive Federal, State, or local standards applied to the performance of the Agreement. Section 7. Waivers No right of either party hereto shall be deemed to have been waived by non-exercise thereof, or otherwise, unless such waiver is reduced to writing and executed by the party entitled to exercise such right. Section 8. Assignment This Agreement may not be assigned by the ESCO without the prior written consent of the Issuer. Section 9. Federal Taxpayer Identification Number and Legal Status Disclosure IGA 9/29/2015 Page 62

63 Under penalty of perjury, the ESCO certifies that - is the ESCO's correct Federal Taxpayer Identification Number and that the ESCO is validly registered with the NC Secretary of State Section 10. Governing Law This Agreement shall be governed by and construed only in accordance with the laws of the State of North Carolina. In the event the parties are unable to resolve any dispute relating to this Agreement, all suits, actions, claims and causes of action relating to this Agreement shall be brought in the courts of the State of North Carolina. Section 11. Agreement The following documents are incorporated in, and made a part of, this Agreement: Issuer RFP ESCO RFP response NOTE: The Issuer shall include all required policy provisions, and shall also include the following attachments. Attachment I - Drug Free Workplace Provisions Attachment II - Equal Employment Opportunity Clause Section 12. Project Management All necessary and ordinary communications, submittals, approvals, requests, and notices related to Project work shall be issued or received by: For Issuer: For ESCO: Section 13. Amendments This Agreement and Attachments referenced in Section 11 herein constitute the entire Agreement between the Parties. No amendment hereof shall be effective until and unless reduced to writing and executed by the Parties. Section 14. E-Verify. As required by G.S (Session Law ), ESCO certifies that it, and each of its subcontractors performing Work under this Agreement complies with the requirements of Article 2 of Chapter 64 of the NC General Statutes, including the requirement for each employer with more than 25 employees in North Carolina to verify the work authorization of its employees through the federal E-Verify system. Section 15. Suspension and Debarment. The ESCO certifies that with regard to: A. DEBARMENT AND SUSPENSION - To the best of its knowledge and belief that it and its principals: (1) are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal, State, or local government agency; IGA 9/29/2015 (2) have not within a 3-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a Page 63

64 criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (3) are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (A)(2) of this certification; and have not within a 3-year period preceding this application/proposal had one or more public transactions (Federal, State, or local) terminated for cause or default Drug Free Workplace. ESCO certifies that it will comply by: (1) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violation of such prohibition; (2) Establishing a drug-free awareness program to inform employees about - (a) The dangers of drug abuse in the workplace; (b) The grantee's policy of maintaining a drug-free workplace; (c) Any available drug counseling, rehabilitation, and employee assistance programs; and (d) The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; (3) Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph (1) above; (4) Notifying the employee in the statement required by paragraph (1), above, that, as a condition of employment under the grant, the employee will - (a) Abide by the terms of the statement; and (b) Notify the employer of any criminal drug statue conviction for a violation occurring in the workplace no later than five days after such conviction; (5) Notifying the agency within ten days after receiving notice under subparagraph (4)(b), above, from an employee or otherwise receiving actual notice of such conviction; IGA 9/29/2015 (6) Taking one of the following actions, within 30 days of receiving notice under subparagraph (4)(b), above with respect to any employee who is so convicted - (a) Taking appropriate personnel action against such an employee, up to and including termination; or (b) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; (7) Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (1), (2), (3), (4), (5), and (6), above. Page 64

65 [Signature page follows] IGA 9/29/2015 Page 65

66 ARTICLE 6 EXECUTION IN WITNESS WHEREOF, the parties have executed this Agreement this day of, 20. Issuer ESCO By: By: Title: Title: By: By: Title: Title: By: By: IGA 9/29/2015 Page 66

67 APPENDIX V ESA

68 STATE OF NORTH CAROLINA ENERGY SERVICES AGREEMENT GUARANTEED ENERGY PERFORMANCE This Energy Services Agreement (the "Agreement" or "ESA") is entered into on,20, the Commencement Date, by and between the (the "ISSUER") and with offices located at (the "ESCO ) for the purpose of providing certain energy conservation measures ( ECMs ), consisting of services, systems and facilities designed to reduce energy consumption and costs in buildings owned and operated by the ISSUER which are described herein as the "Premises." RECITALS WHEREAS, the ESCO was selected by the ISSUER as a qualified provider to provide certain services that will result in decreased energy consumption and costs for certain existing facilities (the Premises ) owned and managed by the ISSUER. The services may include, but are not limited to, the following: energy use analyses; the design, delivery and installation of energy conservation measures (the ECMs ) which consist of systems and devices for the Premises; guaranteed energy savings; training of designated ISSUER employees; maintenance and monitoring of the ECMs as provided herein; the measurement, verification and reporting of energy savings; and, if provided herein, financing of the project; and WHEREAS, pursuant to the Investment Grade Energy Audit Agreement between the Parties dated (the Energy Audit Agreement ), the ESCO conducted an investment grade energy audit (the Energy Audit ) and prepared an energy audit report that contains specific recommendations and documentation concerning the energy conservation measures, systems and services to be provided at the Premises and is incorporated herein by reference, approved, and accepted by the ISSUER as evidenced by execution of the Acceptance Certification-Energy Audit Report (Attachment A); and WHEREAS, the ISSUER has found that the energy savings resulting from the performance of this Agreement will equal or exceed the total cost of the Agreement; and WHEREAS, the ESCO has agreed to guarantee a level of monetary savings to be achieved as the result of the professional and other services to be provided under this Agreement; and NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein, and intending to be legally bound hereby, the ISSUER and the ESCO hereby covenant and agree as follows: This agreement shall consist of the within Agreement and its attachments, all of which are identified as: i. Energy Savings Agreement and Schedules ( ESA ) ii. Investment Grade Energy Audit iii. Request for Proposal These documents ( Contract Documents ) collectively constitute the entire agreement between the parties and supersede all prior oral or written statements or agreements. In the event of any conflict between the terms of the Contract Documents, the document with the highest relative precedence shall prevail. The order of precedence is established hereinabove with the first listed document having the highest precedence and the last listed document having the lowest level of precedence. In the event there are multiple Amendments to this Agreement, the most recent Amendment will have the highest level of precedence and the oldest Amendment will the lowest level of precedence. ESA 9/29/2015 Page 68

69 1. TERM This Agreement shall be effective upon execution of this document, signed by both parties. In addition, the parties shall be bound the terms of this Agreement for [INSERT NUMBER OF YEARS] from the date of the start of the Guarantee Period (defined in Section 9 below), except as otherwise terminated pursuant to the terms of this Agreement Definitions Commencement Date. The date of execution of the Energy Savings Agreement and the beginning of the construction period Final Project Acceptance Date. The date prescribed in the Certificate of Final Project Acceptance (Exhibit 4) indicating that Work to be performed under this agreement has been inspected by the ISSUER and has determined to be complete Interim Period. The period between the Commencement Date and the Final Project Acceptance Date Projected Acceptance Date. The completion date specified in Schedule I ( Construction and Installation Schedule) of the Energy Savings Agreement. 2. THE ENERGY CONSERVATION PROJECT 2.1. Project Defined. The ESCO shall design, procure, fabricate and install the ECMs specified in Schedule E and provide training, commissioning, maintenance and monitoring and all other services specified in this Agreement and the Project Documents set forth in Paragraph 2.3 at the Premises described in Schedule A (collectively referred to herein as the Project ). The design, procurement, fabrication, installation and commissioning of the ECMs specified in Schedule E and any training services described in Schedule J, which are integral to the operation of the ECMs, are referred to as the "Work." The maintenance, monitoring, and savings measurement and verification services detailed in Schedules F and L and any Post-Acceptance Training services detailed in Schedule J shall not be designated as Work, but are hereinafter referred to as the Annual Services Energy Audit Report. Pursuant to the Investment Grade Audit Agreement, the ESCO prepared the Investment Grade Audit Report, which was accepted by the ISSUER and which contains specific recommendations and documentation concerning the energy conservation measures, systems and services to be provided at the Premises. The Project Documents referenced in Paragraph 2.3 shall govern in the event of any inconsistencies between this Agreement and any provisions in the Investment Grade Audit Report Project Documents. The Project Documents include this Agreement, the Investment Grade Audit Report, Submittals that are approved by the Issuer in writing, and the Certificates of Insurance and Bonds required by this Agreement. The Project Documents also include the following Schedules which are incorporated herein and made a part of this ESA upon written approval by both parties: Schedule A Schedule B Schedule C Schedule D Schedule E Schedule F Schedule G Hours ESA 9/29/2015 Existing known conditions, systems and hazardous materials inventory Current and Known Future Capital Projects at the Premises Baseline Energy Consumption Standards of Comfort ECMs and Equipment to be installed by the ESCO Savings Measurement & Verification Calculation Formulae Baseline Adjustment Methods for Weather, Changes in Building Use or Operating Page 69

70 Schedule H Systems Start-Up and Commissioning; Operating Parameters of Installed Equipment Schedule I Construction and Installation Schedule Schedule J ESCO and ISSUER Training Responsibilities Schedule K Warranties (including Equipment) Schedule L Maintenance Checklist and ISSUER & ESCO responsibilities Schedule M Proposed Final Project Cost & Final Project Cash Flow Analysis Schedule N Energy Savings Guarantee including form of Security Schedule O Compensation to the ESCO Schedule P Insurance and Bonds Schedule Q Financing Agreement Schedule R Loan Amortization Exhibits: Exhibit 1 Certificate of Acceptance Investment Grade Audit Report Exhibit 2 Individual ECM Acceptance Exhibit 3 Certificate of Beneficial Use and Acceptance / Certificate of Occupancy (issued by Authority Having Jurisdiction) Exhibit 4 Final Project Acceptance (issued by Issuer after Certificate of Beneficial Use and Acceptance / Certificate of Occupancy issued by AHJ) 2.4. Review of Project Documents; Notification to the ISSUER; Corrections. The ESCO shall review all Project Documents, including all addenda, whether prepared by the ESCO, its subcontractors or furnished by the ISSUER, for errors, inconsistencies or omissions relative to the performance of the Project. Upon review of the Project Documents, and prior to commencement of the Project, the ESCO shall provide written notice to the ISSUER that (i) there are no inconsistencies in the Project Documents pertaining to the performance of the Project at the Premises or conflicts with existing conditions on the Project; or (ii) specifying the nature of any conflicts or inconsistencies noted from the ESCO s review of the Project Documents. The ESCO shall notify the ISSUER of any error, inconsistency or omission that the ESCO discovers in the Project Document before the ESCO commences the Project. In the event that the ESCO fails to properly prepare or review Project Documents or commences the Project without providing notice to the ISSUER of any error or inconsistency that it discovers in the Project Documents, the ESCO shall, upon written direction from the ISSUER, remove the deficient work and re-install the ECM pursuant to the Project Documents at no additional cost to the ISSUER. 3. THE ISSUER'S RIGHTS AND RESPONSIBILITIES: 3.1. Project Administration. The ISSUER s personnel designated in paragraph shall be the principal point of contact between the ISSUER and the ESCO related to the performance of this Agreement. The ISSUER will attend project meetings at the ESCO s request following reasonable notice by the ESCO and accommodation by the ESCO of the schedules of the ISSUER S staff Approval of Submittals. The ISSUER will ensure that the design and installation of the ECMs are consistent with the ECMs contemplated in the ESCO s Energy Audit. At the request of the ISSUER, and where appropriate or required, the ESCO shall provide on-site "mock-ups" and demonstrations of the ECMs that are proposed to be installed at the Premises (hereinafter a Submittal ) pursuant to this Agreement. The ISSUER may also request additional materials, documents, or information. ESA 9/29/2015 Page 70

71 No later than ( ) business days after receipt by the ISSUER of any Submittal, the ISSUER shall review the Submittal for approval, which approval shall not be unreasonably withheld or delayed. If the ISSUER does not approve a Submittal, the ISSUER shall provide to the ESCO a written explanation as to the reason(s) for disapproval. No later than ten (10) business days following the receipt of the ISSUER s written disapproval, the ESCO shall submit a revised Submittal to the ISSUER for the ISSUER s review. The ESCO shall be responsible for any delays caused by rejection of incomplete or disapproved Submittals. The ESCO may not commence any of the Projects without written approval by the ISSUER. The ESCO s responsibility for errors, omissions, deviation from existing conditions, or deviation from the Project Documents in submittals is not relieved by the ISSUER S review and approval thereof Right to Reject or Stop the Project. The ISSUER may reject any sequences or procedures proposed by the ESCO in connection with the Project which might constitute or create a hazard to the Premises, or to persons or property, or which deviate from the Project Documents or will result in schedule delays or additional costs to the ISSUER. This provision shall not be construed to mean that any portion of the Project that is not rejected is therefore approved. If the ESCO fails to correct defective Work or fails to supply labor, materials or equipment in accordance with the Project Documents or to execute the Project in a workmanlike manner, the ISSUER may order the ESCO to stop work on the Project, or any portion thereof, until the cause for such order has been eliminated Inspections. All materials and equipment and each part of the detail of the Project shall be subject at all times to inspection by the ISSUER or its designated representatives or consultants, and the ESCO will be held strictly to the true intent of this Agreement and the Project Documents with regard to quality of materials, workmanship, and the diligent execution of the Project. i. The ESCO shall allow the ISSUER access to all parts of the Project, and shall furnish such information and assistance as is required to make a complete and detailed inspection or inspections. All material and equipment installed as part of the Project must be inspected, tested and approved in accordance with the Project Documents and this Agreement prior to its use. ii. If the ISSUER s inspection reveals Work that is faulty, defective, or does not conform to the Project Documents, the ISSUER must provide a written notice to the ESCO describing such faulty, defective or nonconforming Work. The ESCO must correct the Work pursuant to Paragraph 4.12 below. iii. Upon written request by the ESCO, the ISSUER shall schedule preliminary inspections of the Work as soon as reasonably practicable after notification by the ESCO that major ECMs or systems are substantially installed. If such Work is not acceptable to the ISSUER at the time of such preliminary inspections, the ESCO will be provided written notice as to the particular defects to be remedied before the Work will be accepted. The ISSUER will indicate its approval of an ECM by issuing an Individual ECM Acceptance (Exhibit 2) for the applicable ECM, the date of which will commence the warranty period for such ECM as set forth in Schedule K Emergencies. In case of bona fide emergencies as determined by the ISSUER involving public health or public safety or to protect against further loss or damage to the ISSUER s property or to prevent or minimize serious disruption of ISSUER services or to insure the integrity of ISSUER s records, the ISSUER may take appropriate action to prevent or minimize loss or damage to the Premises without prior notice to the ESCO or its surety Drawings, Specifications and Surveys. The ISSUER shall provide the ESCO with any existing surveys in the ISSUER s possession that describe the physical characteristics, ESA 9/29/2015 Page 71

72 legal limitations and utility locations for the Premises. All such information furnished by the ISSUER is furnished without any representation as to the accuracy of such information. The ISSUER will make available to the ESCO any working drawings, specifications, surveys and "As-Built" drawings concerning the Premises that are in the possession of the ISSUER and which relate to work being performed on the Premises by other companies, if any. All such information furnished by the ISSUER is furnished without any representation as to the accuracy of such information. All drawings, specifications, surveys and copies thereof furnished by the ISSUER are and shall remain ISSUER s property Ownership, Dissemination and Publication of Documents. The drawings, specifications, reports, renderings, models, electronic media and all such other documents to be prepared and furnished by the ESCO pursuant to this Agreement, shall be and remain the property of the ISSUER Interpretation of Agreement. The ISSUER shall have the authority to make a binding determination of questions of fact that arise in relation to the interpretation of this Agreement and the ESCO s performance hereunder. The ESCO shall proceed diligently with the performance of this Agreement and in accordance with the ISSUER S decision. Continuation of the Project shall not be construed as a waiver of any other rights accruing to the ESCO. 4. INSTALLATION OF THE ENERGY CONSERVATION MEASURES 4.1. Implementation of the Work. The ESCO shall perform or cause its subcontractors to perform the Work pursuant to this Agreement. Construction and equipment installation shall proceed in accordance with the provisions contained in this Agreement and the Project Installation schedule approved by ISSUER and attached hereto as Schedule I. The ESCO shall monitor the performance of the work for compliance with this Agreement and shall ensure that the Work is accomplished in a workmanlike manner. All services requiring the exercise of professional skills or judgment shall be accomplished by professionals qualified, competent, and licensed in the applicable discipline and as may be required by State law. All Project Documents which are required to be prepared by the ESCO shall be in accord with all applicable codes, standards and regulations and shall be prepared by qualified personnel. Where required by North Carolina law, Project Documents shall bear the stamp or seal of architects or engineers licensed in the State of North Carolina. The ESCO shall remain responsible for all services performed, whether by the ESCO or its subcontractors or others on its behalf, throughout the term of this Agreement. The ESCO shall supervise and direct the performance of the Work using its best skill, attention and judgment. The ESCO shall be solely responsible for site safety and for all construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under this Agreement ECM Submittal. Within days following the execution of this Agreement, the ESCO shall prepare a document for submission to the ISSUER that contains sufficient detail to allow the ISSUER to complete the review described in Paragraph 3.2 above and includes: i) Date (and for revisions of the Submittal, revision dates); ii) Project Number and Title; iii) Stamp or seal of the preparer of the Submittal, and the ESCO s certification that it has reviewed and approved the Submittal for accuracy and compliance with the provisions of this Agreement; and ESA 9/29/2015 Page 72

73 iv) With respect to each ECM, drawings, plans, specifications, shop drawings, product data, and where appropriate or reasonably required, product samples ESCO s Personnel. The ESCO shall furnish a competent and adequate staff as necessary for the proper administration, coordination and supervision of the Work; organize the procurement of all materials and equipment so that they will be available at the time they are needed for the Work; and ensure that an adequate force of skilled workmen are available to complete the Work in accordance with all requirements of this Agreement. The ESCO shall also employ a competent project manager who shall be responsible for the coordination of the Work, and who shall be authorized to commit the ESCO with regard to manpower, schedule, coordination and cooperation. The project manager shall not have less than two years of documented experience in responsible field supervision for projects of comparable size and complexity. The ESCO shall give the ISSUER advance written notice if it intends to remove or replace the project manager. In the event the project manager fails to perform its duties under this Agreement the ESCO shall provide a competent replacement Subcontracting. The ESCO shall have the right to have any of the services to be provided by the ESCO under this Agreement accomplished by subcontractors pursuant to written subcontracts between the ESCO and such subcontractors. The ESCO shall, upon entering into any agreement with a subcontractor, furnish the ISSUER with an executed copy thereof. All subcontracts shall be subject to, consistent with, and in conformance with all applicable State and federal laws, rules, regulations and codes, and shall contain provisions that require all services to be performed in strict accordance with the requirements of this Agreement and shall provide that the subcontractors are subject to all the terms of this Agreement. Provided that such agreements do not prejudice any of the ISSUER s rights under this Agreement, such agreements may contain different provisions than are provided herein with respect to extensions of schedule, time of completion, payments, guarantees and matters not affecting the quality of the Work Permits and Approvals. The ESCO shall obtain and pay for all necessary permits and approvals for the design, installation and operation of the ECMs. The ISSUER shall exercise its best efforts to assist the ESCO in securing applicable permits and approvals. The ECMs and the operation of the ECMs by the ESCO shall at all times conform to all applicable laws, regulations, and codes. The ESCO shall furnish to the ISSUER copies of each permit or license required for performance under this Agreement before the ESCO commences that portion of Work. If the ESCO observes that any of the Project Documents are at variance with permits or licenses granted, or laws, ordinances, codes, rules or regulations of governmental authorities, the ESCO shall promptly notify the ISSUER in writing and shall make any necessary changes, subject to the approval thereof by the ISSUER in accordance with the terms of this Agreement. If the ESCO performs any Work that is contrary to any permit or license granted, or any applicable laws, ordinances, codes, rules or regulations, the ESCO shall make changes as required to comply therewith and shall bear all costs arising there from Coordination of the Work. The ESCO shall consult with the personnel designated by the ISSUER in order to coordinate the Work, including installation of any ECM. The ESCO shall not permit any act that will interfere with the performance of the ISSUER s business activities at the Premises without the prior written approval of the ISSUER. The ESCO shall consult with the ISSUER regarding the coordination of the Work with any other work being performed by other Companies at the Premises Changed Conditions. Should the ESCO encounter subsurface or latent physical conditions at the Premises which differ materially from those indicated in the Project Documents or from those ordinarily encountered and generally recognized as inherent in work of the ESA 9/29/2015 Page 73

74 character provided for in this Agreement, the ESCO shall give written notice to the ISSUER before any such condition is disturbed or further disturbed. The ISSUER will promptly investigate and, if it is determined that the conditions materially differ from those which ESCO should reasonably have been expected to discover or anticipate, the ISSUER may approve such changes in the Project Documents as the ISSUER deems necessary. If such changed conditions cause an increase or decrease in the ESCO s cost or time of performance, the parties will negotiate a mutually acceptable solution Royalties and Patents. The ESCO shall pay all royalties and license fees due to third parties in connection with the Work Project Meetings. The ESCO shall provide for regularly scheduled project meetings in the Project Installation Schedule, and shall give timely advance written notice and agenda of such meetings to the ISSUER. The ESCO shall record minutes and distribute copies of minutes of meetings to the ISSUER within five (5) business days after each meeting. The ESCO shall schedule additional project meetings if requested by the ISSUER Verification of Dimensions and Existing Conditions. The ESCO is responsible for becoming knowledgeable of the conditions of the Premises relating to the performance of the Work and the conditions under which the Work is to be performed. All dimensions and existing conditions have been verified by the ESCO during the ESCO s performance of the Energy Audit by actual measurement and observation. All discrepancies between the requirements of the Project Documents and the existing conditions or dimensions shall be reported to the ISSUER as soon as they are discovered. Failure to verify and report prior to the commencement of the Work shall constitute the ESCO s acceptance of existing conditions as fit for the proper execution of the Work under this Agreement Security. In accordance with G.S B, the ESCO shall provide security to the ISSUER in a form acceptable to the Office of the State Treasurer and in an amount equal to one hundred percent (100%) of the guaranteed savings to be maintained for the entire term of this Agreement. If during the term of this Agreement, the ISSUER receives information, including but not limited, to (i) notice that the ESCO s security will not be renewed; (ii) notice that the ESCO has filed for bankruptcy or is insolvent; (iii) notice that the ESCO is suspended or debarred from doing business within the State or (iv) any act by the ESCO as prescribed in Section below, the ISSUER may call due the security to assure the ESCO s faithful performance of the Agreement. The security shall then be deposited into an escrow account to be issued in accordance with this Agreement. If the ESCO fails to pay any shortfall due under this agreement, the ISSUER shall draw this amount from the security. Any security remaining following the term of this Agreement shall be returned to the ESCO Insurance. The ESCO shall purchase, maintain and provide evidence of insurance coverage of the types, in the amounts and for the periods specified in Schedule P. Subsequent to the date of the Certificate of Project Acceptance, the ISSUER shall be responsible for providing insurance coverage on the ECMs. The ESCO shall not commence performance of the Project until the ESCO obtains insurance that conforms to the standards in Schedule P and which is approved in writing by the ISSUER. Notwithstanding the foregoing, the failure of the ISSUER to obtain such evidence from the ESCO before permitting the ESCO to commence the Project shall not be deemed to be a waiver by the ISSUER, and the ESCO shall remain under a continuing obligation to obtain and maintain the required insurance coverage and to supply evidence of coverage in accordance with Schedule P. The ESCO s failure to obtain or keep such insurance in force shall constitute an Event of Default and Breach under this Agreement within the meaning of Section 11 and in addition to the remedies ESA 9/29/2015 Page 74

75 provided therein, the ISSUER reserves the right to stop the Project until evidence of the requisite coverage is provided. The ESCO shall require all subcontractors performing any portion of the Project to carry the insurance required in Schedule P, or the ESCO may provide the required coverage for any or all subcontractors. If the ESCO elects to provide the required insurance coverage for any of its subcontractors, the ESCO shall cause the subcontractor to be expressly named in any Certificate of Insurance required to demonstrate compliance with this Agreement. The ESCO and each of its subcontractors agree that each insurer shall waive any rights of subrogation against the ISSUER. The ESCO shall timely renew the required insurance as necessary to keep such coverage in effect for the periods specified in Schedule P and shall supply the ISSUER, not less than sixty (60) days prior to any expiration or renewal dates for such insurance policies, with evidence of all required insurance including updated replacement Certificates of Insurance and amendatory riders or endorsements that clearly evidence the continuation of all coverage in the same manner, limits of protection, and scope of coverage, as was provided by the Certificates of Insurance, amendatory riders or endorsements originally supplied. The ISSUER shall be a named additional insured in any policy of insurance required by this Agreement. The ESCO expressly understands and agrees that any insurance protection furnished by the ESCO hereunder shall in no way limit the ESCO s responsibility to indemnify and save harmless the ISSUER under the provisions of this Agreement Performance and Labor and Material Payment Bonds. The ESCO shall, prior to commencing the Project, deliver to the ISSUER a Performance Bond and a Labor and Material Payment Bond that conforms to the requirements of N.C. General Statute Chapter 44-A, Article Materials, Workmanship, and Equipment. The ESCO shall ensure that all materials used by the ESCO and its subcontractors and workmanship performed or caused to be performed by the ESCO in connection with the Work meets or exceeds all applicable codes and is performed in a workmanlike manner. Where conflicts exist between applicable codes, the more stringent provision shall apply; i. The ESCO shall ensure that all equipment and materials to be used in the Work for which Underwriters Laboratory labeling services is provided shall be UL labeled; ii. The ESCO shall obey the following list of codes where applicable: 1) Any applicable construction and electrical code; 2) Underwriters Laboratories (UL); 3) Insulated Power Cable Engineers Association (IPCEA); 4) National Electrical Code (NEC); 5) National Electrical Manufacturers Association (NEMA); 6) American National Standards Institute (ANSI); and 7) Institute of Electrical and Electronic Engineers (IEEE). iii. The ESCO shall be responsible, at its sole cost, for the disposal of all equipment and materials removed or replaced through its performance of the Work in accordance with all applicable laws and regulations regarding such disposal, except those items designated by the ISSUER as non-disposable. Disposal of Hazardous Materials is solely limited to the provision of Section The cost of disposal to be performed by the ESCO is included in the ESCO compensation for the Work set forth in Schedule O. iv. Each party shall operate and maintain all equipment used within this Agreement in accordance with manufacturer s specifications throughout the entire term of this Agreement. Either party shall be liable to the other for any loss of equipment resulting from the party s ESA 9/29/2015 Page 75

76 failure to operate or maintain equipment in accordance with the manufacturer s specifications. The ESCO shall be responsible to the ISSUER for any loss of equipment occurring as a result of ESCO s failure to either: (i) specify the proper equipment required for use under the Agreement or (ii) supply equipment that equals or exceeds the life expectancy of the guaranteed energy savings period. Neither party shall be responsible to the other party or deemed to be in default under this agreement for loss of equipment resulting from any act prescribed in Section 10.8 of this Agreement Correction of the Work. If the ISSUER request, the ESCO shall remove or uncover such portions of finished Work. After the examination, the ESCO shall restore said portion of the Work to the standard required by this Agreement and the Project Documents. If the Work thus exposed or examined proves acceptable, the expenses of uncovering or removing and the replacing of the parts removed shall be the responsibility of the ISSUER and such uncovering, removing and replacing shall be deemed to be an excusable event of delay, if a delay in completion is caused thereby. If the Work so exposed or examined has not been performed in accordance with the Project Documents, the expense of uncovering, removing and replacing any portion of the Work necessary to comply with this Agreement and the Project Documents shall be borne by the ESCO and requests for a time extension or claims for delay will not be granted Responsibility for Materials. The ESCO shall be responsible for the contracted quality and standards of all materials, components or completed Work furnished by the ESCO pursuant to the terms hereof. Materials, components or completed Work which fails to comply with this Agreement and the Project Documents may be rejected by the ISSUER and shall be replaced by the ESCO at no cost to the ISSUER. The ESCO shall remove from the Premises within a reasonable time any materials or components so rejected at the entire expense of the ESCO, after written notice has been delivered by the ISSUER to the ESCO that such materials or components have been rejected. The ISSUER does not assume any responsibility for the availability of any controlled materials or other materials and equipment required for the Work. However, ISSUER reserves the right to review and approve the quality and standards for all materials Hazardous Materials. The ESCO acknowledges that compliance with the National Emission Standard for Hazardous Air Pollutants as promulgated by the United States Environmental Protection Agency pursuant to Section 112 of the Clean Air Act is a continuing obligation requiring any and all demolition or renovation activity completed by or on behalf of the ISSUER to conform to the standards for such activity as set forth in 40 C.F.R (Standard for Demolition and Renovation). The ESCO shall observe all notification procedures established by the United States and North Carolina environmental protection agencies in the execution of the Project. In addition, the ESCO shall comply with any Asbestos Management Plan that has been developed for the Premises. In the event that the ESCO, or any of its subcontractors, encounters any substance it believes may be hazardous or material covered by the Act in the performance of the Work, the existence of which has not previously been disclosed to the ESCO by the ISSUER the ESCO shall, before disturbing such materials, immediately notify the ISSUER of the location thereof. The ESCO shall advise the ISSUER as to whether it is feasible to re-route the Work as to avoid such materials. If such rerouting is reasonably feasible, the ESCO shall do so without additional compensation hereunder. If such re-routing or avoidance is not reasonably feasible in the judgment of the ESCO and ISSUER and such material must be disturbed or relocated to complete the Work, and if (i) removal or containment of the hazardous substance or material cannot be effectuated without a cessation of the Work; or (ii) applicable law, rule or regulation requires cessation of the Work, or (iii) continuation of the Work exposes any person to a substantial risk, the ESCO may suspend its performance of the Work without penalty until the substance or material is removed or contained by the ISSUER. ESA 9/29/2015 Page 76

77 The following options are available to the ISSUER in the event that undisclosed hazardous materials are encountered in the performance of the Work by the ESCO or its subcontractors: 1. If feasible, the ISSUER may direct the ESCO to modify the scope of the Work to eliminate portions of the Work affected by the undisclosed hazardous substance or material. 2. The ISSUER may terminate this Agreement upon payment to the ESCO of the amount due for services or materials and equipment supplied by the ESCO prior to suspension of the Work, including damages caused by the delay as prescribed by the Act. Provided, however, that the ISSUER shall not be liable for damages or other costs or expenses incurred by the ESCO if the existence of the hazardous substance or material was disclosed to the ESCO by the ISSUER or, if as a result of the ESCO s review of the Project Documents, including any Asbestos Management Plan developed for the Premises and its investigation of the Premises, the ESCO should reasonably have been expected to discover or anticipate the existence of the hazardous substance or material and the ESCO could have developed the scope of the Work in such a manner as to avoid said hazardous substance or material. 3. The ESCO and the ISSUER agree that any work relating to (i) asbestos, material containing asbestos, or the existence, use, detection, removal, containment or treatment thereof, or (ii) pollutants, hazardous wastes, hazardous materials, contaminants (collectively "Hazardous Materials") or the storage, handling, use, transportation, treatment or the disposal, discharge, leakage, detection removal or containment thereof which is not specifically provided for in this Agreement, is the responsibility of the ISSUER. Notwithstanding the foregoing, the ESCO will utilize due diligence in order to determine whether the Work will require the removal of PCB ballasts and whether asbestos is likely to be encountered in the performance of the Work. ESCO shall provide the ISSUER with an estimate for the cost of removal and disposition of PCB ballasts and asbestos it expects may be encountered in the performance of the Work and shall allow for an amount equal to the estimated cost of removal and disposal in the Guaranteed Savings detailed in Schedule N Systems Startup/Commissioning. The ESCO shall conduct a thorough and systematic performance test of each element and total system of the installed ECMs in accordance with Schedule H. The ESCO shall provide advance written notice of at least ten (10) business days to the ISSUER of the scheduled test(s). The ISSUER shall have the right to designate representatives to be present at any or all such tests including representatives of the manufacturers of the ECMs. The ESCO shall demonstrate that all ECMs installed comply with the requirements of the Project Documents. The ESCO shall test all components and systems of the installed ECMs. The ESCO, or its subcontractor(s), shall correct or adjust all deficiencies in operation of the ECMs Cooperation with the ISSUER's Consultants. The ISSUER reserves the right to designate authorized representatives or to retain consultants at its expense, including but not limited to a licensed architect or engineer, to act on its behalf with respect to administering the performance required under this Agreement throughout its term. The ISSUER and its representatives and consultants shall at all times have access to the Premises during the ESCO s implementation of the Project. The ESCO agrees to cooperate with any representative of, or consultant retained by, the ISSUER. ESA 9/29/2015 Page 77

78 4.20. Miscellaneous. Other rights and responsibilities of the ESCO are set forth throughout this Agreement and in the Project Documents and are included under other titles, articles, sections and headings for convenience. It is the responsibility of the ESCO to familiarize itself with all provisions of this Agreement and the Project Documents in order to understand fully the entirety of its rights and responsibilities hereunder. 5. PAYMENTS TO ESCO 5.1. Compensation. ISSUER will pay ESCO no more than $ for the Work in the amounts and in accordance with Schedule O hereto (the Work Compensation ). The ISSUER will pay ESCO no more than $ for the Annual Services in the amounts and in accordance with Schedule O hereto Payments for Work in Progress. The ESCO shall submit invoices for the Work, including back-up documentation, to the ISSUER for the ISSUER s review and approval on the schedule provided for the Work in Schedule O. No later than ( ) calendar days following the receipt of any invoice, the ISSUER shall inspect the Work for which the ESCO requests payment and notify the ESCO in writing of the ISSUER s approval or disapproval. Any disapproval of the Work shall be corrected in accordance with paragraph 4.14 above. No later than ( ) calendar days from the ISSUER s approval of the Work addressed in any invoice, the ISSUER shall pay, or cause to be paid to ESCO, 95% of the total costs of approved Work. Five percent (5%) of the total invoice shall be retained by the ISSUER until the issuance of the Certificate of Project Acceptance pursuant to Paragraph 6.1. The ISSUER may, upon request or at its discretion, furnish to a Subcontractor, if practicable, information regarding the percentages of completion of the Work that is the subject of any invoice and the action taken thereon by the ESCO on account of Work completed by such Subcontractor. No payment to the ESCO, nor any partial or entire use of occupancy or the Premises by the ISSUER shall constitute an acceptance of any Work that is not completed in accordance with the provisions of this Agreement Final Installation Payment for the Work. No later than ( ) days from the date of the Certificate of Final Acceptance, the ISSUER shall pay or cause to be paid to ESCO the entire unpaid balance of the Work Compensation invoiced by the ESCO, less the amount of any sums which continue to be retained to satisfy the cost of performing any change in the Work which is the subject of any claim or dispute and which has not yet been satisfactorily performed by ESCO. The ISSUER shall not be responsible for any payment due to a subcontractor for any Work performed by the subcontractor under this Agreement Billing Procedures for the Annual Services. The ESCO shall submit invoices for the Annual Services, including back up documentation, to the ISSUER for the ISSUER s review and approval on the schedule provided for the Annual Services in Schedule O. No later than ( ) calendar days following the receipt of any invoice, the ISSUER shall inspect the Annual Services for which the ESCO requests payment and notify the ESCO in writing of the ISSUER s approval or disapproval. Any disapproval of the Annual Services shall be addressed in accordance with paragraph 4.14 above. No later than ( ) calendar days from the ISSUER s approval of the Annual Services addressed in any invoice, the ISSUER shall pay, or cause to be paid to ESCO the costs of approved Annual Services. 6. ACCEPTANCE OF THE WORK ESA 9/29/2015 Page 78

79 6.1. Final Inspection by the Issuer. The ESCO shall promptly notify the ISSUER following the ESCO s completion of the Work. Upon notification, the ISSUER will inspect the Work for compliance with this Agreement. Any corrective measures shall be made by the ESCO pursuant to Paragraph When the ISSUER deems the Work complete, the ISSUER shall issue a Certificate of Project Acceptance as set forth in Attachment B Final Submittal. The ESCO shall submit the following documents to the ISSUER with notice described above: i. All Project Documents; ii. The ESCO shall submit lien waivers, sworn statements, guarantees, full releases or other evidence reasonably satisfactory to the ISSUER that there are no liens, claims or stop notices pending, filed or threatened against the ISSUER, the ESCO, the Work, the Premises or the ECMs whatsoever. iii. Certificates of compliance for all ECMs which require local government inspection; iv. Asbestos abatement compliance records, if applicable; and v. Any other documentation reasonably required by the ISSUER. 7. OPERATION, MAINTENANCE, AND TRAINING 7.1. ECM Warranties. The ESCO warrants that all ECMs designed, procured, fabricated and installed pursuant to this Agreement are new, in good and proper working condition and are of merchantable quality and fit for the particular purposes of enabling the ISSUER to reduce energy consumption and operating cost. The ESCO further warrants that the ECMs are protected by appropriate written warranties covering all parts and equipment performance for the periods specified in Schedule K and Exhibit 2. The ESCO shall deliver to the ISSUER for inspection and approval all such written warranties and shall pursue rights and remedies against the manufacturer and each prior seller of the ECMs under the warranties in the event of equipment malfunction, improper or defective function, or defects in parts, workmanship or performance. The ESCO shall be responsible for managing all warranty activity during the warranty periods set forth in Schedule K and Exhibit 2 and shall notify the ISSUER whenever defects in equipment, parts or performance occur, which give rise to such rights and remedies and that those rights and remedies are exercised by the ESCO. The cost of any damage, loss or claims by any person arising out of the use or operation of the ECMs or damage to the ECMs and their performance, including damage to other property and equipment of the ISSUER or the Premises, due to the ESCO s failure to exercise its warranty rights shall be borne solely by the ESCO. All warranties shall be transferable and extend to the ISSUER. The warranties shall specify that only new, and not reconditioned, parts may be used and installed when repair is necessitated by malfunction. The ESCO also warrants that all workmanship, materials, and equipment used in conjunction with the ECMs are in conformance with the Project Documents and are free from defects for the period, commencing with the date of the Individual ECM Acceptance for each ECM and continuing for the period set forth in Schedule K and Exhibit Correction of Warrantied Work. ESA 9/29/ Commencing with the date of the Individual ECM Acceptance for each ECM and continuing for the warranty periods set forth in Schedule K and Exhibit 2 for each ECM, or within such longer period of time as may be prescribed by law or by the terms of any applicable special warranty required by the Project Documents, the ESCO shall correct or replace all faulty, defective or Page 79

80 nonconforming Work related to any ECM, or malfunctioning portions thereof. If the ISSUER has reason to believe that any portion of the Work is faulty, defective, or nonconforming with the Project Documents, the ISSUER shall give the ESCO written notice as soon as reasonably practicable after the ISSUER s discovery. Within days of receipt of written notice from the ISSUER to correct such fault or defect, the ESCO shall correct the Work, unless the ISSUER has given the ESCO a written waiver of the ESCO s responsibility for the specific fault or defect. Notice may be given by telephone only in the event of an emergency situation. The ESCO shall bear all costs of replacing or correcting such faulty, defective or nonconforming Work Nothing contained in this Section shall be construed to establish a period of limitation with respect to any other obligation which the ESCO might have under the Project Documents. The establishment of the time period in which Work must be corrected as set forth in Paragraph above, relates only to the specific obligation(s) of the ESCO to correct the Work and has no relationship to the time in which its obligation to comply with the Project Documents may be enforced, nor to the time in which proceedings may be commenced to establish the ESCO s liability with respect to its obligations, other than to specifically correct the Work. Notwithstanding the provisions of this Paragraph, the ESCO shall, on written demand made by the ISSUER, at any time within the ten (10) year period following the date of the Certificate of Project Acceptance, promptly repair or replace all defective or non-conforming Work resulting from fraudulent misrepresentation, fraudulent concealment or gross negligence by the ESCO or its subcontractors in the performance of the Work ESCO Maintenance and Monitoring Responsibilities for ECMs. The ESCO shall be responsible for providing the maintenance, monitoring, repairs, and adjustments to the ECMs as set forth in Schedule L. All replacements, alterations or additions to ECMs by the ESCO shall become part of the ECMs and shall become the property of the ISSUER. Any replacements, alterations or additions made by the ESCO to the ISSUER's pre-existing equipment, or equipment acquired by the ISSUER during the term of this Agreement shall become part of said equipment and be owned by the ISSUER. The ESCO shall be compensated for such maintenance and monitoring services pursuant to Schedule O hereof. In the event of the ESCO s failure to provide required maintenance, service, repairs and adjustments to the ECMs, as provided in Schedule L or if an Event of Default exists pursuant to Section 11, the ISSUER may withhold fees due to the ESCO for such services until such repairs or adjustments are completed or such Event of Default is cured. The ISSUER shall notify the ESCO in writing when any payments are so withheld. The withholding of fees by the ISSUER under this Paragraph 7.3 shall not release the ESCO from its obligation to provide the Energy Savings Guaranty pursuant to Section 9 and Schedule N hereof ISSUER Operating and Maintenance Responsibilities for ECMs. The ISSUER shall be responsible for providing the maintenance, monitoring, service, repairs and adjustments to the ECMs as set forth in Schedule L. Except as set forth in Schedule L, the ISSUER shall not move, modify, remove, adjust, alter or change in any material way the ECMs, or any part thereof, during the term of this Agreement, without prior written approval of the ESCO, except in the event of any occurrence reasonably deemed by the ISSUER to constitute a bona fide emergency. The ISSUER acknowledges that substantial and long term deviations from the operating conditions set forth in the Schedules to this Agreement may constitute a Material Change in accordance with Paragraph 10.3 hereof. In addition to the responsibilities set forth in Schedule L, the ISSUER shall use its best efforts to maintain the Premises in good repair and to protect and preserve the ECMs in good repair and condition ESA 9/29/2015 Page 80

81 in accordance with applicable manufacturers' recommendations which shall be provided to the ISSUER by the ESCO and to maintain the operating conditions of all non ECM mechanical systems and energy related systems located at the Premises. The ESCO shall notify the ISSUER of any improper maintenance or repair as soon as ESCO has notice thereof. The ISSUER acknowledges that improper repairs or maintenance of the ECMs not seasonably corrected after notice may constitute a Material Change in accordance with Paragraph 8.5, and that the provisions of Paragraph 9.5 may be applicable Training by the ESCO. The ESCO shall conduct the training program described in Schedule J hereto ECMs Upgrades; Alterations. The ESCO shall have the right, at all times during the term of this Agreement, subject to the ISSUER's written approval, to modify or replace any of the ECMs or install additional ECMs and to revise any procedures for the operation of the ECMs or implement other procedures at the Premises provided that: i. such actions by the ESCO do not result in modifying the standards of comfort and service set forth in Schedule D without the express written approval of the ISSUER; ii. such modifications or additions to, or replacements of the ECMs, and any operational changes, or new procedures are necessary to enable the ESCO to achieve the energy savings guaranteed by the ESCO at the Premises; and iii. any costs incurred relative to such modifications, additions or replacements of the ECMs, or operational changes or new procedures shall be the responsibility of the ESCO. All modifications, additions or replacements of the ECMs or revisions to operating or other procedures shall be described in a supplemental schedule(s) to be provided to the ISSUER for approval, which shall not be unreasonably withheld, and incorporated into this Agreement provided that any replacement ECM shall be new and have equal or better potential to reduce energy consumption at the Premises than the ECM being replaced. The ESCO shall continuously update all ECM software unless the ESCO certifies to the ISSUER that a specific update would lower the energy and cost savings that are realized from that ECM. All replacements of and alterations or additions to the ECMs shall become part of the ECMs described in Schedule E and shall become the property of the ISSUER Malfunction and Emergencies. The ISSUER shall use its best efforts to notify the ESCO or its designee within forty-eight (48) hours after the ISSUER's actual knowledge of the occurrence of: i. Any material malfunction in the operation of the ECMs or any other energy related equipment or system; ii. Any material interruption or alteration of the energy supply to the Premises; iii. Any material alteration or modification in the ECMs or their operation; and iv. Any material alteration, modification or change in the Premises or the use of the Premises Responsibility for Certain ECM Malfunctions. The ESCO agrees to compensate the ISSUER for business expenses, damages to real or personal property, lost profits, lost revenues, resulting from malfunctioning ECMs due solely or in part to nonperformance or error by the ESCO Ownership of Certain Proprietary Property Rights. The ISSUER shall acquire no ownership interest in any software, formulas, patterns devices, secret inventions or processes, or copyrights, patents, and other intellectual and proprietary rights or similar items of property ESA 9/29/2015 Page 81

82 which are or may become used in connection with the ECMs. The ESCO shall grant, or otherwise lawfully furnish, to the ISSUER a perpetual, irrevocable royalty-free license for any and all software or other intellectual property rights necessary for the ISSUER to continue to operate, maintain, and repair the ECMs in a manner that will maximize energy consumption reductions beyond the expiration of this Agreement for at least twice the useful life of each ECM. 8. THE PREMISES 8.1. Description of the Premises. The Premises in which the ECMs are to be installed and services to be provided by the ESCO under this Agreement are described in Schedule A Ownership of Existing Property. The Premises and all equipment and materials existing at the Premises at the time of execution of this Agreement shall remain the property of the ISSUER Location and Access. The ISSUER shall provide sufficient space at the Premises for the installation and operation of the ECMs for the term of this Agreement, including access to office space with a telephone line, if necessary to allow the ESCO to perform required maintenance, monitoring and training services. The ISSUER shall provide access to the Premises for the ESCO and its employees or subcontractors to install, adjust, inspect, maintain and repair the ECMs in accordance with the terms of this Agreement or as required by the manufacturer during regular business hours, or such other reasonable hours as may be requested by the ESCO and acceptable to the ISSUER. The ESCO s access to correct any emergency condition shall not be unreasonably restricted by the ISSUER Harm to Structure of the Premises. The ESCO shall perform the Work under this Agreement and install the ECMs in such a manner so as not to harm the structural integrity of the Premises or their operating systems, except as specifically described in the Project Documents which have been approved by the ISSUER. The ESCO shall repair and restore, to its original condition immediately preceding the performance of the Work, any area of damage caused by its performance under this Agreement which has not been so described in the Project Documents and approved by the ISSUER Material Change Defined. A Material Change shall include any change in or to the Premises, not covered by Schedule A, whether structural, operational or otherwise in nature which reasonably could be expected, in the judgment of the ESCO to increase or decrease annual costs of energy usage. Actions by the ISSUER which constitute a Material Change include, but are not limited to, the following: i. Changes in the manner of use of the Premises by the ISSUER; or ii. Changes in the hours of operation for the Premises or for any equipment or energy using systems operating at the Premises; or iii. Permanent changes in the comfort and service conditions set forth in Schedule D; or iv. Changes in the occupancy of the Premises; or v. Changes in the structure of the Premises; or vi. Changes in the types and quantities of equipment used at the Premises; or vii. Modification, renovation or construction at the Premises; or viii. ISSUER s failure to provide maintenance of the ECMs pursuant to Paragraph 9.5 hereof; or ESA 9/29/2015 Page 82

83 ix. Any significant damage to the Premises or the ECMs caused by fire, flood, or other casualty or any condemnation affecting a significant portion of the Premises; or x. The permanent or temporary closing of a building at the Premises Reporting of Material Changes; Notice by ISSUER. The ISSUER shall use its best efforts to deliver to the ESCO a written notice describing all actual or proposed Material Changes in the Premises or in the operations of the Premises no fewer than thirty (30) days before any actual or proposed Material Change is implemented. Where Material Changes result because of a bona fide emergency or other situation which precludes advance notification, the ISSUER shall give notice as soon as reasonably possible after the event constituting the Material Change has occurred or was discovered by the ISSUER to have occurred Reported Material Changes; Adjustments to Baseline/Benchmarks. Any changes in energy usage which occur as the result of a Material Change shall be timely reviewed by the ESCO and the ISSUER to determine what, if any, adjustments to the Baseline/Benchmarks set forth in Schedule C are necessitated by such changes. The ESCO and the ISSUER agree that any adjustments made to the Baseline/Benchmarks shall be in accordance with generally accepted engineering principles Unreported Material Changes. Upon and after the date of Certification of Final Acceptance and in the absence of any reported Material Change(s) in the Premises or in their operations, if energy savings deviates more than ( %) percent during any month from projected energy savings for that month, after adjustment for normal deviations due to climatic conditions, the ESCO shall timely review such changes to ascertain the cause of such deviation. The ESCO shall report its findings to the ISSUER in a timely manner. The ESCO and the ISSUER may determine what, if any, adjustments to the Baseline/Benchmarks set forth in Schedule C are necessary. 9. ENERGY SAVINGS GUARANTY; ANNUAL RECONCILIATION 9.1. Interim Energy Savings. Energy savings achieved on or after the Commencement Date but before the date of the Certificate of Final Acceptance shall be credited to the ISSUER Actual Savings. Energy Use Savings for each ECM shall begin to accrue upon the execution of the Individual ECM Acceptance Form (Exhibit 2) contained herein. In accordance with Schedule A of this agreement, the ESCO shall document the completed installation of each ECM. The ESCO shall notify the ISSUER in writing upon successful completion of each ECM. The ISSUER shall have access to inspect all construction related activities, equipment, documentation, and witness measurement and verification activities subject to this Agreement. Energy Use Savings for completed facilities shall be quantified in accordance with Schedule F (Savings Measurement & Verification Calculation Formulae). Upon inspection and approval by the ISSUER for each completed ECM, the ISSUER shall provide the ESCO a Certificate of Acceptance. The ESCO shall use the date of certification to calculate the accrued Interim Energy Use Savings achieved for each ECM. The ISSUER shall keep and hold all Interim Period Energy Use Savings in a reserve account to be used in accordance with this Section. If the Final Project Acceptance Date is after the Projected Acceptance Date, the ISSUER may use Interim Period Energy Use Savings to pay any project financing debt then due and payable. If the Interim Period Energy Use Savings are insufficient to pay any portion of the project financing debt service, then due, the ESCO shall pay to the ISSUER any shortfall within fifteen (15) business days following notification of the shortfall, which shall be used to cover any due or unpaid financing debt. If completion is after the Projected Acceptance Date, the Final Project Acceptance Date shall become the guarantee period start date. All accrued ESA 9/29/2015 Page 83

84 Interim Period Energy Use Savings shall be credited to the overall Energy Savings Guaranty under the Agreement Annual Energy Savings Guaranty. The ESCO shall guarantee energy and operational savings from the date of the Certification of Final Acceptance and for ( ) years following such date (the Energy Savings Guaranty ). The ESCO has formulated and guaranteed the annual level of cost savings as provided for in Schedule N. The ESCO will achieve these savings each year as a result of the performance by ESCO of the services specified in this Agreement utilizing the Methods of Savings Measurement and Verification set forth in Schedule F Annual Review, Reconciliation and Reimbursement. Cost savings achieved at the Premises shall be reported, reconciled and verified pursuant to the provisions of Schedule F. If any annual review, reconciliation and verification of energy savings reveals that the ESCO has failed to achieve the annual guaranteed energy savings and operating cost savings set forth in Schedule N, the ESCO shall pay the ISSUER or the ISSUER S designee, as may be directed by the ISSUER, the difference between the annual amount guaranteed and the amount of actual annual cost savings achieved at the Premises. The ESCO shall remit such payments to the ISSUER not later than thirty (30) calendar days of written demand therefore by the ISSUER Utility Rebates. Utility rebates secured or obtained due to the installation of the ECMs at the Premises shall belong to the ISSUER Monitoring, Savings Measurement and Verification and any Post-Acceptance Training Fees. Payment to the ESCO for maintenance, monitoring, savings measurement, verification and reporting, and Post-Acceptance Training services performed after the Certificate of Project Acceptance shall be made by the ISSUER pursuant to and in accordance with Schedule O. 10. GENERAL TERMS AND CONDITIONS Independent Contractor Status. Under this Agreement, the ESCO, its employees, agents, or assigns shall be designated as an Independent Contractor and shall not represent otherwise to any person when providing its services Compliance with Laws. The ESCO and its subcontractors shall comply with all laws, rules regulations and codes applicable to the performance of this Agreement. Except where expressly required by applicable laws and regulation, the ISSUER shall not be responsible for monitoring the ESCO s compliance with any laws or regulations. When the ESCO observes conflicting regulatory requirements, it shall notify the ISSUER in writing immediately. If the ESCO performs any of the Project knowing or having reason to know that the Work or services required to implement the Project are contrary to such laws, rules and regulations, the ESCO shall endure all costs arising there from Responsibility for Damages. The ESCO shall be responsible for all loss or damage to the Work, the Premises, or to improvements or personal property thereon caused by the ESCO or its subcontractors Right to Audit. The ISSUER shall have the right to have access to and audit all of the ESCO s records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda and similar data related to this Agreement. In addition, the ISSUER or its ESA 9/29/2015 Page 84

85 authorized representative shall have access to the ESCO s facilities and shall be provided adequate and appropriate work space, in order to conduct audits in compliance with this Article Assignment. The ESCO acknowledges that the ISSUER is induced to enter into this Agreement by, among other things, the professional qualifications of the ESCO. The ESCO agrees that neither this Agreement nor any of its right or obligation hereunder shall be assigned in whole or in part, without the prior written approval of the ISSUER Duty to Indemnify. The ESCO shall defend, indemnify, keep and save harmless the ISSUER and its agents and employees against all suits, claims, damages, losses and expenses, including attorney's fees, caused by, arising out of, or incidental to, the wrongful or negligent performance under this Agreement by the ESCO or its subcontractors to the full extent as allowed by the laws of the State of North Carolina. The ISSUER shall promptly notify the ESCO of any suits or claims related to this Agreement including the nature of the suit or claim. The ESCO, at its sole expense, shall settle or defend and control the defense of any suit based upon such claim or claims. In the event of any such injury, including death, or loss or damage, or claims therefore, the ESCO shall give prompt notice to the ISSUER. The ESCO shall cause its subcontractors to include a substantially identical indemnity and shall include the ISSUER as a named indemnitee under their subcontracts Effect of Statutory Limitations. In the event of any claim against the ISSUER or against any of its officials or employees, in either their personal or official capacities, made by any direct or indirect employee or agent of the ESCO or of any subcontractor, the ESCO s indemnification obligation shall not be affected by any limitation on the amount or type of damages, compensation or benefits payable to said employee or agent contained in any other type of employee benefit act Intellectual Property Claims Indemnification. The ESCO shall protect, defend, indemnify and hold the ISSUER harmless against and from any and all claims, judgments, amounts paid in settlement, costs and expenses, including attorneys' fees relating to alleged patent, trademark or copyright infringement, misappropriation of proprietary rights, or trade secrets or similar claims, resulting from actions taken by the ESCO in connection with this Agreement Liability; Joint and Several Liabilities, Limitation on Liability. The ESCO shall be liable to the ISSUER for any breach or default resulting from ESCO s failure to comply with the terms of this Agreement. Any review, approval, acceptance or payment for any and all of the ESCO s performance by the ISSUER shall not relieve the ESCO of its responsibility for the Project. This provision in no way limits the ISSUER S rights and defenses against the ESCO either under this Agreement or otherwise in law or in equity. Each party s liability under this Agreement, whether in contract or in tort, shall be limited to two (2) times the value of contract. The preceding limitation on liability shall not apply to the payment of cost and damage awards referred to in Paragraph , to claims for injury to persons or damage to property caused by ESCO s negligence or willful or wanton conduct. The limitation on liability does not apply to the receipt of court cost or attorney s fees that might be awarded by a court in addition to damages after litigation based on this Agreement Force Majeure. Neither Party shall be deemed to be in default of its obligations hereunder if and so long as it is prevented from performing such obligations by any act of war, hostile foreign action, nuclear explosion, riot, strikes, civil insurrection, quarantine ESA 9/29/2015 Page 85

86 restrictions, delays of common carriers, earthquake, hurricane, tornado, or other catastrophic natural event or act of God No Waiver. The failure of ISSUER or the ESCO to insist upon the strict performance of the terms and conditions hereof shall not constitute or be construed as a waiver or relinquishment of either Party's right to thereafter enforce the same in accordance with this Agreement in the event of a continuing or subsequent default on the part of the ISSUER or the ESCO. Every such right and power in the event of a default may be exercised from time to time and as often as may be deemed expedient Severability. It is agreed that the illegality or invalidity of any term or clause of this Agreement, shall not affect the validity of the remainder of this Agreement and this Agreement shall remain in full force and effect as if such illegal or invalid term or clause were not contained herein, provided that the remaining portions of the Agreement shall be construed to effectuate as nearly as possible the apparent intent of the term or clause Complete Agreement; Amendments. This Agreement, when executed, together with all Project Documents and Schedules referred to in Paragraph 4.3 and any other exhibits or attachments referred to in this Agreement shall constitute the entire agreement between the Parties and this Agreement may not be amended or modified except by a written agreement signed by the Parties hereto Further Documents. The Parties shall execute and deliver all documents and perform all further acts that may be reasonably necessary to effectuate the provisions of this Agreement Applicable Law. This Agreement and the construction and enforceability thereof shall be interpreted under the laws and solely in the courts of the State of North Carolina Notices. All notices required under this Agreement shall be in writing and shall be deemed properly served if delivered in person to the individual to whom it is addressed or, three (3) days after deposit in the United States mail, if sent postage prepaid by United States registered or certified mail, return receipt requested to the persons listed as follows: For the Issuer: For the ESCO: Non-appropriation of Funds. If during any fiscal period, funds are insufficiently appropriated and budgeted to pay the ESCO under this Agreement, the ISSUER shall notify the ESCO in writing of such occurrence, not less than days prior to end of such applicable fiscal period and this Agreement shall terminate on the last day of the fiscal period for which appropriations were made without penalty or expense to the ISSUER of any kind whatsoever, except as to the portions of payments herein agreed upon for which ESA 9/29/2015 Page 86

87 the ISSUER and/or other funds shall have been appropriated and budgeted or are otherwise available Termination for Convenience by the ISSUER. Subsequent to the date of the Certification of Final Acceptance, this Agreement may be terminated at the sole discretion of the ISSUER in accordance with the provisions of this Paragraph The ISSUER shall deliver written notice to the ESCO no less than 30 days from the date of termination. Until the specified date of termination of this Agreement, the ESCO s obligation to report, reconcile and verify the energy savings achieved during the guaranty period preceding termination remains in full force and effect, as does its obligation, pursuant to Section 9 of this Agreement, to remit payment to the ISSUER in the event that the energy savings have not been achieved at the level guaranteed by the ESCO. If the end of the notice period does not coincide with the end of the annual guaranty period all calculations of payments shall be prorated. The termination of this Agreement by the ISSUER shall release the ESCO from its obligation to provide maintenance, monitoring and training services after the effective date of termination, as well as its obligation to provide the Energy Savings Guaranty after the termination date. Termination by the ISSUER shall release it from the obligation to make any payments to the ESCO for maintenance, monitoring and training services after the termination date, provided, however, that the ISSUER is responsible for payment for maintenance, monitoring and training services performed in accordance with the terms of this Agreement prior to the termination date. 11. EVENTS OF DEFAULT OR BREACH; REMEDIES Events of Default By the ISSUER. Each of the following events or conditions shall constitute an "Event of Default" by the ISSUER: i. any failure by the ISSUER to pay the ESCO any sum due for a service and maintenance period of more than sixty (60) days after written notification by ESCO that ISSUER is delinquent in making payment and provided that ESCO is not in default in its performance under the terms of this Agreement; ii. any other material failure by the ISSUER to perform or comply with the terms and conditions of this Agreement, including breach of any covenant contained herein, provided that such failure continues for sixty (60) days after notice to the ISSUER demanding that such failures to perform be cured or if such cure cannot be effected in sixty (60) days, the ISSUER shall be deemed to have cured default upon the commencement of a cure within sixty (60) days and diligent subsequent completion thereof; or iii. any representation or warranty furnished by the ISSUER in this Agreement, which was false, or misleading in any material respect when made By the ESCO. Each of the following events or conditions shall constitute an "Event of Default" by ESCO: ESA 9/29/2015 iv. the standards of comfort and service set forth in Schedule D (Standards of Comfort) are not provided due to failure of ESCO to properly design, install, maintain, repair or adjust the Equipment except that such failure, if corrected or cured within thirty (30) days after written notice by ISSUER to ESCO demanding that such failure be cured, shall be deemed cured for purposed of this Contract; Page 87

88 v. any representation or warranty furnished by ESCO in this Agreement is false or misleading in any material respect when made; vi. failure to furnish and install the Equipment and make it ready for use within the time specified by this Agreement as set forth in Schedules E (ECMs and Equipment to be Installed by ESCO) and I (Construction and Installation Schedule); vii. provided that the operation of the Premises is not adversely affected and provided that the standards of comfort in Schedule D (Standards of Comfort) are maintained, any failure by ESCO to perform or comply with the terms and conditions of this Agreement, including breach of any covenant contained herein except that such failure, if corrected or cured within thirty (30) days after written notice by the ISSUER to ESCO demanding that such failure to perform be cured, shall be deemed cured for purposes of this Contract; viii. any lien or encumbrance is placed upon the Equipment by any subcontractor, laborer, supplier or lender of ESCO; ix. the filing of a bankruptcy petition whether by ESCO or its creditors against ESCO which proceeding shall not have been dismissed within ninety (90) days of its filing, or an involuntary assignment for the benefit of all creditors or the liquidation of ESCO; x. Any change in ownership or control of ESCO without the prior approval of the ISSUER, which shall not be unreasonably withheld; or xi. failure by ESCO to pay any amount due Agency or perform any obligation under the terms of this Contract or the Energy Savings Guarantee as set forth in Schedule N (Energy Savings Guarantee) Remedies upon Default Remedies upon Default by the ISSUER. In an event of default by the ISSUER, the ESCO may exercise all remedies available at law or in equity or statute other appropriate proceedings including bringing an action or actions from time to time for recovery of amounts due and unpaid by ISSUER, and/or for damages which shall include all costs and expenses reasonably incurred in exercise of its remedy. Election of one (1) remedy is not a waiver of other available remedies Remedies upon Default by ESCO. In the Event of Default by ESCO, ISSUER may exercise any and all remedies at law or equity or statute, or institute other proceedings, including, without limitation, bringing an action or actions from time to time for specific performance, and/or for the recovery of amounts due and unpaid and/or for damages, which shall include all costs and expenses reasonably incurred, including attorney's fees. Election of one (1) remedy is not a waiver of other available remedies. In addition, the ISSUER shall have the following rights: ESA 9/29/ Right to Terminate the ESCO s Performance of the Work. If the ESCO fails or refuses to perform the Work with such diligence as to allow completion of the Work substantially in accordance with the Project Installation Schedule, or commits a material breach of any other provision of this Agreement or the Project Documents, and provided that such breach continues for thirty (30) days after written notice to the ESCO demanding that such breach be cured or if cure cannot be effected within thirty (30) days, or the ESCO fails to propose and commence a cure acceptable to the ISSUER within such thirty (30) days, the ISSUER may terminate the ESCO s right to Page 88

89 proceed with the Work as specified herein. In no event shall the ISSUER have any obligation to compensate the ESCO for delays arising pursuant to the ESCO s failure or refusal to complete the Work and damages arising in connection therewith. In such case, the ISSUER shall give the ESCO and its surety written notice of intention to terminate the ESCO s right to complete the Work and the reason therefore and, unless within seven (7) business days the delay or violation shall cease or a cure acceptable to the ISSUER for correcting the situation is proposed, the ISSUER may issue a termination notice to such effect for the ESCO and its surety. Thereupon, the surety will be given the opportunity to complete the Work in accordance with the Project Documents. Such completion may include, but not be limited to, the use of a completing ESCO, satisfactory to the ISSUER, pursuant to a written takeover agreement, the payment of a sum of money required to allow the ISSUER to complete the Work, or other arrangements agreed to by the ISSUER and the surety. If within seven (7) business days following the issuance of the termination notice, the surety fails to notify the ISSUER that it intends to exercise its right to undertake the Work, the ISSUER may take over the Work, exclude the ESCO from the Premises and take possession of all of the ESCO s tools, appliances, equipment and machinery at the Premises and use the same to the full extent they could have been used by the ESCO (without liability for trespass or conversion), incorporate into the Work all materials and equipment stored at the Premises and finish the Work as the ISSUER may deem expedient. In the event the ISSUER terminates the ESCO s right to complete the Work under this Paragraph , the ESCO shall not be entitled to receive further payments until a Certificate of Acceptance has been delivered pursuant to Article 8 hereof specifying the amount, if any, payable to the ESCO. If the ISSUER s expenses in completing the Work exceed the ESCO s Compensation for the Work, the ESCO shall pay the difference to the ISSUER upon demand therefore. A Certificate of Beneficial Use and Acceptance directing payment to the ESCO for any portion of completed Work may be issued only if the notification required pursuant to Article 7 has been delivered by the ESCO. If the ESCO is not able to deliver such notification, the ISSUER shall not execute and deliver a Certificate of Acceptance and may terminate this Agreement in accordance with Article 11 and may pursue any and all remedies provided therein Right to Offset. Any additional costs incurred by the ISSUER in the event of termination of this Agreement for breach or default or otherwise resulting from the ESCO s performance or nonperformance under this Agreement, and any credits due or overpayments made by the ISSUER may be offset by use of any payment due for the Work or other services completed before the termination for a breach or default or before the exercise of any remedies. If such amount offset is insufficient to cover such excess costs, the ESCO shall be liable for and promptly remit to the ISSUER the difference upon written demand therefore. This right to offset is in addition to and not a limitation of any other remedies available to the ISSUER. 12. REPRESENTATIONS AND WARRANTIES Representations of the Parties. Each party warrants and represents to the other that: ESA 9/29/2015 Page 89

90 i. It has all requisite power, authority, licenses, permits, and franchises, corporate or otherwise, to execute and deliver this Agreement and perform its obligations hereunder; ii. Its execution, delivery, and performance of this Agreement has been duly authorized, executed and delivered by the signatories so authorized, and it constitutes its legal, valid, and binding obligation; and iii. It has not received any notice, nor to the best of its knowledge is there pending or threatened any notice, of any violation of any applicable laws, ordinances, regulations, rules, decrees, awards, permits or orders which would materially and adversely affect its ability to perform hereunder Representations and Warranties by the Issuer. The ISSUER hereby warrants and represents to the ESCO that: i. It will provide throughout the term of this Agreement (or cause its energy suppliers to furnish) to the ESCO, upon its request, copies of all available records and data concerning energy usage for the Premises including but not limited to the following data: utility records and rate schedules; occupancy information; descriptions of any major changes in the structure or use of the buildings or heating, cooling, lighting or other systems or energy requirements; descriptions of all energy consuming or saving equipment used in the Premises; descriptions of energy management procedures presently utilized; and any prior energy analyses of the Premises. The ISSUER shall make knowledgeable employees and agents available for consultations and discussions with the ESCO concerning energy usage of the Premises. ii. The ISSUER has not entered into any leases, contracts or agreements with other persons or entities regarding the leasing of energy efficiency equipment or the provision of energy management services for the Premises or with regard to maintaining any of the energy related equipment located in the Premises Representations and Warranties by the ESCO. In addition to the other representations and warranties contained in the Project Documents, the ESCO represents and warrants the following to the ISSUER as an inducement to the ISSUER to execute this Agreement, which shall survive the execution and delivery of this Agreement and the Final Completion of the Work. i. That it is financially solvent, able to pay its debts as they mature and possessed of sufficient working capital to complete the Work and perform its obligations under this Agreement; ii. That it and each of its employees, agents and subcontractors of any tier are competent to perform its obligations under this Agreement; iii. That it is able to furnish the plant, tools, materials, supplies, equipment and labor required to complete the Work and perform its obligations hereunder and has sufficient experience and competence to do so; iv. That it is authorized to do business in the State of North Carolina and is properly licensed by all necessary governmental and public and quasi-public authorities having jurisdiction over it and over the Work and the Premises; v. That its execution of this Agreement and its performance thereof is within its duly authorized powers; and vi. That its duly authorized representative has visited the Premises familiarized itself with the local conditions under which the Work is to be performed and correlated its observations with the requirements of the Project Documents. ESA 9/29/2015 Page 90

91 13. Miscellaneous 13.1 E-Verify. As required by G.S (Session Law ), ESCO certifies that it, and each of its subcontractors performing Work under this Agreement complies with the requirements of Article 2 of Chapter 64 of the NC General Statutes, including the requirement for each employer with more than 25 employees in North Carolina to verify the work authorization of its employees through the federal E-Verify system Suspension and Debarment. The ESCO certifies that with regard to: B. DEBARMENT AND SUSPENSION - To the best of its knowledge and belief that it and its principals: (4) are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal, State, or local government agency; (5) have not within a 3-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (6) are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (A)(2) of this certification; and have not within a 3-year period preceding this application/proposal had one or more public transactions (Federal, State, or local) terminated for cause or default Drug Free Workplace. ESCO certifies that it will comply by: (8) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violation of such prohibition; (9) Establishing a drug-free awareness program to inform employees about - (a) The dangers of drug abuse in the workplace; (b) The grantee's policy of maintaining a drug-free workplace; (c) Any available drug counseling, rehabilitation, and employee assistance programs; and (d) The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; (10) Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph (1) above; ESA 9/29/2015 Page 91

92 (11) Notifying the employee in the statement required by paragraph (1), above, that, as a condition of employment under the grant, the employee will - (a) Abide by the terms of the statement; and (b) Notify the employer of any criminal drug statue conviction for a violation occurring in the workplace no later than five days after such conviction; (12) Notifying the agency within ten days after receiving notice under subparagraph (4)(b), above, from an employee or otherwise receiving actual notice of such conviction; (13) Taking one of the following actions, within 30 days of receiving notice under subparagraph (4)(b), above with respect to any employee who is so convicted - (a) Taking appropriate personnel action against such an employee, up to and including termination; or (b) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; (14) Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (1), (2), (3), (4), (5), and (6), above Governing Law. This Agreement is made under and shall be governed and construed in accordance with the laws of the State of North Carolina Public Records. This Agreement shall be governed in accordance with G.S. 132 regarding Public Records Records Retention. All records pertaining to this Agreement shall be maintained in accordance with the North Carolina Department of Cultural Resources, Division of Archives and Records, Government Records Section, General Schedule for State Agency Records or other applicable State law. The State Auditor and the using agency s internal auditors shall have access to persons and records as a result of all Agreements entered into by State agencies or political subdivisions in accordance with G.S and Session Law , Section 21 (i.e., the State Auditors and internal auditors may audit the records of the contractor during the term of the contract to verify accounts and data affecting fees or performance). The ESCO shall retain all records for a period of six (6) years following completion of the contract or until any audits begun during this period are completed and findings resolved, whichever is later. ESA 9/29/2015 Page 92

93 IN WITNESS WHEREOF, the Parties have executed this Energy Services Agreement by their authorized signatures as of this day of, 20. THE ISSUER: THE ESCO: BY: Title: BY: Title: ESA 9/29/2015 Page 93

94 APPENDIX VI MATRIX

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