Edwards AFB Enhanced Use Lease Program

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Edwards AFB Enhanced Use Lease Program
Welcome

• Patrick H. Price
• MWH Americas, Inc

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Introduction and Meeting Overview

• Exits
• Restrooms
• Meeting Binders
• Feel free to leave the room prior to breaks
• Please mute or turn-off cell phones
• Please write all questions on Question Forms
• Questions only official if written on the Form
  and submitted
• Questions of clarification may be taken during
  the briefings
• During the meeting pass the Forms to the right
• QA session will be held in the afternoon
• Official answers will be posted on
  http//www.pscmhc.com
• Questions
• Meeting Overview

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EUL Program Overview

• Judith Tepperman
• AFRPA/COO
• 7 February 2008

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Agenda

• AFRPA Mission
• Air Force EUL Program
• Due Diligence Process
• EUL Process
• Timeline/Milestones

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AFRPA Mission
Mission StatementAir Force Real Property
Agency To acquire, dispose and manage all Air
Force-controlled real property worldwide Vision To
be the preeminent DoD real property manager
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Air Force EUL Program

• A lease of underutilized land, natural
  infrastructure, equipment and/or buildings for
  consideration equal to the assets fair market
  value
• Authority 10 USC 2667, Under PL 106-398,
  National Defense Authorization Act
• Corporate Program to support the Base and its
  Mission
• Proceeds used to sustain, restore and modernize
  Air Force (AF) infrastructure
• Offers win-win benefits for AF installations,
  developers, and the local communities

Unlocking Returning the Value
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Due Diligence Process

• EUL Handbook established framework for EUL
  program
• Projects are evaluated and prioritized based on
  risk and market return through a three phase
  process
• Phase I Concept Opportunity Study evaluates
  potential returns and risks of an opportunity
• Phase II Business Case Analysis identifies
  highest and best use of asset within AF
  constraints, evaluates viability, develops
  acquisition strategy and Request For
  Qualification allows for competitive selection
  process
• All relevant stakeholders convene at Murder
  Board to recommend Highest Ranking Offeror to
  Source Selection Authority
• Phase III Congressional Notification provided
  once material facts of lease are defined
• Transparency

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Current and Potential EULs

Hill
Beale
Andrews
AF Academy
Basewide Studies (Ph I)
Nellis PV Array

• Barksdale
• Charleston
• Creech
• Davis-Monthan
• Dobbins
• Dover
• Elmendorf
• Fairchild
• Keesler
• Lackland
• Luke

• Malmstrom CTL
• Maxwell
• McGuire
• Offutt
• Patrick
• Peterson
• Pope
• Randolph
• Scott
• Tinker
• Wright-Patt

Vandenberg
Edwards
Kirtland
Luke
Eglin WWTP
Okaloosa Airport
Eglin/Santa Rosa
MacDill
Renewable Energy EUL
Current EULs (Ph II/III)
Completed EUL
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Other Energy EULs
AFRPA is currently engaged in three commercial
grade utility scale solar energy EUL projects,
each at least 100MW
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Edwards AFB Energy EUL Process
Executive Steering Group Review SAF/IEI Source
Selection Approval
12 - 18 MONTHS
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Project Deal Team

• Deal Team / Acquisition Support Team
• Judi Tepperman, AFRPA
• Jerry Merryman, AFMC
• Enrique Torres, 95 ABW/CE
• Jim Snook, AFCESA,
• Mary Cerniglia-Moser, SAF/FMC
• Brian Lally, HQ AF/A7C
• Michael Kelly, SAF/GCN (advisor)
• Brenda Roesch, AFCEE (advisor)
• Contractor Support
• PRESS Contract, MWH Patrick Price
• Booz Allen Hamilton Peter LaPuma
• Raymond James - Jorge Garza
• Source Selection Authority
• SAF/IEI, Ms. Ferguson

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Edwards AFB Energy EUL Proposed Phase II Timeline

• Release RFQ
• 28 Jan 08
• Edwards Site Visit
• 07 Feb 08
• Deadline for RFQ Responses
• 11 April 08
• Select HRO
• 11 July 08

Today Site Visit 07 Feb 08
Receive Proposals 11 April 08
Select HRO 11 July 08
Industry Day Sept 07
Release RFQ 28 Jan 08
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Future Milestones

• Select Highest Ranked Offeror (HRO)
• Begin negations with HRO
• Develop Business and Leasing Plan
• Negotiate Financial and Lease Terms
• Lease Signing

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Overview of EUL Solicitation Selection Process

Ms. Brenda Roesch Program Mgr Base
Conversion Brenda.roesch_at_brooks.af.mil Comm.
210-536-1908
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Overview

• Notes on EUL Acquisitions
• Listing of Solicitation Steps
• Listing of Evaluation Steps
• Sample Summary and Associated Elements

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Notes on the Deal

• Enhanced Use Leases
• AF is the lessor
• Non-F.A.R. transactions commercial (like)
• Competition is the norm
• Looking for the Best Value to the AF
• right development
• We will not level the playing field (share an
  aspect of your proposal with others)
• Ends in a negotiated lease of 5 to 50 years

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Typical Solicitation Steps

• Preliminary actions
• Establish solicitation website
• Define the evaluation factors
• Strategic approach to financing, developing, and
  managing the EUL project(s)
• Demonstrated organizational and financial
  capabilities
• Past performance on similar projects
• Value offered to the Air Force
• Invite industry to comment on the Request For
  Qualifications (RFQ)
• Refines optimizes the pending action
• Obtains industry buy-in
• Finalize RFQ solicit offers

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Typical Solicitation Steps

• Host Industry Site Visit
• Announced on the Federal Business Opportunities
  website

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The Goal A Lease
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Evaluation Steps

• Receive evaluate offers
• Potential evaluation factors
• Business Plan
• Development Plan
• Property Management Plan
• Qualifications
• Past Performance
• Value offered

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Evaluation Steps (cont.)

• Source Selection Process
• Source Selection Authority (SSA) Briefing
• Briefing includes
• Overview of each offerors EUL project concept
• Evaluation of each offerors proposal
• Comparison between the anticipated values of the
  proposals Fair Market Value
• Scoring analysis if the in-kind consideration
  could be scored as a lease/purchase or capital
  lease
• Overview of Highest Ranking Offers (HRO)
  qualifications evaluation teams basis for this
  designation

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Evaluation Steps (cont.)

• Source Selection Process (cont.)
• Senior advisors review briefing
• Review all aspects of the briefing including HRO
  designations
• Recommend presenting the brief to SSA
• Source Selection Authority (SSA)
• Receives evaluation briefing
• Receives advisors comments and recommendations
• Considers any recommendations
• Selects the Highest Ranking Offer (HRO)
• Debrief offerors not selected

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The HRO Milestone
Exceptional Plus
E
Exceptional
E
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Sample Proposal Summary
Notional Numbers
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Color Ratings Definitions
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Risk QualificationsRatings Definitions
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Confidence Assessment Ratings
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AF EUL Resources Website Links
AFRPA EUL Website http//www.safie.hq.af.mil/afrpa
/eul/index.asp MWH PRESS Website http//www.pscm
hc.com/index.htm JLL PRESS Website http//www.jl
lpress.com FPS PRESS Website http//www.theconcou
rsegroup.com/eul.html AM PRESS
Website http//www.alvarezandmarsal.com/en/global_
services/real_estate/industries/eul/experience.htm
l Ontario, CA Energy EUL Website
https//www.enstg.com/signup (conference code
REN96690)
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Please write out questions on the Question Forms
provided
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Break
20 minute break

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Edwards AFB Enhanced Use Lease Program
Business Arrangement

• Michael Williams
• MWH Americas, Inc

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Overview

• Business Plan Overview
• Government Lease Financial Consideration
• Lease Duration
• Expiration of Lease Agreement
• Private Sector Financing
• Lessees Equity Contribution
• Lockbox Accounts
• Additional Business Plan Requirements
• Questions

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Business Plan Overview

• The Lessee must execute a comprehensive Business
  Plan that addresses the methodology for
  financing, energy production and sales, and
  satisfying reporting responsibilities associated
  with the Project
• Private sector financing in the form of debt and
  equity contributions to support the Project may
  be required
• The Government requires that any financing be in
  place for a simultaneous financial and
  transactional closing

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Government Rent Consideration

• The Government shall receive financial
  consideration in the form of cash or in-kind
  consideration of not less than the fair market
  value of the leasehold of the EUL Assets
• In-kind consideration could include Edwards AFB
  receiving electrical power and/or the Renewable
  Energy Certificates (REC) for power it receives
• A detailed payment schedule identifying the
  amount and timing of all payments shall be
  required
• Any power purchase agreement or similar agreement
  for the Air Force to receive power and/or REC
  shall be executed separately from the Lease

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Lease Duration
The duration of the lease shall be the minimal
period necessary to support the financing of the
Project, but not to exceed fifty (50) years

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Expiration of Lease Agreement

• At the expiration of the Lease there are three
  options available at the sole discretion of the
  Government
• The parties may negotiate an extension of the
  Lease provided that
• The Project has been and is being properly
  maintained and managed in accordance with Lease
• The Lessee is not in default of any of its
  obligations under the Lease
• The Government determines, in its sole
  discretion, that renewal is in the best interest
  of the Government, and acceptable by, both
  parties
• Upon expiration of the Lease or any extension
  thereof, the Lessee shall demolish all
  facilities, improvements, and properly abandon or
  remove utilities from the leased land restore
  the land to the reasonable satisfaction of the
  Government and then surrender the land to the
  Government at no cost
• Upon expiration of the Lease or any extension
  thereof, the facilities and improvements shall
  revert or be transferred to the Government at no
  cost

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Private Sector Financing

• The Lessee may secure private sector financing to
  execute the Project
• The Lessee shall include a copy of the final term
  sheet and commitment letter for any financing in
  the Business Plan

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Lessees Equity Contribution

• The Lessee shall make an equity contribution in
  the Project to satisfy the Lenders requirements.
  This equity contribution must be delivered at
  transaction closing and shall be either cash or
  an irrevocable letter of credit or a combination
  thereof.

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Lockbox Accounts

• The Lessee shall establish certain lockbox
  accounts
• In-Kind Consideration Account
• Replacement Reserve Account
• Impositions Reserve Account

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Additional Business Plan Requirements

• The Lessee shall provide a Financial Pro Forma
  for the Project that reflects all sources and
  uses of funds for inclusion in the Business Plan
  to include the detailed development budget,
  financing, power sales (including Power Purchase
  Agreements), and management. The Financial Pro
  Forma shall reflect all the agreed-to terms of
  the Business and Leasing Plan.
• This Project is expected to stand alone
• The Lessee will be prohibited from cross
  collateralization and cross default of the
  Project with any other assets.
• All construction management, development
  management, property management, and any other
  fees that are accrued or paid to the Lessee or
  related parties during the life of this project
  shall be disclosed.

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Additional Business Plan Requirements (cont)

• The Lessee shall be responsible for the payment
  of any property or other taxes assessed on the
  project
• The Lessee must agree to the payment of a
  Government transaction fee as a requirement of
  executing the lease at the time of the lease
  signing
• The Lessee shall assume the transaction fee will
  be five (5) percent of the fair market value of
  the leasehold of the EUL Asset
• The Lessee shall keep and maintain accurate, true
  and complete books, records, accounts and reports

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Questions

• Please write out questions on the Question Forms
  provided

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Edwards AFB Enhanced Use Lease Program
Development Plan

• Patrick H. Price
• MWH Americas, Inc

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Overview

• Site Development Plan
• Design and Construction Plan
• Construction Management Plan
• Certifications, Zoning and Permit Requirements
• Questions

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Site Development Plan

• Addresses methodology for the design and
  development of the project site.
• Land Use Restrictions
• Site Development Design
• Force Protection
• Conservation

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Design and Construction Plan

• Describes the scope of work for the project
• General Requirements
• Specific Requirements
• Utilities and Infrastructure
• Site Access

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Design and Construction Plan General Requirements

• Compliance with all applicable codes
• Meet the basic requirements of the RFQ

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Design and Construction Plan Utilities and
Infrastructure

• Identify plans to access all required utilities
• Gas
• Power
• Water
• Etc

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Design and Construction Plan Site Access

• Identify plans to access the site
• During Construction
• After Construction
• New Roads Planned
• Surfacing of Current Roads

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Construction Management Plan
Provide a Construction Management Plan to ensure
quality control in design and construction. The
plan establishes procedures for coordinating,
updating, and implementing design and
construction schedules.
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Construction Management Plan

• The Construction Management Plan, at a minimum,
  will address the following
• Design and Review Conferences
• Schedules
• Pre-Construction Conference
• Quality Control
• Haul Routes
• Disposal Site
• Payment and Performance Bonds
• Insurance Requirements

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Construction Management PlanQuality Control

• QC program requires compliance with applicable
  standards and codes and with final design and
  construction plans
• Government reserves the right to full inspection
  to ensure compliance with QC program and final
  design and construction plans
• Lessee to retain a certified professional, not
  affiliated with Lessee, to administer QC plan
• Certified professional will perform inspections
  and provide certifications of compliance if
  applicable with the Certifications, Zoning and
  Permit requirements

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Construction Management PlanInsurance
Requirements

• Lessee to ensure appropriate insurance is in
  place for the property to include all information
  found in Appendix M Insurance Requirements, of
  the RFQ

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Certifications, Zoning and Permit Requirements

• Professional Certification
• All drawings, specs, engineering calculations
  must be certified by a licensed architect or
  Professional Engineer currently licensed by the
  State of California

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Certifications, Zoning and Permit Requirements

• Codes, Standards, and Regulations
• Kern County Codes
• 15 USCS 2227 (Fire Safety Systems)
• DoD Antiterrorism Standards for Buildings
  (Unified Facilities Criteria 4-010-D1)

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Certifications, Zoning and Permit Requirements

• Permits
• Lessee required to acquire all permits and pay
  all required fees

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Questions

• Please write out questions on the Question Forms
  provided

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Edwards AFB Enhanced Use Lease Program
Property Management

• Rusty Martin
• MWH Americas, Inc

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Overview

• Property Management Overview
• Property Management Approach
• Property Operations and Maintenance Strategy
• Property Operations and Management Plan
• Sales and Marketing Plan
• Severability Plan
• Facilities Maintenance Plan
• Capital Repair and Replacement Plan
• Environmental Management Plan
• Community Relations Plan
• Historic Preservation Plan
• Questions

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Property Management Overview

• Proposal shall include a summary of the proposed
  property management methodology, and operations
  and maintenance methodology to demonstrate how
  well the Offeror can manage the proposed project
  concept

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Property Management Approach

• Provide a concise synopsis of the proposed
  property management approach, to include
• Narrative description of the property management
  organization
• Address capacity and experience of project team
• Legal form of ownership
• Levels of management interaction
• Corporate management support of the project

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Property Operations and Maintenance Strategy

• Provide a concise synopsis of the Offerors
  approach to managing, operating and maintaining
  the proposed project
• Provide a narrative to the Offerors approach to
  the following plans (actual plans not required)
• Property Operations and Management Plan
• Leasing and Marketing Plan
• Severability Plan
• Facilities Maintenance Plan
• Capital Repair and Replacement Plan
• Environmental Management Plan
• Community Relations Plan
• Historic Preservation Plan

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Property Operations and Management Plan

• The Property Operations and Management Plan
  shall
• Address the day-to-day operations of the Project
• Describe all management staffing and functions
• Describe interface with the Government
• Address other property management and insurance
  requirements

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Sales and Marketing Plan

• The Sales and Marketing Plan shall
• Address how potential power purchase customers
  will be attracted

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Severability Plan

• The Severability Plan shall
• Address how the EUL Asset will be segregated
  from Edwards AFB

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Facilities Maintenance Plan

• The Facilities Maintenance Plan shall, at a
  minimum, address the following
• Preventative Maintenance and Repair
• Infrastructure (Streets and Utilities)
  Maintenance and Repair
• Grounds Maintenance
• Safety and Security

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Capital Repair and Replacement Plan

• The Capital Repair and Replacement Plan shall
  address
• Long-term major repair and replacements to assure
  the project and improvements are maintained in
  high quality condition throughout the duration of
  the lease, including
• Site conditions such as pavements and utility
  maintenance
• Repair and replacement of project components
• Consistent with manufacturers guidelines or
  other industry standards
• Funded from the Replacement Reserve Account

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Environmental Management Plan

• The Environmental Management Plan shall address
• Compliance with all laws and regulations
  regarding
• Hazardous materials and waste
• Soil contamination and spill prevention, sewage
  overflow
• Dust, noise, solid waste management, and pest
  control
• Storm water design and construction, water and
  waste water
• Recycling and waste minimization
• Environmental permits
• Natural resources

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Community Relations Plan

• The Community Relations Plan shall address
• Management of relations with local government
  authorities and communities

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Historic Preservation Plan

• The Historic Preservation Plan shall address
• The long-term preservation of the
  historic/cultural/archaeological property at
  Edwards AFB
• Address protection/mitigation of
  cultural/archaeological sites

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Questions

• Please write out questions on the Question Forms
  provided

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