BOARD MEETING DATE: June 3, 2005
AGENDA NO. 3

Award Contracts for Natural Gas Refueling Station Infrastructure and Reissue RFP

SYNOPSIS:

On January 7, 2005, the Board approved the release of an RFP to solicit proposals for natural gas refueling station infrastructure projects in the amount of $245,428. Seven proposals were received by the closing date. Staff believes that all seven proposals deserve funding; however there are only enough funds to fully fund two of the seven highest scoring proposals in the amount of $224,861. Staff recommends funding these two proposals. Staff also requests the Board a) re-allocate $500,000 from a previous Board approved set-aside in the Clean Fuels Fund, b) use the remaining funds of $20,567 from the current solicitation, and c) allocate an additional $500,000 from the Clean Fuels Fund to reissue the RFP to solicit additional natural gas fueling infrastructure projects with a budget of $1,020,567.

COMMITTEE:

Technology, May 27, 2005, Recommended for Approval

RECOMMENDED ACTION:

1. Authorize the Chairman to execute contracts with the following entities in an amount not to exceed $224,861 from the Clean Fuels Fund.

1. A contract with Merit Oil Company, in an amount not to exceed $60,000 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new public access CNG fueling station.
    
2. A contract with the City of San Bernardino, in an amount not to exceed $164,861 from the Clean Fuels Fund, to offset the costs of purchasing and installing a new LNG fueling station.

2. Authorize the a) re-allocation of $500,000 from a previous Board approved set-aside in the Clean Fuels Fund, b) use the remaining funds of $20,567 from the current solicitation, and c) allocate an additional $500,000 from the Clean Fuels Fund for the reissuance of the original Request for Proposals (RFP #P2004-09) with a one-month contract preparation/submission period to solicit additional natural gas fueling station project proposals with a budget of $1,020,567.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On January 7, 2005, the Board authorized the re-issuance of RFP #P2004-09 soliciting cost-shared proposals for installing new and expanded natural gas fueling facilities within the South Coast AQMD jurisdictional boundaries. Continued expansion of the natural gas fueling infrastructure needs to occur in order to support increased public and private fleet alternative fueling needs and support future incentive program awards such as the Low Emissions School Bus Replacement Program and the Carl Moyer Program.

The Board approved a total of $245,428 towards the solicitation. This funding is designed to offset capital investment costs, resulting in conveniently located, publicly-accessible fueling stations. For this RFP, funding was only provided for natural gas fueling stations. Applications were accepted from either public agencies or private entities (i.e. state and local governments, automobile manufacturers, alternative fuel suppliers, manufacturers of natural gas related equipment, and end users of natural gas motor fuel).

Proposal

Seven proposals were received by March 4, 2005 (the closing date of the solicitation) totaling over $1.1 million in requested funding. All seven proposals were deemed technically qualified for a total of $1,134,861 in funds, exceeding the available level of funding of $245,428. Staff is recommending that two of the seven proposals be funded at this time from the original approved budget from the Clean Fuels Fund. The recommended projects are the second and third highest scoring proposals. Staff does not recommend funding of the highest scoring proposal at this time. That proposal requested funding for a fueling facility at CR&R for their fleet of LNG trucks. The CR&R fleet had indicated their interest in fueling their fleet at a different, nearby LNG fueling station which received funds under both AQMD and MSRC funding programs. As a result, if this project was operational it would adversely affect the fueling throughput of that nearby funded station and may render that station economically nonviable. Until this circumstance is investigated thoroughly, staff believes it prudent to withhold funding for that highest scoring proposal. The Board’s Procurement Policy allows selection of other than the highest scoring bidder if to do so would provide the best value to the AQMD. The present circumstances meet this requirement because premature funding of the highest-scoring project could adversely affect the natural gas fueling network.

The level of required cost share is based upon the amount of grant funds requested (see Table 1 below) and the cost share is based upon cash expenditures, (i.e. land/lease, equipment, engineering, permits, installation, etc.). In-kind services are limited to 10 percent of the total proposed cost of the project.

Table 1. Cost-share request limitations
 

The general requirements of the RFP are identified below:

1)	Proposed project must be located within the jurisdictional boundaries of the South Coast Air Quality Management District.
2)	Proposed project shall be a natural gas "fast-fill" station with public access.
3)	Project schedule shall be limited to an eighteen-month timeframe.
4)	Proposed project may request cost-share funds for capital investment costs only.
5)	Applicant will be contractually obligated to proposed station throughput.

As mentioned above, seven proposals were received by the RFP deadline of March 4, 2005. In addition to the existing infrastructure network, most of these new projects are strategically located to help establish an infrastructure "backbone" that will allow for fueling of all types of natural gas vehicles throughout the Basin. One of the proposals received raises concerns with respect to affecting the potential throughput of another local fueling facility that has previously been funded under the Clean Fuels Fund.

As fully developed codes and standards for hydrogen fueling stations do not currently exist, the RFP did not require components to be currently hydrogen compatible; however, it provided for additional points to applicants committing to station designs and space consideration that could incorporate hydrogen compatible equipment for future transportation applications. Equipment modifications and retrofitting with hydrogen compatible plumbing, tubing, dispensers and compressors qualified for these additional points. Of the seven proposals received, four made specific commitments for making the fueling infrastructure project hydrogen compatible in the future, including:

1)	The use of stainless steel that, with modifications, is hydrogen capable.
2)	Use best engineering practices to design all electrical systems to be hydrogen compatible, specifically to NFPA 70 standards and cross reference these with NFPA 50A standards.
3)	Additional PVC conduit to house hydrogen plumbing/tubing made from Type 316 stainless steel will be installed.
4)	Space considerations will be incorporated into all station design for future hydrogen storage, dispensing and reforming equipment.

The seven proposals were evaluated by a panel as described in the Bid Evaluation Section below. Staff is recommending that two of the seven proposals be funded.
 

At its September 2001 meeting, the Board allocated $500,000 from the Clean Fuels Fund to assist fleet operators in offsetting the additional costs associated with LNG refueling of vehicles (wet hosing) during an interim period of no more that six months while their LNG refueling stations were being constructed. Although LNG fueling stations have been constructed and been put into service since the time of this Board action and wet hosing has taken place during the interim, no operator availed themselves to these set-aside funds and as a result they remain available.

Staff recommends that the Board authorize the re-issuance of the original Request for Proposal (RFP P2004-09) allowing for a solicitation period of thirty days with a budget of up to $1,020,567 using (1) $20,567 in unspent funds under the current solicitation, (2) $500,000 previously set-aside for LNG refueling costs, and (3) an additional $500,000 from the Clean Fuels Fund. As all submittals to the current solicitation met the technical and economic criteria, staff will automatically consider all the proposers’ current submittals for funding consideration under the RFP reissue without their having to reapply.

In summary, staff is requesting the Board’s approval to fund the two proposals listed in Table 2 at a cost not to exceed $ 224,861 and to reissue the RFP for a total amount of $1,020,567.

Benefits to AQMD

The 2003 AQMP relies on the expedited implementation of advanced technologies and clean-burning fuels in Southern California to achieve air quality standards. By constructing more natural gas fueling facilities, benefits from this project will accrue to all cities and area residents. Such new construction will provide a coordinated effort, plan for growth of the overall infrastructure and enable the transition to future hydrogen refueling infrastructure. There are economies of scale from the extensive infrastructure being planned and installed, possibly reducing the cost and making alternative refueling stations more affordable. While having no direct impact on air emission reductions, new CNG stations will help facilitate the introduction of low-emission, natural gas-fueled vehicles (NGVs) initially in private and public fleets in the area. Such increased penetration of NGVs will provide direct emissions reductions of NOx, VOC, CO, PM, and air toxic compounds throughout the Basin.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids was published in the following publications:
 

1.	Antelope Valley Press	11.	La Opinion	21.	Rafu Shimpo
2.	Black Voice News	12.	La Prensa Hispana	22.	San Bernardino Sun
3.	Chinese Daily News	13.	La Voz Publications	23.	State of California Contracts
4.	Desert Sun	14.	Los Angeles Daily News		Register
5.	Eastern Group Publications	15.	Los Angeles Sentinel	24.	The Daily Breeze
6.	El Chicano	16.	Los Angeles Times	25.	The Excelsior
7.	El Informador	17.	Orange County Register	26.	The Signal
8.	Inland Empire Hispanic News	18.	Philippine News	27.	Wave Community Newspapers
9.	Inland Valley Daily Bulletin	19.	Precinct Reporter
10.	Korea Central Daily	20.	Press Enterprise

Additionally, potential bidders may have been notified utilizing the Los Angeles County MTA Directory of Certified Firms, the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; and AQMD’s own electronic listing of certified minority vendors. Notice of the RFP/RFQ was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov). Information was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

In addition to publication in the above-cited publications, over 100 individual RFP notices were mailed to interested businesses and individuals.

Bid Evaluation

Proposals received were evaluated by a diverse, technically qualified panel in accordance with criteria contained in the attached RFP. The evaluation panel consisted of an Automotive Engineer from the California Energy Commission, an independent technical consultant to CARB and the AQMD, and the AQMD Mobile Source Strategies Manager; one Asian/Pacific Islander, one Caucasian, and one Hispanic; one female and two male. Attachment A provides a summary of the proposals received ranked by the scores received from the evaluation panel.

Seven proposals were received with a requested funding totaling $1,134,861. Of the seven proposals received, all were scored with a technical value above 56 points (the minimum score needed for further consideration).

In accordance with approved AQMD RFP guidelines, the least-cost proposal was awarded the most points in the cost category. All other proposals received a percentage of that highest score. Also in accordance with approved AQMD RFP guidelines, the most cost-effective proposal was awarded the most points in that category and all other proposals received a percentage of that highest score.

Resource Impacts

Funding, in an amount not to exceed $224,861 is proposed to fund two of the seven proposals shown in Attachment A. Funding of $245,428 was from the Clean Fuels Fund originally allocated by the Board. A total of $1,020,567 is proposed with allocation and reallocation of Clean Fuels Funds for reissuing the RFP for additional natural gas fueling stations.

Attachment

A - Evaluation of Proposals in response to RFP #P2004-09

Attachment A
Evaluation of Proposals in Response to RFP #P2004-09
 

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