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EPC Procurement Process1. Preparation oftenderdocuments Contracting partyto prepare thetender documents2. Announcementand invitation toparticipate Formulateannouncement Formulate criteriafor selectingsuppliers toparticipate intendering Publishing theannouncement3. Receivingapplications forparticipation Openingapplications Examination ofapplikations Selection ofsuppliers toparticipate intendering4. Sending tenderdocuments, receiptand examination oftenders Distribution oftender documents Opening of tenders Examination oftenders Selection ofsupplier5. Notification ofdecision, 10 days gracetime and signing ofagreements Publish notificationto tenderers ofdecision reachedconcerningawarding ofcontract 10 days “gracetime” to elapse Signing Principleagreement andagreement forPhase 1 After Phase 1signing ofagreements forPhases 2 and 3

Practical experiences from services rendered by EPC consultants to public entities and sessions on theimplementation barriers encountered and measures available/needed in order to overcome such barriersNoEmployer's workDescription1. Initiation of project1:1Engaging an EPC consultant1:2Conclusions from the completedfeasibility study and otherinvestigations and collection ofdata1:3Decide the financial parameters fora proposed project1:4Decide the property portfolio to beconsidered in a proposed project1:5Decide strategies for two systemsin a proposed projectMaximum total cost of projectMaximum contract amount to be paid to the ESCOPayback periodRate of interestPeriod for depreciationInflationExpected increase in energy prices above inflationPresent value calculation of savingsReduced costs for maintenance (repair and upkeep)EPC ConsultantServicesImplementation barriersand possible solutionFeasibility studyBarriers:Why EPC and notconventional method.Solution: GuaranteedsavingsAdvise reg.calculationparameters to beadoptedAdvice regardingproperty portfolioComputerized control and monitoring systemSystem for collecting readings from energy metersAdvice on selection ofsystemsBarriers:Clients would like to includeall buildings with highlyneglected maintenance.Solution:All neglected maintenancecannot be paid for by savingsin energy.Barriers:Normally there is a mix ofdifferent systems and theyare not compatible.Solution:Streamlining

NoEmployer's workDescription1:6Data collection for the propertyportfolio to be considered in aproposed projectEnergy Statistics, use of buildings / category, built upare, special requirements, energy audits alreadyperformed, indoor climate parameters, hours ofoperation1:7Scope; what should a proposedproject includeOnly energy-saving measuresNeglected maintenanceModernizationEnvironmental aspects1:81:9Preliminary total project budget andfinancial analysisDecisionTotal cost budgetCost/benefit analysisLCP (LCC)Consideration to go to next stage or notEPC ConsultantServicesGuidance to thepersonal of the clientin their collectionwork.Guidance to includewhat can beaccommodated withinthe given financialparameters for theprojectImplementation barriersand possible solutionBarriers:Lack of staff to do the work.They are normally busy intheir day to day work.Solution:The project work must begiven priority. No outcomewithout input.Barriers:Property directors hope tosolve the problem of allneglected maintenance.Solution:All neglected maintenancecannot be paid for by savingsin energy.Carry out calculationsand simulationsAdvice the decisionmakersBarriers:Economists, directors andtrustees have questionsabout the validity of thesavings guarantee. Is it a realguarantee?Solution:Visit clients that have carriedout EPC projects and studyhow effective the savingsguarantee had proved to be.

NoEmployer's work2. Preparations2:1Setting up project organizationAppoint project organization forPreparations and Phase 12:2Procurement2:2:1 Prepare basis of tenderDescriptionEPC ConsultantServicesImplementation barriersand possible solutionProject Manager maintaining regular contacts withThe ESCO and representing the Employer in projectmeetingsTechnical responsible person representing theEmployer in design meetings and also participates inthe project meetingsPerson responsible for energy statisticsEPC consultantAdvice on theorganizational set upBarriers:Some clients do not from thebeginning understand theextent of work it takes tocarry out an EPC project.Solution:Visit clients that have carriedout EPC projects and getinformation about theirorganizationTender invitationForm of tenderCalculation model for weighting of criteria fordetermining the most economically advantageoustenderCalculation model for volumetric weighting ofaverage contractor’s feeContract agreement forms:Principal agreementAgreement Phase 1Agreement phase 2Agreement phase 3Information regarding the competence- and creativitytestExcel sheet showing list of buildings with energystatisticsPreviously conducted technical investigationsDesign manual, environmental plan and otherEmployer specific procurement documentsAdministrative instructions; Phase 1 and 2Preparation of draftsof documents andexplain to clients technical-,procurement-,finance-, and propertymanagementpersonnel.Barriers:No client has run an EPCproject earlier. It takes time tounderstand the project designand the implications.Solution:To allocate sufficient time forreview of the documents.

NoEmployer's workDescriptionEPC ConsultantServicesSpecifications for project development report fromPhase 1Excel-sheet displaying the calculations of energysavings as a part of project development reportDefinition of major divergence of indoor climate androutines related to rectification of defects during theguarantee periodSpecial directions; Phase 3Specification of contract work Phase 3Excel-sheet displaying the calculations of actualannual energy savings, annual statement2:2:2 Tender advertisement2:2:3 Qualification; limitation of numberof candidates to be invited tosubmit tender under the “restrictedprocedure”2:2:4 Distribution of basis of tender2:2:5 Organize the competence- andcreativity testExamining the applications and selecting a minimumof five candidates to submit tendersElectronically or by postVisiting Schedule for candidates;absolute secrecy must be observedAccess to buildings included in the competence- andcreativity testCandidates to be accompanied during their visits tothe buildings included in the competence- andcreativity testAdvice on formulationAdvice on selectionAdvice onorganizationImplementation barriersand possible solution

NoEmployer's workDescription2:2:6 Opening of tenders2:2:7 Examination of tenders andaward of contract2:2:8 Execution of contractsNoEmployer's work3. Phase 1 “Project development”3:1Participate in meetings with theESCOAppoint legal representativePrincipal agreementAgreement Phase 1Minutes from the project- andtechnology meetingsImplementation barriersand possible solutionBarriers:Difficulties to follow PublicProcurement Act (PPA).Solution:To have extensive knowledgeabout PPA and while neededget advice from expertlawyers on PublicProcurementDrafting theagreementsDescriptionEPC ConsultantServicesImplementation barriersand possible solutionProject meetings, twice a month,Take part in themeetings.Assist in analyzingwork.Barriers:Poor performance of ESCO’senergy auditors. The energyefficiency measures are ofsubstandard.Solution:Issue notification of defects toESCO and demandrectification and improvementBarriers:Incorrect or contradictoryformulations.Solution:Careful reading and demandadjustments.Technology meetings, twice a month,Actively take part in and coordinate the planning of thePhase 1 works.Analysis of preliminary energy efficiency measuresproposals from ESCO3:2EPC ConsultantServicesParticipation andproceedingsParticipation andproceedingsCheck adjust and confirm the minutes from theproject- and technology meetingsAssist in checking theformulations, asproposed by ESCO,of proceedings.

NoEmployer's work3:3The preliminary energy efficiencymeasures proposed by ESCOshall be established within theEmployer's organizationCheck and countersign Site diaryGive ESCO access to drawingsand other documentation relatedto the existing buildings, for theirproject development worksGive ESCO access to buildings3:43:53:63:73:83:9Minimize disruption for personsworking or otherwise stay orreside in the buildingsReview the Project developmentreport submitted by the ESCOExecution of contractsDescriptionEPC ConsultantServicesPresentations atinformation meetingsProcedure to administer keysList of contact persons at each buildingOverview that the ESCO undertakes requiredmeasures.Reviewing and commenting on the various documentsin project reportReviewing baseline calculationsReviewing calculations for energy savingsReviewing description of the proposed energy savingmeasuresPrice AnalysisRevision of total project budgetDecision about what buildings and energy savingmeasures should be included in the Phase 2 andPhase 3Negotiation with ESCOAppoint legal representativeAgreement Phase 2Agreement Phase 3Advice in review andanalysis.Lead negotiations withESCO.Drafting theagreementsImplementation barriersand possible solution

NoEmployer's work4. Phase 2 “Project implementation”4:1Appoint project organization forPhase 2DescriptionEPC ConsultantServicesImplementation barriersand possible solutionProject Manager maintaining regular contacts withthe ESCO and representing the Employer in initialmeeting, site meetings and economy meetingsAdvice on theorganizational set upBarriers:The extent of client’s work inPhase 2 is much greater thanin phase 1.Solution:Increase the set of personsTechnical responsible person representing theEmployer in design meetings and also participating inthe site meetings4:2Participate in meetings with theESCOPerson responsible for energy statisticsScrutiny team, with knowledge of the existingbuildings and their installations as well as withexpertise in civil works, ventilation, heating andsanitation, electricity, cooling and climate control andcommunication systems, to scrutinize the designdocuments prepared by the ESCOGroup of Final Inspectors with skills for final inspectionof civil-, ventilation-, heating-, sanitation-, electrical-,cooling- climate control-and communication worksEPC-consultantSiste meetings; fortnightlyTake part in themeetingsDesign meetings; fortnightlyEconomy meetings; monthlyStart meetings with persons working or otherwise stayor reside in the respective buildings4:3Check adjust and confirm theminutes from the site-, designand economy meetings4:4Give ESCO access to data forAssist in checking theminutes of themeetingsBarriers:Incorrect or contradictoryformulations.Solution:Careful reading and demandadjustments.