Requests for proposals (RFP) can be long and arduous, so this week we are focusing on ways to avoid the mandated process, by getting ahead with some creative groundwork. When it comes to carrying out big contracts, it can seem like RFPs are unavoidable. The key is to get in early and have the company release a specialized contract. With good business acumen, companies can follow these three ways to go about presenting a company with alternatives to the RFP before it has been issued.
1. Lease / Green Bond Program
The first step to avoiding an RFP is to identify whether the company has up-front capital, or needs a no-money down option. If the latter is true, then a lease / green bond issuance program could be the path to take. By taking advantage of a green bond program, companies are able to tap into capital without any upfront costs.
The program allows the customer to utilize a lease structure / payment structure where the energy savings support the project and the contractor doesn’t have to go through the RFP process. In this instance companies are not obligated to go for the low bid option, as companies like EnergyLink can guarantee the risk, which mitigates the need for the cheapest contractor.
2. Managed Energy Service Agreements
Managed Energy Service Agreements (MESA) are a great no-money down option for non-profits, schools and universities. By presenting a MESA to a company looking to carry out a project, the opportunity exists to cut out an RFP. A MESA ensures the provider assumes energy management of a client’s facility, including being responsible for utility bills, in exchange for a series of payments based on the customer’s historic energy use.
MESAs are a great option when the customer has financial stability but lacks the experience or ability to undertake an energy efficiency retrofit. MESAs offer an approach that reduces upfront cost and management burden in favor of bringing in a third-party energy efficiency contract to see the project through and maintain it afterwards.
3. Custom Design Build Contractor Agreement
The last way to avoid an RFP requires the customer to have up-front capital they are willing to invest directly into a project. Once you identify your client is in a position to invest, you can present the option of a custom design build contractor agreement. This agreement outlines that your company will handle the project from start to finish, which encompasses the intital design stages right through to managing the performance of the installed systems.
Often these agreements fit a client who is looking for an all encompassing package. Typically they will choose an energy service company (ESCO) who can offer an energy service performance contract, which mitigates risk for the client. Taking an integrated approach gives the client the ability to ensure performance and pick a contractor who fully understands a niche market. At EnergyLink, we have used performance contracts with our clients and you can view the case studies here.