# Guidelines, Checklist, and Contract Clauses for Government Acceptance of DOE Super-ESPC Projects

***ECM Installation**:* All ECMs are installed in accordance with plans,
specifications, standards, and other contract documents (sometimes by
the Contractor, often by a subcontractor and always over a period of
months).

***Inspection, start-up, testing and commissioning.*** All ECMs are
inspected, brought on line, tested, and commissioned *interactively*
with all related Government-owned or Contractor-installed ECMs. Again,
the ECMs should be operating in accordance with the design, plans,
specifications, standards and other contract documents and
manufacturer's recommendations. Individual ECMs may go through start-up
and testing, but all interrelated ECMs must be installed prior to
commissioning. The Contractor should be involved in the final inspection
and commissioning process along with their subcontractors. The agency
technical representative (TR) should accompany the Contractor on these
inspections and document in writing that he has witnessed the
inspections.

*Note: An agency may have more rigorous test and acceptance procedures
defined in the Delivery Order*.

***Punch list generation.*** A punch list is generated during inspection
to document items needing fixing or deficiencies, and punch list items
are corrected.

*Note: Individual ECMs may be signed off on by the TR as they are
installed, but "sign-off" by a TR doesn't constitute official Government
acceptance of the ECM or the project. It acknowledges completion of the
installation of that ECM and perhaps activates the warranty. Agencies
should use due diligence prior to signing off on individual ECMs as the
30-day performance period usually hasn't yet occurred.*

***30-day Performance Period.*** Upon completion of the above items for
the last installed ECM, the Contractor writes a letter to the ACO asking
for the 30-day performance period to begin (assuming all significant
punch list items have been corrected). Other discrepancies may appear
during this period. The Contractor should have them all corrected by the
end of the 30-day period. If the discrepancy has the potential to
reappear or if another 30-day period is warranted because of the
criticality of the ECM, the ACO has the right to ask for continuation of
the performance period.

*Note: Even if individual ECMs have been operating successfully after
installation for several weeks or months, all ECMs are included in this
"official" 30-day performance period.*

***5. Final submittals.***

Operation and maintenance manuals are provided.

Operation and maintenance training is provided.

Spare parts are provided or spare parts lists are provided.

As-built drawings are provided.

Commissioning Report is reviewed and approved.

Post Installation M&V Report is reviewed and approved.

Utility rebate inspections and paperwork is approved and submitted.

*Note: All this can happen during the 30-day performance period or as
individual ECMs are installed.* *Punch list items that do not relate to
system and equipment performance are often handled during this period
also.*

***6. Measurement and Verification.*** M&V post-installation
measurements are taken and M&V protocols are in place; in most cases a
post installation M&V report is generated (all based on the M&V plan
submitted).

*Note: The IDIQ contract requires the post-installation M&V report to be
submitted prior to acceptance of the project.* *If the delivery order
does not require it prior to acceptance, it should come in within 30-60
days after project completion.*

***7. Agreement on modifications/change orders.*** Frequently during
construction, there are changes that occur to the work scope. Some are
Government-requested changes and some are Contractor-generated. It must
first be determined whether the "change" is already within the scope of
what the Contractor covered in their proposal. Any changes to the DO
amount, savings, payment schedule, etc., must be agreed upon and
documented in a Modification to the DO. The Modification should be ready
by the time of final acceptance.

*Note: Both the Government and the Contractor should track all changes
made during DO implementation. It is most feasible to do one
modification to the DO for all changes made just prior to accepting the
project. It is important that the Contractor and government come to
agreement quickly so that payments are not unduly delayed.*

***8. Final contractor/government inspection.*** One final walk-through
should be conducted with the Government representative. The ECMs should
be fully operational, without bugs, and all other items should have been
provided by now. The Acceptance Checklist (see below) is noted with
dates for each item, and signed off by the TR and forwarded to the ACO.

***9. Government Acceptance.*** The ACO signs the checklist, writes a
letter to the Contractor accepting the project, enclosing a copy of the
checklist, and stating that payments can begin. One copy of the
checklist is sent to DOE with a copy of the letter.

*Note 1: It is an agency decision as to when they feel the project can
be accepted. The process above outlines an approach consistent with the
IDIQ contract with the project acceptance for all ECMs occurring at one
point and invoicing starting after complete project acceptance. At
agency discretion, the ACO may accept a project even though minor punch
list items or some services are not yet completed. The acceptance letter
would document the outstanding items with a due date for completion.*

*Note 2: Partial acceptance(s) of a project may be warranted or
desirable, which would allow for staggered invoices through the
construction period. For example, projects with one or two ECMs with
very long construction periods and others having shorter construction
periods, projects with different sites involved, or projects with
exceptionally long construction periods (over 18 months) may benefit
from partial payments in order to reduce interest expense. Any
alternative acceptance method must be documented and agreed to in the
proposal and the awarded DO in Paragraph G.3 as it is a deviation from
IDIQ language and affects the payment schedule, construction financing,
and interest payments.*

***10. Invoicing.*** The Contractor may invoice starting with the month
after receiving Government acceptance. For instance, if a project is
accepted on May 31, the first invoice period can be June 1-30 and the
invoice is sent around June 30 for payment around July 30.

*Note: Agencies have sometimes agreed to provide payments on a quarterly
or annual basis, rather than monthly. This can reduce administration
burden of making payments and may reduce the amount of interest paid.
Any arrangement other than monthly invoices must be agreed upon must be
documented in Paragraph G.3.1 of the RFP/DO.*

Checklist for Government Acceptance of Completed Project

\_\_\_\_\_\_\_\_\_ All ECMs have been installed.

\_\_\_\_\_\_\_\_\_ All ECMS have been through inspection, start-up,
testing, and interactive commissioning.

\_\_\_\_\_\_\_\_\_ Commissioning Report reviewed and approved.

\_\_\_\_\_\_\_\_\_ All discrepancies noted have been corrected.

\_\_\_\_\_\_\_\_\_ Appropriate training on operations and maintenance
(O&M) was conducted for each ECM

\_\_\_\_\_\_\_\_\_ O&M manuals and procedures have been provided.

\_\_\_\_\_\_\_\_\_ Recommended spare parts lists and spares have been
provided.

\_\_\_\_\_\_\_\_\_ As-built drawings have been received and approved.

\_\_\_\_\_\_\_\_\_ Government witnessing of M&V activities documentation
completed.

\_\_\_\_\_\_\_\_\_ Post-installation M&V report received and approved.

\_\_\_\_\_\_\_\_\_ Utility rebate inspections and paperwork approved and
submitted.

\_\_\_\_\_\_\_\_\_ Manufacturer warranty and registration paperwork
submitted.

\_\_\_\_\_\_\_\_\_ All ECMs have performed properly for 30 days as of
\_\_\_\_\_\_\_\_\_\_\_.

\_\_\_\_\_\_\_\_\_ Government final inspection and acceptance is
confirmed as of \_\_\_\_\_\_\_\_\_\_\_\_.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Government Technical Rep Date Agency Contracting Officer Date

Super ESPC Contract Clauses Pertaining to\
Acceptance and Payment

> **C.4.2 M&V Submittals During Delivery Order Development and Post
> Award**
>
> \(c\) The Contractor shall prepare and submit a Post-Installation
> Report to the Government (**[Attachment 2, Item 15]{.underline}**)
> pursuant to the Post-Installation Reporting Requirements and
> Submittals **([Attachment 7]{.underline})** verifying that installed
> ECMs demonstrate the guaranteed annual energy, energy-related, and
> water cost savings specified in the awarded Delivery Order. The
> approval by the Government of this Post-Installation Report shall
> constitute Government Acceptance of the Contractor's energy savings
> performance guarantee.
>
> **C.5.4 ECM Commissioning**
>
> **C.5.4.3 ECM Commissioning Report** - The Contractor shall submit a
> Commissioning Report documenting the ECM's affect upon facility
> performance requirements in accordance with the Commissioning Plan
> **[(Attachment 2, Item 14]{.underline}**). The approval of this ECM
> Commissioning Report by the Government shall constitute Acceptance of
> the Contractor's achievement of facility performance requirements.

**SECTION E INSPECTION AND ACCEPTANCE**

**E.2 ACCEPTANCE**

> **E.2.1** Execution by the Agency Contracting Officer of a Delivery
> Order under this Contract constitutes acceptance of the Final Proposal
> as offered by the Contractor.
>
> **E.2.2** Government Acceptance, for purpose of payment under Section
> G.3 occurs when the following approvals are completed: approval by the
> Agency Contracting Officer of the Contractors Post-Installation Report
> (**[Section C.4.2(c)]{.underline}**) and the approval by the Agency
> Contracting Officer of Contractor's ECM Commissioning Report
> (**[Section C.5.4.3]{.underline}**), and the project inspection and
> acceptance is obtained pursuant to **[Section E.4]{.underline}**.

**E.3 FAR 52.246-12 INSPECTION OF CONSTRUCTION - FIXED PRICE (AUG
1996)**

\(a\) Definition.

> \"Work\" includes, but is not limited to, materials, workmanship, and
> manufacture and fabrication of components.
>
> \(b\) The Contractor shall maintain an adequate inspection system and
> perform such inspections as will ensure that the work performed under
> the contract conforms to contract requirements. The Contractor shall
> maintain complete inspection records and make them available to the
> Government. All work shall be conducted under the general direction of
> the Agency Contracting Officer for the specific project, and is
> subject to Government inspection and test at all places and at all
> reasonable times before acceptance to ensure strict compliance with
> the terms of the contract.
>
> \(c\) Government inspections and tests are for the sole benefit of the
> Government and do not:
>
> 1\. Relieve the Contractor of responsibility for providing adequate
> quality control measures;
>
> 2\. Relieve the Contractor of responsibility for damage to or loss of
> the material before acceptance;
>
> 3\. Constitute or imply acceptance; or
>
> 4\. Affect the continuing rights of the Government after acceptance of
> the completed work under paragraph (i) below.
>
> \(d\) The presence or absence of a Government inspector does not
> relieve the Contractor from any contract requirement, nor is the
> inspector authorized to change any term or condition of the
> specification without the Agency Contracting Officer\'s written
> authorization.

\(e\) The Contractor shall promptly furnish, at no increase in contract
price, all facilities, labor, and material reasonably needed for
performing such safe and convenient inspections and tests as may be
required by the Agency Contracting Officer. The Government may charge to
the contractor any additional cost of inspection or test when work is
not ready at the time specified by the contractor for inspection or
test, or when prior rejection makes re-inspection or retest necessary.
The Government shall perform all inspections and tests in a manner that
will not unnecessarily delay the work. Any special and performance tests
shall be performed as described in the contract.

> \(f\) The Contractor shall, without charge, replace or correct work
> found by the Government not to conform to contract requirements,
> unless in the public interest the Government consents to accept the
> work with an appropriate adjustment in contract price. The contractor
> shall promptly segregate and remove rejected material from the
> premises.
>
> \(g\) If the Contractor does not promptly replace or correct rejected
> work, the Government may:
>
> 1\. by contract or otherwise, replace or correct the work and charge
> the cost to the contractor; or

2\. terminate for default the Contractor\'s right to proceed.

> \(h\) If, before acceptance of the entire work, the Government decides
> to examine already completed work by removing it or tearing it out,
> the contractor, on request, shall promptly furnish all necessary
> facilities, labor, and material. If the work is found to be defective
> or non-conforming in any material respect due to the fault of the
> contractor or its subcontractors, the contractor shall defray the
> expenses of the examination and of satisfactory reconstruction.
> However, if the work is found to meet contract requirements, the
> Agency Contracting Officer shall make an equitable adjustment for the
> additional services involved in the examination and reconstruction,
> including, if completion of the work was thereby delayed, an extension
> of time.
>
> \(i\) Unless otherwise specified in the contract or any delivery
> order, the Government shall accept, as promptly as practicable after
> completion and inspection, all work required by the contract or
> delivery order, or that portion of the work the Agency Contracting
> Officer determines can be accepted separately. Acceptance shall be
> final and conclusive except for latent defects, fraud, gross mistakes
> amounting to fraud, or the Government\'s rights under any warranty or
> guarantee.

**E.4 INSPECTION AND ACCEPTANCE OF INSTALLED ECMs**

Each delivery order will include specific inspection and acceptance
criteria pertinent to the delivery order project. The following general
inspection and acceptance requirements shall apply to each delivery
order, unless otherwise indicated in the delivery order:

> \(a\) The Contractor shall arrange for the inspection of construction
> work and construction oversight to verify that the energy efficiency
> equipment and/or system modifications are properly supplied as
> designed and specified, and installed in accordance with the approved
> installation plan, all applicable codes and standards, the delivery
> order specifications and in a manner that will provide the intended
> long-term function, energy savings, and performance of the equipment.
> (Reference the requirement for Building Commissioning in paragraph
> C.5.4.) Any monitoring and verification of equipment and systems
> installed shall be consistent with requirements defined in the
> approved M&V plan. All start-up and testing shall be conducted in the
> presence of the Agency COR.
>
> \(b\) The Agency Contracting Officer will accept the project
> installation in writing, in accordance with Section G.3.(a). upon
> satisfactory completion of the required 30-day test period, and upon
> receipt of all other required deliverables.
>
> \(c\) Each delivery order may include additional agency-specific or
> site-specific inspection and acceptance requirements, and timeframes
> for completion. The Contractor shall review each delivery order to
> determine the recommended applicable inspection and acceptance
> requirements for that delivery order.

**E.5 FAR 52.246-4 INSPECTION OF SERVICES - FIXED-PRICE (AUG 1996)**

\(a\) Definitions.

> \"Services,\" as used in this clause, includes services performed,
> workmanship, and material furnished or utilized in the performance of
> services.
>
> \(b\) The Contractor shall provide and maintain an inspection system
> acceptable to the Government covering the services under this
> contract. Complete records of all inspection work performed by the
> Contractor shall be maintained and made available to the Government
> during contract performance and for as long afterwards as the contract
> requires.
>
> \(c\) The Government has the right to inspect and test all services
> called for by the contract, to the extent practicable at all times and
> places during the term of the contract. The Government shall perform
> inspections and tests in a manner that will not unduly delay the work.
>
> \(d\) If the Government performs inspections or tests on the premises
> of the Contractor or a subcontractor, the Contractor shall furnish,
> and shall require subcontractors to furnish, at no increase in
> contract price, all reasonable facilities and assistance for the safe
> and convenient performance of these duties.
>
> \(e\) If any of the services do not conform with contract
> requirements, the Government may require the contractor to perform the
> services again in conformity with contract requirements, at no
> increase in contract amount. When the defects in services cannot be
> corrected by reperformance, the Government may:
>
> 1\. require the Contractor to take necessary action to ensure that
> future performance conforms to contract requirements; and
>
> 2\. reduce the contract price to reflect the reduced value of the
> services performed.
>
> \(f\) If the Contractor fails to promptly perform the services again
> or to take the necessary action to ensure future performance in
> conformity with contract requirements, the Government may:
>
> 1\. by contract or otherwise, perform the services and charge to the
> contractor any cost incurred by the Government that is directly
> related to the performance of such service; or
>
> 2\. terminate the contract for default.

**E.6 FAR 52.246-20 WARRANTY OF SERVICE (APR 1984)**

> \(a\) Definitions:
>
> \"Acceptance,\" as used in this clause, means the act of an authorized
> representative of the Government by which the Government assumes for
> itself, or as an agent of another, or approves specific services, as
> partial or complete performance of the contract delivery order.
>
> \"Correction,\" as used in this clause, means the elimination of a
> defect.
>
> \(b\) Notwithstanding inspection and acceptance by the Government or
> any provision concerning the conclusiveness thereof, the Contractor
> warrants that all services performed under this contract and its
> deliver orders will, at the time of acceptance, be free from defects
> in workmanship and conform to the requirements of this contract. The
> Agency Contracting Officer shall give written notice of any defect or
> nonconformance to the Contractor within 30 days from the date the
> defect or non-conformance is detected by the Government. This notice
> shall state either (1) the Contractor shall correct or reperform any
> defective or nonconforming services, or (2) that the Government does
> not require correction or reperformance.
>
> \(c\) If the Contractor is required to correct or reperform, it shall
> be at no cost to the Government, and any services corrected or
> reperformed by the Contractor shall be subject to this clause to the
> same extent as work initially performed. If the Contractor fails or
> refuses to correct or reperform, the Agency Contracting Officer may,
> by contract or otherwise, correct or replace with similar services and
> charge to the Contractor the cost occasioned to the Government
> thereby, or make an equitable adjustment in the contract price.
>
> \(d\) If the Government does not require correction or reperformance,
> the Agency Contracting Officer shall make an equitable adjustment in
> the contract price.

**G.3 INVOICE SUBMITTALS FOR DELIVERY ORDER PROJECTS**

> \(a\) Payments will commence when all ECMs have been installed and
> Acceptance by the Government is obtained as required under Section E.
>
> \(b\) The frequency of payments from the government to the Contractor
> shall be as negotiated and specified in the Delivery Order.

**G.4 PAYMENT TO THE GOVERNMENT FOR ANNUAL GUARANTEED SAVINGS
SHORTFALL**

> \(a\) If the Contractor fails to meet the annual performance
> requirement as verified by the Measurement and Verification documents,
> the Government shall adjust the payment schedule to recover the
> Government's overpayments in the previous year and to reflect the
> lower performance level into the current year.

\(b\) When the ECM performance level is restored, the Government will
adjust the Contractor payment schedule accordingly.

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