**FY 2006 - 2009 SOLICITITATION GUIDELINES**

# 1.0 BACKGROUND

Transit continues to be in the forefront of the research, development,
demonstration, and deployment of clean and energy efficient vehicle
technologies. Factors that have made transit buses the vanguard for
alternative fuels and hybrid electric systems are just as applicable in
helping lead the introduction of fuel cell vehicle technologies into
transportation applications. Bus weight and volume packaging constraints
are less rigorous than cars. Unlike personal automobiles where we expect
to turn the key and to immediately drive away, buses undergo a check-out
procedure prior to the driver starting his or her run. Transit buses are
centrally fueled and stored at discrete locations, whereas we all expect
to be able to fill up our cars anywhere and everywhere. The fleet
operation aspect of transit buses creates a more manageable and finite
re-fueling infrastructure requirement, and can assist in the development
of the overall transportation re-fueling infrastructure required.
Transit buses are driven and maintained by professionals, easing the
introduction of a new power plant. Perhaps most importantly, transit
buses operate in the most densely populated corridors of our urban
areas. Fuel cell buses could provide greater public exposure to the safe
operation of zero emission vehicles leading to broader acceptance of
this technology. The operational and maintenance experience gained from
the early introduction of fuel cell vehicle technologies into buses
could enhance its successful application in trucks and cars.

The U.S. Department of Transportation's Federal Transit Administration
(FTA) played an instrumental role in spurring the adoption of natural
gas buses into routine revenue service operations. It is playing a
similar role in helping to accelerate the adoption of electric drive
technologies---battery electric, hybrid electric, and hydrogen fuel cell
buses. The President's FreedomCAR and Hydrogen Fuel Initiatives which
are focused on light-duty vehicles have set forth bold visions for
tackling our Nation's goals of energy independence and cleaner air
without sacrificing personal mobility. FTA's expertise and experience in
alternative fuels and hybrid electric systems for transit buses and its
proven track record of successfully moving clean, fuel efficient buses
from the drawing board to the street, make FTA the ideal agency to lead
and implement a program to complement and support the Presidential
Initiatives.

Section 3045 of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: a Legacy for Users (SAFETEA-LU) establishes a
National Fuel Cell Bus Technology Development Program (NFCBP). The
NFCBP's goal is to facilitate the development of commercially viable
fuel cell bus technologies and related infrastructure. Up to three
geographically diverse non-profit organizations and recipients will be
competitively selected under this Program.

Priority consideration shall be given to those applicants that have
successfully managed advanced transportation technology projects,
including projects related to hydrogen and fuel cell public
transportation operations for a period of not less than five years. A
minimum 50 percent non-Federal cost share with the selected non-profit
organization and recipient is required.

# 2.0 PROGRAM GOALS AND OBJECTIVES

The NFCBP will facilitate the development of commercially viable fuel
cell bus technologies and related infrastructure for application in
transit revenue service operations. The primary focus of the NFCBP is on
fuel cell bus technologies since the Department of Energy is actively
engaged in the research, development, demonstration and deployment of
related hydrogen infrastructure. The workhorse vehicle for transit
agencies in the United States remains the 40-foot, heavy-duty transit
bus. The NFCBP's focus is on advancing the commercialization of 40-foot,
heavy-duty, fuel cell transit buses.

**[Program Goals:]{.underline}**

The goals of the program are:

-   Facilitate the development of commercially viable fuel cell bus
    technologies

-   Significantly improve transit bus fuel efficiency and reduce
    petroleum consumption

-   Reduce transit bus emissions.

-   Establish a globally competitive U.S. industry for fuel cell bus
    technologies.

-   Increase public acceptance of the fuel cell vehicles.

To carry out the program, FTA will leverage the knowledge and experience
of federal agencies and private corporations well established in this
industry in achieving technology advancements to address the goals cited
above. The NFCBP will complement other Federal Government, State,
regional, local and industry efforts to advance the state of the art of
fuel cell bus technologies. Specifically, the efforts under the NFCBP
will complement, and not duplicate, efforts under the President's
FreedomCAR and Hydrogen Fuel Initiatives.

**[Program Objectives:]{.underline}**

The NFCBP will carry out the Program goals through the following
objectives:

1.  Develop and demonstrate fuel cell buses using innovative and
    improved fuel cell bus technologies.

2.  Develop and demonstrate innovative and improved components and
    technologies for fuel cell buses including fuel cell technologies,
    energy storage, transit bus systems integration, and power
    electronics technologies.

3.  Advance different fuel cell technologies including hydrogen-fueled
    and methanol-powered, liquid-fueled fuel cell technologies that may
    be viable for transit.

4.  Develop an understanding of the requirements for market
    introduction. This includes fuel supply, fueling infrastructure,
    supplier networks, maintenance, safety, insurance, education,
    performance, support, etc.

5.  Enhance awareness of, and education about, fuel cell bus
    technologies.

6.  Collaborate in the development of design standards for fuel cell bus
    technologies.

7.  Compile and maintain information on state of fuel cell bus
    technologies development and needs.

## **Performance Objectives:**

The NFCBP's performance objectives are identified below:

-   Achieve a fuel cell bus vehicle cost of no greater than 5 times that
    of a commercial transit bus

-   Achieve a 4--6 year or 20,000--30,000 hours of durability for the
    fuel cell propulsion system

-   Achieve a doubling of the fuel efficiency compared to a commercial
    transit bus to enhance energy security.

-   Achieve fuel cell bus performance equal to, or better than,
    equivalent commercial transit bus (acceleration, gradeability,
    range, braking distance, etc.).

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-   Exceed the 2010 heavy-duty bus emissions standards.

-   Foster economic competitiveness in fuel cell bus technologies.

-   Increase public acceptance for fuel cell bus technologies

# 3.0 ELIGIBLE PARTICIPANTS

The legislative language establishing the NFCBP as part of SAFETEA-LU
requires FTA to work with geographically diverse non-profit
organizations and recipients (i.e., transit agencies eligible to receive
FTA financial assistance). Single entities or agencies should form into
regional organizations or consortia. Regional organizations should be
multi-state in nature as opposed to a single state organization.
Priority consideration shall be given to those applicants that have
successfully managed advanced transportation technology projects,
including projects related to hydrogen and fuel cell public
transportation operations for a period of not less than five years.
Since the goal of the NFCBP is to facilitate the development of
commercially viable fuel cell bus technology and related infrastructure,
regional, multi-state advanced transportation technology consortia in
partnership with transit agencies are specifically encouraged to apply.

Competitively selected geographically diverse non-profit organizations
and recipients will participate in and support the conduct of Annual
Program Reviews. These reviews will provide the opportunity for a FTA
program manager to conduct an annual assessment of project progress for
all efforts under the NFCBP. Data collection, evaluation and reporting
are additional administrative requirements of the competitively selected
non-profit organizations or consortia. Projects that involve the
demonstration of fuel cell buses will collect data and conduct project
evaluation in accordance with the protocol that has been developed by
the National Renewable Energy Laboratory.

# 4.0 TERMS AND CONDITIONS

Section 3045(f) of SAFETEA-LU directs the Secretary to apply the
requirements of 49 U.S.C. §5309 (Capital Investment Grants) to the
projects awarded under this program and "such other terms and conditions
as are determined by the Secretary." FTA has reviewed the terms of its
Capital Investment Grant program and does not believe additional terms
and conditions are necessary. The NFCBP is inherently a research,
development, and demonstration program; and such project activities to
facilitate the development of commercially viable fuel cell bus
technology and related infrastructure is allowed.

Recipients of federal funds under 49 USC §5309 must comply with the
general federal guidelines governing the management of federal funds,
which are outlined in FTA's Master Agreement, available on FTA's website
(http://www.fta.dot.gov). To this point, FTA will conduct reviews to
ensure that projects under the NFCBP meet the basic statutory,
administrative, and regulatory requirements as stipulated by the
conditions for accepting federal funds.

# 5.0 FY 2006 PROGRAM DIRECTIONS

The NFCBP encompasses a total of \$49 Million in funding from the Mass
Transit Account of the Highway Trust Fund for the fiscal years 2006
through 2009. The funding authorized by fiscal year is:

-   \$11,250,000 -- FY 2006 (\$11,138,000 appropriated in FY 2006)

-   \$11,500,000 -- FY 2007

-   \$12,750,000 -- FY 2008

-   \$13,500,000 -- FY 2009

Projects requiring multi-year funding will be considered. Note that
funding in future fiscal years is not guaranteed and will be contingent
upon the annual appropriation process. The NFCBP intends to balance the
overall Program by selecting projects of differing risk levels,
technical approaches, applications, and project sizes. We believe that
the NFCBP will achieve the most significant benefits through a portfolio
of small, medium and large project efforts, with no single project
taking a dominant share of the budget.

The NFCBP intends to work towards its objectives with the following
additional considerations:

-   Projects should present a compelling technical and business case for
    how the effort will lead to commercial deployment of fuel cell
    transit buses.

-   All projects should support the program goals and objectives, but
    projects within the focus areas identified below are preferred.

-   The NFCBP seeks to have some of the funds directed toward high risk,
    innovative technologies that could provide significant payoff.

-   Indication of the ability and a sincere intent to commercialize the
    results of the project is very important. High quality cost share is
    a strong indicator of both the ability and the intent to
    commercialize. See Appendix A.

-   The NFCBP is most interested in collaborative and coordinated
    project efforts where it can leverage its resources by partnering
    with others. Some potential partners include: international fuel
    cell bus demonstrations in Australia, Brazil, Canada, China, Europe,
    and Japan; Department of Defense efforts; and congressionally
    directed efforts within the Department of Transportation.

-   Efforts that duplicate the approach and objectives of other U.S.
    efforts are of lower priority to the NFCBP.

-   Projects should be planned to be performed over a period of four
    years (48 months) or less.

# 6.0 FY 2006 FOCUS AREAS

Focus areas are outlined below. These are the areas believed to be most
important to the NFCBP.

## Fuel Cell Technologies:

-   Cost reduction

-   Increase durability

-   Increase reliability

-   Improve performance

## Energy Storage:

-   Efficiency

-   Cost

-   Weight and volume

## Transit Bus Systems Integration:

-   40-foot, heavy-duty transit bus

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-   30-foot, transit shuttle bus

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-   20-foot, transit shuttle bus

-   Light-duty small bus

## Power Electronics Technologies:

-   Efficiency

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-   Cost

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-   Reliability

Within the focus areas, development of the following components is the
greatest need for fuel cell transit buses. Some of these components are
the subject of research within other U.S. programs. Duplication of that
research is of lower priority.

-   Fuel cell, hybrid propulsion system that is not significantly
    heavier than a commercial transit bus while enabling a 300 mile
    operational range.

-   Fuel cell, hybrid propulsion system with a durability to be placed
    into 4--6 years for transit revenue service operation.

-   An ideal battery system for energy storage in a fuel cell, hybrid
    transit bus applications. This would be high energy, high power,
    safe, efficient, long lived, non-polluting, reliable, and
    inexpensive.

-   A safe flywheel or ultracapacitor system that is better than the
    best battery for a fuel cell, hybrid transit bus applications.

# 7.0 EVALUATION CRITERIA

The following factors will be used in the evaluation of the white papers
and full proposals:

-   **Ability to contribute significantly to furthering fuel cell
    technology as it relates to transit bus operations,** including
    hydrogen production, energy storage, fuel cell technologies, vehicle
    systems integration, and power electronics technologies;

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-   **Financing plan and cost share potential**;

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-   **Fuel cell technology to ensure that the program advances different
    fuel cell technologies,** including hydrogen-fueled and
    methanol-powered liquid-fueled fuel cell technologies, that may be
    viable for public transportation systems; and

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-   **Priority consideration shall be given to those regional
    organizations that have successfully managed advanced transportation
    technology projects**, including projects related to hydrogen and
    fuel cell public transportation operations for a period of not less
    than 5 years.

# 8.0 PROPOSAL SUBMISSION

FTA will select NFCBP projects by a process of proposal submission,
review, and acceptance. Geographically diverse non-profit organizations
and recipients will prepare submissions to FTA. FTA will simultaneously
select the best organizations as well as the specific project efforts
proposed.

In order to minimize the effort required for proposal preparation and
review, the selection will take place in two phases. First, the
geographically diverse non-profit organizations and recipients will
prepare white papers for FTA to review and comment. The geographically
diverse non-profit organizations and recipients will then prepare
proposals on the best efforts selected by FTA.

Prospective project performers should submit white papers to regional
non-profit organizations. The geographically diverse non-profit
organizations will select and edit the white papers for submittal of
seven copies of each to FTA by May 10, 2006. White papers should be at
least two pages but no more than 15 pages; and, are less detailed and
less complete than full proposals while addressing all of the important
topics. Important topics include a description of what will be done and
why, the commercialization plan, the qualifications of the performers,
the technical innovations, the expected cost, the source of cost share.
The geographically diverse non-profit organization and recipients shall
include in its submission a comprehensive list of participants for the
white papers or full proposals.

The Government expects to complete its review of the white papers and
provide feedback to the geographically diverse non-profit organizations
and recipients by June 9, 2006.

The geographically diverse non-profit organizations and recipients
should submit seven copies of each completed proposal to the Government
on or before July 14, 2006. The format is given in Appendix B.

The Government expects to complete its review of the full proposals and
announce awards by August 14, 2006.

All deadline times are 5:30 pm Eastern Time Zone.

Both white papers and proposals should be submitted to:

Ms. Christina Gikakis

Federal Transit Administration

Office of Research, Demonstrations and Innovation

Mail Code: TRI-10

400 7^th^ Street, SW

Washington, DC 20590

Questions may be addressed to Christina Gikakis 202-366-2637, or
<christina.gikakis@dot.gov>

**APPENDIX A. COST SHARE**

The performer pays for all of the cost of each project. The performer is
reimbursed in part by the government. The portion not reimbursed by the
Government is referred to as cost share. The Government expects to share
in the costs of all tasks of a project. The Government evaluates the
quality of cost share in the following terms:

[High Quality Cost Share]{.underline}---These are financial resources
that will be expended by the award recipients on the proposed project's
Statement of Work (SOW) and will be subject to the direction of the
project management team. This basically means the funds the non-federal
participants will spend for man-hours, materials, new equipment
(prorated if appropriate), subcontractor efforts expended on the
project's SOW, and restocking the parts and material consumed. High
quality cost share can include new Independent Research and Development
(IR&D) effort, but only if those funds are offered by the proposers to
be spent on the SOW and subject to the direction of the project
management team.

[Low Quality Cost Share]{.underline}---These are non-financial resources
that will be expended on the proposed project's SOW and will be subject
to the direction of the project management team. This is typically
wear-and-tear on in-place capital assets like machinery or the prorated
value of space used for the project.

[Unacceptable Cost Share]{.underline}---This is a resource that either
(1) will not be expended on the proposed project's SOW; or (2) will not
be subject to the direction of the management team as discussed above.
Unacceptable cost share will be subtracted from the proposer's claimed
total cost for the project, and the required industry cost share
recalculated. Unacceptable cost share examples include:

-   Sunk costs, i.e., costs incurred before the start of the proposed
    project;

-   Foregone fees or profits;

-   Foregone G&A or cost of money applied to a base of IR&D;

-   Bid and proposal costs;

-   Value claimed for intellectual property or prior research;

-   Parallel research or investment, i.e., research or other investments
    that might be related to the proposed project but which will not be
    part of the SOW or subject to the direction of the project
    management team. Typically these activities will be undertaken
    regardless of whether the proposed project proceeds; and

-   Off-Budget Resources, i.e., resources that will not be risked by the
    proposer on the SOW, and should not be considered when evaluating
    cost share.

# APPENDIX B

Each geographically diverse non-profit organizations and recipients may
propose more than one project. The proposal should have a main section
and a section for each project. One project may be for regional
organization program management.

Project or milestone costs are referred to below. Where referred to,
they always include, in order: cost to the Government, cost to the
project team, and total cost. The total cost should be the cost to the
Government plus the cost to the project team.

The main section and each project proposal should be separately page
numbered and dated on all pages. If a project proposal is revised,
reissue and re-date the entire project proposal. (If attachments do not
have the same date, make a specific reference to each attachment and its
date in the project proposal.)

## Main Section

This section of the geographically diverse non-profit organization
proposal should include the following:

-   Body---This should include any preliminary information and a
    statement submitting the proposal. Also, the body should include a
    brief statement for each of the projects stating why each project is
    of importance.

-   Geographically Diverse Organization---Structure of geographically
    diverse non-profit organization should be detailed along with
    qualifications, expertise and experience. A list of names of the
    entities, agencies, universities, and companies that comprise all of
    the white papers submitted shall be included.

-   Projects list with one line for each project and a line for the
    total costs. For each project give the project name, the date of the
    most recent proposal for the project, and project costs as explained
    above.

## Project Proposals

Proposals should be complete in all respects, even where the Government
has asked no questions about a white paper on the project. Where the
Government has asked questions about the white paper, cover the answers
in the body of the proposal, not as a separate section of the proposal.
Each project proposal should contain the following:

-   Objective of the proposed work and a summary of the work to be done.
    These should be brief and fully supported by the detailed proposal.

-   List of participant organizations with the name, telephone, and
    e-mail for the point of contact at each organization. Identify the
    lead organization.

-   Other detailed information on the proposed project such as:

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-   Background. This may include information on the state of the
    technology and the longer term goals of the performing organization.

-   Importance of the work.

-   Explanation of the principle of operation of the product to be
    developed.

-   Quantitative specifications for the expected performance of product
    to be developed or produced. Specifications of major subcomponents
    should also be stated. The Government frequently compares specific
    power and energy and power and energy density.

-   Test or performance data that give credibility to the proposed
    innovation.

-   Plans for commercialization and/or application.

-   Qualifications and experience of the performing organization.

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-   SOW consisting of a list of numbered tasks with descriptions.
    Milestones, including the milestone number, short description,
    expected date, and milestone payments should be part of the SOW and
    associated with the completion of key events. (Milestones, even if
    listed separately from the SOW, must reflect the work being done.)

-   Schedule chart showing the timing of all tasks listed in the SOW and
    their major precedence relationships.

-   Costs.

Prepare a matrix showing the uses of funds (costs) by milestone and by
category. The suggested form is one row of the matrix for each category
and the total and one column of the matrix for each milestone and for
the total. The major categories are labor, materials, subcontracts,
travel, overhead, and total. The costs for a milestone are the costs of
the underlying tasks.

Also show, in similar matrix form, the sources of funds for each
milestone. These include the costs to the Government, other federal
funds (if any), cash costs to the project team, in-kind costs to the
project team, and total costs. Show the contribution from each team
member separately for each milestone. Costs of labor and materials
purchased for the project are considered cash costs. Explain any of the
in-kind costs to the project team, such as value claimed for use of
buildings, previously purchased materials, or capital equipment that
could and would be used for other purposes. The explanation should
indicate who is making the in-kind contribution.

The two-cost matrices may be combined into one with a single column for
each milestone. In a combined matrix include rows for the uses of funds
and rows for the sources of funds.

Costs not acceptable as cost share may be claimed and discussed, but
should not be included in the matrices.

# EXAMPLES

## Regional Organization Project List

  ------ ------------ ------------- ------------- ------------- -------------
  No.    Name         Proposal Date Cost to Gov.  Matching      Total Cost
                                                  Funds         

  1      Motor        3/1/97        100,000       100,000       200,000

  2      Battery      2/14/97       50,000        75,000        125,000

         TOTAL                      150,000       175,000       325,000
  ------ ------------ ------------- ------------- ------------- -------------

## Motor Project Schedule

[Jan Feb Mar Apr May Jun Jul Aug Sept Oct]{.underline}

## Motor Project Costs

(Additional details and explanations of labor, materials, and
subcontracts may be appropriate.)

  ------------------- ----------------- ----------------- -----------------
  Milestone           1 (Build)         2 (Test)          TOTAL

  Labor               45,000            30,000            75,000

  Materials           25,000            0                 25,000

  Subcontracts        0                 5,000             5,000

  Travel              2,000             1,000             3,000

  Facilities          0                 14,000            14,000

  Overhead            53,000            25,000            78,000

  TOTAL               125,000           75,000            200,000
  ------------------- ----------------- ----------------- -----------------

## Motor Project Sources of Funds

+--------------+-------------+-------------+-------------+-------------+
| Milestone    | Cost to     | Project     | Project     | TOTAL       |
|              | Gov.        | Team        | Team        |             |
|              |             |             |             |             |
|              |             | Cash Cost   | In-Kind     |             |
|              |             |             | Cost        |             |
+--------------+-------------+-------------+-------------+-------------+
| 1 (Build)    | 60,000      | 65,000      |             | 125,000     |
+--------------+-------------+-------------+-------------+-------------+
| 2 (Test)     | 40,000      | 21,000      | 14,000\*    | 75,000      |
+--------------+-------------+-------------+-------------+-------------+
| TOTAL        | 100,000     | 86,000      | 14,000      | 200,000     |
+--------------+-------------+-------------+-------------+-------------+

\*Rental value of 2500 sq. ft. test facility @ \$2,000 per month.\
In addition, Ajax Corp. is supplying patents and prior research worth
\$200,000.