Solar Farm Procurement Process Raises Questions from Citizens Group


Days after Tallahassee Reports published a story noting that the vendor for the City of Tallahassee’s solar farm was a foreign company, questions from the Utility Citizen Advisory Committee (UCAC) prompted Reese Goad to address the procurement process for the project.

Reese Goad is currently the Acting City Manager for the City of Tallahassee.

The procurement process for the solar farm project resulted in the selection First Solar Development, LLC as the highest ranked bidder. However, after several months of negotiations with the City, First Solar withdrew and Origis – the second ranked bidder – was awarded the contract.

Goad’s email stated that “I have been asked about the procurement process related to the selection of Origis as the vendor for the Solar Farm project and that Origis is an international company.”

Goad wrote that “Origis has a wide international presence, including a USA Headquarters in Miami, FL.”

TR has previously reported that Origis Energy is a foreign owned company with financial ties to Belgium and Cyprus.

Also, in the email Goad detailed a procurement history for the project which included the following points:

In June 2015 the City Commission approved the selection committee ranking and authorized staff to begin contract negotiations with the top ranked vendor, First Solar Development LLC.  If acceptable terms with the top ranked vendor were not achieved, staff would begin negotiations with the second-ranked, and then the third-ranked, vendors.

After seven months of negotiations, First Solar made the business decision to withdraw from the RFP process and terminated all negotiations with the City. (Emphasis added)

Negotiations began with Origis Energy in early 2016, the second-rank vendor.

These negotiations resulted in agreement under which a 20 MW solar farm will be owned and operated by Origis Energy (doing business as FL Solar 1, LLC) and will be located at the southern end of the Tallahassee International Airport on City owned land. The City will purchase 100% of the energy produced from the facility for an initial term of 20 years at a pre-determined pricing structure. The City has an option to extend the term by an additional 10 years.

Goad did not address the “business decision” that resulted in a change of vendors. However, it appears the owners of First Solar Development, LLC -even though they withdrew – benefited from the procurement process.

How?

An Origis representative informed TR that the solar panels used at the City’s solar farm were purchased by Origis from First Solar, headquartered in Arizona.

Bloomberg News reports that First Solar Development – the original vendor selected for the City of Tallahassee solar farm project – operates as a subsidiary of First Solar, Inc.

However, the representative could not comment where the panels were assembled or produced since First Solar has manufacturing facilities in the U.S. and other countries.

These findings prompt several questions.

Was the “business decision” that resulted in a change of vendors a negotiation between Origis and First Solar?

Is it normal procurement procedure for vendors to negotiate after a decision is rendered by an elected body?

Did the citizens of Tallahassee get the best deal?

TR will continue to investigate.

9 Responses to "Solar Farm Procurement Process Raises Questions from Citizens Group"

  1. Major Villum   December 27, 2017 at 5:13 am

    This is business as usual for COT; complete with the spin masters creating their story line as they go. With a little inquiry, you wil see Mr. Goad did not write this piece; it was created farther within the ‘Communication’ Department and electric department; after all there is the Utility Marketing group. Their info doesn’t have to be completely factual, ethical ground or even legally defensible. Just marketable.

    They (Communications) have been exceptionally quiet for the last few months for some reason?

    Request all current/former COT employees (and their family members) personal financial portfolios on investments in construction, contracting, building, housing, LEED certifications, etc. – and some interesting info may/will appear….

    FBI – in your spare time, perhaps a little more help please?

    Reply
    • alex   December 28, 2017 at 7:17 am

      Right On, Major! The FBI should expand the net to cover some members of the County Commission. One of our County Commissioners and our “want-to- be” Mayor have similiar views on solar power. I see the shadow of a bow tie all over this.

      Reply
  2. David   December 27, 2017 at 5:42 am

    An equally or more basic question is WHAT IS THE RETURN ON INVESTMENT and WHEN.

    Solar sounds so nice, but has yet to show that after initial purchase, installation costs, maintenance and loss of revenue for the large tracts of land needed, that it ever ‘breaks even’ much less turns a profit.

    Which leads to the next question: Why do this at all except as a politically correct marketing gimmick. And knowing how the wheels turn at 300 S. Adams, whose pockets were lined and by how much.

    Reply
    • News_Maven   December 27, 2017 at 1:50 pm

      If the First Solar panels being used have only a 14% efficiency, the ROI will take a lot longer than using multi-junction, high concentration photovoltaic (HCPV) panels mounted on dual axis trackers. Those newer technology panels have efficiencies up to 44%.
      Like most of the decision-making processes downtown, somebody didn’t do their homework. But then, since it’s your money, why would they be expected to? If they run short, just confiscate more by raising property taxes another 26%.
      They could also “sell” more carbon offsets by generating more PV, but that’s for another discussion.

      Reply
      • DavidB   December 28, 2017 at 11:33 am

        But Maven, we’ll be “oh, so” able to feel warm and fuzzy about our green footprint from now on… Maybe Algore himself will come and pin a MEDAL on our collective chests!!!

        Reply
      • Mike   December 29, 2017 at 8:41 am

        Good points, Maven. I’m sure the high-efficiency HCPV panels probably cost a lot more per panel – but if $X is the budget allotted for the COT Solar Farm, why not just put fewer of the high-efficiency panels to get the same or even higher output than the low-efficiency panels? Even close to the same amount would probably suffice. Obviously it takes fewer 44% panels to produce at or near the same output as more (perhaps many more) 14% panels. Fewer (high-efficiency) panels means they can probably be put on a smaller piece of land, if the size differences aren’t too great on a per-panel basis.
        Am I over-simplifying or committing heresy by suggesting we inject common sense and/or fiscal efficiency into a COT business arrangement?

        Reply
  3. Thomas C. Hooker   December 27, 2017 at 10:06 am

    “Is it normal procurement procedure for vendors to negotiate after a decision is rendered by an elected body?”

    In my experience, yes. Market changes, change requests from the purchasing entity, and budget changes can allow for an RFP to be renegotiated.

    The original RFP may not have asked for a list of specific manufacturing subcontractors. In the IT procurement world, it is very common for contractors who compete for a project to team up or hand off work to each other to make the venture more profitable. Very, very common. Think of it as a kind of ‘collusion’.

    Reply
  4. J. Danger   December 27, 2017 at 11:09 am

    The COT of Tallahassee is no different than the State of Florida when it comes to procurement processes. Just goes to show you that even when they choose the bidder rated as 1st, they will negotiate them to death and they withdraw or they cut a deal….which is what this sounds like.
    Change orders too often are used to inflate the real costs of a contract. Problem is those managing the contracts are unable to do much about it as the fix is most likely in from the get go. Really sad how the taxpayers are used and abused without their knowledge.
    We say we govern in the sunshine in Florida but the truth is only to a certain extent. Once a winner is announced, most folks don’t pay attention anymore. A lot more to this story than meets the eye. Keep peeling back the layers.

    J. Danger

    Reply
  5. Mike   December 29, 2017 at 8:28 am

    As I’ve said before here, “I hate to be so cynical, but at this point I believe that ANY business or contractual arrangement handled by the COT is suspected of corruption.” By their actions in the past and that continue today, the COT has given me no choice BUT to suspect them. The fault for that is theirs alone – they made their own reputation and continue to do so. So I suspect that enough investigation into this Solar deal (with mediocre-output panels, as News Maven points out) will produce improper maneuverings and some sort of payback for COT officials or staffers. Again, the COT made this reputation for themselves.

    My hope is that when (??? if ever) the FBI hammer comes down in Tallahassee, it will be so intense and far-reaching that every city and county official in Florida is scared out of their wits to do anything that even appears improper.

    Reply

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