Message-ID: <9667353.1075852479926.JavaMail.evans@thyme> Date: Fri, 19 Oct 2001 07:34:37 -0700 (PDT) From: dave.perrino@enron.com To: d..steffes@enron.com Subject: FW: Operational Audit of CAISO by FERC Cc: ray.alvarez@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: ray.alvarez@enron.com X-From: Perrino, Dave X-To: Steffes, James D. X-cc: Alvarez, Ray X-bcc: X-Folder: \JSTEFFE (Non-Privileged)\Steffes, James D.\Deleted Items X-Origin: Steffes-J X-FileName: JSTEFFE (Non-Privileged).pst Jim, The answer to your timing question is yes, the audit is supposed to be completed by mid-Jan 2002, auditing the period 10/00-10/01. Dave -----Original Message----- From: Alvarez, Ray Sent: Thursday, October 18, 2001 1:44 PM To: Perrino, Dave Subject: FW: Operational Audit of CAISO by FERC Dave, per your request: Here are some bullets briefly describing the FERC audit high points. I think the scope is "right on the money" and the timing is reasonably good also. The text of the audit solicitation follows the bullets. I've made contact with Andy Sakallaris, head of FERC procurement, to attend the pre-bid conference next Tuesday (assuming it is held, since expressions of interest thus far have been from CA based firms unwilling to make the trip to DC). Ray Audit description- FERC seeks to take all appropriate steps for prospective improvements in California markets; accordingly, an independent operational audit of the CAISO will be performed to determine any areas in which the CAISO could enhance its effectiveness in fulfilling its responsibilities in operating the transmission system under its control and administering real-time energy markets. Scope- Provide a comparison of the CAISO's actual operations and its FERC tariff and determine whether the CAISO's operations are adequately transparent to market participants. Audit period- 10/1/00-10/1/01 Deliverables timing- Draft report due on January 9, 2002; final report due January 16, 2002. Audit schedule- Begins on November 1, 2001, and ends no later than January 4, 2002. Pre-proposal conference- A conference is scheduled for prospective offerors at FERC next Tuesday; FERC will give a brief explanation of the requirements and clarify any questions asked. PART: U.S. GOVERNMENT PROCUREMENTS SUBPART: SERVICES CLASSCOD: R--Professional, Administrative and Management Support Services OFFADD: Federal Energy Regulatory Commission (FERC), 888 First Street, NE, Washington, DC 20426 SUBJECT: R--OPERATIONAL AUDIT OF CALIFORNIA INDEPENDENT SYSTEM OPERATIOR. INC. CAISO SOL FERC02RMT22071 DUE 102601 POC Charlotte Handley, 202-219-1156 or Andrew Sakallaris,202-219-1150 DESC: This is a combined synopsis/solicitation for commercial items prepared in accordance with the format in Subpart 12.6, as supplemented with additional information included in this notice. This announcement constitutes the only solicitation; proposals are being requested and a written solicitation will not be issued. FERC02RMT22071 is issued as a request for proposal and all provisions/clauses are those in effect through FAC 97-27. This solicitation is unrestricted under NAICS number 561. Statement of Work: I. BACKGROUND. The California electricity market has experienced great stress from Summer 2000 to Summer 2001, with demand outstripping supply, wholesale prices rising dramatically, and key market participants becoming financially unstable. As a result, the California Independent System Operator, Inc. (CAISO), which operates the electricity transmission grid throughout most of California, was forced to adapt to rapidly changing circumstances. During all of this, the CAISO worked hard to ensure system reliability. Under the Federal Energy Regulatory Commission's market mitigation plan, wholesale prices stabilized in California in Summer 2001. The Commission seeks to take all appropriate steps for prospective improvements in California markets, including improvements to help the CAISO in effectively performing its increasing responsibilities. Accordingly, an independent operational audit of the CAISO will be performed to determine the areas, if any, in which the CAISO could enhance its effectiveness in fulfilling its responsibilities in operating the transmission system under its control and administering certain real-time energy markets. II. SCOPE OF WORK. The Independent Public Accounting (Contractor) firm shall perform an operational audit of the CAISO processes, practices, and procedures in accordance with Generally Accepted Government Auditing Standards (GAGAS). The Contractor shall provide a comparison of the CAISO's actual operations and its Commission tariff (procedures and tariff can be found at www.caiso.com). The Contractor shall ascertain whether the CAISO's operations are adequately transparent to market participants. To the extent possible, the Contractor shall also ascertain whether the CAISO's procedures and operations are consistent with the most effective business practice. III. AUDIT PERIOD. The audit of the CAISO shall cover the period commencing October 1, 2000, through October 1, 2001. IV. DELIVERABLES. The contractor must provide the Contracting Officer's Representative (COR) with a draft and final report detailing the findings, operating deficiencies and/or major observations and recommendations. These reports and other deliverables must be provided to the COR by the close of business on the following dates: 1) Draft Report - January 9, 2002 2) Final Report - January 16, 2002. V. SCHEDULE. The operational audit will commence on November 1, 2001, and it must be completed no later than January 4, 2002. The contractor shall meet with the COR to discuss the audit no later than November 6, 2001. The contractor must provide the Commission with an operational audit plan no later than November 14, 2001. A detailed operational audit plan will be submitted to the COR for review, feedback, and approval. The COR or designated representative will review the plan. VI. Working Papers. The contractor shall prepare and provide a copy of work papers in accordance with GAGAS. All work papers shall include the purpose, sources of information, the procedures performed, results thereof, and conclusions as appropriate for the planning, internal control, compliance, and substantive testing phases. For all findings, work papers shall clearly show the condition or problem, criteria, cause, effect, and recommendation for improvement. All working papers shall be cross-referenced to audit programs, summaries, and final audit report. These documents will become the property of the Commission. During the course of the audit or upon completion of the audit work, the Contractor's audit report and work papers shall be subject to access and review by the Commission. A preproposal conference is scheduled for prospective offerors at FERC on Tuesday, October 16, 2001, at 10:00 am at 888 First Street, NE, Washington, DC 20426, Room 3M-3. FERC will give a brief explanation of the requirements and clarify any questions asked. Questions submitted in advance to A. Sakallaris (andrew.sakallaris@ferc.fed.us) is appreciated and preferable. Contractual, technical, and legal representatives will be on hand to answer any questions. Bring no more than three representatives and E-mail or phone A. Sakallaris, 202-219-1150 to indicate the number and names of individuals attending. If unable to attend, E-Mail A. Sakallaris and provide the point of contact's mailing and E-mail address and FERC will arrange to deliver any additional information that may become available as a result of the pre-proposal conference. All offerors and subcontractors will complete and submit with their proposals, either the Organizational Conflicts of Interest (OCI) representation or the OCI disclosure (not both). Complete and submit the OCI Questionnaire. Request OCI information from A. Sakallaris. See DOE clauses 952.209-8 OCI-Disclosure and 952.209-72 OCI. Same/similar language will be incorporated into the resultant contract. Period of Performance: From approximately November 1, 2001 to January 16, 2002. FAR Provision 52.212-1, Instructions to Offerors-Commercial (Oct 2000), applies. Addendum to FAR 52.212-1 SUBPARAGRAPH (b) Reply by e- mail the proposal to FERC, ATTN: C. Handley, Division of Procurement, FA-12, 888 First St, NE, Wash DC 20426, e-mail: charlotte.handley@ferc.fed.us. It is our intent to evaluate based on initial proposals. Offerors shall submit five copies of their price and technical proposal, signed by an official authorized to bind the offeror, at the above address no later than 2:00 PM local time, Friday, October 26, 2001. Price Proposal: Addendum to FAR 52.212-1 SUBPARAGRAPH (b)(6): The price proposal shall be completely separate from the technical proposal. Offerors must breakout pricing by month and provide (1) labor categories (2) corresponding firm-fixed-price, fully loaded labor rates (3) proposed number of hours estimated for each labor category (4) Other Direct Costs as applicable (subcontractor and travel). Supporting details shall also be provided as appropriate (e.g., travel destinations, number of trips, computer time, discounts offered (excluding prompt payment)). Addendum to FAR 52.212-1 SUBPARAGRAPH (c) The offeror agrees to hold the prices in its offer firm for 120 calendar days. Provision 52.212-2, Evaluation-Commercial Items (Jan 1999), applies. Addendum to FAR 52.212-2 SUBPARAGRAPH, (a) Technical Proposal: Past Performance (30 points). Ensure that the company names, points of contact and phone numbers are current. The Offeror and each subcontractor proposed must each select three references to complete a "Contractor Past-Performance Evaluation." All areas of the sheet must be filled in. If an answer to a specific question is not provided, the applicable area must be annotated with the reason why (e.g. "Reference failed to provide an answer"). Higher scores will be assigned for contracts that are at least similar in size and complexity. FERC may obtain and evaluate information from sources other than those provided by the offeror. FAR 15.305(a)(2)(iv) states "In the case of an offeror without a record of relevant past performance or for whom information on past performance is not available, the offeror may not be evaluated favorably or unfavorably on past performance." For the purposes of this evaluation not being evaluated favorably or unfavorably means the offeror will receive a rating of "good or acceptable" on company past performance. To obtain a copy of the past performance form to be completed by the Offeror's references, request from A. Sakallaris by email. The Offeror will be responsible and ensure that the references submit or reply by e-mail their completed response to C. Handley, located at the above address by 2:00 PM local time, October 26, 2001. Offerors should also notify the references that FERC may be contacting them regarding the past performance information. Prior Audit Experience (25 points). The offeror must cover in its proposal the extent of prior related experience in electric bulk power markets, and the ability to effectively and efficiently conduct this operational audit in accordance with GAGAS. The proposal must include previous and/or current experience, within the last 3 years, where the offeror has performed audits similar in terms of size and complexity of this requirement. Higher scores will be assigned to those offerors who have demonstrated successful experience in electric bulk power markets within the last three years. To be acceptable, the services must have been satisfactorily performed and at least similar in terms of size and complexity to the work required under this contract. Understanding the Statement of Work (20 points). The proposal must clearly demonstrate in sufficient and precise detail the offeror's expertise in understanding and analyzing independent system operator tariffs, market operations and services, and transmission issues. The offeror must describe its ability to perform a comprehensive and thorough analysis of the electric bulk power market operated by the CAISO. Higher scores will be assigned to those offerors who demonstrate an understanding and greater knowledge of independent system operator tariffs, market operations and services, and transmission issues. Higher scores will also be assigned to offerors who demonstrate a comprehensive understanding of bulk power markets like those operated by the CAISO. Audit Methodology and Quality Control (15 points). The technical proposal must include the audit methodology and must address each phase of the audit. The proposal must identify specific aspects of each phase and explain how each phase/aspect is related. The offeror must include estimated completion times for each phase of the audit and address critical completion dates. The technical proposal must describe the audit approach to documenting systems and internal controls, and effective procedures, including consideration of risk and materiality, to determine the extent of audit testing. Quality control is an important part of the technical proposal. The proposal must demonstrate the offeror's internal quality control procedures. The proposal must include a copy of the firm's latest peer review report, comments, and the response to the peer review report. Higher scores will be assigned to those offerors who demonstrate and offer a sound, valid, effective, and innovative audit methodology that reflects an understanding of the statement of work. "Valid" entails the use of techniques that are known to be feasible with respect to the area addressed; "Effective" refers to the workability and appropriateness of the methodology. "Innovative" means the development and application of a novel, yet valid technique that will increase the effectiveness of the approach. Higher scores will be assigned to offerors who demonstrate sound and effective internal quality control procedures. Professional Qualifications (10 points). The offeror must describe in its proposal: 1) the professional qualifications of the staff that will be assigned to this contract and 2) demonstrate that it has sufficient resources to perform the audit and qualified staff to perform critical tasks necessary to support the audit. The written response must also include the following information for all staff participating on the audit: Labor Category (i.e., Partner, Manager, etc.); CPA certification date (if applicable); Other applicable certification(s); Total years of audit and/or other experience; Advance degree(s) obtained; and Total years employed by the offeror. Higher scores will be based on offeror's educational background, recent work experience, and certifications obtain by their staff. In particular, higher scores will be given to those who offer recent experience with independent system operator tariffs, market operations and services, transmission issues, and bulk power markets like those operated by the CAISO. Addendum to FAR 52.212-2 SUBPARAGRAPH (a). Technical and past performance, when combined, are more important than price. However, award shall be made to the offeror whose proposal is determined to best meet the needs of the Government after consideration of all factors i.e., provides the "best value." "Best value," for the purpose of the contract is defined as the procurement process that results in the most advantageous acquisition decision for the Government and is performed through an integrated assessment and trade-off analysis between technical and price factors. Include a completed copy of Provision at 52.212.3, Offeror Representations and Certifications-Commercial Items (May 2001) with offer. Clause 52.212-4, Contract Terms and Conditions-Commercial Items (May 2001), applies. Addendum to FAR 52.212-4: 1. 52.252-2 Clauses Incorporated By Reference (FEB 1998). This contract incorporates one or more clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Clauses are as follows: 52.217-8 and 52.217-9. Clause 52.212-5, Contract Terms and Conditions Required To Implement Statutes or Executive Orders-Commercial Items (May 2001) applies. Addendum to FAR 52.212-5: The following clauses are incorporated by reference: 52.203-6 with A1; 52.219-4; 52.219-8; 52.222-21; 52.222-26; 52.222-35; 52-222-36; 52.222-37; 52.225-13; 52.225-15; 52.225-16; 52.232-33; 52.239-1. E-mail questions to C. Handley at charlotte.handley@ferc.fed.us. no later than October 19, 2001. E-Mail C. Handley of your intent to submit a proposal no later than October 19, 2001. LINKURL: andrew.sakallaris@ferc.fed.us LINKDESC: Click here to request copies of OCI questionnaire and the past performance form EMAILADD: charlotte.handley@ferc.fed.us EMAILDESC: charlotte.handley@ferc.fed.us CITE: (W-282 SN5102V8)