PART II
SCHEDULE
SECTION
TITLE
D
Scope of Services
E
Special Terms and Conditions
RFP No. 016-015
Diesel Fuel Price Risk Management Consulting Services
Virginia Railway Express
11
SECTION D
SCOPE OF SERVICES
___________________________________________________
D.1
D.2
OVERVIEW
A.
The selected firm is referred to herein as either the “Consultant” or the
“Contractor.” If the firm chooses to use the services of Subconsultant(s),
they will be referred to either as the “Subconsultant(s)” or
“Subcontractor(s).”
B.
The Consultant shall execute two (2) Contracts referred to herein as either
“Contract” or “Contracts.” Therefore, the words will be used
interchangeably.
C.
All references to VRE herein shall include PRTC.
D.
The Consultant shall provide all labor, supervision, materials, supplies,
and transportation and shall have sufficient financial resources to complete
the Scope of Services to the satisfaction of VRE and PRTC.
E.
In the performance of this Contract, the Consultant shall comply with
ATTACHMENT U.1 – GENERAL TERMS AND CONDITIONS
included herein.
GENERAL REQUIREMENTS
A.
The Consultant shall be responsible for advising VRE and PRTC with
respect to systematic purchasing decisions related to diesel fuel.
B.
VRE and PRTC are seeking to reduce the range of prices each expects to
pay for its fuel and to reduce the volatility of fuel costs. The Consultant
shall assist in accomplishing these goals with respect to the budgetary and
cash-flow risks that each organization’s consumption of fuel presents.
C.
VRE and PRTC realize there are multiple ways to approach price risk
management (e.g., “hedging via swaps,” caps, “futures” purchases, etc.)
that may be more or less suited to VRE’s and PRTC’s needs, and to the
Virginia laws governing such activities for public entities. Thus, the
Consultant shall have a mastery of these and other risk management
approaches to be applied to each organization’s situation in order to
customize a plan that is ideally suited to each operating environment.
RFP No. 016-015
Diesel Fuel Price Risk Management Consulting Services
Virginia Railway Express
12
D.
D.3
The Consultant shall utilize its mastery and expertise to educate VRE and
PRTC about the various possible approaches, learn about the sensitivities
of VRE and PRTC, and customize an appropriate course of action. The
course of action may be different for the two (2) organizations. However,
both organizations are mindful of the possibility there may be economies
of scale that could induce the two (2) organizations to pursue a common
course of action.
SPECIFIC REQUIREMENTS
The Consultant shall perform the following tasks:
A.
Review current fuel practices, fuel budgets, fuel procurement practices
and contracts, for both VRE and PRTC, in order to develop a
comprehensive understanding of the factors that have shaped practices to
date.
B.
Recommend changes to practices to enhance the fuel purchasing program.
C.
Develop and assist in the incorporation of fuel cost hedging alternatives
into the fuel supply contracts, as requested.
D.
Develop and assist in the implementation of hedging strategies outside of
the fuel supplier contracts, as requested.
E.
Assist in establishing the hedging requirements for fuel suppliers and in
evaluating the bids received.
F.
Work directly with fuel suppliers or others to put fixed price or futures
contracts into place, as requested.
G.
Track pricing and risk management developments and provide ongoing
advice and budgetary forecasts to VRE and PRTC to account for changing
market and other conditions.
RFP No. 016-015
Diesel Fuel Price Risk Management Consulting Services
Virginia Railway Express
13