Vermont-VEIC Contract for EEU
ATTACHMENT J
COMPENSATION, PAYMENT AND PERFORMANCE PROVISIONS
2003-2006
This Attachment provides the compensation, payment and performance provisions that will be in
effect during the period 1/1/2003 through 5/1/2006. The State shall compensate Contractor for
satisfactory performance of this Agreement as follows:
1. Total Compensation
The total compensation amount for all eligible costs, expenses and performance incentives
under this Agreement may not exceed the maximum amount set forth in Paragraph 5 of the
main body of this Agreement.
For the period of January 1, 2003 through December 31, 2005 it is agreed that the Contractor
will manage the budget for this Agreement as a single, three-year budget. However, in any
single calendar year, the Contractor shall not actually be paid more then the total Contractor
EEC Funds available for that year.
For the period of January 1, 2003 through December 31, 2005 this Agreement shall include a
three-year budget sub-divided into the following categories Business; Residential;
Administration (as defined in Paragraph 4 below) and Information Technology.
Any Contractor EEC Funds not expended during a calendar year may be carried over to the
subsequent year of this Agreement pursuant to the terms of Paragraphs 10 and 11 of this
Attachment.
2. Eligible Costs and Expenses
The Contractor shall be compensated for reasonable and appropriate services provided and
expenses incurred in order to perform the Work. Compensation for such services and
expenses shall be based on the Contractor’s actual costs incurred throughout the term of this
Agreement, except that compensation for actual costs incurred while performing Work
pursuant to Paragraph II.N of Attachment I will be made according to the provisions of
Paragraph 3 below.
Contractor’s actual costs shall include: wages or salaries of staff working directly on the
Work; fringe-benefit and payroll-related costs associated with such wages and salaries; an
equitable allocated share of the Contractor’s organization-wide indirect costs; any and all
out-of-pocket costs (e.g., telecommunications, travel, copying/printing, postage/delivery,
marketing, equipment) directly attributable to performing the Work; mileage reimbursement
at the IRS-approved rate only for use of a personal motor vehicle; any and all costs to
develop and produce Customized Software; any and all subcontractor costs directly
attributable to the Work; funds disbursed to program participants (e.g., customer or vendor
incentives, cooperative marketing); and other reasonable and appropriate costs that the
Contractor incurs to accomplish the Work. The State and the Contractor agree to use the
guidelines established by the Federal Government for Federal cost reimbursable grants as the
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basis for determining whether or not a particular direct or indirect cost item incurred under
this Agreement is reasonable and appropriate. Such Federal guidelines are contained in OMB
Circular A-122 dated June 1, 1998.
In addition to the above costs, Contractor shall also be reimbursed its actual cost, not to
exceed the daily Prime Rate listed in the Wall Street Journal as charged to the Contractor by
Chittenden Bank under the Contractor’s line of credit with Chittenden Bank, to borrow funds
to finance any eligible costs and expenses incurred and paid for by the Contractor prior to
receiving its monthly payment from the Fiscal Agent or due to a shortfall in funds available
from the Fiscal Agent. Failure of the Fiscal Agent to pay an approved Contractor invoice on
a timely basis due to the lack of available funds shall not constitute an acceptable basis on
which the Contractor may terminate this Agreement; however, a material failure of this type
may (if of such magnitude and duration as to impede or prevent expected operations)
constitute grounds for modification or reduction of Contractor’s energy efficiency activities
and obligations (but only to the extent directly required by such delay or failure of payment).
The Contractor shall also be paid an Operations Fee of 1.45% of its total eligible monthly
costs and expenses incurred.
The Contractor shall operate in accordance with the guidelines detailed in OMB Circular A122. The Contract Administrator and the Contractor have come to agreement on the
following items:
 The types of costs that constitute the Contractor’s fringe-benefit and payroll-related
costs and the Contractor’s organization-wide indirect costs; and
 The method for allocating an equitable share of the Contractor’s fringe-benefit and
payroll-related costs and the Contractor’s organization-wide indirect costs to the
Work.
Any modifications to the above two items must be agreed upon in advance by the Contract
Administrator.
Notwithstanding the above, all eligible costs, expenses and fees paid to the Contractor are
subject to the Total Compensation limitation detailed in Paragraph 5 of the main body of this
Agreement.
3. Reimbursement for Costs Associated with Distributed Utility Planning
In accordance with Paragraphs 38, 40, and 41 of the MOU, if a Vermont electric utility
requests the Contractor to perform any Work pursuant to Paragraph II.N of Attachment I of
this Agreement, the Contractor will be directly compensated for such Work by the requesting
utility. Any such compensation is not included in the total compensation cap in Paragraph 5
of the main body of this Agreement.
4. Limitation on Recovery of General Administrative Costs
General Administrative Costs shall include the following tasks: general project management;
budgeting and financial management; and management of the requirements of this
Agreement (i.e. “contract management”). For the period of January 1, 2003 through
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December 31, 2005, compensation for such General Administrative Costs identified in
Attachment N, shall not exceed $430,154 by more than 10% unless Contractor is granted
prior written approval from the Board to exceed this limit.
5. Limitation on Recovery of Information Technology Costs
The Contractor shall provide the information technology services and equipment set forth in
the Work. For the period of January 1, 2003 through December 31, 2005 compensation for
such information technology costs identified in Attachment N shall not exceed $1,244,041 by
more than 10% unless Contractor is granted prior written approval from the Board to exceed
this limit.
6. Invoice Requirements
The Contractor shall submit monthly invoices of eligible costs and expenses for payment by
the 20th day of the subsequent month, or the next business day if the 20th is not a business
day. All invoices shall, at a minimum, include the name, address, and tax I.D. number of the
Contractor; an itemized summary identifying and describing the Work performed and
expenses incurred; the amount claimed for each task or expense category; and the total
amount of the invoice. Invoices shall clearly separate requests for compensation for labor
expenses and other expenses including payments to subcontractors, and reimbursement for
funds disbursed to EEU program participants. The invoice format that has been established
and approved for the period of March 1, 2000 to December 31, 2002 by the Contract
Administrator shall be used for this Agreement extension period. Any modifications to this
format shall be pre-approved by the Contract Administrator.
The Contractor shall require that invoices to Contractor from subcontractors or other third
parties shall, at a minimum, conform to the Contractor’s invoice requirements stated above
and to any format and requirements established by the Contract Administrator and Fiscal
Agent.
7. Invoice Review and Approval
Unless notified of a different (or additional) address, as provided herein, the Contractor shall
submit invoices in duplicate for review and approval to:
Michael Wickenden, Contract Administrator
446 Tenney Hill Road
Hyde Park, VT 05655
802-888-6231
Fax 802-888-4296
The Contract Administrator, no later than (five) 5 business days after receipt of the invoice,
shall review the invoice and either approve the invoice for payment or inform the Contractor
in writing of any disputed amount and the basis for such dispute. Any undisputed amounts
shall be approved for payment by the Contract Administrator.
If an invoice is disputed by the Contract Administrator, the Contractor shall answer the
Contract Administrator’s concerns in writing within five (5) business days of the receipt of
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written notice from the Contract Administrator. If the Contractor and the Contract
Administrator cannot resolve the dispute within ten (10) working days after receipt of the
Contractor’s reply, the Board and Contractor shall attempt to resolve the dispute upon a
written request by the Contractor to the Board. If the Board and the Contractor cannot
resolve the dispute within ten (10) working days after receipt of Contractor’s request, each
party may pursue its available judicial or other remedies.
8. Payment of Invoices
Upon approval of an invoiced amount, the Contract Administrator shall immediately send
the invoice and its accompanying supporting documentation to the Fiscal Agent for payment.
Disbursements by the Fiscal Agent will be made once each month; the Fiscal Agent will pay
approved monthly invoices by the last business day of the following month.
The parties understand that the Fiscal Agent may not have collected adequate funds from the
distribution utilities in a particular month to pay Contractor’s approved invoices in full. In
order to be made aware of these shortfalls, the Board will direct the Fiscal Agent to inform
the Contract Administrator (who shall then inform the Contractor) on a monthly basis of the
total funds available to pay Contractor’s invoices. The total funds available shall be the
Contractor EEC Funds collected to date. Any unpaid Contractor invoices from prior months
shall be paid first and then a partial payment shall be made on Contractor’s current monthly
invoice. All Contractor’s approved invoices shall be paid in full, as funds become available.
At the expiration of this Agreement, the Contractor will most likely still be due payments for
one or more monthly invoices and for any performance incentives earned pursuant to
Attachment K to this Agreement. In such a case, the Contractor’s approved unpaid invoices
shall be paid prior to any payments being made to any other contractor who has been hired
by the State to serve as the EEU.
9. Performance Incentive Mechanism
For the period of January 1, 2003 through December 31, 2005 the Contractor is eligible to
receive performance incentives as described in Attachment K to this Agreement.
The parties agree that after the Contract Administrator and the Board have made a final
determination on the performance incentive award for the Contractor in accordance with the
procedures in Attachment K, any funds available for the performance incentive but not
earned by the Contractor shall not be paid to the Contractor.
10. Fund-Shifting Between the Business Sector and the Residential Sector
Without prior Board approval, the Contractor shall not establish budgets for the period of
January 1, 2003 through December 31, 2005 that change the ratio of Business Sector or
Residential Sector spending to the total of both the Business Sector and Residential Sector by
more than 5 percentage points.
If the Contractor seeks such approval, its request shall also address possible impacts in its
performance indicators for electrical savings and total resource benefits as detailed in
Attachment K.
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11. Annual Request for Carryover of Funds
Annually on or before November 1 in Years 2003 and 2004, the Contractor shall, if
necessary, file with the Board, DPS, and each Vermont electric distribution utility a request
to carry over any unspent Contractor EEC Funds from Year 2003 to 2004 and from Year
2004 to 2005. This request shall be submitted as part of the Annual Plan.
Such requests to carry forward any anticipated unspent Contractor EEC Funds shall be
required only if the unspent Contractor EEC Funds for a given year are greater than 5% of
the total Contractor EEC Funds available in that year; if the unspent Contractor EEC Funds
for 2003 or 2004 are less than 5% of the total Contractor EEC Funds available in that
particular year, the unspent Contractor EEC Funds shall automatically be carried forward to
the next year. In no event may such request seek a change, for a given year, in the total
annual amount to be collected from Vermont electric ratepayers as approved in any of the
corresponding Board orders or rules that sets out the EEC in each of the three years.
If the request to carryover Contractor EEC Funds from one year to the next is not approved
and the result of such non-approval is that the overall three-year budget for the Contractor is
reduced then a corresponding reduction in the overall Work as set forth in Attachment I will
be agreed upon. In addition, the Performance Incentive Mechanism per Attachment K will
be adjusted to reflect the lower budget that the Contractor will have to accomplish the
various milestones and goals detailed in Attachment K. The Contractor will make such a
request for a reduction in the Work and an adjustment to the goals and milestones in writing
to the Board. The Contractor and the Board will mutually agree on such reductions and
adjustments.
The Board will provide the DPS, the Vermont electric distribution utilities, and all parties on
the service list in Docket No. 5980 an opportunity to submit comments and request a
technical workshop prior to acting on the Contractor’s request for the carry forward of
unspent Contractor EEC Funds. After comments are submitted, the Board shall review the
Contractor’s request, and either approve it or approve it with modifications.
12. No Employee Benefits for Contractor
The Contractor understands that the State will not provide Contractor or Contractor’s
employees or subcontractors with any individual retirement benefits, group life insurance,
group health and dental insurance, vacation and sick leave, Workers Compensation or other
benefits or services available to State employees, nor will the State withhold any state or
federal taxes except as required under applicable tax laws, which shall be determined in
advance of execution of this Agreement. The Contractor understands that all tax returns
required by the Internal Revenue Code and the State, including but not limited to income,
withholding, sales and use, and rooms and meals, must be filed by the Contractor, and
information as to contract income will be provided by the State to the Internal Revenue
Service and Vermont Department of Taxes.
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13. Reliance by State on Representations
All payments by the State under this Agreement will be made in reliance upon the accuracy
of all prior representations by the Contractor, including but not limited to bills, invoices,
progress reports and other proofs of work.
14. Set Off
The State may set off any sums which the Contractor owes the State against any sums due
the Contractor under this Agreement; provided, however, that any set off of amounts due the
State as taxes shall be in accordance with the procedures more specifically provided
hereinafter.
15. Taxes Due to the State
a. Contractor understands and acknowledges responsibility, if applicable, for compliance
with State tax laws, including income tax withholding for employees performing services
within the State, payment of use tax on property used within the State, and corporate
and/or personal income tax on income earned within the State.
b. Contractor certifies under the pains and penalties of perjury that, as of the date this
Agreement is signed, the Contractor is in good standing with respect to, or in full
compliance with a plan to pay, any and all taxes due the State.
c. Contractor understands that final payment under this Agreement may be withheld if the
Vermont Commissioner of Taxes determines that the Contractor is not in good standing
with respect to, or in full compliance with a plan to pay, any and all taxes due to the
State.
d. Contractor also understands the State may set off taxes (and related penalties, interest
and fees) due to the State, but only if the Contractor has failed to make an appeal within
the time allowed by law, or an appeal has been taken and finally determined and the
Contractor has no further legal recourse to contest the amounts due.
16. Suspension of Payment to Contractor
In addition to other remedies, the State reserves the right to suspend all payments to
Contractor if required reports are not provided to the Board or its designated representatives
on a timely basis; if there are continuing deficiencies in Contractor’s reporting, record
keeping or invoicing responsibilities and requirements; or if the performance of the Work is
not adequately evidenced.
17. No Resale
Contractor will not buy materials for performance of this Agreement and resell to the State at
a profit, excluding the fee the Contractor will be collecting on all costs pursuant to Paragraph
2 of this Attachment.
18. Inadequate Appropriations
If this Agreement extends into more than one fiscal year of the State (July 1 to June 30), and
if appropriations are insufficient to support this Agreement, the State may cancel at the end of
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the fiscal year, or otherwise upon the expiration of the existing appropriation authority. The
parties understand that while the Vermont Legislature may enact new legislation that requires
the Board to change or cancel the EEU program and therefore this Agreement (if such new
legislation is enacted, the Board shall have the right to cancel this Agreement), the funds that
support this Agreement are collected from ratepayers and are not subject to State
appropriations. 30 V.S.A. §209(d)(3) states that “. . .Balances in the [EEC] fund shall be
ratepayer funds, shall be used to support the activities authorized in this subdivision, and
shall be carried forward and remain in the fund at the end of each fiscal year. These monies
shall not be available to meet the general obligations of the state. . .”
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