Vermont-VEIC Contract for EEU
ATTACHMENT B
COMPENSATION, PAYMENT AND PERFORMANCE PROVISIONS
The State shall compensate Contractor for satisfactory performance of this Agreement as
follows:
1. Total Agreement and Annual 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. The annual compensation amount for eligible costs and
expenses for each year of the duration of this Agreement shall not exceed the following
amounts (as laid out in Attachment D to this Agreement) without prior Board approval:
$6,995,384 in 2000; $9,247,078 in 2001; and $11,343,621 in 2002. Any performance
incentive earned and paid in any year pursuant to Attachment C of this Agreement shall not
be included in the annual compensation caps above, but shall be subject to the total
compensation limitation for this Agreement.
Any budgeted funds not expended during a budget 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 4.E of Attachment A 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 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
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Vermont National Bank under the Contractor’s line of credit with Vermont National 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 a non-performance based Fee of 1.45% of its total eligible
monthly costs and expenses incurred.
The Contractor shall come to agreement, in accordance with the guidelines detailed in OMB
Circular A-122, with the Contract Administrator and the Fiscal Agent on the following items
prior to the submission of the Contractor’s first monthly invoice:
 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.
Notwithstanding the above, all eligible costs, expenses and fees paid to the Contractor are
subject to the budget limitations specified in Paragraphs 1, 4 and 5 of this Attachment and
the Total Compensation limitation detailed in Paragraph 5 of the main body of the
Agreement.
The Contractor, at its own risk, may incur reasonable, eligible costs and expenses to perform
the Work required by this Agreement prior to the execution of this Agreement. Eligible costs
and expenses incurred on or after January 18, 2000, and prior to the execution of this
Agreement may only be recovered pursuant to the terms of this executed Agreement. Costs
and expenses incurred prior to January 18, 2000, may not be recovered.
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 4.E of Attachment A of
this Agreement, the Contractor will be compensated for such work by the requesting utility.
Any such compensation is not included in the annual or total compensation caps in Paragraph
1 of this Attachment and 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”). Compensation for such General Administrative
Costs shall be limited over the period of this Agreement to an amount not to exceed
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$513,952. In the event of extraordinary circumstances not reasonably foreseeable, the
Contractor may request that the Board increase this not-to-exceed amount. For purposes of
this not-to-exceed amount, General Administrative Costs shall not include performancebased or non-performance-based fees. Data collection and reporting and support for resource
planning and program evaluation activities shall not be subject to this not-to-exceed amount,
nor included in General Administrative Costs.
5. Limitation on Recovery of Information Technology Costs
The Contractor shall provide the information technology services and equipment set forth in
the Response to meet the information technology specifications and requirements set forth in
Section III.C.6 of the RFP. The cost to provide the information technology services and
equipment as described above shall not exceed $694,103 over the term of this Agreement,
without prior written approval of the Board. If additional specifications are required by the
Board or the Contract Administrator, the information technology budget shall be increased
accordingly with the written approval of the Board, subject to the total limit on compensation
set forth in Paragraph 5 of the main body of this Agreement.
6. Invoice Requirements
The Contractor shall submit monthly invoices of eligible costs and expenses for payment by
the 15th day of the subsequent month or the next business day if the 15th 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 Contractor shall work with the Contract
Administrator, Fiscal Agent, and the DPS to develop an invoice format and requirements for
implementation prior to the first invoice submitted under this Agreement.
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 802-888-3365
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
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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
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 invoices received by the last business day of a month 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 include the
balance of any funds not paid out in prior months and the actual collections from the
distribution utilities in that current month. If there is a shortfall the Board will direct the
Fiscal Agent to first pay the invoices of the Contract Administrator and the Fiscal Agent.
Next any unpaid Contractor invoices from prior months shall be paid 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 C 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
The Contractor is eligible to receive performance incentives as described in Attachment C 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 C, any funds available for the performance incentive but not
earned by the Contractor shall not be paid to the Contractor under this Agreement.
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10. Fund-Shifting Among Core Programs and Carry-over of Funds on an Annual Basis
In order to achieve contractually specified savings targets which are linked to the
performance incentives in Attachment C to this Agreement, the Contractor shall comply with
the following guidelines with respect to fund-shifting and carryover within and between
annual budget years.
A. The Contractor may not shift funds between Core Programs in the Residential area
and Core Programs in the Commercial/Industrial area in each budget year without
prior Board approval.
B. The Contractor may shift funds among Core Programs in the Residential area and
among Core Programs in the Commercial/Industrial area in the current budget year.
At its discretion and in order to take advantage of market opportunities, the
Contractor may over- or under-spend the authorized budget for a Core Program up to
15% of the amount in each Core Program’s budget, as long as the total budget
established for each year in Paragraph 1 of this Attachment is not exceeded; any
budget reallocations greater than 15% require prior Board approval.
C. Notwithstanding the foregoing Paragraph 10.B, the Contractor is not allowed to
materially under-spend (i.e. more than 5% of) the total annual budget for the LowIncome Multi-Family, the Low-Income Single-Family, and the Dairy Farms Core
Programs in each budget year without prior Board approval.
D. The Contractor shall comply with the requirements in Paragraphs 19 and 46 of the
MOU concerning fund shifting between and within programs in a prospective annual
budget year and the carry-over of unexpended funds from one annual budget year to
the next.
11. Annual Request for Reallocation of Funds
Annually on or before September 1, commencing in the year 2000, the Contractor shall file
with the Board, DPS, and each Vermont electric distribution utility a request for re-allocation
of funds between and among Core Programs. Notwithstanding the previous sentence, in the
year 2000, this re-allocation request shall be filed by October 1. Such request shall also
address the issue of whether any anticipated unspent amount of the Contractor’s Boardapproved budget should be carried over to subsequent years. In no event may such request
seek a change, for a given year, in the total annual amount to be collected from the
distribution utilities as approved in the Order.
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. After comments are
submitted, the Board shall review the Contractor’s request, and either approve it or approve
it with modifications.
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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.
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
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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.
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