Conserv.

Cent. Heat

Cogen.

Other Potential Benefits from Forrestal • Independent Power Production 10-40 x 250 MW Plants

Minimum $12 billion capital required • Base Realignment and Closure (BRAC) Local Development Facilitated

• Other Infrastructure-Water, Waste, Sewage • Other Agencies on Inter-Agency Basis

DOE, NASA, VA, GSA

Federal Energy Challenge

• Federal Government Must; Modernize Its Energy Infrastructure Federal Agencies Lack Funds for Needed Upgrades

• Private Sector Has Capacity to Finance Upgrades

• Dynamic Energy Marketplace Provides New Technological Efficiencies

• Federal Agencies Unable to Take Advantage of Changes

• Federal Deals Too Time-Consuming for Private Sector

A New "Window" Will:

• Augment; Depleted Expertise of Federal Sector

• Reduce Risks and Costs Resulting from Time-Consuming Process

The Energy Industry-Competitive and Innovative

• Consumers Want and Are Getting More Choices Than Ever Before

Energy Companies Responding with Intensive Marketing, Technological Development and Creative Pricing

• Consumers Are Making More Informed Decisions about Best Value

• The Best Energy Providers Profit by Helping Consumers Cut Costs

How Is the Federal Government Reacting?

• Federal Sector Lags in Taking Advantage of These Innovations

• Private Sector Consumers Are Benefitting from This Innovation, But Federal Government is Not

• Federal Energy Budgets Are Being Cut Even Though Managers Need Increased Expertise to Deal with Changing/Dynamic Market

• Even if Budgets Are Increased, Managers Still Are Burdened by Inefficient Regulations

Three Alternatives for Federal Government

• Maintain Status Quo

• Work within FAR and Boost Funding for Personnel with Sufficient Expertise for Federal Government to Take Advantage of Dynamic New Market

Develop Alternative to FAR and Reprogram a Portion of Remaining Federal Resources to Leverage Private Sector Capital to Take Advantage of Dynamic New Market

Private Sector and the Federal Market

• Federal Sector a Vast Market to "Mine" For Profitable Opportunities amid Wasted Expenditures

• However, Private Sector Companies Find Dealing with Federal Sector Too Cumbersome Compared to Other Sectors

• Time-Sensitive Proposals Don't Wait for Time-Consuming FAR Process

• Proscriptive RFPs under FAR Preclude Cost-Effective Alternatives from Being Proposed

How Forrestal Would Make a Difference

• Agencies Could Use Forrestal's Knowledgeable Experts to Augment Depleted Staff Expertise

• Forrestal's Expedited Process to Solicit Requirements-Oriented Proposals, Rather Than Rely on “Tunnel Vision" of Proscriptive RFPs

• Innovative Proposals Would Come Through Forrestal "Window"

• Private Companies Could Better Manage Risks on Federal Projects if Contracting Decisions Are Made in a Timely, Business-Oriented Manner

Principal Market/Beneficiary

• Department of Defense

Energy, Waste, Water Utility Infrastructure

• More Than $20 Billion in New Capital Requirements Estimated

• Approximately $5 Billion Required Immediately, with Only $1 Billion Programmed

• Forrestal Proposal to be Targeted toward DOD, with Other Agencies Eligible on "Inter-Agency" Basis

Guideposts Federal Agencies

Use of Forrestal Must Be Optional for Agencies

• Forrestal Must Maximize Options for Agencies on a Technologically Neutral Basis

• Bidders on Forrestal Contracts Must Not Have Any Ownership in Corporation

Agencies Must Have Ongoing "Master Contract" with Forrestal Enabling Them to Expedite Project Orders

• Forrestal Must Be Self-Sustaining with No Full Faith and Credit Backing Guideposts Industry

. Forrestal Must Not Displace Capabilities of Private Sector Companies

• Forrestal's RFPs Should Encourage Wide Range of Creativity to Maximize Quality Options for Agencies

Procurement, Negotiation and Contracting Procedures Must Be Compatible with Commercial Procedures in Private Sector

• Forrestal's Fee Structure Must Insure That Bidders Place Agency's Interests Ahead of Forrestal's Interests

104th CONGRESS

1ST SESSION

H.R.

IN THE HOUSE OF REPRESENTATIVES

introduced the following bill; which was referred to the Committee on

A BILL

To authorize the establishment of the Forrestal Corporation to assist the Department of Defense with improving the energy efficiency, environmental performance, and operation of its energy production, consumption, and distribution facilities and to respond to the future energy needs of the Department of Defense.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE XXIX-FORRESTAL ENERGY CORPORATION

SEC. 2901. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.-This title may be cited as the "Forrestal Corporation Act of 1995".

(b) TABLE OF CONTENTS.-The table of contents of this title is as follows:

TITLE XXIX-FORRESTAL ENERGY CORPORATION

Sec. 2901. Short title; table of contents.

Sec. 2902. Definitions.

Sec. 2903. Purpose of title.

Sec. 2904. Establishment of Corporation.

Sec. 2905. Powers of Corporation.

Sec. 2906. Process of organization.

Sec. 2907. Board of Directors.

Sec. 2908. Governance of the Corporation.

Sec. 2909. Ownership of the Corporation.

Sec. 2910. Debt of the Corporation.

Sec. 2911. Forrestal Corporation Advisory Panel.

Sec. 2912. Authority of military departments to enter into Forrestal contracts.
Sec. 2913. Forrestal project list.

Sec. 2914. Annual reports.

Sec. 2915. Conforming amendment regarding sale of electric energy at wholesale. Sec. 2916. Authorization of additional corporations.

Sec. 2917. Contracting by other departments or agencies.

SEC. 2902. DEFINITIONS.

For purposes of this title:

(1) The term "Advisory Panel" means the Forrestal Corporation Advisory Panel established by section 2911.

(2) The term "defense energy facility" means an- (A) energy production, consuming, or distribution facility owned or operated by, or leased to or from, a military department; and (B) any related infrastructure owned or operated by a military department, or leased to or from a military department, located at the same site as a facility under subparagraph (A).

(3) The term "Board of Directors" means the Board of Directors of the Corporation.

(4) The term "Comptroller General" means the Comptroller General of the United States.

(5) The term "Corporation" means the Forrestal Corporation authorized to be established by section 2904 or any additional corporation established pursuant to section 2916.

(6) The term "Director" means a member of the Board of Directors.

(7) The term "environmental study" means a study intended to satisfy the requirements of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et se.) with respect to a defense energy facility.

(8) The term "facility audit" means a survey of a defense energy facility that provides sufficiently detailed information to allow a military department to make an informed decision whether to proceed with one or more Forrestal projects at such defense energy facility.

(9) The term "Forrestal contract" means an agreement for all or part of a Forrestal project (A) directly between the Corporation and a military department, (B) between or among a military department and one or more private parties that has been negotiated by the Corporation, or (C) among a military department, one or more private parties and the Corporation.

(10) The term "Forrestal project" means any construction, operation, refurbishing, rebuilding, upgrading, or retrofitting of a defense energy facility or any environmental study or facility audit performed by a private party for a defense energy facility.

(11) The term "military department" means the Department of the Army, the Department of the Navy, and the Department of the Air Force.

(12) The term "private party" means any entity or organization other than the Department of Defense, a military department, or the Corporation.

SEC. 2903. PURPOSE OF TITLE.

The Congress hereby declares that it is the purpose of this title to establish one or more private corporations

(1) to help save Federal tax dollars by improving the energy, efficiency, economic performance, and environmental acceptability of defense facilities;

(2) to help the Department of Defense and the military departments identify, assess, and satisfy their energy and related defense energy facility needs by acquiring Forrestal projects from private parties;

(3) to acquire facility audits from private parties for defense facilities to determine the most economic and environmentally beneficial means of meeting such needs;

(4) to facilitate Forrestal contracts between private parties and the military departments and to enter into Forrestal contracts with the military departments and private parties;

(5) to function as a central objective source of energy-related technical, financial, and contracting expertise and advice for the Department of Defense and the military departments; and

(6) to promote commercially acceptable buying practices in the performance of Forrestal projects.

(7) to foster synergistic cooperation among defense energy facilities and neighboring energy producers and consumers, including local utilities.

SEC. 2904. ESTABLISHMENT OF CORPORATION.

(a) ESTABLISHMENT-There is hereby authorized to be created in accordance with section 2906 a District of Columbia business corporation to be named the "Forrestal Corporation".

(b) TREATMENT OF CORPORATION-The Corporation shall not be an agency, instrumentality or establishment of the United States Government and shall not be a "Government corporation" or "Government controlled corporation" within the meaning of chapter 91 of title 31, United States Code. The Corporation shall be subject to the provisions of this title and, to the extent not inconsistent with this title, to the District of Columbia Business Corporation Act (D.C. Code, sec 29-301 et seq.). Except as provided in this title, or applicable laws of the United States, the Corporation shall have all the powers of a District of Columbia business corporation.

(c) OFFICE-The Corporation shall maintain an office for the service of process and papers in the District of Columbia, and shall be deemed, for purposes of venue in civil actions, to be a resident thereof. The Corporation may establish offices in such other place or places as the Board of Directors may deem necessary or appropriate for the conduct of its business.

SEC. 2905. POWERS OF CORPORATION.

(a) PERFORMANCE OF FORRESTAL CONTRACTS-The Corporation may enter into a Forrestal contract to provide any military department a Forrestal project, through the use of private parties, except that in performing any such contract, the Corporation shall procure all subcontracts, supplies, and services involving expenditures of over $100,000 through the use of competitive procedures approved by the Board of Directors.

(b) NEGOTIATION-In lieu of performing a Forrestal contract directly, the Corporation may negotiate Forrestal contracts between or among the military departments and one or more private parties and may solicit and evaluate proposals and bids for such contracts.

(c) RELATED GENERAL POWERS-In furtherance of its powers under subsections (a) and (b), the Corporation

(1) may lease, sublease, purchase, accept gifts or donations of, or otherwise acquire any real, personal, or mixed property, or any interest therein, may own, hold, improve, use, or otherwise deal in or with such property, and may sell, convey, mortgage, pledge, lease, sublease, exchange, or otherwise dispose of such property;

(2) may perform management support services in connection with Forrestal projects;

(3) may charge to and collect fees for any advisory or management support services performed by the Corporation, and for any financial assistance provided by the Corporation with respect to Forrestal projects;

(4) may, only to the extent such actions have been approved in accordance with subsection (d), enter into joint ventures, partnerships, limited partnerships, and other types of contractual arrangements, and make loans, enter into guaranty agreements, and otherwise provide financial assistance to a military department or private parties, or invest in the securities of private parties in connection with the leasing, ownership, or financing of a Forrestal project;

(5) may provide or arrange for environmental indemnification of private parties for environmental hazards existing at any defense energy facility at the time the Corporation undertakes any Forrestal project with respect to such facility;

(6) may sue and be sued in its corporate capacity in any court of competent jurisdiction

(7) may issue capital stock in accordance with section 2909; and

(8) may issue notes, bonds, and otherwise incur debt in accordance with section 2910.

(d) LIMITATIONS-Notwithstanding this section or any other provision of this title, the Corporation shall not have the power, directly or indirectly, to invest in a Forrestal project or otherwise acquire or retain an ownership in a Forrestal project or its associated stream of revenues without the express written approval of such actions by the Secretary of Defense. In all such cases, any opportunity to invest in the Forrestal project must be available to private parties under competition procedures approved by the Board of Directors that at a minimum involve advertising such opportunity in the Commerce Business Daily. The Corporation shall not have the power to perform the facility audit, design, construction, or long-term operation of a Forrestal project, except through the use of private parties. [Note: In addition to design, construction, what about rebuilding, upgrading, etc., which are terms that appear in the definition of Forrestal project.

SEC. 2906. PROCESS OF ORGANIZATION.

(a) INCORPORATION—(1) within 30 days after the date of the enactment of this title, the Secretary of Defense shall appoint the Chairman of the Board of Directors and 4 additional persons, who together shall be the incorporators of the Corporation. The incorporators may not be officers or employees of the United States.

(2) Within 60 days after the completion of the appointments, the incorporators shall take whatever actions are necessary or appropriate to incorporate the Corporation, including the signing and filing of its articles of incorporation, and shall serve as the initial Board of Directors.

(b) INITIAL OPERATIONS (1) Within 60 days after the incorporation of the Corporation, the Chairman of the Board of Directors shall appoint an interim Presi