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Long Term Contracting Process; Clarification of Project Security Deposits

The Maine Public Utility Commission (MPUC) Request for Proposals for Long-Term Contracts for Capacity and Associated Energy (RFP) establishes a bid process that includes three stages:

  • Stage 1-Bidder Registration
  • Stage 2-Comprehensive Proposals; Indicative Pricing
  • Stage 3-Final Proposals; Binding Pricing

As specified in the RFP (Section 3.4.2), Stage 2 proposals must be accompanied by a Project Security Deposit. During Stage 2, the Commission will assess all aspects of the proposals to determine eligibility for Stage 3. The RFP explicitly states that, on the basis of the Stage 2 proposals, “[b]idders not selected for further consideration will be notified and their Project Security Deposits will be refunded.” The RFP (Section 3.4.3) further states that Stage 3 winning bidders will have their Project Security Deposit refunded upon the posting of the Project and Performance Security.

The Purpose of the Project Security Deposit is to ensure that bidders have a minimum level of financial capability prior to the MPUC devoting resources on bid review. As indicated in the language of the RFP, the basic intent is that the Project Security Deposit will be refunded to the bidder either upon notice of an unsuccessful bid or upon the posting of Project Security by successful bidders. In addition, Stage 2 bids are not firm or binding. Thus, bidders may withdraw their Stage 2 bids at anytime prior to the Stage 3 submission and their Project Security Deposit will be returned. The only exception would be the extraordinary circumstance in which a bidder acts in bad faith or in a fraudulent manner. Stage 3 bids, however, are firm and binding. Therefore, a bidder that attempts to withdraw a Stage 3 bid would, among other MPUC action, risk forfeiture of the Project Security Deposit.