[Federal Register Volume 72, Number 41 (Friday, March 2, 2007)]
[Notices]
[Pages 9538-9539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-960]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

National Institutes of Health


Notice of Determination and Findings; Authority To Incorporate a 
No-Setoff Commitment

    Upon the basis of the following findings pursuant to authority of 
Title 31 U.S.C. Section 3727 and in accordance with the Presidential 
delegation of authority dated October 3, 1995, as referenced in the 
Federal Acquisition Regulation 32.803(d) it is hereby determined that 
the use of a no-setoff provision is appropriate to facilitate the 
private financing of a steam production facility at NCI-Frederick.

Findings

    1. Despite an essentially static space inventory, the cost of steam 
under NCI-Frederick's interagency agreement with the Fort Detrick U.S. 
Army Garrison has increased by 70% from 2003 to 2006. In addition, 
despite numerous energy saving projects accomplished over the past 9 
years, quantities of steam billed by the Army to the NCI have remained 
20%-30% above amounts estimated/measured through engineering methods.
    2. In response to the escalation in steam related energy costs/
quantities, a thorough review of steam production alternatives was 
conducted. Based on this analysis it was concluded that significant 
energy and cost savings could be achieved through the construction of a 
new steam production facility and the subsequent severing of ties to 
the existing Fort Detrick boiler plant.
    3. On behalf of Potomac Edison Company, APS Constellation, L.L.C. 
has proposed a privately financed Energy Savings Performance Contract 
(ESPC) to construct the new steam facility. Securing the private 
financing for this project is dependent upon incorporation of a no-
setoff provision in the contract.
    4. Inclusion of the no-setoff provision will enable the Contractor 
to secure financing with an interest rate that is lower than the 
interest rate that would be obtained in the absence of the no-setoff 
provision. The Government will benefit directly from a lower interest 
rate in the form of lower interest payments over the 20-year term of 
the repayment.
    5. Incorporating a no-setoff provision will not increase the risk 
of the Government since the Basic Ordering Agreement requires that the 
Contractor guarantee that the energy and energy-related cost savings 
exceed the payments to the Contractor during the performance period 
following construction of the project. In the event that the savings 
fall below the level guaranteed by the Contractor, the Contractor will 
be responsible for crediting the difference to the Government.
    6. In accordance with the guidance set forth in FAR 32.803(d), a 
review of the proposed contractor's financial status revealed no 
significant indebtedness to the United States.

[[Page 9539]]

Determination

    Based on the foregoing, I hereby determine that it is the 
Government's best interests to approve the use of Alternate 1 to the 
Clause at FAR 52.232-23 which authorizes incorporation of a no-setoff 
provision.

    Dated: February 22, 2007.
Daniel J. Frasier,
Head of the Contracting Activity, Director, OAMP, OA, OM, National 
Institutes of Health.
[FR Doc. 07-960 Filed 3-1-07; 8:45 am]
BILLING CODE 4140-01-M