• Getting Started
• Driving Demand
• Financing
  • Assess the Market
  • Define Finance Program Objectives
  • Identify & Engage Financial Partners
  • Design the Financing Program
  • Choose Your Program Structure—Credit Enhancements
  • Choose Your Program Structure—Revolving Loan Funds
  • Draft & Evaluate RFPs
  • Implement Finance Program Initiatives
  • Determine Loan Marketing Channels
  • Evaluate Program Performance
  • Revise Programs & Strategies
  • Capture Lessons Learned
• Workforce Development

Step 5: Draft and Evaluate RFPs

The final stage of designing a program is to draft a Request for Proposals (RFP), evaluate the proposals received, and execute the management services agreement. 

Draft and Issue the RFP
Evaluate Proposals
Negotiate and Execute the Management Services Agreement

Draft and Issue the RFP

At this stage, draft an RFP for internal management review. Refer to information and documents developed during the program design stages to develop the RFP's scope of work. Make sure it provides sufficient detail to attract qualified candidates. For DOE grant recipients, DOE's technical assistance staff may be able to help, if necessary.

View an example RFP requesting bids from financial institutions to administer the lending aspects of an energy efficiency upgrade program.

 

Draft the RFP to reflect the needs and interests of the potential financial partners, to the extent possible. (Note that in some local jurisdictions, procurement rules restrict contact with potential bidders during the RFP drafting phase, and you will need to abide by these rules.) At a minimum, the RFP needs to provide some flexibility to enable responders to suggest alternative structures that could meet the program goals while also achieving an even more mutually beneficial arrangement.

The RFP typically covers:

• Program background, goals, and partners and their roles over the full project cycle; available government funding and guidelines; the target borrower market; types of energy efficiency projects to be financed; economics of the projects; clean energy investment and lending volume targets; and loan marketing.
• Proposed structure and terms of the residential (or commercial) energy efficiency loans, including eligible borrowers, eligible projects, expected tenors, underwriting guidelines, and proposed loan terms.
• Proposed structure of the credit enhancements and/or revolving loan fund, including the risk-sharing formula.
• Prescribed format and content for proposals in response to the RFP, outlining all of the information needed from the proposers regarding its loan terms, preferred credit enhancement structure and risk-sharing formula, loan underwriting guidelines, loan marketing capacity, staff, and qualifications.
• Proposed marketing and outreach plans and strategies to maximize the use of the public funding and lending activity.
• Description of the RFP rules, processes, and schedule that will lead to the selection of financial partner(s) and execution of the implementing agreement(s).

You are ready to issue the RFP after finalizing your list of potential financial partners. Issue the RFP and select a partner(s) in accordance with your competitive procurement procedures.

Evaluate Proposals

After the RFP has been issued, the next task is to evaluate the proposals.

Develop a scoring sheet that provides members of the evaluation team with a way to rank the qualifications of bidders objectively. Criteria that should be carefully evaluated include:

• Qualifications of the proposed program manager, personnel, and program support staff
• Loan documentation, processing, and servicing capabilities
• Management information systems
• Adequacy of capital reserves.

View an example RFP scoring sheet.

 

Negotiate and Execute the Management Services Agreement

Now that you have a qualified financial partner (or partners) on board, you can begin to negotiate, finalize, and execute a mutually beneficial management services agreement (MSA) that clearly specifies loan product terms, credit enhancements, the role of both public and private entities, and the flow of capital among all program participants. This step includes:

• Negotiating the terms of the MSA
• Executing credit enhancements agreements, revolving loan fund agreements, specific loan product terms, and loan origination
• Underwriting and servicing agreements
• Finalizing the details of how you will promote the product to consumers and who will play what roles.

View an example loan program agreement and a sample loan loss reserve agreement.

If you are a DOE grant recipient, DOE's technical assistance team may be able to provide guidance and support if needed.

 

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