U.S. Department of Energy - Energy Efficiency and Renewable Energy

Tribal Energy Program

Contracting Out

If the decision is made to contract out the bulk of the detailed project design and construction it is very important that the project description, feasibility assessment, project management, and project implementation roles and responsibilities be well defined. Unless there is an overriding reason not to, multiple bids should be solicited for the contractor. In selecting a contractor, technical experience, management experience, transparent accounting, tightly defined milestones, and good communications skills are all important.

Even if the bulk of the logistical, procurement, and construction responsibilities are contracted out, tribal management oversight is critical. The primary benefits of contracting out to an experienced organization is that the project will likely move faster, once the agreement is consummated. A disadvantage is that it is more difficult to build internal tribal capacity, unless it is explicit in the agreement that certain defined labor is to be provided by tribal members. Under such an arrangement, tribal capacity building can and should be part of the agreement, at a minimum focused on developing the ability for tribally managed operations and maintenance following construction and commissioning. The contract could also include a process to transfer the system operation to the tribe, following four steps: build, operate, train, and transfer.