DRILLING SERVI ES AT PILGRIM HOT SPRINGS...DRILLING SERVI ES AT PILGRIM HOT SPRINGS The Alaska enter for Energy and Power, (“AEP”) is engaged in exploration to determine the feasibility

PROCUREMENT & CONTRACT SERVICES

DRILLING SERVICES AT PILGRIM HOT SPRINGS The Alaska Center for Energy and Power, (“ACEP”) is engaged in exploration to determine the feasibility of developing energy from geothermal resources located at or near Pilgrim Hot Springs (PHS). Pilgrim Hot Springs is located about 60 road miles north of Nome, Alaska, in the Pilgrim River Valley. It is the intent of ACEP to commence drilling operations in the early summer of 2011, mobilizing approximately mid-June, and pending availability of funding, to complete an exploratory campaign within the 2011 drilling season.

UNIVERSITY OF ALASKA FAIRBANKS RFP NO. 11P0018TR

ELECTRONIC SUBMITTAL PROCESS

The University of Alaska Fairbanks, Procurement and Contract Services Division is modifying the

solicitation process to better serve clients, vendors, and staff in the following manner:

match the current business process by leveraging web services and availability

reflect the way vendors do business in response to a solicitation by parsing sections out to staff members by functional area

save on resources to include staff and vendor preparation time

enhanced communication

bolster competition

The current document describes the project. The solicitation is complemented by a number of support

documents that are identified in the checklist on the electronic signature page. Any strikethroughs of

text shall indicate that the term or condition does not apply to this solicitation.

ACTION PLAN: Vendors may download, review, and print sections at their option. The documents are

organized into three groups. Marketing Group I-links to one document that outlines the purpose of the

proposal with specification or statement of work details, evaluation criteria, and the rate response form

(this document). Legal/Risk Group II-links to a contract document, general provisions, statement of

compliance, and special conditions (if applicable). Administrator Forms Group III-links to several forms

for completion; transmittal, cover, electronic signature, representation and certification documents.

The groups are to be downloaded and reviewed by the appropriate authority. Administrative staff may

prepare, print, and distribute the support documents to staff members with the appropriate expertise.

Make a special note of documents that require signature and must be submitted with an offer. The

documents and offer shall be assembled in the proper order and combined into a single PDF. This will

be accompanied by a second PDF file with the vendor’s rate response information. The University

website provides access to all support documents, opens communication, and facilitates a team

response to a solicitation.


Marketing Group I 2 | P a g e

COPIES OF OFFICIAL DOCUMENTS

Offerors may request an MS Word copy of the RFP documents to include all forms that require a

response and submittal. The University of Alaska Fairbanks, Procurement & Contract Services,

Administrative Policy indicates the following: "This solicitation is provided as an MS Word document in

order to allow offerors the ability to more easily prepare a response to the RFP. The offeror may not

add, delete, or alter any language provided by the University in the solicitation. In the event that there

is any difference between the language contained in the MS Word version of the solicitation and the

Adobe pdf version located on the UAF Procurement website, the language on the website prevails."

PURPOSE OF SOLICITATION

PROJECT: ACEP is seeking a firm-fixed price proposal to drill two temperature gradient holes to 500 feet.

Responders to this RFP should respond with a firm-fixed price.

ANTICIPATED SCHEDULE FOR AWARD Negotiate Contract ..................April 2011 Contract Award (approx.): ......Early May 2011

PROJECTED TIMELINE All work to be performed within the 2011 drilling season ................ Approx. June through Sept 2011

NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM (NAICS) CODE: 237110

NAICS CLASSIFICATION NAME: Water and Sewer Line and Related Structures Construction

In order to qualify as a small business for this solicitation, the business receipts of the concern and its affiliates during the preceding twelve (12) month period must not exceed $33.5 million.

BASIS OF AWARD - SOURCE SELECTION

Award will be made, pending availability of funding, to the responsive, responsible Offeror whose

proposal receives the highest total number of evaluation points as outlined herein.

The University reserves the right to make award to other than the lowest price Offeror without

conducting negotiations. Likewise, the proposal with the top technical ranking may not necessarily

receive the award. Proposals that are unrealistic in terms of program commitments, price, or reflect an

inherent lack of comprehension of the complexity and risks of the proposed contractual requirements

may be rejected.

UAF intends to evaluate proposals and make award without discussions with offerors. However, UAF

reserves the right to conduct discussions if the Procurement Officer later determines them to be

necessary.

Proposals shall be subjected to an evaluation process consisting of a preliminary evaluation of

administrative compliance followed by a technical evaluation of proposal content. The administrative

evaluation will be performed by UAF Procurement & Contract Services. The technical evaluation will be

performed by a committee of qualified UAF personnel.



PERIOD FOR ACCEPTANCE OF PROPOSALS

The proposal shall remain valid for at least ninety (90) days after the submittal deadline for receipt of

proposals except as otherwise specified elsewhere in this solicitation.

CONTRACT KIND AND TYPE

The contract awarded as a result of this solicitation shall be a Firm-fixed Price Non-Personal Services

contract for which the offered rates will include all plant, labor, hardware, software, travel, shipping,

and administrative costs associated with providing the services listed herein.

CONTRACT TERM

Only the services indicated in the RFP will be performed. No additional work is anticipated.

QUESTIONS RECEIVED PRIOR TO THE DEADLINE FOR RECEIPT OF PROPOSALS

All questions must be directed to UAF Procurement and Contract Services (Attn: Terry Rahlfs) per the

instructions on the RFP Cover Page. There are generally two types of questions. One requires directing

the questioner to the specific section of the RFP where the answer may be found. At the option of the

University, response to these questions may be given over the telephone; such questions and answers

are unofficial and in no case may an oral response to a question affect any aspect of this RFP process.

The second type of question involves clarifying or interpreting parts of the RFP or the intent of the RFP.

While the University has no obligation to respond to such questions, this type of question, and any

response, shall be made in writing. Any written responses conveying material information shall be

provided to all recipients of the original solicitation. If any oral responses are given, or claimed to be

given, no person may rely upon them and they will not affect any aspect of this RFP process. Offerors

who seek or receive information regarding this solicitation from any University official other than those

listed above may be declared non-responsive and removed from further consideration for award.

Offerors’ questions and any University answers will become public record. Written questions must be

submitted to UAF Procurement and Contract Services, PO Box 757940, Fairbanks, AK 99775, faxed to

(907) 474-7720 (Attn: Terry Rahlfs), or emailed to [email protected] .

APPROVAL OF CONTRACTOR PERSONNEL

The University reserves the right to approve or reject the use of any personnel used by the Contractor in

the performance of any contract(s) issued as a result of this solicitation without prejudice.

BACKGROUND

UAF Facts - http://www.uaf.edu/uaf/about/facts.html

ACEP (Alaska Center for Energy and Power) - http://www.uaf.edu/acep/

mailto:[email protected]

http://www.uaf.edu/uaf/about/facts.html

http://www.uaf.edu/acep/



PROPRIETARY INFORMATION

Proposals shall clearly indicate any information which is of a proprietary nature. Proprietary information

must be limited to confidential information as defined in Instruction to Offerors (Public Information).

Proposals will become public information after award of this RFP, in accordance with Alaska law. Once

submitted, all proposals become the property of the University.

EVALUATION AND AWARD

GENERAL: All proposals shall be subjected to an evaluation process consisting of a preliminary evaluation

of administrative compliance followed by a secondary, technical evaluation of proposal content. The

administrative evaluation will be performed by UAF Procurement & Contract Services. The technical

evaluation will be performed by a committee of qualified UAF personnel.

ADMINISTRATIVE EVALUATION:

All proposals will be evaluated to determine that they are responsive to the administrative requirements

of the RFP. Proposals will be reviewed based on the following criteria:

The proposal was received on time.

The correct number of files were submitted with all documents in designated order (one file of

the technical proposal and one Rate Response Form submitted as indicated on the Electronic

Signature Page.

The proposal was submitted in the correct format.

All other necessary forms were included.

Proposal forms were properly signed.

All material alterations or erasures, if any, were initialed by signer of the proposal.

UAF must be satisfied that the Offeror has a current business license in the State of Alaska with

licensing and certification(s) to do the business required in this proposal.

This evaluation will be performed by UAF Procurement & Contract Services. Proposals failing to comply

with all administrative requirements may be declared non-responsive and removed from further

consideration.

TECHNICAL EVALUATION

All proposals meeting the administrative requirements of the RFP will be forwarded to the Technical

Evaluation Committee (hereinafter referred to as the “Committee”). Non-price, technical evaluations

shall be completed for each proposal, independently by each individual member of the Committee, with

no initial attempts being made to reach a scoring consensus. The Committee may discuss the details

and features contained in an offer for the purpose of ensuring there is agreement about what is

contained in an offer and/or to clarify parts of an offer which may be unclear.

For ease of comparison, all proposals shall be submitted using the Offeror’s Proposal Worksheet

(Attachment A). Proposals will then be subjected to technical evaluation using the following Criteria



Table (Page 8). The limit of response pages for each criterion is an effort to encourage concise,

pertinent communication and discourage general descriptive literature. Excess pages may be

disregarded and not evaluated.

SCORING METHODOLOGY:

Non-Price: Proposals will be evaluated on non-price criteria as follows. Each member of the

Committee will independently enter a scaled rating (1-10) for each criterion outlined above. The scaled

rating will then be multiplied by the weight to produce a weighted score for each factor. The weighted

scores of all non-price factors will then be summed to provide a total weighted technical score for each

proposal from each evaluator. The aggregate score of each proposal will then be divided by the number

of evaluators to produce an average non-price technical score for each proposal. The highest number of

technical points attainable is 650. If an offer fails to earn an average non-price technical score of 325

points, the offer may be found non-responsive and removed from further consideration for award.

Upon completion of the non-price evaluation, discussions, requests for clarifications, or negotiations

(without divulging competitors’ pricing, or standing) may be conducted with all qualified offerors, or

those offerors who fall into a clear competitive range. Based upon the results of the scoring the

University may seek clarifications from all offerors in the competitive range. The competitive range shall

include all offers receiving both a minimum score of 325 points in the technical evaluation AND, at the

sole discretion of the procurement officer, achieving a technical score high enough to remain under

consideration for award when ranked with other offers received. This is not a strict mathematical

formula and may not be challenged on that basis except in the case of obvious arithmetic errors.

After the establishment of the competitive range the Procurement Officer will ensure that the

opportunity to clarify, confirm, or otherwise respond to questions is provided to all offerors under

consideration for award. This process will be sufficiently formal to ensure equity among offerors, and

will be fully documented. If, during discussions, there is a need for any substantial clarification of, or

change in the RFP, an amendment will be sent to all interested parties. Requests for substantial

clarification, and/or any amendments are valid only if issued in writing by the responsible Procurement

Officer.

General questions shall be directed to all offerors. However, questions which pertain only to a

particular proposal shall be sent only to that offeror. Offerors who fail to respond with the required

information by the deadline stipulated, or who fail to adequately support apparent discrepancies,

imbalances, or disproportionate submittals, may be declared non-responsive.

Upon receipt of clarifications, the Committee may adjust each offeror’s score, if necessary, to reflect any

new information. Should it be necessary, as a result of additional information obtained during this

clarification process to amend the RFP, a written amendment may be issued.

ORAL PRESENTATIONS

During the evaluation process, the Committee may, at its discretion, request that all offerors in the

competitive range make oral presentations. Such presentations will provide offerors with an



opportunity to answer questions the Selection Committee may have regarding their proposal. Not all

offerors may be asked to make oral presentations. UAF reserves the sole right to determine the

number of offerors included in the competitive range.

BEST AND FINAL OFFER

UAF reserves the right to request clarifications and request a best and final offer (BAFO) from each

Offeror within the competitive range. However, UAF reserves the right to make award based exclusively

on the submitted proposals without seeking a BAFO.

PRICE EVALUATION

After the non-price technical evaluation is completed, the sealed Rate Response Forms shall be opened

by the responsible UAF Procurement Officer. Points will be assigned to each offeror’s proposal based on

the prices offered in accordance with the scoring methodology outlined herein. The scores given to

each proposal for price are not subjective in nature; the proposal with the lowest price shall be assigned

the maximum price score and proportional scores will be assigned to the other proposals.

PRICE

Price shall not be disclosed to the members of the evaluation committee until the technical evaluation

process is completed. Points for price will be calculated by the Procurement Officer based upon the

pricing information submitted by each Offeror on the Rate Response Form as follows:

The Alaska Bidders’ Preference shall be applied, where applicable. This project is Federally

funded and the Alaska Bidders’ preference does not apply.

The maximum number of points allowable for price shall be given to the responsive, responsible

proposal with the lowest reasonable price. (For purposes of this RFP, this number is 350.)

Price points for the remaining responsive, responsible proposals shall be calculated as follows:

(a) multiply the lowest priced proposal price by the assigned weight for price. Divide that

number by the price of each higher priced proposal. This produces a mathematically

proportional assignment of price points. See the example below:

(1) Offer A is $35,000, Offer B is $45,000, Offer C is $50,000. Therefore,

(2) Assume Price is given a weight of 35. Offer A receives 350 points.

(3) Offer B’s price points are calculated as follows:

$35,000 x 350 = 272 (rnd) Price points for B

$45,000

(4) Offer C’s price points are calculated as follows:

$35,000 x 350 = 245 (rnd) Price points for C

$50,000

(b) If additional rounds of price competition are required, the steps above are repeated for each

subsequent price submittal.



FINAL SCORE AND AWARD

The Procurement Officer shall reconcile each evaluation form for the proper procedures, consistency,

mathematical extensions, and totals. The Procurement Officer shall then add the Price score to the

committee’s technical evaluation score for each proposal to produce the final score and rank order of

the Offerors. Award may then be made to the Offeror with the highest total score.



Required Criteria Table Weight

Technical Approach: Completeness, Sound Approach, Equipment

Offerings to this project

Limit submittal to __10__ pages

20

Description of the drilling team members proposed to complete this work.

Trade or skill set, number of personnel possessing these skills

Describe crew rotations plan, hours of work and project schedule. Description of equipment, materials and plans for transport, storage and security.

Where will equipment, materials and supplies will be consolidated and port(s) of debarkation.

Contractor’s plan for on-site storage, inspection, and packaging of core samples transport. Description and definition of Life Supporting Services.

List any/all planned subcontractors.

Performance Schedule: Timeline

Limit submittal to __ 3 __ pages

10

Description of plan to accomplish work within the acceptable time period. Detailed drawings of site plans as requested in RFP (separate sheets).

Experience, Skills and Organization

Limit submittal to __ 6 __ pages

35

Provide a list of references and a description of past performance. Past performance should cover a minimum of 3 previous years of experience on similar projects. Include a contact name, address, phone number, and email address for each customer. These customers may be contacted by the University as part of the evaluation of past performance.

Overall experience

Geothermal experience

Regional experience

Cost: to drill and complete two each 500 foot Temperature Gradient

wells, cost to include:

• Mobilization and demobilization.

• Drill, case and cement the two holes.

• Provide crew quarters.

• Provide all core boxes, cuttings and chip bags.

• Provide transportation between living and work site.

• Subcontract for helicopter services.

• Site preparation and remediation.

Limit submittal to __ 1 __ pages submitted as one PDF file

35

TOTAL OF ALL WEIGHTS 100



PROJECT

Pilgrim Springs RFP for Drilling Services

I. Background

The Alaska Center for Energy and Power, (“ACEP”) is engaged in exploration to determine the feasibility of developing energy from geothermal resources located at or near Pilgrim Hot Springs (PHS). Pilgrim Hot Springs is located about 60 road miles north of Nome, Alaska, in the Pilgrim River Valley. It is the intent of ACEP to commence drilling operations in the early summer of 2011, mobilizing approximately mid-June, and pending availability of funds, to complete an exploratory campaign within the 2011 drilling season.

Figure 1: Alaska Map



II. Location

Pilgrim Springs is located on the Seward Peninsula about 60 miles north of Nome, Alaska.

Figure 2: Map of Seward Peninsula

The project site can be reached from Nome by travelling North-Northeast on the Nome-Taylor

Highway, a year-round road maintained by the State of Alaska. At a point 53 miles from Nome,

a side road, which is not maintained by the State, leads to the site of Pilgrim Hot Springs. The

first few miles of the road are in good passable condition and will support truck traffic.



Figure 3: Detail of road into the Pilgrim Hot Springs Site.

The last two miles of road into the site are in poor condition and should be considered passable

only by light 4-wheel drive equipment (pickups or quad utility vehicles) or by tracked vehicles.

Therefore, mobilization to the drilling site shall be by primarily via helicopter (see section on

Mobilization/Demobilization and Transport).

III. Surface Conditions

The thermal springs are located in a northeast oriented, oval area of thawed ground

approximately 1.5 km2 in size, bordered on the north by the Pilgrim River. Continuous

permafrost in the surrounding region is on the order of 100 m thick. A large wooded area in an

otherwise treeless landscape marks the location of the Pilgrim Known Geothermal Resource

Area (KGRA). Two hot springs emerge near the center of the 1 ½ km2oval of thawed ground

along an abandoned meander channel of the Pilgrim river. Six geothermal gradient wells were



drilled during 1979 and 1982. All wells are slightly artesian. Since 1984 it has been possible to

drive to the springs via a 7 mile spur off the “summer only” Nome-Taylor highway. There is also

one runway at the springs that is suitable for small aircraft. If runway use is planned, the

frequency of use has to be noted in the contractor’s proposal.

Two shallow (~35 m) exploratory wells PS1 and PS2 were drilled in 1979; four deeper

exploratory wells numbered PS3, PS4, PS5, and MI1 were drilled in 1982. The objective of

intercepting a feeder to the shallow aquifer proved unsuccessful during this campaign. The

deepest well, PS5 was drilled to ~300 m. Bedrock was not encountered. Well logs based on drill

cuttings show wells were drilled through “sandstones, sands and silt, and clays.” All wells

encountered a shallow ~900 C aquifer, located between 15m and 35 m below the surface. All

1982 wells experienced steep temperature reversals below 35 m. Well PS5 registered the

coolest shallow aquifer temperature (730 C) suggesting it was the furthest from the zone of

upwelling. This well had a temperature of 48 0 C at 272 m below the surface. It has been

proposed that the source temperature of the Pilgrim Springs outflow is > 1500 C.

More information regarding ACEP and Pilgrim Hot Springs may be found at the following website:

http://www.uaf.edu/acep/projects/pilgrim-hot-springs-geoth/

IV. Purpose of RFP:

ACEP is seeking a firm-fixed price proposal to drill two temperature gradient holes to 500 feet.

Offeror’s proposal to this RFP should respond with a firm-fixed price. Please find the well

diagram below.

http://www.uaf.edu/acep/projects/pilgrim-hot-springs-geoth/



2.063" 4.0# J55 T&C

1.657" Drift 0

100

200

300

400

500

PQ (4.827" ID) Hole to 150'

HQ Rod (3.5" OD) Casing Cemented

NQ (2.98") Hole to 500'

2.063" API Grade J55 Tubing Cemented in Place

8-½” Hole to 20'

5.5", 14 pound per foot API Grade J55 Conductor

Alaska Center for Energy and Power

Temperature Gradient Well

Drawn by A. Bailey, GRGI 2/5/2011 – Not To Scale

2" 500 psi 4130 Full Open Locking Ball Valve

Cemented

Annulus

Float

Shoe

Casing

Shoe

Figure 4: Proposed Temperature Gradient Well



V. Drilling Program

The following is a general description of the drilling project at Pilgrim Hot Springs (PHS) prepared by ACEP.

Drilling Program Elements

1. The geothermal exploration holes are planned for 2011. The holes will be

drilled as per the diagram above. If fluid is encountered, either flow tests or

bailing of the wellbore will be conducted and fluid samples taken for

chemistry analyses. During drilling, ACEP may run wireline geothermal

temperature/pressure gauges to record temperature and pressure with

depth. This will not interfere with the daily drilling operation.

2. The drilling contractor will use helicopter-transportable small wireline core

rig and take continuous core throughout the drilling process.

3. Drilling will be through “sandstones, sands and silt, and clays.”

4. Due to permeable strata, a considerable amount of lost circulation is anticipated. Therefore, the Contractor should be equipped with a supply of drilling mud including lost circulation materials (micronized cellulose is recommended).

5. Sites will be supplied with water from already existing geothermal wells by

pumping water from the Pilgrim River or from surrounding sloughs. The

water source will provide a continuous water supply for both drilling

operations and camp needs. Water will either be pumped into a holding tank

on location or used directly. These sources, especially the existing

geothermal wells, are some distance from the proposed TG holes (see maps).

In order to prevent fish impingement in the water to be pumped from the

Pilgrim River and/or sloughs, ACEP requires the contractor to comply with

ADF&G requirements (Alaska Department of Fish and Game).

6. Drilling contractor to construct the drilling cellar and containment ponds

utilizing equipment that can be transported by helicopter.

7. Drilling operations, containment ponds, staging area and camp are to be constructed causing minimal surface disturbance.

http://www.adfg.alaska.gov/



8. The area designated for fuels storage will be prepared with a primary containment barrier, and will be lined with an impenetrable containment material.

9. A portable toilet at the rig site is required. The toilet is the responsibility of

the drilling contractor.

10. A basic camp for drilling contractors’ personnel is one possible lodging option. Such a camp construction and operation will be the responsibility of the drilling contractor. Construction is to include tent cabins or similar modular units mounted on raised wood platforms, portable toilets and portable showers. Cabins near PHS or accommodations in Nome are other alternatives (see detailed description below).

11. All trash, waste materials and contaminates except the used drilling mud will be contained and transported from the site to an approved disposal location. (see - City of Nome Landfill) Drilling mud volume should be minimized and temporary mud sumps surrounded by a wired fence constructed.

12. All wells will be drilled without BOPE equipment except that a stabbing valve for the size of drill rod in use should be on the rig floor to control the well in the event of artesian flows. Fluid temperatures encountered are expected to be less than 1500 C and should be controlled with a mud weight of 8.8 -9.0 ppg. A wellhead diverter will be required to divert annular fluids into the containment pond in case of flow.

13. During the drilling, temperature measurements will be made at a minimum of 100-foot intervals utilizing maximum register thermometers run on wireline.

14. All cased hole intervals will be fully cemented to surface. The contractor will use premium cement with 30% silica flour, and have 100% excess cement available. Cement volumes (without excess) are described in the figure below.

http://www.nomealaska.org/department/index.php?fDD=23-0



Figure 5: Cement volumes – no excess



Drilling Locations

Figure 6: Drilling Locations

TG 1

The above map outlines the proposed drilling area and marks the proposed location for

the TG holes. The final decision on the exact drilling site will be made in consultation

with the drilling contractor. Drilling will not occur in a swamp, wetland or cultural

sensitive area. The goal is to optimize the drilling location using up-to-date research

results, minimizing the overall environmental impact, and still have a suitable drilling

pad and possible camp area.

TG 2

The location of the second TG hole will be determined partially based on results from TG

1 drilling. The decision will be made by the ACEP site technician in consultation with the

drilling contractor.



Drilling Site

Construction of the drilling sites and any camp facilities will be the responsibility of the drilling

contractor. The temperature gradient holes will be drilled from ground level, therefore the

selected drill site should be level and the ground compacted enough to support the drilling

contractor’s drilling rig and supporting equipment.

A small reserve pit (ground sump) will be constructed at each site in order to accommodate

drilling fluid, flow-back and cementing wastage. The reserve pits will be built in a fashion that

will enhance the precipitation of drilled solids. The reserve pits will also be plastic-lined and

surrounded by a barbed wire fence. The reserve pits must be constructed in a manner that will

prevent pollution of the surrounding surface and groundwater, and will include a berm

surrounding the outer edges of the pit. An example of how the reserve pit might be constructed

is outlined in the figures below.

Ground

Level

3 fe

et d

ee

p

Center hump to aid in

settling

Plastic Liner

Outer Berm

Figure 7: Reserve pit in cross section

10 feet wide

15 feet long

Outer Berm

Inner Berm

Figure 8: Reserve pit in plan view



Drilling Operations

Drilling operations will take place ideally during a 3 month interval from mid-June to mid- September 2011. However, this timeframe can be adjusted based on a drilling contractor’s availability. Site accessibility has to be considered by the contractor for other time periods. Cores will be collected, labeled, and boxed on site by the drilling contractor. The drilling contractor will also run maximum reading thermometers on the overshot every 50’ and allow these to stabilize for 15 minutes before pulling them back up to the surface. The geothermal exploration holes will be designed following the profiles presented above. There are at least two suitable staging areas – a BLM borrow pit around mile 5 of the side road

which is accessible by truck, and a large level area at the hot springs location itself which is only

accessible by helicopter, light pickup truck or ATV.

Permits

ACEP is responsible for obtaining all the necessary permits associated with the drilling

operations as outlined in this RFP. This supersedes paragraph No. 25 of the Non-Personal

Services Contract General Provisions. The process of obtaining permits is currently underway.

Finalization of any contract or operating agreement with the drilling contractor will depend on

the status of the permit. No agreement will be entered into prior to receiving all permits or

assurance from the regulatory agencies that permits will be issued.

ACEP has completed the Coastal Project Questionnaire (CPQ) process with the Division of

Coastal and Ocean Management under the Alaska Coastal Management Program (ACMP). This

program determines state and federal permitting requirements for the drilling phase of the

project.

The following permits and regulations apply:

SHPO – Section 106 - Pilgrim Hot Springs was listed on the National Register of Historic Places in 1977. It is considered significant for its association with mining, agriculture, and religious practices. In addition, there are two suspected mass grave sites in the areas surrounding the springs (exact location unknown). The area is considered to be culturally significant. We are closely working with SHPO to comply with Section 106. Bering Straits Native Corporation (BSNC) is providing assistance in fulfilling requirements for the Section 106 process as mandated by the National Historic Preservation Act. Existing buildings and structures around the hot springs will not be influenced by the drilling and the overall impact on the ground will be as small as possible. No historic properties will be adversely affected.



Site Access Permitting - The project site can be reached from Nome by travelling on the Nome-Taylor Highway, a year-round road maintained by the State of Alaska. At a point 53 miles from Nome, a side road leads to the site of Pilgrim Hot Springs. This dirt road is not maintained by the State. The first 5 miles of the road are in good passable condition and support truck traffic. The last two miles of the road into the site are in poor condition which limits the use of the road (no flat-bed trailers, only pickups, quad utility vehicles or tracked vehicles). ACEP has permission from the road owners (MINC & BSNC) to use the road for the purposes of this project. BLM manages 1.5 miles of this dirt road. The BLM field office in Nome has agreed ACEP can use the road for “casual use”. An additional permit (Application for Transportation and Utility Systems and Facilities on Federal Lands) is required if the gravel pit (mile 5 off the dirt road) is to be used as a staging area. As a precaution, ACEP applied for this permit in February 2011. ACEP has license to access the PHS property for the purposes of this research program, including the drilling phase. The property is owned by Unaatuq LLC and is a 320 acre inholding including both surface and subsurface rights, surrounded by property owned by Mary's Igloo Native Corporation (MINC). MINC also holds surface and subsurface rights to their property. ACEP has permission to cross MINC land; however, additional permission will be needed if drilling will take place on their lands. If drilling occurs on MINC land where BSNC holds subsurface rights, additional permission will be needed from BSNC. ACEP does not expect any complications in getting these permits and/or approvals. Drilling Permit - Alaska Oil and Gas Conservation Commission - ACEP expects that the bottom hole temperature of the TG holes not to exceed 93°C, based on prior drilling efforts. Therefore, no permit from AOGCC is necessary; per email confirmation received by the Commission with the following language:

“The Commission understands that the expected bottom hole temperature in your

proposed drilling area is in the range of 85 degrees C to 93 degrees C. Based upon this

expected temperature, the Commission will not assert jurisdiction at this time, and no

Commission permits are necessary for your drilling program. However, should you

encounter temperatures that vary significantly from that expected, please contact the

Commission at that time for further discussion.”

Temporary Water Use Permit – This permit is required prior to drilling operations. ACEP is in contact with DNR, Division of Mining, Land and Water and no complications are expected. ADF&G Permit – The Alaska Division of Fish and Game requires information about exact locations for water withdrawal, a drawing of the screened intake and a description of our methods to prevent fish impingement. We are in contact with the Division of Habitat. ACEP does not expect any complications.



Corps of Engineers Permit – The corps verified that the proposed drilling work is authorized by Nationwide Permit (NWP) No.6, Survey Activities. NWP No.6 and its associated Regional and General Conditions can be accessed at: www.poa.usace.army.mil/reg. TG hole drilling must comply with all terms and conditions associated with NWP No.6.

National Environmental Policy Act (NEPA) - Another Environmental Checklist (EF1) is needed

for the TG hole drilling. ACEP submitted the NEPA EF1 application on Feb 14, 2011. NEPA has

signaled that there is probably no Environmental Assessment (EA) necessary for the TG hole

drilling. ACEP does not expect any complications.

ACEP anticipates no other permitting requirements to support this drilling program and will be responsible for obtaining the permits listed above. If needed, the contractor will supply necessary information to ACEP in a timely manner to complete the permitting process. In addition, the selected contractor is responsible for identifying other permitting needs required due to the drilling contractor’s proposed operational setting. The drilling contractor is responsible for providing this information and will be responsible for obtaining these permits.

Contractor activities must comply with requirements, terms and conditions associated with all permits.

Camp

The camp construction, operation, removal, and cleanup will be the responsibility of the drilling contractor. One option is an on-site arrangement consisting of tent cabins or modular units mounted on raised wood platforms, along with portable toilets. Waste will be contained and transported from the site to an approved disposal location. An alternative to a fully established and equipped camp are rental cabins or hotels in Nome as described below (Lodging Options).

http://www.poa.usace.army.mil/reg



Mud/Refuse Disposal

Since core will be collected from the wellbores, the amount of return material will be minimized. The cuttings will be collected in a pit and after fluid evaporation; the cuttings will be covered over. It will be the Contractor’s responsibility to restore the landscape including the cuttings pit to its natural condition prior to drilling. We request a sample of the cuttings be collected in standard sample bags or envelopes at regular intervals (10ft).

Fluid Disposal

The composition of the fluid will determine its disposal (all activities will comply with federal EPA and/or State DEC regulations). In the case of substantial fluid returns, the standard method of disposal is to dig pits. If the fluids contain substantial sediments, a series of water tanks could be used to settle it out prior to disposal in the pits.

Mobilization/Demobilization and Transport

It will be the Contractor’s responsibility to mobilize and demobilize all equipment described in the RFP. The cost of mobilization/demobilization will be included in the firm-fixed price as submitted to ACEP. Offerors are encouraged to closely review the Section II: Location portion of this document and to familiarize themselves with the severe limitations on transportation to/from Pilgrim Hot Springs. ACEP will make every effort to assist the Contractor in the deployment of crews to Pilgrim Hot Springs. The environmental impact during the TG hole drilling should be kept to a minimum. Drilling rig,

tools, equipment and personnel will need to be transported from the staging area to the drilling

site via helicopter. The successful contractor should not plan on being able to utilize any ground

transportation methods to access the drilling sites.

ACEP is aware of the following helicopter operators in the Nome area:

Bering Air (max. 3 people + pilot)

(907) 443-8980

-> $750/h

-> $250/h stand by

Evergreen (max. 6 people + pilot)

(907) 443-5334 / (907) 257-1500

-> $2,650/h (rotor time)

-> min. 3h

-> + fuel (burns 40 gal/h)



The drilling contractor will be responsible to update prices and check on availability during the

proposed drilling time frame and has to ensure that the maximum operating payloads required

by the contractor can be met by the operator.

Lodging Options

The Contractor will be responsible for all intermediate lodging costs except for ACEP personnel. It is possible to rent three cabins at the Pilgrim River Bridge, about 15 road miles from PHS, from Bering Straits Native Corporation (BSNC). The cabins have beds, cookware, heaters, cookstoves, pots, pans plates, cups, bowls, and utensils. The contractor is responsible for providing food and water for their drilling crew. There are two cabins that sleep 4 and one that sleeps 2 for a total of 10 individuals. The smaller two bed cabin is $150/night, the first 4 bed cabin is $200 per night, and the second 4 bed cabin is $225 per night (this one has an oven, propane fridge, and a storage shed associated with it, the other two have solar powered lights). John Bahnke also has a small cabin for rent. It sleeps two people and is about two miles from the BSNC cabins. BSNC cabins are at mile 60 and John's cabin is at mile 58 so he is two miles closer to the springs if driven on the road.

There are several hotels in Nome. ACEP recommends the Aurora Inn & Suites or the Nome

Nugget Inn. Trucks are available for rent at the Aurora Inn & Suites.

The drilling contractor is responsible for providing meals, transportation to the staging area,

communication and living accommodations for the drilling crew except ACEP personnel.

Transportation for all personnel from the staging area to the drilling site, including the ACEP

site technician, geologist and property owner representative.

The drilling contractor shall be responsible to update lodging prices and check on lodging

availability during the proposed drilling time frame.



Performance Bond

Any contract awarded as a result of this RFP shall require the drilling contractor to post a performance bond in the amount of the contract award.

Payments Payment Schedule for Contractor Drilling Services will be negotiated between drilling contractor and UAF after acceptance of a drilling contract firm-fixed price is agreed upon between drilling contractor and UAF (see Rate Offer Page 30). The payment schedule will become a part of the final drilling contract between contractor and UAF.

VI. Project Approach

Evaluation of offers received will include approach and costs. Points will be awarded to Contractor’s providing an approach which is most likely to produce the required deliverables within the time-frame specified. Contractors are requested to specify: crew size and configuration; drilling equipment – type and numbers; planned solution to equipment failures; scheduled crew rotations; scheduling and logistics; etc. In addition, contractors are requested to provide site and cellar requirements, including detailed drawings.

The Pilgrim Hot Springs equipment staging area will be available to the contractor immediately following award of contract. Contractors will be required to provide a shipping schedule for all equipment, supplies, and materials with anticipated delivery date to Pilgrim Hot Springs. The project approach should include Contractor’s plan for pre-prepping equipment, materials, and supplies prior to shipment, and any post arrival preparatory activities required. Generally the Contractor’s project approach should include the following:

Freight consolidation location and port of debarkation

Contractor’s plan to package loads into

Specifications and number of drill rigs proposed for project

General description of the type and quantity of materials & supplies required to support drilling operations.

Proposed schedule: Mobilization, site preparation, camp setup, drilling operations, demobilization.



Drilling Services

ACEP is seeking turnkey drilling services to perform the work described in Section V, DRILLING PROGRAM. This includes provision mobilization/demobilization of all drilling equipment, materials, supplies, and labor required to drill the geothermal exploration holes as described within a 3 month time frame commencing on the first day of mobilization. Excluding unforeseen geological circumstances beyond the Contractor’s ability to address, the Contractor will be expected to complete all of the drilling activities outlined in Section V. ACEP, in conjunction with the Geotechnical Team may direct the Contractor to abandon a hole and move to the next designated hole, or an alternate location. In either of these circumstances the Contractor will not be held responsible for lost time or adjustment in workload and may require additional compensation. Contractor must provide a standby rig rate to be applied in such an event of unforeseen delays or field operating decisions. Delivery of all materials and supplies to a staging area in Pilgrim Hot Springs or a staging area at

the gravel pit is the responsibility of the Drilling Contractor. Materials and supplies will be pre-

staged at the staging area for transport to the drilling site. All packaging and preparation of

goods for transport to the drilling site loads will be the responsibility of the Drilling Contractor.

Drilling rig, tools, equipment and personnel will be transported from the staging area to the

drilling site via helicopter. Transportation from the staging area to the drilling site for the ACEP

site technician, geologist and property owner representative has to be provided by the

contractor.

On-Site Supervision

ACEP reserves the right to have a representative on-site to serve as an agent on behalf of the

organization to ensure the drilling operation complies with all permitting and legal

requirements, as well as technical requirements, as outlined in this RFP. This person shall

hereafter be referred to as the 'ACEP site technician'.

The Contractor will be required to provide or designate an on-site Rig Manager (Toolpusher) from the commencement of operations through project completion. The Rig Manager will have direct oversight responsibility for all Contractor-provided equipment, materials, supplies, personnel, and subcontractor provided services. The Rig Manager will report directly to the ACEP site technician and will direct day to day operations of the Contractor’s resources.



ACEP site technician

ACEP and corresponding property owners reserve the right to have an observer on site during the drilling work. ACEP will provide a site technician to report drilling progress and communicate drilling progress for the duration of the drilling. ACEP will provide meals, transportation to the staging area, communication and living accommodation for the site technician.

Wellsite Geologist

ACEP will provide an experienced Wellsite Geologist on-site for the duration of drilling operations. The Wellsite Geologist will describe and photograph the core and create a lithologic log (mud log). ACEP will provide meals, transportation to the staging area, communication and living accommodation for the wellsite geologist. Core Samples The contractor will be required to collect, box, and store all core samples on the drilling site. The contractor will coordinate their transport back to the Pilgrim Hot Springs staging area, where ACEP will assume responsibility for further deployment.



Equipment, Materials, Supplies & Crews

It will be the Contractor’s responsibility to assume costs, and logistical support required (including security) to provide and deliver all equipment, materials, and supplies required to complete the specified project scope of work. Proposed conductor casing must conform to API Spec 5T. Proposed wellhead flanges, valves, and fittings must conform either to API 6A or ASME/ANSI B16-9 2009 standards.

Transportation of the contractors drilling crews to Pilgrim Hot Springs and the staging area will be the responsibility of the Drilling Contractor. Transportation of the contractor’s drilling crews, ACEP personnel and a property owner representative to the drilling sites will be the responsibility of the Drilling Contractor.

Drilling Services – Downtime

ACEP recognizes that there are certain unknowns in any drilling operation and that equipment breakdown and other unforeseen circumstances may occur. However, ACEP is seeking an experienced Contractor accustomed to providing these services in remote locations, and is prepared to deal with downtime in an efficient and proactive manner. Short term air transport of parts, materials, and supplies to Pilgrim Hot Springs is not considered to be reliable. Consequently, a Contractor is expected to provide the tools, spare parts, and individual skill sets on site that are required to remedy any unforeseen breakdowns or maladies in an efficient manner.

Site Preparation and Cleanup

The Contractor shall be responsible for preparing drill sites and camp sites. It is anticipated that the Contractor will mobilize an advance team including the Contractor’s Rig Manager (toolpusher) to oversee transfer of equipment, supplies, and materials from the project staging area to the drilling site. The advance team will be responsible for the following:

Site clearing & preparation of site berms

Construction of drilling sites

Preparation of drainage ponds

Camp set up and break down

Disposal of materials



It is anticipated that the advance team would initiate preparatory activities for the second drill site concurrent with mobilization of the drilling team and commencement of drilling operations. As a condition of the Proposer’s offer, the contractor must submit a detailed drawing of the site, reserve pit, and requirements for the proposed rig. The Drilling contractor shall submit as a part of their offer a footprint of the proposed drilling rig along with the ground support requirements of the rig. The ground support requirements should lay out the soil compaction requirements to contain the rig loading.

Water Delivery Systems

Water for drilling operations and other non-potable use will need to be drawn from either existing artesian geothermal wells, the Pilgrim River and/or surrounding sloughs. Contractors should size the system within the permit requirements to ensure adequate water supply for drilling operations and other non-potable camp operations.

Life Support Services

Life support services including temporary lodging, food service, potable water, waste facilities and disposal, emergency medical and other camp equipment and needs are essential to a Contractor’s field operations. ACEP requires each respondent to this RFP to define their own services (subcontracted or otherwise). This will be evaluated as part of Technical Approach (Page 8). Subcontracting is permitted for any contract awarded as a result of this RFP.

Subcontracting If this is to be done, that fact, and the name of the proposed firm(s) must be clearly identified in the proposal. The successful contractor is required to provide, no later than five (5) working days after Notification of Intent to Award, a list of subcontractors the drilling contractor intends to use in the performance of the contract. The list shall include the name and location of the place of business of each subcontractor, the work to be subcontracted to each subcontractor, and evidence of the subcontractor’s valid Alaska business license. Following the award of the Drilling Services contract, no additional subcontracting will be allowed without the express prior written consent of UAF.



ATTACHMENT A: OFFERORS’ PROPOSAL WORKSHEET

11P0018TR Pilgrim Springs RFP Attachment A

ATTACHMENT B: PRELIMINARY LIST OF MATERIALS AND EQUIPMENT

11P0018TR Pilgrim Springs RFP Attachment B

ATTACHMENT C: FUNDING INFORMATION

DOE Renewable Energy Research and Development

11P0018TR%20Pilgrim%20Springs%20RFP%20Attachment%20A.doc

11P0018TR%20Pilgrim%20Springs%20RFP%20Attachment%20B.pdf

https://www.cfda.gov/?s=program&mode=form&tab=step1&id=5bdc365080f390cb33651f39c012751e



RATE OFFER

Offerors must complete this Rate Response Form and submit it, as a separate Adobe PDF file.

Complete all forms and submit with your proposal in the order indicated on the Electronic Signature

Page as a single Adobe PDF file. Do not include rate information in the technical offer or any other part

of your proposal. Offers will consist of two PDF files.

Note: Faxed or telegraphed proposals are not acceptable and shall be rejected as non-responsive.

OFFERS WILL BE RECEIVED IN THE FOLLOWING FORMAT(S):

USB Flash Memory CD or DVD Email

Vendor is instructed to give a fixed-price for turnkey proposal to provide the services outlined herein,

and to use the table below to outline their expectation for payments through this project, identifying

dates and/or milestones for progress payments. UAF intends to negotiate a payment schedule that

meets the needs of the drilling contractor, the funding agency and the University. The payment

schedule will become a part of the final drilling contract between contractor and UAF.

Price Summary of Drilling Project

Date/Milestone Amount

The offeror’s sealed firm-fixed price offer shall contain all

costs to perform the services described in this request for

proposals. The total all-inclusive firm-fixed price offered shall

include all direct and indirect costs, including all out-of-

pocket expenses (e.g., travel, lodging and subsistence).

The University of Alaska is not responsible for expenses

incurred in preparing and submitting the technical proposal

or the sealed dollar price offer. Any such costs shall not be

included in the proposal.

............................... $ .............................

............................... $ .............................

............................... $ .............................

Firm-Fixed Price $ .............................

Standby Rig rate (separate-not included in firm-fixed price) Hourly/Daily rate $ .............................

Vendor

Name: .......................................................................................... email: .........................................................

The rate offered is a firm-fixed price which includes all plant, labor, materials, travel equipment and

transportation to provide the services specified herein. No additional fees, including set-up fees, shall

be charged.

DRILLING SERVI ES AT PILGRIM HOT SPRINGS...DRILLING SERVI ES AT PILGRIM HOT SPRINGS The Alaska enter for Energy and Power, (“AEP”) is engaged in exploration to determine the feasibility

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