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On-Site Solar

Negotiate Final Terms and Award a Contract

Typically, when you select a contractor through the RFP process, the initial contract will be based on other existing contracts and the details outlined in the RFP proposal. The terms may evolve as a result of negotiation or requested additional analysis and information.

Some primary sticking points that often take up the bulk of the negotiations include:

  • Indemnification

    This provision protects one party against damages and costs caused by another party’s mistakes. This a powerful provision so you should consult your risk-management specialist.

  • Non-appropriation

    City contracts may require provisions addressing the rare possibility that future budgets will not appropriate the funds to pay the contract terms. In that case, you may need to negotiate with the other party to include acceptable non-appropriations language. 

  • Early termination

    This clause specifies events that trigger early termination, including early terminations initiated by the installer or vendor, such as if the buyer moves operations, its property is condemned, or it fails to make payments. Termination can also be initiated by the buyer – if the developer exhausts its right to pay project-delay damages, or the system consistently underperforms by a predetermined percentage.

  • Force majeure provision

    A clause that allows the installer or vendor to suspend or terminate energy production due to an event beyond the party’s control (e.g., a natural disaster). When well-drafted, this provision will list items that both parties agree are and are not force majeure events.

Outcome

  • (Optional) RFI and/or RFQ processes implemented
  • RFP process implemented
  • Final proposal accepted and contract executed
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