REQUEST FOR PROPOSAL
UNDERWRITING, INVESTMENT BANKING SERVICES AND/OR SWAP
Long Island Power Authority
333 Earle Ovington Boulevard, Suite 403
Uniondale, New York 11553
January 10, 2012
TABLE OF CONTENTS
I. CALENDAR OF EVENTS ...........................................................................................3
II. CONTACT INFORMATION ........................................................................................3
III. AWARD PERIOD .........................................................................................................5
IV. BACKGROUND ...........................................................................................................5
IV. SCOPE OF SERVICES .......................................................................................................5
A. Senior Managing Underwriters ......................................................................................5
B. Co-Managing Underwriters ...........................................................................................7
VI. GENERAL PROPOSAL REQUIREMENTS ......................................................................7
A. General Information .............................................................................................................8
B. Questions for Senior Managing Underwriters .....................................................................9
VII. EVALUATION AND SELECTION .................................................................................11
A. Evaluation Criteria .......................................................................................................11
B. Selection Process .........................................................................................................12
VIII. PROPOSAL CONDITIONS AND INSTRUCTIONS .....................................................12
A. Cover Letter .................................................................................................................12
B. Limitations ...................................................................................................................12
C. Participation of Minority and Women-Owned Business Enterprises (MWBE) ..........12
D. Administrative Specifications ......................................................................................14
E. Addenda: Errors and Omissions ...................................................................................15
F. Debriefing of Unsuccessful Proposers..........................................................................15
IX. CONTRACT APPROVAL ................................................................................................16
X. ATTACHMENTS ..............................................................................................................17
Attachment A Non-Collusive Bidding Certificate
Attachment B Macbride Fair Employment Principles
Attachment C Contingent Fee Certification
Appendix A LIPA Swap Portfolio
Appendix B LIPA Swap Policy
The Long Island Power Authority (the “Authority”) is soliciting firms through this Request for
Proposal (“RFP”) to provide underwriting and investment banking services and/or swap
counterparty to the Authority and its subsidiary, LIPA, (collectively referred to as “LIPA”) as
described herein. Proposers should display knowledge of the Authority and be experienced in
providing underwriting services to public utilities and New York State issuers. LIPA reserves the
right to select one or more firms in connection with this RFP.
I. CALENDAR OF EVENTS
Issuance of RFP January 10, 2012
Submission of Questions January 19, 2012
Notice of Intent to Propose January 25, 2012
Proposal Due Date February 2, 2012 by 3:00 pm EST
Interviews (if necessary Week of March 5, 2012
Authority Board of Trustees Action March 29, 2012
II. CONTACT INFORMATION
Any questions regarding this RFP should be submitted in writing and faxed to Mr. Stephen
Clark, Executive Director of Finance at (516) 222-9137 on or before January 19, 2012.
Responses to any questions received will be posted on LIPA’s website at www.lipower.org as
they are received. No other communication of questions and answers will be made.
Firms interested in submitting a proposal in response to this RFP should fax a Notice of Intent to
Propose to the attention of Mr. Stephen Clark, Executive Director of Finance at (516) 222-9137
on or before January 25, 2012. Such notice should contain the Proposer’s name, address, phone
number, e-mail address, contact person, and the scope(s) of services that will be proposed.
Submission of a Notice of Intent is not a pre-requisite for submitting a proposal.
Five (5) copies of your proposal and a CD ROM of your proposal in either Microsoft Word or
PDF format are due no later than 3:00 p.m. EST on Thursday, February 2, 2012 in a sealed
package or packages. LIPA will not consider proposals received after this deadline. All
proposals should be delivered to:
Long Island Power Authority
333 Earle Ovington Boulevard, Suite 403
Uniondale, NY 11553
Attention: Stephen Clark, Executive Director of Finance
Proposals received after the Proposal Due Date will not be considered, nor will faxed or e-mailed
proposals, whenever received. Failure to submit a proposal on time will not be waived by the
Authority under any circumstances (e.g., traffic conditions, mail or courier failure, etc.).
The Authority may conduct interviews of those proposers found to be the most qualified to
provide the required services. If interviews are conducted, the Proposers selected for an
interview will be notified in advance of the interview date(s).
OTHER THAN AS PROVIDED FOR IN THIS RFP, ANY CONTACT WITH THE
AUTHORITY BOARD MEMBERS, STAFF OR LIPA CONSULTANTS DURING THE
PENDENCY OF THIS RFP MAY BE GROUNDS FOR DISQUALIFICATION FROM
THE RFP PROCESS.
Pursuant to State Finance Law sections 139-j and 139-k, this RFP includes and imposes certain
restrictions on communications between the Authority and Proposers during the procurement
process. A Proposer is restricted from making contacts (i.e., an oral, written or electronic
communications which a reasonable person would infer as an attempt to influence the award,
denial, or amendment of a contract) from issuance of the RFP through final award and approval
of the resulting Procurement Contract by the Authority and the Office of the State Comptroller
(“restricted period”) to any Authority staff or Trustee (or consultants) other than as designated
herein, unless it is a contact that is included among certain statutory exemptions as set forth in
State Finance Law sections 139-j(3) (a). The Authority’s designated staff for this RFP, as of the
date hereof, is Stephen Clark, Executive Director of Finance, (516) 719-8637; Kenneth Kane,
Controller, (516) 719-9880; Michael Standridge, Director of Corporate Contracts and
Procurement, (516) 719-8620; William Funk, Contract Specialist, (516) 719-9235; Jonathan
Chandler, (516) 719-9274; and from the Authority’s financial advisor, Public Financial
Management (“PFM”), Gene Devlin, (914) 921-2849, Michael Mace, (704) 541-8339 and
Carolyn Bruch, (215) 557-1461.
Please use Michael Standridge as the primary point of contact. Authority staff and Trustees (and
consultants) are also required to obtain certain information when contacted during the restricted
period and make a determination of the responsibility of the Proposer pursuant to statutory
provisions. Certain findings of non-responsibility can result in rejection for contract award, and
in the event of two findings within a four (4) year period, the Proposer is debarred from
obtaining governmental Procurement Contracts. Further information about these requirements
can be found in the Authority’s Guidelines Regarding Procurement Lobbying which is posted on
the Authority’s web site for this RFP.
The Authority will not provide reimbursement for any costs or expenses incurred in connection
with this RFP, including the costs of preparing and submitting a response, providing any
additional information or attending an interview. All material that is submitted in response to
this RFP will become the sole property of the Authority. The Authority expressly reserves the
right to utilize any and all ideas submitted in the proposals received unless covered by legal
patent or proprietary rights which must be clearly noted in the proposal submitted in response to
the RFP. See also RFP Section VI.
III. AWARD PERIOD
The underwriting appointments made pursuant to this RFP will be effective for a period of up to
five (5) years from the date of award. The Authority reserves the right to re-procure these
services through a competitive solicitation at any time. Performance of the underwriting team
will be reviewed on an ongoing basis and any member firm of the underwriting team may be
eliminated at any time by the Authority. The Authority reserves the right to change the
underwriting team at its sole discretion.
The underwriting team will be divided into at least two separate groups: senior and co-managing
The Authority is a corporate municipal instrumentality and a political subdivision of the State of
New York and was created by State legislation enacted in 1986, referred to as the "Long Island
Power Authority Act" or "LIPA Act" (Public Authorities Law, Sections 1020 et seq.). The
Authority was established to achieve the shutdown and decommissioning of the Shoreham
Nuclear Power Plant (“Shoreham”) and to lower electric rates on Long Island. The shutdown
and decommissioning of Shoreham was completed in 1995.
In 1998, the Authority acquired all of the outstanding stock of the Long Island Lighting
Company (“LILCO”), which then became a wholly owned subsidiary of the Authority. The
Authority, through its subsidiary, LIPA, provides electric service to approximately one million
customers in its service area, comprising the counties of Nassau and Suffolk and a portion of
Queens County known as the Rockaways.
The Authority has $6.8 billion in electric system general revenue bonds outstanding ($5.8 billion
senior lien bonds and $1.0 billion subordinate bonds), and anticipates financing needs of
approximately $150 to 200 million per year going forward.
Copies of the Authority’s Audited Financial Statements, the Annual Information Statement with
respect to the Authority’s Continuing Disclosure Agreements and the Authority’s Operating and
Capital Budgets for Fiscal Year can be obtained from the Authority’s website
V. SCOPE OF SERVICES
A. Senior Managing Underwriters
The Senior Managing Underwriters shall perform the following services, as directed by the
Authority and its advisors:
1) Propose structures for specific debt issuances and alternatives to reduce overall debt
2) Prepare cash flows for proposed alternative structures;
3) Prepare, maintain and update financing schedules and calendar of events;
4) Prepare pricing memos discussing marketing conditions (including comparables) and
preliminary pricing scales, syndicate rules, syndicate price views and marketing
5) Manage the underwriting process;
6) Assist in the drafting and review of relevant documents such as official statements,
7) Assist in meeting with and developing credit structures and long-term strategies for
presentation to the rating agencies and credit enhancers;
8) Identify financing opportunities available to the Authority and assist the Authority and its
Financial Advisor in developing the optimal plan of finance for the funding and
refunding of the Authority’s capital program, creating financial models as needed to
support this effort;
9) Assist in developing and managing an investor relations program; identify the market and
potential investors that are most likely to purchase any and all securities offered at rates
most favorable to the Authority;
10) Conduct bond sale conference calls and coordinate information with the syndicate group;
11) Assess market conditions and investor demand and their impact on the economics and/or
optimal timing of any financing;
12) Market and distribute bonds;
13) Commit substantial capital as required in underwriting the Authority’s bonds;
14) Provide post-closing analysis of debt issuances including pricing, orders, allotments,
15) Provide secondary market support for the Authority’s bonds;
16) Identify derivative product transactions that would improve the Authority’s financial
position and execute these transactions;
17) Undertake certain market-related analysis of various financial products as may be
requested by the Authority;
18) Identify gas and/or purchased power prepayment opportunities that would benefit the
Authority and execute these opportunities;
19) Coordinate information meetings with institutional investors, credit analysts, financial
advisors and other public presentations as requested by the Authority;
20) Participate in discussions with the Authority and its advisors upon the occurrence of
unexpected events, such as the dislocation in the auction rate market and the downgrades
of the monoline insurance companies, regarding the effect on the Authority’s bonds, and
assist the Authority in developing strategies and tactical response; and
21) Provide such other underwriting and investment banking services as requested from time
to time by the Authority and its advisors.
B. Co-Managing Underwriters
The Co-Managing Underwriters shall perform the following services in coordination with the
Senior Managing Underwriters:
1) Assist in marketing and distribution of bonds;
2) Commit capital as required in underwriting Authority bonds;
3) Provide support for the bonds in the secondary market; and
4) Provide such other underwriting and investment banking services as requested from time
to time by the Authority and its advisors.
In addition, the scope of services of this RFP shall include all services provided by investment
banking firms, including, but not limited to remarketing agent services, commercial paper dealer
services, and swap counterparty. The Authority may also designate other categories of its
underwriters pool, including a special co-managing underwriter or selling group designation.
VI. GENERAL PROPOSAL REQUIREMENTS
Following is a listing of the information to be provided by the Proposer. Firms should respond
to serve as either senior or co-managing underwriter. Also, please indicate if your firm wishes
to participate as a potential swap counterparty. Firms responding for the senior manager
position will be assumed also to be proposing for the co-manager position. Firms that wish to
apply only for a co-manager position should not respond to Questions 12 through 20. Firms
that wish to be considered for a swap counterparty should also respond to Question 16. A
proposal that does not include all the information required below shall be deemed non-
responsive and subject to rejection.
In setting forth its qualifications, each Proposer should provide, in concise but adequate detail,
the information requested below in the same order using corresponding numbers as presented.
Proposers shall indicate in their proposals what information, if any, is proprietary and
confidential. Proposers are hereby advised that the Authority is subject to the New York State
Freedom of Information Law (“FOIL”). Material marked “Confidential and Proprietary” will be
treated as such to the extent consistent with the obligations under FOIL, other applicable law,
regulation or legal process, and will not be disclosed by the Authority except as necessary for the
evaluation of proposals.
A. General Information
1) Provide the name, title, address, e-mail address, telephone number and fax number of the
individual the Authority should contact with respect to your proposal.
2) Provide a brief description of your firm and its ownership structure. Discuss your firm’s
public finance and municipal sales, trading and underwriting departments and your firm’s
continuing commitments to these areas. Explain any significant changes in staffing
and/or organization of your firm’s public finance trading and underwriting departments,
especially public power and municipal sales, since January 1, 2009.
3) Please discuss your firm’s financial condition, including current credit ratings (and any
significant ratings actions in the last three years). Describe your firm’s total and excess
net capital position as of the close of your firm’s most recent quarter. How much
uncommitted excess net capital is allocated to public finance?
4) Discuss any past or present civil or criminal legal investigations, pertinent litigation
and/or regulatory action involving your firm or its employees which could impact your
role or ability to serve as senior managing or co-managing underwriter or swap
counterparty to the Authority.
5) Describe the team that will be assigned to the Authority’s account from your firm and its
relevant experience. Provide a description of the role that each individual will have on
the transaction. Provide resumes for these individuals in an appendix to your response
(this appendix will not count against the applicable page limits).
6) Provide a summary of your firm’s experience over the last three (3) years as a senior
managing or co-managing underwriter for each of the following:
(a) negotiated public power financings
(b) negotiated New York State financings
(Please do not include Securities Data runs in your response.) For each category, discuss
one financing that is most relevant to this RFP and the position your firm seeks, e.g.,
senior managing underwriter or co-managing underwriter.
7) Discuss the differentiating contributions that your firm will make to the distribution of
the Authority’s debt in both the primary and secondary markets (a senior managing or co-
managing underwriter, depending on the position your firm seeks). State your Firm’s
trading volume in LIPA’s bonds (broken down between retail and institutional for the last
8) Based on your current understanding and knowledge of the Authority’s credit profile
please indicate if your Firm would be willing and able to offer at least $100 million of
credit and/or liquidity facility to support the Authority’s variable-rate debt programs
(please include amounts already provided to the Authority under existing programs). The
Authority understands that your ability to provide a credit facility will be subject to due
diligence and your final credit approval. The Authority does not plan to provide further
credit information as part of this RFP process. Please list the amount of all credit
(including debt and non-debt related) you have provided to the Authority in the past
along with the purpose the credit was provided.
9) In prior years, the Authority’s underwriters have at times underwritten large unsold
balances to support Authority bond pricings. In recent years, there appears to be more
limited willingness among underwriters to take on meaningful balances of unsold bonds
in a manner that provides price support at the time of underwriting. Please comment on
whether you have seen the same trend among underwriters, and if so, discuss the reasons
for this change. Also, provide a description of your current ability to underwrite new
issue bonds, and examples in which this capability has provided quantifiable economic
benefit to issuers similar to the Authority.
10) Describe your firm’s presence both in New York State, and on Long Island. Detail
activities and /or services your firm has engaged in which notably contributed to the
growth of the economy in New York State and on Long Island.
11) The Authority is committed to diversity and equal employment opportunities among its
contractors, including underwriters. Describe your firm’s affirmative action program and
related activities. Provide the results of that program. Include a copy of your firm’s
affirmative action plan as an appendix to the RFP (this appendix will not count against
the applicable page limits) entitled “Affirmative Action Policies”. Please provide the
total number of employees in your public finance department and include the numbers
and percentages of minorities and women employed as officers, associates and
paraprofessionals. Please provide this same information with respect to the personnel
covering the Authority’s account. If your firm is a MWBE firm, please indicate so and
provide appropriate documentation (see section VIII C).
B. Questions for Senior Managing Underwriters
12) The Authority has expressed a desire to reduce its total outstanding debt by 20%. Please
provide a proposed plan(s), in reasonable detail, to achieve this goal, including setting out
a reasonable timetable for achieving this goal. Also, please provide your views on the
ability to achieve such a goal and the challenges, if any, to achieving this goal. Also,
please provide, your thoughts on how the Authority can reduce its debt over the next five
(5) and ten (10) year periods. Include specific, actionable steps required to achieve those
reductions. Please include the value-added contributions your firm will make in assisting
the Authority achieve these objectives. Please consider the Authority’s five-year (2012-
2016) plan, including planned capital expenditures, included in the Authority’s adopted
2012 budget, which can be found on the Authority’s website (see schedules C-1 and C-2),
including the Authority’s capital expenditures and new money needs.
13) Provide your thoughts regarding the Authority’s outstanding variable-rate program,
including its related interest rate swaps, and how the Authority can best mitigate the risks
surrounding these programs. Also please provide what you believe is an appropriate level
of basis and tax risk.
14) Provide your firm’s thoughts regarding the Authority’s ongoing investor-relations
program including: (1) The use of internet road-shows, one-on-one or group investor
meetings; (2) The potential effectiveness of a retail order period; and (3) Your firm’s
approach to positioning the Authority’s credit in light of the current legislative and other
challenges facing the Authority.
15) The Authority is currently rated A (stable) from Fitch, A- (stable) from Standard &
Poor’s and A3 (with a negative outlook) from Moody’s. Discuss your proposed strategy
for the Authority to implement in order to eliminate Moody’s negative outlook, in the
short term, as well as your long term strategy to improve the Authority’s credit ratings
over the next three years. Please provide specific, actionable steps required of the
16) Discuss any opportunities that you have identified for the Authority related to derivative
products, and indicate your firm’s experience with structuring and implementing these
specific products. Please also indicate if your firm would be serving as principal or agent
in administering these products; also provide the counterparty’s credit ratings. Provide
any recommendations regarding the Authority’s existing swap portfolio (see Appendix
17) Please detail your firm’s experience in renewable energy transactions and those
transactions which take advantage of ARRA tax and financial incentives for renewable
18) Discuss any other recommendations that you have to enhance the Authority’s financing
and debt management programs. With any recommendations provided here or elsewhere
in this RFP, please include a discussion on the impact on LIPA’s net income, customer
rates and the Authority’s bond ratings.
19) Discuss your firm’s contributions in assisting the Authority during the past five (5) years
including underwriting and sale of the Authority’s new issue bonds, secondary market
support of the Authority’s debt, remarketing of the Authority’s floating rate debt,
derivative product ideas and transactions, and any other proposal, ideas, analyses or work
you have provided to the Authority.
20) Provide your proposed takedowns by maturity for a 1 to 30 year range for tax-exempt
bonds and taxable bonds. Please indicate clearly where takedowns differ for retail vs.
institutional. Also indicate whether these takedowns are contingent upon any minimum
designation percentages. Please provide a detailed indication of underwriter’s expenses.
VII. EVALUATION AND SELECTION
A. Evaluation Criteria
A selection committee consisting of staff from the Authority and PFM, financial advisor to the
Authority, will evaluate all proposals. This selection committee will make its recommendation
to the Authority’s Board for final approval. The selection committee will evaluate proposals
based on the following factors, not necessarily in order of importance:
1) Demonstrated record of the firm’s experience serving as underwriter to large issuers of
municipal bonds, including the Authority, other public power and municipal utilities and
New York State credits, including the firm’s experience in underwriting both tax-exempt
and taxable municipal bonds in both the long-term and short-term markets.
2) Quality of banking, underwriting, and derivative product services provided to LIPA and
to other major municipal clients (including both New York issuers and public power
issuers), including the firm’s distributions capabilities, both institutional and retail.
3) Demonstrated understanding of the Authority’s operations, objectives, capital program,
credit and debt structure, both from an historical and forward-looking perspective.
4) Overall knowledge and experience of the firm, including experience within the public
power industry and with other public power issuers and within New York State and with
other New York State issuers.
5) The qualifications, experience and availability of the lead person(s) and any other
individuals assigned to this agreement.
6) Firm’s financial strength (including credit ratings), capital position, ability and
willingness to underwrite bonds, and demonstrated ability and willingness to extend
credit to the Authority.
7) Firm’s overall diversity and commitment to equal opportunity programs, including status
as a certified MWBE.
8) Overall completeness, clarity, and quality of the proposal, as well as creativity of ideas
and responsiveness to the RFP.
9) Interviews, if performed.
The Authority will negotiate fees with the firms selected through this RFP on a transaction-by-
transaction basis, based on the level and quality of services provided. Accordingly, cost will not
be a factor in the evaluation.
B. Selection Process
The Selection Committee will initially review all proposals to determine responsiveness. Any
proposal that does not address all requested requirements or is incomplete will be rejected.
The Selection Committee will evaluate all responsive and responsible proposals based on the
criteria enumerated in Section VII. (A), as referenced above, and may afford firms the
opportunity to clarify the contents of their proposal for the purpose of assuring a full
understanding of their response to the RFP.
The Authority may conduct interviews of those proposers found to be the most qualified to
provide the services. If interviews are conducted, the Proposers selected for an interview will be
notified in advance of the interview dates.
All Proposers will be notified in writing once Proposer(s) have been selected. The selection of
Senior Managing and Co-Managing Underwriters is scheduled to be made in the first half of
Prior to selection, the Selection Committee will conduct a vendor responsibility determination
and may require eligible Proposers to answer questions and provide additional information to
supplement the information provided in the attached Vendor Responsibility Questionnaire to
assist the Selection Committee in making such a determination.
VIII. PROPOSAL CONDITIONS AND INSTRUCTIONS
A. Cover Letter
A cover letter addressed to Mr. Stephen Clark, Executive Director of Finance, which shall be
considered an integral part of the proposal, shall be bound with the proposal and signed by the
individual(s) authorized to bind the Proposer contractually. In signing the cover letter, the
Proposer agrees to be bound by the terms of this RFP and its submission hereunder. The cover
letter shall contain the following:
a. The information requested in Section VI.A.1). A statement that the Proposer’s work for
the Authority will not create any conflict of interest. If your firm believes that a conflict
of interest may arise, the nature of the conflict should be described.
b. A description of any financial or joint marketing arrangements your firm may have
(describe any direct or indirect consulting arrangements your firm has, or has had, that
could pertain to the Authority).
c. A statement on whether your firm is interested in being considered for a senior managing
or co-managing underwriter position.
1. This RFP does not commit the Authority to award a contract, pay any costs associated with the
preparation of a proposal, or procure or contract for services of any kind whatsoever. The
Authority reserves the right to accept or reject any or all responses as a result of this RFP in
whole or in part, to cancel this RFP in whole or in part, and to negotiate with any and all
considered communications firms. The Authority reserves the right to request additional
information from any or all Proposers.
2. Proposers may be requested by the Authority to clarify the contents of their proposal. Other
than to provide such information as may be required by the Authority, no Proposer will be
allowed to alter its proposal or add new information after the Proposal Due Date.
3. A proposer may be required to participate in negotiations and to submit any price, technical or
other revisions to its proposal which may result from such negotiations.
C. Participation of Minority and Women-Owned Business Enterprises (MWBE)
The Authority is committed to diversity and equal employment opportunities among its
contractors, including underwriters, investment banks and swap counterparties. The Authority
encourages all firms, including firms that are MWBE certified, to submit proposals in response
to this RFP.
The Authority is committed to making a good faith effort to achieve MWBE participation in
each negotiated underwriting. In a negotiated sale, the Authority has better control on the
amount of participation of such firms, and will use its best efforts so that qualified MWBE firms
are included in the selected underwriting syndicate.
Please note that all certified MWBE firms submitting proposals to this RFP, should be registered
as such with the New York State Department of Economic Development. For firms that are not
certified but have applied for certification, please provide evidence of filing, including filing
D. Administrative Specifications
1) All proposals must be firm for ninety (90) days and signed by an authorized officer of the
2) All Proposers must fully execute the following forms and submit with its proposal:
a. MacBride Fair Employment Principles;
b. Non-Collusive Bidding Certification, Contractor Disclosure of Prior Non-
Responsibility Determinations (posted on RFP web site);
c. Contingent Fee Certification;
d. New York State Vendor Responsibility Questionnaire (posted on RFP web site);
e. Diversity Questionnaire (posted on RFP web site), upon the submission of
3) Proposals shall respond to all requirements identified in Section VI. and shall be
organized in the same order as the requirements are posed.
4) Proposals to serve as senior managing underwriter shall not exceed twenty-five (25)
single-sided pages (including cover letter), and proposals to serve as co-managing
underwriter shall not exceed ten (10) single-sided pages (including cover letter).
Proposals must be prepared on 8-1/2 x 11-inch paper using at least 10-point type with
5) Only resumes, the Proposer's affirmative action policy, the NYS Vendor Responsibility
Questionnaire, the Diversity Questionnaire and the forms required above may be included
in the appendix to the proposal. Proposers wishing to provide additional information not
covered in the proposal requirements may submit such information as an additional
appendix, which is to be bound separately from the RFP response. The Authority
reserves the right to take such additional information into account in considering the
proposal, or not, at its sole discretion.
6) Should the Authority be unsuccessful in negotiating a contract with the selected
Proposer(s) within an acceptable time frame, the Authority reserves the right to begin
contract negotiations with another respondent to the proposal in order to serve and realize
the interests of the Authority.
7) All Proposers are obligated to update any changes in their proposal prior to the proposal
8) Non-responsive proposals include, but are not limited to, those that:
(a) are irregular or not in conformance with the RFP requirements and instructions;
(b) are conditional; or
(c) are not submitted on time or are submitted at any time via facsimile or e-mail.
The Authority may waive minor informalities or irregularities in a proposal that are merely a
matter of form and not substance and the correction of which would not be prejudicial to other
proposals. Failure to submit a proposal on time will not be waived by the Authority under
any circumstances (e.g., traffic conditions, mail or courier failure, etc.)
E. Addenda: Errors and Omissions
If a Proposer discovers any ambiguity, conflict, discrepancy, omission or other error in this RFP,
immediately notify Michael Standridge, in writing, of such error and request written clarification
or modification to the document.
Should the Authority find it necessary, modification to the RFP will be made by written addenda
to the RFP. Such modifications shall be posted to the Authority’s website.
If a Proposer fails to notify the Authority of a known error or an error that reasonably should
have been known prior to the final filing date for submission, the Proposer shall assume the risk.
If awarded the contract, the Proposer(s) shall not be entitled to additional compensation or time
by reason of the error or its late correction.
F. Debriefing of Unsuccessful Proposers
Upon written request to Michael Standridge, an unsuccessful proposer may request a debriefing
with Authority Staff. Debriefings will be scheduled after the Authority has provided notice of its
selection of one or more successful Proposer(s).
Discussions during any such debriefing will be limited to an analysis of the proposal submitted
to the Authority by the Proposer that requests the debriefing. Comparisons between proposals or
evaluations of the other proposals will not be discussed. Debriefings may be conducted in
person or on the telephone, at LIPA’s discretion.
The Authority’s selection of the successful Proposer(s) shall not be binding until it has been
approved by the Authority's Board of Trustees. In addition, any contracts issued pursuant to this
RFP, to the extent required, shall not be valid, effective or binding until approved by the New
York Office of State Comptroller and filed in his office, in accordance with Section 112 of the
New York State Finance Law. No payment for services rendered can be made under the contract
until such approval is obtained.
SECTION II – ATTACHMENTS
Non-Collusive Bidding Certification
Required by Section 139-D of the State Finance Law
By submission of this bid, bidder and each person signing on behalf of bidder certifies, and in the case of
joint bid, each party thereto certifies as to its own organization, under penalty of perjury, that to the best
of his/her knowledge and belief:
 The prices of this bid have been arrived at independently, without collusion, consultation,
communication, or agreement, for the purposes of restricting competition, as to any matter relating to
such prices with any other Bidder or with any competitor;
 Unless otherwise required by law, the prices which have been quoted in this bid have not been
knowingly disclosed by the Bidder and will not knowingly be disclosed by the Bidder prior to opening,
directly or indirectly, to any other Bidder or to any competitor; and
 No attempt has been made or will be made by the Bidder to induce any other person, partnership
or corporation to submit or not to submit a bid for the purpose of restricting competition.
A BID SHALL NOT BE CONSIDERED FOR AWARD NOR SHALL ANY AWARD BE
MADE WHERE , ,  ABOVE HAVE NOT BEEN COMPLIED WITH; PROVIDED
HOWEVER, THAT IF IN ANY CASE THE BIDDER(S) CANNOT MAKE THE FORGOING
CERTIFICATION, THE BIDDER SHALL SO STATE AND SHALL FURNISH BELOW A
SIGNED STATEMENT WHICH SETS FORTH IN DETAIL THE REASONS THEREFORE:
[AFFIX ADDENDUM TO THIS PAGE IF SPACE IS REQUIRED FOR STATEMENT.]
Subscribed to under penalty of perjury under the laws of the State of New York, this
_________ day of _____________________________, 20 as the act
and deed of said corporation of partnership.
IF BIDDER(S) (ARE) A PARTNERSHIP, COMPLETE THE FOLLOWING:
NAMES OF PARTNERS OR PRINCIPALS LEGAL RESIDENCE
IF BIDDER(S) (ARE) A CORPORATION, COMPLETE THE FOLLOWING:
NAMES LEGAL RESIDENCE
Potential Contractor: ___________________________________________________
Street Address: ________________________________________________________
City, Town, etc. ________________________________________________________
Telephone: ____________________ Title: ______________________________________
If applicable, Responsible Corporate Officer Name
Joint or combined bids by companies or firms must be certified on behalf of each participant:
Legal name of person, firm or corporation Legal name of person, firm or corporation
By _____________________________________ By ______________________________
… (Name) … (Name)
Street Address Street Address
City and State City and State
NONDISCRIMINATION IN EMPLOYMENT IN NORTHERN IRELAND:
MACBRIDE FAIR EMPLOYMENT PRINCIPLES
In accordance with section 165 of the State Finance Law, the bidder, by submission of this bid
certifies that it or any individual or legal entity in which the bidder holds a 10% or greater
ownership interest, or any individual or legal entity that holds a 10% or greater ownership in the
bidder, either: (answer yes or no to one or both of the following, as applicable),
(1) has business operations in Northern Ireland;
Yes___ or No___
(2) shall take lawful steps in good faith to conduct any business operations that it has in Northern
Ireland in accordance with the MacBride Fair Employment Principles relating to
nondiscrimination in employment and freedom of workplace opportunity regarding such
operations in Northern Ireland, and shall permit independent monitoring of their compliance with
Yes___ or No___
CONTINGENT FEE CERTIFICATION
In accordance with section F.2 of Article II of the Long Island Power Authority “Guidelines
Regarding the Use, Awarding, Monitoring and Reporting of Procurement Contracts” (the
“Guidelines”), Proposer, by submission of this proposal certifies the following with respect to
the payment of contingent fees:
(1) Proposer has not employed or retained and will not employ or retain any individual or
entity for the purpose of soliciting or securing any Long Island Power Authority contract
or any amendment or modification thereto pursuant to any agreement or understanding
for receipt of any form of compensation which in whole or in part is contingent or
dependent upon the award of any such contract or any amendment or modification
(2) Proposer will not seek or be paid an additional fee that is contingent or dependent upon
the completion of a transaction by the Long Island Power Authority.
FAILURE TO PROVIDE THIS CERTIFICATION WILL BE GROUNDS FOR
DISQUALIFICATION IN THE PROCUREMENT PROCESS.
VIOLATION OF EITHER (1) OR (2) OF THIS CERTIFICATION SHALL RESULT IN:
(i) disqualification of Proposer from the procurement process; and
(ii) prohibition of the Proposer from being awarded any contract for a period of
three years from the commencement of the procurement process.
Certified as of the ______ day of _____________, 20__.
Name of person, firm or corporation
(Name and Title)
LIPA Swap Portfolio
Notional Underlying LIPA Maturity Fixed Rate /
Counterparty Trade Date Bonds Date Index Ratio
BMA Synthetic Fixed Lehman 4.208% /
11/4/1998 $150.000mm Series 2A, 3A 4/1/2025
(Tax Trigger) Brothers BMA
BMA Synthetic Fixed Societe 4.208% /
11/4/1998 $100.000mm Series 3B 4/1/2025
(Tax Trigger) Generale BMA
LIBOR Synthetic Fixed
UBS 9/25/2002 $587.225mm Series 2003D-O, 1A, 2B 12/1/2029 69.47% of
Bear Stearns $251.045mm 70.5% of
BMA to LIBOR Basis
Citigroup 6/28/2004 $251.045mm Various 8/15/2033 LIBOR /
Merrill Lynch $502.090mm BMA
CPI Index Swap Morgan Stanley 6/15/2006 $110.715mm Series 2006D 8/15/2015
Total: $1,952,120 mm
Long Island Power Authority
Guidelines for the Use of
Interest Rate Exchange Agreements
Form of Agreements
Interest Rate Exchange Agreements (the “Agreement” or “Agreements”) between the Long
Island Power Authority (the “Authority”) and the counterparty may include those payment, term,
security (including provisions for collateral by the counterparty), default, remedy, termination,
and other terms and conditions, and may be with those parties, as the Authority deems
reasonably necessary or desirable, and to which the Authority and the counterparty may mutually
agree. As used herein Interest Rate Exchange Agreement means, as the context permits or
requires, any or all of the following: rate swap transaction (either variable to fixed or fixed to
variable), basis swap, forward rate transaction, float transaction, collar transaction, or any other
similar transactions (including any option with respect to any of these transactions). Such
Agreements shall be entered into by the Authority only to the extent they meet the criteria listed
below, provided that failure by the Authority to comply with, or a violation of, the provisions of
these guidelines shall not be deemed to alter, affect the validity of, modify the terms of, or impair
any contract or Agreement.
Interest Rate Exposure
The Authority may enter into an Agreement if the Chairman or Chief Financial Officer shall
have determined that such Agreement is reasonably expected to:
A. Reduce its exposure to changes in interest rates on a particular financial transaction, or
in the context of the management of interest rate risk derived from the
asset/liability balance; or
B. Result in a lower net cost of borrowing with respect to the related obligations; or
C. Reduce the financial exposure of the Authority with respect to its current financial
The Authority is prohibited from entering into an Agreement unless the Chairman or Chief
Financial Officer shall have determined that such Agreement can be reasonably expected to
achieve at least one of the objectives listed above.
The Authority is forbidden to enter into such Agreement for speculative purposes.
Term of Payment Agreement
Subject to limitations imposed pursuant to agreements with bondholders, the term of any
Agreement cannot exceed the lesser of the final maturity of then outstanding obligations of the
Authority or the term of any approved financial plan of the Authority.
Credit Rating of Counterparties; Diversification
Unless the obligations of the counterparty under the Agreement is required to be collateralized in
accordance with the following section, the Authority’s counterparty shall have credit ratings
from at least two nationally recognized statistical rating agencies that are within the three highest
grade categories, or the payment obligations of the counterparty shall be unconditionally
guaranteed by an entity with such credit ratings.
Except as the Trustees shall have expressly approved, the Authority will not enter into
Agreements having a term greater than one year with any single counterparty in an aggregate
notional amount greater than $250,000,000.
The mark-to-market value of the swap will not require collateralization unless the counterparty is
downgraded by two nationally recognized ratings agencies below the three highest grade
categories. Any such collateral shall consist of direct obligation of, or obligations which are
guaranteed by, the United States of America with a market value of at least equal to 102 percent
of the market value of the swap.
Selection of Counterparties
The Authority will pre-approve counterparties pursuant to a Request for Qualifications. The
evaluation of such counterparties will include the following criteria.
A. The counterparty should have substantial and significant experience in the swap
B. The counterparty should be a significant player in the municipal bond market;
C. The counterparty should run a two-way book that facilitates hedging; and
D. The counterparty must exhibit the capability to develop creative and innovative ideas.
The Authority staff may negotiate an Agreement with a Counterparty meeting the requirements
of these Guidelines if in the determination of Authority staff the interests of the Authority could
be achieved without competitively bidding such Agreement. Authority staff shall consider,
among other things, the then existing market for the type of Agreement expected to be entered
into, the availability of Counterparties for the type of Agreement expected to be entered into, the
size of the Agreement, and the costs and expenses associated with a negotiated versus
competitive undertaking. In the event that the Agreement is to be negotiated, Authority staff
shall retain the services of an independent, knowledgeable, individual/firm to certify as to the
fairness of the pricing of the Agreement.
In the event it is determined that the Agreement will be competitively bid, the Authority staff
reserves the right to limit the (a) number of qualified Counterparties that may participate in a
single Agreement bid and (b) notional amount of Agreements with any Counterparty, either for
any individual Agreement or in the aggregate.
Authority staff shall, based upon the relevant circumstances, select the prospective
Counterparties to be solicited and shall circulate a schedule setting forth the time for, and manner
of, accepting bids.
Following the acceptance of bids, the Authority staff shall determine the winning bidder(s) based
upon the most advantageous terms to the Authority, taking into consideration not only the rate(s)
bid, but also other terms and conditions, including, without limitation, the amount of the upfront
payment, if any, and the effect of indemnification, tax risk, and other similar terms.
The Authority may, prior to the solicitation of bids, select a prospective Counterparty to assist it
in the preparation of documents relating to the solicitation of bids, and may give such
Counterparty the opportunity to match the lowest winning bid on no more than 50% of the
notional amount of such Agreement.
The staff will report to the Finance Committee quarterly with respect to:
1. Interest payments received or paid;
2. Accrued interest payable or receivable on the swap;
3. Swap strategies and management techniques;
4. The current status of interest rate exposure of the Authority, net of the effects of such
5. The status of individual Agreements in effect, including notional amount, rates, terms,
bases employed and the rating of counterparties;
6. The marked-to-market evaluations of net credit exposures to the Authority by
individual counterparties, and collateralization that has been provided, when deemed
7. The summ t onditions of any Agreem
mary of the terms and co f a
ment that has been executed
since the previous rep
The Fina ttee iodically rep to the Bo
ance Commit will peri port oard.