Exhibit 10.12
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TITLE
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250 kW Hydrogen-fuelled Generator Set for Wind Energy Integration
PRIORITY OF DOCUMENTS
The documents listed below form part of and are incorporated into the Contract.
If there is any discrepancy between the wording of one document and the wording
of any other document which appears on the list, the wording of the document
which first appears on the list shall prevail over the wording of any document
which subsequently appears on the list:
1. these articles of agreement;
2. the general conditions 9624 (2005-12-16), "General Conditions -
Research and Development";
3. the standard instructions and conditions 9403-5, "Professional and
Research and Development Services";
4. Annex "A" - Statement of Work;
5. Annex "B" - Schedule of Milestones
6. the Contractor's Technical Proposal referenced under the "Statement of
Work" clause hereafter.
STATEMENT OF WORK
The Contractor shall perform the Work as outlined in the Statement of Work
attached hereto as Annex "A" and in accordance with the Contractor's Technical
Proposal entitled " Proposal for the Supply of a 250 kW Hydrogen-fuelled Genset
to Natural Resources Canada", dated January 17, 2006 and forming part of this
Contract.
DELIVERY
Deliverables under this Contract must be received by the Technical Authority
identified herein, at the time specified in the Schedule of Milestones attached
hereto as Annex "B".
STANDARD INSTRUCTIONS, CLAUSES AND CONDITIONS
---------------------------------------------
Standard Acquisition Clauses and Conditions Manual
All instructions, clauses and conditions identified herein by title, number and
date are set out in the Standard Acquisition Clauses and Conditions (SACC)
Manual issued by Public Works and Government Services Canada (PWGSC).
The Manual is available on the PWGSC Website:
Terms and conditions of the Contract
Pursuant to the Department of Public Works and Government Services Act, S.C.
1996, c.16, the clauses and conditions identified herein by title, number and
date, and the Conditions set out in Part B of the standard instructions and
conditions 9403-5 (2004-12-10), "Professional and Research and Development
Services", are hereby incorporated by reference into and form part of this
Contract as though expressly set out herein.
GENERAL CONDITIONS
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The general conditions 9624 (2005-06-10), "General Conditions - Research and
Development", shall apply to and form part of this Contract.
CONTRACTING AUTHORITY
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Xxxx XxXxxxxxxxx
Supply Intern Officer
Science and Professional Services Procurement Directorate
Services and Technology Acquisition Management Sector
Acquisitions Branch
Public Works and Government Services Canada
Place du Portage, Phase III, 11C1
00 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx Telephone: (000) 000-0000
K1A 0S5 Facsimile: (000) 000-0000
The Contracting Authority is responsible for the management of this Contract.
Any changes to the Contract must be authorized in writing by the Contracting
Authority. The Contractor is not to perform work in excess of or outside the
scope of this Contract based on verbal or written requests or instructions from
any government personnel other than the Contracting Authority.
TECHNICAL AUTHORITY
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Xxxxx Oprisan
Manager
Renewable Energy Technologies
Sustainable Buildings and Communities, CETC
Natural Resources Canada, Government of Canada
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxx X0-0
Xxxxxx, Xxxxxxx Telephone: (000) 000-0000
K1A 0E4 Facsimile: (000) 000-0000
The Technical Authority is responsible for all matters concerning the technical
content of the Work under this Contract. Any proposed changes to the scope of
the Work are to be discussed with the Technical Authority, but any resultant
changes can only be authorized by a contract amendment issued by the Contracting
Authority.
CONTRACTOR'S REPRESENTATIVE
---------------------------
Xxxxxxx Xxxxxxx
Hydrogen Engine Center Canada Inc.
0000 xxxx xxx Xxxxxx,
CP 500,
Trois-Rivieres , QC Telephone: (000) 000-0000
G9A 5H7 Facsimile: (000) 000-0000
BASIS OF PAYMENT - FIRM PRICE
-----------------------------
In consideration of the Contractor satisfactorily completing all of its
obligations under this Contract, the Contractor will be paid a firm price of
$179,000.00, customs duty included if applicable, Goods and Services Tax (GST)
extra, if applicable.
No increase in the total liability of Canada or in the price of the Work
resulting from any design changes, modifications or interpretations of the
Specifications will be authorized or paid to the Contractor unless such design
changes, modifications or interpretations have been approved, in writing, by the
Contracting Authority prior to their incorporation into the Work.
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GOODS AND SERVICES TAX/HARMONIZED SALES TAX
-------------------------------------------
All prices and amounts of money in the Contract are exclusive of the Goods and
Services Tax (GST) or Harmonized Sales Tax (HST), as applicable, unless
otherwise indicated. The GST or HST, whichever is applicable, is extra to the
price herein and will be paid by Canada.
The estimated GST ($12,530.00) is included in the total estimated cost shown on
page 1 hereof. GST or HST, to the extent applicable, will be incorporated into
all invoices and progress claims and will be shown as a separate item on
invoices and progress claims. All items that are zero-rated, exempt or to which
the GST or HST does not apply, are to be identified as such on all invoices and
claims. The Contractor agrees to remit to Canada Revenue Agency any amounts of
GST and HST paid or due.
METHOD OF PAYMENT - MILESTONE PAYMENTS
--------------------------------------
1. Milestone payments shall be made in accordance with the Schedule of
Milestones attached hereto as Annex "B", upon the following terms and
conditions:
(a) invoices shall be submitted to Canada in accordance with the
instructions specified herein;
(b) the invoice is approved by the Technical Authority; and
(c) all the Work required for the milestone claimed has been received
and accepted by the Technical Authority.
2. The balance of the amount payable shall be paid following:
(a) delivery and acceptance of the Work; and
(b) the approval of the final invoice by the Technical Authority.
3. Payment by Canada to the Contractor for the Work shall be made:
(a) in the case of a milestone payment other than the final payment,
within thirty (30) days following the date of receipt of an
invoice; or
(b) in the case of a final payment, within thirty (30) days following
the date of receipt of a final invoice, or within thirty (30) days
following the date on which the Work is completed, whichever date
is the later.
4. If Canada has any objection to the form of the invoice, within fifteen
(15) days of its receipt, Canada shall notify the Contractor of the
nature of the objection. "Form of the invoice" means an invoice which
contains or is accompanied by such substantiating documentation as
Canada requires. Failure by Canada to act within fifteen (15) days
will only result in the date specified in subsection 3 of this clause
applying for the sole purpose of calculating interest on overdue
accounts.
INVOICING INSTRUCTIONS
----------------------
Payment will only be made upon submission of a satisfactory invoice duly
supported by documents called for under this Contract.
The invoice shall be submitted on the Contractor's own invoice form and shall
include:
(a) the amount invoiced (exclusive of GST or HST, as appropriate);
(b) the deduction for holdback, if applicable;
(c) the amount of GST or HST, as appropriate;
(d) the date;
(e) the name and address of the client department;
(f) quantity and description (if applicable);
(g) the PWGSC File Number and Contract Number as shown on page 1 of this
Contract;
(h) the financial codes as shown on page 1 of this Contract;
(i) the Client Reference Number (CRN);
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(j) the Procurement Business Number; and
(k) the name and telephone number of the person who can be contacted to
obtain additional information regarding the invoice.
The original and two (2) copies of each invoice shall be forwarded to the
Technical Authority for certification and payment. The Contractor shall also
forward one (1) copy of each invoice to the Contracting Authority.
T1204 - INFORMATION REPORTING BY CONTRACTOR
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1. Pursuant to paragraph 221 (1)(d) of the Income Tax Act, payments made
by departments and agencies to contractors under applicable services
contracts (including contracts involving a mix of goods and services)
must be reported on a T1204, Government Service Contract Payments slip.
2. To enable departments and agencies to comply with this requirement, the
Contractor shall provide the following information, as and when
requested by the client department:
(a) the legal name of the business entity or sole proprietorship, as
applicable, i.e. the legal name associated with the Business
Number (BN) or the Social Insurance Number (SIN), as well as the
address and the postal code;
(b) the type of entity, i.e. corporation, partnership, sole
proprietorship, or joint venture;
(c) the BN if the entity is a corporation or partnership; the SIN if
the entity is a sole proprietorship:
i. (i) If the entity is a partnership and does not have a BN,
then the partner who has signed the contract must provide his
(her) SIN;
ii. (ii) if the entity is a joint venture, then the BN of all
contractors comprising the joint venture that will receive
payment (SIN for applicable contractor(s) without a BN);
(d) the following certification signed by the Contractor or an
authorized officer:
"I certify that I have examined the information provided in
(a), (b) and (c) above, and that it is correct and complete,
and fully discloses the identification of this Contractor."
3. These requests may take the form of a general call-letter to suppliers
or individual contact, in writing or by telephone. Where the required
information includes a SIN, the information should be provided in a
separate envelope marked "PROTECTED".
DISCRETIONARY AUDIT - C0705C (2004-12-10)
-----------------------------------------
COST SUBMISSION
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1. On completion of the Contractor's obligations under this Contract, the
Contractor shall, if requested, prepare and submit a cost submission to
the Contracting Authority specified in this Contract. The cost
submission shall be a statement of the costs incurred by the
Contractor, in accordance with the Basis of Payment, for the Work
performed under the terms of this Contract.
2. The cost submission shall be signed and certified by the Contractor's
Senior Financial Officer and shall contain a breakdown of each cost
element.
3. Supporting information for each element of cost shall be available and
shall be in sufficient detail that an in-depth audit can be carried
out.
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CERTIFICATIONS
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Compliance with the certifications provided by the Contractor is a condition of
this Contract and is subject to verification by Canada during the entire period
of the Contract. In the event that the Contractor does not comply with any
certification or that it is determined that any certification made by the
Contractor in its proposal is untrue, whether made knowingly or unknowingly, the
Minister shall have the right, pursuant to the default provisions of the
Contract, to terminate the Contract for default.
WORK FORCE REDUCTION PROGRAMS
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1. It is a term of this Contract:
(a) that the Contractor has declared to the Contracting Authority
whether the Contractor has received a lump sum payment made
pursuant to any work force reduction program, including but not
limited to the Work Force Adjustment Directive, the Early
Departure Incentive (EDI) Program, the Early Retirement Incentive
(ERI) Program, the Forces Reduction Program or the Executive
Employment Transition Program, which has been implemented to
reduce the public service;
(b) that the Contractor has informed the Contracting Authority of the
terms and conditions of that work force reduction program,
pursuant to which the Contractor was made a lump sum payment,
including the termination date, the amount of the lump sum payment
and the rate of pay on which the lump sum payment was based; and
(c) that the Contractor has informed the Contracting Authority of any
exemption in respect of the abatement of a contract fee received
by the Contractor under the Early Departure Incentive Program
Order or paragraph 4 of Policy Notice 1995-8, of July 28, 1995.
2. The Contractor represents and warrants that the information submitted
with its proposal is accurate and complete. The Contractor acknowledges
that the Minister has relied upon such representation to enter into
this Contract. Such representation may be verified in such manner as
the Minister may reasonably require.
3. The Contractor acknowledges that in the event of a breach of such
covenant, the Minister shall have the right to rescind the Contract.
4. Nothing in this clause shall be interpreted as limiting the rights and
remedies which Canada or the Minister may otherwise have in relation to
or pursuant to this Contract.
INTERNATIONAL SANCTIONS
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1. Persons in Canada, and Canadians outside of Canada, are bound by
economic sanctions imposed by Canada. As a result, the Government of
Canada cannot accept delivery of goods or services that originate,
either directly or indirectly, from the countries or persons subject to
economic sanctions. Details on existing sanctions can be found at:
2. It is a condition of this Contract that the Contractor not supply to
the Government of Canada any goods or services which are subject to
economic sanctions.
3. By law, the Contractor must comply with changes to the regulations
imposed during the life of the Contract. During the performance of the
Contract, should the imposition of sanctions against a country or
person or the addition of a good or service to the list of sanctioned
goods or services cause an impossibility of performance for the
Contractor, the situation will be treated by the Parties as a force
majeure. The Contractor shall forthwith inform Canada of the situation;
the procedures applicable to force majeure shall then apply.
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LICENSING
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The Contractor must obtain and maintain all permits, licenses and certificates
of approval required for the Work to be performed under any applicable federal,
provincial or municipal legislation. The Contractor shall be responsible for any
charges imposed by such legislation or regulations. Upon request, the Contractor
shall provide a copy of any such permit, license or certificate to Canada.
CONTRACTOR'S RESPONSIBILITY - INSURANCE
---------------------------------------
It shall be the sole responsibility of the Contractor to decide whether or not
any insurance coverage is necessary for its own protection or to fulfill its
obligations under this Contract, and to ensure compliance with required federal,
provincial or municipal law. Any such insurance shall be provided and maintained
by the Contractor at its own expense.
Any insurance secured is to the benefit and protection of the Contractor and
shall not be deemed to release or diminish its liability in any manner including
as may be referenced elsewhere by the provisions of this Contract.
APPLICABLE LAWS
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This Contract shall be interpreted and governed, and the relations between the
Parties determined, by the laws in force in the Province of Ontario, Canada.
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ANNEX "A"
STATEMENT OF WORK
TITLE
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250 kW Hydrogen-Fuelled Generator Set (4+1)
OBJECTIVE
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To supply a 250 kW hydrogen generator and controller system for stationary
application, including a one year (or 6000 hours, whichever comes first) on-site
warranty. The genset will consist of five 62.5 kW engines, out of which four
engines will provide continuous power while the fifth will be used for back-up
power during outages and maintenance shut-downs.
BACKGROUND
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NRCan is working on a project to add hydrogen technologies to the Ramea Island
wind-diesel demonstration project in Newfoundland. Six 65 kW wind turbines and
three 925 kW diesel generator sets (gensets) provide all the energy required by
the local community. In line with its mandate to promote the use of renewable
energy in Canada, NRCan's project aims at increasing the renewable energy
penetration on Ramea Island. Hydrogen is a clean, high efficiency medium to
store energy, and can attenuate the energy fluctuations resulting from the
intermittency of wind power.
In order to achieve increased wind energy penetration, a 250 kW hydrogen genset
for stationary use will be connected to the Ramea local grid in parallel with
the current diesel gensets and the wind turbines. Initially, the supplied
hydrogen genset will be installed at NRCan's testing facilities for tests and
evaluation.
SCOPE
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The work required to perform this Contract is restricted to the supply of the
fully functional 250 kW hydrogen genset. NRCan will undertake its integration
into the Ramea project in Newfoundland. The fully functional genset and
controller system must be received no later than October 31, 2006.
TECHNICAL SPECIFICATIONS
------------------------
One hydrogen fuelled genset to deliver 250 KW, consisting of five 62.5 kW
gensets, four of which will run continuously and the fifth will provide backup
and maintenance cycling. The hydrogen genset must be applicable for generating
electricity for housing and buildings via grid connection and must, at a
minimum, meet the following specifications:
Three Phase Power 250kW
Continuous Operation (duty)
Voltage 480 V
Frequency 60Hz
Operating Temperature -40 to +40 degrees Celsius
Fuel Specification Hydrogen Gas
Displacement 4.9 L (305 CID)
Emissions Near-zero emissions with Hydrogen fuel
The control system for the genset must meet the following specifications:
o It must have 3 operational modes
- off: the genset does not work
- automatic: the genset starts and stops at predetermined/programmed
moments
- manual: the genset starts and stops manually
o It must have an emergency stop and adequate protection mechanisms (overspeed,
overcrank, etc.)
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o It must permit the genset to run on 4 engines, 1 left for back up (4+1). In
the case of an engine failure, the back-up engine must automatically turn on
to replace the engine that has failed
o It must have a digital display that:
- shows the genset mode (off/auto/manual)
- shows the genset electrical parameters (voltage, frequency, current,
power)
- shows the genset mechanical parameters (oil pressure, coolant
temperature)
- shows the genset operational parameters (running time
hours)
Engines
The engines must have low friction and high robustness, with specially modified
fuel delivery, and should have inter-cooled turbocharger and controls, if
necessary, to allow long-term reliable operation at 3,600 RPM synchronous speed.
Emissions
Since the fuel is pure hydrogen, the system provided must have near zero
emissions.
Fuel Delivery
The fuel delivery system must use closed loop control methods to guarantee that
proper fuel mixture is maintained.
Cooling System
The cooling system must provide reliable operation at up to 40 deg. C.
Generator
Each of the five engines must be coupled to a class H, 2 pole, brushless,
self-regulating alternator with winding pitch designed to reduce the harmonic
content of the output waveform. The regulator must maintain 1% voltage
regulation and will include under-speed and overload protection. Construction
must be compliant with Canadian (CSA) directives.
Control Panel
The panel must include typical NFPA 110 type controls and displays, as well as
provisions for manual and automatic operating modes. Operation with an automatic
transfer switch must be supported in the auto mode with a switch closure input
for remote start.
Construction
The standard package must be skid-mounted with base supports that have integral
vibration isolators for the engine, radiators, and generators to minimize
vibration transmission.
Placement
The standard package must be suitable for placement indoors or outdoors. For
indoor operation, provisions will be made by the user for the appropriate air
intake and exhaust. As well, all applicable codes for indoor use of hydrogen
will be respected by the user.
Quality and Warranty
Every production unit must be factory tested at rated load. Testing includes
operational data at various load levels and block load application. The gensets
must include a one year (or 6000 hours, whichever comes first), on-site
warranty.
Grid-Tie Interface
To be supplied by local utility.
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TRAVEL
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Following the FOB delivery of the genset to NRCan's facilities in Ottawa (by May
31, 2006) and as part of the completion of the control system, the Contractor
must retrofit the control system to the genset at Newfoundland and Labrador
Hydro's facility in St. John's(by October 31, 2006). Any travel required by the
Contractor for this purpose will be at the Contractor's expense.
DELIVERABLES
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o Preliminary drawings of the 250 kW hydrogen genset including package
dimension, size of major components and identification of all
components and progress report on the work that has already been
performed and forthcoming work related to the supply of the hydrogen
genset (March 31, 2006)
o Final drawings of the 250 kW hydrogen genset including package
dimension, size of major components and identification of all
components and progress report on the work that has already been
performed and forthcoming work related to the supply of the hydrogen
genset (April 21, 2006)
o Delivery of the 250 kW hydrogen genset, FOB to NRCan's Xxxx'x Corner
facilities in Ottawa, without the control system, in accordance with
the technical specifications (May 31, 2006)
o Provision of one to two days of training, as needed, to NRCan's on-site
local maintenance personnel for the operation of the complete genset
within three weeks of its delivery (no later than June 21, 2006).
o Delivery of the control system and retrofitting it to the genset at
Newfoundland and Labrador Hydro's facility in St. John's (October 31,
2006)
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ANNEX "B"
SCHEDULE OF MILESTONES
Firm milestone payments shall be made to the Contractor as follows:
====================================================================================================================
MILESTONE DELIVERABLE DELIVERY DATE FIRM AMOUNT
--------------------- ----------------------------------------- ------------------------ ---------------------------
1 Preliminary drawings and progress report March 31, 2006 $60,000.00
--------------------- ----------------------------------------- ------------------------ ---------------------------
2 Final drawings and progress report April 21, 2006 $60,000.00
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3 Delivery of the complete genset May 31, 2006
$39,000.00, following the
--------------------- ----------------------------------------- ------------------------ delivery of the complete
4 Commissioning, and one to two days No later than June 21, genset and the training
training, as needed, of local 2006
maintenance personnel.
--------------------- ----------------------------------------- ------------------------ ---------------------------
5 Delivery and installation of the October 31, 2006 $20,000.00
controller system
====================================================================================================================
TOTAL FIRM PRICE (GST/HST EXTRA): $ 179,000.00
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