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DOE to fund development of processes to aggregate purchases of alt-fuel and advanced vehicles; goal is cost reduction and accelerated adoption

DOE plans (DE-FOA-0001236) to issue in the February 2015 timeframe a funding opportunity (DE-FOA-0001237) to develop and to implement effective purchasing/procurement processes designed to coordinate and consolidate bulk alternative fuel vehicle and advanced vehicle orders and thus reduce the per-unit prices of commercially-available vehicles.

DOE expects that such an aggregated purchasing/procurement process will enable original equipment manufacturers (OEMs) and suppliers to increase production volumes; achieve economies of scale; and reduce incremental vehicle costs specific to electric drive, natural gas, propane, hybrid, and other alternative fuel vehicle and advanced vehicle technologies.

Alternative fuel vehicles and other advanced vehicles are attractive for many reasons, such as fuel diversification for energy security, environmental benefits, and potential cost savings over the life of the vehicle. However, their higher initial costs compared to conventional vehicles is a deployment barrier. Higher alternative fuel vehicle and advanced vehicle prices can be attributed to not only manufacturers spreading costs over fewer vehicles, but also the complexities of marketing and supplying vehicles to meet diverse local requirements and fleet needs. If vehicle fleets or consumers could purchase vehicles in larger quantities, or participate in aggregate purchasing initiatives, manufacturers would be able to reduce per vehicle costs resulting in lower prices.

—DE-FOA-0001236

Applications for the FOA will need to address:

  • Management and administration of all aspects of the aggregated vehicle procurement/purchasing program being proposed

  • Group purchasing initiatives or organizations such as a buyer’s consortium, where potential members/users have a mutual interest to procure alternative fuel vehicles and advanced vehicles based on vocation, fleet type, geography, vehicle class, configuration, or classification to effectively leverage volume orders and coordinate and bundle procurement packages

  • Projected vehicle orders as well as acquisition, delivery, and deployment timelines

  • Projected volume price reduction when compared to current commercially-available singular alternative fuel vehicle and advanced vehicle prices

  • Approaches and plans for coordination/consolidation of standardized vehicle specifications to streamline manufacturing and reduce unnecessary product variations

  • Approaches and plans for coordination of order and delivery schedules that complement OEM manufacturing windows and end-user procurement cycles

  • Criteria used to determine competitive or sole source approaches

  • Innovative contracting, financing, and payment/escrow strategies for vehicle purchases

  • Identification and recording of best practices and lessons learned

The goal is the creation of processes and procedures that can be used by a wide variety of public and private fleets and individuals who wish to acquire alternative fuel vehicles and advanced vehicles.

EERE expects to make multiple financial assistance awards in the form of cooperative agreements. The estimated period of performance for each award will be approximately two years.

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