 We're back on our flagship energy show with the Hawai'i NG Policy Forum, Sharon Moriwaki and me, four o'clock on Wednesday. Ah, great. And we have Jim Kelly here. Special guest for some news from Hawaiian Electric, Jim Kelly, who is a communications manager of Hawaiian Electric. And we're talking about a press release about self-supply. Yes. This came out. What's happened? Yes. This is self-supply, which is kind of the evolutionary step forward from grid supply, which is basically the way it works now as you can, if you have a system on your house and you have excess electricity, then you can sell it to Hawaiian Electric for credits. That's still available on Oahu, but on Maui and also very shortly on Hawaii Island, that's going to be, they're hitting the caps of the Public Utilities Commission set for sending electricity back to the grid, so the new system is called self-supply. And basically that enables you to supply your own household and then with batteries or without, but a self-contained unit that will supply your own household that will not export to the grid. Yeah. This is a solution. It's a great solution. I mean, I'm telling you before the show, I mean, it's a solution that seems so logical. It's good that it's happening. It solves the whole problem, doesn't it? Well, we think it's a really good step forward. I think some people have said, well, once the grid supply, it's the caps, and there's not going to be any more rooftop solar, and that's not the case. This is the step forward from that now that the technology is there that people can put in a system that is, again, not designed to export electricity, so you're making money, but it's designed to generate electricity for your household. If you're on your air conditioner a lot during the day, you can store the excess in the batteries. So when you come home at night, you're running off of that. So, you know, what makes us different, these systems have been designed specifically for Hawaii because Hawaii has a different situation than all the other states where you can put as much, there's no limit. I mean, you know, if you have extra, we have physical caps, physical limits on how much electricity can be put on the grid. So this is the next step, and we think a lot of people are going to find this. So how does the homeowner or person get one of these? I mean, do we call you? No, don't call us. You can look on our website on any of these, the Hawaii Electric, Maui Electric, or Hawaii Electric Light has some really terrific pages devoted to getting started on solar, but then any number of the big companies are now selling these new products, these self-supply products, and what's great about them is because they're fairly standardized now, the time it takes to get an application through the process with us is very short, and our idea is to make these almost standard to the point that the turnout will be very quick so that people can get these put on the roof and turn it on. So what is the process? It's not going to you, it's going to a solar company, and they will then put the application into you. Right, right, right, they work with us as does the customer. But yeah, these are sold by the Solar City Sun Run event, you know, Revolution Sun. But then they can go and find those online. Yes, yes, we have all the information about that. So from the point of view of the consumer, if a cap for that island, if we haven't exceeded the cap, or bumped up against the cap of that island, I can still go the classical way. I can set it up to selling power back to the utility. Yes, there's still some space left, but it is going pretty quickly as we're getting closer to the cap. A lot of the contractors are selling, you know, as fast as they can. So, you know, we still have some room left, but I'm hoping people are starting to look at self-supply as a good alternative. Yeah, so internally you have, the whole system is there for you. Right. You don't have to, you don't have a situation where you're selling back to the utility. On the other hand, to be clear about it, you can still buy power from the utility. Yes. You still need to buy power. We would encourage you to continue to do that. Yes, yes. At night, for example, you're still hooked up to the grid, and you know, the batteries do have their limitations depending on how many, how many they get, the more expensive they are. But yes, absolutely, you're still connected to the grid, and we're there for you. You can use as much electricity as you want to use it, any quantity, 24 hours a day, and we're there for you. Great solution. Is it forever, or is it something? Well, there's the whole, what they call DER, a distributed energy resource. Docket is still open with the PUC. We're working with the contractors and all the stakeholders. It's in its phase two now. We've moved into the second phase of this, and we're trying to work with everyone to figure out, okay, where does this go now? What makes sense for the, you know, the homeowner and the community, and how does it get us closer to our 100% renewable energy goal? So true about everything in energy. It's the beauty of it. It's a great time to be alive. Things are evolving. Yes. This is a step forward as far as I'm concerned. Yes, things are very quickly. Well, good. I'm glad you think it's a step forward. That's good. Well, thank you, Jim. I hope to have you back as often as you want. Okay. Well, thanks for having me, Jim. Thanks for having me, Jim. It's Wednesday. Come back and you talk. Thank you so much. Aloha. I'm Kaui Lucas, host of Hawaii Is My Mainland, every Friday here on Think Tech Hawaii. I also have a blog of the same game at kauilukas.com, where you can see all of my past shows. Join me this Friday and every Friday at 3 p.m. Aloha. Hey, Stan, the energy man here. I know you're bored this summer. You're just sitting at home, figuring out what to do. Go to the beach. Spend some time with Think Tech Hawaii. Spend the time thinking about how you can contribute to Hawaii and making it a better place to live. And start watching some of the programs on Think Tech, including Stan the Energy Man. Well, you'll learn all about everything energy, especially hydrogen and transportation. So we'll see you every Friday at 12 o'clock noon. Stan the Energy Man here on Think Tech Hawaii. Aloha. Aloha. I'm Shantel Seville, the host of the Savvy Chick Show which you can watch every Wednesday at 11 a.m. on ThinkTechHawaii.com. On the Savvy Chick Show, we are all about inspiring and empowering women and girls to be the best they can be by having amazing guests from all around the world. So we hope you'll join us every Wednesday at 11 a.m. Aloha. Aloha. My name is Josh Green. I serve a senator from the Big Island on the Kona side, and I'm also an emergency room physician. My program here on Think Tech is called Health Care in Hawaii. I'll have guests that should be interesting to you twice a month. We'll talk about issues that range from mental health care to drug addiction to our health care system and any challenges that we face here in Hawaii. We hope you'll join us. Again, thanks for supporting Think Tech. Aloha, everyone. I'm Maria Mera, and I'm here to invite you to my bilingual show Viva Hawaii on Think Tech Hawaii every other Monday at 3 p.m. We are here to talk about news, issues and events local and around the world. Join me. Aloha. This is Steve Katz. I'm a marriage and family therapist, and I do shrink wrap, which is now going to every other week all during the summer and maybe forever after. Take care of your mental health this summer. Have a good time. Do what's fun and take good care of yourself. Bye-bye. We're back. I told you we were coming back. We're back. Melissa Pavlichek, the Hawaii Procurement Institute, Executive Director. Am I right? Yes. Wow, fabulous. Thank you. And I'm sitting right next to you. I'm Kiko McClellan. Hello, Dave. I'm Kellatron. That's correct. All right. Thank you, guys, for coming down. We're going to talk about procurement in energy today. Why don't you define the scope of what we're going to talk about, Melissa? Well, procurement is government contracting. And so there's a lot of news recently and always about how to get the most transparent, accountable, efficient, effective procurement at the best for our money, our money, the people's money when we buy energy or any product in service for government. So the Hawaii Procurement Institute works a lot with private sector companies like K-Coas as well as government contracting officers at the local, state, and federal level to try and educate people about what the rules are and what they should be and how we can do procurement better. Facilitate comes to mind. Right. Why do we need this? Why do we need facilitation? Are you telling me that we haven't had enough facilitation in the past? Are you telling me that procurement is difficult in Hawaii and the federal government for that matter? You know, based only on the number of bills I see at the state legislature about procurement, and every year there's at least 30 or 40 of them, it tells me that people are itching to change the laws. And our procurement institute takes the position that the laws we have are generally adequate to do good procurement. We need to utilize them better and be a little bit more like the federal government when it comes to utilizing our procurement law. That's very important. You know, I mean, I think one of the reasons in Hawaii, just a comment that there was all this possibility, you must be familiar with this, K-Coas. There's all this possibility of work for state contracting organizations from the federal government, but it's hard to read the rules. And so what would happen, maybe it's still happening to some degree, is the contractors who come from the mainland, they would read the rules, they would get the work, and the local contractors wouldn't read the rules that were intimidated by the rules so they didn't make any bids. So we're getting bids. Well, we want to talk to you today about some tools, and Pelotron is a great example of using some that were set up in the federal system that we don't have, or we have different counterparts here in Hawaii, and that companies can use to really get in and bid on contracts. I'm excited about that. Let's see what K-Coas has to say. Well, there's a lot depending on what you want to talk about, Jay, but let's limit it just to procurement and energy. There's a good idea. That might work out well. We only have six hours for discussion. You know, and K-Coas has a very unique background because not only is he the CEO of a company that does business with government, but he's been a government contracting officer. Both sides of the coin. Yeah, it's been interesting. Well, Pelotron is a firm that's associated with a hui of companies. So I work for Pelotron Power Evolution and PQ Energy, and we are part of the P-Sed Ohana, the Pelotron Center for Economic Development. And this group... P for procurement. P for procurement. You're right, because it all depends on whether or not you can make it through this arduous government procurement process. So one of the reasons that I think Mel asked me to join you folks here today to talk about procurement and energy is that in our work at Pelotron, we've done great work with the federal customer. And we've had to work within the SBA's Native Hawaiian Organization-owned A&A program to bid for and get this work. And there are mechanisms in the FAR and with the SBA that allow for new companies because of some sort of particular relating to the owners and the principals that give them an advantage. And that advantage usually deals with the lack of past performance. And the lack of past performance is an issue that all new firms, like Pelotron Power, is a new firm in the baseload renewable energy business. Can you take a moment, just a footnote to that? What exactly does Pelotron do? So Pelotron Power and PQ Energy, in addition to the work that our sister companies do with USDOD, we're primarily focused on providing waste-to-energy and waste-to-fuel utility-scale solutions to the government customers. So we're actively bidding and developing solutions for the government customer using... City, state, federal. City, state, federal. That's correct. That's correct. That's great. Okay, Koa touched on a few acronyms and procurement is famous for them, whether it's RFP, FAR, ADA, et cetera. So stop us any time and we'll get into those. Okay, thank you for pointing that out because I mean, I think the more acronyms than the more bureaucracy. Well, you need to come to a Hawaii Procurement Institute educational workshop. Tell me about that. How do I go? Where is it? Where do I sign up? So we have a website, the Hawaii Procurement Institute, and we put on educational programs throughout the year and send out emails on a regular basis, alerting people. We try to connect resources and work with other organizations, but frequently, in fact, we just recently had one about contract pricing in advanced workshops. So contractors and government contracting officers can understand what the rules are and what you can charge, what you can include in your bid, and how to make your bids the most cost efficient that you possibly can. Yeah, and get the work. Right. Because it's competitive. And save us people the money. Yeah, sure. The most efficient market. There you go. What can you do for a Kekoa? I mean, the institute. What does she do for you? We invite him to programs. It's a great question. Now, that's going to cost me a cup of coffee, at least. I'm not sure. But the government contractors that we have right here in Hawaii are fantastic examples of how to work with the government agencies as their customers, and they're also stimulating the economy. So we try to help and support them with education, also opportunities to network and build relationships with government contracting officers, and really just be aware of some developments, case law, and other things that are happening in the area that might affect their bidding process. That's great. So actually, you're doing what I was hoping would happen one of these days, and that is local contractors can be on an even playing field with the big nationals, the defense contractors, for example. Or in some cases, compete and win on the mainland and use this ADA process to get government contracts. Now, that specifically applies to federal contracts with the Department of Defense. That's correct. But there are other mechanisms, preferences, and processes that can be used either on the local or state level. And hopefully, there'll be a progression towards a mimicking of federal procurement rules and regulations, which, if you want to stack them up, there isn't enough space in this room to look at all of them, but they're tested and they work and they provide an advantage to small business. And in Hawaii, most business is small business. And if we could somehow get through organizations like Males and others, state procurement, which flows down to county procurement, to more closely mimic the trial and true practices of the way federal agencies procure, I think what you'll see is other local firms really having an advantage over firms from the mainland that want to come in and, you know, bid on work that the state's putting out. Why is that? Why would they have an advantage? Because the federal programs that exist today without changing anything or making anything new, federal programs today set a tremendous threshold for preference to small business. Small business, period. And then on top of that, there are thresholds for women-owned, native Hawaiian-owned, small, disadvantaged, veteran-owned businesses, 8A, they call them 8A contracts. I'll give you an example. The U.S. Army Corps of Engineers, more than 70% of all the contracts that they awarded last year, more than 70%, were all on vehicles or direct awarded to small businesses. And that usually means local. That usually means local. Kiko is touching on something that's so important to the Hawaii Procurement Institute, which is let's not create a changing landscape in the legislation and the statutes, the rules, and regs because businesses can't... You'll point at the beginning. Exactly. But let's not throw out the baby in the bath. Let's find the consistent, constant, tried-and-proven procurement arrangements, rules, and use them. And then he started talking about some preferences. But I think something we kind of skipped over a little bit was this idea of how much should past performance count in awarding a contract. And so the federal government has... That's another policy. How much should it count? The government has some very clear rules on that. And our state law also can accommodate the concept of whether or not the person is a qualified bidder. But there's been a lot of discussions and the state procurement office administrator has had to produce some reports outlining what the rules are on that because legislators often think, hey, we need to focus more on past performance. When in fact, utilizing past performance as merely a component actually helps to get new contractors in and stimulate competition. Absolutely. What I hear, though, is that the rules on the federal side are good. The rules on the state side are okay. You've got to learn them and everything and abide by them. But if we play this straight, it's not political. Am I right about that? In other words, it's not who you know. You can go in and make a pretty good case on a completely rational basis and not worry about who you know. Well, I mean, this is the very definition of sound procurement policy. We want it to be fair. We want it to be transparent, accountable. And making it, I think that it is and we are constantly working on strategies to try and ensure that it is. And one of the ways that government contractors and people ensure that it is is something that is talked about a lot in a negative way and we don't think it's negative at all and that's the protest process. So protests are the mechanism that we use to ensure that the proposals, the RFPs, the documents that government uses to procure things are fair. And so, often I hear people say like, oh my god, that thing is in protest. We shouldn't have protest. That's not the case at all. We need to understand what those mechanisms are and how they help ensure... Keeps it honest. Absolutely. Yeah, yeah, yeah. So do I need a lawyer to do this kind of stuff? Do I need a lawyer to do... You need more than a lawyer. You need a great lawyer. More than a lawyer? You need an accountant. You need some people with experience. And so, mentor relationships are things that government contractors or companies that haven't done business with government before. They can be a subcontractor to a company like Keikoas and start to build experience that way. So mentor relationships with companies that already do business with government. Definitely having a CPA who knows what kind of costs are allowable and you can use in doing your proposals. For sure, a good lawyer. Of course. It's a worth it now, these days, with all of this. This lattice work of rules and regulations. There's a lot of work. I'm a small company, you know. I don't have a lot of resources. You're not going to be selling toilets for millions of dollars to the government. That's not going to happen. So I think you're not going to get rich on some cushy scam. But at the same time, there is a lot of work and there's a lot of good work to go around. If you have the moxie to throw down and put everything into it, a group of young Hawaiians recently got together and formed a new company called Prism. I'm a part of it. I love that name. It's a great name. P-R-Y-Z, I'm Prism. Oh, no kidding. I'm a part of that. Also the name of a nightclub in London, but we'll talk about that later. Okay, yeah. And the intent was to put an NHO-8A-owned firm into the civil engineering world of U.S. DOD contracting with a focus on the Pacific Theater because there doesn't exist currently a civil engineering firm in the NHO-8A program. And you're not reinventing the wheel here because the program exists and we know there's work out there, lots and lots of work out there. But in order to make this work, the gentleman running the firm and who founded the firm, his name is Kai Austin, had to double down and buck up and put every penny into it. So firms are thinking about whether it's worth it. Pelotron, as an example, has done very well. But in that classical example, the owners, Aimoku, Harvey, Aimoku, McClendon, Harvey Kim, have had to put everything into it. So it's not unlike any other business. It's messing your money. That's right. If you're going to do it, you have to put everything in. That's what Kai is doing. So today there's a new firm on the street marketing itself as a civil engineering firm called Prism. And they're in the ADA application process. But is it difficult? Absolutely. Is Kai wondering what's coming next? Who's on first and what's on second? Absolutely. But that's the nature of small business. So what small business owners like we look for is help from organizations like Melissa. And they exist and they're out there and they're very useful. The networking value, the technical support that they can provide. I think talking about some of those resources like the procurement technical assistance center, Hawaii procurement, SBA, state procurement office, those are some of the things we wanted to share with you. There are other experts that you need on your team when you're getting ready to bid for a government contract. One that is often overlooked by federal government contractors is an HR professional. Because even if you are only working on base or doing federal procurement, you have to comply with Hawaii's labor and employment laws. So there's a whole team of people that you need. And you have to show the contracting agency that you are compliant. Absolutely. You have to comply with fair employment laws and wage and hour laws. You're very Akamai business to do this. You can't have rough edges on it. You've got to be ship-shaped. Absolutely. So one of the things, one of the bugaboos is that, oh gee, it takes so much time. You've already talked about trying to get a team, which is not cheap. But you get a team. You know, you're a young business. You believe you can do it. You go into the process, tick, tick, tick, tick. The metronome goes back and forth every day. And meanwhile, you know... Right. Hardest money you're ever going to work for. But, you know, if this is your vision, passion, mission, who else is purchasing some of these large goods and services? Certainly in the energy sector, utility-scale energy, you're going to have to work with governments. Yeah. You know, is it great to work with federal government these days? Absolutely. I mean, is it your ideal kind of contracting party? There's no such thing as an ideal contracting party. We're here on the same track. But the federal government customer these days, this is what you're going to get. You're going to get professionals who know what they're doing, who are public servants at every level when you're working with the federal customer, or the state customer, or the county customer. These are people who have committed their life to public service and they want the best value for you. The same guy that's bidding on it is a constituent of theirs. And these people have taken their jobs seriously. So you have to appreciate that. And when you walk in with that appreciation and you take the time to understand the customer and learn what matters to them, if it's the marine customer like Pelletron has dealt with in the past, and you get into their psyche and you develop a relationship with the contracting officer like the good people at Pelletron have done and a good relationship with the customer, you can service them well. And you feel good because at the end of the day, you're not just selling some widget, you're doing good for government. And if you do it right, you can make a profit in the process. And the federal customer, the state customer, the county customer, they're not afraid of you making a profit. But there must be a distinction between the three of them. Absolutely. I'm pretty high on federal government. Not everybody is these days, but I like federal government. I think elevating the quality of the government contracting officers is an important priority in our state procurement office administrator. I mean, improving the professionalism and giving support and resources. Training them. Absolutely. So state procurement office administrators, Alan, has really put an emphasis on training the government contracting officers. She set up modules online that community members can also watch and learn and really getting certified procurement professionals. You're talking about a dynamic that's happening now. Absolutely, yes. You're talking about maybe an improvement. Absolutely. I think so. I definitely think so. And I think this is where some public and private partnerships are naturally occurring that need to work on training and application. How does that differ from federal and state? Yeah, I think there's a lot of... Is it the same dynamic? Yes. What county would you like to contract in most? Well, I have an active bid in with a particular county. Even within counties, so there's some very big differences. So some state city agencies have much more autonomy in government contracting and within the state as well. So although the state procurement office oversees procurement in general. That's correct. Certain agencies like the Department of Education have a lot of autonomy or the University of Hawaii. So similarly on the city level, the Board of Water Supply and there are examples where they have more autonomy and don't fall within the general state. But in general, the state procurement code covers at least in some ways the counties. There are a lot of things that apply to contractors, gift laws and ethics and many other things that apply regardless and will filter down to the city, so yes. Okay, so I'd like to take a last few minutes about our discussion and talk about how this relates to energy. To RFPs, for example, for renewable energy. Can we talk about that? Absolutely, and I think it's not just RFPs but it's grants. It's using the legislative process to get approval for special purpose revenue bonds related mechanisms to help stimulate energy good energy procurement and purchases. And so I think for me, what I'm hoping that you're going to be talking about for the next few weeks is not just procurement in general, but some specifics on the city level, on the state level and on the federal level on how to promote innovation, how to get good responses to the bids and how to ensure that we have competition because competition helps ensure the best procurement. Yeah, and if we're going to get to 2045 and 100%, we're going to need the best possible environment for that. That's right, and we're going to need public-private partnerships. One of the things that we can do at the county and state level is to revisit how public-private partnerships are authored and are bid. Public-private partnerships allow for some culling activity in some form of competition, but they also allow private guys to come in and say to government, here's what we can concede and what we're willing to give on so that we can create a better product and a better value for you, the government customer, and ultimately the constituents that you know, we're the constituents, you and IJ, but what it's going to take is more direction from our legislators and from SOP to give the counties and to give the different agencies the comfort they need to enter into public-private partnerships because they're different and as we know we don't want to put the pressure on our contracting officers to come up with something new. There are statutes on the books, there is a statute that allows, for example, a county to engage in a public-private partnership if the intent of that public-private partnership is to use the county's waste to generate some sort of energy activity in the county, but because no public-private partnership has been exercised through that statute the procurement officers don't know what to do with it, they don't have enough direction on what latitude do we have to exercise. So the bidding party should try to educate the contracting officer. Well I think this is where the state procurement office is really doing a lot of fantastic work and some of these conversations are taking place at the procurement policy board level, so that's another key party that we haven't really touched on. What is it? But they oversee the state procurement office and they are a group appointed by the governor and other, yes, a citizens group that works on procurement policy implements rules that match with the statutes already there. We're out of time, I just want to ask you each of you a question to close. Kikoa, what's your advice? You can talk to that camera over there. What's your advice to some young group who wants to get into this business who is considering, you know, forming a company, having those partnerships and making bids. What's your advice? Be ready for a wonderful and challenging ride. If you want to do it, do it. If you don't yourself before you get into it, that's okay. The important thing is you're doing it for the right reasons. That would be it. Okay, and my question to you, Melissa, you imparted that we're going to have several shows on the subject. Can you give our listeners an idea of how this is going to unfold over the next few weeks on procurement? Yes, so this is my procurement institute and thank you for inviting us to help organize the next few programs, but we've invited speakers from state government from the private sector like Kikoa and from a city agency to try and talk a little bit more about some specifics and what's happening about procurement. Yeah, I agree with you guys absolutely. It's critical that we do this. We want to build it. We want to build an economy around energy at least and we want to get, you know, the work. We want to get the work to the local companies but more robust economies. We're on the same place. Thank you so much, Melissa. Thank you. Appreciate it. Yeah, along.