PENNSYLVANIA PUBLIC UTILITY COMMISSION
P.O. BOX 3265, HARRISBURG, PA17105-3265 / IN REPLY PLEASE REFER TO OUR FILE
March 25, 2005
Dear Mr. :
The Public Utility Commission is seeking a management consulting firm to conduct a stratified management and operations audit of the following companies:
Metropolitan Edison Company – Reading, PA
Pennsylvania Electric Company – Erie, PA
Pennsylvania Power Company – Youngstown, OH
Metropolitan Edison Company, Pennsylvania Electric Company and Pennsylvania Power Company are the FirstEnergy electric distribution companies operating in Pennsylvania (collectively referred to as the FE-PA Companies). As stated in the attached Request For Proposal (RFP) (see Attachment A), the stratified management and operations audit will consist of three phases. The first phase will be a diagnostic review assessing the condition of each functional area or business unit against evaluative criteria or expected business practice. While this review will be primarily limited to determining if appropriate management controls, systems and processes are in place, it should be of sufficient scope to identify significant problems, if any, requiring additional focused analysis. All recommendations should be quantified except where this is impossible. The second phase will be an in-depth analysis of those pre-identified areas or issues listed in Section IV-2 of the RFP. These analyses will be of sufficient depth to provide specific recommendations for changes together with projected costs and potential dollar savings or other quantifiable benefits, if any. The third phase, if necessary, will be an in-depth, focused analysis of specific areas or issues approved by the Bureau of Audits resulting from the diagnostic review in the first phase. As with the analyses in the second phase, this focused analysis will be sufficient to make specific recommendations for change and will include projected costs and savings or other benefits resulting from the proposed changes.
Please note that Sections I-10, I-21, II-7, II-8, III-3, and IV-7 of the RFP contain language related to Disadvantaged Businesses and Small Businesses in Enterprise Zones. The Commission is strongly encouraging participation of these businesses in the conduct of management audits, and has decided that the extent of this participation is to be explicitly considered in the proposal evaluation process. Accompanying the attached RFP is an information package (see Attachment B) from the Pennsylvania Bureau of Minority and Women Business Opportunities (BMWBO), which will be evaluating the Disadvantaged Businesses portion of the proposals. Questions concerning this information package should be directed to the BMWBO at (717) 787-6708. Additionally, accompanying this RFP is a contact list of Small
Businesses in Enterprise Zones (see Attachment C). Questions concerning this information package should be directed to the Pennsylvania Department of Community and Economic Development at (717) 720-7409. Also attached for your information is a list of firms (see Attachment D) who wish to participate in the management audit program as subcontractors. Please consider them as you prepare your proposal.
We invite you to submit to us eight copies of your proposal for this audit by 4:00 P.M. on Monday, May 2, 2005. Any proposals or amendments to the proposals received after the specified time will not be considered in the evaluation process. A blank copy of the contract (see Attachment E) which the winning proposer will be required to sign is attached for your review.
A preliminary meeting between Commission staff, senior FE-PA Companies’ officials, and all consulting firms who are interested in undertaking this project is scheduled for Wednesday, April 13, 2005, at 1:00 P.M. This meeting will be held in Hearing Room 4 on the ground floor of the CommonwealthKeystoneBuilding, 400 North Street, Harrisburg, PA17120. Any questions you may have about the management and operations of the FE-PA Companies, the role of Commission staff, or any other matters raised or omitted in the RFP will be answered at that time. Also, a representative from the BMWBO will make a short presentation on the Disadvantaged Businesses and Small Businesses in Enterprise Zones requirements and be available to answer your questions. No invited auditor will contact or consult with the FE-PA Companies about the proposed audit except at this meeting.
We are forwarding an information package (see Attachment F) for use in preparing your proposals. This package should answer many of the questions you may have about the FE-PA Companies before the preliminary meeting.
The Commission has designated Dan McAndrews of the Bureau of Audits as Project Officer. If you have any questions, please feel free to call Dan or George Dorow, the responsible Audit Supervisor, at (412) 820-2600. You should address all correspondence directly to the Project Officer.
Very truly yours,
Dennis P. Hosler
Dennis P. Hosler, CPA
Audit Manager
Bureau of Audits
Attachments
cc:G. Dorow
D. McAndrews