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Enron Mail |
Jennifer,
Thanks for hosting the meeting yesterday. Sorry I had to leave but I had to meet with Beth Pearlman. I believe there was a lot of good information exchanged and that is why we ran so late. I certainly came away with a different insight to Enron that I did not have before we met. Regarding the relationship between Compaq and Enron, I need to make some things are very clear in our go forward strategy. At the end of the day, the account team (Dave Spurlin up through Jeff, myself and Jerry) own the responsibility for the Enron relationship. If corporate folks are making deals with Enron, we still have to manage the account. Peter Blackmore is very clear about that. He was always preserved the integrity of the account team as being responsible for the customer. That is why we need to keep Dave focused and knowing what transactions are taking place within Enron. He isn't the decision maker on deals like the EBS one, but as you are well aware of, the EBS contract has impaired other business opportunities within Enron. Dave's sole responsibility is Enron and making sure that your needs are being met. He will direct and assist in making sure that we have resolutions for situations that impact the relationship with Enron. I need your help with all Enron organizations to make sure that they use Dave as the focal point. If folks continue to go around him, situations like EBS will continue. He has to have the total picture of business transactions happening at Enron. He will understand how those situations can impact the business at and for Enron. Secondly, attached is the information that I received regarding contracts with Enron. Regarding the Power/Gas contact it is a 5-year deal with the sixth year being optional. The annual outlay is estimated to be $16.1M per year. I did make an error in using the $97M divided 5 years versus 6 years. So at 5 years the value is $80.5M. If you have something different, let's make sure that we are on the same page. I have attached the emails that I received this data from. <<RE: Enron Energy Management Contract - Update.<< <<RE: Enron Building Services Novi MI.<< Regarding the EBS deal, from a business perspective we need to do a level set very quickly. Compaq wants to get this settled and move on in a positive light. Compaq will honor it's commitments but we need to make sure that Enron does the same. The bottom line is there needs to be a resetting of expectations relative to Compaq's revenue from EBS versus what actually got booked. Our expectations were $96M a year based on the forecast provided by EBS, certainly not $14M (based on what we agreed to yesterday). I find it very difficult in the spirit of partnership to hear that we are being held accountable for our portion of the deal, when we don't have the revenue to off set it. Based on what I have heard, both parties had shortcomings based on expectations that were set. I will speak to Keith and Rob this morning to see how it was left. I also need to get your perspective on the transaction. Jennifer, if there is a business opportunity, Compaq certainly wants to continue in pursuing that with Enron. Provided it's equitable for both sides. I realized that this is a difficult situation, but we will get through it. Jennifer, once again I appreciate your efforts in setting the meeting up and hosting Compaq. I will contact you later today. Thanks, Bob Jordan Rio Grande Area Director Compaq Computer Corporation Tele #281-927-6350 Fax #281-514-7220 Bob.Jordan@Compaq.com Message-ID: <C34EB66A4168D211984900805FBEF6A6069BDA22@EXCHOU-NAFD04< From: "Earle, Jerry" <Jerry.Earle@COMPAQ.com< To: "Fiore, Michael" <Michael.Fiore@compaq.com< Cc: "Leach, Renee" <Renee.Leach@COMPAQ.com<, "Jordan, Bob" <Bob.Jordan@COMPAQ.com<, "Spurlin, David" <David.Spurlin@COMPAQ.com<, "Gooden, Jeff" <Jeff.Gooden@COMPAQ.com< Subject: RE: Enron Energy Management Contract - Update. Date: Tue, 19 Sep 2000 14:29:34 -0600 Sensitivity: Company-Confidential MIME-Version: 1.0 X-Mailer: Internet Mail Service (5.5.2652.78) Content-Type: text/plain; charset="iso-8859-1" Michael and Renee, This is great news. Thanks to both of you for not only driving this to a successful conclusion, but for also keeping us informed throughout the process. Hopefully, this will help our business with Enron. Regards, Jerry < -----Original Message----- < From: Fiore, Michael < Sent: Friday, September 15, 2000 8:54 AM < To: Earle, Jerry < Cc: Leach, Renee < Subject: Enron Energy Management Contract - Update. < Importance: High < Sensitivity: Confidential < < Jerry, < < Good morning. The Enron contract for Energy Management < Services was signed yesterday. Below are some highlights of the deal: < < I. Sites Included: < < California: (Gas & Electricity) < Massachusetts: < 19191 Vallco Pkwy , Cupertino 200 Forest Street, < Marlboro (electric) < 19333 Vallco Pkwy., Cupertino 165 Dascomb Rd, < Andover (gas) < 10100 N Tantau Ave., Cupertino King Street, < Littleton (gas) < 10300 N Tantau Ave, Cupertino Taylor St. Bldg.1, < Littleton (gas) < 10420 N Tantau Ave, Cupertino Taylor St. Bldg.2, < Littleton (gas) < 10432 N Tantau Ave, Cupertino 333 South St., < Shrewsbury (gas) < 10435 N Tantau Ave, Cupertino Old-Bolton Rd., Stow < (gas) < 10440 N Tantau Ave, Cupertino < 10501 N Tantau Ave, Cupertino Texas: (Electricity < only) < 10400 Ridgeview Crt., Cupertino 10225 Louetta, < Houston < 10555 Ridgeview Crt., Cupertino 10251 North Fwy., < Houston < 10600 Ridgeview Crt., Cupertino 17111 Jarvis, < Houston < 901 Page Ave., Fremont < 5425 Stevens Creek Blvd, Santa Clara (gas only) < < Energy Management Services will include the supply of gas < and electricity and local utility company bill management services. < < < < II. Contract Term: < < Five (5) year term with the option for Enron to extend for < and additional one (1) year period. < < < III. Estimated Contract Value: (6years) < < Electricity: < State Term Value < Massachusetts $13,267,505 < Texas $49,894,554 < California $30,170,154 < < Gas: < State Term Value < Massachusetts $1,727,956 < California $2,354,178 < Total Contract Value: $97,414,347 < < < Regards, < < Michael Fiore < General Procurement < Procurement Manager REOS & Telecom < Compaq Computer Corporation < PH: (281) 514-1399 < Fax: (281) 514-0686 < michael.fiore@compaq.com < < Message-ID: <212CC57E84B8D111AD780000F84AA0490985369E@mroexc2.tay.cpqcorp.net< From: "Fiore, Michael" <Michael.Fiore@compaq.com< To: "Jordan, Bob" <Bob.Jordan@COMPAQ.com< Cc: "Leach, Renee" <Renee.Leach@COMPAQ.com< Subject: RE: Enron Building Services Novi MI. Date: Thu, 7 Dec 2000 17:22:25 -0600 Sensitivity: Company-Confidential MIME-Version: 1.0 X-Mailer: Internet Mail Service (5.5.2652.78) Content-Type: text/plain; charset="iso-8859-1" Bob, Enron Building Services is currently providing service to Compaq at the following locations: (the contract expires 28-Feb-03 and we are currently spending $6.5M per year). Call me if you need additional information. SCA - Dallas, TX OHF - Detroit, MI ALF - Alpharetta, GA MRO - Marlboro, MA LKG - Littleton, MA SHR - Shrewsbury, MA OGO - Stow, MA TAY - Littleton, MA INI - Indianapolis, IN UMP - Escanaba, MI SWO - Midland, MI KZO - Portage, IN IXC - Carmel, IN FSU - Big Rapids, MI GVS - Allendale, MI MIL - Lansing, MI SCH - Schaumburg, IL CPO - Chicago.IL BNB - Bannockburn, IL LPO - Rockford, IL ILI - Itasca, IL SEO - WA LEX - Lexington, MA CRL - Cambridge, MA RCH - Rocky Hill, CT PHH - Blue Bell, PA PTO - Pittsburgh, PA OPK - Overland Park, KS SLO - Salt Lake City, UT TIG - Salt Lake City, UT MPO - Bloomington, MN DLC - Dallas, TX Regards, Michael Fiore General Procurement Procurement Manager REOS & Telecom Compaq Computer Corporation PH: (281) 514-1399 Fax: (281) 514-0686 michael.fiore@compaq.com -----Original Message----- From: Jordan, Bob Sent: Thursday, December 07, 2000 3:01 PM To: Fiore, Michael Subject: RE: Enron Building Services Novi MI. Sensitivity: Confidential Michael, I left you a voice message today regarding Enron. I'm doing a presentation and I would like to get the amount ($) of contracts we currently have with Enron Services. For example the $97M 5-year contract for power. I understand that we have contracts in the Northeast and West for facilities. Can you provide me with that kind of data? I would appreciate it. My presentation is on the 14th of December. Any questions, please don't hesitate to call. Regards, Bob Jordan Rio Grande Area Director Compaq Computer Corporation Tele #281-927-6350 Fax #281-514-7220 Bob.Jordan@Compaq.com -----Original Message----- From: Earle, Jerry Sent: Monday, October 09, 2000 1:32 PM To: Fiore, Michael Cc: Leach, Renee; Jordan, Bob; Blackmore, Peter; Earle, Jerry Subject: RE: Enron Building Services Novi MI. Sensitivity: Confidential Michael, Thanks for the update. I am OK with your decision not to select Enron (and I also reviewed with Jim Milton). Given that Enron chose not to rebid, I certainly think this is a reasonable decision. It is very important that I (and the Enron account team) stay informed on all of these issues, so thanks again for keeping us in the loop. Regards, Jerry -----Original Message----- From: Fiore, Michael Sent: Wednesday, October 04, 2000 10:59 AM To: Earle, Jerry Cc: Leach, Renee Subject: Enron Building Services Novi MI. Importance: High Sensitivity: Confidential Jerry, As part of our continuing communication with the Compaq/Enron account team, below is an overview of a recent bid analysis for services at Compaq's Novi, MI site. Enron Building Services is the current service provider for Office Services related support. The proposed pricing received by Pitney Bowes is 11.1% or $15,147 lower than the price provided by Enron. Enron has been given the opportunity to revise their pricing but has chose not to. The recommendation is to award the business to Pitney Bowes. Please confirm that you concur with our recommendation. Thanks. ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- ------------ Background: Enron Building Services was providing a facility manager, shipper receiver, receptionist and admin/help desk support for Compaq's Novi, MI site. Compaq recently chose to hire the facility manager as a permanent Compaq employee. Enron Building Services provided Compaq with revised pricing to reflect the modified scope of work. The pricing provided by Enron was 11.1% higher than the price received by Pitney Bowes. The Enron account team has been informed that their pricing is not competitive and they been given the opportunity to lower their price. They have opted not to lower the price. The recommendation of both Real Estate and Procurement is to award the business to Pitney Bowes. Enron Building Services Current Cost: Base cost for services was $190,198.00 Admin/Help Desk $44,787.00 Ship/Rec $35,521.00 Receptionist $38,610.00 Facilities Manager $71,280.00 Mail Van/Car (remote site support) $13,030.00 Management Fee $14,210.00 Total Cost $216,438.00 Compaq hired the facility manager as a badged employee. Enron Building Services Proposed Cost: Base cost for remaining services $128,071.00 Admin/Help Desk $53,940.00 Ship/Rec $35,521.00 Receptionist $38,610.00 Mail Van/Car (deleted) Management Fee $8,324.00 Total Cost $136,395.00 Issue: 20% increase in Admin/Help desk cost. Pitney Bowes has submitted a proposal to provide Admin/Help Desk coverage, Shipper/Receiver, Receptionist for a total cost of. $121,248.00 which is 11.1% less than EBS proposal. Regards, Michael Fiore General Procurement Procurement Manager REOS & Telecom Compaq Computer Corporation PH: (281) 514-1399 Fax: (281) 514-0686 michael.fiore@compaq.com
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