DoD's $119M energy conservation contract with Siemens Government Technologies Inc. awarded for 15 years

Contract Overview

Contract Amount: $119,408,473 ($119.4M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2016-12-30

End Date: 2042-05-01

Contract Duration: 9,253 days

Daily Burn Rate: $12.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ENERGY CONSERVATION MEASURES AT JSMC LIMA, OH IGF::OT::IGF

Place of Performance

Location: LIMA, ALLEN County, OHIO, 45804

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $119.4 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: ENERGY CONSERVATION MEASURES AT JSMC LIMA, OH IGF::OT::IGF Key points: 1. Siemens Government Technologies Inc. secured a long-term, high-value contract for energy conservation measures. 2. The contract's duration of over 15 years suggests a focus on sustained energy efficiency improvements. 3. The firm-fixed-price structure aims to provide cost certainty for the Department of Defense. 4. The award was made under full and open competition, indicating a broad market solicitation. 5. The engineering services sector is critical for implementing complex infrastructure upgrades like energy conservation. 6. The contract's value of approximately $119 million over its term requires careful performance monitoring.

Value Assessment

Rating: good

The contract's value of $119 million over 15 years averages around $7.9 million annually. Benchmarking this against similar large-scale energy conservation projects for federal facilities is challenging without more specific project details. However, the long-term nature suggests a comprehensive approach to energy efficiency, potentially offering good value if significant energy savings are realized and sustained. The firm-fixed-price contract type provides cost predictability for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The presence of 9 bidders (indicated by 'no': 9) suggests a healthy level of competition for this significant engineering services contract. A competitive process like this generally leads to better price discovery and potentially more innovative solutions for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by driving down prices and encouraging a wider range of service providers to compete, ultimately benefiting the government through cost savings and improved service quality.

Public Impact

The Department of Defense is the primary beneficiary, aiming to reduce energy consumption and operational costs at JSMC Lima, OH. The contract will deliver comprehensive energy conservation measures, likely including upgrades to lighting, HVAC, and building envelope systems. The geographic impact is focused on Joint Systems Manufacturing Center (JSMC) Lima, Ohio. The project may involve specialized engineering and construction workforces, potentially creating or sustaining jobs in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 15 years) could lead to scope creep or evolving technology obsolescence if not managed proactively.
Reliance on a single contractor for such an extended period may reduce future competitive opportunities for other firms.
Performance metrics and energy savings verification will be crucial to ensure value for money over the contract's life.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm-fixed-price contract provides cost certainty for the government.
Focus on energy conservation aligns with federal sustainability goals and potential long-term cost reductions.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which is a significant part of the federal procurement landscape, particularly for infrastructure and facility management. The market for energy conservation services is driven by increasing energy costs, federal mandates for efficiency, and the desire for operational cost savings. Comparable spending benchmarks would typically involve analyzing other large-scale energy performance contracts (EPCs) awarded by agencies like the Department of Energy or the General Services Administration.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While Siemens Government Technologies Inc. is likely a large business, the contract's nature as a large-scale engineering service project may involve significant subcontracting opportunities. The extent to which small businesses can participate as subcontractors will depend on the prime contractor's subcontracting plan and the specific services required.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting agency, the Department of the Army, and potentially the Inspector General for the Department of Defense. Performance monitoring, milestone reviews, and verification of energy savings will be key oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements, though specific project details might be sensitive.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Department of Defense Facilities Management
Federal Energy Management Program (FEMP)
Engineering and Architectural Services

Risk Flags

Long-term contract duration
Performance verification complexity
Technological obsolescence risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $119.4 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. ENERGY CONSERVATION MEASURES AT JSMC LIMA, OH IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is SIEMENS GOVERNMENT TECHNOLOGIES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $119.4 million.

What is the period of performance?

Start: 2016-12-30. End: 2042-05-01.

What is the historical spending pattern for energy conservation measures at JSMC Lima, OH prior to this contract?

Information on historical spending for energy conservation measures at JSMC Lima, OH prior to this specific contract award is not directly available in the provided data. This contract, awarded in December 2016 with an end date in May 2042, represents a significant, long-term investment. To understand historical patterns, one would need to access previous contract awards for facility maintenance, energy upgrades, or related services at this specific installation. Such research might involve searching federal procurement databases (like FPDS or SAM.gov) for contracts awarded to various vendors for similar services at JSMC Lima, OH, over a period preceding the 2016 award. Analyzing these past expenditures would provide context on the scale and frequency of previous energy-related investments and identify any trends in spending or technology adoption.

How does the annual average cost of this contract compare to typical energy conservation project costs for similar military facilities?

The annual average cost for this contract is approximately $7.9 million ($119 million / 15 years). Comparing this to typical energy conservation project costs for similar military facilities requires detailed benchmarking data that is not publicly available. However, large-scale Energy Savings Performance Contracts (ESPCs) for federal facilities can range from a few million to tens or even hundreds of millions of dollars, depending on the facility's size, age, energy intensity, and the scope of improvements. Factors influencing cost include the complexity of the systems being upgraded (e.g., HVAC, lighting, renewable energy integration), the required engineering and design work, and the projected energy savings. Given the multi-year duration and comprehensive nature implied by 'energy conservation measures,' an average annual cost in the high single-digit millions for a significant military installation like JSMC Lima, OH, appears plausible within the broader context of federal energy infrastructure investments.

What are the specific energy conservation measures to be implemented under this contract?

The provided data does not specify the exact energy conservation measures (ECMs) to be implemented under this contract. However, typical ECMs for large federal facilities often include upgrades to building envelope (insulation, windows), high-efficiency lighting retrofits (LEDs), modernization of Heating, Ventilation, and Air Conditioning (HVAC) systems, installation of energy-efficient motors and controls, and potentially the integration of renewable energy sources like solar photovoltaic systems. The contract's focus on 'energy conservation' suggests a holistic approach aimed at reducing overall energy consumption and operational costs. The specific measures would be detailed in the contract's statement of work and subsequent task orders, developed by Siemens Government Technologies Inc. in collaboration with the Department of the Army.

What is Siemens Government Technologies Inc.'s track record with similar large-scale federal energy contracts?

Siemens Government Technologies Inc. (SGT) has a substantial track record in delivering large-scale energy and infrastructure projects for the U.S. government, including numerous energy conservation and performance contracts for military installations and federal agencies. SGT is a subsidiary of Siemens AG, a global powerhouse in electrification, automation, and digitalization, which brings extensive expertise and resources. Their portfolio often includes projects involving HVAC upgrades, building automation systems, smart grid technologies, and renewable energy integration. While specific details of past performance on contracts identical to this one require deeper research into federal procurement databases, SGT is recognized as a major player in this market, frequently competing for and winning significant contracts related to facility modernization and energy efficiency across various government sectors.

What are the potential risks associated with a 15-year contract for energy conservation measures?

A 15-year contract for energy conservation measures presents several potential risks. Firstly, technological advancements in energy efficiency could outpace the solutions implemented early in the contract, potentially leading to suboptimal performance or the need for costly retrofits later on. Secondly, the long duration increases the risk of contractor performance degradation or changes in the contractor's business focus. Thirdly, economic fluctuations or changes in federal energy policy could impact the perceived value or necessity of the contract's objectives over its extended term. Finally, ensuring consistent and accurate measurement and verification (M&V) of energy savings over such a long period is complex and requires robust oversight to confirm that the government is realizing the projected financial benefits and that the contractor is meeting its obligations.

How will the success and value for money of this contract be measured over its 15-year lifespan?

The success and value for money of this contract will be primarily measured through rigorous performance monitoring and the verification of energy savings. The contract likely includes specific Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) related to energy reduction targets, system uptime, and operational efficiency. A critical component will be the Measurement and Verification (M&V) plan, which quantifies the actual energy savings achieved compared to a baseline established before the upgrades. Regular performance reviews, site inspections, and financial audits will be conducted by the Department of the Army. The firm-fixed-price nature helps control costs, but demonstrating significant, sustained energy savings relative to the investment will be the ultimate measure of value for taxpayers over the 15-year period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W912DY12R0046

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Siemens Aktiengesellschaft

Address: 2231 CRYSTAL DR STE 700, ARLINGTON, VA, 22202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $244,045,949

Exercised Options: $244,045,949

Current Obligation: $119,408,473

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY15D0050

IDV Type: IDC

Timeline