DoD's $34M renewable energy contract with Johnson Controls faces scrutiny over long duration and limited competition
Contract Overview
Contract Amount: $34,050,349 ($34.1M)
Contractor: Johnson Controls Government Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2012-09-29
End Date: 2034-06-01
Contract Duration: 7,915 days
Daily Burn Rate: $4.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: RENEWABLE ENERGY SYSTEMS
Place of Performance
Location: FORT BUCHANAN, GUAYNABO County, PUERTO RICO, 00934
Plain-Language Summary
Department of Defense obligated $34.1 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC for work described as: RENEWABLE ENERGY SYSTEMS Key points: 1. Contract awarded for renewable energy systems, indicating a focus on sustainable infrastructure. 2. Long performance period of over 20 years raises questions about adaptability to technological advancements. 3. Sole-source award suggests potential lack of competitive bidding, impacting price discovery. 4. The contract's value, while significant, needs benchmarking against similar renewable energy projects. 5. Performance context is limited without specific details on deliverables and success metrics. 6. Sector positioning within engineering services highlights the complexity of integrated energy solutions.
Value Assessment
Rating: fair
The contract's total value of $34 million over a 20-year period averages approximately $1.7 million per year. Benchmarking this against similar renewable energy system contracts is challenging without more specific details on the scope of work, such as the type and scale of systems installed. The long duration could lead to inefficiencies or outdated technology if not managed proactively. However, for large-scale, long-term infrastructure projects, such durations can sometimes reflect the lifecycle of the assets being deployed.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded as a sole-source action, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific circumstances like follow-on work to a previous contract. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple offerors.
Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to ensure the most cost-effective solution is selected.
Public Impact
The Department of the Army is the primary beneficiary, receiving renewable energy systems. Services delivered likely include the design, installation, and maintenance of renewable energy infrastructure. Geographic impact is focused on Puerto Rico, potentially supporting military installations in the region. Workforce implications could involve specialized technicians for renewable energy system deployment and upkeep.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 20 years) may not align with rapid technological advancements in renewable energy.
- Sole-source award limits competitive pressure, potentially impacting cost-effectiveness for taxpayers.
- Lack of detailed performance metrics makes it difficult to assess the true value and effectiveness of the contract.
- The specific nature of 'renewable energy systems' is broad and could encompass various technologies with differing cost and performance profiles.
Positive Signals
- Addresses the Department of Defense's strategic goals for energy resilience and sustainability.
- Focus on renewable energy aligns with broader government initiatives to reduce carbon footprint.
- Long-term commitment suggests a significant and potentially critical infrastructure need being addressed.
- Award to a known entity (Johnson Controls) might imply a level of trust or established relationship for complex systems.
Sector Analysis
The renewable energy sector is a rapidly growing market driven by environmental concerns and government mandates. This contract falls within the engineering services sub-sector, specifically related to energy infrastructure. The market for renewable energy systems is diverse, encompassing solar, wind, geothermal, and other technologies. Large-scale government contracts like this can represent significant portions of a company's revenue and influence market dynamics. Comparable spending benchmarks would typically involve analyzing the cost per megawatt or per system installed for similar government or commercial projects.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting no specific small business subcontracting goals were mandated within this award. This means that small businesses are unlikely to be direct beneficiaries of this particular contract, and their involvement would depend on Johnson Controls' own subcontracting decisions, which are not explicitly detailed here.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Given the long duration, periodic reviews and performance assessments would be crucial. Transparency might be limited due to the sole-source nature, but contract modifications, performance reports, and payment data should be accessible through federal procurement databases. The Inspector General's office for the Department of Defense could investigate any allegations of fraud, waste, or abuse.
Related Government Programs
- Department of Defense Energy Resilience and Sustainability
- Renewable Energy Procurement
- Engineering Services Contracts
- Puerto Rico Infrastructure Projects
Risk Flags
- Long contract duration
- Sole-source award
- Lack of detailed performance metrics
- Potential for technological obsolescence
Tags
energy, renewable-energy, department-of-defense, department-of-the-army, puerto-rico, engineering-services, sole-source, long-term-contract, fixed-price, government-contracting
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.1 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC. RENEWABLE ENERGY SYSTEMS
Who is the contractor on this award?
The obligated recipient is JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $34.1 million.
What is the period of performance?
Start: 2012-09-29. End: 2034-06-01.
What specific types of renewable energy systems are being procured under this contract, and what are their expected performance metrics?
The provided data abbreviates the description as 'RENEWABLE ENERGY SYSTEMS' without specifying the exact technologies (e.g., solar panels, wind turbines, battery storage). Consequently, detailed performance metrics such as expected energy output (kilowatt-hours), efficiency ratings, or lifespan of individual components are not available. Understanding these specifics is crucial for a thorough value assessment and for comparing this contract to industry benchmarks. Without this granular information, it's difficult to ascertain if the procured systems represent the most advanced or cost-effective solutions available in the market over the contract's extensive 20-year duration.
How does the $34 million contract value compare to similar renewable energy system installations for federal agencies, particularly in similar climates or geographic regions?
Benchmarking the $34 million contract value requires detailed comparison with similar projects. Factors such as the scale of installation (e.g., total capacity in megawatts), the specific technologies deployed, and the geographic location significantly influence costs. For instance, renewable energy projects in regions with high solar irradiance or consistent wind patterns might have different cost structures. Given this contract is for Puerto Rico, comparisons should ideally focus on projects in similar tropical or island environments, which can present unique logistical and environmental challenges. Without access to a database of comparable federal contracts with detailed scope and pricing, a precise value-for-money assessment is difficult. However, the average annual spend of approximately $1.7 million over 20 years provides a baseline for further investigation.
What is the justification for awarding this contract as a sole-source action, and what risks does this pose to cost-effectiveness?
Sole-source awards are typically justified when only one responsible source can satisfy the agency's needs, often due to proprietary technology, unique capabilities, or urgent requirements where competition is not feasible. For this renewable energy systems contract, the justification for a sole-source award to Johnson Controls Government Systems, LLC is not detailed in the provided data. This lack of competition inherently poses a risk to cost-effectiveness, as it eliminates the potential for price reductions through competitive bidding. Taxpayers may end up paying a premium compared to what might have been achieved in a fully competed environment. A thorough review would require understanding the specific circumstances that precluded competition.
What are the potential risks associated with a contract duration extending beyond 20 years for renewable energy systems?
A contract duration of over 20 years for renewable energy systems presents several potential risks. Firstly, the technology landscape in renewable energy evolves rapidly; systems installed today might be significantly outdated or less efficient by the end of the contract term. Secondly, maintenance and repair costs could escalate over time, especially if specialized parts for older systems become scarce or expensive. Thirdly, long-term contracts may not adequately account for changes in energy market prices or regulatory environments. Finally, the initial technology selection might prove suboptimal over such an extended period, potentially locking the government into a less advantageous solution than could have been chosen with more flexibility.
What oversight mechanisms are in place to ensure performance and accountability for this long-term, sole-source contract?
Oversight for a long-term, sole-source contract like this typically involves robust program management and contract administration by the awarding agency (Department of the Army). Key mechanisms would include regular performance reviews, milestone tracking, quality assurance checks, and potentially independent technical assessments. Given the sole-source nature, emphasis would be placed on ensuring the contractor meets all contractual obligations and delivers the specified systems effectively. Financial oversight would involve monitoring expenditures against the contract value and ensuring compliance with payment terms. The Inspector General's office may also conduct audits or investigations if concerns arise regarding waste, fraud, or abuse.
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: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W912DY08R0019
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 507 E. MICHIGAN ST., MILWAUKEE, WI, 53202
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $60,314,181
Exercised Options: $60,314,181
Current Obligation: $34,050,349
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W912DY09D0017
IDV Type: IDC
Timeline
Start Date: 2012-09-29
Current End Date: 2034-06-01
Potential End Date: 2034-06-01 00:00:00
Last Modified: 2025-07-30
More Contracts from Johnson Controls Government Systems, LLC
- 200112!076614!1700!C7408 !naval Facilities Engineering Com!daca8797d0069 !a!n!*!n!ejp3 !20010927!20070630!076020440!076020440!006092860!n!johnson Controls Government SY!507 E Michigan Street !milwaukee !wi!53201!58310!111!06!port Hueneme Naval C!ventura !california!+000003192000!n!n!000000000000!r499!other Professional Services !S1 !services !2000!NOT Discernable or Classified !541330!*!*!5!A!S! !*!*!*!B!*!*!A! !A !U!J!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !z!a!a!a!000!a!b!n! ! ! ! ! ! !0001! — $175.8M (Department of Defense)
- Energy Savings Performance Contract for Hanford 200 and 200 Area — $130.5M (Department of Energy)
- Espc for the OAK Ridge National Laboratory — $75.7M (Department of Energy)
- National Capital Region 11 Energy Savings Performance Contract for the Installation of Energy Conservation Measures and Long Term Measurement and Verification Services — $64.8M (General Services Administration)
- Espc AT Naval Station Norfolk. Construction and Performance Period Services for Distributed Generation (co-Generation Plant) — $62.8M (Department of Defense)
View all Johnson Controls Government Systems, LLC federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)