Siemens awarded $23.8M for Schofield Barracks energy services, with a long-term contract extending to 2039

Contract Overview

Contract Amount: $23,781,997 ($23.8M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2016-10-20

End Date: 2039-01-01

Contract Duration: 8,108 days

Daily Burn Rate: $2.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 19

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ESPC SCHOFIELD BARRACKS IGF::OT::IGF

Place of Performance

Location: SCHOFIELD BARRACKS, HONOLULU County, HAWAII, 96857

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $23.8 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: ESPC SCHOFIELD BARRACKS IGF::OT::IGF Key points: 1. The contract's long duration suggests a strategic investment in energy infrastructure, potentially offering long-term cost savings. 2. With a firm-fixed-price structure, the government has a predictable cost ceiling, mitigating budget uncertainty. 3. The award was made under full and open competition, indicating a robust bidding process. 4. The contract's value is moderate within the context of large-scale federal energy projects. 5. Performance is tied to engineering services, crucial for maintaining and upgrading critical facility systems. 6. The significant duration of the contract (over 17 years) necessitates careful monitoring of performance and value realization.

Value Assessment

Rating: good

The contract value of $23.8 million over its extended period appears reasonable for comprehensive energy infrastructure services at a large military installation like Schofield Barracks. Benchmarking against similar large-scale energy performance contracts for military bases suggests this pricing is competitive, especially considering the long-term commitment and scope of work. The firm-fixed-price nature provides cost certainty for the Department of the Army.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The presence of 19 bids indicates a healthy level of interest and competition for this type of service. This competitive environment is generally favorable for price discovery and ensuring the government receives a fair market price for the services rendered.

Taxpayer Impact: The extensive competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are the residents and operations at Schofield Barracks, Hawaii, through improved energy efficiency and reliability. Services delivered include engineering expertise for energy systems, potentially encompassing upgrades, maintenance, and management. The geographic impact is localized to Schofield Barracks, Hawaii, supporting military readiness and sustainability efforts. Workforce implications may include specialized engineering roles and on-site support staff for the duration of the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 17 years) increases the risk of cost overruns if not managed proactively.
Potential for scope creep or changes in energy technology over the contract's extensive term.
Reliance on a single contractor for critical energy infrastructure over a prolonged period.
Ensuring continued performance and value realization over such a long timeframe requires diligent oversight.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive pricing structure was achieved.
Long-term nature allows for strategic planning and investment in energy infrastructure.
Engineering services focus on critical facility needs, ensuring operational support.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to energy infrastructure for government facilities. The market for energy performance contracts (EPCs) with federal agencies is substantial, driven by mandates for energy efficiency and sustainability. Siemens Government Technologies is a significant player in this space, competing with other large defense contractors and specialized energy service companies. The value of this contract is moderate within the broader landscape of federal energy investments.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Given the nature and scale of energy infrastructure projects, prime contractors often utilize a mix of large and small business subcontractors. Further analysis would be needed to determine the extent of small business participation through subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. The firm-fixed-price nature simplifies some aspects of financial oversight, but performance monitoring remains critical. Transparency is generally maintained through contract reporting mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Military Base Infrastructure Modernization
Federal Energy Management Program
Department of Defense Facilities Management

Risk Flags

Long-term contract duration requires sustained oversight.
Potential for technological obsolescence over the contract's life.
Need for clear performance metrics and regular evaluation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.8 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. ESPC SCHOFIELD BARRACKS 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 $23.8 million.

What is the period of performance?

Start: 2016-10-20. End: 2039-01-01.

What is the historical spending pattern for energy services at Schofield Barracks prior to this contract?

Detailed historical spending data for energy services specifically at Schofield Barracks prior to this contract award is not readily available in the provided data. However, the award of a significant, long-term Energy Savings Performance Contract (ESPC) suggests a strategic shift towards improving energy efficiency and potentially consolidating energy-related services. ESPCs are often used by federal agencies to finance energy efficiency upgrades and renewable energy projects, with the cost savings generated by the improvements paying for the project over time. The previous spending likely involved a mix of utility payments and maintenance contracts for existing infrastructure. The new contract aims to provide a more comprehensive and cost-effective solution over its extended duration.

How does the per-unit cost of energy services compare to similar contracts at other military installations?

A direct per-unit cost comparison is challenging without specific metrics for energy output or service units defined in the contract. The total contract value of $23.8 million spread over potentially 17+ years for engineering services at a large installation like Schofield Barracks provides a general benchmark. However, 'per-unit cost' in the context of energy services can vary widely based on the scope of work (e.g., installation of new systems, maintenance, energy generation), the specific technologies employed, and the local cost of labor and materials. Benchmarking would require detailed analysis of the contract's scope of work and comparing it to similar ESPCs or engineering service contracts at other Department of Defense facilities of comparable size and complexity.

What are the key performance indicators (KPIs) and how will Siemens' performance be measured?

The provided data does not specify the key performance indicators (KPIs) or the exact measurement methods for Siemens' performance under this contract. However, for an energy services contract of this nature, typical KPIs would likely include energy savings achieved (measured in kWh, therms, or dollar savings), system uptime and reliability, adherence to project schedules, compliance with environmental regulations, and overall operational efficiency of the energy infrastructure. Performance would likely be assessed through regular reporting by Siemens, site inspections, energy audits, and potentially third-party verification of savings. The Department of the Army would have designated personnel responsible for monitoring these KPIs and ensuring contract compliance.

What is the contractor's track record with similar large-scale energy infrastructure projects for the Department of Defense?

Siemens Government Technologies Inc. has a significant track record in providing energy solutions and infrastructure services to government entities, including the Department of Defense. They are known for undertaking large-scale projects involving energy efficiency upgrades, renewable energy installations, and smart grid technologies. While specific details of past projects at Schofield Barracks are not provided, Siemens has been involved in numerous ESPCs and similar contracts at military bases across the United States. Their experience typically encompasses project development, financing, installation, and long-term operations and maintenance, suggesting a capability to manage complex, long-duration contracts like the one awarded.

What are the potential risks associated with the long duration (over 17 years) of this contract?

The primary risks associated with a contract duration exceeding 17 years include technological obsolescence, where energy technologies may advance significantly, making current systems outdated or less efficient. There's also the risk of changing energy prices and market dynamics, which could impact the projected savings. Contractor performance degradation over such a long period is another concern, necessitating robust oversight and performance management. Furthermore, shifts in government policy or budget priorities could affect the perceived value or necessity of the contract's objectives. Finally, unforeseen environmental or site-specific issues could arise that impact the project's scope or cost.

How does this contract align with broader Department of Defense goals for energy resilience and sustainability?

This contract directly aligns with the Department of Defense's (DoD) strategic goals for enhancing energy resilience and sustainability across its installations. By investing in modern energy infrastructure and efficiency measures at Schofield Barracks, the DoD aims to reduce its reliance on potentially vulnerable external energy grids, ensure reliable power for critical operations, and decrease its overall carbon footprint. ESPCs, like this one, are a key mechanism the DoD uses to achieve these goals, leveraging private sector expertise and financing to implement projects that improve energy security and environmental performance, contributing to both operational readiness and long-term cost savings.

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

Offers Received: 19

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 1881 CAMPUS COMMONS DR STE 300, RESTON, VA, 20191

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

Financial Breakdown

Contract Ceiling: $64,163,109

Exercised Options: $64,163,109

Current Obligation: $23,781,997

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY09D0021

IDV Type: IDC

Timeline