VA awards $27M energy savings contract to Ameresco Inc. for Bronx facility

Contract Overview

Contract Amount: $27,000,447 ($27.0M)

Contractor: Ameresco Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-03-15

End Date: 2041-11-01

Contract Duration: 8,632 days

Daily Burn Rate: $3.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF OTHER FUNCTIONS - ENERGY SAVINGS PERFORMANCE CONTRACT FOR VISN 2 BRONX IN BRONX, NY

Place of Performance

Location: BRONX, BRONX County, NEW YORK, 10468

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $27.0 million to AMERESCO INC for work described as: IGF::OT::IGF OTHER FUNCTIONS - ENERGY SAVINGS PERFORMANCE CONTRACT FOR VISN 2 BRONX IN BRONX, NY Key points: 1. Contract aims to achieve significant energy cost reductions and operational efficiencies. 2. Performance period extends over 13 years, indicating a long-term commitment to energy management. 3. The contract utilizes a firm-fixed-price structure, shifting performance risk to the contractor. 4. Competition was full and open, suggesting a potentially competitive bidding process. 5. The engineering services NAICS code points to specialized technical expertise required for the project. 6. Delivery order award type suggests this is part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a standalone order.

Value Assessment

Rating: good

The contract value of $27 million over approximately 13 years suggests a substantial investment in energy infrastructure upgrades. Benchmarking against similar Energy Savings Performance Contracts (ESPCs) is challenging without specific project scope details, but the duration and value are typical for large federal facilities. The firm-fixed-price nature implies Ameresco bears the risk of cost overruns, which can be a positive indicator for the government if the contractor is experienced and estimates are accurate. The government's payment is contingent on verified energy savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 4 bidders identified, this suggests a reasonable level of competition for this specialized service. A competitive process generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. Multiple bidders increase the likelihood of securing a fair price and innovative solutions.

Public Impact

The primary beneficiaries are the Department of Veterans Affairs (VA) and its facilities in the Bronx, NY, through reduced utility costs and improved building performance. The contract will deliver energy conservation measures, potentially including upgrades to lighting, HVAC systems, and building controls. Geographic impact is focused on the VA's facilities in the Bronx, New York. The project may involve specialized engineering and construction workforce, potentially creating or sustaining jobs in the New York area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long performance period (over 13 years) could lead to contractor lock-in if not managed carefully.
Reliance on energy savings projections requires robust verification mechanisms to ensure actual savings are realized.
Firm-fixed-price contracts can sometimes lead to scope creep if not clearly defined upfront.
Potential for unforeseen technical challenges in older federal facilities requiring specialized expertise.

Positive Signals

Firm-fixed-price structure transfers performance risk to the contractor.
Full and open competition suggests a competitive environment leading to potentially better value.
Long-term contract duration allows for sustained energy efficiency improvements and operational cost reductions.
Focus on energy savings aligns with federal sustainability goals and reduces environmental impact.

Sector Analysis

Energy Savings Performance Contracts (ESPCs) are a key mechanism for federal agencies to improve energy efficiency and reduce utility costs without upfront capital investment. These contracts leverage private sector expertise and financing to implement energy conservation measures. The market for ESPCs is significant, with numerous qualified Energy Service Companies (ESCOs) competing for these long-term agreements. This contract fits within the broader federal energy management sector, aiming to achieve cost savings and meet sustainability mandates.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is there explicit information regarding subcontracting plans for small businesses. Given the specialized nature of energy performance contracting and the significant value, it is possible that larger, established firms like Ameresco Inc. are the primary awardees. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this project.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. The Inspector General's office for the VA would have jurisdiction for audits and investigations. Transparency is facilitated through contract award databases and reporting requirements for energy savings verification. Accountability is built into the firm-fixed-price structure and the requirement for demonstrated energy savings.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Federal Energy Management Program (FEMP)
Department of Veterans Affairs Facility Management
Engineering Services Contracts

Risk Flags

Long contract duration requires sustained oversight.
Reliance on projected savings necessitates robust verification.
Firm-fixed-price can limit flexibility if scope needs adjustment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $27.0 million to AMERESCO INC. IGF::OT::IGF OTHER FUNCTIONS - ENERGY SAVINGS PERFORMANCE CONTRACT FOR VISN 2 BRONX IN BRONX, NY

Who is the contractor on this award?

The obligated recipient is AMERESCO INC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $27.0 million.

What is the period of performance?

Start: 2018-03-15. End: 2041-11-01.

What specific energy conservation measures are included in this contract, and what are the projected savings for each?

The provided data does not detail the specific energy conservation measures (ECMs) included in this contract or their projected savings. Typically, ESPCs involve a range of upgrades such as LED lighting retrofits, HVAC system modernizations, building envelope improvements, water conservation measures, and renewable energy installations. The projected savings for each ECM are crucial for verifying the contract's performance and ensuring the government receives the expected financial benefits. A thorough review of the contract's Performance Work Statement (PWS) and the contractor's proposal would be necessary to ascertain these details. The total contract value of $27 million suggests a comprehensive suite of upgrades across the facility.

How does the $27 million contract value compare to other VA ESPCs or similar federal energy projects?

The $27 million contract value for this VA ESPC is substantial, indicating a significant scope of work for the Bronx facility. Comparing it directly requires access to a database of similar VA ESPCs, which is not publicly available in detail. However, federal ESPCs can range from a few million to tens of millions of dollars, depending on the size and complexity of the facility being retrofitted. Larger federal ESPCs, especially those involving major infrastructure overhauls or multiple buildings, can exceed $100 million. This contract appears to be in the upper-middle range for a single facility ESPC, suggesting a comprehensive energy efficiency upgrade program.

What is Ameresco Inc.'s track record with the VA and other federal agencies regarding ESPCs?

Ameresco Inc. is a well-established Energy Service Company (ESCO) with a significant track record in delivering ESPCs for federal agencies, including the Department of Veterans Affairs. They have been involved in numerous projects across various government departments, focusing on energy efficiency, renewable energy, and infrastructure upgrades. Their experience typically includes managing complex projects from design through implementation and verification of savings. A review of past performance evaluations and contract awards for Ameresco would provide a more detailed understanding of their specific performance history with the VA and other federal entities, including their success in meeting savings guarantees and project timelines.

What are the key performance indicators (KPIs) used to measure the success of this energy savings contract?

Key performance indicators (KPIs) for this ESPC would primarily revolve around the verified energy and water savings achieved against a baseline established at the contract's outset. These savings are typically measured in terms of utility cost reductions (electricity, natural gas, water). Other potential KPIs could include operational cost savings beyond utilities (e.g., reduced maintenance), improvements in facility comfort and functionality, and adherence to project schedules and budgets. The contract likely specifies a Measurement and Verification (M&V) plan, which outlines the methodologies and reporting frequency for tracking these KPIs. The government's payment is often tied directly to the achievement of these savings targets.

What is the historical spending trend for energy efficiency projects at this specific VA facility or within VISN 2?

The provided data does not include historical spending trends for energy efficiency projects at this specific VA facility or within VISN 2. To assess this, one would need to analyze past VA budget allocations and contract awards related to facility upgrades, energy retrofits, and maintenance for the Bronx facility and potentially other facilities within VISN 2. Understanding historical spending patterns can provide context for the current $27 million investment, indicating whether it represents a significant increase or a continuation of previous efforts. It could also reveal if previous energy efficiency initiatives have been undertaken and their relative success.

What are the potential risks associated with a 13-year firm-fixed-price contract for energy savings, and how are they mitigated?

A significant risk with a long-term, firm-fixed-price ESPC is the potential for the contractor to underperform or for unforeseen technological obsolescence or changes in energy prices to impact savings projections. Mitigation strategies typically include a robust Measurement and Verification (M&V) plan that independently verifies savings, clear contract language defining performance standards and remedies for non-performance, and potentially periodic reviews or adjustments to the contract if major unforeseen circumstances arise. The firm-fixed-price nature shifts cost overrun risk to the contractor, but it also means the government is obligated to pay the fixed price regardless of actual savings unless specific performance clauses are invoked. The long duration allows for amortization of upfront investment but requires sustained oversight.

Industry Classification

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

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 111 SPEEN ST STE 410, FRAMINGHAM, MA, 01701

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

Financial Breakdown

Contract Ceiling: $106,495,579

Exercised Options: $106,495,579

Current Obligation: $27,000,447

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29029

IDV Type: IDC

Timeline