VA's $18.6M Energy Savings Contract with TLS-CES Services I, LLC awarded under full and open competition

Contract Overview

Contract Amount: $18,634,851 ($18.6M)

Contractor: Tls-Ces Services I, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-05-18

End Date: 2027-01-11

Contract Duration: 2,429 days

Daily Burn Rate: $7.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: OTHER FUNCTIONS - LITTLE ROCK VAMC, NORTH LITTLE ROCK VAMC - ENERGY SAVINGS PERFORMANCE CONTRACT.

Place of Performance

Location: NORTH LITTLE ROCK, PULASKI County, ARKANSAS, 72114

State: Arkansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.6 million to TLS-CES SERVICES I, LLC for work described as: OTHER FUNCTIONS - LITTLE ROCK VAMC, NORTH LITTLE ROCK VAMC - ENERGY SAVINGS PERFORMANCE CONTRACT. Key points: 1. The contract aims to achieve energy savings, indicating a focus on operational efficiency and sustainability. 2. Awarded under full and open competition, suggesting a competitive bidding process that could lead to better pricing. 3. The contract duration of approximately 2429 days (over 6 years) allows for long-term performance monitoring and realization of savings. 4. The fixed-price nature of the contract shifts performance risk to the contractor. 5. The contract is for engineering services, supporting infrastructure improvements. 6. The geographic focus is Arkansas, potentially impacting local jobs and businesses.

Value Assessment

Rating: good

The contract value of $18.6 million for energy savings performance over approximately 6.7 years appears reasonable for a project of this scope. Benchmarking against similar Energy Savings Performance Contracts (ESPCs) would provide a more precise value-for-money assessment. The fixed-price structure is generally favorable for the government, ensuring cost certainty. However, without specific details on the projected energy savings and the contractor's proposed solutions, a definitive assessment of cost-effectiveness is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' which implies that while sources were initially excluded, the final award was made through a broad competitive process. The presence of 3 bids suggests a moderate level of competition. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions. The specific reasons for excluding certain sources prior to the final competition could influence the overall competitive landscape.

Taxpayer Impact: A competitive award process generally benefits taxpayers by driving down costs and encouraging efficiency. The fact that multiple bids were received suggests that the government likely secured a fair market price for the engineering services and anticipated energy savings.

Public Impact

The Department of Veterans Affairs facilities in Little Rock and North Little Rock will benefit from improved energy efficiency and potentially reduced utility costs. The contract will deliver engineering services focused on identifying and implementing energy-saving measures. The geographic impact is primarily within Arkansas, potentially supporting local engineering and construction jobs during implementation. The project contributes to the VA's broader sustainability goals and potentially improves the operational environment for veterans and staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if projected energy savings are not realized, despite the fixed-price structure.
Dependence on contractor expertise for accurate savings projections and effective implementation.
Limited transparency into the specific technologies and methodologies to be employed.
Risk of scope creep if project requirements are not clearly defined and managed.
Potential for delays in project completion impacting the timeline for savings realization.

Positive Signals

Awarded through full and open competition, indicating a potentially robust selection process.
Fixed-price contract shifts performance risk to the contractor.
Long contract duration allows for sustained focus on energy efficiency improvements.
Focus on energy savings aligns with government sustainability initiatives.
Contractor (TLS-CES SERVICES I, LLC) is experienced in energy performance contracting.

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, driven by federal mandates for sustainability and cost reduction. This contract fits within the broader energy services sector, specifically focusing on engineering and implementation for energy efficiency upgrades within government facilities.

Small Business Impact

The contract data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this particular award. While the prime contractor is TLS-CES SERVICES I, LLC, there is no explicit information regarding subcontracting goals for small businesses. Further investigation into the contractor's subcontracting plan would be necessary to assess the impact on the small business ecosystem.

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 may conduct audits or investigations related to contract performance and financial management. Transparency is facilitated through contract award databases, but detailed project implementation plans and performance reports may not be publicly accessible. Accountability is driven by the contract terms, performance metrics, and payment schedules tied to verified energy savings.

Related Government Programs

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

Risk Flags

Potential for savings shortfall
Contractor performance risk
Accuracy of baseline data and M&V plan
Scope creep potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.6 million to TLS-CES SERVICES I, LLC. OTHER FUNCTIONS - LITTLE ROCK VAMC, NORTH LITTLE ROCK VAMC - ENERGY SAVINGS PERFORMANCE CONTRACT.

Who is the contractor on this award?

The obligated recipient is TLS-CES SERVICES I, LLC.

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 $18.6 million.

What is the period of performance?

Start: 2020-05-18. End: 2027-01-11.

What is the track record of TLS-CES SERVICES I, LLC in delivering similar energy savings performance contracts for federal agencies?

TLS-CES SERVICES I, LLC has a history of performing Energy Savings Performance Contracts (ESPCs). Information available through federal procurement databases indicates prior awards and performance in this area. To fully assess their track record, a deeper dive into past project performance, client satisfaction, and adherence to savings guarantees would be beneficial. Analyzing the success of their previous ESPCs, including the magnitude of savings achieved and the duration over which they were sustained, would provide crucial context for evaluating their capability to deliver on the VA contract. Specific details on project scope, technologies implemented, and any disputes or challenges encountered in prior contracts would further inform this assessment.

How does the awarded contract value compare to industry benchmarks for similar energy efficiency projects in federal facilities?

The $18.6 million contract value for an Energy Savings Performance Contract (ESPC) over approximately 6.7 years needs to be benchmarked against similar projects to assess value for money. ESPC costs are typically tied to the scope of work, the types of energy conservation measures (ECMs) implemented, and the projected energy savings. Factors such as the size and condition of the facilities, the complexity of the existing systems, and the prevailing market rates for engineering and construction services in Arkansas would influence the cost. Without specific details on the ECMs planned and the baseline energy consumption, a precise comparison is difficult. However, the fixed-price nature suggests the contractor has factored in all costs and risks associated with delivering the agreed-upon savings.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include the potential for projected energy savings not being fully realized, leading to a shortfall in financial returns for the VA. Performance risk is largely borne by the contractor due to the fixed-price structure, but inadequate implementation or unforeseen technical challenges could still impact the project. There's also a risk related to the accuracy of the baseline energy consumption data and the contractor's measurement and verification (M&V) plan. Mitigation strategies likely involve robust contract terms, clear performance metrics, regular progress reviews, and a comprehensive M&V process overseen by the VA. The contractor's expertise and the competitive bidding process also serve as risk mitigation factors, selecting a capable firm likely to deliver.

What is the expected impact of this contract on the VA's overall energy consumption and sustainability goals?

This contract is expected to contribute significantly to the VA's energy consumption reduction and sustainability goals by implementing energy conservation measures at the Little Rock and North Little Rock VAMC facilities. ESPCs are designed to achieve measurable energy savings, which directly translates to lower utility bills and a reduced carbon footprint. The specific impact will depend on the types of measures installed (e.g., HVAC upgrades, lighting retrofits, building envelope improvements) and their effectiveness. Over the contract's duration, these improvements should lead to sustained operational cost savings and help the VA meet federal mandates for energy efficiency and greenhouse gas reduction.

How has federal spending on energy savings performance contracts evolved over the past five years, and where does this contract fit within that trend?

Federal spending on Energy Savings Performance Contracts (ESPCs) has generally shown a steady or increasing trend over the past five years, driven by congressional mandates and agency commitments to improve energy efficiency and reduce operational costs. Agencies like the Department of Defense, General Services Administration, and the Department of Energy are major users of ESPCs. This $18.6 million VA contract is a significant award within this category, reflecting the agency's investment in modernizing its facilities and achieving energy resilience. Its value aligns with mid-to-large-sized ESPC projects typically awarded to address substantial facility needs and generate considerable savings.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA701-17-R-0072

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4733 KIBLER RD, VAN BUREN, AR, 72956

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $23,281,754

Exercised Options: $23,281,754

Current Obligation: $18,634,851

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline