VA VISN 5 ESPC contract awarded to Ameresco Inc. for $18.25M to improve energy efficiency

Contract Overview

Contract Amount: $18,249,812 ($18.2M)

Contractor: Ameresco Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-10-31

End Date: 2026-09-30

Contract Duration: 2,526 days

Daily Burn Rate: $7.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: VETERANS INTEGRATED SERVICE NETWORK (VISN) 5 ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC)

Place of Performance

Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21201

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.2 million to AMERESCO INC for work described as: VETERANS INTEGRATED SERVICE NETWORK (VISN) 5 ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) Key points: 1. Contract aims to reduce energy consumption and operational costs for VA facilities. 2. Ameresco Inc. has a track record in energy performance contracting. 3. The contract is a Delivery Order under a larger ESPC. 4. Performance period extends through September 2026. 5. Focus on energy conservation measures (ECMs) to achieve savings. 6. Potential for significant long-term utility cost reductions for the VA.

Value Assessment

Rating: good

The contract value of $18.25 million for an Energy Savings Performance Contract (ESPC) appears reasonable given the scope of improving energy efficiency across multiple VA facilities. ESPCs are designed to be cost-neutral or cost-saving, with payments tied to verified energy savings. Benchmarking against other ESPCs of similar size and scope would provide a more precise value assessment, but the fixed-price nature of this delivery order suggests a defined scope of work and associated costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of 4 bidders suggests a competitive environment, which generally leads to better pricing and value for the government. The specific details of the bidding process and evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of solutions and drives down costs through market forces, ensuring the government receives the best possible value.

Public Impact

Benefits include reduced utility expenditures for the Department of Veterans Affairs. Services delivered involve the implementation of energy conservation measures. Geographic impact is focused on VA facilities within VISN 5, primarily Maryland. Workforce implications may include specialized technical roles for installation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Ensuring accurate measurement and verification (M&V) of energy savings is crucial for realizing the contract's financial benefits.
Long-term performance of installed energy conservation measures needs to be monitored.
Potential for scope creep or unforeseen technical challenges during implementation.

Positive Signals

Ameresco Inc. is a recognized leader in the energy efficiency sector.
The contract leverages the ESPC model, which is designed for cost savings.
Delivery Order structure allows for phased implementation and management of specific projects.

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. The market for ESPCs is robust, with numerous qualified Energy Service Companies (ESCOs) capable of delivering a wide range of energy conservation measures. This contract fits within the broader federal strategy to achieve sustainability goals and reduce greenhouse gas emissions.

Small Business Impact

This contract was awarded through full and open competition and does not indicate a specific small business set-aside. While the prime contractor is Ameresco Inc., there may be opportunities for small businesses to participate as subcontractors in the installation, maintenance, or supply of components related to the energy conservation measures implemented under this contract. The extent of small business subcontracting would depend on Ameresco's procurement practices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting officers and program managers. The ESPC model inherently includes performance verification mechanisms to ensure savings are realized. Inspector General audits may also be conducted to ensure compliance and prevent fraud, waste, and abuse.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Federal Energy Management Program (FEMP)
Department of Veterans Affairs Facility Management
Utility Energy Efficiency Programs

Risk Flags

Performance Risk: Ensuring projected energy savings are realized.
Technology Risk: Long-term reliability of installed energy conservation measures.
Measurement & Verification (M&V) Accuracy: Potential for miscalculation of savings.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.2 million to AMERESCO INC. VETERANS INTEGRATED SERVICE NETWORK (VISN) 5 ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC)

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 $18.2 million.

What is the period of performance?

Start: 2019-10-31. End: 2026-09-30.

What is Ameresco Inc.'s track record with similar Energy Savings Performance Contracts for federal agencies?

Ameresco Inc. has a significant track record in delivering Energy Savings Performance Contracts (ESPCs) for various federal agencies, including the Department of Defense and other civilian agencies. They specialize in implementing a wide array of energy conservation measures (ECMs) such as lighting upgrades, HVAC system modernizations, building envelope improvements, and renewable energy installations. Their experience often includes managing complex projects across multiple facilities and ensuring compliance with federal energy mandates. Publicly available information and past performance reviews typically highlight their capabilities in project development, financing, construction, and long-term performance verification. While specific contract details are often proprietary, their consistent engagement in the ESPC market suggests a level of established expertise and successful project delivery.

How does the $18.25 million contract value compare to other VA ESPC awards?

The $18.25 million contract value for the VISN 5 ESPC is a substantial investment, reflecting a significant scope of work aimed at improving energy efficiency across multiple VA facilities. To benchmark this value effectively, it would be necessary to compare it against other ESPCs awarded by the VA or other federal agencies of similar size and complexity. Factors influencing ESPC costs include the number and type of facilities, the specific energy conservation measures (ECMs) to be implemented, the duration of the contract, and the projected energy savings. ESPCs are performance-based, meaning the ultimate cost-effectiveness is tied to achieved savings. A contract of this magnitude suggests a comprehensive approach to energy management, potentially involving major upgrades to building systems and infrastructure, which aligns with the typical investment required for such large-scale efficiency projects.

What are the primary risks associated with this type of Energy Savings Performance Contract?

Primary risks associated with this ESPC include the accuracy of energy savings projections, the performance and longevity of installed energy conservation measures (ECMs), and potential changes in facility usage or energy prices. Inaccurate baseline energy use calculations or overly optimistic savings estimates can lead to the contract not meeting its financial objectives. Furthermore, the long-term reliability of new equipment and technologies is a concern; unforeseen maintenance issues or premature equipment failure could impact savings. Changes in occupancy, operational schedules, or utility rate structures at the VA facilities could also affect the actual energy consumption and savings realized. Robust Measurement and Verification (M&V) protocols are critical to mitigate these risks by ensuring savings are accurately tracked and validated throughout the contract period.

How effective are ESPCs generally in achieving their stated energy reduction goals for federal agencies?

Energy Savings Performance Contracts (ESPCs) have generally proven to be an effective mechanism for federal agencies to achieve significant energy reduction goals. The model's inherent structure, where payment is contingent upon verified energy savings, creates a strong incentive for performance. Agencies benefit from facility upgrades and cost savings without upfront capital expenditure, as the ESCO finances the project and is repaid from the savings generated. Numerous studies and government reports have indicated that ESPCs have successfully reduced energy consumption and operational costs across federal facilities. However, effectiveness can vary based on the quality of the ESCO, the thoroughness of the Measurement and Verification (M&V) process, and the agency's engagement in overseeing the contract. When properly structured and managed, ESPCs are a valuable tool for meeting federal energy efficiency and sustainability mandates.

What is the historical spending trend for ESPCs within the Department of Veterans Affairs?

The Department of Veterans Affairs (VA) has consistently utilized Energy Savings Performance Contracts (ESPCs) as a key strategy for improving energy efficiency and reducing operational costs across its vast network of healthcare facilities and administrative buildings. Historical spending on ESPCs by the VA has generally trended upwards over the years, reflecting a growing commitment to sustainability and cost-saving initiatives, as well as the availability of ESPC vehicles through the Energy Policy Act of 2005. The VA's large real estate portfolio presents significant opportunities for energy conservation. While specific annual spending figures fluctuate based on project cycles and available funding, the VA remains one of the largest federal agencies leveraging ESPCs to meet its energy reduction targets and modernize its infrastructure.

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

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: $84,230,859

Exercised Options: $84,230,859

Current Obligation: $18,249,812

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