Siemens Government Technologies awarded $10.6M for energy savings at Cleveland federal buildings, spanning 10 years

Contract Overview

Contract Amount: $10,646,350 ($10.6M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: General Services Administration

Start Date: 2024-01-01

End Date: 2034-12-31

Contract Duration: 4,017 days

Daily Burn Rate: $2.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 16

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: ENERGY SAVINGS PERFORMANCE CONTRACT CELEBREZZE FEDERAL BUILDING AND 2 OTHER BUILDINGS IN CLEVELAND, OH THIS MOD IS ISSUED FOR ADMIN PURPOSES TO FACILITATE CONTINUED CONTRACT PERFORMANCE. 47PF0024F0103 WILL CONTINUE ALL TERMS AND CONDITIONS.

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44114

State: Ohio Government Spending

Plain-Language Summary

General Services Administration obligated $10.6 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: ENERGY SAVINGS PERFORMANCE CONTRACT CELEBREZZE FEDERAL BUILDING AND 2 OTHER BUILDINGS IN CLEVELAND, OH THIS MOD IS ISSUED FOR ADMIN PURPOSES TO FACILITATE CONTINUED CONTRACT PERFORMANCE. 47PF0024F0103 WILL CONTINUE ALL TERMS AND CONDITIONS. Key points: 1. The contract aims to improve energy efficiency and reduce operational costs for federal facilities. 2. Siemens Government Technologies, a significant player in government contracting, secured this award. 3. The contract duration of 10 years suggests a long-term commitment to energy performance. 4. The award is a delivery order under a larger contract, indicating phased implementation. 5. The fixed-price nature of the contract shifts performance risk to the contractor. 6. The contract is for engineering services, focusing on technical solutions for energy management.

Value Assessment

Rating: good

The contract value of $10.6 million over 10 years, averaging $1.06 million annually, appears reasonable for a large federal building complex. Benchmarking against similar Energy Savings Performance Contracts (ESPCs) for federal buildings of comparable size and scope would provide a more precise value assessment. The fixed-price structure suggests that the contractor has committed to delivering specific outcomes within a set budget, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This competitive process is expected to drive better pricing and service offerings. The number of bidders (16) suggests a healthy level of interest and competition for this type of federal contract.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring that the government receives competitive pricing and the best value available in the market.

Public Impact

Federal agencies occupying the Celebrezze Federal Building and two other facilities in Cleveland, OH, will benefit from improved building performance and reduced utility costs. The contract will deliver energy efficiency upgrades and services, potentially including lighting, HVAC, and building automation system improvements. The geographic impact is concentrated in Cleveland, Ohio, supporting local federal operations. The contract is expected to support jobs in engineering, project management, and skilled trades related to energy efficiency implementation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise during implementation.
Ensuring sustained energy savings over the 10-year period requires robust monitoring and verification.
Dependence on a single contractor for a decade could limit future flexibility in adopting new technologies.

Positive Signals

The fixed-price contract structure provides cost certainty for the government.
Full and open competition suggests a strong likelihood of competitive pricing.
The long contract duration allows for comprehensive energy efficiency improvements and sustained savings.

Sector Analysis

This contract falls within the energy services sector, specifically focusing on energy efficiency and performance contracting for federal facilities. The market for ESPCs is robust, driven by government mandates to reduce energy consumption and greenhouse gas emissions. Comparable spending benchmarks for similar projects vary widely based on building size, age, and scope of work, but multi-million dollar contracts are common for large federal installations.

Small Business Impact

While this contract was awarded to Siemens Government Technologies, a large prime contractor, there are opportunities for small businesses to participate as subcontractors. Federal regulations often encourage or mandate subcontracting to small businesses, particularly in areas like specialized engineering, installation, or maintenance services. The extent of small business participation will depend on the prime contractor's subcontracting plan and the availability of qualified small business vendors.

Oversight & Accountability

Oversight for this contract will likely be managed by the General Services Administration (GSA), the contracting agency. The contract's fixed-price nature and performance-based outcomes provide a framework for accountability. Transparency is typically maintained through contract award databases and reporting requirements. The Inspector General's office for the GSA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Federal Building Modernization Programs
Department of Energy Efficiency Initiatives
GSA Public Buildings Service Contracts

Risk Flags

Long contract duration may limit flexibility for adopting newer technologies.
Accuracy of energy savings projections over 10 years is subject to market and usage fluctuations.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $10.6 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. ENERGY SAVINGS PERFORMANCE CONTRACT CELEBREZZE FEDERAL BUILDING AND 2 OTHER BUILDINGS IN CLEVELAND, OH THIS MOD IS ISSUED FOR ADMIN PURPOSES TO FACILITATE CONTINUED CONTRACT PERFORMANCE. 47PF0024F0103 WILL CONTINUE ALL TERMS AND CONDITIONS.

Who is the contractor on this award?

The obligated recipient is SIEMENS GOVERNMENT TECHNOLOGIES INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $10.6 million.

What is the period of performance?

Start: 2024-01-01. End: 2034-12-31.

What is the historical performance of Siemens Government Technologies on similar federal energy efficiency contracts?

Siemens Government Technologies has a significant track record with federal agencies, including numerous Energy Savings Performance Contracts (ESPCs). Their past performance often involves large-scale projects focused on HVAC upgrades, lighting retrofits, and building automation system enhancements across various federal installations. While specific details on past contract performance metrics like achieved savings percentages and adherence to schedule would require deeper analysis of individual contract histories and performance reports, Siemens is generally considered a capable provider in this space. Reviewing past performance evaluations and any reported issues or successes on similar GSA or Department of Defense ESPCs would offer a clearer picture of their reliability and effectiveness in delivering promised energy savings and project outcomes.

How does the annual cost of this contract compare to the estimated energy savings?

The annual cost of this contract is approximately $1.06 million ($10.6 million / 10 years). Energy Savings Performance Contracts (ESPCs) are designed such that the cost of the improvements and services are paid for by the energy savings achieved. Therefore, the contract's value should ideally be less than or equal to the projected energy savings over its lifespan. A detailed analysis would require access to the contractor's energy savings projections and the GSA's independent verification of these projections. Typically, ESPCs aim for savings that comfortably exceed the contract cost, providing a net financial benefit to the government. Without the specific savings calculations, a direct comparison is not possible, but the structure implies that savings are expected to be substantial enough to justify the investment.

What are the primary risks associated with a 10-year fixed-price energy performance contract?

A primary risk with a 10-year fixed-price contract is the potential for unforeseen changes in energy prices or building conditions that could impact the accuracy of the initial savings projections. If energy prices decrease significantly, the realized savings might not be as high as anticipated, potentially making the contract less financially advantageous. Conversely, if energy prices spike unexpectedly, the savings could be greater than projected. Another risk is technological obsolescence; over a decade, newer, more efficient technologies might emerge, but the contract might not easily accommodate them. Contractor performance risk is also present, although mitigated by the fixed-price structure; failure to achieve projected savings could lead to disputes or require renegotiation. Finally, changes in federal building occupancy or usage could alter energy consumption patterns, affecting savings calculations.

What specific energy conservation measures are likely to be implemented under this contract?

Given the contract is for engineering services related to energy efficiency in federal buildings, common measures likely to be implemented include upgrades to HVAC systems (e.g., high-efficiency boilers, chillers, variable speed drives), improvements to building envelope (e.g., insulation, window retrofits), installation of energy-efficient lighting (e.g., LED retrofits), and implementation of advanced building automation and energy management systems. Smart metering and sub-metering to track energy usage more granularly across different building systems are also probable. The specific measures will be determined based on detailed energy audits conducted by Siemens Government Technologies, identifying the most cost-effective opportunities for savings within the Celebrezze Federal Building and the other two specified facilities.

How does the number of bidders (16) influence the potential value for taxpayers?

A high number of bidders, such as 16 in this case, generally indicates robust competition within the market for this type of service. Robust competition typically drives down prices and encourages bidders to offer more favorable terms and innovative solutions to win the contract. For taxpayers, this means the government is more likely to secure the services at a competitive rate, maximizing the value received for the allocated funds. It reduces the risk of paying an inflated price due to a lack of viable alternatives. Therefore, the strong competition suggests a favorable outcome for taxpayer dollars on this contract.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: EQ5P2SS2P1-24-0001

Offers Received: 16

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 2231 CRYSTAL DR STE 700, ARLINGTON, VA, 22202

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

Financial Breakdown

Contract Ceiling: $70,469,439

Exercised Options: $10,646,350

Current Obligation: $10,646,350

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29041

IDV Type: IDC

Timeline