DOE's $75.7M Oak Ridge National Laboratory ESPC contract awarded to Johnson Controls Government Systems, LLC
Contract Overview
Contract Amount: $75,739,124 ($75.7M)
Contractor: Johnson Controls Government Systems, LLC
Awarding Agency: Department of Energy
Start Date: 2008-07-30
End Date: 2033-02-28
Contract Duration: 8,979 days
Daily Burn Rate: $8.4K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ESPC FOR THE OAK RIDGE NATIONAL LABORATORY
Place of Performance
Location: OAK RIDGE, ANDERSON County, TENNESSEE, 37830
Plain-Language Summary
Department of Energy obligated $75.7 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC for work described as: ESPC FOR THE OAK RIDGE NATIONAL LABORATORY Key points: 1. Contract awarded via competitive delivery order, suggesting a degree of market vetting. 2. Long duration of nearly 25 years indicates a strategic, long-term investment in facility modernization. 3. FIRM FIXED PRICE contract type offers cost certainty for the government. 4. The contract's focus on Energy Savings Performance Contracts (ESPCs) aligns with federal goals for energy efficiency and sustainability. 5. Performance period extends significantly beyond the initial award date, requiring ongoing monitoring. 6. The contract is not set aside for small businesses, indicating a focus on large-scale service providers.
Value Assessment
Rating: good
The total contract value of $75.7 million over its extended period suggests a substantial investment in energy efficiency upgrades. Benchmarking ESPC contracts is complex due to varying project scopes and energy price fluctuations. However, the firm fixed-price nature provides a degree of cost control. The long duration implies a comprehensive approach to energy management, potentially yielding significant long-term savings if performance targets are met.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had the opportunity to bid. The specific number of bidders is not provided, but the competitive nature suggests that the Department of Energy sought to leverage market forces to secure favorable terms and pricing for this significant energy performance project.
Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering price discovery and potentially leading to lower costs compared to sole-source procurements.
Public Impact
The primary beneficiaries are the Oak Ridge National Laboratory facilities, which will receive upgrades aimed at improving energy efficiency and reducing operational costs. Services delivered include energy conservation measures, potentially encompassing upgrades to lighting, HVAC systems, building envelopes, and renewable energy integration. The geographic impact is localized to Oak Ridge, Tennessee, where the national laboratory is situated. Workforce implications may include specialized technical jobs for installation, maintenance, and energy management related to the upgrades.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration increases the risk of scope creep or changes in technology rendering initial investments less effective over time.
- Reliance on a single contractor for an extended period could lead to vendor lock-in or reduced incentive for continuous innovation.
- The success of the contract is heavily dependent on accurate energy savings projections and the contractor's ability to achieve them.
Positive Signals
- The firm fixed-price structure provides cost certainty and shifts performance risk to the contractor.
- The competitive award process suggests that initial pricing and proposed solutions were vetted against market alternatives.
- The focus on energy efficiency aligns with federal sustainability mandates, potentially leading to significant long-term operational cost reductions and environmental benefits.
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 financing and expertise. The market for ESPCs is robust, with numerous qualified Energy Service Companies (ESCOs) capable of undertaking large-scale projects. This contract for Oak Ridge National Laboratory fits within the broader trend of federal facilities modernization and sustainability initiatives.
Small Business Impact
This contract was not awarded as a small business set-aside, nor is there an indication of specific small business subcontracting goals in the provided data. The scale and nature of an ESPC for a major national laboratory typically require the resources and expertise of larger, established firms. This suggests that opportunities for small businesses would likely be through subcontracting, if any, rather than direct prime contract awards.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. The firm fixed-price nature and the long performance period necessitate robust monitoring of performance metrics, energy savings, and compliance with contract terms. Inspector General jurisdiction would apply to any investigations of fraud, waste, or abuse related to the contract.
Related Government Programs
- Energy Savings Performance Contracts (ESPCs)
- Federal Energy Management Program (FEMP)
- Oak Ridge National Laboratory Operations
- Department of Energy Facility Modernization
Risk Flags
- Long contract duration may increase risk of technological obsolescence.
- Performance verification over extended period requires robust monitoring.
- Reliance on energy price projections introduces financial uncertainty.
Tags
energy-savings-performance-contract, johnson-controls-government-systems, department-of-energy, oak-ridge-national-laboratory, tennessee, competitive-delivery-order, firm-fixed-price, engineering-services, facility-modernization, energy-efficiency, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $75.7 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC. ESPC FOR THE OAK RIDGE NATIONAL LABORATORY
Who is the contractor on this award?
The obligated recipient is JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $75.7 million.
What is the period of performance?
Start: 2008-07-30. End: 2033-02-28.
What is the historical spending pattern for ESPCs at Oak Ridge National Laboratory?
Historical spending data for ESPCs specifically at Oak Ridge National Laboratory is not directly available in the provided snippet. However, the Department of Energy, as a whole, has a significant portfolio of ESPC projects across its various facilities. These contracts are typically long-term, often spanning 10-25 years, and their value can range from millions to hundreds of millions of dollars depending on the scope of energy conservation measures implemented. Agencies often use multiple award contracts or task orders under indefinite delivery, indefinite quantity (IDIQ) vehicles to procure ESPC services, allowing for flexibility and competition over time. Analyzing past ESPC performance at similar national laboratories or large federal facilities could provide a benchmark for understanding typical investment levels and savings achieved.
How does the pricing structure of this contract compare to other similar ESPC awards?
The provided data indicates a 'FIRM FIXED PRICE' (FFP) contract type for this Energy Savings Performance Contract (ESPC). FFP is a common, though not universal, pricing structure for ESPCs, especially for the performance contract itself. It offers cost certainty to the government by fixing the total price for the defined scope of work and guaranteed energy savings. However, the 'value for money' comparison is complex. ESPCs are performance-based, meaning the contractor is paid based on verified energy savings. While the FFP sets the total contract value, the actual government outlay is tied to achieved savings. Benchmarking requires comparing the guaranteed savings against the contract price, the project's payback period, and the contractor's proposed financing costs, which are not detailed here. Other ESPCs might use different pricing models, such as cost-plus-incentive-fee, or have varying levels of government financing, making direct price comparisons challenging without detailed project-specific information.
What are the key performance indicators (KPIs) used to measure the success of this contract?
The specific Key Performance Indicators (KPIs) for this Energy Savings Performance Contract (ESPC) are not detailed in the provided data. However, for ESPCs, success is typically measured by the achievement of guaranteed energy and operational cost savings. This involves rigorous measurement and verification (M&V) processes, often following established protocols like the International Performance Measurement and Verification Protocol (IPMVP). KPIs would likely include metrics such as: total energy consumed (before and after upgrades), cost savings realized per utility type (electricity, gas, water), reduction in greenhouse gas emissions, and return on investment (ROI) or payback period for the implemented measures. The contractor's adherence to the project schedule and the successful commissioning of energy conservation measures would also be critical performance indicators.
What is the track record of Johnson Controls Government Systems, LLC in delivering similar energy performance contracts?
Johnson Controls Government Systems, LLC is a well-established entity with a significant presence in the building controls and energy efficiency sector. They have a history of undertaking large-scale energy performance contracts for government facilities, including military bases, federal agencies, and public institutions. Their track record generally involves providing a range of services from energy audits and retrofitting to ongoing facility management and optimization. While specific details on past ESPC performance metrics (like savings achieved vs. guaranteed) for this particular contractor are not in the provided data, their longevity and repeated awards suggest a capacity to meet contractual obligations. Prospective analysis would involve reviewing past performance evaluations, contract awards, and any publicly available reports on their project outcomes.
What are the potential risks associated with the long duration (nearly 25 years) of this contract?
The extended duration of nearly 25 years for this Energy Savings Performance Contract (ESPC) presents several potential risks. Firstly, technological obsolescence is a significant concern; energy-efficient technologies evolve rapidly, and measures installed early in the contract might become outdated before its completion, potentially reducing long-term savings or requiring costly upgrades. Secondly, changes in energy prices (electricity, natural gas) can impact the accuracy of the initial savings projections, potentially leading to lower-than-expected financial returns for the government or the contractor. Thirdly, the long-term nature increases the risk of contractor performance degradation or financial instability over such an extended period. Finally, shifts in federal energy policy or budget priorities could affect the perceived value or necessity of the contract's ongoing components.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 507 E. MICHIGAN ST., MILWAUKEE, WI, 53202
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $250,977,299
Exercised Options: $250,977,299
Current Obligation: $75,739,124
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: DEAM3698OR22645
IDV Type: IDC
Timeline
Start Date: 2008-07-30
Current End Date: 2033-02-28
Potential End Date: 2033-02-28 00:00:00
Last Modified: 2025-04-30
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