DOE's $8.8M Energy Savings Contract with Johnson Controls Shows Long-Term Commitment
Contract Overview
Contract Amount: $8,829,394 ($8.8M)
Contractor: Johnson Controls Government Systems, LLC
Awarding Agency: Department of Energy
Start Date: 2009-09-22
End Date: 2030-01-31
Contract Duration: 7,436 days
Daily Burn Rate: $1.2K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: ENERGY SAVINGS PERFORMANCE CONTRACT FOR Y-12 SITE OFFICE - YSO.
Place of Performance
Location: OAK RIDGE, ANDERSON County, TENNESSEE, 37831
Plain-Language Summary
Department of Energy obligated $8.8 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC for work described as: ENERGY SAVINGS PERFORMANCE CONTRACT FOR Y-12 SITE OFFICE - YSO. Key points: 1. Contract awarded for energy efficiency upgrades, aiming for long-term cost reductions. 2. The competitive nature of the award suggests a potentially favorable price point. 3. A long performance period indicates a focus on sustained energy management. 4. The contract's scope is within engineering services, supporting facility operations. 5. Performance is tied to energy savings, a key metric for value. 6. The award is a delivery order under a larger contract vehicle.
Value Assessment
Rating: good
This contract, valued at approximately $8.8 million, is for energy savings performance at the Y-12 Site Office. While specific benchmarking data for this exact type of energy savings contract at this specific site is not readily available, the fixed-price nature of the award suggests a defined cost for the services. The long duration (over 12 years) implies a commitment to achieving and sustaining energy savings, which can be a good indicator of value if targets are met. Comparing it to similar ESPC contracts across federal agencies would provide a more robust value assessment, but the competitive award process is a positive sign.
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 competition details, such as the number of bidders and the evaluation criteria, are not provided in the summary data. However, a competitive award process generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition awards.
Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by fostering price competition among qualified contractors.
Public Impact
The primary beneficiaries are the Department of Energy and its Y-12 Site Office, which will see improved energy efficiency. Services delivered include upgrades and retrofits aimed at reducing energy consumption and operational costs. The geographic impact is localized to the Y-12 Site Office in Tennessee. The contract supports the federal government's broader goals of energy conservation and sustainability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 12 years) could lead to complacency if not actively managed.
- Reliance on a single contractor for an extended period might limit future innovation or cost-saving opportunities.
- The effectiveness of energy savings is contingent on accurate baseline measurements and ongoing performance verification.
Positive Signals
- Awarded through a competitive process, suggesting potential for good value.
- Focus on energy savings aligns with federal sustainability mandates.
- Long-term nature allows for sustained operational improvements and cost efficiencies.
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 are typically awarded to Energy Service Companies (ESCOs) that finance the project and are repaid through the energy savings achieved. The market for ESPCs is significant, with numerous federal agencies utilizing them. This contract fits within the broader energy services sector, specifically focusing on facility modernization and operational efficiency.
Small Business Impact
The provided data does not indicate whether this contract included small business set-asides or subcontracting requirements. Typically, large ESPC contracts may involve opportunities for small businesses in specialized areas of construction, installation, or maintenance. Further analysis would be needed to determine the specific impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. Inspector General oversight is also a standard mechanism for federal contracts to ensure accountability and prevent fraud, waste, and abuse. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and savings verification details may not always be publicly disclosed.
Related Government Programs
- Energy Savings Performance Contracts (ESPCs)
- Department of Energy Facility Operations
- Federal Energy Management Program
Risk Flags
- Long-term contract duration requires sustained oversight.
- Accuracy of baseline energy usage is critical for savings verification.
- Potential for equipment degradation impacting long-term savings.
- Contractor's ongoing financial viability over 12+ years.
Tags
energy-savings, performance-contract, johnson-controls-government-systems, department-of-energy, y-12-site-office, tennessee, competitive-delivery-order, engineering-services, firm-fixed-price, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $8.8 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC. ENERGY SAVINGS PERFORMANCE CONTRACT FOR Y-12 SITE OFFICE - YSO.
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 $8.8 million.
What is the period of performance?
Start: 2009-09-22. End: 2030-01-31.
What is the historical spending trend for energy savings performance contracts at the Y-12 Site Office or similar DOE facilities?
Analyzing historical spending on ESPCs at the Y-12 Site Office or comparable Department of Energy (DOE) facilities is crucial for understanding the scale and frequency of such investments. Without specific historical data for Y-12, we can look at broader DOE trends. DOE has been a significant user of ESPCs for decades, leveraging them to meet federal energy efficiency mandates and reduce operational costs across its vast portfolio of research, production, and administrative sites. Spending can fluctuate based on appropriations, identified savings opportunities, and the lifecycle of existing infrastructure. For instance, major infrastructure upgrades or new energy efficiency technologies could spur increased ESPC activity. Benchmarking against similar large federal sites (e.g., other national laboratories or production facilities) would reveal if the $8.8 million for this Y-12 contract is in line with typical investments for comparable scopes of work and facility sizes.
How does the projected energy savings compare to the contract value and duration?
To assess the value proposition of this $8.8 million Energy Savings Performance Contract (ESPC), a detailed comparison between the projected energy savings and the contract's total value and duration is necessary. ESPCs are designed such that the accumulated energy savings over the contract's life (ending January 31, 2030) should ideally exceed the total cost of the project, including financing and contractor fees. The contract duration of over 12 years (from September 22, 2009) provides a substantial window to realize these savings. A key metric would be the 'savings-to-investment ratio' (SIR) or the 'simple payback period'. If the annual savings significantly outweigh the prorated annual cost, and the total savings are projected to surpass the $8.8 million investment well before the contract end date, it indicates strong value. Conversely, if savings are marginal or barely cover the investment, the value proposition weakens. Without the specific savings projections, a definitive assessment is challenging, but the competitive award suggests an expectation of positive returns.
What specific energy conservation measures (ECMs) are included in this contract?
The provided summary data does not specify the exact Energy Conservation Measures (ECMs) included in this $8.8 million contract for the Y-12 Site Office. Typically, ESPCs encompass a range of upgrades such as lighting retrofits (e.g., LED conversions), HVAC system improvements (e.g., high-efficiency boilers, chillers, controls), building envelope enhancements (e.g., insulation, window upgrades), water conservation measures, and potentially renewable energy installations. The specific ECMs are determined through an energy audit conducted by the contractor (Johnson Controls Government Systems, LLC) and negotiated with the agency. The selection of ECMs is driven by their potential for measurable energy savings, cost-effectiveness, and alignment with the facility's operational needs and the agency's sustainability goals. Understanding the mix of ECMs would allow for a more granular assessment of the contract's technical scope and potential impact.
What is Johnson Controls Government Systems, LLC's track record with similar ESPC contracts for the Department of Energy?
Johnson Controls Government Systems, LLC has a significant track record in delivering Energy Savings Performance Contracts (ESPCs) for federal agencies, including the Department of Energy (DOE). As a major player in building efficiency and controls, they have undertaken numerous projects aimed at reducing energy consumption and operational costs in government facilities. Their experience likely encompasses a wide array of ECMs and facility types, similar to the Y-12 Site Office. Assessing their specific performance on past DOE contracts, particularly those involving large-scale site operations or similar energy-intensive facilities, would provide insight into their capabilities, reliability, and success in achieving guaranteed savings. Publicly available contract databases and agency performance reports can offer details on their past project outcomes, client satisfaction, and adherence to contract terms, which are important factors in evaluating their suitability for this long-term Y-12 contract.
Are there any performance risks or challenges associated with this type of long-term energy savings contract?
Yes, there are several performance risks and challenges associated with long-term Energy Savings Performance Contracts (ESPCs) like this one. A primary risk is the accuracy of the baseline energy consumption measurement; if the baseline is set too high, actual savings may appear greater than they are. Conversely, if the baseline is too low, the contractor might struggle to meet guaranteed savings. Another challenge is ensuring the continued effectiveness of installed Energy Conservation Measures (ECMs) over the contract's extended duration (over 12 years). Equipment degradation, changes in facility usage, or inadequate maintenance could reduce savings. Furthermore, the contractor's financial stability and commitment over such a long period are critical. Changes in energy prices can also impact the financial model, potentially affecting the realization of savings. Finally, effective government oversight is essential to verify savings, manage scope changes, and ensure the contractor fulfills all obligations.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 2
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: $53,965,120
Exercised Options: $53,965,120
Current Obligation: $8,829,394
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: DEAM3698OR22645
IDV Type: IDC
Timeline
Start Date: 2009-09-22
Current End Date: 2030-01-31
Potential End Date: 2030-01-31 00:00:00
Last Modified: 2026-01-28
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