DOJ's $69.7M energy efficiency contract with Siemens awarded via full and open competition

Contract Overview

Contract Amount: $69,699,323 ($69.7M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: Department of Justice

Start Date: 2016-04-14

End Date: 2024-12-05

Contract Duration: 3,157 days

Daily Burn Rate: $22.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF ESPC PROJECTS FOR FCI ASHLAND AND FMC LEXINGTON

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20534

State: District of Columbia Government Spending

Plain-Language Summary

Department of Justice obligated $69.7 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: IGF::OT::IGF ESPC PROJECTS FOR FCI ASHLAND AND FMC LEXINGTON Key points: 1. Contract aims to improve energy efficiency and reduce utility costs at federal correctional facilities. 2. Siemens Government Technologies Inc. secured the award, indicating a competitive selection process. 3. The contract duration spans over 8 years, suggesting a long-term commitment to facility upgrades. 4. Performance is tied to delivery orders, allowing for phased implementation and cost management. 5. The fixed-price nature of the contract shifts performance risk to the contractor. 6. Focus on engineering services suggests a need for specialized expertise in facility modernization.

Value Assessment

Rating: good

The contract value of $69.7 million over approximately 8 years represents a significant investment in facility modernization. Benchmarking this against similar energy savings performance contracts (ESPCs) is challenging without specific project scope details. However, the fixed-price structure suggests Siemens is incentivized to deliver cost-effectively. The Bureau of Prisons' commitment to ESPCs indicates a recognized value in leveraging private sector expertise for energy efficiency improvements, potentially leading to substantial long-term operational savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting multiple bidders were considered. This approach typically fosters competitive pricing and encourages contractors to offer their best value. The presence of 5 bids (no: 5) indicates a healthy level of interest and competition for this type of service, which is beneficial for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by driving down costs through market forces. It provides assurance that the selected contractor offers the most advantageous terms and pricing available.

Public Impact

Federal Prison System facilities, specifically FCI Ashland and FMC Lexington, will benefit from modernized infrastructure and reduced energy consumption. Improved energy efficiency is expected to lead to lower operational costs for the Bureau of Prisons. The project supports the government's broader goals of sustainability and reducing its environmental footprint. Specialized engineering and technical services will be delivered, potentially involving local labor for installation and maintenance phases. Enhanced facility conditions may indirectly improve the living and working environment within the correctional institutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to scope creep or unforeseen cost increases if not managed diligently.
Reliance on a single large contractor for extensive facility upgrades may limit flexibility in adopting new technologies.
The effectiveness of energy savings hinges on accurate baseline data and ongoing performance monitoring.

Positive Signals

Awarded through full and open competition, indicating competitive pricing and value.
Fixed-price contract structure transfers cost overrun risk to the contractor.
Long-term commitment allows for comprehensive and integrated energy efficiency solutions.
Focus on engineering services suggests a well-defined scope and technical approach.

Sector Analysis

This contract falls within the Engineering Services (NAICS 541330) sector, specifically related to energy efficiency and facility management. The market for ESPCs is robust, driven by government mandates and the desire for operational cost savings. Siemens Government Technologies is a significant player in this space, competing with other large engineering and energy service firms. Spending on facility modernization and energy efficiency across federal agencies is substantial, reflecting a continuous need to upgrade aging infrastructure and meet sustainability targets.

Small Business Impact

The contract was awarded to Siemens Government Technologies Inc., a large business. There is no explicit indication of small business set-asides within the provided data. However, large prime contractors are often required to meet subcontracting goals for small businesses. The extent to which Siemens will utilize small businesses for specialized services or installation work will determine the direct impact on the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Bureau of Prisons. The fixed-price nature and delivery order structure allow for phased oversight and payment based on milestones. Performance monitoring and verification of energy savings are critical oversight functions. While no specific Inspector General (IG) jurisdiction is mentioned, the DOJ IG typically oversees agency programs and contracts for waste, fraud, and abuse.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Federal Bureau of Prisons Facility Management
Department of Justice Engineering Services
Federal Building Modernization Programs
Government Sustainability Initiatives

Risk Flags

Long contract duration may introduce technology obsolescence risk.
Performance verification is critical to ensure realized energy savings.
Potential for scope creep if facility needs change significantly over 8 years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $69.7 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. IGF::OT::IGF ESPC PROJECTS FOR FCI ASHLAND AND FMC LEXINGTON

Who is the contractor on this award?

The obligated recipient is SIEMENS GOVERNMENT TECHNOLOGIES INC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $69.7 million.

What is the period of performance?

Start: 2016-04-14. End: 2024-12-05.

What is the historical spending pattern for energy efficiency projects within the Federal Prison System?

The Federal Prison System (FPS), under the Bureau of Prisons (BOP), has historically invested in facility upgrades and operational efficiencies. While specific historical spending on energy efficiency projects is not detailed here, the BOP has utilized various contracting mechanisms, including ESPCs, to address aging infrastructure and reduce utility costs. The award of this $69.7 million contract to Siemens indicates a significant, multi-year commitment to energy efficiency, suggesting a strategic focus on this area. Past investments likely varied based on facility needs, available funding, and evolving energy management policies. Analyzing prior ESPC awards or similar modernization contracts within the BOP would provide a clearer picture of the scale and frequency of such investments over time.

How does the per-unit cost of Siemens' services compare to market rates for similar engineering services in facility modernization?

Determining a precise per-unit cost comparison for Siemens' services is difficult without detailed breakdowns of the work performed under the delivery orders (e.g., cost per square foot retrofitted, cost per system upgraded). The contract is a Firm Fixed Price (FFP) award valued at $69.7 million over approximately 8 years. Benchmarking requires comparing specific deliverables and their associated costs against industry standards for similar projects. Factors like the age and condition of the facilities (FCI Ashland and FMC Lexington), the complexity of the required upgrades, and regional labor costs would influence pricing. Siemens, as a major government contractor, likely submitted a competitive bid under the full and open competition. However, without access to the detailed proposal and cost structure, a direct per-unit cost comparison to market rates remains speculative.

What are the key performance indicators (KPIs) used to measure the success of this energy efficiency contract?

Key performance indicators (KPIs) for this energy efficiency contract would primarily focus on measurable reductions in energy consumption and associated costs. Common KPIs for ESPCs include: 1) Guaranteed energy savings (e.g., kilowatt-hours reduced, therms saved), 2) Cost savings achieved against a baseline (e.g., percentage reduction in utility bills), 3) Project completion milestones met on schedule, 4) System performance and reliability post-upgrade, and 5) Compliance with environmental and sustainability targets. The contract's success hinges on the accurate measurement and verification (M&V) of these savings over the contract's duration. The Bureau of Prisons would likely track these KPIs to ensure Siemens meets its contractual obligations and delivers the projected financial and environmental benefits.

What is the track record of Siemens Government Technologies Inc. in delivering similar large-scale energy efficiency projects for federal agencies?

Siemens Government Technologies Inc. has a substantial track record in delivering complex energy efficiency and infrastructure modernization projects for various federal agencies. They are known for providing a wide range of solutions, including building automation, HVAC upgrades, lighting retrofits, and renewable energy integration. Their experience often includes managing large ESPCs, similar to the one awarded by the Department of Justice. Past projects have likely involved significant investments and long-term performance guarantees. While specific details of past performance related to FCI Ashland and FMC Lexington are not provided, Siemens' established presence in the federal market suggests they possess the technical expertise, financial capacity, and project management capabilities required for such undertakings. Government contract databases and performance reports would offer more granular insights into their specific project successes and challenges.

What are the potential risks associated with a long-duration contract (over 8 years) for facility upgrades?

Long-duration contracts for facility upgrades, like this 8-year ESPC, present several potential risks. Firstly, technology can rapidly evolve; by the end of the contract, the installed systems might be less cutting-edge than newer available options, potentially limiting future upgrade paths. Secondly, unforeseen facility issues or changes in operational needs could arise, requiring contract modifications that might increase costs or extend timelines. Thirdly, contractor performance can degrade over time, or key personnel may change, impacting project execution. Fourthly, economic fluctuations or changes in government funding priorities could affect the perceived value or necessity of the project. Finally, accurately projecting energy prices and savings over such an extended period involves inherent uncertainty, potentially leading to discrepancies between guaranteed and actual savings.

How does this contract align with broader federal government initiatives on sustainability and climate resilience?

This contract strongly aligns with broader federal government initiatives focused on sustainability and climate resilience. Executive Orders and federal agency directives increasingly mandate reductions in greenhouse gas emissions, energy consumption, and water usage across government facilities. ESPCs, like this one, are a key mechanism for achieving these goals by leveraging private sector investment and expertise to implement energy conservation measures. By improving the energy efficiency of correctional facilities, the Department of Justice is directly contributing to the federal government's commitment to reducing its environmental footprint. The project supports goals related to energy independence, operational cost savings, and the modernization of critical infrastructure to be more resilient to climate change impacts.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › Energy R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 1881 CAMPUS COMMONS DR, RESTON, VA, 20191

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

Financial Breakdown

Contract Ceiling: $69,699,323

Exercised Options: $69,699,323

Current Obligation: $69,699,323

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