DOJ's FBI contract with NORESCO for building construction valued at $19.5M over 10 years

Contract Overview

Contract Amount: $19,541,152 ($19.5M)

Contractor: Noresco, LLC

Awarding Agency: Department of Justice

Start Date: 2014-09-23

End Date: 2025-09-30

Contract Duration: 4,025 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF ANNUAL ESPC PAYMENT TO NORESCO.

Place of Performance

Location: WESTBOROUGH, WORCESTER County, MASSACHUSETTS, 01581

State: Massachusetts Government Spending

Plain-Language Summary

Department of Justice obligated $19.5 million to NORESCO, LLC for work described as: IGF::OT::IGF ANNUAL ESPC PAYMENT TO NORESCO. Key points: 1. Contract awarded for energy conservation measures, aiming for long-term operational efficiencies. 2. The fixed-price structure provides cost certainty for the FBI. 3. Long contract duration suggests a need for sustained building performance improvements. 4. The contract falls under commercial and institutional building construction, a broad category. 5. Limited competition raises questions about potential overpayment and value for money. 6. The contract's value is moderate within the context of large federal construction projects.

Value Assessment

Rating: fair

The contract's value of $19.5 million over approximately 10 years for energy conservation measures appears reasonable on the surface for a large federal agency like the FBI. However, without specific details on the scope of work, the baseline energy usage, and the projected savings, a definitive value-for-money assessment is challenging. Benchmarking against similar energy performance contracts (ESPCs) for federal buildings of comparable size and complexity would be necessary to determine if the pricing is competitive and if the expected energy savings justify the investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning NORESCO was the only bidder considered. This lack of competition is a significant concern as it limits the government's ability to secure the best possible pricing and terms. Without a competitive bidding process, there is a reduced incentive for the contractor to offer the most cost-effective solutions, potentially leading to higher costs for taxpayers. The justification for a sole-source award should be thoroughly scrutinized.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available in the market, potentially leading to overspending on this contract.

Public Impact

The primary beneficiary is the Federal Bureau of Investigation (FBI), which will see improvements in its building infrastructure and energy efficiency. Services delivered include energy conservation measures, likely encompassing upgrades to HVAC, lighting, and building envelope systems. The geographic impact is localized to the FBI facility managed under this contract in Massachusetts. Workforce implications may include specialized construction and maintenance jobs related to energy efficiency upgrades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Long contract duration without clear performance milestones could lead to complacency.
Potential for scope creep or cost overruns if not managed diligently.

Positive Signals

Focus on energy efficiency aligns with federal sustainability goals.
Fixed-price contract provides budget certainty for the FBI.
NORESCO is a known entity in the energy performance contracting space.
Contract duration allows for long-term planning and realization of energy savings.

Sector Analysis

This contract falls within the broader construction sector, specifically focusing on energy conservation measures for institutional buildings. The market for energy performance contracts (ESPCs) is competitive, with several established players. Federal agencies increasingly utilize ESPCs to upgrade aging infrastructure and reduce operational costs while meeting sustainability mandates. Benchmarking against other federal ESPCs would reveal if NORESCO's pricing and proposed solutions are in line with market standards for similar projects.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the contract was awarded sole-source and the prime contractor is NORESCO, LLC, a large business. There is no indication of small business set-asides or subcontracting plans. This means the direct economic benefit to the small business ecosystem from this specific contract is likely minimal, unless NORESCO engages small businesses as subcontractors without a formal requirement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's internal procurement and contract management offices, as well as the Federal Bureau of Investigation's facilities management. Given the sole-source nature, enhanced scrutiny from oversight bodies like the Government Accountability Office (GAO) or the DOJ Inspector General might be warranted to ensure fair pricing and effective performance. Transparency could be improved by making the sole-source justification publicly accessible.

Related Government Programs

Federal Energy Management Program (FEMP)
Energy Savings Performance Contracts (ESPCs)
Department of Justice Facilities Management
FBI Infrastructure Modernization

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of detailed scope of work and projected savings makes value assessment difficult.
Long contract duration increases risk of contractor underperformance or obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $19.5 million to NORESCO, LLC. IGF::OT::IGF ANNUAL ESPC PAYMENT TO NORESCO.

Who is the contractor on this award?

The obligated recipient is NORESCO, LLC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Bureau of Investigation).

What is the total obligated amount?

The obligated amount is $19.5 million.

What is the period of performance?

Start: 2014-09-23. End: 2025-09-30.

What specific energy conservation measures are included in this contract, and what are the projected energy savings?

The provided data does not detail the specific energy conservation measures (ECMs) included in the $19.5 million contract with NORESCO, nor does it outline the projected energy savings. Typically, ESPCs involve upgrades to HVAC systems, lighting retrofits, building envelope improvements (insulation, windows), and energy management systems. To assess the contract's value, a breakdown of these measures, their associated costs, and the quantifiable energy and operational savings anticipated over the contract's 4025-day (approximately 11-year) duration would be essential. Without this information, it's difficult to validate the 'value for money' aspect beyond the general goal of energy efficiency.

What is the justification for awarding this contract on a sole-source basis to NORESCO?

The data explicitly states the contract type is 'NOT AVAILABLE FOR COMPETITION,' indicating a sole-source award. Federal procurement regulations typically require full and open competition unless specific exceptions apply, such as unique capabilities, urgent needs, or existing infrastructure compatibility. The justification for this sole-source award to NORESCO by the FBI is not provided in the data. A thorough review of the official justification document (e.g., a Justification and Approval, J&A) would be necessary to understand why competition was deemed impractical or impossible, and to assess if the government received fair and reasonable pricing under these circumstances.

How does the per-unit cost or overall contract value compare to similar energy performance contracts for federal buildings?

Benchmarking this $19.5 million contract against similar federal Energy Savings Performance Contracts (ESPCs) is challenging without more specific details on the scope of work and the facilities involved. The contract duration is approximately 11 years (4025 days). The value represents an average annual expenditure of roughly $1.77 million. To perform a meaningful comparison, one would need to identify ESPCs awarded to other contractors for buildings of similar size, age, and function (e.g., office buildings, law enforcement facilities) within the federal government. Factors like the baseline energy consumption, the specific technologies implemented, and the negotiated energy savings guarantees would need to be considered to assess if NORESCO's pricing is competitive.

What is NORESCO's track record with federal energy performance contracts, particularly with the Department of Justice or FBI?

NORESCO, LLC is a well-established Energy Services Company (ESCO) with a significant history of performing Energy Savings Performance Contracts (ESPCs) for federal agencies. While the provided data confirms they hold this specific contract with the FBI, it does not detail their broader track record. A comprehensive assessment would require reviewing past performance evaluations, contract completion history, and any reported issues or successes on previous federal ESPCs awarded to NORESCO. Understanding their experience, particularly with similar agencies or building types, can provide context for their current performance and reliability.

What are the potential risks associated with a long-term, sole-source contract for building construction and energy efficiency?

A long-term, sole-source contract for building construction and energy efficiency presents several risks. Firstly, the lack of competition can lead to inflated prices and reduced incentive for the contractor to innovate or provide optimal value. Secondly, the long duration (over 10 years) increases the risk of contractor underperformance, potential cost overruns if not managed tightly, or the contractor going out of business. Thirdly, technology advancements in energy efficiency might outpace the solutions implemented early in the contract, potentially making the chosen solutions obsolete before the contract ends. Finally, sole-source awards can create an appearance of impropriety or favoritism, potentially undermining public trust.

Are there any specific performance metrics or milestones outlined in the contract to ensure accountability?

The provided data does not specify the performance metrics, milestones, or Key Performance Indicators (KPIs) associated with this contract. For Energy Savings Performance Contracts (ESPCs), it is crucial that the contract includes clear, measurable, achievable, relevant, and time-bound (SMART) goals related to energy savings, operational efficiency, and system performance. Accountability typically hinges on the contractor's ability to meet these guaranteed savings. Without details on these metrics, it is difficult to assess the level of accountability and the mechanisms in place to ensure the FBI receives the expected benefits and value over the contract's lifespan.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 RESEARCH DR STE 400 C, WESTBOROUGH, MA, 01581

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,918,746

Exercised Options: $31,276,036

Current Obligation: $19,541,152

Actual Outlays: $12,199,346

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline