Energy savings contract for WV mine academy awarded to RWE Clean Energy Solutions for $4.45M

Contract Overview

Contract Amount: $4,454,424 ($4.5M)

Contractor: RWE Clean Energy Solutions, Inc.

Awarding Agency: Department of Labor

Start Date: 2016-12-20

End Date: 2041-02-26

Contract Duration: 8,834 days

Daily Burn Rate: $504/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) FOR THE MINE ACADEMY IN BEAVER, WEST VIRGINIA

Place of Performance

Location: BEAVER, RALEIGH County, WEST VIRGINIA, 25813

State: West Virginia Government Spending

Plain-Language Summary

Department of Labor obligated $4.5 million to RWE CLEAN ENERGY SOLUTIONS, INC. for work described as: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) FOR THE MINE ACADEMY IN BEAVER, WEST VIRGINIA Key points: 1. Contract aims to improve energy efficiency and reduce operational costs. 2. Long-term performance contract suggests potential for sustained savings. 3. Fixed-price structure shifts some performance risk to the contractor. 4. Competition level indicates a potentially competitive bidding process. 5. Contract duration extends over 20 years, requiring long-term monitoring. 6. Focus on energy infrastructure upgrades for a government facility.

Value Assessment

Rating: good

The contract value of $4.45 million for an Energy Savings Performance Contract (ESPC) appears reasonable given the 20-year duration and the scope of work likely involving significant infrastructure upgrades. Benchmarking ESPC costs is complex as it depends heavily on the specific facility's energy baseline and the scope of improvements. However, the fixed-price nature suggests that the contractor has assessed the risks and costs associated with achieving the guaranteed energy savings. Without specific details on the energy savings projected or the baseline energy consumption, a precise value-for-money assessment is challenging, but the long-term nature implies a focus on lifecycle cost reduction.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With 6 bidders, this suggests a healthy level of competition for the ESPC. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions. The presence of multiple bidders implies that the government likely received a range of proposals, allowing for selection of the best value based on technical merit and price.

Taxpayer Impact: Full and open competition with multiple bidders is beneficial for taxpayers as it drives down costs through market forces and encourages innovative solutions, ultimately leading to better value for public funds.

Public Impact

The Mine Academy in Beaver, West Virginia, will benefit from modernized and more efficient energy systems. Services delivered include energy conservation measures and potentially renewable energy integration. Geographic impact is localized to the Mine Academy facility in West Virginia. Workforce implications may include specialized jobs for installation and maintenance of energy efficiency technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 20 years) requires sustained oversight to ensure performance guarantees are met.
Complexity of energy savings calculations can make performance verification challenging.
Reliance on a single contractor for a long period may limit future flexibility.
Potential for scope creep or unforeseen technical challenges over the contract's life.

Positive Signals

Focus on energy efficiency aligns with government sustainability goals.
Fixed-price contract provides cost certainty for the government.
Multiple bidders indicate a competitive market for ESPC services.
Long-term nature allows for significant infrastructure improvements and sustained savings.

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 to implement energy conservation measures. The market for ESPCs is robust, with numerous qualified Energy Service Companies (ESCOs) competing for these long-term agreements. This contract fits within the broader sector of energy services and facility management for government and commercial clients, aiming to achieve measurable energy reductions and cost savings.

Small Business Impact

This contract was awarded to RWE Clean Energy Solutions, Inc., and there is no indication of a small business set-aside. The contract value and nature suggest it is likely beyond the scope typically awarded to small businesses directly as prime contractors for such comprehensive projects. However, the prime contractor may engage small businesses for subcontracting opportunities related to specific components or services required for the energy efficiency upgrades.

Oversight & Accountability

Oversight for this ESPC would typically involve the Department of Labor's Office of the Assistant Secretary for Administration and Management (OASAM), which is responsible for facility management and energy programs. Accountability measures are built into the ESPC structure through guaranteed energy savings. Transparency is generally maintained through reporting requirements on energy usage and savings. The Inspector General's office may have jurisdiction for audits and investigations related to contract performance and financial integrity.

Related Government Programs

Federal Energy Management Program (FEMP)
Energy Independence and Security Act (EISA)
Department of Labor Facility Management
Energy Conservation Measures

Risk Flags

Long-term contract duration requires sustained oversight.
Performance verification complexity for energy savings.
Potential for technological obsolescence over 20 years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $4.5 million to RWE CLEAN ENERGY SOLUTIONS, INC.. IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) FOR THE MINE ACADEMY IN BEAVER, WEST VIRGINIA

Who is the contractor on this award?

The obligated recipient is RWE CLEAN ENERGY SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $4.5 million.

What is the period of performance?

Start: 2016-12-20. End: 2041-02-26.

What specific energy conservation measures are included in this contract?

The provided data does not detail the specific energy conservation measures (ECMs) to be implemented under this Energy Savings Performance Contract (ESPC). Typically, ESPCs involve a range of upgrades such as lighting retrofits, HVAC system improvements, building envelope enhancements (insulation, windows), water conservation measures, and installation of energy-efficient equipment. The exact scope would have been defined in the technical proposal and subsequent contract negotiations between RWE Clean Energy Solutions, Inc. and the Department of Labor, tailored to the specific needs and energy usage patterns of the Mine Academy in Beaver, West Virginia. A detailed review of the contract documents would be necessary to identify the precise ECMs.

How does the projected energy savings compare to the contract cost?

The provided data does not include information on the projected energy savings or the baseline energy consumption of the Mine Academy. ESPCs are structured such that the contractor guarantees a certain level of energy savings, which are then used to pay back the investment over the contract term. The contract value is $4.45 million over approximately 20 years. To assess value for money, one would need to compare the total guaranteed savings over the contract's life against this cost, factoring in the time value of money and the risk premium. Without these figures, a direct comparison is not possible, but the long-term nature suggests that savings are expected to exceed costs significantly to provide a return on investment for the government.

What is the track record of RWE Clean Energy Solutions, Inc. in delivering ESPCs?

The provided data identifies RWE Clean Energy Solutions, Inc. as the contractor but does not offer details on their specific track record or past performance on similar Energy Savings Performance Contracts (ESPCs). A comprehensive assessment would require reviewing their portfolio of completed ESPCs, client testimonials, performance metrics from previous projects, and any history of disputes or contract issues. RWE is part of the larger RWE Group, a global energy company, which suggests they have significant resources and experience in the energy sector. However, their specific success rate and capabilities in delivering guaranteed savings for federal ESPCs would need independent verification through sources like past performance evaluations or industry databases.

What are the risks associated with a 20-year energy savings contract?

A 20-year Energy Savings Performance Contract (ESPC) carries several risks. Firstly, technological obsolescence is a concern; energy-efficient technologies may advance significantly over two decades, potentially making current installations outdated. Secondly, changes in energy prices (both fossil fuels and electricity) can impact the actual savings realized, potentially affecting the payback period or the contractor's profitability if not adequately hedged. Thirdly, facility usage patterns or building operations might change, altering energy consumption in ways not initially foreseen. Finally, long-term performance monitoring and verification require sustained commitment and expertise from both the government and the contractor to ensure savings guarantees are met consistently.

How does this contract compare to other federal ESPCs in terms of size and duration?

The contract value of $4.45 million and a duration of approximately 20 years place this ESPC within a moderate range for federal projects. ESPCs can vary widely, with smaller projects focusing on specific upgrades costing hundreds of thousands, while large-scale campus or agency-wide retrofits can run into tens or even hundreds of millions of dollars and extend for 20-25 years. The duration is typical for ESPCs, as it allows sufficient time for the energy savings to recoup the upfront investment in energy conservation measures. The number of bidders (6) suggests a competitive market for projects of this scale.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 SUMMIT LAKE DR STE 210, VALHALLA, NY, 10595

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

Financial Breakdown

Contract Ceiling: $11,921,172

Exercised Options: $11,921,172

Current Obligation: $4,454,424

Actual Outlays: $3,456,712

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29032

IDV Type: IDC

Timeline