DOT Awards $15.1M Energy Conservation Contract to NORESCO, LLC for Lighting and Chiller Upgrades

Contract Overview

Contract Amount: $27,924,851 ($27.9M)

Contractor: Noresco, LLC

Awarding Agency: Department of Transportation

Start Date: 2001-08-30

End Date: 2023-03-01

Contract Duration: 7,853 days

Daily Burn Rate: $3.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: ENERGY CONSERVATION SERVICES IAW DO EFP#2001-01 AND DO PRICE SCHEDULES SCHEDULE DO-1 ANNUAL CONTRACTOR PAYMENTS SCHEDULE DO-2 IMPLEMENTATION PRICE BY ECM: PROJECT DEVELOPMENT ENERGY SURVEYS = $295,847.00 ENERGY EFFICIENT LIGHTING UPGRADE = $1,149,335.00 CHILLER INTERCONNECTION&CONTROL = $2,252,564.00 WATER FIXTURE UPGRADE = $319,144 SCHEDULE DO-3 PERFORMANCE PERIOD CASH FLOW SCHEDULE DO-4 FIRST YEAR ENERGY AND COST SAVINGS BY ECM TECHNOLOGY CATEGORY AND DELIVERY ORDER SCHEDULE DO-5 ANNUAL CANCELLATION CEILING SCHEDULE TOTAL AMOUNT: $15,129,555.00 (TO BE FUNDED INCREMENTALLY

Place of Performance

Location: GREAT NECK, NASSAU County, NEW YORK, 11024

State: New York Government Spending

Plain-Language Summary

Department of Transportation obligated $27.9 million to NORESCO, LLC for work described as: ENERGY CONSERVATION SERVICES IAW DO EFP#2001-01 AND DO PRICE SCHEDULES SCHEDULE DO-1 ANNUAL CONTRACTOR PAYMENTS SCHEDULE DO-2 IMPLEMENTATION PRICE BY ECM: PROJECT DEVELOPMENT ENERGY SURVEYS = $295,847.00 ENERGY EFFICIENT LIGHTING UPGRADE = $1,149,335.00 CHILLER INTERCONNECTIO… Key points: 1. Contract focuses on energy conservation measures, including lighting and chiller upgrades, with significant implementation costs. 2. NORESCO, LLC, the sole awardee, will provide services under a firm-fixed-price contract. 3. The contract spans over 20 years, with incremental funding and a total ceiling of $15.1 million. 4. Competition was full and open, but the specific impact on price discovery for this long-term contract requires further analysis.

Value Assessment

Rating: fair

The contract's total amount is $15,129,555.00. Specific per-unit costs for individual ECMs are provided, but a direct comparison to similar contracts is difficult without more detailed scope and performance data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition. However, the long duration and incremental funding structure may impact price discovery over time, potentially leading to less competitive pricing in later years.

Taxpayer Impact: Taxpayers are expected to benefit from energy and cost savings over the contract's lifespan, though the exact return on investment is not detailed.

Public Impact

Significant investment in energy efficiency upgrades for federal facilities. Potential for long-term operational cost reductions through energy conservation. Contract duration raises questions about sustained value and adaptation to new technologies. Focus on specific technologies like lighting and chillers suggests targeted efficiency improvements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 20 years) may not reflect current market prices or technological advancements.
Incremental funding could lead to budget uncertainty or scope creep.
Lack of detailed performance metrics and ROI analysis makes value assessment challenging.
Sole awardee for a long period could indicate limited market engagement or specific expertise required.

Positive Signals

Contract aims to achieve energy and cost savings.
Full and open competition was utilized for the initial award.
Specific implementation costs for various ECMs are itemized.

Sector Analysis

This contract falls within the Engineering Services sector, specifically focusing on energy conservation. Benchmarks for similar long-term energy service contracts vary widely based on scope, technology, and agency.

Small Business Impact

The data indicates that small businesses were not directly involved as the prime contractor. Further analysis would be needed to determine if small businesses participated as subcontractors.

Oversight & Accountability

The contract's long duration and incremental funding necessitate robust oversight to ensure performance, cost control, and adherence to original objectives. Tracking actual savings against projections is crucial for accountability.

Related Government Programs

Engineering Services
Department of Transportation Contracting
Maritime Administration Programs

Risk Flags

Long contract duration (over 20 years) increases risk of obsolescence and market irrelevance.
Incremental funding may lead to budget overruns or scope creep.
Lack of detailed performance metrics and ROI makes value assessment difficult.
Potential for contractor lock-in due to specialized services and long-term relationship.
Limited visibility into subcontractor participation, especially regarding small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $27.9 million to NORESCO, LLC. ENERGY CONSERVATION SERVICES IAW DO EFP#2001-01 AND DO PRICE SCHEDULES SCHEDULE DO-1 ANNUAL CONTRACTOR PAYMENTS SCHEDULE DO-2 IMPLEMENTATION PRICE BY ECM: PROJECT DEVELOPMENT ENERGY SURVEYS = $295,847.00 ENERGY EFFICIENT LIGHTING UPGRADE = $1,149,335.00 CHILLER INTERCONNECTION&CONTROL = $2,252,564.00 WATER FIXTURE UPGRADE = $319,144 SCHEDULE DO-3 PERFORMANCE PERIOD CASH FLOW SCHEDULE DO-4 FIRST YEAR ENERGY AND COST SAVINGS BY ECM TECHNOLOGY CATEGORY AND DELIVERY ORDER SCHEDULE DO-5 ANNUA

Who is the contractor on this award?

The obligated recipient is NORESCO, LLC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Maritime Administration).

What is the total obligated amount?

The obligated amount is $27.9 million.

What is the period of performance?

Start: 2001-08-30. End: 2023-03-01.

What is the projected return on investment (ROI) for the $15.1 million energy conservation contract, and how are actual savings being tracked against this projection?

The provided data does not explicitly state the projected ROI or detail the methodology for tracking actual energy and cost savings. While Schedule DO-4 outlines potential savings by ECM technology, a comprehensive ROI calculation and a clear tracking mechanism are essential for validating the contract's financial effectiveness and ensuring taxpayer value.

Given the contract's over 20-year performance period, what mechanisms are in place to mitigate the risk of technological obsolescence and ensure the energy conservation measures remain effective?

The long performance period presents a risk of technological obsolescence. The contract should ideally include provisions for technology refresh, performance adjustments based on evolving standards, or options for incorporating newer, more efficient technologies. Without such clauses, the effectiveness of the implemented measures may diminish over time, impacting the anticipated cost savings.

How does the pricing for specific energy conservation measures (ECMs) compare to industry benchmarks, and was the firm-fixed-price structure optimal for achieving competitive pricing over the contract

The contract lists specific implementation prices for ECMs like energy-efficient lighting ($1,149,335) and chiller interconnection ($2,252,564). A direct comparison to industry benchmarks requires detailed scope analysis. The firm-fixed-price structure, while providing cost certainty, might not be the most effective for long-term contracts where market prices and technology can fluctuate significantly, potentially impacting overall value.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: RTX Corp

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $36,807,969

Exercised Options: $27,924,851

Current Obligation: $27,924,851

Actual Outlays: $6,386,436

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: DEAM3699EE73674

IDV Type: IDC

Timeline