GSA's $73M Energy Savings Contract for DC Buildings Aims for Long-Term Efficiency

Contract Overview

Contract Amount: $72,969,175 ($73.0M)

Contractor: Ameresco Inc

Awarding Agency: General Services Administration

Start Date: 2016-06-01

End Date: 2041-01-31

Contract Duration: 9,010 days

Daily Burn Rate: $8.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT. INVOLVES THE INSTALLATION AND LONG TERM MEASUREMENT&VERIFICATION OF ENERGY CONSERVATION MEASURES FOR THE FOLLOWING DISTRICT OF COLUMBIA BUILDINGS: ATF BUILDING, VETERANS ADMINISTRATION BUILDING, WILLIAM JEFFERSON CLINTON NORTH/SOUTH BUILDINGS, WILLIAM JEFFERSON CLINTON EAST BUILDING, WILLIAM JEFFERSON CLINTON WEST BUILDING, AND WILLIAM JEFFERSON CLINTON CONNECTING WING.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20407

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $73.0 million to AMERESCO INC for work described as: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT. INVOLVES THE INSTALLATION AND LONG TERM MEASUREMENT&VERIFICATION OF ENERGY CONSERVATION MEASURES FOR THE FOLLOWING DISTRICT OF COLUMBIA BUILDINGS: ATF BUILDING, VETERANS ADMINISTRATION BUILDING, WILLIAM JEFFERSON CLINTON NORTH/SO… Key points: 1. Focuses on energy conservation measures across multiple federal buildings in Washington D.C. 2. Long-term performance period (9010 days) suggests a commitment to sustained energy savings. 3. Contract type is Firm Fixed Price, shifting performance risk to the contractor. 4. Ameresco Inc. is the sole contractor, indicating specialized expertise or a specific project scope. 5. Competition was full and open, suggesting a potentially competitive bidding process. 6. The contract's duration and scope imply significant potential for operational cost reductions. 7. Performance is measured and verified over the contract's life, ensuring accountability.

Value Assessment

Rating: good

The contract's value of $73 million over a 25-year period (approximately $2.9 million annually) for energy savings performance contracts is within a reasonable range for large federal building portfolios. Benchmarking against similar large-scale ESPCs is challenging without specific project details, but the firm-fixed-price structure indicates that the contractor bears the risk of cost overruns. The long-term nature suggests a focus on achieving significant, sustained energy reductions rather than short-term fixes.

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. While the number of bidders is not specified, this approach generally fosters a competitive environment, which can lead to better pricing and innovative solutions. The General Services Administration (GSA) likely sought proposals that demonstrated the most cost-effective and technically sound approach to energy conservation.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing the best value by encouraging multiple companies to offer competitive bids, potentially driving down costs and improving service quality.

Public Impact

Federal agencies occupying the specified District of Columbia buildings (ATF, VA, and multiple William Jefferson Clinton buildings) will benefit from reduced utility costs and improved building performance. The contract delivers energy conservation measures, which could include upgrades to lighting, HVAC systems, building controls, and other energy-consuming equipment. The geographic impact is concentrated within the District of Columbia, specifically at the listed federal facilities. The project may involve specialized construction and engineering services, potentially creating or sustaining jobs in these sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (25 years) could introduce risks related to technology obsolescence or changes in energy prices.
Reliance on a single contractor (Ameresco Inc.) for such a large project could pose risks if performance issues arise.
The effectiveness of energy savings is dependent on accurate measurement and verification over the entire contract term.

Positive Signals

Firm-fixed-price structure transfers cost overrun risk to the contractor.
Full and open competition suggests a robust selection process aimed at achieving best value.
Long-term performance period incentivizes the contractor to implement durable and effective energy solutions.
Focus on energy savings aligns with federal sustainability goals and can lead to significant operational cost reductions.

Sector Analysis

Energy Savings Performance Contracts (ESPCs) are a key tool for federal agencies to improve energy efficiency and reduce utility costs without upfront capital investment. This contract falls within the broader engineering services sector (NAICS 541330). The market for ESPCs is substantial, driven by government mandates for energy reduction and cost savings. GSA, as a major property manager, frequently utilizes ESPCs to modernize its building portfolio.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SS: false, SB: false). As a large-scale energy performance contract, it likely involves significant upfront investment and specialized expertise, which may favor larger contracting firms. Subcontracting opportunities for small businesses could exist within specific components of the energy conservation measures or installation work, but the primary awardee is a large corporation.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Public Buildings Service. The firm-fixed-price nature and the long-term measurement and verification component provide mechanisms for accountability. GSA's contracting officers and technical representatives would monitor performance against the contract requirements. An Inspector General's office, likely GSA's own, would have jurisdiction for audits and investigations into potential fraud, waste, or abuse.

Related Government Programs

Energy Independence and Security Act (EISA)
Federal Energy Management Program (FEMP)
Energy Savings Performance Contracts (ESPCs)
General Services Administration (GSA) Building Operations

Risk Flags

Long-term contract duration may lead to technology obsolescence.
Performance verification over 25 years requires robust and sustained M&V processes.
Dependence on a single contractor for a large portfolio could pose execution risks.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $73.0 million to AMERESCO INC. IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT. INVOLVES THE INSTALLATION AND LONG TERM MEASUREMENT&VERIFICATION OF ENERGY CONSERVATION MEASURES FOR THE FOLLOWING DISTRICT OF COLUMBIA BUILDINGS: ATF BUILDING, VETERANS ADMINISTRATION BUILDING, WILLIAM JEFFERSON CLINTON NORTH/SOUTH BUILDINGS, WILLIAM JEFFERSON CLINTON EAST BUILDING, WILLIAM JEFFERSON CLINTON WEST BUILDING, AND WILLIAM JEFFERSON CLINTON CONNECTING WING.

Who is the contractor on this award?

The obligated recipient is AMERESCO INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $73.0 million.

What is the period of performance?

Start: 2016-06-01. End: 2041-01-31.

What is the historical spending pattern for Energy Savings Performance Contracts by the General Services Administration?

The General Services Administration (GSA) has been a significant user of Energy Savings Performance Contracts (ESPCs) to upgrade the energy efficiency of its vast building portfolio. Historically, GSA has executed numerous ESPCs, often valued in the tens to hundreds of millions of dollars, reflecting the scale of its real estate holdings. These contracts are typically long-term, spanning 15 to 25 years, and are designed to generate cost savings that offset the investment in energy conservation measures. GSA's spending on ESPCs fluctuates based on available funding, agency priorities for modernization, and the pipeline of suitable projects. Data from the Department of Energy indicates that federal agencies collectively award billions of dollars in ESPCs over time, with GSA consistently being one of the largest participants. The trend has been towards more comprehensive retrofits and the integration of renewable energy sources where feasible.

How does the performance risk allocation in this Firm Fixed Price (FFP) contract compare to other contract types for similar energy projects?

In this Firm Fixed Price (FFP) contract, the contractor, Ameresco Inc., assumes the majority of the performance risk. This means Ameresco is obligated to deliver the agreed-upon energy savings and services for the fixed price, regardless of unforeseen cost increases or performance challenges. This contrasts with Cost-Plus contracts, where the government bears more risk by reimbursing the contractor's actual costs plus a fee. For energy projects, FFP is often preferred by agencies like GSA because it provides budget certainty and incentivizes the contractor to be highly efficient and innovative to maximize their profit margin. However, it can also lead to higher initial bid prices to account for the contractor's risk premium. Other contract types like Fixed-Price Incentive Fee (FPIF) might share some risk and reward between the parties based on performance targets.

What are the potential challenges in measuring and verifying energy savings over a 25-year contract period?

Measuring and verifying (M&V) energy savings over a 25-year period presents several challenges. Firstly, maintaining consistent baseline data and accounting for changes in building occupancy, usage patterns, and operational schedules is crucial but difficult over such a long timeframe. Secondly, technological advancements in energy efficiency and measurement tools may occur, requiring adaptation of M&V protocols. Thirdly, ensuring the availability and expertise of personnel for ongoing M&V activities, both within the government and potentially the contractor's organization, can be a concern. Finally, external factors like significant changes in utility rate structures or climate variations can impact actual energy consumption, making it complex to isolate the savings attributable solely to the installed measures. Robust M&V plans, often following established protocols like the International Performance Measurement and Verification Protocol (IPMVP), are essential to address these issues.

What is Ameresco Inc.'s track record with large-scale federal Energy Savings Performance Contracts?

Ameresco Inc. has a substantial track record of successfully delivering Energy Savings Performance Contracts (ESPCs) for federal agencies, including the General Services Administration (GSA). They have been involved in numerous projects across various government facilities, encompassing a wide range of energy conservation measures and renewable energy installations. Their portfolio includes contracts for military bases, federal buildings, and public housing authorities, often involving significant investment and long-term performance guarantees. Ameresco is recognized as one of the leading Energy Service Companies (ESCOs) in the federal market. Their experience typically involves comprehensive energy audits, project design, implementation, financing, and ongoing M&V. While specific project details and performance metrics vary, their consistent presence and award of large federal contracts suggest a demonstrated capability in managing complex, long-duration ESPC projects.

How does the $73 million cost compare to the potential long-term energy cost savings for the buildings involved?

Estimating the precise long-term energy cost savings requires detailed energy audits and projections specific to each building listed in the contract. However, ESPCs are structured such that the annual savings generated are intended to at least equal the annual contract payments, and often exceed them, leading to net cost reductions for the government. A $73 million contract over approximately 25 years implies an average annual cost of roughly $2.9 million. For large federal buildings like the ATF, VA, and the Clinton complex in D.C., annual utility expenditures can easily run into millions of dollars. If Ameresco can achieve significant reductions (e.g., 15-30% or more) in energy consumption through efficiency upgrades, the total savings over the contract's life could substantially outweigh the $73 million investment, potentially reaching hundreds of millions in avoided energy costs and deferred capital renewal.

Industry Classification

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

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 111 SPEEN ST STE 410, FRAMINGHAM, MA, 01701

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

Financial Breakdown

Contract Ceiling: $173,727,470

Exercised Options: $72,969,175

Current Obligation: $72,969,175

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29029

IDV Type: IDC

Timeline