DOE's $3.8M Isle Royale ESPC with Johnson Controls faces scrutiny over competition and value

Contract Overview

Contract Amount: $3,825,809 ($3.8M)

Contractor: Johnson Controls Government Systems, LLC

Awarding Agency: Department of the Interior

Start Date: 2013-09-20

End Date: 2026-02-12

Contract Duration: 4,528 days

Daily Burn Rate: $845/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF ISRO-120924 DEPARTMENT OF ENERGY - ENERGY SAVINGS PERFORMANCE CONTRACT FOR ISLE ROYALE NATIONAL PARK

Place of Performance

Location: HOUGHTON, HOUGHTON County, MICHIGAN, 49931

State: Michigan Government Spending

Plain-Language Summary

Department of the Interior obligated $3.8 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC for work described as: IGF::OT::IGF ISRO-120924 DEPARTMENT OF ENERGY - ENERGY SAVINGS PERFORMANCE CONTRACT FOR ISLE ROYALE NATIONAL PARK Key points: 1. The contract awarded via full and open competition suggests potential for competitive pricing. 2. However, the lack of small business participation raises concerns about broader economic impact. 3. The fixed-price contract type aims to control costs, but long duration warrants performance monitoring. 4. Engineering services sector benchmarks are needed to assess the $3.8M value proposition.

Value Assessment

Rating: fair

The contract value of $3.8M for engineering services over approximately 12 years appears substantial. Without specific benchmarks for similar energy savings performance contracts in national parks, assessing its value relative to market rates is difficult. Further analysis of the projected energy savings versus costs is required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a broad solicitation process. This method generally promotes price discovery and potentially better pricing. However, the specific impact on the final price is not detailed.

Taxpayer Impact: The use of an Energy Savings Performance Contract (ESPC) aims for cost savings through energy efficiency, theoretically benefiting taxpayers by reducing operational expenses for the park.

Public Impact

Taxpayers may benefit from long-term energy cost reductions at Isle Royale National Park. The project's success hinges on achieving projected energy savings, impacting park operational budgets. Limited small business involvement could mean missed opportunities for local economic development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation
Long contract duration requires sustained oversight
Potential for cost overruns if savings are not realized

Positive Signals

Awarded under full and open competition
Firm fixed price contract type
Focus on energy efficiency and savings

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to energy efficiency and performance contracting for federal facilities. Benchmarks for ESPCs in national parks are not readily available, but typical engineering service contracts of this duration and scope can vary significantly in cost.

Small Business Impact

The contract data indicates that small business participation was not a factor (ss: false, sb: false). This suggests that the prime contractor, Johnson Controls, did not subcontract with small businesses for this award, potentially limiting opportunities for smaller firms in this project.

Oversight & Accountability

Oversight will be crucial given the contract's long duration and reliance on achieving energy savings. The Department of the Interior and the National Park Service will need to monitor performance closely to ensure the contractor meets its obligations and that taxpayer funds are used effectively.

Related Government Programs

Engineering Services
Department of the Interior Contracting
National Park Service Programs

Risk Flags

Lack of small business participation
Long contract duration (over 12 years)
Potential for savings to not materialize as projected
Limited transparency on specific performance metrics and ROI

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $3.8 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC. IGF::OT::IGF ISRO-120924 DEPARTMENT OF ENERGY - ENERGY SAVINGS PERFORMANCE CONTRACT FOR ISLE ROYALE NATIONAL PARK

Who is the contractor on this award?

The obligated recipient is JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (National Park Service).

What is the total obligated amount?

The obligated amount is $3.8 million.

What is the period of performance?

Start: 2013-09-20. End: 2026-02-12.

What is the projected return on investment for the government, considering the contract's total value and the anticipated energy savings?

The projected return on investment is not explicitly detailed in the provided data. However, ESPCs are designed to be cost-neutral or cost-saving, meaning the energy savings generated should cover the contract costs over its lifespan. A thorough analysis would compare the $3.8M cost against detailed energy consumption data and projected savings from the implemented measures.

What are the specific risks associated with a 12-year fixed-price contract for energy savings performance in a remote national park?

Risks include potential underestimation of energy savings, unforeseen operational challenges in a remote location impacting implementation or maintenance, and the contractor's ability to maintain performance over the long term. Inflation and changes in energy prices could also affect the realized savings compared to initial projections. The fixed-price nature shifts some risk to the contractor, but inadequate savings could still impact the park's budget if not structured correctly.

How effectively does this contract leverage competition to ensure optimal pricing and service delivery for the National Park Service?

The contract was awarded through full and open competition, which is a positive indicator for achieving competitive pricing. However, the absence of specific bid details or a comparison of offers makes it difficult to definitively assess how optimal the pricing is. The long-term nature of the contract and the specialized services required may limit the pool of truly competitive bidders, necessitating careful performance monitoring regardless of the initial competition.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

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)

Evaluated Preference: NONE

Contractor Details

Address: 507 E. MICHIGAN ST., MILWAUKEE, WI, 53202

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

Financial Breakdown

Contract Ceiling: $3,825,809

Exercised Options: $3,825,809

Current Obligation: $3,825,809

Actual Outlays: $1,590,530

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29036

IDV Type: IDC

Timeline