Naval Air Station Oceana energy savings contract awarded to Trane U.S. Inc. for over $8.1 million
Contract Overview
Contract Amount: $8,126,095 ($8.1M)
Contractor: Trane U.S. Inc.
Awarding Agency: Department of Defense
Start Date: 2016-10-26
End Date: 2041-08-01
Contract Duration: 9,045 days
Daily Burn Rate: $898/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT FOR NAVAL AIR STATION OCEANA, VIRGINIA TO INCLUDE LIGHT AND ENERGY RELATED PROCESS IMPROVEMENTS AND RENEWABLE ENERGY SYSTEMS
Place of Performance
Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23460
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $8.1 million to TRANE U.S. INC. for work described as: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT FOR NAVAL AIR STATION OCEANA, VIRGINIA TO INCLUDE LIGHT AND ENERGY RELATED PROCESS IMPROVEMENTS AND RENEWABLE ENERGY SYSTEMS Key points: 1. Contract focuses on energy efficiency and renewable energy systems, aligning with federal sustainability goals. 2. The fixed-price contract structure shifts performance risk to the contractor. 3. Long duration suggests a significant, multi-year commitment to energy infrastructure upgrades. 4. The contract's value is moderate within the context of large-scale federal energy projects. 5. Performance is tied to energy savings, a common metric for such contracts. 6. The project aims to modernize energy infrastructure at a key naval facility.
Value Assessment
Rating: good
The contract value of $8.1 million for a 15-year energy savings performance contract appears reasonable, especially considering the scope of potential energy and lighting improvements at a large naval installation. Benchmarking against similar Energy Savings Performance Contracts (ESPCs) is challenging without specific project details, but the fixed-price nature suggests Trane is taking on the risk of achieving projected savings. The contract's duration allows for amortization of upfront investment and realization of long-term benefits.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This competitive process is expected to yield a fair market price and encourage innovative solutions. The presence of 7 bidders (no) suggests a healthy level of interest and competition within the energy services sector for federal contracts.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs and ensuring the government receives the best value through a robust bidding process.
Public Impact
Naval Air Station Oceana benefits from modernized, more efficient energy infrastructure, potentially reducing operational costs. The project delivers energy efficiency upgrades and potentially renewable energy systems, contributing to federal sustainability targets. The geographic impact is localized to NAS Oceana in Virginia. Workforce implications may include specialized technical roles for installation and maintenance of new systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if projected energy savings are not realized.
- Long contract duration could lead to vendor lock-in or challenges in adapting to future energy technologies.
- Dependence on Trane's expertise for performance and maintenance over the contract term.
Positive Signals
- Focus on energy savings aligns with federal sustainability mandates.
- Fixed-price contract shifts financial risk to the contractor.
- Full and open competition suggests a competitive award process.
- Long-term nature allows for significant infrastructure improvements and sustained savings.
Sector Analysis
This contract falls within the Energy Services sector, specifically Energy Savings Performance Contracts (ESPCs). ESPCs are a financing mechanism that allows federal agencies to make energy efficiency improvements with no upfront capital costs. The contractor is repaid through the savings generated by the improvements. The market for ESPCs is significant, driven by federal mandates for energy reduction and sustainability. Trane U.S. Inc. is a major player in this market, competing with other large energy service companies.
Small Business Impact
The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside provisions. While Trane U.S. Inc. is a large business, there may be opportunities for small businesses to participate as subcontractors, particularly in areas like installation, maintenance, or specialized component supply. Further analysis would be needed to determine the extent of small business subcontracting.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy's contracting and facilities management departments. Performance monitoring would focus on the realization of energy savings as stipulated in the contract. Transparency is generally maintained through contract databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Federal Energy Management Program (FEMP)
- Energy Savings Performance Contracts (ESPCs)
- Department of Defense Energy Initiatives
- Naval Facilities Engineering Command (NAVFAC) Contracts
Risk Flags
- Long contract duration may increase risk of technological obsolescence.
- Performance hinges on accurate energy savings projections over 15 years.
- Potential for contractor performance issues over extended period.
Tags
energy-savings, performance-contract, fixed-price, full-and-open-competition, department-of-defense, department-of-the-navy, naval-air-station-oceana, virginia, engineering-services, trane-u.s.-inc., sustainability, renewable-energy
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $8.1 million to TRANE U.S. INC.. IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT FOR NAVAL AIR STATION OCEANA, VIRGINIA TO INCLUDE LIGHT AND ENERGY RELATED PROCESS IMPROVEMENTS AND RENEWABLE ENERGY SYSTEMS
Who is the contractor on this award?
The obligated recipient is TRANE U.S. INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $8.1 million.
What is the period of performance?
Start: 2016-10-26. End: 2041-08-01.
What is the historical spending pattern for energy efficiency projects at Naval Air Station Oceana?
Analyzing historical spending on energy efficiency at NAS Oceana prior to this $8.1 million ESPC would provide crucial context. Without specific prior data, it's difficult to ascertain if this represents a significant increase or a continuation of investment. Typically, federal agencies are mandated to improve energy efficiency, so ongoing investment is expected. ESPCs are a common mechanism for large-scale upgrades, suggesting this contract might be a comprehensive effort rather than a series of smaller, incremental projects. Understanding past investments would help benchmark the scale and ambition of the current Trane contract and assess if previous efforts yielded comparable savings or required follow-on investment.
How does the projected energy savings compare to the contract value and duration?
The contract value is $8.1 million over approximately 15 years (from Oct 2016 to Aug 2041). To assess value for money, the projected annual energy savings must be calculated. If the total savings over the contract life significantly exceed $8.1 million, it indicates good value. For example, if the contract aims to save $1 million per year, the total savings would be $15 million, yielding a net benefit of $6.9 million. Conversely, if savings are only slightly above the contract cost, the value proposition weakens. The fixed-price nature implies Trane guarantees these savings; if they fall short, the contractor absorbs the loss. Detailed projections are usually part of the ESPC proposal and are key to evaluating the financial viability and taxpayer benefit.
What specific energy conservation measures (ECMs) are included in this contract?
The provided data mentions 'light and energy related process improvements and renewable energy systems' but lacks specifics on the ECMs. Typical ECMs in such contracts include LED lighting retrofits, HVAC upgrades, building envelope improvements (insulation, windows), installation of renewable energy sources (solar panels), and smart building controls. The scope of these measures directly impacts the potential for energy savings and the overall cost-effectiveness. Understanding the specific technologies and improvements planned is essential for evaluating the contract's technical approach, potential risks, and alignment with current best practices in energy efficiency and renewable energy.
What is Trane U.S. Inc.'s track record with similar large-scale federal ESPCs?
Trane U.S. Inc., as a subsidiary of Trane Technologies (formerly American Standard Companies), has a significant history in providing energy solutions, including ESPCs for federal agencies. Evaluating their past performance on similar contracts is crucial. Key aspects to review include their success rate in achieving guaranteed savings, project completion timeliness, client satisfaction, and any history of disputes or contract modifications. A strong track record suggests a lower risk of performance issues and a higher likelihood of achieving the intended energy savings and financial benefits for the government. Conversely, a history of underperformance or disputes would raise concerns about the current contract's execution.
What are the potential risks associated with the long duration of this contract?
The contract's duration of approximately 15 years presents several potential risks. Firstly, energy technologies evolve rapidly; by the end of the contract, the installed systems might be outdated, potentially requiring further investment sooner than anticipated. Secondly, the long timeframe increases the risk of unforeseen economic fluctuations or changes in energy prices that could impact the accuracy of the initial savings projections. Thirdly, there's a risk of contractor performance degradation over such an extended period, or conversely, the government becoming overly reliant on a single vendor. Robust contract management and performance monitoring are essential to mitigate these long-term risks.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3600 PAMMEL CREEK RD, LA CROSSE, WI, 54601
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: $27,020,400
Exercised Options: $27,020,400
Current Obligation: $8,126,095
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DEAM3609GO29044
IDV Type: IDC
Timeline
Start Date: 2016-10-26
Current End Date: 2041-08-01
Potential End Date: 2041-08-01 00:00:00
Last Modified: 2026-01-09
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