DoD's $3.48M contract for ESPC services awarded to Johnson Controls Government Systems, LLC

Contract Overview

Contract Amount: $3,484,515 ($3.5M)

Contractor: Johnson Controls Government Systems, LLC

Awarding Agency: Department of Defense

Start Date: 2016-12-22

End Date: 2039-12-31

Contract Duration: 8,409 days

Daily Burn Rate: $414/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF ESPC NAS CORPUS CHRISTI

Place of Performance

Location: CORPUS CHRISTI, NUECES County, TEXAS, 78411

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $3.5 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC for work described as: IGF::OT::IGF ESPC NAS CORPUS CHRISTI Key points: 1. Value for money appears reasonable given the long-term nature of the contract and the scope of energy efficiency improvements. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. Risk indicators are moderate, with potential concerns around long-term performance monitoring and the extended duration. 4. Performance context is tied to energy conservation measures at NAS Corpus Christi, aiming for long-term savings. 5. Sector positioning is within engineering services, specifically supporting defense infrastructure modernization.

Value Assessment

Rating: good

The contract's value of $3.48 million over its full term (estimated 8409 days) for energy conservation services suggests a potentially good return on investment through energy savings. Benchmarking against similar Energy Savings Performance Contracts (ESPCs) is challenging without detailed project scope, but the fixed-price nature of the delivery order provides cost certainty. The long duration implies a focus on sustained energy efficiency and operational improvements.

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 bidders had the opportunity to submit proposals. The presence of 3 bidders (as indicated by 'no': 3) suggests a healthy level of competition, which typically drives more competitive pricing and better service offerings. This approach allows the government to select the most advantageous offer based on technical merit and price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services, maximizing the value of federal investments.

Public Impact

The primary beneficiaries are the Department of the Navy and the personnel at Naval Air Station Corpus Christi, who will experience improved energy efficiency and potentially reduced utility costs. The services delivered include the implementation of energy conservation measures, which could encompass upgrades to lighting, HVAC systems, building envelopes, and renewable energy sources. The geographic impact is localized to Naval Air Station Corpus Christi, Texas, contributing to the operational readiness and sustainability of this key defense installation. Workforce implications may include the need for specialized technicians for installation and maintenance of new energy-efficient systems, potentially creating local employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (up to 2039) increases the risk of technological obsolescence or changing energy needs.
Performance monitoring over such an extended period requires robust systems to ensure sustained savings.
Reliance on a single contractor for a long-term energy infrastructure project could limit future flexibility.

Positive Signals

Awarded through full and open competition, indicating a competitive process and potentially better value.
Fixed-price contract type for the delivery order provides cost certainty for the government.
Focus on energy efficiency aligns with federal sustainability goals and potential long-term cost reductions.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting government facilities management and energy infrastructure. ESPCs are a common mechanism used by federal agencies to finance energy efficiency upgrades without upfront capital investment, leveraging future energy savings to pay for the project. The market for these services is substantial, driven by federal mandates for energy reduction and modernization of aging infrastructure. Comparable spending benchmarks would typically involve analyzing the total project cost against the projected energy savings over the contract's life.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting goals for this contract. As it was awarded under full and open competition, it is unlikely that small businesses were exclusively targeted, though they may have participated as subcontractors to the prime contractor, Johnson Controls Government Systems, LLC. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. The contract's long duration necessitates continuous monitoring of performance, energy savings, and compliance with terms. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Federal Energy Management Program (FEMP)
Department of Defense Facilities Management
Naval Facilities Engineering Command (NAVFAC) Contracts

Risk Flags

Long contract duration
Potential for technological obsolescence
Need for sustained performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.5 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC. IGF::OT::IGF ESPC NAS CORPUS CHRISTI

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 Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $3.5 million.

What is the period of performance?

Start: 2016-12-22. End: 2039-12-31.

What is the historical spending pattern for Energy Savings Performance Contracts (ESPCs) within the Department of the Navy?

The Department of the Navy has historically utilized ESPCs as a significant tool for achieving energy efficiency goals and modernizing its infrastructure. While specific aggregate spending figures for ESPCs can fluctuate annually based on budget allocations and project priorities, the Navy consistently ranks among the top federal agencies in ESPC investments. These contracts are crucial for addressing deferred maintenance and improving the operational resilience of naval installations. Data from sources like the Federal Energy Management Program (FEMP) and the Energy Information Administration (EIA) can provide insights into the scale and trends of such spending across federal agencies, including the Navy. The Navy's commitment to sustainability and energy security often drives substantial investment in ESPC projects, ranging from lighting retrofits to complex renewable energy installations.

How does the pricing structure of this contract compare to industry benchmarks for similar energy efficiency projects?

Benchmarking the pricing of this specific $3.48 million ESPC requires a detailed understanding of the scope of work, the specific energy conservation measures (ECMs) to be implemented, and the projected energy savings. ESPCs typically involve a performance-based payment structure where the contractor's profit is tied to the realized energy savings. Johnson Controls Government Systems, LLC, as a major player in the energy services sector, likely submitted a proposal reflecting industry standard markups and project management fees. However, without a granular breakdown of the ECMs (e.g., HVAC upgrades, LED lighting, solar installations) and their associated costs and savings projections, a direct comparison to industry benchmarks is difficult. Generally, the success of an ESPC hinges on the contractor's ability to deliver savings that exceed the project costs, thereby providing a net financial benefit to the government over the contract's life.

What are the key performance indicators (KPIs) used to measure the success of this ESPC contract?

The success of this ESPC contract is primarily measured by the achievement of guaranteed energy and water savings. Key Performance Indicators (KPIs) would typically include the actual reduction in energy consumption (e.g., kilowatt-hours saved), water usage reduction, and associated cost savings realized by Naval Air Station Corpus Christi. The contract likely specifies a Measurement and Verification (M&V) plan, outlining the methodologies and reporting requirements to track these savings over the contract's duration. Performance is often evaluated against baseline energy usage data established at the contract's outset. Failure to meet guaranteed savings levels could trigger remedies outlined in the contract, potentially involving adjustments to payments or requiring the contractor to implement corrective actions. The long-term nature of the contract implies that ongoing monitoring and reporting are critical components of performance assessment.

What is the track record of Johnson Controls Government Systems, LLC in delivering similar large-scale energy efficiency projects for the federal government?

Johnson Controls Government Systems, LLC has a significant track record in delivering energy efficiency solutions and facility modernization projects for various federal agencies, including the Department of Defense. They are a well-established entity in the building automation and energy services industry. Their experience often includes implementing a wide range of Energy Savings Performance Contracts (ESPCs) and other energy-related projects across military bases, government buildings, and other federal installations. Publicly available contract data and agency performance reports can provide insights into their past project successes, including adherence to schedules, budget management, and achievement of energy savings goals. While specific project details and performance metrics require deeper investigation, their sustained presence in the government contracting space suggests a capacity to manage complex, long-term energy projects.

What are the potential risks associated with the long duration (ending 2039) of this contract?

The extended duration of this contract, ending in 2039, presents several potential risks. Firstly, technological advancements in energy efficiency and renewable energy could render the implemented solutions obsolete or less cost-effective before the contract term concludes. Secondly, changes in energy markets, utility rates, or federal energy policies could impact the projected savings and the overall financial viability of the project. Thirdly, maintaining consistent oversight and performance management over such a long period can be challenging for government personnel, potentially leading to a decline in vigilance. Lastly, unforeseen facility needs or changes in operational requirements at NAS Corpus Christi might necessitate modifications to the original scope, which could be complex to manage under a long-term, fixed-scope agreement. Robust contract management and flexibility clauses are crucial to mitigate these 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: 3

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: $6,093,984

Exercised Options: $6,093,984

Current Obligation: $3,484,515

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