Navy awards $30.3M for facility upgrades at Japanese bases, with a 21-year performance period
Contract Overview
Contract Amount: $30,273,874 ($30.3M)
Contractor: Noresco, LLC
Awarding Agency: Department of Defense
Start Date: 2018-08-24
End Date: 2039-11-01
Contract Duration: 7,739 days
Daily Burn Rate: $3.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: IGF::OT::IGF ESPC AT NAF ATSUGI, CFA SASEBO, AND CFA YOKOSUKA, JAPAN. CONSTRUCTION AND PERFORMANCE PERIOD SERVICES FOR BOILER, CHILLER, LIGHTING AND WATER SYSTEM.
Plain-Language Summary
Department of Defense obligated $30.3 million to NORESCO, LLC for work described as: IGF::OT::IGF ESPC AT NAF ATSUGI, CFA SASEBO, AND CFA YOKOSUKA, JAPAN. CONSTRUCTION AND PERFORMANCE PERIOD SERVICES FOR BOILER, CHILLER, LIGHTING AND WATER SYSTEM. Key points: 1. Contract focuses on energy conservation measures, including boiler, chiller, and lighting system improvements. 2. Long performance period suggests a focus on sustained energy savings and operational efficiency. 3. The contract was awarded using full and open competition, indicating a broad search for qualified bidders. 4. Fixed-price contract type shifts performance risk to the contractor. 5. The project aims to reduce utility costs and improve facility infrastructure at overseas installations. 6. The engineering services NAICS code suggests a focus on design and technical expertise for the upgrades.
Value Assessment
Rating: good
The contract value of $30.3 million over 21 years averages approximately $1.44 million per year. This appears reasonable for comprehensive facility upgrades involving major systems like boilers, chillers, and lighting across multiple overseas installations. Benchmarking against similar energy conservation projects at Department of Defense facilities would provide a more precise value-for-money assessment, but the scope suggests a significant investment in long-term operational efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, with six bids received. This indicates a robust competitive environment, suggesting that the Navy sought a wide range of potential contractors and likely received competitive pricing. The presence of multiple bidders generally supports the government's ability to secure favorable terms and pricing.
Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining the best value through a competitive bidding environment, potentially leading to lower overall costs for the services rendered.
Public Impact
Naval facilities in Japan (CFA Sasebo and CFA Yokosuka) will benefit from improved infrastructure and reduced utility costs. Services delivered include construction and performance period services for boiler, chiller, lighting, and water systems. The geographic impact is concentrated on U.S. Navy installations in Japan. The project supports the operational readiness and sustainability of overseas military bases. Workforce implications may include specialized construction and maintenance roles for the duration of the contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (21 years) could present risks related to technological obsolescence or changing energy efficiency standards.
- Overseas performance introduces logistical and geopolitical risks.
- Reliance on specific technologies for energy conservation may require ongoing specialized maintenance and parts availability.
Positive Signals
- Focus on energy conservation aligns with federal sustainability goals and can lead to significant long-term cost savings.
- The firm-fixed-price contract type provides cost certainty for the government.
- Full and open competition with six bidders suggests a healthy market and competitive pricing.
- The long performance period allows for sustained operational improvements and benefits.
Sector Analysis
This contract falls within the Engineering Services sector, specifically related to facility infrastructure and energy conservation. The market for energy savings performance contracts (ESPCs) and facility upgrades is substantial within the federal government, driven by mandates for energy efficiency and infrastructure modernization. Comparable spending benchmarks would typically involve other large-scale ESPCs or construction projects for government facilities, particularly those with long-term performance guarantees.
Small Business Impact
The contract was awarded to NORESCO, LLC, a large business. There is no indication of small business set-asides or specific subcontracting requirements for small businesses in the provided data. This suggests that the primary focus was on securing the best overall technical and price proposal from the broader market, rather than specifically targeting small business participation.
Oversight & Accountability
Oversight for this contract would likely involve the Department of the Navy's contracting officers and potentially the Naval Facilities Engineering Command (NAVFAC). Performance monitoring throughout the 21-year period would be crucial to ensure the contractor meets energy savings targets and maintains the upgraded systems. Transparency is generally facilitated through contract award databases, but detailed performance reports may be internal to the agency.
Related Government Programs
- Energy Savings Performance Contracts (ESPCs)
- Department of Defense Facility Modernization
- Overseas Military Construction
- Naval Facilities Engineering Command Contracts
Risk Flags
- Long-term performance risk
- Technological obsolescence
- Overseas operational risks
- Verification of energy savings
Tags
energy-efficiency, facility-upgrades, department-of-defense, department-of-the-navy, japan, construction, engineering-services, full-and-open-competition, firm-fixed-price, long-term-contract, energy-savings-performance-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.3 million to NORESCO, LLC. IGF::OT::IGF ESPC AT NAF ATSUGI, CFA SASEBO, AND CFA YOKOSUKA, JAPAN. CONSTRUCTION AND PERFORMANCE PERIOD SERVICES FOR BOILER, CHILLER, LIGHTING AND WATER SYSTEM.
Who is the contractor on this award?
The obligated recipient is NORESCO, 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 $30.3 million.
What is the period of performance?
Start: 2018-08-24. End: 2039-11-01.
What is the historical spending pattern for energy conservation projects at Department of the Navy facilities in Japan?
Historical spending data for energy conservation projects at Department of the Navy facilities in Japan is not directly available in this dataset. However, the award of this $30.3 million contract suggests a significant investment in such initiatives. Federal agencies, including the Department of Defense, have increasingly focused on energy efficiency and sustainability, often utilizing Energy Savings Performance Contracts (ESPCs) to fund these upgrades through guaranteed energy cost savings. Analyzing past ESPC awards or similar facility upgrade contracts within the Navy's overseas commands could reveal trends in project scope, duration, and investment levels, providing context for the current contract's scale and importance.
How does the pricing of this contract compare to similar energy conservation projects awarded by the Navy or other federal agencies?
A direct price comparison is challenging without specific benchmarks for comparable projects. However, the contract's value of $30.3 million spread over 21 years ($1.44 million annually) for comprehensive boiler, chiller, lighting, and water system upgrades at two major naval installations appears to be within a reasonable range for such extensive work. Energy Savings Performance Contracts (ESPCs) often involve complex financing and performance guarantees, which can influence pricing. The presence of six bids under full and open competition suggests that the pricing was likely competitive. Further analysis would require comparing the cost per square foot or cost per unit of energy saved against similar projects executed under similar conditions and contract types.
What are the primary risks associated with a 21-year performance period for facility upgrades?
A 21-year performance period presents several risks. Technological obsolescence is a significant concern; systems installed today might be outdated or less efficient compared to newer technologies available in 10-15 years. Evolving energy efficiency standards and regulations could also necessitate costly retrofits or modifications. Furthermore, the long duration increases the risk of unforeseen geopolitical instability or changes in base operations that could impact the project's utility. Contractor performance over such an extended period also requires robust monitoring and management to ensure sustained savings and system upkeep. Finally, economic fluctuations or changes in government funding priorities could affect the long-term viability or perceived value of the contract.
What is NORESCO, LLC's track record with large-scale federal energy conservation contracts?
NORESCO, LLC is a well-established energy services company with a significant track record in implementing large-scale energy conservation projects for federal agencies, including the Department of Defense. They specialize in performance contracting, where project financing is often tied to the energy savings achieved. Their portfolio includes numerous projects involving upgrades to HVAC systems, lighting, building controls, and renewable energy installations across various government facilities. While specific details of their past performance on contracts of this exact duration or scale are not provided here, their position as a major player in the ESPC market suggests they have successfully managed complex, long-term projects and met guaranteed savings targets for other government clients.
How will the success of this contract be measured, and what are the key performance indicators (KPIs)?
The success of this contract will primarily be measured by the achievement of guaranteed energy and water cost savings for the specified facilities at CFA Sasebo and CFA Yokosuka. Key Performance Indicators (KPIs) would likely include: actual energy consumption reduction (measured in kWh, therms, etc.) compared to a baseline, actual water consumption reduction, the total dollar value of savings realized, and the operational status and efficiency of the upgraded systems (boilers, chillers, lighting, water). The contractor, NORESCO, LLC, is responsible for implementing the measures and reporting on performance. The Department of the Navy will likely have a team responsible for verifying these savings and ensuring the systems are maintained according to the contract's terms throughout the 21-year performance period.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 6
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 RESEARCH DR STE 400 C, WESTBOROUGH, MA, 01581
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $156,847,334
Exercised Options: $156,847,334
Current Obligation: $30,273,874
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DEAM3609GO29039
IDV Type: IDC
Timeline
Start Date: 2018-08-24
Current End Date: 2039-11-01
Potential End Date: 2039-11-01 00:00:00
Last Modified: 2025-05-19
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