Energy savings contract for Norfolk Naval Shipyard valued at $74.3M, spanning over 25 years
Contract Overview
Contract Amount: $74,299,475 ($74.3M)
Contractor: Ameresco Inc
Awarding Agency: Department of Defense
Start Date: 2019-12-12
End Date: 2044-12-12
Contract Duration: 9,132 days
Daily Burn Rate: $8.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ENERGY SAVINGS PERFORMANCE CONTRACT FOR NORFOLK NAVAL SHIP YARD, PORTSMOUTH, VIRGINIA.
Place of Performance
Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $74.3 million to AMERESCO INC for work described as: ENERGY SAVINGS PERFORMANCE CONTRACT FOR NORFOLK NAVAL SHIP YARD, PORTSMOUTH, VIRGINIA. Key points: 1. The contract aims to achieve significant energy efficiency improvements and cost reductions. 2. Long-term nature of the contract suggests a strategic investment in infrastructure modernization. 3. Performance is tied to energy savings, aligning contractor incentives with government objectives. 4. The fixed-price structure provides cost certainty for the government. 5. Focus on energy infrastructure suggests potential for modernization and reduced environmental impact.
Value Assessment
Rating: good
This contract's value of $74.3 million over 25 years represents a substantial investment in energy infrastructure. Benchmarking against similar large-scale energy performance contracts for federal facilities is complex due to varying scopes and energy markets. However, the long duration suggests a comprehensive approach to energy upgrades. The firm fixed-price nature helps manage cost predictability, but the ultimate value will depend on the realized energy savings.
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 drive favorable pricing and innovative solutions. The number of bidders is not specified, but the open nature suggests a robust market for such services.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better service quality.
Public Impact
The primary beneficiary is the Department of the Navy, which will see reduced energy costs and improved facility performance at the Norfolk Naval Shipyard. The contract will deliver upgrades to energy systems, potentially including lighting, HVAC, and building controls, leading to enhanced operational efficiency. The geographic impact is concentrated at the Norfolk Naval Shipyard in Portsmouth, Virginia. While not directly creating new jobs, the contract may support existing roles within the shipyard related to facility management and energy oversight, and indirectly support jobs in the energy services sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration increases risk of technological obsolescence or changes in energy prices.
- Reliance on projected energy savings for value realization means actual savings could be lower than anticipated.
- Scope of work complexity could lead to unforeseen challenges and cost overruns if not managed meticulously.
Positive Signals
- Focus on energy efficiency aligns with federal sustainability goals and can lead to significant long-term cost savings.
- Firm fixed-price contract provides budget certainty for the government.
- Awarded through full and open competition, suggesting a competitive price and quality.
Sector Analysis
This contract falls within the Engineering Services sector, specifically related to energy infrastructure modernization for large federal facilities. The market for Energy Savings Performance Contracts (ESPCs) is significant, with numerous private sector companies specializing in identifying, implementing, and financing energy efficiency projects for government and commercial clients. These contracts are designed to be cost-neutral or cost-saving, as the savings generated from efficiency improvements are used to pay for the project.
Small Business Impact
Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. Typically, large ESPCs may involve subcontracting opportunities, but the primary awardee is a large business. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
Oversight for this contract would likely be managed by the Department of the Navy's facilities and energy management departments. Performance metrics related to energy savings would be tracked to ensure the contractor meets its obligations. Transparency is generally maintained through contract reporting requirements, and the Inspector General's office could investigate any allegations of fraud or mismanagement.
Related Government Programs
- Energy Savings Performance Contracts (ESPCs)
- Federal Building Energy Efficiency Programs
- Department of Defense Facility Modernization
- Naval Facilities Engineering Command Contracts
Risk Flags
- Long-term contract duration may expose government to risks of technological obsolescence.
- Reliance on projected energy savings for financial viability means actual savings could be lower.
- Changes in energy market prices over 25 years could impact savings calculations.
- Potential for scope creep or unforeseen technical challenges in large infrastructure projects.
Tags
energy-savings, performance-contract, department-of-defense, department-of-the-navy, norfolk-naval-shipyard, portsmouth-virginia, engineering-services, firm-fixed-price, full-and-open-competition, long-term-contract, infrastructure-modernization
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $74.3 million to AMERESCO INC. ENERGY SAVINGS PERFORMANCE CONTRACT FOR NORFOLK NAVAL SHIP YARD, PORTSMOUTH, VIRGINIA.
Who is the contractor on this award?
The obligated recipient is AMERESCO 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 $74.3 million.
What is the period of performance?
Start: 2019-12-12. End: 2044-12-12.
What is the historical spending trend for energy efficiency contracts within the Department of the Navy?
Historical spending on energy efficiency contracts within the Department of the Navy has generally trended upwards over the past decade, driven by federal mandates for sustainability and cost reduction. The Navy, as one of the largest energy consumers in the government, has increasingly utilized Energy Savings Performance Contracts (ESPCs) and similar mechanisms to upgrade aging infrastructure and reduce its operational footprint. While specific aggregate data for the Navy's energy efficiency spending is not readily available in this dataset, the consistent issuance of large-scale ESPCs like the one for Norfolk Naval Shipyard indicates a sustained commitment. This trend reflects a broader government-wide push towards energy resilience and cost-effectiveness in facility management.
How does the $74.3 million contract value compare to other similar energy performance contracts awarded to Ameresco Inc.?
Comparing the $74.3 million contract value to other contracts awarded to Ameresco Inc. requires access to a broader database of Ameresco's contract history. However, Ameresco is a major player in the energy services sector and frequently secures large-scale ESPCs with federal agencies. This particular contract, valued at approximately $74.3 million over 25 years, appears to be a significant project, indicative of Ameresco's capacity to handle complex, long-term energy infrastructure upgrades. Without specific comparative data on Ameresco's other awards, it's difficult to definitively state if this is their largest or typical contract size, but it aligns with the scale of projects undertaken by leading ESPC providers.
What are the key performance indicators (KPIs) used to measure the success of this energy savings contract?
The primary KPI for this contract is the actual measured energy savings achieved by the implemented upgrades, which directly impacts the financial return for both the government and the contractor. Success is typically measured against a baseline of energy consumption established before the project's commencement. Key performance indicators would likely include reductions in electricity, natural gas, or other energy utility consumption, quantified in British Thermal Units (BTUs) or monetary value. Other potential KPIs could involve improvements in facility uptime, reduction in greenhouse gas emissions, and adherence to project schedules and budgets. The contract's structure, being a Firm Fixed Price (FFP) with savings sharing, means that the contractor is incentivized to maximize these savings.
What is the typical payback period for an Energy Savings Performance Contract of this magnitude?
The typical payback period for an Energy Savings Performance Contract (ESPC) of this magnitude ($74.3 million over 25 years) can vary significantly based on the scope of work, the types of technologies implemented, the baseline energy costs, and the negotiated savings sharing agreement. However, for large federal ESPCs, payback periods often range from 10 to 20 years. The structure of ESPCs allows the energy savings generated by the project to finance the upfront costs, meaning the government does not typically pay out-of-pocket for the improvements. The contractor is repaid from the documented savings. A 25-year contract term suggests that the project's financial model accounts for a substantial payback period, potentially including significant upfront investment in long-term infrastructure.
What are the potential risks associated with a 25-year contract duration for energy infrastructure?
A 25-year contract duration for energy infrastructure presents several potential risks. Firstly, technological advancements in energy efficiency and generation could render the implemented solutions obsolete or less effective before the contract term ends. Secondly, energy market fluctuations (prices of electricity, natural gas, etc.) over such a long period can impact the accuracy of savings projections, potentially leading to lower-than-expected financial returns. Thirdly, changes in federal energy policies, regulations, or budget priorities could affect the contract's ongoing viability or the government's ability to fully leverage the upgrades. Finally, the long timeframe increases the risk of unforeseen physical degradation of installed equipment or changes in facility usage patterns that could necessitate modifications or impact performance.
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
Solicitation ID: N3943017RNNSY
Offers Received: 1
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: $517,174,885
Exercised Options: $517,174,885
Current Obligation: $74,299,475
Actual Outlays: $15,152,590
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
Start Date: 2019-12-12
Current End Date: 2044-12-12
Potential End Date: 2044-12-12 00:00:00
Last Modified: 2025-12-31
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