DoD's $18.1M Energy Savings Contract with Energy Systems Group LLC Faces Scrutiny
Contract Overview
Contract Amount: $18,111,201 ($18.1M)
Contractor: Energy Systems Group LLC
Awarding Agency: Department of Defense
Start Date: 2018-04-12
End Date: 2043-04-11
Contract Duration: 9,130 days
Daily Burn Rate: $2.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT
Place of Performance
Location: LAYTON, DAVIS County, UTAH, 84040
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $18.1 million to ENERGY SYSTEMS GROUP LLC for work described as: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT Key points: 1. Contract awarded to Energy Systems Group LLC for energy savings performance. 2. Full and open competition was utilized for this contract. 3. Potential risks include long-term performance and cost-effectiveness over the contract duration. 4. The sector is Energy, with a focus on engineering services.
Value Assessment
Rating: fair
The contract value of $18.1M over 25 years suggests a significant investment. Benchmarking against similar energy savings performance contracts is difficult without detailed project scope and expected savings.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better value for the government.
Taxpayer Impact: The long-term nature of the contract means taxpayer impact will be realized over decades, dependent on actual energy savings achieved.
Public Impact
Potential for significant long-term energy cost reductions for the Department of Defense. The contract duration of 25 years requires careful monitoring to ensure ongoing value. Success hinges on the contractor's ability to deliver projected energy efficiency improvements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (25 years) increases risk of performance degradation or changing technology.
- Firm Fixed Price may not fully account for unforeseen cost escalations in energy markets.
- Lack of specific performance metrics makes independent verification of savings challenging.
Positive Signals
- Full and open competition suggests a competitive award process.
- Focus on energy savings aligns with government sustainability goals.
- Potential for substantial long-term cost reductions.
Sector Analysis
This contract falls within the Energy sector, specifically focusing on energy savings performance. Benchmarks for such contracts vary widely based on the scope of energy conservation measures and the facility's baseline energy consumption.
Small Business Impact
The contract was awarded to Energy Systems Group LLC, and there is no indication of small business participation in the provided data. Further analysis would be needed to determine if small businesses were subcontracted.
Oversight & Accountability
Oversight will be critical throughout the 25-year term to ensure the contractor meets performance obligations and that taxpayer funds are used effectively to achieve projected energy savings.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Long-term contract duration (25 years) poses risks.
- Potential for contractor performance degradation over time.
- Difficulty in verifying actual savings against projections.
- Firm Fixed Price may not be optimal for long-term energy projects.
- Lack of small business participation noted.
Tags
engineering-services, department-of-defense, ut, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.1 million to ENERGY SYSTEMS GROUP LLC. IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT
Who is the contractor on this award?
The obligated recipient is ENERGY SYSTEMS GROUP LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $18.1 million.
What is the period of performance?
Start: 2018-04-12. End: 2043-04-11.
What are the specific energy conservation measures included in this contract and their projected savings?
The provided data does not detail the specific energy conservation measures (ECMs) or their projected savings. A comprehensive review would require access to the contract's technical exhibits and financial projections. Understanding these details is crucial for assessing the contract's true value and the likelihood of achieving the $18.1M target over its 25-year lifespan.
How will the government ensure the contractor continues to deliver savings effectively over the 25-year period?
Effective oversight mechanisms, including regular performance reviews, independent verification of energy savings, and clear contract modification procedures, are essential. The government should establish key performance indicators (KPIs) tied to energy reduction and cost savings, with penalties for non-performance and incentives for exceeding targets to maintain contractor motivation and accountability throughout the contract's long duration.
What is the benchmark for similar energy savings performance contracts in terms of cost per unit of energy saved?
Establishing a precise per-unit cost benchmark for energy savings is complex due to variations in project scope, facility types, and baseline energy usage. However, industry standards often evaluate ESPCs based on payback periods and the ratio of guaranteed savings to total project cost. A typical benchmark might aim for a payback period of 10-15 years, though this can fluctuate significantly based on specific project characteristics and energy market conditions.
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
Solicitation ID: SP060015R0420
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Energy Systems Group, LLC
Address: 4655 ROSEBUD LN, NEWBURGH, IN, 47630
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $182,283,948
Exercised Options: $91,471,822
Current Obligation: $18,111,201
Actual Outlays: $3,147,021
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DEAM3609GO29030
IDV Type: IDC
Timeline
Start Date: 2018-04-12
Current End Date: 2043-04-11
Potential End Date: 2043-04-11 00:00:00
Last Modified: 2025-12-18
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