DoD's $37M Energy Savings Contract with Energy Systems Group LLC Shows Long-Term Commitment
Contract Overview
Contract Amount: $37,086,789 ($37.1M)
Contractor: Energy Systems Group LLC
Awarding Agency: Department of Defense
Start Date: 2018-09-26
End Date: 2043-05-21
Contract Duration: 9,003 days
Daily Burn Rate: $4.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 16
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC)
Place of Performance
Location: VALPARAISO, OKALOOSA County, FLORIDA, 32580
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $37.1 million to ENERGY SYSTEMS GROUP LLC for work described as: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract spans over 25 years, indicating a long-term investment in energy efficiency. 3. The fixed-price nature of the contract shifts performance risk to the contractor. 4. The significant duration and value suggest a substantial project scope for energy infrastructure upgrades. 5. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, common for large-scale federal projects. 6. The contractor, Energy Systems Group LLC, is positioned to deliver specialized engineering services.
Value Assessment
Rating: good
Benchmarking the value of this specific delivery order is challenging without knowing the scope of the underlying IDIQ and the specific energy savings measures. However, the $37 million value over a 25-year period suggests a significant investment in energy infrastructure. The firm-fixed-price structure is generally favorable for the government as it caps costs. Comparing it to similar ESPC projects would require detailed analysis of the energy savings potential and project complexity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically fosters a competitive environment, potentially leading to better pricing and service offerings for the government. The presence of 16 bids suggests a robust competition, which is a positive sign for price discovery and value for taxpayer dollars.
Taxpayer Impact: A competitive bidding process like this generally benefits taxpayers by driving down costs and encouraging innovation from multiple contractors.
Public Impact
The Department of Defense benefits from reduced energy costs and improved energy resilience. The contract supports the delivery of energy efficiency upgrades and potentially renewable energy solutions. The geographic impact is focused on Florida, where the Defense Logistics Agency operates. The project may lead to job creation in the energy services and construction sectors within Florida.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to unforeseen cost escalations or technological obsolescence.
- Performance verification over 25 years requires robust monitoring and potential adjustments.
- Reliance on a single contractor for such a long period might limit future flexibility.
Positive Signals
- Firm-fixed-price contract shifts cost overrun risk to the contractor.
- Full and open competition suggests a competitive market was leveraged.
- The contract aims to achieve energy savings, aligning with federal sustainability goals.
- The long-term nature allows for sustained investment in critical infrastructure.
Sector Analysis
Energy Savings Performance Contracts (ESPCs) are a key mechanism for federal agencies to improve energy efficiency and reduce utility costs without upfront capital investment. These contracts leverage private sector expertise and financing to implement energy conservation measures. The market for ESPCs is substantial, driven by federal mandates for sustainability and cost reduction. This contract fits within the broader energy services sector, specifically focusing on performance-based energy infrastructure improvements.
Small Business Impact
The provided data does not indicate whether small businesses were involved as subcontractors or if this contract included specific small business set-aside provisions. Typically, large ESPC contracts may involve subcontracting opportunities, but the primary awardee is Energy Systems Group LLC. 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 Defense Logistics Agency, with potential involvement from the Department of Energy's Federal Energy Management Program (F3) which oversees ESPCs. Accountability is built into the performance-based nature of the contract, with payments tied to verified energy savings. Transparency is generally maintained through contract award databases and reporting requirements, though specific project details might be sensitive.
Related Government Programs
- Energy Savings Performance Contracts (ESPCs)
- Department of Defense Energy Initiatives
- Federal Energy Management Program (FEMP)
- Defense Logistics Agency Contracts
Risk Flags
- Long-term contract duration may expose government to technological obsolescence.
- Performance verification over 25 years requires sustained oversight and robust M&V.
- Potential for changes in energy markets impacting projected savings.
Tags
energy-savings-performance-contract, department-of-defense, defense-logistics-agency, energy-systems-group-llc, firm-fixed-price, full-and-open-competition, delivery-order, engineering-services, florida, long-term-contract, federal-agency, espc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.1 million to ENERGY SYSTEMS GROUP LLC. IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC)
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 $37.1 million.
What is the period of performance?
Start: 2018-09-26. End: 2043-05-21.
What specific energy conservation measures are included in this contract, and what are the projected energy savings?
The provided data does not detail the specific energy conservation measures (ECMs) to be implemented under this delivery order. ESPCs typically encompass a range of upgrades such as HVAC modernization, lighting retrofits, building envelope improvements, and renewable energy installations. The projected energy savings are contractually defined and verified over the performance period, forming the basis for contractor payment. Without access to the detailed contract statement of work, specific ECMs and savings projections cannot be provided. However, the contract's value and duration suggest a comprehensive suite of measures aimed at significant utility cost reduction and operational efficiency improvements for the Defense Logistics Agency facilities in Florida.
How does the $37 million contract value compare to other similar ESPC projects awarded by the Department of Defense?
Comparing this $37 million contract value requires context regarding the scope and duration of other ESPC projects. ESPCs can range from a few million dollars for smaller facility upgrades to hundreds of millions for large-scale campus modernizations. The Department of Defense is a significant user of ESPCs, with numerous projects across various installations. This $37 million value over 25 years suggests a substantial project, likely involving multiple facilities or significant infrastructure overhauls. To provide a precise comparison, one would need to analyze the total contract values, performance periods, and the specific energy savings goals of comparable DoD ESPC awards. However, it falls within the typical range for significant, long-term energy efficiency investments by federal agencies.
What are the key performance indicators (KPIs) used to measure the success of this energy savings contract?
The primary Key Performance Indicator (KPI) for an Energy Savings Performance Contract (ESPC) is the verified amount of energy and cost savings achieved. Payments to the contractor, Energy Systems Group LLC, are contingent upon demonstrating these savings against a baseline established at the contract's outset. Other potential KPIs could include facility uptime, reduction in greenhouse gas emissions, improvements in energy resilience, and compliance with federal energy mandates. The contract likely specifies detailed measurement and verification (M&V) protocols to track these metrics over the 25-year performance period. Regular reporting and third-party verification are standard components to ensure accountability and validate savings claims.
What is the track record of Energy Systems Group LLC in delivering similar ESPC projects for federal agencies?
Energy Systems Group LLC (ESG) has a significant track record in delivering Energy Savings Performance Contracts (ESPCs) and other energy infrastructure solutions for federal, state, and local government entities. They have been involved in numerous projects aimed at improving energy efficiency, reducing operational costs, and implementing renewable energy solutions. While specific project details and performance metrics for ESG's past federal contracts are not detailed in the provided data, their repeated engagement in this sector, including this substantial DoD contract, suggests a history of successful project execution and client satisfaction. A deeper dive into their project portfolio and client testimonials would provide further insight into their capabilities and reliability.
What are the potential risks associated with a 25-year contract term for energy infrastructure?
A 25-year contract term for energy infrastructure presents several potential risks. Technological advancements could render the installed systems obsolete before the contract ends, or new, more efficient technologies might emerge that are not incorporated. Economic fluctuations or changes in energy prices could impact the accuracy of initial savings projections. Furthermore, the long duration increases the risk of contractor performance issues, changes in government requirements, or unforeseen site conditions. Robust contract management, flexible performance verification protocols, and clear clauses for addressing technological obsolescence or significant market shifts are crucial to mitigate these long-term risks for the government.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: SP060016R0428
Offers Received: 16
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Centerpoint Energy, Inc.
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: $132,649,342
Exercised Options: $132,649,342
Current Obligation: $37,086,789
Actual Outlays: $7,691,043
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: 2018-09-26
Current End Date: 2043-05-21
Potential End Date: 2043-05-21 00:00:00
Last Modified: 2023-11-28
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