Energy savings contract for Department of Defense awarded to Ameresco Inc. for $60.7M over 15 years

Contract Overview

Contract Amount: $60,716,495 ($60.7M)

Contractor: Ameresco Inc

Awarding Agency: Department of Defense

Start Date: 2018-09-10

End Date: 2043-07-10

Contract Duration: 9,069 days

Daily Burn Rate: $6.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT

Place of Performance

Location: LACKLAND AFB, BEXAR County, TEXAS, 78236

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $60.7 million to AMERESCO INC for work described as: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT Key points: 1. Contract aims to achieve significant energy cost reductions and operational efficiencies. 2. Ameresco Inc. has a track record in performance contracting, suggesting potential for successful project execution. 3. Long contract duration presents opportunities for sustained savings but also carries long-term performance risks. 4. The contract's fixed-price nature shifts performance risk to the contractor. 5. Focus on energy infrastructure upgrades implies modernization and improved facility resilience.

Value Assessment

Rating: good

The contract value of $60.7 million over approximately 15 years suggests a substantial investment in energy infrastructure. Benchmarking against similar Energy Savings Performance Contracts (ESPCs) is challenging without specific project details, but the duration and scope indicate a significant undertaking. The firm-fixed-price structure is generally favorable for the government, ensuring costs are defined upfront, though it requires careful monitoring to ensure performance targets are met.

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 yield favorable pricing and innovative solutions. The presence of 10 bids suggests a robust market response, which typically benefits the government by driving down costs and improving the quality of proposals.

Taxpayer Impact: Full and open competition maximizes taxpayer value by ensuring the government receives the best possible price and performance through a wide range of potential bidders.

Public Impact

The Department of Defense benefits from reduced utility costs and improved energy security. Facilities in Texas will see upgrades to energy systems, potentially leading to enhanced operational capabilities. The project supports the government's broader goals for energy efficiency and sustainability. Workforce implications may include specialized technical roles for installation and maintenance of new energy systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term performance guarantees need rigorous monitoring to ensure savings are realized.
Potential for scope creep or unforeseen technical challenges over the contract's extended period.
Dependence on contractor expertise requires strong government oversight to validate savings claims.

Positive Signals

Ameresco Inc. is a recognized leader in the energy efficiency sector.
Firm-fixed-price contract structure provides cost certainty for the government.
The contract leverages private sector expertise to achieve public sector energy goals.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to energy infrastructure and efficiency. The market for ESPCs is significant, driven by government mandates and the desire for cost savings. Comparable spending benchmarks would typically involve analyzing other large-scale ESPCs awarded to federal agencies, which often range from tens to hundreds of millions of dollars depending on the scope and duration.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, large prime contractors like Ameresco Inc. are often required to meet subcontracting goals. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight will likely involve regular performance reviews, energy audits, and verification of savings achieved against baseline measurements. The Defense Contract Audit Agency (DCAA) and the agency's own Inspector General may provide oversight. Transparency is facilitated through contract reporting requirements and performance metrics.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Department of Defense Energy Initiatives
Federal Energy Management Program (FEMP)
Utility Energy Services Contracts (UESC)

Risk Flags

Long-term contract duration requires sustained oversight.
Performance verification is critical to ensure savings realization.
Potential for technological obsolescence over 15 years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.7 million to AMERESCO INC. IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT

Who is the contractor on this award?

The obligated recipient is AMERESCO INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $60.7 million.

What is the period of performance?

Start: 2018-09-10. End: 2043-07-10.

What is Ameresco Inc.'s track record with similar large-scale federal energy savings contracts?

Ameresco Inc. has a substantial history of executing Energy Savings Performance Contracts (ESPCs) for federal agencies, including the Department of Defense, Department of Energy, and others. They have completed numerous projects involving facility upgrades, renewable energy integration, and smart building technologies. Their experience often includes managing complex, multi-year projects with significant capital investment and guaranteed savings. Publicly available information and past performance reviews would provide a more detailed assessment of their success rates, client satisfaction, and ability to meet or exceed guaranteed savings targets across their portfolio of federal contracts.

How does the $60.7 million contract value compare to other federal ESPCs?

The $60.7 million contract value for this 15-year ESPC is substantial, placing it among larger federal energy efficiency projects. ESPCs can vary widely in value, from a few million dollars for smaller facility upgrades to hundreds of millions for comprehensive campus-wide modernizations. Contracts of this magnitude typically involve significant infrastructure overhauls, such as HVAC system replacements, building envelope improvements, lighting retrofits, and potentially renewable energy installations. The duration of 15 years is also typical for ESPCs, allowing sufficient time to recoup investment through energy savings. Comparing it directly requires knowledge of the specific scope and number of facilities covered, but it represents a significant commitment to energy efficiency.

What are the primary risks associated with a 15-year firm-fixed-price energy savings contract?

The primary risks with a long-term, firm-fixed-price ESPC include potential changes in energy prices that could make the guaranteed savings less impactful or, conversely, more beneficial than anticipated, impacting the contractor's profit margin or the government's actual savings. There's also the risk of technological obsolescence over 15 years, where installed systems might become outdated. Performance risk is mitigated by the fixed-price structure, but ensuring the contractor maintains optimal performance and provides adequate maintenance throughout the contract term requires diligent government oversight. Furthermore, unforeseen facility conditions or changes in operational needs could complicate project execution and savings verification.

How is the 'energy savings' typically measured and verified in such contracts?

Energy savings in ESPCs are typically measured and verified (M&V) through a process defined in the contract, often following established protocols like the International Performance Measurement and Verification Protocol (IPMVP). This involves establishing a baseline of energy consumption before the project begins, using historical data adjusted for variables like weather and occupancy. After project implementation, ongoing energy use is monitored. Savings are calculated as the difference between the adjusted baseline consumption and the actual post-project consumption. Independent third-party verification or government-led reviews are common to ensure the accuracy and integrity of the savings claims, which directly impacts contractor payment and government cost reductions.

What is the typical lifecycle cost impact of such an investment for the government?

The lifecycle cost impact of an ESPC like this is generally positive for the government, provided the project is well-executed and savings are realized as guaranteed. The initial investment is typically financed by the future energy savings, meaning the government often pays little to no upfront capital cost. Over the contract's 15-year term, the government benefits from reduced utility bills, lower maintenance costs for upgraded equipment, and potentially improved facility resilience and comfort. While the total contract value is $60.7 million, the net cost to the government over the lifecycle should be significantly less, potentially even resulting in a net financial gain if savings exceed projections and financing costs. This approach allows agencies to modernize infrastructure without direct capital appropriations.

What are the implications of the contract being awarded in Texas (st: TX)?

The contract being awarded for facilities in Texas (st: TX) implies that the energy efficiency upgrades will be implemented within that state. This geographic focus means the savings will directly benefit Department of Defense operations in Texas. It may also involve compliance with specific state or local energy regulations and utility rate structures prevalent in Texas. The climate in Texas, characterized by significant cooling demands, often presents substantial opportunities for energy savings through HVAC and building envelope improvements, which are likely components of this contract.

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: SP060016R0423

Offers Received: 10

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: $280,099,542

Exercised Options: $280,099,542

Current Obligation: $60,716,495

Actual Outlays: $39,928,870

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