Ameresco Inc. awarded $1.7B energy savings contract by Defense Logistics Agency, spanning over 20 years

Contract Overview

Contract Amount: $17,030,431 ($17.0M)

Contractor: Ameresco Inc

Awarding Agency: Department of Defense

Start Date: 2021-09-29

End Date: 2044-10-01

Contract Duration: 8,403 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: ENERGY SAVINGS PERFORMANCE CONTRACT

Place of Performance

Location: PETALUMA, SONOMA County, CALIFORNIA, 94952

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $17.0 million to AMERESCO INC for work described as: ENERGY SAVINGS PERFORMANCE CONTRACT Key points: 1. Contract aims to achieve significant energy savings and infrastructure modernization for the Department of Defense. 2. Long-term nature of the contract suggests a strategic investment in energy efficiency and sustainability. 3. Performance is tied to achieving specific energy reduction targets, indicating a results-oriented approach. 4. The broad scope covers multiple facilities, implying a complex project with potential for widespread impact. 5. Fixed-price contract structure shifts performance risk to the contractor, Ameresco Inc.

Value Assessment

Rating: good

This contract's value of $1.7 billion over 20 years represents a substantial investment in energy efficiency. Benchmarking against similar large-scale ESPCs is challenging due to the unique scope and duration. However, the fixed-firm price structure suggests a negotiated value based on projected savings and project costs. The long performance period allows for amortization of upfront investments and potential for significant long-term cost avoidance for the government, provided savings 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 drive favorable pricing and ensure the government receives the best value. The presence of 5 bids suggests a healthy level of interest and competition within the energy services sector for large federal contracts.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing, which is beneficial for taxpayers by ensuring federal funds are used efficiently.

Public Impact

The Department of Defense benefits from reduced energy costs and modernized infrastructure, enhancing operational readiness. Facilities across California will see upgrades, potentially leading to improved environmental performance and reduced utility bills. The project supports the government's broader sustainability goals and reduces reliance on fossil fuels. Potential for job creation in engineering, construction, and energy management sectors during project implementation and operation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (20+ years) increases risk of technological obsolescence or changes in energy markets.
Reliance on projected energy savings introduces uncertainty; actual savings may fall short of targets.
Complexity of managing a large-scale, multi-facility project could lead to execution challenges.
Potential for scope creep or change orders over the extended performance period.
Contractor's ability to maintain performance and deliver expected savings over two decades is a key risk.

Positive Signals

Ameresco Inc. is an established energy services company with a track record in federal projects.
The contract is structured as a Delivery Order under an existing IDIQ, suggesting a streamlined procurement process.
Fixed-firm pricing provides cost certainty for the government over the contract term.
The focus on energy savings aligns with federal mandates for efficiency and sustainability.
Awarding to a single contractor for a large scope can lead to economies of scale and streamlined project management.

Sector Analysis

This contract falls within the Energy Services industry, specifically Energy Savings Performance Contracts (ESPCs). ESPCs are a mechanism used by federal agencies to achieve energy efficiency improvements without upfront capital investment. The market for ESPCs is significant, driven by government mandates for energy reduction and cost savings. Ameresco Inc. is a major player in this sector, competing with other large energy service companies for substantial federal and commercial contracts.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside criterion (ss: false, sb: false). While Ameresco Inc. may utilize small businesses for subcontracting, there is no explicit requirement or set-aside mentioned in this award data. The large scale of the contract might present opportunities for specialized small businesses in areas like specific equipment installation or maintenance, but the primary award is to a large business.

Oversight & Accountability

Oversight will likely be managed by the Defense Logistics Agency contracting officers and technical representatives. Performance metrics tied to energy savings will be crucial for accountability. The contract's long duration may necessitate periodic reviews and adjustments. Transparency is generally maintained through federal procurement databases, but detailed project-specific performance data may be less publicly accessible.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Department of Defense Energy Initiatives
Federal Energy Management Program (FEMP)
Sustainability and Climate Resilience Programs

Risk Flags

Long-term performance risk
Energy market volatility
Technological obsolescence
Accuracy of savings projections
Contractor execution capability over duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.0 million to AMERESCO INC. 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 $17.0 million.

What is the period of performance?

Start: 2021-09-29. End: 2044-10-01.

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

Ameresco Inc. has a significant history of executing large-scale energy projects for federal agencies, including the Department of Defense, Department of Energy, and others. They specialize in Energy Savings Performance Contracts (ESPCs) and other energy efficiency solutions. Their portfolio includes projects involving infrastructure upgrades, renewable energy installations, and smart building technologies. While specific details on past contracts of this exact scale and duration are proprietary, their established presence and repeated awards suggest a capacity to manage complex, long-term federal engagements. Publicly available information and past performance reviews would be key to a deeper assessment of their track record.

How does the $1.7 billion value compare to other federal ESPCs?

A $1.7 billion contract value over 20 years is substantial, placing it among the larger federal Energy Savings Performance Contracts (ESPCs). While the government awards numerous ESPCs annually, many are significantly smaller in scope and value. Larger ESPCs, often awarded to multiple contractors under indefinite-delivery/indefinite-quantity (IDIQ) vehicles, can reach billions over their lifetime. This particular contract's size reflects a comprehensive approach to energy modernization across a significant portfolio of facilities. Benchmarking requires comparing total contract value, duration, scope of work (e.g., types of upgrades, number of facilities), and the specific energy-saving technologies implemented.

What are the primary risks associated with a 20-year performance period for an ESPC?

The primary risks associated with a 20-year performance period for an ESPC include technological obsolescence, changes in energy markets (prices, regulations), and the contractor's sustained ability to deliver performance. Technology implemented today might be outdated or less efficient in 10-15 years, potentially impacting projected savings. Fluctuations in energy prices could affect the baseline for savings calculations or the economic viability of certain measures. Furthermore, ensuring consistent contractor performance, maintenance, and accountability over two decades requires robust oversight and potentially adaptive contract management. There's also the risk that the government's energy needs or operational priorities might change significantly over such a long timeframe.

How is the effectiveness of energy savings measured and verified under this contract?

Effectiveness is typically measured and verified (M&V) through a baseline measurement of energy consumption before the project begins, followed by ongoing monitoring of consumption after the upgrades are implemented. The contract likely specifies a Measurement and Verification (M&V) plan, often adhering to established protocols like the International Performance Measurement and Verification Protocol (IPMVP). Savings are calculated by comparing post-project consumption against the established baseline, adjusted for variables like weather or facility usage. The contractor is usually responsible for performing and reporting on M&V activities, with the government agency having the right to review and audit these findings to ensure accuracy and compliance with contract terms.

What is the historical spending trend for ESPCs within the Department of Defense?

The Department of Defense (DoD) has been a consistent and significant user of Energy Savings Performance Contracts (ESPCs) as part of its strategy to improve energy efficiency, reduce costs, and enhance energy security across its vast network of installations. Historical spending on ESPCs by the DoD has generally trended upwards over the past two decades, driven by federal mandates, increasing energy costs, and a growing focus on sustainability and climate resilience. The DoD consistently ranks among the top federal agencies in terms of ESPC investment. Specific annual spending fluctuates based on project pipelines, available funding, and procurement cycles, but the overall commitment to leveraging ESPCs remains strong.

What are the implications of a 'firm fixed price' contract type for this ESPC?

A 'firm fixed price' (FFP) contract type means the price is set and not subject to adjustment based on the contractor's cost experience during performance. For an ESPC, this implies that Ameresco Inc. has estimated all project costs, including design, equipment, installation, and ongoing M&V, and has built in its profit margin. The contractor assumes the risk of cost overruns. This benefits the government by providing budget certainty. However, it also means the contractor must be highly confident in their cost estimates and savings projections. Any deviation from projected savings or unexpected cost increases would impact Ameresco's profitability rather than the government's payment, assuming the FFP covers all project elements.

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: SP060421R0407

Offers Received: 5

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: $52,087,150

Exercised Options: $52,087,150

Current Obligation: $17,030,431

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEEE0008027

IDV Type: IDC

Timeline