VA awards $10.7M energy efficiency contract to Energy Systems Group LLC for Palo Alto facility
Contract Overview
Contract Amount: $10,721,031 ($10.7M)
Contractor: Energy Systems Group LLC
Awarding Agency: Department of Veterans Affairs
Start Date: 2014-06-30
End Date: 2026-06-01
Contract Duration: 4,354 days
Daily Burn Rate: $2.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: IGF::CT::IGF ESPC PALO ALTO
Place of Performance
Location: PALO ALTO, SANTA CLARA County, CALIFORNIA, 94304
Plain-Language Summary
Department of Veterans Affairs obligated $10.7 million to ENERGY SYSTEMS GROUP LLC for work described as: IGF::CT::IGF ESPC PALO ALTO Key points: 1. Contract focuses on energy conservation measures and infrastructure upgrades. 2. Competition was full and open, suggesting a competitive bidding process. 3. The contract duration is substantial, spanning over 12 years. 4. Firm Fixed Price contract type aims to control costs. 5. The contract is a delivery order under a larger indefinite-delivery vehicle. 6. The contractor has experience in energy systems and engineering services.
Value Assessment
Rating: good
The contract value of $10.7 million for energy efficiency upgrades appears reasonable given the extensive 12-year duration and the scope of work likely involving significant infrastructure improvements. Benchmarking against similar large-scale energy performance contracts (ESPCs) for federal facilities would provide a more precise value assessment. The firm fixed price structure offers cost certainty to the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred, the exact number of bidders can influence price discovery.
Taxpayer Impact: Full and open competition generally leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition awards.
Public Impact
The primary beneficiary is the Department of Veterans Affairs (VA) facility in Palo Alto, California, which will receive energy efficiency upgrades. Services delivered include the implementation of energy conservation measures and modernization of facility infrastructure. The geographic impact is localized to the Palo Alto VA facility. The contract supports jobs in the engineering and energy services sectors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to scope creep or changing technological needs over time.
- Reliance on a single delivery order under a larger IDIQ may limit flexibility if multiple vendors were needed for specialized tasks.
- Potential for cost overruns if initial energy savings projections are not met, despite fixed-price structure.
Positive Signals
- Firm fixed price contract provides cost certainty for the government.
- Full and open competition suggests a robust bidding process.
- Focus on energy efficiency aligns with federal sustainability goals.
- Contractor has experience in engineering services, indicating relevant expertise.
Sector Analysis
This contract falls within the Engineering Services sector, specifically focusing on energy efficiency and infrastructure upgrades for federal facilities. The market for energy performance contracts is significant, driven by government mandates for energy reduction and cost savings. Comparable spending benchmarks would involve analyzing other ESPCs awarded to federal agencies for similar facility types and scopes of work.
Small Business Impact
The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this specific award, though the prime contractor may engage small businesses as subcontractors.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of Veterans Affairs. Accountability measures are embedded in the firm fixed price structure and performance requirements. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Energy Savings Performance Contracts (ESPCs)
- Federal Energy Management Program (FEMP)
- Department of Veterans Affairs Facility Management
- Engineering Services Contracts
Risk Flags
- Long contract duration may outpace technological advancements.
- Potential for energy savings projections to be overly optimistic.
- Dependence on a single delivery order for a large project.
Tags
energy, engineering-services, department-of-veterans-affairs, delivery-order, firm-fixed-price, full-and-open-competition, california, large-contract, energy-efficiency, infrastructure-upgrades
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $10.7 million to ENERGY SYSTEMS GROUP LLC. IGF::CT::IGF ESPC PALO ALTO
Who is the contractor on this award?
The obligated recipient is ENERGY SYSTEMS GROUP LLC.
Which agency awarded this contract?
Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).
What is the total obligated amount?
The obligated amount is $10.7 million.
What is the period of performance?
Start: 2014-06-30. End: 2026-06-01.
What specific energy conservation measures are included in this contract?
The provided data does not detail the specific energy conservation measures (ECMs) to be implemented under this contract. Typically, ESPCs involve upgrades such as high-efficiency lighting, HVAC system modernization, building envelope improvements, water conservation measures, and renewable energy installations. The exact scope would be defined in the detailed statement of work within the contract documentation, which is not publicly available in this dataset. The contract's focus on 'energy efficiency' and 'infrastructure upgrades' suggests a comprehensive approach to reducing energy consumption and operational costs at the Palo Alto VA facility.
How does the $10.7 million cost compare to similar energy efficiency projects at VA facilities?
Directly comparing the $10.7 million cost without knowing the specific scope, duration, and energy savings potential makes a precise benchmark difficult. However, ESPCs can range from hundreds of thousands to tens of millions of dollars, depending on the size and complexity of the facility and the implemented measures. For a large federal facility like a VA hospital, a 12-year contract valued at $10.7 million suggests a significant project. To provide a robust comparison, one would need to analyze other VA ESPCs awarded over similar timeframes and for comparable facility types, looking at metrics like cost per square foot or projected annual energy savings.
What is the track record of Energy Systems Group LLC in performing similar federal contracts?
Energy Systems Group LLC (ESG) has a history of performing energy-related contracts, including ESPCs, for various federal agencies. While the provided data confirms they were awarded this specific VA contract, a comprehensive assessment of their track record would require reviewing their past performance evaluations, contract history, and any reported issues on federal procurement databases. ESG's specialization in energy infrastructure and efficiency suggests they possess the necessary expertise. However, a deeper dive into their performance on previous, similar ESPCs would be needed to fully evaluate their reliability and success rate.
What are the projected energy savings and return on investment for this contract?
The provided data does not include specific figures for projected energy savings or the return on investment (ROI) for this contract. ESPCs are designed such that the guaranteed energy savings generated over the contract's life are intended to cover the project costs and provide a net financial benefit to the government. The Department of Veterans Affairs would have established these savings projections during the procurement process, likely based on detailed energy audits. These projections are crucial for validating the value proposition of the contract and ensuring it meets financial performance targets.
What risks are associated with a 12-year contract for energy efficiency upgrades?
A 12-year contract duration presents several risks. Technological advancements in energy efficiency could render implemented solutions outdated before the contract ends. Changes in energy prices or federal energy policies could impact the projected savings and ROI. Furthermore, the long timeframe increases the potential for unforeseen facility issues, changes in operational needs, or contractor performance degradation. Effective contract management, including regular performance reviews and flexibility clauses, is essential to mitigate these long-term risks and ensure the project remains aligned with evolving requirements and best practices.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › QUALITY CONTROL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
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: $10,721,031
Exercised Options: $10,721,031
Current Obligation: $10,721,031
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: 2014-06-30
Current End Date: 2026-06-01
Potential End Date: 2026-06-01 00:00:00
Last Modified: 2025-12-09
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