Siemens awarded $21.9M for ESPC at Dyess AFB, with a 20-year performance period

Contract Overview

Contract Amount: $21,928,051 ($21.9M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2019-08-23

End Date: 2044-06-01

Contract Duration: 9,049 days

Daily Burn Rate: $2.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ESPC DYESS AFB

Place of Performance

Location: DYESS AFB, TAYLOR County, TEXAS, 79607

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $21.9 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: ESPC DYESS AFB Key points: 1. The contract's long duration suggests a focus on sustained energy efficiency improvements. 2. The firm-fixed-price structure shifts performance risk to the contractor. 3. A high number of bids indicates strong market interest in this type of project. 4. The contract is part of a broader DoD initiative for facility modernization. 5. Performance is benchmarked against energy savings goals, not just cost. 6. The value appears reasonable given the extensive scope and long-term nature of the project.

Value Assessment

Rating: good

The contract value of $21.9 million over approximately 20 years for an Energy Savings Performance Contract (ESPC) at Dyess AFB appears reasonable. ESPCs are designed to generate savings that offset the project costs, making direct value comparisons difficult without knowing the projected savings. However, the fixed-price nature provides cost certainty. Benchmarking against similar large-scale ESPCs for military bases suggests this contract falls within a typical range for comprehensive facility upgrades and energy efficiency measures.

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 healthy level of competition for this significant ESPC project. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive proposals.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the Department of Defense and the personnel at Dyess Air Force Base, who will experience improved facility infrastructure and potentially lower utility costs. The contract delivers energy efficiency upgrades and potentially renewable energy solutions, contributing to the Air Force's sustainability goals. The geographic impact is localized to Dyess Air Force Base in Texas. The project may involve local labor for installation and maintenance, though the primary contractor is a large corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (20 years) could lead to potential scope creep or unforeseen cost increases if not managed tightly.
Reliance on a single large contractor for such an extended period might limit future flexibility or innovation.
The success is heavily dependent on accurate energy savings projections, which can be influenced by external factors.

Positive Signals

Firm-fixed-price contract provides cost certainty and transfers risk to the contractor.
Full and open competition suggests a robust bidding process and potentially competitive pricing.
The contract aligns with federal mandates for energy efficiency and sustainability.
The long performance period allows for comprehensive, long-term improvements.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to energy efficiency and facility modernization. ESPCs are a common procurement method for federal agencies to upgrade infrastructure without upfront capital investment, leveraging future energy savings. The market for energy services to government facilities is substantial, driven by mandates for efficiency and sustainability. Comparable spending benchmarks would involve other large-scale ESPCs awarded to federal installations.

Small Business Impact

This contract was not specifically set aside for small businesses, and the prime contractor, Siemens Government Technologies Inc., is a large corporation. There is no explicit information on subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem is likely indirect, potentially through opportunities if Siemens engages them for specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Performance monitoring would focus on achieving the energy savings outlined in the contract. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Energy Savings Performance Contracts (ESPs)
Department of Defense Facility Modernization Programs
Air Force Energy Efficiency Initiatives
Federal Energy Management Program (FEMP)

Risk Flags

Long-term contract performance risk
Energy price volatility
Technological obsolescence over 20 years

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.9 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. ESPC DYESS AFB

Who is the contractor on this award?

The obligated recipient is SIEMENS GOVERNMENT TECHNOLOGIES INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $21.9 million.

What is the period of performance?

Start: 2019-08-23. End: 2044-06-01.

What is the historical spending trend for ESPCs at Dyess AFB or similar Air Force bases?

Historical spending on ESPCs at Dyess AFB or similar Air Force bases can vary significantly based on the size and scope of modernization projects. Agencies like the Air Force utilize ESPCs to achieve energy efficiency goals and reduce operational costs, often undertaking multi-year projects. Data from the Federal Energy Management Program (FEMP) indicates billions of dollars have been invested in ESPCs across the federal government. Specific trends for Dyess AFB would require a detailed analysis of its past contracts, but generally, such projects are awarded periodically as infrastructure requires upgrades and funding becomes available through energy savings. The $21.9 million awarded here represents a substantial investment in the base's energy infrastructure over its 20-year performance period.

How does the $21.9 million contract value compare to the potential energy savings generated over its 20-year term?

Determining the exact value proposition requires knowing the projected energy savings, which are not explicitly detailed in the provided data. ESPCs are structured such that the contractor guarantees a certain level of savings, and the government pays for the project using a portion of those savings. A common benchmark is that the project cost should be recouped within 10-15 years through savings. If this $21.9 million contract is projected to generate savings that fully cover the cost within this timeframe, and continue to provide net savings for the remaining years of the contract, it would represent good value. Without the specific savings guarantee, a precise comparison is not possible, but the long-term nature suggests significant, sustained improvements are anticipated.

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 potential changes in energy prices, technological obsolescence, and the contractor's ability to maintain performance over such an extended duration. Fluctuations in energy markets could impact the projected savings, potentially making the contract less financially advantageous than initially anticipated. Furthermore, technology advancements over two decades might render the installed systems less efficient compared to newer alternatives. Ensuring the contractor remains financially stable and operationally capable for the entire contract term is also a consideration. Robust contract management and performance monitoring are crucial to mitigate these long-term risks.

What specific energy efficiency measures are likely included in this ESPC at Dyess AFB?

While the specific measures are not detailed, ESPCs typically encompass a range of energy conservation measures (ECMs) aimed at reducing consumption and improving facility performance. For a large military installation like Dyess AFB, these could include upgrades to HVAC systems, lighting retrofits (e.g., LED conversions), building envelope improvements (insulation, windows), water conservation measures, and potentially the installation of renewable energy sources like solar panels. The contract likely also includes smart building controls and energy management systems to optimize usage and monitor performance throughout the 20-year period.

How does the 'full and open competition' impact the cost-effectiveness for taxpayers?

Full and open competition generally enhances cost-effectiveness for taxpayers by fostering a competitive bidding environment. When multiple qualified contractors vie for a contract, they are incentivized to offer their best pricing and most innovative solutions to win the award. This process helps ensure that the government is not overpaying and that the selected proposal represents a strong balance of cost, technical merit, and performance. The presence of 3 bidders in this case suggests sufficient market interest to drive competitive pricing, which is beneficial for taxpayer value.

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: W912DY12R0046

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 2231 CRYSTAL DR STE 700, ARLINGTON, VA, 22202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $83,305,948

Exercised Options: $83,305,948

Current Obligation: $21,928,051

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $27,025,682

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY15D0050

IDV Type: IDC

Timeline