DoD's $30M lighting upgrade contract awarded to NORESCO, LLC for 10 years
Contract Overview
Contract Amount: $29,972,730 ($30.0M)
Contractor: Noresco, LLC
Awarding Agency: Department of Defense
Start Date: 2020-08-28
End Date: 2029-11-30
Contract Duration: 3,381 days
Daily Burn Rate: $8.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ECM 1 LIGHTING UPGRADES BLDGS A-E, RDWYS
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20301
Plain-Language Summary
Department of Defense obligated $30.0 million to NORESCO, LLC for work described as: ECM 1 LIGHTING UPGRADES BLDGS A-E, RDWYS Key points: 1. Value-for-money assessment indicates potential for significant long-term energy savings through LED retrofits. 2. Competition dynamics show a full and open process, suggesting a competitive bidding environment. 3. Risk indicators include potential for cost overruns if project scope expands beyond initial lighting upgrades. 4. Performance context is tied to energy efficiency goals and infrastructure modernization within Army facilities. 5. Sector positioning places this contract within the energy services and building modernization market.
Value Assessment
Rating: good
The contract's firm fixed-price structure provides cost certainty for the government. While the total award value is substantial, the long-term energy savings from LED retrofits are expected to offset this cost over the contract's lifespan. Benchmarking against similar large-scale facility energy efficiency projects suggests the pricing is within a reasonable range, especially considering the scope and duration.
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. The presence of 7 bidders suggests a healthy level of competition for this project, which typically leads to more favorable pricing for the government.
Taxpayer Impact: A competitive bidding process helps ensure taxpayer dollars are used efficiently by driving down costs and encouraging innovative solutions.
Public Impact
The primary beneficiaries are the Department of Defense and the Department of the Army, through reduced operational costs and improved facility infrastructure. Services delivered include the upgrade of lighting systems in buildings and roadways, contributing to energy efficiency and modernization. The geographic impact is concentrated in the District of Columbia, where the facilities are located. Workforce implications may include specialized labor for installation and maintenance of new lighting systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep beyond initial lighting upgrades could increase costs.
- Long duration of the contract (nearly 10 years) may introduce risks related to technology obsolescence or changing energy prices.
- Dependence on a single contractor for a decade could limit flexibility in adopting newer technologies if they emerge.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Focus on energy efficiency aligns with federal sustainability goals.
- Full and open competition suggests a competitive award process.
- Long-term contract allows for sustained focus on infrastructure modernization.
Sector Analysis
This contract falls within the energy services sector, specifically focusing on building retrofits and energy efficiency upgrades. The market for such services is substantial, driven by government mandates for sustainability and cost reduction. Comparable spending benchmarks for large federal facility modernization projects often run into tens of millions of dollars, reflecting the scale and complexity of these endeavors.
Small Business Impact
The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). While NORESCO, LLC is the prime contractor, there is no explicit information provided on subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether NORESCO actively seeks small business subcontractors for specialized services or materials.
Oversight & Accountability
The contract is a firm fixed-price delivery order, which inherently provides a degree of cost control. Oversight mechanisms would typically involve contract officers, technical representatives, and potentially facility managers to ensure performance and adherence to specifications. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed spending breakdowns may not always be publicly accessible.
Related Government Programs
- Federal Energy Management Program
- Department of Defense Energy Efficiency Initiatives
- GSA Public Buildings Service Contracts
- Energy Savings Performance Contracts (ESPCs)
Risk Flags
- Long contract duration may lead to technology obsolescence.
- Potential for scope creep beyond initial lighting upgrades.
- Energy price volatility could affect savings realization.
Tags
defense, department-of-defense, department-of-the-army, energy-services, building-modernization, lighting-upgrades, firm-fixed-price, full-and-open-competition, district-of-columbia, large-contract, energy-efficiency
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.0 million to NORESCO, LLC. ECM 1 LIGHTING UPGRADES BLDGS A-E, RDWYS
Who is the contractor on this award?
The obligated recipient is NORESCO, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $30.0 million.
What is the period of performance?
Start: 2020-08-28. End: 2029-11-30.
What is the historical spending pattern for lighting upgrades within the Department of the Army, and how does this contract compare?
Historical spending on lighting upgrades within the Department of the Army can vary significantly based on facility size, age, and modernization priorities. While specific aggregate data for lighting upgrades alone is not readily available in public databases, large-scale facility modernization projects, which often include lighting retrofits, can range from hundreds of thousands to tens of millions of dollars. This $30 million contract for a decade-long project in the District of Columbia appears to be a substantial investment, likely encompassing a significant portfolio of buildings and roadways. Comparing it to individual, smaller-scale lighting projects would be misleading due to the scope and duration. It is more comparable to broader energy efficiency or infrastructure overhaul contracts awarded to large energy service companies.
What are the key performance indicators (KPIs) for this contract, and how is success measured?
Key performance indicators for this ECM 1 LIGHTING UPGRADES contract would likely focus on energy savings achieved, operational cost reductions, and successful implementation of the new lighting systems within the specified buildings and roadways. Success would be measured by the contractor's ability to meet or exceed projected energy reduction targets, ensure the reliability and longevity of the installed fixtures, and complete the project within the agreed-upon timeline and budget. The firm fixed-price nature of the contract implies that the contractor bears the risk of cost overruns, incentivizing efficient project management. Regular performance reviews by the contracting officer and technical representatives would track progress against these KPIs.
What is NORESCO, LLC's track record with similar large-scale federal energy efficiency contracts?
NORESCO, LLC has a significant track record of executing large-scale energy efficiency projects for federal agencies, including the Department of Defense and other branches of the military. They are known for their expertise in performance contracting, which involves guaranteeing energy savings. Their portfolio often includes comprehensive building retrofits, HVAC upgrades, and lighting modernization projects across extensive government facilities. Past projects have demonstrated their capability to manage complex, multi-year initiatives and deliver substantial cost savings and environmental benefits. Their experience suggests they are well-equipped to handle the scope and duration of this particular contract.
How does the $30 million award compare to the estimated market value for similar lighting upgrade projects?
Estimating the precise market value for a project of this scale and duration is complex, as it depends heavily on the specific scope of work, the number and type of buildings, geographic location, and the technologies employed. However, given that this is a 10-year contract for extensive lighting upgrades across multiple buildings and roadways, a $30 million award suggests a comprehensive, long-term solution. Market analyses for large federal energy efficiency projects, which often bundle lighting with other upgrades, indicate that total project costs can easily reach tens of millions of dollars. The full and open competition with 7 bidders suggests the award price was competitive within the market for such large-scale, performance-based contracts.
What are the potential risks associated with a nearly 10-year contract for lighting upgrades?
The primary risks associated with a nearly 10-year contract for lighting upgrades include technological obsolescence, changes in energy pricing, and potential contractor performance issues over an extended period. Lighting technology, particularly LED, is rapidly evolving. By the end of the contract, newer, more efficient, or cost-effective technologies may be available. Fluctuations in energy prices could impact the realized savings and the contract's overall financial viability. Furthermore, maintaining consistent performance and responsiveness from a contractor over such a long duration can be challenging, requiring robust oversight and contract management to ensure objectives are met and issues are addressed promptly.
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: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1 RESEARCH DR STE 400 C, WESTBOROUGH, MA, 01581
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $57,559,974
Exercised Options: $57,559,974
Current Obligation: $29,972,730
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $162,237
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W912DY15D0047
IDV Type: IDC
Timeline
Start Date: 2020-08-28
Current End Date: 2029-11-30
Potential End Date: 2029-11-30 00:00:00
Last Modified: 2024-07-24
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