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Jan. 14, 2009: DOE Awards 16 Performance Contracts for up to $80 Billion at Federal Facilities

January 14, 2009
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WASHINGTON - The U.S. Department of Energy (DOE) has announced the award of 16 new Indefinite Delivery Indefinite Quantity (IDIQ) Energy Savings Performance Contracts (ESPCs) that could result in up to $80 billion in energy efficiency, renewable energy, and water conservation projects at federally-owned buildings and facilities.

“This set of awards will ensure that federal agencies have access to powerful tools for alternative financing at a scale that is needed to meet our challenge of reducing energy intensity, increasing the use of renewable energy, and decreasing water consumption,” said Energy Secretary Samuel W. Bodman.

In August 2007, Bodman launched the Transformational Energy Action Management (TEAM) Initiative, a Department-wide effort aimed at reducing energy intensity across the nationwide DOE complex by 30 percent. The TEAM Initiative aims to meet or exceed the aggressive goals for increasing energy efficiency throughout the federal government already laid out by President Bush through Executive Order 13423.

Companies that received the new performance contracts include: Honeywell International, Johnson Controls Government Systems, McKinstry Essention, Noresco (a unit of Carrier Corp.), Siemens Government Services, TAC, and Trane.

The goals set out in Executive Order 13423 and the requirements put forth by Congress in the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 include a 30 percent reduction in energy intensity and a 16 percent reduction in water use by 2015, and an increase of renewable energy to 7.5 percent of electricity needs by 2013 for federal facilities.

ESPCs enable agencies to undertake energy savings projects without paying upfront capital costs. Under an ESPC, the performance contracting company designs, constructs, and obtains the necessary financing for an energy savings project, and the agency makes payments over time to the contractor from the savings reduction in utility bills, which the contractor guarantees the efficiency improvements will generate.

The new performance contracts provide for a maximum individual contract value of $5 billion over the life of the contract, eliminate technology specific restrictions, and allow federal agencies to use these contracts in federal buildings nationally and internationally. In addition, ESPCs now include a greater emphasis on renewable energy and water conservation projects.

Publication date: 01/12/2009

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