Department of Defense awards $60.67M contract for facilities support services to NORESCO, LLC

Contract Overview

Contract Amount: $20,386,402 ($20.4M)

Contractor: Noresco, LLC

Awarding Agency: Department of Defense

Start Date: 2004-01-28

End Date: 2021-02-28

Contract Duration: 6,241 days

Daily Burn Rate: $3.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200412!001830!2100!W912DY!* !DACA8797D0063 !A!N! !N!0002 !07 !20040128!20010419!606727402!606727402!007915663!N!NORESCO, LLC !ONE RESEARCH DRIVE !WESTBOROUGH !MA!01581!00100!017!01!ABANDA !CHAMBERS !ALABAMA !+000006715367!N!N!000000000000!H935!OTHER QUALITY CNTL SVCS/SERVICE & TRADE EQUIPMENT !S1 !SERVICES !000 !* !561210!E! !5!B!M!D!A! !99990909!B! ! !N!Z!A!U!J!2!002!A! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: HOLTSVILLE, SUFFOLK County, NEW YORK, 00501

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $20.4 million to NORESCO, LLC for work described as: 200412!001830!2100!W912DY!* !DACA8797D0063 !A!N! !N!0002 !07 !20040128!20010419!606727402!606727402!007915663!N!NORESCO, LLC !ONE RESEARCH DRIVE !WESTBOROUGH !MA!01581!00100!017!01!ABANDA !CHAM… Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration is substantial, spanning over 5 years, indicating a long-term need for these services. 3. The agency's selection of a single contractor for this period may warrant scrutiny regarding ongoing performance and value. 4. The services provided fall under Facilities Support Services, a broad category essential for operational readiness. 5. The contract's value is significant, requiring careful monitoring of performance against cost.

Value Assessment

Rating: fair

The contract value of $60.67 million over approximately 5 years for facilities support services appears to be within a reasonable range for large-scale government contracts of this nature. However, without specific benchmarks for the exact services rendered (e.g., energy efficiency upgrades, maintenance, etc.), a precise value-for-money assessment is challenging. Comparing this to similar indefinite-delivery indefinite-quantity (IDIQ) contracts or task orders for facilities management and energy services would provide better context. The fixed-price nature of the contract offers some cost certainty, but the overall value depends heavily on the contractor's efficiency and the actual services delivered.

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 fact that it resulted in a single award suggests that NORESCO, LLC was the most advantageous offer based on the evaluation criteria. The number of bidders is not specified, but full and open competition generally promotes price discovery and encourages multiple vendors to offer competitive pricing.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically leads to more competitive pricing and a wider selection of qualified contractors, potentially reducing overall costs for government services.

Public Impact

The primary beneficiaries are the Department of Defense and its various installations, which will receive essential facilities support services. Services likely include maintenance, repair, energy management, and potentially upgrades to physical infrastructure, ensuring operational readiness. The geographic impact is likely concentrated around the specific military installations or facilities managed by the Department of the Army, though the exact locations are not detailed. The contract supports jobs within the facilities management and service industries, both directly with the prime contractor and indirectly through any subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the definition of 'facilities support services' is not tightly managed.
Reliance on a single contractor for an extended period could lead to complacency or reduced innovation if not actively managed.
Performance monitoring is crucial to ensure the contractor meets all service level agreements and delivers value for the funds expended.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The fixed-price contract type provides cost predictability for the government.
The contractor, NORESCO, LLC, is a known entity in energy services and facility management, implying relevant expertise.

Sector Analysis

Facilities Support Services (NAICS 561210) is a significant sector within the broader professional, scientific, and technical services industry. This contract represents a substantial portion of spending within this specific sub-sector. The market for facilities management and energy services for government entities is large, driven by the need to maintain extensive infrastructure and optimize energy consumption. Comparable spending benchmarks would involve looking at other large-scale facilities support contracts awarded by federal agencies, particularly those focused on energy efficiency and operational resilience.

Small Business Impact

The data does not indicate if this contract included specific small business set-asides or subcontracting goals. As a large prime contract, there is potential for significant subcontracting opportunities for small businesses within the facilities support and related service industries. However, without explicit set-aside provisions or reporting requirements, the extent of small business participation remains unknown and dependent on the prime contractor's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded in the contract's performance work statement (PWS), including service level agreements (SLAs), key performance indicators (KPIs), and reporting requirements. Transparency is generally maintained through contract award databases and public reporting, though detailed operational oversight specifics are internal.

Related Government Programs

Department of Defense Facilities Management
Energy Efficiency and Renewable Energy (EERE) Programs
Base Operations Support (BOS)
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts
Professional, Scientific, and Technical Services

Risk Flags

Long-term single award
Potential for performance degradation over time
Need for robust oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.4 million to NORESCO, LLC. 200412!001830!2100!W912DY!* !DACA8797D0063 !A!N! !N!0002 !07 !20040128!20010419!606727402!606727402!007915663!N!NORESCO, LLC !ONE RESEARCH DRIVE !WESTBOROUGH !MA!01581!00100!017!01!ABANDA !CHAMBERS !ALABAMA !+000006715367!N!N!000000000000!H935!OTHER QUALITY CNTL SVCS/SERVICE & TRADE EQUIPMENT !S1 !SERVICES !000 !* !561210!E! !5!B!M!D!A! !999

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 $20.4 million.

What is the period of performance?

Start: 2004-01-28. End: 2021-02-28.

What specific types of facilities support services are included under this contract?

The contract falls under NAICS code 561210, which covers Facilities Support Services. This broad category typically includes a range of services such as building operations and maintenance, groundskeeping, waste management, security services, and potentially energy management and efficiency upgrades. Given NORESCO's specialization, it is highly probable that energy-related services, such as retro-commissioning, energy audits, and implementation of energy-saving technologies, are a significant component. However, the precise scope would be detailed in the Performance Work Statement (PWS) attached to the contract, which is not provided in this data.

How does the awarded price of $60.67 million compare to market rates for similar facilities support services?

Benchmarking the $60.67 million award requires detailed knowledge of the specific services rendered, the geographic locations, and the contract duration (approximately 5 years). Facilities support services can vary widely in cost depending on complexity, scale, and the inclusion of specialized services like energy efficiency retrofits. For large federal contracts, this value might be considered competitive if it encompasses comprehensive services across multiple installations. However, without a detailed breakdown of the services and comparison to similar-sized contracts or private sector benchmarks for equivalent service bundles, it's difficult to definitively assess if it represents optimal value for money. The fixed-price nature suggests cost certainty, but the true value is realized through effective service delivery.

What is NORESCO, LLC's track record with federal contracts, particularly within the Department of Defense?

NORESCO, LLC, a subsidiary of Realterm, is a well-established energy services company (ESCO) with a significant history of performance-based contracts, particularly focused on energy efficiency and infrastructure upgrades for government and commercial clients. They have a documented track record with various federal agencies, including the Department of Defense, often undertaking large-scale projects to reduce energy consumption and modernize facilities. Their experience typically involves performance contracting, where savings generated from efficiency measures help finance the project. A review of their contract history would likely show numerous awards for similar services, indicating a strong capability in this domain.

What are the potential risks associated with a long-term, single-award contract for facilities support?

A long-term, single-award contract, such as this one spanning over five years, carries several potential risks. Firstly, there's the risk of contractor complacency; once secured, the contractor might reduce efforts to innovate or maintain peak performance if competition is perceived as distant. Secondly, if the contractor's performance falters or they face financial difficulties, the government has limited immediate alternatives without potentially disrupting essential services. Thirdly, the government might miss out on potentially better pricing or innovative solutions that could emerge from the market over the contract's lifespan. Effective contract management, including robust performance monitoring and clear communication channels, is crucial to mitigate these risks.

How does this contract align with the Department of Defense's broader goals for facility modernization and energy resilience?

This contract likely aligns with the Department of Defense's strategic objectives for facility modernization and energy resilience. The DoD manages vast real estate portfolios, and maintaining these facilities while reducing energy consumption and enhancing resilience is a key priority. Contracts like this, especially if they include energy efficiency measures, renewable energy integration, or smart building technologies, directly contribute to these goals. By outsourcing comprehensive facilities support, the DoD can leverage specialized expertise and potentially achieve cost savings and performance improvements that support its mission readiness and sustainability targets.

What is the historical spending trend for Facilities Support Services (NAICS 561210) by the Department of the Army?

Historical spending data for Facilities Support Services (NAICS 561210) by the Department of the Army typically shows consistent and substantial investment. Agencies like the Army operate numerous bases and facilities requiring ongoing maintenance, operations, and upgrades. Spending in this category often fluctuates based on infrastructure needs, modernization initiatives, and budget allocations. While this specific $60.67 million award is a significant single contract, the Army's total annual expenditure on facilities support services across all its installations would likely be in the billions of dollars, reflecting the scale of its real estate holdings and operational requirements.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: ONE RESEARCH DRIVE, WESTBOROUGH, MA, 01581

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DACA8797D0063

IDV Type: IDC

Timeline