GSA awards $7.2M ESPC to Honeywell for energy upgrades across three Detroit federal buildings

Contract Overview

Contract Amount: $7,228,266 ($7.2M)

Contractor: Honeywell International Inc.

Awarding Agency: General Services Administration

Start Date: 2020-07-15

End Date: 2038-02-28

Contract Duration: 6,437 days

Daily Burn Rate: $1.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) AT 3 BUILDINGS IN DETROIT, MICHIGAN LEVIN U.S. COURTHOUSE, 231 W. LAFAYETTE, DETROIT, MI MCNAMARA FEDERAL BUILDING, 477 MICHIGAN AVE, DETROIT, MI FEDERAL BUILDING, 985 MICHIGAN AVE, DETROIT, MI

Place of Performance

Location: DETROIT, WAYNE County, MICHIGAN, 48226

State: Michigan Government Spending

Plain-Language Summary

General Services Administration obligated $7.2 million to HONEYWELL INTERNATIONAL INC. for work described as: ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) AT 3 BUILDINGS IN DETROIT, MICHIGAN LEVIN U.S. COURTHOUSE, 231 W. LAFAYETTE, DETROIT, MI MCNAMARA FEDERAL BUILDING, 477 MICHIGAN AVE, DETROIT, MI FEDERAL BUILDING, 985 MICHIGAN AVE, DETROIT, MI Key points: 1. The contract aims to improve energy efficiency and reduce utility costs in federal facilities. 2. Honeywell International Inc. was selected through full and open competition. 3. The contract duration extends over 17 years, indicating a long-term investment in facility modernization. 4. The fixed-price nature of the contract shifts performance risk to the contractor. 5. This ESPC aligns with federal mandates for energy reduction and sustainability in government buildings. 6. The award value represents a significant investment in infrastructure upgrades for the specified Detroit locations.

Value Assessment

Rating: good

The contract value of $7.2 million for energy savings performance contracts across three buildings appears reasonable given the long duration and scope of potential energy efficiency improvements. ESPCs are designed to be cost-neutral or cost-saving over their lifecycle, with savings generated from reduced utility consumption paying for the upgrades. Benchmarking against similar ESPCs is challenging without detailed project scopes, but the General Services Administration (GSA) has a history of executing such contracts effectively. The fixed-price structure provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified contractors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and innovative solutions. The presence of multiple bidders, indicated by the 7 bids received, further supports the notion of a competitive marketplace for energy performance contracting services.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a level playing field, encouraging competitive pricing, and ensuring that the government receives the best value for its investment.

Public Impact

Federal agencies occupying the Levin U.S. Courthouse, McNamara Federal Building, and the Federal Building in Detroit will benefit from improved building systems and potentially more comfortable working environments. The contract will deliver energy efficiency upgrades, likely including lighting, HVAC, and building controls, leading to reduced operational costs for the government. The geographic impact is concentrated in Detroit, Michigan, supporting local federal operations. While direct workforce implications are not detailed, the implementation of these upgrades may involve local contractors and skilled labor for installation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 17 years) could lead to potential for scope creep or unforeseen maintenance challenges.
Reliance on a single contractor for a long-term project may limit flexibility if technology or needs change significantly.
Ensuring actual energy savings meet or exceed projections over the full contract term requires robust monitoring and verification.

Positive Signals

Focus on energy efficiency aligns with federal sustainability goals and can lead to significant long-term cost reductions.
The fixed-price contract structure provides budget certainty for the government.
Awarding through full and open competition suggests a competitive process that likely yielded favorable terms.
The contract is managed by the General Services Administration, an agency with extensive experience in managing federal building operations and energy performance contracts.

Sector Analysis

Energy Savings Performance Contracts (ESPCs) are a key mechanism for federal agencies to improve energy efficiency and reduce utility costs without upfront capital investment. These contracts leverage private sector financing and expertise to implement energy conservation measures. The market for ESPCs is robust, driven by federal mandates and the potential for significant cost savings. This contract fits within the broader GSA portfolio of facility management and sustainability initiatives.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. As a large contract awarded to a major corporation like Honeywell, it is possible that subcontracting opportunities may exist for smaller firms, but this is not explicitly detailed in the award information. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The General Services Administration (GSA) typically has robust oversight mechanisms for its contracts, including ESPCs. These mechanisms often involve project managers, performance monitoring, and verification of energy savings. The fixed-price nature of the contract places the performance risk on the contractor. Transparency is generally maintained through contract databases and GSA reporting, though specific details of ongoing performance monitoring may not be publicly available.

Related Government Programs

Energy Efficiency and Conservation Block Grant Program
Federal Buildings Fund
Department of Energy - ESPC Program

Risk Flags

Long-term contract duration may require ongoing monitoring for relevance and effectiveness.
Reliance on contractor's projections for energy savings requires diligent verification.
Potential for unforeseen infrastructure issues in older federal buildings.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $7.2 million to HONEYWELL INTERNATIONAL INC.. ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) AT 3 BUILDINGS IN DETROIT, MICHIGAN LEVIN U.S. COURTHOUSE, 231 W. LAFAYETTE, DETROIT, MI MCNAMARA FEDERAL BUILDING, 477 MICHIGAN AVE, DETROIT, MI FEDERAL BUILDING, 985 MICHIGAN AVE, DETROIT, MI

Who is the contractor on this award?

The obligated recipient is HONEYWELL INTERNATIONAL INC..

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $7.2 million.

What is the period of performance?

Start: 2020-07-15. End: 2038-02-28.

What specific energy conservation measures are included in this ESPC, and what are the projected savings for each?

The provided data does not detail the specific energy conservation measures (ECMs) to be implemented under this ESPC, nor does it provide projected savings for individual measures. ESPCs typically include a range of upgrades such as LED lighting retrofits, HVAC system modernizations, building envelope improvements (insulation, windows), and advanced energy management systems. The total projected savings are usually aggregated and form the basis for the contract's financial structure, ensuring that the savings generated cover the contractor's costs and financing, with the remainder accruing to the government. A detailed project scope and savings calculation would typically be found in the contract's technical exhibits.

How does the $7.2 million contract value compare to similar ESPCs awarded by GSA for federal buildings of comparable size and age?

Directly comparing the $7.2 million contract value to similar ESPCs is challenging without specific details on the scope of work, the number and size of buildings, and the baseline energy consumption. However, ESPCs can range widely in cost depending on the complexity of the upgrades and the potential for savings. GSA has awarded numerous ESPCs, and values can range from hundreds of thousands to tens of millions of dollars. The value of this contract appears to be within a reasonable range for a multi-building, long-term energy efficiency project managed by a large federal agency like GSA, especially considering the 17-year performance period which amortizes upfront costs over a longer duration.

What are the key performance indicators (KPIs) used to measure the success of this ESPC, and how will energy savings be verified?

Key performance indicators for ESPCs typically revolve around verified energy savings, operational cost reductions, and compliance with contract terms. Energy savings are usually verified through a Measurement and Verification (M&V) plan, often following established protocols like the International Performance Measurement and Verification Protocol (IPMVP). This plan outlines how energy consumption will be metered, how baseline data will be adjusted for variables like weather and occupancy, and how savings will be calculated and reported. GSA, as the contracting agency, will oversee the M&V process to ensure that the savings claimed by Honeywell are accurate and that the government is realizing the expected financial benefits over the contract's life.

What is Honeywell International Inc.'s track record with GSA ESPCs, and have they successfully delivered similar projects in the past?

Honeywell International Inc. is a major player in the energy services and building technology sector and has a significant track record of performing Energy Savings Performance Contracts (ESPCs) for various federal agencies, including the General Services Administration (GSA). They have been involved in numerous large-scale projects aimed at improving energy efficiency in government facilities across the United States. While specific past performance details for this exact contract or set of buildings are not provided in the summary data, Honeywell's extensive experience suggests a capability to deliver complex ESPC projects. GSA's procurement process typically includes evaluating past performance, so their selection indicates a favorable assessment of Honeywell's capabilities.

What are the potential risks associated with a 17-year contract term for an ESPC, and how are these risks mitigated?

A 17-year contract term for an ESPC presents several potential risks, including technological obsolescence, changes in building usage or occupancy, and the contractor's long-term financial stability. Technological advancements in energy efficiency could make the installed systems outdated before the contract ends, or building needs might evolve. Mitigation strategies often include flexible contract language that allows for adjustments, robust M&V plans to ensure ongoing savings regardless of minor changes, and performance guarantees from the contractor. Furthermore, GSA's oversight and the fixed-price nature of the contract help ensure that the contractor remains accountable for delivering the agreed-upon savings over the entire duration.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

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

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell Safety Products USA, Inc.

Address: 135 W FOREST HILL AVE, OAK CREEK, WI, 53154

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

Financial Breakdown

Contract Ceiling: $24,670,720

Exercised Options: $7,228,266

Current Obligation: $7,228,266

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QSWA18D0057

IDV Type: FSS

Timeline