EPA awards $16.6M energy savings contract to Energy Systems Group LLC for Research Triangle Park campus

Contract Overview

Contract Amount: $16,635,485 ($16.6M)

Contractor: Energy Systems Group LLC

Awarding Agency: Environmental Protection Agency

Start Date: 2018-09-27

End Date: 2041-07-26

Contract Duration: 8,338 days

Daily Burn Rate: $2.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: ENERGY SAVINGS PERFORMANCE CONTRACT TASK ORDER FOR RESEARCH TRIANGLE PARK CAMPUS, RTP, NORTH CAROLINA

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27709

State: North Carolina Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $16.6 million to ENERGY SYSTEMS GROUP LLC for work described as: ENERGY SAVINGS PERFORMANCE CONTRACT TASK ORDER FOR RESEARCH TRIANGLE PARK CAMPUS, RTP, NORTH CAROLINA Key points: 1. Contract aims to improve energy efficiency and reduce operational costs at the Research Triangle Park campus. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. Performance period extends over 18 years, indicating a long-term commitment to energy management. 4. The fixed-price structure shifts performance risk to the contractor. 5. This task order falls within engineering services, a broad category with diverse applications. 6. The contract value is moderate for an energy performance contract of this duration.

Value Assessment

Rating: good

The contract value of $16.6 million over 18 years suggests a significant investment in energy efficiency upgrades. Benchmarking against similar Energy Savings Performance Contracts (ESPCs) is challenging without specific details on the scope of work and expected savings. However, the duration implies a comprehensive approach to facility modernization. The firm-fixed-price nature of the contract is generally favorable for the government, as it caps costs and incentivizes the contractor to deliver the promised savings.

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 a bid. With 9 bidders, the competition appears robust, which typically leads to better pricing and value for the government. The presence of multiple bidders suggests that the market for such services is active and that the EPA likely received competitive proposals.

Taxpayer Impact: A competitive bidding process for this contract is beneficial for taxpayers as it likely drove down costs and ensured the government received a fair price for the energy efficiency services.

Public Impact

The primary beneficiaries are the Environmental Protection Agency (EPA) and its employees at the Research Triangle Park campus, who will experience improved facilities and potentially lower utility costs. The contract will deliver energy efficiency upgrades, potentially including lighting, HVAC, and building envelope improvements. The geographic impact is localized to the Research Triangle Park campus in North Carolina. The contract may indirectly support the local economy through the employment of skilled labor for installation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long performance period (18 years) could introduce risks related to technology obsolescence or changes in energy prices.
Reliance on a single contractor for an extended period might limit flexibility in adapting to future needs.
The success of the contract is heavily dependent on the contractor's ability to accurately forecast and achieve energy savings over the long term.

Positive Signals

Firm-fixed-price contract structure transfers cost overrun risk to the contractor.
Full and open competition with 9 bidders suggests a competitive market and potentially favorable pricing.
The contract is designed to achieve measurable energy savings, aligning with government sustainability goals.

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 expertise and financing to implement energy conservation measures. The market for ESPCs is substantial, driven by federal mandates for sustainability and cost reduction. This contract fits within the broader energy services sector, specifically focusing on facility modernization and operational efficiency.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. It is unlikely that a large-scale ESPC task order would be exclusively set aside for small businesses. However, the prime contractor, Energy Systems Group LLC, may engage small businesses as subcontractors for specific components of the project, such as installation or specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Environmental Protection Agency's contracting officers and program managers. The contract's performance will likely be monitored through regular progress reports, energy savings verification, and site inspections. The long duration may involve periodic reviews to ensure continued compliance and effectiveness. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Energy Savings Performance Contracts
Federal Energy Management Program
Environmental Protection Agency Facilities Management
Building Energy Efficiency Initiatives

Risk Flags

Long-term contract duration may pose risks related to technological advancements and market shifts.
Accuracy of energy savings projections is critical for financial viability.
Potential for scope creep or changes in facility needs over 18 years.

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $16.6 million to ENERGY SYSTEMS GROUP LLC. ENERGY SAVINGS PERFORMANCE CONTRACT TASK ORDER FOR RESEARCH TRIANGLE PARK CAMPUS, RTP, NORTH CAROLINA

Who is the contractor on this award?

The obligated recipient is ENERGY SYSTEMS GROUP LLC.

Which agency awarded this contract?

Awarding agency: Environmental Protection Agency (Environmental Protection Agency).

What is the total obligated amount?

The obligated amount is $16.6 million.

What is the period of performance?

Start: 2018-09-27. End: 2041-07-26.

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

The provided data does not detail the specific energy conservation measures (ECMs) to be implemented under this task order. ESPCs typically encompass a range of upgrades such as LED lighting retrofits, HVAC system modernizations, building envelope improvements (insulation, windows), water conservation measures, and renewable energy installations. The projected energy savings are also not specified in the available information. Typically, the contractor is required to guarantee a certain level of savings, which is then verified periodically. The EPA would have access to the detailed project proposal and savings calculations as part of the contract documentation.

How does the $16.6 million cost compare to the expected energy savings over the 18-year contract period?

Without the projected energy savings, a direct comparison of the $16.6 million cost to the expected savings is not possible. ESPCs are structured such that the cost of the project is repaid through the guaranteed energy and operational cost savings achieved. The contractor's proposal would have included a detailed financial analysis demonstrating that the savings generated would cover the contract costs and provide a net benefit to the agency. The breakeven point and the total net savings over the contract's life are critical metrics for evaluating the value of such an investment.

What is Energy Systems Group LLC's track record with similar federal ESPC contracts?

Information on Energy Systems Group LLC's specific track record with federal ESPC contracts is not provided in the data. A comprehensive assessment would require reviewing their past performance on similar projects, including their success in meeting guaranteed savings, project completion timeliness, and client satisfaction. Agencies typically evaluate a contractor's past performance as a key factor in the source selection process. Reviewing publicly available contract awards and performance evaluations for ESG could provide further insight into their capabilities and reliability in delivering energy efficiency solutions.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key performance indicators for this contract would likely revolve around the achievement of guaranteed energy and operational cost savings. Specific KPIs could include the percentage reduction in energy consumption (electricity, natural gas, water), the total dollar amount of savings realized annually, and the uptime and performance of newly installed equipment. The contract would also specify reporting requirements, such as monthly or quarterly performance reports detailing energy usage, savings calculations, and any deviations from the plan. Verification of savings by an independent third party or through established measurement and verification (M&V) protocols is also a critical KPI.

How does this contract align with the EPA's broader sustainability and climate change goals?

This contract directly aligns with the EPA's mission and federal mandates to improve energy efficiency and reduce greenhouse gas emissions across federal facilities. By investing in energy conservation measures, the EPA is actively working to lower its operational carbon footprint. ESPCs are a primary tool for agencies to meet sustainability targets, such as those set by the Federal Energy Management Program (FEMP). The upgrades implemented under this contract will contribute to reducing the agency's reliance on fossil fuels and promoting a more sustainable operational model at a significant federal campus.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SOL-CI-16-00005

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Energy Systems Group, LLC

Address: 4655 ROSEBUD LN, NEWBURGH, IN, 47630

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

Financial Breakdown

Contract Ceiling: $58,386,112

Exercised Options: $58,386,112

Current Obligation: $16,635,485

Actual Outlays: $8,885,485

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29030

IDV Type: IDC

Timeline