Siemens Government Technologies awarded $3.56M for Pantex windfarm energy savings, spanning 19 years
Contract Overview
Contract Amount: $3,556,501 ($3.6M)
Contractor: Siemens Government Technologies Inc
Awarding Agency: Department of Energy
Start Date: 2013-05-10
End Date: 2032-06-17
Contract Duration: 6,978 days
Daily Burn Rate: $510/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: IGF::CL,CT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) FOR THE WINDFARM PANTEX SITE OFFICE FOR PANTEX SITE OFFICE - PSO.
Place of Performance
Location: BUFFALO GROVE, LAKE County, ILLINOIS, 60089
State: Illinois Government Spending
Plain-Language Summary
Department of Energy obligated $3.6 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: IGF::CL,CT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) FOR THE WINDFARM PANTEX SITE OFFICE FOR PANTEX SITE OFFICE - PSO. Key points: 1. Contract aims to improve energy efficiency and reduce operational costs at the Pantex Site Office. 2. Long duration suggests a focus on sustained performance and long-term energy management strategies. 3. Fixed-price contract structure shifts performance risk to the contractor. 4. Competition dynamics for this type of specialized energy performance contract warrant further examination. 5. Potential for significant long-term savings hinges on accurate baseline energy use and effective implementation.
Value Assessment
Rating: fair
The contract value of $3.56 million over nearly 20 years for an energy savings performance contract (ESPC) appears moderate. Without specific benchmarks for windfarm energy savings projects of this scale and duration, a precise value-for-money assessment is challenging. However, ESPCs are designed to be cost-neutral or cost-saving, with savings generated by the contractor paying for the improvements. The long contract term suggests a significant scope of work, and the effectiveness will depend on the realized energy savings compared to the initial investment and operational costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bidders suggests a competitive environment, which typically benefits price discovery and encourages more favorable terms for the government. The specific details of the bidding process and the evaluation criteria would provide further insight into the level of competition and its impact on the final award.
Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment among potential contractors.
Public Impact
The Department of Energy benefits from improved energy efficiency and reduced operational costs at the Pantex Site Office. The contract supports the delivery of energy savings and potentially renewable energy solutions. The geographic impact is localized to the Pantex Site Office. Workforce implications may include specialized roles in energy management, construction, and maintenance related to the windfarm.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (19 years) could lead to vendor lock-in or challenges in adapting to future technological advancements.
- Reliance on energy savings projections introduces inherent risk if actual savings fall short of estimates.
- The fixed-price nature, while beneficial for budget certainty, might limit flexibility if unforeseen issues arise during implementation.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
- The contract is an Energy Savings Performance Contract (ESPC), a mechanism designed to achieve energy efficiency improvements without upfront government capital investment.
- Long-term focus indicates a commitment to sustained energy management and operational improvements.
Sector Analysis
This contract falls within the Energy sector, specifically focusing on energy efficiency and renewable energy infrastructure. Energy Savings Performance Contracts (ESPCs) are a common procurement method used by federal agencies to upgrade facilities and reduce energy consumption. The market for ESPCs is significant, driven by government mandates for energy reduction and sustainability. Comparable spending benchmarks would typically involve analyzing other ESPCs awarded by the Department of Energy or other agencies for similar facility types and project scopes.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As a full and open competition, it's possible that small businesses could participate as prime contractors or subcontractors, but there's no explicit indication of a focus on small business inclusion in the award. Further analysis of the contract's subcontracting plan would be needed to assess its impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Energy's contracting officers and program managers. As an ESPC, there are typically performance metrics and reporting requirements tied to energy savings. The Inspector General's office for the Department of Energy would have jurisdiction to investigate any potential fraud, waste, or abuse related to the contract's execution and performance. Transparency would be enhanced through public contract databases and reporting on achieved energy savings.
Related Government Programs
- Department of Energy Energy Savings Performance Contracts
- Federal Renewable Energy Infrastructure Projects
- Pantex Site Office Operations and Maintenance
- Windfarm Energy Generation Contracts
Risk Flags
- Long contract duration may present challenges for future technological adaptation.
- Reliance on projected energy savings carries inherent performance risk.
- Fixed-price nature requires careful contractor cost management over a long period.
Tags
energy, department-of-energy, pantex-site-office, definitive-contract, large-contract, full-and-open-competition, firm-fixed-price, energy-savings-performance-contract, windfarm, illinois
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $3.6 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. IGF::CL,CT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) FOR THE WINDFARM PANTEX SITE OFFICE FOR PANTEX SITE OFFICE - PSO.
Who is the contractor on this award?
The obligated recipient is SIEMENS GOVERNMENT TECHNOLOGIES INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $3.6 million.
What is the period of performance?
Start: 2013-05-10. End: 2032-06-17.
What is the historical spending pattern for Energy Savings Performance Contracts (ESPCs) at the Department of Energy, and how does this contract compare?
The Department of Energy (DOE) has a long history of utilizing Energy Savings Performance Contracts (ESPCs) to achieve energy efficiency and cost savings across its vast portfolio of facilities. These contracts leverage private sector investment to finance energy conservation measures, with the contractor being repaid through the documented savings generated. Historically, DOE has awarded numerous ESPCs, ranging in value and scope, from small facility upgrades to large-scale renewable energy installations. The $3.56 million award for the Pantex windfarm ESPC appears to be a moderate-sized contract within the broader context of DOE's ESPC program. To provide a more precise comparison, one would need to analyze the average contract value, duration, and types of energy conservation measures typically included in DOE's ESPC portfolio over the past decade. Factors such as the specific energy savings goals, the complexity of the renewable energy generation involved (windfarm), and the long-term performance period (19 years) are key differentiators for this particular contract.
What are the key performance indicators (KPIs) used to measure the success of this Energy Savings Performance Contract?
The success of this Energy Savings Performance Contract (ESPC) is primarily measured by the actual energy savings achieved over the contract's 19-year duration. Key Performance Indicators (KPIs) would typically include: 1. Documented Energy Cost Savings: This is the most critical KPI, measuring the reduction in energy expenditures (electricity, gas, etc.) compared to a pre-defined baseline. Savings are usually calculated based on energy consumption data before and after the implementation of energy conservation measures. 2. Renewable Energy Generation Output: For the windfarm component, KPIs would likely involve the amount of electricity generated (in kilowatt-hours or megawatt-hours) and its contribution to the site's energy needs or the grid. 3. System Uptime and Reliability: The operational availability and reliability of the installed energy systems, including the wind turbines and any associated infrastructure, would be monitored. 4. Maintenance and Operational Costs: While the contract aims to reduce overall costs, the contractor's management of maintenance and operational expenses for the new systems is also a performance aspect. 5. Compliance with Environmental Standards: Ensuring the project meets all relevant environmental regulations and sustainability goals. The contract likely specifies detailed methodologies for calculating and verifying these savings and performance metrics.
What is the track record of Siemens Government Technologies Inc. in delivering similar Energy Savings Performance Contracts?
Siemens Government Technologies Inc. (SGT) has a significant and established track record in delivering Energy Savings Performance Contracts (ESPCs) and other energy infrastructure solutions for government clients. As a subsidiary of Siemens AG, a global leader in electrification, automation, and digitalization, SGT leverages extensive expertise in energy management, renewable energy technologies, and building systems. They have been involved in numerous ESPC projects across various federal agencies, including the Department of Defense, Department of Homeland Security, and other civilian agencies. These projects often involve complex upgrades to HVAC systems, lighting, building controls, and the integration of renewable energy sources. SGT's experience typically includes comprehensive energy audits, system design, installation, commissioning, and long-term performance monitoring and verification. While specific project outcomes and client satisfaction levels can vary, SGT is generally recognized as a capable and experienced provider in the federal ESPC market, possessing the technical and financial capacity to undertake large-scale, long-duration projects like the one at the Pantex Site Office.
How does the fixed-price contract type impact risk allocation and potential cost overruns for this ESPC?
The designation of this contract as 'Firm Fixed Price' (FFP) significantly impacts risk allocation. Under an FFP contract, the contractor, Siemens Government Technologies Inc., assumes the primary responsibility for cost overruns. This means that if the actual costs of implementing the energy conservation measures and operating the windfarm exceed the contractor's initial estimates, Siemens must absorb those additional costs. This structure provides the government with budget certainty, as the total price is fixed. However, it also incentivizes the contractor to meticulously plan, estimate, and manage the project efficiently to maintain profitability. For the government, the risk shifts from cost overruns to potential underperformance if the contractor cuts corners to manage costs, although performance verification mechanisms within ESPCs are designed to mitigate this. The long duration of the contract (19 years) adds a layer of complexity to FFP, as unforeseen market fluctuations or technological obsolescence could impact the contractor's profitability over such an extended period, potentially influencing their initial pricing strategy.
What are the potential long-term financial benefits and risks associated with this 19-year Energy Savings Performance Contract?
The primary long-term financial benefit of this 19-year ESPC is the potential for substantial and sustained reductions in energy costs for the Pantex Site Office. By investing in energy efficiency and potentially renewable energy generation, the government aims to lower its utility bills over the life of the contract. The structure of an ESPC typically means that these savings are used to finance the improvements, making the project cost-neutral or even revenue-generating for the government over time. However, there are also significant long-term financial risks. If the projected energy savings are not realized due to inaccurate baselines, inefficient implementation, or changes in energy usage patterns, the government might end up paying more than the actual savings generated. The long duration also exposes the contract to risks associated with technological advancements; newer, more efficient technologies might emerge during the contract period, making the installed systems less optimal. Furthermore, if the contractor experiences financial difficulties or goes out of business, it could disrupt the performance and maintenance of the energy systems, potentially leading to unexpected costs for the government to rectify the situation.
Industry Classification
NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DE-SOL-0004018
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Altair Engineering Inc.
Address: 2231 CRYSTAL DRIVE, SUITE 700, ARLINGTON, VA, 22202
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $52,965,891
Exercised Options: $52,965,891
Current Obligation: $3,556,501
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2013-05-10
Current End Date: 2032-06-17
Potential End Date: 2032-06-17 00:00:00
Last Modified: 2026-03-24
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