GSA's $14.9M Energy Savings Contract with Honeywell to Modernize 8 California Federal Buildings

Contract Overview

Contract Amount: $14,868,913 ($14.9M)

Contractor: Honeywell International, Inc

Awarding Agency: General Services Administration

Start Date: 2016-05-09

End Date: 2041-03-01

Contract Duration: 9,062 days

Daily Burn Rate: $1.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT. INVOLVES THE INSTALLATION AND LONG TERM MEASUREMENT&VERIFICATION OF ENERGY CONSERVATION MEASURES FOR THE FOLLOWING CALIFORNIA BUILDINGS: WEST LOS ANGELES FEDERAL BUILDING; WEST LOS ANGELES PARKING GARAGE; US COURTHOUSE (SPRING STREET); LOS ANGELES FEDERAL BUILDING; U.S. SOCIAL SECURITY ADMINISTRATION OFFICE; RICHARD H. CHAMBERS U.S. COURTHOUSE; SANTA ANA FEDERAL BUILDING; CHET HOLIFIELD FEDERAL BUILDING.

Place of Performance

Location: LAGUNA NIGUEL, ORANGE County, CALIFORNIA, 92677

State: California Government Spending

Plain-Language Summary

General Services Administration obligated $14.9 million to HONEYWELL INTERNATIONAL, INC for work described as: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT. INVOLVES THE INSTALLATION AND LONG TERM MEASUREMENT&VERIFICATION OF ENERGY CONSERVATION MEASURES FOR THE FOLLOWING CALIFORNIA BUILDINGS: WEST LOS ANGELES FEDERAL BUILDING; WEST LOS ANGELES PARKING GARAGE; US COURTHOUSE (SPRING ST… Key points: 1. Focuses on long-term energy conservation measures with a 15-year performance period. 2. Contract awarded through full and open competition, suggesting a competitive bidding process. 3. Includes measurement and verification, indicating a focus on performance outcomes. 4. Covers multiple high-profile federal buildings in California, impacting significant infrastructure. 5. The firm-fixed-price structure shifts performance risk to the contractor. 6. Potential for significant operational cost reductions and environmental benefits for federal facilities.

Value Assessment

Rating: good

The contract value of approximately $14.9 million for energy conservation measures across eight federal buildings in California appears reasonable given the scope and duration. While direct comparisons are difficult without specific project details, Energy Savings Performance Contracts (ESPCs) are designed to be cost-neutral or cost-saving, with savings often covering the investment over time. The firm-fixed-price nature of this contract helps manage cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 10 bids suggests a healthy level of competition for this type of energy services contract. A competitive process generally leads to better pricing and more innovative solutions for the government.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers by encouraging multiple companies to offer their best terms and pricing to secure the contract.

Public Impact

Federal agencies occupying the specified California buildings will benefit from reduced utility costs and improved facility performance. The project delivers energy conservation measures, contributing to federal sustainability goals. Geographic impact is concentrated in Southern California, affecting federal operations in Los Angeles and Santa Ana. Potential for job creation in installation, maintenance, and energy management services related to the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long performance period (15 years) requires sustained monitoring to ensure savings are realized.
Reliance on a single contractor (Honeywell) for implementation and verification over an extended period.
Potential for scope creep or unforeseen technical challenges in older federal buildings.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Inclusion of measurement and verification (M&V) ensures performance accountability.
Awarded through full and open competition, indicating a potentially competitive price.
Addresses multiple federal facilities, offering a consolidated approach to energy efficiency.

Sector Analysis

Energy Savings Performance Contracts (ESPCs) are a key mechanism for federal agencies to improve energy efficiency and reduce operational costs without upfront capital investment. The market for energy services is robust, with numerous providers offering a range of solutions. This contract fits within the broader trend of federal agencies seeking to modernize infrastructure and meet sustainability mandates. Comparable spending benchmarks for ESPCs vary widely based on project size and scope, but this contract's value is in the mid-range for a multi-building project.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As a large contract awarded to a major corporation, the primary focus is likely on the prime contractor's capabilities. Further analysis would be needed to determine if small businesses are involved in subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration's (GSA) Public Buildings Service. The firm-fixed-price structure and the inclusion of measurement and verification (M&V) clauses provide mechanisms for accountability. GSA's internal oversight processes and potentially the GSA Inspector General would monitor performance and compliance throughout the contract's 15-year duration.

Related Government Programs

Federal Energy Management Program (FGFP)
Energy Independence and Security Act (EISA)
GSA Public Buildings Service Operations

Risk Flags

Long-term performance risk
Contractor financial stability over 15 years
Potential for technological obsolescence
Accuracy of savings projections and M&V

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $14.9 million to HONEYWELL INTERNATIONAL, INC. IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT. INVOLVES THE INSTALLATION AND LONG TERM MEASUREMENT&VERIFICATION OF ENERGY CONSERVATION MEASURES FOR THE FOLLOWING CALIFORNIA BUILDINGS: WEST LOS ANGELES FEDERAL BUILDING; WEST LOS ANGELES PARKING GARAGE; US COURTHOUSE (SPRING STREET); LOS ANGELES FEDERAL BUILDING; U.S. SOCIAL SECURITY ADMINISTRATION OFFICE; RICHARD H. CHAMBERS U.S. COURTHOUSE; SANTA ANA FEDERAL BUILDING; CHET HOLIFIELD FEDERAL BUILDING.

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 $14.9 million.

What is the period of performance?

Start: 2016-05-09. End: 2041-03-01.

What is the historical spending pattern for Energy Savings Performance Contracts by the General Services Administration?

The General Services Administration (GSA) has been a significant user of Energy Savings Performance Contracts (ESPCs) to upgrade the energy efficiency of its vast portfolio of federal buildings. Historically, GSA has utilized ESPCs to achieve substantial cost savings and reduce environmental impact. The total value of ESPCs awarded by GSA can fluctuate annually based on budget allocations, agency priorities, and the availability of suitable projects. While specific annual spending figures require detailed historical data analysis, GSA's commitment to sustainability and operational efficiency suggests a consistent and substantial investment in ESPCs over the years. These contracts often involve multi-year commitments, meaning that current spending reflects ongoing projects initiated in prior fiscal years. The trend generally shows an increasing focus on renewable energy integration and smart building technologies within ESPC frameworks.

How does the performance period of 15 years compare to typical ESPC durations?

A performance period of 15 years for an Energy Savings Performance Contract (ESPC) is within the typical range, though often at the longer end. ESPCs can have performance periods ranging from 5 to 30 years, with 10 to 20 years being quite common. The duration is typically determined by the lifespan of the installed energy conservation measures (ECMs) and the time required for the projected energy savings to recoup the investment. Longer periods allow for financing of more extensive upgrades and can provide greater long-term savings certainty. However, they also necessitate robust long-term monitoring and verification to ensure that savings persist and that the contractor remains accountable throughout the contract's life. Shorter periods might be chosen for simpler projects or when technological obsolescence is a greater concern.

What are the key energy conservation measures typically included in such contracts?

Energy Conservation Measures (ECMs) in ESPCs are designed to reduce energy consumption and operational costs. For federal buildings, common ECMs include upgrades to HVAC systems (heating, ventilation, and air conditioning) for improved efficiency and control, lighting retrofits (e.g., replacing fluorescent or incandescent bulbs with LEDs), building envelope improvements (such as insulation and window upgrades), installation of energy-efficient windows and doors, and implementation of building automation systems (BAS) or energy management systems (EMS) for better monitoring and control of energy use. Water conservation measures, renewable energy installations (like solar panels), and upgrades to electrical distribution systems may also be included. The specific ECMs for this contract would be tailored to the conditions of the eight California buildings.

What are the potential risks associated with a 15-year firm-fixed-price contract for energy services?

A 15-year firm-fixed-price (FFP) contract for energy services presents several potential risks. For the government, the primary risk is that the fixed price might become uncompetitive if market prices for materials or labor decrease significantly over the contract term, or if unforeseen technological advancements render the installed measures less effective than anticipated. Conversely, if the contractor underestimates costs or encounters unexpected site conditions, they bear the risk of reduced profitability or even losses, which could potentially impact their motivation or ability to perform over the long term. Another risk is contractor default or bankruptcy, especially over such an extended period. Robust contract management, clear performance metrics, and contingency planning are crucial to mitigate these risks.

How does the 'measurement and verification' (M&V) process ensure contractor accountability?

Measurement and Verification (M&V) is a critical component of ESPCs that ensures contractor accountability by systematically tracking and verifying the energy savings achieved by the installed measures. The M&V plan, often based on established protocols like the International Performance Measurement and Verification Protocol (IPMVP), defines how savings will be calculated. This typically involves establishing baseline energy consumption before the upgrades and then monitoring consumption after implementation, adjusting for variables like weather and building occupancy. Independent verification, often performed by the contractor or a third party, confirms that the savings meet or exceed the contractually guaranteed amounts. If savings fall short, the contractor is usually obligated to make up the difference, often through additional measures or direct payments, thereby holding them financially responsible for performance.

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

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Honeywell Safety Products USA, Inc.

Address: 1985 DOUGLAS DRIVE, GOLDEN VALLEY, MN, 55422

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

Financial Breakdown

Contract Ceiling: $64,986,660

Exercised Options: $14,868,913

Current Obligation: $14,868,913

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29035

IDV Type: IDC

Timeline