GSA's $10.4M Energy Savings Contract with Honeywell to Modernize 11 California Federal Buildings

Contract Overview

Contract Amount: $10,433,459 ($10.4M)

Contractor: Honeywell International, Inc

Awarding Agency: General Services Administration

Start Date: 2016-10-01

End Date: 2038-01-31

Contract Duration: 7,792 days

Daily Burn Rate: $1.3K/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 FEDERAL BUILDINGS IN CALIFORNIA: PHILLIP BURTON FEDERAL BUILDING AND COURTHOUSE, SAN FRANCISCO; JAMES R. BROWNING US COURTHOUSE, SAN FRANCISCO; JOHN F. SHEA FEDERAL BUILDING, SANTA ROSA; RONALD DELLUMS FEDERAL BUILDING, OAKLAND; ROBERT E COYLE US COURTHOUSE, FRESNO; US GEOLOGICAL SURVEY FACILITY, MENLO PARK, US POST OFFICE AND COURTHOUSE, SACRAMENTO; SACRAMENTO FEDERAL COMPLEX; ROBERT T. MATSUI US COURTHOUSE, SACRAMENTO; SAN FRANCISCO FEDERAL BUILDING; AND THE LEO J. RYAN FEDERAL RECORDS CENTER, SAN BRUNO.

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94103

State: California Government Spending

Plain-Language Summary

General Services Administration obligated $10.4 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 FEDERAL BUILDINGS IN CALIFORNIA: PHILLIP BURTON FEDERAL BUILDING AND COURTHOUSE, SAN FRANCISCO; JAMES R. BROWNING … Key points: 1. The contract aims to improve energy efficiency across a significant portfolio of federal buildings in California. 2. Long-term measurement and verification are included, suggesting a focus on sustained performance. 3. The broad geographic scope across California indicates a large-scale initiative. 4. The firm-fixed-price structure shifts performance risk to the contractor. 5. The contract's duration of over 15 years highlights a long-term commitment to energy performance. 6. The use of Engineering Services (NAICS 541330) points to a technical and complex project.

Value Assessment

Rating: good

The contract value of $10.4 million for energy conservation measures across 11 federal buildings in California appears reasonable given the scope and duration. While direct comparisons are difficult without specific project details, energy performance contracts often involve significant upfront investment for long-term savings. The firm-fixed-price nature suggests that the contractor has assessed the risks and costs associated with achieving the specified energy savings. Benchmarking against similar large-scale federal building retrofits would provide further insight into the value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple interested parties had the opportunity to bid. The fact that it is a delivery order under a larger contract vehicle suggests a competitive process was used to establish the initial vehicle, and this order was placed subsequently. The number of bidders for the original contract vehicle is not specified, but full and open competition generally promotes price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of solutions and potentially lower prices due to market forces. It ensures that the government is not limited to a single provider, fostering a more efficient use of public funds.

Public Impact

Federal agencies occupying the specified buildings will benefit from reduced utility costs and improved facility performance. The project will deliver energy conservation measures, likely including upgrades to lighting, HVAC, and building controls. The geographic impact spans multiple major metropolitan areas in California, including San Francisco, Oakland, Sacramento, and Fresno. The project supports the federal government's goals for energy efficiency and sustainability in its building portfolio. While not directly creating new jobs, the project involves skilled labor for installation and ongoing performance monitoring.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 15 years) may require ongoing vigilance to ensure sustained performance and value.
Dependence on a single contractor (Honeywell) for a significant period could limit future flexibility.
The complexity of energy savings performance contracts can sometimes lead to disputes over measurement and verification.

Positive Signals

Firm-fixed-price contract shifts performance risk to the contractor.
Inclusion of measurement and verification (M&V) ensures accountability for energy savings.
Full and open competition suggests a robust initial selection process.
Focus on energy efficiency aligns with federal sustainability mandates.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically related to energy efficiency and building modernization. The market for energy savings performance contracts (ESPCs) is substantial, with federal agencies being significant players. These contracts are designed to allow agencies to achieve energy and water savings without upfront capital investment, with savings often used to pay for the project. Honeywell is a major player in this market, competing with other large engineering and facility management firms.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a delivery order under a potentially larger contract vehicle, the subcontracting opportunities for small businesses would depend on the terms of the original award and Honeywell's subcontracting plan. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though large prime contractors often utilize small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Public Buildings Service. GSA's Office of Inspector General (OIG) would have jurisdiction to investigate potential fraud, waste, or abuse. The contract's long duration and performance-based nature necessitate ongoing monitoring of energy savings and project milestones to ensure accountability and value for taxpayers.

Related Government Programs

Energy Independence and Security Act (EISA)
Federal Energy Management Program (FEMP)
Energy Savings Performance Contracts (ESPCs)
GSA Public Buildings Service

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Potential for disputes over measurement and verification of energy savings.
Changes in energy markets or federal regulations could impact contract value.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $10.4 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 FEDERAL BUILDINGS IN CALIFORNIA: PHILLIP BURTON FEDERAL BUILDING AND COURTHOUSE, SAN FRANCISCO; JAMES R. BROWNING US COURTHOUSE, SAN FRANCISCO; JOHN F. SHEA FEDERAL BUILDING, SANTA ROSA; RONALD DELLUMS FEDERAL BUILDING, OAKLAND; ROBERT E COYLE US COURTHOUSE, FRESNO; US GEOLOGICAL SURVEY FACILITY, MENLO PARK, US POST OFFICE AND COURT

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 $10.4 million.

What is the period of performance?

Start: 2016-10-01. End: 2038-01-31.

What is the historical spending pattern for energy efficiency projects by the General Services Administration in California?

The General Services Administration (GSA) has a long-standing commitment to improving energy efficiency in its vast portfolio of federal buildings. In California, GSA has undertaken numerous projects, including ESPCs, to upgrade facilities. While specific historical spending figures for California alone are not readily available in this dataset, GSA's national spending on energy efficiency initiatives runs into hundreds of millions of dollars annually. This $10.4 million contract represents a significant, but not unprecedented, investment for a multi-building, long-term energy performance project within the state. Analyzing GSA's broader budget allocations for facility modernization and sustainability over the past decade would reveal a consistent trend towards prioritizing energy-saving measures, driven by legislative mandates and cost-saving objectives.

How does the pricing structure of this contract compare to industry benchmarks for similar energy conservation measures?

The pricing structure of this contract is 'Firm Fixed Price' (FFP), which means Honeywell is obligated to complete the work for a predetermined price, regardless of their actual costs. This shifts the financial risk of cost overruns to the contractor. Benchmarking FFP pricing for large-scale energy conservation projects is complex, as it depends heavily on the specific technologies deployed, the baseline energy usage, the scope of work, and the duration of the savings guarantee. However, FFP is common in ESPCs where the contractor is confident in their ability to achieve the projected savings. Generally, FFP contracts are expected to include a premium to account for the contractor's risk. Without detailed technical specifications and baseline data for these 11 buildings, a precise comparison to industry benchmarks is challenging. However, the contract's success will ultimately be measured by whether the realized energy savings meet or exceed the projected amounts, effectively validating the pricing.

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

The primary Key Performance Indicator (KPI) for this contract is the actual measured and verified energy savings achieved by the installed energy conservation measures (ECMs). The contract specifies a 'Long Term Measurement & Verification' process, which is crucial for ESPCs. This typically involves establishing a baseline of energy consumption before the upgrades and then meticulously tracking energy usage post-installation over the contract's duration (until 2038). Savings are usually calculated based on reductions in energy use (electricity, gas, water) and associated costs. Other potential KPIs could include the reliability and uptime of the new systems, compliance with environmental standards, and the achievement of specific energy reduction targets (e.g., percentage reduction in kWh consumption). The success is directly tied to the financial savings generated for the government, which often fund the project itself.

What is Honeywell's track record with large-scale federal energy performance contracts?

Honeywell International, Inc. has a significant and extensive track record in executing large-scale energy savings performance contracts (ESPCs) for federal agencies, including the Department of Defense, Department of Energy, and GSA. They are one of the leading providers in this sector, known for their technological capabilities in building automation, energy efficiency solutions, and performance contracting. Honeywell has completed numerous projects across various federal installations, often involving complex retrofits of aging infrastructure to improve energy efficiency, reduce operational costs, and meet sustainability goals. Their experience spans decades, and they have managed contracts with durations similar to or exceeding this GSA project. While specific performance metrics for all past contracts are not publicly detailed, their continued success in winning competitive ESPCs indicates a generally positive performance history and established expertise in delivering guaranteed energy savings.

What are the potential risks associated with a contract of this duration (over 15 years)?

Contracts spanning over 15 years, like this ESPC, carry several potential risks. Firstly, there's the risk of technological obsolescence; the energy conservation measures installed today might be less efficient or superseded by newer technologies before the contract ends. Secondly, changes in energy prices (both increases and decreases) can impact the calculation and realization of guaranteed savings, potentially leading to disputes if the market deviates significantly from projections. Thirdly, the long duration increases the likelihood of changes in building occupancy, usage patterns, or even federal mandates related to energy and sustainability, which might necessitate contract modifications. Finally, maintaining consistent oversight and ensuring the contractor's continued commitment and performance over such an extended period requires sustained effort from the contracting agency (GSA) to prevent performance degradation or complacency.

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: $40,767,515

Exercised Options: $10,433,459

Current Obligation: $10,433,459

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