DoD's $13.4M energy performance contract with CEG Solutions LLC awarded under full and open competition

Contract Overview

Contract Amount: $13,438,366 ($13.4M)

Contractor: CEG Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2014-09-25

End Date: 2036-06-30

Contract Duration: 7,949 days

Daily Burn Rate: $1.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF WEBSTER OUTLYING FIELD ESPC

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $13.4 million to CEG SOLUTIONS LLC for work described as: IGF::OT::IGF WEBSTER OUTLYING FIELD ESPC Key points: 1. Contract value of $13.4M over 17 years suggests a long-term investment in energy efficiency. 2. The contract was awarded through full and open competition, indicating a broad search for qualified bidders. 3. A high number of bids (10) suggests strong market interest and potentially competitive pricing. 4. The fixed-price contract type shifts performance risk to the contractor. 5. The contract's duration and scope point to a significant project for energy infrastructure modernization. 6. The engineering services NAICS code points to a focus on technical expertise in project execution.

Value Assessment

Rating: good

Benchmarking the value of this Energy Savings Performance Contract (ESPC) is complex due to its long-term nature and performance-based structure. However, the $13.4 million total contract value spread over nearly 18 years indicates a significant investment in energy infrastructure. The fixed-price nature of the contract, coupled with a competitive award, suggests that the pricing was likely vetted against market alternatives. Without specific performance metrics and realized savings, a definitive value-for-money assessment is challenging, but the competitive award process provides a degree of confidence in the pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, meaning all responsible sources were permitted to submit bids. The solicitation attracted 10 bids, indicating a robust level of competition for this energy performance project. A higher number of bidders generally leads to better price discovery and can result in more favorable terms for the government, as contractors compete to win the award.

Taxpayer Impact: The extensive competition for this contract suggests that taxpayers benefited from a rigorous process that likely drove down costs and ensured the selection of a capable contractor at a fair price.

Public Impact

The Department of the Navy benefits from improved energy efficiency and reduced operational costs at its facilities. The contract supports the delivery of engineering services focused on energy infrastructure upgrades. The project's geographic impact is concentrated in Maryland, where the facilities are located. The contract likely involves a specialized workforce skilled in energy engineering and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (17+ years) increases the risk of technological obsolescence or changing energy market conditions.
Performance metrics and savings verification mechanisms are critical for ensuring actual value realization over the contract term.
Reliance on a single contractor for an extended period could limit future flexibility in adopting new technologies or approaches.

Positive Signals

Awarded under full and open competition with 10 bidders suggests a well-defined requirement and strong market interest.
The firm fixed-price contract type transfers performance risk to the contractor.
The contract focuses on energy efficiency, aligning with federal sustainability goals and potential long-term cost savings.

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 driven by federal mandates for energy reduction and sustainability. This contract, valued at $13.4 million, falls within the typical range for significant facility energy upgrades, reflecting the substantial investment required for such projects.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a specific small business set-aside. While the prime contractor is CEG SOLUTIONS LLC, the extent of small business subcontracting is not detailed in the provided data. Agencies are encouraged to maximize small business participation, and further investigation into subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. The firm fixed-price nature shifts some performance risk to the contractor, but ongoing monitoring of milestones, deliverables, and energy savings is crucial. Transparency is generally maintained through contract reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Energy Savings Performance Contracts (ESPCs)
Federal Energy Management Program (FEMP)
Department of Defense Energy Initiatives
Utility Energy Services Contracts (UESC)

Risk Flags

Long-term contract duration may lead to technological obsolescence.
Energy market volatility could impact savings realization.
Verification of energy savings requires rigorous ongoing monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.4 million to CEG SOLUTIONS LLC. IGF::OT::IGF WEBSTER OUTLYING FIELD ESPC

Who is the contractor on this award?

The obligated recipient is CEG SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $13.4 million.

What is the period of performance?

Start: 2014-09-25. End: 2036-06-30.

What is the track record of CEG SOLUTIONS LLC in delivering similar energy performance contracts for the federal government?

Assessing the track record of CEG SOLUTIONS LLC requires a review of their past performance on federal contracts, particularly ESPCs. Information on contract history, past performance evaluations, and any documented issues or successes would be crucial. While this specific contract is for $13.4 million and spans over 17 years, understanding their experience with projects of similar scale, complexity, and duration is important. A review of contract databases and performance assessment systems (like CPARS) would provide insights into their reliability, technical capabilities, and adherence to schedule and budget on previous engagements. Without this specific data, it's difficult to definitively assess their past performance.

How does the $13.4 million contract value compare to other similar energy performance contracts awarded by the Department of the Navy or DoD?

The $13.4 million contract value for this ESPC is a significant investment, but its comparability to other contracts depends on the scope and scale of the energy conservation measures implemented. ESPCs can range widely in value, from smaller facility upgrades to comprehensive campus-wide overhauls. For the Department of the Navy or DoD, which manage vast real estate portfolios, $13.4 million might represent a substantial project for a specific base or installation, or it could be one of many such investments. Benchmarking would involve comparing the cost per square foot, the projected energy savings as a percentage of baseline, and the total contract value against other ESPCs awarded within the same agency or across the federal government for similar types of facilities and energy efficiency measures.

What are the primary energy conservation measures (ECMs) included in this contract, and what are the projected energy savings?

The provided data does not specify the exact energy conservation measures (ECMs) included in this contract or the projected energy savings. ESPCs typically encompass a range of upgrades such as lighting retrofits, HVAC system improvements, building envelope enhancements, renewable energy installations, and water conservation measures. The projected energy savings are the cornerstone of an ESPC's financial justification, as they are used to repay the contractor's investment and generate savings for the government. A detailed analysis would require access to the contract's scope of work, the energy audit report, and the savings calculation methodology agreed upon by the parties.

What are the key performance indicators (KPIs) and verification methods used to ensure CEG SOLUTIONS LLC meets its obligations under this contract?

Key performance indicators (KPIs) and verification methods are critical for ensuring the successful execution and financial viability of an ESPC. While not detailed in the summary data, typical KPIs for such contracts include achieved energy savings (measured in kWh, therms, or dollars), system uptime and reliability, completion of project milestones on schedule, and adherence to environmental and safety standards. Verification often involves Measurement and Verification (M&V) protocols, which systematically track energy consumption before and after the implementation of ECMs. Independent third-party verification or government-provided metering data are common methods to ensure that the projected savings are actually realized and that the contractor is meeting its contractual obligations.

How does the 17-year duration of this contract impact the risk profile for the Department of the Navy?

The 17-year duration of this ESPC introduces several risk factors for the Department of the Navy. Firstly, there's the risk of technological obsolescence; energy efficiency technologies evolve rapidly, and measures installed early in the contract might be outdated by its end. Secondly, energy market conditions (prices, regulations) can fluctuate significantly over such a long period, potentially impacting the accuracy of initial savings projections. Thirdly, the long-term commitment ties up future facility energy budgets and limits flexibility to adopt new, potentially more effective, energy solutions. However, the long duration also allows for amortization of significant capital investments, potentially leading to greater overall savings and a more comprehensive upgrade than shorter-term contracts might permit. Robust M&V and contract flexibility clauses can help mitigate some of these risks.

Industry Classification

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

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: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1005 NORTH GLEBE RD STE 620, ARLINGTON, VA, 22201

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

Financial Breakdown

Contract Ceiling: $39,507,816

Exercised Options: $39,507,816

Current Obligation: $13,438,366

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29031

IDV Type: IDC

Timeline