VA Awards $142.8M Energy Savings Contract to RWE Clean Energy Solutions

Contract Overview

Contract Amount: $142,796,543 ($142.8M)

Contractor: RWE Clean Energy Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-12-20

End Date: 2041-03-19

Contract Duration: 8,855 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC)

Place of Performance

Location: FAYETTEVILLE, CUMBERLAND County, NORTH CAROLINA, 28301

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $142.8 million to RWE CLEAN ENERGY SOLUTIONS, INC. for work described as: IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC) Key points: 1. Significant contract value of $142.8 million for energy efficiency upgrades. 2. Full and open competition indicates a potentially competitive bidding process. 3. Long contract duration (2016-2041) suggests a long-term commitment to energy performance. 4. Engineering Services (NAICS 541330) is a common sector for such large-scale projects.

Value Assessment

Rating: good

The contract value of $142.8 million for an Energy Savings Performance Contract (ESPC) appears reasonable given the long duration and scope. Benchmarking against similar ESPCs would provide a more precise assessment of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust process for soliciting bids. This method generally promotes competitive pricing and allows for a wide range of potential contractors to participate.

Taxpayer Impact: The taxpayer impact is expected to be positive through long-term energy cost savings and improved facility efficiency, though the initial investment and ongoing performance are key factors.

Public Impact

Improved energy efficiency at VA facilities, leading to reduced operational costs. Potential for modernization of infrastructure and adoption of new energy technologies. Contribution to government sustainability goals and reduced environmental impact. Creation of jobs in the energy services and construction sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to scope creep or changing technology relevance.
Performance metrics and verification are crucial for ensuring actual savings.
Potential for cost overruns if not managed effectively.

Positive Signals

Commitment to energy efficiency and sustainability.
Leverages private sector expertise for public infrastructure improvements.
Potential for significant long-term cost reductions for the VA.

Sector Analysis

This contract falls within the Engineering Services sector, specifically focusing on energy efficiency and performance contracts. Spending in this area is driven by government mandates for sustainability and cost reduction in federal facilities.

Small Business Impact

While the prime contractor is RWE Clean Energy Solutions, Inc., the contract details do not specify the extent of small business participation. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses.

Oversight & Accountability

Oversight will be critical to ensure that the contractor meets the energy savings targets and that the firm-fixed-price structure is adhered to. Regular performance reviews and audits are essential for accountability.

Related Government Programs

Engineering Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Long contract duration
Reliance on projected savings
Potential for technology obsolescence
Complexity of performance verification

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $142.8 million to RWE CLEAN ENERGY SOLUTIONS, INC.. IGF::OT::IGF ENERGY SAVINGS PERFORMANCE CONTRACT (ESPC)

Who is the contractor on this award?

The obligated recipient is RWE CLEAN ENERGY SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $142.8 million.

What is the period of performance?

Start: 2016-12-20. End: 2041-03-19.

What are the projected energy savings and payback period for this contract?

The projected energy savings and payback period are critical metrics for evaluating the value of this ESPC. Without specific projections, it's difficult to definitively assess the financial return on investment for the Department of Veterans Affairs. A thorough review of the contract's baseline energy consumption and the proposed efficiency measures is necessary to quantify these benefits.

How will the VA ensure the long-term effectiveness of the energy-saving technologies implemented?

The VA can ensure long-term effectiveness through robust performance monitoring, regular maintenance schedules, and clear contractual clauses for technology upgrades or replacements. Establishing a dedicated team to oversee the contract's performance, conduct periodic energy audits, and verify savings against the baseline will be crucial for sustained success.

What is the risk of the firm-fixed-price contract leading to a reduction in the quality of work?

While firm-fixed-price contracts aim to control costs, there's a risk that a contractor might reduce the quality of work to maintain profitability if unforeseen issues arise. Mitigation strategies include detailed performance specifications, stringent quality control measures, independent verification of savings, and clear penalties for non-performance within the contract.

Industry Classification

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

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 SUMMIT LAKE DR STE 210, VALHALLA, NY, 10595

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

Financial Breakdown

Contract Ceiling: $163,943,512

Exercised Options: $163,943,512

Current Obligation: $142,796,543

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29032

IDV Type: IDC

Timeline