VA's $24.3M Energy Savings Contract with Schneider Electric Shows Mixed Value and Limited Competition

Contract Overview

Contract Amount: $24,262,467 ($24.3M)

Contractor: Schneider Electric Buildings Americas, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-12-19

End Date: 2021-06-30

Contract Duration: 1,654 days

Daily Burn Rate: $14.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF VETERANS INTEGRATED SERVICE NETWORK 8, ENERGY SAVINGS PERFORMANCE CONTRACT FOR GAINESVILLE, LAKE CITY AND BAY PINES, FLORIDA.

Place of Performance

Location: BAY PINES, PINELLAS County, FLORIDA, 33744

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $24.3 million to SCHNEIDER ELECTRIC BUILDINGS AMERICAS, INC. for work described as: IGF::OT::IGF VETERANS INTEGRATED SERVICE NETWORK 8, ENERGY SAVINGS PERFORMANCE CONTRACT FOR GAINESVILLE, LAKE CITY AND BAY PINES, FLORIDA. Key points: 1. The contract's value proposition appears fair, with energy savings projected to offset costs over its term. 2. Limited competition may have impacted pricing, as only one bid was received. 3. Performance risks are moderate, given the long-term nature of energy savings contracts and potential for unforeseen operational changes. 4. The contract aligns with VA's broader goals for facility modernization and energy efficiency. 5. This ESPC falls within the broader category of facility management and energy services for government buildings. 6. The fixed-price structure offers some cost certainty, but limits flexibility for scope adjustments.

Value Assessment

Rating: fair

The total award amount of $24.3 million for this Energy Savings Performance Contract (ESPC) appears reasonable given the scope of energy efficiency upgrades and projected savings. However, without detailed breakdowns of the specific technologies implemented and their expected energy reduction, a precise value-for-money assessment is challenging. Benchmarking against similar ESPCs for facilities of comparable size and complexity would provide further insight into whether the pricing is competitive. The contract's success hinges on achieving the projected energy savings over its duration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under full and open competition, but only one bid was received. This limited competition raises questions about the effectiveness of the solicitation process in attracting multiple qualified bidders. A single bid can indicate potential issues with the solicitation's clarity, the market's capacity, or the attractiveness of the opportunity. This lack of robust competition may have led to a less competitive price than could have been achieved with more bidders.

Taxpayer Impact: A single bid limits the government's ability to negotiate the best possible price, potentially resulting in higher costs for taxpayers than if multiple firms had competed.

Public Impact

Veterans receiving services at VA facilities in Gainesville, Lake City, and Bay Pines, Florida, will benefit from improved building environments and potentially lower utility costs. The contract delivers energy efficiency upgrades and services aimed at reducing the operational footprint of these VA medical centers. The geographic impact is concentrated in Florida, specifically within the service areas of the three named VA facilities. The contract supports jobs in the energy services and construction sectors during its performance period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if projected energy savings are not realized.
Risk of vendor lock-in due to the long-term nature of ESPCs.
Challenges in verifying actual energy savings against initial projections.
Dependence on the financial stability and performance of the sole bidder.

Positive Signals

Focus on energy efficiency aligns with federal sustainability goals.
Fixed-price contract provides some budget certainty.
Potential for long-term operational cost reductions for the VA.

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 financing and expertise to implement energy conservation measures. The market for ESPCs is specialized, often dominated by a few large energy service companies (ESCOs) capable of undertaking complex projects. This contract fits within the broader energy services sector, specifically focusing on government facilities.

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 a large entity, there may be opportunities for small businesses to participate as subcontractors in areas such as installation, maintenance, or specialized services. However, the limited competition at the prime contract level might indirectly reduce subcontracting opportunities if the sole bidder has established internal capabilities or preferred partners.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Performance monitoring would focus on the achievement of energy savings targets and adherence to project timelines. Inspector General audits could be initiated to investigate potential fraud, waste, or abuse, particularly concerning the accuracy of savings calculations and the overall value delivered. Transparency is generally maintained through contract award databases and performance reports, though detailed project-specific data may be less accessible.

Related Government Programs

VA Energy Efficiency Projects
Federal Energy Management Program (FEMP)
Energy Savings Performance Contracts (ESPCs)
Department of Veterans Affairs Facility Management

Risk Flags

Limited Competition
Potential for Overstated Savings
Long-Term Contractual Obligations

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $24.3 million to SCHNEIDER ELECTRIC BUILDINGS AMERICAS, INC.. IGF::OT::IGF VETERANS INTEGRATED SERVICE NETWORK 8, ENERGY SAVINGS PERFORMANCE CONTRACT FOR GAINESVILLE, LAKE CITY AND BAY PINES, FLORIDA.

Who is the contractor on this award?

The obligated recipient is SCHNEIDER ELECTRIC BUILDINGS AMERICAS, 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 $24.3 million.

What is the period of performance?

Start: 2016-12-19. End: 2021-06-30.

What specific energy conservation measures were implemented under this contract, and what were their projected savings?

The provided data does not detail the specific energy conservation measures (ECMs) implemented. ESPCs typically include a range of upgrades such as LED lighting retrofits, HVAC system modernizations, building envelope improvements, and installation of energy management systems. The projected savings are crucial for justifying the contract's value. Without this information, it's difficult to assess the technical approach and the basis for the financial projections. Further analysis would require reviewing the contract's Statement of Work (SOW) and the contractor's proposal, which would outline the ECMs and their expected impact on energy consumption and costs.

How does the $24.3 million award compare to similar ESPCs awarded by the VA or other federal agencies for comparable facilities?

Benchmarking this $24.3 million ESPC against similar contracts is challenging without more specific details on the scope of work and the size/type of facilities involved. ESPCs vary significantly based on the age and condition of buildings, the types of energy-consuming equipment, and the specific energy conservation measures implemented. Generally, ESPCs are performance-based, meaning the contractor is paid based on verified energy savings. A preliminary assessment suggests the award amount is substantial, indicating a significant scope of work. However, a true comparison would require analyzing contracts for facilities of similar square footage, energy usage intensity, and the complexity of the retrofits undertaken.

What is the track record of Schneider Electric Buildings Americas, Inc. in delivering successful ESPCs for the federal government?

Schneider Electric Buildings Americas, Inc. is a major player in the energy services sector and has a significant history of executing ESPCs for various federal agencies, including the Department of Defense and the General Services Administration. Their track record generally includes a large portfolio of completed projects, often involving complex facility upgrades and energy management solutions. While specific performance metrics for individual contracts are not publicly detailed in this dataset, the company's continued engagement in federal ESPC solicitations suggests a level of established capability and past performance that meets agency requirements. Independent reviews or agency performance evaluations would provide a more granular assessment.

Given only one bid was received, what are the potential risks to the VA and taxpayers regarding pricing and project execution?

The primary risk associated with a sole bid is the potential for inflated pricing, as the competitive pressure to offer the lowest cost is absent. The VA may have paid more than if multiple bids had been submitted. Furthermore, a single bidder might have less incentive to ensure optimal project execution or to proactively address issues, as the alternative for the agency is limited. This could lead to delays, cost overruns, or suboptimal performance. The VA's contracting officers would need to exercise heightened diligence in negotiating terms and closely monitoring project progress to mitigate these risks.

What are the long-term implications of this ESPC for the VA's operational budget and sustainability goals?

This ESPC is designed to reduce the VA's long-term operational costs by lowering energy consumption and associated utility bills at the specified facilities. If the projected savings are realized and sustained, the contract will contribute positively to the VA's budget by freeing up funds for other critical services. Furthermore, by investing in energy efficiency, the VA advances its sustainability goals and reduces its environmental footprint, aligning with broader federal mandates. The success of this contract could serve as a model for future energy efficiency investments across the VA portfolio.

How does the $14.67 million in obligated funds compare to the total award value, and what does this suggest about the contract's execution pace?

The obligated amount of $14.67 million represents a significant portion, approximately 60% of the total award value of $24.26 million. This suggests that a substantial part of the contract's funding was committed early on, likely for initial project phases, equipment procurement, or mobilization. The remaining balance would be allocated for ongoing work, performance-based payments tied to savings, or future phases. The ratio indicates a reasonably steady pace of execution, with funds being drawn down as work progresses, rather than a situation where minimal funds were obligated against a large total award, which might suggest delays or a slower start.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Schneider Electric SE (UEI: 275136398)

Address: 1650 W CROSBY RD, CARROLLTON, TX, 75006

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

Financial Breakdown

Contract Ceiling: $31,725,748

Exercised Options: $24,280,992

Current Obligation: $24,262,467

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29042

IDV Type: IDC

Timeline