Georgia Tech Procurement Assistance Center

Global demand for green buildings grows

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A study by Dodge Data & Analytics shows that global demand for sustainable buildings will double by 2018. The research, carried out with the support of United Technologies Corporation and the World Green Building Council (WorldGBC), reports that the anticipated growth will be driven by developing green markets, such as Mexico, Brazil, Saudi Arabia, China and India.

The report, World Green Building Trends 2016, Developing Markets Accelerate Global Green Growth, finds that the percentage of companies expecting to have more than 60 percent of their building projects certified green will more than double by 2018, from 18 to 37 percent.

Keep reading this article at: http://www.constructionglobal.com/managementplanning/602/Global-demand-for-green-buildings-grows

GSA issues recommendation for ‘green’ building certification

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U.S. General Services Administration (GSA) has issued a recommendation on the federal government’s use of third-party green building certification systems.  GSA is required by law to issue a recommendation to the Department of Energy (DOE) on how the federal government can best use certification systems to measure the design and performance of the federal government’s construction and major renovation projects.

“GSA has opened this review to an extensive public process, and we’ve made this recommendation using input from the public, industry stakeholders, and sustainability experts,” said Kevin Kampschroer, Director of GSA’s Office of Federal High-Performance Green Buildings, on Oct. 25, 2013. “We’ve found two tools that allow us to measure how federal buildings of all kinds can best save energy, improve overall performance, and cut down utility costs.”

In its recommendation to DOE, GSA recommended the Green Building Initiative’s Green Globes 2010 and the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) 2009 as the third-party certification systems that the federal government can use to gauge performance in its construction and renovation projects. Other certification systems were not selected because they did not align with the government’s requirements. Additionally, under today’s recommendation, GSA will conduct more regular reviews in order to keep up with the latest green building tools that the market has to offer.

Third party certification systems like LEED and Green Globes help in measuring reduction targets for water, energy, and greenhouse gas emissions against industry standards. Agencies can use one of the two certification systems that best meet their building portfolios, which range from office buildings, to laboratories, to hospitals, to airplane hangars.

Federal construction and modernization projects must adhere to the government’s own green building requirements by law and executive orders. No one certification system meets all of the federal government’s green building requirements. Green building certification systems are just one tool that GSA uses to cut costs and meet sustainability and economic performance goals.

GSA has worked to make federal buildings more efficient by reducing water and energy use, which saves taxpayer dollars and reduces the impact on the environment.  GSA’s efforts to increase sustainability are a central part of its mission to deliver the best value in real estate to the government and the American people.

Green Government: An interview with GSA’s top Green building officials

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The General Services Administration (GSA) is one of the largest owners of real estate in the country, composed primarily of office buildings and courthouses, land ports of entry, and warehouses.  The GSA owns and leases more than 354 million square feet of space in 8,600 buildings across the nation.

The GSA is also the owner of one of the greenest real estate porfolios.  As of the summer of 2010, the GSA had 48 LEED-certified owned and leased buildings with approximately 150 more working towards accreditation. Eighteen of those projects exceeded the minimum with LEED Gold certifications, and one GSA lease, the FBI Regional Office in Chicago, achieved a Platinum LEED rating for Existing Buildings.  The GSA has required LEED Silver certification for its projects for some time, and now requires that new Federal buildings achieve LEED Gold certification.

While I was at GreenBuild in Chicago, I had the chance to sit down with Kevin Kampschroer, GSA’s Director of the Office of Federal High-Performance Green Buildings and Eleni Reed, GSA’s Chief Greening Officer.

We talked about GSA’s experience greening the Federal government’s real estate portfolio, implementing the GSA’s LEED Gold requirement and the challenge–and benefits–of trying to do four times as many contracts as the GSA normally does because of the influx of $5 billion in Stimulus funding. 

Here is what they said:

GBLB: What has the GSA done with the Stimulus money? 

KK: The GSA has a bit of a different position than other agencies because the GSA actually enters into the contracts with builders and other receipients, as opposed to granting funds to states and other entities that ultimately contract with the recipients.  As of the end of September we had awarded $5 billion [for greening the Federal real estate and fleet].  After the award, it takes some time for the contractor to get the contract and hire the people and do the work, but we have made $1 billion in payments so far.

GBLB: What was impact of the Stimulus money on the GSA?

KK:  As a result of the Stimulus, we awarded four times as many contracts as the GSA usually does in the same period of time.  This forced us to find ways to be more efficient in what we were doing.  For example, we started “speed dating.”  Where decisions had to be made, we put all the decision makers in a room togther to come to a decision quickly.  Executives and managers had to delegate some of the decision-making to ensure efficiency. 

Because the projects had to be “shovel ready,” many of the designs were already done.  The designs met our specifications, but were not necessarily the best possible designs–the most you can do with the budget that you have.  Going forward, we are retooling our performance criteria and specifications to spur teams to be more innovative and creative with the budget they have.

For example, the National Renewable Energy Laboratory is a net-zero building.  We gave the team specifications, and we incentivized the team by paying them mroe the closer they got to the goals.

For other projects, we had a relatively brief minimum performance criteria which was a goal statement for the project.  It has resulted in more rapid and more innovative designs. However, this requires accepting a shift in risk to the Government side.  But the less risk you take, the less you get [in terms of innovation and design.]

This also has implications for allocating capital.  The GSA has to allow for approximation up front and not require everything to be fixed from the beginning of the project.  

GBLB:  Now that you have all these green buildings, what are you going to do next?  

ER: We are looking to get good metrics about whether we are doing what we set out to do [in terms of building performance].  We have 250 buildings with baseline metrics across a wide variety of project types so we should be able to get some good data. 

GBLB: How will the experience with the Stimulus funds impact the agency going forward? 

KK: We will be more efficient and more effective.  We will have achieved significant improvement in our portfolio [of buildings].  The budget will be extremely lean in the future.  It will be important to apply the lessons we have learned [about how to do projects more efficiently] to operating and maintaining the buildings to prevent deterioration.  We have an opportunity in tracking the performance of the inventory over time and across the portfolio.

GBLB: What about your requirement that GSA projects achieve LEED Gold certification?

KK: We select contractors who know that this is the expectation.  We have been doing LEED Silver for a decade, this is raising the bar to LEED Gold, but the architect and engineering firms know how to do it. 

When we budget the project, we have adjusted the process to allow for LEED Gold certification.  We have done studies on standard versus green construction, you can do LEED Silver for less than conventional construction because of integrated design. 

GBLB: Have you ever had a project fail to get the mandated certification? 

KK: The way we started out was that our goal was LEED Silver.  We have had building that did not reach that level of certification, but never had one that failed to acheive minimum LEED certification.

For more on the GSA’s efforts, Architecture Week had an article by Kevin, and Kevin’s testimony before the House Subcommittee on the GSA’s Stimulus efforts is available here.

–  by Shari Shapiro – Dec. 9, 2010 – Sustainable Cities Collective

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Energy contracts help agencies reach green goals

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Agencies have until Sept. 1 to tell the White House what they think of the strategy to reduce federal greenhouse emissions.

The administration extended the comment deadline from Aug. 16 to give agencies more time to understand the governmentwide requirements for calculating and reporting greenhouse gas emissions associated agency operations.

The draft calls for agencies to report their baseline 2010 greenhouse gas emission inventory by January 2011.

“The data required to develop an agencywide inventory will likely be drawn from multiple levels throughout an agency’s organizational structure,” the draft strategy states. “This guidance has been developed to provide federal agency users, whether representing facility-level activities or headquarters-level functions, with the necessary information to fulfill reporting requirements.”

One way several agencies are not only reducing their carbon footprint, but saving money as well is through the Energy Department’s Energy Service Companies (ESCOs) contracts. And soon, DoE will provide agencies with a dashboard to better understand and track energy efficiencies through the program.

“These contracts are used by federal agencies basically to tap into the technological and financial resources of the private sector to implement energy savings from renewable energy projects and related activities that generate savings to the agency’s utility bill,” said Skye Schell, a supervisor in the Federal Energy Management Program, which is part of DoE’s Energy Efficiency and Renewable Energy department.

Schell said agencies can benefit from upgraded infrastructure and modernized plants.

“They cover a wide range of technologies,” he said. “Really any efficiency technology implementation you can think of probably has been included in Energy Savings Performance Contracts (ESPCs) over the year. Different renewables, wind projects, solar thermal, photovoltaics, geothermal, all have been aspects of ESPCs. It’s quite a breadth of technology.”

He added that the investments are in the tens of millions of dollars as agencies may replace a central heating plants or converting a fossil fuel infrastructure to a biomass plant.

The cost of a typical project can run between $8 million and $10 million. The company bids on the work using a type of share-in-savings approach.

Schell said the one big difference is the energy companies’ estimate and the agency agrees to the projected savings on the front end of the deal.

“We do ongoing measurement and verification to determine if the savings were in fact achieved, and if so, then the energy savings companies gets their share of savings,” Schell said.

Usually on share-in-savings contracts, vendors make the upfront investments and receive money as the savings come in. Agencies have used this type of contract in the past for recovery audit initiatives.

Agencies also receive savings from paying less for electricity or water or other types of energy.

More and more agencies are starting to use the program. Schell said in 2008, the vehicle saw about $300 million in terms of investment value in projects. A year later, the investment increased to $450 million, and Schell expects the value to increase by another $100 million to $550 million in 2010.

He said about 19 agencies have active projects with DoE, the Justice Department and the Navy among the biggest agency users of the contract.

Schell said these contracts usually are long-term deals where companies invest more than $10 million and are paid back with interest on average over 18 years.

Over the next six months, Energy will give agencies more data to better understand how to reduce their greenhouse gas emissions and carbon footprints.

Schell said Energy will make its ESPC dashboard available for government officials and contractors.

“We are tracking key indicators of program performance,” he said. “The dashboard answers questions such as trends in agency uses of the program, which Energy Service Companies are participating, what is the pipeline of projects and awards, the time it takes from inception to award, the cost of borrowing associated with the program, and the cost of BTU saved associated with the program. It really gives us a decent snapshot of the program efficiency and effectiveness.”

Energy has used the dashboard since 2008, mostly for internal tracking. But Schell said by the end of the calendar year, Energy will have removed any sensitive data and ensured the information in the dashboard is accurate and open it up to agency users.

“Agencies using our program may be interested in information and trends to compare their experiences with others, and also this might be a tool we use to put out report cards for ESCOs for agencies to review against different parameters,” he said.

— by Jason Miller – August 19, 2010 – FederalNewsRadio.com

Government contracting developments worth watching

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There are several new developments in the government contracting arena which will have an effect on how you do business with federal, state and local agencies in the future. 

New rules soon will affect woman-owned and small disadvantaged-owned businesses; more transparency is being called for in both monitoring functions and contract award decision-making; a sharper focus is being given to federal contract awards to small businesses;  federal contract spending is predicted to drop; and government acquisitions are “going green.” 

To help you track these developing trends, the Georgia Tech Procurement Assistance Center (GTPAC) presents this quick reference guide:

  • The National Association of Women Business Owners (NAWBO) recently submit comments on the U.S. Small Business Administration (SBA)’s proposed rule for the Women’s Procurement Program on behalf of its members.  You can find NAWBO’s views here, read the Small Business Administration’s summary of the Mar. 2, 2010 proposed rule here, and read the full text of the proposed rules here.  On July 28, 2010, the head of the SBA told the House Small Business Committee that the women’s small business contracting program will start before the end of 2010; details here.
  • There are new rules also being proposed for changes in the U.S. Department of Transportation’s disadvantaged business enterprise (DBE) program; an article containing details can be seen here. 
  • Increased calls for transparency, from both within and outside of government, are getting attention.   Pointing to the absence of a centralized federal database listing instances of contracting misconduct, the Project On Government Oversight (POGO) is now compiling and providing such data on its own.  You can find sortable details here.    In addition, the Sunlight Foundation combines data from the Federal Procurement Data System and the Federal Assistance Award Data System to create a free, searchable database of federal government contracting and spending, which you can access here.  Meanwhile,  the General Services Administration (GSA) and federal acquisition councils are seeking advice from the public on how best to publish contract information; details here.
  • In recent weeks, the volume has been turned up on the federal government’s contract spending with small businesses.  While it’s the government’s policy to award 23% of its contracts to small businesses, numerous reports show that not only has this goal been missed  but that large businesses — misclassified as small businesses — are receiving these set-asides.  A recent news article by the president of the American Small Business League summarizes this problem.  The Government Accountability Office (GAO) documents ineligible firms receiving government contracts designated for service disabled veteran owned small businesses here, and ineligible firms receiving contracts set-aside for small disadvantaged 8(a) firms here.  The White House, meanwhile, recently called for the establishment of a pair of interagency task forces to help federal agencies award more contracts to small businesses; details here.
  • The president’s proposed FY2011 budget includes $36 billion fewer federal contracting dollars.  This is about a 5% cut over the current year ending Sept. 30, 2010.  The new budget reflects a freeze on discretionary spending as well as an “insourcing” initiative, meaning fewer contractors and more government workers.  Read an article about an analysis of the proposed federal contracting budget here.  See details on how insourcing could hurt small businesses here.
  • More and more attention is being given to contractor performance as a factor in contract award decisions.  Click on the hyperlinks here to read articles about the Navy’s proposed “preferred contractor program” and the establishment of the Federal Awardee Performance and Integrity Information System (FAPIIS) which took effect on April 22, 2010.  You also can read about a bi-partisan effort in the Senate that could double the length of time contractors’ performance records remain active in government databases.
  • Energy efficiency and savings, green construction, green technology and smarter acquisition decisions — all continue to be emphasized in current government contracting.  Recent articles about each of these topics  here.

Keep watching www.gtpac.org to see reporting on the latest developments in all aspects of government contracting.

© 2010 Georgia Tech Procurement Assistance Center – All Rights Reserved.

A crash course in selling “green” to the government

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Driven by the need to reduce our dependency on fossil fuels, improve the economy and national security, create green jobs and reduce environmental impact, the federal government is taking the lead on green purchasing in a number of markets and sectors.

All agencies are directed to acquire recycled content, energy efficient, renewable, bio-based and environmentally preferable products and services towards achieving certain goals. Under the Energy Independence and Security Act, all federal managers are required to cut their fossil fuel use at new and renovated government facilities to 55 percent by the end of 2010 and 100 percent by 2030.

There are many “Buy Bio” and “Buy Green First” programs throughout the government, and the Department of Defense requires that green products and services must be considered as the first choice in all procurements. The government’s premier purchasing agency, the General Services Administration (GSA), has implemented Go Green Initiatives giving preference to products and services that meet green purchasing criteria. These policies are not limited to products. The environmental services and green or LEED construction management sector are also in high demand.

Green procurement does not intend to rewrite the book on buying, but merely adds an environmental dimension to the decision-making process. The standard purchasing criteria of price, quality, and availability remain paramount. The environmental impacts can be seen as part of the quality criterion.

First and foremost, you must understand the basics on how to do business with the government and then you can use these attributes as part of your marketing strategy. The bottom line when dealing with the government is to make it easier for them to do business with you over others. Here are some tips:

1) Question yourself. Is this something you really want to do? It will take a focused effort up front to unravel the red tape and figure out the game. Are you willing to make the investment of time and resources to penetrate the market? Once you’re in, your business can grow at warp speed — the challenge is just in getting there.

2) Getting started with the administrative steps. There are five places you should register right off the bat:

  1. Obtain a Dun & Bradstreet # (DUNS) at DNB.com
  2. Register at the Central Contractor Registration (CCR), and figure out your business NAICS codes at SBA.gov
  3. Register at the Department of Veterans Affairs if applicable.
  4. Register with the Small Business Administration (SBA).
  5. Register at the Online Representations and Certifications Application (ORCA).

If you’re so inclined consider visiting the local SBA and Procurement Technical Assistance Center (PTAC). There are a number of good online resources for more guidance on getting over the bureaucratic hurdles.

3) Stay informed. Sign up to receive emails about federal opportunities at the Central Federal Business Opportunities site.

4) Implement an aggressive federal sales program. You’ll need to create or augment your business plan and simultaneously work towards obtaining a GSA Schedule contract or a long-term fixed price contract with the government.

For a number of reasons, getting a Schedule contract is the only practical way a business can realistically compete. It reduces award time to 14 days from 248 days on average, minimizes the federal buyer’s risk and increases transparency, and a fixed-price contract is used most often throughout the government.

Although a Schedule contract is really just something that gives you the “right” to sell to the government, they’re difficult to get and often buried under layers of government speak. But if you persevere, you’ll face significantly less competition, federal buyers will reach out to you rather than you going after business, and such contracts can be extremely profitable and a main source of revenue for your business.

5) Sell in your own backyard. There’s no need to head to Washington to sell to the government — unless that’s your backyard. You can find information about local government offices in any number of locations, including USA.gov, federal telephone directories and the Federal Citizen Information Center, local blue pages, and installation guides on military.com. There are also tools to locate federally funded research and development centers, Department of Veterans Affairs facilities, and a federal contracts database at FedSpending.org.

And then as with any type of business, get out in the market — go to trade shows and events, meet people and develop your network. The personal connection goes a long way, even when dealing with the government.

6) Get familiar with regulation. The place to start here is the Federal Acquisition Regulation (FAR), online at www.ARNet.gov/FAR.

7) Market your company effectively. To develop marketing materials that speak to a federal buyer, you’ll want to do the following:

  • Create a simple brochure;
  • Augment your business card, since that is the most important thing you can leave behind after a meeting;
  • Add a “government” tab to your web site;
  • Understand how to use Sole Source and Blanket Purchase Agreements;
  • Develop a separate email address for government contacts to allow for quick response;
  • Have a one-page briefing sheet for your reference; and
  • Design and distribute an authorized contract list if on GSA.

When you’re marketing your business, emphasize key points like the warranties you may offer, your experience, your core competencies and capacity, the ROI or pay-back period of your products or services, and the ease of maintenance for your products and quality assurance certifications you’ve received.

You’ll also want to list any trademarks or patents you’ve earned, your GSA contract number, and if you have any socioeconomic factors that might meet procurement guidelines for small businesses, list your business size and classification as identified by the SBA or NAICS coding.

When discussing environmental or social benefits, list any certifications or awards you’ve received. Can you quantify the benefits? How much carbon are you keeping out of the atmosphere — compare yourself to a conventional product or service. Are you contributing to workforce development — are you a U.S. manufacturer or service provider? How much electricity can you keep from being consumed — are you sending anything back to the grid that serves the community due to increased demand? If you think along these lines, you can differentiate yourself from others.

If you are a suppler trying to tap into the federal marketplace, being green is a major differentiator and competitive advantage. Get your facts straight, develop a strategy, and market your products and services effectively. The new green in government can mean big green for your business.

________________________

– Greener World Media – GreenBiz.com

GSA’s Johnson calls zero footprint goal government’s “moon shot”

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The General Services Administration is calling on the federal government to eliminate its environmental impact through green technology and smarter acquisition decisions, agency officials said on Wednesday.

“GSA has to embrace a zero environmental footprint goal. We should set our sights on eliminating the impact of the federal government on our natural environment,” said GSA Administrator Martha Johnson during a speech on Wednesday evening. “This is our moon shot.”

In an earlier conference call with reporters, Johnson said a zero footprint is a big strategic idea that hasn’t yet been translated into specific programs. But, she added, the agency aims to build leadership around sustainability, develop across-the-board training and awareness and attract young professionals who relate to the mission.

“The first thing you start quibbling about is, ‘What does it mean, how do we know it, where do we start measuring, how will we get the biggest bang for the buck?’ ” she said. “We want to have those kinds of conversations.”

When it comes to green technology, government needs to look at the whole IT life cycle to identify energy-saving solutions, Johnson said. For example, data center consolidation, smart building technology, virtual workplaces and reduced computing power all offer ways to build sustainability.

“It also invites the issue of employee culture. We can put in all kinds of dials and switches, but there is behavior that comes along with it, and we need to engage everyone in that conversation,” she added.

GSA also is working to shore up its workforce, said Steve Kempf, acting commissioner of the Federal Acquisition Service. The agency must fill its vacant full-time positions to improve service to its customers and to relieve the burden on staff, he added. Specific initiatives include recruitment of mid-level career employees, an FAS internship program and opportunities to rotate through positions to build management and information technology skills.

The agency’s fiscal 2011 budget request includes $25 million for acquisition workforce initiatives, including improved training, a more careful accounting of workforce strengths and gaps, and a stronger community-building program for sharing best practices.

“This is a way for GSA to have its own moon shot,” said Johnson. “We’re both positioned and poised and ready and eager to play a more aggressive role in this.”

 – By Emily Long  – 05/05/10 – © 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED

GSA invests $4 billion in greener federal buildings

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The General Services Administration has spent $4 billion in Recovery Act funds to convert federal facilities into higher performing, green buildings, the agency announced on Wednesday.

“GSA’s aggressive Recovery Act obligations put people back to work across the country and leverage our buying power to invest in green jobs, energy-efficient technologies, and both traditional construction and emerging green markets,” agency Administrator Martha Johnson said. “By creating a greener, higher performing federal buildings portfolio, GSA’s Recovery Act investments will save taxpayer dollars in energy efficiencies and build a more sustainable economy.”

As of last week, the agency had awarded stimulus construction contracts to more than 500 firms for 391 projects. The projects are in all 50 states, two U.S. territories and the District of Columbia.

Following a trend seen elsewhere with federal construction spending, GSA said many competitive bids came in lower than originally anticipated, allowing officials to reinvest an additional $173 million into green projects.

“By delivering on time and under budget on these green retrofit projects, we’re not only making more cost-saving building improvements than anticipated, but creating new opportunities for more than 500 companies nationwide,” Vice President Joe Biden said.

GSA’s federal buildings fund received more than $5.5 billion through the American Recovery and Reinvestment Act. Of that, about $4.5 billion was made available to convert federal buildings into high-performance green buildings.

According to data available on the Federal Procurement Data System-Next Generation Web site, GSA awarded the majority of its buildings contracts competitively and using a firm fixed-price structure. It is not clear from the data, however, how many of the awards GSA tacked on to existing construction contracts. More than $567 million — or 14 percent — of GSA’s Public Buildings Service stimulus contracts went to small businesses, the data shows.

GSA said some construction projects were under way before the stimulus and that Recovery Act funding was used for additional phases of the work. “Other contracts were awards against previously competed IDIQ construction or professional services contract, while other awards were made by competing new contracts,” the agency said in a statement.

High-performance green buildings generally use less energy, water and resources than typical federal facilities. The agency’s Recovery Act plan states that green buildings also will improve indoor environmental quality, worker productivity and recycling opportunities while cutting air and water pollution.

GSA anticipates that its new construction and major buildings modernizations will achieve LEED silver certification from the U.S. Green Building Council for use of sustainable design and technology. Silver is the third highest of four certification levels available, after platinum and gold.

GSA received an additional $750 million in stimulus funds to renovate and construct federal buildings and courthouses. Those renovations need not be green. Another $300 million is devoted to upgrading land ports of entry.

Some of the agency’s ongoing Recovery projects include the construction of a new energy-efficient courthouse in Austin, Texas; the installation of a solar roof on the Veterans Affairs building in downtown Philadelphia and the conversion of a former World War II munitions plant in St. Louis into a high-performance green building.

GSA is required to obligate at least $5 billion by Sept. 30, the agency said.

– by Robert Brodsky – GovExec.com – April 7, 2010

GSA hits another Recovery Act milestone

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The General Services Administration said today that it’s awarded $4 billion in contracts for hundreds of building construction and renovation projects through the Recovery Act.

More than 500 companies across the country have received contracts for the 391 projects GSA has funded so far since the Recovery Act was passed in February 2009. GSA overall received $5.5 billion in stimulus funds for construction projects, including $4 billion to improve the energy efficiency of existing federal buildings.

Vice President Joe Biden praised GSA for stretching its Recovery Act dollars further than originally planned. Due to the slumping economy, bids came in lower than anticipated, allowing GSA to fund an additional $173 million in work.  “By delivering on-time and under-budget on these green retrofit projects, we’re not only making more cost-saving building improvements than anticipated, but creating new opportunities for more than 500 companies nationwide,” he stated.

Some of the projects now underway include construction of a new energy-efficient courthouse in Austin, Texas; installation of a solar roof on the Veterans Affairs building in downtown Philadelphia; and the conversion of a former World War II munitions plant in St. Louis into a high-performance green building.

by Tim Kauffman-Federal Times-Apr. 7, 2010

Feds stand behind energy savings performance contracts

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By Katherine McIntire Peters – govexec.com – March 19, 2010 – Federal leaders on Friday emphasized their support for using energy savings performance contracts to meet efficiency requirements, but told industry leaders they must work together to improve management and oversight of such contracts.

Energy savings performance contracts, or ESPCs, allow agencies to invest in green building upgrades with little upfront cost: companies finance the improvements in exchange for a share of the savings from reduced energy consumption.

“The issue of energy efficiency has never been more relevant for the federal government,” said Richard Kidd, program manager for the Federal Energy Management Program at the Energy Department, in an address to members of the National Association of Energy Service Companies in Washington.

Recent laws have put tremendous pressure on agencies to reduce petroleum, water and electricity consumption, and in October 2009 President Obama signed Executive Order 13514, which required agencies to measure and reduce greenhouse gas emissions as well.

But an inspector general analysis of Energy Department ESPC contracts in September found that much of the savings stipulated in the contracts could not be verified, and in some cases equipment installed under the pacts was not being maintained. Some contracts were in such disarray that the department continued to pay for energy savings in four buildings that had been demolished.

“We went back and visited all the DOE sites and found that people involved in development [of the ESPC contracts] were no longer there, and new people were not [knowledgeable] about the contracts,” said Ab Ream, a technology program specialist at Energy who spoke to the industry executives.

“It was a huge effort,” Ream said, adding that both government and industry officials must perform better. Improving the way energy savings are measured and verified will be central to restoring confidence in the contracts, he said.

Federal officials want future ESPC deals to take a more comprehensive approach to improving efficiency, Kidd said. For example, while it may be worthwhile to upgrade to a more efficient heating system, if heat is escaping through a leaky roof, then those benefits will be minimal.

In addition, Energy wants ESPC contracts to embrace more new technologies being financed through agency laboratories, Kidd said.

Industry officials expressed some concern about whether federal contracting officials were ready to embrace more comprehensive ESPC contracts in the way Kidd described, and wondered how receptive they would be to adopting new technologies. Kidd acknowledged Energy and Obama administration officials must do a better job of training agency contract professionals in making the best use of the tool.

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(C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.

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