Thursday, August 9, 2012

5th Fuel Gets a Green Paint Job: Army Seeks Renewed ESPC Contract Interest

I was very surprised to see the latest Huntsville solicitation that hit the streets recently.  No, not the multibillion dollar PPA RFP (I’ve had my fill of crow on that one), but the multimillion dollar energy saving performance contract source sought.      One might wonder at the timing of this release, without the usual fanfare from the Army energy office.  Obviously, it has no interest from the Energy Initiative Task Force whose sole focus is big renewable projects.   Bringing this out on the heels of the much ballyhooed PPA deal would tend to distract, not bring attention to the potential project(s).   Regardless, I have always been a huge proponent of the “5thFuel”, energy conservation and this addition to the tool kit is much welcomed.

As most know, the Army has had a separate ESPC contract vehicle for some time.  This is the 3rd iteration. Army installations have always had the choice to use the Army vehicle, the DOE instrument, ESCO's on the GSA schedule or to initiate a stand-alone, separate contract.  Historically the Army has used the DOE contract vehicle and the Army's own vehicle in equal measure. 

If you look at the past 18 months, the Army has streamlined its ESPC contracting process so that individual task orders get done in about 14 months or less on average.  Also there are about 50% more actions on the Army as compared to the DOE contract vehicle.   

The news here is that due to the Army's overall increased use of ESPC's the past 2 years, there is an emerging requirement to recompete the ESPC vehicle earlier than anticipated to ensure a vehicle  is in place to replace the current contract before the ceiling on that contract is reached.   Meeting market demand?  What a concept!

So, what are the differences between what DOE is doing and what Huntsville wants to do?    I asked folks in the know in the Army and got their take:

-          Army vehicle has been faster from start to finish.    The Army vehicle requires installations to pay up-front, out of Base Operating Support funds. The DOE vehicle rolls in all "project facilitation" costs into the contract, paid back over time.  There will be  a  different set of ESCO's on each vehicle, and in some regions of the country an installation may want to use the vehicle that offers access to an ESCO that is strong in that region.
-          DOE has traditionally had better access to technical experts at DOE labs than the Army (which is good for projects that include renewable).  The Army feels they have addressed this and are now doing ESPC's out of Huntsville with renewable.
If the Army can figure out how to overcome some of the concerns Commanders have in using the current ESPCs (M&V mistrust, egregious markups, etc.), then good on them.  More work for everyone is a good thing, so if you are in this business, get you names in and keep me posted on the process.  The Army clearly has the bit in their teeth and are off to the races.  And good job keeping it on the down low, if that was the intent.   Dan Nolan

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