Energy Conservation

As the nation's single largest user of energy, the federal government has emphasized energy conservation through legislation and executive orders. Under performance contracting, an agency enters into a multiyear agreement with an energy service company, which installs improvements in government buildings. The company assumes all up-front capital costs and, in return, receives a portion of the annual savings attributable to the improvements for the duration of the contract. Performance contracting allows the government to cut energy costs without appropriating funds and without incurring capital costs for energy-efficient upgrades. This report discusses (1) the civilian agencies that have awarded energy savings performance contracts, (2) the characteristics of firms that the Energy Department has listed as qualified for performance contracts, (3) the firms that submitted project proposals but were not awarded contracts and the reasons why, and (4) the responsibilities of the federal civilian agencies involved in performance contracting and the administrative costs they incurred through their participation.

GAO found that: (1) the National Park Service and the Federal Bureau of Prisons (BOP) awarded energy savings performance contracts in 1995 and 1996; (2) the Park Service awarded a contract for about $2.3 million to a firm whose technical expertise and contracting experience was determined to be the best value; (3) energy savings improvements at the Park Service's Ellis Island and Statue of Liberty included new lighting, more efficient motors for air handling and pumping systems, and an energy management control system; (4) BOP awarded a contract for about $700,000 for a solar hot water system to the only firm qualified by DOE to provide such a service; (5) the benefits of performance contracting included reducing energy costs, helping agencies meet their energy savings requirements, and creating an incentive for contractors by linking their compensation to the savings achieved through their work; and (6) the Park Service spent about $246,000 and BOP spent about $70,500 in administrative costs associated with the performance contracts.