Energy Savings Performance Contract

The Department of Veterans Affairs established a Master IDIQ for energy savings performance contracts (ESPCs) on May 21, 2020, with ordering authority extending through May 20, 2030, giving roughly 3 years and 10 months of remaining ordering window. The vehicle is fully set aside for Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) verified through the Vets First program and listed on the Department of Energy's Qualified List of Energy Service Companies; however, task-order awards show a roughly even split between SDVOSB sole-source and unrestricted competitive orders (45% SDVOSB, 55% unrestricted).

Through ESPCs, prequalified ESCOs develop, finance, implement, and perform measurement and verification of energy conservation measures at VA facilities. The ESCO guarantees annual cost savings, privately finances the investment, and recovers its return from a contractually determined share of realized energy cost savings. The VA pays for services and debt service from annual savings over the contract term at no upfront cost to the agency.

Eleven task orders have been awarded since May 2020, with combined potential value of $162.8 million and $61.2 million obligated (38% burn). Recent ordering activity has moderated: two orders in 2022, one each in 2023 and 2024, two in 2025, and one in 2026. The vehicle operates under a $750 million shared ceiling.

Competition concentrates among three firms. Utility Systems Solutions, Inc., leads by potential value with $68.5 million across two orders. Tls-Ces Services I, LLC, holds three orders totaling $57.3 million. Hsgs-Ameresco, LLC, holds two orders worth $37 million. These three firms account for $162.8 million of combined potential value. Four smaller primes hold orders valued at $2 thousand to $2 thousand.

Customer concentration is high: the VA Technology Acquisition Center Austin places the majority of the work ($94.3 million across four orders), while VA Veterans Health Administration Veterans Integrated Service Network 19 holds a single $68.5 million order. The majority of orders span multi-year performance periods, with completion dates extending into the 2040s and 2050s. Recent awards include Denver facility improvements ($24 million ceiling), Oklahoma City and Muskogee projects ($68.5 million ceiling), and Salt Lake City and Grand Junction work ($36.9 million ceiling).

The VA will utilize the Department of Energy (DOE) Qualified List of Energy Service Companies (ESCOs). ESPCs are multi-year contracts authorized under 42 U.S.C. A 8287 for the purposes of achieving energy savings and benefits ancillary to that purpose. Through ESPCs, prequalified ESCOs develop, finance, implement, and perform measurement & verification on energy conservation measures (ECMs) for federal agencies at no upfront cost to the installation or agency. The return to an ESCO is a contractually determined share of the energy cost savings generated by the ESPC project. Prior to award of a contract, the ESCO conducts a comprehensive energy audit and identifies improvements to avoid facility energy costs and energy related operation and maintenance (O & M) costs. The ESCO guarantees annual cost savings upon implementation of the ECMs and privately finances the investment. The delivery schedule is amortized to allow the federal agency customer to pay for ESCO services and debt service from annual cost savings over the term of the contract.