A program designed to achieve energy savings in federal buildings—with resulting reductions in overhead costs to the budgets of agencies operating in them—may not achieve its stated savings targets, a report by the GSA inspector general has said.
The report focused on energy savings performance contracts, under which a federal agency uses a private energy company to finance and install energy efficiency improvements in a federal building and then uses the energy savings to fund the payments to the energy company until the improvements have been paid off.
As part of the process, GSA and the energy company must agree on a baseline, which is the cost for energy consumption the government would have incurred without the project.
A review of 14 such arrangements valued at more than $200 million found that GSA: “risks paying for unrealized energy savings because it did not comply with guidelines for witnessing energy baseline measurements; did not achieve energy-related savings on one ESPC task order because it overestimated savings and was unable to renegotiate the operations and maintenance contract to achieve the remaining savings; did not comply with requirements for establishing fair and reasonable pricing; awarded a task order for a building that may be disposed of before planned savings can offset its costs; and awarded a stand-alone ESPC that had no approved measurement and verification plan for achieving energy savings.”
The report recommended that GSA: have its personnel witness energy baseline measurements; ensure that energy-related savings calculations are accurate; implement training for price reasonableness; and ensure that measurement and verification plans are approved prior to contract award. Management generally concurred.
