Insight into Preparing an Energy Savings Performance Contract (ESPC) Proposal

  |  February 3, 2015

Written by: Thomas Hodges

Last August I wrote an article highlighting the forthcoming Department of Energy ESPC IDIQ program: Department of Energy- Energy Saving Performance Contract (ESPC) IDIQ. In that article, I explained the unusual nature of this IDIQ, including the fact that Congressional appropriated funds are not sourced for these projects, but projects are entirely funded with private capital.

DOE’s Office of Energy Efficiency and Renewable Energy (EERE) runs the program, which consists of energy efficiency studies following by commercially financed projects to construct and install the energy saving systems identified by the studies.  The private funding firm receives its profits from the savings delivered, generally over a 25-year term with post-term residual savings reverting to the agency.

Winning an ESPC Contract

The current estimate for RFP release is now the second quarter of 2015, probably March.  However, the contracting officer will not be specific as to the release date. Energy companies planning to submit an ESPC proposal should be well into the capture phase, defining their teammates, and taking action to develop a proposal team.  

Large energy companies are likely bidders because each bidder must qualify officially on the Department of Energy’s Federal Energy Management Program (FEMP) website http://www1.eere.energy.gov/femp/financing/superespcs_doeescos.html.  Qualifications include two citations for successful energy savings efforts by the bidder.  While no number of awards has been specified, DOE has indicated there will be at least two small business set asides with a size standard of $15 million, with an exception for military contractors of $38.5 under certain federal definitions.

The ESPC Contract is the perfect IDIQ for companies with a source of capital to define and execute a program in their field of energy expertise.  Federal projects are not often open to creative industry-developed definitions and solutions, so this is a rare opportunity for the adventurous firm.  OCI has the ESPC proposal expertise to assist companies in writing strong and compliant proposals.  It is doubtful that an exceptionally well written ESPC proposal would be turned down, because the character of the solicitation suggests many awards where the bidder brings an advantage to the execution of public energy saving projects.

 

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