Your Alternative Financing Questions Answered

April 1, 2002

What are the desired outcomes of the kick-off meeting? Are the decisions made at the meeting final?

During the kick-off meeting, the agency and the energy service company (ESCO) meet and exchange information to help prepare the ESCO for its preliminary site survey. A kick-off meeting clarifies expectations, establishes communications protocols, and develops a schedule for agency and ESCO tasks through the award of the delivery order. The agency uses the kick-off meeting to make sure that the ESCO has a clear understanding of the agency's priorities and general parameters for the project. Final decisions and complete agreement are not necessary or expected at this stage. But general guidelines can be established concerning which buildings or sites are to be targeted, problems that need to be fixed, potential energy conserva-tion measures (ECMs), measurement and verification (M&V) guidelines, payback ranges, project timelines, and length of contract term.

Does every agency and facility need to engage in a competitive process to choose a contractor?

Once an agency identifies a project it can obtain a performance contract through either sole source or open competition. If the agency chooses the sole source route, the ESCO must have either a special capability or unique understating of the project, which makes them especially qualified to perform the work. A sole source award is usually made for a specific technology, a proprietary technology, or if the ESCO has a prior history working on the site or similar sites. A competitive process for choosing an ESCO is used when an ESCO does not have an advantage at a particular site.

What is the contracting authority?

All Federal agencies that have government-owned facilities have the authority to enter into energy savings performance contracts (ESPCs) by virtue of the authorizing legislation: P.L. 102-486, Energy Policy Act of 1992, codified as 42 USC 8287 of the National Energy Conservation Policy Act for civilian agencies. DOD authorizing language is found in 10 USC 2865, Energy Savings at Military Installations. DOE and DOD have created regional Super ESPC mechanisms with dollar limits.

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