Phase 4 of the Utility Energy Service Contract (UESC) process focuses on project implementation and construction. At this point, a UESC project is much like any other construction project.
Project design is generally 40% to 70% finished before the award is made. The design must be finished, and all submittals reviewed and approved by the agency before the utility can proceed with construction. Additionally, in accordance with 42 U.S.C. § 8253(f)(5), energy consuming equipment and controls systems must be commissioned and operating at design specification prior to acceptance. Government acceptance occurs when the installed measures are ready for beneficial use and operation.
Continuous design-level performance of each measure installed in a UESC is fundamental to achieving projected savings. Strong performance assurance plans enhance the agency’s ability to verify energy conservation measure (ECM) performance throughout the contract life. This is the goal of performance assurance planning.
Step 1: Agency and Utility Hold a Post-Award Conference
A post-award conference is recommended to ensure a strong working relationship between the agency and the utility and to secure successful contract performance. Conference attendees should include the following people from the agency and the utility.
The objectives of the post-award conference are similar to those of earlier kickoff meetings:
- Review roles, responsibilities, expectations, timelines, and communication protocols
- Review schedules for design and construction
- Establish protocols for site access and submittal review.
During this conference, the agency and utility will review details about contract requirements including:
- ECM installation
- Post-installation inspections
- Other aspects of contract performance.
Step 2: Utility Finalizes Project Design and Performance Assurance Plan for Agency Review
The utility completes the project design and provides the design and construction submittals to the agency within the timeframe specified in the task order. This includes:
- Designs and drawings
- Installation plans and schedules
- Quality control inspection plan
- Performance assurance plan
- Permit plan and schedule.
The design and construction submittals provide detailed information the agency can use to confirm that the ECMs will be installed in a manner that complies with contract requirements. The ECMs must be as described in the task order and must meet the design and construction standards in the contract. It is critical to finalize the performance plan details by updating operational strategies, performance metrics, and baseline accuracy.
The utility's designs, plans, and schedules must be approved before construction can begin. The process for submittal and review of the utility's designs and construction and installation plans is defined in the task order.
Agency Review and Approval of Submittals
The agency contracting officer technical representative—contracting officer representative (COR) or designated government representative—will review the design to confirm that:
- It complies with requirements in the task order
- It clearly addresses ECM interfaces with existing equipment
- The drawings' particulars (legends, format, size, and engineering stamp requirements) are in accordance with the task order.
The review should confirm the locations of ECM installations, schedule, acceptable planned service interruptions, requirements for space access, inclusion of a health and safety plan, and installation working hours. The COR will review the ECM quality assurance plan for acceptable logs and reports and a proposed approach for inspections of utility and utility subcontractor work. The review lead will also verify the schedule for equipment and system tests with the utility contact.
Any deficiencies in the installation plan should be communicated to the utility in writing for resolution and submittal of revised installation plans. Upon acceptance of final installation designs and plans, the COR should notify the contracting officer in writing of approval.
Notice to Proceed with Installation and Construction
The agency contracting officer transmits a notice to proceed with ECM installation and construction to the utility indicating that construction can commence after pre-award requirements are met.
The contracting officer must receive acceptable performance and payment bonds (as required), as well as any required insurance certificates before construction begins.
Step 3: Utility Handles Construction
Before and during ECM installation, the utility provides the agency with required documents concerning installation procedures such as a quality assurance plan, notification of work outside regular hours, planned utility outages, and ECM testing.
The agency is responsible for monitoring the utility’s progress during ECM installation to ensure that the work is proceeding as planned. This includes:
- Monitoring ECM installation activity
- Reviewing and verifying construction quality assurance plan logs
- Coordinating space access to prevent delays in installation
- Verifying proper ECM installation per task order requirements, design/installation plans, and approved submittals
- Working with the COR to generate punch lists as applicable.
A best practice is to hold regularly scheduled progress meetings with the utility and agency teams. The attendance of the utility’s site superintendent should be required so issues can be addressed.
Step 4: Agency Completes Post-Installation Inspections and Verifications
The agency (generally the COR) is responsible for post-installation inspections and verifications. This includes:
- Coordinating inspections of rebate-related ECMs with the utility
- Verifying completion of construction punch list items
- Verifying that any revised post-installation submittals are acceptable
- Coordinating agency staff operations and maintenance (O&M) and repair and replacement training with the utility
- Verifying resolution of any ECM performance deficiencies.
Reviewing Utility Deliverables
The agency is responsible for verifying receipt of and reviewing the following utility deliverables:
- Spare parts lists, spare parts provided
- Manufacturer warranties
- ECM training materials and proposed training schedule.
- Commissioning report
The purpose of commissioning is to verify that the ECMs have been installed properly, are functioning properly, and are providing the services (such as lighting levels and space temperatures) that are specified in the task order.
Most of the commissioning is done before acceptance, but other performance checks may be required by the utility after agency acceptance of ECM installation.
A commissioning report from the utility is required. Agency review of this report should verify:
- Utility compliance with the commissioning plan
- Commissioning results meet or exceed design intent and facility performance requirements
- Seasonal testing required at later date.
Utility Post-Installation Commissioning Report and Agency Review
Agency review of the commissioning report should verify that:
- The utility’s post-installation measurement and verification complies with the performance assurance plan
- Energy and O&M baseline data are consistent with agreed-upon baseline conditions
- Energy rates for the first year of performance period are as specified in the task order
- Installed ECMs have the potential to meet or exceed the guaranteed annual cost savings.
Government Witnessing of Commissioning and Measurement and Verification
The agency should witness ECM commissioning and measurement and verification tests to independently verify performance. The tests should focus on:
- Critical systems
- ECMs generating the most energy and cost savings
- Sampling proper installation of ECMs.
Step 5: Agency Inspects Installation and Construction and Accepts the Completed Project
The timeframe for review and project acceptance is based on the schedule of activities specified in the task order. The agency is obligated to perform its oversight and review in the timeframes described in the performance assurance plan. If agency tardiness delays project acceptance and on-schedule payments to the utility, the utility may incur significant additional costs for which the agency may be liable.
Utilities are generally highly motivated to resolve issues and achieve the agency’s acceptance, acknowledging that all requirements of the contract have been met so payments can begin.
One final walk-through should be conducted with the agency COR or other designated government representative. The ECMs should be fully operational, without performance problems, and all other required submittals should have been provided. The acceptance checklist is noted with dates for each item, signed off by the COR, and forwarded to the contracting officer.
Agency Acceptance Responsibilities
Before the agency may proceed to project acceptance, the agency COR needs to confirm that:
- ECM installation has been accomplished as required, including resolution of punch list items
- ECMs have the potential to generate the expected cost savings
- All required post-construction drawings and submittals have been received and revised as needed to meet contract requirements.
The agency contracting officer indicates agency acceptance of the installed project by written notice to the utility. This includes a signed copy of the completed acceptance checklist. The notice:
- Confirms that the project complies with all task order requirements
- Advises that the utility may submit the first invoice
- Begins the post-acceptance performance period.
The contracting officer may issue a conditional letter of acceptance if seasonal testing is required for ECMs as documented in commissioning or post-installation measurement and verification reports.
Acceptance of Individual Energy Conservation Measures (Partial Acceptance)
Individual ECMs completed early in the implementation period may be provisionally accepted before final acceptance of the completed project.
Most projects have ECMs that are installed, tested, and operational relatively early in the implementation and construction period. Sign-off by an agency COR does not constitute official agency acceptance of the ECM or the project. Rather, it acknowledges completion of the installation of that ECM and perhaps activates the warranty.
Early acceptance of individual ECMs, or "partial acceptance," is common in projects with one or two ECMs that have very long construction periods, other projects that have shorter construction periods, or projects with several sites involved. Agencies can reduce their interest cost by making payments based on savings from provisionally accepted ECMs before project acceptance.
Changes or modifications during construction are less common with UESC projects than with business-as-usual construction contracting but are sometimes needed. It is difficult to anticipate all requirements, and additional information may surface during installation.
As-built drawings (blueprints, utility lines) and submittals will reflect the project as approved and completed. As-built drawings and documentation are required by the contract and are needed to keep the facility's records of current facility conditions accurate. The agency should also record the UESC project's impacts in its organization’s real property database.
Variances between design and installation are found in most projects. Details of the variations between the task order and as-built conditions are customarily recorded in post-installation measurement and verification reports, which include energy impacts.
The contracting officer (not just the COR) must authorize any changes, and all changes should be reviewed and agreed upon in advance of the change. Contracts should be modified to reflect the changes. Generally, all parties prefer to handle changes in ways that do not require renegotiation of the firm-fixed price that cause a corresponding effect on and renegotiation of the project financing. It is important that the utility and agency come to agreement quickly so project acceptance and payments are not unduly delayed.
Step 6: Agency Reports Project Information and Prepares for Project Administration
FAR Part 41 requires agencies to send information to the U.S. General Services Administration (GSA) on use of Areawide Contracts (AWCs) and service agreements including the Authorization for Energy Management Services. Project information may be reported to send to email@example.com.
To help demonstrate the value and success of the UESC program, Agencies are requested to report project information to FEMP. Project information is confidential and used to measure the value and impact of UESCs on energy savings across the country. Information can be reported through eProject Builder, CTS, or directly to the FEMP utility team.
Ongoing Project Administration
Throughout the UESC project's performance period, there will inevitably be turnover in personnel and other changes that could challenge the agency's consistency in UESC administration. Preparation will help bridge the changes.
Ensure that all project documents are kept and maintained with the contract file so they will be available throughout the contract term, especially measurement and verification and commissioning data and reports, O&M manuals, and O&M training materials.
Follow the contract management plan, which ensures the continuity of contract administration as individuals come and go. Prepare the plan at task order award and modify it as necessary during construction and after project acceptance.
Phase 4 FEMP Assistance and Resources
During phase 5 of the UESC process, the utility delivers the savings and equipment performance, as contracted, and conducts measurement and verification and commissioning activities described in the performance assurance plan. See Phase 5: Post-Acceptance Performance.