During phase 5 of the Utility Energy Service Contract (UESC) process, the utility delivers the savings and equipment performance, as contracted, and conducts commissioning activities described in the performance assurance plan. The agency administers the UESC, ensures that ECM performance expectations are met, and performs the services specified in the contract.
Agency responsibilities for the UESC are most important during the performance period. Finishing construction and paying the invoices are not enough in federal UESCs. The agency is responsible for the government’s compliance with its contractual instruments and ensuring that ECM performance is achieved and sustained throughout the life of the contract. Agencies can expect to be held accountable for these responsibilities.
Step 1: Utility Submits Invoices and Agency Makes Payments
Written notification from the agency to the utility confirming that the installation complies with the terms of the contract and has been accepted marks the point where the utility may submit invoices to the agency.
Invoicing and payments can be done monthly, annually, or at other negotiated intervals. However, they are usually done annually, at the beginning of the contract year, to reduce interest costs. The agency is responsible for verifying that invoices contain any required documentation of services before paying.
Step 2: Utility and Agency Implement the Performance Assurance Plan as Assigned in the Task Order
Per 42 U.S.C. § 8253(f)(10), post-installation services may be implemented by the utility, agency, or a third-party contractor. Ensure roles and responsibilities are assigned and performed according to the performance assurance plan included in the task order.
For each ECM, the task order should specify:
- Who will carry out operations and maintenance (O&M) and repair and replacement (R&R) tasks
- How performance will be verified
- What to do if tasks are not performed.
When Government is Responsible for Operations and Maintenance and Repair and Replacement Tasks
When the government agrees to perform O&M and R&R of installed equipment, the tasks and records to be maintained by the agency will be specified in the task order:
- Performance requirements (what and when)
- Requirements for agency recordkeeping
- Provisions for utility to monitor and document agency performance.
The utility is responsible for:
- Providing manuals defining O&M procedures
- Providing training to agency about O&M
- Notifying site of deficiencies in O&M and R&R.
Remedies for Inadequate Performance of Operations and Maintenance and Repair and Replacement
The risk of inadequate utility performance of O&M and R&R is mitigated by the utility’s motivation to fulfill the performance requirements and by the clear responsibilities spelled out in the task order. Government witnessing of utility commissioning activities can assure the agency that the utility is performing the required O&M and R&R tasks. Moreover, competent review of commissioning reports should reveal any lapses in O&M and R&R, which should be addressed immediately.
Best Practices for Agency Performance of Operations and Maintenance and Repair and Replacement
Agencies should be aware of their responsibilities listed in the task order for the performance period. This means ensuring that the performance assurance plan defines the general O&M and R&R approach, that procedures for the agency have been identified in the task order and training or equipment manuals, and that the agency has received the necessary training on all installed equipment.
Although the utility is responsible for providing manuals and training, the frequency and format of training are negotiable. Agencies should actively participate to ensure that operations, preventive maintenance, and R&R are performed according to the contract terms. Records should also be maintained to document performance.
Utility Verifies ECM Performance, Facilitated by the Agency
When the utility is assigned commissioning and measurement and verification activities specified in the performance assurance plan, the agency:
- Provides to utility, as needed:
- Access, data, escort
- Records, such as utility bills, maintenance, and occupancy
- Coordinates meeting to plan utility site visit
- Schedules inspections and data collection during actual operating conditions.
Agency Witnesses Commissioning Activities
Government witnessing is the agency's observation and understanding of commissioning procedures, tests, and calculations.
The intent of government witnessing is to facilitate active observation of utility commissioning activities by designated agency personnel to expedite the process of utility conduct and agency review of the resulting reports and to prevent disputes about performance.
Benefits of the agency witnessing activities are:
- Gaining independent confirmation of ECM performance (and savings)
- Being prepared for future audits
- Fulfilling UESC administration responsibility
- Promoting mutual understanding and ownership in agency-utility partnership.
Responsibilities of Agency Contracting Officer Technical Representative/Designated Witness
Agency responsibilities for witnessing and reviewing commissioning and measurement and verification reports include:
- Communicating with utility about needs
- Coordinating a meeting between the utility and the agency witness or contracting officer technical reviewer (COR) to plan a utility site visit
- Scheduling inspections and data collection
- Reviewing pertinent records
- Providing escort besides witness or COR, if necessary.
A Graded Approach to Government Witnessing
For many agencies, resources for government witnessing may be limited. In this case, a graded approach may be considered. The Federal Energy Management Program (FEMP) recommends prioritizing the ECMs that account for the greatest share of the savings.
Recommended steps for facilitating and witnessing commissioning activities:
- Conduct a meeting with agency COR or witness and utility personnel to review the schedule, access requirements, tests, and monitoring that the utility intends to perform. This will ensure the inspection goes smoothly and that both parties understand how the performance of ECMs is to be tested and what constitutes performance that meets the terms of the contract. Any participation by agency personnel to facilitate tests and monitoring either during or after the visit should be agreed upon.
- Provide any utility, occupancy, or O&M data or records needed by the utility that could not be provided in advance.
- Escort utility personnel, observe tests or observations performed, record test or measurement equipment used, record results if available on site, and obtain any needed clarification of how tests are being performed. Ensure that all needed access is provided and that all agreed-upon tests are performed, and record any anomalies that affect measurement. Record any observed malfunctions of ECMs or monitoring equipment. Sign the data collection forms that record these observations.
- Ensure that facility operating staff inform the utility of any problems they experienced with ECM performance.
For inspections of initial post-installation measurement and verification or commissioning, agency witnessing should include critical ECMs confirmation that the equipment installed was specified and that it was properly installed and operating in accordance with applicable performance assurance plans.
Agency Reviews Commissioning Reports
Agencies should complete timely reviews of commissioning reports. Ideally, a review of the report verifies that:
- Each ECM is being operated according to its design operational strategy, resolve operational issues, and document modifications to the operational strategy
- Each ECM is maintained according to the maintenance plan, all maintenance issues are resolved, and all repairs and modifications to the maintenance plan are documented
- The performance of each ECM was measured and verified according to the recommissioning protocol and issues were identified, documented, and resolved
- The actual performance, energy savings, and associated cost savings were demonstrated and documented.
Commissioning report checklists:
- Ensure the report is comprehensive and all information is provided
- Ensure the report format meets the requirements established in the task order
- Ensure actual field-measured values are document in the report
- Ensure calculations are demonstrated, accurate, and constants are defined according to the task order
- Utility rates and escalation rates used to calculate cost savings are consistent with the contract
- O&M and R&R services are implemented as described in the performance assurance plan
- Ensure appropriately detailed feedback on the performance of each measure is included.
When applicable, the report should explain the differences between estimated and reported performance data and contain information about the corrective actions that will or should be taken and by whom. Any required action should be taken on the key issues identified in the report or agency review.
After agency technical review of the report, review results should be provided to the agency contracting officer. Once the report is finalized and accepted by the agency, a copy should be added to the contract file. Some agencies document report acceptance through a contract modification.
ECM Performance Shortfalls
Assignment of ECM performance responsibilities should be clearly documented in the task order. Any dispute between the agency and utility must be resolved in a manner consistent with the contract, and the process for resolving disputes should be specified in the performance assurance plan.
Step 3: Agency Maintains Contract Administration and Contract Modifications
The most common challenge during the post-acceptance performance period is personnel turnover, which leads to breaks in effective administration of the contract. Consistency in contract administration is required to keep the contract current. A contract management plan is essential for maintaining continuity of UESC administration.
Modifications after acceptance are often required for administrative purposes, such as to obligate the first year's funding and set up the payment stream to the utility, change the contracting officer or COR, or to document changed conditions.
Contract modifications will be necessary in case of changed conditions, such as equipment removal, replacements, and demolitions. Any changes to contractual performance or savings parameters should be incorporated into the task order.
Task Order Buydown or Buyout
Agencies may buydown or buyout a task order for any reason, including without limitation, for convenience, prior to acceptance. If termination occurs for the convenience of the government, the amount payable shall be deemed as an allowable cost under the Federal Acquisition Regulations. (See Part 17 and Part 52, Subpart 52.249-2.)
Step 4: Agency Completes Task Order Closeout at End of Contract Term
At the end of the contract term, agencies are instructed to use the Contractor Performance Assessment Reporting System to create and measure the quality and timely reporting of performance information.
Title to the energy conservation measures may be held by the agency or the utility during the contract term, depending on the most economically advantageous option. Tax incentives, agency policies regarding real property, or other factors may influence this decision. At acceptance of the installation or at the end of the contract term, title for all installed equipment will be transferred to the agency in accordance with Office of Management and Budget Memo M-12-21.
If the transfer occurs at the end of the contract term, it becomes part of the closeout process. Most agencies transfer title at acceptance of the installation and post-installation measurement and verification report. At the end of the contract term the agency also submits the final past performance evaluation to the Past Performance Information Retrieval System, the mandatory performance reporting system for all federal agencies.