DATE: February 27, 2024

SUBJECT: Guidance for Use of Energy Savings Performance Contracts

TO: HCAs/Procurement Directors/Contracting Officers
FROM: Director, Contract and Financial Assistance Policy Division, Office of Policy, Office of Acquisition Management

SUMMARY: To support Federal Agency energy and sustainability goals, Congress passed the Energy Act of 2020 and the President signed Executive Order 14057: Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability. One effective contract method to help meet Department of Energy (DOE) targets is the use of Energy Savings Performance Contracts (ESPCs).

The purpose of this guidance is to provide information to assist the acquisition workforce when engaging in an ESPC. DOE has already entered into 28 ESPCs, however some acquisition elements and program offices may be unfamiliar with this form of contracting. Appropriate training on ESPCs is a vital ingredient to ensuring a successful endeavor for both the Department and the contractor. The training contained in this guidance is highly recommended for any member of the acquisition workforce that will be engaging in ESPCs. The training will serve to provide a solid foundation of ESPCs – where the authority comes from and how to enter into an ESPC in accordance with Federal Acquisition Regulations.

The purpose of an ESPC is to achieve energy savings, where the annual cost savings must equal or exceed payments. This allows for less upfront capital cost to DOE by recouping and paying the contractor based on savings derived from the energy efficiencies gained in the performance of the contract.

There are existing pathways to streamline bringing on an Energy Services Company (ESCO) through an ESPC. DOE’s Federal Energy Management Program (FEMP) has a competitively awarded Indefinite Delivery/Indefinite Quantity (IDIQ) contract available to access ESCOs through the issuance of task orders. The Golden Field Office manages this contract for FEMP and Eric Brandenburg can provide additional information.
Another pathway is the ESPC ENABLE program managed by FEMP which is designed to permit a standardized and streamlined procurement process suitable for small federal projects (although there are no size restrictions) to install energy conservation measures in six to twelve months. ESPC ENABLE uses a set of pre-established procurement and technical tools to administer projects through the General Services Administration Supply
Schedule Special Item Number 334512. Ira Birnbaum is the ENABLE program manager and can provide additional information.

It is highly suggested that members of the acquisition workforce supporting ESPC efforts take the following courses, managed by FEMP:

Course NameLength (hrs)Delivery
ESPC Five Phases to Success! 3.5Virtual/On Demand
ESPC Comprehensive Training: Phases 1 and 23Virtual/On Demand
ESPC Comprehensive Training: Phase 33Virtual/On Demand
ESPC Comprehensive Training: Phases 4 and 53Virtual/On Demand

These 4 course offerings will provide a solid introductory foundation to using ESPCs for the acquisition workforce. If you’re interested in continuing beyond the foundational courses, there are additional course offerings and reference material available here.

Questions concerning this policy flash should be directed to the Contract and Financial Assistance Policy Division at DOE_oapmpolicy@hq.doe.gov.