According to FEMP, the benefits of performance contracting for the federal government generally include (1) reducing energy costs, (2) improving energy efficiency and helping agencies meet their energy savings requirements, (3) eliminating the costs of maintaining and repairing aging or obsolete energy-consuming equipment, (4) making contractors rather than the government responsible for operating and maintaining energy-saving equipment, and (5) creating an incentive for contractors to develop highly efficient improvements by linking their compensation to the savings achieved through their work. This contract, for about $2.3 million in energy conservation measures at the Statue of Liberty National Monument and Ellis Island, was awarded on July 25, 1995. The contractor is to reduce energy consumption at both Ellis and Liberty islands by installing energy-efficient interior and exterior lighting, highly efficient motors for the air handling and pumping systems, and an energy management control system. The Federal Bureau of Prisons’ Contract

On February 13, 1996, the Bureau awarded a 20-year performance contract for about $700,000 for a solar hot water system at a federal prison in Phoenix, Arizona. Consequently, the Park Service’s evaluation board, after reviewing each of three offerors’ proposals, selected the firm whose technical proposal represented the best value to the government. Costs of the Park Service’s Contract

The Park Service was unable to provide exact data on the administrative costs associated with its performance contract. As agreed with congressional staff, we provided information on the number of performance contracts awarded by civilian agencies, from April 10, 1995, to April 10, 1996, under DOE’s final performance contracting procurement regulations; the characteristics of the firms on DOE’s list of the firms qualified for performance contracting; the firms that submitted project proposals but were not awarded contracts and the reasons why; and the responsibilities of the federal civilian agencies involved in performance contracting activities and the administrative costs they incurred through their involvement.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the implementation of energy savings performance contracting by two federal civilian agencies, focusing on the: (1) characteristics of the firms that the Department of Energy (DOE) deemed qualified for performance contracts; (2) firms that submitted project proposals but were not awarded contracts; and (3) civilian agencies' responsibilities and administrative costs.

What GAO Found

GAO found that: (1) the National Park Service and the Federal Bureau of Prisons (BOP) awarded energy savings performance contracts in 1995 and 1996; (2) the Park Service awarded a contract for about $2.3 million to a firm whose technical expertise and contracting experience was determined to be the best value; (3) energy savings improvements at the Park Service's Ellis Island and Statue of Liberty included new lighting, more efficient motors for air handling and pumping systems, and an energy management control system; (4) BOP awarded a contract for about $700,000 for a solar hot water system to the only firm qualified by DOE to provide such a service; (5) the benefits of performance contracting included reducing energy costs, helping agencies meet their energy savings requirements, and creating an incentive for contractors by linking their compensation to the savings achieved through their work; and (6) the Park Service spent about $246,000 and BOP spent about $70,500 in administrative costs associated with the performance contracts.