The National Deep Energy Retrofit Program Puts a Spotlight on Government Contractors Tracking their Greenhouse Gas Emissions

June 27, 2023

At a glance

  • Main takeaway: The GSA submitted a historic opportunity for Energy Savings Performance Contracts for federal buildings under its National Deep Energy Retrofit program with projects totaling an estimated $300 million.
  • Impact on your business: For government contractors to bid on these lucrative sustainability-related contracts, they must be a qualified DOE Energy Service Company.
  • Next steps: Aprio’s ESG Advisory services team can guide you through the ESCO application process, perform a carbon footprint assessment and calculate your company’s greenhouse gas emissions.
Let Aprio get you started on your ESG journey? Contact our team for a complimentary consultation.

The full story:

The U.S. General Services Administration (GSA) issued the largest opportunity to date for Energy Savings Performance Contracts (ESPC) under its National Deep Energy Retrofit program. The GSA’s program is part of the White House’s Climate Smart Buildings Initiative and will leverage funding from the Inflation Reduction Act (IRA) to modernize and achieve net-zero emissions in federal buildings by 2045.

The National Deep Energy Retrofit program aims to increase energy-related cost-savings by reducing greenhouse gas emissions (Scope 1, Scope 2 and Scope 3) in federal buildings by at least 40%. Additionally, one of the most important benefits of this program will be the generation of good-paying jobs in an effort to rebuild the economy. Some of the ways these contracts will meet the requirements include installing high-efficiency HVAC systems, on-site renewable energy generation, advanced building controls and automation, and water conservation methods. To start, the GSA will use ESPC contracts to focus on 41 facilities that span the DC area, Illinois, Indiana, Minnesota and Wisconsin totaling an estimated $300 million.

But wait, to submit an ESPC bid, government contractors must be certified as an Energy Service Company (ESCO) company.

Why? Because ESPCs, established by the U.S. Department of Energy (DOE), are derived from a partnership between a federal agency and an ESCO-certified company to reduce energy-related operating costs through sustainability improvements. ESCO companies must be able to demonstrate their technical ability to:

  • Perform a comprehensive energy audit of the entire federal facility,
  • Outline were cost-saving energy improvements can be made,
  • Develop engineering designs and specifications,
  • Provide project management from design to implementation,
  • Secure the necessary financing to complete the project,
  • Train staff to provide ongoing maintenance and
  • Guarantee the savings achieved from these improvements will cover the complete cost of the project.

Interested in becoming a qualified ESCO? Here’s what you need to do!

The DOE has compiled a list of ESCO companies that meet their qualifications to bid on ESPC contracts with federal agencies, such as the National Deep Energy Retrofit program. To be certified as an ESCO company, you must complete the application process. The good news is, you don’t have to wait because the DOE accepts ESCO applications throughout the year.

To be considered for the DOE’s qualified ESCO list, you must:

  1. Complete the statement of qualifications on Standard Form 129 and the Supplemental Questionnaire.
  2. Provide two client project questionnaires and submit with the client signatures.
  3. Label any confidential data you do not wish to disclose to the public.
  4. Submit resumes of firm personnel.
  5. Upload all ESCO application documents to the eProject Binder System.

Once you have submitted your application, it goes to the DOE qualification review board, which can take up to three months to process. However, once you are approved, you must recertify on an annual basis.

Results are rolling in from GSA

As a first step to move towards a more sustainable and greenhouse gas emissions-free future, the GSA as already seen success stories between 2013 and 2022 from the National Deep Energy Retrofit program, including:

  • The New Carrollton Federal Building saw a reduction of energy by 60%, water by 56% and greenhouse gas emissions by 20,000 metric tons.
  • The Almeric L. Christian Federal Building saw a savings of more than $500,000 per year.
  • The King and Brickell Federal Building saw savings in energy by 43% and savings in water by 40% through a 15-year ESPC.

The bottom line

Navigating the environmental, social and governance (ESG) requirements within the federal and government landscape continues to be a hefty lift for government contractors hoping to secure contracts in this sector. However, the National Deep Energy Retrofit program is a unique opportunity for government contractors, specifically for those who are certified as an ESCO companies.

Aprio’s ESG Advisory services team can perform Greenhouse Gas calculations, reductions and sustainability assessments for your company. To learn more, contact our team for a complimentary consultation.

Related Resources/Assets/ articles/pages

Section 48C: An Opportunity to Fund Advanced Energy Projects Through Tax Credits

ESG Offers New Opportunities for Government Contractors to Work with the DOD

The SEC and EU Release New ESG Regulations: How Will Government Contractors be Impacted?

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About the Author

Gabriela Brown

ESG Practice Leader Gabriela Brown is passionate about educating clients on the essential and valuable role ESG principles play in building sustainable business strategies. From design to implementation, she develops thoughtfully tailored ESG solutions for companies of all sizes operating in a variety of industries, including government contracting. As a champion of Aprio’s ESG Advisory Services team, Gabriela is dedicated to helping clients succeed every stage of their sustainability journey.