Subpart 23.2
Energy Savings Performance Contracts
FAR Subpart 23.2 empowers agencies to use Energy Savings Performance Contracts to achieve energy efficiency goals without upfront costs, making compliance with federal sustainability mandates more attainable.
Overview
FAR Subpart 23.2 establishes the regulatory framework for Energy Savings Performance Contracts (ESPCs) within federal procurement. ESPCs are specialized contracts that allow federal agencies to implement energy-saving projects without upfront capital costs, paying contractors from the resulting energy cost savings. This subpart outlines the scope, legal authorities, and policy requirements for using ESPCs, emphasizing the government's commitment to energy efficiency and sustainability in its operations. The subpart references statutory authorities and sets forth the policy that agencies should use ESPCs as a tool to meet energy reduction goals and comply with federal mandates.
Key Rules
- Scope (23.200)
- Defines the applicability of ESPCs to federal agencies seeking to improve energy efficiency through third-party financing.
- Authorities (23.201)
- Cites the statutory and regulatory authorities that empower agencies to enter into ESPCs, such as the National Energy Conservation Policy Act.
- Policy (23.202)
- Establishes that agencies are encouraged and, in some cases, required to use ESPCs to achieve energy savings and meet sustainability goals.
Responsibilities
- Contracting Officers: Must ensure ESPCs are used appropriately, in accordance with statutory authorities and agency policy, and that contracts comply with all applicable requirements.
- Contractors: Must deliver guaranteed energy savings and comply with performance measurement and verification requirements.
- Agencies: Must oversee ESPC implementation, monitor performance, and report on energy savings achieved.
Practical Implications
- This subpart exists to facilitate energy efficiency in federal facilities through innovative contracting mechanisms.
- It impacts daily contracting by providing a pathway for agencies to fund energy improvements without upfront appropriations.
- Common pitfalls include misunderstanding the unique financing and performance requirements of ESPCs, or failing to properly measure and verify savings.