42 U.S.C. § 8287 — Authority to enter into contracts

**(a) In general** (1) The head of a Federal agency may enter into contracts under this subchapter solely for the purpose of achieving energy savings and benefits ancillary to that purpose. Each such contract may, notwithstanding any other provision of law, be for a period not to exceed 25 years. Such contract shall provide that the contractor shall incur costs of implementing energy savings measures, including at least the costs (if any) incurred in making energy audits, acquiring and installing equipment, and training personnel, in exchange for a share of any energy savings directly resulting from implementation of such measures during the term of the contract. (2) (A) Contracts under this subchapter shall be energy savings performance contracts and shall require an annual energy audit and specify the terms and conditions of any Government payments and performance guarantees. Any such performance guarantee shall provide that the contractor is responsible for maintenance and repair services for any energy related equipment, including computer software systems. (B) Aggregate annual payments by an agency to both utilities and energy savings performance contractors, under an energy savings performance contract, may not exceed the amount that the agency would have paid for utilities without an energy savings performance contract (as estimated through the procedures developed pursuant to this section) during contract years. The contract shall provide for a guarantee of savings to the agency, and shall establish payment schedules reflecting such guarantee, taking into account any capital costs under the contract. (C) Federal agencies may incur obligations pursuant to such contracts to finance energy conservation measures provided guaranteed savings exceed the debt service requirements. (D) A Federal agency may enter into a multiyear contract under this subchapter for a period not to exceed 25 years beginning on the date of the delivery order, without funding of cancellation charges before cancellation, if— (i) such contract was awarded in a competitive manner pursuant to subsection (b)(2), using procedures and methods established under this subchapter; (ii) funds are available and adequate for payment of the costs of such contract for the first fiscal year; and (iii) such contract is governed by part 17.1 of the Federal Acquisition Regulation promulgated under [section 1303 of title 41](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section1303&num=0&edition=prelim) or the applicable rules promulgated under this subchapter. (E) *Funding options.—* — In carrying out a contract under this subchapter, a Federal agency may use any combination of— (i) appropriated funds; and (ii) private financing under an energy savings performance contract. (F) *Promotion of contracts.—* — In carrying out this section, a Federal agency shall not— (i) establish a Federal agency policy that limits the maximum contract term under subparagraph (D) to a period shorter than 25 years; (ii) limit the total amount of obligations under energy savings performance contracts or other private financing of energy savings measures; or (iii) limit the recognition of operation and maintenance savings associated with systems modernized or replaced with the implementation of energy conservation measures, water conservation measures, or any combination of energy conservation measures and water conservation measures. (G) *Measurement and verification requirements for private financing.—* (i) *In general.—* — In the case of energy savings performance contracts, the evaluations and savings measurement and verification required under paragraphs (2) and (4) of [section 8253(f) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section8253/f&num=0&edition=prelim) shall be used by a Federal agency to meet the requirements for the need for energy audits, calculation of energy savings, and any other evaluation of costs and savings needed to implement the guarantee of savings under this section. (ii) *Modification of existing contracts.—* — Not later than 18 months after December 19, 2007, each Federal agency shall, to the maximum extent practicable, modify any indefinite delivery and indefinite quantity energy savings performance contracts, and other indefinite delivery and indefinite quantity contracts using private financing, to conform to the amendments made by subtitle B of title V of the Energy Independence and Security Act of 2007. (H) *Miscellaneous authority.—* — Notwithstanding subtitle I of title 40, a Federal agency may accept, retain, sell, or transfer, and apply the proceeds of the sale or transfer of, any energy and water incentive, rebate, grid services revenue, or credit (including a renewable energy certificate) to fund a contract under this subchapter. (I) *Excluded contracts.—* — A contract entered into under this subchapter may not be for work performed— (i) at a Federal hydroelectric facility that provides power marketed by a Power Marketing Administration; or (ii) at a hydroelectric facility owned and operated by the Tennessee Valley Authority established under the Tennessee Valley Authority Act of 1933 ([16 U.S.C. 831](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title16-section831&num=0&edition=prelim) et seq.). **(b) Implementation** (1) (A) The Secretary, with the concurrence of the Federal Acquisition Regulatory Council established under [section 1302(a) of title 41](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section1302/a&num=0&edition=prelim), not later than 180 days after October 24, 1992, shall, by rule, establish appropriate procedures and methods for use by Federal agencies to select, monitor, and terminate contracts with energy service contractors in accordance with laws governing Federal procurement that will achieve the intent of this section in a cost-effective manner. In developing such procedures and methods, the Secretary, with the concurrence of the Federal Acquisition Regulatory Council, shall determine which existing regulations are inconsistent with the intent of this section and shall formulate substitute regulations consistent with laws governing Federal procurement. (B) The procedures and methods established pursuant to subparagraph (A) shall be the procedures and contracting methods for selection, by an agency, of a contractor to provide energy savings performance services. Such procedures and methods shall provide for the calculation of energy savings based on sound engineering and financial practices. (2) The procedures and methods established pursuant to paragraph (1)(A) shall— (A) allow the Secretary to— (i) request statements of qualifications, which shall, at a minimum, include prior experience and capabilities of contractors to perform the proposed types of energy savings services and financial and performance information, from firms engaged in providing energy savings services; and (ii) from the statements received, designate and prepare a list, with an update at least annually, of those firms that are qualified to provide energy savings services; (B) require each agency to use the list prepared by the Secretary pursuant to subparagraph (A)(ii) unless the agency elects to develop an agency list of firms qualified to provide energy savings performance services using the same selection procedures and methods as are required of the Secretary in preparing such lists; and (C) allow the head of each agency to— (i) select firms from the list prepared pursuant to subparagraph (A)(ii) or the list prepared by the agency pursuant to subparagraph (B) to conduct discussions concerning a particular proposed energy savings project, including requesting a technical and price proposal from such selected firms for such project; (ii) select from such firms the most qualified firm to provide energy savings services based on technical and price proposals and any other relevant information; (iii) permit receipt of unsolicited proposals for energy savings performance contracting services from a firm that such agency has determined is qualified to provide such services under the procedures established pursuant to paragraph (1)(A), and require agency facility managers to place a notice in the Commerce Business Daily announcing they have received such a proposal and invite other similarly qualified firms to submit competing proposals; and (iv) enter into an energy savings performance contract with a firm qualified under clause (iii), consistent with the procedures and methods established pursuant to paragraph (1)(A). (3) A firm not designated as qualified to provide energy savings services under paragraph (2)(A)(i) or paragraph (2)(B) may request a review of such decision to be conducted in accordance with procedures to be developed by the board of contract appeals of the General Services Administration. **(c) Task or delivery orders** (1) The head of a Federal agency may issue a task or delivery order under an energy savings performance contract by— (A) notifying all contractors that have received an award under such contract that the agency proposes to discuss energy savings performance services for some or all of its facilities and, following a reasonable period of time to provide a proposal in response to the notice, soliciting from such contractors the submission of expressions of interest in, and contractor qualifications for, performing site surveys or investigations and feasibility designs and studies, and including in the notice summary information concerning energy use for any facilities that the agency has specific interest in including in such task or delivery order; (B) reviewing all expressions of interest and qualifications submitted pursuant to the notice under subparagraph (A); (C) selecting two or more contractors (from among those reviewed under subparagraph (B)) to conduct discussions concerning the contractors’ respective qualifications to implement potential energy conservation measures, including— (i) requesting references and specific detailed examples with respect to similar efforts and the resulting energy savings of such similar efforts; and (ii) requesting an explanation of how such similar efforts relate to the scope and content of the task or delivery order concerned; (D) selecting and authorizing— (i) more than one contractor (from among those selected under subparagraph (C)) to conduct site surveys, investigations, feasibility designs and studies, or similar assessments for the energy savings performance contract services (or for discrete portions of such services), for the purpose of allowing each such contractor to submit a firm, fixed-price proposal to implement specific energy conservation measures; or (ii) one contractor (from among those selected under subparagraph (C)) to conduct a site survey, investigation, feasibility design and study, or similar assessment for the purpose of allowing the contractor to submit a firm, fixed-price proposal to implement specific energy conservation measures; (E) providing a debriefing to any contractor not selected under subparagraph (D); (F) negotiating a task or delivery order for energy savings performance contracting services with the contractor or contractors selected under subparagraph (D) based on the energy conservation measures identified; and (G) issuing a task or delivery order for energy savings performance contracting services to such contractor or contractors. (2) The issuance of a task or delivery order for energy savings performance contracting services pursuant to paragraph (1) is deemed to satisfy the task and delivery order competition requirements in [section 3406(d) of title 10](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3406/d&num=0&edition=prelim) and [section 4106(d) of title 41](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section4106/d&num=0&edition=prelim). (3) The Secretary may issue guidance as necessary to agencies issuing task or delivery orders pursuant to paragraph (1).