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Cutting Costs and Modernizing Buildings through Performance-Based Contracting

Editor’s Note: On June 19th, the White House Council on Environmental Quality brought together leaders from government, private industry, non-profits, and academia at a White House event to highlight President Obama’s $2 billion commitment to improve the energy efficiency of Federal buildings through performance contracting.  Below, U.S. Department of Transportation Assistant Secretary Brodi Fontenot shares some of the innovative ways his agency is using performance-based contracting to conserve energy, cut waste, and save taxpayer dollars.

The U.S. Department of Transportation’s (DOT) operations encompass more than 10,000 buildings in all 50 states, from air traffic control centers and research facilities to our regional offices and headquarters. That kind of range complicates our efforts to green our internal operations and infrastructure, yet over the last two years, DOT has improved its sustainability performance across all seven measures of the OMB Sustainability and Energy Scorecard.

To achieve those results and continue to move forward on sustainability, we are trying to use every tool available.  One tool that has served us well is Performance-Based Contracts (PBCs). A PBC is a tool where a company makes improvements at little to no upfront capital cost and is paid through the savings from the project over many years. It is a win-win-win for government, industry, and the environment.

These contracts are an important vehicle for meeting our energy and water goals. PBCs are attractive because they are a low-cost tool with limited upfront capital investment that emphasizes performance. DOT has dedicated sources of funding for some building improvements, but PBCs present a vital tool to stretch the value of taxpayer dollars.

Building a 21st Century Electric Grid

As part of President Obama’s initiative to make America a magnet for jobs by building a 21st century infrastructure, today he signed a Presidential Memorandum that will speed the modernization of the nation’s electric grid. This will help make electricity more reliable, save consumers money on their energy bills, and support homegrown American clean energy jobs and industries by making renewable energy easier to access across the country.

Transmission projects often cover hundreds of miles and involve multiple federal, tribal, state and local jurisdictions with diverse interests and responsibilities. Collaborating early to minimize duplication and delays is vital to getting critical projects to construction to better serve American homes and businesses. Today’s Presidential Memorandum directs federal agencies to create an integrated pre-application process across the Federal government to help identify and address issues before the formal permit application process begins, and streamline the coordination of permitting processes across the federal, state, and tribal governments.