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FCW : July 15, 2013
Energy savings performance contracts (ESPCs) have been used across the government to improve energy ef - ciency at major facilities, but a rst- of-its-kind partnership between the Energy Department and Lockheed Martin aims to bring those same ben- e ts to data centers. Here s how it could work: An energy service company (ESCO) would iden- tify energy consumption metrics for an agency and create a tailored energy savings project. Those savings would cover the cost of the project, making capital and other upfront investments unnecessary. The agency could then use that method to optimize its data centers under the auspices of the Fed- eral Data Center Consolidation Initia- tive (FDCCI) and President Barack Obama s memo promoting energy savings projects. There s just one problem with this first ESPC: DOE officials say that as they prepared to issue a $70 mil- lion task order to Lockheed Martin in March --- after more than a year s worth of work that included complet- ing the necessary approval processes --- of cials at the Of ce of Management and Budget put the project on hold. OMB did not con rm or deny the hold to FCW. But its reasons are not known, and it is unclear whether OMB has the authority to put another agen- cy s contract on hold. The optimization of two DOE data centers was projected to achieve a 70 percent reduction in energy consump- tion and generate another $6 million in annual life cycle cost savings. The savings would have paid for the con- tract in six years, and as the ESCO, Energy-saving data center contract languishes under OMB hold of VA claims pending for at least two years have been cleared since April 97% Trending Lockheed Martin s revenues would have come directly from those savings. Instead, the hold puts the company, which invested millions of dollars at its own risk, in the unenviable position of waiting for answers. "ESPCs address the challenges of data center consolidation most often cited by federal CIOs: lack of funds and uncertainty about the return on invest- ment," said Roger Flanagan, director of energy solutions at Lockheed Martin. "By competitively selecting a partner at the outset of project development, agencies can draw on industry exper- tise to signi cantly reduce large energy consumption and costs associated with IT operations." The hold has also had a chilling effect on other data center ESPC efforts, said Jennifer Schafer, executive director of the Federal Performance Contracting Coalition, an industry group that represents ESCOs. The General Services Administration, NASA and the U.S. Navy have select- ed ESCOs for their data center opti- mization efforts, and others, including the Transportation Department, have released notices of opportunity. All are now watching what happens with the DOE/Lockheed Martin deal. If it falls apart, Schafer said, the whole movement probably will, too. "It would be incredibly awful for them to have a bad decision on this rst one," she said. "The rest will die." Paul Hamilton, vice president of government affairs at Schneider Elec- tric, said his company s recent efforts in data center optimization will be for naught if OMB s hold continues FCW CALENDAR Cyber intelligence Government and industry leaders, including former Director of National Intelligence Dennis Blair, will lead this Global Intelligence Forum on the role of intelligence in the cyber domain. Washington, D.C. http://is.gd/oqutec Cybersecurity This FCW Executive Brie ng features the National Cybersecurity Center of Excellence's Donna Dodson and the Center for Strategic and International Studies' James Lewis, among others. Washington, D.C. http://is.gd/fcw_cyber 7/30-31 7/18 4 July 15, 2013 FCW.COM Continued on Page 7 ESPCs are a good deal for government. --- SEN. RON WYDEN (D-ORE.)
June 30, 2013
July 30, 2013