Energy Conservation:

Federal Shared Energy Savings Contracting

RCED-89-99: Published: Apr 17, 1989. Publicly Released: May 17, 1989.

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Pursuant to a congressional request, GAO reviewed federal agencies' use of shared energy savings contracts.

GAO found that: (1) as of November 30, 1988, only the U.S. Postal Service and the Army had awarded shared energy savings contracts; and (2) the Postal Service will achieve about $593,000 in cost savings over the life of its 7-year contract, and the Army will achieve about $3.5 million in savings over the life of its 25-year contract. GAO also found that: (1) impediments to agencies' use of shared savings contracts included uncertainties about the applicability of Office of Management and Budget Circular A-76 to shared savings contracts, lack of management incentives, and difficulty in measuring energy and cost savings due to the lack of energy-use baseline data for facilities; and (2) to address the impediments, the Department of Energy (DOE) developed a manual on shared savings contracting, Congress authorized incentives for federal agencies, and DOE developed a methodology for calculating energy consumption and cost savings. In addition, GAO found that some state governments and private firms were using shared savings contracts.

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