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42 U.S. Code § 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 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 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 et seq.).