PERFORMANCE CONTRACTING-TIPS To GET WHAT You NEED, AND AVOID WHAT You DONT

摘要

Performance contracting promises great things with little apparent risk to a host facility. Typically, there is no upfront expense involved to the facility, and payments usually start only when the project is complete and energy savings should already be accruing. However, despite the typically intense attorney reviews and resulting reams of contractual legalese, there are significant risks inherent in this form of procurement. And the risks are on both sides of the table - both performance contractor and facility face hazards. While most of these risks could be mitigated through proper negotiation and preparation, most are not because they are not considered sufficiently early in the process, if at all. For instance, what is the risk of spending too much, and of receiving too little, both in goods and savings, for your facility? How can you compare vastly different proposals from vendors of wildly different capabilities? What is the risk to your facility if a project significantly under performs? Measurement and verification procedures are by necessity fuzzy and ill defined and yet part of the price premium you are paying is for M&V and the contractor's underwriting of this risk. If you are sure the savings are there, why pay for that underwriting?