Delivering More Construction for Less™

"High" Performance Contracting™ - Getting the Most from Your Energy Savings Performance Contract

Part 2: Managing Your Performance Contract

Performance Contracting can be a cost-effective and viable option IF you have the expertise on your side to understand it and manage it closely. In Part 1, we covered how to decide whether Performance Contracting is your best delivery option, and the importance of understanding the dynamics of the two-legged stool (no checks and balances between design and construction).

"High" Performance Contracting - Part 2: Customizing and Managing the Process

Once you've determined Performance Contracting is the best way to deliver your project, it's time to customize the process to maximize the value delivered. Your goal in customizing is to help you get the maximum scope of work at the highest quality, and at a competitive price.

Here are some tips to maximize the value you receive:

Make the selection process competitive - both in terms of qualifications and price.
Make sure you have apples-to-apples proposals.
Negotiate a contract that is fair to both parties, and requires open book compensation to allow review of fees, allowances, contingencies, etc.
Match the Energy Services Company's (ESCO) fees and contingencies to the risk taken on by the ESCO. Areas of risk may include: financing, guaranteed payback from energy savings, guaranteed maximum price, and typical construction risk.
Make sure the bidding of the construction work is competitive and open. Have the ESCO prequalify bidders as necessary.
Have the expertise in place to oversee and review energy savings calculations, design, bidding and construction (remember, you are 100% of the checks and balances).

Summary: Performance Contracting can be a viable and cost-effective delivery option IF you have the expertise in place to understand and manage it.

Still Have Questions?

For assistance in managing a performance contract or other planning, design or construction project, visit our booth at one of this spring's school conferences.

Or contact Doug Sitton, President of Sitton Construction Group at: dsitton@sittoncg.com, 314.412.5677 or 618.406.0993. Sitton Construction Group (www.ConstructionSavings.com) is a professional construction management firm, led by Doug Sitton, a 30-year veteran of the design and construction industry. Mr. Sitton is available to answer individual questions or speak to groups about improving the facility planning, design and construction process.

Sitton Construction Group

Missouri: (314) 412-5677
Illinois: (618) 406-0993
Email: info@sittoncg.com

Additional Sitton Info:

Providing Construction Management & Energy Consulting in St. Louis, MO, the St. Louis Metro East and throughout Missouri & Illinois.

Click here to download our company brochure.

Click here to download our construction management flyer.