I 
108TH CONGRESS 
1ST SESSION H. R. 3339
To expand upon the Department of Defense Energy Efficiency Program 
required by section 317 of the National Defense Authorization Act of 
2002 by authorizing the Secretary of Defense to enter into energy savings 
performance contracts, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 17, 2003
Mr. WILSON of South Carolina (for himself, Mrs. TAUSCHER, Mr. TAYLOR of 
Mississippi, Mr. MCINTYRE, Mr. ISTOOK, Mr. MILLER of Florida, Mr. 
TIAHRT, and Ms. DEGETTE) introduced the following bill; which was re-
ferred to the Committee on Armed Services 
A BILL 
To expand upon the Department of Defense Energy Effi-
ciency Program required by section 317 of the National 
Defense Authorization Act of 2002 by authorizing the 
Secretary of Defense to enter into energy savings per-
formance contracts, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘National Defense En-
ergy Savings Act of 2003’’.
SEC. 2. ENERGY SAVINGS PERFORMANCE CONTRACTS. 
(a) CONTRACTS AUTHORIZED.—The Secretary of De-
fense may enter into an energy savings performance con-
tract under this section for the sole purpose of achieving 
energy savings and benefits ancillary to that purpose. The 
Secretary may incur obligations under the contract to fi-
nance energy conservation measures so long as guaranteed 
savings exceed the debt service requirements. 
(b) TERMS AND CONDITIONS.—
(1) CONTRACT PERIOD.—Notwithstanding any 
other provision of law, an energy savings perform-
ance contract may be for a period of up to 25 years 
beginning on the date on which the first payment is 
made by the Secretary pursuant to the contract. The 
contract need not include funding of cancellation 
charges (if any) before cancellation, if—
(A) the contract was awarded in a com-
petitive manner, using procedures and methods 
established under this section; 
(B) the Secretary determines that funds 
are available and adequate for payment of the 
costs of the contract for the first fiscal year; 
(C) the contract is governed by part 17.1 
of the Federal Acquisition Regulation; and 
(D) if the contract contains a clause set-
ting forth a cancellation ceiling in excess
$10,000,000, the Secretary provides notice to 
Congress of the proposed contract and the pro-
posed cancellation ceiling at least 30 days be-
fore the award of the contract. 
(2) COSTS AND SAVINGS.—An energy savings 
performance contract shall require the contractor to 
incur the costs of implementing energy savings 
measures, including at least the cost (if any) in-
curred in making energy audits, acquiring and in-
stalling equipment, and training personnel, in ex-
change for a share of any energy savings directly re-
sulting from implementation of such measures dur-
ing the term of the contract. 
(3) OTHER TERMS AND CONDITIONS.—An en-
ergy savings performance contract shall require an 
annual energy audit and specify the terms and con-
ditions of any Government payments and perform-
ance guarantees. Any such performance guarantee 
shall provide that either the Government or the con-
tractor is responsible for maintenance and repair 
services for any energy related equipment, including 
computer software systems. 
(c) LIMITATION
ON
ANNUAL
CONTRACT
PAY-
MENTS.—Aggregate annual payments by the Secretary to 
a contractor for energy, operations, and maintenance
under an energy savings performance contract may not 
exceed the amount that the Department of Defense would 
have paid for energy, operations, and maintenance in the 
absence of the contract (as estimated through the proce-
dures developed pursuant to this section) during term of 
the contract. The contract shall provide for a guarantee 
of savings to the Department, and shall establish payment 
schedules reflecting such guarantee, taking into account 
any capital costs under the contract. 
(d) RULEMAKING.—Not later than 90 days after the 
date of the enactment of this section, the Secretary, with 
the concurrence of the Federal Acquisition Regulatory 
Council, shall issue final rules to establish the procedures 
and methods for use by the Department of Defense to se-
lect, monitor, and terminate energy savings performance 
contracts in accordance with laws governing Federal pro-
curement that will achieve the intent of this section in a 
cost-effective manner. In developing such procedures and 
methods, the Secretary, with the concurrence of the Fed-
eral Acquisition Regulatory Council, shall determine which 
existing regulations are inconsistent with the intent of this 
section and shall formulate substitute regulations con-
sistent with laws governing Federal procurement.
(e) IMPLEMENTATION PROCEDURES
AND METH-
ODS.—The procedures and methods established by rule 
under subsection (d) shall—
(1) provide for the calculation of energy savings 
based on sound engineering and financial practices; 
(2) allow the Secretary to request statements of 
qualifications, which shall, at a minimum, include 
prior experience and capabilities of contractors to 
perform the proposed types of energy savings serv-
ices and financial and performance information, 
from firms engaged in providing energy savings serv-
ices; 
(3) allow the Secretary to presume that a con-
tractor meets the requirements of paragraph (2) if 
the contractor either—
(A) has carried out contracts with a value 
of at least $1,000,000,000 with the Federal 
Government over the previous 10 years; or 
(B) is listed by a Federal agency pursuant 
to section 801(b)(2) of the National Energy 
Policy Act (42 U.S.C. 8287(b)(2)); 
(4) allow the Secretary to, from the statements 
received, designate and prepare a list, with an up-
date at least annually, of those firms that are quali-
fied to provide energy savings services;
(5) allow the Secretary to select firms from 
such list to conduct discussions concerning a par-
ticular proposed energy savings project, including re-
questing a technical and price proposal from such 
selected firms for such project; 
(6) allow the Secretary to select from such 
firms the most qualified firm to provide energy sav-
ings services based on technical and price proposals 
and any other relevant information 
(7) allow the Secretary to permit receipt of un-
solicited proposals for energy savings performance 
contracting services from a firm that the Depart-
ment of Defense has determined is qualified to pro-
vide such services under the procedures established 
pursuant to subsection (d) and require facility man-
agers to place a notice in the Commerce Business 
Daily announcing they have received such a proposal 
and invite other similarly qualified firms to submit 
competing proposals; 
(8) allow the Secretary to enter into an energy 
savings performance contract with a firm qualified 
under paragraph (7), consistent with the procedures 
and methods established pursuant to subsection (d); 
and
(9) allow a firm not designated as qualified to 
provide energy savings services under paragraph (4) 
to request a review of such decision to be conducted 
in accordance with procedures, substantially equiva-
lent to procedures established under section 759(f) 
of title 40, United States Code, to be developed by 
the board of contract appeals of the General Services 
Administration. 
(f) TRANSITION RULE FOR ENERGY SAVINGS PER-
FORMANCE CONTRACTS UNDER NATIONAL ENERGY CON-
SERVATION POLICY ACT.—In the case of an energy sav-
ings performance contract entered into by the Secretary 
or the Secretary of Energy pursuant to the authority 
granted by section 801 of the National Energy Conserva-
tion Policy Act (42 U.S.C. 8287), the Secretary may 
maintain the contract under this section, making whatever 
contract modifications as the Secretary determines are 
necessary to conform to the provisions of this subsection. 
(g) PILOT PROGRAM FOR NONBUILDING APPLICA-
TIONS.—
(1) IN GENERAL.—The Secretary may carry out 
a pilot program to enter into up to 10 energy sav-
ings performance contracts for the purpose of 
achieving energy savings, secondary savings, and
benefits incidental to those purposes, in nonbuilding 
applications. 
(2) SELECTION.—The Secretary shall select the 
contract projects to demonstrate the applicability 
and benefits of energy savings performance con-
tracting to a range of non-building applications. 
(3) REPORT.—Not later than three years after 
the date of the enactment of this Act, the Secretary 
shall submit to Congress a report on the progress 
and results of the pilot program. The report shall in-
clude a description of projects undertaken; the en-
ergy and cost savings, secondary savings and other 
benefits that resulted from such projects; and rec-
ommendations on whether the pilot program should 
be extended, expanded, or authorized. 
(h) DEFINITIONS.—In this section: 
(1) ENERGY SAVINGS.—The term ‘‘energy sav-
ings’’ means a reduction in the cost of energy, from 
a base cost established through a methodology set 
forth in the energy savings performance contract, 
utilized in an existing federally owned building or 
buildings or other federally owned facilities as a re-
sult of—
(A) the lease or purchase of operating 
equipment, improvements, altered operation and
maintenance, increased capacity or payload, or 
technical services; or 
(B) the increased efficient use of existing 
energy sources by cogeneration or heat recov-
ery, excluding any cogeneration process for 
other than a federally owned building or build-
ings or other federally owned facilities. 
(2) ENERGY
SAVINGS
PERFORMANCE
CON-
TRACT.—The term ‘‘energy savings performance 
contract’’ means a contract that provides for the 
performance of services for the design, acquisition, 
installation, testing, operation, and, where appro-
priate, maintenance and repair of an identified en-
ergy conservation measure or series of measures at 
one or more locations. Such contracts—
(A) may provide for appropriate software 
licensing agreements; and 
(B) shall, with respect to an agency facility 
that is a public building, as defined in section 
13(l) of the Public Buildings Act of 1959 (40 
U.S.C. 612(l)), be in compliance with the pro-
spectus requirements and procedures of section 
7 of the Public Buildings Accountability Act of 
1959 (40 U.S.C. 606).
(3) NONBUILDING
APPLICATION.—The term 
‘‘nonbuilding application’’ means—
(A) any class of vehicles, devices, or equip-
ment that is transportable under its own power 
by land, sea, or air that consumes energy from 
any fuel source for the purpose of such trans-
portability, or to maintain a controlled environ-
ment within such vehicle, device, or equipment; 
or 
(B) any Federally owned equipment used 
to generate electricity or transport water. 
(4) SECONDARY
SAVINGS.—The term ‘‘sec-
ondary savings’’ means additional energy or cost 
savings that are a direct consequence of the energy 
savings that result from the energy efficiency im-
provements that were financed and implemented 
pursuant to the energy savings performance con-
tract. Such secondary savings may include energy 
and cost savings that result from a reduction in the 
need for fuel delivery and logistical support, per-
sonnel cost savings and environmental benefits. In 
the case of electric generation equipment, secondary 
savings may include the benefits of increased effi-
ciency in the production of electricity, including rev-
enue received by the Federal Government from the 
sale of electricity so produced. 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Defense.
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