FAR 23.2—Subpart 23.2

Scope.

FAR 23.200 is the scope statement for the energy savings performance contract (ESPC) subpart. It explains that the subpart sets out the policies and procedures for using an ESPC to acquire energy-efficient technologies for Government facilities without requiring upfront Government capital expense. It also defines where the subpart applies geographically: it applies to acquisitions in the United States and its outlying areas, and agencies making acquisitions outside those areas are expected to use their best efforts to comply. In practice, this section tells contracting personnel when the ESPC rules are available, what kind of acquisition they are meant to support, and how far the requirements extend beyond domestic and outlying-area procurements. Its significance is that it frames ESPCs as a financing and acquisition tool for energy improvements, while also signaling that overseas use is not prohibited but is subject to a best-efforts standard rather than full mandatory application.

Authorities.

FAR 23.201 is a short authority statement that tells readers where the rules in this subpart come from and why they exist. It says the subpart implements the National Energy Conservation Policy Act, specifically 42 U.S.C. 8287, which is the statutory basis for federal energy conservation contracting. In practical terms, this means the requirements in the surrounding subpart are not optional policy preferences; they are grounded in law and are intended to support energy efficiency and conservation in federal procurement. The section itself does not impose operational steps, but it establishes the legal foundation for the acquisition methods, contract structures, and agency actions that follow in the rest of the subpart. For contracting officers and contractors, this matters because it signals that energy conservation requirements must be read and applied in light of the statute, not as isolated administrative guidance.

Policy.

FAR 23.202 explains the federal policy for using energy savings performance contracts (ESPCs) to reduce energy use and operating costs in agency facilities and operations. It covers the government’s preference for using ESPCs when they are life-cycle cost-effective, the basic structure of an ESPC, the 25-year contract limit, and the fact that the energy service company finances the upfront capital costs and is repaid from a share of the resulting savings. The section also addresses the relationship between ESPCs and FAR subpart 17.1, the required solicitation and award procedures under 10 CFR part 436, subpart B, the optional use of DOE’s Qualified List of energy service companies, and the special rules for unsolicited proposals under FAR 15.603(e). In practice, this section tells agencies and contracting officers how to lawfully structure and compete ESPCs, and it signals to contractors that these projects are long-term, savings-based arrangements with specific regulatory procedures rather than ordinary construction or service contracts.