FAR 23.200—Scope.
Plain-English Summary
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.
Key Rules
ESPC policy framework
This subpart provides the policies and procedures for using an energy savings performance contract. It is the governing framework for agencies that want to obtain energy-efficient technologies through performance-based energy savings arrangements.
No upfront capital expense
The purpose of the ESPC approach is to obtain energy-efficient technologies at Government facilities without Government capital expense. In practical terms, the contractor finances the improvements and is repaid through the contract structure, rather than the agency paying the full cost up front.
Applies in U.S. and outlying areas
The subpart applies to acquisitions in the United States and its outlying areas. For those acquisitions, the ESPC policies and procedures are fully applicable.
Best efforts outside covered areas
For acquisitions outside the United States and its outlying areas, agencies must use their best efforts to comply with the subpart. This creates a strong expectation of adherence, but recognizes that overseas conditions may make full compliance difficult or impractical.
Responsibilities
Agencies
Use the ESPC policies and procedures when acquiring energy-efficient technologies for Government facilities in the United States and its outlying areas. For acquisitions outside those areas, make best efforts to follow the subpart.
Contracting Officers
Apply the ESPC framework when the acquisition falls within the subpart’s scope, and determine whether the procurement is in the United States, an outlying area, or outside those areas so the correct level of compliance is used.
Program/Facility Officials
Identify energy-efficiency needs at Government facilities and work with acquisition personnel to structure requirements so they can be met through an ESPC where appropriate.
Contractors
Understand that ESPCs are used to deliver energy-efficient technologies under a contract structure intended to avoid upfront Government capital expense, and be prepared to perform under the specific ESPC terms and procedures used by the agency.
Practical Implications
This section is mainly a gateway provision: it tells you when to look to the ESPC rules, but it does not itself describe the full contracting process or contract clauses.
A common pitfall is assuming ESPC rules apply everywhere automatically; the geographic limitation matters, and overseas acquisitions require a best-efforts analysis rather than simple direct application.
Contracting teams should confirm whether the facility and acquisition are in the United States, an outlying area, or outside those areas before selecting the acquisition strategy.
Because the goal is to avoid Government capital expense, agencies should think early about financing structure, savings measurement, and whether the project truly fits an ESPC model.
For overseas work, agencies should document how they are using best efforts to comply, especially if local conditions prevent full adherence to the domestic ESPC framework.
Official Regulatory Text
(a) This subpart prescribes policies and procedures for using an energy savings performance contract to obtain energy-efficient technologies at Government facilities without Government capital expense. (b) This subpart applies to acquisitions in the United States and its outlying areas. Agencies conducting acquisitions outside of these areas must use their best efforts to comply with this subpart.