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GSD > State Architect's Office / Office of Procurement Services > Office of Energy Services
PERFORMANCE
CONTRACT OVERVIEW
In
general terms, any contract which links compensation to actual results
is a performance-based contract. Examples of performance-based contracts
include legal cases taken on contingency and sales on commission
only.
As
it applies to energy efficiency, projects can be paid for out of
actual energy savings under a performance contract. Such projects
usually include the installation of energy conservation measures
(ECM's) in buildings by professional contractors. Equipment is installed
at no initial cost to the building owner, in return for part of
the energy savings.
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Boiler Room |
Steam Controls
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Under
House Bill 7, enacted in 1994, state government agencies and universities
may enter into performance contracts for energy projects. For state
agencies, authority to enter into performance contracts is vested
in the Department of Administrative Services; for universities the
authority is given to its Board of Trustees. Under the guidelines
now codified in Ohio Revised Code Section 156:
- All
contracts must be competitively solicited;
- Energy
savings must exceed installation cost over a ten-year period;
- For
projects involving cogeneration the maximum term is five years;
- Prevailing
wage provisions apply;
- Such
projects must pay for themselves out of operating funds and cannot
require the use of capital budget funds;
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Performance contracts for state agencies require the approval
of the State Controlling Board
See completed performance projects
below:
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