Introduction To Performance Contracting

The Concept

Performance Contracting is a method of funding needed capital improvements from future savings that the improvements generate.  This method has been prevalent for over 20 years.  In August, 2000, Missouri passes legislation (No. 8.231), which modified procurement law to enable the Performance Contracting method in Missouri. 

A Performance Contract allows a Public Institution to partner with a qualified Energy Services Company (ESCO) such as Trane to perform design/build/support services and implement capital improvements that result in reduced utility, operational and maintenance costs.  The ESCO assists with financing the program over a period of 15 years and payments are made annually with the savings that are achieved.  The ESCO guarantees enough savings to cover the principal and interest payments by paying any savings shortfalls.  Any savings beyond the guarantee is the Public Entity's to keep.

Who is a Candidate?

Does your facility have more than 20,000 square feet of floor area?  Do you spend more than $20,000 per year on energy bills?  If so, a Performance Contract may work for you.  It is even more likely to be of benefit if you have...

• Aging buildings or equipment
• Recurring maintenance problems or high maintenance costs
• Comfort complaints
• Scarce budget resources
• No recent upgrades of your lighting or controls systems
• Too many demands on your maintenance staff 

Missouri Senate Bill No. 8.231 Basic Process

Stage 1: Development

Stage 2: Design Build Implementation Approach

Stage 3: Performance

For more information, please contact Chad Remboldt, Education Facilities Consultant