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Energy Efficiency, Design, Construction, LEED & Green Projects: The Stimulus Does It All


Energy Efficiency, Design, Construction, LEED & Green Projects: The Stimulus Does It All Tuesday, March 31, 2009 12:00 PM EDT You may listen to the audio over your ... – PowerPoint PPT presentation

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Title: Energy Efficiency, Design, Construction, LEED & Green Projects: The Stimulus Does It All

Energy Efficiency, Design, Construction, LEED
Green ProjectsThe Stimulus Does It All
  • Tuesday, March 31, 2009
  • 1200 PM EDT
  • You may listen to the audio over your computer
    speakers or
  • you may use your phone to dial into the following
  • 1-866-642-1665
  • Passcode 342441

  • Andrew Wheeler
  • Senior Vice President, BD Consulting
  • 202.312.7424
  • Energy Climate Change Consulting Group
  • Patrick Miller
  • Associate, Baker Daniels
  • 312.212.6514
  • Construction and Real Property Liability Group
    Energy, Environment and Climate Change Legal Group

How Will ARRA Work?
  • 787 billion, 250 programs and many different
    ways Washington and the states will spend the
  • Cabinet Agencies which we will cover today
    include the Departments of Energy, Agriculture,
    Defense, Interior, Labor, Housing Urban
    Development and the Environmental Protection
  • Non-cabinet-level Government Entities receiving
    funding include NASA, Small Business
    Administration and the National Science
  • The Recovery Package is now a public law. It
    moves into the complicated implementation phase.
  • Rulemaking process and RFP process
  • Getting the funding out in certain time frames
  • Oversight Accountability

Green Buildings In General
  • Utilization of best practices to
  • Maximize efficiency in design, construction,
    operation and maintenance
  • Minimize waste and cost
  • Capture free inputs from the natural
  • Third party verification of construction quality
    and asset value
  • Improved product
  • Energy and water savings
  • Indoor environmental quality

Green Certifications and Standards
  • For buildings
  • Governmental
  • LEED
  • Green Globes
  • For products
  • EnergyStar
  • Green Seal
  • Greenguard
  • GreenSpec

ARRA Green Building Projects
  • NIST
  • 360 million for maintenance and renovation of
    NIST facilities and laboratories using green
    technologies that maximize energy and water
    savings. 180 million is for the competitive
    construction grant program for research science
    buildings including FY2008 and FY2009
  • Bureau of Reclamation Modernizing Facilities
  • 1 billion for DOI is directed for water and
    related resources projects.
  • GSA Conversion to High Performance Green
  • 4.5 billion from the GSA's Federal Buildings
    Fund to convert GSA facilities to
    High-Performance Green Buildings
  • Bureau of Land Management Construction
  • 180 million including funding for energy
    efficient retrofits of existing facilities.
  • Fish and Wildlife Services Construction
  • 115 million including funding for energy
    efficient retrofits of existing facilities.
  • National Park Service Construction
  • 589 million including funding for energy
    efficient retrofits of existing facilities.
  • Forest Service Capital Construction and

ARRA Green Building Projects
  • DOD Military Construction
  • 4.24 billion for Facilities Sustainment,
    Restoration and Modernization for U.S. and U.S.
    territories' facilities. A portion of these funds
    shall be used to invest in energy efficiency
    projects and to repair and modernize DOD
    facilities, including Defense Health program.
  • DOD Military Construction
  • Navy Marine Corps 100 million for energy
    conservation and alternative energy projects.
  • DOD Energy Conservation and Investment
  • 120 million for the Energy Conservation and
    Investment Program.
  • DOD Military Family Housing Construction
  • Army 34.5 million for construction and
    improvements to family housing to provide jobs,
    increase quality of life and employ energy
    efficiency through advanced construction
  • Air Force 80.1 million
  • DOD Military Family Housing Operating Expenses
  • Army 3.9 million for necessary maintenance
    including energy savings upgrade
  • Air Force 16.4 million
  • VA Medical Facilities
  • Of the 1 billion appropriated, funds will be
    used for non-recurring maintenance and energy
    projects. The Senate report describes energy
    projects as follows wind turbine systems,
    rooftop photovoltaic systems, and water
    conservation measures.

ARRA Green Building Projects
  • HUD Public Housing Capital Fund
  • 4 billion (3 billion by formula, 1 billion by
    competition) for investments including leveraging
    private sector funding or financing for
    renovations and energy conservation retrofit
  • HUD HOME Investments Partnership Program
  • 2.25 billion of which up to 20 may be used for
    investments in energy efficiency and green
    building technology. Funds are available until
    Sept. 30, 2011.
  • HUD Native American Housing Block Grants
  • 510 million, of which 255 million is by
    formula. The amounts distributed by formula shall
    be used for construction, retrofits and
    rehabilitations including energy efficiency
  • HUD Assisted Housing
  • 250 million for energy retrofits and green
    investments to project owners of HUD Section 8
  • Army Corps of Engineers
  • 4.6 billion for construction, operation and
    maintenance for previously-authorized projects
    including 25 million for the Corps regulatory
  • Department of Education
  • Of the 53 billion, there are references to using
    recognized green buildings ratings systems.
  • USDA Assisted Housing Stability and Green
    Retrofit Investments

Green Projects Risk Categories
  • Scope of Work
  • Certification Expectations
  • Product Expectations
  • Performance Expectations
  • Cost Savings Expectations

Green Projects Risk Allocation Options
  • Silence
  • Advantages None
  • Disadvantages Countless
  • Teaming Waiver of Certification/Product/Performa
    nce/Cost Saving Guarantees
  • Advantage Protects design/construction team and
    supply chain
  • Disadvantage May reduce impact of innovation
    and technology
  • Stipulated Penalty Clauses
  • Advantage Allows front-end negotiation of the
  • Disadvantage May restrict ability to innovate
  • Incentives (e.g. shared cost savings)
  • Advantage Motivates team
  • Disadvantage May reduce quality of base scope

Green Design and Construction Contracts
  • There are many Green specification options, but
    no form general conditions
  • AIA 2007 B101 requires architect to consider
    environmentally responsible design alternatives
    and discuss them with the owner 2007 A201 does
    not address green certification or product risks
  • AIA B214 does not address consequences of failure
    to achieve LEED certification
  • AGC, ConsensusDOCS, EJCDC do not address Green
    issues or LEED Certification
  • DBIA Sustainable Project Goals Exhibit

ARRA Weatherization Assistance Program
  • 5 billion administered through DOEs Office of
    Energy Efficiency and Renwable Energy
  • Includes a provision that expands the eligibility
    of low-income households for weatherization
    assistance and increases the maximum funding
    assistance level per household.
  • Supports weatherization of homes, including
    adding more insulation, sealing leaks and
    modernizing heating and air conditioning
    equipment, which will pay for itself many times
  • Allows an average investment of up to 6,500 per
    home in energy efficiency upgrades and will be
    available for families making up to 200 of the
    federal poverty level or about 44,000 a year
    for a family of four.
  • March 12 Vice President Joe Biden and Energy
    Secretary Chu announced Indiana will
    receive131,847,383 for the Weatherization
    Assistance Program.

Current Federal Energy Efficiency Tax Credits
  • Business Deduction for Energy-Efficient
    Commercial Buildings
  • A tax deduction of up to 1.80 per square foot is
    available to owners or designers of new or
    existing commercial buildings that save at least
    50 of the heating and cooling energy.
  • Builder Tax Credit for Energy-Efficient Homes
  • Home builders are eligible for a 2,000 tax
    credit for a new energy efficient home that
    achieves 50 energy savings for heating and
    cooling. The credit equals 1,000 for realizing
    30 energy savings.
  • Homeowners Credit for Efficiency Improvements
  • Homeowners are eligible for a tax credit of up to
    500 for insulation, replacement windows, water
    heaters and heating and cooling equipment.
  • Homeowner Energy-Efficiency Tax Credit for
    Existing Homes
  • Increases the value of the energy efficient
    existing homes credit to 30 percent for 2009 and
    2010, modifies the standards for qualifying
    property, and sets the per-dwelling maximum for
    this period at 1500 per taxpayer

Department of Energy
  • Transportation Electrification
  • 400 million to states, local governments and
    metropolitan transportation authorities for
    qualified electric transportation projects that
    reduce emissions, including truck stop
    electrification, airport ground support equipment
    and cargo-handling equipment.
  • Alternative Fueled Vehicles Pilot Grant Program
  • 300 million in grants through the Clean Cities
    program to state and local governments,
    metropolitan transportation authorities and
    others for encouraging the use of plug-in
    electric-drive vehicles or other emerging
    electric vehicle technologies.
  • Advanced Batteries
  • 2 billion in grants for the manufacturing of
    advanced batteries and components, including
    advanced lithium-ion batteries, hybrid electrical
    systems, component manufacturers and software
  • Non-Defense Environmental Cleanup
  • 483 million to the Department of Energy, which
    can also be applied to brownfields cleanup.
  • Energy Efficiency and Renewable Energy Program
  • 2.5 billion for applied research, development,
    demonstration and deployment activities to
    include 800 million for projects related to
    biomass and 400 million for geothermal. The
    balance of the money is for solar, wind,
    hydrogen, water power, and energy efficiency
    demonstrations for industrial and commercial
  • Innovative Technology Loan Guarantee Program
  • 6 billion to pay for the costs of guarantees
    made under this section for renewable
    technologies and transmission technologies. This
    includes renewable energy systems such as
    incremental hydropower electric power
    transmission systems and leading-edge biofuels
    projects at the pilot or demonstration scale.
    This should support 60 billion of loans.

Department of Energy (continued)
  • Energy Efficiency and Conservation Block Grants
  • 3.2 billion of which 2.8 billion is to states
    through the existing formula in EISA Title V
    subtitle V. The remaining 400 million shall be
    rewarded on a competitive basis as determined by
    the Secretary. Types of projects include energy
    audits, implementing building codes, and
    government building on-site projects that
    generate electricity from renewable sources
  • Smart Grid
  • 4.5 billion to modernize the electric grid
    including demand-response equipment, security and
    reliability enhancements, energy storage
    research, development, demonstration and
    deployment, and to facilitate recovery from
    disruptions from the energy supply.
  • Clean Coal
  • 800 million in competitive grants for the Clean
    Coal Power Initiative Round 3.
  • Fossil Energy Research and Development
  • 1 billion for fossil energy, coal technologies,
    carbon capture, coal mining technologies, oil and
    gas, oil and gas reservoirs, complex weld
    technology testing, and methane hydrate RD
  • Advanced Research Projects Agency
  • 400 million to support high-risk, high-payoff
    research to accelerate the innovation cycle for
    both traditional and alternative energy sources
    and energy efficiency. This funding is for
    research and construction of laboratory

Department of Transportation
  • Competitive Grants for Transportation
  • 1.5 billion for competitive grants to projects
    across all surface transportation modes that will
    have a significant impact on the nation, a
    metropolitan area or a region. Awards will range
    from 20 to 300 million.
  • Grants-in-Aid for Airports
  • 1.1 billion to be used by the FAA to provide
    discretionary airport grants to repair and
    improve critical infrastructure at airports.
    These investments will serve to provide important
    safety and capacity benefits.
  • Highway Infrastructure Investment
  • 27.5 billion in funds distributed by formula.
    Set asides are also provided for
    environmentally-friendly transportation
  • Capital Assistance for High Speed Rail and
    Intercity Passenger Rail Service
  • 9.3 billion 1.3 billion to Amtrak and the
    remaining 8 billion is provided for the
    development of intercity and high speed passenger
    rail. The Secretary has flexibility in
    allocating resources between the programs to
    advance the goal of deploying intercity high
    speed rail systems in the US. Grants will be
    distributed under the Intercity Passenger Rail
    Grants to States and the High Speed Corridors
    grant program.
  • Transit Capital Assistance
  • 6.9 billion divided up into formula grants for
    urbanized areas, rural areas, and growing state
    and high-density areas. Within this funding, 100
    million is provided for discretionary grants to
    public transit agencies to reduce energy
    consumption or greenhouse gas emissions.
  • Fixed Guideway Infrastructure Investment
  • 750 million distributed through an existing
    authorized formula for capital projects to
    modernize or improve existing fixed guideway
    systems, including purchase and rehabilitation of
    rolling stock, track, equipment and facilities.
  • Capital Investment Grants (New Starts Program)

Environmental Protection Agency
  • Clean Water State Revolving Fund
  • 4 billion for Clean Water State Revolving Fund
    grants. Priority funds are designated for
    projects ready to proceed to construction within
    12 months of enactment. This is for nonpoint
    source, watershed protection or restoration,
    estuary projects and traditional municipal
    wastewater treatment programs.
  • Drinking Water State Revolving Fund
  • 2 billion for Drinking Water State Revolving
    Fund grants. Priority funds are designated for
    projects ready to proceed to construction within
    12 months of enactment. Eligible projects must
    facilitate compliance with national drinking
    water regulations or otherwise advance health
    protection objectives under the Safe Water
    Drinking Act. Projects to replace aging
    infrastructure are eligible if necessary to
    maintain compliance or advance the Acts public
    health goals.
  • Diesel Emissions Reduction
  • 300 million for diesel emission reductions
    grants to states.
  • Superfund
  • 600 million to the EPAs Hazardous Substance
    Superfund program to address uncontrolled
    releases from hazardous and toxic waste sites
    that threaten human health and the environment.
  • Brownfields Cleanup
  • 100 million to states and tribal authorities for
    remediation of brownfields sites. Four types of
    competitive grants are eligible brownfields
    assessment, cleanup, revolving loan fund, and
    environmental job training. The 20 cost-sharing
    requirement is waived.
  • Leaking Underground Storage Program
  • 200 million in grants for cleanup activities
    with no cost-sharing requirement.

ARRA Compliance General
  • Basic Strategy Oversight and Transparency
  • Basic Goals Accountability, Risk Mitigation,
    Minimize Fraud and Abuse
  • Specific Provisions Largely Undefined
  • Implementation
  • Federal Agency and Department Heads
  • OMB Memo M-09-10 (February 18, 2009)
  • Example DOE Inspector General Memo
  • State and Local Executive Offices
  • Section 1511 Certification
  • Question Does False Claims Act Liability

ARRA Compliance Specific Provisions
  • Buy America
  • Hire America
  • Davis Bacon Act Prevailing Construction Wage
  • Fixed Price Contracts
  • Competitive Contracting Procedures
  • State and Local Whistleblower Protection
  • Executive Agencies may not enter into Federal
    Contracts without complying with federal
    procurement laws and the Federal Acquisition

ARRA Compliance Hire America
  • Companies receiving TARP funds cannot hire
    foreign workers
  • Does not apply to overall ARRA projects

ARRA Compliance Buy America
  • Applies to All Iron, Steel and Manufactured
    Products used in ARRA public building and works
  • Terms appear to borrow from Buy American Act
    (1933 Federal Procurement) and Buy America
    Statute (1964 FTA Grants for State and Local
  • BUT Terms are not defined
  • Exemptions
  • If requirement is inconsistent with the public
  • If the products are not produced in sufficient
    and reasonably available quantities in U.S.
  • If use of U.S. products increases cost of overall
    project by 25
  • Penalties?
  • False Claims Act Liability
  • Contract and Legal Remedies Invalid Bid, Void
    Contract, Contract Termination, Fraud
  • Basic Recommendation
  • Broad Certifications and RFPs require compliance
    and trigger liability
  • Therefore Without express exemption for the
    project - - All building products should be
    American-made (entire supply chain)

ARRA Compliance Risk Allocation Strategies
  • Current Practice
  • Broad Certifications
  • Federal Agency and Department Heads
  • State and Local Executives
  • Indemnification
  • Agency passes risk to contractor
  • Contractor passes risk to subcontractor
  • Subcontractor passes risk to suppliers
  • Vague Penalties
  • E.g. Does the Buy American requirement subject
    state and local contractors who sign broad
    certifications to federal False Claims Act
  • Future Efforts
  • Inspectors General, States and Local Officials
    will develop compliance best practices and RFPs
    (i.e. contract provisions) with specific
  • Minimum Recommendations
  • Where Possible Clarify broad and vague
    certifications before issuing or responding to
  • Expressly incorporate ARRA funding and compliance
    elements into indemnification provisions in

Washington This Week
  • Energy Efficiency Markup
  • The full Senate Energy and Natural Resources
    Committee will mark up legislation updating
    appliance standards and industrial energy
  • Part of larger, comprehensive Energy reform
  • Energy efficiency is the low-hanging fruit
  • President Obama is making a significant push for
    energy efficiency
  • House Cap-and-Trade Legislation
  • Released this week, sponsored by Reps. Waxman
    (CA) and Markey (MA)
  • ARRA Oversight Hearing
  • The Senate Homeland Security and Governmental
    Affairs Committee is looking into how well ARRA
    funds are being spent

  • Andrew Wheeler
  • Senior Vice President, BD Consulting
  • 202.312.7424
  • Patrick Miller
  • Associate, Baker Daniels
  • 312.212.6514
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