Minutes of the Regular Meeting, September 9 ... - Digital Collections

September 9-10, 2008 31367PERFORMANCE CONTRACTING SERVICES – NCAt its January 2007 meeting, the Board of Regents authorized Universityadministration to engage the services of Johnson Controls, Inc. of Lenexa, Kansas (JohnsonControls) – the highest ranked respondent of the related request for qualifications – to conductcertain preliminary studies of the University’s buildings and related systems, with the objectiveof later entering into a performance contract should the University conclude that it is in its bestinterest to do so. To date, Johnson Controls has completed the following steps toward such acontract:1. Established a baseline level of selected buildings’ current energy usage;2. Performed a detailed audit of the buildings’ supply systems (HVAC, steam,chilled water, etc.) and physical characteristics (insulation, windows, etc.);3. Developed recommendations for improvements and replacements to achieve themost likely and economical maximization of the buildings’ efficient use ofenergy;4. Estimated the financial savings that can be achieved after the improvements andreplacements are executed;Under the action requested herein, presuming a successful negotiation, JohnsonControls will complete the performance contracting engagement by:1. Assuming the design and delivery (i.e., general contracting) tasks and risksassociated with each identified renovation / upgrade / replacement project.2. Guaranteeing the overall savings projected.3. Assisting in savings measurement (as against the baseline) in accordance withgenerally accepted and agreed-upon measurement standards and techniques; and4. Accepting compensation only on the savings actually achieved and converselycompensating the University for savings not achieved.This methodology enables the University to proceed expeditiously and economicallywith these projects avoiding discrete consulting and contracting engagements. It also is a wellestablished and generally accepted means of prolonging a building’s useful life while optimizingits physical operational characteristics.The improvements – primarily targeting the HVAC and building automation systemsin the classroom buildings on the South Oval – are cost-estimated at $21 million. Each majorelement of work will be subject to prior approval by the Board, including the approval to securerelated financing. Repayment will be accomplished using the energy and operational savingsproduced by the upgrades (presently estimated at $30.8 million over 20 years). The financialaspects of the negotiation will focus on the savings guarantee by Johnson Controls, on theirproposed compensation share, and on measurement processes and standards.President Boren recommended the Board of Regents authorize the President or hisdesignee to negotiate and award a contract to Johnson Controls, Inc. of Lenexa, Kansas, thehighest ranked consultant, for physical facilities performance contracting services.Regent Dunning moved approval of the recommendation. The following voted yeson the motion: Regents Wade, Bell, Rainbolt-Forbes, Dunning and Clark. The Chair declaredthe motion unanimously approved.