Breaking New Ground—Stories from Defence Construction Breaking_new_ground | Page 103

Contractors work to replace the cedar
siding on Permanent Married Quarters
(PMQs).
Financing energy saving measures
DCC started contracting and managing energy
performance contracts (EPCs) in the mid 1990s using
the Federal Building Initiative sponsored by Natural
The fee-for-service approach that was put into place
Resources Canada. The concept is that an energy
in 1997 changed the world for DCC. From DND’s
savings contractor carries out energy efficiency upgrades
perspective, I think that it changed DCC to become very
to a facility and is paid for its work from some of the
client-oriented, very service-oriented, very responsive to
energy savings over the life of the contract. The risk of
DND’s wants and needs. You went from a DCC that was
achieving the savings rests with the contractor. The
appropriated—they were given so many million dollars
advantage to DND is that energy costs are reduced,
a year to take care of all the projects, and those projects
yet there is no capital investment needed at the outset
were achieved according to their needs and their
to finance the savings measures. After initial successes
requirements—to, under fee-for-service, a DCC that was
at CFB Halifax and CFB Valcartier, most large DND
marching in time with DND every step of the way.
facilities have now undertaken an EPC and some have
initiated a second phase of EPC to more fully take
DCC’s fee-for-service approach today offers a business
advantage of the mechanism to make long term
model unlike any other in government, an example of
reductions to operations and maintenance costs.
entrepreneurial thinking within a government setting. In
this way, fee-for-service has grown out of DCC’s corporate
PMQs—another new frontier
culture, driven by its unique employees. A strong
In 1994, DND owned approximately 22,000 buildings
connection to the practicalities and realities of the
construction industry means that employees have the
and had bulk leases on another 2,000 for CF personnel
experience to understand the need to offer clients both
and their dependents at 36 bases, wings and stations
value and performance and the expertise to deliver it.
across the country. Replacement value for the
Permanent Married Quarters (PMQs) was estimated
at some $2 billion. The problem was that DND had
been incurring operating losses on the PMQs since 1978,
losing about $30 million a year by 1995.
Steve Irwin saw this change—and its effects—firsthand,
from DND’s perspective:
BREAKING NEW GROUND
DEFENCE CONSTRUCTION CANADA
93