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