Performance Based Contracting

Projects That Pay For Themselves


As an energy solutions partner, McKinstry excels at enabling each client to strengthen their bottom line in both new construction and facility improvement projects. We collaborate to leverage energy and operational savings that could completely fund proposed upgrades and retrofits.

McKinstry’s performance contracting empowers clients to leverage future energy cost and operating savings to pay for improvements in the comfort, safety, sustainability, and efficiency of their facilities. The financial and operational performance is guaranteed by the ESCO (Energy Service Company), eliminating risks typically associated with traditional “low-bid” approaches to construction projects. 

Our process includes comprehensive life-cycle performance and financial analyses to ensure the lowest costs over time. McKinstry’s vendor neutrality means we will not mandate a vendor, equipment, design, or fuel source, so that there are no pre-conceived biases for one solution over another.

McKinstry’s financial modeling services are a combination of industry-experienced consulting and technology. By estimating proposed design impacts on first costs, building operational budgets, long-term capital expenditure forecasts, and other human factors, McKinstry offers its clients and design partners an informed approach to cost assessment, design decisions, and financing strategies.

Decisions are made in an integrated design and delivery process with the design-build prime contractor, the integrated design team, and the owner examining and collaborating on the modeling analysis to determine the best “design-build” solution. 

Design-build is a method whereby a project’s design and construction are included within one contract and implemented by a single point of contact, whether architect, engineer, or contractor. This allows savings on a number of fronts, including lower administration costs, streamlined design process, improved communication, enhanced quality of work, and a compressed project schedule, allowing the project to move forward faster.

Performance contracting can be used to improve facilities and reduce their long-term energy use, thus increasing their energy cost savings.

To date, many higher educational institutions, municipalities (cities, counties, states, and federal agencies) and dozens of school districts have instituted energy performance contracts, saving millions of dollars in energy costs as well as first costs.

Energy Savings

On average, high-performance buildings save the following:

  • Energy savings: 20-35%
  • Greenhouse gas emissions: 40%
  • Water savings: 40%
  • Solid waste: 70%

Benefits

  • Provides an alternative to the traditional “low-bid” process by providing better designs, systems, equipment, and life-cycle performance
  • Emphasizes the lowest Total Cost of Ownership (TCO)
  • Provides a single point of accountability
  • Transfers the operational and financial risks from the owner to the prime contractor
  • Maintains open-book pricing for full disclosure and accounting transparency
  • Ensures that projects are properly commissioned for optimum performance
  • Guarantees energy, operations, and maintenance savings