text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``National Defense Energy Savings Act 
  of 2003''.
  
  SEC. 2. ENERGY SAVINGS PERFORMANCE CONTRACTS.
  
      (a) Contracts Authorized.--The Secretary of Defense may enter into 
  an energy savings performance contract under this section for the sole 
  purpose of achieving energy savings and benefits ancillary to that 
  purpose. The Secretary may incur obligations under the contract to 
  finance energy conservation measures so long as guaranteed savings 
  exceed the debt service requirements.
      (b) Terms and Conditions.--
              (1) Contract period.--Notwithstanding any other provision 
          of law, an energy savings performance contract may be for a 
          period of up to 25 years beginning on the date on which the 
          first payment is made by the Secretary pursuant to the 
          contract. The contract need not include funding of cancellation 
          charges (if any) before cancellation, if--
                      (A) the contract was awarded in a competitive 
                  manner, using procedures and methods established under 
                  this section;
                      (B) the Secretary determines that funds are 
                  available and adequate for payment of the costs of the 
                  contract for the first fiscal year;
                      (C) the contract is governed by part 17.1 of the 
                  Federal Acquisition Regulation; and
                      (D) if the contract contains a clause setting forth 
                  a cancellation ceiling in excess $10,000,000, the 
                  Secretary provides notice to Congress of the proposed 
                  contract and the proposed cancellation ceiling at least 
                  30 days before the award of the contract.
              (2) Costs and savings.--An energy savings performance 
          contract shall require the contractor to incur the costs of 
          implementing energy savings measures, including at least the 
          cost (if any) incurred in making energy audits, acquiring and 
          installing equipment, and training personnel, in exchange for a 
          share of any energy savings directly resulting from 
          implementation of such measures during the term of the 
          contract.
              (3) Other terms and conditions.--An energy savings 
          performance contract shall require an annual energy audit and 
          specify the terms and conditions of any Government payments and 
          performance guarantees. Any such performance guarantee shall 
          provide that either the Government or the contractor is 
          responsible for maintenance and repair services for any energy 
          related equipment, including computer software systems.
      (c) Limitation on Annual Contract Payments.--Aggregate annual 
  payments by the Secretary to a contractor for energy, operations, and 
  maintenance under an energy savings performance contract may not exceed 
  the amount that the Department of Defense would have paid for energy, 
  operations, and maintenance in the absence of the contract (as 
  estimated through the procedures developed pursuant to this section) 
  during term of the contract. The contract shall provide for a guarantee 
  of savings to the Department, and shall establish payment schedules 
  reflecting such guarantee, taking into account any capital costs under 
  the contract.
      (d) Rulemaking.--Not later than 90 days after the date of the 
  enactment of this section, the Secretary, with the concurrence of the 
  Federal Acquisition Regulatory Council, shall issue final rules to 
  establish the procedures and methods for use by the Department of 
  Defense to select, monitor, and terminate energy savings performance 
  contracts in accordance with laws governing Federal procurement that 
  will achieve the intent of this section in a cost-effective manner. In 
  developing such procedures and methods, the Secretary, with the 
  concurrence of the Federal Acquisition Regulatory Council, shall 
  determine which existing regulations are inconsistent with the intent 
  of this section and shall formulate substitute regulations consistent 
  with laws governing Federal procurement.
      (e) Implementation Procedures and Methods.--The procedures and 
  methods established by rule under subsection (d) shall--
              (1) provide for the calculation of energy savings based on 
          sound engineering and financial practices;
              (2) allow the Secretary to request statements of 
          qualifications, which shall, at a minimum, include prior 
          experience and capabilities of contractors to perform the 
          proposed types of energy savings services and financial and 
          performance information, from firms engaged in providing energy 
          savings services;
              (3) allow the Secretary to presume that a contractor meets 
          the requirements of paragraph (2) if the contractor either--
                      (A) has carried out contracts with a value of at 
                  least $1,000,000,000 with the Federal Government over 
                  the previous 10 years; or
                      (B) is listed by a Federal agency pursuant to 
                  section 801(b)(2) of the National Energy Policy Act (42 
                  U.S.C. 8287(b)(2));
              (4) allow the Secretary to, from the statements received, 
          designate and prepare a list, with an update at least annually, 
          of those firms that are qualified to provide energy savings 
          services;
              (5) allow the Secretary to select firms from such list to 
          conduct discussions concerning a particular proposed energy 
          savings project, including requesting a technical and price 
          proposal from such selected firms for such project;
              (6) allow the Secretary to select from such firms the most 
          qualified firm to provide energy savings services based on 
          technical and price proposals and any other relevant 
          information
              (7) allow the Secretary to permit receipt of unsolicited 
          proposals for energy savings performance contracting services 
          from a firm that the Department of Defense has determined is 
          qualified to provide such services under the procedures 
          established pursuant to subsection (d) and require facility 
          managers to place a notice in the Commerce Business Daily 
          announcing they have received such a proposal and invite other 
          similarly qualified firms to submit competing proposals;
              (8) allow the Secretary to enter into an energy savings 
          performance contract with a firm qualified under paragraph (7), 
          consistent with the procedures and methods established pursuant 
          to subsection (d); and
              (9) allow a firm not designated as qualified to provide 
          energy savings services under paragraph (4) to request a review 
          of such decision to be conducted in accordance with procedures, 
          substantially equivalent to procedures established under 
          section 759(f) of title 40, United States Code, to be developed 
          by the board of contract appeals of the General Services 
          Administration.
      (f) Transition Rule for Energy Savings Performance Contracts Under 
  National Energy Conservation Policy Act.--In the case of an energy 
  savings performance contract entered into by the Secretary or the 
  Secretary of Energy pursuant to the authority granted by section 801 of 
  the National Energy Conservation Policy Act (42 U.S.C. 8287), the 
  Secretary may maintain the contract under this section, making whatever 
  contract modifications as the Secretary determines are necessary to 
  conform to the provisions of this subsection.
      (g) Pilot Program for Nonbuilding Applications.--
              (1) In general.--The Secretary may carry out a pilot 
          program to enter into up to 10 energy savings performance 
          contracts for the purpose of achieving energy savings, 
          secondary savings, and benefits incidental to those purposes, 
          in nonbuilding applications.
              (2) Selection.--The Secretary shall select the contract 
          projects to demonstrate the applicability and benefits of 
          energy savings performance contracting to a range of non-
          building applications.
              (3) Report.--Not later than three years after the date of 
          the enactment of this Act, the Secretary shall submit to 
          Congress a report on the progress and results of the pilot 
          program. The report shall include a description of projects 
          undertaken; the energy and cost savings, secondary savings and 
          other benefits that resulted from such projects; and 
          recommendations on whether the pilot program should be 
          extended, expanded, or authorized.
      (h) Definitions.--In this section:
              (1) Energy savings.--The term ``energy savings'' means a 
          reduction in the cost of energy, from a base cost established 
          through a methodology set forth in the energy savings 
          performance contract, utilized in an existing federally owned 
          building or buildings or other federally owned facilities as a 
          result of--
                      (A) the lease or purchase of operating equipment, 
                  improvements, altered operation and maintenance, 
                  increased capacity or payload, or technical services; 
                  or
                      (B) the increased efficient use of existing energy 
                  sources by cogeneration or heat recovery, excluding any 
                  cogeneration process for other than a federally owned 
                  building or buildings or other federally owned 
                  facilities.
              (2) Energy savings performance contract.--The term ``energy 
          savings performance contract'' means a contract that provides 
          for the performance of services for the design, acquisition, 
          installation, testing, operation, and, where appropriate, 
          maintenance and repair of an identified energy conservation 
          measure or series of measures at one or more locations. Such 
          contracts--
                      (A) may provide for appropriate software licensing 
                  agreements; and
                      (B) shall, with respect to an agency facility that 
                  is a public building, as defined in section 13(l) of 
                  the Public Buildings Act of 1959 (40 U.S.C. 612(l)), be 
                  in compliance with the prospectus requirements and 
                  procedures of section 7 of the Public Buildings 
                  Accountability Act of 1959 (40 U.S.C. 606).
              (3) Nonbuilding application.--The term ``nonbuilding 
          application'' means--
                      (A) any class of vehicles, devices, or equipment 
                  that is transportable under its own power by land, sea, 
                  or air that consumes energy from any fuel source for 
                  the purpose of such transportability, or to maintain a 
                  controlled environment within such vehicle, device, or 
                  equipment; or
                      (B) any Federally owned equipment used to generate 
                  electricity or transport water.
              (4) Secondary savings.--The term ``secondary savings'' 
          means additional energy or cost savings that are a direct 
          consequence of the energy savings that result from the energy 
          efficiency improvements that were financed and implemented 
          pursuant to the energy savings performance contract. Such 
          secondary savings may include energy and cost savings that 
          result from a reduction in the need for fuel delivery and 
          logistical support, personnel cost savings and environmental 
          benefits. In the case of electric generation equipment, 
          secondary savings may include the benefits of increased 
          efficiency in the production of electricity, including revenue 
          received by the Federal Government from the sale of electricity 
          so produced.
              (5) Secretary.--The term ``Secretary'' means the Secretary 
          of Defense.
target: National Defense Energy Savings Act of 2003 - Authorizes the Secretary of Defense to: (1) enter into an energy savings performance contract (for a period of up to 25 years) for the sole purpose of achieving ancillary energy savings and benefits; and (2) incur obligations under the contract to finance energy conservation measures so long as guaranteed savings exceed the debt service requirements.
  
  Directs the Secretary to issue final rules establishing implementation procedures and methods that meet specified requirements.
  
  Authorizes the Secretary to implement a pilot program to enter into up to ten energy savings performance contracts in nonbuilding applications.
feat_title: To expand upon the Department of Defense Energy Efficiency Program required by section 317 of the National Defense Authorization Act of 2002 by authorizing the Secretary of Defense to enter into energy savings performance contracts, and for other purposes.