ABM To Save Significant Energy Costs Of Federal Buildings
Zacks Investment Research | Jun 25, 2017 09:48PM ET
Leading provider of facility solutions, ABM Industries Incorporated (NYSE:ABM) recently got enlisted in the multi-million energy savings performance contract (ESPC) from the U.S. Department of Energy. This multi-award task order contract enables the company to compete for over $750 million of projects awarded each year to reduce energy costs of federal buildings.
The U.S. Department of Energy’s ESPC is reportedly the largest energy services company (ESCO) contract vehicle managed by the federal government and follows rigorous and strict selection criteria to shortlist firms for the process. The ESPC projects facilitates federal agencies to undertake energy savings initiatives without incurring up-front capital costs through qualified ESCOs that possess the requisite capabilities to implement the proposed changes.
The selection of ABM in the empanelled ESCO list validates its superior track record of helping federal agencies save huge costs through energy-saving solutions. Over the years, the company has offered extensive energy and facility improvements to various federal buildings throughout southern California. The energy performance contracting program of the company guarantees minimum savings of $48.4 million in energy and operating costs over the next 20 years, reducing energy consumption by more than 40%.
ABM has developed a platform to deliver an end-to-end service model to its clients by realigning its operational structure to an on-site, mobile and on-demand market-based structure. This realignment has improved its long-term growth prospects and provides higher margin opportunities by enabling it to better deliver end-to-end services to its clients across urban, suburban and rural areas. The company further expects to extend its global footprint and strengthen its position in existing markets through both inorganic and organic growth across the industry verticals.
The company has embarked on a Vision 2020 Plan that outlines its vision for the next five years and hinges on three primary phases. The first phase is aimed to increase the efficiency of the company through diligent execution of the operating plan and stringent cost-reduction activities. The second phase will focus on driving growth across the realigned verticals through effective realization of the cost savings from procurement, account management and other organizational changes. The final phase of the transformation will include accelerated growth impetus from the vertical alignment and account planning systems with a continuous focus on additional cost savings. ABM is currently focusing on the second phase of the plan and remains confident of achieving $40–$50 million in savings through operational efficiencies by the end of 2017.
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