Performance contractors (PC) often use stipulations for part or all of their measurement & verification (M&V)
efforts. The value of stipulations are low cost and easy implementation (good). Disadvantages include uncertain
savings estimates (bad) and potential for disputes and lawsuits (ugly). PCs and customers sometimes misuse or
abuse stipulations either by stipulating the savings directly or stipulating parameters based on limited or unreliable
information. The purpose of M&V is to provide assurance that project savings exist. Improper and excessive
reliance on stipulations may effectively nullify savings guarantees and also miss opportunities to assure measure
performance by using verification data for feedback. A review of PCs in the federal sector shows significant reliance
on stipulations; private-sector PCs are presumed similar. Recognized M&V guidelines such as ASHRAE 14-P,
IPMVP, and FEMP discuss the use of stipulations. Recent changes to the IPMVP and FEMP guidelines resulted in
diverging attitudes towards stipulations with the IPMVP now requiring some measurements. In response, FEMP is
developing guidelines for using stipulations in federal-sector performance contracts that can be applied to privatesector
PCs as well. Proper use of stipulations requires balancing costs with savings uncertainty
