New North Carolina Law to Accelerate Local Capital Projects

North Carolina's updated Guaranteed Energy Savings Performance Contracting (GESPC) legislation delivers a faster, more flexible path to fund and deliver public infrastructure improvements

As of August 11, 2026, North Carolina Senate Bill 445 (S445) updates the state's performance contracting legislation, giving public sector organizations a faster, more flexible way to fund and deliver infrastructure improvements. For school districts, municipalities, state agencies and higher education institutions, the changes create new opportunities to maximize capital budgets, accelerate project timelines, and address deferred maintenance.

Under S445, the legislation modernizes performance contracting in two key ways:

1 - A Simpler, Faster Procurement Process

North Carolina has shifted from a proposal-based selection process to a qualifications-based (RFQ) approach, aligning with design-build best practices used across the state.

What this means for your organization:

• • • • • No longer requiring pre-bid meetings, bid walks, etc.

        • Reduced administrative burden (the procurement document shrinks by 80% and proposal sizes by 75%)

        • Faster partner selection 

This streamlined approach can reduce project timelines by approximately 3 months, enabling organizations to move more quickly from planning to implementation.

2 - Greater Flexibility to Maximize Your Capital

The updated law allows organizations to leverage existing capital within the total project cost, unlocking greater project scope. Capital dollars and reinvested energy savings can now work together in a single, integrated strategy.

A simple example:

• • • • • $3M in capital funding can help unlock a $10.1M+ comprehensive project

        • Savings generated through the project help fund additional improvements
        • Projects can move forward with limited organizational financial risk

The result is the ability to tackle more meaningful upgrades—faster and at greater scale. 

What this means for North Carolina's public agencies

Public sector leaders are facing ever mounting infrastructure needs while working within tight capital budgets. The updated legislation gives organizations more flexibility to use GESPCs to address deferred maintenance, maximize available funding, and advance long-term sustainability and resilience goals. 

Rather than tackling facility needs one project at a time, performance contracting allows organizations to take a more comprehensive approach by combining improvements such as HVAC, lighting, controls, water systems, roofing, windows, electrical infrastructure, and renewable energy projects into a single initiative. Energy savings generated by those improvements can then be reinvested into additional upgrades, helping leaders align facility investments with long-term organizational planning.

According to Dr. Jerry Oates, former Superintendent of Brunswick County Schools, the shift reflects the realities many public sector organizations face today. “This transition is a necessity for modern organizations. It’s about aligning how projects are delivered with operational realities, including tight timelines and limited resources, while guaranteeing long-term outcomes.” 

These financing and procurement efficiencies in turn create faster project delivery. For public sector leaders, speed matters because community needs cannot wait. As Dr. Todd Martin, former Superintendent of Yadkin County Schools, explains, "Public sector leaders are constantly balancing project timelines and budget constraints against community expectations. A qualifications-based selection approach helps organizations move projects forward more quickly, so communities can benefit from facility improvements sooner."