Currently Being Moderated

In a recent article by Tracey de Morsella (editor of the Green Economy Post (GEP)), the Federal Acquisition Regulations Council (FARC) released an interim rule on green procurement at the end of May, 2011.  The draft rule specifically says that Federal agencies must:

“leverage agency acquisitions to foster markets for  sustainable technologies and materials, products, and services. The head  of each agency shall advance sustainable  acquisition by ensuring that  95 percent of new contract actions,  including task and delivery orders,  for products and services, with the  exception of acquisition of weapon  systems, are energy-efficient  (Energy Star or Federal Energy  Management Program (FEMP)-designated),  water-efficient, biobased,  environmentally preferable (e.g., Electronic  Product Environmental  Assessment Tool (EPEAT)-registered), non-ozone  depleting, contain  recycled content, or are non-toxic or less toxic  alternatives, where  such products and services meet agency performance  requirements.”

GreenGov.jpgAccording to the GEP article, the effort was “spearheaded by the  Defense Department, NASA and the General Services Administration, and  part of the Obama administration’s campaign to lead by example in sustainable purchasing.  The interim policy also requires all federal contractors to support the  government’s goals in environmental management, and includes new  requirements for electronic or other paper-saving methods for submitting  documents required by contracts.”

The interim rule on green procurement it is a follow-up to President Obama’s 2009 executive Order EO 13514 which requires agencies to meet a number of energy, water, and waste reduction targets, including:


  • 95% of all applicable contracts will meet sustainability requirements;
  • Leverage Federal purchasing power to promote  environmentally-responsible products and technologies to foster markets  in these sectors.
  • Advance sustainable acquisition


This is a great development for the Federal government.  Not only  does EO 13514 drive new markets but requires government agencies to 1)  define sustainable acquisition and 2) track sustainable contract actions  and …get this…3) educate the acquisition workforce.

The GEP article notes that “the effects of President Obama’s  Executive Order have been rippling through the federal government  purchasing community for a while.”  The article summarizes efforts by  the U.S. Federal Trade Commission (FTC) which issued its Guides for the Use of Environmental Marketing Claims,  Also the  U.S. EPA is evaluating its role in evaluating products  across their entire lifecycle, including “defining criteria for more  sustainable products, generating eco-labels and standards and verifying  products meet green standards “


The  U.S. General Services Administration (GSA) has also initiated its  GreenGov program, primarily focused on identifying products and  practices designed to reduce the governments environmental (specifically  carbon footprints).  As I noted in an article this past winter, according to Council on Environmental Quality Chair Nancy Sutley,  “The Federal Government purchases $500 billion in goods and services  annually, so you could say the Federal supply chain represents an  enormous opportunity to support a clean energy economy”.  Participating  companies will share their experiences to help GSA develop a phased,  incentive-based approach to developing contracting advantages to  companies that track and disclose their greenhouse gas emissions.   This  process appears to be glacial in its pace, compared to the light speed pace of technology development in countries like China.


As the GEP post noted,  GSA is developing and evaluating green technologies and practices in  several areas including: electronics stewardship, innovative building  technologies and greening the supply chain. These latest activities by  GSA are in addition to individual efforts that the Departments of Energy  and Defense, NASA, USDA and Department of Agriculture have been  implementing for many years.

On the surface this sounds all good, in fact, great.  But there are  some underlying systemic issues related to the timing of the FARC  interim ruling, and industry groups and procurement agencies are  scratching their heads.


Left Hand, Meet Right Hand.


In  response to the FARC interim draft rule , several industry associations  requested that  the government , specifically the FARC to stop issuing  rules that change federal procurement policy without first considering  public comment.


mixedmessagesblog.jpgEven though the “interim rule” is based on directives within  executive orders (like EO 13514) from 2007 and 2009, the organizations  (including members of the Council of Defense and Space Industry  Associations, the U.S. Chamber of Commerce (no surprise), Professional  Services Council and TechAmerica) came out and stated that increasing  reliance on “interim rules” is a misuse of the “urgent and compelling”  circumstances those rules are supposed to be issued under.  The groups  asked that the FARC withdraw the interim rule and republish it as a  “proposed rule”, allowing for public comment.

 

The FARC maintains that the interim rule only mandates what previous  executive orders, laws and sustainable programs have asked agencies to  do and should not impact the agencies economically.  But that may not be  the case.


While many of the agencies that I mentioned above are well on the way  to responding to the previously issued Executive Orders (and I applaud  them for their efforts!), they appear to be doing this in different  ways- which may inadvertently find some suppliers being able to respond  to one agencies tender processes and not to another. 

 

It only took me a  few moments to “Google” “government + green purchasing + requirements”  to find remarkably outdated and variably detailed documents from Federal  agency to Federal agency, some going as far back as the Year 2000!   Even a report from the Congressional Research Service from April 2010 indicated that “The federal approach to green procurement is arguably  largely piecemeal and fragmented.” Also, it would appear that agencies  may still lack consensus on product “green” performance standards, which  is clearly a part of the EO 13514 mandate

There is little in the way of specifics behind the statement that  they must be “energy-efficient, water-efficient, bio-based or non-ozone  depleting, and are certified as environmentally friendly, contain  recycled content, or are nontoxic or less toxic than alternative  products.”  And it’s this lack of specificity and consistency among  agencies that vexes small and large businesses alike.

“ there appears to be significant ambiguity about  which type of green product or service agencies should procure in  situations where multiple types could meet their needs. For example, the  FAR requires agencies to acquire recovered-content products instead of  biobased ones when both types would meet agency needs.  However, no  similar guidance exists for the other types of preferred products and  services discussed in this report. That leaves agencies without guidance  in determining whether, for example, they should procure Energy Star or  FEMP-designated products, or recovered-content or environmentally  preferable products.” Green Procurement: Overview and Issues for  Congress, Congressional Research Service 7-5700,  R41197 www.crs.gov

Why am I not surprised at the discontinuities that  exist within Federal government (he asked rhetorically)?  Even President  Obama alluded these redundancies and inefficiencies in his January  State of the Union address. According to a Government Accountability Office report released in January, the U.S. government has more than 100 programs  dealing with surface transportation issues, 80 for economic development,  47 for job training, and 17 different grant programs for disaster  preparedness, 15 agencies or offices handle food safety, and five  agencies are working to ensure the federal government uses less  gasoline.  Really?!  Inefficiencies are wasteful…plain and simple.  This  is no way to run a government let alone a business.  And let’s face it,  government is BIG business.


Training, Training, Training


What’s also concerning to me is that agencies may not have not  adequately trained procurement staff that are prepared to implement  detailed operational related to the “interim rule”.  I also am concerned  that federal acquisitions staff  lack the technical training on green  supply chain management to make informed choices beyond how to price and  negotiate a contract.  As a matter of fact the CRS report states that  “…certain requirements, most notably those involving environmentally  preferable products, may be difficult for the existing workforce to  implement because agencies must consider multiple attributes of products  when determining which product to purchase.”


According to Neal Couture, President of the National Contract  Management Association (which represents public and private contracting  officers), “Contracting people that I talk to have received very little  training in the area of sustainability”.  Additional cases in point, as  described in a recent Federal Times article:


  • The Federal Acquisition Institute, which provides training for the federal acquisition workforce, offers no courses specifically addressing green procurement.  The Defense Acquisition University (DAU) offers an optional, two-hour  course devoted to the Defense Department’s Green Procurement Program.
  • Leslie Deneault, program director for acquisition services at DAU,  said there are optional courses available that cover the many  legislative actions that affect acquisitions.
  • Professional Services Council executive vice president Alan Chvotkin  said contractors and government officials may find it hard to get  needed products and services that meet environmental standards, possibly  due in part to other contract specifications that often limit local  sourcing or small business participation.
  • Program managers who write the requirements will need to know to  which environmental standards certain products and services should be  held, according to Mr. Couture said.


And you think one interim rule is going to straighten the green  purchasing issue out?  There’s got to be a better way, and it may be  found within the private sector.


Collaborative Cleantech Partnerships Rising to Meet the EO 13514 Mandate


Header.pngOne organization that is taking the initiative in responding to the interim rule on green purchasing and EO 13514 is the Clean Technology Trade Alliance,  based in Bremerton, Washington.  According to Mark Frost, the Executive  Director of the organization, the CTTA provides the ultimate  partnership between business and environmentalists by creating a  market-based reason to become sustainable and operate with efficient,  environmentally responsible products and services. In addition, the  technologies and products associated with CTTA members fit nicely into  the Federal government’s EO 13514 vision for sustainable and  environmentally preferable products.


The  CTTA mission is to drive the expansion of global clean technology by  connecting buyers with sustainable solutions. One part of this mission  that fits squarely into the Federal government procurement model and  most recent FARC interim rule is identifying and verifying clean  technology solution providers for business and government. Since it’s  essential to validate the extent of sustainable practices of member  businesses, the CTTA is getting ready to roll out an independent review  process to validate clean tech solution providers.  In doing so, the  CTTA will reviewing each organizations operational processes and  products and giving them a score based on defined criteria, using life  cycle, product foot print, energy and multi-resource consumption and  efficiency factors, etc. This review effort has the opportunity to  become a market driver that moves companies to meet the highest “green  and clean” technology standards in order to be more profitable and  competitive. The CTTA also provides the means to discover clean  technology solutions that will enable these companies to improve their  score and profit from their efforts.


In addition the CTTA assists its members in 1) making  commercialization of products easier with a trained sales force, that  provide members qualified leads, and facilitating distribution lines for  both established and unseasoned products; and 2) developing synergies  between businesses that create new technologies, open new markets and  discover new efficiencies. Those who collaborate with the CTTA receive a  single point of contact to find clean technology business solutions,  and most importantly a market reference point for making clean  technology purchasing decisions.

The CTTA is uniquely positioned to provide the Federal government  with a single, unbiased, point of entry for identifying and vetting  clean technology solutions. First the basic identification and reporting  service is a no cost service. Second if the CTTA does not have a  member, or several members, that can provide the solution they will  conduct a search to identify potential solution providers and conduct a  basic survey to provide an initial vetting for the requestor. Third if  the solution exists they will find a provider, if it does not they can  work with companies to develop the solution if there is a sustainable  market. The CTTA is a membership-driven organization, recruiting new  members and servicing existing members- this is how the CTTA grows. Mr.  Frost states that providing services to customers like GSA, the DoD,  NASA, Boeing and others allows the CTTA to recruit small and mid-sized  business members and is another example of the business synergy the CTTA  pursues.


What Can Be Done to Harmonize Green Procurement?


The CRS report raised many of the questions about the efficacy of  legislative initiatives or federal rulings that came to my mind in the  months since I participated in a GSA GreenGov Summit in Portland, so I  figured I’d just repeat just a few of them here:


  1. What, if any, are the most useful and appropriate policy goals for green procurement?
  2. Are the means by which different green-procurement preferences,  programs, and other initiatives have been established the most  appropriate for meeting policy goals?
  3. How effectively are agency implementation and performance of green procurement being assessed?
  4. How successful are current programs and initiatives at meeting policy goals?
  5. Are policies on the acquisition of green services sufficient?
  6. Are the preferences and the methods of implementing them sufficiently harmonized and integrated?
  7. Are there significant gaps in the various federal preferences for types of green products and services?
  8. Are there implementation methods not currently used by the federal government that should be considered?
  9. Is training of procurement officials sufficient?

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Until these questions are fully explored, I suggest the Federal  government hold off on finalizing its interim rule and consider the  collaborative private sector example being implemented by the CTTA.  In a  perfect scenario, the White House should instruct representatives from  the GSA, OMB, DoD, DoE, USDA, EPA, and Agriculture (and others) to come  together in one place, at one time.  Attendees should also be invited  from the private sector too- the best brains in the science, engineering  and design of clean technology, standards development, policy,  manufacturing and procurement/material acquisition.

 

In systematic and structured manner, they can hammer out a viable,  results driven framework for sustainable sourcing and procurement.  This  in turn (I am sure), will promote new technologies and drive the  creation of new “green economy” markets….without all the confusion and  lack of harmony.

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