Regulatory: Green Procurement--More Than Just Buying "Green Stuff"

On October 5, 2009, President Obama signed Executive Order 13514, entitled, "Federal Leadership in Environmental, Energy, and Economic Performance." The executive order calls for an integrated strategy for sustainability in the federal government and to make the reduction of greenhouse gas (GHG) emission a priority for Federal agencies.

Among the directives included in the order is a measure directing the General Services Administration (GSA) to study and make recommendations to the Office of Management and Budget (OMB) regarding the feasibility of making GHG emission tracking and reporting part of Federal procurement process. The order calls for GSA to explore the feasibility of (1) requiring venders and contractors to register with a "voluntary registry or organization for reporting GHG emission; (2) requiring contractors to develop and make available via a reporting systems their GHG inventory and description of efforts to mitigate GHG emissions; and (3) using federal government purchasing preferences or other incentives for products manufactured using processes that minimize GHG emissions.

In April 2010, GSA issued its report to OMB. Entitled "Executive Order 13514 Section 13: Recommendations for Vendor and Contractor Emissions," the report concludes that it is feasible for the government to develop mechanisms to track supply chain emissions through a contractor reporting system and eventually use that data in making procurement decisions. The report recommends a two-phased approach to implementing a tracking, reporting and evaluation regime. Phase 1 (Fiscal Years (FY) 2011-2012) would include the development of an infrastructure for the reporting requirements, including the establishment of a Program Office and the development of the government reporting system. Phase 1 also would entail a training program for government procurement officials. Phase 2 ( FY 2013-2016) would entail, among other things, the development of new policies and procedures for the Federal Acquisition Regulation addressing the government's use of vendor/contractor GHG emissions in making contract award decisions. During this phase it is anticipated that the government will begin using vendor GHG emission data in award decisions.

Although GSA's phased approach stretches out over five years, it is never too early for industry to become involved. One theme running throughout GSA's report is the need for the government to be flexible as tracking and reporting GHG emissions is an emerging field. The new Program Office will be looking for input from the public when developing the reporting system and crafting the rules. Industry can play a vital role in educating and informing government as to best practices and ensuring a balanced approach. Other stakeholders will be providing input to the government. Additionally, once implemented, a contractor who has followed the development of the GHG regime will have a better understanding of the tracking and reporting requirements. An informed contractor will be in a better position to comply with the reporting requirements and may gain a competitive edge.

Roger Waldron

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