Streamline Buying for the Environment Background Buying for the environment means using the federal procurement process to support programs intended to preserve the world's natural resources for future generations of Americans. The procurement process is used to encourage the development of markets for products that are energy efficient, contain recovered materials, or are less harmful to the environment than competing products and to conserve the world's natural resources by promoting the use of new technologies. A number of laws (e.g., the Energy Policy Act of 1992 and the Resource Conservation and Recovery Act [RCRA] and executive orders require the federal government to play a leadership role in developing and executing programs that provide for the protection of the environment. Many of these require the government to be an enlightened, environmentally conscious, and concerned consumer. The Resource Conservation and Recovery Act. RCRA requires federal agencies to maximize their purchases of products made with recovered materials.1 The Act requires: -- the Environmental Protection Agency (EPA) to issue guidelines that designate items which are or can be produced from recovered materials; -- agencies, to the extent they purchase designated items, to purchase those with the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, unless the items are not available within a reasonable period of time, fail to meet performance standards, or are unreasonably priced; -- agencies to eliminate from product specifications unnecessary requirements for virgin materials; and -- the Office of Federal Procurement Policy (OFPP), in cooperation with EPA, to implement these requirements and report to Congress every two years on agency progress in implementing RCRA. RCRA also requires agencies to develop affirmative procurement programs. The programs must contain four elements: (1) a preference program, (2) a promotion program, (3) procedures for obtaining and verifying estimates and certifications of the content of recovered materials, and (4) annual review and monitoring. From 1976, when RCRA was enacted, until the 1990's, implementation throughout the federal government was perfunctory at best. EPA issued only five guidelines, designating recycled paper products, cement and concrete containing flyash, retreaded tires, rerefined lubricating oil, and building insulation containing recovered materials. Agencies did not collect purchase information data, and there were no interagency efforts to promote the purchase of recycled products. The Energy Policy Act of 1992 requires federal agencies to establish energy management programs to reduce energy consumption by 20 percent by the year 2000 using 1985 consumption as the base.2 Agencies are also required to install all available energy and water conservation measures in federal facilities when the payback period is 10 years or less. The Energy Policy Act. The Energy Policy Act imposes a number of requirements for the procurement of supplies and services, including the requirements that: -- Agencies negotiate with electric, water, and gas utilities to design costeffective demand management and conservation incentive programs and provide for the use of energy savings performance contracts. Demand management and conservation incentive programs are established by utilities because it is more costeffective for them to invest their funds in conservation instead of constructing additional power plants in order to accommodate projected customer demands. The utilities are in effect buying conservation through rebate and other incentive programs that pay customers for installing energyefficient equipment or changing their operations to save energy. -- Federal contractors, and their subcontractors, who manage and operate federally owned facilities, use energy conservation measures designed to reduce energy costs in governmentowned and contractoroperated facilities, which are ultimately borne by the federal government. -- The Administrator, General Services Administration (GSA), the Secretary of Defense, and the Director of the Defense Logistics Agency undertake a program to include energyefficient products in carrying out their procurement and supply functions. -- GSA coordinate and hold regular biennial workshops in each of the 10 standard federal regions on energy management, conservation, efficiency, and planning strategy. The administrator is required to invite Department of Energy (DOE), state, local, tribal, and county public officials who have responsibilities for energy management or may have an interest in such matters. These workshops must address the procurement and use of energyefficient products. Need for Change Congress and the General Accounting Office (GAO) have criticized agency implementation of RCRA.3 EPA took more than six years to issue its first guideline, and has so far issued a total of five. For calendar years 1990 and 1991, the federal government estimates that for the five items covered by the guidelines, only 26 percent of all paper purchased had recovered content, less than 3 percent of tire purchases were for retreads, and less than 1 percent of rerefined oil was purchased.4 Recent progress. Over the last two years, agencies have placed greater emphasis on the procurement of recycled, environmentally preferable, and energyefficient products and services. For example, the Office of Federal Procurement Policy (OFPP) issued a policy letter that emphasized the need to procure environmentally sound and energyefficient products and services, as well as those made with recovered material. The Council on Federal Recycling and Procurement Policy was instrumental in assisting agencies to develop and implement their affirmative procurement programs, purchase recycled products, eliminate barriers to RCRA implementation, and develop FAR implementation language.5 And, a soontobesigned Executive Order on Federal Acquisition, Recycling, and Waste Prevention will mandate increased procurement of recycled and environmentally preferable products. Few agencies have made substantial efforts to purchase products that are not covered by EPA guidelines or to purchase items containing more recovered material than the minimum content standard set by EPA. However, it is possible to do so. The new Executive Order will require EPA to streamline its guideline process so that more products can be designated faster and content standards can be updated more regularly. This should enable agencies to make greater strides in purchasing these products. GSA has contracted for more than 900 products (mostly paper products) containing recovered materials and an additional 1,200 products that have other environmentally beneficial features.6 As a central procurement agency for the federal government, GSA has marketed these products to other federal agencies. Barriers to success. One of the reasons RCRA is difficult to implement is that there are no common definitions for certain critical terms. EPA proposed consensus definitions for certain terms used by consumers and industry but included a disclaimer that the terms used in federal procurement may differ from the proposed consensus terms because of RCRA definitions. EPA deferred to the Federal Trade Commission (FTC) with respect to environmental marketing claims. Currently the law requires estimates, verification, and certification of a certain nature because it presumes agencies will select vendors based on highest recycled material content. Of all the acquisition strategies available, this is the least likely to be used since there is no way to accurately verify content estimates. The result is a paperwork burden on industry that is not linked to the acquisition strategy. Another problem is the requirement that purchase contracts stipulate the collection of information on the amount of recycled material contained in products. This imposes still more paperwork burdens on the government. The paperwork burden is particularly large for small transactions. Agencies are currently implementing the Energy Policy Act of 1992. The Department of Energy is in the process of developing regulations covering certain aspects of the law, including those that deal with energysavings performance contracts. GSA is responsible for taking action on those aspects of the Act dealing with intergovernmental energy management planning and coordination. Governmentwide implementation of the Act can be furthered by the establishment of indefinite delivery contracts for energy audits and retrofit projects. Such contracts should be made available to federal agencies for optional use. The Naval Facilities Engineering Command in San Diego established such contracts for small retrofit projects (e.g., replacement of small motors, lighting fixtures) that can serve as the model for establishing contracts for use by all government agencies. GSA and the Navy have been working with public utilities, such as San Diego Gas & Electric, to take advantage of services that the government is entitled to under tariffs approved by the public service commission, such as energy audits, demand management, and conservation programs. In some cases, when public service commissions approve public utilities rates, they provide that a portion of the rate charged be used for programs to promote conservation. Until recently, federal agencies were not able to take advantage of such programs because of statutory limitations. However, the Energy Policy Act now authorizes agencies to accept financial incentives, goods, or services generally available to customers who participate in utility incentive programs. GSA is responsible for negotiating areawide utility contracts for use by federal agencies in acquiring utility services. Many of the provisions of the Energy Policy Act require contracting personnel to develop new and innovative contracting methods in order to aid agencies in achieving the goals for saving energy by the year 2000. Contracts will be needed for new technology, and new financing sources (e.g., energy savings performance contracts) will be involved as well. An electronic commerce system is a means to both streamline procurement processes and reduce the use of paper. Endnotes 1. Resource Conservation and Recovery Act (42 U.S.C. 6962). 2. Public Law 102486 (October 24, 1992). 3. U.S. General Accounting Office, Solid Waste: Federal Program to Buy Products with Recovered Materials Proceeds Slowly, RCED9358 (Washington, D.C.: U.S. General Accounting Office, May 1993). 4. Data as of July 1993 provided by the Office of Management and Budget, Office of Federal Procurement Policy. 5. Executive Order 12780, "Federal Agency Recycling and the Council on Federal Recycling and Procurement Policy." 6. Data as of July 1993 provided by the General Services Administration, Federal Supply Service.
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