Three Steps Forward, Two Steps Back

Contraction for a sustainable energy future.

By Ian M. Hoffman

With July seared into the national consciousness as the hottest month on record, it seems timely to take stock of what role federal procurement policy plays in addressing climate change.

In executive orders and regulation, the Biden administration has set procurement as a primary tool for curbing federal greenhouse gas emissions. One proposed rule takes aim at emissions up the federal
supply chain by tasking larger suppliers with carbon reductions.

  The latest move: Proposing a sweeping consolidation and strengthening of sustainability requirements under Part 23 of the Federal Acquisition Regulation (FAR). Compliance across the board is mandated “to the maximum extent practicable.”

  For cutting carbon emissions in the federal sector, no tool is more central than the requirement to buy energy-efficient products and ensure that contractors supply efficient products for federal use. It predates nearly all other sustainability requirements, yet full compliance has remained elusive. However, much of the potential for decarbonizing the U.S. government is still unrealized. Contracting professionals can help. You are, in fact, critical.

  Running a government takes energy — a lot of energy. The federal government is the nation’s largest purchaser of goods and services and its largest energy user. It is a colossus astride the markets for energy and products that use it. Federal policy creates market demand that strongly influences what energy providers and manufacturers of energy-using products bring to market.

Federal contracting officers do more than buy energy and goods and subtly shape markets. You leave a legacy that, in energy terms, lasts and lasts. The buildings, chillers, boilers, even the break room refrigerators, that federal buyers purchase persist for years, often decades. The equipment outlives presidential administrations and retirements. It often continues to use more power and generate more energy cost and emissions than necessary.

  With every purchase, federal procurement professionals are choosing our energy future.

  The question is, what kind of future will it be? Will it be energy- and carbon-intensive? Or will it reduce unnecessary energy use and carbon emissions? Will it be less costly in life-cycle terms for taxpayers and less of a contribution to an unstable climate?

Past and Present Policies

 The mandate for federal agencies to buy efficient products has its roots in the 1970s oil embargo. Scientists already understood the greenhouse effect of carbon emissions. However, climate change was not on the policy radar. Reducing dependence on foreign oil and prudent energy use were the challenges of the day.

  Congress decided that if the federal government was going to demand that Americans cut back on energy (turning lights off when unneeded) and use energy more efficiently (use bulbs delivering the same light with less electricity), then government should lead the way. First, lawmakers encouraged federal agencies to lead on buying efficient products. Then Congress decreed it in statute in language that grew increasingly firm over the decades.

  The policy today has implications abroad. When the United States makes international pledges to reduce greenhouse gas emissions, its envoys prioritize commitments to reductions more under control of the executive branch. Those reductions are often regarded as the firmest and so are among the first international commitments made. Federal buyers are the key implementers of U.S. policy and thus essential in delivering on actual federal emissions reductions. Nations, ours included, look to each other’s actual reductions to assess their sincerity in dealing with climate change.

  Since 1993, researchers at Lawrence Berkeley National Laboratory have supported the U.S. Department of Energy (DOE) Federal Energy Management Program. It helps agencies meet their statutory requirements to buy energy-efficient products.

Good and Bad News

In recent years, our lab’s researchers have tracked federal solicitations for energy-using products and the services that require them. The good news? A sizable majority of fiscal 2022 solicitations (57%) met a minimal measure of compliance for buying energy-efficient products (Figure 1). That is, buyers cited the appropriate FAR clause for energy-efficient products.

  Many buyers take a meaningful further step. They explicitly demand energy efficiency either by specifying efficient models or requiring greater energy performance than standard products. We term this extra step as “effective compliance.”

  These more effective solicitations are more likely to result in acquisition of an energy-efficient product. Each is a small but essential step toward less carbon and lower climate impact for the government as a whole.

  In fiscal 2022, federal buyers hit this higher standard in about 40% of solicitations.

  The bad news: These compliance rates have been more or less static over the past seven years. In at least two of every five solicitations, the federal government and its taxpayers are buying a more energy and carbon-intensive future. In effect, for every three steps that the nation’s largest energy user takes toward a more sustainable future, we take two steps back.

  The federal purchasing signal to markets and, indirectly, to our international partners on clean technologies and addressing climate change is thus muddled at best.

  With more than one of every three U.S. citizens under excessive heat or severe storm warnings in late June 2023, why does the federal government miss opportunities to lead by example and save energy costs and avoid needless emissions?

Compliance Frustration

As researchers in the area of sustainable public procurement, we don’t know the answer with certainty. The evidence in hand says federal buyers want to comply with requirements to buy efficient products. But our interviews with procurement professionals suggest multiple factors frustrate consistent compliance:

Confusion or disconnection on responsibility for meeting the requirements. We often hear, “I buy what I’m told.” Exactly who has responsibility for meeting requirements depends on who you ask. Some contracting officers will say the program manager or other requestor is responsible. Requestors often say the burden falls on the contracting officer. Some specifiers will say it’s obviously the contracting officer. The disconnect can place contracting officers in an unenviable position. If the program manager or other requestor doesn’t ask for an efficient product, some contracting officers feel it’s not their job or that they lack sufficient institutional support to say, “No.” Balancing the demand for compliance with maintaining workflow and productive relationships often isn’t easy.

 The pursuit of lowest reasonable cost. Higher efficiency products can have higher upfront costs. Buyers often say lower initial costs are a top priority (even though 42 USC §8259b says buyers 1. must make their purchases based on lifecycle costs, and 2. if the product is ENERGY STAR-certified or meets DOE Federal Energy Management Program-designated performance levels, buyers can assume it is life cycle cost effective).

 Efficiency is a lower priority than other considerations driving a purchase. Buyers say they’re not encouraged to buy energy-efficient products, or that efficiency receives less emphasis than other considerations.

Lack of awareness. Some buyers don’t know that agencies must purchase energy-efficient products. Or the issue can be more fundamental: A contracting officer recently asked us, “What is energy efficiency?”

 Efficiency is not emphasized in electronic purchasing tools. Energy efficiency is not clearly identified or emphasized in electronic catalogs and purchasing platforms. We hear, “If it’s a requirement, why isn’t it the top choice?” Catalogs available to civilian agencies and their contractors often don’t identify energy efficiency as a product attribute. Or, worse, the catalogs uncritically pass along vendor claims that all their energy-using products meet all federal requirements.

Questions Around Non-Compliance

The notion that many factors are at work against consistent compliance can seem like an intellectual shrug. It can appear as an academic’s way of saying, “It’s complicated.” But empirical evidence provides some grounding here, at least by inference.

  If non-compliance could be traced to a single, systemic problem, one might expect a clear pattern in the data. Non-compliance would be consistent, possibly even predictable. Instead, we see nearly the opposite. Compliance rates vary significantly from one federal agency to the next (Figure 2) and from year to year.

If non-compliance were largely a function of awareness, then one might expect more homogeneous results within each agency. Instead, the compliance picture gets more complicated the deeper one looks. The data show significant variability in compliance even within agencies (Figure 3). 

  As researchers, we yearn for a coherent explanation. One theory of organizational change is illustrated by a framework known as “Roles, Rules and Tools.” In essence, how well a policy works is a function of 1. who needs to be involved for the policy to succeed (roles); 2. what rules (formal and implicit or cultural) support or hinder the policy objective; and 3. whether the tools at hand enable or hinder achievement of the policy objective.

  When we interview contracting officers to explore the degree to which roles, rules and tools support compliance, we find they often don’t for the reasons discussed in the next sections.

 Low Priority

Given the long history of the energy-efficient product requirement, one might think compliance would be deeply ingrained and a high priority.

  But when surveyed, many contracting officers say their leaders often seem not to treat it as a priority.

  Champions for energy efficiency and emissions reductions exist in every agency. Yet judging from our interviews, it is uncommon for efficiency to be a top priority in an acquisition.

  For procurements to be compliant and result in acquisition of efficient products, actors up and down the procurement chain need to include efficiency as a priority and do their part.

Rules of the Road

The rules for federal procurement can be a boon but also a hindrance to acquiring energy-efficient products.

  The law is clear. Federal agencies must buy energy-efficient products with few exceptions (which include products being used in combat or when a model cannot be found to serve the intended purpose).

  The EPA and DOE set energy performance criteria for different sets of products. Today, EPA is focused on products for retail consumers. The DOE is focused on products for federal buyers that are more commercial or industrial in nature.

  Yet energy efficiency is just one of many potentially competing mandates. Balancing and reconciling these competing rules takes time and effort.

Hard to Find

The basic tools of procurement – e-catalogs, purchasing platforms and contract-writing software – are neither designed nor bear sufficient information for identifying and buying energy-efficient products and services. Or for sustainable products, more broadly.

Several agencies, such as EPA, the DOE Federal Energy Management Program, the General Services Administration, and the Defense Logistics Agency, are trying to make products’ sustainable attributes more visible and trustworthy for buyers. But the bar codes on products don’t contain that information. Even Amazon has trouble identifying what is and is not energy efficient.

To finalize a compliant acquisition for energy-efficient products, contracting officers must:

 • Have leaders, managers and front-line buyers make a priority of energy efficiency.
• Know the requirement.
• Surmount the limitations of procurement data and software.

Given that most or all of these fundamentals must align, it’s almost a wonder that the majority of solicitations are compliant, even if compliance is just at the level of citing the appropriate FAR clause.

  EPA, DOE, and other agencies are trying to help. They and their implementation support contractors, such as our laboratory in Berkeley, California, offer in-person instruction and consultations.

  We continuously analyze and identify efficient products and update those lists. We publish detailed market analyses and purchasing guidance for federal buyers. We make presentations. We exchange ideas. We create training videos. We create fact sheets. We work to make efficient products more visible and available online for buyers.

  What can contracting professionals do? First, consider training. Ensure you are up to date on the requirements for energy efficiency and other sustainable attributes. Work within your organization to clearly communicate sustainability requirements. Consider how to help requesters understand and meet the energy-efficiency requirements. Don’t hesitate to tap organizations such as ours for technical assistance. Ideally, be a champion for sustainability in your office and agency. 

  Perhaps most of all, talk to us.

  We need to understand the challenges that you confront and the reasons that full and consistent compliance is so elusive. We need more certainty about what will enable greater compliance.

  If we email questions to you or if you see our queries in the NCMA forum, be generous with your time and knowledge. If you see innovation or exceptional practice in sustainable procurement, please let us know. We want to give credit where due with awards or other recognition. We also want to pass those lessons to others. A few minutes could pay significant dividends for policy success and federal leadership on sustainability.

  Ultimately, the choice is yours. Will the U.S. government lead by example and reduce the carbon footprint of its buildings and agencies? Will it influence markets to provide cleaner energy and more efficient products for other consumers? Will other nations see the United States meeting its international obligations for addressing climate change?

  The policy is clear. Every solicitation is a step into an energy and climate future. Achieving that future comes down to you. CM

Ian Hoffman is an Energy Policy and Technology Researcher at the Lawrence Berkeley National Laboratory in Berkeley, California.