On May 31, 2011, the government issued an interim rule that implements two key executive orders directing environmental attributes of federal procurement actions. Executive Order 13423, “Strengthening Federal Environmental, Energy, and Transportation Management,” was issued by President Bush on January 24, 2007 and set a number of different environmental goals for federal agencies related to improving energy efficiency, increasing the use of renewable energy sources, reducing water consumption intensity, reducing the quantity of toxic and hazardous chemicals and materials acquired, and ensuring that new building construction and major renovations comply with “green” guidelines. It also specifically required agencies to incorporate sustainable environmental practices in the acquisition of goods and services, including acquiring “biobased, environmentally preferable, energy-efficient, water efficient, and recycled contact products.”

Two years later, on October 5, 2009, President Obama issued Executive Order 13514, “Federal Leadership in Environmental, Energy, and Economic Performance,” which required federal agencies to meet specific goals related to reducing greenhouse gas emissions and improving water efficiency, pollution prevention and waste elimination. It specifically required agencies to advance sustainable acquisition by ensuring that 95% of new contract actions are “energy-efficient, water-efficient, biobased, environmentally preferable and non-ozone depleting, and contain recycled content, non-toxic or less-toxic alternatives.” It also directed agencies to implement “high performance sustainable federal building design, construction, operation and management, maintenance, and deconstruction.”

Now, these requirements have been made part of the Federal Acquisition Regulation (“FAR”), and will affect agencies and contractors alike. From the agencies’ perspective, key requirements in the new FAR rule include:

(1) Considering and including sustainable acquisition requirements in synopses, acquisition planning documents, and descriptions of agency needs.

(2) Ensuring that 95% of new contract actions, including those for construction, contain requirements for products that are designated as energy-efficient, water-efficient, biobased, environmentally preferable (e.g., EPEAT-registered, non-toxic or less toxic alternatives), non-ozone depleting, or those that contain recovered materials.

(3) Making maximum use of energy-savings performance contracts (“EPSCs”).

(4) Implementing high-performance sustainable building design, construction, renovation, repair, commissioning, operation and maintenance, management, and deconstruction practices.

(5) When acquiring information technology, identifying agency requirements pursuant to EPEAT standards and policies that promote power management, double-sided printing, and other energy-efficient or environmentally preferable features, and best management practices for energy-efficient management of services and federal data centers.

The rule includes definitions of terms such as “renewable energy,” “sustainable acquisition,” “water consumption intensity,” and “greenhouse gases.”

The provisions affecting contractors include:

(1) a contract clause that requires the submission of paper documents, including proposals and reports, to be printed or copied on double-sided paper containing at least 30% postconsumer fiber, “whenever practicable” and when the information is not otherwise able to be submit electronically to the agency. Prior to this rule, there was only an agency “preference” for use of recycled paper.

(2) a contract clause requiring contractors that operate government-owned or government-leased facilities in the U.S. to comply with an agency’s environmental management system and provide monitoring and measurement information as required by the government.

Note that the interim rule removes the requirement for contractors to report and certify to toxic chemical releases, on the rationale that these reports are already required by federal environmental laws. Also, contractors should be aware that the Federal Procurement Data System (“FPDS”) will be used to collect sustainable acquisition data.

The stated goal of the rule is to leverage federal acquisition actions to foster markets for sustainable technologies and materials, products, and services. Whether the rule will accomplish this goal remains to be seen, particularly in light of shrinking private investments in these areas.

Comments on the interim rule are being accepted through August 1, 2011.