Tracking Greenbacks

Now that a federal program to buy green goods is a reality, Uncle Sam is discovering the difficulty of measuring its results.

Republican presidential nominee John McCain took a swipe at the federal government in June during a speech on energy and the environment. "Our federal government is never shy about instructing the American people in good environmental practice," the Arizona senator told an audience in Santa Barbara, Calif., at a campaign event. "But energy efficiency, like charity, should begin at home. So I propose to put the purchasing power of the United States government on the side of green technology."

In other words, the government should practice what it preaches.

Sen. McCain, meet Boyd K. Rutherford. The former General Services Administration official has been the Agriculture Department's assistant secretary for administration since 2006. Among many other duties, he shepherds the federal government's green purchasing program-an enormous task considering Uncle Sam is the single largest consumer in the United States, spending roughly $400 billion annually on goods and services.

"It has taken some time to work our way through it," says Rutherford, of the green purchasing initiative he oversees, also known as the BioPreferred program. In fact, the government-largely through executive orders-has pushed for environmentally friendly and cost-effective purchasing since the 1990s. But it's only in the past few years that the program has gained real traction within the federal procurement community, mostly as a result of an increased public focus on green issues and recent legislation.

Rutherford, who has a law degree and a master's degree in communications management from the University of Southern California, points out that it took a decade to jump-start the nationwide recycling program launched in the 1970s. Of BioPreferred, he says, "This program is probably three or four times more complicated."

For an administration that prides itself on performance management, though, oversight of the green purchasing program has been complicated. Agency and industry officials interviewed for this story cited anecdotal successes related to BioPreferred, but also acknowledged the inherent difficulty in tracking thousands of products, their costs and savings to the federal government. It's up to each agency to determine what kind of data to collect from contractors on the green goods and services they provide-a system that doesn't lend itself to managing results efficiently.

While tracking data on products and costs associated with them might be beyond the government's current capabilities, USDA has been working with the Office of Management and Budget for several years on a system to ensure contractor compliance.

That pace might seem glacial, especially since it was the 2002 Farm Security and Rural Investment Act that formally directed agencies to give preference to bio-based products when purchasing everything from bed linens to grease removers. But even government watchdogs concede it's a tall order for agencies. "They're being realistic," says Linda Chipperfield, marketing director for Green Seal, a nonprofit group in Washington that certifies green products and works with federal, state and local governments. "In order to be credible, they have to do it at a pace that's realistic to them."

Preferred Brand

The government defines bio-based products as commercial and industrial goods, other than food and feed, that are "composed in whole or in significant part of biological products, forestry materials or renewable domestic agricultural materials, including plant, animal or marine materials." They are usually biodegradable or recyclable, and are considered a preferable alternative to petroleum-based products. Billions of gallons of oil are used each year to make petroleum-based products, a costly venture-economically and politically-as the price of oil topped $140 per barrel this summer.

Just as current events seem to favor a bio-based market, both the executive and legislative branches have pushed agencies in recent years to adopt more environmentally friendly procurement practices. A 2007 presidential directive aimed at strengthening federal energy management includes a provision requiring agencies to acquire "bio-based, environmentally preferable, energy-efficient, water-efficient and recycled-content products." Executive Order 13423 builds on FSRIA, which directed agencies to give preference to bio-based products when-ever possible. That law also tapped USDA to oversee the governmentwide purchasing program and to develop a green labeling system to use as a standard for separating the bio-based wheat from the chaff.

"The real bear in the woods was not the greening of the government," says Lynn Bergeson, a partner at Bergeson & Campbell, a Washington law firm whose specialty includes counseling clients on green product approval and regulation. "The real bear in the woods was the maturing of consumer preferences and the concern with potential exposures to those chemicals that are perceived to cause harm." Bergeson was giving lectures on federal bio-based procurement regulations to industry leaders as early as 2002.

USDA manages a catalog of approved products that must meet minimum criteria for bio-based content, the actual percentage of which varies, depending on the product. Currently there are more than 2,700 products available from nearly 700 companies through the department's online procurement catalog. "We sell a lot of products to the government," says Paul Coty, director of sales and marketing at Soy Technologies, a Florida-based manufacturer of alternative cleaning products. "They're much more stringent in ensuring these products meet some kind of third-party certification with regard to green credentials." Coty adds that it took eight months to have the company's products tested to qualify for USDA's BioPreferred program.

Performance Measures

Overall, the BioPreferred program has an ambitious mission: decrease the country's dependence on foreign oil; increase jobs and economic opportunities in rural areas; and improve the environment. But it remains to be seen whether some or any of those goals are feasible, particularly when accomplishing less lofty objectives has proved challenging. A green labeling system denoting a "USDA-certified bio-based product" is still being hammered out; Agriculture plans to launch that portion of the program in 2009. And perhaps more significant, agencies' bio-based purchases are not tracked by the federal procurement data system-or any other centralized clearinghouse.

"I think that oversight is clearly important because if there isn't some oversight, people don't have a particular motivation to make sure that the program is successful," says Carol Werner, executive director of the Environmental and Energy Studies Institute, a non-profit group in Washington.

In fact, the 2008 Food and Energy Security Act-which Congress passed this spring in spite of President Bush's veto-contains updated provisions related to the oversight of the BioPreferred program. The law directs OMB's Office of Federal Procurement Policy to work with USDA in collecting specific data from agencies on their bio-based purchasing programs, including the number and dollar value of bio-based contracts and the type and costs of green products contractors sold to the government. Every two years, OFPP and USDA must submit a report to Congress on the program's progress based on agency data. Shana Love, a USDA spokeswoman, says the department most likely will not be able to meet all the new oversight provisions, particularly the measure calling for the types and costs of bio-based products.

"We don't tell the contractor that they need to go out and buy two gallons of Windex; we leave that up to the contractor," says Love. "We look at the service performed, and they're allowed to purchase any product as long as it meets our performance requirements."

Rutherford says it will be impossible to quantitatively measure the program's success since federal contractors do most of the green purchasing for the government, and many of them do not keep such records. And a new data system to track all the government's purchases and their prices would cost billions to build, he estimates. Even on-site audits would not provide a comprehensive snapshot. "You wouldn't be able to audit everything," Rutherford maintains, conceding that "you would audit enough so people knew you could walk in at anytime and look to see what they're using."

With vendors raising their prices of bio-based products now-along with the promise that the government will see a return on its investment in the future-oversight of federal procurement dollars becomes increasingly important. But success is not simply a matter of dollars and cents, Love argues.

"There are other ways to capture the proof of the success of the program without talking about the types of products and specific dollar amounts," she says. "You can prove a successful program by ensuring that all your contracts include a provision for bio-based products . . . by requiring that all the solicitations require bio-based products."