Biden Budget Seeks to Use Procurement to Battle the Climate Crisis, Advance Equity and Expand Small Businesses Opportunities

The outline of President Biden’s fiscal 2022 federal budget proposal released Friday shows how the administration hopes to use federal procurement to fight climate change, support small and disadvantaged businesses, and advance equity. 

Biden is proposing a 16% increase in civilian discretionary spending, or $769 billion, and a 1.7% increase for national defense programs, amounting to a $753 billion boost. Civilian agencies’ contract spending has increased steadily in recent years, reaching a record high of $228 billion in fiscal 2020, an increase of 17% from 2019. The surge in spending was mainly due to the coronavirus pandemic, according to Bloomberg Government. The budget preview furthers what the Biden team promised during the campaign for procurement goals and set in motion in early executive orders.

The budget proposal shows “a very expansive approach to what the government is trying to do across the board,” David Berteau, president and CEO of the Professional Services Council, a trade association that represents over 400 companies that contract with the federal government, told Government Executive on Monday. “We think that expansive approach provides a lot of opportunities for both contractor support in the traditional sense of the word...but also in some less traditional ways,” such as by the administration incorporating “climate concerns” into procurement decisions. 

One of the many strategies outlined in the budget proposal for tackling climate change is to use federal procurement to increase the demand for zero emissions, American-made vehicles. 

“To provide an immediate, clear, and stable source of demand to help accelerate American industrial capacity to produce clean vehicles and components, the discretionary request includes $600 million for electric vehicles and charging infrastructure in the individual budgets of 18 federal agencies,” said the budget document. This is “including dedicated funds at the General Services Administration for other agencies and for [the] United States Postal Service charging infrastructure.” 

The budget document doesn’t offer more specific guidelines on procurement and climate change, but that could be included in the full version expected later this spring.

Biden previously issued executive orders on January 20 and January 27 on tackling climate change. The former says that by September 1, 2021 a new interagency working group must provide recommendations to the president about how the “social costs” of carbon, nitrous oxide and methane should be applied in the federal budgeting, procurement and decision-making process. 

Berteau said there is a “huge opportunity” for the federal government to shift its focus to long-term savings (in terms of money and reducing the carbon footprint) with contracts that prioritize climate change considerations rather than focusing on the short-term costs. He noted that due to the fact that lawmakers often resort to continuing resolutions when the fiscal year ends and most do not allow “new starts” to programs, this shift could take time. 

The White House is also seeking to expand procurement opportunities for small businesses. “Small businesses play a vital role in federal contracting, and it is essential to extend contracting opportunities to underrepresented groups,” said the budget document. The discretionary request proposes $852 million for the Small Business Administration (9.4% more than the fiscal 2021 level), which includes funding to increase staffing for the agency government contracting programs.

The additional staffing capacity will help “deliver on the president’s goal of increasing the share of federal contracts awarded to small disadvantaged businesses to 15% by 2025,” said the document. This would “significantly expand the number of opportunities for small businesses owned by individuals who are socially and economically disadvantaged.” The governmentwide and individual agency goal for small disadvantaged businesses is currently 5%.

Rep. Nydia Velázquez, D-N.Y., chairwoman of the House Small Business Committee, said she was “especially pleased to see that the budget request emphasizes investment in underserved entrepreneurs” since “the pandemic has devastated minority, women-owned, and rural small businesses.” 

The budget proposal also generally supports Biden’s previous initiatives “to leverage federal procurement to support quality jobs and American manufacturing, as well as efforts to advance equity in federal contracting and procurement,” said the document in the GSA section. Biden issued an executive order on January 20 directing agencies to review the possible barriers underserved communities face in trying to participate in federal contracting and one on January 25 compelling them to procure more U.S.-manufactured products. 

The White House vowed in the Labor Department’s section of the budget that there will be “fair treatment for millions of workers by restoring resources to oversee and enforce the equal employment obligations of federal contractors, including protections against discrimination based on race, gender, disability, gender identity, and sexual orientation.” 

The full budget proposal will offer more details along with mandatory investments and tax reforms. 

The initial budget proposal builds on the momentum from the past 13 months of the pandemic in “modernizing the government,” said Berteau. The bigger challenge will be “whether or not we can modify the contracting process to take advantage of this.”

Even though the full proposal hasn’t been released yet, he urged Congress to start budget negotiations now due to the pressing nature of the challenges the country is facing and the August 1 deadline for the debt ceiling to be reset.