New rule cements sustainability mandate for federal buyers

The Biden administration published a final rule on Monday — coinciding with Earth Day — meant to leverage the purchasing power of the federal government to shape the market and reduce emissions associated with the government supply chain. 

First proposed last August, the newly finalized rule updates sustainability requirements in the federal government’s primary regulations for federal buyers, called the Federal Acquisition Regulation. 

When the changes go into effect on May 22, the FAR will require agencies to procure sustainable products and services “to the maximum extent practicable.”

The federal government spends over $700 billion on products and services annually. Emissions associated with its supply chain are estimated to be over twice as much as those from the operation of both government buildings and vehicles combined, according to the White House.

The administration says that the rule, which stems from a 2021 executive order, will help the federal government meet goals set by the 2021 Federal Sustainability Plan, including a target set for net-zero emissions from federal procurement by 2050.

“President Biden has tasked federal agencies with leading by example toward a more sustainable future,” said Brenda Mallory, chair of the White House Council on Environmental Quality, in a comment.

Other efforts meant to help meet that net-zero procurement goal include requirements for federal suppliers to publicly disclose their emissions and set reduction targets — not yet finalized — and another potential rulemaking action to update procurement regulations to have federal buyers minimize the risk of climate change — also not finalized.

On a global scale, the rule comes after the United Nations said in a report last year that the world is likely to pass 1.5 degrees Celsius in warming relative to preindustrial levels by the 2030s unless drastic action is taken. Limiting warming to 1.5 C was a goal set by the 2016 Paris agreement to prevent effects of climate change, such as the demise of coral reefs, increase in extreme storms and rising sea levels.

As for the newly finalized update to the Federal Acquisition Regulation, agencies will have some flexibility in regard to the new mandate to procure sustainable products and services. 

Federal buyers will be able to forgo the requirements if they provide a written justification that sustainable products and services don’t meet the agency’s “reasonable” performance requirements or delivery schedule, or can’t be bought at a “reasonable price.” The rule also provides exemptions for national security acquisitions and for contracts in which the work is performed outside of the United States.

Currently, the FAR mandates that 95% of an agency’s contract actions require products that are energy-efficient and environmentally preferable. The administration says the update makes sustainable purchases the “default.”

Other changes in the new rule include updates also meant to modernize the FAR by cleaning up and better defining existing sustainability requirements and removing non-sustainability related items from the section of the regulation in question. 

The new rule also directs agencies to follow recommendations for purchases from the Environmental Protection Agency that lay out environmental standards and ecolabels for different types of products as a way to help purchasers find clean, American-made products. 

“We are advancing the administration’s environmental objectives while supporting U.S. manufacturing and generating significant economic benefits across the country,” said EPA Administrator Michael Regan in a statement. He called the new rule “a testament to our collective dedication to using the power of federal procurement to forge a cleaner, more sustainable future.”

The update points agencies to those EPA recommendations as of October last year. The FAR Council will have to go through notice and comment to incorporate any future EPA updates to the recommendations, Kara Sacilotto, a partner at Wiley Rein LLP who specializes in government contracting, told Nextgov/FCW via email.

The updated FAR also requires agencies to specify what sustainable products and services are relevant to an acquisition in their solicitations and contracts, and it creates a new omnibus contract clause meant to communicate requirements for sustainability to contractors.