Tag Archives: clean tech

It’s Time to Find a Harmonized Solution to the U.S. Government’s Green Purchasing Challenge

17 Jun

In a recent article by  Tracey de Morsella (editor of the Green Economy Post (GEP)), the Federal Acquisition Regulations Council (FARC) released an interim rule on green procurement at the end of May, 2011.  The draft rule specifically says that Federal agencies must:

“leverage agency acquisitions to foster markets for sustainable technologies and materials, products, and services. The head of each agency shall advance sustainable  acquisition by ensuring that 95 percent of new contract actions,  including task and delivery orders, for products and services, with the  exception of acquisition of weapon systems, are energy-efficient  (Energy Star or Federal Energy Management Program (FEMP)-designated),  water-efficient, biobased, environmentally preferable (e.g., Electronic  Product Environmental Assessment Tool (EPEAT)-registered), non-ozone  depleting, contain recycled content, or are non-toxic or less toxic  alternatives, where such products and services meet agency performance  requirements.”

According to the GEP article, the effort was “spearheaded by the Defense Department, NASA and the General Services Administration, and part of the Obama administration’s campaign to lead by example in sustainable purchasing. The interim policy also requires all federal contractors to support the government’s goals in environmental management, and includes new requirements for electronic or other paper-saving methods for submitting documents required by contracts.”

The interim rule on green procurement it is a follow-up to President Obama’s 2009 executive Order EO 13514 which requires agencies to meet a number of energy, water, and waste reduction targets, including:

  • 95% of all applicable contracts will meet sustainability requirements;
  • Leverage Federal purchasing power to promote environmentally-responsible products and technologies to foster markets in these sectors.
  • Advance sustainable acquisition

This is a great development for the Federal government.  Not only does EO 13514 drive new markets but requires government agencies to 1) define sustainable acquisition and 2) track sustainable contract actions and …get this…3) educate the acquisition workforce.

The GEP article notes that “the effects of President Obama’s Executive Order have been rippling through the federal government purchasing community for a while.”  The article summarizes efforts by the U.S. Federal Trade Commission (FTC) which issued its Guides for the Use of Environmental Marketing Claims,  Also the  U.S. EPA is evaluating its role in evaluating products across their entire lifecycle, including “defining criteria for more sustainable products, generating eco-labels and standards and verifying products meet green standards “

The U.S. General Services Administration (GSA) has also initiated its GreenGov program, primarily focused on identifying products and practices designed to reduce the governments environmental (specifically carbon footprints).  As I noted in an article this past winter, according to Council on Environmental Quality Chair Nancy Sutley, “The Federal Government purchases $500 billion in goods and services annually, so you could say the Federal supply chain represents an enormous opportunity to support a clean energy economy”.  Participating companies will share their experiences to help GSA develop a phased, incentive-based approach to developing contracting advantages to companies that track and disclose their greenhouse gas emissions.   This process appears to be glacial in its pace, compared to the light speed pace of technology development in countries like China.

As the GEP post noted,  GSA is developing and evaluating green technologies and practices in several areas including: electronics stewardship, innovative building technologies and greening the supply chain. These latest activities by GSA are in addition to individual efforts that the Departments of Energy and Defense, NASA, USDA and Department of Agriculture have been implementing for many years.

On the surface this sounds all good, in fact, great.  But there are some underlying systemic issues related to the timing of the FARC interim ruling, and industry groups and procurement agencies are scratching their heads.

Left Hand, Meet Right Hand.

In response to the FARC interim draft rule , several industry associations requested that  the government , specifically the FARC to stop issuing rules that change federal procurement policy without first considering public comment.

Even though the “interim rule” is based on directives within executive orders (like EO 13514) from 2007 and 2009, the organizations (including members of the Council of Defense and Space Industry Associations, the U.S. Chamber of Commerce (no surprise), Professional Services Council and TechAmerica) came out and stated that increasing reliance on “interim rules” is a misuse of the “urgent and compelling” circumstances those rules are supposed to be issued under.  The groups asked that the FARC withdraw the interim rule and republish it as a “proposed rule”, allowing for public comment.

The FARC maintains that the interim rule only mandates what previous executive orders, laws and sustainable programs have asked agencies to do and should not impact the agencies economically.  But that may not be the case.

While many of the agencies that I mentioned above are well on the way to responding to the previously issued Executive Orders (and I applaud them for their efforts!), they appear to be doing this in different ways- which may inadvertently find some suppliers being able to respond to one agencies tender processes and not to another.  It only took me a few moments to “Google” “government + green purchasing + requirements” to find remarkably outdated and variably detailed documents from Federal agency to Federal agency, some going as far back as the Year 2000!  Even a report from the Congressional Research Service from April 2010 indicated that “The federal approach to green procurement is arguably largely piecemeal and fragmented.” Also, it would appear that agencies may still lack consensus on product “green” performance standards, which is clearly a part of the EO 13514 mandate

There is little in the way of specifics behind the statement that they must be “energy-efficient, water-efficient, bio-based or non-ozone depleting, and are certified as environmentally friendly, contain recycled content, or are nontoxic or less toxic than alternative products.”  And it’s this lack of specificity and consistency among agencies that vexes small and large businesses alike.

“ there appears to be significant ambiguity about which type of green product or service agencies should procure in situations where multiple types could meet their needs. For example, the FAR requires agencies to acquire recovered-content products instead of biobased ones when both types would meet agency needs.  However, no similar guidance exists for the other types of preferred products and services discussed in this report. That leaves agencies without guidance in determining whether, for example, they should procure Energy Star or FEMP-designated products, or recovered-content or environmentally preferable products.” Green Procurement: Overview and Issues for Congress, Congressional Research Service 7-5700,  R41197 www.crs.gov

Why am I not surprised at the discontinuities that exist within Federal government (he asked rhetorically)?  Even President Obama alluded these redundancies and inefficiencies in his January State of the Union address. According to a Government Accountability Office report released in January, the U.S. government has more than 100 programs dealing with surface transportation issues, 80 for economic development, 47 for job training, and 17 different grant programs for disaster preparedness, 15 agencies or offices handle food safety, and five agencies are working to ensure the federal government uses less gasoline.  Really?!  Inefficiencies are wasteful…plain and simple.  This is no way to run a government let alone a business.  And let’s face it, government is BIG business.

 Training, Training, Training

What’s also concerning to me is that agencies may not have not adequately trained procurement staff that are prepared to implement detailed operational related to the “interim rule”.  I also am concerned that federal acquisitions staff  lack the technical training on green supply chain management to make informed choices beyond how to price and negotiate a contract.  As a matter of fact the CRS report states that “…certain requirements, most notably those involving environmentally preferable products, may be difficult for the existing workforce to implement because agencies must consider multiple attributes of products when determining which product to purchase.”

According to Neal Couture, President of the National Contract Management Association (which represents public and private contracting officers), “Contracting people that I talk to have received very little training in the area of sustainability”.  Additional cases in point, as described in a recent Federal Times article:

  • The Federal Acquisition Institute, which provides training for the federal acquisition workforce, offers no courses specifically addressing green procurement. The Defense Acquisition University (DAU) offers an optional, two-hour course devoted to the Defense Department’s Green Procurement Program.
  • Leslie Deneault, program director for acquisition services at DAU, said there are optional courses available that cover the many legislative actions that affect acquisitions.
  • Professional Services Council executive vice president Alan Chvotkin said contractors and government officials may find it hard to get needed products and services that meet environmental standards, possibly due in part to other contract specifications that often limit local sourcing or small business participation.
  • Program managers who write the requirements will need to know to which environmental standards certain products and services should be held, according to Mr. Couture said.

And you think one interim rule is going to straighten the green purchasing issue out?  There’s got to be a better way, and it may be found within the private sector.

Collaborative Cleantech Partnerships Rising to Meet the EO 13514 Mandate

One organization that is taking the initiative in responding to the interim rule on green purchasing and EO 13514 is the Clean Technology Trade Alliance, based in Bremerton, Washington.  According to Mark Frost, the Executive Director of the organization, the CTTA provides the ultimate partnership between business and environmentalists by creating a market-based reason to become sustainable and operate with efficient, environmentally responsible products and services. In addition, the technologies and products associated with CTTA members fit nicely into the Federal government’s EO 13514 vision for sustainable and environmentally preferable products.

The CTTA mission is to drive the expansion of global clean technology by connecting buyers with sustainable solutions. One part of this mission that fits squarely into the Federal government procurement model and most recent FARC interim rule is identifying and verifying clean technology solution providers for business and government. Since it’s essential to validate the extent of sustainable practices of member businesses, the CTTA is getting ready to roll out an independent review process to validate clean tech solution providers.  In doing so, the CTTA will reviewing each organizations operational processes and products and giving them a score based on defined criteria, using life cycle, product foot print, energy and multi-resource consumption and efficiency factors, etc. This review effort has the opportunity to become a market driver that moves companies to meet the highest “green and clean” technology standards in order to be more profitable and competitive. The CTTA also provides the means to discover clean technology solutions that will enable these companies to improve their score and profit from their efforts.

In addition the CTTA assists its members in 1) making commercialization of products easier with a trained sales force, that provide members qualified leads, and facilitating distribution lines for both established and unseasoned products; and 2) developing synergies between businesses that create new technologies, open new markets and discover new efficiencies. Those who collaborate with the CTTA receive a single point of contact to find clean technology business solutions, and most importantly a market reference point for making clean technology purchasing decisions.

The CTTA is uniquely positioned to provide the Federal government with a single, unbiased, point of entry for identifying and vetting clean technology solutions. First the basic identification and reporting service is a no cost service. Second if the CTTA does not have a member, or several members, that can provide the solution they will conduct a search to identify potential solution providers and conduct a basic survey to provide an initial vetting for the requestor. Third if the solution exists they will find a provider, if it does not they can work with companies to develop the solution if there is a sustainable market. The CTTA is a membership-driven organization, recruiting new members and servicing existing members- this is how the CTTA grows. Mr. Frost states that providing services to customers like GSA, the DoD, NASA, Boeing and others allows the CTTA to recruit small and mid-sized business members and is another example of the business synergy the CTTA pursues.

What Can Be Done to Harmonize Green Procurement?

The CRS report raised many of the questions about the efficacy of legislative initiatives or federal rulings that came to my mind in the months since I participated in a GSA GreenGov Summit in Portland, so I figured I’d just repeat just a few of them here:

  • What, if any, are the most useful and appropriate policy goals for green procurement?
  • Are the means by which different green-procurement preferences, programs, and other initiatives have been established the most appropriate for meeting policy goals?
  • How effectively are agency implementation and performance of green procurement being assessed?
  • How successful are current programs and initiatives at meeting policy goals?
  • Are policies on the acquisition of green services sufficient?
  • Are the preferences and the methods of implementing them sufficiently harmonized and integrated?
  • Are there significant gaps in the various federal preferences for types of green products and services?
  • Are there implementation methods not currently used by the federal government that should be considered?
  • Is training of procurement officials sufficient?

Until these questions are fully explored, I suggest the Federal government hold off on finalizing its interim rule and consider the collaborative private sector example being implemented by the CTTA.  In a perfect scenario, the White House should instruct representatives from the GSA, OMB, DoD, DoE, USDA, EPA, and Agriculture (and others) to come together in one place, at one time.  Attendees should also be invited from the private sector too- the best brains in the science, engineering and design of clean technology, standards development, policy, manufacturing and procurement/material acquisition.

In systematic and structured manner, they can hammer out a viable, results driven framework for sustainable sourcing and procurement.  This in turn (I am sure), will promote new technologies and drive the creation of new “green economy” markets….without all the confusion and lack of harmony.

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Sustainability vs. ISO 14001- Seeking “the Edge” in a Competitive World

6 May

“Our results show that ISO 14001 promotes GSCM [green supply chain management] practices, in that facilities with environmental management systems (EMS) certified to ISO 14001 are 40 percent more likely to assess their suppliers’ environmental performance and 50 percent more likely to require that their suppliers undertake specific environmental practices. Further, we find that government approaches that encourage voluntary EMS adoption indirectly promote GSCM practices, in that the probability of facilities’ assessing their suppliers’ environmental performance and requiring them to undertake specific environmental practices increases by 9 percent and 10 percent, respectively, if a government assistance program exists.”

Thus starts a research study conducted by Resources for the Future scientists that I recently reviewed. http://www.rff.org/RFF/Documents/RFF-DP-09-05.pdf. As a sustainability and management systems practitioner, the executive summary caught my eye. Yet another tangible “business case” for implementing proactive ISO 14001-2004 based environmental management systems was made. I find myself to be challenged to steer clients toward the tangible evidence of ISO 14001-2004’s (http://www.iso.org/iso/iso_14000_essentials) benefits to organizational competitiveness versus attempting to address the many intangible issues surrounding the “green” or “sustainability” mantra of the day. Well aren’t all of these approaches “good”, one might ask. The unequivocal answer is “yes”.

Managing the Supply Chain Through ISO 14001-2004

Managing the Supply Chain Through ISO 14001-2004

What remains then is decided which approach is best for an organization to undertake and where is the greatest value-added benefit that can be realized. In its most basic terms, the purpose of the ISO 14001-2004 standard is to help all types of public and private organizations to protect the environment, to prevent pollution, and to improve their environmental performance. ISO 14001-focused EMS’s remain as relevant today as they were in the late 1990’s and early 2000’s when manufacturers were literally lining up at the door seeking assistance. I would argue that in today’s economic climate, rapid expansion of supply chain drivers and pending explosion of renewable energy technology, that the time may be ripe for a new look at the business appeal of ISO 14001-2004.

While “sustainability” is all good, the concept remains fuzzy to most organizations, because there is no standardized approach that can tightly define its boundaries. And perhaps that is a good thing since the aspects of sustainability are widely diverse and the organizational needs are so variable.

Finding the Sweet Spot of Sustainability

Finding the Sweet Spot of Sustainability

The three spheres of sustainability (environment, economy, equity) and the “sweet spot” that companies are aspiring to achieve is vague to most, elusive to many.

So my advice is this:

  • Review your business plans short and long term objectives- assess what your current state and desired state looks like with respect to environmental compliance, green supply chain management,  and process optimization.
  • Be keenly aware of your external business drivers and what will stimulate business growth.
  • Know what your supply chain is requiring – what are the critical success factors to keeping their business.
  • Update the competitive intelligence of your competitors to know what is guiding their capture strategies and tactics.
  • Develop a formula for success that addresses business, environmental and stakeholder factors that leads to tangible, real results.
  • Stay tuned for more on this topic.
  • Now go out there and keep your eye on the bulls-eye!

Yes We Can (Have a Green Economy)…Can We?

26 Feb

Two recent news items caught my eye, especially in light of the continuing meltdown of the economy and President Obama’s call to action at last night’s” not so” State of the Union address. First, according to a recent survey (http://www.rockwellautomation.com/news/get/ManufacturingSurvey.pdf), an overwhelming majority of Americans believe that safer, cleaner and more energy-efficient production are the most important manufacturing issues in today’s economy. Americans chose product and employee safety, and environmental issues as the most important attributes. Among the top answers chosen include:

· Provide safe, quality products (86%)

· Provide a safe workplace (84%)

· Use natural resources efficiently (80%)

· Produce minimal waste (71%)

· Keep current prices or reduce prices (59%)

Americans also believe U.S. manufacturers need to invest in automating and modernizing their factories to improve environmental sustainability, competitive position and product quality.

· Use energy, raw materials or natural resources more efficiently (92%)

· Continue to remain competitive and grow (89%)

· Minimize waste and other environmental impacts (86%)

· Provide safer, high quality products (85%)

· Respond more quickly to customer demands (85%)

· Provide a safer workplace (83%)

A striking statistic in the survey found that only 18 percent believe U.S. manufacturing technology is more advanced than other countries and only about a third (34%) noted the U.S. has become more competitive in the past ten years. This downward competitive trend tracks well with president Obama’s statements last night.  This is becoming apparent even in the growing “clean tech” sector, where China and other nations are producing far more at a substantially lower per unit price.  So is government stimulus the answer?  Many believe that government incentives to modernize manufacturing will help create highly-skilled, higher-paying jobs, while upgrading automation at U.S. factories for many years to come.

In contract, a study released on the eve of the recent Washington DC national conference on green jobs says that emerging eco-friendly work must provide adequate pay and benefits — or risk damaging efforts to restore the economy and strive for environmental sustainability.  The study, “High Road or Low Road? Job Quality in the New Green Economy,”  (http://www.goodjobsfirst.org/pdf/gjfgreenjobsrpt.pdf), was conducted by the nonprofit resource center Good Jobs First. Researchers looked at pay and labor conditions for existing jobs in eco-friendly business sectors, including the manufacturing of components for wind and solar energy projects, green construction and recycling.

Researchers found that low pay, often just slightly above minimum wage, was prevalent in many green job sectors.  There were many notable exceptions, those being where unique public-private partnerships or established labor agreements were forged.  The researchers went on to state that “ care needs to be taken in creating those positions….One of the greatest risks is that, in our haste to create a large quantity of new green jobs, we pay too little attention to their quality”..

“Environmental sustainability will be difficult or impossible to achieve if it does not go in hand with economic sustainability for workers and their families,” the researchers wrote. “The fact that an employer is engaged in a business that benefits the environment does not necessarily mean that the employees of that enterprise are going to be treated well.”

In my last entry on this site, I discussed the important of having not just a well-trained green workforce, but a credentialed one.  The Good Jobs First report discussed many ways in which job quality standards could be integrated while developing the infrastructure for the green workforce of the future. Some of the more novel ways that (at least to me) stood out included:  strengthening prevailing wage requirements, adopting best value contracting, adding labor criteria to LEED standards and using “clawbacks” to enforce job quality standards (in other word, requiring a company that fails to fulfill its project commitment to repay a subsidy, tax break or any other related financial assistance received).

So what will it take to get a trained and credentialed green workforce integrated into a strong manufacturing sector that will yield sustained upward productivity and growth?  Is it up to our state and federal governments?  Is organized labor the key?  Would public-private partnerships or apprenticeships be the answer?

What are your thoughts?