Federal Contractors Missing the Boat on Sustainability

I have had conversations with many federal government contractors recently about sustainable business practices. Many are unaware of the federal requirements around sustainability. Did you know that if you are a federal contractor and are on the GSA schedule, you will be asked to report on your sustainability efforts? This is included in the RFP process, though it is not currently a requirement.

The U.S. government is the single largest consumer in the nation, purchasing more than $250 billion in goods and services each year. Federal funds are dwindling and competition for those funds is growing - as I'm sure you are aware, with the many recent sequester conversations. If you are a federal contractor, one major way to remain competitive is to help the federal agencies meet their sustainability goals.

Sustainability guidelines for the federal government are not something new.
President Obama passed Executive Order 13514, Federal Leadership in Environmental, Energy, and Economic Performance in 2009. This is aside from other recent orders signed, such as the August 2012 order that aims to increase the number of cogeneration plants in the U.S. by 50 percent by 2020 and decrease carbon emissions by 150 million tons per year.

EO 13514 specifies that the federal government must meet certain targets including: 26% improvement in water efficiency by 2020; 50% recycling and waste diversion by 2015; 95% of all applicable contracts meet sustainability requirements; 30% reduction in vehicle fleet petroleum use by 2020 requirement; and implementation of the 2030 net-zero-energy building requirement.

Agencies' sustainability performance information is readily available and can be compared against those goals. To help agencies meet these goals, the EPA launched a Federal Green Challenge. The Challenge asks federal agencies to reduce their impact in six categories: energy, water, waste, electronics, purchasing and transportation. The GSA and a few other agencies are ahead of the curve. In a 2010 National Academy of Sciences workshop, Nancy Gillis, from GSA's Federal Supply Chain Emissions Program Management Office (PMO), described how the GSA was working to advance sustainable acquisition in the federal supply chain.

Government contractors will be asked to provide an environmental impact statement, develop a waste minimization plan, and describe planned use of green products. Per the GSA's Climate Adaptation Plan, in FY 2013, "GSA will work to integrate adaptation into key business processes and documents." These goals will not change with the sequester. One need only review FAR (Federal Acquisition Regulation) Subpart 23.7 (Contracting for Environmentally Preferable Products and Services) language to see that sustainability requirements are here to stay. As more agencies start working towards these goals, they will be looking to vendors to provide solutions that help achieve their objectives.

While some larger federal contractors, such as the SAIC, are taking action to address these goals, smaller contractors are falling behind. Some are only at the recycling and Green Team stage. If you are a company working with the federal government, what actions should you take, and why? First, the 'why'. If your organization becomes more environmentally sustainable, it will position itself ahead of the competition and is more likely to become a preferred supplier to the government, all other things being equal. The GSA alone purchases over $95 billion in goods and services annually; this provides an opportunity to be part of that market. This is in addition to the benefits that your company could reap when switching to more sustainable business practices. These benefits include cost-savings, improved brand image, and increased innovation, to name a few.

As for what actions you could take, I wish I could tell you there is a straightforward answer. In working with clients to help them through this process, I have found that it really does depend on your sector and the services and products your company offers to the government. The first step, however, is knowing where you stand today against federal requirements, then taking action to improve your position.

If you have started taking some steps and are in doubt as to what and how to communicate to the government agencies you are doing business with, take a look at the recently updated FTC Green Guides for direction. If you have questions as to how to most effectively incorporate sustainability into your business operations, please feel free to email me.

Anca Novacovici is the founder and president of Eco-Coach, Inc., an environmental sustainability consulting firm in Washington, D.C. She works with executives to set their organization's sustainability strategy, and leads the tactical execution and change management required to fulfill on that strategy. You may contact her at anca@eco-coach.com. To learn more about Anca, click here.