Understanding Biden’s ‘Green’ Federal Procurement Order

President Biden recently signed an executive order that calls for the U.S. government to lead the way in what many call “green procurement”—using public procurement to model sustainable, environmentally sound purchasing to reduce greenhouse gases and other forms of pollution.

Although the Biden order was swathed in technical detail, a closer look shows that the order is another step along a predictable trajectory, one likely to raise tough legal issues as the federal government and its contractors implement environmentally sustainable procurement.

History of the Order

Fifteen years ago, President George W. Bush issued an order that called for agencies to work in an environmentally sustainable manner. President Obama issued a broader order in 2009, which called for an interagency report on how the federal government could reduce greenhouse gas emissions through improved procurement practices. And in 2010, the General Services Administration (GSA) published that report, which recommended that the government use commercial measures wherever possible to reduce greenhouse gas emissions in federal procurement.

After that, green procurement lost momentum in the Obama administration. The GSA administrator who had championed sustainability stepped down in 2012 after a distracting scandal over a Las Vegas convention, and in 2015 Obama issued a less ambitious order that instead called for a study on how major suppliers could implement sustainable procurement.

During the Trump administration green procurement stalled, and probably hit its low point when Trump issued an order which called only for more efficient agency compliance with existing statutory requirements.

Green Procurement Globally

Meanwhile, though, the threat of global warming became clearer, and the rest of the world (with the help of the U.N.) moved forward on green procurement. The European Union, for example, embraced sustainable procurement, Japan implemented its own law on green public procurement, Brazil’s new procurement law made environmental issues an important part of infrastructure planning, and green public procurement became an integral part of international discussions on how to counter global warming.

Although green procurement made little progress inside the Trump administration, those years saw important developments outside government. A recognized lexicon for sustainable public procurement emerged, which serves as a common language worldwide for regulatory cooperation. Corporate standards for measuring greenhouse gases became broadly accepted, and—as my colleague Steven Schooner recently noted—several common strategies emerged for implementing green procurement.

Strategies for Green Procurement

Green procurement strategies follow a trajectory that was largely foreseen over a decade ago in GSA’s 2010 report. Government can, for example, strengthen planning for sustainability (as Brazil has); embrace “eco-labels” (benchmarks confirming that products meet sustainability standards) as both the U.S. and the EU have; punish recalcitrant polluters; favor suppliers that have assessed their products for greenhouse gas emissions, or—perhaps most importantly—make sustainability an award criterion in procurement. The question really is which strategy the government will follow first; on that point, the recent order lends clarity.

Current Federal Efforts

In October, the regulators who oversee the Federal Acquisition Regulation (FAR) published an advance notice of proposed rulemaking (ANPR) which anticipated the recent Biden order.

The October ANPR followed an earlier Biden order that directed agencies to consider:

1. requiring major federal suppliers to disclose greenhouse gas emissions and climate-related financial risks, and to set scientifically based reduction targets;
2. how to take costs of climate change into account in procurement awards; and
3. if feasible, how to give preferences to suppliers whose goods and services promise lower greenhouse gas emissions.

The October ANPR also called for public comments, and a regulatory “case” to implement the executive order (FAR Case 2021-015) remains open.

President Biden’s most recent executive order may reshape that regulatory reform because the order set specific goals and called for a general realignment of federal procurement. Biden directed agencies to seek carbon-free electricity by 2030, zero-emission vehicle emissions by 2035, net-zero-emission from federal procurement overall by 2050, a net-zero building portfolio by 2045, and net-zero emissions from federal operations overall by 2050.

In the near term, Biden directed agencies to reorient procurement and operations to achieve “climate-resilient” infrastructure, build a workforce focused on climate issues and sustainability, advance environmental justice, and equity, prioritize the purchase of sustainable products, and advance domestic and international partnerships (such as the international “Green Government Initiative”).

What The Biden Order Means for Federal Contractors

Though it followed a predictable trajectory, the recent Biden order fixed long-term goals in targeted industries such as electric power, vehicles, office buildings, and water. Those industries may see new and tighter federal procurement requirements for sustainability.

More specifically, major suppliers may be asked to track the greenhouse gas emissions traceable to the goods and services they sell to the federal government. The real estate industry may encounter stronger requirements for “green” buildings, and construction materials suppliers may face tighter “buy clean” requirements regarding embedded emissions.

In time the federal government may call for all federal contractors to measure and declare the environmental costs of their goods and services. This would raise complicated legal questions, from issues regarding technical responsiveness, past performance, and responsibility, to international trade challenges regarding discriminatory standards.

While environmental sustainability is not yet a general requirement in federal procurement, many view it as essential for the future. After more than a decade of the U.S. government’s sometimes stumbling efforts at reform, in coming years federal contractors may well face stricter requirements for “green” goods and services.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Christopher Yukins teaches in the government procurement law program at the George Washington University Law School. He has testified on issues of procurement reform and trade before committees of the U.S. Congress and the European Parliament.