Green Procurement in US State and Local Governments

The federal government has not acted alone, nor necessarily as the leader, in environmentally friendly procurement in the U.S. It is actually America's subnational governments that have led the way in green procurement development, thus living up to their reputation as "laboratories of democracy" in policy innovation. Beginning in the late 1980s and early 1990s, subnational governments initiated a number of pioneering efforts in green procurement. These early "pioneers" [5] included, among others, the states of Massachusetts and Minnesota, and the local governments of Santa Monica, California; Seattle, Washington; and King County, Washington.

Among the states, Massachusetts has been a bellwether. Under Governor William Weld in 1993, Massachusetts began an aggressive green procurement program. From its inception, the state's program has focused on purchasing recycled goods. Today, these purchases include recycled paper and office supplies, plastic lumber benches and tables, recycled motor oil, and recycled traffic cones. Massachusetts also owns 37 zero-emission electric vehicles and

87 natural gas vehicles. The state has adopted eco-friendly standards for cleaning projects and acts to reduce the use of pesticides [9]. In 2001 alone, Massachusetts purchased $68 million worth of products with recycled contents [21]. The state also publishes the Recycled and Environmentally Preferable Products and Services Guide for Commonwealth ofMassachusetts State Contracts. This guide includes information not only about recycled content products but also about low-toxicity cleaning products, energy efficient lighting, bio-based lubricants, and swimming pool ionization systems that reduce chlorine substantially [5]. And, since the state's contracts can be used not only by state agencies, but also by municipalities, schools, public colleges and universities, public hospitals, certain nonprofits, and even other states, Massachusetts makes it relatively easy for many government units to identify and purchase environmentally preferable products.

For its part, Minnesota has emphasized offering environmentally preferable products through the state's central purchasing stores. In 1992, for example, the state offered only 122 recycled content items. By 2001, that number had soared to over 2200 [22]. In March 2001, the state signed its first hazardous waste disposal contract for computers and other electronic components [22]. As for state vehicles, Minnesota has a large fleet (over 600 vehicles) of "flexible fuel vehicles" powered by E85, a clean-burning blend of 85% ethanol and 15% gasoline. The state also has an extensive cooperative purchasing program called the Cooperative Purchasing Venture (CPV). For an annual fee of $350, members of the cooperative can purchase goods and services from the state's contracts. In addition to the cost savings that accrue through contract purchases, cooperative members save time and money by not having to develop their own environmentally preferable product specifications. As of December 2000, 446 public entities are participating in Minnesota's program [23].

Local governments also have been green procurement leaders in the U.S. King County, an early adopter of green procurement, stands as a perfect example. King County began its environmentally preferable purchasing program in 1989. Initially, the program encouraged agencies to buy recycled content goods "whenever practicable." In 1995, the policy was expanded beyond recycled content products to include other environmentally preferable materials and processes [24]. Today, the county's green purchases include not only recycled paper (which accounts for over 97% of the county's paper purchases), but remanufactured toner cartridges, re-refined antifreeze and motor oil (both of which are used by all county fleets, including 1200 buses), plastic lumber, retread tires, and plastic lumber. The county also purchases energy efficient lighting and low-toxicity cleaning products, and has developed a green building program. Altogether, the county estimates that it purchased $4 million in environmentally preferable products in 2002 alone, saving over half a million dollars in doing so. Importantly, the savings accrued to the county through green procurement demonstrate that the approach can produce savings in both the short term (in initial cost savings) and long term (over the life cycle of the good or product).

Finally, the city of Santa Monica stands as another particularly effective model of local government green procurement. The city council voted in 1994 to make Santa Monica a "sustainable city." The city has replaced toxic cleaning products with safe alternatives and in the process reduced its spending on these products by five% [25]. The city estimates that implementing the safe cleaning products program eliminated approximately 3200 pounds of hazardous products purchased annually. The city has converted 75% of its 500-vehicle fleet to alternative fuels, and it uses recycled motor oil and less toxic antifreeze in those vehicles. Santa Monica is also involved in efforts to change procurement practices themselves by replacing the lowest price purchasing model with one that looks at life cycle costs and factors them into the purchasing equation [9] and by developing pass/fail standards for environmentally preferable cleaning products.

These examples are, of course, only a sampling of government green procurement efforts underway at the subnational level. North Carolina's "Sustainable North Carolina," Vermont's "Clean State," and California's "State Agency Buy Recycled Campaign" are examples of other leading state green procurement initiatives. At the local level, Seattle, Washington, San Diego, California, and more recently Phoenix, Arizona, have each implemented noteworthy green procurement programs [5]. Together, these efforts attest to the diffusion of green procurement as a policy tool for environmental sustainability.

13.6 Adopting and Implementing Green Procurement 13.6.1 Green Procurement Policies: Mandatory versus Voluntary

Given the success of green procurement in a number of government settings and its potential as an effective tool for environmental sustainability, questions naturally arise over how to establish a green procurement program. In practice, green procurement programs fall into two categories, mandatory and voluntary. Mandatory efforts require environmentally preferable purchasing. Depending on the level of government involved, a mandatory program may come in the form of a state or federal statute, local ordinance, executive order, or administrative rule. Voluntary efforts, on the other hand, range from individual purchasing agents exercising their discretion to buy green products, to more formal policy directives encouraging—but not requiring—environmentally preferable purchasing. Opinion is split as to which approach is more efficacious. On the one hand, unless green procurement is mandated, those with purchasing authority may not feel that they "have to" purchase green and, therefore, simply will not do so. This would suggest the importance of formally mandated green procurement requirements. On the other hand, some of the most successful green procurement programs are found in governments that have adopted voluntary policies [5].

Whether the program is mandatory or voluntary, governments wishing to pursue environmental sustainability through procurement should adopt a green procurement policy or amend their existing procurement policy to incorporate green language. There are several advantages to adopting a specific green procurement policy, including generating greater momentum for the effort and sending strong signals to government personnel and potential vendors that the jurisdiction is serious about making green procurement a part of its routine administrative practices [26]. Several pioneers mentioned in the previous section (e.g., Minnesota, King County) offer model green procurement policies on their websites. These model policies are meant to serve as general guides to jurisdictions looking to adopt their own green procurement policies. Appendix A presents King County's model policy. As the model policy demonstrates, the central procurement agency (or "lead agency") typically plays a primary role in identifying green products and services, establishing environmentally preferable specifications, educating end-users about green procurement and its benefits, and raising awareness about the green procurement program. On the other hand, the other agencies and departments are integral to implementation, as they are usually responsible for identifying specific opportunities to use environmentally preferable products and making sure that their contracts and purchases incorporate green characteristics. The model policy also shows that the list of available environmentally preferable products and services is long, and it will only grow longer in future years as the market responds to government demand.

13.6.2 Integrating Green Procurement

As is the case with all public policies and programs, merely adopting a policy is insufficient for success. Indeed, the success or failure of green procurement is determined by implementation. At the most basic level, successful green procurement—just like any other strategic initiative [27]—requires active commitment from policy leaders, strong advocates, and integration within a jurisdiction's overall management system. Visible support from high-level officials (e.g., city council, city manager, governor, legislators) provides the stamp of legitimacy to green procurement, thus increasing its likelihood of success [25,28]. Similarly, an advocate can serve as an effective champion of the program, thus creating useful momentum and enthusiasm for implementation [5].

Assuming the program has legitimacy and active support, governments can further increase the chances of success for their green procurement efforts by taking steps to align them with broader governmental objectives. For example, in a study of both public and private sector green procurement programs, New, Green and Morton [29] found the most successful effort belonged to a local government that integrated its green procurement program into overall missions regarding environmental protection and economic development. The researchers contend that this integration gave the program a measure of validation because of its association with broader government objectives. While environmental sustainability is certainly an appropriate broad government objective (e.g., Santa Monica's "Sustainable City"), it might be that "improving quality of life" represents an even broader (hence, potentially better) objective for framing green procurement. Since governments have elevated quality of life to the top of their agendas in recent years [30], such an approach could be used to tie green procurement into existing momentum. Regardless, the point is that aligning green procurement with overarching and widely supported objectives can help ensure its success.

An example of an attempt to integrate environment-friendly values into an agency's (as opposed to government's) overarching purpose comes from the city of Seattle, Washington. Specifically, Seattle's Division of Purchasing Services has adopted the following mission and vision statements [31]:

Mission: "The Purchasing Services Division provides departments with quality contracts and tools that incorporate City values, meet departmental needs, support the vendor community, and procure goods and services in a cost effective and timely manner."

Vision: "Purchasing Services has a reputation for excellence both nationally and within the City. We are committed to providing resources and experience to assist departments in successfully meeting their procurement and warehousing needs. We are committed to an enterprise-wide approach to leverage City buying power and to incorporate City values such as sustainability and inclusion of small, women and minority owned businesses. Our commitment to a safe and respectful workplace is shown in high morale and job satisfaction."

As both the mission and vision statements show, the city's purchasing division has made a clear statement that it incorporates the city's values—including environmental sustainability—into its operations. Meeting departmental needs, supporting the vendor community, and achieving cost-effectiveness are important, but so are promoting environmental sustainability and a safe working environment. In other words, these statements send the message to internal (e.g., city employees, purchasing agents, other departments) and external (e.g., vendors, other governments, the public) audiences about the emphasis Purchasing Services places on environmental stewardship: their performance cannot be deemed successful unless it incorporates and achieves environmental objectives.*

13.6.3 Strategies for Green Procurement Implementation

At the operational level, a number of specific strategies exist for implementing green procurement. These strategies include setting price preferences for recycled content and other environmentally preferable products or services, developing environmentally preferable product and service specifications, using "best value" and life cycle cost criteria, setting specific goals for levels of green procurement to be achieved, raising awareness about green procurement through vendor fairs, training, and educational outreach, establishing project-based "green teams," and developing and adopting cooperative purchasing. Each of these strategies will be considered briefly.

* It is worth noting that Section 6002 of RCRA and EO 13101 attempt to incorporate environmental concerns into federal agency procurement planning and management by requiring agencies to prepare Affirmative Procurement Plans (APP). The White House Task Force on Recycling has created a model APP that can be downloaded from the Office of the Federal Environmental Executive at: http://www.ofee.gov/eo/app.pdf. (accessed July 16, 2003).

13.6.3.1 Price Preferences

When governments initially created green procurement programs in the early 1990s, the most popular policy approach was to adopt purchasing preferences favoring environmentally preferable products. A typical policy would allow the purchasing agent to select a bidder offering an environmentally preferable product or service, as long as the product or service met the performance requirements announced in the bid specifications and as long as the price was within a certain percentage (e.g., 5, 10, or even 15%) of its non-green counterparts. The rationale behind price preferences was simple: initially, environmentally preferable products were more expensive due to limited suppliers and limited production, so paying a small increment more for these products to meet green procurement objectives made sense [26]. The pervasiveness of this approach was demonstrated in a recent survey by the National Association of State Procurement Officials [32]. NASPO found that 37 of the 43 states (or 86%) responding to the survey had price preference policies in place, with sizes ranging from 5 to 15%.

More recently, cost-conscious observers have begun to consider the unanticipated effects price preferences may have on vendor behavior. Specifically, some question whether vendors' knowledge about the availability of price preferences induces them to offer their environmentally preferable products at inflated prices [33]. As the EPA [5] notes, "Sellers of environmentally preferable products could be very price competitive, theoretically, but might lack any incentive because they can earn more as long as price preferences exist." Given such concerns, governments may find it advantageous to pursue a second green procurement strategy: including specific environmentally preferable language such as "recycled only" requirements in procurement specifications.

13.6.3.2 Green Specifications

Specifications describe the good or service being sought by government (e.g., general product or service descriptions, the number of units needed, the purpose to be served by the product or service) and indicate any standards or requirements that the product or service must meet (e.g., performance characteristics, materials composition, appearance and finishes, etc.). To incorporate environmentally preferable language into procurement policies and specifications, governments need to do two things. First, governments need to review existing contracts and product and service specifications to ensure that green products and services are not precluded. For example, if a government has solicited bids for printing and photocopying paper and specified "virgin paper" in its bid announcement, that would, by definition, exclude recycled content paper. Such language should be removed so as to eliminate barriers to procuring environmentally preferable goods.

Second, governments need to add language to their procurement polices and specifications that encourages vendors to offer environmentally preferable products. Continuing with the paper example, if a government unit wanted to consider recycled content paper and virgin paper, it might specify that virgin and recycled content paper would be considered but that a price preference would be given to bids offering recycled content paper. For reasons mentioned above, however, a better approach might be to include language in the specifications requiring, say, "50% recycled content paper." Thus, only bidders offering the environmentally preferable product would be considered. The cost and performance of the virgin paper is immaterial, as the government's procurement need for a recycled product has been clearly specified. This general "make it clear" logic is captured by an official form King County [5]:

"If the price and performance of low-toxicity cleaning products meets your needs, then the price of the traditional cleaning product is irrelevant. You're not trying to buy a traditional cleaning product. You're trying to buy low toxicity. If you want to buy oranges, it doesn't matter how expensive apples are."

As this suggests, language can easily be included in specifications requiring certain energy-efficiency standards, minimum recycled content requirements, toxic-free materials, or other environmentally preferable characteristics. Detailed guidance on writing environmentally preferable specifications is available from a number of sources. One good example is the state of Minnesota's [34] publication, The Environmentally Preferable Purchasing Guide. As shown in Appendix B, the guide recommends several ways to put environmental attributes "in writing."

13.6.3.3 "Best Value" Approach and Life Cycle Analysis

When it comes to evaluating bids, the traditional procurement approach is to award a contract to the "lowest responsible bidder." In other words, the vendor submitting the lowest priced bid that meets stated specifications is awarded the contract. The "best value" approach, in comparison, expands the number of factors considered in evaluating a product or service. For example, a purchaser employing the best value approach might consider the actual performance of a product or service provider (for example, during a required testing phase), the maintenance and operating costs of a product, and the environmental impacts of the good or service over its life cycle. The life cycle analysis aspect has generated particular interest among green procurement proponents. As mentioned earlier, such analyses might include not only the initial acquisition costs but also the costs of extracting the raw materials used in producing the product, the costs of producing a product, the costs associated with packaging and transporting the product, the costs of operating and maintaining the product over its functional lifespan, and the costs of disposing or recycling the product. A traditional product may have a lower upfront cost, but the cost of the good over its full life cycle may be much higher in comparison to an environmentally preferable alternative. When this is the case, government officials have a sound basis for procuring environmentally preferable products. EPA funded an effort by the National Institute of Standards and Technology (NIST) to develop a tool to help governments make life cycle-based decisions. Free software for the NIST's decision-enabling tool, Building for Economic and Environmental Sustainability

(or "BEES" for short), is available for free download at the EPA's website (see http://www.epa.gov/oppt/epp/tools/bees.htm; Accessed on July 22, 2003).

13.6.3.4 Setting Green Procurement Goals

A fourth strategy for successful green procurement implementation is adopting annual goals for environmentally preferable purchases.* The goal-setting approach could work with price preferences, green-only specifications, best value analysis, or any other green procurement strategy. That is to say that specific green procurement goals can be articulated and the means to their achievement can vary according to what a particular government's procurement practices and capacity allow. As for the scope of the goals, experience suggests that governments may want to start small with, for example, a recycled content program, then gradually expand environmental preferences to other products and service areas. This focused goal approach was utilized successfully by both Massachusetts and Santa Monica [26]. Finally, green procurement goals are more likely to be met if they are measurable, include clear timetables for attainment, are periodically reviewed, and hold agencies accountable for their performance [28]. An example might be, "The Department of Transportation will increase by 50% its use of recycled content asphalt for road resurfacing projects during the upcoming fiscal year."

Green procurement goals are required at the federal level where agencies must submit specific goals as part of their Affirmative Procurement Plans (APP). The little evidence that exists for other levels of government suggests that governments have not fully embraced the goal setting approach. Specifically, a recent survey by the National Institute of Governmental Purchasing (NIGP) [35] found that only 5.4% of respondents reported that their agencies set green procurement goals for 2000, only 6.0% did so in 2001, and only 6.5% planned to so for 2002. Despite this lackluster evidence, setting goals is a recommended strategy for assuring green procurement success [36,28].

13.6.3.5 Raising Awareness about Green Procurement

Green procurement efforts suffer if end-users and purchasers are unaware of a government's preference for environmentally preferable products and services, or if they are unfamiliar with or misinformed about available green products and services that could meet their procurement needs. To overcome this, governments may pursue efforts to raise awareness of green procurement programs, products, and services and the benefits of "buying green." Two specific examples of this are vendor fairs and training and educational outreach programs. Vendor fairs provide a forum for bringing together vendors of various green products and services and government purchasers. This allows purchasers

* A related approach to goal setting is the use of green procurement set-asides. Set-asides require that a certain percentage of a government's purchases be environmentally preferable. For example, a government might adopt a policy that 50% of all paper products purchased annually contain recycled content.

to see firsthand the products and services that are available and provides the opportunity to ask vendors directly about the performance, price, and availability of their products and services. Vendor Fairs have been used successfully by the likes of Santa Monica [25], Kansas City, Portland, and Massachusetts [26].

A second awareness-raising strategy is to offer training and educational outreach to government purchasers and end-users. Such efforts might entail staff from the central procurement agency or an environmental purchasing project team (if such a team exits) educating purchasers and end-users on the availability and benefits of environmentally preferable products and services. It might also include offering technical training to purchasers on how to use existing procurement processes (e.g., state contracts, central supply stores, requests for bids) to purchase green products and services. A good example is the state of Minnesota. The state's Materials Management Division (MMD) offers extensive training on environmental purchasing as a segment of its required state purchasing certification classes. The training focuses on helping purchasers request and review environmental considerations in their bids and proposals. Also, the state's Resource Recovery Office has prepared environmental purchasing information that is included in a purchasing training notebook provided by MMD to all state purchasers. The EPA [26] reports that Connecticut focuses its training on end-users (as opposed to purchasers) in an attempt to create demand for environmentally preferable products. Further, EPA's Environmentally Preferable Purchasing (EPP) program offers a variety of training tools through its web-based module, the EPP Training Tool (see http://www.epa.gov/ oppt/tools.html). Generally, these awareness-raising efforts can go a long way toward dispelling misconceptions about the performance and availability of green products and services and can generate momentum for green procurement.

13.6.3.6 "Green Teams"

A team-based approach to green procurement recognizes the benefits of cross-functional teams whose members possess different perspectives and insights about government's purchasing needs and constraints [28]. Ideally, these teams would include purchasers, end-users, staff from the central procurement agency, and individuals with environmental expertise [26]. These so-called "green teams" may be responsible for a variety of tasks, including formulating a green procurement policy, reviewing purchasing practices and tendencies to identify areas where environmentally preferable products could have an impact, formulating green procurement goals, publicizing the green procurement program, and monitoring progress.

One variant of the team-based approach is to organize commodity teams that focus on specific product or service areas. An excellent example of the commodity team approach comes from Seattle. The city's "Copernicus Project" consists of 18 separate commodity teams, including teams for building materials, printing, communication equipment, furniture, hazardous materials, and janitorial supplies, among others [31]. In each instance, the commodity teams seek ways to improve the efficiency and effectiveness of procurement in their respective commodity areas while simultaneously incorporating environmentally preferable benefits. The city's efforts have not gone unnoticed in the professional procurement community: In 2000, the Copernicus Project received the "Best Practices in Public Procurement Award" from NIGP.

13.6.3.7 Cooperative Green Procurement Efforts

The final strategy to be considered here is cooperative green procurement. The cooperative approach applies to the development of green procurement programs and to the actual purchase goods and services. Excellent illustrations of the former are collaborative efforts for developing specifications and standards for environmentally preferable products. Developing these specifications is difficult, time-consuming, and expensive. The costs are multiplied when governments replicate the work of other governments. Cooperative approaches avoid this by bringing together several governments to develop and adopt uniform standards and specifications. In one such effort, Massachusetts, Minnesota, King County, Santa Monica, and several other governments developed a national standard for environmentally friendly cleaning products [37]. In another case, the Coalition of Northeastern Governors' (CONEG) Source Reduction Task Force developed model specifications for six separate compost products [38]. In both of these cases, the goal was to create consensus criteria for environmentally preferably products so as to encourage vendors to invest in and market green products acceptable to a large number of government purchasers.

The second form of cooperative green procurement focuses on purchasing. The strategy, in a nutshell, is for public agencies to combine their purchasing power through a cooperative purchasing arrangement. The benefits of these arrangements include lowering unit costs, lowering administrative costs, increasing the volume of green products and services purchased, and establishing common standards and specifications for vendors to follow [36]. Minnesota's Cooperative Purchasing Venture (CPV) is illustrative. As mentioned above, the CPV allows public entity members to purchase goods and services from the state's contracts. The state estimates that members may be able to enjoy cost savings as high as 75%; plus, members have access to over 2200 environmentally preferable products. And, since the state devised the green product specifications, solicited the bids, and awarded the contracts, CPV members save additional time and resources. Vendors of green products likewise benefit as their products are required to meet only one set of specifications that are nonetheless acceptable to hundreds of public entities. Obviously, cooperative strategies have much to offer green procurement.

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Responses

  • leda
    Who do i talk to about purshasing vehicels on state contract?
    8 years ago
  • Bercilac
    How effective are green procurement practices for the US government?
    8 years ago
  • Aleksi Piirto
    Is green procurement initiative of the government in the usa?
    8 years ago

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