Final Guidance on Environmentally Preferable Purchasing for Executive Agencies

I. Does this Apply to Me?

You may be potentially affected by this notice if you are an Executive agency employee responsible for the acquisition and use of products and services. Those who produce and sell products and services for use by the Federal government may also find the information in this notice to be of interest. If you have any questions regarding the applicability of this notice to a particular organization, consult the person listed in the ``FOR FURTHER INFORMATION CONTACT'' section.

II. How Can I Get Additional Information or Copies of this Document or Other Documents?

For the convenience of the reader, the final guidance is published below in its entirety in Unit VII. 1. Electronically. You may also obtain electronic copies of this document and various support documents from the EPA Internet Home Page at www.epa.gov/. On the Home Page select ``Laws and Regulations'' and then look up the entry for this document under the ``Federal Register--Environmental Documents.'' You can also go directly to the ``Federal Register'' listings at www.epa.gov/fedrgstr/. Alternatively, you can go to the Environmentally Preferable Purchasing program's website: www.epa.gov/opptintr/epp. 2. In person. The Agency has established an official record for this action under docket control number OPPTS-00149A. The official record consists of the documents specifically referenced in this action, any public comments received during an applicable comment period, and other information related to this action, including any information claimed as confidential business information (CBI). This official record includes the documents that are physically located in the docket, as well as the documents that are referenced in those documents. The public version of the official record does not include any information claimed as CBI. The public version of the official record, which includes printed, paper versions of any electronic comments submitted during an applicable comment period, is available for inspection in the TSCA Nonconfidential Information Center, North East Mall Rm. B-607, Waterside Mall, 401 M St., SW., Washington, DC. The Center is open from noon to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Center is (202) 260-7099.

III. Introduction

On September 14, 1998, President Clinton signed Executive Order 13101, entitled ``Greening the Government through Waste Prevention, Recycling and Federal Acquisition.'' Section 503 of this Executive Order requires EPA to establish guidance to ``address environmentally preferable purchasing.'' The guidance that is being made available today is designed to help Executive agencies meet their obligations under Executive Order 13101 to identify and purchase environmentally preferable products and services. ``Environmentally preferable'' is defined in section 201 of the Executive Order to mean products or services that have a ``lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose.'' The guidance is intended to draw on the extensive procurement experience of the Executive agencies and on the environmental expertise of EPA and others both within and outside of the government. It provides a broad decision-making framework for environmentally preferable purchasing and is a first step to help Executive agencies systematically integrate environmental preferability into the Federal government's buying decisions.

IV. Background

This Final Guidance on Environmentally Preferable Purchasing is based on EPA's September 1995 Proposed Guidance on the Acquisition of Environmentally Preferable Products and Service and the comments received on that proposal. EPA announced the availability of and sought comment on the Proposed Guidance on the Acquisition of Environmentally Preferable Products and Service on September 29, 1995 (60 FR 50721) (FRL-4760-5). The process EPA used to develop the proposed guidance is described in that Federal Register notice. In addition, lessons and insights from early pilot projects have guided the development of the Final Guidance. Since 1995, a variety of things have occurred that will directly affect the Federal government's environmentally preferable purchasing practices. Foremost are the 1997 revisions to the Federal Acquisition Regulations that incorporate policies for the acquisition of environmentally preferable and energy-efficient products and services. These changes require the consideration of environmental factors in all aspects of Federal acquisition, including acquisition planning (part 7), conducting market surveys (part 10), describing an agency's needs (part 11), evaluating and selecting a vendor (parts 14 and 15), and contract administration (part 42), as well as other provisions. Another milestone is the 1996 enactment of the National Technology Transfer and Advancement Act of 1995 (NTTAA) which requires the Federal government to use consensus-based industry standards when available rather than creating a government-unique standard. The acquisition streamlining reform initiatives have also brought many changes to the way the Federal government purchases products and

services. One example is increased decentralization of the purchasing decision, best exemplified by the meteoric increase in credit card use by Federal agency personnel. The number of card holders increased from 10,000 in 1989 to 250,000 in 1996 with the dollar volume increasing from $460,000 to close to $3 billion during the same time period. This trend highlights the importance of reaching out to those beyond the acquisition community with the environmentally preferable purchasing message. Another trend is the increased interest at all levels of government--local, state and foreign--in using the government's purchasing power as a policy tool to drive environmental improvement. This trend will likely accelerate the anticipated spill-over effect of environmentally preferable purchasing practices. Beyond the governments' interest, other large institutional purchasers--non- profits and individual companies--are also beginning to include environmental factors in their buying decisions.

V. Lessions Learned

In the years since the Proposed Guidance was first issued, a number of pilot projects were initiated to demonstrate how EPA's Proposed Guidance could be applied to specific product categories. Though limited in number, these projects have provided important insights into the development of the Final Guidance as well as the direction of EPA's Environmentally Preferable Purchasing program. First, it is important to have the participation of both the environmental and the acquisition/procurement personnel. The acquisition of environmentally preferable products and services in the Federal government context involves both defining what is environmentally preferable for a given product or service and ensuring that the procurement process encourages the purchases of these products. Innovative approaches that leverage the expertise of the environmental and procurement experts is essential to accomplishing these tasks and institutionalizing environmentally preferable purchasing practices. Second, on a very positive note, early pilots have shown that vendors understand that providing a broad range of environmental information is an important part of doing business with the government and that it can serve as a competitive advantage. Generally speaking, however, information about environmental performance of products and services, particularly along the various life cycle stages, and easy- to-use tools to assess environmental performance remain scarce, limiting the wide-spread adoption of environmentally preferable purchasing. This is likely to change as Executive agencies begin to implement the changes to the Federal Acquisition Regulations and as agencies begin to use information and technical expertise of non- governmental entities. Lastly, early pilots indicate that there is not a single, ``one size fits all,'' approach to incorporate environmental preferability into Federal acquisition. Using common sense, we need to tailor our approach and level of analysis to fit the complexity of the product and service categories being purchased. Much progress has been made since Executive Order 12873 was issued in October 1993. A number of pilot projects have been implemented by key purchasing agencies that have provided valuable insights and lessons on ways to integrate environmental considerations into the Federal procurement process. These pilots have helped to identify gaps in information and tools. Future pilots will be instrumental in guiding both EPA's and other Executive agencies' efforts in environmentally preferable purchasing. As EPA and the other agencies move forward, the debate about the appropriate approaches and goals will likely continue. This is desirable given the dynamic nature of the issue. Based on feedback from all stakeholders, EPA will continue to test a variety of approaches and develop and refine tools to allow agencies to more readily apply the concepts of environmental preferability in government purchasing decisions.

VI. Major Changes to the Guidance

This section describes some of the key changes made to the 1995 Proposed Guidance. EPA has also prepared a more detailed Response to Comment document, which has been included in the public record for this guidance.

A. Guidance Framework

The Guidance framework remains largely unchanged and includes an introduction (Section I), intended audience (Section II), approach (Section III), a set of guiding principles (Section IV), suggested steps for Executive agency implementation (Section V), and appendices (Section VII). A new section, Section VI, lists available resources and tools related to environmentally preferable purchasing.

B. Guiding Principles

A number of changes have been made to the guiding principles, including the addition of a new principle and the merging of a number of principles. As a result, the Final Guidance now has five, rather than seven, guiding principles. Taken together, the principles are intended to provide a broad guide to help Executive agency purchasers address environmental preferability in acquisition of products and services. Specifically, the following changes have been made: 1. A new principle on product safety, price, environmental considerations, performance and availability has been added as Principle #1 and reads:

Environmental considerations should become part of normal purchasing practice consistent with such traditional factors as product safety, price, performance, and availability.

This was in response to a number of comments requesting more emphasis be placed on the point that the addition of environment is not in lieu of traditional purchasing factors. Although the original proposal noted this, the addition of this new principle should send a clearer message on the importance of putting environmental considerations in the context of other purchasing factors.

2. The guiding principles on life cycle and multiple attributes have been collapsed into one principle (Principle #3) and reads:

A product's or service's environmental preferability is a function of multiple attributes from a life cycle perspective.

This change is based on comments and also EPA's strong belief that the two concepts are integral in determining environmental preferability. The discussion that follows the guiding principle has also been modified to reflect that although the determination of environmental preferability should be based on multiple attributes, the purchasing decision may at times be based on a single attribute. 3. The guiding principles on impacts and local conditions have been modified and collapsed into one principle (Principle #4) and reads:

Determining environmental preferability may involve comparing environmental impacts. In comparing environmental impacts, Federal agencies should consider: the reversibility and geographic scale of the environmental impacts, the degree of difference among competing products or services, and the overriding importance of protecting human health.

This change was made to remove the perceived conflict between the two original principles and to provide purchasers with more guidance on how to assess relative impacts. The original principles were intended to convey that, in general, global and irreversible

environmental impacts should be given greater weight in determining preferability than local and rapidly reversible environmental impacts. However, we also recognize that there may be situations in which there are unique mitigating circumstances locally, and in those cases, the purchaser can make the judgement that the local conditions and impacts should be given priority. 4. The principles on competition and product attribute have been revised and a new principle (Principle #5) on environmental information has been added. It reads:

Comprehensive, accurate and meaningful information about the environmental performance of products or services is necessary in order to determine environmental preferability.

This revision was based on lessons from the pilots and reflects the importance of having relevant environmental information for determining environmental preferability. The discussion related to competition which originally appeared under guiding Principle #6 is now captured under guiding Principle #1.

C. Federal Agency Implementation

A number of changes have been made to facilitate Executive agency implementation of environmentally preferable purchasing, including: 1. EPA recommends that Executive agencies look to EPA's list of the top 20 prioritized product categories to focus their pilot projects. The description of this list is included in Section VI of the Final Guidance and the complete list is available on EPA's Environmentally Preferable Purchasing Program's website: www.epa.gov/opptintr. The prioritized list was developed pursuant to Section 503(a) of Executive Order 13101 which states that EPA's guidance ``should be. . .targeted towards products and services that have the most effect.'' 2. In implementing pilot projects, EPA recommends, pursuant to section 503(b)(2) of Executive Order 13101, that agencies use all of the options available to determine environmentally preferable attributes of products and services in pilot projects, including the use of technical expertise of non-governmental entities such as labeling, certification, or standards developing organizations. Additional guidance on the use of these organizations is elaborated in the Office of Federal Environmental Executive and EPA's April 1998 policy letter. The full text of this policy letter has been added as Appendix E. 3. EPA recommends that agencies document their pilot efforts. In order to facilitate this, the Final Guidance includes a sample case study template (Appendix E).

D. Appendices

A number of changes have been made to this section, including: 1. The addition of three new items: i. Sample Policy Directive (Appendix C). ii. Full Text of April 1998 Policy Letter on Non-governmental Entities (Appendix D). iii. Sample Case Study Template (Appendix E). 2. The deletion of the original Appendix D, ``A Summary of the Federal Trade Commission's Guides to the Use of Environmental Marketing Claims.'' The Guides were updated in May 1998 and the information on how to access the most recent Guides is now included in Section VI-- Resources.

VII. Final Guidance on Environmentally Preferable Purchasing for Executive Agencies

For the convenience of the reader, the final guidance is published below in its entirety. BILLING CODE 6560-50-F

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List of Subjects

Environmental protection. Dated: August 13, 1999. Carol M. Browner, Administrator.

[FR Doc. 99-21664 Filed 8-19-99; 8:45 am] BILLING CODE 6560-50-C