Gov Contractors Must Track Emissions or Risk Losing Contracts

by | Jul 15, 2010

Contractors for the federal government that do not track their greenhouse gas (GHG) emissions could risk losing their contracts, according to a report in the Federal Times about new rules by the General Services Administration (GSA).

The new rules are a part of the GSA’s response to an executive order by the Obama administration issued in October which directed federal agencies to find ways to reduce their GHG emissions. Potentially, the new rules could have far-reaching consequences through the entire economy, not just government contractors.

As the country’s single largest buyer, the government has a significant amount of leverage among suppliers across a wide spectrum of sectors, according to the report. The effect is similar to what happened when Wal-Mart announced plans to begin tracking emissions through its supply chain, though on a much larger scale.

Once the new rules go into effect, preference will be given to suppliers that are tracking and reducing their GHG emissions. Third-party accreditation and reductions in supply chain emissions would also be taken into effect when the GSA decides on awarding contracts.

Currently, few companies, including government contractors, track their emissions. Threatening suppliers with the potential loss of lucrative government contracts could create a sea-change among American companies as they try to conform to federal demands for carbon accounting.

The changes could result in significant savings for the government, as 40 percent of efficiency measures and GHG reduction technology can result in cost savings.

For example, government pressure could force companies to substitute inefficient traditional lighting with more advanced technologies, such as Compact Fluorescent Lights (CFLs) and Low Emitting Diodes (LEDs), a move that could result in $20.8 trillion in savings throughout the country’s economy.

Potentially, the new rules could result in a new group of government set-asides for contractors that demonstrate a commitment to reducing GHG emissions, similar to the current system of set-asides for small and minority-owned businesses.

According to the Federal Times report, only 400 companies out of the 600,000 registered government contractors are registered with The Climate Registry, one of the largest carbon tracking organizations in the country.

Vendors are not being asked to report Scope 3 emissions, which would include emissions generated by employee commuting and business travel, but would be limited to only those emissions generated b the company’s own energy and manufacturing needs.

The GSA also said it has begun testing a new energy auditing tool to evaluate the energy efficiency of green building projects. It also recently issued a blanket purchase agreement to Shaw, for purposes of performing audits, reviews and consumption surveys to help the GSA optimize building energy efficiency.

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