The Biden administration’s push for mitigating what it believes is a changing climate, is moving more deeply into procurement. That means contractors selling pretty much everything to the government must start thinking about how to present their products as climate friendly. For more, Federal Drive with Tom Temin spoke to federal sales and marketing consultant Larry Allen.
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Tom Temin: And this climate idea is one of many that seemed to be getting tossed into the procurement criteria mix these days, even for things that never had that type of criteria. What do you see going on?
Larry Allen: Tom, I think what we’re seeing here is climate friendly acquisition, green procurement, whatever other name in this neck of the woods you want to call it, is a top priority for the Biden administration. They’ve been very clear that as far as acquisition policy goes, climate change, climate friendly acquisition, is a top three or four priority for them. And you’re right, it’s really going to transcend everything that the government does from some of the more obvious targets, like turning the federal fleet into a 100%, or nearly 100% electric fleet of cars and trucks to green buildings and smart use of building space, probably reduced building space overall. But it goes beyond that, Tom, it goes into everyday contractor supply chains, whether you’re providing professional services, and government’s gonna want to know what you’re doing to be green friendly in your business, but also, what your partners are doing, what your subcontractors are doing to be green friendly. And obviously, if you’re a product supplier, how are those products featuring green features? Are there things about them that are energy efficient, that can be promoted? Is there recycling available at the end of life? Real cradle to grave type analysis of the eco friendliness of what contractors are providing.
Tom Temin: And so what does that going to entail, especially on the ends of product vendors? Suppose I’m selling, I’m just making this up, but pencils to the government – will pencils have wood and graphite and metal and rubber in the eraser and paint and ink on the stamped name on the pencil, — there’s a lot of commodities that go into a pencil. And I think there’s been a book about the supply chain for the pencil and how much industrial activity is required to result in a 25 cent pencil. So do you feel contractors are going to have to look into their own supply chains and into their own manufacturing practices, say we have a new energy efficient generator for our building, or whatever the case is where we stamp out pencils. That kind of thing?
Larry Allen: Tom, I think it’s absolutely going to get to that degree of specificity. We’ve already seen the General Services Administration proactively promote the eco friendliness of products that they have on their website. Even though that’s not necessarily a criteria for contract award, GSA has taken the initiative to sell sort products on GSA Advantage in terms of their eco friendliness, and also, by the way for their socio economic status. So if you’re a small disadvantaged Business, you get to be seen first as well. But as far as the green supply chain goes, yes, I think that the government’s going to want to know how much energy went into creating that pencil. What was the waste? Are you manufacturing the pencil in such a way that you can recycle the byproducts of that at the end of the pencil life? What can be broken down and recycled? Really, what’s the true cost, environmentally of that production?
Tom Temin: So how does that get translated? I’m kind of asking this rhetorically, but contracting officers make individual decisions. And right now, there’s no formal language, either in the FAR that I’m aware of, or in standard contract clauses. So if the government wants that type of criteria to go into procurement, they’ve got a lot of groundwork to do, which could take years.
Larry Allen: A lot of groundwork to do Tom, and a lot of holes in the commercial sector. And by that, I mean, not every product has an industry standard for for greenness or environmental friendliness. Some do, furniture for example, they can have testing, they can show their environmental friendliness for certain factors. But a whole host of other commercial items that the government buys may only have limited data on what a green product might look like and very few standard definitions of what that actually means. So we’re talking about contractors having to supply additional data to contracting officers. Contracting officers who aren’t trained in being able to discern the eco friendliness of what’s being provided. They also have other things to do in terms of awarding contracts. The gathering and providing the additional data is obviously going to be burden on contractors. But it’s also almost like they’re going to have to make the case or the contracting officer says, hey this is why we feel our products and solutions are eco friendly, and will have a positive impact on climate change. Don’t misconstrue this, I’m as climate friendly as the next person, we all have to live on the planet. But we have to also come, I think, put some of this in a little bit of perspective, in terms of the added cost and burden this is going to put on the acquisition system.
Tom Temin: I’m already holding my breath, half the time to lower my Co2 output. We’re speaking to Larry Allen, president of Allen Federal Business Partners. And you were at the Coalition for Federal Procurement conference, your old stomping ground, run now by Roger Waldron. And there was a federal official that said, if you don’t want to do all this, maybe you should not be in federal contracting, which didn’t sound exactly to your ears like lowering the barriers to federal contracting.
Larry Allen: It’s not lowering the barriers to market entry, Tom, but it is refreshingly candid. And really, I think that he was saying what an awful lot of people are thinking and a lot of contractors have been experiencing, we hear a lot of rhetoric about lowering barriers to market entry, and the government wanting to make this particularly a friendly marketplace for smaller businesses. Small Disadvantaged Business participation is another top three issue for the Biden administration. At the same time, we have more green friendly requirements. But we also have things like CMMC, like Section 889, where did your telecommunications come from? We have a whole host of things we’re going to be changing around. Made in America rules, how’s that going to affect the Buy American Act, how’s that going to affect you as a contractor. We also want to look at your supply chain, and we want to have visibility, to make sure that you can provide the us, the government, the things you say you can provide, particularly in a surge capacity. All of these are special government only requirements, Tom, requirements that inherently raised the bar to market entry. So I think it’s more accurate to say that the government has basically three categories of contractors. One, they have the very large companies that they know they can’t live without. They are an integral part of the government business integral part of the government’s supply chain, and they perform services that the government can’t provide for itself. The second group was favored small businesses, whether it’s small, disadvantaged, veteran owned small business, whatever it is, these are somewhat protected small businesses, but ironically, only somewhat, because not all of the requirements are they exempt from/ The small businesses still have to follow a lot of the rules that everybody else does, but they’re somewhat protected. And the third group is this larger group that somewhere in the middle Tom, that may not always have the wherewithal to adopt to the new rules, but they don’t have the small business size status that protects them from all of the rules and all the competition – they’re just kind of there. And I think the government really says, look, you all are going to be pushed to the sidelines. We need to do business with these very large companies. We want to do business with small businesses. Everybody else is kind of out there to fend for themselves. And I think really, when you strip away what the representative from GSA said last week, that’s what he was saying. And again, whether you like it or not, you can’t say it wasn’t direct and it wasn’t honest.
Tom Temin: Be green or be square I guess. Larry Allen is president of Allen Federal Business Partners. Thanks so much.
Larry Allen: Tom, thank you and I wish your listeners happy selling.