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Session 11: Partnerships: Role of Contractors

Thursday, July 17, 1997
10:45 - 12:00 pm, 1:15 - 2:30 pm

Speakers:

Moderator:


The purpose of the session was to explain how contractors can help the federal government implement environmentally preferable purchasing. Government officials who have worked cooperatively with contractors to identify and purchase products which reduce environmental impact described their experiences.


Speaker 1: Michael Carter, Defense Logistics Agency

In his current role as Environmental Protection Specialist for the Defense Contract Management Command (DCMC), DLA, DoD, Mr. Carter serves as the focal point and authority for environmental issues. His duties at the DCMC Headquarters Complex include: external interface with the Services and (federal, state and local) regulators; internal interface with DCMC functional specialists; environmental support program oversight; and support for the Joint Group on Acquisition Pollution Prevention environmental initiative.

Mr. Carter discussed his work with the Joint Group on Acquisition Pollution Prevention (JG-APP). JG-APP began in September, 1994, when officers from the Air Force, Army, Marine Corps, Navy, and Defense Contract Management Command recognized a need to eliminate duplicate efforts to change military specifications so that they incorporate pollution prevention strategies.

A significant portion of that effort relies on contractors proposing environmentally preferable alternatives to existing procedures or products. Although DOD has always encouraged contractors to suggest such changes, their efforts were often hampered because the changes would have to be introduced, documented, and considered on a case-by-case, contract-by-contract, and service-by-service (Army, Navy, Air Force, Marine, etc.) basis. One of the big problems was that there was very little coordination within organizations and even less between organizations. JG-APP was designed to ease the burden by examining and implementing changes across all contracts and across all organizations simultaneously.

The JG-APP charter was signed on September 14, 1994 and identified four primary objectives:
1) Reduce or eliminate hazardous materials
2) Foster joint service cooperation
3) Provide a single interface to weapon system program managers
4) Provide a bridge to the sustainment community (the people who maintain the equipment)

Mr. Carter explained the six phases in a typical JG-APP project, emphasizing that contractors participate and influence each phase:
1) Identifying the participants and hazardous materials or processes to be examined. These can be suggested by a contractor.

2) Identifying the critical performance requirements for each system. These are used for comparing the environmentally preferable alternatives. If the new product or method meets or exceeds the critical performance requirements and provides and environmental or cost benefit, it can be considered further.

3) Examining the costs. This step begins by determining who will test the new procedures, who will pay for the tests, and which contract vehicle will be used. It might be any of numerous projects by any of the branches of the military.

4) Demonstration/Validation. This phase includes a complete performance and cost assessment of the alternative(s).

5) Single Process Initiative (SPI). This phase is actually comprised of several stages to document the success of the changes and share changes across all contracts and all branches of the military. Any resulting cost savings are shared between the government and the contractor who proposed the change.
SPI Process
Concept paper - contractor (proposal of hypothesis that's been tested)
Evaluates concept paper (management council)
Block changes made (management council must approve)
Equitable adjustments made to contracts

6) Implementation: Once everyone has had the opportunity to review the proposed changes, they are approved as a block change across all contracts and all branches of the military.

One example of a successful JG-APP project saved $6.25 million after subtracting the costs incurred to test and document the alternative procedures.

Mr. Carter also explained that one of the biggest components of the JG-APP program is disseminating the information throughout the Defense Department. They are making good use of the Internet to do so. He encouraged everyone to visit two web sites for additional information. The first is the JG-APP general information web site [http://www.jgpp.com/] Exit Disclaimer.


Speaker 2: Bob Cox, Department of Defense

Mr. Cox is the Repair and Improvements Program Manager for the Pentagon at the Department of Defense. One of his projects is overseeing the repair and maintenance of the Pentagon's parking lot.

In September, 1995, DOD recognized a need to establish a contract to cover the repair and maintenance of the Pentagon parking lot and several other DOD facilities in the Washington, D.C. area. Around that same time there was a Federal Register notice requiring federal agencies to use environmentally preferable products. He called EPA looking for guidance and was told that there wasn't any guidance but that EPA would help him on the project and document his efforts as an EPP case study.

The project had two primary objectives: 1) Fixing the parking lot, and 2) Using a "consumer approach" to incorporate environmentally preferable products. The "consumer approach" meant that DOD, acting in its role as a consumer, would compare existing parking lot renovation products and processes and select those that met performance specifications and included the largest number of environmentally preferable attributes. Furthermore, DOD would rely on the contractor to help identify those attributes. As a result, what was environmentally preferable was determined in a cooperative relationship between industry and an environmentally informed federal consumer (DOD).

Because DOD wanted to encourage the contractor to adopt environmentally preferable purchasing habits, the DOD/EPA workgroup determined that they needed to specify these requirements in the contract.

They followed a six-step process:

  1. Identify all of the products that are used in the project
  2. Identify environmental attributes for each of the products
  3. Conduct a market survey to identify the attributes that are available
  4. Evaluate the products
  5. Incorporate the best attributes into the product specifications contained in the contrac
  6. Provide incentives for the contractor to continue looking for products after contract award

Mr. Cox explained that the best way to usually compare the environmental attributes of competing products would be to conduct a complete life cycle analysis (LCA). Unfortunately, this is too time consuming and expensive. Until LCA becomes feasible, the team has relied on those environmentally preferable attributes that are easily identifiable. In order to get the repair work started in a timely manner, it was impossible to cover them all, so the contract provides the contractor with incentives to continue identifying environmental attributes.

The contract includes a price differential that allows the contractor to earn additional money if they identify, and DOD approves, the use of a product that contains additional environmentally preferable attributes. The contractor is encouraged with what amounts to a bonus to identify and integrate new environmentally preferable products.

According to Mr. Cox, there are several advantages to this approach:

Mr. Cox believes that EPP has a very bright future. Environmentally preferable products are currently required by the FAR and Executive Order 12873. Future contracts will incorporate EPP language and contractors who adopt EPP methodologies will begin applying them in non-governmental work.

DOD's innovative approach affects contractors in several ways: It improves their environmentally preferable purchasing practices It encourages them to use environmentally preferable products It encourages industry to develop additional or improved environmentally preferable products

The role of manufacturers is also affected:


Speaker 3: Jim Foley, EPA Region 2

Since 1983, Mr. Foley has served as the Chief of the FAMB in the New York Regional Office. In this position, he has been involved in several pilot projects to introduce environmentally preferable products. His efforts to address indoor air quality issues was reported on last fall at a conference sponsored by the President's Council on Sustainable Development. Jim is the recipient of the EPA Distinguished Service Award and the Lee M. Thomas Excellence in Management Award.

Currently, Mr. Foley oversees EPA's new regional office. The Region worked with GSA to acquire space in a 34 story building in lower New York. The Region was very aware of the need to implement Executive Order 12856, which outlines federal agency responsibilities to minimize their environmental impacts, including those pertaining to energy and water conservation and other "green building" issues. As a result, EPA's environmental response team conducted various tests to minimize the environmental impact of the new office space. They were particularly concerned with indoor-air quality (IAQ) issues. In fact, they took samples of many of the materials used in the building (carpeting, furniture, wall coverings, etc.) and placed them in a chamber to measure any substances that might pose a risk to the IAQ.

Despite these efforts, after building occupancy, many employees began complaining about the quality of the air. They reported a variety of symptoms that generally disappeared when they left the building. EPA officials at first dismissed the problems because of the extensive IAQ testing that had been done prior to move-in, but when the symptoms persisted, EPA began investigating the cleaning products that were being used. EPA contacted GSA, who managed the cleaning contract, and asked to investigate the problem. GSA's cleaning contractor contacted several cleaning product manufacturers and selected one product from Rochster Midland that they felt might eliminate the IAQ concerns. They obtained permission from GSA and EPA to pilot test the new product on three floors of the building. Immediately after beginning use of the new product, the symptoms subsided on those floors on which it was being used. EPA and GSA quickly asked the contractor to use the product on all of the floors.

According to Mr. Foley, this demonstrates that contractors can be relied upon to help the government select environmentally preferable products. In this case, it was the contractor who did all of the investigative work and they did it voluntarily because they didn't want to jeopardize their government contract. Mr. Foley suggested that government employees should establish environmental performance standards because contractors will respond and provide environmentally superior products.

Mr. Foley was recognized for this innovative EPP project with a Closing the Circle award.


Questions & Answers:

Q: There seems to be a lot of information available on environmentally preferable products,but where can we get that information? Is anyone compiling it in a central spot?
A: (Cox) EPA's EPP program is beginning to compile a lot of it and they are creating case studies to document successes and share information. The construction industry has several resources available. NIST and the Forest Service both have publicly available databases. I'm sure that there are others for other product categories.

Q: How do we get put on the government's list of environmentally preferable products?
A: (Cox) There isn't a list. The government won't say who's better because the definition changes depending on the need.

Q: Mr. Cox, how do I obtain copies of your test results?
A: (Cox) Well, there aren't really any test results, but the EPP program is documenting DOD's efforts in a case study. I'm not sure when it will be ready, but it will be available from EPA.

Q: Why can't we get test results from the EPA/GSA cleaning product study in New York?
A: (Foley) It wasn't a scientific study. It was simply initiated by the cleaning contractor to address the IAQ concerns expressed by the tenant. In this case the tenant was the EPA. Before EPA could release results of that sort, there would have to be a formal study that included more than just a subset of the market.

Q: Eric Friedman, Commonwealth of Massachusetts - How did you verify that the product from Rochester Midland was, indeed, environmentally preferable, and how did you promote competition among different contractors?
A: (Eric Friedman) Contractor selected product. More difficult in government contracts because can't identify brands. Government must promote competition. GSA made assumption based on information provided by product/contractor that had some environmentally preferable supporting data. GSA did not conduct comprehensive market research.

Q: Stephen Ashkin, Rochester Midland - Is there a way to avoid suppliers providing contractor support to help market their product and having government go out with RFP for lowest cost anyway after they've benefited from the contractor support? This causes suppliers to be reluctant to provide government any support with respect to the process.
A: (Stephen Ashkin) No. There is no way to avoid this.
A: (Comment from Eric Friedman) The way we avoid that in Massachusetts is to select contractor on best value for the best cost vs. just best cost. Best value involves other criteria besides price, e.g. training.

Q: Is there anyway to circumvent the challenges that vendors face in introducing new products to the government? (i.e., must find three competitive bids. If no other vendor supplies your product, cannot offer it to the government, because won't write specs unless at least two other competitors).
A: (Comment from Bob Cox, DOD) Tried to conduct a market survey themselves and found it to be too time and resource intensive. They found that they did not have the expertise to do it efficiently or effectively. They then decided to have a contractor do it.

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