On March 30, 2022, the General Services Administration (“GSA”) announcement the first-ever national standards for “clean” concrete and asphalt that apply to all new GSA-funded projects using more than 10 cubic yards of concrete or asphalt. Acting pursuant to guidelines set forth in Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, as well as the February 2022 GSA Information Requests (discussed here and hererespectively), the GSA has published standards for “low embodied carbon” concrete and “environmentally preferable” asphalt. which will be needed “for all GSA projects, whether capital or small, regardless of funding source: paving upgrades, modernizations, new construction, customer-funded projects through BA80 refundable work permits, private sector funded projects such as energy saving performance contracts, and all Bipartisan Infrastructure Act projects.” Specifically:
- For concrete, contractors will be required to provide a product-specific, third-party verified Environmental Product Declaration (“EPD”) verifying the amount of embodied carbon involved in the extraction, transportation and manufacturing of the product. The standard identifies specific limits for allowed embodied carbon based on concrete mix type and strength, which represent a 20% reduction from industry recommended limits.
- For asphaltcontractors will be required to provide a product-specific third-party verified cradle-to-gate EPD affirming the use of at least two environmentally preferable techniques (based on a menu of approved practices specified by the GSA) in processing and asphalt installation.
Under both standards, a waiver can be requested in limited circumstances where the only contractor available within the maximum haul range is a small business that has not yet invested in EPDs, or where the “clean” materials specified by the GSAs are not available. In the event that a waiver is granted, contractors will still be required to provide the GSA with an estimate of the Global Warming Potential (“GWP”) for the product.
This GSA action is part of the first set of enforceable standards to emerge from the Biden administration’s “whole of government” approach to addressing climate change, and, more specifically, its stated intention to leverage the office of procurement in pursuit of its climate change policy objectives. . While much of the recent attention has been focused on higher-profile efforts like the proposed rule recently unveiled by the Securities and Exchange Commission regarding mandatory climate-related disclosures (discussed here) for publicly traded companies, as well as potential FAR and DFARS changes that may require similar and expanded climate disclosure requirements for government contractors (discussed here and here, respectively), these new GSA standards establish a model that can be replicated by a wide range of federal agencies in their procurement activities. More immediately, they are potentially a game-changer for federal construction contractors as the GSA is set to oversee $3.4 billion in Infrastructure Investment and Jobs Act funding. (“IIJA”) for the construction and modernization of land entry points to the country. northern and southern borders. With GSA recently announcing allocating hundreds of millions of dollars in IIJA funding for new Port of Entry projects in Alaska, Arizona, Washington, Minnesota and Vermont, in addition to all other projects on the 370 million square feet laudable standards that the GSA oversees for the federal government, contractors must be prepared to meet these new (and similar) standards.
What remains relatively unclear about the new GSA standards is:
- Will they only appear as requirements included in the statement of work or contract clauses or will they be used as evaluation criteria?
- If the latter, will they be implemented as pass/fail criteria, thus excluding entrepreneurs whose embodied carbon of products is above the prescribed target number, or will they be included as an evaluation criterion for which contractors are scored based on their proposed product but otherwise remain eligible for award based on the other tender evaluation criteria?
- Will the GSA go even further to reserve certain projects for contractors who meet the target goals of preferred embodied carbon concrete or environmentally preferable asphalt?
Finally, additional questions remain about the impact that the implementation of these new standards could have on small businesses that have not yet invested in the calculation of these environmental parameters. This is particularly important given that the White House has also made increasing the participation of disadvantaged small businesses a priority (as discussed here) and GSA recently announced its focus on increasing the participation of disadvantaged small businesses in federal contracts to 21% by fiscal year 2022.
Contractors should closely monitor the implementation of these new GSA standards, as they represent only a small part of the White House’s whole-of-government approach to reducing carbon emissions, and other agencies should also build on this GSA model in other contexts. .