Government Calls for Contractors to Innovate Green Building Technology and Comment on Minimizing Climate Risk

Litigation Alert
11.09.2021

The federal government recently took two notable steps towards achieving the Biden administration's stated goals of reducing climate pollution, increasing resilience to the impact of climate change, minimizing climate-related financial risks, and spurring economic growth through the innovation of clean energy technologies and infrastructure. 

  • First, the General Services Administration (GSA), in collaboration with the Department of Energy (DOE), issued a Request for Information (RFI) for technologies that help reduce greenhouse gas emissions of commercial buildings with a deadline of December 7, 2021. 
  • Second, the Federal Acquisition Regulation (FAR) Council issued an advance notice of proposed rulemaking aimed at ensuring that "major Federal agency procurements minimize the risk of climate change" and invited public comment on or before December 14, 2021. 

GSA's and DOE's RFI for New Technology

On January 27, 2021, President Biden signed Executive Order 14008 on Tackling the Climate Crisis at Home and Abroad, which commits to putting the United States on a path to net-zero emissions by 2050. In furtherance of this goal, the RFI invites technology manufacturers and industry members to submit information on next-generation technology solutions that have the potential for equitable and wide adoption in the U.S. marketplace. The technologies will be evaluated for inclusion in GSA's "Green Proving Ground (GPG) program (for federally owned facilities) and voluntary partnership programs facilitated by DOE (for privately owned facilities), or both." The GPG and DOE's Office of Energy Efficiency and Renewable Energy (EERE) both aim to provide actionable data to transform the market for sustainable, cost-effective, high-impact building technologies. Only technologies that are "ready for evaluation in occupied, operational buildings will be considered."   

The RFI focuses on three categories of technologies:

  • High-Performance/Low-Carbon Building Technologies or Solutions 
    • Electrification of major loads traditionally powered by carbon generating power
    • Large scale heat pumps appropriate for commercial retrofit applications
    • Retrofit technologies to capture and manage waste heat
    • Innovate building envelope retrofits solutions
  • On-Site Energy Generation and Storage Systems 
    • High-efficiency photovoltaics
    • Innovative solutions to better integrate photovoltaic and storage into building management systems
    • Novel solar thermal and geothermal systems 
    • Non-building mounted on-site distributed wind
    • Hydrogen fuel cell technologies on-site power generation
  • Greenhouse Gas or Carbon Reduction 
    • Technologies that use next-generation, low, or no GWP refrigerants
    • On-site carbon capture technologies for fuel-fired processes  

Information submitted must show "measurable success criteria at the technology and whole building level that, where applicable":

  • Reduce greenhouse gas emissions
  • Reduce primary energy (including electricity and fuel)
  • Enable on-site energy generation
  • Achieve reasonable simple payback periods 
  • Demonstrate novel financing approaches

DOE and GSA will fund third-party measurement and verification of the technology selected for validation at host site locations. Companies that develop innovative green building technology should consider taking advantage of the opportunity created by this RFI and submit information about their technologies. Industry participation is critical for developing standards and expectations for procuring green building technologies with a goal of net-zero emissions. Additionally, contractors can use this RFI as an opportunity to market their unique, green-focused building technologies and bolster future opportunities for contracting based on these technologies. 

There will be an information session on November 10, 2021, hosted by representatives from GSA and DOE. The deadline for submitting responses to the RFI is December 7, 2021. Interested vendors can find the Frequently Asked Questions published by GSA and DOE here and the online response form here.  

FAR Council's Advanced Notice of Public Rulemaking

On May 20, 2021, President Biden signed Executive Order 14030 on Climate Related Financial Risk, which recognizes that "[t]he intensifying impacts of climate change present physical risk to assets, publicly traded securities, private investments, and companies," as well as "transition risk" to workers and companies as industries shift away from carbon-centric energy sources and industrial processes. Section 5(b)(ii) of this executive order directs the FAR Council, in consultation with other agencies, to consider amending the FAR to "ensure that major Federal agency procurements minimize the risk of climate change, including requiring the social cost of greenhouse gas emissions to be considered in procurement decisions and, where appropriate and feasible, give preference to bids and proposals from suppliers with a lower social cost of greenhouse gas emissions." Section 5(a) of Executive Order 13990 on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis defines "social cost" as the "estimate[] of the monetized damages associated with incremental increases in greenhouse gas emissions."

In implementation of the president's directive, the FAR Council as now requested public comments on the inclusion of greenhouse emissions information in procurements and the use of the federal procurement process to minimize the risk of climate change. Respondents are encouraged to provide feedback on the following questions:

  • How can greenhouse gas emissions, including the social cost, best be qualitatively and quantitatively considered in federal procurement decisions and how might this vary across different sectors?
  • What are usable, respected methodologies to measure greenhouse gas emissions over the lifecycle of the products procured or the services performed?
  • How can procurement and program officials better incorporate and mitigate climate-related financial risk and how might the federal government consider and minimize climate related financial risks through procurement decisions?
  • How would or does your organization provide greenhouse gas emission data for proposals and/or contract performance?
  • How might the federal government best standardize greenhouse gas emission reporting methods and how might the government verify greenhouse gas emissions reporting?
  • How might the federal government give preference to bids and proposals from suppliers, both domestic and overseas, to achieve reductions in greenhouse gas emissions or reduce the social cost of greenhouse gas emissions most effectively?
  • How might the federal government consider commitments by suppliers to reduce or mitigate greenhouse gas emissions?
  • What impact would consideration of the social cost of greenhouse gases in procurement decisions have on small businesses, including small disadvantaged businesses, women-owned small businesses, service-disabled veteran-owned small businesses, and Historically Underutilized Business Zone (HUBZone) small businesses and how should the FAR Council best align this objective with efforts to ensure opportunity for small businesses?

Contactors should consider responding to the questions posed by the FAR Council. The questions signal that contractors may soon need to provide additional certifications regarding their current emissions practices and monitoring. Such certifications would open the door for potential enforcement issues under the False Claims Act and could expose contractors to additional liability, especially as emissions reporting standards are still being developed. Additionally, contractors should begin to consider how a governmental preference for bids and proposals from suppliers with a lower social cost of greenhouse gas emissions may impact their business and the competitiveness of the services that they offer to the government. The deadline for written comments is December 14, 2021. 

Conclusion

The federal government is taking steps to combat the growing climate crisis and utilizing the federal procurement system as a mechanism for achieving that goal. While the executive orders do not require any immediate changes for contractors, they signal a shift in priorities for federal procurement criteria and may indicate that contractors should consider the role of environmentally conscious practices in their business if they do not already. We will continue to monitor and report on the developments in climate-centric procurement practices. In the meantime, if you have questions about the recent executive orders and potential responses to the RFI or request for public comment, please contact one of the Miller & Chevalier attorneys listed below:

Elizabeth J. Cappiello, ecappiello@milchev.com, 202-626-5975

Jason N. Workmaster, jworkmaster@milchev.com, 202-626-5893

Sarah Barney, sbarney@milchev.com, 202-626-5920


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