From Policy to Compliance: Federal Energy Efficient Product Procurement

Federal buyers are required to purchase energy-efficient products in an effort to minimize energy use in the federal sector, save the federal government money, and spur market development of efficient products. The Federal Energy Management Program (FEMP)’s Energy Efficient Product Procurement (EEPP) Program helps federal agencies comply with the requirement to purchase energy-efficient products by providing technical assistance and guidance and setting efficiency requirements for certain product categories. Past studies have estimated the savings potential of purchasing energy-efficient products at over $500 million per year in energy costs across federal agencies. Despite the strong policy support for EEPP and resources available, energy-efficient product purchasing operates within complex decision-making processes and operational structures; implementation challenges exist that may hinder agencies’ ability to comply with purchasing requirements. The shift to purchasing green products, including energy-efficient products, relies on “buy in” from a variety of potential actors throughout different purchasing pathways. Challenges may be especially high for EEPP relative to other sustainable acquisition programs given that efficient products frequently have a higher first cost than non-efficient ones, which may be perceived as a conflict with fiscal responsibility, or more simply problematic for agency personnel trying to stretch limited budgets. Federal buyers may also face challenges in determining whether a given product is subject to EEPP requirements.

Previous analysis on agency compliance with EEPP, conducted by the Alliance to Save Energy (ASE), shows that federal agencies are getting better at purchasing energy-efficient products. ASE conducted two reviews of relevant solicitations for product and service contracts listed on Federal Business Opportunities (FBO), the centralized website where federal agencies are required to post procurements greater than $25,000. In 2010, ASE estimated a compliance rate of 46% in 2010, up from an estimate of 12% in 2008.

Our work updates and expands on ASE’s 2010 analysis to gauge agency compliance with EEPP requirements. We analyzed a dataset of 765 solicitations posted to FBO during the federal fiscal year 2015 and developed two metrics to evaluate compliance: legal and effective. Legal compliance measures whether a solicitation has met a minimum standard of compliance with EEPP mandates, while effective compliance is a more subjective measure that goes beyond legal compliance to assess the likelihood of a given solicitation’s leading to a compliant purchase. Our results reveal:

• There is significant missed opportunity for achieving energy savings in the federal government
• Federal compliance with EEPP is below 50%, suggesting that strong policy is insufficient to ensure compliance
• The variation within both agency-level and office-level compliance highlights that there are institutional features that improve or hinder the ability to comply
• If a product category is covered by ENERGY STAR it is more likely that the agency will receive an efficient product than if the product category is covered exclusively by FEMP
• Effective compliance is achieved differently for various solicitation types, and messaging and materials directed at federal agencies should address these differences

Energy-efficient product procurement in particular and sustainable acquisition more generally are two of many federal goals competing for time and resources. Efforts to understand what structural factors can easily improve compliance without additional burdens on staff will be critical in improving compliance. To that end, we intend to continue this research by conducting in-depth interviews with federal contracting officers and other staff to unravel the systems that lead to higher or lower compliance rates. We expect that this analysis and our continued work will be useful to federal organizations providing guidance to agencies and others working to implement sustainability goals within institutions.