Insights

On February 4, 2025, U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin announced the agency’s Powering the Great American Comeback Initiative, signaling five pillars that will guide EPA’s work in the short term, which are summarized below:

Mandatory climate disclosures for US federal contractors are officially off the table—at least, for the foreseeable future.  On January 10, 2025, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration announced that they are withdrawing a proposed rule, “Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk,” which would have required thousands of federal contractors to inventory and publicly disclose their Scope 1 and Scope 2 greenhouse gas (GHG) emissions and would also have required  “major” contractors to also establish and validate GHG emission-reduction targets tailored to the goals of the Paris Agreement.  The proposed rule, discussed in further detail here, was introduced in November 2022 and resulted in thousands of public comments from the government contractor community and beyond. 

On June 6, 2024, the General Services Administration (GSA) issued a final rule seeking to minimize the use of single-use plastic (SUP) packaging materials in goods procured through the Federal Supply Schedules (FSS).  Rather than instituting an outright ban on SUP packaging, GSA opted to incentivize FSS contractors to offer SUP-free products through providing a special icon in GSA Advantage for FSS contractors self-certifying that their products are SUP-free.  The final rule explains that the SUP-free icon is intended to act “as an important discriminator when buyers are making purchasing decisions” so that FSS contractors that adopt this voluntary measure will become more marketable in the federal procurement space.  While application of the final rule is limited to purchases from the FSS, GSA believes that the final rule will “also create positive spillovers as non-FSS contracting firms adopt similar policies to compete with FSS contractors in non-FSS markets.”  GSA also explained that the final rule is an “initial step” in providing more sustainable packaging and that the goal is to encourage other federal agencies to eventually adopt these practices into other government contracts.  Importantly, GSA will rely on self-certification that identified products are SUP-free and will not require any third-party verification, as the increased regulatory burden could discourage participation of small businesses.  The final rule is effective starting July 8, 2024.

During the month of April, the Biden administration has continued to leverage federal procurement in pursuit of ambitious environmental sustainability policy goals.  The most recent round of new regulations and initiatives finds the administration seeking to strengthen purchasing mandates of sustainable goods and services, as well as laying the groundwork for significant restrictions on the federal procurement of products containing per- and polyfluoroalkyl substances (PFAS). 

A wave of recent changes in federal and state law pertaining to PFAS chemicals is likely to present both immediate and long-term challenges to the government contracting community. At the federal level, contractors that import products, parts, packaging, equipment or other articles with components that contain PFAS must confront new and extensive regulatory reporting requirements relating to such imports going back to 2011, and they must do so by May 2025. At the state level, a growing list of states are enacting total bans on the sale and distribution of such products and components. On top of this flurry of environmental regulatory activity, the Biden Administration continues to direct federal agencies to develop procurement strategies that prioritize the purchase of PFAS-free articles as part the Administration’s broader effort to leverage the federal procurement function in pursuit of climate and sustainability policy objectives.

Front of mind for many federal contractors is the proposed FAR rule that would make federal contract awards contingent upon meeting mandatory greenhouse gas (GHG) emissions requirements. But a provision in the recently enacted National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2024 scales back the reach of that potential rule on Department of Defense (DoD) contracts.

On September 21, 2023, the White House directed federal agencies to incorporate interim Social Cost of Greenhouse Gases (SC-GHG) estimates into a wide range of federal agency actions, including each agency’s procurement function.  This most recent direction builds upon the Administration’s ongoing and wide-reaching effort (examples discussed here and here) to leverage federal procurement spending in pursuit of climate change and sustainability policy objectives.  The hallmark of that effort to date had been a proposed rule that would, if finalized, require thousands of federal contractors to inventory, publicly disclose, and, in some cases, seek reductions in GHG emissions (see our prior discussion here).  However, the White House’s incorporation of SC-GHG into the federal procurement process has the potential to be just as significant to the contracting community by providing a cost metric (in dollars) needed for contracting agencies to evaluate and confer a preference on bids and contractors with lower GHG emission profiles.

More than 750 days ago, President Biden nominated David M. Uhlmann to serve as the head of the U.S. Environmental Protection Agency’s Office of Enforcement and Compliance Assurance – basically, to serve as EPA’s top cop. But the nomination stalled with the Senate Environment and Public Works Committee deadlocking last year, until finally, on July 20, 2023, the U.S. Senate confirmed his nomination in a 53-46 bipartisan vote. Now, Uhlmann will head the EPA’s federal criminal, civil, and administrative enforcement of federal environmental laws, focusing on his publicly announced goal of prosecuting those entities believed to be the primary cause of pollution hazards, while also “ensuring that companies who act with ethics and integrity are not at a competitive disadvantage with those who flout the law” – a statement he made during his September 2021 congressional testimony.[1]

On March 8, 2023, the Biden Administration announced a further opportunity for companies to take advantage of significant federal funding intended to promote clean manufacturing and reduce greenhouse gas emissions in federal procurement.  In line with the Biden Administration’s push to implement a clean energy economy (as we have previously covered, for example, here and here), the Department of Energy (DOE) will provide $6 billion in grants through the new Industrial Demonstrations Program to “accelerate decarbonization projects in energy-intensive industries and provide American manufacturers a competitive advantage in the emerging global clean energy economy.”  Funding for these grants will come from the recently passed Infrastructure Investment and Jobs Act and Inflation Reduction Act.

On December 23, 2022, the Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”) extended the comment period on the proposed rule, “Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk,” from January 13, 2023 to February 13, 2023.  As we summarized previously, the proposed rule would, if finalized, require thousands of federal contractors to inventory and publicly disclose their Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions, while further requiring “major” contractors to also establish and validate GHG emission-reduction targets tailored to the goals of the Paris Agreement.

In a major and largely unprecedented development for federal contractors, the White House announced on November 10, 2022 that the FAR Council will publish early next week a proposed rule that would, if finalized, require many federal contractors receiving more than $7.5 million in annual federal contracts to inventory and publicly disclose Scope 1 and Scope 2 greenhouse gas (GHG) emissions on an annual basis.  Contractors deemed “major”—those that receive annual federal contracts in excess of $50 million—would be further required to disclose annually their Scope 3 GHG emissions and climate-related financial risk assessment process.  Beyond disclosures, and perhaps more significantly, major contractors would also be required to set emission-reduction targets to meet the goals of the Paris Agreement, and have those targets validated by the Science Based Targets Initiative (SBTi). This last element of the proposal is a notable departure—and escalation—from similar pending proposals from the U.S. Securities and Exchange Commission, which only propose to require GHG disclosures from regulated companies and funds, not substantive goals or changes.

On October 4, 2022, the General Services Administration (“GSA”) published a Request for Information (“RFI”), seeking information “about the availability of domestically manufactured, locally sourced low-carbon construction materials” for governmentwide construction procurement.  Significantly, the results of the RFI are expected to help inform how the GSA will spend the $2.15 billion appropriated through Section 60503 of the Inflation Reduction Act (“IRA”) to “acquire and install materials and products for use in the construction or alteration of buildings” under the GSA’s jurisdiction “that have substantially lower levels of embodied greenhouse gas emissions associated with all relevant stages of production, use, and disposal as compared to estimated industry averages of similar materials or products[.]”

On August 31, 2022, the White House Council on Environmental Quality (“CEQ”) released instructions to federal agencies for implementing Executive Order (“EO”) 14057 Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability.  As we have covered previously, EO 14057 identified ambitious sustainability goals for federal agencies, including:

On July 7, 2022, the General Services Administration (“GSA”) published an Advance Notice of Proposed Rulemaking (“ANPR”) seeking public comment on revising GSA policies and procedures to reduce single-use plastics in purchased products and their packing and shipping materials.  GSA is acting in furtherance of the directives set forth in Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability (discussed here), which, among other things, directed GSA to use federal procurement policy as a way to support a recycled content market.  Thus, for purchases under the Federal Supply Schedule program, as well as GSA’s construction, concession, and facility maintenance contracts, GSA seeks to reduce reliance on single-use plastics and move toward what the Administration considers to be “environmentally preferable” materials.

On June 6, 2022, President Biden issued a White House Fact Sheet (“Fact Sheet”) outlining President Biden’s “Bold Executive Action to Spur Domestic Clean Energy Manufacturing” along with five related Defense Production Act (“DPA”) Presidential Determinations[1] (“Presidential Determinations”) and a Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty-Free Importation of Solar Cells and Module from Southeast Asia (the “Declaration”).  The Fact Sheet states the President is (1) authorizing use of the DPA to accelerate domestic production of clean energy technologies; (2) encouraging domestic solar manufacturing capacity through the use of master supply agreements with enhanced domestic preferences; and (3) creating a two-year trade regulation bridge as domestic manufacturing for solar products scales up.  The White House stated that these actions are being taken to lower energy costs, reduce risks to the power grid, and mitigate climate change.  The Department of Energy (“DOE”) also released a statement on June 6 about the DPA Presidential Determinations which describes DOE’s concerns with regard to each material or technology for which a determination was issued.  The statements made by the White House and DOE also make clear that these actions to employ the DPA are part of the Administration’s broader “all of government” approach to addressing Environmental Justice, with the intention to “strongly encourage projects with environmental justice outcomes that empower the clean energy transition in low income communities historically overburdened by legacy pollution.”

The U.S. Department of Justice (“DOJ”) and the U.S. Environmental Protection Agency (“EPA”) released a comprehensive strategy detailing how both agencies plan to secure environmental justice through a first of its kind nationwide environmental justice (“EJ”) enforcement strategy. This plan comes a little over a year after President Biden’s Executive Order, 14008, Tackling the Climate Crisis at Home and Abroad, instructed both EPA and DOJ to work together to develop an environmental justice approach to “provide timely remedies for systemic environmental violations and contaminations.” And the time for the long-delayed Senate confirmation of David Uhlmann to lead EPA’s Office of Compliance and Enforcement Assurance (“OECA”) now appears imminent.  As a consequence, regulated entities whose operations pose the potential of impacting vulnerable communities should be prepared for increased federal enforcement scrutiny.  

In another significant development for federal contractors watching as the federal government seeks to broaden its effort to leverage procurement policy to address climate change, the FAR Council, on April 13, 2022, agreed to move forward with drafting a proposed FAR amendment that could mandate public disclosure of greenhouse gas (GHG) emissions and climate related financial risks for major federal contractors.

On April 20, the Biden Administration published final changes to the rules governing how federal agencies consider the environmental impacts of their proposed actions, returning to previous standards that required consideration of indirect and cumulative effects of a proposed action. Although the rule changes may appear minimal, encompassing modifications to two specific regulatory subsections and updates to two definitions, the changes could be significant in how agencies consider impacts on environmental justice communities or effects of climate change from proposed federal actions, including federal agency authorizations and approvals for energy, transportation, and other infrastructure projects. 

On March 30, 2022, the General Services Administration (“GSA”) announced 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 in furtherance of the directives set forth in Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, together with the GSA’s February 2022 requests for information (discussed here and here, respectively), GSA issued standards for “low embodied carbon” concrete and “environmentally preferable” asphalt that will be required “for all GSA projects, both capital and small, regardless of funding source: paving upgrades, modernizations, new construction, customer-funded projects through BA80 Reimbursable Work Authorizations, privately-financed projects such as Energy Savings Performance Contracts, and all Bipartisan Infrastructure Law projects.” Specifically:

The General Services Administration (GSA) published today two Requests for Information (RFIs) soliciting input on the availability and barriers to production of “low embodied carbon concrete mixes” and “environmentally-preferable asphalt mixes” for upcoming infrastructure projects at ports of entry along the U.S. northern and southern borders.  These actions build upon the December 8, 2021 Executive Order 14057, “Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability,” discussed here, which directed GSA, among other things, to use federal procurement policy as a way to increase the production of cleanly manufactured construction materials.