Four ways the Federal Acquisition Regulation Sustainable Procurement Rule will impact federal procurement

Implications for the federal buying and selling communities

The Federal Acquisition Regulation (FAR) serves as the guiding framework for federal acquisitions, outlining policies and procedures to ensure efficiency, transparency and compliance in government procurement. A Federal Acquisition Regulation: Sustainable Procurement rule, published on Earth Day (April 22, 2024), reinforces the federal government’s commitment to more sustainable operations in support of Executive Order 14057 and the accompanying Federal Sustainability Plan.

Procurement professionals, financial management professionals and program leaders must be cognizant of this new rule, which went into effect on May 22, 2024. In this blog, we detail some of the most pertinent aspects of the rule and share the implications of the rule for federal buyers.

The rule at a glance

The FAR Sustainable Procurement rule reflects the government's commitment to promoting sustainable practices, reducing environmental impact and fostering social responsibility in procurement processes. These changes to the FAR are relevant to both federal buyers and sellers of goods and services to the federal government.

• Sustainable procurement practices The FAR now emphasizes the importance of incorporating sustainable procurement practices, such as energy efficient products, environmentally friendly materials and socially responsible sourcing, into federal acquisitions. Contractors are expected to adhere to sustainability standards and demonstrate their commitment to environmental stewardship.

• Green procurement requirement While a variety of green buying programs exist within the federal government, the rule serves to further mandate the use of eco-friendly products, services and practices in government acquisitions. The rule informs federal buyers of a broad spectrum of “greener government” programs available when purchasing for goods and services. Agencies are encouraged to prioritize environmentally sustainable options and consider life-cycle costs and environmental impact when making procurement decisions.

• Reporting and compliance While not requiring a specific standard for federal contractors across the board, the updated FAR does require contractors to disclose whether they already report on certain environmental sustainability efforts, such as greenhouse gas emissions reduction. This new rule positions agencies to further emphasize sustainability requirements in contract evaluations and performance assessments.

Implications for the federal buying and selling communities

Changes to the FAR will impact federal buyers and sellers with implications across four key areas of the procurement landscape.

• Enhanced accountability and transparency The emphasis on sustainability in the FAR promotes greater accountability and transparency in federal operations, including the supply chain. For example, new FAR language will require contractors registered within the System for Award Management to indicate whether they disclose their greenhouse gas emissions and related reduction plans, and to provide a link to the website where such disclosures can be found. Should federal buyers determine that disclosure (and hence commitment to more sustainable practices) is important to their procurement goals, they now have access to additional information to assess the competitive landscape.

• Cost considerations While sustainability initiatives may initially require additional investments, they can lead to long-term cost savings and co-benefits through energy efficiency, reduced waste and improved resource management. Agencies must consider life-cycle costs and sustainability benefits when evaluating procurement options. Budget professionals will serve as critical partners in evaluating not only upfront costs but also environmental (emissions, resource use) and social costs (community impact) of a project or program. See our previous blog Federal budget, finance and acquisitions professionals—critical warriors in the fight against climate change for further discussion of the vital role these professions play in improving the sustainability of federal operations.

• Compliance Federal contractors must align with the new sustainability requirements outlined in the FAR to remain compliant and competitive in government acquisitions. Non-compliance with standards and inaccuracy of disclosures could result in penalties, contract disputes, or loss of business opportunities. Federal buyers must consider how they will assess the importance of various sustainability requirements to a given procurement during the market research phase and identify how they will validate ongoing compliance post-award.

• Innovation and collaboration The focus on sustainability in federal acquisitions encourages innovation, collaboration, and the adoption of new technologies and practices that promote environmental and social responsibility. Contractors and agencies are incentivized to work together to develop sustainable solutions and achieve shared goals. Collaboration and open communication regarding sustainable operations are critical to achieve the measures set forth in the Federal Sustainability Plan. Reduction of greenhouse gas emissions must include not only emissions derived directly from federal operations but also those originating in the federal supply chain. 

Conclusion

Changes in the FAR related to sustainable procurement mark an important codification of the government’s commitment to promoting environmental stewardship, social responsibility and sustainable practices in federal acquisitions. As federal agencies continue to buy goods and services—now with a broader lens to sustainability—they must evaluate their procurement processes, embrace transparency and accountability, and collaborate with contractors to drive innovation and positive impact. 

By incorporating sustainability as a priority into federal procurement processes, agencies can lead by example, promote responsible practices and contribute to a more sustainable future for generations to come.

Learn more in our flipbook entitled “Charting the path to a more sustainable government: priorities for reducing federal supply chain greenhouse gas emissions.”

And visit our federal sustainability services page.