Prepping for compliance

Editor’s note: This article is for general educational purposes only and does not constitute legal advice.

In recent months, President Biden has made fighting climate change a priority. To that end, he has signed several executive orders addressing sustainability, climate-related risk and clean energy. It will take several months for these requirements to go into effect, but if you do any federal work, I urge you to start preparing now for upcoming changes.

Recently, the White House Council on Environmental Equality addressed Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, by announcing implementing instructions. These guidelines stipulate sustainable acquisition policies and products apply to all new federal contracts, including fourth-quarter contracts available for bidding by roofing contractors. The guidelines also apply to existing contracts’ task and delivery orders, as well as materials acquired via purchase cards.

Overall goals

The implementing instructions for Executive Order 14057 make it clear the government has specific goals, and contractors must comply with them. According to the order’s Overarching Policies and Directives, “[the] Federal Government will lead by example to achieve a carbon pollution-free electricity sector by 2035 and net-zero emissions economy-wide by 2050, using its scale and procurement power to achieve” the following:

• 100% carbon pollution-free electricity on a net annual basis by 2030, including 50% 24/7 carbon pollution-free electricity
• 100% zero-emission vehicle acquisitions by 2035, including 100% zero-emission light-duty vehicle acquisitions by 2027
• A net-zero emissions building portfolio by 2045, including a 50% emissions reduction by 2032
• A 65% reduction in scope 1 (direct emissions) and scope 2 (indirect emissions from purchased energy such as electricity) greenhouse gas emissions from federal operations by 2030 from 2008 levels
• Net-zero emissions from federal procurement, including a “buy clean” policy to promote the use of construction materials with lower embodied emissions
• Climate-resilient infrastructure and operations
• A climate- and sustainability-focused federal workforce

What does this mean for you?

For every federal project, you will be required to use materials and services that advance sustainability, clean energy and climate-friendly goals. Procurement of these materials not only must be cost-effective but also take environmental impact into account. However, the executive order states: “Agencies must consider a price unreasonable when the total life-cycle costs, including measurable costs of any associated environmental impacts, are significantly higher for the sustainable product or service than for the non-sustainable product or service.” By 2030, new buildings must meet zero-emissions standards. So you will be required to use concrete, steel and other materials that comply with the “buy clean” policy. In addition, emission standards will be applied to materials used for renovations, retrofits and maintenance. Building designers also will be required to consider waste production and water usage when creating plans.

The guidelines also address vehicle fleets. Contractors and agencies will be under pressure to use electric vehicles and ensure battery/plug-in charging stations are in place.

Although reducing carbon emissions is a meritorious goal, roofing contractors are concerned the executive orders may require costly retooling and/or purchasing of environmentally friendly equipment and trucks and procurement of materials. These expenses could increase total construction costs without accounting for inflationary pressures on labor costs and additional overhead for tracking and implementing required federal regulations.

Advice

As the White House Council on Environmental Equality works through its executive orders and issues instructions, all federal contractors must be aware of the environmental requirements and understand the necessary steps to implement them. This can be a tall order for contractors who already are juggling the challenges of staffing shortages and supply chain issues.

There are some minor changes you can make now by looking at either hybrid or electric fleet acquisitions; allocating a portion of material purchases for new, environmentally friendly technology, including carbon-capture technology; and working closely with a consultant or design professional to navigate project requirements.

Similar to Davis-Bacon prevailing-wage requirements, failure to adhere to these standards could form the basis for nonpayment on projects. Therefore, if you do any federal work, you should start reviewing these new regulations and begin transitioning your procedures.  

TRENT COTNEY is a partner and practice group leader at the law firm Adams and Reese LLP, Tampa, Fla., and NRCA’s general counsel.

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