Environmentally Preferable Purchasing In Action
                        An  EPP  Pilot  Project Update
 As of October 21,
 1997, Federal
 Regulations'{FAR)-   .
 require all federal  ,
 agencies to'   ,    "\
 ^referable and
, energy-efficient -
 products and
 services" (FAR
 23.704). The BOB
 parking Sot contract
 allaastrates one way
 of satisfyiog this FAH
       After more than a year of experience with the "green" parking lot
       contract, the Department of Defense (DOD) and the U.S.
       Environmental Protection Agency (EPA) are sharing the most recent
results of this Environmentally Preferable Purchasing (EPP) pilot project. This
fact sheet describes the project's background and current status, highlights
recent project successes, suggests future challenges, and details the lessons
learned. It is an update to Paving the Road to Success, an EPP case study
published in November 1997 (EPA742-R-97-007). The full case study is
available via the EPP Web site  or by calling
the Pollution Prevention Information Clearinghouse at 202 260-1073.

  In June 1997, DOD awarded D-M&S, Inc., a 5-year, $1 million per year,
fixed-price, line-item contract to maintain and repair the parking lots and
access roads at the Pentagon and three other DOD facilities. The contract
includes traditional price and performance requirements as well as incentives
to use products with multiple, positive environmental attributes.
  The contract includes work sheets for 20 product categories representing
90 percent of the materials used to repair and maintain the parking lots.  Each
work sheet identifies the mandatory operational  requirements for a product.
Eleven work sheets also include optional environmental attributes for which
D-M&S, with DOD approval, can earn a 2-percent price differential for each
attribute it incorporates up to a ceiling of 10 percent per line item and an
overall task-order price differential of 5 percent. The contract also provides
additional opportunities for the contractor to improve environmental perfor-
mance and earn price differentials, which are subject to the same line-item and
task-order ceilings.
 "^is feet sliest ji^
 Existing copy of'Ityirig the,Road to^cce^, the EPP^case study dbcumenting
 OOP's parMnglcrt^
 i'that it was/i^or&enyjranm^
                         W9 Printed on paper that contains at least 20 percent postconsumer fiber.

Current Status
   During the 15 months the contract has been in place, the contractor has used
products with positive environmental attributes to pave 227,934 square reet of
parking lots and roadways. \Vhen compared to traditional products, rhe con-
tractor's products have increased recycled- content percentages, reduced volatile
      ic compound (VOC) levels, and decreased overall toxicicy.
   Usje of.-jEhvironmeiitiilly'Preferable Products-.;-••;.  Y •.-  .._':\-: -\'
   .farice'itfee contract-began,.the DOD contractor has'. usec!:V;'.'••'.'.-'  -  "::;:," '"'. .
  . • "3,328 tons .of tecycied asphalt  -   '•'"•;..--"<:.•"•:'.'•'••-•••••  .:  '-..''•'''•-'•  ''•''•'•  ••
  '. * 'T$3'l -tons^of recycled concrete •'  •  .  .   .- '•.••-' • '•-. _-'. '•'•"--'-.•'. ' -../••••; -, -_;  : •
 , •" *'  300 'Ciibfc yards of coi)cret6 coDiaihing recovered'taaterials/.; '.'•••'.•-';- '...• •:.-.':,..•
 ;.- .*-'- 3',55B linear feet•pf'-recoyerc'd glass'.for reflective.$orfacps~'  y •'-..'. ;- -:•;.;'.";';:,
 .• ••-..- 5,20.0 linear: (cet; of an'-asphalt .se^lfcr:,contajning-rject>ver.cd crntny^bbcr:'.'-'- '-•.
                            ;eoataining;less thaii -50 gtmras per liter/ of
Project Successes
   While rius pilot project has enjoyed many successes, die two most recent suc-
cess stones involve identifying new environmental attributes and promoting the
wide-spread use of environmental products,

Identifying New Emironmental Attributes
   'lo prepare the contract work sheets, the DOD/KPA ream used publicly avail-
able information and conducted a limited market survey 10 identify the environ-
mental attributes. The ream believed it would be challenging for the contractor
to locate products exceeding the attributes it identiiicd.
   A, few months into the contract, however, D-MScS had. already identified eight
products exceeding the environmental criteria detailed on the work sheets and
had proposed an environmental attribute for several produces for which DOI)
had not identified any criteria. The contractor conducted an extensive Internet
search and queried numerous contacts and .suppliers throughout the paving and
road construction industry looking' tor products with improved environmental
performance. "All we needed to know," according to Sam Oogiian, a cost-estimator
with D-M&S, "[was] what types of environmental information  to look for.1'

Promoting the Wide-Spread Use of Environmental Products
   Several of the products D-M&S identified as. einironmenmlly preferable per-
form better than traditional products  in fact, the contractor is using them on
other projects, nor because of their environmental features, bur by virtue of their

 performance. As a result, the use of environmental products is spreading beyond
 the scope nf the pilot project, achieving one of the goals of the DOD/EPA pilot
 project team and of the EPP program, ft also demonstrates that environmental
 improvements can lie made without, compromising cost or performance.
   In addinon, several oraanuiiiions have eonr.ieted 1)()D and EPA regarding
 die environmental language used in the parking lor repair and renovation con-
 tract. SeveraJ cities, counties, and municipalities are considering incorporarintj
 similar language into their  contracts.

 Future Challenges
   Currently, DOB officials can readily determine if a proposed product
 improves environmental performance because the parking lot contract clearly
 identifies the environmental attributes on II of the 20 product  work sheets. If j
 work sheet identifies a Vl)C content uf less than 80 g/L as environmentally
 desirable, for example, and  the conn actor proposes a  product containing
 60 g/L, the  new product is  considered environmentally preferable.
   Determining environmental preJerability will likely become more difficult as
 rhe contract continues, however. 1)()D, for example,  is currently evaluating two
 Competing .sealants- -a traditional sealant \\irli environmental criteria defined on
 an existing product work, sheer and another potentially revolutionary product
 that is more durable. While durability is generally a positive environmental
 attribute, it does not necessarily mean the new product is moie environmentally
 preferable. It is possible, for example, that the processes used to irumif'actuic
 the more durable product require more energy to produce, and transport the
 product or are more toxic than those used to produce the traditional product.
These additional environnjeiK.il concerns might negate the environmental
 improvements attributed to its inerea.sed durability. From an environmental lile
cycle  perspective, it i.s still unclear which product is preferable.
   At  this point, DOI), f-'.PA, and D-A'l&S have asked the manufacturer of the
new sealant for additional environmental information about its product.  The
infonmuion  provided by the manufacturer will help DOI") determine: which of
the two competing sealants  t« use. Until the, environmental benefits of compet-
ing products are clearly defined, traditional measures  like price and performance
will remain the primary determining factors.
   This situation highlights  the eumple.\kics associated with comparing the
environmental -if tributes of cwo different types of products designed to perform
rhe same function.  As new environmental attributes are introduced, these deci-
sions will continue  to become more eomplt v. It also should lead  to the develop
rneni  of new environmental decision making tools.

   In additioii'io the lessons cued in the full cast: study, recent contract cxperi-
eru es demonstrate that eomr.ictors can locate environmental products as part, of
ninline project performance, pncv differentials might not be necessary, and
environmentally preferable f!<><:> nor necessarily mean "more expensive."
 New- eiwirohmcitttal'.  ,
 decteion-maldn'g tools;
      continue to./ ..'',  •••'
 develop :as 'mote.
' environmental-.' '-
;atbrtb.utes'aire.^ -  ;i
'. introduced to-'i

 "No. one will' get  , -

.rich off i of'. the' price  •

•differential,, but we

 believe 'the •. -.'

 Imowle'dge: we .gains  :

 will-.bring 'us a lot of-. •

        busiiitess." • • .  •.
 —'•'  Sam .Croghan,  .•-•
  '•./D-MI&S, Inc.."'r.-.-..- '.  '
   ..' DbDPa'rkiVx} Lot-
     Repair Contractor -. •
 Contractors Can Locate Environmental Products
   D-M&S's ability to coll ret information on the environmental attributes of
 the products UMid under the parking lot renovation and repair contract sug-
 gests construction contractors might be in a better position than federal
 purchasers u> identify the environmental attributes of construction products
 because of the contractors' previous experience with the products ami their
 contacts throughout the industry. After DOD identified the environmental
 attributes of concern, D-M&S obtained product information  that allowed
 DOD to compare pmditcts based on their environmental performance. This
 experience suggests the contracting mechanisms used  in this innovative con-
 tract might be appropriate in other situations,

 Price Differentials  Might Not Be /Vecessaiy
   "I he DOD/KPA team included price differentials in the contract tearing
 small businesses would not  otherwise be able to afford to conduct: the prod-
 uct research, D-M&S claims, however, the price differentials  had no  effect
 on its decision to bid on the project. According to A'Ir. Croghan,, the
 2-percent price differential is not nearly as important  or as profitable as the
 *   Keeping the customer happy.
 *   (raining knowledge and experience in identifying and working with
    environmental products and processes,
 •   Using the. experience working wirh environmental products -and
    processes to distinguish D-A1&S from its competitor..

 Environmentally Preferable Does Not Mean 'More Expensive'
   Aher more, than one year of experience with the contract, the average
 cost for the work completed is .significantly lower than  similar  work on other
 DOD parking Jot repair contracts,, which do not include enviiontu<:utal fea-
 tures. The price differential has increased expected contract costs by only
 0.^ percent. Tn fart, even il  the contractor had earned  the maximum price
 differentials as defined  in the contract, the average costs still would be lower
 than other DOD parking lot rep-air anil maintenance contracts.
   Bob (".ox, the DOD  program manager for the contract, attributes the
 favorable contract price to DODV competitive contracting process and the
traditional evaluation factors  price and performance. I'urtherniore, as a
 fixed-price, linr-m-m contract, the contractor, not DOD, absorbs any cost
difference between the contractor'*; proposed  line-item cost and actual costs.
The contractor might he nuking additional profits  on  some line items and
losing mone) on others, bur the cost to ihc government docs  nut change.
"With this contract/' avconlmp  to Mr. Cox. "DOD is  receiving a qualitv
 product with unproved environmental  performance at a lower cost, which
 proves you do not have to pay more to go "green/"