Federal Agencies Consider Incorporating Climate Impacts and Risks in Procurement Decisions

On October 15, 2021, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration—all members of the Federal Acquisition Regulatory Council—published an advance notice of proposed rulemaking to consider ways to minimize the risk of climate change in major Federal agency procurements. The notice contemplates amending the Federal Acquisition Regulation (“FAR”), which is the primary regulation for use by all executive agencies in their acquisition of supplies and services with appropriated funds. As explained in the published notice, President Biden’s Executive Order 14030 (“Climate-Related Financial Risk”) “directed the Federal Acquisition Regulatory Council, in consultation with the Chair of the Council on Environmental Quality and the heads of other agencies as appropriate, to consider amending the FAR to ensure that major Federal agency procurements minimize the risk of climate change, including requiring the social cost of greenhouse gas emissions to be considered in procurement decisions and, where appropriate and feasible, giving preference to bids and proposals from suppliers with a lower social cost of greenhouse gas emissions.”

The published notice seeks public input on several questions related to how to best incorporate climate impact and risk considerations into the federal agency procurement, including through the use of the social cost of greenhouse gases. The public may submit comments until December 14, 2021.