GSA Paves Way for National Carbon Standards in Construction Materials

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:

• For concrete, contractors will need to provide a product specific cradle-to-gate third-party verified environmental product declaration (“EPD”) verifying the amount of embodied carbon involved in the product’s extraction, transportation, and manufacture. The standard identifies specific limits for allowable embodied carbon based on concrete mix type and strength, which represent a 20% reduction from industry recommended limits.
• For asphalt, contractors will need to provide a product specific cradle-to-gate third-party verified EPD affirming the use of at least two environmentally preferable techniques (based on a menu of approved practices specified by GSA) in the processing and installation of asphalt.

Under both standards, a waiver can be sought in limited circumstances where the only available contractor within the maximum transport range is a small business which has yet to invest in EPDs, or where the “clean” materials specified by GSA are otherwise unavailable. In the event that a waiver is granted, contractors will still need to provide GSA a global warming potential (“GWP”) estimate for the product.

This action by GSA is among the first set of enforceable standards to emerge from the Biden Administration’s “all of government” approach to addressing climate change, and, more specifically, its stated intention of leveraging the procurement function in pursuit of its climate change policy objectives. While much of the recent attention has been focused on higher profile efforts like the Securities and Exchange Commission’s newly unveiled proposed rule regarding mandatory climate-related disclosures (discussed here) for publicly traded companies, as well as potential FAR and DFARS amendments that may require similar and wide-ranging climate disclosure requirements for government contractors (discussed here and here, respectively), these new GSA standards establish a model that may be replicated by a wide range of federal agencies in their procurement activities. More immediately, they are a potential game-changer for federal contractors in the construction arena, as the GSA is poised to oversee $3.4 billion in Infrastructure Investment and Jobs Act (“IIJA”) funding for building and modernizing land ports of entry on the country’s northern and southern borders. With GSA recently announcing the allocation of hundreds of millions of dollars in IIJA funding for new port of entry projects in Alaska, Arizona, Washington, Minnesota, and Vermont, in addition to all other projects on the 370 million rentable square feet that GSA oversees for the federal government, contractors should be prepared to encounter these (and similar) new standards.

What remains relatively unclear about the new GSA standards is:

• Will they only appear as requirements included in the statement of work or contract clauses or will they be used as evaluation criteria? 
• If the later, will they be implemented as pass/fail criteria thereby excluding contractors whose products’ embodied carbon is above the prescribed target number, or will they be included as an evaluation criterion for which contractors are scored based on their proposed product but otherwise remain eligible for award based on the remaining solicitation evaluation criteria? 
• Will GSA go even further to set-aside certain projects for contractors that meet preferred embodied carbon concrete or environmental preferable asphalt target goals? 

Finally, additional questions remain as to how implementation of these new standards might impact small businesses that have yet to invest in calculating these environmental metrics. This is especially important considering that the White House has also made increasing small disadvantaged businesses participation a priority (as discussed here), and GSA recently announced its attention to increase small business disadvantaged participation in federal contracting to 21% for FY2022.

Contractors should follow the implementation of these new GSA standards closely, as they represent merely one small component of the White House’s whole-of-government approach towards carbon reduction, and other agencies should be expected to draw upon this GSA model in other contexts as well.