Figure 3-1 The procurement process at a federal agency.
Source : Nancy Gillis presentation, December 7, 2011.
sustainability-related changes to products they purchase. It would be more influential to insert sustainable specifications earlier than the purchasing phase— for instance, when the statements of work for a particular procurement are being developed. New procurement tools could help, Mr. Rifkin said. A workshop participant also suggested that procurement professionals could be evaluated in part based on their performance in meeting certain sustainability criteria. Mr. Rifkin added that it would be possible to assess performance based on sustainability criteria only as long as clear specifications, priorities, and procedures are provided.
Stephen Gordon from Old Dominion University echoed the theme that earlier stages in the procurement process are important and that sustainability considerations could be incorporated at any point along the supply chain and at any stage in the life of a product, including disposal. Life-cycle assessments (LCAs) aim to assess the environmental, economic, and social impacts of a product throughout its lifespan. Attributing costs to different stages in the life cycle of a product is one use of LCAs, although even if a more sustainable product will save money over time, upfront costs can be a barrier to purchasing it. The cost of disposing of products, especially those containing hazardous components, is seldom considered during purchase, Dr. Gordon noted. If procurement professionals incorporate this consideration, they may decide to purchase a product that is costlier up front, but which may ultimately result in savings over the entire life cycle. Some participants discussed the possibility of financing upfront costs and then using cost savings to pay that amount back—an example of a revolving funding scenario that could help address high initial costs.
Dr. Gordon also noted that it is important to account for sustainability historically by looking at a product’s past performance to quantify savings and process improvements, referred to as the return on investment. Forecasting savings is important so that contracting officers are not penalized up front for purchases that may initially be more expensive but that will save on externalities in the future. There are qualitative case studies but few peer-reviewed scientific data on these forecasting methodologies, which would benefit from further analysis and quantification, Dr. Gordon said.