US Chamber of Commerce Comments FAR Climate Notice 1 13 2022
January 13, 2022
Re: Notice of Availability and Request for Comment on the “Federal Acquisition Regulation (FAR) – Minimizing the Risk of Climate Change in Federal Acquisitions;” 86 FR 57404 (October 15, 2021) and 86 FR 69218 (December 7, 2021)
Dear Jennifer Hawes:
The U.S. Chamber of Commerce submits the following comments in response to the October 15, 2021, Notice of Availability and Request for Comment on the “Federal Acquisition Regulation – Minimizing the Risk of Climate Change in Federal Acquisitions” (“Notice”) published by the Department of Defense, General Services Administration, and the National Aeronautics and Space Administration (“FAR Council” or “Agencies”).1
Combating climate change requires citizens, governments, and businesses to work together. The Chamber continues to leverage the innovation and the strength of American business to find durable solutions that improve our environment, grow our economy, and leave the world better for generations to come.
American companies and investors are already playing a crucial role in spurring the continued evolution of climate disclosures and advancing sustainability. Companies are increasingly reporting more information to the public and investors about their efforts to reduce their greenhouse gas emissions. Many have also made forward looking statements and commitments to reduce their emissions over time at the pace of innovation. These commitments, supported by technological innovations, have helped drive progress that the United States has made to address climate change over the last decade and will help make further progress to address the climate challenge.
Businesses are updating their management practices, systems, and processes to help drive more sustainable solutions. They are focusing resources on delivering more financial value and reducing their climate impacts. As they make these changes, it is important that the FAR Council evaluate the many important legal and policy issues associated with the consideration of GHG emissions related to potential government contractors. The U.S. Chamber respectfully requests that the FAR Council ensure that before advancing a proposal, it considers a number of key matters.
- To the extent that climate metrics may be considered in federal procurement, such consideration must be firmly rooted in the statutory authority of federal agencies and used in a manner consistent with the limits that Congress has placed on agencies’ authority to make such decisions. To implement a procurement-related program that appropriately balances climate considerations against other procurement and policy needs, modifications to statutory authority may be necessary.
- Any consideration of climate metrics should make use of existing, market-driven disclosures based on practices, requirements, and/or reporting regimes that businesses are already familiar with and using. Among other things, this would ease implementation. In addition, flexibility must be a priority. Companies overwhelmingly agree that any climate change disclosure should reflect differences between various industries and be tailored appropriately.
- If developed properly, the Social Cost of GHG (SC-GHG) estimates may be appropriate for use in benefit-cost analyses for certain regulatory actions under E.O. 12866. However, in light of existing limits on agencies’ procurement authority and other considerations, SC-GHG estimates should not be used or considered in federal procurement.2
- Amending the FAR to establish a new threshold determination of “Major Federal Procurements” would be challenging and would need to be carefully defined, only after extensive consultation with regulated industries before proposal of any FAR amendments.
- The FAR Council must ensure that consideration of climate metrics does not result in expanded litigation, such as litigation related to increased bid protests or litigation under the False Claims Act. Such litigation may slow innovation needed to meet the climate challenge.
- The FAR Council must not lose sight of the importance of competition, which could be reduced by overly burdensome reporting requirements. To this end, it is critical to consider whether and how GHG considerations might appropriately weigh into government Best Value Assessments and Lowest Price Technically Acceptable determinations.
- The incorporation of GHG considerations into the FAR must be cost-effective. The FAR Council should use Other Transaction Authority to improve cost-effective and quality government procurement, and weigh how such metrics would impact Emergency procurement.
- In light of the litigation concerns noted above, any changes to the FAR in this area must include appropriate safe harbors and exemptions to protect against counterproductive litigation and transaction costs—costs that would ultimately be borne by the government and taxpayers in the form of higher costs or less competition.
Before proceeding with any proposal, the FAR Council should carefully consider implementation challenges.