Leveraging State and Local Buying Power to Improve Resilience and Sustainability

Years ago, when we were writing about the power behind procurement dollars, we alluded on more than one occasion to the “big pencil.” Typically, we were writing about the fact that the huge sums spent by states and localities—well over $2 trillion a year in total now—were a powerful incentive for vendors to bring down the prices of their goods and services. 

But there’s yet another, frequently overlooked, and societally critical, power in those big pencils, beyond controlling costs. Carefully spent, purchasing dollars can be used as one of the most potent tools to help the nation combat its environmental concerns—just beginning with climate change. The process is generally called “environmentally preferable purchasing,” or “green procurement,” while some other entities talk about “sustainable purchasing.”

Not only can the decision to spend procurement dollars on environmentally sound goods and services help keep the air and water clean, it also provides a significant incentive for vendors to develop green products. “We have enormous purchasing power to really shift the marketplace,” says Julia Wolfe, director of environmental purchasing at the operational services division in Massachusetts, a state which has led the nation in this field.

 “Our buying power is immense,” Dallas’s mayor Eric Johnson told us. “And we can leverage it to improve our city’s resilience and environmental sustainability. Through our sustainable procurement policy, we are sending an unmistakable message to our vendors: If you want to do business with the city of Dallas, you must be responsible stewards of our planet.”

Not Just Recycled Paper

When this kind of effort first began in the 1980s and 1990s, it was mostly focused on little more than the use of recycled paper. While that might have seemed like the simplest of efforts, it was met with some pushback. “People told us that their copy machines broke because of the paper,” recalls Karen Hamilton, the long-time sustainable purchasing program manager in King County, Washington. “But there are good and bad products regardless of their recycled content.” 

“In the past we always thought of procurement as a transactional profession,” says Rick Grimm, CEO of NIGP: The Institute for Public Procurement. “The client requested something, and we went out and bought it. As the years have passed, there has been growing acceptance of empowering procurement to act strategically in achieving the mission of the public entity including the ability to use it as a lever for social responsibility. 

“Today, when a government says we really want to increase energy efficiency,” he continues, “procurement offices can structure the solicitation, so they acquire goods and services in a way that achieves that energy efficiency mission.”

King County, for example, has developed a strategic climate action plan, which is taken very seriously by county leaders. “But we can’t meet any of its goals without appropriate procurement,” says Hamilton. “For example, we have the goal of reducing our greenhouse gas emissions by 80% by 2050, and part of that involves transportation.” 

With that in mind the county has committed to buying only battery-powered buses. “But we can only do things like that when individual agencies, working with the centralized procurement agency, own the idea,” she adds.

Meanwhile, Dallas is working on sustainable food procurement. “We look for people who can provide food for city events from town halls to bigger events and make sure they reduce waste in packaging and use locally sourced foods,” says Chhunny Chhean, director of the city’s office of procurement services. “The locally sourced foods reduce the miles driven to get the food to the people who are going to eat it, and that reduces carbon emissions.” 

The list of items that can be purchased with an eye on their environmental impact is long, and goes far beyond the obvious purchases, like automobiles, recyclable products or those that can contain toxic chemicals. New York State, for example, has clear-cut rules for the purchase of water fountains, a far preferable means of quenching employees’ thirst than using disposable plastic bottles of water. Toward that end, the state’s guidelines stipulate that, in addition to meeting federal and state rules for safe water, New York’s water fountains must have the “ability to fill water bottles with either a faucet or other feature that provides at least 10 inches of clearance to allow filling and refilling of cups, sports bottles, pitchers . . .”

Massachusetts has even gone as far as working with the Center for Environmental Health to develop model specifications for healthier furniture. In addition to focusing on purchasing chairs that are comfortable and supportive for the back, as other states might do, the Commonwealth is concerned with procuring furniture that is created with fewer chemicals, especially flame retardants. 

“A lot of work has shown that flame retardants are not necessary in all furniture, and they can actually show up in people’s blood,” says Wolfe. 

One state that is moving forward rapidly in the direction of environmentally preferable purchasing is Washington. That state’s governor, Jay Inslee, prides himself on his concerns about the state’s environment. Last spring, a climate change law passed in the state that is intended to reduce toxins, plastics and solid waste in the state. 

“Through procurement, we are able to set the stage for reducing those things by making informed strategic thoughtful purchasing procurement and contracting decisions,” says Cheral Manke, procurement innovation project manager for the Washington State Department of Enterprise Services. 

Moving Away From Low-Bid Procurement

One major obstacle to a move toward environmentally preferable purchasing in some states and localities is the mandate that purchasing departments give an absolute preference to low bids. When price is the only factor involved in making a purchasing decision, environmental considerations can easily take a back seat. 

Fortunately, a growing number of states and localities have been moving away from low-bid procurements and toward “best value” procurement, which takes factors other than price into account. At the NIGP, we “emphasize that the best value process is a best practice,” says Grimm. “We believe this is an important trend because it provides the procurement official the flexibility to consider multiple criteria when awarding contracts for goods and services that best serve the public.”

As Massachusetts’ Wolfe says, “We do have agency buyers who say, ‘No, some of these green products cost more.’ But we’re a best-value state, and we don’t have to go for low price. We take a number of things into consideration including public health and the environment.”

Moreover, it’s clear that there are a number of instances in which an item that has the lowest initial price can easily wind up being more expensive as the years pass. Purchasing more durable items, for example, frequently means that they cost more at the outset. But if one lasts longer, and needs to be replaced less frequently, then that item winds up being cheaper over the long haul, while avoiding the environmentally expensive process of manufacturing in a carbon-fuel-oriented economy.