Of pencils & procurement: cities closing the loop

As local governments and purchasing agents get the message on buying recycled, prices are dropping, and more municipalities are taking notice.

Philadelphia wanted to make a bold statement on buying recycled – and did it in pencils.

When the city needed to order pencils in April 1993, the procurement department recognized it had a decision to make. Eberhard offered a new pencil called the EcoWriter, made from recycled corrugated cardboard and newspaper, but it cost 25 percent more than its wooden counterpart. The department decided to take a chance and give up the extra money for the recycled product.

As it turned out, Philadelphia’s purchase was large enough that it actually pushed the price of the EcoWriter down some and, after more large purchases from other governments and businesses across the country, the pencil now costs less than those made from virgin wood.

“We wanted to send the message to manufacturers that we wanted them to continue making recycled products,” says Nancy Weissman, director of market and economic development for recycling in Philadelphia. “We know at start-up it will cost more, but once you know you’ve got a market out there, then you are more willing to do what you need to do to bring the price down.”

What happened in Philadelphia is, in microcosm, what is happening nationwide, both in city and county procurement offices and in the boardrooms of manufacturing corporations. More and more local governments are making the commitment to close the recycling loop and buy recycled products. This, along with increased purchasing from the private sector, is prompting businesses to retool their production facilities to make recycled products.

Almost 300 local governments across the country now have written policies favoring the purchase of recycled products over virgin, according to the U.S. Conference of Mayors. Of these, many have chosen to meet or surpass the standards set forth by President Clinton’s October 1993 executive order on buying recycled. The executive order sets content and purchasing specifications for federal departments and agencies in such product areas as paper, retreaded tires, re-refined oil, insulation and construction materials.

“I think cities and counties recognize that, in the final analysis, recycling is only going to increase when there are decent end markets for recycled materials,” Richard Keller, recycling project manager for the Northeast. Maryland Waste Disposal Authority (NEMWDA). “Buying recycled is one of the ways they can ensure those recycled product markets exist.”

Buy recycled policies vary in language. Some simply state a general preference for recycled products, while some require a set amount of purchases with strict content requirements. They all grant procurement officers the leeway to search out the best combination of price, quality and recycled content.

A year and a half ago, Philadelphia Mayor Ed Rendell issued his own executive order for city departments to buy recycled. According to Weissman, before the order, procurement officers had wanted to look into buying recycled but felt restricted because the products often were more expensive than their virgin counterparts. The executive order was a green light to buy green products.

“I can’t emphasize enough how important this executive order was,” Weissman says. “I’ve always known that risk-taking was a no-no because procurement agents are the guardians of the citizens’ tax dollars, but I didn’t realize how deeply that was felt.”

Even in cities and counties that lack buy recycled policies, educating the purchasing agents enables them to take the initiative themselves. The problem, according to Maurice Sampson, technical assistance specialist with the Institute for Local Self-reliance in Philadelphia, is that many people still do not know about the availability, price and quality of recycled products.

“I don’t think most recycling people who are pushing this understand the need to sit down and get to know the procurement people,” Sampson says. “You’ve got to educate and bring them across. They are very conservative in how they operate, and that’s essential to the process, but once you show them how it’s done….”

Buy Recycled Education

Different organizations around the country offer a variety of educational materials and workshops for local governments interested in forming buy recycled policies of their own. NEMWDA, the King County (Seattle) Commission for Marketing Recyclable Materials and the North Carolina Office of Waste Reduction are among them.

Each of these agencies has step-by-step guidelines for setting up a buy recycled program, sparking local interest in it and drafting the written policy. They even have sample policies, which municipalities can adapt.

“Our agency has conducted 16 day-long training programs – eight in Maryland and eight in other Atlantic coast communities,” Keller says. “We cover everything from why you should buy recycled, the different kinds of materials, testing, changing specifications, record-keeping and a range of other subjects.”

As an example, the N.C. Office of Waste Reduction’s plan includes:

(1) Establishing Commitment. Local governments should identify their needs, design a program and make sure all employees and suppliers understand management’s commitment to following it.

(2) Developing Purchasing Standards. Agencies should make sure employees understand the labelling of recycled products. For example, “50 percent recycled content; 25 percent post-consumer” means that half the product’s recycled content is materials discarded during production and half is materials recovered after consumer use.

(3) Revising Purchasing Policies. Certain specifications inhibit purchasing agents’ ability to buy recycled. Low-bid requirements, brightness standards for paper and large-order purchasing may unduly restrict recycled procurement efforts. Price preferences can be given for recycled products (e.g., 10 percent for re-refined oil) and unnecessary “white paper only” language can be stricken from purchasing policies.

(4) Setting Goals for Buying Recycled Products. The goals can be certain dollar amounts, percentages of total purchases or a combination of both. Governments also should consider setting recycled content goals.

(5) Promoting Buying Recycled Products. Local governments should promote the program both in municipal offices and publicly to heighten awareness and interest.

(6) Monitoring the Program. Agencies should be flexible, work with suppliers, monitor costs and learn from mistakes and successes.

The office’s plan also stresses involvement with national efforts like the National Recycling Coalition’s Buy-Recycled Business Alliance (BRBA), made up of roughly 800 local governments and businesses, including AT&T, Anheuser-Busch, Coca-Cola, Sears & Roebuck and Johnson & Johnson.

Problems

Once the initiative to buy recycled is taken, problems can arise if procurement officers are overzealous in their efforts. Sometimes specifications in purchase orders are very tight for a reason. Certain materials requested by city engineers, for example, are very specific, and recycled versions of those materials, even if only slightly different from the cited specs, may not be appropriate.

King County Recycled Product Procurement Coordinator Eric Nelson says well-meaning purchasers in Seattle made this mistake and, as a result, prejudiced the individual requesting agencies against recycled products in general. He remembers an instance in which something as mundane as recycled file folders for a courthouse office were ordered against specifications, and the folders turned out to be poorly made and fell apart.

“The fault was due to manufacturing and not due to recycled materials,” Nelson says, “but [the office] didn’t know that at the time and didn’t care. We suffered a setback in that instance.” He stresses the procurement office should know exactly what the requesting party needs and, should a substitution be made for a recycled product, make sure it fits the bill.

Even in departments that have not had a bad experience, a negative image of recycled products may exist; officials simply may think they are inferior. “We have some glowing examples [of buy recycled programs], but there’s a whole lot of people that just aren’t sold yet,” Sampson says. “We need to get more information out. We need to match up the procurement believers with the procurement non-believers.”

Sometimes an agency will try a recycled product and, if it does not perform up to expectations, may assume the reason is the recycled content, as in the case with King County’s file folders. “Do [the requesting departments] automatically assume that, because it is a recycled product, all recycled products are doomed to fail?” Keller asks. “If it was a virgin product, that assumption would not be made.”

Successful Programs

Seattle and Newark, N.J., have been the leaders in buying recycled for a few years, but some other cities are coming up with very successful programs that may also serve as models for other communities.

Recently, Philadelphia and San Jose, Calif., received Outstanding Achievement Awards in Buying Recycled from the U.S. Conference of Mayors for their programs.

Philadelphia’s executive order on buying recycled was issued just before the Clinton Administration’s and, when the president signed his, the city decided to adopt its standards. In fiscal year 1994, Philadelphia spent $4 million on recycled products, a figure Weissman says will be used as a base now that the executive order is in place. The city’s policy states a 10-percent price preference for paper products only, but she says in practice a reasonable preference is applied wherever “we consider it appropriate.”

The city’s policy has been “incredibly well-received,” according to Weissman, and city procurement agents often go beyond what the policy states in buying recycled. “We have so much support that we are able to do a great deal without any formal written documents,” she says. “Frankly, if we meet up with opposition, then we might go back and change the policy, but that’s very complicated, so we’d rather work in a less formal fashion.”

San Jose officially adopted a buy recycled policy in 1990, but, according to purchasing recycling coordinator Doris Evans-Hencken, the city has been buying recycled since 1980. In fiscal year 1993, San Jose spent nearly $1 million on recycled products.

San Jose has no price preferences in its policy, but Evans-Hencken says the city is flexible in its procurement efforts, sometimes choosing the more expensive recycled products.

“We try to make our bottom line balance so we’re not paying more,” she says. “We save a lot of money [recycling] our laser toner catridges, so we use some of that money for other products.” She adds the city is looking at strenghening sections of the policy.

Eventually, as happened with Philadelphia’s pencils, recycled products are going to go up in quality and availability and down in price. It is a question of economies of scale, according to Sampson, who cites the example of the United States paper industry estimating it will spend $10.7 billion in plant retrofits between now and the year 2000 to accommodate recycled paper production.

Keller agrees. “There may be circumstances where the recycled products are more expensive than the virgin counterparts,” he says, “but over time that difference will diminish and probably disappear. One thing the recycled product market has shown us is that the American entrepreneurial spirit is not dead.