Green Shopping Online

Green Shopping Online:

EPA Leads the Way With Office Supply Contract

Scot Case is the Director of Procurement Strategies at the Center for a New American Dream.

In March 2004, the U.S. Environmental Protection Agency (EPA) launched an online ordering system with Corporate Express to ensure EPA employees are ordering some of the most environmentally preferable and safest office products available. The system also simplifies purchases, decreases paperwork, improves EPA’s ability to track purchases, and significantly reduces product costs through volume discounting. It is becoming the preferred way for EPA employees to buy all non-electronic office supplies. On September 30, it will become EPA’s mandatory source.

To help others implement similar electronic purchasing (or e-procurement) systems, EPA recently published “Buying Green Online: Greening Government E-Procurement of Office Supplies,” a 60-page report documenting EPA’s and other federal agencies efforts. This month’s Green Purchaser summarizes many of the findings contained within the report along with some additional information. To find copies of the EPA report, visit the EPA’s site: www.govinfo.bz/4205-251.

E-Procurement System Features
The most unique feature of EPA’s e-procurement system, www.govinfo.bz/4205-252, is that only the most environmentally preferable and safest products from Corporate Express are available for purchase. Products failing to meet EPA’s environmental purchasing criteria are unavailable on the system unless the products are not yet available in the Corporate Express product catalog. The system’s other features are similar to traditional online shopping sites, including:

• Allow users to browse or search the database of thousands of items
• Permit users to create and modify their own shopping lists for items they routinely buy
• Make it easy to review and verify orders
• Supply detailed invoices of items ordered and purchased
• Guarantee delivery of in-stock items to the users desk within two business days
• Notify users of out-of-stock or back-order items
• Allow users to review previous orders
• Establish user profiles that customize the site to meet individual needs
• Provide a toll-free customer support number for additional assistance.

Advantages of the E-Procurement System
One of the primary reasons EPA began exploring eprocurement was to save money. It wanted to pursue the potential cost savings available through volume purchasing and reduced transaction costs.

Centralizing office supply purchases through a single supplier to save money became more challenging after EPA, like the rest of the federal government and others, issued purchase cards (government debit cards) to employees. A large percentage of purchase card spending is devoted to office supply purchases. EPA estimates about 14 percent of the $35.8 million that its purchase card holders spend (approximately $5 million) is spent on office supplies bought from a variety of local, regional, and national suppliers. EPA expects to reap significant savings by channeling this purchasing volume through a contract with a single supplier.

In addition to the cost savings, the e-procurement system also makes it easier for EPA to track its office supply purchases. As required under various federal laws, Presidential executive orders, and Office of Management and Budget policies, all federal agencies are required to track and report their purchases of recycled-content and other environmentally preferable products. They are also required to report purchases from small and disadvantaged businesses, from the disabled, and from prison industry labor. Obtaining that level of detail from purchase card holders in order to meet its reporting requirements was a cumbersome process. The e-procurement system tracks the information automatically.

Just as importantly to EPA and other environmentally preferable purchasing advocates, the e-procurement system also makes it much easier to identify and buy recycled-content, low-toxicity, and other environmentally preferable products. EPA developed a set of environmental criteria used to screen all 15,000 of the products available from Corporate Express. EPA employees using the e-procurement system are not offered products that do not meet EPA’s criteria when an environmentally preferable option is available.

Developing the Contract
EPA began the contract development process by reviewing the e-procurement efforts of other federal agencies. The organization discovered that several agencies or federal facilities had already implemented successful e-procurement strategies, including all or parts of the Department of Defense, Department of Energy, Department of Agriculture, the Smithsonian Institution, Internal Revenue Service, U.S. Postal Service, and others. Although several of these efforts also included aspects to identify or promote recycled-content or other environmentally preferable products, EPA appears to remain the only agency to limit customers to the environmentally preferable options.

Additional information on EPA’s e-procurement system is available in “Buying Green Online,” a 60-page case study documenting EPA’s efforts. For copies of the report, visit the EPA’s Web site: www.govinfo.bz/4205-251

All of the e-procurement systems EPA evaluated were based on blanket purchase agreements (BPAs) with one or more suppliers. A BPA is a contracting mechanism in which a supplier agrees to provide a discount for all of the items in its product catalog. Prices for frequently purchased items, typically referred to as the “core items,” are negotiated on a line-by-line basis. Other prices are discounted by a standard percentage of up to 60 percent or more.

Some of the federal e-procurement systems reviewed by EPA combine information from multiple BPAs, which could require an agency to develop and manage its own e-procurement system in order to make the products from multiple suppliers available under a single eprocurement site. EPA opted instead to issue a single BPA as a way of maximizing the potential volume discount because it is easier to manage a single contract than multiple BPAs. A single BPA also makes it possible for the supplier to manage all of the information technology infrastructure necessary to run a successful e-procurement site.

Once EPA was ready to move forward, it issued a request for proposal (RFP) limited to suppliers who were already approved under the U.S. General Services Federal Supply Schedule for office products. This restriction greatly simplified the process because all of the potential bidders were pre-qualified. EPA’s RFP specified all of its agency-specific requirements, including:

• Maintain an online ordering system of environmentally preferable products accessible to all EPA purchase card holders.
• Include all costs for managing the contract and maintaining the on-line system in the prices for the supplies ordered.
• Guarantee two-day delivery and offering optional next-day delivery for all orders to more than 70 EPA facilities located throughout the 48 contiguous states.
• Ensure compliance with all federal requirements to buy products from small and disadvantaged businesses, the National Industries for the Blind (NIB), National Industries for the Severely Handicapped (NISH), and Federal Prison Industries (Unicor).
• Provide access to online training for all EPA employees using the system.
• Maintain a toll-free telephone number to respond to questions.
• Implement a toner cartridge and battery recycling program at all delivery locations.
• Other requirements specify record keeping protocols, option years, ordering procedures, delivery requirements, review and dispute protocols, and deliverables.
  

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Although EPA’s e-procurement system requires a password to access, non-EPA employees can get a preview of the site and review the online tutorials by visiting www.govinfo.bz/4205-252

When reviewing proposals, EPA looked for a supplier that could provide a wide variety of green products. It also looked for a supplier that was improving the environmental performance of its own operations. As a result, EPA’s vendor evaluation criteria included consideration for suppliers with an Environmental Management System (EMS) in place or under development.

An EMS can help integrate environmental considerations into dayto-day business operations. EPA also considered efforts to improve the environmental performance of the supplier’s fleet and fleet maintenance operations.

To provide an incentive for the supplier to continually increase the number of environmentally preferable products and to help EPA meet its small business utilization goals, the five-year contract (base year plus four option years) includes five optional three-month extensions. A copy of the RFP is available as an appendix to the “Buying Green On-line Report,” visit: www.govinfo. bz/4205-251.

Identifying the Green Products
Staff from EPA’s Environmen-tally Preferable Purchasing Program www.govinfo.bz/4205-255 provided Corporate Express with a set of criteria to be used to identify the environmentally preferable products. EPA’s criteria were based on the following requirements:

*For a complete list of EPA’s Green Purchasing Criteria, visit: www.govinfo.bz/4205-254

• Legally mandated recycled-content requirements: Section 6002 of the Resources Conservation and Recovery Act (RCRA) requires federal purchasers to buy recycled-content versions of any product designated by EPA’s Comprehensive Procurement Guidelines (CPG) program. EPA has designated more than 50 products ranging from common office supplies such as printing and writing papers, desk top accessories, and printer toner cartridges to building and construction materials and park and recreation products. RCRA also requires state and local governments spending federal money to meet the CPG requirements. For a complete list of the designated products and legal requirements, visit: www.govinfo.bz/4205-256.
• EPA’s own purchasing policies: In addition to meeting all of the legally mandated CPG-requirements, EPA has established internal policies to buy cleaning products meeting Green Seal certification standards. It also has a policy to buy processed chlorine-free copy paper containing at least 50 percent post-consumer content. Other policies are being considered and will be incorporated into the e-procurement system as appropriate.
• Green Seal’s recommendations: Green Seal is a nonprofit standard setting organization that regularly publishes information on buying more environmentally preferable products. In May 2002, Green Seal published a “Choose Green Report” devoted to office products. EPA used this report and other information provided by Green Seal to help develop its purchasing criteria. For copies of the “Choose Green Report,” visit: www.gov info.bz/4205-257.
• INFORM: Another organization that provides a lot of information useful to purchasers seeking safer products, INFORM published a report identifying safer batteries that EPA used to develop some of its purchasing criteria. Copies of the INFORM report are available at www.govinfo.bz/4205-258.

(Note: Because the EPA office supply contract does not include business machines or computers, EPA did not need to reference Energy Star, www.govinfo. bz/4205-259, energy-efficiency requirements in its office supply criteria. Contracts for these items include the Energy Star requirements.)

EPA will update its product selection criteria as additional information about the environmental performance of various products becomes available. The U.S. Department of Agriculture, for example, is expected to release a list of products made from renewable resources in the near future. Once published, EPA will review the list and make any necessary adjustments to its green office supply criteria.

Corporate Express used the criteria EPA developed to evaluate the thousands of products it makes available to EPA customers through the e-procurement system. Corporate Express determined which products were “essentially the same” to products for which EPA had expressed a clear environmental preference and agreed to only make the environmentally preferable versions available.

Some copy papers, for example, are unavailable to EPA employees because different copy papers have very different environmental profiles; some are significantly more environmentally preferable than others. Buying recycled-content paper, for example, helps preserve and protect the nation’s forests. Processed, chlorine-free papers use safer chemicals during manufacture and, as a result, are less polluting.

EPA green office supply criteria require copy paper to contain at least 50 percent post-consumer, recycled-content and be manufactured in a chlorine-free process . Buying paper meeting this preference allows EPA to save more than 17,000 trees every year along with 18 billion B.t.u.s of energy, 1.5 million pounds of air pollution, and 770,000 pounds of solid waste. While EPA’s e-procurement system only includes copy papers that meet or exceed EPA’s environmental criteria, in some cases EPA permits Corporate Express to sell products that might not always be considered environmentally preferable. It is possible, for example, for EPA employees using the e-procurement system to buy both non-rechargeable and rechargeable batteries. While rechargeable batteries are generally more preferable, they are also more expensive and, according to manufacturers, some “low-use” products like clocks and calculators might perform better if used with nonrechargeable batteries. As a result, both battery types are available on the system.

Assuring Product Quality
All of the green products available on EPA’s e-procurement site perform as well as or better than their more traditional counterparts. Based on earlier consumer surveys, EPA knows more than 97 percent of consumers are happy with the performance of recycled-content and other environmentally preferable products. Unless told, most employ-ees could not see any difference between the safer products and the more traditional ones.

In some cases, EPA and Corporate Express have gone the extra mile to assure EPA customers of product quality. All of Corporate Express’s remanufactured toner cartridges (for use in printers and fax machines), for example, are backed by a 100 percent quality guarantee. Any defective product will be replaced free of charge. In the unlikely event a defect in a remanufactured cartridge causes damage to a printer, the manufacturer will cover all of the repair costs. In addition to the guarantee and the environ-mental benefits of using re-manufactured toner cartridges, they are also less than half the cost.

Future of Green Shopping Online
The emergence of online and electronic product catalogs and other e-procurement technologies has revolutionized the way purchasers buy products. It is now much easier for buyers to compare product prices and features. It can also be easier for interested buyers to locate environmentally preferable products.

All of the major office supply companies provide some environ-mental information for at least some product categories in their catalogs. It is possible to use their online catalogs to locate recycled-content or low-toxicity products. The available information, however, is frequently inconsistent and sporadic. It takes a very dedicated buyer to sift through the information to identify and buy the environmentally preferable option.

Although others have used similar systems to make green products easier to identify, EPA’s contract with Corporate Express appears to be the first e-procurement system that automatically screens out products that fail to meet specific environ-mental criteria beyond just recycled-content.

EPA’s approach makes buying environmentally preferable products extremely easy. Although EPA employees are the only ones permitted to use its system, nothing prevents other organizations from adopting the EPA criteria for use in their own e-procurement systems. The information is available. The technology makes it possible. The savings make it affordable. It’s up to the purchasing community to make it popular.

Editor’s Note: Scot Case is the Director of Procurement Strategies at the Center for a New American Dream where he helps institutional purchasers buy less polluting products from less polluting companies. For additional information, visit: www.govinfo. bz/4205-262 or e-mail Scot at [email protected].