Trucker Tries Pollution Audit Obama May Demand of U.S. Suppliers

AmeriCom Automation Services Inc. uses a fleet of 20 trucks and vans to haul fiber-optic telecommunications cable to far-flung federal government outposts, such as border stations in Texas and New Mexico.

Operating in remote locations means the company has to use gasoline-guzzling vehicles rather than the alternative-fuel ones some of its competitors in more populated territories use, said Heather Vernon, safety officer for the veteran-owned company in Las Cruces, New Mexico.

That could become a competitive disadvantage when bidding for government work, as the company is learning through a pilot project to reduce greenhouse-gas emissions in the federal supply chain. The project, which stems from a 2009 executive order by President Barack Obama, may eventually affect how contracts are awarded in the $500 billion-a-year federal market.

“It’s going to be difficult to fight with companies that have easier access” to less-polluting fuels, Vernon said. “That’s going to be the hardest part about this. As a service- based company, we live off our vehicles.”

Difficult Fight

The government has set a target of reducing by 13 percent greenhouse-gas emissions attributed to a broad category of activities that includes suppliers, federal employee travel and waste disposal by 2020. The plan calls for U.S. agencies to consider environmental factors in making 95 percent of non- defense purchases, possibly leading to procurement preferences for companies that report their emissions.

About 50 companies, including AmeriCom, agreed to collect data on how many miles their employees drove or flew, and how much electricity is consumed, among other things. The results were submitted to the General Services Administration, which is overseeing the project, in September and used to calculate baseline emission levels for 2010. Companies were asked to establish reduction targets for subsequent years.

“Supply chain emissions is an emerging field, and all stakeholders will need time and resources to adjust to a steep learning curve,” a study mandated by Obama’s executive order concluded in April 2010.

In AmeriCom’s case, it learned that its competitors might appear more environmentally friendly to contracting officers because they travel shorter distances or can afford more fuel- efficient vehicles, Vernon said. As a result, the company, which has 70 employees, plans to sell its one-ton trucks to buy those half the weight in its pursuit of a 2 percent emissions cut over its 2010 level.

Nowhere in Texas

“Until you can go to the middle of nowhere in Texas and be able to pull over and refuel your vehicle with bio-fuel, it’s going to be tough,” Vernon said. “The whole purpose of this pilot is to find the drawbacks and advantages of getting this done. That’s why we’re participating.”

In a briefing for participants, GSA officials said 39 of the original 85 companies had dropped out, said Gail Dunn, senior administrator for Marstel-Day LLC, an environmental consulting firm in Fredericksburg, Virginia, that is one of the companies still participating.

“There were a lot of companies that probably found it more difficult than they expected or they had more emissions than they were willing to commit to the reduction,” she said.

Opportunities for Participants

Participating will eventually give Marstel-Day an advantage over other vendors if greenhouse-gas emissions reporting becomes a requirement for contractors, Dunn said.

“It’s pretty obvious that companies aren’t as up to speed as they should be,” Dunn said. “As the government thinks about rolling this out, they’re going to have to take a phased approach. I see an opportunity for companies like Marstel-Day that have a head start to help others.”

Nancy Gillis, director of the GSA supply chain emissions program office, did not respond to requests for information about the project or how it may affect procurement in the future.

Some large companies already track their emissions. United Parcel Service Inc. (UPS) and Wal-Mart Stores Inc. (WMT) voluntarily report their emissions, including those from suppliers, according to the Carbon Disclosure Project, based in London.

The organization collects emissions data on behalf of banks, pension funds and other institutional investors. More than 306 of Standard & Poor’s 500 (SPX) member companies, including defense contractors Lockheed Martin Corp. (LMT) and United Technologies Corp. (UTX), reported emissions to the group in 2011, up from 262 in 2009.

“Sustainability is one element of everything we do in the business world,” said Larry Allen, president of Allen Federal Business Partners, a procurement consulting firm. “It’s very important but it certainly has to be balanced against all the other things you want to accomplish, such as keeping competition reasonable.”

Agencies should be wary of viewing “sustainability as a ‘holy grail’ that is executable unto itself” by pushing companies to report and reduce emissions to the government when it’s not required in the private sector, Allen said.

To contact the reporter on this story: Nishad Majmudar in Washington at nmajmudar@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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