[Federal Register: May 10, 2000 (Volume 65, Number 91)]
[Proposed Rules]               
[Page 30309-30312]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[[Page 30309]]


Part IV

Department of Defense

General Services Administration

National Aeronautics and Space Administration

48 CFR Parts 2, 11, 15, 23, and 42

Federal Acquisition Regulation; Energy Efficiency of Supplies and 
Services; Proposed Rule

[[Page 30310]]





48 CFR Parts 2, 11, 15, 23, and 42

[FAR Case No. 1999-011]
RIN 9000-AI71

Federal Acquisition Regulation; Energy Efficiency of Supplies and 

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.


SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) to implement Executive Order 
(E.O.) 13123 of June 3, 1999, Greening the Government through Efficient 
Energy Management.

DATES: Interested parties should submit comments in writing on or 
before July 10, 2000 to be considered in the formulation of a final 

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVRS), 1800 F Street, NW., Room 4035, ATTN: Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to: farcase.1999-
011@gsa.gov. Please submit comments only and cite FAR case 1999-011 in 
all correspondence related to this case.

Building, Washington, DC 20405, at (202) 501-4755 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Paul Linfield, Procurement Analyst, at (202) 501-
1757. Please cite FAR case 1999-011.


A. Background

    This proposed rule amends the FAR to implement E.O. 13123. The 
proposed rule--
    1. Defines in subpart 2.1, Definitions--
    (a) ``Energy-efficient product'' (relocated and revised from FAR 
    (b) ``Energy-savings performance contract'' (see 10 CFR 436, 
Subpart B); and
    (c) ``Renewable energy'' and ``renewable energy technology'' (see 
sections 710 and 711 of E.O. 13123);
    2. Revises the policies and sources of authority in Part 11;
    3. Revises part 15 to alert agencies to the special procedures at 
10 CFR 436.33(b) that agencies must use when evaluating unsolicited 
proposals for energy-savings performance contacts (ESPCs);
    4. Revises and relocates guidance on energy-efficient products and 
services from subpart 23.7 to subpart 23.2 so that subpart 23.7 now 
focuses exclusively on environmentally preferable products and 
    5. Revises subpart 23.2 by--
    (a) Renaming the subpart ``Energy and Water Efficiency, and 
Renewable Energy'' to reflect its expanded subject area;
    (b) Deleting outdated definitions and guidance;
    (c) Adding guidance on energy- and water-efficient products (e.g., 
ENERGY STAR) and services, and ESPCs; and
    (d) Directing contracting officers to sources for more detailed 
guidance and information; and
    6. Makes a number of editorial changes.
    The Councils proposed in FAR case 1998-015 other FAR amendments to 
Subpart 23.7 to implement E.O. 13101 of September 14, 1998, Greening 
the Government through Waste Prevention, Recycling, and Federal 
Acquisition. The Councils published a proposed rule on FAR case 1998-
015 in the Federal Register on September 23, 1999 (64 FR 51656). After 
comments have been reconciled, the Councils will publish a final rule 
on these other changes to Subpart 23.7.
    This rule was not subject to Office of Management and Budget review 
under section 6(b) of Executive Order 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

B. Regulatory Flexibility Act

    The Councils do not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because this rule simply provides additional guidance to Government 
contracting and technical personnel with respect to the Government's 
preference, currently set forth in FAR subpart 23.7, for buying 
environmentally preferable and energy-efficient products and services. 
This rule requires a contracting officer, when acquiring an energy-
using product, to purchase an energy-efficient product (where life-
cycle cost-effective and available), i.e., a product that is in the 
upper 25 percent of energy efficiency as designated by the Department 
of Energy's (DOE's) Federal Energy Management Program or that meets DOE 
and Environmental Protection Agency (EPA) criteria for use of the 
``ENERGY STAR'' trademark label. The 25 percent benchmark for 
determining energy efficiency is currently addressed at FAR 23.704. 
Small entities that offer products to the Government may use the ENERGY 
STAR label, if the product meets DOE and EPA criteria. The 
rule also provides guidance to contracting officers on the use of 
energy-savings performance contracts as alternatives to the traditional 
method of financing energy efficiency improvements.
    An Initial Regulatory Flexibility Analysis has, therefore, not been 
performed. We invite comments from small businesses and other 
interested parties. The Councils will consider comments from small 
entities concerning the affected FAR subparts in accordance with 5 
U.S.C. 610. Interested parties must submit such comments separately and 
should cite 5 U.S.C. 601, et seq. (FAR case 1999-011), in 

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
changes to the FAR do not impose information collection requirements 
that require the approval of the Office of Management and Budget under 
44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 2, 11, 15, 23, and 42

    Government procurement.

    Dated: May 4, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA propose that 48 CFR parts 2, 11, 15, 
23, and 42 be amended as set forth below:
    1. The authority citation for 48 CFR parts 2, 11, 15, 23, and 42 
continues to read as follows:

    Authority:  40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).


    2. In section 2.101, add, in alphabetical order, the definitions 
``Energy-efficient product,'' ``Energy-savings performance contract,'' 
``Renewable energy,'' and ``Renewable energy technology'' to read as 

2.101  Definitions.

* * * * *

[[Page 30311]]

    Energy-efficient product means a product that--
    (1) Meets Department of Energy and Environmental Protection Agency 
criteria for use of the Energy Star trademark label; or
    (2) Is in the upper 25 percent of efficiency for all similar 
products as designated by the Department of Energy's Federal Energy 
Management Program.
    Energy-savings performance contract means a contract that requires 
the contractor to--
    (1) Perform services for the design, acquisition, financing, 
installation, testing, operation, and where appropriate, maintenance 
and repair, of an identified energy conservation measure or series of 
measures at one or more locations;
    (2) Incur the costs of implementing the energy savings measures, 
including at least the cost (if any) incurred in making energy audits, 
acquiring and installing equipment, and training personnel in exchange 
for a predetermined share of the value of the energy savings directly 
resulting from implementation of such measures during the term of the 
contract; and
    (3) Guarantee future energy and cost savings to the Government.
* * * * *
    Renewable energy means energy produced by solar, wind, geothermal, 
and biomass power.
    Renewable energy technology means--
    (1) Technologies that use renewable energy to provide light, heat, 
cooling, or mechanical or electrical energy for use in facilities or 
other activities; or
    (2) The use of integrated whole-building designs that rely upon 
renewable energy resources, including passive solar design.
* * * * *


    3. In section 11.002, revise paragraph (d) to read as follows:

11.002  Policy.

* * * * *
    (d)(1) The Resource Conservation and Recovery Act of 1976 (42 
U.S.C. 6901, et seq.), Executive Order 13101 of September 14, 1998, 
Greening the Government through Waste Prevention, Recycling, and 
Federal Acquisition, and Executive Order 13123 of June 3, 1999, 
Greening the Government through Efficient Energy Management, establish 
requirements for acquiring--
    (i) Products containing recovered materials;
    (ii) Environmentally preferable products and services;
    (iii) Energy-efficient products and services; and
    (iv) Products and services that utilize renewable energy 
    (2) Executive agencies must consider use of recovered materials, 
energy efficiency, environmentally preferable purchasing criteria 
developed by the EPA, and environmental objectives (see subparts 23.2 
and 23.4 and 23.703(b)) when--
    (i) Developing, reviewing, or revising Federal and military 
specifications, product descriptions (including commercial item 
descriptions) and standards;
    (ii) Describing Government requirements for supplies and services; 
    (iii) Developing source selection factors.
* * * * *
    4. In section 11.101, revise paragraph (b) to read as follows:

11.101  Order of precedence for requirements documents.

* * * * *
    (b) Agencies must prepare requirements documents to achieve maximum 
    (1) Energy efficiency, including using renewable energy 
technologies; and
    (2) Use of recovered material, other materials that are 
environmentally preferable, energy-efficient and water-efficient 
products, and renewable energy technologies (see subparts 23.2, 23.4, 
and 23.7).
* * * * *


    5. In section 15.603, add paragraph (e) to read as follows:

15.603  General.

* * * * *
    (e) Agencies must evaluate unsolicited proposals for energy-savings 
performance contracts in accordance with the procedures in 10 CFR 


    6. Revise the heading and text of section 23.000 to read as 

23.000  Scope.

    This part prescribes acquisition policies and procedures supporting 
the Government's program for ensuring a drug-free workplace and for 
protecting and improving the quality of the environment by--
    (a) Controlling pollution;
    (b) Managing energy and water use in Government facilities 
    (c) Using renewable energy and renewable energy technologies;
    (d) Acquiring energy-efficient products and services, 
environmentally preferable products, and products that use recovered 
materials; and
    (e) Requiring contractors to identify hazardous materials.
    7. Revise subpart 23.2 to read as follows:

Subpart 23.2--Energy and Water Efficiency and Renewable Energy

23.200   Scope.
23.201   Authorities.
23.202   Policy.
23.203   Energy-efficient products.
23.204   Energy-savings performance contracts (ESPC).

23.200  Scope.

    (a) This subpart prescribes policies and procedures for--
    (1) Acquiring energy- and water-efficient products and services, 
and products that use renewable energy technology; and
    (2) Using an energy-savings performance contract to obtain energy-
efficient technologies at Government facilities without Government 
capital expense.
    (b) This subpart applies to acquisitions in the United States, its 
possessions and territories, Puerto Rico, and the Northern Mariana 
Islands. Agencies conducting acquisitions outside of these areas must 
use their best efforts to comply with this subpart.

23.201  Authorities.

    (a) Energy Policy and Conservation Act (42 U.S.C. 6361(a)(1)) and 
Resource Conservation and Recovery Act of 1976 (42 U.S.C. 6901, et 
    (b) National Energy Conservation Policy Act (42 U.S.C. 8253, 8262g, 
and 8287).
    (c) Executive Order 11912 of April 13, 1976, Delegations of 
Authority under the Energy Policy and Conservation Act.
    (d) Executive Order 13123 of June 3, 1999, Greening the Government 
through Efficient Energy Management.

23.202  Policy.

    The Government's policy is to acquire supplies and services that 
promote energy and water efficiency, advance the use of renewable 
energy products, and help foster markets for emerging technologies.

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23.203  Energy-efficient products.

    (a) If life-cycle cost-effective and available--
    (1) When acquiring energy-using products, contracting officers must 
purchase ENERGY STAR or other energy-efficient products 
designated by the Department of Energy's Federal Energy Management 
Program (FEMP); or
    (2) When contracting for design, construction, renovation, or 
maintenance of a public building that will include energy-using 
products, the design specification must specify or the agency 
specifications must require that the contractor provide ENERGY 
STAR or other energy-efficient products.
    (b) Information is available via the Internet on--
    (1) ENERGY STAR at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.energystar.gov/; and
    (2) FEMP at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.eren.doe.gov/femp/procurement.

23.204  Energy-savings performance contracts (ESPC).

    (a) Section 403 of Executive Order 13123 of June 3, 1999, Greening 
the Government through Efficient Energy Management, requires an agency 
to make maximum use of the authority provided in the National Energy 
Conservation Policy Act (42 U.S.C. 8287) to use an ESPC, when life-
cycle cost-effective, to reduce energy use and cost in the agency's 
facilities and operations.
    (b) Under an ESPC, an agency can contract with an energy service 
company for a period not to exceed 25 years to improve energy 
efficiency in one or more agency facilities at no direct capital cost 
to the United States Treasury. The energy service company finances the 
capital costs of implementing energy conservation measures and 
receives, in return, a contractually determined share of the cost 
savings that result.
    (c) To solicit and award an ESPC, the contracting officer--
    (1) Must use the procedures, selection method, and terms and 
conditions provided at 10 CFR part 436, subpart B; and
    (2) May use the ``Qualified List'' of energy service companies 
established by the Department of Energy and other agencies.

Subpart 23.7--Contracting for Environmentally Preferable Products 
and Services

    8. Revise the heading of Subpart 23.7 to read as set forth above.
    9. Revise section 23.701 to read as follows:

23.701   Applicability.

    This subpart prescribes policies for acquiring environmentally 
preferable products and services.
    10. Amend section 23.702 by revising paragraph (f) to read as 

23.702   Authorities.

* * * * *
    (f) Executive Order 13123 of June 3, 1999, Greening the Government 
through Efficient Energy Management.

23.703  [Removed]

23.704 through 23.706  [Redesignated as 23.703 through 23.705]

    11. Remove section 23.703 and redesignate sections 23.704 through 
23.706 as sections 23.703 through 23.705, respectively.
    12. In addition to the changes above, in newly redesignated section 
23.703, remove paragraph (b)(2) and redesignate paragraphs (b)(3) 
through (b)(6) as paragraphs (b)(2) through (b)(5), respectively.


    13. In section 42.302, revise paragraph (a)(68) to read as follows:

42.302  Contract administration functions.

    (a) * * *
    (68) Ensure contractor environmental practices are evaluated for 
possible adverse impact on contract performance or cost, and, as part 
of quality assurance procedures (part 46), monitor contractor 
compliance with environmental requirements specified in the contract. 
ACO responsibilities include, but are not limited to--
    (i) Requesting environmental technical assistance, if needed; and
    (ii) Ensuring that the contractor complies with--
    (A) Specifications requiring the use of environmentally preferable 
products, energy-efficient products, and materials or delivery of end 
items with specified recovered material content; and
    (B) Reporting requirements relating to recovered material content 
utilized in contract performance (see subpart 23.4).
* * * * *
[FR Doc. 00-11595 Filed 5-9-00; 8:45 am]