[Federal Register: December 18, 2001 (Volume 66, Number 243)]
[Rules and Regulations]               
[Page 65351-65353]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]





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

[FAC 2001-02; FAR Case 1999-011; Item II]
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: Final rule.


SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to implement 
Executive Order (E.O.) 13123 of June 3, 1999, Greening the Government 
through Efficient Energy Management.

DATES: Effective Date: February 19, 2002.

Building, Washington, DC, 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Laura Smith, Procurement Analyst, at (202) 208-
7279. Please cite FAC 2001-02, FAR case 1999-011.


A. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 65 FR 30310, May 10, 2000. The proposed rule--
    1. Defined in Subpart 2.1, Definitions--
    a. ``Energy-efficient product'' (relocated and revised from FAR 
    b. ``Energy-savings performance contract'' (ESPC); and
    c. ``Renewable energy'' and ``renewable energy technology'';
    2. Revised the policies and sources of authority in Part 11;
    3. Revised Part 15 to alert agencies to the special procedures at 
10 CFR 436.33(b) that agencies must use when evaluating unsolicited 
proposals for ESPCs;
    4. Revised and relocated guidance on energy-efficient products and 
services from Subpart 23.7 to Subpart 23.2 so that Subpart 23.7 would 
focus on environmentally preferably products and services;
    5. Revised 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    b. Deleting outdated definitions and guidance;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. Made a number of editorial changes. Seven respondents submitted 
public comments on the proposed rule. The Councils considered all 
comments when developing this final rule. The major changes between the 
final rule and the proposed rule are that the final rule--
    a. Provides additional emphasis on water conservation at FAR 
11.002(d)(2), 23.000(d), and 23.703;
    b. Deletes E.O. 12902 of March 8, 1994, Energy Efficiency and Water 
Conservation at Federal Facilities, at FAR 23.702(e) since this E.O. 
was revoked by Section 604 of E.O. 13123; and
    c. Revises 42.302(a)(68) to better reflect the current practices of 
the contract administration office.
    This is not a significant regulatory action, and therefore, was not 
subject to 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 Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management

[[Page 65352]]

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: December 5, 2001.
Al Matera,
Director, Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 11, 15, 23, and 
42 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, revise the definition ``Energy-efficient 
product,'' and add, in alphabetical order, the definitions, ``Energy-
savings performance contract,'' ``Renewable energy,'' and ``Renewable 
energy technology'' to read as follows:

2.101  Definitions.

* * * * *
    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- and water-efficient products and services, 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- 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 of Part 23 to read as set forth above.

    7. 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- and water-efficient products and services, 
environmentally preferable products, and products that use recovered 
materials; and
    (e) Requiring contractors to identify hazardous materials.
    8. Revise the heading and text of 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.

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

[[Page 65353]]

    (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 UnitedStates, 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 seq.).
    (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. 
This policy extends to all acquisitions, including those below the 
simplified acquisition threshold.

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'sFederal Energy Management 
Program (FEMP); or
    (2) When contracting for services that will include the provision 
of energy-using products, including contracts for design, construction, 
renovation, or maintenance of a public building, the 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.

    (a) Section 403 of Executive Order 13123 of June 3, 1999, Greening 
the Government through Efficient EnergyManagement, 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 energy-savings 
performance contract (ESPC), when life-cycle cost-effective, to reduce 
energy use and cost in the agency's facilities and operations.
    (b)(1) 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.
    (2) Except as provided in 10 CFR 436.34, ESPC's are subject to 
subpart 17.1.
    (c) To solicit and award an ESPC, the contracting officer--
    (1) Must use the procedures, selection method, and terms and 
conditions provided in 10 CFR part 436, subpart B; at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.eren.doe.gov/femp/resources/legislation.html; 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

    9. Revise the heading of subpart 23.7 to read as set forth above.

    10. Revise section 23.700 to read as follows:

23.700  Scope.

    This subpart prescribes policies for acquiring environmentally 
preferable products and services.

    11. Amend section 23.702 by removing paragraph (e), redesignating 
(f) as (e), and adding a new paragraph (f) to read as follows:

23.702  Authorities.

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

    12. Amend section 23.703 by revising paragraphs (a) and (b)(2) to 
read as follows:

23.703  Policy

* * * * *
    (a) Implement cost-effective contracting preference programs 
promoting energy-efficiency, water conservation, and the acquisition of 
environmentally preferable products and services; and
    (b) * * *
    (2) Promote energy-efficiency and water conservation.
* * * * *


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

42.302  Contract administration functions.

    (a) * * *
    (68) Monitor the contractor's environmental practices for adverse 
impact on contract performance or contract cost, and for compliance 
with environmental requirements specified in the contract. ACO 
responsibilities include--
    (i) Requesting environmental technical assistance, if needed;
    (ii) Monitoring contractor compliance with specifications requiring 
the use of environmentally preferable products, energy-efficient 
products, and materials or delivery of end products with specified 
recovered material content. This must occur as part of the quality 
assurance procedures set forth in Part 46; and
    (iii) As required in the contract, ensuring that the contractor 
complies with the reporting requirements relating to recovered material 
content utilized in contract performance (see subpart 23.4).
* * * * *
[FR Doc. 01-30539 Filed 12-17-01; 8:45 am]