STATEMENT OF DOBBINS CALLAHAN ON BEHALF OF THE BUY RECYCLED BUSINESS ALLIANCE BEFORE A HEARING OF THE UNITED STATES SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS ON FEDERAL PROCUREMENT OF RECYCLED PRODUCTS

July 11, 2002

Thank you, Senator Jeffords, Senator Smith and the full committee for the opportunity to speak today.

I serve as chair of the Buy Recycled Business Alliance (BRBA), an organization within the National Recycling Coalition dedicated to bringing purchasers and vendors of recycled content together in order to advance the purchase of recycled content products. My company, C&A Floorcoverings Inc, has been involved with BRBA for several years. We manufacture and sell high performance carpet products, available in a wide range of colors and styles and available with significant levels of recycled content. All of our products are also 100% recyclable.

Before I begin, I also want to commend the work of the ad hoc coalition – National Recycling Coalition, Steel Recycling Center, American Plastics Council, Recycled Paperboard Alliance, American Zinc Association, Consumer’s Choice Council – for recognizing the importance of green procurement and recycling, and working together to focus congressional attention on the GAO report.

The two aspects of Federal purchasing of recycled content products with which I am most familiar are, first, EPA's issuance of Comprehensive Procurement Guidelines (CPG's) and the Recovered Material Advisory Notices (RMANs) as prescribed by the Resource Conservation and Recovery Act 6002 (RCRA); and second, the General Services Administration's procurement process through the use of contracts with vendors. I am particularly familiar with issues involving Federal procurement of products that represent new and innovative technology, as would be the case of course with recycled content products.

Through my company's efforts to bring recycled content products into the Federal marketplace, I have personally been involved with the process of having products "designated" through the US EPA. "Designation" means that EPA has studied a product category, found suitable products within the particular category to be available with meaningful recycled content, and has determined the practical levels of recycled content that are commercially available to the Federal marketplace. Once products have been "designated" by EPA, the purchase of those products with recycled content is essentially mandated for Federal purchasers.

While I have the greatest respect for the people at EPA who are doing this work, and are impressed by their commitment, dedication, and hard work, intrinsic to the designation process are two obstacles to making innovative products available to Federal purchasers. The first obstacle in the Comprehensive Procurement Guideline process is that before "designation" can occur, there must be competitive products available offering comparable levels of recycled content. This is both a disincentive for a company to be first in the market place and also delays the imprimatur to purchase recycled products that EPA designation can provide.

I understand, and support, the wisdom of not mandating a product when there is only one supplier. Even the best of companies could be tempted under those circumstances. But the inability to designate a product because it is too advanced to have direct competition means that these products cannot be promoted in the Federal market place and are not given the benefit of the progressive procurement efforts conducted by the Office of the Federal Environmental Executive (OFEE). Until there is formal recognition under EPA’s CPG process, OFEE is somewhat limited in what it can do to promote purchases of a product regardless of the quality of the product or the recycled content.

My suggestion is that there be another category in the CPG / RMAN process. A product could be "recognized" to meet the intent of Executive Order 13101 and RCRA 6002, but not be designated because of lack of competition. This recognition would allow Federal agencies to use procurement of these products to meet 13101 goals, but procurement of these products would not be mandated. Currently, a recycled content product can be available with high levels of recycled content and suitable performance characteristics but will not be designated by EPA, and cannot be used by Federal purchasers to meet recycled content purchasing goals, simply because there is no similar competitive product with recycled content. I'll address pricing concerns in a moment.

The other obstacle to having recycled content products promoted to Federal purchasers is the sheer amount of time it takes to go through the designation process. It literally can take years to go through the evaluation process, the public comment period, the review period, and the designation. I want to reiterate that the people I have worked with at EPA are, without exception, hard working, dedicated and committed people with a willingness to do the right things. This is not an issue of the quality of people. To the contrary, faced with the Herculean challenges they face, I think they have had remarkable success. The first problem is that they simply don't have the resources available, in my opinion, to accomplish their task in a timely fashion. The second problem lies within industry itself. EPA has a very open process of inviting industry to participate from the inception of the review of a product category through its final designation. Along with the opportunity to influence regulations that this affords to industry should come an obligation to be responsible in the process. My experience is not encouraging in this area. Unfortunately, the research and designation process can be manipulated by less than complete information. Obviously, it is in the best interest of a manufacturer to appear to be complying with the intent of the proposed CPG designation. It is apparent that in this process some industry members have not been as forthright as the process is designed to encourage. If EPA had additional resources it would be able to at least spot-check some of industry’s claims in greater detail. EPA could also require companies submitting information to state they are in compliance with the FTC’s Guide to Environmental Marketing Claims.

The other aspect of Federal procurement that I would like to address is the General Services Administration and particularly the National Furniture Center in Arlington. GSA changed its procurement process several years ago from a "single award" schedule or contact to a "multiple award schedule" (MAS). Rather than vendors submitting products for bids in narrowly defined product categories, and having only one vendor for each contract, GSA now defines categories broadly, assigns specific criteria for a product to be included in the category, and then negotiates pricing with the vendor rather than obtaining competitive sealed bids. A means of negotiation is for the prospective vendor to document to GSA that its is offering the product at the lowest price it offers the same product to its best customers in the commercial market place. GSA therefore obtains for its customers the best price that competitive forces have established for the product. Because GSA uses the best competitive price, the need for sealed bids is eliminated and the Federal customers are still assured of "best value" purchases. While there are many advantages to this approach, the advantage that is significant to this issue is that GSA can and has placed recycled content products on the GSA contract, even if there is no other comparable products available with recycled content, and Federal purchasers can purchase these products without having to further competitively bid them. The Federal Acquisition Regulations recognize this process as establishing best value. If EPA can overcome the barrier of not recognizing products, which have no competition, GSA offers a vehicle to get these products to the Federal marketplace without the agencies having to be concerned with finding competitive recycled content products and with full assurance that pricing is at best value levels.

GSA is effective through other efforts as well. GSA nationally has a program, "Planet GSA," specifically structured to bring Federal agencies into contact with those companies that are providing products meeting Federal agencies needs for environmentally preferable products. These meetings, conducted periodically at strategic GSA locations across the country, provide the perfect venue for Federal customers who are interested in "buying green" to meet vendors with the best products for their needs. My experience with Planet GSA shows they have been exceptionally well done and are successful.

The next two programs are specific to the National Furniture Center. Through the NFC, the companies with the very best efforts in environmental initiatives are recognized with the "Evergreen Award." Not only does this award provide an incentive for vendors to offer more recycled content products; it also gives those companies who have won the award credibility and recognition with Federal purchasers, thereby encouraging the purchase of recycled content products. Also, several years ago, the Furniture Center established its "Quality Partnership Council." The purpose and result of the QPC is to bring vendors and Federal purchasers together to develop more effective and efficient means of procuring products through the Multiple Award Schedules. I was a participant of the QPC meetings for several years and saw as an observer how very effective this organization was in streamlining federal purchasing; including purchasing recycled content products. The QPC meetings have all the appearance of the most aggressive corporate board meetings, except they are run more efficiently. My suggestion is that all Procurement Centers expedite adopting the QPC concept. It is a model of efficiency and of industry and government working cooperatively for everyone's benefit.

The theme I have tried to develop is that most of the mechanisms are in place for much more effective purchasing of recycled content products by Federal purchasers. With adequate resources, a resolution of the "competitive" requirement, and a means to hold industry more accountable for comments made regarding proposed CPG's, EPA can be effective in designating more products quickly. GSA, through its Multiple Award Schedule has the vehicle to take these products to the Federal marketplace, and innovative programs like "Planet GSA, the Evergreen Award, and The National Furniture Center's Quality Partnership Council can reinforce the good work being done by the OFEE in its efforts at affirmative procurement.

Thank you.