Federal Procurement and PFAS: The Push (and Push Back) for Policy Change
The Biden Administration has prioritized addressing the environmental and health issues posed by the use of perfluoroalkyl or polyfluoroalkyl substances (PFAS), including use by federal agencies and the military. The Environmental Protection Agency (EPA) is already developing policy that applies to the procurement of products that contain PFAS. This is likely just the start of a broader effort to regulate PFAS in federal procurement. In an interesting twist, the administration is now opposing what it views as overly aggressive and thus unrealistic policies to combat PFAS. This remains a dynamic area and likely will remain so for the foreseeable future. In the meantime, it will be important for contractors to monitor the PFAS requirements and restrictions that currently apply to their contracts and track the policies developed that are likely to drive future changes to those requirements and restrictions.1
Focusing on PFAS in Procurement: EO 14057
President Biden issued Executive Order 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability (the EO), in December 2021. Section 208 of the EO discusses Sustainable Acquisition and Procurement. That section contains a directive that “Agencies shall … incentivize markets for sustainable products and services by prioritizing products that can be reused, refurbished, or recycled; … and, to the maximum extent practicable, purchasing sustainable products and services identified or recommended by the Environmental Protection Agency (EPA).” The EO was accompanied by a memo to guide agency compliance with the EO. The memo stated that “agencies should prioritize substitutes for products that contain” PFAS and that, “[t]o the maximum extent practicable and consistent with statutory mandates, agencies should avoid the procurement of PFAS-containing covered items.”
Push for More Restrictive Rules
The Council on Environmental Quality (CEQ), the body within the Executive Office of the President that coordinates the government’s environment related efforts, is developing Implementing Instructions for the EO. The Environmental Working Group (EWG), an environmental non-governmental organization, recently met with CEQ and the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) to discuss their ideas for the direction that federal procurement policy should take when it comes to PFAS. EWG recommends that the Implementing Instructions require the General Services Administration (GSA) to incorporate specific requirements into new and existing contracts under the Federal Supply Schedule (FSS), which is a huge, government-wide program for the procurement of commercial products and services. In particular, EWG believes that the FSS program should include only contracts for products without added PFAS as a class in product categories with safer alternatives, and contracts for non-conforming products should be phased out. EWG is also advocating for revisions to the Federal Acquisition Regulations (FAR) that would result in broader imposition of these requirements throughout the federal procurement system. And EWG recommends that the Implementing Instructions should make clear that products identified through government or “third party” certifications recommended by EPA—for example, under EPA’s Recommendations of Specifications, Standards, and Ecolabels for Federal Purchasing—should consider PFAS as a class of contaminants as opposed to a focus on individual PFAS. The EPA’s recommendations help US federal government purchasers utilize private sector standards and ecolabels to identify and procure environmentally preferable products and services. Being that the Federal government’s procurement budget is over $650 billion, the needs of Federal purchasers influence what is available for other purchasers to buy as well. The move to eliminate all PFAS from procured products would likely have impacts on the private sector marketplace as well.
If the White House were to adopt EWG’s recommendations, such adoption would mark a significant shift in procurement policy that could have profound impacts on procuring agencies and many government contractors.
Challenges Implementing Restrictive PFAS Standards
Efforts to restrict procurement of certain PFAS-containing products is not new. In the Fiscal Year 2020 National Defense Authorization Act, Congress set a 2024 phaseout deadline for firefighting foam containing PFAS, along with a closer deadline of January 2023 for the Secretary of the Navy to “publish a military specification for a fluorine-free fire-fighting agent for use at all military installations and ensure that such agent is available for use by not later than October 1, 2023.” Firefighting foam has been a policy focus because the foams used at military bases have historically contained PFAS, and PFAS has been found in the soil and groundwater in areas near military installations that have used the firefighting foams. To date, DOD has identified six “viable” substitutes for firefighting foam made with PFAS. Each of these potential alternatives, however, has significant drawbacks that prevent fully phasing out firefighting foam made with PFAS. Some of the alternatives are significantly higher cost and others require reliance on engineering controls rather than direct fire suppression. For now, DOD has concluded “no single technology is suitable for every situation.”
DOD’s challenges with firefighting foam are anecdotal in a sense, but they likely presage the types of challenges that DOD and other agencies will experience when transitioning away from PFAS in the near term and would face if an absolute prohibition were to be imposed. DOD’s experience with firefighting foam is likely one of the primary reasons why the White House opposed provisions that would increase restrictions on the procurement of items containing PFAS when proposed in the House version of the FY 2023 National Defense Authorization Act. In a Statement of Policy in response to the bill, the White House stated:
The Administration is concerned that [provisions] which would prohibit DoD from procuring a wide range of items that may contain PFAS and would significantly increase the number of PFAS to which the existing prohibition would apply (from two PFAS to hundreds of PFAS currently in commerce), would cause operational strains. DoD is collaborating with others across the Administration to implement President Biden’s Executive Order on Catalyzing Clean Energy Industries and Jobs through Federal Sustainability, including efforts to avoid procurement of products containing PFAS while ensuring we meet the needs of service members.
The statement indicates that the Administration is currently mindful about taking a measured approach to PFAS restrictions and the importance of accounting for the potential operational implications of restrictive policies.
Adding to the complexity of the issue is the focus on treating all PFAS as a class, and therefore trying to eliminate all PFAS from federal procurement. The Organisation for Economic Co-operation and Development (OECD) has stated that “[t]he term ‘PFASs’ is a broad, general, non-specific term, which does not inform whether a compound is harmful or not, but only communicates that the compounds under this term share the same trait for having a fully fluorinated methyl or methylene carbon moiety.” The upshot is that a substance containing PFAS does not necessarily pose any harm or risk of harm. In turn, an approach that covers all PFAS containing substances is arguably too broad, as some of those substances may not pose any risk and thus the downsides of restricting them are not warranted. Indeed, a blanket prohibition would undermine numerous critical priorities of the Biden Administration. For example, the Administration encouraged the passage of the CHIPS Act, which promoted domestic production of semiconductors. PFAS are vital to semiconductor manufacturing, and restricting procurement of PFAS-containing products—particularly using a broad and/or vague definition of PFAS—would be unworkable when considering how reliant our national defense is on technology containing semiconductors.
FAR Implementation on the horizon?
FAR 23.703(b)(1) already directs agencies in their acquisition planning to "maximize the utilization of environmentally preferable products and services (based on EPA-issued guidance)." With limited exceptions, like EnergySTAR and EPEAT, this does not translate directly into firm contractual requirements. There otherwise is no FAR clause that requires an offeror to certify that it will deliver products that fall under one of the EPA-approved programs, such as those approving products that do not contain PFAS. In the short term, companies may see non-standard clauses mandating delivery of products that meet the EPA guidance. The FAR Council has opened FAR Case 2022-006 to implement aspects of the EO and the associated OMB memo. This is expected to be a broad rulemaking that revamps FAR Part 23 and specifically addresses PFAS. It remains to be seen if there will be a separate clause dedicated to PFAS or, more likely, whether PFAS will be incorporated into a broader framework.
The intersection between environmental policy and federal procurement is garnering more and more attention these days, and the PFAS policies are a perfect example of the challenges that will continue to arise with increasing frequency. There inevitably will be tension between policies favoring limiting the use of substances containing PFAS and the fundamental procurement policies that focus on acquiring products and services that meet the government’s needs at reasonable prices. For now, there are few, if any, bright line rules at the contract level. Whether the policy continues to be implemented through preferences or ultimately takes the form of prohibitions, contractors will face complex challenges. PFAS are used in semiconductors, batteries, gaskets, seals, coatings, and other materials utilized in military, medical, aerospace, and energy applications, among numerous others. The vast array of applications that rely on PFAS and that are essential to national security, public safety, and other aspects of everyday life appears to not be lost on the Administration. However, the White House must address competing policy issues and it is vital for any entity that works with the federal government to ensure that the relevant policymakers are aware of the consequences of restricting PFAS products from federal procurement. Accordingly, now is the time for interested stakeholders to consider the EO and the developing policies in this area.
© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.
Companies should review solicitations and their contracts and understand any clauses that impose requirements or restrictions related to PFAS. Those could take the form of explicit restrictions through rogue clauses, or they could be imposed through the broader clauses associated with Federal Acquisition Regulation Part 23.