Building Boom

By Katherine McIntire Peters

September 1, 2010

Feds are supposed to be leading the way on clean energy, but they'll have to do more than overhaul outdated facilities.

It's been nearly a year since President Obama ordered federal agencies to "lead by example" in reducing energy consumption and pollution. Executive Order 13514 set goals for using less electricity and water at federal facilities and fuel in government-owned vehicles. Earlier this year, the White House expanded its scope and stipulated cuts to greenhouse gas emissions during the next decade from both direct and indirect sources, such as employee travel and industry emissions related to work on federal contracts.

The push to update facilities has the potential to cut substantially the government's $25 billion annual energy bill, which doesn't include military operations overseas, and to reduce the amount of carbon dioxide pumped into the atmosphere. Boosted by billions of dollars in Recovery Act funds, these efforts also could rejuvenate and modernize a struggling construction industry, which often takes its cues from government.

"The building industry doesn't move rapidly toward innovation because we're very disorganized, disaggregated and mostly made up of a lot of small players," says Phillip Bernstein, an architect and executive at Autodesk, a leading design firm that supports building designers and engineers. "One of the galvanizing forces for innovation in the building industry has been what the federal government is willing to do."

Buildings are responsible for 40 percent of the carbon in the atmosphere and the federal government is the nation's largest landlord, so the Obama administration's advocacy for sustainable building practices creates a unique opportunity, according to Bernstein. But only if the government overhauls its procurement and acquisition practices, he cautions. "Feds can build as many platinum LEED-certified buildings as they want, but it is not necessarily going to affect the performance of those buildings if no one's going to be held accountable for how they operate," he says.

The challenge is much bigger than building more efficient facilities or modernizing old ones. "What we tend to do in the building industry is make our selections on low first costs. We chop the whole process into little pieces, and then we buy the little pieces based on what's cheapest," Bernstein says. "We buy the cheapest architect, the cheapest engineers. We [award] the low-bidder contractor who takes the low-bidder subcontractors, and then we somehow expect that stuff to all aggregate into a thing whose performance and outcome are predictable and someone can be held accountable for them. But the system is not built that way."

It's a problem many recognize. Federal procurement regulation and the way agencies develop their budgets are often at odds with sustainability goals. "Everyone in the community would agree that green procurement is an area of improvement for agencies," said Michelle Moore, the federal environmental executive on the White House Council for Environmental Quality. She and senior Pentagon officials discussed the Defense Departments's challenges in meeting the energy conservation goals and pollution standards at a Government Executive leadership breakfast in July.

Defense manages 2.2 billion square feet of building space-10 times the square footage the General Services Administration oversees. It's fair to say the success of the administration's sustainability initiatives hinge on progress at the Defense Department, with 300,000 facilities ranging from hospitals to airport hangars in every climate imaginable.

"There's actually a process under way right now to update the Federal Acquisition Regulation to be able to better reflect these goals," Moore said.

But regulations are only part of the problem, according to Joseph Sikes, the Defense Department's director of facilities energy. There's also a disconnect between budgeters, who are focused on numbers, and facilities managers, who have to consider long-term energy costs and pollution levels well into the future.

"While the department as a whole believes in the sustainability goals and in the importance of energy and becoming more efficient for mission reasons, the people that do the budget are just looking at the numbers," Sikes said at the panel discussion. "And if the numbers don't connect to those things that we think are important, [budget officials are] not necessarily going to make the decisions we'd like for them to make."

While the administration has boosted the department's funding for energy conservation programs, money, or the lack of it, is only part of the challenge, he said. "We have to make the [entire budget] process be responsive to these sustainability goals and the energy goals, or we're not going to get where we want to in the end."

But Defense already has submitted its budget request for 2011, and the military services have completed their planning for 2012, which they are presenting to senior department officials. "We've issued policy on what they should budget for after they've already developed their budget-it's that type of disconnect in terms of the sequencing and timing that we have to address," said Maureen Sullivan, director of environmental management at Defense.

The budget reflects the department's efforts to comply with the 1990 Clean Air Act and the 1972 Clean Water Act, but doesn't align with the administration's environmental goals, she said. "We want to know how much [the services] are spending on environmental management systems, how much they're spending on reducing solid waste, how much they're going to spend on reducing greenhouse gases and energy efficiency," Sullivan said. "Well, those are in none of the budget displays. And so now we have to figure out how we are going to revise that whole process in a way that's consistent with the [Office of Management and Budget] guidance."

And then there's the issue of figuring what approaches are most green. "One of the biggest challenges in sustainability is that nothing is perfectly green. There are trade-offs between energy, water, what chemicals you're going to use," said Shannon Cunniff, the Defense executive responsible for implementing the executive order. "So one needs to make an informed decision and figure out what's right for our missions, what's right in terms of cost and in terms of needs now versus enduring needs in the future.

And it's not a simple thing."


By Katherine McIntire Peters

September 1, 2010

http://www.govexec.com/magazine/magazine-trends/2010/09/building-boom/32260/