The Trump administration on June 12, 2025 issued the third tranche of changes under the “Revolutionary Federal Acquisition Regulation (FAR) Overhaul,” which revamp FAR Part 18 (Emergency Acquisitions), Part 39 (Information and Communication Technology) and Part 43 (Contract Modifications) by proposed class deviations.
As with the first and second rounds of changes, this third group of changes is relatively modest. Those changes are detailed below, and reflected in the attached “redlines” which show how the class deviations would change the existing regulations (see redline for Part 18, redline for Part 39 and redline for Part 43).
The latest round of changes leaves a number of problems unresolved. As was discussed in an earlier post, the implementing class deviations – which are really just individual agencies adopting centrally dictated deviations — are being issued without the normally required notice and comment. Second, if the “overhauled” provisions do face legal challenge, it will be difficult for a tribunal to assess the soundness of the deviations because relatively few reasons are being published to support the deviations, other than the asserted desire to eliminate all regulations not required by statute. Third, although they are often uniform, the class deviations are being issued on an ad hoc basis, agency by agency, part by part, all on different dates – which will make implementation and enforcement remarkably difficult and complex. (As of June 16, 2025, notably no unit of the Department of Defense – which conducts the largest share of federal procurements — had issued any class deviations under the overhaul.)
FAR Part 18 – Emergency Acquisitions
FAR Part 18 was developed in the wake of Hurricane Katrina, as a “single reference to the acquisition flexibilities already available in the FAR to facilitate and expedite acquisitions of supplies and services during all types of emergencies.” 71 Fed. Reg. 38247 (2006). As the attached redlined document suggests, it appears that the class deviation to FAR Part 18 will simply move that reference list of emergency authorities from the FAR to an accompanying “practitioner’s guide” – though that guide is not yet available (see GSA class deviation; link to https://acquisition.gov/emergencyprocurement does not work).
Part of the problem here stems from the “line-outs” being produced by the FAR Council, for these and other changes. Comparing the attached unofficial redline to the official “line-out” document published by the FAR Council shows that the official “line-out” does not reflect all of the changes; the official “line-out” appears to concede this. Id. (“This document is not a crosswalk to the new proposed FAR Part 18.”)
It is also worth highlighting the “smart accelerators” published as part of the training to be used with the new rules. These “smart accelerators” offer suggestions on how to speed procurements (both emergency and not). The “smart accelerators” suggest, for example, that procurement officials save time by focusing their “documentation to clearly capture the decisions – not deliberations.” In other words, procurement officials are being urged to reduce the record of their deliberations in order to save time. While these approaches may make procurements work faster, it may prove difficult to defend procurement decisions (in a bid protest, for example) if those decisions are not sufficiently documented.
FAR Part 39 — Information and Communication Technology
The accompanying redline reflects the proposed changes to FAR Part 39, which addresses procurements of information and communication technology (ICT). These class deviations will delete or move references to Office of Management and Budget circulars and modular contracting. The FAR overhaul will make it discretionary (rather than mandatory) for agencies to mandate minimum experience or educational requirements in solicitations. The FAR overhaul also deletes provisions regarding special prohibitions (such as against Kaspersky Laboratory products) which are dealt with elsewhere in the FAR. The overhaul generally aims to update the acquisition guidance from the Clinger Cohen Act of 1996, to improve and accelerate the procurement of ICT.
As with emergency acquisitions (see above), it’s worth highlighting the training materials which accompany the proposed FAR Part 39. The training materials may create conflicts with current law. The training materials call, for instance, for “[d]ialogue and interactive discussion” to speed procurement, but current FAR 15.102(f) (which has not yet been revised) says that when “an oral presentation includes information that the parties intend to include in the contract as material terms or conditions, the information shall be put in writing. Incorporation by reference of oral statements is not permitted.” As this example shows, it will be important to coordinate the training with existing legal requirements.
FAR Part 43 – Contract Modifications
There are no major changes to FAR Part 43, regarding contract modifications. The FAR Council’s summary of this class deviation acknowledges that, under this model class deviation, the FAR Part’s “[o]verhaul[ed] content remains the same – just more concise with renumbering of subparts.” The accompanying redline confirms that the overhaul makes very modest changes to FAR Part 43, going mainly to minor administrative details. The accompanying unofficial redline also confirms, as the FAR Council explains, that the “overhaul” actually extends the scope of FAR Part 43, by making modifications to task and delivery orders subject to the Part’s general requirements for contract modifications.
Conclusion
This third round of changes seems to confirm patterns in the “Revolutionary FAR Overhaul.” While the changes (at least so far) have been relatively modest, they have not been fully explained; indeed, the unofficial “redlines” which accompany this posting confirm that the changes proposed by the overhaul are more extensive than those reflected in the official “line-outs” published by the FAR Council. The proposed changes, as before, still bypass the public notice and comment normally required by law. Finally, the FAR Council’s accompanying training materials, though quite good pedagogically, suggest ways to accelerate procurement that in practice may conflict with the law.
The Trump administration has published the first tranche of reforms to the Federal Acquisition Regulation (FAR), part of the “Revolutionary FAR Overhaul” called for by Executive Order and direction from the Office of Management and Budget (OMB). The first tranche of completed rewrites go to FAR Part 1 (which describes how the FAR system is run), Part 34 (major systems acquisitions), and Part 52 (contract clauses). These first proposed changes are true to the direction from President Trump and OMB – they streamline the FAR — but they are, at least for now, relatively modest.
The FAR is the product of 250 years of regulatory development in the United States. As Jim Nagle explained in his landmark history of the U.S. government procurement system, the earliest U.S. law on procurement in 1775 drew on lessons from Europe and was used to support the Continental Army. The U.S. procurement system evolved over time (see C. Yukins, The U.S. Federal Procurement System: An Introduction) but the federal government’s procurement rules were not unified for over two centuries, until the FAR came into effect on April 1, 1984.
Click here for a very interesting webcast on this initiative with Ralph Nash, Jim Nagle, Vern Edwards and Don Mansfield
The FAR and its agency-specific supplements have become an extraordinary “operating manual” for the federal procurement community. While the FAR is dense (it is several thousand pages long), it reflects the accumulated learning of over two centuries of public procurement, almost certainly the longest unbroken commitment in modern times to the rule of law and a well-ordered procurement system. The FAR serves as the backbone to what many believe is the world’s most sophisticated procurement system, and dismembering the FAR could have serious implications for our nation’s security and well-being.
At the same time, however, President Trump was elected on a strongly anti-regulatory platform. In his first days in office he called for the elimination of ten old regulations for every new one (EO 14192), and on April 15, 2025 he issued Executive Order 14275, Restoring Common Sense to Federal Procurement, which mandated a comprehensive overhaul of the FAR.
The executive order said that, within 180 days (i.e., by mid-October), the Federal Acquisition Regulation Council (FAR Council), working with the Administrator of the Office of Federal Procurement Policy, heads of agencies, and senior procurement officials, “shall take appropriate actions to amend the FAR to ensure that it contains only provisions that are required by statute or that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.”
In a May 6, 2025 press release regarding the FAR overhaul process, the General Services Administration said, besides eliminating non-statutory and duplicative regulations and replacing burdensome requirements with straightforward buyer guides, the overhaul effort will “[r]emove DEI [Diversity, Equity and Inclusion] and wokeness.”
Sunset Requirement
Where the FAR overhaul process leaves provisions in place, under the Executive Order the OFFP Administrator and the FAR Council are to consider whether to set those regulations (or any new FAR provisions not required by statute) to “sunset” (expire) automatically within four years, unless renewed by the FAR Council.
Consistent with the Executive Order, the proposed rewrite would create a global requirement, under a new FAR 1.109, that all “FAR sections that are not required by statute must expire 4 years after the effective date of the sections,” unless approved by the FAR Council. The guiding OMB memorandum, discussed below, emphasized that “all FAR requirements not directed by statute that remain in the FAR [after the overhaul] will expire four years after the effective date of the rule unless renewed by the FAR Council.”
This appears to mean that, if provisions of the FAR remain in place once the overhaul is done, those provisions of the FAR will automatically implode after four years unless the FAR Council saves them. Because the rulemaking resulting in a revised FAR may last until 2026-2027, the FAR could collapse in the early 2030s. For the reasons outlined above, this could prove enormously disruptive to the federal procurement system.
OMB’s Plan To Overhaul the FAR
Pursuant to President Trump’s Executive Order, on May 2, 2025 OMB Director Russell Vought issued a memorandum calling for a “revolutionary” overhaul of the FAR.
The OMB memorandum emphasized that the “FAR will be refocused on its statutory roots.” Most regulations not based on statute, the memorandum said, “will be replaced with OFPP-endorsed buying guides that highlight proven innovative buying techniques for different phases of the acquisition lifecycle as well solutions and manageable procurement pathways for different types of common goods and services recognized by category management.” This embrace of new buying techniques echoes President Trump’s executive order on defense acquisition, and the procurement reforms proposed by Senate Armed Services Committee Chairman Roger Wicker.
The OMB memorandum explained that the “streamlined FAR and buying guides . . . will collectively be referred to as the Strategic Acquisition Guidance (SAG).” The Guidance is to “increasingly leverage technology over time,” to “provide a common-sense authoritative foundation for nimble response and delivery of mission capability.”
The OMB memorandum noted (and the overhaul website now confirms) that the public will be allowed to submit “informal” comments on the proposed changes; though those public comments will be considered, there will be no response from the FAR Council.
According to the OMB memorandum, after “the FAR Council has posted model deviation guidance for all FAR parts, it will turn to formal rulemaking” to overhaul the FAR. The rulemaking (discussed below) “will be informed by the model deviation text, public input on the text . . . , operational experience with agency deviations, recommendations from agency points of contact . . ., testing of the buying guides, and other appropriate inputs.”
How the Revolution Is Unfolding
The FAR overhaul team has now published the first tranche of reforms. The “Revolutionary FAR Overhaul” (or “RFO”) team is led by the Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council). The team has published proposed revisions to FAR Parts 1, 34 and 52. For each overhauled FAR part, and in accordance with the OMB memorandum, the team has presented:
proposed revised FAR text;
a “lineout” showing deletions from the current FAR; and,
model FAR deviations (individual (a deviation applicable to only one contract) or class (deviations which affect more than one contract)) that agencies can use to issue their own deviations to fill the regulatory gap until a rewritten FAR can be formally approved by the FAR Council after public review and comment.
Per the guiding OMB memorandum, agencies are expected to publish deviations within 30 days of publication of the proposed revisions by the overhaul team. By using stopgap FAR deviations and undertaking a full notice and comment process, the FAR overhaul team has reduced the risk of lawsuits challenging abrupt changes to the FAR without the full public process and review called for by 41 U.S.C. § 1707.
Proposed Rewrites: The First Step
The proposed new language for FAR Parts 1, 34 and 52 is relatively spare, which may be due to time constraints – per the Executive Order, as noted, the overhaul process must be completed within 180 days.
The rewrite team is not addressing the FAR parts in strictly numerical order, but has instead first published changes to scattered parts of the FAR. Beyond first streamlining FAR Part 1, which governs the regulators’ own work, it is not clear why the rewrite team leapt ahead to FAR Parts 34 and 52. Doing so, however, has offered important clues to how they might approach other parts of the FAR.
FAR Part 1 – The FAR System
The most thoroughgoing proposed changes are to FAR Part 1, which governs how the FAR is produced, administered and read. The accompanying “lineout” document (though it is not completely accurate) is one way to identify proposed changes to FAR Part 1, which include the following:
Vision Erased: The overhaul would delete the statement of the FAR’s vision which was quoted in the President’s executive order, “for the Federal Acquisition System . . . to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives.” This focus on best value (as opposed to low price) and the emphases on integrity and integrating policy objectives (such as socioeconomic requirements) into procurement have long been hallmarks of the U.S. procurement system. As with other deleted provisions, this statement may be moved to a “buying guide” – the rewrite team did not provide explanations for any of the proposed changes, or indicate what the next steps may be regarding deleted provisions.
Risk Management Retained: Notably, though many of the guiding principles set forth in current FAR 1.101-2 would be gutted, the revised section would still call for focus on risk management, not risk avoidance. Globally, other leaders in procurement (such as the OECD (2023)) have also stressed that modern procurement is, at its core, an exercise in risk management.
FAR Rulemaking Process Erased: The proposed rewrite would delete current FAR Subpart 1.2, which describes the role of the FAR Council and other stakeholders in maintaining the FAR, and FAR Subpart 1.5, which governs public participation in rulemaking under the FAR. It is not clear why these provisions were deleted, or whether these important topics (see Sandeep Kathuria’s analysis of the loss of public comments) would be addressed elsewhere, for example in non-binding guidance.
An Example of Legal Questions Raised by the Overhaul
As noted, the overhaul would delete the statement of the FAR’s vision, FAR 1.102 — which was endorsed in the President’s executive order directing the overhaul — “for the Federal Acquisition System . . . to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives.” Because there are no accompanying statements of explanation from the overhaul team, it is not clear whether:
The rewrite team has exceeded its authority, because President Trump, by executive order, has ultimate say over all issues of law in the Executive Branch?
The rewrite team has considered the case law which rests on this FAR language, such as AvKare, Inc. v. United States(COFC 2016) (a general point that Ralph Nash and Jim Nagle raised in their webcast (above))?
The rewrite team has the authority under Kisor v. Wilkie(U.S. Supreme Court 2019) to change course dramatically on a longstanding regulation (issued in January 1995)? Kisor (which discussed limits on agencies’ interpretations of their own regulations) was amplified by Loper Bright Enterprises(U.S. Supreme Court 2024) (where the Court said that agencies are not automatically entitled to deference in implementing statutes through regulations); Loper Bright in turn was embraced by President Trump’s recent executive order on unlawful regulation.
If, as OMB strongly recommends, within 30 days other agencies uniformly adopt their own class deviations that match the “model” GSA class deviation erasing this provision, are the other agencies’ class deviations legally authorized by FAR 1.402, which allows only for “deviations . . . when necessary to meet the specific needs and requirements of each agency“? (Emphasis added.) (The proposed overhauled provision, new FAR 1.304, would by amending the regulation arguably expand agencies’ authorities to issue class deviations — which again triggers the question of authority.)
The abrupt regulatory change may launch litigation which could delay the final rulemaking (due to begin in October 2025), and whether that in turn will delay the four-year “sunset” provision which is timed to implode the FAR in the early 2030s (see above)?
This substantive change in rules to be effective must go through the notice-and-comment required by 41 USC 1707?
Per a GSA press release of May 6, 2025 (see above), this change (1) is to erase non-statutory and duplicative regulations, (2) will be resolved by replacement with a buyer guide, and/or (3) is to “[r]emove DEI and wokeness“? Judicial review of the change could take very different pathways, depending on the purpose of the change.
FAR Part 34 – Major Systems Acquisition
The Trump administration overhaul also would delete FAR Subpart 34.1, which calls for full and open competition in major systems acquisitions. It is not clear why; again, no explanation was provided.
The subpart may have been deleted because current FAR 34.000 states that the subpart was based upon OMB Circular A-109 (see 1979 GAO report), and that OMB Circular was rescinded years ago (see OMB explanation). In fact, however, FAR Subpart 34.1 has a statutory basis as well, because it was updated to conform to the competition requirements of the Competition in Contracting Act of 1984, see 50 Fed. Reg. 1726, 1744 (1985).
Alternatively, Subpart 34.1 may have been deleted because the FAR overhaul team felt that its requirements were redundant to the full-and-open competition requirements in FAR Subpart 6.1.
Regardless of why it was deleted, the unexplained elimination of FAR Subpart 34.1 might be read by some to open the door to noncompetitive procurements of major systems – a potential challenge to the integrity of the procurement system which the FAR overhaul team may address when, in the forthcoming formal rulemaking, they explain why the subpart was deleted.
FAR Part 52 – Contract Clauses
The potential rewrite of FAR Part 52 raised serious concerns across the federal procurement community because the standard contract clauses in Part 52 reflect decades – sometimes centuries — of careful balancing of contractual risks between the government and its contractors. The standard clauses are especially vulnerable because the Trump administration is bent on removing regulations which are not based on statute, and many long-established clauses (such as the Default clause, which can be traced back to procurement imbroglios of the early 1800s) lack any statutory basis. But a wholesale elimination of FAR Part 52 and its hundreds of standard clauses would mean throwing away centuries of learning, and potentially upending thousands of contracts (and subcontracts, which often rest upon the same clauses).
The proposed overhaul of FAR Part 52 appears to be much more modest. The overhaul team has identified only two clauses which would be amended as a collateral consequence of the reforms to FAR Part 34, discussed above. The overhaul team has not, however, proposed class deviations which agencies might use to implement these changed clauses.
This leaves at least three possibilities:
Because the overhaul materials are not clearly drafted, one reading is that all of the rest of FAR Part 52 is to be removed to a “Buying Guide.” This would be enormously disruptive, for the reasons outlined above.
Alternatively – and more likely – the overhaul of FAR Part 52’s standard clauses may continue to unfold as other parts of the FAR (and their accompanying clauses) are revised.
Finally – and least likely – it is possible that no other standard clauses will be touched by the FAR overhaul.
Conclusion
The Trump administration’s “revolutionary overhaul” of the FAR has begun. Perhaps because of the short time allowed for this complex process, the first handful of proposed changes seem modest, at least on their face. The first proposed changes have clarified the process that the FAR overhaul team will be following, in accordance with President Trump’s executive order and OMB’s direction. The initial overhaul process is to be completed by mid-October, and formal rulemaking to make the changes permanent (with public notice and comment) probably will follow for some time after that. In the meantime, the federal procurement community (see Daniel Ramish’s analysis) is likely to follow these changes closely because of the profound structural importance of the FAR, the centerpiece to the United States’ highly advanced procurement system.
From 5-7 March 2025, South Korea’s Public Procurement Service hosted an extraordinary conference featuring centralized purchasing agencies from over half of the Organisation for Economic Co-operation and Development (OECD) member states, from North America, Europe and Asia. The conference presentations, available for download here, addressed next steps for central purchasing bodies, including in sustainability, procurement-for-innovation and artificial intelligence (AI). The program was kindly coordinated by Paulo Magina and Erika Bozzay of the OECD, and was led by Korean Public Procurement Service (PPS) Administrator Lim Ki-keun (left center front in photo below).
On December 9-11, 2024, GW Law’s Christopher Yukins met with classes of Professor Laurence Folliot Lalliot at the University of Paris – Nanterre, to discuss U.S. and comparative public procurement.
On December 9, 2024, in celebration of International Anti-Corruption Day, GW Law’s Christopher Yukins will join the International Anti-Corruption Academy (IACA) to discuss IACA’s future contributions to global efforts to fight corruption in public procurement.
Our work over the years with IACA has allowed us to explore how risk-based anti-corruption strategies complement – and strengthen – public procurement outcomes. Bid challenges (protests), for example, and contractor compliance, debarments and legislative oversight — all of these mitigate both the risks of failure in public procurement and the risks of corruption. The next step will be to integrate those risk-based anti-corruption strategies with international best practices, such as through the OECD and the European Union’s forthcoming revised procurement directives.
Spurred by the report on The Future of European Competitiveness led by former Italian Prime Minister Mario Draghi, institutions across Europe are examining how to promote innovation through public procurement. On November 13-14, 2024, GW Law’s Christopher Yukins met with his colleagues in Europe about these ongoing initiatives.
Photo: C. Yukins, N. Meershoek, W. Jannsen, E. Manunza, Elior Korem
At the University of Utrecht’s School of Law, Professor Yukins met with Professor Elisabetta Manunza and her team to discuss academic cooperation between the EU and U.S. procurement research communities. Among other things, they discussed ongoing research with NATO’s Defense Innovation Accelerator for the North Atlantic (DIANA). University of Utrecht Associate Professor Willem Janssen and University of Auckland professor Marta Andhov have dealt often with issues of innovation through procurement in their award-winning podcast, BESTEK. Utrecht Assistant Professor Nathan Meershoek has written extensively on the challenges of innovation in defense procurement; NATO’s unit to foster innovative technology, DIANA, is one answer to those challenges.
DIANA was established by NATO to find and accelerate dual-use innovation capacity across the Alliance. DIANA provides companies with the resources, networks and guidance to develop deep technologies to solve critical defense and security challenges.
Professor Yukins also met with Stephan Corvers and his team in s-Hertogenbosch. The CORVERS consultants are legal experts in strategic public procurement, innovation and contracting. CORVERS has been asked to help assess best practices in procurement for innovation, from around the world, on behalf of the European Assistance For Innovation Procurement – EAFIP, an initiative financed by the European Commission (DG CONNECT) to provide local assistance to public procurers to promote innovation and best practices.
A few days after those meetings, the European Commission announced a series of initiatives to advance innovation in procurement. Those initiatives included a public consultation on possible updates to the EU procurement directives — including, importantly, a review of how the directives might be updated to foster innovation.
On November 14, 2024, GW Law student Justin Duffy (JD Class of 2025) presented on reverse auctions across the U.S. states. He discussed the recent federal rule endorsing electronic reverse auctions (prior webinar), and a proposed federal rule which would bar reverse auctions for construction services. Drawing from the strengths and weaknesses of those federal rules, Justin reviewed reverse auctions in various states’ procurement systems — noting which states are ahead of and behind the federal regulations, and what a provision on reverse auctions might look like in the ABA Model Procurement Code, which is undergoing an update. He was joined by Ben Koberna, who has many years of practical experience in implementing reverse auctions across the United States and the world.
Around the world, governments are embracing “green procurement” – environmentally sustainable strategies to reduce global greenhouse gas emissions and other forms of pollution. A number of webinars we have held at GW Law School, including a July 2024 series on emerging international best practices, confirmed that there are many parallels between these “green procurement” strategies.
A ”catalogue” of green procurement strategies in the European Union and the United States, prepared by the European Commission and the Office of the U.S. Trade Representative, confirmed these common strategies on both sides of the Atlantic, as we discussed in a 2024 webinar; see Marta Andhov & Christopher Yukins, A Transatlantic Analysis of EU and U.S. Strategies In “Green Procurement,”66 Gov. Contractor ¶ 60 (Thomson Reuters, 2024).
The brief discussion below highlights some key potential changes to the UNCITRAL model law procurement to further these “green procurement” strategies. In many cases, the proposed changes would mean making the competitive process more flexible, to accommodate emerging approaches to environmental sustainability. A key question for drafters, therefore, would be whether existing Article 15 of the model law — which allows for changes to a solicitation — affords the flexibility necessary to make green procurement work.
For a broader review of potential updates to the UNCITRAL model procurement law — including in green public procurement — see the piece by Christopher Yukins and Caroline Nicholas (previously a member of the UNCITRAL Secretariat), The UNCITRAL Model Law on Public Procurement: Potential Next Steps
UNCITRAL Colloquium — October 2024
To address developments in green public procurement, on October 23-24, 2024, UNCITRAL held a Colloquium on the Law of International Trade for a Greener Future at the UN’s Vienna International Center.
UNCITRAL Colloquium Panel, 23 October 2024
The colloquium was called to discuss potential changes to a broad array of UNCITRAL model laws, to address environmental sustainability. Specifically with the regard to the UNCITRAL Model Law on Public Procurement, a panel chaired by Michel Nussbaumer (European Bank for Reconstruction and Development (EBRD)) and joined by Professors Carina Risvig Hamer (U. Copenhagen) (presentation), Roberto Caranta (U. Turin) (presentation) and Christopher Yukins (George Washington U.) (presentation), and by Reto Malacrida (World Trade Organization) (presentation), discussed (among other things) the green public procurement strategies addressed below.
Planning
The first strategy looks to procurement planning. Brazil has used this strategy aggressively in its efforts to implement “green procurement,” and the U.S. government in April 2024 issued a final rule calling for contracting officials to plan to procure sustainable and services “to the maximum extent practicable.”
To make it easier to incorporate “green procurement” into procurement planning, the UNCITRAL model law might be amended to:
Article 7 – Flexible Communications: Make it easier to change means of communication during the course of a procurement. Article 7 of the UNCITRAL model law calls for the means of communicating and record-keeping to be frozen during a procurement; as a practical matter, however, contracting officials may need to resort to new and unexpected means of interacting with industry and the broader community in order to accommodate new approaches to green procurement, which are rapidly evolving.
Article 10 – Flexible “Subject Matter”: The current version of the UNCITRAL model law requires, per Article 10, that the “subject matter” of the procurement – what will be bought, and how – must be fixed, inflexibly, early in the procurement process. Given the rapid advances in “green procurement” strategies, there may need to be more flexibility built into Article 10 so that vendors and others can recommend other, “greener” approaches during a procurement, even if that means amending the “subject matter” of a procurement.
Contractor Qualification
Having contractor qualification (contractor “responsibility” in the U.S. system) hinge on vendors’ “green” initiatives has long been a very controversial approach. In the U.S. system, for example, a proposed rule which would have forced vendors to chronicle their greenhouse gas emissions in order to qualify for federal contracts has been stalled due to strong congressional opposition. That opposition stems partly from the steep costs of compiling greenhouse gas emissions data, and from the uncertain impact that barring “non-compliant” contractors would have on the U.S. government’s supplier base. Because political opposition to this strategy is likely to ease as data on greenhouse gas emissions becomes more broadly and cheaply available, the UNCITRAL model law might be amended to accommodate the “contractor qualification” strategy by:
Articles 8, 9, 10 and 16 – Contractor Qualification: Taken together, the UNCITRAL model law’s relevant articles on contractor qualifications erect a fairly rigid framework. Article 8, for example, warns the procuring agency, “when first soliciting the participation of . . . contractors in the procurement proceedings, shall declare whether the participation of suppliers or contractors in the procurement proceedings is limited,” and any “such declaration may not later be altered.” These and other constraints under the model law are commendable anti-corruption measures, but may make it more difficult to accommodate emerging “green procurement” approaches. For example, rather than simply asking for a “clarification” (Article 16) of an environmentally related qualification criterion (Article 9), a bidder might recommend that other, equally powerful environmental qualifications be accepted – but Article 16 says that no “substantive change to qualification information or to a submission, including changes aimed at making an unqualified supplier or contractor qualified or an unresponsive submission responsive, shall be sought, offered or permitted.” By building more flexibility into the contractor qualification process, the UNCITRAL model law would make it easier to accommodate rapidly emerging “green procurement” approaches.
Eco-Labels
Eco-labels – typically certifications confirming that a product or service is “green,” i.e., causes low greenhouse gas emissions – are rapidly emerging as a popular “green procurement” strategy, probably because eco-labels are relatively cheap and easy to require and implement. Both the European Union (Directive 2014/24/EU, Art. 43) and the United States (FAR 52.223-23) have embraced eco-labels.
To facilitate eco-labels, the UNCITRAL model law could:
Article 10 — Nondiscriminatory Eco-labels: One common problem with eco-labels is that they tend to be localized and so discriminatory – an eco-label that is fully accepted in another market is unrecognized and so unaccepted in another. One solution would be to bring Article 10 into line with Article 43 of EU Directive 2014/24/EU, to ensure that eco-labels: (a) concern only “criteria which are linked to the subject-matter of the contract and are appropriate to define characteristics . . . that are the subject-matter of the contract; (b) “are based on objectively verifiable and non-discriminatory criteria”; (c) were “established in an open and transparent procedure in which all relevant stakeholders, including government bodies, consumers, social partners, manufacturers, distributors and non-governmental organisations,” could participate; (d) are accessible to all interested parties; and (e) were “set by a third party over which the [bidder] applying for the label cannot exercise a decisive influence.” These safeguards, many of which are drawn directly from the Court of Justice for the European Union’s decision in the “Max Havelaar” case (C-368-10), are not fully reflected in the current version of Article 10. Furthermore, because eco-labels are a form of technical specification, and as recital (71) of the EU Directive explains, “technical specifications should be drafted in such a way as to avoid artificially narrowing down competition,” and so where a solicitation references a national standard (such as an eco-label), “tenders based on equivalent arrangements should be considered by contracting authorities,” so long as the bidder can “prove equivalence with the requested label.”
Technical Evaluation
Another popular strategy is to incorporate “green procurement” considerations into the technical evaluation for award in a procurement – for example, to give a “greener” product (one that caused less greenhouse gas emissions) more “points” in the evaluation. The threshold challenge here is to ensure that there is sufficient information in the marketplace to make this kind of requirement workable. (This is why, for example, governments sometimes require vendors to compile information on their greenhouse gas emissions as a condition of qualification – see above.) If vendors’ “green” data on their products and services are available, that information could be more easily assimilated into procurements under the model law by:
Articles 10 and 58 — Flexible Technical Evaluation Criteria: The UNCITRAL model law’s Article 10 and Article 58 (its analogue in second-stage framework agreement competitions) make it relatively difficult to change technical evaluation criteria, once set forth in a solicitation. To make it easier to accommodate emerging “green procurement” approaches in a procurement, Articles 10 and 58 could be made more flexible to allow an agency, once a procurement has begun, to amend the solicitation to accommodate new green procurement strategies that emerge (for example) from exchanges with industry.
Life-Cycle Cost
One “green procurement” strategy is to take the full life-cycle costs of a product – including, potentially, its costs to the broader society due to greenhouse gas emissions – into account when assessing the product for award. To make this strategy work better under the UNCITRAL model law could be amended as follows:
Article 10 – Environmental Characteristics Clarified: Article 10 of the model law currently states that the evaluation criteria for award must include “the characteristics of the subject matter of the procurement, such as . . . the environmental characteristics of the subject matter.” The model law (and its Guide to Enactment) could be amended to make it clear that these “environmental characteristics” can be interpreted broadly to include all the direct and indirect environmental costs of a good or service, across the procurement life-cycle.
Notably, the model law’s Guide to Enactment (2012) already contemplates this broader view of environmental costs in its discussion of sustainable procurement, which in many ways anticipated the current round of reform:
Sustainable procurement is included as a declared objective of some procurement systems. UNCITRAL has noted that there is no agreed definition of sustainable procurement, but that it is generally considered to include a long-term approach to procurement policy, reflected in the consideration of the full impact of procurement on society and the environment, for example through the promotion of life-cycle costing, disposal costs and environmental impact. In this regard, sustainability in procurement can be considered to a large extent as the application of best practice as envisaged in the Model Law. The Model Law allows sustainability to be promoted through procurement via qualification criteria (under article 9, which expressly allows the procuring entity to impose environmental qualifications, and ethical and other standards that could include fair trade requirements).
The question, then, is how the model law itself should be amended to accommodate life-cycle costs as a “green procurement” strategy.
Conclusion
When the UNCITRAL model procurement law and its Guide to Enactment were concluded in 2012, “green procurement” was just emerging as a critical global imperative. As a result, “green procurement” was “not listed as a separate objective in the Preamble of the Model Law,” but instead was “addressed as an element of processes under the Model Law.” The global realities have shifted since then, and the time seems right to update the UNCITRAL model law and its guide to enactment to reflect advances in “green procurement” – and in our understanding of the impact of global warming on our lives.
Professor Daein Kim of Ewha Women’s University’s School of Law (Seoul) is visiting Washington with a team of fellow researchers from South Korea to share lessons learned on humanitarian assistance in fragile states. Professor Kim previously visited George Washington University Law School as a Visiting Scholar, and he is a long-time friend of GW Law’s Government Procurement Law Program.
The team’s visit is part of a broader initiative in South Korea to expand foreign aid. As an October 2024 article in the Korea Timesexplained:
The [South Korean] government is expanding financial support to developing countries, with its goal of becoming one of the world’s top 10 donors of official development assistance (ODA) before the end of President Yoon Suk Yeol’s term.
A main source of financing for international development assistance, ODA is government aid designed to promote the economic well-being and welfare of developing countries.
The areas of the country’s support range from the fight against climate change to the energy transition, agricultural transformation, education, digital technology and knowledge sharing.
Such support is being made in partnership with international organizations, such as the United Nations (U.N.) as well as Korea’s decade-long foreign assistance programs such as the Economic Development Cooperation Fund (EDCF).
Professor Kim and his team will be meeting with leaders in the procurement and aid communities in the United States to discuss how contracts, grants and cooperative agreements can be used to make foreign assistance more efficient and effective.
