DHSB chapter - Environmental purchasing in the City of ... · more than 372 U.S. mayors have committed to upholding ... , cities’ eco-friendly purchases have the ... DHSB chapter

Forthcoming in Garren, S., Brinkman, R. (eds.) Handbook of Sustainability: Case Studies and Practical Solutions.

London: Palgrave Macmillan.

Correspondence:NicoleDarnall,SchoolofPublicAffairsandSchoolofSustainability,ArizonaStateUniversity.Email:[email protected]

Environmental purchasing in the City of Phoenix

NicoleDarnall*ArizonaStateUniversityLilyHsuehArizonaStateUniversityJustinM.StritchArizonaStateUniversityStuartBretschneiderArizonaStateUniversityAbstractU.S.localgovernmentspurchase$1.72trillionofgoodsandservicesannuallythatcontributetoglobalclimatechangeandotherenvironmentalproblems.Citiesthatsuccessfullyimplementenvironmentalpurchasingpoliciescanmitigatetheseenvironmentalconcernswhilesavingmoneyanddemonstratingtheirenvironmentalleadership.However,citiesconfrontnumerouschallengeswhenimplementinganenvironmentalpurchasingpolicy.Thischapteridentifiesthefacilitatorsandbarriersofimplementinganenvironmentalpurchasingpolicy.ItdrawsontheexperienceswithintheCityofPhoenixasanexampleandofferseightrecommendationsforhowtheCityofPhoenixandsimilarcitiescanintegrateenvironmentalpurchasingmorefullyintotheirexistingpurchasingprocesses.Keywords:greenpurchasing,greenprocurement,environmentalpurchasing,sustainablepurchasing,sustainableprocurement,facilitators,barriers,implementation,publicpolicy

Background

WhiletheUnitedStates(U.S.)federalgovernmentwithdrewfromtheParisClimateAgreement,morethan372U.S.mayorshavecommittedtoupholdingtheAgreement’scommitmentstoreducegreenhousegases(U.S.ClimateMayors,2017).Onewaysomecitiesarefulfillingtheircommitmentsisthroughpurchasing.

U.S.citiespurchase$1.72trillionofgoodsandservicesannually(U.S.Census,2016),accountingforbetween25%and40%ofeverystateandlocaltaxdollarspent(Coggburn,2003).Purchaseditemsincludechemicals,electronics,furnishings,andofficematerials,whichallcontributetoglobalclimatechangeandotherenvironmentalconcernsduringtheirproductionanduse.Thesepurchasestogethercreateacarbonfootprintninetimesthatofbuildingsandvehiclefleets(U.S.GeneralServicesAdministration,2014).

Tomitigatetheseenvironmentalimpacts,somelocalgovernmentshaveimplementedenvironmentalpurchasingpolicies(EPPs).Alsoknownas“environmentallysustainablepurchasingpolicies”or“greenpurchasingpolicies,”EPPsimprovecities’internalefficienciesbyreducingenergyuse,conservingwater,anddecreasingthefrequencyofcertainpurchases.Theycanalsoleadtocostsavingswhilehelpingcitiesestablishthemselvesasenvironmentalleaders.



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Becauseoftheirlargepurchasingpower,cities’eco-friendlypurchaseshavethepotentialtostimulatetheglobalproductionofgreenproductsandservices(UnitedNationsEnvironmentalProgramme,2012;LiandGeiser,2005).Theyalsocancreatesignificantmarketincentivesforcompaniestoreconsidertheirexistingproductionprocesses,incorporateenvironmentalprinciplesintotheirdailybusinessroutines,andreducetheirenvironmentalimpacts(Case,2004).Bylocalgovernmentsencouragingtheirsupplierstoproduceanddelivergreenerproductsandservices,anestimated40%ofthesecompanieswill,inturn,assesstheenvironmentalactivitiesoftheorganizationsthatsupplythem(Arimura,Darnall&Katayama2011).Cities’eco-friendlypurchases,therefore,havethepotentialtocreatespilloverbenefitsthatextendupthesupplychainandacrosstheglobe,leadingtosignificantenvironmentalbenefits.

However,mostU.S.citieshavenotadoptedanEPP(Darnalletal.,2017).CitiesthathaveanEPPoftenstruggletoimplementthemfully(SustainablePurchasingLeadershipCouncil,2016;Darnalletal.,2017).Asaconsequence,manycities–largeandsmall–havenotrealizedthefullpotentialoftheirEPPstowardsmitigatingtheirenvironmentalimpacts.Moreover,marketshavebeenslowtodevelopgreenproductsandservices.ThesearesignificantconcernsthattheUnitedNationsEnvironmentalProgramme,theInternationalCity/CountyManagementAssociation,theSustainablePurchasingLeadershipCouncil,andothershavesuggestedmustberesolvedifwearetomovetowardanenvironmentallysustainableeconomy.

CaseStudy–TheCityofPhoenixOneexampleofalargeU.S.citythathasexperiencedseveralchallengesimplementingitsEPPis

theCityofPhoenix,thestatecapitalofArizona.ItisthefifthlargestcityintheU.S.withapproximately1,615,017residentsin2016(U.S.Census2017a).ItissituatedintheU.S.’s12thlargestmetropolitanarea(U.S.Census2017b)andhasexperiencedsignificantgrowthinrecentyears.Between2010and2015itspopulationincreasedby32%(U.S.Census2017b).Thearea’sabove-averagegrowthisexpectedtocontinue(Forbes2015),withanincreaseof2.2millionresidentsby2030(WorldPopulationReview,2017)andadoublingofitspopulationby2050(CityofPhoenix,2014).Allthesefactorswillincreasedemandsoninfrastructureandincreasegreenhousegases.

Againstthisbackdrop,andinthelasttenyears,theCityofPhoenixhasexperiencedincreasesinrecordedweatherevents,suchasdrought,temperatureincreases,andheatwaves(U.S.ClimateChangeScienceProgram,2008).Rapidurbanizationhasextendedtheurbanheatislandeffectoverlargerareasandlongerseasons,raisingnight-timetemperaturesbyasmuchas10degreescomparedtoadjoiningnaturalareas(Wittlinger,2011).Thesequalityoflifefactorsaffectbusinesses’decisionstolocateorexpandtheiroperationsinthearea(CityofPhoenix,2014).

Respondingtotheseconcerns,in2016,thePhoenixCityCouncilapprovedthe“Phoenix2050EnvironmentalSustainabilityGoals.”Thegoalsconsistofsevenambitioussustainabilitytargets,andonelong-termambitionofbecomingcarbonneutralbyoperatingon100%cleanenergy(CityofPhoenix,2017a).Phoenix2050articulatesthecommunity’sdesiretobecomea“SustainabilityDesertCity”(CityofPhoenix,2017a).

TheCity’sChiefSustainabilityOfficerandtheCity’sAdministratoroftheOfficeEnvironmentalPrograms(OEP)believedthathavingastrongEPPwouldbecriticaltomeetingPhoenix’s2050sustainabilitygoals.BothCityofPhoenixleadersalsoagreedthatenvironmentalpurchasingcouldsavetaxpayersmoney.Asanexample,theCity’sOfficeofSustainabilitydeterminedthatiftheCitypurchased100,000energy-efficientstreetlightsandreplacedtheexistinginefficientbulbs,itcouldcutcarbonemissionsbyupto60%(CityofPhoenix,2017c).Thepurchasewasalsoestimatedto



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savetaxpayersupto$22millionthrough2030duetoenergysavingsandreducedmaintenancecosts(CityofPhoenix,2017b).EnvironmentalPurchasing

TheCity’sinterestineco-friendlypurchasingtookrootin2007whenthePhoenixCityCouncilpassedResolution20519.TheresolutiongrantedauthoritytotheCityofPhoenixtodevelopanEPPthat:

1. Integratedcontractprovisionsforsustainableproductsandservices,wherethecontractprovisionswereupdatedasnecessarytoaddresschangesintechnologiesorchangesinenvironmentalconditions.

2. Consideredthepurchaseofproductsandservicesthatachievedthebestvalue,whichconsistedofprice,performance,andenvironmentalcharacteristicsoverthelifecycleofaproductorservice.

3. Supportedmanufacturersandvendorswhoseservices,production,anddistributionsystemsreducedenvironmentalandhumanhealthimpacts.

4. Encouragedbuyersandconsumerstoadoptsimilarpoliciesandprograms(CityofPhoenix,2007).

TheCityofPhoenixdevelopeditsEPPin2012(CityofPhoenix,2012),althoughby2016,ithadnotbeenimplementedfully.ThechallengefacingtheCityofPhoenix(andmanyotherU.S.cities)washowtointegrateitsEPPintoitsexistingorganizationalstructureandpurchasingsystemsgivendecreasingbudgetsandgreaterfocuswithindepartmentsonlow-costpurchases.

Additionally,purchasingwithintheCityofPhoenixwasnotcentralizedwithinasingledepartmentbutdecentralizedwithinindividualdepartments.Whileeachdepartmenthadsimilarcorepurchasingprocedures,therewassignificantvariationregardingthetypesofpurchasesmade(e.g.routinevs.non-routine,lowcostvs.highcost).Departmentsalsovariedintheautonomytheygrantedtopurchasingofficers,inadditiontopurchasingofficers’levelofspecializationandtraining.

WhiletheseissuescomplicatedEPPimplementation,theCityofPhoenix’sOEPAdministratorbelievedthatimplementingtheCity’sEPPwasimportant.Hewasopentoinnovativeapproachesthatmightassist.ThissettingledtoapartnershipbetweenOEPandtheCenterforOrganizationResearchandDesign(CORD),aresearchcenteratArizonaStateUniversity(ASU)thatpromotes,supports,andconductsfundamentalresearchonpublic,nonprofit,andhybridorganizationsandtheirdesign.

TheCityofPhoenix/CORDpartnershiphadtwogoals:1. DeterminewhichfactorsimpedeandfacilitateEPPimplementationwithintheCityofPhoenix;

2. DeveloprecommendationsforhowtheCityofPhoenixcouldimproveEPPimplementation.

ResearchApproachToachieveitspartnershipgoals,incooperationwiththeCityofPhoenix,CORDresearchers

completedaseriesoffocusgroupswithCitypurchasingemployees.Thefocusgroupsallowedforthecollectionofqualitativedatainasettingthatwasdynamicanduser-driven(Mertonetal.,1956).Theyprovideda“safe”environmentforpurchasingemployeestodiscusstheCity’sEPP.CORDusedasemi-structuredinterviewtoleveragethegroupcontextandcreateinteractionamonginterviewees.Thisapproachwasparticularlyimportantgiventhecomplexityofpurchasingwithinthecityandthelackofinformationregardinghowpurchasingemployeesintegratedenvironmentalconsiderationsintotheirexistingpurchasingprocedures.



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CORDidentifiedfocusgroupparticipantswiththeassistanceofOEPandinterviewed14Phoenixpurchasingemployees(acrossfivedifferentdepartments).TheCityassembledparticipantsintothreefocusgroups.ThefirstgroupconsistedofpurchasingemployeeswithintheFinanceDepartmentandtheDeputyDirectorofFinance.ThesecondandthirdgroupsincludedacombinationofpurchasingemployeeswithintheWaterServicesDepartment,PublicWorks,Aviation,andtheConventionCenter.

Eachfocusgroupsessionlastedbetween75and90minutes.OneCORDresearcherservedasthefocusgroupfacilitator.Thisindividualraneachsessionandaskedthesameinterviewquestionstoeachfocusgroup.ThreeotherCORDresearcherstooknotes.Thenoteswerecontentanalyzedandassessedforthepresenceofmajorthemes.Contentanalysiswasthepreferredanalyticalmethodbecauseofitshigherlevelofrigorandlowerriskoferrorcomparedtoothertypesofinterviewanalyses(Krueger&Casey,2001).Sincethefocusgroupdiscussionswerenotaudiorecorded,thequotesofferedinthesectionsbelowmaynotbeverbatimandrepresentaparaphraseofthegroupdiscussion.

FacilitatorsofEnvironmentallyPreferredPurchasingDespitetheirdiverseworksettings,theCity’spurchasingemployeeswerefairlyconsistentin

theiridentificationofthedifferentEPPfacilitators.CORDresearchersfocusedonthetopfivemostfrequentlydiscussed,whichaccountedforapproximately96%ofthethemesemergingacrossallofthefocusgroupsessions(seeFigure1).Thefivefacilitatorswere:knowledgeaboutsustainablealternatives,costeffectivenessandfinancialincentives,e-procurementsystem,departmentculture,andexecutive-leveldirectives.Thepercentagesassociatedwitheachfacilitatorreflecttheproportionofthetotalcommentsrelatedtoeachtheme.Acrossallthefacilitators,reducingcostswasaunifyingconcerninthatfocusgroupparticipantsoftensuggestedthatsuccessfuleco-friendlypurchasesweregenerallymotivatedbycost-savings.



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1. KnowledgeofEnvironmentallyPreferredAlternatives(32%)ThemostcommonlymentionedfacilitatorfortheimplementationoftheCityofPhoenix’sEPP

wasknowledgeofenvironmentallypreferredoptionsoralternatives.Withlimitedresources,manyfocusgroupparticipantsexpressedthattheydidnothavethetimeorcapacitytoresearcheco-friendlyalternativesforproductrequests.However,accesstoinformationaboutthesealternativescanhaveasignificantinfluenceonpurchasingdecisions.Focusgroupparticipantsalsoemphasizedtheneedforgreatereducationaboutenvironmentallypreferredoptions.“Therearesomanyoptionsforsustainableproductsthatdepartmentsmightnotbeawareofthemall.Educationandvendorforumsmightbeagoodwaytodistributeinformationtothedepartments.”“Atalldepartmentlevels,peopledonotknowwhatsustainableproductsareoutthere,andtheproductoptionsarecontinuallychanging.Weareconstantlyplayingcatchup.”2. CostEffectivenessandFinancialIncentives(24%)

Thesecondmostwidelycitedfacilitatorthatfocusgroupparticipantsdiscussedwascosteffectiveness,includingfinancialincentives(e.g.,federalenergyrebates).Ifeco-friendlypurchasescangenerateimmediatecostsavings,participantsnotethatthetransactionismorelikelytotakeplace.FocusgroupparticipantsnotedthattheCityofPhoenix’s2050goalsincludesignificantwaste-reductionmeasuresthataremotivatedbycostreductions.Environmentalimpactreductionsareoftensecondaryconcerns.“TheCityhasanefficiencyinitiativethatwilldrivechange.Forexample,theCityeliminatedalldesktopprinters.Printingnowoccursfromcentralizeddepartmentprinters.Thechangehascausedstafftoprintlessandwehavefewerordersforcartridges,printers,andpaper.Allofthishashelpedcontrolcosts.”“InitiativesthataremostsuccessfularetheoneswheretheCitysavesmoney.”“TheCitygeneratesalotofwaste.Eco-friendlypurchasesthatareregardedasmoresuccessfulreduceenvironmentalimpactsbycreatingopportunitiestosellthewastetheygeneratetovendorswhotakeitawayandrecycleit.”

Likewise,focusgroupparticipantsreportedEPPimplementationisfacilitatedbyfinancialincentives,suchasfederalorstaterebateprogramsforenergyandwaterconservation.Someparticipantsstatedthattheypursuepurchasesthatconserveenergyprimarilytoobtaingovernmentrebates,thussavingtheCitymoney.Thefactthatthesepurchasesarealsoeco-friendlyisasecondarybenefit.“Wearereducingenergyusage.Iftheelectricutilityhasarebateprogram,wehaveadesignatedenergypurchasertolookatittoseeiftheCitycanqualifyandsaveadditionalresources.”3. E-procurementSystem(20%)

FocusgroupparticipantsmentionedtheCityofPhoenix’snewe-procurementsystemasapotentialfacilitatorforimplementingtheCity’sEPP.Theybelievedthate-procurementcouldbeleveragedasacatalogingtoolthatcentralizestransactionrecordsabouteco-friendlyproducts,thusallowingthecitytotrackitsenvironmentallypreferablepurchasingactivities.Participantsalsomentionedthatcouplingthee-procurementsystemwithinformationaboutecolabeledproductscouldfurtherfacilitateEPPimplementationbecauseitwouldreducetheeffortrequiredtoidentifyenvironmentallypreferredproducts.WhiletheCity’se-procurementsystemhadthiscapability,itwasnotbeingusedinthisway.Participantscitedalackoftrainingasthemainreasonthesystemhasnotyetbeenleveragedtopromoteenvironmentallypreferredpurchasing.“Ithinkthee-procurementhasthecapabilitytoallowyoutotrackgreenpurchases,butIamnotsureitiscurrentlybeingusedinthisway.”



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“Ourwholecontractingprocessisnew.Understandingitinvolvesasteeplearningcurve.Eventuallythereshouldbesustainablepurchasingcatalogs.Environmentalspecificationsshouldbeincludedortrackedintherequestforproposal(RFP)process.”4. DepartmentCulture(12%)

Thefourthmostcitedfacilitatorthatfocusgroupparticipantsmentionedwastheroleofmanagementtoelevateenvironmentalconcernsasaprioritywithintheirdepartment.Participantsemphasizedtheimportanceoftop-managementinestablishingadepartmentculturewhereemployeesareexpectedtoimplementtheCity’sEPP.“Managementhastotaketheleadandsetthetone.Thiswillhelpmaketheprogramsuccessful.”“Otherthanencouragingwaterconservation—sustainabilityisnotdiscouraged,butitisalsonotactivelyencouraged.”“Gettingusersonboardwouldfacilitateenvironmentalpurchasing.Thegeneralmentalityisthatpeoplewanttopurchasegoodsfastandcosteffectively.Purchasingemployeesneedtolearnmoreaboutgreenpurchasingoptions.However,thesesamepeopletendtowanttogetthingsdoneandidentifyingtheseoptionstakestimeandcomeswithtradeoffsthatarenotalwayssupportedatahigherlevel.Departmentmanagersneedtoprioritizeit.”5. Executive-levelDirectives(9%)

ExecutivemandatesorpurchasingdirectivesfromtheCityMayororCityCouncilwerealsodiscussedasimportantmotivatorsforimplementingtheCityofPhoenix’sEPP.Atthedepartment-level,purchasingemployeesagreedthatwhilecostistheimmediateconcern,departmentswillprioritizedirectivescomingfromexecutivemandates.Forexample,theCityhasamayoraldirectivethatgivespreferenceforpurchasesfromsmallbusinessenterprises.Evenifotherbidsaremorecompetitiveintermsofcost,purchasingprofessionalsmustfirstconfirmthatsmallbusinessenterprisesareunabletoprovidethesameproductorservice.FocusgroupparticipantsindicatedthathavingasimilardirectiveforenvironmentalpurchasingwouldhelpfacilitateEPPimplementation.“Environmentalpurchasingneedsauthorityfromthecouncilandmayor.ItneedspowerliketheCity’sOfficeofLocalSmallBusinessEnterprises.”“Purchasingemployeescan’ttelltheirdepartmentswhattodo.ToimplementEPPacrossdepartmentswehavetogetdirectionfromdepartmentleadershiporthemayor.”

WhileCityCouncilpassedaresolutionfortheCity’sEPPin2007manyoftheCity’spurchasingprofessionalswerenotemployedbytheCityatthetime.PurchasingemployeesnotedthatreaffirmationoftheCityCouncil’ssupportfortheCity’sEPPwouldhelpfacilitateimplementation.“WeneedtheEPPtobebackedbyCityCouncil.Itneedstostatethatthisisapriority.”

Challenges/BarriersofEPPImplementation InadditiontoidentifyingfactorsthatwouldfacilitateEPPimplementation,thefocusgroupdiscussionsrevealedthattheCityhadfivesignificantchallenges/barrierstoimplementingitsEPP,whichaccountedforapproximately97%ofthethemesemergingacrossallofthefocusgroupsessions(seeFigure2).Costwasanoverarchingconcernacrossallbarriers.1. PurchasingManagementStructure(26%)

ThefocusgroupparticipantsidentifiedthatthetopbarriertoimplementingPhoenix’sEPPwasthecomplexityandvariationinhowpurchasingwasmanagedbythedifferentdepartments.Somelargerdepartmentshadnearlyautonomouspurchasingunits,whileotherdepartments’purchasing



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proceduresweremanagedthroughtheFinanceDepartment.FocusgroupparticipantssuggestedthatthesevariationspresentedasignificantbarriertointegratingtheCity’sEPPacrossdepartmentsbecausetheycreateinconsistenciesacrossdepartmentpractices.“TheCity’sdepartmentsaregenerallysiloed,whichcreatesalotofvariationinhowdepartmentsoperate.TheAviationDepartmentmightgoaboutpurchasinginawaythatiscompletelydifferentfromotherdepartments.SmallerdepartmentsmightgetsupportfromtheFinanceDepartment,buttheystilldotheirownthing.Atahigherlevel,thereisalotofpushforpurchasingtousenegotiatedcity-widecontracts.”“InthePublicWorksDepartment,internalpurchasingpersonnelsupportallthepurchasingneedsforourdepartment,facilities,fleetmanagement,andsolidwaste.Forpurchasesabove$50,000,wecooperatewiththeFinanceDepartmenttoawardmostcontracts.However,allpurchasesbelow$50,000arehandledatthedepartmentlevel.”“Ourdepartmentisaffectedbynegotiatedcity-widepurchases.Centralpurchasingmanagesthesetransactions,andtheyreachouttotheotherdepartmentsforfeedbackpriortomakingthepurchase.However,forthesepurchasestobesuccessful,eachdepartmenthastoagreeontheproductorservice.Theprocessofreachingagreementmakesitdifficulttopurchaseanything—letaloneanythingsustainable.”

AnotherbarrierintheCity’spurchasingmanagementstructurewasrelatedtocoordinationbetweenOEPandtheotherdepartments,whichreducedtheinfluenceoftheCity’sEPP.OEPactedasanenvironmentalpolicyadvisorfortheCity.WhileOEPprovideddepartmentsinformationonenvironmentallypreferredproducts,itlackedauthoritytorequireEPPimplementation.Additionally,OEPwasnotalwaysincludedinstrategicdiscussionsatahigherlevel,whichmightleadtofurtherEPPintegrationandthecreationofincentivesthatwouldencourageCitydepartmentstopurchasegreenerproducts.



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“OEPneedstobeontheCity’steamfortheimplementationofstrategicpurchasing.Itneedsmoreleverageatahigherlevel.”“OEPneedstobeincludedontheCity’sstrategicteam.”2. PurchasingEmployees’ServicePriorities(22%)

ThesecondmostcitedbarriertoEPPimplementationwastheserviceprioritiesoftheCity’spurchasingemployees.PurchasingemployeesfeltconstrainedtoimplementtheCity’sEPPbecauseoftheirbeliefthatenvironmentallypreferredoptionsgenerallycostmoreintheshort-term,whichconflictswiththeirlimitedoperatingbudgets.Additionally,theyfeltrestrainedbytheirinternalclients’needforexpedientpurchasesbecausetheyreportthatittakestimetosearchforandidentifyeco-friendlyproductsalternatives.“Thechallengethatpurchasingemployeesfaceisthatweareoftenreactingtotheimmediateneedsofdepartments…Wearetryingtoexecuteapurchasequicklyanddon’thavetimetosearchforalternatives.”“Iamworkingontheclientsideofthepurchasing.Itrytofigureoutwhattheenduserneeds.Itrytogetthebestpriceandbestservice.Ihelpclientsdotheresearch—Ikeepaneyeonperformance,quality,andprice.”“Weexecute1,500-2,000contracts,400formalpurchasesperyear.Ourresponsibilityistoservethedepartmentsbygettingthemwhattheyneedquickly,bycomplyingwiththelaw,andsavingmoneyfortaxpayers.”3. ScopeofWork/TechnicalSpecifications(15%)

FocusgroupparticipantsidentifiedthatthethirdsignificantbarriertoEPPimplementationwasthescopeofwork/technicalspecificationsintheirRFPsandcontracts.Apriorityforpurchasingemployeeswastomeetthespecificationsanddemandsofthebid.Accordingtofocusgroupparticipants,environmentallypreferredproductsoftenhavetomeetahigherbar.Thatis,eco-friendlyproductsandservicesmustbecosteffective,andmeetor(moreoften)surpasstheperformanceofthecontract’stechnicalspecifications.Generally,thesetechnicalspecificationsfocusonproductperformanceandhavelittletodowithenvironmentalimpact.“Ithinkthebiggestpriorityformyworkistofulfiltheexpectationsoftheenduser.Someenvironmentallypreferredproductsdonotworkaswellasconventionalproducts.Sometimestheuserwilltryaproductanditjustdoesnotwork.Wehavetogetproductsthatmeettheend-user’sneeds.”“Itdependsonthepurchase.Incustodialservices,wecanwritetechnicalspecificationsthatrequiretheuseofproductsthathavelowerenvironmentalimpact.However,thecostandtheneedofthecustomermatters.”“Oneinstancewhereitwasbettertogowitharecycledproductwaswithrecycledtonercartridges.Departmentspushedforrecycledtonercartridgesintheirtechnicalspecificationsbecausethesecartridgesperformedaswellasnon-recycledcartridgesandwerecheaper.”4. BurdensofExecutive-levelDirectives(14%)

Thefourthbarrierwasrelatedtotheideathatwhilethedirectivesattheexecutive-level(Mayor,CityManager,CityCouncil)canserveasfacilitatorsofEPP,theywereproblematicbecausetheymighthavecompetedwithothermandates,suchastheLocalSmallBusinessEnterpriseProgram,whichprioritizessmallbusinessesincontracting.Competitionarisesbecausesmallbusinessesmaynothavethecapacitytoofferenvironmentallypreferredproductoptions.Focusgroupparticipantsalsoworriedthatexecutivemandatesforenvironmentalpurchasingmighthaveunnecessarilyconstraineddepartments.



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“Environmentalpurchasingmightnegativelyaffectthemayor’sLocalSmallBusinessEnterpriseProgrambecauselocal/smallbusinessesmaynotgetgreenproductsatlowprices.”“City-wideinitiativesofallsortsareachallenge.Theairportneeds24-houroperation—thiscreatesdifferentorganizationalneeds.Theairportmightneeddifferentvendorsthatmeetfederalsafetyrequirements.Also,theairporthasdifferentinsurancerequirementsfromvendors.”5. BudgetaryConcerns(10%)

Thefinalbarrierthatfocusgroupparticipantsdiscussedwasrelatedtobudgetaryconcerns.Departmentbudgetshadnotbeenstructuredtoconsiderlife-cyclecostsofpurchases.Thesecostsincludedavoidingrisktohumanhealth,disposalcostsafteraproductisused,andenergysavingsthataccrueovertime.Rather,theCity’sbudgetingprocessemphasizedtheimmediatecostofagoodorservice.ParticipantsacknowledgedthatthisposedasignificantobstacletoimplementingtheCity’sEPP,sincemanyeco-friendlypurchasescouldbejustifiedifconsideringthelife-cyclecostsofaproduct.“Inthecontextoflightbulbs,somepeoplewouldratherpaymoreoverthelongrunforinefficientlightbulbs.Ourusersareeducatedenoughtoseethevalue—butattheendoftheday,theywouldratherhavethenickeltodaythanadimetomorrow.”“Whenwearetryingtoswitchtogreenproducts,wehavetoconsiderbudget.Initialcostdrivesmostdecisions.”“Departmentdirectorslookattherestoftheyear’sbudgetatthreemonths.Iftherevenuesaren’tcominginastheyhadanticipated,theybeginlookingathowtocutthebudget.Whenthishappens,nooneisgoingtobuythemoreexpensiveLEDlightbulbevenifitsavesmoneyinthefuture.”“Whilethecityencouragesustopurchaseenvironmentalfriendlyproducts,thechallengehasbeencost—departmentshavetobalancebudgetsagainstsustainability.”

LessonsLearnedInsum,theCityofPhoenixfocusgroupparticipantssuggestedthatfivefactorshadthepotential

tofacilitatetheCity’simplementationofitsEPP:1. KnowledgeofEnvironmentallyPreferredAlternatives2. CostEffectivenessandFinancialIncentives3. E-procurementSystem4. DepartmentCulture5. Executive-levelDirectives

However,multiplebarriersexistedthatpreventedfurtherimplementation:1. PurchasingManagementStructure2. PurchasingOfficers’ServicePriorities3. ScopeofWork/TechnicalSpecifications4. BurdensofExecutive-levelDirectives5. BudgetaryConcerns

Recommendations

Drawingonthesefindings,CORDresearchersofferedeightcross-departmentalandcity-levelrecommendationstohelptheCityofPhoenixmorefullyintegrateitsEPPintoexistingpurchasingprocesses.

Recommendationsatthedepartment-levelincluded:



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1.ReinvigoratetheCity’sEPPTeamWhiletheCityhadan“EPPteam”consistingofpurchasingprofessionalsacrossdepartments

andpersonnelfromthePhoenix’sOEPitwasnotactive.TheCityshouldreinvigoratethisteamtoharmonizepurchasingpracticesandreduceinconsistenciesacrossdepartments.TheEPPteamshouldalsoworkwithpersonneltonegotiatecity-widepurchasestoensurethatcontractingmandatesare,toeveryextentpossible,linkedwithbudgetadjustmentsatthedepartmentlevel.Further,theEPPteamisadvisedtoensurethatcity-widepurchasesconsiderenvironmentallypreferredalternatives.

2.NetworktoShareBestPractices

TheEPPteamandPhoenix’sOEPshouldstrengthennetworkstosharebestpractices.ProfessionalnetworkssuchastheInternationalGreenPurchasingNetwork,ResponsiblePurchasingNetwork,andSustainablePurchasingLeadershipCouncilsupportgreenpurchasingacrossalltypesoforganizations.Theyhelpmemberssharebestpractices.ParticipatinginthesenetworkscanassistthePhoenix’sEPPteamandOEPprogramslearnadditionalwaystointegrateenvironmentalpurchasingintoexistingroutinesandprocesses,toidentifyinnovativesolutionsaroundgreenpurchasing,andtoenhancevendorrelations.ThesenetworkscanalsoinformtheCityofexternalsupport,suchasgrants,educationalprogramsandawards/recognitionsthatcanassistwithEPPimplementation.

3.BroadenRepresentationontheCity’sStrategicPurchasingTeam

TheCity’steamforstrategicpurchasingshouldbebroadenedtoincludetheOEPAdministrator.Doingsowouldensurethatenvironmentallypreferredpurchasingisconsideredinstrategicpurchasingcity-wide.RepresentationwouldalsoprovideimportantfeedbacktoOEPwithrespecttoissueswhichneedaddressinginordertofurtherintegrateenvironmentalconsiderationsintothepurchasingprocess.

4.ImplementEPPTraining

TheCityofPhoenix’sOEPshouldcoordinatewithotherdepartmentstoofferinternaltrainingonenvironmentallypreferredpurchasing.Trainingshouldbeofferedtobothpurchasingemployeesandcoverhowscopesofwork/technicalspecificationscanbebroadenedtoincludeenvironmentallypreferredproducts,howpurchasingemployeescanaccessinformationaboutenvironmentallypreferredalternatives,andhowlife-cyclecostsshouldbeconsideredwhendevelopingtechnicalspecifications.

5.IntegrateEcolabelInformationintoE-procurement

TheU.S.EnvironmentalProtectionAgencyhasidentifiedalistofmostpreferredecolabelstofacilitateeco-friendlypurchaseswithingovernment(USEPA,2017).ThislistisbasedonanindependentassessmentofprivatesectorenvironmentalperformancestandardsandecolabelsusingtheEPAGuidelinesforEnvironmentalPerformanceStandardsandEcolabels(USEPA,2017).TheCityofPhoenixshouldlinkitse-procurementsystemwiththislistsothatpurchasingemployeescanmoreeasilyidentifywhichproductsaremoreenvironmentallyfriendlythanothers.

6.ExpandLife-CycleCosting

OEPshouldexpanditsthelife-cyclecosting(LCC)ofproductsandlinkthesecoststodepartmentalbudgetswheneverpossible.LCCisaprocessofreviewingandevaluatingtheenvironmentalcostsofaproductthroughouttheproduct'sentirelife-cycle-from"cradletocradle"



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(USEPA2006).Forexample,energyefficientappliancescanbemoreexpensiveattheinitialpointofpurchasebutwillsaveenergy(andmoney)throughouttheappliancesworkinglife.LCCcanhelpidentifyproductsthatcomplywithtechnicalspecificationsandhavethelowesttotalcost.Moreover,usingLCCisconsistentwiththeCity’sEPPguidelinestoremainfiscallyresponsibleandcanprovidethebusinesscasetodepartmentsaboutthevalueassociatedwithpurchasingmoreenvironmentallyfriendlyproductsandservices.

Recommendationsforchangeatthecity-levelinclude:

7.DevelopanExecutiveDirectiveforEnvironmentallyPreferredPurchasingTheCityshoulddevelopanexecutive-leveldirectiveonenvironmentallypreferredpurchasing

similartoitsLocalSmallBusinessEnterprisedirective.Thisdirectiveshouldincludeareservecontractprogram,whereselectedgoodsandservicesarereservedforcompetitiononlyamongeco-friendlyproductsthatdemonstratesignificantreductionsinlife-cyclecosts.Amandateattheexecutive-levelwouldfosterastrongerdepartmentalculturearoundEPP,aswellasencouragegreaterinnovationandmovementatthedepartment-levelaroundgreenpurchasing.

8.CreateIncentivesforEPPImplementation

ThefinalrecommendationisthattheCityshouldcreateincentivesacrossalldepartmentsforimplementingitsEPP.Doingsowouldhelpcreateaculturethatencouragescreativityandrewardseco-friendlypurchasing.TheseincentivesshouldbemadeinconjunctionwiththeEPPTeamandincluderecognitionsforunits(orindividuals)thatuseLCCtoreducelong-runpurchasingcosts.Sinceinitialpurchasecoststakepriorityformostcitypurchases,departmentsshouldbegrantedlatitudetopurchasegoodsandgeneralservicesthatmayextendbeyondtheimmediatebudgetconstraintsbutwillsavetheCitysignificantresourcesovertime.Otherincentivesincludecompetitionsamongdepartmentsoracrosspurchasingcategoriestoreducelife-cyclecostsofpurchases.

Epilogue

InFebruary2017,CORDresearcherspresentedtheirrecommendationstotheCityofPhoenixAdministratorofOEPandtheCity’sDeputyFinanceDirector.ThepartnershipbetweentheCityandASUhelpedbuildmomentumaroundimplementingtheCity’sEPPbyengagingcriticalstakeholdersinthepurchasingprocess.InMarch2017,theOEPAdministratorstated:

“PhoenixwillusethefeedbacktoimprovetheCity’ssustainablepurchasingprogramandadvancetheCity’s2050environmentalsustainabilitygoals.Theresearch…willhelp[us]developaholisticprogramthatengagestheCity’sbuyerstoincreasegreenpurchasing,”(Newberry,2017).Sincethepartnership’scompletion,severalotherchangeshaveoccurred.Thefocusgroup

discussionshelpedOEPunderstandtheextenttowhichtheCity’spurchasingemployeesbelievedthateco-friendlyproductscostmorethantraditionalproducts.Inresponse,OEPhasenhanceditsLCCtoshowCityofPhoenixdepartmentsthatpurchasingeco-friendlyproductscanreducecostsoverthelifecycleoftheproduct(Faller,2017).Additionally,OEPhascontinuedmodifyingtheCity’se-procurementsystemtomakeiteasiertobuyenvironmentallypreferableproducts(Faller,2017).

Insummer2017,theCitybegantoreviseitsEPPtoprovidemoreguidancetoCityofPhoenixpurchasingemployeessothateco-friendlypurchasingcanbeexecutedmoreeasily.Aspartofthisrevision,OEPbegantobroadenitsEPPtoincludethesocialaspectsofpurchasinginanew“SustainablePurchasingPolicy”(SPP).TheCity’sevolvingSPPincorporatesseveralpurchasingprogramsthatpreviouslyexistedoutsideofOEP,suchastheCity’sfocusonpurchasingfrom



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minority-ownedbusinesses,women-ownedbusinesses,andlocally-ownedbusinesses.AlltheseeffortswillhelptheCitymeetitsPhoenix2050sustainabilitygoalsanditsmorerecentcommitmenttoupholdtheprovisionsoftheParisClimateAccord(Gardiner,2017).

FurtherReading

DarnallN,StritchJM,BretschneiderS,HsuehL,DuschaM,IlesJ,NoW,SuarezJ,BurwellC.2017.AdvancingGreenPurchasinginLocalGovernments.Phoenix:ArizonaStateUniversity,CenterforOrganizationResearchandDesign,SustainablePurchasingResearchInitiative.

DarnallN,StritchJM,BretschneiderS,HsuehL,NoW.2017.Goinggreenonpurchasing:eightpracticestoreduceenvironmentalimpacts.PublicManagementMagazine,August27,p.28-29.

Gardiner,D.2017.MayorGregStanton:despiteU.S.withdrawal,PhoenixwillsupportParisclimatepact.AZCentral,June1.azcentral.com/story/news/local/phoenix/2017/06/02/mayor-greg-stanton-despite-u-s-withdrawal-phoenix-support-paris-climate-pact/363450001/,lastaccessed5September2017.

NotesonContributors

NicoleDarnallisaprofessorofmanagementandpublicpolicyatASUintheSchoolofPublicAffairsandtheSchoolofSustainability.SheisassociatedirectorofASU’sCORDandteamleaderoftheSustainablePurchasingResearchInitiative(SPRI).Herresearchfocusesonfactorsthatfacilitateorimpedetheenactmentoforganizationalsustainabilityandindividuals’sustainabilitybehaviors.LearnmoreaboutSPRI’sresearchatspa.asu.edu/spri.

LilyHsuehisanassistantprofessorofpublicpolicyatASU’sSchoolofPublicAffairs.SheisaCORDSeniorAffiliate,andSeniorSustainabilityScientistatASU’sJulieAnnWrigleyGlobalInstituteofSustainability.Herresearchfocusesontheemergence,evolution,andimpactsofvoluntaryprogramsandmarket-basedpoliciesacrosspolicyissueareas,suchasclimatechange,toxicchemicals,oceanandmarineresources,andsustainablepurchasing.

JustinM.StritchisanassistantprofessorofpublicmanagementatASU’sSchoolofPublicAffairs.HeisCORDSeniorAffiliateandResearchFellowatSFI-TheDanishNationalCentreforSocialResearch.Hisresearchfocusesonemployeemotivation,management,performance,anddecision-makinginpublicorganizations.Heappliesthesetopicstoavarietyofsettings,includinghoworganizationscanencourageworkplaceparticipationinpro-environmentalbehavior.

StuartBretschneiderisFoundationProfessorofOrganizationDesignandPublicAdministrationatASU’sSchoolofPublicAffairsandCORD’sDirectorofResearch.Hisresearchfocusesoninnovationinpublicorganizations,theuseofinformationtechnologyandtheeffectsofthosetechnologiesonpublicorganizations,andtheevaluationofenvironmentalandenergypolicies.

Acknowledgements

TheauthorsthanktheCityofPhoenixfortheopportunitytoundertakethisresearchandtheV.KannRasumussenfoundationforitsfinancialsupport.

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