Federal Acquisition Regulatory Council's Proposed Rule on Greenhouse Gas Emissions Would Impose Significant Compliance Obligations on Federal Contractors

• Jurisdiction: United States,Federal
• Citation: Vol. 1 No. 2
• Publication year: 2023
• topic: Contracts,Environmental Law,Federal,Public Sector Law

[Page 127]

Richard B. Oliver, Matt Carter, Alex D. Tomaszczuk, Michael S. McDonough, and Jeffrey A. Knight ^*

In this article, the authors explain that the Federal Acquisition Regulatory Council recently issued a far-reaching proposed rule that includes significant compliance obligations for contractors related to their greenhouse gas emissions.

The Federal Acquisition Regulatory Council (FAR Council) recently issued a proposed rule, ¹ implementing Section 5(b)(i) of Executive Order 14030 (Climate-Related Financial Risk), that would require most federal contractors to make disclosures and representations regarding their greenhouse gas (GHG) emissions and certain contractors to also set science-based targets to reduce those emissions. The proposed rule adopts the definition of GHG from Federal Acquisition Regulation (FAR) 23.001, which defines GHG as carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, nitrogen trifluoride, and sulfur hexafluoride.

The proposed rule would apply to "major" and "significant" contractors. A "major contractor" is defined as any entity that received more than $50 million in federal contract obligations in the prior fiscal year. A "significant contractor" is defined as any entity that has received $7.5 million or more (but less than $50 million) in federal contract obligations in the prior fiscal year. Accordingly, small businesses receiving as little as $7.5 million in awards are covered by the proposed rule. All small businesses that meet the $7.5 million threshold are to be treated as "significant contractors," so the additional obligations that apply to "major contractors"

[Page 128]

(discussed below) would not apply to small businesses. Further, all contractors would have to certify on SAM.gov whether they are or are not a major...