GSA Includes New Environmental Features in Next-Generation Parcel Delivery Contracts

GSA recently awarded its next-generation Domestic Delivery Services contracts (DDS3) for U.S. government parcel shipping to UPS and FedEx. Long a leader in encouraging fuel efficiency through its contracts, with the DDS3 contract GSA’s transportation program has broken even more new ground to to improve GSA's environmental stewardship with the addition of two new features, which GSA believes are firsts for any federal government-wide contract.

First, through DDS3 GSA will work with FedEx and UPS to provide federal agencies with regular reportson the carbon footprint of their shipping. Second, in awarding the contracts GSA explicitly considered the carbon footprint of the companies' services by modeling the Social Cost of Carbon associated with each company’s expected shipments under the contract.Approximately 90% of federal agencies' carbon footprint lies in the products and services they purchase, and these groundbreaking featuresof DDS3 pave the way towardmanaging these emissions (and the associated energy costs included in our contracts) through GSA's innovative partnerships with our vendors.

Why was this initiative pursued?

The goal of the third generation Direct Delivery Services procurement (DDS3) was to build upon the successes, including cost savings, fuel, and greenhouse gas (GHG) reductions, of the first and second generation of DDS. DDS3 will continue to encourage fuel efficiency, GHG reductions and cost savings by contractor(s) as well as including new features to help customer agencies track and reduce their GHG footprint.

There were a number of new green requirements in the DDS3 contract. Why?

As part of its commitment to “making a more sustainable government,” GSA recognizes that purchasing goods and services which minimize GHG emissions in the federal supply chain is good for the environment and good for business. Per Executive Order 13514, GSA is continuing to explore “tracking and reducing scope 3 greenhouse gas emissions related to the supply of products and services to the Government.” More recently, EO 13653 also called on all agencies to “consider the need to improve climate adaptation and resilience, including the costs and benefits of such improvement, with respect to agency suppliers [and] supply chain.” GSA is continuing to investigate GHG mitigation and climate adaptation options in our supply chain, and to incorporatethem into acquisitions where feasible. DDS3 represents the leading edge of these initiatives.

What were the new green contract provisions in DDS3?

DDS3 contains three new contract provisions related to environmental management and reporting:

  • Contractors are required to belong to the Environmental Protection Agency (EPA) SmartWay Transport Partnership, a voluntary partnership between the Federal Government and the trucking industry, to improve the environmental performance of freight and small package transport by adopting fuel and emission-reducing strategies. As an alternative, contractors may also report GHG emissions directly to GSA and the Department of Energy through the annual GHG inventory process which is followed by federal agencies.
  • Contractors are required to submit annual reports to GSA showing the quantity of GHG emissions associated with the DDS3 usage (package deliveries)of each federal agency using the contract. GSA will make these reports available to other agencies, allowing them to begin managing GHG emissions in their supply chain by reporting their Scope 3 contractor emissions as a voluntary element of their annual federal GHG inventories.
  • Contractors will be required to submit an annual report to GSA showing continual improvement against contractor-provided goals for alternative fuel and vehicle use. These reports will be incorporated into the overall DDS3 performance management reviews.

Howwas vendors’ past environmental performance considered in the DDS3 evaluation?

GSA asked contractors for initial benchmarks and goals for alternative fuel and vehicle use as part of their proposals, along with a general statement of environmental approach and strategy. More specifically, GSA investigated the anticipated GHG emissions performance of each contractor, in part by asking contractors to report the emissions associated with their deliveries during the past year along a specified set of package routes representative of government-wide traffic estimates. GSA then used the U.S. Government’s “social cost of carbon” (SCC) estimates[1] to monetize and compare the market and non-market economic impacts of these expected contractor emissions, and considered these estimates alongside price and other past performance information when assessing the value of proposals.

[1]See Interagency Working Group on Social Cost of Carbon, Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 (Revised November 2013),