Spend Matters: Why the focus on GHG (greenhouse gases)? We can see how following EU regulations such as RoHS (reducing the use of certain compounds and materials) makes sense in that it reduces liability and other risk, but isn't it hard to find any tangible bottom-line savings from reducing GHG? Why not focus the GSA's efforts on developing TCO models for their procurement as the rest of industry does and see where GHG falls in that picture?
Tim: Reducing energy consumption reduces GHG. So in effect this is a Total Cost of Ownership approach [SM comment: a TCO proxy approach]. It is an economic model that prices energy use. The government already uses TCO analysis and this is a new way to find the next lowest hanging fruit.
Spend Matters: How about spend analysis -- wouldn't that do the job?
Tim: Spend analysis is too backwards looking. Driving change needs to focus on the future. A lot of progress can be made with existing information.
Spend Matters: Yes, data can definitely get in the way of policy! Seriously though, the best spend analysis solutions these days dynamically incorporate demand forecasts, product life cycle changes, third party data and the heuristics to go far beyond the rearview mirror approach of a few years ago.
Tim: A large debate came from discussing whether to initially collect and report data, or to share best practices to create results. The GSA can learn from successful private sector examples that combine society, environment, and economics. This is not a no-brainer; this requires more heavy lifting than usual.
Spend Matters: So what's the next step?
Tim: The ball is in the GSA leadership's court. The industry participants encouraged them to think big, as this is a big opportunity.
Spend Matters: When the inevitable organizational inertia kicks in, and results aren't popping up as quickly as expected, will the administration get impatient and lean on the legislative arm to drive change with a heavier hand?
Tim: I don't see a risk of that. This is not a top-down mandate approach.
Spend Matters: Thank you for your time and insight Dr. Laseter -- we appreciate the update and hope to stay in touch around the progress in this area.
Spend Matters will have more articles on this particular topic, and invites those with a direct relationship with the GSA to share -- on or off the record -- their experiences.
- Will this only create more bureaucracy, or are there success stories to share?
- Will this give smaller businesses an edge -- or further entrench incumbents?
Whether or not this GSA activity will actually increase competitiveness, cut costs, and create private sector jobs remains to be seen. But, as the sun rises each morning, we can count on additional compliance requirements coming down the pike, so the more we can learn about those, and the direction they are going in, the better.
Please get in touch: tkase (at) azulpartners (dot) com