Biobased Products:

Improved USDA Management Would Help Agencies Comply with Farm Bill Purchasing Requirements

GAO-04-437: Published: Apr 7, 2004. Publicly Released: Apr 14, 2004.

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The federal government spends more than $230 billion annually for products and services to conduct its operations. Through its purchasing decisions, it has the opportunity to affirm its policies and goals, including those related to purchases of biobased products, as set out in the 2002 farm bill. A biobased product is a commercial or industrial product, other than food or feed that is composed of, in whole or part, biological products, renewable domestic agricultural materials, or forestry materials. GAO examined (1) actions the U.S. Department of Agriculture (USDA) and other agencies have taken to carry out farm bill requirements for purchasing biobased products, (2) additional actions that may be needed to implement the requirements, and (3) views of stakeholders on the need for and costs of testing biobased products. GAO interviewed officials from USDA, major procuring agencies, testing entities, interested associations, and 15 manufacturers of biobased products.

USDA and other federal agencies' actions to implement the farm bill requirements for purchasing biobased products have been limited. USDA issued proposed procurement guidelines in December 2003--more than 1 year past the deadline for final guidelines; however, these guidelines do not fully address the farm bill requirements for designating items for purchase and recommending procurement practices. USDA expects to issue final guidelines by April 2004 and a blueprint for the model procurement program by September 2004; but it anticipates that designation of existing items will take years to complete, possibly until 2010. In addition, new items will enter the market requiring further designations. Meanwhile, purchasing agencies do not yet have a basis for planning their own procurement programs and, as a result, have made only limited purchases of biobased products. USDA could accelerate its implementation of the farm bill requirements by developing a comprehensive management plan for this work and by making the work a higher priority. The lack of a management plan describing the tasks, milestones, resources, coordination, and reporting needed to complete this work has slowed USDA in issuing the procurement guidelines. For example, USDA developed a list of milestones only after GAO requested such a list; even then, this list was informal, primarily reflecting the thinking of a few officials. Without a plan, USDA will find it difficult to set priorities, use resources efficiently, measure progress, and provide agency management a means to monitor this progress. According to stakeholders, USDA should make this work a higher priority to speed its completion. Without a sense of priority, USDA's efforts to fulfill farm bill requirements have not had adequate staff and financial resources. Stakeholders GAO spoke with generally believed that USDA's proposals for testing a biobased product's content and performance are appropriate and that manufacturers should bear at least some of the costs. However, stakeholders generally questioned the need for doing life-cycle analysis of a product's long-term costs and environmental impacts.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In October 2005, USDA's Office of the Chief Economist, Office of Energy Policy and New Uses (OEPNU), provided us with a copy of a management plan entitled, Strategic Plan for USDA's Federal Biobased Product Preferred Procurement Plan (FB4P), dated August 8, 2005. According to USDA documentation and OEPNU officials, this plan was prepared in response to our recommendation. In general, the plan addresses tasks, milestones, resources, coordination, and reporting needed for completing work in support of the biobased preferred procurement program (now known as the BioPreferred Program). According to OEPNU officials, this plan was approved by the OEPNU Director and USDA's Chief Economist, although they were unable to provide documentation of this concurrence. In September 2008, these officials indicated that the plan had been used as general guidance over the 3 years since its issuance. For example, they said that reference to the tasks and milestones enumerated in the plan helped to ensure that important steps and consultations for developing program regulations were not overlooked. However, these officials also indicated that the plan was not regularly or formally updated during that time, largely because OEPNU did not have control over the time taken by internal and external reviewers of its proposed regulations. To be most useful, a comprehensive management plan should be updated periodically to reflect new or changing tasks, milestones, and resource, coordination, and reporting needs. In this regard, the 2008 Farm Bill's Biobased Markets Program, Section 9002, requires that USDA report annually on its implementation of this section, including "a comprehensive management plan that establishes tasks, milestones, and timelines, organizational roles and responsibilities, and funding allocations for fully implementing this section." Thus, by law, USDA will be required to update its management plan annually in the future.

    Recommendation: To ensure USDA's timely implementation of the farm bill biobased purchasing requirements, the Secretary of Agriculture should direct the Office of Energy Policy and New Uses to develop and execute a comprehensive management plan for completing this work. Among other things, such a plan should discuss the tasks, milestones, resources, coordination, and reporting needed for completing this work.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: Effective May 2008, USDA began transferring responsibilities for the biobased products preferred procurement program (now know as the BioPreferred Program) from the Office of the Chief Economist/Office of Energy Policy and New Uses (OEPNU) to Departmental Administration (DA). USDA officials said this transfer will be complete by October 1, 2008, with DA assuming all operational, management, and financial aspects of the program that had been OEPNU's responsibility. According to USDA documentation and officials, the transfer is partly a response to congressional and stakeholder concerns about USDA's slow progress in implementing the BioPreferred Program. For example, USDA's Strategic Plan for FY 2005-2010 (issued June 2006) indicates a performance measure target of 140 biobased items (i.e., groupings of similar biobased products) will be designated for preferred procurement by 2010. However, as of September 2008, USDA was well behind this pace, with only 33 biobased items designated. Agency documentation indicates that the transfer will create efficiencies of management and operation of the program, result in better utilization of current staff and resources, and bring about a more robust implementation and evaluation of biobased products. In addition, according to the DA official who will head this program, DA will devote four staff, full-time, to the program's implementation, whereas OEPNU had one full-time person. USDA documentation also indicates that contracts or cooperative agreements that OEPNU had with various entities to support, among other things, the (1) testing and evaluation of biobased products, (2) designation of biobased items for preferred procurement, and (3) establishment of a voluntary labeling program, will be transferred, along with program funding, to DA with no loss of momentum or knowledge. Given the recentness of this transfer, it will take time to determine its impact on USDA's progress in implementing the BioPreferred Program, but it appears that DA will be able to provide more resources for the program's implementation. USDA budget documents describe the Office of the Chief Economist as a "small staff office"--an estimated 57 staff years in Fiscal Year 2008--with many diverse responsibilities. In contrast, DA is a much larger office--an estimated 629 staff years in Fiscal Year 2008.

    Recommendation: To ensure USDA's timely implementation of the farm bill biobased purchasing requirements, the Secretary of Agriculture should clearly identify and allocate the staff and financial resources to be made available for completing this work.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: In its Strategic Plan for FY 2005-2010 (issued June 2006), USDA stated that the development and implementation of a model procurement program for biobased products and promotion of Government-wide use of these products are key priorities for the agency. Specifically, under Strategic Goal 2, "Enhance the Competitiveness and Sustainability of Rural and Farm Economies," Objective 2.1, "Expand Domestic Market Opportunities," USDA's planned actions include (1) qualify and test biobased products for inclusion in a preferred procurement list; (2) for federal agencies, demonstrate new uses and promote biobased products; (3) expand the Web based information system for manufacturers and vendors of biobased products and for federal agencies and consumers; and, (4) create and promote the voluntary labeling program for biobased products to increase public awareness about their availability and benefits. Similarly, the Office of the Chief Economist's Strategic Plan for FY 2005-2010 (issued September 2004) contains similar provisions under its strategic objective IV.1. In addition, the transfer of responsibility for the biobased procurement program from the Office of Energy Policy and New Uses (OEPNU) to Departmental Administration (DA), effective May 2008, suggests that USDA is giving greater priority to completing this program's implementation in light of congressional and stakeholder dissatisfaction with the agency's progress to date. DA plans to devote more resources to the program than OEPNU did, and USDA documentation indicates that the transfer will create efficiencies of management and operation of the program, result in better utilization of current staff and resources, and bring about a more robust implementation and evaluation of biobased products.

    Recommendation: To ensure USDA's timely implementation of the farm bill biobased purchasing requirements, the Secretary of Agriculture should clearly state the priority to be assigned to this work.

    Agency Affected: Department of Agriculture

 

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