Maryland Bar Bulletin
Publications : Bar Bulletin : April 2012

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Considering that private construction has remained flat, much of the LEED (United States Green Building Council’s Leadership in Energy and Environmental Design building certification program) explosion over the past few years is attributable to government projects.

The Department of Defense’s early adoption of LEED and other sustainable objectives – as well as the Department’s ongoing commitment – are especially apparent in Maryland, where Fort Meade and Aberdeen Proving Ground have seen significant growth with BRAC and several new LEED buildings. In 2000, the Navy was the first federal agency to implement the LEED rating system for new construction, and before moving to LEED Silver, the Army tailored LEED 2.0 into a custom “Sustainable Project Rating Tool.”

The Department of Defense has more registered LEED projects and certified LEED buildings today than any other federal agency and has policies in place to continue building them, usually at the Gold and Platinum levels. However, the Army, Navy, and other branches of Defense now have to balance their sustainable building policies against a veritable ban on appropriations for higher-level LEED certification.

The Department’s appropriations bill for 2012 prohibits the use of funds for achieving Gold or Platinum LEED certification. Waivers requests with demonstrated cost benefits may be made to the Secretary of Defense, while Gold and Platinum projects are still welcome as long as they do not cost any more than a LEED Silver building would.

As the availability of waivers is an unknown factor, squeezing in a Gold or Platinum certification at the Silver price appears to be the strategy for reconciling the Department of Defense’s sustainability goals and appropriations limitations.

Defense contractors are tasked with that challenge and should be mindful of the Truth in Negotiations Act and Fraud Enforcement and Recovery Act, among other contracting regulations, when presenting a bid that purports to include no additional cost for the extra LEED credits. If audited or otherwise asked to prove that their bids add no cost over LEED Silver, they must be prepared to prove that or face penalties that could include fines and even debarment.

The appropriations bill also calls for a mid-year report from the Department of Defense to Congress outlining the cost benefits, return on investment, and long-term rewards of various sustainability standards, include the LEED Silver, Gold, and Platinum levels. This analysis may lead the Department to shift its focus further away from LEED itself and onto other metrics and strategies for achieving cost and energy efficiency, and perhaps for developing its own standard or rating system. The Army, for example, already has holistic goals for net-zero energy, waste, and water utilization aimed at making military facilities self-sustaining, particularly in times of disaster. Fort Detrick in western Maryland presently has programs targeting net-zero waste and energy in place, and pilot programs exist at 16 other domestic Army installations. 

If Congress expands its refusal to pay extra for LEED ratings to other agencies, the U.S General Services Administration may also have to retreat back to Silver requirements after its recent upgrade to Gold for new construction and substantial renovation. Or more likely, the contracting market will be forced to adjust, as it is doing for the Department of Defense, to provide the higher level at the lower cost.

Creativity and innovation in design may aid in reconciling the Department’s objectives with Congress’ purse strings. This should be a familiar exercise for contractors who work within the stricter budgets of private projects, but may be a new challenge for government contractors who recall the days of unlimited funding to cover agencies’ demands. If new standards develop from the Department of Defense’s upcoming analysis and report on the metrics already in use, federal agencies and contractors might even find themselves starting all over again with a new system.

However, one thing is certain: to justify the costs across agencies, Congress will increasingly demand proof of building performance and return on investment regardless of what rating system or certification is ultimately used.

Lisa D. Sparks, LEED AP BD + C, is an associate at Bowie & Jensen, LLC, where she practices in construction and commercial litigation.

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Publications : Bar Bulletin : April 2012

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