Positive Purchasing Power Gaining in U.S.

The Declaration, Volume 1, Number 2 : May – August 1996  [Operations]

The expression “purchasing power” is a common one, but rarely is it used to mean anything more significant than getting a good price for a large group of consumers. Universities in particular often fail to realize the innovative ways they could use their power for the good of the environment.

Collectively, colleges and universities in the United States alone spend more than $146 billion for goods and services annually, giving them a powerful tool to affect the policies of their vendors. A university’s purchasing department has the leverage to reduce waster, reward durability, minimize environmental hazards and toxins, and increase the use and market for recycled materials. Rutgers University uses this power to accomplish all of this and more.

Mandate offers incentives

Rutgers, a public university in New Jersey, began its Environmental Procurement Program in 1988. At that time, the state of New Jersey, in an effort to capitalize on the value embodied in its wasted resources, instituted s statewide mandatory recycling program – the New Jersey Source Separation and Recycling Act. State institutions such as Rutgers were required to divert at least 60 percent of their waster stream by 1995. The state provided a list of items that could no longer go into landfills but offered no specific policies for what to recycle or more importantly, how to create a market for the recycled goods in order to “close the loop.”

In May 1992, the Rutgers University senate unanimously passed the Recycling and Source Reduction Policy and the Recycled Products Procurement and Use policy. These two policies charged the university to:

  • Review and recommend practical recycling, source reduction, and recycled products use measures;
  • Recommend goals and objectives for recycling and source reduction;
  • Encourage cooperative interaction between diverse members of the university community to instill a “reduce, reuse, and recycle” ethic;
  • Recommend educational programs.

The university’s operational policies were developed by Eric Zwerling, a graduate student who had lobbied the university senate to pass the bill. Kevin Lyons, hired as a purchasing agent by the University Procurement and Contracting division, developed supporting purchasing policies. Rutgers President Francis Lawrence sent a letter to members of the university community informing them of the new policies and asking for both their assistance and their compliance.

Environmentally sensitive contracts

Because University Procurement is required to negotiate and award all university contracts, that department became the center for screening the environmental impact of incoming commodities and the possibilities for outgoing waste. Lyons sought to engage vendors in the public awareness campaigns that are necessary to educate the campus community to make changes and to negotiate environmentally friendly contracts.

“To me, an environmentally sensitive contract should place an obligation, through the competitive bidding process, for environmental preservation and sustainability with the contractor,” he says.

Rutgers, with 47,000 students and 17,500 faculty, generates an enormous amount of waste on a daily basis, and the new procurement policies began with research into restructuring the waste and recycling contract. This contract created a partnership with the service provider, requiring the company to assist in the development of Rutgers’ Environmental Public awareness Program by placing educational advertising in campus newspapers, suggesting programs for increasing campus participation, and providing case studies of successes at other schools. In addition, the contractor was required to assist Rutgers in waste reduction strategies and to help identify items that could be removed from the waste stream. This unique relationship is now a model used with other university vendors.

The student connection

From the beginning of the program, students have worked with Lyons to develop environmentally sensitive operations on campus and to assist with both outreach and research. One student project developed a procurement survey for department directors. Other student projects include sustainable waste management programs and various waste and procurement auditing programs. The projects serve as practical course assignments that provide critical data for the University Procurement Department.

Campus outreach

Lyons is also active in educating the campus community. Environmental procurement practices have affected dining, custodial, and construction services. Several years ago, Rutgers Dining Services switched to 100 percent recycled, unbleached napkins. Anticipating a possible negative reaction from students, dining services staff placed table tents out announcing the change and brought the manufacturer in for a presentation.

“We didn’t just switch without telling anyone,” remembers Jim Vernere, Dining Services supervisor. “We promoted it and they [students and staff] were quite receptive.”

Not only were students receptive, after the change Dining Services received a wave of good press coverage instead of the usual negative food comments. Dining Services has since tried to switch all paper products to unbleached, 100 percent recycled paper. Like all departments making environmentally sensitive purchases, Dining Services has had to shop around to find competitive prices. It is also exploring methods to minimize packaging. “We work with the manufacturer and let them know our concerns,” says Vernere, “Maybe we can’t really impact General Mills, but it is important that they understand our thinking.”

Recycling opportunities

University construction offers another opportunity to use recycled materials. Environmental language is employed in university road and parking lot paving contracts. Paving contractors are required to recycle and use their excavated materials. Additionally, the university has tried recycled decks, ceiling tiles, wall boards, insulations, roofing products, snow fences, and parking bumpers. Like all university vendors, construction contractors are responsible for identifying and reporting waste reduction strategies as well as reporting the amount of materials they have recycled at Rutgers.

Closing the loop

The Center for Plastic Recycling Research at Rutgers manufactures a variety of plastic items that help close the loop. They are currently developing technology for a project that will require a New Jersey-based company to receive Rutgers’ plastic waste to generate new, high quality recycled content (commingled) plastic products, which Rutgers and several other New Jersey colleges will buy.

A similar closed-loop initiative is being designed for the university’s paper procurement. Rutgers generates approximately 500 tons of white photocopying paper water a year. The Procurement Department is negotiating with the waster contractor to sell the university’s white paper waste on the open market and share the revenues with Rutgers. These revenues will go toward the purchase of recycled-content paper for the university.

Even decisions about which recycled paper to purchase required extensive research. In order to determine the paper with the highest campus acceptance and lowest environmental impact, surveys were sent throughout the campus and site visits were made to various mills. University departments were provided with cases of virgin and recycled paper to test. Only the departmental liaison knew which paper was in the machine. Rutgers hopes eventually to close the paper loop further by selling its paper waste directly to the paper mill that supplies its recycled paper, thus reducing costs directly.

Savings ensure momentum

Environmental initiatives have reduced costs across the Rutgers campus. Replacement of inefficient lighting in 30 major buildings saves an estimated $869,000 annually. Recycling solid waste instead of disposing of it kept 16,187 tons of trash out of landfills in 1993 and save Rutgers $1,861,500. By purchasing natural gas at the wholesale price at the wellhead, and then having it piped in instead of buying at a retail price which includes delivery, the university saved $692,000 in 1994.

Since the institution of the Source Separation and Recycling Act in 1988, New Jersey has elected a new governor. Although none of the executive orders that set the environmental initiative in motion have been rescinded, those programs could suffer cutbacks in funding and reductions in government staff. Yet, because Rutgers’ programs save money they are becoming institutional practice.

Cooperative purchasing

One way schools can maximize their purchasing power is through cooperative purchasing agreements. Usually, but not necessarily, “hosted” by a large institution or state government, these agreements allow purchasers to band together on a single contract in order to get better prices by taking advantage of volume discounts. This is important, Lyons says, because it surmounts a major obstacle to buying environmentally sensitive products: price.

People often say, ‘We really want to do it but it just costs too much.’ Cooperative purchasing agreements take care of a lot of that, and universities can then move on to the next step of comprehensive, environmentally sound purchasing throughout the institution.”

The agreements also enable enhanced quality control of environmental products because they allow them to be tested at a wide variety of institutions, each of which has different needs and standards.

Getting started

To set up a cooperative purchasing agreement, Lyons recommends that schools first survey other institutions to see if they would be interested in a particular product, such as recycled-content paper. Letters of inquiry should be sent to purchasing departments asking whether the institution would want to be part of a group contract and how much of the product it would buy.

The host school then determines total volume of product demand and writes a contract accordingly. The contracts are simply modifications of a regular purchasing contract (American universities can receive sample contracts from the Treasury Department of the states in which they are located).

Next, the purchasing cooperative host institution gathers bids from vendors, makes a selection, and publishes the final price to all the schools that indicated they would join the cooperative purchasing agreement. After the agreement is signed, the host institution is responsible for maintaining the contract and making sure vendors live up to specifications. Lyons says setting up a cooperative purchasing agreement takes a lot of work initially, but once a network of purchasers is created, it is easy to maintain and can benefit the host institution as well.

“As a large university [Rutgers], we’re going to get favorable pricing anyway, but there might be a slight price differential when bringing in new customers. Vendors are looking at the big marketing picture,” he says. “Creating partnerships by soliciting other universities and bringing them all under one umbrella is worth it. The benefits include not only pricing and quality control, but also collection of data on what’s really needed and marketable.”

Making the links

As a ULSF member institution and signatory to the Talloires Declaration, Rutgers strives to link its campus operations to research, curricula, and partnership activities. It has accomplished this in a number of ways, including research like that conducted at the Center for Plastic Recycling Research.

The school’s curriculum includes a required course on “Citizenship and the Environment,” in which students combine regular classroom work with weekly volunteer assignments at local schools, environmental groups, and other community organizations. These real-world educational settings engage students in experiential learning; introduce them to the interplay between ecology, economy, and community; and offer perspective on the often-conflicting goals of environmental protection and socio-economic development.

Through such efforts, Rutgers fulfills the mission of the Talloires Declaration and utilizes the shadow curriculum to foster environmental literacy and responsibility in its students.

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