Federal Electronics Management: Federal Agencies Could Improve Participation in EPA's Initiatives for Environmentally Preferable Electronic Products
Published: 2009-10-27T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Advancing technology has led to increasing sales of new electronic devices. With this increase comes the dilemma of managing them at the end of their useful lives. If discarded with common trash, a number of environmental impacts may result, ranging from the loss of valuable resources to the potential release of toxic substances, such as lead. If recycled, they may be exported to countries with waste management systems that are less protective of human health and the environment that those of the United States. The federal government is the world's largest purchaser of electronics, spending nearly $75 billion on electronic products and services in 2009. The Environmental Protection Agency (EPA) has helped implement several product stewardship initiatives to encourage responsible management of electronic products in all three phases of a product's lifecycle--procurement, operation, and end-of-life disposal. In response to a request to provide information on federal procurement and management of electronic products, GAO's testimony describes (1) EPA's electronic product stewardship initiatives, (2) federal agency participation in them, and (3) opportunities for strengthening participation. GAO's testimony is based on its prior work and updated with data from EPA. In our prior report, EPA agreed that increasing federal participation in its initiatives could be encouraged. Agency officials still agree with this finding.
section_title: What GAO Found
paragraphs: Federal government approaches to ensuring environmentally responsible management of electronic equipment from procurement through disposal rely heavily on two interrelated initiatives. The first initiative, the electronic product environmental assessment tool (EPEAT), was developed along the lines of EPA's and the Department of Energy's Energy Star program and assists federal procurement officials in comparing and selecting computers and monitors with environmental attributes that also routinely save money through reduced energy usage over the products' lives. The second initiative--the federal electronics challenge (FEC)--helps federal agencies realize the benefits of EPEAT-rated electronics by providing resources to help agencies extend these products' life spans, operate them in an energy efficient way, and expand markets for recovered materials by recycling them at end of life. The first 5 years of EPA's initiatives have resulted in notable energy savings and environmental benefits reported by participating agencies. According to facilities that reported information to EPA and the Office of the Federal Environmental Executive in 2008, 88 percent of all desktop computers, laptop computers, and monitors the facilities purchased or leased were EPEAT-registered. EPEAT participation reportedly resulted in procurement officials purchasing 95 percent of their monitors with Energy Star power management features enabled and 38 percent of computers with this feature. In addition, 16 federal agencies and 215 federal facilities--representing about one-third of all federal employees--participated in the FEC to some extent in 2008. As a result, participants reported that 50 percent of electronics taken out of service were donated for reuse, 40 percent were recycled, 8 percent were sold, and 2 percent were disposed of. The environmentally responsible choices associated with EPEAT and FEC resulted in a reported $40.3 million in cost savings for participants. The EPEAT and FEC accomplishments are steps in the right direction, but opportunities exist to increase the breadth and depth of federal participation. First, agencies and facilities representing about two-thirds of the federal workforce are not participating in these promising initiatives, despite instructions to do so in implementing Executive Order 13423. Second, few participating agencies and facilities maximize these programs' resources and their potential benefits. For some, participation simply means the agency identified its current practices for managing electronic products and set goals to improve them. Moreover, as the FEC aims to support participating agencies and facilities, it does not impose consequences for those that do not meet their goals. In fact, only 34 FEC facility partners showed they managed electronic products in 2008 in accordance with FEC goals for at least one of the three lifecycle phases, and only 2 facilities showed they did so for all phases. For perspective, GAO calculated that if federal agencies replaced 500,000 desktop and laptop computers and monitors with EPEAT-registered products and operated and disposed of them in accordance with FEC goals, they could achieve substantially greater energy reductions and cost savings.

section_title: Letter
paragraphs: I am pleased to be here today to discuss findings from our work on federal  procurement of environmentally preferable electronic products and ways  in which such procurement can lessen the impacts of electronic waste (e- waste) disposal. The federal government is the world’s largest purchaser  of information technology equipment, annually spending nearly $75 billion  on electronic products and services. Through its purchasing decisions, the  federal government has substantial leverage to enhance recycling  infrastructures and stimulate markets for environmentally preferable  electronic products. Along these lines, the Environmental Protection  Agency (EPA) has helped implement several product stewardship  initiatives under its Resource Conservation Challenge. These initiatives  encourage environmentally responsible management of electronic  products from “cradle to grave”—that is, from the initial procurement of  environmentally preferable products, to their operation in an energy  efficient manner, and finally to their reuse or recycling in an  environmentally safe way.
Disposing of e-waste has become an important issue as rapidly advancing  technology has led to increasing sales of new electronic products—in  particular, computers, monitors, and handheld devices such as cell  phones. With this increase comes the dilemma of managing these products  at the end of their useful lives. Little information exists, for example, on  whether obsolete electronic products are reused, stored, or disposed of in  landfills. As we previously reported, if discarded with common trash, a  number of adverse environmental impacts may result, ranging from the  loss of valuable resources in the electronics such as copper, gold, and  aluminum to the potential for harmful substances such as cadmium, lead,  and mercury to enter the environment. If donated or recycled, these  products may eventually be irresponsibly exported to countries without  modern landfills and with waste management systems that are less  protective of human health and the environment than those in the United  States. In our August 2008 report, we showed that e-waste exported from  the United States to developing countries, such as those in Southeast Asia,  is often dismantled under dangerous health conditions, using methods like  open-air incineration and acid baths to extract precious metals.
Our testimony, which is based on our prior work and updated with data  from EPA, provides observations on (1) EPA’s electronic product  stewardship initiatives, (2) the extent of federal agency participation in  them, and (3) opportunities for strengthening participation. Our prior  work was conducted in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The purchase price of electronic products primarily reflects their  technological capabilities; it does not include all of the substantial costs  that are incurred throughout the equipment’s life. A study by Gartner  Research, for example, shows that computers costing less than $1,000  typically have a total cost of ownership of more than $5,000 per year when  all the energy and maintenance costs are included. Furthermore, the  purchase price of electronics does not include the often substantial cost of  disposal. Lifecycle costs are high, in part, because electronic products are  not always designed to facilitate recycling.
EPA estimates that across the federal government 10,000 computers are  disposed of each week. Once such products reach the end of their original  useful lives, federal agencies have several options for disposing of them.  Agencies generally can donate their reusable equipment to schools or  other nonprofit educational institutions; give them to a recycler; exchange  them with other federal, state, or local agencies; sometimes trade them  with vendors to offset the costs of new products; or sell them through the  General Services Administration’s (GSA) surplus property program, which  sells surplus federal government equipment at public auctions.
Federal agencies, however, are not required to track the ultimate  destination of their donated or recycled e-waste. Instead, agency officials  generally consider this to be the recipient organization’s responsibility.  Consequently, they often have little assurance that their e-waste is  ultimately disposed of in an environmentally responsible manner. In our  prior work, we found that some U.S. electronics recyclers—including ones  that publicly tout their exemplary environmental practices—were  apparently willing to circumvent U.S. hazardous waste export laws and  export e-waste to developing countries. Specifically, we posed as foreign  buyers of broken cathode-ray tube computer monitors—which are  considered hazardous waste and illegal to export without a permit—in  Hong Kong, India, Pakistan, and other countries; and 43 U.S. companies  expressed willingness to export these items. Some of the companies were  willing to export this equipment in apparent violation of U.S. law. As we  showed in our August 2008 report, equipment exported to developing  countries may be handled in a way that threatens human health and the  environment.
section_title: Two Promising Initiatives Assist Federal Agencies in Procuring, Operating, and Disposing of Electronic Products in an Environmentally Preferable Manner
paragraphs: As we reported in November 2005, existing federal government  approaches to ensuring environmentally responsible management of  electronic equipment from procurement through disposal rely heavily on  two interrelated EPA electronic product stewardship initiatives. The first,  the electronic product environmental assessment tool (EPEAT®), assists  federal procurement officials in comparing and selecting laptop  computers, desktop computers, and monitors with environmentally  preferable attributes. The second, the federal electronics challenge (FEC),  helps federal agencies fully utilize the benefits of EPEAT-rated electronics  by providing resources to help agencies extend these products’ life spans,  operate them in an energy efficient way, and expand markets for recycling  and recovered materials by recycling them at end of life.
EPEAT was developed along the lines of EPA’s and the Department of  Energy’s (DOE) Energy Star program in which the federal government  rewards manufacturers of energy-efficient products that ultimately save  money and protect the environment by providing them with a label for  their products that certifies these benefits. EPEAT-registered products are  awarded a bronze, silver, or gold certification for increasing levels of  energy efficiency and environmental performance. Using EPEAT, an on- line tool, federal procurement officials can evaluate the design of an  electronic product for energy conservation, reduced toxicity, extended  lifespan, and end of life recycling, among other things. For example,  EPEAT can help agency procurement officials choose electronic products  with attributes that make the products easier to upgrade. Some computers  are now being built with modular features so that hard drives, processors,  memory cards, and other components can be upgraded rather than  replaced—thus extending their lifecycles. Agency procurement officials  can also use EPEAT to choose among products that are designed to make  recycling less expensive, such as those without glues or adhesives, with  common fasteners and “snap-in” features, and with easily separable plastic  and metal components—making their disassembly easier and recycling  less costly. Finally, EPEAT can help procurement officials identify  electronic products that contain less hazardous materials, which can also  lessen their disposal and recycling costs.
Products with these attributes can, in many cases, save agencies money  over the products’ lifecycles when compared to those with similar  technological characteristics but without environmental attributes. For  example, according to one computer vendor, a particular desktop  computer with energy-saving attributes cost $35 more than a similar model  that one federal program office had been buying; however, it will save $15  per year in energy costs. Thus, after slightly more than 2 years of use, the  EPEAT-rated desktop computer can save more money in energy savings  than the additional increase in purchase price and result in measurable  environmental benefits.
Currently, in the electronic products industry, purchasers can choose from  170 desktop computers, 637 laptop computers, and 487 monitors that meet  one of the three EPEAT levels of environmental performance. The breadth  of EPEAT products provides procurement officials with a range of devices  to meet their technology and budgetary needs. For example, agencies have  the flexibility to choose liquid crystal display monitors that meet all the  required EPEAT criteria as well as numerous optional criteria, such as the  lower levels of mercury in light switches and a reduced number of  different types of plastics—attributes that can make recycling easier and  less costly. Agencies can also choose other monitors that meet these and  other criteria, including additional reductions in toxic materials, along  with end-of-life services such as a take-back and reuse program for  packaging material. Of note, these different types of monitors can meet  different technology needs, as there are some differences in display  characteristics and power consumption.
As we said earlier, federal agencies also have the opportunity to  participate in FEC—a program that first relies heavily on EPEAT for  procurement considerations and then provides guidance to participants on  how to extend electronic product life spans, operate them in an energy- efficient way, and reuse or recycle them at end-of-life. FEC differs from  EPEAT in that where EPEAT assists officials in procuring environmentally  preferable products, FEC provides participating agencies and facilities  with resources to help ensure that electronic products are operated and  disposed of in a manner that fully utilizes the environmental attributes of  the EPEAT product. FEC has two partner levels: agency and facility. To  participate, executive branch agencies or their subcomponents must  register.
According to EPA documents, participation can provide agency officials  greater assurance that the e-waste they donate to schools, or send for  recycling, is ultimately disposed of in an environmentally responsible  manner. For instance, in following FEC guidance, participants are to  provide recipients of donated equipment with instructions on how to have  the equipment recycled responsibly and how to verify that responsible  recycling occurs—procedures known as “downstream auditing.” When  donating equipment, FEC instructs agencies and facilities to ensure that  recipients contact local or state environmental or solid waste agencies to  obtain a database of vendors who recycle e-waste once the equipment is  no longer useful to the recipient organization.
FEC also recommends that participating agencies and facilities instruct  recipients to avoid arrangements with recyclers that are unable or  unwilling to share references and cannot explain the final destination of  the e-waste they collect. When recycling equipment, participants are to  determine how much electronic equipment the recyclers actually recycle,  versus the amount they sell to other parties. If the majority of the incoming  e-waste is sold, the recycling facility may be sending a significant amount  of e-waste into landfills or for export overseas. In addition, FEC instructs  participants to physically inspect potential recycler’s facilities. E-waste in  trash containers, for example, may indicate that the facility is not recycling  it, and the presence of shipping containers may indicate that the facility  exports it.
section_title: Federal Agencies and Facilities Have Increased Participation in EPEAT and FEC in Recent Years
paragraphs: As of December 31, 2008, EPA reported that 16 federal agencies and 215  federal facilities—representing slightly more than one-third of all federal  employees—participated in the FEC to some extent. In addition, according  to the 128 facilities that reported data to EPA, a majority of electronic  products purchased during 2008 were EPEAT-registered. This is a sizeable  increase from 2005, when we reported that 12 federal agencies and 61  individual federal facilities participated in FEC. Participating agencies  include the Departments of Agriculture, Commerce, Defense, Energy,  Health and Human Services, Homeland Security, Interior, Justice, Labor,  Treasury, Transportation, and Veterans Affairs, as well as the  Environmental Protection Agency, Executive Office of the President,  General Services Administration, and the United States Postal Service.
The benefits of federal agency and facility participation in EPEAT and FEC  offer a glimpse of what can be attained through greater federal involvement.  For instance, in 2008 FEC participants reported to EPA and the Office of the  Federal Environmental Executive that 88 percent of all desktop computers,  laptop computers, and monitors they purchased or leased were EPEAT  registered. In addition, FEC participants reported that they extended  computer life spans so that 63 percent of computers had at least a 4-year  useful life. Procurement officials reported purchasing 95 percent of their  monitors with energy-efficient power management features enabled and 38  percent of computers with this feature. Finally, participants reported that 50  percent of electronics taken out of service were donated for reuse; 40  percent were recycled; 8 percent were sold; and 2 percent were disposed of.  Of those recycled, 95 percent were reportedly done so in an environmentally  sound manner. These environmentally preferable choices from “cradle to  grave” resulted in $40.3 million in cost savings reported by participating  agencies and facilities, energy savings that EPA found to be equivalent to  electric power for more than 35,000 U.S. households for 1 year, and  emissions savings equivalent to removing nearly 21,000 passenger cars from  the road for 1 year.
Through participation in the FEC, numerous federal facilities have  purchased greener electronic products, reduced the environmental impacts  of electronic products during use, and managed obsolete electronics in an  environmentally safe way. For example, officials with the Bonneville Power  Administration within DOE reported to EPA that they adopted several  environmentally responsible practices associated with the procurement and  operation of electronic equipment. First, administration officials extended  the lifespan of agency computers from 3 to 4 years. With over 500  computers procured each year at an annual cost of more than $500,000, an  administration official said that extending computer life spans generated  substantial savings. Additionally, Bonneville Power Administration officials  procured new flat-screen monitors instead of cathode-ray tube monitors,  reducing both hazardous waste tonnage and end of life recycling costs.  According to Bonneville Power Administration officials, they expect to save  at least $153 per unit over the life of each new monitor.
EPA’s region 9 facility in San Francisco, California—a 20-story office building  that houses nearly 900 EPA employees—also reported achieving substantial  environmental benefits through participation in the FEC. The facility’s energy  subcommittee recommended an audit, which found that enabling computer  and monitor power management features, such as those configuring  computer monitors to the “sleep” mode instead of the screen saver mode,  could save about 10 percent in total energy usage at no cost. In addition, with  funding eliminated for new electronics purchases, region 9 staff reported that  they reused 30 percent to 40 percent of existing electronics and extended the  average lifespan of computers to 5 years. Finally, region 9 staff stated that  they successfully recycled more than 10 tons of electronics that had been  stored in an offsite warehouse. Although the cost of safely recycling the large  quantity of electronics was high and regional staff found it difficult to locate a  reputable recycler, EPA headquarters provided funds for the recycling costs  and helped find a qualified vendor.
section_title: Opportunities Exist for More Federal Agencies and Facilities to Join EPA’s Initiatives, and Current Participants Can Significantly Strengthen Their Participation
paragraphs: The EPEAT and FEC accomplishments achieved to date are steps in the  right direction, but opportunities exist to significantly increase the breadth  and depth of federal agency and facility participation. First, agencies and  facilities representing almost two-thirds of the federal workforce are not  yet participating in these promising initiatives, despite Executive Order  13423. This executive order, signed by the President on January 24, 2007,  generally requires that each agency (1) meets at least 95 percent of its  requirements with EPEAT-registered products; (2) enables the energy  saving features on agency computers and monitors; (3) establishes and  implements policies to extend the useful life of agency electronic  equipment; and (4) uses environmentally sound practices with respect to  disposition of agency electronic equipment that has reached the end of its  useful life. To implement these requirements, the Office of Management  and Budget directed each agency and its facilities to either become a  partner in the FEC or to implement an equivalent electronics stewardship  program that addresses purchase, operation and maintenance, and end-of- life management strategies for electronic assets consistent with FEC’s  recommended practices and guidelines.
Second, most of agencies and facilities that participate do not fully  maximize these programs’ resources or the environmental benefits that  can be achieved. While we acknowledge the efforts of FEC participants,  the FEC statistics on participation may overstate these participants’  adherence to the goals of the program, and their successes must be taken  in context. Participation by 16 agencies and 215 facilities (representing  slightly more than one-third of federal employees), for example, does not  mean that all electronic products they purchase are procured, operated,  and recycled or reused at end of life in an environmentally preferable  fashion. Instead, participation simply means these agencies have identified  their current practices for managing electronic products and set goals to  improve them. Moreover, as the FEC is an initiative aimed to encourage  and support participating agencies and facilities, it does not impose  consequences on those agencies who do not meet their goals. As a  practical matter, only 34 FEC facility participants (16 percent of  participants) reported to EPA that they managed electronic products in  accordance with FEC goals for at least one of the three lifecycle phases— procurement, operation, or disposal—with only 2 facilities showing they  did this for all three phases in 2008.
The need for increased federal participation in these initiatives—in both  breadth and depth—is further underscored by the federal government e- waste that continues to appear in online auctions and may subsequently  end up overseas. As we reported in August 2008, significant demand  exists for used electronics from the United States. We observed thousands  of requests for such items on e-commerce Web sites—mostly from Asian  countries, such as China and India, but also from some African countries.  In our prior work, we showed that these countries often lack the capacity  to safely handle and dispose of e-waste, as disassembly practices in these  countries often involve the open-air burning of wire to recover copper and  open acid baths for separating metals. These practices expose people to  lead and other hazardous materials. In the several weeks leading up to this  hearing, we monitored an e-commerce Web site where surplus federal  government equipment is auctioned and found nearly 450,000 pounds of  cathode-ray tube monitors for sale—items that, based on our prior work,  have a high likelihood of being exported.
For perspective, using EPA’s environmental benefits calculator we  calculated the benefits that would result under a hypothetical scenario in  which federal agencies replaced 500,000 desktop and laptop computers  and computer monitors using EPEAT procurement criteria for each tier of  environmental performance—bronze, silver, and gold. As part of this  calculation, we added the environmental benefits attained if federal  agencies operated all EPEAT units in an energy efficient manner (i.e.,  enabled Energy Star features) and reused and recycled the end-of-life  electronics they replaced in accordance with FEC goals. We found that  substantial energy savings and environmental benefits would result at all  three EPEAT tiers. Specifically, greater participation could lead to  environmental benefits 5- to 10-times greater than the accomplishments of  FEC participants in 2008 described earlier. Additionally, if federal agencies  were to purchase EPEAT-bronze, silver, or gold products, according to the  EPA environmental benefits calculator, they would save approximately  $207 million at each level of EPEAT performance in energy usage and  realize other cost, waste, and emissions reductions over the useful lives of  these products. Table 1 shows the net energy savings and reductions in  raw material extraction, greenhouse gas emissions, and toxic materials  that would result if agencies and facilities recycled electronic products  and replaced them with EPEAT-rated units, as compared to non-EPEAT  computers and monitors.
To help agency officials put in context the environmental and economic  benefits that can result from using environmentally preferable electronic  products, the EPA environmental benefits calculator also shows the  benefits of procurement, operation, and disposal in accordance with FEC  goals using common equivalents. Table 2 shows the environmental  benefits of these practices when measured as the amount of household  energy usage saved annually and the volume of automobile emissions  saved annually.
section_title: Concluding Observations
paragraphs: Understandably, when procuring electronics in a challenging fiscal  environment, agency officials may give greater weight to price than  environmental attributes. However, many of the environmental and human  health problems associated with e-waste disposal can be averted through  environmentally preferable procurement. Using EPEAT to purchase  environmentally-friendly products, agency purchasers can often  simultaneously meet their technology needs, benefit the environment, and  realize dollar savings over the products’ lives. Using the success of the  Energy Star program as a precedent, the federal government has taken  steps to encourage environmentally preferable choices. We also applaud  federal agency and facility donation and recycling practices for providing  valuable learning tools to thousands of school children while, at the same  time, providing at least some protection against their equipment ending up  in landfills or overseas. Such programs have also demonstrated that  relatively simple and inexpensive steps can help ensure that donated and  recycled e-waste is ultimately managed in a responsible manner. In  particular, the FEC provides a framework through which participants can  help ensure responsible recycling through downstream auditing of  recipient organizations’ disposal practices and by following guidance on  how to select responsible recyclers. The federal government has the  opportunity to lead by example and to leverage its substantial market  power by broadening and deepening agency and facility participation in  EPA electronic product stewardship initiatives, but meaningful results will  only occur if federal agencies and facilities fully participate and utilize  these promising initiatives’ resources.
Ms. Chairwoman, this concludes my prepared statement. I would be happy  to respond to any questions that you or other Members of the  Subcommittee may have at this time.
section_title: Contact and Staff Acknowledgements
paragraphs: Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this statement. For further  information about this testimony, please contact John Stephenson,  Director, Natural Resources and Environment at (202) 512-3841 or  stephensonj@gao.gov. Key contributors to this statement were Steve  Elstein (Assistant Director), Nathan Anderson, Elizabeth Beardsley, Alison  O’Neill, and Kiki Theodoropoulos.
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