FAR 23.103—Policy.
Plain-English Summary
FAR 23.103 sets the core policy for buying sustainable products and services in federal procurement. It tells agencies to procure sustainable products and services to the maximum extent practicable, explains when that standard is met or not met, and gives a practical price-reasonableness framework that includes life-cycle cost and energy savings for ENERGY STAR® and FEMP-designated products. It also requires agencies to comply with any applicable statutory purchasing program requirements and to give priority to multi-attribute sustainable products and services. In addition, it extends the sustainability requirement into service and construction contracts by requiring contractors to provide qualifying sustainable products in specific situations, including items delivered to the Government, furnished for Government use, incorporated into public works, or bought as direct costs in performing services. In practice, this section is the policy bridge between sustainability goals and day-to-day buying decisions, affecting acquisition planning, source selection, product specifications, and contractor performance obligations.
Key Rules
Buy sustainable products
Agencies must procure sustainable products and services to the maximum extent practicable. This is the default rule, and sustainability should be treated as required unless one of the listed exceptions applies.
Practicability exceptions
Sustainable procurement is considered practicable unless the agency cannot obtain the product or service competitively within a reasonable schedule, cannot meet reasonable performance requirements, or cannot obtain it at a reasonable price. The burden is on the agency to show one of these limits applies.
Use life-cycle cost
When judging whether a sustainable product’s price is reasonable, agencies should consider whether it is cost-effective over the product’s life. For ENERGY STAR® and FEMP-designated products, price is reasonable if the product is cost-effective over its life when energy savings are included.
Follow statutory programs
When procuring sustainable products and services, agencies must comply with any applicable statutory purchasing program requirements. Sustainability policy does not override mandatory buying programs or other legal purchasing rules.
Prioritize multi-attribute products
Agencies must give priority to multi-attribute sustainable products and services. This means preferring products or services that address more than one sustainability factor when those options are available and appropriate.
Contractor product obligation
For service and construction contract actions, contractors must provide products that meet the FAR definition of sustainable products and services when those products are delivered to the Government, furnished for Government use, incorporated into public buildings or public works, or acquired as direct costs in performing the contract.
Responsibilities
Agency
Plan and conduct acquisitions to procure sustainable products and services to the maximum extent practicable, document when sustainability is not practicable, apply life-cycle cost analysis where appropriate, comply with applicable statutory purchasing programs, and prioritize multi-attribute sustainable options.
Contracting Officer
Build sustainability into acquisition planning, evaluate whether sustainable products are available competitively, on schedule, and at a reasonable price, apply the life-cycle cost concept for ENERGY STAR® and FEMP-designated products, ensure compliance with mandatory purchasing programs, and include contract requirements that flow sustainability obligations to contractors where applicable.
Contractor
In service and construction contracts, provide products that meet the FAR definition of sustainable products and services when the products are delivered to the Government, furnished for Government use, incorporated into public works, or purchased as direct costs for contract performance.
Program/Requirement Owner
Identify performance needs and sustainability priorities early so the acquisition can specify reasonable requirements and consider multi-attribute sustainable products without sacrificing mission needs.
Practical Implications
Sustainability is the default, not an optional add-on; buyers should assume they need to consider sustainable products unless they can justify why they are not practicable.
Price comparisons should not stop at upfront cost, especially for ENERGY STAR® and FEMP-designated products; life-cycle energy savings can make a higher initial price reasonable.
Contractors performing services or construction may have to supply sustainable products even if the contract is not a supply contract, so they need to manage sourcing and compliance carefully.
A common pitfall is treating “reasonable price” as only the lowest bid price; FAR 23.103 points agencies toward cost-effectiveness over the product life.
Another frequent issue is overlooking mandatory statutory purchasing programs or failing to give priority to multi-attribute sustainable products when they are available.
Contracting officers should make sure the contract clearly identifies which products must meet the sustainable-products definition, especially for furnished items, incorporated materials, and direct-cost purchases.
Official Regulatory Text
(a) Agencies shall procure sustainable products and services (as defined in 2.101 ) to the maximum extent practicable. (1) Procuring sustainable products and services is considered practicable, unless the agency cannot acquire products or services— (i) Competitively within a reasonable performance schedule; (ii) That meet reasonable performance requirements; or (iii) At a reasonable price (see 23.103 (a)(2)). (2) When considering whether the price of a sustainable product is reasonable, agencies should consider whether the product is cost-effective over the life of the product. For ENERGY STAR® or Federal Energy Management Program (FEMP)-designated products, a price is reasonable if it is cost-effective over the life of the product taking energy cost savings into account ( 42 U.S.C. 8259b(b)(2) ). Life-cycle cost savings tools for energy-efficient products are available at https://www.energystar.gov/buildings/save_energy_commercial_buildings/ways_save/energy_efficient_products and https://www.nrel.gov/analysis/tech-lcoe.html . (b) When procuring sustainable products and services, agencies shall— (1) Ensure compliance with applicable statutory purchasing program requirements (see 23.107 ); and (2) Prioritize multi-attribute sustainable products and services (see 23.104 (c)(2)). (c) Regarding products under contract actions for services or construction, the contractor is required to provide products that meet the definition of sustainable products and services at 2.101 , if the products are— (1) Delivered to the Government; (2) Furnished by the contractor for use by the Government; (3) Incorporated into the construction of a public building or public work; or (4) Acquired by the contractor for use in performing services under a Government contract where the cost of the products is a direct cost to a Government contract (versus costs which are normally applied to a contractor's general and administrative expenses or indirect costs).