The United States Postal Service (USPS) recently announced that it intends to procure over 60,000 new electric vehicles by 2028 in an effort to modernize its fleet and become more environmentally responsible. In this blog, PilieroMazza summarizes the USPS’s announcement and analyzes what impacts this acquisition may have on government contractors interested in sustainable procurements.
The USPS Announcement
On December 20, 2022, the USPS announced it was taking a major step towards becoming more environmentally conscious by investing $9.6 Billion over the next five years to modernize its fleet by 2028. This investment will go towards acquiring battery electric vehicles, keeping in line with President Biden’s requirement for each agency to contribute to “electrifying” the federal fleet. Indeed, the USPS has the largest fleet within the federal government, so its efforts to modernize and become more environmentally responsible sets the bar for the rest of the federal government to follow suit and meet President Biden’s goals for more sustainable practices.
With this $9.6 Billion investment—of which $3 Billion came from the Inflation Reduction Act—the USPS intends to purchase 100,000 new vehicles by 2028 in an effort to modernize its aging fleet of over 200,000 vehicles. Of these new vehicles, 45,000 will be battery electric Next Generation Delivery Vehicles (NGDV) and 21,000 will be electric commercial off-the-shelf (COTS) vehicles, totaling 66,000 new electric vehicles in the USPS fleet. Portions of the $9.6 Billion will also go towards implementing charging infrastructure with the goal of having the electric NGDVs begin servicing postal routes in late 2023. Moreover, the USPS announced as part of this plan its goal of reaching 100% electric vehicle delivery purchases by 2026.
This announcement comes as welcome news to contractors who produce, or wish to begin producing, sustainable goods and services, as it represents an agency making a firm commitment to sustainable procurement. With this firm commitment, and other agencies likely to follow the USPS’s footsteps, contractors can expect to see more sustainable procurement practices from agencies, leading to more opportunities for those who provide sustainable goods and services.
The USPS’s announcement also shows a willingness to learn from prior shortcomings. Indeed, in 2021, the USPS announced an $11.3 Billion plan to acquire as many as 165,000 new delivery vehicles, with only 10% of the new vehicles being electric and the rest gas-powered. This plan received severe criticism from the federal government with the Environmental Protection Agency (EPA) and the White House Council on Environmental Quality urging the USPS to reconsider. These entities pointed out that the USPS’s environmental analysis that justified its plan to continue buying gas-powered vehicles rested on flawed assumptions and missing data. In its own study, the EPA determined that the proposed fleet of gas-powered vehicles could add a staggering 20 Million metric tons of greenhouse gas emissions over the vehicles’ projected lifetimes, which roughly equals the annual emissions from 4.3 Million passenger vehicles.
This most recent announcement on the USPS’s new fleet shows it listened to these criticisms and used them as a way to improve its procurement plan. Indeed, the White House released a statement commending the USPS’s new plan, and other groups such as Earthjustice, who previously criticized the USPS’s 2021 plan, also noted this is a step in the right direction.
The main takeaway from the USPS’s recent announcement is federal agencies are taking President Biden’s goals to combat climate change seriously. With the largest fleet in the federal government and 163 Million addresses to deliver to six days a week, this is a massive undertaking that shows other federal agencies, and the public, that if the USPS can do this on such a large scale, other federal agencies can and should be willing to follow suit. As more agencies begin practicing sustainable procurement, this will open opportunities for federal contractors. Agencies will be looking for new ways to be environmentally responsible, and contractors who provide sustainable goods or services will start to see increasing opportunities for their goods and services.
Another takeaway is that almost one-third of the new electric vehicles will be COTS vehicles. What’s more, the USPS plans to include a preference for domestically manufactured electric COTS, although this will depend on market availability and operational feasibility. This domestic preference may act as an incentive for U.S. automakers to increase production of electric vehicles, as more agencies down the line will need electric vehicles to reach President Biden’s goals and could likely follow the USPS’s model for procurement. Indeed, private entities such as Amazon and FedEx have both committed to going carbon-neutral in the coming decades by, in part, implementing electric trucks for deliveries. As such, it is clear that the modern trend is pointing towards “electrifying” vehicle fleets, and it is only a matter of time before more federal agencies start “electrifying” as well.
For government contractors, this move towards sustainability represents a new world of opportunities. The government is going to request more sustainable goods and services in the coming years, opening the door for innovative ideas on how to be more environmentally responsible. This trend will also likely see the government distance itself from previous non-sustainable practices, such as acquiring gas-powered vehicles as demonstrated by the USPS’s plan. As such, contractors will benefit from considering how sustainable their practices are, and what they can do to offer the government more environmentally sustainable solutions since sustainable procurement practices will only continue to grow.
If you have questions concerning the USPS’s announcement, please contact Jackie Unger or Dozier Gardner, the authors of this blog, or another member of PilieroMazza’s Government Contracts Group.