The Aerospace Industries Association (AIA) this week asked the director of the Office of Management and Budget (OMB) to block a proposed requirement that would have certain federal contractors, including many defense companies, report on the greenhouse gas emissions (GHG) of their supply chains and customers.
AIA and other trade groups previously commented on the proposed rule published last fall by the Department of Defense, NASA and the General Services Administration to amend the Federal Acquisition Regulation (FAR) to require certain contractors disclose their Scope 1, 2 and 3 GHG emissions.
AIA’s May 3 letter to Shalanda Young, OMB director, is focused on the Scope 3 proposals. Scope 3 refers to emissions such as supplier operations, employee commutes, and customer uses of a product like tanks, fighter jets and tactical vehicles.
“Attempting to calculate these emissions would require companies to set up new, costly, complex data collection systems—for data that is largely outside their control and provided by entities who are likely unable to accurately calculate their own emissions information,” Remy Nathan, AIA’s senior vice president of policy, wrote to Young.
Nathan also pointed out that defense contractors will be challenged to get some data from their customers given the “sensitivity of military use data” and have “difficulty predicting a platform’s service life.”
The Scope 3 requirement is directed at “major contractors,” which the proposed rule defines as companies that received more than $50 million in federal contracts in the prior fiscal year. In fiscal year 2021, about 1,353 entities received more than $50 million in contracts, of which 389 or 29 percent are small businesses, according to the proposed rule.
Small businesses would suffer from “steep implementation and compliance costs” and further “administrative burdens,” a combination that serves to “deter small businesses from working with the government—particularly with the Department of Defense,” Nathan said.
AIA is also concerned that the GHG emissions reduction targets that are part of the proposal are based on standards set by an international coalition that isn’t accountable to the U.S. government. Nathan said that outsourcing “governance to an international body” is “unthinkable” and would enable “foreign influence” over U.S. contractors.
Remy wrote to Young because OMB chairs the Federal Acquisition Regulatory Council, which is considering the potential GHG emissions-related changes to acquisition regulations.