On December 31, 2011, President Obama signed into law the National Defense Authorization Act for the 2012 fiscal year,H.R. 1540. Congress passes a similar act each year to monitor the budget for the Department of Defense.

While many Americans may have been aware that in response to one of the most controversial aspects of the law, the President issued a signing statement, “my Administration will not authorize the indefinite military detention without trial of American citizens,” it is all but certain that very few are aware the bill prohibits Department of Defense use of 2012 fiscal year funds to achieve LEED Gold of Platinum on military projects.

Lest there be any question of interpretation of the many hundred page law, section 2830(b)(1) provides, “No funds authorized to be appropriated by this Act or otherwise made available for the Department of Defense for fiscal year 2012 may be obligated or expended for achieving any LEED gold or platinum certification.”

The Secretary of Defense may waive that express mandate if the Secretary submits a notification to the Congressional defense committees at least 30 days before the obligation of funds toward achieving the LEED gold or platinum certification. That notification is required to include: a cost-benefit analysis of the decision to obligate funds toward achieving the LEED gold or platinum certification; and demonstrated payback for the energy improvements or sustainable design features.

In an interesting exception, LEED gold and platinum certifications “shall be permitted, and not require a waiver and notification, if achieving such certification imposes no additional cost” to the Department of Defense.

Significantly, the Act also provides not later than June 30, 2012, the Secretary of Defense must submit to the congressional defense committees a report on the energy efficiency and sustainability standards utilized by the Department of Defense for military construction and repair. The report is to include a cost benefit analysis, return on investment, and long-term payback for the following design standards: ASHRAE 189.1-2011, ASHRAE 90.1-2010, LEED silver, gold, and platinum certification, as well as the LEED volume certification, and other ANSI accredited standards.

It has been suggested that the bipartisan effort, that included Representatives Larry Kissell (D-NC) and Steven Palazzo (R-MS) and Senator Roger Wicker (R-MS), that lead to this language in the bill may be rooted in USGBC’s ongoing certified wood disputes and differences? While some have for too long and too narrowly articulated a battle between FSC and SFI, it is likely that the action by Congress is also more than only a controversy arising from a Navy purchase order that excluded American hardwoods in favor of imported “rapidly renewable” bamboo for a new gym floor at Camp Lejeune?

Whatever the initial motivation in Congress, the Act retroactive to October 1, 2011, is causing a variety of stakeholders to quickly evaluate their positions and seek to alter and amend existing contracts to comply with the new mandate, including not pursuing LEED certified wood credits so as to not run afoul on Congressional sentiments. This includes parties from construction companies currently erecting a building on a military base that is designed and proposed to be LEED Gold and architects under contract to design a LEED Gold project for the Department of Defense to a user under an Army Enhanced Use Lease erecting LEED Gold buildings per the express language of the EUL and a supplier of materials to any of those projects that are proposed to achieve LEED Gold or Platinum.

We are currently providing advice, counsel and support to a variety of folks potentially impacted by the 2012 Act. We approach this unbounded, protean and as yet difficult to obtain certainty on subject with the goal of obtaining a strategic solution for each client that best advantages the less than week old federal law.

If we can assist you and your business is pursuing a comprehensive solution to this critical business issue, do not hesitate to telephone or email Stuart Kaplow.