1. CleanMed Conference April 14, 2004 Anne Peters Gracestone, Inc. Greening Electronics Purchasing Decisions: End-of-Life and New Equipment

2. How to “green” electronics purchase? Change the bid language Change the purchase terms –lease vs. buy Drive manufacturer responsibility –require takeback of obsolete computers –consider reuse loop –ask for assurance of recycling of old equipment –impact toxicity, ergonomics, energy use, packaging etc. to reduce waste

3. What should you do? Review storage & surplus practices This affects you in two ways. –Buying new computers & electronics - an opportunity to “green” them and thus reduce liability. –Buying “end-of-life” management services for org’s old electronic equipment. data destruction environmental matters - Ensure old equipment is recycled or managed in compliance as a Universal Waste

4. Storage Issues Org removing 3,000 PCs/yr can save $1M/yr in storage & disposal $$. Resale & recycle value of stored equipment depreciates 6-10%/month. Data sanitization should be done upon retirement, before storage or surplus. Total destruction for data security wastes equipment with value. reuse value

5. Surplus Issues Surplusing has two risks: –Unauthorized release of secure data –Potential environmental liability from rebuilders buying lots of equipment & trashing what they don’t want - your org. still holds downstream liability

6. Purchasing End-of-Life Recycling Services What do they do to recycle? Reuse? Can they help with logistics? Do they offer data destruction? Methods? Labor source? Regulatory compliance? Sound, ethical business practices? Need for legitimating credential… (“Pledge”) Involve local businesses, non-profits Then - set criteria that meets your goals.

7. Legitimate recyclers will: Tell how they manage e-scrap. Tell how they process e-scrap. Document & monitor downstream markets (where components or devices go for reuse, recycling, or disposal). Generally charge a fee for their services. Comply with hazwaste requirements. Disclose all labor practices.

8. Adding Recycling to New Computer Purchases. CASE STUDY: Why did Denver want to “green” its purchase of 8,000 desktops? Power of one. Concern re CERCLA liability as old desktops are surplused, go through reuse cycle, & end up in Denver’s own landfill. The light bulb as the IT managers “got it”. Den Purchasing is ‘green’ Lesson Learned: You need a champion, an insider, and a compelling motivator for the organization. Lesson Learned: You need a champion, an insider, and a compelling motivator for the organization.

9. Research Phase 2002: Emerging resources on this: –Silicon Valley Toxics Coalition –Materials For Future Foundation –Product Stewardship Institute –Northwest Product Stewardship Council - eco-labels –Center for a New American Dream –Label websites –EPA EPP, DfE Lesson Learned: Nice collective learning curve; use the web & call too. Lesson Learned: Nice collective learning curve; use the web & call too.

10. Process with Purchasing & DoIT Determine IT & org. needs, preferences: –security & data destruction –end-of-life markets (prison, overseas) –contractual req’ts –re-use criteria (addressed in ordinance) –EMS compliance & internal green goals –life cycle cost of FPD vs. CRT –lease vs. purchase –WSCA-NASPO considerations –disaster recovery needs –labeling Lesson Learned: Ask for separate meetings on this. Lesson Learned: Ask for separate meetings on this. Lessons Learned: Interdepartmental cooperation. Procurement & IT wants to learn. Teach them. Lessons Learned: Interdepartmental cooperation. Procurement & IT wants to learn. Teach them.

11. Led to RFI & Informal Vendor Meeting Issued Request for Interest for “Greening” Denver’s Upcoming Purchase of Desktop and Laptop Computers – Questions for Vendors 10/4/02 –Disclosure about the bidders’ environmental policies, manufacturing process, product contents. –Product features: modularity; design for recycling; energy usage; eco-labeling. –End-of-life management requirements. –Packaging and shipping. –Worker health and safety. –Purchase vs. lease. Lesson Learned: An OEM Rohrschach test. If everyone asks, OEMs must respond. Lesson Learned: An OEM Rohrschach test. If everyone asks, OEMs must respond.

12. RFP: Environmental Criteria Corporate environmental responsibility –EMS, ISO 14001 –Environmental Policy Product take-back at end of life –with CCD monitoring capability –regulatory compliance (  downstream liability) –overseas markets only with CCD okay –takeback of current fleet

13. RFP: Environmental Criteria Energy requirements Product and packaging features –use of recycled materials –component labeling (aids EOL recycling) –  35% recycled packaging –reduce packaging quantities 3rd-party certification - Eco-labels

14. RFP: EOL Management Requirements State regulatory compliance (UWR) Costs broken out separately in proposals Assure CCD no parts end up in trash Use by nonprofit orgs assure good EOL Hope for cost savings from product value EPA ID # at any recycling facility Assure worker safety No bad overseas markets Lesson Learned: Ask for more than you think you’ll get. Lesson Learned: Ask for more than you think you’ll get.

15. Weighting Evaluation Criteria Environmental Concerns & EOL Pricing — 10% Product Pricing — 50% Product Line Lifecycle — 10 % Continuity of Components — 10% Product Evaluation — 20%

16. What Denver got in response No vendor was 100% responsive to environmental criteria Had to ask for more info on: –EOL management practices –Pricing for EOL services breakout –Authority to monitor OEM’s recycling vendor –Pricing for EOL services for current fleet

17. Ranking of vendors’ green pts. 4/03 Lesson Learned: Price wins in the end. Lesson Learned: Price wins in the end.

18. Denver took advantage of this By summer, Dell was front-runner. Dell’s community service to large public customers (San Diego “Digital Divide”) Asked Dell to host recycle events (city residents only) for life of contract. Got verbal agreement. Didn’t end up in final contract language. City can bring its e-scrap. Lesson Learned: Keep pressure on OEMs to do right thing in communities they serve. Lesson Learned: Keep pressure on OEMs to do right thing in communities they serve.

19. Dell’s takeback terms for Denver By Dell Asset Recovery Services $24/system or $3,400/truckload –(24 pallets < $5/unit). –may be some credit to Denver Denver palletizes & shrink-wraps. Pickup at Denver-specified location, –72 hrs. notice Detailed record-keeping & tag removal –data destruction - but not guaranteed –Settlement Report & Certificate of Disposal

20. Lessons Learned: Summary Process Get IT, Purchasing, & Environmental managers all involved early. Get the most senior & political support in the organization as possible. Establish evaluation criteria & weighting early. Place cost of EOL services in Cost - 25% 10% for other environmental criteria

21. Lessons Learned: Summary Content Let OEMs know how important this is. Tie to other things. It’s a risk management & cost issue. Emphasize good takeback the most. Increase emphasis on ROHS & WEEE compliance. If in Europe why not here? Be realistic about budget constraints. Push harder for OEM to absorb takeback costs.

22. Sample Desktop Purchase Criteria Weighting

23. Institutional Buying Power Public Sector Institutions WSCA/NASPO RFP State purchasing laws addressing green computers, evolving practices Private Sector GPOs Adopt health care green procurement: www.hcwh.org/goinggreen

24. Anne Peters Gracestone, Inc. 303.494.4934 voice 303.494.4880 fax annep@indra.com For more information:

25. Why are scrap electronics a problem in CO?