Resource Management Contracts: Innovative Solid Waste Management Method Julia Wolfe MassDEP Commercial Waste Reduction Coordinator or

2 Resource Management (RM) Contracts What is RM What is RM Overview of MassDEP project and results Overview of MassDEP project and results How can hospitals benefit? How can hospitals benefit?

3 Solid Waste Contracts Contracts – primary vehicle for solid waste service: Contracts – primary vehicle for solid waste service:  two-thirds or more of the U.S. municipal solid waste stream is managed through contracts. Many contract managers don’t understand waste issues. Many contract managers don’t understand waste issues. Solid waste is usually not a large part of the budget. Solid waste is usually not a large part of the budget. Solid waste costs rising and recovered materials markets are strong. Solid waste costs rising and recovered materials markets are strong. Facility managers not taking advantage of cost cutting opportunities. Facility managers not taking advantage of cost cutting opportunities.

4 “THERE ARE NO WASTE STREAMS, ONLY WASTED RESOURCES” — Raj Mishra, General Motors Corporation, 1999

5 What is RM? Tool or method using contractual relationship to emphasize/reward resource efficiency through waste prevention, reuse, recycling, composting. Tool or method using contractual relationship to emphasize/reward resource efficiency through waste prevention, reuse, recycling, composting.  Cap disposal costs  Include a cost sharing component on “resource efficiency” Contractors will pursue resource efficiency when offered proper financial incentives Contractors will pursue resource efficiency when offered proper financial incentives Changes the “more waste = more money” Changes the “more waste = more money” Allows generator to concentrate resources on core activities and “resource manager” to concentrate on waste. Allows generator to concentrate resources on core activities and “resource manager” to concentrate on waste.

6 How can a resource manager help? A resource manager can help with both external and internal waste management activities that affect waste generation. A resource manager can help with both external and internal waste management activities that affect waste generation.

7 Assess RM Potential in MA Project Partners One Beacon Street One Beacon Street Stop & Shop Stop & Shop Texas Instruments Texas Instruments Harvard University Harvard University Fitchburg State College Fitchburg State College Verizon Acushnet Company Shattuck Hospital General Dynamics

8 MA RM Assessment Project – Results For the 9 organizations: For the 9 organizations:  Potential to divert additional 5,000 tons/year  Net cost savings of roughly $500,000  14% - 48% savings as a percent of affected base service cost

9 Results – MA RM Assessment Project Some Results: Establish baseline Establish baseline Upper management support Upper management support Not using contracts to reduce waste Not using contracts to reduce waste Trash contractors have no incentive or ability to optimize or limit hauling or disposal services Trash contractors have no incentive or ability to optimize or limit hauling or disposal services Factors Limiting Adoption: Lack of knowledge, visibility, and understanding Lack of knowledge, visibility, and understanding Hauling and disposal is cheap compared to other organizational costs Hauling and disposal is cheap compared to other organizational costs Lack of profit incentives for companies to provide RM services Lack of profit incentives for companies to provide RM services

10 Massachusetts Pilots Hospital: Lemuel Shattuck Hospital Hospital: Lemuel Shattuck Hospital Defense Contractor: Raytheon Corporation Defense Contractor: Raytheon Corporation Hotel: Saunders Hotel Group Hotel: Saunders Hotel Group Property Management: One Beacon Street Property Management: One Beacon Street WasteWise RM Workshop for Hospitals

11 RM In Action at Lemuel Shattuck Hospital In FY’04 Shattuck saved $11,000 and diverted 44 tons of material to recycling. Fact Sheet: In FY’04 Shattuck saved $11,000 and diverted 44 tons of material to recycling. Fact Sheet: Excellent relationship between contractor and hospital. Excellent relationship between contractor and hospital. Chose a recycler that subcontracts its trash disposal. Chose a recycler that subcontracts its trash disposal. RM provider will be compensated about $10,000. RM provider will be compensated about $10,000.

12 RM In Action at Lemuel Shattuck Hospital Replaced 35 yd. compactor with 40 yd. compactor. Service level reduced: 3x - 2x/wk. $400/month savings. Replaced 35 yd. compactor with 40 yd. compactor. Service level reduced: 3x - 2x/wk. $400/month savings. Eliminated 40 yd. dumpster for bulk debris. Savings from dumpster rental (approximately $100/month), hauling and disposal costs. Temporary dumpster rented if needed. Eliminated 40 yd. dumpster for bulk debris. Savings from dumpster rental (approximately $100/month), hauling and disposal costs. Temporary dumpster rented if needed. New recycling: cardboard, organics, scrap metal, pallets and electronics New recycling: cardboard, organics, scrap metal, pallets and electronics Reduced administrative overhead – one contract as opposed to many. Reduced administrative overhead – one contract as opposed to many.

13 Conclusion Upfront work can pay off Upfront work can pay off Brings in waste expert to focus on waste issues. Brings in waste expert to focus on waste issues. Provides incentives to reduce waste Provides incentives to reduce waste Provides ability to work up the “supply chain” to reduce waste. Provides ability to work up the “supply chain” to reduce waste.

14 Additional Resources Massachusetts Case Studies: MA DEP’s Resource Management Website: Massachusetts Case Studies: MA DEP’s Resource Management Website: Resource Management Contracting Manual: Resource Management Contracting Manual: Join the MA WasteWise Program Join the MA WasteWise Program Earth 911 or Cleanup.org Earth 911 or Cleanup.org There are lots of resources at your fingertips!

15 Julia Wolfe Commercial Waste Reduction Coordinator Contact