Tight budgets expected to stem agencies' vehicle purchases

In the alternative energy vehicle category, the choices run the gamut from battery-powered

New vehicle purchases likely will stay the same or decline in coming years as agencies struggle with declining budgets and new requirements to green their fleets.
Agencies purchased more than 86,500 vehicles in 2009, a 25 percent increase from the 69,400 vehicles purchased in 2008. But all of the increase is attributable to the 2009 Recovery Act, which funneled $300 million to the General Services Administration to purchase more than 17,000 fuel-efficient vehicles to replace older models.

When stimulus-related purchases are excluded, agencies actually purchased fewer cars in 2009 than in the previous year.

Bill Toth, director of GSA's Office of Motor Vehicle Management, expects that trend to continue for the foreseeable future.

Agencies are under increasing pressure to cut fuel consumption and now face a new mandate to cut greenhouse gas emissions from their vehicles. Most also are struggling with flat budgets, meaning there's less money available to purchase new vehicles.

One way to meet environmental goals while staying within tight budgets is to simply not buy as many new vehicles and instead rely on alternative solutions, such as sharing cars among employees and using more short-term rentals from services such as Zipcar, Toth said.

"With tightening budgets and efforts to streamline transportation ... you're going to see fewer cars purchased and fewer cars in the federal fleet overall," he said.

The cars agencies do purchase likely will be more fuel efficient than the ones they're replacing. That could mean downsizing from a six-cylinder sedan to a four-cylinder subcompact, or trading in a gasoline-powered car for a hybrid.

Agencies also will be taking advantage of emerging technologies as they become available, such as plug-in electric vehicles or cars powered by hydrogen fuel cells.

GSA purchased more than 5,600 hybrid vehicles earlier this year to lease to other agencies. That's in addition to the 3,100 hybrids that were purchased last year through the Recovery Act.

Toth said he expects agencies will continue to purchase more hybrids in coming years, although not at the inflated levels seen during the past two years.

If their spending remains steady, agencies can buy fewer hybrids or electric vehicles than their traditional gasoline-powered alternatives; the markup ranges from $11,000 for each hybrid to upwards of $100,000 for all-electric delivery trucks.

Even though hybrids use less gasoline than traditional vehicles, making that upfront investment is difficult for agencies to justify because the money used to purchase vehicles often comes from a different account than the money used to purchase fuel for those vehicles, said Joseph Sikes, director of facilities energy in the Office of the Deputy Undersecretary of Defense for Installations and Environment.

"It's easy to make the calculation, but it's harder to fit it into your budget," Sikes said.

The government's efforts to purchase hybrids and other alternative fuel vehicles as they become available will create a greater market for the vehicles, thus lowering the price for everyone, said Jason Mathers, project manager at the Environmental Defense Fund, an environmental advocacy organization based in New York.

"It's a good and important role for the government to help us get to scale on new technologies. We need a certain scale in order for the technology to be cost competitive with what's out there today," Mathers said.

- Tim Kauffman

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