Near the end of 2022, the federal government published a proposed rule amending the FAR related to requirements around "Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk". Comments were due in mid-February and I finally got down to reading a few of them.
Don't worry, I'm not going to weigh in on the merits. Plenty of others can do that.
But one response, submitted by the Alliance for Digital Innovation, caused me to quite literally laugh out loud. And, well, I laughed/cried while I sat down to write this and here's the excerpt that caused it (I know it's a wall of text; I summarize below):
The proposed rule estimates that the cost of compliance with the proposed rule is $604,702,840 in the initial year of implementation. As detailed in the text of the proposed rule, this number was calculated by adding the cost of regulatory familiarization, making annual representations, completing inventory of Scope 1 and Scope 2 emissions, as well as the cost of setting science-based targets for major contractors. This involved multiplying the time the rule predicts each category will take to complete by the hourly rate of the staff members needed in each category. The proposed rule significantly underestimates the time necessary for compliance, and therefore also underestimates the financial resources that contractors will need to spend as a result of the proposed rule. For example, the proposed rule estimates that the individual tasked with reviewing the rule will spend approximately 6 minutes per page familiarizing themselves with the rule and another 6 minutes to determine whether a contractor meets the definition of a “significant” or “major” contractor. While the estimates are unrealistic for larger entities, they are especially unrealistic for mid-size to smaller entities who may not already have the necessary staff or resources available for a proper review. In practice, compliance with the rule will be much more costly than the rule predicts in terms of both dollars and time spent by the reporting contractor.
It's not the only argument that the letter raises, but it was the one that made me laugh. Why? Let me break it down:
- The government's estimate is that it will cost $604 million to implement the proposed regulation.
- The way the government calculated it is to take the various tasks involved, determine an average for how long it takes, calculate the number of times you need to do that task, and multiply it by the hourly rate of the person doing the task. (This is super normal.)
- One of the major tasks is, well, reading a rule and figuring out whether it applies. (In government parlance this is called "regulatory familiarization".)
- The rule estimates it will take each person about 6 minutes to read each page.
- That's a silly calculation.
Now, before I address the merits of that argument, the source of that claim is indeed the proposed rule:
A page count of the rule, the various standards, the CDP Climate Change Questionnaire, and the SBTi Guidance is used to calculate the cost for regulatory familiarization. We assume individuals who review the documents will spend 6 minutes per page.
6 minutes per page. Check.
The documents themselves aren't exactly short, though. As the proposed rule notes, the total page count involved is either 360 or 967 pages, depending on whether the contractor is a large contractor or not. And the government doesn't assume there's only one person reading the documents, there are a handful. So, for example, the "cost for regulatory familiarization" for a "significant contractor that is a small business" is estimated to be ~$6,156/contractor.
So why did this all make me laugh uncontrollably? Because it's so logical. And rational. And so totally not how this is going to work.
I mean... there will be consultants who help companies with GHG compliance! There will be articles and conferences and workshops and continuing education that people will need to attend! There will be people who will print off all 967 pages and who will get into actual fistfights over whether they should have printed it double-sided.
And, of course, critically: my goodness, there will be lawyers! Yes, reader, lawyers will need to help companies as they go through "regulatory familiarization".
I just have to assume that some associate at some DC law firm wrote this comment for ADI and thought to themselves: "I know exactly how many pages I can read in a 6-minute time window, and this is BS! I'll show them."
And, let's be real. Even if the 6-minute per page heuristic were legit, lawyers don't charge for reading, y'know. You can't just, like, go to an auditor and say "my lawyer read the rule, concluded it didn't apply in their head, but never wrote it down for me". Lawyers charge to write memos for file.
So, yeah, I'm going to go out on a limb and guess that it's probably well north of 6 minutes per page and definitely far far far north of $94 per billable hour for regulatory familiarization.
But there's another aspect to this argument that made me laugh deep inside. A mental image, really. An imaginary vignette of what could happen.
Which is this: somewhere out there, there's a jaded 1102. And, I showed the letter from ADI to this jaded 1102 and specifically pointed out the paragraph. After reading it quietly, the jaded 1102 slowly nodded and then muttered: "you think 967 pages is bad? Wait til you see my next solicitation!"
In this telling of the story, I then turn to the associate who wrote the letter, turn back to the jaded 1102, and then to a policy analyst who worked on the GHG rule and needs to work through hundreds of comments. And we all chuckle a bit and I promptly buy them all a round of bourbon neats. After all, they deserve it.
 There were many comments. According to the docket on regulations.gov, there were 38,102 comments submitted on the proposed rule. I skimmed through a handful of the 261 that are published on the docket, and they range from enthusiastic about the proposed rule to, well, very unenthusiastic about the rule.
 Lawyers charge in 6-minute increments.
 For the uninitiated, "an 1102" is an federal acquisition professional (usually a contracting officer or contracting specialist). It's a reference to the job series. It's fun to knowingly and casually talk about "eleven-oh-two" at cocktail parties. Ask me how I know.