[DOCID: f:hr047p1.110]
From the House Reports Online via GPO Access
[wais.access.gpo.gov]
110th Congress Rept. 110-47
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
ACCOUNTABILITY IN CONTRACTING ACT
_______
March 12, 2007.--Ordered to be printed
_______
Mr. Waxman, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 1362]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom was
referred the bill (H.R. 1362) to reform acquisition practices
of the Federal Government, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 5
Background and Need for Legislation.............................. 6
Legislative History.............................................. 7
Section-By-Section............................................... 7
Explanation Of Amendments........................................ 8
Committee Consideration.......................................... 8
Roll Call Votes.................................................. 8
Application Of Law To The Legislative Branch..................... 8
Statement Of Oversight Findings And Recommendations Of The
Committee...................................................... 9
Statement Of General Performance Goals And Objectives............ 9
Constitutional Authority Statement............................... 9
Federal Advisory Committee Act................................... 9
Unfunded Mandate Statement....................................... 9
Earmark Identification........................................... 9
Committee Estimate............................................... 9
Budget Authority And Congressional Budget Office Cost Estimate... 10
Changes In Existing Law Made By The Bill As Reported............. 12
Additional Views................................................. 18
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Accountability in
Contracting Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title and table of contents.
TITLE I--LIMITING THE USE OF ABUSE-PRONE CONTRACTS
Sec. 101. Limitation on length of noncompetitive contracts.
Sec. 102. Minimizing sole-source contracts.
Sec. 103. Minimizing cost-reimbursement type contracts.
TITLE II--INCREASING CONTRACT OVERSIGHT
Sec. 201. Public disclosure of justification and approval documents for
noncompetitive contracts.
Sec. 202. Disclosure of Government contractor overcharges.
Sec. 203. Funding contract oversight.
Sec. 204. Study of acquisition workforce.
Sec. 205. Repeal of sunset of training fund.
TITLE III--PROMOTING INTEGRITY IN CONTRACTING
Sec. 301. Additional provisions relating to procurement officials.
TITLE I--LIMITING THE USE OF ABUSE-PRONE CONTRACTS
SEC. 101. LIMITATION ON LENGTH OF NONCOMPETITIVE CONTRACTS.
(a) Revision of FAR.--Not later than one year after the date of the
enactment of this Act, the Federal Acquisition Regulation shall be
revised to restrict the contract period of any contract described in
subsection (c) to the minimum contract period necessary--
(1) to meet the urgent and compelling requirements of the
work to be performed under the contract; and
(2) to enter into another contract for the required goods or
services through the use of competitive procedures.
(b) Contract Period.--The regulations promulgated under subsection
(a) shall require the contract period to not exceed 240 days, unless
the head of the executive agency concerned determines that exceptional
circumstances apply.
(c) Covered Contracts.--This section applies to any contract in an
amount greater than the simplified acquisition threshold entered into
by an executive agency using procedures other than competitive
procedures pursuant to the exception provided in section 303(c)(2) of
the Federal Property and Administrative Services Act of 1949 (41 U.S.C.
253(c)(2)) or section 2304(c)(2) of title 10, United States Code.
(d) Definitions.--In this section:
(1) The term ``executive agency'' has the meaning provided in
section 4(1) of the Office of Federal Procurement Policy Act
(41 U.S.C. 403(1)).
(2) The term ``head of the executive agency'' means the head
of an executive agency except that, in the case of a military
department, the term means the Secretary of Defense.
SEC. 102. MINIMIZING SOLE-SOURCE CONTRACTS.
(a) Plans Required.--Subject to subsection (c), the head of each
executive agency covered by title III of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) and the
head of each agency covered by chapter 137 of title 10, United States
Code, shall develop and implement a plan to minimize the use of
contracts entered into using procedures other than competitive
procedures by the agency concerned. The plan shall contain measurable
goals and shall be completed and submitted to the Committee on
Oversight and Government Reform of the House of Representatives, the
Committee on Homeland Security and Governmental Affairs of the Senate,
and the Committees on Appropriations of the House of Representatives
and the Senate with a copy provided to the Comptroller General, not
later than 1 year after the date of the enactment of this Act.
(b) Comptroller General Review.--The Comptroller General shall review
the plans provided under subsection (a) and submit a report to Congress
on the plans not later than 18 months after the date of the enactment
of this Act.
(c) Requirement Limited to Certain Agencies.--The requirement of
subsection (a) shall apply only to those agencies that awarded
contracts in a total amount of at least $1,000,000,000 in the fiscal
year preceding the fiscal year in which the report is submitted.
SEC. 103. MINIMIZING COST-REIMBURSEMENT TYPE CONTRACTS.
(a) Plans Required.--Subject to subsection (c), the head of each
executive agency covered by title III of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) and the
head of each agency covered by chapter 137 of title 10, United States
Code, shall develop and implement a plan to minimize the use of cost-
reimbursement type contracts by the agency concerned. The plan shall
contain measurable goals and shall be completed and submitted to the
Committee on Oversight and Government Reform of the House of
Representatives, the Committee on Homeland Security and Governmental
Affairs of the Senate, and the Committees on Appropriations of the
House of Representatives and the Senate with a copy provided to the
Comptroller General, not later than 1 year after the date of the
enactment of this Act.
(b) Comptroller General Review.--The Comptroller General shall review
the plans provided under subsection (a) and submit a report to Congress
on the plans not later than 18 months after the date of the enactment
of this Act.
(c) Requirement Limited to Certain Agencies.--The requirement of
subsection (a) shall apply only to those agencies that awarded
contracts in a total amount of at least $1,000,000,000 in the fiscal
year preceding the fiscal year in which the report is submitted.
TITLE II--INCREASING CONTRACT OVERSIGHT
SEC. 201. PUBLIC DISCLOSURE OF JUSTIFICATION AND APPROVAL DOCUMENTS FOR
NONCOMPETITIVE CONTRACTS.
(a) Civilian Agency Contracts.--
(1) In general.--Section 303 of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 253) is amended
by adding at the end the following new subsection:
``(j)(1) In the case of a procurement permitted by subsection (c),
the head of an executive agency shall make publicly available, within
14 days after the award of the contract, the documents containing the
justification and approval required by subsection (f)(1) with respect
to the procurement.
``(2) The documents shall be made available on the website of the
agency and through the Federal Procurement Data System.
``(3) This subsection does not require the public availability of
information that is exempt from public disclosure under section 552(b)
of title 5, United States Code.''.
(2) Conforming amendment.--Section 303(f) of such Act is
amended--
(A) by striking paragraph (4); and
(B) by redesignating paragraph (5) as paragraph (4).
(b) Defense Agency Contracts.--
(1) In general.--Section 2304 of title 10, United States
Code, is amended by adding at the end the following new
subsection:
``(l)(1) In the case of a procurement permitted by subsection (c),
the head of an agency shall make publicly available, within 14 days
after the award of the contract, the documents containing the
justification and approval required by subsection (f)(1) with respect
to the procurement.
``(2) The documents shall be made available on the website of the
agency and through the Federal Procurement Data System.
``(3) This subsection does not require the public availability of
information that is exempt from public disclosure under section 552(b)
of title 5.''.
(2) Conforming amendment.--Section 2304(f) of such title is
amended--
(A) by striking paragraph (4); and
(B) by redesignating paragraphs (5) and (6) as
paragraphs (4) and (5), respectively.
SEC. 202. DISCLOSURE OF GOVERNMENT CONTRACTOR OVERCHARGES.
(a) Quarterly Report to Congress.--
(1) The head of each Federal agency or department shall
submit to the chairman and ranking member of each committee
specified in paragraph (2) on a quarterly basis a report that
includes the following:
(A) A list of audits or other reports issued during
the applicable quarter that describe contractor costs
in excess of $1,000,000 that have been identified as
unjustified, unsupported, questioned, or unreasonable
under any contract, task or delivery order, or
subcontract.
(B) The specific amounts of costs identified as
unjustified, unsupported, questioned, or unreasonable
and the percentage of their total value of the
contract, task or delivery order, or subcontract.
(C) A list of audits or other reports issued during
the applicable quarter that identify significant or
substantial deficiencies in the performance of any
contractor or in any business system of any contractor
under any contract, task or delivery order, or
subcontract.
(2) The report described in paragraph (1) shall be submitted
to the Committee on Oversight and Government Reform of the
House of Representatives, the Committee on Homeland Security
and Governmental Affairs of the Senate, the Committees on
Appropriations of the House of Representatives and the Senate,
and other committees of jurisdiction.
(3) Paragraph (1) shall not apply to an agency or department
with respect to a calendar quarter if no audits or other
reports described in paragraph (1) were issued during that
quarter.
(b) Submission of Individual Audits.--The head of each Federal agency
or department shall provide, within 14 days after a request in writing
by the chairman or ranking member of any of the committees described in
subsection (a)(2), a full and unredacted copy of any audit or other
report described in subsection (a)(1).
SEC. 203. FUNDING CONTRACT OVERSIGHT.
(a) Civilian Agency Contracts.--Title III of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) is amended
by adding at the end the following new section:
``SEC. 318. REQUIREMENT FOR 1 PERCENT OF CONTRACT AMOUNTS TO BE USED
FOR CONTRACT PERSONNEL, ADMINISTRATION, OVERSIGHT,
AND PLANNING.
``(a) Requirement.--In addition to the sums used for the purposes
listed in this section during fiscal year 2006, each fiscal year, the
head of an executive agency shall ensure that the agency uses an
additional amount equal to 1 percent of the aggregate amount of
contracts entered into by the agency during that fiscal year for the
following purposes:
``(1) Hiring and training of acquisition workforce personnel.
``(2) Contract planning.
``(3) Contract administration.
``(4) Contract oversight, including audits and enforcement.
``(b) Guidelines.--The Administrator for Federal Procurement Policy
shall issue guidelines for executive agencies on the implementation of
this section. Such guidelines shall ensure that the amount described in
subsection (a) is additional funding above the fiscal year 2006 level.
Such guidelines also shall provide direction to agencies on identifying
priorities for the use of the additional funds.''.
(b) Defense Contracts.--
(1) In general.--Chapter 141 of title 10, United States Code,
is amended by adding at the end the following new section:
``Sec. 2410q. Requirement for 1 percent of contract amounts to be used
for contract personnel, administration, oversight,
and planning
``(a) Requirement.--In addition to the sums used for the purposes
listed in this section during fiscal year 2006, each fiscal year, the
head of an agency (as defined in section 2302(1) of this title) shall
ensure that the agency uses an additional amount equal to 1 percent of
the aggregate amount of contracts entered into by the agency during
that fiscal year for the following purposes:
``(1) Hiring and training of acquisition workforce personnel.
``(2) Contract planning.
``(3) Contract administration.
``(4) Contract oversight, including audits and enforcement.
``(b) Guidelines.--The Administrator for Federal Procurement Policy
shall issue guidelines for agencies on the implementation of this
section. Such guidelines shall ensure that the amount described in
subsection (a) is additional funding above the fiscal year 2006 level.
Such guidelines also shall provide direction to agencies on identifying
priorities for the use of the additional funds.''.
(2) Clerical amendment.--The table of sections at the
beginning of such chapter is amended by adding at the end the
following new item:
``2410q. Requirement for 1 percent of contract amounts to be used for
contract personnel, administration, oversight, and planning.''.
SEC. 204. STUDY OF ACQUISITION WORKFORCE.
(a) Requirement for Study.--The Administrator for Federal Procurement
Policy shall conduct a study of the composition, scope, and functions
of the Government-wide acquisition workforce and develop a
comprehensive definition of, and method of measuring, such workforce.
(b) Report.--Not later than 1 year after the date of the enactment of
this Act, the Administrator shall submit to the relevant congressional
committees a report on the results of the study required by subsection
(a), with such findings and recommendations as the Administrator
determines appropriate.
SEC. 205. REPEAL OF SUNSET OF TRAINING FUND.
Subparagraph (H) of section 37(h)(3) of the Office of Federal
Procurement Policy Act (41 U.S.C. 433(h)(3)) is repealed.
TITLE III--PROMOTING INTEGRITY IN CONTRACTING
SEC. 301. ADDITIONAL PROVISIONS RELATING TO PROCUREMENT OFFICIALS.
(a) Elimination of Loopholes That Allow Former Federal Officials to
Accept Compensation From Contractors or Related Entities.--Section
27(d) of the Office of Federal Procurement Policy Act (41 U.S.C.
423(d)) is amended--
(1) in paragraph (1)--
(A) by striking ``or consultant'' and inserting
``consultant, lawyer, or lobbyist'';
(B) in subparagraph (C), by striking ``personally
made for the Federal agency--'' and inserting
``participated personally and substantially in--''; and
(2) by amending paragraph (2) to read as follows:
``(2) Paragraph (1) shall not prohibit a former official of a Federal
agency from accepting compensation from any division or affiliate of a
contractor that does not produce the same or similar products or
services as the entity of the contractor that is responsible for the
contract referred to in subparagraph (A), (B), or (C) of such paragraph
if the agency's designated ethics officer determines that--
``(A) the offer of compensation is not a reward for any
action described in paragraph (1); and
``(B) acceptance of the compensation is appropriate and will
not affect the integrity of the procurement process.''.
(b) Requirement for Federal Procurement Officers to Disclose Job
Offers Made on Behalf of Relatives.--Section 27(c)(1) of such Act (41
U.S.C. 423(c)(1)) is amended by inserting after ``that official'' the
following: ``or for a relative of that official (as defined in section
3110 of title 5, United States Code)''.
(c) Requirement on Award of Government Contracts to Former
Employers.--Section 27 of such Act (41 U.S.C. 423) is amended by adding
at the end the following new subsection:
``(i) Prohibition on Involvement by Certain Former Contractor
Employees in Procurements.--An employee of the Federal Government who
is a former employee of a contractor with the Federal Government shall
not be personally and substantially involved with any award of a
contract to the employee's former employer, or the administration of
such a contract, for the one-year period beginning on the date on which
the employee leaves the employment of the contractor, unless the
employee has received a waiver from the agency's designated ethics
officer. In determining whether to issue a waiver, the designated
ethics officer shall take into account the agency's need for the
involvement of the employee and the impact a waiver would have on
public confidence in the integrity of the procurement process.''.
(d) Regulations.--Section 27 of such Act (41 U.S.C. 423) is further
amended by adding at the end the following new subsection:
``(j) Regulations.--The Administrator, in consultation with the
Director of the Office of Government Ethics, shall--
``(1) promulgate regulations to carry out and ensure the
enforcement of this section; and
``(2) monitor and investigate individual and agency
compliance with this section.''.
(e) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act, except that the
amendment made by subsection (a)(1)(B) shall apply to individuals who
terminate Government service after March 31, 2007.
Purpose and Summary
H.R. 1362, the ``Accountability in Contracting Act,'' was
introduced by Rep. Waxman on March 6, 2007. The measure would
make several changes to federal acquisition laws to increase
transparency and accountability in federal contracting, to
require agencies to limit the use of certain types of abuse-
prone contracts, and to promote integrity in the acquisition
workforce. The bill would limit the length of certain
noncompetitive contracts and require large federal agencies to
develop plans to minimize the use of noncompetitive contracts
and cost-reimbursement type contracts. In addition the bill
would require the public disclosure of justification and
approval documents required for noncompetitive contracts and
require reports to Congress on certain contract audits.
Finally, the bill contains a number of provisions which would
improve the acquisition workforce.
Background and Need for Legislation
Under the Bush Administration, spending on federal
contracts has grown by $175 billion, making federal contracts
the fastest growing component of the federal budget. The
federal government now spends nearly 40 cents of every
discretionary dollar on contracts with private companies, a
record level. This surge in contract spending has enriched
some, but it has come at a steep cost to taxpayers through
rising waste, fraud, abuse, and mismanagement.
Spending on sole-source and other noncompetitive contracts
has more than doubled over the last five years. Over the last
five years, the Administration has jeopardized taxpayer
interests and squandered hundreds of millions of dollars by
giving private contractors exclusive control over huge portions
of the reconstruction effort in Iraq. The Administration has
justified the award of lucrative sole-source contracts by
citing urgent and compelling needs, but then allowed these
contracts to continue years after the emergency has passed.
Cost-reimbursement type contracts leave the taxpayer vulnerable
to wasteful spending by providing contractors with little or no
incentive to control costs. Between 2000 and 2005 the use of
this type of contract has risen 75%. The Administration has
also hidden contractor overcharges from Congress, international
auditors, and the public, impeding oversight and diminishing
accountability.
And too often the independence of procurement officials has
been compromised by illegal relationships with government
contractors, such as when Darleen Druyun, the former chief
acquisition official for the Air Force, negotiated a lucrative
deal to lease aircraft from Boeing in exchange for future
employment.
All of these problems have been compounded by an
insufficient acquisition workforce to both properly award and
adequately oversee federal contracts, which has been a large
and recurring problem for a number of years. At a Committee
hearing on February 8, 2007, Inspector General Richard Skinner
testified:
The government's greatest exposure to fraud, waste
and abuse is undoubtedly in the area of procurement. As
already pointed out by members of this committee, the
problem is not a new one. It dates back to the federal
government's near-sighted policies of the early '90s to
reduce the federal workforce. While acquisition
management capabilities were being downsized, the
procurement workload was on the rise.
Over the last five years, major government initiatives--
including border and homeland security, the reconstruction in
Iraq, and the recovery effort after Hurricane Katrina--have
been undermined by billions in wasteful spending. In total,
contracts collectively worth over $800 billion have experienced
significant overcharges, contract abuse, or mismanagement under
the current Administration.
Legislative History
H.R. 1362, the ``Accountability in Contracting Act,'' was
introduced by Rep. Waxman on March 6, 2007. The Committee held
a business meeting on the bill on March 8, 2007, at which a
number of amendments were considered and the bill was favorably
reported.
Section-By-Section
Sec. 101 would limit the length of certain contracts
awarded without competition. One case in which the award of
such contracts is permitted is if an agency faces an ``unusual
and compelling urgency'' for the goods or services (41 U.S.C.
253(c)(2)). The bill would limit the length of a sole-source
contract awarded using this authority to a maximum of 240 days,
unless the length limitation is waived by the head of the
agency due to exceptional circumstances.
Sec. 102 would require agencies that spend more than $1
billion on federal contracts to develop and implement a plan to
minimize the use of sole-source contracts. The plan must
contain measurable goals and be submitted to Congress within
one year of enactment. The section also requires the plan to be
submitted to the Comptroller General, who is required to submit
an analysis of the plan to Congress within 18 months.
Sec. 103 would require federal agencies that spend more
than $1 billion on federal contracts to develop and implement a
plan to minimize the use of cost-reimbursement type contracts.
The plan must contain measurable goals and be submitted to
Congress within one year of enactment. The section also
requires the plan to be submitted to the Comptroller General,
who is required to submit an analysis of the plan to Congress
within 18 months.
Sec. 201 would require justification and approval documents
to be made publicly available within 14 days of the award of a
noncompetitive contract. Justification and approval documents
are required when an agency awards such a contract and explains
why the agency did not require full and open competition.
Classified, business-sensitive, and other information exempt
from disclosure under the Freedom of Information Act is exempt
from the requirements of this section.
Sec. 202 would require certain contract overcharges to be
reported to Congress. Agencies would be required to report on a
quarterly basis all contractor costs in excess of $1 million
that are unjustified, unsupported, questioned, or unreasonable.
The section also requires unredacted copies of any audit
finding such costs to be submitted to Congress upon request.
Sec. 203 would require agencies devote at least an
additional 1% of their procurement budget to contract
oversight, planning, and administration. It also requires the
Administrator for Federal Procurement Policy to issue
implementing guidelines.
Sec. 204 would require the Administrator for Federal
Procurement Policy to conduct a study of the federal
acquisition workforce and develop a comprehensive definition
of, and method of measuring, this workforce.
Sec. 205 would repeal 41 U.S.C. 433(h)(3), which terminates
the authorization for an existing fund for training the
acquisition workforce.
Sec. 301 would amend section 27 of the Office of Federal
Procurement Policy Act (41 U.S.C. 423), close loopholes in the
current ``revolving door'' laws applicable to government
contracting officials. The bill would prevent a government
contracting official who awarded a contract to a private
company from working as a lobbyist or lawyer for the company
during a one-year cooling off period. The bill would also
prohibit contracting officials from negotiating employment for
their relatives. In addition, the bill would prohibit for one
year a procurement official who is a former employee of a
private-sector contractor from working on the award or
management of a contract held by the official's former
employee, subject to a waiver provision.
Explanation of Amendments
Five amendments to the bill were considered. Rep. Waxman
offered an amendment in the nature of a substitute which added
two provisions to the bill, sections 204 and 205, which are
discussed in the section-by-section analysis above. The
amendment also added a new requirement that the Administrator
for Federal Procurement Policy issue guidelines to implement
the funding provisions of section 203. The amendment was
adopted by voice vote. Rep. Davis offered an amendment which
would have deleted the requirement in the bill that agencies
report on questioned costs over one million dollars, and
replaced it with a requirement that unallowable costs be
reported. This amendment was defeated on a voice vote. Rep.
Davis also offered an amendment to create a government/industry
exchange program, which was ruled non-germane. Rep. Davis also
offered an amendment to strike section 301, which was defeated
on a voice vote. Finally, Rep. Davis offered an amendment which
would amend section 301 of the bill to strike the two-year
post-employment restrictions on contracting officers and permit
a waiver of the bill's requirement that individuals can not be
involved in acquisitions that involve their former private
sector employers. This amendment was adopted by voice vote. The
bill was ordered reported on a voice vote.
Committee Consideration
On Thursday, March 8, 2007, the Committee ordered the bill
reported to the House by a voice vote.
Roll Call Votes
There were no roll call votes on the bill.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill provides enhanced transparency to the operations of
the executive branch. As such this bill does not relate to
employment or access to public services and accommodations.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report, and include making federal acquisition more
transparent and accountable, limiting the use of abuse-prone
contracts, and promoting integrity in the acquisition
workforce.
Constitutional Authority Statement
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress to enact the law
proposed by H.R. 1362. Article I, Section 8, Clause 18 of the
Constitution of the United States grants the Congress the power
to enact this law.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandate Reform Act, P.L. 104-4) requires a statement whether
the provisions of the report include unfunded mandates. In
compliance with this requirement the Committee has received a
letter from the Congressional Budget Office included herein.
Earmark Identification
H.R. 1362 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(d), 9(e), or 9(f) of rule XXI.
Committee Estimate
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 1362. However, clause 3(d)(3)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 1362 from the Director of
Congressional Budget Office:
March 12, 2007.
Hon. Henry A. Waxman,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1362, the
Accountability in Contracting Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Peter R. Orszag,
Director.
Enclosure.
H.R. 1362--Accountability in Contracting Act
Summary: H.R. 1362 would amend federal contracting rules.
Specifically the legislation would require federal agencies to
limit the length of noncompetitive contracts and limit the use
of sole- source and cost-reimbursement contracts when possible.
H.R. 1362 also would authorize an increase in funds used to pay
for contract oversight, planning, and administration equal to 1
percent of the value of an agency's contracts. The legislation
would require various reports to the Congress on noncompetitive
contracts and contractor overcharges and amend employment
restrictions on federal procurement officials.
CBO estimates that implementing H.R. 1362 would cost $20
billion over the 2008-2012 period, assuming appropriation of
the necessary amounts to provide additional resources for
contract oversight, planning, and administration. That estimate
does not include any costs or savings that could result from
implementing the legislation's provisions regarding the use of
noncompetitive and cost-reimbursement contracts. CBO has no
basis for estimating any costs or savings for those provisions.
Enacting the bill could affect revenues by increasing
collections of civil penalties, but CBO estimates that any
increase in revenue collection would not be significant.
Enacting the bill would not affect direct spending.
H.R. 1362 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments.
H.R. 1362 would impose a private-sector mandate, as defined
in UMRA, on certain former federal officials that were
substantially involved in the awarding of contracts. CBO
expects that the direct cost of complying with the mandate
would fall well below the annual threshold for private-sector
mandates ($131 million in 2007, adjusted annually for
inflation).
Estimated cost to the federal government: The estimated
budgetary impact of H.R. 1362 is shown in the following table.
The cost of this legislation falls within all budget functions
that provide contract funding.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------
2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level................................. 4,000 4,070 4,145 4,220 4,295
Estimated Outlays............................................. 3,440 3,900 4,090 4,165 4,240
----------------------------------------------------------------------------------------------------------------
Basis of estimate: H.R. 1362 would amend federal
contracting rules and authorize the appropriation of additional
funds for contract oversight, planning, and administration. CBO
estimates that implementing H.R. 1362 would cost about $20
billion over the 2008-2012 period, assuming appropriation of
the necessary funds. For this estimate, CBO assumes that the
bill will be enacted before the start of fiscal year 2008 and
that spending will follow historical patterns for contract
oversight activity.
Spending subject to appropriation
Contract Oversight. Section 203 would authorize the
appropriation of additional funds for contract oversight,
planning, and administration equivalent to 1 percent of the
value of contract awards. Those funds would be used for hiring
and training of acquisition workforce personnel, as well as
contract planning, administration, and oversight. Based on
information from the General Services Administration, CBO
estimates that federal government awards contracts with a value
of about $400 billion annually. Thus, CBO estimates that
implementing H.R. 1362 would require additional appropriations
of about $4 billion annually (with adjustments for inflation).
As a result, we estimate a cost ofabout $20 billion over the
2008-2012 period, assuming appropriation of the necessary amounts, and
that the value of federal contracts increases at the rate of
anticipated inflation.
Federal Contracting Rules. H.R. 1362 would amend various
contracting rules regarding the use of noncompetitive, sole-
source, and cost-reimbursement contracts by the federal
government. This would include restrictions on the contract
period for noncompetitive contracts and limiting the use of
sole-source and cost-reimbursement contracts.
The provisions of the legislation that would impose
restrictions on the length of noncompetitive contracts and
limit the use of sole-source and cost-reimbursement contracts
could increase costs for contract administration, but could
also result in the use of other types of contract procurements
that may lower costs to the government. CBO has no basis for
estimating the net impact on the budget of those provisions.
The circumstances involving the use of cost-reimbursement and
noncompetitive contracts by federal agencies and the potential
to use other types of contracts in those situations is often
unique. At this time, CBO does not have sufficient information
relating to the use of noncompetitive and cost-reimbursement
contracts to determine the magnitude of any cost or savings
that could result from implementing H.R. 1362.
Other Provisions. The legislation also would require
federal agencies to report to the Congress on noncompetitive
and contractor overcharges. In addition, H.R. 1362 would
require reviews and reports by the Government Accountability
Office on the use of federal contracts. H.R. 1362 would amend
employment restrictions on federal procurement officials. Based
on the cost of similar activities, CBO estimates that those
provisions would increase federal administrative costs by a few
million dollars a year.
Revenues
Enacting H.R. 1362 could affect federal revenues as a
result of new civil penalties for violations of procurement
employment restrictions. Collections of civil penalties are
recorded in the budget as revenues. CBO estimates, however,
that any change in revenues that would result from enacting the
bill would not be significant.
Estimated impact on state, local, and tribal governments:
H.R. 1362 contains no intergovernmental mandates as defined in
UMRA and would not affect the budgets of state, local, or
tribal governments.
Estimate impact on the private sector: H.R. 1362 would
impose a private-sector mandate, as defined in UMRA, on certain
former federal officials that were substantially involved in
government contracts awarded in excess of $10 million. The bill
would expand an existing one-year restriction that would
prohibit those officials from accepting compensation as an
employee, officer, director, or consultant from contractors
receiving such awards. The mandate would apply to those
officials that leave government service after March 31, 2007,
but before the date of enactment. The cost of the mandate would
be the potential loss of net income resulting from the
restriction on those former federal officials. Because the bill
would limit the restriction on compensation to apply to lines
of business directly related to the awarded contract, CBO
expects the direct cost of complying with the mandate would be
minimal and would fall below the annual threshold established
in UMRA ($131 million in 2007, adjusted annually for
inflation).
Estimate prepared by: Federal costs: Matthew Pickford.
Impact on state, local, and tribal governments: Lisa Ramirez-
Branum. Impact on the private sector: Amy Petz.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949
TITLE III--PROCUREMENT PROCEDURE
* * * * * * *
SEC. 303. COMPETITION REQUIREMENTS.
(a) * * *
* * * * * * *
(f)(1) * * *
* * * * * * *
[(4) The justification required by paragraph (1)(A) and any
related information shall be made available for inspection by
the public consistent with the provisions of section 552 of
title 5, United States Code.]
[(5)] (4) In no case may an executive agency--
(A) * * *
* * * * * * *
(j)(1) In the case of a procurement permitted by subsection
(c), the head of an executive agency shall make publicly
available, within 14 days after the award of the contract, the
documents containing the justification and approval required by
subsection (f)(1) with respect to the procurement.
(2) The documents shall be made available on the website of
the agency and through the Federal Procurement Data System.
(3) This subsection does not require the public availability
of information that is exempt from public disclosure under
section 552(b) of title 5, United States Code.
* * * * * * *
SEC. 318. REQUIREMENT FOR 1 PERCENT OF CONTRACT AMOUNTS TO BE USED FOR
CONTRACT PERSONNEL, ADMINISTRATION, OVERSIGHT, AND
PLANNING.
(a) Requirement.--In addition to the sums used for the
purposes listed in this section during fiscal year 2006, each
fiscal year, the head of an executive agency shall ensure that
the agency uses an additional amount equal to 1 percent of the
aggregate amount of contracts entered into by the agency during
that fiscal year for the following purposes:
(1) Hiring and training of acquisition workforce
personnel.
(2) Contract planning.
(3) Contract administration.
(4) Contract oversight, including audits and
enforcement.
(b) Guidelines.--The Administrator for Federal Procurement
Policy shall issue guidelines for executive agencies on the
implementation of this section. Such guidelines shall ensure
that the amount described in subsection (a) is additional
funding above the fiscal year 2006 level. Such guidelines also
shall provide direction to agencies on identifying priorities
for the use of the additional funds.
* * * * * * *
----------
TITLE 10, UNITED STATES CODE
* * * * * * *
Subtitle A--General Military Law
* * * * * * *
PART IV--SERVICE, SUPPLY, AND PROCUREMENT
* * * * * * *
CHAPTER 137--PROCUREMENT GENERALLY
* * * * * * *
Sec. 2304. CONTRACTS: COMPETITION REQUIREMENTS
(a) * * *
* * * * * * *
(f)(1) * * *
* * * * * * *
[(4) The justification required by paragraph (1)(A) and any
related information, and any document prepared pursuant to
paragraph (2)(E), shall be made available for inspection by the
public consistent with the provisions of section 552 of title
5.]
[(5)] (4) In no case may the head of an agency--
(A) * * *
* * * * * * *
[(6)] (5)(A) The authority of the head of a procuring
activity under paragraph (1)(B)(ii) may be delegated only to an
officer or employee who--
(i) * * *
* * * * * * *
(l)(1) In the case of a procurement permitted by subsection
(c), the head of an agency shall make publicly available,
within 14 days after the award of the contract, the documents
containing the justification and approval required by
subsection (f)(1) with respect to the procurement.
(2) The documents shall be made available on the website of
the agency and through the Federal Procurement Data System.
(3) This subsection does not require the public availability
of information that is exempt from public disclosure under
section 552(b) of title 5.
* * * * * * *
CHAPTER 141--MISCELLANEOUS PROCUREMENT PROVISIONS
Sec.
2381. Contracts: regulations for bids.
* * * * * * *
2410q. Requirement for 1 percent of contract amounts to be used for
contract personnel, administration, oversight, and planning.
* * * * * * *
Sec. 2410q. Requirement for 1 percent of contract amounts to be used
for contract personnel, administration, oversight,
and planning
(a) Requirement.--In addition to the sums used for the
purposes listed in this section during fiscal year 2006, each
fiscal year, the head of an agency (as defined in section
2302(1) of this title) shall ensure that the agency uses an
additional amount equal to 1 percent of the aggregate amount of
contracts entered into by the agency during that fiscal year
for the following purposes:
(1) Hiring and training of acquisition workforce
personnel.
(2) Contract planning.
(3) Contract administration.
(4) Contract oversight, including audits and
enforcement.
(b) Guidelines.--The Administrator for Federal Procurement
Policy shall issue guidelines for agencies on the
implementation of this section. Such guidelines shall ensure
that the amount described in subsection (a) is additional
funding above the fiscal year 2006 level. Such guidelines also
shall provide direction to agencies on identifying priorities
for the use of the additional funds.
* * * * * * *
----------
OFFICE OF FEDERAL PROCUREMENT POLICY ACT
* * * * * * *
SEC. 27. RESTRICTIONS ON DISCLOSING AND OBTAINING CONTRACTOR BID OR
PROPOSAL INFORMATION OR SOURCE SELECTION
INFORMATION.
(a) * * *
* * * * * * *
(c) Actions Required of Procurement Officers When Contacted
by Offerors Regarding Non-Federal Employment.--(1) If an agency
official who is participating personally and substantially in a
Federal agency procurement for a contract in excess of the
simplified acquisition threshold contacts or is contacted by a
person who is a bidder or offeror in that Federal agency
procurement regarding possible non-Federal employment for that
official or for a relative of that official (as defined in
section 3110 of title 5, United States Code), the official
shall--
(A) * * *
* * * * * * *
(d) Prohibition on Former Official's Acceptance of
Compensation From Contractor.--(1) A former official of a
Federal agency may not accept compensation from a contractor as
an employee, officer, director, [or consultant] consultant,
lawyer, or lobbyist of the contractor within a period of one
year after such former official--
(A) * * *
* * * * * * *
(C) [personally made for the Federal agency--
] participated personally and substantially
in--
(i) * * *
* * * * * * *
[(2) Nothing in paragraph (1) may be construed to prohibit a
former official of a Federal agency from accepting compensation
from any division or affiliate of a contractor that does not
produce the same or similar products or services as the entity
of the contractor that is responsible for the contract referred
to in subparagraph (A), (B), or (C) of such paragraph.]
(2) Paragraph (1) shall not prohibit a former official of a
Federal agency from accepting compensation from any division or
affiliate of a contractor that does not produce the same or
similar products or services as the entity of the contractor
that is responsible for the contract referred to in
subparagraph (A), (B), or (C) of such paragraph if the agency's
designated ethics officer determines that--
(A) the offer of compensation is not a reward for any
action described in paragraph (1); and
(B) acceptance of the compensation is appropriate and
will not affect the integrity of the procurement
process.
* * * * * * *
(i) Prohibition on Involvement by Certain Former Contractor
Employees in Procurements.--An employee of the Federal
Government who is a former employee of a contractor with the
Federal Government shall not be personally and substantially
involved with any award of a contract to the employee's former
employer, or the administration of such a contract, for the
one-year period beginning on the date on which the employee
leaves the employment of the contractor, unless the employee
has received a waiver from the agency's designated ethics
officer. In determining whether to issue a waiver, the
designated ethics officer shall take into account the agency's
need for the involvement of the employee and the impact a
waiver would have on public confidence in the integrity of the
procurement process.
(j) Regulations.--The Administrator, in consultation with the
Director of the Office of Government Ethics, shall--
(1) promulgate regulations to carry out and ensure
the enforcement of this section; and
(2) monitor and investigate individual and agency
compliance with this section.
* * * * * * *
SEC. 37. ACQUISITION WORKFORCE.
(a) * * *
* * * * * * *
(h) Education and Training.--
(1) * * *
* * * * * * *
(3) Acquisition workforce training fund.--(A) * * *
* * * * * * *
[(H) This paragraph shall cease to be effective five years
after the date of the enactment of the National Defense
Authorization Act for Fiscal Year 2004.]
* * * * * * *
ADDITIONAL VIEWS OF RANKING MEMBER DAVIS
H.R. 1362 would make a number of changes to the procurement
laws in an attempt to reform our acquisition system through a
series of restrictions and reports that are geared towards
greater regulation and oversight. More specifically, the
legislation would, in part, (1) limit the duration of contracts
awarded under urgent conditions, (2) require agency reports
regarding the use of cost-type and sole-source contracts, (3)
require additional reports to Congress on audit reports under
cost-type contracts and, (4) broaden the reach of current
limitations on post-employment opportunities for our
acquisition workforce as well as limit the ability of
acquisition workers hired by the government from the private
sector to participate in certain acquisition activities.
H.R. 1362 also includes two provisions that Chairman Waxman
added at my request, both intended to strengthen the federal
acquisition workforce through better training and management.
Section 204 would require the Administrator for Federal
Procurement Policy to come up with a government-wide definition
for ``acquisition workforce'' and section 205 would make
permanent the Acquisition Workforce Training Fund, first
enacted in the Services Acquisition Reform Act, which I
authored.
During Committee consideration of H.R. 1362, I offered
three amendments which would have helped the legislation
address some of the real challenges facing our acquisition
system. Unfortunately, none of them were accepted. The problems
the amendments sought to address were primarily the result of
management difficulties exacerbated by an overburdened,
understaffed and undertrained workforce.
First, I offered an amendment to section 202. That section
would require agencies to provide Congress reports on
preliminary contract audits that contain ``questionable''
contractor costs above $1 million--in the auditor's opinion. I
believe, however, such reports will present a distorted and
incomplete picture of the management of cost-type contracts.
Contract auditors are critical cogs in the management system.
They write audit reports which are submitted to aid the
contracting officer in making his final determination of
whether particular costs are reasonable and consistent with
applicable law and the contract terms--and therefore permitted
or ``allowable'' under the contract. The key here is that the
contracting officer--not the auditor--makes the final
determination of whether costs are reasonable and allowable
based on the assistance of those auditors and other experts.
Then, after carefully considering all the relevant facts and
circumstances, the contracting officer makes his or her
determination.
My amendment would have provided for quarterly reports to
Congress on the outcomes of the oversight process, requiring a
report to Congress on costs which have been determined by the
contracting officer to be ``unallowable.'' These reports would
have provided an accurate picture of costs actually billed to
the government that the contracting officer determined the
government would not pay under the applicable laws and
regulations.
There is no question there are significant challenges in
ensuring there are adequate controls over cost-type contracts--
and my amendment would have presented the real ``overcharges''
for all to see. It may not make headlines or provide fodder for
websites, but it would have provided a solid basis for
congressional oversight.
Second, I offered an amendment that would have created an
acquisition professional exchange program to permit the
exchange of high-performing acquisition professionals between
the federal government and participating private-sector
concerns. The program would have provided both public and
private sector employees invaluable first-hand experience and
insight to bring back to their respective organizations. The
program contains extensive ethics protections, modeled after my
Digital Tech Corps Act, enacted in 2002, which provided for the
exchange of technology professionals between the private and
public sectors.
We have heard time and time again from the Office of
Federal Procurement Policy (OFPP), from the Government
Accountability Office, from government employee and contractor
organizations, that the lack of properly trained and skilled
acquisition workers is the overriding challenge faced by our
acquisition system today. This program is a common-sense
approach that would provide desperately needed business skills
to our workforce at a minimal cost.
Third, I offered an amendment to strike the provisions of
title III in the bill. The provisions in title III would
broaden the reach and lengthen the duration of current
limitations on post-employment opportunities for our
acquisition workforce as well as limit the ability of
acquisition workers hired by the government from the private
sector to participate in certain acquisition activities. This
Committee voted on these provisions twice before. It marked up
the Executive Branch Reform Act in Committee last year (H.R.
5112) with these exact same provisions and again earlier this
year (H.R. 984).
I supported these provisions in the past, and I have been
criticized roundly for it. I have subsequently heard from trade
associations and government officials alike on the potential
problems that these provisions will cause. Specifically, the
concern is that they will hamper the government's ability to
recruit and retain the brightest personnel in our acquisition
workforce. At a time when we must be looking for ways to retain
qualified acquisition personnel who are at or approaching
retirement age, and, at the same time, must be looking for
effective ways to recruit new, qualified people, we are instead
imposing new restrictions on these federal employees--
restrictions which could have a detrimental impact on the
executive branch's ability to recruit and retain the brightest
personnel for the acquisition workforce.
Our committee has held several oversight hearings on
troubled agency acquisition programs. The witnesses have noted
this very problem themselves. Comptroller General David Walker
testified that we lacked a sufficient number of trained
acquisition workers to manage the critical contracts needed to
support or troops and to rebuild Iraq's infrastructure.
Department of Homeland Security officials testified about
woefully understaffed programs such as SBInet and Deepwater.
DHS IG Richard Skinner said in his testimony that contractors
outnumber Federal employees on the Deepwater program. We all
know the reason: we simply do not have the trained federal
workers to do the job.
We also received a letter from OFPP Administrator Paul
Dennett in which he says, ``The loss of so many individuals
with a deep, ingrained institutional knowledge of their agency
has the potential to cause a lapse or pause of service
delivery.'' He believes the provisions in this bill would
minimize the efforts of his office to improve recruitment,
retention, and expertise of the government-wide acquisition
workforce. Mr. Dennett's letter also notes that the National
Academy of Science claims that the ``laws restricting post-
Government employment have become the biggest disincentive to
public service.'' And, unfortunately, the provisions in this
bill do just that. We are discouraging people from seeking
employment with the federal government at a time when our
acquisition workforce is--to put it nicely--strained. We have
also received a letter from the Office of Government Ethics
(OGE) opposing these provisions. OGE claims that a number of
these provisions overlap with current rules and regulations,
thus creating a confusing web of restrictions under which
federal employees must abide.
While I wholeheartedly support the desire to promote
integrity, transparency, and accountability in government, I
believe these provisions go too far. There are too many good
people working for this government for us to pass restrictive
and onerous provisions based on the misdeeds of a handful of
employees. We need to promote the natural churn of employees
between the public and private sector instead of trying to
stymie it.
After the amendment to strike title III was defeated, I
offered another amendment to this title that would shorten the
two year post-employment restrictions on contracting officers
to one year and permit a waiver of the restriction on the
ability of acquisition workers hired by the government from the
private sector to participate in certain acquisition
activities. The amendment would also shorten the duration of
the activity restriction from two years to one year. This
amendment, which was adopted by voice, will lessen the impact
of these provisions. It goes part of the way towards addressing
my concerns about the negative affect of such restrictions on
our ability to recruit, hire and retain the skilled acquisition
workforce our nation so desperately needs.
Tom Davis.
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