![](media/image1.jpeg){width="6.489583333333333in"
height="1.15625in"}**Legislative
Bulletin...........................................March 15, 2007**

> **Contents:**
>
> **H.R. 1362** --- Accountability in Contracting Act

H.R. 1362 --- Accountability in Contracting Act (*Waxman, D-CA*)

**[Order of Business]{.underline}:** The bill is scheduled for
consideration on Thursday, March 15, 2007, subject to a structured rule
([H.Res.
242](http://www.rules.house.gov/SpecialRules_details.aspx?NewsID=2546)).
The rule adopts an amendment in the nature of a substitute for the bill,
and two amendments, all three of which are summarized below.

**[Summary of the Bill as Reported by the Oversight and Government
Reform Committee]{.underline}:** H.R. 1362 would make various changes to
the allowable length and characteristics of government contracts,
specifically relating to noncompetitive and cost-reimbursement type
contracts, and would increase contract oversight. The specific
provisions of the bill are as follows:

-   Restricts the length of certain federal contracts without
    competition to a maximum of 240 days, unless this limitation is
    waived by the agency head due to "exceptional circumstances" (not
    defined in the bill).

-   Requires agencies that spend more than \$1 billion on federal
    contracts to develop and implement a plan to minimize the use of
    noncompetitive contracts and cost-reimbursement contracts, and
    submit the plan (for each) to Congress and the Comptroller General
    of the General Services Administration (GSA). GSA is directed to
    submit an analysis of each plan to Congress within 18 months.

-   Requires contract justification and approval documentation be posted
    on the relevant agency's website and through the Federal Procurement
    Data System within 14 days of awarding the contract (except
    documentation that is exempt from public disclosure).

-   Requires that a report be submitted to Congress on a quarterly basis
    containing a list of all contractor costs (in excess of \$1 million)
    that are unjustified, unsupported, questioned, or unreasonable under
    any contract, task, or subcontract. This provision also requires
    agencies to provide un-redacted copies of audit reports within 14
    days, upon a request from a chairman or ranking member of certain
    House and Senate committees.

-   Requires the FPP Administrator to conduct a study of the federal
    acquisition workforce and develop a "comprehensive definition of,
    and method of measuring, such workforce."

-   Repeals the existing sunset provision of the Training Fund (operated
    by the GSA Administrator), which currently is set to expire on
    November 24, 2008. The purpose of the Training Fund is to "support
    the training of the acquisition workforce of the executive agencies
    other than the Department of Defense."

-   Expands the current regulation prohibiting former government
    officials from accepting compensation from contractors to also
    include lawyers and lobbyists (in addition to the current
    prohibition on consultants from accepting compensation from
    contractors). In other words, the provision would prohibit, for one
    year after leaving the government, a former government official from
    working as a lobbyist or lawyer for a company that they awarded a
    contract to as a government contracting official. The provision also
    prohibits a federal employee from being substantially involved in
    awarding a contract to that employee's former (private sector)
    employer, for a one-year period and subject to a waiver.

**[Amendment in the Nature of a Substitute]{.underline}:** The amendment
in the nature of a substitute is identical to the text reported by the
Oversight and Government Reform Committee, except for the following:

-   Strikes the section in the reported version (of the Oversight and
    Government Reform Committee) that would have required each agency to
    devote one (1) percent of its procurement budget to hiring and
    training acquisition workforce personnel, contract planning,
    administration and oversight. This change significantly decreases
    the cost of the bill (estimated at \$20 billion over four years with
    this provision included.

-   Adds a provision to section 102 that makes two exceptions to the
    requirement in the bill that sole-source contracts be reduced: 1)
    contracts for disadvantaged minority contractors and service
    disabled veterans (15 U.S.C. 637(a)), and contracts in HUBZones (15
    U.S.C. 657a). Thus, these types of contracts will not be subject to
    the sole-source contract reduction requirements.

> Note: HUBZones are specially tailored contracts (run by the Small
> Business Administration) that are awarded to urban and rural
> communities in which the contractors must hire employees that live
> within the HUBZone, with the intent to stimulate local economic
> development.

[]{.mark}

-   Further expands the restrictions in the underlying bill on
    acquisition personnel to also include senior level personnel who
    "personally and substantially" participate in a decision to award a
    contract.

-   Prohibits those senior level personnel who enter government service
    from the private sector from administering a contract awarded to
    their former employer.

**[Possible Conservative Concerns]{.underline}:** Though conservatives
would generally agree that competitive contracting is preferable to
sole-source contracting, the highly demanding and technical nature and
peculiar needs of government contracts frequently produce only one
suitable bidder. Therefore, this legislation may, in certain
circumstances, make it more difficult to secure a contractor to complete
needed work. The bill would increase current restrictions on sole-source
contracting, and would mandate additional administration procedures and
reports.

**[Amendments]{.underline}:** Below are the summaries of the amendments
made in order under the rule. [Note]{.underline}: Summaries are based on
RSC staff's review of actual amendment text.

**1. Matheson (D-UT).** Requires agencies to notify Congress, 30 days
prior to awarding the contract, if a noncompetitive contract is expected
to be awarded to a foreign-owned company that is based or has a majority
operation in a country known to sponsor terrorist activity, for the
express purpose of providing "Congress time to review the proposed
contract and provide comments to the department or agency."

**2. Castle (R-DE).** Requires the Office of Government Ethics to submit
a report to Congress containing recommendations on requiring government
contractors and federally funded research and development centers that
advise the government to comply with personal financial interest
restrictions, "such as those that apply to federal employees."

**[Committee Action]{.underline}:** H.R. 1362 was introduced on March 6,
2007, and referred to the Committee on Oversight and Government Reform
and the Committee on Armed Services. The Oversight and Government Reform
Committee marked-up the bill on March 8 and ordered it reported to the
full House by voice vote (House Report
[110-47](http://www.congress.gov/cgi-lis/cpquery/R?cp110:FLD010:@1(hr047):),
Part I). On March 13, the Armed Services Committee marked up the bill
and ordered it reported to the full House by a vote of 53-0.

**[Administration Policy]{.underline}:** The Administration strongly
opposes passage of H.R. 1362 and released a Statement of Administration
Policy (SAP) on March 14, 2007, which included the following statement:

> The Administration strongly opposes H.R. 1362, which would impose a
> new statutory ban on how the government uses acquisition personnel and
> would restrict the Executive Branch's ability to determine the
> appropriate funding for acquisition workforce functions. Other
> provisions would impose burdensome statutory requirements that overlap
> with more efficient administrative efforts to strengthen the use of
> competition and reduce fraud, waste, and abuse.

**[Cost to Taxpayers]{.underline}:** CBO estimates that implementing
H.R. 1362 cost less than \$10 million annually. CBO also noted that
"certain provisions contained in the bill could increase the costs to
administer contracts, but also could result in the use of contractual
arrangements that might lower costs to the government. CBO has no basis
for estimating the net impact on the budget of those provisions. Such
impacts would primarily affect discretionary spending, although small

changes in mandatory spending could occur."

**[Cost to Taxpayers]{.underline}:** CBO estimates that H.R. 1362 would
authorize appropriations of about \$10 million a year.

**[Does the Bill Expand the Size and Scope of the Federal
Government?]{.underline}:** As noted above, the bill places additional
restrictions and requirements on federal agencies regarding the issuance
of certain federal contracts. The bill also places additional
limitations on former government employees from receiving compensation
from federal contractors for a one-year period after leaving the
government.

**[Does the Bill Contain Any New State-Government, Local-Government, or
Private-Sector Mandates?]{.underline}:** No.

**[Constitutional Authority]{.underline}:** The Oversight and Government
Reform Committee, in House Report
[110-42](http://www.congress.gov/cgi-lis/cpquery/R?cp110:FLD010:@1(hr042):)
Part I, cites constitutional authority in Article I, Section 8, Clause
18 (to make all laws necessary and proper to carry out the *foregoing*
powers), but fails to cite a foregoing power or another specific
enumerated clause.

The Armed Services Committee, in House Report
[110-42](http://www.congress.gov/cgi-lis/cpquery/R?cp110:FLD010:@1(hr042):)
Part II, cites constitutional authority in Article I, Section 8, but
fails to cite a specific clause.

House Rule XIII, Section 3(d)(1), requires that all committee reports
contain "a statement citing the *specific* powers granted to Congress in
the Constitution to enact the law proposed by the bill or joint
resolution." *\[emphasis added\]*

**[RSC Staff Contact]{.underline}:** Derek V. Baker;
[derek.baker@mail.house.gov](mailto:Derek.baker@mail.house.gov);
202-226-8585

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