Fairness in Federal Purchases Act of 1993

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fairness in Federal Purchases Act of 
1993''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress makes the following findings:
            (1) The Congress had high expectations for commercial 
        benefits from the Government Procurement Code (in this section 
        referred to as the ``Code'') enacted as part of the Trade 
        Agreements Act of 1979, with a potential opening of 
        $20,000,000,000 to $25,000,000,000 in trade opportunities for 
        United States export sales to foreign government procurement 
        entities.
            (2) According to the Comptroller General of the United 
        States, in each year since implementation of the Code on 
        January 1, 1981, the United States has spent approximately 
        $18,000,000,000 in foreign source procurement while in each 
        such year United States suppliers took in only $4,000,000,000 
        from sales to overseas governments, for a total imbalance in 
        each such year of an estimated $14,000,000,000.
            (3) Federal Government agencies have confirmed that--
                    (A) the Code has had less overall commercial value 
                than originally anticipated; and
                    (B) of the markets opened, the benefits were 
                disproportionately in favor of foreign suppliers.
            (4) The Congress has concerns about--
                    (A) inadequate monitoring of foreign government 
                compliance with the Code;
                    (B) inadequate efforts to enforce the rights of the 
                United States;
                    (C) the lack of United States Government assistance 
                to firms wishing to take advantage of opened markets; 
                and
                    (D) the continued lack of progress to open foreign 
                markets.
            (5) The United States economy over the past months has been 
        in a condition of relative instability, with negative growth 
        resulting in lost jobs and lost sales for both small and large 
        businesses.
            (6) After 13 years of limited opportunities for United 
        States companies overseas under the Code, the time has come to 
        address the matter of imbalance with respect to the government 
        procurement practices of the United States' trading partners 
        and to refocus United States Federal procurement policy during 
        this period of economic adjustment, in order to enhance 
        opportunities for small businesses and areas of high 
        unemployment.
            (7) The use of United States Federal procurement dollars to 
        assist small businesses and preserve the jobs of workers who 
        traditionally have the fewest resources to withstand economic 
        recession is a sound practice and policy for the Government.
            (8) The policy established by this Act will serve to reduce 
        the imbalance in government purchases and thereby put domestic 
        companies on an equitable basis and help alleviate the United 
        States balance of payments problem.
    (b) Purpose.--The purpose of this Act is to promote fairness in 
Federal procurement by creating greater access to Federal procurement 
funds for small businesses and areas of high unemployment during 
economic downturns.

SEC. 3. REQUIREMENT THAT FEDERAL AGENCIES INCREASE DOMESTIC PROCUREMENT 
              AND PROCUREMENT FROM SMALL-BUSINESS CONCERNS DURING 
              ECONOMIC RECESSIONS.

    (a) In General.--Title III of the Act of March 3, 1933, commonly 
known as the Buy American Act (41 U.S.C. 10a-10c), is amended--
            (1) by redesignating sections 5 and 6 as sections 6 and 7, 
        respectively; and
            (2) by inserting after section 4 the following new section:

``SEC. 5. REQUIREMENT THAT FEDERAL AGENCIES INCREASE DOMESTIC 
              PROCUREMENT AND PROCUREMENT FROM SMALL-BUSINESS CONCERNS 
              DURING ECONOMIC RECESSIONS.

    ``(a) General Requirement.--(1) Subject to paragraph (2), upon the 
1st occurrence after the date of the enactment of the Fairness in 
Federal Purchases Act of 1993 of the notification described in 
subsection (b)(1), the following requirements shall take effect:
            ``(A) Each head of a Federal agency shall determine the 
        amount of any difference between--
                    ``(i) the amount such agency spent on procurement 
                of goods and services from foreign government sources 
                during the preceding fiscal year; and
                    ``(ii) the amount such foreign governments spent on 
                procurement of similar goods and services from domestic 
                sources during the preceding fiscal year, and
        if the amount described in clause (i) exceeds the amount 
        described in clause (ii), shall decrease the amount such agency 
        spends on procurement from foreign government sources and 
        increase the amount such agency spends on procurement from 
        domestic sources in order to eliminate the disparity between 
        the amount spent on procurement from foreign government sources 
        and the amount spent on procurement from domestic sources.
            ``(B) Each head of a Federal agency shall determine whether 
        the amount such agency spent on procurement of goods and 
        services from small-business concerns during the preceding 
        fiscal year was less than 35 percent of the total amount such 
        agency spent on procurement of goods and services, and if 
        necessary, shall increase the amount such agency spends on 
        procurement of goods and services from small-business concerns 
        so that such amount equals or exceeds 35 percent of such total 
        amount.
            ``(C) In the case of any procurement contract, the offered 
        price of a domestic end product shall be considered 
        unreasonable only if the lowest acceptable domestic offer 
        exceeds the lowest acceptable foreign offer, inclusive of 
        duty--
                    ``(i) by more than 6 percent, in the case of a 
                domestic offer from a large business that is not a 
                labor surplus area concern; or
                    ``(ii) by more than 15 percent, in the case of a 
                domestic offer from a small-business concern or from a 
                labor surplus area concern.
    ``(2)(A) Except as provided in subparagraph (B), the requirements 
of paragraph (1) shall cease to apply upon the expiration of the 36-
month period beginning on the date that the notification described in 
subsection (b)(1) occurs.
    ``(B) The requirements of paragraph (1) shall cease to apply upon 
the expiration of any of the following periods if during such period 
both the notifications described in subsection (b)(2) occur:
            ``(i) The 18-month period beginning on the date that the 
        publication described in subsection (b)(1) occurs.
            ``(ii) The 6-month period following the 18-month period 
        described in clause (i).
            ``(iii) The 6-month period following the 6-month period 
        described in clause (ii).
    ``(3) The Administrator for Federal Procurement Policy shall 
provide to each head of a Federal agency the information necessary to 
carry out paragraphs (1) and (2).
    ``(b) Notification.--(1) The notification described in this 
paragraph is either--
            ``(A) the publication in the Federal Register by the 
        Secretary of Labor of an unemployment rate equal to or in 
        excess of 5 percent for the preceding fiscal year quarter; or
            ``(B) the publication in the Federal Register by the 
        Secretary of Commerce of a decline in the gross national 
        product during such fiscal year quarter.
    ``(2) The notifications described in this paragraph are--
            ``(A) the publication in the Federal Register by the 
        Secretary of Labor of an unemployment rate of less than 5 
        percent for the preceding fiscal year quarter; and
            ``(B) the publication in the Federal Register by the 
        Secretary of Commerce of a stable or increasing gross national 
        product during 2 consecutive fiscal year quarters.
    ``(c) Definitions.--For purposes of this section:
            ``(1) The term `domestic end product' means--
                    ``(A) an unmanufactured end product mined or 
                produced in the United States; or
                    ``(B) an end product manufactured in the United 
                States, if the cost of its components mined, produced, 
                or manufactured in the United States exceeds 50 percent 
                of the cost of all its components, including 
                transportation costs to the place of incorporation into 
                the end product and any applicable duty (whether or not 
                a duty-free entry certificate is issued).
            ``(2) The term `domestic offer' means an offered price for 
        a domestic end product, including transportation to 
        destination.
            ``(3) The term `foreign end product' means an end product 
        other than a domestic end product.
            ``(4) The term `foreign government source' means entities 
        comparable to United States Government agencies covered by the 
        Government Procurement Code.
            ``(5) The term `foreign offer' means an offered price for a 
        foreign end product, including transportation to destination 
        and duty, whether or not a duty-free entry certificate is 
        issued.
            ``(6) The term `Government Procurement Code' means title 
        III of the Act of March 3, 1933, commonly known as the Buy 
        American Act.
            ``(7) The term `labor surplus area' means a geographical 
        area identified by the Secretary of Labor as an area of 
        concentrated unemployment or underemployment or an area of 
        labor surplus.
            ``(8) The term `labor surplus area concern' means a concern 
        that together with its 1st-tier subcontractors will perform 
        substantially in labor surplus areas. Performance is 
        substantially in labor surplus areas if the costs incurred 
        under the contract on account of manufacturing, production, or 
        performance of appropriate services in labor surplus areas 
        exceed 50 percent of the contract price.
            ``(9) The term `small-business concern' has the meaning 
        provided in section 3(a)(1) of the Small Business Act.''.
    (b) Conforming Amendment to the Trade Agreements Act of 1979.--
Subsection (a) of section 301 of the Trade Agreements Act of 1979 (19 
U.S.C. 2511(a)) is amended by inserting after ``or practice'' the 
following: ``(excluding section 5 of title III of the Act of March 3, 
1933, commonly known as the Buy American Act)''.

Summary: Fairness in Federal Purchases Act of 1993 - Amends the Buy American Act to require Federal agency heads, upon notification in the Federal Register that the unemployment rate was five percent or higher or that the gross national product (GNP) declined during the preceding fiscal quarter, to determine whether: (1) the amount the agency spent on foreign government goods and services exceeded the amount such foreign governments spent on similar domestic goods and services during the preceding fiscal year and, if so, adjust spending on procurement from domestic versus foreign sources to eliminate any imbalance. And (2) less than 35 percent of the agency procurement spending went to small businesses and, if so, increase small business procurement spending to equal or exceed that amount. Provides that the lowest acceptable domestic product prices shall be considered unreasonable if they exceed the lowest acceptable foreign prices by more than specified amounts. Terminates such spending requirements after: (1) three years. Or (2) specified shorter periods following publication of an unemployment rate of less than five percent for the preceding quarter or of a stable or increasing GNP for two consecutive quarters.