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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1837 Introduced in House (IH)]

108th CONGRESS
  1st Session
                                H. R. 1837

 To improve the Federal acquisition workforce and the process for the 
   acquisition of services by the Federal Government, and for other 
                               purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 29, 2003

 Mr. Tom Davis of Virginia (for himself and Mr. Hunter) introduced the 
   following bill; which was referred to the Committee on Government 
   Reform, and in addition to the Committee on Armed Services, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL

 
 To improve the Federal acquisition workforce and the process for the 
   acquisition of services by the Federal Government, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Services 
Acquisition Reform Act of 2003''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Executive agency defined.
              TITLE I--ACQUISITION WORKFORCE AND TRAINING

Sec. 101. Definition of acquisition.
Sec. 102. Acquisition workforce training fund.
Sec. 103. Government-industry exchange program.
Sec. 104. Acquisition workforce recruitment and retention program.
Sec. 105. Architectural and engineering acquisition workforce.
         TITLE II--ADAPTATION OF BUSINESS ACQUISITION PRACTICES

        Subtitle A--Adaptation of Business Management Practices

Sec. 201. Chief Acquisition Officers.
Sec. 202. Chief Acquisition Officers Council.
Sec. 203. Statutory and regulatory review.
               Subtitle B--Other Acquisition Improvements

Sec. 211. Ensuring efficient payment.
Sec. 212. Extension of authority to carry out franchise fund programs.
Sec. 213. Agency acquisition protests.
Sec. 214. Improvements in contracting for architectural and engineering 
                            services.
Sec. 215. Authorization of telecommuting for Federal contractors.
                     TITLE III--CONTRACT INCENTIVES

Sec. 301. Share-in-savings initiatives.
Sec. 302. Incentives for contract efficiency.
               TITLE IV--ACQUISITIONS OF COMMERCIAL ITEMS

Sec. 401. Preference for performance-based contracting.
Sec. 402. Authorization of additional commercial contract types.
Sec. 403. Clarification of commercial services definition.
Sec. 404. Designation of commercial business entities.
                         TITLE V--OTHER MATTERS

Sec. 501. Authority to enter into certain procurement-related 
                            transactions and to carry out certain 
                            prototype projects.
Sec. 502. Amendments relating to Federal emergency procurement 
                            flexibility.
Sec. 503. Authority to make inflation adjustments to simplified 
                            acquisition threshold.
Sec. 504. Technical corrections related to duplicative amendments.

SEC. 2. EXECUTIVE AGENCY DEFINED.

    In this Act, the term ``executive agency'' has the meaning given 
that term in section 4(1) of the Office of Federal Procurement Policy 
Act (41 U.S.C. 403(1)), unless specifically stated otherwise.

              TITLE I--ACQUISITION WORKFORCE AND TRAINING

SEC. 101. DEFINITION OF ACQUISITION.

    Section 4 of the Office of Federal Procurement Policy Act (41 
U.S.C. 403) is amended by adding at the end the following:
            ``(16) The term `acquisition'--
                    ``(A) means the process of acquiring, with 
                appropriated funds, by contract for purchase or lease, 
                property or services (including construction) that 
                support the missions and goals of an executive agency, 
                from the point at which the requirements of the 
                executive agency are established in consultation with 
                the chief acquisition officer of the executive agency; 
                and
                    ``(B) includes--
                            ``(i) the process of acquiring property or 
                        services that are already in existence, or that 
                        must be created, developed, demonstrated, and 
                        evaluated;
                            ``(ii) the description of requirements to 
                        satisfy agency needs;
                            ``(iii) solicitation and selection of 
                        sources;
                            ``(iv) award of contracts;
                            ``(v) contract performance;
                            ``(vi) contract financing:
                            ``(vii) management and measurement of 
                        contract performance through final delivery and 
                        payment; and
                            ``(viii) technical and management functions 
                        directly related to the process of fulfilling 
                        agency requirements by contract.''.

SEC. 102. ACQUISITION WORKFORCE TRAINING FUND.

    (a) Purposes.--The purposes of this section are to ensure that the 
Federal acquisition workforce--
            (1) adapts to fundamental changes in the nature of Federal 
        Government acquisition of property and services associated with 
        the changing roles of the Federal Government; and
            (2) acquires new skills and a new perspective to enable it 
        to contribute effectively in the changing environment of the 
        21st century.
    (b) Establishment of Fund.--Section 37 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 433) is amended by adding at the end 
of subsection (h) the following new paragraph:
            ``(3) Acquisition workforce training fund.--(A) The 
        Administrator of General Services shall establish an 
        acquisition workforce training fund. The Administrator shall 
        manage the fund through the Federal Acquisition Institute to 
        support the training of the acquisition workforce of the 
        executive agencies other than the Department of Defense. The 
        Administrator shall consult with the Administrator for Federal 
        Procurement Policy in managing the fund.
            ``(B) There shall be credited to the acquisition workforce 
        training fund 5 percent of the fees collected by executive 
        agencies under the following contracts:
                    ``(i) Governmentwide task and delivery-order 
                contracts entered into under sections 2304a and 2304b 
                of title 10, United States Code, or sections 303H and 
                303I of the Federal Property and Administrative 
                Services Act of 1949 (41 U.S.C. 253h and 253i).
                    ``(ii) Governmentwide contracts for the acquisition 
                of information technology as defined in section 11101 
                of title 40, United States Code, and multiagency 
                acquisition contracts for such technology authorized by 
                section 11314 of such title.
                    ``(iii) Multiple-award schedule contracts entered 
                into by the Administrator of General Services.
            ``(C) The head of an executive agency that administers a 
        contract described in subparagraph (B) shall remit to the 
        General Services Administration the amount required to be 
        credited to the fund with respect to such contract at the end 
        of each quarter of the fiscal year.
            ``(D) The Administrator of General Services, through the 
        Office of Federal Acquisition Policy, shall ensure that funds 
        collected for training under this section are not used for any 
        purpose other than the purpose specified in subparagraph (A).
            ``(E) Amounts credited to the fund shall be in addition to 
        funds requested and appropriated for education and training 
        referred to in paragraph (1).
            ``(F) Amounts credited to the fund shall remain available 
        until expended.''.

SEC. 103. GOVERNMENT-INDUSTRY EXCHANGE PROGRAM.

    (a) In General.--Subpart B of part III of title 5, United States 
Code, is amended by adding at the end the following:

        ``CHAPTER 38--ACQUISITION PROFESSIONAL EXCHANGE PROGRAM

``Sec.
``3801. Definitions.
``3802. General provisions.
``3803. Assignment of employees to private sector organizations.
``3804. Assignment of employees from private sector organizations.
``3805. Reporting requirement.
``3806. Regulations.
``Sec. 3801. Definitions
    ``For purposes of this chapter--
            ``(1) the term `agency'--
                    ``(A) subject to subparagraph (B), means an 
                executive agency; and
                    ``(B) does not include--
                            ``(i) the General Accounting Office;
                            ``(ii) an Office of Inspector General of an 
                        establishment or a designated Federal entity 
                        established under the Inspector General Act of 
                        1978; and
                            ``(iii) the Defense Contract Audit Agency 
                        referred to in section 2313(b) of title 10; and
            ``(2) the term `detail' means--
                    ``(A) the assignment or loan of an employee of an 
                agency to a private sector organization without a 
                change of position from the agency that employs the 
                individual, or
                    ``(B) the assignment or loan of an employee of a 
                private sector organization to an agency without a 
                change of position from the private sector organization 
                that employs the individual,
        whichever is appropriate in the context in which such term is 
        used.
``Sec. 3802. General provisions
    ``(a) Assignment Authority.--On request from or with the agreement 
of a private sector organization, and with the consent of the employee 
concerned, the head of an agency may arrange for the assignment of an 
employee of the agency to a private sector organization or an employee 
of a private sector organization to the agency. An eligible employee is 
an individual who--
            ``(1) works in the field of Federal acquisition or 
        acquisition management;
            ``(2) is considered an exceptional performer by the 
        individual's current employer; and
            ``(3) is expected to assume increased acquisition 
        management responsibilities in the future.
An employee of an agency shall be eligible to participate in this 
program only if the employee is employed at the GS-11 level or above 
(or equivalent) and is serving under a career or career-conditional 
appointment or an appointment of equivalent tenure in the excepted 
service.
    ``(b) Agreements.--Each agency that exercises its authority under 
this chapter shall provide for a written agreement between the agency 
and the employee concerned regarding the terms and conditions of the 
employee's assignment. In the case of an employee of the agency, the 
agreement shall--
            ``(1) require the employee to serve in the civil service, 
        upon completion of the assignment, for a period equal to the 
        length of the assignment; and
            ``(2) provide that, in the event the employee fails to 
        carry out the agreement (except for good and sufficient reason, 
        as determined by the head of the agency from which assigned) 
        the employee shall be liable to the United States for payment 
        of all expenses of the assignment.
An amount under paragraph (2) shall be treated as a debt due the United 
States.
    ``(c) Termination.--Assignments may be terminated by the agency or 
private sector organization concerned for any reason at any time.
    ``(d) Duration.--Assignments under this chapter shall be for a 
period of between 6 months and 1 year, and may be extended in 3-month 
increments for a total of not more than 1 additional year, except that 
no assignment under this chapter may commence after the end of the 5-
year period beginning on the date of the enactment of this chapter.
    ``(e) Assistance.--The Administrator for Federal Procurement 
Policy, by agreement with the Office of Personnel Management, may 
assist in the administration of this chapter, including by maintaining 
lists of potential candidates for assignment under this chapter, 
establishing mentoring relationships for the benefit of individuals who 
are given assignments under this chapter, and publicizing the program.
    ``(f) Considerations.--In exercising any authority under this 
chapter, an agency shall take into consideration--
            ``(1) the need to ensure that small business concerns are 
        appropriately represented with respect to the assignments 
        described in sections 3803 and 3804, respectively; and
            ``(2) how assignments described in section 3803 might best 
        be used to help meet the needs of the agency for the training 
        of employees in acquisition management.
``Sec. 3803. Assignment of employees to private sector organizations
    ``(a) In General.--An employee of an agency assigned to a private 
sector organization under this chapter is deemed, during the period of 
the assignment, to be on detail to a regular work assignment in his 
agency.
    ``(b) Coordination With Chapter 81.--Notwithstanding any other 
provision of law, an employee of an agency assigned to a private sector 
organization under this chapter is entitled to retain coverage, rights, 
and benefits under subchapter I of chapter 81, and employment during 
the assignment is deemed employment by the United States, except that, 
if the employee or the employee's dependents receive from the private 
sector organization any payment under an insurance policy for which the 
premium is wholly paid by the private sector organization, or other 
benefit of any kind on account of the same injury or death, then, the 
amount of such payment or benefit shall be credited against any 
compensation otherwise payable under subchapter I of chapter 81.
    ``(c) Reimbursements.--The assignment of an employee to a private 
sector organization under this chapter may be made with or without 
reimbursement by the private sector organization for the travel and 
transportation expenses to or from the place of assignment, subject to 
the same terms and conditions as apply with respect to an employee of a 
Federal agency or a State or local government under section 3375, and 
for the pay, or a part thereof, of the employee during assignment. Any 
reimbursements shall be credited to the appropriation of the agency 
used for paying the travel and transportation expenses or pay.
    ``(d) Tort Liability; Supervision.--The Federal Tort Claims Act and 
any other Federal tort liability statute apply to an employee of an 
agency assigned to a private sector organization under this chapter. 
The supervision of the duties of an employee of an agency so assigned 
to a private sector organization may be governed by an agreement 
between the agency and the organization.
    ``(e) Small Business Concerns.--
            ``(1) In general.--The head of each agency shall take such 
        actions as may be necessary to ensure that, of the assignments 
        made under this chapter from such agency to private sector 
        organizations in each year, at least 20 percent are to small 
        business concerns.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) the term `small business concern' means a 
                business concern that satisfies the definitions and 
                standards specified by the Administrator of the Small 
                Business Administration under section 3(a)(2) of the 
                Small Business Act (as from time to time amended by the 
                Administrator);
                    ``(B) the term `year' refers to the 12-month period 
                beginning on the date of the enactment of this chapter, 
                and each succeeding 12-month period in which any 
                assignments under this chapter may be made; and
                    ``(C) the assignments `made' in a year are those 
                commencing in such year.
            ``(3) Reporting requirement.--An agency which fails to 
        comply with paragraph (1) in a year shall, within 90 days after 
        the end of such year, submit a report to the Committees on 
        Government Reform and Small Business of the House of 
        Representatives and the Committees on Governmental Affairs and 
        Small Business of the Senate. The report shall include--
                    ``(A) the total number of assignments made under 
                this chapter from such agency to private sector 
                organizations in the year;
                    ``(B) of that total number, the number (and 
                percentage) made to small business concerns; and
                    ``(C) the reasons for the agency's noncompliance 
                with paragraph (1).
            ``(4) Exclusion.--This subsection shall not apply to an 
        agency in any year in which it makes fewer than 5 assignments 
        under this chapter to private sector organizations.
``Sec. 3804. Assignment of employees from private sector organizations
    ``(a) In General.--An employee of a private sector organization 
assigned to an agency under this chapter is deemed, during the period 
of the assignment, to be on detail to such agency.
    ``(b) Terms and Conditions.--An employee of a private sector 
organization assigned to an agency under this chapter--
            ``(1) may continue to receive pay and benefits from the 
        private sector organization from which he is assigned;
            ``(2) is deemed, notwithstanding subsection (a), to be an 
        employee of the agency for the purposes of--
                    ``(A) chapter 73;
                    ``(B) sections 201, 203, 205, 207, 208, 209, 603, 
                606, 607, 643, 654, 1905, and 1913 of title 18;
                    ``(C) sections 1343, 1344, and 1349(b) of title 31;
                    ``(D) the Federal Tort Claims Act and any other 
                Federal tort liability statute;
                    ``(E) the Ethics in Government Act of 1978;
                    ``(F) section 1043 of the Internal Revenue Code of 
                1986; and
                    ``(G) section 27 of the Office of Federal 
                Procurement Policy Act;
            ``(3) may not have access to any trade secrets or to any 
        other nonpublic information which is of commercial value to the 
        private sector organization from which he is assigned; and
            ``(4) is subject to such regulations as the President may 
        prescribe.
The supervision of an employee of a private sector organization 
assigned to an agency under this chapter may be governed by agreement 
between the agency and the private sector organization concerned. Such 
an assignment may be made with or without reimbursement by the agency 
for the pay, or a part thereof, of the employee during the period of 
assignment, or for any contribution of the private sector organization 
to employee benefit systems.
    ``(c) Coordination With Chapter 81.--An employee of a private 
sector organization assigned to an agency under this chapter who 
suffers disability or dies as a result of personal injury sustained 
while performing duties during the assignment shall be treated, for the 
purpose of subchapter I of chapter 81, as an employee as defined by 
section 8101 who had sustained the injury in the performance of duty, 
except that, if the employee or the employee's dependents receive from 
the private sector organization any payment under an insurance policy 
for which the premium is wholly paid by the private sector 
organization, or other benefit of any kind on account of the same 
injury or death, then, the amount of such payment or benefit shall be 
credited against any compensation otherwise payable under subchapter I 
of chapter 81.
    ``(d) Prohibition Against Charging Certain Costs to the Federal 
Government.--A private sector organization may not charge the Federal 
Government, as direct or indirect costs under a Federal contract, the 
costs of pay or benefits paid by the organization to an employee 
assigned to an agency under this chapter for the period of the 
assignment.
``Sec. 3805. Reporting requirement
    ``(a) In General.--The Office of Personnel Management shall, not 
later than April 30 and October 31 of each year, prepare and submit to 
the Committee on Government Reform of the House of Representatives and 
the Committee on Governmental Affairs of the Senate a semiannual report 
summarizing the operation of this chapter during the immediately 
preceding 6-month period ending on March 31 and September 30, 
respectively.
    ``(b) Content.--Each report shall include, with respect to the 6-
month period to which such report relates--
            ``(1) the total number of individuals assigned to, and the 
        total number of individuals assigned from, each agency during 
        such period;
            ``(2) a brief description of each assignment included under 
        paragraph (1), including--
                    ``(A) the name of the assigned individual, as well 
                as the private sector organization and the agency 
                (including the specific bureau or other agency 
                component) to or from which such individual was 
                assigned;
                    ``(B) the respective positions to and from which 
                the individual was assigned, including the duties and 
                responsibilities and the pay grade or level associated 
                with each; and
                    ``(C) the duration and objectives of the 
                individual's assignment; and
            ``(3) such other information as the Office considers 
        appropriate.
    ``(c) Publication.--A copy of each report submitted under 
subsection (a)--
            ``(1) shall be published in the Federal Register; and
            ``(2) shall be made publicly available on the Internet.
    ``(d) Agency Cooperation.--On request of the Office, agencies shall 
furnish such information and reports as the Office may require in order 
to carry out this section.
``Sec. 3806. Regulations
    ``The Director of the Office of Personnel Management shall 
prescribe regulations for the administration of this chapter.''.
    (b) Report.--Not later than 4 years after the date of the enactment 
of this Act, the General Accounting Office shall prepare and submit to 
the Committee on Government Reform of the House of Representatives and 
the Committee on Governmental Affairs of the Senate a report on the 
operation of chapter 38 of title 5, United States Code (as added by 
this section). Such report shall include--
            (1) an evaluation of the effectiveness of the program 
        established by such chapter; and
            (2) a recommendation as to whether such program should be 
        continued (with or without modification) or allowed to lapse.
    (c) Clerical Amendment.--The table of contents at the beginning of 
part III of title 5, United States Code, is amended by inserting after 
the item relating to chapter 37 the following:

``38. Acquisition Professional Exchange Program.............    3801''.
    (d) Ethics Provisions.--
            (1) One-year restriction on certain communications.--
        Section 207(c)(2)(A)(v) of title 18, United States Code, is 
        amended by inserting ``or 38'' after ``chapter 37''.
            (2) Disclosure of confidential information.--Section 1905 
        of title 18, United States Code, is amended by inserting ``or 
        38'' after ``chapter 37''.
            (3) Contract advice.--Section 207(l) of title 18, United 
        States Code, is amended--
                    (A) in the subsection heading, by striking 
                ``Details.--'' and inserting ``Detailees.--''; and
                    (B) by inserting ``or 38'' after ``chapter 37''.
            (4) Restriction on disclosure of procurement information.--
        Section 27 of the Office of Federal Procurement Policy Act (41 
        U.S.C. 423) is amended in the last sentence of subsection 
        (a)(1) by inserting ``or 38'' after ``chapter 37''.
    (e) Technical and Conforming Amendments.--
            (1) Amendments to Title 5, United States Code.--Title 5, 
        United States Code, is amended--
            (A) in section 3111(d), by inserting ``or 38'' after 
        ``chapter 37'';
            (B) in section 7353(b)(4), by inserting ``or 38'' after 
        ``chapter 37''.
            (2) Amendment to title 18, united states code.--Section 
        209(g) of title 18, United States Code, is amended--
            (A) in paragraph (1), by inserting ``or 38'' after 
        ``chapter 37''; and
            (B) by amending paragraph (2) to read as follows:
    ``(2) For purposes of this subsection, the term `agency'--
            ``(A) with respect to assignments under chapter 37 of title 
        5, means an agency (as defined in section 3701 of title 5) and 
        the Office of the Chief Technology Officer of the District of 
        Columbia; and
            ``(B) with respect to assignments under chapter 38 of title 
        5, means an agency (as defined by section 3801 of title 5).''.
            (3) Eligibility for thrift savings plan.--Section 
        125(c)(1)(D) of Public Law 100-238 (101 Stat. 1757; 5 U.S.C. 
        8432 note) is amended by inserting ``or 38'' after ``chapter 
        37''.

SEC. 104. ACQUISITION WORKFORCE RECRUITMENT AND RETENTION PROGRAM.

    (a) Authority To Carry Out Program.--For purposes of sections 3304, 
5333, and 5753 of title 5, United States Code, the head of a department 
or agency of the United States (including the Secretary of Defense) may 
determine that certain Federal acquisition positions are ``shortage 
category'' positions in order to recruit and appoint directly to 
positions of employment in the department or agency highly qualified 
persons, such as any person who--
            (1) holds a bachelor's degree from an accredited 
        institution of higher education;
            (2) holds, from an accredited law school or an accredited 
        institution of higher education--
                    (A) a law degree; or
                    (B) a masters or equivalent degree in business 
                administration, public administration, or systems 
                engineering; or
            (3) has significant experience with commercial acquisition 
        practices, terms, and conditions.
    (b) Requirements.--The exercise of authority to take a personnel 
action under this section shall be subject to policies prescribed by 
the Office of Personnel Management that govern direct recruitment, 
including policies requiring appointment of a preference eligible who 
satisfies the qualification requirements.
    (c) Termination of Authority.--The head of a department or agency 
may not appoint a person to a position of employment under this section 
after September 30, 2007.
    (d) Report.--Not later than March 31, 2007, the Administrator for 
Federal Procurement Policy shall submit to Congress a report on the 
implementation of this section. The report shall include--
            (1) the Administrator's assessment of the efficacy of the 
        exercise of the authority provided in this section in 
        attracting employees with unusually high qualifications to the 
        acquisition workforce; and
            (2) any recommendations considered appropriate by the 
        Administrator on whether the authority to carry out the program 
        should be extended.

SEC. 105. ARCHITECTURAL AND ENGINEERING ACQUISITION WORKFORCE.

    The Administrator for Federal Procurement Policy, in consultation 
with the Secretary of Defense, the Administrator of General Services, 
and the Director of the Office of Personnel Management, shall develop 
and implement a plan to ensure that the Federal Government maintains 
the necessary capability with respect to the acquisition of 
architectural and engineering services to--
            (1) ensure that Federal Government employees have the 
        expertise to determine agency requirements for such services;
            (2) establish priorities and programs (including 
        acquisition plans);
            (3) establish professional standards;
            (4) develop scopes of work; and
            (5) award and administer contracts for such services.

         TITLE II--ADAPTATION OF BUSINESS ACQUISITION PRACTICES

        Subtitle A--Adaptation of Business Management Practices

SEC. 201. CHIEF ACQUISITION OFFICERS.

    (a) Appointment of Chief Acquisition Officers.--(1) Section 16 of 
the Office of Federal Procurement Policy Act (41 U.S.C. 414) is amended 
to read as follows:

``SEC. 16. AGENCY CHIEF ACQUISITION OFFICERS.

    ``(a) Establishment of Agency Chief Acquisition Officers.--The head 
of each executive agency (other than the Department of Defense) shall 
appoint or designate a non-career employee as Chief Acquisition Officer 
for the agency, who shall--
            ``(1) have acquisition management as that official's 
        primary duty; and
            ``(2) advise and assist the head of the executive agency 
        and other agency officials to ensure that the mission of the 
        executive agency is achieved through the management of the 
        agency's acquisition activities.
    ``(b) Authority and Functions of Agency Chief Acquisition 
Officers.--The functions of each Chief Acquisition Officer shall 
include--
            ``(1) monitoring the performance of acquisition activities 
        and acquisition programs of the executive agency, evaluating 
        the performance of those programs on the basis of applicable 
        performance measurements, and advising the head of the 
        executive agency regarding the appropriate business strategy to 
        achieve the mission of the executive agency;
            ``(2) increasing the use of full and open competition in 
        the acquisition of property and services by the executive 
        agency by establishing policies, procedures, and practices that 
        ensure that the executive agency receives a sufficient number 
        of sealed bids or competitive proposals from responsible 
        sources to fulfill the Government's requirements (including 
        performance and delivery schedules) at the best value 
        considering the nature of the property or service procured;
            ``(3) making acquisition decisions consistent with all 
        applicable laws and establishing clear lines of authority, 
        accountability, and responsibility for acquisition 
        decisionmaking within the executive agency;
            ``(4) managing the direction of acquisition policy for the 
        executive agency, including implementation of the unique 
        acquisition policies, regulations, and standards of the 
        executive agency;
            ``(5) developing and maintaining an acquisition career 
        management program in the executive agency to ensure that there 
        is an adequate professional workforce; and
            ``(6) as part of the strategic planning and performance 
        evaluation process required under section 306 of title 5, 
        United States Code, and sections 1105(a)(28), 1115, 1116, and 
        9703 of title 31, United States Code--
                    ``(A) assessing the requirements established for 
                agency personnel regarding knowledge and skill in 
                acquisition resources management and the adequacy of 
                such requirements for facilitating the achievement of 
                the performance goals established for acquisition 
                management;
                    ``(B) in order to rectify any deficiency in meeting 
                such requirements, developing strategies and specific 
                plans for hiring, training, and professional 
                development; and
                    ``(C) reporting to the head of the executive agency 
                on the progress made in improving acquisition 
                management capability.''.
    (2) The item relating to section 16 in the table of contents in 
section 1(b) of such Act is amended to read as follows:

``Sec. 16. Chief Acquisition Officers.''.
    (b) References to Senior Procurement Executive.--(1) The Office of 
Federal Procurement Policy Act (41 U.S.C. 403 et seq.), title III of 
the Federal Property and Administrative Services Act of 1949, and title 
10, United States Code, are each amended by striking ``senior 
procurement executive'' and ``senior procurement executives'' each 
place such terms appear and inserting ``Chief Acquisition Officer'' and 
``Chief Acquisition Officers'', respectively.
    (2) Any reference to a senior procurement executive of a department 
or agency of the United States in any other provision of law or 
regulation, document, or record of the United States shall be deemed to 
be a reference to the Chief Acquisition Officer of the department or 
agency.
    (c) Technical Correction.--Section 1115(a) of title 31, United 
States Code, is amended by striking ``section 1105(a)(29)'' and 
inserting ``section 1105(a)(28)''.

SEC. 202. CHIEF ACQUISITION OFFICERS COUNCIL.

    (a) Establishment of Council.--The Office of Federal Procurement 
Policy Act (41 U.S.C. 403 et seq.) is amended by inserting after 
section 16 the following new section:

``SEC. 16A. CHIEF ACQUISITION OFFICERS COUNCIL.

    ``(a) Establishment.--There is established in the executive branch 
a Chief Acquisition Officers Council.
    ``(b) Membership.--The members of the Council shall be as follows:
            ``(1) The Deputy Director for Management of the Office of 
        Management and Budget, who shall act as Chairman of the 
        Council.
            ``(2) The Administrator for Federal Procurement Policy.
            ``(3) The chief acquisition officer of each executive 
        agency.
            ``(4) The Under Secretary of Defense for Acquisition, 
        Technology, and Logistics.
            ``(5) Any other officer or employee of the United States 
        designated by the Chairman.
    ``(c) Leadership; Support.--(1) The Administrator for Federal 
Procurement Policy shall lead the activities of the Council on behalf 
of the Deputy Director for Management.
    ``(2)(A) The Vice Chairman of the Council shall be selected by the 
Council from among its members.
    ``(B) The Vice Chairman shall serve a 1-year term, and may serve 
multiple terms.
    ``(3) The Administrator of General Services shall provide 
administrative and other support for the Council.
    ``(d) Principal Forum.--The Council is designated the principal 
interagency forum for monitoring and improving the Federal acquisition 
system.
    ``(e) Functions.--The Council shall perform functions that include 
the following:
            ``(1) Develop recommendations for the Director of the 
        Office of Management and Budget on Federal acquisition policies 
        and requirements.
            ``(2) Share experiences, ideas, best practices, and 
        innovative approaches related to Federal acquisition.
            ``(3) Assist the Administrator in the identification, 
        development, and coordination of multiagency projects and other 
        innovative initiatives to improve Federal acquisition.
            ``(4) Promote effective business practices that ensure the 
        timely delivery of best value products to the Federal 
        Government and achieve appropriate public policy objectives.
            ``(5) Further integrity, fairness, competition, openness, 
        and efficiency in the Federal acquisition system.
            ``(6) Work with the Office of Personnel Management to 
        assess and address the hiring, training, and professional 
        development needs of the Federal Government related to 
        acquisition.
            ``(7) Work with the Administrator and the Federal 
        Acquisition Regulatory Council to promote the business 
        practices referred to in paragraph (4) and other results of the 
        functions carried out under this subsection.''.
    (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is amended by inserting after the item relating to section 16 
the following new item:

``Sec. 16A. Chief Acquisition Officers Council.''.

SEC. 203. STATUTORY AND REGULATORY REVIEW.

    (a) Establishment.--Not later than 90 days after the date of the 
enactment of this Act, the Administrator for Federal Procurement Policy 
shall establish an advisory panel to review laws and regulations that 
hinder the use of commercial practices, performance-based contracting, 
the performance of acquisition functions across agency lines of 
responsibility, and the use of Governmentwide contracts.
    (b) Membership.--The panel shall be composed of at least nine 
individuals who are recognized experts in acquisition law and 
Government acquisition policy. In making appointments to the panel, the 
Administrator shall--
            (1) consult with the Secretary of Defense, the 
        Administrator of General Services, the Committees on Armed 
        Services and Government Reform of the House of Representatives, 
        and the Committees on Armed Services and Governmental Affairs 
        of the Senate, and
            (2) ensure that the members of the panel reflect the 
        diverse experiences in the public and private sectors.
    (c) Duties.--The panel shall--
            (1) review all Federal acquisition laws and regulations 
        with a view toward ensuring increased use of commercial 
        practices and performance-based contracting; and
            (2) make any recommendations for the repeal or amendment of 
        such laws or regulations that are considered necessary as a 
        result of such review--
                    (A) to eliminate any provisions in such laws or 
                regulations that are unnecessary for the effective, 
                efficient, and fair award and administration of 
                contracts for the acquisition by the Federal Government 
                of goods and services;
                    (B) to ensure the continuing financial and ethical 
                integrity of acquisitions by the Federal Government; 
                and
                    (C) to protect the best interests of the Federal 
                Government.
    (d) Report.--Not later than one year after the establishment of the 
panel, the panel shall submit to the Administrator and to the 
Committees on Armed Services and Government Reform of the House of 
Representatives and the Committees on Armed Services and Governmental 
Affairs of the Senate a report containing a detailed statement of the 
findings, conclusions, and recommendations of the panel.

               Subtitle B--Other Acquisition Improvements

SEC. 211. ENSURING EFFICIENT PAYMENT.

    (a) Revision to FAR.--Not later than 180 days after the date of the 
enactment of this Act, the Federal Acquisition Regulation under 
sections 6 and 25 of the Office of Federal Procurement Policy Act shall 
be revised to provide the following:
            (1) Authority to permit, to the maximum extent practicable, 
        Federal contractors for services to submit to the Federal 
        Government invoices for payment either--
                    (A) biweekly through electronic means; or
                    (B) monthly.
            (2) A requirement that for any such invoice submitted 
        through electronic means, the date of the invoice shall be the 
        date a proper invoice is received by the Federal Government.
            (3) A requirement that the Federal Government accept or 
        reject such an invoice submitted through electronic means not 
        later than 7 working days after the date of the invoice.
            (4) A requirement that all accepted invoices be paid as 
        soon as possible, but in no event later than 30 days after the 
        date of the invoice.
    (b) Definitions.--In this section:
            (1) The term ``payment'' means an invoice payment as 
        defined in section 32.001 of the Federal Acquisition Regulation 
        (48 C.F.R. 32.001), as in effect on May 1, 2002.
            (2) The term ``proper invoice'' has the meaning given that 
        term in section 3901(a)(3) of title 31, United States Code.

SEC. 212. EXTENSION OF AUTHORITY TO CARRY OUT FRANCHISE FUND PROGRAMS.

    Section 403(f) of the Federal Financial Management Act of 1994 
(Public Law 103-356; 31 U.S.C. 501 note) is amended by striking 
``October 1, 2001'' and inserting ``October 1, 2006''.

SEC. 213. AGENCY ACQUISITION PROTESTS.

    (a) Defense Contracts.--(1) Chapter 137 of title 10, United States 
Code, is amended by inserting after section 2305a the following new 
section:
``Sec. 2305b. Protests
    ``(a) In General.--An interested party may protest an acquisition 
of supplies or services by an agency based on an alleged violation of 
an acquisition law or regulation, and a decision regarding such alleged 
violation shall be made by the agency in accordance with this section.
    ``(b) Restriction on Contract Award Pending Decision.--(1) Except 
as provided in paragraph (2), a contract may not be awarded by an 
agency after a protest concerning the acquisition has been submitted 
under this section and while the protest is pending.
    ``(2) The head of the acquisition activity responsible for the 
award of the contract may authorize the award of a contract, 
notwithstanding pending protest under this section, upon making a 
written finding that urgent and compelling circumstances do not allow 
for waiting for a decision on the protest.
    ``(c) Restriction on Contract Performance Pending Decision.--(1) 
Except as provided in paragraph (2), performance of a contract may not 
be authorized (and performance of the contract shall cease if 
performance has already begun) in any case in which a protest of the 
contract award is submitted under this section before the later of--
            ``(A) the date that is 10 days after the date of contract 
        award; or
            ``(B) the date that is five days after an agency debriefing 
        date offered to an unsuccessful offeror for any debriefing that 
        is requested and, when requested, is required, under section 
        2305(b)(5) of this title.
    ``(2) The head of the acquisition activity responsible for the 
award of a contract may authorize performance of the contract 
notwithstanding a pending protest under this section upon making a 
written finding that urgent and compelling circumstances do not allow 
for waiting for a decision on the protest.
    ``(d) Deadline for Decision.--The head of an agency shall issue a 
decision on a protest under this section not later than the date that 
is 20 working days after the date on which the protest is submitted to 
such head of an agency.
    ``(e) Construction.--Nothing in this section shall affect the right 
of an interested party to file a protest with the Comptroller General 
under subchapter V of chapter 35 of title 31 or in the United States 
Court of Federal Claims.
    ``(f) Definitions.--In this section, the terms `protest' and 
`interested party' have the meanings given such terms in section 3551 
of title 31.''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 2305a the 
following new item:

``2305b. Protests.''.
    (b) Other Agencies.--(1) Title III of the Federal Property and 
Administrative Services Act of 1949 is amended by inserting after 
section 303M (41 U.S.C. 253m) the following new section:

``SEC. 303N. PROTESTS.

    ``(a) In General.--An interested party may protest an acquisition 
of supplies or services by an executive agency based on an alleged 
violation of an acquisition law or regulation, and a decision regarding 
such alleged violation shall be made by the agency in accordance with 
this section.
    ``(b) Restriction on Contract Award Pending Decision.--(1) Except 
as provided in paragraph (2), a contract may not be awarded by an 
agency after a protest concerning the acquisition has been submitted 
under this section and while the protest is pending.
    ``(2) The head of the acquisition activity responsible for the 
award of a contract may authorize the award of the contract, 
notwithstanding a pending protest under this section, upon making a 
written finding that urgent and compelling circumstances do not allow 
for waiting for a decision on the protest.
    ``(c) Restriction on Contract Performance Pending Decision.--(1) 
Except as provided in paragraph (2), performance of a contract may not 
be authorized (and performance of the contract shall cease if 
performance has already begun) in any case in which a protest of the 
contract award is submitted under this section before the later of--
            ``(A) the date that is 10 days after the date of contract 
        award; or
            ``(B) the date that is five days after an agency debriefing 
        date offered to an unsuccessful offeror for any debriefing that 
        is requested and, when requested, is required, under section 
        303B(e) of this title.
    ``(2) The head of the acquisition activity responsible for the 
award of a contract may authorize performance of the contract 
notwithstanding a pending protest under this section upon making a 
written finding that urgent and compelling circumstances do not allow 
for waiting for a decision on the protest.
    ``(d) Deadline for Decision.--The head of an executive agency shall 
issue a decision on a protest under this section not later than the 
date that is 20 working days after the date on which the protest is 
submitted to the executive agency.
    ``(e) Construction.--Nothing in this section shall affect the right 
of an interested party to file a protest with the Comptroller General 
under subchapter V of chapter 35 of title 31, United States Code, or in 
the United States Court of Federal Claims.
    ``(f) Definitions.--In this section, the terms `protest' and 
`interested party' have the meanings given such terms in section 3551 
of title 31, United States Code.''.
    (2) The table of contents in section 1(b) of such Act is amended by 
inserting after the item relating to section 303M the following new 
item:

``303N. Protests.''.
    (c) Conforming Amendment.--Section 3553(d)(4) of title 31, United 
States Code, is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) by striking the period at the end of subparagraph (B) 
        and inserting ``; or''; and
            (3) by adding at the end the following new subparagraph:
            ``(C) in the case of a protest of the same matter regarding 
        such contract that is submitted under section 2305b of title 10 
        or section 303N of the Federal Property and Administrative 
        Services Act of 1949, the date that is 5 days after the date on 
        which a decision on that protest is issued.''.

SEC. 214. IMPROVEMENTS IN CONTRACTING FOR ARCHITECTURAL AND ENGINEERING 
              SERVICES.

    (a) Clarification of Definition of Surveying and Mapping.--(1) 
Section 1102 of title 40, United States Code, is amended by adding at 
the end the following new paragraph:
            ``(4) Surveying and mapping.--The term `surveying and 
        mapping' means services performed by professionals such as 
        surveyors, photogrammetrists, hydrographers, geodesists, or 
        cartographers in the collection, storage, retrieval, or 
        dissemination of graphical or digital data to depict natural or 
        manmade physical features, phenomena, or boundaries of the 
        earth and any information related to such data, including any 
        such data that comprises a survey, map, chart, geographic 
        information system, remotely sensed image or data, or an aerial 
        photograph.''.
    (2) The Federal Acquisition Regulation shall be revised to include 
the definition added by subsection (a) of this section.
    (b) Title 10.--Section 2855(b) of title 10, United States Code, is 
amended--
            (1) in paragraph (2), by striking ``$85,000'' and inserting 
        ``$300,000''; and
            (2) by adding at the end the following new paragraph:
            ``(4) The selection and competition requirements described 
        in subsection (a) shall apply to any contract for architectural 
        and engineering services (including surveying and mapping 
        services) that is entered into by the head of an agency (as 
        such term is defined in section 2302 of this title).''.
    (c) Architectural and Engineering Services.--Architectural and 
engineering services (as defined in section 1102 of title 40, United 
States Code) shall not be offered under multiple-award schedule 
contracts entered into by the Administrator of General Services or 
under Governmentwide task and delivery-order contracts entered into 
under sections 2304a and 2304b of title 10, United States Code, or 
sections 303H and 303I of the Federal Property and Administrative 
Services Act of 1949 (41 U.S.C. 253h and 253i) unless such services--
            (1) are performed under the direct supervision of a 
        professional engineer licensed in a State; and
            (2) are awarded in accordance with the selection procedures 
        set forth in chapter 11 of title 40, United States Code.

SEC. 215. AUTHORIZATION OF TELECOMMUTING FOR FEDERAL CONTRACTORS.

    (a) Amendment to the Federal Acquisition Regulation.--Not later 
than 180 days after the date of the enactment of this Act, the Federal 
Acquisition Regulatory Council shall amend the Federal Acquisition 
Regulation issued in accordance with sections 6 and 25 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 405 and 421) to permit 
telecommuting by employees of Federal Government contractors in the 
performance of contracts entered into with executive agencies.
    (b) Content of Amendment.--The regulation issued pursuant to 
subsection (a) shall, at a minimum, provide that solicitations for the 
acquisition of property or services may not set forth any requirement 
or evaluation criteria that would--
            (1) render an offeror ineligible to enter into a contract 
        on the basis of the inclusion of a plan of the offeror to 
        permit the offeror's employees to telecommute; or
            (2) reduce the scoring of an offer on the basis of the 
        inclusion in the offer of a plan of the offeror to permit the 
        offeror's employees to telecommute, unless the contracting 
        officer concerned first--
                    (A) determines that the requirements of the agency, 
                including the security requirements of the agency, 
                cannot be met if the telecommuting is permitted; and
                    (B) documents in writing the basis for that 
                determination.
    (c) GAO Report.--Not later than one year after the date on which 
the regulation required by subsection (a) is published in the Federal 
Register, the Comptroller General shall submit to Congress--
            (1) an evaluation of--
                    (A) the conformance of the regulations with law; 
                and
                    (B) the compliance by executive agencies with the 
                regulations; and
            (2) any recommendations that the Comptroller General 
        considers appropriate.
    (d) Definition.--In this section, the term ``executive agency'' has 
the meaning given that term in section 4 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403).

                     TITLE III--CONTRACT INCENTIVES

SEC. 301. SHARE-IN-SAVINGS INITIATIVES.

    (a) Defense Contracts.--Section 2332 of title 10, United States 
Code, is amended to read as follows:
``Sec. 2332. Share-in-savings contracts
    ``(a) Authority To Enter Into Share-in-Savings Contracts.--(1) The 
head of an agency may enter into a share-in-savings contract in which 
the Government awards a contract to improve mission-related or 
administrative processes or to accelerate the achievement of its 
mission and share with the contractor in savings achieved through 
contract performance.
    ``(2)(A) Except as provided in subparagraph (B), a share-in-savings 
contract shall be awarded for a period of not more than five years.
    ``(B) A share-in-savings contract may be awarded for a period 
greater than five years, but not more than 10 years, if the head of the 
agency determines in writing prior to award of the contract that--
            ``(i) the level of risk to be assumed and the investment to 
        be undertaken by the contractor is likely to inhibit the 
        government from obtaining the needed performance competitively 
        at a fair and reasonable price if the contract is limited in 
        duration to a period of five years or less; and
            ``(ii) the performance to be acquired is likely to continue 
        for a period of time sufficient to generate reasonable benefit 
        for the government.
    ``(3) Contracts awarded pursuant to the authority of this section 
shall, to the maximum extent practicable, be performance-based 
contracts that identify objective outcomes and contain performance 
standards that will be used to measure achievement and milestones that 
must be met before payment is made.
    ``(4) Contracts awarded pursuant to the authority of this section 
shall include a provision containing a quantifiable baseline that is to 
be the basis upon which a savings share ratio is established that 
governs the amount of payment a contractor is to receive under the 
contract. Before commencement of performance of such a contract, the 
chief acquisition officer of the agency shall determine in writing that 
the terms of the provision are quantifiable and will likely yield value 
to the Government.
    ``(5)(A) The head of the agency may retain savings realized through 
the use of a share-in-savings contract under this section that are in 
excess of the total amount of savings paid to the contractor under the 
contract. Except as provided in subparagraph (B), savings shall be 
credited to the appropriation or fund against which charges were made 
to carry out the contract.
    ``(B) Amounts retained by the agency under this subsection shall--
            ``(i) without further appropriation, remain available until 
        expended; and
            ``(ii) be applied first to fund any contingent liabilities 
        associated with share-in-savings procurements that are not 
        fully funded.
    ``(b) Cancellation and Termination.--(1) If funds are not made 
available for the continuation of a share-in-savings contract entered 
into under this section in a subsequent fiscal year, the contract shall 
be canceled or terminated. The costs of cancellation or termination may 
be paid out of--
            ``(A) appropriations available for the performance of the 
        contract;
            ``(B) appropriations available for acquisition of the type 
        of property or services procured under the contract, and not 
        otherwise obligated; or
            ``(C) funds subsequently appropriated for payments of costs 
        of cancellation or termination, subject to the limitations in 
        paragraph (3).
    ``(2) The amount payable in the event of cancellation or 
termination of a share-in-savings contract shall be negotiated with the 
contractor at the time the contract is entered into.
    ``(3) The head of an agency may enter into share-in-savings 
contracts under this section in any given fiscal year even if funds are 
not made specifically available for the full costs of cancellation or 
termination of the contract if funds are available and sufficient to 
make payments with respect to the first fiscal year of the contract and 
the following conditions are met regarding the funding of cancellation 
and termination liability:
            ``(A) The amount of unfunded contingent liability for the 
        contract does not exceed the lesser of--
                    ``(i) 50 percent of the estimated costs of a 
                cancellation or termination; or
                    ``(ii) $10,000,000.
            ``(B) Unfunded contingent liability in excess of $5,000,000 
        has been approved by the Director of the Office of Management 
        and Budget or the Director's designee.
    ``(c) Definitions.--In this section:
            ``(1) The term `contractor' means a private entity that 
        enters into a contract with an agency.
            ``(2) The term `savings' means--
                    ``(A) monetary savings to an agency; or
                    ``(B) savings in time or other benefits realized by 
                the agency, including enhanced revenues.
            ``(3) The term `share-in-savings contract' means a contract 
        under which--
                    ``(A) a contractor provides solutions for--
                            ``(i) improving the agency's mission-
                        related or administrative processes; or
                            ``(ii) accelerating the achievement of 
                        agency missions; and
                    ``(B) the head of the agency pays the contractor an 
                amount equal to a portion of the savings derived by the 
                agency from--
                            ``(i) any improvements in mission-related 
                        or administrative processes that result from 
                        implementation of the solution; or
                            ``(ii) acceleration of achievement of 
                        agency missions.''.
    (b) Other Contracts.--Section 317 of the Federal Property and 
Administrative Services Act of 1949 is amended to read as follows:

``SEC. 317. SHARE-IN-SAVINGS CONTRACTS.

    ``(a) Authority To Enter Into Share-in-Savings Contracts.--(1) The 
head of an executive agency may enter into a share-in-savings contract 
in which the Government awards a contract to improve mission-related or 
administrative processes or to accelerate the achievement of its 
mission and share with the contractor in savings achieved through 
contract performance.
    ``(2)(A) Except as provided in subparagraph (B), a share-in-savings 
contract shall be awarded for a period of not more than five years.
    ``(B) A share-in-savings contract may be awarded for a period 
greater than five years, but not more than 10 years, if the head of the 
agency determines in writing prior to award of the contract that--
            ``(i) the level of risk to be assumed and the investment to 
        be undertaken by the contractor is likely to inhibit the 
        government from obtaining the needed performance competitively 
        at a fair and reasonable price if the contract is limited in 
        duration to a period of five years or less; and
            ``(ii) the performance to be acquired is likely to continue 
        for a period of time sufficient to generate reasonable benefit 
        for the government.
    ``(3) Contracts awarded pursuant to the authority of this section 
shall, to the maximum extent practicable, be performance-based 
contracts that identify objective outcomes and contain performance 
standards that will be used to measure achievement and milestones that 
must be met before payment is made.
    ``(4) Contracts awarded pursuant to the authority of this section 
shall include a provision containing a quantifiable baseline that is to 
be the basis upon which a savings share ratio is established that 
governs the amount of payment a contractor is to receive under the 
contract. Before commencement of performance of such a contract, the 
chief acquisition officer of the agency shall determine in writing that 
the terms of the provision are quantifiable and will likely yield value 
to the Government.
    ``(5)(A) The head of the agency may retain savings realized through 
the use of a share-in-savings contract under this section that are in 
excess of the total amount of savings paid to the contractor under the 
contract. Except as provided in subparagraph (B), savings shall be 
credited to the appropriation or fund against which charges were made 
to carry out the contract.
    ``(B) Amounts retained by the agency under this subsection shall--
            ``(i) without further appropriation, remain available until 
        expended; and
            ``(ii) be applied first to fund any contingent liabilities 
        associated with share-in-savings procurements that are not 
        fully funded.
    ``(b) Cancellation and Termination.--(1) If funds are not made 
available for the continuation of a share-in-savings contract entered 
into under this section in a subsequent fiscal year, the contract shall 
be canceled or terminated. The costs of cancellation or termination may 
be paid out of--
            ``(A) appropriations available for the performance of the 
        contract;
            ``(B) appropriations available for acquisition of the type 
        of property or services procured under the contract, and not 
        otherwise obligated; or
            ``(C) funds subsequently appropriated for payments of costs 
        of cancellation or termination, subject to the limitations in 
        paragraph (3).
    ``(2) The amount payable in the event of cancellation or 
termination of a share-in-savings contract shall be negotiated with the 
contractor at the time the contract is entered into.
    ``(3) The head of an executive agency may enter into share-in-
savings contracts under this section in any given fiscal year even if 
funds are not made specifically available for the full costs of 
cancellation or termination of the contract if funds are available and 
sufficient to make payments with respect to the first fiscal year of 
the contract and the following conditions are met regarding the funding 
of cancellation and termination liability:
            ``(A) The amount of unfunded contingent liability for the 
        contract does not exceed the lesser of--
                    ``(i) 50 percent of the estimated costs of a 
                cancellation or termination; or
                    ``(ii) $10,000,000.
            ``(B) Unfunded contingent liability in excess of $5,000,000 
        has been approved by the Director of the Office of Management 
        and Budget or the Director's designee.
    ``(c) Definitions--In this section:
            ``(1) The term `contractor' means a private entity that 
        enters into a contract with an agency.
            ``(2) The term `savings' means--
                    ``(A) monetary savings to an agency; or
                    ``(B) savings in time or other benefits realized by 
                the agency, including enhanced revenues.
            ``(3) The term `share-in-savings contract' means a contract 
        under which--
                    ``(A) a contractor provides solutions for--
                            ``(i) improving the agency's mission-
                        related or administrative processes; or
                            ``(ii) accelerating the achievement of 
                        agency missions; and
                    ``(B) the head of the agency pays the contractor an 
                amount equal to a portion of the savings derived by the 
                agency from--
                            ``(i) any improvements in mission-related 
                        or administrative processes that result from 
                        implementation of the solution; or
                            ``(ii) acceleration of achievement of 
                        agency missions.''.
    (c) Development of Incentives.--The Director of the Office of 
Management and Budget shall--
            (1) identify potential opportunities for the use of share-
        in-savings contracts;
            (2) provide guidance to executive agencies for determining 
        mutually beneficial savings share ratios and baselines from 
        which savings may be measured; and
            (3) in consultation with the Committee on Governmental 
        Affairs of the Senate, the Committee on Government Reform of 
        the House of Representatives, and executive agencies, develop 
        techniques to permit an executive agency to retain a portion of 
        the savings (after payment of the contractor's share of the 
        savings) derived from share-in-savings contracts as funds are 
        appropriated to the agency in future fiscal years.
    (d) Regulations.--Not later than 180 days after the date of the 
enactment of this Act, the Federal Acquisition Regulation shall be 
revised to implement the provisions enacted by this section. Such 
revisions shall--
            (1) provide for the use of competitive procedures in the 
        selection and award of share-in-savings contracts to--
                    (A) ensure the contractor's share of savings 
                reflects the risk involved and market conditions; and
                    (B) otherwise yield best value to the government; 
                and
            (2) allow appropriate regulatory flexibility to facilitate 
        the use of share-in-savings contracts by executive agencies, 
        including the use of innovative provisions for technology 
        refreshment and nonstandard Federal Acquisition Regulation 
        contract clauses.
    (e) OMB Report to Congress.--In consultation with executive 
agencies, the Director of the Office of Management and Budget shall, 
not later than 2 years after the completion of the revisions to the 
Federal Acquisition Regulation under subsection (d), submit to Congress 
a report containing--
            (1) a description of the number of share-in-savings 
        contracts entered into by each executive agency under by this 
        section and the amendments made by this section, and, for each 
        contract identified--
                    (A) the performance acquired;
                    (B) the total amount of payments made to the 
                contractor; and
                    (C) the total amount of savings or other measurable 
                benefits realized;
            (2) a description of the ability of agencies to determine 
        the baseline costs of a project against which savings can be 
        measured; and
            (3) any recommendations, as the Director deems appropriate, 
        regarding additional changes in law that may be necessary to 
        ensure effective use of share-in-savings contracts by executive 
        agencies.
    (f) Definitions.--In this section, the terms ``contractor'', 
``savings'', and ``share-in-savings contract'' have the meanings given 
those terms in section 2332 of title 10, United States Code, and 
section 317 of the Federal Property and Administrative Services Act of 
1949 (as amended by subsections (a) and (b)).
    (g) Repeal of Superseded Provisions.--Subsections (c), (d), (e), 
(f), (g), and (i) of section 210 of the E-Government Act of 2002 
(Public Law 107-317; 116 Stat. 2936) are repealed.

SEC. 302. INCENTIVES FOR CONTRACT EFFICIENCY.

    (a) Incentives for Contract Efficiency.--The Office of Federal 
Procurement Policy Act (41 U.S.C. 403 et seq.) is amended by adding at 
the end the following new section:

``SEC. 41. INCENTIVES FOR EFFICIENT PERFORMANCE OF SERVICES CONTRACTS.

    ``(a) Options for Services Contracts.--The head of an executive 
agency may include in a contract for the performance of services an 
option to extend the contract by one or more additional periods on the 
basis of exceptional performance by the contractor. A contract that 
provides for such extensions shall include performance standards for 
measuring performance under the contract and, to the maximum extent 
practicable, be performance-based.
    ``(b) Definition of Performance-Based.--In this section, the term 
`performance-based', with respect to a contract, task order, or 
contracting, means that the contract, task order, or contracting, 
respectively, includes the use of performance work statements that set 
forth contract requirements in clear, specific, and objective terms 
with measurable outcomes.''.
    (b) Clerical and Technical Amendments.--(1) The table of contents 
in section 1(b) of such Act is amended by striking the last item and 
inserting the following:

``Sec. 40. Protection of constitutional rights of contractors.
``Sec. 41. Incentives for efficient performance of services 
                            contracts.''.
    (2) The section before section 41 of such Act (as added by 
subsection (a)) is redesignated as section 40.

               TITLE IV--ACQUISITIONS OF COMMERCIAL ITEMS

SEC. 401. ADDITIONAL INCENTIVE FOR USE OF PERFORMANCE-BASED CONTRACTING 
              FOR SERVICES.

    (a) Other Contracts.--Section 41 of the Office of Federal 
Procurement Policy Act, as added by section 302, is amended--
            (1) by redesignating subsection (b) as subsection (c); and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Incentive for Use of Performance-Based Services Contracts.--A 
performance-based contract for the procurement of services entered into 
by an executive agency or a performance-based task order for services 
issued by an executive agency may be treated as a contract for the 
procurement of commercial items if--
            ``(1) the contract or task order sets forth specifically 
        each task to be performed and, for each task--
                    ``(A) defines the task in measurable, mission-
                related terms; and
                    ``(B) identifies the specific end products or 
                output to be achieved; and
            ``(2) the source of the services provides similar services 
        to the general public under terms and conditions similar to 
        those offered to the Federal Government.''.
    (c) Center of Excellence in Service Contracting.--Not later than 
180 days after the date of the enactment of this Act, the Administrator 
for Federal Procurement Policy shall establish a center of excellence 
in contracting for services. The center of excellence shall assist the 
acquisition community by identifying, and serving as a clearinghouse 
for, best practices in contracting for services in the public and 
private sectors.
    (d) Repeal of Superseded Provision.--Subsection (b) of section 821 
of the Floyd D. Spence National Defense Authorization Act for Fiscal 
Year 2001 (as enacted into law by Public Law 106-398; 114 Stat. 1654A-
218) is repealed.

SEC. 402. AUTHORIZATION OF ADDITIONAL COMMERCIAL CONTRACT TYPES.

    Section 8002(d) of the Federal Acquisition Streamlining Act of 1994 
(Public Law 103-355; 108 Stat. 3387; 41 U.S.C. 264 note) is amended--
            (1) in paragraph (1), by striking ``and'';
            (2) by striking the period at the end of paragraph (2) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(3) authority for use of a time and materials contract or 
        a labor-hour contract for the procurement of commercial 
        services that are commonly sold to the general public through 
        such contracts.''

SEC. 403. CLARIFICATION OF COMMERCIAL SERVICES DEFINITION.

    Section 4(12) of the Office of Federal Procurement Policy Act (41 
U.S.C. 403(12)) is amended--
            (1) in subparagraph (A), by striking ``, other than real 
        property,'' and inserting ``(other than real property) or 
        service'';
            (2) in subparagraph (C), by inserting ``or service'' after 
        ``item'';
            (3) in subparagraph (D), by striking ``(C), or (E)'' and 
        inserting ``or (C), or any combination of services meeting the 
        requirements of subparagraphs (A) or (C),'';
            (4) by striking subparagraphs (E) and (F);
            (5) by redesignating subparagraphs (G) and (H) as 
        subparagraphs (E) and (F), respectively; and
            (6) in subparagraph (E), as so redesignated, by striking 
        ``through (F)'' and inserting ``through (D)''.

SEC. 404. DESIGNATION OF COMMERCIAL BUSINESS ENTITIES.

    (a) In General.--Section 4 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 403), as amended by section 403, is further 
amended--
            (1) by adding at the end of paragraph (12) the following 
        new subparagraph:
                    ``(G) Items or services produced or provided by a 
                commercial entity.''; and
            (2) by adding at the end the following new paragraph:
            ``(16) The term `commercial entity' means any enterprise 
        whose primary customers are other than the Federal Government. 
        In order to qualify as a commercial entity, at least 90 percent 
        (in dollars) of the sales of the enterprise over the past three 
        business years must have been made to private sector 
        entities.''.
    (b) Comptroller General Review.--The Comptroller General shall 
review the implementation of the amendments made by subsection (a) to 
evaluate the effectiveness of such implementation in increasing the 
availability of items and services to the Federal Government at fair 
and reasonable prices.

                         TITLE V--OTHER MATTERS

SEC. 501. AUTHORITY TO ENTER INTO CERTAIN PROCUREMENT-RELATED 
              TRANSACTIONS AND TO CARRY OUT CERTAIN PROTOTYPE PROJECTS.

    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. AUTHORITY TO ENTER INTO CERTAIN TRANSACTIONS FOR DEFENSE 
              AGAINST OR RECOVERY FROM TERRORISM OR NUCLEAR, 
              BIOLOGICAL, CHEMICAL, OR RADIOLOGICAL ATTACK.

    ``(a) Authority.--
            ``(1) In general.--The head of an executive agency who 
        engages in basic research, applied research, advanced research, 
        and development projects that--
                    ``(A) are necessary to the responsibilities of such 
                official's executive agency in the field of research 
                and development, and
                    ``(B) have the potential to facilitate defense 
                against or recovery from terrorism or nuclear, 
                biological, chemical, or radiological attack,
        may exercise the same authority (subject to the same 
        restrictions and conditions) with respect to such research and 
        projects as the Secretary of Defense may exercise under section 
        2371 of title 10, United States Code, except for subsections 
        (b) and (f) of such section 2371.
            ``(2) Prototype projects.--The head of an executive agency 
        may, under the authority of paragraph (1), carry out prototype 
        projects that meet the requirements of subparagraphs (A) and 
        (B) of paragraph (1) in accordance with the requirements and 
        conditions provided for carrying out prototype projects under 
        section 845 of the National Defense Authorization Act for 
        Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2371 note). In 
        applying the requirements and conditions of that section 845--
                    ``(A) subsection (c) of that section shall apply 
                with respect to prototype projects carried out under 
                this paragraph; and
                    ``(B) the Director of the Office of Management and 
                Budget shall perform the functions of the Secretary of 
                Defense under subsection (d) of that section.
            ``(3) Applicability to selected executive agencies.--
                    ``(A) OMB authorization required.--The head of an 
                executive agency may exercise authority under this 
                subsection only if authorized by the Director of the 
                Office of Management and Budget to do so.
                    ``(B) Relationship to authority of department of 
                homeland security.--The authority under this subsection 
                shall not apply to the Secretary of Homeland Security 
                while section 831 of the Homeland Security Act of 2002 
                (Public Law 107-296; 116 Stat. 2224) is in effect.
    ``(b) Annual Report.--The annual report of the head of an executive 
agency that is required under subsection (h) of section 2371 of title 
10, United States Code, as applied to the head of the executive agency 
by subsection (a), shall be submitted to the Committee on Governmental 
Affairs of the Senate and the Committee on Government Reform of the 
House of Representatives.
    ``(c) Regulations.--The Director of the Office of Management and 
Budget shall prescribe regulations to carry out this section.''.

SEC. 502. AMENDMENTS RELATING TO FEDERAL EMERGENCY PROCUREMENT 
              FLEXIBILITY.

    (a) Repeal of Sunset for Authorities Applicable to Procurements for 
Defense Against or Recovery From Terrorism or Nuclear, Biological, 
Chemical, or Radiological Attack.--Section 852 of the Homeland Security 
Act of 2002 (Public Law 107-296; 116 Stat. 2235) is amended by striking 
``, but only if a solicitation of offers for the procurement is issued 
during the 1-year period beginning on the date of the enactment of this 
Act''.
    (b) Applicability of Increased Simplified Acquisition Threshold.--
(1) The matter preceding paragraph (1) of section 853(a) of the 
Homeland Security Act of 2002 (Public Law 107-296; 116 Stat. 2235) is 
amended to read as follows:
    ``(a) Threshold Amounts.--For a procurement referred to in section 
852, the simplified acquisition threshold referred to in section 4(11) 
of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)) is 
deemed to be--''.
    (2) Subsections (b) and (c) of section 853 of such Act are 
repealed.
    (3) The heading of section 853 of such Act is amended to read as 
follows:

``SEC. 853. INCREASED SIMPLIFIED ACQUISITION THRESHOLD FOR CERTAIN 
              PROCUREMENTS.''.

    (4) The table of contents in section 1(b) of such Act is amended by 
striking the item relating to section 853 and inserting the following:

``Sec. 853. Increased simplified acquisition threshold for certain 
                            procurements.''.
    (5) Section 18(c)(1) of the Office of Federal Procurement Policy 
Act (41 U.S.C. 416(c)(1)) is amended--
            (A) by striking ``or'' at the end of subparagraph (G);
            (B) by striking the period at the end of subparagraph (H) 
        and inserting ``; or''; and
            (C) by adding at the end the following:
                    ``(I) the procurement is by the head of an 
                executive agency pursuant to the special procedures 
                provided in section 853 of the Homeland Security Act of 
                2002 (Public Law 107-296).''.
    (c) Applicability of Certain Commercial Items Authorities.--(1) 
Subsection (a) of section 855 of the Homeland Security Act of 2002 
(Public Law 107-296; 116 Stat. 2236) is amended to read as follows:
    ``(a) Authority.-- With respect to a procurement referred to in 
section 852, the head of an executive agency may deem any item or 
service to be a commercial item for the purpose of Federal procurement 
laws.''.
    (2) Subsection (b)(1) of section 855 of such Act is amended by 
striking ``to which any of the provisions of law referred to in 
subsection (a) are applied''.
    (d) Extension of Deadline for Review and Report.--Section 857(a) of 
the Homeland Security Act of 2002 (Public Law 107-296; 116 Stat. 2237) 
is amended by striking ``2004'' and inserting ``2006''.

SEC. 503. AUTHORITY TO MAKE INFLATION ADJUSTMENTS TO SIMPLIFIED 
              ACQUISITION THRESHOLD.

    Section 4(11) of the Office of Federal Procurement Policy Act (41 
U.S.C. 403(11)) is amended by inserting before the period at the end 
the following: ``, except that such amount may be adjusted by the 
Administrator every five years to the amount equal to $100,000 in 
constant fiscal year 2003 dollars (rounded to the nearest $10,000)''.

SEC. 504. TECHNICAL CORRECTIONS RELATED TO DUPLICATIVE AMENDMENTS.

    (a) Repeal of Superseded Subchapter and Related Conforming 
Amendments.--(1) Subchapter II of chapter 35 of title 44, United States 
Code, is repealed.
    (2) Subchapter III of such chapter is redesignated as subchapter 
II.
    (3) Section 3549 of title 44, United States Code, is amended by 
striking the sentence beginning with ``While this subchapter''.
    (4) The table of sections at the beginning of chapter 35 of title 
44, United States Code, is amended--
            (A) by striking the items relating to sections 3531 through 
        3538; and
            (B) by striking the heading ``SUBCHAPTER III''.
    (5) Section 2224a of title 10, United States Code, is repealed, and 
the table of sections at the beginning of chapter 131 of such title is 
amended by striking the item relating to such section.
    (b) Conforming Amendments Related to Repeals of Share-in-Savings 
and Solutions-Based Contracting Pilot Programs.--(1) Chapter 115 of 
title 40, United States Code, is repealed.
    (2) The table of chapters at the beginning of subtitle III of such 
title is amended by striking the item relating to chapter 115.
    (c) Amendments Made by E-Government Act Made Applicable.--The 
following provisions of law shall read as if the amendments made by 
title X of the Homeland Security Act of 2002 (Public Law 107-296) to 
such provisions did not take effect:
            (1) Section 2224 of title 10, United States Code.
            (2) Sections 20 and 21 of the National Institute of 
        Standards and Technology Act (15 U.S.C. 278g-3 and 278g-4).
            (3) Sections 11331 and 11332 of title 40, United States 
        Code.
            (4) Subtitle G of title X of the Floyd D. Spence National 
        Defense Authorization Act for Fiscal Year 2001 (Public Law 106-
        398; 44 U.S.C. 3531 note).
            (5) Sections 3504(g), 3505, and 3506(g) of title 44, United 
        States Code.
    (d) Correction of Cross Reference.--Section 2224(c) of title 10, 
United States Code, as amended by section 301(c)(1)(B)(iii) of the E-
Government Act of 2002 (Public Law 107-347; 116 Stat. 2955), is amended 
by striking ``subchapter III'' and inserting ``subchapter II''.
                                 <all>
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