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[Senate Report 111-192]
[From the U.S. Government Publishing Office]

111th Congress 
 2nd Session                     SENATE                          Report
                                                                111-192
_______________________________________________________________________

                                                       Calendar No. 379
 
               FEDERAL SUPPLY SCHEDULES USAGE ACT OF 2009

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2868

 TO PROVIDE INCREASED ACCESS TO THE GENERAL SERVICES ADMINISTRATION'S 
    SCHEDULES PROGRAM BY THE AMERICAN RED CROSS AND STATE AND LOCAL 
                              GOVERNMENTS

                  May 17, 2010.--Ordered to be printed

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
JON TESTER, Montana                  LINDSEY GRAHAM, South Carolina
ROLAND W. BURRIS, Illinois
EDWARD E. KAUFMAN, Delaware

                  Michael L. Alexander, Staff Director
                     Kevin J. Landy, Chief Counsel
                         Troy H. Cribb, Counsel
                     Paula Haurilesko, GAO Detailee
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
              Molly A. Wilkinson, Minority General Counsel
                   Eric B. Cho, Minority GSA Detailee
                  Trina Driessnack Tyrer, Chief Clerk
                            C O N T E N T S

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................1
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................4
  V. Evaluation of Regulatory Impact..................................5
 VI. Congressional Budget Office Cost Estimate........................5
VII. Changes to Existing Law Made by the Bill, as Reported............6
                                                       Calendar No. 379
111th Congress
                                 SENATE
                                                                 Report
 2d Session                                                     111-192

======================================================================

               FEDERAL SUPPLY SCHEDULES USAGE ACT OF 2009

                                _______
                                

                  May 17, 2010.--Ordered to be printed

                                _______
                                

Mr. Lieberman, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 2868]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 2868) to provide 
increased access to the General Services Administration's 
Schedules Program by the American Red Cross and State and local 
governments, having considered the same, reports favorably 
thereon without amendment and recommends that the bill do pass.

                         I. Purpose and Summary

    S. 2868 seeks to enhance the ability of the American 
National Red Cross (``American Red Cross'') and state and local 
governments to effectively prepare for and respond to disasters 
by giving them the ability to purchase certain goods and 
services through pre-negotiated contracts established under the 
General Services Administration's (GSA) Federal Supply 
Schedules (FSS) program. This procurement authority will help 
the American Red Cross and state and local governments reduce 
the administrative costs of negotiating their own contracts by 
authorizing them to use the pre-negotiated contracts of GSA.

              II. Background and Need for the Legislation

    The GSA FSS program is also known as the GSA Schedules or 
Multiple Award Schedules program. The FSS program enables 
federal agencies to purchase goods and services under contracts 
that GSA has pre-negotiated. These contracts cover more than 11 
million commercial goods and services and are listed in broad 
categories known as schedules. GSA pre-negotiates the terms and 
conditions of the contract, including discounted prices. The 
discounts result from the ability of the federal government, 
like many other buyers who purchase large volumes of goods and 
services, to use its buying power to negotiate long-term 
contracts with suppliers seeking access to the large federal 
market. Federal agencies--and non-federal entities, as 
permitted--can place orders under FSS contracts, thus 
streamlining the acquisition process and reducing time and 
administrative costs associated with negotiating and awarding 
contracts. Use of the FSS contracts is voluntary for both 
purchasers and sellers. Non-federal entities, when authorized 
to use the Federal Supply Schedules for a specific purpose, are 
not required to do so; likewise, companies holding FSS 
contracts are not required to offer goods and services under 
them to non-federal entities. Nevertheless, most FSS vendors 
choose to offer their goods and services to non-federal 
entities under their FSS contracts, when authorized to do so, 
in order to reach a larger market.

                         THE AMERICAN RED CROSS

    The American Red Cross is the largest nongovernmental 
provider of disaster response services in the United States. 
Congress first chartered the organization in 1900. The current 
charter, codified in 2007,\1\ tasks the American Red Cross with 
providing volunteer aid in time of war to the sick and wounded 
of the armed forces; facilitating communication between members 
of the armed forces and U.S. citizens\2\; providing national 
and international relief to mitigate suffering caused by 
disasters; helping prevent disasters; and conducting other 
activities consistent with these purposes.\3\
---------------------------------------------------------------------------
    \1\Pub. L. 110-26, May 11, 2007.
    \2\Through local chapters and call centers, the American Red Cross 
relays information related to family emergencies to service members 
stationed around the world.
    \3\36 U.S.C. Sec. Sec. 300101-300111.
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    The American Red Cross spends millions of dollars each year 
to assist Americans impacted by disasters large and small, to 
provide aid to members of the U.S. armed forces serving 
overseas, as well as to provide assistance when overseas 
disasters strike. For example, during 2009, the American Red 
Cross provided shelter, food, clothing, and other supplies to 
victims of flooding in Georgia, North Carolina, Alabama and 
Tennessee, and sheltered evacuees from the California 
wildfires. The American Red Cross provided disaster relief in 
American Samoa, giving things such as cots, flashlights, and 
cooking and clean-up supplies to victims of the earthquake and 
tsunami that struck on September 29, 2009; and it helped to 
rebuild homes after the 2008 earthquake in Sichuan, China. The 
American Red Cross also provides items such as clothing, 
furniture, and supplies to members of the U.S. military and 
their families at hospitals and Warrior Transition Units, which 
provide critical support to wounded soldiers who are expected 
to require at least six months of rehabilitative care and 
complex medical management.
    The American Red Cross has long had access to FSS, but 
since 2001 GSA has interpreted the law giving that access--the 
Foreign Assistance Act of 1961\4\--as authorizing only 
purchases related to international relief efforts.\5\ For the 
last and current fiscal year, provisions in appropriations Acts 
have given the American Red Cross authority to use FSS purchase 
supplies and services for its disaster-related domestic 
work.\6\ S. 2868 would make that authority permanent by 
authorizing the American Red Cross to use FSS to purchase 
supplies and services to serve any of the purposes authorized 
under its congressional charter.
---------------------------------------------------------------------------
    \4\Pub. L. 87-195 Sec. 607, as amended, 22 U.S.C. 2357.
    \5\From 1992 until 2001, GSA interpreted the language in that Act 
to permit the American Red Cross to use the Federal Supply Schedules 
for all of its work, regardless of whether the work was foreign or 
domestic. In 2001, however, GSA re-interpreted the Act to limit 
American Red Cross usage of FSS to supporting only overseas activities. 
Letter from G. Martin Wagner, Associate Administrator, GSA, to Mr. John 
D. Campbell, Chief Financial Officer, American Red Cross, December 26, 
2001.
    \6\Pub. L. 111-8 Sec. 517; Pub. L. 111-117, Div. C, Title V, 
Sec. 516.
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    The bill makes clear, however, that the American Red 
Cross's access to FSS is limited to purchasing goods and 
services specifically in support of purposes stated in the 
congressional charter. It may not, for example, purchase 
pharmaceuticals or equipment and supplies for its blood supply 
services mission. In addition, the bill explicitly prohibits 
purchasing from FSS for resale.
    The American Red Cross has in recent years suffered from 
financial difficulties. In response to the American Red Cross's 
financial problems during the 2008 disaster season caused by 
increased disaster activity and lower contributions due to the 
recession, Congress in 2009 provided $100 million to reimburse 
the American Red Cross for disaster relief and recovery 
expenditures and emergency services for disasters that occurred 
during 2008.\7\ The American Red Cross's financial situation 
has recently started to improve; its financial statement for 
fiscal year 2009, which ended in June 2009, indicates that the 
American Red Cross ended year with a $33.5 million operating 
deficit, a significant improvement over its $209 million 
operating deficit in fiscal year 2008. The ability to make 
additional purchases using the Federal Supply Schedules to 
support members of the armed forces and to stockpile supplies 
in advance of disasters will stretch American Red Cross dollars 
further and help it continue to improve its operating finances.
---------------------------------------------------------------------------
    \7\Consolidated Security, Disaster Assistance, and Continuing 
Appropriations Act, 2009, Pub. L. 110-329, Div. B, Title I, Chapter 5, 
Sec. 10502.
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                      STATE AND LOCAL GOVERNMENTS

    State and local government entities currently are eligible 
to purchase certain goods and services using FSS contracts 
under several authorities.
    Under the Cooperative Purchasing Program, state and local 
governments are permitted to purchase selected information 
technology products and services using FSS contracts.\8\ State 
and local government entities may also purchase alarm and 
signal systems, facility management systems, firefighting and 
rescue equipment, law enforcement and security equipment, 
marine craft and related equipment, special purpose clothing, 
and related services.\9\
---------------------------------------------------------------------------
    \8\The authority to purchase information technology products was 
granted under the E-Government Act of 2002, Pub. L. 107-347 Sec. 211.
    \9\Authorized by the Local Preparedness Acquisition Act, Pub. L. 
110-248.
---------------------------------------------------------------------------
    The 1122 Program--so called because it is authorized by 
section 1122 of the fiscal year 1994 National Defense 
Authorization Act--permits states and units of local government 
to purchase law enforcement equipment through federal 
procurement channels, provided that the equipment is used in 
the performance of counter-drug activities.
    Under the Disaster Recovery Purchasing Program, state and 
local governments have been authorized since 2007 to purchase 
goods and services to facilitate recovery from a major disaster 
that has been declared by the President under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act\10\ or to 
facilitate recovery from terrorism or nuclear, biological, 
chemical, or radiological attack.\11\
---------------------------------------------------------------------------
    \10\Pub. L. 100-707.
    \11\The authority was granted by section 833 of the John Warner 
National Defense Authorization Act for Fiscal Year 2007, Pub. L. 109-
364.
---------------------------------------------------------------------------
    In addition to these three programs, in August 2009 the 
Administrator of GSA, under GSA's general authorities,\12\ 
granted state, local, territorial, and tribal governments 
access to FSS to purchase goods and services when expending 
federal grant funds in response to Public Health Emergencies 
declared by the Secretary of Health and Human Services under 
section 319 of the Public Health Services Act.\13\
---------------------------------------------------------------------------
    \12\40 U.S.C. 501 grants the Administrator of GSA general 
authorities to take actions advantageous to the economy, efficiency or 
service of the government, and to procure and supply personal property 
and nonpersonal services for executive agencies to use in the proper 
discharge of their responsibilities.
    \13\Codified at 42 U.S.C. Sec. 247d.
---------------------------------------------------------------------------
    However, none of these programs permit state and local 
governments to purchase goods and services to help prepare for 
disasters in advance of a disaster declaration, and there is no 
specific statutory authority related to disaster response.\14\ 
This bill will rectify these omissions, thus permitting state 
and local governments to reduce time and resources spent on 
negotiating and awarding contracts for needed goods and 
services by purchasing through the Federal Supply Schedules for 
these activities.
---------------------------------------------------------------------------
    \14\Disaster response refers to the actions taken immediately after 
a disaster; recovery refers to the longer-term effort to rebuild the 
infrastructure. Response and recovery efforts can occur simultaneously.
---------------------------------------------------------------------------

                        III. Legislative History

    On December 10, 2009, S. 2868 was introduced by Senator 
Lieberman and referred to the Senate Committee on Homeland 
Security and Governmental Affairs. On December 16, 2009, the 
Committee favorably reported S. 2868, without amendment, by 
voice vote. Members present for the vote on the bill were 
Senators Lieberman, Akaka, Carper, Pryor, McCaskill, Tester, 
Burris, Kirk, and Collins. On January 20, 2010, Senator Carper 
became a cosponsor of the bill.

                    IV. Section-by-Section Analysis

Section 1. Short title

    Section 1 designates the name of the act as the ``Federal 
Supply Schedules Usage Act of 2009.''

Section 2. Use of Federal Supply Schedules by the Red Cross

    Section 2 adds a new subsection to 40 U.S.C. Sec. 502. It 
authorizes the General Services Administration to grant the 
American Red Cross access to the Federal Supply Schedules to 
purchase goods and services in support of the purposes 
authorized by the American Red Cross's federal charter under 36 
U.S.C. Sec. 300102. Section 2 prohibits the American Red Cross 
from reselling goods and services purchased through Federal 
Supply Schedule contracts.

Section 3. Duty of users regarding use of supply schedules

    Section 3 adds a new subsection to 40 U.S.C. Sec. 502. The 
new subsection will impose a positive duty upon all users of 
the Federal Supply Schedules, both federal and non-federal, to 
act in accordance with the guidance on placing orders under the 
Federal Supply Schedules that GSA provides.

Section 4. Authority of State and local governments to use supply 
        schedules for certain goods and services

    Section 4 amends 40 U.S.C. Sec. 502(d) to permit state and 
local governments to use the Federal Supply Schedules to 
purchase goods and services for the purpose of disaster 
preparation and response. Section 502(d) already permits state 
and local governments to use the Federal Supply Schedules to 
purchase goods and services to facilitate recovery from a major 
disaster that has been declared by the President under the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act 
or to facilitate recovery from terrorism or nuclear, 
biological, chemical, or radiological attack.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. The 
Congressional Budget Office states that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandate Reform Act and would not effect state, local, 
and tribal governments. The enactment of this legislation will 
not have significant regulatory impact.

             VI. Congressional Budget Office Cost Estimate

                                         December 23, 2009.
Hon. Joseph I. Lieberman,
Chairman, Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2868, the Federal 
Supply Schedules Usage Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 2868--Federal Supply Schedules Usage Act of 2009

    S. 2868 would amend federal law to allow the American Red 
Cross, as well as state and local governments, to use the 
federal supply schedules of the General Services Administration 
to procure goods and services from private firms for disaster 
preparedness and response activities. Because the legislation 
would codify and clarify current policy and practice, CBO 
estimates that implementing S. 2868 would have no significant 
impact on the federal budget. Enacting the bill would not 
affect direct spending or revenues. S. 2868 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would not affect the budgets 
of state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

       VII. Changes to Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 2868 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

            TITLE 40--PUBLIC BUILDINGS, PROPERTY, AND WORKS

        Subtitle I--Federal Property and Administrative Services

                     CHAPTER 5--PROPERTY MANAGEMENT

Subchapter I--Procurement and Warehousing

           *       *       *       *       *       *       *

Sec. 502. Services for other entities

    (a) * * *
    (b) * * *
    (c) * * *
    (d) Use of Supply Schedules for Certain Goods and 
Services.--
          (1) In general.--The Administrator may provide for 
        the use by State or local governments of Federal supply 
        schedules of the General Services Administration for 
        goods or services that are to be used to facilitate 
        recovery from a major disaster declared by the 
        President under the Robert T. Stafford Disaster Relief 
        and Emergency Assistance Act (42 U.S.C. 5121 et seq.), 
        to facilitate disaster preparedness or response, or to 
        facilitate recovery from terrorism or nuclear, 
        biological, chemical, or radiological attack.
        (2) * * *
        (3) * * *
        (4) * * *
    (e) Use of Supply Schedules by the Red Cross.--
          (1) In general.--The Administrator may provide for 
        the use by the American National Red Cross of Federal 
        supply schedules. Purchases under this authority shall 
        be used in furtherance of the purposes of the American 
        National Red Cross set forth in section 300102 of title 
        36, United States Code.
          (2) Limitation.--The authority under this subsection 
        may not be used to purchase supplies for resale.
    (f) Duty of Non-Federal Users Regarding Use of Federal 
Supply Schedules.--All users of Federal supply schedules, 
including non-Federal users, shall use the schedules in 
accordance with the ordering guidance provided by the 
Administrator of General Services.

                                  
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