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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4328 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4328

  To amend the Office of Federal Procurement Policy Act to reform the 
          Federal acquisition process, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 3, 1994

  Mr. Conyers (for himself and Mr. Clinger) introduced the following 
   bill; which was referred to the Committee on Government Operations

_______________________________________________________________________

                                 A BILL

 
  To amend the Office of Federal Procurement Policy Act to reform the 
          Federal acquisition process, 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.

    This Act may be cited as the ``Federal Acquisition Reform Act of 
1994''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                      TITLE I--CONTRACT FORMATION

                    Subtitle A--Competition Statutes

                    Part I--Competition Requirements

Sec. 1051. Competition requirements.
         Part II--Planning, Solicitation, Evaluation, and Award

Sec. 1061. Solicitation, evaluation, and award.
Sec. 1062. Solicitation provision regarding evaluation of purchase 
                            options.
Sec. 1063. Prompt notice of award.
Sec. 1064. Post-award debriefings.
Sec. 1065. Protest file.
Sec. 1066. Award of costs and fees in agency settlement of protests.
Sec. 1067. Award of multiple contracts.
                      Part III--Kinds of Contracts

Sec. 1071. Agency head determination regarding use of cost type or 
                            incentive contract.
Sec. 1072. Multiyear contracting authority.
Sec. 1073. Severable services contracts crossing fiscal years.
Sec. 1074. Economy Act purchases.
                         Part IV--Miscellaneous

Sec. 1091. Policy regarding consideration of contractor past 
                            performance.
Sec. 1092. Repeal of requirement for annual report on competition.
Sec. 1093. Discouragement of nonstandard contract clauses.
Sec. 1094. Repeal of obsolete provision.
                   Subtitle B--Truth in Negotiations

Sec. 1251. Provisions to ensure uniform treatment of cost or pricing 
                            data.
                    Subtitle C--Procurement Protests

              Part I--Protests to the Comptroller General

Sec. 1401. Protest defined.
Sec. 1402. Review of protests and effect on contracts pending decision.
Sec. 1403. Decisions on protests.
Sec. 1404. Regulations.
     Part II--Protests in Procurements of Automatic Data Processing

Sec. 1431. Revocation of delegations of procurement authority.
Sec. 1432. Authority of the General Services Administration Board of 
                            Contract Appeals.
Sec. 1433. Periods for certain actions.
Sec. 1434. Dismissals of protests.
Sec. 1435. Award of costs.
Sec. 1436. Dismissal agreements.
Sec. 1437. Matters to be covered in regulations.
Sec. 1438. Definitions.
Sec. 1439. Oversight of acquisition of automatic data processing 
                            equipment by Federal agencies.
               Subtitle D--Definitions and Other Matters

Sec. 1551. Definitions.
Sec. 1552. Delegation of procurement functions.
Sec. 1553. Determinations and decisions.
Sec. 1554. Research, development, and production costs.
Sec. 1555. Repeals.
Sec. 1556. Cooperative purchasing.
                   TITLE II--CONTRACT ADMINISTRATION

                      Subtitle A--Contract Payment

Sec. 2051. Contract financing.
                      Subtitle B--Cost Principles

Sec. 2151. Allowable contract costs.
Sec. 2152. Travel expenses of Government contractors.
                Subtitle C--Audit and Access to Records

Sec. 2251. Authority to examine records of contractors.
                 Subtitle D--Cost Accounting Standards

Sec. 2301. Repeal of obsolete deadline regarding procedural regulations 
                            for the Cost Accounting Standards Board.
 TITLE III--SIMPLIFIED ACQUISITION THRESHOLD AND SOCIOECONOMIC, SMALL 
                    BUSINESS, AND MISCELLANEOUS LAWS

              Subtitle A--Simplified Acquisition Threshold

                   Part I--Establishment of Threshold

Sec. 3001. Establishment of simplified acquisition threshold.
Sec. 3002. Federal acquisition computer network.
Sec. 3003. Implementation in executive agencies.
                 Part II--Simplification of Procedures

Sec. 3011. Simplified acquisition procedures.
Sec. 3012. Small business provisions.
Sec. 3013. Procedures for purchases below micro-purchase threshold.
Sec. 3014. Procurement notice.
Sec. 3015. Small business reservation.
Sec. 3016. GAO test and report on performance of simplified acquisition 
                            threshold.
     Part III--Inapplicability of Laws To, and Waiver of Laws For, 
     Acquisitions Not in Excess of Simplified Acquisition Threshold

Sec. 3021. Inapplicability of future enacted procurement laws to 
                            contracts not exceeding the simplified 
                            acquisition threshold.
Sec. 3022. Authority to waive procurement laws for contracts not 
                            exceeding the simplified acquisition 
                            threshold.
                    Part IV--Revision of Regulations

Sec. 3081. Revision required.
           Subtitle B--Socioeconomic and Small Business Laws

Sec. 3101. Payment protections for subcontractors and suppliers.
Sec. 3102. Small business procurement advisory council.
               Subtitle C--Miscellaneous Acquisition Laws

Sec. 3151. Restriction on use of noncompetitive procedures for 
                            procurement from a specified source.
Sec. 3152. Repeal of obsolete provision.
                     TITLE IV--STANDARDS OF CONDUCT

Sec. 4001. Contracting functions performed by Federal personnel.
Sec. 4002. Repeal of executed requirement for study and report.
Sec. 4003. Interests of Members of Congress.
Sec. 4004. Waiting period for significant changes proposed for 
                            acquisition regulations.
                       TITLE V--COMMERCIAL ITEMS

Sec. 5001. Definitions.
Sec. 5002. Preference for acquisition of commercial items and 
                            nondevelopmental items.
Sec. 5003. Acquisition of commercial items.
Sec. 5004. Principle of construction with future laws.
Sec. 5005. Authority to waive certain procurement laws for contracts 
                            for commercial items.
Sec. 5006. Flexible deadlines for submission of offers of commercial 
                            items.
Sec. 5007. Additional responsibilities for Advocates for Competition.
Sec. 5008. Provisions not affected.
Sec. 5009. Comptroller General review of Federal government use of 
                            market research.
                   TITLE VI--MISCELLANEOUS PROVISIONS

Sec. 6001. Test program.
Sec. 6002. Study of participation by certain small businesses in 
                            Federal procurement.
Sec. 6003. Furtherance of government-wide contract goal for small 
                            disadvantaged businesses and certain 
                            institutions of higher education.
Sec. 6004. Education and training.
Sec. 6005. Sense of Congress on negotiated rulemaking.
Sec. 6006. Vendor and employee excellence awards.
Sec. 6007. Technical and clerical amendments.
               TITLE VII--EFFECTIVE DATES AND REGULATIONS

Sec. 7001. Effective dates.
Sec. 7002. Regulations.
Sec. 7003. Evaluation by the Comptroller General.
Sec. 7004. Data collection through the Federal procurement data system.

                      TITLE I--CONTRACT FORMATION

                    Subtitle A--Competition Statutes

                    PART I--COMPETITION REQUIREMENTS

SEC. 1051. COMPETITION REQUIREMENTS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.) is amended by adding at the end the following new section:

``SEC. 29. COMPETITION REQUIREMENTS.

    ``(a)(1) Except as provided in subsections (b), (c), and (g) and 
except in the case of procurement procedures otherwise expressly 
authorized by statute, an executive agency in conducting a procurement 
for property or services--
            ``(A) shall obtain full and open competition through the 
        use of competitive procedures in accordance with the 
        requirements of this title and the Federal Acquisition 
        Regulation; and
            ``(B) shall use the competitive procedure or combination of 
        competitive procedures that is best suited under the 
        circumstances of the procurement.
    ``(2) In determining the competitive procedures appropriate under 
the circumstances, an executive agency--
            ``(A) shall solicit sealed bids if--
                    ``(i) time permits the solicitation, submission, 
                and evaluation of sealed bids;
                    ``(ii) the award will be made on the basis of price 
                and other price-related factors;
                    ``(iii) it is not necessary to conduct discussions 
                with the responding sources about their bids; and
                    ``(iv) there is a reasonable expectation of 
                receiving more than one sealed bid; and
            ``(B) shall request competitive proposals if sealed bids 
        are not appropriate under clause (A).
    ``(b)(1) An executive agency may provide for the procurement of 
property or services covered by this section using competitive 
procedures but excluding a particular source in order to establish or 
maintain any alternative source or sources of supply for that property 
or service if the agency head determines that to do so--
            ``(A) would increase or maintain competition and would 
        likely result in reduced overall costs for such procurement, or 
        for any anticipated procurement, of such property or services;
            ``(B) would be in the interest of national defense in 
        having a facility (or a producer, manufacturer, or other 
        supplier) available for furnishing the property or service in 
        case of a national emergency or industrial mobilization;
            ``(C) would be in the interest of national defense in 
        establishing or maintaining an essential engineering, research, 
        or development capability to be provided by an educational or 
        other nonprofit institution or a federally funded research and 
        development center;
            ``(D) would ensure the continuous availability of a 
        reliable source of supply of such property or service;
            ``(E) would satisfy projected needs for such property or 
        service determined on the basis of a history of high demand for 
        the property or service; or
            ``(F) in the case of medical supplies, safety supplies, or 
        emergency supplies, would satisfy a critical need for such 
        supplies.
    ``(2) The determination required of the agency head in paragraph 
(1) may not be made for a class of purchases or contracts.
    ``(3) An executive agency may provide for the procurement of 
property or services covered by this section using competitive 
procedures, but excluding other than small business concerns in 
furtherance of sections 9 and 15 of the Small Business Act (15 U.S.C. 
639; 644).
    ``(4) A contract awarded pursuant to the competitive procedures 
referred to in paragraphs (1) and (3) shall not be subject to the 
justification and approval required by subsection (f)(1).
    ``(c) An executive agency may use procedures other than competitive 
procedures only when--
            ``(1) the property or services needed by the executive 
        agency are available from only one responsible source and no 
        other type of property or services will satisfy the needs of 
        the executive agency;
            ``(2) the executive agency's need for the property or 
        services is of such an unusual and compelling urgency that the 
        Government would be seriously injured unless the executive 
        agency is permitted to limit the number of sources from which 
        it solicits bids or proposals;
            ``(3) it is necessary to award the contract to a particular 
        source or sources in order (A) to maintain a facility, 
        producer, manufacturer, or other supplier available for 
        furnishing property or services in case of a national emergency 
        or to achieve industrial mobilization, or (B) to establish or 
        maintain an essential engineering, research, or development 
        capability to be provided by an educational or other nonprofit 
        institution or a federally funded research and development 
        center;
            ``(4) the terms of an international agreement or treaty 
        between the United States Government and a foreign government 
        or international organization, or the written directions of a 
        foreign government reimbursing the executive agency for the 
        cost of the procurement of the property or services for such 
        government, have the effect of requiring the use of procedures 
        other than competitive procedures;
            ``(5) a statute expressly authorizes or requires that the 
        procurement be made through another executive agency or from a 
        specified source, or the agency's need is for a brand-name 
        commercial item for authorized resale;
            ``(6) the disclosure of the executive agency's needs would 
        compromise the national security unless the agency is permitted 
        to limit the number of sources from which it solicits bids or 
        proposals; or
            ``(7) the head of the executive agency--
                    ``(A) determines that it is necessary in the public 
                interest to use procedures other than competitive 
                procedures in the particular procurement concerned, and
                    ``(B) notifies the Congress in writing of such 
                determination not less than 30 days before the award of 
                the contract.
    ``(d)(1) For the purposes of applying subsection (c)(1)--
            ``(A) in the case of a contract for property or services to 
        be awarded on the basis of acceptance of an unsolicited 
        research proposal, the property or services shall be considered 
        to be available from only one source if the source has 
        submitted an unsolicited research proposal that demonstrates a 
        unique and innovative concept the substance of which is not 
        otherwise available to the United States and does not resemble 
        the substance of a pending competitive procurement; and
            ``(B) in the case of a follow-on contract for the continued 
        development or production of a major system or highly 
        specialized equipment when it is likely that award to a source 
        other than the original source would result in (i) substantial 
        duplication of cost to the Government which is not expected to 
        be recovered through competition, or (ii) unacceptable delays 
        in fulfilling the executive agency's needs, such property may 
        be deemed to be available only from the original source and may 
        be procured through procedures other than competitive 
        procedures.
    ``(2) The authority of the head of an executive agency under 
subsection (c)(7) may not be delegated.
    ``(e) An executive agency using procedures other than competitive 
procedures to procure property or services by reason of the application 
of subsection (c)(2) or (c)(6) shall request offers from as many 
potential sources as is practicable under the circumstances.
    ``(f)(1) Except as provided in paragraph (2), an executive agency 
may not award a contract using procedures other than competitive 
procedures unless--
            ``(A) the contracting officer for the contract justifies 
        the use of such procedures in writing and certifies the 
        accuracy and completeness of the justification;
            ``(B) the justification is approved--
                    ``(i) in the case of a contract for an amount 
                exceeding $100,000 (but equal to or less than 
                $1,000,000), by the competition advocate for the 
                procuring activity (without further delegation) or by 
                an official referred to in clause (ii), (iii), or (iv);
                    ``(ii) in the case of a contract for an amount 
                exceeding $1,000,000 (but equal to or less than 
                $10,000,000), by the head of the procuring activity or 
                a delegate who, if a member of the armed forces, is a 
                general or flag officer or, if a civilian; is serving 
                in a position in grade GS-16 or above under the General 
                Schedule (or in a comparable or higher position under 
                another schedule); or
                    ``(iii) in the case of a contract for an amount 
                exceeding $10,000,000, by the senior procurement 
                executive of the agency designated pursuant to section 
                16(3) (without further delegation); and
            ``(C) any required notice has been published with respect 
        to such contract pursuant to section 18 and all bids or 
        proposals received in response to such notice have been 
        considered by such executive agency.
    ``(2) In the case of a procurement permitted by subsection (c)(2), 
the justification and approval required by paragraph (1) may be made 
after the contract is awarded. The justification and approval required 
by paragraph (1) is not required--
            ``(A) when a statute expressly requires that the 
        procurement be made from a specified source;
            ``(B) when the agency's need is for a brand-name commercial 
        item for authorized resale;
            ``(C) in the case of a procurement permitted by subsection 
        (c)(7); or
            ``(D) in the case of a procurement conducted under (i) the 
        Act of June 25, 1938 (41 U.S.C. 46 et seq.), popularly referred 
        to as the Wagner-O'Day Act, or (ii) section 8(a) of the Small 
        Business Act (15 U.S.C. 637(a)).
    ``(3) The justification required by paragraph (1)(A) shall 
include--
            ``(A) a description of the agency's needs;
            ``(B) an identification of the statutory exception from the 
        requirement to use competitive procedures and a demonstration, 
        based on the proposed contractor's qualifications or the nature 
        of the procurement, of the reasons for using that exception;
            ``(C) a determination that the anticipated cost will be 
        fair and reasonable;
            ``(D) a description of the market survey conducted or a 
        statement of the reasons a market survey was not conducted;
            ``(E) a listing of the sources, if any, that expressed in 
        writing an interest in the procurement; and
            ``(F) a statement of the actions, if any, the agency may 
        take to remove or overcome a barrier to competition before a 
        subsequent procurement for such needs.
    ``(4) The justification required by paragraph (1)(A) and any 
related information shall be made available for inspection by the 
public consistent with the provisions of section 552 of title 5, United 
States Code.
    ``(5) In no case may an executive agency--
            ``(A) enter into a contract for property or services using 
        procedures other than competitive procedures on the basis of 
        the lack of advance planning or concerns related to the amount 
        of funds available to the agency for procurement functions; or
            ``(B) procure property or services from another executive 
        agency unless such other executive agency complies fully with 
        the requirements of this title in its procurement of such 
        property or services.
The restriction set out in clause (B) is in addition to, and not in 
lieu of any other restriction provided by law.
    ``(g)(1) In order to promote efficiency and economy in contracting 
and to avoid unnecessary burdens for agencies and contractors, the 
Federal Acquisition Regulation shall provide for special simplified 
procedures for small purchases of property and services.
    ``(2) For the purposes of this title, a small purchase is a 
purchase or contract for an amount which does not exceed the small 
purchase threshold.
    ``(3) A proposed purchase or contract for an amount above the small 
purchase threshold may not be divided into several purchases or 
contracts for lesser amounts in order to use the small purchase 
procedures required by paragraph (1).
    ``(4) In using small purchase procedures, an executive agency shall 
promote competition to the maximum extent practicable.
    ``(5) In this subsection, the term `small purchase threshold' has 
the meaning given such term in section 4(11) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403(11).''.

         PART II--PLANNING, SOLICITATION, EVALUATION, AND AWARD

SEC. 1061. SOLICITATION, EVALUATION, AND AWARD.

    (a) Content of Solicitation.--The Office of Federal Procurement 
Policy Act (41 U.S.C. 401 et seq.), as amended by section 1051, is 
further amended by adding at the end the following new section:

``SEC. 30. PLANNING AND SOLICITATION REQUIREMENTS.

    ``(a)(1) In preparing for the procurement of property or services, 
an executive agency shall--
            ``(A) specify its needs and solicit bids or proposals in a 
        manner designed to achieve full and open competition for the 
        procurement;
            ``(B) use advance procurement planning and market research; 
        and
            ``(C) develop specifications in such manner as is necessary 
        to obtain full and open competition with due regard to the 
        nature of the property or services to be acquired.
    ``(2) Each solicitation under this title shall include 
specifications which--
            ``(A) consistent with the provisions of this title, permit 
        full and open competition; and
            ``(B) include restrictive provisions or conditions only to 
        the extent necessary to satisfy the needs of the executive 
        agency or as authorized by law.
    ``(3) For the purposes of paragraphs (1) and (2), the type of 
specification included in a solicitation shall depend on the nature of 
the needs of the executive agency and the market available to satisfy 
such needs. Subject to such needs, specifications may be stated in 
terms of--
            ``(A) function, so that a variety of products or services 
        may qualify;
            ``(B) performance, including specifications of the range of 
        acceptable characteristics or of the minimum acceptable 
        standards; or
            ``(C) design requirements.
    ``(b) In addition to the specifications described in subsection 
(a), each solicitation for sealed bids or competitive proposals (other 
than for small purchases) shall at a minimum include--
            ``(1) a statement of--
                    ``(A) all significant factors and significant 
                subfactors (including cost or price, cost-related or 
                price-related factors and subfactors, and noncost-
                related or nonprice-related factors and subfactors) 
                which the executive agency reasonably expects to 
                consider in evaluating sealed bids or competitive 
                proposals; and
                    ``(B) the relative importance assigned to each of 
                those factors and subfactors; and
            ``(2)(A) in the case of sealed bids--
                    ``(i) a statement that sealed bids will be 
                evaluated without discussions with the bidders; and
                    ``(ii) the time and place for the opening of the 
                sealed bids; or
            ``(B) in the case of competitive proposals--
                            ``(i) either a statement that the proposals 
                        are intended to be evaluated with, and award 
                        made after, discussions with the offerors, or a 
                        statement that the proposals are intended to be 
                        evaluated, and award made, without discussions 
                        with the offerors (other than discussions 
                        conducted for the purpose of minor 
                        clarification) unless discussions are 
                        determined to be necessary; and
                    ``(ii) the time and place for submission of 
                proposals.
    ``(c)(1) In prescribing the evaluation factors to be included in 
each solicitation for competitive proposals, an agency head--
            ``(A) shall clearly establish the relative importance 
        assigned to the evaluation factors and subfactors, including 
        the quality of the product or services to be provided 
        (including technical capability, management capability, prior 
        experience, and past performance of the offeror);
            ``(B) shall include cost or price to the Federal Government 
        as an evaluation factor that must be considered in the 
        evaluation of proposals; and
            ``(C) shall disclose to offerors whether all evaluation 
        factors other than price or cost, when combined, are--
                    ``(i) significantly more important than price or 
                cost;
                    ``(ii) approximately equal in importance to price 
                or cost; or
                    ``(iii) significantly less important than price or 
                cost.
    ``(2) Nothing in this subsection prohibits an agency from--
            ``(A) providing additional information in a solicitation, 
        including numeric weights for all evaluation factors; or
            ``(B) stating in a solicitation that award will be made to 
        the offeror that meets the solicitation's mandatory 
        requirements at the lowest price or cost.''.
    (b) Evaluation and Award.--The Office of Federal Procurement Policy 
Act (41 U.S.C. 401 et seq.), as amended by subsection (a), is further 
amended by adding at the end the following new section:

``SEC. 31. EVALUATION AND AWARD.

    ``(a) An executive agency shall evaluate sealed bids and 
competitive proposals, and award a contract, based solely on the 
factors specified in the solicitation.
    ``(b) All sealed bids or competitive proposals received in response 
to a solicitation may be rejected if the agency head determines that 
such action is in the public interest.
    ``(c) Sealed bids shall be opened publicly at the time and place 
stated in the solicitation. The executive agency shall evaluate the 
bids in accordance with subsection (a) without discussions with the 
bidders and, except as provided in subsection (b), shall award a 
contract with reasonable promptness to the responsible source whose bid 
conforms to the solicitation and is most advantageous to the United 
States, considering only price and the other price-related factors 
included in the solicitation. The award of a contract shall be made by 
transmitting written notice of the award to the successful bidder.
    ``(d)(1) An agency head shall evaluate competitive proposals in 
accordance with subsection (a) and may award a contract--
            ``(A) after discussions with the offerors, provided that 
        written or oral discussions have been conducted with all 
        responsible offerors who submit proposals within the 
        competitive range; or
            ``(B) based on the proposals received and without 
        discussions with the offerors (other than discussions conducted 
        for the purpose of minor clarification), provided that, as 
        required by section 30(b)(2)(B)(i), the solicitation included a 
        statement that proposals are intended to be evaluated, and 
        award made, without discussions, unless discussions are 
        determined to be necessary.
    ``(2) Except as otherwise provided in subsection (b), the executive 
agency shall award a contract with reasonable promptness to the 
responsible source whose proposal is most advantageous to the United 
States, considering only cost or price and the other factors included 
in the solicitation. The executive agency shall award the contract by 
transmitting written notice of the award to such source and shall 
promptly notify all other offerors of the rejection of their proposals.
    ``(e) If the agency head considers that a bid or proposal evidences 
a violation of the antitrust laws, such agency head shall refer the bid 
or proposal to the Attorney General for appropriate action.
    ``(f)(1)(A) In preparing a solicitation for the award of a 
development contract for a major system, the head of an agency shall 
consider requiring in the solicitation that an offeror include in its 
offer proposals described in subparagraph (B). In determining whether 
to require such proposals, the head of the agency shall give due 
consideration to the purposes for which the system is being procured 
and the technology necessary to meet the system's required 
capabilities. If such proposals are required, the head of the agency 
shall consider them in evaluating the offeror's price.
    ``(B) The proposals that the head of an agency is to consider 
requiring in a solicitation for the award of a development contract are 
the following:
            ``(i) Proposals to incorporate in the design of the major 
        system items which are currently available within the supply 
        system of the Federal agency responsible for the major system, 
        available elsewhere in the national supply system, or 
        commercially available from more than one source.
            ``(ii) With respect to items that are likely to be required 
        in substantial quantities during the system's service life, 
        proposals to incorporate in the design of the major system 
        items which the United States will be able to acquire 
        competitively in the future.
    ``(2)(A) In preparing a solicitation for the award of a production 
contract for a major system, the head of an agency shall consider 
requiring in the solicitation that an offeror include in its offer 
proposals described in subparagraph (B). In determining whether to 
require such proposals, the head of the agency shall give due 
consideration to the purposes for which the system is being procured 
and the technology necessary to meet the system's required 
capabilities. If such proposals are required, the head of the agency 
shall consider them in evaluating the offeror's price.
    ``(B) The proposals that the head of an agency is to consider 
requiring in a solicitation for the award of a production contract are 
proposals identifying opportunities to ensure that the United States 
will be able to obtain on a competitive basis items procured in 
connection with the system that are likely to be reprocured in 
substantial quantities during the service life of the system. Proposals 
submitted in response to such requirement may include the following:
            ``(i) Proposals to provide to the United States the right 
        to use technical data to be provided under the contract for 
        competitive reprocurement of the item, together with cost to 
        the United States, if any, of acquiring such technical data and 
        the right to use such data.
            ``(ii) Proposals for the qualification or development of 
        multiple sources of supply for the item.
    ``(3) If the head of an agency is making a noncompetitive award of 
a development contract or a production contract for a major system, the 
factors specified in paragraphs (1) and (2) to be considered in 
evaluating an offer for a contract may be considered as objectives in 
negotiating the contract to be awarded.''.
    (c) Applicability.--
            (1) In general.--Except as provided in paragraph (2), 
        sections 30 and 31 of the Office of Federal Procurement Policy 
        Act, as added by subsections (a) and (b), shall apply to--
                    (A) solicitations for sealed bids or competitive 
                proposals issued after the end of the 180-day period 
                beginning on the date of the enactment of this Act; and
                    (B) contracts awarded pursuant to those 
                solicitations.
            (2) Authority to apply amendments early.--The head of an 
        executive agency may apply sections 30 and 31 of the Office of 
        Federal Procurement Policy Act to solicitations issued before 
        the end of the period referred to in paragraph (1). The head of 
        the executive agency shall publish in the Federal Register 
        notice of any such earlier date of application at least 10 days 
        before that date.
    (d) Standards and Requirements for Cost And Price as Evaluation 
Factors.--
            (1) In general.--The Federal Acquisition Regulation, as 
        revised pursuant to section 7002, shall establish standards and 
        requirements for the consideration of cost and price to the 
        Federal Government as evaluation factors under section 30(c) of 
        the Office of Federal Procurement Policy Act, as added by 
        subsection (a).
            (2) Standards and requirements.--Standards and requirements 
        established under subsection (a) shall be adequate to ensure 
        that, to the maximum extent practicable consistent with the 
        needs of the Federal Government in conducting procurements--
                    (A) cost or price is an evaluation factor of 
                sufficient weight to affect each source selection 
                decision; and
                    (B) competition among competing offerors is 
                affected by cost or price.

SEC. 1062. SOLICITATION PROVISION REGARDING EVALUATION OF PURCHASE 
              OPTIONS.

    Section 30 of the Office of Federal Procurement Policy Act, as 
added by section 1061(a), is amended by adding at the end the following 
new subsection:
    ``(d) An agency head, in issuing a solicitation for a contract to 
be awarded using sealed bid procedures, may not include in such 
solicitation a clause providing for the evaluation of prices under the 
contract for options to purchase additional supplies or services under 
the contract unless the agency head has determined that there is a 
reasonable likelihood that the options will be exercised.''.

SEC. 1063. PROMPT NOTICE OF AWARD.

    (a) Sealed Bid Procedures.--Subsection (c) of section 31 of the 
Office of Federal Procurement Policy Act, as added by section 1061(b), 
is amended by adding at the end the following: ``Within 3 days after 
the date of contract award, the agency head shall notify, in writing or 
by electronic means, offerors not awarded the contract that the 
contract has been awarded.''.
    (b) Competitive Proposals Procedures.--Paragraph (2) of subsection 
(d) of such section is amended in the second sentence by striking out 
``shall promptly notify'' and inserting in lieu thereof ``, within 3 
days after the date of contract award, shall notify, in writing or by 
electronic means,''.

SEC. 1064. POST-AWARD DEBRIEFINGS.

    Section 31 of the Office of Federal Procurement Policy Act, as 
added by section 1061(b), is amended--
            (1) by redesignating subsections (e) and (f) as subsections 
        (f) and (g), respectively; and
            (2) by inserting after subsection (d) the following new 
        subsection (e):
    ``(e)(1) When a contract is awarded by an executive agency on the 
basis of competitive proposals, an unsuccessful offeror, upon written 
request received by the executive agency within 3 days after the date 
of receipt of notification of the contract award, shall be debriefed 
and furnished the basis for the selection decision and contract award. 
An employee of the executive agency shall debrief the offeror within 5 
days after receipt of the request by the executive agency.
    ``(2) The debriefing shall include, at a minimum--
            ``(A) the executive agency's evaluation of the significant 
        weak or deficient factors in the offeror's offer;
            ``(B) the overall evaluated cost of the offer of the 
        contractor awarded the contract and the overall evaluated cost 
        of the offer of the debriefed offeror;
            ``(C) the overall ranking of all offers and the total 
        technical and cost scores of all offers;
            ``(D) a summary of the rationale for the award;
            ``(E) in the case of a proposal that incorporates equipment 
        that is a commercial item, the make and model of the item 
        incorporated in the offer of the contractor awarded the 
        contract; and
            ``(F) reasonable responses to questions posed by the 
        debriefed offeror as to whether source selection procedures set 
        forth in the solicitation, applicable regulations, and other 
        applicable authorities were followed by the executive agency.
    ``(3) The debriefing may not include point-by-point comparisons of 
the debriefed offeror's offer with other offers and may not disclose 
any information that is exempt from disclosure under section 552 of 
title 5, United States Code, including information relating to--
            ``(A) trade secrets;
            ``(B) privileged or confidential manufacturing processes 
        and techniques; and
            ``(C) commercial and financial information that is 
        privileged or confidential, including cost breakdowns, profit, 
        indirect cost rates, and similar information.
    ``(4) Each solicitation for competitive proposals shall include a 
statement that information described in paragraph (2) may be disclosed 
in post-award debriefings.
    ``(5) If, within one year after the date of the contract award and 
as a result of a successful procurement protest or otherwise, the 
executive agency seeks to fulfill same the requirement under the 
contract either on the basis of a new solicitation of offers or on the 
basis of new best and final offers requested for that contract, the 
agency head shall make available to offerors--
            ``(A) the information provided in debriefings under this 
        subsection regarding the offer of the contractor awarded the 
        contract; and
            ``(B) the comparable debriefing information that was 
        prepared with respect to the original offerors.
    ``(6) The contracting officer shall include a summary of the 
debriefing in the contract file.''.

SEC. 1065. PROTEST FILE.

    Section 31 of the Office of Federal Procurement Policy Act, as 
amended by section 1064(1), is further amended by adding at the end the 
following:
    ``(h)(1) If, in the case of a solicitation for a contract issued 
by, or an award or proposed award of a contract by, an agency head, a 
protest is filed pursuant to the procedures in subchapter V of chapter 
35 of title 31, United States Code, and an actual or prospective 
offeror so requests, a file of the protest shall be established by the 
procuring activity and reasonable access shall be provided to actual or 
prospective offerors.
    ``(2) Information exempt from disclosure under section 552 of title 
5, United States Code, may be redacted in a file established pursuant 
to paragraph (1) unless an applicable protective order provides 
otherwise.
    ``(3) Regulations implementing this subsection shall be consistent 
with the regulations regarding the preparation and submission of an 
agency's protest file (the so-called `rule 4 file') for protests to the 
General Services Board of Contract Appeals under section 111 of the 
Federal Property and Administrative Services Act of 1949 (41 U.S.C. 
759).''.

SEC. 1066. AWARD OF COSTS AND FEES IN AGENCY SETTLEMENT OF PROTESTS.

    Section 31 of the Office of Federal Procurement Policy Act, as 
amended by section 1065, is further amended by adding at the end the 
following new subsection:
    ``(i) If, in connection with a protest, an agency head determines 
that a solicitation, proposed award, or award does not comply with the 
requirements of law or regulation, the agency head may take--
            ``(1) any action set out in subparagraphs (A) through (F) 
        of subsection (b)(1) of section 3554 of title 31, United States 
        Code; and
            ``(2) may pay costs described in paragraph (1) of section 
        3554(c) of such title.''.

SEC. 1067. AWARD OF MULTIPLE CONTRACTS.

    Section 31 of the Office of Federal Procurement Policy Act, as 
amended by section 1066, is further amended by adding at the end the 
following new subsection:
    ``(j) Award of Multiple Contracts.--In procuring any supply or 
service using competitive procedures, an executive agency may award 
more than one contract for the same supply or service in any case in 
which the head of the agency determines that it is in the best 
interests of the Federal Government to award those contracts for the 
purpose of maintaining a continuous source for the supply or 
service.''.

                      PART III--KINDS OF CONTRACTS

SEC. 1071. AGENCY HEAD DETERMINATION REGARDING USE OF COST TYPE OR 
              INCENTIVE CONTRACT.

    Section 304(b) of the Federal Property and Administrative Services 
Act of 1949 (41 U.S.C. 254(b)) is amended by striking out the second 
sentence.

SEC. 1072. MULTIYEAR CONTRACTING AUTHORITY.

    (a) In General.--Title III of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) is amended 
by inserting after section 303G the following new section:

``SEC. 303H. MULTIYEAR CONTRACTS.

    ``(a) Authority.--The head of an executive agency may enter into a 
multiyear contract for the acquisition of property or services if--
            ``(1) funds are available and obligated for such contract, 
        for the full period of the contract or for the first fiscal 
        year in which the contract is in effect, and for the estimated 
        costs associated with any necessary termination of such 
        contract;
            ``(2) the agency head determines that--
                    ``(A) the need for the property or services is 
                reasonably firm and continuing over the period of the 
                contract; and
                    ``(B) a multiyear contract will serve the best 
                interests of the United States by encouraging full and 
                open competition or promoting economy in 
                administration, performance, and operation of the 
                agency's programs; and
            ``(3) such contract is awarded on a fully competitive 
        basis.
    ``(b) Termination Clause.--A multiyear contract entered into under 
the authority of this section shall include a clause that provides that 
the contract shall be terminated if funds are not made available for 
the continuation of such contract in any fiscal year covered by the 
contract. Amounts available for paying termination costs shall remain 
available for such purpose until the costs associated with termination 
of the contract are paid.
    ``(c) Cancellation Ceiling Notice.--Before any contract described 
in subsection (a) that contains a clause setting forth a cancellation 
ceiling in excess of $10,000,000 may be awarded, the head of the agency 
shall give written notification of the proposed contract and of the 
proposed cancellation ceiling for that contract to the Congress, and 
such contract may not then be awarded until the end of a period of 30 
days beginning on the date of such notification.
    ``(d) Multiyear Contract Defined.--For the purposes of this 
section, a multiyear contract is a contract for the purchase of 
property or services for more than one, but not more than five, program 
years. Such a contract may provide that performance under the contract 
during the second and subsequent years of the contract is contingent 
upon the appropriation of funds and (if it does so provide) may provide 
for a cancellation payment to be made to the contractor if such 
appropriations are not made.
    ``(e) Rule of Construction.--Nothing in this section is intended to 
modify or affect any other provision of law that authorizes multiyear 
contracts.''.
    (b) Clerical Amendment.--The first section of such Act is amended 
by inserting after the item relating to section 303G in the table of 
contents the following new item:

``Sec. 303H. Multiyear contracts.''.

SEC. 1073. SEVERABLE SERVICES CONTRACTS CROSSING FISCAL YEARS.

    (a) In General.--Title III of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.), as amended 
by section 1072, is further amended by inserting after section 303H the 
following new section:

``SEC. 303I. SEVERABLE SERVICES CONTRACTS FOR PERIODS CROSSING FISCAL 
              YEARS.

    ``(a) Authority.--The head of an executive agency may enter into a 
severable contract for procurement of services for a period that begins 
in one fiscal year and ends in the next fiscal year if (without regard 
to any option to extend the period of the contract) the contract period 
does not exceed one year.
    ``(b) Availability of Funds.--To the extent provided in 
appropriations Acts, funds obligated for a contract entered into under 
the authority of subsection (a) shall remain available until no longer 
needed to pay for such contract.
    ``(c) Severable Contract Defined.--In this section, the term 
`severable contract' means a contract that contains a clause that makes 
the effectiveness of the contract for periods after the end of the 
fiscal year in which the performance of the contract begins subject to 
the availability of appropriations.''.
    (b) Clerical Amendment.--The first section of such Act is amended 
by inserting after the item relating to section 303H in the table of 
contents the following new item:

``Sec. 303I. Severable services contracts for periods crossing fiscal 
                            years.''.

SEC. 1074. ECONOMY ACT PURCHASES.

    (a) Regulations Required.--Not later than six months after the date 
of the enactment of this Act, the Federal Acquisition Regulation shall 
be revised to include regulations governing the exercise of the 
authority under section 1535 of title 31, United States Code, for 
Federal agencies to purchase goods and services under contracts entered 
into or administered by other agencies.
    (b) Content of Regulations.--The regulations prescribed pursuant to 
subsection (a) shall--
            (1) require that each purchase described in subsection (a) 
        be approved in advance by a contracting officer of the ordering 
        agency with authority to contract for the goods or services to 
        be purchased or by another official in a position specifically 
        designated by regulation to approve such purchase;
            (2) provide that such a purchase of goods or services may 
        be made only if--
                    (A) the purchase is appropriately made under a 
                contract that the agency filling the purchase order 
                entered into, before the purchase order, in order to 
                meet the requirements of such agency for the same or 
                similar goods or services;
                    (B) the agency filling the purchase order is better 
                qualified to enter into or administer the contract for 
                such goods or services by reason of capabilities or 
                expertise that is not available within the ordering 
                agency; or
                    (C) the agency or unit filling the order is 
                specifically authorized by law or regulations to 
                purchase such goods or services on behalf of other 
                agencies;
            (3) prohibit any such purchase under a contract or other 
        agreement entered into or administered by an agency not covered 
        by the Federal Acquisition Regulation unless the purchase is 
        approved in advance by the senior procurement official 
        responsible for purchasing by the ordering agency; and
            (4) prohibit any payment to the agency filling a purchase 
        order of any fee that exceeds the actual cost or, if the actual 
        cost is not known, the estimated cost of entering into and 
        administering the contract or other agreement under which the 
        order is filled.
    (c) Monitoring System Required.--The Administrator for Federal 
Procurement Policy shall ensure that, not later than one year after the 
date of the enactment of this Act, systems for collecting and 
evaluating procurement data are capable of collecting and evaluating 
appropriate data on procurements conducted under the regulations 
prescribed pursuant to subsection (a).
    (d) Termination.--This section shall cease to be effective one year 
after the date on which final regulations prescribed pursuant to 
subsection (a) take effect.

                         PART IV--MISCELLANEOUS

SEC. 1091. POLICY REGARDING CONSIDERATION OF CONTRACTOR PAST 
              PERFORMANCE.

    (a) Policy.--Section 2 of the Office of Federal Procurement Policy 
Act (41 U.S.C. 401) is amended--
            (1) by striking out ``and'' at the end of paragraph (12);
            (2) by striking out the period at the end of paragraph (13) 
        and inserting in lieu thereof ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(14) establishing policies and procedures that encourage 
        the consideration of contractors' past performance in the 
        selection of contractors.''.
    (b) Guidance Required.--Section 6 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 405) is amended by adding at the end 
the following:
    ``(j)(1) Congress makes the following findings:
            ``(A) Past contract performance of an offeror is one of the 
        relevant factors that contracting officials of executive 
        agencies should consider in entering into contracts.
            ``(B) It is appropriate for a contracting official to 
        consider past contract performance of an offeror as an 
        indicator of the likelihood that the offeror will successfully 
        perform a contract to be entered into by that official.
    ``(2) The Administrator shall prescribe for executive agencies 
guidance regarding consideration of the past contract performance of 
offerors in awarding contracts. The guidance shall include--
            ``(A) standards for evaluating past performance with 
        respect to cost (when appropriate), schedule, compliance with 
        technical or functional specifications, and other relevant 
        performance factors that facilitate consistent and fair 
        evaluation by all executive agencies;
            ``(B) policies for the collection and maintenance of 
        information on past contract performance that, to the maximum 
        extent practicable, facilitate automated collection, 
        maintenance, and dissemination of information and provide for 
        ease of collection, maintenance, and dissemination of 
        information by other methods, as necessary; and
            ``(C) policies for ensuring that offerors are afforded an 
        opportunity to submit information on past contract performance 
        and that information submitted by offerors is considered.
    ``(3) The Administrator shall prescribe for all executive agencies 
the policy regarding the period for which information on past 
performance of offerors may be maintained and considered.
    ``(4) In the case of an offeror regarding whom there is no 
information on past contract performance or regarding whom information 
on past contract performance is not available, the offeror may not be 
evaluated favorably or unfavorably on the factor of past contract 
performance.''.

SEC. 1092. REPEAL OF REQUIREMENT FOR ANNUAL REPORT ON COMPETITION.

    Section 23 of the Office of Federal Procurement Policy Act (41 
U.S.C. 419) is repealed.

SEC. 1093. DISCOURAGEMENT OF NONSTANDARD CONTRACT CLAUSES.

    Section 31 of the Office of Federal Procurement Policy Act, as 
amended by section 1067, is further amended by adding at the end the 
following new subsection:
    ``(k) Nonstandard Contract Clauses.--The Federal Acquisition 
Regulatory Council shall promulgate regulations to discourage the use 
of a nonstandard contract clause on a repetitive basis. The regulations 
shall include provisions that--
            ``(1) clearly define nonstandard clauses; and
            ``(2) require prior approval for the use of a nonstandard 
        clause on a repetitive basis by an official at a level of 
        responsibility above the contracting officer.''.

SEC. 1094. REPEAL OF OBSOLETE PROVISION.

    (a) Repeal.--Section 303E of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 253e) is repealed.
    (b) Clerical Amendment.--The table of contents in the first section 
of such Act is amended by striking out the item relating to section 
303E.

                   Subtitle B--Truth in Negotiations

SEC. 1251. PROVISIONS TO ENSURE UNIFORM TREATMENT OF COST OR PRICING 
              DATA.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 1061, is further amended by adding after 
section 31 the following new section:

``SEC. 32. COST OR PRICING DATA: TRUTH IN NEGOTIATIONS.

    ``(a) Required Cost or Pricing Data and Certification.--(1) An 
agency head shall require offerors, contractors, and subcontractors to 
make cost or pricing data available as follows:
            ``(A) An offeror for a prime contract under this title to 
        be entered into using procedures other than sealed-bid 
        procedures shall be required to submit cost or pricing data 
        before the award of a contract if--
                    ``(i) in the case of a prime contract entered into 
                after the date of the enactment of the Federal 
                Acquisition Improvement Act of 1994, the price of the 
                contract to the United States is expected to exceed 
                $500,000; and
                    ``(ii) in the case of a prime contract entered into 
                on or before the date of the enactment of the Federal 
                Acquisition Improvement Act of 1994, the price of the 
                contract to the United States is expected to exceed 
                $100,000.
            ``(B) The contractor for a prime contract under this 
        chapter shall be required to submit cost or pricing data before 
        the pricing of a change or modification to the contract if--
                    ``(i) in the case of a change or modification made 
                to a prime contract referred to in subparagraph (A)(i), 
                the price adjustment is expected to exceed $500,000;
                    ``(ii) in the case of a change or modification made 
                to a prime contract that was entered into on or before 
                the date of the enactment of the Federal Acquisition 
                Improvement Act of 1994, and that has been modified 
                pursuant to paragraph (6), the price adjustment is 
                expected to exceed $500,000; and
                    ``(iii) in the case of a change or modification not 
                covered by clause (i) or (ii), the price adjustment is 
                expected to exceed $100,000.
            ``(C) An offeror for a subcontract (at any tier) of a 
        contract under this title shall be required to submit cost or 
        pricing data before the award of the subcontract if the prime 
        contractor and each higher-tier subcontractor have been 
        required to make available cost or pricing data under this 
        section and--
                    ``(i) in the case of a subcontract under a prime 
                contract referred to in subparagraph (A)(i), the price 
                of the subcontract is expected to exceed $500,000;
                    ``(ii) in the case of a subcontract entered into 
                under a prime contract that was entered into on or 
                before the date of the enactment of the Federal 
                Acquisition Improvement Act of 1994, and that has been 
                modified pursuant to paragraph (6), the price of the 
                subcontract is expected to exceed $500,000; and
                    ``(iii) in the case of a subcontract not covered by 
                clause (i) or (ii), the price of the subcontract is 
                expected to exceed $100,000.
            ``(D) The subcontractor for a subcontract covered by 
        subparagraph (C) shall be required to submit cost or pricing 
        data before the pricing of a change or modification to the 
        subcontract if--
                    ``(i) in the case of a change or modification to a 
                subcontract referred to in subparagraph (C)(i) or 
                (C)(ii), the price adjustment is expected to exceed 
                $500,000; and
                    ``(ii) in the case of a change or modification to a 
                subcontract referred to in subparagraph (C)(iii), the 
                price adjustment is expected to exceed $100,000.
    ``(2) A person required, as an offeror, contractor, or 
subcontractor, to submit cost or pricing data under paragraph (1) (or 
required by the head of the procuring activity concerned to submit such 
data under subsection (c)) shall be required to certify that, to the 
best of the person's knowledge and belief, the cost or pricing data 
submitted are accurate, complete, and current.
    ``(3) Cost or pricing data required to be submitted under paragraph 
(1) (or under subsection (c)), and a certification required to be 
submitted under paragraph (2), shall be submitted--
            ``(A) in the case of a submission by a prime contractor (or 
        an offeror for a prime contract), to the contracting officer 
        for the contract (or to a designated representative of the 
        contracting officer); or
            ``(B) in the case of a submission by a subcontractor (or an 
        offeror for a subcontract), to the prime contractor.
    ``(4) Except as provided under subsection (b), this section applies 
to contracts entered into by an agency head on behalf of a foreign 
government.
    ``(5) For purposes of paragraph (1)(C), a contractor or 
subcontractor granted a waiver under subsection (b)(2) shall be 
considered as having been required to make available cost or pricing 
data under this section.
    ``(6) Upon the request of a contractor that was required to submit 
cost or pricing data under paragraph (1) in connection with a prime 
contract entered into on or before the date of the enactment of the 
Federal Acquisition Improvement Act of 1994, the agency head that 
entered into such contract shall modify the contract to reflect 
subparagraphs (B)(ii) and (C)(ii) of paragraph (1). All such 
modifications shall be made without requiring consideration.
    ``(7) Effective on October 1 of each year that is divisible by 5, 
each amount set forth in paragraph (1) shall be adjusted to the amount 
that is equal to the fiscal year 1994 constant dollar value of the 
amount set forth. Any amount, as so adjusted, that is not evenly 
divisible by $50,000 shall be rounded to the nearest multiple of 
$50,000. In the case of an amount that is evenly divisible by $25,000 
but not evenly divisible by $50,000, the amount shall be rounded to the 
next higher multiple of $50,000.
    ``(b) Exceptions.--(1) Submission of cost and pricing data shall 
not be required under subsection (a)--
            ``(A) in the case of a contract, a subcontract, or a 
        contract or subcontract modification, for which the price 
        agreed upon is based on--
                    ``(i) adequate price competition;
                    ``(ii) established catalog or market prices of 
                commercial items or of services regularly used for 
                other than Government purposes, as the case may be, 
                that are sold in substantial quantities to the general 
                public; or
                    ``(iii) prices set by law or regulation; or
            ``(B) in an exceptional case when the head of the procuring 
        activity, without delegation, determines that the requirements 
        of this section may be waived, justifies in writing the reasons 
        for such determination, and certifies the accuracy and 
        completeness of the justification.
    ``(2) The Federal Acquisition Regulation (issued under section 
25(c)) shall provide clear standards for determining whether the 
exceptions provided in paragraph (1)(A) apply. In the case of the 
exception provided in paragraph (1)(A)(i), the regulations shall 
specify the criteria that will be used to determine whether adequate 
price competition exists. In the case of the exception provided in 
paragraph (1)(A)(ii), the regulations shall preclude the consideration 
of sales to the Federal Government, including the percentage of an 
item's overall sales that are made to the Federal Government, when 
determining whether the item has been sold in substantial quantities to 
the public.
    ``(c) Authority To Require Cost or Pricing Data on Below-Threshold 
Contracts.--When cost or pricing data are not required to be submitted 
by subsection (a), such data may nevertheless be required to be 
submitted by the head of the procuring activity, but only if the head 
of the procuring activity determines that such data are necessary for 
the evaluation by the agency of the reasonableness of the price of the 
contract or subcontract. In any case in which the head of the procuring 
activity requires such data to be submitted under this subsection, the 
head of the procuring activity shall justify in writing the reason for 
such requirement and certify the accuracy and completeness of the 
justification. The head of the procuring activity may not delegate the 
functions under this subsection.
    ``(d) Additional Exception Provisions Regarding Commercial Items.--
(1) In any case in which it is not practicable to conduct a procurement 
of a commercial item on a competitive basis and the procurement is not 
covered by an exception in subsection (b), the contracting officer 
shall nonetheless exempt a contract or subcontract
under the procurement from the requirements of subsection (a) if the 
contracting officer develops or obtains from the offeror or contractor, 
or from another source or sources, in accordance with standards and 
procedures set forth in the Federal Acquisition Regulation, information 
on prices at which the same or similar items have been sold in the 
commercial market that is adequate for evaluating the reasonableness of 
the price of the contract or subcontract for a commercial item.
    ``(2)(A) In accordance with procedures prescribed in the Federal 
Acquisition Regulation, an agency head shall have the right to examine 
all information provided by an offeror, contractor, or subcontractor 
pursuant to subsection (b)(1)(A) or paragraph (1) of this subsection 
and all books and records of such offeror, contractor, or subcontractor 
that directly relate to such information in order to determine whether 
the agency is receiving accurate information required under this 
section.
    ``(B) The right under subparagraph (A) shall expire 1 year after 
the date of commencement of performance of the contract, or 1 year 
after the date of commencement of performance of the modification of 
the contract, with respect to which the information was provided.
    ``(3) The Federal Acquisition Regulation shall establish reasonable 
limitations on requests under this section for sales data relating to 
commercial items.
    ``(e) Price Reductions for Defective Cost or Pricing Data.--(1)(A) 
A prime contract (or change or modification to a prime contract) under 
which a certificate under subsection (a)(2) is required shall contain a 
provision that the price of the contract to the United States, 
including profit or fee, shall be adjusted to exclude any significant 
amount by which it may be determined by the agency head that such price 
was increased because the contractor (or any subcontractor required to 
make available such a certificate) submitted defective cost or pricing 
data.
    ``(B) For the purposes of this section, defective cost or pricing 
data are cost or pricing data which, as of the date of agreement on the 
price of the contract (or another date agreed upon between the 
parties), were inaccurate, incomplete, or noncurrent. If for purposes 
of the preceding sentence the parties agree upon a date other than the 
date of agreement on the price of the contract, the date agreed upon by 
the parties shall be as close to the date of agreement on the price of 
the contract as is practicable.
    ``(2) In determining for purposes of a contract price adjustment 
under a contract provision required by paragraph (1) whether, and to 
what extent, a contract price was increased because the contractor (or 
a subcontractor) submitted defective cost or pricing data, it shall be 
a defense that the United States did not rely on the defective data 
submitted by the contractor or subcontractor.
    ``(3) It is not a defense to an adjustment of the price of a 
contract under a contract provision required by paragraph (1) that--
            ``(A) the price of the contract would not have been 
        modified even if accurate, complete, and current cost or 
        pricing data had been submitted by the contractor or 
        subcontractor because the contractor or subcontractor--
                    ``(i) was the sole source of the property or 
                services procured; or
                    ``(ii) otherwise was in a superior bargaining 
                position with respect to the property or services 
                procured;
            ``(B) the contracting officer should have known that the 
        cost and pricing data in issue were defective even though the 
        contractor or subcontractor took no affirmative action to bring 
        the character of the data to the attention of the contracting 
        officer;
            ``(C) the contract was based on an agreement between the 
        contractor and the United States about the total cost of the 
        contract and there was no agreement about the cost of each item 
        procured under such contract; or
            ``(D) the prime contractor or subcontractor did not submit 
        a certification of cost and pricing data relating to the 
        contract as required under subsection (a)(2).
    ``(4)(A) A contractor shall be allowed to offset an amount against 
the amount of a contract price adjustment under a contract provision 
required by paragraph (1) if--
            ``(i) the contractor certifies to the contracting officer 
        (or to a designated representative of the contracting officer) 
        that, to the best of the contractor's knowledge and belief, the 
        contractor is entitled to the offset; and
            ``(ii) the contractor proves that the cost or pricing data 
        were available before the date of agreement on the price of the 
        contract (or price of the modification), or, if applicable 
        consistent with paragraph (1)(B), another date agreed upon 
        between the parties, and that the data were not submitted as 
        specified in subsection (a)(3) before such date.
    ``(B) A contractor shall not be allowed to offset an amount 
otherwise authorized to be offset under subparagraph (A) if--
            ``(i) the certification under subsection (a)(2) with 
        respect to the cost or pricing data involved was known to be 
        false when signed; or
            ``(ii) the United States proves that, had the cost or 
        pricing data referred to in subparagraph (A)(ii) been submitted 
        to the United States before the date of agreement on the price 
        of the contract (or price of the modification) or, if 
        applicable under paragraph (1)(B), another date agreed upon 
        between the parties, the submission of such cost or pricing 
        data would not have resulted in an increase in that price in 
        the amount to be offset.
    ``(f) Interest and Penalties for Certain Overpayments.--(1) If the 
United States makes an overpayment to a contractor under a contract 
with an executive agency subject to this section and the overpayment 
was due to the submission by the contractor of defective cost or 
pricing data, the contractor shall be liable to the United States--
            ``(A) for interest on the amount of such overpayment, to be 
        computed--
                    ``(i) for the period beginning on the date the 
                overpayment was made to the contractor and ending on 
                the date the contractor repays the amount of such 
                overpayment to the United States; and
                    ``(ii) at the current rate prescribed by the 
                Secretary of the Treasury under section 6621 of the 
                Internal Revenue Code of 1986; and
            ``(B) if the submission of such defective data was a 
        knowing submission, for an additional amount equal to the 
        amount of the overpayment.
    ``(2) Any liability under this subsection of a contractor that 
submits cost or pricing data but refuses to submit the certification 
required by subsection (a)(2) with respect to the cost or pricing data 
shall not be affected by the refusal to submit such certification.
    ``(g) Right of United States To Examine Contractor Records.--For 
the purpose of evaluating the accuracy, completeness, and currency of 
cost or pricing data required to be submitted by this section, the head 
of an agency shall have the rights provided by section 38(a)(2).
    ``(h) Cost or Pricing Data Defined.--In this section, the term 
`cost or pricing data' means all facts that, as of the date of 
agreement on the price of a contract (or the price of a contract 
modification) or, if applicable consistent with subsection (e)(1)(B), 
another date agreed upon between the parties, a prudent buyer or seller 
would reasonably expect to affect price negotiations significantly. 
Such terms does not include information that is judgmental, but does 
include the factual information from which a judgment was derived.''.

                    Subtitle C--Procurement Protests

              PART I--PROTESTS TO THE COMPTROLLER GENERAL

SEC. 1401. PROTEST DEFINED.

    Paragraph (1) of section 3551 of title 31, United States Code, is 
amended to read as follows:
            ``(1) `protest' means a written objection by an interested 
        party--
                    ``(i) to a solicitation or other request by a 
                Federal agency for offers for a contract for the 
                procurement of property or services;
                    ``(ii) to the cancellation of such a solicitation 
                or other request;
                    ``(iii) to an award or proposed award of such a 
                contract; or
                    ``(iv) to a termination or cancellation of an award 
                of such a contract, if the written objection contains 
                an allegation that the termination or cancellation is 
                based in whole or in part on improprieties concerning 
                the award of the contract;''.

SEC. 1402. REVIEW OF PROTESTS AND EFFECT ON CONTRACTS PENDING DECISION.

    (a) Periods for Certain Actions.--Section 3553 of title 31, United 
States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking out ``one working 
                day of'' and inserting in lieu thereof ``one day 
                after''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by striking out 
                        ``25 working days from'' and inserting in lieu 
                        thereof ``35 days after''; and
                            (ii) in subparagraph (C), by striking out 
                        ``10 working days from'' and inserting in lieu 
                        thereof ``15 days after''; and
            (2) in subsection (c)(3), by striking out ``thereafter'' 
        and inserting in lieu thereof ``after the making of such 
        finding''.
    (b) Suspension of Performance.--Subsection (d) of such section is 
amended to read as follows:
    ``(d)(1) A contractor awarded a Federal agency contract may, during 
the period described in paragraph (4), begin performance of the 
contract and engage in any related activities that result in 
obligations being incurred by the United States under the contract 
unless the contracting officer responsible for the award of the 
contract withholds authorization to proceed with performance of the 
contract.
    ``(2) The contracting officer may withhold an authorization to 
proceed with performance of the contract during the period described in 
paragraph (4) if the contracting officer determines in writing that--
            ``(A) a protest is likely to be filed; and
            ``(B) the immediate performance of the contract is not in 
        the best interests of the United States.
    ``(3)(A) If the Federal agency awarding the contract receives 
notice of a protest in accordance with this section during the period 
described in paragraph (4)--
            ``(i) the contracting officer may not authorize performance 
        of the contract to begin while the protest is pending; or
            ``(ii) if contract performance was authorized in accordance 
        with paragraph (2) before receipt of the notice, the 
        contracting officer shall immediately direct the contractor to 
        cease performance under the contract and to suspend any related 
        activities that may result in additional obligations being 
        incurred by the United States under that contract.
    ``(B) Performance and related activities suspended pursuant to 
subparagraph (A)(ii) by reason of a protest may not be resumed while 
the protest is pending.
    ``(C) The head of the procuring activity may authorize the 
performance of the contract (notwithstanding a protest of which the 
Federal agency has notice under this section)--
            ``(i) upon a written finding that--
                    ``(I) performance of the contract is in the best 
                interests of the United States; or
                    ``(II) urgent and compelling circumstances that 
                significantly affect interests of the United States 
                will not permit waiting for the decision of the 
                Comptroller General concerning the protest; and
            ``(ii) after the Comptroller General is notified of that 
        finding.
    ``(4) The period referred to in paragraphs (2) and (3)(A), with 
respect to a contract, is the period beginning on the date of the 
contract award and ending on the later of--
            ``(A) the date that is 10 days after the date of the 
        contract award; or
            ``(B) the date that is 5 days after the debriefing date 
        offered to an unsuccessful offeror for any debriefing that is 
        requested and, when requested, is required.''.

SEC. 1403. DECISIONS ON PROTESTS.

    (a) Periods for Certain Actions.--Section 3554(a) of title 31, 
United States Code, is amended--
            (1) in paragraph (1), by striking out ``90 working days 
        from'' and inserting in lieu thereof ``120 days after'';
            (2) in paragraph (2), by striking out ``45 calendar days 
        from'' and inserting ``60 days after'';
            (3) by redesignating paragraph (3) as paragraph (4); and
            (4) by inserting after paragraph (2) the following new 
        paragraph (3):
    ``(3) An amendment to a protest that adds a new ground of protest, 
if timely raised, should be resolved, to the maximum extent 
practicable, within the time limit established under paragraph (1) of 
this subsection for final decision of the initial protest. If an 
amended protest cannot be resolved within such time limit, the 
Comptroller General may resolve the amended protest through the express 
option under paragraph (2) of this subsection.''.
    (b) GAO Recommendations on Protests.--
            (1) Implementation of recommendations.--Section 3554 of 
        title 31, United States Code, is amended--
                    (A) in subsection (b), by adding at the end the 
                following new paragraph:
    ``(3) If the Federal agency fails to implement fully the 
recommendations of the Comptroller General under this subsection with 
respect to a solicitation for a contract or an award or proposed award 
of a contract within 60 days after receiving the recommendations, the 
head of the procuring activity responsible for that contract shall 
report such failure to the Comptroller General not later than 5 working 
days after the end of such 60-day period.'';
                    (B) by striking out subsection (c) and inserting in 
                lieu thereof the following:
    ``(c)(1) If the Comptroller General determines that a solicitation 
for a contract or a proposed award or the award of a contract does not 
comply with a statute or regulation, the Comptroller General may 
recommend that the Federal agency conducting the procurement pay to an 
appropriate interested party the costs of--
            ``(A) filing and pursuing the protest, including reasonable 
        attorney's fees and consultant and expert witness fees; and
            ``(B) bid and proposal preparation.
    ``(2) If the Comptroller General recommends under paragraph (1) 
that a Federal agency pay costs to an interested party, the Federal 
agency shall--
            ``(A) pay the costs promptly out of funds appropriated by 
        section 1304 of this title for the payment of judgments and 
        reimburse that appropriation account out of available funds or 
        out of additional funds appropriated for such Federal agency to 
        make such reimbursement; or
            ``(B) if the Federal agency does not make such payment, 
        promptly report to the Comptroller General the reasons for the 
        failure to follow the Comptroller General's recommendation.
    ``(3) If the Comptroller General recommends under paragraph (1) 
that a Federal agency pay costs to an interested party, the Federal 
agency and the interested party shall attempt to reach an agreement on 
the amount of the costs to be paid. If the Federal agency and the 
interested party are unable to agree on the amount to be paid, the 
Comptroller General may, upon the request of the interested party, 
recommend to the Federal agency the amount of the costs that the 
Federal agency should pay.''; and
                    (C) by striking out subsection (e) and inserting in 
                lieu thereof the following:
    ``(e)(1) The Comptroller General shall report promptly to the 
Committee on Governmental Affairs and the Committee on Appropriations 
of the Senate and to the Committee on Government Operations and the 
Committee on Appropriations of the House of Representatives any case in 
which a Federal agency fails to implement fully a recommendation of the 
Comptroller General under subsection (b) or (c). The report shall 
include--
            ``(A) a comprehensive review of the pertinent procurement, 
        including the circumstances of the failure of the Federal 
        agency to implement a recommendation of the Comptroller 
        General; and
            ``(B) a recommendation regarding whether, in order to 
        correct an inequity or to preserve the integrity of the 
        procurement process, the Congress should consider--
                    ``(i) private relief legislation;
                    ``(ii) legislative rescission or cancellation of 
                funds;
                    ``(iii) further investigation by the Congress; or
                    ``(iv) other action.
    ``(2) Not later than January 31 of each year, the Comptroller 
General shall transmit to the Congress a report containing a summary of 
each instance in which a Federal agency did not fully implement a 
recommendation of the Comptroller General under subsection (b) or (c) 
during the preceding year. The report shall also describe each instance 
in which a final decision in a protest was not rendered within 125 days 
after the date the protest is submitted to the Comptroller General.''.
            (2) Requirement for payment in accordance with prior gao 
        determinations.--Amounts to which the Comptroller General 
        declared an interested party to be entitled under section 3554 
        of title 31, United States Code, as in effect immediately 
        before the enactment of this Act, shall, if not paid or 
        otherwise satisfied by the Federal agency concerned before the 
        date of the enactment of this Act, be paid promptly from the 
        appropriation made by section 1304 of such title for the 
        payment of judgments. The Federal agency shall reimburse that 
        appropriation account out of available funds or out of 
        additional funds appropriated for such Federal agency to make 
        such reimbursement. If the Federal agency is unable to make the 
        reimbursement out of available funds, the head of such agency 
        shall immediately take such action as may be necessary to 
        transmit to Congress a request for an appropriation of 
        additional funds to make such reimbursement.
    (c) Restriction on Access to Certain Information.--Section 3553(f) 
of title 31, United States Code, is amended--
            (1) by inserting ``(1)'' after ``(f)''; and
            (2) by adding at the end the following:
    ``(2)(A) The Comptroller General may issue protective orders which 
establish terms, conditions, and restrictions for the provision of any 
document to a person under paragraph (1), that prohibit or restrict the 
disclosure by the person of information described in subparagraph (C) 
that is contained in such a document.
    ``(B) The penalties specified under section 27(i) of the Office of 
Federal Procurement Policy Act shall apply to the disclosure of 
information described in subparagraph (C) in violation of a term, 
condition, or restriction in a protective order under this paragraph by 
a person that is subject to the protective order.
    ``(C) Information referred to in subparagraphs (A) and (B) is 
procurement sensitive information, trade secrets, or other proprietary 
or confidential research, development, or commercial information.
    ``(D) A protective order under this paragraph shall not be 
considered to authorize the withholding of any document or information 
from the Congress or an executive agency.''.

SEC. 1404. REGULATIONS.

    (a) Computation of Periods.--Section 3555 of title 31, United 
States Code, is amended--
            (1) by redesignating subsection (b) as subsection (d); and
            (2) by inserting after subsection (a) the following new 
        subsection (b):
    ``(b) The procedures shall provide that, in the computation of any 
period described in this subchapter--
            ``(1) the day of the act, event, or default from which the 
        designated period of time begins to run not be included; and
            ``(2) the last day after such act, event, or default be 
        included, unless--
                    ``(A) such last day is a Saturday, a Sunday, or a 
                legal holiday; or
                    ``(B) in the case of a filing of a paper at the 
                General Accounting Office or a Federal agency, such 
                last day is a day on which weather or other conditions 
                cause the closing of the General Accounting Office or 
                Federal agency, in which event the next day that is not 
                a Saturday, Sunday, or legal holiday shall be 
                included.''.
    (b) Electronic Filings and Disseminations.--Such section, as 
amended by subsection (a), is further amended by inserting after 
subsection (b) the following new subsection:
    ``(c) The Comptroller General may prescribe procedures for the 
electronic filing and dissemination of documents and information 
required under this subchapter. In prescribing such procedures, the 
Comptroller General shall consider the ability of all parties to 
achieve electronic access to such documents and records.''.
    (c) Repeal of Obsolete Deadline.--Subsection (a) of such section is 
amended by striking out ``Not later than January 15, 1985, the'' and 
inserting in lieu thereof ``The''.

     PART II--PROTESTS IN PROCUREMENTS OF AUTOMATIC DATA PROCESSING

SEC. 1431. REVOCATION OF DELEGATIONS OF PROCUREMENT AUTHORITY.

    Section 111(b)(3) of the Federal Property and Administrative 
Services Act of 1949 (40 U.S.C. 759(b)(3)) is amended by inserting 
after the third sentence the following: ``The Administrator may revoke 
a delegation of authority with respect to a particular contract before 
or after award of the contract, except that the Administrator may 
revoke a delegation after the contract is awarded only when there is a 
finding of a violation of law or regulation in connection with the 
contract award.''.

SEC. 1432. AUTHORITY OF THE GENERAL SERVICES ADMINISTRATION BOARD OF 
              CONTRACT APPEALS.

    The first sentence of section 111(f)(1) of the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 759(f)(1)) is amended to 
read as follows: ``Upon request of an interested party in connection 
with any procurement that is subject to this section (including any 
such procurement that is subject to delegation of procurement 
authority), the board of contract appeals of the General Services 
Administration (hereafter in this subsection referred to as the 
`board') shall review, as provided in this subsection, any decision by 
a contracting officer that is alleged to violate a statute, a 
regulation, or the conditions of a delegation of procurement 
authority.''.

SEC. 1433. PERIODS FOR CERTAIN ACTIONS.

    (a) Suspension of Procurement Authority.--(1) Section 111(f)(2)(B) 
of the Federal Property and Administrative Services Act of 1949 (40 
U.S.C. 759(f)) is amended--
            (A) by redesignating clauses (i) and (ii) as subclauses (I) 
        and (II), respectively;
            (B) by inserting ``(i)'' after ``(B)''; and
            (C) by adding at the end the following:
    ``(ii) A suspension under this subparagraph shall not preclude the 
Federal agency concerned from continuing the procurement process up to 
but not including award of the contract if the Board determines such 
action is in the best interests of the United States.''.
    (2) Section 111(f) of the Federal Property and Administrative 
Services Act of 1949 (40 U.S.C. 759(f)) is amended in paragraph (3) by 
striking out subparagraph (A) and inserting in lieu thereof the 
following:
    ``(A)(i) If, with respect to an award of a contract, the board 
receives notice of a protest under this subsection within the period 
described in clause (ii), the board shall, at the request of an 
interested party, hold a hearing to determine whether the board should 
suspend the procurement authority of the Administrator or the 
Administrator's delegation of procurement authority for the protested 
procurement on an interim basis until the board can decide the protest.
    ``(ii) The period referred to in clause (i) is the period beginning 
on the date on which the contract is awarded and ending at the end of 
the later of--
            ``(I) the tenth day after the date of contract award; or
            ``(II) the fifth day after the debriefing date offered to 
        an unsuccessful offeror for any debriefing that is requested 
        and, when requested, is required.
    ``(iii) The board shall hold the requested hearing within 5 days 
after the date of the filing of the protest.''.
    (b) Final Decision.--Paragraph (4)(B) of such section 111(f) is 
amended--
            (1) by striking out ``45 working days'' and inserting in 
        lieu thereof ``65 days''; and
            (2) by adding at the end the following: ``An amendment 
        which adds a new ground of protest should be resolved, to the 
        maximum extent practicable, within the time limits established 
        for resolution of the initial protest.''.

SEC. 1434. DISMISSALS OF PROTESTS.

    Section 111(f)(4) of the Federal Property and Administrative 
Services Act of 1949 (40 U.S.C. 759(f)(4)) is amended by striking out 
subparagraph (C) and inserting in lieu thereof the following:
    ``(C) The board may dismiss a protest that the board determines--
            ``(i) is frivolous;
            ``(ii) has been brought in bad faith; or
            ``(iii) does not state on its face a valid basis for 
        protest.''.

SEC. 1435. AWARD OF COSTS.

    Section 111(f)(5) is amended by striking out subparagraph (C) and 
inserting in lieu thereof the following:
    ``(C) Whenever the board makes such a determination, it may, in 
accordance with section 1304 of title 31, United States Code, further 
declare an appropriate prevailing party to be entitled to the cost of 
filing and pursuing the protest (including reasonable attorney's fees 
and consultant and expert witness fees), and bid and proposal 
preparation.''.

SEC. 1436. DISMISSAL AGREEMENTS.

    Section 111(f)(5) of the Federal Property and Administrative 
Services Act of 1949 (40 U.S.C. 759(f)(5)) is amended by adding at the 
end the following new subparagraphs:
    ``(D) Any agreement that provides for the dismissal of a protest 
and involves a direct or indirect expenditure of appropriated funds 
shall be submitted to the board and shall be made a part of the public 
record (subject to any protective order considered appropriate by the 
board) before dismissal of the protest. If a Federal agency is a party 
to a settlement agreement, the submission of the agreement submitted to 
the board shall include a memorandum, signed by the contracting officer 
concerned, that describes in detail the procurement, the grounds for 
protest, the Federal Government's position regarding the grounds for 
protest, the terms of the settlement, and the agency's position 
regarding the propriety of the award or proposed award of the contract 
at issue in the protest.
    ``(E) Payment of amounts due from an agency under subparagraph (C) 
or under the terms of a settlement agreement under subparagraph (D) 
shall be made from the appropriation made by section 1304 of title 31, 
United States Code, for the payment of judgments. The Federal agency 
concerned shall reimburse that appropriation account out of funds 
available for the procurement.''.

SEC. 1437. MATTERS TO BE COVERED IN REGULATIONS.

    Section 111(f) of the Federal Property and Administrative Services 
Act of 1949 (40 U.S.C. 759(f)) is amended by striking out paragraph (8) 
and inserting in lieu thereof the following:
    ``(7)(A) The board shall adopt and issue such rules and procedures 
as may be necessary to the expeditious disposition of protests filed 
under the authority of this subsection.
    ``(B) The procedures shall provide that, in the computation of any 
period described in this subsection--
            ``(i) the day of the act, event, or default from which the 
        designated period of time begins to run not be included; and
            ``(ii) the last day after such act, event, or default be 
        included, unless--
                    ``(I) such last day is a Saturday, a Sunday, or a 
                legal holiday; or
                    ``(II) in the case of a filing of a paper at the 
                board, such last day is a day on which weather or other 
                conditions make the board or Federal agency 
                inaccessible, in which event the next day that is not a 
                Saturday, Sunday, or legal holiday shall be included.
    ``(C) The procedures may provide for electronic filing and 
dissemination of documents and information required under this 
subsection and in so providing shall consider the ability of all 
parties to achieve electronic access to such documents and records.
    ``(D) The procedures shall provide that if the board expressly 
finds that a protest or a portion of a protest is frivolous or has not 
been brought or pursued in good faith, or that any person has willfully 
abused the board's process during the course of a protest, the board 
may impose appropriate procedural sanctions, including dismissal of the 
protest.''.

SEC. 1438. DEFINITIONS.

    (a) Protest.--Section 111(f)(9) of the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 759(f)(9)) is amended--
            (1) by striking out ``and'' at the end of subparagraph (A);
            (2) by striking out the period at the end of subparagraph 
        (B) and inserting in lieu thereof ``; and''; and
            (3) by adding at the end the following new subparagraph:
            ``(C) the term `protest' means a written objection by an 
        interested party--
                    ``(i) to a solicitation or other request by a 
                Federal agency for offers for a contract for the 
                procurement of property or services;
                    ``(ii) to the cancellation of such a solicitation 
                or other request;
                    ``(iii) to an award or proposed award of such a 
                contract; or
                    ``(iv) to a termination or cancellation of an award 
                of such a contract, if the written objection contains 
                an allegation that the termination or cancellation is 
                based in whole or in part on improprieties concerning 
                the award of the contract;''.
    (b) Prevailing Party.--Section 111(f)(9) of such Act is amended by 
adding at the end the following new subparagraph:
            ``(C) the term `prevailing party', with respect to a 
        determination of the board under paragraph (5)(B) that a 
        challenged action of a Federal agency violates a statute or 
        regulation or the conditions of a delegation of procurement 
        authority issued pursuant to this section, means a party that 
        demonstrated such violation.''.

SEC. 1439. OVERSIGHT OF ACQUISITION OF AUTOMATIC DATA PROCESSING 
              EQUIPMENT BY FEDERAL AGENCIES.

    Section 111 of the Federal Property and Administrative Services Act 
of 1949 (40 U.S.C. 759) is amended by adding at the end the following 
new subsection:
    ``(h)(1) The Administrator shall collect and compile data regarding 
the procurement of automatic data processing equipment under this 
section. The data collected and compiled shall include, at a minimum, 
with regard to each procurement the following:
            ``(A) The procuring agency.
            ``(B) The contractor.
            ``(C) The automatic data processing equipment and services 
        procured.
            ``(D) The manufacturer of the equipment procured.
            ``(E) The amount of the contract, to the extent that the 
        amount is not proprietary information.
            ``(F) The type of contract used.
            ``(G) The extent of competition for award.
            ``(H) Compatibility restrictions.
            ``(I) Significant modifications of the contract.
            ``(J) Contract price, to the extent that the price is not 
        proprietary information.
    ``(2) The head of each Federal agency shall report to the 
Administrator in accordance with regulations issued by the 
Administrator all information that the Administrator determines 
necessary in order to satisfy the requirements in paragraph (1).
    ``(3) The Administrator shall--
            ``(A) carry out a systematic, periodic review of 
        information received under this subsection;
            ``(B) use such information, as appropriate, to determine 
        the compliance of Federal agencies with the requirements of 
        this section; and
            ``(C) have the authority to suspend the delegation to a 
        Federal agency of authority to lease or purchase automatic data 
        processing equipment upon any failure by the head of the 
        Federal agency to report to the Administrator in accordance 
        with paragraph (2).''.

               Subtitle D--Definitions and Other Matters

SEC. 1551. DEFINITIONS.

    Section 309(c) of the Federal Property and Administrative Services 
Act of 1949 (41 U.S.C. 259(c)) is amended by striking out ``and 
`supplies''' and inserting in lieu thereof ```supplies', `commercial 
item', and `nondevelopmental item'''.

SEC. 1552. DELEGATION OF PROCUREMENT FUNCTIONS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 1251, is further amended by inserting 
after section 32 the following new section:

``SEC. 33. DELEGATION OF PROCUREMENT FUNCTIONS.

    ``(a) In General.--Except to the extent expressly prohibited by 
another provision of law, an agency head may delegate, subject to his 
direction, to any other officer or official of that agency, any power 
under this title.
    ``(b) Procurements For or With Other Agencies.--Subject to 
subsection (a), to facilitate the procurement of property and services 
covered by this title by each executive agency for any other executive 
agency, and to facilitate joint procurement by those executive 
agencies--
            ``(1) an agency head may, within his executive agency, 
        delegate functions and assign responsibilities relating to 
        procurement;
            ``(2) the heads of two or more executive agencies may by 
        agreement delegate procurement functions and assign procurement 
        responsibilities from one executive agency to another of those 
        executive agencies or to an officer or civilian employee of 
        another of those executive agencies; and
            ``(3) the heads of two or more executive agencies may 
        create joint or combined offices to exercise procurement 
        functions and responsibilities.''.

SEC. 1553. DETERMINATIONS AND DECISIONS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 1552, is further amended by inserting 
after section 33 the following new section:

``SEC. 34. DETERMINATIONS AND DECISIONS.

    ``(a) Individual or Class Determinations and Decisions 
Authorized.--Determinations and decisions required to be made under 
title III of the Federal Property and Administration Services Act of 
1949 (41 U.S.C. 251 et seq.) or chapter 137 of title 10, United States 
Code, by an agency head may be made for an individual purchase or 
contract or for a class of purchases or contracts. Such determinations 
and decisions are final.
    ``(b) Written Findings Required.--(1) Each determination under 
section 36(c) shall be based on a written finding by the person making 
the determination or decision. The finding shall set out facts and 
circumstances that support the determination or decision.
    ``(2) Each finding referred to in paragraph (1) shall be final. The 
agency head making such finding shall maintain a copy of the finding 
for not less than 6 years after the date of the determination or 
decision.''.

SEC. 1554. RESEARCH, DEVELOPMENT, AND PRODUCTION COSTS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 1553, is further amended by inserting 
after section 34 the following new section:

``SEC. 35. RESEARCH, DEVELOPMENT, AND PRODUCTION COSTS.

    ``(a) Letters of offer for the sale of defense articles or for the 
sale of defense services that are issued pursuant to sections 2761 or 
2762 of title 22, United States Code, shall not include any charge for 
the proportionate amount of any nonrecurring costs of research, 
development, and production of major defense equipment.
    ``(b) Subsection (a) shall be effective with respect to sales 
agreements entered into on or after October 1, 1996.''.

SEC. 1555. REPEALS.

    The laws of the United States are amended to read as if the 
following sections of law had not been enacted:
            (1) Section 630 of Public Law 102-393.
            (2) Section 401 of Public Law 103-123.

SEC. 1556. COOPERATIVE PURCHASING.

    Subsection (b) of section 201 of the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 481), is amended to read 
as follows:
    ``(b)(1) The Administrator shall, as far as practicable, provide 
any of the services specified in subsection (a) of this section to any 
other Federal agency, mixed-ownership Government corporation (as 
defined in section 9101 of title 31, United States Code), or the 
District of Columbia, upon its request.
    ``(2)(A) The Administrator may provide for the use of Federal 
supply schedules or other contracts by any of the following entities 
upon request:
            ``(i) A State, any department or agency of a State, and any 
        political subdivision of a State, including a local government.
            ``(ii) The District of Columbia.
            ``(iii) The Commonwealth of Puerto Rico.
            ``(iv) The government of an Indian tribe (as defined in 
        section 4(e) of the Indian Self-Determination and Education 
        Assistance Act (25 U.S.C. 450b(e))).
    ``(B) Subparagraph (A) may not be construed to authorize an entity 
referred to in that subparagraph to order existing stock or inventory 
from federally owned and operated, or federally owned and contractor 
operated, supply depots, warehouses, or similar facilities.
    ``(3)(A) Upon the request of a qualified nonprofit agency for the 
blind or other severely handicapped that is to provide a commodity or 
service to the Federal Government under the Javits-Wagner-O'Day Act, 
the Administrator may provide any of the services specified in 
subsection (a) to such agency to the extent practicable.
    ``(B) A nonprofit agency receiving services under the authority of 
subparagraph (A) shall use the services directly in making or providing 
an approved commodity or approved service to the Federal Government.
    ``(C) In this paragraph:
            ``(i) The term `qualified nonprofit agency for the blind or 
        other severely handicapped' means--
                    ``(I) a qualified nonprofit agency for the blind, 
                as defined in section 5(3) of the Javits-Wagner-O'Day 
                Act (41 U.S.C. 48b(3)); and
                    ``(II) a qualified nonprofit agency for other 
                severely handicapped, as defined in section 5(4) of 
                such Act (41 U.S.C. 48b(4)).
            ``(ii) The terms `approved commodity' and `approved 
        service' mean a commodity and a service, respectively, that has 
        been determined by the Committee for Purchase from the Blind 
        and Other Severely Handicapped under section 2 of the Javits-
        Wagner-O'Day Act (41 U.S.C. 47) to be suitable for procurement 
        by the Federal Government.
            ``(iii) The term `Javits-Wagner-O'Day Act' means the Act 
        entitled `An Act to create a Committee on Purchases of Blind-
        made Products, and for other purposes', approved June 25, 1938 
        (41 U.S.C. 46-48c), commonly referred to as the Wagner-O'Day 
        Act, that was revised and reenacted in the Act of June 23, 1971 
        (85 Stat. 77), commonly referred to as the Javits-Wagner-O'Day 
        Act.''.

                   TITLE II--CONTRACT ADMINISTRATION

                      Subtitle A--Contract Payment

SEC. 2051. CONTRACT FINANCING.

    (a) Reorganization of Principal Authority Provision.--The Office of 
Federal Procurement Policy Act (41 U.S.C. 401 et seq.), as amended by 
section 1554, is further amended by inserting after section 35 the 
following new section:

``SEC. 36. CONTRACT FINANCING.

    ``(a) Payment Authority.--Any executive agency may--
            ``(1) make advance, partial, progress or other payments 
        under contracts of property or services made by the agency; and
            ``(2) insert in bid solicitations for procurement of 
        property or services a provision limiting to small business 
        concerns advance or progress payments.
    ``(b) Payment Amount.--Payments made under subsection (a) may not 
exceed the unpaid contract price.
    ``(c) Security for Advance Payments.--Advance payments under 
subsection (a) may be made only upon adequate security and a 
determination by the agency head that to do so would be in the public 
interest. Such security may be in the form of a lien in favor of the 
Government on the property contracted for, on the balance in an account 
in which such payments are deposited, and on such of the property 
acquired for performance of the contract as the parties may agree. This 
lien shall be paramount to all other liens.
    ``(d) Conditions for Progress Payments.--(1) The agency head shall 
ensure that any payment for work in progress (including materials, 
labor, and other items) under a contract of an executive agency that 
provides for such payments is commensurate with the work accomplished 
that meets standards established under the contract. The contractor 
shall provide such information and evidence as the agency head 
determines necessary to permit the agency head to carry out the 
preceding sentence.
    ``(2) The agency head shall ensure that progress payments referred 
to in paragraph (1) are not made for more than 80 percent of the work 
accomplished under the contract so long as the agency head has not made 
the contractual terms, specifications, and price definite.
    ``(3) This subsection applies to a contract for an amount equal to 
or greater than the simplified acquisition threshold.
    ``(e) Conditions for Payments for Commercial Items.--(1) Payments 
under subsection (a) for commercial items, as that term is defined in 
section 4(12) of this Act, may be made under such terms and conditions 
as the head of the agency determines are appropriate or customary in 
the commercial marketplace. The head of the agency shall obtain 
adequate security for such payments. If the security is in the form of 
a lien in favor of the United States, such lien is paramount to all 
other liens and is effective immediately upon the first payment, 
without filing, notice, or other action by the United States.
    ``(2) Advance payments made under subsection (a) for commercial 
items may include payments, in a total amount of not more than 15 
percent of the contract price, in advance of any performance of work 
under the contract.
    ``(3) The conditions of subsections (c) and (d) do not apply to 
payments made for commercial items in accordance with this subsection.
    ``(f) Action in Case of Fraud.--(1) In any case in which the remedy 
coordination official of an executive agency finds that there is 
substantial evidence that the request of a contractor for advance, 
partial, or progress payment under a contract awarded by that executive 
agency is based on fraud, the remedy coordination official shall 
recommend that the agency head reduce or suspend further payments to 
such contractor.
    ``(2) An agency head receiving a recommendation under paragraph (1) 
in the case of a contractor's request for payment under a contract 
shall determine whether there is substantial evidence that the request 
is based on fraud. Upon making such a determination, the agency head 
may reduce or suspend further payments to the contractor under such 
contract.
    ``(3) The extent of any reduction or suspension of payments by an 
agency head under paragraph (2) on the basis of fraud shall be 
reasonably commensurate with the anticipated loss to the United States 
resulting from the fraud.
    ``(4) A written justification for each decision of the agency head 
whether to reduce or suspend payments under paragraph (2), and for each 
recommendation received by the agency head in connection with such 
decision, shall be prepared and be retained in the files of the 
executive agency.
    ``(5) Each agency head shall prescribe procedures to ensure that, 
before the agency head decides to reduce or suspend payments in the 
case of a contractor under paragraph (2), the contractor is afforded 
notice of the proposed reduction or suspension and an opportunity to 
submit matters to the head of the agency in response to such proposed 
reduction or suspension.
    ``(6) Not later than 180 days after the date on which an agency 
head reduces or suspends payments to a contractor under paragraph (2), 
the remedy coordination official of the executive agency shall--
            ``(A) review the determination of fraud on which the 
        reduction or suspension is based; and
            ``(B) transmit a recommendation to the agency head whether 
        the suspension or reduction should continue.
    ``(7) Each agency head who receives recommendations made by a 
remedy coordination official of the executive agency to reduce or 
suspend payments under paragraph (2) during a fiscal year shall prepare 
for such year a report that contains the recommendations, the actions 
taken on the recommendations and the reasons for such actions, and an 
assessment of the effects of such actions on the Federal Government. 
Any such report shall be available to any Member of Congress upon 
request.
    ``(8) An agency head may not delegate responsibilities under this 
subsection to any person in a position below level IV of the Executive 
Schedule.
    ``(9) In this subsection, the term `remedy coordination official', 
with respect to an executive agency, means the person or entity in that 
executive agency who coordinates within that executive agency the 
administration of criminal, civil, administrative, and contractual 
remedies resulting from investigations of fraud or corruption related 
to procurement activities.''.
    (b) Relationship to Prompt Payment Requirements.--Section 36 of the 
Office of Federal Procurement Policy Act, as added by subsection (a) is 
not intended to impair or modify procedures required by the provisions 
of chapter 39 of title 31, United States Code, and the regulations 
issued pursuant to such provisions of law, that relate to progress 
payment requests, as such procedures are in effect on the date of the 
enactment of this Act.

                      Subtitle B--Cost Principles

SEC. 2151. ALLOWABLE CONTRACT COSTS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 2051, is further amended by inserting 
after section 36 the following new section:

``SEC. 37. ALLOWABLE COSTS.

    ``(a) Indirect Cost That Violates a FAR Cost Principle.--The head 
of an executive agency shall require that a covered contract provide 
that if the contractor submits to the executive agency a proposal for 
settlement of indirect costs incurred by the contractor for any period 
after such costs have been accrued and if that proposal includes the 
submission of a cost which is unallowable because the cost violates a 
cost principle in the Federal Acquisition Regulation or an executive 
agency's supplement to the Federal Acquisition Regulation, the cost 
shall be disallowed.
    ``(b) Penalty for Violation of Cost Principle.--(1) If the agency 
head determines that a cost submitted by a contractor in its proposal 
for settlement is expressly unallowable under a cost principle referred 
to in subsection (a) that defines the allowability of specific selected 
costs, the agency head shall assess a penalty against the contractor in 
an amount equal to--
            ``(A) the amount of the disallowed cost allocated to 
        covered contracts for which a proposal for settlement of 
        indirect costs has been submitted; plus
            ``(B) interest (to be computed based on provisions in the 
        Federal Acquisition Regulation) to compensate the United States 
        for the use of any funds which a contractor has been paid in 
        excess of the amount to which the contractor was entitled.
    ``(2) If the agency head determines that a proposal for settlement 
of indirect costs submitted by a contractor includes a cost determined 
to be unallowable in the case of such contractor before the submission 
of such proposal, the agency head shall assess a penalty against the 
contractor in an amount equal to two times the amount of the disallowed 
cost allocated to covered contracts for which a proposal for settlement 
of indirect costs has been submitted.
    ``(c) Waiver of Penalty.--In accordance with the Federal 
Acquisition Regulation, the agency head may waive a penalty under 
subsection (b) in the case of a contractor's proposal for settlement of 
indirect costs when--
            ``(1) the contractor withdraws the proposal before the 
        formal initiation of an audit of the proposal by the Federal 
        Government and resubmits a revised proposal;
            ``(2) the amount of unallowable costs subject to the 
        penalty is insignificant; or
            ``(3) the contractor demonstrates, to the contracting 
        officer's satisfaction, that--
                    ``(A) it has established appropriate policies and 
                personnel training and an internal control and review 
                system that provide assurances that unallowable costs 
                subject to penalties are precluded from being included 
                in the contractor's proposal for settlement of indirect 
                costs; and
                    ``(B) the unallowable costs subject to the penalty 
                were inadvertently incorporated into the proposal.
    ``(d) Applicability of Contract Disputes Procedure to Disallowance 
of Cost and Assessment of Penalty.--An action of an agency head under 
subsection (a) or (b)--
            ``(1) shall be considered a final decision for the purposes 
        of section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 
        605); and
            ``(2) is appealable in the manner provided in section 7 of 
        such Act.
    ``(e) Specific Costs Not Allowable.--(1) The following costs are 
not allowable under a covered contract:
            ``(A) Costs of entertainment, including amusement, 
        diversion, and social activities, and any costs directly 
        associated with such costs (such as tickets to shows or sports 
        events, meals, lodging, rentals, transportation, and 
        gratuities).
            ``(B) Costs incurred to influence (directly or indirectly) 
        legislative action on any matter pending before Congress or a 
        State legislature.
            ``(C) Costs incurred in defense of any civil or criminal 
        fraud proceeding or similar proceeding (including filing of any 
        false certification) brought by the United States where the 
        contractor is found liable or had pleaded nolo contendere to a 
        charge of fraud or similar proceeding (including filing of a 
        false certification).
            ``(D) Payments of fines and penalties resulting from 
        violations of, or failure to comply with, Federal, State, 
        local, or foreign laws and regulations, except when incurred as 
        a result of compliance with specific terms and conditions of 
        the contract or specific written instructions from the 
        contracting officer authorizing in advance such payments in 
        accordance with applicable provisions of the Federal 
        Acquisition Regulation.
            ``(E) Costs of membership in any social, dining, or country 
        club or organization.
            ``(F) Costs of alcoholic beverages.
            ``(G) Contributions or donations, regardless of the 
        recipient.
            ``(H) Costs of advertising designed to promote the 
        contractor or its products.
            ``(I) Costs of promotional items and memorabilia, including 
        models, gifts, and souvenirs.
            ``(J) Costs for travel by commercial aircraft which exceed 
        the amount of the standard commercial fare.
            ``(K) Costs incurred in making any payment (commonly known 
        as a `golden parachute payment') which is--
                    ``(i) in an amount in excess of the normal 
                severance pay paid by the contractor to an employee 
                upon termination of employment; and
                    ``(ii) is paid to the employee contingent upon, and 
                following, a change in management control over, or 
                ownership of, the contractor or a substantial portion 
                of the contractor's assets.
            ``(L) Costs of commercial insurance that protects against 
        the costs of the contractor for correction of the contractor's 
        own defects in materials or workmanship.
            ``(M) Costs of severance pay paid by the contractor to 
        foreign nationals employed by the contractor under a service 
        contract performed outside the United States, to the extent 
        that the amount of severance pay paid in any case exceeds the 
        amount paid in the industry involved under the customary or 
        prevailing practice for firms in that industry providing 
        similar services in the United States, as determined under the 
        Federal Acquisition Regulation.
            ``(N) Costs of severance pay paid by the contractor to a 
        foreign national employed by the contractor under a service 
        contract performed in a foreign country if the termination of 
        the employment of the foreign national is the result of the 
        closing of, or the curtailment of activities at, a United 
        States facility in that country at the request of the 
        government of that country.
            ``(O) Costs incurred by a contractor in connection with any 
        criminal, civil, or administrative proceeding commenced by the 
        United States or a State, to the extent provided in subsection 
        (k).
    ``(2)(A) Pursuant to the Federal Acquisition Regulation and subject 
to the availability of appropriations, the agency head, in awarding a 
covered contract, may waive the application of the provisions of 
paragraphs (1)(M) and (1)(N) to that contract if the agency head 
determines that--
            ``(i) the application of such provisions to the contract 
        would adversely affect the continuation of a program, project, 
        or activity that provides significant support services for 
        employees of the executive agency posted outside the United 
        States;
            ``(ii) the contractor has taken (or has established plans 
        to take) appropriate actions within the contractor's control to 
        minimize the amount and number of incidents of the payment of 
        severance pay by the contractor to employees under the contract 
        who are foreign nationals; and
            ``(iii) the payment of severance pay is necessary in order 
        to comply with a law that is generally applicable to a 
        significant number of businesses in the country in which the 
        foreign national receiving the payment performed services under 
        the contract or is necessary to comply with a collective 
        bargaining agreement.
    ``(B) The head of the executive agency concerned shall include in 
the solicitation for a covered contract a statement indicating--
            ``(i) that a waiver has been granted under subparagraph (A) 
        for the contract; or
            ``(ii) whether the agency head will consider granting such 
        a waiver, and, if the agency head will consider granting a 
        waiver, the criteria to be used in granting the waiver.
    ``(C) The agency head shall make the final determination regarding 
whether to grant a waiver under subparagraph (A) with respect to a 
covered contract before award of the contract.
    ``(3) The provisions of the Federal Acquisition Regulation 
implementing this section may establish appropriate definitions, 
exclusions, limitations, and qualifications.
    ``(f) Required Regulations.--(1) The Federal Acquisition Regulation 
shall contain provisions on the allowability of contractor costs. Such 
provisions shall define in detail and in specific terms those costs 
which are unallowable, in whole or in part, under covered contracts. 
The regulations shall, at a minimum, clarify the cost principles 
applicable to contractor costs of the following:
            ``(A) Air shows.
            ``(B) Membership in civic, community, and professional 
        organizations.
            ``(C) Recruitment.
            ``(D) Employee morale and welfare.
            ``(E) Actions to influence (directly or indirectly) 
        executive branch action on regulatory and contract matters 
        (other than costs incurred in regard to contract proposals 
        pursuant to solicited or unsolicited bids).
            ``(F) Community relations.
            ``(G) Dining facilities.
            ``(H) Professional and consulting services, including legal 
        services.
            ``(I) Compensation.
            ``(J) Selling and marketing.
            ``(K) Travel.
            ``(L) Public relations.
            ``(M) Hotel and meal expenses.
            ``(N) Expense of corporate aircraft.
            ``(O) Company-furnished automobiles.
            ``(P) Advertising.
    ``(2) The Federal Acquisition Regulation shall require that a 
contracting officer not resolve any questioned costs until the 
contracting officer has obtained--
            ``(A) adequate documentation with respect to such costs; 
        and
            ``(B) the opinion of the executive agency's contract 
        auditor on the allowability of such costs.
    ``(3) The Federal Acquisition Regulation shall provide that, to the 
maximum extent practicable, an executive agency's contract auditor be 
present at any negotiation or meeting with the contractor regarding a 
determination of the allowability of indirect costs of the contractor.
    ``(4) The Federal Acquisition Regulation shall require that all 
categories of costs designated in the report of an executive agency's 
contract auditor as questioned with respect to a proposal for 
settlement be resolved in such a manner that the amount of the 
individual questioned costs that are paid will be reflected in the 
settlement.
    ``(g) Applicability of Regulations to Subcontractors.--The 
regulations referred to in subsections (e) and (f)(1) shall require, to 
the maximum extent practicable, that such regulations apply to all 
subcontractors of a covered contract.
    ``(h) Contractor Certification Required.--(1) A proposal for 
settlement of indirect costs applicable to a covered contract shall 
include a certification by an official of the contractor that, to the 
best of the certifying official's knowledge and belief, all indirect 
costs included in the proposal are allowable. Any such certification 
shall be in a form prescribed in the Federal Acquisition Regulation.
    ``(2) The agency head concerned may, in an exceptional case, waive 
the requirement for certification under paragraph (1) in the case of 
any contract if the agency head--
            ``(A) determines in such case that it would be in the 
        interest of the United States to waive such certification; and
            ``(B) states in writing the reasons for that determination 
        and makes such determination available to the public.
    ``(i) Penalties for Submission of Cost Known as Not Allowable.--The 
submission to an executive agency of a proposal for settlement of costs 
for any period after such costs have been accrued that includes a cost 
that is expressly specified by statute or regulation as being 
unallowable, with the knowledge that such cost is unallowable, shall be 
subject to the provisions of section 287 of title 18, United States 
Code, and section 3729 of title 31, United States Code.
    ``(j) Contractor To Have Burden of Proof.--In a proceeding before a 
board of contract appeals, the United States Court of Federal Claims, 
or any other Federal court in which the reasonableness of indirect 
costs for which a contractor seeks reimbursement from the United States 
is in issue, the burden of proof shall be upon the contractor to 
establish that those costs are reasonable.
    ``(k) Proceeding Costs Not Allowable.--(1) Except as otherwise 
provided in this subsection, costs incurred by a contractor in 
connection with any criminal, civil, or administrative proceeding 
commenced by the United States or a State are not allowable as 
reimbursable costs under a covered contract if the proceeding (A) 
relates to a violation of, or failure to comply with, a Federal or 
State statute or regulation, and (B) results in a disposition described 
in paragraph (2).
    ``(2) A disposition referred to in paragraph (1)(B) is any of the 
following:
            ``(A) In the case of a criminal proceeding, a conviction 
        (including a conviction pursuant to a plea of nolo contendere) 
        by reason of the violation or failure referred to in paragraph 
        (1).
            ``(B) In the case of a civil or administrative proceeding 
        involving an allegation of fraud or similar misconduct, a 
        determination of contractor liability on the basis of the 
        violation or failure referred to in paragraph (1).
            ``(C) In the case of any civil or administrative 
        proceeding, the imposition of a monetary penalty by reason of 
        the violation or failure referred to in paragraph (1).
            ``(D) A final decision--
                    ``(i) to debar or suspend the contractor,
                    ``(ii) to rescind or void the contract, or
                    ``(iii) to terminate the contract for default,
        by reason of the violation or failure referred to in paragraph 
        (1).
            ``(E) A disposition of the proceeding by consent or 
        compromise if such action could have resulted in a disposition 
        described in subparagraph (A), (B), (C), or (D).
    ``(3) In the case of a proceeding referred to in paragraph (1) that 
is commenced by the United States and is resolved by consent or 
compromise pursuant to an agreement entered into by a contractor and 
the United States, the costs incurred by the contractor in connection 
with such proceeding that are otherwise not allowable as reimbursable 
costs under such paragraph may be allowed to the extent specifically 
provided in such agreement.
    ``(4) In the case of a proceeding referred to in paragraph (1) that 
is commenced by a State, the agency head that awarded the covered 
contract involved in the proceeding may allow the costs incurred by the 
contractor in connection with such proceeding as reimbursable costs if 
the agency head determines, in accordance with the Federal Acquisition 
Regulation, that the costs were incurred as a result of (A) a specific 
term or condition of the contract, or (B) specific written instructions 
of the agency.
    ``(5)(A) Except as provided in subparagraph (C), costs incurred by 
a contractor in connection with a criminal, civil, or administrative 
proceeding commenced by the United States or a State in connection with 
a covered contract may be allowed as reimbursable costs under the 
contract if such costs are not disallowable under paragraph (1), but 
only to the extent provided in subparagraph (B).
    ``(B)(i) The amount of the costs allowable under subparagraph (A) 
in any case may not exceed the amount equal to 80 percent of the amount 
of the costs incurred, to the extent that such costs are determined to 
be otherwise allowable and allocable under the Federal Acquisition 
Regulation.
    ``(ii) Regulations issued for the purpose of clause (i) shall 
provide for appropriate consideration of the complexity of procurement 
litigation, generally accepted principles governing the award of legal 
fees in civil actions involving the United States as a party, and such 
other factors as may be appropriate.
    ``(C) In the case of a proceeding referred to in subparagraph (A), 
contractor costs otherwise allowable as reimbursable costs under this 
paragraph are not allowable if (i) such proceeding involves the same 
contractor misconduct alleged as the basis of another criminal, civil, 
or administrative proceeding, and (ii) the costs of such other 
proceeding are not allowable under paragraph (1).
    ``(6) In this subsection:
            ``(A) The term `proceeding' includes an investigation.
            ``(B) The term `costs', with respect to a proceeding--
                    ``(i) means all costs incurred by a contractor, 
                whether before or after the commencement of any such 
                proceeding; and
                    ``(ii) includes--
                            ``(I) administrative and clerical expenses;
                            ``(II) the cost of legal services, 
                        including legal services performed by an 
                        employee of the contractor;
                            ``(III) the cost of the services of 
                        accountants and consultants retained by the 
                        contractor; and
                            ``(IV) the pay of directors, officers, and 
                        employees of the contractor for time devoted by 
                        such directors, officers, and employees to such 
                        proceeding.
            ``(C) The term `penalty' does not include restitution, 
        reimbursement, or compensatory damages.
    ``(l) Covered Contract Defined.--(1) In this section, the term 
`covered contract' means a contract for an amount in excess of $500,000 
that is entered into by an executive agency, except that such term does 
not include a fixed-price contract without cost incentives or any 
contract for the purchase of commercial items (as defined in section 
4(12).
    ``(2) Effective on October 1 of each year that is divisible by 5, 
the amount set forth in paragraph (1) shall be adjusted to the amount 
that is equal to the fiscal year 1994 constant dollar value of the 
amount set forth. An amount, as so adjusted, that is not evenly 
divisible by $50,000 shall be rounded to the nearest multiple of 
$50,000. In the case of an amount that is evenly divisible by $25,000 
but is not evenly divisible by $50,000, the amount shall be rounded to 
the next higher multiple of $50,000.''.

SEC. 2152. TRAVEL EXPENSES OF GOVERNMENT CONTRACTORS.

    Section 24(a) of the Office of Federal Procurement Policy Act (41 
U.S.C. 420) is amended by inserting after ``Under any contract'' the 
following: ``requiring submission of cost or pricing data or the 
negotiation of final indirect costs''.

                Subtitle C--Audit and Access to Records

SEC. 2251. AUTHORITY TO EXAMINE RECORDS OF CONTRACTORS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 2151, is further amended by inserting 
after section 37 the following new section:

``SEC. 38. EXAMINATION OF RECORDS OF CONTRACTOR.

    ``(a) Agency Authority.--The head of an executive agency, acting 
through an authorized representative--
            ``(1) is entitled to inspect the plant and audit the 
        records of--
                    ``(A) a contractor performing a cost-reimbursement, 
                incentive, time-and-materials, labor-hour, or price-
                redeterminable contract, or any combination of such 
                contracts, made by that executive agency under this 
                title; and
                    ``(B) a subcontractor performing any cost-
                reimbursement, incentive, time-and-materials, labor-
                hour, or price-redeterminable subcontract under a 
                contract referred to in subparagraph (A) or under any 
                combination of such contracts; and
            ``(2) shall, for the purpose of evaluating the accuracy, 
        completeness, and currency of cost or pricing data required to 
        be submitted pursuant to section 32 with respect to a contract 
        or subcontract, have the right to examine all records of the 
        contractor or subcontractor related to--
                    ``(A) the proposal for the contract or subcontract;
                    ``(B) the discussions conducted on the proposal;
                    ``(C) pricing of the contract or subcontract; or
                    ``(D) performance of the contract or subcontract.
    ``(b) Limitation on Preaward Audits Relating to Indirect Costs.--
The head of an agency may not perform a preaward audit to evaluate 
proposed indirect costs under any contract, subcontract, or 
modification to be entered into in accordance with this chapter in any 
case in which the contracting officer determines that the objectives of 
the audit can reasonably be met by accepting the results of an audit 
conducted by any other department or agency of the Federal Government 
within one year preceding the date of the contracting officer's 
determination.
    ``(c) Comptroller General Authority.--(1) Except as provided in 
paragraph (2), each contract awarded after using procedures other than 
sealed bid procedures shall provide that the Comptroller General and 
his representatives are entitled to examine any records of the 
contractor, or any of its subcontractors, that directly pertain to, and 
involve transactions relating to, the contract or subcontract.
    ``(2) Paragraph (1) does not apply to a contract or subcontract 
with a foreign contractor or foreign subcontractor if the agency head 
concerned determines, with the concurrence of the Comptroller General 
or his designee, that the application of that paragraph to the contract 
or subcontract would not be in the public interest. However, the 
concurrence of the Comptroller General or his designee is not 
required--
            ``(A) where the contractor or subcontractor is a foreign 
        government or agency thereof or is precluded by the laws of the 
        country involved from making its records available for 
        examination; and
            ``(B) where the agency head determines, after taking into 
        account the price and availability of the property and services 
        from United States sources, that the public interest would be 
        best served by not applying paragraph (1).
    ``(3) Paragraph (1) may not be construed to require a contractor or 
subcontractor to create or maintain any record that the contractor or 
subcontractor does not maintain in the ordinary course of business or 
pursuant to another provision of law.
    ``(d) Limitation.--The right of an agency head under subsection 
(a), and the right of the Comptroller General under subsection (c), 
with respect to a contract or subcontract shall expire three years 
after final payment under such contract or subcontract.
    ``(e) Inapplicability to Certain Contracts.--This section is 
inapplicable to contracts for utility services at rates not exceeding 
those established to apply uniformly to the public, plus any applicable 
reasonable connection charge.
    ``(f) Forms of Original Record Storage.--Nothing in this section 
shall be construed to preclude a contractor from duplicating or storing 
original records in electronic form.
    ``(g) Use of Images of Original Records.--The head of an agency 
shall not require a contractor or subcontractor to provide original 
records in an audit carried out pursuant to this section if the 
contractor or subcontractor provides photographic or electronic images 
of the original records and meets the following requirements:
            ``(1) The contractor or subcontractor has established 
        procedures to ensure that the imaging process preserves the 
        integrity, reliability, and security of the original records.
            ``(2) The contractor or subcontractor maintains an 
        effective indexing system to permit timely and convenient 
        access to the imaged records.
            ``(3) The contractor or subcontractor retains the original 
        records for a minimum of one year after imaging to permit 
        periodic validation of the imaging systems.
    ``(h) Records Defined.--In this section, the term `records' 
includes books, documents, accounting procedures and practices, and 
other data, regardless of type and regardless of whether such items are 
in written form, in the form of computer data, or in any other form.''.

                 Subtitle D--Cost Accounting Standards

SEC. 2301. REPEAL OF OBSOLETE DEADLINE REGARDING PROCEDURAL REGULATIONS 
              FOR THE COST ACCOUNTING STANDARDS BOARD.

    Section 26(f)(3) of the Office of Federal Procurement Policy Act 
(41 U.S.C. 422(f)(3)) is amended in the first sentence by striking out 
``Not later than 180 days after the date of the enactment of this 
section, the Administrator'' and inserting in lieu thereof ``The 
Administrator''.

 TITLE III--SIMPLIFIED ACQUISITION THRESHOLD AND SOCIOECONOMIC, SMALL 
                    BUSINESS, AND MISCELLANEOUS LAWS

              Subtitle A--Simplified Acquisition Threshold

                   PART I--ESTABLISHMENT OF THRESHOLD

SEC. 3001. ESTABLISHMENT OF SIMPLIFIED ACQUISITION THRESHOLD.

    (a) Establishment.--The Office of Federal Procurement Policy Act 
(41 U.S.C. 401 et seq.) is amended by inserting after section 4 the 
following new section:

``SEC. 4A. SIMPLIFIED ACQUISITION THRESHOLD.

    ``(a) In General.--The simplified acquisition threshold for 
purposes of Federal acquisitions is (except as provided in subsection 
(b)) the amount of $25,000, as adjusted pursuant to subsection (c).
    ``(b) Agencies With FACNET System.--In the case of an agency for 
which there is in effect a certification under section 39A of the 
Office of Federal Procurement Policy Act with respect to implementation 
of a FACNET system, the simplified acquisition threshold is the amount 
of $100,000, as adjusted pursuant to subsection (c).
    ``(c) Periodic Adjustment for Inflation.--The dollar amount in 
effect under subsection (a) shall be adjusted on October 1 of each year 
divisible by 5 to the equivalent amount in constant fiscal year 1990 
dollars (rounded to the nearest $1,000). The dollar amount in effect 
under subsection (b) shall be adjusted on October 1 of each year 
divisible by 5 to the equivalent amount in constant fiscal year 1993 
dollars (rounded to the nearest $1,000).
    ``(d) Special Rule for Contingency Operations.--In the case of a 
contract to be awarded and performed, or a purchase to be made, outside 
the United States in support of a contingency operation (as defined in 
section 101(a)(13) of title 10, United States Code), the amounts in 
effect under subsections (a) and (b) shall be two times the amounts 
otherwise applicable.''.
    (b) Conforming Amendment to Definition.--Section 4(11) of such Act 
is amended to read as follows:
            ``(11) The term `small purchase threshold' means the 
        simplified acquisition threshold established by section 4A.''.

SEC. 3002. FEDERAL ACQUISITION COMPUTER NETWORK.

    (a) Federal Acquisition Computer Network.--The Office of Federal 
Procurement Policy Act (41 U.S.C. 401 et seq.), as amended by section 
2251, is further amended by adding after section 38 the following new 
section:

``SEC. 39. FEDERAL ACQUISITION COMPUTER NETWORK (FACNET).

    ``(a) In General.--(1) The Administrator shall establish a program 
for the development and implementation of a Federal acquisition 
computer network system architecture. Any system developed in 
accordance with this architecture shall be known as a `FACNET system'. 
The Administrator shall assign a program manager for the FACNET system 
and shall provide for overall direction of policy and leadership in the 
development, coordination, installation, operation, and completion of 
implementation of the FACNET system by executive agencies.
    ``(2) The FACNET system architecture shall involve enabling 
technology and procurement electronic data interchange transaction 
sets. The enabling technology shall consist of computer network 
capabilities, supporting data bases, and standard interfaces that 
interconnect Federal Government automated systems to the network. The 
procurement electronic data interchange transaction sets shall 
facilitate the electronic interchange of standard procurement 
information between Federal Government and industry automated 
acquisition systems.
    ``(3) In carrying out paragraph (1), the Administrator shall 
consult with the Office of Information and Regulatory Affairs.
    ``(4) The Administrator shall carry out paragraph (1) not later 
than the date that is 3 years after the date of enactment of the 
Federal Acquisition Reform Act of 1994.
    ``(b) Functions of FACNET.--The FACNET system architecture shall 
have the capacity to carry out the following functions:
            ``(1) Government functions.--
                    ``(A) Provide widespread public notice of 
                solicitations for contract opportunities issued by an 
                executive agency and of orders to be made by the 
                agency.
                    ``(B) Allow responses to solicitations and requests 
                for information to be submitted to the procuring 
                activity through such system.
                    ``(C) Allow public notice of contract awards to be 
                provided through such system.
                    ``(D) In cases in which it is practicable, allow 
                questions regarding solicitations to be answered 
                through such system.
                    ``(E) Allow orders to be made through such system.
                    ``(F) In cases in which it is practicable, make 
                payments to contractors by bank card, electronic funds 
                transfer, or other automated methods.
                    ``(G) Archive data relating to each procurement 
                action made using such system.
            ``(2) User functions.--Allow private users to 
        electronically--
                    ``(A) access notice of solicitations for contract 
                opportunities issued by an agency and of orders to be 
                made by the agency;
                    ``(B) selectively access and review solicitations 
                and orders issued by the agency;
                    ``(C) respond to solicitations and notices of 
                orders issued by the agency;
                    ``(D) receive orders from the agency;
                    ``(E) access information on contract awards made by 
                the agency; and
                    ``(F) in cases in which it is practicable, receive 
                payment by bank card, electronic funds transfer, or 
                other automated means.
            ``(3) General functions.--
                    ``(A) Allow the electronic exchange of procurement 
                information between the private sector and the Federal 
                Government.
                    ``(B) Employ nationally and internationally 
                recognized data formats that serve to broaden and ease 
                the electronic interchange of data.
                    ``(C) Allow convenient and universal user access 
                through a single point of entry.
    ``(c) Functions of Administrator of General Services.--The 
Administrator of General Services shall do the following:
            ``(1) Provide technical support for FACNET systems by doing 
        the following:
                    ``(A) Coordinate with the Administrator to 
                facilitate the efficient and widespread implementation 
                of various FACNET systems by executive agencies. This 
                shall include interfacing FACNET systems to other 
                systems, such as the Federal Government bank card and 
                Electronic Funds Transfer payment systems.
                    ``(B) Assist the Director of the National Institute 
                of Standards and Technology in the development and 
                application of appropriate Federal Information 
                Processing Standards.
                    ``(C) Prepare a technical plan for coordinating the 
                design, development, implementation, operation, and 
                maintenance of the FACNET system architecture. The plan 
                shall include roles and responsibilities, major 
                milestones, cost estimates, and performance 
                requirements.
            ``(2) Ensure compliance with section 111 of the Federal 
        Property and Administrative Services Act of 1949 in the 
        implementation of FACNET systems by executive agencies, 
        including by limiting the scope of delegations under subsection 
        (a) of that section.
            ``(3) Evaluate progress by executive agencies in 
        implementing FACNET systems, and recommend changes in that 
        implementation to the program manager assigned by the 
        Administrator under subsection (a).
            ``(4) Submit to the Congress, on the date that is one year 
        after the date of the enactment of the Federal Acquisition 
        Reform Act of 1994 and on that date in each of the 3 years 
        thereafter, a report on the overall progress by the executive 
        branch of the Federal Government and by each executive agency 
        in implementing the FACNET system architecture.
    ``(d) Functions of National Institute of Standards and 
Technology.--The Director of the National Institute of Standards and 
Technology shall--
            ``(1) ensure that the FACNET system architecture complies 
        with Federal Information Processing Standards;
            ``(2) issue additional standards for the FACNET system 
        architecture as necessary; and
            ``(3) establish tests to facilitate the aims of this 
        section and support policies established by the Administrator 
        under this section.''.
    (b) Technical Amendments.--Section 18 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 416) is amended--
            (1) in subsection (a)(1)(A), by striking out ``notice'' in 
        the matter following clause (ii) and inserting in lieu thereof 
        ``notice of solicitation''; and
            (2) in subsection (d), by striking out ``a notice under 
        subsection (e)'' in the first sentence and inserting in lieu 
        thereof ``a notice of solicitation under subsection (a)''.

SEC. 3003. IMPLEMENTATION IN EXECUTIVE AGENCIES.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 3002, is further amended by adding after 
section 39 the following new section:

``SEC. 39A. IMPLEMENTATION OF FACNET SYSTEMS.

    ``(a) Implementation of FACNET Systems.--(1) The head of each 
executive agency shall implement the Federal acquisition computer 
network (`FACNET') systems required by section 39.
    ``(2) In implementing the FACNET systems pursuant to paragraph (1), 
the head of an executive agency shall consult with the Administrator 
for Federal Procurement Policy and the Administrator for General 
Services.
    ``(b) Designation of Agency Program Manager.--(1) The head of each 
executive agency shall designate a program manager to have 
responsibility for implementation of FACNET systems for that agency and 
otherwise to implement this section.
    ``(2) A program manager designated under this subsection for an 
executive agency shall--
            ``(A) report directly to the senior procurement executive 
        designated for the agency under section 16(4);
            ``(B) be responsible for the timely and cost-effective 
        implementation of the FACNET system architecture for the agency 
        in a manner that is responsive to the procurement needs of the 
        agency, national business needs, and the public's interest in 
        open government;
            ``(C) develop plans for phasing-in the implementation of 
        FACNET systems for the procuring activities of the executive 
        agency and phasing-out local network systems that perform 
        comparable procurement functions;
            ``(D) participate in the interagency development of 
        standard procurement electronic data interchange transaction 
        sets; and
            ``(E) in carrying out this section, comply with guidelines 
        issued by the Administrator under this section and program 
        directives issued by the Administrator of General Services 
        under section 111 of the Federal Property and Administrative 
        Services Act of 1949.
    ``(c) Certification of FACNET System.--(1) When the senior 
procurement official of an executive agency determines that a procuring 
activity of the agency has implemented an interim FACNET system (as 
defined in subsection (f)), the senior procurement official shall 
certify to the Administrator for Federal Procurement Policy that the 
agency has implemented an interim FACNET system.
    ``(2) When the head of an executive agency, with the concurrence of 
the Administrator for Federal Procurement Policy, determines that the 
agency has implemented a full FACNET system (as defined in subsection 
(g)), the head of the agency shall certify to Congress that the agency 
has implemented a full FACNET system.
    ``(3) The head of each executive agency shall provide for 
implementation of both interim FACNET system and full FACNET system, 
with priority on providing convenient and universal user access as 
required by section 39(b)(3)(C), in that agency as soon as practicable 
after the date of the enactment of the Federal Acquisition Reform Act 
of 1994.
    ``(d) Higher Simplified Acquisition Threshold When FACNET System 
Certified.--A certification to the Administrator or Congress under 
subsection (c) shall be considered to be a certification for purposes 
of the higher simplified acquisition threshold under section 4A(b), 
except that a certification under paragraph (1) of subsection (c) shall 
not constitute such a certification in the case of solicitations issued 
after the end of the three-year period beginning on the date of the 
enactment of the Federal Acquisition Reform Act of 1994.
    ``(e) Exemption From Notice Provisions.--An executive agency is 
exempt from the requirements of section 18(a)(1) of the Office of 
Federal Procurement Policy Act (41 U.S.C. 416(a)(1)) if the senior 
procurement official of the agency makes the certification described in 
subsection (c)(1).
    ``(f) Implementation of Interim FACNET System.--A procuring 
activity shall be considered to have implemented an interim FACNET 
system if--
            ``(1) with respect to each procurement expected to be in an 
        amount less than the simplified acquisition threshold, the 
        procuring activity has implemented the FACNET functions 
        described in paragraphs (1)(A) and (2)(A) of section 39(b), as 
        in effect on the effective date of section 3002 of the Federal 
        Acquisition Reform Act of 1994; and
            ``(2) with respect to each procurement expected to be in an 
        amount less than the simplified acquisition threshold, the 
        procuring activity issues notices of solicitations through a 
        system with those functions for all contracting opportunities 
        other than in cases covered by section 18(c).
    ``(g) Implementation of Full FACNET System.--(1) An executive 
agency shall be considered to have implemented a full FACNET system if 
(except in the case of procuring activities (or portions thereof) of 
the agency for which the head of the agency determines that 
implementation is not cost effective or practicable) the executive 
agency has implemented all of the FACNET functions described in section 
39(b), as in effect on the effective date of section 3002 of the 
Federal Acquisition Reform Act of 1994.
    ``(2) For purposes of paragraph (1), an executive agency may not be 
considered to have implemented a full FACNET system if--
            ``(A) the head of the agency has determined that 
        implementation of FACNET system is not cost effective or 
        practicable in the case of certain procuring activities (or 
        portions thereof) of the agency; and
            ``(B) the percentage of the procurement actions executed by 
        those procuring activities (or portions thereof) for the 
        preceding fiscal year is greater than 25 percent of the total 
        number of procurement actions executed by the agency for that 
        year.
    ``(h) Procuring Activities Originally Excluded in Certification.--
(1) If the head of an executive agency, in certifying under subsection 
(c) that the agency has implemented a full FACNET system, determines 
that such implementation is not cost effective or practicable in the 
case of any procuring activity (or portion thereof) of that agency, 
then that certification shall not apply under section 4A(b) to any 
procurement action by that procuring activity (or portion thereof).
    ``(2) If the head of an executive agency determines that a full 
FACNET system has subsequently been implemented for that procuring 
activity (or portion thereof), the head of the agency shall make a 
certification to Administrator for Federal Procurement Policy in the 
same manner as a certification under paragraph (2) of subsection (c), 
and such certification shall have the same effect with respect to that 
procuring activity (or portion thereof) as if made under such paragraph 
of subsection (c).''.

                 PART II--SIMPLIFICATION OF PROCEDURES

SEC. 3011. SIMPLIFIED ACQUISITION PROCEDURES.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 3001, is further amended by inserting 
after section 4A the following new section:

``SEC. 4B. SIMPLIFIED ACQUISITION PROCEDURES.

    ``(a) Simplified Procedures Required.--In order to promote 
efficiency and economy in contracting and to avoid unnecessary burdens 
for agencies and contractors, the Federal Acquisition Regulation shall 
provide for special simplified procedures for contracts for acquisition 
of property and services that are not in excess of the simplified 
acquisition threshold.
    ``(b) Division of Contracts Prohibited.--A proposed purchase or 
contract for an amount above the simplified acquisition threshold may 
not be divided into several purchases or contracts for lesser amounts 
in order to use the simplified acquisition procedures required by 
subsection (a).
    ``(c) Promotion of Competition.--In using simplified acquisition 
procedures, the head of an executive agency shall promote competition 
to the maximum extent practicable.''.

SEC. 3012. SMALL BUSINESS PROVISIONS.

    (a) Interim Reporting Rule.--Notwithstanding section 4A of the 
Office of Federal Procurement Policy Act, as added by section 3001, 
during the 3-year period beginning on the date of the issuance in final 
form of revisions to the Federal Acquisition Regulation under section 
4C of the Office of Federal Procurement Policy Act, as added by section 
3013, procuring activities shall continue to report, pursuant to 
section 19(d) of the Office of Federal Procurement Policy Act (41 
U.S.C. 417(d)), procurement awards with a dollar value of at least 
$25,000, but less than $100,000, in conformity with the procedures for 
the reporting of a contract award in excess of $25,000 in effect on 
November 18, 1993.
    (b) Functions of Administrator for Federal Procurement Policy.--
Section 6(d) of the Office of Federal Procurement Policy Act (41 U.S.C. 
405(d)) is amended--
            (1) in paragraph (7), by striking out ``and'' after the 
        semicolon at the end; and
            (2) by redesignating paragraph (8) as paragraph (10) and 
        inserting after paragraph (7) the following:
            ``(8) developing policies, in consultation with the 
        Administrator of the Small Business Administration, that ensure 
        that small businesses and small businesses owned and controlled 
        by socially and economically disadvantaged persons are provided 
        with the maximum practicable opportunities to participate in 
        procurements that are conducted for amounts below the 
        simplified acquisition threshold;
            ``(9) developing policies that will promote achievement of 
        goals for participation by small businesses and small 
        businesses owned and controlled by socially and economically 
        disadvantaged individuals; and''.

SEC. 3013. PROCEDURES FOR PURCHASES BELOW MICRO-PURCHASE THRESHOLD.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 3011, is further amended by inserting 
after section 4B the following new section:

``SEC. 4C. PROCEDURES APPLICABLE TO PURCHASES BELOW MICRO-PURCHASE 
              THRESHOLD.

    ``(a) Requirements.--(1) The head of each executive agency shall 
ensure that procuring activities of that agency, in awarding a contract 
with a price exceeding the micro-purchase threshold, comply with the 
requirements of section 8(a) of the Small Business Act (15 U.S.C. 
637(a)) and section 45 of this Act.
    ``(2) The authority under part 13.106(a)(1) of the Federal 
Acquisition Regulation (48 C.F.R. 13.106(a)(1)), as in effect on 
November 18, 1993, to make purchases without securing competitive 
quotations does not apply to any purchases with a price exceeding the 
micro-purchase threshold.
    ``(3) The head of each executive agency shall ensure that procuring 
activities of that agency comply with the requirements of section 40, 
relating to the small business reserve.
    ``(b) Certain Contracting Officials Not To Be Considered 
Procurement Officials.--Any civilian officer or employee, and any 
member of the Armed Forces, who has authority to enter into contracts 
but whose contracting authority is limited to the amount of the micro-
purchase threshold or less is not a procurement official as defined in 
paragraph (3)(A) of section 27(p).
    ``(c) Implementation Through FAR.--The provisions of subsections 
(a) and (b) shall be implemented through the Federal Acquisition 
Regulation.
    ``(d) Micro-Purchase Threshold Defined.--For purposes of this 
subsection, the micro-purchase threshold is the amount of $2,500, 
adjusted on October 1 of each year divisible by 5 to the equivalent 
amount in constant fiscal year 1993 dollars (rounded to the nearest 
$100).''.

SEC. 3014. PROCUREMENT NOTICE.

    (a) Continuation of Existing Notice Thresholds.--Subsection (a) of 
section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 
416) is amended as follows:
            (1) Paragraph (1) is amended--
                    (A) by striking out ``the small purchase 
                threshold'' each place it appears and inserting in lieu 
                thereof ``the simplified acquisition threshold'';
                    (B) by striking out ``(c)--'' in the matter 
                preceding subparagraph (A) and inserting in lieu 
                thereof ``(c):'';
                    (C) by striking out ``an executive'' at the 
                beginning of subparagraphs (A) and (C) and inserting in 
                lieu thereof ``An executive'';
                    (D) by striking out the semicolon at the end of 
                subparagraph (A) and inserting in lieu thereof a 
                period; and
                    (E) by amending subparagraph (B) to read as 
                follows:
            ``(B) An executive agency intending to solicit (including 
        orally or by any other means) bids or proposals for a contract 
        for property or services for a price expected to exceed $10,000 
        but not to exceed the simplified acquisition threshold shall 
        post a notice of solicitation described in subsection (b). The 
        notice shall be posted at the contracting office issuing the 
        solicitation or shall be made available through an electronic 
        system with a FACNET system that at least meets the 
        requirements of paragraphs (1)(A) and (2)(A) of section 39(b). 
        The notice shall be posted for a period of not less than 10 
        days, except that in the case of a posting made through an 
        electronic system with such a FACNET system, the posting may be 
        for a period of less than 10 days as prescribed in the Federal 
        Acquisition Regulation.''.
            (2) Paragraph (3)(B) is amended by inserting after ``(B)'' 
        the following: ``in the case of a contract or order for an 
        amount expected to exceed the simplified acquisition 
        threshold,''.
    (b) Opportunity for All Responsible Potential Offerors.--Such 
subsection is further amended by adding at the end the following:
    ``(4) An executive agency intending to solicit offers for a 
contract for which a notice of solicitation is required to be posted 
under paragraph (1)(B) shall ensure that all potential offerors are 
permitted to respond to the solicitation for the contract within the 
period of time specified in the solicitation for the submission of 
offers.''.
    (c) Establishment of Deadline for Submission of Offers.--Such 
subsection is further amended by inserting after paragraph (4), as 
added by subsection (b), the following new paragraph:
    ``(5) An executive agency shall establish a deadline for the 
submission of all bids or proposals in response to a notice of 
solicitation with respect to which no such deadline is provided by 
statute.''.
    (d) Exceptions.--Subsection (c) of such section is amended by 
adding at the end the following new paragraph:
    ``(4)(A) The requirements of subsection (a)(1) shall not apply in 
the case of an acquisition accomplished through the use of an 
electronic system within a FACNET system, as described in section 39 
and certified under section 39A.
    ``(B) The Federal Acquisition Regulation shall provide for minimum 
periods of time for submission of offers for acquisitions described in 
subparagraph (A). Such periods shall provide offerors a reasonable 
opportunity to respond.
    ``(C) A notice of solicitation of bids or proposals for an 
acquisition described in subparagraph (A) shall include the matter 
described in under subsection (b).''.

SEC. 3015. SMALL BUSINESS RESERVATION.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 3003, is further amended by adding after 
section 39A the following new section:

``SEC. 40. CONTRACTS: SMALL BUSINESS RESERVATION.

    ``(a) Requirement.--Each contract for the procurement of property 
and services that has an anticipated value not in excess of $100,000 
shall be reserved exclusively for small business concerns unless the 
contracting officer is unable to obtain offers from two or more small 
business concerns that (1) are competitive with market prices, and (2) 
are competitive with regard to the quality and delivery of the goods or 
services being procured.
    ``(b) Offers To Be Considered.--In carrying out subsection (a), a 
contracting officer shall consider any offer that is responsive and 
that is received in a timely manner from an eligible small business 
offeror.
    ``(c) Relationship to Other Laws.--Nothing in subsection (a) shall 
be construed as precluding an award of a contract with a value not in 
excess of $100,000 under the authority of section 45 of this Act and 
section 12 of the Business Opportunity Development Reform Act of 1988 
(Public Law 100-656; 15 U.S.C. 644 note).
    ``(d) Payment Terms and Disbursement.--In the case of contracts 
referred to in subsection (a) that are entered into with small business 
concerns, contracting officers shall, wherever circumstances permit, 
provide for the use of fast payment terms and the disbursement of 
payment through electronic fund transfer.''.

SEC. 3016. GAO TEST AND REPORT ON PERFORMANCE OF SIMPLIFIED ACQUISITION 
              THRESHOLD.

    (a) Performance Test.--The Comptroller General of the United States 
shall collect data and assess the effects of the simplified acquisition 
threshold, as established in section 4A of the Office of Federal 
Procurement Policy Act, on the participation of small business concerns 
(including small business concerns owned and controlled by socially and 
economically disadvantaged individuals) in procurement awards of less 
than $100,000 and the benefits and detriments, if any, to the procuring 
activities of the various Executive agencies.
    (b) Data To Be Collected.--Data collected under subsection (a) 
shall include data regarding whether the establishment of the 
simplified acquisition threshold has improved the acquisition process 
in terms of reduced paperwork, financial or other savings to the 
Federal Government, and any increase in the number of contractors 
participating in the contracting process.
    (c) Period.--Data shall be collected for purposes of subsection (a) 
during the period beginning with the first full fiscal year quarter 
after the effective date of the amendments made by section 3001 and 
ending on September 30, 1997.
    (d) Report.--By March 1, 1998, the Comptroller General shall submit 
to the Committee on Government Operations of the House of 
Representatives, the Committee on Governmental Affairs of the Senate, 
and the Committees on Small Business of the House of Representatives 
and the Senate a report on the effects of the establishment of the 
simplified acquisition threshold by the amendments made by section 
3001.

     PART III--INAPPLICABILITY OF LAWS TO, AND WAIVER OF LAWS FOR, 
     ACQUISITIONS NOT IN EXCESS OF SIMPLIFIED ACQUISITION THRESHOLD

SEC. 3021. INAPPLICABILITY OF FUTURE ENACTED PROCUREMENT LAWS TO 
              CONTRACTS NOT EXCEEDING THE SIMPLIFIED ACQUISITION 
              THRESHOLD.

    Section 4A of the Office of Federal Procurement Policy Act, as 
added by section 3001, is amended by adding at the end the following 
new subsection:
    ``(e) Construction With Future Enactments.--A provision of law 
enacted after the date of the enactment of the Federal Acquisition 
Reform Act of 1994 shall not be construed as applicable to purchases of 
property or services by an executive agency for an amount not in excess 
of the simplified acquisition threshold unless that provision of law 
specifically refers to this section and specifically states that such 
provision of law modifies or supersedes this section.''.

SEC. 3022. AUTHORITY TO WAIVE CERTAIN PROCUREMENT LAWS FOR CONTRACTS 
              NOT EXCEEDING THE SIMPLIFIED ACQUISITION THRESHOLD.

    Section 4A of the Office of Federal Procurement Policy Act, as 
amended by section 3021, is further amended by adding at the end the 
following new subsection:
    ``(f) Authority To Waive Certain Procurement Laws.--
            ``(1) In general.--Subject to paragraphs (2) and (3), the 
        Federal Acquisition Regulatory Council may waive any provision 
        of law subject to implementation by the Council or by an 
        executive agency under section 25 of this Act that sets forth 
        policies, procedures, requirements, restrictions, or contract 
        clauses that are not necessary to implement any of the 
        Governmental policies set forth in paragraph (2) under a 
        contract in an amount not greater than the simplified 
        acquisition threshold. Any waiver under this subsection shall 
        apply to the procurement by executive agencies of property and 
        services not in excess of the simplified acquisition threshold.
            ``(2) Determination required.--The Federal Acquisition 
        Regulatory Council may waive a provision of law under this 
        section only if the Council determines that the waiver will not 
        adversely affect--
                    ``(A) national security interests;
                    ``(B) the economy, efficiency, and effectiveness of 
                Federal procurement;
                    ``(C) full and open competition;
                    ``(D) the Federal Government's ability to obtain 
                property and services of the requisite quality, at a 
                reasonable price, and within the time needed;
                    ``(E) small and small disadvantaged business 
                concerns; or
                    ``(F) fair dealings and equitable relationships 
                with the private sector.
            ``(3) Limitations.--The Federal Acquisition Regulatory 
        Council may not under this section waive a requirement that is 
        established by statute or regulation under any of the following 
        provisions:
                    ``(A) Section 2533 of title 10, United States Code 
                (relating to limitation on procurement of goods which 
                are other than American goods).
                    ``(B) Section 2631 of title 10, United States Code 
                (relating to preference to United States vessels for 
                transportation of supplies).
                    ``(C) The Small Business Act (15 U.S.C. 631 et 
                seq.).
                    ``(D) Section 4124 of title 18, United States Code 
                (relating to purchase of prison-made products by 
                Federal departments).
                    ``(E) Title 18, United States Code, and any other 
                law imposing a criminal penalty.
                    ``(F) Section 503 of the Rehabilitation Act of 1973 
                (29 U.S.C. 793) (relating to employment under Federal 
                contracts for individuals with disabilities).
                    ``(G) Section 4212 of title 38, United States Code 
                (relating to veterans' employment emphasis under 
                Federal contracts).
                    ``(H) The Act of August 24, 1935 (40 U.S.C. 270a et 
                seq.), commonly referred to as the `Miller Act'.
                    ``(I) The Act of March 3, 1931 (40 U.S.C. 276a et 
                seq.), commonly referred to as the `Davis-Bacon Act'.
                    ``(J) Title IX of the Federal Property and 
                Administrative Services Act of 1949 (40 U.S.C. 541 et 
                seq.), popularly referred to as the `Brooks Architect-
                Engineers Act'.
                    ``(K) Section 111 of the Federal Property and 
                Administrative Services Act of 1949 (40 U.S.C. 759), 
                popularly referred to as the `Brooks Automatic Data 
                Processing Act'.
                    ``(L) Section 901(b) of the Merchant Marine Act, 
                1936 (46 U.S.C. app. 1241(b)) (relating to cargo 
                preference for American vessels).
                    ``(M) Title III of the Act of March 3, 1933 (41 
                U.S.C. 10a et seq.), commonly referred to as the `Buy 
                American Act'.
                    ``(N) The Act of June 25, 1938 (41 U.S.C. 46 et 
                seq.), commonly referred to as the Wagner-O'Day Act, 
                that was revised and reenacted in the Act of June 23, 
                1971 (85 Stat. 77), commonly referred to as the 
                `Javits-Wagner-O'Day Act'.
                    ``(O) The Service Contract Act of 1965 (41 U.S.C. 
                351-358).
                    ``(P) Section 27 of this Act (41 U.S.C. 423), other 
                than subsection (e) of that section (relating to 
                procurement integrity).
                    ``(Q) Executive Order No. 11246 (or any successor 
                to that order), dated September 24, 1965.''.

                    PART IV--REVISION OF REGULATIONS

SEC. 3081. REVISION REQUIRED.

    (a) Federal Acquisition Regulation.--(1) Not later than one year 
after the date of the enactment of this Act, the Federal Acquisition 
Regulatory Council established by section 25(a) of the Office of 
Federal Procurement Policy Act (41 U.S.C. 421(a)) shall--
            (A) review the Federal Acquisition Regulation to identify 
        regulations that are applicable to acquisitions in excess of a 
        specified amount that is less than $100,000; and
            (B) amend the regulations so identified as necessary to 
        provide that such regulations do not apply to acquisitions that 
        are not in excess of the simplified acquisition threshold.
    (2) Paragraph (1) does not apply in the case of a regulation for 
which such an amendment would not be in the national interest, as 
determined by the Council.
    (b) Supplemental Regulations.--Not later than 90 days after the 
date on which the review required by subsection (a) is completed, the 
head of each executive agency that has issued regulations, policies, or 
procedures referred to in section 25(c)(2) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 421(c)(2)) shall--
            (1) identify any such regulation, policy, or procedure that 
        is applicable to acquisitions in excess of a specified amount 
        that is less than $100,000; and
            (2) pursuant to section 22 of such Act (41 U.S.C. 418b), 
        publish amendments to the regulations so identified as 
        necessary to provide that such regulations, policies, and 
        procedures do not apply to acquisitions that are not in excess 
        of the simplified acquisition threshold.
    (c) Definitions.--In this section:
            (1) The term ``simplified acquisition threshold'' has the 
        meaning given such term in section 4A of the Office of Federal 
        Procurement Policy Act, as added by section 3001.
            (2) The term ``executive agency'' has the meaning given 
        such term in section 3(a) of the Federal Property and 
        Administrative Services Act of 1949 (41 U.S.C. 472(b)).

           Subtitle B--Socioeconomic and Small Business Laws

SEC. 3101. PAYMENT PROTECTIONS FOR SUBCONTRACTORS AND SUPPLIERS.

    (a) Regulations.--
            (1) In general.--The Administrator for Federal Procurement 
        Policy shall prescribe in regulations the requirements 
        described in paragraph (2).
            (2) Procedures relating to compliance with payment terms.--
        (A) Under procedures established in the regulations, upon the 
        assertion by a subcontractor or supplier of a contractor 
        performing a Government contract that the subcontractor or 
        supplier has not been paid by the prime contractor in 
        accordance with the payment terms of the subcontract, purchase 
        order, or other agreement with the prime contractor, the 
        contracting officer may determine the following:
                    (i) With respect to a construction contract, 
                whether the contractor has made progress payments to 
                the subcontractor or supplier in compliance with 
                chapter 39 of title 31, United States Code.
                    (ii) With respect to a contract other than a 
                construction contract, whether the contractor has made 
                progress or other payments to the subcontractor or 
                supplier in compliance with the terms of the 
                subcontract, purchase order, or other agreement with 
                the prime contractor.
                    (iii) With respect to either a construction 
                contract or a contract other than a construction 
                contract, whether the contractor has made final payment 
                to the subcontractor or supplier in compliance with the 
                terms of the subcontract, purchase order, or other 
                agreement with the prime contractor.
                    (iv) With respect to either a construction contract 
                or a contract other than a construction contract, 
                whether any certification of payment of the 
                subcontractor or supplier accompanying the contractor's 
                payment request to the Government is accurate.
            (B) If the contracting officer determines that the prime 
        contractor is not in compliance with any matter referred to in 
        clause (i), (ii), or (iii) of subparagraph (A), the contracting 
        officer may, under procedures established in the regulations--
                    (i) encourage the prime contractor to make timely 
                payment to the subcontractor or supplier; or
                    (ii) reduce or suspend progress payments with 
                respect to amounts due to the prime contractor.
            (C) If the contracting officer determines that a 
        certification referred to in clause (iv) of subparagraph (A) is 
        inaccurate in any material respect, the contracting officer 
        shall, under procedures established in the regulations, 
        initiate appropriate administrative or other remedial action.
            (D) This paragraph shall apply with respect to any 
        Government contract that is in effect on the date of 
        promulgation of the regulations under this subsection or that 
        is awarded after such date.
    (b) Inapplicability to Certain Contracts.--The regulations 
prescribed under this section shall not apply to the following 
contracts:
            (1) A contract that is for an amount not in excess of the 
        simplified acquisition threshold (within the meaning of section 
        4A of the Office of Federal Procurement Policy Act).
            (2) A contract for the acquisition of commercial items (as 
        that term is defined in section 4(12) of the Office of Federal 
        Procurement Policy Act.
    (c) Regulations Deadlines.--(1) The Administrator for Federal 
Procurement Policy shall publish proposed regulations under subsection 
(a) not later than 180 days after the date of the enactment of this 
Act.
    (2) The Administrator shall publish final regulations under 
subsection (a) not later than 270 days after the date of the enactment 
of this Act.

SEC. 3102. SMALL BUSINESS PROCUREMENT ADVISORY COUNCIL.

    (a) Establishment.--There is hereby established an interagency 
council to be known as the ``Small Business Procurement Advisory 
Council'' (hereinafter in this section referred to as the ``Council'').
    (b) Duties.--The duties of the Council are--
            (1) to serve as a forum for discussion of issues and 
        problems relating to, and ideas for improvement of, small 
        business procurement matters within the Federal Government;
            (2) to provide information to other departments and 
        agencies of the Federal Government about small business 
        procurement; and
            (3) to issue advisory reports to the Small Business 
        Administration and the Office of Federal Procurement Policy on 
        small business procurement matters.
    (c) Membership.--The Council shall be composed of the following 
members:
            (1) The Administrator of the Small Business Administration 
        (or the designee of the Administrator).
            (2) The Administrator for Federal Procurement Policy (or 
        the designee of the Administrator).
            (3) The Director of the Minority Business Development 
        Agency.
            (4) The head of each Office of Small and Disadvantaged 
        Business Utilization in each Federal agency having procurement 
        powers.
    (d) Co-Chairmen.--The Council shall be co-chaired by the 
Administrator of the Small Business Administration and the 
Administrator for Federal Procurement Policy.
    (e) Meetings.--The Council shall meet at the call of the chairmen, 
but not less often than four times a year and once each quarter.
    (f) Director.--The Chief Counsel for Advocacy of the Small Business 
shall serve as the director of the Council. The director may not vote 
on matters before the council except in the case of a tie vote among 
the members. The duties of the director shall be determined by the 
chairmen of the Council. The Chief Counsel for Advocacy shall receive 
no additional pay by reason of the counsel's service as director of the 
Council.
    (g) Annual Report.--Not later than 30 days after the end of each 
fiscal year, the Council shall submit to Congress a report detailing 
the activities of the Council in the preceding fiscal year in carrying 
out this section.

               Subtitle C--Miscellaneous Acquisition Laws

SEC. 3151. RESTRICTION ON USE OF NONCOMPETITIVE PROCEDURES FOR 
              PROCUREMENT FROM A SPECIFIED SOURCE.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 3015, is further amended by adding at the 
end the following new section:

``SEC. 41. RESTRICTION ON USE OF NONCOMPETITIVE PROCEDURES FOR 
              PROCUREMENT FROM A SPECIFIED SOURCE.

    ``(a) Policy.--It is the policy of Congress that no legislation 
should be enacted that requires a procurement by an executive agency to 
be made from a specified non-Federal Government source.
    ``(b) Conditions.--A provision of law may not be construed as 
requiring a procurement by an executive agency to be made from a 
specified non-Federal Government source unless that provision of law--
            ``(1) specifically refers to this subsection;
            ``(2) specifically identifies the particular non-Federal 
        Government source involved; and
            ``(3) specifically states that the procurement from that 
        source is required by such provision of law in contravention of 
        the policy set forth in subsection (a).''.

SEC. 3152. REPEAL OF OBSOLETE PROVISION.

    Section 308 of the Federal Property and Administrative Services Act 
of 1949 (41 U.S.C. 258) is repealed.

                     TITLE IV--STANDARDS OF CONDUCT

SEC. 4001. CONTRACTING FUNCTIONS PERFORMED BY FEDERAL PERSONNEL.

    (a) Amendment of OFPP Act.--The Office of Federal Procurement 
Policy Act, as amended by section 1092, is further amended by inserting 
after section 22 the following new section 23:

``SEC. 23. CONTRACTING FUNCTIONS PERFORMED BY FEDERAL PERSONNEL.

    ``(a) Limitation on Payment for Advisory and Assistance Services.--
(1) No person who is not an employee may be paid by an agency for 
services to conduct evaluations or analyses of any aspect of a proposal 
submitted for an acquisition unless employees with adequate training 
and capabilities to perform such evaluations and analyses are not 
readily available within the agency or another Federal agency, as 
determined in accordance with standards and procedures prescribed in 
the Federal Acquisition Regulation.
    ``(2) In the administration of this subsection, the head of each 
agency shall determine in accordance with the standards and procedures 
set forth in the Federal Acquisition Regulation whether--
            ``(A) a sufficient number of employees within the agency or 
        another Federal agency are readily available to perform a 
        particular evaluation or analysis for the agency head making 
        the determination; and
            ``(B) the readily available employees have the training and 
        capabilities necessary to perform the evaluation or analysis.
    ``(b) Definition.--For purposes of this section, the term 
`employee' has the meaning given such term in section 2105 of title 5, 
United States Code.''.
    (b) Requirement for Guidance and Regulations.--
            (1) Guidance and regulations required.--The Federal 
        Acquisition Regulatory Council established by section 25(a) of 
        the Office of Federal Procurement Policy Act (41 U.S.C. 421(a)) 
        shall--
                    (A) review part 37 of title 48 of the Code of 
                Federal Regulations as it relates to the use of 
                advisory and assistance services; and
                    (B) provide guidance and promulgate regulations 
                regarding--
                            (i) what actions Federal agencies are 
                        required to take to determine whether expertise 
                        is readily available within the Federal 
                        Government before contracting for advisory and 
                        technical services to conduct acquisitions; and
                            (ii) the manner in which Federal employees 
                        with expertise may be shared with agencies 
                        needing expertise for such acquisitions.
            (2) Definition.--In paragraph (1), the term ``employee'' 
        has the meaning given such term in section 2105 of title 5, 
        United States Code.

SEC. 4002. REPEAL OF EXECUTED REQUIREMENT FOR STUDY AND REPORT.

    Section 17 of the Office of Federal Procurement Policy Act (41 
U.S.C. 415) is repealed.

SEC. 4003. INTERESTS OF MEMBERS OF CONGRESS.

    Section 3741 of the Revised Statutes (41 U.S.C. 22) is amended to 
read as follows:
    ``No member of Congress shall be admitted to any share or part of 
any contract or agreement made, entered into, or accepted by or on 
behalf of the United States, or to any benefit to arise thereupon.''.

SEC. 4004. WAITING PERIOD FOR SIGNIFICANT CHANGES PROPOSED FOR 
              ACQUISITION REGULATIONS.

    Section 22(a) of the Office of Federal Procurement Policy Act (41 
U.S.C. 418b) is amended--
            (1) by striking out ``30 days'' and inserting in lieu 
        thereof ``60 days''; and
            (2) by adding at the end the following: ``Notwithstanding 
        the preceding sentence, such a policy, regulation, procedure, 
        or form may take effect earlier than 60 days after the 
        publication date when there are compelling circumstances for 
        the earlier effective date, but in no event may that effective 
        date be less than 30 days after the publication date.''.

                       TITLE V--COMMERCIAL ITEMS

SEC. 5001. DEFINITIONS.

    (a) Definitions.--Section 4 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 403) is amended by adding at the end the 
following new paragraphs:
            ``(12) The term `commercial item' means any of the 
        following:
                    ``(A) Any item of a type customarily used in the 
                course of normal business operations for other than 
                Federal Government purposes, that--
                            ``(i) has been sold, leased, or licensed to 
                        the general public or to domestic State, or 
                        local government entities; or
                            ``(ii) has been offered for sale, lease, or 
                        license to the general public or to domestic 
                        State, or local government entities.
                    ``(B) An item intended to be used in the course of 
                normal business operations for other than Federal 
                Government purposes that is not yet available in the 
                commercial marketplace, but will be available in time 
                to satisfy the delivery requirements under a Federal 
                Government solicitation.
                    ``(C) Any item that, but for--
                            ``(i) modifications of a type customarily 
                        available in the commercial marketplace, or
                            ``(ii) minor modifications made to meet 
                        Federal Government requirements,
                would satisfy the criteria in subparagraph (A) or (B).
                    ``(D) Any combination of items meeting the 
                requirements of subparagraph (A), (B), or (C) that are 
                of a type customarily combined and sold in combination 
                to the general public.
                    ``(E) Installation services, maintenance services, 
                repair services, training services, and other services 
                if such services are procured for support of an item 
                referred to in subparagraph (A), (B), (C), or (D) and 
                if the source of such services--
                            ``(i) offers such services to the general 
                        public and the Federal Government 
                        contemporaneously and under similar terms and 
                        conditions; and
                            ``(ii) offers to use the same work force 
                        for providing the Federal Government with such 
                        services as the source uses for providing such 
                        services to the general public.
                    ``(F) Services offered and sold competitively, in 
                significant quantities, in the commercial marketplace 
                at established catalog prices or standard rates and 
                under standard commercial terms and conditions.
                    ``(G) Any item, combination of items, or service 
                referred to in subparagraphs (A) through (F) 
                notwithstanding the fact that the item, combination of 
                items, or service is transferred between or among 
                separate divisions, subsidiaries, or affiliates of a 
                contractor.
            ``(13) The term `nondevelopmental item' means any of the 
        following:
                    ``(A) Any commercial item.
                    ``(B) Any previously developed item of supply that 
                is in use by a department or agency of the United 
                States, a State or local government, or a foreign 
                government with which the United States has a mutual 
                defense cooperation agreement.
                    ``(C) Any item of supply described in subparagraph 
                (B) that requires only minor modification of the type 
                normally available in the commercial marketplace in 
                order to meet the requirements of the procuring 
                department or agency.
                    ``(D) Any item of supply currently being produced 
                that does not meet the requirements of subparagraph 
                (A), (B), or (C) solely because the item--
                            ``(i) is not yet in use; or
                            ``(ii) is not yet available in the 
                        commercial marketplace.
            ``(14) The term `component' means any item supplied to the 
        Federal Government as part of an end item or of another 
        component.
            ``(15) The term `commercial component' means any component 
        that is a commercial item.''.
    (b) Conforming Amendments.--Such section is further amended--
            (1) by striking out ``Act--'' and inserting in lieu thereof 
        ``Act:'';
            (2) by capitalizing the initial letter in the first word of 
        each paragraph;
            (3) by striking out the semicolon at the end of each of 
        paragraphs (1), (2), (3), (5), (6), (7), (8), and (9) and 
        inserting in lieu thereof a period; and
            (4) in paragraphs (4) and (10), by striking out ``; and'' 
        at the end and inserting in lieu thereof a period.

SEC. 5002. PREFERENCE FOR ACQUISITION OF COMMERCIAL ITEMS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 3151, is further amended by adding at the 
end the following new section:

``SEC. 42. PREFERENCE FOR ACQUISITION OF COMMERCIAL ITEMS.

    ``(a) Preference.--The head of each executive agency shall ensure 
that, to the maximum extent practicable--
            ``(1) requirements of the executive agency with respect to 
        a procurement of supplies or services are stated in terms of--
                    ``(A) functions to be performed;
                    ``(B) performance required; or
                    ``(C) essential physical characteristics;
            ``(2) such requirements are defined so that commercial 
        items or, to the extent that commercial items suitable to meet 
        the agency's needs are not available, other nondevelopmental 
        items may be procured to fulfill such requirements; and
            ``(3) offerors of commercial items and other 
        nondevelopmental items are provided an opportunity to compete 
        in any procurement to fill such requirements.
    ``(b) Implementation.--The head of each executive agency shall 
ensure that procurement officials in that executive agency, to the 
maximum extent practicable--
            ``(1) acquire commercial items or other nondevelopmental 
        items to meet the needs of the executive agency;
            ``(2) require prime contractors and subcontractors at all 
        levels under the executive agency contracts to incorporate 
        commercial items or other nondevelopmental items as components 
        of items supplied to the executive agency;
            ``(3) modify requirements in appropriate cases to ensure 
        that the requirements can be met by commercial items or, to the 
        extent that commercial items suitable to meet the agency's 
        needs are not available, other nondevelopmental items;
            ``(4) state specifications in terms that enable and 
        encourage bidders and offerors to supply commercial items or, 
        to the extent that commercial items suitable to meet the 
        agency's needs are not available, other nondevelopmental items 
        in response to the executive agency solicitations;
            ``(5) revise the executive agency's procurement policies, 
        practices, and procedures not required by law to reduce any 
        impediments in those policies, practices, and procedures to the 
        acquisition of commercial items; and
            ``(6) require training of appropriate personnel in the 
        acquisition of commercial items.
    ``(c) Preliminary Market Research.--(1) The head of an executive 
agency shall conduct market research appropriate to the circumstances--
            ``(A) before developing new specifications for a 
        procurement by that executive agency; and
            ``(B) before soliciting bids or proposals for a contract in 
        excess of the simplified acquisition threshold.
    ``(2) The head of an executive agency shall use the results of 
market research to determine whether there are commercial items 
available that--
            ``(A) meet the executive agency's requirements;
            ``(B) could be modified to meet the executive agency's 
        requirements; or
            ``(C) could meet the executive agency's requirements if 
        those requirements were modified to a reasonable extent.''.

SEC. 5003. ACQUISITION OF COMMERCIAL ITEMS.

    (a) Required FAR Provisions.--The Office of Federal Procurement 
Policy Act (41 U.S.C. 401 et seq.), as amended by section 5002, is 
further amended by adding at the end the following new section:

``SEC. 43. REGULATIONS ON ACQUISITION OF COMMERCIAL ITEMS.

    ``(a) In General.--The Federal Acquisition Regulation shall provide 
regulations to implement section 42 and paragraphs (12) through (15) of 
section 4.
    ``(b) Terms and Conditions.--The regulations prescribed under 
subsection (a) shall contain a set or sets of terms and conditions to 
be included in contracts for the acquisition of commercial end items. 
Such terms and conditions shall, to the maximum extent practicable, 
include only those contract clauses that are determined by the agency 
head to be--
            ``(1) required to implement provisions of law applicable to 
        commercial item acquisitions; or
            ``(2) consistent with standard commercial practice.
    ``(c) Terms and Conditions for Components.--Such regulations shall 
provide that a prime contractor furnishing commercial items or items 
other than commercial items as items or components shall not be 
required to apply to any of its divisions, subsidiaries, or affiliates 
or any of its subcontractors or suppliers that are furnishing 
commercial items as components any clause, term, or condition except 
those determined by the head of the agency to be--
            ``(1) required to implement provisions of law applicable to 
        subcontractors furnishing commercial items; or
            ``(2) determined to be consistent with standard commercial 
        practice.
    ``(d) Market Acceptance.--The regulations prescribed under 
subsection (a) shall provide that, under appropriate conditions, the 
agency head may require an offeror to demonstrate, as a condition for 
being considered responsive, that the items offered meet, among other 
criteria, market acceptance criteria, unless such item has been 
satisfactorily supplied to an executive agency under current or recent 
contracts for the same or similar requirements.
    ``(e) Use of Fixed Price Contracts.--The regulations prescribed 
under subsection (a) shall include a requirement that firm, fixed price 
contracts, or fixed price contracts with economic price adjustment 
provisions, be used for the acquisition of commercial items and 
components.
    ``(f) Term of Contracts.--The regulations prescribed under 
subsection (a) shall provide that, to the extent practicable, contracts 
for acquisition of commercial items shall not require contract 
performance for a term longer than customary industry practice for the 
item being acquired. A contracting officer may include in a contract 
provisions for economic price adjustment if an extended period of 
performance under the contract cannot be avoided.
    ``(g) Contract Quality Requirements.--The regulations prescribed 
under subsection (a) shall include provisions that--
            ``(1) permit, to the maximum extent practicable, a 
        contractor under a commercial items acquisition to use the 
        existing quality assurance system of the contractor as a 
        substitute for compliance with an otherwise applicable 
        requirement for the Government to inspect or test the 
        commercial items before the contractor's tender of those items 
        for acceptance by the Government;
            ``(2) require that, to the maximum extent practicable, the 
        executive agency take advantage of warranties (including 
        extended warranties) offered by offerors of commercial items 
        and use such warranties for the repair and replacement of 
        commercial items; and
            ``(3) set forth guidance regarding the use of past 
        performance of commercial items and sources as a factor in 
        contract award decisions.''.

SEC. 5004. PRINCIPLE OF CONSTRUCTION WITH FUTURE LAWS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 5003, is further amended by adding at the 
end the following new section:

``SEC. 44. PRINCIPLE OF CONSTRUCTION WITH FUTURE LAWS.

    ``A provision of law enacted after the date of the enactment of the 
Federal Acquisition Reform Act of 1994 shall not be construed as 
applicable to purchases of commercial items by an executive agency 
unless that provision of law specifically refers to this section and 
specifically states that such provision of law modifies or supersedes 
section 42, section 43, section 44, or paragraphs (12) through (15) of 
section 4.''.

SEC. 5005. AUTHORITY TO WAIVE CERTAIN PROCUREMENT LAWS FOR CONTRACTS 
              FOR COMMERCIAL ITEMS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 5004, is further amended by adding at the 
end the following new section:

``SEC. 45. AUTHORITY TO WAIVE CERTAIN PROCUREMENT LAWS FOR CONTRACTS 
              FOR COMMERCIAL ITEMS.

    ``(a) In General.--Subject to subsections (b) and (c), the Federal 
Acquisition Regulatory Council may waive any provision of law subject 
to implementation by the Council or by an executive agency under 
section 25 of this Act that sets forth policies, procedures, 
requirements, restrictions, or contract clauses that are not necessary 
to implement any of the Governmental policies set forth in subsection 
(b) under a contract for commercial items. Any waiver under this 
subsection shall apply to the procurement by executive agencies of 
commercial items.
    ``(b) Determination Required.--The Federal Acquisition Regulatory 
Council may waive a provision of law under this section only if the 
Council determines that the waiver will not adversely affect--
            ``(1) national security interests;
            ``(2) the economy, efficiency, and effectiveness of Federal 
        procurement;
            ``(3) full and open competition;
            ``(4) the Federal Government's ability to obtain property 
        and services of the requisite quality, at a reasonable price, 
        and within the time needed;
            ``(5) small and small disadvantaged business concerns; or
            ``(6) fair dealings and equitable relationships with the 
        private sector.
    ``(c) Limitations.--The Federal Acquisition Regulatory Council may 
not under this section waive a requirement that is established by 
statute or regulation under any of the following provisions:
            ``(1) Section 2533 of title 10, United States Code 
        (relating to limitation on procurement of goods which are other 
        than American goods).
            ``(2) Section 2631 of title 10, United States Code 
        (relating to preference to United States vessels for 
        transportation of supplies).
            ``(3) The Small Business Act (15 U.S.C. 631 et seq.).
            ``(4) Section 4124 of title 18, United States Code 
        (relating to purchase of prison-made products by Federal 
        departments).
            ``(5) Title 18, United States Code, and any other law 
        imposing a criminal penalty.
            ``(6) Section 503 of the Rehabilitation Act of 1973 (29 
        U.S.C. 793) (relating to employment under Federal contracts for 
        individuals with disabilities).
            ``(7) Section 1352 of title 31, United States Code, 
        popularly referred to as the `Byrd Amendment'.
            ``(8) Section 4212 of title 38, United States Code 
        (relating to veterans' employment emphasis under Federal 
        contracts).
            ``(9) The Act of August 24, 1935 (40 U.S.C. 270a et seq.), 
        commonly referred to as the `Miller Act'.
            ``(10) The Act of March 3, 1931 (40 U.S.C. 276a et seq.), 
        commonly referred to as the `Davis-Bacon Act'.
            ``(11) Title IX of the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 541 et seq.), popularly 
        referred to as the `Brooks Architect-Engineers Act'.
            ``(12) Section 111 of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 759), popularly 
        referred to as the `Brooks Automatic Data Processing Act'.
            ``(13) Section 901(b) of the Merchant Marine Act, 1936 (46 
        U.S.C. app. 1241(b)) (relating to cargo preference for American 
        vessels).
            ``(14) Title III of the Act of March 3, 1933 (41 U.S.C. 10a 
        et seq.), commonly referred to as the `Buy American Act'.
            ``(15) The Act of June 25, 1938 (41 U.S.C. 46 et seq.), 
        commonly referred to as the Wagner-O`Day Act, that was revised 
        and reenacted in the Act of June 23, 1971 (85 Stat. 77), 
        commonly referred to as the `Javits-Wagner-O'Day Act'.
            ``(16) The Service Contract Act of 1965 (41 U.S.C. 351-
        358).
            ``(17) Section 27 of this Act (41 U.S.C. 423), other than 
        subsection (e) of that section (relating to procurement 
        integrity).
            ``(18) Executive Order No. 11246 (or any successor to that 
        order), dated September 24, 1965.''.

SEC. 5006. FLEXIBLE DEADLINES FOR SUBMISSION OF OFFERS OF COMMERCIAL 
              ITEMS.

    Section 18(a) of the Office of Federal Procurement Policy Act (41 
U.S.C. 416(a)) is amended by adding at the end the following new 
paragraph:
    ``(4) The requirements of paragraph (3)(B) do not apply to 
contracts for the purchase of commercial items. The Administrator shall 
prescribe for such contracts appropriate limits on the applicability of 
a deadline for submission of bids or proposals that is required by 
subsection (a)(1). Such limits shall be incorporated in the Federal 
Acquisition Regulation.''.

SEC. 5007. ADDITIONAL RESPONSIBILITIES FOR ADVOCATES FOR COMPETITION.

    (a) Responsibilities of the Advocate for Competition.--Section 
20(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 
418(c)) is amended to read as follows:
    ``(c) The advocate for competition for each procuring activity 
shall be responsible for promoting full and open competition, promoting 
the acquisition of commercial items and other nondevelopmental items, 
and challenging barriers to such acquisition, including such barriers 
as unnecessarily restrictive statements of need, unnecessarily detailed 
specifications, and unnecessarily burdensome contract clauses.''.
    (b) Repeal of Superseded Provision.--Section 28 of such Act (41 
U.S.C. 424) is repealed.

SEC. 5008. PROVISIONS NOT AFFECTED.

    Nothing in this title shall be construed as amending, modifying, or 
superseding, or as intended to impair or restrict authorities or 
responsibilities under--
            (1) section 46 of the Office of Federal Procurement Policy 
        Act, as added by section 6003 of this Act;
            (2) section 111 of the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 759), popularly referred to as 
        the ``Brooks Automatic Data Processing Act'';
            (3) title IX of the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 541 et seq.), popularly 
        referred to as the ``Brooks Architect-Engineers Act'';
            (4) section 8(a) of the Small Business Act (15 U.S.C. 
        637(a)) or any other provision of that Act; or
            (5) the Act of June 25, 1938 (41 U.S.C. 46-48c), that was 
        revised and reenacted in the Act of June 23, 1971 (85 Stat. 
        77), popularly referred to as the ``Javits-Wagner-O'Day Act''.

SEC. 5009. COMPTROLLER GENERAL REVIEW OF FEDERAL GOVERNMENT USE OF 
              MARKET RESEARCH.

    (a) Report Required.--Not later than 2 years after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit to the Congress a report on the use of market research by 
the Federal Government in support of the procurement of commercial 
items and nondevelopmental items.
    (b) Content of Report.--The report shall include the following:
            (1) A review of existing Federal Government market research 
        efforts to gather data concerning commercial and other 
        nondevelopmental items.
            (2) A review of the feasibility of creating a Government-
        wide data base for storing, retrieving, and analyzing market 
        data, including use of existing Federal Government resources.
            (3) Any recommendations for changes in law or regulations 
        that the Comptroller General considers appropriate.

                   TITLE VI--MISCELLANEOUS PROVISIONS

SEC. 6001. TEST PROGRAM.

    (a) In General.--The Administrator for Federal Procurement Policy 
(in this section referred to as the ``Administrator'') may conduct a 
program of tests of alternative and innovative procurement procedures. 
To the extent consistent with this section, such program shall be 
conducted consistent with section 15 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 413). No more than 6 such tests shall 
be conducted under this authority.
    (b) Designation of Agencies.--Each test conducted pursuant to 
subsection (a) shall be limited to not more than 2 specific contracting 
activities in an agency designated by the Administrator. Each agency so 
designated shall select the contracting activities participating in the 
test with the approval of the Administrator and shall designate a 
procurement testing official who shall be responsible for the conduct 
and evaluation of tests within that agency.
    (c) Test Requirements.--Tests conducted under subsection (a)--
            (1) shall be developed and structured by the Administrator 
        or by the agency senior procurement executives designated 
        pursuant to section 16(3) of the Office of Federal Procurement 
        Policy Act in close coordination with the Administrator;
            (2) shall be for a period of not greater than 4 years;
            (3) shall be limited to specific programs of agencies or 
        specific acquisitions;
            (4) may not include any test with a total estimated life-
        cycle cost to the Federal Government greater than $100,000,000;
            (5) shall include--
                    (A) a test by the National Aeronautics and Space 
                Administration of simplified procurement procedures for 
                acquisitions with an estimated annual total obligation 
                of funds of $500,000 or less;
                    (B) a test by the General Services Administration 
                of expedited methods for procuring automatic data 
                processing equipment commodities; and
                    (C) a test by at least one agency of streamlined 
                procedures for competition among interested sources 
                participating in the tailoring of a solicitation for 
                the purchase of commercial products; and
            (6) shall not include any procurement the cost of which is 
        expected to exceed $5,000,000 (including options).
    (d) Limitation on Total Value of Contracts Under Program.--
            (1) Limitation.--The Administrator shall ensure that the 
        total amount obligated under contracts awarded pursuant to the 
        program under this section does not exceed $600,000,000.
            (2) Monitoring.--The Administrator shall monitor the value 
        of contracts awarded pursuant to the program under this 
        section.
            (3) Prohibition on awards in excess of limit.--No contract 
        may be awarded under the program under this section if the 
        award of the contract would result in obligation of more than 
        $600,000,000 under contracts under this section.
    (e) Procedures Authorized.--Tests conducted under this section may 
include tests of any of the following procedures:
            (1) Publication of agency needs prior to drafting of a 
        solicitation.
            (2) Screening of sources and competition among capable 
        vendors.
            (3) Issuance of draft solicitations for comment.
            (4) Streamlined solicitations, with a minimized number of 
        evaluation factors and information required from vendors, 
        abbreviated periods for submission of offers, and page 
        limitations on offers.
            (5) Limitation of source selection factors to--
                    (A) cost to the Federal Government;
                    (B) past experience; and
                    (C) quality of the contents of the offer.
            (6) Evaluation of proposals by small teams of highly 
        qualified people, limited to 30 days.
            (7) Competition among sources of preevaluated products.
            (8) Alternative notice and publication requirements.
            (9) A process in which--
                    (A) the competitive process is initiated by a 
                notice in the Commerce Business Daily synopsizing the 
                needs of the executive agency conducting the test, in 
                functional and performance terms, with other 
                specifications provided for guidance only;
                    (B) the notice invites interested sources to submit 
                information or samples showing their product's 
                suitability for those needs (with price quotations) or, 
                if appropriate, showing the sources' technical 
                capability, past performance, product supportability, 
                or other qualifications (with appropriate consideration 
                to rates and other cost-related factors);
                    (C) contracting officials develop a request for 
                proposals (including appropriate specifications and 
                evaluation criteria) after reviewing the submittals 
                made by interested sources and, if the officials 
                determine necessary, after consultation with those 
                sources; and
                    (D) the contract is awarded after a streamlined 
                competition limited to all sources that timely provided 
                product information in response to the notice or, if 
                appropriate, to those sources determined most capable 
                based on those qualification-based factors included in 
                an invitation to submit information pursuant to 
                subparagraph (B).
    (f) Test Plan.--Not later than 60 days before implementing any test 
program under this section, the Administrator shall--
            (1) provide a detailed test plan, including lists of any 
        regulations that are to be waived, and any written 
        determination under subsection (g)(1)(B) to the Committee on 
        Government Operations of the House of Representatives and the 
        Committee on Governmental Affairs of the Senate;
            (2) provide a copy of the plan to the appropriate 
        authorizing committees of the House of Representatives and the 
        Senate; and
            (3) publish the plan in the Federal Register and provide an 
        opportunity for public comment.
    (g) Waiver of Procurement Regulations.--
            (1) In general.--For purposes of a test conducted under 
        subsection (a), the Administrator may waive--
                    (A) any provision of the Federal Acquisition 
                Regulation that is not required by statute; and
                    (B) any provision of the Federal Acquisition 
                Regulation that is required by a provision of law 
                described in paragraph (2), the waiver of which the 
                Administrator determines in writing to be necessary to 
                conduct any test of any of the 9 procedures described 
                in subsection (e).
            (2) Provisions of law described.--The provisions of law 
        referred to in paragraph (1) are the following:
                    (A) Section 3709 of the Revised Statutes (41 U.S.C. 
                5).
                    (B) Section 3710 of the Revised Statutes (41 U.S.C. 
                8).
                    (C) Section 3735 of the Revised Statutes (41 U.S.C. 
                13).
                    (D) Section 310 of the Federal Property and 
                Administrative Services Act of 1949 (41 U.S.C. 260).
                    (E) Section 303 of the Federal Property and 
                Administrative Services Act of 1949 (41 U.S.C. 253).
                    (F) Section 303A of the Federal Property and 
                Administrative Services Act of 1949 (41 U.S.C. 253a).
                    (G) Section 303B of the Federal Property and 
                Administrative Services Act of 1949 (41 U.S.C. 253b).
                    (H) Section 303C of the Federal Property and 
                Administrative Services Act of 1949 (41 U.S.C. 253c).
                    (I) Section 4(6) of the Office of Federal 
                Procurement Policy Act (41 U.S.C. 403(6)).
                    (J) Section 18 of the Office of Federal Procurement 
                Policy Act (41 U.S.C. 416).
            (3) Proposal for additional waiver.--If the Administrator 
        determines that the conduct of a test requires the waiver of a 
        law not listed in paragraph (2) or requires approval of an 
        estimated dollar amount not permitted under subsection (c)(4), 
        the Administrator may propose legislation to authorize the 
        waiver or grant the approval. Before proposing such 
        legislation, the Administrator may provide and publish a test 
        plan as described in subsection (f). If Congress does not 
        authorize the waiver or grant the approval within 120 days 
        after the date of receipt of the proposal, the proposal shall 
        be deemed to be withdrawn. A proposal not approved within such 
        120 days may be resubmitted to Congress under this paragraph at 
        any time.
    (h) Reports and Reviews.--
            (1) Administrator.--The Administrator shall report to the 
        Congress on the results of each test conducted under subsection 
        (a).
            (2) Comptroller general.--The Comptroller General of the 
        United States shall review each test conducted under subsection 
        (a) and report to the Congress on each test and shall report 
        annually to the Congress on the conduct of and results of all 
        tests conducted under subsection (a).
    (i) Expiration of Authority.--The authority to conduct tests under 
this section and to award contracts under such tests shall expire on 
October 1, 1998. Contracts entered prior to October 1, 1998, pursuant 
to a test shall remain in effect, notwithstanding the expiration of the 
authority to conduct the test under this section.
    (j) Pilot Programs.--(1) The Administrator may delegate to the 
Secretary of Defense authority to conduct 7 pilot programs of 
alternative and innovative procurement procedures, including the waiver 
authority described in paragraph (2).
    (2) The authority delegated under paragraph (1) may include 
authority for the Secretary of Defense--
            (A) to apply any amendment or repeal of a provision of law 
        made in the Federal Acquisition Reform Act of 1994 to the pilot 
        programs before the effective date of such amendment or repeal; 
        and
            (B) to apply to a procurement of noncommercial items under 
        such programs--
                    (i) any authority provided in such Act (or in an 
                amendment made by a provision of such Act) to waive a 
                provision of law in the case of commercial items, and
                    (ii) any exception applicable under such Act (or an 
                amendment made by a provision of such Act) in the case 
                of commercial items,
before the effective date of such provision (or amendment) to the 
extent that the Secretary determines necessary to test the application 
of such waiver or exception to procurements of noncommercial items.
    (3)(A) Paragraph (2) applies with respect to--
            (i) a contract that is awarded or modified during the 
        period described in subparagraph (B); and
            (ii) a contract that is awarded before the beginning of 
        such period and is to be performed (or may be performed), in 
        whole or in part, during such period.
    (B) The period referred to in subparagraph (A) is the period that 
begins 45 days after the date of the enactment of the Federal 
Acquisition Reform Act of 1994 and ends on September 30, 1998.

SEC. 6002. STUDY OF PARTICIPATION BY CERTAIN SMALL BUSINESSES IN 
              FEDERAL PROCUREMENT.

    (a) Study.--The Administrator for Federal Procurement Policy shall 
conduct a study of--
            (1) the degree of participation by small businesses owned 
        and controlled by socially and economically disadvantaged 
        individuals in procurements conducted by executive agencies, 
        other than agencies in the Department of Defense; and
            (2) the extent of compliance by those executive agencies 
        with the goals for participation by such businesses required by 
        Office of Federal Procurement Policy policy letter 91-1, 
        relating to Government-wide small business and small 
        disadvantaged business goals for procurement contracts.
    (b) Report.--Not later than 6 months after the date of the 
enactment of this Act, the Administrator for Federal Procurement Policy 
shall submit a report on the study required under subsection (a) to the 
Committee on Government Operations and the Committee on Small Business 
of the House of Representatives, and to the Committee on Governmental 
Affairs and the Committee on Small Business of the Senate. The report 
shall include recommendations to facilitate the provision of authority 
to executive agencies, other than agencies in the Department of 
Defense, to conduct procurement set asides for small businesses owned 
and controlled by socially and economically disadvantaged individuals, 
and on improved outreach programs to increase the participation by such 
businesses in procurements conducted by those executive agencies.

SEC. 6003. FURTHERANCE OF GOVERNMENT-WIDE CONTRACT GOAL FOR SMALL 
              DISADVANTAGED BUSINESSES AND CERTAIN INSTITUTIONS OF 
              HIGHER EDUCATION.

    The Office of Federal Procurement Policy Act (41 U.S.C. 41 et 
seq.), as amended by section 5005, is further amended by adding at the 
end the following new section:

``SEC. 46. FURTHERANCE OF GOVERNMENT-WIDE CONTRACT GOAL FOR SMALL 
              DISADVANTAGED BUSINESSES AND CERTAIN INSTITUTIONS OF 
              HIGHER EDUCATION.

    ``(a) Goal.--(1) A goal of 5 percent of the amount described in 
subsection (b) shall be the objective of an executive agency in each of 
fiscal years 1994 through 2000 for the total combined amount obligated 
for contracts and subcontracts entered into with--
            ``(A) small business concerns, including mass media and 
        advertising firms, owned and controlled by socially and 
        economically disadvantaged individuals (as such term is used in 
        section 8(d) of the Small Business Act (15 U.S.C. 637(d)) and 
        regulations issued under that section), the majority of the 
        earnings of which directly accrue to such individuals;
            ``(B) historically Black colleges and universities, 
        including any nonprofit research institution that was an 
        integral part of such a college or university before November 
        14, 1986; and
            ``(C) minority institutions (as defined in section 1046(3) 
        of the Higher Education Act of 1965 (20 U.S.C. 1135d-5(3)), 
        which, for the purposes of this section, shall include 
        Hispanic-serving institutions (as defined in section 316(b)(1) 
        of such Act (20 U.S.C. 1059c(b)(1)).
    ``(2) The head of the agency shall establish a specific goal within 
the overall 5 percent goal for the award of prime contracts and 
subcontracts to historically Black colleges and universities and 
minority institutions in order to increase the participation of such 
colleges and universities in the program provided for by this section.
    ``(3)(i) The Federal Acquisition Regulation (issued under section 
25(c)) shall provide procedures or guidelines for contracting officers 
to set goals which executive agency prime contractors that are required 
to submit subcontracting plans under section 8(d)(4)(B) of the Small 
Business Act (15 U.S.C. 637(d)(4)(B)) in furtherance of the agency's 
program to meet the 5 percent goal specified in paragraph (1) should 
meet in awarding subcontracts, including subcontracts to minority-owned 
media, to entities described in that paragraph.
    ``(ii) The regulations required by clause (i) shall provide that 
when a contract for a major system is to be performed pursuant to a 
teaming arrangement between two or more contractors, the contracting 
officer shall set each team member's goal by excluding the price of the 
work to be performed by the other team members from the calculation of 
total planned subcontract awards.
    ``(b) Amount.--The requirements of subsection (a) for any fiscal 
year apply to the total value of all prime contract and subcontract 
awards entered into by the executive agency for such fiscal year.
    ``(c) Types of Assistance.--(1) To attain the goal specified in 
subsection (a)(1), the head of the agency shall provide technical 
assistance to the entities referred to in that subsection and, in the 
case of historically Black colleges and universities and minority 
institutions, shall also provide infrastructure assistance.
    ``(2) Technical assistance provided under this section shall 
include information about the program, advice about the agency's 
procurement procedures, instruction in preparation of proposals, and 
other such assistance as the agency head considers appropriate. If the 
resources of the executive agency are inadequate to provide such 
assistance, the agency head may enter into contracts with minority 
private sector entities with experience and expertise in the design, 
development, and delivery of technical assistance services to eligible 
individuals, business firms and institutions, acquisition agencies, and 
prime contractors. Agency contracts with such entities shall be awarded 
annually, based upon, among other things, the number of minority small 
business concerns, historically Black colleges and universities, and 
minority institutions that each such entity brings into the program.
    ``(3) The agency head shall, to the maximum extent practical, carry 
out programs under this section at colleges, universities, and 
institutions that agree to bear a substantial portion of the cost 
associated with the programs.
    ``(d) Competitive Procedures and Advance Payments.--To attain the 
goal of subsection (a):
            ``(1)(A) The head of the agency shall--
                    ``(i) ensure that substantial progress is made in 
                increasing awards of agency contracts to entities 
                described in subsection (a)(1);
                    ``(ii) exercise his utmost authority, 
                resourcefulness, and diligence; and
                    ``(iii) actively monitor and assess the progress of 
                prime contractors of the agency in attaining such goal.
            ``(B) In making the assessment under subparagraph (A)(iii), 
        the agency head shall evaluate the extent to which use of the 
        authority provided in paragraphs (2) and (3) and compliance 
        with the requirement in paragraph (4) is effective for 
        facilitating the attainment of the goal.
            ``(2) To the extent practicable and when necessary to 
        facilitate achievement of the 5 percent goal described in 
        subsection (a), the agency head shall make advance payments 
        under section 36 of this Act to contractors described in 
        subsection (a). The Federal Acquisition Regulation shall 
        provide guidance to contracting officers for making advance 
        payments to entities described in subsection (a)(1) under such 
        section.
            ``(3) To the extent practicable and when necessary to 
        facilitate achievement of the 5 percent goal described in 
        subsection (a), the agency head may enter into contracts using 
        less than full and open competitive procedures and partial set 
        asides for entities described in subsection (a)(1), but shall 
        pay a price not exceeding fair market cost by more than 10 
        percent in payment per contract to contractors or 
        subcontractors described in subsection (a). The agency head 
        shall adjust the percentage specified in the preceding sentence 
        for any industry category if available information clearly 
        indicates that nondisadvantaged small business concerns in such 
        industry category are generally being denied a reasonable 
        opportunity to compete for contracts because of the use of that 
        percentage in the application of this paragraph.
            ``(4) To the extent practicable, the agency head shall 
        maximize the number of minority small business concerns, 
        historically Black colleges and universities, and minority 
        institutions participating in the program.
            ``(5) The Federal Acquisition Regulation shall provide for 
        the following:
                    ``(A) Procedures or guidance for contracting 
                officers to provide incentives for prime contractors 
                referred to in subsection (a)(3) to increase 
                subcontractor awards to entities described in 
                subsection (a)(1).
                    ``(B) A requirement that contracting officers 
                emphasize the award of contracts to entities described 
                in subsection (a)(1) in all industry categories, 
                including those categories in which such entities have 
                not traditionally dominated.
                    ``(C) Guidance to executive agency personnel on the 
                relationship among the following programs:
                            ``(i) The program implementing this 
                        section.
                            ``(ii) The program established under 
                        section 8(a) of the Small Business Act (15 
                        U.S.C. 637(a)).
                            ``(iii) The small business set-aside 
                        program established under section 15(a) of the 
                        Small Business Act (15 U.S.C. 644(a)).
                    ``(D) With respect to an agency procurement which 
                is reasonably likely to be set aside for entities 
                described in subsection (a)(1), a requirement that (to 
                the maximum extent practicable) the procurement be 
                designated as such a set-aside before the solicitation 
                for the procurement is issued.
                    ``(E) Policies and procedures which, to the maximum 
                extent practicable, will ensure that current levels in 
                the number or dollar value of contracts awarded under 
                the program established under section 8(a) of the Small 
                Business Act (15 U.S.C. 637(a)) and under the small 
                business set-aside program established under section 
                15(a) of the Small Business Act (15 U.S.C. 644(a)) are 
                maintained and that every effort is made to provide new 
                opportunities for contract awards to eligible entities, 
                in order to meet the goal of subsection (a).
                    ``(F) Implementation of this section in a manner 
                which will not alter the procurement process under the 
                program established under section 8(a) of the Small 
                Business Act (15 U.S.C. 637(a)).
                    ``(G) A requirement that one factor used in 
                evaluating the performance of a contracting officer be 
                the ability of the officer to increase contract awards 
                to entities described in subsection (a)(1).
                    ``(H) Increased technical assistance to entities 
                described in subsection (a)(1).
    ``(e) Penalties and Regulations Relating to Status.--(1) Whoever 
for the purpose of securing a contract or subcontract under subsection 
(a) misrepresents the status of any concern or person as a small 
business concern owned and controlled by a minority (as described in 
subsection (a)), shall be punished by a fine of not less than $10,000, 
or by imprisonment for not more than one year, or both.
    ``(2) The Federal Acquisition Regulation shall prohibit awarding a 
contract under this section to an entity described in subsection (a)(1) 
unless the entity agrees to comply with the requirements of section 
15(o)(1) of the Small Business Act (15 U.S.C. 644(o)(1)).
    ``(f) Determination by Agency Head.--Under procedures prescribed in 
the Federal Acquisition Regulation, a person may request the agency 
head to determine whether the use of small disadvantaged business set 
asides by a contracting activity of the agency has caused a particular 
industry category to bear a disproportionate share of the contracts 
awarded to attain the goal established for that contracting activity 
for the purposes of this section. Upon making a determination that a 
particular industry category is bearing a disproportionate share, the 
agency head shall take appropriate actions to limit the contracting 
activity's use of set asides in awarding contracts in that particular 
industry category.
    ``(g) Compliance With Subcontracting Plan Requirements.--(1) The 
Federal Acquisition Regulation shall contain regulations to ensure that 
potential contractors submitting sealed bids or competitive proposals 
to the executive agency for procurement contracts to be awarded under 
the program provided for by this section are complying with applicable 
subcontracting plan requirements of section 8(d) of the Small Business 
Act (15 U.S.C. 637(d)).
    ``(2) The regulations required by paragraph (1) shall ensure that, 
with respect to a sealed bid or competitive proposal for which the 
bidder or offeror is required to negotiate or submit a subcontracting 
plan under section 8(d) of the Small Business Act (15 U.S.C. 637(d)), 
the subcontracting plan shall be a factor in evaluating the bid or 
proposal.
    ``(h) Annual Report.--(1) Not later than December 15 of each year, 
the Administrator shall submit to Congress a report on the progress of 
executive agencies toward attaining the goal of subsection (a) during 
the preceding fiscal year.
    ``(2) The report required under paragraph (1) shall include the 
following:
            ``(A) A full explanation of any progress toward attaining 
        the goal of subsection (a).
            ``(B) A plan to achieve the goal, if necessary.
    ``(3) The report required under paragraph (1) shall also include 
the following:
            ``(A) The aggregate differential between the fair market 
        price of all contracts awarded pursuant to subsection (d)(3) 
        and the estimated fair market price of all such contracts had 
        such contracts been entered into using full and open 
        competitive procedures.
            ``(B) An analysis of the impact that subsection (a) shall 
        have on the ability of small business concerns not owned and 
        controlled by socially and economically disadvantaged 
        individuals to compete for contracts with the executive agency.
            ``(C) A description of the percentage of contracts 
        (actions), the total dollar amount (size of action), and the 
        number of different entities relative to the attainment of the 
        goal of subsection (a), separately for Black Americans, Native 
        Americans, Hispanic Americans, Asian Pacific Americans, and 
        other minorities.
            ``(D) A detailed description of the infrastructure 
        assistance provided under subsection (c) during the preceding 
        fiscal year and of the plans for providing such assistance 
        during the fiscal year in which the report is submitted.
    ``(i) Relationship to Other Goals.--This section shall not be 
construed as amending, modifying, or superseding any other provision of 
law establishing a goal or requirement for an agency to obligate 5 
percent or more of the total value of all prime contract and 
subcontract awards entered into by the agency for a fiscal year with 
any entity described in subsection (a)(1).
    ``(j) Effective Date.--This section applies to each of fiscal years 
1994 through 2000.''.

SEC. 6004. EDUCATION AND TRAINING.

    Section 6(d)(5) of the Office of Federal Procurement Policy Act (41 
U.S.C. 405(d)(4)) is amended--
            (1) by striking out ``and'' at the end of subparagraph (A);
            (2) by striking out the period at the end of subparagraph 
        (B) and inserting in lieu thereof ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(C) establish policies and procedures for the 
                establishment and implementation of education and 
                training programs authorized by this Act, including the 
                establishment and implementation of a sensitivity 
                training course, in conjunction with the General 
                Services Administration, for critical procurement 
                personnel designed to increase the participation of 
                small business concerns owned and controlled by 
                socially and economically disadvantaged individuals, 
                women, and other minorities in procurement activities 
                conducted by an executive agency.''.

SEC. 6005. SENSE OF CONGRESS ON NEGOTIATED RULEMAKING.

    (a) Findings.--The Congress finds the following:
            (1) The use of negotiated rulemaking or similar policy 
        discussion group techniques is an appropriate tool for--
                    (A) fostering effective implementation of, and 
                compliance with, laws and regulations;
                    (B) avoiding litigation; and
                    (C) achieving more productive and equitable 
                relationships between the Federal Government and the 
                regulated segments of the private sector.
            (2) The use of negotiated rulemaking or similar techniques 
        in Federal procurement regulations could be appropriate given 
        the extreme complexity and intricate interactions between buyer 
        and seller in Federal procurements.
    (b) Sense of Congress.--It is the sense of Congress that, in 
prescribing acquisition regulations, the Federal Acquisition Regulatory 
Council should consider using negotiated rulemaking procedures in 
accordance with sections 561 through 570 of title 5, United States 
Code, or similar techniques intended to achieve the benefits described 
in subsection (a)(1).

SEC. 6006. VENDOR AND EMPLOYEE EXCELLENCE AWARDS.

    Section 6(d) of the Office of Federal Procurement Policy Act (41 
U.S.C. 405(d)), as amended by section 3012(b), is further amended--
            (1) by striking out the period at the end of paragraph (10) 
        (as redesignated by section 3012(b)(2)) and inserting in lieu 
        thereof a semicolon; and
            (2) by adding at the end the following new paragraphs:
            ``(11) providing for a Government-wide award to recognize 
        and promote vendor excellence; and
            ``(12) providing for a Government-wide award to recognize 
        and promote excellence in officers and employees of the Federal 
        Government serving in procurement-related positions.''.

SEC. 6007. TECHNICAL AND CLERICAL AMENDMENTS.

    (a) Table of Contents Amendment.--Section 1 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 401 note) is amended to read 
as follows:

``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    ``(a) Short Title.--This Act may be cited as the `Office of Federal 
Procurement Policy Act'.
    ``(b) Table of Contents.--The table of contents for this Act is as 
follows:

``Sec. 1.    Short title; table of contents.
``Sec. 2.    Declaration of policy.
``Sec. 3.    Findings and purpose.
``Sec. 4.    Definitions.
``Sec. 4A.  Simplified acquisition threshold.
``Sec. 4B.  Simplified acquisition procedures.
``Sec. 4C.  Procedures applicable to purchases below micro-purchase 
                            threshold.
``Sec. 5.    Office of Federal Procurement Policy.
``Sec. 6.    Authority and functions of the Administrator.
``Sec. 7.    Administrative powers.
``Sec. 8.    Responsiveness to Congress.
``Sec. 9.    Effect on existing laws.
``Sec. 10.   Effect on existing regulations.
``Sec. 11.   Authorization of appropriations.
``Sec. 12.   Delegation.
``Sec. 14.   Access to information.
``Sec. 15.   Tests of innovative procurement methods and procedures.
``Sec. 16.   Executive agency responsibilities.
``Sec. 18.   Procurement notice.
``Sec. 19.   Record requirements.
``Sec. 20.   Advocates for competition.
``Sec. 21.   Rights in technical data.
``Sec. 22.   Publication of proposed regulations.
``Sec. 23.   Contracting functions performed by Federal personnel.
``Sec. 24.   Travel expenses of Government contractors.
``Sec. 25.   Federal Acquisition Regulatory Council.
``Sec. 26.   Cost Accounting Standards Board.
``Sec. 27.   Procurement integrity.
``Sec. 29.   Competition requirements.
``Sec. 30.   Planning and solicitation requirements.
``Sec. 31.   Evaluation and award.
``Sec. 32.   Cost or pricing data: truth in negotiations.
``Sec. 33.   Delegation of procurement functions.
``Sec. 34.   Determinations and decisions.
``Sec. 35.   Research, development, and production costs.
``Sec. 36.   Contract financing.
``Sec. 37.   Allowable costs.
``Sec. 38.   Examination of records of contractor.
``Sec. 39.   Federal acquisition computer network (FACNET).
``Sec. 39A.  Implementation of FACNET systems.
``Sec. 40.   Contracts: small business reservation.
``Sec. 41.   Restriction on use of noncompetitive procedures for 
                            procurement from a specified source.
``Sec. 42.   Preference for acquisition of commercial items.
``Sec. 43.   Regulations on acquisition of commercial items.
``Sec. 44.   Principle of construction with future laws.
``Sec. 45.   Authority to waive certain procurement laws for contracts 
                            for commercial items.
``Sec. 46.   Furtherance of Government-wide contract goal for small 
                            disadvantaged businesses and certain 
                            institutions of higher education.''.
    (b) Amendments for Stylistic Consistency.--
            (1) Office of federal procurement policy act.--The Office 
        of Federal Procurement Policy Act (41 U.S.C. 401 et seq.) is 
        amended so that the section designation and section heading of 
        each section of such Act is in the same form and typeface as 
        the section designation and heading of this section.
            (2) Federal property and administrative services act of 
        1949.--The Federal Property and Administrative Services Act of 
        1949 (41 U.S.C. 471 et seq.) is amended so that the section 
        designation and section heading of each section of such Act is 
        in the same form and typeface as the section designation and 
        heading of this section.

               TITLE VII--EFFECTIVE DATES AND REGULATIONS

SEC. 7001. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), this Act and 
the amendments made by this Act shall apply with respect to any 
contract for which a solicitation for bid or proposal is issued after--
            (1) 30 days have expired after the issuance in final form 
        of revisions to the Federal Acquisition Regulation pursuant to 
        section 7002; or
            (2) 180 days have expired after the date of the enactment 
        of this Act;
whichever is earlier.
    (b) Specific Effective Date.--Subtitle C of title I of this Act, 
and the amendments made by such subtitle (relating to procurement 
protests), shall apply with respect to any protest filed after the 
expiration of the 90-day period beginning on the date of the enactment 
of this Act.

SEC. 7002. REGULATIONS.

    Not later than 150 days after the date of the enactment of this 
Act, the Federal Acquisition Regulation (referred to in section 25(c) 
of the Office of Federal Procurement Policy Act (41 U.S.C. 421(c))) 
shall be revised, in final form, to implement this Act and the 
amendments made by this Act.

SEC. 7003. EVALUATION BY THE COMPTROLLER GENERAL.

    (a) Evaluation Relating to Issuance of Regulations.--Not later than 
December 1, 1995, the Comptroller General shall submit to the 
committees referred to in subsection (c) a report evaluating compliance 
with the requirements in section 7002, relating to the issuance of 
implementing regulations.
    (b) Evaluation of Implementation of Regulations.--Not later than 
December 1, 1996, the Comptroller General shall submit to the 
committees referred to in subsection (c) a report evaluating the 
effectiveness of the regulations implementing this Act in streamlining 
the acquisition system and fulfilling the other purposes of this Act.
    (c) Committees Designated To Receive the Reports.--The Comptroller 
General shall submit the reports required by this section to the 
Committees on Armed Services and on Governmental Affairs of the Senate 
and the Committees on Small Business on Government Operations of the 
House of Representatives.

SEC. 7004. DATA COLLECTION THROUGH THE FEDERAL PROCUREMENT DATA SYSTEM.

    (a) Data Collection Required.--The Federal Procurement Data System 
described in section 6(d)(4)(A) of the Office of Federal Procurement 
Policy Act (41 U.S.C. 405(d)(4)(A)) shall be modified to collect from 
contracts in excess of the simplified acquisition threshold data 
pertaining to the following matters:
            (1) Contract awards made pursuant to competitions conducted 
        pursuant to section 46 of the Office of Federal Procurement 
        Policy Act, as added by section 6003.
            (2) Awards to business concerns owned and controlled by 
        women.
            (3) Number of offers received in response to a 
        solicitation.
            (4) Task order contracts.
            (5) Contracts for the acquisition of commercial items.
    (b) Definition.--In this section, the term ``simplified acquisition 
threshold'' has the meaning given such term in section 4A of the Office 
of Federal Procurement Policy Act (41 U.S.C. 403).

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