I

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Federal Acquisition

5 Reform Act of 1994’’.

6 SEC. 2. TABLE OF CONTENTS.

7 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
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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.
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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
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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.
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1 TITLE I—CONTRACT FORMATION

2 Subtitle A—Competition Statutes

3 PART I—COMPETITION REQUIREMENTS

4 SEC. 1051. COMPETITION REQUIREMENTS.

5 The Office of Federal Procurement Policy Act (41

6 U.S.C. 401 et seq.) is amended by adding at the end the

7 following new section:

8 ‘‘SEC. 29. COMPETITION REQUIREMENTS.

9 ‘‘(a)(1) Except as provided in subsections (b), (c),

10 and (g) and except in the case of procurement procedures

11 otherwise expressly authorized by statute, an executive

12 agency in conducting a procurement for property or serv13 ices—

14 ‘‘(A) shall obtain full and open competition

15 through the use of competitive procedures in accord16 ance with the requirements of this title and the Fed17 eral Acquisition Regulation; and

18 ‘‘(B) shall use the competitive procedure or

19 combination of competitive procedures that is best

20 suited under the circumstances of the procurement.

21 ‘‘(2) In determining the competitive procedures ap22 propriate under the circumstances, an executive agency—

23 ‘‘(A) shall solicit sealed bids if—

24 ‘‘(i) time permits the solicitation, submis25 sion, and evaluation of sealed bids;
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1 ‘‘(ii) the award will be made on the basis

2 of price and other price-related factors;

3 ‘‘(iii) it is not necessary to conduct discus4 sions with the responding sources about their

5 bids; and

6 ‘‘(iv) there is a reasonable expectation of

7 receiving more than one sealed bid; and

8 ‘‘(B) shall request competitive proposals if

9 sealed bids are not appropriate under clause (A).

10 ‘‘(b)(1) An executive agency may provide for the pro11 curement of property or services covered by this section

12 using competitive procedures but excluding a particular

13 source in order to establish or maintain any alternative

14 source or sources of supply for that property or service

15 if the agency head determines that to do so—

16 ‘‘(A) would increase or maintain competition

17 and would likely result in reduced overall costs for

18 such procurement, or for any anticipated procure19 ment, of such property or services;

20 ‘‘(B) would be in the interest of national de21 fense in having a facility (or a producer, manufac22 turer, or other supplier) available for furnishing the

23 property or service in case of a national emergency

24 or industrial mobilization;
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1 ‘‘(C) would be in the interest of national de2 fense in establishing or maintaining an essential en3 gineering, research, or development capability to be

4 provided by an educational or other nonprofit insti5 tution or a federally funded research and develop6 ment center;

7 ‘‘(D) would ensure the continuous availability of

8 a reliable source of supply of such property or serv9 ice;

10 ‘‘(E) would satisfy projected needs for such

11 property or service determined on the basis of a his12 tory of high demand for the property or service; or

13 ‘‘(F) in the case of medical supplies, safety sup14 plies, or emergency supplies, would satisfy a critical

15 need for such supplies.

16 ‘‘(2) The determination required of the agency head

17 in paragraph (1) may not be made for a class of purchases

18 or contracts.

19 ‘‘(3) An executive agency may provide for the pro20 curement of property or services covered by this section

21 using competitive procedures, but excluding other than

22 small business concerns in furtherance of sections 9 and

23 15 of the Small Business Act (15 U.S.C. 639; 644).

24 ‘‘(4) A contract awarded pursuant to the competitive

25 procedures referred to in paragraphs (1) and (3) shall not
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1 be subject to the justification and approval required by

2 subsection (f)(1).

3 ‘‘(c) An executive agency may use procedures other

4 than competitive procedures only when—

5 ‘‘(1) the property or services needed by the ex6 ecutive agency are available from only one respon7 sible source and no other type of property or services

8 will satisfy the needs of the executive agency;

9 ‘‘(2) the executive agency’s need for the prop10 erty or services is of such an unusual and compelling

11 urgency that the Government would be seriously in12 jured unless the executive agency is permitted to

13 limit the number of sources from which it solicits

14 bids or proposals;

15 ‘‘(3) it is necessary to award the contract to a

16 particular source or sources in order (A) to maintain

17 a facility, producer, manufacturer, or other supplier

18 available for furnishing property or services in case

19 of a national emergency or to achieve industrial mo20 bilization, or (B) to establish or maintain an essen21 tial engineering, research, or development capability

22 to be provided by an educational or other nonprofit

23 institution or a federally funded research and devel24 opment center;
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1 ‘‘(4) the terms of an international agreement or

2 treaty between the United States Government and a

3 foreign government or international organization, or

4 the written directions of a foreign government reim5 bursing the executive agency for the cost of the pro6 curement of the property or services for such gov7 ernment, have the effect of requiring the use of pro8 cedures other than competitive procedures;

9 ‘‘(5) a statute expressly authorizes or requires

10 that the procurement be made through another exec11 utive agency or from a specified source, or the agen12 cy’s need is for a brand-name commercial item for

13 authorized resale;

14 ‘‘(6) the disclosure of the executive agency’s

15 needs would compromise the national security unless

16 the agency is permitted to limit the number of

17 sources from which it solicits bids or proposals; or

18 ‘‘(7) the head of the executive agency—

19 ‘‘(A) determines that it is necessary in the

20 public interest to use procedures other than

21 competitive procedures in the particular pro22 curement concerned, and

23 ‘‘(B) notifies the Congress in writing of

24 such determination not less than 30 days before

25 the award of the contract.
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1 ‘‘(d)(1) For the purposes of applying subsection

2 (c)(1)—

3 ‘‘(A) in the case of a contract for property or

4 services to be awarded on the basis of acceptance of

5 an unsolicited research proposal, the property or

6 services shall be considered to be available from only

7 one source if the source has submitted an unsolicited

8 research proposal that demonstrates a unique and

9 innovative concept the substance of which is not oth10 erwise available to the United States and does not

11 resemble the substance of a pending competitive pro12 curement; and

13 ‘‘(B) in the case of a follow-on contract for the

14 continued development or production of a major sys15 tem or highly specialized equipment when it is likely

16 that award to a source other than the original

17 source would result in (i) substantial duplication of

18 cost to the Government which is not expected to be

19 recovered through competition, or (ii) unacceptable

20 delays in fulfilling the executive agency’s needs, such

21 property may be deemed to be available only from

22 the original source and may be procured through

23 procedures other than competitive procedures.

24 ‘‘(2) The authority of the head of an executive agency

25 under subsection (c)(7) may not be delegated.
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1 ‘‘(e) An executive agency using procedures other than

2 competitive procedures to procure property or services by

3 reason of the application of subsection (c)(2) or (c)(6)

4 shall request offers from as many potential sources as is

5 practicable under the circumstances.

6 ‘‘(f)(1) Except as provided in paragraph (2), an exec7 utive agency may not award a contract using procedures

8 other than competitive procedures unless—

9 ‘‘(A) the contracting officer for the contract

10 justifies the use of such procedures in writing and

11 certifies the accuracy and completeness of the jus12 tification;

13 ‘‘(B) the justification is approved—

14 ‘‘(i) in the case of a contract for an

15 amount exceeding $100,000 (but equal to or

16 less than $1,000,000), by the competition advo17 cate for the procuring activity (without further

18 delegation) or by an official referred to in

19 clause (ii), (iii), or (iv);

20 ‘‘(ii) in the case of a contract for an

21 amount exceeding $1,000,000 (but equal to or

22 less than $10,000,000), by the head of the pro23 curing activity or a delegate who, if a member

24 of the armed forces, is a general or flag officer

25 or, if a civilian; is serving in a position in grade
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1 GS–16 or above under the General Schedule (or

2 in a comparable or higher position under an3 other schedule); or

4 ‘‘(iii) in the case of a contract for an

5 amount exceeding $10,000,000, by the senior

6 procurement executive of the agency designated

7 pursuant to section 16(3) (without further dele8 gation); and

9 ‘‘(C) any required notice has been published

10 with respect to such contract pursuant to section 18

11 and all bids or proposals received in response to

12 such notice have been considered by such executive

13 agency.

14 ‘‘(2) In the case of a procurement permitted by sub15 section (c)(2), the justification and approval required by

16 paragraph (1) may be made after the contract is awarded.

17 The justification and approval required by paragraph (1)

18 is not required—

19 ‘‘(A) when a statute expressly requires that the

20 procurement be made from a specified source;

21 ‘‘(B) when the agency’s need is for a brand22 name commercial item for authorized resale;

23 ‘‘(C) in the case of a procurement permitted by

24 subsection (c)(7); or
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1 ‘‘(D) in the case of a procurement conducted

2 under (i) the Act of June 25, 1938 (41 U.S.C. 46

3 et seq.), popularly referred to as the Wagner-O’Day

4 Act, or (ii) section 8(a) of the Small Business Act

5 (15 U.S.C. 637(a)).

6 ‘‘(3) The justification required by paragraph (1)(A)

7 shall include—

8 ‘‘(A) a description of the agency’s needs;

9 ‘‘(B) an identification of the statutory exception

10 from the requirement to use competitive procedures

11 and a demonstration, based on the proposed contrac12 tor’s qualifications or the nature of the procurement,

13 of the reasons for using that exception;

14 ‘‘(C) a determination that the anticipated cost

15 will be fair and reasonable;

16 ‘‘(D) a description of the market survey con17 ducted or a statement of the reasons a market sur18 vey was not conducted;

19 ‘‘(E) a listing of the sources, if any, that ex20 pressed in writing an interest in the procurement;

21 and

22 ‘‘(F) a statement of the actions, if any, the

23 agency may take to remove or overcome a barrier to

24 competition before a subsequent procurement for

25 such needs.
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1 ‘‘(4) The justification required by paragraph (1)(A)

2 and any related information shall be made available for

3 inspection by the public consistent with the provisions of

4 section 552 of title 5, United States Code.

5 ‘‘(5) In no case may an executive agency—

6 ‘‘(A) enter into a contract for property or serv7 ices using procedures other than competitive proce8 dures on the basis of the lack of advance planning

9 or concerns related to the amount of funds available

10 to the agency for procurement functions; or

11 ‘‘(B) procure property or services from another

12 executive agency unless such other executive agency

13 complies fully with the requirements of this title in

14 its procurement of such property or services.

15 The restriction set out in clause (B) is in addition to, and

16 not in lieu of any other restriction provided by law.

17 ‘‘(g)(1) In order to promote efficiency and economy

18 in contracting and to avoid unnecessary burdens for agen19 cies and contractors, the Federal Acquisition Regulation

20 shall provide for special simplified procedures for small

21 purchases of property and services.

22 ‘‘(2) For the purposes of this title, a small purchase

23 is a purchase or contract for an amount which does not

24 exceed the small purchase threshold.
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1 ‘‘(3) A proposed purchase or contract for an amount

2 above the small purchase threshold may not be divided

3 into several purchases or contracts for lesser amounts in

4 order to use the small purchase procedures required by

5 paragraph (1).

6 ‘‘(4) In using small purchase procedures, an executive

7 agency shall promote competition to the maximum extent

8 practicable.

9 ‘‘(5) In this subsection, the term ‘small purchase

10 threshold’ has the meaning given such term in section

11 4(11) of the Office of Federal Procurement Policy Act (41

12 U.S.C. 403(11).’’.

13 PART II—PLANNING, SOLICITATION,

14 EVALUATION, AND AWARD

15 SEC. 1061. SOLICITATION, EVALUATION, AND AWARD.

16 (a) CONTENT OF SOLICITATION.—The Office of Fed17 eral Procurement Policy Act (41 U.S.C. 401 et seq.), as

18 amended by section 1051, is further amended by adding

19 at the end the following new section:

20 ‘‘SEC. 30. PLANNING AND SOLICITATION REQUIREMENTS.

21 ‘‘(a)(1) In preparing for the procurement of property

22 or services, an executive agency shall—

23 ‘‘(A) specify its needs and solicit bids or pro24 posals in a manner designed to achieve full and open

25 competition for the procurement;
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1 ‘‘(B) use advance procurement planning and

2 market research; and

3 ‘‘(C) develop specifications in such manner as is

4 necessary to obtain full and open competition with

5 due regard to the nature of the property or services

6 to be acquired.

7 ‘‘(2) Each solicitation under this title shall include

8 specifications which—

9 ‘‘(A) consistent with the provisions of this title,

10 permit full and open competition; and

11 ‘‘(B) include restrictive provisions or conditions

12 only to the extent necessary to satisfy the needs of

13 the executive agency or as authorized by law.

14 ‘‘(3) For the purposes of paragraphs (1) and (2), the

15 type of specification included in a solicitation shall depend

16 on the nature of the needs of the executive agency and

17 the market available to satisfy such needs. Subject to such

18 needs, specifications may be stated in terms of—

19 ‘‘(A) function, so that a variety of products or

20 services may qualify;

21 ‘‘(B) performance, including specifications of

22 the range of acceptable characteristics or of the min23 imum acceptable standards; or

24 ‘‘(C) design requirements.
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1 ‘‘(b) In addition to the specifications described in

2 subsection (a), each solicitation for sealed bids or competi3 tive proposals (other than for small purchases) shall at

4 a minimum include—

5 ‘‘(1) a statement of—

6 ‘‘(A) all significant factors and significant

7 subfactors (including cost or price, cost-related

8 or price-related factors and subfactors, and

9 noncost-related or nonprice-related factors and

10 subfactors) which the executive agency reason11 ably expects to consider in evaluating sealed

12 bids or competitive proposals; and

13 ‘‘(B) the relative importance assigned to

14 each of those factors and subfactors; and

15 ‘‘(2)(A) in the case of sealed bids—

16 ‘‘(i) a statement that sealed bids will be

17 evaluated without discussions with the bidders;

18 and

19 ‘‘(ii) the time and place for the opening of

20 the sealed bids; or

21 ‘‘(B) in the case of competitive proposals—

22 ‘‘(i) either a statement that the pro23 posals are intended to be evaluated with,

24 and award made after, discussions with the

25 offerors, or a statement that the proposals
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1 are intended to be evaluated, and award

2 made, without discussions with the offerors

3 (other than discussions conducted for the

4 purpose of minor clarification) unless dis5 cussions are determined to be necessary;

6 and

7 ‘‘(ii) the time and place for submission of

8 proposals.

9 ‘‘(c)(1) In prescribing the evaluation factors to be in10 cluded in each solicitation for competitive proposals, an

11 agency head—

12 ‘‘(A) shall clearly establish the relative impor13 tance assigned to the evaluation factors and

14 subfactors, including the quality of the product or

15 services to be provided (including technical capabil16 ity, management capability, prior experience, and

17 past performance of the offeror);

18 ‘‘(B) shall include cost or price to the Federal

19 Government as an evaluation factor that must be

20 considered in the evaluation of proposals; and

21 ‘‘(C) shall disclose to offerors whether all eval22 uation factors other than price or cost, when com23 bined, are—

24 ‘‘(i) significantly more important than

25 price or cost;
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1 ‘‘(ii) approximately equal in importance to

2 price or cost; or

3 ‘‘(iii) significantly less important than

4 price or cost.

5 ‘‘(2) Nothing in this subsection prohibits an agency

6 from—

7 ‘‘(A) providing additional information in a solic8 itation, including numeric weights for all evaluation

9 factors; or

10 ‘‘(B) stating in a solicitation that award will be

11 made to the offeror that meets the solicitation’s

12 mandatory requirements at the lowest price or

13 cost.’’.

14 (b) EVALUATION AND AWARD.—The Office of Fed15 eral Procurement Policy Act (41 U.S.C. 401 et seq.), as

16 amended by subsection (a), is further amended by adding

17 at the end the following new section:

18 ‘‘SEC. 31. EVALUATION AND AWARD.

19 ‘‘(a) An executive agency shall evaluate sealed bids

20 and competitive proposals, and award a contract, based

21 solely on the factors specified in the solicitation.

22 ‘‘(b) All sealed bids or competitive proposals received

23 in response to a solicitation may be rejected if the agency

24 head determines that such action is in the public interest.
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1 ‘‘(c) Sealed bids shall be opened publicly at the time

2 and place stated in the solicitation. The executive agency

3 shall evaluate the bids in accordance with subsection (a)

4 without discussions with the bidders and, except as pro5 vided in subsection (b), shall award a contract with rea6 sonable promptness to the responsible source whose bid

7 conforms to the solicitation and is most advantageous to

8 the United States, considering only price and the other

9 price-related factors included in the solicitation. The

10 award of a contract shall be made by transmitting written

11 notice of the award to the successful bidder.

12 ‘‘(d)(1) An agency head shall evaluate competitive

13 proposals in accordance with subsection (a) and may

14 award a contract—

15 ‘‘(A) after discussions with the offerors, pro16 vided that written or oral discussions have been con17 ducted with all responsible offerors who submit pro18 posals within the competitive range; or

19 ‘‘(B) based on the proposals received and with20 out discussions with the offerors (other than discus21 sions conducted for the purpose of minor clarifica22 tion), provided that, as required by section

23 30(b)(2)(B)(i), the solicitation included a statement

24 that proposals are intended to be evaluated, and
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1 award made, without discussions, unless discussions

2 are determined to be necessary.

3 ‘‘(2) Except as otherwise provided in subsection (b),

4 the executive agency shall award a contract with reason5 able promptness to the responsible source whose proposal

6 is most advantageous to the United States, considering

7 only cost or price and the other factors included in the

8 solicitation. The executive agency shall award the contract

9 by transmitting written notice of the award to such source

10 and shall promptly notify all other offerors of the rejection

11 of their proposals.

12 ‘‘(e) If the agency head considers that a bid or pro13 posal evidences a violation of the antitrust laws, such

14 agency head shall refer the bid or proposal to the Attorney

15 General for appropriate action.

16 ‘‘(f)(1)(A) In preparing a solicitation for the award

17 of a development contract for a major system, the head

18 of an agency shall consider requiring in the solicitation

19 that an offeror include in its offer proposals described in

20 subparagraph (B). In determining whether to require such

21 proposals, the head of the agency shall give due consider22 ation to the purposes for which the system is being pro23 cured and the technology necessary to meet the system’s

24 required capabilities. If such proposals are required, the
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1 head of the agency shall consider them in evaluating the

2 offeror’s price.

3 ‘‘(B) The proposals that the head of an agency is to

4 consider requiring in a solicitation for the award of a de5 velopment contract are the following:

6 ‘‘(i) Proposals to incorporate in the design of

7 the major system items which are currently available

8 within the supply system of the Federal agency re9 sponsible for the major system, available elsewhere

10 in the national supply system, or commercially avail11 able from more than one source.

12 ‘‘(ii) With respect to items that are likely to be

13 required in substantial quantities during the sys14 tem’s service life, proposals to incorporate in the de15 sign of the major system items which the United

16 States will be able to acquire competitively in the fu17 ture.

18 ‘‘(2)(A) In preparing a solicitation for the award of

19 a production contract for a major system, the head of an

20 agency shall consider requiring in the solicitation that an

21 offeror include in its offer proposals described in subpara22 graph (B). In determining whether to require such propos23 als, the head of the agency shall give due consideration

24 to the purposes for which the system is being procured

25 and the technology necessary to meet the system’s re-
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1 quired capabilities. If such proposals are required, the

2 head of the agency shall consider them in evaluating the

3 offeror’s price.

4 ‘‘(B) The proposals that the head of an agency is to

5 consider requiring in a solicitation for the award of a pro6 duction contract are proposals identifying opportunities to

7 ensure that the United States will be able to obtain on

8 a competitive basis items procured in connection with the

9 system that are likely to be reprocured in substantial

10 quantities during the service life of the system. Proposals

11 submitted in response to such requirement may include

12 the following:

13 ‘‘(i) Proposals to provide to the United States

14 the right to use technical data to be provided under

15 the contract for competitive reprocurement of the

16 item, together with cost to the United States, if any,

17 of acquiring such technical data and the right to use

18 such data.

19 ‘‘(ii) Proposals for the qualification or develop20 ment of multiple sources of supply for the item.

21 ‘‘(3) If the head of an agency is making a non22 competitive award of a development contract or a produc23 tion contract for a major system, the factors specified in

24 paragraphs (1) and (2) to be considered in evaluating an
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1 offer for a contract may be considered as objectives in ne2 gotiating the contract to be awarded.’’.

3 (c) APPLICABILITY.—

4 (1) IN GENERAL.—Except as provided in para5 graph (2), sections 30 and 31 of the Office of Fed6 eral Procurement Policy Act, as added by sub7 sections (a) and (b), shall apply to—

8 (A) solicitations for sealed bids or competi9 tive proposals issued after the end of the 180-

10 day period beginning on the date of the enact11 ment of this Act; and

12 (B) contracts awarded pursuant to those

13 solicitations.

14 (2) AUTHORITY TO APPLY AMENDMENTS

15 EARLY.—The head of an executive agency may apply

16 sections 30 and 31 of the Office of Federal Procure17 ment Policy Act to solicitations issued before the end

18 of the period referred to in paragraph (1). The head

19 of the executive agency shall publish in the Federal

20 Register notice of any such earlier date of applica21 tion at least 10 days before that date.

22 (d) STANDARDS AND REQUIREMENTS FOR COST AND

23 PRICE AS EVALUATION FACTORS.—

24 (1) IN GENERAL.—The Federal Acquisition

25 Regulation, as revised pursuant to section 7002,
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1 shall establish standards and requirements for the

2 consideration of cost and price to the Federal Gov3 ernment as evaluation factors under section 30(c) of

4 the Office of Federal Procurement Policy Act, as

5 added by subsection (a).

6 (2) STANDARDS AND REQUIREMENTS.—Stand7 ards and requirements established under subsection

8 (a) shall be adequate to ensure that, to the maxi9 mum extent practicable consistent with the needs of

10 the Federal Government in conducting procure11 ments—

12 (A) cost or price is an evaluation factor of

13 sufficient weight to affect each source selection

14 decision; and

15 (B) competition among competing offerors

16 is affected by cost or price.

17 SEC. 1062. SOLICITATION PROVISION REGARDING EVALUA18 TION OF PURCHASE OPTIONS.

19 Section 30 of the Office of Federal Procurement Pol20 icy Act, as added by section 1061(a), is amended by add21 ing at the end the following new subsection:

22 ‘‘(d) An agency head, in issuing a solicitation for a

23 contract to be awarded using sealed bid procedures, may

24 not include in such solicitation a clause providing for the

25 evaluation of prices under the contract for options to pur-
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1 chase additional supplies or services under the contract

2 unless the agency head has determined that there is a rea3 sonable likelihood that the options will be exercised.’’.

4 SEC. 1063. PROMPT NOTICE OF AWARD.

5 (a) SEALED BID PROCEDURES.—Subsection (c) of

6 section 31 of the Office of Federal Procurement Policy

7 Act, as added by section 1061(b), is amended by adding

8 at the end the following: ‘‘Within 3 days after the date

9 of contract award, the agency head shall notify, in writing

10 or by electronic means, offerors not awarded the contract

11 that the contract has been awarded.’’.

12 (b) COMPETITIVE PROPOSALS PROCEDURES.—Para13 graph (2) of subsection (d) of such section is amended

14 in the second sentence by striking out ‘‘shall promptly no15 tify’’ and inserting in lieu thereof ‘‘, within 3 days after

16 the date of contract award, shall notify, in writing or by

17 electronic means,’’.

18 SEC. 1064. POST-AWARD DEBRIEFINGS.

19 Section 31 of the Office of Federal Procurement Pol20 icy Act, as added by section 1061(b), is amended—

21 (1) by redesignating subsections (e) and (f) as

22 subsections (f) and (g), respectively; and

23 (2) by inserting after subsection (d) the follow24 ing new subsection (e):
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1 ‘‘(e)(1) When a contract is awarded by an executive

2 agency on the basis of competitive proposals, an unsuc3 cessful offeror, upon written request received by the execu4 tive agency within 3 days after the date of receipt of notifi5 cation of the contract award, shall be debriefed and fur6 nished the basis for the selection decision and contract

7 award. An employee of the executive agency shall debrief

8 the offeror within 5 days after receipt of the request by

9 the executive agency.

10 ‘‘(2) The debriefing shall include, at a minimum—

11 ‘‘(A) the executive agency’s evaluation of the

12 significant weak or deficient factors in the offeror’s

13 offer;

14 ‘‘(B) the overall evaluated cost of the offer of

15 the contractor awarded the contract and the overall

16 evaluated cost of the offer of the debriefed offeror;

17 ‘‘(C) the overall ranking of all offers and the

18 total technical and cost scores of all offers;

19 ‘‘(D) a summary of the rationale for the award;

20 ‘‘(E) in the case of a proposal that incorporates

21 equipment that is a commercial item, the make and

22 model of the item incorporated in the offer of the

23 contractor awarded the contract; and

24 ‘‘(F) reasonable responses to questions posed by

25 the debriefed offeror as to whether source selection
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1 procedures set forth in the solicitation, applicable

2 regulations, and other applicable authorities were

3 followed by the executive agency.

4 ‘‘(3) The debriefing may not include point-by-point

5 comparisons of the debriefed offeror’s offer with other of6 fers and may not disclose any information that is exempt

7 from disclosure under section 552 of title 5, United States

8 Code, including information relating to—

9 ‘‘(A) trade secrets;

10 ‘‘(B) privileged or confidential manufacturing

11 processes and techniques; and

12 ‘‘(C) commercial and financial information that

13 is privileged or confidential, including cost break14 downs, profit, indirect cost rates, and similar infor15 mation.

16 ‘‘(4) Each solicitation for competitive proposals shall

17 include a statement that information described in para18 graph (2) may be disclosed in post-award debriefings.

19 ‘‘(5) If, within one year after the date of the contract

20 award and as a result of a successful procurement protest

21 or otherwise, the executive agency seeks to fulfill same the

22 requirement under the contract either on the basis of a

23 new solicitation of offers or on the basis of new best and

24 final offers requested for that contract, the agency head

25 shall make available to offerors—
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1 ‘‘(A) the information provided in debriefings

2 under this subsection regarding the offer of the con3 tractor awarded the contract; and

4 ‘‘(B) the comparable debriefing information

5 that was prepared with respect to the original

6 offerors.

7 ‘‘(6) The contracting officer shall include a summary

8 of the debriefing in the contract file.’’.

9 SEC. 1065. PROTEST FILE.

10 Section 31 of the Office of Federal Procurement Pol11 icy Act, as amended by section 1064(1), is further amend12 ed by adding at the end the following:

13 ‘‘(h)(1) If, in the case of a solicitation for a contract

14 issued by, or an award or proposed award of a contract

15 by, an agency head, a protest is filed pursuant to the pro16 cedures in subchapter V of chapter 35 of title 31, United

17 States Code, and an actual or prospective offeror so re18 quests, a file of the protest shall be established by the pro19 curing activity and reasonable access shall be provided to

20 actual or prospective offerors.

21 ‘‘(2) Information exempt from disclosure under sec22 tion 552 of title 5, United States Code, may be redacted

23 in a file established pursuant to paragraph (1) unless an

24 applicable protective order provides otherwise.
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1 ‘‘(3) Regulations implementing this subsection shall

2 be consistent with the regulations regarding the prepara3 tion and submission of an agency’s protest file (the so4 called ‘rule 4 file’) for protests to the General Services

5 Board of Contract Appeals under section 111 of the Fed6 eral Property and Administrative Services Act of 1949 (41

7 U.S.C. 759).’’.

8 SEC. 1066. AWARD OF COSTS AND FEES IN AGENCY SETTLE9 MENT OF PROTESTS.

10 Section 31 of the Office of Federal Procurement Pol11 icy Act, as amended by section 1065, is further amended

12 by adding at the end the following new subsection:

13 ‘‘(i) If, in connection with a protest, an agency head

14 determines that a solicitation, proposed award, or award

15 does not comply with the requirements of law or regula16 tion, the agency head may take—

17 ‘‘(1) any action set out in subparagraphs (A)

18 through (F) of subsection (b)(1) of section 3554 of

19 title 31, United States Code; and

20 ‘‘(2) may pay costs described in paragraph (1)

21 of section 3554(c) of such title.’’.

22 SEC. 1067. AWARD OF MULTIPLE CONTRACTS.

23 Section 31 of the Office of Federal Procurement Pol24 icy Act, as amended by section 1066, is further amended

25 by adding at the end the following new subsection:
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1 ‘‘(j) AWARD OF MULTIPLE CONTRACTS.—In procur2 ing any supply or service using competitive procedures, an

3 executive agency may award more than one contract for

4 the same supply or service in any case in which the head

5 of the agency determines that it is in the best interests

6 of the Federal Government to award those contracts for

7 the purpose of maintaining a continuous source for the

8 supply or service.’’.

9 PART III—KINDS OF CONTRACTS

10 SEC. 1071. AGENCY HEAD DETERMINATION REGARDING

11 USE OF COST TYPE OR INCENTIVE CON12 TRACT.

13 Section 304(b) of the Federal Property and Adminis14 trative Services Act of 1949 (41 U.S.C. 254(b)) is amend15 ed by striking out the second sentence.

16 SEC. 1072. MULTIYEAR CONTRACTING AUTHORITY.

17 (a) IN GENERAL.—Title III of the Federal Property

18 and Administrative Services Act of 1949 (41 U.S.C. 251

19 et seq.) is amended by inserting after section 303G the

20 following new section:

21 ‘‘SEC. 303H. MULTIYEAR CONTRACTS.

22 ‘‘(a) AUTHORITY.—The head of an executive agency

23 may enter into a multiyear contract for the acquisition of

24 property or services if—
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1 ‘‘(1) funds are available and obligated for such

2 contract, for the full period of the contract or for the

3 first fiscal year in which the contract is in effect,

4 and for the estimated costs associated with any nec5 essary termination of such contract;

6 ‘‘(2) the agency head determines that—

7 ‘‘(A) the need for the property or services

8 is reasonably firm and continuing over the pe9 riod of the contract; and

10 ‘‘(B) a multiyear contract will serve the

11 best interests of the United States by encourag12 ing full and open competition or promoting

13 economy in administration, performance, and

14 operation of the agency’s programs; and

15 ‘‘(3) such contract is awarded on a fully com16 petitive basis.

17 ‘‘(b) TERMINATION CLAUSE.—A multiyear contract

18 entered into under the authority of this section shall in19 clude a clause that provides that the contract shall be ter20 minated if funds are not made available for the continu21 ation of such contract in any fiscal year covered by the

22 contract. Amounts available for paying termination costs

23 shall remain available for such purpose until the costs as24 sociated with termination of the contract are paid.
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1 ‘‘(c) CANCELLATION CEILING NOTICE.—Before any

2 contract described in subsection (a) that contains a clause

3 setting forth a cancellation ceiling in excess of

4 $10,000,000 may be awarded, the head of the agency shall

5 give written notification of the proposed contract and of

6 the proposed cancellation ceiling for that contract to the

7 Congress, and such contract may not then be awarded

8 until the end of a period of 30 days beginning on the date

9 of such notification.

10 ‘‘(d) MULTIYEAR CONTRACT DEFINED.—For the

11 purposes of this section, a multiyear contract is a contract

12 for the purchase of property or services for more than one,

13 but not more than five, program years. Such a contract

14 may provide that performance under the contract during

15 the second and subsequent years of the contract is contin16 gent upon the appropriation of funds and (if it does so

17 provide) may provide for a cancellation payment to be

18 made to the contractor if such appropriations are not

19 made.

20 ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec21 tion is intended to modify or affect any other provision

22 of law that authorizes multiyear contracts.’’.

23 (b) CLERICAL AMENDMENT.—The first section of

24 such Act is amended by inserting after the item relating
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1 to section 303G in the table of contents the following new

2 item:

‘‘Sec. 303H. Multiyear contracts.’’.

3 SEC. 1073. SEVERABLE SERVICES CONTRACTS CROSSING

4 FISCAL YEARS.

5 (a) IN GENERAL.—Title III of the Federal Property

6 and Administrative Services Act of 1949 (41 U.S.C. 251

7 et seq.), as amended by section 1072, is further amended

8 by inserting after section 303H the following new section:

9 ‘‘SEC. 303I. SEVERABLE SERVICES CONTRACTS FOR PERI10 ODS CROSSING FISCAL YEARS.

11 ‘‘(a) AUTHORITY.—The head of an executive agency

12 may enter into a severable contract for procurement of

13 services for a period that begins in one fiscal year and

14 ends in the next fiscal year if (without regard to any op15 tion to extend the period of the contract) the contract pe16 riod does not exceed one year.

17 ‘‘(b) AVAILABILITY OF FUNDS.—To the extent pro18 vided in appropriations Acts, funds obligated for a con19 tract entered into under the authority of subsection (a)

20 shall remain available until no longer needed to pay for

21 such contract.

22 ‘‘(c) SEVERABLE CONTRACT DEFINED.—In this sec23 tion, the term ‘severable contract’ means a contract that

24 contains a clause that makes the effectiveness of the con25 tract for periods after the end of the fiscal year in which
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1 the performance of the contract begins subject to the

2 availability of appropriations.’’.

3 (b) CLERICAL AMENDMENT.—The first section of

4 such Act is amended by inserting after the item relating

5 to section 303H in the table of contents the following new

6 item:

‘‘Sec. 303I. Severable services contracts for periods crossing fiscal years.’’.

7 SEC. 1074. ECONOMY ACT PURCHASES.

8 (a) REGULATIONS REQUIRED.—Not later than six

9 months after the date of the enactment of this Act, the

10 Federal Acquisition Regulation shall be revised to include

11 regulations governing the exercise of the authority under

12 section 1535 of title 31, United States Code, for Federal

13 agencies to purchase goods and services under contracts

14 entered into or administered by other agencies.

15 (b) CONTENT OF REGULATIONS.—The regulations

16 prescribed pursuant to subsection (a) shall—

17 (1) require that each purchase described in sub18 section (a) be approved in advance by a contracting

19 officer of the ordering agency with authority to con20 tract for the goods or services to be purchased or by

21 another official in a position specifically designated

22 by regulation to approve such purchase;

23 (2) provide that such a purchase of goods or

24 services may be made only if—
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1 (A) the purchase is appropriately made

2 under a contract that the agency filling the pur3 chase order entered into, before the purchase

4 order, in order to meet the requirements of

5 such agency for the same or similar goods or

6 services;

7 (B) the agency filling the purchase order is

8 better qualified to enter into or administer the

9 contract for such goods or services by reason of

10 capabilities or expertise that is not available

11 within the ordering agency; or

12 (C) the agency or unit filling the order is

13 specifically authorized by law or regulations to

14 purchase such goods or services on behalf of

15 other agencies;

16 (3) prohibit any such purchase under a contract

17 or other agreement entered into or administered by

18 an agency not covered by the Federal Acquisition

19 Regulation unless the purchase is approved in ad20 vance by the senior procurement official responsible

21 for purchasing by the ordering agency; and

22 (4) prohibit any payment to the agency filling

23 a purchase order of any fee that exceeds the actual

24 cost or, if the actual cost is not known, the esti25 mated cost of entering into and administering the
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1 contract or other agreement under which the order

2 is filled.

3 (c) MONITORING SYSTEM REQUIRED.—The Adminis4 trator for Federal Procurement Policy shall ensure that,

5 not later than one year after the date of the enactment

6 of this Act, systems for collecting and evaluating procure7 ment data are capable of collecting and evaluating appro8 priate data on procurements conducted under the regula9 tions prescribed pursuant to subsection (a).

10 (d) TERMINATION.—This section shall cease to be ef11 fective one year after the date on which final regulations

12 prescribed pursuant to subsection (a) take effect.

13 PART IV—MISCELLANEOUS

14 SEC. 1091. POLICY REGARDING CONSIDERATION OF CON15 TRACTOR PAST PERFORMANCE.

16 (a) POLICY.—Section 2 of the Office of Federal Pro17 curement Policy Act (41 U.S.C. 401) is amended—

18 (1) by striking out ‘‘and’’ at the end of para19 graph (12);

20 (2) by striking out the period at the end of

21 paragraph (13) and inserting in lieu thereof ‘‘; and’’;

22 and

23 (3) by adding at the end the following new

24 paragraph:
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1 ‘‘(14) establishing policies and procedures that

2 encourage the consideration of contractors’ past per3 formance in the selection of contractors.’’.

4 (b) GUIDANCE REQUIRED.—Section 6 of the Office

5 of Federal Procurement Policy Act (41 U.S.C. 405) is

6 amended by adding at the end the following:

7 ‘‘(j)(1) Congress makes the following findings:

8 ‘‘(A) Past contract performance of an offeror is

9 one of the relevant factors that contracting officials

10 of executive agencies should consider in entering into

11 contracts.

12 ‘‘(B) It is appropriate for a contracting official

13 to consider past contract performance of an offeror

14 as an indicator of the likelihood that the offeror will

15 successfully perform a contract to be entered into by

16 that official.

17 ‘‘(2) The Administrator shall prescribe for executive

18 agencies guidance regarding consideration of the past con19 tract performance of offerors in awarding contracts. The

20 guidance shall include—

21 ‘‘(A) standards for evaluating past performance

22 with respect to cost (when appropriate), schedule,

23 compliance with technical or functional specifica24 tions, and other relevant performance factors that
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1 facilitate consistent and fair evaluation by all execu2 tive agencies;

3 ‘‘(B) policies for the collection and maintenance

4 of information on past contract performance that, to

5 the maximum extent practicable, facilitate auto6 mated collection, maintenance, and dissemination of

7 information and provide for ease of collection, main8 tenance, and dissemination of information by other

9 methods, as necessary; and

10 ‘‘(C) policies for ensuring that offerors are af11 forded an opportunity to submit information on past

12 contract performance and that information submit13 ted by offerors is considered.

14 ‘‘(3) The Administrator shall prescribe for all execu15 tive agencies the policy regarding the period for which in16 formation on past performance of offerors may be main17 tained and considered.

18 ‘‘(4) In the case of an offeror regarding whom there

19 is no information on past contract performance or regard20 ing whom information on past contract performance is not

21 available, the offeror may not be evaluated favorably or

22 unfavorably on the factor of past contract performance.’’.
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1 SEC. 1092. REPEAL OF REQUIREMENT FOR ANNUAL RE2 PORT ON COMPETITION.

3 Section 23 of the Office of Federal Procurement Pol4 icy Act (41 U.S.C. 419) is repealed.

5 SEC. 1093. DISCOURAGEMENT OF NONSTANDARD CON6 TRACT CLAUSES.

7 Section 31 of the Office of Federal Procurement Pol8 icy Act, as amended by section 1067, is further amended

9 by adding at the end the following new subsection:

10 ‘‘(k) NONSTANDARD CONTRACT CLAUSES.—The

11 Federal Acquisition Regulatory Council shall promulgate

12 regulations to discourage the use of a nonstandard con13 tract clause on a repetitive basis. The regulations shall in14 clude provisions that—

15 ‘‘(1) clearly define nonstandard clauses; and

16 ‘‘(2) require prior approval for the use of a

17 nonstandard clause on a repetitive basis by an offi18 cial at a level of responsibility above the contracting

19 officer.’’.

20 SEC. 1094. REPEAL OF OBSOLETE PROVISION.

21 (a) REPEAL.—Section 303E of the Federal Property

22 and Administrative Services Act of 1949 (41 U.S.C. 253e)

23 is repealed.

24 (b) CLERICAL AMENDMENT.—The table of contents

25 in the first section of such Act is amended by striking out

26 the item relating to section 303E.
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1 Subtitle B—Truth in Negotiations

2 SEC. 1251. PROVISIONS TO ENSURE UNIFORM TREATMENT

3 OF COST OR PRICING DATA.

4 The Office of Federal Procurement Policy Act (41

5 U.S.C. 401 et seq.), as amended by section 1061, is fur6 ther amended by adding after section 31 the following new

7 section:

8 ‘‘SEC. 32. COST OR PRICING DATA: TRUTH IN NEGOTIA9 TIONS.

10 ‘‘(a) REQUIRED COST OR PRICING DATA AND CER11 TIFICATION.—(1) An agency head shall require offerors,

12 contractors, and subcontractors to make cost or pricing

13 data available as follows:

14 ‘‘(A) An offeror for a prime contract under this

15 title to be entered into using procedures other than

16 sealed-bid procedures shall be required to submit

17 cost or pricing data before the award of a contract

18 if—

19 ‘‘(i) in the case of a prime contract entered

20 into after the date of the enactment of the Fed21 eral Acquisition Improvement Act of 1994, the

22 price of the contract to the United States is ex23 pected to exceed $500,000; and

24 ‘‘(ii) in the case of a prime contract en25 tered into on or before the date of the enact-
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1 ment of the Federal Acquisition Improvement

2 Act of 1994, the price of the contract to the

3 United States is expected to exceed $100,000.

4 ‘‘(B) The contractor for a prime contract under

5 this chapter shall be required to submit cost or pric6 ing data before the pricing of a change or modifica7 tion to the contract if—

8 ‘‘(i) in the case of a change or modification

9 made to a prime contract referred to in sub10 paragraph (A)(i), the price adjustment is ex11 pected to exceed $500,000;

12 ‘‘(ii) in the case of a change or modifica13 tion made to a prime contract that was entered

14 into on or before the date of the enactment of

15 the Federal Acquisition Improvement Act of

16 1994, and that has been modified pursuant to

17 paragraph (6), the price adjustment is expected

18 to exceed $500,000; and

19 ‘‘(iii) in the case of a change or modifica20 tion not covered by clause (i) or (ii), the price

21 adjustment is expected to exceed $100,000.

22 ‘‘(C) An offeror for a subcontract (at any tier)

23 of a contract under this title shall be required to

24 submit cost or pricing data before the award of the

25 subcontract if the prime contractor and each higher-
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1 tier subcontractor have been required to make avail2 able cost or pricing data under this section and—

3 ‘‘(i) in the case of a subcontract under a

4 prime contract referred to in subparagraph

5 (A)(i), the price of the subcontract is expected

6 to exceed $500,000;

7 ‘‘(ii) in the case of a subcontract entered

8 into under a prime contract that was entered

9 into on or before the date of the enactment of

10 the Federal Acquisition Improvement Act of

11 1994, and that has been modified pursuant to

12 paragraph (6), the price of the subcontract is

13 expected to exceed $500,000; and

14 ‘‘(iii) in the case of a subcontract not cov15 ered by clause (i) or (ii), the price of the sub16 contract is expected to exceed $100,000.

17 ‘‘(D) The subcontractor for a subcontract cov18 ered by subparagraph (C) shall be required to sub19 mit cost or pricing data before the pricing of a

20 change or modification to the subcontract if—

21 ‘‘(i) in the case of a change or modification

22 to a subcontract referred to in subparagraph

23 (C)(i) or (C)(ii), the price adjustment is ex24 pected to exceed $500,000; and
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1 ‘‘(ii) in the case of a change or modifica2 tion to a subcontract referred to in subpara3 graph (C)(iii), the price adjustment is expected

4 to exceed $100,000.

5 ‘‘(2) A person required, as an offeror, contractor, or

6 subcontractor, to submit cost or pricing data under para7 graph (1) (or required by the head of the procuring activ8 ity concerned to submit such data under subsection (c))

9 shall be required to certify that, to the best of the person’s

10 knowledge and belief, the cost or pricing data submitted

11 are accurate, complete, and current.

12 ‘‘(3) Cost or pricing data required to be submitted

13 under paragraph (1) (or under subsection (c)), and a cer14 tification required to be submitted under paragraph (2),

15 shall be submitted—

16 ‘‘(A) in the case of a submission by a prime

17 contractor (or an offeror for a prime contract), to

18 the contracting officer for the contract (or to a des19 ignated representative of the contracting officer); or

20 ‘‘(B) in the case of a submission by a sub21 contractor (or an offeror for a subcontract), to the

22 prime contractor.

23 ‘‘(4) Except as provided under subsection (b), this

24 section applies to contracts entered into by an agency head

25 on behalf of a foreign government.
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1 ‘‘(5) For purposes of paragraph (1)(C), a contractor

2 or subcontractor granted a waiver under subsection (b)(2)

3 shall be considered as having been required to make avail4 able cost or pricing data under this section.

5 ‘‘(6) Upon the request of a contractor that was re6 quired to submit cost or pricing data under paragraph (1)

7 in connection with a prime contract entered into on or be8 fore the date of the enactment of the Federal Acquisition

9 Improvement Act of 1994, the agency head that entered

10 into such contract shall modify the contract to reflect sub11 paragraphs (B)(ii) and (C)(ii) of paragraph (1). All such

12 modifications shall be made without requiring consider13 ation.

14 ‘‘(7) Effective on October 1 of each year that is divis15 ible by 5, each amount set forth in paragraph (1) shall

16 be adjusted to the amount that is equal to the fiscal year

17 1994 constant dollar value of the amount set forth. Any

18 amount, as so adjusted, that is not evenly divisible by

19 $50,000 shall be rounded to the nearest multiple of

20 $50,000. In the case of an amount that is evenly divisible

21 by $25,000 but not evenly divisible by $50,000, the

22 amount shall be rounded to the next higher multiple of

23 $50,000.

24 ‘‘(b) EXCEPTIONS.—(1) Submission of cost and pric25 ing data shall not be required under subsection (a)—
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1 ‘‘(A) in the case of a contract, a subcontract,

2 or a contract or subcontract modification, for which

3 the price agreed upon is based on—

4 ‘‘(i) adequate price competition;

5 ‘‘(ii) established catalog or market prices

6 of commercial items or of services regularly

7 used for other than Government purposes, as

8 the case may be, that are sold in substantial

9 quantities to the general public; or

10 ‘‘(iii) prices set by law or regulation; or

11 ‘‘(B) in an exceptional case when the head of

12 the procuring activity, without delegation, deter13 mines that the requirements of this section may be

14 waived, justifies in writing the reasons for such de15 termination, and certifies the accuracy and com16 pleteness of the justification.

17 ‘‘(2) The Federal Acquisition Regulation (issued

18 under section 25(c)) shall provide clear standards for de19 termining whether the exceptions provided in paragraph

20 (1)(A) apply. In the case of the exception provided in

21 paragraph (1)(A)(i), the regulations shall specify the cri22 teria that will be used to determine whether adequate price

23 competition exists. In the case of the exception provided

24 in paragraph (1)(A)(ii), the regulations shall preclude the

25 consideration of sales to the Federal Government, includ-
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1 ing the percentage of an item’s overall sales that are made

2 to the Federal Government, when determining whether the

3 item has been sold in substantial quantities to the public.

4 ‘‘(c) AUTHORITY TO REQUIRE COST OR PRICING

5 DATA ON BELOW-THRESHOLD CONTRACTS.—When cost

6 or pricing data are not required to be submitted by sub7 section (a), such data may nevertheless be required to be

8 submitted by the head of the procuring activity, but only

9 if the head of the procuring activity determines that such

10 data are necessary for the evaluation by the agency of the

11 reasonableness of the price of the contract or subcontract.

12 In any case in which the head of the procuring activity

13 requires such data to be submitted under this subsection,

14 the head of the procuring activity shall justify in writing

15 the reason for such requirement and certify the accuracy

16 and completeness of the justification. The head of the pro17 curing activity may not delegate the functions under this

18 subsection.

19 ‘‘(d) ADDITIONAL EXCEPTION PROVISIONS REGARD20 ING COMMERCIAL ITEMS.—(1) In any case in which it is

21 not practicable to conduct a procurement of a commercial

22 item on a competitive basis and the procurement is not

23 covered by an exception in subsection (b), the contracting

24 officer shall nonetheless exempt a contract or subcontract
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1 under the procurement from the requirements of sub2 section (a) if the contracting officer develops or obtains

3 from the offeror or contractor, or from another source or

4 sources, in accordance with standards and procedures set

5 forth in the Federal Acquisition Regulation, information

6 on prices at which the same or similar items have been

7 sold in the commercial market that is adequate for evalu8 ating the reasonableness of the price of the contract or

9 subcontract for a commercial item.

10 ‘‘(2)(A) In accordance with procedures prescribed in

11 the Federal Acquisition Regulation, an agency head shall

12 have the right to examine all information provided by an

13 offeror, contractor, or subcontractor pursuant to sub14 section (b)(1)(A) or paragraph (1) of this subsection and

15 all books and records of such offeror, contractor, or sub16 contractor that directly relate to such information in order

17 to determine whether the agency is receiving accurate in18 formation required under this section.

19 ‘‘(B) The right under subparagraph (A) shall expire

20 1 year after the date of commencement of performance

21 of the contract, or 1 year after the date of commencement

22 of performance of the modification of the contract, with

23 respect to which the information was provided.
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1 ‘‘(3) The Federal Acquisition Regulation shall estab2 lish reasonable limitations on requests under this section

3 for sales data relating to commercial items.

4 ‘‘(e) PRICE REDUCTIONS FOR DEFECTIVE COST OR

5 PRICING DATA.—(1)(A) A prime contract (or change or

6 modification to a prime contract) under which a certificate

7 under subsection (a)(2) is required shall contain a provi8 sion that the price of the contract to the United States,

9 including profit or fee, shall be adjusted to exclude any

10 significant amount by which it may be determined by the

11 agency head that such price was increased because the

12 contractor (or any subcontractor required to make avail13 able such a certificate) submitted defective cost or pricing

14 data.

15 ‘‘(B) For the purposes of this section, defective cost

16 or pricing data are cost or pricing data which, as of the

17 date of agreement on the price of the contract (or another

18 date agreed upon between the parties), were inaccurate,

19 incomplete, or noncurrent. If for purposes of the preceding

20 sentence the parties agree upon a date other than the date

21 of agreement on the price of the contract, the date agreed

22 upon by the parties shall be as close to the date of agree23 ment on the price of the contract as is practicable.

24 ‘‘(2) In determining for purposes of a contract price

25 adjustment under a contract provision required by para-
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1 graph (1) whether, and to what extent, a contract price

2 was increased because the contractor (or a subcontractor)

3 submitted defective cost or pricing data, it shall be a de4 fense that the United States did not rely on the defective

5 data submitted by the contractor or subcontractor.

6 ‘‘(3) It is not a defense to an adjustment of the price

7 of a contract under a contract provision required by para8 graph (1) that—

9 ‘‘(A) the price of the contract would not have

10 been modified even if accurate, complete, and cur11 rent cost or pricing data had been submitted by the

12 contractor or subcontractor because the contractor

13 or subcontractor—

14 ‘‘(i) was the sole source of the property or

15 services procured; or

16 ‘‘(ii) otherwise was in a superior bargain17 ing position with respect to the property or

18 services procured;

19 ‘‘(B) the contracting officer should have known

20 that the cost and pricing data in issue were defective

21 even though the contractor or subcontractor took no

22 affirmative action to bring the character of the data

23 to the attention of the contracting officer;

24 ‘‘(C) the contract was based on an agreement

25 between the contractor and the United States about
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1 the total cost of the contract and there was no

2 agreement about the cost of each item procured

3 under such contract; or

4 ‘‘(D) the prime contractor or subcontractor did

5 not submit a certification of cost and pricing data

6 relating to the contract as required under subsection

7 (a)(2).

8 ‘‘(4)(A) A contractor shall be allowed to offset an

9 amount against the amount of a contract price adjustment

10 under a contract provision required by paragraph (1) if—

11 ‘‘(i) the contractor certifies to the contracting

12 officer (or to a designated representative of the con13 tracting officer) that, to the best of the contractor’s

14 knowledge and belief, the contractor is entitled to

15 the offset; and

16 ‘‘(ii) the contractor proves that the cost or pric17 ing data were available before the date of agreement

18 on the price of the contract (or price of the modi19 fication), or, if applicable consistent with paragraph

20 (1)(B), another date agreed upon between the par21 ties, and that the data were not submitted as speci22 fied in subsection (a)(3) before such date.

23 ‘‘(B) A contractor shall not be allowed to offset an

24 amount otherwise authorized to be offset under subpara25 graph (A) if—
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1 ‘‘(i) the certification under subsection (a)(2)

2 with respect to the cost or pricing data involved was

3 known to be false when signed; or

4 ‘‘(ii) the United States proves that, had the cost

5 or pricing data referred to in subparagraph (A)(ii)

6 been submitted to the United States before the date

7 of agreement on the price of the contract (or price

8 of the modification) or, if applicable under para9 graph (1)(B), another date agreed upon between the

10 parties, the submission of such cost or pricing data

11 would not have resulted in an increase in that price

12 in the amount to be offset.

13 ‘‘(f) INTEREST AND PENALTIES FOR CERTAIN OVER14 PAYMENTS.—(1) If the United States makes an overpay15 ment to a contractor under a contract with an executive

16 agency subject to this section and the overpayment was

17 due to the submission by the contractor of defective cost

18 or pricing data, the contractor shall be liable to the United

19 States—

20 ‘‘(A) for interest on the amount of such over21 payment, to be computed—

22 ‘‘(i) for the period beginning on the date

23 the overpayment was made to the contractor

24 and ending on the date the contractor repays
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1 the amount of such overpayment to the United

2 States; and

3 ‘‘(ii) at the current rate prescribed by the

4 Secretary of the Treasury under section 6621

5 of the Internal Revenue Code of 1986; and

6 ‘‘(B) if the submission of such defective data

7 was a knowing submission, for an additional amount

8 equal to the amount of the overpayment.

9 ‘‘(2) Any liability under this subsection of a contrac10 tor that submits cost or pricing data but refuses to submit

11 the certification required by subsection (a)(2) with respect

12 to the cost or pricing data shall not be affected by the

13 refusal to submit such certification.

14 ‘‘(g) RIGHT OF UNITED STATES TO EXAMINE CON15 TRACTOR RECORDS.—For the purpose of evaluating the

16 accuracy, completeness, and currency of cost or pricing

17 data required to be submitted by this section, the head

18 of an agency shall have the rights provided by section

19 38(a)(2).

20 ‘‘(h) COST OR PRICING DATA DEFINED.—In this sec21 tion, the term ‘cost or pricing data’ means all facts that,

22 as of the date of agreement on the price of a contract

23 (or the price of a contract modification) or, if applicable

24 consistent with subsection (e)(1)(B), another date agreed

25 upon between the parties, a prudent buyer or seller would
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1 reasonably expect to affect price negotiations significantly.

2 Such terms does not include information that is

3 judgmental, but does include the factual information from

4 which a judgment was derived.’’.

5 Subtitle C—Procurement Protests

6 PART I—PROTESTS TO THE COMPTROLLER

7 GENERAL

8 SEC. 1401. PROTEST DEFINED.

9 Paragraph (1) of section 3551 of title 31, United

10 States Code, is amended to read as follows:

11 ‘‘(1) ‘protest’ means a written objection by an

12 interested party—

13 ‘‘(i) to a solicitation or other request by a

14 Federal agency for offers for a contract for the

15 procurement of property or services;

16 ‘‘(ii) to the cancellation of such a solicita17 tion or other request;

18 ‘‘(iii) to an award or proposed award of

19 such a contract; or

20 ‘‘(iv) to a termination or cancellation of an

21 award of such a contract, if the written objec22 tion contains an allegation that the termination

23 or cancellation is based in whole or in part on

24 improprieties concerning the award of the con25 tract;’’.
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1 SEC. 1402. REVIEW OF PROTESTS AND EFFECT ON CON2 TRACTS PENDING DECISION.

3 (a) PERIODS FOR CERTAIN ACTIONS.—Section 3553

4 of title 31, United States Code, is amended—

5 (1) in subsection (b)—

6 (A) in paragraph (1), by striking out ‘‘one

7 working day of’’ and inserting in lieu thereof

8 ‘‘one day after’’; and

9 (B) in paragraph (2)—

10 (i) in subparagraph (A), by striking

11 out ‘‘25 working days from’’ and inserting

12 in lieu thereof ‘‘35 days after’’; and

13 (ii) in subparagraph (C), by striking

14 out ‘‘10 working days from’’ and inserting

15 in lieu thereof ‘‘15 days after’’; and

16 (2) in subsection (c)(3), by striking out ‘‘there17 after’’ and inserting in lieu thereof ‘‘after the mak18 ing of such finding’’.

19 (b) SUSPENSION OF PERFORMANCE.—Subsection (d)

20 of such section is amended to read as follows:

21 ‘‘(d)(1) A contractor awarded a Federal agency con22 tract may, during the period described in paragraph (4),

23 begin performance of the contract and engage in any relat24 ed activities that result in obligations being incurred by

25 the United States under the contract unless the contract26 ing officer responsible for the award of the contract with-
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1 holds authorization to proceed with performance of the

2 contract.

3 ‘‘(2) The contracting officer may withhold an author4 ization to proceed with performance of the contract during

5 the period described in paragraph (4) if the contracting

6 officer determines in writing that—

7 ‘‘(A) a protest is likely to be filed; and

8 ‘‘(B) the immediate performance of the contract

9 is not in the best interests of the United States.

10 ‘‘(3)(A) If the Federal agency awarding the contract

11 receives notice of a protest in accordance with this section

12 during the period described in paragraph (4)—

13 ‘‘(i) the contracting officer may not authorize

14 performance of the contract to begin while the pro15 test is pending; or

16 ‘‘(ii) if contract performance was authorized in

17 accordance with paragraph (2) before receipt of the

18 notice, the contracting officer shall immediately di19 rect the contractor to cease performance under the

20 contract and to suspend any related activities that

21 may result in additional obligations being incurred

22 by the United States under that contract.

23 ‘‘(B) Performance and related activities suspended

24 pursuant to subparagraph (A)(ii) by reason of a protest

25 may not be resumed while the protest is pending.
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1 ‘‘(C) The head of the procuring activity may author2 ize the performance of the contract (notwithstanding a

3 protest of which the Federal agency has notice under this

4 section)—

5 ‘‘(i) upon a written finding that—

6 ‘‘(I) performance of the contract is in the

7 best interests of the United States; or

8 ‘‘(II) urgent and compelling circumstances

9 that significantly affect interests of the United

10 States will not permit waiting for the decision

11 of the Comptroller General concerning the pro12 test; and

13 ‘‘(ii) after the Comptroller General is notified of

14 that finding.

15 ‘‘(4) The period referred to in paragraphs (2) and

16 (3)(A), with respect to a contract, is the period beginning

17 on the date of the contract award and ending on the later

18 of—

19 ‘‘(A) the date that is 10 days after the date of

20 the contract award; or

21 ‘‘(B) the date that is 5 days after the debriefing

22 date offered to an unsuccessful offeror for any de23 briefing that is requested and, when requested, is

24 required.’’.
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1 SEC. 1403. DECISIONS ON PROTESTS.

2 (a) PERIODS FOR CERTAIN ACTIONS.—Section

3 3554(a) of title 31, United States Code, is amended—

4 (1) in paragraph (1), by striking out ‘‘90 work5 ing days from’’ and inserting in lieu thereof ‘‘120

6 days after’’;

7 (2) in paragraph (2), by striking out ‘‘45 cal8 endar days from’’ and inserting ‘‘60 days after’’;

9 (3) by redesignating paragraph (3) as para10 graph (4); and

11 (4) by inserting after paragraph (2) the follow12 ing new paragraph (3):

13 ‘‘(3) An amendment to a protest that adds a new

14 ground of protest, if timely raised, should be resolved, to

15 the maximum extent practicable, within the time limit es16 tablished under paragraph (1) of this subsection for final

17 decision of the initial protest. If an amended protest can18 not be resolved within such time limit, the Comptroller

19 General may resolve the amended protest through the ex20 press option under paragraph (2) of this subsection.’’.

21 (b) GAO RECOMMENDATIONS ON PROTESTS.—

22 (1) IMPLEMENTATION OF RECOMMENDA23 TIONS.—Section 3554 of title 31, United States

24 Code, is amended—

25 (A) in subsection (b), by adding at the end

26 the following new paragraph:
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1 ‘‘(3) If the Federal agency fails to implement fully

2 the recommendations of the Comptroller General under

3 this subsection with respect to a solicitation for a contract

4 or an award or proposed award of a contract within 60

5 days after receiving the recommendations, the head of the

6 procuring activity responsible for that contract shall re7 port such failure to the Comptroller General not later than

8 5 working days after the end of such 60-day period.’’;

9 (B) by striking out subsection (c) and in10 serting in lieu thereof the following:

11 ‘‘(c)(1) If the Comptroller General determines that

12 a solicitation for a contract or a proposed award or the

13 award of a contract does not comply with a statute or reg14 ulation, the Comptroller General may recommend that the

15 Federal agency conducting the procurement pay to an ap16 propriate interested party the costs of—

17 ‘‘(A) filing and pursuing the protest, including

18 reasonable attorney’s fees and consultant and expert

19 witness fees; and

20 ‘‘(B) bid and proposal preparation.

21 ‘‘(2) If the Comptroller General recommends under

22 paragraph (1) that a Federal agency pay costs to an inter23 ested party, the Federal agency shall—

24 ‘‘(A) pay the costs promptly out of funds appro25 priated by section 1304 of this title for the payment
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1 of judgments and reimburse that appropriation ac2 count out of available funds or out of additional

3 funds appropriated for such Federal agency to make

4 such reimbursement; or

5 ‘‘(B) if the Federal agency does not make such

6 payment, promptly report to the Comptroller Gen7 eral the reasons for the failure to follow the Comp8 troller General’s recommendation.

9 ‘‘(3) If the Comptroller General recommends under

10 paragraph (1) that a Federal agency pay costs to an inter11 ested party, the Federal agency and the interested party

12 shall attempt to reach an agreement on the amount of the

13 costs to be paid. If the Federal agency and the interested

14 party are unable to agree on the amount to be paid, the

15 Comptroller General may, upon the request of the inter16 ested party, recommend to the Federal agency the amount

17 of the costs that the Federal agency should pay.’’; and

18 (C) by striking out subsection (e) and in19 serting in lieu thereof the following:

20 ‘‘(e)(1) The Comptroller General shall report prompt21 ly to the Committee on Governmental Affairs and the

22 Committee on Appropriations of the Senate and to the

23 Committee on Government Operations and the Committee

24 on Appropriations of the House of Representatives any

25 case in which a Federal agency fails to implement fully
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1 a recommendation of the Comptroller General under sub2 section (b) or (c). The report shall include—

3 ‘‘(A) a comprehensive review of the pertinent

4 procurement, including the circumstances of the fail5 ure of the Federal agency to implement a rec6 ommendation of the Comptroller General; and

7 ‘‘(B) a recommendation regarding whether, in

8 order to correct an inequity or to preserve the integ9 rity of the procurement process, the Congress should

10 consider—

11 ‘‘(i) private relief legislation;

12 ‘‘(ii) legislative rescission or cancellation of

13 funds;

14 ‘‘(iii) further investigation by the Congress;

15 or

16 ‘‘(iv) other action.

17 ‘‘(2) Not later than January 31 of each year, the

18 Comptroller General shall transmit to the Congress a re19 port containing a summary of each instance in which a

20 Federal agency did not fully implement a recommendation

21 of the Comptroller General under subsection (b) or (c)

22 during the preceding year. The report shall also describe

23 each instance in which a final decision in a protest was

24 not rendered within 125 days after the date the protest

25 is submitted to the Comptroller General.’’.
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1 (2) REQUIREMENT FOR PAYMENT IN ACCORD2 ANCE WITH PRIOR GAO DETERMINATIONS.—

3 Amounts to which the Comptroller General declared

4 an interested party to be entitled under section 3554

5 of title 31, United States Code, as in effect imme6 diately before the enactment of this Act, shall, if not

7 paid or otherwise satisfied by the Federal agency

8 concerned before the date of the enactment of this

9 Act, be paid promptly from the appropriation made

10 by section 1304 of such title for the payment of

11 judgments. The Federal agency shall reimburse that

12 appropriation account out of available funds or out

13 of additional funds appropriated for such Federal

14 agency to make such reimbursement. If the Federal

15 agency is unable to make the reimbursement out of

16 available funds, the head of such agency shall imme17 diately take such action as may be necessary to

18 transmit to Congress a request for an appropriation

19 of additional funds to make such reimbursement.

20 (c) RESTRICTION ON ACCESS TO CERTAIN INFORMA21 TION.—Section 3553(f) of title 31, United States Code,

22 is amended—

23 (1) by inserting ‘‘(1)’’ after ‘‘(f)’’; and

24 (2) by adding at the end the following:
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1 ‘‘(2)(A) The Comptroller General may issue protec2 tive orders which establish terms, conditions, and restric3 tions for the provision of any document to a person under

4 paragraph (1), that prohibit or restrict the disclosure by

5 the person of information described in subparagraph (C)

6 that is contained in such a document.

7 ‘‘(B) The penalties specified under section 27(i) of

8 the Office of Federal Procurement Policy Act shall apply

9 to the disclosure of information described in subparagraph

10 (C) in violation of a term, condition, or restriction in a

11 protective order under this paragraph by a person that

12 is subject to the protective order.

13 ‘‘(C) Information referred to in subparagraphs (A)

14 and (B) is procurement sensitive information, trade se15 crets, or other proprietary or confidential research, devel16 opment, or commercial information.

17 ‘‘(D) A protective order under this paragraph shall

18 not be considered to authorize the withholding of any doc19 ument or information from the Congress or an executive

20 agency.’’.

21 SEC. 1404. REGULATIONS.

22 (a) COMPUTATION OF PERIODS.—Section 3555 of

23 title 31, United States Code, is amended—

24 (1) by redesignating subsection (b) as sub25 section (d); and
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1 (2) by inserting after subsection (a) the follow2 ing new subsection (b):

3 ‘‘(b) The procedures shall provide that, in the com4 putation of any period described in this subchapter—

5 ‘‘(1) the day of the act, event, or default from

6 which the designated period of time begins to run

7 not be included; and

8 ‘‘(2) the last day after such act, event, or de9 fault be included, unless—

10 ‘‘(A) such last day is a Saturday, a Sun11 day, or a legal holiday; or

12 ‘‘(B) in the case of a filing of a paper at

13 the General Accounting Office or a Federal

14 agency, such last day is a day on which weather

15 or other conditions cause the closing of the

16 General Accounting Office or Federal agency,

17 in which event the next day that is not a Satur18 day, Sunday, or legal holiday shall be in19 cluded.’’.

20 (b) ELECTRONIC FILINGS AND DISSEMINATIONS.—

21 Such section, as amended by subsection (a), is further

22 amended by inserting after subsection (b) the following

23 new subsection:

24 ‘‘(c) The Comptroller General may prescribe proce25 dures for the electronic filing and dissemination of docu-
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1 ments and information required under this subchapter. In

2 prescribing such procedures, the Comptroller General shall

3 consider the ability of all parties to achieve electronic ac4 cess to such documents and records.’’.

5 (c) REPEAL OF OBSOLETE DEADLINE.—Subsection

6 (a) of such section is amended by striking out ‘‘Not later

7 than January 15, 1985, the’’ and inserting in lieu thereof

8 ‘‘The’’.

9 PART II—PROTESTS IN PROCUREMENTS OF

10 AUTOMATIC DATA PROCESSING

11 SEC. 1431. REVOCATION OF DELEGATIONS OF PROCURE12 MENT AUTHORITY.

13 Section 111(b)(3) of the Federal Property and Ad14 ministrative Services Act of 1949 (40 U.S.C. 759(b)(3))

15 is amended by inserting after the third sentence the fol16 lowing: ‘‘The Administrator may revoke a delegation of

17 authority with respect to a particular contract before or

18 after award of the contract, except that the Administrator

19 may revoke a delegation after the contract is awarded only

20 when there is a finding of a violation of law or regulation

21 in connection with the contract award.’’.

22 SEC. 1432. AUTHORITY OF THE GENERAL SERVICES ADMIN23 ISTRATION BOARD OF CONTRACT APPEALS.

24 The first sentence of section 111(f)(1) of the Federal

25 Property and Administrative Services Act of 1949 (40
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1 U.S.C. 759(f)(1)) is amended to read as follows: ‘‘Upon

2 request of an interested party in connection with any pro3 curement that is subject to this section (including any

4 such procurement that is subject to delegation of procure5 ment authority), the board of contract appeals of the Gen6 eral Services Administration (hereafter in this subsection

7 referred to as the ‘board’) shall review, as provided in this

8 subsection, any decision by a contracting officer that is

9 alleged to violate a statute, a regulation, or the conditions

10 of a delegation of procurement authority.’’.

11 SEC. 1433. PERIODS FOR CERTAIN ACTIONS.

12 (a) SUSPENSION OF PROCUREMENT AUTHORITY.—

13 (1) Section 111(f)(2)(B) of the Federal Property and Ad14 ministrative Services Act of 1949 (40 U.S.C. 759(f)) is

15 amended—

16 (A) by redesignating clauses (i) and (ii) as

17 subclauses (I) and (II), respectively;

18 (B) by inserting ‘‘(i)’’ after ‘‘(B)’’; and

19 (C) by adding at the end the following:

20 ‘‘(ii) A suspension under this subparagraph shall not

21 preclude the Federal agency concerned from continuing

22 the procurement process up to but not including award

23 of the contract if the Board determines such action is in

24 the best interests of the United States.’’.
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1 (2) Section 111(f) of the Federal Property and Ad2 ministrative Services Act of 1949 (40 U.S.C. 759(f)) is

3 amended in paragraph (3) by striking out subparagraph

4 (A) and inserting in lieu thereof the following:

5 ‘‘(A)(i) If, with respect to an award of a contract,

6 the board receives notice of a protest under this subsection

7 within the period described in clause (ii), the board shall,

8 at the request of an interested party, hold a hearing to

9 determine whether the board should suspend the procure10 ment authority of the Administrator or the Administra11 tor’s delegation of procurement authority for the protested

12 procurement on an interim basis until the board can de13 cide the protest.

14 ‘‘(ii) The period referred to in clause (i) is the period

15 beginning on the date on which the contract is awarded

16 and ending at the end of the later of—

17 ‘‘(I) the tenth day after the date of contract

18 award; or

19 ‘‘(II) the fifth day after the debriefing date of20 fered to an unsuccessful offeror for any debriefing

21 that is requested and, when requested, is required.

22 ‘‘(iii) The board shall hold the requested hearing

23 within 5 days after the date of the filing of the protest.’’.

24 (b) FINAL DECISION.—Paragraph (4)(B) of such sec25 tion 111(f) is amended—
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1 (1) by striking out ‘‘45 working days’’ and in2 serting in lieu thereof ‘‘65 days’’; and

3 (2) by adding at the end the following: ‘‘An

4 amendment which adds a new ground of protest

5 should be resolved, to the maximum extent prac6 ticable, within the time limits established for resolu7 tion of the initial protest.’’.

8 SEC. 1434. DISMISSALS OF PROTESTS.

9 Section 111(f)(4) of the Federal Property and Ad10 ministrative Services Act of 1949 (40 U.S.C. 759(f)(4))

11 is amended by striking out subparagraph (C) and insert12 ing in lieu thereof the following:

13 ‘‘(C) The board may dismiss a protest that the board

14 determines—

15 ‘‘(i) is frivolous;

16 ‘‘(ii) has been brought in bad faith; or

17 ‘‘(iii) does not state on its face a valid basis for

18 protest.’’.

19 SEC. 1435. AWARD OF COSTS.

20 Section 111(f)(5) is amended by striking out sub21 paragraph (C) and inserting in lieu thereof the following:

22 ‘‘(C) Whenever the board makes such a determina23 tion, it may, in accordance with section 1304 of title 31,

24 United States Code, further declare an appropriate pre25 vailing party to be entitled to the cost of filing and pursu-
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1 ing the protest (including reasonable attorney’s fees and

2 consultant and expert witness fees), and bid and proposal

3 preparation.’’.

4 SEC. 1436. DISMISSAL AGREEMENTS.

5 Section 111(f)(5) of the Federal Property and Ad6 ministrative Services Act of 1949 (40 U.S.C. 759(f)(5))

7 is amended by adding at the end the following new sub8 paragraphs:

9 ‘‘(D) Any agreement that provides for the dismissal

10 of a protest and involves a direct or indirect expenditure

11 of appropriated funds shall be submitted to the board and

12 shall be made a part of the public record (subject to any

13 protective order considered appropriate by the board) be14 fore dismissal of the protest. If a Federal agency is a party

15 to a settlement agreement, the submission of the agree16 ment submitted to the board shall include a memorandum,

17 signed by the contracting officer concerned, that describes

18 in detail the procurement, the grounds for protest, the

19 Federal Government’s position regarding the grounds for

20 protest, the terms of the settlement, and the agency’s posi21 tion regarding the propriety of the award or proposed

22 award of the contract at issue in the protest.

23 ‘‘(E) Payment of amounts due from an agency under

24 subparagraph (C) or under the terms of a settlement

25 agreement under subparagraph (D) shall be made from
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1 the appropriation made by section 1304 of title 31, United

2 States Code, for the payment of judgments. The Federal

3 agency concerned shall reimburse that appropriation ac4 count out of funds available for the procurement.’’.

5 SEC. 1437. MATTERS TO BE COVERED IN REGULATIONS.

6 Section 111(f) of the Federal Property and Adminis7 trative Services Act of 1949 (40 U.S.C. 759(f)) is amend8 ed by striking out paragraph (8) and inserting in lieu

9 thereof the following:

10 ‘‘(7)(A) The board shall adopt and issue such rules

11 and procedures as may be necessary to the expeditious dis12 position of protests filed under the authority of this sub13 section.

14 ‘‘(B) The procedures shall provide that, in the com15 putation of any period described in this subsection—

16 ‘‘(i) the day of the act, event, or default from

17 which the designated period of time begins to run

18 not be included; and

19 ‘‘(ii) the last day after such act, event, or de20 fault be included, unless—

21 ‘‘(I) such last day is a Saturday, a Sunday,

22 or a legal holiday; or

23 ‘‘(II) in the case of a filing of a paper at

24 the board, such last day is a day on which

25 weather or other conditions make the board or
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1 Federal agency inaccessible, in which event the

2 next day that is not a Saturday, Sunday, or

3 legal holiday shall be included.

4 ‘‘(C) The procedures may provide for electronic filing

5 and dissemination of documents and information required

6 under this subsection and in so providing shall consider

7 the ability of all parties to achieve electronic access to such

8 documents and records.

9 ‘‘(D) The procedures shall provide that if the board

10 expressly finds that a protest or a portion of a protest

11 is frivolous or has not been brought or pursued in good

12 faith, or that any person has willfully abused the board’s

13 process during the course of a protest, the board may im14 pose appropriate procedural sanctions, including dismissal

15 of the protest.’’.

16 SEC. 1438. DEFINITIONS.

17 (a) PROTEST.—Section 111(f)(9) of the Federal

18 Property and Administrative Services Act of 1949 (40

19 U.S.C. 759(f)(9)) is amended—

20 (1) by striking out ‘‘and’’ at the end of sub21 paragraph (A);

22 (2) by striking out the period at the end of sub23 paragraph (B) and inserting in lieu thereof ‘‘; and’’;

24 and
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1 (3) by adding at the end the following new sub2 paragraph:

3 ‘‘(C) the term ‘protest’ means a written objec4 tion by an interested party—

5 ‘‘(i) to a solicitation or other request by a

6 Federal agency for offers for a contract for the

7 procurement of property or services;

8 ‘‘(ii) to the cancellation of such a solicita9 tion or other request;

10 ‘‘(iii) to an award or proposed award of

11 such a contract; or

12 ‘‘(iv) to a termination or cancellation of an

13 award of such a contract, if the written objec14 tion contains an allegation that the termination

15 or cancellation is based in whole or in part on

16 improprieties concerning the award of the con17 tract;’’.

18 (b) PREVAILING PARTY.—Section 111(f)(9) of such

19 Act is amended by adding at the end the following new

20 subparagraph:

21 ‘‘(C) the term ‘prevailing party’, with respect to

22 a determination of the board under paragraph

23 (5)(B) that a challenged action of a Federal agency

24 violates a statute or regulation or the conditions of

25 a delegation of procurement authority issued pursu-
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1 ant to this section, means a party that demonstrated

2 such violation.’’.

3 SEC. 1439. OVERSIGHT OF ACQUISITION OF AUTOMATIC

4 DATA PROCESSING EQUIPMENT BY FEDERAL

5 AGENCIES.

6 Section 111 of the Federal Property and Administra7 tive Services Act of 1949 (40 U.S.C. 759) is amended by

8 adding at the end the following new subsection:

9 ‘‘(h)(1) The Administrator shall collect and compile

10 data regarding the procurement of automatic data proc11 essing equipment under this section. The data collected

12 and compiled shall include, at a minimum, with regard to

13 each procurement the following:

14 ‘‘(A) The procuring agency.

15 ‘‘(B) The contractor.

16 ‘‘(C) The automatic data processing equipment

17 and services procured.

18 ‘‘(D) The manufacturer of the equipment pro19 cured.

20 ‘‘(E) The amount of the contract, to the extent

21 that the amount is not proprietary information.

22 ‘‘(F) The type of contract used.

23 ‘‘(G) The extent of competition for award.

24 ‘‘(H) Compatibility restrictions.

25 ‘‘(I) Significant modifications of the contract.
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1 ‘‘(J) Contract price, to the extent that the price

2 is not proprietary information.

3 ‘‘(2) The head of each Federal agency shall report

4 to the Administrator in accordance with regulations issued

5 by the Administrator all information that the Adminis6 trator determines necessary in order to satisfy the require7 ments in paragraph (1).

8 ‘‘(3) The Administrator shall—

9 ‘‘(A) carry out a systematic, periodic review of

10 information received under this subsection;

11 ‘‘(B) use such information, as appropriate, to

12 determine the compliance of Federal agencies with

13 the requirements of this section; and

14 ‘‘(C) have the authority to suspend the delega15 tion to a Federal agency of authority to lease or pur16 chase automatic data processing equipment upon

17 any failure by the head of the Federal agency to re18 port to the Administrator in accordance with para19 graph (2).’’.

20 Subtitle D—Definitions and Other

21 Matters

22 SEC. 1551. DEFINITIONS.

23 Section 309(c) of the Federal Property and Adminis24 trative Services Act of 1949 (41 U.S.C. 259(c)) is amend25 ed by striking out ‘‘and ‘supplies’ ’’ and inserting in lieu
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1 thereof ‘‘ ‘supplies’, ‘commercial item’, and

2 ‘nondevelopmental item’ ’’.

3 SEC. 1552. DELEGATION OF PROCUREMENT FUNCTIONS.

4 The Office of Federal Procurement Policy Act (41

5 U.S.C. 401 et seq.), as amended by section 1251, is fur6 ther amended by inserting after section 32 the following

7 new section:

8 ‘‘SEC. 33. DELEGATION OF PROCUREMENT FUNCTIONS.

9 ‘‘(a) IN GENERAL.—Except to the extent expressly

10 prohibited by another provision of law, an agency head

11 may delegate, subject to his direction, to any other officer

12 or official of that agency, any power under this title.

13 ‘‘(b) PROCUREMENTS FOR OR WITH OTHER AGEN14 CIES.—Subject to subsection (a), to facilitate the procure15 ment of property and services covered by this title by each

16 executive agency for any other executive agency, and to

17 facilitate joint procurement by those executive agencies—

18 ‘‘(1) an agency head may, within his executive

19 agency, delegate functions and assign responsibilities

20 relating to procurement;

21 ‘‘(2) the heads of two or more executive agen22 cies may by agreement delegate procurement func23 tions and assign procurement responsibilities from

24 one executive agency to another of those executive
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1 agencies or to an officer or civilian employee of an2 other of those executive agencies; and

3 ‘‘(3) the heads of two or more executive agen4 cies may create joint or combined offices to exercise

5 procurement functions and responsibilities.’’.

6 SEC. 1553. DETERMINATIONS AND DECISIONS.

7 The Office of Federal Procurement Policy Act (41

8 U.S.C. 401 et seq.), as amended by section 1552, is fur9 ther amended by inserting after section 33 the following

10 new section:

11 ‘‘SEC. 34. DETERMINATIONS AND DECISIONS.

12 ‘‘(a) INDIVIDUAL OR CLASS DETERMINATIONS AND

13 DECISIONS AUTHORIZED.—Determinations and decisions

14 required to be made under title III of the Federal Property

15 and Administration Services Act of 1949 (41 U.S.C. 251

16 et seq.) or chapter 137 of title 10, United States Code,

17 by an agency head may be made for an individual pur18 chase or contract or for a class of purchases or contracts.

19 Such determinations and decisions are final.

20 ‘‘(b) WRITTEN FINDINGS REQUIRED.—(1) Each de21 termination under section 36(c) shall be based on a writ22 ten finding by the person making the determination or de23 cision. The finding shall set out facts and circumstances

24 that support the determination or decision.
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1 ‘‘(2) Each finding referred to in paragraph (1) shall

2 be final. The agency head making such finding shall main3 tain a copy of the finding for not less than 6 years after

4 the date of the determination or decision.’’.

5 SEC. 1554. RESEARCH, DEVELOPMENT, AND PRODUCTION

6 COSTS.

7 The Office of Federal Procurement Policy Act (41

8 U.S.C. 401 et seq.), as amended by section 1553, is fur9 ther amended by inserting after section 34 the following

10 new section:

11 ‘‘SEC. 35. RESEARCH, DEVELOPMENT, AND PRODUCTION

12 COSTS.

13 ‘‘(a) Letters of offer for the sale of defense articles

14 or for the sale of defense services that are issued pursuant

15 to sections 2761 or 2762 of title 22, United States Code,

16 shall not include any charge for the proportionate amount

17 of any nonrecurring costs of research, development, and

18 production of major defense equipment.

19 ‘‘(b) Subsection (a) shall be effective with respect to

20 sales agreements entered into on or after October 1,

21 1996.’’.

22 SEC. 1555. REPEALS.

23 The laws of the United States are amended to read

24 as if the following sections of law had not been enacted:

25 (1) Section 630 of Public Law 102–393.
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1 (2) Section 401 of Public Law 103–123.

2 SEC. 1556. COOPERATIVE PURCHASING.

3 Subsection (b) of section 201 of the Federal Property

4 and Administrative Services Act of 1949 (40 U.S.C. 481),

5 is amended to read as follows:

6 ‘‘(b)(1) The Administrator shall, as far as prac7 ticable, provide any of the services specified in subsection

8 (a) of this section to any other Federal agency, mixed9 ownership Government corporation (as defined in section

10 9101 of title 31, United States Code), or the District of

11 Columbia, upon its request.

12 ‘‘(2)(A) The Administrator may provide for the use

13 of Federal supply schedules or other contracts by any of

14 the following entities upon request:

15 ‘‘(i) A State, any department or agency of a

16 State, and any political subdivision of a State, in17 cluding a local government.

18 ‘‘(ii) The District of Columbia.

19 ‘‘(iii) The Commonwealth of Puerto Rico.

20 ‘‘(iv) The government of an Indian tribe (as de21 fined in section 4(e) of the Indian Self-Determina22 tion and Education Assistance Act (25 U.S.C.

23 450b(e))).

24 ‘‘(B) Subparagraph (A) may not be construed to au25 thorize an entity referred to in that subparagraph to order
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1 existing stock or inventory from federally owned and oper2 ated, or federally owned and contractor operated, supply

3 depots, warehouses, or similar facilities.

4 ‘‘(3)(A) Upon the request of a qualified nonprofit

5 agency for the blind or other severely handicapped that

6 is to provide a commodity or service to the Federal Gov7 ernment under the Javits-Wagner-O’Day Act, the Admin8 istrator may provide any of the services specified in sub9 section (a) to such agency to the extent practicable.

10 ‘‘(B) A nonprofit agency receiving services under the

11 authority of subparagraph (A) shall use the services di12 rectly in making or providing an approved commodity or

13 approved service to the Federal Government.

14 ‘‘(C) In this paragraph:

15 ‘‘(i) The term ‘qualified nonprofit agency for

16 the blind or other severely handicapped’ means—

17 ‘‘(I) a qualified nonprofit agency for the

18 blind, as defined in section 5(3) of the Javits19 Wagner-O’Day Act (41 U.S.C. 48b(3)); and

20 ‘‘(II) a qualified nonprofit agency for other

21 severely handicapped, as defined in section 5(4)

22 of such Act (41 U.S.C. 48b(4)).

23 ‘‘(ii) The terms ‘approved commodity’ and ‘ap24 proved service’ mean a commodity and a service, re25 spectively, that has been determined by the Commit-
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1 tee for Purchase from the Blind and Other Severely

2 Handicapped under section 2 of the Javits-Wagner3 O’Day Act (41 U.S.C. 47) to be suitable for pro4 curement by the Federal Government.

5 ‘‘(iii) The term ‘Javits-Wagner-O’Day Act’

6 means the Act entitled ‘An Act to create a Commit7 tee on Purchases of Blind-made Products, and for

8 other purposes’, approved June 25, 1938 (41 U.S.C.

9 46–48c), commonly referred to as the Wagner10 O’Day Act, that was revised and reenacted in the

11 Act of June 23, 1971 (85 Stat. 77), commonly re12 ferred to as the Javits-Wagner-O’Day Act.’’.

13 TITLE II—CONTRACT

14 ADMINISTRATION

15 Subtitle A—Contract Payment

16 SEC. 2051. CONTRACT FINANCING.

17 (a) REORGANIZATION OF PRINCIPAL AUTHORITY

18 PROVISION.—The Office of Federal Procurement Policy

19 Act (41 U.S.C. 401 et seq.), as amended by section 1554,

20 is further amended by inserting after section 35 the fol21 lowing new section:

22 ‘‘SEC. 36. CONTRACT FINANCING.

23 ‘‘(a) PAYMENT AUTHORITY.—Any executive agency

24 may—
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1 ‘‘(1) make advance, partial, progress or other

2 payments under contracts of property or services

3 made by the agency; and

4 ‘‘(2) insert in bid solicitations for procurement

5 of property or services a provision limiting to small

6 business concerns advance or progress payments.

7 ‘‘(b) PAYMENT AMOUNT.—Payments made under

8 subsection (a) may not exceed the unpaid contract price.

9 ‘‘(c) SECURITY FOR ADVANCE PAYMENTS.—Advance

10 payments under subsection (a) may be made only upon

11 adequate security and a determination by the agency head

12 that to do so would be in the public interest. Such security

13 may be in the form of a lien in favor of the Government

14 on the property contracted for, on the balance in an ac15 count in which such payments are deposited, and on such

16 of the property acquired for performance of the contract

17 as the parties may agree. This lien shall be paramount

18 to all other liens.

19 ‘‘(d) CONDITIONS FOR PROGRESS PAYMENTS.—(1)

20 The agency head shall ensure that any payment for work

21 in progress (including materials, labor, and other items)

22 under a contract of an executive agency that provides for

23 such payments is commensurate with the work accom24 plished that meets standards established under the con25 tract. The contractor shall provide such information and
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1 evidence as the agency head determines necessary to per2 mit the agency head to carry out the preceding sentence.

3 ‘‘(2) The agency head shall ensure that progress pay4 ments referred to in paragraph (1) are not made for more

5 than 80 percent of the work accomplished under the con6 tract so long as the agency head has not made the contrac7 tual terms, specifications, and price definite.

8 ‘‘(3) This subsection applies to a contract for an

9 amount equal to or greater than the simplified acquisition

10 threshold.

11 ‘‘(e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL

12 ITEMS.—(1) Payments under subsection (a) for commer13 cial items, as that term is defined in section 4(12) of this

14 Act, may be made under such terms and conditions as the

15 head of the agency determines are appropriate or cus16 tomary in the commercial marketplace. The head of the

17 agency shall obtain adequate security for such payments.

18 If the security is in the form of a lien in favor of the Unit19 ed States, such lien is paramount to all other liens and

20 is effective immediately upon the first payment, without

21 filing, notice, or other action by the United States.

22 ‘‘(2) Advance payments made under subsection (a)

23 for commercial items may include payments, in a total

24 amount of not more than 15 percent of the contract price,

25 in advance of any performance of work under the contract.
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1 ‘‘(3) The conditions of subsections (c) and (d) do not

2 apply to payments made for commercial items in accord3 ance with this subsection.

4 ‘‘(f) ACTION IN CASE OF FRAUD.—(1) In any case

5 in which the remedy coordination official of an executive

6 agency finds that there is substantial evidence that the

7 request of a contractor for advance, partial, or progress

8 payment under a contract awarded by that executive agen9 cy is based on fraud, the remedy coordination official shall

10 recommend that the agency head reduce or suspend fur11 ther payments to such contractor.

12 ‘‘(2) An agency head receiving a recommendation

13 under paragraph (1) in the case of a contractor’s request

14 for payment under a contract shall determine whether

15 there is substantial evidence that the request is based on

16 fraud. Upon making such a determination, the agency

17 head may reduce or suspend further payments to the con18 tractor under such contract.

19 ‘‘(3) The extent of any reduction or suspension of

20 payments by an agency head under paragraph (2) on the

21 basis of fraud shall be reasonably commensurate with the

22 anticipated loss to the United States resulting from the

23 fraud.

24 ‘‘(4) A written justification for each decision of the

25 agency head whether to reduce or suspend payments
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1 under paragraph (2), and for each recommendation re2 ceived by the agency head in connection with such deci3 sion, shall be prepared and be retained in the files of the

4 executive agency.

5 ‘‘(5) Each agency head shall prescribe procedures to

6 ensure that, before the agency head decides to reduce or

7 suspend payments in the case of a contractor under para8 graph (2), the contractor is afforded notice of the pro9 posed reduction or suspension and an opportunity to sub10 mit matters to the head of the agency in response to such

11 proposed reduction or suspension.

12 ‘‘(6) Not later than 180 days after the date on which

13 an agency head reduces or suspends payments to a con14 tractor under paragraph (2), the remedy coordination offi15 cial of the executive agency shall—

16 ‘‘(A) review the determination of fraud on

17 which the reduction or suspension is based; and

18 ‘‘(B) transmit a recommendation to the agency

19 head whether the suspension or reduction should

20 continue.

21 ‘‘(7) Each agency head who receives recommenda22 tions made by a remedy coordination official of the execu23 tive agency to reduce or suspend payments under para24 graph (2) during a fiscal year shall prepare for such year

25 a report that contains the recommendations, the actions
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1 taken on the recommendations and the reasons for such

2 actions, and an assessment of the effects of such actions

3 on the Federal Government. Any such report shall be

4 available to any Member of Congress upon request.

5 ‘‘(8) An agency head may not delegate responsibilities

6 under this subsection to any person in a position below

7 level IV of the Executive Schedule.

8 ‘‘(9) In this subsection, the term ‘remedy coordina9 tion official’, with respect to an executive agency, means

10 the person or entity in that executive agency who coordi11 nates within that executive agency the administration of

12 criminal, civil, administrative, and contractual remedies

13 resulting from investigations of fraud or corruption related

14 to procurement activities.’’.

15 (b) RELATIONSHIP TO PROMPT PAYMENT REQUIRE16 MENTS.—Section 36 of the Office of Federal Procurement

17 Policy Act, as added by subsection (a) is not intended to

18 impair or modify procedures required by the provisions of

19 chapter 39 of title 31, United States Code, and the regula20 tions issued pursuant to such provisions of law, that relate

21 to progress payment requests, as such procedures are in

22 effect on the date of the enactment of this Act.
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1 Subtitle B—Cost Principles

2 SEC. 2151. ALLOWABLE CONTRACT COSTS.

3 The Office of Federal Procurement Policy Act (41

4 U.S.C. 401 et seq.), as amended by section 2051, is fur5 ther amended by inserting after section 36 the following

6 new section:

7 ‘‘SEC. 37. ALLOWABLE COSTS.

8 ‘‘(a) INDIRECT COST THAT VIOLATES A FAR COST

9 PRINCIPLE.—The head of an executive agency shall re10 quire that a covered contract provide that if the contractor

11 submits to the executive agency a proposal for settlement

12 of indirect costs incurred by the contractor for any period

13 after such costs have been accrued and if that proposal

14 includes the submission of a cost which is unallowable be15 cause the cost violates a cost principle in the Federal Ac16 quisition Regulation or an executive agency’s supplement

17 to the Federal Acquisition Regulation, the cost shall be

18 disallowed.

19 ‘‘(b) PENALTY FOR VIOLATION OF COST PRIN20 CIPLE.—(1) If the agency head determines that a cost

21 submitted by a contractor in its proposal for settlement

22 is expressly unallowable under a cost principle referred to

23 in subsection (a) that defines the allowability of specific

24 selected costs, the agency head shall assess a penalty

25 against the contractor in an amount equal to—
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1 ‘‘(A) the amount of the disallowed cost allo2 cated to covered contracts for which a proposal for

3 settlement of indirect costs has been submitted; plus

4 ‘‘(B) interest (to be computed based on provi5 sions in the Federal Acquisition Regulation) to com6 pensate the United States for the use of any funds

7 which a contractor has been paid in excess of the

8 amount to which the contractor was entitled.

9 ‘‘(2) If the agency head determines that a proposal

10 for settlement of indirect costs submitted by a contractor

11 includes a cost determined to be unallowable in the case

12 of such contractor before the submission of such proposal,

13 the agency head shall assess a penalty against the contrac14 tor in an amount equal to two times the amount of the

15 disallowed cost allocated to covered contracts for which a

16 proposal for settlement of indirect costs has been

17 submitted.

18 ‘‘(c) WAIVER OF PENALTY.—In accordance with the

19 Federal Acquisition Regulation, the agency head may

20 waive a penalty under subsection (b) in the case of a con21 tractor’s proposal for settlement of indirect costs when—

22 ‘‘(1) the contractor withdraws the proposal be23 fore the formal initiation of an audit of the proposal

24 by the Federal Government and resubmits a revised

25 proposal;
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1 ‘‘(2) the amount of unallowable costs subject to

2 the penalty is insignificant; or

3 ‘‘(3) the contractor demonstrates, to the con4 tracting officer’s satisfaction, that—

5 ‘‘(A) it has established appropriate policies

6 and personnel training and an internal control

7 and review system that provide assurances that

8 unallowable costs subject to penalties are pre9 cluded from being included in the contractor’s

10 proposal for settlement of indirect costs; and

11 ‘‘(B) the unallowable costs subject to the

12 penalty were inadvertently incorporated into the

13 proposal.

14 ‘‘(d) APPLICABILITY OF CONTRACT DISPUTES PRO15 CEDURE TO DISALLOWANCE OF COST AND ASSESSMENT

16 OF PENALTY.—An action of an agency head under sub17 section (a) or (b)—

18 ‘‘(1) shall be considered a final decision for the

19 purposes of section 6 of the Contract Disputes Act

20 of 1978 (41 U.S.C. 605); and

21 ‘‘(2) is appealable in the manner provided in

22 section 7 of such Act.

23 ‘‘(e) SPECIFIC COSTS NOT ALLOWABLE.—(1) The

24 following costs are not allowable under a covered contract:
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1 ‘‘(A) Costs of entertainment, including amuse2 ment, diversion, and social activities, and any costs

3 directly associated with such costs (such as tickets

4 to shows or sports events, meals, lodging, rentals,

5 transportation, and gratuities).

6 ‘‘(B) Costs incurred to influence (directly or in7 directly) legislative action on any matter pending be8 fore Congress or a State legislature.

9 ‘‘(C) Costs incurred in defense of any civil or

10 criminal fraud proceeding or similar proceeding (in11 cluding filing of any false certification) brought by

12 the United States where the contractor is found lia13 ble or had pleaded nolo contendere to a charge of

14 fraud or similar proceeding (including filing of a

15 false certification).

16 ‘‘(D) Payments of fines and penalties resulting

17 from violations of, or failure to comply with, Fed18 eral, State, local, or foreign laws and regulations, ex19 cept when incurred as a result of compliance with

20 specific terms and conditions of the contract or spe21 cific written instructions from the contracting officer

22 authorizing in advance such payments in accordance

23 with applicable provisions of the Federal Acquisition

24 Regulation.
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1 ‘‘(E) Costs of membership in any social, dining,

2 or country club or organization.

3 ‘‘(F) Costs of alcoholic beverages.

4 ‘‘(G) Contributions or donations, regardless of

5 the recipient.

6 ‘‘(H) Costs of advertising designed to promote

7 the contractor or its products.

8 ‘‘(I) Costs of promotional items and memora9 bilia, including models, gifts, and souvenirs.

10 ‘‘(J) Costs for travel by commercial aircraft

11 which exceed the amount of the standard commercial

12 fare.

13 ‘‘(K) Costs incurred in making any payment

14 (commonly known as a ‘golden parachute payment’)

15 which is—

16 ‘‘(i) in an amount in excess of the normal

17 severance pay paid by the contractor to an em18 ployee upon termination of employment; and

19 ‘‘(ii) is paid to the employee contingent

20 upon, and following, a change in management

21 control over, or ownership of, the contractor or

22 a substantial portion of the contractor’s assets.

23 ‘‘(L) Costs of commercial insurance that pro24 tects against the costs of the contractor for correc-
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1 tion of the contractor’s own defects in materials or

2 workmanship.

3 ‘‘(M) Costs of severance pay paid by the con4 tractor to foreign nationals employed by the contrac5 tor under a service contract performed outside the

6 United States, to the extent that the amount of sev7 erance pay paid in any case exceeds the amount paid

8 in the industry involved under the customary or pre9 vailing practice for firms in that industry providing

10 similar services in the United States, as determined

11 under the Federal Acquisition Regulation.

12 ‘‘(N) Costs of severance pay paid by the con13 tractor to a foreign national employed by the con14 tractor under a service contract performed in a for15 eign country if the termination of the employment of

16 the foreign national is the result of the closing of,

17 or the curtailment of activities at, a United States

18 facility in that country at the request of the govern19 ment of that country.

20 ‘‘(O) Costs incurred by a contractor in connec21 tion with any criminal, civil, or administrative pro22 ceeding commenced by the United States or a State,

23 to the extent provided in subsection (k).

24 ‘‘(2)(A) Pursuant to the Federal Acquisition Regula25 tion and subject to the availability of appropriations, the
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1 agency head, in awarding a covered contract, may waive

2 the application of the provisions of paragraphs (1)(M) and

3 (1)(N) to that contract if the agency head determines

4 that—

5 ‘‘(i) the application of such provisions to the

6 contract would adversely affect the continuation of a

7 program, project, or activity that provides significant

8 support services for employees of the executive agen9 cy posted outside the United States;

10 ‘‘(ii) the contractor has taken (or has estab11 lished plans to take) appropriate actions within the

12 contractor’s control to minimize the amount and

13 number of incidents of the payment of severance pay

14 by the contractor to employees under the contract

15 who are foreign nationals; and

16 ‘‘(iii) the payment of severance pay is necessary

17 in order to comply with a law that is generally appli18 cable to a significant number of businesses in the

19 country in which the foreign national receiving the

20 payment performed services under the contract or is

21 necessary to comply with a collective bargaining

22 agreement.

23 ‘‘(B) The head of the executive agency concerned

24 shall include in the solicitation for a covered contract a

25 statement indicating—
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1 ‘‘(i) that a waiver has been granted under sub2 paragraph (A) for the contract; or

3 ‘‘(ii) whether the agency head will consider

4 granting such a waiver, and, if the agency head will

5 consider granting a waiver, the criteria to be used in

6 granting the waiver.

7 ‘‘(C) The agency head shall make the final determina8 tion regarding whether to grant a waiver under subpara9 graph (A) with respect to a covered contract before award

10 of the contract.

11 ‘‘(3) The provisions of the Federal Acquisition Regu12 lation implementing this section may establish appropriate

13 definitions, exclusions, limitations, and qualifications.

14 ‘‘(f) REQUIRED REGULATIONS.—(1) The Federal Ac15 quisition Regulation shall contain provisions on the allow16 ability of contractor costs. Such provisions shall define in

17 detail and in specific terms those costs which are unallow18 able, in whole or in part, under covered contracts. The

19 regulations shall, at a minimum, clarify the cost principles

20 applicable to contractor costs of the following:

21 ‘‘(A) Air shows.

22 ‘‘(B) Membership in civic, community, and pro23 fessional organizations.

24 ‘‘(C) Recruitment.

25 ‘‘(D) Employee morale and welfare.
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1 ‘‘(E) Actions to influence (directly or indirectly)

2 executive branch action on regulatory and contract

3 matters (other than costs incurred in regard to con4 tract proposals pursuant to solicited or unsolicited

5 bids).

6 ‘‘(F) Community relations.

7 ‘‘(G) Dining facilities.

8 ‘‘(H) Professional and consulting services, in9 cluding legal services.

10 ‘‘(I) Compensation.

11 ‘‘(J) Selling and marketing.

12 ‘‘(K) Travel.

13 ‘‘(L) Public relations.

14 ‘‘(M) Hotel and meal expenses.

15 ‘‘(N) Expense of corporate aircraft.

16 ‘‘(O) Company-furnished automobiles.

17 ‘‘(P) Advertising.

18 ‘‘(2) The Federal Acquisition Regulation shall require

19 that a contracting officer not resolve any questioned costs

20 until the contracting officer has obtained—

21 ‘‘(A) adequate documentation with respect to

22 such costs; and

23 ‘‘(B) the opinion of the executive agency’s con24 tract auditor on the allowability of such costs.
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1 ‘‘(3) The Federal Acquisition Regulation shall pro2 vide that, to the maximum extent practicable, an executive

3 agency’s contract auditor be present at any negotiation or

4 meeting with the contractor regarding a determination of

5 the allowability of indirect costs of the contractor.

6 ‘‘(4) The Federal Acquisition Regulation shall require

7 that all categories of costs designated in the report of an

8 executive agency’s contract auditor as questioned with re9 spect to a proposal for settlement be resolved in such a

10 manner that the amount of the individual questioned costs

11 that are paid will be reflected in the settlement.

12 ‘‘(g) APPLICABILITY OF REGULATIONS TO SUB13 CONTRACTORS.—The regulations referred to in sub14 sections (e) and (f)(1) shall require, to the maximum ex15 tent practicable, that such regulations apply to all sub16 contractors of a covered contract.

17 ‘‘(h) CONTRACTOR CERTIFICATION REQUIRED.—(1)

18 A proposal for settlement of indirect costs applicable to

19 a covered contract shall include a certification by an offi20 cial of the contractor that, to the best of the certifying

21 official’s knowledge and belief, all indirect costs included

22 in the proposal are allowable. Any such certification shall

23 be in a form prescribed in the Federal Acquisition Regula24 tion.
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1 ‘‘(2) The agency head concerned may, in an excep2 tional case, waive the requirement for certification under

3 paragraph (1) in the case of any contract if the agency

4 head—

5 ‘‘(A) determines in such case that it would be

6 in the interest of the United States to waive such

7 certification; and

8 ‘‘(B) states in writing the reasons for that de9 termination and makes such determination available

10 to the public.

11 ‘‘(i) PENALTIES FOR SUBMISSION OF COST KNOWN

12 AS NOT ALLOWABLE.—The submission to an executive

13 agency of a proposal for settlement of costs for any period

14 after such costs have been accrued that includes a cost

15 that is expressly specified by statute or regulation as being

16 unallowable, with the knowledge that such cost is unallow17 able, shall be subject to the provisions of section 287 of

18 title 18, United States Code, and section 3729 of title 31,

19 United States Code.

20 ‘‘(j) CONTRACTOR TO HAVE BURDEN OF PROOF.—

21 In a proceeding before a board of contract appeals, the

22 United States Court of Federal Claims, or any other Fed23 eral court in which the reasonableness of indirect costs for

24 which a contractor seeks reimbursement from the United
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1 States is in issue, the burden of proof shall be upon the

2 contractor to establish that those costs are reasonable.

3 ‘‘(k) PROCEEDING COSTS NOT ALLOWABLE.—(1)

4 Except as otherwise provided in this subsection, costs in5 curred by a contractor in connection with any criminal,

6 civil, or administrative proceeding commenced by the

7 United States or a State are not allowable as reimbursable

8 costs under a covered contract if the proceeding (A) re9 lates to a violation of, or failure to comply with, a Federal

10 or State statute or regulation, and (B) results in a disposi11 tion described in paragraph (2).

12 ‘‘(2) A disposition referred to in paragraph (1)(B) is

13 any of the following:

14 ‘‘(A) In the case of a criminal proceeding, a

15 conviction (including a conviction pursuant to a plea

16 of nolo contendere) by reason of the violation or fail17 ure referred to in paragraph (1).

18 ‘‘(B) In the case of a civil or administrative

19 proceeding involving an allegation of fraud or similar

20 misconduct, a determination of contractor liability

21 on the basis of the violation or failure referred to in

22 paragraph (1).

23 ‘‘(C) In the case of any civil or administrative

24 proceeding, the imposition of a monetary penalty by
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1 reason of the violation or failure referred to in para2 graph (1).

3 ‘‘(D) A final decision—

4 ‘‘(i) to debar or suspend the contractor,

5 ‘‘(ii) to rescind or void the contract, or

6 ‘‘(iii) to terminate the contract for default,

7 by reason of the violation or failure referred to in

8 paragraph (1).

9 ‘‘(E) A disposition of the proceeding by consent

10 or compromise if such action could have resulted in

11 a disposition described in subparagraph (A), (B),

12 (C), or (D).

13 ‘‘(3) In the case of a proceeding referred to in para14 graph (1) that is commenced by the United States and

15 is resolved by consent or compromise pursuant to an

16 agreement entered into by a contractor and the United

17 States, the costs incurred by the contractor in connection

18 with such proceeding that are otherwise not allowable as

19 reimbursable costs under such paragraph may be allowed

20 to the extent specifically provided in such agreement.

21 ‘‘(4) In the case of a proceeding referred to in para22 graph (1) that is commenced by a State, the agency head

23 that awarded the covered contract involved in the proceed24 ing may allow the costs incurred by the contractor in con25 nection with such proceeding as reimbursable costs if the
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1 agency head determines, in accordance with the Federal

2 Acquisition Regulation, that the costs were incurred as a

3 result of (A) a specific term or condition of the contract,

4 or (B) specific written instructions of the agency.

5 ‘‘(5)(A) Except as provided in subparagraph (C),

6 costs incurred by a contractor in connection with a crimi7 nal, civil, or administrative proceeding commenced by the

8 United States or a State in connection with a covered con9 tract may be allowed as reimbursable costs under the con10 tract if such costs are not disallowable under paragraph

11 (1), but only to the extent provided in subparagraph (B).

12 ‘‘(B)(i) The amount of the costs allowable under sub13 paragraph (A) in any case may not exceed the amount

14 equal to 80 percent of the amount of the costs incurred,

15 to the extent that such costs are determined to be other16 wise allowable and allocable under the Federal Acquisition

17 Regulation.

18 ‘‘(ii) Regulations issued for the purpose of clause (i)

19 shall provide for appropriate consideration of the complex20 ity of procurement litigation, generally accepted principles

21 governing the award of legal fees in civil actions involving

22 the United States as a party, and such other factors as

23 may be appropriate.

24 ‘‘(C) In the case of a proceeding referred to in sub25 paragraph (A), contractor costs otherwise allowable as re-
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1 imbursable costs under this paragraph are not allowable

2 if (i) such proceeding involves the same contractor mis3 conduct alleged as the basis of another criminal, civil, or

4 administrative proceeding, and (ii) the costs of such other

5 proceeding are not allowable under paragraph (1).

6 ‘‘(6) In this subsection:

7 ‘‘(A) The term ‘proceeding’ includes an inves8 tigation.

9 ‘‘(B) The term ‘costs’, with respect to a pro10 ceeding—

11 ‘‘(i) means all costs incurred by a contrac12 tor, whether before or after the commencement

13 of any such proceeding; and

14 ‘‘(ii) includes—

15 ‘‘(I) administrative and clerical ex16 penses;

17 ‘‘(II) the cost of legal services, includ18 ing legal services performed by an em19 ployee of the contractor;

20 ‘‘(III) the cost of the services of ac21 countants and consultants retained by the

22 contractor; and

23 ‘‘(IV) the pay of directors, officers,

24 and employees of the contractor for time
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1 devoted by such directors, officers, and em2 ployees to such proceeding.

3 ‘‘(C) The term ‘penalty’ does not include res4 titution, reimbursement, or compensatory damages.

5 ‘‘(l) COVERED CONTRACT DEFINED.—(1) In this sec6 tion, the term ‘covered contract’ means a contract for an

7 amount in excess of $500,000 that is entered into by an

8 executive agency, except that such term does not include

9 a fixed-price contract without cost incentives or any con10 tract for the purchase of commercial items (as defined in

11 section 4(12).

12 ‘‘(2) Effective on October 1 of each year that is divis13 ible by 5, the amount set forth in paragraph (1) shall be

14 adjusted to the amount that is equal to the fiscal year

15 1994 constant dollar value of the amount set forth. An

16 amount, as so adjusted, that is not evenly divisible by

17 $50,000 shall be rounded to the nearest multiple of

18 $50,000. In the case of an amount that is evenly divisible

19 by $25,000 but is not evenly divisible by $50,000, the

20 amount shall be rounded to the next higher multiple of

21 $50,000.’’.

22 SEC. 2152. TRAVEL EXPENSES OF GOVERNMENT CONTRAC23 TORS.

24 Section 24(a) of the Office of Federal Procurement

25 Policy Act (41 U.S.C. 420) is amended by inserting after
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1 ‘‘Under any contract’’ the following: ‘‘requiring submis2 sion of cost or pricing data or the negotiation of final indi3 rect costs’’.

4 Subtitle C—Audit and Access to

5 Records

6 SEC. 2251. AUTHORITY TO EXAMINE RECORDS OF CON7 TRACTORS.

8 The Office of Federal Procurement Policy Act (41

9 U.S.C. 401 et seq.), as amended by section 2151, is fur10 ther amended by inserting after section 37 the following

11 new section:

12 ‘‘SEC. 38. EXAMINATION OF RECORDS OF CONTRACTOR.

13 ‘‘(a) AGENCY AUTHORITY.—The head of an executive

14 agency, acting through an authorized representative—

15 ‘‘(1) is entitled to inspect the plant and audit

16 the records of—

17 ‘‘(A) a contractor performing a cost-reim18 bursement, incentive, time-and-materials, labor19 hour, or price-redeterminable contract, or any

20 combination of such contracts, made by that ex21 ecutive agency under this title; and

22 ‘‘(B) a subcontractor performing any cost23 reimbursement, incentive, time-and-materials,

24 labor-hour, or price-redeterminable subcontract

25 under a contract referred to in subparagraph
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1 (A) or under any combination of such contracts;

2 and

3 ‘‘(2) shall, for the purpose of evaluating the ac4 curacy, completeness, and currency of cost or pricing

5 data required to be submitted pursuant to section 32

6 with respect to a contract or subcontract, have the

7 right to examine all records of the contractor or sub8 contractor related to—

9 ‘‘(A) the proposal for the contract or sub10 contract;

11 ‘‘(B) the discussions conducted on the pro12 posal;

13 ‘‘(C) pricing of the contract or subcontract;

14 or

15 ‘‘(D) performance of the contract or sub16 contract.

17 ‘‘(b) LIMITATION ON PREAWARD AUDITS RELATING

18 TO INDIRECT COSTS.—The head of an agency may not

19 perform a preaward audit to evaluate proposed indirect

20 costs under any contract, subcontract, or modification to

21 be entered into in accordance with this chapter in any case

22 in which the contracting officer determines that the objec23 tives of the audit can reasonably be met by accepting the

24 results of an audit conducted by any other department or
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1 agency of the Federal Government within one year preced2 ing the date of the contracting officer’s determination.

3 ‘‘(c) COMPTROLLER GENERAL AUTHORITY.—(1) Ex4 cept as provided in paragraph (2), each contract awarded

5 after using procedures other than sealed bid procedures

6 shall provide that the Comptroller General and his rep7 resentatives are entitled to examine any records of the

8 contractor, or any of its subcontractors, that directly per9 tain to, and involve transactions relating to, the contract

10 or subcontract.

11 ‘‘(2) Paragraph (1) does not apply to a contract or

12 subcontract with a foreign contractor or foreign sub13 contractor if the agency head concerned determines, with

14 the concurrence of the Comptroller General or his des15 ignee, that the application of that paragraph to the con16 tract or subcontract would not be in the public interest.

17 However, the concurrence of the Comptroller General or

18 his designee is not required—

19 ‘‘(A) where the contractor or subcontractor is a

20 foreign government or agency thereof or is precluded

21 by the laws of the country involved from making its

22 records available for examination; and

23 ‘‘(B) where the agency head determines, after

24 taking into account the price and availability of the

25 property and services from United States sources,
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1 that the public interest would be best served by not

2 applying paragraph (1).

3 ‘‘(3) Paragraph (1) may not be construed to require

4 a contractor or subcontractor to create or maintain any

5 record that the contractor or subcontractor does not main6 tain in the ordinary course of business or pursuant to an7 other provision of law.

8 ‘‘(d) LIMITATION.—The right of an agency head

9 under subsection (a), and the right of the Comptroller

10 General under subsection (c), with respect to a contract

11 or subcontract shall expire three years after final payment

12 under such contract or subcontract.

13 ‘‘(e) INAPPLICABILITY TO CERTAIN CONTRACTS.—

14 This section is inapplicable to contracts for utility services

15 at rates not exceeding those established to apply uniformly

16 to the public, plus any applicable reasonable connection

17 charge.

18 ‘‘(f) FORMS OF ORIGINAL RECORD STORAGE.—Noth19 ing in this section shall be construed to preclude a contrac20 tor from duplicating or storing original records in elec21 tronic form.

22 ‘‘(g) USE OF IMAGES OF ORIGINAL RECORDS.—The

23 head of an agency shall not require a contractor or sub24 contractor to provide original records in an audit carried

25 out pursuant to this section if the contractor or sub-
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1 contractor provides photographic or electronic images of

2 the original records and meets the following requirements:

3 ‘‘(1) The contractor or subcontractor has estab4 lished procedures to ensure that the imaging process

5 preserves the integrity, reliability, and security of

6 the original records.

7 ‘‘(2) The contractor or subcontractor maintains

8 an effective indexing system to permit timely and

9 convenient access to the imaged records.

10 ‘‘(3) The contractor or subcontractor retains

11 the original records for a minimum of one year after

12 imaging to permit periodic validation of the imaging

13 systems.

14 ‘‘(h) RECORDS DEFINED.—In this section, the term

15 ‘records’ includes books, documents, accounting proce16 dures and practices, and other data, regardless of type and

17 regardless of whether such items are in written form, in

18 the form of computer data, or in any other form.’’.

19 Subtitle D—Cost Accounting

20 Standards

21 SEC. 2301. REPEAL OF OBSOLETE DEADLINE REGARDING

22 PROCEDURAL REGULATIONS FOR THE COST

23 ACCOUNTING STANDARDS BOARD.

24 Section 26(f)(3) of the Office of Federal Procurement

25 Policy Act (41 U.S.C. 422(f)(3)) is amended in the first
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1 sentence by striking out ‘‘Not later than 180 days after

2 the date of the enactment of this section, the Adminis3 trator’’ and inserting in lieu thereof ‘‘The Administrator’’.

4 TITLE III—SIMPLIFIED ACQUISI5 TION THRESHOLD AND SO6 CIOECONOMIC, SMALL BUSI7 NESS, AND MISCELLANEOUS

8 LAWS

9 Subtitle A—Simplified Acquisition

10 Threshold

11 PART I—ESTABLISHMENT OF THRESHOLD

12 SEC. 3001. ESTABLISHMENT OF SIMPLIFIED ACQUISITION

13 THRESHOLD.

14 (a) ESTABLISHMENT.—The Office of Federal Pro15 curement Policy Act (41 U.S.C. 401 et seq.) is amended

16 by inserting after section 4 the following new section:

17 ‘‘SEC. 4A. SIMPLIFIED ACQUISITION THRESHOLD.

18 ‘‘(a) IN GENERAL.—The simplified acquisition

19 threshold for purposes of Federal acquisitions is (except

20 as provided in subsection (b)) the amount of $25,000, as

21 adjusted pursuant to subsection (c).

22 ‘‘(b) AGENCIES WITH FACNET SYSTEM.—In the

23 case of an agency for which there is in effect a certification

24 under section 39A of the Office of Federal Procurement

25 Policy Act with respect to implementation of a FACNET
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1 system, the simplified acquisition threshold is the amount

2 of $100,000, as adjusted pursuant to subsection (c).

3 ‘‘(c) PERIODIC ADJUSTMENT FOR INFLATION.—The

4 dollar amount in effect under subsection (a) shall be ad5 justed on October 1 of each year divisible by 5 to the

6 equivalent amount in constant fiscal year 1990 dollars

7 (rounded to the nearest $1,000). The dollar amount in ef8 fect under subsection (b) shall be adjusted on October 1

9 of each year divisible by 5 to the equivalent amount in

10 constant fiscal year 1993 dollars (rounded to the nearest

11 $1,000).

12 ‘‘(d) SPECIAL RULE FOR CONTINGENCY OPER13 ATIONS.—In the case of a contract to be awarded and per14 formed, or a purchase to be made, outside the United

15 States in support of a contingency operation (as defined

16 in section 101(a)(13) of title 10, United States Code), the

17 amounts in effect under subsections (a) and (b) shall be

18 two times the amounts otherwise applicable.’’.

19 (b) CONFORMING AMENDMENT TO DEFINITION.—

20 Section 4(11) of such Act is amended to read as follows:

21 ‘‘(11) The term ‘small purchase threshold’

22 means the simplified acquisition threshold estab23 lished by section 4A.’’.
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1 SEC. 3002. FEDERAL ACQUISITION COMPUTER NETWORK.

2 (a) FEDERAL ACQUISITION COMPUTER NETWORK.—

3 The Office of Federal Procurement Policy Act (41 U.S.C.

4 401 et seq.), as amended by section 2251, is further

5 amended by adding after section 38 the following new sec6 tion:

7 ‘‘SEC. 39. FEDERAL ACQUISITION COMPUTER NETWORK

8 (FACNET).

9 ‘‘(a) IN GENERAL.—(1) The Administrator shall es10 tablish a program for the development and implementation

11 of a Federal acquisition computer network system archi12 tecture. Any system developed in accordance with this ar13 chitecture shall be known as a ‘FACNET system’. The

14 Administrator shall assign a program manager for the

15 FACNET system and shall provide for overall direction

16 of policy and leadership in the development, coordination,

17 installation, operation, and completion of implementation

18 of the FACNET system by executive agencies.

19 ‘‘(2) The FACNET system architecture shall involve

20 enabling technology and procurement electronic data

21 interchange transaction sets. The enabling technology

22 shall consist of computer network capabilities, supporting

23 data bases, and standard interfaces that interconnect Fed24 eral Government automated systems to the network. The

25 procurement electronic data interchange transaction sets

26 shall facilitate the electronic interchange of standard pro-
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1 curement information between Federal Government and

2 industry automated acquisition systems.

3 ‘‘(3) In carrying out paragraph (1), the Adminis4 trator shall consult with the Office of Information and

5 Regulatory Affairs.

6 ‘‘(4) The Administrator shall carry out paragraph (1)

7 not later than the date that is 3 years after the date of

8 enactment of the Federal Acquisition Reform Act of 1994.

9 ‘‘(b) FUNCTIONS OF FACNET.—The FACNET sys10 tem architecture shall have the capacity to carry out the

11 following functions:

12 ‘‘(1) GOVERNMENT FUNCTIONS.—

13 ‘‘(A) Provide widespread public notice of

14 solicitations for contract opportunities issued by

15 an executive agency and of orders to be made

16 by the agency.

17 ‘‘(B) Allow responses to solicitations and

18 requests for information to be submitted to the

19 procuring activity through such system.

20 ‘‘(C) Allow public notice of contract

21 awards to be provided through such system.

22 ‘‘(D) In cases in which it is practicable,

23 allow questions regarding solicitations to be an24 swered through such system.
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1 ‘‘(E) Allow orders to be made through

2 such system.

3 ‘‘(F) In cases in which it is practicable,

4 make payments to contractors by bank card,

5 electronic funds transfer, or other automated

6 methods.

7 ‘‘(G) Archive data relating to each pro8 curement action made using such system.

9 ‘‘(2) USER FUNCTIONS.—Allow private users to

10 electronically—

11 ‘‘(A) access notice of solicitations for con12 tract opportunities issued by an agency and of

13 orders to be made by the agency;

14 ‘‘(B) selectively access and review solicita15 tions and orders issued by the agency;

16 ‘‘(C) respond to solicitations and notices of

17 orders issued by the agency;

18 ‘‘(D) receive orders from the agency;

19 ‘‘(E) access information on contract

20 awards made by the agency; and

21 ‘‘(F) in cases in which it is practicable, re22 ceive payment by bank card, electronic funds

23 transfer, or other automated means.

24 ‘‘(3) GENERAL FUNCTIONS.—
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1 ‘‘(A) Allow the electronic exchange of pro2 curement information between the private sec3 tor and the Federal Government.

4 ‘‘(B) Employ nationally and internationally

5 recognized data formats that serve to broaden

6 and ease the electronic interchange of data.

7 ‘‘(C) Allow convenient and universal user

8 access through a single point of entry.

9 ‘‘(c) FUNCTIONS OF ADMINISTRATOR OF GENERAL

10 SERVICES.—The Administrator of General Services shall

11 do the following:

12 ‘‘(1) Provide technical support for FACNET

13 systems by doing the following:

14 ‘‘(A) Coordinate with the Administrator to

15 facilitate the efficient and widespread imple16 mentation of various FACNET systems by ex17 ecutive agencies. This shall include interfacing

18 FACNET systems to other systems, such as the

19 Federal Government bank card and Electronic

20 Funds Transfer payment systems.

21 ‘‘(B) Assist the Director of the National

22 Institute of Standards and Technology in the

23 development and application of appropriate

24 Federal Information Processing Standards.
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1 ‘‘(C) Prepare a technical plan for coordi2 nating the design, development, implementation,

3 operation, and maintenance of the FACNET

4 system architecture. The plan shall include

5 roles and responsibilities, major milestones, cost

6 estimates, and performance requirements.

7 ‘‘(2) Ensure compliance with section 111 of the

8 Federal Property and Administrative Services Act of

9 1949 in the implementation of FACNET systems by

10 executive agencies, including by limiting the scope of

11 delegations under subsection (a) of that section.

12 ‘‘(3) Evaluate progress by executive agencies in

13 implementing FACNET systems, and recommend

14 changes in that implementation to the program

15 manager assigned by the Administrator under sub16 section (a).

17 ‘‘(4) Submit to the Congress, on the date that

18 is one year after the date of the enactment of the

19 Federal Acquisition Reform Act of 1994 and on that

20 date in each of the 3 years thereafter, a report on

21 the overall progress by the executive branch of the

22 Federal Government and by each executive agency in

23 implementing the FACNET system architecture.
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1 ‘‘(d) FUNCTIONS OF NATIONAL INSTITUTE OF

2 STANDARDS AND TECHNOLOGY.—The Director of the Na3 tional Institute of Standards and Technology shall—

4 ‘‘(1) ensure that the FACNET system architec5 ture complies with Federal Information Processing

6 Standards;

7 ‘‘(2) issue additional standards for the

8 FACNET system architecture as necessary; and

9 ‘‘(3) establish tests to facilitate the aims of this

10 section and support policies established by the Ad11 ministrator under this section.’’.

12 (b) TECHNICAL AMENDMENTS.—Section 18 of the

13 Office of Federal Procurement Policy Act (41 U.S.C. 416)

14 is amended—

15 (1) in subsection (a)(1)(A), by striking out ‘‘no16 tice’’ in the matter following clause (ii) and inserting

17 in lieu thereof ‘‘notice of solicitation’’; and

18 (2) in subsection (d), by striking out ‘‘a notice

19 under subsection (e)’’ in the first sentence and in20 serting in lieu thereof ‘‘a notice of solicitation under

21 subsection (a)’’.

22 SEC. 3003. IMPLEMENTATION IN EXECUTIVE AGENCIES.

23 The Office of Federal Procurement Policy Act (41

24 U.S.C. 401 et seq.), as amended by section 3002, is fur-
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1 ther amended by adding after section 39 the following new

2 section:

3 ‘‘SEC. 39A. IMPLEMENTATION OF FACNET SYSTEMS.

4 ‘‘(a) IMPLEMENTATION OF FACNET SYSTEMS.—(1)

5 The head of each executive agency shall implement the

6 Federal acquisition computer network (‘FACNET’) sys7 tems required by section 39.

8 ‘‘(2) In implementing the FACNET systems pursu9 ant to paragraph (1), the head of an executive agency shall

10 consult with the Administrator for Federal Procurement

11 Policy and the Administrator for General Services.

12 ‘‘(b) DESIGNATION OF AGENCY PROGRAM MAN13 AGER.—(1) The head of each executive agency shall des14 ignate a program manager to have responsibility for imple15 mentation of FACNET systems for that agency and other16 wise to implement this section.

17 ‘‘(2) A program manager designated under this sub18 section for an executive agency shall—

19 ‘‘(A) report directly to the senior procurement

20 executive designated for the agency under section

21 16(4);

22 ‘‘(B) be responsible for the timely and cost-ef23 fective implementation of the FACNET system ar24 chitecture for the agency in a manner that is respon25 sive to the procurement needs of the agency, na-
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1 tional business needs, and the public’s interest in

2 open government;

3 ‘‘(C) develop plans for phasing-in the implemen4 tation of FACNET systems for the procuring activi5 ties of the executive agency and phasing-out local

6 network systems that perform comparable procure7 ment functions;

8 ‘‘(D) participate in the interagency development

9 of standard procurement electronic data interchange

10 transaction sets; and

11 ‘‘(E) in carrying out this section, comply with

12 guidelines issued by the Administrator under this

13 section and program directives issued by the Admin14 istrator of General Services under section 111 of the

15 Federal Property and Administrative Services Act of

16 1949.

17 ‘‘(c) CERTIFICATION OF FACNET SYSTEM.—(1)

18 When the senior procurement official of an executive agen19 cy determines that a procuring activity of the agency has

20 implemented an interim FACNET system (as defined in

21 subsection (f)), the senior procurement official shall certify

22 to the Administrator for Federal Procurement Policy that

23 the agency has implemented an interim FACNET system.

24 ‘‘(2) When the head of an executive agency, with the

25 concurrence of the Administrator for Federal Procurement
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1 Policy, determines that the agency has implemented a full

2 FACNET system (as defined in subsection (g)), the head

3 of the agency shall certify to Congress that the agency

4 has implemented a full FACNET system.

5 ‘‘(3) The head of each executive agency shall provide

6 for implementation of both interim FACNET system and

7 full FACNET system, with priority on providing conven8 ient and universal user access as required by section

9 39(b)(3)(C), in that agency as soon as practicable after

10 the date of the enactment of the Federal Acquisition Re11 form Act of 1994.

12 ‘‘(d) HIGHER SIMPLIFIED ACQUISITION THRESHOLD

13 WHEN FACNET SYSTEM CERTIFIED.—A certification to

14 the Administrator or Congress under subsection (c) shall

15 be considered to be a certification for purposes of the high16 er simplified acquisition threshold under section 4A(b), ex17 cept that a certification under paragraph (1) of subsection

18 (c) shall not constitute such a certification in the case of

19 solicitations issued after the end of the three-year period

20 beginning on the date of the enactment of the Federal Ac21 quisition Reform Act of 1994.

22 ‘‘(e) EXEMPTION FROM NOTICE PROVISIONS.—An

23 executive agency is exempt from the requirements of sec24 tion 18(a)(1) of the Office of Federal Procurement Policy

25 Act (41 U.S.C. 416(a)(1)) if the senior procurement offi-
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1 cial of the agency makes the certification described in sub2 section (c)(1).

3 ‘‘(f) IMPLEMENTATION OF INTERIM FACNET SYS4 TEM.—A procuring activity shall be considered to have im5 plemented an interim FACNET system if—

6 ‘‘(1) with respect to each procurement expected

7 to be in an amount less than the simplified acquisi8 tion threshold, the procuring activity has imple9 mented the FACNET functions described in para10 graphs (1)(A) and (2)(A) of section 39(b), as in ef11 fect on the effective date of section 3002 of the Fed12 eral Acquisition Reform Act of 1994; and

13 ‘‘(2) with respect to each procurement expected

14 to be in an amount less than the simplified acquisi15 tion threshold, the procuring activity issues notices

16 of solicitations through a system with those func17 tions for all contracting opportunities other than in

18 cases covered by section 18(c).

19 ‘‘(g) IMPLEMENTATION OF FULL FACNET SYS20 TEM.—(1) An executive agency shall be considered to have

21 implemented a full FACNET system if (except in the case

22 of procuring activities (or portions thereof) of the agency

23 for which the head of the agency determines that imple24 mentation is not cost effective or practicable) the executive

25 agency has implemented all of the FACNET functions de-
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1 scribed in section 39(b), as in effect on the effective date

2 of section 3002 of the Federal Acquisition Reform Act of

3 1994.

4 ‘‘(2) For purposes of paragraph (1), an executive

5 agency may not be considered to have implemented a full

6 FACNET system if—

7 ‘‘(A) the head of the agency has determined

8 that implementation of FACNET system is not cost

9 effective or practicable in the case of certain procur10 ing activities (or portions thereof) of the agency; and

11 ‘‘(B) the percentage of the procurement actions

12 executed by those procuring activities (or portions

13 thereof) for the preceding fiscal year is greater than

14 25 percent of the total number of procurement ac15 tions executed by the agency for that year.

16 ‘‘(h) PROCURING ACTIVITIES ORIGINALLY EX17 CLUDED IN CERTIFICATION.—(1) If the head of an execu18 tive agency, in certifying under subsection (c) that the

19 agency has implemented a full FACNET system, deter20 mines that such implementation is not cost effective or

21 practicable in the case of any procuring activity (or por22 tion thereof) of that agency, then that certification shall

23 not apply under section 4A(b) to any procurement action

24 by that procuring activity (or portion thereof).
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1 ‘‘(2) If the head of an executive agency determines

2 that a full FACNET system has subsequently been imple3 mented for that procuring activity (or portion thereof), the

4 head of the agency shall make a certification to Adminis5 trator for Federal Procurement Policy in the same manner

6 as a certification under paragraph (2) of subsection (c),

7 and such certification shall have the same effect with re8 spect to that procuring activity (or portion thereof) as if

9 made under such paragraph of subsection (c).’’.

10 PART II—SIMPLIFICATION OF PROCEDURES

11 SEC. 3011. SIMPLIFIED ACQUISITION PROCEDURES.

12 The Office of Federal Procurement Policy Act (41

13 U.S.C. 401 et seq.), as amended by section 3001, is fur14 ther amended by inserting after section 4A the following

15 new section:

16 ‘‘SEC. 4B. SIMPLIFIED ACQUISITION PROCEDURES.

17 ‘‘(a) SIMPLIFIED PROCEDURES REQUIRED.—In

18 order to promote efficiency and economy in contracting

19 and to avoid unnecessary burdens for agencies and con20 tractors, the Federal Acquisition Regulation shall provide

21 for special simplified procedures for contracts for acquisi22 tion of property and services that are not in excess of the

23 simplified acquisition threshold.

24 ‘‘(b) DIVISION OF CONTRACTS PROHIBITED.—A pro25 posed purchase or contract for an amount above the sim-
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1 plified acquisition threshold may not be divided into

2 several purchases or contracts for lesser amounts in order

3 to use the simplified acquisition procedures required by

4 subsection (a).

5 ‘‘(c) PROMOTION OF COMPETITION.—In using sim6 plified acquisition procedures, the head of an executive

7 agency shall promote competition to the maximum extent

8 practicable.’’.

9 SEC. 3012. SMALL BUSINESS PROVISIONS.

10 (a) INTERIM REPORTING RULE.—Notwithstanding

11 section 4A of the Office of Federal Procurement Policy

12 Act, as added by section 3001, during the 3-year period

13 beginning on the date of the issuance in final form of revi14 sions to the Federal Acquisition Regulation under section

15 4C of the Office of Federal Procurement Policy Act, as

16 added by section 3013, procuring activities shall continue

17 to report, pursuant to section 19(d) of the Office of Fed18 eral Procurement Policy Act (41 U.S.C. 417(d)), procure19 ment awards with a dollar value of at least $25,000, but

20 less than $100,000, in conformity with the procedures for

21 the reporting of a contract award in excess of $25,000

22 in effect on November 18, 1993.

23 (b) FUNCTIONS OF ADMINISTRATOR FOR FEDERAL

24 PROCUREMENT POLICY.—Section 6(d) of the Office of
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1 Federal Procurement Policy Act (41 U.S.C. 405(d)) is

2 amended—

3 (1) in paragraph (7), by striking out ‘‘and’’

4 after the semicolon at the end; and

5 (2) by redesignating paragraph (8) as para6 graph (10) and inserting after paragraph (7) the fol7 lowing:

8 ‘‘(8) developing policies, in consultation with

9 the Administrator of the Small Business Administra10 tion, that ensure that small businesses and small

11 businesses owned and controlled by socially and eco12 nomically disadvantaged persons are provided with

13 the maximum practicable opportunities to partici14 pate in procurements that are conducted for

15 amounts below the simplified acquisition threshold;

16 ‘‘(9) developing policies that will promote

17 achievement of goals for participation by small busi18 nesses and small businesses owned and controlled by

19 socially and economically disadvantaged individuals;

20 and’’.

21 SEC. 3013. PROCEDURES FOR PURCHASES BELOW MICRO22 PURCHASE THRESHOLD.

23 The Office of Federal Procurement Policy Act (41

24 U.S.C. 401 et seq.), as amended by section 3011, is fur-
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1 ther amended by inserting after section 4B the following

2 new section:

3 ‘‘SEC. 4C. PROCEDURES APPLICABLE TO PURCHASES

4 BELOW MICRO-PURCHASE THRESHOLD.

5 ‘‘(a) REQUIREMENTS.—(1) The head of each execu6 tive agency shall ensure that procuring activities of that

7 agency, in awarding a contract with a price exceeding the

8 micro-purchase threshold, comply with the requirements

9 of section 8(a) of the Small Business Act (15 U.S.C.

10 637(a)) and section 45 of this Act.

11 ‘‘(2) The authority under part 13.106(a)(1) of the

12 Federal Acquisition Regulation (48 C.F.R. 13.106(a)(1)),

13 as in effect on November 18, 1993, to make purchases

14 without securing competitive quotations does not apply to

15 any purchases with a price exceeding the micro-purchase

16 threshold.

17 ‘‘(3) The head of each executive agency shall ensure

18 that procuring activities of that agency comply with the

19 requirements of section 40, relating to the small business

20 reserve.

21 ‘‘(b) CERTAIN CONTRACTING OFFICIALS NOT TO BE

22 CONSIDERED PROCUREMENT OFFICIALS.—Any civilian

23 officer or employee, and any member of the Armed Forces,

24 who has authority to enter into contracts but whose con25 tracting authority is limited to the amount of the micro-
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1 purchase threshold or less is not a procurement official

2 as defined in paragraph (3)(A) of section 27(p).

3 ‘‘(c) IMPLEMENTATION THROUGH FAR.—The provi4 sions of subsections (a) and (b) shall be implemented

5 through the Federal Acquisition Regulation.

6 ‘‘(d) MICRO-PURCHASE THRESHOLD DEFINED.—For

7 purposes of this subsection, the micro-purchase threshold

8 is the amount of $2,500, adjusted on October 1 of each

9 year divisible by 5 to the equivalent amount in constant

10 fiscal year 1993 dollars (rounded to the nearest $100).’’.

11 SEC. 3014. PROCUREMENT NOTICE.

12 (a) CONTINUATION OF EXISTING NOTICE THRESH13 OLDS.—Subsection (a) of section 18 of the Office of Fed14 eral Procurement Policy Act (41 U.S.C. 416) is amended

15 as follows:

16 (1) Paragraph (1) is amended—

17 (A) by striking out ‘‘the small purchase

18 threshold’’ each place it appears and inserting

19 in lieu thereof ‘‘the simplified acquisition

20 threshold’’;

21 (B) by striking out ‘‘(c)—’’ in the matter

22 preceding subparagraph (A) and inserting in

23 lieu thereof ‘‘(c):’’;
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1 (C) by striking out ‘‘an executive’’ at the

2 beginning of subparagraphs (A) and (C) and in3 serting in lieu thereof ‘‘An executive’’;

4 (D) by striking out the semicolon at the

5 end of subparagraph (A) and inserting in lieu

6 thereof a period; and

7 (E) by amending subparagraph (B) to read

8 as follows:

9 ‘‘(B) An executive agency intending to solicit

10 (including orally or by any other means) bids or pro11 posals for a contract for property or services for a

12 price expected to exceed $10,000 but not to exceed

13 the simplified acquisition threshold shall post a no14 tice of solicitation described in subsection (b). The

15 notice shall be posted at the contracting office issu16 ing the solicitation or shall be made available

17 through an electronic system with a FACNET sys18 tem that at least meets the requirements of para19 graphs (1)(A) and (2)(A) of section 39(b). The no20 tice shall be posted for a period of not less than 10

21 days, except that in the case of a posting made

22 through an electronic system with such a FACNET

23 system, the posting may be for a period of less than

24 10 days as prescribed in the Federal Acquisition

25 Regulation.’’.
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1 (2) Paragraph (3)(B) is amended by inserting

2 after ‘‘(B)’’ the following: ‘‘in the case of a contract

3 or order for an amount expected to exceed the sim4 plified acquisition threshold,’’.

5 (b) OPPORTUNITY FOR ALL RESPONSIBLE POTEN6 TIAL OFFERORS.—Such subsection is further amended by

7 adding at the end the following:

8 ‘‘(4) An executive agency intending to solicit offers

9 for a contract for which a notice of solicitation is required

10 to be posted under paragraph (1)(B) shall ensure that all

11 potential offerors are permitted to respond to the solicita12 tion for the contract within the period of time specified

13 in the solicitation for the submission of offers.’’.

14 (c) ESTABLISHMENT OF DEADLINE FOR SUBMISSION

15 OF OFFERS.—Such subsection is further amended by in16 serting after paragraph (4), as added by subsection (b),

17 the following new paragraph:

18 ‘‘(5) An executive agency shall establish a deadline

19 for the submission of all bids or proposals in response to

20 a notice of solicitation with respect to which no such dead21 line is provided by statute.’’.

22 (d) EXCEPTIONS.—Subsection (c) of such section is

23 amended by adding at the end the following new para24 graph:
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1 ‘‘(4)(A) The requirements of subsection (a)(1) shall

2 not apply in the case of an acquisition accomplished

3 through the use of an electronic system within a FACNET

4 system, as described in section 39 and certified under sec5 tion 39A.

6 ‘‘(B) The Federal Acquisition Regulation shall pro7 vide for minimum periods of time for submission of offers

8 for acquisitions described in subparagraph (A). Such peri9 ods shall provide offerors a reasonable opportunity to re10 spond.

11 ‘‘(C) A notice of solicitation of bids or proposals for

12 an acquisition described in subparagraph (A) shall include

13 the matter described in under subsection (b).’’.

14 SEC. 3015. SMALL BUSINESS RESERVATION.

15 The Office of Federal Procurement Policy Act (41

16 U.S.C. 401 et seq.), as amended by section 3003, is fur17 ther amended by adding after section 39A the following

18 new section:

19 ‘‘SEC. 40. CONTRACTS: SMALL BUSINESS RESERVATION.

20 ‘‘(a) REQUIREMENT.—Each contract for the procure21 ment of property and services that has an anticipated

22 value not in excess of $100,000 shall be reserved exclu23 sively for small business concerns unless the contracting

24 officer is unable to obtain offers from two or more small

25 business concerns that (1) are competitive with market
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1 prices, and (2) are competitive with regard to the quality

2 and delivery of the goods or services being procured.

3 ‘‘(b) OFFERS TO BE CONSIDERED.—In carrying out

4 subsection (a), a contracting officer shall consider any

5 offer that is responsive and that is received in a timely

6 manner from an eligible small business offeror.

7 ‘‘(c) RELATIONSHIP TO OTHER LAWS.—Nothing in

8 subsection (a) shall be construed as precluding an award

9 of a contract with a value not in excess of $100,000 under

10 the authority of section 45 of this Act and section 12 of

11 the Business Opportunity Development Reform Act of

12 1988 (Public Law 100–656; 15 U.S.C. 644 note).

13 ‘‘(d) PAYMENT TERMS AND DISBURSEMENT.—In the

14 case of contracts referred to in subsection (a) that are en15 tered into with small business concerns, contracting offi16 cers shall, wherever circumstances permit, provide for the

17 use of fast payment terms and the disbursement of pay18 ment through electronic fund transfer.’’.

19 SEC. 3016. GAO TEST AND REPORT ON PERFORMANCE OF

20 SIMPLIFIED ACQUISITION THRESHOLD.

21 (a) PERFORMANCE TEST.—The Comptroller General

22 of the United States shall collect data and assess the ef23 fects of the simplified acquisition threshold, as established

24 in section 4A of the Office of Federal Procurement Policy

25 Act, on the participation of small business concerns (in-
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1 cluding small business concerns owned and controlled by

2 socially and economically disadvantaged individuals) in

3 procurement awards of less than $100,000 and the bene4 fits and detriments, if any, to the procuring activities of

5 the various Executive agencies.

6 (b) DATA TO BE COLLECTED.—Data collected under

7 subsection (a) shall include data regarding whether the es8 tablishment of the simplified acquisition threshold has im9 proved the acquisition process in terms of reduced paper10 work, financial or other savings to the Federal Govern11 ment, and any increase in the number of contractors par12 ticipating in the contracting process.

13 (c) PERIOD.—Data shall be collected for purposes of

14 subsection (a) during the period beginning with the first

15 full fiscal year quarter after the effective date of the

16 amendments made by section 3001 and ending on Septem17 ber 30, 1997.

18 (d) REPORT.—By March 1, 1998, the Comptroller

19 General shall submit to the Committee on Government

20 Operations of the House of Representatives, the Commit21 tee on Governmental Affairs of the Senate, and the Com22 mittees on Small Business of the House of Representatives

23 and the Senate a report on the effects of the establishment

24 of the simplified acquisition threshold by the amendments

25 made by section 3001.
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1 PART III—INAPPLICABILITY OF LAWS TO, AND

2 WAIVER OF LAWS FOR, ACQUISITIONS NOT

3 IN EXCESS OF SIMPLIFIED ACQUISITION

4 THRESHOLD

5 SEC. 3021. INAPPLICABILITY OF FUTURE ENACTED PRO6 CUREMENT LAWS TO CONTRACTS NOT EX7 CEEDING THE SIMPLIFIED ACQUISITION

8 THRESHOLD.

9 Section 4A of the Office of Federal Procurement Pol10 icy Act, as added by section 3001, is amended by adding

11 at the end the following new subsection:

12 ‘‘(e) CONSTRUCTION WITH FUTURE ENACTMENTS.—

13 A provision of law enacted after the date of the enactment

14 of the Federal Acquisition Reform Act of 1994 shall not

15 be construed as applicable to purchases of property or

16 services by an executive agency for an amount not in ex17 cess of the simplified acquisition threshold unless that pro18 vision of law specifically refers to this section and specifi19 cally states that such provision of law modifies or super20 sedes this section.’’.

21 SEC. 3022. AUTHORITY TO WAIVE CERTAIN PROCUREMENT

22 LAWS FOR CONTRACTS NOT EXCEEDING THE

23 SIMPLIFIED ACQUISITION THRESHOLD.

24 Section 4A of the Office of Federal Procurement Pol25 icy Act, as amended by section 3021, is further amended

26 by adding at the end the following new subsection:
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1 ‘‘(f) AUTHORITY TO WAIVE CERTAIN PROCUREMENT

2 LAWS.—

3 ‘‘(1) IN GENERAL.—Subject to paragraphs (2)

4 and (3), the Federal Acquisition Regulatory Council

5 may waive any provision of law subject to implemen6 tation by the Council or by an executive agency

7 under section 25 of this Act that sets forth policies,

8 procedures, requirements, restrictions, or contract

9 clauses that are not necessary to implement any of

10 the Governmental policies set forth in paragraph (2)

11 under a contract in an amount not greater than the

12 simplified acquisition threshold. Any waiver under

13 this subsection shall apply to the procurement by ex14 ecutive agencies of property and services not in ex15 cess of the simplified acquisition threshold.

16 ‘‘(2) DETERMINATION REQUIRED.—The Fed17 eral Acquisition Regulatory Council may waive a

18 provision of law under this section only if the Coun19 cil determines that the waiver will not adversely af20 fect—

21 ‘‘(A) national security interests;

22 ‘‘(B) the economy, efficiency, and effective23 ness of Federal procurement;

24 ‘‘(C) full and open competition;
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1 ‘‘(D) the Federal Government’s ability to

2 obtain property and services of the requisite

3 quality, at a reasonable price, and within the

4 time needed;

5 ‘‘(E) small and small disadvantaged busi6 ness concerns; or

7 ‘‘(F) fair dealings and equitable relation8 ships with the private sector.

9 ‘‘(3) LIMITATIONS.—The Federal Acquisition

10 Regulatory Council may not under this section waive

11 a requirement that is established by statute or regu12 lation under any of the following provisions:

13 ‘‘(A) Section 2533 of title 10, United

14 States Code (relating to limitation on procure15 ment of goods which are other than American

16 goods).

17 ‘‘(B) Section 2631 of title 10, United

18 States Code (relating to preference to United

19 States vessels for transportation of supplies).

20 ‘‘(C) The Small Business Act (15 U.S.C.

21 631 et seq.).

22 ‘‘(D) Section 4124 of title 18, United

23 States Code (relating to purchase of prison24 made products by Federal departments).
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1 ‘‘(E) Title 18, United States Code, and

2 any other law imposing a criminal penalty.

3 ‘‘(F) Section 503 of the Rehabilitation Act

4 of 1973 (29 U.S.C. 793) (relating to employ5 ment under Federal contracts for individuals

6 with disabilities).

7 ‘‘(G) Section 4212 of title 38, United

8 States Code (relating to veterans’ employment

9 emphasis under Federal contracts).

10 ‘‘(H) The Act of August 24, 1935 (40

11 U.S.C. 270a et seq.), commonly referred to as

12 the ‘Miller Act’.

13 ‘‘(I) The Act of March 3, 1931 (40 U.S.C.

14 276a et seq.), commonly referred to as the

15 ‘Davis-Bacon Act’.

16 ‘‘(J) Title IX of the Federal Property and

17 Administrative Services Act of 1949 (40 U.S.C.

18 541 et seq.), popularly referred to as the

19 ‘Brooks Architect-Engineers Act’.

20 ‘‘(K) Section 111 of the Federal Property

21 and Administrative Services Act of 1949 (40

22 U.S.C. 759), popularly referred to as the

23 ‘Brooks Automatic Data Processing Act’.
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1 ‘‘(L) Section 901(b) of the Merchant Ma2 rine Act, 1936 (46 U.S.C. app. 1241(b)) (relat3 ing to cargo preference for American vessels).

4 ‘‘(M) Title III of the Act of March 3, 1933

5 (41 U.S.C. 10a et seq.), commonly referred to

6 as the ‘Buy American Act’.

7 ‘‘(N) The Act of June 25, 1938 (41 U.S.C.

8 46 et seq.), commonly referred to as the Wag9 ner-O’Day Act, that was revised and reenacted

10 in the Act of June 23, 1971 (85 Stat. 77), com11 monly referred to as the ‘Javits-Wagner-O’Day

12 Act’.

13 ‘‘(O) The Service Contract Act of 1965

14 (41 U.S.C. 351–358).

15 ‘‘(P) Section 27 of this Act (41 U.S.C.

16 423), other than subsection (e) of that section

17 (relating to procurement integrity).

18 ‘‘(Q) Executive Order No. 11246 (or any

19 successor to that order), dated September 24,

20 1965.’’.

21 PART IV—REVISION OF REGULATIONS

22 SEC. 3081. REVISION REQUIRED.

23 (a) FEDERAL ACQUISITION REGULATION.—(1) Not

24 later than one year after the date of the enactment of this

25 Act, the Federal Acquisition Regulatory Council estab-
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1 lished by section 25(a) of the Office of Federal Procure2 ment Policy Act (41 U.S.C. 421(a)) shall—

3 (A) review the Federal Acquisition Regulation

4 to identify regulations that are applicable to acquisi5 tions in excess of a specified amount that is less

6 than $100,000; and

7 (B) amend the regulations so identified as nec8 essary to provide that such regulations do not apply

9 to acquisitions that are not in excess of the sim10 plified acquisition threshold.

11 (2) Paragraph (1) does not apply in the case of a

12 regulation for which such an amendment would not be in

13 the national interest, as determined by the Council.

14 (b) SUPPLEMENTAL REGULATIONS.—Not later than

15 90 days after the date on which the review required by

16 subsection (a) is completed, the head of each executive

17 agency that has issued regulations, policies, or procedures

18 referred to in section 25(c)(2) of the Office of Federal

19 Procurement Policy Act (41 U.S.C. 421(c)(2)) shall—

20 (1) identify any such regulation, policy, or pro21 cedure that is applicable to acquisitions in excess of

22 a specified amount that is less than $100,000; and

23 (2) pursuant to section 22 of such Act (41

24 U.S.C. 418b), publish amendments to the regula25 tions so identified as necessary to provide that such
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1 regulations, policies, and procedures do not apply to

2 acquisitions that are not in excess of the simplified

3 acquisition threshold.

4 (c) DEFINITIONS.—In this section:

5 (1) The term ‘‘simplified acquisition threshold’’

6 has the meaning given such term in section 4A of

7 the Office of Federal Procurement Policy Act, as

8 added by section 3001.

9 (2) The term ‘‘executive agency’’ has the mean10 ing given such term in section 3(a) of the Federal

11 Property and Administrative Services Act of 1949

12 (41 U.S.C. 472(b)).

13 Subtitle B—Socioeconomic and

14 Small Business Laws

15 SEC. 3101. PAYMENT PROTECTIONS FOR SUBCONTRAC16 TORS AND SUPPLIERS.

17 (a) REGULATIONS.—

18 (1) IN GENERAL.—The Administrator for Fed19 eral Procurement Policy shall prescribe in regula20 tions the requirements described in paragraph (2).

21 (2) PROCEDURES RELATING TO COMPLIANCE

22 WITH PAYMENT TERMS.—(A) Under procedures es23 tablished in the regulations, upon the assertion by a

24 subcontractor or supplier of a contractor performing

25 a Government contract that the subcontractor or
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1 supplier has not been paid by the prime contractor

2 in accordance with the payment terms of the sub3 contract, purchase order, or other agreement with

4 the prime contractor, the contracting officer may de5 termine the following:

6 (i) With respect to a construction contract,

7 whether the contractor has made progress pay8 ments to the subcontractor or supplier in com9 pliance with chapter 39 of title 31, United

10 States Code.

11 (ii) With respect to a contract other than

12 a construction contract, whether the contractor

13 has made progress or other payments to the

14 subcontractor or supplier in compliance with

15 the terms of the subcontract, purchase order, or

16 other agreement with the prime contractor.

17 (iii) With respect to either a construction

18 contract or a contract other than a construction

19 contract, whether the contractor has made final

20 payment to the subcontractor or supplier in

21 compliance with the terms of the subcontract,

22 purchase order, or other agreement with the

23 prime contractor.

24 (iv) With respect to either a construction

25 contract or a contract other than a construction
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1 contract, whether any certification of payment

2 of the subcontractor or supplier accompanying

3 the contractor’s payment request to the Govern4 ment is accurate.

5 (B) If the contracting officer determines that

6 the prime contractor is not in compliance with any

7 matter referred to in clause (i), (ii), or (iii) of sub8 paragraph (A), the contracting officer may, under

9 procedures established in the regulations—

10 (i) encourage the prime contractor to make

11 timely payment to the subcontractor or sup12 plier; or

13 (ii) reduce or suspend progress payments

14 with respect to amounts due to the prime con15 tractor.

16 (C) If the contracting officer determines that a

17 certification referred to in clause (iv) of subpara18 graph (A) is inaccurate in any material respect, the

19 contracting officer shall, under procedures estab20 lished in the regulations, initiate appropriate admin21 istrative or other remedial action.

22 (D) This paragraph shall apply with respect to

23 any Government contract that is in effect on the

24 date of promulgation of the regulations under this

25 subsection or that is awarded after such date.
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1 (b) INAPPLICABILITY TO CERTAIN CONTRACTS.—

2 The regulations prescribed under this section shall not

3 apply to the following contracts:

4 (1) A contract that is for an amount not in ex5 cess of the simplified acquisition threshold (within

6 the meaning of section 4A of the Office of Federal

7 Procurement Policy Act).

8 (2) A contract for the acquisition of commercial

9 items (as that term is defined in section 4(12) of the

10 Office of Federal Procurement Policy Act.

11 (c) REGULATIONS DEADLINES.—(1) The Adminis12 trator for Federal Procurement Policy shall publish pro13 posed regulations under subsection (a) not later than 180

14 days after the date of the enactment of this Act.

15 (2) The Administrator shall publish final regulations

16 under subsection (a) not later than 270 days after the date

17 of the enactment of this Act.

18 SEC. 3102. SMALL BUSINESS PROCUREMENT ADVISORY

19 COUNCIL.

20 (a) ESTABLISHMENT.—There is hereby established

21 an interagency council to be known as the ‘‘Small Busi22 ness Procurement Advisory Council’’ (hereinafter in this

23 section referred to as the ‘‘Council’’).

24 (b) DUTIES.—The duties of the Council are—
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1 (1) to serve as a forum for discussion of issues

2 and problems relating to, and ideas for improvement

3 of, small business procurement matters within the

4 Federal Government;

5 (2) to provide information to other departments

6 and agencies of the Federal Government about small

7 business procurement; and

8 (3) to issue advisory reports to the Small Busi9 ness Administration and the Office of Federal Pro10 curement Policy on small business procurement mat11 ters.

12 (c) MEMBERSHIP.—The Council shall be composed of

13 the following members:

14 (1) The Administrator of the Small Business

15 Administration (or the designee of the Adminis16 trator).

17 (2) The Administrator for Federal Procurement

18 Policy (or the designee of the Administrator).

19 (3) The Director of the Minority Business De20 velopment Agency.

21 (4) The head of each Office of Small and Dis22 advantaged Business Utilization in each Federal

23 agency having procurement powers.

24 (d) CO-CHAIRMEN.—The Council shall be co-chaired

25 by the Administrator of the Small Business Administra-
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1 tion and the Administrator for Federal Procurement Pol2 icy.

3 (e) MEETINGS.—The Council shall meet at the call

4 of the chairmen, but not less often than four times a year

5 and once each quarter.

6 (f) DIRECTOR.—The Chief Counsel for Advocacy of

7 the Small Business shall serve as the director of the Coun8 cil. The director may not vote on matters before the coun9 cil except in the case of a tie vote among the members.

10 The duties of the director shall be determined by the

11 chairmen of the Council. The Chief Counsel for Advocacy

12 shall receive no additional pay by reason of the counsel’s

13 service as director of the Council.

14 (g) ANNUAL REPORT.—Not later than 30 days after

15 the end of each fiscal year, the Council shall submit to

16 Congress a report detailing the activities of the Council

17 in the preceding fiscal year in carrying out this section.

18 Subtitle C—Miscellaneous

19 Acquisition Laws

20 SEC. 3151. RESTRICTION ON USE OF NONCOMPETITIVE

21 PROCEDURES FOR PROCUREMENT FROM A

22 SPECIFIED SOURCE.

23 The Office of Federal Procurement Policy Act (41

24 U.S.C. 401 et seq.), as amended by section 3015, is fur-
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1 ther amended by adding at the end the following new sec2 tion:

3 ‘‘SEC. 41. RESTRICTION ON USE OF NONCOMPETITIVE PRO4 CEDURES FOR PROCUREMENT FROM A SPEC5 IFIED SOURCE.

6 ‘‘(a) POLICY.—It is the policy of Congress that no

7 legislation should be enacted that requires a procurement

8 by an executive agency to be made from a specified non9 Federal Government source.

10 ‘‘(b) CONDITIONS.—A provision of law may not be

11 construed as requiring a procurement by an executive

12 agency to be made from a specified non-Federal Govern13 ment source unless that provision of law—

14 ‘‘(1) specifically refers to this subsection;

15 ‘‘(2) specifically identifies the particular non16 Federal Government source involved; and

17 ‘‘(3) specifically states that the procurement

18 from that source is required by such provision of law

19 in contravention of the policy set forth in subsection

20 (a).’’.

21 SEC. 3152. REPEAL OF OBSOLETE PROVISION.

22 Section 308 of the Federal Property and Administra23 tive Services Act of 1949 (41 U.S.C. 258) is repealed.
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1 TITLE IV—STANDARDS OF

2 CONDUCT

3 SEC. 4001. CONTRACTING FUNCTIONS PERFORMED BY FED4 ERAL PERSONNEL.

5 (a) AMENDMENT OF OFPP ACT.—The Office of Fed6 eral Procurement Policy Act, as amended by section 1092,

7 is further amended by inserting after section 22 the fol8 lowing new section 23:

9 ‘‘SEC. 23. CONTRACTING FUNCTIONS PERFORMED BY FED10 ERAL PERSONNEL.

11 ‘‘(a) LIMITATION ON PAYMENT FOR ADVISORY AND

12 ASSISTANCE SERVICES.—(1) No person who is not an em13 ployee may be paid by an agency for services to conduct

14 evaluations or analyses of any aspect of a proposal submit15 ted for an acquisition unless employees with adequate

16 training and capabilities to perform such evaluations and

17 analyses are not readily available within the agency or an18 other Federal agency, as determined in accordance with

19 standards and procedures prescribed in the Federal Acqui20 sition Regulation.

21 ‘‘(2) In the administration of this subsection, the

22 head of each agency shall determine in accordance with

23 the standards and procedures set forth in the Federal Ac24 quisition Regulation whether—
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1 ‘‘(A) a sufficient number of employees within

2 the agency or another Federal agency are readily

3 available to perform a particular evaluation or analy4 sis for the agency head making the determination;

5 and

6 ‘‘(B) the readily available employees have the

7 training and capabilities necessary to perform the

8 evaluation or analysis.

9 ‘‘(b) DEFINITION.—For purposes of this section, the

10 term ‘employee’ has the meaning given such term in sec11 tion 2105 of title 5, United States Code.’’.

12 (b) REQUIREMENT FOR GUIDANCE AND REGULA13 TIONS.—

14 (1) GUIDANCE AND REGULATIONS REQUIRED.—

15 The Federal Acquisition Regulatory Council estab16 lished by section 25(a) of the Office of Federal Pro17 curement Policy Act (41 U.S.C. 421(a)) shall—

18 (A) review part 37 of title 48 of the Code

19 of Federal Regulations as it relates to the use

20 of advisory and assistance services; and

21 (B) provide guidance and promulgate regu22 lations regarding—

23 (i) what actions Federal agencies are

24 required to take to determine whether ex25 pertise is readily available within the Fed-
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1 eral Government before contracting for ad2 visory and technical services to conduct ac3 quisitions; and

4 (ii) the manner in which Federal em5 ployees with expertise may be shared with

6 agencies needing expertise for such acquisi7 tions.

8 (2) DEFINITION.—In paragraph (1), the term

9 ‘‘employee’’ has the meaning given such term in sec10 tion 2105 of title 5, United States Code.

11 SEC. 4002. REPEAL OF EXECUTED REQUIREMENT FOR

12 STUDY AND REPORT.

13 Section 17 of the Office of Federal Procurement Pol14 icy Act (41 U.S.C. 415) is repealed.

15 SEC. 4003. INTERESTS OF MEMBERS OF CONGRESS.

16 Section 3741 of the Revised Statutes (41 U.S.C. 22)

17 is amended to read as follows:

18 ‘‘No member of Congress shall be admitted to any

19 share or part of any contract or agreement made, entered

20 into, or accepted by or on behalf of the United States,

21 or to any benefit to arise thereupon.’’.

22 SEC. 4004. WAITING PERIOD FOR SIGNIFICANT CHANGES

23 PROPOSED FOR ACQUISITION REGULATIONS.

24 Section 22(a) of the Office of Federal Procurement

25 Policy Act (41 U.S.C. 418b) is amended—
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1 (1) by striking out ‘‘30 days’’ and inserting in

2 lieu thereof ‘‘60 days’’; and

3 (2) by adding at the end the following: ‘‘Not4 withstanding the preceding sentence, such a policy,

5 regulation, procedure, or form may take effect ear6 lier than 60 days after the publication date when

7 there are compelling circumstances for the earlier ef8 fective date, but in no event may that effective date

9 be less than 30 days after the publication date.’’.

10 TITLE V—COMMERCIAL ITEMS

11 SEC. 5001. DEFINITIONS.

12 (a) DEFINITIONS.—Section 4 of the Office of Federal

13 Procurement Policy Act (41 U.S.C. 403) is amended by

14 adding at the end the following new paragraphs:

15 ‘‘(12) The term ‘commercial item’ means any of

16 the following:

17 ‘‘(A) Any item of a type customarily used

18 in the course of normal business operations for

19 other than Federal Government purposes,

20 that—

21 ‘‘(i) has been sold, leased, or licensed

22 to the general public or to domestic State,

23 or local government entities; or
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1 ‘‘(ii) has been offered for sale, lease,

2 or license to the general public or to do3 mestic State, or local government entities.

4 ‘‘(B) An item intended to be used in the

5 course of normal business operations for other

6 than Federal Government purposes that is not

7 yet available in the commercial marketplace,

8 but will be available in time to satisfy the deliv9 ery requirements under a Federal Government

10 solicitation.

11 ‘‘(C) Any item that, but for—

12 ‘‘(i) modifications of a type customar13 ily available in the commercial market14 place, or

15 ‘‘(ii) minor modifications made to

16 meet Federal Government requirements,

17 would satisfy the criteria in subparagraph (A)

18 or (B).

19 ‘‘(D) Any combination of items meeting

20 the requirements of subparagraph (A), (B), or

21 (C) that are of a type customarily combined

22 and sold in combination to the general public.

23 ‘‘(E) Installation services, maintenance

24 services, repair services, training services, and

25 other services if such services are procured for
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1 support of an item referred to in subparagraph

2 (A), (B), (C), or (D) and if the source of such

3 services—

4 ‘‘(i) offers such services to the general

5 public and the Federal Government con6 temporaneously and under similar terms

7 and conditions; and

8 ‘‘(ii) offers to use the same work force

9 for providing the Federal Government with

10 such services as the source uses for provid11 ing such services to the general public.

12 ‘‘(F) Services offered and sold competi13 tively, in significant quantities, in the commer14 cial marketplace at established catalog prices or

15 standard rates and under standard commercial

16 terms and conditions.

17 ‘‘(G) Any item, combination of items, or

18 service referred to in subparagraphs (A)

19 through (F) notwithstanding the fact that the

20 item, combination of items, or service is trans21 ferred between or among separate divisions,

22 subsidiaries, or affiliates of a contractor.

23 ‘‘(13) The term ‘nondevelopmental item’ means

24 any of the following:

25 ‘‘(A) Any commercial item.
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1 ‘‘(B) Any previously developed item of sup2 ply that is in use by a department or agency of

3 the United States, a State or local government,

4 or a foreign government with which the United

5 States has a mutual defense cooperation agree6 ment.

7 ‘‘(C) Any item of supply described in sub8 paragraph (B) that requires only minor modi9 fication of the type normally available in the

10 commercial marketplace in order to meet the

11 requirements of the procuring department or

12 agency.

13 ‘‘(D) Any item of supply currently being

14 produced that does not meet the requirements

15 of subparagraph (A), (B), or (C) solely because

16 the item—

17 ‘‘(i) is not yet in use; or

18 ‘‘(ii) is not yet available in the com19 mercial marketplace.

20 ‘‘(14) The term ‘component’ means any item

21 supplied to the Federal Government as part of an

22 end item or of another component.

23 ‘‘(15) The term ‘commercial component’ means

24 any component that is a commercial item.’’.
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1 (b) CONFORMING AMENDMENTS.—Such section is

2 further amended—

3 (1) by striking out ‘‘Act—’’ and inserting in

4 lieu thereof ‘‘Act:’’;

5 (2) by capitalizing the initial letter in the first

6 word of each paragraph;

7 (3) by striking out the semicolon at the end of

8 each of paragraphs (1), (2), (3), (5), (6), (7), (8),

9 and (9) and inserting in lieu thereof a period; and

10 (4) in paragraphs (4) and (10), by striking out

11 ‘‘; and’’ at the end and inserting in lieu thereof a

12 period.

13 SEC. 5002. PREFERENCE FOR ACQUISITION OF COMMER14 CIAL ITEMS.

15 The Office of Federal Procurement Policy Act (41

16 U.S.C. 401 et seq.), as amended by section 3151, is fur17 ther amended by adding at the end the following new sec18 tion:

19 ‘‘SEC. 42. PREFERENCE FOR ACQUISITION OF COMMERCIAL

20 ITEMS.

21 ‘‘(a) PREFERENCE.—The head of each executive

22 agency shall ensure that, to the maximum extent prac23 ticable—
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1 ‘‘(1) requirements of the executive agency with

2 respect to a procurement of supplies or services are

3 stated in terms of—

4 ‘‘(A) functions to be performed;

5 ‘‘(B) performance required; or

6 ‘‘(C) essential physical characteristics;

7 ‘‘(2) such requirements are defined so that

8 commercial items or, to the extent that commercial

9 items suitable to meet the agency’s needs are not

10 available, other nondevelopmental items may be pro11 cured to fulfill such requirements; and

12 ‘‘(3) offerors of commercial items and other

13 nondevelopmental items are provided an opportunity

14 to compete in any procurement to fill such require15 ments.

16 ‘‘(b) IMPLEMENTATION.—The head of each executive

17 agency shall ensure that procurement officials in that ex18 ecutive agency, to the maximum extent practicable—

19 ‘‘(1) acquire commercial items or other

20 nondevelopmental items to meet the needs of the ex21 ecutive agency;

22 ‘‘(2) require prime contractors and subcontrac23 tors at all levels under the executive agency con24 tracts to incorporate commercial items or other
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1 nondevelopmental items as components of items sup2 plied to the executive agency;

3 ‘‘(3) modify requirements in appropriate cases

4 to ensure that the requirements can be met by com5 mercial items or, to the extent that commercial

6 items suitable to meet the agency’s needs are not

7 available, other nondevelopmental items;

8 ‘‘(4) state specifications in terms that enable

9 and encourage bidders and offerors to supply com10 mercial items or, to the extent that commercial

11 items suitable to meet the agency’s needs are not

12 available, other nondevelopmental items in response

13 to the executive agency solicitations;

14 ‘‘(5) revise the executive agency’s procurement

15 policies, practices, and procedures not required by

16 law to reduce any impediments in those policies,

17 practices, and procedures to the acquisition of com18 mercial items; and

19 ‘‘(6) require training of appropriate personnel

20 in the acquisition of commercial items.

21 ‘‘(c) PRELIMINARY MARKET RESEARCH.—(1) The

22 head of an executive agency shall conduct market research

23 appropriate to the circumstances—

24 ‘‘(A) before developing new specifications for a

25 procurement by that executive agency; and
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1 ‘‘(B) before soliciting bids or proposals for a

2 contract in excess of the simplified acquisition

3 threshold.

4 ‘‘(2) The head of an executive agency shall use the

5 results of market research to determine whether there are

6 commercial items available that—

7 ‘‘(A) meet the executive agency’s requirements;

8 ‘‘(B) could be modified to meet the executive

9 agency’s requirements; or

10 ‘‘(C) could meet the executive agency’s require11 ments if those requirements were modified to a rea12 sonable extent.’’.

13 SEC. 5003. ACQUISITION OF COMMERCIAL ITEMS.

14 (a) REQUIRED FAR PROVISIONS.—The Office of

15 Federal Procurement Policy Act (41 U.S.C. 401 et seq.),

16 as amended by section 5002, is further amended by adding

17 at the end the following new section:

18 ‘‘SEC. 43. REGULATIONS ON ACQUISITION OF COMMERCIAL

19 ITEMS.

20 ‘‘(a) IN GENERAL.—The Federal Acquisition Regula21 tion shall provide regulations to implement section 42 and

22 paragraphs (12) through (15) of section 4.

23 ‘‘(b) TERMS AND CONDITIONS.—The regulations pre24 scribed under subsection (a) shall contain a set or sets

25 of terms and conditions to be included in contracts for
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1 the acquisition of commercial end items. Such terms and

2 conditions shall, to the maximum extent practicable, in3 clude only those contract clauses that are determined by

4 the agency head to be—

5 ‘‘(1) required to implement provisions of law

6 applicable to commercial item acquisitions; or

7 ‘‘(2) consistent with standard commercial prac8 tice.

9 ‘‘(c) TERMS AND CONDITIONS FOR COMPONENTS.—

10 Such regulations shall provide that a prime contractor fur11 nishing commercial items or items other than commercial

12 items as items or components shall not be required to

13 apply to any of its divisions, subsidiaries, or affiliates or

14 any of its subcontractors or suppliers that are furnishing

15 commercial items as components any clause, term, or con16 dition except those determined by the head of the agency

17 to be—

18 ‘‘(1) required to implement provisions of law

19 applicable to subcontractors furnishing commercial

20 items; or

21 ‘‘(2) determined to be consistent with standard

22 commercial practice.

23 ‘‘(d) MARKET ACCEPTANCE.—The regulations pre24 scribed under subsection (a) shall provide that, under ap25 propriate conditions, the agency head may require an
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1 offeror to demonstrate, as a condition for being considered

2 responsive, that the items offered meet, among other cri3 teria, market acceptance criteria, unless such item has

4 been satisfactorily supplied to an executive agency under

5 current or recent contracts for the same or similar require6 ments.

7 ‘‘(e) USE OF FIXED PRICE CONTRACTS.—The regu8 lations prescribed under subsection (a) shall include a re9 quirement that firm, fixed price contracts, or fixed price

10 contracts with economic price adjustment provisions, be

11 used for the acquisition of commercial items and compo12 nents.

13 ‘‘(f) TERM OF CONTRACTS.—The regulations pre14 scribed under subsection (a) shall provide that, to the ex15 tent practicable, contracts for acquisition of commercial

16 items shall not require contract performance for a term

17 longer than customary industry practice for the item being

18 acquired. A contracting officer may include in a contract

19 provisions for economic price adjustment if an extended

20 period of performance under the contract cannot be avoid21 ed.

22 ‘‘(g) CONTRACT QUALITY REQUIREMENTS.—The

23 regulations prescribed under subsection (a) shall include

24 provisions that—
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1 ‘‘(1) permit, to the maximum extent prac2 ticable, a contractor under a commercial items ac3 quisition to use the existing quality assurance sys4 tem of the contractor as a substitute for compliance

5 with an otherwise applicable requirement for the

6 Government to inspect or test the commercial items

7 before the contractor’s tender of those items for ac8 ceptance by the Government;

9 ‘‘(2) require that, to the maximum extent prac10 ticable, the executive agency take advantage of war11 ranties (including extended warranties) offered by

12 offerors of commercial items and use such warran13 ties for the repair and replacement of commercial

14 items; and

15 ‘‘(3) set forth guidance regarding the use of

16 past performance of commercial items and sources

17 as a factor in contract award decisions.’’.

18 SEC. 5004. PRINCIPLE OF CONSTRUCTION WITH FUTURE

19 LAWS.

20 The Office of Federal Procurement Policy Act (41

21 U.S.C. 401 et seq.), as amended by section 5003, is fur22 ther amended by adding at the end the following new sec23 tion:
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1 ‘‘SEC. 44. PRINCIPLE OF CONSTRUCTION WITH FUTURE

2 LAWS.

3 ‘‘A provision of law enacted after the date of the en4 actment of the Federal Acquisition Reform Act of 1994

5 shall not be construed as applicable to purchases of com6 mercial items by an executive agency unless that provision

7 of law specifically refers to this section and specifically

8 states that such provision of law modifies or supersedes

9 section 42, section 43, section 44, or paragraphs (12)

10 through (15) of section 4.’’.

11 SEC. 5005. AUTHORITY TO WAIVE CERTAIN PROCUREMENT

12 LAWS FOR CONTRACTS FOR COMMERCIAL

13 ITEMS.

14 The Office of Federal Procurement Policy Act (41

15 U.S.C. 401 et seq.), as amended by section 5004, is fur16 ther amended by adding at the end the following new sec17 tion:

18 ‘‘SEC. 45. AUTHORITY TO WAIVE CERTAIN PROCUREMENT

19 LAWS FOR CONTRACTS FOR COMMERCIAL

20 ITEMS.

21 ‘‘(a) IN GENERAL.—Subject to subsections (b) and

22 (c), the Federal Acquisition Regulatory Council may waive

23 any provision of law subject to implementation by the

24 Council or by an executive agency under section 25 of this

25 Act that sets forth policies, procedures, requirements, re26 strictions, or contract clauses that are not necessary to
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1 implement any of the Governmental policies set forth in

2 subsection (b) under a contract for commercial items. Any

3 waiver under this subsection shall apply to the procure4 ment by executive agencies of commercial items.

5 ‘‘(b) DETERMINATION REQUIRED.—The Federal Ac6 quisition Regulatory Council may waive a provision of law

7 under this section only if the Council determines that the

8 waiver will not adversely affect—

9 ‘‘(1) national security interests;

10 ‘‘(2) the economy, efficiency, and effectiveness

11 of Federal procurement;

12 ‘‘(3) full and open competition;

13 ‘‘(4) the Federal Government’s ability to obtain

14 property and services of the requisite quality, at a

15 reasonable price, and within the time needed;

16 ‘‘(5) small and small disadvantaged business

17 concerns; or

18 ‘‘(6) fair dealings and equitable relationships

19 with the private sector.

20 ‘‘(c) LIMITATIONS.—The Federal Acquisition Regu21 latory Council may not under this section waive a require22 ment that is established by statute or regulation under

23 any of the following provisions:
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1 ‘‘(1) Section 2533 of title 10, United States

2 Code (relating to limitation on procurement of goods

3 which are other than American goods).

4 ‘‘(2) Section 2631 of title 10, United States

5 Code (relating to preference to United States vessels

6 for transportation of supplies).

7 ‘‘(3) The Small Business Act (15 U.S.C. 631 et

8 seq.).

9 ‘‘(4) Section 4124 of title 18, United States

10 Code (relating to purchase of prison-made products

11 by Federal departments).

12 ‘‘(5) Title 18, United States Code, and any

13 other law imposing a criminal penalty.

14 ‘‘(6) Section 503 of the Rehabilitation Act of

15 1973 (29 U.S.C. 793) (relating to employment

16 under Federal contracts for individuals with disabil17 ities).

18 ‘‘(7) Section 1352 of title 31, United States

19 Code, popularly referred to as the ‘Byrd Amend20 ment’.

21 ‘‘(8) Section 4212 of title 38, United States

22 Code (relating to veterans’ employment emphasis

23 under Federal contracts).
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1 ‘‘(9) The Act of August 24, 1935 (40 U.S.C.

2 270a et seq.), commonly referred to as the ‘Miller

3 Act’.

4 ‘‘(10) The Act of March 3, 1931 (40 U.S.C.

5 276a et seq.), commonly referred to as the ‘Davis6 Bacon Act’.

7 ‘‘(11) Title IX of the Federal Property and Ad8 ministrative Services Act of 1949 (40 U.S.C. 541 et

9 seq.), popularly referred to as the ‘Brooks Architect10 Engineers Act’.

11 ‘‘(12) Section 111 of the Federal Property and

12 Administrative Services Act of 1949 (40 U.S.C.

13 759), popularly referred to as the ‘Brooks Automatic

14 Data Processing Act’.

15 ‘‘(13) Section 901(b) of the Merchant Marine

16 Act, 1936 (46 U.S.C. app. 1241(b)) (relating to

17 cargo preference for American vessels).

18 ‘‘(14) Title III of the Act of March 3, 1933 (41

19 U.S.C. 10a et seq.), commonly referred to as the

20 ‘Buy American Act’.

21 ‘‘(15) The Act of June 25, 1938 (41 U.S.C. 46

22 et seq.), commonly referred to as the Wagner-O‘Day

23 Act, that was revised and reenacted in the Act of

24 June 23, 1971 (85 Stat. 77), commonly referred to

25 as the ‘Javits-Wagner-O’Day Act’.
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1 ‘‘(16) The Service Contract Act of 1965 (41

2 U.S.C. 351–358).

3 ‘‘(17) Section 27 of this Act (41 U.S.C. 423),

4 other than subsection (e) of that section (relating to

5 procurement integrity).

6 ‘‘(18) Executive Order No. 11246 (or any suc7 cessor to that order), dated September 24, 1965.’’.

8 SEC. 5006. FLEXIBLE DEADLINES FOR SUBMISSION OF OF9 FERS OF COMMERCIAL ITEMS.

10 Section 18(a) of the Office of Federal Procurement

11 Policy Act (41 U.S.C. 416(a)) is amended by adding at

12 the end the following new paragraph:

13 ‘‘(4) The requirements of paragraph (3)(B) do not

14 apply to contracts for the purchase of commercial items.

15 The Administrator shall prescribe for such contracts ap16 propriate limits on the applicability of a deadline for sub17 mission of bids or proposals that is required by subsection

18 (a)(1). Such limits shall be incorporated in the Federal

19 Acquisition Regulation.’’.

20 SEC. 5007. ADDITIONAL RESPONSIBILITIES FOR ADVO21 CATES FOR COMPETITION.

22 (a) RESPONSIBILITIES OF THE ADVOCATE FOR COM23 PETITION.—Section 20(c) of the Office of Federal Pro24 curement Policy Act (41 U.S.C. 418(c)) is amended to

25 read as follows:
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1 ‘‘(c) The advocate for competition for each procuring

2 activity shall be responsible for promoting full and open

3 competition, promoting the acquisition of commercial

4 items and other nondevelopmental items, and challenging

5 barriers to such acquisition, including such barriers as un6 necessarily restrictive statements of need, unnecessarily

7 detailed specifications, and unnecessarily burdensome con8 tract clauses.’’.

9 (b) REPEAL OF SUPERSEDED PROVISION.—Section

10 28 of such Act (41 U.S.C. 424) is repealed.

11 SEC. 5008. PROVISIONS NOT AFFECTED.

12 Nothing in this title shall be construed as amending,

13 modifying, or superseding, or as intended to impair or re14 strict authorities or responsibilities under—

15 (1) section 46 of the Office of Federal Procure16 ment Policy Act, as added by section 6003 of this

17 Act;

18 (2) section 111 of the Federal Property and

19 Administrative Services Act of 1949 (40 U.S.C.

20 759), popularly referred to as the ‘‘Brooks Auto21 matic Data Processing Act’’;

22 (3) title IX of the Federal Property and Admin23 istrative Services Act of 1949 (40 U.S.C. 541 et

24 seq.), popularly referred to as the ‘‘Brooks Archi25 tect-Engineers Act’’;
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1 (4) section 8(a) of the Small Business Act (15

2 U.S.C. 637(a)) or any other provision of that Act;

3 or

4 (5) the Act of June 25, 1938 (41 U.S.C. 46–

5 48c), that was revised and reenacted in the Act of

6 June 23, 1971 (85 Stat. 77), popularly referred to

7 as the ‘‘Javits-Wagner-O’Day Act’’.

8 SEC. 5009. COMPTROLLER GENERAL REVIEW OF FEDERAL

9 GOVERNMENT USE OF MARKET RESEARCH.

10 (a) REPORT REQUIRED.—Not later than 2 years

11 after the date of the enactment of this Act, the Comptrol12 ler General of the United States shall submit to the Con13 gress a report on the use of market research by the Fed14 eral Government in support of the procurement of com15 mercial items and nondevelopmental items.

16 (b) CONTENT OF REPORT.—The report shall include

17 the following:

18 (1) A review of existing Federal Government

19 market research efforts to gather data concerning

20 commercial and other nondevelopmental items.

21 (2) A review of the feasibility of creating a Gov22 ernment-wide data base for storing, retrieving, and

23 analyzing market data, including use of existing

24 Federal Government resources.
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1 (3) Any recommendations for changes in law or

2 regulations that the Comptroller General considers

3 appropriate.

4 TITLE VI—MISCELLANEOUS

5 PROVISIONS

6 SEC. 6001. TEST PROGRAM.

7 (a) IN GENERAL.—The Administrator for Federal

8 Procurement Policy (in this section referred to as the ‘‘Ad9 ministrator’’) may conduct a program of tests of alter10 native and innovative procurement procedures. To the ex11 tent consistent with this section, such program shall be

12 conducted consistent with section 15 of the Office of Fed13 eral Procurement Policy Act (41 U.S.C. 413). No more

14 than 6 such tests shall be conducted under this authority.

15 (b) DESIGNATION OF AGENCIES.—Each test con16 ducted pursuant to subsection (a) shall be limited to not

17 more than 2 specific contracting activities in an agency

18 designated by the Administrator. Each agency so des19 ignated shall select the contracting activities participating

20 in the test with the approval of the Administrator and

21 shall designate a procurement testing official who shall be

22 responsible for the conduct and evaluation of tests within

23 that agency.

24 (c) TEST REQUIREMENTS.—Tests conducted under

25 subsection (a)—
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1 (1) shall be developed and structured by the

2 Administrator or by the agency senior procurement

3 executives designated pursuant to section 16(3) of

4 the Office of Federal Procurement Policy Act in

5 close coordination with the Administrator;

6 (2) shall be for a period of not greater than 4

7 years;

8 (3) shall be limited to specific programs of

9 agencies or specific acquisitions;

10 (4) may not include any test with a total esti11 mated life-cycle cost to the Federal Government

12 greater than $100,000,000;

13 (5) shall include—

14 (A) a test by the National Aeronautics and

15 Space Administration of simplified procurement

16 procedures for acquisitions with an estimated

17 annual total obligation of funds of $500,000 or

18 less;

19 (B) a test by the General Services Admin20 istration of expedited methods for procuring

21 automatic data processing equipment commod22 ities; and

23 (C) a test by at least one agency of

24 streamlined procedures for competition among

25 interested sources participating in the tailoring
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1 of a solicitation for the purchase of commercial

2 products; and

3 (6) shall not include any procurement the cost

4 of which is expected to exceed $5,000,000 (including

5 options).

6 (d) LIMITATION ON TOTAL VALUE OF CONTRACTS

7 UNDER PROGRAM.—

8 (1) LIMITATION.—The Administrator shall en9 sure that the total amount obligated under contracts

10 awarded pursuant to the program under this section

11 does not exceed $600,000,000.

12 (2) MONITORING.—The Administrator shall

13 monitor the value of contracts awarded pursuant to

14 the program under this section.

15 (3) PROHIBITION ON AWARDS IN EXCESS OF

16 LIMIT.—No contract may be awarded under the pro17 gram under this section if the award of the contract

18 would result in obligation of more than

19 $600,000,000 under contracts under this section.

20 (e) PROCEDURES AUTHORIZED.—Tests conducted

21 under this section may include tests of any of the following

22 procedures:

23 (1) Publication of agency needs prior to draft24 ing of a solicitation.
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1 (2) Screening of sources and competition

2 among capable vendors.

3 (3) Issuance of draft solicitations for comment.

4 (4) Streamlined solicitations, with a minimized

5 number of evaluation factors and information re6 quired from vendors, abbreviated periods for submis7 sion of offers, and page limitations on offers.

8 (5) Limitation of source selection factors to—

9 (A) cost to the Federal Government;

10 (B) past experience; and

11 (C) quality of the contents of the offer.

12 (6) Evaluation of proposals by small teams of

13 highly qualified people, limited to 30 days.

14 (7) Competition among sources of preevaluated

15 products.

16 (8) Alternative notice and publication require17 ments.

18 (9) A process in which—

19 (A) the competitive process is initiated by

20 a notice in the Commerce Business Daily syn21 opsizing the needs of the executive agency con22 ducting the test, in functional and performance

23 terms, with other specifications provided for

24 guidance only;
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1 (B) the notice invites interested sources to

2 submit information or samples showing their

3 product’s suitability for those needs (with price

4 quotations) or, if appropriate, showing the

5 sources’ technical capability, past performance,

6 product supportability, or other qualifications

7 (with appropriate consideration to rates and

8 other cost-related factors);

9 (C) contracting officials develop a request

10 for proposals (including appropriate specifica11 tions and evaluation criteria) after reviewing

12 the submittals made by interested sources and,

13 if the officials determine necessary, after con14 sultation with those sources; and

15 (D) the contract is awarded after a

16 streamlined competition limited to all sources

17 that timely provided product information in re18 sponse to the notice or, if appropriate, to those

19 sources determined most capable based on those

20 qualification-based factors included in an invita21 tion to submit information pursuant to sub22 paragraph (B).

23 (f) TEST PLAN.—Not later than 60 days before im24 plementing any test program under this section, the Ad25 ministrator shall—
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1 (1) provide a detailed test plan, including lists

2 of any regulations that are to be waived, and any

3 written determination under subsection (g)(1)(B) to

4 the Committee on Government Operations of the

5 House of Representatives and the Committee on

6 Governmental Affairs of the Senate;

7 (2) provide a copy of the plan to the appro8 priate authorizing committees of the House of Rep9 resentatives and the Senate; and

10 (3) publish the plan in the Federal Register

11 and provide an opportunity for public comment.

12 (g) WAIVER OF PROCUREMENT REGULATIONS.—

13 (1) IN GENERAL.—For purposes of a test con14 ducted under subsection (a), the Administrator may

15 waive—

16 (A) any provision of the Federal Acquisi17 tion Regulation that is not required by statute;

18 and

19 (B) any provision of the Federal Acquisi20 tion Regulation that is required by a provision

21 of law described in paragraph (2), the waiver of

22 which the Administrator determines in writing

23 to be necessary to conduct any test of any of

24 the 9 procedures described in subsection (e).
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1 (2) PROVISIONS OF LAW DESCRIBED.—The pro2 visions of law referred to in paragraph (1) are the

3 following:

4 (A) Section 3709 of the Revised Statutes

5 (41 U.S.C. 5).

6 (B) Section 3710 of the Revised Statutes

7 (41 U.S.C. 8).

8 (C) Section 3735 of the Revised Statutes

9 (41 U.S.C. 13).

10 (D) Section 310 of the Federal Property

11 and Administrative Services Act of 1949 (41

12 U.S.C. 260).

13 (E) Section 303 of the Federal Property

14 and Administrative Services Act of 1949 (41

15 U.S.C. 253).

16 (F) Section 303A of the Federal Property

17 and Administrative Services Act of 1949 (41

18 U.S.C. 253a).

19 (G) Section 303B of the Federal Property

20 and Administrative Services Act of 1949 (41

21 U.S.C. 253b).

22 (H) Section 303C of the Federal Property

23 and Administrative Services Act of 1949 (41

24 U.S.C. 253c).
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1 (I) Section 4(6) of the Office of Federal

2 Procurement Policy Act (41 U.S.C. 403(6)).

3 (J) Section 18 of the Office of Federal

4 Procurement Policy Act (41 U.S.C. 416).

5 (3) PROPOSAL FOR ADDITIONAL WAIVER.—If

6 the Administrator determines that the conduct of a

7 test requires the waiver of a law not listed in para8 graph (2) or requires approval of an estimated dollar

9 amount not permitted under subsection (c)(4), the

10 Administrator may propose legislation to authorize

11 the waiver or grant the approval. Before proposing

12 such legislation, the Administrator may provide and

13 publish a test plan as described in subsection (f). If

14 Congress does not authorize the waiver or grant the

15 approval within 120 days after the date of receipt of

16 the proposal, the proposal shall be deemed to be

17 withdrawn. A proposal not approved within such 120

18 days may be resubmitted to Congress under this

19 paragraph at any time.

20 (h) REPORTS AND REVIEWS.—

21 (1) ADMINISTRATOR.—The Administrator shall

22 report to the Congress on the results of each test

23 conducted under subsection (a).

24 (2) COMPTROLLER GENERAL.—The Comptrol25 ler General of the United States shall review each
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1 test conducted under subsection (a) and report to

2 the Congress on each test and shall report annually

3 to the Congress on the conduct of and results of all

4 tests conducted under subsection (a).

5 (i) EXPIRATION OF AUTHORITY.—The authority to

6 conduct tests under this section and to award contracts

7 under such tests shall expire on October 1, 1998. Con8 tracts entered prior to October 1, 1998, pursuant to a test

9 shall remain in effect, notwithstanding the expiration of

10 the authority to conduct the test under this section.

11 (j) PILOT PROGRAMS.—(1) The Administrator may

12 delegate to the Secretary of Defense authority to conduct

13 7 pilot programs of alternative and innovative procure14 ment procedures, including the waiver authority described

15 in paragraph (2).

16 (2) The authority delegated under paragraph (1) may

17 include authority for the Secretary of Defense—

18 (A) to apply any amendment or repeal of a pro19 vision of law made in the Federal Acquisition Re20 form Act of 1994 to the pilot programs before the

21 effective date of such amendment or repeal; and

22 (B) to apply to a procurement of noncommer23 cial items under such programs—

24 (i) any authority provided in such Act (or

25 in an amendment made by a provision of such
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1 Act) to waive a provision of law in the case of

2 commercial items, and

3 (ii) any exception applicable under such

4 Act (or an amendment made by a provision of

5 such Act) in the case of commercial items,

6 before the effective date of such provision (or amendment)

7 to the extent that the Secretary determines necessary to

8 test the application of such waiver or exception to procure9 ments of noncommercial items.

10 (3)(A) Paragraph (2) applies with respect to—

11 (i) a contract that is awarded or modified dur12 ing the period described in subparagraph (B); and

13 (ii) a contract that is awarded before the begin14 ning of such period and is to be performed (or may

15 be performed), in whole or in part, during such pe16 riod.

17 (B) The period referred to in subparagraph (A) is

18 the period that begins 45 days after the date of the enact19 ment of the Federal Acquisition Reform Act of 1994 and

20 ends on September 30, 1998.

21 SEC. 6002. STUDY OF PARTICIPATION BY CERTAIN SMALL

22 BUSINESSES IN FEDERAL PROCUREMENT.

23 (a) STUDY.—The Administrator for Federal Procure24 ment Policy shall conduct a study of—
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1 (1) the degree of participation by small busi2 nesses owned and controlled by socially and economi3 cally disadvantaged individuals in procurements con4 ducted by executive agencies, other than agencies in

5 the Department of Defense; and

6 (2) the extent of compliance by those executive

7 agencies with the goals for participation by such

8 businesses required by Office of Federal Procure9 ment Policy policy letter 91–1, relating to Govern10 ment-wide small business and small disadvantaged

11 business goals for procurement contracts.

12 (b) REPORT.—Not later than 6 months after the date

13 of the enactment of this Act, the Administrator for Fed14 eral Procurement Policy shall submit a report on the study

15 required under subsection (a) to the Committee on Gov16 ernment Operations and the Committee on Small Business

17 of the House of Representatives, and to the Committee

18 on Governmental Affairs and the Committee on Small

19 Business of the Senate. The report shall include rec20 ommendations to facilitate the provision of authority to

21 executive agencies, other than agencies in the Department

22 of Defense, to conduct procurement set asides for small

23 businesses owned and controlled by socially and economi24 cally disadvantaged individuals, and on improved outreach
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1 programs to increase the participation by such businesses

2 in procurements conducted by those executive agencies.

3 SEC. 6003. FURTHERANCE OF GOVERNMENT-WIDE CON4 TRACT GOAL FOR SMALL DISADVANTAGED

5 BUSINESSES AND CERTAIN INSTITUTIONS OF

6 HIGHER EDUCATION.

7 The Office of Federal Procurement Policy Act (41

8 U.S.C. 41 et seq.), as amended by section 5005, is further

9 amended by adding at the end the following new section:

10 ‘‘SEC. 46. FURTHERANCE OF GOVERNMENT-WIDE CON11 TRACT GOAL FOR SMALL DISADVANTAGED

12 BUSINESSES AND CERTAIN INSTITUTIONS OF

13 HIGHER EDUCATION.

14 ‘‘(a) GOAL.—(1) A goal of 5 percent of the amount

15 described in subsection (b) shall be the objective of an ex16 ecutive agency in each of fiscal years 1994 through 2000

17 for the total combined amount obligated for contracts and

18 subcontracts entered into with—

19 ‘‘(A) small business concerns, including mass

20 media and advertising firms, owned and controlled

21 by socially and economically disadvantaged individ22 uals (as such term is used in section 8(d) of the

23 Small Business Act (15 U.S.C. 637(d)) and regula24 tions issued under that section), the majority of the

25 earnings of which directly accrue to such individuals;
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1 ‘‘(B) historically Black colleges and universities,

2 including any nonprofit research institution that was

3 an integral part of such a college or university be4 fore November 14, 1986; and

5 ‘‘(C) minority institutions (as defined in section

6 1046(3) of the Higher Education Act of 1965 (20

7 U.S.C. 1135d–5(3)), which, for the purposes of this

8 section, shall include Hispanic-serving institutions

9 (as defined in section 316(b)(1) of such Act (20

10 U.S.C. 1059c(b)(1)).

11 ‘‘(2) The head of the agency shall establish a specific

12 goal within the overall 5 percent goal for the award of

13 prime contracts and subcontracts to historically Black col14 leges and universities and minority institutions in order

15 to increase the participation of such colleges and univer16 sities in the program provided for by this section.

17 ‘‘(3)(i) The Federal Acquisition Regulation (issued

18 under section 25(c)) shall provide procedures or guidelines

19 for contracting officers to set goals which executive agency

20 prime contractors that are required to submit subcontract21 ing plans under section 8(d)(4)(B) of the Small Business

22 Act (15 U.S.C. 637(d)(4)(B)) in furtherance of the agen23 cy’s program to meet the 5 percent goal specified in para24 graph (1) should meet in awarding subcontracts, including
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1 subcontracts to minority-owned media, to entities de2 scribed in that paragraph.

3 ‘‘(ii) The regulations required by clause (i) shall pro4 vide that when a contract for a major system is to be per5 formed pursuant to a teaming arrangement between two

6 or more contractors, the contracting officer shall set each

7 team member’s goal by excluding the price of the work

8 to be performed by the other team members from the cal9 culation of total planned subcontract awards.

10 ‘‘(b) AMOUNT.—The requirements of subsection (a)

11 for any fiscal year apply to the total value of all prime

12 contract and subcontract awards entered into by the exec13 utive agency for such fiscal year.

14 ‘‘(c) TYPES OF ASSISTANCE.—(1) To attain the goal

15 specified in subsection (a)(1), the head of the agency shall

16 provide technical assistance to the entities referred to in

17 that subsection and, in the case of historically Black col18 leges and universities and minority institutions, shall also

19 provide infrastructure assistance.

20 ‘‘(2) Technical assistance provided under this section

21 shall include information about the program, advice about

22 the agency’s procurement procedures, instruction in prep23 aration of proposals, and other such assistance as the

24 agency head considers appropriate. If the resources of the

25 executive agency are inadequate to provide such assist-
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1 ance, the agency head may enter into contracts with mi2 nority private sector entities with experience and expertise

3 in the design, development, and delivery of technical as4 sistance services to eligible individuals, business firms and

5 institutions, acquisition agencies, and prime contractors.

6 Agency contracts with such entities shall be awarded an7 nually, based upon, among other things, the number of

8 minority small business concerns, historically Black col9 leges and universities, and minority institutions that each

10 such entity brings into the program.

11 ‘‘(3) The agency head shall, to the maximum extent

12 practical, carry out programs under this section at col13 leges, universities, and institutions that agree to bear a

14 substantial portion of the cost associated with the pro15 grams.

16 ‘‘(d) COMPETITIVE PROCEDURES AND ADVANCE

17 PAYMENTS.—To attain the goal of subsection (a):

18 ‘‘(1)(A) The head of the agency shall—

19 ‘‘(i) ensure that substantial progress is

20 made in increasing awards of agency contracts

21 to entities described in subsection (a)(1);

22 ‘‘(ii) exercise his utmost authority, re23 sourcefulness, and diligence; and
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1 ‘‘(iii) actively monitor and assess the

2 progress of prime contractors of the agency in

3 attaining such goal.

4 ‘‘(B) In making the assessment under subpara5 graph (A)(iii), the agency head shall evaluate the ex6 tent to which use of the authority provided in para7 graphs (2) and (3) and compliance with the require8 ment in paragraph (4) is effective for facilitating the

9 attainment of the goal.

10 ‘‘(2) To the extent practicable and when nec11 essary to facilitate achievement of the 5 percent goal

12 described in subsection (a), the agency head shall

13 make advance payments under section 36 of this Act

14 to contractors described in subsection (a). The Fed15 eral Acquisition Regulation shall provide guidance to

16 contracting officers for making advance payments to

17 entities described in subsection (a)(1) under such

18 section.

19 ‘‘(3) To the extent practicable and when nec20 essary to facilitate achievement of the 5 percent goal

21 described in subsection (a), the agency head may

22 enter into contracts using less than full and open

23 competitive procedures and partial set asides for en24 tities described in subsection (a)(1), but shall pay a

25 price not exceeding fair market cost by more than
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1 10 percent in payment per contract to contractors or

2 subcontractors described in subsection (a). The

3 agency head shall adjust the percentage specified in

4 the preceding sentence for any industry category if

5 available information clearly indicates that

6 nondisadvantaged small business concerns in such

7 industry category are generally being denied a rea8 sonable opportunity to compete for contracts because

9 of the use of that percentage in the application of

10 this paragraph.

11 ‘‘(4) To the extent practicable, the agency head

12 shall maximize the number of minority small busi13 ness concerns, historically Black colleges and univer14 sities, and minority institutions participating in the

15 program.

16 ‘‘(5) The Federal Acquisition Regulation shall

17 provide for the following:

18 ‘‘(A) Procedures or guidance for contract19 ing officers to provide incentives for prime con20 tractors referred to in subsection (a)(3) to in21 crease subcontractor awards to entities de22 scribed in subsection (a)(1).

23 ‘‘(B) A requirement that contracting offi24 cers emphasize the award of contracts to enti25 ties described in subsection (a)(1) in all indus-
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1 try categories, including those categories in

2 which such entities have not traditionally domi3 nated.

4 ‘‘(C) Guidance to executive agency person5 nel on the relationship among the following pro6 grams:

7 ‘‘(i) The program implementing this

8 section.

9 ‘‘(ii) The program established under

10 section 8(a) of the Small Business Act (15

11 U.S.C. 637(a)).

12 ‘‘(iii) The small business set-aside

13 program established under section 15(a) of

14 the Small Business Act (15 U.S.C.

15 644(a)).

16 ‘‘(D) With respect to an agency procure17 ment which is reasonably likely to be set aside

18 for entities described in subsection (a)(1), a re19 quirement that (to the maximum extent prac20 ticable) the procurement be designated as such

21 a set-aside before the solicitation for the pro22 curement is issued.

23 ‘‘(E) Policies and procedures which, to the

24 maximum extent practicable, will ensure that

25 current levels in the number or dollar value of
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1 contracts awarded under the program estab2 lished under section 8(a) of the Small Business

3 Act (15 U.S.C. 637(a)) and under the small

4 business set-aside program established under

5 section 15(a) of the Small Business Act (15

6 U.S.C. 644(a)) are maintained and that every

7 effort is made to provide new opportunities for

8 contract awards to eligible entities, in order to

9 meet the goal of subsection (a).

10 ‘‘(F) Implementation of this section in a

11 manner which will not alter the procurement

12 process under the program established under

13 section 8(a) of the Small Business Act (15

14 U.S.C. 637(a)).

15 ‘‘(G) A requirement that one factor used in

16 evaluating the performance of a contracting of17 ficer be the ability of the officer to increase con18 tract awards to entities described in subsection

19 (a)(1).

20 ‘‘(H) Increased technical assistance to en21 tities described in subsection (a)(1).

22 ‘‘(e) PENALTIES AND REGULATIONS RELATING TO

23 STATUS.—(1) Whoever for the purpose of securing a con24 tract or subcontract under subsection (a) misrepresents

25 the status of any concern or person as a small business
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1 concern owned and controlled by a minority (as described

2 in subsection (a)), shall be punished by a fine of not less

3 than $10,000, or by imprisonment for not more than one

4 year, or both.

5 ‘‘(2) The Federal Acquisition Regulation shall pro6 hibit awarding a contract under this section to an entity

7 described in subsection (a)(1) unless the entity agrees to

8 comply with the requirements of section 15(o)(1) of the

9 Small Business Act (15 U.S.C. 644(o)(1)).

10 ‘‘(f) DETERMINATION BY AGENCY HEAD.—Under

11 procedures prescribed in the Federal Acquisition Regula12 tion, a person may request the agency head to determine

13 whether the use of small disadvantaged business set asides

14 by a contracting activity of the agency has caused a par15 ticular industry category to bear a disproportionate share

16 of the contracts awarded to attain the goal established for

17 that contracting activity for the purposes of this section.

18 Upon making a determination that a particular industry

19 category is bearing a disproportionate share, the agency

20 head shall take appropriate actions to limit the contracting

21 activity’s use of set asides in awarding contracts in that

22 particular industry category.

23 ‘‘(g) COMPLIANCE WITH SUBCONTRACTING PLAN

24 REQUIREMENTS.—(1) The Federal Acquisition Regulation

25 shall contain regulations to ensure that potential contrac-
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1 tors submitting sealed bids or competitive proposals to the

2 executive agency for procurement contracts to be awarded

3 under the program provided for by this section are comply4 ing with applicable subcontracting plan requirements of

5 section 8(d) of the Small Business Act (15 U.S.C. 637(d)).

6 ‘‘(2) The regulations required by paragraph (1) shall

7 ensure that, with respect to a sealed bid or competitive

8 proposal for which the bidder or offeror is required to ne9 gotiate or submit a subcontracting plan under section 8(d)

10 of the Small Business Act (15 U.S.C. 637(d)), the sub11 contracting plan shall be a factor in evaluating the bid

12 or proposal.

13 ‘‘(h) ANNUAL REPORT.—(1) Not later than Decem14 ber 15 of each year, the Administrator shall submit to

15 Congress a report on the progress of executive agencies

16 toward attaining the goal of subsection (a) during the pre17 ceding fiscal year.

18 ‘‘(2) The report required under paragraph (1) shall

19 include the following:

20 ‘‘(A) A full explanation of any progress toward

21 attaining the goal of subsection (a).

22 ‘‘(B) A plan to achieve the goal, if necessary.

23 ‘‘(3) The report required under paragraph (1) shall

24 also include the following:
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1 ‘‘(A) The aggregate differential between the fair

2 market price of all contracts awarded pursuant to

3 subsection (d)(3) and the estimated fair market

4 price of all such contracts had such contracts been

5 entered into using full and open competitive proce6 dures.

7 ‘‘(B) An analysis of the impact that subsection

8 (a) shall have on the ability of small business con9 cerns not owned and controlled by socially and eco10 nomically disadvantaged individuals to compete for

11 contracts with the executive agency.

12 ‘‘(C) A description of the percentage of con13 tracts (actions), the total dollar amount (size of ac14 tion), and the number of different entities relative to

15 the attainment of the goal of subsection (a), sepa16 rately for Black Americans, Native Americans, His17 panic Americans, Asian Pacific Americans, and

18 other minorities.

19 ‘‘(D) A detailed description of the infrastruc20 ture assistance provided under subsection (c) during

21 the preceding fiscal year and of the plans for provid22 ing such assistance during the fiscal year in which

23 the report is submitted.

24 ‘‘(i) RELATIONSHIP TO OTHER GOALS.—This section

25 shall not be construed as amending, modifying, or super-
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1 seding any other provision of law establishing a goal or

2 requirement for an agency to obligate 5 percent or more

3 of the total value of all prime contract and subcontract

4 awards entered into by the agency for a fiscal year with

5 any entity described in subsection (a)(1).

6 ‘‘(j) EFFECTIVE DATE.—This section applies to each

7 of fiscal years 1994 through 2000.’’.

8 SEC. 6004. EDUCATION AND TRAINING.

9 Section 6(d)(5) of the Office of Federal Procurement

10 Policy Act (41 U.S.C. 405(d)(4)) is amended—

11 (1) by striking out ‘‘and’’ at the end of sub12 paragraph (A);

13 (2) by striking out the period at the end of sub14 paragraph (B) and inserting in lieu thereof ‘‘; and’’;

15 and

16 (3) by adding at the end the following new sub17 paragraph:

18 ‘‘(C) establish policies and procedures for

19 the establishment and implementation of edu20 cation and training programs authorized by this

21 Act, including the establishment and implemen22 tation of a sensitivity training course, in con23 junction with the General Services Administra24 tion, for critical procurement personnel de25 signed to increase the participation of small
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1 business concerns owned and controlled by so2 cially and economically disadvantaged individ3 uals, women, and other minorities in procure4 ment activities conducted by an executive agen5 cy.’’.

6 SEC. 6005. SENSE OF CONGRESS ON NEGOTIATED RULE7 MAKING.

8 (a) FINDINGS.—The Congress finds the following:

9 (1) The use of negotiated rulemaking or similar

10 policy discussion group techniques is an appropriate

11 tool for—

12 (A) fostering effective implementation of,

13 and compliance with, laws and regulations;

14 (B) avoiding litigation; and

15 (C) achieving more productive and equi16 table relationships between the Federal Govern17 ment and the regulated segments of the private

18 sector.

19 (2) The use of negotiated rulemaking or similar

20 techniques in Federal procurement regulations could

21 be appropriate given the extreme complexity and in22 tricate interactions between buyer and seller in Fed23 eral procurements.

24 (b) SENSE OF CONGRESS.—It is the sense of Con25 gress that, in prescribing acquisition regulations, the Fed-
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1 eral Acquisition Regulatory Council should consider using

2 negotiated rulemaking procedures in accordance with sec3 tions 561 through 570 of title 5, United States Code, or

4 similar techniques intended to achieve the benefits de5 scribed in subsection (a)(1).

6 SEC. 6006. VENDOR AND EMPLOYEE EXCELLENCE AWARDS.

7 Section 6(d) of the Office of Federal Procurement

8 Policy Act (41 U.S.C. 405(d)), as amended by section

9 3012(b), is further amended—

10 (1) by striking out the period at the end of

11 paragraph (10) (as redesignated by section

12 3012(b)(2)) and inserting in lieu thereof a semi13 colon; and

14 (2) by adding at the end the following new

15 paragraphs:

16 ‘‘(11) providing for a Government-wide award

17 to recognize and promote vendor excellence; and

18 ‘‘(12) providing for a Government-wide award

19 to recognize and promote excellence in officers and

20 employees of the Federal Government serving in pro21 curement-related positions.’’.

22 SEC. 6007. TECHNICAL AND CLERICAL AMENDMENTS.

23 (a) TABLE OF CONTENTS AMENDMENT.—Section 1

24 of the Office of Federal Procurement Policy Act (41

25 U.S.C. 401 note) is amended to read as follows:
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1 ‘‘SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 ‘‘(a) SHORT TITLE.—This Act may be cited as the

3 ‘Office of Federal Procurement Policy Act’.

4 ‘‘(b) TABLE OF CONTENTS.—The table of contents

5 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.
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‘‘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.’’.

1 (b) AMENDMENTS FOR STYLISTIC CONSISTENCY.—

2 (1) OFFICE OF FEDERAL PROCUREMENT POL3 ICY ACT.—The Office of Federal Procurement Policy

4 Act (41 U.S.C. 401 et seq.) is amended so that the

5 section designation and section heading of each sec6 tion of such Act is in the same form and typeface

7 as the section designation and heading of this sec8 tion.

9 (2) FEDERAL PROPERTY AND ADMINISTRATIVE

10 SERVICES ACT OF 1949.—The Federal Property and

11 Administrative Services Act of 1949 (41 U.S.C. 471

12 et seq.) is amended so that the section designation

13 and section heading of each section of such Act is

14 in the same form and typeface as the section des15 ignation and heading of this section.

16 TITLE VII—EFFECTIVE DATES

17 AND REGULATIONS

18 SEC. 7001. EFFECTIVE DATES.

19 (a) IN GENERAL.—Except as provided in subsection

20 (b), this Act and the amendments made by this Act shall

21 apply with respect to any contract for which a solicitation

22 for bid or proposal is issued after—
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1 (1) 30 days have expired after the issuance in

2 final form of revisions to the Federal Acquisition

3 Regulation pursuant to section 7002; or

4 (2) 180 days have expired after the date of the

5 enactment of this Act;

6 whichever is earlier.

7 (b) SPECIFIC EFFECTIVE DATE.—Subtitle C of title

8 I of this Act, and the amendments made by such subtitle

9 (relating to procurement protests), shall apply with re10 spect to any protest filed after the expiration of the 90-

11 day period beginning on the date of the enactment of this

12 Act.

13 SEC. 7002. REGULATIONS.

14 Not later than 150 days after the date of the enact15 ment of this Act, the Federal Acquisition Regulation (re16 ferred to in section 25(c) of the Office of Federal Procure17 ment Policy Act (41 U.S.C. 421(c))) shall be revised, in

18 final form, to implement this Act and the amendments

19 made by this Act.

20 SEC. 7003. EVALUATION BY THE COMPTROLLER GENERAL.

21 (a) EVALUATION RELATING TO ISSUANCE OF REGU22 LATIONS.—Not later than December 1, 1995, the Comp23 troller General shall submit to the committees referred to

24 in subsection (c) a report evaluating compliance with the
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1 requirements in section 7002, relating to the issuance of

2 implementing regulations.

3 (b) EVALUATION OF IMPLEMENTATION OF REGULA4 TIONS.—Not later than December 1, 1996, the Comptrol5 ler General shall submit to the committees referred to in

6 subsection (c) a report evaluating the effectiveness of the

7 regulations implementing this Act in streamlining the ac8 quisition system and fulfilling the other purposes of this

9 Act.

10 (c) COMMITTEES DESIGNATED TO RECEIVE THE RE11 PORTS.—The Comptroller General shall submit the re12 ports required by this section to the Committees on Armed

13 Services and on Governmental Affairs of the Senate and

14 the Committees on Small Business on Government Oper15 ations of the House of Representatives.

16 SEC. 7004. DATA COLLECTION THROUGH THE FEDERAL

17 PROCUREMENT DATA SYSTEM.

18 (a) DATA COLLECTION REQUIRED.—The Federal

19 Procurement Data System described in section 6(d)(4)(A)

20 of the Office of Federal Procurement Policy Act (41

21 U.S.C. 405(d)(4)(A)) shall be modified to collect from con22 tracts in excess of the simplified acquisition threshold data

23 pertaining to the following matters:

24 (1) Contract awards made pursuant to competi25 tions conducted pursuant to section 46 of the Office
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1 of Federal Procurement Policy Act, as added by sec2 tion 6003.

3 (2) Awards to business concerns owned and

4 controlled by women.

5 (3) Number of offers received in response to a

6 solicitation.

7 (4) Task order contracts.

8 (5) Contracts for the acquisition of commercial

9 items.

10 (b) DEFINITION.—In this section, the term ‘‘sim11 plified acquisition threshold’’ has the meaning given such

12 term in section 4A of the Office of Federal Procurement

13 Policy Act (41 U.S.C. 403).

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