I

104TH CONGRESS

1ST SESSION H. R. 1795

To improve Government procurement procedures.

IN THE HOUSE OF REPRESENTATIVES

JUNE 8, 1995

Mrs. COLLINS of Illinois introduced the following bill; which was referred to

the Committee on Government Reform and Oversight, and in addition to

the Committee on National Security, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions

as fall within the jurisdiction of the committee concerned

A BILL

To improve Government procurement procedures.

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 AND TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Federal Acquisition Improvement Reform Act of 1995’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title and table of contents.

Sec. 2. Competition provisions.

Sec. 3. Simplified procedures for purchases of commercial items.

Sec. 4. Disclosing and obtaining contractor bid or proposal information or

source selection information.

Sec. 5. Value engineering requirements for Federal agencies.
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1 SEC. 2. COMPETITION PROVISIONS.

2 (a) CONFERENCE BEFORE SUBMISSION OF BIDS OR

3 PROPOSALS.—(1) Section 2305(a) of title 10, United

4 States Code, is amended by adding at the end the follow5 ing paragraph:

6 ‘‘(6) To the extent practicable, for each procurement

7 of property or services by an agency, the head of the agen8 cy shall provide for a conference on the procurement to

9 be held for anyone interested in submitting a bid or pro10 posal in response to the solicitation for the procurement.

11 The purpose of the conference shall be to inform potential

12 bidders and offerors of the needs of the agency and the

13 qualifications considered necessary by the agency to com14 pete successfully in the procurement.’’.

15 (2) Section 303A of the Federal Property and Admin16 istrative Services Act of 1949 (41 U.S.C. 253a) is amend17 ed by adding at the end the following new subsection:

18 ‘‘(f) To the extent practicable, for each procurement

19 of property or services by an agency, an executive agency

20 shall provide for a conference on the procurement to be

21 held for anyone interested in submitting a bid or proposal

22 in response to the solicitation for the procurement. The

23 purpose of the conference shall be to inform potential bid24 ders and offerors of the needs of the executive agency and

25 the qualifications considered necessary by the executive

26 agency to compete successfully in the procurement.’’.
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1 (b) DESCRIPTION OF SOURCE SELECTION PLAN IN

2 SOLICITATION.—(1) Section 2305(a) of title 10, United

3 States Code, is further amended in paragraph (2)—

4 (A) by striking out ‘‘and’’ after the semicolon

5 at the end of subparagraph (A);

6 (B) by striking out the period at the end of

7 subparagraph (B) and inserting in lieu thereof ‘‘;

8 and’’; and

9 (C) by adding at the end the following new sub10 paragraph:

11 ‘‘(C) a description, in as much detail as is prac12 ticable, of the source selection plan of the agency, or

13 a notice that such plan is available upon request.’’.

14 (2) Section 303A of the Federal Property and Admin15 istrative Services Act of 1949 (41 U.S.C. 253a) is further

16 amended in subsection (b)—

17 (A) by striking out ‘‘and’’ after the semicolon

18 at the end of paragraph (1);

19 (B) by striking out the period at the end of

20 paragraph (2) and inserting in lieu thereof ‘‘; and’’;

21 and

22 (C) by adding at the end the following new

23 paragraph:

24 ‘‘(3) a description, in as much detail as is prac25 ticable, of the source selection plan of the executive
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1 agency, or a notice that such plan is available upon

2 request.’’.

3 (c) DISCUSSIONS NOT NECESSARY WITH EVERY

4 OFFEROR.—(1) Section 2305(b)(4)(A)(i) of title 10, Unit5 ed States Code, is amended by inserting before the semi6 colon the following: ‘‘and provided that discussions need

7 not be conducted with an offeror merely to permit that

8 offeror to submit a technically acceptable revised pro9 posal’’.

10 (2) Section 303B(d)(1)(A) of the Federal Property

11 and Administrative Services Act of 1949 (41 U.S.C. 253b)

12 is amended by inserting before the semicolon the following:

13 ‘‘and provided that discussions need not be conducted with

14 an offeror merely to permit that offeror to submit a tech15 nically acceptable revised proposal’’.

16 (d) PRELIMINARY ASSESSMENTS OF COMPETITIVE

17 PROPOSALS.—(1) Section 2305(b)(2) of title 10, United

18 States Code, is amended by adding at the end the follow19 ing: ‘‘With respect to competitive proposals, the head of

20 the agency may make a preliminary assessment of a pro21 posal received, rather than a complete evaluation of the

22 proposal, and may eliminate the proposal from further

23 consideration if the head of the agency determines the pro24 posal has no chance for contract award.’’.
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1 (2) Section 303B of the Federal Property and Ad2 ministrative Services Act of 1949 (41 U.S.C. 253b) is

3 amended by adding at the end the following: ‘‘With respect

4 to competitive proposals, the head of the agency may make

5 a preliminary assessment of a proposal received, rather

6 than a complete evaluation of the proposal, and may elimi7 nate the proposal from further consideration if the head

8 of the agency determines the proposal has no chance for

9 contract award.’’.

10 (e) FEDERAL ACQUISITION REGULATION.—The Fed11 eral Acquisition Regulation shall be revised to reflect the

12 amendments made by subsections (a), (b), (c), and (d).

13 SEC. 3. SIMPLIFIED PROCEDURES FOR PURCHASES OF

14 COMMERCIAL ITEMS.

15 (a) ARMED SERVICES ACQUISITIONS.—Subsection

16 (g) of section 2304 of title 10, United States Code, is

17 amended to read as follows:

18 ‘‘(g) SIMPLIFIED PROCEDURES.—(1) In order to pro19 mote efficiency and economy in contracting and to avoid

20 unnecessary burdens for agencies and contractors, the

21 Federal Acquisition Regulation shall provide for special

22 simplified procedures for purchases of commercial items

23 and for purchases of property and services for amounts

24 not greater than the simplified acquisition threshold.
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1 ‘‘(2) A proposed purchase or contract for an amount

2 above the simplified acquisition threshold may not be di3 vided into several purchases or contracts for lesser

4 amounts in order to use the simplified procedures required

5 by paragraph (1).

6 ‘‘(3) In using simplified procedures, the head of an

7 agency shall ensure that competition is obtained to the ex8 tent practicable consistent with the particular Government

9 requirement.

10 ‘‘(4) In the case of a purchase of commercial items,

11 if the purchase or contract is for an amount in excess of

12 the simplified acquisition threshold, the head of the agency

13 shall justify in writing the use of simplified procedures

14 under this subsection.’’.

15 (b) CIVILIAN AGENCY ACQUISITIONS.—Subsection

16 (g) of section 303 of the Federal Property Administrative

17 Services Act of 1949 (41 U.S.C. 253) is amended to read

18 as follows:

19 ‘‘(g) SIMPLIFIED PROCEDURES.—(1) In order to pro20 mote efficiency and economy in contracting and to avoid

21 unnecessary burdens for agencies and contractors, the

22 Federal Acquisition Regulation shall provide for special

23 simplified procedures for purchases of commercial items

24 and for purchases of property and services for amounts

25 not greater than the simplified acquisition threshold.
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1 ‘‘(2)(A) The Administrator of General Services shall

2 prescribe regulations that provide special simplified proce3 dures for acquisitions of leasehold interests in real prop4 erty at rental rates that do not exceed the simplified acqui5 sition threshold.

6 ‘‘(B) For purposes of subparagraph (A), the rental

7 rate or rates under a multiyear lease do not exceed the

8 simplified acquisition threshold if the average annual

9 amount of the rent payable for the period of the lease does

10 not exceed the simplified acquisition threshold.

11 ‘‘(3) A proposed purchase or contract or for an

12 amount above the simplified acquisition threshold may not

13 be divided into several purchases or contracts for lesser

14 amounts in order to use the simplified procedures required

15 by paragraph (1).

16 ‘‘(4) In using simplified procedures, an executive

17 agency shall ensure that competition is obtained to the ex18 tent practicable consistent with the particular Government

19 requirement.

20 ‘‘(5) In the case of a purchase of commercial items,

21 if the purchase or contract is for an amount in excess of

22 the simplified acquisition threshold, the executive agency

23 shall justify in writing the use of simplified procedures

24 under this subsection.’’.
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1 SEC. 4. DISCLOSING AND OBTAINING CONTRACTOR BID OR

2 PROPOSAL INFORMATION OR SOURCE SE3 LECTION INFORMATION.

4 (a) AMENDMENT OF PROCUREMENT INTEGRITY PRO5 VISION.—Section 27 of the Office of Federal Procurement

6 Policy Act (41 U.S.C. 423) is amended—

7 (1) by repealing subsections (a) through (e) and

8 (g) through (p);

9 (2) in subsection (f), by striking out the sub10 section heading and redesignating the subsection as

11 subsection (i);

12 (3) by amending the section heading to read as

13 follows:

14 ‘‘SEC. 27. DISCLOSING AND OBTAINING CONTRACTOR BID

15 OR PROPOSAL INFORMATION OR SOURCE SE16 LECTION INFORMATION AND RESTRICTIONS

17 RESULTING FROM PROCUREMENT ACTIVI18 TIES OF PROCUREMENT OFFICIALS.’’;

19 and

20 (4) by inserting before subsection (i) (as so re21 designated) the following:

22 ‘‘(a) A present or former officer or employee of the

23 United States, or a person who is acting or has acted for

24 or on behalf of or who is advising or has advised the

25 United States with respect to a Federal agency procure26 ment and who—
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1 ‘‘(1) by virtue of that office, employment, or re2 lationship has or had access to contractor bid or pro3 posal information or source selection information,

4 and

5 ‘‘(2) other than as provided by law, knowingly

6 discloses that information before the award of a

7 Federal agency procurement contract to which the

8 information relates, is subject to the penalties and

9 administrative actions set forth in subsection (d).

10 ‘‘(b) Whoever, other than as provided by law, know11 ingly obtains contractor bid or proposal information or

12 source selection information before the award of a Federal

13 agency procurement contract to which the information re14 lates, is subject to the penalties and administrative actions

15 set forth in subsection (d).

16 ‘‘(c) Whoever, other than as provided by law, know17 ingly violates the terms of a protective order, issued by

18 the Comptroller General or the board of contract appeals

19 of the General Services Administration in connection with

20 a protest against the award or proposed award of a Fed21 eral agency procurement contract, by disclosing or obtain22 ing contractor bid or proposal information or source selec23 tion information is subject to the penalties and adminis24 trative actions set forth in subsection (d).
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1 ‘‘(d) The penalties and administrative actions for an

2 offense under subsection (a), (b), or (c), are as follows:

3 ‘‘(1) CRIMINAL PENALTIES.—

4 ‘‘(A) Whoever engages in the conduct con5 stituting the offense shall be imprisoned for not

6 more than one year or fined in the amount set

7 forth in section 3571 of title 18, United States

8 Code, or both.

9 ‘‘(B) Whoever engages in the conduct con10 stituting the offense for the purpose of either—

11 ‘‘(i) exchanging the information cov12 ered by subsections (a), (b), and (c), for

13 anything of value, or

14 ‘‘(ii) obtaining or giving anyone a

15 competitive advantage in the award of a

16 Federal agency procurement contract, shall

17 be imprisoned for not more than 15 years

18 or fined in the amount set forth in section

19 3571 of title 18, United States Code, or

20 both.

21 ‘‘(2) CIVIL PENALTIES.—The Attorney General

22 may bring a civil action in the appropriate United

23 States district court against any person who engages

24 in conduct constituting an offense under subsection

25 (a), (b), or (c). Upon proof of such conduct by a
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1 preponderance of the evidence, the person is subject

2 to a civil penalty. An individual who engages in such

3 conduct is subject to a civil penalty of not more than

4 $50,000 for each violation plus twice the amount of

5 compensation which the individual received or of6 fered for the prohibited conduct. An organization

7 that engages in such conduct is subject to a civil

8 penalty of not more than $500,000 for each violation

9 plus twice the amount of compensation which the or10 ganization received or offered for the prohibited con11 duct.

12 ‘‘(3) Administrative actions. If a Federal agen13 cy receives information that a contractor or a person

14 has engaged in conduct constituting an offense

15 under subsection (a), (b), or (c), the Federal agency

16 shall consider one or more of the following actions,

17 as appropriate:

18 ‘‘(A) Canceling the Federal agency pro19 curement when a contract has not been award20 ed;

21 ‘‘(B) Declaring void and rescinding a con22 tract in relation to which there has been ei23 ther—

24 ‘‘(i) a conviction for an offense under

25 subsection (a), (b), or (c), committed by
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1 the contractor or someone acting for the

2 contractor, or

3 ‘‘(ii) a determination by the head of

4 the agency based upon a preponderance of

5 the evidence that the contractor or some6 one acting for the contractor has engaged

7 in such conduct.

8 If such action is taken, the United States is en9 titled to recover in addition to any penalty pre10 scribed by law, the amount expended under the

11 contract;

12 ‘‘(C) Initiating suspension or debarment

13 proceedings for the protection of the Govern14 ment in accordance with procedures in the Fed15 eral Acquisition Regulation. In this regard, en16 gaging in conduct constituting an offense under

17 subsection (a), (b), or (c), affects the present

18 responsibility of a Government contractor or

19 subcontractor; or

20 ‘‘(D) Initiating adverse personnel action,

21 pursuant to the procedures in chapter 75 of

22 title 5, United States Code, or other applicable

23 law or regulation.

24 ‘‘(e) For purposes of this section:
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1 ‘‘(1) The term ‘contracting officer’ means a

2 person who, by appointment in accordance with ap3 plicable regulations, has the authority to enter a

4 Federal agency procurement contract on behalf of

5 the Government and to make determinations and

6 findings with respect to such a contract.

7 ‘‘(2) The term ‘contractor bid or proposal infor8 mation’ means the following information submitted

9 to a Federal agency as part of or in connection with

10 a bid or proposal to enter into a Federal agency pro11 curement contract, if that information has not been

12 previously made available to the public or disclosed

13 publicly;

14 ‘‘(A) Cost or pricing data;

15 ‘‘(B) Indirect costs and direct labor rates;

16 ‘‘(C) Proprietary information about manu17 facturing processes, operations, or techniques

18 marked by the contractor in accordance with

19 applicable law or regulation; or

20 ‘‘(D) Information marked by the contrac21 tor as ‘contractor bid or proposal information,’

22 in accordance with applicable law or regulation.

23 ‘‘(3) The term ‘Federal agency’ has the mean24 ing given that term in section 3 of the Federal Prop-
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1 erty and Administrative Services Act (40 U.S.C.

2 472).

3 ‘‘(4) The term ‘Federal agency procurement’

4 means the competitive acquisition by contract of

5 supplies or services (including construction) from

6 non-Federal sources by a Federal agency using ap7 propriated funds.

8 ‘‘(5) The term ‘protest’ means a written objec9 tion by an interested party to the award or proposed

10 award of a Federal agency procurement contract,

11 pursuant to section 111 of the Federal Property and

12 Administrative Services Act (40 U.S.C. 759) or sub13 chapter V of chapter 35 of title 31, United States

14 Code.

15 ‘‘(6) The term ‘source selection information’

16 means the following information prepared for use by

17 a Federal agency for the purpose of evaluating a bid

18 or proposal to enter into a Federal agency procure19 ment contract, if that information has not been pre20 viously made available to the public or disclosed pub21 licly:

22 ‘‘(A) Bid prices submitted in response to a

23 Federal agency solicitation for sealed bids or

24 lists of those bid prices prior to public bid open25 ing;
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1 ‘‘(B) Proposed costs or prices submitted in

2 response to a Federal agency solicitation or lists

3 of those proposed costs or prices;

4 ‘‘(C) Source selection plans;

5 ‘‘(D) Technical evaluation plans;

6 ‘‘(E) Technical evaluations of proposals;

7 ‘‘(F) Cost or price evaluations of propos8 als;

9 ‘‘(G) Competitive range determinations

10 which identify proposals that have a reasonable

11 chance of being selected for award of a con12 tract;

13 ‘‘(H) Rankings of bids, proposals, or com14 petitors;

15 ‘‘(I) The reports and evaluations of source

16 selection panels or boards or advisory councils;

17 or

18 ‘‘(J) Other information marked as ‘source

19 selection information’ based upon a case-by-case

20 determination by the head of the agency, his

21 designee, or the contracting officer that its dis22 closure would jeopardize the integrity or suc23 cessful completion of the Federal agency pro24 curement to which the information relates.
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1 ‘‘(f) No person may file a protest against the award

2 or proposed award of a Federal agency procurement con3 tract alleging an offense under subsection (a), (b), or (c),

4 of this section, nor may the Comptroller General or the

5 board of contract appeals of the General Services Adminis6 tration consider such an allegation in deciding such a pro7 test, unless that person reported information to the Fed8 eral agency responsible for the procurement that he be9 lieved constituted evidence of the offense no later than ten

10 working days after he first discovered the possible offense.

11 ‘‘(g) This section does not—

12 ‘‘(1) restrict the disclosure of information to or

13 its receipt by any person or class of persons author14 ized, in accordance with applicable agency regula15 tions or procedures, to receive that information;

16 ‘‘(2) restrict a contractor from disclosing its

17 own bid or proposal information or the recipient

18 from receiving that information;

19 ‘‘(3) restrict the disclosure or receipt of infor20 mation relating to the Federal agency procurement

21 after it has been canceled by the Federal agency

22 prior to contract award unless the Federal agency

23 plans on resuming the procurement;

24 ‘‘(4) authorize the withholding of information

25 from nor restrict its receipt by the Congress, a com-
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1 mittee or subcommittee thereof, the Comptroller

2 General, a Federal agency, or an Inspector General

3 of a Federal agency;

4 ‘‘(5) authorize the withholding of information

5 from nor restrict its receipt by the Court of Federal

6 Claims, any board of contract appeals of a Federal

7 agency or the Comptroller General in the course of

8 a protest against the award or proposed award of a

9 Federal agency procurement contract;

10 ‘‘(6) prohibit individual meetings between an

11 agency employee and a competitor for or recipient of

12 a contract or subcontract under a Federal agency

13 procurement, provided that unauthorized disclosure

14 or receipt of contractor bid or proposal information

15 or source selection information does not occur; or

16 ‘‘(7) limit the applicability of the requirements,

17 sanctions, contract penalties, and remedies estab18 lished under any other law or regulation.

19 ‘‘(h) This section does not apply to the conduct of

20 a Federal agency procurement for an amount not greater

21 than the simplified acquisition threshold as defined in sec22 tion 4(11).’’.

23 (b) REGULATIONS AND GUIDELINES.—Government24 wide regulations and guidelines deemed appropriate to

25 carry out this section shall be issued in the Federal Acqui-
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1 sition Regulation by the Department of Defense, the Gen2 eral Services Administration, and the National Aero3 nautics and Space Administration, in coordination with

4 the Federal Acquisition Regulatory Council.

5 (c) REPEAL.—Subsection 32(c) of the Office of Fed6 eral Procurement Policy Act (41 U.S.C. 28(c)) is repealed.

7 (d) CONFORMING AMENDMENT.—Section 32 of the

8 Office of Federal Procurement Policy Act is amended by

9 redesignating subsections (d), (e), (f), and (g) as sub10 sections (c), (d), (e), and (f), respectively.

11 SEC. 5. VALUE ENGINEERING REQUIREMENTS FOR FED12 ERAL AGENCIES.

13 (a) IN GENERAL.—Federal agencies shall apply value

14 engineering consistent with subsection (b)(2) to, at a mini15 mum, identify and implement opportunities to reduce cap16 ital and operation costs and improve and maintain opti17 mum quality of construction, administrative, program, ac18 quisition, and grant projects. The head of each Federal

19 agency shall require senior management personnel to es20 tablish and maintain value engineering procedures and

21 processes. Such procedures and processes shall, at a mini22 mum—

23 (1) utilize qualified value engineering personnel

24 consistent with paragraphs (1) and (4) of subsection

25 (b);
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1 (2) provide for the aggressive and systematic

2 development and maintenance of the most effective,

3 efficient, and economical arrangement for conduct4 ing the work of the agency; and

5 (3) provide a sound basis for the reporting of

6 accomplishments to the Office of Management and

7 Budget, the President, the Congress, and the public.

8 (b) AGENCY RESPONSIBILITIES.—To ensure that

9 systemic value engineering improvements are achieved,

10 each Federal agency shall, at a minimum, carry out the

11 following:

12 (1) Designate a senior management official with

13 a significant, well-documented background in value

14 engineering as the value engineering manager within

15 the agency, to oversee and monitor value engineering

16 efforts and to coordinate the development of criteria

17 and guidelines referred to in paragraph (2).

18 (2) Develop criteria and guidelines for both

19 agency employees and contractor employees to iden20 tify programs, projects, systems, and products with

21 the greatest potential to yield savings and benefits

22 from the application of value engineering methodol23 ogy. The criteria and guidelines should recognize

24 that the potential savings are greatest during the

25 planning, design, and other early phases of program,
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1 project, system, and product development. The cri2 teria and guidelines shall include the following:

3 (A) Consideration of return on the Govern4 ment’s investment in value engineering, deter5 mined by dividing the Government’s cost of per6 forming the value engineering function by the

7 savings generated by the function.

8 (B) A dollar amount threshold for requir9 ing the application of value engineering. The

10 threshold shall be designed to ensure that value

11 engineering is applied to—

12 (i) each program, project, system, and

13 product of the agency that has a dollar

14 value greater than the threshold; and

15 (ii) those programs, projects, systems,

16 and products that, in a ranking of all pro17 grams, projects, systems, and products of

18 the agency according to greatest dollar

19 value, are within the highest 20th percent20 ile.

21 For purposes of applying such a threshold, the

22 dollar values of various programs, projects, sys23 tems, and products of an agency that have indi24 vidual values below the threshold shall be aggre25 gated if they utilize equivalent planning or de-
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1 sign elements, are jointly administered, or are

2 functionally equivalent.

3 (C) Criteria under which the value engi4 neering manager of the agency may, on a case5 by-case basis, waive the requirement of this Act

6 to conduct value engineering studies, and proce7 dures and requirements for documenting and

8 maintaining records of the justification for each

9 such waiver.

10 (3) Provide training (including practical experi11 ence) in established value engineering methodology

12 to agency staff responsible for coordinating and

13 monitoring value engineering efforts and to staff re14 sponsible for developing, reviewing, analyzing, carry15 ing out, changing, and evaluating value engineering

16 proposals.

17 (4) Ensure that funds necessary for conducting

18 agency value engineering efforts are included in an19 nual budget requests to the Office of Management

20 and Budget.

21 (5) Document and maintain records of—

22 (A) programs, projects, systems, and prod23 ucts that meet agency criteria for requiring the

24 use of value engineering techniques; and
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1 (B) determinations (including the reasons

2 therefor) that the recommendations resulting

3 from a value engineering review should not be

4 implemented.

5 (6) Except when inconsistent with this Act, ad6 here to the acquisition requirements of the Federal

7 Acquisition Regulation, including the use of value

8 engineering clauses in parts 48 and 52 for both

9 prime and subcontractors.

10 (7) In the case of discretionary grants awarded

11 by the agency, establish value engineering require12 ments, such as requiring grant applications to in13 clude a clause requiring the use of value engineering

14 methodology by qualified value engineering personnel

15 in the performance of the grant.

16 (8) Develop annual plans for using value engi17 neering in the agency, which, at a minimum, iden18 tify—

19 (A) the agency and contractor projects,

20 programs, systems, and products to which value

21 engineering techniques will be applied in the

22 next fiscal year; and

23 (B) the estimated costs of such projects,

24 programs, systems, and products.
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1 (9) Report annually to the Office of Manage2 ment and Budget on value engineering activities in

3 accordance with subsection (c).

4 (c) REPORTS TO OFFICE OF MANAGEMENT AND

5 BUDGET.—

6 (1) IN GENERAL.—The head of each Federal

7 agency shall submit to the Office of Management

8 and Budget an annual report on the results of using

9 value engineering in the agency. The report shall be

10 submitted by February 15 of each year.

11 (2) CONTENTS.—The report required by this

12 subsection shall include the following:

13 (A) The name, job title, address, telephone

14 number, and any additional job titles of the

15 agency’s current value engineering manager.

16 (B) The Government’s return on invest17 ment in value engineering achieved through ac18 tual implementation by the agency of rec19 ommendations adopted as a result of value en20 gineering, calculated by dividing the amount of

21 savings achieved through such implementation

22 by the cost of performing value engineering re23 views.

24 (C) The Government’s potential return on

25 investment achievable through value engineer-
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1 ing, calculated by dividing the amount of sav2 ings achievable through the adoption of rec3 ommendations as a result of value engineering

4 by the cost of performing value engineering re5 views to produce those recommendations.

6 (D) A description of the application of

7 value engineering to the agency’s programs,

8 projects, systems, and products, including the

9 net savings and quality improvements achieved

10 through use of value engineering in those pro11 grams, projects, systems, and products.

12 (E) A listing of the criteria adopted by the

13 agency pursuant to subsection (b)(2)(C) for

14 waiving the application of the value engineering

15 requirements of this Act, and documentation of

16 any waivers granted under the criteria.

17 (d) INSPECTOR GENERAL AUDITS.—The Inspector

18 General of each Federal agency shall audit the savings re19 ported by the agency in the second annual report submit20 ted under subsection (c). Thereafter, the Inspector Gen21 eral of each Federal agency shall audit the reported sav22 ings every second year.

23 (e) USE OF SAVINGS.—Of amounts available to a

24 Federal agency for a fiscal year for a program, project,

25 or system or development of a product that are unobli-
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1 gated at the end of the fiscal year as a result of the appli2 cation of value engineering in accordance with this Act—

3 (1) 50 percent shall be available to the agency

4 for—

5 (A) use in the next fiscal year for that pro6 gram, project, system, or development; and

7 (B) use for programs in effect on the date

8 of the enactment of this Act under which incen9 tives are provided to employees of the agency to

10 identify and implement methods for achieving

11 savings in programs, projects, systems, and

12 product development of the agency; and

13 (2) 50 percent shall be deposited in the general

14 fund of the Treasury and used to reduce the Federal

15 debt.

16 (f) REVIEW.—The Director of Management and

17 Budget shall review the policies contained in this Act 5

18 years after the date of the enactment of this Act and shall

19 report the results of such review to Congress.

20 (g) DEFINITIONS.—For purposes of this Act, the fol21 lowing definitions apply:

22 (1) The term ‘‘Federal agency’’ has the mean23 ing the term ‘‘agency’’ has under section 551(1) of

24 title 5, United States Code.
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1 (2) The term ‘‘savings’’ means a reduction in,

2 or avoidance of, expenditures that would be incurred

3 if programs, projects, systems, and products were

4 not evaluated using value engineering techniques.

5 (3) The term ‘‘value engineering’’ means a

6 team effort, performed by qualified agency or con7 tractor personnel, directed at analyzing the functions

8 of a program, project, system, product, item of

9 equipment, building, facility, service, or supply for

10 the purpose of achieving the essential functions at

11 the lowest life-cycle cost that is consistent with re12 quired or improved performance, reliability, quality,

13 and safety.

14 (4) The term ‘‘life-cycle cost’’ means the total

15 cost of a program, project, system, product, item of

16 equipment, building, facility, service, or supply, com17 puted over its useful life. The term includes all rel18 evant costs involved in acquiring, owning, operating,

19 maintaining, and disposing of the program, project,

20 system, product, item of equipment, building, facil21 ity, service, or supply over a specified period of time.

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