69–006 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 110–594 

GOVERNMENT CONTRACTOR ACCOUNTABILITY ACT OF 

2007 

APRIL 17, 2008.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. WAXMAN, from the Committee on Oversight and Government 

Reform, submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[To accompany H.R. 3928] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Oversight and Government Reform, to whom 

was referred the bill (H.R. 3928) to require certain large government contractors that receive more than 80 percent of their annual 

gross revenue from Federal contracts to disclose the names and salaries of their most highly compensated officers, and for other purposes, having considered the same, report favorably thereon with 

an amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 2 

Legislative History .................................................................................................. 3 

Section-by-Section .................................................................................................... 3 

Explanation of Amendments ................................................................................... 4 

Committee Consideration ........................................................................................ 4 

Roll Call Votes ......................................................................................................... 4 

Application of Law to the Legislative Branch ....................................................... 4 

Statement of Oversight Findings and Recommendations of the Committee ...... 4 

Statement of General Performance Goals and Objectives .................................... 4 

Constitutional Authority Statement ...................................................................... 4 

Federal Advisory Committee Act ............................................................................ 4 

Unfunded Mandates Statement .............................................................................. 5 


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Earmark Identification ............................................................................................ 5 

Budget Authority and Congressional Budget Office Cost Estimate .................... 5 

Changes in Existing Law Made by the Bill, as Reported ..................................... 6 

Additional Views ...................................................................................................... 7 

The amendment (stated in terms of the page and line numbers 

of the introduced bill) is as follows: 

Page 3, line 22, strike ‘‘$5,000,000’’ and insert ‘‘$25,000,000’’. 

PURPOSE AND SUMMARY

H.R. 3928, the Government Contractor Accountability Act of 

2007, was introduced by Rep. Christopher Murphy on October 23, 

2007. The measure would increase accountability and transparency 

in federal contracting by requiring companies that receive more 

than 80 percent of annual gross revenue from federal contracts to 

disclose the names and salaries of their most highly compensated 

officers. 

BACKGROUND AND NEED FOR LEGISLATION

Each year the federal government spends billions of dollars to 

procure goods and services, making federal contracts one of the 

fastest growing components of the federal budget. In fiscal year 

2006, the federal government spent over $400 billion on contracts 

with private companies. 

Although the government spends billions of dollars on private 

contractors, the American taxpayer and Congress know very little 

about the management practices, financial statements, and employment policies of these firms. Of these contractors, Blackwater USA 

has received particular attention and scrutiny. At a hearing before 

the House Committee on Oversight and Government Reform, 

Blackwater CEO Erik Prince refused to provide Congress with details of Blackwater’s profits or his personal compensation. 

Blackwater has grown to become one of the world’s largest providers of private military services. Prior to the war in Iraq, the 

company primarily offered training services for law enforcement 

and military personnel. But during the past six years, the company 

has expanded and diversified to include overseas security contracting. 

Blackwater’s government contracts have grown exponentially, 

particularly since the start of the war in Iraq. Blackwater went 

from having government contracts worth less than a million dollars 

in 2001 to contracts worth more than half a billion dollars in 2006. 

In fiscal year 2001, Blackwater had $736,906 in federal contracts. 

By 2006, Blackwater had over $593 million in government contracts, an increase of more than 80,000 percent. In total, 

Blackwater has received over a billion dollars under its federal government contracts during fiscal years 2001 to 2006. 

H.R. 3928 would create disclosure requirements for privately 

held government contractors similar to existing requirements for 

publicly traded companies and nonprofit organizations. Publicly 

traded companies are required to disclose similar information on 

executive compensation to the Securities and Exchange Commission, and nonprofit organizations are required to disclose such information to the Internal Revenue Service on Form 990. These disclosures are publicly available. The rationale behind the requirements is to mandate transparency for entities that receive governVerDate Aug 31 2005 03:31 Apr 18, 2008 Jkt 069006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR594.XXX HR594

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ment benefits and public investment. Publicly traded companies receive access to government-regulated capital markets. Nonprofit organizations are tax-exempt and donations to non-profits are tax-deductible for the donor. 

Companies that derive the vast majority of their revenues from 

government contracts receive the benefit of a revenue stream generated by taxpayer dollars. Taxpayers should be able to review how 

their money is being spent. 

LEGISLATIVE HISTORY

H.R. 3928, the Government Contractor Accountability Act of 

2007, was introduced by Rep. Murphy on October 23, 2007, and 

was referred to the Committee on Oversight and Government Reform. 

The Subcommittee on Government Management, Organization, 

and Procurement held a hearing on H.R. 3928 on February 27, 

2008. The witnesses were Paul Denett, Administrator, Office of 

Federal Procurement Policy, Office of Management and Budget; 

John Hutton, Director, Acquisition and Sourcing Management, U.S. 

Government Accountability Office; Marcia Madsen, Partner, Mayer 

Brown and Chair, Acquisition Advisory Panel; Scott Amey, General 

Counsel, Project on Government Oversight; and Alan Chvotkin, 

Senior Vice President and Counsel, Professional Services Council. 

The Subcommittee held a markup to consider H.R. 3928 on 

March 11, 2008, and ordered the bill to be favorably reported by 

voice vote. 

The Committee held a markup to consider H.R. 3928 on March 

13, 2008, and ordered the bill, as amended, to be favorably reported 

by voice vote. 

SECTION-BY-SECTION

Section 1: Short title 

The short title of the bill is the Government Contractor Accountability Act of 2007. 

Section 2: Certification and other financial disclosure requirements 

for certain government contractors 

This section directs federal government contracting officers to require ‘‘covered contractors’’ to submit for each contract entered into 

either (1) a certification that the contractor received 80 percent or 

less of its annual gross revenues from other federal contracts during the fiscal year preceding the fiscal year in which the contract 

is awarded; or (2) a statement disclosing the names and salaries of 

the contractor’s principal executive officer, principal financial officer, three most highly compensated other executive officers or individuals, and directors. Such certifications and any annual updates 

that are required to be submitted are to be made publicly available 

in searchable form through the Federal Procurement Data System. 

The term ‘‘covered contractor’’ means an entity that (1) received 

more than $25 million in annual gross revenues from federal contracts in the preceding fiscal year and (2) is not a publicly traded 

company required to file periodic reports under section 13(a) or 

15(d) of the Securities Exchange Act of 1934. The Administrator of 


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the General Services is required to issue regulations to implement 

these provisions. 

EXPLANATION OF AMENDMENTS

Mr. Murphy offered an amendment, passed by voice vote, striking a provision that defined a ‘‘covered contractor’’ as an entity that 

received more than $5 million in annual gross revenues from federal contracts, and replacing it with a provision that defined a ‘‘covered contractor’’ as an entity that received more than $25 million 

in annual gross revenues from federal contracts. 

COMMITTEE CONSIDERATION

On Thursday, March 13, 2008, the Committee met in open session and favorably ordered H.R. 3928 to be reported, as amended, 

to the House by a voice vote. 

ROLL CALL VOTES

No roll call votes were held. 

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1 requires a description of 

the application of this bill to the legislative branch where the bill 

relates to terms and conditions of employment or access to public 

services and accommodations. The bill does not relate to employment or access to public services and accommodations. 

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE

COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause 2(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

descriptive portions of this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee’s performance goals and 

objectives are reflected in the descriptive portions of this report, including improving the efficiency and transparency of federal procurement. 

CONSTITUTIONAL AUTHORITY STATEMENT

Under clause 3(d)(1) of rule XIII of the Rules of the House of 

Representatives, the Committee must include a statement citing 

the specific powers granted to Congress to enact the law proposed 

by H.R. 3928. Article I, Section 8, Clause 18 of the Constitution of 

the United States grants the Congress the power to enact this law. 

FEDERAL ADVISORY COMMITTEE ACT

The Committee finds that the legislation does not establish or 

authorize the establishment of an advisory committee within the 

definition of 5 U.S.C. App., section 5(b). 


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UNFUNDED MANDATES STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement on whether the 

provisions of the report include unfunded mandates. In compliance 

with this requirement the Committee has received a letter from the 

Congressional Budget Office included herein. 

EARMARK IDENTIFICATION

H.R. 3928 does not include any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9(d), 9(e), 

or 9(f) of rule XXI. 

COMMITTEE ESTIMATE

Clause 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R. 

3928. However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its 

report a timely submitted cost estimate of the bill prepared by the 

Director of the Congressional Budget Office under section 402 of 

the Congressional Budget Act. 

BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST

ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the Rules of the House of Representatives and section 308(a) of the 

Congressional Budget Act of 1974 and with respect to requirements 

of clause 3(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget Act of 1974, the 

Committee has received the following cost estimate for H.R. 3928 

from the Director of the Congressional Budget Office: 

APRIL 8, 2008. 

Hon. HENRY A. WAXMAN, 

Chairman, Committee on Oversight and Government Reform, House 

of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3928, the Government 

Contractor Accountability Act of 2007. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

PETER R. ORSZAG. 

Enclosure. 

H.R. 3928—Government Contractor Accountability Act of 2007 

H.R. 3928 would require certain privately owned companies that 

received more than 80 percent of their annual gross revenue from 

federal contracts to annually report the names and salaries of their 

highest-ranking company officials. The bill would apply to firms 

with more than $25 million in annual gross revenue. The legislation would require the General Services Administration (GSA) to 


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promulgate new regulations and make the information publicly 

available through the Federal Procurement Data System. 

Based on information from GSA, CBO estimates that imple- menting H.R. 3928 would cost $2 million in 2009 and about $5 million over the 2009–2013 period, assuming the availability of appropriated funds. GSA would incur those costs to amend the Federal 

Procurement Data System and train employees to use it. 

H.R. 3928 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of state, local, or tribal governments. 

The CBO staff contact for this estimate is Matthew Pickford. 

This estimate was approved by Peter H. Fontaine, Assistant Director for Budget Analysis. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

No changes to existing law are made by H.R. 3928, as reported. 


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ADDITIONAL VIEWS OF RANKING MEMBER TOM DAVIS 

H.R. 3928 would require any non-public company receiving more 

than $5 million from federal contracts and earning 80 percent of 

its revenue from federal contracts to disclose: the names and salaries of the contractor’s principal executive officer, principal financial officer, three other most highly compensated officers, as well 

as firm’s directors—information which currently is available to government acquisition officials. 

Therefore, H.R. 3928 serves only one purpose: to embarrass 

Blackwater USA because the Chief Executive Officer of that privately held company performing under fixed-price government contracts refused to disclose his salary during a hearing on security 

contracting. 

Information regarding salaries of top company officials could be 

useful under certain cost-type contracts where the government reimburses a firm for its reasonable and allowable costs plus a fee. 

Under current acquisition regulations governing such contracts, 

such information is available to government contracting officials, In 

fact, procurement regulations place a ceiling on executive compensation costs which can be reimbursed under cost-type contracts. 

Moreover, this information is also available to acquisition officials (to the extent it is relevant) during the negotiations leading 

up to the award of a fixed-priced contract. Thus, H.R. 3928 has no 

acquisition purpose. The only purpose of this bill is to ‘‘punish’’ and 

embarrass privately held firms. It will accomplish nothing other 

than to discourage the participation of privately held firms in the 

government market—which will decrease competition and, ultimately, increase government costs. 

TOM DAVIS. 

Æ 


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