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[Senate Report 115-383]
[From the U.S. Government Publishing Office]

                                                      Calendar No. 669
  
115th Congress }                                     {   Report
                               SENATE                          
2d Session     }                                     {   115-383
_______________________________________________________________________

                                     

                                                       

                      FEDERAL ACQUISITION SAVINGS

                              ACT OF 2018

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 3251

          TO REQUIRE EXECUTIVE AGENCIES TO CONSIDER RENTAL IN
     ANY ANALYSIS FOR EQUIPMENT ACQUISITION, AND FOR OTHER PURPOSES
     

               November 26, 2018.--Ordered to be printed
               
                                _________ 
                                  
                   U.S. GOVERNMENT PUBLISHING OFFICE
 89-010                    WASHINGTON : 2018                     
 
                              
               
               
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma             GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming             MAGGIE HASSAN, New Hampshire
JOHN HOEVEN, North Dakota            KAMALA D. HARRIS, California
STEVE DAINES, Montana                DOUG JONES, Alabama

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
       Patrick J. Bailey, Chief Counsel for Governmental Affairs
               Margaret E. Daum, Minority Staff Director
       Charles A. Moskowitz, Minority Senior Legislative Counsel
  Chris J. Mulkins, Minority Government Accountability Office Detailee
                     Laura W. Kilbride, Chief Clerk
                     
                     
                     
                     
                     

                                                       Calendar No. 669
                                                       
                                                       
115th Congress   }                                          {    Report
                                 SENATE
 2d Session      }                                          {   115-383

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

 
                FEDERAL ACQUISITION SAVINGS ACT OF 2018

                                _______
                                

               November 26, 2018.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 3251]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 3251) to require 
executive agencies to consider rental in any analysis for 
equipment acquisition, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................1
III. Legislative History..............................................2
 IV. Section-by-Section Analysis......................................2
  V. Evaluation of Regulatory Impact..................................3
 VI. Congressional Budget Office Cost Estimate........................3
VII. Changes in Existing Law Made by the Bill, as Reported............4

                         I. PURPOSE AND SUMMARY

    S. 3251, the Federal Acquisition Savings Act of 2018, 
requires executive agencies to do a cost-benefit analysis of 
the short- and long-term costs of rental, leasing, and 
ownership of equipment, and choose the acquisition method that 
is most advantageous to the Federal Government.

              II. BACKGROUND AND THE NEED FOR LEGISLATION

    In February 2018, the Government Accountability Office 
(GAO) reported that the Air Force and the Department of 
Interior did not consistently conduct a cost-benefit analysis 
when purchasing heavy equipment to determine whether a lease 
might be more cost effective.\1\ The report also noted that 
there are indications that this may be a problem government-
wide, considering that 20 Executive Branch agencies had an 
inventory of 136,000 pieces of heavy equipment such as cranes, 
forklifts, and backhoes.\2\ This current inventory cost an 
estimated $7.4 billion to acquire.\3\
---------------------------------------------------------------------------
    \1\Gov't Accountability Office, GAO-18-295, Heavy Equipment: 
Selected Agencies Should Improve Guidance for Purchases and Leases 
(2018), available at https://www.gao.gov/assets/700/690345.pdf.
    \2\Id.
    \3\Id. (estimated in 2016 dollars).
---------------------------------------------------------------------------
    On September 5, 2018, the Federal Acquisition Regulatory 
Council (FAR Council) proposed changes to the Federal 
Acquisition Regulation (FAR) to amend the definition of the 
term ``equipment lease'' to clarify that it also includes 
equipment rental.\4\ While existing law does not preclude the 
rental of equipment, it is not clear in the existing 
regulations that an agency should conduct a cost-benefit 
analysis for renting in addition to leasing equipment.\5\
---------------------------------------------------------------------------
    \4\83 Fed. Reg. 45,072 (Sept. 5, 2018) (to be codified at 48 C.F.R. 
pt. 7), available at https://www.gpo.gov/fdsys/pkg/FR-2018-09-05/pdf/
2018-19177.pdf.
    \5\83 Fed. Reg. 45,073 (Sept. 5, 2018) (to be codified at 48 C.F.R. 
pt. 7.4).
---------------------------------------------------------------------------
    S. 3251 requires Executive Branch agencies to analyze 
equipment acquisitions on a case-by-case basis and determine 
whether ownership, leasing, or renting is more advantageous to 
the Federal Government. Recognizing that the cheapest option 
may not always be the most advantageous option, the legislation 
requires that factors other than cost also be considered.

                        III. LEGISLATIVE HISTORY

    Senators Gary Peters, James Lankford, and Rand Paul 
introduced S. 3251 on July 19, 2018. The bill was referred to 
the Committee on Homeland Security and Governmental Affairs on 
the same day. The Committee considered S. 3251 at a September 
26, 2018, business meeting.
    The Committee ordered S. 3251 reported favorably en bloc by 
voice vote. Senators present for the vote were Johnson, 
Portman, Lankford, Enzi, Hoeven, McCaskill, Carper, Heitkamp, 
Peters, Hassan, Harris, and Jones.

        IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title

    This section established that the bill may be cited as the 
``Federal Acquisition Savings Act.''

Section 2. Agency analysis of equipment acquisition

    Subsection (a) requires executive agencies to acquire 
equipment using the method of acquisition most advantageous to 
the Federal Government, based on a case-by-case analysis of 
cost and other factors. It requires such agencies to make this 
determination based on an analysis of whether to purchase, 
rent, or lease the equipment. It also requires the FAR Council 
to issue implementation regulations.
    Subsection (b) sets an implementation date after the FAR 
Council issues the implementation regulations.
    Subsection (c) allows the head of an executive agency to 
contract with state and local governments if the agency head 
determines the agreement satisfies the requirements of 
subsection (a).
    Subsection (d) sets out exceptions to subsection (a), such 
as a disaster declaration or other emergency situations.
    Subsection (e) mandates a report be conducted by GAO to 
review the quality of the analyses required by subsection (a).
    Subsection (f) defines the terms ``executive agency,'' 
``interagency acquisition,'' ``state,'' and ``local 
government.''

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 3, 2018.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 3251, the Federal 
Acquisition Savings Act of 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

S. 3251--Federal Acquisition Savings Act of 2018

    S. 3251 would amend the Federal Acquisition Regulation to 
require agencies to acquire equipment using a method of 
acquisition that is most advantageous to the federal government 
on a case-by-case basis. This could include short- and long-
term rental, leases, interagency acquisitions, or acquisition 
agreements with state and local governments. The bill also 
would require a report within two years by the Government 
Accountability Office on equipment acquisitions. According to 
the General Services Administration (GSA), agencies are already 
required to consider purchasing or leasing when evaluating the 
acquisition of equipment and proposed regulations will clarify 
leasing and renting as an option. In addition, GSA has proposed 
a similar rule. Because CBO expects that S. 3251 would not 
materially change how agencies acquire equipment, CBO estimates 
that implementing S. 3251 would have no significant effect on 
the federal budget.
    Enacting S. 3251 could affect direct spending by agencies 
not funded through annual appropriations; therefore, pay-as-
you-go procedures apply. CBO estimates, however, that any net 
increase in spending by those agencies would not be 
significant. S. 3251 would not affect revenues.
    CBO estimates that enacting S. 3251 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    S. 3251 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    On October 4, 2017, CBO transmitted a cost estimate for 
H.R. 3071, the Federal Acquisition Savings Act of 2017, as 
ordered reported by the House Committee on Oversight and 
Government Reform on September 13, 2017. The two pieces of 
legislation are similar and the estimated budgetary effects are 
the same.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    Because this legislation would not repeal or amend any 
provision of current law, it would make no changes in existing 
law within the meaning of clauses (a) and (b) of paragraph 12 
of rule XXVI of the Standing Rules of the Senate.
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