II 

Calendar No. 656 

114TH CONGRESS 

2D SESSION S. 1526 

[Report No. 114–366] 

To amend title 10 and title 41, United States Code, to improve the manner 

in which Federal contracts for construction and design services are 

awarded, to prohibit the use of reverse auctions for design and construction services procurements, to amend title 31 and title 41, United States 

Code, to improve the payment protections available to construction contractors, subcontractors, and suppliers for work performed, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 8, 2015 

Mr. PORTMAN (for himself, Ms. HIRONO, Ms. AYOTTE, and Mrs. SHAHEEN) 

introduced the following bill; which was read twice and referred to the 

Committee on Homeland Security and Governmental Affairs 

OCTOBER 27, 2016 

Reported under authority of the order of the Senate of September 29, 2016, 

by Mr. JOHNSON, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To amend title 10 and title 41, United States Code, to 

improve the manner in which Federal contracts for construction and design services are awarded, to prohibit 

the use of reverse auctions for design and construction 

services procurements, to amend title 31 and title 41, 


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United States Code, to improve the payment protections 

available to construction contractors, subcontractors, and 

suppliers for work performed, 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; TABLE OF CONTENTS. 

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

5 ‘‘Construction Consensus Procurement Improvement Act 

6 of 2015’’. 

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

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Congressional findings. 

Sec. 3. Design-build construction process improvement. 

Sec. 4. Prohibition on the use of a reverse auction for the award of a contract 

for design and construction services. 

Sec. 5. Assuring payment protections for construction subcontractors and suppliers under an alternative to a Miller Act payment bond. 

Sec. 6. SBA surety bond guarantee program. 

9 SEC. 2. CONGRESSIONAL FINDINGS. 

10 Congress makes the following findings: 

11 (1) The acquisition procedures that are often 

12 used effectively to procure products and other forms 

13 of services are not always appropriate for procure14 ment of design and construction services. 

15 (2) Federal procurement officials often adopt 

16 contracting techniques from the private sector and 

17 have used those techniques effectively to procure 

18 products and services. 


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1 (3) Design-build is a procurement technique 

2 Federal officials have adopted from the private sec3 tor that has worked well for procurement of design 

4 and construction services. 

5 (4) The current statutory framework for de6 sign-build could benefit from legislative refinement. 

7 (5) Reverse auctions are another procurement 

8 technique Federal officials have adopted from the 

9 private sector and used successfully to award con10 tracts for the purchase of products that are commer11 cially equivalent to commodities. 

12 (6) Despite their success in other contexts, re13 verse auctions are generally inappropriate for pro14 curement of design and construction services, given 

15 the unique nature of each such project. 

16 (7) To ensure payment protection for contrac17 tors, subcontractors, and suppliers working on Fed18 eral construction projects, bonds backed by indi19 vidual sureties must be placed in the care and cus20 tody of the Federal Government and be supported 

21 by assets that are real, sufficient, verifiable, and 

22 readily convertible into cash. 

23 SEC. 3. DESIGN-BUILD CONSTRUCTION PROCESS IMPROVE24 MENT. 

25 (a) CIVILIAN CONTRACTS.— 


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1 (1) IN GENERAL.—Section 3309 of title 41, 

2 United States Code, is amended— 

3 (A) by amending subsection (b) to read as 

4 follows: 

5 ‘‘(b) CRITERIA FOR USE.— 

6 ‘‘(1) CONTRACTS WITH A VALUE OF AT LEAST

7 $750,000.—Two-phase selection procedures shall be 

8 used for entering into a contract for the design and 

9 construction of a public building, facility, or work 

10 when a contracting officer determines that the con11 tract has a value of $750,000 or greater, as adjusted 

12 for inflation in accordance with section 1908 of this 

13 title. 

14 ‘‘(2) CONTRACTS WITH A VALUE LESS THAN

15 $750,000.—For projects that a contracting officer de16 termines have a value of less than $750,000, the 

17 contracting officer shall make a determination 

18 whether two-phase selection procedures are appro19 priate for use for entering into a contract for the de20 sign and construction of a public building, facility, 

21 or work when— 

22 ‘‘(A) the contracting officer anticipates 

23 that 3 or more offers will be received for the 

24 contract; 


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1 ‘‘(B) design work must be performed be2 fore an offeror can develop a price or cost pro3 posal for the contract; 

4 ‘‘(C) the offeror will incur a substantial 

5 amount of expense in preparing the offer; and 

6 ‘‘(D) the contracting officer has considered 

7 information such as— 

8 ‘‘(i) the extent to which the project re9 quirements have been adequately defined; 

10 ‘‘(ii) the time constraints for delivery 

11 of the project; 

12 ‘‘(iii) the capability and experience of 

13 potential contractors; 

14 ‘‘(iv) the suitability of the project for 

15 use of the two-phase selection procedures; 

16 ‘‘(v) the capability of the agency to 

17 manage the two-phase selection process; 

18 and 

19 ‘‘(vi) other criteria established by the 

20 agency.’’; and 

21 (B) in subsection (d), by striking ‘‘The 

22 maximum number specified in the solicitation 

23 shall not exceed 5 unless the agency determines 

24 with respect to’’ and all that follows through 

25 the period at the end and inserting the folVerDate Sep 11 2014 20:47 Oct 27, 2016 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6401 E:\BILLS\S1526.RS S1526

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1 lowing: ‘‘The maximum number specified in the 

2 solicitation shall not exceed 5 unless the head 

3 of the contracting activity, delegable to a level 

4 no lower than the senior contracting official 

5 within the contracting activity, approves the 

6 contracting officer’s justification that an indi7 vidual solicitation must have greater than 5 fi8 nalists to be in the Federal Government’s inter9 est. The contracting officer shall provide writ10 ten documentation of how a maximum number 

11 of offerors exceeding 5 is consistent with the 

12 purposes and objectives of the two-phase selec13 tion process.’’. 

14 (2) ANNUAL REPORTS.— 

15 (A) IN GENERAL.—Not later than Novem16 ber 30 of 2016, 2017, 2018, 2019, and 2020, 

17 the head of each agency shall compile an annual 

18 report of each instance in which the agency 

19 awarded a design-build contract pursuant to 

20 section 3309 of title 41, United States Code, 

21 during the fiscal year ending in such calendar 

22 year, in which— 

23 (i) more than 5 finalists were selected 

24 for phase-two requests for proposals; or 


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1 (ii) the contract was awarded without 

2 using two-phase selection procedures. 

3 (B) PUBLIC AVAILABILITY.—The Director 

4 of the Office of Management and Budget shall 

5 facilitate public access to the reports, including 

6 by posting them on a publicly available Internet 

7 website. A notice of the availability of each re8 port shall be published in the Federal Register. 

9 (b) DEFENSE CONTRACTS.— 

10 (1) IN GENERAL.—Section 2305a of title 10, 

11 United States Code, is amended— 

12 (A) by amending subsection (b) to read as 

13 follows: 

14 ‘‘(b) CRITERIA FOR USE.— 

15 ‘‘(1) CONTRACTS WITH A VALUE OF AT LEAST

16 $750,000.—Two-phase selection procedures shall be 

17 used for entering into a contract for the design and 

18 construction of a public building, facility, or work 

19 when a contracting officer determines that the con20 tract has a value of $750,000 or greater, as adjusted 

21 for inflation in accordance with section 1908 of title 

22 41, United States Code. 

23 ‘‘(2) CONTRACTS WITH A VALUE LESS THAN

24 $750,000.—For projects that a contracting officer de25 termines have a value of less than $750,000, the 


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1 contracting officer shall make a determination 

2 whether two-phase selection procedures are appro3 priate for use for entering into a contract for the de4 sign and construction of a public building, facility, 

5 or work when— 

6 ‘‘(A) the contracting officer anticipates 

7 that 3 or more offers will be received for the 

8 contract; 

9 ‘‘(B) design work must be performed be10 fore an offeror can develop a price or cost pro11 posal for the contract; 

12 ‘‘(C) the offeror will incur a substantial 

13 amount of expense in preparing the offer; and 

14 ‘‘(D) the contracting officer has considered 

15 information such as— 

16 ‘‘(i) the extent to which the project re17 quirements have been adequately defined; 

18 ‘‘(ii) the time constraints for delivery 

19 of the project; 

20 ‘‘(iii) the capability and experience of 

21 potential contractors; 

22 ‘‘(iv) the suitability of the project for 

23 use of the two-phase selection procedures; 


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1 ‘‘(v) the capability of the agency to 

2 manage the two-phase selection process; 

3 and 

4 ‘‘(vi) other criteria established by the 

5 Department of Defense.’’; and 

6 (B) in subsection (d), by striking ‘‘The 

7 maximum number specified in the solicitation 

8 shall not exceed 5 unless the agency determines 

9 with respect to’’ and all that follows through 

10 the period at the end and inserting the fol11 lowing: ‘‘The maximum number specified in the 

12 solicitation shall not exceed 5 unless the head 

13 of the contracting activity approves the con14 tracting officer’s justification that an individual 

15 solicitation must have greater than 5 finalists 

16 to be in the Federal Government’s interest. The 

17 contracting officer shall provide written docu18 mentation of how a maximum number of 

19 offerors exceeding 5 is consistent with the pur20 poses and objectives of the two-phase selection 

21 process.’’. 

22 (2) ANNUAL REPORTS.— 

23 (A) IN GENERAL.—Not later than Novem24 ber 30 of 2016, 2017, 2018, 2019, and 2020, 

25 the Secretary of Defense shall compile an anVerDate Sep 11 2014 20:47 Oct 27, 2016 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6401 E:\BILLS\S1526.RS S1526

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1 nual report of each instance in which the De2 partment awarded a design-build contract pur3 suant to section 2305a of title 10, United 

4 States Code, during the fiscal year ending in 

5 such calendar year, in which— 

6 (i) more than 5 finalists were selected 

7 for phase-two requests for proposals; or 

8 (ii) the contract was awarded without 

9 using two-phase selection procedures. 

10 (B) PUBLIC AVAILABILITY.—The Director 

11 of the Office of Management and Budget shall 

12 facilitate public access to the reports, including 

13 by posting them on a publicly available Internet 

14 website. A notice of the availability of each re15 port shall be published in the Federal Register. 

16 (c) GAO REPORTS.— 

17 (1) CIVILIAN CONTRACTS.—Not later than 270 

18 days after the deadline for the final reports required 

19 under subsection (f) of section 3309 of title 41, 

20 United States Code, as added by subsection (a)(1), 

21 the Comptroller General of the United States shall 

22 issue a report analyzing the compliance of the var23 ious Federal agencies with the requirements of such 

24 section. 


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1 (2) DEFENSE CONTRACTS.—Not later than 270 

2 days after the deadline for the final reports required 

3 under subsection (f) of section 2305a of title 10, 

4 United States Code, as added by subsection (b)(1), 

5 the Comptroller General of the United States shall 

6 issue a report analyzing the compliance of the De7 partment of Defense with the requirements of such 

8 section. 

9 SEC. 4. PROHIBITION ON THE USE OF A REVERSE AUCTION 

10 FOR THE AWARD OF A CONTRACT FOR DE11 SIGN AND CONSTRUCTION SERVICES. 

12 (a) PROHIBITION.—Not later than 180 days after the 

13 date of the enactment of this Act, the Federal Acquisition 

14 Regulatory Council, in consultation with the Adminis15 trator for Federal Procurement Policy, shall amend the 

16 Federal Acquisition Regulation to prohibit the use of re17 verse auctions for awarding contracts for construction and 

18 design services. 

19 (b) DEFINITIONS.—For purposes of this section— 

20 (1) the term ‘‘design and construction services’’ 

21 means— 

22 (A) site planning and landscape design; 

23 (B) architectural and engineering services 

24 (including surveying and mapping defined in 

25 section 1101 of title 40, United States Code); 


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1 (C) interior design; 

2 (D) performance of construction work for 

3 facility, infrastructure, and environmental res4 toration projects; 

5 (E) delivery and supply of construction 

6 materials to construction sites; and 

7 (F) construction or substantial alteration 

8 or repair of public buildings or public works; 

9 and 

10 (2) the term ‘‘reverse auction’’ means, with re11 spect to procurement by an agency— 

12 (A) a real-time auction conducted through 

13 an electronic medium between a group of 

14 offerors who compete against each other by 

15 submitting bids for a contract or task order 

16 with the ability to submit revised bids through17 out the course of the auction; and 

18 (B) the award of the contract or task order 

19 to the offeror who submits the lowest bid. 

20 SEC. 5. ASSURING PAYMENT PROTECTIONS FOR CON21 STRUCTION SUBCONTRACTORS AND SUP22 PLIERS UNDER AN ALTERNATIVE TO A MIL23 LER ACT PAYMENT BOND. 

24 Chapter 93 of subtitle VI of title 31, United States 

25 Code, is amended— 


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1 (1) by adding at the end the following new sec2 tion: 

3 ‘‘§ 9310. Individual sureties 

4 ‘‘If another applicable law or regulation permits the 

5 acceptance of a bond from a surety that is not subject 

6 to sections 9305 and 9306 and is based on a pledge of 

7 assets by the surety, the assets pledged by such surety 

8 shall— 

9 ‘‘(1) consist of eligible obligations described 

10 under section 9303(a); and 

11 ‘‘(2) be submitted to the official of the Govern12 ment required to approve or accept the bond, who 

13 shall deposit the assets with a depository described 

14 under section 9303(b).’’; and 

15 (2) in the table of sections for such chapter, by 

16 adding at the end the following new item: 

‘‘9310. Individual sureties.’’. 

17 SEC. 6. SBA SURETY BOND GUARANTEE PROGRAM. 

18 Section 411(c)(1) of the Small Business Investment 

19 Act of 1958 (15 U.S.C. 694b(c)(1)) is amended by strik20 ing ‘‘70’’ and inserting ‘‘90’’. 

21 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

23 ‘‘Construction Consensus Procurement Improvement Act of 

24 2015’’. 


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

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Congressional findings. 

Sec. 3. Design-build construction process improvement. 

Sec. 4. Prohibition on the use of a reverse auction for the award of a contract 

for design and construction services. 

3 SEC. 2. CONGRESSIONAL FINDINGS. 

4 Congress makes the following findings: 

5 (1) The acquisition procedures that are often 

6 used effectively to procure products and other forms of 

7 services are not always appropriate for procurement 

8 of design and construction services. 

9 (2) Federal procurement officials often adopt 

10 contracting techniques from the private sector and 

11 have used those techniques effectively to procure prod12 ucts and services. 

13 (3) Design-build is a procurement technique Fed14 eral officials have adopted from the private sector that 

15 has worked well for procurement of design and con16 struction services. 

17 (4) The current statutory framework for design18 build could benefit from legislative refinement. 

19 (5) Reverse auctions are another procurement 

20 technique Federal officials have adopted from the pri21 vate sector and used successfully to award contracts 

22 for the purchase of products that are commercially 

23 equivalent to commodities. 


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1 (6) Despite their success in other contexts, reverse 

2 auctions are generally inappropriate for procurement 

3 of design and construction services, given the unique 

4 nature of each such project. 

5 SEC. 3. DESIGN-BUILD CONSTRUCTION PROCESS IMPROVE6 MENT. 

7 (a) CIVILIAN CONTRACTS.— 

8 (1) IN GENERAL.—Section 3309(b) of title 41, 

9 United States Code, is amended to read as follows: 

10 ‘‘(b) CRITERIA FOR USE.— 

11 ‘‘(1) CONTRACTS WITH A VALUE OF AT LEAST

12 $750,000.—Two-phase selection procedures shall be 

13 used for entering into a contract for the design and 

14 construction of a public building, facility, or work 

15 when a contracting officer determines that the project 

16 has a value of $750,000 or greater, as adjusted for in17 flation in accordance with section 1908 of this title. 

18 ‘‘(2) CONTRACTS WITH A VALUE LESS THAN

19 $750,000.—For projects that a contracting officer deter20 mines have a value of less than $750,000, the con21 tracting officer shall make a determination whether 

22 two-phase selection procedures are appropriate for use 

23 for entering into a contract for the design and con24 struction of a public building, facility, or work 

25 when— 


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1 ‘‘(A) the contracting officer anticipates that 

2 3 or more offers will be received for the contract; 

3 ‘‘(B) design work must be performed before 

4 an offeror can develop a price or cost proposal 

5 for the contract; 

6 ‘‘(C) the offeror will incur a substantial 

7 amount of expense in preparing the offer; and 

8 ‘‘(D) the contracting officer has considered 

9 information such as— 

10 ‘‘(i) the extent to which the project re11 quirements have been adequately defined; 

12 ‘‘(ii) the time constraints for delivery 

13 of the project; 

14 ‘‘(iii) the capability and experience of 

15 potential contractors; 

16 ‘‘(iv) the suitability of the project for 

17 use of the two-phase selection procedures; 

18 ‘‘(v) the capability of the agency to 

19 manage the two-phase selection process; and 

20 ‘‘(vi) other criteria established by the 

21 agency.’’. 

22 (2) ANNUAL REPORTS.— 

23 (A) IN GENERAL.—Not later than November 

24 30 of 2017, 2018, 2019, 2020, and 2021, the head 

25 of each agency shall compile an annual report of 


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1 each instance in which the agency awarded a de2 sign-build contract pursuant to section 3309 of 

3 title 41, United States Code, during the fiscal 

4 year ending in such calendar year, in which— 

5 (i) more than 5 finalists were selected 

6 for phase-two requests for proposals; or 

7 (ii) the contract or order was awarded 

8 without using two-phase selection proce9 dures. 

10 (B) PUBLIC AVAILABILITY.—The Director of 

11 the Office of Management and Budget shall fa12 cilitate public access to the reports, including by 

13 posting them on a publicly available Internet 

14 website. A notice of the availability of each re15 port shall be published in the Federal Register. 

16 (b) GAO REPORTS.—Not later than 270 days after the 

17 deadline for the final reports required under subsection (f) 

18 of section 3309 of title 41, United States Code, as added 

19 by subsection (a)(1), the Comptroller General of the United 

20 States shall issue a report analyzing the compliance of the 

21 various Federal agencies with the requirements of such sec22 tion. 


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1 SEC. 4. PROHIBITION ON THE USE OF A REVERSE AUCTION 

2 FOR THE AWARD OF A CONTRACT FOR DE3 SIGN AND CONSTRUCTION SERVICES. 

4 (a) FINDING.—Congress finds that, in contrast to a 

5 traditional auction in which the buyers bid up the price, 

6 sellers bid down the price in a reverse auction. 

7 (b) PROHIBITION.—Not later than 180 days after the 

8 date of the enactment of this Act, the Federal Acquisition 

9 Regulatory Council, in consultation with the Administrator 

10 for Federal Procurement Policy, shall amend the Federal 

11 Acquisition Regulation to prohibit the use of reverse auc12 tions as part of the two-phase selection procedure for award13 ing contracts for construction and design services. 

14 (c) DEFINITIONS.—For purposes of this section— 

15 (1) the term ‘‘design and construction services’’ 

16 means— 

17 (A) site planning and landscape design; 

18 (B) architectural and engineering services 

19 (including surveying and mapping defined in 

20 section 1101 of title 40, United States Code); 

21 (C) interior design; 

22 (D) performance of substantial construction 

23 work for facility, infrastructure, and environ24 mental restoration projects; 

25 (E) delivery and supply of construction ma26 terials to construction sites; or 


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1 (F) construction or substantial alteration of 

2 public buildings or public works; and 

3 (2) the term ‘‘reverse auction’’ means, with re4 spect to procurement by an agency— 

5 (A) a real-time auction conducted through 

6 an electronic medium among 2 or more offerors 

7 who compete by submitting bids for a supply or 

8 service contract with the ability to submit re9 vised lower bids at any time before the closing of 

10 the auction; and 

11 (B) the award of the contract, delivery 

12 order, task order, or purchase order to the offer13 or, in whole or in part, based on the price ob14 tained through the auction process. 


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Calendar No. 656 

114TH CONGRESS 

2D SESSION S. 1526 

[Report No. 114–366] 

A BILL 

To amend title 10 and title 41, United States Code, 

other purposes. tors, and suppliers for work performed, and for available to construction contractors, subcontracStates Code, to improve the payment protections ments, to amend title 31 and title 41, United for design and construction services procureawarded, to prohibit the use of reverse auctions tracts for construction and design services are to improve the manner in which Federal conOCTOBER 27, 2016 

Reported with an amendment 


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