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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1526 Reported in Senate (RS)]

<DOC>

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

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

<DELETED>SECTION 1. SHORT TITLE; TABLE OF CONTENTS.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the 
``Construction Consensus Procurement Improvement Act of 
2015''.</DELETED>
<DELETED>    (b) Table of Contents.--The table of contents for this Act 
is as follows:</DELETED>

<DELETED>Sec. 1. Short title; table of contents.
<DELETED>Sec. 2. Congressional findings.
<DELETED>Sec. 3. Design-build construction process improvement.
<DELETED>Sec. 4. Prohibition on the use of a reverse auction for the 
                            award of a contract for design and 
                            construction services.
<DELETED>Sec. 5. Assuring payment protections for construction 
                            subcontractors and suppliers under an 
                            alternative to a Miller Act payment bond.
<DELETED>Sec. 6. SBA surety bond guarantee program.

<DELETED>SEC. 2. CONGRESSIONAL FINDINGS.</DELETED>

<DELETED>    Congress makes the following findings:</DELETED>
        <DELETED>    (1) The acquisition procedures that are often used 
        effectively to procure products and other forms of services are 
        not always appropriate for procurement of design and 
        construction services.</DELETED>
        <DELETED>    (2) Federal procurement officials often adopt 
        contracting techniques from the private sector and have used 
        those techniques effectively to procure products and 
        services.</DELETED>
        <DELETED>    (3) Design-build is a procurement technique 
        Federal officials have adopted from the private sector that has 
        worked well for procurement of design and construction 
        services.</DELETED>
        <DELETED>    (4) The current statutory framework for design-
        build could benefit from legislative refinement.</DELETED>
        <DELETED>    (5) Reverse auctions are another procurement 
        technique Federal officials have adopted from the private 
        sector and used successfully to award contracts for the 
        purchase of products that are commercially equivalent to 
        commodities.</DELETED>
        <DELETED>    (6) Despite their success in other contexts, 
        reverse auctions are generally inappropriate for procurement of 
        design and construction services, given the unique nature of 
        each such project.</DELETED>
        <DELETED>    (7) To ensure payment protection for contractors, 
        subcontractors, and suppliers working on Federal construction 
        projects, bonds backed by individual sureties must be placed in 
        the care and custody of the Federal Government and be supported 
        by assets that are real, sufficient, verifiable, and readily 
        convertible into cash.</DELETED>

<DELETED>SEC. 3. DESIGN-BUILD CONSTRUCTION PROCESS 
              IMPROVEMENT.</DELETED>

<DELETED>    (a) Civilian Contracts.--</DELETED>
        <DELETED>    (1) In general.--Section 3309 of title 41, United 
        States Code, is amended--</DELETED>
                <DELETED>    (A) by amending subsection (b) to read as 
                follows:</DELETED>
<DELETED>    ``(b) Criteria for Use.--</DELETED>
        <DELETED>    ``(1) Contracts with a value of at least 
        $750,000.--Two-phase selection procedures shall be used for 
        entering into a contract for the design and construction of a 
        public building, facility, or work when a contracting officer 
        determines that the contract has a value of $750,000 or 
        greater, as adjusted for inflation in accordance with section 
        1908 of this title.</DELETED>
        <DELETED>    ``(2) Contracts with a value less than $750,000.--
        For projects that a contracting officer determines have a value 
        of less than $750,000, the contracting officer shall make a 
        determination whether two-phase selection procedures are 
        appropriate for use for entering into a contract for the design 
        and construction of a public building, facility, or work when--
        </DELETED>
                <DELETED>    ``(A) the contracting officer anticipates 
                that 3 or more offers will be received for the 
                contract;</DELETED>
                <DELETED>    ``(B) design work must be performed before 
                an offeror can develop a price or cost proposal for the 
                contract;</DELETED>
                <DELETED>    ``(C) the offeror will incur a substantial 
                amount of expense in preparing the offer; and</DELETED>
                <DELETED>    ``(D) the contracting officer has 
                considered information such as--</DELETED>
                        <DELETED>    ``(i) the extent to which the 
                        project requirements have been adequately 
                        defined;</DELETED>
                        <DELETED>    ``(ii) the time constraints for 
                        delivery of the project;</DELETED>
                        <DELETED>    ``(iii) the capability and 
                        experience of potential contractors;</DELETED>
                        <DELETED>    ``(iv) the suitability of the 
                        project for use of the two-phase selection 
                        procedures;</DELETED>
                        <DELETED>    ``(v) the capability of the agency 
                        to manage the two-phase selection process; 
                        and</DELETED>
                        <DELETED>    ``(vi) other criteria established 
                        by the agency.''; and</DELETED>
                <DELETED>    (B) in subsection (d), by striking ``The 
                maximum number specified in the solicitation shall not 
                exceed 5 unless the agency determines with respect to'' 
                and all that follows through the period at the end and 
                inserting the following: ``The maximum number specified 
                in the solicitation shall not exceed 5 unless the head 
                of the contracting activity, delegable to a level no 
                lower than the senior contracting official within the 
                contracting activity, approves the contracting 
                officer's justification that an individual solicitation 
                must have greater than 5 finalists to be in the Federal 
                Government's interest. The contracting officer shall 
                provide written documentation of how a maximum number 
                of offerors exceeding 5 is consistent with the purposes 
                and objectives of the two-phase selection 
                process.''.</DELETED>
        <DELETED>    (2) Annual reports.--</DELETED>
                <DELETED>    (A) In general.--Not later than November 
                30 of 2016, 2017, 2018, 2019, and 2020, the head of 
                each agency shall compile an annual report of each 
                instance in which the agency awarded a design-build 
                contract pursuant to section 3309 of title 41, United 
                States Code, during the fiscal year ending in such 
                calendar year, in which--</DELETED>
                        <DELETED>    (i) more than 5 finalists were 
                        selected for phase-two requests for proposals; 
                        or</DELETED>
                        <DELETED>    (ii) the contract was awarded 
                        without using two-phase selection 
                        procedures.</DELETED>
                <DELETED>    (B) Public availability.--The Director of 
                the Office of Management and Budget shall facilitate 
                public access to the reports, including by posting them 
                on a publicly available Internet website. A notice of 
                the availability of each report shall be published in 
                the Federal Register.</DELETED>
<DELETED>    (b) Defense Contracts.--</DELETED>
        <DELETED>    (1) In general.--Section 2305a of title 10, United 
        States Code, is amended--</DELETED>
                <DELETED>    (A) by amending subsection (b) to read as 
                follows:</DELETED>
<DELETED>    ``(b) Criteria for Use.--</DELETED>
        <DELETED>    ``(1) Contracts with a value of at least 
        $750,000.--Two-phase selection procedures shall be used for 
        entering into a contract for the design and construction of a 
        public building, facility, or work when a contracting officer 
        determines that the contract has a value of $750,000 or 
        greater, as adjusted for inflation in accordance with section 
        1908 of title 41, United States Code.</DELETED>
        <DELETED>    ``(2) Contracts with a value less than $750,000.--
        For projects that a contracting officer determines have a value 
        of less than $750,000, the contracting officer shall make a 
        determination whether two-phase selection procedures are 
        appropriate for use for entering into a contract for the design 
        and construction of a public building, facility, or work when--
        </DELETED>
                <DELETED>    ``(A) the contracting officer anticipates 
                that 3 or more offers will be received for the 
                contract;</DELETED>
                <DELETED>    ``(B) design work must be performed before 
                an offeror can develop a price or cost proposal for the 
                contract;</DELETED>
                <DELETED>    ``(C) the offeror will incur a substantial 
                amount of expense in preparing the offer; and</DELETED>
                <DELETED>    ``(D) the contracting officer has 
                considered information such as--</DELETED>
                        <DELETED>    ``(i) the extent to which the 
                        project requirements have been adequately 
                        defined;</DELETED>
                        <DELETED>    ``(ii) the time constraints for 
                        delivery of the project;</DELETED>
                        <DELETED>    ``(iii) the capability and 
                        experience of potential contractors;</DELETED>
                        <DELETED>    ``(iv) the suitability of the 
                        project for use of the two-phase selection 
                        procedures;</DELETED>
                        <DELETED>    ``(v) the capability of the agency 
                        to manage the two-phase selection process; 
                        and</DELETED>
                        <DELETED>    ``(vi) other criteria established 
                        by the Department of Defense.''; and</DELETED>
                <DELETED>    (B) in subsection (d), by striking ``The 
                maximum number specified in the solicitation shall not 
                exceed 5 unless the agency determines with respect to'' 
                and all that follows through the period at the end and 
                inserting the following: ``The maximum number specified 
                in the solicitation shall not exceed 5 unless the head 
                of the contracting activity approves the contracting 
                officer's justification that an individual solicitation 
                must have greater than 5 finalists to be in the Federal 
                Government's interest. The contracting officer shall 
                provide written documentation of how a maximum number 
                of offerors exceeding 5 is consistent with the purposes 
                and objectives of the two-phase selection 
                process.''.</DELETED>
        <DELETED>    (2) Annual reports.--</DELETED>
                <DELETED>    (A) In general.--Not later than November 
                30 of 2016, 2017, 2018, 2019, and 2020, the Secretary 
                of Defense shall compile an annual report of each 
                instance in which the Department awarded a design-build 
                contract pursuant to section 2305a of title 10, United 
                States Code, during the fiscal year ending in such 
                calendar year, in which--</DELETED>
                        <DELETED>    (i) more than 5 finalists were 
                        selected for phase-two requests for proposals; 
                        or</DELETED>
                        <DELETED>    (ii) the contract was awarded 
                        without using two-phase selection 
                        procedures.</DELETED>
                <DELETED>    (B) Public availability.--The Director of 
                the Office of Management and Budget shall facilitate 
                public access to the reports, including by posting them 
                on a publicly available Internet website. A notice of 
                the availability of each report shall be published in 
                the Federal Register.</DELETED>
<DELETED>    (c) GAO Reports.--</DELETED>
        <DELETED>    (1) Civilian contracts.--Not later than 270 days 
        after the deadline for the final reports required under 
        subsection (f) of section 3309 of title 41, United States Code, 
        as added by subsection (a)(1), the Comptroller General of the 
        United States shall issue a report analyzing the compliance of 
        the various Federal agencies with the requirements of such 
        section.</DELETED>
        <DELETED>    (2) Defense contracts.--Not later than 270 days 
        after the deadline for the final reports required under 
        subsection (f) of section 2305a of title 10, United States 
        Code, as added by subsection (b)(1), the Comptroller General of 
        the United States shall issue a report analyzing the compliance 
        of the Department of Defense with the requirements of such 
        section.</DELETED>

<DELETED>SEC. 4. PROHIBITION ON THE USE OF A REVERSE AUCTION FOR THE 
              AWARD OF A CONTRACT FOR DESIGN AND CONSTRUCTION 
              SERVICES.</DELETED>

<DELETED>    (a) Prohibition.--Not later than 180 days after the date 
of the enactment of this Act, the Federal Acquisition Regulatory 
Council, in consultation with the Administrator for Federal Procurement 
Policy, shall amend the Federal Acquisition Regulation to prohibit the 
use of reverse auctions for awarding contracts for construction and 
design services.</DELETED>
<DELETED>    (b) Definitions.--For purposes of this section--</DELETED>
        <DELETED>    (1) the term ``design and construction services'' 
        means--</DELETED>
                <DELETED>    (A) site planning and landscape 
                design;</DELETED>
                <DELETED>    (B) architectural and engineering services 
                (including surveying and mapping defined in section 
                1101 of title 40, United States Code);</DELETED>
                <DELETED>    (C) interior design;</DELETED>
                <DELETED>    (D) performance of construction work for 
                facility, infrastructure, and environmental restoration 
                projects;</DELETED>
                <DELETED>    (E) delivery and supply of construction 
                materials to construction sites; and</DELETED>
                <DELETED>    (F) construction or substantial alteration 
                or repair of public buildings or public works; 
                and</DELETED>
        <DELETED>    (2) the term ``reverse auction'' means, with 
        respect to procurement by an agency--</DELETED>
                <DELETED>    (A) a real-time auction conducted through 
                an electronic medium between a group of offerors who 
                compete against each other by submitting bids for a 
                contract or task order with the ability to submit 
                revised bids throughout the course of the auction; 
                and</DELETED>
                <DELETED>    (B) the award of the contract or task 
                order to the offeror who submits the lowest 
                bid.</DELETED>

<DELETED>SEC. 5. ASSURING PAYMENT PROTECTIONS FOR CONSTRUCTION 
              SUBCONTRACTORS AND SUPPLIERS UNDER AN ALTERNATIVE TO A 
              MILLER ACT PAYMENT BOND.</DELETED>

<DELETED>    Chapter 93 of subtitle VI of title 31, United States Code, 
is amended--</DELETED>
        <DELETED>    (1) by adding at the end the following new 
        section:</DELETED>
<DELETED>``Sec. 9310. Individual sureties</DELETED>
<DELETED>    ``If another applicable law or regulation permits the 
acceptance of a bond from a surety that is not subject to sections 9305 
and 9306 and is based on a pledge of assets by the surety, the assets 
pledged by such surety shall--</DELETED>
        <DELETED>    ``(1) consist of eligible obligations described 
        under section 9303(a); and</DELETED>
        <DELETED>    ``(2) be submitted to the official of the 
        Government required to approve or accept the bond, who shall 
        deposit the assets with a depository described under section 
        9303(b).''; and</DELETED>
        <DELETED>    (2) in the table of sections for such chapter, by 
        adding at the end the following new item:</DELETED>

<DELETED>``9310. Individual sureties.''.

<DELETED>SEC. 6. SBA SURETY BOND GUARANTEE PROGRAM.</DELETED>

<DELETED>    Section 411(c)(1) of the Small Business Investment Act of 
1958 (15 U.S.C. 694b(c)(1)) is amended by striking ``70'' and inserting 
``90''.</DELETED>

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Construction 
Consensus Procurement Improvement Act of 2015''.
    (b) Table of Contents.--The table of contents for 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. 2. CONGRESSIONAL FINDINGS.

    Congress makes the following findings:
            (1) The acquisition procedures that are often used 
        effectively to procure products and other forms of services are 
        not always appropriate for procurement of design and 
        construction services.
            (2) Federal procurement officials often adopt contracting 
        techniques from the private sector and have used those 
        techniques effectively to procure products and services.
            (3) Design-build is a procurement technique Federal 
        officials have adopted from the private sector that has worked 
        well for procurement of design and construction services.
            (4) The current statutory framework for design-build could 
        benefit from legislative refinement.
            (5) Reverse auctions are another procurement technique 
        Federal officials have adopted from the private sector and used 
        successfully to award contracts for the purchase of products 
        that are commercially equivalent to commodities.
            (6) Despite their success in other contexts, reverse 
        auctions are generally inappropriate for procurement of design 
        and construction services, given the unique nature of each such 
        project.

SEC. 3. DESIGN-BUILD CONSTRUCTION PROCESS IMPROVEMENT.

    (a) Civilian Contracts.--
            (1) In general.--Section 3309(b) of title 41, United States 
        Code, is amended to read as follows:
    ``(b) Criteria for Use.--
            ``(1) Contracts with a value of at least $750,000.--Two-
        phase selection procedures shall be used for entering into a 
        contract for the design and construction of a public building, 
        facility, or work when a contracting officer determines that 
        the project has a value of $750,000 or greater, as adjusted for 
        inflation in accordance with section 1908 of this title.
            ``(2) Contracts with a value less than $750,000.--For 
        projects that a contracting officer determines have a value of 
        less than $750,000, the contracting officer shall make a 
        determination whether two-phase selection procedures are 
        appropriate for use for entering into a contract for the design 
        and construction of a public building, facility, or work when--
                    ``(A) the contracting officer anticipates that 3 or 
                more offers will be received for the contract;
                    ``(B) design work must be performed before an 
                offeror can develop a price or cost proposal for the 
                contract;
                    ``(C) the offeror will incur a substantial amount 
                of expense in preparing the offer; and
                    ``(D) the contracting officer has considered 
                information such as--
                            ``(i) the extent to which the project 
                        requirements have been adequately defined;
                            ``(ii) the time constraints for delivery of 
                        the project;
                            ``(iii) the capability and experience of 
                        potential contractors;
                            ``(iv) the suitability of the project for 
                        use of the two-phase selection procedures;
                            ``(v) the capability of the agency to 
                        manage the two-phase selection process; and
                            ``(vi) other criteria established by the 
                        agency.''.
            (2) Annual reports.--
                    (A) In general.--Not later than November 30 of 
                2017, 2018, 2019, 2020, and 2021, the head of each 
                agency shall compile an annual report of each instance 
                in which the agency awarded a design-build contract 
                pursuant to section 3309 of title 41, United States 
                Code, during the fiscal year ending in such calendar 
                year, in which--
                            (i) more than 5 finalists were selected for 
                        phase-two requests for proposals; or
                            (ii) the contract or order was awarded 
                        without using two-phase selection procedures.
                    (B) Public availability.--The Director of the 
                Office of Management and Budget shall facilitate public 
                access to the reports, including by posting them on a 
                publicly available Internet website. A notice of the 
                availability of each report shall be published in the 
                Federal Register.
    (b) GAO Reports.--Not later than 270 days after the deadline for 
the final reports required under subsection (f) of section 3309 of 
title 41, United States Code, as added by subsection (a)(1), the 
Comptroller General of the United States shall issue a report analyzing 
the compliance of the various Federal agencies with the requirements of 
such section.

SEC. 4. PROHIBITION ON THE USE OF A REVERSE AUCTION FOR THE AWARD OF A 
              CONTRACT FOR DESIGN AND CONSTRUCTION SERVICES.

    (a) Finding.--Congress finds that, in contrast to a traditional 
auction in which the buyers bid up the price, sellers bid down the 
price in a reverse auction.
    (b) Prohibition.--Not later than 180 days after the date of the 
enactment of this Act, the Federal Acquisition Regulatory Council, in 
consultation with the Administrator for Federal Procurement Policy, 
shall amend the Federal Acquisition Regulation to prohibit the use of 
reverse auctions as part of the two-phase selection procedure for 
awarding contracts for construction and design services.
    (c) Definitions.--For purposes of this section--
            (1) the term ``design and construction services'' means--
                    (A) site planning and landscape design;
                    (B) architectural and engineering services 
                (including surveying and mapping defined in section 
                1101 of title 40, United States Code);
                    (C) interior design;
                    (D) performance of substantial construction work 
                for facility, infrastructure, and environmental 
                restoration projects;
                    (E) delivery and supply of construction materials 
                to construction sites; or
                    (F) construction or substantial alteration of 
                public buildings or public works; and
            (2) the term ``reverse auction'' means, with respect to 
        procurement by an agency--
                    (A) a real-time auction conducted through an 
                electronic medium among 2 or more offerors who compete 
                by submitting bids for a supply or service contract 
                with the ability to submit revised lower bids at any 
                time before the closing of the auction; and
                    (B) the award of the contract, delivery order, task 
                order, or purchase order to the offeror, in whole or in 
                part, based on the price obtained through the auction 
                process.
                                                       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, 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.

_______________________________________________________________________

                            October 27, 2016

                       Reported with an amendment
```