103D CONGRESS

2D SESSION S. 1587

AMENDMENT
In the House of Representatives, U. S.,

June 27, 1994.

Resolved, That the bill from the Senate (S. 1587) entitled ‘‘An Act to revise and streamline the acquisition laws of

the Federal Government, and for other purposes’’, do pass

with the following

AMENDMENT:

Strike out all after the enacting clause, and insert:

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Federal Acquisition Im3 provement Act of 1994’’.

4 SEC. 2. TABLE OF CONTENTS.

5 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I—CONTRACT FORMATION

Subtitle A—Competition Statutes

PART I—ARMED SERVICES ACQUISITIONS

SUBPART A—COMPETITION REQUIREMENTS

Sec. 1001. References to Federal Acquisition Regulation.

Sec. 1002. Establishment or maintenance of alternative sources of supply.

Sec. 1003. Clarification of approval authority for use of procedures other than

full and open competition.

SUBPART B—PLANNING, SOLICITATION, EVALUATION, AND AWARD

Sec. 1011. Source selection factors.

Sec. 1012. Solicitation provision regarding evaluation of purchase options.

Sec. 1013. Prompt notice of award.

Sec. 1014. Post-award debriefings.

Sec. 1015. Protest file.

Sec. 1016. Agency decisions on protests.

Sec. 1017. Award of multiple contracts.
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SUBPART C—KINDS OF CONTRACTS

Sec. 1021. Repeal of requirement for secretarial determination regarding use of

cost type or incentive contract.

SUBPART D—MISCELLANEOUS PROVISIONS FOR THE ENCOURAGEMENT OF

COMPETITION

Sec. 1031. Repeal of requirement for annual report by advocates for competition.

PART II—CIVILIAN AGENCY ACQUISITIONS

SUBPART A—COMPETITION REQUIREMENTS

Sec. 1051. References to Federal Acquisition Regulation.

Sec. 1052. Establishment or maintenance of alternative sources of supply.

Sec. 1053. Clarification of approval authority for use of procedures other than

full and open competition.

SUBPART B—PLANNING, SOLICITATION, EVALUATION, AND AWARD

Sec. 1061. Solicitation, evaluation, and award.

Sec. 1062. Solicitation provision regarding evaluation of purchase options.

Sec. 1063. Prompt notice of award.

Sec. 1064. Post-award debriefings.

Sec. 1065. Protest file.

Sec. 1066. Agency decisions on protests.

Sec. 1067. Award of multiple contracts.

SUBPART C—KINDS OF CONTRACTS

Sec. 1071. Repeal of agency head determination regarding use of cost type or incentive contract.

Sec. 1072. Multiyear contracting authority.

Sec. 1073. Severable services contracts crossing fiscal years.

PART III—ACQUISITIONS GENERALLY

Sec. 1091. Policy regarding consideration of contractor past performance.

Sec. 1092. Repeal of requirement for annual report on competition.

Sec. 1093. Discouragement of nonstandard contract clauses.

Subtitle B—Truth in Negotiations

PART I—ARMED SERVICES ACQUISITIONS

Sec. 1201. Stabilization of dollar threshold of applicability.

Sec. 1202. Exceptions to cost or pricing data requirements.

Sec. 1203. Right of United States to examine contractor records.

Sec. 1204. Consistency of time references.

Sec. 1205. Repeal of superseded provision.

PART II—CIVILIAN AGENCY ACQUISITIONS

Sec. 1251. Revision of civilian agency provisions to ensure uniform treatment of

cost or pricing data.

Sec. 1252. Repeal of obsolete provision.
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Subtitle C—Research and Development

Sec. 1301. Competition requirement for awards of grants and contracts to nonprofit organizations.

Subtitle D—Procurement Protests

PART I—PROTESTS TO THE COMPTROLLER GENERAL

Sec. 1401. Protest defined.

Sec. 1402. Review of protests and effect on contracts pending decision.

Sec. 1403. Decisions on protests.

Sec. 1404. Regulations.

PART II—PROTESTS IN PROCUREMENTS OF AUTOMATIC DATA PROCESSING

Sec. 1431. Revocation of delegations of procurement authority.

Sec. 1432. Authority of the General Services Administration Board of Contract

Appeals.

Sec. 1433. Periods for certain actions.

Sec. 1434. Dismissals of protests.

Sec. 1435. Award of costs.

Sec. 1436. Dismissal agreements.

Sec. 1437. Matters to be covered in regulations.

Sec. 1438. Definition of protest.

Sec. 1439. Oversight of acquisition of automatic data processing equipment by

Federal agencies.

Subtitle E—Policy, Definitions, and Other Matters

PART I—ARMED SERVICES ACQUISITIONS

Sec. 1501. Congressional defense procurement policy.

Sec. 1502. Definitions.

Sec. 1503. Delegation of procurement functions.

Sec. 1504. Determinations and decisions.

Sec. 1505. Restrictions on undefinitized contractual actions.

Sec. 1506. Repeal of requirement relating to production special tooling and production special test equipment.

Sec. 1507. Regulations for bids.

PART II—CIVILIAN AGENCY ACQUISITIONS

Sec. 1551. Definitions.

Sec. 1552. Delegation of procurement functions.

Sec. 1553. Determinations and decisions.

Sec. 1554. Repeals.

Sec. 1555. Cooperative purchasing.

TITLE II—CONTRACT ADMINISTRATION

Subtitle A—Contract Payment

PART I—ARMED SERVICES ACQUISITIONS

Sec. 2001. Contract financing.

Sec. 2002. Repeal of vouchering procedures section.
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PART II—CIVILIAN AGENCY ACQUISITIONS

Sec. 2051. Contract financing.

PART III—ACQUISITIONS GENERALLY

Sec. 2061. Interest penalty on contract close-out lag-time.

Subtitle B—Cost Principles

PART I—ARMED SERVICES ACQUISITIONS

Sec. 2101. Allowable contract costs.

Sec. 2102. Repeal of authority for contract profit controls during emergency periods.

PART II—CIVILIAN AGENCY ACQUISITIONS

Sec. 2151. Allowable contract costs.

Sec. 2152. Revision of cost principle relating to entertainment, gift, and recreation costs for contractor employees.

PART III—ACQUISITIONS GENERALLY

Sec. 2161. Travel expenses of government contractors.

Subtitle C—Audit and Access to Records

PART I—ARMED SERVICES ACQUISITIONS

Sec. 2201. Consolidation and revision of authority to examine records of contractors.

PART II—CIVILIAN AGENCY ACQUISITIONS

Sec. 2251. Authority to examine records of contractors.

Subtitle D—Cost Accounting Standards

Sec. 2301. Repeal of obsolete deadline regarding procedural regulations for the

Cost Accounting Standards Board.

Subtitle E—Administration of Contract Provisions Relating to

Price, Delivery, and Product Quality

Sec. 2401. Clarification of provision relating to quality control of certain spare

parts.

Sec. 2402. Contractor guarantees regarding weapon systems.

Subtitle F—Claims and Disputes

Sec. 2501. Certification of contract claims.

Sec. 2502. Shipbuilding claims.

TITLE III—MAJOR SYSTEMS AND SERVICE SPECIFIC

STATUTES

Subtitle A—Major Systems Statutes

Sec. 3001. Weapon development and procurement schedules.

Sec. 3002. Selected Acquisition Report requirement.
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Sec. 3003. Unit cost report requirement.

Sec. 3004. Requirement for independent cost estimate and manpower estimate before development or production.

Sec. 3005. Baseline description.

Sec. 3006. Repeal of requirement for competitive prototyping for major programs.

Sec. 3007. Repeal of requirement for competitive alternative sources for major

programs.

Subtitle B—Testing Statutes

Sec. 3011. Authorization of less than full-up testing.

Sec. 3012. Limitation on quantities to be procured for low-rate initial production.

Sec. 3013. Operational test and evaluation of defense acquisition programs.

Subtitle C—Civil Reserve Air Fleet

Sec. 3021. Definition of contractor.

Sec. 3022. Consolidation of provisions relating to contractual commitment of aircraft.

Sec. 3023. Use of military installations by contractors.

Subtitle D—Miscellaneous

Sec. 3051. Regulations on procurement, production, warehousing, and supply distribution functions.

Sec. 3052. Repeal of requirements regarding product evaluation activities.

Sec. 3053. Codification and revision of limitation on lease of vessels, aircraft, and

vehicles.

Sec. 3054. Repeal of application of Public Contracts Act to certain naval vessel

contracts.

TITLE IV—SIMPLIFIED ACQUISITION THRESHOLD AND SOCIOECONOMIC, SMALL BUSINESS, AND MISCELLANEOUS

LAWS

Subtitle A—Simplified Acquisition Threshold

PART I—ESTABLISHMENT OF THRESHOLD

Sec. 4001. Establishment of simplified acquisition threshold.

Sec. 4002. Federal acquisition computer network architecture.

Sec. 4003. Implementation in Armed Services.

Sec. 4004. Implementation in civilian agencies.

PART II—SIMPLIFICATION OF PROCEDURES

Sec. 4011. Procedures for purchases below micro-purchase threshold.

Sec. 4012. Procurement notice.

Sec. 4013. GAO test and report on performance of simplified acquisition threshold.

PART III—INAPPLICABILITY OF LAWS TO ACQUISITIONS NOT IN EXCESS OF

SIMPLIFIED ACQUISITION THRESHOLD

SUBPART A—GENERALLY

Sec. 4021. Inapplicability of future enacted procurement laws to contracts not exceeding the simplified acquisition threshold.
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SUBPART B—ARMED SERVICES ACQUISITIONS

Sec. 4031. Inapplicability of certain provisions of law.

Sec. 4032. Conforming amendments relating to inapplicability of certain provisions of law.

SUBPART C—CIVILIAN AGENCY ACQUISITIONS

Sec. 4041. Inapplicability of certain provisions of law.

Sec. 4042. Conforming amendments relating to inapplicability of certain provisions of law.

SUBPART D—ACQUISITIONS GENERALLY

Sec. 4051. Conformance of certain procurement integrity requirements.

Sec. 4052. Inapplicability of the Drug-Free Workplace Act of 1988.

PART IV—CONFORMING AMENDMENTS

Sec. 4071. Armed Services acquisitions.

Sec. 4072. Civilian agency acquisitions.

Sec. 4073. Office of Federal Procurement Policy Act.

PART V—REVISION OF REGULATIONS

Sec. 4081. Revision required.

Subtitle B—Socioeconomic and Small Business Laws

Sec. 4101. Small business provisions.

Sec. 4102. Payment protections for subcontractors and suppliers.

Sec. 4103. Extension of test program for negotiation of comprehensive small business subcontracting plans.

Sec. 4104. Small Business Procurement Advisory Council.

Sec. 4105. Maximum practicable opportunities for apprentices on Federal construction projects.

Subtitle C—Miscellaneous Acquisition Laws

Sec. 4151. Restriction on use of noncompetitive procedures for procurement from

a specified source.

Sec. 4152. Repeal of obsolete provision.

TITLE V—STANDARDS OF CONDUCT

Sec. 5001. Contracting functions performed by Federal personnel.

Sec. 5002. Repeal of executed requirement for study and report.

Sec. 5003. Interests of Members of Congress.

Sec. 5004. Waiting period for significant changes proposed for acquisition regulations.

Sec. 5005. Repeal of superseded and obsolete laws.

TITLE VI—DEFENSE TRADE AND COOPERATION

Sec. 6001. Exception to Buy American Act for micro-purchases.

Sec. 6002. Policy on purchase of foreign goods.

Sec. 6003. Consolidation of miscellaneous procurement limitations.

Sec. 6004. Repeal of obsolete and redundant provisions.
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TITLE VII—COMMERCIAL ITEMS

Subtitle A—Definitions and Regulations

Sec. 7001. Definitions.

Sec. 7002. Regulations on acquisition of commercial items.

Subtitle B—Armed Services Acquisitions

Sec. 7101. Establishment of new chapter in title 10.

Sec. 7102. Definitions.

Sec. 7103. Preference for acquisition of commercial items.

Sec. 7104. Exception to cost or pricing data requirements for commercial items.

Sec. 7105. Principle of construction with future laws.

Sec. 7106. Inapplicability of certain provisions of law.

Sec. 7107. Conforming amendments relating to inapplicability of certain provisions of law.

Subtitle C—Civilian Agency Acquisitions

Sec. 7201. Definitions.

Sec. 7202. Preference for acquisition of commercial items.

Sec. 7203. Exception to cost or pricing data requirements for commercial items.

Sec. 7204. Principle of construction with future laws.

Sec. 7205. Inapplicability of certain provisions of law.

Sec. 7206. Conforming amendments relating to inapplicability of certain provisions of law.

Subtitle D—Acquisitions Generally

Sec. 7301. Conforming amendment relating to inapplicability of certain provisions of law.

Sec. 7302. Flexible deadlines for submission of offers of commercial items.

Sec. 7303. Additional responsibilities for advocates for competition.

Sec. 7304. Provisions not affected.

Sec. 7305. Comptroller General review of Federal Government use of market research.

TITLE VIII—MISCELLANEOUS PROVISIONS

Sec. 8001. Test program.

Sec. 8002. Study of participation by certain small businesses in Federal procurement.

Sec. 8003. Furtherance of contract goal for small disadvantaged businesses and

certain institutions of higher education.

Sec. 8004. Education and training.

Sec. 8005. Department of Defense acquisition of intellectual property rights.

Sec. 8006. Sense of Congress on negotiated rulemaking.

Sec. 8007. Vendor and employee excellence awards.

Sec. 8008. Codification of accounting requirement for contracted advisory and assistance services.

Sec. 8009. Technical and clerical amendments.

TITLE IX—EFFECTIVE DATES AND REGULATIONS

Sec. 9001. Effective dates.

Sec. 9002. Regulations.

Sec. 9003. Evaluation by the Comptroller General.
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1 TITLE I—CONTRACT FORMATION

2 Subtitle A—Competition Statutes

3 PART I—ARMED SERVICES ACQUISITIONS

4 Subpart A—Competition Requirements

5 SEC. 1001. REFERENCES TO FEDERAL ACQUISITION REGU6 LATION.

7 Section 2304 of title 10, United States Code, is amend8 ed—

9 (1) in subsection (a)(1)(A), by striking out

10 ‘‘modifications’’ and all that follows through ‘‘note)’’

11 and inserting in lieu thereof ‘‘Federal Acquisition

12 Regulation’’; and

13 (2) in subsection (g)(1), by striking out ‘‘regula14 tions modified’’ and all that follows through ‘‘note)’’

15 and inserting in lieu thereof ‘‘Federal Acquisition

16 Regulation’’.

17 SEC. 1002. ESTABLISHMENT OR MAINTENANCE OF ALTER18 NATIVE SOURCES OF SUPPLY.

19 (a) PROHIBITION ON USE OF CLASSES OF PURCHASES

20 OR CONTRACTS.—Section 2304(b) of title 10, United States

21 Code, is amended—

22 (1) by redesignating paragraphs (2) and (3) as

23 paragraphs (3) and (4), respectively;

24 (2) by inserting after paragraph (1) the follow25 ing new paragraph (2):
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1 ‘‘(2) A determination under paragraph (1) may not

2 be made for a class of purchases or contracts.’’; and

3 (3) in paragraph (4), as redesignated by para4 graph (1), by striking out ‘‘paragraphs (1) and (2)’’

5 and inserting in lieu thereof ‘‘paragraphs (1) and

6 (3)’’.

7 (b) ADDITIONAL JUSTIFICATION FOR ESTABLISHING

8 OR MAINTAINING ALTERNATIVE SOURCES.—Section

9 2304(b)(1) of such title is amended—

10 (1) by striking out ‘‘or’’ at the end of subpara11 graph (B);

12 (2) by striking out the period at the end of sub13 paragraph (C) and inserting in lieu thereof a semi14 colon; and

15 (3) by adding at the end the following new sub16 paragraphs:

17 ‘‘(D) would ensure the continuous availability of

18 a reliable source of supply of such property or service;

19 ‘‘(E) would satisfy projected needs for such prop20 erty or service determined on the basis of a history of

21 high demand for the property or service; or

22 ‘‘(F) in the case of medical supplies, safety sup23 plies, or emergency supplies, would satisfy a critical

24 need for such supplies.’’.
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1 SEC. 1003. CLARIFICATION OF APPROVAL AUTHORITY FOR

2 USE OF PROCEDURES OTHER THAN FULL

3 AND OPEN COMPETITION.

4 Section 2304(f)(1)(B)(i) of title 10, United States

5 Code, is amended by inserting before the semicolon at the

6 end the following: ‘‘or by an official referred to in clause

7 (ii), (iii), or (iv)’’.

8 Subpart B—Planning, Solicitation, Evaluation, and

9 Award

10 SEC. 1011. SOURCE SELECTION FACTORS.

11 (a) CONTENT OF SOLICITATION.—Section 2305(a) of

12 title 10, United States Code, is amended—

13 (1) in paragraph (2)—

14 (A) in subparagraph (A)(i)—

15 (i) by striking out ‘‘(and significant

16 subfactors)’’ and inserting in lieu thereof

17 ‘‘and significant subfactors’’,

18 (ii) by inserting after ‘‘price-related

19 factors’’ the following: ‘‘and subfactors’’,

20 and

21 (iii) by inserting after ‘‘nonprice-relat22 ed factors’’ the following: ‘‘and subfactors’’;

23 and

24 (B) in subparagraph (B)(ii), by striking

25 out subclause (I) and inserting in lieu thereof the

26 following:
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1 ‘‘(I) either a statement that the proposals

2 are intended to be evaluated with, and award

3 made after, discussions with the offerors, or a

4 statement that the proposals are intended to be

5 evaluated, and award made, without discussions

6 with the offerors (other than discussions con7 ducted for the purpose of minor clarification)

8 unless discussions are determined to be nec9 essary; and’’; and

10 (2) by striking out paragraph (3) and inserting

11 in lieu thereof the following:

12 ‘‘(3)(A) In prescribing the evaluation factors to be in13 cluded in each solicitation for competitive proposals, an

14 agency head—

15 ‘‘(i) shall clearly establish the relative impor16 tance assigned to the evaluation factors and

17 subfactors, including the quality of the product or

18 services to be provided (including technical capabil19 ity, management capability, prior experience, and

20 past performance of the offeror);

21 ‘‘(ii) shall include cost or price to the Federal

22 Government as an evaluation factor that must be con23 sidered in the evaluation of proposals; and
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1 ‘‘(iii) shall disclose to offerors whether all evalua2 tion factors other than cost or price, when combined,

3 are—

4 ‘‘(I) significantly more important than cost

5 or price;

6 ‘‘(II) approximately equal in importance to

7 cost or price; or

8 ‘‘(III) significantly less important than cost

9 or price.

10 ‘‘(B) The regulations implementing clause (iii) of sub11 paragraph (A) may not define the terms ‘significantly more

12 important’ and ‘significantly less important’ as specific

13 numeric weights that would be applied uniformly to all so14 licitations.

15 ‘‘(4) Nothing in this subsection prohibits an agency

16 from—

17 ‘‘(A) providing additional information in a so18 licitation, including numeric weights for all evalua19 tion factors and subfactors; or

20 ‘‘(B) stating in a solicitation that award will be

21 made to the offeror that meets the solicitation’s man22 datory requirements at the lowest cost or price.’’.

23 (b) AUTHORITY TO APPLY AMENDMENTS EARLY.—The

24 head of an agency may apply the amendments made by

25 this section to solicitations issued before the effective date
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1 specified in section 9001(a) and to contracts awarded pur2 suant to those solicitations. The head of the agency shall

3 publish in the Federal Register notice of any such earlier

4 date of application at least 10 days before that date.

5 SEC. 1012. SOLICITATION PROVISION REGARDING EVALUA6 TION OF PURCHASE OPTIONS.

7 Section 2305(a) of title 10, United States Code, as

8 amended by section 1011, is further amended by adding at

9 the end the following new paragraph:

10 ‘‘(4) The head of an agency, in issuing a solicitation

11 for a contract to be awarded using sealed bid procedures,

12 may not include in such solicitation a clause providing for

13 the evaluation of prices under the contract for options to

14 purchase additional supplies or services under the contract

15 unless the head of the agency has determined that there is

16 a reasonable likelihood that the options will be exercised.’’.

17 SEC. 1013. PROMPT NOTICE OF AWARD.

18 (a) SEALED BID PROCEDURES.—Paragraph (3) of sec19 tion 2305(b) of title 10, United States Code, is amended—

20 (1) in the last sentence, by striking out ‘‘trans21 mitting written notice’’ and inserting in lieu thereof

22 ‘‘transmitting, in writing or by electronic means, no23 tice’’; and

24 (2) by adding at the end the following: ‘‘Within

25 three days after the date of contract award, the head
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1 of the agency shall notify, in writing or by electronic

2 means, each bidder not awarded the contract that the

3 contract has been awarded.’’.

4 (b) COMPETITIVE PROPOSALS PROCEDURES.—Para5 graph (4)(B) of such section is amended in the second sen6 tence—

7 (1) by striking out ‘‘transmitting written notice’’

8 and inserting in lieu thereof ‘‘transmitting, in writ9 ing or by electronic means, notice’’; and

10 (2) by striking out ‘‘shall promptly notify’’ and

11 inserting in lieu thereof ‘‘, within three days after the

12 date of contract award, shall notify, in writing or by

13 electronic means,’’.

14 SEC. 1014. POST-AWARD DEBRIEFINGS.

15 Section 2305(b) of title 10, United States Code, is

16 amended—

17 (1) by redesignating paragraph (5) as para18 graph (6); and

19 (2) by inserting after paragraph (4) the follow20 ing new paragraph (5):

21 ‘‘(5)(A) When a contract is awarded by an agency on

22 the basis of competitive proposals, an unsuccessful offeror,

23 upon written request received by the agency within five

24 days after the date of receipt of notification of the contract

25 award, shall be debriefed and furnished the basis for the
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1 selection decision and contract award. The head of the agen2 cy shall debrief the offeror within, to the maximum extent

3 practicable, five days after receipt of the request by the

4 agency.

5 ‘‘(B) Such debriefing shall include, at a minimum, the

6 following:

7 ‘‘(i) The agency’s evaluation of the significant

8 weak or deficient factors in the offeror’s offer.

9 ‘‘(ii) The overall evaluated cost of the offer of the

10 offeror awarded the contract and the overall evaluated

11 cost of the offer of the debriefed offeror.

12 ‘‘(iii) The overall ranking of all offers and the

13 total technical and cost scores of all offers.

14 ‘‘(iv) A summary of the rationale for the award.

15 ‘‘(v) In the case of an offer by the debriefed

16 offeror that includes a commercial item that is an end

17 item under the contract, the makes and models of

18 similar commercial items included in the offer of the

19 offeror awarded the contract.

20 ‘‘(vi) Reasonable responses to questions posed by

21 the debriefed offeror as to whether source selection

22 procedures set forth in the solicitation, applicable reg23 ulations, and other applicable authorities were fol24 lowed by the agency.
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1 ‘‘(C) The debriefing shall not include point-by-point

2 comparisons of the debriefed offeror’s offer with other offers

3 and shall not disclose any information that is exempt from

4 disclosure under section 552 of title 5.

5 ‘‘(D) Each solicitation for competitive proposals shall

6 include a statement that information described in subpara7 graph (B) may be disclosed in post-award debriefings.

8 ‘‘(E) The contracting officer shall include a summary

9 of the debriefing in the contract file.’’.

10 SEC. 1015. PROTEST FILE.

11 Section 2305 of title 10, United States Code, is amend12 ed by adding at the end the following new subsection:

13 ‘‘(e) PROTEST FILE.—(1) If, in the case of a solicita14 tion for a contract issued by, or an award or proposed

15 award of a contract by, the head of an agency, a protest

16 is filed pursuant to the procedures in subchapter V of chap17 ter 35 of title 31 and an actual or prospective offeror so

18 requests, a file of the protest shall be established by the pro19 curing activity and reasonable access shall be provided to

20 actual or prospective offerors.

21 ‘‘(2) Information exempt from disclosure under section

22 552 of title 5 may be redacted in a file established pursuant

23 to paragraph (1) unless an applicable protective order pro24 vides otherwise.
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1 ‘‘(3) Regulations implementing this subsection shall be

2 consistent with the regulations regarding the preparation

3 and submission of an agency’s protest file (the so-called

4 ‘rule 4 file’) for protests to the General Services Board of

5 Contract Appeals under section 111 of the Federal Property

6 and Administrative Services Act of 1949 (41 U.S.C. 759).’’.

7 SEC. 1016. AGENCY DECISIONS ON PROTESTS.

8 Section 2305 of title 10, United States Code, as amend9 ed by section 1015, is further amended by adding at the

10 end the following new subsection:

11 ‘‘(f) DECISIONS ON PROTESTS.—If, in connection with

12 a protest, the head of an agency determines that a solicita13 tion, proposed award, or award does not comply with the

14 requirements of law or regulation, the head of the agency—

15 ‘‘(1) may take any action set out in subpara16 graphs (A) through (F) of subsection (b)(1) of section

17 3554 of title 31; and

18 ‘‘(2) may pay costs described in paragraph (1)

19 of section 3554(c) of title 31 within the limits referred

20 to in paragraph (2) of such section.’’.

21 SEC. 1017. AWARD OF MULTIPLE CONTRACTS.

22 Section 2305 of title 10, United States Code, as amend23 ed by section 1016, is further amended by adding at the

24 end the following new subsection:
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1 ‘‘(g) AWARD OF MULTIPLE CONTRACTS.—In procuring

2 any supply or service using competitive procedures, the

3 head of an agency may award more than one contract for

4 the same supply or service in any case in which the head

5 of the agency determines that it is in the best interests of

6 the Federal Government to award those contracts for the

7 purpose of maintaining a continuous source for the supply

8 or service.’’.

9 Subpart C—Kinds of Contracts

10 SEC. 1021. REPEAL OF REQUIREMENT FOR SECRETARIAL

11 DETERMINATION REGARDING USE OF COST

12 TYPE OR INCENTIVE CONTRACT.

13 Subsection (c) of section 2306 of title 10, United States

14 Code, is repealed.

15 Subpart D—Miscellaneous Provisions for the

16 Encouragement of Competition

17 SEC. 1031. REPEAL OF REQUIREMENT FOR ANNUAL REPORT

18 BY ADVOCATES FOR COMPETITION.

19 Subsection (c) of section 2318 of title 10, United States

20 Code, is repealed.
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1 PART II—CIVILIAN AGENCY ACQUISITIONS

2 Subpart A—Competition Requirements

3 SEC. 1051. REFERENCES TO FEDERAL ACQUISITION REGU4 LATION.

5 Section 303 of the Federal Property and Administra6 tive Services Act of 1949 (41 U.S.C. 253) is amended—

7 (1) in subsection (a)(1)(A), by striking out

8 ‘‘modifications’’ and all that follows through ‘‘of

9 1984’’ and inserting in lieu thereof ‘‘Federal Acquisi10 tion Regulation’’; and

11 (2) in subsection (g)(1), by striking out ‘‘regula12 tions modified’’ and all that follows through ‘‘of

13 1984,’’ and inserting in lieu thereof ‘‘Federal Acquisi14 tion Regulation’’.

15 SEC. 1052. ESTABLISHMENT OR MAINTENANCE OF ALTER16 NATIVE SOURCES OF SUPPLY.

17 (a) PROHIBITION ON USE OF CLASSES OF PURCHASES

18 OR CONTRACTS.—Section 303(b) of the Federal Property

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

20 is amended—

21 (1) by redesignating paragraphs (2) and (3) as

22 paragraphs (3) and (4), respectively;

23 (2) by inserting after paragraph (1) the follow24 ing new paragraph (2):

25 ‘‘(2) A determination under paragraph (1) may not

26 be made for a class of purchases or contracts.’’; and
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1 (3) in paragraph (4), as redesignated by para2 graph (1), by striking out ‘‘paragraphs (1) and (2)’’

3 and inserting in lieu thereof ‘‘paragraphs (1) and

4 (3)’’.

5 (b) ADDITIONAL JUSTIFICATION FOR ESTABLISHING

6 OR MAINTAINING ALTERNATIVE SOURCES.—Section

7 303(b)(1) of the Federal Property and Administrative Serv8 ices Act of 1949 (41 U.S.C. 253(b)(1)) is amended—

9 (1) by striking out ‘‘or’’ at the end of subpara10 graph (B);

11 (2) by striking out the period at the end of sub12 paragraph (C) and inserting in lieu thereof a semi13 colon; and

14 (3) by adding at the end the following new sub15 paragraphs:

16 ‘‘(D) would ensure the continuous availability of

17 a reliable source of supply of such property or service;

18 ‘‘(E) would satisfy projected needs for such prop19 erty or service determined on the basis of a history of

20 high demand for the property or service; or

21 ‘‘(F) in the case of medical supplies, safety sup22 plies, or emergency supplies, would satisfy a critical

23 need for such supplies.’’.
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1 SEC. 1053. CLARIFICATION OF APPROVAL AUTHORITY FOR

2 USE OF PROCEDURES OTHER THAN FULL

3 AND OPEN COMPETITION.

4 Section 303(f)(1)(B)(i) of the Federal Property and

5 Administrative Services Act of 1949 (41 U.S.C.

6 253(f)(1)(B)(i)) is amended by inserting before the semi7 colon at the end the following: ‘‘or by an official referred

8 to in clause (ii), (iii), or (iv)’’.

9 Subpart B—Planning, Solicitation, Evaluation, and

10 Award

11 SEC. 1061. SOLICITATION, EVALUATION, AND AWARD.

12 (a) CONTENT OF SOLICITATION.—Section 303A of the

13 Federal Property and Administrative Services Act of 1949

14 (41 U.S.C. 253a) is amended—

15 (1) in subsection (b)(1), by amending subpara16 graph (A) to read as follows:

17 ‘‘(A) all significant factors and significant

18 subfactors which the executive agency reasonably

19 expects to consider in evaluating sealed bids (in20 cluding price) or competitive proposals (includ21 ing cost or price, cost- or price-related factors

22 and subfactors, and noncost- or nonprice-related

23 factors and subfactors); and’’;

24 (2) in subsection (b)(1)(B), by inserting ‘‘and

25 subfactors’’ after ‘‘factors’’;
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1 (3) in subsection (b)(2)(B), by striking out clause

2 (i) and inserting in lieu thereof the following:

3 ‘‘(i) either a statement that the proposals

4 are intended to be evaluated with, and award

5 made after, discussions with the offerors, or a

6 statement that the proposals are intended to be

7 evaluated, and award made, without discussions

8 with the offerors (other than discussions con9 ducted for the purpose of minor clarification)

10 unless discussions are determined to be nec11 essary; and’’; and

12 (4) by adding at the end the following new sub13 section:

14 ‘‘(c)(1) In prescribing the evaluation factors to be in15 cluded in each solicitation for competitive proposals, an ex16 ecutive agency—

17 ‘‘(A) shall clearly establish the relative impor18 tance assigned to the evaluation factors and

19 subfactors, including the quality of the product or

20 services to be provided (including technical capabil21 ity, management capability, prior experience, and

22 past performance of the offeror);

23 ‘‘(B) shall include cost or price to the Federal

24 Government as an evaluation factor that must be con25 sidered in the evaluation of proposals; and
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1 ‘‘(C) shall disclose to offerors whether all evalua2 tion factors other than cost or price, when combined,

3 are—

4 ‘‘(i) significantly more important than cost

5 or price;

6 ‘‘(ii) approximately equal in importance to

7 cost or price; or

8 ‘‘(iii) significantly less important than cost

9 or price.

10 ‘‘(2) The regulations implementing subparagraph (C)

11 of paragraph (1) may not define the terms ‘significantly

12 more important’ and ‘significantly less important’ as spe13 cific numeric weights that would be applied uniformly to

14 all solicitations.

15 ‘‘(3) Nothing in this subsection prohibits an executive

16 agency from—

17 ‘‘(A) providing additional information in a so18 licitation, including numeric weights for all evalua19 tion factors and subfactors; or

20 ‘‘(B) stating in a solicitation that award will be

21 made to the offeror that meets the solicitation’s man22 datory requirements at the lowest cost or price.’’.

23 (b) EVALUATION AND AWARD.—Section 303B of the

24 Federal Property and Administrative Services Act of 1949

25 (41 U.S.C. 253b) is amended—
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1 (1) in subsection (a), by inserting ‘‘, and award

2 a contract,’’ after ‘‘competitive proposals’’;

3 (2) in subsection (c), by inserting ‘‘in accordance

4 with subsection (a)’’ in the second sentence after

5 ‘‘shall evaluate the bids’’; and

6 (3) in subsection (d)—

7 (A) by striking out paragraph (1) and in8 serting in lieu thereof the following:

9 ‘‘(1) An executive agency shall evaluate competitive

10 proposals in accordance with subsection (a) and may

11 award a contract—

12 ‘‘(A) after discussions with the offerors, provided

13 that written or oral discussions have been conducted

14 with all responsible offerors who submit proposals

15 within the competitive range; or

16 ‘‘(B) based on the proposals received and without

17 discussions with the offerors (other than discussions

18 conducted for the purpose of minor clarification), pro19 vided that, as required by section 303A(b)(2)(B)(i),

20 the solicitation included a statement that proposals

21 are intended to be evaluated, and award made, with22 out discussions, unless discussions are determined to

23 be necessary.’’; and
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1 (B) by striking out paragraphs (2) and (3)

2 and by redesignating paragraph (4) as para3 graph (2).

4 (c) AUTHORITY TO APPLY AMENDMENTS EARLY.—The

5 head of an executive agency may apply the amendments

6 made by this section to solicitations issued before the effec7 tive date specified in section 9001(a) and to contracts

8 awarded pursuant to those solicitations. The head of the ex9 ecutive agency shall publish in the Federal Register notice

10 of any such earlier date of application at least 10 days be11 fore that date.

12 SEC. 1062. SOLICITATION PROVISION REGARDING EVALUA13 TION OF PURCHASE OPTIONS.

14 Section 303A of the Federal Property and Administra15 tive Services Act of 1949 (41 U.S.C. 253a), as amended by

16 section 1061(a)(4), is further amended by adding at the end

17 the following new subsection:

18 ‘‘(d) An executive agency, in issuing a solicitation for

19 a contract to be awarded using sealed bid procedures, may

20 not include in such solicitation a clause providing for the

21 evaluation of prices under the contract for options to pur22 chase additional supplies or services under the contract un23 less the executive agency has determined that there is a rea24 sonable likelihood that the options will be exercised.’’.
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1 SEC. 1063. PROMPT NOTICE OF AWARD.

2 (a) SEALED BID PROCEDURES.—Subsection (c) of sec3 tion 303B of the Federal Property and Administrative

4 Services Act of 1949 (41 U.S.C. 253b) is amended—

5 (1) in the last sentence, by striking out ‘‘trans6 mitting written notice’’ and inserting in lieu thereof

7 ‘‘transmitting, in writing or by electronic means, no8 tice’’; and

9 (2) by adding at the end the following: ‘‘Within

10 3 days after the date of contract award, the executive

11 agency shall notify, in writing or by electronic

12 means, each bidder not awarded the contract that the

13 contract has been awarded.’’.

14 (b) COMPETITIVE PROPOSALS PROCEDURES.—Para15 graph (2) of such section, as redesignated by section

16 1061(b)(3)(B), is amended in the second sentence—

17 (1) by striking out ‘‘transmitting written notice’’

18 and inserting in lieu thereof ‘‘transmitting, in writ19 ing or by electronic means, notice’’; and

20 (2) by striking out ‘‘shall promptly notify’’ and

21 inserting in lieu thereof ‘‘, within 3 days after the

22 date of contract award, shall notify, in writing or by

23 electronic means,’’.

24 SEC. 1064. POST-AWARD DEBRIEFINGS.

25 Section 303B of the Federal Property and Administra26 tive Services Act of 1949 (41 U.S.C. 253b) is amended—
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1 (1) by redesignating subsections (e) and (f) as

2 subsections (f) and (g), respectively; and

3 (2) by inserting after subsection (d) the following

4 new subsection (e):

5 ‘‘(e)(1) When a contract is awarded by an executive

6 agency on the basis of competitive proposals, an unsuccess7 ful offeror, upon written request received by the executive

8 agency within 5 days after the date of receipt of notification

9 of the contract award, shall be debriefed and furnished the

10 basis for the selection decision and contract award. The ex11 ecutive agency shall debrief the offeror within, to the maxi12 mum extent practicable, 5 days after receipt of the request

13 by the executive agency.

14 ‘‘(2) Such debriefing shall include, at a minimum, the

15 following:

16 ‘‘(A) The executive agency’s evaluation of the sig17 nificant weak or deficient factors in the offeror’s offer.

18 ‘‘(B) The overall evaluated cost of the offer of the

19 offeror awarded the contract and the overall evaluated

20 cost of the offer of the debriefed offeror.

21 ‘‘(C) The overall ranking of all offers and the

22 total technical and cost scores of all offers.

23 ‘‘(D) A summary of the rationale for the award.

24 ‘‘(E) In the case of an offer by the debriefed

25 offeror that includes a commercial item that is an end
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1 item under the contract, the makes and models of

2 similar commercial items included in the offer of the

3 offeror awarded the contract.

4 ‘‘(F) Reasonable responses to questions posed by

5 the debriefed offeror as to whether source selection

6 procedures set forth in the solicitation, applicable reg7 ulations, and other applicable authorities were fol8 lowed by the executive agency.

9 ‘‘(3) The debriefing shall not include point-by-point

10 comparisons of the debriefed offeror’s offer with other offers

11 and shall not disclose any information that is exempt from

12 disclosure under section 552 of title 5, United States Code.

13 ‘‘(4) Each solicitation for competitive proposals shall

14 include a statement that information described in para15 graph (2) may be disclosed in post-award debriefings.

16 ‘‘(5) The contracting officer shall include a summary

17 of the debriefing in the contract file.’’.

18 SEC. 1065. PROTEST FILE.

19 Section 303B of the Federal Property and Administra20 tive Services Act of 1949 (41 U.S.C. 253b) is amended by

21 adding at the end the following new subsection:

22 ‘‘(h) PROTEST FILE.—(1) If, in the case of a solicita23 tion for a contract issued by, or an award or proposed

24 award of a contract by, an agency head, a protest is filed

25 pursuant to the procedures in subchapter V of chapter 35
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1 of title 31, United States Code, and an actual or prospective

2 offeror so requests, a file of the protest shall be established

3 by the procuring activity and reasonable access shall be pro4 vided to actual or prospective offerors.

5 ‘‘(2) Information exempt from disclosure under section

6 552 of title 5, United States Code, may be redacted in a

7 file established pursuant to paragraph (1) unless an appli8 cable protective order provides otherwise.

9 ‘‘(3) Regulations implementing this subsection shall be

10 consistent with the regulations regarding the preparation

11 and submission of an agency’s protest file (the so-called

12 ‘rule 4 file’) for protests to the General Services Board of

13 Contract Appeals under section 111 of the Federal Property

14 and Administrative Services Act of 1949 (41 U.S.C. 759).’’.

15 SEC. 1066. AGENCY DECISIONS ON PROTESTS.

16 Section 303B of the Federal Property and Administra17 tive Services Act of 1949 (41 U.S.C. 253b), as amended by

18 section 1065, is further amended by adding at the end the

19 following new subsection:

20 ‘‘(i) DECISIONS ON PROTESTS.—If, in connection with

21 a protest, an executive agency determines that a solicita22 tion, proposed award, or award does not comply with the

23 requirements of law or regulation, the executive agency—
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1 ‘‘(1) may take any action set out in subpara2 graphs (A) through (F) of subsection (b)(1) of section

3 3554 of title 31, United States Code; and

4 ‘‘(2) may pay costs described in paragraph (1)

5 of section 3554(c) of such title within the limits re6 ferred to in paragraph (2) of such section.’’.

7 SEC. 1067. AWARD OF MULTIPLE CONTRACTS.

8 Section 303B of the Federal Property and Administra9 tive Services Act of 1949 (41 U.S.C. 253b), as amended by

10 section 1066, is further amended by adding at the end the

11 following new subsection:

12 ‘‘(j) AWARD OF MULTIPLE CONTRACTS.—In procuring

13 any supply or service using competitive procedures, an ex14 ecutive agency may award more than one contract for the

15 same supply or service in any case in which the executive

16 agency determines that it is in the best interests of the Fed17 eral Government to award those contracts for the purpose

18 of maintaining a continuous source for the supply or serv19 ice.’’.
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1 Subpart C—Kinds of Contracts

2 SEC. 1071. REPEAL OF AGENCY HEAD DETERMINATION RE3 GARDING USE OF COST TYPE OR INCENTIVE

4 CONTRACT.

5 Section 304(b) of the Federal Property and Adminis6 trative Services Act of 1949 (41 U.S.C. 254(b)) is amended

7 by striking out the second sentence.

8 SEC. 1072. MULTIYEAR CONTRACTING AUTHORITY.

9 Title III of the Federal Property and Administrative

10 Services Act of 1949 (41 U.S.C. 251 et seq.) is amended

11 by inserting after section 304 the following new section:

12 ‘‘SEC. 304A. MULTIYEAR CONTRACTS.

13 ‘‘(a) AUTHORITY.—An executive agency may enter

14 into a multiyear contract for the acquisition of property

15 or services if—

16 ‘‘(1) funds are available and obligated for such

17 contract, for the full period of the contract or for the

18 first fiscal year in which the contract is in effect, and

19 for the estimated costs associated with any necessary

20 termination of such contract;

21 ‘‘(2) the executive agency determines that—

22 ‘‘(A) the need for the property or services is

23 reasonably firm and continuing over the period

24 of the contract; and

25 ‘‘(B) a multiyear contract will serve the best

26 interests of the United States by encouraging full
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1 and open competition or promoting economy in

2 administration, performance, and operation of

3 the agency’s programs; and

4 ‘‘(3) such contract is awarded on a fully com5 petitive basis.

6 ‘‘(b) TERMINATION CLAUSE.—A multiyear contract

7 entered into under the authority of this section shall include

8 a clause that provides that the contract shall be terminated

9 if funds are not made available for the continuation of such

10 contract in any fiscal year covered by the contract.

11 Amounts available for paying termination costs shall re12 main available for such purpose until the costs associated

13 with termination of the contract are paid.

14 ‘‘(c) CANCELLATION CEILING NOTICE.—Before any

15 contract described in subsection (a) that contains a clause

16 setting forth a cancellation ceiling in excess of $10,000,000

17 may be awarded, the executive agency shall give written no18 tification of the proposed contract and of the proposed can19 cellation ceiling for that contract to the Congress, and such

20 contract may not then be awarded until the end of a period

21 of 30 days beginning on the date of such notification.

22 ‘‘(d) MULTIYEAR CONTRACT DEFINED.—For the pur23 poses of this section, a multiyear contract is a contract for

24 the purchase of property or services for more than one, but

25 not more than five, program years. Such a contract may
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1 provide that performance under the contract during the sec2 ond and subsequent years of the contract is contingent upon

3 the appropriation of funds and (if it does so provide) may

4 provide for a cancellation payment to be made to the con5 tractor if such appropriations are not made.

6 ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec7 tion is intended to modify or affect any other provision of

8 law that authorizes multiyear contracts.’’.

9 SEC. 1073. SEVERABLE SERVICES CONTRACTS CROSSING

10 FISCAL YEARS.

11 Title III of the Federal Property and Administrative

12 Services Act of 1949 (41 U.S.C. 251 et seq.) is amended

13 by inserting after section 303G the following new section:

14 ‘‘SEC. 303H. SEVERABLE SERVICES CONTRACTS FOR PERI15 ODS CROSSING FISCAL YEARS.

16 ‘‘(a) AUTHORITY.—An executive agency may enter

17 into a severable contract for procurement of services for a

18 period that begins in one fiscal year and ends in the next

19 fiscal year if (without regard to any option to extend the

20 period of the contract) the contract period does not exceed

21 one year.

22 ‘‘(b) AVAILABILITY OF FUNDS.—To the extent provided

23 in appropriations Acts, funds obligated for a contract en24 tered into under the authority of subsection (a) shall remain

25 available until no longer needed to pay for such contract.
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1 ‘‘(c) SEVERABLE CONTRACT DEFINED.—In this sec2 tion, the term ‘severable contract’ means a contract that

3 contains a clause that makes the effectiveness of the contract

4 for periods after the end of the fiscal year in which the per5 formance of the contract begins subject to the availability

6 of appropriations.’’.

7 PART III—ACQUISITIONS GENERALLY

8 SEC. 1091. POLICY REGARDING CONSIDERATION OF CON9 TRACTOR PAST PERFORMANCE.

10 (a) POLICY.—Section 2 of the Office of Federal Pro11 curement Policy Act (41 U.S.C. 401) is amended—

12 (1) by striking out ‘‘and’’ at the end of para13 graph (12);

14 (2) by striking out the period at the end of para15 graph (13) and inserting in lieu thereof ‘‘; and’’; and

16 (3) by adding at the end the following new para17 graph:

18 ‘‘(14) establishing policies and procedures that

19 encourage the consideration of contractors’ past per20 formance in the selection of contractors.’’.

21 (b) GUIDANCE REQUIRED.—Section 6 of the Office of

22 Federal Procurement Policy Act (41 U.S.C. 405) is amend23 ed by adding at the end the following:

24 ‘‘(j)(1) Congress makes the following findings:
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1 ‘‘(A) Past contract performance of an offeror is

2 one of the relevant factors that a contracting official

3 of an executive agency should consider in awarding a

4 contract.

5 ‘‘(B) It is appropriate for a contracting official

6 to consider past contract performance of an offeror as

7 an indicator of the likelihood that the offeror will suc8 cessfully perform a contract to be awarded by that of9 ficial.

10 ‘‘(2) The Administrator shall prescribe for executive

11 agencies guidance regarding consideration of the past con12 tract performance of offerors in awarding contracts. The

13 guidance shall include—

14 ‘‘(A) standards for evaluating past performance

15 with respect to cost (when appropriate), schedule,

16 compliance with technical or functional specifica17 tions, and other relevant performance factors that fa18 cilitate consistent and fair evaluation by all executive

19 agencies;

20 ‘‘(B) policies for the collection and maintenance

21 of information on past contract performance that, to

22 the maximum extent practicable, facilitate automated

23 collection, maintenance, and dissemination of infor24 mation and provide for ease of collection, mainte-
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1 nance, and dissemination of information by other

2 methods, as necessary; and

3 ‘‘(C) policies for ensuring that offerors are af4 forded an opportunity to submit information on past

5 contract performance and that such information sub6 mitted by offerors is considered.

7 ‘‘(3) The Administrator shall prescribe for all executive

8 agencies the policy regarding the period for which informa9 tion on past performance of offerors may be maintained

10 and considered.

11 ‘‘(4) In the case of an offeror with respect to which

12 there is no information on past contract performance or

13 with respect to which information on past contract perform14 ance is not available, the offeror may not be evaluated fa15 vorably or unfavorably on the factor of past contract per16 formance.’’.

17 SEC. 1092. REPEAL OF REQUIREMENT FOR ANNUAL REPORT

18 ON COMPETITION.

19 Section 23 of the Office of Federal Procurement Policy

20 Act (41 U.S.C. 419) is repealed.

21 SEC. 1093. DISCOURAGEMENT OF NONSTANDARD CON22 TRACT CLAUSES.

23 The Office of Federal Procurement Policy Act (41

24 U.S.C. 401 et seq.) is amended by adding at the end the

25 following new section:
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1 ‘‘SEC. 29. NONSTANDARD CONTRACT CLAUSES.

2 ‘‘The Federal Acquisition Regulatory Council shall

3 promulgate regulations to discourage the use of a non4 standard contract clause on a repetitive basis. The regula5 tions shall include provisions that—

6 ‘‘(1) clearly define nonstandard clauses; and

7 ‘‘(2) require prior approval for the use of a non8 standard clause on a repetitive basis by an official at

9 a level of responsibility above the contracting officer.’’.

10 Subtitle B—Truth in Negotiations

11 PART I—ARMED SERVICES ACQUISITIONS

12 SEC. 1201. STABILIZATION OF DOLLAR THRESHOLD OF AP13 PLICABILITY.

14 (a) DOLLAR THRESHOLD STABILIZATION FOR

15 OFFERORS FOR PRIME CONTRACTS.—Paragraph (1)(A) of

16 section 2306a(a) of title 10, United States Code, is amend17 ed—

18 (1) in clause (i), by striking out ‘‘and before

19 January 1, 1996,’’; and

20 (2) in clause (ii), by striking out ‘‘or after De21 cember 31, 1995,’’.

22 (b) ADJUSTMENT OF DOLLAR THRESHOLD.—Such sec23 tion is further amended by adding at the end the following

24 new paragraph:

25 ‘‘(7) The dollar amount in each of subparagraphs (A),

26 (B), (C), and (D) of paragraph (1) shall be adjusted on
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1 October 1 of each year divisible by 5 to the equivalent

2 amount in constant fiscal year 1993 dollars (rounded to

3 the nearest $10,000).’’.

4 SEC. 1202. EXCEPTIONS TO COST OR PRICING DATA RE5 QUIREMENTS.

6 (a) EXCEPTIONS.—Subsection (b) of section 2306a of

7 title 10, United States Code, is amended to read as follows:

8 ‘‘(b) EXCEPTIONS.—(1) This section shall not be ap9 plied to a contract or subcontract, or a modification to a

10 contract or subcontract—

11 ‘‘(A) for which the price agreed upon is based

12 on—

13 ‘‘(i) adequate price competition;

14 ‘‘(ii) established catalog or market prices of

15 commercial items or of services regularly used

16 for other than Federal Government purposes, as

17 the case may be, that are sold in sufficient quan18 tities to the general public; or

19 ‘‘(iii) prices set by law or regulation; or

20 ‘‘(B) in an exceptional case when the head of the

21 procuring activity, without delegation, determines

22 that the requirements of this section may be waived

23 and justifies in writing the reasons for such deter24 mination.
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1 ‘‘(2) The Federal Acquisition Regulation (issued under

2 section 25(c) of the Office of Federal Procurement Policy

3 Act (41 U.S.C. 421(c)) shall provide clear standards for de4 termining whether the exceptions provided in paragraph

5 (1)(A) apply. In the case of the exception provided in para6 graph (1)(A)(i), the regulations shall specify the criteria to

7 be used to determine whether adequate price competition ex8 ists. In the case of the exception provided in paragraph

9 (1)(A)(ii), the regulations shall preclude the consideration

10 of sales to the Federal Government, including the percentage

11 of an item’s overall sales that are made to the Federal Gov12 ernment, when determining whether the item has been sold

13 in sufficient quantities to the public.’’.

14 (b) LIMITATION ON AUTHORITY.—Subsection (c) of

15 such section is amended to read as follows:

16 ‘‘(c) AUTHORITY TO REQUIRE COST OR PRICING DATA

17 ON BELOW-THRESHOLD CONTRACTS.—When cost or pric18 ing data are not required to be submitted by subsection (a),

19 such data may nevertheless be required to be submitted by

20 the head of the procuring activity, but only if the head of

21 the procuring activity determines that such data are nec22 essary for the evaluation by the agency of the reasonableness

23 of the price of the contract or subcontract. In any case in

24 which the head of the procuring activity requires such data

25 to be submitted under this subsection, the head of the pro-
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1 curing activity shall justify in writing the reason for such

2 requirement. The head of the procuring activity may not

3 require such data to be submitted under this subsection for

4 any contract or subcontract, or modification to a contract

5 or subcontract, covered by the exceptions in subsection (b).

6 The head of the procuring activity may not delegate the

7 functions under this subsection.’’.

8 SEC. 1203. RIGHT OF UNITED STATES TO EXAMINE CON9 TRACTOR RECORDS.

10 Subsection (f) of section 2306a of title 10, United

11 States Code, is amended to read as follows:

12 ‘‘(f) RIGHT OF UNITED STATES TO EXAMINE CON13 TRACTOR RECORDS.—For the purpose of evaluating the ac14 curacy, completeness, and currency of cost or pricing data

15 required to be submitted by this section, the head of an

16 agency shall have the authority provided by section

17 2313(a)(2) of this title.’’.

18 SEC. 1204. CONSISTENCY OF TIME REFERENCES.

19 Section 2306a of title 10, United States Code, is

20 amended—

21 (1) in subparagraphs (A)(ii) and (B)(ii) of sub22 section (d)(4), by inserting ‘‘or, if applicable consist23 ent with paragraph (1)(B), another date agreed upon

24 between the parties’’ after ‘‘(or price of the modifica25 tion)’’; and
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1 (2) in subsection (g), by inserting ‘‘or, if appli2 cable consistent with subsection (d)(1)(B), another

3 date agreed upon between the parties’’ after ‘‘(or the

4 price of a contract modification)’’.

5 SEC. 1205. REPEAL OF SUPERSEDED PROVISION.

6 Subsection (c) of section 803 of Public Law 101–510

7 (10 U.S.C. 2306a note) is repealed.

8 PART II—CIVILIAN AGENCY ACQUISITIONS

9 SEC. 1251. REVISION OF CIVILIAN AGENCY PROVISIONS TO

10 ENSURE UNIFORM TREATMENT OF COST OR

11 PRICING DATA.

12 Title III of the Federal Property and Administrative

13 Services Act of 1949 (41 U.S.C. 251 et seq.) is amended—

14 (1) in section 304, by striking out subsection (d);

15 and

16 (2) by inserting after section 304A, as added by

17 section 1072, the following new section:

18 ‘‘SEC. 304B. COST OR PRICING DATA: TRUTH IN NEGOTIA19 TIONS.

20 ‘‘(a) REQUIRED COST OR PRICING DATA AND CERTIFI21 CATION.—(1) An executive agency shall require offerors,

22 contractors, and subcontractors to make cost or pricing data

23 available as follows:

24 ‘‘(A) An offeror for a prime contract under this

25 title to be entered into using procedures other than
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1 sealed-bid procedures shall be required to submit cost

2 or pricing data before the award of a contract if—

3 ‘‘(i) in the case of a prime contract entered

4 into after the date of the enactment of the Fed5 eral Acquisition Improvement Act of 1994, the

6 price of the contract to the United States is ex7 pected to exceed $500,000; and

8 ‘‘(ii) in the case of a prime contract entered

9 into on or before the date of the enactment of the

10 Federal Acquisition Improvement Act of 1994,

11 the price of the contract to the United States is

12 expected to exceed $100,000.

13 ‘‘(B) The contractor for a prime contract under

14 this chapter shall be required to submit cost or pric15 ing data before the pricing of a change or modifica16 tion to the contract if—

17 ‘‘(i) in the case of a change or modification

18 made to a prime contract referred to in subpara19 graph (A)(i), the price adjustment is expected to

20 exceed $500,000;

21 ‘‘(ii) in the case of a change or modification

22 made to a prime contract that was entered into

23 on or before the date of the enactment of the Fed24 eral Acquisition Improvement Act of 1994, and

25 that has been modified pursuant to paragraph
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1 (6), the price adjustment is expected to exceed

2 $500,000; and

3 ‘‘(iii) in the case of a change or modifica4 tion not covered by clause (i) or (ii), the price

5 adjustment is expected to exceed $100,000.

6 ‘‘(C) An offeror for a subcontract (at any tier)

7 of a contract under this title shall be required to sub8 mit cost or pricing data before the award of the sub9 contract if the prime contractor and each higher-tier

10 subcontractor have been required to make available

11 cost or pricing data under this section and—

12 ‘‘(i) in the case of a subcontract under a

13 prime contract referred to in subparagraph

14 (A)(i), the price of the subcontract is expected to

15 exceed $500,000;

16 ‘‘(ii) in the case of a subcontract entered

17 into under a prime contract that was entered

18 into on or before the date of the enactment of the

19 Federal Acquisition Improvement Act of 1994,

20 and that has been modified pursuant to para21 graph (6), the price of the subcontract is expected

22 to exceed $500,000; and

23 ‘‘(iii) in the case of a subcontract not cov24 ered by clause (i) or (ii), the price of the sub25 contract is expected to exceed $100,000.
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1 ‘‘(D) The subcontractor for a subcontract covered

2 by subparagraph (C) shall be required to submit cost

3 or pricing data before the pricing of a change or

4 modification to the subcontract if—

5 ‘‘(i) in the case of a change or modification

6 to a subcontract referred to in subparagraph

7 (C)(i) or (C)(ii), the price adjustment is expected

8 to exceed $500,000; and

9 ‘‘(ii) in the case of a change or modification

10 to a subcontract referred to in subparagraph

11 (C)(iii), the price adjustment is expected to ex12 ceed $100,000.

13 ‘‘(2) A person required, as an offeror, contractor, or

14 subcontractor, to submit cost or pricing data under para15 graph (1) (or required by the head of the procuring activity

16 concerned to submit such data under subsection (c)) shall

17 be required to certify that, to the best of the person’s knowl18 edge and belief, the cost or pricing data submitted are accu19 rate, complete, and current.

20 ‘‘(3) Cost or pricing data required to be submitted

21 under paragraph (1) (or under subsection (c)), and a cer22 tification required to be submitted under paragraph (2),

23 shall be submitted—

24 ‘‘(A) in the case of a submission by a prime con25 tractor (or an offeror for a prime contract), to the
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1 contracting officer for the contract (or to a designated

2 representative of the contracting officer); or

3 ‘‘(B) in the case of a submission by a sub4 contractor (or an offeror for a subcontract), to the

5 prime contractor.

6 ‘‘(4) Except as provided under subsection (b), this sec7 tion applies to contracts entered into by an agency head

8 on behalf of a foreign government.

9 ‘‘(5) For purposes of paragraph (1)(C), a contractor

10 or subcontractor granted a waiver under subsection (b)(2)

11 shall be considered as having been required to make avail12 able cost or pricing data under this section.

13 ‘‘(6) Upon the request of a contractor that was required

14 to submit cost or pricing data under paragraph (1) in con15 nection with a prime contract entered into on or before the

16 date of the enactment of the Federal Acquisition Improve17 ment Act of 1994, the agency head that entered into such

18 contract shall modify the contract to reflect subparagraphs

19 (B)(ii) and (C)(ii) of paragraph (1). All such modifications

20 shall be made without requiring consideration.

21 ‘‘(7) The dollar amount in each of subparagraphs (A),

22 (B), (C), and (D) of paragraph (1) shall be adjusted on

23 October 1 of each year divisible by 5 to the equivalent

24 amount in constant fiscal year 1993 dollars (rounded to

25 the nearest $10,000).
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1 ‘‘(b) EXCEPTIONS.—(1) This section shall not be ap2 plied to a contract or subcontract, or a modification to a

3 contract or subcontract—

4 ‘‘(A) for which the price agreed upon is based

5 on—

6 ‘‘(i) adequate price competition;

7 ‘‘(ii) established catalog or market prices of

8 commercial items or of services regularly used

9 for other than Federal Government purposes, as

10 the case may be, that are sold in sufficient quan11 tities to the general public; or

12 ‘‘(iii) prices set by law or regulation; or

13 ‘‘(B) in an exceptional case when the head of the

14 procuring activity, without delegation, determines

15 that the requirements of this section may be waived

16 and justifies in writing the reasons for such deter17 mination.

18 ‘‘(2) The Federal Acquisition Regulation (issued under

19 section 25(c) of the Office of Federal Procurement Policy

20 Act (41 U.S.C. 421(c)) shall provide clear standards for de21 termining whether the exceptions provided in paragraph

22 (1)(A) apply. In the case of the exception provided in para23 graph (1)(A)(i), the regulations shall specify the criteria to

24 be used to determine whether adequate price competition ex25 ists. In the case of the exception provided in paragraph
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1 (1)(A)(ii), the regulations shall preclude the consideration

2 of sales to the Federal Government, including the percentage

3 of an item’s overall sales that are made to the Federal Gov4 ernment, when determining whether the item has been sold

5 in sufficient quantities to the public.

6 ‘‘(c) AUTHORITY TO REQUIRE COST OR PRICING DATA

7 ON BELOW-THRESHOLD CONTRACTS.—When cost or pric8 ing data are not required to be submitted by subsection (a),

9 such data may nevertheless be required to be submitted by

10 the head of the procuring activity, but only if the head of

11 the procuring activity determines that such data are nec12 essary for the evaluation by the agency of the reasonableness

13 of the price of the contract or subcontract. In any case in

14 which the head of the procuring activity requires such data

15 to be submitted under this subsection, the head of the pro16 curing activity shall justify in writing the reason for such

17 requirement. The head of the procuring activity may not

18 require such data to be submitted under this subsection for

19 any contract or subcontract, or modification to a contract

20 or subcontract, covered by the exceptions in subsection (b).

21 The head of the procuring activity may not delegate the

22 functions under this subsection.

23 ‘‘(d) PRICE REDUCTIONS FOR DEFECTIVE COST OR

24 PRICING DATA.—(1)(A) A prime contract (or change or

25 modification to a prime contract) under which a certificate
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1 under subsection (a)(2) is required shall contain a provi2 sion that the price of the contract to the United States, in3 cluding profit or fee, shall be adjusted to exclude any sig4 nificant amount by which it may be determined by the

5 agency head that such price was increased because the con6 tractor (or any subcontractor required to make available

7 such a certificate) submitted defective cost or pricing data.

8 ‘‘(B) For the purposes of this section, defective cost or

9 pricing data are cost or pricing data which, as of the date

10 of agreement on the price of the contract (or another date

11 agreed upon between the parties), were inaccurate, incom12 plete, or noncurrent. If for purposes of the preceding sen13 tence the parties agree upon a date other than the date of

14 agreement on the price of the contract, the date agreed upon

15 by the parties shall be as close to the date of agreement on

16 the price of the contract as is practicable.

17 ‘‘(2) In determining for purposes of a contract price

18 adjustment under a contract provision required by para19 graph (1) whether, and to what extent, a contract price was

20 increased because the contractor (or a subcontractor) sub21 mitted defective cost or pricing data, it shall be a defense

22 that the United States did not rely on the defective data

23 submitted by the contractor or subcontractor.
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1 ‘‘(3) It is not a defense to an adjustment of the price

2 of a contract under a contract provision required by para3 graph (1) that—

4 ‘‘(A) the price of the contract would not have

5 been modified even if accurate, complete, and current

6 cost or pricing data had been submitted by the con7 tractor or subcontractor because the contractor or sub8 contractor—

9 ‘‘(i) was the sole source of the property or

10 services procured; or

11 ‘‘(ii) otherwise was in a superior bargain12 ing position with respect to the property or serv13 ices procured;

14 ‘‘(B) the contracting officer should have known

15 that the cost and pricing data in issue were defective

16 even though the contractor or subcontractor took no

17 affirmative action to bring the character of the data

18 to the attention of the contracting officer;

19 ‘‘(C) the contract was based on an agreement be20 tween the contractor and the United States about the

21 total cost of the contract and there was no agreement

22 about the cost of each item procured under such con23 tract; or

24 ‘‘(D) the prime contractor or subcontractor did

25 not submit a certification of cost and pricing data re-
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1 lating to the contract as required under subsection

2 (a)(2).

3 ‘‘(4)(A) A contractor shall be allowed to offset an

4 amount against the amount of a contract price adjustment

5 under a contract provision required by paragraph (1) if—

6 ‘‘(i) the contractor certifies to the contracting of7 ficer (or to a designated representative of the contract8 ing officer) that, to the best of the contractor’s knowl9 edge and belief, the contractor is entitled to the offset;

10 and

11 ‘‘(ii) the contractor proves that the cost or pric12 ing data were available before the date of agreement

13 on the price of the contract (or price of the modifica14 tion), or, if applicable consistent with paragraph

15 (1)(B), another date agreed upon between the parties,

16 and that the data were not submitted as specified in

17 subsection (a)(3) before such date.

18 ‘‘(B) A contractor shall not be allowed to offset an

19 amount otherwise authorized to be offset under subpara20 graph (A) if—

21 ‘‘(i) the certification under subsection (a)(2)

22 with respect to the cost or pricing data involved was

23 known to be false when signed; or

24 ‘‘(ii) the United States proves that, had the cost

25 or pricing data referred to in subparagraph (A)(ii)
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1 been submitted to the United States before the date of

2 agreement on the price of the contract (or price of the

3 modification) or, if applicable under paragraph

4 (1)(B), another date agreed upon between the parties,

5 the submission of such cost or pricing data would not

6 have resulted in an increase in that price in the

7 amount to be offset.

8 ‘‘(e) INTEREST AND PENALTIES FOR CERTAIN OVER9 PAYMENTS.—(1) If the United States makes an overpay10 ment to a contractor under a contract with an executive

11 agency subject to this section and the overpayment was due

12 to the submission by the contractor of defective cost or pric13 ing data, the contractor shall be liable to the United

14 States—

15 ‘‘(A) for interest on the amount of such overpay16 ment, to be computed—

17 ‘‘(i) for the period beginning on the date the

18 overpayment was made to the contractor and

19 ending on the date the contractor repays the

20 amount of such overpayment to the United

21 States; and

22 ‘‘(ii) at the current rate prescribed by the

23 Secretary of the Treasury under section 6621 of

24 the Internal Revenue Code of 1986; and
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1 ‘‘(B) if the submission of such defective data was

2 a knowing submission, for an additional amount

3 equal to the amount of the overpayment.

4 ‘‘(2) Any liability under this subsection of a contractor

5 that submits cost or pricing data but refuses to submit the

6 certification required by subsection (a)(2) with respect to

7 the cost or pricing data shall not be affected by the refusal

8 to submit such certification.

9 ‘‘(f) RIGHT OF UNITED STATES TO EXAMINE CON10 TRACTOR RECORDS.—For the purpose of evaluating the ac11 curacy, completeness, and currency of cost or pricing data

12 required to be submitted by this section, an executive agency

13 shall have the authority provided by section 304C(a)(2).

14 ‘‘(g) COST OR PRICING DATA DEFINED.—In this sec15 tion, the term ‘cost or pricing data’ means all facts that,

16 as of the date of agreement on the price of a contract (or

17 the price of a contract modification) or, if applicable con18 sistent with subsection (d)(1)(B), another date agreed upon

19 between the parties, a prudent buyer or seller would reason20 ably expect to affect price negotiations significantly. Such

21 term does not include information that is judgmental, but

22 does include the factual information from which a judgment

23 was derived.’’.
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1 SEC. 1252. REPEAL OF OBSOLETE PROVISION.

2 Section 303E of the Federal Property and Administra3 tive Services Act of 1949 (41 U.S.C. 253e) is repealed.

4 Subtitle C—Research and

5 Development

6 SEC. 1301. COMPETITION REQUIREMENT FOR AWARDS OF

7 GRANTS AND CONTRACTS TO NONPROFIT OR8 GANIZATIONS.

9 Subsections (a) and (b) of section 2361 of title 10,

10 United States Code, are amended by inserting ‘‘or nonprofit

11 organization other than a federally funded research and de12 velopment center (FFRDC)’’ after ‘‘college or university’’

13 each place it appears.

14 Subtitle D—Procurement Protests

15 PART I—PROTESTS TO THE COMPTROLLER

16 GENERAL

17 SEC. 1401. PROTEST DEFINED.

18 (a) IN GENERAL.—Paragraph (1) of section 3551 of

19 title 31, United States Code, is amended to read as follows:

20 ‘‘(1) The term ‘protest’ means a written objection

21 by an interested party to any of the following:

22 ‘‘(A) A solicitation or other request by a

23 Federal agency for offers for a contract for the

24 procurement of property or services.

25 ‘‘(B) The cancellation of such a solicitation

26 or other request.
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1 ‘‘(C) An award or proposed award of such

2 a contract.

3 ‘‘(D) A termination or cancellation of an

4 award of such a contract, if the written objection

5 contains an allegation that the termination or

6 cancellation is based in whole or in part on im7 proprieties concerning the award of the con8 tract.’’.

9 (b) TECHNICAL AMENDMENTS.—Section 3551 of such

10 title is further amended—

11 (1) in paragraph (2)—

12 (A) by inserting ‘‘The term’’ after ‘‘(2)’’;

13 and

14 (B) by striking out ‘‘; and’’ and inserting

15 in lieu thereof a period; and

16 (2) in paragraph (3), by inserting ‘‘The term’’

17 after ‘‘(3)’’.

18 SEC. 1402. REVIEW OF PROTESTS AND EFFECT ON CON19 TRACTS PENDING DECISION.

20 (a) PERIODS FOR CERTAIN ACTIONS.—Section 3553 of

21 title 31, United States Code, is amended—

22 (1) in subsection (b)—

23 (A) in paragraph (1), by striking out ‘‘one

24 working day of’’ and inserting in lieu thereof

25 ‘‘one day after’’; and
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1 (B) in paragraph (2)—

2 (i) in subparagraph (A), by striking

3 out ‘‘25 working days from’’ and inserting

4 in lieu thereof ‘‘35 days after’’; and

5 (ii) in subparagraph (C), by striking

6 out ‘‘10 working days from’’ and inserting

7 in lieu thereof ‘‘15 days after’’; and

8 (2) in subsection (c)(3), by striking out ‘‘there9 after’’ and inserting in lieu thereof ‘‘after the making

10 of such finding’’.

11 (b) SUSPENSION OF PERFORMANCE.—Subsection (d) of

12 such section is amended to read as follows:

13 ‘‘(d)(1) A contractor awarded a Federal agency con14 tract may, during the period described in paragraph (4),

15 begin performance of the contract and engage in any related

16 activities that result in obligations being incurred by the

17 United States under the contract unless the contracting offi18 cer responsible for the award of the contract withholds au19 thorization to proceed with performance of the contract.

20 ‘‘(2) The contracting officer may withhold an author21 ization to proceed with performance of the contract during

22 the period described in paragraph (4) if the contracting of23 ficer determines in writing that—

24 ‘‘(A) a protest is likely to be filed; and
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1 ‘‘(B) the immediate performance of the contract

2 is not in the best interests of the United States.

3 ‘‘(3)(A) If the Federal agency awarding the contract

4 receives notice of a protest in accordance with this section

5 during the period described in paragraph (4)—

6 ‘‘(i) the contracting officer may not authorize

7 performance of the contract to begin while the protest

8 is pending; or

9 ‘‘(ii) if contract performance was authorized in

10 accordance with paragraph (2) before receipt of the

11 notice, the contracting officer shall immediately direct

12 the contractor to cease performance under the contract

13 and to suspend any related activities that may result

14 in additional obligations being incurred by the Unit15 ed States under that contract.

16 ‘‘(B) Performance and related activities suspended

17 pursuant to subparagraph (A)(ii) by reason of a protest

18 may not be resumed while the protest is pending.

19 ‘‘(C) The head of the procuring activity may authorize

20 the performance of the contract (notwithstanding a protest

21 of which the Federal agency has notice under this section)—

22 ‘‘(i) upon a written finding that—

23 ‘‘(I) performance of the contract is in the

24 best interests of the United States; or
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1 ‘‘(II) urgent and compelling circumstances

2 that significantly affect interests of the United

3 States will not permit waiting for the decision of

4 the Comptroller General concerning the protest;

5 and

6 ‘‘(ii) after the Comptroller General is notified of

7 that finding.

8 ‘‘(4) The period referred to in paragraphs (2) and

9 (3)(A), with respect to a contract, is the period beginning

10 on the date of the contract award and ending on the later

11 of—

12 ‘‘(A) the date that is 10 days after the date of

13 the contract award; or

14 ‘‘(B) the date that is 5 days after the debriefing

15 date offered to an unsuccessful offeror for any debrief16 ing that is requested and, when requested, is re17 quired.’’.

18 SEC. 1403. DECISIONS ON PROTESTS.

19 (a) PERIODS FOR CERTAIN ACTIONS.—Section

20 3554(a) of title 31, United States Code, is amended—

21 (1) in paragraph (1), by striking out ‘‘90 work22 ing days from’’ and inserting in lieu thereof ‘‘120

23 days after’’;

24 (2) in paragraph (2), by striking out ‘‘45 cal25 endar days from’’ and inserting ‘‘60 days after’’;
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1 (3) by redesignating paragraph (3) as para2 graph (4); and

3 (4) by inserting after paragraph (2) the follow4 ing new paragraph (3):

5 ‘‘(3) An amendment to a protest that adds a new

6 ground of protest, if timely raised, should be resolved, to

7 the maximum extent practicable, within the time limit es8 tablished under paragraph (1) of this subsection for final

9 decision of the initial protest. If an amended protest cannot

10 be resolved within such time limit, the Comptroller General

11 may resolve the amended protest through the express option

12 under paragraph (2) of this subsection.’’.

13 (b) GAO RECOMMENDATIONS ON PROTESTS.—

14 (1) IMPLEMENTATION OF RECOMMENDATIONS.—

15 Section 3554 of title 31, United States Code, is fur16 ther amended in subsection (b) by adding at the end

17 the following new paragraph:

18 ‘‘(3) If the Federal agency fails to implement fully the

19 recommendations of the Comptroller General under this

20 subsection with respect to a solicitation for a contract or

21 an award or proposed award of a contract within 60 days

22 after receiving the recommendations, the head of the procur23 ing activity responsible for that contract shall report such

24 failure to the Comptroller General not later than 5 days

25 after the end of such 60-day period.’’.
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1 (2) FEDERAL AGENCY PAYMENT OF COSTS.—

2 Subsection (c) of such section is amended to read as

3 follows:

4 ‘‘(c)(1) If the Comptroller General determines that a

5 solicitation for a contract or a proposed award or the award

6 of a contract does not comply with a statute or regulation,

7 the Comptroller General may recommend that the Federal

8 agency conducting the procurement pay to an appropriate

9 interested party the costs of—

10 ‘‘(A) filing and pursuing the protest, including

11 reasonable attorney’s fees and consultant and expert

12 witness fees; and

13 ‘‘(B) bid and proposal preparation.

14 ‘‘(2) If the Comptroller General recommends under

15 paragraph (1) that a Federal agency pay costs to an inter16 ested party, the Federal agency shall—

17 ‘‘(A) pay the costs promptly out of funds avail18 able to or for the use of the Federal agency; or

19 ‘‘(B) if the Federal agency does not make such

20 payment, promptly report to the Comptroller General

21 the reasons for the failure to follow the Comptroller

22 General’s recommendation.

23 ‘‘(3) If the Comptroller General recommends under

24 paragraph (1) that a Federal agency pay costs to an inter25 ested party, the Federal agency and the interested party
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1 shall attempt to reach an agreement on the amount of the

2 costs to be paid. If the Federal agency and the interested

3 party are unable to agree on the amount to be paid, the

4 Comptroller General may, upon the request of the interested

5 party, recommend to the Federal agency the amount of the

6 costs that the Federal agency should pay.’’.

7 (3) REPORT.—Subsection (e) of such section is

8 amended to read as follows:

9 ‘‘(e)(1) In any case in which a Federal agency fails

10 to implement fully a recommendation of the Comptroller

11 General under subsection (b) or (c), the Comptroller General

12 shall promptly submit a report on the matter to the Com13 mittee on Governmental Affairs and the Committee on Ap14 propriations of the Senate and to the Committee on Govern15 ment Operations and the Committee on Appropriations of

16 the House of Representatives. The report shall include—

17 ‘‘(A) a comprehensive review of the pertinent

18 procurement, including the circumstances of the fail19 ure of the Federal agency to implement a rec20 ommendation of the Comptroller General; and

21 ‘‘(B) a recommendation regarding whether, in

22 order to correct an inequity or to preserve the integ23 rity of the procurement process, the Congress should

24 consider—

25 ‘‘(i) private relief legislation;
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1 ‘‘(ii) legislative rescission or cancellation of

2 funds;

3 ‘‘(iii) further investigation by the Congress;

4 or

5 ‘‘(iv) other action.

6 ‘‘(2) Not later than January 31 of each year, the

7 Comptroller General shall transmit to the Congress a report

8 containing a summary of each instance in which a Federal

9 agency did not fully implement a recommendation of the

10 Comptroller General under subsection (b) or (c) during the

11 preceding year. The report shall also describe each instance

12 in which a final decision in a protest was not rendered

13 within 120 days after the date the protest is submitted to

14 the Comptroller General.’’.

15 (4) REQUIREMENT FOR PAYMENT IN ACCORD16 ANCE WITH PRIOR GAO DETERMINATIONS.—Amounts

17 to which the Comptroller General declared an inter18 ested party to be entitled under section 3554 of title

19 31, United States Code, as in effect immediately be20 fore the date of the enactment of this Act, shall, if not

21 paid or otherwise satisfied by the Federal agency con22 cerned before such date, be paid promptly out of funds

23 available to or for the use of the Federal agency.

24 (c) RECOVERY OF COSTS FOR FRIVOLOUS PRO25 TESTS.—Section 3554 of title 31, United States Code, is
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1 further amended by adding at the end the following new

2 subsection:

3 ‘‘(f) If the Comptroller General expressly finds that a

4 protest or a portion of a protest is frivolous or has not been

5 brought or pursued in good faith, the Comptroller may rec6 ommend that the protester or other interested party who

7 joins the protest be liable to the United States for payment

8 of all or that portion of the United States costs, for which

9 such a finding is made, of reviewing the protest, including

10 the fees and other expenses (as defined in section

11 2412(d)(2)(A) of title 28) incurred by the United States in

12 defending the protest. The Federal Acquisition Regulation

13 shall provide guidance under which the head of an agency

14 may initiate action to obtain such costs, unless (A) special

15 circumstances would make such payment unjust, or (B) the

16 protester obtains documents or other information for the

17 first time, after the protest is filed with the Comptroller

18 General, which establishes that the protest or a portion is

19 frivolous or has not been brought in good faith and the pro20 tester then promptly withdraws the protest or portion of

21 the protest.’’.

22 (d) RESTRICTION ON ACCESS TO CERTAIN INFORMA23 TION.—Section 3553(f) of title 31, United States Code, is

24 amended—

25 (1) by inserting ‘‘(1)’’ after ‘‘(f)’’; and
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1 (2) by adding at the end the following:

2 ‘‘(2)(A) The Comptroller General may issue protective

3 orders which establish terms, conditions, and restrictions for

4 the provision of any document to a person under paragraph

5 (1), that prohibit or restrict the disclosure by the person

6 of information described in subparagraph (C) that is con7 tained in such a document.

8 ‘‘(B) The penalties specified under section 27(i) of the

9 Office of Federal Procurement Policy Act shall apply to the

10 disclosure of information described in subparagraph (C) in

11 violation of a term, condition, or restriction in a protective

12 order under this paragraph by a person that is subject to

13 the protective order.

14 ‘‘(C) Information referred to in subparagraphs (A)

15 and (B) is procurement sensitive information, trade secrets,

16 or other proprietary or confidential research, development,

17 or commercial information.

18 ‘‘(D) A protective order under this paragraph shall not

19 be considered to authorize the withholding of any document

20 or information from the Congress or an executive agency.’’.

21 SEC. 1404. REGULATIONS.

22 (a) COMPUTATION OF PERIODS.—Section 3555 of title

23 31, United States Code, is amended—

24 (1) by redesignating subsection (b) as subsection

25 (d); and
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1 (2) by inserting after subsection (a) the following

2 new subsection (b):

3 ‘‘(b) The procedures shall provide that, in the computa4 tion of any period described in this subchapter—

5 ‘‘(1) the day of the act, event, or default from

6 which the designated period of time begins to run not

7 be included; and

8 ‘‘(2) the last day after such act, event, or default

9 be included, unless—

10 ‘‘(A) such last day is a Saturday, a Sun11 day, or a legal holiday; or

12 ‘‘(B) in the case of a filing of a paper at

13 the General Accounting Office or a Federal agen14 cy, such last day is a day on which weather or

15 other conditions cause the closing of the General

16 Accounting Office or Federal agency, in which

17 event the next day that is not a Saturday, Sun18 day, or legal holiday shall be included.’’.

19 (b) ELECTRONIC FILINGS AND DISSEMINATIONS.—

20 Such section, as amended by subsection (a), is further

21 amended by inserting after subsection (b) the following new

22 subsection:

23 ‘‘(c) The Comptroller General may prescribe proce24 dures for the electronic filing and dissemination of docu25 ments and information required under this subchapter. In
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1 prescribing such procedures, the Comptroller General shall

2 consider the ability of all parties to achieve electronic access

3 to such documents and records.’’.

4 (c) REPEAL OF OBSOLETE DEADLINE.—Subsection (a)

5 of such section is amended by striking out ‘‘Not later than

6 January 15, 1985, the’’ and inserting in lieu thereof ‘‘The’’.

7 PART II—PROTESTS IN PROCUREMENTS OF

8 AUTOMATIC DATA PROCESSING

9 SEC. 1431. REVOCATION OF DELEGATIONS OF PROCURE10 MENT AUTHORITY.

11 Section 111(b)(3) of the Federal Property and Admin12 istrative Services Act of 1949 (40 U.S.C. 759(b)(3)) is

13 amended by inserting before the period at the end of the

14 third sentence the following: ‘‘, including the authority to

15 revoke a delegation of authority with respect to a particular

16 contract after award of the contract, except that the Admin17 istrator may revoke a delegation after the contract is

18 awarded only when there is a finding of a violation of law

19 or regulation in connection with the contract award.’’.

20 SEC. 1432. AUTHORITY OF THE GENERAL SERVICES ADMIN21 ISTRATION BOARD OF CONTRACT APPEALS.

22 The first sentence of section 111(f)(1) of the Federal

23 Property and Administrative Services Act of 1949 (40

24 U.S.C. 759(f)(1)) is amended to read as follows: ‘‘Upon re25 quest of an interested party in connection with any pro-
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1 curement that is subject to this section (including any such

2 procurement that is subject to delegation of procurement au3 thority), the board of contract appeals of the General Serv4 ices Administration (hereafter in this subsection referred to

5 as the ‘board’) shall review, as provided in this subsection,

6 any decision by a contracting officer that is alleged to vio7 late a statute, a regulation, or the conditions of a delegation

8 of procurement authority.’’.

9 SEC. 1433. PERIODS FOR CERTAIN ACTIONS.

10 (a) SUSPENSION OF PROCUREMENT AUTHORITY.—(1)

11 Section 111(f)(2)(B) of the Federal Property and Adminis12 trative Services Act of 1949 (40 U.S.C. 759(f)(2)(B)) is

13 amended—

14 (A) by redesignating clauses (i) and (ii) as

15 subclauses (I) and (II), respectively;

16 (B) by inserting ‘‘(i)’’ after ‘‘(B)’’; and

17 (C) by adding at the end the following:

18 ‘‘(ii) A suspension under this subparagraph shall not

19 preclude the Federal agency concerned from continuing the

20 procurement process up to but not including award of the

21 contract if the Board determines such action is in the best

22 interests of the United States.’’.

23 (2) Section 111(f) of such Act (40 U.S.C. 759(f)) is

24 amended in paragraph (3) by striking out subparagraph

25 (A) and inserting in lieu thereof the following:
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1 ‘‘(A)(i) If, with respect to an award of a contract, the

2 board receives notice of a protest under this subsection with3 in the period described in clause (ii), the board shall, at

4 the request of an interested party, hold a hearing to deter5 mine whether the board should suspend the procurement au6 thority of the Administrator or the Administrator’s delega7 tion of procurement authority for the protested procurement

8 on an interim basis until the board can decide the protest.

9 ‘‘(ii) The period referred to in clause (i) is the period

10 beginning on the date on which the contract is awarded and

11 ending at the end of the later of—

12 ‘‘(I) the tenth day after the date of contract

13 award; or

14 ‘‘(II) the fifth day after the debriefing date of15 fered to an unsuccessful offeror for any debriefing that

16 is requested and, when requested, is required.

17 ‘‘(iii) The board shall hold the requested hearing with18 in 5 days after the date of the filing of the protest.’’.

19 (b) FINAL DECISION.—Paragraph (4)(B) of such sec20 tion 111(f) is amended—

21 (1) by striking out ‘‘45 working days’’ and in22 serting in lieu thereof ‘‘65 days’’; and

23 (2) by adding at the end the following: ‘‘An

24 amendment which adds a new ground of protest

25 should be resolved, to the maximum extent prac-
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1 ticable, within the time limits established for resolu2 tion of the initial protest.’’.

3 SEC. 1434. DISMISSALS OF PROTESTS.

4 Section 111(f)(4) of the Federal Property and Admin5 istrative Services Act of 1949 (40 U.S.C. 759(f)(4)) is

6 amended by striking out subparagraph (C) and inserting

7 in lieu thereof the following:

8 ‘‘(C) The board may dismiss a protest that the board

9 determines—

10 ‘‘(i) is frivolous;

11 ‘‘(ii) has been brought in bad faith; or

12 ‘‘(iii) does not state on its face a valid basis for

13 protest.

14 ‘‘(D) The board may impose appropriate procedural

15 sanctions, including dismissal of the protest, if the board

16 determines that the board’s process has been willfully abused

17 during the course of a protest.

18 ‘‘(E) If the board makes a determination under sub19 paragraph (C), the board may impose appropriate sanc20 tions. Such sanctions may include imposition of liability

21 on the protester, or other interested party who joins the pro22 test, for payment to the United States of all or that portion

23 of the United States costs, for which such a finding is made,

24 of reviewing the protest, including the fees and other ex25 penses (as defined in section 2412(d)(2)(A) of title 28, Unit-
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1 ed States Code) incurred by the United States in defending

2 the protest. The Federal Acquisition Regulation shall pro3 vide guidance under which the head of an agency may initi4 ate action to obtain such costs, unless (i) special cir5 cumstances would make such payment unjust, or (ii) the

6 protester obtains documents or other information for the

7 first time, after the protest is filed with the board, which

8 establishes that the protest or a portion is frivolous or has

9 been brought in bad faith and the protester then promptly

10 withdraws the protest or portion of the protest.’’.

11 SEC. 1435. AWARD OF COSTS.

12 (a) AWARD.—Section 111(f)(5) of the Federal Property

13 and Administration Services Act of 1949 (40 U.S.C.

14 759(f)(5)) is amended by striking out subparagraph (C)

15 and inserting in lieu thereof the following:

16 ‘‘(C) Whenever the board makes such a determination,

17 it may, in accordance with section 1304 of title 31, United

18 States Code, further declare an appropriate prevailing

19 party to be entitled to the cost of filing and pursuing the

20 protest (including reasonable attorney’s fees and consultant

21 and expert witness fees), and bid and proposal prepara22 tion.’’.

23 (b) DEFINITION OF PREVAILING PARTY.—Section

24 111(f)(9) of such Act (40 U.S.C. 759(f)(9)) is amended by

25 adding at the end the following:
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1 ‘‘(C) The term ‘prevailing party’, with respect to

2 a determination of the board under paragraph (5)(B)

3 that a challenged action of a Federal agency violates

4 a statute or regulation or the conditions of a delega5 tion of procurement authority issued pursuant to this

6 section, means a party that demonstrated such viola7 tion.’’.

8 SEC. 1436. DISMISSAL AGREEMENTS.

9 Section 111(f)(5) of the Federal Property and Admin10 istrative Services Act of 1949 (40 U.S.C. 759(f)(5)), as

11 amended by section 1435, is further amended by adding at

12 the end the following new subparagraphs:

13 ‘‘(D) Any agreement that provides for the dismissal

14 of a protest and involves a direct or indirect expenditure

15 of appropriated funds shall be submitted to the board and

16 shall be made a part of the public record (subject to any

17 protective order considered appropriate by the board) before

18 dismissal of the protest. If a Federal agency is a party to

19 a settlement agreement, the submission of the agreement

20 submitted to the board shall include a memorandum, signed

21 by the contracting officer concerned, that describes in detail

22 the procurement, the grounds for protest, the Federal Gov23 ernment’s position regarding the grounds for protest, the

24 terms of the settlement, and the agency’s position regarding
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1 the propriety of the award or proposed award of the con2 tract at issue in the protest.

3 ‘‘(E) Payment of amounts due from an agency under

4 subparagraph (C) or under the terms of a settlement agree5 ment under subparagraph (D) shall be made from the ap6 propriation made by section 1304 of title 31, United States

7 Code, for the payment of judgments. The Federal agency

8 concerned shall reimburse that appropriation account out

9 of funds available for the procurement.’’.

10 SEC. 1437. MATTERS TO BE COVERED IN REGULATIONS.

11 Section 111(f) of the Federal Property and Adminis12 trative Services Act of 1949 (40 U.S.C. 759(f)) is further

13 amended—

14 (1) by inserting after paragraph (6) the follow15 ing:

16 ‘‘(7)(A) The board shall adopt and issue such rules and

17 procedures as may be necessary to the expeditious disposi18 tion of protests filed under the authority of this subsection.

19 ‘‘(B) The procedures shall provide that, in the com20 putation of any period described in this subsection—

21 ‘‘(i) the day of the act, event, or default from

22 which the designated period of time begins to run not

23 be included; and

24 ‘‘(ii) the last day after such act, event, or default

25 be included, unless—
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1 ‘‘(I) such last day is a Saturday, a Sunday,

2 or a legal holiday; or

3 ‘‘(II) in the case of a filing of a paper at

4 the board, such last day is a day on which

5 weather or other conditions make the board or

6 Federal agency inaccessible, in which event the

7 next day that is not a Saturday, Sunday, or

8 legal holiday shall be included.

9 ‘‘(C) The procedures may provide for electronic filing

10 and dissemination of documents and information required

11 under this subsection and in so providing shall consider the

12 ability of all parties to achieve electronic access to such doc13 uments and records.’’; and

14 (2) by striking out paragraph (8).

15 SEC. 1438. DEFINITION OF PROTEST.

16 Section 111(f)(9) of the Federal Property and Admin17 istrative Services Act of 1949 (40 U.S.C. 759(f)(9)) is

18 amended—

19 (1) by amending subparagraph (A) to read as

20 follows:

21 ‘‘(A) The term ‘protest’ means a written objec22 tion by an interested party to any of the following:

23 ‘‘(i) A solicitation or other request by a

24 Federal agency for offers for a contract for the

25 procurement of property or services.
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1 ‘‘(ii) The cancellation of such a solicitation

2 or other request.

3 ‘‘(iii) An award or proposed award of such

4 a contract.

5 ‘‘(iv) A termination or cancellation of an

6 award of such a contract, if the written objection

7 contains an allegation that the termination or

8 cancellation is based in whole or in part on im9 proprieties concerning the award of the con10 tract.’’; and

11 (2) by capitalizing the first letter of the first

12 word in subparagraph (B).

13 SEC. 1439. OVERSIGHT OF ACQUISITION OF AUTOMATIC

14 DATA PROCESSING EQUIPMENT BY FEDERAL

15 AGENCIES.

16 Section 111 of the Federal Property and Administra17 tive Services Act of 1949 (40 U.S.C. 759) is amended by

18 adding at the end the following new subsection:

19 ‘‘(h) DATA COLLECTION.—(1) The Administrator shall

20 collect and compile data regarding the procurement of auto21 matic data processing equipment under this section. The

22 data collected and compiled shall include, at a minimum,

23 with regard to each procurement the following:

24 ‘‘(A) The procuring agency.

25 ‘‘(B) The contractor.
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1 ‘‘(C) The automatic data processing equipment

2 and services procured.

3 ‘‘(D) The manufacturer of the equipment pro4 cured.

5 ‘‘(E) The amount of the contract, to the extent

6 that the amount is not proprietary information.

7 ‘‘(F) The type of contract used.

8 ‘‘(G) The extent of competition for award.

9 ‘‘(H) Compatibility restrictions.

10 ‘‘(I) Significant modifications of the con11 tract.

12 ‘‘(J) Contract price, to the extent that the

13 price is not proprietary information.

14 ‘‘(2) The head of each Federal agency shall report to

15 the Administrator in accordance with regulations issued by

16 the Administrator all information that the Administrator

17 determines necessary in order to satisfy the requirements

18 in paragraph (1).

19 ‘‘(3) The Administrator—

20 ‘‘(A) shall carry out a systematic, periodic

21 review of information received under this sub22 section;

23 ‘‘(B) shall use such information, as appro24 priate, to determine the compliance of Federal
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1 agencies with the requirements of this section;

2 and

3 ‘‘(C) may take appropriate corrective action

4 regarding an agency’s authority to lease and

5 purchase automatic data processing equipment

6 upon any substantial failure by the head of the

7 agency to report to the Administrator in accord8 ance with this subsection.

9 ‘‘(4) The Administrator shall take appropriate correc10 tive action upon failure of a Federal agency to comply with

11 the terms of any delegation of authority to lease or purchase

12 automatic data processing equipment or failure to comply

13 with any applicable law or regulation.

14 ‘‘(5) The Administrator shall require in the regulations

15 implementing this subsection that (A) data collected pursu16 ant to this subsection be drawn from existing Federal agen17 cy information; and (B) no new or additional information

18 reporting requirements may be imposed on offerors or con19 tractors to collect such data.’’.
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1 Subtitle E—Policy, Definitions, and

2 Other Matters

3 PART I—ARMED SERVICES ACQUISITIONS

4 SEC. 1501. CONGRESSIONAL DEFENSE PROCUREMENT POL5 ICY.

6 Section 2301 of title 10, United States Code, is amend7 ed to read as follows:

8 ‘‘§ 2301. Congressional defense procurement policy

9 ‘‘(a) The Congress finds that in order to ensure na10 tional defense preparedness; conserve fiscal resources; en11 hance science and technology, research and development,

12 and production capability; provide for continued develop13 ment and preservation of an efficient and responsive defense

14 industrial base; and ensure the financial and ethical integ15 rity of defense procurement programs, it is in the interest

16 of the United States that property and services be acquired

17 for the Department of Defense in the most timely, economic,

18 and efficient manner consistent with achieving an optimum

19 balance among efficient processes, full and open access to

20 the procurement system, and sound implementation of so21 cioeconomic policies. It is therefore the policy of Congress

22 that—

23 ‘‘(1) full and open competitive procedures shall

24 be used by the Department of Defense in accordance

25 with the requirements of this chapter;
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1 ‘‘(2) to the maximum extent practicable, the De2 partment of Defense shall acquire commercial items to

3 meet its needs and shall require prime contractors

4 and subcontractors, at all levels, which furnish other

5 than commercial items, to incorporate to the maxi6 mum extent practicable commercial items as compo7 nents of items being supplied to the Department;

8 ‘‘(3) when commercial items and components are

9 not available, practicable, or cost effective, the De10 partment of Defense shall acquire, and shall require

11 prime contractors and subcontractors to incorporate,

12 nondevelopmental items and components to the maxi13 mum extent practicable;

14 ‘‘(4) property and services for the Department of

15 Defense may be acquired by any kind of contract,

16 other than cost-plus-a-percentage-of-cost contracts, but

17 including multiyear contracts, that will promote the

18 interest of the United States and will provide for ap19 propriate allocation of risk between the Government

20 and the contractor with due regard to the nature of

21 the property or services to be acquired;

22 ‘‘(5) contracts, when appropriate, shall provide

23 incentives to contractors to improve productivity

24 through investment in capital facilities, equipment,
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1 flexible manufacturing processes, and advanced and

2 dual-use technology;

3 ‘‘(6) contracts for advance procurement of com4 ponents, parts, and materials necessary for manufac5 ture or for logistics support of a weapon system

6 should, if practicable, be entered into in a manner to

7 achieve economic-lot purchases and more efficient pro8 duction rates;

9 ‘‘(7) procurement protests and disputes shall be

10 fairly and expeditiously resolved through uniform in11 terpretation of relevant laws and regulations;

12 ‘‘(8) the head of an agency shall use advance

13 procurement planning and market research and de14 velop contract requirements in such a manner as is

15 necessary to obtain full and open competition with

16 due regard to the nature of the property or services

17 to be acquired, but may restrict competitions to sup18 pliers of commercial items to foster accomplishment of

19 this objective; and

20 ‘‘(9) the head of an agency shall develop and

21 maintain an acquisition career management program

22 to ensure a professional acquisition work force in ac23 cordance with the requirements of chapter 87 of this

24 title.
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1 ‘‘(b) Further, it is the policy of Congress that procure2 ment policies and procedures for the agencies named in sec3 tion 2303 of this title shall, in accordance with the require4 ments of this title—

5 ‘‘(1) be issued in accordance with and conform

6 to the requirements of sections 22 and 25 of the Office

7 of Federal Procurement Policy Act (41 U.S.C. 418b

8 and 421);

9 ‘‘(2) promote and implement the Congressional

10 policies in subsection (a) and in section 2 of the Of11 fice of Federal Procurement Policy Act (41 U.S.C.

12 401);

13 ‘‘(3) be implemented to support the requirements

14 of such agencies in time of war or national emergency

15 as well as in peacetime;

16 ‘‘(4) promote responsiveness of the procurement

17 system to agency needs by—

18 ‘‘(A) simplifying and streamlining procure19 ment processes, and

20 ‘‘(B) providing incentives to encourage con21 tractors to take actions and make recommenda22 tions that would reduce the costs of property or

23 services to be acquired;

24 ‘‘(5) facilitate the acquisition of commercial

25 items and commercial components at or based on
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1 commercial market prices, without requiring contrac2 tors to change their business practices; and

3 ‘‘(6) promote the acquisition and use of commer4 cial items, commercial components, and

5 nondevelopmental items by requiring descriptions of

6 agency requirements, whenever practicable, in terms

7 of functions to be performed or performance required.

8 ‘‘(c) Further, it is the policy of Congress that purchases

9 and contracts entered into under this chapter should be

10 placed with small business concerns and concerns that are

11 small disadvantaged businesses in conformance with section

12 2323 of this title and subsection (g) of section 15 of the

13 Small Business Act (15 U.S.C. 644).

14 ‘‘(d) It is also the policy of Congress that qualified

15 nonprofit agencies for the blind or severely handicapped (as

16 defined in section 2410d(b) of this title) shall be afforded

17 the maximum practicable opportunity to provide approved

18 commodities and services (as defined in such section) as

19 subcontractors and suppliers under contracts awarded by

20 the Department of Defense.’’.

21 SEC. 1502. DEFINITIONS.

22 Section 2302 of title 10, United States Code, is amend23 ed—

24 (1) by striking out paragraphs (3) and (7);
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1 (2) by redesignating paragraph (6) as para2 graph (12);

3 (3) by redesignating paragraphs (2), (4), and (5)

4 as paragraphs (5), (8), and (9), respectively;

5 (4) by inserting after paragraph (1) the follow6 ing new paragraphs:

7 ‘‘(2) The term ‘procurement’ has the same mean8 ing provided such term in section 4(2) of the Office

9 of Federal Procurement Policy Act (41 U.S.C.

10 403(2)).

11 ‘‘(3) The term ‘procurement system’ has the same

12 meaning provided such term in section 4(3) of the Of13 fice of Federal Procurement Policy Act (41 U.S.C.

14 403(3)).

15 ‘‘(4) The term ‘standards’ has the same meaning

16 provided such term in section 4(4) of the Office of

17 Federal Procurement Policy Act (41 U.S.C. 403(4)).

18 ’’;

19 (5) by inserting after paragraph (5) (as so redes20 ignated) the following new paragraphs:

21 ‘‘(6) The term ‘full and open competition’ has

22 the same meaning provided such term in section 4(6)

23 of the Office of Federal Procurement Policy Act (41

24 U.S.C. 403(6)).
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1 ‘‘(7) The term ‘responsible source’ has the same

2 meaning provided such term in section 4(7) of the Of3 fice of Federal Procurement Policy Act (41 U.S.C.

4 403(7)). ’’; and

5 (6) by inserting after paragraph (9) (as so redes6 ignated) the following new paragraphs:

7 ‘‘(10) The terms ‘item’, ‘item of supply’, and

8 ‘supplies’ have the meaning provided in section 4(10)

9 of the Office of Federal Procurement Policy Act (41

10 U.S.C. 403(10)).

11 ‘‘(11) The term ‘simplified acquisition threshold’

12 has the meaning provided that term in section 4A of

13 the Office of Federal Procurement Policy Act.

14 ‘‘(12) The terms ‘commercial item’,

15 ‘nondevelopmental item’, ‘component’, and ‘commer16 cial component’ have the meanings provided those

17 terms in section 4 of the Office of Federal Procure18 ment Policy Act (41 U.S.C. 403).’’.

19 SEC. 1503. DELEGATION OF PROCUREMENT FUNCTIONS.

20 (a) CONSOLIDATION OF DELEGATION AUTHORITY.—

21 (1) Section 2311 of title 10, United States Code, is amended

22 to read as follows:
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1 ‘‘§ 2311. Assignment and delegation of procurement

2 functions and responsibilities

3 ‘‘(a) IN GENERAL.—Except to the extent expressly pro4 hibited by another provision of law, the head of an agency

5 may delegate, subject to his direction, to any other officer

6 or official of that agency, any power under this chapter.

7 ‘‘(b) PROCUREMENTS FOR OR WITH OTHER AGEN8 CIES.—Subject to subsection (a), to facilitate the procure9 ment of property and services covered by this chapter by

10 each agency named in section 2303 of this title for any other

11 agency, and to facilitate joint procurement by those agen12 cies—

13 ‘‘(1) the head of an agency may, within his

14 agency, delegate functions and assign responsibilities

15 relating to procurement;

16 ‘‘(2) the heads of two or more agencies may by

17 agreement delegate procurement functions and assign

18 procurement responsibilities from one agency to an19 other of those agencies or to an officer or civilian em20 ployee of another of those agencies; and

21 ‘‘(3) the heads of two or more agencies may cre22 ate joint or combined offices to exercise procurement

23 functions and responsibilities.

24 ‘‘(c) APPROVAL OF TERMINATIONS AND REDUCTIONS

25 OF JOINT ACQUISITION PROGRAMS.—(1) The Secretary of

26 Defense shall prescribe regulations that prohibit each mili-
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1 tary department participating in a joint acquisition pro2 gram approved by the Under Secretary of Defense for Ac3 quisition and Technology from terminating or substantially

4 reducing its participation in such program without the ap5 proval of the Under Secretary.

6 ‘‘(2) The regulations shall include the following provi7 sions:

8 ‘‘(A) A requirement that, before any such

9 termination or substantial reduction in partici10 pation is approved, the proposed termination or

11 reduction be reviewed by the Joint Requirements

12 Oversight Council of the Department of Defense.

13 ‘‘(B) A provision that authorizes the Under

14 Secretary of Defense for Acquisition and Tech15 nology to require a military department whose

16 participation in a joint acquisition program has

17 been approved for termination or substantial re18 duction to continue to provide some or all of the

19 funding necessary for the acquisition program to

20 be continued in an efficient manner.’’.

21 (2) The table of sections at the beginning of chapter

22 137 of such title is amended by striking out the item relat23 ing to section 2311 and inserting in lieu thereof the follow24 ing:

‘‘2311. Assignment and delegation of procurement functions and responsibilities.’’.
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1 (b) CONFORMING REPEAL.—(1) Section 2308 of title

2 10, United States Code, is repealed.

3 (2) The table of sections at the beginning of chapter

4 137 of such title is amended by striking out the item related

5 to section 2308.

6 SEC. 1504. DETERMINATIONS AND DECISIONS.

7 Section 2310 of title 10, United States Code, is amend8 ed to read as follows:

9 ‘‘§ 2310. Determinations and decisions

10 ‘‘(a) INDIVIDUAL OR CLASS DETERMINATIONS AND

11 DECISIONS AUTHORIZED.—Determinations and decisions

12 required to be made under this chapter by the head of an

13 agency may be made for an individual purchase or contract

14 or, except to the extent expressly prohibited by another pro15 vision of law, for a class of purchases or contracts. Such

16 determinations and decisions are final.

17 ‘‘(b) WRITTEN FINDINGS REQUIRED.—(1) Each deter18 mination or decision under section 2306(g)(1), 2307(c), or

19 2313(c) of this title shall be based on a written finding by

20 the person making the determination or decision. The find21 ing shall set out facts and circumstances that support the

22 determination or decision.

23 ‘‘(2) Each finding referred to in paragraph (1) is

24 final. The head of the agency making such finding shall
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1 maintain a copy of the finding for not less than 6 years

2 after the date of the determination or decision.’’.

3 SEC. 1505. RESTRICTIONS ON UNDEFINITIZED CONTRAC4 TUAL ACTIONS.

5 (a) CLARIFICATION OF LIMITATION.—Subsection (b) of

6 section 2326 of title 10, United States Code, is amended—

7 (1) in the subsection heading, by striking out

8 ‘‘AND EXPENDITURE’’;

9 (2) in paragraph (1)(B), by striking out ‘‘or ex10 pended’’;

11 (3) in paragraph (2), by striking out ‘‘expend’’

12 and inserting in lieu thereof ‘‘obligate’’; and

13 (4) in paragraph (3)—

14 (A) by striking out ‘‘expended’’ and insert15 ing in lieu thereof ‘‘obligated’’; and

16 (B) by striking out ‘‘expend’’ and inserting

17 in lieu thereof ‘‘obligate’’.

18 (b) WAIVER AUTHORITY.—Such subsection is further

19 amended—

20 (1) by redesignating paragraph (4) as para21 graph (5); and

22 (2) by inserting after paragraph (3) the follow23 ing new paragraph (4):

24 ‘‘(4) The head of an agency may waive the provisions

25 of this subsection with respect to a contract of that agency
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1 if such head of an agency determines that the waiver is

2 necessary in order to support a contingency operation.’’.

3 (c) INAPPLICABILITY OF RESTRICTIONS TO CONTRACTS

4 WITHIN THE SIMPLIFIED ACQUISITION THRESHOLD.—

5 Subsection (g)(1)(B) of such section is amended by striking

6 out ‘‘small purchase threshold’’ and inserting in lieu thereof

7 ‘‘simplified acquisition threshold’’.

8 SEC. 1506. REPEAL OF REQUIREMENT RELATING TO PRO9 DUCTION SPECIAL TOOLING AND PRODUC10 TION SPECIAL TEST EQUIPMENT.

11 (a) REPEAL.—Section 2329 of title 10, United States

12 Code, is repealed.

13 (b) CLERICAL AMENDMENT.—The table of sections at

14 the beginning of chapter 137 of such title is amended by

15 striking out the item related to section 2329.

16 SEC. 1507. REGULATIONS FOR BIDS.

17 Section 2381(a) of title 10, United States Code, is

18 amended by striking out ‘‘(a) The Secretary’’ and all that

19 follows through the end of paragraph (1) and inserting in

20 lieu thereof the following:

21 ‘‘(a) The Secretary of Defense or the Secretary of a

22 military department may—

23 ‘‘(1) prescribe regulations for the preparation,

24 submission, and opening of bids for contracts; and’’.
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1 PART II—CIVILIAN AGENCY ACQUISITIONS

2 SEC. 1551. DEFINITIONS.

3 Section 309 of the Federal Property and Administra4 tive Services Act of 1949 (41 U.S.C. 259) is amended by

5 adding at the end the following new subsections:

6 ‘‘(d) The term ‘simplified acquisition threshold’ has the

7 meaning provided that term by section 4A of the Office of

8 Federal Procurement Policy Act.

9 ‘‘(e) The terms ‘commercial item’, ‘nondevelopmental

10 item’, ‘component’, and ‘commercial component’ have the

11 meanings provided such terms by section 4 of the Office of

12 Federal Procurement Policy Act (41 U.S.C. 403).’’.

13 SEC. 1552. DELEGATION OF PROCUREMENT FUNCTIONS.

14 Title III of the Federal Property and Administrative

15 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

16 by section 1301, is further amended by adding at the end

17 the following new section:

18 ‘‘SEC. 312. ASSIGNMENT AND DELEGATION OF PROCURE19 MENT FUNCTIONS AND RESPONSIBILITIES.

20 ‘‘(a) IN GENERAL.—Except to the extent expressly pro21 hibited by another provision of law, the head of an executive

22 agency may delegate, subject to his direction, to any other

23 officer or official of that agency, any power under this title.

24 ‘‘(b) PROCUREMENTS FOR OR WITH OTHER AGEN25 CIES.—Subject to subsection (a), to facilitate the procure26 ment of property and services covered by this title by each
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1 executive agency for any other executive agency, and to fa2 cilitate joint procurement by those executive agencies—

3 ‘‘(1) the head of an executive agency may, within

4 his executive agency, delegate functions and assign re5 sponsibilities relating to procurement;

6 ‘‘(2) the heads of two or more executive agencies

7 may by agreement delegate procurement functions

8 and assign procurement responsibilities from one ex9 ecutive agency to another of those executive agencies

10 or to an officer or civilian employee of another of

11 those executive agencies; and

12 ‘‘(3) the heads of two or more executive agencies

13 may create joint or combined offices to exercise pro14 curement functions and responsibilities.’’.

15 SEC. 1553. DETERMINATIONS AND DECISIONS.

16 Title III of the Federal Property and Administrative

17 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

18 by section 1552, is further amended by adding at the end

19 the following new section:

20 ‘‘SEC. 313. DETERMINATIONS AND DECISIONS.

21 ‘‘(a) INDIVIDUAL OR CLASS DETERMINATIONS AND

22 DECISIONS AUTHORIZED.—Determinations and decisions

23 required to be made under this title by an agency head may

24 be made for an individual purchase or contract or, except

25 to the extent expressly prohibited by another provision of
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1 law, for a class of purchases or contracts. Such determina2 tions and decisions are final.

3 ‘‘(b) WRITTEN FINDINGS REQUIRED.—(1) Each deter4 mination under section 305(c) shall be based on a written

5 finding by the person making the determination or decision.

6 The finding shall set out facts and circumstances that sup7 port the determination or decision.

8 ‘‘(2) Each finding referred to in paragraph (1) is

9 final. The executive agency making such finding shall

10 maintain a copy of the finding for not less than 6 years

11 after the date of the determination or decision.’’.

12 SEC. 1554. REPEALS.

13 The laws of the United States are amended to read

14 as if the following sections of law had not been enacted:

15 (1) Section 630 of Public Law 102–393.

16 (2) Section 401 of Public Law 103–123.

17 SEC. 1555. COOPERATIVE PURCHASING.

18 Subsection (b) of section 201 of the Federal Property

19 and Administrative Services Act of 1949 (40 U.S.C. 481),

20 is amended to read as follows:

21 ‘‘(b)(1) The Administrator shall, as far as practicable,

22 provide any of the services specified in subsection (a) of this

23 section to any other Federal agency, mixed-ownership Gov24 ernment corporation (as defined in section 9101 of title 31,
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1 United States Code), or the District of Columbia, upon its

2 request.

3 ‘‘(2)(A) The Administrator may provide for the use of

4 Federal supply schedules of the General Services Adminis5 tration by any of the following entities upon request:

6 ‘‘(i) A State, any department or agency of a

7 State, and any political subdivision of a State, in8 cluding a local government.

9 ‘‘(ii) The District of Columbia.

10 ‘‘(iii) The Commonwealth of Puerto Rico.

11 ‘‘(iv) The government of an Indian tribe (as de12 fined in section 4(e) of the Indian Self-Determination

13 and Education Assistance Act (25 U.S.C. 450b(e))).

14 ‘‘(B) Subparagraph (A) may not be construed to au15 thorize an entity referred to in that subparagraph to order

16 existing stock or inventory from federally owned and oper17 ated, or federally owned and contractor operated, supply

18 depots, warehouses, or similar facilities.

19 ‘‘(C) In any case in which an entity listed in subpara20 graph (A) uses a Federal supply schedule, the Adminis21 trator shall require the entity to reimburse the General

22 Services Administration for any administrative costs of

23 using the schedule.

24 ‘‘(3)(A) Upon the request of a qualified nonprofit agen25 cy for the blind or other severely handicapped that is to
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1 provide a commodity or service to the Federal Government

2 under the Javits-Wagner-O’Day Act, the Administrator

3 may provide any of the services specified in subsection (a)

4 to such agency to the extent practicable.

5 ‘‘(B) A nonprofit agency receiving services under the

6 authority of subparagraph (A) shall use the services directly

7 in making or providing an approved commodity or ap8 proved service to the Federal Government.

9 ‘‘(C) In this paragraph:

10 ‘‘(i) The term ‘qualified nonprofit agency for the

11 blind or other severely handicapped’ means—

12 ‘‘(I) a qualified nonprofit agency for the

13 blind, as defined in section 5(3) of the Javits14 Wagner-O’Day Act (41 U.S.C. 48b(3)); and

15 ‘‘(II) a qualified nonprofit agency for other

16 severely handicapped, as defined in section 5(4)

17 of such Act (41 U.S.C. 48b(4)).

18 ‘‘(ii) The terms ‘approved commodity’ and ‘ap19 proved service’ mean a commodity and a service, re20 spectively, that has been determined by the Committee

21 for Purchase from the Blind and Other Severely

22 Handicapped under section 2 of the Javits-Wagner23 O’Day Act (41 U.S.C. 47) to be suitable for procure24 ment by the Federal Government.
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1 ‘‘(iii) The term ‘Javits-Wagner-O’Day Act’

2 means the Act entitled ‘An Act to create a Committee

3 on Purchases of Blind-made Products, and for other

4 purposes’, approved June 25, 1938 (41 U.S.C. 46–

5 48c), that was revised and reenacted in the Act of

6 June 23, 1971 (85 Stat. 77).’’.

7 TITLE II—CONTRACT

8 ADMINISTRATION

9 Subtitle A—Contract Payment

10 PART I—ARMED SERVICES ACQUISITIONS

11 SEC. 2001. CONTRACT FINANCING.

12 (a) REORGANIZATION OF PRINCIPAL AUTHORITY PRO13 VISION.—Section 2307 of title 10, United States Code, is

14 amended—

15 (1) by striking out the section heading and in16 serting in lieu thereof the following:

17 ‘‘§ 2307. Contract financing’’;

18 (2) by inserting ‘‘PAYMENT AUTHORITY.—’’ after

19 ‘‘(a)’’ in subsection (a);

20 (3) by inserting ‘‘PAYMENT AMOUNT.—’’ after

21 ‘‘(b)’’ in subsection (b);

22 (4) by inserting ‘‘SECURITY FOR ADVANCE PAY23 MENTS.—’’ after ‘‘(c)’’ in subsection (c);

24 (5) by inserting ‘‘CONDITIONS FOR PROGRESS

25 PAYMENTS.—’’ after ‘‘(d)’’ in subsection (d); and
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1 (6) by striking out ‘‘(e)(1) In any case’’ and in2 serting in lieu thereof ‘‘(g) ACTION IN CASE OF

3 FRAUD.—(1) In any case’’.

4 (b) TERMINOLOGY CORRECTION.—Such section is fur5 ther amended in subsection (a)(2) by striking out ‘‘bid’’.

6 (c) EFFECTIVE DATE OF LIEN RELATED TO ADVANCE

7 PAYMENTS.—Such section is further amended in subsection

8 (c) by inserting before the period at the end of the third

9 sentence the following: ‘‘and is effective immediately upon

10 the first advancement of funds without filing, notice, or any

11 other action by the United States’’.

12 (d) CONDITIONS FOR PROGRESS PAYMENTS.—Such

13 section is further amended in subsection (d)—

14 (1) in the first sentence of paragraph (1), by

15 striking out ‘‘work, which’’ and all that follows

16 through ‘‘accomplished’’ and inserting in lieu thereof

17 ‘‘work accomplished that meets standards established

18 under the contract’’; and

19 (2) by striking out paragraph (3) and inserting

20 in lieu thereof the following:

21 ‘‘(3) This subsection applies to a contract for an

22 amount equal to or greater than the simplified acquisition

23 threshold.’’.
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1 (e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL

2 ITEMS.—Such section is further amended by inserting after

3 subsection (d) the following new subsection (e):

4 ‘‘(e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL

5 ITEMS.—(1) Payments under subsection (a) for commercial

6 items may be made under such terms and conditions as

7 the head of the agency determines are appropriate or cus8 tomary in the commercial marketplace. The head of the

9 agency shall obtain adequate security for such payments.

10 If the security is in the form of a lien in favor of the United

11 States, such lien is paramount to all other liens and is effec12 tive immediately upon the first payment, without filing, no13 tice, or other action by the United States.

14 ‘‘(2) Advance payments made under subsection (a) for

15 commercial items may include payments, in a total amount

16 of not more than 15 percent of the contract price, in ad17 vance of any performance of work under the contract.

18 ‘‘(3) The conditions of subsections (c) and (d) do not

19 apply to payments made for commercial items in accord20 ance with this subsection.’’.

21 (f) NAVY CONTRACTS.—Such section is further amend22 ed by inserting after subsection (e), as added by subsection

23 (e) of this section, the following new subsection (f):

24 ‘‘(f) CERTAIN NAVY CONTRACTS.—(1) The Secretary of

25 the Navy shall provide that the rate for progress payments
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1 on any contract awarded by the Secretary for repair, main2 tenance, or overhaul of a naval vessel shall be not less

3 than—

4 ‘‘(A) 95 percent, in the case of a firm considered

5 to be a small business; and

6 ‘‘(B) 90 percent, in the case of any other firm.

7 ‘‘(2) The Secretary of the Navy may advance to private

8 salvage companies such funds as the Secretary considers

9 necessary to provide for the immediate financing of salvage

10 operations. Advances under this paragraph shall be made

11 on terms that the Secretary considers adequate for the pro12 tection of the United States.

13 ‘‘(3) The Secretary of the Navy shall ensure that, when

14 partial, progress, or other payments are made under a con15 tract for construction or conversion of a naval vessel, the

16 United States is secured by a lien upon work in progress

17 and on property acquired for performance of the contract

18 on account of all payments so made. The lien is paramount

19 to all other liens.’’.

20 (g) CLERICAL AMENDMENT.—The table of sections at

21 the beginning of chapter 137 of title 10, United States Code,

22 is amended by striking out the item relating to section 2307

23 and inserting in lieu thereof the following:

‘‘2307. Contract financing.’’.

24 (h) REPEAL OF SUPERSEDED PROVISIONS.—
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1 (1) PROGRESS PAYMENTS UNDER CERTAIN NAVY

2 CONTRACTS.—

3 (A) REPEAL.—Section 7312 of title 10,

4 United States Code, is repealed.

5 (B) CLERICAL AMENDMENT.—The table of

6 sections at the beginning of chapter 633 of such

7 title is amended by striking out the item relating

8 to section 7312.

9 (2) ADVANCEMENT OF PAYMENTS FOR NAVY SAL10 VAGE OPERATIONS.—

11 (A) REPEAL.—Section 7364 of such title is

12 repealed.

13 (B) CLERICAL AMENDMENT.—The table of

14 sections at the beginning of chapter 637 of such

15 title is amended by striking out the item relating

16 to section 7364.

17 (3) PARTIAL PAYMENTS UNDER NAVY CON18 TRACTS—

19 (A) REPEAL.—Section 7521 of such title is

20 repealed.

21 (B) CLERICAL AMENDMENT.—The table of

22 sections at the beginning of chapter 645 of such

23 title is amended by striking out the item relating

24 to section 7521.
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1 (4) NAVY RESEARCH CONTRACTS.—Section 7522

2 of such title is amended—

3 (A) by striking out subsection (b); and

4 (B) by redesignating subsection (c) as sub5 section (b).

6 SEC. 2002. REPEAL OF VOUCHERING PROCEDURES SEC7 TION.

8 (a) REPEAL.—Section 2355 of title 10, United States

9 Code, is repealed.

10 (b) CLERICAL AMENDMENT.—The table of sections at

11 the beginning of chapter 139 of such title is amended by

12 striking out the item relating to section 2355.

13 PART II—CIVILIAN AGENCY ACQUISITIONS

14 SEC. 2051. CONTRACT FINANCING.

15 (a) REORGANIZATION OF PRINCIPAL AUTHORITY PRO16 VISION.—Section 305 of the Federal Property and Adminis17 trative Services Act of 1949 (41 U.S.C. 255) is amended—

18 (1) by striking out the section heading and the

19 section designation and inserting in lieu thereof the

20 following:

21 ‘‘SEC. 305. CONTRACT FINANCING.’’;

22 (2) by inserting ‘‘PAYMENT AUTHORITY.—’’ after

23 ‘‘(a)’’ in subsection (a);

24 (3) by inserting ‘‘PAYMENT AMOUNT.—’’ after

25 ‘‘(b)’’ in subsection (b); and
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1 (4) by inserting ‘‘SECURITY FOR ADVANCE PAY2 MENTS.—’’ after ‘‘(c)’’ in subsection (c).

3 (b) TERMINOLOGY CORRECTION.—Such section is fur4 ther amended in subsection (a)(2) by striking out ‘‘bid’’.

5 (c) EFFECTIVE DATE OF LIEN RELATED TO ADVANCE

6 PAYMENTS.—Such section is further amended in subsection

7 (c) by inserting before the period at the end of the third

8 sentence the following: ‘‘and is effective immediately upon

9 the first advancement of funds without filing, notice, or any

10 other action by the United States’’.

11 (d) REVISION OF CIVILIAN AGENCY PROVISION TO EN12 SURE UNIFORM REQUIREMENTS FOR PROGRESS PAY13 MENTS.—

14 (1) IN GENERAL.—Such section is further

15 amended by adding at the end the following new sub16 sections:

17 ‘‘(d) CONDITIONS FOR PROGRESS PAYMENTS.—(1) The

18 executive agency shall ensure that any payment for work

19 in progress (including materials, labor, and other items)

20 under a contract of an executive agency that provides for

21 such payments is commensurate with the work accom22 plished that meets standards established under the contract.

23 The contractor shall provide such information and evidence

24 as the executive agency determines necessary to permit the

25 executive agency to carry out the preceding sentence.
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1 ‘‘(2) The executive agency shall ensure that progress

2 payments referred to in paragraph (1) are not made for

3 more than 80 percent of the work accomplished under the

4 contract so long as the executive agency has not made the

5 contractual terms, specifications, and price definite.

6 ‘‘(3) This subsection applies to a contract for an

7 amount equal to or greater than the simplified acquisition

8 threshold.

9 ‘‘(e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL

10 ITEMS.—(1) Payments under subsection (a) for commercial

11 items may be made under such terms and conditions as

12 the executive agency determines are appropriate or cus13 tomary in the commercial marketplace. The executive agen14 cy shall obtain adequate security for such payments. If the

15 security is in the form of a lien in favor of the United

16 States, such lien is paramount to all other liens and is effec17 tive immediately upon the first payment, without filing, no18 tice, or other action by the United States.

19 ‘‘(2) Advance payments made under subsection (a) for

20 commercial items may include payments, in a total amount

21 of not more than 15 percent of the contract price, in ad22 vance of any performance of work under the contract.

23 ‘‘(3) The conditions of subsections (c) and (d) do not

24 apply to payments made for commercial items in accord25 ance with this subsection.
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1 ‘‘(f) ACTION IN CASE OF FRAUD.—(1) In any case in

2 which the remedy coordination official of an executive agen3 cy finds that there is substantial evidence that the request

4 of a contractor for advance, partial, or progress payment

5 under a contract awarded by that executive agency is based

6 on fraud, the remedy coordination official shall recommend

7 that the executive agency reduce or suspend further pay8 ments to such contractor.

9 ‘‘(2) An executive agency receiving a recommendation

10 under paragraph (1) in the case of a contractor’s request

11 for payment under a contract shall determine whether there

12 is substantial evidence that the request is based on fraud.

13 Upon making such a determination, the executive agency

14 may reduce or suspend further payments to the contractor

15 under such contract.

16 ‘‘(3) The extent of any reduction or suspension of pay17 ments by an executive agency under paragraph (2) on the

18 basis of fraud shall be reasonably commensurate with the

19 anticipated loss to the United States resulting from the

20 fraud.

21 ‘‘(4) A written justification for each decision of the ex22 ecutive agency whether to reduce or suspend payments

23 under paragraph (2), and for each recommendation re24 ceived by the executive agency in connection with such deci-
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1 sion, shall be prepared and be retained in the files of the

2 executive agency.

3 ‘‘(5) Each executive agency shall prescribe procedures

4 to ensure that, before the executive agency decides to reduce

5 or suspend payments in the case of a contractor under

6 paragraph (2), the contractor is afforded notice of the pro7 posed reduction or suspension and an opportunity to sub8 mit matters to the executive agency in response to such pro9 posed reduction or suspension.

10 ‘‘(6) Not later than 180 days after the date on which

11 an executive agency reduces or suspends payments to a con12 tractor under paragraph (2), the remedy coordination offi13 cial of the executive agency shall—

14 ‘‘(A) review the determination of fraud on which

15 the reduction or suspension is based; and

16 ‘‘(B) transmit a recommendation to the executive

17 agency whether the suspension or reduction should

18 continue.

19 ‘‘(7) Each executive agency who receives recommenda20 tions made by a remedy coordination official of the execu21 tive agency to reduce or suspend payments under para22 graph (2) during a fiscal year shall prepare for such year

23 a report that contains the recommendations, the actions

24 taken on the recommendations and the reasons for such ac25 tions, and an assessment of the effects of such actions on
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1 the Federal Government. Any such report shall be available

2 to any Member of Congress upon request.

3 ‘‘(8) An executive agency may not delegate responsibil4 ities under this subsection to any person in a position below

5 level IV of the Executive Schedule.

6 ‘‘(9) In this subsection, the term ‘remedy coordination

7 official’, with respect to an executive agency, means the per8 son or entity in that executive agency who coordinates with9 in that executive agency the administration of criminal,

10 civil, administrative, and contractual remedies resulting

11 from investigations of fraud or corruption related to pro12 curement activities.’’.

13 (2) RELATIONSHIP TO PROMPT PAYMENT RE14 QUIREMENTS.—The amendment made by paragraph

15 (1) is not intended to impair or modify procedures

16 required by the provisions of chapter 39 of title 31,

17 United States Code, and the regulations issued pursu18 ant to such provisions of law, that relate to progress

19 payment requests, as such procedures are in effect on

20 the date of the enactment of this Act.

21 PART III—ACQUISITIONS GENERALLY

22 SEC. 2061. INTEREST PENALTY ON CONTRACT CLOSE-OUT

23 LAG-TIME.

24 Section 3903(a)(1) of title 31, United States Code, is

25 amended—
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1 (1) by striking out ‘‘or’’ at the end of subpara2 graph (A);

3 (2) by inserting ‘‘or’’ after the semicolon at the

4 end of subparagraph (B); and

5 (3) by adding at the end the following new sub6 paragraph:

7 ‘‘(C) in any case in which the Government

8 delays making final payment under the contract

9 for more than one year after the date on which

10 the contractor completes all obligations under the

11 contract (including submission to the Govern12 ment of final incurred costs for all years covered

13 by the contract), the date on which the contractor

14 completes such obligations;’’.

15 Subtitle B—Cost Principles

16 PART I—ARMED SERVICES ACQUISITIONS

17 SEC. 2101. ALLOWABLE CONTRACT COSTS.

18 (a) EXTENSION OF COVERAGE TO COAST GUARD AND

19 NASA; OTHER MISCELLANEOUS AMENDMENTS.—Section

20 2324 of title 10, United States Code, is amended as follows:

21 (1) Subsection (a) is amended—

22 (A) by inserting after ‘‘(a)’’ the following:

23 ‘‘INDIRECT COST THAT VIOLATES A FAR COST

24 PRINCIPLE.—’’;
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1 (B) by striking out ‘‘Secretary of Defense’’

2 and inserting in lieu thereof ‘‘head of an agen3 cy’’;

4 (C) by striking out ‘‘Department of De5 fense’’ and inserting in lieu thereof ‘‘agency’’;

6 and

7 (D) by striking out ‘‘the Department of De8 fense Supplement’’ and inserting in lieu thereof

9 ‘‘applicable agency supplement’’.

10 (2) Subsection (b) is amended—

11 (A) by inserting after ‘‘(b)’’ the following:

12 ‘‘PENALTY FOR VIOLATION OF COST PRIN13 CIPLE.—’’;

14 (B) in subparagraph (B) of paragraph (1)

15 by striking out ‘‘regulations issued by the Sec16 retary’’ and inserting in lieu thereof ‘‘provisions

17 in the Federal Acquisition Regulation’’; and

18 (C) by striking out ‘‘Secretary’’ each

19 place it appears and inserting in lieu thereof

20 ‘‘head of the agency’’.

21 (3) Subsection (c) is amended—

22 (A) by inserting after ‘‘(c)’’ the following:

23 ‘‘WAIVER OF PENALTY.—’’; and

24 (B) by striking out ‘‘The Secretary shall

25 prescribe regulations providing’’ in the first sen-
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1 tence and inserting in lieu thereof ‘‘The Federal

2 Acquisition Regulation shall provide’’.

3 (4) Subsection (d) is amended—

4 (A) by inserting after ‘‘(d)’’ the following:

5 ‘‘APPLICABILITY OF CONTRACT DISPUTES PRO6 CEDURE TO DISALLOWANCE OF COST AND AS7 SESSMENT OF PENALTY.—’’; and

8 (B) by striking out ‘‘the Secretary’’ and in9 serting in lieu thereof ‘‘the head of an agency’’.

10 (5) Subsection (e) is amended—

11 (A) by inserting after ‘‘(e)’’ the following:

12 ‘‘SPECIFIC COSTS NOT ALLOWABLE.—’’;

13 (B) in subparagraph (D) of paragraph (1),

14 by striking out ‘‘regulations of the Secretary of

15 Defense’’ and inserting in lieu thereof ‘‘provi16 sions of the Federal Acquisition Regulation’’;

17 (C) in subparagraph (M) of paragraph (1),

18 by striking out ‘‘regulations prescribed by the

19 Secretary of Defense’’ and inserting in lieu there20 of ‘‘the Federal Acquisition Regulation’’;

21 (D) in subparagraph (A) of paragraph (2),

22 by inserting ‘‘of Defense’’ after ‘‘Secretary’’ the

23 first place it occurs;

24 (E) in subparagraph (C) of paragraph (2),

25 by striking out ‘‘head of the agency’’ in the first
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1 sentence and inserting in lieu thereof ‘‘Secretary

2 of Defense’’;

3 (F) in subparagraph (A) of paragraph (3),

4 by striking out ‘‘regulations prescribed by the

5 Secretary’’ and inserting in lieu thereof ‘‘the

6 Federal Acquisition Regulation’’; and

7 (G) by amending paragraph (4) to read as

8 follows:

9 ‘‘(4) The provisions of the Federal Acquisition Regula10 tion implementing this section may establish appropriate

11 definitions, exclusions, limitations, and qualifications.’’.

12 (6) Subsection (f) is amended—

13 (A) in paragraph (1)—

14 (i) by striking out ‘‘(1)’’ and all that

15 follows through ‘‘The amendments’’ and in16 serting in lieu thereof the following: ‘‘RE17 QUIRED REGULATIONS.—The Federal Ac18 quisition Regulation shall contain provi19 sions on the allowability of contractor costs.

20 Such provisions’’, and

21 (ii) by striking out ‘‘These regulations’’

22 and inserting in lieu thereof ‘‘The regula23 tions’’; and

24 (B) in paragraphs (2), (3), and (4)—
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1 (i) by striking out ‘‘defense’’ before

2 ‘‘contract auditor’’ each place it appears,

3 and

4 (ii) by striking out ‘‘regulation’’ each

5 place it appears and inserting in lieu there6 of ‘‘Federal Acquisition Regulation’’.

7 (7) Subsection (g) is amended to read as follows:

8 ‘‘(g) APPLICABILITY OF REGULATIONS TO SUB9 CONTRACTORS.—The regulations referred to in subsections

10 (e) and (f)(1) shall require prime contractors of a covered

11 contract, to the maximum extent practicable, to apply the

12 provisions of such regulations to all subcontractors of the

13 covered contract.’’.

14 (8) Subsection (h) is amended—

15 (A) by inserting after ‘‘(h)’’ the following:

16 ‘‘CONTRACTOR CERTIFICATION REQUIRED.—’’;

17 (B) by striking out ‘‘by the Secretary’’ in

18 paragraph (1) and inserting in lieu thereof ‘‘in

19 the Federal Acquisition Regulation’’; and

20 (C) by striking out ‘‘Secretary of Defense’’

21 in paragraph (2) and inserting in lieu thereof

22 ‘‘head of the agency’’.

23 (9) Subsection (i) is amended by striking out

24 ‘‘The submission to the Department of Defense’’ and

25 inserting in lieu thereof ‘‘PENALTIES FOR SUBMIS-
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1 SION OF COST KNOWN AS NOT ALLOWABLE.—The

2 submission to an agency’’.

3 (10) Subsection (j) is amended—

4 (A) by inserting after ‘‘(j)’’ the following:

5 ‘‘CONTRACTOR TO HAVE BURDEN OF

6 PROOF.—’’; and

7 (B) by striking out ‘‘United States Claims

8 Court’’ and inserting in lieu thereof ‘‘United

9 States Court of Federal Claims’’.

10 (11) Subsection (k) is amended—

11 (A) by inserting after ‘‘(k)’’ the following:

12 ‘‘PROCEEDING COSTS NOT ALLOWABLE.—’’;

13 (B) in paragraph (2), by striking out ‘‘deci14 sion by the Department of Defense—’’ and in15 serting in lieu thereof ‘‘decision—’’; and

16 (C) in paragraph (4)—

17 (i) by inserting after ‘‘head of the

18 agency’’ the following: ‘‘or Secretary of the

19 military department concerned’’,

20 (ii) by striking out ‘‘under regulations

21 prescribed by such agency head’’ and insert22 ing in lieu thereof ‘‘in accordance with the

23 Federal Acquisition Regulation’’,

24 (iii) by inserting ‘‘or Secretary’’ after

25 ‘‘agency head’’, and
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1 (iv) by inserting before the period at

2 the end the following: ‘‘or military depart3 ment’’.

4 (b) COVERED CONTRACT DEFINED.—Such section is

5 further amended by striking out subsections (l) and (m) and

6 inserting in lieu thereof the following:

7 ‘‘(l) DEFINITIONS.—In this section:

8 ‘‘(1)(A) The term ‘covered contract’ means a con9 tract for an amount in excess of $500,000 that is en10 tered into by the head of an agency, except that such

11 term does not include a fixed-price contract without

12 cost incentives or any contract for the purchase of

13 commercial items.

14 ‘‘(B) The dollar amount in subparagraph (A)

15 shall be adjusted on October 1 of each year divisible

16 by 5 to the equivalent amount in constant fiscal year

17 1993 dollars (rounded to the nearest $10,000).

18 ‘‘(2) The term ‘head of the agency’ or ‘agency

19 head’ does not include the Secretary of a military de20 partment.

21 ‘‘(3) The term ‘agency’ means the Department of

22 Defense, the Coast Guard, and the National Aero23 nautics and Space Administration.’’.

24 (c) REGULATIONS.—The regulations of the Secretary

25 of Defense implementing section 2324 of title 10, United
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1 States Code, shall remain in effect until the Federal Acqui2 sition Regulation is revised to implement the amendments

3 made by this section.

4 SEC. 2102. REPEAL OF AUTHORITY FOR CONTRACT PROFIT

5 CONTROLS DURING EMERGENCY PERIODS.

6 (a) REPEAL.—Section 2382 of title 10, United States

7 Code, is repealed.

8 (b) CLERICAL AMENDMENT.—The table of sections at

9 the beginning of chapter 141 of such title is amended by

10 striking out the item relating to section 2382.

11 PART II—CIVILIAN AGENCY ACQUISITIONS

12 SEC. 2151. ALLOWABLE CONTRACT COSTS.

13 Section 306 of the Federal Property and Administra14 tive Services Act of 1949 (41 U.S.C. 256) is amended to

15 read as follows:

16 ‘‘SEC. 306. ALLOWABLE COSTS.

17 ‘‘(a) INDIRECT COST THAT VIOLATES A FAR COST

18 PRINCIPLE.—An executive agency shall require that a cov19 ered contract provide that if the contractor submits to the

20 executive agency a proposal for settlement of indirect costs

21 incurred by the contractor for any period after such costs

22 have been accrued and if that proposal includes the submis23 sion of a cost which is unallowable because the cost violates

24 a cost principle in the Federal Acquisition Regulation (re25 ferred to in section 25(c)(1) of the Office of Federal Procure-
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1 ment Policy Act (41 U.S.C. 421(c)(1)) or an executive agen2 cy supplement to the Federal Acquisition Regulation, the

3 cost shall be disallowed.

4 ‘‘(b) PENALTY FOR VIOLATION OF COST PRINCIPLE.—

5 (1) If the executive agency determines that a cost submitted

6 by a contractor in its proposal for settlement is expressly

7 unallowable under a cost principle referred to in subsection

8 (a) that defines the allowability of specific selected costs,

9 the executive agency shall assess a penalty against the con10 tractor in an amount equal to—

11 ‘‘(A) the amount of the disallowed cost allocated

12 to covered contracts for which a proposal for settle13 ment of indirect costs has been submitted; plus

14 ‘‘(B) interest (to be computed based on provi15 sions in the Federal Acquisition Regulation) to com16 pensate the United States for the use of any funds

17 which a contractor has been paid in excess of the

18 amount to which the contractor was entitled.

19 ‘‘(2) If the executive agency determines that a proposal

20 for settlement of indirect costs submitted by a contractor

21 includes a cost determined to be unallowable in the case

22 of such contractor before the submission of such proposal,

23 the executive agency shall assess a penalty against the con24 tractor in an amount equal to two times the amount of the
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1 disallowed cost allocated to covered contracts for which a

2 proposal for settlement of indirect costs has been submitted.

3 ‘‘(c) WAIVER OF PENALTY.—The Federal Acquisition

4 Regulation shall provide for a penalty under subsection (b)

5 to be waived in the case of a contractor’s proposal for settle6 ment of indirect costs when—

7 ‘‘(1) the contractor withdraws the proposal before

8 the formal initiation of an audit of the proposal by

9 the Federal Government and resubmits a revised pro10 posal;

11 ‘‘(2) the amount of unallowable costs subject to

12 the penalty is insignificant; or

13 ‘‘(3) the contractor demonstrates, to the contract14 ing officer’s satisfaction, that—

15 ‘‘(A) it has established appropriate policies

16 and personnel training and an internal control

17 and review system that provide assurances that

18 unallowable costs subject to penalties are pre19 cluded from being included in the contractor’s

20 proposal for settlement of indirect costs; and

21 ‘‘(B) the unallowable costs subject to the

22 penalty were inadvertently incorporated into the

23 proposal.

24 ‘‘(d) APPLICABILITY OF CONTRACT DISPUTES PROCE25 DURE TO DISALLOWANCE OF COST AND ASSESSMENT OF
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1 PENALTY.—An action of an executive agency under sub2 section (a) or (b)—

3 ‘‘(1) shall be considered a final decision for the

4 purposes of section 6 of the Contract Disputes Act of

5 1978 (41 U.S.C. 605); and

6 ‘‘(2) is appealable in the manner provided in

7 section 7 of such Act (41 U.S.C. 606).

8 ‘‘(e) SPECIFIC COSTS NOT ALLOWABLE.—(1) The fol9 lowing costs are not allowable under a covered contract:

10 ‘‘(A) Costs of entertainment, including amuse11 ment, diversion, and social activities, and any costs

12 directly associated with such costs (such as tickets to

13 shows or sports events, meals, lodging, rentals, trans14 portation, and gratuities).

15 ‘‘(B) Costs incurred to influence (directly or in16 directly) legislative action on any matter pending be17 fore Congress or a State legislature.

18 ‘‘(C) Costs incurred in defense of any civil or

19 criminal fraud proceeding or similar proceeding (in20 cluding filing of any false certification) brought by

21 the United States where the contractor is found liable

22 or had pleaded nolo contendere to a charge of fraud

23 or similar proceeding (including filing of a false cer24 tification).
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1 ‘‘(D) Payments of fines and penalties resulting

2 from violations of, or failure to comply with, Federal,

3 State, local, or foreign laws and regulations, except

4 when incurred as a result of compliance with specific

5 terms and conditions of the contract or specific writ6 ten instructions from the contracting officer authoriz7 ing in advance such payments in accordance with ap8 plicable provisions of the Federal Acquisition Regula9 tion.

10 ‘‘(E) Costs of membership in any social, dining,

11 or country club or organization.

12 ‘‘(F) Costs of alcoholic beverages.

13 ‘‘(G) Contributions or donations, regardless of

14 the recipient.

15 ‘‘(H) Costs of advertising designed to promote

16 the contractor or its products.

17 ‘‘(I) Costs of promotional items and memora18 bilia, including models, gifts, and souvenirs.

19 ‘‘(J) Costs for travel by commercial aircraft

20 which exceed the amount of the standard commercial

21 fare.

22 ‘‘(K) Costs incurred in making any payment

23 (commonly known as a ‘golden parachute payment’)

24 which is—
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1 ‘‘(i) in an amount in excess of the normal

2 severance pay paid by the contractor to an em3 ployee upon termination of employment; and

4 ‘‘(ii) is paid to the employee contingent

5 upon, and following, a change in management

6 control over, or ownership of, the contractor or a

7 substantial portion of the contractor’s assets.

8 ‘‘(L) Costs of commercial insurance that protects

9 against the costs of the contractor for correction of the

10 contractor’s own defects in materials or workmanship.

11 ‘‘(M) Costs of severance pay paid by the contrac12 tor to foreign nationals employed by the contractor

13 under a service contract performed outside the United

14 States, to the extent that the amount of severance pay

15 paid in any case exceeds the amount paid in the in16 dustry involved under the customary or prevailing

17 practice for firms in that industry providing similar

18 services in the United States, as determined under the

19 Federal Acquisition Regulation.

20 ‘‘(N) Costs of severance pay paid by the contrac21 tor to a foreign national employed by the contractor

22 under a service contract performed in a foreign coun23 try if the termination of the employment of the for24 eign national is the result of the closing of, or the cur25 tailment of activities at, a United States facility in
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1 that country at the request of the government of that

2 country.

3 ‘‘(O) Costs incurred by a contractor in connec4 tion with any criminal, civil, or administrative pro5 ceeding commenced by the United States or a State,

6 to the extent provided in subsection (k).

7 ‘‘(2)(A) Pursuant to the Federal Acquisition Regula8 tion and subject to the availability of appropriations, an

9 executive agency, in awarding a covered contract, may

10 waive the application of the provisions of paragraphs

11 (1)(M) and (1)(N) to that contract if the executive agency

12 determines that—

13 ‘‘(i) the application of such provisions to the

14 contract would adversely affect the continuation of a

15 program, project, or activity that provides significant

16 support services for employees of the executive agency

17 posted outside the United States;

18 ‘‘(ii) the contractor has taken (or has established

19 plans to take) appropriate actions within the contrac20 tor’s control to minimize the amount and number of

21 incidents of the payment of severance pay by the con22 tractor to employees under the contract who are for23 eign nationals; and

24 ‘‘(iii) the payment of severance pay is necessary

25 in order to comply with a law that is generally appli-
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1 cable to a significant number of businesses in the

2 country in which the foreign national receiving the

3 payment performed services under the contract or is

4 necessary to comply with a collective bargaining

5 agreement.

6 ‘‘(B) An executive agency shall include in the solicita7 tion for a covered contract a statement indicating—

8 ‘‘(i) that a waiver has been granted under sub9 paragraph (A) for the contract; or

10 ‘‘(ii) whether the executive agency will consider

11 granting such a waiver, and, if the executive agency

12 will consider granting a waiver, the criteria to be

13 used in granting the waiver.

14 ‘‘(C) An executive agency shall make the final deter15 mination regarding whether to grant a waiver under sub16 paragraph (A) with respect to a covered contract before

17 award of the contract.

18 ‘‘(3) The provisions of the Federal Acquisition Regula19 tion implementing this section may establish appropriate

20 definitions, exclusions, limitations, and qualifications. Any

21 submission by a contractor of costs which are incurred by

22 the contractor and which are claimed to be allowable under

23 Department of Energy management and operating con24 tracts shall be considered a ‘proposal for settlement of indi-
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1 rect costs incurred by the contractor for any period after

2 such costs have been accrued’, as used in this section.

3 ‘‘(f) REQUIRED REGULATIONS.—(1) The Federal Ac4 quisition Regulation shall contain provisions on the allow5 ability of contractor costs. Such provisions shall define in

6 detail and in specific terms those costs which are unallow7 able, in whole or in part, under covered contracts. The regu8 lations shall, at a minimum, clarify the cost principles ap9 plicable to contractor costs of the following:

10 ‘‘(A) Air shows.

11 ‘‘(B) Membership in civic, community, and pro12 fessional organizations.

13 ‘‘(C) Recruitment.

14 ‘‘(D) Employee morale and welfare.

15 ‘‘(E) Actions to influence (directly or indirectly)

16 executive branch action on regulatory and contract

17 matters (other than costs incurred in regard to con18 tract proposals pursuant to solicited or unsolicited

19 bids).

20 ‘‘(F) Community relations.

21 ‘‘(G) Dining facilities.

22 ‘‘(H) Professional and consulting services, in23 cluding legal services.

24 ‘‘(I) Compensation.

25 ‘‘(J) Selling and marketing.
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1 ‘‘(K) Travel.

2 ‘‘(L) Public relations.

3 ‘‘(M) Hotel and meal expenses.

4 ‘‘(N) Expense of corporate aircraft.

5 ‘‘(O) Company-furnished automobiles.

6 ‘‘(P) Advertising.

7 ‘‘(2) The Federal Acquisition Regulation shall require

8 that a contracting officer not resolve any questioned costs

9 until the contracting officer has obtained—

10 ‘‘(A) adequate documentation with respect to

11 such costs; and

12 ‘‘(B) the opinion of the contract auditor on the

13 allowability of such costs.

14 ‘‘(3) The Federal Acquisition Regulation shall provide

15 that, to the maximum extent practicable, a contract auditor

16 be present at any negotiation or meeting with the contractor

17 regarding a determination of the allowability of indirect

18 costs of the contractor.

19 ‘‘(4) The Federal Acquisition Regulation shall require

20 that all categories of costs designated in the report of a con21 tract auditor as questioned with respect to a proposal for

22 settlement be resolved in such a manner that the amount

23 of the individual questioned costs that are paid will be re24 flected in the settlement.
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1 ‘‘(g) APPLICABILITY OF REGULATIONS TO SUB2 CONTRACTORS.—The regulations referred to in subsections

3 (e) and (f)(1) shall require prime contractors of a covered

4 contract, to the maximum extent practicable, to apply the

5 provisions of such regulations to all subcontractors of the

6 covered contract.

7 ‘‘(h) CONTRACTOR CERTIFICATION REQUIRED.—(1) A

8 proposal for settlement of indirect costs applicable to a cov9 ered contract shall include a certification by an official of

10 the contractor that, to the best of the certifying official’s

11 knowledge and belief, all indirect costs included in the pro12 posal are allowable. Any such certification shall be in a

13 form prescribed in the Federal Acquisition Regulation.

14 ‘‘(2) An executive agency may, in an exceptional case,

15 waive the requirement for certification under paragraph (1)

16 in the case of any contract if the agency—

17 ‘‘(A) determines in such case that it would be in

18 the interest of the United States to waive such certifi19 cation; and

20 ‘‘(B) states in writing the reasons for that deter21 mination and makes such determination available to

22 the public.

23 ‘‘(i) PENALTIES FOR SUBMISSION OF COST KNOWN AS

24 NOT ALLOWABLE.—The submission to an executive agency

25 of a proposal for settlement of costs for any period after
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1 such costs have been accrued that includes a cost that is

2 expressly specified by statute or regulation as being unal3 lowable, with the knowledge that such cost is unallowable,

4 shall be subject to the provisions of section 287 of title 18,

5 United States Code, and section 3729 of title 31, United

6 States Code.

7 ‘‘(j) CONTRACTOR TO HAVE BURDEN OF PROOF.—In

8 a proceeding before a board of contract appeals, the United

9 States Court of Federal Claims, or any other Federal court

10 in which the reasonableness of indirect costs for which a

11 contractor seeks reimbursement from the United States is

12 in issue, the burden of proof shall be upon the contractor

13 to establish that those costs are reasonable.

14 ‘‘(k) PROCEEDING COSTS NOT ALLOWABLE.—(1) Ex15 cept as otherwise provided in this subsection, costs incurred

16 by a contractor in connection with any criminal, civil, or

17 administrative proceeding commenced by the United States

18 or a State are not allowable as reimbursable costs under

19 a covered contract if the proceeding (A) relates to a viola20 tion of, or failure to comply with, a Federal or State statute

21 or regulation, and (B) results in a disposition described in

22 paragraph (2).

23 ‘‘(2) A disposition referred to in paragraph (1)(B) is

24 any of the following:
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1 ‘‘(A) In the case of a criminal proceeding, a con2 viction (including a conviction pursuant to a plea of

3 nolo contendere) by reason of the violation or failure

4 referred to in paragraph (1).

5 ‘‘(B) In the case of a civil or administrative pro6 ceeding involving an allegation of fraud or similar

7 misconduct, a determination of contractor liability on

8 the basis of the violation or failure referred to in

9 paragraph (1).

10 ‘‘(C) In the case of any civil or administrative

11 proceeding, the imposition of a monetary penalty by

12 reason of the violation or failure referred to in para13 graph (1).

14 ‘‘(D) A final decision—

15 ‘‘(i) to debar or suspend the contractor,

16 ‘‘(ii) to rescind or void the contract, or

17 ‘‘(iii) to terminate the contract for default,

18 by reason of the violation or failure referred to in

19 paragraph (1).

20 ‘‘(E) A disposition of the proceeding by consent

21 or compromise if such action could have resulted in

22 a disposition described in subparagraph (A), (B), (C),

23 or (D).

24 ‘‘(3) In the case of a proceeding referred to in para25 graph (1) that is commenced by the United States and is
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1 resolved by consent or compromise pursuant to an agree2 ment entered into by a contractor and the United States,

3 the costs incurred by the contractor in connection with such

4 proceeding that are otherwise not allowable as reimbursable

5 costs under such paragraph may be allowed to the extent

6 specifically provided in such agreement.

7 ‘‘(4) In the case of a proceeding referred to in para8 graph (1) that is commenced by a State, the executive agen9 cy that awarded the covered contract involved in the pro10 ceeding may allow the costs incurred by the contractor in

11 connection with such proceeding as reimbursable costs if the

12 executive agency determines, in accordance with the Federal

13 Acquisition Regulation, that the costs were incurred as a

14 result of (A) a specific term or condition of the contract,

15 or (B) specific written instructions of the executive agency.

16 ‘‘(5)(A) Except as provided in subparagraph (C), costs

17 incurred by a contractor in connection with a criminal,

18 civil, or administrative proceeding commenced by the Unit19 ed States or a State in connection with a covered contract

20 may be allowed as reimbursable costs under the contract

21 if such costs are not disallowable under paragraph (1), but

22 only to the extent provided in subparagraph (B).

23 ‘‘(B)(i) The amount of the costs allowable under sub24 paragraph (A) in any case may not exceed the amount

25 equal to 80 percent of the amount of the costs incurred, to
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1 the extent that such costs are determined to be otherwise

2 allowable and allocable under the Federal Acquisition Regu3 lation.

4 ‘‘(ii) Regulations issued for the purpose of clause (i)

5 shall provide for appropriate consideration of the complex6 ity of procurement litigation, generally accepted principles

7 governing the award of legal fees in civil actions involving

8 the United States as a party, and such other factors as may

9 be appropriate.

10 ‘‘(C) In the case of a proceeding referred to in subpara11 graph (A), contractor costs otherwise allowable as reimburs12 able costs under this paragraph are not allowable if (i) such

13 proceeding involves the same contractor misconduct alleged

14 as the basis of another criminal, civil, or administrative

15 proceeding, and (ii) the costs of such other proceeding are

16 not allowable under paragraph (1).

17 ‘‘(6) In this subsection:

18 ‘‘(A) The term ‘proceeding’ includes an inves19 tigation.

20 ‘‘(B) The term ‘costs’, with respect to a proceed21 ing—

22 ‘‘(i) means all costs incurred by a contrac23 tor, whether before or after the commencement of

24 any such proceeding; and

25 ‘‘(ii) includes—
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1 ‘‘(I) administrative and clerical ex2 penses;

3 ‘‘(II) the cost of legal services, includ4 ing legal services performed by an employee

5 of the contractor;

6 ‘‘(III) the cost of the services of ac7 countants and consultants retained by the

8 contractor; and

9 ‘‘(IV) the pay of directors, officers, and

10 employees of the contractor for time devoted

11 by such directors, officers, and employees to

12 such proceeding.

13 ‘‘(C) The term ‘penalty’ does not include restitu14 tion, reimbursement, or compensatory damages.

15 ‘‘(l) COVERED CONTRACT DEFINED.—(1) In this sec16 tion, the term ‘covered contract’ means a contract for an

17 amount in excess of $500,000 that is entered into by an

18 executive agency, except that such term does not include a

19 fixed-price contract without cost incentives or any contract

20 for the purchase of commercial items.

21 ‘‘(2) The dollar amount in paragraph (1) shall be ad22 justed on October 1 of each year divisible by 5 to the equiva23 lent amount in constant fiscal year 1993 dollars (rounded

24 to the nearest $10,000).’’.
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1 SEC. 2152. REVISION OF COST PRINCIPLE RELATING TO EN2 TERTAINMENT, GIFT, AND RECREATION

3 COSTS FOR CONTRACTOR EMPLOYEES.

4 (a) COSTS NOT ALLOWABLE.—The costs of entertain5 ment, gifts, or recreation for employees of a contractor or

6 members of their families that are provided by the contrac7 tor to improve employee morale or performance or for any

8 other purpose are not allowable under a covered contract

9 unless, within 120 days of the date of the enactment of this

10 Act, the Federal Acquisition Regulatory Council prescribes

11 amendments to the Federal Acquisition Regulation specify12 ing circumstances under which such costs are allowable

13 under a covered contract. At a minimum, such amendments

14 shall ensure that costs specifically not allowable under the

15 entertainment cost principle (FAR 31.205–14) are not al16 lowable under any other cost principle.

17 (b) DEFINITIONS.—In this section:

18 (1) The term ‘‘employee’’ includes officers and

19 directors of a contractor.

20 (2) The term ‘‘covered contract’’ has the meaning

21 given such term in section 2324(l) of title 10, United

22 States Code (as amended by section 2101(b)), or sec23 tion 306(l) of the Federal Property and Administra24 tive Services Act of 1949 (as added by section 2151).

25 (c) EFFECTIVE DATE.—The provisions of subsection

26 (a), including any amendments to the Federal Acquisition
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1 Regulation prescribed under that subsection, shall take ef2 fect in accordance with section 9001.

3 PART III—ACQUISITIONS GENERALLY

4 SEC. 2161. TRAVEL EXPENSES OF GOVERNMENT CONTRAC5 TORS.

6 Section 24(a) of the Office of Federal Procurement Pol7 icy Act (41 U.S.C. 420) is amended by inserting after

8 ‘‘Under any contract’’ the following: ‘‘requiring submission

9 of cost or pricing data or the negotiation of final indirect

10 costs’’.

11 Subtitle C—Audit and Access to

12 Records

13 PART I—ARMED SERVICES ACQUISITIONS

14 SEC. 2201. CONSOLIDATION AND REVISION OF AUTHORITY

15 TO EXAMINE RECORDS OF CONTRACTORS.

16 (a) AUTHORITY.—

17 (1) IN GENERAL.—Section 2313 of title 10, Unit18 ed States Code, is amended to read as follows:

19 ‘‘§ 2313. Examination of records of contractor

20 ‘‘(a) AGENCY AUTHORITY.—(1) The head of an agency,

21 acting through an authorized representative, is authorized

22 to inspect the plant and audit the records of—

23 ‘‘(A) a contractor performing a cost-reimburse24 ment, incentive, time-and-materials, labor-hour, or

25 price-redeterminable contract, or any combination of
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1 such contracts, made by that agency under this chap2 ter; and

3 ‘‘(B) a subcontractor performing any cost-reim4 bursement, incentive, time-and-materials, labor-hour,

5 or price-redeterminable subcontract or any combina6 tion of such subcontracts under a contract referred to

7 in subparagraph (A).

8 ‘‘(2) The head of an agency, acting through an author9 ized representative, is authorized, for the purpose of evaluat10 ing the accuracy, completeness, and currency of cost or pric11 ing data required to be submitted pursuant to section 2306a

12 of this title with respect to a contract or subcontract, to

13 examine all records of the contractor or subcontractor relat14 ed to—

15 ‘‘(A) the proposal for the contract or subcontract;

16 ‘‘(B) the discussions conducted on the proposal;

17 ‘‘(C) pricing of the contract or subcontract; or

18 ‘‘(D) performance of the contract or subcontract.

19 ‘‘(b) DCAA SUBPOENA AUTHORITY.—(1) The Director

20 of the Defense Contract Audit Agency (or any successor

21 agency) may require by subpoena the production of any

22 records of a contractor that the Secretary of Defense is au23 thorized to audit or examine under subsection (a).
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1 ‘‘(2) Any such subpoena, in the case of contumacy or

2 refusal to obey, shall be enforceable by order of an appro3 priate United States district court.

4 ‘‘(3) The authority provided by paragraph (1) may not

5 be redelegated.

6 ‘‘(4) The Director (or any successor official) shall sub7 mit an annual report to the Secretary of Defense on the

8 exercise of such authority during the preceding year and

9 the reasons why such authority was exercised in any in10 stance. The Secretary shall forward a copy of each such re11 port to the Committees on Armed Services of the Senate

12 and House of Representatives.

13 ‘‘(c) COMPTROLLER GENERAL AUTHORITY.—(1) Ex14 cept as provided in paragraph (2), each contract awarded

15 after using procedures other than sealed bid procedures shall

16 provide that the Comptroller General and his representa17 tives are authorized to examine any records of the contrac18 tor, or any of its subcontractors, that directly pertain to,

19 and involve transactions relating to, the contract or sub20 contract.

21 ‘‘(2) Paragraph (1) does not apply to a contract or

22 subcontract with a foreign contractor or foreign subcontrac23 tor if the head of the agency concerned determines, with the

24 concurrence of the Comptroller General or his designee, that

25 the application of that paragraph to the contract or sub-
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1 contract would not be in the public interest. However, the

2 concurrence of the Comptroller General or his designee is

3 not required—

4 ‘‘(A) where the contractor or subcontractor is a

5 foreign government or agency thereof or is precluded

6 by the laws of the country involved from making its

7 records available for examination; and

8 ‘‘(B) where the head of the agency determines,

9 after taking into account the price and availability of

10 the property and services from United States sources,

11 that the public interest would be best served by not

12 applying paragraph (1).

13 ‘‘(3) Paragraph (1) may not be construed to require

14 a contractor or subcontractor to create or maintain any

15 record that the contractor or subcontractor does not main16 tain in the ordinary course of business or pursuant to an17 other provision of law.

18 ‘‘(d) LIMITATION ON PREAWARD AUDITS RELATING TO

19 INDIRECT COSTS.—The head of an agency may not perform

20 a preaward audit to evaluate proposed indirect costs under

21 any contract, subcontract, or modification to be entered into

22 in accordance with this chapter in any case in which the

23 contracting officer determines that the objectives of the audit

24 can reasonably be met by accepting the results of an audit

25 conducted by any other department or agency of the Federal
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1 Government within one year preceding the date of the con2 tracting officer’s determination.

3 ‘‘(e) LIMITATION.—The authority of the head of an

4 agency under subsection (a), and the authority of the Comp5 troller General under subsection (c), with respect to a con6 tract or subcontract shall expire three years after final pay7 ment under such contract or subcontract.

8 ‘‘(f) INAPPLICABILITY TO CERTAIN CONTRACTS.—This

9 section does not apply to the following contracts:

10 ‘‘(1) Contracts for utility services at rates not ex11 ceeding those established to apply uniformly to the

12 public, plus any applicable reasonable connection

13 charge.

14 ‘‘(g) FORMS OF ORIGINAL RECORD STORAGE.—Noth15 ing in this section shall be construed to preclude a contrac16 tor from duplicating or storing original records in elec17 tronic form.

18 ‘‘(h) USE OF IMAGES OF ORIGINAL RECORDS.—The

19 head of an agency shall not require a contractor or sub20 contractor to provide original records in an audit carried

21 out pursuant to this section if the contractor or sub22 contractor provides photographic or electronic images of the

23 original records and meets the following requirements:

24 ‘‘(1) The contractor or subcontractor has estab25 lished procedures to ensure that the imaging process
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1 preserves the integrity, reliability, and security of the

2 original records.

3 ‘‘(2) The contractor or subcontractor maintains

4 an effective indexing system to permit timely and

5 convenient access to the imaged records.

6 ‘‘(3) The contractor or subcontractor retains the

7 original records for a minimum of one year after im8 aging to permit periodic validation of the imaging

9 systems.

10 ‘‘(i) RECORDS DEFINED.—In this section, the term

11 ‘records’ includes books, documents, accounting procedures

12 and practices, and other data, regardless of type and re13 gardless of whether such items are in written form, in the

14 form of computer data, or in any other form.’’.

15 (2) CLERICAL AMENDMENT.—The item relating

16 to such section in the table of sections at the begin17 ning of chapter 137 of title 10, United States Code,

18 is amended to read as follows:

‘‘2313. Examination of records of contractor.’’.

19 (b) REPEAL OF SUPERSEDED PROVISION.—

20 (1) REPEAL.—Section 2406 of title 10, United

21 States Code, is repealed.

22 (2) CLERICAL AMENDMENT.—The table of sec23 tions at the beginning of chapter 141 of such title is

24 amended by striking out the item relating to section

25 2406.
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1 PART II—CIVILIAN AGENCY ACQUISITIONS

2 SEC. 2251. AUTHORITY TO EXAMINE RECORDS OF CONTRAC3 TORS.

4 (a) AUTHORITY.—Title III of the Federal Property

5 and Administrative Services Act of 1949 (41 U.S.C. 251

6 et seq.), as amended by section 1251(2), is further amended

7 by inserting after section 304B the following new section:

8 ‘‘SEC. 304C. EXAMINATION OF RECORDS OF CONTRACTOR.

9 ‘‘(a) AGENCY AUTHORITY.—(1) The head of an execu10 tive agency, acting through an authorized representative,

11 is authorized to inspect the plant and audit the records of—

12 ‘‘(A) a contractor performing a cost-reimburse13 ment, incentive, time-and-materials, labor-hour, or

14 price-redeterminable contract, or any combination of

15 such contracts, made by that executive agency under

16 this title; and

17 ‘‘(B) a subcontractor performing any cost-reim18 bursement, incentive, time-and-materials, labor-hour,

19 or price-redeterminable subcontract or any combina20 tion of such subcontracts under a contract referred to

21 in subparagraph (A).

22 ‘‘(2) The head of an executive agency, acting through

23 an authorized representative, is authorized, for the purpose

24 of evaluating the accuracy, completeness, and currency of

25 cost or pricing data required to be submitted pursuant to

26 section 304B with respect to a contract or subcontract, to
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1 examine all records of the contractor or subcontractor relat2 ed to—

3 ‘‘(A) the proposal for the contract or subcontract;

4 ‘‘(B) the discussions conducted on the proposal;

5 ‘‘(C) pricing of the contract or subcontract; or

6 ‘‘(D) performance of the contract or subcontract.

7 ‘‘(b) COMPTROLLER GENERAL AUTHORITY.—(1) Ex8 cept as provided in paragraph (2), each contract awarded

9 after using procedures other than sealed bid procedures shall

10 provide that the Comptroller General and his representa11 tives are authorized to examine any records of the contrac12 tor, or any of its subcontractors, that directly pertain to,

13 and involve transactions relating to, the contract or sub14 contract.

15 ‘‘(2) Paragraph (1) does not apply to a contract or

16 subcontract with a foreign contractor or foreign subcontrac17 tor if the executive agency concerned determines, with the

18 concurrence of the Comptroller General or his designee, that

19 the application of that paragraph to the contract or sub20 contract would not be in the public interest. However, the

21 concurrence of the Comptroller General or his designee is

22 not required—

23 ‘‘(A) where the contractor or subcontractor is a

24 foreign government or agency thereof or is precluded
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1 by the laws of the country involved from making its

2 records available for examination; and

3 ‘‘(B) where the executive agency determines, after

4 taking into account the price and availability of the

5 property and services from United States sources, that

6 the public interest would be best served by not apply7 ing paragraph (1).

8 ‘‘(3) Paragraph (1) may not be construed to require

9 a contractor or subcontractor to create or maintain any

10 record that the contractor or subcontractor does not main11 tain in the ordinary course of business or pursuant to an12 other provision of law.

13 ‘‘(c) LIMITATION ON PREAWARD AUDITS RELATING TO

14 INDIRECT COSTS.—An executive agency may not perform

15 a preaward audit to evaluate proposed indirect costs under

16 any contract, subcontract, or modification to be entered into

17 in accordance with this title in any case in which the con18 tracting officer determines that the objectives of the audit

19 can reasonably be met by accepting the results of an audit

20 conducted by any other department or agency of the Federal

21 Government within one year preceding the date of the con22 tracting officer’s determination.

23 ‘‘(d) LIMITATION.—The authority of an executive agen24 cy under subsection (a), and the authority of the Comptrol25 ler General under subsection (b), with respect to a contract
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1 or subcontract shall expire three years after final payment

2 under such contract or subcontract.

3 ‘‘(e) INAPPLICABILITY TO CERTAIN CONTRACTS.—This

4 section does not apply to the following contracts:

5 ‘‘(1) Contracts for utility services at rates not ex6 ceeding those established to apply uniformly to the

7 public, plus any applicable reasonable connection

8 charge.

9 ‘‘(f) FORM OF ORIGINAL RECORD STORAGE.—Nothing

10 in this section shall be construed to preclude a contractor

11 from duplicating or storing original records in electronic

12 form.

13 ‘‘(g) USE OF IMAGES OF ORIGINAL RECORDS.—An ex14 ecutive agency shall not require a contractor or subcontrac15 tor to provide original records in an audit carried out pur16 suant to this section if the contractor or subcontractor pro17 vides photographic or electronic images of the original

18 records and meets the following requirements:

19 ‘‘(1) The contractor or subcontractor has estab20 lished procedures to ensure that the imaging process

21 preserves the integrity, reliability, and security of the

22 original records.

23 ‘‘(2) The contractor or subcontractor maintains

24 an effective indexing system to permit timely and

25 convenient access to the imaged records.
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1 ‘‘(3) The contractor or subcontractor retains the

2 original records for a minimum of one year after im3 aging to permit periodic validation of the imaging

4 systems.

5 ‘‘(h) RECORDS DEFINED.—In this section, the term

6 ‘records’ includes books, documents, accounting procedures

7 and practices, and other data, regardless of type and re8 gardless of whether such items are in written form, in the

9 form of computer data, or in any other form.’’.

10 (b) REPEAL OF SUPERSEDED PROVISION.—Section

11 304 of the Federal Property and Administrative Services

12 Act of 1949 (41 U.S.C. 254) is amended by striking out

13 subsection (c).

14 Subtitle D—Cost Accounting

15 Standards

16 SEC. 2301. REPEAL OF OBSOLETE DEADLINE REGARDING

17 PROCEDURAL REGULATIONS FOR THE COST

18 ACCOUNTING STANDARDS BOARD.

19 Section 26(f)(3) of the Office of Federal Procurement

20 Policy Act (41 U.S.C. 422(f)(3)) is amended in the first

21 sentence by striking out ‘‘Not later than 180 days after the

22 date of enactment of this section, the Administrator’’ and

23 inserting in lieu thereof ‘‘The Administrator’’.
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1 Subtitle E—Administration of Con2 tract Provisions Relating to

3 Price, Delivery, and Product

4 Quality

5 SEC. 2401. CLARIFICATION OF PROVISION RELATING TO

6 QUALITY CONTROL OF CERTAIN SPARE

7 PARTS.

8 The second sentence of subsection (a) of section 2383

9 of title 10, United States Code, is amended to read as fol10 lows: ‘‘In establishing the appropriate qualification require11 ments, the Secretary of Defense shall use the Department

12 of Defense qualification requirements that were used to

13 qualify the original production part unless the Secretary

14 determines in writing—

15 ‘‘(1) that there are other requirements suffi16 ciently similar to those requirements that should be

17 used instead; or

18 ‘‘(2) that any or all such requirements are un19 necessary.’’.

20 SEC. 2402. CONTRACTOR GUARANTEES REGARDING WEAP21 ON SYSTEMS.

22 (a) REPEAL OF REQUIREMENT FOR REPORT ON WAIV23 ERS.—Subsection (e) of section 2403 of title 10, United

24 States Code, is amended—

25 (1) by striking out ‘‘(1)’’; and
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1 (2) by striking out paragraph (2).

2 (b) PROVISIONS TO BE ADDRESSED BY REGULA3 TIONS.—Subsection (h) of such section is amended—

4 (1) by redesignating paragraph (2) as para5 graph (3); and

6 (2) by inserting after paragraph (1) the follow7 ing new paragraph (2):

8 ‘‘(2) The regulations shall include the following:

9 ‘‘(A) Guidelines for negotiating contractor guar10 antees that are reasonable and cost effective, as deter11 mined on the basis of the likelihood of defects and the

12 estimated cost of correcting such defects.

13 ‘‘(B) Procedures for administering contractor

14 guarantees.

15 ‘‘(C) Guidelines for determining the cases in

16 which it may be appropriate to waive the require17 ments of this section.’’.

18 Subtitle F—Claims and Disputes

19 SEC. 2501. CERTIFICATION OF CONTRACT CLAIMS.

20 (a) DOD CERTIFICATION REQUIREMENT IN CONFLICT

21 WITH GOVERNMENT-WIDE REQUIREMENT.—

22 (1) REPEAL.—Section 2410 of title 10, United

23 States Code, is repealed.

24 (2) CLERICAL AMENDMENT.—The table of sec25 tions at the beginning of chapter 141 of such title is
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1 amended by striking out the item relating to section

2 2410.

3 (b) REPEAL OF SUPERSEDED PROVISION.—Section

4 813(b) of the National Defense Authorization Act for Fiscal

5 Year 1993 (Public Law 102–484; 106 Stat. 2453), is re6 pealed.

7 (c) RESTRICTION ON LEGISLATIVE PAYMENT OF

8 CLAIMS.—Section 2410e of title 10, United States Code, is

9 amended by adding at the end the following new subsection:

10 ‘‘(d) RESTRICTION ON LEGISLATIVE PAYMENT OF

11 CLAIMS.—In the case of a contract of an agency named in

12 section 2303(a) of this title, no provision of a law enacted

13 after the date of the enactment of the Federal Acquisition

14 Improvement Act of 1994 that directs the payment of a par15 ticular claim under such contract, a particular request for

16 equitable adjustment to any term of such contract, or a par17 ticular request for relief under Public Law 85–804 (50

18 U.S.C. 1431 et seq.) regarding such contract may be imple19 mented unless such provision of law—

20 ‘‘(1) specifically refers to this subsection; and

21 ‘‘(2) specifically states that this subsection does

22 not apply with respect to the payment directed by

23 that provision of law.’’.
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1 SEC. 2502. SHIPBUILDING CLAIMS.

2 (a) INCREASE IN TIME PERIOD DURING WHICH AD3 JUSTMENTS TO SHIPBUILDING CLAIMS MAY BE MADE.—

4 Section 2405 of title 10, United States Code, is amended—

5 (1) in subsection (a)—

6 (A) by striking out ‘‘entered into after De7 cember 7, 1983,’’; and

8 (B) by striking out ‘‘occurring more than

9 18 months before the submission of the claim, re10 quest, or demand.’’ and inserting in lieu thereof

11 the following: ‘‘occurring—

12 ‘‘(1) in the case of a contract entered into after

13 December 7, 1983, and before the date of the enact14 ment of the Federal Acquisition Improvement Act of

15 1994, more than 18 months before the submission of

16 the claim, request, or demand; and

17 ‘‘(2) in the case of a contract entered into on or

18 after the date of the enactment of the Federal Acquisi19 tion Improvement Act of 1994, more than 6 years be20 fore the submission of the claim, request, or demand.’’.

21 (b) RESUBMISSION WITH CORRECTED CERTIFI22 CATION.—Subsection (c) of such section is repealed.
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1 TITLE III—MAJOR SYSTEMS AND

2 SERVICE SPECIFIC STATUTES

3 Subtitle A—Major Systems Statutes

4 SEC. 3001. WEAPON DEVELOPMENT AND PROCUREMENT

5 SCHEDULES.

6 (a) DEADLINE AND PURPOSE.—Subsection (a) of sec7 tion 2431 of title 10, United States Code, is amended—

8 (1) in the first sentence—

9 (A) by striking out ‘‘at the same time’’ and

10 inserting in lieu thereof ‘‘not later than 45 days

11 after’’; and

12 (B) by striking out ‘‘a written report’’ and

13 inserting in lieu thereof ‘‘budget justification

14 documents’’; and

15 (2) in the second and third sentences, by striking

16 out ‘‘report’’ and inserting in lieu thereof ‘‘docu17 ments’’.

18 (b) ADDITIONAL MATTERS TO BE INCLUDED.—Sub19 section (b) of such section is amended—

20 (1) by striking out ‘‘include—’’ and inserting in

21 lieu thereof ‘‘include each of the following:’’;

22 (2) by capitalizing the first letter of the first

23 word in each of paragraphs (1), (2), and (3);
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1 (3) by striking out the semicolon at the end of

2 paragraphs (1) and (2) and inserting in lieu thereof

3 a period;

4 (4) by striking out ‘‘; and’’ at the end of para5 graph (3) and inserting in lieu thereof a period; and

6 (5) by amending paragraph (4) to read as fol7 lows:

8 ‘‘(4)(A) The most efficient production rate, the

9 most efficient acquisition rate, and the minimum sus10 taining rate, consistent with the program priority es11 tablished for such weapon system by the Secretary

12 concerned.

13 ‘‘(B) In this paragraph:

14 ‘‘(i) The term ‘most efficient production

15 rate’ means the maximum rate for each budget

16 year at which the weapon system can be pro17 duced with existing or planned plant capacity

18 and tooling, with one shift a day running for

19 eight hours a day and five days a week.

20 ‘‘(ii) The term ‘minimum sustaining rate’

21 means the production rate for each budget year

22 that is necessary to keep production lines open

23 while maintaining a base of responsive vendors

24 and suppliers.’’.
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1 SEC. 3002. SELECTED ACQUISITION REPORT REQUIREMENT.

2 (a) DEFINITION OF PROCUREMENT UNIT COST.—

3 (1) DEFINITION.—Paragraph (2) of section

4 2432(a) of title 10, United States Code, is amended—

5 (A) in clause (A), by striking out ‘‘for a fis6 cal year’’ and all that follows through ‘‘such pro7 gram in such fiscal year’’;

8 (B) in clause (B), by striking out ‘‘with

9 such funds during such fiscal year.’’ and insert10 ing in lieu thereof a period; and

11 (C) by striking out the last sentence.

12 (2) CONFORMING AMENDMENTS.—Section 2433

13 of such title is amended—

14 (A) in subparagraph (B) of subsection

15 (c)(1), by striking out ‘‘current’’ before ‘‘procure16 ment unit cost’’;

17 (B) in subsection (d), by striking out ‘‘cur18 rent’’ before ‘‘procurement unit cost’’ each place

19 it appears; and

20 (C) in subsection (e), by striking out ‘‘cur21 rent’’ before ‘‘procurement unit cost’’ both places

22 it appears.

23 (b) EXCLUSION OF FIRM, FIXED-PRICE CONTRACTS.—

24 Subsection (a) of section 2432 of such title is amended in

25 paragraph (3) by inserting before the period at the end the

26 following: ‘‘and that is not a firm, fixed price contract’’.
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1 (c) DEFINITION OF FULL LIFE-CYCLE COST.—Such

2 subsection is further amended in paragraph (4) by striking

3 out ‘‘has the meaning’’ and all that follows through the end

4 of the paragraph and inserting in lieu thereof the following:

5 ‘‘means all costs of development, procurement, military con6 struction, and operations and support, without regard to

7 funding source or management control.’’.

8 (d) NOTICE OF PROPOSED CHANGES IN SAR.—Sub9 section (c) of such section is amended in paragraph (2) by

10 striking out the second sentence and inserting in lieu thereof

11 the following: ‘‘Whenever the Secretary of Defense proposes

12 to make changes in the content of a Selected Acquisition

13 Report, the Secretary shall submit a notice of the proposed

14 changes to such committees. The changes shall be considered

15 approved by the Secretary, and may be incorporated into

16 the report, only after the end of the 60-day period beginning

17 on the date on which the notice is received by those commit18 tees.’’.

19 (e) ELIMINATION OF CERTAIN SAR REQUIREMENTS.—

20 Such subsection is further amended in paragraph (3) by

21 striking out subparagraph (C).

22 (f) UNIFORM IMPLEMENTATION OF LIFE-CYCLE COST

23 ANALYSIS.—Such subsection is further amended—

24 (1) by striking out paragraph (5); and
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1 (2) by adding at the end of subparagraph (A) of

2 paragraph (3) the following: ‘‘The Secretary of De3 fense shall ensure that this subparagraph is imple4 mented in a uniform manner, to the extent prac5 ticable, throughout the Department of Defense.’’.

6 (g) DEADLINE REVISION.—Subsection (f) of such sec7 tion is amended by striking out ‘‘60 days’’ in the first sen8 tence and inserting in lieu thereof ‘‘45 days’’.

9 (h) ELIMINATION OF PRELIMINARY REPORT.—Such

10 subsection is further amended by striking out the second

11 sentence.

12 (i) TERMINOLOGY CORRECTIONS.—Such section is fur13 ther amended as follows:

14 (1) Subsection (b)(3)(A) is amended by striking

15 out ‘‘full scale development or’’ in clause (i).

16 (2) Subsection (c)(3) is amended by striking out

17 ‘‘full-scale engineering’’ in subparagraph (A) and in18 serting in lieu thereof ‘‘engineering and manufactur19 ing’’.

20 (3) Subsection (h)(1) is amended by striking out

21 ‘‘full-scale engineering’’ both places it appears and in22 serting in lieu thereof ‘‘engineering and manufactur23 ing’’.

24 SEC. 3003. UNIT COST REPORT REQUIREMENT.

25 (a) REVISION OF BASELINE REPORT DEFINITIONS.—
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1 (1) REVISION.—Section 2433(a) of title 10,

2 United States Code, is amended—

3 (A) in paragraph (2)—

4 (i) by striking out ‘‘Baseline Selected

5 Acquisition Report’’ and inserting in lieu

6 thereof ‘‘Baseline Estimate’’; and

7 (ii) by striking out ‘‘Selected Acquisi8 tion Report in which’’ and all that follows

9 through the end of the paragraph and in10 serting in lieu thereof ‘‘cost estimate in11 cluded in the baseline description for the

12 program under section 2435 of this title.’’;

13 and

14 (B) by striking out paragraph (4).

15 (2) CONFORMING AMENDMENTS.—Section 2433

16 of such title is further amended—

17 (A) in subsection (c)(1), by striking out

18 ‘‘Baseline Report’’ in subparagraphs (A) and

19 (B) and inserting in lieu thereof ‘‘Baseline Esti20 mate’’; and

21 (B) in subsection (d), by striking out ‘‘Base22 line Report’’ in paragraphs (1) and (2) and in23 serting in lieu thereof ‘‘Baseline Estimate’’.

24 (b) CONTENTS OF UNIT COST REPORT.—Section

25 2433(b) of such title is amended in paragraph (3) by strik-
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1 ing out ‘‘Baseline Report was submitted.’’ and inserting in

2 lieu thereof ‘‘contract was entered into.’’.

3 (c) ELIMINATION OF CERTAIN UNIT COST REPORT RE4 QUIREMENT.—Section 2433(c) of such title, as amended by

5 subsection (a), is further amended—

6 (1) by striking out paragraph (2);

7 (2) by striking out ‘‘(1)’’ after ‘‘(c)’’; and

8 (3) by redesignating subparagraphs (A), (B),

9 and (C) as paragraphs (1), (2), and (3), respectively.

10 (d) CONSTANT BASE YEAR DOLLARS.—Section 2433(f)

11 of such title is amended by striking out ‘‘include expected

12 inflation’’ and inserting in lieu thereof ‘‘be stated in terms

13 of constant base year dollars (as described in section 2430

14 of this title)’’.

15 (e) CONTENTS OF SAR.—Subparagraph (I) of section

16 2433(g)(1) of such title is amended to read as follows:

17 ‘‘(I) The type of the Baseline Estimate that was

18 included in the baseline description under section

19 2435 of this title and the date of the Baseline Esti20 mate.’’.
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1 SEC. 3004. REQUIREMENT FOR INDEPENDENT COST ESTI2 MATE AND MANPOWER ESTIMATE BEFORE

3 DEVELOPMENT OR PRODUCTION.

4 (a) CONTENT AND SUBMISSION OF ESTIMATES.—Sub5 section (b) of section 2434 of title 10, United States Code,

6 is amended to read as follows:

7 ‘‘(b) REGULATIONS.—The Secretary of Defense shall

8 prescribe regulations governing the content and submission

9 of the estimates required by subsection (a). The regulations

10 shall require—

11 ‘‘(1) that the independent estimate of the full

12 life-cycle cost of a program—

13 ‘‘(A) be prepared by an office or other en14 tity that is not directly responsible for carrying

15 out the development or acquisition of the pro16 gram; and

17 ‘‘(B) include all costs of development, pro18 curement, military construction, and operations

19 and support, without regard to funding source or

20 management control; and

21 ‘‘(2) that the manpower estimate include the

22 total personnel required—

23 ‘‘(A) to operate, maintain, and support the

24 program upon full operational deployment; and

25 ‘‘(B) to train personnel to carry out the ac26 tivities referred to in subparagraph (A).’’.
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1 (b) TERMINOLOGY CORRECTION, ETC.—Subsection (a)

2 of such section is amended—

3 (1) by striking out ‘‘full-scale engineering devel4 opment’’ and inserting in lieu thereof ‘‘engineering

5 and manufacturing development’’; and

6 (2) by striking out ‘‘cost of the program, together

7 with a manpower estimate, has’’ and inserting in lieu

8 thereof ‘‘full life-cycle cost of the program and a man9 power estimate have’’.

10 SEC. 3005. BASELINE DESCRIPTION.

11 (a) IN GENERAL.—Section 2435 of title 10, United

12 States Code, is amended to read as follows:

13 ‘‘§ 2435. Baseline description

14 ‘‘(a) BASELINE DESCRIPTION REQUIREMENT.—(1)

15 The Secretary of a military department shall establish a

16 baseline description for each major defense acquisition pro17 gram under the jurisdiction of such Secretary.

18 ‘‘(2) The baseline shall include sufficient parameters

19 to describe the cost estimate (referred to as the ‘Baseline

20 Estimate’ in section 2433 of this title), schedule, and per21 formance of such major defense acquisition program.

22 ‘‘(3) No amount appropriated or otherwise made

23 available to the Department of Defense for carrying out a

24 major defense acquisition program may be obligated with25 out an approved baseline description unless such obligation
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1 is specifically approved by the Under Secretary of Defense

2 for Acquisition and Technology.

3 ‘‘(4) A baseline description for a major defense acquisi4 tion program shall be established—

5 ‘‘(A) before the program enters engineering and

6 manufacturing development; or

7 ‘‘(B) before the program enters production and

8 deployment.

9 ‘‘(b) REGULATIONS.—The Secretary of Defense shall

10 prescribe regulations governing—

11 ‘‘(1) the content of baseline descriptions;

12 ‘‘(2) the submission of reports on deviations of a

13 program from the baseline description by the program

14 manager to the Secretary of the military department

15 concerned and the Under Secretary of Defense for Ac16 quisition and Technology;

17 ‘‘(3) procedures for review of such deviation re18 ports within the Department of Defense; and

19 ‘‘(4) procedures for submission to, and approval

20 by, the Secretary of Defense of revised baseline de21 scriptions.’’.

22 (b) CLERICAL AMENDMENT.—The table of sections at

23 the beginning of chapter 144 of such title is amended by

24 amending the item relating to section 2435 to read as fol25 lows:

‘‘2435. Baseline description.’’.
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1 SEC. 3006. REPEAL OF REQUIREMENT FOR COMPETITIVE

2 PROTOTYPING FOR MAJOR PROGRAMS.

3 (a) REPEAL.—Section 2438 of title 10, United States

4 Code, is repealed.

5 (b) CLERICAL AMENDMENT.—The table of sections at

6 the beginning of chapter 144 of such title is amended by

7 striking out the item relating to section 2438.

8 SEC. 3007. REPEAL OF REQUIREMENT FOR COMPETITIVE

9 ALTERNATIVE SOURCES FOR MAJOR PRO10 GRAMS.

11 (a) REPEAL.—Section 2439 of title 10, United States

12 Code, is repealed.

13 (b) CLERICAL AMENDMENT.—The table of sections at

14 the beginning of chapter 144 of such title is amended by

15 striking out the item relating to section 2439.

16 Subtitle B—Testing Statutes

17 SEC. 3011. AUTHORIZATION OF LESS THAN FULL-UP TEST18 ING.

19 Section 2366(c) of title 10, United States Code, is

20 amended—

21 (1) by redesignating paragraph (2) as para22 graph (4);

23 (2) by designating the second sentence of para24 graph (1) as paragraph (3) and in that paragraph by

25 striking out ‘‘such certification’’ and inserting in lieu
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1 thereof ‘‘certification under paragraph (1) or (2)’’;

2 and

3 (3) by inserting before paragraph (3) (as so des4 ignated) the following new paragraph:

5 ‘‘(2) In the case of a covered system (or covered product

6 improvement program for a covered system), the Secretary

7 may waive the application of the survivability and lethality

8 tests of this section to such system or program and instead

9 allow testing of the system or program in combat by firing

10 munitions likely to be encountered in combat at compo11 nents, subsystems, and subassemblies, together with per12 forming design analyses, modeling and simulation, and

13 analysis of combat data, if the Secretary certifies to Con14 gress that the survivability and lethality testing of such sys15 tem or program otherwise required by this section would

16 be unreasonably expensive and impracticable.’’.

17 SEC. 3012. LIMITATION ON QUANTITIES TO BE PROCURED

18 FOR LOW-RATE INITIAL PRODUCTION.

19 Section 2400(a) of title 10, United States Code, is

20 amended—

21 (1) in paragraph (2)—

22 (A) by striking out ‘‘paragraph (1)’’ and

23 inserting in lieu thereof ‘‘this section’’; and
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1 (B) by striking out ‘‘full-scale engineering

2 development’’ and inserting in lieu thereof ‘‘engi3 neering and manufacturing development’’;

4 (2) by redesignating paragraph (4) as para5 graph (5) and in that paragraph by inserting after

6 the first sentence the following: ‘‘If the quantity ex7 ceeds 10 percent of the total number of articles to be

8 produced, as determined at the milestone II decision

9 with respect to that system, the Secretary shall in10 clude in the statement the reasons for such quantity.’’;

11 and

12 (3) by inserting after paragraph (3) the follow13 ing new paragraph (4):

14 ‘‘(4) The quantity of articles of a major system that

15 may be procured for low-rate initial production may not

16 be less than one operationally configured production unit

17 unless another quantity is established at the milestone II

18 decision.’’.

19 SEC. 3013. OPERATIONAL TEST AND EVALUATION OF DE20 FENSE ACQUISITION PROGRAMS.

21 (a) AUTHORITY TO USE DIFFERENT PROCEDURES.—

22 Section 2399(b) of title 10, United States Code, is amend23 ed—

24 (1) by redesignating paragraph (5) as para25 graph (6); and
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1 (2) by inserting after paragraph (4) the follow2 ing new paragraph (5):

3 ‘‘(5) The Secretary of Defense may, for a particular

4 major defense acquisition program, prescribe and apply

5 operational test and evaluation procedures other than those

6 provided under subsection (a) and paragraphs (1) through

7 (3) of this subsection if the Secretary transmits to Congress,

8 before the Milestone II decision is made with respect to that

9 program—

10 ‘‘(A) a certification that such testing would be

11 unreasonably expensive and impracticable; and

12 ‘‘(B) a description of the actions taken to ensure

13 that the system will be operationally effective and

14 suitable when the system meets initial operational ca15 pability requirements.’’.

16 (b) CROSS REFERENCE CORRECTIONS.—Section 2399

17 of such title is further amended—

18 (1) in subsection (b)(6) (as redesignated by sub19 section (a)(1)) and subsection (c)(1), by striking out

20 ‘‘section 138(a)(2)(B)’’ and inserting in lieu thereof

21 ‘‘section 139(a)(2)(B)’’; and

22 (2) in subsection (h)(1), by striking out ‘‘section

23 138(a)(2)(A)’’ and inserting in lieu thereof ‘‘section

24 139(a)(2)(A)’’.
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1 Subtitle C—Civil Reserve Air Fleet

2 SEC. 3021. DEFINITION OF CONTRACTOR.

3 Section 9511(8) of title 10, United States Code, is

4 amended—

5 (1) by striking out ‘‘or’’ at the end of clause (A);

6 and

7 (2) by inserting before the period at the end the

8 following: ‘‘, or (C) who owns or controls, or will own

9 or control, new or existing aircraft and who, by con10 tract, commits some or all of such aircraft to the Civil

11 Reserve Air Fleet’’.

12 SEC. 3022. CONSOLIDATION OF PROVISIONS RELATING TO

13 CONTRACTUAL COMMITMENT OF AIRCRAFT.

14 Chapter 931 of title 10, United States Code, is amend15 ed—

16 (1) in subsection (a) of section 9512, by inserting

17 ‘‘AUTHORITY TO CONTRACT.—’’ after ‘‘(a)’’;

18 (2) in subsection (c) of section 9512, by striking

19 out ‘‘(c)’’ and inserting in lieu thereof ‘‘(d) AUTHOR20 ITY TO CONTRACT AND PAY DIRECTLY.—’’;

21 (3) in subsection (b) of section 9512, by striking

22 out ‘‘(b)’’ and inserting in lieu thereof ‘‘(c) TERMS

23 AND REQUIRED REPAYMENT.—’’;

24 (4) by redesignating subsection (a) of section

25 9513 as subsection (b) and transferring such sub-
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1 section (as so redesignated) to section 9512 and in2 serting such subsection after subsection (a);

3 (5) by redesignating subsection (b) of section

4 9513 as subsection (e) and transferring such sub5 section (as so redesignated) to the end of section 9512;

6 (6) in subsection (b) of section 9512, as redesig7 nated and transferred to such section by paragraph

8 (4)—

9 (A) by striking out ‘‘under section 9512 of

10 this title’’ and inserting in lieu thereof ‘‘entered

11 into under this section’’, and

12 (B) by inserting ‘‘CONTRACT REQUIRE13 MENTS.—’’ after ‘‘(b)’’;

14 (7) in subsection (c) of section 9512, as redesig15 nated by paragraph (3), by striking out ‘‘the terms

16 required by section 9513 of this title and’’;

17 (8) in subsection (e) of section 9512, as redesig18 nated and transferred to such section by paragraph

19 (5)—

20 (A) by striking out ‘‘under section 9512 of

21 this title’’ and inserting in lieu thereof ‘‘entered

22 into under this section’’, and

23 (B) by inserting ‘‘COMMITMENT TO CIVIL

24 RESERVE AIR FLEET.—’’ after ‘‘(e)’’; and

25 (9) by striking out the heading of section 9513.
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1 SEC. 3023. USE OF MILITARY INSTALLATIONS BY CONTRAC2 TORS.

3 (a) AUTHORITY.—Chapter 931 of title 10, United

4 States Code, as amended by section 3022, is further amend5 ed by adding at the end the following new section 9513:

6 ‘‘§ 9513. Use of military installations by Civil Reserve

7 Air Fleet contractors

8 ‘‘(a) CONTRACT AUTHORITY.—(1) The Secretary of the

9 Air Force—

10 ‘‘(A) may, by contract entered into with any

11 contractor, authorize such contractor to use one or

12 more Air Force installations designated by the Sec13 retary; and

14 ‘‘(B) with the consent of the Secretary of another

15 military department, may, by contract entered into

16 with any contractor, authorize the contractor to use

17 one or more installations, designated by the Secretary

18 of the Air Force, that is under the jurisdiction of the

19 Secretary of such other military department.

20 ‘‘(2) The Secretary of the Air Force may include in

21 the contract such terms and conditions as the Secretary de22 termines appropriate to promote the national defense or to

23 protect the interests of the United States.

24 ‘‘(b) PURPOSES OF USE.—A contract entered into

25 under subsection (a) may authorize use of a designated in26 stallation as a weather alternate, as a technical stop not
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1 involving the enplaning or deplaning of passengers or

2 cargo, or, in the case of an installation within the United

3 States, for other commercial purposes. Notwithstanding any

4 other provision of the law, the Secretary may establish dif5 ferent levels and types of uses for different installations and

6 may provide in contracts under subsection (a) for different

7 levels and types of uses by different contractors.

8 ‘‘(c) HOLD HARMLESS REQUIREMENT.—A contract

9 entered into under subsection (a) shall provide that the con10 tractor agrees to indemnify and hold harmless the Air Force

11 (and any other armed force having jurisdiction over any

12 installation covered by the contract) from any action, suit,

13 or claim of any sort resulting from, relating to, or arising

14 out of any activities conducted, or services or supplies fur15 nished, in connection with the contract.

16 ‘‘(d) RESERVATION OF RIGHT TO EXCLUDE CONTRAC17 TOR.—A contract entered into under subsection (a) shall

18 provide that the Secretary concerned may, without provid19 ing prior notice, deny access to an installation designated

20 under the contract when the Secretary determines that it

21 is necessary to do so in order to meet military exigencies.’’.

22 (b) CLERICAL AMENDMENT.—The table of sections at

23 the beginning of such chapter is amended by striking out

24 the item relating to section 9513 and inserting in lieu there25 of the following:

‘‘9513. Use of military installations by Civil Reserve Air Fleet contractors.’’.
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1 Subtitle D—Miscellaneous

2 SEC. 3051. REGULATIONS ON PROCUREMENT, PRODUCTION,

3 WAREHOUSING, AND SUPPLY DISTRIBUTION

4 FUNCTIONS.

5 (a) IN GENERAL.—Section 2202 of title 10, United

6 States Code, is amended to read as follows:

7 ‘‘§ 2202. Regulations on procurement, production,

8 warehousing, and supply distribution

9 functions

10 ‘‘The Secretary of Defense shall prescribe regulations

11 governing the performance within the Department of De12 fense of the procurement, production, warehousing, and

13 supply distribution functions, and related functions, of the

14 Department of Defense.’’.

15 (b) CLERICAL AMENDMENT.—The item relating to sec16 tion 2202 in the table of sections at the beginning of chapter

17 131 of such title is amended to read as follows:

‘‘2202. Regulations on procurement, production, warehousing, and supply distribution functions.’’.

18 SEC. 3052. REPEAL OF REQUIREMENTS REGARDING PROD19 UCT EVALUATION ACTIVITIES.

20 (a) REPEAL.—Section 2369 of title 10, United States

21 Code, is repealed.

22 (b) CLERICAL AMENDMENT.—The table of sections at

23 the beginning of chapter 139 of such title is amended by

24 striking out the item relating to section 2369.
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1 SEC. 3053. CODIFICATION AND REVISION OF LIMITATION

2 ON LEASE OF VESSELS, AIRCRAFT, AND VEHI3 CLES.

4 (a) LIMITATION.—(1) Chapter 141 of title 10, United

5 States Code, is amended by inserting after section 2401 the

6 following new section:

7 ‘‘§ 2401a. Lease of vessels, aircraft, and vehicles

8 ‘‘The Secretary of Defense or the Secretary of a mili9 tary department may not enter into any contract with a

10 term of 18 months or more, or extend or renew any contract

11 for a term of 18 months or more, for any vessel, aircraft,

12 or vehicle, through a lease, charter, or similar agreement,

13 unless the Secretary has considered all costs of such contract

14 (including estimated termination liability) and has deter15 mined in writing that the contract is in the best interest

16 of the Government.’’.

17 (2) The table of sections at the beginning of such chap18 ter is amended by inserting after the item relating to section

19 2401 the following new item:

‘‘2401a. Lease of vessels, aircraft, and vehicles.’’.

20 (b) REPEAL OF SUPERSEDED PROVISION.—Section

21 9081 of Public Law 101–165 (103 Stat. 1147; 10 U.S.C.

22 2401 note) is repealed.
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1 SEC. 3054. REPEAL OF APPLICATION OF PUBLIC CON2 TRACTS ACT TO CERTAIN NAVAL VESSEL

3 CONTRACTS.

4 (a) REPEAL.—Section 7299 of title 10, United States

5 Code, is repealed.

6 (b) CLERICAL AMENDMENT.—The table of sections at

7 the beginning of chapter 633 of such title is amended by

8 striking out the item relating to section 7299.

9 TITLE IV—SIMPLIFIED ACQUISI10 TION THRESHOLD AND SO11 CIOECONOMIC, SMALL BUSI12 NESS, AND MISCELLANEOUS

13 LAWS

14 Subtitle A—Simplified Acquisition

15 Threshold

16 PART I—ESTABLISHMENT OF THRESHOLD

17 SEC. 4001. ESTABLISHMENT OF SIMPLIFIED ACQUISITION

18 THRESHOLD.

19 (a) ESTABLISHMENT.—The Office of Federal Procure20 ment Policy Act (41 U.S.C. 401 et seq.) is amended by in21 serting after section 4 the following new section:

22 ‘‘SEC. 4A. SIMPLIFIED ACQUISITION THRESHOLD.

23 ‘‘(a) IN GENERAL.—The simplified acquisition thresh24 old for purposes of Federal acquisitions is (except as pro25 vided in subsection (b)) the amount of $25,000, as adjusted

26 pursuant to subsection (c).
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1 ‘‘(b) AGENCIES WITH FACNET CAPABILITY.—In the

2 case of an executive agency, or a procuring activity of an

3 executive agency, for which there is in effect a certification

4 under 2302b(c) of title 10, United States Code, or section

5 302B(c) of the Federal Property and Administrative Serv6 ices Act of 1949 with respect to implementation of a

7 FACNET capability, the simplified acquisition threshold is

8 the amount of $100,000, as adjusted pursuant to subsection

9 (c).

10 ‘‘(c) PERIODIC ADJUSTMENT FOR INFLATION.—The

11 dollar amount in effect under subsection (a) shall be ad12 justed on October 1 of each year divisible by 5 to the equiva13 lent amount in constant fiscal year 1990 dollars (rounded

14 to the nearest $1,000). The dollar amount in effect under

15 subsection (b) shall be adjusted on October 1 of each year

16 divisible by 5 to the equivalent amount in constant fiscal

17 year 1993 dollars (rounded to the nearest $1,000).

18 ‘‘(d) SPECIAL RULE FOR CONTINGENCY OPER19 ATIONS.—In the case of a contract to be awarded and per20 formed, or a purchase to be made, outside the United States

21 in support of a contingency operation (as defined in section

22 101(a)(13) of title 10, United States Code), the amounts

23 in effect under subsections (a) and (b) shall be two times

24 the amounts otherwise applicable.’’.
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1 (b) CONFORMING AMENDMENT TO DEFINITION.—Sec2 tion 4 of such Act is amended by striking out paragraph

3 (11).

4 SEC. 4002. FEDERAL ACQUISITION COMPUTER NETWORK

5 ARCHITECTURE.

6 (a) FEDERAL ACQUISITION COMPUTER NETWORK AR7 CHITECTURE.—The Office of Federal Procurement Policy

8 Act (41 U.S.C. 401 et seq.), as amended by section 1092,

9 is further amended by adding at the end the following new

10 section:

11 ‘‘SEC. 30. FEDERAL ACQUISITION COMPUTER NETWORK

12 (FACNET) ARCHITECTURE.

13 ‘‘(a) IN GENERAL.—(1) The Administrator shall estab14 lish a program for the development and implementation of

15 a Federal acquisition computer network architecture (here16 inafter in this section referred to as ‘FACNET’). The Ad17 ministrator shall assign a program manager for FACNET

18 and shall provide for overall direction of policy and leader19 ship in the development, coordination, installation, oper20 ation, and completion of implementation of FACNET by

21 executive agencies.

22 ‘‘(2) In carrying out paragraph (1), the Administrator

23 shall consult with appropriate Federal agencies with appli24 cable technical and functional expertise, including the Of25 fice of Information and Regulatory Affairs, the National
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1 Institute of Standards and Technology, the General Services

2 Administration, and the Department of Defense.

3 ‘‘(3) The Administrator shall carry out paragraph (1)

4 not later than the date that is 5 years after the date of

5 the enactment of the Federal Acquisition Improvement Act

6 of 1994.

7 ‘‘(b) FUNCTIONS OF FACNET.—The FACNET archi8 tecture shall provide for the following functions:

9 ‘‘(1) GOVERNMENT FUNCTIONS.—Allow executive

10 agencies to do the following electronically:

11 ‘‘(A) Provide widespread public notice of so12 licitations for contract opportunities issued by

13 an executive agency and of orders to be made by

14 the agency.

15 ‘‘(B) Allow responses to solicitations and re16 quests for information to be submitted to the pro17 curing activity through such system.

18 ‘‘(C) Allow public notice of contract awards

19 to be provided through such system.

20 ‘‘(D) In cases in which it is practicable,

21 allow questions regarding solicitations to be an22 swered through such system.

23 ‘‘(E) Allow orders to be made through such

24 system.
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1 ‘‘(F) In cases in which it is practicable,

2 make payments to contractors by bank card, elec3 tronic funds transfer, or other automated meth4 ods.

5 ‘‘(G) Archive data relating to each procure6 ment action made using such system.

7 ‘‘(2) USER FUNCTIONS.—Allow private users to

8 do the following electronically:

9 ‘‘(A) Access notice of solicitations for con10 tract opportunities issued by an executive agency

11 and of orders to be made by the executive agency.

12 ‘‘(B) Selectively access and review solicita13 tions and orders issued by the executive agency.

14 ‘‘(C) Respond to solicitations and notices of

15 orders issued by the executive agency.

16 ‘‘(D) Receive orders from the executive agen17 cy.

18 ‘‘(E) Access information on contract awards

19 made by the executive agency.

20 ‘‘(F) In cases in which it is practicable, re21 ceive payment by bank card, electronic funds

22 transfer, or other automated means.

23 ‘‘(3) GENERAL FUNCTIONS.—
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1 ‘‘(A) Allow the electronic exchange of pro2 curement information between the private sector

3 and the Federal Government.

4 ‘‘(B) Employ nationally and internation5 ally recognized data formats that serve to broad6 en and ease the electronic interchange of data.

7 ‘‘(C) Allow convenient and universal user

8 access through a single point of entry.

9 ‘‘(c) ARCHITECTURE DEFINED.—For purposes of this

10 section, the term ‘architecture’ means an evolving descrip11 tion of all functions to be performed to achieve the mission

12 of streamlining procurement through electronic commerce,

13 the system elements and interfaces needed to perform the

14 functions, and the designation of performance levels of those

15 system elements.

16 ‘‘(d) ANNUAL REPORT TO CONGRESS.—The Adminis17 trator shall evaluate progress by executive agencies in im18 plementing the FACNET under this section. The Adminis19 trator shall submit to the Congress, on the date that is one

20 year after the date of the enactment of the Federal Acquisi21 tion Improvement Act of 1994 and on that date in each

22 of the 5 years thereafter, a report on the overall progress

23 by the executive branch and by each executive agency in

24 implementing this section.’’.
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1 (b) TECHNICAL AMENDMENTS.—Section 18 of the Of2 fice of Federal Procurement Policy Act (41 U.S.C. 416) is

3 amended—

4 (1) in subsection (a)(1)(A), by striking out ‘‘no5 tice’’ in the matter following clause (ii) and inserting

6 in lieu thereof ‘‘notice of solicitation’’; and

7 (2) in subsection (d), by striking out ‘‘a notice

8 under subsection (e)’’ in the first sentence and insert9 ing in lieu thereof ‘‘a notice of solicitation under sub10 section (a)’’.

11 SEC. 4003. IMPLEMENTATION IN ARMED SERVICES.

12 (a) ESTABLISHMENT IN TITLE 10.—Chapter 137 of

13 title 10, United States Code, is amended by inserting after

14 section 2302 the following new sections:

15 ‘‘§ 2302a. Simplified acquisition threshold

16 ‘‘(a) SIMPLIFIED ACQUISITION THRESHOLD.—For

17 purposes of acquisitions by agencies named in section 2303

18 of this title, the simplified acquisition threshold is as speci19 fied in section 4A of the Office of Federal Procurement Pol20 icy Act.

21 ‘‘§ 2302b. Implementation of FACNET capability

22 ‘‘(a) IMPLEMENTATION OF FACNET CAPABILITY.—(1)

23 The head of each agency named in section 2303 of this title

24 shall implement the Federal acquisition computer network

25 (‘FACNET’) capability required by section 30 of the Office
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1 of Federal Procurement Policy Act. In the case of the De2 partment of Defense, the implementation shall be by the

3 Secretary of Defense for the Department of Defense as a

4 whole. For purposes of this section, the term ‘head of an

5 agency’ does not include the Secretaries of the military de6 partments.

7 ‘‘(2) In implementing the FACNET capability pursu8 ant to paragraph (1), the head of an agency shall consult

9 with the Administrator for Federal Procurement Policy,

10 ‘‘(b) DESIGNATION OF AGENCY OFFICIAL.—(1) The

11 Secretary of Defense shall designate the Under Secretary

12 of Defense for Acquisition and Technology to have respon13 sibility for implementation of FACNET capability through14 out the Department of Defense.

15 ‘‘(2) The head of each agency named in paragraph (5)

16 or (6) of section 2303 of this title shall designate a program

17 manager to have responsibility for implementation of

18 FACNET capability for that agency and otherwise to im19 plement this section. Such program manager shall report

20 directly to the senior procurement executive designated for

21 the agency under section 16(3) of the Office of Federal Pro22 curement Policy Act (41 U.S.C. 414(3)).

23 ‘‘(c) CERTIFICATION OF FACNET CAPABILITY.—(1)

24 When the senior procurement executive of an agency or, in

25 the case of the Department of Defense, the Under Secretary
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1 of Defense for Acquisition and Technology, determines that

2 a procuring activity of the agency has implemented an in3 terim FACNET capability (as defined in subsection (e)),

4 the executive or the Under Secretary shall certify to the Ad5 ministrator for Federal Procurement Policy that such activ6 ity has implemented an interim FACNET capability.

7 ‘‘(2) When the head of an agency, with the concurrence

8 of the Administrator for Federal Procurement Policy, deter9 mines that the agency has implemented a full FACNET ca10 pability (as defined in subsection (f)), the head of the agen11 cy shall certify to Congress that the agency has implemented

12 a full FACNET capability.

13 ‘‘(3) The head of each agency shall provide for imple14 mentation of both interim FACNET capability and full

15 FACNET capability, with priority on providing convenient

16 and universal user access as required by section 30(b)(3)(C)

17 of the Office of Federal Procurement Policy Act, in that

18 agency as soon as practicable after the date of the enactment

19 of the Federal Acquisition Improvement Act of 1994.

20 ‘‘(d) HIGHER SIMPLIFIED ACQUISITION THRESHOLD

21 WHEN FACNET CAPABILITY CERTIFIED.—A certification

22 to the Administrator for Federal Procurement Policy or

23 Congress under subsection (c) shall be considered to be a

24 certification for purposes of the higher simplified acquisi25 tion threshold under section 4A(b) of the Office of Federal
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1 Procurement Policy Act, except that a certification under

2 paragraph (1) of subsection (c) shall not constitute such a

3 certification in the case of solicitations issued after the end

4 of the five-year period beginning on the date of the enact5 ment of the Federal Acquisition Improvement Act of 1994.

6 ‘‘(e) IMPLEMENTATION OF INTERIM FACNET CAPA7 BILITY.—A procuring activity shall be considered to have

8 implemented an interim FACNET capability if—

9 ‘‘(1) with respect to each procurement expected to

10 be in an amount greater than the micro-purchase

11 threshold and less than the simplified acquisition

12 threshold, the procuring activity has implemented the

13 FACNET functions described in paragraphs (1)(A)

14 and (2)(A) of section 30(b) of the Office of Federal

15 Procurement Policy Act; and

16 ‘‘(2) with respect to each procurement expected to

17 be in an amount greater than the micro-purchase

18 threshold and less than the simplified acquisition

19 threshold, the procuring activity issues notices of so20 licitations through a system with those functions for

21 all contracting opportunities other than in cases cov22 ered by section 18(c) of the Office of Federal Procure23 ment Policy Act (41 U.S.C. 416(c)).

24 ‘‘(f) IMPLEMENTATION OF FULL FACNET CAPABIL25 ITY.—(1) An agency shall be considered to have imple-
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1 mented a full FACNET capability if (except in the case

2 of procuring activities (or portions thereof) of the agency

3 for which the head of the agency determines that implemen4 tation is not cost effective or practicable) the agency has

5 implemented all of the FACNET functions described in sec6 tion 30(b) of the Office of Federal Procurement Policy Act.

7 ‘‘(2) For purposes of paragraph (1), an agency may

8 not be considered to have implemented a full FACNET ca9 pability if—

10 ‘‘(A) the head of the agency has determined that

11 implementation of FACNET capability is not cost ef12 fective or practicable in the case of certain procuring

13 activities (or portions thereof) of the agency; and

14 ‘‘(B) the percentage of the procurement actions

15 in amounts greater than the micro-purchase threshold

16 executed by the procuring activities (or portions

17 thereof) referred to in subparagraph (A) for the pre18 ceding fiscal year is greater than 25 percent of the

19 total number of procurement actions in amounts

20 greater than the micro-purchase threshold executed by

21 the agency for that year.

22 ‘‘(g) PROCURING ACTIVITIES ORIGINALLY EXCLUDED

23 IN CERTIFICATION.—(1) If the head of an agency, in cer24 tifying under subsection (c) that the agency has imple25 mented a full FACNET capability, determines that such
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1 implementation is not cost effective or practicable in the

2 case of any procuring activity (or portion thereof) of that

3 agency, then that certification shall not apply under section

4 4A(b) of the Office of Federal Procurement Policy Act to

5 any procurement action by that procuring activity (or por6 tion thereof).

7 ‘‘(2) If the head of an agency determines that an in8 terim or a full FACNET capability has subsequently been

9 implemented for that procuring activity (or portion there10 of), the head of the agency shall make a certification to the

11 Administrator for Federal Procurement Policy in the same

12 manner as a certification under paragraph (1) or (2) of

13 subsection (c), as applicable, and such certification shall

14 have the same effect with respect to that procuring activity

15 (or portion thereof) as if made under such paragraph of

16 subsection (c).’’.

17 (b) CLERICAL AMENDMENT.—The table of sections at

18 the beginning of chapter 137 of such title is amended by

19 inserting after the item relating to section 2302 the follow20 ing new items:

‘‘2302a. Simplified acquisition threshold.

‘‘2302b. Implementation of FACNET capability.’’.

21 SEC. 4004. IMPLEMENTATION IN CIVILIAN AGENCIES.

22 Title III of the Federal Property and Administrative

23 Services Act of 1949 is amended by inserting after section

24 302 the following new sections:
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1 ‘‘SEC. 302A. SIMPLIFIED ACQUISITION THRESHOLD.

2 ‘‘(a) SIMPLIFIED ACQUISITION THRESHOLD.—For

3 purposes of acquisitions by executive agencies, the sim4 plified acquisition threshold is as specified in section 4A

5 of the Office of Federal Procurement Policy Act.

6 ‘‘SEC. 302B. IMPLEMENTATION OF FACNET CAPABILITY.

7 ‘‘(a) IMPLEMENTATION OF FACNET CAPABILITY.—(1)

8 The head of each executive agency shall implement the Fed9 eral acquisition computer network (‘FACNET’) capability

10 required by section 30 of the Office of Federal Procurement

11 Policy Act.

12 ‘‘(2) In implementing the FACNET capability pursu13 ant to paragraph (1), the head of an executive agency shall

14 consult with the Administrator for Federal Procurement

15 Policy.

16 ‘‘(b) DESIGNATION OF AGENCY OFFICIAL.—The head

17 of each executive agency shall designate a program manager

18 to have responsibility for implementation of FACNET ca19 pability for that agency and otherwise to implement this

20 section. Such program manager shall report directly to the

21 senior procurement executive designated for the agency

22 under section 16(3) of the Office of Federal Procurement

23 Policy Act (41 U.S.C. 414(3)).

24 ‘‘(c) CERTIFICATION OF FACNET CAPABILITY.—(1)

25 When the senior procurement executive of an executive agen26 cy determines that a procuring activity of the agency has
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1 implemented an interim FACNET capability (as defined

2 in subsection (e)), the executive shall certify to the Adminis3 trator for Federal Procurement Policy that such activity

4 has implemented an interim FACNET capability.

5 ‘‘(2) When the head of an executive agency, with the

6 concurrence of the Administrator for Federal Procurement

7 Policy, determines that the executive agency has imple8 mented a full FACNET capability (as defined in subsection

9 (f)), the head of the executive agency shall certify to Con10 gress that the agency has implemented a full FACNET ca11 pability.

12 ‘‘(3) The head of each executive agency shall provide

13 for implementation of both interim FACNET capability

14 and full FACNET capability, with priority on providing

15 convenient and universal user access as required by section

16 30(b)(3)(C) of the Office of Federal Procurement Policy Act,

17 in that executive agency as soon as practicable after the

18 date of the enactment of the Federal Acquisition Improve19 ment Act of 1994.

20 ‘‘(d) HIGHER SIMPLIFIED ACQUISITION THRESHOLD

21 WHEN FACNET CAPABILITY CERTIFIED.—A certification

22 to the Administrator for Federal Procurement Policy or

23 Congress under subsection (c) shall be considered to be a

24 certification for purposes of the higher simplified acquisi25 tion threshold under section 4A(b) of the Office of Federal
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1 Procurement Policy Act, except that a certification under

2 paragraph (1) of subsection (c) shall not constitute such a

3 certification in the case of solicitations issued after the end

4 of the five-year period beginning on the date of the enact5 ment of the Federal Acquisition Improvement Act of 1994.

6 ‘‘(e) IMPLEMENTATION OF INTERIM FACNET CAPA7 BILITY.—A procuring activity shall be considered to have

8 implemented an interim FACNET capability if—

9 ‘‘(1) with respect to each procurement expected to

10 be in an amount greater than the micro-purchase

11 threshold and less than the simplified acquisition

12 threshold, the procuring activity has implemented the

13 FACNET functions described in paragraphs (1)(A)

14 and (2)(A) of section 30(b) of the Office of Federal

15 Procurement Policy Act; and

16 ‘‘(2) with respect to each procurement expected to

17 be in an amount greater than the micro-purchase

18 threshold and less than the simplified acquisition

19 threshold, the procuring activity issues notices of so20 licitations through a system with those functions for

21 all contracting opportunities other than in cases cov22 ered by section 18(c) of the Office of Federal Procure23 ment Policy Act (41 U.S.C. 416(c)).

24 ‘‘(f) IMPLEMENTATION OF FULL FACNET CAPABIL25 ITY.—(1) An executive agency shall be considered to have
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1 implemented a full FACNET capability if (except in the

2 case of procuring activities (or portions thereof) of the exec3 utive agency for which the head of the agency determines

4 that implementation is not cost effective or practicable) the

5 executive agency has implemented all of the FACNET func6 tions described in section 30(b) of the Office of Federal Pro7 curement Policy Act.

8 ‘‘(2) For purposes of paragraph (1), an executive agen9 cy may not be considered to have implemented a full

10 FACNET capability if—

11 ‘‘(A) the head of the executive agency has deter12 mined that implementation of FACNET capability is

13 not cost effective or practicable in the case of certain

14 procuring activities (or portions thereof) of the execu15 tive agency; and

16 ‘‘(B) the percentage of the procurement actions

17 in amounts greater than the micro-purchase threshold

18 executed by the procuring activities (or portions

19 thereof) referred to in subparagraph (A) for the pre20 ceding fiscal year is greater than 25 percent of the

21 total number of procurement actions in amounts

22 greater than the micro-purchase threshold executed by

23 the executive agency for that year.

24 ‘‘(g) PROCURING ACTIVITIES ORIGINALLY EXCLUDED

25 IN CERTIFICATION.—(1) If the head of an executive agency,
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1 in certifying under subsection (c) that the agency has im2 plemented a full FACNET capability, determines that such

3 implementation is not cost effective or practicable in the

4 case of any procuring activity (or portion thereof) of that

5 executive agency, then that certification shall not apply

6 under section 4A(b) of the Office of Federal Procurement

7 Policy Act to any procurement action by that procuring

8 activity (or portion thereof).

9 ‘‘(2) If the head of an executive agency determines that

10 an interim or a full FACNET capability has subsequently

11 been implemented for that procuring activity (or portion

12 thereof), the executive agency shall make a certification to

13 the Administrator for Federal Procurement Policy in the

14 same manner as a certification under paragraph (1) or (2)

15 of subsection (c), as applicable, and such certification shall

16 have the same effect with respect to that procuring activity

17 (or portion thereof) as if made under such paragraph of

18 subsection (c).’’.

19 PART II—SIMPLIFICATION OF PROCEDURES

20 SEC. 4011. PROCEDURES FOR PURCHASES BELOW MICRO21 PURCHASE THRESHOLD.

22 The Office of Federal Procurement Policy Act (41

23 U.S.C. 401 et seq.), as amended by section 4001, is further

24 amended by inserting after section 4A the following new

25 section:
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1 ‘‘SEC. 4B. PROCEDURES APPLICABLE TO PURCHASES

2 BELOW MICRO-PURCHASE THRESHOLD.

3 ‘‘(a) REQUIREMENTS.—(1) The head of each executive

4 agency shall ensure that procuring activities of that agency,

5 in awarding a contract with a price exceeding the micro6 purchase threshold, comply with the requirements of section

7 8(a) of the Small Business Act (15 U.S.C. 637(a)) and sec8 tion 2323 of title 10, United States Code, or section 315

9 of the Federal Property and Administrative Services Act

10 of 1949, as applicable to that agency.

11 ‘‘(2) The authority under part 13.106(a)(1) of the Fed12 eral Acquisition Regulation (48 C.F.R. 13.106(a)(1)), as in

13 effect on November 18, 1993, to make purchases without se14 curing competitive quotations does not apply to any pur15 chases with a price exceeding the micro-purchase threshold.

16 ‘‘(b) EXCLUSION FOR MICRO-PURCHASES.—A pur17 chase by an executive agency with an anticipated value of

18 the micro-purchase threshold or less is not subject to the

19 Act of March 3, 1933, commonly referred to as the ‘Buy

20 American Act’ (41 U.S.C. 10a–10c).

21 ‘‘(c) APPLICABILITY OF CERTAIN PROVISIONS.—For

22 purposes of section 27, only subsections (a) and (b) shall

23 apply with respect to purchases below the micro-purchase

24 threshold. In applying such subsection (a), a contractor that

25 enters into a contract under the micro-purchase threshold

26 shall be considered to be a competing contractor. In apply-
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1 ing such subsection (b), a civil officer or employee, and any

2 member of the Armed Forces, who has authority to enter

3 into contracts but whose contracting authority is limited

4 to the amount of the micro-purchase threshold or less shall

5 be considered to be a procurement official.

6 ‘‘(d) IMPLEMENTATION THROUGH FAR.—This section

7 shall be implemented through the Federal Acquisition Regu8 lation.

9 ‘‘(e) MICRO-PURCHASE THRESHOLD DEFINED.—For

10 purposes of this section, the micro-purchase threshold is the

11 amount of $2,500, adjusted on October 1 of each year divis12 ible by 5 to the equivalent amount in constant fiscal year

13 1993 dollars (rounded to the nearest $100).’’.

14 SEC. 4012. PROCUREMENT NOTICE.

15 (a) CONTINUATION OF EXISTING NOTICE THRESH16 OLDS.—Subsection (a) of section 18 of the Office of Federal

17 Procurement Policy Act (41 U.S.C. 416) is amended as fol18 lows:

19 (1) Paragraph (1) is amended—

20 (A) by striking out ‘‘the small purchase

21 threshold’’ each place it appears and inserting in

22 lieu thereof ‘‘the simplified acquisition thresh23 old’’;
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1 (B) by striking out ‘‘(c)—’’ in the matter

2 preceding subparagraph (A) and inserting in

3 lieu thereof ‘‘(c):’’;

4 (C) by striking out ‘‘an executive’’ at the be5 ginning of subparagraphs (A) and (C) and in6 serting in lieu thereof ‘‘An executive’’;

7 (D) by striking out the semicolon at the end

8 of subparagraph (A) and inserting in lieu thereof

9 a period; and

10 (E) by amending subparagraph (B) to read

11 as follows:

12 ‘‘(B) An executive agency intending to solicit

13 bids or proposals for a contract for property or serv14 ices for a price expected to exceed $10,000 but not to

15 exceed the simplified acquisition threshold shall post

16 a notice of solicitation described in subsection (b).

17 The notice shall be posted at the contracting office is18 suing the solicitation or shall be made available

19 through an electronic system with a FACNET capa20 bility that at least meets the requirements of para21 graphs (1)(A) and (2)(A) of section 30(b). The notice

22 shall be posted for a period of not less than 10 days,

23 except that in the case of a posting made through an

24 electronic system with such a FACNET capability,
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1 the posting may be for a period of less than 10 days

2 as prescribed in the Federal Acquisition Regulation.’’.

3 (2) Paragraph (3)(B) is amended by inserting

4 after ‘‘(B)’’ the following: ‘‘in the case of a contract

5 or order for an amount expected to exceed the sim6 plified acquisition threshold,’’.

7 (b) OPPORTUNITY FOR ALL RESPONSIBLE POTENTIAL

8 OFFERORS.—Such subsection is further amended by adding

9 at the end the following:

10 ‘‘(4) An executive agency intending to solicit offers for

11 a contract for which a notice of solicitation is required to

12 be posted under paragraph (1)(B) shall ensure that all po13 tential offerors are permitted to respond to the solicitation

14 for the contract within the period of time specified in the

15 solicitation for the submission of offers.’’.

16 (c) ESTABLISHMENT OF DEADLINE FOR SUBMISSION

17 OF OFFERS.—Such subsection is further amended by add18 ing after paragraph (4), as added by subsection (b), the fol19 lowing new paragraph:

20 ‘‘(5) An executive agency shall establish a deadline for

21 the submission of all bids or proposals in response to a no22 tice of solicitation with respect to which no such deadline

23 is provided by statute.’’.

24 (d) EXCEPTIONS.—Subsection (c) of such section is

25 amended by adding at the end the following new paragraph:
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1 ‘‘(4)(A) The requirements of subsection (a)(1) shall not

2 apply in the case of an acquisition for which notice is ac3 complished through the use of FACNET, as described in sec4 tion 30 and certified under section 2302a of title 10, United

5 States Code, or section 302A of the Federal Property and

6 Administrative Services Act of 1949.

7 ‘‘(B) The Federal Acquisition Regulation shall provide

8 for minimum periods of time for submission of offers for

9 acquisitions described in subparagraph (A). Such periods

10 shall provide offerors a reasonable opportunity to respond.

11 ‘‘(C) A notice of solicitation of bids or proposals for

12 an acquisition described in subparagraph (A) shall include

13 the matter described in subsection (b).’’.

14 SEC. 4013. GAO TEST AND REPORT ON PERFORMANCE OF

15 SIMPLIFIED ACQUISITION THRESHOLD.

16 (a) PERFORMANCE TEST.—The Comptroller General of

17 the United States shall collect data and assess the effects

18 of the simplified acquisition threshold, as established in sec19 tion 4A of the Office of Federal Procurement Policy Act,

20 on the participation of small business concerns (including

21 small business concerns owned and controlled by socially

22 and economically disadvantaged individuals) in procure23 ment awards of less than $100,000 and the benefits and

24 detriments, if any, to the procuring activities of the various

25 Executive agencies.
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1 (b) DATA TO BE COLLECTED.—Data collected under

2 subsection (a) shall include data regarding whether the es3 tablishment of the simplified acquisition threshold has im4 proved the acquisition process in terms of reduced paper5 work, financial or other savings to the Federal Government,

6 and any increase in the number of contractors participat7 ing in the contracting process.

8 (c) PERIOD.—Data shall be collected for purposes of

9 subsection (a) during the period beginning with the first

10 full fiscal year quarter after the effective date of the amend11 ments made by section 3001 and ending on September 30,

12 1997.

13 (d) REPORT.—By March 1, 1998, the Comptroller

14 General shall submit to Congress a report on the effects of

15 the establishment of the simplified acquisition threshold by

16 the amendments made by section 3001.
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1 PART III—INAPPLICABILITY OF LAWS TO ACQUI2 SITIONS NOT IN EXCESS OF SIMPLIFIED AC3 QUISITION THRESHOLD

4 Subpart A—Generally

5 SEC. 4021. INAPPLICABILITY OF FUTURE ENACTED PRO6 CUREMENT LAWS TO CONTRACTS NOT EX7 CEEDING THE SIMPLIFIED ACQUISITION

8 THRESHOLD.

9 (a) ARMED SERVICES.—Section 2302a of title 10,

10 United States Code, as added by section 4003(a), is amend11 ed by adding at the end the following new subsection:

12 ‘‘(b) CONSTRUCTION WITH FUTURE ENACTMENTS.—A

13 provision of law enacted after the date of the enactment of

14 the Federal Acquisition Improvement Act of 1994 shall not

15 be construed as applicable to purchases of property or serv16 ices by an agency named in section 2303 of this title for

17 an amount not in excess of the simplified acquisition

18 threshold unless that provision of law specifically refers to

19 this section and specifically states that such provision of

20 law modifies or supersedes this section.’’.

21 (b) CIVILIAN AGENCIES.—Section 302A of the Federal

22 Property and Administrative Services Act of 1949, as added

23 by section 4004(a), is amended by adding at the end the

24 following new subsection:

25 ‘‘(b) CONSTRUCTION WITH FUTURE ENACTMENTS.—A

26 provision of law enacted after the date of the enactment of
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1 the Federal Acquisition Improvement Act of 1994 shall not

2 be construed as applicable to purchases of property or serv3 ices by an executive agency for an amount not in excess

4 of the simplified acquisition threshold unless that provision

5 of law specifically refers to this section and specifically

6 states that such provision of law modifies or supersedes this

7 section.’’.

8 Subpart B—Armed Services Acquisitions

9 SEC. 4031. INAPPLICABILITY OF CERTAIN PROVISIONS OF

10 LAW.

11 Section 2302a of title 10, United States Code, as

12 amended by section 4021, is further amended by adding at

13 the end the following new subsection:

14 ‘‘(c) INAPPLICABILITY OF CERTAIN PROVISIONS OF

15 LAW.—The following provisions of law (and regulations

16 prescribed under such provisions) shall not apply to any

17 contract in an amount not greater than the simplified ac18 quisition threshold:

19 ‘‘(1) Section 2306(b) of this title (relating to pro20 hibition on contingent fees).

21 ‘‘(2) Section 2313 of this title (relating to exam22 ination of books and records of contractor).

23 ‘‘(3) Section 2384(b) of this title (relating to re24 quirement to identify suppliers and sources of sup25 plies).
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1 ‘‘(4) Section 2393(d) of this title (relating to

2 prohibition against doing business with certain

3 offerors of contractors).

4 ‘‘(5) Section 2402 of this title (relating to prohi5 bition on limitation of subcontractor direct sales).

6 ‘‘(6) Section 2408(a) of this title (relating to

7 prohibition on persons convicted of defense-contract

8 related felonies).

9 ‘‘(7) Section 2410b of this title (relating to con10 tractor inventory accounting system standards).

11 ‘‘(8) Section 2534 of this title (relating to mis12 cellaneous limitations on procurement).

13 ‘‘(9) Section 27(e) of the Office of Federal Pro14 curement Policy Act (41 U.S.C. 423(e)).

15 ‘‘(10) The Drug-Free Workplace Act of 1988

16 (subtitle D of title V of Public Law 100–690; 41

17 U.S.C. 701 et seq.).’’.

18 SEC. 4032. CONFORMING AMENDMENTS RELATING TO INAP19 PLICABILITY OF CERTAIN PROVISIONS OF

20 LAW.

21 (a) INAPPLICABILITY OF REQUIREMENT FOR CON22 TRACT CLAUSE REGARDING CONTINGENT FEES.—Section

23 2306(b) of title 10, United States Code, is amended by add24 ing at the end the following: ‘‘This subsection does not apply
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1 to a contract that is for an amount not in excess of the

2 simplified acquisition threshold.’’.

3 (b) INAPPLICABILITY OF AUTHORITY TO EXAMINE

4 BOOKS AND RECORDS OF CONTRACTORS.—Section 2313 of

5 title 10, United States Code, as amended by section 2201,

6 is further amended by adding at the end of subsection (e)

7 the following:

8 ‘‘(2) A contract that is for an amount not in ex9 cess of the simplified acquisition threshold.’’.

10 (c) INAPPLICABILITY OF REQUIREMENT TO IDENTIFY

11 SUPPLIERS AND SOURCES OF SUPPLIES.—Section 2384(b)

12 of title 10, United States Code, is amended by adding at

13 the end the following new paragraph:

14 ‘‘(3) The regulations prescribed pursuant to paragraph

15 (1) do not apply to a contract for an amount that does

16 not exceed the simplified acquisition threshold.’’.

17 (d) INAPPLICABILITY OF PROHIBITION AGAINST DOING

18 BUSINESS WITH CERTAIN OFFERORS OR CONTRACTORS.—

19 Section 2393(d) of title 10, United States Code, is amended

20 in the second sentence by striking out ‘‘above’’ and all that

21 follows and inserting in lieu thereof ‘‘in excess of the sim22 plified acquisition threshold.’’.

23 (e) INAPPLICABILITY OF PROHIBITION ON LIMITING

24 SUBCONTRACTOR DIRECT SALES TO THE UNITED
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1 STATES.—Section 2402 of title 10, United States Code, is

2 amended by adding at the end the following new subsection:

3 ‘‘(c) This section does not apply to a contract that is

4 for an amount not in excess of the simplified acquisition

5 threshold.’’.

6 (f) INAPPLICABILITY OF PROHIBITION ON PERSONS

7 CONVICTED OF DEFENSE-RELATED FELONIES.—Section

8 2408(a) of title 10, United States Code, is amended by add9 ing at the end the following new paragraph:

10 ‘‘(4) In this subsection, the term ‘defense contract’

11 means a contract in an amount in excess of the simplified

12 acquisition threshold.’’.

13 (g) INAPPLICABILITY OF CONTRACTOR INVENTORY AC14 COUNTING SYSTEM STANDARDS.—Section 2410b of title 10,

15 United States Code, is amended—

16 (1) by inserting ‘‘(a)’’ before ‘‘The Secretary’’;

17 and

18 (2) by adding at the end the following:

19 ‘‘(b) The regulations prescribed pursuant to subsection

20 (a) shall not apply to a contract that is for an amount

21 not in excess of the simplified acquisition threshold.’’.

22 (h) INAPPLICABILITY OF MISCELLANEOUS PROCURE23 MENT LIMITATIONS.—Section 2534 of title 10, United

24 States Code, is amended by adding at the end the following:
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1 ‘‘(g) INAPPLICABILITY TO CONTRACTS UNDER SIM2 PLIFIED ACQUISITION THRESHOLD.—This section does not

3 apply to a contract for an amount that does not exceed the

4 simplified acquisition threshold.’’.

5 Subpart C—Civilian Agency Acquisitions

6 SEC. 4041. INAPPLICABILITY OF CERTAIN PROVISIONS OF

7 LAW.

8 Section 302A of the Federal Property and Administra9 tive Services Act of 1949, as amended by section 4021(b),

10 is further amended by adding at the end the following new

11 subsection:

12 ‘‘(c) INAPPLICABILITY OF CERTAIN PROVISIONS OF

13 LAW.—The following provisions of law (and regulations

14 prescribed under such provisions) shall not apply to any

15 contract entered into by an executive agency in an amount

16 not greater than the simplified acquisition threshold:

17 ‘‘(1) Sections 303G, 304(a), and 304C of this

18 Act.

19 ‘‘(2) Section 27(e) of the Office of Federal Pro20 curement Policy Act (41 U.S.C. 423(e)).

21 ‘‘(3) The Drug-Free Workplace Act of 1988 (sub22 title D of title V of Public Law 100–690; 41 U.S.C.

23 701 et seq.).’’.
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1 SEC. 4042. CONFORMING AMENDMENTS RELATING TO INAP2 PLICABILITY OF CERTAIN PROVISIONS OF

3 LAW.

4 (a) INAPPLICABILITY OF PROHIBITION ON LIMITING

5 SUBCONTRACTOR DIRECT SALES TO THE UNITED

6 STATES.—Section 303G of the Federal Property and Ad7 ministrative Services Act of 1949 (41 U.S.C. 253g) is

8 amended by adding at the end the following new subsection:

9 ‘‘(c) This section does not apply to a contract for an

10 amount that is not in excess of the simplified acquisition

11 threshold.’’.

12 (b) INAPPLICABILITY OF REQUIREMENT FOR CON13 TRACT CLAUSE REGARDING CONTINGENT FEES.—Section

14 304(a) of the Federal Property and Administrative Services

15 Act of 1949 (41 U.S.C. 254(a)) is amended by adding at

16 the end the following: ‘‘The preceding sentence does not

17 apply to a contract for an amount that is not in excess

18 of the simplified acquisition threshold.’’.

19 (c) INAPPLICABILITY OF AUTHORITY TO EXAMINE

20 BOOKS AND RECORDS OF CONTRACTORS.—Section 304C of

21 the Federal Property and Administrative Services Act of

22 1949, as added by section 2251(a), is amended by adding

23 at the end of subsection (e) the following:

24 ‘‘(2) A contract that is for an amount not in ex25 cess of the simplified acquisition threshold.’’.
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1 Subpart D—Acquisitions Generally

2 SEC. 4051. CONFORMANCE OF CERTAIN PROCUREMENT IN3 TEGRITY REQUIREMENTS.

4 Subsection (e)(7)(A) of section 27 of the Office of Fed5 eral Procurement Policy Act (41 U.S.C. 423) is amended

6 by inserting after ‘‘$100,000’’ the following: ‘‘or the sim7 plified acquisition threshold, whichever is greater’’.

8 SEC. 4052. INAPPLICABILITY OF THE DRUG-FREE WORK9 PLACE ACT OF 1988.

10 Section 5152(a)(1) of the Drug-Free Workplace Act of

11 1988 (subtitle D of title V of the Anti-Drug Abuse Act of

12 1988; Public Law 100–690; 41 U.S.C. 701(a)(1)) is amend13 ed by striking out ‘‘of $25,000 or more from any Federal

14 agency’’ and inserting in lieu thereof ‘‘in excess of the sim15 plified acquisition threshold (as defined in section 4A of

16 such Act) by any Federal agency’’.

17 PART IV—CONFORMING AMENDMENTS

18 SEC. 4071. ARMED SERVICES ACQUISITIONS.

19 (a) SIMPLIFIED ACQUISITION PROCEDURES.—Section

20 2304(g) of title 10, United States Code, is amended—

21 (1) in paragraph (1), by striking out ‘‘small

22 purchases of property and services’’ and inserting in

23 lieu thereof ‘‘purchases of property and services for

24 amounts not in excess of the simplified acquisition

25 threshold’’;

26 (2) by striking out paragraph (2);
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1 (3) by redesignating paragraphs (3) and (4) as

2 paragraphs (2) and (3), respectively;

3 (4) in paragraph (2), as so redesignated—

4 (A) by striking out ‘‘small purchase thresh5 old’’ and inserting in lieu thereof ‘‘simplified ac6 quisition threshold’’; and

7 (B) by striking out ‘‘small purchase proce8 dures’’ and inserting in lieu thereof ‘‘simplified

9 procedures’’; and

10 (5) in paragraph (3), as so redesignated, by

11 striking out ‘‘small purchase procedures’’ and insert12 ing in lieu thereof ‘‘simplified procedures’’.

13 (b) SOLICITATION CONTENT REQUIREMENT.—Section

14 2305(a)(2) of such title is amended by striking out ‘‘small

15 purchases)’’ in the matter preceding subparagraph (A) and

16 inserting in lieu thereof ‘‘a purchase for an amount not in

17 excess of the simplified acquisition threshold)’’.

18 (c) COST TYPE CONTRACTS.—Section 2306(e)(2)(A) of

19 such title is amended by striking out ‘‘small purchase

20 threshold’’ and inserting in lieu thereof ‘‘simplified acquisi21 tion threshold’’.

22 (d) CROSS REFERENCE AMENDMENT.—Section 9005

23 of Public Law 102–396 (10 U.S.C. 2441 note) is amended

24 in the first sentence by striking out ‘‘small purchases cov25 ered by section 2304(g)’’ and inserting in lieu thereof ‘‘pur-
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1 chases for amounts not in excess of the simplified acquisi2 tion threshold covered by section 2304(g)’’.

3 SEC. 4072. CIVILIAN AGENCY ACQUISITIONS.

4 (a) SIMPLIFIED ACQUISITION PROCEDURES.—Section

5 303(g) of the Federal Property and Administrative Services

6 Act of 1949 (41 U.S.C. 253(g)) is amended—

7 (1) in paragraph (1)—

8 (A) by striking out ‘‘small purchases of

9 property and services’’ and inserting in lieu

10 thereof ‘‘purchases of property and services for

11 amounts not in excess of the simplified acquisi12 tion threshold’’, and

13 (B) by striking out ‘‘regulations modified,

14 in accordance with section 2752 of the Competi15 tion in Contracting Act of 1984,’’ and inserting

16 in lieu thereof ‘‘Federal Acquisition Regulation’’;

17 (2) by striking out paragraph (2);

18 (3) by redesignating paragraphs (3) and (4) as

19 paragraphs (2) and (3), respectively;

20 (4) in paragraph (2), as so redesignated—

21 (A) by striking out ‘‘small purchase thresh22 old’’ and inserting in lieu thereof ‘‘simplified ac23 quisition threshold’’; and
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1 (B) by striking out ‘‘small purchase proce2 dures’’ and inserting in lieu thereof ‘‘simplified

3 procedures’’;

4 (5) in paragraph (3), as so redesignated, by

5 striking out ‘‘small purchase procedures’’ and insert6 ing in lieu thereof ‘‘the simplified procedures’’; and

7 (6) by striking out paragraph (5).

8 (b) SOLICITATION CONTENT REQUIREMENT.—Section

9 303A(b) of such Act (41 U.S.C. 253a(b)) is amended by

10 striking out ‘‘small purchases)’’ in the matter preceding

11 paragraph (1) and inserting in lieu thereof ‘‘a purchase for

12 an amount not in excess of the simplified acquisition

13 threshold)’’.

14 (c) COST TYPE CONTRACTS.—Section 304(b) of such

15 Act (41 U.S.C. 254(b)) is amended in the third sentence

16 by striking out ‘‘either $25,000’’ and inserting in lieu there17 of ‘‘either the simplified acquisition threshold’’.

18 SEC. 4073. OFFICE OF FEDERAL PROCUREMENT POLICY

19 ACT.

20 Section 19(a) of the Office of Federal Procurement Pol21 icy Act (41 U.S.C. 417(a)) is amended by striking out ‘‘pro22 curements, other than small purchases,’’ and inserting in

23 lieu thereof ‘‘procurements for amounts in excess of the sim24 plified acquisition threshold’’.
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1 PART V—REVISION OF REGULATIONS

2 SEC. 4081. REVISION REQUIRED.

3 (a) FEDERAL ACQUISITION REGULATION.—(1) Not

4 later than one year after the date of the enactment of this

5 Act, the Federal Acquisition Regulatory Council established

6 by section 25(a) of the Office of Federal Procurement Policy

7 Act (41 U.S.C. 421(a)) shall—

8 (A) review the Federal Acquisition Regulation to

9 identify regulations that are applicable to acquisi10 tions in excess of a specified amount that is less than

11 $100,000 (other than such an amount that is specified

12 by law); and

13 (B) amend the regulations so identified to pro14 vide that such regulations do not apply to acquisi15 tions that are not in excess of the simplified acquisi16 tion threshold.

17 (2) Paragraph (1)(B) does not apply in the case of

18 a regulation for which such an amendment would not be

19 in the national interest, as determined by the Council.

20 (b) SUPPLEMENTAL REGULATIONS.—Not later than 90

21 days after the date on which the review required by sub22 section (a)(1)(A) is completed, the head of each executive

23 agency that has issued regulations, policies, or procedures

24 referred to in section 25(c)(2) of the Office of Federal Pro25 curement Policy Act (41 U.S.C. 421(c)(2)) shall—
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1 (1) identify any such regulation, policy, or pro2 cedure that is applicable to acquisitions in excess of

3 a specified amount that is less than $100,000; and

4 (2) pursuant to section 22 of such Act (41 U.S.C.

5 418b), publish amendments to the regulations so iden6 tified to provide that each such regulation, policy, or

7 procedure does not apply to acquisitions that are not

8 in excess of the simplified acquisition threshold.

9 (c) RELATIONSHIP TO OTHER AUTHORITY.—None of

10 the amendments to regulations made pursuant to sub11 sections (a) and (b) apply to or in any way diminish the

12 authority of the civil rights enforcement programs enforced

13 by the Department of Labor.

14 (d) DEFINITIONS.—In this section:

15 (1) The term ‘‘simplified acquisition threshold’’

16 has the meaning given such term in section 4A of the

17 Office of Federal Procurement Policy Act, as added by

18 section 4001.

19 (2) The term ‘‘executive agency’’ has the mean20 ing given such term in section 3(a) of the Federal

21 Property and Administrative Services Act of 1949 (41

22 U.S.C. 472(b)).
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1 Subtitle B—Socioeconomic and

2 Small Business Laws

3 SEC. 4101. SMALL BUSINESS PROVISIONS.

4 Section 6(d) of the Office of Federal Procurement Pol5 icy Act (41 U.S.C. 405(d)) is amended—

6 (1) by striking out ‘‘and’’ at the end of para7 graph (7);

8 (2) by redesignating paragraph (8) as para9 graph (10); and

10 (3) by inserting after paragraph (7) the follow11 ing new paragraphs:

12 ‘‘(8) developing policies, in consultation with the

13 Administrator of the Small Business Administration,

14 that ensure that small businesses and small businesses

15 owned and controlled by socially and economically

16 disadvantaged persons are provided with the maxi17 mum practicable opportunities to participate in pro18 curements that are conducted for amounts below the

19 simplified acquisition threshold;

20 ‘‘(9) developing policies that will promote

21 achievement of goals for participation by small busi22 nesses and small businesses owned and controlled by

23 socially and economically disadvantaged individ24 uals;’’.
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1 SEC. 4102. PAYMENT PROTECTIONS FOR SUBCONTRACTORS

2 AND SUPPLIERS.

3 (a) REGULATIONS.—

4 (1) IN GENERAL.—The Administrator for Fed5 eral Procurement Policy shall prescribe in regulations

6 the requirements described in paragraph (2).

7 (2) PROCEDURES RELATING TO COMPLIANCE

8 WITH PAYMENT TERMS.—(A) Under procedures estab9 lished in the regulations, upon the assertion by a sub10 contractor or supplier of a contractor performing a

11 Government contract that the subcontractor or sup12 plier has not been paid by the prime contractor in ac13 cordance with the payment terms of the subcontract,

14 purchase order, or other agreement with the prime

15 contractor, the contracting officer may determine the

16 following:

17 (i) With respect to a construction contract,

18 whether the contractor has made progress pay19 ments to the subcontractor or supplier in compli20 ance with chapter 39 of title 31, United States

21 Code.

22 (ii) With respect to a contract other than a

23 construction contract, whether the contractor has

24 made progress or other payments to the sub25 contractor or supplier in compliance with the
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1 terms of the subcontract, purchase order, or other

2 agreement with the prime contractor.

3 (iii) With respect to either a construction

4 contract or a contract other than a construction

5 contract, whether the contractor has made final

6 payment to the subcontractor or supplier in com7 pliance with the terms of the subcontract, pur8 chase order, or other agreement with the prime

9 contractor.

10 (iv) With respect to either a construction

11 contract or a contract other than a construction

12 contract, whether any certification of payment of

13 the subcontractor or supplier accompanying the

14 contractor’s payment request to the Government

15 is accurate.

16 (B) If the contracting officer determines that the

17 prime contractor is not in compliance with any mat18 ter referred to in clause (i), (ii), or (iii) of subpara19 graph (A), the contracting officer may, under proce20 dures established in the regulations—

21 (i) encourage the prime contractor to make

22 timely payment to the subcontractor or supplier;

23 or
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1 (ii) reduce or suspend progress payments

2 with respect to amounts due to the prime con3 tractor.

4 (C) If the contracting officer determines that a

5 certification referred to in clause (iv) of subparagraph

6 (A) is inaccurate in any material respect, the con7 tracting officer shall, under procedures established in

8 the regulations, initiate appropriate administrative

9 or other remedial action.

10 (D) This paragraph shall apply with respect to

11 any Government contract, other than a Department of

12 Defense contract, that is in effect on the date of pro13 mulgation of the regulations under this subsection or

14 that is awarded after such date.

15 (b) INAPPLICABILITY TO CERTAIN CONTRACTS.—The

16 regulations prescribed under this section shall not apply to

17 the following contracts:

18 (1) A contract that is for an amount not in ex19 cess of the simplified acquisition threshold (within the

20 meaning of section 4A of the Office of Federal Pro21 curement Policy Act).

22 (2) A contract for the acquisition of commercial

23 items (as that term is defined in section 4(12) of the

24 Office of Federal Procurement Policy Act).
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1 (c) AMENDMENTS TO ARMED SERVICES PROVISION.—

2 Section 806 of the National Defense Authorization Act for

3 Fiscal Years 1992 and 1993 (Public Law 102–190; 10

4 U.S.C. 2301 note) is amended by striking out subsection

5 (c) and inserting in lieu thereof the following:

6 ‘‘(c) INAPPLICABILITY TO CERTAIN CONTRACTS.—Reg7 ulations prescribed under this section shall not apply to the

8 following contracts:

9 ‘‘(1) A contract that is for an amount not in ex10 cess of the simplified acquisition threshold (within the

11 meaning of section 4A of the Office of Federal Pro12 curement Policy Act).

13 ‘‘(2) A contract for the acquisition of commercial

14 items (as that term is defined in section 2281 of title

15 10, United States Code).’’.

16 SEC. 4103. EXTENSION OF TEST PROGRAM FOR NEGOTIA17 TION OF COMPREHENSIVE SMALL BUSINESS

18 SUBCONTRACTING PLANS.

19 Section 834(e) of the National Defense Authorization

20 Act for Fiscal Years 1990 and 1991 (Public Law 101–189;

21 15 U.S.C. 637 note) is amended by striking out ‘‘September

22 30, 1994.’’ in the second sentence and inserting in lieu

23 thereof ‘‘September 30, 1997.’’.
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1 SEC. 4104. SMALL BUSINESS PROCUREMENT ADVISORY

2 COUNCIL.

3 (a) ESTABLISHMENT.—There is hereby established an

4 interagency council to be known as the ‘‘Small Business

5 Procurement Advisory Council’’ (hereinafter in this section

6 referred to as the ‘‘Council’’).

7 (b) DUTIES.—The duties of the Council are—

8 (1) to serve as a forum for discussion of issues

9 and problems relating to, and ideas for improvement

10 of, small business procurement matters within the

11 Federal Government;

12 (2) to provide information to other departments

13 and agencies of the Federal Government about small

14 business procurement; and

15 (3) to issue advisory reports to the Office of Fed16 eral Procurement Policy and the Small Business Ad17 ministration on small business procurement matters.

18 (c) MEMBERSHIP.—The Council shall be composed of

19 the following members:

20 (1) The Administrator for Federal Procurement

21 Policy (or the designee of the Administrator).

22 (2) The Administrator of the Small Business Ad23 ministration (or the designee of the Administrator).

24 (3) The Director of the Minority Business Devel25 opment Agency.
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1 (4) The head of each Office of Small and Dis2 advantaged Business Utilization in each Federal

3 agency having procurement powers.

4 (d) COCHAIRMEN.—The Council shall be cochaired by

5 the Administrator for Federal Procurement Policy and the

6 Administrator of the Small Business Administration.

7 (e) MEETINGS.—The Council shall meet at the call of

8 the chairmen, but not less often than four times a year and

9 once each quarter.

10 (f) DIRECTOR.—The Chief Counsel for Advocacy of the

11 Small Business shall serve as the director of the Council.

12 The director may not vote on matters before the council ex13 cept in the case of a tie vote among the members. The duties

14 of the director shall be determined by the chairmen of the

15 Council. The Chief Counsel for Advocacy shall receive no

16 additional pay by reason of the counsel’s service as director

17 of the Council.

18 (g) ANNUAL REPORT.—(1) Not later than 30 days

19 after the end of each fiscal year, the Council shall submit

20 to Congress a report detailing the activities of the Council

21 during the preceding fiscal year in carrying out this sec22 tion.
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1 SEC. 4105. MAXIMUM PRACTICABLE OPPORTUNITIES FOR

2 APPRENTICES ON FEDERAL CONSTRUCTION

3 PROJECTS.

4 (a) SENSE OF CONGRESS.—It is the sense of the Con5 gress that—

6 (1) contractors performing Federal construction

7 contracts should, to the maximum extent practicable,

8 give preference in the selection of subcontractors to

9 subcontractors participating in apprenticeship pro10 grams registered with the Department of Labor or

11 with a State apprenticeship agency recognized by

12 such Department; and

13 (2) contractors and subcontractors performing

14 Federal construction contracts should provide maxi15 mum practicable opportunities for employment of ap16 prentices who are participating in or who have com17 pleted such apprenticeship programs.

18 (b) REPORT.—Not later than 2 years after the date

19 of the enactment of this Act, the Comptroller General shall

20 submit to the Congress a report on the extent to which con21 tractors and subcontractors performing Federal construc22 tion contracts have increased subcontractor participation in

23 registered apprenticeship programs.
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1 Subtitle C—Miscellaneous

2 Acquisition Laws

3 SEC. 4151. RESTRICTION ON USE OF NONCOMPETITIVE

4 PROCEDURES FOR PROCUREMENT FROM A

5 SPECIFIED SOURCE.

6 (a) ARMED SERVICES ACQUISITIONS.—Section 2304 of

7 title 10, United States Code, as amended by section 1005,

8 is further amended—

9 (1) in subsection (c)(5), by inserting ‘‘subject to

10 subsection (k),’’ after ‘‘(5)’’; and

11 (2) by adding at the end the following new sub12 section:

13 ‘‘(k)(1) It is the policy of Congress that no legislation

14 should be enacted that requires a procurement by an agency

15 to be made from a specified non-Federal Government source.

16 ‘‘(2) A provision of law may not be construed as re17 quiring a procurement by an agency to be made from a

18 specified non-Federal Government source unless that provi19 sion of law—

20 ‘‘(A) specifically refers to this subsection;

21 ‘‘(B) specifically identifies the particular non22 Federal Government source from which the procure23 ment is to made; and

24 ‘‘(C) specifically states that the procurement

25 from that source is required by such provision of law
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1 in contravention of the policy set forth in paragraph

2 (1).’’.

3 (b) CIVILIAN AGENCY ACQUISITIONS.—Section 303 of

4 the Federal Property and Administrative Services Act of

5 1949 (41 U.S.C. 253) is amended—

6 (1) in subsection (c)(5), by inserting ‘‘subject to

7 subsection (h),’’ after ‘‘(5)’’; and

8 (2) by adding at the end the following new sub9 section:

10 ‘‘(h)(1) It is the policy of Congress that no legislation

11 should be enacted that requires a procurement by an execu12 tive agency to be made from a specified non-Federal Gov13 ernment source.

14 ‘‘(2) A provision of law may not be construed as re15 quiring a procurement by an executive agency to be made

16 from a specified non-Federal Government source unless that

17 provision of law—

18 ‘‘(A) specifically refers to this subsection;

19 ‘‘(B) specifically identifies the particular non20 Federal Government source involved; and

21 ‘‘(C) specifically states that the procurement

22 from that source is required by such provision of law

23 in contravention of the policy set forth in paragraph

24 (1).’’.
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1 SEC. 4152. REPEAL OF OBSOLETE PROVISION.

2 Section 308 of the Federal Property and Administra3 tive Services Act of 1949 (41 U.S.C. 258) is repealed.

4 TITLE V—STANDARDS OF

5 CONDUCT

6 SEC. 5001. CONTRACTING FUNCTIONS PERFORMED BY FED7 ERAL PERSONNEL.

8 (a) AMENDMENT OF OFPP ACT.—The Office of Fed9 eral Procurement Policy Act, as amended by section 1091,

10 is further amended by inserting after section 22 the follow11 ing new section 23:

12 ‘‘SEC. 23. CONTRACTING FUNCTIONS PERFORMED BY FED13 ERAL PERSONNEL.

14 ‘‘(a) LIMITATION ON USE OF CONTRACT ADVISORY

15 AND ASSISTANCE SERVICES.—(1) An executive agency may

16 not provide for an evaluation or analysis of any aspect of

17 a proposal submitted for an acquisition by that executive

18 agency to be conducted by a person who is not an employee

19 of an executive agency or a member of the Armed Forces

20 unless the executive agency determines that employees or

21 members with adequate training and capability to perform

22 the evaluation or analysis are not readily available within

23 the agency or another Federal agency, as determined in ac24 cordance with standards and procedures prescribed in the

25 Federal Acquisition Regulation.
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1 ‘‘(2) In the administration of this subsection, the exec2 utive agency shall determine in accordance with the stand3 ards and procedures set forth in the Federal Acquisition

4 Regulation whether—

5 ‘‘(A) a sufficient number of employees within the

6 executive agency or another Federal agency are read7 ily available to perform a particular evaluation or

8 analysis for the executive agency making the deter9 mination; and

10 ‘‘(B) the readily available employees have the

11 training and capabilities necessary to perform the

12 evaluation or analysis.

13 ‘‘(b) DEFINITION.—For purposes of this section, the

14 term ‘employee’ has the meaning given such term in section

15 2105 of title 5, United States Code.’’.

16 (b) REQUIREMENT FOR GUIDANCE AND REGULA17 TIONS.—

18 (1) IN GENERAL.—The Federal Acquisition Reg19 ulatory Council established by section 25(a) of the Of20 fice of Federal Procurement Policy Act (41 U.S.C.

21 421(a)) shall—

22 (A) review part 37 of title 48 of the Code

23 of Federal Regulations as it relates to the use of

24 advisory and assistance services; and
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1 (B) provide guidance and promulgate regu2 lations regarding—

3 (i) what actions Federal agencies are

4 required to take to determine whether exper5 tise is readily available within the Federal

6 Government before contracting for advisory

7 and technical services to conduct acquisi8 tions; and

9 (ii) the manner in which Federal em10 ployees with expertise may be shared with

11 agencies needing expertise for such acquisi12 tions.

13 (2) DEFINITION.—In paragraph (1), the term

14 ‘‘employee’’ has the meaning given such term in sec15 tion 2105 of title 5, United States Code.

16 SEC. 5002. REPEAL OF EXECUTED REQUIREMENT FOR

17 STUDY AND REPORT.

18 Section 17 of the Office of Federal Procurement Policy

19 Act (41 U.S.C. 415) is repealed.

20 SEC. 5003. INTERESTS OF MEMBERS OF CONGRESS.

21 Section 3741 of the Revised Statutes (41 U.S.C. 22)

22 is amended to read as follows:

23 ‘‘SEC. 3741. No member of Congress shall be admitted

24 to any share or part of any contract or agreement made,
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1 entered into, or accepted by or on behalf of the United

2 States, or to any benefit to arise thereupon.’’.

3 SEC. 5004. WAITING PERIOD FOR SIGNIFICANT CHANGES

4 PROPOSED FOR ACQUISITION REGULATIONS.

5 Section 22 of the Office of Federal Procurement Policy

6 Act (41 U.S.C. 418b) is amended—

7 (1) by striking out ‘‘30 days’’ in subsection (a)

8 and inserting in lieu thereof ‘‘45 days’’; and

9 (2) by adding at the end of subsection (d) the fol10 lowing new paragraph:

11 ‘‘(3) A policy, regulation, procedure, or form described

12 in subsection (a) may (notwithstanding that subsection)

13 take effect earlier than 45 days after the date of publication

14 thereof in the Federal Register pursuant to subsection (b)

15 if the officer authorized to issue the procurement policy, reg16 ulation, procedure, or form determines that compelling cir17 cumstances make compliance with the 45-day requirement

18 under subsection (a) impracticable. However, the policy,

19 regulation, procedure, or form may not take effect earlier

20 than 30 days after the publication date except as provided

21 in paragraph (1).’’.

22 SEC. 5005. REPEAL OF SUPERSEDED AND OBSOLETE LAWS.

23 (a) REPEAL.—The following sections of title 10, Unit24 ed States Code, are repealed: sections 2207, 2397, 2397a,

25 2397b, and 2397c.
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1 (b) CLERICAL AMENDMENTS.—

2 (1) The table of sections at the beginning of

3 chapter 131 of such title is amended by striking out

4 the item relating to section 2207.

5 (2) The table of sections at the beginning of

6 chapter 141 of such title is amended by striking out

7 the items relating to sections 2397, 2397a, 2397b, and

8 2397c.

9 TITLE VI—DEFENSE TRADE AND

10 COOPERATION

11 SEC. 6001. EXCEPTION TO BUY AMERICAN ACT FOR MICRO12 PURCHASES.

13 Section 2 of title III of the Act of March 3, 1933 (41

14 U.S.C. 10a), commonly referred to as the ‘‘Buy American

15 Act’’, is amended by adding at the end the following: ‘‘This

16 section shall not apply to manufactured articles, materials,

17 or supplies procured under any contract the award value

18 of which is less than or equal to the micro-purchase thresh19 old under section 4B of the Office of Federal Procurement

20 Policy Act.’’.

21 SEC. 6002. POLICY ON PURCHASE OF FOREIGN GOODS.

22 (a) IN GENERAL.—Section 2533 of title 10, United

23 States Code, is amended to read as follows:
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1 ‘‘§ 2533. Policy on the purchase of foreign goods

2 ‘‘(a) DETERMINATION UNDER BUY AMERICAN ACT.—

3 In determining whether application of the Buy American

4 Act is inconsistent with the public interest, the Secretary

5 of Defense shall give adequate consideration to the following:

6 ‘‘(1) The bids or proposals of small business

7 firms in the United States which have offered to fur8 nish American goods.

9 ‘‘(2) The bids or proposals of all other firms in

10 the United States which have offered to furnish Amer11 ican goods.

12 ‘‘(3) The balance of payments of the United

13 States.

14 ‘‘(4) The cost of shipping goods which are other

15 than American goods.

16 ‘‘(5) Any duty, tariff, or surcharge which may

17 enter into the cost of using goods which are other than

18 American goods.

19 ‘‘(6) The need to ensure that the Department of

20 Defense has access to advanced state-of-the-art com21 mercial technology.

22 ‘‘(7) The need to protect the national technology

23 and industrial base, to preserve and enhance the na24 tional technology employment base, and to provide for

25 a defense mobilization base.
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1 ‘‘(8) The need to maintain the same source of

2 supply for spare and replacement parts either for an

3 end item that qualifies as an American good or to

4 maintain or foster the integration of the military and

5 commercial industrial base.

6 ‘‘(9) National security interests of the United

7 States.

8 ‘‘(b) In this section, the term ‘goods which are other

9 than American goods’ means—

10 ‘‘(1) an end product that is not mined, produced,

11 or manufactured in the United States; or

12 ‘‘(2) an end product that is manufactured in the

13 United States but which includes components mined,

14 produced, or manufactured outside the United States

15 the aggregate cost of which exceeds the aggregate cost

16 of the components of such end product that are mined,

17 produced, or manufactured in the United States.’’.

18 (b) CLERICAL AMENDMENT.—The item relating to sec19 tion 2533 in the table of sections at the beginning of sub20 chapter V of chapter 148 of such title is amended to read

21 as follows:

‘‘2533. Policy on purchase of foreign goods.’’.

22 SEC. 6003. CONSOLIDATION OF MISCELLANEOUS PROCURE23 MENT LIMITATIONS.

24 Section 2534 of title 10, United States Code, is amend25 ed—
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1 (1) by striking out subsections (a) through (f);

2 (2) by redesignating subsection (g), as added by

3 section 4032, as subsection (d); and

4 (3) by inserting after the section heading the fol5 lowing:

6 ‘‘(a) LIMITATION ON CERTAIN PROCUREMENTS.—The

7 Secretary of Defense may procure an item listed in sub8 section (b) only if the item is manufactured by an entity

9 that is part of the national technology and industrial base

10 (as defined in section 2491(1) of this title).

11 ‘‘(b) COVERED ITEMS.—Subsection (a) applies to the

12 following:

13 ‘‘(1) BUSES.—Multipassenger motor vehicles

14 (buses).

15 ‘‘(2) CHEMICAL WEAPONS ANTIDOTE.—Chemical

16 weapons antidote contained in automatic injectors (or

17 components for such injectors), but only if the com18 pany that manufactures the item not only manufac19 tures it in the United States but also meets the follow20 ing requirements:

21 ‘‘(A) The company is an existing producer

22 under the industrial preparedness program at

23 the time the contract is awarded.

24 ‘‘(B) The company has received all required

25 regulatory approvals.
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1 ‘‘(C) The company has the plant, equip2 ment, and personnel to perform the contract in

3 existence in the United States at the time the

4 contract is awarded.

5 ‘‘(3) VALVES AND MACHINE TOOLS.—(A) Items

6 in the following categories:

7 ‘‘(i) Powered and non-powered valves in

8 Federal Supply Classes 4810 and 4820 used in

9 piping for naval surface ships and submarines.

10 ‘‘(ii) Machine tools in the Federal Supply

11 Classes for metal-working machinery numbered

12 3405, 3408, 3410 through 3419, 3426, 3433,

13 3438, 3441 through 3443, 3445, 3446, 3448,

14 3449, 3460, and 3461.

15 ‘‘(B) Contracts for the procurement of items de16 scribed in subparagraph (A) include contracts—

17 ‘‘(i) for the use of such items in any prop18 erty under the control of the Department of De19 fense, including Government-owned, contractor20 operated facilities; and

21 ‘‘(ii) entered into by contractors on behalf of

22 the Department of Defense for the purposes of

23 providing such items to other contractors as Gov24 ernment-furnished equipment.
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1 ‘‘(C) In any case in which a contract for items

2 described in subparagraph (A) includes the procure3 ment of more than one Federal Supply Class of ma4 chine tools or machine tools and accessories, each sup5 ply class shall be evaluated separately for purposes of

6 determining whether the limitation in this subsection

7 applies.

8 ‘‘(D) This paragraph is effective through fiscal

9 year 1996.

10 ‘‘(4) AIR CIRCUIT BREAKERS.—Air circuit break11 ers for naval vessels.

12 ‘‘(5) SONOBUOYS.—Sonobuoys.

13 ‘‘(6) BALL BEARINGS AND ROLLER BEARINGS.—

14 Ball bearings and roller bearings, in accordance with

15 subpart 225.71 of part 225 of the Defense Federal Ac16 quisition Regulation Supplement, as in effect on Oc17 tober 23, 1992. This paragraph is effective through

18 fiscal year 1995.

19 ‘‘(c) EXCEPTIONS.—The Secretary of Defense may

20 waive the limitation in subsection (a) with respect to the

21 procurement of an item listed in subsection (b) if the Sec22 retary determines that any of the following apply:

23 ‘‘(1) Application of the limitation would cause

24 unreasonable costs or delays to be incurred.
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1 ‘‘(2) United States producers of the item would

2 not be jeopardized by competition from a foreign

3 country and that country does not discriminate

4 against defense items produced in the United States

5 to a greater degree than the United States discrimi6 nates against defense items produced in that country.

7 ‘‘(3) Application of the limitation would impede

8 cooperative programs entered into between the De9 partment of Defense and a foreign country and that

10 country does not discriminate against defense items

11 produced in the United States to a greater degree

12 than the United States discriminates against defense

13 items produced in that country.

14 ‘‘(4) Satisfactory quality items manufactured by

15 an entity that is part of the national technology and

16 industrial base (as defined in section 2491(1) of this

17 title) are not available.

18 ‘‘(5) Application of the limitation would result

19 in the existence of only one source for the item that

20 is an entity that is part of the national technology

21 and industrial base (as defined in section 2491(1) of

22 this title).

23 ‘‘(6) The procurement is for an amount less than

24 the simplified acquisition threshold and simplified

25 purchase procedures are being used.
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1 ‘‘(7) Application of the limitation is not in the

2 national security interests of the United States.

3 ‘‘(8) Application of the limitation would ad4 versely affect a United States company.

5 ‘‘(d) PRINCIPLE OF CONSTRUCTION WITH FUTURE

6 LAWS.—A provision of law may not be construed as modi7 fying or superseding the provisions of this section, or as

8 requiring funds to be limited, or made available, by the Sec9 retary of Defense to a particular domestic source by con10 tract, unless that provision of law—

11 ‘‘(1) specifically refers to this section;

12 ‘‘(2) specifically states that such provision of law

13 modifies or supersedes the provisions of this section;

14 and

15 ‘‘(3) specifically identifies the particular domes16 tic source involved and states that the contract to be

17 awarded pursuant to such provision of law is being

18 awarded in contravention of this section.’’.

19 SEC. 6004. REPEAL OF OBSOLETE AND REDUNDANT PROVI20 SIONS.

21 (a) REPEAL OF REQUIREMENT FOR POLICY GUID22 ANCE.—Title III of the Act of March 3, 1933 (41 U.S.C.

23 10a et seq.), commonly referred to as the ‘‘Buy American

24 Act’’, is amended in section 4(g) (41 U.S.C. 10b–1(g)) by

25 striking out paragraphs (2)(C) and (3).
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1 (b) REPEAL OF REPORTING REQUIREMENT.—Section

2 9096(b) of Public Law 102–396 (106 Stat. 1924; 41 U.S.C.

3 10b–2(b)) is repealed.

4 (c) REPEAL OF STUDIES OF WAIVERS.—Section 306

5 of the Trade Agreements Act of 1979 (19 U.S.C. 2516), re6 lating to studies of certain employment effects and procure7 ment effects of a waiver of the Buy American Act, is re8 pealed.

9 TITLE VII—COMMERCIAL ITEMS

10 Subtitle A—Definitions and

11 Regulations

12 SEC. 7001. DEFINITIONS.

13 (a) DEFINITIONS.—Section 4 of the Office of Federal

14 Procurement Policy Act (41 U.S.C. 403) is amended by

15 adding at the end the following new paragraphs:

16 ‘‘(12) The term ‘commercial item’ means any of

17 the following:

18 ‘‘(A) Any item of a type customarily used

19 in the course of normal business operations for

20 other than Federal Government purposes, that—

21 ‘‘(i) has been sold, leased, or licensed to

22 the general public or to domestic State, or

23 local government entities; or
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1 ‘‘(ii) has been offered for sale, lease, or

2 license to the general public or to domestic

3 State, or local government entities.

4 ‘‘(B) An item intended to be used in the

5 course of normal business operations for other

6 than Federal Government purposes that is not

7 yet available in the commercial marketplace, but

8 will be available in the commercial marketplace

9 in time to satisfy the delivery requirements

10 under a Federal Government solicitation.

11 ‘‘(C) Any item that, but for—

12 ‘‘(i) modifications of a type customar13 ily available in the commercial market14 place, or

15 ‘‘(ii) minor modifications made to

16 meet Federal Government requirements,

17 would satisfy the criteria in subparagraph (A)

18 or (B).

19 ‘‘(D) Any combination of items meeting the

20 requirements of subparagraph (A), (B), or (C)

21 that are of a type customarily combined and sold

22 in combination to the general public.

23 ‘‘(E) Installation services, maintenance

24 services, repair services, training services, and

25 other services if such services are procured for
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1 support of an item referred to in subparagraph

2 (A), (B), (C), or (D) and if the source of such

3 services—

4 ‘‘(i) offers such services to the general

5 public and the Federal Government contem6 poraneously and under similar terms and

7 conditions; and

8 ‘‘(ii) offers to use the same work force

9 for providing the Federal Government with

10 such services as the source uses for provid11 ing such services to the general public.

12 ‘‘(F) Services offered and sold competitively,

13 in significant quantities, in the commercial mar14 ketplace at established catalog prices or standard

15 rates and under standard commercial terms and

16 conditions.

17 ‘‘(G) Any item, combination of items, or

18 service referred to in subparagraphs (A) through

19 (F) notwithstanding the fact that the item, com20 bination of items, or service is transferred be21 tween or among separate divisions, subsidiaries,

22 or affiliates of a contractor.

23 ‘‘(13) The term ‘nondevelopmental item’ means

24 any of the following:
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1 ‘‘(A) Any previously developed item of sup2 ply that is in use by a department or agency of

3 the United States, a State or local government,

4 or a foreign government with which the United

5 States has a mutual defense cooperation agree6 ment.

7 ‘‘(B) Any item of supply described in sub8 paragraph (A) that requires only minor modi9 fication or modification of the type customarily

10 available in the commercial marketplace in order

11 to meet the requirements of the procuring depart12 ment or agency.

13 ‘‘(C) Any item of supply currently being

14 produced that does not meet the requirements of

15 subparagraph (A) or (B) solely because the item

16 is not yet in use.

17 ‘‘(14) The term ‘component’ means any item

18 supplied to the Federal Government as part of an end

19 item or of another component.

20 ‘‘(15) The term ‘commercial component’ means

21 any component that is a commercial item.’’.

22 (b) STYLISTIC AMENDMENTS.—Such section is further

23 amended—
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1 (1) by striking out ‘‘Act—’’ in the matter preced2 ing paragraph (1) and inserting in lieu thereof

3 ‘‘Act:’’;

4 (2) by capitalizing the first letter of the first

5 word in each of paragraphs (1) through (11);

6 (3) by striking out the semicolon at the end of

7 each of paragraphs (1), (2), (3), (5), (6), (7), (8), and

8 (9) and inserting in lieu thereof a period; and

9 (4) by striking out ‘‘; and’’ at the end of para10 graphs (4) and (10) and inserting in lieu thereof a

11 period.

12 SEC. 7002. REGULATIONS ON ACQUISITION OF COMMER13 CIAL ITEMS.

14 (a) IN GENERAL.—The Federal Acquisition Regula15 tion shall provide regulations to implement paragraphs

16 (12) through (15) of section 4 of the Office of Federal Pro17 curement Policy Act, chapter 136 of title 10, United States

18 Code, and sections 314 through 314D of the Federal Prop19 erty and Administrative Services Act of 1949.

20 (b) TERMS AND CONDITIONS.—The regulations pre21 scribed under subsection (a) shall contain a set or sets of

22 terms and conditions to be included in contracts for the ac23 quisition of commercial end items. Such terms and condi24 tions shall, to the maximum extent practicable, include only

25 those contract clauses that are—
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1 (1) required to implement provisions of law ap2 plicable to commercial item acquisitions; or

3 (2) consistent with standard commercial prac4 tice.

5 (c) TERMS AND CONDITIONS FOR COMPONENTS.—Such

6 regulations shall provide that a prime contractor furnishing

7 commercial items or items other than commercial items as

8 items or components shall not be required to apply to any

9 of its divisions, subsidiaries, affiliates, subcontractors, or

10 suppliers that are furnishing commercial items as compo11 nents any clause, term, or condition except those that are—

12 (1) required to implement provisions of law ap13 plicable to subcontractors furnishing commercial

14 items; or

15 (2) determined to be consistent with standard

16 commercial practice.

17 (d) MARKET ACCEPTANCE.—The regulations pre18 scribed under subsection (a) shall provide that, under ap19 propriate conditions, the agency head may require an

20 offeror to demonstrate, as a condition for being considered

21 responsive, that the items offered meet, among other criteria,

22 market acceptance criteria, unless such item has been satis23 factorily supplied to an executive agency under current or

24 recent contracts for the same or similar requirements.
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1 (e) USE OF FIXED PRICE CONTRACTS.—The regula2 tions prescribed under subsection (a) shall include a re3 quirement that firm, fixed price contracts, or fixed price

4 contracts with economic price adjustment provisions, be

5 used for the acquisition of commercial items and compo6 nents.

7 (f) TERM OF CONTRACTS.—The regulations prescribed

8 under subsection (a) shall provide that, to the extent prac9 ticable, contracts for acquisition of commercial items shall

10 not require contract performance for a term longer than

11 customary industry practice for the item being acquired.

12 A contracting officer may include in a contract provisions

13 for economic price adjustment if an extended period of per14 formance under the contract cannot be avoided.

15 (g) CONTRACT QUALITY REQUIREMENTS.—The regula16 tions prescribed under subsection (a) shall include provi17 sions that—

18 (1) permit, to the maximum extent practicable,

19 a contractor under a commercial items acquisition to

20 use the existing quality assurance system of the con21 tractor as a substitute for compliance with an other22 wise applicable requirement for the Government to in23 spect or test the commercial items before the contrac24 tor’s tender of those items for acceptance by the Gov25 ernment;
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1 (2) require that, to the maximum extent prac2 ticable, the executive agency take advantage of war3 ranties (including extended warranties) offered by

4 offerors of commercial items and use such warranties

5 for the repair and replacement of commercial items;

6 and

7 (3) set forth guidance regarding the use of past

8 performance of commercial items and sources as a

9 factor in contract award decisions.

10 (h) DEFENSE CONTRACT CLAUSES.—

11 (1) REPEAL OF DOD AUTHORITY.—Section

12 824(b) of the National Defense Authorization Act for

13 Fiscal Years 1990 and 1991 (Public Law 101–189; 10

14 U.S.C. 2325 note) is repealed.

15 (2) SAVINGS PROVISION.—Notwithstanding sub16 sections (b) and (c), a contract of the Department of

17 Defense entered into before October 1, 1994, and a

18 subcontract entered into before such date under such

19 a contract, may include clauses developed pursuant to

20 paragraphs (2) and (3) of section 824(b) of the Na21 tional Defense Authorization Act for Fiscal Years

22 1990 and 1991 (Public Law 101–189; 10 U.S.C. 2325

23 note).
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1 Subtitle B—Armed Services

2 Acquisitions

3 SEC. 7101. ESTABLISHMENT OF NEW CHAPTER IN TITLE 10.

4 (a) ESTABLISHMENT.—Part IV of subtitle A of title

5 10, United States Code, is amended by inserting before

6 chapter 137 the following new chapter 136:

7 ‘‘CHAPTER 136—PROCUREMENT OF

8 COMMERCIAL ITEMS

‘‘Sec.

‘‘2281. Definitions.

‘‘2282. Preference for acquisition of commercial items.

‘‘2283. Exception to cost or pricing data requirement for commercial items.

‘‘2284. Principle of construction with future laws.

‘‘2285. Inapplicability of certain provisions of law.’’.

9 (b) CLERICAL AMENDMENT.—The tables of chapters at

10 the beginning of subtitle A of title 10, United States Code,

11 and the beginning of part IV of such subtitle are amended

12 by inserting before the item relating to chapter 137 the fol13 lowing new item:

‘‘136. Procurement of Commercial Items ....................................................... 2281’’.

14 SEC. 7102. DEFINITIONS.

15 Chapter 136 of title 10, United States Code, as added

16 by section 7001, is amended by adding after the table of

17 sections the following:

18 ‘‘§ 2281. Definitions

19 ‘‘In this chapter:

20 ‘‘(1) The terms ‘commercial item’,

21 ‘nondevelopmental item’, ‘component’, and ‘commer-
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1 cial component’ have the meanings provided in sec2 tion 4 of the Office of Federal Procurement Policy

3 Act.

4 ‘‘(2) The term ‘head of an agency’ means the

5 Secretary of Defense, the Secretary of Transportation,

6 and the Administrator of the National Aeronautics

7 and Space Administration.

8 ‘‘(3) The term ‘agency’ means the Department of

9 Defense, the Coast Guard, and the National Aero10 nautics and Space Administration.’’.

11 SEC. 7103. PREFERENCE FOR ACQUISITION OF COMMER12 CIAL ITEMS.

13 (a) IN GENERAL.—Chapter 136 of title 10, United

14 States Code, as amended by section 7102, is further amend15 ed by adding after section 2281 the following new section:

16 ‘‘§ 2282. Preference for acquisition of commercial

17 items

18 ‘‘(a) PREFERENCE.—The head of an agency shall en19 sure that, to the maximum extent practicable—

20 ‘‘(1) requirements of the agency with respect to

21 a procurement of supplies or services are stated in

22 terms of—

23 ‘‘(A) functions to be performed;

24 ‘‘(B) performance required; or

25 ‘‘(C) essential physical characteristics;
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1 ‘‘(2) such requirements are defined so that com2 mercial items may be procured to fulfill such require3 ments; and

4 ‘‘(3) such requirements are fulfilled through the

5 procurement of commercial items.

6 ‘‘(b) IMPLEMENTATION.—The head of an agency shall

7 ensure that procurement officials in that agency, to the

8 maximum extent practicable—

9 ‘‘(1) acquire commercial items to meet the needs

10 of the agency;

11 ‘‘(2) require prime contractors and subcontrac12 tors at all levels under the agency contracts to incor13 porate commercial items as components of items sup14 plied to the agency;

15 ‘‘(3) modify requirements in appropriate cases to

16 ensure that the requirements can be met by commer17 cial items;

18 ‘‘(4) state specifications in terms that enable and

19 encourage bidders and offerors to supply commercial

20 items;

21 ‘‘(5) revise the agency’s procurement policies,

22 practices, and procedures not required by law to re23 duce any impediments in those policies, practices,

24 and procedures to the acquisition of commercial

25 items; and
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1 ‘‘(6) require training of appropriate personnel in

2 the acquisition of commercial items.

3 ‘‘(c) EXISTING OR PRIOR SOURCES OF

4 NONDEVELOPMENTAL ITEMS.—(1) Notwithstanding sub5 section (a), an agency may, until five years after the date

6 of the enactment of the Federal Acquisition Improvement

7 Act of 1994, determine that it is in the Government’s inter8 ests to permit existing or prior sources of nondevelopmental

9 items to participate in a competition for a commercial item

10 in a case in which a nondevelopmental item will compete

11 with a commercial item under the same terms, conditions,

12 and evaluation and award criteria.

13 ‘‘(2) Nondevelopmental items furnished by an existing

14 or prior source that must be modified to meet the require15 ments of a solicitation for commercial items may be offered

16 under such a solicitation, but only in a case in which the

17 modifications—

18 ‘‘(A) are necessary to comply with the Govern19 ment’s solicitation requirements; and

20 ‘‘(B) do not significantly alter the function or es21 sential physical characteristics of the items to be sup22 plied.

23 ‘‘(3) The policies, procedures, solicitation provisions,

24 and contract clauses applicable to commercial items under

25 this chapter also shall apply to nondevelopmental items fur-
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1 nished by an existing or prior source that is permitted to

2 participate in a competition conducted under this title.

3 ‘‘(d) PRELIMINARY MARKET RESEARCH.—(1) The

4 head of an agency shall conduct market research appro5 priate to the circumstances—

6 ‘‘(A) before developing new specifications for a

7 procurement by that agency; and

8 ‘‘(B) before soliciting bids or proposals for a con9 tract in excess of the simplified acquisition threshold.

10 ‘‘(2) The head of an agency shall use the results of mar11 ket research to determine whether there are commercial

12 items available that—

13 ‘‘(A) meet the agency’s requirements;

14 ‘‘(B) could be modified to meet the agency’s re15 quirements; or

16 ‘‘(C) could meet the agency’s requirements if

17 those requirements were modified to a reasonable ex18 tent.’’.

19 (b) REPEAL OF SUPERSEDED PROVISION.—Section

20 2325 of title 10, United States Code, is repealed. The table

21 of sections at the beginning of chapter 137 of such title is

22 amended by striking out the item relating to section 2325.
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1 SEC. 7104. EXCEPTION TO COST OR PRICING DATA RE2 QUIREMENTS FOR COMMERCIAL ITEMS.

3 (a) IN GENERAL.—Chapter 136 of title 10, United

4 States Code, as amended by section 7103, is further amend5 ed by adding after section 2282 the following new section:

6 ‘‘§ 2283. Exception to cost or pricing data require7 ments for commercial items

8 ‘‘(a) EXEMPTION FROM SECTION 2306a IF PRICE

9 BASED ON ADEQUATE PRICE COMPETITION OR ESTAB10 LISHED PRICES.—In any procurement of a commercial

11 item, when the agreed-upon price of the commercial item

12 is based on adequate price competition or on established

13 catalog or market prices of items sold in sufficient quan14 tities to the general public—

15 ‘‘(1) the procurement shall be exempt from sec16 tion 2306a of this title; and

17 ‘‘(2) to the maximum extent practicable, the head

18 of the agency conducting the procurement may not re19 quire any additional information from the offeror to

20 determine price reasonableness.

21 ‘‘(b) REQUIREMENT TO DETERMINE PRICE REASON22 ABLENESS FOR NONCOMPETITIVE PROCUREMENTS.—In

23 any case in which it is not practicable to conduct a procure24 ment of a commercial item on a competitive basis and the

25 procurement is not covered by subsection (a) or by an excep26 tion in subsection (b) of section 2306a of this title, the con-
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1 tracting officer shall use price analysis to determine wheth2 er the price of the contract is fair and reasonable. If the

3 contracting officer is able to determine through price analy4 sis that the price is reasonable, the procurement shall be

5 exempt from section 2306a of this title. Price analysis

6 under this subsection shall be conducted by developing or

7 obtaining from the offeror or contractor, or from another

8 source or sources, in accordance with standards and proce9 dures set forth in Federal Acquisition Regulations, informa10 tion on prices at which the same or similar items have been

11 sold in the commercial market that is adequate for evaluat12 ing the reasonableness of the price of the contract.

13 ‘‘(c) AUTHORITY TO REQUEST COST OR PRICING DATA

14 WHEN PRICE REASONABLENESS CANNOT BE DETER15 MINED.—In any case in which a contracting officer is un16 able to determine under subsection (b) that a price is rea17 sonable, the contracting officer, with the prior approval of

18 the head of the procuring activity, may require cost or pric19 ing data under section 2306a of this title.

20 ‘‘(d) RIGHT TO AUDIT.—(1) The head of an agency

21 is authorized to audit all documentation provided by an

22 offeror under subsection (b) or (c) and all books and records

23 of the offeror directly relating to such documentation, except

24 that, if the offeror has made no representation as to the
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1 completeness of the documentation supplied, the head of the

2 agency is not authorized to audit for completeness.

3 ‘‘(2) The authority under this subsection shall expire—

4 ‘‘(A) one year after the date of commencement of

5 performance of the contract, or one year after the date

6 of commencement of performance of the modification

7 of the contract, with respect to which the information

8 was provided; or

9 ‘‘(B) on such other date agreed upon by the par10 ties at the time of contract award or contract

11 definitization.

12 ‘‘(e) LIMITATIONS ON REQUESTS FOR DATA.—The

13 Federal Acquisition Regulation shall establish reasonable

14 limitations on requests under this section for sales data re15 lating to commercial items.

16 ‘‘(f) FORM OF INFORMATION.—In conducting a price

17 analysis, or in requiring any additional information from

18 an offeror, a contracting officer may request only that infor19 mation from an offeror that is in the form regularly main20 tained by the offeror in commercial operations, adequate

21 to demonstrate the market price of the item or items, or

22 otherwise needed to establish a fair and reasonable price.

23 ‘‘(g) CONFIDENTIALITY.—All documentation received

24 from an offeror, if not otherwise in the public domain and

25 if requested by the offeror and marked as proprietary, shall
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1 be treated by the Government as confidential and exempt

2 from disclosure to the extent permitted by section 552 of

3 title 5.’’.

4 (b) CROSS REFERENCE.—Section 2306a of title 10,

5 United States Code, is amended by adding at the end the

6 following new subsection:

7 ‘‘(h) EXCEPTIONS REGARDING COMMERCIAL ITEMS.—

8 For provisions relating to exceptions for procurements of

9 commercial items, see section 2283 of this title.’’.

10 SEC. 7105. PRINCIPLE OF CONSTRUCTION WITH FUTURE

11 LAWS.

12 Chapter 136 of title 10, United States Code, as amend13 ed by section 7104, is further amended by adding after sec14 tion 2283 the following new section:

15 ‘‘§ 2284. Principle of construction with future laws

16 ‘‘A provision of law enacted after the date of the enact17 ment of the Federal Acquisition Improvement Act of 1994

18 may not be construed as applicable to purchases of commer19 cial items by an agency unless that provision of law specifi20 cally refers to this section and specifically states that such

21 provision of law modifies or supersedes a provision of this

22 chapter.
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1 SEC. 7106. INAPPLICABILITY OF CERTAIN PROVISIONS OF

2 LAW.

3 (a) INAPPLICABLE PROVISIONS.—Chapter 136 of title

4 10, United States Code, as amended by section 7105, is fur5 ther amended by adding after section 2284 the following

6 new section:

7 ‘‘§ 2285. Inapplicability of certain provisions of law

8 ‘‘(a) PROVISIONS INAPPLICABLE TO PRIME CONTRAC9 TORS.—The following provisions of law (and regulations

10 prescribed under such provisions) shall not apply to any

11 contract entered into by an agency for the procurement of

12 a commercial item:

13 ‘‘(1) Section 2306(b) of this title (relating to pro14 hibition on contingent fees).

15 ‘‘(2) Section 2320 of this title (relating to rights

16 in technical data).

17 ‘‘(3) Section 2321 of this title (relating to vali18 dation of proprietary data restrictions).

19 ‘‘(4) Section 2324 of this title (relating to allow20 able costs).

21 ‘‘(5) Section 2384(b) of this title (relating to re22 quirement to identify suppliers and sources of sup23 plies).

24 ‘‘(6) Section 2393(d) of this title (relating to

25 prohibition against doing business with certain

26 offerors or contractors).
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1 ‘‘(7) Section 2402 of this title (relating to prohi2 bition on limitation of subcontractor direct sales).

3 ‘‘(8) Section 2408(a) of this title (relating to

4 prohibition on persons convicted of defense contract5 related felonies).

6 ‘‘(9) Section 2410b of this title (relating to con7 tractor inventory accounting system standards).

8 ‘‘(10) Section 843 of Public Law 103–160 (107

9 Stat. 1720) (relating to reports of defense contractors

10 of dealings with terrorist countries).

11 ‘‘(11) Section 26 of the Office of Federal Procure12 ment Policy Act (41 U.S.C. 422) (relating to cost ac13 counting standards board).

14 ‘‘(12) Section 27(e) of the Office of Federal Pro15 curement Policy Act (41 U.S.C. 423(e)) (relating to

16 procurement integrity).

17 ‘‘(13) The Drug-Free Workplace Act of 1988

18 (subtitle D of title V of Public Law 100–690; 41

19 U.S.C. 701 et seq.).

20 ‘‘(b) PROVISIONS INAPPLICABLE TO SUBCONTRACTORS

21 AND OTHER ENTITIES.—

22 ‘‘(1) LAWS INAPPLICABLE.—The following provi23 sions of law (and regulations prescribed under such

24 provisions) shall not apply to any entity described in

25 paragraph (2):
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1 ‘‘(A) Each provision of law listed under

2 subsection (a).

3 ‘‘(B) Section 2534 of this title (relating to

4 miscellaneous limitations on procurement).

5 ‘‘(2) COVERED ENTITIES.—Paragraph (1) ap6 plies to each of the following:

7 ‘‘(A) Any division, subsidiary, or affiliate

8 of a prime contractor (other than the division,

9 subsidiary, or affiliate that is contracting with

10 the Government under the prime contract) or of

11 a subcontractor of a prime contractor, if such di12 vision, subsidiary, or affiliate is furnishing a

13 commercial item to the prime contractor or sub14 contractor for purposes of carrying out the prime

15 contract or subcontract.

16 ‘‘(B) Any subcontractor or supplier of a

17 prime contractor, if the subcontractor or supplier

18 is furnishing a commercial item to the prime

19 contractor for purposes of carrying out the prime

20 contract.’’.

21 SEC. 7107. CONFORMING AMENDMENTS RELATING TO INAP22 PLICABILITY OF CERTAIN PROVISIONS OF

23 LAW.

24 (a) INAPPLICABILITY OF REQUIREMENT FOR CON25 TRACT CLAUSE REGARDING CONTINGENT FEES.—Section
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1 2306(b) of title 10, United States Code, as amended by sec2 tion 4032(a), is further amended by inserting before the pe3 riod at the end of the sentence added by that section the

4 following: ‘‘or to a contract for the acquisition of commer5 cial items’’.

6 (b) INAPPLICABILITY OF REGULATIONS ON RIGHTS IN

7 TECHNICAL DATA.—Section 2320 of title 10, United States

8 Code, is amended by adding at the end the following new

9 subsection:

10 ‘‘(e) The regulations prescribed under subsection (a)

11 shall not apply to contracts for the purchase of commercial

12 items.’’.

13 (c) INAPPLICABILITY OF REQUIREMENT FOR VALIDA14 TION OF PROPRIETARY DATA RESTRICTIONS.—Section

15 2321(a) of title 10, United States Code, is amended by in16 serting before the period at the end the following: ‘‘, other

17 than a contract for supplies or services that are commercial

18 items’’.

19 (d) INAPPLICABILITY OF REQUIREMENT TO IDENTIFY

20 SUPPLIERS AND SOURCES OF SUPPLIES.—Paragraph (2)

21 of section 2384(b) of title 10, United States Code, is amend22 ed to read as follows:

23 ‘‘(2) The regulations prescribed pursuant to paragraph

24 (1) do not apply to a contract that requires the delivery

25 of supplies that are commercial items.’’.
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1 (e) INAPPLICABILITY OF PROHIBITION AGAINST DOING

2 BUSINESS WITH CERTAIN OFFERORS OR CONTRACTORS.—

3 Section 2393(d) of title 10, United States Code, as amended

4 by section 4032(d), is further amended by adding at the

5 end the following: ‘‘The requirement shall not apply in the

6 case of a subcontract for the acquisition of commercial

7 items.’’.

8 (f) INAPPLICABILITY OF PROHIBITION ON LIMITATION

9 OF SUBCONTRACTOR DIRECT SALES.—Section 2402 of title

10 10, United States Code, as amended by section 4032(e), is

11 further amended by adding at the end the following new

12 subsection:

13 ‘‘(d) An agreement between the contractor in a con14 tract for the acquisition of commercial items and a sub15 contractor under such contract that restricts sales by such

16 subcontractor directly to persons other than the contractor

17 may not be considered to unreasonably restrict sales by that

18 subcontractor to the United States in violation of the provi19 sion included in such contract pursuant to subsection (a)

20 if the agreement does not result in the United States being

21 treated differently with regard to the restriction than any

22 other prospective purchaser of such commercial items from

23 that subcontractor.’’.

24 (g) INAPPLICABILITY OF PROHIBITION ON PERSONS

25 CONVICTED OF DEFENSE-RELATED FELONIES.—Section
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1 2408(a) of title 10, United States Code, is amended by add2 ing at the end of paragraph (4), as added by section

3 4032(f), the following: ‘‘The term does not include a con4 tract for the purchase of commercial items.’’.

5 (h) INAPPLICABILITY OF CONTRACTOR INVENTORY AC6 COUNTING SYSTEM STANDARDS.—Section 2410b of title 10,

7 United States Code, is amended by adding after subsection

8 (b), as added by section 4032(g), the following:

9 ‘‘(c) The regulations prescribed pursuant to subsection

10 (a) shall not apply to a contract for the purchase of com11 mercial items.’’.

12 Subtitle C—Civilian Agency

13 Acquisitions

14 SEC. 7201. DEFINITIONS.

15 Title III of the Federal Property and Administrative

16 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

17 by section 1553, is further amended by adding after section

18 313 the following new section:

19 ‘‘SEC. 314. DEFINITIONS RELATING TO PROCUREMENT OF

20 COMMERCIAL ITEMS.

21 ‘‘As used in this title, the terms ‘commercial item’,

22 ‘nondevelopmental item’, ‘component’, and ‘commercial

23 component’ have the meanings provided in section 4 of the

24 Office of Federal Procurement Policy Act.’’.
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1 SEC. 7202. PREFERENCE FOR ACQUISITION OF COMMER2 CIAL ITEMS.

3 Title III of the Federal Property and Administrative

4 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

5 by section 7201, is further amended by adding after section

6 314 the following new section:

7 ‘‘SEC. 314A. PREFERENCE FOR ACQUISITION OF COMMER8 CIAL ITEMS.

9 ‘‘(a) PREFERENCE.—The head of each executive agency

10 shall ensure that, to the maximum extent practicable—

11 ‘‘(1) requirements of the agency with respect to

12 a procurement of supplies or services are stated in

13 terms of—

14 ‘‘(A) functions to be performed;

15 ‘‘(B) performance required; or

16 ‘‘(C) essential physical characteristics;

17 ‘‘(2) such requirements are defined so that com18 mercial items may be procured to fulfill such require19 ments; and

20 ‘‘(3) such requirements are fulfilled through the

21 procurement of commercial items.

22 ‘‘(b) IMPLEMENTATION.—The head of each executive

23 agency shall ensure that procurement officials in that execu24 tive agency, to the maximum extent practicable—

25 ‘‘(1) acquire commercial items to meet the needs

26 of the executive agency;
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1 ‘‘(2) require prime contractors and subcontrac2 tors at all levels under the executive agency contracts

3 to incorporate commercial items as components of

4 items supplied to the executive agency;

5 ‘‘(3) modify requirements in appropriate cases to

6 ensure that the requirements can be met by commer7 cial items;

8 ‘‘(4) state specifications in terms that enable and

9 encourage bidders and offerors to supply commercial

10 items;

11 ‘‘(5) revise the executive agency’s procurement

12 policies, practices, and procedures not required by

13 law to reduce any impediments in those policies,

14 practices, and procedures to the acquisition of com15 mercial items; and

16 ‘‘(6) require training of appropriate personnel in

17 the acquisition of commercial items.

18 ‘‘(c) EXISTING OR PRIOR SOURCES OF

19 NONDEVELOPMENTAL ITEMS.—(1) Notwithstanding sub20 section (a), the head of an executive agency may, until five

21 years after the date of the enactment of the Federal Acquisi22 tion Improvement Act of 1994, determine that it is in the

23 Government’s interests to permit existing or prior sources

24 of nondevelopmental items to participate in a competition

25 for a commercial item in a case in which a
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1 nondevelopmental item will compete with a commercial

2 item under the same terms, conditions, and evaluation and

3 award criteria.

4 ‘‘(2) Nondevelopmental items furnished by an existing

5 or prior source that must be modified to meet the require6 ments of a solicitation for commercial items may be offered

7 under such a solicitation, but only in a case in which the

8 modifications—

9 ‘‘(A) are necessary to comply with the Govern10 ment’s solicitation requirements; and

11 ‘‘(B) do not significantly alter the function or es12 sential physical characteristics of the items to be sup13 plied.

14 ‘‘(3) The policies, procedures, solicitation provisions,

15 and contract clauses applicable to commercial items under

16 this chapter also shall apply to nondevelopmental items fur17 nished by an existing or prior source that is permitted to

18 participate in a competition conducted under this title.

19 ‘‘(d) PRELIMINARY MARKET RESEARCH.—(1) The

20 head of an executive agency shall conduct market research

21 appropriate to the circumstances—

22 ‘‘(A) before developing new specifications for a

23 procurement by that executive agency; and

24 ‘‘(B) before soliciting bids or proposals for a con25 tract in excess of the simplified acquisition threshold.
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1 ‘‘(2) The head of an executive agency shall use the re2 sults of market research to determine whether there are com3 mercial items available that—

4 ‘‘(A) meet the executive agency’s requirements;

5 ‘‘(B) could be modified to meet the executive

6 agency’s requirements; or

7 ‘‘(C) could meet the executive agency’s require8 ments if those requirements were modified to a rea9 sonable extent.’’.

10 SEC. 7203. EXCEPTION TO COST OR PRICING DATA RE11 QUIREMENTS FOR COMMERCIAL ITEMS.

12 Title III of the Federal Property and Administrative

13 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

14 by section 7202, is further amended by adding after section

15 314A the following new section:

16 ‘‘SEC. 314B. EXCEPTION TO COST OR PRICING DATA RE17 QUIREMENTS FOR COMMERCIAL ITEMS.

18 ‘‘(a) EXEMPTION FROM SECTION 304B IF PRICE

19 BASED ON ADEQUATE PRICE COMPETITION OR ESTAB20 LISHED PRICES.—In any procurement of a commercial

21 item, when the agreed-upon price of the commercial item

22 is based on adequate price competition or on established

23 catalog or market prices of items sold in sufficient quan24 tities to the general public—
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1 ‘‘(1) the procurement shall be exempt from sec2 tion 304B of this title; and

3 ‘‘(2) to the maximum extent practicable, the ex4 ecutive agency may not require any additional infor5 mation from the offeror to determine price reasonable6 ness.

7 ‘‘(b) REQUIREMENT TO DETERMINE PRICE REASON8 ABLENESS FOR NONCOMPETITIVE PROCUREMENTS.—In

9 any case in which it is not practicable to conduct a procure10 ment of a commercial item on a competitive basis and the

11 procurement is not covered by subsection (a) or by an excep12 tion in subsection (b) of section 304B, the contracting officer

13 shall use price analysis to determine whether the price is

14 fair and reasonable. If the contracting officer is able to de15 termine through price analysis that the price is reasonable,

16 the procurement shall be exempt from section 304B of this

17 title. Price analysis under this section shall be conducted

18 by developing or obtaining from the offeror or contractor,

19 or from another source or sources, in accordance with stand20 ards and procedures set forth in Federal Acquisition Regu21 lations, information on prices at which the same or similar

22 items have been sold in the commercial market that is ade23 quate for evaluating the reasonableness of the price of the

24 contract.
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1 ‘‘(c) AUTHORITY TO REQUEST COST OR PRICING DATA

2 WHEN PRICE REASONABLENESS CANNOT BE DETER3 MINED.—In any case in which a contracting officer is un4 able to determine under subsection (b) that a price is rea5 sonable, the contracting officer, with the prior approval of

6 the head of the procuring activity, may require cost or pric7 ing data under section 304B.

8 ‘‘(d) RIGHT TO AUDIT.—(1) An executive agency is

9 authorized to audit all documentation provided by an

10 offeror under subsection (b) or (c) and all books and records

11 of the offeror directly relating to such documentation, except

12 that, if the offeror has made no representation as to the

13 completeness of the documentation supplied, the executive

14 agency is not authorized to audit for completeness.

15 ‘‘(2) The authority under this subsection shall expire—

16 ‘‘(A) one year after the date of commencement of

17 performance of the contract, or one year after the date

18 of commencement of performance of the modification

19 of the contract, with respect to which the information

20 was provided; or

21 ‘‘(B) on such other date agreed upon by the par22 ties at the time of contract award or contract

23 definitization.

24 ‘‘(e) LIMITATIONS ON REQUESTS FOR DATA.—The

25 Federal Acquisition Regulation shall establish reasonable
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1 limitations on requests under this section for sales data re2 lating to commercial items.

3 ‘‘(f) FORM OF INFORMATION.—In conducting a price

4 analysis, or in requiring any additional information from

5 an offeror, a contracting officer may request only that infor6 mation from an offeror that is in the form regularly main7 tained by the offeror in commercial operations, adequate

8 to demonstrate the market price of the item or items, or

9 otherwise needed to establish a fair and reasonable price.

10 ‘‘(g) CONFIDENTIALITY.—All documentation received

11 from an offeror, if not otherwise in the public domain and

12 if requested by the offeror and marked as proprietary, shall

13 be treated by the Government as confidential and exempt

14 from disclosure to the extent permitted by section 552 of

15 title 5.’’.

16 (b) CROSS REFERENCE.—Section 304B of the Federal

17 Property and Administrative Services Act of 1949, as added

18 by section 1251, is amended by adding at the end the follow19 ing new subsection:

20 ‘‘(h) EXCEPTIONS REGARDING COMMERCIAL ITEMS.—

21 For provisions relating to exceptions for procurements of

22 commercial items, see section 314B of this title.’’.
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1 SEC. 7204. PRINCIPLE OF CONSTRUCTION WITH FUTURE

2 LAWS.

3 Title III of the Federal Property and Administrative

4 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

5 by section 7203, is further amended by adding after section

6 314B the following new section:

7 ‘‘SEC. 314C. PRINCIPLE OF CONSTRUCTION WITH FUTURE

8 LAWS.

9 ‘‘A provision of law enacted after the date of the enact10 ment of the Federal Acquisition Improvement Act of 1994

11 may not be construed as applicable to purchases of commer12 cial items by an executive agency unless that provision of

13 law specifically refers to this section and specifically states

14 that such provision of law modifies or supersedes sections

15 314 through 314D of this title.’’.

16 SEC. 7205. INAPPLICABILITY OF CERTAIN PROVISIONS OF

17 LAW.

18 Title III of the Federal Property and Administrative

19 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

20 by section 7204, is further amended by adding after section

21 314C the following new section:

22 ‘‘SEC. 314D. INAPPLICABILITY OF CERTAIN PROVISIONS OF

23 LAW.

24 ‘‘(a) PROVISIONS INAPPLICABLE TO PRIME CONTRAC25 TORS.—Procurements of commercial items shall not be sub-
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1 ject to the following provisions of law (or regulations pre2 scribed under such provisions):

3 ‘‘(1) Section 303G of this Act (relating to prohi4 bition on limitation of subcontractor direct sales).

5 ‘‘(2) Section 304(a) of this Act (relating to pro6 hibition on contingent fees).

7 ‘‘(3) Section 26 of the Office of Federal Procure8 ment Policy Act (41 U.S.C. 422) (relating to cost ac9 counting standards board).

10 ‘‘(4) Section 27(e) of the Office of Federal Pro11 curement Policy Act (41 U.S.C. 423(e)) (relating to

12 procurement integrity).

13 ‘‘(5) The Drug-Free Workplace Act of 1988 (sub14 title D of title V of Public Law 100–690; 41 U.S.C.

15 701 et seq.).

16 ‘‘(b) PROVISIONS INAPPLICABLE TO SUBCONTRACTORS

17 AND OTHER ENTITIES.—

18 ‘‘(1) LAWS INAPPLICABLE.—Each provision of

19 law listed under subsection (a) (and regulations pre20 scribed under each such provision) shall not apply to

21 any entity described in paragraph (2).

22 ‘‘(2) COVERED ENTITIES.—Paragraph (1) ap23 plies to each of the following:

24 ‘‘(A) Any division, subsidiary, or affiliate

25 of a prime contractor (other than the division,
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1 subsidiary, or affiliate that is contracting with

2 the Government under the prime contract) or of

3 a subcontractor of a prime contractor, if such di4 vision, subsidiary, or affiliate is furnishing a

5 commercial item to the prime contractor or sub6 contractor for purposes of carrying out the prime

7 contract or subcontract.

8 ‘‘(B) Any subcontractor or supplier of a

9 prime contractor, if the subcontractor or supplier

10 is furnishing a commercial item to the prime

11 contractor for purposes of carrying out the prime

12 contract.

13 SEC. 7206. CONFORMING AMENDMENTS RELATING TO INAP14 PLICABILITY OF CERTAIN PROVISIONS OF

15 LAW.

16 (a) INAPPLICABILITY OF PROHIBITION ON LIMITING

17 SUBCONTRACTOR DIRECT SALES TO THE UNITED

18 STATES.—Section 303G of the Federal Property and Ad19 ministrative Services Act of 1949 (41 U.S.C. 253g), as

20 amended by section 4042(a), is further amended by adding

21 at the end the following new subsection:

22 ‘‘(d) An agreement between the contractor in a con23 tract for the acquisition of commercial items and a sub24 contractor under such contract that restricts sales by such

25 subcontractor directly to persons other than the contractor
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1 may not be considered to unreasonably restrict sales by that

2 subcontractor to the United States in violation of the provi3 sion included in such contract pursuant to subsection (a)

4 if the agreement does not result in the Federal Government

5 being treated differently with regard to the restriction than

6 any other prospective purchaser of such commercial items

7 from that subcontractor.’’.

8 (b) INAPPLICABILITY OF REQUIREMENT FOR CON9 TRACT CLAUSE REGARDING CONTINGENT FEES.—Section

10 304(a) of the Federal Property and Administrative Services

11 Act of 1949 (41 U.S.C. 254(a)), as amended by section

12 4042(b), is further amended by inserting before the period

13 at the end of the sentence added by section 4042(b) the fol14 lowing: ‘‘or to a contract for the acquisition of commercial

15 items’’.

16 Subtitle D—Acquisitions Generally

17 SEC. 7301. CONFORMING AMENDMENT RELATING TO INAP18 PLICABILITY OF CERTAIN PROVISIONS OF

19 LAW.

20 (a) COST ACCOUNTING STANDARDS BOARD.—Section

21 26(f) of the Office of Federal Procurement Policy Act (41

22 U.S.C. 422) is amended in paragraph (2) by striking out

23 ‘‘where the price negotiated’’ and all that follows through

24 ‘‘(B)’’ and inserting in lieu thereof ‘‘(A) for the procurement
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1 of commercial items, or (B) for which the price negotiated

2 is based on’’.

3 (b) CERTIFICATION REQUIREMENTS.—Subsection

4 (e)(7)(A) of section 27 of the Office of Federal Procurement

5 Policy Act (41 U.S.C. 423(e)(7)(A)), as amended by section

6 4051, is further amended by inserting before the period at

7 the end the following: ‘‘, for the procurement of goods and

8 services other than commercial items’’.

9 (c) DRUG-FREE WORKPLACE ACT OF 1988.—Section

10 5152 of the Drug-Free Workplace Act of 1988 (subtitle D

11 of title V of Public Law 100–690; 41 U.S.C. 701 et seq.),

12 as amended by section 4054, is further amended by insert13 ing after the matter inserted by such section 4057 the follow14 ing: ‘‘, other than a contract for the procurement of commer15 cial items as defined in section 4 of the Office of Federal

16 Procurement Policy Act (41 U.S.C. 403)),’’.

17 SEC. 7302. FLEXIBLE DEADLINES FOR SUBMISSION OF OF18 FERS OF COMMERCIAL ITEMS.

19 Section 18(a) of the Office of Federal Procurement Pol20 icy Act (41 U.S.C. 416(a)) is amended by adding at the

21 end the following new paragraph:

22 ‘‘(4) The Administrator shall prescribe regulations de23 fining limited circumstances in which flexible deadlines can

24 be used under paragraph (3) for the submission of bids or

25 proposals for the procurement of commercial items.’’.
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1 SEC. 7303. ADDITIONAL RESPONSIBILITIES FOR ADVO2 CATES FOR COMPETITION.

3 (a) RESPONSIBILITIES OF THE ADVOCATE FOR COM4 PETITION.—Section 20(c) of the Office of Federal Procure5 ment Policy Act (41 U.S.C. 418(c)) is amended to read as

6 follows:

7 ‘‘(c) The advocate for competition for each procuring

8 activity shall be responsible for promoting full and open

9 competition, promoting the acquisition of commercial

10 items, and challenging barriers to such acquisition, includ11 ing such barriers as unnecessarily restrictive statements of

12 need, unnecessarily detailed specifications, and unneces13 sarily burdensome contract clauses.’’.

14 (b) REPEAL OF SUPERSEDED PROVISION.—Section 28

15 of such Act (41 U.S.C. 424) is repealed.

16 SEC. 7304. PROVISIONS NOT AFFECTED.

17 Nothing in this title shall be construed as modifying

18 or superseding, or as intended to impair or restrict, au19 thorities or responsibilities under—

20 (1) section 315 of the Federal Property and Ad21 ministrative Services Act of 1949 or section 2323 of

22 title 10, United States Code;

23 (2) section 111 of the Federal Property and Ad24 ministrative Services Act of 1949 (40 U.S.C. 759),

25 popularly referred to as the ‘‘Brooks Automatic Data

26 Processing Act’’;
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1 (3) title IX of the Federal Property and Admin2 istrative Services Act of 1949 (40 U.S.C. 541 et seq.),

3 popularly referred to as the ‘‘Brooks Architect-Engi4 neers Act’’;

5 (4) section 8(a) of the Small Business Act (15

6 U.S.C. 637(a)) or any other provision of that Act; or

7 (5) the Act of June 25, 1938 (41 U.S.C. 46–48c),

8 that was revised and reenacted in the Act of June 23,

9 1971 (85 Stat. 77), commonly referred to as the ‘‘Jav10 its-Wagner-O’Day Act’’.

11 SEC. 7305. COMPTROLLER GENERAL REVIEW OF FEDERAL

12 GOVERNMENT USE OF MARKET RESEARCH.

13 (a) REPORT REQUIRED.—Not later than 2 years after

14 the date of the enactment of this Act, the Comptroller Gen15 eral of the United States shall submit to the Congress a

16 report on the use of market research by the Federal Govern17 ment in support of the procurement of commercial items

18 and nondevelopmental items.

19 (b) CONTENT OF REPORT.—The report shall include

20 the following:

21 (1) A review of existing Federal Government

22 market research efforts to gather data concerning

23 commercial and other nondevelopmental items.

24 (2) A review of the feasibility of creating a Gov25 ernment-wide data base for storing, retrieving, and
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1 analyzing market data, including use of existing Fed2 eral Government resources.

3 (3) Any recommendations for changes in law or

4 regulations that the Comptroller General considers

5 appropriate.

6 TITLE VIII—MISCELLANEOUS

7 PROVISIONS

8 SEC. 8001. TEST PROGRAM.

9 (a) IN GENERAL.—The Administrator for Federal Pro10 curement Policy (in this section referred to as the ‘‘Admin11 istrator’’) may conduct a program of tests of alternative

12 and innovative procurement procedures. To the extent con13 sistent with this section, such program shall be conducted

14 consistent with section 15 of the Office of Federal Procure15 ment Policy Act (41 U.S.C. 413). No more than 6 such tests

16 shall be conducted under this authority.

17 (b) DESIGNATION OF AGENCIES.—Each test conducted

18 pursuant to subsection (a) shall be limited to not more than

19 2 specific contracting activities in an agency designated by

20 the Administrator. Each agency so designated shall select

21 the contracting activities participating in the test with the

22 approval of the Administrator and shall designate a pro23 curement testing official who shall be responsible for the

24 conduct and evaluation of tests within that agency.
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1 (c) TEST REQUIREMENTS.—Tests conducted under

2 subsection (a)—

3 (1) shall be developed and structured by the Ad4 ministrator or by the agency senior procurement ex5 ecutives designated pursuant to section 16(3) of the

6 Office of Federal Procurement Policy Act in close co7 ordination with the Administrator;

8 (2) shall be for a period of not greater than 4

9 years;

10 (3) shall be limited to specific programs of agen11 cies or specific acquisitions;

12 (4) may not include any test with a total esti13 mated life-cycle cost to the Federal Government great14 er than $100,000,000;

15 (5) shall include—

16 (A) a test by the National Aeronautics and

17 Space Administration of simplified procurement

18 procedures for acquisitions with an estimated

19 annual total obligation of funds of $500,000 or

20 less;

21 (B) a test by the General Services Adminis22 tration of expedited methods for procuring auto23 matic data processing equipment commodities;

24 and
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1 (C) a test by at least one agency of stream2 lined procedures for competition among inter3 ested sources participating in the tailoring of a

4 solicitation for the purchase of commercial prod5 ucts; and

6 (6) shall not include any procurement the cost of

7 which is expected to exceed $5,000,000 (including op8 tions).

9 (d) LIMITATION ON TOTAL VALUE OF CONTRACTS

10 UNDER PROGRAM.—

11 (1) LIMITATION.—The Administrator shall en12 sure that the total amount obligated under contracts

13 awarded pursuant to the program under this section

14 does not exceed $600,000,000.

15 (2) MONITORING.—The Administrator shall

16 monitor the value of contracts awarded pursuant to

17 the program under this section.

18 (3) PROHIBITION ON AWARDS IN EXCESS OF

19 LIMIT.—No contract may be awarded under the pro20 gram under this section if the award of the contract

21 would result in obligation of more than $600,000,000

22 under contracts under this section.

23 (e) PROCEDURES AUTHORIZED.—Tests conducted

24 under this section may include any of the following proce25 dures:
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1 (1) Publication of agency needs before drafting of

2 a solicitation.

3 (2) Screening of sources and competition among

4 capable vendors.

5 (3) Issuance of draft solicitations for comment.

6 (4) Streamlined solicitations, with a minimized

7 number of evaluation factors and information re8 quired from vendors, abbreviated periods for submis9 sion of offers, and page limitations on offers.

10 (5) Limitation of source selection factors to—

11 (A) cost to the Federal Government;

12 (B) past experience; and

13 (C) quality of the contents of the offer.

14 (6) Evaluation of proposals by small teams of

15 highly qualified people, limited to 30 days.

16 (7) Competition among sources of preevaluated

17 products.

18 (8) Alternative notice and publication require19 ments.

20 (9) A process in which—

21 (A) the competitive process is initiated by a

22 notice in the Commerce Business Daily synop23 sizing the needs of the executive agency conduct24 ing the test, in functional and performance
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1 terms, with other specifications provided for

2 guidance only;

3 (B) the notice invites interested sources to

4 submit information or samples showing their

5 product’s suitability for those needs (with price

6 quotations) or, if appropriate, showing the

7 sources’ technical capability, past performance,

8 product supportability, or other qualifications

9 (with appropriate consideration to rates and

10 other cost-related factors);

11 (C) contracting officials develop a request

12 for proposals (including appropriate specifica13 tions and evaluation criteria) after reviewing the

14 submittals made by interested sources and, if the

15 officials determine necessary, after consultation

16 with those sources; and

17 (D) the contract is awarded after a stream18 lined competition limited to all sources that

19 timely provided product information in response

20 to the notice or, if appropriate, to those sources

21 determined most capable based on those quali22 fication-based factors included in an invitation

23 to submit information pursuant to subparagraph

24 (B).
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1 (f) TEST PLAN.—Not later than 60 days before imple2 menting any test program under this section, the Adminis3 trator shall—

4 (1) provide a detailed test plan, including lists

5 of any regulations that are to be waived, and any

6 written determination under subsection (g)(1)(B) to

7 the Committee on Government Operations of the

8 House of Representatives and the Committee on Gov9 ernmental Affairs of the Senate;

10 (2) provide a copy of the plan to the appropriate

11 authorizing committees of the House of Representa12 tives and the Senate; and

13 (3) publish the plan in the Federal Register and

14 provide an opportunity for public comment.

15 (g) WAIVER OF PROCUREMENT REGULATIONS.—

16 (1) IN GENERAL.—For purposes of a test con17 ducted under subsection (a), the Administrator may

18 waive—

19 (A) any provision of the Federal Acquisi20 tion Regulation that is not required by statute;

21 and

22 (B) any provision of the Federal Acquisi23 tion Regulation that is required by a provision

24 of law described in paragraph (2), the waiver of

25 which the Administrator determines in writing
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1 to be necessary to conduct any test of any of the

2 9 procedures described in subsection (e).

3 (2) PROVISIONS OF LAW DESCRIBED.—The pro4 visions of law referred to in paragraph (1) are the fol5 lowing:

6 (A) Section 2304 of title 10, United States

7 Code.

8 (B) Section 2305 of title 10, United States

9 Code.

10 (C) Section 2319 of title 10, United States

11 Code.

12 (D) Section 3709 of the Revised Statutes

13 (41 U.S.C. 5).

14 (E) Section 3710 of the Revised Statutes

15 (41 U.S.C. 8).

16 (F) Section 3735 of the Revised Statutes (41

17 U.S.C. 13).

18 (G) Subsections (e), (f), and (g) of section

19 8 of the Small Business Act (15 U.S.C. 637).

20 (H) Section 310 of the Federal Property

21 and Administrative Services Act of 1949 (41

22 U.S.C. 260).

23 (I) Section 303 of the Federal Property and

24 Administrative Services Act of 1949 (41 U.S.C.

25 253).
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1 (J) Section 303A of the Federal Property

2 and Administrative Services Act of 1949 (41

3 U.S.C. 253a).

4 (K) Section 303B of the Federal Property

5 and Administrative Services Act of 1949 (41

6 U.S.C. 253b).

7 (L) Section 303C of the Federal Property

8 and Administrative Services Act of 1949 (41

9 U.S.C. 253c).

10 (M) Section 4(6) of the Office of Federal

11 Procurement Policy Act (41 U.S.C. 403(6)).

12 (N) Section 18 of the Office of Federal Pro13 curement Policy Act (41 U.S.C. 416).

14 (3) PROPOSAL FOR ADDITIONAL WAIVER.—If the

15 Administrator determines that the conduct of a test

16 requires the waiver of a law not listed in paragraph

17 (2) or requires approval of an estimated dollar

18 amount not permitted under subsection (c)(4), the Ad19 ministrator may propose legislation to authorize the

20 waiver or grant the approval. Before proposing such

21 legislation, the Administrator may provide and pub22 lish a test plan as described in subsection (f). If Con23 gress does not authorize the waiver or grant the ap24 proval within 120 days after the date of receipt of the

25 proposal, the proposal shall be deemed to be with-
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1 drawn. A proposal not approved within such 120

2 days may be resubmitted to Congress under this para3 graph at any time.

4 (h) REPORTS AND REVIEWS.—

5 (1) ADMINISTRATOR.—The Administrator shall

6 report to the Congress on the results of each test con7 ducted under subsection (a).

8 (2) COMPTROLLER GENERAL.—The Comptroller

9 General of the United States shall review each test

10 conducted under subsection (a) and report to the Con11 gress on each test and shall report annually to the

12 Congress on the conduct of and results of all tests con13 ducted under subsection (a).

14 (i) EXPIRATION OF AUTHORITY.—The authority to

15 conduct tests under this section and to award contracts

16 under such tests shall expire on October 1, 1998. Contracts

17 entered into before October 1, 1998, pursuant to a test shall

18 remain in effect, notwithstanding the expiration of the au19 thority to conduct the test under this section.

20 (j) FEDERAL AVIATION ADMINISTRATION ACQUISITION

21 PILOT PROGRAM.—(1) The Administrator shall delegate to

22 the Secretary of Transportation authority to conduct a test

23 of alternative and innovative procurement procedures in

24 carrying out acquisitions for one of the modernization pro-
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1 grams under the Airway Capital Investment Plan prepared

2 pursuant to section 44501(b) of title 49, United States Code.

3 (2) The authority delegated under paragraph (1) shall

4 include authority for the Secretary of Transportation—

5 (A) to apply any amendment or repeal of a pro6 vision of law made in this Act to the pilot program

7 before the effective date of such amendment or repeal;

8 and

9 (B) to apply to a procurement of noncommercial

10 items under such program—

11 (i) any authority provided in this Act (or

12 in an amendment made by a provision of this

13 Act) to waive a provision of law in the case of

14 commercial items, and

15 (ii) any exception applicable under this Act

16 (or an amendment made by a provision of this

17 Act) in the case of commercial items,

18 before the effective date of such provision (or amend19 ment) to the extent that the Secretary determines nec20 essary to test the application of such waiver or excep21 tion to procurements of noncommercial items.

22 (3) Paragraph (2) applies with respect to—

23 (A) a contract that is awarded or modified after

24 the date occurring 45 days after the date of the enact25 ment of this Act; and
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1 (B) a contract that is awarded before such date

2 and is to be performed (or may be performed), in

3 whole or in part, after such date.

4 (4) The Administrator may use the waiver authority

5 provided under subsection (g) to waive the applicability of

6 any provision referred to in paragraph (1) of that sub7 section to the program designated by the Secretary of

8 Transportation under this subsection.

9 (k) DEPARTMENT OF DEFENSE ACQUISITION PILOT

10 PROGRAMS.—

11 (1) IN GENERAL.—The Secretary of Defense is

12 authorized to designate the following defense acquisi13 tion programs for participation in the defense acqui14 sition pilot program authorized by section 809 of the

15 National Defense Authorization Act for Fiscal Year

16 1991 (10 U.S.C. 2430 note):

17 (A) FIRE SUPPORT COMBINED ARMS TAC18 TICAL TRAINER (FSCATT).—All contracts directly

19 relating to the procurement of a training simula20 tion system, including related hardware, soft21 ware, and subsystems, to perform collective

22 training of field artillery gunnery teams, with

23 development of software as required to generate

24 the training exercises.
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1 (B) JOINT DIRECT ATTACK MUNITION (JDAM

2 I).—All contracts directly relating to the develop3 ment and procurement of a strap-on guidance

4 kit, using an inertially guided, Global Position5 ing System updated guidance kit to enhance the

6 delivery accuracy of 1000-pound and 2000-

7 pound bombs in inventory.

8 (C) COMMERCIAL-DERIVATIVE AIRCRAFT (CDA).—

9 (i) All contracts related to acquisition

10 or upgrading of commercial-derivative air11 craft for use in meeting future Air Force

12 airlift, tanker, and airborne warning and

13 control system requirements.

14 (ii) For purposes of this subparagraph,

15 the term ‘‘commercial-derivative aircraft’’

16 means any of the following:

17 (I) Any aircraft that is of a type

18 customarily used in the course of nor19 mal business operations for other than

20 Federal Government purposes, that has

21 been issued a type certificate by the

22 Administrator of the Federal Aviation

23 Administration, and that has been sold

24 or leased for use in the commercial

25 marketplace or that has been offered for
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1 sale or lease for use in the commercial

2 marketplace.

3 (II) Any aircraft that, but for

4 modifications of a type customarily

5 available in the commercial market6 place, or minor modifications made to

7 meet Federal Government require8 ments, would satisfy the criteria in

9 subclause (I).

10 (D) COMMERCIAL-DERIVATIVE ENGINE.—

11 The commercial derivative engine program with

12 respect to all contracts directly related to the ac13 quisition of (i) commercially derived engines (in14 cluding spare engines), logistics support equip15 ment, technical orders, management data, and

16 initial spare parts for use in supporting the pur17 chase of commercial-derivative aircraft to meet

18 future Air Force airlift and tanker requirements,

19 including engine replacement and upgrades.

20 (2) CONDUCT OF DEFENSE ACQUISITION PRO21 GRAMS.—In the case of each defense acquisition pro22 gram designated under paragraph (1) for participa23 tion in the Defense Acquisition Pilot Program, the

24 Secretary of Defense shall—
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1 (A) develop guidelines and procedures for

2 carrying out the program and the criteria to be

3 used in measuring the success of the program;

4 (B) evaluate the potential costs and benefits

5 which may be derived from the innovative pro6 curement methods and procedures tested under

7 the program; and

8 (C) develop the methods to be used to ana9 lyze the results of the program.

10 (3) SPECIAL AUTHORITY.—The authority dele11 gated under paragraph (1) may include authority for

12 the Secretary of Defense—

13 (A) to apply any amendment or repeal of a

14 provision of law made in this Act to the pilot

15 programs before the effective date of such amend16 ment or repeal; and

17 (B) to apply to a procurement of non18 commercial items under such programs—

19 (i) any authority provided in such Act

20 (or in an amendment made by a provision

21 of such Act) to waive a provision of law in

22 the case of commercial items, and

23 (ii) any exception applicable under

24 such Act (or an amendment made by a pro-
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1 vision of such Act) in the case of commer2 cial items,

3 before the effective date of such provision (or

4 amendment) to the extent that the Secretary de5 termines necessary to test the application of such

6 waiver or exception to procurements of non7 commercial items.

8 (4) APPLICABILITY.—(A) Paragraph (3) applies

9 with respect to—

10 (i) a contract that is awarded or modified

11 during the period described in subparagraph

12 (B); and

13 (ii) a contract that is awarded before the be14 ginning of such period and is to be performed

15 (or may be performed), in whole or in part, dur16 ing such period.

17 (B) The period referred to in subparagraph (A)

18 is the period that begins 45 days after the date of the

19 enactment of this Act and ends on September 30,

20 1998.

21 SEC. 8002. STUDY OF PARTICIPATION BY CERTAIN SMALL

22 BUSINESSES IN FEDERAL PROCUREMENT.

23 (a) STUDY.—The Administrator for Federal Procure24 ment Policy shall conduct a study of—
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1 (1) the degree of participation by small busi2 nesses owned and controlled by socially and economi3 cally disadvantaged individuals in procurements con4 ducted by executive agencies, other than agencies in

5 the Department of Defense; and

6 (2) the extent of compliance by those executive

7 agencies with the goals for participation by such busi8 nesses required by Office of Federal Procurement Pol9 icy policy letter 91–1, relating to Government-wide

10 small business and small disadvantaged business

11 goals for procurement contracts.

12 (b) REPORT.—Not later than 6 months after the date

13 of the enactment of this Act, the Administrator for Federal

14 Procurement Policy shall submit a report on the study re15 quired under subsection (a) to the Committee on Govern16 ment Operations and the Committee on Small Business of

17 the House of Representatives, and to the Committee on Gov18 ernmental Affairs and the Committee on Small Business

19 of the Senate. The report shall include recommendations to

20 facilitate the provision of authority to executive agencies,

21 other than agencies in the Department of Defense, to con22 duct procurement set asides for small businesses owned and

23 controlled by socially and economically disadvantaged indi24 viduals, and on improved outreach programs to increase the
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1 participation by such businesses in procurements conducted

2 by those executive agencies.

3 (b) EXTENSION OF DEFENSE CONTRACT GOAL TO

4 COAST GUARD AND NASA.—Section 2323 of title 10, Unit5 ed States Code, is amended to read as follows:

6 ‘‘§ 2323. Contract goal for small disadvantaged busi7 nesses and certain institutions of higher

8 education

9 ‘‘(a) GOAL.—(1) Except as provided in subsection (d),

10 a goal of 5 percent of the amount described in subsection

11 (b) shall be the objective of the Department of Defense, the

12 Coast Guard, and the National Aeronautics and Space Ad13 ministration in each of fiscal years 1987 through 2000 for

14 the total combined amount obligated for contracts and sub15 contracts entered into with—

16 ‘‘(A) small business concerns, including mass

17 media and advertising firms, owned and controlled by

18 socially and economically disadvantaged individuals

19 (as such term is used in section 8(d) of the Small

20 Business Act (15 U.S.C. 637(d)) and regulations is21 sued under that section), the majority of the earnings

22 of which directly accrue to such individuals;

23 ‘‘(B) historically Black colleges and universities;

24 and
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1 ‘‘(C) minority institutions (as defined in para2 graphs (3), (4), and (5) of section 312(b) of the High3 er Education Act of 1965 (20 U.S.C. 1058)), includ4 ing any nonprofit research institution that was an

5 integral part of a historically Black college or univer6 sity before November 14, 1986.

7 ‘‘(2) The head of the agency shall establish a specific

8 goal within the overall 5 percent goal for the award of

9 prime contracts and subcontracts to historically Black col10 leges and universities and minority institutions in order

11 to increase the participation of such colleges and univer12 sities in the program provided for by this section.

13 ‘‘(3) The Federal Acquisition Regulation (issued under

14 section 25(c) of the Office of Federal Procurement Policy

15 Act (41 U.S.C. 421(c)) shall provide procedures or guide16 lines for contracting officers to set goals which agency prime

17 contractors that are required to submit subcontracting

18 plans under section 8(d)(4)(B) of the Small Business Act

19 (15 U.S.C. 637(d)(4)(B)) in furtherance of the agency’s pro20 gram to meet the 5 percent goal specified in paragraph (1)

21 should meet in awarding subcontracts, including sub22 contracts to minority-owned media, to entities described in

23 that paragraph.

24 ‘‘(b) AMOUNT.—
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1 ‘‘(1) DEPARTMENT OF DEFENSE.—With respect

2 to the Department of Defense, the requirements of sub3 section (a) for any fiscal year apply to the combined

4 total of the following amounts:

5 ‘‘(A) Funds obligated for contracts entered

6 into with the Department of Defense for such fis7 cal year for procurement.

8 ‘‘(B) Funds obligated for contracts entered

9 into with the Department of Defense for such fis10 cal year for research, development, test, and eval11 uation.

12 ‘‘(C) Funds obligated for contracts entered

13 into with the Department of Defense for such fis14 cal year for military construction.

15 ‘‘(D) Funds obligated for contracts entered

16 into with the Department of Defense for oper17 ation and maintenance.

18 ‘‘(2) COAST GUARD.—With respect to the Coast

19 Guard, the requirements of subsection (a) for any fis20 cal year apply to the total value of all prime contract

21 and subcontract awards entered into by the Coast

22 Guard for such fiscal year.

23 ‘‘(3) NATIONAL AERONAUTICS AND SPACE ADMIN24 ISTRATION.—With respect to the National Aeronautics

25 and Space Administration, the requirements of sub-
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1 section (a) for any fiscal year apply to the total value

2 of all prime contract and subcontract awards entered

3 into by the National Aeronautics and Space Adminis4 tration for such fiscal year.

5 ‘‘(c) TYPES OF ASSISTANCE.—(1) To attain the goal

6 specified in subsection (a)(1), the head of the agency shall

7 provide technical assistance to the entities referred to in

8 that subsection and, in the case of historically Black colleges

9 and universities and minority institutions, shall also pro10 vide infrastructure assistance.

11 ‘‘(2) Technical assistance provided under this section

12 shall include information about the program, advice about

13 agency procurement procedures, instruction in preparation

14 of proposals, and other such assistance as the agency head

15 considers appropriate. If the resources of the agency are in16 adequate to provide such assistance, the agency head may

17 enter into contracts with minority private sector entities

18 with experience and expertise in the design, development,

19 and delivery of technical assistance services to eligible indi20 viduals, business firms and institutions, acquisition agen21 cies, and prime contractors. Agency contracts with such en22 tities shall be awarded annually, based upon, among other

23 things, the number of minority small business concerns, his24 torically Black colleges and universities, and minority in25 stitutions that each such entity brings into the program.
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1 ‘‘(3) Infrastructure assistance provided by the Depart2 ment of Defense under this section to historically Black col3 leges and universities and to minority institutions may in4 clude programs to do the following:

5 ‘‘(A) Establish and enhance undergraduate,

6 graduate, and doctoral programs in scientific dis7 ciplines critical to the national security functions of

8 the Department of Defense.

9 ‘‘(B) Make Department of Defense personnel

10 available to advise and assist faculty at such colleges

11 and universities in the performance of defense re12 search and in scientific disciplines critical to the na13 tional security functions of the Department of De14 fense.

15 ‘‘(C) Establish partnerships between defense lab16 oratories and historically Black colleges and univer17 sities and minority institutions for the purpose of

18 training students in scientific disciplines critical to

19 the national security functions of the Department of

20 Defense.

21 ‘‘(D) Award scholarships, fellowships, and the es22 tablishment of cooperative work-education programs

23 in scientific disciplines critical to the national secu24 rity functions of the Department of Defense.
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1 ‘‘(E) Attract and retain faculty involved in sci2 entific disciplines critical to the national security

3 functions of the Department of Defense.

4 ‘‘(F) Equip and renovate laboratories for the

5 performance of defense research.

6 ‘‘(G) Expand and equip Reserve Officer Train7 ing Corps activities devoted to scientific disciplines

8 critical to the national security functions of the De9 partment of Defense.

10 ‘‘(H) Provide other assistance as the Secretary

11 determines appropriate to strengthen scientific dis12 ciplines critical to the national security functions of

13 the Department of Defense or the college infrastruc14 ture to support the performance of defense research.

15 ‘‘(4) The head of the agency shall, to the maximum

16 extent practical, carry out programs under this section at

17 colleges, universities, and institutions that agree to bear a

18 substantial portion of the cost associated with the programs.

19 ‘‘(d) APPLICABILITY.—Subsection (a) does not apply to

20 the Department of Defense—

21 ‘‘(1) to the extent to which the Secretary of De22 fense determines that compelling national security

23 considerations require otherwise; and

24 ‘‘(2) if the Secretary notifies Congress of such de25 termination and the reasons for such determination.
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1 ‘‘(e) COMPETITIVE PROCEDURES AND ADVANCE PAY2 MENTS.—To attain the goal of subsection (a):

3 ‘‘(1)(A) The head of the agency shall—

4 ‘‘(i) ensure that substantial progress is

5 made in increasing awards of agency contracts

6 to entities described in subsection (a)(1);

7 ‘‘(ii) exercise his utmost authority, resource8 fulness, and diligence;

9 ‘‘(iii) in the case of the Department of De10 fense, actively monitor and assess the progress of

11 the military departments, Defense Agencies, and

12 prime contractors of the Department of Defense

13 in attaining such goal; and

14 ‘‘(iv) in the case of the Coast Guard and the

15 National Aeronautics and Space Administration,

16 actively monitor and assess the progress of the

17 prime contractors of the agency in attaining

18 such goal.

19 ‘‘(B) In making the assessment under clauses

20 (iii) and (iv) of subparagraph (A), the agency head

21 shall evaluate the extent to which use of the authority

22 provided in paragraphs (2) and (3) and compliance

23 with the requirement in paragraph (4) is effective for

24 facilitating the attainment of the goal.
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1 ‘‘(2) To the extent practicable and when nec2 essary to facilitate achievement of the 5 percent goal

3 described in subsection (a), the agency head shall

4 make advance payments under section 2307 of this

5 title to contractors described in subsection (a). The

6 Federal Acquisition Regulation shall provide guid7 ance to contracting officers for making advance pay8 ments to entities described in subsection (a)(1) under

9 such section.

10 ‘‘(3) To the extent practicable and when nec11 essary to facilitate achievement of the 5 percent goal

12 described in subsection (a), the agency head may

13 enter into contracts using less than full and open

14 competitive procedures (including awards under sec15 tion 8(a) of the Small Business Act) and partial set

16 asides for entities described in subsection (a)(1), but

17 shall pay a price not exceeding fair market cost by

18 more than 10 percent in payment per contract to con19 tractors or subcontractors described in subsection (a).

20 The agency head shall adjust the percentage specified

21 in the preceding sentence for any industry category if

22 available information clearly indicates that

23 nondisadvantaged small business concerns in such in24 dustry category are generally being denied a reason25 able opportunity to compete for contracts because of
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1 the use of that percentage in the application of this

2 paragraph.

3 ‘‘(4) To the extent practicable, the agency head

4 shall maximize the number of minority small business

5 concerns, historically Black colleges and universities,

6 and minority institutions participating in the pro7 gram.

8 ‘‘(5) The agency head shall prescribe regulations

9 which provide for the following:

10 ‘‘(A) Procedures or guidance for contracting

11 officers to provide incentives for prime contrac12 tors referred to in subsection (a)(3) to increase

13 subcontractor awards to entities described in

14 subsection (a)(1).

15 ‘‘(B) A requirement that contracting officers

16 emphasize the award of contracts to entities de17 scribed in subsection (a)(1) in all industry cat18 egories, including those categories in which such

19 entities have not traditionally dominated.

20 ‘‘(C) Guidance to agency personnel on the

21 relationship among the following programs:

22 ‘‘(i) The program implementing this

23 section.
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1 ‘‘(ii) The program established under

2 section 8(a) of the Small Business Act (15

3 U.S.C. 637(a)).

4 ‘‘(iii) The small business set-aside pro5 gram established under section 15(a) of the

6 Small Business Act (15 U.S.C. 644(a)).

7 ‘‘(D) With respect to an agency procure8 ment which is reasonably likely to be set aside

9 for entities described in subsection (a)(1), a re10 quirement that (to the maximum extent prac11 ticable) the procurement be designated as such a

12 set-aside before the solicitation for the procure13 ment is issued.

14 ‘‘(E) Policies and procedures which, to the

15 maximum extent practicable, will ensure that

16 current levels in the number or dollar value of

17 contracts awarded under the program established

18 under section 8(a) of the Small Business Act (15

19 U.S.C. 637(a)) and under the small business set20 aside program established under section 15(a) of

21 the Small Business Act (15 U.S.C. 644(a)) are

22 maintained and that every effort is made to pro23 vide new opportunities for contract awards to el24 igible entities, in order to meet the goal of sub25 section (a).
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1 ‘‘(F) Implementation of this section in a

2 manner which will not alter the procurement

3 process under the program established under sec4 tion 8(a) of the Small Business Act (15 U.S.C.

5 637(a)).

6 ‘‘(G) A requirement that one factor used in

7 evaluating the performance of a contracting offi8 cer be the ability of the officer to increase con9 tract awards to entities described in subsection

10 (a)(1).

11 ‘‘(H) Increased technical assistance to enti12 ties described in subsection (a)(1).

13 ‘‘(f) PENALTIES AND REGULATIONS RELATING TO STA14 TUS.—(1) Whoever for the purpose of securing a contract

15 or subcontract under subsection (a) misrepresents the status

16 of any concern or person as a small business concern owned

17 and controlled by a minority (as described in subsection

18 (a)), shall be punished by imprisonment for not more than

19 one year, or a fine under title 18, or both.

20 ‘‘(2) The Federal Acquisition Regulation shall prohibit

21 awarding a contract under this section to an entity de22 scribed in subsection (a)(1) unless the entity agrees to com23 ply with the requirements of section 15(o)(1) of the Small

24 Business Act (15 U.S.C. 644(o)(1)).
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1 ‘‘(g) INDUSTRY CATEGORIES.—(1) To the maximum

2 extent practicable, the head of the agency shall—

3 ‘‘(A) ensure that no particular industry category

4 bears a disproportionate share of the contracts award5 ed to attain the goal established by subsection (a);

6 and

7 ‘‘(B) ensure that contracts awarded to attain the

8 goal established by subsection (a) are made across the

9 broadest possible range of industry categories.

10 ‘‘(2) Under procedures prescribed by the head of the

11 agency, a person may request the Secretary to determine

12 whether the use of small disadvantaged business set asides

13 by a contracting activity of the agency has caused a par14 ticular industry category to bear a disproportionate share

15 of the contracts awarded to attain the goal established for

16 that contracting activity for the purposes of this section.

17 Upon making a determination that a particular industry

18 category is bearing a disproportionate share, the agency

19 head shall take appropriate actions to limit the contracting

20 activity’s use of set asides in awarding contracts in that

21 particular industry category.

22 ‘‘(h) COMPLIANCE WITH SUBCONTRACTING PLAN RE23 QUIREMENTS.—(1) The Federal Acquisition Regulation

24 shall contain regulations to ensure that potential contrac25 tors submitting sealed bids or competitive proposals to the
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1 agency for procurement contracts to be awarded under the

2 program provided for by this section are complying with

3 applicable subcontracting plan requirements of section 8(d)

4 of the Small Business Act (15 U.S.C. 637(d)).

5 ‘‘(2) The regulations required by paragraph (1) shall

6 ensure that, with respect to a sealed bid or competitive pro7 posal for which the bidder or offeror is required to negotiate

8 or submit a subcontracting plan under section 8(d) of the

9 Small Business Act (15 U.S.C. 637(d)), the subcontracting

10 plan shall be a factor in evaluating the bid or proposal.

11 ‘‘(i) ANNUAL REPORT.—(1) Not later than December

12 15 of each year, the head of the agency shall submit to Con13 gress a report on the progress of the agency toward attain14 ing the goal of subsection (a) during the preceding fiscal

15 year.

16 ‘‘(2) The report required under paragraph (1) shall in17 clude the following:

18 ‘‘(A) A full explanation of any progress toward

19 attaining the goal of subsection (a).

20 ‘‘(B) A plan to achieve the goal, if necessary.

21 ‘‘(3) The report required under paragraph (1) shall

22 also include the following:

23 ‘‘(A) The aggregate differential between the fair

24 market price of all contracts awarded pursuant to

25 subsection (e)(3) and the estimated fair market price
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1 of all such contracts had such contracts been entered

2 into using full and open competitive procedures.

3 ‘‘(B) An analysis of the impact that subsection

4 (a) shall have on the ability of small business con5 cerns not owned and controlled by socially and eco6 nomically disadvantaged individuals to compete for

7 contracts with the agency.

8 ‘‘(C) A description of the percentage of contracts

9 (actions), the total dollar amount (size of action), and

10 the number of different entities relative to the attain11 ment of the goal of subsection (a), separately for

12 Black Americans, Native Americans, Hispanic Amer13 icans, Asian Pacific Americans, and other minorities.

14 ‘‘(j) DEFINITIONS.—In this section:

15 ‘‘(1) The term ‘agency’ means the Department of

16 Defense, the Coast Guard, and the National Aero17 nautics and Space Administration.

18 ‘‘(2) The term ‘head of an agency’ means the

19 Secretary of Defense, the Secretary of Transportation,

20 and the Administrator of the National Aeronautics

21 and Space Administration.’’.

22 SEC. 8004. EDUCATION AND TRAINING.

23 Section 6(d)(5) of the Office of Federal Procurement

24 Policy Act (41 U.S.C. 405(d)(5)) is amended—
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1 (1) by striking out ‘‘and’’ at the end of subpara2 graph (A);

3 (2) by striking out the semicolon at the end of

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

5 and’’; and

6 (3) by adding at the end the following new sub7 paragraph:

8 ‘‘(C) establish policies and procedures for

9 the establishment and implementation of edu10 cation and training programs authorized by this

11 Act, including the establishment and implemen12 tation of training, in conjunction with the Gen13 eral Services Administration, for critical pro14 curement personnel designed to increase the par15 ticipation of small business concerns owned and

16 controlled by socially and economically dis17 advantaged individuals, women, and other mi18 norities in procurement activities conducted by

19 an executive agency.’’.

20 SEC. 8005. DEPARTMENT OF DEFENSE ACQUISITION OF IN21 TELLECTUAL PROPERTY RIGHTS.

22 Section 2386 of title 10, United States Code, is amend23 ed by striking out paragraphs (3) and (4) and inserting

24 in lieu thereof the following:

25 ‘‘(3) Technical data and computer software.
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1 ‘‘(4) Releases for past infringement of patents or

2 copyrights or for unauthorized use of technical data

3 or computer software.’’.

4 SEC. 8006. SENSE OF CONGRESS ON NEGOTIATED RULE5 MAKING.

6 (a) FINDINGS.—The Congress finds the following:

7 (1) The use of negotiated rulemaking or similar

8 policy discussion group techniques is an appropriate

9 tool for—

10 (A) fostering effective implementation of,

11 and compliance with, laws and regulations;

12 (B) avoiding litigation; and

13 (C) achieving more productive and equitable

14 relationships between the Federal Government

15 and the regulated segments of the private sector.

16 (2) The use of negotiated rulemaking or similar

17 techniques in Federal procurement regulations could

18 be appropriate given the extreme complexity and in19 tricate interactions between buyer and seller in Fed20 eral procurements.

21 (b) SENSE OF CONGRESS.—It is the sense of Congress

22 that, in prescribing acquisition regulations, the Federal Ac23 quisition Regulatory Council should consider using nego24 tiated rulemaking procedures in accordance with sections

25 561 through 570 of title 5, United States Code, or similar
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1 techniques intended to achieve the benefits described in sub2 section (a)(1).

3 SEC. 8007. VENDOR AND EMPLOYEE EXCELLENCE AWARDS.

4 Section 6(d) of the Office of Federal Procurement Pol5 icy Act (41 U.S.C. 405(d)) is amended—

6 (1) by striking out the period at the end of para7 graph (10) (as redesignated by section 4011(b)(2))

8 and inserting in lieu thereof a semicolon; and

9 (2) by adding at the end the following new para10 graphs:

11 ‘‘(11) providing for a Government-wide award to

12 recognize and promote vendor excellence; and

13 ‘‘(12) providing for a Government-wide award to

14 recognize and promote excellence in officers and em15 ployees of the Federal Government serving in procure16 ment-related positions.’’.

17 SEC. 8008. CODIFICATION OF ACCOUNTING REQUIREMENT

18 FOR CONTRACTED ADVISORY AND ASSIST19 ANCE SERVICES.

20 (a) FUNDING TO BE IDENTIFIED IN BUDGET.—Sec21 tion 1105 of title 31, United States Code, is amended by

22 adding at the end the following new subsection:

23 ‘‘(g)(1) The Director of the Office of Management and

24 Budget shall establish the funding for consulting services

25 for each department and agency as a separate object class
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1 in each budget annually submitted to the Congress under

2 this section.

3 ‘‘(2)(A) In paragraph (1), except as provided in sub4 paragraph (B), the term ‘advisory and assistance services’

5 means the following services when provided by nongovern6 mental sources:

7 ‘‘(i) Management and professional support serv8 ices.

9 ‘‘(ii) Studies, analyses, and evaluations.

10 ‘‘(iii) Engineering and technical services.

11 ‘‘(B) In paragraph (1), the term ‘advisory and assist12 ance services’ does not include the following services:

13 ‘‘(i) Routine automated data processing and tele14 communications services (as defined in the Federal

15 Information Resources Management Regulation pre16 scribed by the Administrator of General Services) un17 less such services are an integral part of a contract

18 for the procurement of advisory and assistance serv19 ices.

20 ‘‘(ii) Architectural and engineering services.

21 ‘‘(iii) Technical support of research and develop22 ment activities.

23 ‘‘(iv) Research on basic mathematics or medical,

24 biological, physical, social, psychological, or other

25 phenomena.’’.
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1 (b) REPEAL OF SOURCE LAW.—Section 512 of Public

2 Law 102–394 (106 Stat. 1826) is repealed.

3 (c) REPEAL OF SUPERSEDED PROVISIONS.—

4 (1) DOD SPECIFIC LAW.—Section 2212 of title

5 10, United States Code, is repealed.

6 (2) GOVERNMENT-WIDE LAW.—Section 1114 of

7 title 31, United States Code, is repealed.

8 (3) CLERICAL AMENDMENTS.—The table of sec9 tions at the beginning of chapter 131 of title 10, Unit10 ed States Code, is amended by striking out the item

11 relating to section 2212. The table of sections at the

12 beginning of chapter 11 of title 31, United States

13 Code, is amended by striking out the item relating to

14 section 1114.

15 SEC. 8009. TECHNICAL AND CLERICAL AMENDMENTS.

16 (a) TABLE OF CONTENTS AMENDMENTS.—

17 (1) OFFICE OF FEDERAL PROCUREMENT POLICY

18 ACT.—The first section of the Office of Federal Pro19 curement Policy Act (41 U.S.C. 401 note) is amended

20 to read as follows:

21 ‘‘SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

22 ‘‘(a) SHORT TITLE.—This Act may be cited as the ‘Of23 fice of Federal Procurement Policy Act’.

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

25 this Act is as follows:

‘‘Sec. 1. Short title; table of contents.
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‘‘Sec. 2. Declaration of policy.

‘‘Sec. 3. Findings and purpose.

‘‘Sec. 4. Definitions.

‘‘Sec. 4A. Simplified acquisition threshold.

‘‘Sec. 4B. Procedures applicable to purchases below micro-purchase threshold.

‘‘Sec. 5. Office of Federal Procurement Policy.

‘‘Sec. 6. Authority and functions of the Administrator.

‘‘Sec. 7. Administrative powers.

‘‘Sec. 8. Responsiveness to Congress.

‘‘Sec. 9. Effect on existing laws.

‘‘Sec. 10. Effect on existing regulations.

‘‘Sec. 11. Authorization of appropriations.

‘‘Sec. 12. Delegation.

‘‘Sec. 14. Access to information.

‘‘Sec. 15. Tests of innovative procurement methods and procedures.

‘‘Sec. 16. Executive agency responsibilities.

‘‘Sec. 18. Procurement notice.

‘‘Sec. 19. Record requirements.

‘‘Sec. 20. Advocates for competition.

‘‘Sec. 21. Rights in technical data.

‘‘Sec. 22. Publication of proposed regulations.

‘‘Sec. 23. Contracting functions performed by Federal personnel.

‘‘Sec. 24. Travel expenses of Government contractors.

‘‘Sec. 25. Federal Acquisition Regulatory Council.

‘‘Sec. 26. Cost Accounting Standards Board.

‘‘Sec. 27. Procurement integrity.

‘‘Sec. 28. Advocate for the Acquisition of Commercial Products.

‘‘Sec. 29. Nonstandard contract clauses.

‘‘Sec. 30. Federal acquisition computer network (FACNET).’’.

1 (2) FEDERAL PROPERTY AND ADMINISTRATIVE

2 SERVICES ACT OF 1949.—The first section of the Fed3 eral Property and Administrative Services Act of

4 1949 (41 U.S.C. 471 et seq.) is amended to read as

5 follows:

6 ‘‘SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

8 ‘Federal Property and Administrative Services Act of 1949’.

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

10 this Act is as follows:

‘‘Sec. 1. Short title; table of contents.

‘‘Sec. 2. Declaration of policy.

‘‘Sec. 3. Definitions.
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‘‘TITLE I—ORGANIZATION

‘‘Sec. 101. General Services Administration.

‘‘Sec. 102. Transfer of affairs of Bureau of Federal Supply.

‘‘Sec. 103. Transfer of affairs of the Federal Works Agency.

‘‘Sec. 104. Records management: Transfer of the National Archives.

‘‘Sec. 106. Redistribution of functions.

‘‘Sec. 107. Transfer of funds.

‘‘Sec. 109. General supply fund.

‘‘Sec. 110. Information Technology Fund.

‘‘Sec. 111. Automatic data processing equipment.

‘‘Sec. 112. Federal information centers.

‘‘TITLE II—PROPERTY MANAGEMENT

‘‘Sec. 201. Procurement, warehousing, and related activities.

‘‘Sec. 202. Property utilization.

‘‘Sec. 203. Disposal of surplus property.

‘‘Sec. 204. Proceeds from transfer or disposition of property.

‘‘Sec. 205. Policies, regulations, and delegations.

‘‘Sec. 206. Surveys, standardization, and cataloging.

‘‘Sec. 207. Applicability of antitrust laws.

‘‘Sec. 208. Employment of personnel.

‘‘Sec. 209. Civil remedies and penalties.

‘‘Sec. 210. Operation of buildings and related activities.

‘‘Sec. 211. Motor vehicle identification and operation.

‘‘Sec. 212. Reports to Congress.

‘‘TITLE III—PROCUREMENT PROCEDURE

‘‘Sec. 301. Declaration of purpose.

‘‘Sec. 302. Application and procurement methods.

‘‘Sec. 302A. Simplified acquisition threshold.

‘‘Sec. 302B. Implementation of FACNET capability.

‘‘Sec. 303. Competition requirements.

‘‘Sec. 303A. Planning and solicitation requirements.

‘‘Sec. 303B. Evaluation and award.

‘‘Sec. 303C. Encouragement of new competition.

‘‘Sec. 303D. Validation of proprietary data restrictions.

‘‘Sec. 303F. Economic order quantities.

‘‘Sec. 303G. Prohibition of contractors limiting subcontractor sales directly to

the United States.

‘‘Sec. 303H. Severable services contracts for periods crossing fiscal years.

‘‘Sec. 304. Contract requirements.

‘‘Sec. 304A. Multiyear contracts.

‘‘Sec. 304B. Cost or pricing data: truth in negotiations.

‘‘Sec. 304C. Examination of records of contractor.

‘‘Sec. 305. Contract financing.

‘‘Sec. 306. Allowable costs.

‘‘Sec. 307. Administrative determinations and delegations.

‘‘Sec. 309. Definitions.

‘‘Sec. 310. Statutes not applicable.

‘‘Sec. 311. Cooperative agreements for basic, applied, and advanced research.

‘‘Sec. 312. Assignment and delegation of procurement functions and responsibilities.

‘‘Sec. 313. Determinations and decisions.
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‘‘Sec. 314. Definitions relating to procurement of commercial items.

‘‘Sec. 314A. Preference for acquisition of commercial items and other

nondevelopmental items.

‘‘Sec. 314B. Pricing documentation for commercial items.

‘‘Sec. 314C. Principle of construction with future laws.

‘‘Sec. 314D. Inapplicability of certain provisions of law.

‘‘Sec. 315. Contract goal for small disadvantaged businesses and certain institutions of higher education.

‘‘TITLE IV—FOREIGN EXCESS PROPERTY

‘‘Sec. 401. Disposal of foreign excess property.

‘‘Sec. 402. Methods and terms of disposal.

‘‘Sec. 403. Proceeds; foreign currencies.

‘‘Sec. 404. Miscellaneous provisions.

‘‘TITLE VI—GENERAL PROVISIONS

‘‘Sec. 601. Applicability of existing procedures.

‘‘Sec. 602. Repeal and saving provisions.

‘‘Sec. 603. Authorization for appropriations and transfer of authority.

‘‘Sec. 604. Separability.

‘‘Sec. 605. Effective date.

‘‘TITLE VIII—URBAN LAND UTILIZATION

‘‘Sec. 801. Short title.

‘‘Sec. 802. Declaration of purpose and policy.

‘‘Sec. 803. Disposal of urban lands.

‘‘Sec. 804. Acquisition or change of use of real property.

‘‘Sec. 805. Waiver during national emergency.

‘‘Sec. 806. Definitions.

‘‘TITLE IX—SELECTION OF ARCHITECTS AND ENGINEERS

‘‘Sec. 901. Definitions.

‘‘Sec. 902. Policy.

‘‘Sec. 903. Requests for data on architectural and engineering services.

‘‘Sec. 904. Negotiation of contracts for architectural and engineering services.

‘‘Sec. 905. Short title.’’.

1 (b) AMENDMENTS FOR STYLISTIC CONSISTENCY.—

2 (1) OFFICE OF FEDERAL PROCUREMENT POLICY

3 ACT.—The Office of Federal Procurement Policy Act

4 (41 U.S.C. 401 et seq.) is amended so that the section

5 designation and section heading of each section of

6 such Act is in the same form and typeface as the sec7 tion designation and heading of this section.
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1 (2) FEDERAL PROPERTY AND ADMINISTRATIVE

2 SERVICES ACT OF 1949.—The Federal Property and

3 Administrative Services Act of 1949 (41 U.S.C. 471

4 et seq.) is amended so that the section designation

5 and section heading of each section of such Act is in

6 the same form and typeface as the section designation

7 and heading of this section.

8 (c) REPEALS OF EXECUTED PROVISIONS.—The Office

9 of Federal Procurement Policy Act (41 U.S.C. 401 et seq.)

10 is amended—

11 (1) by striking out section 13; and

12 (2) by striking out the first section 15.

13 (d) CROSS REFERENCE CORRECTIONS.—Section 3552

14 of title 31, United States Code, is amended—

15 (1) by striking out ‘‘section 111(h)’’ and insert16 ing in lieu thereof ‘‘section 111(f)’’; and

17 (2) by striking out ‘‘759(h)’’ and inserting in

18 lieu thereof ‘‘759(f)’’.

19 (e) CONSISTENCY OF TERMINOLOGY WITH CUSTOMARY

20 USAGE.—Section 304(b) of the Federal Property and Ad21 ministrative Services Act of 1949 (41 U.S.C. 254(b)) is

22 amended by striking out ‘‘per centum’’ each place it ap23 pears and inserting in lieu thereof ‘‘percent’’.

24 (f) ENACTMENT OF POPULAR NAMES OF CERTAIN

25 ACTS.—
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1 (1) BROOKS ARCHITECT-ENGINEERS ACT.—Title

2 IX of the Federal Property and Administrative Serv3 ices Act of 1949 (40 U.S.C. 541–544) is amended by

4 adding at the end the following new section:

5 ‘‘SEC. 905. SHORT TITLE.

6 ‘‘This title may be cited as the ‘Brooks Architect-Engi7 neers Act’.’’.

8 (2) BROOKS AUTOMATIC DATA PROCESSING

9 ACT.—Section 111 of the Federal Property and Ad10 ministrative Services Act of 1949 (40 U.S.C. 759) is

11 amended by adding at the end the following new sub12 section:

13 ‘‘(h) This section may be cited as the ‘Brooks Auto14 matic Data Processing Act’.’’.

15 (3) BUY AMERICAN ACT.—The Act of March 3,

16 1933 (41 U.S.C. 10a–10c), commonly referred to as

17 the ‘‘Buy American Act’’, is amended by adding at

18 the end the following new section:

19 ‘‘SEC. 5. This Act may be cited as the ‘Buy American

20 Act’.’’.

21 (4) JAVITS-WAGNER-O’DAY ACT.—The Act enti22 tled ‘An Act to create a Committee on Purchases of

23 Blind-made Products, and for other purposes’, ap24 proved June 25, 1938 (41 U.S.C. 46–48c), that was

25 revised and reenacted in the Act of June 23, 1971 (85
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1 Stat. 77), is amended by adding at the end the follow2 ing new section:

3 ‘‘SHORT TITLE

4 ‘‘SEC. 7. This Act may be cited as the ‘Javits-Wagner5 O’Day Act’.’’.

6 TITLE IX—EFFECTIVE DATES

7 AND REGULATIONS

8 SEC. 9001. EFFECTIVE DATES.

9 (a) IN GENERAL.—Except as provided in subsection

10 (b), this Act and the amendments made by this Act shall

11 apply with respect to any contract for which a solicitation

12 for bid or proposal is issued after—

13 (1) 30 days have expired after the issuance in

14 final form of revisions to the Federal Acquisition Reg15 ulation pursuant to section 9002; or

16 (2) 270 days have expired after the date of the

17 enactment of this Act;

18 whichever is earlier.

19 (b) SPECIFIC EFFECTIVE DATES.—(1) Titles III and

20 VI of this Act, and the amendments made by such titles,

21 shall take effect on the date of the enactment of this Act.

22 (2) Subtitle D of title I of this Act, and the amend23 ments made by such subtitle (relating to procurement pro24 tests), shall apply with respect to any protest filed after the

25 expiration of the 90-day period beginning on the date of

26 the enactment of this Act.
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1 SEC. 9002. REGULATIONS.

2 Not later than 240 days after the date of the enactment

3 of this Act, the Federal Acquisition Regulation (referred to

4 in section 25(c) of the Office of Federal Procurement Policy

5 Act (41 U.S.C. 421(c))) shall be revised, in final form, to

6 implement this Act and the amendments made by this Act.

7 SEC. 9003. EVALUATION BY THE COMPTROLLER GENERAL.

8 (a) EVALUATION RELATING TO ISSUANCE OF REGULA9 TIONS.—Not later than 180 days after the issuance in final

10 form of revisions to the Federal Acquisition Regulation pur11 suant to section 9002, the Comptroller General shall submit

12 to Congress a report evaluating compliance with such sec13 tion 9002.

14 (b) EVALUATION OF IMPLEMENTATION OF REGULA15 TIONS.—Not later than 18 months after issuance in final

16 form of revisions to the Federal Acquisition Regulation pur17 suant to section 9002, the Comptroller General shall submit

18 to Congress a report evaluating the effectiveness of the regu19 lations implementing this Act in streamlining the acquisi20 tion system and fulfilling the other purposes of this Act.

Attest:

Clerk.

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