EXTENSIONS OF REMARKS

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

May 19, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1077

THE FEDERAL ACQUISITION

REFORM ACT OF 1995

HON. WILLIAM F. CLINGER, JR. OF PENNSYLVANIA

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 18, 1995

Mr. CLINGER. Mr. Speaker, today I am introducing legislation, on behalf of myself and

National Security Committee Chairman FLOYD

SPENCE, and other members of our committees, to further reform the inefficient and Byzantine Federal procurement process. This legislation will complement the work we started

last year with the enactment of the Federal

Acquisition Streamlining Act of 1994 [FASA].

Each year, our Government spends about

$200 billion on goods and services, ranging

from weapons systems to computer systems

to everyday commodities. The current system

costs too much, involves too much redtape,

and ill-serves both the taxpayer and industry.

From the time the Second Continental Congress established a Commissary General in

1775, the procurement system has commanded the attention of both public officials

and the American taxpayer. Unfortunately and

all too often, the attention has focused on individual abuses rather than the overall system.

Over the years, in response to these horror

stories, Congress passed many laws—long

and short, significant and trivial, new and

old—which standing alone were not overly

harmful, but when added together created an

increasingly overburdened mass of statutory

requirements.

In December 1994, a report prepared for the

Secretary of Defense found that, on average,

the Government pays an additional 18 percent

on what it buys solely because of the requirements it imposes on its contractors. This confirmed the average estimate by major contractors surveyed by GAO that the additional costs

incurred in selling to the Government are

about 19 percent. While some of the Government’s unique requirements certainly are

needed, we clearly are paying an enormous

premium for them—billions of dollars annually.

And this is only part of the Government’s inflated cost of doing business—for it includes

only what is paid to contractors, not the cost

of the Government’s own administrative system. The Government’s contracting officials

are confronted with numerous mandates of

their own, often amounting to step-by-step

prescriptions that increase staff and equipment

needs, and leave little room for the exercise of

business judgment, initiative, and creativity.

FASA was a direct attack on a procurement

system that had gone haywire—it applied

some common sense approaches to the bureaucracy to reduce the inefficiencies of the

system, get some real cost savings for the

taxpayer, and reduce the burdens on both

Government contracting officials and those

who sell to them.

But FASA only went part of the way. In

many respects, we still are guided today by

the same considerations the Commissary

General faced in 1775: How to provide meaningful competition, obtain quality goods at reasonable prices, and ensure accountability of

public officials for public transactions. And too,

as in 1775, we are under great budgetary constraints that drive us to look at ways to meet

our goals, yet do so in a way that is affordable

and uses common sense.

This legislation we are introducing today

represents a significant shift in the operation

of our Federal procurement system to meet

the needs of the American taxpayer. The proposal would:

Establish commercial-like procedures by

freeing commercial businesses from remaining

Government data and audit requirements; simplifying the sale of commercial items to the

Government; promoting the Government’s use

of commercial sources; and eliminating the

guess-work from the current bid protest and

dispute resolution maze by creating a single

administrative entity to handle such matters

with a single set of efficient procedures.

Promote better Government-industry relationships by repealing provisions of law that

currently impede communication between the

Government and industry.

Foster long-term relationships with quality

suppliers—much like commercial businesses

do.

Maximize competition by permitting the Government to provide for meaningful competition—not competition for competition’s sake—

which would allow firms to concentrate their

energies and resources on government business that they can realistically meet.

Some may say we should rest on our laurels, and let the system absorb the changes

made last year by FASA. But we must never

hesitate to do more or do better. The fundamental changes we are proposing today are

necessary to move the Federal procurement

system into the 21st century.

THE FEDERAL ACQUISITION REFORM ACT OF

1995 SECTION-BY-SECTION ANALYSIS

Title I—Competition

Section 101—Improvement of competition requirements

Subsection (a) would amend 10 U.S.C.

2304(A) governing armed services acquisitions to establish a new standard of competition for the acquisition of goods and services—‘‘maximum practicable’’ competition.

This would replace the current requirement

that all sources be given the ‘‘right’’ to be

considered for government contracts whether or not the source has a realistic chance of

supplying goods or services of the requisite

quality at a reasonable price. The new standard would permit the government to focus on

a meaningful competition among sources

who can meet or exceed the government’s requirements. In order to parallel the new

competition standard the subsection would

also amend 10 U.S.C. 2304(g)(3) which sets

forth the standard for the use of competition

in the simplified procedures for acquisitions

under the simplified acquisition threshold to

provide that agencies obtain competition to

the ‘‘extent practicable’’ consistent with the

particular requirement solicited.

The subsection would eliminate the archaic ‘‘preference’’ accorded the use of sealed

bidding in 10 U.S.C. 2304(a)(2).

The subsection would further streamline

and modernize the current competition requirements by amending 10 U.S.C. 2304(b)(1)

to eliminate from statute the long list of circumstances under which an agency may exclude a particular firm in order to maintain

an alternate source for goods or services and

would place the discretion for the use of this

authority in the contracting agencies.

Similarly, the subsection would eliminate

the maze of rules, paperwork-generating approval requirements, and detailed instructions in 10 U.S.C. 2304 (c), (d) and (e) that

currently govern the use of ‘‘other than competitive procedures’’ and substitute a simple

provision stating that competitive procedures must be used unless such procedures

are not feasible or appropriate. The use of

‘‘other than competitive procedures’’ must

be justified and approved in accordance with

simplified standards to be set forth in the

FAR.

Subsection (b) would replicat the above

changes in title 41 governing the acquisitions

of civilian agencies.

Subsection (c) would amend the Office of

Federal Procurement Policy Act (OFPP Act)

at section 18 (41 U.S.C. 416) to establish a

uniform notice requirement for acquisitions

between $10,000 and $25,000 and make other

conforming changes. Subsection (d) would

amend 18 U.S.C. 637 to remove duplicative

provisions concerning notice and obsolete

provisions regarding the use of other than

competitive procedures.

Subsection (e) would amend the OFPP Act

at 41 USC 414 to integrate the new competition standard into the enumerated executive

agency procurement responsibilities and at

41 USC 418 to remove obsolete language regarding competition advocates.

Section 102—Definition relating to competition

requirements

The section would amend the OFPP Act at

41 USC 403 to define the new standard of

‘‘maximum practicable competition.’’ According to the definition, the standard is

achieved when a maximum number of responsible or verified sources (consistent with

the particular government requirement) are

permitted to submit offers on the procurement. The section would also provide for

other amendments to the OFPP Act, title 10,

the Federal Property Act, and other laws to

conform them to the new competition standard.

Section 103—Contract solicitation amendments

The section would amend 10 USC 2305 (a)

and (b) governing armed services acquisition

to eliminate a provision concerning solicitation specifications that is inconsistent with

the new competition standard and to further

conform the provision regarding the competitive range. The section would provide for

amending the Federal Property Act at 41

USC 253a and 253b in the same manner.

Section 104—Preaward debriefings

The section would amend 10 USC 2305(b)

and the Federal Property Act at 41 USC 253b

to augment the new debriefing requirements

added by the Federal Acquisition Streamlining Act of 1994 (FASA) to permit a firm removed from the competitive range to request

a debriefing after receiving notice of the removal, but before award. The agency may

deny the request if it is not in the government’s best interest to hold a preaward debriefing when requested, but the request

E 1078 CONGRESSIONAL RECORD — Extensions of Remarks May 19, 1995

must be made by the firm or it will lose the

right to obtain a post award debriefing.

Section 105–Contract types

The section would amend 10 USC 2306 and

41 USC 254 to provide that the selection of

contract type is to be governed by market

conditions, established commercial practice

and sound business judgement. To further

the commercialization of the government’s

acquisition process, existing fee limits on

specified contract types are to be eliminated.

The section would also eliminate from title

10 service-specific provisions that set forth a

6 percent fee limit on architect-engineering

services contracts. It would add a new section 2332 to title 10 to provide the authority

to procure such services for civil works.

Section 106—Contractor performance

The section would add a new provision to

the OFPP Act to establish in the FAR an alternative quality-based competition system

for meeting the government’s repetitive

needs. Firms would be included as ‘‘verified’’

contractors after passing a competitive scrutiny based on an assessment of the firm’s

business practices, level of quality, and demonstrated contract performance. Once in the

system, firms would become eligible to compete with other ‘‘verified’’ firms in acquisitions conducted within the system. The

‘‘verification’’ could be revoked for failure to

maintain the requisite performance quality.

The existing qualification requirements in 10

USC 2319 and 41 USC 253c would be repealed.

Title II—Commercial Items

Section 201—Commercial item exception to requirement for cost or pricing data and information limitations

The section would amend 10 USC 2306a and

41 USC 254b—the so-called ‘‘Truth in Negotiations Act’’ (TINA) provisions—to exempt

all acquisitions for commercial items which

fit within the definition of commercial item

in the OFPP Act at 41 USC 403 from the requirement to submit certified cost or pricing

data.

The section would also eliminate the data

and audit requirements applicable to some

commercial items under the current TINA

provisions. The section would conform the

TINA provisions regarding the submission of

information to be considered in determining

price reasonableness when certified cost and

pricing data are not required either because

a TINA exemption applies or the acquisition

is not expected to exceed the $500,000 TINA

threshold. The amended provisions would

state that the FAR shall provide appropriate

limitations on information that should be

considered in determining price reasonableness, including specific limits on information requests relating to commercial items.

Finally the section would strike subsections

(h) in titles 10 and 41 as no longer needed.

Section 202—Application of simplified procedures to commercial items

The section would amend 10 USC 2304(e), as

added by section 101(a) and 41 USC 253, as

added by section 101(b), to provide that all

acquisitions for a commercial item, no matter what its dollar value, can be conducted

pursuant to special simplified commercialtype procedures that currently are authorized for acquisitions below the simplified acquisition threshold. The section would also

amend the OFPP Act to conform the notice

provisions for commercial items to the use

of simplified procedures.

Section 203—Amendment to definition of commercial items

The section would amend the OFPP Act at

41 USC 403(12)(F) to remove the requirement

in the definition of commercial services

added by FASA that they be sold based on

established ‘‘catalog’’ prices. To be considered ‘‘commercial’’ services under this section they would have to offered and sold at

‘‘established prices’’ rather than at established ‘‘catalog’’ prices. Since commercial

services are often offered at prices that may

not fit the strict definition of a catalog (e.g.,

commercial price lists, advertisements, etc.),

the section is intended to more accurately

reflect the commercial market, yet ensure

that the services are clearly defined and actually available commercially.

Section 204—Inapplicability of cost account

standards to contracts and subcontracts for

commercial items

The section would amend the OFPP Act at

41 USC 422(f)(2) to make it clear that all contracts for commercial items are exempt from

the burdens of the cost accounting standards. This provision would complement sections 201 which exempt all acquisitions for

commercial items from the requirement to

submit certified cost or pricing data as well

as from the accompanying audit requirements.

Title III—Additional Reform Provisions

Section 301—Government reliance on the private

sector

The section would amend the OFPP Act by

adding a new section 17 providing that it is

the policy of the government to rely on commercial sources to supply its needs. The policy that would be set forth in this section

has been the policy underpinning the government’s acquisition system since 1955 and reflects the language currently in Office of

Management and Budget Circular A–76.

Section 302—Elimination of certain certification

requirements

The section would provide for the elimination of specified certification requirements currently in statute and would require

the removal of current regulatory certifications unless retention is supported by a

written justification. The section would also

amend the OFPP Act to prohibit the inclusion in the FAR or agency procurement regulations of new certification requirements

unless mandated by statute or justified in

writing. The provision would retain the underlying prohibitions but eliminate what, in

many cases, are non-value added certification requirements which often do more to

deter participation in the government market rather than the prohibited conduct.

Section 303—Amendment to commencement and

expiration of authority to conduct certain

tests of procurement procedures

The section would amend section 5061 of

FASA, 41 USC 413 note, to permit the OFPP

Administrator to exercise the authority

granted in FASA to test ‘‘innovative’’ procurement procedures without having to wait

for the implementation of other FASA provisions.

Section 304—International competitiveness

The section would amend 22 USC 2761(e) to

eliminate the requirement for recoupment of

non-recurring research and development

charges for products sold through the foreign

military sales program. This fee or tax to be

paid the government for products developed

under government contracts disadvantages

U.S. companies when selling American products in international markets.

Section 305—Procurement integrity

The section would amend the OFPP Act at

41 USC 423 to repeal the current so called

‘‘Procurement Integrity’’ provisions and its

complex system of certifications and substitute a direct prohibition against the unauthorized disclosure and receipt of procurement-sensitive information. One who would

violate the prohibitions of the section would

be subject to criminal and civil penalties and

appropriate administrative actions. The section would contain prohibitions and remedies which would be similar to those regarding the disclosure of procurement-sensitive

information contained in the current ‘‘Procurement Integrity’’ provisions. Finally, the

section would eliminate the remaining agency-specific post-employment restrictions

which became redundant with the passage of

the Ethics Reform Act of 1989.

Section 306—Further acquisition streamlining

provisions

The section would amend several provisions of the OFPP Act to update and clarify

the statement in 41 USC 404 of OFPP’s purpose and to repeal unneeded or obsolete provisions at 41 USC 401, 402, 407, 409 and 410.

Title IV—Streamlining of Dispute

Resolution

Subtitle A—General Provisions

Section 401—Definitions

The section would set forth the definitions

of the terms needed to create and operate

the new consolidated United States Board of

Contract Appeals for the resolution of the

government’s contract disputes and review

of bid protests. The new Board would replace

the current agency boards of contract appeals and the General Accounting Office

(GAO) bid protest section. The definitions of

‘‘protest,’’ ‘‘interested party,’’ and ‘‘prevailing party’’ would parallel those set forth in

FASA in connection with the General Services Board of Contract Appeals (GSBCA).

Subtitle B—Establishment of the United States

Board of Contract Appeals

Section 411—Establishment

The section would establish the Board in

the executive branch as an independent establishment.

Section 412—Membership

The section would provide that the Board

consist of judges appointed by the chairman.

New judges would be selected and appointed

in the same manner as administrative law

judges pursuant to 5 USC 3105 with the additional requirement that they have at least 5

years public contract law experience. Current board judges and certain GAO employees would be considered qualified to be Board

judges.

Section 413—Chairman

The section would provide for the designation of the Chairman by the President and

for the Chairman’s executive and administrative responsibilities as well as for the designation of Vice Chairmen by the Chairman.

Section 414—Rulemaking authority

The section would provide that the board

may establish necessary procedural rules and

regulations and would prohibit the review of

such rules and regulations by any other

agency or person.

Section 415—Litigation authority

The section would provide that attorneys

designated by the board may represent the

board in civil actions.

Section 416—Seal of the board

The section would provide for a seal of office.

Section 417—Authorization of appropriations

The section would provide for the authorization of sums to be appropriated for fiscal

year 1997 and beyond.

Subtitle C—Functions of United States Board of

Contract Appeals

Section 421—Alternate dispute resolution service

The section would provide offer alternate

dispute resolution services for any contractrelated disagreement.

Section 422—Alternative dispute resolution of

disputes and protests submitted to board

The section would provide that a Board

judge or attorney shall meet with the parties

May 19, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1079

to the protest or dispute to attempt to resolve the matter through use of an alternate

method of dispute resolution.

Section 423—Contract disputes

The section would provide that the Board

have jurisdiction over contract disputes as

provided by section 8(a) of the Contract Disputes Act.

Section 424—Protests

The section would provide that the Board

shall review contracting officer decisions alleged by an interested party to violate statute or regulation and that in deciding protests the Board may consider all relevant

evidence. The section would also provide

that facts found by contracting officers and

determinations made by them be presumed

correct and that the Board may find that a

contracting officer decision violates a statute or regulation for the reasons stated in 5

USC 706(2).

Further the section would provide procedures for the suspension by the Board of the

agency’s authority to conduct a procurement

in protests filed before award and for the suspension of performance in protests filed after

award. The section would set forth procedures for discovery of relevant material and

for Board proceedings, including the use simplified rules for protests of procurements

below $1,000,000 and the dismissal and payment of costs for frivolous protests. Finally,

among other things, the section would provide for the corrective actions to be ordered

by the Board and for the Board’s authority

to declare the entitlement of a prevailing

party to its protest costs.

Section 425—Applicability to contracts for commercial items

The section would provide that the authority conferred on the Board by this Title is

applicable to procurements for commercial

items.

Subtitle D—Repeal of Other Statutes

Authorizing Administrative Protests

Section 431—Repeals

The section would provide repeal the current statutory authority for the GSBCA and

for the GAO bid protest function.

Subtitle E—Transfers and Transitional,

Savings, and Conforming Provisions

Section 441—Transfer and allocation of appropriations and personnel

The section would provide for the transfer

of assets, etc. and the rules for the transfer

of agency boards of contract appeal and relevant GAO personnel to the Board.

Section 442—Terminations and savings provisions

The section would provide the rules for affect on proceedings before the agency boards

and GAO.

Section 443—Contract disputes authority of

board

The section would provide conforming

amendments needed by the establishment of

the Board regarding the contract disputes.

Section 444—References to agency boards of

contract appeals

The section would provide that any reference to an agency board of contract appeals shall be treated as to the Board.

Section 445—Conforming amendments

The section would provide for the necessary conforming amendments.

Subtitle F—Effective Date; Interim Appointment

and Rules

Section 451—Effective date

The section would provide for an effective

date of October 1, 1996 for this Title.

Section 452—Interim appointment

The section would provide for the current

chairman of the GSBCA to serve as the

Chairman of the Board for 2 years.

Section 453—Interim rules

The section would provide for the rules of

procedure of the GSBCA to apply to the

Board until the Board promulgates its procedural rules and that the rules of the Armed

Services Board of Contract Appeals regarding Board judges apply until relevant Board

rules are promulgated.

Title V—Effective Dates and

Implementation

Section 501—Effective Date and Applicability

The section would provide that the Act

would take effect on the date of enactment,

except as otherwise provided in Act and that

the amendments made by the Act would take

effect on the date provided in the final implementing regulations or October 1, 1996,

whichever is earlier.

Section 502—Implementing regulations

The section would provide a schedule for

the promulgation of the implementing regulations.

EAGLE SCOUT AWARD

fHON. ROBERT E. ANDREWS OF NEW JERSEY

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 18, 1995

Mr. ANDREWS. Mr. Speaker, I rise today to

express my congratulations to Armando

Lopez, the first Hispanic-American to achieve

the rank of Eagle Scout in the Boy Scout

Camden County Council of New Jersey. Mr.

Lopez is a shining example of the creativity

and spirit that exists in our future leaders. He

chose as his Eagle Scout project to build a

patio around a shrine for Our Lady of Mount

Carmel-Fatima Church in Camden. What was

supposed to be a brick patio has turned into

an enclosed garden and a gathering place for

all who live in the area. It is now used by the

community for prayer, weddings, school ceremonies, and sanctuary. Armando has spent

many months on this project, through the winter and spring and has truly displayed the

dedication to become a leader in the community. He will not be ending his scouting career

soon, for he has been chosen to represent the

United States at the 18th World Scout Jamboree in Holland this August. I commend

Armando Lopez on his commitment to the

community and I am sure he will succeed in

all of his future endeavors.

PROTECT AMERICA’S DEFENSE

fWORKERS

HON. BOB FILNER OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 18, 1995

Mr. FILNER. Mr. Speaker and colleagues, I

rise today to urge this Congress to make a

major reinvestment in communities hit hardest

by the downsizing of America’s defense industry.

San Diego is home to a highly skilled and

productive work force. A generation of these

talented defense workers helped to establish

California’s dominance in the defense and

aerospace industry.

Now defense workers in communities like

San Diego are watching their jobs disappear—

not only because of relaxing world tensions—

but also because our own Department of Defense is helping to subsidize their transfer to

other cities.

Last year, my district saw the relocation of

Martin Marietta’s Space Systems Division to

Denver—with a net loss of 1,800 jobs for my

community. But the worst part about this situation is that our own U.S. Air Force rewrote a

contract and paid Martin Marietta a $30 million

subsidy to help transfer these jobs out of San

Diego and out of California.

To make matters worse, just last month the

Defense Department gave away another $31

million of taxpayer money to the top executives of Martin Marietta and Lockheed.

What did our Defense Department give to

those defense workers in San Diego that lost

their jobs? Absolutely nothing.

To correct this gross injustice, I recently introduced H.R. 702, the Displaced Workers Defense Act of 1995.

My legislation is very simple: It would require that any cost savings realized by the

Federal Government under a defense contract

that causes job losses in communities be returned to that community—to help create new

jobs and to retrain displaced defense workers

so they can take advantage of these new job

opportunities.

We must stop this giveaway of taxpayer

funds to wealthy corporations.

We must use our scarce resources to help

those defense workers that have worked so

hard to make America great.

Please join me in this effort to protect our

defense workers from being left behind in our

changing economy. Join me in supporting

H.R. 702, the Displaced Workers Defense Act

of 1995.

SAN FRANCISCO LABOR LEADERS

CARRY SPIRIT OF AMERICAN

fLABOR MOVEMENT TO CHINA

HON. TOM LANTOS OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 18, 1995

Mr. LANTOS. Mr. Speaker, I rise today to

call to the attention of my colleagues an upcoming visit of considerable importance by

Ms. Josie Mooney, president of the San Francisco Labor Council. She will embark on a

good will journey to meet with labor leaders in

China.

Mr. Speaker, Josie Mooney and the San

Francisco Labor Council represent the best of

the American labor movement—free-working

men and women, who are organized to seek

better wages, improved working conditions,

and a better standard of living for working men

and women in our area and around our Nation.

As the official representative of the San

Francisco Labor Council, Josie Mooney will

meet with leaders of the Shanghai Municipal

Trade Union Council and other labor leaders.

I wish her great success in those meetings as

she works to build bonds of brotherhood between the working men and women of the

United States and China.

It is my sincere desire that the spirit and example of the San Francisco Labor Council and

of the United States union movement will inspire labor leaders in China to emulate the

high standards set by American unions and

their outstanding leaders.