IB

Union Calendar No. 303

103D CONGRESS

2D SESSION H. R. 2238

[Report No. 103–545, Parts I and II]

To amend laws relating to Federal procurement, to authorize functions and

activities under the Federal Property and Administrative Services Act

of 1949, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 24, 1993

Mr. CONYERS (for himself and Mr. DELLUMS) introduced the following bill;

which was referred jointly to the Committees on Government Operations

and Armed Services

JUNE 13, 1994

Reported from the Committee on Government Operations with an amendment

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

JUNE 17, 1994

Additional sponsors: Mr. CLINGER, Mr. KLECZKA, and Mrs. MALONEY

JUNE 17, 1994

Reported from the Committee on Armed Services with amendments, committed to the Committee of the Whole House on the State of the Union, and

ordered to be printed

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

[For text of introduced bill, see copy of bill as introduced on May 24, 1993]

A BILL

To amend laws relating to Federal procurement, to authorize

functions and activities under the Federal Property and
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Administrative Services Act of 1949, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Federal Ac5 quisition Improvement Act of 1993’’.

6 TITLE I—ENHANCEMENT OF

7 COMPETITION IN CONTRACTING

8 Subtitle A—Acquisition of

9 Commercial Items

10 SEC. 111. PREFERENCE FOR ACQUISITION OF COMMERCIAL

11 ITEMS.

12 Section 16 of the Office of Federal Pro13 curement Policy Act (41 U.S.C. 414) is amend14 ed by redesignating paragraphs (2), (3), and

15 (4) in order as paragraphs (3), (4), and (5), re16 spectively, and by inserting after paragraph

17 (1) the following new paragraph:

18 ‘‘(2) implement a preference for the

19 acquisition of commercial items by—

20 ‘‘(A) whenever practicable, stating

21 specifications in solicitation for bids

22 and proposals in terms such that bid23 ders and offerors are enabled and en24 couraged to offer to supply commer-
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1 cial items in response to agency so2 licitations;

3 ‘‘(B) reducing impediments to the

4 acquisition of commercial items in

5 agency procurement policies, prac6 tices, and procedures not required by

7 law; and

8 ‘‘(C) requiring training of appro9 priate personnel in the acquisition of

10 commercial items;’’.

11 SEC. 112. ACQUISITION OF COMMERCIAL ITEMS.

12 Section 28 of the Office of Federal Pro13 curement Policy Act (41 U.S.C. 424) is amend14 ed to read as follows:

15 ‘‘SEC. 28. ACQUISITION OF COMMERCIAL ITEMS.

16 ‘‘(a) MARKET RESEARCH.—Before soliciting

17 bids or proposals for a contract for property

18 or services, an executive agency shall conduct

19 market research, appropriate to the cir20 cumstances, to determine whether the needs

21 of the agency can be met by the acquisition

22 of commercial items.

23 ‘‘(b) ADVOCATE FOR ACQUISITION OF COM24 MERCIAL ITEMS.—
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1 ‘‘(1) ESTABLISHMENT.—There is estab2 lished in the Office of Federal Procure3 ment Policy the position of Advocate for

4 the Acquisition of Commercial Items

5 (hereinafter in this subsection referred to

6 as the ‘Advocate’).

7 ‘‘(2) FUNCTIONS.—The Advocate shall—

8 ‘‘(A) monitor compliance by exec9 utive agencies with the preference re10 quired under section 16(2) for the ac11 quisition of commercial items;

12 ‘‘(B) make recommendations and

13 proposals to the Administrator re14 garding the reform of procurement

15 statutes and regulations to implement

16 that preference; and

17 ‘‘(C) report to the Administrator

18 on the prospective effect of proposed

19 statutes and regulations on the acqui20 sition of commercial items.’’.

21 SEC. 113. REGULATIONS AND SIMPLIFIED FORM CON22 TRACTS.

23 (a) REVISION OF FAR.—Unless otherwise

24 specifically provided in this title, not later

25 than 180 days after the date of the enactment
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1 of this title, the Federal Acquisition Regula2 tion issued under section 25(c) of the Office of

3 Federal Procurement Policy Act (41 U.S.C.

4 421(c)) shall be revised to implement the

5 amendments made by this subtitle.

6 (b) SIMPLIFIED UNIFORM CONTRACT.—(1)(A)

7 The revision of the Federal Acquisition Regu8 lation under subsection (a) shall include issu9 ance of one or more simplified uniform con10 tracts for the acquisition of commercial items

11 by Federal agencies and shall require that

12 such simplified uniform contract or contracts

13 be used for the acquisition of commercial

14 items to the maximum extent practicable. The

15 uniform contract or contracts shall include

16 only—

17 (i) those contract clauses that are re18 quired to implement provisions of law ap19 plicable to such an acquisition;

20 (ii) those contract clauses that are es21 sential for the protection of the Federal

22 Government’s interest in such an acquisi23 tion; and

24 (iii) those contract clauses that are

25 determined to be consistent with stand-
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1 ard commercial practice and appropriate

2 for inclusion in such contracts.

3 (B) In addition to the clauses described

4 under subparagraph (A), contracts for the ac5 quisition of commercial items may include

6 such clauses as are essential for the protec7 tion of the Federal Government’s interest in—

8 (i) a particular contract, as deter9 mined in writing by the contracting offi10 cer for such contract; or

11 (ii) a class of contracts, as determined

12 by the agency head, in consultation with

13 the Administrator for Federal Procure14 ment Policy.

15 (C) Contracts for the acquisition of com16 mercial items may not include any clause

17 other than those clauses authorized under

18 subparagraph (A) or (B).

19 (2)(A) Except as provided in subpara20 graph (B), a prime contractor under a Federal

21 agency contract for the acquisition of com22 mercial items may only be required to include

23 in subcontracts under such contract—
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1 (i) those contract clauses that are re2 quired to implement provisions of law ap3 plicable to such subcontracts; and

4 (ii) those contract clauses that are es5 sential for the protection of the Federal

6 Government’s interest in such sub7 contracts.

8 (B) In addition to the clauses described

9 under subparagraph (A), a contractor under

10 a Federal agency contract for the acquisition

11 of commercial items may be required to in12 clude in a subcontract under such contract

13 such clauses as are essential for the protec14 tion of the Federal Government’s interest in—

15 (i) a particular subcontract, as deter16 mined in writing by the contracting offi17 cer for such contract; or

18 (ii) a class of subcontracts, as deter19 mined by the agency head, in consulta20 tion with the Administrator for Federal

21 Procurement Policy.

22 (C) A Federal agency may not require a

23 contractor for the acquisition of commercial

24 items to include in a subcontract for that ac-
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1 quisition any clause other than those clauses

2 authorized under subparagraph (A) or (B).

3 (3) Notwithstanding paragraphs (1) and

4 (2) of this subsection, the Department of De5 fense may use uniform contract clauses devel6 oped under paragraphs (2) and (3) of section

7 824(b) of the National Defense Authorization

8 Act for Fiscal Years 1990 and 1991 (10 U.S.C.

9 2325 note; P.L. 101–189) until September 30,

10 1995.

11 (c) WARRANTIES.—The Federal Acquisition

12 Regulation shall require that, to the maxi13 mum extent practicable, Federal agencies

14 take advantage of warranties offered by com15 mercial contractors and use such warranties

16 for the repair and replacement of commercial

17 items.

18 (d) MARKET ACCEPTANCE.—The Federal Ac19 quisition Regulation shall direct agencies to

20 require, where appropriate and in accordance

21 with criteria prescribed in the regulations,

22 offerors to demonstrate in their offers that

23 products being offered have—

24 (1)(A) achieved a level of commercial

25 market acceptance necessary to indicate
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1 that the products are suitable for the

2 agency’s use; or

3 (B) been satisfactorily supplied under

4 current or recent contracts for the same

5 or similar requirements; and

6 (2) otherwise meet the product de7 scription, specifications, or other criteria

8 prescribed by the public notice and solic9 itation.

10 (e) PAST PERFORMANCE.—The Federal Ac11 quisition Regulation shall provide guidance

12 to Federal agencies on the use of past per13 formance of products and sources as a factor

14 in award decisions.

15 Subtitle B—Miscellaneous

16 SEC. 121. TRUTH IN NEGOTIATIONS ACT.

17 (a) AMENDMENTS.—Section 304(d)(4) of the

18 Federal Property and Administrative Services

19 Act of 1949 (41 U.S.C. 254(d)(4)) is amended to

20 read as follows:

21 ‘‘(4) AUTHORITY TO REQUIRE COST OR PRIC22 ING DATA.—When cost or pricing data need not

23 be required to be submitted pursuant to para24 graph (5), such data shall not be required to

25 be submitted unless the head of the agency
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1 determines that such data are necessary for

2 the evaluation by the agency of the reason3 ableness of the price of the contract or sub4 contract. In any case in which the head of the

5 agency requires such data to be submitted

6 under this paragraph, the head of the agency

7 shall document in writing the reasons for

8 such requirement.’’.

9 (b) REQUIREMENT FOR REVISED REGULA10 TIONS.—Not later than 180 days after the date

11 of enactment of this Act, the Federal Acquisi12 tion Regulation issued under section 25(c) of

13 the Office of Federal Procurement Policy Act

14 (41 U.S.C. 421(c)) shall be revised to imple15 ment section 304(d)(4) of the Federal Property

16 and Administrative Services Act of 1949 (41

17 U.S.C. 254(d)) and section 2306a(b) of title 10,

18 United States Code, as amended by subsection

19 (a) and section 302.

20 (c) PROVISIONS TO BE INCLUDED.—(1) In the

21 case of contracts other than cost-reimburse22 ment research and development contracts,

23 the revised regulations promulgated under

24 subsection (b) shall provide that cost or pric25 ing data may not be requested from a contrac-
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1 tor when it is likely that circumstances will

2 exist in which an exception to the require3 ment to provide such data is authorized by

4 section 304(d)(5) of the Federal Property and

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

6 254(d)) or section 2306a(b) of title 10, United

7 States Code, unless the head of the agency de8 termines in writing that such data are nec9 essary for the evaluation by the agency of the

10 reasonableness of the price of the contract or

11 subcontract.

12 (2) The regulations also shall provide

13 clear standards for determining whether the

14 exceptions authorized by such sections apply.

15 In the case of the exception provided under

16 section 304(d)(5)(A)(i) of such Act and section

17 2306a(b)(1)(A) of such title (relating to ade18 quate price competition), the regulations

19 shall specify the criteria that will be used to

20 determine whether adequate price competi21 tion exists. In the case of the exception pro22 vided under section 304(d)(5)(A)(ii) of such

23 Act and section 2306a(b)(1)(B) of such title (re24 lating to established catalog or market prices

25 of commercial items sold in substantial quan-
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1 tities to the general public), the regulations

2 shall preclude the consideration of sales to

3 the government, including the percentage of

4 an item’s overall sales that are made to the

5 Government, when determining whether the

6 item has been sold in substantial quantities to

7 the public.

8 (3) The regulations also shall establish

9 reasonable limitations on requests for sales

10 data relating to commercial items.

11 SEC. 122. DEFINITIONS.

12 (a) OFPP ACT.—Section 4 of the Office of

13 Federal Procurement Policy Act (41 U.S.C.

14 403) is amended by—

15 (1) striking ‘‘and’’ at the end of para16 graph (10);

17 (2) striking the period at the end of

18 paragraph (11) and inserting ‘‘; and’’; and

19 (3) adding at the end the following

20 new paragraph:

21 ‘‘(12) the term ‘commercial items’

22 means items regularly used in the course

23 of normal business operations for other

24 than Government purposes, that—
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1 ‘‘(A) have been sold, leased, or li2 censed to the general public;

3 ‘‘(B) have been offered for sale,

4 lease, or license to the general public;

5 ‘‘(C) are not yet available in the

6 commercial marketplace, but will be

7 available in time to satisfy the deliv8 ery requirements under a Govern9 ment solicitation; or

10 ‘‘(D) are items that, but for minor

11 modifications made to meet Govern12 ment requirements, would satisfy the

13 criteria set forth in subparagraph (A),

14 (B), or (C).’’.

15 (b) FEDERAL PROPERTY AND ADMINISTRA16 TIVE SERVICES ACT OF 1949.—Section 309(c) of

17 the Federal Property and Administrative

18 Services Act of 1949 (40 U.S.C. 259(c)) is

19 amended by inserting ‘‘ ‘commercial items’,’’

20 immediately after ‘‘ ‘item of supply’,’’.

21 (c) COMMERCIAL ITEM DEFINED.—In this

22 title, the term ‘‘commercial items’’ has the

23 meaning given that term in section 4 of the

24 Office of Federal Procurement Policy Act (41

25 U.S.C. 403), as amended by subsection (a).
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1 SEC. 123. EFFECTIVE DATE.

2 Unless otherwise specifically provided in

3 this title, the amendments made by this title

4 shall be effective 180 days after the date of the

5 enactment of this title.

6 SEC. 124. PROVISIONS NOT AFFECTED.

7 Nothing in this title shall be construed as

8 amending, modifying, or superseding, or is in9 tended to impair or restrict authorities or re10 sponsibilities under—

11 (1) section 111 of the Federal Prop12 erty and Administrative Services Act of

13 1949 (40 U.S.C. 759), commonly referred

14 to as the ‘‘Brooks Automatic Data Proc15 essing Act’’;

16 (2) title IX of the Federal Property

17 and Administrative Services Act of 1949

18 (40 U.S.C. 541 et seq.), commonly referred

19 to as the ‘‘Brooks Architect-Engineers

20 Act’’;

21 (3) the Small Business Act (15 U.S.C.

22 631 et seq.), including section 8(a) of that

23 Act (15 U.S.C. 637(a)); or

24 (4) the Act of June 25, 1938 (41 U.S.C.

25 46–48c), commonly referred to as the

26 ‘‘Javits-Wagner-O’Day Act’’.
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1 TITLE II—AMENDMENTS TO FED2 ERAL PROPERTY AND ADMIN3 ISTRATIVE SERVICES ACT OF

4 1949

5 SEC. 201. AWARD OF MULTIPLE CONTRACTS.

6 Section 303B of the Federal Property and

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

8 253b) is amended by adding at the end the fol9 lowing:

10 ‘‘(g) AWARD OF MULTIPLE CONTRACTS.—In

11 procuring any supply or service using com12 petitive procedures, an executive agency may

13 award more than one contract for the same

14 supply or service in any case in which the

15 head of the agency determines that it is in the

16 best interests of the Government to award

17 those contracts for the purpose of maintain18 ing a continuous source for the supply or

19 service.’’.

20 SEC. 202. SOLICITATION EVALUATION AND AWARD.

21 (a) SOLICITATION REQUIREMENTS.—Section

22 303A of the Federal Property and Administra23 tive Services Act of 1949 (41 U.S.C. 253a) is

24 amended—

25 (1) in subsection (b)(1)(A)—
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1 (A) by inserting ‘‘and significant

2 subfactors’’ after ‘‘all significant fac3 tors’’; and

4 (B) by striking ‘‘(including price)’’

5 and inserting ‘‘(including cost or

6 price, cost- or price-related factors,

7 and noncost- or nonprice-related fac8 tors)’’;

9 (2) in subsection (b)(1)(B) by inserting

10 ‘‘and subfactors’’ after ‘‘factors’’;

11 (3) in subsection (b)(2)(B) by amend12 ing clause (i) to read as follows:

13 ‘‘(i) a statement that the proposals

14 are intended to be evaluated with,

15 and award made after, discussions

16 with the offerors, or that the propos17 als are intended to be evaluated, and

18 award made, without discussions

19 with the offerors (other than discus20 sions conducted for the purpose of

21 minor clarification), unless discus22 sions are determined to be necessary;

23 and’’; and

24 (4) by adding at the end the following

25 new subsection:
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1 ‘‘(c) ESTABLISHING IMPORTANCE OF FAC2 TORS.—(1) In prescribing the evaluation fac3 tors to be included in each solicitation for

4 competitive proposals, the head of an agen5 cy—

6 ‘‘(A) shall clearly establish the rel7 ative importance assigned to the evalua8 tion factors and subfactors, including the

9 quality of the product or services to be

10 provided (including technical capability,

11 management capability, and prior experi12 ence of the offeror);

13 ‘‘(B) shall include cost or price to the

14 Government as an evaluation factor that

15 must be considered in the evaluation of

16 proposals; and

17 ‘‘(C) shall, at a minimum, disclose to

18 offerors whether all evaluation factors

19 other than price or cost, when combined,

20 are—

21 ‘‘(i) significantly more important

22 than price or cost,

23 ‘‘(ii) approximately equal in im24 portance to price or cost, or
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1 ‘‘(iii) significantly less important

2 than price or cost.

3 ‘‘(2) Nothing in this subsection prohibits

4 an agency from—

5 ‘‘(A) providing additional information

6 in a solicitation, including numeric

7 weights for all evaluation factors; or

8 ‘‘(B) stating in a solicitation that

9 award will be made to the offeror that

10 meets the solicitation’s mandatory re11 quirements at the lowest price or cost.’’.

12 (b) EVALUATION AND AWARD.—Section 303B

13 of the Federal Property and Administrative

14 Services Act of 1949 (41 U.S.C. 253b) is amend15 ed—

16 (1) in subsection (a) by inserting ‘‘and

17 award a contract’’ after ‘‘competitive pro18 posals’’;

19 (2) in subsection (c) in the second

20 sentence by inserting ‘‘in accordance

21 with subsection (a)’’ after ‘‘shall evaluate

22 the bids’’;

23 (3) in subsection (d) by amending

24 paragraph (1) to read as follows:
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1 ‘‘(1) The executive agency shall evaluate

2 competitive proposals in accordance with

3 subsection (a) and may award a contract—

4 ‘‘(A) after discussions with the

5 offerors, if written or oral discussions

6 have been conducted with all responsible

7 offerors who submit proposals within the

8 competitive range; or

9 ‘‘(B) without discussions with the

10 offerors (other than discussions con11 ducted for the purpose of minor clarifica12 tion), if the solicitation included a state13 ment that proposals are intended to be

14 evaluated, and award made, without dis15 cussions, unless discussions are deter16 mined to be necessary.’’; and

17 (4) in subsection (d) by striking para18 graphs (2) and (3) and by redesignating

19 paragraph (4) as paragraph (2).

20 (c) APPLICATION.—

21 (1) IN GENERAL.—Except as provided

22 in paragraph (2), the amendments made

23 by this section shall apply to—

24 (A) solicitations for sealed bids or

25 competitive proposals issued after
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1 the end of the 180-day period begin2 ning on the date of the enactment of

3 this Act; and

4 (B) contracts awarded pursuant

5 to those solicitations.

6 (2) EARLIER APPLICATION.—The head of

7 an agency may apply the amendments

8 made by this section to solicitations is9 sued before the end of the period re10 ferred to in paragraph (1). The head of

11 the agency shall publish in the Federal

12 Register notice of any such earlier date

13 of application before the beginning of the

14 10-day period ending on that date.

15 SEC. 203. CERTIFIED COST OR PRICING DATA THRESHOLD.

16 (a) CERTIFYING DATA.—

17 (1) AFFECTED CONTRACTS.—Section

18 304(d) of the Federal Property and Ad19 ministrative Services Act of 1949 (41

20 U.S.C. 254(d)) is amended—

21 (A) by striking out ‘‘$100,000’’ each

22 place it appears and inserting in lieu

23 thereof ‘‘the cost or pricing data

24 threshold’’; and
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1 (B) by adding at the end the fol2 lowing new paragraph:

3 ‘‘(6) For the purposes of this subsection,

4 the term ‘the cost or pricing data threshold’

5 means $500,000, or, after December 31, 1995,

6 $100,000.’’.

7 (2) APPLICATION.—The amendments

8 made by this subsection shall apply to—

9 (A) prime contracts, or sub10 contracts (without regard to the date

11 on which the associated prime con12 tract was awarded), entered into

13 after the date on which the Federal

14 Acquisition Regulation is promul15 gated pursuant to section 204; and

16 (B) changes or modifications to

17 prime contracts or subcontracts when

18 those changes or modifications are

19 entered into after the date on which

20 a final revision of the Federal Acqui21 sition Regulation is issued pursuant

22 to section 204.

23 (3) MODIFICATION.—Upon the request

24 of a contractor, the head of an agency

25 may modify a contract to reflect the dol-
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1 lar thresholds set forth in the revision to

2 the Federal Acquisition Regulation is3 sued pursuant to section 204. Any such

4 modification shall be made without re5 quiring consideration.

6 (b) REGULATIONS FOR BELOW-THRESHOLD

7 PROCUREMENTS.—

8 (1) TYPE OF PROCUREMENTS.—The Ad9 ministrator of General Services, in con10 sultation with the Administrator for Fed11 eral Procurement Policy, shall prescribe

12 regulations identifying the type of pro13 curements for which contracting officers

14 should consider requiring the submission

15 of certified cost or pricing data under

16 section 304(d) of the Federal Property

17 and Administrative Services Act of 1949

18 (41 U.S.C 254).

19 (2) TYPES OF INFORMATION.—The Ad20 ministrator of General Services, in con21 sultation with the Administrator for Fed22 eral Procurement Policy, shall prescribe

23 regulations concerning the types of infor24 mation that offerors may be required to

25 submit for a contracting officer to con-
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1 sider in determining whether the price of

2 a procurement to the Government is fair

3 and reasonable when certified cost or

4 pricing data are not required to be sub5 mitted under section 304(d) of such Act

6 because the price of the procurement to

7 the United States is not expected to ex8 ceed $500,000. Such information, at a

9 minimum, shall include appropriate in10 formation on the prices at which such

11 offeror has previously sold the same or

12 similar products.

13 (3) DEADLINE.—The regulations re14 quired under this subsection shall be pre15 scribed no later than 6 months after the

16 date of the enactment of this Act.

17 (c) REPEAL OF COMMERCIAL PRICING RE18 QUIREMENTS.—

19 (1) REPEAL.—Section 303E of the Fed20 eral Property and Administrative Serv21 ices Act of 1949 (41 U.S.C. 253e) is re22 pealed.

23 (2) CLERICAL AMENDMENT.—The first

24 section of the Federal Property and Ad25 ministrative Services Act of 1949 is
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1 amended in the table of contents by strik2 ing the item relating to section 303E.

3 (d) REVIEW OF AMENDMENTS.—

4 (1) IN GENERAL.—After the amend5 ments made by subsections (a) and (c)

6 have been in effect for 1 year, the Comp7 troller General shall conduct a review of

8 the effects of the amendments. The

9 Comptroller General shall coordinate

10 that review, insofar as possible, with the

11 review conducted by the Inspector Gen12 eral of the Department of Defense pursu13 ant to section 803(b) of the National De14 fense Authorization Act for Fiscal Year

15 1991 (Public Law 101–510).

16 (2) FACTORS CONSIDERED.—The review

17 conducted under paragraph (1) shall ad18 dress whether the amendments made by

19 subsections (a) and (c) have improved the

20 acquisition process in terms of reduced

21 paperwork, financial or other savings to

22 the Government, an increase in the num23 ber of contractors participating in the

24 contracting process, and the adequacy of

25 information available to contracting offi-
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1 cers in cases in which certified cost or

2 pricing data are not required.

3 (3) REPORT.—Not later than the date

4 on which the President submits the budg5 et for fiscal year 1996 to the Congress

6 pursuant to section 1105 of title 31, Unit7 ed States Code, the Comptroller General

8 shall submit to the Congress a report on

9 the review conducted under paragraph

10 (1). The report shall include the com11 ments of the Administrator for Federal

12 Procurement Policy and the Adminis13 trator of General Services.

14 SEC. 204. REVISION OF FEDERAL ACQUISITION REGULA15 TION; EFFECTIVE DATE.

16 (a) REVISION OF FAR.—Unless otherwise

17 specifically provided in this title, not later

18 than 180 days after the date of the enactment

19 of this Act, the Federal Acquisition Regula20 tion issued under section 25(c) of the Office of

21 Federal Procurement Policy Act (41 U.S.C.

22 421(c)) shall be revised to reflect the amend23 ments made by sections 201, 202, 203(a) and

24 (c), and 301.
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1 (b) EFFECTIVE DATE.—Unless otherwise

2 specifically provided in this title, the amend3 ments made by this title and section 301 shall

4 be effective 180 days after the date of the en5 actment of this Act.

6 (c) STANDARDS AND REQUIREMENTS FOR

7 COST AND PRICE AS EVALUATION FACTORS.—

8 (1) IN GENERAL.—The Federal Acquisi9 tion Regulation, as revised pursuant to

10 subsection (a), shall establish standards

11 and requirements for the consideration

12 of cost and price to the Government as

13 evaluation factors under the amendments

14 made by sections 202(a)(4) and 301.

15 (2) STANDARDS AND REQUIREMENTS.—

16 Standards and requirements established

17 under paragraph (1) shall be adequate to

18 ensure that, to the maximum extent prac19 ticable consistent with the needs of the

20 Federal Government in conducting pro21 curements—

22 (A) cost or price is an evaluation

23 factor of sufficient weight to affect

24 each source selection decision; and
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1 (B) competition among competing

2 offerors is affected by cost or price.

3 TITLE III—AMENDMENTS RELAT4 ING TO TITLE 10, UNITED

5 STATES CODE

6 SEC. 301. SOURCE SELECTION FACTORS.

7 Paragraph (3) of section 2305(a) of title 10,

8 United States Code, is amended to read as fol9 lows:

10 ‘‘(3)(A) In prescribing the evaluation fac11 tors to be included in each solicitation for

12 competitive proposals, the head of an agen13 cy—

14 ‘‘(i) shall clearly establish the relative

15 importance assigned to the evaluation

16 factors and subfactors, including the

17 quality of the product or services to be

18 provided (including technical capability,

19 management capability, and prior experi20 ence of the offeror);

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

22 Government as an evaluation factor that

23 must be considered in the evaluation of

24 proposals; and
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1 ‘‘(iii) shall, at a minimum, disclose to

2 offerors whether all evaluation factors

3 other than price or cost, when combined,

4 are—

5 ‘‘(I) significantly more important

6 than price or cost,

7 ‘‘(II) approximately equal in im8 portance to price or cost, or

9 ‘‘(III) significantly less important

10 than price or cost.

11 ‘‘(B) Nothing in this paragraph prohibits

12 an agency from—

13 ‘‘(i) providing additional information

14 in a solicitation, including numeric

15 weights for all evaluation factors; or

16 ‘‘(ii) stating in a solicitation that

17 award will be made to the offeror that

18 meets the solicitation’s mandatory re19 quirements at the lowest price or cost.’’.

20 SEC. 302. TRUTH IN NEGOTIATIONS.

21 Section 2306a(c) of title 10, United States

22 Code, is amended to read as follows:

23 ‘‘(c) AUTHORITY TO REQUIRE COST OR PRIC24 ING DATA.—When cost or pricing data need not

25 be required to be submitted pursuant to sub-
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1 section (b), such data shall not be required to

2 be submitted unless the head of the agency

3 determines that such data are necessary for

4 the evaluation by the agency of the reason5 ableness of the price of the contract or sub6 contract. In any case in which the head of the

7 agency requires such data to be submitted

8 under this subsection, the head of the agency

9 shall document in writing the reasons for

10 such requirement.’’.

11 TITLE IV—BROOKS ACT

12 AMENDMENTS

13 SEC. 401. SHORT TITLES OF CERTAIN PROVISIONS OF FED14 ERAL PROPERTY AND ADMINISTRATIVE

15 SERVICES ACT OF 1949.

16 (a) AUTOMATIC DATA PROCESSING EQUIP17 MENT PROVISIONS.—Section 111 of the Federal

18 Property and Administrative Services Act of

19 1949 (40 U.S.C. 759) is amended by adding at

20 the end the following new subsection:

21 ‘‘(i) This section may be cited as the

22 ‘Brooks Automatic Data Processing Act’.’’.

23 (b) ARCHITECTURAL AND ENGINEERING SERV24 ICES PROVISIONS.—Title IX of the Federal

25 Property and Administrative Services Act of
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1 1949 (40 U.S.C. 541–544) is amended by adding

2 at the end the following new section:

3 ‘‘SEC. 905. SHORT TITLE.

4 ‘‘This title may be cited as the ‘Brooks

5 Architect-Engineers Act’.’’.

6 SEC. 402. DISMISSAL; AWARD OF COSTS.

7 Section 111(f)(4) of the Federal Property

8 and Administrative Services Act of 1949 (40

9 U.S.C. 759(f)(4)) is amended by striking sub10 paragraph (C) and inserting the following:

11 ‘‘(C) The board may dismiss a protest that

12 the board determines—

13 ‘‘(i) is frivolous,

14 ‘‘(ii) has been brought in bad faith, or

15 ‘‘(iii) on its face does not state a valid

16 basis for protest.

17 ‘‘(D) If a party violates or fails to comply

18 in good faith with, or causes a violation of or

19 failure to comply in good faith with, an order

20 or decision of the board, the board may re21 quire that party to pay to any other party the

22 amount of any reasonable costs, including at23 torney’s fees, incurred by the other party in

24 seeking compliance with such order or deci25 sion.’’.
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1 SEC. 403. OVERSIGHT OF ACQUISITION OF AUTOMATIC

2 DATA PROCESSING EQUIPMENT BY FEDERAL

3 AGENCIES.

4 Section 111 of the Federal Property and

5 Administrative Services Act of 1949 (40 U.S.C.

6 759), as amended by this Act, is further

7 amended by inserting after subsection (g) the

8 following new subsection:

9 ‘‘(h)(1) The Administrator shall collect and

10 compile data from Federal agencies regarding

11 the procurement of automatic data processing

12 equipment under this section. That data shall

13 include, at a minimum, with regard to those

14 procurements specified by the Administrator

15 in regulation—

16 ‘‘(A) the procuring agency,

17 ‘‘(B) the contractor,

18 ‘‘(C) the automatic data processing

19 equipment and services procured,

20 ‘‘(D) the manufacturer of the equip21 ment procured,

22 ‘‘(E) the amount of the contract,

23 ‘‘(F) the type of contract used,

24 ‘‘(G) the extent of competition for

25 award,

26 ‘‘(H) compatibility restrictions, and
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1 ‘‘(I) significant modifications of the

2 contract.

3 ‘‘(2) The head of each Federal agency shall

4 report to the Administrator in accordance

5 with regulations issued by the Administrator

6 all information required to be compiled by the

7 Administrator under paragraph (1).

8 ‘‘(3) The Administrator—

9 ‘‘(A) shall carry out a systematic re10 view and conduct periodic audits of in11 formation received under this subsection;

12 ‘‘(B) shall use such information as ap13 propriate to determine the compliance of

14 Federal agencies with the requirements

15 of this section; and

16 ‘‘(C) may suspend the delegation to an

17 agency of authority to lease and purchase

18 automatic data processing equipment

19 upon any substantial failure by the head

20 of the agency to report to the Adminis21 trator in accordance with this subsection.

22 ‘‘(4) The Administrator shall, upon receipt

23 of information that a Federal agency has

24 failed to comply with the terms of any delega25 tion of authority to lease or purchase auto-
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1 matic data processing equipment or has failed

2 to comply with any applicable law or regula3 tion, take appropriate corrective action.

4 ‘‘(5) Data collected pursuant to this sec5 tion shall be drawn from existing Federal

6 agency information resources, and no new or

7 additional information reporting require8 ments may be imposed on offerors or contrac9 tors for that purpose.’’.

10 SEC. 404. EFFECTIVE DATE.

11 The amendments made by this title shall

12 take effect on the date which is 180 days after

13 the date of the enactment of this title.

14 TITLE V—MISCELLANEOUS

15 PROVISIONS

16 SEC. 501. PROCUREMENT PROTEST SYSTEM IMPROVE17 MENTS.

18 (a) GAO RECOMMENDATIONS ON PRO19 TESTS.—Section 3554 of title 31, United States

20 Code, is amended—

21 (1) in subsection (b) by adding at the

22 end the following new paragraph:

23 ‘‘(3) The head of the procuring activity re24 sponsible for the solicitation, proposed

25 award, or award of a contract shall report to
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1 the Comptroller General if the Federal agency

2 has not fully implemented recommendations

3 of the Comptroller General under this sub4 section with respect to that contract within 60

5 days after receiving the recommendations, by

6 not later than the end of that 60-day period.’’;

7 (2) in subsection (c)(1) by striking

8 ‘‘declare an appropriate interested party

9 to be entitled to’’ and inserting ‘‘rec10 ommend that the Federal agency con11 ducting the procurement pay to an ap12 propriate interested party’’;

13 (3) by amending subsection (c)(2) to

14 read as follows:

15 ‘‘(2) If the Comptroller General rec16 ommends under paragraph (1) that a Federal

17 agency pay an amount of costs to an inter18 ested party, the Federal agency shall—

19 ‘‘(A) pay the amount promptly out of

20 amounts appropriated by section 1304 of

21 this title for the payment of judgments,

22 and reimburse that appropriation ac23 count out of available funds or by obtain24 ing additional appropriations for that

25 purpose, or
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1 ‘‘(B) report to the Comptroller Gen2 eral promptly why the recommendation

3 will not be followed by the agency.’’.

4 (4) by adding at the end of subsection

5 (c) the following new paragraph:

6 ‘‘(3) An interested party to which the

7 Comptroller General has recommended that

8 costs be paid under paragraph (1) and the

9 Federal agency recommended to pay those

10 costs shall attempt to reach agreement on the

11 amount of the costs to be paid, but if they are

12 unable to agree, a party may request that the

13 Comptroller General recommend the amount

14 of the costs to be paid.’’; and

15 (5) by amending subsection (e) to

16 read as follows:

17 ‘‘(e)(1) The Comptroller General shall re18 port promptly to the Committee on Govern19 ment Operations and the Committee on Ap20 propriations of the House of Representatives

21 and to the Committee on Governmental Af22 fairs and the Committee on Appropriations of

23 the Senate in any case in which a Federal

24 agency fails to implement fully a rec25 ommendation of the Comptroller General
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1 under subsection (b) or (c). The report shall

2 include—

3 ‘‘(A) a comprehensive review of the

4 pertinent procurement, including the cir5 cumstances of the failure of the Federal

6 agency to implement a recommendation

7 of the Comptroller General, and

8 ‘‘(B) a recommendation regarding

9 whether, in order to correct inequity or

10 to preserve the integrity of the procure11 ment process, the Congress should con12 sider—

13 ‘‘(i) private relief legislation;

14 ‘‘(ii) legislative rescission or can15 cellation of funds;

16 ‘‘(iii) further investigation by the

17 Congress; or

18 ‘‘(iv) other action.

19 ‘‘(2) Not later than January 31 of each

20 year, the Comptroller General shall transmit

21 to the Congress a summary report describing

22 each instance in which a Federal agency did

23 not fully implement a recommendation of the

24 Comptroller General under subsection (b) or

25 (c) during the preceding year.’’.
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1 (b) RATIFICATION OF PRIOR AWARDS.—

2 Amounts to which the Comptroller General

3 declared an interested party to be entitled

4 under section 3554 of title 31, United States

5 Code, as in effect immediately before the en6 actment of this Act, shall, if not paid or other7 wise satisfied by the Federal agency con8 cerned before the date of the enactment of

9 this Act, be paid promptly from the appro10 priation made by section 1304 of title 31, Unit11 ed States Code, for the payment of judgments,

12 and the Federal agency shall reimburse that

13 appropriation account out of available funds

14 or by obtaining additional appropriations for

15 that purpose.

16 (c) EFFECTIVE DATE.—The amendments

17 made by subsection (a) shall take effect at the

18 end of the 45-day period beginning on the

19 date of the enactment of this Act.

20 (d) RESTRICTION ON ACCESS TO CERTAIN IN21 FORMATION.—Section 3553(f) of title 31, United

22 States Code, is amended—

23 (1) by inserting ‘‘(1)’’ after ‘‘(f)’’; and

24 (2) by adding at the end the follow25 ing:
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1 ‘‘(2)(A) The Comptroller General may

2 issue protective orders which establish terms,

3 conditions, and restrictions for the provision

4 of any document to a person under paragraph

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

6 the person of information described in sub7 paragraph (C) that is contained in such a doc8 ument.

9 ‘‘(B) The penalties specified under section

10 27(i) of the Office of Federal Procurement Pol11 icy Act shall apply to the disclosure of infor12 mation described in subparagraph (C) in vio13 lation of a term, condition, or restriction in a

14 protective order under this paragraph by a

15 person that is subject to the protective order.

16 ‘‘(C) Information referred to in subpara17 graphs (A) and (B) is procurement sensitive

18 information, trade secrets, or other propri19 etary or confidential research, development,

20 or commercial information.

21 ‘‘(D) A protective order under this para22 graph shall not be considered to authorize the

23 withholding of any document or information

24 from the Congress or an executive agency.’’.
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1 SEC. 502. POST-AWARD DEBRIEFINGS.

2 (a) AMENDMENT TO OFFICE OF FEDERAL

3 PROCUREMENT POLICY ACT.—The Office of Fed4 eral Procurement Policy Act (41 U.S.C. et seq.)

5 is amended by adding at the end the following

6 new section:

7 ‘‘SEC. 29. POST-AWARD DEBRIEFINGS.

8 ‘‘(a) DEBRIEFING GUIDELINES.—The Federal

9 Acquisition Regulation shall be revised to in10 clude guidelines for the debriefing of unsuc11 cessful offerors for any contract for an

12 amount in excess of the small purchase

13 threshold which was awarded on a basis

14 other than price alone. Such guidelines shall

15 require that such a debriefing—

16 ‘‘(1) shall occur if a written request

17 by an unsuccessful offeror for a contract

18 is submitted within 5 days after the date

19 of the award of the contract;

20 ‘‘(2) shall be completed within 5 days

21 after the date of the submission of such a

22 request; and

23 ‘‘(3) to the maximum extent prac24 ticable, shall include at least the follow25 ing:
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1 ‘‘(A) A detailed review of the

2 offeror’s proposal in relation to the

3 evaluation factors and subfactors

4 specified in the solicitation for the

5 contract, including identification of

6 any weaknesses and strengths of the

7 proposal, results of any past perform8 ance analyses, and cost realism as9 sessment.

10 ‘‘(B) A description of the rationale

11 for the award of the contract.

12 ‘‘(C) The overall evaluated cost

13 and combined technical and cost

14 scores of the awardee and the de15 briefed offeror, and the technical

16 point scores of the awardee and the

17 debriefed offeror.

18 ‘‘(D) The overall ranking of all

19 offerors.

20 ‘‘(b) INFORMATION NOT PROVIDED.—A de21 briefing under subsection (a) shall not make

22 point-by-point comparisons with other

23 offerors’ proposals and shall not disclose any

24 information that is not subject to disclosure
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1 under section 552 of title 5, United States

2 Code, including information relating to—

3 ‘‘(1) trade secrets;

4 ‘‘(2) privileged or confidential manu5 facturing processes and techniques; and

6 ‘‘(3) commercial and financial infor7 mation that is privileged or confidential,

8 including cost breakdowns, profit, indi9 rect cost rates, and similar information.

10 ‘‘(c) NOTIFICATION OF DISCLOSURE.—Each

11 solicitation for contracts subject to subsection

12 (a) shall notify participating offerors that the

13 categories of information described in sub14 section (a)(3) may be disclosed by the Govern15 ment in post-award debriefings.’’.

16 (b) PERIOD FOR FILING PROTEST.—

17 (1) IN GENERAL.—Section 3553(d) of

18 title 31, United States Code, is amended

19 by adding at the end the following:

20 ‘‘(3)(A) In the case of protest submitted by

21 a person provided a debriefing with respect

22 to a contract, paragraph (1) shall be applied

23 by substituting for ‘but within 10 days of the

24 date of the contract award’ the following: ‘but

25 before the later of the date that is 10 days
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1 after the date of the contract award or the

2 date that is 3 working days after the date of

3 completion of a debriefing regarding the con4 tract’.

5 ‘‘(B) In this paragraph the term ‘debrief6 ing’ means a debriefing under the guidelines

7 required under section 29 of the Office of Fed8 eral Procurement Policy Act.’’.

9 (2) BROOKS AUTOMATIC DATA PROCESS10 ING ACT PROTESTS.—Section 111(f)(3) of the

11 Federal Property and Administrative

12 Services Act of 1949 (40 U.S.C. 749(f)(3)) is

13 amended by adding at the end the follow14 ing:

15 ‘‘(C)(i) In the case of protest filed by a per16 son provided a debriefing with respect to a

17 contract, subparagraph (A) shall be applied

18 by substituting for ‘but within 10 days after

19 the contract award’ the following: ‘but before

20 the later of the date that is 10 days after the

21 date of the contract award or the date that is

22 3 working days after the date of completion

23 of a debriefing regarding the contract’.

24 ‘‘(ii) In this subparagraph the term ‘de25 briefing’ means a debriefing under the guide-
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1 lines required under section 29 of the Office

2 of Federal Procurement Policy Act.’’.

3 (c) ISSUANCE OF REVISION.—The Federal

4 Acquisition Regulatory Council shall issue a

5 final revision of the Federal Acquisition Regu6 lation implementing section 29 of the Office of

7 Federal Procurement Policy Act, as added by

8 subsection (a), not later than 180 days after

9 the date of the enactment of this Act.

10 (d) APPLICATION.—Section 29 of the Office

11 of Federal Procurement Policy Act, as added

12 by subsection (a), shall apply with respect to

13 solicitations for contracts issued after the ex14 piration of the 180-day period beginning on

15 the date of the enactment of this Act.

16 SEC. 503. USE OF SMALL PURCHASE PROCEDURES FOR

17 PROCUREMENTS CONDUCTED THROUGH

18 FEDERAL ACQUISITION COMPUTER NET19 WORK SYSTEMS; IMPLEMENTATION OF SYS20 TEMS.

21 (a) INCREASE IN SMALL PURCHASE THRESH22 OLD.—

23 (1) IN GENERAL.—Section 4 of the Of24 fice of Federal Procurement Policy Act
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1 (41 U.S.C. 403), as amended by section

2 122(a), is further amended—

3 (A) by striking paragraph (11) and

4 inserting the following:

5 ‘‘(11) the term ‘small purchase thresh6 old’ means—

7 ‘‘(A) $25,000, except as provided in

8 subparagraphs (B) and (C);

9 ‘‘(B) $50,000, in the case of a pro10 curement—

11 ‘‘(i) that is conducted by a

12 procuring activity that has imple13 mented FACNET system architec14 tural capabilities in accordance

15 with the requirements under sec16 tion 30(f)(1)(A) and (B)(i); and

17 ‘‘(ii) in which notices of solici18 tation for all contracting opportu19 nities are issued through a

20 FACNET system; or

21 ‘‘(C) $100,000, in the case of a pro22 curement—

23 ‘‘(i) that is conducted by a

24 procuring activity that has imple25 mented FACNET system architec-
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1 tural capabilities in accordance

2 with the requirements under sec3 tion 30(f)(1)(A) and (B)(i), (ii), (iii),

4 and (iv); and

5 ‘‘(ii) in which—

6 ‘‘(I) notices of solicitation

7 for all contracting opportuni8 ties are issued through a

9 FACNET system,

10 ‘‘(II) responses to solicita11 tions and requests for infor12 mation may be submitted to

13 the procuring activity

14 through such system,

15 ‘‘(III) information pursu16 ant to those requests is avail17 able through such system,

18 ‘‘(IV) orders are made

19 through such system, and

20 ‘‘(V) public notice of

21 awards is provided through

22 such system;

23 except that the dollar amount in each of

24 subparagraphs (A), (B), and (C) shall be

25 adjusted on October 1 of each year divis-
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1 ible by 5 to the equivalent amount in con2 stant fiscal year 1993 dollars (rounded to

3 the nearest $1,000);’’

4 (B) by striking the period at the

5 end of paragraph (12) and inserting ‘‘;

6 and’’; and

7 (C) by adding at the end the fol8 lowing new paragraph:

9 ‘‘(13) the term ‘FACNET system’

10 means such a system developed in ac11 cordance with the FACNET system archi12 tecture established by the Administrator

13 under section 30.’’.

14 (2) EFFECTIVE DATE.—The amendments

15 made by paragraph (1) shall take effect

16 on, and apply to solicitations made and

17 orders placed on or after, the expiration

18 of the 60-day period beginning on the

19 date of issuance in final form of revisions

20 to the Federal Acquisition Regulation

21 under subsection (b).

22 (3) INTERIM RULE.—Notwithstanding

23 paragraphs (1) and (2), during the 5-year

24 period beginning on the date of the issu25 ance in final form of revisions to the Fed-
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1 eral Acquisition Regulation under sub2 section (b), procuring activities shall con3 tinue to report, pursuant to section 19(d)

4 of the Office of Federal Procurement Pol5 icy Act (41 U.S.C. 417(d)), procurement

6 awards with a dollar value of at least

7 $25,000, but less than $100,000, in con8 formity with the procedures for the re9 porting of a contract award in excess of

10 $25,000 in effect on May 24, 1993.

11 (b) IMPROVED SMALL PURCHASE PROCE12 DURES.—

13 (1) REVISION OF FAR.—The Federal Ac14 quisition Regulation shall be revised to

15 ensure that—

16 (A) procuring activities of execu17 tive agencies comply with the re18 quirements of section 8(a) of the

19 Small Business Act (15 U.S.C. 637(a))

20 and section 2323 of title 10, United

21 States Code, in awarding any con22 tract with a price exceeding $25,000;

23 (B) the authority under part

24 13.106(a)(1) of the Federal Acquisition

25 Regulation (48 C.F.R. 13.106(a)(1)), as
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1 in effect on May 19, 1993, to make

2 purchases without securing competi3 tive quotations does not apply to any

4 purchases with a price exceeding

5 $2,500; and

6 (C) procuring activities of execu7 tive agencies comply with the re8 quirements of section 15(j) of the

9 Small Business Act (15 U.S.C. 644), re10 lating to the small business reserve,

11 in awarding any contract with a price

12 below the small purchase threshold.

13 (2) NOTICE REQUIRED REGARDING ORAL

14 SOLICITATIONS.—Section 18(a)(1)(B) of the

15 Office of Federal Procurement Policy Act

16 (41 U.S.C. 416(a)(1)(B)) is amended in the

17 matter preceding clause (i)—

18 (A) by inserting ‘‘(including orally

19 or by any other means)’’ after ‘‘in20 tending to solicit’’; and

21 (B) by inserting after ‘‘ten days’’

22 the following: ‘‘before contract award

23 (except for any procurement in which

24 public notice of contract opportuni25 ties for the acquisition of property or
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1 services by a procuring activity of an

2 executive agency is performed

3 through a FACNET system)’’.

4 (3) PARTICIPATION BY ALL RESPONSIBLE

5 SMALL BUSINESS CONCERNS.—Section 18 of

6 the Office of Federal Procurement Policy

7 Act (41 U.S.C. 416) is amended by adding

8 at the end the following:

9 ‘‘(e) An executive agency intending to so10 licit offers for a contract for which a notice

11 of solicitation is required to be posted under

12 subsection (a)(1)(B) shall ensure that all small

13 business concerns are permitted to respond to

14 solicitations for the contract within the time

15 specified in the solicitations.’’.

16 (c) PERFORMANCE TEST AND REPORT.—

17 (1) PERFORMANCE TEST.—The Comp18 troller General of the United States shall

19 monitor and collect data on the results of

20 the amendments made by subsection

21 (a)(1), to ascertain the effects of the

22 amendments on the participation of small

23 business concerns (including small busi24 ness concerns owned and controlled by

25 socially and economically disadvantaged
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1 individuals) in procurement awards of

2 less than $100,000 and the benefits and

3 detriments, if any, to the buying activi4 ties of the various Executive agencies.

5 (2) DATA TO BE COLLECTED.—Data col6 lected under paragraph (1) shall include

7 data regarding whether the amendments

8 made by subsection (a)(1) have improved

9 the acquisition process in terms of re10 duced paperwork, financial or other sav11 ings to the Government, and any increase

12 in the number of contractors participat13 ing in the contracting process.

14 (3) PERIOD.—Data shall be collected

15 for purposes of paragraph (1) during the

16 period beginning with the first full fiscal

17 year quarter after the effective date of

18 the amendments made by subsection

19 (a)(1) and ending September 30, 1996.

20 (4) REPORT.—By March 1, 1997, the

21 Comptroller General of the United States

22 shall report to the Committee on Govern23 ment Operations of the House of Rep24 resentatives, the Committee on Govern25 mental Affairs of the Senate, and the
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1 Committees on Small Business of the

2 House of Representatives and the Senate

3 on the effects of the increase in the small

4 purchase threshold made by the amend5 ments made by subsection (a)(1).

6 (d) FUNCTIONS OF ADMINISTRATOR FOR FED7 ERAL PROCUREMENT POLICY.—Section 6(d) of

8 the Office of Federal Procurement Policy Act

9 (41 U.S.C. 405(d)) is amended—

10 (1) in paragraph (7) by striking ‘‘and’’

11 after the semicolon at the end; and

12 (2) by redesignating paragraph (8) as

13 paragraph (10) and inserting after para14 graph (7) the following:

15 ‘‘(8) developing policies, in consulta16 tion with the Administrator of the Small

17 Business Administration, that ensure that

18 small businesses and small businesses

19 owned and controlled by socially and eco20 nomically disadvantaged persons are pro21 vided with the maximum practicable op22 portunities to participate in procure23 ments that are conducted below the small

24 purchase threshold;
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1 ‘‘(9) developing policies that will pro2 mote achievement of goals for participa3 tion by small businesses and small busi4 nesses owned and controlled by socially

5 and economically disadvantaged individ6 uals; and’’.

7 (e) IMPLEMENTATION OF ELECTRONIC DATA

8 INTERCHANGE FOR PROCUREMENT INFORMA9 TION.—The Office of Federal Procurement Pol10 icy Act (41 U.S.C. 401 et seq.) is further amend11 ed by adding after section 29 (as added by sec12 tion 502) the following:

13 ‘‘SEC. 30. ELECTRONIC INTERCHANGE OF PROCUREMENT

14 INFORMATION.

15 ‘‘(a) IN GENERAL.—The Administrator, in

16 consultation with the Office of Information

17 and Regulatory Affairs, shall establish a pro18 gram and assign a program manager for, and

19 provide overall direction of policy and leader20 ship in, the development, coordination, instal21 lation, operation, and completion of imple22 mentation by executive agencies, by not later

23 than 5 years after the date of the enactment

24 of the Federal Acquisition Improvement Act

25 of 1993, of a Federal Acquisition Computer
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1 Network system architecture. Any system de2 veloped in accordance with this architecture

3 shall be known as a ‘FACNET system’. The

4 FACNET system architecture shall involve en5 abling technology and procurement elec6 tronic data interchange transaction sets. The

7 enabling technology shall consist of a com8 puter network, supporting data bases, and

9 standard interfaces that interconnect Govern10 ment automated systems to the network. The

11 procurement electronic data interchange

12 transaction sets shall facilitate the electronic

13 interchange of standard procurement infor14 mation between Government and industry

15 automated acquisition systems.

16 ‘‘(b) FUNCTIONS OF ADMINISTRATOR OF GEN17 ERAL SERVICES.—The Administrator of Gen18 eral Services shall do the following:

19 ‘‘(1) Provide technical support for

20 FACNET systems by doing the following:

21 ‘‘(A) Coordinate with the Adminis22 trator to facilitate the efficient and

23 widespread implementation of var24 ious FACNET systems by executive

25 agencies. This shall include interfac-
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1 ing FACNET systems to other sys2 tems, such as the Government bank

3 card and Electronic Funds Transfer

4 payment systems.

5 ‘‘(B) Assist the Director of the Na6 tional Institute of Standards and

7 Technology in the development and

8 application of appropriate Federal In9 formation Processing Standards.

10 ‘‘(C) Prepare a technical plan for

11 coordinating the design, develop12 ment, implementation, operation, and

13 maintenance of the FACNET system

14 architecture. The plan shall include

15 roles and responsibilities, major mile16 stones, cost estimates, and perform17 ance requirements.

18 ‘‘(2) Ensure compliance with section

19 111 of the Federal Property and Adminis20 trative Services Act of 1949 in the imple21 mentation of FACNET systems by execu22 tive agencies, including by limiting the

23 scope of delegations under subsection (a)

24 of that section.
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1 ‘‘(3) Evaluate progress by executive

2 agencies in implementing FACNET sys3 tems, and recommend changes in that im4 plementation to the program manager as5 signed by the Administrator under sub6 section (a).

7 ‘‘(4) Submit to the Congress, on the

8 date that is one year after the date of the

9 enactment of the Federal Acquisition Im10 provement Act of 1993 and on that date

11 in each of the 5 years thereafter, a report

12 on the overall progress by the executive

13 branch of the Government and by each

14 executive agency in implementing the

15 FACNET system architecture.

16 ‘‘(c) IMPLEMENTATION OF FACNET SYSTEMS

17 BY EXECUTIVE AGENCIES.—

18 ‘‘(1) IN GENERAL.—The head of each

19 executive agency shall cooperate with the

20 Administrator and the Administrator of

21 General Services to implement FACNET

22 systems for the agency.

23 ‘‘(2) DESIGNATION OF AGENCY PROGRAM

24 MANAGER.—
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1 ‘‘(A) DESIGNATION.—The head of

2 each executive agency shall designate

3 a program manager to implement

4 FACNET systems for the agency and

5 otherwise implement this section.

6 ‘‘(B) FUNCTIONS.—A program man7 ger designated under this paragraph

8 for an executive agency shall—

9 ‘‘(i) report directly to the sen10 ior procurement executive des11 ignated for the agency under sec12 tion 16(4);

13 ‘‘(ii) be responsible for the

14 timely and cost-effective imple15 mentation of the FACNET system

16 architecture for the agency in a

17 manner that is responsive to the

18 procurement needs of the agency,

19 national business needs, and the

20 public’s interest in open govern21 ment;

22 ‘‘(iii) develop plans for phas23 ing-in the implementation of

24 FACNET systems for the procur25 ing activities of the executive
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1 agency and phasing-out local net2 work systems that perform com3 parable procurement functions;

4 ‘‘(iv) participate in the inter5 agency development of standard

6 procurement electronic data

7 interchange transaction sets; and

8 ‘‘(v) in carrying out this sec9 tion, comply with guidelines is10 sued by the Administrator under

11 this section and program direc12 tives issued by the Administrator

13 of General Services under section

14 111 of the Federal Property and

15 Administrative Services Act of

16 1949.

17 ‘‘(d) FUNCTIONS OF NATIONAL INSTITUTE OF

18 STANDARDS AND TECHNOLOGY.—The Director of

19 the National Institute of Standards and Tech20 nology shall—

21 ‘‘(1) ensure that the FACNET system

22 architecture complies with Federal Infor23 mation Processing Standards;
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1 ‘‘(2) issue additional standards for the

2 FACNET system architecture as nec3 essary; and

4 ‘‘(3) establish tests to facilitate the

5 aims of this section and support policies

6 established by the Administrator under

7 this section.

8 ‘‘(e) FUNCTIONS OF SMALL BUSINESS ADMIN9 ISTRATION.—The Administrator of the Small

10 Business Administration shall—

11 ‘‘(1) develop plans to coordinate and

12 promote the use of FACNET systems by

13 small businesses, that incorporate out14 reach efforts by the Small Business Ad15 ministration, agency Offices of Small and

16 Disadvantaged Business and Utilization,

17 Small Business Development Centers,

18 and other appropriate organizations; and

19 ‘‘(2) inform and provide consistent

20 and comprehensive FACNET system

21 training for small businesses.

22 ‘‘(f) FACNET SYSTEM COMPATIBILITY

23 STANDARDS.—

24 ‘‘(1) IN GENERAL.—The Administrator,

25 in consultation with the Office of Infor-
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1 mation and Regulatory Affairs, the Ad2 ministrator of General Services, the Ad3 ministrator of the Small Business Admin4 istration, and the Director of the Na5 tional Institute of Standards and Tech6 nology, shall prescribe policies for ensur7 ing convenient and universal access to

8 FACNET systems, and shall develop a set

9 of system compatibility standards for

10 each FACNET system interface and

11 FACNET system support data base. The

12 system compatibility standards shall

13 specify the functional capabilities of each

14 FACNET system interface, and the mini15 mum set of data elements of each

16 FACNET system support data base. The

17 system compatibility standards shall en18 sure that the following FACNET system

19 functions are satisfactorily performed by

20 each executive agency, executive agency

21 component, or procuring activity:

22 ‘‘(A) Provision of widespread pub23 lic notice of solicitations for contract

24 opportunities issued by the agency,

25 component, or activity and of orders
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1 to be made by the agency, component,

2 or activity below the small purchase

3 threshold.

4 ‘‘(B) Allowing private users to

5 electronically—

6 ‘‘(i) selectively access and re7 view solicitations issued by the

8 agency, component, or activity;

9 ‘‘(ii) respond to solicitations

10 issued by the agency, component,

11 or activity;

12 ‘‘(iii) receive orders from the

13 agency, component, or activity;

14 and

15 ‘‘(iv) access information on

16 contract awards made by the

17 agency, component, or activity.

18 ‘‘(2) BINDING STANDARDS.—The

19 FACNET system interface and FACNET

20 system support data base of each procur21 ing activity shall comply with the system

22 compatibility standards developed under

23 paragraph (1), except to the extent the

24 Administrator has waived application of
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1 such standards to the activity under

2 paragraph (3).

3 ‘‘(3) WAIVERS.—

4 ‘‘(A) IN GENERAL.—The Adminis5 trator may, in writing, waive the ap6 plication of any system compatibility

7 standard to a procuring activity if the

8 Administrator—

9 ‘‘(i) determines that compli10 ance with the standard by the

11 procuring activity would ad12 versely affect the accomplishment

13 of the mission of the activity or

14 cause a major adverse financial

15 impact on the activity which is

16 not offset by Government-wide

17 savings; and

18 ‘‘(ii) approves a plan, devel19 oped by the procuring activity,

20 for complying with the standard

21 by not later than 1 year after the

22 issuance of the waiver.

23 ‘‘(B) AUTHORITY NON-DELEGABLE.—

24 The authority of the Administrator to
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1 issue waivers under this paragraph

2 may not be delegated.

3 ‘‘(C) REQUEST FOR WAIVER.—A

4 waiver under this paragraph may be

5 issued by the Administrator only

6 after receipt of a request for the

7 waiver submitted by the program

8 manager designated under subsection

9 (c)(2)(A) for the procuring activity for

10 which the waiver is requested.

11 ‘‘(D) NOTICE OF WAIVER.—The Ad12 ministrator shall promptly submit a

13 notice of each waiver under this

14 paragraph to the Committee on Gov15 ernment Operations of the House of

16 Representatives and the Committee

17 on Governmental Affairs of the Sen18 ate, and promptly publish the notice

19 in the Federal Register.’’.

20 (f) TECHNICAL CORRECTIONS.—

21 (1) Section 18(d) of the Office of Fed22 eral Procurement Policy Act (41 U.S.C.

23 416) is amended by striking ‘‘(e)’’ in the

24 first sentence and inserting ‘‘(a)’’.
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1 (2) Section 18(a)(1) of the Office of

2 Federal Procurement Policy Act (41

3 U.S.C. 416(a)(1)) is amended—

4 (A) in subparagraph (A) in the

5 matter following clause (ii) by strik6 ing ‘‘notice’’ and inserting ‘‘notice of

7 solicitation’’; and

8 (B) in subparagraph (B) in the

9 matter preceding clause (i) by strik10 ing ‘‘a notice of solicitation described

11 in subsection (f)’’ and inserting ‘‘a no12 tice of solicitation described in sub13 section (b)’’.

14 SEC. 504. TEST PROGRAM.

15 (a) IN GENERAL.—The Administrator for

16 Federal Procurement Policy (in this section

17 referred to as the ‘‘Administrator’’) may con18 duct a program of tests of alternative and in19 novative procurement procedures. To the ex20 tent consistent with this section, such pro21 gram shall be conducted consistent with sec22 tion 15 of the Office of Federal Procurement

23 Policy Act (41 U.S.C. 413). No more than 6

24 such tests shall be conducted under this au25 thority.
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1 (b) DESIGNATION OF AGENCIES.—Each test

2 conducted pursuant to subsection (a) shall be

3 limited to not more than 2 specific contract4 ing activities in an agency designated by the

5 Administrator. Each agency so designated

6 shall select the contracting activities partici7 pating in the test with the approval of the Ad8 ministrator and shall designate a procure9 ment testing official who shall be responsible

10 for the conduct and evaluation of tests within

11 that agency.

12 (c) TEST REQUIREMENTS.—Tests conducted

13 under subsection (a)—

14 (1) shall be developed and structured

15 by the Administrator or by the agency

16 senior procurement executives des17 ignated pursuant to section 16(4) of the

18 Office of Federal Procurement Policy Act,

19 as redesignated by section 111 of this Act,

20 in close coordination with the Adminis21 trator;

22 (2) shall be for a period of not greater

23 than 4 years;
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1 (3) shall be limited to specific pro2 grams of agencies or specific acquisi3 tions;

4 (4) may not include any test with a

5 total estimated life-cycle cost to the Gov6 ernment greater than $100,000,000;

7 (5) shall include—

8 (A) a test by the National Aero9 nautics and Space Administration of

10 simplified procurement procedures

11 for acquisitions with an estimated an12 nual total obligation of funds of

13 $500,000 or less;

14 (B) a test by the General Services

15 Administration of expedited methods

16 for procuring automatic data process17 ing equipment commodities;

18 (C) a test by at least one agency

19 of streamlined procedures for com20 petition among interested sources

21 participating in the tailoring of a so22 licitation for the purchase of commer23 cial products; and

24 (D) a test of commercial item ac25 quisition procedures in which all
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1 evaluation factors and subfactors on

2 which a contract award will be based

3 are disclosed in the solicitation, iden4 tifying both the absolute and relative

5 weight for each factor and each

6 subfactor; and

7 (6) shall not include any procurement

8 the cost of which is expected to exceed

9 $5,000,000 (including options).

10 (d) LIMITATION ON TOTAL VALUE OF CON11 TRACTS UNDER PROGRAM.—

12 (1) LIMITATION.—The Administrator

13 shall ensure that the total amount obli14 gated under contracts awarded pursuant

15 to the program under this section does

16 not exceed §$600,000,000.

17 (2) MONITORING.—The Administrator

18 shall monitor the value of contracts

19 awarded pursuant to the program under

20 this section.

21 (3) PROHIBITION ON AWARDS IN EXCESS

22 OF LIMIT.—No contract may be awarded

23 under the program under this section if

24 the award of the contract would result in
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1 obligation of more than $600,000,000

2 under contracts under this section.

3 (e) PROCEDURES AUTHORIZED.—Tests con4 ducted under this section may include tests of

5 any of the following procedures:

6 (1) Publication of agency needs prior

7 to drafting of a solicitation.

8 (2) Screening of sources and competi9 tion among capable vendors.

10 (3) Issuance of draft solicitations for

11 comment.

12 (4) Streamlined solicitations, with a

13 minimized number of evaluation factors

14 and information required from vendors,

15 abbreviated periods for submission of of16 fers, and page limitations on offers.

17 (5) Limitation of source selection fac18 tors to—

19 (A) cost to the Government;

20 (B) past experience; and

21 (C) quality of the contents of the

22 offer.

23 (6) Evaluation of proposals by small

24 teams of highly qualified people, limited

25 to 30 days.
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1 (7) Competition among sources of

2 preevaluated products.

3 (8) Alternative notice and publication

4 requirements.

5 (9) A process in which—

6 (A) the competitive process is ini7 tiated by a notice in the Commerce

8 Business Daily synopsizing the needs

9 of the executive agency conducting

10 the test, in functional and perform11 ance terms, with other specifications

12 provided for guidance only;

13 (B) the notice invites interested

14 sources to submit information or sam15 ples showing their product’s suit16 ability for those needs (with price

17 quotations) or, if appropriate, show18 ing the sources’ technical capability,

19 past performance, product

20 supportability, or other qualifications

21 (with appropriate consideration to

22 rates and other cost-related factors);

23 (C) contracting officials develop a

24 request for proposals (including ap25 propriate specifications and evalua-
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1 tion criteria) after reviewing the sub2 mittals made by interested sources

3 and, if the officials determine nec4 essary, after consultation with those

5 sources; and

6 (D) the contract is awarded after

7 a streamlined competition limited to

8 all sources that timely provided prod9 uct information in response to the no10 tice or, if appropriate, to those

11 sources determined most capable

12 based on those qualification-based

13 factors included in an invitation to

14 submit information pursuant to sub15 paragraph (B).

16 (f) TEST PLAN.—Not later than 60 days be17 fore implementing any test program under

18 this section, the Administrator shall—

19 (1) provide a detailed test plan, in20 cluding lists of any regulations that are

21 to be waived, and any written determina22 tion under subsection (f)(1)(B) to the

23 Committee on Government Operations of

24 the House of Representatives and the
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1 Committee on Governmental Affairs of

2 the Senate;

3 (2) provide a copy of the plan to the

4 appropriate authorizing committees of

5 the House of Representatives and the

6 Senate; and

7 (3) publish the plan in the Federal

8 Register and provide an opportunity for

9 public comment.

10 (g) WAIVER OF PROCUREMENT REGULA11 TIONS.—

12 (1) IN GENERAL.—For purposes of a

13 test conducted under subsection (a), the

14 Administrator may waive—

15 (A) any provision of the Federal

16 Acquisition Regulation that is not re17 quired by statute; and

18 (B) any provision of the Federal

19 Acquisition Regulation that is re20 quired by a provision of law de21 scribed in paragraph (2), the waiver

22 of which the Administrator deter23 mines in writing to be necessary to

24 conduct any test of any of the 9 pro25 cedures described in subsection (e).
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1 (2) PROVISIONS OF LAW DESCRIBED.—

2 The provisions of law referred to in para3 graph (1) are the following:

4 (A) Section 3709 of the Revised

5 Statutes (41 U.S.C. 5).

6 (B) Section 3710 of the Revised

7 Statutes (41 U.S.C. 8).

8 (C) Section 3735 of the Revised

9 Statutes (41 U.S.C. 13).

10 (D) Section 310 of the Federal

11 Property and Administrative Services

12 Act of 1949 (41 U.S.C. 260).

13 (E) Section 303 of the Federal

14 Property and Administrative Services

15 Act of 1949 (41 U.S.C. 253).

16 (F) Section 2304 of title 10, United

17 States Code.

18 (G) Section 303A of the Federal

19 Property and Administrative Services

20 Act of 1949 (41 U.S.C. 253a).

21 (H) Section 303B of the Federal

22 Property and Administrative Services

23 Act of 1949 (41 U.S.C. 253b).

24 (I) Section 2305 of title 10, United

25 States Code.
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1 (J) Section 303C of the Federal

2 Property and Administrative Services

3 Act of 1949 (41 U.S.C. 253c).

4 (K) Section 2319 of title 10, United

5 States Code.

6 (L) Section 4(6) of the Office of

7 Federal Procurement Policy Act (41

8 U.S.C. 403(6)).

9 (M) Section 18 of the Office of

10 Federal Procurement Policy Act (41

11 U.S.C. 416).

12 (N) Sections 8(e), (f), and (g) of the

13 Small Business Act (15 U.S.C. 637(e),

14 (f), and (g)).

15 (h) REPORTS AND REVIEWS.—

16 (1) ADMINISTRATOR.—The Adminis17 trator shall report to the Congress on the

18 results of each test conducted under sub19 section (a).

20 (2) COMPTROLLER GENERAL.—The

21 Comptroller General of the United States

22 shall review each test conducted under

23 subsection (a) and report to the Congress

24 on each test and shall report annually to

25 the Congress on the conduct of and re-
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1 sults of all tests conducted under sub2 section (a).

3 (i) EXPIRATION OF AUTHORITY.—The author4 ity to conduct tests under this section and to

5 award contracts under such tests shall expire

6 on October 1, 1997. Contracts entered prior to

7 October 1, 1997, pursuant to a test shall re8 main in effect, notwithstanding the expira9 tion of the authority to conduct the test under

10 this section.

11 SEC. 505. SINGLE AUDIT UNDER BROOKS ARCHITECT-ENGI12 NEERS ACT.

13 Section 904 of the Federal Property and

14 Administrative Services Act of 1949 (40 U.S.C.

15 544) is amended by adding at the end the fol16 lowing:

17 ‘‘(d) An agency may not perform any pre18 award audit to evaluate proposed costs under

19 any contract, subcontract, or modification

20 awarded or made in accordance with this title

21 in any case in which the contracting officer

22 determines that the objectives of the audit

23 reasonably can be met by accepting the re24 sults of an audit conducted by a Federal Gov-
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1 ernment audit agency within the previous

2 year.’’.

3 SEC. 506. BUY AMERICAN REQUIREMENT FOR FEDERAL

4 AGENCIES.

5 (a) APPLICABILITY OF BUY AMERICAN RE6 QUIREMENTS.—The Administrator of General

7 Services shall ensure that the requirements of

8 the Buy American Act apply to all procure9 ments, consistent with international obliga10 tions, made with funds provided pursuant to

11 the authorization contained in the amend12 ment made by section 601.

13 (b) REPORTS ON PROCUREMENTS FROM FOR14 EIGN ENTITIES.—The Administrator of General

15 Services shall submit to the Congress a report

16 on the amount of procurements from foreign

17 entities made in fiscal years 1994, 1995, and

18 1996 with funds provided pursuant to the au19 thorization contained in the amendment

20 made by section 601. Such report shall sepa21 rately indicate the dollar value of items pro22 cured with such funds for which the Buy

23 American Act was waived pursuant to the

24 Trade Agreement Act of 1979 or any inter-
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1 national agreement to which the United

2 States is a party.

3 (c) PROHIBITION OF CONTRACTS WITH PER4 SONS FALSELY LABELING PRODUCTS AS MADE IN

5 AMERICA.—If the Administrator of General

6 Services determines that a person has been

7 convicted of intentionally affixing a label

8 bearing a ‘‘Made in America’’ inscription to

9 any product sold in or shipped to the United

10 States that is not made in America, the Ad11 ministrator shall determine, not later than 90

12 days after determining that the person has

13 been so convicted, whether the person should

14 be debarred from contracting with the Gen15 eral Services Administration. If the Adminis16 trator determines that the person should not

17 be debarred, the Administrator shall submit

18 to the Congress a report on such determina19 tion not later than 30 days after the deter20 mination is made.

21 (d) DEFINITIONS.—For purposes of this sec22 tion—

23 (1) the term ‘‘Buy American Act’’

24 means title III of the Act entitled ‘‘An Act

25 making appropriations for the Treasury
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1 and Post Office Departments for the fis2 cal year ending June 30, 1934, and for

3 other purposes’’, approved March 3, 1933

4 (41 U.S.C. 10a et seq.); and

5 (2) the term ‘‘debar’’ means to ex6 clude, pursuant to established adminis7 trative procedures, from Government

8 contracting and subcontracting for a

9 specified period of time commensurate

10 with the seriousness of the failure or of11 fense or the inadequacy of performance.

12 SEC. 507. STUDY OF PARTICIPATION BY CERTAIN SMALL

13 BUSINESSES IN FEDERAL PROCUREMENT.

14 (a) STUDY.—The Administrator for Federal

15 Procurement Policy shall conduct a study of—

16 (1) the degree of participation by

17 small businesses owned and controlled by

18 socially and economically disadvantaged

19 individuals in procurements conducted

20 by executive agencies, other than agen21 cies in the Department of Defense; and

22 (2) the extent of compliance by those

23 executive agencies with the goals for par24 ticipation by such businesses required by

25 Office of Federal Procurement Policy pol-
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1 icy letter 91–1, relating to Government2 wide small business and small disadvan3 taged business goals for procurement

4 contracts.

5 (b) REPORT.—Not later than 6 months after

6 the date of the enactment of this Act, the Ad7 ministrator for Federal Procurement Policy

8 shall submit a report on the study required

9 under subsection (a) to the Committee on

10 Government Operations and the Committee

11 on Small Business of the House of Representa12 tives, and to the Committee on Governmental

13 Affairs and the Committee on Small Business

14 of the Senate. The report shall include rec15 ommendations to facilitate the provision of

16 authority to executive agencies, other than

17 agencies in the Department of Defense, to

18 conduct procurement set asides for small

19 businesses owned and controlled by socially

20 and economically disadvantaged individuals,

21 and on improved outreach programs to in22 crease the participation by such businesses in

23 procurements conducted by those executive

24 agencies.
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1 TITLE VI—PROVISIONS RELAT2 ING TO GENERAL SERVICES

3 ADMINISTRATION

4 SEC. 601. AUTHORIZATION OF FUNCTIONS AND ACTIVITIES

5 UNDER THE FEDERAL PROPERTY AND AD6 MINISTRATIVE SERVICES ACT OF 1949.

7 Section 603(a) of the Federal Property and

8 Administrative Services Act of 1949 (40 U.S.C.

9 475) is amended to read as follows:

10 ‘‘(a) There are authorized to be appro11 priated such sums as may be necessary to

12 carry out the provisions of this Act for each

13 fiscal year through the fiscal year ending on

14 September 30, 1996, including payment in ad15 vance, when authorized by the Administrator,

16 for library memberships in societies whose

17 publications are available to members only,

18 or to members at a price lower than that

19 charged to the general public. Nothing in this

20 subsection shall affect authorizations of ap21 propriations or appropriations set forth else22 where in this Act.’’.
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1 SEC. 602. REQUIREMENTS FOR APPOINTMENTS TO SENIOR

2 POSITIONS IN GENERAL SERVICES ADMINIS3 TRATION.

4 (a) IN GENERAL.—Section 101 of the Fed5 eral Property and Administrative Services

6 Act of 1949 (40 U.S.C. 751) is amended by re7 designating subsection (f) as subsection (g)

8 and by inserting after subsection (e) the fol9 lowing new subsection:

10 ‘‘(f) A person appointed as the Deputy Ad11 ministrator of General Services or as the head

12 of a principal organizational unit of the Gen13 eral Services Administration shall, in addition

14 to any other minimum qualifications, have

15 significant previous management experience

16 in government or the private sector in an area

17 or areas directly related to the functions and

18 responsibilities of the position to which that

19 person is appointed.’’.

20 (b) EFFECTIVE DATE.—The amendments

21 made by subsection (a) shall not apply to any

22 person in a position affected by such amend23 ments on the date of the enactment of this

24 Act.
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1 SEC. 603. TERMINATION OF REQUIREMENT.

2 The laws of the United States are amend3 ed to read as if section 630 of Public Law 102–

4 393 had not been enacted.

5 SECTION 1. SHORT TITLE.

6 This Act may be cited as the ‘‘Federal Acquisition Im7 provement Act of 1994’’.

8 SEC. 2. TABLE OF CONTENTS.

9 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. Exclusion of particular sources.

Sec. 1003. Exception to use of competitive procedures for continued occupancy of

leased space.

Sec. 1004. Approval for use of noncompetitive procedures.

Sec. 1005. Contracts for professional and technical services.

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. Award of multiple contracts.

Sec. 1017. Consideration of contractor past performance.

Sec. 1018. Discouragement of nonstandard contract clauses.

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.
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PART II—CIVILIAN AGENCY ACQUISITIONS

SUBPART A—COMPETITION REQUIREMENTS

Sec. 1051. References to Federal Acquisition Regulation.

Sec. 1052. Exclusion of particular sources.

Sec. 1053. Exception to use of competitive procedures for continued occupancy of

leased space.

Sec. 1054. Approval for use of noncompetitive procedures.

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. Award of multiple contracts.

Sec. 1067. Discouragement of nonstandard contract clauses.

SUBPART C—KINDS OF CONTRACTS

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

Sec. 1072. Multiyear contracts.

PART III—ACQUISITIONS GENERALLY

Sec. 1091. Repeal of requirement for annual report on competition.

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.

Subtitle C—Research and Development

Sec. 1301. Cooperative agreements for advanced research.

Sec. 1302. Competition requirement for awards of grants and contracts to colleges

and universities.

Subtitle D—Procurement Protests

PART I—PROTESTS TO THE COMPTROLLER GENERAL

Sec. 1401. Review of protests and effect on contracts pending decision.

Sec. 1402. Decisions on protests.

Sec. 1403. Regulations.
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PART II—PROTESTS IN PROCUREMENTS OF AUTOMATIC DATA PROCESSING

Sec. 1431. Periods for certain actions.

Sec. 1432. Dismissals of frivolous protests and recovery of costs.

Sec. 1433. Award of costs.

Sec. 1434. Dismissal agreements.

Sec. 1435. Matters to be covered in regulations.

Sec. 1436. 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. Restrictions on undefinitized contractual actions.

TITLE II—CONTRACT ADMINISTRATION

SUBTITLE A—CONTRACT PAYMENT

PART I—ARMED SERVICES ACQUISITIONS

Sec. 2001. Contract financing.

Sec. 2002. Repeal of vouchering procedures section.

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 contract profit controls during emergency periods.

PART II—CIVILIAN AGENCY ACQUISITIONS

Sec. 2151. Allowable contract costs.
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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.

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.

Sec. 3003. Unit cost report requirement.

Sec. 3004. Requirement for independent cost estimates and manpower estimates

before development or production.

Sec. 3005. Baseline description.

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

Sec. 3007. Repeal of requirement for competitive alternative sources in 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.
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Subtitle D—Miscellaneous

Sec. 3051. Extension to Department of Defense generally of provision relating to

manufacture at factories and arsenals.

Sec. 3052. Codification of accounting requirement for contracted advisory and assistance services.

Sec. 3053. Regulations on procurement, production, warehousing, and supply distribution functions.

Sec. 3054. Repeal of requirements regarding product evaluation activities.

Sec. 3055. Codification and revision of limitation on lease of vessels, aircraft, and

vehicles.

Sec. 3056. 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.

Sec. 4003. Implementation in armed services.

Sec. 4004. Implementation in civilian agencies.

PART II—SIMPLIFICATION OF PROCEDURES

Sec. 4011. Small business provisions.

Sec. 4012. Procedures for purchases below micro-purchase threshold.

Sec. 4013. Procurement notice.

Sec. 4014. 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.

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.
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PART IV—CONFORMING AMENDMENTS

Sec. 4071. Armed services acquisitions.

Sec. 4072. Civilian agency acquisitions.

Sec. 4073. Office of Federal Procurement Policy Act.

Sec. 4074. Small Business Act.

PART V—REVISION OF REGULATIONS

Sec. 4081. Revision required.

Subtitle B—Socioeconomic and Small Business Laws

Sec. 4101. Payment protections for subcontractors and suppliers.

Sec. 4102. Small business procurement advisory council.

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. Waiting period for significant changes proposed for acquisition regulations.

Sec. 5004. 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 limitations on procurement of goods other than American goods.

Sec. 6004. International cooperative agreements.

Sec. 6005. Miscellaneous repeals.

TITLE VII—COMMERCIAL ITEMS

Subtitle A—Armed Services Acquisitions

Sec. 7001. Establishment of new chapter in title 10.

Sec. 7002. Definitions.

Sec. 7003. Preference for acquisition of commercial items.

Sec. 7004. Pricing documentation for commercial items.

Sec. 7005. Regulations on acquisition of commercial items.

Sec. 7006. Principle of construction with future laws.

Sec. 7007. Inapplicability of certain provisions of law.

Sec. 7008. Conforming amendments relating to inapplicability of certain provisions of law.

Subtitle B—Civilian Agency Acquisitions

Sec. 7011. Definitions.

Sec. 7012. Preference for acquisition of commercial items.

Sec. 7013. Pricing documentation for commercial items.

Sec. 7014. Regulations on acquisition of commercial items.
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Sec. 7015. Principle of construction with future laws.

Sec. 7016. Inapplicability of certain provisions of law.

Sec. 7017. Conforming amendments relating to inapplicability of certain provisions of law.

Subtitle C—Acquisitions Generally

Sec. 7021. Conforming amendment relating to inapplicability of certain provisions of law.

Sec. 7022. Flexible deadlines for submission of offers of commercial items.

Sec. 7023. Additional responsibilities for advocates for competition.

Sec. 7024. Provisions not affected.

Sec. 7025. Comptroller General review of Federal government use of market research.

TITLE VIII—MISCELLANEOUS PROVISIONS

Sec. 8001. Contract goal for small disadvantaged businesses and certain institutions of higher education.

Sec. 8002. Education and training.

Sec. 8003. Department of Defense acquisition of intellectual property rights.

Sec. 8004. Cooperative purchasing.

Sec. 8005. Sense of Congress on negotiated rulemaking.

Sec. 8006. Extension of defense acquisition workforce policies Government-wide.

Sec. 8007. Vendor and employee excellence awards.

Sec. 8008. Department of Defense review of antitrust cases with national security

implications.

Sec. 8009. Technical and clerical amendments.

TITLE IX—EFFECTIVE DATES AND REGULATIONS

Sec. 9001. Effective dates.

Sec. 9002. Regulations.

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)’’
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1 and inserting in lieu thereof ‘‘Federal Acquisition

2 Regulation’’; and

3 (2) in subsection (g)(1), by striking out ‘‘regula4 tions modified’’ and all that follows through ‘‘note)’’

5 and inserting in lieu thereof ‘‘Federal Acquisition

6 Regulation’’.

7 SEC. 1002. EXCLUSION OF PARTICULAR SOURCES.

8 (a) PROHIBITION ON USE OF CLASSES OF PURCHASES

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

10 Code, is amended—

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

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

13 (2) by inserting after paragraph (1) the follow14 ing new paragraph (2):

15 ‘‘(2) The determination required of the head of an

16 agency in paragraph (1) may not be made for a class of

17 purchases or contracts.’’; and

18 (3) in paragraph (4), as redesignated by para19 graph (1), by striking out ‘‘paragraphs (1) and (2)’’

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

21 (3)’’.

22 (b) ADDITIONAL JUSTIFICATION TO EXCLUDE PAR23 TICULAR SOURCE.—Section 2304(b)(1) of such title is

24 amended—
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1 (1) by striking out ‘‘or’’ at the end of subpara2 graph (B);

3 (2) by striking out the period at the end of sub4 paragraph (C) and inserting in lieu thereof ‘‘; or’’;

5 and

6 (3) by adding at the end the following new sub7 paragraph:

8 ‘‘(D) would ensure a continuous and reliable

9 source; satisfy a critical need for health, safety, or

10 other emergency supplies; or satisfy projected needs

11 resulting from a history of high demand for the sup12 ply or service.’’.

13 SEC. 1003. EXCEPTION TO USE OF COMPETITIVE PROCE14 DURES FOR CONTINUED OCCUPANCY OF

15 LEASED SPACE.

16 Section 2304(d)(1) of title 10, United States Code, is

17 amended—

18 (1) by striking out ‘‘and’’ at the end of subpara19 graph (A);

20 (2) by striking out the period at the end of sub21 paragraph (B) and inserting in lieu thereof ‘‘; and’’;

22 and

23 (3) by adding at the end the following new sub24 paragraph:
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1 ‘‘(C) in the case of a follow-on contract to ac2 quire leasehold interests in real property providing

3 for the continued occupancy by Federal agencies of

4 space in buildings, such space may be deemed to be

5 available only from the incumbent lessor and may be

6 acquired through procedures other than competitive

7 procedures if a determination is made that (i) the oc8 cupant agencies have a continuing need for the space,

9 (ii) the space meets the needs of the agencies, and (iii)

10 the incumbent lessor is willing to continue to provide

11 the space at a fair market price as established by the

12 Government based on a market survey or an ap13 praisal conducted in accordance with generally ac14 cepted real property appraisal procedures.’’.

15 SEC. 1004. APPROVAL FOR USE OF NONCOMPETITIVE PRO16 CEDURES.

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

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

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

20 (ii), (iii), or (iv)’’.

21 SEC. 1005. CONTRACTS FOR PROFESSIONAL AND TECH22 NICAL SERVICES.

23 (a) AMENDMENT.—Section 2304(j)(4) of title 10,

24 United States Code, is amended—

25 (1) by inserting ‘‘(A)’’ after ‘‘(4)’’; and
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1 (2) by adding at the end the following new sub2 paragraph:

3 ‘‘(B) The Secretary of Defense may waive the limita4 tion in subparagraph (A) to the extent the Secretary consid5 ers the use of master agreements necessary in order to fur6 ther the policy set forth in section 2331(a) of this title. Dur7 ing any fiscal year, such a waiver may not increase the

8 total value of task orders under master agreements of a con9 tracting activity by more than 20 percent of the value of

10 all contracts for advisory and assistance services awarded

11 by that contracting activity during fiscal year 1989.’’.

12 (b) CONFORMING REPEAL.—Subsection (c) of section

13 2331 of title 10, United States Code, is repealed.

14 Subpart B—Planning, Solicitation, Evaluation, and

15 Award

16 SEC. 1011. SOURCE SELECTION FACTORS.

17 Section 2305(a) of title 10, United States Code, is

18 amended—

19 (1) in paragraph (2)—

20 (A) in subparagraph (A)(i), by striking out

21 ‘‘nonprice-related factors)’’ and inserting in lieu

22 thereof ‘‘nonprice-related factors and significant

23 subfactors)’’; and
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1 (B) in subparagraph (B)(ii), by striking

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

3 following:

4 ‘‘(I) either a statement that the proposals

5 are intended to be evaluated with, and award

6 made after, discussions with the offerors, or a

7 statement that the proposals are intended to be

8 evaluated, and award made, without discussions

9 with the offerors (other than discussions con10 ducted for the purpose of minor clarification)

11 unless discussions are determined to be nec12 essary; and’’; and

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

14 in lieu thereof the following:

15 ‘‘(3)(A) In prescribing the evaluation factors to be in16 cluded in each solicitation for competitive proposals, the

17 head of an agency shall clearly establish the relative impor18 tance assigned to the evaluation factors and significant

19 subfactors, including cost or price and the quality of the

20 product or services to be provided (including technical ca21 pability, management capability, and prior experience of

22 the offeror).

23 ‘‘(B) Nothing in this paragraph prohibits an agency

24 from—
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1 ‘‘(i) providing additional information in a solic2 itation, including numeric weights for all evaluation

3 factors (and significant subfactors); or

4 ‘‘(ii) stating in a solicitation that award will be

5 made to the offeror that meets the solicitation’s man6 datory requirements at the lowest price or cost.’’.

7 SEC. 1012. SOLICITATION PROVISION REGARDING EVALUA8 TION OF PURCHASE OPTIONS.

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

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

11 the end the following new paragraph:

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

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

14 may not include in such solicitation a clause providing for

15 the evaluation of prices under the contract for options to

16 purchase additional supplies or services under the contract

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

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

19 SEC. 1013. PROMPT NOTICE OF AWARD.

20 (a) SEALED BID PROCEDURES.—Section 2305(b) of

21 title 10, United States Code, is amended by adding at the

22 end of paragraph (3) the following: ‘‘Within 3 working days

23 after the date of contract award, the head of the agency shall

24 notify, in writing or by electronic means, all offerors not

25 awarded the contract that the contract has been awarded.’’.
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1 (b) COMPETITIVE PROPOSALS PROCEDURES.—Such

2 section is further amended in the second sentence of para3 graph (4)(B) by striking out ‘‘shall promptly notify’’ and

4 inserting in lieu thereof ‘‘, within 3 working days after the

5 date of contract award, shall notify, in writing or by elec6 tronic means,’’.

7 SEC. 1014. POST-AWARD DEBRIEFINGS.

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

9 amended—

10 (1) by redesignating paragraph (5) as para11 graph (6); and

12 (2) by inserting after paragraph (4) the follow13 ing new paragraph (5):

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

15 the basis of competitive proposals, an unsuccessful offeror,

16 upon written request received by the agency within 3 work17 ing days after the date of receipt of notification of the con18 tract award, shall be debriefed and furnished the basis for

19 the selection decision and contract award. An employee of

20 the agency shall debrief the offeror within, to the maximum

21 extent practicable, 4 working days after receipt of the re22 quest by the agency.

23 ‘‘(B) Such debriefing shall include, at a minimum—

24 ‘‘(i) the agency’s evaluation of the significant

25 weak or deficient factors in the offeror’s offer;
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1 ‘‘(ii) the overall evaluated cost of the offer of the

2 contractor awarded the contract and the overall evalu3 ated cost of the offer of the debriefed offeror;

4 ‘‘(iii) the overall ranking of all offers and the

5 total technical and cost scores of all offers;

6 ‘‘(iv) a summary of the rationale for the award;

7 ‘‘(v) in the case of an offer by the debriefed

8 offeror that includes a commercial end item, the make

9 and model (or equivalent description) of the item in10 cluded in the offer of the contractor awarded the con11 tract; and

12 ‘‘(vi) reasonable responses to questions posed by

13 the debriefed offeror as to whether source selection

14 procedures set forth in the solicitation, applicable reg15 ulations, and other applicable authorities were fol16 lowed by the agency.

17 ‘‘(C) The debriefing shall not include point-by-point

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

19 and shall not disclose any information that is exempt from

20 disclosure under section 552 of title 5.

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

22 include a statement that information described in subpara23 graph (B) may be disclosed in post-award debriefings.

24 ‘‘(E) If, within one year after the date of the contract

25 award and as a result of a successful procurement protest
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1 or otherwise, the agency seeks to fulfill the same requirement

2 under the contract on the basis of the best and final offers

3 considered in the awarding of that contract, the agency

4 shall make available to offerors—

5 ‘‘(i) all information provided in debriefings

6 under this paragraph regarding the offer of the con7 tractor awarded the contract; and

8 ‘‘(ii) all comparable information with respect to

9 the original offerors.

10 ‘‘(F) The contracting officer shall include a summary

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

12 SEC. 1015. PROTEST FILE.

13 Section 2305 of title 10, United States Code, is amend14 ed by adding at the end the following new subsection:

15 ‘‘(e)(1) If, in the case of a solicitation for a contract

16 issued by, or an award or proposed award of a contract

17 by, the head of an agency, a protest is filed pursuant to

18 the procedures in subchapter V of chapter 35 of title 31 and

19 an actual or prospective offeror so requests, a file of the

20 protest shall be established by the contracting activity and

21 reasonable access shall be provided to actual or prospective

22 offerors.

23 ‘‘(2) A file established pursuant to paragraph (1) shall

24 contain such information as would ordinarily be releasable
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1 under section 552 of title 5 (commonly referred to as the

2 ‘Freedom of Information Act’).

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

4 consistent with the regulations regarding the preparation

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

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

7 Contract Appeals under the Contract Disputes Act of 1978

8 (41 U.S.C. 601 et seq.).’’.

9 SEC. 1016. AWARD OF MULTIPLE CONTRACTS.

10 Section 2305 of title 10, United States Code, is amend11 ed by adding after subsection (e), as added by section 1015,

12 the following new subsection:

13 ‘‘(f) AWARD OF MULTIPLE CONTRACTS.—In procuring

14 any supply or service using competitive procedures, the

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

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

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

18 the Federal Government to award those contracts for the

19 purpose of maintaining a continuous source for the supply

20 or service.’’.

21 SEC. 1017. CONSIDERATION OF CONTRACTOR PAST PER22 FORMANCE.

23 Paragraph (3) of section 2305(a) of title 10, United

24 States Code, as amended by section 1011(2), is further

25 amended by striking out ‘‘capability, and prior experience’’
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1 in subparagraph (A) and inserting in lieu thereof ‘‘capabil2 ity, prior experience, and past performance’’.

3 SEC. 1018. DISCOURAGEMENT OF NONSTANDARD CON4 TRACT CLAUSES.

5 Section 2305 of title 10, United States Code, is amend6 ed by adding after subsection (f), as added by section 1016,

7 the following new subsection:

8 ‘‘(g) NONSTANDARD CONTRACT CLAUSES.—The Sec9 retary of Defense shall prescribe regulations to discourage,

10 to the maximum extent practicable, the use of a non11 standard contract clause on a repetitive basis. The regula12 tions shall include provisions that—

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

14 ‘‘(2) require prior approval for the use of a non15 standard clause on a repetitive basis by an official at

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

17 Subpart C—Kinds of Contracts

18 SEC. 1021. REPEAL OF REQUIREMENT FOR SECRETARIAL

19 DETERMINATION REGARDING USE OF COST

20 TYPE OR INCENTIVE CONTRACT.

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

22 Code, is repealed.
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1 Subpart D—Miscellaneous Provisions for the

2 Encouragement of Competition

3 SEC. 1031. REPEAL OF REQUIREMENT FOR ANNUAL REPORT

4 BY ADVOCATES FOR COMPETITION.

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

6 Code, is repealed.

7 PART II—CIVILIAN AGENCY ACQUISITIONS

8 Subpart A—Competition Requirements

9 SEC. 1051. REFERENCES TO FEDERAL ACQUISITION REGU10 LATION.

11 Section 303 of the Federal Property and Administra12 tive Services Act of 1949 (41 U.S.C. 253) is amended—

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

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

15 1984’’ and inserting in lieu thereof ‘‘Federal Acquisi16 tion Regulation’’; and

17 (2) in subsection (g)(1), by striking out ‘‘regula18 tions modified’’ and all that follows through ‘‘of

19 1984,’’ and inserting in lieu thereof ‘‘Federal Acquisi20 tion Regulation’’.

21 SEC. 1052. EXCLUSION OF PARTICULAR SOURCES.

22 (a) PROHIBITION ON USE OF CLASSES OF PURCHASES

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

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

25 is amended—
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1 (1) by redesignating paragraphs (2) and (3) as

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

3 (2) by inserting after paragraph (1) the follow4 ing new paragraph (2):

5 ‘‘(2) The determination required of the agency head

6 in paragraph (1) may not be made for a class of purchases

7 or contracts.’’; and

8 (3) in paragraph (4), as redesignated by para9 graph (1), by striking out ‘‘paragraphs (1) and (2)’’

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

11 (3)’’.

12 (b) ADDITIONAL JUSTIFICATION TO EXCLUDE PAR13 TICULAR SOURCE.—Section 303(b)(1) of the Federal Prop14 erty and Administrative Services Act of 1949 (41 U.S.C.

15 253(b)(1)) is amended—

16 (1) by striking out ‘‘or’’ at the end of subpara17 graph (B);

18 (2) by striking out the period at the end of sub19 paragraph (C) and inserting in lieu thereof ‘‘; or’’;

20 and

21 (3) by adding at the end the following new sub22 paragraph:

23 ‘‘(D) would ensure a continuous and reliable

24 source; satisfy a critical need for health, safety, or

25 other emergency supplies; or satisfy projected needs
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1 resulting from a history of high demand for the sup2 ply or service.’’.

3 SEC. 1053. EXCEPTION TO USE OF COMPETITIVE PROCE4 DURES FOR CONTINUED OCCUPANCY OF

5 LEASED SPACE.

6 Section 303(d)(1) of the Federal Property and Admin7 istrative Services Act of 1949 (41 U.S.C. 253(d)(1)) is

8 amended—

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

11 (2) by striking out the period at the end of sub12 paragraph (B) and inserting in lieu thereof ‘‘; and’’;

13 and

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

16 ‘‘(C) in the case of a follow-on contract to ac17 quire leasehold interests in real property providing

18 for the continued occupancy by Federal agencies of

19 space in buildings, such space may be deemed to be

20 available only from the incumbent lessor and may be

21 acquired through procedures other than competitive

22 procedures if a determination is made that (i) the oc23 cupant agencies have a continuing need for the space,

24 (ii) the space meets the needs of the agencies, and (iii)

25 the incumbent lessor is willing to continue to provide
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1 the space at a fair market price as established by the

2 Government based on a market survey or an ap3 praisal conducted in accordance with generally ac4 cepted real property appraisal procedures.’’.

5 SEC. 1054. APPROVAL FOR USE OF NONCOMPETITIVE PRO6 CEDURES.

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

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

9 253(f)(1)(B)(i)) is amended by inserting before the semi10 colon at the end the following: ‘‘or by an official referred

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

12 Subpart B—Planning, Solicitation, Evaluation, and

13 Award

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

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

16 Federal Property and Administrative Services Act of 1949

17 (41 U.S.C. 253a) is amended—

18 (1) in subsection (b)(1)(A)—

19 (A) by inserting ‘‘and significant

20 subfactors’’ after ‘‘all significant factors’’; and

21 (B) by striking out ‘‘(including price)’’ and

22 inserting ‘‘(including cost or price, cost-related

23 or price-related factors and subfactors, and

24 noncost-related or nonprice-related factors and

25 significant subfactors)’’;
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1 (2) in subsection (b)(1)(B), by inserting ‘‘and

2 subfactors’’ after ‘‘factors’’;

3 (3) in subsection (b)(2)(B), by striking out clause

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

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

6 are intended to be evaluated with, and award

7 made after, discussions with the offerors, or a

8 statement that the proposals are intended to be

9 evaluated, and award made, without discussions

10 with the offerors (other than discussions con11 ducted for the purpose of minor clarification)

12 unless discussions are determined to be nec13 essary; and’’; and

14 (4) by adding at the end the following new sub15 section:

16 ‘‘(c)(1) In prescribing the evaluation factors to be in17 cluded in each solicitation for competitive proposals, an

18 agency head shall clearly establish the relative importance

19 assigned to the evaluation factors and significant

20 subfactors, including cost or price and the quality of the

21 product or services to be provided (including technical ca22 pability, management capability, prior experience, and

23 past performance of the offeror).

24 ‘‘(2) Nothing in this subsection prohibits an agency

25 from—
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1 ‘‘(A) providing additional information in a so2 licitation, including numeric weights for all evalua3 tion factors (and significant subfactors); or

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

5 made to the offeror that meets the solicitation’s man6 datory requirements at the lowest price or cost.’’.

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

8 Federal Property and Administrative Services Act of 1949

9 (41 U.S.C. 253b) is amended—

10 (1) in subsection (a), by inserting ‘‘, and award

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

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

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

14 ‘‘shall evaluate the bids’’; and

15 (3) in subsection (d)—

16 (A) by striking out paragraph (1) and in17 serting in lieu thereof the following:

18 ‘‘(1) An agency head shall evaluate competitive propos19 als in accordance with subsection (a) and may award a

20 contract—

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

22 that written or oral discussions have been conducted

23 with all responsible offerors who submit proposals

24 within the competitive range; or
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1 ‘‘(B) based on the proposals received and without

2 discussions with the offerors (other than discussions

3 conducted for the purpose of minor clarification), pro4 vided that, as required by section 303A(b)(2)(B)(i),

5 the solicitation included a statement that proposals

6 are intended to be evaluated, and award made, with7 out discussions, unless discussions are determined to

8 be necessary.’’; and

9 (B) by striking out paragraphs (2) and (3)

10 and by redesignating paragraph (4) as para11 graph (2).

12 (c) APPLICABILITY.—

13 (1) IN GENERAL.—Except as provided in para14 graph (2), the amendments made by this section shall

15 apply to—

16 (A) solicitations for sealed bids or competi17 tive proposals issued after the end of the 180-day

18 period beginning on the date of the enactment of

19 this Act; and

20 (B) contracts awarded pursuant to those so21 licitations.

22 (2) AUTHORITY TO APPLY AMENDMENTS

23 EARLY.—The head of an executive agency may apply

24 the amendments made by this section to solicitations

25 issued before the end of the period referred to in para-
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1 graph (1). The head of the executive agency shall pub2 lish in the Federal Register notice of any such earlier

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

4 SEC. 1062. SOLICITATION PROVISION REGARDING EVALUA5 TION OF PURCHASE OPTIONS.

6 Section 303A of the Federal Property and Administra7 tive Services Act of 1949 (41 U.S.C. 253a), as amended by

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

9 the following new subsection:

10 ‘‘(d) An agency head, in issuing a solicitation for a

11 contract to be awarded using sealed bid procedures, may

12 not include in such solicitation a clause providing for the

13 evaluation of prices under the contract for options to pur14 chase additional supplies or services under the contract un15 less the agency head has determined that there is a reason16 able likelihood that the options will be exercised.’’.

17 SEC. 1063. PROMPT NOTICE OF AWARD.

18 (a) SEALED BID PROCEDURES.—Subsection (c) of sec19 tion 303B of the Federal Property and Administrative

20 Services Act of 1949 (41 U.S.C. 253b) is amended by add21 ing at the end the following: ‘‘Within 3 working days after

22 the date of contract award, the agency head shall notify,

23 in writing or by electronic means, offerors not awarded the

24 contract that the contract has been awarded.’’.
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1 (b) COMPETITIVE PROPOSALS PROCEDURES.—Para2 graph (2) of section 303B(d) of the Federal Property and

3 Administrative Services Act of 1949 (41 U.S.C. 253b(d)),

4 as redesignated by section 1061(b)(3)(B), is amended in the

5 second sentence by striking out ‘‘shall promptly notify’’ and

6 inserting in lieu thereof ‘‘, within 3 working days after the

7 date of contract award, shall notify, in writing or by elec8 tronic means,’’.

9 SEC. 1064. POST-AWARD DEBRIEFINGS.

10 Section 303B of the Federal Property and Administra11 tive Services Act of 1949 (41 U.S.C. 253b) is amended—

12 (1) by redesignating subsections (e) and (f) as

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

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

15 new subsection (e):

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

17 agency on the basis of competitive proposals, an unsuccess18 ful offeror, upon written request received by the executive

19 agency within 3 working days after the date of receipt of

20 notification of the contract award, shall be debriefed and

21 furnished the basis for the selection decision and contract

22 award. An employee of the executive agency shall debrief

23 the offeror within, to the maximum extent practicable, 4

24 working days after receipt of the request by the executive

25 agency.
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1 ‘‘(2) Such debriefing shall include, at a minimum—

2 ‘‘(A) the executive agency’s evaluation of the sig3 nificant weak or deficient factors in the offeror’s offer;

4 ‘‘(B) the overall evaluated cost of the offer of the

5 contractor awarded the contract and the overall evalu6 ated cost of the offer of the debriefed offeror;

7 ‘‘(C) the overall ranking of all offers and the

8 total technical and cost scores of all offers;

9 ‘‘(D) a summary of the rationale for the award;

10 ‘‘(E) in the case of an offer by the debriefed

11 offeror that includes a commercial end item, the make

12 and model (or equivalent description) of the item in13 cluded in the offer of the contractor awarded the con14 tract; and

15 ‘‘(F) reasonable responses to questions posed by

16 the debriefed offeror as to whether source selection

17 procedures set forth in the solicitation, applicable reg18 ulations, and other applicable authorities were fol19 lowed by the executive agency.

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

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

22 and shall not disclose any information that is exempt from

23 disclosure under section 552 of title 5, United States Code.
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1 ‘‘(4) Each solicitation for competitive proposals shall

2 include a statement that information described in para3 graph (2) may be disclosed in post-award debriefings.

4 ‘‘(5) If, within one year after the date of the contract

5 award and as a result of a successful procurement protest

6 or otherwise, the executive agency seeks to fulfill same the

7 requirement under the contract on the basis of a new solici8 tation of offers or on the basis of the best and final offers

9 considered in the awarding of that contract, the agency

10 head shall make available to offerors—

11 ‘‘(A) all information provided in debriefings

12 under this subsection regarding the offer of the con13 tractor awarded the contract; and

14 ‘‘(B) all comparable information with respect to

15 the original offerors.

16 ‘‘(6) 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)(1) If, in the case of a solicitation for a contract

23 issued by, or an award or proposed award of a contract

24 by, an agency head, a protest is filed pursuant to the proce25 dures in subchapter V of chapter 35 of title 31, United
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1 States Code, and an actual or prospective offeror so re2 quests, a file of the protest shall be established by the con3 tracting activity and reasonable access shall be provided to

4 actual or prospective offerors.

5 ‘‘(2) A file established pursuant to paragraph (1) shall

6 contain such information as would ordinarily be releasable

7 under section 552 of title 5 (commonly referred to as the

8 ‘Freedom of Information Act’).

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 the Contract Disputes Act of 1978

14 (41 U.S.C. 601 et seq.).’’.

15 SEC. 1066. AWARD OF MULTIPLE CONTRACTS.

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) AWARD OF MULTIPLE CONTRACTS.—In procuring

21 any supply or service using competitive procedures, an ex22 ecutive agency may award more than one contract for the

23 same supply or service in any case in which the head of

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

25 Federal Government to award those contracts for the pur-
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1 pose of maintaining a continuous source for the supply or

2 service.’’.

3 SEC. 1067. DISCOURAGEMENT OF NONSTANDARD CON4 TRACT CLAUSES.

5 Section 303B of the Federal Property and Administra6 tive Services Act of 1949 (41 U.S.C. 253b), as amended by

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

8 following new subsection:

9 ‘‘(j) NONSTANDARD CONTRACT CLAUSES.—The head of

10 each executive agency shall promulgate regulations to dis11 courage, to the maximum extent practicable, the use of a

12 nonstandard contract clause on a repetitive basis. The regu13 lations shall include provisions that—

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

15 ‘‘(2) require prior approval for the use of a non16 standard clause on a repetitive basis by an official at

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

18 Subpart C—Kinds of Contracts

19 SEC. 1071. REPEAL OF AGENCY HEAD DETERMINATION RE20 GARDING USE OF COST TYPE OR INCENTIVE

21 CONTRACT.

22 Section 304(b) of the Federal Property and Adminis23 trative Services Act of 1949 (41 U.S.C. 254(b)) is amended

24 by striking out the second sentence.
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1 SEC. 1072. MULTIYEAR CONTRACTS.

2 Title III of the Federal Property and Administrative

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

4 by inserting after section 304 the following new section:

5 ‘‘SEC. 304A. MULTIYEAR CONTRACTS.

6 ‘‘(a) IN GENERAL.—To the extent that funds are other7 wise available for obligation, the head of an agency may

8 make multiyear contracts for the purchase of property,

9 whenever the agency head finds—

10 ‘‘(1) that the use of such a contract will result

11 in substantial savings of the total anticipated costs of

12 carrying out the program through annual contracts;

13 ‘‘(2) that the minimum need for the property to

14 be purchased is expected to remain substantially un15 changed during the contemplated contract period in

16 terms of production rate, procurement rate, and total

17 quantities;

18 ‘‘(3) that there is a reasonable expectation that

19 throughout the contemplated contract period the exec20 utive agency will request funding for the contract at

21 the level required to avoid contract cancellation;

22 ‘‘(4) that there is a stable design for the property

23 to be acquired and that the technical risks associated

24 with such property are not excessive; and
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1 ‘‘(5) that the estimates of both the cost of the con2 tract and the anticipated cost avoidance through the

3 use of a multiyear contract are realistic.

4 ‘‘(b)(1) The head of the agency shall prescribe acquisi5 tion regulations to promote the use of multiyear contracting

6 as authorized by subsection (a) in a manner that will allow

7 the most efficient use of multiyear contracting.

8 ‘‘(2) Such regulations may provide for cancellation

9 provisions in such multiyear contracts to the extent that

10 such provisions are necessary and in the best interests of

11 the United States. Such cancellation provisions may in12 clude consideration of both recurring and nonrecurring

13 costs of the contractor associated with the production of the

14 items to be delivered under the contract.

15 ‘‘(3) Such regulations shall also provide that, to the

16 extent practicable, the administration of this section, and

17 of the regulations prescribed under this section, shall not

18 be carried out in a manner to preclude or curtail the exist19 ing ability of the executive agency to—

20 ‘‘(A) provide for competition in the production of

21 items to be delivered under such a contract; or

22 ‘‘(B) provide for termination of a prime contract

23 the performance of which is deficient with respect to

24 cost, quality, or schedule.
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1 ‘‘(c) Before any contract described in subsection (a)

2 that contains a clause setting forth a cancellation ceiling

3 in excess of $100,000,000 may be awarded, the head of the

4 agency shall give written notification of the proposed con5 tract and of the proposed cancellation ceiling for that con6 tract to the Congress, and such contract may not then be

7 awarded until the end of a period of 30 days beginning

8 on the date of such notification.

9 ‘‘(d) Contracts may be made under this section for ad10 vance procurement, if feasible and practical, in order to

11 achieve economic-lot purchases and more efficient produc12 tion rates.

13 ‘‘(e) In the event funds are not made available for the

14 continuation of a contract made under this section into a

15 subsequent fiscal year, the contract shall be canceled or ter16 minated, and the costs of cancellation or termination may

17 be paid from—

18 ‘‘(1) appropriations originally available for the

19 performance of the contract concerned;

20 ‘‘(2) appropriations currently available for pro21 curement of the type of property concerned, and not

22 otherwise obligated; or

23 ‘‘(3) funds appropriated for those payments.
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1 ‘‘(f) This section does not apply to contracts for the

2 purchase of property to which section 111 of this Act ap3 plies.

4 ‘‘(g) For the purposes of this section, a multiyear con5 tract is a contract for the purchase of property or services

6 for more than one, but not more than five, program years.

7 Such a contract may provide that performance under the

8 contract during the second and subsequent years of the con9 tract is contingent upon the appropriation of funds and

10 (if it does so provide) may provide for a cancellation pay11 ment to be made to the contractor if such appropriations

12 are not made.’’.

13 PART III—ACQUISITIONS GENERALLY

14 SEC. 1091. REPEAL OF REQUIREMENT FOR ANNUAL REPORT

15 ON COMPETITION.

16 Section 23 of the Office of Federal Procurement Policy

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

18 Subtitle B—Truth in Negotiations

19 PART I—ARMED SERVICES ACQUISITIONS

20 SEC. 1201. STABILIZATION OF DOLLAR THRESHOLD OF AP21 PLICABILITY.

22 (a) DOLLAR THRESHOLD STABILIZATION FOR

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

24 section 2306a(a) of title 10, United States Code, is amend25 ed—
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1 (1) in clause (i), by striking out ‘‘and before

2 January 1, 1996,’’; and

3 (2) in clause (ii), by striking out ‘‘or after De4 cember 31, 1995,’’.

5 (b) ADJUSTMENT OF DOLLAR THRESHOLD.—Such sec6 tion is further amended by adding at the end the following

7 new paragraph:

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

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

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

11 amount in constant fiscal year 1993 dollars (rounded to

12 the nearest $1,000).’’.

13 SEC. 1202. EXCEPTIONS TO COST OR PRICING DATA RE14 QUIREMENTS.

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

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

17 ‘‘(b) EXCEPTIONS.—(1) This section shall not be ap18 plied to a contract or subcontract, or a modification to a

19 contract or subcontract—

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

21 on—

22 ‘‘(i) adequate price competition;

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

24 commercial items or of services regularly used

25 for other than Federal Government purposes, as
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1 the case may be, that are sold in sufficient quan2 tities to the general public; or

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

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

5 agency determines that the requirements of this sec6 tion may be waived and states in writing the reasons

7 for such determination.

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

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

10 Act (41 U.S.C. 421(c)) shall provide clear standards for de11 termining whether the exceptions provided in paragraph

12 (1)(A) apply. In the case of the exception provided in para13 graph (1)(A)(i), the regulations shall specify the criteria to

14 be used to determine whether adequate price competition ex15 ists. In the case of the exception provided in paragraph

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

17 of sales to the Federal Government, including the percentage

18 of an item’s overall sales that are made to the Federal Gov19 ernment, when determining whether the item has been sold

20 in sufficient quantities to the public.’’.

21 (b) LIMITATION ON ADDITIONAL AUTHORITY.—Sub22 section (c) of such section is amended by adding at the end

23 the following new sentence: ‘‘The head of an agency may

24 not require such data to be submitted under this subsection

25 for any contract or subcontract, or modification to a con-
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1 tract or subcontract, covered by the exceptions in subsection

2 (b).’’.

3 SEC. 1203. RIGHT OF UNITED STATES TO EXAMINE CON4 TRACTOR RECORDS.

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

6 States Code, is amended to read as follows:

7 ‘‘(f) RIGHT OF UNITED STATES TO EXAMINE CON8 TRACTOR RECORDS.—For the purpose of evaluating the ac9 curacy, completeness, and currency of cost or pricing data

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

11 agency shall have the rights provided by section 2313(a)(2)

12 of this title.’’.

13 SEC. 1204. CONSISTENCY OF TIME REFERENCES.

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

15 amended—

16 (1) in subparagraphs (A)(ii) and (B)(ii) of sub17 section (d)(4), by inserting ‘‘or, if applicable consist18 ent with paragraph (1)(B), another date agreed upon

19 between the parties’’ after ‘‘(or price of the modifica20 tion)’’; and

21 (2) in subsection (g), by inserting ‘‘or, if appli22 cable consistent with subsection (d)(1)(B), another

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

24 price of a contract modification)’’.
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1 SEC. 1205. REPEAL OF SUPERSEDED PROVISION.

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

3 (10 U.S.C. 2306a note) is repealed.

4 PART II—CIVILIAN AGENCY ACQUISITIONS

5 SEC. 1251. REVISION OF CIVILIAN AGENCY PROVISIONS TO

6 ENSURE UNIFORM TREATMENT OF COST OR

7 PRICING DATA.

8 Title III of the Federal Property and Administrative

9 Services Act of 1949 (41 U.S.C. 251 et seq.) is further

10 amended—

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

12 and

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

14 section 1072, the following new section:

15 ‘‘SEC. 304B. COST OR PRICING DATA: TRUTH IN NEGOTIA16 TIONS.

17 ‘‘(a) REQUIRED COST OR PRICING DATA AND CERTIFI18 CATION.—(1) An agency head shall require offerors, con19 tractors, and subcontractors to make cost or pricing data

20 available as follows:

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

22 title to be entered into using procedures other than

23 sealed-bid procedures shall be required to submit cost

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

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

26 into after the date of the enactment of the Fed-
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1 eral Acquisition Improvement Act of 1994, the

2 price of the contract to the United States is ex3 pected to exceed $500,000; and

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

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

6 Federal Acquisition Improvement Act of 1994,

7 the price of the contract to the United States is

8 expected to exceed $100,000.

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

10 this chapter shall be required to submit cost or pric11 ing data before the pricing of a change or modifica12 tion to the contract if—

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

14 made to a prime contract referred to in subpara15 graph (A)(i), the price adjustment is expected to

16 exceed $500,000;

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

18 made to a prime contract that was entered into

19 on or before the date of the enactment of the Fed20 eral Acquisition Improvement Act of 1994, and

21 that has been modified pursuant to paragraph

22 (6), the price adjustment is expected to exceed

23 $500,000; and
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1 ‘‘(iii) in the case of a change or modifica2 tion not covered by clause (i) or (ii), the price

3 adjustment is expected to exceed $100,000.

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

5 of a contract under this title shall be required to sub6 mit cost or pricing data before the award of the sub7 contract if the prime contractor and each higher-tier

8 subcontractor have been required to make available

9 cost or pricing data under this section and—

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

11 prime contract referred to in subparagraph

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

13 exceed $500,000;

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

15 into under a prime contract that was entered

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

17 Federal Acquisition Improvement Act of 1994,

18 and that has been modified pursuant to para19 graph (6), the price of the subcontract is expected

20 to exceed $500,000; and

21 ‘‘(iii) in the case of a subcontract not cov22 ered by clause (i) or (ii), the price of the sub23 contract is expected to exceed $100,000.

24 ‘‘(D) The subcontractor for a subcontract covered

25 by subparagraph (C) shall be required to submit cost
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1 or pricing data before the pricing of a change or

2 modification to the subcontract if—

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

4 to a subcontract referred to in subparagraph

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

6 to exceed $500,000; and

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

8 to a subcontract referred to in subparagraph

9 (C)(iii), the price adjustment is expected to ex10 ceed $100,000.

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

12 subcontractor, to submit cost or pricing data under para13 graph (1) (or required by the head of the contracting activ14 ity concerned to submit such data under subsection (c))

15 shall be required to certify that, to the best of the person’s

16 knowledge and belief, the cost or pricing data submitted are

17 accurate, complete, and current.

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

19 under paragraph (1) (or under subsection (c)), and a cer20 tification required to be submitted under paragraph (2),

21 shall be submitted—

22 ‘‘(A) in the case of a submission by a prime con23 tractor (or an offeror for a prime contract), to the

24 contracting officer for the contract (or to a designated

25 representative of the contracting officer); or
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1 ‘‘(B) in the case of a submission by a sub2 contractor (or an offeror for a subcontract), to the

3 prime contractor.

4 ‘‘(4) Except as provided under subsection (b), this sec5 tion applies to contracts entered into by an agency head

6 on behalf of a foreign government.

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

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

9 shall be considered as having been required to make avail10 able cost or pricing data under this section.

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

12 to submit cost or pricing data under paragraph (1) in con13 nection with a prime contract entered into on or before the

14 date of the enactment of the Federal Acquisition Improve15 ment Act of 1994, the agency head that entered into such

16 contract shall modify the contract to reflect subparagraphs

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

18 shall be made without requiring consideration.

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

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

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

22 amount in constant fiscal year 1993 dollars (rounded to

23 the nearest $1,000).
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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 agency determines that the requirements of this sec15 tion may be waived and states in writing the reasons

16 for such determination.

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

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

19 Act (41 U.S.C. 421(c)) shall provide clear standards for de20 termining whether the exceptions provided in paragraph

21 (1)(A) apply. In the case of the exception provided in para22 graph (1)(A)(i), the regulations shall specify the criteria to

23 be used to determine whether adequate price competition ex24 ists. In the case of the exception provided in paragraph

25 (1)(A)(ii), the regulations shall preclude the consideration
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1 of sales to the Federal Government, including the percentage

2 of an item’s overall sales that are made to the Federal Gov3 ernment, when determining whether the item has been sold

4 in sufficient quantities to the public.

5 ‘‘(c) AUTHORITY TO REQUIRE COST OR PRICING

6 DATA.—When cost or pricing data are not required to be

7 submitted by subsection (a), such data may nevertheless be

8 required to be submitted by the head of the agency if the

9 head of the agency determines that such data are necessary

10 for the evaluation by the agency of the reasonableness of

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

12 which the head of the agency requires such data to be sub13 mitted under this subsection, the head of the agency shall

14 document in writing the reasons for such requirement. The

15 head of an agency may not require such data to be submit16 ted under this subsection for any contract or subcontract,

17 or modification to a contract or subcontract, covered by the

18 exceptions in subsection (b).

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

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

21 modification to a prime contract) under which a certificate

22 under subsection (a)(2) is required shall contain a provi23 sion that the price of the contract to the United States, in24 cluding profit or fee, shall be adjusted to exclude any sig25 nificant amount by which it may be determined by the
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1 agency head that such price was increased because the con2 tractor (or any subcontractor required to make available

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

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

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

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

7 agreed upon between the parties), were inaccurate, incom8 plete, or noncurrent. If for purposes of the preceding sen9 tence the parties agree upon a date other than the date of

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

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

12 the price of the contract as is practicable.

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

14 adjustment under a contract provision required by para15 graph (1) whether, and to what extent, a contract price was

16 increased because the contractor (or a subcontractor) sub17 mitted defective cost or pricing data, it shall be a defense

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

19 submitted by the contractor or subcontractor.

20 ‘‘(3) It is not a defense to an adjustment of the price

21 of a contract under a contract provision required by para22 graph (1) that—

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

24 been modified even if accurate, complete, and current

25 cost or pricing data had been submitted by the con-
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1 tractor or subcontractor because the contractor or sub2 contractor—

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

4 services procured; or

5 ‘‘(ii) otherwise was in a superior bargain6 ing position with respect to the property or serv7 ices procured;

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

9 that the cost and pricing data in issue were defective

10 even though the contractor or subcontractor took no

11 affirmative action to bring the character of the data

12 to the attention of the contracting officer;

13 ‘‘(C) the contract was based on an agreement be14 tween the contractor and the United States about the

15 total cost of the contract and there was no agreement

16 about the cost of each item procured under such con17 tract; or

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

19 not submit a certification of cost and pricing data re20 lating to the contract as required under subsection

21 (a)(2).

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

23 amount against the amount of a contract price adjustment

24 under a contract provision required by paragraph (1) if—
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1 ‘‘(i) the contractor certifies to the contracting of2 ficer (or to a designated representative of the contract3 ing officer) that, to the best of the contractor’s knowl4 edge and belief, the contractor is entitled to the offset;

5 and

6 ‘‘(ii) the contractor proves that the cost or pric7 ing data were available before the date of agreement

8 on the price of the contract (or price of the modifica9 tion), or, if applicable consistent with paragraph

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

11 and that the data were not submitted as specified in

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

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

14 amount otherwise authorized to be offset under subpara15 graph (A) if—

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

17 with respect to the cost or pricing data involved was

18 known to be false when signed; or

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

20 or pricing data referred to in subparagraph (A)(ii)

21 been submitted to the United States before the date of

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

23 modification) or, if applicable under paragraph

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

25 the submission of such cost or pricing data would not
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1 have resulted in an increase in that price in the

2 amount to be offset.

3 ‘‘(e) INTEREST AND PENALTIES FOR CERTAIN OVER4 PAYMENTS.—(1) If the United States makes an overpay5 ment to a contractor under a contract with an executive

6 agency subject to this section and the overpayment was due

7 to the submission by the contractor of defective cost or pric8 ing data, the contractor shall be liable to the United

9 States—

10 ‘‘(A) for interest on the amount of such overpay11 ment, to be computed—

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

13 overpayment was made to the contractor and

14 ending on the date the contractor repays the

15 amount of such overpayment to the United

16 States; and

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

18 Secretary of the Treasury under section 6621 of

19 the Internal Revenue Code of 1986; and

20 ‘‘(B) if the submission of such defective data was

21 a knowing submission, for an additional amount

22 equal to the amount of the overpayment.

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

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

25 certification required by subsection (a)(2) with respect to
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1 the cost or pricing data shall not be affected by the refusal

2 to submit such certification.

3 ‘‘(f) RIGHT OF UNITED STATES TO EXAMINE CON4 TRACTOR RECORDS.—For the purpose of evaluating the ac5 curacy, completeness, and currency of cost or pricing data

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

7 agency shall have the rights provided by section 304C(a)(2).

8 ‘‘(g) COST OR PRICING DATA DEFINED.—In this sec9 tion, the term ‘cost or pricing data’ means all facts that,

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

11 the price of a contract modification) or, if applicable con12 sistent with subsection (d)(1)(B), another date agreed upon

13 between the parties, a prudent buyer or seller would reason14 ably expect to affect price negotiations significantly. Such

15 terms does not include information that is judgmental, but

16 does include the factual information from which a judgment

17 was derived.’’.

18 SEC. 1252. REPEAL OF OBSOLETE PROVISION.

19 Section 303E of the Federal Property and Administra20 tive Services Act of 1949 (41 U.S.C. 253e) is repealed.
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1 Subtitle C—Research and

2 Development

3 SEC. 1301. COOPERATIVE AGREEMENTS FOR BASIC, AP4 PLIED, AND ADVANCED RESEARCH.

5 Title III of the Federal Property and Administrative

6 Service Act of 1949 (41 U.S.C. 251 et seq.) is amended by

7 adding at the end the following new section:

8 ‘‘SEC. 311. COOPERATIVE AGREEMENTS FOR BASIC, AP9 PLIED, AND ADVANCED RESEARCH.

10 ‘‘(a) An executive agency, in carrying out basic, ap11 plied, and advanced research projects, may enter into coop12 erative agreements and other transactions with any person,

13 any agency or instrumentality of the United States, any

14 unit of State or local government, any educational institu15 tion, and any other entity.

16 ‘‘(b)(1) Cooperative agreements and other transactions

17 entered into under subsection (a) may include a clause that

18 requires a person or other entity to make payments to any

19 department or agency of the Federal Government as a con20 dition of receiving support under the agreement or other

21 transaction.

22 ‘‘(2) The amount of any payment received by the Fed23 eral Government pursuant to a requirement imposed under

24 paragraph (1) may be credited, to the extent authorized by

25 an agency head, to the appropriate account established
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1 under subsection (c). Amounts so credited shall be merged

2 with other funds in the account and shall be available for

3 the same purposes and the same period for which other

4 funds in such account are available.

5 ‘‘(c) The authority provided under subsection (a) may

6 be exercised without regard to section 3324 of title 31, Unit7 ed States Code.

8 ‘‘(d) The head of the executive agency shall ensure

9 that—

10 ‘‘(1) to the maximum extent practicable, a coop11 erative agreement or other transaction under this sec12 tion does not provide for research that duplicates re13 search being conducted under existing programs car14 ried out by the executive agency;

15 ‘‘(2) to the extent the agency head determines

16 practicable, the funds provided by the Government

17 under the cooperative agreement or other transaction

18 do not exceed the total amount provided by other par19 ties to the cooperative agreement or other transaction;

20 and

21 ‘‘(3) the authority under this section is used only

22 when the use of standard contracts or grants is not

23 feasible or appropriate.

24 ‘‘(e) There is hereby established on the books of the

25 Treasury separate accounts for each executive agency for
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1 support of advanced research projects provided for in coop2 erative agreements and other transactions entered into

3 under subsection (a). Funds in those accounts shall be avail4 able for the payment of such support.

5 ‘‘(f) An executive agency, in carrying out research

6 projects, may permit the director of any federally funded

7 research and development center to enter into cooperative

8 research and development agreements with any person, any

9 agency or instrumentality of the United States, any unit

10 of State or local government, and any other entity under

11 the authority granted by section 11 of the Stevenson-Wydler

12 Technology Innovation Act of 1980 (15 U.S.C. 3710a).

13 Technology may be transferred to a non-Federal party to

14 such an agreement consistent with the provisions of sections

15 10 and 11 of such Act (15 U.S.C. 3710, 3710a).’’.

16 SEC. 1302. COMPETITION REQUIREMENT FOR AWARDS OF

17 GRANTS AND CONTRACTS TO COLLEGES AND

18 UNIVERSITIES.

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

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

21 organization other than a federally funded research and de22 velopment center (FFRDC)’’ after ‘‘college or university’’

23 each place it appears.
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1 Subtitle D—Procurement Protests

2 PART I—PROTESTS TO THE COMPTROLLER

3 GENERAL

4 SEC. 1401. REVIEW OF PROTESTS AND EFFECT ON CON5 TRACTS PENDING DECISION.

6 (a) CLARIFICATION OF PERIOD FOR CERTAIN AC7 TION.—Paragraph (3) of section 3553(c) of title 31, United

8 States Code, is amended by striking out ‘‘thereafter’’ and

9 inserting in lieu thereof ‘‘after the making of such finding’’.

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

11 such section is amended to read as follows:

12 ‘‘(d) AUTHORIZATION AND SUSPENSION OF PERFORM13 ANCE.—

14 ‘‘(1) AUTHORIZATION REQUIRED.—A contractor

15 awarded a Federal agency contract may not begin

16 performance of the contract or engage in any related

17 activities that result in obligations being incurred by

18 the United States until receipt of an authorization to

19 proceed with performance of the contract from the

20 contracting officer responsible for the award of the

21 contract.

22 ‘‘(2) PROHIBITION OF AUTHORIZATION UNDER

23 CERTAIN CONDITIONS.—A contracting officer may not

24 authorize a contractor to proceed with performance of

25 the contract if—
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1 ‘‘(A) a protest is likely to be filed; and

2 ‘‘(B) the immediate performance of the con3 tract is not in the best interests of the United

4 States.

5 ‘‘(3) SUSPENSION DURING PERIOD WHEN PRO6 TEST IS PENDING.—(A) If the Federal agency award7 ing the contract receives notice of a protest in accord8 ance with this section during the period described in

9 subparagraph (B)—

10 ‘‘(i) the contracting officer may not author11 ize performance of the contract to begin while the

12 protest is pending; and

13 ‘‘(ii) if contract performance was authorized

14 in accordance with paragraph (2) before receipt

15 of the notice, the contracting officer shall imme16 diately direct the contractor to cease performance

17 under the contract and to suspend any related

18 activities that may result in additional obliga19 tions being incurred by the United States under

20 that contract.

21 ‘‘(B) The period referred to in subparagraph (A),

22 with respect to a contract, is the period beginning on

23 the date on which the contract is awarded and ending

24 on the later of—
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1 ‘‘(i) the date that is 8 working days after

2 such date of contract award; or

3 ‘‘(ii) in the case of a procurement with re4 spect to which an unsuccessful offeror has re5 quested a debriefing in accordance with section

6 2305(b)(5) of title 10 or section 303B(e) of the

7 Federal Property and Administrative Services

8 Act of 1949, as applicable, the date that is 5

9 working days after the date on which the Federal

10 agency debriefs the unsuccessful offeror.

11 ‘‘(C) Performance and related activities sus12 pended pursuant to subparagraph (A)(ii) by reason of

13 a protest may not be resumed while the protest is

14 pending.

15 ‘‘(D) The head of the contracting activity may

16 authorize the performance of the contract (notwith17 standing a protest of which the Federal agency has

18 notice under this section)—

19 ‘‘(i) upon a written finding—

20 ‘‘(I) that performance of the contract is

21 in the best interests of the United States; or

22 ‘‘(II) that urgent and compelling cir23 cumstances that significantly affect interests

24 of the United States will not permit waiting
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1 for the decision of the Comptroller General

2 concerning the protest; and

3 ‘‘(ii) after the Comptroller General is noti4 fied of that finding.’’.

5 SEC. 1402. DECISIONS ON PROTESTS.

6 (a) PERIOD FOR RESOLUTION OF AMENDMENTS TO

7 PROTESTS.—Section 3554(a) of title 31, United States

8 Code, is amended—

9 (1) by redesignating paragraph (3) as para10 graph (4); and

11 (2) by inserting after paragraph (2) the follow12 ing new paragraph (3):

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

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

15 the maximum extent practicable, within the time limit es16 tablished under paragraph (1) of this subsection for final

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

18 be resolved within such time limit, the Comptroller General

19 may resolve the amended protest through the express option

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

21 (b) GAO RECOMMENDATIONS ON PROTESTS.—

22 (1) IMPLEMENTATION OF RECOMMENDATIONS.—

23 Section 3554 of title 31, United States Code, is

24 amended—
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1 (A) in subsection (b), by adding at the end

2 the following new paragraph:

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

4 recommendations of the Comptroller General under this

5 subsection with respect to a solicitation for a contract or

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

7 after receiving the recommendations, the head of the con8 tracting activity responsible for that contract shall report

9 such failure to the Comptroller General not later than 5

10 working days after the end of such 60-day period.’’;

11 (B) by striking out subsection (c) and in12 serting in lieu thereof the following:

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

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

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

16 the Comptroller General may recommend that the Federal

17 agency conducting the procurement pay to an appropriate

18 interested party the costs of—

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

20 reasonable attorney’s fees and consultant and expert

21 witness fees; and

22 ‘‘(B) bid and proposal preparation.

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

24 paragraph (1) that a Federal agency pay costs to an inter25 ested party, the Federal agency shall—
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1 ‘‘(A) pay the costs promptly out of funds avail2 able to or for the use of the Federal agency; or

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

4 payment, promptly report to the Comptroller General

5 the reasons for the failure to follow the Comptroller

6 General’s recommendation.

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

8 paragraph (1) that a Federal agency pay costs to an inter9 ested party, the Federal agency and the interested party

10 shall attempt to reach an agreement on the amount of the

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

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

13 Comptroller General may, upon the request of the interested

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

15 costs that the Federal agency should pay.’’; and

16 (C) by striking out subsection (e) and in17 serting in lieu thereof the following:

18 ‘‘(e)(1) The Comptroller General shall report promptly

19 to the Committee on Governmental Affairs and the Commit20 tee on Appropriations of the Senate and to the Committee

21 on Government Operations and the Committee on Appro22 priations of the House of Representatives any case in which

23 a Federal agency fails to implement fully a recommenda24 tion of the Comptroller General under subsection (b) or (c).

25 The report shall include—
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1 ‘‘(A) a comprehensive review of the pertinent

2 procurement, including the circumstances of the fail3 ure of the Federal agency to implement a rec4 ommendation of the Comptroller General; and

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

6 order to correct an inequity or to preserve the integ7 rity of the procurement process, the Congress should

8 consider—

9 ‘‘(i) private relief legislation;

10 ‘‘(ii) further investigation by the Congress;

11 or

12 ‘‘(iii) other action.

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

14 Comptroller General shall transmit to the Congress a report

15 containing a summary of each instance in which a Federal

16 agency did not fully implement a recommendation of the

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

18 preceding year. The report shall also describe each instance

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

20 within 125 days after the date the protest is submitted to

21 the Comptroller General.’’.

22 (2) REQUIREMENT FOR PAYMENT IN ACCORD23 ANCE WITH PRIOR GAO DETERMINATIONS.—Amounts

24 to which the Comptroller General declared an inter25 ested party to be entitled under section 3554 of title
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1 31, United States Code, as in effect immediately be2 fore the enactment of this Act, shall, if not paid or

3 otherwise satisfied by the Federal agency concerned

4 before the date of the enactment of this Act, be paid

5 out of funds available to or for the use of the Federal

6 agency.

7 (c) RECOVERY OF COSTS FOR FRIVOLOUS PRO8 TESTS.—Such section is further amended by adding at the

9 end the following new subsection:

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

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

12 brought or pursued in good faith, the Comptroller may rec13 ommend that the protester or other interested party who

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

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

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

17 the fees and other expenses (as defined in section

18 2412(d)(2)(A) of title 28) incurred by the United States in

19 defending the protest. The Federal Acquisition Regulation

20 shall provide guidance under which the head of an agency

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

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

23 protester obtains documents or other information for the

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

25 General, which establishes that the protest or a portion is
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1 frivolous or has not been brought in good faith and the pro2 tester then promptly withdraws the protest or portion of

3 the protest.’’.

4 (d) RESTRICTION ON ACCESS TO CERTAIN INFORMA5 TION.—Section 3553(f) of title 31, United States Code, is

6 amended—

7 (1) by inserting ‘‘(1)’’ after ‘‘(f)’’; and

8 (2) by adding at the end the following:

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

10 orders which establish terms, conditions, and restrictions for

11 the provision of any document to a person under paragraph

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

13 of information described in subparagraph (C) that is con14 tained in such a document.

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

16 Office of Federal Procurement Policy Act shall apply to the

17 disclosure of information described in subparagraph (C) in

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

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

20 the protective order.

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

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

23 or other proprietary or confidential research, development,

24 or commercial information.
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1 ‘‘(D) A protective order under this paragraph shall not

2 be considered to authorize the withholding of any document

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

4 SEC. 1403. REGULATIONS.

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

6 31, United States Code, is amended—

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

8 (d); and

9 (2) by inserting after subsection (a) the following

10 new subsection (b):

11 ‘‘(b) The procedures shall provide that, in the computa12 tion of any period described in this subchapter—

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

14 which the designated period of time begins to run not

15 be included; and

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

17 be included, unless—

18 ‘‘(A) such last day is a Saturday, a Sun19 day, or a legal holiday; or

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

21 the General Accounting Office or a Federal agen22 cy, such last day is a day on which weather or

23 other conditions make the General Accounting

24 Office or Federal agency inaccessible, in which
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1 event the next day that is not a Saturday, Sun2 day, or legal holiday shall be included.’’.

3 (b) ELECTRONIC FILINGS AND DISSEMINATIONS.—

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

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

6 subsection:

7 ‘‘(c) The Comptroller General may prescribe proce8 dures for the electronic filing and dissemination of docu9 ments and information required under this subchapter. In

10 prescribing such procedures, the Comptroller General shall

11 consider the ability of all parties to achieve electronic access

12 to such documents and records.’’.

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

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

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

16 PART II—PROTESTS IN PROCUREMENTS OF

17 AUTOMATIC DATA PROCESSING

18 SEC. 1431. PERIODS FOR CERTAIN ACTIONS.

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

20 Paragraph (2)(B) of section 111(f) of the Federal Property

21 and Administrative Services Act of 1949 (40 U.S.C. 759(f))

22 is amended—

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

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

25 (B) by inserting ‘‘(i)’’ after ‘‘(B)’’; and
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1 (C) by adding at the end the following:

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

3 preclude the Federal agency concerned from continuing the

4 procurement process up to but not including award of the

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

6 interests of the United States.’’.

7 (2) Paragraph (3) of such section is amended by strik8 ing out subparagraph (A) and inserting in lieu thereof the

9 following:

10 ‘‘(A)(i) If, with respect to an award of a contract, the

11 board receives notice of a protest under this subsection with12 in the period described in clause (ii), the board shall, at

13 the request of an interested party, hold a hearing to deter14 mine whether the board should suspend the procurement au15 thority of the Administrator or the Administrator’s delega16 tion of procurement authority for the protested procurement

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

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

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

20 ending on the later of—

21 ‘‘(I) the date that is 8 working days after such

22 contract award date; or

23 ‘‘(II) in the case of a procurement with respect

24 to which an unsuccessful offeror has requested a de25 briefing in accordance with section 303B(e), the date
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1 that is 5 working days after the date on which the

2 Federal agency debriefs the unsuccessful offeror.

3 ‘‘(iii) The board shall hold the requested hearing with4 in 7 working days after the date of the filing of the protest.’’.

5 (b) RESOLUTION OF AMENDMENTS TO PROTESTS.—

6 Paragraph (4)(B) of such section is amended by adding at

7 the end the following: ‘‘An amendment which adds a new

8 ground of protest should be resolved, to the maximum extent

9 practicable, within the time limits established for resolution

10 of the initial protest.’’.

11 SEC. 1432. DISMISSALS OF FRIVOLOUS PROTESTS AND RE12 COVERY OF COSTS.

13 Section 111(f)(4) of the Federal Property and Admin14 istrative Services Act of 1949 (40 U.S.C. 759(f)(4)) is

15 amended by striking out subparagraph (C) and inserting

16 in lieu thereof the following new subparagraphs:

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

18 determines—

19 ‘‘(i) is frivolous;

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

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

22 protest.

23 ‘‘(D) If the board makes a determination under sub24 paragraph (C), the board may impose appropriate sanc25 tions. Such sanctions may include imposition of liability
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1 on the protester, or other interested party who joins the pro2 test, for payment to the United States of all or that portion

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

4 of reviewing the protest, including the fees and other ex5 penses (as defined in section 2412(d)(2)(A) of title 28) in6 curred by the United States in defending the protest. The

7 Federal Acquisition Regulation shall provide guidance

8 under which the head of an agency may initiate action to

9 obtain such costs, unless (i) special circumstances would

10 make such payment unjust, or (ii) the protester obtains doc11 uments or other information for the first time, after the pro12 test is filed with the board, which establishes that the protest

13 or a portion is frivolous or has not been brought in good

14 faith and the protester then promptly withdraws the protest

15 or portion of the protest.’’.

16 SEC. 1433. AWARD OF COSTS.

17 Section 111(f)(5) of the Federal Property and Admin18 istrative Services Act of 1949 (40 U.S.C. 759(f)(5)) is

19 amended by striking out subparagraph (C) and inserting

20 in lieu thereof the following:

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

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

23 States Code, further declare an appropriate prevailing

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

25 protest (including reasonable attorney’s fees and consultant
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1 and expert witness fees), and bid and proposal prepara2 tion.’’.

3 SEC. 1434. DISMISSAL AGREEMENTS.

4 Section 111(f)(5) of the Federal Property and Admin5 istrative Services Act of 1949 (40 U.S.C. 759(f)(5)), as

6 amended by section 1434, is further amended by adding at

7 the end the following new subparagraphs:

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

9 of a protest and involves a direct or indirect expenditure

10 of appropriated funds shall be submitted to the board and

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

12 protective order considered appropriate by the board) before

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

14 a settlement agreement, the submission of the agreement

15 submitted to the board shall include a memorandum, signed

16 by the contracting officer concerned, that describes in detail

17 the procurement, the grounds for protest, the Federal Gov18 ernment’s position regarding the grounds for protest, the

19 terms of the settlement, and the agency’s position regarding

20 the propriety of the award or proposed award of the con21 tract at issue in the protest.

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

23 subparagraph (C) or under the terms of a settlement agree24 ment under subparagraph (D) shall be made from the ap25 propriation made by section 1304 of title 31, United States
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1 Code, for the payment of judgments. The Federal agency

2 concerned shall reimburse that appropriation account out

3 of funds available for the procurement.’’.

4 SEC. 1435. MATTERS TO BE COVERED IN REGULATIONS.

5 Section 111(f) of the Federal Property and Adminis6 trative Services Act of 1949 (40 U.S.C. 759(f)) is amend7 ed—

8 (1) by striking out paragraph (8);

9 (2) by redesignating paragraph (9) as para10 graph (8); and

11 (3) by inserting after paragraph (6) the follow12 ing:

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

14 procedures as may be necessary to the expeditious disposi15 tion of protests filed under the authority of this subsection.

16 ‘‘(B) The procedures shall provide that, in the com17 putation of any period described in this subsection—

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

19 which the designated period of time begins to run not

20 be included; and

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

22 be included, unless—

23 ‘‘(I) such last day is a Saturday, a Sunday,

24 or a legal holiday; or
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1 ‘‘(II) in the case of a filing of a paper at

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

3 weather or other conditions make the board or

4 Federal agency inaccessible, in which event the

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

6 legal holiday shall be included.

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

8 and dissemination of documents and information required

9 under this subsection and in so providing shall consider the

10 ability of all parties to achieve electronic access to such doc11 uments and records.’’.

12 SEC. 1436. OVERSIGHT OF ACQUISITION OF AUTOMATIC

13 DATA PROCESSING EQUIPMENT BY FEDERAL

14 AGENCIES.

15 Section 111 of the Federal Property and Administra16 tive Services Act of 1949 (40 U.S.C. 759) is amended by

17 adding at the end the following new subsection:

18 ‘‘(h)(1) The Administrator shall collect and compile

19 data regarding the procurement of automatic data process20 ing equipment under this section. The data collected and

21 compiled shall include, at a minimum, with regard to each

22 procurement the following:

23 ‘‘(A) The procuring agency.

24 ‘‘(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 contract.

11 ‘‘(J) Contract price, to the extent that the price

12 is not proprietary information.

13 ‘‘(2) The head of each Federal agency shall report to

14 the Administrator in accordance with regulations issued by

15 the Administrator all information that the Administrator

16 determines necessary in order to satisfy the requirements

17 in paragraph (1).

18 ‘‘(3) The Administrator shall—

19 ‘‘(A) carry out a systematic, periodic review of

20 information received under this subsection; and

21 ‘‘(B) use such information, as appropriate, to de22 termine the compliance of Federal agencies with the

23 requirements of this section.’’.
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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 the above 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) of this section and section

11 2 of the Office of Federal Procurement Policy Act (41

12 U.S.C. 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 20 per9 cent of the purchases and contracts entered into under this

10 chapter should be placed with small business concerns and

11 that 5 percent of the purchases and contracts entered into

12 under this chapter should be placed with concerns that are

13 small disadvantaged businesses.

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’ includes all stages

8 of the process of acquiring property or services, begin9 ning with the process for determining a need for

10 property or services and ending with contract comple11 tion and closeout.

12 ‘‘(3) The term ‘procurement system’ means the

13 integration of the procurement process, the profes14 sional development of procurement personnel, and the

15 management structure for carrying out the procure16 ment function.

17 ‘‘(4) The term ‘standards’ means the criteria for

18 determining the effectiveness of the procurement sys19 tem by measuring the performance of the various ele20 ments of such system.’’;

21 (5) by inserting after paragraph (5) (as so redes22 ignated) the following new paragraphs:

23 ‘‘(6) The term ‘full and open competition’, when

24 used with respect to a procurement, means that all re-
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1 sponsible sources are permitted to submit sealed bids

2 or competitive proposals on the procurement.

3 ‘‘(7) The term ‘responsible source’ means a pro4 spective contractor who—

5 ‘‘(A) has adequate financial resources to per6 form the contract or the ability to obtain such

7 resources;

8 ‘‘(B) is able to comply with the required or

9 proposed delivery or performance schedule, tak10 ing into consideration all existing commercial

11 and Government business commitments;

12 ‘‘(C) has a satisfactory performance record;

13 ‘‘(D) has a satisfactory record of integrity and

14 business ethics;

15 ‘‘(E) has the necessary organization, experi16 ence, accounting and operational controls, and

17 technical skills, or the ability to obtain such or18 ganization, experience, controls, and skills;

19 ‘‘(F) has the necessary production, construc20 tion, and technical equipment and facilities, or

21 the ability to obtain such equipment and facili22 ties; and

23 ‘‘(G) is otherwise qualified and eligible, to re24 ceive an award under applicable laws and regu25 lations.’’; and
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1 (6) by inserting after paragraph (9) (as so redes2 ignated) the following new paragraphs:

3 ‘‘(10) The term ‘item’, ‘item of supply’, or ‘sup4 plies’ means any individual part, component, sub5 assembly, assembly, or subsystem integral to a major

6 system, and other property which may be replaced

7 during the service life of the system, and includes

8 spare parts and replenishment spare parts, but does

9 not include packaging or labeling associated with

10 shipment or identification of an ‘item’.

11 ‘‘(11) The terms ‘commercial item’,

12 ‘nondevelopmental item’, ‘component’, and ‘commer13 cial component’ have the meanings given such terms

14 in section 2281 of this title.’’.

15 SEC. 1503. DELEGATION OF PROCUREMENT FUNCTIONS.

16 (a) CONSOLIDATION OF DELEGATION AUTHORITY.—

17 (1) Section 2311 of title 10, United States Code, is amended

18 to read as follows:

19 ‘‘§ 2311. Assignment and delegation of procurement

20 functions and responsibilities

21 ‘‘(a) IN GENERAL.—Except to the extent expressly pro22 hibited by another provision of law, the head of an agency

23 may delegate, subject to his direction, to any other officer

24 or official of that agency, any power under this chapter.
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1 ‘‘(b) PROCUREMENTS FOR OR WITH OTHER AGEN2 CIES.—Subject to subsection (a), to facilitate the procure3 ment of property and services covered by this chapter by

4 each agency named in section 2303 of this title for any other

5 agency, and to facilitate joint procurement by those agen6 cies—

7 ‘‘(1) the head of an agency may, within his

8 agency, delegate functions and assign responsibilities

9 relating to procurement;

10 ‘‘(2) the heads of two or more agencies may by

11 agreement delegate procurement functions and assign

12 procurement responsibilities from one agency to an13 other of those agencies or to an officer or civilian em14 ployee of another of those agencies; and

15 ‘‘(3) the heads of two or more agencies may cre16 ate joint or combined offices to exercise procurement

17 functions and responsibilities.

18 ‘‘(c) APPROVAL OF TERMINATIONS AND REDUCTIONS

19 OF JOINT ACQUISITION PROGRAMS.—(1) The Secretary of

20 Defense shall prescribe regulations that prohibit each mili21 tary department participating in a joint acquisition pro22 gram approved by the Under Secretary of Defense for Ac23 quisition and Technology from terminating or substantially

24 reducing its participation in such program without the ap25 proval of the Under Secretary.
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1 ‘‘(2) The regulations shall include the following provi2 sions:

3 ‘‘(A) A requirement that, before any such termi4 nation or substantial reduction in participation is

5 approved, the proposed termination or reduction be

6 reviewed by the Joint Requirements Oversight Council

7 of the Department of Defense.

8 ‘‘(B) A provision that authorizes the Under Sec9 retary of Defense for Acquisition and Technology to

10 require a military department whose participation in

11 a joint acquisition program has been approved for

12 termination or substantial reduction to continue to

13 provide some or all of the funding necessary for the

14 acquisition program to be continued in an efficient

15 manner.’’.

16 (2) The table of sections at the beginning of chapter

17 137 of such title is amended by striking out the item relat18 ing to section 2311 and inserting in lieu thereof the follow19 ing:

‘‘2311. Assignment and delegation of procurement functions and responsibilities.’’.

20 (b) CONFORMING REPEAL.—(1) Section 2308 of title

21 10, United States Code, is repealed.

22 (2) The table of sections at the beginning of chapter

23 137 of such title is amended by striking out the item related

24 to section 2308.
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1 SEC. 1504. DETERMINATIONS AND DECISIONS.

2 Section 2310 of title 10, United States Code, is amend3 ed to read as follows:

4 ‘‘§ 2310. Determinations and decisions

5 ‘‘(a) INDIVIDUAL OR CLASS DETERMINATIONS AND

6 DECISIONS AUTHORIZED.—Determinations and decisions

7 required to be made under this chapter by the head of an

8 agency may be made for an individual purchase or contract

9 or, except to the extent expressly prohibited by another pro10 vision of law, for a class of purchases or contracts. Such

11 determinations and decisions are final.

12 ‘‘(b) WRITTEN FINDINGS REQUIRED.—(1) Each deter13 mination or decision under section 2306(g)(1), 2307(c), or

14 2313(c) of this title shall be based on a written finding by

15 the person making the determination or decision. The find16 ing shall set out facts and circumstances that support the

17 determination or decision.

18 ‘‘(2) Each finding referred to in paragraph (1) shall

19 be final. The head of the agency making such finding shall

20 maintain a copy of the finding for not less than 6 years

21 after the date of the determination or decision.’’.

22 SEC. 1505. RESTRICTIONS ON UNDEFINITIZED CONTRAC23 TUAL ACTIONS

24 (a) CLARIFICATION OF LIMITATION.—Subsection (b) of

25 section 2326 of title 10, United States Code, is amended—
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1 (1) in the subsection caption, by striking out

2 ‘‘AND EXPENDITURE’’;

3 (2) in paragraph (1)(B), by striking out ‘‘or ex4 pended’’;

5 (3) in paragraph (2), by striking out ‘‘expend’’

6 and inserting in lieu thereof ‘‘obligate’’; and

7 (4) in paragraph (3)—

8 (A) by striking out ‘‘expended’’ and insert9 ing in lieu thereof ‘‘obligated’’; and

10 (B) by striking out ‘‘expend’’ and inserting

11 in lieu thereof ‘‘obligate’’.

12 (b) WAIVER AUTHORITY.—Such subsection is further

13 amended—

14 (1) by redesignating paragraph (4) as para15 graph (5); and

16 (2) by inserting after paragraph (3) the follow17 ing new paragraph (4):

18 ‘‘(4) The head of an agency may waive the provisions

19 of this subsection with respect to a contract of that agency

20 if such head of an agency determines that the waiver is

21 necessary in order to support a contingency operation.’’.

22 (c) INAPPLICABILITY OF RESTRICTIONS TO CONTRACTS

23 WITHIN THE SIMPLIFIED ACQUISITION THRESHOLD.—

24 Subsection (g)(1)(B) of such section is amended by striking
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1 out ‘‘small purchase threshold’’ and inserting in lieu thereof

2 ‘‘simplified acquisition threshold’’.

3 SEC. 1506. REPEAL OF REQUIREMENT RELATING TO PRO4 DUCTION SPECIAL TOOLING AND PRODUC5 TION SPECIAL TEST EQUIPMENT.

6 (a) REPEAL.—Section 2329 of title 10, United States

7 Code, is repealed.

8 (b) CLERICAL AMENDMENT.—The table of sections at

9 the beginning of chapter 137 of such title is amended by

10 striking out the item related to section 2329.

11 SEC. 1507. REGULATIONS FOR BIDS.

12 Section 2381(a) of title 10, United States Code, is

13 amended by striking out ‘‘(a) The Secretary’’ and all that

14 follows through the end of paragraph (1) and inserting in

15 lieu thereof the following:

16 ‘‘(a) The Secretary of Defense or the Secretary of a

17 military department may—

18 ‘‘(1) prescribe regulations for the preparation,

19 submission, and opening of bids for contracts; and’’.

20 PART II—CIVILIAN AGENCY ACQUISITIONS

21 SEC. 1551. DEFINITIONS.

22 (a) ADDITIONAL TERMS.—Section 309 of the Federal

23 Property and Administrative Services Act of 1949 (41

24 U.S.C. 259) is amended by adding at the end the following

25 new subsection:
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1 ‘‘(d) The terms ‘commercial item’, ‘nondevelopmental

2 item’, ‘component’, and ‘commercial component’ have the

3 same meanings provided such terms in section 315 of this

4 title.’’.

5 (b) CONFORMING AMENDMENTS.—Section 4 of the Of6 fice of Federal Procurement Policy Act (41 U.S.C. 403) is

7 amended—

8 (1) by striking out ‘‘Act—’’and inserting in lieu

9 thereof ‘‘Act:’’;

10 (2) by capitalizing the initial letter in the first

11 word of each paragraph;

12 (3) by striking out the semicolon at the end of

13 each of paragraphs (1), (2), (3), (5), (6), (7), (8), and

14 (9) and inserting in lieu thereof a period; and

15 (4) in paragraphs (4) and (10), by striking out

16 ‘‘; and’’ at the end and inserting in lieu thereof a pe17 riod.

18 SEC. 1552. DELEGATION OF PROCUREMENT FUNCTIONS.

19 Title III of the Federal Property and Administrative

20 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

21 by section 1301, is further amended by adding at the end

22 the following new section:
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1 ‘‘SEC. 312. ASSIGNMENT AND DELEGATION OF PROCURE2 MENT FUNCTIONS AND RESPONSIBILITIES.

3 ‘‘(a) IN GENERAL.—Except to the extent expressly pro4 hibited by another provision of law, an agency head may

5 delegate, subject to his direction, to any other officer or offi6 cial of that agency, any power under this title.

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 title by each

10 executive agency for any other executive agency, and to fa11 cilitate joint procurement by those executive agencies—

12 ‘‘(1) an agency head may, within his executive

13 agency, delegate functions and assign responsibilities

14 relating to procurement;

15 ‘‘(2) the heads of two or more executive agencies

16 may by agreement delegate procurement functions

17 and assign procurement responsibilities from one ex18 ecutive agency to another of those executive agencies

19 or to an officer or civilian employee of another of

20 those executive agencies; and

21 ‘‘(3) the heads of two or more executive agencies

22 may create joint or combined offices to exercise pro23 curement functions and responsibilities.’’.

24 SEC. 1553. DETERMINATIONS AND DECISIONS.

25 Title III of the Federal Property and Administrative

26 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended
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1 by section 1552, is further amended by adding at the end

2 the following new section:

3 ‘‘SEC. 313. DETERMINATIONS AND DECISIONS.

4 ‘‘(a) INDIVIDUAL OR CLASS DETERMINATIONS AND

5 DECISIONS AUTHORIZED.—Determinations and decisions

6 required to be made under this title by an agency head may

7 be made for an individual purchase or contract or, except

8 to the extent expressly prohibited by another provision of

9 law, for a class of purchases or contracts. Such determina10 tions and decisions are final.

11 ‘‘(b) WRITTEN FINDINGS REQUIRED.—(1) Each deter12 mination under section 305(c) shall be based on a written

13 finding by the person making the determination or decision.

14 The finding shall set out facts and circumstances that sup15 port the determination or decision.

16 ‘‘(2) Each finding referred to in paragraph (1) shall

17 be final. The agency head making such finding shall main18 tain a copy of the finding for not less 6 years after the

19 date of the determination or decision.’’.

20 SEC. 1554. RESTRICTIONS ON UNDEFINITIZED CONTRAC21 TUAL ACTIONS.

22 Title III of the Federal Property and Administrative

23 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

24 by section 1553, is further amended by adding at the end

25 the following new section:
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1 ‘‘SEC. 314. UNDEFINITIZED CONTRACTUAL ACTIONS: RE2 STRICTIONS.

3 ‘‘(a) IN GENERAL.—An agency head may not enter

4 into an undefinitized contractual action unless the request

5 to the agency head for authorization of the contractual ac6 tion includes a description of the anticipated effect on re7 quirements of the executive agency concerned if a delay is

8 incurred for purposes of determining contractual terms,

9 specifications, and price before performance is begun under

10 the contractual action.

11 ‘‘(b) LIMITATIONS ON OBLIGATIONS OF FUNDS.—(1)

12 A contracting officer of an executive agency may not enter

13 into an undefinitized contractual action unless the contrac14 tual action provides for agreement upon contractual terms,

15 specifications, and price by the earlier of—

16 ‘‘(A) the end of the 180-day period beginning on

17 the date on which the contractor submits a qualifying

18 proposal (as defined in subsection (f)) to definitize the

19 contractual terms, specifications, and price; or

20 ‘‘(B) the date on which the amount of funds obli21 gated under the contractual action is equal to more

22 than 50 percent of the negotiated overall ceiling price

23 for the contractual action.

24 ‘‘(2) Except as provided in paragraph (3), the con25 tracting officer for an undefinitized contractual action may

26 not obligate with respect to such contractual action an
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1 amount that is equal to more than 50 percent of the nego2 tiated overall ceiling price until the contractual terms, spec3 ifications, and price are definitized for such contractual ac4 tion.

5 ‘‘(3) If a contractor submits a qualifying proposal (as

6 defined in subsection (f)) to definitize an undefinitized con7 tractual action before an amount equal to more than 50

8 percent of the negotiated overall ceiling price is obligated

9 on such action, the contracting officer for such action may

10 not obligate with respect to such contractual action an

11 amount that is equal to more than 75 percent of the nego12 tiated overall ceiling price until the contractual terms, spec13 ifications, and price are definitized for such contractual ac14 tion.

15 ‘‘(4) This subsection does not apply to an undefinitized

16 contractual action for the purchase of initial spares.

17 ‘‘(c) INCLUSION OF NON-URGENT REQUIREMENTS.—

18 Requirements for spare parts and support equipment that

19 are not needed on an urgent basis may not be included in

20 an undefinitized contractual action for spare parts and

21 support equipment that are needed on an urgent basis un22 less the agency head approves such inclusion as being—

23 ‘‘(1) good business practice; and

24 ‘‘(2) in the best interests of the United States.
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1 ‘‘(d) MODIFICATION OF SCOPE.—The scope of an

2 undefinitized contractual action under which performance

3 has begun may not be modified unless the agency head ap4 proves such modification as being—

5 ‘‘(1) good business practice; and

6 ‘‘(2) in the best interests of the United States.

7 ‘‘(e) ALLOWABLE PROFIT.—An agency head shall en8 sure that the profit allowed on an undefinitized contractual

9 action for which the final price is negotiated after a sub10 stantial portion of the performance required is completed

11 reflects—

12 ‘‘(1) the possible reduced cost risk of the contrac13 tor with respect to costs incurred during performance

14 of the contract before the final price is negotiated; and

15 ‘‘(2) the reduced cost risk of the contractor with

16 respect to costs incurred during performance of the re17 maining portion of the contract.

18 ‘‘(f) DEFINITIONS.—In this section:

19 ‘‘(1) The term ‘undefinitized contractual action’

20 means a new procurement action entered into by an

21 agency head for which the contractual terms, speci22 fications, or price are not agreed upon before perform23 ance is begun under the action. Such term does not

24 include contractual actions with respect to the follow25 ing:
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1 ‘‘(A) Purchases in an amount not in excess

2 of the amount of the simplified acquisition

3 threshold.

4 ‘‘(B) Congressionally mandated long-lead

5 procurement contracts.

6 ‘‘(2) The term ‘qualifying proposal’ means a pro7 posal that contains sufficient information to enable

8 the agency head concerned to conduct complete and

9 meaningful audits of the information contained in the

10 proposal and of any other information that the agen11 cy head is entitled to review in connection with the

12 contract, as determined by the contracting officer.’’.

13 TITLE II—CONTRACT

14 ADMINISTRATION

15 Subtitle A—Contract Payment

16 PART I—ARMED SERVICES ACQUISITIONS

17 SEC. 2001. CONTRACT FINANCING.

18 (a) REORGANIZATION OF PRINCIPAL AUTHORITY PRO19 VISION.—Section 2307 of title 10, United States Code, is

20 amended—

21 (1) by striking out the section heading and in22 serting in lieu thereof the following:

23 ‘‘§ 2307. Contract financing’’;

24 (2) by inserting ‘‘PAYMENT AUTHORITY.—’’ after

25 ‘‘(a)’’ in subsection (a);
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1 (3) by inserting ‘‘PAYMENT AMOUNT.—’’ after

2 ‘‘(b)’’ in subsection (b);

3 (4) by inserting ‘‘SECURITY FOR ADVANCE PAY4 MENTS.—’’ after ‘‘(c)’’ in subsection (c);

5 (5) by inserting ‘‘CONDITIONS FOR PROGRESS

6 PAYMENTS.—’’ after ‘‘(d)’’ in subsection (d)’’; and

7 (6) by striking out ‘‘(e)(1) In any case’’ and in8 serting in lieu thereof ‘‘(g) ACTION IN CASE OF

9 FRAUD.—(1) In any case’’.

10 (b) TERMINOLOGY CORRECTION.—Such section is fur11 ther amended in subsection (a)(2) by striking out ‘‘bid’’.

12 (c) EFFECTIVE DATE OF LIEN RELATED TO ADVANCE

13 PAYMENTS.—Such section is further amended in subsection

14 (c) by inserting before the period at the end of the third

15 sentence the following: ‘‘and is effective immediately upon

16 the first advancement of funds without filing, notice, or any

17 other action by the United States’’.

18 (d) CONDITIONS FOR PROGRESS PAYMENTS.—Such

19 section is further amended in subsection (d)—

20 (1) in the first sentence of paragraph (1), by

21 striking out ‘‘work, which’’ and all that follows

22 through ‘‘accomplished’’ and inserting in lieu thereof

23 ‘‘work accomplished that meets standards established

24 under the contract’’; and
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1 (2) by striking out paragraph (3) and inserting

2 in lieu thereof the following:

3 ‘‘(3) This subsection applies to a contract for an

4 amount equal to or greater than the simplified acquisition

5 threshold.’’.

6 (e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL

7 ITEMS.—Such section is further amended by inserting after

8 subsection (d) the following new subsection (e):

9 ‘‘(e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL

10 ITEMS.—(1) Payments under subsection (a) for commercial

11 items, as that term is defined in section 2281 of this title,

12 may be made under such terms and conditions as the head

13 of the agency determines are appropriate or customary in

14 the commercial marketplace. The head of the agency shall

15 obtain adequate security for such payments. If the security

16 is in the form of a lien in favor of the United States, such

17 lien is paramount to all other liens and is effective imme18 diately upon the first payment, without filing, notice, or

19 other action by the United States.

20 ‘‘(2) Advance payments made under subsection (a) for

21 commercial items may include payments, in a total amount

22 of not more than 15 percent of the contract price, in ad23 vance of any performance of work under the contract.
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1 ‘‘(3) The conditions of subsections (c) and (d) do not

2 apply to payments made for commercial items in accord3 ance with this subsection.’’.

4 (f) NAVY CONTRACTS.—Such section is further amend5 ed by inserting after subsection (e) the following new sub6 section (f):

7 ‘‘(f) CERTAIN NAVY CONTRACTS.—(1) The Secretary of

8 the Navy shall provide that the rate for progress payments

9 on any contract awarded by the Secretary for repair, main10 tenance, or overhaul of a naval vessel shall be not less

11 than—

12 ‘‘(A) 95 percent, in the case of firms considered

13 to be small businesses; and

14 ‘‘(B) 90 percent, in the case of all other firms.

15 ‘‘(2) The Secretary of the Navy may advance to private

16 salvage companies such funds as the Secretary considers

17 necessary to provide for the immediate financing of salvage

18 operations. Advances under this paragraph shall be made

19 on terms that the Secretary considers adequate for the pro20 tection of the United States.

21 ‘‘(3) The Secretary of the Navy shall ensure that, when

22 partial, progress, or other payments are made under a con23 tract for construction or conversion of a naval vessel, the

24 United States is secured by a lien upon work in progress

25 and on property acquired for performance of the contract
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1 on account of all payments so made. The lien is paramount

2 to all other liens.’’.

3 (g) CLERICAL AMENDMENT.—The table of sections at

4 the beginning of chapter 137 of title 10, United States Code,

5 is amended by striking out the item relating to section 2307

6 and inserting in lieu thereof the following:

‘‘2307. Contract financing.’’.

7 (h) REPEAL OF SUPERSEDED PROVISIONS.—

8 (1) PROGRESS PAYMENTS UNDER CERTAIN NAVY

9 CONTRACTS.—

10 (A) REPEAL.—Section 7312 of title 10,

11 United States Code, is repealed.

12 (B) CLERICAL AMENDMENT.—The table of

13 sections at the beginning of chapter 633 of such

14 title is amended by striking out the item relating

15 to section 7312.

16 (2) ADVANCEMENT OF PAYMENTS FOR NAVY SAL17 VAGE OPERATIONS.—

18 (A) REPEAL.—Section 7364 of such title is

19 repealed.

20 (B) CLERICAL AMENDMENT.—The table of

21 sections at the beginning of chapter 637 of such

22 title is amended by striking out the item relating

23 to section 7364.

24 (3) PARTIAL PAYMENTS UNDER NAVY CON25 TRACTS—
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1 (A) REPEAL.—Section 7521 of such title is

2 repealed.

3 (B) CLERICAL AMENDMENT.—The table of

4 sections at the beginning of chapter 645 of such

5 title is amended by striking out the item relating

6 to section 7521.

7 (4) NAVY RESEARCH CONTRACTS.—Section 7522

8 of title 10, United States Code, is amended—

9 (A) by striking out subsection (b); and

10 (B) by redesignating subsection (c) as sub11 section (b).

12 SEC. 2002. REPEAL OF VOUCHERING PROCEDURES SEC13 TION.

14 (a) REPEAL.—Section 2355 of title 10, United States

15 Code, is repealed.

16 (b) CLERICAL AMENDMENT.—The table of sections at

17 the beginning of chapter 139 of such title is amended by

18 striking out the item relating to section 2355.

19 PART II—CIVILIAN AGENCY ACQUISITIONS

20 SEC. 2051. CONTRACT FINANCING.

21 (a) REORGANIZATION OF PRINCIPAL AUTHORITY PRO22 VISION.—Section 305 of the Federal Property and Adminis23 trative Services Act of 1949 (41 U.S.C. 255) is amended—
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1 (1) by striking out the section heading and the

2 section designation and inserting in lieu thereof the

3 following:

4 ‘‘SEC. 305. CONTRACT FINANCING.’’;

5 (2) by inserting ‘‘PAYMENT AUTHORITY.—’’ after

6 ‘‘(a)’’ in subsection (a);

7 (3) by inserting ‘‘PAYMENT AMOUNT.—’’ after

8 ‘‘(b)’’ in subsection (b); and

9 (4) by inserting ‘‘SECURITY FOR ADVANCE PAY10 MENTS.—’’ after ‘‘(c)’’ in subsection (c).

11 (b) TERMINOLOGY CORRECTION.—Such section is fur12 ther amended in subsection (a)(2) by striking out ‘‘bid’’.

13 (c) EFFECTIVE DATE OF LIEN RELATED TO ADVANCE

14 PAYMENTS.—Such section is further amended in subsection

15 (c) by inserting before the period at the end of the third

16 sentence the following: ‘‘and is effective immediately upon

17 the first advancement of funds without filing, notice, or any

18 other action by the United States’’.

19 (d) REVISION OF CIVILIAN AGENCY PROVISION TO EN20 SURE UNIFORM REQUIREMENTS FOR PROGRESS PAY21 MENTS.—

22 (1) IN GENERAL.—Such section is further

23 amended by adding at the end the following new sub24 sections:
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1 ‘‘(d) CONDITIONS FOR PROGRESS PAYMENTS.—(1) The

2 agency head shall ensure that any payment for work in

3 progress (including materials, labor, and other items) under

4 a contract of an executive agency that provides for such

5 payments is commensurate with the work accomplished that

6 meets standards established under the contract. The contrac7 tor shall provide such information and evidence as the agen8 cy head determines necessary to permit the agency head to

9 carry out the preceding sentence.

10 ‘‘(2) The agency head shall ensure that progress pay11 ments referred to in paragraph (1) are not made for more

12 than 80 percent of the work accomplished under the contract

13 so long as the agency head has not made the contractual

14 terms, specifications, and price definite.

15 ‘‘(3) This subsection applies to a contract for an

16 amount equal to or greater than the simplified acquisition

17 threshold.

18 ‘‘(e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL

19 ITEMS.—(1) Payments under subsection (a) for commercial

20 items, as that term is defined in section 315 of this title,

21 may be made under such terms and conditions as the head

22 of the agency determines are appropriate or customary in

23 the commercial marketplace. The head of the agency shall

24 obtain adequate security for such payments. If the security

25 is in the form of a lien in favor of the United States, such
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1 lien is paramount to all other liens and is effective imme2 diately upon the first payment, without filing, notice, or

3 other action by the United States.

4 ‘‘(2) Advance payments made under subsection (a) for

5 commercial items may include payments, in a total amount

6 of not more than 15 percent of the contract price, in ad7 vance of any performance of work under the contract.

8 ‘‘(3) The conditions of subsections (c) and (d) do not

9 apply to payments made for commercial items in accord10 ance with this subsection.

11 ‘‘(f) ACTION IN CASE OF FRAUD.—(1) In any case in

12 which the remedy coordination official of an executive agen13 cy finds that there is substantial evidence that the request

14 of a contractor for advance, partial, or progress payment

15 under a contract awarded by that executive agency is based

16 on fraud, the remedy coordination official shall recommend

17 that the agency head reduce or suspend further payments

18 to such contractor.

19 ‘‘(2) An agency head receiving a recommendation

20 under paragraph (1) in the case of a contractor’s request

21 for payment under a contract shall determine whether there

22 is substantial evidence that the request is based on fraud.

23 Upon making such a determination, the agency head may

24 reduce or suspend further payments to the contractor under

25 such contract.
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1 ‘‘(3) The extent of any reduction or suspension of pay2 ments by an agency head under paragraph (2) on the basis

3 of fraud shall be reasonably commensurate with the antici4 pated loss to the United States resulting from the fraud.

5 ‘‘(4) A written justification for each decision of the

6 agency head whether to reduce or suspend payments under

7 paragraph (2), and for each recommendation received by

8 the agency head in connection with such decision, shall be

9 prepared and be retained in the files of the executive agency.

10 ‘‘(5) Each agency head shall prescribe procedures to

11 ensure that, before the agency head decides to reduce or sus12 pend payments in the case of a contractor under paragraph

13 (2), the contractor is afforded notice of the proposed reduc14 tion or suspension and an opportunity to submit matters

15 to the head of the agency in response to such proposed reduc16 tion or suspension.

17 ‘‘(6) Not later than 180 days after the date on which

18 an agency head reduces or suspends payments to a contrac19 tor under paragraph (2), the remedy coordination official

20 of the executive agency shall—

21 ‘‘(A) review the determination of fraud on which

22 the reduction or suspension is based; and

23 ‘‘(B) transmit a recommendation to the agency

24 head whether the suspension or reduction should con25 tinue.
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1 ‘‘(7) Each agency head who receives recommendations

2 made by a remedy coordination official of the executive

3 agency to reduce or suspend payments under paragraph (2)

4 during a fiscal year shall prepare for such year a report

5 that contains the recommendations, the actions taken on the

6 recommendations and the reasons for such actions, and an

7 assessment of the effects of such actions on the Federal Gov8 ernment. Any such report shall be available to any Member

9 of Congress upon request.

10 ‘‘(8) An agency head may not delegate responsibilities

11 under this subsection to any person in a position below level

12 IV of the Executive Schedule.

13 ‘‘(9) In this subsection, the term ‘remedy coordination

14 official’, with respect to an executive agency, means the per15 son or entity in that executive agency who coordinates with16 in that executive agency the administration of criminal,

17 civil, administrative, and contractual remedies resulting

18 from investigations of fraud or corruption related to pro19 curement activities.’’.

20 (2) RELATIONSHIP TO PROMPT PAYMENT RE21 QUIREMENTS.—The amendments made by paragraph

22 (1) are not intended to impair or modify procedures

23 required by the provisions of chapter 39 of title 31,

24 United States Code, and the regulations issued pursu25 ant to such provisions of law, that relate to progress
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1 payment requests, as such procedures are in effect on

2 the date of the enactment of this Act.

3 PART III—ACQUISITIONS GENERALLY

4 SEC. 2061. INTEREST PENALTY ON CONTRACT CLOSE-OUT

5 LAG-TIME.

6 Section 3903(a)(1) of title 31, United States Code, is

7 amended—

8 (1) by striking out ‘‘or’’ at the end of subpara9 graph (A);

10 (2) by inserting ‘‘or’’ after the semicolon at the

11 end of subparagraph (B); and

12 (3) by adding at the end the following new sub13 paragraph:

14 ‘‘(C) in any case in which the Government

15 delays making final payment under the contract

16 for more than one year after the date on which

17 the last item of property is delivered or final

18 performance of the services is completed under

19 the contract, the date on which such last delivery

20 is made or service completed;’’.
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1 Subtitle B—Cost Principles

2 PART I—ARMED SERVICES ACQUISITIONS

3 SEC. 2101. ALLOWABLE CONTRACT COSTS.

4 (a) COMPTROLLER GENERAL EVALUATION.—Sub5 section (l) of section 2324 of title 10, United States Code,

6 is amended to read as follows:

7 ‘‘(l) The Comptroller General shall periodically evalu8 ate the implementation of this section by the Secretary of

9 Defense. Such evaluation shall consider the extent to

10 which—

11 ‘‘(1) the implementation is consistent with con12 gressional intent;

13 ‘‘(2) the implementation achieves the objective of

14 eliminating unallowable costs charged to covered con15 tracts; and

16 ‘‘(3) the implementation (as well as the provi17 sions of this section and the regulations prescribed

18 under this section) could be improved or strength19 ened.’’.

20 (b) COVERED CONTRACT DEFINED.—Subsection (m) of

21 such section is amended to read as follows:

22 ‘‘(m) In this section, the term ‘covered contract’ means

23 a contract for an amount in excess of $500,000 that is en24 tered into by the Department of Defense, except that such

25 term does not include a fixed-price contract without cost
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1 incentives or any contract for the purchase of commercial

2 items (as defined in section 2281 of this title).’’.

3 SEC. 2102. REPEAL OF CONTRACT PROFIT CONTROLS DUR4 ING EMERGENCY PERIODS.

5 (a) REPEAL.—Section 2382 of title 10, United States

6 Code, is repealed.

7 (b) CLERICAL AMENDMENT.—The table of sections at

8 the beginning of chapter 141 of such title is amended by

9 striking out the item relating to section 2382.

10 PART II—CIVILIAN AGENCY ACQUISITIONS

11 SEC. 2151. ALLOWABLE CONTRACT COSTS.

12 Section 306 of the Federal Property and Administra13 tive Services Act of 1949 (41 U.S.C. 256) is amended to

14 read as follows:

15 ‘‘SEC. 306. ALLOWABLE COSTS.

16 ‘‘(a) INDIRECT COST THAT VIOLATES A FAR COST

17 PRINCIPLE.—The head of an executive agency shall require

18 that a covered contract provide that if the contractor sub19 mits to the executive agency a proposal for settlement of

20 indirect costs incurred by the contractor for any period

21 after such costs have been accrued and if that proposal in22 cludes the submission of a cost which is unallowable because

23 the cost violates a cost principle in the Federal Acquisition

24 Regulation (referred to in section 25(c)(1) of the Office of

25 Federal Procurement Policy Act (41 U.S.C. 421(c)(1)) or
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1 an executive agency’s supplement to the Federal Acquisition

2 Regulation, the cost shall be disallowed.

3 ‘‘(b) PENALTY FOR VIOLATION OF COST PRINCIPLE.—

4 (1) If the agency head determines that a cost submitted by

5 a contractor in its proposal for settlement is expressly unal6 lowable under a cost principle referred to in subsection (a)

7 that defines the allowability of specific selected costs, the

8 agency head shall assess a penalty against the contractor

9 in an amount equal to—

10 ‘‘(A) the amount of the disallowed cost allocated

11 to covered contracts for which a proposal for settle12 ment of indirect costs has been submitted; plus

13 ‘‘(B) interest (to be computed based on provi14 sions in the Federal Acquisition Regulation) to com15 pensate the United States for the use of any funds

16 which a contractor has been paid in excess of the

17 amount to which the contractor was entitled.

18 ‘‘(2) If the agency head determines that a proposal for

19 settlement of indirect costs submitted by a contractor in20 cludes a cost determined to be unallowable in the case of

21 such contractor before the submission of such proposal, the

22 agency head shall assess a penalty against the contractor

23 in an amount equal to two times the amount of the dis24 allowed cost allocated to covered contracts for which a pro25 posal for settlement of indirect costs has been submitted.
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1 ‘‘(c) WAIVER OF PENALTY.—The Federal Acquisition

2 Regulation shall provide for a penalty under subsection (b)

3 to be waived in the case of a contractor’s proposal for settle4 ment of indirect costs when—

5 ‘‘(1) the contractor withdraws the proposal before

6 the formal initiation of an audit of the proposal by

7 the Federal Government and resubmits a revised pro8 posal;

9 ‘‘(2) the amount of unallowable costs subject to

10 the penalty is insignificant; or

11 ‘‘(3) the contractor demonstrates, to the contract12 ing officer’s satisfaction, that—

13 ‘‘(A) it has established appropriate policies

14 and personnel training and an internal control

15 and review system that provide assurances that

16 unallowable costs subject to penalties are pre17 cluded from being included in the contractor’s

18 proposal for settlement of indirect costs; and

19 ‘‘(B) the unallowable costs subject to the

20 penalty were inadvertently incorporated into the

21 proposal.

22 ‘‘(d) APPLICABILITY OF CONTRACT DISPUTES PROCE23 DURE TO DISALLOWANCE OF COST AND ASSESSMENT OF

24 PENALTY.—An action of an agency head under subsection

25 (a) or (b)—
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1 ‘‘(1) shall be considered a final decision for the

2 purposes of section 6 of the Contract Disputes Act of

3 1978 (41 U.S.C. 605); and

4 ‘‘(2) is appealable in the manner provided in

5 section 7 of such Act.

6 ‘‘(e) SPECIFIC COSTS NOT ALLOWABLE.—(1) The fol7 lowing costs are not allowable under a covered contract:

8 ‘‘(A) Costs of entertainment, including amuse9 ment, diversion, and social activities, and any costs

10 directly associated with such costs (such as tickets to

11 shows or sports events, meals, lodging, rentals, trans12 portation, and gratuities).

13 ‘‘(B) Costs incurred to influence (directly or in14 directly) legislative action on any matter pending be15 fore Congress or a State legislature.

16 ‘‘(C) Costs incurred in defense of any civil or

17 criminal fraud proceeding or similar proceeding (in18 cluding filing of any false certification) brought by

19 the United States where the contractor is found liable

20 or had pleaded nolo contendere to a charge of fraud

21 or similar proceeding (including filing of a false cer22 tification).

23 ‘‘(D) Payments of fines and penalties resulting

24 from violations of, or failure to comply with, Federal,

25 State, local, or foreign laws and regulations, except
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1 when incurred as a result of compliance with specific

2 terms and conditions of the contract or specific writ3 ten instructions from the contracting officer authoriz4 ing in advance such payments in accordance with ap5 plicable provisions of the Federal Acquisition Regula6 tion.

7 ‘‘(E) Costs of membership in any social, dining,

8 or country club or organization.

9 ‘‘(F) Costs of alcoholic beverages.

10 ‘‘(G) Contributions or donations, regardless of

11 the recipient.

12 ‘‘(H) Costs of advertising designed to promote

13 the contractor or its products.

14 ‘‘(I) Costs of promotional items and memora15 bilia, including models, gifts, and souvenirs.

16 ‘‘(J) Costs for travel by commercial aircraft

17 which exceed the amount of the standard commercial

18 fare.

19 ‘‘(K) Costs incurred in making any payment

20 (commonly known as a ‘golden parachute payment’)

21 which is—

22 ‘‘(i) in an amount in excess of the normal

23 severance pay paid by the contractor to an em24 ployee upon termination of employment; and
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1 ‘‘(ii) is paid to the employee contingent

2 upon, and following, a change in management

3 control over, or ownership of, the contractor or a

4 substantial portion of the contractor’s assets.

5 ‘‘(L) Costs of commercial insurance that protects

6 against the costs of the contractor for correction of the

7 contractor’s own defects in materials or workmanship.

8 ‘‘(M) Costs of severance pay paid by the contrac9 tor to foreign nationals employed by the contractor

10 under a service contract performed outside the United

11 States, to the extent that the amount of severance pay

12 paid in any case exceeds the amount paid in the in13 dustry involved under the customary or prevailing

14 practice for firms in that industry providing similar

15 services in the United States, as determined under the

16 Federal Acquisition Regulation.

17 ‘‘(N) Costs of severance pay paid by the contrac18 tor to a foreign national employed by the contractor

19 under a service contract performed in a foreign coun20 try if the termination of the employment of the for21 eign national is the result of the closing of, or the cur22 tailment of activities at, a United States facility in

23 that country at the request of the government of that

24 country.
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1 ‘‘(O) Costs incurred by a contractor in connec2 tion with any criminal, civil, or administrative pro3 ceeding commenced by the United States or a State,

4 to the extent provided in subsection (k).

5 ‘‘(2)(A) Pursuant to the Federal Acquisition Regula6 tion and subject to the availability of appropriations, the

7 agency head, in awarding a covered contract, may waive

8 the application of the provisions of paragraphs (1)(M) and

9 (1)(N) to that contract if the agency head determines that—

10 ‘‘(i) the application of such provisions to the

11 contract would adversely affect the continuation of a

12 program, project, or activity that provides significant

13 support services for employees of the executive agency

14 posted outside the United States;

15 ‘‘(ii) the contractor has taken (or has established

16 plans to take) appropriate actions within the contrac17 tor’s control to minimize the amount and number of

18 incidents of the payment of severance pay by the con19 tractor to employees under the contract who are for20 eign nationals; and

21 ‘‘(iii) the payment of severance pay is necessary

22 in order to comply with a law that is generally appli23 cable to a significant number of businesses in the

24 country in which the foreign national receiving the

25 payment performed services under the contract or is
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1 necessary to comply with a collective bargaining

2 agreement.

3 ‘‘(B) The head of the executive agency concerned shall

4 include in the solicitation for a covered contract a statement

5 indicating—

6 ‘‘(i) that a waiver has been granted under sub7 paragraph (A) for the contract; or

8 ‘‘(ii) whether the agency head will consider

9 granting such a waiver, and, if the agency head will

10 consider granting a waiver, the criteria to be used in

11 granting the waiver.

12 ‘‘(C) The agency head shall make the final determina13 tion regarding whether to grant a waiver under subpara14 graph (A) with respect to a covered contract before award

15 of the contract.

16 ‘‘(3) The provisions of the Federal Acquisition Regula17 tion implementing this section may establish appropriate

18 definitions, exclusions, limitations, and qualifications.

19 ‘‘(f) REQUIRED REGULATIONS.—(1) The Federal Ac20 quisition Regulation shall contain provisions on the allow21 ability of contractor costs. Such provisions shall define in

22 detail and in specific terms those costs which are unallow23 able, in whole or in part, under covered contracts. The regu24 lations shall, at a minimum, clarify the cost principles ap25 plicable to contractor costs of the following:
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1 ‘‘(A) Air shows.

2 ‘‘(B) Membership in civic, community, and pro3 fessional organizations.

4 ‘‘(C) Recruitment.

5 ‘‘(D) Employee morale and welfare.

6 ‘‘(E) Actions to influence (directly or indirectly)

7 executive branch action on regulatory and contract

8 matters (other than costs incurred in regard to con9 tract proposals pursuant to solicited or unsolicited

10 bids).

11 ‘‘(F) Community relations.

12 ‘‘(G) Dining facilities.

13 ‘‘(H) Professional and consulting services, in14 cluding legal services.

15 ‘‘(I) Compensation.

16 ‘‘(J) Selling and marketing.

17 ‘‘(K) Travel.

18 ‘‘(L) Public relations.

19 ‘‘(M) Hotel and meal expenses.

20 ‘‘(N) Expense of corporate aircraft.

21 ‘‘(O) Company-furnished automobiles.

22 ‘‘(P) Advertising.

23 ‘‘(2) The Federal Acquisition Regulation shall require

24 that a contracting officer not resolve any questioned costs

25 until the contracting officer has obtained—
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1 ‘‘(A) adequate documentation with respect to

2 such costs; and

3 ‘‘(B) the opinion of the executive agency’s con4 tract auditor on the allowability of such costs.

5 ‘‘(3) The Federal Acquisition Regulation shall provide

6 that, to the maximum extent practicable, an executive agen7 cy’s contract auditor be present at any negotiation or meet8 ing with the contractor regarding a determination of the

9 allowability of indirect costs of the contractor.

10 ‘‘(4) The Federal Acquisition Regulation shall require

11 that all categories of costs designated in the report of an

12 executive agency’s contract auditor as questioned with re13 spect to a proposal for settlement be resolved in such a man14 ner that the amount of the individual questioned costs that

15 are paid will be reflected in the settlement.

16 ‘‘(g) APPLICABILITY OF REGULATIONS TO SUB17 CONTRACTORS.—The regulations referred to in subsections

18 (e) and (f)(1) shall require, to the maximum extent prac19 ticable, that such regulations apply to all subcontractors of

20 a covered contract.

21 ‘‘(h) CONTRACTOR CERTIFICATION REQUIRED.—(1) A

22 proposal for settlement of indirect costs applicable to a cov23 ered contract shall include a certification by an official of

24 the contractor that, to the best of the certifying official’s

25 knowledge and belief, all indirect costs included in the pro-
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1 posal are allowable. Any such certification shall be in a

2 form prescribed in the Federal Acquisition Regulation.

3 ‘‘(2) The agency head concerned may, in an excep4 tional case, waive the requirement for certification under

5 paragraph (1) in the case of any contract if the agency

6 head—

7 ‘‘(A) determines in such case that it would be in

8 the interest of the United States to waive such certifi9 cation; and

10 ‘‘(B) states in writing the reasons for that deter11 mination and makes such determination available to

12 the public.

13 ‘‘(i) PENALTIES FOR SUBMISSION OF COST KNOWN AS

14 NOT ALLOWABLE.—The submission to an executive agency

15 of a proposal for settlement of costs for any period after

16 such costs have been accrued that includes a cost that is

17 expressly specified by statute or regulation as being unal18 lowable, with the knowledge that such cost is unallowable,

19 shall be subject to the provisions of section 287 of title 18,

20 United States Code, and section 3729 of title 31, United

21 States Code.

22 ‘‘(j) CONTRACTOR TO HAVE BURDEN OF PROOF.—In

23 a proceeding before a board of contract appeals, the United

24 States Court of Federal Claims, or any other Federal court

25 in which the reasonableness of indirect costs for which a
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1 contractor seeks reimbursement from the United States is

2 in issue, the burden of proof shall be upon the contractor

3 to establish that those costs are reasonable.

4 ‘‘(k) PROCEEDING COSTS NOT ALLOWABLE.—(1) Ex5 cept as otherwise provided in this subsection, costs incurred

6 by a contractor in connection with any criminal, civil, or

7 administrative proceeding commenced by the United States

8 or a State are not allowable as reimbursable costs under

9 a covered contract if the proceeding (A) relates to a viola10 tion of, or failure to comply with, a Federal or State statute

11 or regulation, and (B) results in a disposition described in

12 paragraph (2).

13 ‘‘(2) A disposition referred to in paragraph (1)(B) is

14 any of the following:

15 ‘‘(A) In the case of a criminal proceeding, a con16 viction (including a conviction pursuant to a plea of

17 nolo contendere) by reason of the violation or failure

18 referred to in paragraph (1).

19 ‘‘(B) In the case of a civil or administrative pro20 ceeding involving an allegation of fraud or similar

21 misconduct, a determination of contractor liability on

22 the basis of the violation or failure referred to in

23 paragraph (1).

24 ‘‘(C) In the case of any civil or administrative

25 proceeding, the imposition of a monetary penalty by
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1 reason of the violation or failure referred to in para2 graph (1).

3 ‘‘(D) A final decision—

4 ‘‘(i) to debar or suspend the contractor,

5 ‘‘(ii) to rescind or void the contract, or

6 ‘‘(iii) to terminate the contract for default,

7 by reason of the violation or failure referred to in

8 paragraph (1).

9 ‘‘(E) A disposition of the proceeding by consent

10 or compromise if such action could have resulted in

11 a disposition described in subparagraph (A), (B), (C),

12 or (D).

13 ‘‘(3) In the case of a proceeding referred to in para14 graph (1) that is commenced by the United States and is

15 resolved by consent or compromise pursuant to an agree16 ment entered into by a contractor and the United States,

17 the costs incurred by the contractor in connection with such

18 proceeding that are otherwise not allowable as reimbursable

19 costs under such paragraph may be allowed to the extent

20 specifically provided in such agreement.

21 ‘‘(4) In the case of a proceeding referred to in para22 graph (1) that is commenced by a State, the agency head

23 that awarded the covered contract involved in the proceed24 ing may allow the costs incurred by the contractor in con25 nection with such proceeding as reimbursable costs if the
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1 agency head determines, in accordance with the Federal Ac2 quisition Regulation, that the costs were incurred as a re3 sult of (A) a specific term or condition of the contract, or

4 (B) specific written instructions of the agency.

5 ‘‘(5)(A) Except as provided in subparagraph (C), costs

6 incurred by a contractor in connection with a criminal,

7 civil, or administrative proceeding commenced by the Unit8 ed States or a State in connection with a covered contract

9 may be allowed as reimbursable costs under the contract

10 if such costs are not disallowable under paragraph (1), but

11 only to the extent provided in subparagraph (B).

12 ‘‘(B)(i) The amount of the costs allowable under sub13 paragraph (A) in any case may not exceed the amount

14 equal to 80 percent of the amount of the costs incurred, to

15 the extent that such costs are determined to be otherwise

16 allowable and allocable under the Federal Acquisition Regu17 lation.

18 ‘‘(ii) Regulations issued for the purpose of clause (i)

19 shall provide for appropriate consideration of the complex20 ity of procurement litigation, generally accepted principles

21 governing the award of legal fees in civil actions involving

22 the United States as a party, and such other factors as may

23 be appropriate.

24 ‘‘(C) In the case of a proceeding referred to in subpara25 graph (A), contractor costs otherwise allowable as reimburs-
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1 able costs under this paragraph are not allowable if (i) such

2 proceeding involves the same contractor misconduct alleged

3 as the basis of another criminal, civil, or administrative

4 proceeding, and (ii) the costs of such other proceeding are

5 not allowable under paragraph (1).

6 ‘‘(6) In this subsection:

7 ‘‘(A) The term ‘proceeding’ includes an inves8 tigation.

9 ‘‘(B) The term ‘costs’, with respect to a proceed10 ing—

11 ‘‘(i) means all costs incurred by a contrac12 tor, whether before or after the commencement of

13 any such proceeding; and

14 ‘‘(ii) includes—

15 ‘‘(I) administrative and clerical ex16 penses;

17 ‘‘(II) the cost of legal services, includ18 ing legal services performed by an employee

19 of the contractor;

20 ‘‘(III) the cost of the services of ac21 countants and consultants retained by the

22 contractor; and

23 ‘‘(IV) the pay of directors, officers, and

24 employees of the contractor for time devoted
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1 by such directors, officers, and employees to

2 such proceeding.

3 ‘‘(C) The term ‘penalty’ does not include restitu4 tion, reimbursement, or compensatory damages.

5 ‘‘(l) PERIODIC EVALUATION OF IMPLEMENTATION.—

6 (1) The Comptroller General shall periodically evaluate the

7 implementation of this section by the heads of executive

8 agencies. Such evaluation shall consider the extent to

9 which—

10 ‘‘(A) the implementation is consistent with con11 gressional intent;

12 ‘‘(B) the implementation achieves the objective of

13 eliminating unallowable costs charged to covered con14 tracts; and

15 ‘‘(C) the implementation (as well as the provi16 sions of this section and the regulations prescribed

17 under this section) could be improved or strengthened.

18 ‘‘(2) The Comptroller General shall submit to the Com19 mittees on Governmental Affairs and on Appropriations of

20 the Senate and the Committees on Government Operation

21 and on Appropriations of the House of Representatives a

22 report on such evaluation not later than 180 days after pub23 lication in the Federal Register of revisions to the Federal

24 Acquisition Regulation that make substantive changes in
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1 provisions of the Federal Acquisition Regulation pertaining

2 to allowable costs under covered contracts.

3 ‘‘(m) COVERED CONTRACT DEFINED.—In this section,

4 the term ‘covered contract’ means a contract for an amount

5 in excess of $500,000 that is entered into by an executive

6 agency, except that such term does not include a fixed-price

7 contract without cost incentives or any contract for the pur8 chase of commercial items (as defined in section 315 of this

9 title).’’.

10 PART III—ACQUISITIONS GENERALLY

11 SEC. 2161. TRAVEL EXPENSES OF GOVERNMENT CONTRAC12 TORS.

13 Section 24(a) of the Office of Federal Procurement Pol14 icy Act (41 U.S.C. 420) is amended by inserting after

15 ‘‘Under any contract’’ the following: ‘‘requiring submission

16 of cost or pricing data or the negotiation of final indirect

17 costs’’.

18 Subtitle C—Audit and Access to

19 Records

20 PART I—ARMED SERVICES ACQUISITIONS

21 SEC. 2201. CONSOLIDATION AND REVISION OF AUTHORITY

22 TO EXAMINE RECORDS OF CONTRACTORS.

23 (a) AUTHORITY.—

24 (1) IN GENERAL.—Section 2313 of title 10, Unit25 ed States Code, is amended to read as follows:
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1 ‘‘§ 2313. Examination of records of contractor

2 ‘‘(a) AGENCY AUTHORITY.—The head of an agency,

3 acting through an authorized representative—

4 ‘‘(1) is entitled to inspect the plant and audit

5 the records of—

6 ‘‘(A) a contractor performing a cost-reim7 bursement, incentive, time-and-materials, labor8 hour, or price-redeterminable contract, or any

9 combination of such contracts, made by that

10 agency under this chapter; and

11 ‘‘(B) a subcontractor performing any sub12 contract under such a contract or combination of

13 contracts; and

14 ‘‘(2) shall, for the purpose of evaluating the accu15 racy, completeness, and currency of cost or pricing

16 data required to be submitted pursuant to section

17 2306a of this title with respect to a contract or sub18 contract, have the right to examine all records of the

19 contractor or subcontractor related to—

20 ‘‘(A) the proposal for the contract or sub21 contract;

22 ‘‘(B) the discussions conducted on the pro23 posal;

24 ‘‘(C) pricing of the contract or subcontract;

25 or
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1 ‘‘(D) performance of the contract or sub2 contract.

3 ‘‘(b) SUBPOENA POWER.—(1) The Director of the De4 fense Contract Audit Agency (or any successor agency) may

5 require by subpoena the production of any records of a con6 tractor that the Secretary of Defense is authorized to audit

7 or examine under subsection (a).

8 ‘‘(2) Any such subpoena, in the case of contumacy or

9 refusal to obey, shall be enforceable by order of an appro10 priate United States district court.

11 ‘‘(3) The authority provided by paragraph (1) may not

12 be redelegated.

13 ‘‘(4) The Director (or any successor official) shall sub14 mit an annual report to the Secretary of Defense on the

15 exercise of such authority during the preceding year and

16 the reasons why such authority was exercised in any in17 stance. The Secretary shall forward a copy of each such re18 port to the Committees on Armed Services of the Senate

19 and House of Representatives.

20 ‘‘(c) COMPTROLLER GENERAL AUTHORITY.—(1) Ex21 cept as provided in paragraph (2), each contract awarded

22 after using procedures other than sealed bid procedures shall

23 provide that the Comptroller General and his representa24 tives are entitled to examine any records of the contractor,
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1 or any of its subcontractors, that directly pertain to, and

2 involve transactions relating to, the contract or subcontract.

3 ‘‘(2) Paragraph (1) does not apply to a contract or

4 subcontract with a foreign contractor or foreign subcontrac5 tor if the head of the agency concerned determines, with the

6 concurrence of the Comptroller General or his designee, that

7 the application of that paragraph to the contract or sub8 contract would not be in the public interest. However, the

9 concurrence of the Comptroller General or his designee is

10 not required—

11 ‘‘(A) where the contractor or subcontractor is a

12 foreign government or agency thereof or is precluded

13 by the laws of the country involved from making its

14 records available for examination; and

15 ‘‘(B) where the head of the agency determines,

16 after taking into account the price and availability of

17 the property and services from United States sources,

18 that the public interest would be best served by not

19 applying paragraph (1).

20 ‘‘(d) AUTHORITY TO USE OTHER AGENCY AUDIT FOR

21 PRE-AWARD AUDIT.—In any case in which the head of an

22 agency proposes to examine the records of a contractor or

23 subcontractor related to a proposal for a contract or sub24 contract (as authorized by subsection (a)(2)(A)), the head

25 of the agency may use the results of an audit conducted
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1 by a Federal Government audit agency within the previous

2 year if the contracting officer determines that the objectives

3 of the proposed pre-award audit reasonably can be met by

4 the other audit.

5 ‘‘(e) LIMITATION.—The right of the head of an agency

6 under subsection (a), and the right of the Comptroller Gen7 eral under subsection (c), with respect to a contract or sub8 contract shall expire three years after final payment under

9 such contract or subcontract.

10 ‘‘(f) INAPPLICABILITY TO CERTAIN CONTRACTS.—This

11 section does not apply to the following contracts:

12 ‘‘(1) Contracts for utility services at rates not ex13 ceeding those established to apply uniformly to the

14 public, plus any applicable reasonable connection

15 charge.

16 ‘‘(g) FORMS OF ORIGINAL RECORD STORAGE.—Noth17 ing in this section shall be construed to preclude a contrac18 tor from duplicating or storing original records in elec19 tronic form.

20 ‘‘(h) USE OF IMAGES OF ORIGINAL RECORDS.—The

21 head of an agency shall not require a contractor or sub22 contractor to provide original records in an audit carried

23 out pursuant to this section if the contractor or subcontrac24 tor provides photographic or electronic images of the origi25 nal records and meets the following requirements:
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1 ‘‘(1) The contractor or subcontractor has estab2 lished procedures to ensure that the imaging process

3 preserves the integrity, reliability, and security of the

4 original records.

5 ‘‘(2) The contractor or subcontractor maintains

6 an effective indexing system to permit timely and

7 convenient access to the imaged records.

8 ‘‘(3) The contractor or subcontractor retains the

9 original records for a minimum of one year after im10 aging to permit periodic validation of the imaging

11 systems.

12 ‘‘(i) RECORDS DEFINED.—In this section, the term

13 ‘records’ includes books, documents, accounting procedures

14 and practices, and other data, regardless of type and re15 gardless of whether such items are in written form, in the

16 form of computer data, or in any other form.’’.

17 (2) CLERICAL AMENDMENT.—The item relating

18 to such section in the table of sections at the begin19 ning of chapter 137 of title 10, United States Code,

20 is amended to read as follows:

‘‘2313. Examination of records of contractor.’’.

21 (b) REPEAL OF SUPERSEDED PROVISION.—

22 (1) REPEAL.—Section 2406 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 2406.

3 PART II—CIVILIAN AGENCY ACQUISITIONS

4 SEC. 2251. AUTHORITY TO EXAMINE RECORDS OF CONTRAC5 TORS.

6 (a) AUTHORITY.—Title III of the Federal Property

7 and Administrative Services Act of 1949 (41 U.S.C. 251

8 et seq.), as amended by section 1251(2), is further amended

9 by inserting after section 304B the following new section:

10 ‘‘SEC. 304C. EXAMINATION OF RECORDS OF CONTRACTOR.

11 ‘‘(a) AGENCY AUTHORITY.—The head of an executive

12 agency, acting through an authorized representative—

13 ‘‘(1) is entitled to inspect the plant and audit

14 the records of—

15 ‘‘(A) a contractor performing a cost-reim16 bursement, incentive, time-and-materials, labor17 hour, or price-redeterminable contract, or any

18 combination of such contracts, made by that ex19 ecutive agency under this title; and

20 ‘‘(B) a subcontractor performing any sub21 contract under such a contract or combination of

22 contracts; and

23 ‘‘(2) shall, for the purpose of evaluating the accu24 racy, completeness, and currency of cost or pricing

25 data required to be submitted pursuant to section
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1 304B with respect to a contract or subcontract, have

2 the right to examine all records of the contractor or

3 subcontractor related to—

4 ‘‘(A) the proposal for the contract or sub5 contract;

6 ‘‘(B) the discussions conducted on the pro7 posal;

8 ‘‘(C) pricing of the contract or subcontract;

9 or

10 ‘‘(D) performance of the contract or sub11 contract.

12 ‘‘(b) COMPTROLLER GENERAL AUTHORITY.—(1) Ex13 cept as provided in paragraph (2), each contract awarded

14 after using procedures other than sealed bid procedures shall

15 provide that the Comptroller General and his representa16 tives are entitled to examine any records of the contractor,

17 or any of its subcontractors, that directly pertain to, and

18 involve transactions relating to, the contract or subcontract.

19 ‘‘(2) Paragraph (1) does not apply to a contract or

20 subcontract with a foreign contractor or foreign subcontrac21 tor if the agency head concerned determines, with the con22 currence of the Comptroller General or his designee, that

23 the application of that paragraph to the contract or sub24 contract would not be in the public interest. However, the
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1 concurrence of the Comptroller General or his designee is

2 not required—

3 ‘‘(A) where the contractor or subcontractor is a

4 foreign government or agency thereof or is precluded

5 by the laws of the country involved from making its

6 records available for examination; and

7 ‘‘(B) where the agency head determines, after

8 taking into account the price and availability of the

9 property and services from United States sources, that

10 the public interest would be best served by not apply11 ing paragraph (1).

12 ‘‘(c) AUTHORITY TO USE OTHER AGENCY AUDIT FOR

13 PRE-AWARD AUDIT.—In any case in which the head of an

14 agency proposes to examine the records of a contractor or

15 subcontractor related to a proposal for a contract or sub16 contract (as authorized by subsection (a)(2)(A)), the head

17 of the agency may use the results of an audit conducted

18 by a Federal Government audit agency within the previous

19 year if the contracting officer determines that the objectives

20 of the proposed pre-award audit reasonably can be met by

21 the other audit.

22 ‘‘(d) LIMITATION.—The right of an agency head under

23 subsection (a), and the right of the Comptroller General

24 under subsection (b), with respect to a contract or sub-
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1 contract shall expire three years after final payment under

2 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.—The

14 head of an agency shall not require a contractor or sub15 contractor to provide original records in an audit carried

16 out pursuant to this section if the contractor or subcontrac17 tor provides photographic or electronic images of the origi18 nal 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 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 word in each of

23 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.’’.

21 SEC. 3004. REQUIREMENT FOR INDEPENDENT COST ESTI22 MATES AND MANPOWER ESTIMATES BEFORE

23 DEVELOPMENT OR PRODUCTION.

24 (a) CONTENT AND SUBMISSION OF ESTIMATES.—Sec25 tion 2434 of title 10, United States Code, is amended by
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1 striking out subsection (b) and inserting in lieu thereof the

2 following:

3 ‘‘(b) REGULATIONS.—The Secretary of Defense shall

4 prescribe regulations governing the content and submission

5 of the estimates required by subsection (a). The regulations

6 shall require—

7 ‘‘(1) that the independent estimate of the full

8 life-cycle cost of a program—

9 ‘‘(A) be prepared by an office or other en10 tity that is not directly responsible for carrying

11 out the development or acquisition of the pro12 gram; and

13 ‘‘(B) include all costs of development, pro14 curement, military construction, and operations

15 and support, without regard to funding source or

16 management control; and

17 ‘‘(2) that the manpower estimate include the

18 total personnel required—

19 ‘‘(A) to operate, maintain, and support the

20 program upon full operational deployment; and

21 ‘‘(B) to train personnel to carry out the ac22 tivities referred to in subparagraph (A).’’.

23 (b) TERMINOLOGY CORRECTION AND OTHER AMEND24 MENT.—Subsection (a) of such section is amended—
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1 (1) by striking out ‘‘full-scale engineering devel2 opment’’ and inserting in lieu thereof ‘‘engineering

3 and manufacturing development’’; and

4 (2) by striking out ‘‘cost of the program, together

5 with’’ and inserting in lieu thereof ‘‘full life-cycle cost

6 of the program, and’’.

7 SEC. 3005. BASELINE DESCRIPTION.

8 (a) IN GENERAL.—Section 2435 of title 10, United

9 States Code, is amended to read as follows:

10 ‘‘§ 2435. Baseline description

11 ‘‘(a) BASELINE DESCRIPTION REQUIREMENT.—(1)

12 The Secretary of a military department shall establish a

13 baseline description for each major defense acquisition pro14 gram under the jurisdiction of such Secretary.

15 ‘‘(2) The baseline shall include sufficient parameters

16 to describe the cost estimate (referred to as the ‘Baseline

17 Estimate’ in section 2433 of this title), schedule, and per18 formance of such major defense acquisition program.

19 ‘‘(3) No amount appropriated or otherwise made

20 available to the Department of Defense for carrying out a

21 major defense acquisition program may be obligated with22 out an approved baseline description unless such obligation

23 is specifically approved by the Under Secretary of Defense

24 for Acquisition and Technology.
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1 ‘‘(4) A baseline description for a major defense acquisi2 tion program shall be established—

3 ‘‘(A) before the program enters engineering and

4 manufacturing development; and

5 ‘‘(B) before the program enters production and

6 deployment.

7 ‘‘(b) REGULATIONS.—The Secretary of Defense shall

8 prescribe regulations governing—

9 ‘‘(1) the content of baseline descriptions;

10 ‘‘(2) the submission of reports on deviations of a

11 program from the baseline description by the program

12 manager to the Secretary of the military department

13 concerned and the Under Secretary of Defense for Ac14 quisition and Technology;

15 ‘‘(3) procedures for review of such deviation re16 ports within the Department of Defense; and

17 ‘‘(4) procedures for submission to, and approval

18 by, the Secretary of Defense of revised baseline de19 scriptions.’’.

20 (b) CLERICAL AMENDMENT.—The table of sections at

21 the beginning of chapter 144 of such title is amended by

22 amending the item relating to section 2435 to read as fol23 lows:

‘‘2435. Baseline description.’’.
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1 SEC. 3006. REPEAL OF REQUIREMENT FOR COMPETITIVE

2 PROTOTYPING IN 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 IN 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, a technical stop not in-
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1 volving the enplaning or deplaning of passengers or cargo,

2 or, in the case of an installation within the United States,

3 for other commercial purposes. Notwithstanding any other

4 provision of the law, the Secretary may establish different

5 levels and types of uses for different installations and may

6 provide in contracts under subsection (a) for different levels

7 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 all actions, suits,

13 or claims 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. EXTENSION TO DEPARTMENT OF DEFENSE GEN3 ERALLY OF PROVISION RELATING TO MANU4 FACTURE AT FACTORIES AND ARSENALS.

5 (a) CONSOLIDATION, REVISION, AND EXTENSION TO

6 DEPARTMENT OF DEFENSE OF AUTHORITY.—(1) Sub7 chapter V of chapter 148 of title 10, United States Code,

8 is amended by adding at the end the following new section:

9 ‘‘§ 2542. Factories and arsenals: manufacture at

10 ‘‘(a) The Secretary of Defense or the Secretary of a

11 military department may have supplies needed for the De12 partment of Defense or such military department, as the

13 case may be, made in factories or arsenals owned by the

14 United States.

15 ‘‘(b) The Secretary of Defense or the Secretary of the

16 military department concerned may abolish any United

17 States arsenal that such Secretary considers unnecessary.’’.

18 (2) The table of sections at the beginning of subchapter

19 V of such chapter is amended by adding at the end the fol20 lowing new item:

‘‘2542. Factories and arsenals: manufacture at.’’.

21 (b) REPEAL OF SUPERSEDED AUTHORITY.—

22 (1) ARMY AUTHORITY.—

23 (A) REPEAL.—Section 4532 of title 10,

24 United States Code, is repealed.
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1 (B) CLERICAL AMENDMENT.—The table of

2 sections at the beginning of chapter 433 of such

3 title is amended by striking out the item relating

4 to section 4532.

5 (2) AIR FORCE AUTHORITY.—

6 (A) REPEAL.—Section 9532 of title 10,

7 United States Code, is repealed.

8 (B) CLERICAL AMENDMENT.—The table of

9 sections at the beginning of chapter 933 of such

10 title is amended by striking out the item relating

11 to section 9532.

12 SEC. 3052. CODIFICATION OF ACCOUNTING REQUIREMENT

13 FOR CONTRACTED ADVISORY AND ASSIST14 ANCE SERVICES.

15 (a) FUNDING TO BE IDENTIFIED IN BUDGET.—Sec16 tion 1105 of title 31, United States Code, is amended by

17 adding at the end the following new subsection:

18 ‘‘(g)(1) The Director of the Office of Management and

19 Budget shall establish the funding for consulting services

20 for each department and agency as a separate object class

21 in each budget annually submitted to the Congress under

22 this section.

23 ‘‘(2) In this subsection, consulting services include—

24 ‘‘(A) management and professional support serv25 ices;
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1 ‘‘(B) studies, analyses, and evaluations;

2 ‘‘(C) engineering and technical services (exclud3 ing routine engineering services such as automated

4 data processing and architect and engineering con5 tracts); and

6 ‘‘(D) research and development.’’.

7 (b) REPEAL OF SOURCE LAW.—Section 512 of Public

8 Law 102–394 (106 Stat. 1826) is repealed.

9 (c) REPEAL OF SUPERSEDED PROVISIONS.—

10 (1) DOD SPECIFIC LAW.—Section 2212 of title

11 10, United States Code, is repealed.

12 (2) GOVERNMENT-WIDE LAW.—Section 1114 of

13 title 31, United States Code, is repealed.

14 (3) CLERICAL AMENDMENTS.—The table of sec15 tions at the beginning of chapter 131 of title 10, Unit16 ed States Code, is amended by striking out the item

17 relating to section 2212. The table of sections at the

18 beginning of chapter 11 of title 31, United States

19 Code, is amended by striking out the item relating to

20 section 1114.

21 SEC. 3053. REGULATIONS ON PROCUREMENT, PRODUCTION,

22 WAREHOUSING, AND SUPPLY DISTRIBUTION

23 FUNCTIONS.

24 (a) IN GENERAL.—Section 2202 of title 10, United

25 States Code, is amended to read as follows:
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1 ‘‘§ 2202. Regulations on procurement, production,

2 warehousing, and supply distribution

3 functions

4 ‘‘The Secretary of Defense shall prescribe regulations

5 governing the performance within the Department of De6 fense of the procurement, production, warehousing, and

7 supply distribution functions, and related functions, of the

8 Department of Defense.’’.

9 (b) CLERICAL AMENDMENT.—The table of sections at

10 the beginning of chapter 131 of such title is amended by

11 striking out the item related to section 2202 and inserting

12 in lieu thereof the following:

‘‘2202. Regulations on procurement, production, warehousing, and supply distribution functions.’’.

13 SEC. 3054. REPEAL OF REQUIREMENTS REGARDING PROD14 UCT EVALUATION ACTIVITIES.

15 (a) REPEAL.—Section 2369 of title 10, United States

16 Code, is repealed.

17 (b) CLERICAL AMENDMENT.—The table of sections at

18 the beginning of chapter 139 of such title is amended by

19 striking out the item related to section 2369.
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1 SEC. 3055. 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. 3056. 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 The Office of Federal Procurement Policy Act (41

20 U.S.C. 401 et seq.) is amended by inserting after section

21 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 pro-
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1 vided in subsection (b)) the amount of $25,000, as adjusted

2 pursuant to subsection (c).

3 ‘‘(b) AGENCIES WITH FACNET CAPABILITY.—In the

4 case of an agency for which there is in effect a certification

5 under section 2302b(c) of title 10, United States Code, or

6 section 302B(c) of the Federal Property and Administrative

7 Services Act of 1949 with respect to implementation of a

8 FACNET capability, the simplified acquisition threshold is

9 the amount of $100,000, as adjusted pursuant to subsection

10 (c).

11 ‘‘(c) PERIODIC ADJUSTMENT FOR INFLATION.—The

12 dollar amount in effect under subsection (a) shall be ad13 justed on October 1 of each year divisible by 5 to the equiva14 lent amount in constant fiscal year 1990 dollars (rounded

15 to the nearest $1,000). The dollar amount in effect under

16 subsection (b) shall be adjusted on October 1 of each year

17 divisible by 5 to the equivalent amount in constant fiscal

18 year 1993 dollars (rounded to the nearest $1,000).

19 ‘‘(d) SPECIAL RULE FOR CONTINGENCY OPER20 ATIONS.—In the case of a contract to be awarded and per21 formed, or a purchase to be made, outside the United States

22 in support of a contingency operation (as defined in section

23 101(a)(13) of title 10, United States Code), the amounts

24 in effect under subsections (a) and (b) shall be two times

25 the amounts otherwise applicable.’’.
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1 SEC. 4002. FEDERAL ACQUISITION COMPUTER NETWORK.

2 (a) FEDERAL ACQUISITION COMPUTER NETWORK.—

3 The Office of Federal Procurement Policy Act (41 U.S.C.

4 401 et seq.) is amended by adding after section 28 the fol5 lowing new section:

6 ‘‘SEC. 29. FEDERAL ACQUISITION COMPUTER NETWORK

7 (FACNET).

8 ‘‘(a) IN GENERAL.—(1) The Administrator shall estab9 lish a program for the development and implementation of

10 a Federal acquisition computer network (hereinafter in this

11 section referred to as the ‘FACNET’). The Administrator

12 shall assign a program manager for the FACNET and shall

13 provide for overall direction of policy and leadership in the

14 development, coordination, installation, operation, and

15 completion of implementation of the FACNET by executive

16 agencies.

17 ‘‘(2) In carrying out paragraph (1), the Administrator

18 shall consult with appropriate Federal agencies with appli19 cable technical and functional expertise, including the Na20 tional Institute of Standards and Technology, the General

21 Services Administration, and the Department of Defense.

22 ‘‘(3) The Administrator shall carry out paragraph (1)

23 not later than the date that is 5 years after the date of

24 enactment of the Federal Acquisition Improvement Act of

25 1994.
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1 ‘‘(b) FUNCTIONS OF FACNET.—The FACNET shall

2 have the capacity to carry out the following functions:

3 ‘‘(1) GOVERNMENT FUNCTIONS.—

4 ‘‘(A) Provide widespread public notice of so5 licitations for contract opportunities issued by

6 an executive agency and of orders to be made by

7 the agency.

8 ‘‘(B) Allow responses to solicitations and re9 quests for information to be submitted to the con10 tracting activity through such system.

11 ‘‘(C) Allow public notice of contract awards

12 to be provided through such system.

13 ‘‘(D) In cases in which it is practicable,

14 allow questions regarding solicitations to be an15 swered through such system.

16 ‘‘(E) Allow orders to be made through such

17 system.

18 ‘‘(F) In cases in which it is practicable,

19 make payments to contractors by bank card, elec20 tronic funds transfer, or other automated meth21 ods.

22 ‘‘(G) Archive data relating to each procure23 ment action made using such system.

24 ‘‘(2) USER FUNCTIONS.—Allow private users to

25 electronically—
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1 ‘‘(A) access notice of solicitations for con2 tract opportunities issued by an agency and of

3 orders to be made by the agency;

4 ‘‘(B) selectively access and review solicita5 tions and orders issued by the agency;

6 ‘‘(C) respond to solicitations and notices of

7 orders issued by the agency;

8 ‘‘(D) receive orders from the agency;

9 ‘‘(E) access information on contract awards

10 made by the agency; and

11 ‘‘(F) in cases in which it is practicable, re12 ceive payment by bank card, electronic funds

13 transfer, or other automated means.

14 ‘‘(3) GENERAL FUNCTIONS.—

15 ‘‘(A) Allow the electronic exchange of pro16 curement information between the private sector

17 and the Federal Government.

18 ‘‘(B) Employ nationally and internation19 ally recognized data formats that serve to broad20 en and ease the electronic interchange of data.

21 ‘‘(C) Allow convenient and universal user

22 access through a single point of entry.

23 ‘‘(c) ANNUAL REPORTS TO CONGRESS.—The Adminis24 trator shall evaluate progress by executive agencies in im25 plementing the FACNET under this section. The Adminis-
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1 trator shall submit to the Congress, on the date that is one

2 year after the date of the enactment of the Federal Acquisi3 tion Improvement Act of 1994 and on that date in each

4 of the 5 years thereafter, a report on the overall progress

5 by the executive branch and by each executive agency in

6 implementing this section.’’.

7 (b) TECHNICAL AMENDMENTS.—Section 18 of the Of8 fice of Federal Procurement Policy Act (41 U.S.C. 416) is

9 amended—

10 (1) in subsection (a)(1)(A), by striking out ‘‘no11 tice’’ in the matter following clause (ii) and inserting

12 in lieu thereof ‘‘notice of solicitation’’; and

13 (2) in subsection (d), by striking out ‘‘a notice

14 under subsection (e)’’ in the first sentence and insert15 ing in lieu thereof ‘‘a notice of solicitation under sub16 section (a)’’.

17 SEC. 4003. IMPLEMENTATION IN ARMED SERVICES.

18 (a) ESTABLISHMENT IN TITLE 10.—Chapter 137 of

19 title 10, United States Code, is amended by inserting after

20 section 2302 the following new sections:

21 ‘‘§ 2302a. Simplified acquisition threshold

22 ‘‘(a) SIMPLIFIED ACQUISITION THRESHOLD.—For

23 purposes of acquisitions by agencies named in section 2303

24 of this title, the simplified acquisition threshold is as speci25 fied in section 4A of the Office of Federal Procurement Pol-
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1 icy Act, as in effect on the effective date of section 4001

2 of the Federal Acquisition Improvement Act of 1994.

3 ‘‘§ 2302b. Implementation of FACNET capability

4 ‘‘(a) IMPLEMENTATION OF FACNET CAPABILITY.—(1)

5 The head of each agency named in section 2303 of this title

6 shall implement the Federal acquisition computer network

7 (‘FACNET’) capability required by section 29 of the Office

8 of Federal Procurement Policy Act. In the case of the De9 partment of Defense, the implementation shall be by the

10 Secretary of Defense for the Department of Defense as a

11 whole. For purposes of this section, the term ‘head of an

12 agency’ does not include the Secretaries of the military de13 partments.

14 ‘‘(2) In implementing the FACNET capability pursu15 ant to paragraph (1), the head of an agency shall consult

16 with the Administrator for Federal Procurement Policy.

17 ‘‘(b) DESIGNATION OF AGENCY OFFICIAL.—The Sec18 retary of Defense shall designate the Under Secretary of De19 fense for Acquisition and Technology to have responsibility

20 for implementation of FACNET capability throughout the

21 Department of Defense. The head of each agency named in

22 paragraph (5) or (6) of section 2303 of this title shall des23 ignate a program manager to have responsibility for imple24 mentation of FACNET capability for that agency and oth25 erwise to implement this section.
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1 ‘‘(c) CERTIFICATION OF FACNET CAPABILITY.—(1)

2 When the head of an agency, with the concurrence of the

3 Administrator for Federal Procurement Policy, determines

4 that the agency has implemented an interim FACNET ca5 pability (as defined in subsection (f)), the head of the agen6 cy shall certify to Congress that the agency has implemented

7 an interim FACNET capability.

8 ‘‘(2) When the head of an agency, with the concurrence

9 of the Administrator for Federal Procurement Policy, deter10 mines that the agency has implemented a full FACNET ca11 pability (as defined in subsection (g)), the head of the agen12 cy shall certify to Congress that the agency has implemented

13 a full FACNET capability.

14 ‘‘(3) The head of each agency shall provide for imple15 mentation of both interim FACNET capability and full

16 FACNET capability, with priority on providing convenient

17 and universal user access as required by section 29(b)(3)(C)

18 of the Office of Federal Procurement Policy Act, in that

19 agency as soon as practicable after the date of the enactment

20 of the Federal Acquisition Improvement Act of 1994.

21 ‘‘(d) HIGHER SIMPLIFIED ACQUISITION THRESHOLD

22 WHEN FACNET CAPABILITY CERTIFIED.—A certification

23 to Congress under subsection (c) shall be considered to be

24 a 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) EXEMPTION FROM NOTICE PROVISIONS.—An

7 agency is exempt from the requirements of section 18(a)(1)

8 of the Office of Federal Procurement Policy Act (41 U.S.C.

9 416(a)(1)) if the head of the agency makes the certification

10 described in subsection (c)(1).

11 ‘‘(f) IMPLEMENTATION OF INTERIM FACNET CAPA12 BILITY.—An agency shall be considered to have imple13 mented an interim FACNET capability if (except in the

14 case of contracting activities (or portions thereof) of the

15 agency for which the head of the agency determines that

16 implementation is not cost effective or practicable)—

17 ‘‘(1) with respect to each procurement expected to

18 be in an amount greater than $25,000, the agency has

19 implemented the FACNET functions described in

20 paragraphs (1)(A) and (2)(A) of section 29(b) of the

21 Office of Federal Procurement Policy Act, as in effect

22 on the effective date of section 4002 of the Federal Ac23 quisition Improvement Act of 1994; and

24 ‘‘(2) with respect to each procurement expected to

25 be in an amount greater than $25,000, the agency is-
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1 sues notices of solicitations through a system with

2 those functions for all contracting opportunities other

3 than in cases covered by section 18(c) of the Office of

4 Federal Procurement Policy Act (41 U.S.C. 416(c)).

5 ‘‘(g) IMPLEMENTATION OF FULL FACNET CAPABIL6 ITY.—(1) An agency shall be considered to have imple7 mented a full FACNET capability if (except in the case

8 of contracting activities (or portions thereof) of the agency

9 for which the head of the agency determines that implemen10 tation is not cost effective or practicable) the agency has

11 implemented all of the FACNET functions described in sec12 tion 29(b) of the Office of Federal Procurement Policy Act,

13 as in effect on the effective date of section 4002 of the Fed14 eral Acquisition Improvement Act of 1994.

15 ‘‘(2) For purposes of paragraph (1), an agency may

16 not be considered to have implemented a full FACNET ca17 pability if—

18 ‘‘(A) the head of the agency has determined that

19 implementation of FACNET capability is not cost ef20 fective or practicable in the case of certain contract21 ing activities (or portions thereof) of the agency; and

22 ‘‘(B) the percentage of the procurement actions

23 executed by those contracting activities (or portions

24 thereof) for the preceding fiscal year is greater than
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1 25 percent of the total number of procurement actions

2 executed by the agency for that year.

3 ‘‘(h) CONTRACTING ACTIVITIES ORIGINALLY EX4 CLUDED IN CERTIFICATION.—(1) If the head of an agency,

5 in certifying under subsection (c) that the agency has im6 plemented an interim or a full FACNET capability, deter7 mines that such implementation is not cost effective or prac8 ticable in the case of any contracting activity (or portion

9 thereof) of that agency, then that certification shall not

10 apply under section 4A(b) of the Office of Federal Procure11 ment Policy Act to any procurement action by that con12 tracting activity (or portion thereof).

13 ‘‘(2) If the head of an agency determines that an in14 terim or a full FACNET capability has subsequently been

15 implemented for that contracting activity (or portion there16 of), the head of the agency shall make a certification to the

17 Administrator for Federal Procurement Policy in the same

18 manner as a certification under paragraph (1) or (2) of

19 subsection (c), as applicable, and such certification shall

20 have the same effect with respect to that contracting activity

21 (or portion thereof) as if made under such paragraph of

22 subsection (c).’’.

23 (b) CLERICAL AMENDMENT.—The table of sections at

24 the beginning of chapter 137 of such title is amended by
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1 inserting after the item relating to section 2302 the follow2 ing new items:

‘‘2302a. Simplified acquisition threshold.

‘‘2302b. Implementation of FACNET capability.’’.

3 SEC. 4004. IMPLEMENTATION IN CIVILIAN AGENCIES.

4 Title III of the Federal Property and Administrative

5 Services Act of 1949 is amended by inserting after section

6 302 the following new sections:

7 ‘‘SEC. 302A. SIMPLIFIED ACQUISITION THRESHOLD.

8 ‘‘(a) SIMPLIFIED ACQUISITION THRESHOLD.—For

9 purposes of acquisitions by executive agencies, the sim10 plified acquisition threshold is as specified in section 4A

11 of the Office of Federal Procurement Policy Act, as in effect

12 on the effective date of section 4001 of the Federal Acquisi13 tion Improvement Act of 1994.

14 ‘‘SEC. 302B. IMPLEMENTATION OF FACNET CAPABILITY.

15 ‘‘(a) IMPLEMENTATION OF FACNET CAPABILITY.—(1)

16 The head of each executive agency shall implement the Fed17 eral acquisition computer network (‘FACNET’) capability

18 required by section 29 of the Office of Federal Procurement

19 Policy Act.

20 ‘‘(2) In implementing the FACNET capability pursu21 ant to paragraph (1), the head of an executive agency shall

22 consult with the Administrator for Federal Procurement

23 Policy.
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1 ‘‘(b) DESIGNATION OF AGENCY OFFICIAL.—The head

2 of each executive agency shall designate a program manager

3 to have responsibility for implementation of FACNET ca4 pability for that agency and otherwise to implement this

5 section.

6 ‘‘(c) CERTIFICATION OF FACNET CAPABILITY.—(1)

7 When the head of an executive agency, with the concurrence

8 of the Administrator for Federal Procurement Policy, deter9 mines that the agency has implemented an interim

10 FACNET capability (as defined in subsection (f)), the head

11 of the agency shall certify to Congress that the agency has

12 implemented an interim FACNET capability.

13 ‘‘(2) When the head of an executive agency, with the

14 concurrence of the Administrator for Federal Procurement

15 Policy, determines that the agency has implemented a full

16 FACNET capability (as defined in subsection (g)), the head

17 of the agency shall certify to Congress that the agency has

18 implemented a full FACNET capability.

19 ‘‘(3) The head of each executive agency shall provide

20 for implementation of both interim FACNET capability

21 and full FACNET capability, with priority on providing

22 convenient and universal user access as required by section

23 29(b)(3)(C) of the Office of Federal Procurement Policy Act,

24 in that agency as soon as practicable after the date of the
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1 enactment of the Federal Acquisition Improvement Act of

2 1994.

3 ‘‘(d) HIGHER SIMPLIFIED ACQUISITION THRESHOLD

4 WHEN FACNET CAPABILITY CERTIFIED.—A certification

5 to Congress under subsection (c) shall be considered to be

6 a certification for purposes of the higher simplified acquisi7 tion threshold under section 4A(b) of the Office of Federal

8 Procurement Policy Act, except that a certification under

9 paragraph (1) of subsection (c) shall not constitute such a

10 certification in the case of solicitations issued after the end

11 of the five-year period beginning on the date of the enact12 ment of the Federal Acquisition Improvement Act of 1994.

13 ‘‘(e) EXEMPTION FROM NOTICE PROVISIONS.—An ex14 ecutive agency is exempt from the requirements of section

15 18(a)(1) of the Office of Federal Procurement Policy Act

16 (41 U.S.C. 416(a)(1)) if the head of the agency makes the

17 certification described in subsection (c)(1).

18 ‘‘(f) IMPLEMENTATION OF INTERIM FACNET CAPA19 BILITY.—An executive agency shall be considered to have

20 implemented an interim FACNET capability if (except in

21 the case of contracting activities (or portions thereof) of the

22 agency for which the head of the agency determines that

23 implementation is not cost effective or practicable)—

24 ‘‘(1) with respect to each procurement expected to

25 be in an amount greater than $25,000, the executive
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1 agency has implemented the FACNET functions de2 scribed in paragraphs (1)(A) and (2)(A) of section

3 29(b) of the Office of Federal Procurement Policy Act,

4 as in effect on the effective date of section 4002 of the

5 Federal Acquisition Improvement Act of 1994; and

6 ‘‘(2) with respect to each procurement expected to

7 be in an amount greater than $25,000, the executive

8 agency issues notices of solicitations through a system

9 with those functions for all contracting opportunities

10 other than in cases covered by section 18(c) of the Of11 fice of Federal Procurement Policy Act (41 U.S.C.

12 416(c)).

13 ‘‘(g) IMPLEMENTATION OF FULL FACNET CAPABIL14 ITY.—(1) An executive agency shall be considered to have

15 implemented a full FACNET capability if (except in the

16 case of contracting activities (or portions thereof) of the

17 agency for which the head of the agency determines that

18 implementation is not cost effective or practicable) the exec19 utive agency has implemented all of the FACNET functions

20 described in section 29(b) of the Office of Federal Procure21 ment Policy Act, as in effect on the effective date of section

22 4002 of the Federal Acquisition Improvement Act of 1994.

23 ‘‘(2) For purposes of paragraph (1), an executive agen24 cy may not be considered to have implemented a full

25 FACNET capability if—
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1 ‘‘(A) the head of the agency has determined that

2 implementation of FACNET capability is not cost ef3 fective or practicable in the case of certain contract4 ing activities (or portions thereof) of the agency; and

5 ‘‘(B) the percentage of the procurement actions

6 executed by those contracting activities (or portions

7 thereof) for the preceding fiscal year is greater than

8 25 percent of the total number of procurement actions

9 executed by the agency for that year.

10 ‘‘(h) CONTRACTING ACTIVITIES ORIGINALLY EX11 CLUDED IN CERTIFICATION.—(1) If the head of an executive

12 agency, in certifying under subsection (c) that the agency

13 has implemented an interim or a full FACNET capability,

14 determines that such implementation is not cost effective

15 or practicable in the case of any contracting activity (or

16 portion thereof) of that agency, then that certification shall

17 not apply under section 4A(b) of the Office of Federal Pro18 curement Policy Act to any procurement action by that con19 tracting activity (or portion thereof).

20 ‘‘(2) If the head of an executive agency determines that

21 an interim or a full FACNET capability has subsequently

22 been implemented for that contracting activity (or portion

23 thereof), the head of the agency shall make a certification

24 to Administrator for Federal Procurement Policy in the

25 same manner as a certification under paragraph (1) or (2)
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1 of subsection (c), as applicable, and such certification shall

2 have the same effect with respect to that contracting activity

3 (or portion thereof) as if made under such paragraph of

4 subsection (c).’’.

5 PART II—SIMPLIFICATION OF PROCEDURES

6 SEC. 4011. SMALL BUSINESS PROVISIONS.

7 (a) INTERIM REPORTING RULE.—Notwithstanding

8 section 4A of the Office of Federal Procurement Policy Act,

9 as added by section 4001, during the 5-year period begin10 ning on the date of the issuance in final form of revisions

11 to the Federal Acquisition Regulation under section 4B of

12 the Office of Federal Procurement Policy Act, as added by

13 section 4012, contracting activities shall continue to report,

14 pursuant to section 19(d) of the Office of Federal Procure15 ment Policy Act (41 U.S.C. 417(d)), procurement awards

16 with a dollar value of at least $25,000, but less than

17 $100,000, in conformity with the procedures for the report18 ing of a contract award in excess of $25,000 in effect on

19 November 18, 1993.

20 (b) FUNCTIONS OF ADMINISTRATOR FOR FEDERAL

21 PROCUREMENT POLICY.—Section 6(d) of the Office of Fed22 eral Procurement Policy Act (41 U.S.C. 405(d)) is amend23 ed—

24 (1) in paragraph (7), by striking out ‘‘and’’

25 after the semicolon at the end; and
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1 (2) by redesignating paragraph (8) as para2 graph (10) and inserting after paragraph (7) the fol3 lowing:

4 ‘‘(8) developing policies, in consultation with the

5 Administrator of the Small Business Administration,

6 that ensure that small businesses and small businesses

7 owned and controlled by socially and economically

8 disadvantaged persons are provided with the maxi9 mum practicable opportunities to participate in pro10 curements that are conducted for amounts below the

11 simplified acquisition threshold;

12 ‘‘(9) developing policies that will promote

13 achievement of goals for participation by small busi14 nesses and small businesses owned and controlled by

15 socially and economically disadvantaged individ16 uals;’’.

17 SEC. 4012. PROCEDURES FOR PURCHASES BELOW MICRO18 PURCHASE THRESHOLD.

19 The Office of Federal Procurement Policy Act (41

20 U.S.C. 401 et seq.) is amended by inserting after section

21 4A, as added by section 4001, the following new section:

22 ‘‘SEC. 4B. PROCEDURES APPLICABLE TO PURCHASES

23 BELOW MICRO-PURCHASE THRESHOLD.

24 ‘‘(a) REQUIREMENTS.—(1) The head of each executive

25 agency shall ensure that contracting activities of that agen-
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1 cy, in awarding a contract with a price exceeding the

2 micro-purchase threshold, comply with the requirements of

3 section 8(a) of the Small Business Act (15 U.S.C. 637(a))

4 and section 2323 of title 10, United States Code, or section

5 316 of the Federal Property and Administrative Services

6 Act of 1949, as applicable to that agency.

7 ‘‘(2) The authority under part 13.106(a)(1) of the Fed8 eral Acquisition Regulation (48 C.F.R. 13.106(a)(1)), as in

9 effect on November 18, 1993, to make purchases without se10 curing competitive quotations does not apply to any pur11 chases with a price exceeding the micro-purchase threshold.

12 ‘‘(3) The head of each executive agency shall ensure

13 that contracting activities of that agency comply with the

14 requirements of section 15(j) of the Small Business Act (15

15 U.S.C. 644(j)), relating to the small business reserve.

16 ‘‘(b) EXCLUSIONS 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) CERTAIN CONTRACTING OFFICIALS NOT TO BE

22 CONSIDERED PROCUREMENT OFFICIALS.—Any civilian of23 ficer or employee, and any member of the Armed Forces,

24 who has authority to enter into contracts but whose con25 tracting authority is limited to the amount of the micro-
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1 purchase threshold or less is not a procurement official as

2 defined in paragraph (3)(A) of section 27(p) of the Office

3 of Federal Procurement Policy Act (41 U.S.C. 423(p)).

4 ‘‘(d) IMPLEMENTATION THROUGH FAR.—The provi5 sions of subsections (a), (b), and (c) shall be implemented

6 through the Federal Acquisition Regulation.

7 ‘‘(e) MICRO-PURCHASE THRESHOLD DEFINED.—For

8 purposes of this subsection, the micro-purchase threshold is

9 the amount of $2,500, adjusted on October 1 of each year

10 divisible by 5 to the equivalent amount in constant fiscal

11 year 1993 dollars (rounded to the nearest $100).’’.

12 SEC. 4013. PROCUREMENT NOTICE.

13 (a) CONTINUATION OF EXISTING NOTICE THRESH14 OLDS.—Subsection (a) of section 18 of the Office of Federal

15 Procurement Policy Act (41 U.S.C. 416) is amended as fol16 lows:

17 (1) Paragraph (1) is amended—

18 (A) by striking out ‘‘the small purchase

19 threshold’’ each place it appears and inserting in

20 lieu thereof ‘‘the simplified acquisition thresh21 old’’;

22 (B) by striking out ‘‘(c)—’’ in the matter

23 preceding subparagraph (A) and inserting in

24 lieu thereof ‘‘(c):’’;
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1 (C) by striking out ‘‘an executive’’ at the be2 ginning of subparagraphs (A) and (C) and in3 serting in lieu thereof ‘‘An executive’’;

4 (D) by striking out the semicolon at the end

5 of subparagraph (A) and inserting in lieu thereof

6 a period; and

7 (E) by amending subparagraph (B) to read

8 as follows:

9 ‘‘(B) An executive agency intending to solicit

10 bids or proposals for a contract for property or serv11 ices for a price expected to exceed $10,000 but not to

12 exceed the simplified acquisition threshold shall post

13 a notice of solicitation described in subsection (b).

14 The notice shall be posted at the contracting office is15 suing the solicitation or shall be made available

16 through an electronic system with a FACNET capa17 bility that at least meets the requirements of para18 graphs (1)(A) and (2)(A) of section 29(b). The notice

19 shall be posted for a period of not less than 10 days,

20 except that in the case of a posting made through an

21 electronic system with such a FACNET capability,

22 the posting may be for a period of less than 10 days

23 as prescribed in the Federal Acquisition Regulation.’’.

24 (2) Paragraph (3)(B) is amended by inserting

25 after ‘‘(B)’’ the following: ‘‘in the case of a contract
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1 or order for an amount expected to exceed the sim2 plified acquisition threshold,’’.

3 (b) OPPORTUNITY FOR ALL RESPONSIBLE POTENTIAL

4 OFFERORS.—Such subsection is further amended by adding

5 at the end the following:

6 ‘‘(4) An executive agency intending to solicit offers for

7 a contract for which a notice of solicitation is required to

8 be posted under paragraph (1)(B) shall ensure that all po9 tential offerors are permitted to respond to the solicitation

10 for the contract within the period of time specified in the

11 solicitation for the submission of offers.’’.

12 (c) ESTABLISHMENT OF DEADLINE FOR SUBMISSION

13 OF OFFERS.—Such subsection is further amended by insert14 ing after paragraph (4), as added by subsection (b), the fol15 lowing new paragraph:

16 ‘‘(5) An executive agency shall establish a deadline for

17 the submission of all bids or proposals in response to a no18 tice of solicitation with respect to which no such deadline

19 is provided by statute.’’.

20 (d) EXCEPTIONS.—Subsection (c) of such section is

21 amended by adding at the end the following new paragraph:

22 ‘‘(4)(A) The requirements of subsection (a)(1) shall not

23 apply in the case of an acquisition accomplished through

24 the use of an electronic system with a FACNET capability,

25 as described in section 29 and certified under section 2302a
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1 of title 10, United States Code, or section 302A of the Fed2 eral Property and Administrative Services Act of 1949.

3 ‘‘(B) The Federal Acquisition Regulation shall provide

4 for minimum periods of time for submission of offers for

5 acquisitions described in subparagraph (A). Such periods

6 shall provide offerors a reasonable opportunity to respond.

7 ‘‘(C) A notice of solicitation of bids or proposals for

8 an acquisition described in subparagraph (A) shall include

9 the matter described in under subsection (b).’’.

10 SEC. 4014. GAO TEST AND REPORT ON PERFORMANCE OF

11 SIMPLIFIED ACQUISITION THRESHOLD.

12 (a) PERFORMANCE TEST.—The Comptroller General of

13 the United States shall collect data and assess the effects

14 of the simplified acquisition threshold, as established in sec15 tion 4A of the Office of Federal Procurement Policy Act,

16 on the participation of small business concerns (including

17 small business concerns owned and controlled by socially

18 and economically disadvantaged individuals) in procure19 ment awards of less than $100,000 and the benefits and

20 detriments, if any, to the buying activities of the various

21 Executive agencies.

22 (b) DATA TO BE COLLECTED.—Data collected under

23 subsection (a) shall include data regarding whether the es24 tablishment of the simplified acquisition threshold has im25 proved the acquisition process in terms of reduced paper-
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1 work, financial or other savings to the Federal Government,

2 and any increase in the number of contractors participat3 ing in the contracting process.

4 (c) PERIOD.—Data shall be collected for purposes of

5 subsection (a) during the period beginning with the first

6 full fiscal year quarter after the effective date of the amend7 ments made by section 4001 and ending on September 30,

8 1997.

9 (d) REPORT.—By March 1, 1998, the Comptroller

10 General shall submit to Congress a report on the effects of

11 the establishment of the simplified acquisition threshold by

12 the amendments made by section 4001.

13 PART III—INAPPLICABILITY OF LAWS TO ACQUI14 SITIONS NOT IN EXCESS OF SIMPLIFIED AC15 QUISITION THRESHOLD

16 Subpart A—Generally

17 SEC. 4021. INAPPLICABILITY OF FUTURE ENACTED PRO18 CUREMENT LAWS TO CONTRACTS NOT EX19 CEEDING THE SIMPLIFIED ACQUISITION

20 THRESHOLD.

21 (a) ARMED SERVICES.—Section 2302a of title 10,

22 United States Code, as added by section 4003(a), is amend23 ed by adding at the end the following new subsection:

24 ‘‘(b) CONSTRUCTION WITH FUTURE ENACTMENTS.—A

25 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 agency named in section 2303 of this title for

4 an amount not in excess of the simplified acquisition

5 threshold unless that provision of law specifically refers to

6 this section and specifically states that such provision of

7 law modifies or supersedes this section.’’.

8 (b) AGENCIES.—Section 302A of the Federal Property

9 and Administrative Services Act of 1949, as added by sec10 tion 4004(a), is amended by adding at the end the following

11 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 executive agency for an amount not in excess

17 of the simplified acquisition threshold unless that provision

18 of law specifically refers to this section and specifically

19 states that such provision of law modifies or supersedes this

20 section.’’.
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1 Subpart B—Armed Services Acquisitions

2 SEC. 4031. INAPPLICABILITY OF CERTAIN PROVISIONS OF

3 LAW.

4 Section 2302a of title 10, United States Code, as

5 amended by section 4021, is further amended by adding at

6 the end the following new subsection:

7 ‘‘(c) INAPPLICABILITY OF CERTAIN PROVISIONS OF

8 LAW.—The following provisions of law (and regulations

9 prescribed under such provisions) shall not apply to any

10 contract entered into by the Department of Defense in an

11 amount not greater than the simplified acquisition thresh12 old:

13 ‘‘(1) Section 2306(b) of this title (relating to pro14 hibition on contingent fees).

15 ‘‘(2) Section 2313 of this title (relating to exam16 ination of books and records of contractor).

17 ‘‘(3) Section 2384(b) of this title (relating to re18 quirement to identify suppliers and sources of sup19 plies).

20 ‘‘(4) Section 2393(d) of this title (relating to

21 prohibition against doing business with certain

22 offerors of contractors).

23 ‘‘(5) Section 2402 of this title (relating to prohi24 bition on limitation of subcontractor direct sales).
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1 ‘‘(6) Section 2408(a) of this title (relating to

2 prohibition on persons convicted of defense-contract

3 related felonies).

4 ‘‘(7) Section 2410b of this title (relating to con5 tractor inventory accounting system standards).

6 ‘‘(8) Section 2534 of this title (relating to mis7 cellaneous limitations on procurement of goods other

8 than American goods).

9 ‘‘(9) Section 27(e) of the Office of Federal Pro10 curement Policy Act (41 U.S.C. 423(e)).

11 ‘‘(10) The Drug-Free Workplace Act of 1988

12 (subtitle D of title V of Public Law 100–690; 41

13 U.S.C. 701 et seq.).’’.

14 SEC. 4032. CONFORMING AMENDMENTS RELATING TO INAP15 PLICABILITY OF CERTAIN PROVISIONS OF

16 LAW.

17 (a) INAPPLICABILITY OF REQUIREMENT FOR CON18 TRACT CLAUSE REGARDING CONTINGENT FEES.—Section

19 2306(b) of title 10, United States Code, is amended by add20 ing at the end the following: ‘‘This subsection does not apply

21 to a contract that is for an amount not in excess of the

22 simplified acquisition threshold.’’.

23 (b) INAPPLICABILITY OF AUTHORITY TO EXAMINE

24 BOOKS AND RECORDS OF CONTRACTORS.—Section 2313 of

25 title 10, United States Code, as amended by section 2201,
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1 is further amended by adding at the end of subsection (f)

2 the following:

3 ‘‘(2) A contract that is for an amount not in ex4 cess of the simplified acquisition threshold.’’.

5 (c) INAPPLICABILITY OF REQUIREMENT TO IDENTIFY

6 SUPPLIERS AND SOURCES OF SUPPLIES.—Section 2384(b)

7 of title 10, United States Code, is amended by adding at

8 the end the following new paragraph:

9 ‘‘(3) The regulations prescribed pursuant to paragraph

10 (1) do not apply to a contract for an amount that does

11 not exceed the simplified acquisition threshold.’’.

12 (d) INAPPLICABILITY OF PROHIBITION AGAINST DOING

13 BUSINESS WITH CERTAIN OFFERORS OR CONTRACTORS.—

14 Section 2393(d) of title 10, United States Code, is amended

15 in the second sentence by striking out ‘‘above’’ and all that

16 follows and inserting in lieu thereof ‘‘in excess of the sim17 plified acquisition threshold.’’.

18 (e) INAPPLICABILITY OF PROHIBITION ON LIMITING

19 SUBCONTRACTOR DIRECT SALES TO THE UNITED

20 STATES.—Section 2402 of title 10, United States Code, is

21 amended by adding at the end the following new subsection:

22 ‘‘(c) This section does not apply to a contract that is

23 for an amount not in excess of the simplified acquisition

24 threshold.’’.
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1 (f) INAPPLICABILITY OF PROHIBITION ON PERSONS

2 CONVICTED OF DEFENSE-RELATED FELONIES.—Section

3 2408(a) of title 10, United States Code, is amended by add4 ing at the end the following new paragraph:

5 ‘‘(4) In this subsection, the term ‘defense contract’

6 means a contract in an amount in excess of the simplified

7 acquisition threshold.’’.

8 (g) INAPPLICABILITY OF CONTRACTOR INVENTORY AC9 COUNTING SYSTEM STANDARDS.—Section 2410b of title 10,

10 United States Code, is amended—

11 (1) by inserting ‘‘(a)’’ before ‘‘The Secretary’’;

12 and

13 (2) by adding at the end the following:

14 ‘‘(b) The regulations prescribed pursuant to subsection

15 (a) shall not apply to a contract that is for an amount

16 not in excess of the simplified acquisition threshold.’’.

17 (h) INAPPLICABILITY OF MISCELLANEOUS PROCURE18 MENT LIMITATIONS.—Section 2534 of title 10, United

19 States Code, is amended by adding at the end the following:

20 ‘‘(g) INAPPLICABILITY TO CONTRACTS UNDER SIM21 PLIFIED ACQUISITION THRESHOLD.—This section does not

22 apply to a contract for an amount that does not exceed the

23 simplified acquisition threshold.’’.
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1 Subpart C—Civilian Agency Acquisitions

2 SEC. 4041. INAPPLICABILITY OF CERTAIN PROVISIONS OF

3 LAW.

4 Section 302A of the Federal Property and Administra5 tive Services Act of 1949, as amended by section 4021(b),

6 is further amended by adding at the end the following new

7 subsection:

8 ‘‘(c) INAPPLICABILITY OF CERTAIN PROVISIONS OF

9 LAW.—The following provisions of law (and regulations

10 prescribed under such provisions) shall not apply to any

11 contract entered into by an executive agency in an amount

12 not greater than the simplified acquisition threshold:

13 ‘‘(1) Sections 303G, 304(a), and 304C of this

14 Act.

15 ‘‘(2) Section 27(e) of the Office of Federal Pro16 curement Policy Act (41 U.S.C. 423(e)).

17 ‘‘(3) The Drug-Free Workplace Act of 1988 (sub18 title D of title V of Public Law 100–690; 41 U.S.C.

19 701 et seq.).’’.

20 SEC. 4042. CONFORMING AMENDMENTS RELATING TO INAP21 PLICABILITY OF CERTAIN PROVISIONS OF

22 LAW.

23 (a) INAPPLICABILITY OF PROHIBITION ON LIMITING

24 SUBCONTRACTOR DIRECT SALES TO THE UNITED

25 STATES.—Section 303G of the Federal Property and Ad-
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1 ministrative Services Act of 1949 (41 U.S.C. 253g) is

2 amended by adding at the end the following new subsection:

3 ‘‘(c) This section does not apply to a contract for an

4 amount that is not in excess of the simplified acquisition

5 threshold.’’.

6 (b) INAPPLICABILITY OF REQUIREMENT FOR CON7 TRACT CLAUSE REGARDING CONTINGENT FEES.—Section

8 304(a) of the Federal Property and Administrative Services

9 Act of 1949 (41 U.S.C. 254(a)) is amended by adding at

10 the end the following: ‘‘The preceding sentence does not

11 apply to a contract for an amount that is not in excess

12 of the simplified acquisition threshold.’’.

13 (c) INAPPLICABILITY OF AUTHORITY TO EXAMINE

14 BOOKS AND RECORDS OF CONTRACTORS.—Section 304C of

15 the Federal Property and Administrative Services Act of

16 1949, as added by section 2251(a), is amended by adding

17 at the end of subsection (e) the following:

18 ‘‘(2) A contract that is for an amount not in ex19 cess of the simplified acquisition threshold.’’.

20 Subpart D—Acquisitions Generally

21 SEC. 4051. CONFORMANCE OF CERTAIN PROCUREMENT IN22 TEGRITY REQUIREMENTS.

23 Subsection (e)(7)(A) of section 27 of the Office of Fed24 eral Procurement Policy Act (41 U.S.C. 423) is amended
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1 by inserting after ‘‘$100,000’’ the following: ‘‘or the sim2 plified acquisition threshold, whichever is greater’’.

3 SEC. 4052. INAPPLICABILITY OF THE DRUG-FREE WORK4 PLACE ACT OF 1988.

5 Section 5152(a)(1) of the Drug-Free Workplace Act of

6 1988 (subtitle D of title V of the Anti-Drug Abuse Act of

7 1988; Public Law 100–690; 41 U.S.C. 701(a)(1)) is amend8 ed by striking out ‘‘of $25,000 or more from any Federal

9 agency’’ and inserting in lieu thereof ‘‘in excess of the sim10 plified acquisition threshold (as defined in section 4A of

11 such Act) by any Federal agency’’.

12 PART IV—CONFORMING AMENDMENTS

13 SEC. 4071. ARMED SERVICES ACQUISITIONS.

14 (a) SIMPLIFIED ACQUISITION PROCEDURES.—Section

15 2304(g) of title 10, United States Code, is amended—

16 (1) in paragraph (1), by striking out ‘‘small

17 purchases of property and services’’ and inserting in

18 lieu thereof ‘‘purchases of property and services for

19 amounts not in excess of the simplified acquisition

20 threshold’’;

21 (2) by striking out paragraph (2);

22 (3) by redesignating paragraphs (3) and (4) as

23 paragraphs (2) and (3), respectively;

24 (4) in paragraph (2), as so redesignated—
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1 (A) by striking out ‘‘small purchase thresh2 old’’ and inserting in lieu thereof ‘‘simplified ac3 quisition threshold’’; and

4 (B) by striking out ‘‘small purchase proce5 dures’’ and inserting in lieu thereof ‘‘simplified

6 procedures’’; and

7 (5) in paragraph (3), as so redesignated, by

8 striking out ‘‘small purchase procedures’’ and insert9 ing in lieu thereof ‘‘simplified procedures’’.

10 (b) SOLICITATION CONTENT REQUIREMENT.—Section

11 2305(a)(2) of such title is amended by striking out ‘‘small

12 purchases)’’ in the matter preceding subparagraph (A) and

13 inserting in lieu thereof ‘‘a purchase for an amount not in

14 excess of the simplified acquisition threshold)’’.

15 (c) COST TYPE CONTRACTS.—Section 2306(e)(2)(A) of

16 such title is amended by striking out ‘‘small purchase

17 threshold’’ and inserting in lieu thereof ‘‘simplified acquisi18 tion threshold’’.

19 SEC. 4072. CIVILIAN AGENCY ACQUISITIONS.

20 (a) SIMPLIFIED ACQUISITION PROCEDURES.—Section

21 303(g) of the Federal Property and Administrative Services

22 Act of 1949 (41 U.S.C. 253(g)) is amended—

23 (1) in paragraph (1), by striking out ‘‘small

24 purchases of property and services’’ and inserting in

25 lieu thereof ‘‘purchases of property and services for
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1 amounts not in excess of the simplified acquisition

2 threshold’’;

3 (2) by striking out paragraph (2);

4 (3) by redesignating paragraphs (3) and (4) as

5 paragraphs (2) and (3), respectively;

6 (4) in paragraph (2), as so redesignated—

7 (A) by striking out ‘‘small purchase thresh8 old’’ and inserting in lieu thereof ‘‘simplified ac9 quisition threshold’’; and

10 (B) by striking out ‘‘small purchase proce11 dures’’ and inserting in lieu thereof ‘‘simplified

12 procedures’’;

13 (5) in paragraph (3), as so redesignated, by

14 striking out ‘‘small purchase procedures’’ and insert15 ing in lieu thereof ‘‘the simplified procedures’’; and

16 (6) by striking out paragraph (5) and inserting

17 in lieu thereof the following:

18 ‘‘(4) In this subsection, the term ‘simplified acquisition

19 threshold’ has the meaning given such term in section 4A

20 of the Office of Federal Procurement Policy Act.’’.

21 (b) SOLICITATION CONTENT REQUIREMENT.—Section

22 303A(b) of such Act (41 U.S.C. 253a(b)) is amended by

23 striking out ‘‘small purchases)’’ in the matter preceding

24 paragraph (1) and inserting in lieu thereof ‘‘a purchase for
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1 an amount not in excess of the simplified acquisition

2 threshold)’’.

3 (c) COST TYPE CONTRACTS.—Section 304(b) of such

4 Act (41 U.S.C. 254(b)) is amended in the third sentence

5 by striking out ‘‘either $25,000’’ and inserting in lieu there6 of ‘‘either the simplified acquisition threshold’’.

7 SEC. 4073. OFFICE OF FEDERAL PROCUREMENT POLICY

8 ACT.

9 Section 19(a) of the Office of Federal Procurement Pol10 icy Act (41 U.S.C. 417(a)) is amended by striking out ‘‘pro11 curements, other than small purchases,’’ and inserting in

12 lieu thereof ‘‘procurements for amounts in excess of the sim13 plified acquisition threshold’’.

14 PART V—REVISION OF REGULATIONS

15 SEC. 4081. REVISION REQUIRED.

16 (a) FEDERAL ACQUISITION REGULATION.—(1) Not

17 later than one year after the date of the enactment of this

18 Act, the Federal Acquisition Regulatory Council established

19 by section 25(a) of the Office of Federal Procurement Policy

20 Act (41 U.S.C. 421(a)) shall—

21 (A) review the Federal Acquisition Regulation to

22 identify regulations that are applicable to acquisi23 tions in excess of a specified amount that is less than

24 $100,000; and
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1 (B) amend the regulations so identified as nec2 essary to provide that such regulations do not apply

3 to acquisitions that are not in excess of the simplified

4 acquisition threshold.

5 (2) Paragraph (1) does not apply in the case of a regu6 lation for which such an amendment would not be in the

7 national interest, as determined by the Council.

8 (b) SUPPLEMENTAL REGULATIONS.—Not later than 90

9 days after the date on which the review required by sub10 section (a) is completed, the head of each Federal agency

11 that has issued regulations, policies, or procedures referred

12 to in section 25(c)(2) of the Office of Federal Procurement

13 Policy Act (41 U.S.C. 421(c)(2)) shall—

14 (1) identify any such regulation, policy, or pro15 cedure that is applicable to acquisitions in excess of

16 a specified amount that is less than $100,000; and

17 (2) pursuant to section 22 of such Act (41 U.S.C.

18 418b), publish amendments to the regulations so iden19 tified as necessary to provide that such regulations,

20 policies, and procedures do not apply to acquisitions

21 that are not in excess of the simplified acquisition

22 threshold.

23 (c) DEFINITIONS.—In this section:

24 (1) The term ‘‘simplified acquisition threshold’’

25 has the meaning given such term in section 4A of the
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1 Office of Federal Procurement Policy Act, as added by

2 section 4001.

3 (2) The term ‘‘Federal agency’’ has the meaning

4 given such term in section 3(b) of the Federal Prop5 erty and Administrative Services Act of 1949 (41

6 U.S.C. 472(b)).

7 Subtitle B—Socioeconomic and

8 Small Business Laws

9 SEC. 4101. PAYMENT PROTECTIONS FOR SUBCONTRACTORS

10 AND SUPPLIERS.

11 (a) REGULATIONS.—

12 (1) IN GENERAL.—The Administrator for Fed13 eral Procurement Policy shall prescribe in regulations

14 the requirements described in paragraph (2).

15 (2) PROCEDURES RELATING TO COMPLIANCE

16 WITH PAYMENT TERMS.—(A) Under procedures estab17 lished in the regulations, upon the assertion by a sub18 contractor or supplier of a contractor performing a

19 Government contract that the subcontractor or sup20 plier has not been paid by the prime contractor in ac21 cordance with the payment terms of the subcontract,

22 purchase order, or other agreement with the prime

23 contractor, the contracting officer may determine the

24 following:
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1 (i) With respect to a construction contract,

2 whether the contractor has made progress pay3 ments to the subcontractor or supplier in compli4 ance with chapter 39 of title 31, United States

5 Code.

6 (ii) With respect to a contract other than a

7 construction contract, whether the contractor has

8 made progress or other payments to the sub9 contractor or supplier in compliance with the

10 terms of the subcontract, purchase order, or other

11 agreement with the prime contractor.

12 (iii) With respect to either a construction

13 contract or a contract other than a construction

14 contract, whether the contractor has made final

15 payment to the subcontractor or supplier in com16 pliance with the terms of the subcontract, pur17 chase order, or other agreement with the prime

18 contractor.

19 (iv) With respect to either a construction

20 contract or a contract other than a construction

21 contract, whether any certification of payment of

22 the subcontractor or supplier accompanying the

23 contractor’s payment request to the Government

24 is accurate.
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1 (B) If the contracting officer determines that the

2 prime contractor is not in compliance with any mat3 ter referred to in clause (i), (ii), or (iii) of subpara4 graph (A), the contracting officer may, under proce5 dures established in the regulations—

6 (i) encourage the prime contractor to make

7 timely payment to the subcontractor or supplier;

8 or

9 (ii) reduce or suspend progress payments

10 with respect to amounts due to the prime con11 tractor.

12 (C) If the contracting officer determines that a

13 certification referred to in clause (iv) of subparagraph

14 (A) is inaccurate in any material respect, the con15 tracting officer shall, under procedures established in

16 the regulations, initiate appropriate administrative

17 or other remedial action.

18 (D) This paragraph shall apply with respect to

19 any Government contract, other than a Department of

20 Defense contract, that is in effect on the date of pro21 mulgation of the regulations under this subsection or

22 that is awarded after such date.

23 (b) INAPPLICABILITY TO CERTAIN CONTRACTS.—The

24 regulations prescribed under this section shall not apply to

25 the following contracts:
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1 (1) A contract that is for an amount not in ex2 cess of the simplified acquisition threshold (within the

3 meaning of section 4A of the Office of Federal Pro4 curement Policy Act).

5 (2) A contract for the acquisition of commercial

6 items (as that term is defined in section 315 of the

7 Federal Property and Administrative Services Act of

8 1949).

9 (c) REGULATIONS DEADLINES.—(1) The Adminis10 trator for Federal Procurement Policy shall publish pro11 posed regulations under subsection (a) not later than 180

12 days after the date of the enactment of this Act.

13 (2) The Administrator shall publish final regulations

14 under subsection (a) not later than 270 days after the date

15 of the enactment of this Act.

16 (d) AMENDMENTS TO ARMED SERVICES PROVISION.—

17 Section 806 of the National Defense Authorization Act for

18 Fiscal Years 1992 and 1993 (Public Law 102–190; 10

19 U.S.C. 2301 note) is amended by striking out subsection

20 (c) and inserting in lieu thereof the following:

21 ‘‘(c) INAPPLICABILITY TO CERTAIN CONTRACTS.—The

22 regulations prescribed under this section shall not apply to

23 the following contracts:

24 ‘‘(1) A contract that is for an amount not in ex25 cess of the simplified acquisition threshold (within the
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1 meaning of section 4A of the Office of Federal Pro2 curement Policy Act).

3 ‘‘(2) A contract for the acquisition of commercial

4 items (as that term is defined in section 2281 of title

5 10, United States Code).’’.

6 SEC. 4102. SMALL BUSINESS PROCUREMENT ADVISORY

7 COUNCIL.

8 (a) ESTABLISHMENT.—There is hereby established an

9 interagency council to be known as the ‘‘Small Business

10 Procurement Advisory Council’’ (hereinafter in this section

11 referred to as the ‘‘Council’’).

12 (b) DUTIES.—The duties of the Council are—

13 (1) to serve as a forum for discussion of issues

14 and problems relating to, and ideas for improvement

15 of, small business procurement matters within the

16 Federal Government;

17 (2) to provide information to other departments

18 and agencies of the Federal Government about small

19 business procurement; and

20 (3) to issue advisory reports to the Small Busi21 ness Administration and the Office of Federal Pro22 curement Policy on small business procurement mat23 ters.

24 (c) MEMBERSHIP.—The Council shall be composed of

25 the following members:
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1 (1) The Administrator of the Small Business Ad2 ministration (or the designee of the Administrator).

3 (2) The Administrator for Federal Procurement

4 Policy (or the designee of the Administrator).

5 (3) The Director of the Minority Business Devel6 opment Agency.

7 (4) The head of each Office of Small and Dis8 advantaged Business Utilization in each Federal

9 agency having procurement powers.

10 (d) CO-CHAIRMEN.—The Council shall be co-chaired

11 by the Administrator of the Small Business Administration

12 and the Administrator for Federal Procurement Policy.

13 (e) MEETINGS.—The Council shall meet at the call of

14 the chairmen, but not less often than four times a year and

15 once each quarter.

16 (f) DIRECTOR.—The Chief Counsel for Advocacy of the

17 Small Business shall serve as the director of the Council.

18 The director may not vote on matters before the council ex19 cept in the case of a tie vote among the members. The duties

20 of the director shall be determined by the chairmen of the

21 Council. The Chief Counsel for Advocacy shall receive no

22 additional pay by reason of the counsel’s service as director

23 of the Council.

24 (g) ANNUAL REPORT.—Not later than 30 days after

25 the end of each fiscal year, the Council shall submit to Con-
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1 gress a report detailing the activities of the Council in the

2 preceding fiscal year in carrying out this section.

3 Subtitle C—Miscellaneous

4 Acquisition Laws

5 SEC. 4151. RESTRICTION ON USE OF NONCOMPETITIVE

6 PROCEDURES FOR PROCUREMENT FROM A

7 SPECIFIED SOURCE.

8 (a) ARMED SERVICES ACQUISITIONS.—Section 2304 of

9 title 10, United States Code, is further amended—

10 (1) in subsection (c)(5), by inserting ‘‘subject to

11 subsection (k),’’ after ‘‘(5)’’; and

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

14 ‘‘(k)(1) It is the policy of Congress that no legislation

15 should be enacted that requires a procurement by an agency

16 to be made from a specified non-Federal Government source.

17 ‘‘(2) A provision of law may not be construed as re18 quiring a procurement by an agency to be made from a

19 specified non-Federal Government source unless that provi20 sion of law—

21 ‘‘(A) specifically refers to this subsection;

22 ‘‘(B) specifically identifies the particular non23 Federal Government source from which the procure24 ment is to be made; and
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1 ‘‘(C) specifically states that the procurement

2 from that source is required by such provision of law

3 in contravention of the policy set forth in paragraph

4 (1).’’.

5 (b) CIVILIAN AGENCY ACQUISITIONS.—Section 303 of

6 the Federal Property and Administrative Services Act of

7 1949 (41 U.S.C. 253) is amended—

8 (1) in subsection (c)(5), by inserting ‘‘subject to

9 subsection (h),’’ after ‘‘(5)’’; and

10 (2) by adding at the end the following new sub11 section:

12 ‘‘(h)(1) It is the policy of Congress that no legislation

13 should be enacted that requires a procurement by an execu14 tive agency to be made from a specified non-Federal Gov15 ernment source.

16 ‘‘(2) A provision of law may not be construed as re17 quiring a procurement by an executive agency to be made

18 from a specified non-Federal Government source unless that

19 provision of law—

20 ‘‘(A) specifically refers to this subsection;

21 ‘‘(B) specifically identifies the particular non22 Federal Government source involved; and

23 ‘‘(C) specifically states that the procurement

24 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 SEC. 4152. REPEAL OF OBSOLETE PROVISION.

4 Section 308 of the Federal Property and Administra5 tive Services Act of 1949 (41 U.S.C. 258) is repealed.

6 TITLE V—STANDARDS OF

7 CONDUCT

8 SEC. 5001. CONTRACTING FUNCTIONS PERFORMED BY FED9 ERAL PERSONNEL.

10 (a) AMENDMENT OF OFPP ACT.—The Office of Fed11 eral Procurement Policy Act, as amended by section 1091,

12 is further amended by inserting after section 22 the follow13 ing new section 23:

14 ‘‘SEC. 23. CONTRACTING FUNCTIONS PERFORMED BY FED15 ERAL PERSONNEL.

16 ‘‘(a) LIMITATION ON USE OF CONTRACT ADVISORY

17 AND ASSISTANCE SERVICES.—The head of an agency may

18 not provide for an evaluation or analysis of any aspect of

19 a proposal submitted for an acquisition by that agency to

20 be conducted by a person who is not an employee of an

21 executive agency or a member of the Armed Forces unless

22 the agency head determines that employees or members with

23 adequate training and capability to perform the evaluation

24 or analysis are not readily available within the agency or

25 any other executive agency.
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1 ‘‘(b) COMPLIANCE WITH FAR STANDARDS.—In the

2 administration of this section, the head of each executive

3 agency shall comply with the Federal Acquisition Regula4 tion in determining whether expertise is readily available

5 and in determining the standards of adequate training and

6 capability of employees and members of the Armed Forces

7 to conduct acquisitions.

8 ‘‘(c) DEFINITION.—For purposes of this section, the

9 term ‘employee’ has the meaning given such term by section

10 2105 of title 5, United States Code.’’.

11 (b) REQUIREMENT FOR GUIDANCE AND REGULA12 TIONS.—

13 (1) GUIDANCE AND REGULATIONS REQUIRED.—

14 The Federal Acquisition Regulatory Council estab15 lished by section 25(a) of the Office of Federal Pro16 curement Policy Act (41 U.S.C. 421(a)) shall provide

17 guidance and promulgate regulations regarding—

18 (A) what actions Federal agencies are re19 quired to take to determine whether expertise is

20 readily available within the Federal Government

21 before contracting for advisory and technical

22 services to conduct acquisitions; and

23 (B) the manner in which Federal employees

24 with expertise may be shared with agencies need25 ing expertise for such acquisitions.
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1 (2) DEFINITION.—In paragraph (1), the term

2 ‘‘employee’’ has the meaning given such term by sec3 tion 2105 of title 5, United States Code.

4 (3) DEADLINE.—The guidance and regulations

5 required by paragraph (1) shall be provided and pro6 mulgated not later than 180 days after the date of the

7 enactment of this Act.

8 SEC. 5002. REPEAL OF EXECUTED REQUIREMENT FOR

9 STUDY AND REPORT.

10 Section 17 of the Office of Federal Procurement Policy

11 Act (41 U.S.C. 415) is repealed.

12 SEC. 5003. WAITING PERIOD FOR SIGNIFICANT CHANGES

13 PROPOSED FOR ACQUISITION REGULATIONS.

14 Section 22 of the Office of Federal Procurement Policy

15 Act (41 U.S.C. 418b) is amended—

16 (1) by striking out ‘‘30 days’’ in subsection (a)

17 and inserting in lieu thereof ‘‘45 days’’; and

18 (2) by adding at the end of subsection (d) the fol19 lowing new paragraph:

20 ‘‘(3) A policy, regulation, procedure, or form described

21 in subsection (a) may (notwithstanding that subsection)

22 take effect earlier than 45 days after the date of publication

23 thereof in the Federal Register pursuant to subsection (b)

24 if the officer authorized to issue the procurement policy, reg25 ulation, procedure, or form determines that compelling cir-
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1 cumstances make compliance with the 45-day requirement

2 under subsection (a) impracticable. However, the policy,

3 regulation, procedure, or form may not take effect earlier

4 than 30 days after the publication date except as provided

5 in paragraph (1).’’.

6 SEC. 5004. REPEAL OF SUPERSEDED AND OBSOLETE LAWS.

7 (a) REPEAL.—The following sections of title 10, Unit8 ed States Code, are repealed: sections 2207, 2397, 2397a,

9 2397b, and 2397c.

10 (b) CLERICAL AMENDMENTS.—

11 (1) The table of sections at the beginning of

12 chapter 131 of such title is amended by striking out

13 the item relating to section 2207.

14 (2) The table of sections at the beginning of

15 chapter 141 of such title is amended by striking out

16 the items relating to sections 2397, 2397a, 2397b, and

17 2397c.

18 TITLE VI—DEFENSE TRADE AND

19 COOPERATION

20 SEC. 6001. EXCEPTION TO BUY AMERICAN ACT FOR MICRO21 PURCHASES.

22 Section 2 of title III of the Act of March 3, 1933 (41

23 U.S.C. 10a), commonly referred to as the ‘‘Buy American

24 Act’’, is amended by adding at the end the following: ‘‘This

25 section shall not apply to manufactured articles, materials,
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1 or supplies procured under any contract the award value

2 of which is less than or equal to the micro-purchase thresh3 old under section 4B of the Office of Federal Procurement

4 Policy Act.’’.

5 SEC. 6002. POLICY ON PURCHASE OF FOREIGN GOODS.

6 (a) IN GENERAL.—Section 2533 of title 10, United

7 States Code, is amended to read as follows:

8 ‘‘§ 2533. Policy on the purchase of foreign goods

9 ‘‘(a) DETERMINATION UNDER BUY AMERICAN ACT.—

10 In determining whether application of title III of the Act

11 of March 3, 1933 (41 U.S.C. 10a et seq.), popularly known

12 as the ‘Buy American Act’, is inconsistent with the public

13 interest, the Secretary of Defense shall give adequate consid14 eration to the following:

15 ‘‘(1) The bids or proposals of small business

16 firms in the United States which have offered to fur17 nish American goods.

18 ‘‘(2) The bids or proposals of all other firms in

19 the United States which have offered to furnish Amer20 ican goods.

21 ‘‘(3) The balance of payments of the United

22 States.

23 ‘‘(4) The cost of shipping goods which are other

24 than American goods.
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1 ‘‘(5) Any duty, tariff, or surcharge which may

2 enter into the cost of using goods which are other than

3 American goods.

4 ‘‘(6) Coordination of acquisition activities of the

5 Department of Defense with obligations contained in

6 international agreements and with the acquisition ac7 tivities of major United States allies.

8 ‘‘(7) The need to ensure that the Department of

9 Defense has access to advanced state-of-the-art com10 mercial technology.

11 ‘‘(8) The need to protect the national technology

12 and industrial base, to preserve and enhance the na13 tional technology employment base, and to provide for

14 a defense mobilization base.

15 ‘‘(9) The need to maintain the same source of

16 supply for spare and replacement parts either for an

17 end item that qualifies as an American good or to

18 maintain or foster the integration of the military and

19 commercial industrial base.

20 ‘‘(10) National security interests of the United

21 States.

22 ‘‘(b) In this section, the term ‘goods which are other

23 than American goods’ means—

24 ‘‘(1) an end product that is not mined, produced,

25 or manufactured in the United States; or
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1 ‘‘(2) an end product that is manufactured in the

2 United States but which includes components mined,

3 produced, or manufactured outside the United States

4 the aggregate cost of which exceeds the aggregate cost

5 of the components of such end product that are mined,

6 produced, or manufactured in the United States.’’.

7 (b) CLERICAL AMENDMENT.—The table of sections at

8 the beginning of subchapter V of chapter 148 of such title

9 is amended by striking out the item relating to section 2533

10 and inserting in lieu thereof the following:

‘‘2533. Policy on purchase of foreign goods.’’.

11 SEC. 6003. CONSOLIDATION OF LIMITATIONS ON PROCURE12 MENT OF GOODS OTHER THAN AMERICAN

13 GOODS.

14 Section 2534 of title 10, United States Code, is amend15 ed—

16 (1) by striking out subsections (a) through (f);

17 (2) by redesignating subsection (g), as added by

18 section 4032, as subsection (d); and

19 (3) by inserting after the section heading the fol20 lowing:

21 ‘‘(a) LIMITATION ON CERTAIN PROCUREMENTS.—The

22 Secretary of Defense may procure the following items only

23 if they are manufactured by an entity that is part of the

24 national technology and industrial base (as defined in sec25 tion 2491(1) of this title):
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1 ‘‘(1) BUSES.—Multipassenger motor vehicles

2 (buses).

3 ‘‘(2) CHEMICAL WEAPONS ANTIDOTE.—Chemical

4 weapons antidote contained in automatic injectors (or

5 components for such injectors), but only if the com6 pany that manufactures the item not only manufac7 tures it in the United States but also meets the follow8 ing requirements:

9 ‘‘(A) The company is an existing producer

10 under the industrial preparedness program at

11 the time the contract is awarded.

12 ‘‘(B) The company has received all required

13 regulatory approvals.

14 ‘‘(C) The company has the plant, equip15 ment, and personnel to perform the contract in

16 existence in the United States at the time the

17 contract is awarded.

18 ‘‘(3) VALVES AND MACHINE TOOLS.—(A) Items

19 in the following categories:

20 ‘‘(i) Powered and non-powered valves in

21 Federal Supply Classes 4810 and 4820 used in

22 piping for naval surface ships and submarines.

23 ‘‘(ii) Machine tools in the Federal Supply

24 Classes for metal-working machinery numbered

25 3405, 3408, 3410 through 3419, 3426, 3433,
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1 3438, 3441 through 3443, 3445, 3446, 3448,

2 3449, 3460, and 3461.

3 ‘‘(B) Contracts for the procurement of items de4 scribed in subparagraph (A) include contracts—

5 ‘‘(i) for the use of such items in any prop6 erty under the control of the Department of De7 fense, including Government-owned, contractor8 operated facilities; and

9 ‘‘(ii) entered into by contractors on behalf of

10 the Department of Defense for the purposes of

11 providing such items to other contractors as Gov12 ernment-furnished equipment.

13 ‘‘(C) In any case in which a contract for items

14 described in subparagraph (A) includes the procure15 ment of more than one Federal Supply Class of ma16 chine tools or machine tools and accessories, each sup17 ply class shall be evaluated separately for purposes of

18 determining whether the limitation in this subsection

19 applies.

20 ‘‘(D) This paragraph is effective through fiscal

21 year 1996.

22 ‘‘(4) AIR CIRCUIT BREAKERS.—Air circuit break23 ers for naval vessels.

24 ‘‘(5) SONOBUOYS.—Sonobuoys.
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1 ‘‘(6) BALL BEARINGS AND ROLLER BEARINGS.—

2 Ball bearings and roller bearings, in accordance with

3 subpart 225.71 of part 225 of the Defense Federal Ac4 quisition Regulation Supplement, as in effect on Oc5 tober 23, 1992. This paragraph is effective through

6 fiscal year 1995.

7 ‘‘(b) EXCEPTIONS.—The Secretary of Defense may

8 waive the limitation in subsection (a) with respect to the

9 procurement of an item listed in that subsection if the Sec10 retary determines that any of the following apply:

11 ‘‘(1) Application of the limitation would cause

12 unreasonable costs or delays to be incurred.

13 ‘‘(2) United States producers of the item would

14 not be jeopardized by competition from a foreign

15 country and that country does not discriminate

16 against defense items produced in the United States

17 to a greater degree than the United States discrimi18 nates against defense items produced in that country.

19 ‘‘(3) Application of the limitation would impede

20 cooperative programs entered into between the De21 partment of Defense and a foreign country and that

22 country does not discriminate against defense items

23 produced in the United States to a greater degree

24 than the United States discriminates against defense

25 items produced in that country.
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1 ‘‘(4) Satisfactory quality items manufactured by

2 an entity that is part of the national technology and

3 industrial base (as defined in section 2491(1) of this

4 title) are not available.

5 ‘‘(5) Application of the limitation would result

6 in the existence of only one source for the item that

7 is an entity that is part of the national technology

8 and industrial base (as defined in section 2491(1) of

9 this title).

10 ‘‘(6) The procurement is for an amount less than

11 the simplified acquisition threshold and simplified

12 purchase procedures are being used.

13 ‘‘(7) Application of the limitation is not in the

14 national security interests of the United States.

15 ‘‘(8) Application of the limitation would ad16 versely affect a United States company.

17 ‘‘(c) PRINCIPLE OF CONSTRUCTION WITH FUTURE

18 LAWS.—A provision of law may not be construed as modi19 fying or superseding the provisions of this section, or as

20 requiring funds to be limited, or made available, by the Sec21 retary of Defense to a particular domestic source by con22 tract, unless that provision of law—

23 ‘‘(1) specifically refers to this section;
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1 ‘‘(2) specifically states that such provision of law

2 modifies or supersedes the provisions of this section;

3 and

4 ‘‘(3) specifically identifies the particular domes5 tic source involved and states that the contract to be

6 awarded pursuant to such provision of law is being

7 awarded in contravention of this section.’’.

8 SEC. 6004. INTERNATIONAL COOPERATIVE AGREEMENTS.

9 (a) DEFENSE INTERNATIONAL AGREEMENTS.—

10 (1) TERMINOLOGY REVISIONS.—Section 2531 of

11 title 10, United States Code, is amended—

12 (A) in the subsection captions for sub13 sections (a) and (c), by striking out ‘‘MOUS AND

14 RELATED’’ and inserting in lieu thereof ‘‘INTER15 NATIONAL’’;

16 (B) in subsection (a), by striking out ‘‘pro17 posed memorandum of understanding, or any ex18 isting or proposed agreement related to a memo19 randum of understanding,’’ in the matter preced20 ing paragraph (1) and inserting in lieu thereof

21 ‘‘proposed international agreement, including a

22 memorandum of understanding,’’;

23 (C) by striking out ‘‘memorandum of under24 standing or related agreement’’ each place it ap-
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1 pears and inserting in lieu thereof ‘‘inter2 national agreement’’;

3 (D) in subsection (b), by striking out

4 ‘‘memorandum or related agreement’’ each place

5 it appears in the second sentence and inserting

6 in lieu thereof ‘‘international agreement’’; and

7 (E) in subsection (c)—

8 (i) by striking out ‘‘A’’ after ‘‘AGREE9 MENTS.—’’ and inserting in lieu thereof

10 ‘‘An’’; and

11 (ii) by striking out ‘‘memorandum or

12 agreement’’ and inserting in lieu thereof

13 ‘‘international agreement’’.

14 (2) EXPANDED SCOPE OF AGREEMENTS.—Sub15 section (a) of such section is further amended by

16 striking out ‘‘research, development, or production’’ in

17 the matter preceding paragraph (1) and inserting in

18 lieu thereof ‘‘research, development, production, or lo19 gistics support’’.

20 (3) CLERICAL AMENDMENTS.—

21 (A) SECTION HEADING.—The heading of

22 such section is amended to read as follows:

23 ‘‘§ 2531. Defense international agreements’’.

24 (B) TABLE OF SECTIONS.—The item relat25 ing to such section in the table of sections at the
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1 beginning of subchapter V of chapter 148 of such

2 title is amended to read as follows:

‘‘2531. Defense international agreements.’’.

3 (b) ADDITION TO DEFINITION OF COOPERATIVE

4 PROJECT.—Section 2350i(c)(1) of title 10, United States

5 Code, is amended in subparagraph (B)—

6 (1) by striking out ‘‘or’’ at the end of clause (ii);

7 (2) by redesignating clause (iii) as clause (iv);

8 and

9 (3) by inserting after clause (ii) the following:

10 ‘‘(iii) modifying existing military

11 equipment to meet United States military

12 requirements; or’’.

13 SEC. 6005. MISCELLANEOUS REPEALS.

14 (a) REPEAL OF BUY AMERICAN REQUIREMENT FOR

15 POLICY GUIDANCE.—Title III of the Act of March 3, 1933

16 (41 U.S.C. 10a et seq.), commonly referred to as the ‘‘Buy

17 American Act’’, is amended in section 4(g) (41 U.S.C. 10b–

18 1(g)) by striking out paragraphs (2)(C) and (3).

19 (b) REPEAL OF BUY AMERICAN REPORTING REQUIRE20 MENT.—Section 9096(b) of Public Law 102–396 (106 Stat.

21 1924; 41 U.S.C. 10b–2(b)) is repealed.

22 (c) REPEAL OF STUDIES OF BUY AMERICAN ACT

23 WAIVERS.—Section 306 of the Trade Agreements Act of

24 1979 (19 U.S.C. 2516), relating to studies of certain em25 ployment effects and procurement effects of a waiver of title
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1 III of the Act of March 3, 1933 (41 U.S.C. 10a et seq.),

2 commonly referred to as the ‘‘Buy American Act’’, is re3 pealed.

4 TITLE VII—COMMERCIAL ITEMS

5 Subtitle A—Armed Services

6 Acquisitions

7 SEC. 7001. ESTABLISHMENT OF NEW CHAPTER IN TITLE 10.

8 (a) ESTABLISHMENT.—Part IV of subtitle A of title

9 10, United States Code, is amended by inserting before

10 chapter 137 the following new chapter 136:

11 ‘‘CHAPTER 136—PROCUREMENT OF

12 COMMERCIAL ITEMS

‘‘Sec.

‘‘2281. Definitions.

‘‘2282. Preference for acquisition of commercial items.

‘‘2283. Pricing documentation for commercial items.

‘‘2284. Regulations; required terms and conditions.

‘‘2285. Principle of construction with future laws.

‘‘2286. Inapplicability of certain provisions of law.’’.

13 (b) CLERICAL AMENDMENT.—The tables of chapters at

14 the beginning of subtitle A of title 10, United States Code,

15 and the beginning of part IV of such subtitle are amended

16 by inserting before the item relating to chapter 137 the fol17 lowing new item:

‘‘136. Procurement of Commercial Items ....................................................... 2281’’.

18 SEC. 7002. DEFINITIONS.

19 Chapter 136 of title 10, United States Code, as added

20 by section 7001, is amended by adding after the table of

21 sections the following:
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1 ‘‘§ 2281. Definitions

2 ‘‘In this chapter:

3 ‘‘(1) The term ‘commercial item’ means any of

4 the following:

5 ‘‘(A) Any item of a type customarily used

6 in the course of normal business operations for

7 other than Federal Government purposes, that—

8 ‘‘(i) has been sold, leased, or licensed to

9 the general public or to domestic State or

10 local government entities; or

11 ‘‘(ii) has been offered for sale, lease, or

12 license to the general public or to domestic

13 State or local government entities.

14 ‘‘(B) An item intended to be used in the

15 course of normal business operations for other

16 than Federal Government purposes that is not

17 yet available in the commercial marketplace, but

18 will be available in the commercial marketplace

19 in time to satisfy the delivery requirements

20 under a Federal Government solicitation.

21 ‘‘(C) Any item that, but for—

22 ‘‘(i) modifications of a type customar23 ily available in the commercial market24 place, or

25 ‘‘(ii) minor modifications made to

26 meet Federal Government requirements,
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1 would satisfy the criteria in subparagraph (A)

2 or (B).

3 ‘‘(D) Any combination of items meeting the

4 requirements of subparagraph (A), (B), or (C)

5 that are of a type customarily combined and sold

6 in combination to the general public.

7 ‘‘(E) Services offered and sold competitively,

8 in significant quantities, in the commercial mar9 ketplace at established catalog prices or standard

10 rates and under standard commercial terms and

11 conditions.

12 ‘‘(F) Any item, combination of items, or

13 service referred to in subparagraphs (A) through

14 (E), notwithstanding the fact that the item, com15 bination of items, or service is transferred be16 tween or among separate divisions, subsidiaries,

17 or affiliates of a contractor.

18 ‘‘(2) The term ‘nondevelopmental item’ means

19 any of the following:

20 ‘‘(A) Any previously developed item of sup21 ply that is in use by a department or agency of

22 the United States, a State or local government,

23 or a foreign government with which the United

24 States has a mutual defense cooperation agree25 ment.
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1 ‘‘(B) Any item of supply described in sub2 paragraph (A) that requires only minor modi3 fication or modification of the type customarily

4 available in the commercial marketplace in order

5 to meet the requirements of the procuring depart6 ment or agency.

7 ‘‘(C) Any item of supply currently being

8 produced that does not meet the requirements of

9 subparagraph (A) or (B) solely because the

10 item—

11 ‘‘(i) is not yet in use; or

12 ‘‘(ii) is not yet available in the com13 mercial marketplace.

14 ‘‘(3) The term ‘component’ means any item sup15 plied to the Federal Government as part of an end

16 item or of another component.

17 ‘‘(4) The term ‘commercial component’ means

18 any component that is a commercial item.

19 ‘‘(5) The term ‘head of an agency’ means the

20 Secretary of Defense, the Secretary of Transportation,

21 and the Administrator of the National Aeronautics

22 and Space Administration.

23 ‘‘(6) The term ‘agency’ means the Department of

24 Defense, the Coast Guard, and the National Aero25 nautics and Space Administration.’’.
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1 SEC. 7003. PREFERENCE FOR ACQUISITION OF COMMER2 CIAL ITEMS.

3 (a) IN GENERAL.—Chapter 136 of title 10, United

4 States Code, as amended by section 7002, is further amend5 ed by adding after section 2281 the following new section:

6 ‘‘§ 2282. Preference for acquisition of commercial

7 items

8 ‘‘(a) PREFERENCE.—(1) The head of an agency shall

9 ensure that, to the maximum extent practicable—

10 ‘‘(A) requirements of the agency with respect to

11 a procurement of supplies are stated in terms of—

12 ‘‘(i) functions to be performed,

13 ‘‘(ii) performance required, or

14 ‘‘(iii) essential physical characteristics;

15 ‘‘(B) such requirements are defined so that com16 mercial items may be procured to fulfill such require17 ments; and

18 ‘‘(C) such requirements are fulfilled through the

19 procurement of commercial items.

20 ‘‘(2) The head of an agency shall ensure that, to the

21 maximum extent practicable, requirements of the agency

22 with respect to a procurement of supplies are defined so

23 that nondevelopmental items may be procured to fulfill such

24 requirements in any case in which commercial items that

25 fulfill the requirements of the agency are not available.
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1 ‘‘(b) IMPLEMENTATION.—The head of each agency shall

2 ensure that procurement officials in the agency, to the max3 imum extent practicable—

4 ‘‘(1) acquire commercial items to meet the needs

5 of the agency;

6 ‘‘(2) require prime contractors and subcontrac7 tors at all levels under the contracts of the agency to

8 incorporate commercial items as components of items

9 supplied to the agency;

10 ‘‘(3) modify requirements in appropriate cases to

11 ensure that the requirements can be met by commer12 cial items;

13 ‘‘(4) state specifications in terms that enable and

14 encourage bidders and offerors to supply commercial

15 items in response to the solicitations of the agency;

16 ‘‘(5) revise the procurement policies, practices,

17 and procedures of the agency that are not required by

18 law to reduce any impediments in those policies,

19 practices, and procedures to the acquisition of com20 mercial items; and

21 ‘‘(6) require training of appropriate personnel in

22 the acquisition of commercial items.

23 ‘‘(c) EXISTING OR PRIOR SOURCES OF

24 NONDEVELOPMENTAL ITEMS.—(1) Notwithstanding sub25 section (a), the Secretary of Defense, the Secretary of a mili-
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1 tary department, or the head of a Defense Agency may,

2 until five years after the date of the enactment of the Fed3 eral Acquisition Improvement Act of 1994, determine that

4 it is in the Government’s interests to permit existing or

5 prior sources of nondevelopmental items to participate in

6 a competition for a commercial item in a case in which

7 a nondevelopmental item will compete with a commercial

8 item under the same terms, conditions, and evaluation and

9 award criteria.

10 ‘‘(2) Nondevelopmental items furnished by an existing

11 or prior source that must be modified to meet the require12 ments of a solicitation for commercial items may be offered

13 under such a solicitation, but only in a case in which the

14 modifications—

15 ‘‘(A) are necessary to comply with the Govern16 ment’s solicitation requirements; and

17 ‘‘(B) do not significantly alter the function or es18 sential physical characteristics of the items to be sup19 plied.

20 ‘‘(3) The policies, procedures, solicitation provisions,

21 and contract clauses applicable to commercial items under

22 this chapter also shall apply to nondevelopmental items fur23 nished by an existing or prior source that is permitted to

24 participate in a competition conducted under this title.
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1 ‘‘(d) PRELIMINARY MARKET RESEARCH.—(1) The

2 head of an agency shall conduct market research appro3 priate to the circumstances—

4 ‘‘(A) before developing new specifications for a

5 procurement by the agency; and

6 ‘‘(B) before soliciting bids or proposals for a con7 tract in excess of the simplified acquisition threshold.

8 ‘‘(2) The head of the agency shall use the results of

9 market research to determine whether there are commercial

10 items available that—

11 ‘‘(A) meet the requirements of the agency;

12 ‘‘(B) could be modified to meet such require13 ments; or

14 ‘‘(C) could meet such requirements if those re15 quirements were modified to a reasonable extent.’’.

16 (b) REPEAL OF SUPERSEDED PROVISION.—Section

17 2325 of title 10, United States Code, is repealed. The table

18 of sections at the beginning of chapter 137 of such title is

19 amended by striking out the item relating to section 2325.

20 SEC. 7004. PRICING DOCUMENTATION FOR COMMERCIAL

21 ITEMS.

22 (a) IN GENERAL.—Chapter 136 of title 10, United

23 States Code, as amended by section 7003, is further amend24 ed by adding after section 2282 the following new section:
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1 ‘‘§ 2283. Pricing documentation for commercial items

2 ‘‘(a) REQUIREMENT FOR DETERMINATION OF PRICE

3 REASONABLENESS.—(1) When the price of a commercial

4 item is based on adequate price competition or on estab5 lished catalog or market prices of items sold in sufficient

6 quantities to the general public, the contracting officer shall

7 presume that the price contained in the most advantageous

8 evaluated offer (price and all other factors considered) re9 ceived in response to a solicitation, or a price based on es10 tablished catalog or market prices, is fair and reasonable

11 unless the contracting officer has information that the price

12 is not fair and reasonable. Before the award of a contract

13 for which price is based on catalog or market prices, the

14 contracting officer shall make reasonable efforts to establish

15 the currency and accuracy of such prices.

16 ‘‘(2) When the price of a commercial item is not pre17 sumed fair and reasonable under paragraph (1), the con18 tracting officer shall use price analysis to determine wheth19 er the price is fair and reasonable.

20 ‘‘(3) When required by the contracting officer before

21 award of a contract or contract definitization, the offeror

22 shall promptly furnish documentation, in the form regu23 larly maintained in commercial operations, adequate to

24 demonstrate the market price of the item or items or other25 wise needed to establish a fair and reasonable price. All doc26 umentation received from an offeror, if not otherwise in the
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1 public domain and if requested by the offeror and marked

2 as proprietary, shall be treated by the Government as con3 fidential and exempt from disclosure to the extent permitted

4 by section 552 of title 5. In this paragraph, the term ‘con5 tract definitization’ means agreement to contractual terms,

6 specifications, and price.

7 ‘‘(4) In any case in which a contracting officer is able

8 to determine under paragraph (1) or (2) that a price is

9 reasonable, the procurement shall be exempt from section

10 2306a of this title.

11 ‘‘(5) In any case in which a contracting officer is un12 able to determine under paragraph (1) or (2) that a price

13 is reasonable, the contracting officer may require cost or

14 pricing data under section 2306a of this title.

15 ‘‘(b) GOVERNMENT’S RIGHT TO AUDIT.—(1) The

16 United States shall have the right to audit all documenta17 tion provided by an offeror under subsection (a)(3) and all

18 books and records of the offeror directly relating to such doc19 umentation, except that, if the offeror has made no represen20 tation as to the completeness of the documentation supplied,

21 the United States shall have no right to audit for complete22 ness. When contract price is established under this section,

23 the United States shall have no audit rights other than those

24 set out in this subsection.

25 ‘‘(2) The right under this subsection shall expire—
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1 ‘‘(A) one year after the date of commencement of

2 performance of the contract, or one year after the date

3 of commencement of performance of the modification

4 of the contract, with respect to which the information

5 was provided; or

6 ‘‘(B) on such other date agreed upon by the par7 ties at the time of contract award or contract

8 definitization.’’.

9 (b) CROSS REFERENCE.—Section 2306a of title 10,

10 United States Code, is amended by adding at the end the

11 following new subsection:

12 ‘‘(h) ADDITIONAL EXCEPTIONS REGARDING COMMER13 CIAL ITEMS.—For provisions relating to additional excep14 tions for procurements of commercial items, see section 2283

15 of this title.’’.

16 SEC. 7005. REGULATIONS ON ACQUISITION OF COMMER17 CIAL ITEMS.

18 (a) IN GENERAL.—Chapter 136 of title 10, United

19 States Code, as amended by section 7004, is further amend20 ed by adding after section 2283 the following new section:

21 ‘‘§ 2284. Regulations; required terms and conditions

22 ‘‘(a) IN GENERAL.—The head of each agency shall pre23 scribe regulations to implement this chapter in that agency.

24 Such regulations shall be developed in consultation with the

25 Administrator for Federal Procurement Policy. The regula-
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1 tions shall include provisions implementing the preference

2 for commercial items set out in section 2282 of this title.

3 ‘‘(b) TERMS AND CONDITIONS.—The regulations pre4 scribed under subsection (a) shall contain a set or sets of

5 terms and conditions to be included in contracts for the ac6 quisition of commercial items. Such terms and conditions

7 shall, to the maximum extent practicable, include only those

8 contract clauses that are determined by the head of the

9 agency to be—

10 ‘‘(1) required to implement provisions of law ap11 plicable to commercial item acquisitions; or

12 ‘‘(2) consistent with standard commercial prac13 tice.

14 ‘‘(c) TERMS AND CONDITIONS FOR COMPONENTS.—

15 Such regulations shall provide that a prime contractor fur16 nishing commercial items or items other than commercial

17 items as items or components shall not be required to apply

18 to any of its divisions, subsidiaries, or affiliates or any of

19 its subcontractors or suppliers that are furnishing commer20 cial items as components any clause, term, or condition ex21 cept those determined by the head of the agency to be—

22 ‘‘(1) required to implement provisions of law ap23 plicable to subcontractors furnishing commercial

24 items; or
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1 ‘‘(2) determined to be consistent with standard

2 commercial practice.

3 ‘‘(d) MARKET ACCEPTANCE.—The regulations pre4 scribed under subsection (a) shall provide that, under ap5 propriate conditions, the head of the agency may require

6 an offeror to demonstrate, as a condition for being consid7 ered responsive, that the items offered meet, among other

8 criteria, market acceptance criteria, unless such item has

9 been satisfactorily supplied to an executive agency under

10 current or recent contracts for the same or similar require11 ments.

12 ‘‘(e) USE OF FIXED PRICE CONTRACTS.—The regula13 tions prescribed under subsection (a) shall include a re14 quirement that firm, fixed price contracts, or fixed price

15 contracts with economic price adjustment provisions, be

16 used for the acquisition of commercial items and compo17 nents.

18 ‘‘(f) TERM OF CONTRACTS.—The regulations pre19 scribed under subsection (a) shall provide that, to the extent

20 practicable, contracts for acquisition of commercial items

21 shall not require contract performance for a term longer

22 than customary industry practice for the item being ac23 quired. A contracting officer may include in a contract pro24 visions for economic price adjustment if an extended period

25 of performance under the contract cannot be avoided.
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1 ‘‘(g) CONTRACT QUALITY REQUIREMENTS.—The regu2 lations prescribed under subsection (a) shall include provi3 sions that—

4 ‘‘(1) permit, to the maximum extent practicable,

5 a contractor under a commercial items acquisition to

6 use the existing quality assurance system of the con7 tractor as a substitute for compliance with an other8 wise applicable requirement for the Government to in9 spect or test the commercial items before the contrac10 tor’s tender of those items for acceptance by the Gov11 ernment;

12 ‘‘(2) require that, to the maximum extent prac13 ticable, the head of the agency take advantage of war14 ranties (including extended warranties) offered by

15 offerors of commercial items and use such warranties

16 for the repair and replacement of commercial items;

17 and

18 ‘‘(3) set forth guidance regarding the use of past

19 performance of commercial items and sources as a

20 factor in contract award decisions.’’.

21 (b) DEFENSE CONTRACT CLAUSES.—

22 (1) REPEAL OF DOD AUTHORITY.—Section

23 824(b) of the National Defense Authorization Act for

24 Fiscal Years 1990 and 1991 (Public Law 101–189; 10

25 U.S.C. 2325 note) is repealed.
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1 (2) SAVINGS PROVISION.—Notwithstanding sub2 sections (b) and (c) of section 2284 of title 10, U.S.C.,

3 as added by subsection (a), a contract of the Depart4 ment of Defense entered into before October 1, 1994,

5 and a subcontract entered into before such date under

6 such a contract, may include clauses developed pursu7 ant to paragraphs (2) and (3) of section 824(b) of the

8 National Defense Authorization Act for Fiscal Years

9 1990 and 1991 (Public Law 101–189; 10 U.S.C. 2325

10 note).

11 SEC. 7006. PRINCIPLE OF CONSTRUCTION WITH FUTURE

12 LAWS.

13 Chapter 136 of title 10, United States Code, as amend14 ed by section 7005, is further amended by adding after sec15 tion 2284 the following new section:

16 ‘‘§ 2285. Principle of construction with future laws

17 ‘‘A provision of law enacted after the date of the enact18 ment of the Federal Acquisition Improvement Act of 1994

19 may not be construed as modifying or superseding any pro20 vision of this chapter unless that provision of law specifi21 cally refers to this section and specifically states that such

22 provision of law modifies or supersedes such provision of

23 this chapter.’’.
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1 SEC. 7007. INAPPLICABILITY OF CERTAIN PROVISIONS OF

2 LAW.

3 (a) INAPPLICABLE PROVISIONS.—Chapter 136 of title

4 10, United States Code, as amended by section 7006, is fur5 ther amended by adding after section 2285 the following

6 new section:

7 ‘‘§ 2286. 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) Sections 2533 and 2534 of this title

4 (relating to goods which are other than American

5 goods).

6 ‘‘(C) The Act of March 3, 1933, commonly

7 referred to as the ‘Buy American Act’ (41 U.S.C.

8 10a–10c).

9 ‘‘(2) COVERED ENTITIES.—Paragraph (1) ap10 plies to each of the following:

11 ‘‘(A) Any division, subsidiary, or affiliate

12 of a prime contractor (other than the division,

13 subsidiary, or affiliate that is contracting with

14 the Government under the prime contract) or of

15 a subcontractor of a prime contractor, if such di16 vision, subsidiary, or affiliate is furnishing a

17 commercial item to the prime contractor or sub18 contractor for purposes of carrying out the prime

19 contract or subcontract.

20 ‘‘(B) Any subcontractor or supplier of a

21 prime contractor, if the subcontractor or supplier

22 is furnishing a commercial item to the prime

23 contractor for purposes of carrying out the prime

24 contract.
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1 ‘‘(c) DEFINITION.—In this section, the term ‘prime

2 contractor’ means a person under contract directly with the

3 Department of Defense.’’.

4 SEC. 7008. CONFORMING AMENDMENTS RELATING TO INAP5 PLICABILITY OF CERTAIN PROVISIONS OF

6 LAW.

7 (a) INAPPLICABILITY OF REQUIREMENT FOR CON8 TRACT CLAUSE REGARDING CONTINGENT FEES.—Section

9 2306(b) of title 10, United States Code, as amended by sec10 tion 4032(a), is further amended by inserting before the pe11 riod at the end of the sentence added by section 4032(a)

12 the following: ‘‘or to a contract for the acquisition of com13 mercial items’’.

14 (b) INAPPLICABILITY OF REGULATIONS ON RIGHTS IN

15 TECHNICAL DATA.—Section 2320 of title 10, United States

16 Code, is amended by adding at the end the following new

17 subsection:

18 ‘‘(e) The regulations prescribed under subsection (a)

19 shall not apply to contracts for the purchase of commercial

20 items (as defined in section 2281 of this title).’’.

21 (c) INAPPLICABILITY OF REQUIREMENT FOR VALIDA22 TION OF PROPRIETARY DATA RESTRICTIONS.—Section

23 2321(a) of title 10, United States Code, is amended by in24 serting before the period at the end the following: ‘‘, other
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1 than a contract for supplies or services that are commercial

2 items (as defined in section 2281 of this title)’’.

3 (d) INAPPLICABILITY OF REQUIREMENT TO IDENTIFY

4 SUPPLIERS AND SOURCES OF SUPPLIES.—Paragraph (2)

5 of section 2384(b) of title 10, United States Code, is amend6 ed to read as follows:

7 ‘‘(2) The regulations prescribed pursuant to paragraph

8 (1) do not apply to a contract that requires the delivery

9 of supplies that are commercial items, as defined in section

10 2281 of this title.’’.

11 (e) INAPPLICABILITY OF PROHIBITION AGAINST DOING

12 BUSINESS WITH CERTAIN OFFERORS OR CONTRACTORS.—

13 Section 2393(d) of title 10, United States Code, as amended

14 by section 4032(d), is further amended by adding at the

15 end the following: ‘‘The requirement shall not apply in the

16 case of a subcontract for the acquisition of commercial items

17 (as defined in section 2281 of this title).’’.

18 (f) INAPPLICABILITY OF PROHIBITION ON LIMITATION

19 OF SUBCONTRACTOR DIRECT SALES.—Section 2402 of title

20 10, United States Code, as amended by section 4032(e), is

21 further amended by adding at the end the following new

22 subsection:

23 ‘‘(d)(1) An agreement between the contractor in a con24 tract for the acquisition of commercial items and a sub25 contractor under such contract that restricts sales by such
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1 subcontractor directly to persons other than the contractor

2 may not be considered to unreasonably restrict sales by that

3 subcontractor to the United States in violation of the provi4 sion included in such contract pursuant to subsection (a)

5 if the agreement does not result in the United States being

6 treated differently with regard to the restriction than any

7 other prospective purchaser of such commercial items from

8 that subcontractor.

9 ‘‘(2) In paragraph (1), the term ‘commercial item’ has

10 the meaning given such term in section 2281 of this title.’’.

11 (g) INAPPLICABILITY OF PROHIBITION ON PERSONS

12 CONVICTED OF DEFENSE-RELATED FELONIES.—Section

13 2408(a) of title 10, United States Code, is amended by add14 ing at the end of paragraph (4), as added by section

15 4032(f), the following: ‘‘The term does not include a con16 tract for the purchase of commercial items (as defined in

17 section 2281 of this title).’’.

18 (h) INAPPLICABILITY OF CONTRACTOR INVENTORY AC19 COUNTING SYSTEM STANDARDS.—Section 2410b of title 10,

20 United States Code, is amended by adding after subsection

21 (b), as added by section 4032(g), the following:

22 ‘‘(c) The regulations prescribed pursuant to subsection

23 (a) shall not apply to a contract for the purchase of com24 mercial items (as defined in section 2281 of this title).’’.
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1 Subtitle B—Civilian Agency

2 Acquisitions

3 SEC. 7011. DEFINITIONS.

4 Title III of the Federal Property and Administrative

5 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

6 by section 1554, is further amended by adding after section

7 314 the following new section:

8 ‘‘SEC. 315. DEFINITIONS RELATING TO PROCUREMENT OF

9 COMMERCIAL ITEMS.

10 ‘‘As used in this title:

11 ‘‘(1) The term ‘commercial item’ means any of

12 the following:

13 ‘‘(A) Any item of a type customarily used

14 in the course of normal business operations for

15 other than Federal Government purposes, that—

16 ‘‘(i) has been sold, leased, or licensed to

17 the general public or to domestic State or

18 local government entities; or

19 ‘‘(ii) has been offered for sale, lease, or

20 license to the general public or to domestic

21 State or local government entities.

22 ‘‘(B) An item intended to be used in the

23 course of normal business operations for other

24 than Federal Government purposes that is not

25 yet available in the commercial marketplace, but
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1 will be available in the commercial marketplace

2 in time to satisfy the delivery requirements

3 under a Federal Government solicitation.

4 ‘‘(C) Any item that, but for—

5 ‘‘(i) modifications of a type customar6 ily available in the commercial market7 place, or

8 ‘‘(ii) minor modifications made to

9 meet Federal Government requirements,

10 would satisfy the criteria in subparagraph (A)

11 or (B).

12 ‘‘(D) Any combination of items meeting the

13 requirements of subparagraph (A), (B), or (C)

14 that are of a type customarily combined and sold

15 in combination to the general public.

16 ‘‘(E) Services offered and sold competitively,

17 in significant quantities, in the commercial mar18 ketplace at established catalog prices or standard

19 rates and under standard commercial terms and

20 conditions.

21 ‘‘(F) Any item, combination of items, or

22 service referred to in subparagraphs (A) through

23 (E), notwithstanding the fact that the item, com24 bination of items, or service is transferred be-
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1 tween or among separate divisions, subsidiaries,

2 or affiliates of a contractor.

3 ‘‘(2) The term ‘nondevelopmental item’ means

4 any of the following:

5 ‘‘(A) Any previously developed item of sup6 ply that is in use by a department or agency of

7 the United States, a State or local government,

8 or a foreign government with which the United

9 States has a mutual defense cooperation agree10 ment.

11 ‘‘(B) Any item of supply described in sub12 paragraph (A) that requires only minor modi13 fication or modification of the type customarily

14 available in the commercial marketplace in order

15 to meet the requirements of the procuring depart16 ment or agency.

17 ‘‘(C) Any item of supply currently being

18 produced that does not meet the requirements of

19 subparagraph (A) or (B) solely because the

20 item—

21 ‘‘(i) is not yet in use; or

22 ‘‘(ii) is not yet available in the com23 mercial marketplace.
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1 ‘‘(3) The term ‘component’ means any item sup2 plied to the Federal Government as part of an end

3 item or of another component.

4 ‘‘(4) The term ‘commercial component’ means

5 any component that is a commercial item.’’.

6 SEC. 7012. PREFERENCE FOR ACQUISITION OF COMMER7 CIAL ITEMS.

8 Title III of the Federal Property and Administrative

9 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

10 by section 7011, is further amended by adding after section

11 315 the following new section:

12 ‘‘SEC. 315A. PREFERENCE FOR ACQUISITION OF COMMER13 CIAL ITEMS.

14 ‘‘(a) PREFERENCE.—(1) The head of each executive

15 agency shall ensure that, to the maximum extent prac16 ticable—

17 ‘‘(A) requirements of the executive agency with

18 respect to a procurement of supplies are stated in

19 terms of—

20 ‘‘(i) functions to be performed,

21 ‘‘(ii) performance required, or

22 ‘‘(iii) essential physical characteristics;

23 ‘‘(B) such requirements are defined so that com24 mercial items may be procured to fulfill such require25 ments; and
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1 ‘‘(C) such requirements are fulfilled through the

2 procurement of commercial items.

3 ‘‘(2) The head of an agency shall ensure that, to the

4 maximum extent practicable, requirements of the agency

5 with respect to a procurement of supplies are defined so

6 that nondevelopmental items may be procured to fulfill such

7 requirements in any case in which commercial items that

8 fulfill the requirements of the agency are not available.

9 ‘‘(b) IMPLEMENTATION.—The head of each executive

10 agency shall ensure that procurement officials in that execu11 tive agency, to the maximum extent practicable—

12 ‘‘(1) acquire commercial items to meet the needs

13 of the executive agency;

14 ‘‘(2) require prime contractors and subcontrac15 tors at all levels under the executive agency contracts

16 to incorporate commercial items as components of

17 items supplied to the executive agency;

18 ‘‘(3) modify requirements in appropriate cases to

19 ensure that the requirements can be met by commer20 cial items;

21 ‘‘(4) state specifications in terms that enable and

22 encourage bidders and offerors to supply commercial

23 items in response to the solicitations of the executive

24 agency;
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1 ‘‘(5) revise the procurement policies, practices,

2 and procedures of the executive agency that are not

3 required by law to reduce any impediments in those

4 policies, practices, and procedures to the acquisition

5 of commercial items; and

6 ‘‘(6) require training of appropriate personnel in

7 the acquisition of commercial items.

8 ‘‘(c) EXISTING OR PRIOR SOURCES OF

9 NONDEVELOPMENTAL ITEMS.—(1) Notwithstanding sub10 section (a), the head of an executive agency may, until five

11 years after the date of the enactment of the Federal Acquisi12 tion Improvement Act of 1994, determine that it is in the

13 Government’s interests to permit existing or prior sources

14 of nondevelopmental items to participate in a competition

15 for a commercial item in a case in which a

16 nondevelopmental item will compete with a commercial

17 item under the same terms, conditions, and evaluation and

18 award criteria.

19 ‘‘(2) Nondevelopmental items furnished by an existing

20 or prior source that must be modified to meet the require21 ments of a solicitation for commercial items may be offered

22 under such a solicitation, but only in a case in which the

23 modifications—

24 ‘‘(A) are necessary to comply with the Govern25 ment’s solicitation requirements; and
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1 ‘‘(B) do not significantly alter the function or es2 sential physical characteristics of the items to be sup3 plied.

4 ‘‘(3) The policies, procedures, solicitation provisions,

5 and contract clauses applicable to commercial items under

6 this chapter also shall apply to nondevelopmental items fur7 nished by an existing or prior source that is permitted to

8 participate in a competition conducted under this title.

9 ‘‘(d) PRELIMINARY MARKET RESEARCH.—(1) The

10 head of an executive agency shall conduct market research

11 appropriate to the circumstances—

12 ‘‘(A) before developing new specifications for a

13 procurement by that executive agency; and

14 ‘‘(B) before soliciting bids or proposals for a con15 tract in excess of the simplified acquisition threshold.

16 ‘‘(2) The head of an executive agency shall use the re17 sults of market research to determine whether there are com18 mercial items available that—

19 ‘‘(A) meet the requirements of the executive agen20 cy;

21 ‘‘(B) could be modified to meet such require22 ments; or

23 ‘‘(C) could meet such requirements if those re24 quirements were modified to a reasonable extent.’’.
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1 SEC. 7013. PRICING DOCUMENTATION FOR COMMERCIAL

2 ITEMS.

3 (a) IN GENERAL.—Title III of the Federal Property

4 and Administrative Services Act of 1949 (41 U.S.C. 251

5 et seq.), as amended by section 7012, is further amended

6 by adding after section 315A the following new section:

7 ‘‘SEC. 315B. PRICING DOCUMENTATION FOR COMMERCIAL

8 ITEMS.

9 ‘‘(a) REQUIREMENT FOR DETERMINATION OF PRICE

10 REASONABLENESS.—(1) When the price of a commercial

11 item is based on adequate price competition or on estab12 lished catalog or market prices of items sold in sufficient

13 quantities to the general public, the contracting officer shall

14 presume that the price contained in the most advantageous

15 evaluated offer (price and all other factors considered) re16 ceived in response to a solicitation, or a price based on es17 tablished catalog or market prices, is fair and reasonable

18 unless the contracting officer has information that the price

19 is not fair and reasonable. Before the award of a contract

20 for which price is based on catalog or market prices, the

21 contracting officer shall make reasonable efforts to establish

22 the currency and accuracy of such prices.

23 ‘‘(2) When the price of a commercial item is not pre24 sumed fair and reasonable under paragraph (1), the con25 tracting officer shall use price analysis to determine wheth26 er the price is fair and reasonable.
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1 ‘‘(3) When required by the contracting officer before

2 award of a contract or contract definitization, the offeror

3 shall promptly furnish documentation, in the form regu4 larly maintained in commercial operations, adequate to

5 demonstrate the market price of the item or items or other6 wise needed to establish a fair and reasonable price. All doc7 umentation received from an offeror, if not otherwise in the

8 public domain and if requested by the offeror and marked

9 as proprietary, shall be treated by the Government as con10 fidential and exempt from disclosure to the extent permitted

11 by section 552 of title 5. In this paragraph, the term ‘con12 tract definitization’ means agreement to contractual terms,

13 specifications, and price.

14 ‘‘(4) In any case in which a contracting officer is able

15 to determine under paragraph (1) or (2) that a price is

16 reasonable, the procurement shall be exempt from section

17 304B of this title.

18 ‘‘(5) In any case in which a contracting officer is un19 able to determine under paragraph (1) or (2) that a price

20 is reasonable, the contracting officer may require cost or

21 pricing data under section 304B.

22 ‘‘(b) GOVERNMENT’S RIGHT TO AUDIT.—(1) The

23 United States shall have the right to audit all documenta24 tion provided by an offeror under subsection (a)(3) and all

25 books and records of the offeror directly relating to such doc-
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1 umentation, except that, if the offeror has made no represen2 tation as to the completeness of the documentation supplied,

3 the United States shall have no right to audit for complete4 ness. When contract price is established under this section,

5 the United States shall have no audit rights other than those

6 set out in this subsection.

7 ‘‘(2) The right under this subsection shall expire—

8 ‘‘(A) one year after the date of commencement of

9 performance of the contract, or one year after the date

10 of commencement of performance of the modification

11 of the contract, with respect to which the information

12 was provided; or

13 ‘‘(B) on such other date agreed upon by the par14 ties at the time of contract award or contract

15 definitization.’’.

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) ADDITIONAL EXCEPTIONS REGARDING COMMER21 CIAL ITEMS.—For provisions relating to additional excep22 tions for procurements of commercial items, see section

23 315B of this title.’’.
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1 SEC. 7014. REGULATIONS ON 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 7013, is further amended by adding after section

6 315B the following new section:

7 ‘‘SEC. 315C. REGULATIONS ON ACQUISITION OF COMMER8 CIAL ITEMS.

9 ‘‘(a) IN GENERAL.—The Administrator for Federal

10 Procurement Policy shall prescribe regulations to imple11 ment sections 315 through 315E. The regulations shall in12 clude provisions implementing the preference for commer13 cial items set out in section 315A.

14 ‘‘(b) TERMS AND CONDITIONS.—The regulations pre15 scribed under subsection (a) shall contain a set or sets of

16 terms and conditions to be included in contracts for the ac17 quisition of commercial end items. Such terms and condi18 tions shall, to the maximum extent practicable, include only

19 those contract clauses that are determined by the agency

20 head to be—

21 ‘‘(1) required to implement provisions of law ap22 plicable to commercial item acquisitions; or

23 ‘‘(2) consistent with standard commercial prac24 tice.

25 ‘‘(c) TERMS AND CONDITIONS FOR COMPONENTS.—

26 Such regulations shall provide that a prime contractor fur-
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1 nishing commercial items or items other than commercial

2 items as items or components shall not be required to apply

3 to any of its divisions, subsidiaries, or affiliates or any of

4 its subcontractors or suppliers that are furnishing commer5 cial items as components any clause, term, or condition ex6 cept those determined by the head of the agency to be—

7 ‘‘(1) required to implement provisions of law ap8 plicable to subcontractors furnishing commercial

9 items; or

10 ‘‘(2) determined to be consistent with standard

11 commercial practice.

12 ‘‘(d) MARKET ACCEPTANCE.—The regulations pre13 scribed under subsection (a) shall provide that, under ap14 propriate conditions, the agency head may require an

15 offeror to demonstrate, as a condition for being considered

16 responsive, that the items offered meet, among other criteria,

17 market acceptance criteria, unless such item has been satis18 factorily supplied to an executive agency under current or

19 recent contracts for the same or similar requirements.

20 ‘‘(e) USE OF FIXED PRICE CONTRACTS.—The regula21 tions prescribed under subsection (a) shall include a re22 quirement that firm, fixed price contracts, or fixed price

23 contracts with economic price adjustment provisions, be

24 used for the acquisition of commercial items and compo25 nents.
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1 ‘‘(f) TERM OF CONTRACTS.—The regulations pre2 scribed under subsection (a) shall provide that, to the extent

3 practicable, contracts for acquisition of commercial items

4 shall not require contract performance for a term longer

5 than customary industry practice for the item being ac6 quired. A contracting officer may include in a contract pro7 visions for economic price adjustment if an extended period

8 of performance under the contract cannot be avoided.

9 ‘‘(g) CONTRACT QUALITY REQUIREMENTS.—The regu10 lations prescribed under subsection (a) shall include provi11 sions that—

12 ‘‘(1) permit, to the maximum extent practicable,

13 a contractor under a commercial items acquisition to

14 use the existing quality assurance system of the con15 tractor as a substitute for compliance with an other16 wise applicable requirement for the Government to in17 spect or test the commercial items before the contrac18 tor’s tender of those items for acceptance by the Gov19 ernment;

20 ‘‘(2) require that, to the maximum extent prac21 ticable, the executive agency take advantage of war22 ranties (including extended warranties) offered by

23 offerors of commercial items and use such warranties

24 for the repair and replacement of commercial items;

25 and
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1 ‘‘(3) set forth guidance regarding the use of past

2 performance of commercial items and sources as a

3 factor in contract award decisions.’’.

4 SEC. 7015. PRINCIPLE OF CONSTRUCTION WITH FUTURE

5 LAWS.

6 Title III of the Federal Property and Administrative

7 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

8 by section 7014, is further amended by adding after section

9 315C the following new section:

10 ‘‘SEC. 315D. PRINCIPLE OF CONSTRUCTION WITH FUTURE

11 LAWS.

12 ‘‘A provision of law enacted after the date of the enact13 ment of the Federal Acquisition Improvement Act of 1994

14 may not be construed as modifying or superseding any pro15 vision of sections 315 through 315E unless that provision

16 of law specifically refers to this section and specifically

17 states that such provision of law modifies or supersedes such

18 provision of those sections.’’.

19 SEC. 7016. INAPPLICABILITY OF CERTAIN PROVISIONS OF

20 LAW.

21 Title III of the Federal Property and Administrative

22 Services Act of 1949 (41 U.S.C. 251 et seq.), as amended

23 by section 7015, is further amended by adding after section

24 315D the following new section:
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1 ‘‘SEC. 315E. INAPPLICABILITY OF CERTAIN PROVISIONS OF

2 LAW.

3 ‘‘(a) PROVISIONS INAPPLICABLE TO PRIME CONTRAC4 TORS.—Procurements of commercial items shall not be sub5 ject to the following provisions of law (or regulations pre6 scribed under such provisions):

7 ‘‘(1) Section 303G of this Act (relating to prohi8 bition on limitation of subcontractor direct sales).

9 ‘‘(2) Section 304(a) of this Act (relating to pro10 hibition on contingent fees).

11 ‘‘(3) Section 26 of the Office of Federal Procure12 ment Policy Act (41 U.S.C. 422) (relating to cost ac13 counting standards board).

14 ‘‘(4) Section 27(e) of the Office of Federal Pro15 curement Policy Act (41 U.S.C. 423(e)) (relating to

16 procurement integrity).

17 ‘‘(5) The Drug-Free Workplace Act of 1988 (sub18 title D of title V of Public Law 100–690; 41 U.S.C.

19 701 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) The Act of March 3, 1933, commonly

4 referred to as the ‘Buy American Act’ (41 U.S.C.

5 10a–10c).

6 ‘‘(2) COVERED ENTITIES.—Paragraph (1) ap7 plies to each of the following:

8 ‘‘(A) Any division, subsidiary, or affiliate

9 of a prime contractor (other than the division,

10 subsidiary, or affiliate that is contracting with

11 the Government under the prime contract) or of

12 a subcontractor of a prime contractor, if such di13 vision, subsidiary, or affiliate is furnishing a

14 commercial item to the prime contractor or sub15 contractor for purposes of carrying out the prime

16 contract or subcontract.

17 ‘‘(B) Any subcontractor or supplier of a

18 prime contractor, if the subcontractor or supplier

19 is furnishing a commercial item to the prime

20 contractor for purposes of carrying out the prime

21 contract.

22 ‘‘(c) DEFINITION.—In this section, the term ‘prime

23 contractor’ means a person under contract directly with the

24 Federal Government, other than the Department of De25 fense.’’.
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1 SEC. 7017. 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), as

8 amended by section 4042(a), is further amended by adding

9 at the end the following new subsection:

10 ‘‘(d) An agreement between the contractor in a con11 tract for the acquisition of commercial items and a sub12 contractor under such contract that restricts sales by such

13 subcontractor directly to persons other than the contractor

14 may not be considered to unreasonably restrict sales by that

15 subcontractor to the United States in violation of the provi16 sion included in such contract pursuant to subsection (a)

17 if the agreement does not result in the Federal Government

18 being treated differently with regard to the restriction than

19 any other prospective purchaser of such commercial items

20 from that subcontractor.’’.

21 (b) INAPPLICABILITY OF REQUIREMENT FOR CON22 TRACT CLAUSE REGARDING CONTINGENT FEES.—Section

23 304(a) of the Federal Property and Administrative Services

24 Act of 1949 (41 U.S.C. 254(a)), as amended by section

25 4042(b), is further amended by inserting before the period

26 at the end of the sentence added by section 4042(b) the fol-
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1 lowing: ‘‘or to a contract for the acquisition of commercial

2 items’’.

3 Subtitle C—Acquisitions Generally

4 SEC. 7021. CONFORMING AMENDMENT RELATING TO INAP5 PLICABILITY OF CERTAIN PROVISIONS OF

6 LAW.

7 Section 5152 of the Drug-Free Workplace Act of 1988

8 (subtitle D of title V of Public Law 100–690; 41 U.S.C.

9 701 et seq.), as amended by section 4054, is further amend10 ed by inserting after the matter inserted by such section

11 4057 the following: ‘‘, other than a contract for the procure12 ment of commercial items (as defined, as applicable, in sec13 tion 315 of the Federal Property and Administrative Serv14 ices Act of 1949 or section 2281 of title 10, United States

15 Code),’’.

16 SEC. 7022. FLEXIBLE DEADLINES FOR SUBMISSION OF OF17 FERS OF COMMERCIAL ITEMS.

18 Section 18(a) of the Office of Federal Procurement Pol19 icy Act (41 U.S.C. 416(a)) is amended in paragraph (4)

20 (as added by section 4013(b))—

21 (1) by inserting ‘‘(A)’’ after ‘‘(4)’’; and

22 (2) by adding at the end the following new sub23 paragraph:

24 ‘‘(B) The requirements of paragraph (3)(B) shall not

25 apply to bids or proposals for contracts for the purchase
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1 of commercial items, as defined in section 4(12) of this Act.

2 The Administrator shall promulgate regulations establish3 ing appropriate time limits (but not less than 5 working

4 days) for the submission of such bids or proposals in re5 sponse to the notice required by paragraph (1)(A).’’.

6 SEC. 7023. ADDITIONAL RESPONSIBILITIES FOR ADVO7 CATES FOR COMPETITION.

8 Section 20(c) of the Office of Federal Procurement Pol9 icy Act (41 U.S.C. 418(c)) is amended to read as follows:

10 ‘‘(c) The advocate for competition for each procuring

11 activity shall be responsible for promoting full and open

12 competition, promoting the acquisition of commercial items

13 and other nondevelopmental items, and challenging barriers

14 to such acquisition, including such barriers as unneces15 sarily restrictive statements of need, unnecessarily detailed

16 specifications, and unnecessarily burdensome contract

17 clauses.’’.

18 SEC. 7024. PROVISIONS NOT AFFECTED.

19 Nothing in this title shall be construed as modifying

20 or superseding, or intending to impair or restrict authori21 ties or responsibilities under, any of the following provi22 sions of law:

23 (1) Section 2323 of title 10, United States Code.

24 (2) Section 8(a) of the Small Business Act (15

25 U.S.C. 637(a)).
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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 111 of the Federal Property and Ad6 ministrative Services Act of 1949 (40 U.S.C. 759),

7 popularly referred to as the ‘‘Brooks Automatic Data

8 Processing Act’’.

9 (5) The Act of June 25, 1938 (41 U.S.C. 46–

10 48c), that was revised and reenacted in the Act of

11 June 23, 1971 (85 Stat. 77), popularly referred to as

12 the ‘‘Javits-Wagner-O’Day Act’’.

13 SEC. 7025. COMPTROLLER GENERAL REVIEW OF FEDERAL

14 GOVERNMENT USE OF MARKET RESEARCH.

15 (a) REPORT REQUIRED.—Not later than two years

16 after the date of the enactment of this Act, the Comptroller

17 General of the United States shall submit to the Congress

18 a report on the use of market research by the Federal Gov19 ernment in support of the procurement of commercial items

20 and nondevelopmental items.

21 (b) CONTENT OF REPORT.—The report shall include

22 the following:

23 (1) A review of existing Federal Government

24 market research efforts to gather data concerning

25 commercial and other nondevelopmental items.
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1 (2) A review of the feasibility of creating a Gov2 ernment-wide data base for storing, retrieving, and

3 analyzing market data, including use of existing Fed4 eral Government resources.

5 (3) Any recommendations for changes in law or

6 regulations that the Comptroller General considers

7 appropriate.

8 TITLE VIII—MISCELLANEOUS

9 PROVISIONS

10 SEC. 8001. EDUCATION AND TRAINING.

11 Section 6(d)(5) of the Office of Federal Procurement

12 Policy Act (41 U.S.C. 405(d)(4)) is amended—

13 (1) by striking out ‘‘and’’ at the end of subpara14 graph (A);

15 (2) by striking out the semicolon at the end of

16 subparagraph (B) and inserting in lieu thereof ‘‘;

17 and’’; and

18 (3) by adding at the end the following new sub19 paragraph:

20 ‘‘(C) establish policies and procedures for

21 the establishment and implementation of edu22 cation and training programs authorized by this

23 Act, including the establishment and implemen24 tation of training, in conjunction with the Gen25 eral Services Administration, for critical pro-
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1 curement personnel designed to increase the par2 ticipation of small business concerns owned and

3 controlled by socially and economically dis4 advantaged individuals, women, and other mi5 norities in procurement activities conducted by

6 an executive agency.’’.

7 SEC. 8002. DEPARTMENT OF DEFENSE ACQUISITION OF IN8 TELLECTUAL PROPERTY RIGHTS.

9 Section 2386 of title 10, United States Code, is amend10 ed by striking out paragraphs (3) and (4) and inserting

11 in lieu thereof the following:

12 ‘‘(3) Technical data and computer software.

13 ‘‘(4) Releases for past infringement of patents or

14 copyrights or for unauthorized use of technical data

15 or computer software.’’.

16 SEC. 8003. COOPERATIVE PURCHASING.

17 Section 201(b) of the Federal Property and Adminis18 trative Services Act of 1949 (40 U.S.C. 481(b)) is amended

19 to read as follows:

20 ‘‘(b)(1) The Administrator may provide any of the

21 services specified in subsection (a) of this section to any

22 other Federal agency or mixed ownership corporation (as

23 defined in chapter 91 of title 31, United States Code).
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1 ‘‘(2) The Administrator may provide for the utiliza2 tion of Federal supply schedules or other schedule contracts

3 by any of the following entities upon their request:

4 ‘‘(A) The various States and their political sub5 divisions, including local governments, or any depart6 ment or agency thereof.

7 ‘‘(B) The District of Columbia and the Common8 wealth of Puerto Rico.

9 ‘‘(C) Indian tribal governments.

10 ‘‘(3) The authorization provided in this subsection

11 shall not be construed to allow ordering of existing stock

12 or inventory by the entities listed in paragraph (2) from

13 federally owned and operated, or federally owned and con14 tractor-operated, supply depots, warehouses, or similar fa15 cilities.’’.

16 SEC. 8004. SENSE OF CONGRESS ON NEGOTIATED RULE17 MAKING.

18 (a) FINDINGS.—The Congress finds the following:

19 (1) The use of negotiated rulemaking or similar

20 policy discussion group techniques is an appropriate

21 tool for—

22 (A) fostering effective implementation of,

23 and compliance with, laws and regulations;

24 (B) avoiding litigation; and
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1 (C) achieving more productive and equitable

2 relationships between the Federal Government

3 and the regulated segments of the private sector.

4 (2) The use of negotiated rulemaking or similar

5 techniques in Federal procurement regulations could

6 be appropriate given the extreme complexity and in7 tricate interactions between buyer and seller in Fed8 eral procurements.

9 (b) SENSE OF CONGRESS.—It is the sense of Congress

10 that, in prescribing acquisition regulations, the Federal Ac11 quisition Regulatory Council should consider using nego12 tiated rulemaking procedures in accordance with sections

13 561 through 570 of title 5, United States Code, or similar

14 techniques intended to achieve the benefits described in sub15 section (a)(1).

16 SEC. 8005. EXTENSION OF DEFENSE ACQUISITION

17 WORKFORCE POLICIES GOVERNMENT-WIDE.

18 The Office of Federal Procurement Policy Act (41

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

20 following new section:

21 ‘‘SEC. 30. MANAGEMENT POLICIES.

22 ‘‘(a) REQUIREMENT FOR GOVERNMENT-WIDE

23 WORKFORCE POLICIES.—The Administrator for Federal

24 Procurement Policy shall extend Government-wide the de25 fense acquisition workforce policies contained in chapter 87
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1 of title 10, United States Code. In extending policies Gov2 ernment-wide, the Administrator may modify such policies

3 as necessary to recognize differences between and among de4 fense and nondefense departments and agencies.

5 ‘‘(b) DESIGNATION OF ACQUISITION POSITIONS.—After

6 consultation with the heads of agencies, the Administrator

7 shall establish policies and procedures for agency heads to

8 designate acquisition positions and to manage employees

9 serving in the designated acquisition positions. Such poli10 cies and procedures—

11 ‘‘(1) shall allow agency heads to designate spe12 cific positions or categories of positions as acquisition

13 positions; and

14 ‘‘(2) shall address accession, education, training,

15 and career development of employees serving in acqui16 sition positions.

17 ‘‘(c) SMALL AGENCY NEEDS.—In carrying out this sec18 tion, the Administrator shall take due consideration of the

19 needs of small agencies in formulating and implementing

20 policy and programs under this section to ensure that the

21 benefits of such policy and programs accrue to small agen22 cies.

23 ‘‘(d) UNIFORMITY.—(1) Subject to paragraph (2), the

24 Administrator shall ensure that, to the maximum extent

25 practicable, the acquisition workforce policies and proce-
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1 dures developed pursuant to this section are uniform in

2 their implementation throughout the executive agencies.

3 ‘‘(2) With respect to acquisition workforce policies and

4 procedures, the Department of Defense shall be subject only

5 to the requirements of chapter 87 of title 10, United States

6 Code.

7 ‘‘(e) FEDERAL ACQUISITION INSTITUTE.—Subject to

8 the authority, direction and control of the Administrator,

9 the Director of the Federal Acquisition Institute shall en10 sure that the policies established under this section are im11 plemented throughout the Federal Government. The Admin12 istrator for General Services, with the concurrence of the

13 Administrator for Federal Procurement Policy, may estab14 lish such additional positions in the Federal Acquisition

15 Institute as may be necessary to carry out the preceding

16 sentence.

17 ‘‘(f) REGULATIONS.—The Administrator shall pre18 scribe such regulations as may be necessary to carry out

19 the purposes of this section.’’.

20 SEC. 8006. VENDOR AND EMPLOYEE EXCELLENCE AWARDS.

21 Section 6(d) of the Office of Federal Procurement Pol22 icy Act (41 U.S.C. 405(d)) is amended—

23 (1) by striking out the period at the end of para24 graph (10) (as redesignated by section 4011(b)(2))

25 and inserting in lieu thereof a semicolon; and
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1 (2) by adding at the end the following new para2 graphs:

3 ‘‘(11) providing for a Government-wide award to

4 recognize and promote vendor excellence; and

5 ‘‘(12) providing for a Government-wide award to

6 recognize and promote excellence in officers and em7 ployees of the Federal Government serving in procure8 ment-related positions.’’.

9 SEC. 8007. DEPARTMENT OF DEFENSE REVIEW OF ANTI10 TRUST CASES WITH NATIONAL SECURITY IM11 PLICATIONS.

12 (a) IN GENERAL.—Subchapter II of chapter 148 of

13 title 10, United States Code, is amended by adding at the

14 end the following new section:

15 ‘‘§ 2508. Antitrust cases with national security impli16 cations: Secretary of Defense review

17 ‘‘(a) REVIEW.—The Secretary of Defense shall conduct

18 a review of any proposed acquisition of a business concern

19 that is a critical United States defense supplier with respect

20 to which the Attorney General or the Federal Trade Com21 mission receives notice under the antitrust laws. In con22 ducting such review, the Secretary shall assess the likely ef23 fect of the proposed acquisition (if carried out) on the policy

24 objectives for the national technology and industrial base

25 (as set forth in section 2501(a) of this title) and on such
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1 other considerations relating to national security as the

2 Secretary considers appropriate.

3 ‘‘(b) COMMUNICATION OF VIEWS OF SECRETARY.—In

4 any case in which the Secretary determines, as the result

5 of a review and assessment under subsection (a), that a pro6 posed acquisition is likely to have an appreciable effect

7 (whether positive or negative) on the policy objectives for

8 the national technology and industrial base or on other con9 siderations relevant to national security (as determined by

10 the Secretary), the Secretary shall immediately commu11 nicate that determination, in writing, to the Attorney Gen12 eral and the Federal Trade Commission. The Secretary

13 shall include in such communication the Secretary’s evalua14 tion concerning the proposed acquisition.

15 ‘‘(c) DEFINITION.—In this section, the term ‘critical

16 United States defense supplier’ means a company organized

17 under the laws of the United States that is—

18 ‘‘(1) a contractor or critical subcontractor for a

19 major system, as defined in section 2302(9) of this

20 title;

21 ‘‘(2) a contractor for a contract awarded to a

22 particular source pursuant to paragraph (3) of sec23 tion 2304(c) of this title for the reasons described in

24 clause (A) of that paragraph; or
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1 ‘‘(3) in such other category as the Secretary of

2 Defense may prescribe by regulation as being critical

3 to the national technology and industrial base.’’.

4 (b) CLERICAL AMENDMENT.—The table of sections at

5 the beginning of such subchapter is amended by adding at

6 the end the following new item:

‘‘2508. Antitrust cases with national security implications: Secretary of Defense

review.’’.

7 SEC. 8008. TECHNICAL AND CLERICAL AMENDMENTS.

8 (a) TABLE OF CONTENTS AMENDMENTS.—

9 (1) OFFICE OF FEDERAL PROCUREMENT POLICY

10 ACT.—Section 1 of the Office of Federal Procurement

11 Policy Act (41 U.S.C. 401 note) is amended to read

12 as follows:

13 ‘‘SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

14 ‘‘(a) SHORT TITLE.—This Act may be cited as the ‘Of15 fice of Federal Procurement Policy Act’.

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

17 this Act is as follows:

‘‘Sec. 1. Short title; table of contents.

‘‘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.
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‘‘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. Federal acquisition computer network (FACNET).

‘‘Sec. 30. Management policies.’’.

1 (2) FEDERAL PROPERTY AND ADMINISTRATIVE

2 SERVICES ACT OF 1949.—Section 1 of the Federal

3 Property and Administrative Services Act of 1949 (41

4 U.S.C. 471 et seq.) is amended to read as follows:

5 ‘‘SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

7 ‘Federal Property and Administrative Services Act of 1949’.

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

9 this Act is as follows:

‘‘Sec. 1. Short title; table of contents.

‘‘Sec. 2. Declaration of policy.

‘‘Sec. 3. Definitions.

‘‘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.
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‘‘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. 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.

‘‘Sec. 314. Undefinitized contractual actions: restrictions.

‘‘Sec. 315. Definitions relating to procurement of commercial items.

‘‘Sec. 315A. Preference for acquisition of commercial items and other

nondevelopmental items.

‘‘Sec. 315B. Pricing documentation for commercial items.

‘‘Sec. 315C. Regulations on acquisition of commercial items.

‘‘Sec. 315D. Principle of construction with future laws.

‘‘Sec. 315E. Inapplicability of certain provisions of law.

‘‘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.
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‘‘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.’’.

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.

8 (2) FEDERAL PROPERTY AND ADMINISTRATIVE

9 SERVICES ACT OF 1949.—The Federal Property and

10 Administrative Services Act of 1949 (41 U.S.C. 471

11 et seq.) is amended so that the section designation

12 and section heading of each section of such Act is in

13 the same form and typeface as the section designation

14 and heading of this section.
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1 (c) REPEALS OF EXECUTED PROVISIONS.—The Office

2 of Federal Procurement Policy Act (41 U.S.C. 401 et seq.)

3 is amended—

4 (1) by striking out section 13; and

5 (2) by striking out the first section 15.

6 (d) CROSS REFERENCE CORRECTIONS.—Section 3552

7 of title 31, United States Code, is amended—

8 (1) by striking out ‘‘section 111(h)’’ and insert9 ing in lieu thereof ‘‘section 111(f)’’; and

10 (2) by striking out ‘‘759(h)’’ and inserting in

11 lieu thereof ‘‘759(f)’’.

12 (e) CONSISTENCY OF TERMINOLOGY WITH CUSTOMARY

13 USAGE.—Section 304(b) of the Federal Property and Ad14 ministrative Services Act of 1949 (41 U.S.C. 254(b)) is

15 amended by striking out ‘‘per centum’’ each place it ap16 pears and inserting in lieu thereof ‘‘percent’’.

17 TITLE IX—EFFECTIVE DATES

18 AND REGULATIONS

19 SEC. 9001. EFFECTIVE DATES.

20 (a) IN GENERAL.—Except as provided in subsection

21 (b), this Act and the amendments made by this Act shall

22 apply with respect to any contract for which a solicitation

23 for bid or proposal is issued after—
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1 (1) 30 days have expired after the issuance in

2 final form of revisions to the Federal Acquisition Reg3 ulation pursuant to section 10002; or

4 (2) 180 days have expired after the date of the

5 enactment of this Act;

6 whichever is earlier.

7 (b) SPECIFIC EFFECTIVE DATES.—(1) Titles III and

8 VI of this Act, and the amendments made by such titles,

9 shall take effect on the date of the enactment of this Act.

10 (2) Subtitle D of title I of this Act, and the amend11 ments made by such subtitle (relating to procurement pro12 tests), shall apply with respect to any protest filed after the

13 expiration of the 90-day period beginning on the date of

14 the enactment of this Act.

15 SEC. 9002. REGULATIONS.

16 Not later than 150 days after the date of the enactment

17 of this Act, the Federal Acquisition Regulation (referred to

18 in section 25(c) of the Office of Federal Procurement Policy

19 Act (41 U.S.C. 421(c))) shall be revised, in final form, to

20 implement this Act and the amendments made by this Act.

Amend the title so as to read: ‘‘A bill to amend title

10, United States Code, the Federal Property and Administrative Services Act of 1949, and the Office of Federal

Procurement Policy Act to improve the Federal acquisition

process, and for other purposes.’’.

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Union Calendar No. 303

103D CONGRESS

2D SESSION H. R. 2238

[Report No. 103–545, Parts I and II]

A BILL

To amend laws relating to Federal procurement, to

1949, and for other purposes.eral Property and Administrative Services Act ofauthorize functions and activities under the FedJUNE 17, 1994

Reported from the Committee on Armed Services with

to be printedWhole House on the State of the Union, and orderedamendments, committed to the Committee of the