I
103D CONGRESS
2D SESSION
H. R. 4328
To amend the Office of Federal Procurement Policy Act to reform the
Federal acquisition process, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 3, 1994
Mr. CONYERS (for himself and Mr. CLINGER) introduced the following bill;
which was referred to the Committee on Government Operations
A BILL
To amend the Office of Federal Procurement Policy Act
to reform the Federal acquisition process, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Federal Acquisition
Reform Act of 1994’’.
SEC. 2. TABLE OF CONTENTS.
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—COMPETITION REQUIREMENTS
Sec. 1051. Competition requirements.
PART II—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 costs and fees in agency settlement of protests.
Sec. 1067. Award of multiple contracts.
PART III—KINDS OF CONTRACTS
Sec. 1071. Agency head determination regarding use of cost type or incentive
contract.
Sec. 1072. Multiyear contracting authority.
Sec. 1073. Severable services contracts crossing fiscal years.
Sec. 1074. Economy Act purchases.
PART IV—MISCELLANEOUS
Sec. 1091. Policy regarding consideration of contractor past performance.
Sec. 1092. Repeal of requirement for annual report on competition.
Sec. 1093. Discouragement of nonstandard contract clauses.
Sec. 1094. Repeal of obsolete provision.
Subtitle B—Truth in Negotiations
Sec. 1251. Provisions to ensure uniform treatment of cost or pricing data.
Subtitle C—Procurement Protests
PART I—PROTESTS TO THE COMPTROLLER GENERAL
Sec. 1401. Protest defined.
Sec. 1402. Review of protests and effect on contracts pending decision.
Sec. 1403. Decisions on protests.
Sec. 1404. Regulations.
PART II—PROTESTS IN PROCUREMENTS OF AUTOMATIC DATA PROCESSING
Sec. 1431. Revocation of delegations of procurement authority.
Sec. 1432. Authority of the General Services Administration Board of Contract
Appeals.
Sec. 1433. Periods for certain actions.
Sec. 1434. Dismissals of protests.
Sec. 1435. Award of costs.
Sec. 1436. Dismissal agreements.
Sec. 1437. Matters to be covered in regulations.
Sec. 1438. Definitions.
Sec. 1439. Oversight of acquisition of automatic data processing equipment by
Federal agencies.
Subtitle D—Definitions and Other Matters
Sec. 1551. Definitions.
Sec. 1552. Delegation of procurement functions.
Sec. 1553. Determinations and decisions.
Sec. 1554. Research, development, and production costs.
Sec. 1555. Repeals.
Sec. 1556. Cooperative purchasing.
TITLE II—CONTRACT ADMINISTRATION
Subtitle A—Contract Payment
Sec. 2051. Contract financing.
Subtitle B—Cost Principles
Sec. 2151. Allowable contract costs.
Sec. 2152. Travel expenses of Government contractors.
Subtitle C—Audit and Access to Records
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.
TITLE III—SIMPLIFIED ACQUISITION THRESHOLD AND
SOCIOECONOMIC, SMALL BUSINESS, AND MISCELLANEOUS LAWS
Subtitle A—Simplified Acquisition Threshold
PART I—ESTABLISHMENT OF THRESHOLD
Sec. 3001. Establishment of simplified acquisition threshold.
Sec. 3002. Federal acquisition computer network.
Sec. 3003. Implementation in executive agencies.
PART II—SIMPLIFICATION OF PROCEDURES
Sec. 3011. Simplified acquisition procedures.
Sec. 3012. Small business provisions.
Sec. 3013. Procedures for purchases below micro-purchase threshold.
Sec. 3014. Procurement notice.
Sec. 3015. Small business reservation.
Sec. 3016. GAO test and report on performance of simplified acquisition
threshold.
PART III—INAPPLICABILITY OF LAWS TO, AND WAIVER OF LAWS FOR,
ACQUISITIONS NOT IN EXCESS OF SIMPLIFIED ACQUISITION THRESHOLD
Sec. 3021. Inapplicability of future enacted procurement laws to contracts not
exceeding the simplified acquisition threshold.
Sec. 3022. Authority to waive procurement laws for contracts not exceeding the
simplified acquisition threshold.
PART IV—REVISION OF REGULATIONS
Sec. 3081. Revision required.
Subtitle B—Socioeconomic and Small Business Laws
Sec. 3101. Payment protections for subcontractors and suppliers.
Sec. 3102. Small business procurement advisory council.
Subtitle C—Miscellaneous Acquisition Laws
Sec. 3151. Restriction on use of noncompetitive procedures for procurement
from a specified source.
Sec. 3152. Repeal of obsolete provision.
TITLE IV—STANDARDS OF CONDUCT
Sec. 4001. Contracting functions performed by Federal personnel.
Sec. 4002. Repeal of executed requirement for study and report.
Sec. 4003. Interests of Members of Congress.
Sec. 4004. Waiting period for significant changes proposed for acquisition regu-
lations.
TITLE V—COMMERCIAL ITEMS
Sec. 5001. Definitions.
Sec. 5002. Preference 
for 
acquisition 
of 
commercial 
items 
and
nondevelopmental items.
Sec. 5003. Acquisition of commercial items.
Sec. 5004. Principle of construction with future laws.
Sec. 5005. Authority to waive certain procurement laws for contracts for com-
mercial items.
Sec. 5006. Flexible deadlines for submission of offers of commercial items.
Sec. 5007. Additional responsibilities for Advocates for Competition.
Sec. 5008. Provisions not affected.
Sec. 5009. Comptroller General review of Federal government use of market re-
search.
TITLE VI—MISCELLANEOUS PROVISIONS
Sec. 6001. Test program.
Sec. 6002. Study of participation by certain small businesses in Federal pro-
curement.
Sec. 6003. Furtherance of government-wide contract goal for small disadvan-
taged businesses and certain institutions of higher education.
Sec. 6004. Education and training.
Sec. 6005. Sense of Congress on negotiated rulemaking.
Sec. 6006. Vendor and employee excellence awards.
Sec. 6007. Technical and clerical amendments.
TITLE VII—EFFECTIVE DATES AND REGULATIONS
Sec. 7001. Effective dates.
Sec. 7002. Regulations.
Sec. 7003. Evaluation by the Comptroller General.
Sec. 7004. Data collection through the Federal procurement data system.
TITLE I—CONTRACT FORMATION
Subtitle A—Competition Statutes
PART I—COMPETITION REQUIREMENTS
SEC. 1051. COMPETITION REQUIREMENTS.
The Office of Federal Procurement Policy Act (41
U.S.C. 401 et seq.) is amended by adding at the end the
following new section:
‘‘SEC. 29. COMPETITION REQUIREMENTS.
‘‘(a)(1) Except as provided in subsections (b), (c),
and (g) and except in the case of procurement procedures
otherwise expressly authorized by statute, an executive
agency in conducting a procurement for property or serv-
ices—
‘‘(A) shall obtain full and open competition
through the use of competitive procedures in accord-
ance with the requirements of this title and the Fed-
eral Acquisition Regulation; and
‘‘(B) shall use the competitive procedure or
combination of competitive procedures that is best
suited under the circumstances of the procurement.
‘‘(2) In determining the competitive procedures ap-
propriate under the circumstances, an executive agency—
‘‘(A) shall solicit sealed bids if—
‘‘(i) time permits the solicitation, submis-
sion, and evaluation of sealed bids;
‘‘(ii) the award will be made on the basis
of price and other price-related factors;
‘‘(iii) it is not necessary to conduct discus-
sions with the responding sources about their
bids; and
‘‘(iv) there is a reasonable expectation of
receiving more than one sealed bid; and
‘‘(B) shall request competitive proposals if
sealed bids are not appropriate under clause (A).
‘‘(b)(1) An executive agency may provide for the pro-
curement of property or services covered by this section
using competitive procedures but excluding a particular
source in order to establish or maintain any alternative
source or sources of supply for that property or service
if the agency head determines that to do so—
‘‘(A) would increase or maintain competition
and would likely result in reduced overall costs for
such procurement, or for any anticipated procure-
ment, of such property or services;
‘‘(B) would be in the interest of national de-
fense in having a facility (or a producer, manufac-
turer, or other supplier) available for furnishing the
property or service in case of a national emergency
or industrial mobilization;
‘‘(C) would be in the interest of national de-
fense in establishing or maintaining an essential en-
gineering, research, or development capability to be
provided by an educational or other nonprofit insti-
tution or a federally funded research and develop-
ment center;
‘‘(D) would ensure the continuous availability of
a reliable source of supply of such property or serv-
ice;
‘‘(E) would satisfy projected needs for such
property or service determined on the basis of a his-
tory of high demand for the property or service; or
‘‘(F) in the case of medical supplies, safety sup-
plies, or emergency supplies, would satisfy a critical
need for such supplies.
‘‘(2) The determination required of the agency head
in paragraph (1) may not be made for a class of purchases
or contracts.
‘‘(3) An executive agency may provide for the pro-
curement of property or services covered by this section
using competitive procedures, but excluding other than
small business concerns in furtherance of sections 9 and
15 of the Small Business Act (15 U.S.C. 639; 644).
‘‘(4) A contract awarded pursuant to the competitive
procedures referred to in paragraphs (1) and (3) shall not
be subject to the justification and approval required by
subsection (f)(1).
‘‘(c) An executive agency may use procedures other
than competitive procedures only when—
‘‘(1) the property or services needed by the ex-
ecutive agency are available from only one respon-
sible source and no other type of property or services
will satisfy the needs of the executive agency;
‘‘(2) the executive agency’s need for the prop-
erty or services is of such an unusual and compelling
urgency that the Government would be seriously in-
jured unless the executive agency is permitted to
limit the number of sources from which it solicits
bids or proposals;
‘‘(3) it is necessary to award the contract to a
particular source or sources in order (A) to maintain
a facility, producer, manufacturer, or other supplier
available for furnishing property or services in case
of a national emergency or to achieve industrial mo-
bilization, or (B) to establish or maintain an essen-
tial engineering, research, or development capability
to be provided by an educational or other nonprofit
institution or a federally funded research and devel-
opment center;
‘‘(4) the terms of an international agreement or
treaty between the United States Government and a
foreign government or international organization, or
the written directions of a foreign government reim-
bursing the executive agency for the cost of the pro-
curement of the property or services for such gov-
ernment, have the effect of requiring the use of pro-
cedures other than competitive procedures;
‘‘(5) a statute expressly authorizes or requires
that the procurement be made through another exec-
utive agency or from a specified source, or the agen-
cy’s need is for a brand-name commercial item for
authorized resale;
‘‘(6) the disclosure of the executive agency’s
needs would compromise the national security unless
the agency is permitted to limit the number of
sources from which it solicits bids or proposals; or
‘‘(7) the head of the executive agency—
‘‘(A) determines that it is necessary in the
public interest to use procedures other than
competitive procedures in the particular pro-
curement concerned, and
‘‘(B) notifies the Congress in writing of
such determination not less than 30 days before
the award of the contract.
‘‘(d)(1) For the purposes of applying subsection
(c)(1)—
‘‘(A) in the case of a contract for property or
services to be awarded on the basis of acceptance of
an unsolicited research proposal, the property or
services shall be considered to be available from only
one source if the source has submitted an unsolicited
research proposal that demonstrates a unique and
innovative concept the substance of which is not oth-
erwise available to the United States and does not
resemble the substance of a pending competitive pro-
curement; and
‘‘(B) in the case of a follow-on contract for the
continued development or production of a major sys-
tem or highly specialized equipment when it is likely
that award to a source other than the original
source would result in (i) substantial duplication of
cost to the Government which is not expected to be
recovered through competition, or (ii) unacceptable
delays in fulfilling the executive agency’s needs, such
property may be deemed to be available only from
the original source and may be procured through
procedures other than competitive procedures.
‘‘(2) The authority of the head of an executive agency
under subsection (c)(7) may not be delegated.
‘‘(e) An executive agency using procedures other than
competitive procedures to procure property or services by
reason of the application of subsection (c)(2) or (c)(6)
shall request offers from as many potential sources as is
practicable under the circumstances.
‘‘(f)(1) Except as provided in paragraph (2), an exec-
utive agency may not award a contract using procedures
other than competitive procedures unless—
‘‘(A) the contracting officer for the contract
justifies the use of such procedures in writing and
certifies the accuracy and completeness of the jus-
tification;
‘‘(B) the justification is approved—
‘‘(i) in the case of a contract for an
amount exceeding $100,000 (but equal to or
less than $1,000,000), by the competition advo-
cate for the procuring activity (without further
delegation) or by an official referred to in
clause (ii), (iii), or (iv);
‘‘(ii) in the case of a contract for an
amount exceeding $1,000,000 (but equal to or
less than $10,000,000), by the head of the pro-
curing activity or a delegate who, if a member
of the armed forces, is a general or flag officer
or, if a civilian; is serving in a position in grade
GS–16 or above under the General Schedule (or
in a comparable or higher position under an-
other schedule); or
‘‘(iii) in the case of a contract for an
amount exceeding $10,000,000, by the senior
procurement executive of the agency designated
pursuant to section 16(3) (without further dele-
gation); and
‘‘(C) any required notice has been published
with respect to such contract pursuant to section 18
and all bids or proposals received in response to
such notice have been considered by such executive
agency.
‘‘(2) In the case of a procurement permitted by sub-
section (c)(2), the justification and approval required by
paragraph (1) may be made after the contract is awarded.
The justification and approval required by paragraph (1)
is not required—
‘‘(A) when a statute expressly requires that the
procurement be made from a specified source;
‘‘(B) when the agency’s need is for a brand-
name commercial item for authorized resale;
‘‘(C) in the case of a procurement permitted by
subsection (c)(7); or
‘‘(D) in the case of a procurement conducted
under (i) the Act of June 25, 1938 (41 U.S.C. 46
et seq.), popularly referred to as the Wagner-O’Day
Act, or (ii) section 8(a) of the Small Business Act
(15 U.S.C. 637(a)).
‘‘(3) The justification required by paragraph (1)(A)
shall include—
‘‘(A) a description of the agency’s needs;
‘‘(B) an identification of the statutory exception
from the requirement to use competitive procedures
and a demonstration, based on the proposed contrac-
tor’s qualifications or the nature of the procurement,
of the reasons for using that exception;
‘‘(C) a determination that the anticipated cost
will be fair and reasonable;
‘‘(D) a description of the market survey con-
ducted or a statement of the reasons a market sur-
vey was not conducted;
‘‘(E) a listing of the sources, if any, that ex-
pressed in writing an interest in the procurement;
and
‘‘(F) a statement of the actions, if any, the
agency may take to remove or overcome a barrier to
competition before a subsequent procurement for
such needs.
‘‘(4) The justification required by paragraph (1)(A)
and any related information shall be made available for
inspection by the public consistent with the provisions of
section 552 of title 5, United States Code.
‘‘(5) In no case may an executive agency—
‘‘(A) enter into a contract for property or serv-
ices using procedures other than competitive proce-
dures on the basis of the lack of advance planning
or concerns related to the amount of funds available
to the agency for procurement functions; or
‘‘(B) procure property or services from another
executive agency unless such other executive agency
complies fully with the requirements of this title in
its procurement of such property or services.
The restriction set out in clause (B) is in addition to, and
not in lieu of any other restriction provided by law.
‘‘(g)(1) In order to promote efficiency and economy
in contracting and to avoid unnecessary burdens for agen-
cies and contractors, the Federal Acquisition Regulation
shall provide for special simplified procedures for small
purchases of property and services.
‘‘(2) For the purposes of this title, a small purchase
is a purchase or contract for an amount which does not
exceed the small purchase threshold.
‘‘(3) A proposed purchase or contract for an amount
above the small purchase threshold may not be divided
into several purchases or contracts for lesser amounts in
order to use the small purchase procedures required by
paragraph (1).
‘‘(4) In using small purchase procedures, an executive
agency shall promote competition to the maximum extent
practicable.
‘‘(5) In this subsection, the term ‘small purchase
threshold’ has the meaning given such term in section
4(11) of the Office of Federal Procurement Policy Act (41
U.S.C. 403(11).’’.
PART II—PLANNING, SOLICITATION,
EVALUATION, AND AWARD
SEC. 1061. SOLICITATION, EVALUATION, AND AWARD.
(a) CONTENT OF SOLICITATION.—The Office of Fed-
eral Procurement Policy Act (41 U.S.C. 401 et seq.), as
amended by section 1051, is further amended by adding
at the end the following new section:
‘‘SEC. 30. PLANNING AND SOLICITATION REQUIREMENTS.
‘‘(a)(1) In preparing for the procurement of property
or services, an executive agency shall—
‘‘(A) specify its needs and solicit bids or pro-
posals in a manner designed to achieve full and open
competition for the procurement;
‘‘(B) use advance procurement planning and
market research; and
‘‘(C) develop specifications in such manner as is
necessary to obtain full and open competition with
due regard to the nature of the property or services
to be acquired.
‘‘(2) Each solicitation under this title shall include
specifications which—
‘‘(A) consistent with the provisions of this title,
permit full and open competition; and
‘‘(B) include restrictive provisions or conditions
only to the extent necessary to satisfy the needs of
the executive agency or as authorized by law.
‘‘(3) For the purposes of paragraphs (1) and (2), the
type of specification included in a solicitation shall depend
on the nature of the needs of the executive agency and
the market available to satisfy such needs. Subject to such
needs, specifications may be stated in terms of—
‘‘(A) function, so that a variety of products or
services may qualify;
‘‘(B) performance, including specifications of
the range of acceptable characteristics or of the min-
imum acceptable standards; or
‘‘(C) design requirements.
‘‘(b) In addition to the specifications described in
subsection (a), each solicitation for sealed bids or competi-
tive proposals (other than for small purchases) shall at
a minimum include—
‘‘(1) a statement of—
‘‘(A) all significant factors and significant
subfactors (including cost or price, cost-related
or price-related factors and subfactors, and
noncost-related or nonprice-related factors and
subfactors) which the executive agency reason-
ably expects to consider in evaluating sealed
bids or competitive proposals; and
‘‘(B) the relative importance assigned to
each of those factors and subfactors; and
‘‘(2)(A) in the case of sealed bids—
‘‘(i) a statement that sealed bids will be
evaluated without discussions with the bidders;
and
‘‘(ii) the time and place for the opening of
the sealed bids; or
‘‘(B) in the case of competitive proposals—
‘‘(i) either a statement that the pro-
posals are intended to be evaluated with,
and award made after, discussions with the
offerors, or a statement that the proposals
are intended to be evaluated, and award
made, without discussions with the offerors
(other than discussions conducted for the
purpose of minor clarification) unless dis-
cussions are determined to be necessary;
and
‘‘(ii) the time and place for submission of
proposals.
‘‘(c)(1) In prescribing the evaluation factors to be in-
cluded in each solicitation for competitive proposals, an
agency head—
‘‘(A) shall clearly establish the relative impor-
tance assigned to the evaluation factors and
subfactors, including the quality of the product or
services to be provided (including technical capabil-
ity, management capability, prior experience, and
past performance of the offeror);
‘‘(B) shall include cost or price to the Federal
Government as an evaluation factor that must be
considered in the evaluation of proposals; and
‘‘(C) shall disclose to offerors whether all eval-
uation factors other than price or cost, when com-
bined, are—
‘‘(i) significantly more important than
price or cost;
‘‘(ii) approximately equal in importance to
price or cost; or
‘‘(iii) significantly less important than
price or cost.
‘‘(2) Nothing in this subsection prohibits an agency
from—
‘‘(A) providing additional information in a solic-
itation, including numeric weights for all evaluation
factors; or
‘‘(B) stating in a solicitation that award will be
made to the offeror that meets the solicitation’s
mandatory requirements at the lowest price or
cost.’’.
(b) EVALUATION AND AWARD.—The Office of Fed-
eral Procurement Policy Act (41 U.S.C. 401 et seq.), as
amended by subsection (a), is further amended by adding
at the end the following new section:
‘‘SEC. 31. EVALUATION AND AWARD.
‘‘(a) An executive agency shall evaluate sealed bids
and competitive proposals, and award a contract, based
solely on the factors specified in the solicitation.
‘‘(b) All sealed bids or competitive proposals received
in response to a solicitation may be rejected if the agency
head determines that such action is in the public interest.
‘‘(c) Sealed bids shall be opened publicly at the time
and place stated in the solicitation. The executive agency
shall evaluate the bids in accordance with subsection (a)
without discussions with the bidders and, except as pro-
vided in subsection (b), shall award a contract with rea-
sonable promptness to the responsible source whose bid
conforms to the solicitation and is most advantageous to
the United States, considering only price and the other
price-related factors included in the solicitation. The
award of a contract shall be made by transmitting written
notice of the award to the successful bidder.
‘‘(d)(1) An agency head shall evaluate competitive
proposals in accordance with subsection (a) and may
award a contract—
‘‘(A) after discussions with the offerors, pro-
vided that written or oral discussions have been con-
ducted with all responsible offerors who submit pro-
posals within the competitive range; or
‘‘(B) based on the proposals received and with-
out discussions with the offerors (other than discus-
sions conducted for the purpose of minor clarifica-
tion), provided that, as required by section
30(b)(2)(B)(i), the solicitation included a statement
that proposals are intended to be evaluated, and
award made, without discussions, unless discussions
are determined to be necessary.
‘‘(2) Except as otherwise provided in subsection (b),
the executive agency shall award a contract with reason-
able promptness to the responsible source whose proposal
is most advantageous to the United States, considering
only cost or price and the other factors included in the
solicitation. The executive agency shall award the contract
by transmitting written notice of the award to such source
and shall promptly notify all other offerors of the rejection
of their proposals.
‘‘(e) If the agency head considers that a bid or pro-
posal evidences a violation of the antitrust laws, such
agency head shall refer the bid or proposal to the Attorney
General for appropriate action.
‘‘(f)(1)(A) In preparing a solicitation for the award
of a development contract for a major system, the head
of an agency shall consider requiring in the solicitation
that an offeror include in its offer proposals described in
subparagraph (B). In determining whether to require such
proposals, the head of the agency shall give due consider-
ation to the purposes for which the system is being pro-
cured and the technology necessary to meet the system’s
required capabilities. If such proposals are required, the