SEC. 502. POST-AWARD DEBRIEFINGS.
(a) AMENDMENT
TO OFFICE
OF FEDERAL
PROCUREMENT POLICY ACT.—The Office of Fed-
eral Procurement Policy Act (41 U.S.C. et seq.)
is amended by adding at the end the following
new section:
‘‘SEC. 29. POST-AWARD DEBRIEFINGS.
‘‘(a) DEBRIEFING GUIDELINES.—The Federal
Acquisition Regulation shall be revised to in-
clude guidelines for the debriefing of unsuc-
cessful offerors for any contract for an
amount in excess of the small purchase
threshold which was awarded on a basis
other than price alone. Such guidelines shall
require that such a debriefing—
‘‘(1) shall occur if a written request
by an unsuccessful offeror for a contract
is submitted within 5 days after the date
of the award of the contract;
‘‘(2) shall be completed within 5 days
after the date of the submission of such a
request; and
‘‘(3) to the maximum extent prac-
ticable, shall include at least the follow-
ing:
‘‘(A) A detailed review of the
offeror’s proposal in relation to the
evaluation 
factors 
and 
subfactors
specified in the solicitation for the
contract, including identification of
any weaknesses and strengths of the
proposal, results of any past perform-
ance analyses, and cost realism as-
sessment.
‘‘(B) A description of the rationale
for the award of the contract.
‘‘(C) The overall evaluated cost
and combined technical and cost
scores of the awardee and the de-
briefed offeror, and the technical
point scores of the awardee and the
debriefed offeror.
‘‘(D) The overall ranking of all
offerors.
‘‘(b) INFORMATION NOT PROVIDED.—A de-
briefing under subsection (a) shall not make
point-by-point 
comparisons 
with 
other
offerors’ proposals and shall not disclose any
information that is not subject to disclosure
under section 552 of title 5, United States
Code, including information relating to—
‘‘(1) trade secrets;
‘‘(2) privileged or confidential manu-
facturing processes and techniques; and
‘‘(3) commercial and financial infor-
mation that is privileged or confidential,
including cost breakdowns, profit, indi-
rect cost rates, and similar information.
‘‘(c) NOTIFICATION
OF DISCLOSURE.—Each
solicitation for contracts subject to subsection
(a) shall notify participating offerors that the
categories of information described in sub-
section (a)(3) may be disclosed by the Govern-
ment in post-award debriefings.’’.
(b) PERIOD FOR FILING PROTEST.—
(1) IN
GENERAL.—Section 3553(d) of
title 31, United States Code, is amended
by adding at the end the following:
‘‘(3)(A) In the case of protest submitted by
a person provided a debriefing with respect
to a contract, paragraph (1) shall be applied
by substituting for ‘but within 10 days of the
date of the contract award’ the following: ‘but
before the later of the date that is 10 days
after the date of the contract award or the
date that is 3 working days after the date of
completion of a debriefing regarding the con-
tract’.
‘‘(B) In this paragraph the term ‘debrief-
ing’ means a debriefing under the guidelines
required under section 29 of the Office of Fed-
eral Procurement Policy Act.’’.
(2) BROOKS AUTOMATIC DATA PROCESS-
ING ACT PROTESTS.—Section 111(f)(3) of the
Federal 
Property 
and 
Administrative
Services Act of 1949 (40 U.S.C. 749(f)(3)) is
amended by adding at the end the follow-
ing:
‘‘(C)(i) In the case of protest filed by a per-
son provided a debriefing with respect to a
contract, subparagraph (A) shall be applied
by substituting for ‘but within 10 days after
the contract award’ the following: ‘but before
the later of the date that is 10 days after the
date of the contract award or the date that is
3 working days after the date of completion
of a debriefing regarding the contract’.
‘‘(ii) In this subparagraph the term ‘de-
briefing’ means a debriefing under the guide-
lines required under section 29 of the Office
of Federal Procurement Policy Act.’’.
(c) ISSUANCE
OF REVISION.—The Federal
Acquisition Regulatory Council shall issue a
final revision of the Federal Acquisition Regu-
lation implementing section 29 of the Office of
Federal Procurement Policy Act, as added by
subsection (a), not later than 180 days after
the date of the enactment of this Act.
(d) APPLICATION.—Section 29 of the Office
of Federal Procurement Policy Act, as added
by subsection (a), shall apply with respect to
solicitations for contracts issued after the ex-
piration of the 180-day period beginning on
the date of the enactment of this Act.
SEC. 503. USE OF SMALL PURCHASE PROCEDURES FOR
PROCUREMENTS 
CONDUCTED 
THROUGH
FEDERAL 
ACQUISITION 
COMPUTER 
NET-
WORK SYSTEMS; IMPLEMENTATION OF SYS-
TEMS.
(a) INCREASE IN SMALL PURCHASE THRESH-
OLD.—
(1) IN GENERAL.—Section 4 of the Of-
fice of Federal Procurement Policy Act
(41 U.S.C. 403), as amended by section
122(a), is further amended—
(A) by striking paragraph (11) and
inserting the following:
‘‘(11) the term ‘small purchase thresh-
old’ means—
‘‘(A) $25,000, except as provided in
subparagraphs (B) and (C);
‘‘(B) $50,000, in the case of a pro-
curement—
‘‘(i) that is conducted by a
procuring activity that has imple-
mented FACNET system architec-
tural capabilities in accordance
with the requirements under sec-
tion 30(f)(1)(A) and (B)(i); and
‘‘(ii) in which notices of solici-
tation for all contracting opportu-
nities 
are 
issued 
through 
a
FACNET system; or
‘‘(C) $100,000, in the case of a pro-
curement—
‘‘(i) that is conducted by a
procuring activity that has imple-
mented FACNET system architec-
tural capabilities in accordance
with the requirements under sec-
tion 30(f)(1)(A) and (B)(i), (ii), (iii),
and (iv); and
‘‘(ii) in which—
‘‘(I) notices of solicitation
for all contracting opportuni-
ties are issued through a
FACNET system,
‘‘(II) responses to solicita-
tions and requests for infor-
mation may be submitted to
the 
procuring 
activity
through such system,
‘‘(III) information pursu-
ant to those requests is avail-
able through such system,
‘‘(IV) 
orders 
are 
made
through such system, and
‘‘(V) 
public 
notice 
of
awards is provided through
such system;
except that the dollar amount in each of
subparagraphs (A), (B), and (C) shall be
adjusted on October 1 of each year divis-
ible by 5 to the equivalent amount in con-
stant fiscal year 1993 dollars (rounded to
the nearest $1,000);’’
(B) by striking the period at the
end of paragraph (12) and inserting ‘‘;
and’’; and
(C) by adding at the end the fol-
lowing new paragraph:
‘‘(13) 
the 
term 
‘FACNET 
system’
means such a system developed in ac-
cordance with the FACNET system archi-
tecture established by the Administrator
under section 30.’’.
(2) EFFECTIVE DATE.—The amendments
made by paragraph (1) shall take effect
on, and apply to solicitations made and
orders placed on or after, the expiration
of the 60-day period beginning on the
date of issuance in final form of revisions
to the Federal Acquisition Regulation
under subsection (b).
(3) INTERIM
RULE.—Notwithstanding
paragraphs (1) and (2), during the 5-year
period beginning on the date of the issu-
ance in final form of revisions to the Fed-
eral Acquisition Regulation under sub-
section (b), procuring activities shall con-
tinue to report, pursuant to section 19(d)
of the Office of Federal Procurement Pol-
icy Act (41 U.S.C. 417(d)), procurement
awards with a dollar value of at least
$25,000, but less than $100,000, in con-
formity with the procedures for the re-
porting of a contract award in excess of
$25,000 in effect on May 24, 1993.
(b) IMPROVED
SMALL
PURCHASE
PROCE-
DURES.—
(1) REVISION OF FAR.—The Federal Ac-
quisition Regulation shall be revised to
ensure that—
(A) procuring activities of execu-
tive agencies comply with the re-
quirements of section 8(a) of the
Small Business Act (15 U.S.C. 637(a))
and section 2323 of title 10, United
States Code, in awarding any con-
tract with a price exceeding $25,000;
(B) 
the 
authority 
under 
part
13.106(a)(1) of the Federal Acquisition
Regulation (48 C.F.R. 13.106(a)(1)), as
in effect on May 19, 1993, to make
purchases without securing competi-
tive quotations does not apply to any
purchases with a price exceeding
$2,500; and
(C) procuring activities of execu-
tive agencies comply with the re-
quirements of section 15(j) of the
Small Business Act (15 U.S.C. 644), re-
lating to the small business reserve,
in awarding any contract with a price
below the small purchase threshold.
(2) NOTICE REQUIRED REGARDING ORAL
SOLICITATIONS.—Section 18(a)(1)(B) of the
Office of Federal Procurement Policy Act
(41 U.S.C. 416(a)(1)(B)) is amended in the
matter preceding clause (i)—
(A) by inserting ‘‘(including orally
or by any other means)’’ after ‘‘in-
tending to solicit’’; and
(B) by inserting after ‘‘ten days’’
the following: ‘‘before contract award
(except for any procurement in which
public notice of contract opportuni-
ties for the acquisition of property or
services by a procuring activity of an
executive 
agency 
is 
performed
through a FACNET system)’’.
(3) PARTICIPATION BY ALL RESPONSIBLE
SMALL BUSINESS CONCERNS.—Section 18 of
the Office of Federal Procurement Policy
Act (41 U.S.C. 416) is amended by adding
at the end the following:
‘‘(e) An executive agency intending to so-
licit offers for a contract for which a notice
of solicitation is required to be posted under
subsection (a)(1)(B) shall ensure that all small
business concerns are permitted to respond to
solicitations for the contract within the time
specified in the solicitations.’’.
(c) PERFORMANCE TEST AND REPORT.—
(1) PERFORMANCE
TEST.—The Comp-
troller General of the United States shall
monitor and collect data on the results of
the amendments made by subsection
(a)(1), to ascertain the effects of the
amendments on the participation of small
business concerns (including small busi-
ness concerns owned and controlled by
socially and economically disadvantaged
individuals) in procurement awards of
less than $100,000 and the benefits and
detriments, if any, to the buying activi-
ties of the various Executive agencies.
(2) DATA TO BE COLLECTED.—Data col-
lected under paragraph (1) shall include
data regarding whether the amendments
made by subsection (a)(1) have improved
the acquisition process in terms of re-
duced paperwork, financial or other sav-
ings to the Government, and any increase
in the number of contractors participat-
ing in the contracting process.
(3) PERIOD.—Data shall be collected
for purposes of paragraph (1) during the
period beginning with the first full fiscal
year quarter after the effective date of
the amendments made by subsection
(a)(1) and ending September 30, 1996.
(4) REPORT.—By March 1, 1997, the
Comptroller General of the United States
shall report to the Committee on Govern-
ment Operations of the House of Rep-
resentatives, the Committee on Govern-
mental Affairs of the Senate, and the
Committees on Small Business of the
House of Representatives and the Senate
on the effects of the increase in the small
purchase threshold made by the amend-
ments made by subsection (a)(1).
(d) FUNCTIONS OF ADMINISTRATOR FOR FED-
ERAL PROCUREMENT POLICY.—Section 6(d) of
the Office of Federal Procurement Policy Act
(41 U.S.C. 405(d)) is amended—
(1) in paragraph (7) by striking ‘‘and’’
after the semicolon at the end; and
(2) by redesignating paragraph (8) as
paragraph (10) and inserting after para-
graph (7) the following:
‘‘(8) developing policies, in consulta-
tion with the Administrator of the Small
Business Administration, that ensure that
small businesses and small businesses
owned and controlled by socially and eco-
nomically disadvantaged persons are pro-
vided with the maximum practicable op-
portunities to participate in procure-
ments that are conducted below the small
purchase threshold;
‘‘(9) developing policies that will pro-
mote achievement of goals for participa-
tion by small businesses and small busi-
nesses owned and controlled by socially
and economically disadvantaged individ-
uals; and’’.
(e) IMPLEMENTATION OF ELECTRONIC DATA
INTERCHANGE
FOR
PROCUREMENT
INFORMA-
TION.—The Office of Federal Procurement Pol-
icy Act (41 U.S.C. 401 et seq.) is further amend-
ed by adding after section 29 (as added by sec-
tion 502) the following:
‘‘SEC. 30. ELECTRONIC INTERCHANGE OF PROCUREMENT
INFORMATION.
‘‘(a) IN GENERAL.—The Administrator, in
consultation with the Office of Information
and Regulatory Affairs, shall establish a pro-
gram and assign a program manager for, and
provide overall direction of policy and leader-
ship in, the development, coordination, instal-
lation, operation, and completion of imple-
mentation by executive agencies, by not later
than 5 years after the date of the enactment
of the Federal Acquisition Improvement Act
of 1993, of a Federal Acquisition Computer
Network system architecture. Any system de-
veloped in accordance with this architecture
shall be known as a ‘FACNET system’. The
FACNET system architecture shall involve en-
abling technology and procurement elec-
tronic data interchange transaction sets. The
enabling technology shall consist of a com-
puter network, supporting data bases, and
standard interfaces that interconnect Govern-
ment automated systems to the network. The
procurement 
electronic 
data 
interchange
transaction sets shall facilitate the electronic
interchange of standard procurement infor-
mation between Government and industry
automated acquisition systems.
‘‘(b) FUNCTIONS OF ADMINISTRATOR OF GEN-
ERAL SERVICES.—The Administrator of Gen-
eral Services shall do the following:
‘‘(1) Provide technical support for
FACNET systems by doing the following:
‘‘(A) Coordinate with the Adminis-
trator to facilitate the efficient and
widespread implementation of var-
ious FACNET systems by executive
agencies. This shall include interfac-
ing FACNET systems to other sys-
tems, such as the Government bank
card and Electronic Funds Transfer
payment systems.
‘‘(B) Assist the Director of the Na-
tional Institute of Standards and
Technology in the development and
application of appropriate Federal In-
formation Processing Standards.
‘‘(C) Prepare a technical plan for
coordinating 
the 
design, 
develop-
ment, implementation, operation, and
maintenance of the FACNET system
architecture. The plan shall include
roles and responsibilities, major mile-
stones, cost estimates, and perform-
ance requirements.
‘‘(2) Ensure compliance with section
111 of the Federal Property and Adminis-
trative Services Act of 1949 in the imple-
mentation of FACNET systems by execu-
tive agencies, including by limiting the
scope of delegations under subsection (a)
of that section.
‘‘(3) Evaluate progress by executive
agencies in implementing FACNET sys-
tems, and recommend changes in that im-
plementation to the program manager as-
signed by the Administrator under sub-
section (a).
‘‘(4) Submit to the Congress, on the
date that is one year after the date of the
enactment of the Federal Acquisition Im-
provement Act of 1993 and on that date
in each of the 5 years thereafter, a report
on the overall progress by the executive
branch of the Government and by each
executive agency in implementing the
FACNET system architecture.
‘‘(c) IMPLEMENTATION OF FACNET SYSTEMS
BY EXECUTIVE AGENCIES.—
‘‘(1) IN
GENERAL.—The head of each
executive agency shall cooperate with the
Administrator and the Administrator of
General Services to implement FACNET
systems for the agency.
‘‘(2) DESIGNATION OF AGENCY PROGRAM
MANAGER.—
‘‘(A) DESIGNATION.—The head of
each executive agency shall designate
a program manager to implement
FACNET systems for the agency and
otherwise implement this section.
‘‘(B) FUNCTIONS.—A program man-
ger designated under this paragraph
for an executive agency shall—
‘‘(i) report directly to the sen-
ior procurement executive des-
ignated for the agency under sec-
tion 16(4);
‘‘(ii) be responsible for the
timely and cost-effective imple-
mentation of the FACNET system
architecture for the agency in a
manner that is responsive to the
procurement needs of the agency,
national business needs, and the
public’s interest in open govern-
ment;
‘‘(iii) develop plans for phas-
ing-in 
the 
implementation 
of
FACNET systems for the procur-
ing activities of the executive
agency and phasing-out local net-
work systems that perform com-
parable procurement functions;
‘‘(iv) participate in the inter-
agency development of standard
procurement 
electronic 
data
interchange transaction sets; and
‘‘(v) in carrying out this sec-
tion, comply with guidelines is-
sued by the Administrator under
this section and program direc-
tives issued by the Administrator
of General Services under section
111 of the Federal Property and
Administrative Services Act of
1949.
‘‘(d) FUNCTIONS OF NATIONAL INSTITUTE OF
STANDARDS AND TECHNOLOGY.—The Director of
the National Institute of Standards and Tech-
nology shall—
‘‘(1) ensure that the FACNET system
architecture complies with Federal Infor-
mation Processing Standards;
‘‘(2) issue additional standards for the
FACNET system architecture as nec-
essary; and
‘‘(3) establish tests to facilitate the
aims of this section and support policies
established by the Administrator under
this section.
‘‘(e) FUNCTIONS OF SMALL BUSINESS ADMIN-
ISTRATION.—The Administrator of the Small
Business Administration shall—
‘‘(1) develop plans to coordinate and
promote the use of FACNET systems by
small businesses, that incorporate out-
reach efforts by the Small Business Ad-
ministration, agency Offices of Small and
Disadvantaged Business and Utilization,
Small 
Business 
Development 
Centers,
and other appropriate organizations; and
‘‘(2) inform and provide consistent
and 
comprehensive 
FACNET 
system
training for small businesses.
‘‘(f) 
FACNET 
SYSTEM
COMPATIBILITY
STANDARDS.—
‘‘(1) IN GENERAL.—The Administrator,
in consultation with the Office of Infor-
mation and Regulatory Affairs, the Ad-
ministrator of General Services, the Ad-
ministrator of the Small Business Admin-
istration, and the Director of the Na-
tional Institute of Standards and Tech-
nology, shall prescribe policies for ensur-
ing convenient and universal access to
FACNET systems, and shall develop a set
of system compatibility standards for
each 
FACNET 
system 
interface 
and
FACNET system support data base. The
system 
compatibility 
standards 
shall
specify the functional capabilities of each
FACNET system interface, and the mini-
mum set of data elements of each
FACNET system support data base. The
system compatibility standards shall en-
sure that the following FACNET system
functions are satisfactorily performed by
each executive agency, executive agency
component, or procuring activity:
‘‘(A) Provision of widespread pub-
lic notice of solicitations for contract
opportunities issued by the agency,
component, or activity and of orders
to be made by the agency, component,
or activity below the small purchase
threshold.
‘‘(B) Allowing private users to
electronically—
‘‘(i) selectively access and re-
view solicitations issued by the
agency, component, or activity;
‘‘(ii) respond to solicitations
issued by the agency, component,
or activity;
‘‘(iii) receive orders from the
agency, component, or activity;
and
‘‘(iv) access information on
contract awards made by the
agency, component, or activity.
‘‘(2) 
BINDING
STANDARDS.—The
FACNET system interface and FACNET
system support data base of each procur-
ing activity shall comply with the system
compatibility standards developed under
paragraph (1), except to the extent the
Administrator has waived application of
such standards to the activity under
paragraph (3).
‘‘(3) WAIVERS.—
‘‘(A) IN
GENERAL.—The Adminis-
trator may, in writing, waive the ap-
plication of any system compatibility
standard to a procuring activity if the
Administrator—
‘‘(i) determines that compli-
ance with the standard by the
procuring 
activity 
would 
ad-
versely affect the accomplishment
of the mission of the activity or
cause a major adverse financial
impact on the activity which is
not offset by Government-wide
savings; and
‘‘(ii) approves a plan, devel-
oped by the procuring activity,
for complying with the standard
by not later than 1 year after the
issuance of the waiver.
‘‘(B) AUTHORITY
NON-DELEGABLE.—
The authority of the Administrator to
issue waivers under this paragraph
may not be delegated.
‘‘(C) 
REQUEST
FOR
WAIVER.—A
waiver under this paragraph may be
issued by the Administrator only
after receipt of a request for the
waiver submitted by the program
manager designated under subsection
(c)(2)(A) for the procuring activity for
which the waiver is requested.
‘‘(D) NOTICE OF WAIVER.—The Ad-
ministrator shall promptly submit a
notice of each waiver under this
paragraph to the Committee on Gov-
ernment Operations of the House of
Representatives and the Committee
on Governmental Affairs of the Sen-
ate, and promptly publish the notice
in the Federal Register.’’.
(f) TECHNICAL CORRECTIONS.—
(1) Section 18(d) of the Office of Fed-
eral Procurement Policy Act (41 U.S.C.
416) is amended by striking ‘‘(e)’’ in the
first sentence and inserting ‘‘(a)’’.
(2) Section 18(a)(1) of the Office of
Federal 
Procurement 
Policy 
Act 
(41
U.S.C. 416(a)(1)) is amended—
(A) in subparagraph (A) in the
matter following clause (ii) by strik-
ing ‘‘notice’’ and inserting ‘‘notice of
solicitation’’; and
(B) in subparagraph (B) in the
matter preceding clause (i) by strik-
ing ‘‘a notice of solicitation described
in subsection (f)’’ and inserting ‘‘a no-
tice of solicitation described in sub-
section (b)’’.
SEC. 504. TEST PROGRAM.
(a) IN GENERAL.—The Administrator for
Federal Procurement Policy (in this section
referred to as the ‘‘Administrator’’) may con-
duct a program of tests of alternative and in-
novative procurement procedures. To the ex-
tent consistent with this section, such pro-
gram shall be conducted consistent with sec-
tion 15 of the Office of Federal Procurement
Policy Act (41 U.S.C. 413). No more than 6
such tests shall be conducted under this au-
thority.
(b) DESIGNATION OF AGENCIES.—Each test
conducted pursuant to subsection (a) shall be
limited to not more than 2 specific contract-
ing activities in an agency designated by the
Administrator. Each agency so designated
shall select the contracting activities partici-
pating in the test with the approval of the Ad-
ministrator and shall designate a procure-
ment testing official who shall be responsible
for the conduct and evaluation of tests within
that agency.
(c) TEST REQUIREMENTS.—Tests conducted
under subsection (a)—
(1) shall be developed and structured
by the Administrator or by the agency
senior 
procurement 
executives 
des-
ignated pursuant to section 16(4) of the
Office of Federal Procurement Policy Act,
as redesignated by section 111 of this Act,
in close coordination with the Adminis-
trator;
(2) shall be for a period of not greater
than 4 years;
(3) shall be limited to specific pro-
grams of agencies or specific acquisi-
tions;
(4) may not include any test with a
total estimated life-cycle cost to the Gov-
ernment greater than $100,000,000;
(5) shall include—
(A) a test by the National Aero-
nautics and Space Administration of
simplified procurement procedures
for acquisitions with an estimated an-
nual total obligation of funds of
$500,000 or less;
(B) a test by the General Services
Administration of expedited methods
for procuring automatic data process-
ing equipment commodities;
(C) a test by at least one agency
of streamlined procedures for com-
petition among interested sources
participating in the tailoring of a so-
licitation for the purchase of commer-
cial products; and
(D) a test of commercial item ac-
quisition procedures in which all
evaluation factors and subfactors on
which a contract award will be based
are disclosed in the solicitation, iden-
tifying both the absolute and relative
weight for each factor and each
subfactor; and
(6) shall not include any procurement
the cost of which is expected to exceed
$5,000,000 (including options).
(d) LIMITATION ON TOTAL VALUE OF CON-
TRACTS UNDER PROGRAM.—
(1) 
LIMITATION.—The 
Administrator
shall ensure that the total amount obli-
gated under contracts awarded pursuant
to the program under this section does
not exceed §$600,000,000.
(2) MONITORING.—The Administrator
shall monitor the value of contracts
awarded pursuant to the program under
this section.
(3) PROHIBITION ON AWARDS IN EXCESS
OF LIMIT.—No contract may be awarded
under the program under this section if
the award of the contract would result in
obligation of more than $600,000,000
under contracts under this section.
(e) PROCEDURES AUTHORIZED.—Tests con-
ducted under this section may include tests of
any of the following procedures:
(1) Publication of agency needs prior
to drafting of a solicitation.
(2) Screening of sources and competi-
tion among capable vendors.
(3) Issuance of draft solicitations for
comment.
(4) Streamlined solicitations, with a
minimized number of evaluation factors
and information required from vendors,
abbreviated periods for submission of of-
fers, and page limitations on offers.
(5) Limitation of source selection fac-
tors to—
(A) cost to the Government;
(B) past experience; and
(C) quality of the contents of the
offer.
(6) Evaluation of proposals by small
teams of highly qualified people, limited
to 30 days.
(7) Competition among sources of
preevaluated products.
(8) Alternative notice and publication
requirements.
(9) A process in which—
(A) the competitive process is ini-
tiated by a notice in the Commerce
Business Daily synopsizing the needs
of the executive agency conducting
the test, in functional and perform-
ance terms, with other specifications
provided for guidance only;
(B) the notice invites interested
sources to submit information or sam-
ples showing their product’s suit-
ability for those needs (with price
quotations) or, if appropriate, show-
ing the sources’ technical capability,
past 
performance, 
product
supportability, or other qualifications
(with appropriate consideration to
rates and other cost-related factors);
(C) contracting officials develop a
request for proposals (including ap-
propriate specifications and evalua-
tion criteria) after reviewing the sub-
mittals made by interested sources
and, if the officials determine nec-
essary, after consultation with those
sources; and
(D) the contract is awarded after
a streamlined competition limited to
all sources that timely provided prod-
uct information in response to the no-
tice 
or, 
if 
appropriate, 
to 
those
sources 
determined 
most 
capable
based on those qualification-based
factors included in an invitation to
submit information pursuant to sub-
paragraph (B).
(f) TEST PLAN.—Not later than 60 days be-
fore implementing any test program under
this section, the Administrator shall—
(1) provide a detailed test plan, in-
cluding lists of any regulations that are
to be waived, and any written determina-
tion under subsection (f)(1)(B) to the
Committee on Government Operations of
the House of Representatives and the
Committee on Governmental Affairs of
the Senate;
(2) provide a copy of the plan to the
appropriate authorizing committees of
the House of Representatives and the
Senate; and
(3) publish the plan in the Federal
Register and provide an opportunity for
public comment.
(g) WAIVER
OF
PROCUREMENT
REGULA-
TIONS.—
(1) IN
GENERAL.—For purposes of a
test conducted under subsection (a), the
Administrator may waive—
(A) any provision of the Federal
Acquisition Regulation that is not re-
quired by statute; and
(B) any provision of the Federal
Acquisition Regulation that is re-
quired by a provision of law de-
scribed in paragraph (2), the waiver
of which the Administrator deter-
mines in writing to be necessary to
conduct any test of any of the 9 pro-
cedures described in subsection (e).
(2) PROVISIONS
OF
LAW
DESCRIBED.—
The provisions of law referred to in para-
graph (1) are the following:
(A) Section 3709 of the Revised
Statutes (41 U.S.C. 5).
(B) Section 3710 of the Revised
Statutes (41 U.S.C. 8).
(C) Section 3735 of the Revised
Statutes (41 U.S.C. 13).
(D) Section 310 of the Federal
Property and Administrative Services
Act of 1949 (41 U.S.C. 260).
(E) Section 303 of the Federal
Property and Administrative Services
Act of 1949 (41 U.S.C. 253).
(F) Section 2304 of title 10, United
States Code.
(G) Section 303A of the Federal
Property and Administrative Services
Act of 1949 (41 U.S.C. 253a).
(H) Section 303B of the Federal
Property and Administrative Services
Act of 1949 (41 U.S.C. 253b).
(I) Section 2305 of title 10, United
States Code.
(J) Section 303C of the Federal
Property and Administrative Services
Act of 1949 (41 U.S.C. 253c).
(K) Section 2319 of title 10, United
States Code.
(L) Section 4(6) of the Office of
Federal Procurement Policy Act (41
U.S.C. 403(6)).
(M) Section 18 of the Office of
Federal Procurement Policy Act (41
U.S.C. 416).
(N) Sections 8(e), (f), and (g) of the
Small Business Act (15 U.S.C. 637(e),
(f), and (g)).
(h) REPORTS AND REVIEWS.—
(1) 
ADMINISTRATOR.—The 
Adminis-
trator shall report to the Congress on the
results of each test conducted under sub-
section (a).
(2) 
COMPTROLLER
GENERAL.—The
Comptroller General of the United States
shall review each test conducted under
subsection (a) and report to the Congress
on each test and shall report annually to
the Congress on the conduct of and re-
sults of all tests conducted under sub-
section (a).
(i) EXPIRATION OF AUTHORITY.—The author-
ity to conduct tests under this section and to
award contracts under such tests shall expire
on October 1, 1997. Contracts entered prior to
October 1, 1997, pursuant to a test shall re-
main in effect, notwithstanding the expira-
tion of the authority to conduct the test under
this section.
SEC. 505. SINGLE AUDIT UNDER BROOKS ARCHITECT-ENGI-
NEERS ACT.
Section 904 of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C.
544) is amended by adding at the end the fol-
lowing:
‘‘(d) An agency may not perform any pre-
award audit to evaluate proposed costs under
any contract, subcontract, or modification
awarded or made in accordance with this title
in any case in which the contracting officer
determines that the objectives of the audit
reasonably can be met by accepting the re-
sults of an audit conducted by a Federal Gov-
ernment audit agency within the previous
year.’’.
SEC. 506. BUY AMERICAN REQUIREMENT FOR FEDERAL
AGENCIES.
(a) APPLICABILITY
OF BUY AMERICAN RE-
QUIREMENTS.—The Administrator of General
Services shall ensure that the requirements of
the Buy American Act apply to all procure-
ments, consistent with international obliga-
tions, made with funds provided pursuant to
the authorization contained in the amend-
ment made by section 601.
(b) REPORTS ON PROCUREMENTS FROM FOR-
EIGN ENTITIES.—The Administrator of General
Services shall submit to the Congress a report
on the amount of procurements from foreign
entities made in fiscal years 1994, 1995, and
1996 with funds provided pursuant to the au-
thorization contained in the amendment
made by section 601. Such report shall sepa-
rately indicate the dollar value of items pro-
cured with such funds for which the Buy
American Act was waived pursuant to the
Trade Agreement Act of 1979 or any inter-
national agreement to which the United
States is a party.
(c) PROHIBITION OF CONTRACTS WITH PER-
SONS FALSELY LABELING PRODUCTS AS MADE IN
AMERICA.—If the Administrator of General
Services determines that a person has been
convicted of intentionally affixing a label
bearing a ‘‘Made in America’’ inscription to
any product sold in or shipped to the United
States that is not made in America, the Ad-
ministrator shall determine, not later than 90
days after determining that the person has
been so convicted, whether the person should
be debarred from contracting with the Gen-
eral Services Administration. If the Adminis-
trator determines that the person should not
be debarred, the Administrator shall submit
to the Congress a report on such determina-
tion not later than 30 days after the deter-
mination is made.
(d) DEFINITIONS.—For purposes of this sec-
tion—
(1) the term ‘‘Buy American Act’’
means title III of the Act entitled ‘‘An Act
making appropriations for the Treasury
and Post Office Departments for the fis-
cal year ending June 30, 1934, and for
other purposes’’, approved March 3, 1933
(41 U.S.C. 10a et seq.); and
(2) the term ‘‘debar’’ means to ex-
clude, pursuant to established adminis-
trative 
procedures, 
from 
Government
contracting and subcontracting for a
specified period of time commensurate
with the seriousness of the failure or of-
fense or the inadequacy of performance.
SEC. 507. STUDY OF PARTICIPATION BY CERTAIN SMALL
BUSINESSES IN FEDERAL PROCUREMENT.
(a) STUDY.—The Administrator for Federal
Procurement Policy shall conduct a study of—
(1) the degree of participation by
small businesses owned and controlled by
socially and economically disadvantaged
individuals in procurements conducted
by executive agencies, other than agen-
cies in the Department of Defense; and
(2) the extent of compliance by those
executive agencies with the goals for par-
ticipation by such businesses required by
Office of Federal Procurement Policy pol-
icy letter 91–1, relating to Government-
wide small business and small disadvan-
taged business goals for procurement
contracts.
(b) REPORT.—Not later than 6 months after
the date of the enactment of this Act, the Ad-
ministrator for Federal Procurement Policy
shall submit a report on the study required
under subsection (a) to the Committee on
Government Operations and the Committee
on Small Business of the House of Representa-
tives, and to the Committee on Governmental
Affairs and the Committee on Small Business
of the Senate. The report shall include rec-
ommendations to facilitate the provision of
authority to executive agencies, other than
agencies in the Department of Defense, to
conduct procurement set asides for small
businesses owned and controlled by socially
and economically disadvantaged individuals,
and on improved outreach programs to in-
crease the participation by such businesses in
procurements conducted by those executive
agencies.
TITLE VI—PROVISIONS RELAT-
ING TO GENERAL SERVICES
ADMINISTRATION
SEC. 601. AUTHORIZATION OF FUNCTIONS AND ACTIVITIES
UNDER THE FEDERAL PROPERTY AND AD-
MINISTRATIVE SERVICES ACT OF 1949.
Section 603(a) of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C.
475) is amended to read as follows:
‘‘(a) There are authorized to be appro-
priated such sums as may be necessary to
carry out the provisions of this Act for each
fiscal year through the fiscal year ending on
September 30, 1996, including payment in ad-
vance, when authorized by the Administrator,
for library memberships in societies whose
publications are available to members only,
or to members at a price lower than that
charged to the general public. Nothing in this
subsection shall affect authorizations of ap-
propriations or appropriations set forth else-
where in this Act.’’.
SEC. 602. REQUIREMENTS FOR APPOINTMENTS TO SENIOR
POSITIONS IN GENERAL SERVICES ADMINIS-
TRATION.
(a) IN GENERAL.—Section 101 of the Fed-
eral Property and Administrative Services
Act of 1949 (40 U.S.C. 751) is amended by re-
designating subsection (f) as subsection (g)
and by inserting after subsection (e) the fol-
lowing new subsection:
‘‘(f) A person appointed as the Deputy Ad-
ministrator of General Services or as the head
of a principal organizational unit of the Gen-
eral Services Administration shall, in addition
to any other minimum qualifications, have
significant previous management experience
in government or the private sector in an area
or areas directly related to the functions and
responsibilities of the position to which that
person is appointed.’’.
(b) EFFECTIVE
DATE.—The amendments
made by subsection (a) shall not apply to any
person in a position affected by such amend-
ments on the date of the enactment of this
Act.
SEC. 603. TERMINATION OF REQUIREMENT.
The laws of the United States are amend-
ed to read as if section 630 of Public Law 102–
393 had not been enacted.
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Federal Acquisition Im-
provement 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—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.
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 in-
centive 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.
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 pro-
duction 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.
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 contrac-
tors.
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 pro-
grams.
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 produc-
tion.
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 air-
craft.
Sec. 3023. Use of military installations by contractors.
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 as-
sistance services.
Sec. 3053. Regulations on procurement, production, warehousing, and supply dis-
tribution 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 thresh-
old.
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 ex-
ceeding 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 provi-
sions of law.
SUBPART C—CIVILIAN AGENCY ACQUISITIONS
Sec. 4041. Inapplicability of certain provisions of law.
Sec. 4042. Conforming amendments relating to inapplicability of certain provi-
sions of law.
SUBPART D—ACQUISITIONS GENERALLY
Sec. 4051. Conformance of certain procurement integrity requirements.
Sec. 4052. Inapplicability of the Drug-Free Workplace Act of 1988.
PART IV—CONFORMING AMENDMENTS
Sec. 4071. Armed services acquisitions.
Sec. 4072. Civilian agency acquisitions.
Sec. 4073. Office of Federal Procurement Policy Act.
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 regula-
tions.
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 Amer-
ican 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 provi-
sions 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.
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 provi-
sions of law.
Subtitle C—Acquisitions Generally
Sec. 7021. Conforming amendment relating to inapplicability of certain provi-
sions 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 re-
search.
TITLE VIII—MISCELLANEOUS PROVISIONS
Sec. 8001. Contract goal for small disadvantaged businesses and certain institu-
tions 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.
TITLE I—CONTRACT FORMATION
Subtitle A—Competition Statutes
PART I—ARMED SERVICES ACQUISITIONS
Subpart A—Competition Requirements
SEC. 1001. REFERENCES TO FEDERAL ACQUISITION REGU-
LATION.
Section 2304 of title 10, United States Code, is amend-
ed—
(1) in subsection (a)(1)(A), by striking out
‘‘modifications’’ and all that follows through ‘‘note)’’
and inserting in lieu thereof ‘‘Federal Acquisition
Regulation’’; and
(2) in subsection (g)(1), by striking out ‘‘regula-
tions modified’’ and all that follows through ‘‘note)’’
and inserting in lieu thereof ‘‘Federal Acquisition
Regulation’’.
SEC. 1002. EXCLUSION OF PARTICULAR SOURCES.
(a) PROHIBITION ON USE OF CLASSES OF PURCHASES
OR CONTRACTS.—Section 2304(b) of title 10, United States
Code, is amended—
(1) by redesignating paragraphs (2) and (3) as
paragraphs (3) and (4), respectively;
(2) by inserting after paragraph (1) the follow-
ing new paragraph (2):
‘‘(2) The determination required of the head of an
agency in paragraph (1) may not be made for a class of
purchases or contracts.’’; and
(3) in paragraph (4), as redesignated by para-
graph (1), by striking out ‘‘paragraphs (1) and (2)’’
and inserting in lieu thereof ‘‘paragraphs (1) and
(3)’’.
(b) ADDITIONAL JUSTIFICATION TO EXCLUDE PAR-
TICULAR SOURCE.—Section 2304(b)(1) of such title is
amended—
(1) by striking out ‘‘or’’ at the end of subpara-
graph (B);
(2) by striking out the period at the end of sub-
paragraph (C) and inserting in lieu thereof ‘‘; or’’;
and
(3) by adding at the end the following new sub-
paragraph:
‘‘(D) would ensure a continuous and reliable
source; satisfy a critical need for health, safety, or
other emergency supplies; or satisfy projected needs
resulting from a history of high demand for the sup-
ply or service.’’.
SEC. 1003. EXCEPTION TO USE OF COMPETITIVE PROCE-
DURES 
FOR 
CONTINUED 
OCCUPANCY 
OF
LEASED SPACE.
Section 2304(d)(1) of title 10, United States Code, is
amended—
(1) by striking out ‘‘and’’ at the end of subpara-
graph (A);
(2) by striking out the period at the end of sub-
paragraph (B) and inserting in lieu thereof ‘‘; and’’;
and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) in the case of a follow-on contract to ac-
quire leasehold interests in real property providing
for the continued occupancy by Federal agencies of
space in buildings, such space may be deemed to be
available only from the incumbent lessor and may be
acquired through procedures other than competitive
procedures if a determination is made that (i) the oc-
cupant agencies have a continuing need for the space,
(ii) the space meets the needs of the agencies, and (iii)
the incumbent lessor is willing to continue to provide
the space at a fair market price as established by the
Government based on a market survey or an ap-
praisal conducted in accordance with generally ac-
cepted real property appraisal procedures.’’.
SEC. 1004. APPROVAL FOR USE OF NONCOMPETITIVE PRO-
CEDURES.
Section 2304(f)(1)(B)(i) of title 10, United States
Code, is amended by inserting before the semicolon at the
end the following: ‘‘or by an official referred to in clause
(ii), (iii), or (iv)’’.
SEC. 1005. CONTRACTS FOR PROFESSIONAL AND TECH-
NICAL SERVICES.
(a) AMENDMENT.—Section 2304(j)(4) of title 10,
United States Code, is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(4)’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) The Secretary of Defense may waive the limita-
tion in subparagraph (A) to the extent the Secretary consid-
ers the use of master agreements necessary in order to fur-
ther the policy set forth in section 2331(a) of this title. Dur-
ing any fiscal year, such a waiver may not increase the
total value of task orders under master agreements of a con-
tracting activity by more than 20 percent of the value of
all contracts for advisory and assistance services awarded
by that contracting activity during fiscal year 1989.’’.
(b) CONFORMING REPEAL.—Subsection (c) of section
2331 of title 10, United States Code, is repealed.
Subpart B—Planning, Solicitation, Evaluation, and
Award
SEC. 1011. SOURCE SELECTION FACTORS.
Section 2305(a) of title 10, United States Code, is
amended—
(1) in paragraph (2)—
(A) in subparagraph (A)(i), by striking out
‘‘nonprice-related factors)’’ and inserting in lieu
thereof ‘‘nonprice-related factors and significant
subfactors)’’; and
(B) in subparagraph (B)(ii), by striking
out subclause (I) and inserting in lieu thereof the
following:
‘‘(I) either a statement that the proposals
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 con-
ducted for the purpose of minor clarification)
unless discussions are determined to be nec-
essary; and’’; and
(2) by striking out paragraph (3) and inserting
in lieu thereof the following:
‘‘(3)(A) In prescribing the evaluation factors to be in-
cluded in each solicitation for competitive proposals, the
head of an agency shall clearly establish the relative impor-
tance assigned to the evaluation factors and significant
subfactors, including cost or price and the quality of the
product or services to be provided (including technical ca-
pability, management capability, and prior experience of
the offeror).
‘‘(B) Nothing in this paragraph prohibits an agency
from—
‘‘(i) providing additional information in a solic-
itation, including numeric weights for all evaluation
factors (and significant subfactors); or
‘‘(ii) stating in a solicitation that award will be
made to the offeror that meets the solicitation’s man-
datory requirements at the lowest price or cost.’’.
SEC. 1012. SOLICITATION PROVISION REGARDING EVALUA-
TION OF PURCHASE OPTIONS.
Section 2305(a) of title 10, United States Code, as
amended by section 1011, is further amended by adding at
the end the following new paragraph:
‘‘(4) The head of an agency, in issuing a solicitation
for a contract to be awarded using sealed bid procedures,
may not include in such solicitation a clause providing for
the evaluation of prices under the contract for options to
purchase additional supplies or services under the contract
unless the head of the agency has determined that there is
a reasonable likelihood that the options will be exercised.’’.
SEC. 1013. PROMPT NOTICE OF AWARD.
(a) SEALED BID PROCEDURES.—Section 2305(b) of
title 10, United States Code, is amended by adding at the
end of paragraph (3) the following: ‘‘Within 3 working days
after the date of contract award, the head of the agency shall
notify, in writing or by electronic means, all offerors not
awarded the contract that the contract has been awarded.’’.
(b) COMPETITIVE PROPOSALS PROCEDURES.—Such
section is further amended in the second sentence of para-
graph (4)(B) by striking out ‘‘shall promptly notify’’ and
inserting in lieu thereof ‘‘, within 3 working days after the
date of contract award, shall notify, in writing or by elec-
tronic means,’’.
SEC. 1014. POST-AWARD DEBRIEFINGS.
Section 2305(b) of title 10, United States Code, is
amended—
(1) by redesignating paragraph (5) as para-
graph (6); and
(2) by inserting after paragraph (4) the follow-
ing new paragraph (5):
‘‘(5)(A) When a contract is awarded by an agency on
the basis of competitive proposals, an unsuccessful offeror,
upon written request received by the agency within 3 work-
ing days after the date of receipt of notification of the con-
tract award, shall be debriefed and furnished the basis for
the selection decision and contract award. An employee of
the agency shall debrief the offeror within, to the maximum
extent practicable, 4 working days after receipt of the re-
quest by the agency.
‘‘(B) Such debriefing shall include, at a minimum—
‘‘(i) the agency’s evaluation of the significant
weak or deficient factors in the offeror’s offer;
‘‘(ii) the overall evaluated cost of the offer of the
contractor awarded the contract and the overall evalu-
ated cost of the offer of the debriefed offeror;
‘‘(iii) the overall ranking of all offers and the
total technical and cost scores of all offers;
‘‘(iv) a summary of the rationale for the award;
‘‘(v) in the case of an offer by the debriefed
offeror that includes a commercial end item, the make
and model (or equivalent description) of the item in-
cluded in the offer of the contractor awarded the con-
tract; and
‘‘(vi) reasonable responses to questions posed by
the debriefed offeror as to whether source selection
procedures set forth in the solicitation, applicable reg-
ulations, and other applicable authorities were fol-
lowed by the agency.
‘‘(C) The debriefing shall not include point-by-point
comparisons of the debriefed offeror’s offer with other offers
and shall not disclose any information that is exempt from
disclosure under section 552 of title 5.
‘‘(D) Each solicitation for competitive proposals shall
include a statement that information described in subpara-
graph (B) may be disclosed in post-award debriefings.
‘‘(E) If, within one year after the date of the contract
award and as a result of a successful procurement protest
or otherwise, the agency seeks to fulfill the same requirement
under the contract on the basis of the best and final offers
considered in the awarding of that contract, the agency
shall make available to offerors—
‘‘(i) all information provided in debriefings
under this paragraph regarding the offer of the con-
tractor awarded the contract; and
‘‘(ii) all comparable information with respect to
the original offerors.
‘‘(F) The contracting officer shall include a summary
of the debriefing in the contract file.’’.
SEC. 1015. PROTEST FILE.
Section 2305 of title 10, United States Code, is amend-
ed by adding at the end the following new subsection:
‘‘(e)(1) If, in the case of a solicitation for a contract
issued by, or an award or proposed award of a contract
by, the head of an agency, a protest is filed pursuant to
the procedures in subchapter V of chapter 35 of title 31 and
an actual or prospective offeror so requests, a file of the
protest shall be established by the contracting activity and
reasonable access shall be provided to actual or prospective
offerors.
‘‘(2) A file established pursuant to paragraph (1) shall
contain such information as would ordinarily be releasable
under section 552 of title 5 (commonly referred to as the
‘Freedom of Information Act’).
‘‘(3) Regulations implementing this subsection shall be
consistent with the regulations regarding the preparation
and submission of an agency’s protest file (the so-called
‘rule 4 file’) for protests to the General Services Board of
Contract Appeals under the Contract Disputes Act of 1978
(41 U.S.C. 601 et seq.).’’.
SEC. 1016. AWARD OF MULTIPLE CONTRACTS.
Section 2305 of title 10, United States Code, is amend-
ed by adding after subsection (e), as added by section 1015,
the following new subsection:
‘‘(f) AWARD OF MULTIPLE CONTRACTS.—In procuring
any supply or service using competitive procedures, the
head of an agency may award more than one contract for
the same supply or service in any case in which the head
of the agency determines that it is in the best interests of
the Federal Government to award those contracts for the
purpose of maintaining a continuous source for the supply
or service.’’.
SEC. 1017. CONSIDERATION OF CONTRACTOR PAST PER-
FORMANCE.
Paragraph (3) of section 2305(a) of title 10, United
States Code, as amended by section 1011(2), is further
amended by striking out ‘‘capability, and prior experience’’
in subparagraph (A) and inserting in lieu thereof ‘‘capabil-
ity, prior experience, and past performance’’.
SEC. 1018. DISCOURAGEMENT OF NONSTANDARD CON-
TRACT CLAUSES.
Section 2305 of title 10, United States Code, is amend-
ed by adding after subsection (f), as added by section 1016,
the following new subsection:
‘‘(g) NONSTANDARD CONTRACT CLAUSES.—The Sec-
retary of Defense shall prescribe regulations to discourage,
to the maximum extent practicable, the use of a non-
standard contract clause on a repetitive basis. The regula-
tions shall include provisions that—
‘‘(1) clearly define nonstandard clauses; and
‘‘(2) require prior approval for the use of a non-
standard clause on a repetitive basis by an official at
a level of responsibility above the contracting officer.’’.
Subpart C—Kinds of Contracts
SEC. 1021. REPEAL OF REQUIREMENT FOR SECRETARIAL
DETERMINATION REGARDING USE OF COST
TYPE OR INCENTIVE CONTRACT.
Subsection (c) of section 2306 of title 10, United States
Code, is repealed.
Subpart D—Miscellaneous Provisions for the
Encouragement of Competition
SEC. 1031. REPEAL OF REQUIREMENT FOR ANNUAL REPORT
BY ADVOCATES FOR COMPETITION.
Subsection (c) of section 2318 of title 10, United States
Code, is repealed.
PART II—CIVILIAN AGENCY ACQUISITIONS
Subpart A—Competition Requirements
SEC. 1051. REFERENCES TO FEDERAL ACQUISITION REGU-
LATION.
Section 303 of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 253) is amended—
(1) in subsection (a)(1)(A), by striking out
‘‘modifications’’ and all that follows through ‘‘of
1984’’ and inserting in lieu thereof ‘‘Federal Acquisi-
tion Regulation’’; and
(2) in subsection (g)(1), by striking out ‘‘regula-
tions modified’’ and all that follows through ‘‘of
1984,’’ and inserting in lieu thereof ‘‘Federal Acquisi-
tion Regulation’’.
SEC. 1052. EXCLUSION OF PARTICULAR SOURCES.
(a) PROHIBITION ON USE OF CLASSES OF PURCHASES
OR CONTRACTS.—Section 303(b) of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253(b))
is amended—
(1) by redesignating paragraphs (2) and (3) as
paragraphs (3) and (4), respectively;
(2) by inserting after paragraph (1) the follow-
ing new paragraph (2):
‘‘(2) The determination required of the agency head
in paragraph (1) may not be made for a class of purchases
or contracts.’’; and
(3) in paragraph (4), as redesignated by para-
graph (1), by striking out ‘‘paragraphs (1) and (2)’’
and inserting in lieu thereof ‘‘paragraphs (1) and
(3)’’.
(b) ADDITIONAL JUSTIFICATION TO EXCLUDE PAR-
TICULAR SOURCE.—Section 303(b)(1) of the Federal Prop-
erty and Administrative Services Act of 1949 (41 U.S.C.
253(b)(1)) is amended—
(1) by striking out ‘‘or’’ at the end of subpara-
graph (B);
(2) by striking out the period at the end of sub-
paragraph (C) and inserting in lieu thereof ‘‘; or’’;
and
(3) by adding at the end the following new sub-
paragraph:
‘‘(D) would ensure a continuous and reliable
source; satisfy a critical need for health, safety, or
other emergency supplies; or satisfy projected needs
100
resulting from a history of high demand for the sup-
ply or service.’’.
SEC. 1053. EXCEPTION TO USE OF COMPETITIVE PROCE-
DURES 
FOR 
CONTINUED 
OCCUPANCY 
OF
LEASED SPACE.
Section 303(d)(1) of the Federal Property and Admin-
istrative Services Act of 1949 (41 U.S.C. 253(d)(1)) is
amended—
(1) by striking out ‘‘and’’ at the end of subpara-
graph (A);
(2) by striking out the period at the end of sub-
paragraph (B) and inserting in lieu thereof ‘‘; and’’;
and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) in the case of a follow-on contract to ac-
quire leasehold interests in real property providing
for the continued occupancy by Federal agencies of
space in buildings, such space may be deemed to be
available only from the incumbent lessor and may be
acquired through procedures other than competitive
procedures if a determination is made that (i) the oc-
cupant agencies have a continuing need for the space,
(ii) the space meets the needs of the agencies, and (iii)
the incumbent lessor is willing to continue to provide
101
the space at a fair market price as established by the
Government based on a market survey or an ap-
praisal conducted in accordance with generally ac-
cepted real property appraisal procedures.’’.
SEC. 1054. APPROVAL FOR USE OF NONCOMPETITIVE PRO-
CEDURES.
Section 303(f)(1)(B)(i) of the Federal Property and
Administrative 
Services 
Act 
of 
1949 
(41 
U.S.C.
253(f)(1)(B)(i)) is amended by inserting before the semi-
colon at the end the following: ‘‘or by an official referred
to in clause (ii), (iii), or (iv)’’.
Subpart B—Planning, Solicitation, Evaluation, and
Award
SEC. 1061. SOLICITATION, EVALUATION, AND AWARD.
(a) CONTENT OF SOLICITATION.—Section 303A of the
Federal Property and Administrative Services Act of 1949
(41 U.S.C. 253a) is amended—
(1) in subsection (b)(1)(A)—
(A) 
by 
inserting 
‘‘and 
significant
subfactors’’ after ‘‘all significant factors’’; and
(B) by striking out ‘‘(including price)’’ and
inserting ‘‘(including cost or price, cost-related
or price-related factors and subfactors, and
noncost-related or nonprice-related factors and
significant subfactors)’’;
102
(2) in subsection (b)(1)(B), by inserting ‘‘and
subfactors’’ after ‘‘factors’’;
(3) in subsection (b)(2)(B), by striking out clause
(i) and inserting in lieu thereof the following:
‘‘(i) either a statement that the proposals
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 con-
ducted for the purpose of minor clarification)
unless discussions are determined to be nec-
essary; and’’; and
(4) by adding at the end the following new sub-
section:
‘‘(c)(1) In prescribing the evaluation factors to be in-
cluded in each solicitation for competitive proposals, an
agency head shall clearly establish the relative importance
assigned to the evaluation factors and significant
subfactors, including cost or price and the quality of the
product or services to be provided (including technical ca-
pability, management capability, prior experience, and
past performance of the offeror).
‘‘(2) Nothing in this subsection prohibits an agency
from—
103
‘‘(A) providing additional information in a so-
licitation, including numeric weights for all evalua-
tion factors (and significant subfactors); or
‘‘(B) stating in a solicitation that award will be
made to the offeror that meets the solicitation’s man-
datory requirements at the lowest price or cost.’’.
(b) EVALUATION AND AWARD.—Section 303B of the
Federal Property and Administrative Services Act of 1949
(41 U.S.C. 253b) is amended—
(1) in subsection (a), by inserting ‘‘, and award
a contract,’’ after ‘‘competitive proposals’’;
(2) in subsection (c), by inserting ‘‘in accordance
with subsection (a)’’ in the second sentence after
‘‘shall evaluate the bids’’; and
(3) in subsection (d)—
(A) by striking out paragraph (1) and in-
serting in lieu thereof the following:
‘‘(1) An agency head shall evaluate competitive propos-
als in accordance with subsection (a) and may award a
contract—
‘‘(A) after discussions with the offerors, provided
that written or oral discussions have been conducted
with all responsible offerors who submit proposals
within the competitive range; or
104
‘‘(B) based on the proposals received and without
discussions with the offerors (other than discussions
conducted for the purpose of minor clarification), pro-
vided that, as required by section 303A(b)(2)(B)(i),
the solicitation included a statement that proposals
are intended to be evaluated, and award made, with-
out discussions, unless discussions are determined to
be necessary.’’; and
(B) by striking out paragraphs (2) and (3)
and by redesignating paragraph (4) as para-
graph (2).
(c) APPLICABILITY.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to—
(A) solicitations for sealed bids or competi-
tive proposals issued after the end of the 180-day
period beginning on the date of the enactment of
this Act; and
(B) contracts awarded pursuant to those so-
licitations.
(2) 
AUTHORITY
TO
APPLY
AMENDMENTS
EARLY.—The head of an executive agency may apply
the amendments made by this section to solicitations
issued before the end of the period referred to in para-
105
graph (1). The head of the executive agency shall pub-
lish in the Federal Register notice of any such earlier
date of application at least 10 days before that date.
SEC. 1062. SOLICITATION PROVISION REGARDING EVALUA-
TION OF PURCHASE OPTIONS.
Section 303A of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 253a), as amended by
section 1061(a)(4), is further amended by adding at the end
the following new subsection:
‘‘(d) An agency head, in issuing a solicitation for a
contract to be awarded using sealed bid procedures, may
not include in such solicitation a clause providing for the
evaluation of prices under the contract for options to pur-
chase additional supplies or services under the contract un-
less the agency head has determined that there is a reason-
able likelihood that the options will be exercised.’’.
SEC. 1063. PROMPT NOTICE OF AWARD.
(a) SEALED BID PROCEDURES.—Subsection (c) of sec-
tion 303B of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 253b) is amended by add-
ing at the end the following: ‘‘Within 3 working days after
the date of contract award, the agency head shall notify,
in writing or by electronic means, offerors not awarded the
contract that the contract has been awarded.’’.
106
(b) COMPETITIVE PROPOSALS PROCEDURES.—Para-
graph (2) of section 303B(d) of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 253b(d)),
as redesignated by section 1061(b)(3)(B), is amended in the
second sentence by striking out ‘‘shall promptly notify’’ and
inserting in lieu thereof ‘‘, within 3 working days after the
date of contract award, shall notify, in writing or by elec-
tronic means,’’.
SEC. 1064. POST-AWARD DEBRIEFINGS.
Section 303B of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 253b) is amended—
(1) by redesignating subsections (e) and (f) as
subsections (f) and (g), respectively; and
(2) by inserting after subsection (d) the following
new subsection (e):
‘‘(e)(1) When a contract is awarded by an executive
agency on the basis of competitive proposals, an unsuccess-
ful offeror, upon written request received by the executive
agency within 3 working days after the date of receipt of
notification of the contract award, shall be debriefed and
furnished the basis for the selection decision and contract
award. An employee of the executive agency shall debrief
the offeror within, to the maximum extent practicable, 4
working days after receipt of the request by the executive
agency.
107
‘‘(2) Such debriefing shall include, at a minimum—
‘‘(A) the executive agency’s evaluation of the sig-
nificant weak or deficient factors in the offeror’s offer;
‘‘(B) the overall evaluated cost of the offer of the
contractor awarded the contract and the overall evalu-
ated cost of the offer of the debriefed offeror;
‘‘(C) the overall ranking of all offers and the
total technical and cost scores of all offers;
‘‘(D) a summary of the rationale for the award;
‘‘(E) in the case of an offer by the debriefed
offeror that includes a commercial end item, the make
and model (or equivalent description) of the item in-
cluded in the offer of the contractor awarded the con-
tract; and
‘‘(F) reasonable responses to questions posed by
the debriefed offeror as to whether source selection
procedures set forth in the solicitation, applicable reg-
ulations, and other applicable authorities were fol-
lowed by the executive agency.
‘‘(3) The debriefing shall not include point-by-point
comparisons of the debriefed offeror’s offer with other offers
and shall not disclose any information that is exempt from
disclosure under section 552 of title 5, United States Code.
108
‘‘(4) Each solicitation for competitive proposals shall
include a statement that information described in para-
graph (2) may be disclosed in post-award debriefings.
‘‘(5) If, within one year after the date of the contract
award and as a result of a successful procurement protest
or otherwise, the executive agency seeks to fulfill same the
requirement under the contract on the basis of a new solici-
tation of offers or on the basis of the best and final offers
considered in the awarding of that contract, the agency
head shall make available to offerors—
‘‘(A) all information provided in debriefings
under this subsection regarding the offer of the con-
tractor awarded the contract; and
‘‘(B) all comparable information with respect to
the original offerors.
‘‘(6) The contracting officer shall include a summary
of the debriefing in the contract file.’’.
SEC. 1065. PROTEST FILE.
Section 303B of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 253b) is amended by
adding at the end the following new subsection:
‘‘(h)(1) If, in the case of a solicitation for a contract
issued by, or an award or proposed award of a contract
by, an agency head, a protest is filed pursuant to the proce-
dures in subchapter V of chapter 35 of title 31, United
109
States Code, and an actual or prospective offeror so re-
quests, a file of the protest shall be established by the con-
tracting activity and reasonable access shall be provided to
actual or prospective offerors.
‘‘(2) A file established pursuant to paragraph (1) shall
contain such information as would ordinarily be releasable
under section 552 of title 5 (commonly referred to as the
‘Freedom of Information Act’).
‘‘(3) Regulations implementing this subsection shall be
consistent with the regulations regarding the preparation
and submission of an agency’s protest file (the so-called
‘rule 4 file’) for protests to the General Services Board of
Contract Appeals under the Contract Disputes Act of 1978
(41 U.S.C. 601 et seq.).’’.
SEC. 1066. AWARD OF MULTIPLE CONTRACTS.
Section 303B of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 253b), as amended by
section 1065, is further amended by adding at the end the
following new subsection:
‘‘(i) AWARD OF MULTIPLE CONTRACTS.—In procuring
any supply or service using competitive procedures, an ex-
ecutive agency may award more than one contract for the
same supply or service in any case in which the head of
the agency determines that it is in the best interests of the
Federal Government to award those contracts for the pur-
110
pose of maintaining a continuous source for the supply or
service.’’.
SEC. 1067. DISCOURAGEMENT OF NONSTANDARD CON-
TRACT CLAUSES.
Section 303B of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 253b), as amended by
section 1066, is further amended by adding at the end the
following new subsection:
‘‘(j) NONSTANDARD CONTRACT CLAUSES.—The head of
each executive agency shall promulgate regulations to dis-
courage, to the maximum extent practicable, the use of a
nonstandard contract clause on a repetitive basis. The regu-
lations shall include provisions that—
‘‘(1) clearly define nonstandard clauses; and
‘‘(2) require prior approval for the use of a non-
standard clause on a repetitive basis by an official at
a level of responsibility above the contracting officer.’’.
Subpart C—Kinds of Contracts
SEC. 1071. REPEAL OF AGENCY HEAD DETERMINATION RE-
GARDING USE OF COST TYPE OR INCENTIVE
CONTRACT.
Section 304(b) of the Federal Property and Adminis-
trative Services Act of 1949 (41 U.S.C. 254(b)) is amended
by striking out the second sentence.
111
SEC. 1072. MULTIYEAR CONTRACTS.
Title III of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 et seq.) is amended
by inserting after section 304 the following new section:
‘‘SEC. 304A. MULTIYEAR CONTRACTS.
‘‘(a) IN GENERAL.—To the extent that funds are other-
wise available for obligation, the head of an agency may
make multiyear contracts for the purchase of property,
whenever the agency head finds—
‘‘(1) that the use of such a contract will result
in substantial savings of the total anticipated costs of
carrying out the program through annual contracts;
‘‘(2) that the minimum need for the property to
be purchased is expected to remain substantially un-
changed during the contemplated contract period in
terms of production rate, procurement rate, and total
quantities;
‘‘(3) that there is a reasonable expectation that
throughout the contemplated contract period the exec-
utive agency will request funding for the contract at
the level required to avoid contract cancellation;
‘‘(4) that there is a stable design for the property
to be acquired and that the technical risks associated
with such property are not excessive; and
112
‘‘(5) that the estimates of both the cost of the con-
tract and the anticipated cost avoidance through the
use of a multiyear contract are realistic.
‘‘(b)(1) The head of the agency shall prescribe acquisi-
tion regulations to promote the use of multiyear contracting
as authorized by subsection (a) in a manner that will allow
the most efficient use of multiyear contracting.
‘‘(2) Such regulations may provide for cancellation
provisions in such multiyear contracts to the extent that
such provisions are necessary and in the best interests of
the United States. Such cancellation provisions may in-
clude consideration of both recurring and nonrecurring
costs of the contractor associated with the production of the
items to be delivered under the contract.
‘‘(3) Such regulations shall also provide that, to the
extent practicable, the administration of this section, and
of the regulations prescribed under this section, shall not
be carried out in a manner to preclude or curtail the exist-
ing ability of the executive agency to—
‘‘(A) provide for competition in the production of
items to be delivered under such a contract; or
‘‘(B) provide for termination of a prime contract
the performance of which is deficient with respect to
cost, quality, or schedule.
113
‘‘(c) Before any contract described in subsection (a)
that contains a clause setting forth a cancellation ceiling
in excess of $100,000,000 may be awarded, the head of the
agency shall give written notification of the proposed con-
tract and of the proposed cancellation ceiling for that con-
tract to the Congress, and such contract may not then be
awarded until the end of a period of 30 days beginning
on the date of such notification.
‘‘(d) Contracts may be made under this section for ad-
vance procurement, if feasible and practical, in order to
achieve economic-lot purchases and more efficient produc-
tion rates.
‘‘(e) In the event funds are not made available for the
continuation of a contract made under this section into a
subsequent fiscal year, the contract shall be canceled or ter-
minated, and the costs of cancellation or termination may
be paid from—
‘‘(1) appropriations originally available for the
performance of the contract concerned;
‘‘(2) appropriations currently available for pro-
curement of the type of property concerned, and not
otherwise obligated; or
‘‘(3) funds appropriated for those payments.
114
‘‘(f) This section does not apply to contracts for the
purchase of property to which section 111 of this Act ap-
plies.
‘‘(g) For the purposes of this section, a multiyear con-
tract is a contract for the purchase of property or services
for more than one, but not more than five, program years.
Such a contract may provide that performance under the
contract during the second and subsequent years of the con-
tract is contingent upon the appropriation of funds and
(if it does so provide) may provide for a cancellation pay-
ment to be made to the contractor if such appropriations
are not made.’’.
PART III—ACQUISITIONS GENERALLY
SEC. 1091. REPEAL OF REQUIREMENT FOR ANNUAL REPORT
ON COMPETITION.
Section 23 of the Office of Federal Procurement Policy
Act (41 U.S.C. 419) is repealed.
Subtitle B—Truth in Negotiations
PART I—ARMED SERVICES ACQUISITIONS
SEC. 1201. STABILIZATION OF DOLLAR THRESHOLD OF AP-
PLICABILITY.
(a) 
DOLLAR
THRESHOLD
STABILIZATION
FOR
OFFERORS FOR PRIME CONTRACTS.—Paragraph (1)(A) of
section 2306a(a) of title 10, United States Code, is amend-
ed—
115
(1) in clause (i), by striking out ‘‘and before
January 1, 1996,’’; and
(2) in clause (ii), by striking out ‘‘or after De-
cember 31, 1995,’’.
(b) ADJUSTMENT OF DOLLAR THRESHOLD.—Such sec-
tion is further amended by adding at the end the following
new paragraph:
‘‘(7) The dollar amount in each of subparagraphs (A),
(B), (C), and (D) of paragraph (1) shall be adjusted on
October 1 of each year divisible by 5 to the equivalent
amount in constant fiscal year 1993 dollars (rounded to
the nearest $1,000).’’.
SEC. 1202. EXCEPTIONS TO COST OR PRICING DATA RE-
QUIREMENTS.
(a) EXCEPTIONS.—Subsection (b) of section 2306a of
title 10, United States Code, is amended to read as follows:
‘‘(b) EXCEPTIONS.—(1) This section shall not be ap-
plied to a contract or subcontract, or a modification to a
contract or subcontract—
‘‘(A) for which the price agreed upon is based
on—
‘‘(i) adequate price competition;
‘‘(ii) established catalog or market prices of
commercial items or of services regularly used
for other than Federal Government purposes, as
116
the case may be, that are sold in sufficient quan-
tities to the general public; or
‘‘(iii) prices set by law or regulation; or
‘‘(B) in an exceptional case when the head of the
agency determines that the requirements of this sec-
tion may be waived and states in writing the reasons
for such determination.
‘‘(2) The Federal Acquisition Regulation (issued under
section 25(c) of the Office of Federal Procurement Policy
Act (41 U.S.C. 421(c)) shall provide clear standards for de-
termining whether the exceptions provided in paragraph
(1)(A) apply. In the case of the exception provided in para-
graph (1)(A)(i), the regulations shall specify the criteria to
be used to determine whether adequate price competition ex-
ists. In the case of the exception provided in paragraph
(1)(A)(ii), the regulations shall preclude the consideration
of sales to the Federal Government, including the percentage
of an item’s overall sales that are made to the Federal Gov-
ernment, when determining whether the item has been sold
in sufficient quantities to the public.’’.
(b) LIMITATION ON ADDITIONAL AUTHORITY.—Sub-
section (c) of such section is amended by adding at the end
the following new sentence: ‘‘The head of an agency may
not require such data to be submitted under this subsection
for any contract or subcontract, or modification to a con-
117
tract or subcontract, covered by the exceptions in subsection
(b).’’.
SEC. 1203. RIGHT OF UNITED STATES TO EXAMINE CON-
TRACTOR RECORDS.
Subsection (f) of section 2306a of title 10, United
States Code, is amended to read as follows:
‘‘(f) RIGHT OF UNITED STATES TO EXAMINE CON-
TRACTOR RECORDS.—For the purpose of evaluating the ac-
curacy, completeness, and currency of cost or pricing data
required to be submitted by this section, the head of an
agency shall have the rights provided by section 2313(a)(2)
of this title.’’.
SEC. 1204. CONSISTENCY OF TIME REFERENCES.
Section 2306a of title 10, United States Code, is
amended—
(1) in subparagraphs (A)(ii) and (B)(ii) of sub-
section (d)(4), by inserting ‘‘or, if applicable consist-
ent with paragraph (1)(B), another date agreed upon
between the parties’’ after ‘‘(or price of the modifica-
tion)’’; and
(2) in subsection (g), by inserting ‘‘or, if appli-
cable consistent with subsection (d)(1)(B), another
date agreed upon between the parties’’ after ‘‘(or the
price of a contract modification)’’.
118
SEC. 1205. REPEAL OF SUPERSEDED PROVISION.
Subsection (c) of section 803 of Public Law 101–510
(10 U.S.C. 2306a note) is repealed.
PART II—CIVILIAN AGENCY ACQUISITIONS
SEC. 1251. REVISION OF CIVILIAN AGENCY PROVISIONS TO
ENSURE UNIFORM TREATMENT OF COST OR
PRICING DATA.
Title III of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 et seq.) is further
amended—
(1) in section 304, by striking out subsection (d);
and
(2) by inserting after section 304A, as added by
section 1072, the following new section:
‘‘SEC. 304B. COST OR PRICING DATA: TRUTH IN NEGOTIA-
TIONS.
‘‘(a) REQUIRED COST OR PRICING DATA AND CERTIFI-
CATION.—(1) An agency head shall require offerors, con-
tractors, and subcontractors to make cost or pricing data
available as follows:
‘‘(A) An offeror for a prime contract under this
title to be entered into using procedures other than
sealed-bid procedures shall be required to submit cost
or pricing data before the award of a contract if—
‘‘(i) in the case of a prime contract entered
into after the date of the enactment of the Fed-
119
eral Acquisition Improvement Act of 1994, the
price of the contract to the United States is ex-
pected to exceed $500,000; and
‘‘(ii) in the case of a prime contract entered
into on or before the date of the enactment of the
Federal Acquisition Improvement Act of 1994,
the price of the contract to the United States is
expected to exceed $100,000.
‘‘(B) The contractor for a prime contract under
this chapter shall be required to submit cost or pric-
ing data before the pricing of a change or modifica-
tion to the contract if—
‘‘(i) in the case of a change or modification
made to a prime contract referred to in subpara-
graph (A)(i), the price adjustment is expected to
exceed $500,000;
‘‘(ii) in the case of a change or modification
made to a prime contract that was entered into
on or before the date of the enactment of the Fed-
eral Acquisition Improvement Act of 1994, and
that has been modified pursuant to paragraph
(6), the price adjustment is expected to exceed
$500,000; and
120
‘‘(iii) in the case of a change or modifica-
tion not covered by clause (i) or (ii), the price
adjustment is expected to exceed $100,000.
‘‘(C) An offeror for a subcontract (at any tier)
of a contract under this title shall be required to sub-
mit cost or pricing data before the award of the sub-
contract if the prime contractor and each higher-tier
subcontractor have been required to make available
cost or pricing data under this section and—
‘‘(i) in the case of a subcontract under a
prime contract referred to in subparagraph
(A)(i), the price of the subcontract is expected to
exceed $500,000;
‘‘(ii) in the case of a subcontract entered
into under a prime contract that was entered
into on or before the date of the enactment of the
Federal Acquisition Improvement Act of 1994,
and that has been modified pursuant to para-
graph (6), the price of the subcontract is expected
to exceed $500,000; and
‘‘(iii) in the case of a subcontract not cov-
ered by clause (i) or (ii), the price of the sub-
contract is expected to exceed $100,000.
‘‘(D) The subcontractor for a subcontract covered
by subparagraph (C) shall be required to submit cost
121
or pricing data before the pricing of a change or
modification to the subcontract if—
‘‘(i) in the case of a change or modification
to a subcontract referred to in subparagraph
(C)(i) or (C)(ii), the price adjustment is expected
to exceed $500,000; and
‘‘(ii) in the case of a change or modification
to a subcontract referred to in subparagraph
(C)(iii), the price adjustment is expected to ex-
ceed $100,000.
‘‘(2) A person required, as an offeror, contractor, or
subcontractor, to submit cost or pricing data under para-
graph (1) (or required by the head of the contracting activ-
ity concerned to submit such data under subsection (c))
shall be required to certify that, to the best of the person’s
knowledge and belief, the cost or pricing data submitted are
accurate, complete, and current.
‘‘(3) Cost or pricing data required to be submitted
under paragraph (1) (or under subsection (c)), and a cer-
tification required to be submitted under paragraph (2),
shall be submitted—
‘‘(A) in the case of a submission by a prime con-
tractor (or an offeror for a prime contract), to the
contracting officer for the contract (or to a designated
representative of the contracting officer); or
122
‘‘(B) in the case of a submission by a sub-
contractor (or an offeror for a subcontract), to the
prime contractor.
‘‘(4) Except as provided under subsection (b), this sec-
tion applies to contracts entered into by an agency head
on behalf of a foreign government.
‘‘(5) For purposes of paragraph (1)(C), a contractor
or subcontractor granted a waiver under subsection (b)(2)
shall be considered as having been required to make avail-
able cost or pricing data under this section.
‘‘(6) Upon the request of a contractor that was required
to submit cost or pricing data under paragraph (1) in con-
nection with a prime contract entered into on or before the
date of the enactment of the Federal Acquisition Improve-
ment Act of 1994, the agency head that entered into such
contract shall modify the contract to reflect subparagraphs
(B)(ii) and (C)(ii) of paragraph (1). All such modifications
shall be made without requiring consideration.
‘‘(7) The dollar amount in each of subparagraphs (A),
(B), (C), and (D) of paragraph (1) shall be adjusted on
October 1 of each year divisible by 5 to the equivalent
amount in constant fiscal year 1993 dollars (rounded to
the nearest $1,000).
123
‘‘(b) EXCEPTIONS.—(1) This section shall not be ap-
plied to a contract or subcontract, or a modification to a
contract or subcontract—
‘‘(A) for which the price agreed upon is based
on—
‘‘(i) adequate price competition;
‘‘(ii) established catalog or market prices of
commercial items or of services regularly used
for other than Federal Government purposes, as
the case may be, that are sold in sufficient quan-
tities to the general public; or
‘‘(iii) prices set by law or regulation; or
‘‘(B) in an exceptional case when the head of the
agency determines that the requirements of this sec-
tion may be waived and states in writing the reasons
for such determination.
‘‘(2) The Federal Acquisition Regulation (issued under
section 25(c) of the Office of Federal Procurement Policy
Act (41 U.S.C. 421(c)) shall provide clear standards for de-
termining whether the exceptions provided in paragraph
(1)(A) apply. In the case of the exception provided in para-
graph (1)(A)(i), the regulations shall specify the criteria to
be used to determine whether adequate price competition ex-
ists. In the case of the exception provided in paragraph
(1)(A)(ii), the regulations shall preclude the consideration
124
of sales to the Federal Government, including the percentage
of an item’s overall sales that are made to the Federal Gov-
ernment, when determining whether the item has been sold
in sufficient quantities to the public.
‘‘(c) AUTHORITY TO REQUIRE COST
OR PRICING
DATA.—When cost or pricing data are not required to be
submitted by subsection (a), such data may nevertheless be
required to be submitted by the head of the agency if the
head of the agency determines that such data are necessary
for the evaluation by the agency of the reasonableness of
the price of the contract or subcontract. In any case in
which the head of the agency requires such data to be sub-
mitted under this subsection, the head of the agency shall
document in writing the reasons for such requirement. The
head of an agency may not require such data to be submit-
ted under this subsection for any contract or subcontract,
or modification to a contract or subcontract, covered by the
exceptions in subsection (b).
‘‘(d) PRICE REDUCTIONS FOR DEFECTIVE COST OR
PRICING DATA.—(1)(A) A prime contract (or change or
modification to a prime contract) under which a certificate
under subsection (a)(2) is required shall contain a provi-
sion that the price of the contract to the United States, in-
cluding profit or fee, shall be adjusted to exclude any sig-
nificant amount by which it may be determined by the
125
agency head that such price was increased because the con-
tractor (or any subcontractor required to make available
such a certificate) submitted defective cost or pricing data.
‘‘(B) For the purposes of this section, defective cost or
pricing data are cost or pricing data which, as of the date
of agreement on the price of the contract (or another date
agreed upon between the parties), were inaccurate, incom-
plete, or noncurrent. If for purposes of the preceding sen-
tence the parties agree upon a date other than the date of
agreement on the price of the contract, the date agreed upon
by the parties shall be as close to the date of agreement on
the price of the contract as is practicable.
‘‘(2) In determining for purposes of a contract price
adjustment under a contract provision required by para-
graph (1) whether, and to what extent, a contract price was
increased because the contractor (or a subcontractor) sub-
mitted defective cost or pricing data, it shall be a defense
that the United States did not rely on the defective data
submitted by the contractor or subcontractor.
‘‘(3) It is not a defense to an adjustment of the price
of a contract under a contract provision required by para-
graph (1) that—
‘‘(A) the price of the contract would not have
been modified even if accurate, complete, and current
cost or pricing data had been submitted by the con-
126
tractor or subcontractor because the contractor or sub-
contractor—
‘‘(i) was the sole source of the property or
services procured; or
‘‘(ii) otherwise was in a superior bargain-
ing position with respect to the property or serv-
ices procured;
‘‘(B) the contracting officer should have known
that the cost and pricing data in issue were defective
even though the contractor or subcontractor took no
affirmative action to bring the character of the data
to the attention of the contracting officer;
‘‘(C) the contract was based on an agreement be-
tween the contractor and the United States about the
total cost of the contract and there was no agreement
about the cost of each item procured under such con-
tract; or
‘‘(D) the prime contractor or subcontractor did
not submit a certification of cost and pricing data re-
lating to the contract as required under subsection
(a)(2).
‘‘(4)(A) A contractor shall be allowed to offset an
amount against the amount of a contract price adjustment
under a contract provision required by paragraph (1) if—
127
‘‘(i) the contractor certifies to the contracting of-
ficer (or to a designated representative of the contract-
ing officer) that, to the best of the contractor’s knowl-
edge and belief, the contractor is entitled to the offset;
and
‘‘(ii) the contractor proves that the cost or pric-
ing data were available before the date of agreement
on the price of the contract (or price of the modifica-
tion), or, if applicable consistent with paragraph
(1)(B), another date agreed upon between the parties,
and that the data were not submitted as specified in
subsection (a)(3) before such date.
‘‘(B) A contractor shall not be allowed to offset an
amount otherwise authorized to be offset under subpara-
graph (A) if—
‘‘(i) the certification under subsection (a)(2)
with respect to the cost or pricing data involved was
known to be false when signed; or
‘‘(ii) the United States proves that, had the cost
or pricing data referred to in subparagraph (A)(ii)
been submitted to the United States before the date of
agreement on the price of the contract (or price of the
modification) or, if applicable under paragraph
(1)(B), another date agreed upon between the parties,
the submission of such cost or pricing data would not
128
have resulted in an increase in that price in the
amount to be offset.
‘‘(e) INTEREST AND PENALTIES FOR CERTAIN OVER-
PAYMENTS.—(1) If the United States makes an overpay-
ment to a contractor under a contract with an executive
agency subject to this section and the overpayment was due
to the submission by the contractor of defective cost or pric-
ing data, the contractor shall be liable to the United
States—
‘‘(A) for interest on the amount of such overpay-
ment, to be computed—
‘‘(i) for the period beginning on the date the
overpayment was made to the contractor and
ending on the date the contractor repays the
amount of such overpayment to the United
States; and
‘‘(ii) at the current rate prescribed by the
Secretary of the Treasury under section 6621 of
the Internal Revenue Code of 1986; and
‘‘(B) if the submission of such defective data was
a knowing submission, for an additional amount
equal to the amount of the overpayment.
‘‘(2) Any liability under this subsection of a contractor
that submits cost or pricing data but refuses to submit the
certification required by subsection (a)(2) with respect to
129
the cost or pricing data shall not be affected by the refusal
to submit such certification.
‘‘(f) RIGHT OF UNITED STATES TO EXAMINE CON-
TRACTOR RECORDS.—For the purpose of evaluating the ac-
curacy, completeness, and currency of cost or pricing data
required to be submitted by this section, the head of an
agency shall have the rights provided by section 304C(a)(2).
‘‘(g) COST OR PRICING DATA DEFINED.—In this sec-
tion, the term ‘cost or pricing data’ means all facts that,
as of the date of agreement on the price of a contract (or
the price of a contract modification) or, if applicable con-
sistent with subsection (d)(1)(B), another date agreed upon
between the parties, a prudent buyer or seller would reason-
ably expect to affect price negotiations significantly. Such
terms does not include information that is judgmental, but
does include the factual information from which a judgment
was derived.’’.
SEC. 1252. REPEAL OF OBSOLETE PROVISION.
Section 303E of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 253e) is repealed.
130
Subtitle C—Research and
Development
SEC. 1301. COOPERATIVE AGREEMENTS FOR BASIC, AP-
PLIED, AND ADVANCED RESEARCH.
Title III of the Federal Property and Administrative
Service Act of 1949 (41 U.S.C. 251 et seq.) is amended by
adding at the end the following new section:
‘‘SEC. 311. COOPERATIVE AGREEMENTS FOR BASIC, AP-
PLIED, AND ADVANCED RESEARCH.
‘‘(a) An executive agency, in carrying out basic, ap-
plied, and advanced research projects, may enter into coop-
erative agreements and other transactions with any person,
any agency or instrumentality of the United States, any
unit of State or local government, any educational institu-
tion, and any other entity.
‘‘(b)(1) Cooperative agreements and other transactions
entered into under subsection (a) may include a clause that
requires a person or other entity to make payments to any
department or agency of the Federal Government as a con-
dition of receiving support under the agreement or other
transaction.
‘‘(2) The amount of any payment received by the Fed-
eral Government pursuant to a requirement imposed under
paragraph (1) may be credited, to the extent authorized by
an agency head, to the appropriate account established
131
under subsection (c). Amounts so credited shall be merged
with other funds in the account and shall be available for
the same purposes and the same period for which other
funds in such account are available.
‘‘(c) The authority provided under subsection (a) may
be exercised without regard to section 3324 of title 31, Unit-
ed States Code.
‘‘(d) The head of the executive agency shall ensure
that—
‘‘(1) to the maximum extent practicable, a coop-
erative agreement or other transaction under this sec-
tion does not provide for research that duplicates re-
search being conducted under existing programs car-
ried out by the executive agency;
‘‘(2) to the extent the agency head determines
practicable, the funds provided by the Government
under the cooperative agreement or other transaction
do not exceed the total amount provided by other par-
ties to the cooperative agreement or other transaction;
and
‘‘(3) the authority under this section is used only
when the use of standard contracts or grants is not
feasible or appropriate.
‘‘(e) There is hereby established on the books of the
Treasury separate accounts for each executive agency for
132
support of advanced research projects provided for in coop-
erative agreements and other transactions entered into
under subsection (a). Funds in those accounts shall be avail-
able for the payment of such support.
‘‘(f) An executive agency, in carrying out research
projects, may permit the director of any federally funded
research and development center to enter into cooperative
research and development agreements with any person, any
agency or instrumentality of the United States, any unit
of State or local government, and any other entity under
the authority granted by section 11 of the Stevenson-Wydler
Technology Innovation Act of 1980 (15 U.S.C. 3710a).
Technology may be transferred to a non-Federal party to
such an agreement consistent with the provisions of sections
10 and 11 of such Act (15 U.S.C. 3710, 3710a).’’.
SEC. 1302. COMPETITION REQUIREMENT FOR AWARDS OF
GRANTS AND CONTRACTS TO COLLEGES AND
UNIVERSITIES.
Subsections (a) and (b) of section 2361 of title 10,
United States Code, are amended by inserting ‘‘or nonprofit
organization other than a federally funded research and de-
velopment center (FFRDC)’’ after ‘‘college or university’’
each place it appears.
133
Subtitle D—Procurement Protests
PART I—PROTESTS TO THE COMPTROLLER
GENERAL
SEC. 1401. REVIEW OF PROTESTS AND EFFECT ON CON-
TRACTS PENDING DECISION.
(a) CLARIFICATION
OF PERIOD
FOR CERTAIN AC-
TION.—Paragraph (3) of section 3553(c) of title 31, United
States Code, is amended by striking out ‘‘thereafter’’ and
inserting in lieu thereof ‘‘after the making of such finding’’.
(b) SUSPENSION OF PERFORMANCE.—Subsection (d) of
such section is amended to read as follows:
‘‘(d) AUTHORIZATION AND SUSPENSION OF PERFORM-
ANCE.—
‘‘(1) AUTHORIZATION REQUIRED.—A contractor
awarded a Federal agency contract may not begin
performance of the contract or engage in any related
activities that result in obligations being incurred by
the United States until receipt of an authorization to
proceed with performance of the contract from the
contracting officer responsible for the award of the
contract.
‘‘(2) PROHIBITION
OF
AUTHORIZATION
UNDER
CERTAIN CONDITIONS.—A contracting officer may not
authorize a contractor to proceed with performance of
the contract if—
134
‘‘(A) a protest is likely to be filed; and
‘‘(B) the immediate performance of the con-
tract is not in the best interests of the United
States.
‘‘(3) SUSPENSION DURING PERIOD WHEN PRO-
TEST IS PENDING.—(A) If the Federal agency award-
ing the contract receives notice of a protest in accord-
ance with this section during the period described in
subparagraph (B)—
‘‘(i) the contracting officer may not author-
ize performance of the contract to begin while the
protest is pending; and
‘‘(ii) if contract performance was authorized
in accordance with paragraph (2) before receipt
of the notice, the contracting officer shall imme-
diately direct the contractor to cease performance
under the contract and to suspend any related
activities that may result in additional obliga-
tions being incurred by the United States under
that contract.
‘‘(B) The period referred to in subparagraph (A),
with respect to a contract, is the period beginning on
the date on which the contract is awarded and ending
on the later of—
135
‘‘(i) the date that is 8 working days after
such date of contract award; or
‘‘(ii) in the case of a procurement with re-
spect to which an unsuccessful offeror has re-
quested a debriefing in accordance with section
2305(b)(5) of title 10 or section 303B(e) of the
Federal Property and Administrative Services
Act of 1949, as applicable, the date that is 5
working days after the date on which the Federal
agency debriefs the unsuccessful offeror.
‘‘(C) Performance and related activities sus-
pended pursuant to subparagraph (A)(ii) by reason of
a protest may not be resumed while the protest is
pending.
‘‘(D) The head of the contracting activity may
authorize the performance of the contract (notwith-
standing a protest of which the Federal agency has
notice under this section)—
‘‘(i) upon a written finding—
‘‘(I) that performance of the contract is
in the best interests of the United States; or
‘‘(II) that urgent and compelling cir-
cumstances that significantly affect interests
of the United States will not permit waiting
136
for the decision of the Comptroller General
concerning the protest; and
‘‘(ii) after the Comptroller General is noti-
fied of that finding.’’.
SEC. 1402. DECISIONS ON PROTESTS.
(a) PERIOD FOR RESOLUTION OF AMENDMENTS TO
PROTESTS.—Section 3554(a) of title 31, United States
Code, is amended—
(1) by redesignating paragraph (3) as para-
graph (4); and
(2) by inserting after paragraph (2) the follow-
ing new paragraph (3):
‘‘(3) An amendment to a protest that adds a new
ground of protest, if timely raised, should be resolved, to
the maximum extent practicable, within the time limit es-
tablished under paragraph (1) of this subsection for final
decision of the initial protest. If an amended protest cannot
be resolved within such time limit, the Comptroller General
may resolve the amended protest through the express option
under paragraph (2) of this subsection.’’.
(b) GAO RECOMMENDATIONS ON PROTESTS.—
(1) IMPLEMENTATION OF RECOMMENDATIONS.—
Section 3554 of title 31, United States Code, is
amended—
137
(A) in subsection (b), by adding at the end
the following new paragraph:
‘‘(3) If the Federal agency fails to implement fully the
recommendations of the Comptroller General under this
subsection with respect to a solicitation for a contract or
an award or proposed award of a contract within 60 days
after receiving the recommendations, the head of the con-
tracting activity responsible for that contract shall report
such failure to the Comptroller General not later than 5
working days after the end of such 60-day period.’’;
(B) by striking out subsection (c) and in-
serting in lieu thereof the following:
‘‘(c)(1) If the Comptroller General determines that a
solicitation for a contract or a proposed award or the award
of a contract does not comply with a statute or regulation,
the Comptroller General may recommend that the Federal
agency conducting the procurement pay to an appropriate
interested party the costs of—
‘‘(A) filing and pursuing the protest, including
reasonable attorney’s fees and consultant and expert
witness fees; and
‘‘(B) bid and proposal preparation.
‘‘(2) If the Comptroller General recommends under
paragraph (1) that a Federal agency pay costs to an inter-
ested party, the Federal agency shall—
138
‘‘(A) pay the costs promptly out of funds avail-
able to or for the use of the Federal agency; or
‘‘(B) if the Federal agency does not make such
payment, promptly report to the Comptroller General
the reasons for the failure to follow the Comptroller
General’s recommendation.
‘‘(3) If the Comptroller General recommends under
paragraph (1) that a Federal agency pay costs to an inter-
ested party, the Federal agency and the interested party
shall attempt to reach an agreement on the amount of the
costs to be paid. If the Federal agency and the interested
party are unable to agree on the amount to be paid, the
Comptroller General may, upon the request of the interested
party, recommend to the Federal agency the amount of the
costs that the Federal agency should pay.’’; and
(C) by striking out subsection (e) and in-
serting in lieu thereof the following:
‘‘(e)(1) The Comptroller General shall report promptly
to the Committee on Governmental Affairs and the Commit-
tee on Appropriations of the Senate and to the Committee
on Government Operations and the Committee on Appro-
priations of the House of Representatives any case in which
a Federal agency fails to implement fully a recommenda-
tion of the Comptroller General under subsection (b) or (c).
The report shall include—
139
‘‘(A) a comprehensive review of the pertinent
procurement, including the circumstances of the fail-
ure of the Federal agency to implement a rec-
ommendation of the Comptroller General; and
‘‘(B) a recommendation regarding whether, in
order to correct an inequity or to preserve the integ-
rity of the procurement process, the Congress should
consider—
‘‘(i) private relief legislation;
‘‘(ii) further investigation by the Congress;
or
‘‘(iii) other action.
‘‘(2) Not later than January 31 of each year, the
Comptroller General shall transmit to the Congress a report
containing a summary of each instance in which a Federal
agency did not fully implement a recommendation of the
Comptroller General under subsection (b) or (c) during the
preceding year. The report shall also describe each instance
in which a final decision in a protest was not rendered
within 125 days after the date the protest is submitted to
the Comptroller General.’’.
(2) REQUIREMENT
FOR
PAYMENT
IN
ACCORD-
ANCE WITH PRIOR GAO DETERMINATIONS.—Amounts
to which the Comptroller General declared an inter-
ested party to be entitled under section 3554 of title
140
31, United States Code, as in effect immediately be-
fore the enactment of this Act, shall, if not paid or
otherwise satisfied by the Federal agency concerned
before the date of the enactment of this Act, be paid
out of funds available to or for the use of the Federal
agency.
(c) RECOVERY
OF
COSTS
FOR
FRIVOLOUS
PRO-
TESTS.—Such section is further amended by adding at the
end the following new subsection:
‘‘(f) If the Comptroller General expressly finds that a
protest or a portion of a protest is frivolous or has not been
brought or pursued in good faith, the Comptroller may rec-
ommend that the protester or other interested party who
joins the protest be liable to the United States for payment
of all or that portion of the United States costs, for which
such a finding is made, of reviewing the protest, including
the fees and other expenses (as defined in section
2412(d)(2)(A) of title 28) incurred by the United States in
defending the protest. The Federal Acquisition Regulation
shall provide guidance under which the head of an agency
may initiate action to obtain such costs, unless (A) special
circumstances would make such payment unjust, or (B) the
protester obtains documents or other information for the
first time, after the protest is filed with the Comptroller
General, which establishes that the protest or a portion is
141
frivolous or has not been brought in good faith and the pro-
tester then promptly withdraws the protest or portion of
the protest.’’.
(d) RESTRICTION ON ACCESS TO CERTAIN INFORMA-
TION.—Section 3553(f) of title 31, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(f)’’; and
(2) by adding at the end the following:
‘‘(2)(A) The Comptroller General may issue protective
orders which establish terms, conditions, and restrictions for
the provision of any document to a person under paragraph
(1), that prohibit or restrict the disclosure by the person
of information described in subparagraph (C) that is con-
tained in such a document.
‘‘(B) The penalties specified under section 27(i) of the
Office of Federal Procurement Policy Act shall apply to the
disclosure of information described in subparagraph (C) in
violation of a term, condition, or restriction in a protective
order under this paragraph by a person that is subject to
the protective order.
‘‘(C) Information referred to in subparagraphs (A)
and (B) is procurement sensitive information, trade secrets,
or other proprietary or confidential research, development,
or commercial information.
142
‘‘(D) A protective order under this paragraph shall not
be considered to authorize the withholding of any document
or information from the Congress or an executive agency.’’.
SEC. 1403. REGULATIONS.
(a) COMPUTATION OF PERIODS.—Section 3555 of title
31, United States Code, is amended—
(1) by redesignating subsection (b) as subsection
(d); and
(2) by inserting after subsection (a) the following
new subsection (b):
‘‘(b) The procedures shall provide that, in the computa-
tion of any period described in this subchapter—
‘‘(1) the day of the act, event, or default from
which the designated period of time begins to run not
be included; and
‘‘(2) the last day after such act, event, or default
be included, unless—
‘‘(A) such last day is a Saturday, a Sun-
day, or a legal holiday; or
‘‘(B) in the case of a filing of a paper at
the General Accounting Office or a Federal agen-
cy, such last day is a day on which weather or
other conditions make the General Accounting
Office or Federal agency inaccessible, in which
143
event the next day that is not a Saturday, Sun-
day, or legal holiday shall be included.’’.
(b) ELECTRONIC FILINGS
AND DISSEMINATIONS.—
Such section, as amended by subsection (a), is further
amended by inserting after subsection (b) the following new
subsection:
‘‘(c) The Comptroller General may prescribe proce-
dures for the electronic filing and dissemination of docu-
ments and information required under this subchapter. In
prescribing such procedures, the Comptroller General shall
consider the ability of all parties to achieve electronic access
to such documents and records.’’.
(c) REPEAL OF OBSOLETE DEADLINE.—Subsection (a)
of such section is amended by striking out ‘‘Not later than
January 15, 1985, the’’ and inserting in lieu thereof ‘‘The’’.
PART II—PROTESTS IN PROCUREMENTS OF
AUTOMATIC DATA PROCESSING
SEC. 1431. PERIODS FOR CERTAIN ACTIONS.
(a) SUSPENSION OF PROCUREMENT AUTHORITY.—(1)
Paragraph (2)(B) of section 111(f) of the Federal Property
and Administrative Services Act of 1949 (40 U.S.C. 759(f))
is amended—
(A) by redesignating clauses (i) and (ii) as
subclauses (I) and (II), respectively;
(B) by inserting ‘‘(i)’’ after ‘‘(B)’’; and
144
(C) by adding at the end the following:
‘‘(ii) A suspension under this subparagraph shall not
preclude the Federal agency concerned from continuing the
procurement process up to but not including award of the
contract if the Board determines such action is in the best
interests of the United States.’’.
(2) Paragraph (3) of such section is amended by strik-
ing out subparagraph (A) and inserting in lieu thereof the
following:
‘‘(A)(i) If, with respect to an award of a contract, the
board receives notice of a protest under this subsection with-
in the period described in clause (ii), the board shall, at
the request of an interested party, hold a hearing to deter-
mine whether the board should suspend the procurement au-
thority of the Administrator or the Administrator’s delega-
tion of procurement authority for the protested procurement
on an interim basis until the board can decide the protest.
‘‘(ii) The period referred to in clause (i) is the period
beginning on the date on which the contract is awarded and
ending on the later of—
‘‘(I) the date that is 8 working days after such
contract award date; or
‘‘(II) in the case of a procurement with respect
to which an unsuccessful offeror has requested a de-
briefing in accordance with section 303B(e), the date
145
that is 5 working days after the date on which the
Federal agency debriefs the unsuccessful offeror.
‘‘(iii) The board shall hold the requested hearing with-
in 7 working days after the date of the filing of the protest.’’.
(b) RESOLUTION OF AMENDMENTS TO PROTESTS.—
Paragraph (4)(B) of such section is amended by adding at
the end the following: ‘‘An amendment which adds a new
ground of protest should be resolved, to the maximum extent
practicable, within the time limits established for resolution
of the initial protest.’’.
SEC. 1432. DISMISSALS OF FRIVOLOUS PROTESTS AND RE-
COVERY OF COSTS.
Section 111(f)(4) of the Federal Property and Admin-
istrative Services Act of 1949 (40 U.S.C. 759(f)(4)) is
amended by striking out subparagraph (C) and inserting
in lieu thereof the following new subparagraphs:
‘‘(C) The board may dismiss a protest that the board
determines—
‘‘(i) is frivolous;
‘‘(ii) has been brought in bad faith; or
‘‘(iii) does not state on its face a valid basis for
protest.
‘‘(D) If the board makes a determination under sub-
paragraph (C), the board may impose appropriate sanc-
tions. Such sanctions may include imposition of liability
146
on the protester, or other interested party who joins the pro-
test, for payment to the United States of all or that portion
of the United States costs, for which such a finding is made,
of reviewing the protest, including the fees and other ex-
penses (as defined in section 2412(d)(2)(A) of title 28) in-
curred by the United States in defending the protest. The
Federal Acquisition Regulation shall provide guidance
under which the head of an agency may initiate action to
obtain such costs, unless (i) special circumstances would
make such payment unjust, or (ii) the protester obtains doc-
uments or other information for the first time, after the pro-
test is filed with the board, which establishes that the protest
or a portion is frivolous or has not been brought in good
faith and the protester then promptly withdraws the protest
or portion of the protest.’’.
SEC. 1433. AWARD OF COSTS.
Section 111(f)(5) of the Federal Property and Admin-
istrative Services Act of 1949 (40 U.S.C. 759(f)(5)) is
amended by striking out subparagraph (C) and inserting
in lieu thereof the following:
‘‘(C) Whenever the board makes such a determination,
it may, in accordance with section 1304 of title 31, United
States Code, further declare an appropriate prevailing
party to be entitled to the cost of filing and pursuing the
protest (including reasonable attorney’s fees and consultant
147
and expert witness fees), and bid and proposal prepara-
tion.’’.
SEC. 1434. DISMISSAL AGREEMENTS.
Section 111(f)(5) of the Federal Property and Admin-
istrative Services Act of 1949 (40 U.S.C. 759(f)(5)), as
amended by section 1434, is further amended by adding at
the end the following new subparagraphs:
‘‘(D) Any agreement that provides for the dismissal
of a protest and involves a direct or indirect expenditure
of appropriated funds shall be submitted to the board and
shall be made a part of the public record (subject to any
protective order considered appropriate by the board) before
dismissal of the protest. If a Federal agency is a party to
a settlement agreement, the submission of the agreement
submitted to the board shall include a memorandum, signed
by the contracting officer concerned, that describes in detail
the procurement, the grounds for protest, the Federal Gov-
ernment’s position regarding the grounds for protest, the
terms of the settlement, and the agency’s position regarding
the propriety of the award or proposed award of the con-
tract at issue in the protest.
‘‘(E) Payment of amounts due from an agency under
subparagraph (C) or under the terms of a settlement agree-
ment under subparagraph (D) shall be made from the ap-
propriation made by section 1304 of title 31, United States
148
Code, for the payment of judgments. The Federal agency
concerned shall reimburse that appropriation account out
of funds available for the procurement.’’.
SEC. 1435. MATTERS TO BE COVERED IN REGULATIONS.
Section 111(f) of the Federal Property and Adminis-
trative Services Act of 1949 (40 U.S.C. 759(f)) is amend-
ed—
(1) by striking out paragraph (8);
(2) by redesignating paragraph (9) as para-
graph (8); and
(3) by inserting after paragraph (6) the follow-
ing:
‘‘(7)(A) The board shall adopt and issue such rules and
procedures as may be necessary to the expeditious disposi-
tion of protests filed under the authority of this subsection.
‘‘(B) The procedures shall provide that, in the com-
putation of any period described in this subsection—
‘‘(i) the day of the act, event, or default from
which the designated period of time begins to run not
be included; and
‘‘(ii) the last day after such act, event, or default
be included, unless—
‘‘(I) such last day is a Saturday, a Sunday,
or a legal holiday; or
149
‘‘(II) in the case of a filing of a paper at
the board, such last day is a day on which
weather or other conditions make the board or
Federal agency inaccessible, in which event the
next day that is not a Saturday, Sunday, or
legal holiday shall be included.
‘‘(C) The procedures may provide for electronic filing
and dissemination of documents and information required
under this subsection and in so providing shall consider the
ability of all parties to achieve electronic access to such doc-
uments and records.’’.
SEC. 1436. OVERSIGHT OF ACQUISITION OF AUTOMATIC
DATA PROCESSING EQUIPMENT BY FEDERAL
AGENCIES.
Section 111 of the Federal Property and Administra-
tive Services Act of 1949 (40 U.S.C. 759) is amended by
adding at the end the following new subsection:
‘‘(h)(1) The Administrator shall collect and compile
data regarding the procurement of automatic data process-
ing equipment under this section. The data collected and
compiled shall include, at a minimum, with regard to each
procurement the following:
‘‘(A) The procuring agency.
‘‘(B) The contractor.
150
‘‘(C) The automatic data processing equipment
and services procured.
‘‘(D) The manufacturer of the equipment pro-
cured.
‘‘(E) The amount of the contract, to the extent
that the amount is not proprietary information.
‘‘(F) The type of contract used.
‘‘(G) The extent of competition for award.
‘‘(H) Compatibility restrictions.
‘‘(I) Significant modifications of the contract.
‘‘(J) Contract price, to the extent that the price
is not proprietary information.
‘‘(2) The head of each Federal agency shall report to
the Administrator in accordance with regulations issued by
the Administrator all information that the Administrator
determines necessary in order to satisfy the requirements
in paragraph (1).
‘‘(3) The Administrator shall—
‘‘(A) carry out a systematic, periodic review of
information received under this subsection; and
‘‘(B) use such information, as appropriate, to de-
termine the compliance of Federal agencies with the
requirements of this section.’’.
151
Subtitle E—Policy, Definitions, and
Other Matters
PART I—ARMED SERVICES ACQUISITIONS
SEC. 1501. CONGRESSIONAL DEFENSE PROCUREMENT POL-
ICY.
Section 2301 of title 10, United States Code, is amend-
ed to read as follows:
‘‘§ 2301. Congressional defense procurement policy
‘‘(a) The Congress finds that in order to ensure na-
tional defense preparedness; conserve fiscal resources; en-
hance science and technology, research and development,
and production capability; provide for continued develop-
ment and preservation of an efficient and responsive defense
industrial base; and ensure the financial and ethical integ-
rity of defense procurement programs, it is in the interest
of the United States that property and services be acquired
for the Department of Defense in the most timely, economic,
and efficient manner consistent with achieving an optimum
balance among efficient processes, full and open access to
the procurement system, and sound implementation of so-
cioeconomic policies. It is therefore the policy of Congress
that—
‘‘(1) full and open competitive procedures shall
be used by the Department of Defense in accordance
with the requirements of this chapter;
152
‘‘(2) to the maximum extent practicable, the De-
partment of Defense shall acquire commercial items to
meet its needs and shall require prime contractors
and subcontractors, at all levels, which furnish other
than commercial items, to incorporate to the maxi-
mum extent practicable commercial items as compo-
nents of items being supplied to the Department;
‘‘(3) when commercial items and components are
not available, practicable, or cost effective, the De-
partment of Defense shall acquire, and shall require
prime contractors and subcontractors to incorporate,
nondevelopmental items and components to the maxi-
mum extent practicable;
‘‘(4) property and services for the Department of
Defense may be acquired by any kind of contract,
other than cost-plus-a-percentage-of-cost contracts, but
including multiyear contracts, that will promote the
interest of the United States and will provide for ap-
propriate allocation of risk between the Government
and the contractor with due regard to the nature of
the property or services to be acquired;
‘‘(5) contracts, when appropriate, shall provide
incentives to contractors to improve productivity
through investment in capital facilities, equipment,
153
flexible manufacturing processes, and advanced and
dual-use technology;
‘‘(6) contracts for advance procurement of com-
ponents, parts, and materials necessary for manufac-
ture or for logistics support of a weapon system
should, if practicable, be entered into in a manner to
achieve economic-lot purchases and more efficient pro-
duction rates;
‘‘(7) procurement protests and disputes shall be
fairly and expeditiously resolved through uniform in-
terpretation of relevant laws and regulations;
‘‘(8) the head of an agency shall use advance
procurement planning and market research and de-
velop contract requirements in such a manner as is
necessary to obtain full and open competition with
due regard to the nature of the property or services
to be acquired; but may restrict competitions to sup-
pliers of commercial items to foster accomplishment of
the above objective; and
‘‘(9) the head of an agency shall develop and
maintain an acquisition career management program
to ensure a professional acquisition work force in ac-
cordance with the requirements of chapter 87 of this
title.
154
‘‘(b) Further, it is the policy of Congress that procure-
ment policies and procedures for the agencies named in sec-
tion 2303 of this title shall, in accordance with the require-
ments of this title—
‘‘(1) be issued in accordance with and conform
to the requirements of sections 22 and 25 of the Office
of Federal Procurement Policy Act (41 U.S.C. 418b
and 421);
‘‘(2) promote and implement the Congressional
policies in subsection (a) of this section and section
2 of the Office of Federal Procurement Policy Act (41
U.S.C. 401);
‘‘(3) be implemented to support the requirements
of such agencies in time of war or national emergency
as well as in peacetime;
‘‘(4) promote responsiveness of the procurement
system to agency needs by—
‘‘(A) simplifying and streamlining procure-
ment processes; and
‘‘(B) providing incentives to encourage con-
tractors to take actions and make recommenda-
tions that would reduce the costs of property or
services to be acquired;
‘‘(5) facilitate the acquisition of commercial
items and commercial components at or based on
155
commercial market prices, without requiring contrac-
tors to change their business practices; and
‘‘(6) promote the acquisition and use of commer-
cial 
items, 
commercial 
components, 
and
nondevelopmental items by requiring descriptions of
agency requirements, whenever practicable, in terms
of functions to be performed or performance required.
‘‘(c) Further, it is the policy of Congress that 20 per-
cent of the purchases and contracts entered into under this
chapter should be placed with small business concerns and
that 5 percent of the purchases and contracts entered into
under this chapter should be placed with concerns that are
small disadvantaged businesses.
‘‘(d) It is also the policy of Congress that qualified
nonprofit agencies for the blind or severely handicapped (as
defined in section 2410d(b) of this title) shall be afforded
the maximum practicable opportunity to provide approved
commodities and services (as defined in such section) as
subcontractors and suppliers under contracts awarded by
the Department of Defense.’’.
SEC. 1502. DEFINITIONS.
Section 2302 of title 10, United States Code, is amend-
ed—
(1) by striking out paragraphs (3) and (7);
156
(2) by redesignating paragraph (6) as para-
graph (12);
(3) by redesignating paragraphs (2), (4), and (5)
as paragraphs (5), (8), and (9), respectively;
(4) by inserting after paragraph (1) the follow-
ing new paragraphs:
‘‘(2) The term ‘procurement’ includes all stages
of the process of acquiring property or services, begin-
ning with the process for determining a need for
property or services and ending with contract comple-
tion and closeout.
‘‘(3) The term ‘procurement system’ means the
integration of the procurement process, the profes-
sional development of procurement personnel, and the
management structure for carrying out the procure-
ment function.
‘‘(4) The term ‘standards’ means the criteria for
determining the effectiveness of the procurement sys-
tem by measuring the performance of the various ele-
ments of such system.’’;
(5) by inserting after paragraph (5) (as so redes-
ignated) the following new paragraphs:
‘‘(6) The term ‘full and open competition’, when
used with respect to a procurement, means that all re-
157
sponsible sources are permitted to submit sealed bids
or competitive proposals on the procurement.
‘‘(7) The term ‘responsible source’ means a pro-
spective contractor who—
‘‘(A) has adequate financial resources to per-
form the contract or the ability to obtain such
resources;
‘‘(B) is able to comply with the required or
proposed delivery or performance schedule, tak-
ing into consideration all existing commercial
and Government business commitments;
‘‘(C) has a satisfactory performance record;
‘‘(D) has a satisfactory record of integrity and
business ethics;
‘‘(E) has the necessary organization, experi-
ence, accounting and operational controls, and
technical skills, or the ability to obtain such or-
ganization, experience, controls, and skills;
‘‘(F) has the necessary production, construc-
tion, and technical equipment and facilities, or
the ability to obtain such equipment and facili-
ties; and
‘‘(G) is otherwise qualified and eligible, to re-
ceive an award under applicable laws and regu-
lations.’’; and
158
(6) by inserting after paragraph (9) (as so redes-
ignated) the following new paragraphs:
‘‘(10) The term ‘item’, ‘item of supply’, or ‘sup-
plies’ means any individual part, component, sub-
assembly, assembly, or subsystem integral to a major
system, and other property which may be replaced
during the service life of the system, and includes
spare parts and replenishment spare parts, but does
not include packaging or labeling associated with
shipment or identification of an ‘item’.
‘‘(11) 
The 
terms 
‘commercial 
item’,
‘nondevelopmental item’, ‘component’, and ‘commer-
cial component’ have the meanings given such terms
in section 2281 of this title.’’.
SEC. 1503. DELEGATION OF PROCUREMENT FUNCTIONS.
(a) CONSOLIDATION OF DELEGATION AUTHORITY.—
(1) Section 2311 of title 10, United States Code, is amended
to read as follows:
‘‘§ 2311. Assignment and delegation of procurement
functions and responsibilities
‘‘(a) IN GENERAL.—Except to the extent expressly pro-
hibited by another provision of law, the head of an agency
may delegate, subject to his direction, to any other officer
or official of that agency, any power under this chapter.
159
‘‘(b) PROCUREMENTS FOR OR WITH OTHER AGEN-
CIES.—Subject to subsection (a), to facilitate the procure-
ment of property and services covered by this chapter by
each agency named in section 2303 of this title for any other
agency, and to facilitate joint procurement by those agen-
cies—
‘‘(1) the head of an agency may, within his
agency, delegate functions and assign responsibilities
relating to procurement;
‘‘(2) the heads of two or more agencies may by
agreement delegate procurement functions and assign
procurement responsibilities from one agency to an-
other of those agencies or to an officer or civilian em-
ployee of another of those agencies; and
‘‘(3) the heads of two or more agencies may cre-
ate joint or combined offices to exercise procurement
functions and responsibilities.
‘‘(c) APPROVAL OF TERMINATIONS AND REDUCTIONS
OF JOINT ACQUISITION PROGRAMS.—(1) The Secretary of
Defense shall prescribe regulations that prohibit each mili-
tary department participating in a joint acquisition pro-
gram approved by the Under Secretary of Defense for Ac-
quisition and Technology from terminating or substantially
reducing its participation in such program without the ap-
proval of the Under Secretary.
160
‘‘(2) The regulations shall include the following provi-
sions:
‘‘(A) A requirement that, before any such termi-
nation or substantial reduction in participation is
approved, the proposed termination or reduction be
reviewed by the Joint Requirements Oversight Council
of the Department of Defense.
‘‘(B) A provision that authorizes the Under Sec-
retary of Defense for Acquisition and Technology to
require a military department whose participation in
a joint acquisition program has been approved for
termination or substantial reduction to continue to
provide some or all of the funding necessary for the
acquisition program to be continued in an efficient
manner.’’.
(2) The table of sections at the beginning of chapter
137 of such title is amended by striking out the item relat-
ing to section 2311 and inserting in lieu thereof the follow-
ing:
‘‘2311. Assignment and delegation of procurement functions and responsibil-
ities.’’.
(b) CONFORMING REPEAL.—(1) Section 2308 of title
10, United States Code, is repealed.
(2) The table of sections at the beginning of chapter
137 of such title is amended by striking out the item related
to section 2308.
161
SEC. 1504. DETERMINATIONS AND DECISIONS.
Section 2310 of title 10, United States Code, is amend-
ed to read as follows:
‘‘§ 2310. Determinations and decisions
‘‘(a) INDIVIDUAL
OR CLASS DETERMINATIONS
AND
DECISIONS AUTHORIZED.—Determinations and decisions
required to be made under this chapter by the head of an
agency may be made for an individual purchase or contract
or, except to the extent expressly prohibited by another pro-
vision of law, for a class of purchases or contracts. Such
determinations and decisions are final.
‘‘(b) WRITTEN FINDINGS REQUIRED.—(1) Each deter-
mination or decision under section 2306(g)(1), 2307(c), or
2313(c) of this title shall be based on a written finding by
the person making the determination or decision. The find-
ing shall set out facts and circumstances that support the
determination or decision.
‘‘(2) Each finding referred to in paragraph (1) shall
be final. The head of the agency making such finding shall
maintain a copy of the finding for not less than 6 years
after the date of the determination or decision.’’.
SEC. 1505. RESTRICTIONS ON UNDEFINITIZED CONTRAC-
TUAL ACTIONS
(a) CLARIFICATION OF LIMITATION.—Subsection (b) of
section 2326 of title 10, United States Code, is amended—
162
(1) in the subsection caption, by striking out
‘‘AND EXPENDITURE’’;
(2) in paragraph (1)(B), by striking out ‘‘or ex-
pended’’;
(3) in paragraph (2), by striking out ‘‘expend’’
and inserting in lieu thereof ‘‘obligate’’; and
(4) in paragraph (3)—
(A) by striking out ‘‘expended’’ and insert-
ing in lieu thereof ‘‘obligated’’; and
(B) by striking out ‘‘expend’’ and inserting
in lieu thereof ‘‘obligate’’.
(b) WAIVER AUTHORITY.—Such subsection is further
amended—
(1) by redesignating paragraph (4) as para-
graph (5); and
(2) by inserting after paragraph (3) the follow-
ing new paragraph (4):
‘‘(4) The head of an agency may waive the provisions
of this subsection with respect to a contract of that agency
if such head of an agency determines that the waiver is
necessary in order to support a contingency operation.’’.
(c) INAPPLICABILITY OF RESTRICTIONS TO CONTRACTS
WITHIN
THE SIMPLIFIED ACQUISITION THRESHOLD.—
Subsection (g)(1)(B) of such section is amended by striking
163
out ‘‘small purchase threshold’’ and inserting in lieu thereof
‘‘simplified acquisition threshold’’.
SEC. 1506. REPEAL OF REQUIREMENT RELATING TO PRO-
DUCTION SPECIAL TOOLING AND PRODUC-
TION SPECIAL TEST EQUIPMENT.
(a) REPEAL.—Section 2329 of title 10, United States
Code, is repealed.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 137 of such title is amended by
striking out the item related to section 2329.
SEC. 1507. REGULATIONS FOR BIDS.
Section 2381(a) of title 10, United States Code, is
amended by striking out ‘‘(a) The Secretary’’ and all that
follows through the end of paragraph (1) and inserting in
lieu thereof the following:
‘‘(a) The Secretary of Defense or the Secretary of a
military department may—
‘‘(1) prescribe regulations for the preparation,
submission, and opening of bids for contracts; and’’.
PART II—CIVILIAN AGENCY ACQUISITIONS
SEC. 1551. DEFINITIONS.
(a) ADDITIONAL TERMS.—Section 309 of the Federal
Property and Administrative Services Act of 1949 (41
U.S.C. 259) is amended by adding at the end the following
new subsection:
164
‘‘(d) The terms ‘commercial item’, ‘nondevelopmental
item’, ‘component’, and ‘commercial component’ have the
same meanings provided such terms in section 315 of this
title.’’.
(b) CONFORMING AMENDMENTS.—Section 4 of the Of-
fice of Federal Procurement Policy Act (41 U.S.C. 403) is
amended—
(1) by striking out ‘‘Act—’’and inserting in lieu
thereof ‘‘Act:’’;
(2) by capitalizing the initial letter in the first
word of each paragraph;
(3) by striking out the semicolon at the end of
each of paragraphs (1), (2), (3), (5), (6), (7), (8), and
(9) and inserting in lieu thereof a period; and
(4) in paragraphs (4) and (10), by striking out
‘‘; and’’ at the end and inserting in lieu thereof a pe-
riod.
SEC. 1552. DELEGATION OF PROCUREMENT FUNCTIONS.
Title III of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 et seq.), as amended
by section 1301, is further amended by adding at the end
the following new section:
165
‘‘SEC. 312. ASSIGNMENT AND DELEGATION OF PROCURE-
MENT FUNCTIONS AND RESPONSIBILITIES.
‘‘(a) IN GENERAL.—Except to the extent expressly pro-
hibited by another provision of law, an agency head may
delegate, subject to his direction, to any other officer or offi-
cial of that agency, any power under this title.
‘‘(b) PROCUREMENTS FOR OR WITH OTHER AGEN-
CIES.—Subject to subsection (a), to facilitate the procure-
ment of property and services covered by this title by each
executive agency for any other executive agency, and to fa-
cilitate joint procurement by those executive agencies—
‘‘(1) an agency head may, within his executive
agency, delegate functions and assign responsibilities
relating to procurement;
‘‘(2) the heads of two or more executive agencies
may by agreement delegate procurement functions
and assign procurement responsibilities from one ex-
ecutive agency to another of those executive agencies
or to an officer or civilian employee of another of
those executive agencies; and
‘‘(3) the heads of two or more executive agencies
may create joint or combined offices to exercise pro-
curement functions and responsibilities.’’.
SEC. 1553. DETERMINATIONS AND DECISIONS.
Title III of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 et seq.), as amended
166
by section 1552, is further amended by adding at the end
the following new section:
‘‘SEC. 313. DETERMINATIONS AND DECISIONS.
‘‘(a) INDIVIDUAL
OR CLASS DETERMINATIONS
AND
DECISIONS AUTHORIZED.—Determinations and decisions
required to be made under this title by an agency head may
be made for an individual purchase or contract or, except
to the extent expressly prohibited by another provision of
law, for a class of purchases or contracts. Such determina-
tions and decisions are final.
‘‘(b) WRITTEN FINDINGS REQUIRED.—(1) Each deter-
mination under section 305(c) shall be based on a written
finding by the person making the determination or decision.
The finding shall set out facts and circumstances that sup-
port the determination or decision.
‘‘(2) Each finding referred to in paragraph (1) shall
be final. The agency head making such finding shall main-
tain a copy of the finding for not less 6 years after the
date of the determination or decision.’’.
SEC. 1554. RESTRICTIONS ON UNDEFINITIZED CONTRAC-
TUAL ACTIONS.
Title III of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 et seq.), as amended
by section 1553, is further amended by adding at the end
the following new section:
167
‘‘SEC. 314. UNDEFINITIZED CONTRACTUAL ACTIONS: RE-
STRICTIONS.
‘‘(a) IN GENERAL.—An agency head may not enter
into an undefinitized contractual action unless the request
to the agency head for authorization of the contractual ac-
tion includes a description of the anticipated effect on re-
quirements of the executive agency concerned if a delay is
incurred for purposes of determining contractual terms,
specifications, and price before performance is begun under
the contractual action.
‘‘(b) LIMITATIONS ON OBLIGATIONS OF FUNDS.—(1)
A contracting officer of an executive agency may not enter
into an undefinitized contractual action unless the contrac-
tual action provides for agreement upon contractual terms,
specifications, and price by the earlier of—
‘‘(A) the end of the 180-day period beginning on
the date on which the contractor submits a qualifying
proposal (as defined in subsection (f)) to definitize the
contractual terms, specifications, and price; or
‘‘(B) the date on which the amount of funds obli-
gated under the contractual action is equal to more
than 50 percent of the negotiated overall ceiling price
for the contractual action.
‘‘(2) Except as provided in paragraph (3), the con-
tracting officer for an undefinitized contractual action may
not obligate with respect to such contractual action an
168
amount that is equal to more than 50 percent of the nego-
tiated overall ceiling price until the contractual terms, spec-
ifications, and price are definitized for such contractual ac-
tion.
‘‘(3) If a contractor submits a qualifying proposal (as
defined in subsection (f)) to definitize an undefinitized con-
tractual action before an amount equal to more than 50
percent of the negotiated overall ceiling price is obligated
on such action, the contracting officer for such action may
not obligate with respect to such contractual action an
amount that is equal to more than 75 percent of the nego-
tiated overall ceiling price until the contractual terms, spec-
ifications, and price are definitized for such contractual ac-
tion.
‘‘(4) This subsection does not apply to an undefinitized
contractual action for the purchase of initial spares.
‘‘(c) INCLUSION OF NON-URGENT REQUIREMENTS.—
Requirements for spare parts and support equipment that
are not needed on an urgent basis may not be included in
an undefinitized contractual action for spare parts and
support equipment that are needed on an urgent basis un-
less the agency head approves such inclusion as being—
‘‘(1) good business practice; and
‘‘(2) in the best interests of the United States.
169
‘‘(d) MODIFICATION
OF SCOPE.—The scope of an
undefinitized contractual action under which performance
has begun may not be modified unless the agency head ap-
proves such modification as being—
‘‘(1) good business practice; and
‘‘(2) in the best interests of the United States.
‘‘(e) ALLOWABLE PROFIT.—An agency head shall en-
sure that the profit allowed on an undefinitized contractual
action for which the final price is negotiated after a sub-
stantial portion of the performance required is completed
reflects—
‘‘(1) the possible reduced cost risk of the contrac-
tor with respect to costs incurred during performance
of the contract before the final price is negotiated; and
‘‘(2) the reduced cost risk of the contractor with
respect to costs incurred during performance of the re-
maining portion of the contract.
‘‘(f) DEFINITIONS.—In this section:
‘‘(1) The term ‘undefinitized contractual action’
means a new procurement action entered into by an
agency head for which the contractual terms, speci-
fications, or price are not agreed upon before perform-
ance is begun under the action. Such term does not
include contractual actions with respect to the follow-
ing:
170
‘‘(A) Purchases in an amount not in excess
of the amount of the simplified acquisition
threshold.
‘‘(B) Congressionally mandated long-lead
procurement contracts.
‘‘(2) The term ‘qualifying proposal’ means a pro-
posal that contains sufficient information to enable
the agency head concerned to conduct complete and
meaningful audits of the information contained in the
proposal and of any other information that the agen-
cy head is entitled to review in connection with the
contract, as determined by the contracting officer.’’.
TITLE II—CONTRACT
ADMINISTRATION
Subtitle A—Contract Payment
PART I—ARMED SERVICES ACQUISITIONS
SEC. 2001. CONTRACT FINANCING.
(a) REORGANIZATION OF PRINCIPAL AUTHORITY PRO-
VISION.—Section 2307 of title 10, United States Code, is
amended—
(1) by striking out the section heading and in-
serting in lieu thereof the following:
‘‘§ 2307. Contract financing’’;
(2) by inserting ‘‘PAYMENT AUTHORITY.—’’ after
‘‘(a)’’ in subsection (a);
171
(3) by inserting ‘‘PAYMENT AMOUNT.—’’ after
‘‘(b)’’ in subsection (b);
(4) by inserting ‘‘SECURITY FOR ADVANCE PAY-
MENTS.—’’ after ‘‘(c)’’ in subsection (c);
(5) by inserting ‘‘CONDITIONS FOR PROGRESS
PAYMENTS.—’’ after ‘‘(d)’’ in subsection (d)’’; and
(6) by striking out ‘‘(e)(1) In any case’’ and in-
serting in lieu thereof ‘‘(g) ACTION
IN CASE
OF
FRAUD.—(1) In any case’’.
(b) TERMINOLOGY CORRECTION.—Such section is fur-
ther amended in subsection (a)(2) by striking out ‘‘bid’’.
(c) EFFECTIVE DATE OF LIEN RELATED TO ADVANCE
PAYMENTS.—Such section is further amended in subsection
(c) by inserting before the period at the end of the third
sentence the following: ‘‘and is effective immediately upon
the first advancement of funds without filing, notice, or any
other action by the United States’’.
(d) CONDITIONS
FOR PROGRESS PAYMENTS.—Such
section is further amended in subsection (d)—
(1) in the first sentence of paragraph (1), by
striking out ‘‘work, which’’ and all that follows
through ‘‘accomplished’’ and inserting in lieu thereof
‘‘work accomplished that meets standards established
under the contract’’; and
172
(2) by striking out paragraph (3) and inserting
in lieu thereof the following:
‘‘(3) This subsection applies to a contract for an
amount equal to or greater than the simplified acquisition
threshold.’’.
(e) CONDITIONS
FOR PAYMENTS
FOR COMMERCIAL
ITEMS.—Such section is further amended by inserting after
subsection (d) the following new subsection (e):
‘‘(e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL
ITEMS.—(1) Payments under subsection (a) for commercial
items, as that term is defined in section 2281 of this title,
may be made under such terms and conditions as the head
of the agency determines are appropriate or customary in
the commercial marketplace. The head of the agency shall
obtain adequate security for such payments. If the security
is in the form of a lien in favor of the United States, such
lien is paramount to all other liens and is effective imme-
diately upon the first payment, without filing, notice, or
other action by the United States.
‘‘(2) Advance payments made under subsection (a) for
commercial items may include payments, in a total amount
of not more than 15 percent of the contract price, in ad-
vance of any performance of work under the contract.
173
‘‘(3) The conditions of subsections (c) and (d) do not
apply to payments made for commercial items in accord-
ance with this subsection.’’.
(f) NAVY CONTRACTS.—Such section is further amend-
ed by inserting after subsection (e) the following new sub-
section (f):
‘‘(f) CERTAIN NAVY CONTRACTS.—(1) The Secretary of
the Navy shall provide that the rate for progress payments
on any contract awarded by the Secretary for repair, main-
tenance, or overhaul of a naval vessel shall be not less
than—
‘‘(A) 95 percent, in the case of firms considered
to be small businesses; and
‘‘(B) 90 percent, in the case of all other firms.
‘‘(2) The Secretary of the Navy may advance to private
salvage companies such funds as the Secretary considers
necessary to provide for the immediate financing of salvage
operations. Advances under this paragraph shall be made
on terms that the Secretary considers adequate for the pro-
tection of the United States.
‘‘(3) The Secretary of the Navy shall ensure that, when
partial, progress, or other payments are made under a con-
tract for construction or conversion of a naval vessel, the
United States is secured by a lien upon work in progress
and on property acquired for performance of the contract
174
on account of all payments so made. The lien is paramount
to all other liens.’’.
(g) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 137 of title 10, United States Code,
is amended by striking out the item relating to section 2307
and inserting in lieu thereof the following:
‘‘2307. Contract financing.’’.
(h) REPEAL OF SUPERSEDED PROVISIONS.—
(1) PROGRESS PAYMENTS UNDER CERTAIN NAVY
CONTRACTS.—
(A) REPEAL.—Section 7312 of title 10,
United States Code, is repealed.
(B) CLERICAL AMENDMENT.—The table of
sections at the beginning of chapter 633 of such
title is amended by striking out the item relating
to section 7312.
(2) ADVANCEMENT OF PAYMENTS FOR NAVY SAL-
VAGE OPERATIONS.—
(A) REPEAL.—Section 7364 of such title is
repealed.
(B) CLERICAL AMENDMENT.—The table of
sections at the beginning of chapter 637 of such
title is amended by striking out the item relating
to section 7364.
(3) PARTIAL
PAYMENTS
UNDER
NAVY
CON-
TRACTS—
175
(A) REPEAL.—Section 7521 of such title is
repealed.
(B) CLERICAL AMENDMENT.—The table of
sections at the beginning of chapter 645 of such
title is amended by striking out the item relating
to section 7521.
(4) NAVY RESEARCH CONTRACTS.—Section 7522
of title 10, United States Code, is amended—
(A) by striking out subsection (b); and
(B) by redesignating subsection (c) as sub-
section (b).
SEC. 2002. REPEAL OF VOUCHERING PROCEDURES SEC-
TION.
(a) REPEAL.—Section 2355 of title 10, United States
Code, is repealed.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 139 of such title is amended by
striking out the item relating to section 2355.
PART II—CIVILIAN AGENCY ACQUISITIONS
SEC. 2051. CONTRACT FINANCING.
(a) REORGANIZATION OF PRINCIPAL AUTHORITY PRO-
VISION.—Section 305 of the Federal Property and Adminis-
trative Services Act of 1949 (41 U.S.C. 255) is amended—
176
(1) by striking out the section heading and the
section designation and inserting in lieu thereof the
following:
‘‘SEC. 305. CONTRACT FINANCING.’’;
(2) by inserting ‘‘PAYMENT AUTHORITY.—’’ after
‘‘(a)’’ in subsection (a);
(3) by inserting ‘‘PAYMENT AMOUNT.—’’ after
‘‘(b)’’ in subsection (b); and
(4) by inserting ‘‘SECURITY FOR ADVANCE PAY-
MENTS.—’’ after ‘‘(c)’’ in subsection (c).
(b) TERMINOLOGY CORRECTION.—Such section is fur-
ther amended in subsection (a)(2) by striking out ‘‘bid’’.
(c) EFFECTIVE DATE OF LIEN RELATED TO ADVANCE
PAYMENTS.—Such section is further amended in subsection
(c) by inserting before the period at the end of the third
sentence the following: ‘‘and is effective immediately upon
the first advancement of funds without filing, notice, or any
other action by the United States’’.
(d) REVISION OF CIVILIAN AGENCY PROVISION TO EN-
SURE UNIFORM REQUIREMENTS
FOR PROGRESS PAY-
MENTS.—
(1) IN
GENERAL.—Such section is further
amended by adding at the end the following new sub-
sections:
177
‘‘(d) CONDITIONS FOR PROGRESS PAYMENTS.—(1) The
agency head shall ensure that any payment for work in
progress (including materials, labor, and other items) under
a contract of an executive agency that provides for such
payments is commensurate with the work accomplished that
meets standards established under the contract. The contrac-
tor shall provide such information and evidence as the agen-
cy head determines necessary to permit the agency head to
carry out the preceding sentence.
‘‘(2) The agency head shall ensure that progress pay-
ments referred to in paragraph (1) are not made for more
than 80 percent of the work accomplished under the contract
so long as the agency head has not made the contractual
terms, specifications, and price definite.
‘‘(3) This subsection applies to a contract for an
amount equal to or greater than the simplified acquisition
threshold.
‘‘(e) CONDITIONS FOR PAYMENTS FOR COMMERCIAL
ITEMS.—(1) Payments under subsection (a) for commercial
items, as that term is defined in section 315 of this title,
may be made under such terms and conditions as the head
of the agency determines are appropriate or customary in
the commercial marketplace. The head of the agency shall
obtain adequate security for such payments. If the security
is in the form of a lien in favor of the United States, such
180
‘‘(7) Each agency head who receives recommendations
made by a remedy coordination official of the executive
agency to reduce or suspend payments under paragraph (2)
during a fiscal year shall prepare for such year a report
that contains the recommendations, the actions taken on the
recommendations and the reasons for such actions, and an
assessment of the effects of such actions on the Federal Gov-
ernment. Any such report shall be available to any Member
of Congress upon request.
‘‘(8) An agency head may not delegate responsibilities
under this subsection to any person in a position below level
IV of the Executive Schedule.
‘‘(9) In this subsection, the term ‘remedy coordination
official’, with respect to an executive agency, means the per-
son or entity in that executive agency who coordinates with-
in that executive agency the administration of criminal,
civil, administrative, and contractual remedies resulting
from investigations of fraud or corruption related to pro-
curement activities.’’.
(2) RELATIONSHIP
TO
PROMPT
PAYMENT
RE-
QUIREMENTS.—The amendments made by paragraph
(1) are not intended to impair or modify procedures
required by the provisions of chapter 39 of title 31,
United States Code, and the regulations issued pursu-
ant to such provisions of law, that relate to progress
181
payment requests, as such procedures are in effect on
the date of the enactment of this Act.
PART III—ACQUISITIONS GENERALLY
SEC. 2061. INTEREST PENALTY ON CONTRACT CLOSE-OUT
LAG-TIME.
Section 3903(a)(1) of title 31, United States Code, is
amended—
(1) by striking out ‘‘or’’ at the end of subpara-
graph (A);
(2) by inserting ‘‘or’’ after the semicolon at the
end of subparagraph (B); and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) in any case in which the Government
delays making final payment under the contract
for more than one year after the date on which
the last item of property is delivered or final
performance of the services is completed under
the contract, the date on which such last delivery
is made or service completed;’’.
182
Subtitle B—Cost Principles
PART I—ARMED SERVICES ACQUISITIONS
SEC. 2101. ALLOWABLE CONTRACT COSTS.
(a) COMPTROLLER
GENERAL
EVALUATION.—Sub-
section (l) of section 2324 of title 10, United States Code,
is amended to read as follows:
‘‘(l) The Comptroller General shall periodically evalu-
ate the implementation of this section by the Secretary of
Defense. Such evaluation shall consider the extent to
which—
‘‘(1) the implementation is consistent with con-
gressional intent;
‘‘(2) the implementation achieves the objective of
eliminating unallowable costs charged to covered con-
tracts; and
‘‘(3) the implementation (as well as the provi-
sions of this section and the regulations prescribed
under this section) could be improved or strength-
ened.’’.
(b) COVERED CONTRACT DEFINED.—Subsection (m) of
such section is amended to read as follows:
‘‘(m) In this section, the term ‘covered contract’ means
a contract for an amount in excess of $500,000 that is en-
tered into by the Department of Defense, except that such
term does not include a fixed-price contract without cost
183
incentives or any contract for the purchase of commercial
items (as defined in section 2281 of this title).’’.
SEC. 2102. REPEAL OF CONTRACT PROFIT CONTROLS DUR-
ING EMERGENCY PERIODS.
(a) REPEAL.—Section 2382 of title 10, United States
Code, is repealed.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 141 of such title is amended by
striking out the item relating to section 2382.
PART II—CIVILIAN AGENCY ACQUISITIONS
SEC. 2151. ALLOWABLE CONTRACT COSTS.
Section 306 of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 256) is amended to
read as follows:
‘‘SEC. 306. ALLOWABLE COSTS.
‘‘(a) INDIRECT COST THAT VIOLATES A FAR COST
PRINCIPLE.—The head of an executive agency shall require
that a covered contract provide that if the contractor sub-
mits to the executive agency a proposal for settlement of
indirect costs incurred by the contractor for any period
after such costs have been accrued and if that proposal in-
cludes the submission of a cost which is unallowable because
the cost violates a cost principle in the Federal Acquisition
Regulation (referred to in section 25(c)(1) of the Office of
Federal Procurement Policy Act (41 U.S.C. 421(c)(1)) or
184
an executive agency’s supplement to the Federal Acquisition
Regulation, the cost shall be disallowed.
‘‘(b) PENALTY FOR VIOLATION OF COST PRINCIPLE.—
(1) If the agency head determines that a cost submitted by
a contractor in its proposal for settlement is expressly unal-
lowable under a cost principle referred to in subsection (a)
that defines the allowability of specific selected costs, the
agency head shall assess a penalty against the contractor
in an amount equal to—
‘‘(A) the amount of the disallowed cost allocated
to covered contracts for which a proposal for settle-
ment of indirect costs has been submitted; plus
‘‘(B) interest (to be computed based on provi-
sions in the Federal Acquisition Regulation) to com-
pensate the United States for the use of any funds
which a contractor has been paid in excess of the
amount to which the contractor was entitled.
‘‘(2) If the agency head determines that a proposal for
settlement of indirect costs submitted by a contractor in-
cludes a cost determined to be unallowable in the case of
such contractor before the submission of such proposal, the
agency head shall assess a penalty against the contractor
in an amount equal to two times the amount of the dis-
allowed cost allocated to covered contracts for which a pro-
posal for settlement of indirect costs has been submitted.
246
25 percent of the total number of procurement actions
executed by the agency for that year.
‘‘(h) CONTRACTING
ACTIVITIES
ORIGINALLY
EX-
CLUDED IN CERTIFICATION.—(1) If the head of an agency,
in certifying under subsection (c) that the agency has im-
plemented an interim or a full FACNET capability, deter-
mines that such implementation is not cost effective or prac-
ticable in the case of any contracting activity (or portion
thereof) of that agency, then that certification shall not
apply under section 4A(b) of the Office of Federal Procure-
ment Policy Act to any procurement action by that con-
tracting activity (or portion thereof).
‘‘(2) If the head of an agency determines that an in-
terim or a full FACNET capability has subsequently been
implemented for that contracting activity (or portion there-
of), the head of the agency shall make a certification to the
Administrator for Federal Procurement Policy in the same
manner as a certification under paragraph (1) or (2) of
subsection (c), as applicable, and such certification shall
have the same effect with respect to that contracting activity
(or portion thereof) as if made under such paragraph of
subsection (c).’’.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 137 of such title is amended by