I 
108TH CONGRESS 
2D SESSION 
H. R. 4228
To provide for an improved acquisition system. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 28, 2004
Mr. TOM DAVIS of Virginia (for himself and Mr. HUNTER) introduced the fol-
lowing bill; which was referred to the Committee on Government Reform, 
and in addition to the Committee on Armed Services, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
of such provisions as fall within the jurisdiction of the committee con-
cerned 
A BILL 
To provide for an improved acquisition system.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Acquisition System Improvement Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
TITLE I—ACQUISITION IMPROVEMENTS 
Sec. 101. Government-industry exchange program. 
Sec. 102. Share-in-savings initiatives.
Sec. 103. Inflation adjustment for acquisition-related dollar thresholds. 
Sec. 104. Agency acquisition protests. 
Sec. 105. Extension of authority for use of simplified acquisition procedures. 
Sec. 106. Redundancy in procurement of telecommunications services. 
TITLE II—CONTRACT DISPUTE ENHANCEMENT 
Subtitle A—General Provisions 
Sec. 211. Definitions. 
Subtitle B—Establishment of Civilian and Defense Boards of Contract 
Appeals 
Sec. 221. Establishment. 
Sec. 222. Membership. 
Sec. 223. Chairmen. 
Sec. 224. Rulemaking authority. 
Sec. 225. Authorization of appropriations. 
Subtitle C—Functions of Defense and Civilian Boards of Contract Appeals 
Sec. 231. Contract disputes. 
Sec. 232. Enhanced access for small business. 
Sec. 233. Applicability to certain contracts. 
Subtitle D—Transfers and Transition, Savings, and Conforming Provisions 
Sec. 241. Transfer and allocation of appropriations and personnel. 
Sec. 242. Terminations and savings provisions. 
Sec. 243. Contract disputes authority of Boards. 
Sec. 244. References to agency Boards of contract appeals. 
Sec. 245. Conforming amendments. 
Subtitle E—Effective Date; Regulations and Appointment of Chairmen 
Sec. 251. Effective date. 
Sec. 252. Regulations. 
Sec. 253. Appointment of Chairmen of Defense Board and Civilian Board.
TITLE I—ACQUISITION 
IMPROVEMENTS 
SEC. 101. GOVERNMENT-INDUSTRY EXCHANGE PROGRAM. 
(a) IN GENERAL.—Subpart B of part III of title 5, 
United States Code, is amended by adding at the end the 
following:
‘‘CHAPTER 38—ACQUISITION 
PROFESSIONAL EXCHANGE PROGRAM
‘‘Sec. 
‘‘3801. Definitions. 
‘‘3802. General provisions. 
‘‘3803. Assignment of employees to private sector organizations. 
‘‘3804. Assignment of employees from private sector organizations. 
‘‘3805. Reporting requirement. 
‘‘3806. Regulations.
‘‘§ 3801. Definitions 
‘‘For purposes of this chapter—
‘‘(1) the term ‘agency’—
‘‘(A) subject to subparagraph (B), means 
an executive agency; and 
‘‘(B) does not include—
‘‘(i) the General Accounting Office; 
‘‘(ii) an Office of Inspector General of 
an establishment or a designated Federal 
entity established under the Inspector Gen-
eral Act of 1978; and 
‘‘(iii) the Defense Contract Audit 
Agency referred to in section 2313(b) of 
title 10; and 
‘‘(2) the term ‘detail’ means—
‘‘(A) the assignment or loan of an em-
ployee of an agency to a private sector organi-
zation without a change of position from the 
agency that employs the individual, or
‘‘(B) the assignment or loan of an em-
ployee of a private sector organization to an 
agency without a change of position from the 
private sector organization that employs the in-
dividual, 
whichever is appropriate in the context in which 
such term is used. 
‘‘§ 3802. General provisions 
‘‘(a) ASSIGNMENT AUTHORITY.—On request from or 
with the agreement of a private sector organization, and 
with the consent of the employee concerned, the head of 
an agency may arrange for the assignment of an employee 
of the agency to a private sector organization or an em-
ployee of a private sector organization to the agency. An 
eligible employee is an individual who—
‘‘(1) works in the field of Federal acquisition or 
acquisition management; 
‘‘(2) is considered an exceptional performer by 
the individual’s current employer; and 
‘‘(3) is expected to assume increased acquisition 
management responsibilities in the future. 
An employee of an agency shall be eligible to participate 
in this program only if the employee is employed at the 
GS–11 level or above (or equivalent) and is serving under
a career or career-conditional appointment or an appoint-
ment of equivalent tenure in the excepted service. 
‘‘(b) AGREEMENTS.—Each agency that exercises its 
authority under this chapter shall provide for a written 
agreement between the agency and the employee con-
cerned regarding the terms and conditions of the employ-
ee’s assignment. In the case of an employee of the agency, 
the agreement shall—
‘‘(1) require the employee to serve in the civil 
service, upon completion of the assignment, for a pe-
riod equal to the length of the assignment; and 
‘‘(2) provide that, in the event the employee 
fails to carry out the agreement (except for good and 
sufficient reason, as determined by the head of the 
agency from which assigned) the employee shall be 
liable to the United States for payment of all ex-
penses of the assignment. 
An amount under paragraph (2) shall be treated as a debt 
due the United States. 
‘‘(c) TERMINATION.—Assignments may be termi-
nated by the agency or private sector organization con-
cerned for any reason at any time. 
‘‘(d) DURATION.—Assignments under this chapter 
shall be for a period of between 6 months and 1 year, 
and may be extended in 3-month increments for a total
of not more than 1 additional year, except that no assign-
ment under this chapter may commence after the end of 
the 5-year period beginning on the date of the enactment 
of this chapter. 
‘‘(e) ASSISTANCE.—The Administrator for Federal 
Procurement Policy, by agreement with the Office of Per-
sonnel Management, may assist in the administration of 
this chapter, including by maintaining lists of potential 
candidates for assignment under this chapter, establishing 
mentoring relationships for the benefit of individuals who 
are given assignments under this chapter, and publicizing 
the program. 
‘‘(f) CONSIDERATIONS.—In exercising any authority 
under this chapter, an agency shall take into consider-
ation—
‘‘(1) the need to ensure that small business con-
cerns are appropriately represented with respect to 
the assignments described in sections 3803 and 
3804, respectively; and 
‘‘(2) how assignments described in section 3803 
might best be used to help meet the needs of the 
agency for the training of employees in acquisition 
management.
‘‘§ 3803. Assignment of employees to private sector or-
ganizations 
‘‘(a) IN GENERAL.—An employee of an agency as-
signed to a private sector organization under this chapter 
is deemed, during the period of the assignment, to be on 
detail to a regular work assignment in his agency. 
‘‘(b) COORDINATION WITH CHAPTER 81.—Notwith-
standing any other provision of law, an employee of an 
agency assigned to a private sector organization under this 
chapter is entitled to retain coverage, rights, and benefits 
under subchapter I of chapter 81, and employment during 
the assignment is deemed employment by the United 
States, except that, if the employee or the employee’s de-
pendents receive from the private sector organization any 
payment under an insurance policy for which the premium 
is wholly paid by the private sector organization, or other 
benefit of any kind on account of the same injury or death, 
then, the amount of such payment or benefit shall be cred-
ited against any compensation otherwise payable under 
subchapter I of chapter 81. 
‘‘(c) REIMBURSEMENTS.—The assignment of an em-
ployee to a private sector organization under this chapter 
may be made with or without reimbursement by the pri-
vate sector organization for the travel and transportation 
expenses to or from the place of assignment, subject to 
the same terms and conditions as apply with respect to
an employee of a Federal agency or a State or local gov-
ernment under section 3375, and for the pay, or a part 
thereof, of the employee during assignment. Any reim-
bursements shall be credited to the appropriation of the 
agency used for paying the travel and transportation ex-
penses or pay. 
‘‘(d) TORT LIABILITY; SUPERVISION.—The Federal 
Tort Claims Act and any other Federal tort liability stat-
ute apply to an employee of an agency assigned to a pri-
vate sector organization under this chapter. The super-
vision of the duties of an employee of an agency so as-
signed to a private sector organization may be governed 
by an agreement between the agency and the organization. 
‘‘(e) SMALL BUSINESS CONCERNS.—
‘‘(1) IN GENERAL.—The head of each agency 
shall take such actions as may be necessary to en-
sure that, of the assignments made under this chap-
ter from such agency to private sector organizations 
in each year, at least 20 percent are to small busi-
ness concerns. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) the term ‘small business concern’ 
means a business concern that satisfies the 
definitions and standards specified by the Ad-
ministrator of the Small Business Administra-
tion under section 3(a)(2) of the Small Busi-
ness Act (as from time to time amended by the 
Administrator); 
‘‘(B) the term ‘year’ refers to the 12-
month period beginning on the date of the en-
actment of this chapter, and each succeeding 
12-month period in which any assignments 
under this chapter may be made; and 
‘‘(C) the assignments ‘made’ in a year are 
those commencing in such year. 
‘‘(3) REPORTING
REQUIREMENT.—An agency 
which fails to comply with paragraph (1) in a year 
shall, within 90 days after the end of such year, sub-
mit a report to the Committees on Government Re-
form and Small Business of the House of Represent-
atives and the Committees on Governmental Affairs 
and Small Business of the Senate. The report shall 
include—
‘‘(A) the total number of assignments 
made under this chapter from such agency to 
private sector organizations in the year; 
‘‘(B) of that total number, the number 
(and percentage) made to small business con-
cerns; and
‘‘(C) the reasons for the agency’s non-
compliance with paragraph (1). 
‘‘(4) EXCLUSION.—This subsection shall not 
apply to an agency in any year in which it makes 
fewer than 5 assignments under this chapter to pri-
vate sector organizations. 
‘‘§ 3804. Assignment of employees from private sector 
organizations 
‘‘(a) IN GENERAL.—An employee of a private sector 
organization assigned to an agency under this chapter is 
deemed, during the period of the assignment, to be on de-
tail to such agency. 
‘‘(b) TERMS AND CONDITIONS.—An employee of a 
private sector organization assigned to an agency under 
this chapter—
‘‘(1) may continue to receive pay and benefits 
from the private sector organization from which he 
is assigned; 
‘‘(2) is deemed, notwithstanding subsection (a), 
to be an employee of the agency for the purposes 
of—
‘‘(A) chapter 73; 
‘‘(B) sections 201, 203, 205, 207, 208, 
209, 603, 606, 607, 643, 654, 1905, and 1913 
of title 18;
‘‘(C) sections 1343, 1344, and 1349(b) of 
title 31; 
‘‘(D) the Federal Tort Claims Act and any 
other Federal tort liability statute; 
‘‘(E) the Ethics in Government Act of 
1978; 
‘‘(F) section 1043 of the Internal Revenue 
Code of 1986; and 
‘‘(G) section 27 of the Office of Federal 
Procurement Policy Act; 
‘‘(3) may not have access to any trade secrets 
or to any other nonpublic information which is of 
commercial value to the private sector organization 
from which he is assigned; and 
‘‘(4) is subject to such regulations as the Presi-
dent may prescribe. 
The supervision of an employee of a private sector organi-
zation assigned to an agency under this chapter may be 
governed by agreement between the agency and the private 
sector organization concerned. Such an assignment may 
be made with or without reimbursement by the agency for 
the pay, or a part thereof, of the employee during the pe-
riod of assignment, or for any contribution of the private 
sector organization to employee benefit systems.
‘‘(c) COORDINATION WITH CHAPTER 81.—An em-
ployee of a private sector organization assigned to an 
agency under this chapter who suffers disability or dies 
as a result of personal injury sustained while performing 
duties during the assignment shall be treated, for the pur-
pose of subchapter I of chapter 81, as an employee as de-
fined by section 8101 who had sustained the injury in the 
performance of duty, except that, if the employee or the 
employee’s dependents receive from the private sector or-
ganization any payment under an insurance policy for 
which the premium is wholly paid by the private sector 
organization, or other benefit of any kind on account of 
the same injury or death, then, the amount of such pay-
ment or benefit shall be credited against any compensation 
otherwise payable under subchapter I of chapter 81. 
‘‘(d) PROHIBITION AGAINST CHARGING CERTAIN 
COSTS TO THE FEDERAL GOVERNMENT.—A private sec-
tor organization may not charge the Federal Government, 
as direct or indirect costs under a Federal contract, the 
costs of pay or benefits paid by the organization to an 
employee assigned to an agency under this chapter for the 
period of the assignment. 
‘‘§ 3805. Reporting requirement 
‘‘(a) IN GENERAL.—The Office of Personnel Manage-
ment shall, not later than April 30 and October 31 of each
year, prepare and submit to the Committee on Govern-
ment Reform of the House of Representatives and the 
Committee on Governmental Affairs of the Senate a semi-
annual report summarizing the operation of this chapter 
during the immediately preceding 6-month period ending 
on March 31 and September 30, respectively. 
‘‘(b) CONTENT.—Each report shall include, with re-
spect to the 6-month period to which such report relates—
‘‘(1) the total number of individuals assigned 
to, and the total number of individuals assigned 
from, each agency during such period; 
‘‘(2) a brief description of each assignment in-
cluded under paragraph (1), including—
‘‘(A) the name of the assigned individual, 
as well as the private sector organization and 
the agency (including the specific bureau or 
other agency component) to or from which such 
individual was assigned; 
‘‘(B) the respective positions to and from 
which the individual was assigned, including the 
duties and responsibilities and the pay grade or 
level associated with each; and 
‘‘(C) the duration and objectives of the in-
dividual’s assignment; and
‘‘(3) such other information as the Office con-
siders appropriate. 
‘‘(c) PUBLICATION.—A copy of each report submitted 
under subsection (a)—
‘‘(1) shall be published in the Federal Register; 
and 
‘‘(2) shall be made publicly available on the 
Internet. 
‘‘(d) AGENCY COOPERATION.—On request of the Of-
fice, agencies shall furnish such information and reports 
as the Office may require in order to carry out this sec-
tion. 
‘‘§ 3806. Regulations 
‘‘The Director of the Office of Personnel Manage-
ment shall prescribe regulations for the administration of 
this chapter.’’. 
(b) REPORT.—Not later than 4 years after the date 
of the enactment of this Act, the General Accounting Of-
fice shall prepare and submit to the Committee on Govern-
ment Reform of the House of Representatives and the 
Committee on Governmental Affairs of the Senate a report 
on the operation of chapter 38 of title 5, United States 
Code (as added by this section). Such report shall in-
clude—
(1) an evaluation of the effectiveness of the pro-
gram established by such chapter; and 
(2) a recommendation as to whether such pro-
gram should be continued (with or without modifica-
tion) or allowed to lapse. 
(c) CLERICAL AMENDMENT.—The table of chapters 
at the beginning of part III of title 5, United States Code, 
is amended by inserting after the item relating to chapter 
37 the following:
‘‘38. Acquisition Professional Exchange Program ................ 3801’’.
(d) COORDINATION WITH ACQUISITION WORKFORCE 
PROVISIONS
OF OFFICE
OF FEDERAL PROCUREMENT 
POLICY ACT.—Section 37 of the Office of Federal Pro-
curement Policy Act (41 U.S.C. 433) is amended by add-
ing at the end the following new subsection: 
‘‘(i) AUTHORITY TO DETAIL EMPLOYEES TO NON-
FEDERAL EMPLOYERS.—(1) In carrying out the provi-
sions of this section, the Administrator, by agreement with 
the Director of the Office of Personnel Management, may 
provide for a program under which a Federal employee 
may be detailed to a non-Federal employer. The Adminis-
trator, by agreement with the Director of the Office of 
Personnel Management, shall prescribe regulations for 
such program, including the conditions for service and du-
ties as the Administrator considers necessary.
(f) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) AMENDMENTS TO TITLE 5, UNITED STATES 
CODE.—Title 5, United States Code, is amended—
(A) in section 3111(d), by inserting ‘‘or 
38’’ after ‘‘chapter 37’’; and 
(B) in section 7353(b)(4), by inserting ‘‘or 
38’’ after ‘‘chapter 37’’. 
(2) AMENDMENT TO TITLE 18, UNITED STATES 
CODE.—Section 209(g) of title 18, United States 
Code, is amended—
(A) in paragraph (1), by inserting ‘‘or 38’’ 
after ‘‘chapter 37’’; and 
(B) by amending paragraph (2) to read as 
follows: 
‘‘(2) For purposes of this subsection, the term ‘agen-
cy’—
‘‘(A) with respect to assignments under chapter 
37 of title 5, means an agency (as defined in section 
3701 of title 5) and the Office of the Chief Tech-
nology Officer of the District of Columbia; and 
‘‘(B) with respect to assignments under chapter 
38 of title 5, means an agency (as defined by section 
3801 of title 5).’’. 
(3) ELIGIBILITY FOR THRIFT SAVINGS PLAN.—
Section 125(c)(1)(D) of Public Law 100–238 (101
Stat. 1757; 5 U.S.C. 8432 note) is amended by in-
serting ‘‘or 38’’ after ‘‘chapter 37’’. 
SEC. 102. SHARE-IN-SAVINGS INITIATIVES. 
(a) DEFENSE CONTRACTS.—Section 2332 of title 10, 
United States Code, is amended to read as follows: 
‘‘§ 2332. Share-in-savings contracts 
‘‘(a) AUTHORITY TO ENTER INTO SHARE-IN-SAV-
INGS CONTRACTS.—(1) The head of an agency may enter 
into a share-in-savings contract in which the Government 
awards a contract to improve mission-related or adminis-
trative processes or to accelerate the achievement of its 
mission and share with the contractor in savings achieved 
through contract performance. 
‘‘(2)(A) Except as provided in subparagraph (B), a 
share-in-savings contract shall be awarded for a period of 
not more than five years. 
‘‘(B) A share-in-savings contract may be awarded for 
a period greater than five years, but not more than 10 
years, if the head of the agency determines in writing prior 
to award of the contract that—
‘‘(i) the level of risk to be assumed and the in-
vestment to be undertaken by the contractor is likely 
to inhibit the government from obtaining the needed 
performance competitively at a fair and reasonable
price if the contract is limited in duration to a pe-
riod of five years or less; and 
‘‘(ii) the performance to be acquired is likely to 
continue for a period of time sufficient to generate 
reasonable benefit for the government. 
‘‘(3) Contracts awarded pursuant to the authority of 
this section shall, to the maximum extent practicable, be 
performance-based contracts that identify objective out-
comes and contain performance standards that will be 
used to measure achievement and milestones that must 
be met before payment is made. 
‘‘(4) Contracts awarded pursuant to the authority of 
this section shall include a provision containing a quantifi-
able baseline that is to be the basis upon which a savings 
share ratio is established that governs the amount of pay-
ment a contractor is to receive under the contract. Before 
commencement of performance of such a contract, the 
chief acquisition officer of the agency, or, in the case of 
an agency without a chief acquisition officer, the senior 
procurement executive, shall determine in writing that the 
terms of the provision are quantifiable and will likely yield 
value to the Government. 
‘‘(5)(A) The head of the agency may retain savings 
realized through the use of a share-in-savings contract 
under this section that are in excess of the total amount
of savings paid to the contractor under the contract. Ex-
cept as provided in subparagraph (B), savings shall be 
credited to the appropriation or fund against which 
charges were made to carry out the contract. 
‘‘(B) Amounts retained by the agency under this sub-
section shall—
‘‘(i) without further appropriation, remain 
available until expended; and 
‘‘(ii) be applied first to fund any contingent li-
abilities associated with share-in-savings procure-
ments that are not fully funded. 
‘‘(b) CANCELLATION
AND TERMINATION.—(1) If 
funds are not made available for the continuation of a 
share-in-savings contract entered into under this section 
in a subsequent fiscal year, the contract shall be canceled 
or terminated. The costs of cancellation or termination 
may be paid out of—
‘‘(A) appropriations available for the perform-
ance of the contract; 
‘‘(B) appropriations available for acquisition of 
the type of property or services procured under the 
contract, and not otherwise obligated; or 
‘‘(C) funds subsequently appropriated for pay-
ments of costs of cancellation or termination, subject 
to the limitations in paragraph (3).
‘‘(2) The amount payable in the event of cancellation 
or termination of a share-in-savings contract shall be ne-
gotiated with the contractor at the time the contract is 
entered into. 
‘‘(3) The head of an agency may enter into share-
in-savings contracts under this section in any given fiscal 
year even if funds are not made specifically available for 
the full costs of cancellation or termination of the contract 
if funds are available and sufficient to make payments 
with respect to the first fiscal year of the contract and 
the following conditions are met regarding the funding of 
cancellation and termination liability: 
‘‘(A) The amount of unfunded contingent liabil-
ity for the contract does not exceed the lesser of—
‘‘(i) 50 percent of the estimated costs of a 
cancellation or termination; or 
‘‘(ii) $10,000,000. 
‘‘(B) Unfunded contingent liability in excess of 
$5,000,000 has been approved by the Director of the 
Office of Management and Budget or the Director’s 
designee. 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) The term ‘contractor’ means a private en-
tity that enters into a contract with an agency. 
‘‘(2) The term ‘savings’ means—
‘‘(A) monetary savings to an agency; or 
‘‘(B) savings in time or other benefits real-
ized by the agency, including enhanced reve-
nues. 
‘‘(3) The term ‘share-in-savings contract’ means 
a contract under which—
‘‘(A) a contractor provides solutions for—
‘‘(i) improving the agency’s mission-
related or administrative processes; or 
‘‘(ii) accelerating the achievement of 
agency missions; and 
‘‘(B) the head of the agency pays the con-
tractor an amount equal to a portion of the sav-
ings derived by the agency from—
‘‘(i) any improvements in mission-re-
lated or administrative processes that re-
sult from implementation of the solution; 
or 
‘‘(ii) acceleration of achievement of 
agency missions.’’. 
(b) OTHER CONTRACTS.—Section 317 of the Federal 
Property and Administrative Services Act of 1949 (41 
U.S.C. 266a) is amended to read as follows:
‘‘SEC. 317. SHARE-IN-SAVINGS CONTRACTS. 
‘‘(a) AUTHORITY TO ENTER INTO SHARE-IN-SAV-
INGS CONTRACTS.—(1) The head of an executive agency 
may enter into a share-in-savings contract in which the 
Government awards a contract to improve mission-related 
or administrative processes or to accelerate the achieve-
ment of its mission and share with the contractor in sav-
ings achieved through contract performance. 
‘‘(2)(A) Except as provided in subparagraph (B), a 
share-in-savings contract shall be awarded for a period of 
not more than five years. 
‘‘(B) A share-in-savings contract may be awarded for 
a period greater than five years, but not more than 10 
years, if the head of the agency determines in writing prior 
to award of the contract that—
‘‘(i) the level of risk to be assumed and the in-
vestment to be undertaken by the contractor is likely 
to inhibit the government from obtaining the needed 
performance competitively at a fair and reasonable 
price if the contract is limited in duration to a pe-
riod of five years or less; and 
‘‘(ii) the performance to be acquired is likely to 
continue for a period of time sufficient to generate 
reasonable benefit for the government. 
‘‘(3) Contracts awarded pursuant to the authority of 
this section shall, to the maximum extent practicable, be
performance-based contracts that identify objective out-
comes and contain performance standards that will be 
used to measure achievement and milestones that must 
be met before payment is made. 
‘‘(4) Contracts awarded pursuant to the authority of 
this section shall include a provision containing a quantifi-
able baseline that is to be the basis upon which a savings 
share ratio is established that governs the amount of pay-
ment a contractor is to receive under the contract. Before 
commencement of performance of such a contract, the 
chief acquisition officer of the agency, or, in the case of 
an agency without a chief acquisition officer, the senior 
procurement executive, shall determine in writing that the 
terms of the provision are quantifiable and will likely yield 
value to the Government. 
‘‘(5)(A) The head of the agency may retain savings 
realized through the use of a share-in-savings contract 
under this section that are in excess of the total amount 
of savings paid to the contractor under the contract. Ex-
cept as provided in subparagraph (B), savings shall be 
credited to the appropriation or fund against which 
charges were made to carry out the contract. 
‘‘(B) Amounts retained by the agency under this sub-
section shall—
‘‘(i) without further appropriation, remain 
available until expended; and 
‘‘(ii) be applied first to fund any contingent li-
abilities associated with share-in-savings procure-
ments that are not fully funded. 
‘‘(b) CANCELLATION
AND TERMINATION.—(1) If 
funds are not made available for the continuation of a 
share-in-savings contract entered into under this section 
in a subsequent fiscal year, the contract shall be canceled 
or terminated. The costs of cancellation or termination 
may be paid out of—
‘‘(A) appropriations available for the perform-
ance of the contract; 
‘‘(B) appropriations available for acquisition of 
the type of property or services procured under the 
contract, and not otherwise obligated; or 
‘‘(C) funds subsequently appropriated for pay-
ments of costs of cancellation or termination, subject 
to the limitations in paragraph (3). 
‘‘(2) The amount payable in the event of cancellation 
or termination of a share-in-savings contract shall be ne-
gotiated with the contractor at the time the contract is 
entered into. 
‘‘(3) The head of an executive agency may enter into 
share-in-savings contracts under this section in any given
fiscal year even if funds are not made specifically available 
for the full costs of cancellation or termination of the con-
tract if funds are available and sufficient to make pay-
ments with respect to the first fiscal year of the contract 
and the following conditions are met regarding the funding 
of cancellation and termination liability: 
‘‘(A) The amount of unfunded contingent liabil-
ity for the contract does not exceed the lesser of—
‘‘(i) 50 percent of the estimated costs of a 
cancellation or termination; or 
‘‘(ii) $10,000,000. 
‘‘(B) Unfunded contingent liability in excess of 
$5,000,000 has been approved by the Director of the 
Office of Management and Budget or the Director’s 
designee. 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) The term ‘contractor’ means a private en-
tity that enters into a contract with an agency. 
‘‘(2) The term ‘savings’ means—
‘‘(A) monetary savings to an agency; or 
‘‘(B) savings in time or other benefits real-
ized by the agency, including enhanced reve-
nues. 
‘‘(3) The term ‘share-in-savings contract’ means 
a contract under which—
‘‘(A) a contractor provides solutions for—
‘‘(i) improving the agency’s mission-
related or administrative processes; or 
‘‘(ii) accelerating the achievement of 
agency missions; and 
‘‘(B) the head of the agency pays the con-
tractor an amount equal to a portion of the sav-
ings derived by the agency from—
‘‘(i) any improvements in mission-re-
lated or administrative processes that re-
sult from implementation of the solution; 
or 
‘‘(ii) acceleration of achievement of 
agency missions.’’. 
(c) DEVELOPMENT OF INCENTIVES.—The Director 
of the Office of Management and Budget shall—
(1) identify potential opportunities for the use 
of share-in-savings contracts; 
(2) provide guidance to executive agencies for 
determining mutually beneficial savings share ratios 
and baselines from which savings may be measured; 
and 
(3) in consultation with the Committee on Gov-
ernmental Affairs of the Senate, the Committee on 
Government Reform of the House of Representa-
tives, and executive agencies, develop techniques to 
permit an executive agency to retain a portion of the 
savings (after payment of the contractor’s share of 
the savings) derived from share-in-savings contracts 
as funds are appropriated to the agency in future 
fiscal years. 
(d) REGULATIONS.—Not later than 180 days after 
the date of the enactment of this Act, the Federal Acquisi-
tion Regulation shall be revised to implement the provi-
sions enacted by this section. Such revisions shall—
(1) provide for the use of competitive proce-
dures in the selection and award of share-in-savings 
contracts to—
(A) ensure the contractor’s share of sav-
ings reflects the risk involved and market condi-
tions; and 
(B) otherwise yield best value to the gov-
ernment; and 
(2) allow appropriate regulatory flexibility to fa-
cilitate the use of share-in-savings contracts by exec-
utive agencies, including the use of innovative provi-
sions for technology refreshment and nonstandard 
Federal Acquisition Regulation contract clauses. 
(e) OMB REPORT TO CONGRESS.—In consultation 
with executive agencies, the Director of the Office of Man-
agement and Budget shall, not later than 2 years after 
the completion of the revisions to the Federal Acquisition 
Regulation under subsection (d), submit to Congress a re-
port containing—
(1) a description of the number of share-in-sav-
ings contracts entered into by each executive agency 
under by this section and the amendments made by 
this section, and, for each contract identified—
(A) the performance acquired; 
(B) the total amount of payments made to 
the contractor; and 
(C) the total amount of savings or other 
measurable benefits realized; 
(2) a description of the ability of agencies to de-
termine the baseline costs of a project against which 
savings can be measured; and 
(3) any recommendations, as the Director 
deems appropriate, regarding additional changes in 
law that may be necessary to ensure effective use of 
share-in-savings contracts by executive agencies. 
(f) DEFINITIONS.—In this section, the terms ‘‘con-
tractor’’, ‘‘savings’’, and ‘‘share-in-savings contract’’ have 
the meanings given those terms in section 2332 of title 
10, United States Code, and section 317 of the Federal
Property and Administrative Services Act of 1949 (as 
amended by subsections (a) and (b)). 
(g) REPEAL
OF SUPERSEDED PROVISIONS.—Sub-
sections (c), (d), (e), (f), (g), and (i) of section 210 of 
the E-Government Act of 2002 (Public Law 107–347; 116 
Stat. 2936) are repealed. 
SEC. 103. INFLATION ADJUSTMENT FOR ACQUISITION-RE-
LATED DOLLAR THRESHOLDS. 
(a) REQUIREMENT FOR ADJUSTMENT.—The Office 
of Federal Procurement Policy Act (41 U.S.C. 403 et seq.) 
is amended by adding at the end the following new section: 
‘‘SEC. 42. INFLATION ADJUSTMENT FOR ACQUISITION-RE-
LATED DOLLAR THRESHOLDS. 
‘‘(a) REQUIREMENT
FOR ADJUSTMENT.—In each 
year that is divisible by 5, the Federal Acquisition Regu-
latory Council (established under section 25) shall adjust 
each dollar threshold set out in an acquisition statute to 
the amount that is equal to the October 1, 2000 constant 
dollar value for that threshold, as determined on the basis 
of the Consumer Price Index for October of the year in 
which adjusted. 
‘‘(b) ROUNDING OF ADJUSTED AMOUNTS.—In the 
application of a percentage adjustment to the amount of 
a dollar threshold under subsection (a), the calculated 
amount shall be rounded as follows:
‘‘(1) In the case of a dollar threshold that is 
less than $10,000 before the adjustment, to the 
nearest $500. 
‘‘(2) In the case of a dollar threshold that is 
less than $100,000 but not less than $10,000 before 
the adjustment, to the nearest $5,000. 
‘‘(3) In the case of a dollar threshold that is 
less than $1,000,000 but not less than $100,000 be-
fore the adjustment, to the nearest $50,000. 
‘‘(4) In the case of a dollar threshold that is 
$1,000,000 or more before the adjustment, to the 
nearest $500,000. 
‘‘(c) PUBLICATION.—The Federal Acquisition Regu-
latory Council shall publish each adjusted dollar threshold 
under this section in the Federal Register. 
‘‘(d) EFFECTIVE DATE OF ADJUSTMENT.—An ad-
justed dollar threshold under this section shall have the 
force and effect of law beginning on the date of the publi-
cation of the threshold in the Federal Register under sub-
section (c). 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) The term ‘acquisition statute’ means any 
provision of a statute, including a definition, that 
governs the applicability of any policy, procedure, re-
quirement, restriction, or condition to the acquisition 
of goods or services by executive agencies. 
‘‘(2) The term ‘Consumer Price Index’ means 
the Consumer Price Index for all-urban consumers 
published monthly by the Department of Labor.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
in section 1(b) of such Act is amended by adding at the 
end the following new item:
‘‘Sec. 42. Inflation adjustment for acquisition-related dollar thresholds.’’.
SEC. 104. AGENCY ACQUISITION PROTESTS. 
(a) DEFENSE CONTRACTS.—(1) Chapter 137 of title 
10, United States Code, is amended by inserting after sec-
tion 2305a the following new section: 
‘‘§ 2305b. Protests 
‘‘(a) IN GENERAL.—An interested party may protest 
an acquisition of supplies or services by an agency based 
on an alleged violation of an acquisition law or regulation, 
and a decision regarding such alleged violation shall be 
made by the agency in accordance with this section. 
‘‘(b) RESTRICTION
ON CONTRACT AWARD PEND-
ING.—(1) Except as provided in paragraph (2), a contract 
may not be awarded by an agency after a protest con-
cerning the acquisition has been submitted under this sec-
tion and while the protest is pending. 
‘‘(2) The head of the acquisition activity responsible 
for the award of the contract may authorize the award
of a contract, notwithstanding a pending protest under 
this section, upon making a written finding that urgent 
and compelling circumstances do not allow for waiting for 
a decision on the protest. 
‘‘(c) RESTRICTION
ON CONTRACT PERFORMANCE 
PENDING DECISION.—(1) Except as provided in para-
graph (2), performance of a contract may not be author-
ized (and performance of the contract shall cease if per-
formance has already begun) in any case in which a pro-
test of the contract award is submitted under this section 
before the later of—
‘‘(A) the date that is 10 days after the date of 
contract award; or 
‘‘(B) the date that is five days after an agency 
debriefing date offered to an unsuccessful offeror for 
any debriefing that is requested and, when re-
quested, is required, under section 2305(b)(5) of 
this title. 
‘‘(2) The head of the acquisition activity responsible 
for the award of a contract may authorize performance 
of the contract notwithstanding a pending protest under 
this section upon making a written finding that urgent 
and compelling circumstances do not allow for waiting for 
a decision on the protest.
‘‘(d) DEADLINE FOR DECISION.—The head of an 
agency shall issue a decision on a protest under this sec-
tion not later than the date that is 20 working days after 
the date on which the protest is submitted to such head 
of an agency. 
‘‘(e) JUDICIAL REVIEW.—A decision on a protest 
under this section is not subject to judicial review. 
‘‘(f) CONSTRUCTION.—Nothing in this section shall 
affect the right of an interested party to file a protest with 
the Comptroller General under subchapter V of chapter 
35 of title 31. An interested party who has filed a protest 
under this section with respect to an acquisition may not 
file an action with respect to that acquisition in the United 
States Court of Federal Claims while the protest is pend-
ing. 
‘‘(g) DEFINITIONS.—In this section, the terms ‘pro-
test’ and ‘interested party’ have the meanings given such 
terms in section 3551 of title 31.’’. 
(2) The table of sections at the beginning of such 
chapter is amended by inserting after the item relating 
to section 2305a the following new item:
‘‘2305b. Protests.’’.
(b) OTHER AGENCIES.—Title III of the Federal 
Property and Administrative Services Act of 1949 is 
amended by inserting after section 303M (41 U.S.C. 
253m) the following new section:
‘‘SEC. 303N. PROTESTS. 
‘‘(a) IN GENERAL.—An interested party may protest 
an acquisition of supplies or services by an executive agen-
cy based on an alleged violation of an acquisition law or 
regulation, and a decision regarding such alleged violation 
shall be made by the agency in accordance with this sec-
tion. 
‘‘(b) RESTRICTION ON CONTRACT AWARD PENDING 
DECISION.—(1) Except as provided in paragraph (2), a 
contract may not be awarded by an agency after a protest 
concerning the acquisition has been submitted under this 
section and while the protest is pending. 
‘‘(2) The head of the acquisition activity responsible 
for the award of a contract may authorize the award of 
the contract, notwithstanding a pending protest under this 
section, upon making a written finding that urgent and 
compelling circumstances do not allow for waiting for a 
decision on the protest. 
‘‘(c) RESTRICTION
ON CONTRACT PERFORMANCE 
PENDING DECISION.—(1) Except as provided in para-
graph (2), performance of a contract may not be author-
ized (and performance of the contract shall cease if per-
formance has already begun) in any case in which a pro-
test of the contract award is submitted under this section 
before the later of—
‘‘(A) the date that is 10 days after the date of 
contract award; or 
‘‘(B) the date that is five days after an agency 
debriefing date offered to an unsuccessful offeror for 
any debriefing that is requested and, when re-
quested, is required, under section 303B(e) of this 
title. 
‘‘(2) The head of the acquisition activity responsible 
for the award of a contract may authorize performance 
of the contract notwithstanding a pending protest under 
this section upon making a written finding that urgent 
and compelling circumstances do not allow for waiting for 
a decision on the protest. 
‘‘(d) DEADLINE FOR DECISION.—The head of an ex-
ecutive agency shall issue a decision on a protest under 
this section not later than the date that is 20 working 
days after the date on which the protest is submitted to 
the executive agency. 
‘‘(e) JUDICIAL REVIEW.—A decision on a protest 
under this section shall not be subject to judicial review. 
‘‘(f) CONSTRUCTION.—Nothing in this section shall 
affect the right of an interested party to file a protest with 
the Comptroller General under subchapter V of chapter 
35 of title 31, United States Code. An interested party 
who has filed a protest under this section with respect to
an acquisition may not file an action with respect to that 
acquisition in the United States Court of Federal Claims 
while the protest is pending. 
‘‘(g) DEFINITIONS.—In this section, the terms ‘pro-
test’ and ‘interested party’ have the meanings given such 
terms in section 3551 of title 31, United States Code.’’. 
(c) CONFORMING AMENDMENT.—Section 3553(d)(4) 
of title 31, United States Code, is amended—
(1) in subparagraph (A), by striking ‘‘or’’ at 
the end; 
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; or’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(C) in the case of a protest of the same matter 
regarding such contract that is submitted under sec-
tion 2305b of title 10 or section 303N of the Fed-
eral Property and Administrative Services Act of 
1949, the date that is 5 days after the date on 
which a decision on that protest is issued.’’. 
SEC. 105. EXTENSION OF AUTHORITY FOR USE OF SIM-
PLIFIED ACQUISITION PROCEDURES. 
Section 4202(e) of the Clinger-Cohen Act (division D 
of Public Law 104–106; 110 Stat. 652; 10 U.S.C. 2304
note) is amended by striking ‘‘January 1, 2006’’ and in-
serting ‘‘January 1, 2009’’. 
SEC. 106. REDUNDANCY IN PROCUREMENT OF TELE-
COMMUNICATIONS SERVICES. 
(a) REGULATIONS REQUIRED.—Not later than 180 
days after the date of the enactment of this Act, the Fed-
eral Acquisition Regulation shall be revised to require an 
executive agency, in the procurement of telecommuni-
cations services (including information services) to pro-
vide, to the maximum extent practicable, that such serv-
ices include (1) redundant and physically separate points 
of entry; and (2) physically diverse local network facilities. 
(b) DEFINITIONS.—In this section: 
(1) The terms ‘‘telecommunications service’’ 
and ‘‘information service’’ have the meanings pro-
vided in section 3 of the Communications Act of 
1934 (47 U.S.C. 153). 
(2) The term ‘‘executive agency’’ has the mean-
ing provided in section 4 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403). 
(3) The term ‘‘Federal Acquisition Regulation’’ 
means the single Government-wide procurement reg-
ulation issued in accordance with sections 6 and 25 
of the Office of Federal Procurement Policy Act (41 
U.S.C. 405, 421).
TITLE II—CONTRACT DISPUTE 
ENHANCEMENT 
Subtitle A—General Provisions 
SEC. 211. DEFINITIONS. 
(a) IN GENERAL.—The Office of Federal Procure-
ment Policy Act (41 U.S.C. 401 et seq.) is amended by 
adding at the end the following: 
‘‘TITLE II—DISPUTE 
RESOLUTION 
‘‘Subtitle A—General Provisions 
‘‘SEC. 201. DEFINITIONS. 
‘‘In this title: 
‘‘(1) The term ‘Defense Board’ means the De-
partment of Defense Board of Contract Appeals es-
tablished pursuant to section 8(a)(1) of the Contract 
Disputes Act of 1978 (41 U.S.C. 607). 
‘‘(2) The term ‘Civilian Board’ means the Civil-
ian Board of Contract Appeals established pursuant 
to section 8(b)(1) of the Contract Disputes Act of 
1978 (41 U.S.C. 607). 
‘‘(3) The term ‘Board judge’ means a member 
of the Defense Board or the Civilian Board, as the 
case may be.
‘‘(4) The term ‘Chairman’ means the Chairman 
of the Defense Board or the Civilian Board, as the 
case may be. 
‘‘(5) The term ‘Board concerned’ means—
‘‘(A) the Defense Board with respect to 
matters within its jurisdiction; and 
‘‘(B) the Civilian Board with respect to 
matters within its jurisdiction. 
‘‘(6) The term ‘executive agency’—
‘‘(A) with respect to contract disputes 
under the jurisdiction of the Defense Board, 
means the Department of Defense, the Depart-
ment of the Army, the Department of the Navy, 
the Department of the Air Force, or the Na-
tional Aeronautics and Space Administration; 
and 
‘‘(B) with respect to contract disputes 
under the jurisdiction of the Civilian Board, has 
the meaning given by section 4(1) of this Act 
except that the term does not include the De-
partment of Defense, the Department of the 
Army, the Department of the Navy, the Depart-
ment of the Air Force, the National Aero-
nautics and Space Administration, and the Ten-
nessee Valley Authority.’’.
(b) CONFORMING
AMENDMENTS.—The Office of 
Federal Procurement Policy Act (41 U.S.C. 401 et seq.) 
is further amended—
(1) by inserting the following before section 1: 
‘‘TITLE I—FEDERAL PROCURE-
MENT POLICY GENERALLY’’; 
and 
(2) in section 4, by striking out ‘‘As used in 
this Act:’’ and inserting in lieu thereof ‘‘Except as 
otherwise specifically provided, as used in this Act:’’. 
Subtitle B—Establishment of Civil-
ian and Defense Boards of Con-
tract Appeals 
SEC. 221. ESTABLISHMENT. 
(a) DEFENSE BOARD.—Subsection (a)(1) of section 
8 of the Contract Disputes Act of 1978 (41 U.S.C. 607) 
is amended to read as follows: 
‘‘(a)(1) There is established in the Department of De-
fense a board of contract appeals to be known as the De-
partment of Defense Board of Contract Appeals.’’. 
(b) CIVILIAN BOARD.—Subsection (b)(1) of section 
8 of the Contract Disputes Act of 1978 (41 U.S.C. 607) 
is amended to read as follows:
‘‘(b)(1) There is established in the General Services 
Administration a board of contract appeals to be known 
as the Civilian Board of Contract Appeals.’’. 
SEC. 222. MEMBERSHIP. 
The Office of Federal Procurement Policy Act (41 
U.S.C. 401 et seq.), as amended by section 211, is further 
amended by adding at the end the following: 
‘‘SEC. 202. MEMBERSHIP. 
‘‘(a) APPOINTMENT.—(1)(A) The Defense Board 
shall consist of judges appointed by the Secretary of De-
fense from a register of applicants maintained by the De-
fense Board, in accordance with rules issued by the De-
fense Board for establishing and maintaining a register 
of eligible applicants and selecting Defense Board judges. 
The Secretary shall appoint a judge without regard to po-
litical affiliation and solely on the basis of the professional 
qualifications required to perform the duties and respon-
sibilities of a Defense Board judge. 
‘‘(B) The Civilian Board shall consist of judges ap-
pointed by the Administrator for Federal Procurement 
Policy from a register of applicants maintained by the Ad-
ministrator, in accordance with rules issued by the Admin-
istrator for establishing and maintaining a register of eli-
gible applicants and selecting Civilian Board judges. The 
Administrator shall appoint a judge without regard to po-
litical affiliation and solely on the basis of the professional 
qualifications required to perform the duties and respon-
sibilities of a Civilian Board judge. 
‘‘(2) The members of the Defense Board and the Ci-
vilian Board shall be selected and appointed to serve in 
the same manner as administrative law judges appointed 
pursuant to section 3105 of title 5, United States Code, 
with an additional requirement that such members shall 
have had not fewer than five years of experience in public 
contract law. 
‘‘(3) Notwithstanding paragraph (2) and subject to 
subsection (b), the following persons shall serve as Board 
judges: 
‘‘(A) For the Defense Board, any full-time 
member of the Armed Services Board of Contract 
Appeals serving as such on the day before the effec-
tive date of this title. 
‘‘(B) For the Civilian Board, any full-time 
member of any agency board of contract appeals 
other than the Armed Services Board of Contract 
Appeals, the Postal Service Board of Contract Ap-
peals, and the board of contract appeals of the Ten-
nessee Valley Authority serving as such on the day 
before the effective date of this title.
‘‘(b) REMOVAL.—Members of the Defense Board and 
the Civilian Board shall be subject to removal in the same 
manner as administrative law judges, as provided in sec-
tion 7521 of title 5, United States Code. 
‘‘(c) COMPENSATION.—Compensation for the Chair-
man of the Defense Board and the Chairman of the Civil-
ian Board and all other members of each Board shall be 
determined under section 5372a of title 5, United States 
Code.’’. 
SEC. 223. CHAIRMEN. 
The Office of Federal Procurement Policy Act (41 
U.S.C. 401 et seq.), as amended by section 222, is further 
amended by adding at the end the following: 
‘‘SEC. 203. CHAIRMEN. 
‘‘(a) DESIGNATION.—(1)(A) The Chairman of the 
Defense Board shall be designated by the Secretary of De-
fense to serve for a term of five years. The Secretary shall 
select the Chairman from among sitting judges each of 
whom has had at least five years of service as a member 
of the Armed Services Board of Contract Appeals. 
‘‘(B) The Chairman of the Civilian Board shall be 
designated by the Administrator for Federal Procurement 
Policy to serve for a term of five years. The Administrator 
shall select the Chairman from among sitting judges each 
of whom has had at least five years of service as a member
of an agency board of contract appeals other than the 
Armed Services Board of Contract Appeals. 
‘‘(2) A Chairman of a Board may continue to serve 
after the expiration of the Chairman’s term until a suc-
cessor has taken office. A Chairman may be reappointed 
any number of times. 
‘‘(b) RESPONSIBILITIES.—The Chairman of the De-
fense Board or the Civilian Board, as the case may be, 
shall be responsible on behalf of the Board for the execu-
tive and administrative operation of the Board, including 
functions of the Board with respect to the following: 
‘‘(1) The selection, appointment, and fixing of 
the compensation of such personnel, pursuant to 
part III of title 5, United States Code, as the Chair-
man considers necessary or appropriate, including a 
Clerk of the Board, a General Counsel, and clerical 
and legal assistance for Board judges. 
‘‘(2) The supervision of personnel employed by 
or assigned to the Board, and the distribution of 
work among such personnel. 
‘‘(3) The operation of an Office of the Clerk of 
the Board, including the receipt of all filings made 
with the Board, the assignment of cases, and the 
maintenance of all records of the Board.
‘‘(4) The prescription of such rules and regula-
tions as the Chairman considers necessary or appro-
priate for the administration and management of the 
Board. 
‘‘(c) VICE CHAIRMEN.—The Chairman of the De-
fense Board or the Civilian Board, as the case may be, 
may designate up to two other Board judges as Vice 
Chairmen. The Vice Chairmen, in the order designated by 
the Chairman, shall act in the place and stead of the 
Chairman during the absence of the Chairman.’’. 
SEC. 224. RULEMAKING AUTHORITY. 
The Office of Federal Procurement Policy Act (41 
U.S.C. 401 et seq.), as amended by section 223, is further 
amended by adding at the end the following: 
‘‘SEC. 204. RULEMAKING AUTHORITY. 
‘‘Except as provided by section 252 of the Acquisition 
System Improvement Act, the Chairman of the Defense 
Board and the Chairman of the Civilian Board, in con-
sultation with the Administrator for Federal Procurement 
Policy, shall jointly issue and maintain—
‘‘(1) such procedural rules and regulations as 
are necessary to the exercise of the functions of the 
Boards under section 211; and 
‘‘(2) statements of policy of general applica-
bility with respect to such functions.’’.
SEC. 225. AUTHORIZATION OF APPROPRIATIONS. 
The Office of Federal Procurement Policy Act (41 
U.S.C. 401 et seq.), as amended by section 224, is further 
amended by adding at the end the following: 
‘‘SEC. 205. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated for fiscal 
year 2005 and each succeeding fiscal year such sums as 
may be necessary to carry out the provisions of this title. 
Funds for the activities of each Board shall be separately 
appropriated for such purpose. Funds appropriate pursu-
ant to this section shall remain available until expended.’’. 
Subtitle C—Functions of Defense 
and Civilian Boards of Contract 
Appeals 
SEC. 231. CONTRACT DISPUTES. 
The Office of Federal Procurement Policy Act (41 
U.S.C. 401 et seq.), as amended by section 225, is further 
amended by adding at the end the following: 
‘‘Subtitle B—Functions of the De-
fense and Civilian Boards of 
Contract Appeals 
‘‘SEC. 211. CONTRACT DISPUTES. 
‘‘The Defense Board shall have jurisdiction as pro-
vided by section 8(a)(1) of the Contract Disputes Act of 
1978 (41 U.S.C. 607(a)). The Civilian Board shall have
jurisdiction as provided by section 8(b)(1) of such Act (41 
U.S.C. 607(b)).’’. 
SEC. 232. ENHANCED ACCESS FOR SMALL BUSINESS. 
Section 9(a) of the Contract Disputes Act of 1978 
(41 U.S.C. 608) is amended by striking out the period 
at the end of the first sentence and inserting the following: 
‘‘or, in the case of a small business concern (as defined 
in the Small Business Act and regulations under that 
Act), $150,000 or less.’’. 
SEC. 233. APPLICABILITY TO CERTAIN CONTRACTS. 
The Office of Federal Procurement Policy Act (41 
U.S.C. 401 et seq.), as amended by section 231, is further 
amended by adding at the end the following: 
‘‘SEC. 212. APPLICABILITY TO CERTAIN CONTRACTS. 
‘‘(a) CONTRACTS AT OR BELOW THE SIMPLIFIED AC-
QUISITION THRESHOLD.—Notwithstanding section 33 of 
this Act, the authority conferred on the Defense Board 
and the Civilian Board by this title is applicable to con-
tracts in amounts not greater than the simplified acquisi-
tion threshold. 
‘‘(b) CONTRACTS
FOR COMMERCIAL ITEMS.—Not-
withstanding section 34 of this Act, the authority con-
ferred on the Defense Board and the Civilian Board by 
this title is applicable to contracts for the procurement of 
commercial items.’’.
Subtitle D—Transfers and Transi-
tion, Savings, and Conforming 
Provisions 
SEC. 241. TRANSFER AND ALLOCATION OF APPROPRIA-
TIONS AND PERSONNEL. 
(a) TRANSFERS.—
(1) ARMED SERVICES BOARD OF CONTRACT AP-
PEALS.—The personnel employed in connection with, 
and the assets, liabilities, contracts, property, 
records, and unexpended balance of appropriations, 
authorizations, allocations, and other funds em-
ployed, held, used, arising from, available to, or to 
be made available in connection with the functions 
vested by law in the Armed Services Board of Con-
tract Appeals established pursuant to section 8 of 
the Contract Disputes Act of 1978 (41 U.S.C. 607) 
(as in effect on the day before the effective date de-
scribed in section 251), shall be transferred to the 
Department of Defense Board of Contract Appeals 
for appropriate allocation by the Chairman of that 
Board. 
(2) OTHER BOARDS OF CONTRACTS APPEALS.—
The personnel employed in connection with, and the 
assets, liabilities, contracts, property, records, and 
unexpended balance of appropriations, authoriza-
tions, allocations, and other funds employed, held, 
used, arising from, available to, or to be made avail-
able in connection with the functions vested by law 
in the boards of contract appeals established pursu-
ant to section 8 of the Contract Disputes Act of 
1978 (41 U.S.C. 607) (as in effect on the day before 
the effective date described in section 251) other 
than the Armed Services Board of Contract Appeals, 
the board of contract appeals of the Tennessee Val-
ley Authority, and the Postal Service Board of Con-
tract Appeals shall be transferred to the Civilian 
Board of Contract Appeals for appropriate allocation 
by the Chairman of that Board. 
(b) EFFECT ON PERSONNEL.—Personnel transferred 
pursuant to this subtitle shall not be separated or reduced 
in compensation for one year after such transfer, except 
for cause. 
(c) REGULATIONS.—(1) The Department of Defense 
Board of Contract Appeals and the Civilian Board of Con-
tract Appeals shall each prescribe regulations for the re-
lease of competing employees in a reduction in force that 
gives due effect to—
(A) efficiency or performance ratings; 
(B) military preference; and 
(C) tenure of employment.
(2) In prescribing the regulations, the Board con-
cerned shall provide for military preference in the same 
manner as set forth in subchapter I of chapter 35 of title 
5, United States Code. 
SEC. 242. TERMINATIONS AND SAVINGS PROVISIONS. 
(a) TERMINATION OF BOARDS OF CONTRACT AP-
PEALS.—Effective on the effective date described in sec-
tion 251, the boards of contract appeals established pursu-
ant to section 8 of the Contract Disputes Act of 1978 (41 
U.S.C. 607) (as in effect on the day before such effective 
date), other than the board of contract appeals of the Ten-
nessee Valley Authority and the Postal Service Board of 
Contract Appeals, shall terminate. 
(b) SAVINGS PROVISION FOR CONTRACT DISPUTE 
MATTERS PENDING BEFORE BOARDS.—(1) This title and 
the amendments made by this title shall not affect any 
proceedings pending on the effective date described in sec-
tion 251 before any board of contract appeals terminated 
by subsection (a). 
(2) In the case of any such proceedings pending be-
fore the Armed Services Board of Contract Appeals, the 
proceedings shall be continued by the Department of De-
fense Board of Contract Appeals, and orders which were 
issued in any such proceeding by the Armed Services 
Board of Contract Appeals shall continue in effect until
modified, terminated, superseded, or revoked by the De-
partment of Defense Board of Contract Appeals, by a 
court of competent jurisdiction, or by operation of law. 
(3) In the case of any such proceedings pending be-
fore an agency board of contract appeals other than the 
Armed Services Board of Contract Appeals or the board 
of contract appeals of the Tennessee Valley Authority, the 
proceedings shall be continued by the Civilian Board of 
Contract Appeals, and orders which were issued in any 
such proceeding by the agency board shall continue in ef-
fect until modified, terminated, superseded, or revoked by 
the Civilian Board of Contract Appeals, by a court of com-
petent jurisdiction, or by operation of law. 
SEC. 243. CONTRACT DISPUTES AUTHORITY OF BOARDS. 
(a) Section 2 of the Contract Disputes Act of 1978 
(41 U.S.C. 601) is amended—
(1) in paragraph (2), by striking out ‘‘, the 
United States Postal Service, and the Postal Rate 
Commission’’; 
(2) by redesignating paragraph (7) as para-
graph (9); 
(3) by amending paragraph (6) to read as fol-
lows: 
‘‘(6) the terms ‘agency board’ or ‘agency board 
of contract appeals’ mean—
‘‘(1) the Department of Defense Board of 
Contract Appeals established under section 
8(a)(1) of this Act; 
‘‘(2) the Civilian Board of Contract Ap-
peals established under section 8(b)(1) of this 
Act; 
‘‘(3) the board of contract appeals of the 
Tennessee Valley Authority; or 
‘‘(4) the Postal Service Board of Contract 
Appeals established under section 8(h) of this 
Act;’’; and 
(4) by inserting after paragraph (6) the fol-
lowing new paragraphs: 
‘‘(7) the term ‘Defense Board’ means the De-
partment of Defense Board of Contract Appeals es-
tablished under section 8(a)(1) of this Act; 
‘‘(8) the term ‘Civilian Board’ means the Civil-
ian Board of Contract Appeals established under 
section 8(b)(1) of this Act; and’’. 
(b) Section 8 of the Contract Disputes Act of 1978 
(41 U.S.C. 607), as amended by section 221, is further 
amended—
(1) by striking out subsection (c); 
(2) in subsection (d)—
(A) by striking out the first sentence and 
inserting in lieu thereof the following: ‘‘The De-
fense Board shall have jurisdiction to decide 
any appeal from a decision of a contracting offi-
cer of the Department of Defense, the Depart-
ment of the Army, the Department of the Navy, 
the Department of the Air Force, or the Na-
tional Aeronautics and Space Administration 
relative to a contract made by that department 
or agency. The Civilian Board shall have juris-
diction to decide any appeal from a decision of 
a contracting officer of any executive agency 
(other than the Department of Defense, the De-
partment of the Army, the Department of the 
Navy, the Department of the Air Force, the 
National Aeronautics and Space Administra-
tion, the United States Postal Service, the Post-
al Rate Commission, or the Tennessee Valley 
Authority) relative to a contract made by that 
agency. Each other agency board shall have ju-
risdiction to decide any appeal from a decision 
of a contracting officer relative to a contract 
made by its agency.’’; and
(B) in the second sentence, by striking out 
‘‘Claims Court’’ and inserting in lieu thereof 
‘‘Court of Federal Claims’’; 
(3) by striking out subsection (h) and inserting 
in lieu thereof the following: 
‘‘(h) There is established an agency board of contract 
appeals to be known as the ‘Postal Service Board of Con-
tract Appeals’. Such board shall have jurisdiction to decide 
any appeal from a decision of a contracting officer of the 
United States Postal Service or the Postal Rate Commis-
sion relative to a contract made by either agency. Such 
board shall consist of judges appointed by the Postmaster 
General who shall meet the qualifications of and serve in 
the same manner as judges of the Civilian Board of Con-
tract Appeals. This Act and title II of the Office of Fed-
eral Procurement Policy Act shall apply to contract dis-
putes before the Postal Service Board of Contract Appeals 
in the same manner as they apply to contract disputes 
before the Civilian Board.’’; and 
(4) by striking out subsection (i). 
SEC. 244. REFERENCES TO AGENCY BOARDS OF CONTRACT 
APPEALS. 
(a) DEFENSE BOARD.—Any reference to the Armed 
Services Board of Contract Appeals in any provision of 
law or in any rule, regulation, or other paper of the United
States shall be treated as referring to the Department of 
Defense Board of Contract Appeals. 
(b) CIVILIAN BOARD.—Any reference to an agency 
board of contract appeals other than the Armed Services 
Board of Contract Appeals, the board of contract appeals 
of the Tennessee Valley Authority, or the Postal Service 
Board of Contract Appeals in any provision of law or in 
any rule, regulation, or other paper of the United States 
shall be treated as referring to the Civilian Board of Con-
tract Appeals. 
SEC. 245. CONFORMING AMENDMENTS. 
(a) TITLE 5.—Section 5372a(a)(1) of title 5, United 
States Code, is amended by inserting after ‘‘of 1978’’ the 
following: ‘‘or a member of the Department of Defense 
Board of Contract Appeals or the Civilian Board of Con-
tract Appeals appointed under section 202 of the Office 
of Federal Procurement Policy Act’’. 
(b) OFFICE
OF FEDERAL PROCUREMENT POLICY 
ACT.—The table of contents for the Office of Federal Pro-
curement Policy Act (contained in section 1(b)) is amend-
ed—
(1) by inserting the following before the item 
relating to section 1:
‘‘TITLE I—FEDERAL PROCUREMENT POLICY GENERALLY’’;
and
(2) by adding at the end the following:
‘‘TITLE II—DISPUTE RESOLUTION 
‘‘Subtitle A—General Provisions 
‘‘201. Definitions. 
‘‘202. Membership. 
‘‘203. Chairmen. 
‘‘204. Rulemaking authority. 
‘‘205. Authorization of appropriations. 
‘‘Subtitle B—Functions of the Defense and Civilian Boards of Contract 
Appeals 
‘‘211. Contract disputes. 
‘‘212. Applicability to certain contracts.’’.
Subtitle E—Effective Date; Regula-
tions and Appointment of Chair-
men 
SEC. 251. EFFECTIVE DATE. 
Title II of the Office of Federal Procurement Policy 
Act, as added by this title, and the amendments and re-
peals made by this title shall take effect 1 year after the 
date of the enactment of this Act. 
SEC. 252. REGULATIONS. 
(a) REGULATIONS REGARDING CLAIMS.—Not later 
than 1 year after the date of the enactment of this Act, 
the Chairman of the Armed Services Board of Contract 
Appeals and the Chairman of the General Services Board 
of Contract Appeals, in consultation with the Adminis-
trator for Federal Procurement Policy, shall jointly 
issue—
(1) such procedural rules and regulations as are 
necessary to the exercise of the functions of the De-
partment of Defense Board of Contract Appeals and
the Civilian Board of Contract Appeals under sec-
tions 211 of the Office of Federal Procurement Pol-
icy Act (as added by this title); and 
(2) statements of policy of general applicability 
with respect to such functions. 
(b) REGULATIONS REGARDING APPOINTMENT
OF 
JUDGES.—Not later than 1 year after the date of the en-
actment of this Act—
(1) the Chairman of the Armed Services Board 
of Contract Appeals shall issue rules governing the 
establishment and maintenance of a register of eligi-
ble applicants and the selection of judges for the De-
partment of Defense Board of Contract Appeals; 
and 
(2) the Administrator for Federal Procurement 
Policy shall issue rules governing the establishment 
and maintenance of a register of eligible applicants 
and the selection of judges for the Civilian Board of 
Contract Appeals. 
SEC. 253. APPOINTMENT OF CHAIRMEN OF DEFENSE 
BOARD AND CIVILIAN BOARD. 
Notwithstanding section 251, not later than 1 year 
after the date of the enactment of this Act—
(1) the Secretary of Defense shall appoint the 
Chairman of the Department of Defense Board of 
Contract Appeals; and 
(2) the Administrator for Federal Procurement 
Policy shall appoint the Chairman of the Civilian 
Board of Contract Appeals.
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