I 
108TH CONGRESS 
1ST SESSION H. R. 1837
To improve the Federal acquisition workforce and the process for the 
acquisition of services by the Federal Government, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 29, 2003
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 improve the Federal acquisition workforce and the process 
for the acquisition of services by the Federal Govern-
ment, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Services Acquisition Reform Act of 2003’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Executive agency defined. 
TITLE I—ACQUISITION WORKFORCE AND TRAINING 
Sec. 101. Definition of acquisition. 
Sec. 102. Acquisition workforce training fund. 
Sec. 103. Government-industry exchange program. 
Sec. 104. Acquisition workforce recruitment and retention program. 
Sec. 105. Architectural and engineering acquisition workforce. 
TITLE II—ADAPTATION OF BUSINESS ACQUISITION 
PRACTICES 
Subtitle A—Adaptation of Business Management Practices 
Sec. 201. Chief Acquisition Officers. 
Sec. 202. Chief Acquisition Officers Council. 
Sec. 203. Statutory and regulatory review. 
Subtitle B—Other Acquisition Improvements 
Sec. 211. Ensuring efficient payment. 
Sec. 212. Extension of authority to carry out franchise fund programs. 
Sec. 213. Agency acquisition protests. 
Sec. 214. Improvements in contracting for architectural and engineering serv-
ices. 
Sec. 215. Authorization of telecommuting for Federal contractors. 
TITLE III—CONTRACT INCENTIVES 
Sec. 301. Share-in-savings initiatives. 
Sec. 302. Incentives for contract efficiency. 
TITLE IV—ACQUISITIONS OF COMMERCIAL ITEMS 
Sec. 401. Preference for performance-based contracting. 
Sec. 402. Authorization of additional commercial contract types. 
Sec. 403. Clarification of commercial services definition. 
Sec. 404. Designation of commercial business entities. 
TITLE V—OTHER MATTERS 
Sec. 501. Authority to enter into certain procurement-related transactions and 
to carry out certain prototype projects. 
Sec. 502. Amendments relating to Federal emergency procurement flexibility. 
Sec. 503. Authority to make inflation adjustments to simplified acquisition 
threshold. 
Sec. 504. Technical corrections related to duplicative amendments.
SEC. 2. EXECUTIVE AGENCY DEFINED. 
In this Act, the term ‘‘executive agency’’ has the 
meaning given that term in section 4(1) of the Office of
Federal Procurement Policy Act (41 U.S.C. 403(1)), un-
less specifically stated otherwise. 
TITLE I—ACQUISITION 
WORKFORCE AND TRAINING 
SEC. 101. DEFINITION OF ACQUISITION. 
Section 4 of the Office of Federal Procurement Policy 
Act (41 U.S.C. 403) is amended by adding at the end the 
following: 
‘‘(16) The term ‘acquisition’—
‘‘(A) means the process of acquiring, with 
appropriated funds, by contract for purchase or 
lease, property or services (including construc-
tion) that support the missions and goals of an 
executive agency, from the point at which the 
requirements of the executive agency are estab-
lished in consultation with the chief acquisition 
officer of the executive agency; and 
‘‘(B) includes—
‘‘(i) the process of acquiring property 
or services that are already in existence, or 
that must be created, developed, dem-
onstrated, and evaluated; 
‘‘(ii) the description of requirements 
to satisfy agency needs;
is amended by adding at the end of subsection (h) the 
following new paragraph: 
‘‘(3) 
ACQUISITION
WORKFORCE
TRAINING 
FUND.—(A) The Administrator of General Services 
shall establish an acquisition workforce training 
fund. The Administrator shall manage the fund 
through the Federal Acquisition Institute to support 
the training of the acquisition workforce of the exec-
utive agencies other than the Department of De-
fense. The Administrator shall consult with the Ad-
ministrator for Federal Procurement Policy in man-
aging the fund. 
‘‘(B) There shall be credited to the acquisition 
workforce training fund 5 percent of the fees col-
lected by executive agencies under the following con-
tracts: 
‘‘(i) Governmentwide task and delivery-
order contracts entered into under sections 
2304a and 2304b of title 10, United States 
Code, or sections 303H and 303I of the Federal 
Property and Administrative Services Act of 
1949 (41 U.S.C. 253h and 253i). 
‘‘(ii) Governmentwide contracts for the ac-
quisition of information technology as defined 
in section 11101 of title 40, United States
Code, and multiagency acquisition contracts for 
such technology authorized by section 11314 of 
such title. 
‘‘(iii) Multiple-award schedule contracts 
entered into by the Administrator of General 
Services. 
‘‘(C) The head of an executive agency that ad-
ministers a contract described in subparagraph (B) 
shall remit to the General Services Administration 
the amount required to be credited to the fund with 
respect to such contract at the end of each quarter 
of the fiscal year. 
‘‘(D) The Administrator of General Services, 
through the Office of Federal Acquisition Policy, 
shall ensure that funds collected for training under 
this section are not used for any purpose other than 
the purpose specified in subparagraph (A). 
‘‘(E) Amounts credited to the fund shall be in 
addition to funds requested and appropriated for 
education and training referred to in paragraph (1). 
‘‘(F) Amounts credited to the fund shall remain 
available until expended.’’.
SEC. 103. 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 contents 
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) ETHICS PROVISIONS.—
(1) ONE-YEAR RESTRICTION ON CERTAIN COM-
MUNICATIONS.—Section 207(c)(2)(A)(v) of title 18, 
United States Code, is amended by inserting ‘‘or 
38’’ after ‘‘chapter 37’’. 
(2) DISCLOSURE OF CONFIDENTIAL INFORMA-
TION.—Section 1905 of title 18, United States Code, 
is amended by inserting ‘‘or 38’’ after ‘‘chapter 37’’. 
(3) CONTRACT ADVICE.—Section 207(l) of title 
18, United States Code, is amended—
(A) in the subsection heading, by striking 
‘‘DETAILS.—’’ and inserting ‘‘DETAILEES.—’’; 
and
(B) by inserting ‘‘or 38’’ after ‘‘chapter 
37’’. 
(4) RESTRICTION
ON
DISCLOSURE
OF
PRO-
CUREMENT INFORMATION.—Section 27 of the Office 
of Federal Procurement Policy Act (41 U.S.C. 423) 
is amended in the last sentence of subsection (a)(1) 
by inserting ‘‘or 38’’ after ‘‘chapter 37’’. 
(e) 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’’; 
(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 fol-
lows: 
‘‘(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. 104. ACQUISITION WORKFORCE RECRUITMENT AND 
RETENTION PROGRAM. 
(a) AUTHORITY TO CARRY OUT PROGRAM.—For 
purposes of sections 3304, 5333, and 5753 of title 5, 
United States Code, the head of a department or agency 
of the United States (including the Secretary of Defense) 
may determine that certain Federal acquisition positions 
are ‘‘shortage category’’ positions in order to recruit and 
appoint directly to positions of employment in the depart-
ment or agency highly qualified persons, such as any per-
son who—
(1) holds a bachelor’s degree from an accredited 
institution of higher education;
(2) holds, from an accredited law school or an 
accredited institution of higher education—
(A) a law degree; or 
(B) a masters or equivalent degree in busi-
ness administration, public administration, or 
systems engineering; or 
(3) has significant experience with commercial 
acquisition practices, terms, and conditions. 
(b) REQUIREMENTS.—The exercise of authority to 
take a personnel action under this section shall be subject 
to policies prescribed by the Office of Personnel Manage-
ment that govern direct recruitment, including policies re-
quiring appointment of a preference eligible who satisfies 
the qualification requirements. 
(c) TERMINATION OF AUTHORITY.—The head of a 
department or agency may not appoint a person to a posi-
tion of employment under this section after September 30, 
2007. 
(d) REPORT.—Not later than March 31, 2007, the 
Administrator for Federal Procurement Policy shall sub-
mit to Congress a report on the implementation of this 
section. The report shall include—
(1) the Administrator’s assessment of the effi-
cacy of the exercise of the authority provided in this
section in attracting employees with unusually high 
qualifications to the acquisition workforce; and 
(2) any recommendations considered appro-
priate by the Administrator on whether the author-
ity to carry out the program should be extended. 
SEC. 105. ARCHITECTURAL AND ENGINEERING ACQUISI-
TION WORKFORCE. 
The Administrator for Federal Procurement Policy, 
in consultation with the Secretary of Defense, the Admin-
istrator of General Services, and the Director of the Office 
of Personnel Management, shall develop and implement a 
plan to ensure that the Federal Government maintains the 
necessary capability with respect to the acquisition of ar-
chitectural and engineering services to—
(1) ensure that Federal Government employees 
have the expertise to determine agency requirements 
for such services; 
(2) establish priorities and programs (including 
acquisition plans); 
(3) establish professional standards; 
(4) develop scopes of work; and 
(5) award and administer contracts for such 
services.
TITLE II—ADAPTATION OF BUSI-
NESS 
ACQUISITION 
PRAC-
TICES 
Subtitle A—Adaptation of Business 
Management Practices 
SEC. 201. CHIEF ACQUISITION OFFICERS. 
(a) APPOINTMENT
OF CHIEF ACQUISITION OFFI-
CERS.—(1) Section 16 of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 414) is amended to read as 
follows:
‘‘SEC. 16. AGENCY CHIEF ACQUISITION OFFICERS. 
‘‘(a) ESTABLISHMENT OF AGENCY CHIEF ACQUISI-
TION OFFICERS.—The head of each executive agency 
(other than the Department of Defense) shall appoint or 
designate a non-career employee as Chief Acquisition Offi-
cer for the agency, who shall—
‘‘(1) have acquisition management as that offi-
cial’s primary duty; and 
‘‘(2) advise and assist the head of the executive 
agency and other agency officials to ensure that the 
mission of the executive agency is achieved through 
the management of the agency’s acquisition activi-
ties.
‘‘(b) AUTHORITY AND FUNCTIONS OF AGENCY CHIEF 
ACQUISITION OFFICERS.—The functions of each Chief Ac-
quisition Officer shall include—
‘‘(1) monitoring the performance of acquisition 
activities and acquisition programs of the executive 
agency, evaluating the performance of those pro-
grams on the basis of applicable performance meas-
urements, and advising the head of the executive 
agency regarding the appropriate business strategy 
to achieve the mission of the executive agency; 
‘‘(2) increasing the use of full and open com-
petition in the acquisition of property and services 
by the executive agency by establishing policies, pro-
cedures, and practices that ensure that the executive 
agency receives a sufficient number of sealed bids or 
competitive proposals from responsible sources to 
fulfill the Government’s requirements (including per-
formance and delivery schedules) at the best value 
considering the nature of the property or service 
procured; 
‘‘(3) making acquisition decisions consistent 
with all applicable laws and establishing clear lines 
of authority, accountability, and responsibility for 
acquisition decisionmaking within the executive 
agency;
‘‘(4) managing the direction of acquisition pol-
icy for the executive agency, including implementa-
tion of the unique acquisition policies, regulations, 
and standards of the executive agency; 
‘‘(5) developing and maintaining an acquisition 
career management program in the executive agency 
to ensure that there is an adequate professional 
workforce; and 
‘‘(6) as part of the strategic planning and per-
formance evaluation process required under section 
306 of title 5, United States Code, and sections 
1105(a)(28), 1115, 1116, and 9703 of title 31, 
United States Code—
‘‘(A) assessing the requirements estab-
lished for agency personnel regarding knowl-
edge and skill in acquisition resources manage-
ment and the adequacy of such requirements 
for facilitating the achievement of the perform-
ance goals established for acquisition manage-
ment; 
‘‘(B) in order to rectify any deficiency in 
meeting such requirements, developing strate-
gies and specific plans for hiring, training, and 
professional development; and
‘‘(C) reporting to the head of the executive 
agency on the progress made in improving ac-
quisition management capability.’’. 
(2) The item relating to section 16 in the table of 
contents in section 1(b) of such Act is amended to read 
as follows:
‘‘Sec. 16. Chief Acquisition Officers.’’.
(b) REFERENCES TO SENIOR PROCUREMENT EXECU-
TIVE.—(1) The Office of Federal Procurement Policy Act 
(41 U.S.C. 403 et seq.), title III of the Federal Property 
and Administrative Services Act of 1949, and title 10, 
United States Code, are each amended by striking ‘‘senior 
procurement executive’’ and ‘‘senior procurement execu-
tives’’ each place such terms appear and inserting ‘‘Chief 
Acquisition Officer’’ and ‘‘Chief Acquisition Officers’’, re-
spectively. 
(2) Any reference to a senior procurement executive 
of a department or agency of the United States in any 
other provision of law or regulation, document, or record 
of the United States shall be deemed to be a reference 
to the Chief Acquisition Officer of the department or agen-
cy. 
(c) TECHNICAL CORRECTION.—Section 1115(a) of 
title 31, United States Code, is amended by striking ‘‘sec-
tion 1105(a)(29)’’ and inserting ‘‘section 1105(a)(28)’’.
SEC. 202. CHIEF ACQUISITION OFFICERS COUNCIL. 
(a) ESTABLISHMENT OF COUNCIL.—The Office of 
Federal Procurement Policy Act (41 U.S.C. 403 et seq.) 
is amended by inserting after section 16 the following new 
section: 
‘‘SEC. 16A. CHIEF ACQUISITION OFFICERS COUNCIL. 
‘‘(a) ESTABLISHMENT.—There is established in the 
executive branch a Chief Acquisition Officers Council. 
‘‘(b) MEMBERSHIP.—The members of the Council 
shall be as follows: 
‘‘(1) The Deputy Director for Management of 
the Office of Management and Budget, who shall act 
as Chairman of the Council. 
‘‘(2) The Administrator for Federal Procure-
ment Policy. 
‘‘(3) The chief acquisition officer of each execu-
tive agency. 
‘‘(4) The Under Secretary of Defense for Ac-
quisition, Technology, and Logistics. 
‘‘(5) Any other officer or employee of the 
United States designated by the Chairman. 
‘‘(c) LEADERSHIP; SUPPORT.—(1) The Adminis-
trator for Federal Procurement Policy shall lead the ac-
tivities of the Council on behalf of the Deputy Director 
for Management.
‘‘(2)(A) The Vice Chairman of the Council shall be 
selected by the Council from among its members. 
‘‘(B) The Vice Chairman shall serve a 1-year term, 
and may serve multiple terms. 
‘‘(3) The Administrator of General Services shall pro-
vide administrative and other support for the Council. 
‘‘(d) PRINCIPAL FORUM.—The Council is designated 
the principal interagency forum for monitoring and im-
proving the Federal acquisition system. 
‘‘(e) FUNCTIONS.—The Council shall perform func-
tions that include the following: 
‘‘(1) Develop recommendations for the Director 
of the Office of Management and Budget on Federal 
acquisition policies and requirements. 
‘‘(2) Share experiences, ideas, best practices, 
and innovative approaches related to Federal acqui-
sition. 
‘‘(3) Assist the Administrator in the identifica-
tion, development, and coordination of multiagency 
projects and other innovative initiatives to improve 
Federal acquisition. 
‘‘(4) Promote effective business practices that 
ensure the timely delivery of best value products to 
the Federal Government and achieve appropriate 
public policy objectives.
‘‘(5) Further integrity, fairness, competition, 
openness, and efficiency in the Federal acquisition 
system. 
‘‘(6) Work with the Office of Personnel Man-
agement to assess and address the hiring, training, 
and professional development needs of the Federal 
Government related to acquisition. 
‘‘(7) Work with the Administrator and the Fed-
eral Acquisition Regulatory Council to promote the 
business practices referred to in paragraph (4) and 
other results of the functions carried out under this 
subsection.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
in section 1(b) of such Act is amended by inserting after 
the item relating to section 16 the following new item:
‘‘Sec. 16A. Chief Acquisition Officers Council.’’.
SEC. 203. STATUTORY AND REGULATORY REVIEW. 
(a) ESTABLISHMENT.—Not later than 90 days after 
the date of the enactment of this Act, the Administrator 
for Federal Procurement Policy shall establish an advisory 
panel to review laws and regulations that hinder the use 
of commercial practices, performance-based contracting, 
the performance of acquisition functions across agency 
lines of responsibility, and the use of Governmentwide con-
tracts.
(b) MEMBERSHIP.—The panel shall be composed of 
at least nine individuals who are recognized experts in ac-
quisition law and Government acquisition policy. In mak-
ing appointments to the panel, the Administrator shall—
(1) consult with the Secretary of Defense, the 
Administrator of General Services, the Committees 
on Armed Services and Government Reform of the 
House of Representatives, and the Committees on 
Armed Services and Governmental Affairs of the 
Senate, and 
(2) ensure that the members of the panel reflect 
the diverse experiences in the public and private sec-
tors. 
(c) DUTIES.—The panel shall—
(1) review all Federal acquisition laws and reg-
ulations with a view toward ensuring increased use 
of commercial practices and performance-based con-
tracting; and 
(2) make any recommendations for the repeal 
or amendment of such laws or regulations that are 
considered necessary as a result of such review—
(A) to eliminate any provisions in such 
laws or regulations that are unnecessary for the 
effective, efficient, and fair award and adminis-
tration of contracts for the acquisition by the 
Federal Government of goods and services; 
(B) to ensure the continuing financial and 
ethical integrity of acquisitions by the Federal 
Government; and 
(C) to protect the best interests of the 
Federal Government. 
(d) REPORT.—Not later than one year after the es-
tablishment of the panel, the panel shall submit to the Ad-
ministrator and to the Committees on Armed Services and 
Government Reform of the House of Representatives and 
the Committees on Armed Services and Governmental Af-
fairs of the Senate a report containing a detailed state-
ment of the findings, conclusions, and recommendations 
of the panel. 
Subtitle B—Other Acquisition 
Improvements 
SEC. 211. ENSURING EFFICIENT PAYMENT. 
(a) REVISION TO FAR.—Not later than 180 days 
after the date of the enactment of this Act, the Federal 
Acquisition Regulation under sections 6 and 25 of the Of-
fice of Federal Procurement Policy Act shall be revised 
to provide the following: 
(1) Authority to permit, to the maximum extent 
practicable, Federal contractors for services to sub-
mit to the Federal Government invoices for payment 
either—
(A) biweekly through electronic means; or 
(B) monthly. 
(2) A requirement that for any such invoice 
submitted through electronic means, the date of the 
invoice shall be the date a proper invoice is received 
by the Federal Government. 
(3) A requirement that the Federal Government 
accept or reject such an invoice submitted through 
electronic means not later than 7 working days after 
the date of the invoice. 
(4) A requirement that all accepted invoices be 
paid as soon as possible, but in no event later than 
30 days after the date of the invoice. 
(b) DEFINITIONS.—In this section: 
(1) The term ‘‘payment’’ means an invoice pay-
ment as defined in section 32.001 of the Federal Ac-
quisition Regulation (48 C.F.R. 32.001), as in effect 
on May 1, 2002. 
(2) The term ‘‘proper invoice’’ has the meaning 
given that term in section 3901(a)(3) of title 31, 
United States Code.
SEC. 212. EXTENSION OF AUTHORITY TO CARRY OUT FRAN-
CHISE FUND PROGRAMS. 
Section 403(f) of the Federal Financial Management 
Act of 1994 (Public Law 103–356; 31 U.S.C. 501 note) 
is amended by striking ‘‘October 1, 2001’’ and inserting 
‘‘October 1, 2006’’. 
SEC. 213. 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 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 the contract may authorize the award 
of a contract, notwithstanding 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) 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 or in the United States Court of Federal 
Claims. 
‘‘(f) 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.—(1) 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) 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, or in the United States 
Court of Federal Claims. 
‘‘(f) 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.’’.
(2) The table of contents in section 1(b) of such Act 
is amended by inserting after the item relating to section 
303M the following new item:
‘‘303N. Protests.’’.
(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. 214. IMPROVEMENTS IN CONTRACTING FOR ARCHI-
TECTURAL AND ENGINEERING SERVICES. 
(a) CLARIFICATION OF DEFINITION OF SURVEYING 
AND MAPPING.—(1) Section 1102 of title 40, United 
States Code, is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) SURVEYING
AND
MAPPING.—The term 
‘surveying and mapping’ means services performed 
by 
professionals 
such 
as 
surveyors, 
photogrammetrists, hydrographers, geodesists, or 
cartographers in the collection, storage, retrieval, or 
dissemination of graphical or digital data to depict 
natural or manmade physical features, phenomena,
or boundaries of the earth and any information re-
lated to such data, including any such data that 
comprises a survey, map, chart, geographic informa-
tion system, remotely sensed image or data, or an 
aerial photograph.’’. 
(2) The Federal Acquisition Regulation shall be re-
vised to include the definition added by subsection (a) of 
this section. 
(b) TITLE 10.—Section 2855(b) of title 10, United 
States Code, is amended—
(1) in paragraph (2), by striking ‘‘$85,000’’ 
and inserting ‘‘$300,000’’; and 
(2) by adding at the end the following new 
paragraph:
‘‘(4) The selection and competition require-
ments described in subsection (a) shall apply to any 
contract for architectural and engineering services 
(including surveying and mapping services) that is 
entered into by the head of an agency (as such term 
is defined in section 2302 of this title).’’. 
(c) ARCHITECTURAL
AND
ENGINEERING
SERV-
ICES.—Architectural and engineering services (as defined 
in section 1102 of title 40, United States Code) shall not 
be offered under multiple-award schedule contracts en-
tered into by the Administrator of General Services or
under Governmentwide task and delivery-order contracts 
entered into under sections 2304a and 2304b of title 10, 
United States Code, or sections 303H and 303I of the 
Federal Property and Administrative Services Act of 1949 
(41 U.S.C. 253h and 253i) unless such services—
(1) are performed under the direct supervision 
of a professional engineer licensed in a State; and 
(2) are awarded in accordance with the selec-
tion procedures set forth in chapter 11 of title 40, 
United States Code. 
SEC. 215. AUTHORIZATION OF TELECOMMUTING FOR FED-
ERAL CONTRACTORS. 
(a) AMENDMENT
TO
THE FEDERAL ACQUISITION 
REGULATION.—Not later than 180 days after the date of 
the enactment of this Act, the Federal Acquisition Regu-
latory Council shall amend the Federal Acquisition Regu-
lation issued in accordance with sections 6 and 25 of the 
Office of Federal Procurement Policy Act (41 U.S.C. 405 
and 421) to permit telecommuting by employees of Fed-
eral Government contractors in the performance of con-
tracts entered into with executive agencies. 
(b) CONTENT
OF
AMENDMENT.—The regulation 
issued pursuant to subsection (a) shall, at a minimum, 
provide that solicitations for the acquisition of property
or services may not set forth any requirement or evalua-
tion criteria that would—
(1) render an offeror ineligible to enter into a 
contract on the basis of the inclusion of a plan of 
the offeror to permit the offeror’s employees to tele-
commute; or 
(2) reduce the scoring of an offer on the basis 
of the inclusion in the offer of a plan of the offeror 
to permit the offeror’s employees to telecommute, 
unless the contracting officer concerned first—
(A) determines that the requirements of 
the agency, including the security requirements 
of the agency, cannot be met if the telecom-
muting is permitted; and 
(B) documents in writing the basis for that 
determination. 
(c) GAO REPORT.—Not later than one year after the 
date on which the regulation required by subsection (a) 
is published in the Federal Register, the Comptroller Gen-
eral shall submit to Congress—
(1) an evaluation of—
(A) the conformance of the regulations 
with law; and 
(B) the compliance by executive agencies 
with the regulations; and
(2) any recommendations that the Comptroller 
General considers appropriate. 
(d) DEFINITION.—In this section, the term ‘‘execu-
tive agency’’ has the meaning given that term in section 
4 of the Office of Federal Procurement Policy Act (41 
U.S.C. 403). 
TITLE III—CONTRACT 
INCENTIVES
SEC. 301. 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 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 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 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 107–317; 116 
Stat. 2936) are repealed. 
SEC. 302. INCENTIVES FOR CONTRACT EFFICIENCY. 
(a) INCENTIVES FOR CONTRACT EFFICIENCY.—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. 41. INCENTIVES FOR EFFICIENT PERFORMANCE OF 
SERVICES CONTRACTS. 
‘‘(a) OPTIONS
FOR SERVICES CONTRACTS.—The 
head of an executive agency may include in a contract for 
the performance of services an option to extend the con-
tract by one or more additional periods on the basis of 
exceptional performance by the contractor. A contract that 
provides for such extensions shall include performance 
standards for measuring performance under the contract
and, to the maximum extent practicable, be performance-
based. 
‘‘(b) DEFINITION
OF
PERFORMANCE-BASED.—In 
this section, the term ‘performance-based’, with respect to 
a contract, task order, or contracting, means that the con-
tract, task order, or contracting, respectively, includes the 
use of performance work statements that set forth con-
tract requirements in clear, specific, and objective terms 
with measurable outcomes.’’. 
(b) CLERICAL AND TECHNICAL AMENDMENTS.—(1) 
The table of contents in section 1(b) of such Act is amend-
ed by striking the last item and inserting the following:
‘‘Sec. 40. Protection of constitutional rights of contractors. 
‘‘Sec. 41. Incentives for efficient performance of services contracts.’’.
(2) The section before section 41 of such Act (as 
added by subsection (a)) is redesignated as section 40. 
TITLE IV—ACQUISITIONS OF 
COMMERCIAL ITEMS 
SEC. 401. ADDITIONAL INCENTIVE FOR USE OF PERFORM-
ANCE-BASED CONTRACTING FOR SERVICES.
(a) OTHER CONTRACTS.—Section 41 of the Office of 
Federal Procurement Policy Act, as added by section 302, 
is amended—
(1) by redesignating subsection (b) as sub-
section (c); and
(2) by inserting after subsection (a) the fol-
lowing new subsection: 
‘‘(b) INCENTIVE FOR USE OF PERFORMANCE-BASED 
SERVICES CONTRACTS.—A performance-based contract 
for the procurement of services entered into by an execu-
tive agency or a performance-based task order for services 
issued by an executive agency may be treated as a contract 
for the procurement of commercial items if—
‘‘(1) the contract or task order sets forth spe-
cifically each task to be performed and, for each 
task—
‘‘(A) defines the task in measurable, mis-
sion-related terms; and 
‘‘(B) identifies the specific end products or 
output to be achieved; and 
‘‘(2) the source of the services provides similar 
services to the general public under terms and condi-
tions similar to those offered to the Federal Govern-
ment.’’. 
(c) CENTER
OF EXCELLENCE
IN SERVICE CON-
TRACTING.—Not later than 180 days after the date of the 
enactment of this Act, the Administrator for Federal Pro-
curement Policy shall establish a center of excellence in 
contracting for services. The center of excellence shall as-
sist the acquisition community by identifying, and serving
as a clearinghouse for, best practices in contracting for 
services in the public and private sectors. 
(d) REPEAL
OF SUPERSEDED PROVISION.—Sub-
section (b) of section 821 of the Floyd D. Spence National 
Defense Authorization Act for Fiscal Year 2001 (as en-
acted into law by Public Law 106–398; 114 Stat. 1654A–
218) is repealed. 
SEC. 402. AUTHORIZATION OF ADDITIONAL COMMERCIAL 
CONTRACT TYPES. 
Section 8002(d) of the Federal Acquisition Stream-
lining Act of 1994 (Public Law 103–355; 108 Stat. 3387; 
41 U.S.C. 264 note) is amended—
(1) in paragraph (1), by striking ‘‘and’’; 
(2) by striking the period at the end of para-
graph (2) and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(3) authority for use of a time and materials 
contract or a labor-hour contract for the procure-
ment of commercial services that are commonly sold 
to the general public through such contracts.’’
SEC. 403. CLARIFICATION OF COMMERCIAL SERVICES DEF-
INITION. 
Section 4(12) of the Office of Federal Procurement 
Policy Act (41 U.S.C. 403(12)) is amended—
(1) in subparagraph (A), by striking ‘‘, other 
than real property,’’ and inserting ‘‘(other than real 
property) or service’’; 
(2) in subparagraph (C), by inserting ‘‘or serv-
ice’’ after ‘‘item’’; 
(3) in subparagraph (D), by striking ‘‘(C), or 
(E)’’ and inserting ‘‘or (C), or any combination of 
services meeting the requirements of subparagraphs 
(A) or (C),’’; 
(4) by striking subparagraphs (E) and (F); 
(5) by redesignating subparagraphs (G) and 
(H) as subparagraphs (E) and (F), respectively; and 
(6) in subparagraph (E), as so redesignated, by 
striking ‘‘through (F)’’ and inserting ‘‘through (D)’’.
SEC. 404. DESIGNATION OF COMMERCIAL BUSINESS ENTI-
TIES. 
(a) IN GENERAL.—Section 4 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403), as amended by 
section 403, is further amended—
(1) by adding at the end of paragraph (12) the 
following new subparagraph: 
‘‘(G) Items or services produced or pro-
vided by a commercial entity.’’; and 
(2) by adding at the end the following new 
paragraph:
‘‘(16) The term ‘commercial entity’ means any 
enterprise whose primary customers are other than 
the Federal Government. In order to qualify as a 
commercial entity, at least 90 percent (in dollars) of 
the sales of the enterprise over the past three busi-
ness years must have been made to private sector 
entities.’’. 
(b) COMPTROLLER GENERAL REVIEW.—The Comp-
troller General shall review the implementation of the 
amendments made by subsection (a) to evaluate the effec-
tiveness of such implementation in increasing the avail-
ability of items and services to the Federal Government 
at fair and reasonable prices.
TITLE V—OTHER MATTERS 
SEC. 501. AUTHORITY TO ENTER INTO CERTAIN PROCURE-
MENT-RELATED 
TRANSACTIONS 
AND 
TO 
CARRY OUT CERTAIN PROTOTYPE PROJECTS. 
Title III of the Federal Property and Administrative 
Services Act of 1949 (41 U.S.C. 251 et seq.) is amended 
by adding at the end the following new section:
‘‘SEC. 318. AUTHORITY TO ENTER INTO CERTAIN TRANS-
ACTIONS FOR DEFENSE AGAINST OR RECOV-
ERY FROM TERRORISM OR NUCLEAR, BIO-
LOGICAL, CHEMICAL, OR RADIOLOGICAL AT-
TACK. 
‘‘(a) AUTHORITY.—
‘‘(1) IN GENERAL.—The head of an executive 
agency who engages in basic research, applied re-
search, advanced research, and development projects 
that—
‘‘(A) are necessary to the responsibilities of 
such official’s executive agency in the field of 
research and development, and 
‘‘(B) have the potential to facilitate de-
fense against or recovery from terrorism or nu-
clear, biological, chemical, or radiological at-
tack, 
may exercise the same authority (subject to the 
same restrictions and conditions) with respect to 
such research and projects as the Secretary of De-
fense may exercise under section 2371 of title 10, 
United States Code, except for subsections (b) and 
(f) of such section 2371. 
‘‘(2) PROTOTYPE PROJECTS.—The head of an 
executive agency may, under the authority of para-
graph (1), carry out prototype projects that meet the
requirements of subparagraphs (A) and (B) of para-
graph (1) in accordance with the requirements and 
conditions provided for carrying out prototype 
projects under section 845 of the National Defense 
Authorization Act for Fiscal Year 1994 (Public Law 
103–160; 10 U.S.C. 2371 note). In applying the re-
quirements and conditions of that section 845—
‘‘(A) subsection (c) of that section shall 
apply with respect to prototype projects carried 
out under this paragraph; and 
‘‘(B) the Director of the Office of Manage-
ment and Budget shall perform the functions of 
the Secretary of Defense under subsection (d) 
of that section. 
‘‘(3) APPLICABILITY TO SELECTED EXECUTIVE 
AGENCIES.—
‘‘(A) OMB AUTHORIZATION REQUIRED.—
The head of an executive agency may exercise 
authority under this subsection only if author-
ized by the Director of the Office of Manage-
ment and Budget to do so. 
‘‘(B) RELATIONSHIP
TO
AUTHORITY
OF 
DEPARTMENT OF HOMELAND SECURITY.—The 
authority under this subsection shall not apply 
to the Secretary of Homeland Security while
section 831 of the Homeland Security Act of 
2002 (Public Law 107-296; 116 Stat. 2224) is 
in effect. 
‘‘(b) ANNUAL REPORT.—The annual report of the 
head of an executive agency that is required under sub-
section (h) of section 2371 of title 10, United States Code, 
as applied to the head of the executive agency by sub-
section (a), shall be submitted to the Committee on Gov-
ernmental Affairs of the Senate and the Committee on 
Government Reform of the House of Representatives. 
‘‘(c) REGULATIONS.—The Director of the Office of 
Management and Budget shall prescribe regulations to 
carry out this section.’’. 
SEC. 502. AMENDMENTS RELATING TO FEDERAL EMER-
GENCY PROCUREMENT FLEXIBILITY. 
(a) REPEAL OF SUNSET FOR AUTHORITIES APPLICA-
BLE TO PROCUREMENTS FOR DEFENSE AGAINST OR RE-
COVERY FROM TERRORISM OR NUCLEAR, BIOLOGICAL, 
CHEMICAL, OR RADIOLOGICAL ATTACK.—Section 852 of 
the Homeland Security Act of 2002 (Public Law 107–296; 
116 Stat. 2235) is amended by striking ‘‘, but only if a 
solicitation of offers for the procurement is issued during 
the 1-year period beginning on the date of the enactment 
of this Act’’.
(b) APPLICABILITY OF INCREASED SIMPLIFIED AC-
QUISITION THRESHOLD.—(1) The matter preceding para-
graph (1) of section 853(a) of the Homeland Security Act 
of 2002 (Public Law 107–296; 116 Stat. 2235) is amend-
ed to read as follows: 
‘‘(a) THRESHOLD AMOUNTS.—For a procurement re-
ferred to in section 852, the simplified acquisition thresh-
old referred to in section 4(11) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403(11)) is deemed 
to be—’’. 
(2) Subsections (b) and (c) of section 853 of such 
Act are repealed. 
(3) The heading of section 853 of such Act is amend-
ed to read as follows: 
‘‘SEC. 853. INCREASED SIMPLIFIED ACQUISITION THRESH-
OLD FOR CERTAIN PROCUREMENTS.’’. 
(4) The table of contents in section 1(b) of such Act 
is amended by striking the item relating to section 853 
and inserting the following:
‘‘Sec. 853. Increased simplified acquisition threshold for certain procurements.’’.
(5) Section 18(c)(1) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 416(c)(1)) is amended—
(A) by striking ‘‘or’’ at the end of subpara-
graph (G); 
(B) by striking the period at the end of sub-
paragraph (H) and inserting ‘‘; or’’; and
(C) by adding at the end the following: 
‘‘(I) the procurement is by the head of an 
executive agency pursuant to the special proce-
dures provided in section 853 of the Homeland 
Security Act of 2002 (Public Law 107–296).’’. 
(c) APPLICABILITY OF CERTAIN COMMERCIAL ITEMS 
AUTHORITIES.—(1) Subsection (a) of section 855 of the 
Homeland Security Act of 2002 (Public Law 107–296; 
116 Stat. 2236) is amended to read as follows: 
‘‘(a) AUTHORITY.— With respect to a procurement 
referred to in section 852, the head of an executive agency 
may deem any item or service to be a commercial item 
for the purpose of Federal procurement laws.’’. 
(2) Subsection (b)(1) of section 855 of such Act is 
amended by striking ‘‘to which any of the provisions of 
law referred to in subsection (a) are applied’’. 
(d) EXTENSION OF DEADLINE FOR REVIEW AND RE-
PORT.—Section 857(a) of the Homeland Security Act of 
2002 (Public Law 107–296; 116 Stat. 2237) is amended 
by striking ‘‘2004’’ and inserting ‘‘2006’’. 
SEC. 503. AUTHORITY TO MAKE INFLATION ADJUSTMENTS 
TO SIMPLIFIED ACQUISITION THRESHOLD. 
Section 4(11) of the Office of Federal Procurement 
Policy Act (41 U.S.C. 403(11)) is amended by inserting 
before the period at the end the following: ‘‘, except that
such amount may be adjusted by the Administrator every 
five years to the amount equal to $100,000 in constant 
fiscal year 2003 dollars (rounded to the nearest 
$10,000)’’. 
SEC. 504. TECHNICAL CORRECTIONS RELATED TO DUPLI-
CATIVE AMENDMENTS. 
(a) REPEAL OF SUPERSEDED SUBCHAPTER AND RE-
LATED CONFORMING AMENDMENTS.—(1) Subchapter II 
of chapter 35 of title 44, United States Code, is repealed. 
(2) Subchapter III of such chapter is redesignated 
as subchapter II. 
(3) Section 3549 of title 44, United States Code, is 
amended by striking the sentence beginning with ‘‘While 
this subchapter’’. 
(4) The table of sections at the beginning of chapter 
35 of title 44, United States Code, is amended—
(A) by striking the items relating to sections 
3531 through 3538; and 
(B) by striking the heading ‘‘SUBCHAPTER 
III’’. 
(5) Section 2224a of title 10, United States Code, 
is repealed, and the table of sections at the beginning of 
chapter 131 of such title is amended by striking the item 
relating to such section.
(b) CONFORMING AMENDMENTS RELATED TO RE-
PEALS
OF SHARE-IN-SAVINGS
AND SOLUTIONS-BASED 
CONTRACTING PILOT PROGRAMS.—(1) Chapter 115 of 
title 40, United States Code, is repealed. 
(2) The table of chapters at the beginning of subtitle 
III of such title is amended by striking the item relating 
to chapter 115. 
(c) AMENDMENTS MADE BY E-GOVERNMENT ACT 
MADE APPLICABLE.—The following provisions of law 
shall read as if the amendments made by title X of the 
Homeland Security Act of 2002 (Public Law 107–296) 
to such provisions did not take effect: 
(1) Section 2224 of title 10, United States 
Code. 
(2) Sections 20 and 21 of the National Insti-
tute of Standards and Technology Act (15 U.S.C. 
278g-3 and 278g-4). 
(3) Sections 11331 and 11332 of title 40, 
United States Code. 
(4) Subtitle G of title X of the Floyd D. Spence 
National Defense Authorization Act for Fiscal Year 
2001 (Public Law 106–398; 44 U.S.C. 3531 note). 
(5) Sections 3504(g), 3505, and 3506(g) of 
title 44, United States Code.
(d) CORRECTION OF CROSS REFERENCE.—Section 
2224(c) of title 10, United States Code, as amended by 
section 301(c)(1)(B)(iii) of the E-Government Act of 2002 
(Public Law 107–347; 116 Stat. 2955), is amended by 
striking ‘‘subchapter III’’ and inserting ‘‘subchapter II’’.
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