I
106TH CONGRESS
1ST SESSION
H. R. 3116
To promote openness, transparency, and efficiency in international govern-
ment procurement through capacity building and, where appropriate,
third-party procurement monitoring, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 20, 1999
Mr. KOLBE (for himself and Mr. MATSUI) introduced the following bill; which
was referred to the Committee on Banking and Financial Services, and
in addition to the Committee on International Relations, for a period to
be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee
concerned
A BILL
To promote openness, transparency, and efficiency in inter-
national government procurement through capacity build-
ing and, where appropriate, third-party procurement
monitoring, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Fair Competition in
Foreign Commerce Act of 1999’’.
SEC. 2. FINDINGS AND STATEMENT OF PURPOSE.
(a) FINDINGS.—The Congress finds the following:
(1) The United States makes substantial con-
tributions and provides significant funding for major
international development projects through inter-
national financial institutions and bilateral non-
humanitarian assistance.
(2) These international development projects
are often plagued with fraud, corruption, waste, in-
efficiency, and misuse of funding.
(3) Fraud, corruption, waste, inefficiency, mis-
use, and abuse are major impediments to competi-
tion in foreign commerce throughout the world.
(4) Identifying these impediments after they
occur is inadequate and meaningless.
(5) Detection of impediments before they occur
helps to ensure that valuable United States re-
sources contributed to important international devel-
opment projects are used appropriately.
(6) Independent third-party procurement moni-
toring is an important tool for detecting and pre-
venting such impediments.
(7) Third-party procurement monitoring in-
cludes evaluations of each stage of the procurement
process and assures the openness and transparency
of the process.
(8) Improving transparency and openness in the
procurement process helps to minimize fraud, cor-
ruption, waste, inefficiency, and other misuse of
funding, 
and 
promotes 
competition, 
thereby
strengthening international trade and foreign com-
merce.
(b) PURPOSE.—The purpose of this Act is to build
on the excellent progress associated with the Organization
on Economic Development and Cooperation Agreement on
Bribery and Corruption by promoting the use of inde-
pendent third-party procurement monitoring as part of
United States participation in the international financial
institutions and in the disbursement by the United States
of bilateral nonhumanitarian foreign assistance funds, so
as to ensure open, efficient, and transparent government
procurement practices.
SEC. 3. DEFINITIONS.
In this Act:
(1) APPROPRIATE
COMMITTEES.—The term
‘‘appropriate committees’’ means the Committees on
Finance and on Commerce, Science, and Technology
of the Senate and the Committees on Ways and
Means and on Commerce of the House of Represent-
atives.
(2) INDEPENDENT
THIRD-PARTY
PROCURE-
MENT MONITORING.—The term ‘‘independent third-
party procurement monitoring’’ means a program
to—
(A) eliminate bias,
(B) promote transparency and open com-
petition, and
(C) minimize fraud, corruption, waste, in-
efficiency, and other misuse of funds,
in international procurement through independent
evaluation of the technical, financial, economic, and
legal aspects of the procurement process.
(3) INDEPENDENT.—The term ‘‘independent’’
means that monitoring the procurement process does
not pose a conflict of interest for the person doing
so.
(4) EACH STAGE OF PROCUREMENT.—The term
‘‘each stage of procurement’’ means the development
and issuance of technical specifications, bidding doc-
uments, evaluation reports, contract preparation,
and the delivery of goods and services.
(5) 
INTERNATIONAL
FINANCIAL
INSTITU-
TION.—The term ‘‘international financial institu-
tion’’ has the meaning given in section 1701(c)(2) of
the International Financial Institutions Act.
SEC. 4. REQUIREMENTS FOR FAIR COMPETITION IN FOR-
EIGN COMMERCE.
(a) IN GENERAL.—Not later than 180 days after the
date of enactment of this Act, the Secretary of the Treas-
ury shall transmit to the President and to the appropriate
committees a plan for promoting international government
procurement reforms relating to the United States partici-
pation in international financial institutions, including the
use of third party procurement monitoring where appro-
priate.
(b) PLAN.—The plan shall include an instruction by
the Secretary of the Treasury to the United States Execu-
tive Director of each international financial institution to
use the voice and vote of the United States to oppose the
use of funds appropriated or made available by the United
States for any non-humanitarian assistance, until—
(1) 
the 
institution 
has 
adopted 
an
anticorruption plan that requires the use of inde-
pendent third-party procurement monitoring services
in any case in which the country receiving such as-
sistance lacks the necessary organization, resources,
and expertise to ensure openness, efficiency, and
transparency in government procurement; and
(2) each country receiving such assistance insti-
tutes specific strategies for minimizing corruption
and maximizing transparency in each stage of the
procurement process.
(c) ANNUAL REPORTS.—Not later than June 29 of
each year, the Secretary of the Treasury shall report to
the appropriate committees on the progress in imple-
menting procurement reforms made by each international
financial institution and each country that received non-
humanitarian assistance from such an institution during
the preceding year.
(d) 
RESTRICTIONS
ON
ASSISTANCE.—Notwith-
standing any other provision of law, no funds appropriated
or made available for non-humanitarian foreign assistance
programs, including the activities of the Agency for Inter-
national Development, may be expended for a government
procurement program unless each country eligible to re-
ceive assistance under such programs and each inter-
national financial institution involved has demonstrated
that 
significant 
progess 
is 
being 
made 
toward
institutionalizing—
(1) procurement practices which are open,
transparent, and free of corruption, fraud, ineffi-
ciency, and other misuse; and
(2) independent third-party monitoring of gov-
ernment procurement, in the case of such countries
that lack necessary organization, resources, and ex-
pertise.
SEC. 5. EXCEPTIONS.
(a) NATIONAL SECURITY.—Section 4 shall not apply
with respect to a country if the President determines with
respect to such country that making funds available is in
the national security interests of the United States. Any
such determination shall cease to be effective 6 months
after being made unless the President determines that its
continuation is in the national security interests of the
United States.
(b) OTHER EXCEPTIONS.—Section 4 shall not apply
with respect to assistance to—
(1) meet urgent humanitarian needs (including
providing food, medicine, disaster, and refugee re-
lief);
(2) facilitate democratic political reform and
rule of law activities;
(3) create private sector and nongovernmental
organizations that are independent of government
control; or
(4) facilitate development of a free market eco-
nomic system.
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