I
107TH CONGRESS
1ST SESSION
H. R. 2547
To require certain executive agencies to carry out a cost-effective program
for identifying any errors made in paying contractors and for recovering
any amounts erroneously paid to contractors.
IN THE HOUSE OF REPRESENTATIVES
JULY 18, 2001
Mr. BURTON of Indiana (for himself and Mr. ARMEY) introduced the following
bill; which was referred to the Committee on Government Reform
A BILL
To require certain executive agencies to carry out a cost-
effective program for identifying any errors made in pay-
ing contractors and for recovering any amounts erro-
neously paid to contractors.
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 ‘‘Erroneous Payments
Recovery Act of 2001’’.
SEC. 2. IDENTIFICATION OF ERRORS MADE BY EXECUTIVE
AGENCIES IN PAYMENTS TO CONTRACTORS
AND RECOVERY OF AMOUNTS ERRONEOUSLY
PAID.
(a) PROGRAM REQUIRED.—The head of each execu-
tive agency that enters into contracts with a total value
in excess of $500,000,000 in a fiscal year shall carry out
a cost-effective program for identifying any errors made
in paying the contractors and for recovering any amounts
erroneously paid to the contractors.
(b) RECOVERY AUDITS AND ACTIVITIES.—A program
of an executive agency under subsection (a) shall include
recovery audits and recovery activities. The head of the
executive agency shall determine, in accordance with guid-
ance provided under subsection (c), the classes of con-
tracts to which recovery audits and recovery activities are
appropriately applied.
(c) OMB GUIDANCE.—The Director of the Office of
Management and Budget shall issue guidance for the con-
duct of programs under subsection (a). The guidance shall
include the following:
(1) Definitions of the terms ‘‘recovery audit’’
and ‘‘recovery activity’’ for the purposes of the pro-
grams.
(2) The classes of contracts to which recovery
audits and recovery activities are appropriately ap-
plied under the programs.
(3) Protections for the confidentiality of—
(A) sensitive financial information that has
not been released for use by the general public;
and
(B) information that could be used to iden-
tify a person.
(4) Policies and procedures for ensuring that
the implementation of the programs does not result
in duplicative audits of contractor records.
(5) Policies regarding the types of contracts ex-
ecutive agencies may use for the procurement of re-
covery services, including guidance for use, in appro-
priate circumstances, of a contingency contract pur-
suant to which the head of an executive agency may
pay a contractor an amount equal to a percentage
of the total amount collected for the United States
pursuant to that contract.
(6) Protections for a contractor’s records and
facilities through restrictions on the authority of a
contractor under a contract for the procurement of
recovery services for an executive agency—
(A) to require the production of any record
or information by any person other than an of-
ficer, employee, or agent of the executive
agency;
(B) to establish, or otherwise have, a phys-
ical presence on the property or premises of any
private sector entity for the purposes of per-
forming the contract; or
(C) to act as agents for the Government in
the recovery of funds erroneously paid to con-
tractors.
(7) Policies for the appropriate types of man-
agement improvement programs authorized by sec-
tion 5 that executive agencies may carry out to ad-
dress overpayment problems and the recovery of
overpayments.
SEC. 3. DISPOSITION OF RECOVERED FUNDS.
(a) AVAILABILITY OF FUNDS FOR RECOVERY AUDITS
AND ACTIVITIES PROGRAM.—Funds collected under a pro-
gram carried out by an executive agency under section 2
shall be available to the executive agency, without further
appropriation, for the following purposes:
(1) To reimburse the actual expenses incurred
by the executive agency in the administration of the
program.
(2) To pay contractors for services under the
program in accordance with the guidance issued
under section 2(c)(5).
(b) FUNDS
NOT
USED
FOR
PROGRAM.—Any
amounts erroneously paid by an executive agency that are
recovered under such a program of an executive agency
and are not used to reimburse expenses or pay contractors
under subsection (a)—
(1) shall be credited to the appropriations from
which the erroneous payments were made that re-
main available for obligation as of the time such
amounts were collected, shall be merged with other
amounts in those appropriations, and shall be avail-
able for the purposes and period for which such ap-
propriations are available; or
(2) if no such appropriation remains available
for obligation at that time, shall be disposed of as
provided in subsection (c).
(c) OTHER DISPOSITIONS.—Of the total amount col-
lected under such a program of an executive agency that
is to be disposed of under this subsection—
(1) up to 25 percent of such amount may be ex-
pended by the head of the executive agency for car-
rying out any management improvement program of
the executive agency under section 5; and
(2) the remainder of that total amount, includ-
ing any amount not expended under paragraph (1),
shall be deposited in the Treasury as miscellaneous
receipts.
(d) PRIORITY
OF OTHER AUTHORIZED DISPOSI-
TIONS.—Notwithstanding subsections (b) and (c), the au-
thority under such subsections may not be exercised to
use, credit, or deposit funds collected under such a pro-
gram as provided in those subsections to the extent that
any other provision of law requires or authorizes the cred-
iting of such funds to a nonappropriated fund instrumen-
tality, revolving fund, working-capital fund, trust fund, or
other fund or account.
SEC. 4. SOURCES OF RECOVERY SERVICES.
(a) CONSIDERATION OF AVAILABLE RECOVERY RE-
SOURCES.—(1) In carrying out a program under section
2, the head of an executive agency shall consider all re-
sources available to that official to carry out the program.
(2) The resources considered by the head of an execu-
tive agency for carrying out the program shall include the
resources available to the executive agency for such pur-
pose from the following sources:
(A) The executive agency.
(B) Other departments and agencies of the
United States.
(C) Private sector sources.
(b) COMPLIANCE WITH APPLICABLE LAW AND REG-
ULATIONS.—Before entering into a contract with a private
sector source for the performance of services under a pro-
gram of the executive agency carried out under section 2,
the head of an executive agency shall comply with—
(1) any otherwise applicable provisions of Office
of Management and Budget Circular A–76; and
(2) any other applicable provision of law or reg-
ulation with respect to the selection between employ-
ees of the United States and private sector sources
for the performance of services.
SEC. 5. MANAGEMENT IMPROVEMENT PROGRAMS.
In accordance with guidance provided by the Director
of the Office of Management and Budget under section
2, the head of an executive agency required to carry out
a program under section 2 may carry out a program for
improving management processes within the executive
agency—
(1) to address problems that contribute directly
to the occurrence of errors in the paying of contrac-
tors of the executive agency; or
(2) to improve the recovery of overpayments
due to the agency.
SEC. 6. REPORTS.
(a) REQUIREMENT FOR REPORTS.—Not later than
30 months after the date of the enactment of this Act,
and annually for each of the first two years following the
year of the first report, the Director of the Office of Man-
agement and Budget shall submit to the House Committee
on Government Reform and the Senate Committee on
Governmental Affairs, a report on the implementation of
this Act.
(b) CONTENT.—Each report shall include—
(1) a general description and evaluation of the
steps taken by the heads of executive agencies to
carry out the programs under this Act, including
any management improvement programs carried out
under section 5;
(2) the costs incurred by executive agencies to
carry out the programs under this Act; and
(3) the amounts recovered under the programs
under this Act.
SEC. 7. RELATIONSHIP TO AUTHORITY OF INSPECTORS
GENERAL.
Nothing in this Act shall be construed as impairing
the authority of an Inspector General under the Inspector
General Act of 1978 or any other provision of law.
SEC. 8. PRIVACY PROTECTIONS.
(a) PROHIBITION.—Any nongovernmental entity
that, in the course of recovery auditing or recovery activity
under this Act, obtains information that identifies an indi-
vidual or with respect to which there is a reasonable basis
to believe that the information can be used to identify an
individual, may not disclose the information for any pur-
pose other than such recovery auditing or recovery activity
and governmental oversight of such activity, unless disclo-
sure for that other purpose is authorized by the individual
to the executive agency that contracted for the perform-
ance of the recovery auditing or recovery activity.
(b) LIABILITY.—Any person that violates subsection
(a) shall be liable for any damages (including nonpecu-
niary damages), costs, and attorneys fees incurred by the
individual as a result of the violation.
SEC. 9. DEFINITION.
In this Act, the term ‘‘executive agency’’ has the
meaning given the term in section 4(1) of the Office of
Federal Procurement Policy Act (41 U.S.C. 403(1)).
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