II Calendar No. 656 114th CONGRESS 2d Session S. 1526 [Report No. 114–366] IN THE SENATE OF THE UNITED STATES June 8, 2015 Mr. Portman (for himself, Ms. Hirono , Ms. Ayotte , and Mrs. Shaheen ) introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs October 27, 2016 Reported under authority of the order of the Senate of September 29, 2016, by Mr. Johnson , with an amendment Strike out all after the enacting clause and insert the part printed in italic A BILL To amend title 10 and title 41, United States Code, to improve the manner in which Federal contracts for construction and design services are awarded, to prohibit the use of reverse auctions for design and construction services procurements, to amend title 31 and title 41, United States Code, to improve the payment protections available to construction contractors, subcontractors, and suppliers for work performed, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Construction Consensus Procurement Improvement Act of 2015 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Congressional findings. Sec. 3. Design-build construction process improvement. Sec. 4. Prohibition on the use of a reverse auction for the award of a contract for design and construction services. Sec. 5. Assuring payment protections for construction subcontractors and suppliers under an alternative to a Miller Act payment bond. Sec. 6. SBA surety bond guarantee program. 2. Congressional findings Congress makes the following findings: (1) The acquisition procedures that are often used effectively to procure products and other forms of services are not always appropriate for procurement of design and construction services. (2) Federal procurement officials often adopt contracting techniques from the private sector and have used those techniques effectively to procure products and services. (3) Design-build is a procurement technique Federal officials have adopted from the private sector that has worked well for procurement of design and construction services. (4) The current statutory framework for design-build could benefit from legislative refinement. (5) Reverse auctions are another procurement technique Federal officials have adopted from the private sector and used successfully to award contracts for the purchase of products that are commercially equivalent to commodities. (6) Despite their success in other contexts, reverse auctions are generally inappropriate for procurement of design and construction services, given the unique nature of each such project. (7) To ensure payment protection for contractors, subcontractors, and suppliers working on Federal construction projects, bonds backed by individual sureties must be placed in the care and custody of the Federal Government and be supported by assets that are real, sufficient, verifiable, and readily convertible into cash. 3. Design-build construction process improvement (a) Civilian contracts (1) In general Section 3309 of title 41, United States Code, is amended— (A) by amending subsection (b) to read as follows: (b) Criteria for use (1) Contracts with a value of at least $750,000 Two-phase selection procedures shall be used for entering into a contract for the design and construction of a public building, facility, or work when a contracting officer determines that the contract has a value of $750,000 or greater, as adjusted for inflation in accordance with section 1908 of this title. (2) Contracts with a value less than $750,000 For projects that a contracting officer determines have a value of less than $750,000, the contracting officer shall make a determination whether two-phase selection procedures are appropriate for use for entering into a contract for the design and construction of a public building, facility, or work when— (A) the contracting officer anticipates that 3 or more offers will be received for the contract; (B) design work must be performed before an offeror can develop a price or cost proposal for the contract; (C) the offeror will incur a substantial amount of expense in preparing the offer; and (D) the contracting officer has considered information such as— (i) the extent to which the project requirements have been adequately defined; (ii) the time constraints for delivery of the project; (iii) the capability and experience of potential contractors; (iv) the suitability of the project for use of the two-phase selection procedures; (v) the capability of the agency to manage the two-phase selection process; and (vi) other criteria established by the agency. ; and (B) in subsection (d), by striking The maximum number specified in the solicitation shall not exceed 5 unless the agency determines with respect to and all that follows through the period at the end and inserting the following: The maximum number specified in the solicitation shall not exceed 5 unless the head of the contracting activity, delegable to a level no lower than the senior contracting official within the contracting activity, approves the contracting officer's justification that an individual solicitation must have greater than 5 finalists to be in the Federal Government’s interest. The contracting officer shall provide written documentation of how a maximum number of offerors exceeding 5 is consistent with the purposes and objectives of the two-phase selection process. . (2) Annual reports (A) In general Not later than November 30 of 2016, 2017, 2018, 2019, and 2020, the head of each agency shall compile an annual report of each instance in which the agency awarded a design-build contract pursuant to section 3309 of title 41, United States Code, during the fiscal year ending in such calendar year, in which— (i) more than 5 finalists were selected for phase-two requests for proposals; or (ii) the contract was awarded without using two-phase selection procedures. (B) Public availability The Director of the Office of Management and Budget shall facilitate public access to the reports, including by posting them on a publicly available Internet website. A notice of the availability of each report shall be published in the Federal Register. (b) Defense contracts (1) In general Section 2305a of title 10, United States Code, is amended— (A) by amending subsection (b) to read as follows: (b) Criteria for use (1) Contracts with a value of at least $750,000 Two-phase selection procedures shall be used for entering into a contract for the design and construction of a public building, facility, or work when a contracting officer determines that the contract has a value of $750,000 or greater, as adjusted for inflation in accordance with section 1908 of title 41, United States Code. (2) Contracts with a value less than $750,000 For projects that a contracting officer determines have a value of less than $750,000, the contracting officer shall make a determination whether two-phase selection procedures are appropriate for use for entering into a contract for the design and construction of a public building, facility, or work when— (A) the contracting officer anticipates that 3 or more offers will be received for the contract; (B) design work must be performed before an offeror can develop a price or cost proposal for the contract; (C) the offeror will incur a substantial amount of expense in preparing the offer; and (D) the contracting officer has considered information such as— (i) the extent to which the project requirements have been adequately defined; (ii) the time constraints for delivery of the project; (iii) the capability and experience of potential contractors; (iv) the suitability of the project for use of the two-phase selection procedures; (v) the capability of the agency to manage the two-phase selection process; and (vi) other criteria established by the Department of Defense. ; and (B) in subsection (d), by striking The maximum number specified in the solicitation shall not exceed 5 unless the agency determines with respect to and all that follows through the period at the end and inserting the following: The maximum number specified in the solicitation shall not exceed 5 unless the head of the contracting activity approves the contracting officer's justification that an individual solicitation must have greater than 5 finalists to be in the Federal Government’s interest. The contracting officer shall provide written documentation of how a maximum number of offerors exceeding 5 is consistent with the purposes and objectives of the two-phase selection process. . (2) Annual reports (A) In general Not later than November 30 of 2016, 2017, 2018, 2019, and 2020, the Secretary of Defense shall compile an annual report of each instance in which the Department awarded a design-build contract pursuant to section 2305a of title 10, United States Code, during the fiscal year ending in such calendar year, in which— (i) more than 5 finalists were selected for phase-two requests for proposals; or (ii) the contract was awarded without using two-phase selection procedures. (B) Public availability The Director of the Office of Management and Budget shall facilitate public access to the reports, including by posting them on a publicly available Internet website. A notice of the availability of each report shall be published in the Federal Register. (c) GAO reports (1) Civilian contracts Not later than 270 days after the deadline for the final reports required under subsection (f) of section 3309 of title 41, United States Code, as added by subsection (a)(1), the Comptroller General of the United States shall issue a report analyzing the compliance of the various Federal agencies with the requirements of such section. (2) Defense contracts Not later than 270 days after the deadline for the final reports required under subsection (f) of section 2305a of title 10, United States Code, as added by subsection (b)(1), the Comptroller General of the United States shall issue a report analyzing the compliance of the Department of Defense with the requirements of such section. 4. Prohibition on the use of a reverse auction for the award of a contract for design and construction services (a) Prohibition Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council, in consultation with the Administrator for Federal Procurement Policy, shall amend the Federal Acquisition Regulation to prohibit the use of reverse auctions for awarding contracts for construction and design services. (b) Definitions For purposes of this section— (1) the term design and construction services means— (A) site planning and landscape design; (B) architectural and engineering services (including surveying and mapping defined in section 1101 of title 40, United States Code); (C) interior design; (D) performance of construction work for facility, infrastructure, and environmental restoration projects; (E) delivery and supply of construction materials to construction sites; and (F) construction or substantial alteration or repair of public buildings or public works; and (2) the term reverse auction means, with respect to procurement by an agency— (A) a real-time auction conducted through an electronic medium between a group of offerors who compete against each other by submitting bids for a contract or task order with the ability to submit revised bids throughout the course of the auction; and (B) the award of the contract or task order to the offeror who submits the lowest bid. 5. Assuring payment protections for construction subcontractors and suppliers under an alternative to a Miller Act payment bond Chapter 93 of subtitle VI of title 31, United States Code, is amended— (1) by adding at the end the following new section: 9310. Individual sureties If another applicable law or regulation permits the acceptance of a bond from a surety that is not subject to sections 9305 and 9306 and is based on a pledge of assets by the surety, the assets pledged by such surety shall— (1) consist of eligible obligations described under section 9303(a); and (2) be submitted to the official of the Government required to approve or accept the bond, who shall deposit the assets with a depository described under section 9303(b). ; and (2) in the table of sections for such chapter, by adding at the end the following new item: 9310. Individual sureties. . 6. SBA surety bond guarantee program Section 411(c)(1) of the Small Business Investment Act of 1958 ( 15 U.S.C. 694b(c)(1) ) is amended by striking 70 and inserting 90 .

1. Short title; table of contents (a) Short title This Act may be cited as the Construction Consensus Procurement Improvement Act of 2015 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Congressional findings. Sec. 3. Design-build construction process improvement. Sec. 4. Prohibition on the use of a reverse auction for the award of a contract for design and construction services. 2. Congressional findings Congress makes the following findings: (1) The acquisition procedures that are often used effectively to procure products and other forms of services are not always appropriate for procurement of design and construction services. (2) Federal procurement officials often adopt contracting techniques from the private sector and have used those techniques effectively to procure products and services. (3) Design-build is a procurement technique Federal officials have adopted from the private sector that has worked well for procurement of design and construction services. (4) The current statutory framework for design-build could benefit from legislative refinement. (5) Reverse auctions are another procurement technique Federal officials have adopted from the private sector and used successfully to award contracts for the purchase of products that are commercially equivalent to commodities. (6) Despite their success in other contexts, reverse auctions are generally inappropriate for procurement of design and construction services, given the unique nature of each such project. 3. Design-build construction process improvement (a) Civilian contracts (1) In general Section 3309(b) of title 41, United States Code, is amended to read as follows: (b) Criteria for use (1) Contracts with a value of at least $750,000 Two-phase selection procedures shall be used for entering into a contract for the design and construction of a public building, facility, or work when a contracting officer determines that the project has a value of $750,000 or greater, as adjusted for inflation in accordance with section 1908 of this title. (2) Contracts with a value less than $750,000 For projects that a contracting officer determines have a value of less than $750,000, the contracting officer shall make a determination whether two-phase selection procedures are appropriate for use for entering into a contract for the design and construction of a public building, facility, or work when— (A) the contracting officer anticipates that 3 or more offers will be received for the contract; (B) design work must be performed before an offeror can develop a price or cost proposal for the contract; (C) the offeror will incur a substantial amount of expense in preparing the offer; and (D) the contracting officer has considered information such as— (i) the extent to which the project requirements have been adequately defined; (ii) the time constraints for delivery of the project; (iii) the capability and experience of potential contractors; (iv) the suitability of the project for use of the two-phase selection procedures; (v) the capability of the agency to manage the two-phase selection process; and (vi) other criteria established by the agency. . (2) Annual reports (A) In general Not later than November 30 of 2017, 2018, 2019, 2020, and 2021, the head of each agency shall compile an annual report of each instance in which the agency awarded a design-build contract pursuant to section 3309 of title 41, United States Code, during the fiscal year ending in such calendar year, in which— (i) more than 5 finalists were selected for phase-two requests for proposals; or (ii) the contract or order was awarded without using two-phase selection procedures. (B) Public availability The Director of the Office of Management and Budget shall facilitate public access to the reports, including by posting them on a publicly available Internet website. A notice of the availability of each report shall be published in the Federal Register. (b) GAO reports Not later than 270 days after the deadline for the final reports required under subsection (f) of section 3309 of title 41, United States Code, as added by subsection (a)(1), the Comptroller General of the United States shall issue a report analyzing the compliance of the various Federal agencies with the requirements of such section. 4. Prohibition on the use of a reverse auction for the award of a contract for design and construction services (a) Finding Congress finds that, in contrast to a traditional auction in which the buyers bid up the price, sellers bid down the price in a reverse auction. (b) Prohibition Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council, in consultation with the Administrator for Federal Procurement Policy, shall amend the Federal Acquisition Regulation to prohibit the use of reverse auctions as part of the two-phase selection procedure for awarding contracts for construction and design services. (c) Definitions For purposes of this section— (1) the term design and construction services means— (A) site planning and landscape design; (B) architectural and engineering services (including surveying and mapping defined in section 1101 of title 40, United States Code); (C) interior design; (D) performance of substantial construction work for facility, infrastructure, and environmental restoration projects; (E) delivery and supply of construction materials to construction sites; or (F) construction or substantial alteration of public buildings or public works; and (2) the term reverse auction means, with respect to procurement by an agency— (A) a real-time auction conducted through an electronic medium among 2 or more offerors who compete by submitting bids for a supply or service contract with the ability to submit revised lower bids at any time before the closing of the auction; and (B) the award of the contract, delivery order, task order, or purchase order to the offeror, in whole or in part, based on the price obtained through the auction process.

October 27, 2016 Reported with an amendment