Office of Federal Procurement Policy Act Amendments of 1988
PL 100-679 (S.2215), enacted 11/17/1988

PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4055 
Public Law 100-679 
100th Congress 
An Act 
To amend and extend the Office of Federal Procurement Policy Act, and for other 
Nov. 17, 1988 
purposes. 
[S. 2215] 
Be it enacted by the Senate and House of Representative of the 
^^^^^ ^^ Federal 
United States of 
America in Congress assembled. 
Procurement 
Policy Act 
SECTION 1. SHORT TITLE. 
Amendments of 
This Act may be cited as the "Office of Federal Procurement 
\i use 40i note. 
Policy Act Amendments of 1988". 
SEC. 2. POLICY; FINDINGS AND PURPOSE. 
(a) PoucY.—Section 2 of the Office of Federal Procurement Policy 
Act (41 U.S.C. 401) is amended by striking out "the Congress" and 
inserting "the United States Government". 
(b) FINDINGS AND PURPOSE.—Section 3 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 402) is €unended in subsection (a) 
by inserting "Government-wide" before "procurement policies". 
SEC. 3. AUTHORITY AND FUNCTIONS OF THE OFPP ADMINISTRATOR. 
(a) IN GENERAL.—Section 6 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 405) is amended— 
(1) in subsection (a), by striking out "which shall be imple-
mented in the single system of Government-wide procurement 
regulations and shall be" and inserting a period and the follow-
ing: "These policies shall be implemented in a single 
Government-wide procurement regulation called the Federal 
Acquisition R^^ation and shall be"; 
(2) in subsection (b)— 
(A) by inserting after "timely manner" the following: ", 
including any such r^ulations, procedures, and forms as 
are necessary to implement prescribed policy initiated by 
the Administrator under subsection (a),"; and 
(B) by striking out "may" and inserting "shall"; 
(3) in subsection (d) by strilang out paragraphs (4) and (5) and 
inserting the following: 
"(4XA) providing for and directing the activities of the com-
puter-based Federal Procurement Data System (including 
recommending to the Administrator of General Services a 
sufficient bu^et for such activities), which shall be located 
in the Greneral Services Administration, in order to adequately 
collect, develop, and disseminate procurement data; and 
"(B) ensuring executive agency compliance with the record 
requirements of section 19; 
"(5) providing for and directing the activities of the Federal 
Acquisition Institute (including recommending to the Adminis-
trator of General Services a sufficient budget for such 
activities), which shall be located in the General Services 
Administration, in order to— 
102 STAT. 4056 
PUBLIC LAW 100-679—NOV. 17,1988 
"(A) foster 
and 
promote Government-wide 
career 
management programs for a professional procurement 
work force; and 
Research and 
''(B) promote and coordinate Government-wide research 
development. 
and studies to improve the procurement process and the 
laws, policies, mediods, r^ulations, procedures, and forms 
relating to procurement by the executive agencies;"; and 
(4) in subsection (f) by striking out "The Director of the Office 
of Management and Budget" ami inserting "The Administrator, 
with the concurrence of the Director of the Office of Manage-
ment and Budget, and with ccmsultation with the head of tiie 
agency or agencies concerned,", 
(b) REAUTHORIZATION.—Section 11 of such Act (41 U.S.C. 410) is 
amended by striking out "for each of the three succeeding fiscal 
years" and inserting "such sums as may be necessary for each 
succeeding fiscal jrear". 
41 use 403. 
(c) CONFORMING AMENDMENT.—Section 4 of such Act is amended 
fay striking out paragraph (4) and redesignating paragraphs (5) 
through (11) as paragraphs (4) through (10), respectively. 
SEC 4. FEDERAL ACQUISITION REGULATORY COUNCIL. 
The Qfifioe of Federal Procurement Policy Act is further amended 
by adding at the end the following: 
"FEDERAL AOQUBSrnON RBGULATORT CX)UNCIL 
41 use 421. 
"SB& 25. (a) ESTABLISHMENT.—There is established a Federal Ac-
quisition R^ulatory Council (hereinafter in this section referred to 
as the 'Council') to assist in the direction and coordination of 
Government-wide 
procurement 
policy 
and 
(jovemment-wide 
procurement r^ulatory activities in the Federal Ciovemment. 
"(b) MEMBERSHIP.—<1) The C!ouncil shall consist of the Adminis-
trator for Federal Procurement PoUcy and— 
"(A) the Secretaiy of Defense, 
"(B) the Administrator of National Aeronautics and Space; 
and 
"(Q the Administrator of (Seneral Services. 
"(2) Notwithstanding section 205(d) of the Federal Property and 
Administrative Services Act of 1949, the officials specified in sub-
paragraphs (A), (B), and (O of paragraph (1) may designate to serve 
on and attend meetings of the Council in place of that official (A) the 
official assigned by statute with the responsibility for acquisition 
policy in each of their respective agencies; or (B) if no official of such 
agenqr is assigned by stotute with the responsibility for acquisition 
policy for that agency, the official designated pursuant to section 
16(3) of this Act No other official or employee may be designated to 
serve on the Council. 
Regulations. 
"(c) FuNcnoNS.—<1) Subject to the provisions of section 6 of this 
Act, the General Services Administration, the Department of De-
fense, and the National Aeronautics and Space Administration, 
pursuant to their respective authorities under title in of the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 251, et 
seq.), chapters 4 and 137 of title 10, United Stotes Code, and the 
National Aeronautics and Space Act of 1958 (42 U.S.C. 2451, et seq.), 
shall jointly issue and maintoin in accordance with subsection (f) of 
this section a single Government-wide procurement r^ulation, to be 
known as the Tederal Acquisition R^ulation'. 
PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4057 
"(2) Any other regulations relating to procurement issued by an 
executive agency shall be limited to (A) regulations essential to 
implement Government-wide policies and procedures within the 
agency, and (B) additional policies and procedures required to satisfy 
the specific and unique needs of the agency. 
"(3) The Administrator, in consultation with the Council, shall 
ensure that procurement regulations promulgated by executive 
agencies are consistent with the Federal Acquisition Regulation and 
in accordance with the policies set forth in section 2 of this Act or 
any policies issued pursuant to section 6(a) of this Act. 
"(4XA) Under procedures established by the Administrator, a 
person may request the Administrator to review any regulation 
relating to procurement on the basis that such regulation is 
inconsistent with the Federal Acquisition Regulation. 
"(B) Unless the request is frivolous or does not, on its face, state a 
valid basis for such review, the Administrator shall complete such a 
review not later than 60 days after receiving the request. The time 
for completion of the review may be extended if the Administrator 
determines that an additional period of review is required. The 
Administrator shall advise the requester of the reasons for the 
extension and the date by which the review will be completed. 
"(5) If the Administrator determines that a regulation relating to 
procurement is inconsistent with the Federal Acquisition Regula-
tion or that the regulation should otherwise be revised to remove an 
inconsistency with any policies issued under section 6(a) of this Act 
or the policies set forth in section 2 of this Act, the Administrator 
shall rescind or deny the promulgation of the regulation or take 
such other action authorized under section 6 as may be necessary to 
remove the inconsistency. If the Administrator determines that such 
a r^ulation, although not inconsistent with the Federal Acquisition 
Regulation or such policies, should be revised to improve compliance 
with such Regulation or policies, the Administrator shall take such 
action authorized under section 6 as may be necessary and 
appropriate. 
"(6) The decisions of the Administrator shall be in writing and 
Public 
made publicly available. The Administrator shall provide a listing of 
information. 
such decisions in the annual report to Congress required by section 8 
of this Act. 
"(d) ADDITIONAL RESPONSIBILITIES OF MEMBERSHIP.—Subject to the 
authority, direction, and control of the head of the agency con-
cerned, each official who represents an agency on the CJouncil 
pursuant to subsection (b) shall— 
"(1) approve or disapprove all regulations that are, after 60 
days after the date of enactment of this section, proposed for 
public comment, promulgated in final form, or otherwise made 
effective by such agency relating to procurement before such 
r^ulation may be promulgated in final form, or otherwise 
made effective, except that such ofHcial may grant an interim 
approval, without review, for not more than 60 days for a 
procurement 
r ^ ^ a t i o n 
in 
urgent 
and 
compelling 
cir-
cumstances; 
"(2) carry out the responsibilities of such agency set forth in 
chapter 35 of title 44, United States Code, for each information 
collection request (as that term is defined in section 3502(11) of 
title 44, United States Code) that relates to procurement rules 
or r^ulations; and 
102 STAT. 4058 
PUBLIC LAW 100-679—NOV. 17, 1988 
"(3) eliminate or reduce (A) any redundant or unnecessary 
levels of review and approval, in the procurement system of 
such agency, and (B) redundant or unnecessary procurement 
regulations which are unique to that agency. 
The authority to review and approve or disapprove regulations 
under paragraph (1) of this subsection may not be delegate to any 
person outside the office of the official who represents the agency on 
the Council pursuant to subsection (b). 
"(e) GOVERNING POUCIES.—All actions of the Council and of mem-
bers of the Council shall be in accordance with and furtherance of 
the policies of section 2 and the policies prescribed under section 6(a) 
of this Act. 
"(f) GENERAL AUTHORITY WITH RESPECT TO FAR.—Subject to sec-
tion 6(b), the Council shall manage, coordinate, control, and monitor 
the maintenance of, and issuance of and changes in, the Federal 
Acquisition Regulation. 
"(g) REPORTS.—The Administrator for Federal Procurement Policy 
shall— 
"(1) publish a report within 6 months after the date of enact-
ment of this section and every 6 months thereafter relating to 
the development of procurement regulations to be issued in 
accordance with subsection (c) of this section; 
"(2) include in each report published under paragraph (1)— 
"(A) the status of each such regulation; 
"(B) a description of those regulations which are required 
by statute; 
"(C) a description of the methods by which public com-
ment was sought with regard to each proposed regulation in 
accordance with section 22 of this Act, and to the extent 
appropriate, sections 3504(h) and 3507 of title 44, United 
States Code; 
"(D) regulatory activities completed and initiated since 
the last report; 
"(E) regulations, policies, procedures, practices, and forms 
that are under consideration or review by the OflQce of 
Federal Procurement Policy; 
"(F) whether the regulations have paperwork require-
ments; 
"(G) the progress made in promulgating and implement-
ing the Federal Acquisition Regulation; and 
(H) such other matters as the Administrator determines 
would be useful; and 
"(3) report to Congress within 180 days after the date of the 
enactment of this section, in consultation with the Adminis-
trator of the Office of Information and Regulatory Affairs, 
regarding— 
"(A) the extent of the paperwork burden created by the 
Federal procurement process, and 
"(B) the extent to which the Federal procurement system 
can be streamlined to reduce unnecessary paperwork while 
at the same time maintaining recordkeeping and reporting 
requirements necessary to ensure the. int^rity and 
accountability of the system.". 
SEC. 5. COST ACCOUNTING STANDARDS BOARD. 
(a) AMENDMENT.—^The Office of Federal Procurement Policy Act is 
further amended by adding at the end thereof the following: 
PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4059 
"COST ACCSOUNTING STANDARDS BOARD 
"SBC. 26. (a) ESTABLISHMENT; MEBCBERSHIP; TERMS.—(1) There is 
41 use 422. 
established within the OfHoe of Federal Procurement Policy an 
independent board to be known as the 'Cost Accounting Standards 
Board' (hereinafter referred to as the 'Board'). The Board shall 
consist of 5 members, including the Administrator, who shall serve 
as Chairman, and 4 members, all of whom shall have experience in 
Government contract cost accounting, and who shall be appointed as 
follows: 
"(A) two representatives of the Federal Government— 
"(i) one of whom shall be a representative of the Depart-
ment of Defense and be appointed by the Secretaiy of 
Defense; and 
"(ii) one of whom shall be an ofHcer or employee of the 
General Services Administration appointed by the Adminis-
trator of General Services; and 
"(B) two individuals from the private sector, each of whom 
shall be appointed by the Administrator and— 
"(i) one of whom shall be a representative of industry; 
and 
''(ii) one of whom shall be particularly knowledgeable 
about cost accounting problems and systems. 
"(2XA) The term of office of each of the members of the Board, 
other than the Administrator for Federal Procurement Policy, shall 
be 4 years, except that— 
"(i) of the initial members, two shall be appointed for terms of 
two jrears, one shall be appointed for a term of three years, and 
one shall be appointed for a term of four years; 
"(ii) any member appointed to fill a vacancy in the Board 
shall serve for the remainder of the term for which his prede-
cessor was appointed; and 
"(iii) no individual who is appointed under paragraph (IXA) of 
this subsection shall continue to serve after ceasing to be an 
officer or employee of the agency from which he or she was 
appointed. 
"^) A vacancy on the Board shall be filled in the same manner in 
which the original appointment was made. 
"(Q The initial members of the Board shall be appointed within 
120 days after the date of enactment of this section. 
"(b) SENIOR STAFF.—^The Administrator, after consultation with 
the Board, may appoint an executive secretary and two additional 
staff mend)ers without r^;ard to the provisions of title 5, United 
States Code, governing appointments in the competitive service, and 
may pay such employees without r^ard to the provisions of chapter 
51 and subchapter IQ of chapter 53 of such title relating to classi-
fication and General Schedule pay rates, except that no individual 
so appointed may receive pay in excess of the annual rate of basic 
pay payable for ( ^ 1 8 of the General Schedule. 
"(c) OTHER STAFF.—^The Administrator may appoint, fix the com-
pensation, and remove additional employees of the Board under the 
applicable provisions of title 5, United States Code. 
"(d) DETAHJED AND TEMPORARY PERSONNEL.—(1) The Board may 
use, without reimbursement, any personnel of a Federal agency 
(with the consent of the head of the agency concerned) to serve on 
advisory committees and task forces to assist the Board in carrying 
102 STAT. 4060 
PUBLIC LAW 100-679—NOV. 17, 1988 
out the functions and responsibilities of the Board under this 
section. 
"(2) The Administrator, after consultation with the Board, may 
procure temporary and intermittent services under section 3109(b) 
of title 5, United States C!ode, of personnel for the purpose of serving 
on advisory committees and t£isk forces to assist the Board in 
carrying out the functions and responsibilities of the Board under 
this section. 
"(e) COMPENSATION.—Except as otherwise provided in subsection 
(a), the members of the Board who are officers or employees of the 
Federal Government, and officers and employees of other agencies 
of the Federal Grovernment who are used under subsection (dXD, 
shall receive no additional compensation for services, but shall 
continue to be compensated by the emplo3n[ng Department or agency 
of such officer or employee. Each member of the Board appointed 
from private life shall receive compensation at a rate not to exceed 
the daily equivalent of the rate prescribed for level IV of the 
Executive Schedule for each day (including travel time) in which the 
member is engaged in the actual performance of duties vested in the 
Board. Individuals hired under subsection (dX2) may receive com-
pensation at rates fixed by the Administrator, but not to exceed the 
daily equivalent of the rate prescribed for level V of the Federal 
Executive Salary Schedule under section 5316 of title 5, United 
States Code, for each day (including travel time) in which such 
appointees are properly engaged in the actual performance of duties 
under this section. While serving away from homes or the regular 
place of business, Board members and other appointees serving on 
an intermittent basis under this section shall be allowed travel 
expenses in accordance with section 5703 of title 5, United Stetes 
Code. 
"(f) COST ACCOUNTING STANDARDS AUTHORITY.—(1) The Board 
shall have the exclusive authority to make, promulgate, amend, and 
rescind cost accounting standards and interpretetions thereof de-
signed to achieve uniformity and consistency in the cost accounting 
standards governing measurement, assignment, and allocation of 
costs to contracts with the United States. 
"(2) Cost accounting standards promulgated under this section 
shall be mandatory for use by all executive agencies and by contrac-
tors and subcontractors in estimating, accumulating, and reporting 
costs in connection with pricing and administration of, and settle-
ment of disputes concerning, all negotiated prime contract and 
subcontract procurements with the United States in excess of 
$500,000, other than contracts or subcontracts where the price 
negotiated is based on (A) esteblished catalog or market prices of 
commercial items sold in substantial quantities to the general 
public, or (B) prices set by law or regulation. 
"(3) Not later than 180 days after the date of enactment of this 
section, the Administrator, after consultation with the Board, shall 
prescribe rules and procedures governing actions of the Board under 
this section. Such rules and procedures shall require that any cost 
accounting standard promulgated, amended, or rescinded (and 
interpretations thereoO shall be adopted by majority vote of the 
Board members. 
"(4) The Board is authorized— 
"(A) to exempt classes or categories of contractors and sub-
contractors from the requirements of this section; and 
PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4061 
"(B) to establish procedures for the waiver of the require-
ments of this section with respect to individual contracts and 
subcontracts. 
"(g) REQUIREMENTS FOR STANDARDS.—(1) Prior to the promulgation 
under this section of cost accounting standards and interpretations 
thereof, the Board shall— 
"(A) take into account, after consultation and discussions with 
the Comptroller General and professional accounting organiza-
tions, contractors, and other interested parties— 
"(i) the probable costs of implementation, including infla-
tionary effects, if any, compared to the probable benefits; 
"(ii) the advantages, disadvantages, and improvements 
anticipated in the pricing and administration of, and settle-
ment of disputes concerning, contracts; and 
"(iii) the scope of, and alternatives available to, the action 
proposed to be taken; 
"(B) prepare and publish a report in the Federal Register on 
the issues reviewed under paragraph (IXA); 
"(CXi) publish an advanced notice of proposed rulemaking in 
the Federal Register in order to solicit comments on the report 
prepared pursuant to subparagraph (B); 
"(ii) provide all parties affected a period of not less than 60 
days after such publication to submit their views and com-
ments; and 
"(iii) during this 60-day period, consult with the Comptroller 
General and consider any recommendation the Comptroller 
General may make; and 
"(D) publish a notice of such proposed rulemaking in the 
Federal Register and provide all parties affected a period of not 
less than 60 days after such publication to submit their views 
and comments. 
"(2) Rules, regulations, cost accounting standards, and modifica-
tions thereof promulgated or amended under this section shall have 
the full force and effect of law, and shall become effective within 120 
days after publication in the Federal Register in final form, unless 
the Board determines a longer period is necessary. Implementation 
dates for contractors and subcontractors shall be determined by the 
Board, but in no event shall such dates be later than the beginning 
of the second fiscal year of the contractor or subcontractor after the 
standard becomes effective. Rules, regulations, cost accounting 
standards, and modifications thereof promulgated or amended 
under this section shall be accompanied by prefatory comments and 
by illustrations, if necessary. 
"(3) The functions exercised under this section are excluded from 
the operation of sections 551, 553 through 559, and 701 through 706 
of title 5, United States (Dode. 
"(h) IMPLEMENTING REGULATIONS.—(1) The Board shall promul-
gate rules and regulations for the implementation of cost accounting 
standards promulgated or interpreted under subsection (f). Such 
regulations shall be incorporated into the Federal Acquisition Regu-
lation and shall require contractors and subcontractors as a condi-
tion of contracting with the United States to— 
"(A) disclose in writing their cost accounting practices, includ-
ing methods of distinguishing direct costs from indirect costs 
and the basis used for allocating indirect costs; and 
"(B) agree to a contract price adjustment, with interest, for 
any increased costs paid to such contractor or subcontractor by 
Reports. 
Federal 
Register, 
publication. 
Federal 
Register, 
publication. 
Federal 
Register, 
publication. 
Effective date. 
102 STAT. 4062 
PUBLIC LAW 100-679—NOV. 17, 1988 
the United States by reason of a change in the contractor's or 
subcontractor's cost accounting practices or by reason of a 
failure by the contractor or subcontractor to comply with ap-
plicable cost accounting standards. 
"(2) If the United States and a contractor or subcontractor fail to 
agree on a contract price adjustment, including whetiier the con-
tractor or subcontractor has complied with the applicable cost 
accounting standards, the disagreement will constitute a dispute 
under the Contract Dilutes Act (41 U.S.C. 601). 
"(3) Any contract price adjustment undertaken pursuant to para-
graph (1)^) shall be made, where applicable, on relevant contracts 
between the United States and the contractor that are subject to the 
cost accounting standards so as to protect the United States from 
payment, in t£e aggr^ate, of increased costs (as defined by the 
Board). In no case shall the Government recover costs greater than 
the increased cost (as defined by the Board) to the Government, in 
the aggr^ate, on the relevant contracts subject to the price adjust-
ment, unless the contractor made a change in its cost accounting 
practices of which it was aware or should have been aware at the 
time of the price negotiation and which it failed to disclose to the 
Government. 
"(4) The interest rate applicable to any contract price adjustment 
shall be the annual rate of interest established under section 6621 of 
the Internal Revenue Code of 1986 (26 U.S.C. 6621) for such period. 
Such interest shall accrue from the time payments of the increased 
costs were made to the contractor or subcontractor to the time the 
United States receives full compensation for the price adjustment. 
"(i) REPOBTS TO CONGRESS.—^The Board shall report to the Con-
gress not later than one year after the date of enactment of this 
section, and annually thereedfter, with respect to the activities and 
operations of the Board under this section, together with such 
recommendations as it considers appropriate. 
(j) EFVBCT ON OTHER STANDARDS AND REGULATIONS.—<1) All cost 
accounting standards, waivers, exemptions, interpretations, modi-
fications, rules, and r^ulations promulgated by the Cost Accounting 
Standards Board under section 719 of the Defense Production Act of 
1950 (50 UJS.C. App. 2168) shall remain in effect unless and until 
amended, superseded, or rescinded by the Board pursuant to this 
section. 
"(2) Existing cost accounting standards referred to in paragraph 
(1) shall be subject to the provisions of this Act in the same manner 
as if promulgated by the Board under this Act. 
"(3) The Administrator, under the authority set forth in section 6 
of this Act, shall ensure that no r^ulation or proposed regulation of 
an executive agency is inconsistent with a cost accounting standard 
promulgated or amended under this section by rescinding or deny-
ing the promulgation of any such inconsistent regulation or pro-
posed regulation and taking such other action authorized under 
section 6 as may be appropriate. 
"(4) Costs which are the subject of cost accounting standards 
promulgated under this section shall not be subject to regulations 
that are established by another executive agency that differ from 
such standards with respect to the measurement assignment, and 
allocation of such costs. 
"(k) EhLAMiNATiONS.—For the purpose of determining whether a 
contractor or subcontractor has complied with cost accounting 
stondaids promulgated under this section and has followed consist-
PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4063 
ently the contractor's or subcontractor's disclosed cost accounting 
practioes, any authorized representative of the head Of the agency 
ooncemed, df the offices of inspector general established pursuant to 
the Inspectar General Act of 1978, or of the CSomptroller General of 
the United States shall have the right to examine and make copies 
of any documents, papers, or records of such contractor or sub-
contractor relating to compliance with such cost accounting 
standards. 
"(1) AUTHORIZATION OF APPROFBIATIONS.—There are authorized to 
be appropriated such sums as may be necessary to carry out the 
provisions of this section.". 
(b) CONFORMING AMENDMENT.—Section 719 of the Defense Produc-
tion Act of 1950 (50 U.S.C. App. 2168) is repealed. 
SBC C
L PROCDKEMENT INTEGRITY. 
(a) AMENDMENT.—The Office of Federal Procurement Policy Act is 
further amended by adding at the end the following: 
"PROCUREMENT INTEGRITT 
"SEC. 27. (a) PROHIBITBD CONDUCT BY COMPETING CONTRACTORS.— 
4i use 423. 
During the conduct of any Federal agen<7 procurement of property 
or services, no competing contractor or any officer, employee, rep-
resentative, agent, or consultant of any competing contractor shall 
knowingly— 
"(1) make, directly or indirectly, any ofTer or promise of 
future employment or business opportunity to, or engage, di-
rectly or indirectly, in any discussion of future employment or 
business opportunity with, any procurement official of such 
agency; 
"(2) offer, give, or promise to offer or give, directly or in-
directly, any money, gratuity, or other tlmig of value to any 
procurement official of such agency; or 
"(3) solicit or obtain, directly or indirectly, from any officer or 
employee of such agency, prior to the award of a contract any 
proprietary or source selection information regarding such 
procurement. 
"(b) PRomBFTED CONDUCT BY PROCUREMENT OFFICIALS.—^During 
the conduct of any Federal agency procurement of property or 
services, no procurement officisd of such agency shall knowingly— 
"(1) solicit or accept, directly or indirectly, any promise of 
future employment or business opportunity from, or engage, 
directly or indirectly, in any discussion of future employment or 
business opportunity with, any officer, employee, representa-
tive, agent, or consultant of a competing contractor; 
"(2) ask for, demand, exact, solicit, seek, accept, receive, or 
agree to receive, directly or indirectly, any money, gratuity, or 
otiier thing of value from any officer, employee, representative, 
agent, or consultant of any competing contractor for such 
procurement; or 
"(3) disclose any proprietary or source selection information 
r^arding such procurement Erectly or indirectly to any person 
ot£er than a person authorized by the head of such agency or 
the contracting officer to receive such information. 
"(c) DISCLOSURE TO UNAUTHORIZED PERSONS.—During the conduct 
of any Federal agency procurement of property or services, no 
person who is given authorized or unauthorized access to propri-
102 STAT. 4064 
PUBLIC LAW 100-679—NOV. 17, 1988 
etary or source selection information regarding such procurement, 
shall knowingly disclose such information, directly or indirectly, to 
any person other than a person authorized by the head of such 
agency or the contracting officer to receive such information. 
"(d) CERTIFICATION AND ENFORCEMENT MATTERS.—(1) A Federal 
agency may not award a contract for the procurement of property or 
services to any competing contractor, or agree to any modification or 
extension of a contract, unless the officer or employee of such 
contractor responsible for the offer or bid for such contract, or the 
modification or extension of such contract, as the case may be— 
"(AXi) certifies in writing to the contracting officer respon-
sible for such contract that such officer or employee of the 
competing contractor has no information concerning a violation 
or possible violation of subsection (a), (b), (c), or (e), or applicable 
implementing regulations, pertaining to such procurement; or 
"(ii) discloses to such contracting officer any and all such 
information and certifies in writing to such contracting officer 
that any and all such information has been disclcx^; and 
"(B) certifies in writing to such contracting officer that each 
officer, employee, agent, representative, and consultant of such 
competing contractor who has participated personally and 
substantially in the preparation or submission of such bid or 
offer, or in such modification or extension of such contract, as 
the case may be, has certified to such competing contractor that 
he or she— 
"(i) is familiar with, and will comply with, the require-
ments of subsection (a) and applicable implementing regula-
tions; and 
"(ii) will report immediately to the officer or employee of 
the competing contractor responsible for the offer or bid for 
any contract or the modification or extension of such con-
tract, as the case may be, any information concerning a 
violation or possible violation of subsection (a), (b), (c), or (e), 
or such applicable implementing regulations, pertaining to 
such procurement. 
"(2) A Federal agency may not award a contract for the procure-
ment of property or services, or agree to any modification or exten-
sion of any such contract, unless the contracting officer responsible 
for such procurement— 
"(A) certifies in writing to the head of such agency that the 
contracting officer has no information concerning a violation or 
possible violation of subsection (a), (b), (c), or (e), or applicable 
implementing regulations, pertaining to such procurement; or 
"(B) discloses to the head of such agency any and all such 
information and certifies in writing that any and all such 
information has been disclosed. 
"(3) The head of a Federal agency may require any procurement 
official or any competing contractor, at any time during the conduct 
of any Federal agency procurement of property or services— 
"(A) to certify in writing to the head of such agency that such 
procurement official or the officer or employee of the competing 
contractor responsible for the offer or bid for such contract or 
the modification or extension of such contract, as the case may 
be, has no information concerning a violation or possible viola-
tion of subsection (a), (b), (c), or (e), or applicable implementing 
r^ulations, pertaining to such procurement; or 
PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4065 
''(B) to disclose to the head of such agency any and all such 
information and to certify in writing that any and all such 
information has been disclosed. 
"(4) D
P a procurement official leaves the Government durii^ the 
conduct of such a procurement, such official shall certify that he or 
she understands tihe continuing obligation not to disclose propri-
etary or source selection information. 
"(5) For the purposes of enforcing the requirements of this section, 
the contracting officer responsible for the conduct of a procurement 
shall maintain, as part of die procurement file— 
"(A) all certifications made by procurement officials and 
competing contractors with regard to such procurement, as 
required by this subsection; and 
(B) a record of all persons who have been authorized by the 
head of the agency or the contracting officer to have access to 
proprietary or source selection information regarding such 
procurement. 
"(6) Any person making a certification required by this subsection 
shall be notified of the applicability of section 1001 of title 18, 
United States Code, to false, fictitious, or fraudulent statements in 
such certification. 
"(7XA) This subsection applies only to contracts, extensions, and 
modifications in excess of $100,000. 
"(B) This subsection need not be applied to a contract— 
*'(i) with a foreign government or an international organiza-
tion that is not required to be awarded using competitive proce-
dures pursuant to section 303(cX4) of the F^eral Property and 
Administrative Services Act of 1949 or section 2304(cX4) of title 
10, United States Code; or 
"(ii) in an exceptional case, when the head of the Federal 
agency concerned determines in writing that this subsection 
should be waived pursuant to procedures and criteria 
established in implementing r^ulations issued pursuant to 
subsection (m) and notifies the 0>ngress in writing of such 
determination. 
Hie authority to make determinations under clause (ii) of this 
subparagraph may not be delegated. 
"(e) REsnucnoNS ON GOVERNMENT OFFICIALS AND EMPLOYEES.— 
No Government official or employee, civilian, or military, who has 
participated personally and substantially in the conduct of any 
Federal agency procurement or who has personally reviewed and 
approved the aifi^utl, modification, or extension of any contract for 
such procurement shall— 
"(1) participate in any manner, as an officer, employee, agent, 
or representative of a competing contractor, in any n^otiations 
leading to tiie award, modification, or extension of a contract for 
such procurement, or 
"(2) participate personally and substantially on behalf of the 
competing contractor in the performance of such contract, 
during the period ending 2 years after the last date such individual 
participated personally and substantially in the conduct of such 
procurement or personally reviewed and approved the award, modi-
fication, or extension of any contract for such procurement 
"(f) CONTRACTUAL PENALTIES.—(1) R^ulations issued pursuant to 
subsection (m) shall require that each contract awarded by a Federal 
agency contain a clause specified in such r^ulation that provides 
s^ypropriate contractual penalties for conduct of any competing 
Records. 
Fraud. 
102 STAT. 4066 
PUBLIC LAW 100-679—NOV. 17, 1988 
contractor prohibited by subsection (a) and for any such conduct of 
any officer, employee, agent, representative, or consultant of such 
contractor. 
"(2) Tlie following remedies are authorized to be included in, and 
shall be considered in the development of, such regulations: 
"(A) Denial of pajrment of all or any portion of the profit 
component of amounts otherwise payable to the contractor by 
the Federal agency imder the contract and recovery of all or 
any portion of the profit component of amounts paid to the 
contractor by the Federal agency under the contract. 
"(B) Termination of the contract for default. 
"(C) Any other appropriate penalty. 
"(g) ADMINISTRATIVE ACTIONS.—(1) If an agency receives a disclo-
sure of information pursuant to subsection (d) or otherwise receives 
or obtains information providing a reasonable basis to believe that 
an officer, employee, agent, representative, or consultant, of a 
competing contractor has knowingly violated the requirements of 
this section— 
"(A) in the case of a procurement in which a contract has not 
been awarded, the agency shall determine whether to terminate 
the procurement or take other appropriate actions; 
"(B) in the case of a procurement with respect to which a 
contract has been awarded, the agency shall determine whether 
to void or rescind the contract, to terminate the contract for 
default, to impose sanctions upon the contractor, or to permit 
the contractor to continue to perform the contract, subject to 
review in accordance with, and to the extent provided in, the 
Contract Disputes Act of 1978, or to take other appropriate 
actions; and 
"(O if the agency determines that such a knowing violation 
has occurred, the agency, pursuant to procedures specified in 
the Federal Acquisition Regulation— 
"(i) may impose an immediate suspension, and 
"(ii) shall determine whether to initiate a debarment 
proceeding, 
against the competing contractor or other person who commit-
ted such violation. 
"(2) Any procurement official of a Federal agency who engages in 
conduct prohibited by subsection (b) or (c) shall be subject to removal 
or other appropriate adverse personnel action pursuant to the proce-
dures specified in chapter 75 of title 5, United States Code, or other 
applicable law or regulation. 
"(3) The actions taken under paragraph (1) or (2) may be sus-
pended by the agency head upon the request of the Attorney Gen-
eral p e n ^ g the disposition of any civil or criminal actions pursuant 
to subsections (h) and (i). 
"(h) CIVIL PENALTIES.—Any person who engages in conduct 
prohibited by subsection (a), (b), (c), or (e) shall be subject to the 
imposition of a civil fine in a civil action brought by the United 
States in an appropriate district court of the United States. The 
amount of any such civil fine for such violation may not exceed— 
"(1) $100,000 in the case of an individual; or 
"(2) $1,000,000 in the case of a competing contractor (other 
than an individual), 
"(i) CRIMINAL PENALTIES.—Whoever, during the conduct of a Fed-
eral agency procurement of property or services— 
PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4067 
"(1) being a competing contractor or an officer, employee, 
representative, agent, or consultant of a competing contractor, 
knowingly and willfully solicits or obtsiins, directly or indirectly, 
from any officer or employee of such agency any proprietary or 
source selection information (as such terms are defined in 
subsection (n) and in regulations prescribed pursuant to subsec-
tion (m)), or 
"(2) being an officer or employee of such agency, knowingly 
and willfully discloses or promises to disclose, directly or in-
directly, to any competing contractor or any officer, employee, 
representative, agent, or consultant of a competing contractor 
any proprietary or source selection information, 
shall be imprisoned for not more than 5 years, or fined in accord-
ance with title 18, United States Code, or both. 
"(j) TRAINING.—The head of each Federal agency shall establish a 
procurement ethics program for its procurement officials. The 
program shall, at a minimum— 
"(1) provide for the distribution of written explanations of the 
provisions of subsection (b) to such procurement officials; and 
"(2) require each such procurement official, as a condition of 
serving as a procurement official, to certify that he or she is 
familiar with the provisions of subsection (b), and will not 
engage in any conduct prohibited by such subsection, and will 
report immediately to the contracting officer any information 
concerning a violation or possible violation of subsection (a), (b), 
(c), or (e), or applicable implementing regulations, 
"(k) REMEDIES NOT EXCLUSIVE.—Nothing in this subsection shall 
be construed to limit the applicability of the requirements, sanc-
tions, contract penalties, and remedies established under any other 
law, but no Eigency shall be relieved of the obligation to carry out the 
requirements of this section because such agency has also applied 
such other requirements, sanctions, contract penalties, or remedies. 
"(1) No AUTHORITY TO WITHHOLD INFORMATION.—Nothing in this 
section shall be construed to authorize the withholding of any 
information from the Congress, any committee or subcommittee 
thereof, a Federal agency, any board of contract appeals of a Federal 
agency, the Comptroller General, or an Inspector General of a 
Federal agency. 
"(m) IMPLEMENTING REGULATIONS AND GuiDEUNES.—Government-
wide regulations and guidelines deemed appropriate to carry out 
this section shall be issued in the Federal Acquisition Regulation 
within 180 days after the date of enactment of this section, 
"(n) DEFINITIONS.—As used in this section: 
"(1) The term 'during the conduct of any Federal agency 
procurement of property or services' means the period begin-
ning with the development, preparation, and issuance of a 
procurement solicitation, and concluding with the award, modi-
fication, or extension of a contract, and includes the evaluation 
of bids or proposals, selection of sources, and conduct of 
negotiations. 
"(2) The term 'competing contractor', with respect to any 
procurement (including any procurement using procedures 
other than competitive procedures) of property or services, 
means any entity that is, or is reasonably likely to become, a 
competitor for or recipient of a contract or subcontract under 
such procurement, and includes any other person acting on 
behalf of such an entity. 
102 STAT. 4068 
PUBLIC LAW 100-679—NOV. 17, 1988 
"(3XA) The term 'procurement official' means any civilian or 
militaiy official or employee of an agency who has participated 
personally and substantially in the conduct of the agency 
procurement concerned, including all officials and employees 
who are responsible for reviewing or approving the pro-
curement, as further defined by applicable implementing 
r^ulations. 
"(B) For purposes of subparagraph (A), the term 'employee of 
an agency* includes a contractor, subcontractor, consultant, 
expert, or adviser (other than a competing contractor) acting on 
behalf of, or providing advice to, the agency with respect to any 
phase of the agency procurement concerned. 
"(4) The term 'contracting officer* means any official or em-
ployee of a Federal agency who has been authorized by the 
agenpy head or his or her designee to enter into, administer, or 
terminate contracts and m £ ^ related determinations and 
findings. 
"(5) The term ^Federal agency' has the meaning provided by 
section 3(b) of the Federal ^t)perty and Administrative Services 
Act of 1949 (40 U.S.C. 472(b)). 
"(6) The term 'proprietary information' means— 
"(A) information contained in a bid or proposal; 
"(B) cost or pricing data; or 
"(Q any other information submitted to the Grovemment 
by a contractor and designated as proprietary, in accord-
ance with law or r^ulation, by the contractor, the head of 
the agency, or the contracting officer. 
"(7) The term 'source selection information' means informa-
tion determined by the head of the agency or the contracting 
officer to be information— 
"(A) the disclosure of which to a competing contractor 
would jeopardize the int^^ty or successfid completion of 
the procurement concerned; and 
*'W>) which is required by statute, regulation, or order to 
be secured in a source selection file or other restricted 
facility to prevent such disclosure; 
as further defined by regulations issued pursuant to subsection 
(m) of this section.". 
41 use 423 note. 
(b) EFTBCTIVB DATB.—^The amendment made by subsection (a) 
shall take effect 180 days after the date of enactment of this Act. 
41 use 405 note. 
SEC 7. PROFIT METHODOLOGY STUDY. 
(a) IN GENERAL.—^The Administrator shall conduct a study to 
develop a consistent methodology which executive agencies should 
use for measuring the profits earned by government contractors on 
procurements, other than procurements where the price is based on 
adequate price competition or on established catalog or market 
prices of conunercial items sold in substantial quantities to the 
general public 
(b) CoiiiTRACTORs' FINANCIAL DATA.—^The methodology developed 
under subsection (a) shall include adequate procedures for verifying 
and maintaining the confidentiality of contractors' financial data. 
SEC 8. DEFINITION OF A
R
C
H
T
T
E
C
T
U
R
A
L AND ENGINEERING SERVICES. 
Section 901 of the Federal Property and Administrative Services 
Act of 1949 (40 UJS.C. 541) is amended by striking out paragraph (3) 
and inserting the following: 
PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4069 
"(3) The term 'architectural and engineering services* means— 
"(A) professional services of an architectural or engineering 
nature, as defined by State law, if applicable, which are re-
quired to be performed or approved by a person licensed, reg-
istered, or certified to provide such services as described in this 
paragraph; 
"(B) professional services of an architectural or engineering 
nature performed by contract that are associated with research, 
planning, development, design, construction, alteration, or 
repair of real property; and 
"(C) such other professional services of an architectural or 
engineering nature, or incidental services, which members of 
the architectural and engineering professions (and individuals 
in their employ) may logically or justifiably perform, including 
studies, investigations, surve3dng and mapping, tests, evalua-
tions, consultations, comprehensive planning, program manage-
ment, conceptual designs, plans and specifications, value 
engineering, construction phase services, soils engineering, 
drawing reviews, preparation of operating and maintenance 
manuals, and other related services.". 
SEC. 9. ESTABLISHMENT OF THE COMMERCIAL PRODUCTS ADVOCATE. 
The Office of Federal Procurement Policy Act is further amended 
by adding at the end thereof the following: 
"ADVOCATE FOR THE ACQUISITION OF COMMERCIAL PRODUCTS 
"SEC. 28. There is established in the Office of Federal Procure- 4i use 424. 
ment Policy the position of Advocate for the Acquisition of 
Commercial Products. The Advocate shall report directly to the 
Administrator. The Advocate for Acquisition of Commercial Prod-
ucts shall— 
"(1) review all proposed procurement regulations and report Reports. 
to the Administrator as to whether such regulations will 
encourage or discourage the acquisition of commercial products 
by Federal agencies; 
"(2) provide recommendations to the Administrator as to 
which procurement regulations should be rescinded or modified 
to encourage the acquisition of commercial products; and 
"(3) provide recommendations to the Administrator as to 
methods of simplifying procurement regulations governing ac-
quisition of commercial products, including the most efficient 
method to apply, modify, or waive the certification require-
ments of section 27 of this Act with respect to contracts for such 
products.". 
SEC. 10. STUDY AND REPORT BY THE ADMINISTRATOR FOR FEDERAL 
PROCUREMENT POLICY. 
No later than April 1, 1989, the Administrator for Federal 
Procurement Policy, in consultation with the Comptroller General, 
shall conduct a study and submit a report to the Committee on 
Governmental Affairs of the Senate and the Committee on Govern-
ment Operations of the House of Representatives— 
(1) on the extent to which the data collected by the Federal 
Procurement Data System is adequate for the management, 
oversight, and evaluation of Federal procurement; and 
102 STAT. 4070 
P I J B L I C LAW 100-679—NOV. 17, 1988 
(2) which shall include any appropriate recommendations for 
improvements of such system. 
SEC. 11. ELEVATION OF 
PRESIDENTIAL APPOINTEES WITHIN THE 
OFFICE OF MANAGEMENT AND BUDGET. 
(a) EXECUTIVE SCHEDULE, LEVEL L—Section 5312 of title 5, United 
States Code, is amended by adding at the end thereof the following: 
"Director of the Office of Management and Budget.". 
(b) EXECUTIVE SCHEDULE, LEVEL IL—Section 5313 of title 5, United 
States Code, is amended— 
(1) by adding at the end thereof the following: 
"Deputy Director of the Office of Management and Budget."; 
and 
(2) by striking out "Director of the Office of Management and 
Budget.". 
(c) EXECUTIVE SCHEDULE, LEVEL IIL—Section 5314 of title 5, 
United States Code, is amended— 
(1) by adding at the end thereof the following: 
"Administrator for Federal Procurement Policy. 
"Administrator, Office of Information and Regulatory Affairs, 
Office of Management and Budget."; and 
(2) by striking out "Deputy Director of the Office of Manage-
ment and Budget.". 
(d) EXECUTIVE SCHEDULE, LEVEL IV.—Section 5315 of title 5, 
United States Code, is amended— 
(1) by striking out "Administrator for Federal Procurement 
Policy. ; and 
(2) by striking out "Administrator, Office of Information and 
Regulatory Affairs, Office of Management and Budget.". 
5 use 5312 note. 
(e) EFFECTIVE DATE.—The amendments made by this section shall 
be effective on January 20,1989. 
SEC. 12. TRAVEL EXPENSES UNDER CERTAIN GOVERNMENT CONTRACTS. 
Section 24 of the Office of Federal Procurement Policy Act (41 
U.S.C. 420) is amended— 
(1) by redesignating such section as subsection (a) of section 
24; and 
(2) by adding at the end thereof the following new subsection: 
"OJXI) The provisions of subsection (a) shall not apply to any 
agreement between an executive agency and a State institution, or 
an executive eigency and a nonprofit institution, entered into for the 
purpose for conducting federally sponsored research and related 
activities. 
"(2) Under any agreement described under paragraph (1), costs 
incurred by personnel for travel, including costs of lodging, other 
subsistence, and incidental expenses, shall be considered reasonable 
and allowable only to the extent that such costs do not exceed— 
"(A) charges normally allowed by the respective institution in 
its regular operations as a result of an institutional policy; and 
"(B) the limits and principles as are provided for by govern-
ment-wide regulation of such costs established by the Director 
of the Office of Management and Budget. 
PUBLIC LAW 100-679—NOV. 17, 1988 
102 STAT. 4071 
"(3) The regulation under paragraph (2XB) shall specifically pro-
vide that in the absence of an institutional policy regarding travel 
costs, the rates and amounts established under subchapter I of 
chapter 57 of title 5, United States Ck)de, or by the Administrator of 
General Services or the President (or his designee) pursuant to any 
provisions of such subchapter shall apply to agreements between an 
, 
executive agency and a State institution, or an executive agency and 
a nonprofit institution, entered into for the purpose of conducting 
federally sponsored research and related activities.". 
SEC. 13. FEDERAL EMPLOYEE BENEFITS FOR CERTAIN EMPLOYEES OF 
FORMER PRESIDENTS AND VICE PRESIDENTS. 
(a) RETIREMENT BENEFITS.—(1) Section 8331(1) of title 5, United 
States CJode, is amended by— 
(A) striking out "and" at the end of subparagraph (I); 
(B) by inserting "and" after the semicolon at the end of 
subparagraph (J); and 
(C) inserting after subparagraph (J) the following new 
subparagraph: 
"(K) an individual appointed to a position on the office 
staff of a former President, or a former Vice President 
under section 4 of the Presidential Transition Act of 1963, 
as amended (78 Stat. 153), who immediately before the date 
of such appointment was an employee as defined under any 
other subparagraph of this paragraph;". 
(2) Section 8401(11) of title 5, United States Code, is amended by 
striking out "or (J)" and inserting in lieu thereof "(J), or (K)". 
(b) LIFE INSURANCE.—Section 8701(a) of title 5, United States Oxie, 
is amended by— 
(1) striking out "and" at the end of paragraph (8); 
(2) by inserting "and" after the semicolon at the end of 
paragraph (9); and 
(3) inserting after paragraph (9) the following new paragraph: 
"(10) an individual appointed to a position on the office staff 
of a former President, or a former Vice President under section 
4 of the Presidential Transition Act of 1963, as amended (78 
Stat. 153), who immediately before the date of such appointment 
was an employee as defined under any other paragraph of this 
subsection;". 
(c) HEALTH BENEFITS.—Section 8901(1) of title 5, United States 
Code, is amended by— 
(1) striking out "and" at the end of subparagraph (F); and 
(2) inserting after subparagraph (G) the following new 
subparagraphs: 
"(H) an individual appointed to a position on the office 
staff of a former President under section 10)) of the Act of 
August 25,1958 (72 Stat. 838); and 
19-1S4 O—91—Part S-
102 STAT. 4072 
PUBLIC LAW 100-679—NOV. 17, 1988 
"(I) an individual appointed to a position on the office 
staff of a former President, or a former Vice President 
under section 4 of the Presidential Transition Act of 1963, 
as amended (78 Stat. 153), who immediately before the date 
of such appointment was an employee as defined under any 
other subparagraph of this paragraph;". 
Approved November 17, 1988. 
LEGISLATIVE HISTORY—S. 2215 (H.R. 3345): 
HOUSE REPORTS: No. 100-911 accompanying H.R. 3345 (Comm. on Government 
Operations). 
SENATE REPORTS: No. 100-424 (Comm. on Governmental Affairs). 
CONGRESSIONAL RECORD, Vol. 134 (1988): 
Aug. 11, considered and passed Senate. 
Sept. 13, H.R. 3345 considered and passed House; proceedings vacated and 
S. 2215, amended, passed in lieu. 
Oct. 19, Senate concurred in House amendments with an amendment. 
Oct. 20, House concurred in Senate amendment.