Date: 2007-10-09
Speaker: TOM DAVIS (republican)
Chamber: H
State: Virginia

Mr. Speaker. I rise today to oppose this bill. not because I oppose punishing war profiteers or punishing corruption in contracting. I think these are critical. important laudable goals. I oppose this bill because creating a new law "involving a contract or the provision of goods or services to the United States" is a matter which must be considered in relation to the existing Federal acquisition systems. which this bill is not. Any attempt to legislate without considering the current system can have disastrous. albeit unintended. consequences which in this case include serious criminal penalties. As others have said today. we all agree that fraud- against the United States undermines national security and there must be severe penalties for .it. And of course we all agree corruption of any kind is unacceptable. Our committee in the last Congress held several hearings on contracting in Iraq and the difficulties that were faced there. And if the current law is inadequate to punish wrongdoers for these offenses. Congress should act. But taking up this bill in this way at this time proves to me that some of my colleagues on the other side of the aisle are caring about passing a bill so that they can take political potshots at contractors. Hundreds of contractors lives have been lost over in Iraq. and I think the widows and .the mothers of these sons and daughters who have been killed in Iraq would be. I think. chagrined to hear their sons referred to as profiteers. In many cases the contractors are more in harms way than our troops. They dont get the body armor. Many of them dont operate in the Green Zone or on bases. This is. in fact. a substitute. a proxy. if you will. because the majority cant put together a plan to end the war in Iraq so we go after contracting in Iraq. I think there are some things we could do. but I dont think this bill is the appropriate way to get through it. The words in this case dont make sense. Its not good law. What you care about is contractor bashing. consequences be damned. It is hard to get good companies to do business in Iraq. It is dangerous. it is expensive. it has all kinds of contingencies. and a lot of the best companies say we dont want to have anything to do with. The relationship between the government and the contractor is an armslength business one. with many laws outlining how this relationship should proceed. Adding additional language to the criminal code regarding certain aspects of this relationship will have unintended consequences which have to be considered before moving this legislation forward. For example. the bill makes it a crime to materially overvalue a good or service. Under the Truth in Negotiation Act. a detailed process is already set out in which to address claims of defective pricing in Federal contracts. To those who dont know .this government contract lingo. this might sound. like fraudulent behavior. But defective pricing occurs when a companys contract price is significantly increased because the company submitted pricing data that was not accurate. complete and current. Thats 10 U.S.C. 2306(a). In these cases. the government is generally entitled to a price reduction to remedy any overcharge by the submission of defective pricing data. The government takes seriously overpayments based on defective pricing and aggressively pursues contractors found to have engaged in these practices. in some cases including debarment. A contractors liability can extend beyond the repayment of any overcharges. and under current law. can include fraud claims against the contractor. But under H.R. 400. would an overzealous prosecutor be able to go after a company with a defective pricing claim against it as materially overvaluing a good or service? Maybe. Maybe not. But we. on the Oversight and Government Reform Committee with jurisdiction over Federal procurement should have the opportunity to consider this language and its impact on the Federal acquisition system. The interrelationship of procurement law and the criminal law can be complicated. We have to be careful not to criminalize procurement management matters just because you can. Careful study is required to separate criminal behavior from management issues. I see other problems as well. Allowing a Federal prosecutor to enter post hoc determinations on whether a contract provides appropriate value to the -government would have a chilling effect on a contracting officers decisionmaking. Contractors would be . discouraged from providing innovative solutions to government problems for fear that their solutions would subject them to charges of material overvaluation if the solution didnt work out as planned. Competition would be discouraged. which is the cornerstone of getting the best price and value because prospective contractors could be subjected to harsh penalties at the whim of a prosecutor who probably doesnt understand the acquisition system. In fixed price contracts. the price which the government buys would likely increase because contractors would have to include the possibility of these penalties in their. pricing. costing the taxpayers money. In commercial contracts the market dictates what is a fair value. not a post hoc prosecutors determination whether the government got appropriate value from the contract. I support strong penalties for war profiteering. I support strong penalties for corruption. I do not support H.R. 400 because I dont believe it has been given appropriate consideration by this House and numerous unintended consequences.