[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1139 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                S. 1139

   To provide for reform of environmental contracting, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 22, 1993

Mr. Lautenberg introduced the following bill; which was read twice and 
           referred to the Committee on Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
   To provide for reform of environmental contracting, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Responsible Environmental Management 
Act of 1993''.

SEC. 2. FINDINGS.

    (a) Findings.--Congress finds that--
            (1) the Environmental Protection Agency relies heavily on 
        outside contractors to provide necessary support services 
        throughout all of the program offices of the Agency in order to 
        achieve the environmental protection mission of the Agency;
            (2) numerous audits and reports by the Inspector General of 
        the Agency and the General Accounting Office over the 10-year 
        period preceding the date of enactment of this Act have 
        uncovered pervasive problems of mismanagement of the contract, 
        fiscal, and information systems programs of the Agency;
            (3) the contract mismanagement problems of the Agency have 
        led to improper conflicts of interest, performance of personal 
        services and inherently governmental functions by contractors, 
        and large-scale waste, fraud, and abuse; and
            (4) the fiscal and information systems mismanagement 
        problems of the Agency have potentially cost taxpayers hundreds 
        of millions of dollars and have crippled the ability of the 
        Agency to make sound, reasoned, and informed decisions about 
        the appropriate conduct of the environmental protection 
        programs of the Agency.
    (b) Purposes.--The purposes of this Act are to--
            (1) provide better accountability within the Agency in 
        order to improve the management of the contract, fiscal, and 
        information systems programs of the Agency; and
            (2) increase sanctions on contractors who seek 
        reimbursement for unallowable costs.

SEC. 3. DEFINITIONS.

    As used in this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Advisory and assistance services.--The term ``advisory 
        and assistance services''--
                    (A) means services to support or improve--
                            (i) agency policy development, 
                        decisionmaking, management, and administration; 
                        or
                            (ii) the operation of management systems; 
                        and
                    (B) includes--
                            (i) management and professional support 
                        services;
                            (ii) the conduct of studies, analyses, and 
                        evaluations; and
                            (iii) engineering and technical services.
            (3) Agency.--The term ``Agency'' means the Environmental 
        Protection Agency.
            (4) Covered contract.--The term ``covered contract'' means 
        a contract for an amount in excess of $1,000,000, other than a 
        fixed-price contract without cost incentives, entered into by 
        the Agency.
            (5) Response action contract.--The term ``response action 
        contract'' has the meaning provided in section 119(e)(1) of the 
        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980 (42 U.S.C. 9619(e)(1)).
            (6) Umbrella contract.--The term ``umbrella contract'' 
        means a contract by the appropriate official of the Agency 
        that--
                    (A) provides for the performance of specific 
                advisory and assistance services;
                    (B) does not procure or specify a firm quantity of 
                services;
                    (C) provides for services to be supplied to the 
                Federal Government in response to specific task orders 
                to the contractor from the Federal Government;
                    (D) requires the contractor to provide a stated 
                amount of effort over a given period of time (commonly 
                referred to as a ``level of effort contract'');
                    (E) has a maximum potential value, including any 
                options, of at least $1,000,000; and
                    (F) has a maximum potential period of performance, 
                including any options, that is longer than 1 year.

 SEC. 4. CONTRACT COSTS.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.) is amended by adding at the end the following new section:

 ``SEC. 29. INDIRECT COSTS UNDER ENVIRONMENTAL PROTECTION AGENCY 
              CONTRACTS.

    ``(a) Definition.--As used in this section, the term `covered 
contract' means an Environmental Protection Agency contract for an 
amount in excess of $1,000,000, other than a fixed-price contract 
without cost incentives.
    ``(b) Costs Disallowed.--If--
            ``(1) a contractor under a covered contract submits a 
        proposal for settlement of indirect costs incurred by the 
        contractor for any period beginning after the costs have been 
        accrued; and
            ``(2) the proposal includes the submission of a cost that 
        is unallowable because the cost is in violation of--
                    ``(A) a cost principle in the Federal Acquisition 
                Regulation promulgated under section 25 or in the 
                Environmental Protection Agency supplement to the 
                Federal Acquisition Regulation, or
                    ``(B) any other provision of law,
        the cost shall be disallowed.
    ``(c) Administrative Penalties.--
            ``(1) Unallowable costs in settlement proposals.--
                    ``(A) In general.--If the Administrator determines 
                that a cost submitted by a contractor under a covered 
                contract in the proposal of the contractor for 
                settlement is expressly unallowable under a cost 
                principle referred to in subsection (b)(2)(A) that 
                defines the allowability of specific selected costs, 
                the Administrator of the Environmental Protection 
                Agency may assess a penalty against the contractor in 
                an amount equal to the amount of the disallowed cost 
                allocated to covered contracts for which a proposal for 
                settlement of indirect costs has been submitted, plus 
                interest to compensate the United States for the use of 
                any funds that the contractor has claimed in excess of 
                the amount to which the contractor was entitled.
                    ``(B) Increased penalty.--If the Administrator of 
                the Environmental Protection Agency determines that a 
                proposal for settlement of indirect costs submitted by 
                a contractor under a covered contract includes a cost 
                determined to be unallowable in the case of the 
                contractor before the submission of the proposal, the 
                Administrator may assess a penalty against the 
                contractor in an amount not to exceed twice the amount 
                of the disallowed cost allocated to covered contracts 
                for which a proposal for settlement of indirect costs 
                has been submitted, plus interest to compensate the 
                United States for the use of any funds that the 
                contractor has claimed in excess of the amount to which 
                the contractor was entitled.
            ``(2) Interim claim penalty.--If, before completing 
        performance of a covered contract, the contractor submits for 
        payment allocated to the contract an unallowable cost that is 
        described in subsection (e) and that would provide a basis for 
        penalizing the contractor under paragraph (1) if it were 
        submitted in a proposal for settlement of indirect costs, the 
        Administrator may assess a penalty against the contractor in 
        the amount of $50,000.
            ``(3) Liability.--A person who has been assessed a penalty 
        under paragraph (1)(A) shall not be liable for a penalty under 
        paragraph (1)(B) for the same unallowable cost. A person who 
        has been assessed a penalty under paragraph (1)(B) shall not be 
        liable for a penalty under paragraph (1)(A) for the same 
        unallowable cost. A person who has been assessed a penalty 
        under paragraph (2) shall not be liable for a penalty under 
        paragraph (1) for the same unallowable cost. A person who has 
        been assessed a penalty under paragraph (1) for an unallowable 
        cost that is described in subsection (e) may be liable for a 
        penalty under paragraph (2) for the same unallowable cost.
            ``(4) Procedures.--
                    ``(A) Notice.--Before assessing a penalty under 
                paragraph (2), the Administrator shall give the 
                contractor written notice of the proposed penalty and 
                an opportunity to request, during the 30-day period 
                beginning on the date notice is received by the 
                contractor, a hearing on the proposed penalty 
                assessment. The hearing shall not be subject to section 
                554 or 556 of title 5, United States Code, but shall 
                provide the contractor a reasonable opportunity to be 
                heard and to present evidence.
                    ``(B) Hearings.--The Administrator may issue rules 
                governing discovery procedures for hearings conducted 
                pursuant to this paragraph.
    ``(d) Calculation of Penalties and Interest.--
            ``(1) Penalties.--In determining the appropriate amount of 
        a penalty under subsection (c), the Administrator may 
        consider--
                    ``(A) whether the contractor withdraws a proposal 
                before the formal initiation of an audit of the 
                proposal by the Federal Government and submits a 
                revised proposal that does not contain any cost that 
                provides a basis for penalizing the contractor under 
                subsection (c);
                    ``(B) whether the amount of unallowable costs that 
                provide a basis for penalizing the contractor is 
                insignificant;
                    ``(C) whether the contractor demonstrates, to the 
                satisfaction of the Administrator, that--
                            ``(i) the contractor has established 
                        policies, a personnel training program, and an 
                        internal control and review system that ensures 
                        that proposals for settlement of indirect costs 
                        of the contractor do not include unallowable 
                        costs that provide a basis for penalizing the 
                        contractor under subsection (c); and
                            ``(ii) the unallowable costs that provide a 
                        basis for penalizing the contractor under 
                        subsection (c) were inadvertently included in 
                        the proposal; and
                    ``(D) any previous instances with respect to which 
                the contractor has submitted claims for unallowable 
                costs under any contract with the Environmental 
                Protection Agency.
            ``(2) Interest.--Interest with respect to unallowable costs 
        claimed by a contractor shall be computed from the first day of 
        the contractor's fiscal year in which the costs were incurred.
    ``(e) Costs Specifically Unallowable.--The following costs are not 
allowable costs under a covered contract:
            ``(1) Any cost of entertainment, a gift, or recreation for 
        an employee of the contractor or a member of the family of the 
        contractor provided by the contractor to improve employee 
        morale or performance, or for any other purpose, in any amount, 
        except that nothing in this section precludes a contractor from 
        providing the entertainment, gift, or recreation at no expense 
        to the Federal Government.
            ``(2) Any cost of travel, unless--
                    ``(A) the cost is allowable under section 24; and
                    ``(B) the cost is supported by detailed 
                documentation, including documentation with respect 
                to--
                            ``(i) the amount, time, date, origin, and 
                        destination of the travel and the purpose of 
                        the travel; and
                            ``(ii) with respect to each traveler, the 
                        identity of the traveler and the title or 
                        relationship of the traveler to the contractor.
    ``(f) Actions by the Administrator.--An action of the Administrator 
under subsection (b) or (c) shall be considered a final decision for 
purposes of section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 
605) and shall be appealable in the manner provided in section 7 of 
such Act (41 U.S.C. 606).
    ``(g) Certification.--
            ``(1) In general.--A proposal for settlement of indirect 
        costs applicable to a covered contract shall include a 
        certification by an official of the contractor that, to the 
        best of the knowledge of the certifying official, all indirect 
        costs included in the proposal are allowable.
            ``(2) Waiver of certification requirement.--In any case in 
        which the Administrator of the Environmental Protection Agency 
        determines that there are exceptional circumstances with 
        respect to a covered contract, the Administrator may waive the 
        requirement for certification under paragraph (1) if the 
        Administrator--
                    ``(A) determines that it would be in the interest 
                of the United States to waive the determination; and
                    ``(B) states in writing the reasons for the 
                determination and makes the determination available to 
                the public.
    ``(h) Judicial Assessment.--
            ``(1) In general.--If a proposal for settlement of indirect 
        costs submitted by a contractor under a covered contract 
        includes a cost determined by the Administrator to be 
        unallowable, the Administrator may request the Attorney General 
        to bring an action in the United States district court for the 
        appropriate district. In any such case, the district court may 
        assess a penalty in an amount not to exceed $250,000 for each 
        cost determined by the Administrator to be unallowable.
            ``(2) Liability.--A person who has been assessed an 
        administrative penalty under subsection (c) shall not be liable 
        for a civil penalty under this subsection for the same 
        unallowable cost.
    ``(i) Criminal Penalties.--A person who with the knowledge that a 
cost that is expressly specified as unallowable by law (including any 
regulation) submits to the Environmental Protection Agency a proposal 
for settlement of costs for any period beginning after the costs have 
been accrued that includes the cost shall be subject to section 287 of 
title 18, United States Code, and section 3729 of title 31, United 
States Code.
    ``(j) Burden of Proof in Proceedings.--In a proceeding before a 
board of contract appeals, the United States Court of Federal Claims, 
or any other court of the United States in which the allowability of 
indirect costs for which a contractor seeks reimbursement from the 
Environmental Protection Agency is in issue, the burden of proof shall 
be upon the contractor to establish that the costs are allowable.
    ``(k) Documentation of Costs.--For the purposes of this section, 
costs shall be allowable only to the extent that the costs are 
supported by sufficient documentation to permit an appropriate 
audit.''.

 SEC. 5. UMBRELLA CONTRACTS FOR ADVISORY AND ASSISTANCE SERVICES.

    (a) Limitation on Entering Umbrella Contract.--The appropriate 
official of the Agency may enter into an umbrella contract only under 
the following conditions:
            (1) The period covered by the contract, including any 
        options, does not exceed--
                    (A) 5 years;
                    (B) in the case of a response action contract, 10 
                years; or
                    (C) such longer period as may be specified by the 
                Administrator if the Administrator determines that 
                unusual and compelling circumstances justify an 
                umbrella contract for a longer period.
            (2) The contract is awarded pursuant to competitive 
        procedures, as defined in section 309(b) of the Federal 
        Property and Administrative Services Act of 1949 (41 U.S.C. 
        259(b)), except for procedures described in paragraphs (2), 
        (3), and (5) of such section, unless the Administrator 
        determines in writing that--
                    (A) the services to be procured under the contract 
                are available from only one responsible source and no 
                other type of services will satisfy the needs of the 
                Agency; or
                    (B) the need of the Agency for the services to be 
                provided under the contract is of such an unusual and 
                compelling urgency that the Federal Government would be 
                seriously injured unless the Administrator is permitted 
                to limit the number of sources from which the 
                Administrator solicits bids or proposals.
            (3) The contract does not authorize the contractor to 
        procure items on behalf of the Federal Government, other than 
        items that are procured under response action contracts 
        referred to in paragraph (1)(B) for the performance of the 
        contract and all right, title, and interest in the items vests 
        in the Federal Government.
    (b) Prohibition of Contract Shopping.--
            (1) Limitation.--A task order may be made under an umbrella 
        contract awarded by the appropriate official of the Agency only 
        to carry out the mission of the office, function, or program of 
        the appropriate official of the Agency that requested the 
        umbrella contract.
            (2) Waiver.--The Administrator (or a designee who is an 
        officer of the Agency at or above the level of the senior 
        procurement executive of the Agency designated pursuant to 
        section 16(3) of the Office of Federal Procurement Policy Act 
        (41 U.S.C. 414(3)) may waive the application of the limitation 
        described paragraph (1) to a task order if the Administrator 
        (or a designee) determines in writing that--
                    (A) the task order is within the scope of the 
                umbrella contract;
                    (B) there is an identifiable emergency or other 
                urgent requirement that cannot be met by other means; 
                and
                    (C) there is no other contract available to the 
                appropriate official of the office seeking the waiver 
                that is suitable for the task order.
            (3) Application.--Paragraphs (1) and (2) do not apply to 
        any contract that the Administrator designates, before the 
        award of the contract, as being available for procurement with 
        respect to more than one office, function, or program of the 
        Agency.
    (c) Follow-On Competition.--Each statement of work in an umbrella 
contract awarded by the appropriate official of the Agency shall be 
drafted in such manner as to ensure full and open competition (as 
defined in section 4(6) of the Office of Federal Procurement Policy Act 
(41 U.S.C. 403(6)) of the contract that results from, completes, or 
supplements the work performed under the umbrella contract.
    (d) Subcontractors.--
            (1) Identification of subcontractors.--Except in the case 
        of a response action contract, any solicitation for an umbrella 
        contract awarded by the appropriate official of the Agency 
        shall require that each offeror identify in each proposal all 
        prospective subcontractors and the qualifications of the 
        subcontractors.
            (2) Restriction on eligibility for subcontracts.--A person 
        who is not identified as a prospective contractor in accordance 
        with paragraph (1) by the prime contractor for an umbrella 
        contract awarded by the appropriate official of the Agency 
        shall not be eligible to perform any task order as a 
        subcontractor under the umbrella contract.
            (3) Waiver.--
                    (A) In general.--The Administrator (or a designee 
                who is an officer of the Agency at or above the level 
                of the senior procurement executive of the Agency 
                designated pursuant to section 16(3) of the Office of 
                Federal Procurement Policy Act (41 U.S.C. 414(3)) may 
                waive the application of the restriction described in 
                paragraph (2) to a task order if the Administrator (or 
                a designee) determines in writing that because of 
                unusual circumstances with respect to the contract the 
                waiver is in the interest of the Federal Government.
                    (B) Unusual circumstances defined.--As used in 
                subparagraph (A), the term ``unusual circumstances'' 
                means--
                            (i) insolvency, nonresponsibility, 
                        suspension, or debarment of each subcontractor 
                        identified pursuant to paragraph (1) that is 
                        qualified to perform a task order for which the 
                        waiver is granted;
                            (ii) a lack of any technical skills 
                        necessary to perform the task orders for which 
                        the waiver is granted, by each subcontractor 
                        identified pursuant to paragraph (1);
                            (iii) other circumstances similar to the 
                        circumstances referred to in clauses (i) and 
                        (ii); or
                            (iv) any unusual or compelling urgency 
                        determined by the Administrator as appropriate.
            (4) Competition.--In any case in which the Administrator or 
        a designee of the Administrator grants a waiver under paragraph 
        (3), the award by the prime contractor to the subcontractor of 
        a subcontract to perform a task for which the waiver is granted 
        shall be made on a competitive basis unless the written 
        determination of the Administrator (or a designee) under 
        paragraph (3)--
                    (A) approves a noncompetitive award; and
                    (B) includes a finding that--
                            (i) an emergency exists; or
                            (ii) no other qualified source is 
                        reasonably available.
    (e) Contract Approval.--A contract for procurement under this 
section for goods or services (or both) in an amount that exceeds 
$50,000,000 shall be approved only by the Administrator.

SEC. 6. INFORMATION SYSTEMS COORDINATION.

    (a) Establishment.--The Administrator shall appoint a Deputy 
Assistant Administrator for Information Systems Coordination (referred 
to in this section as the ``Deputy Assistant Administrator'') to serve 
in the Office of Administration and Resources Management of the Agency. 
The Deputy Assistant Administrator shall report directly to the 
Assistant Administrator for Administration and Resources Management.
    (b) Duties of the Deputy Assistant Administrator.--At a minimum, 
the Deputy Assistant Administrator shall carry out the following duties 
and responsibilities:
            (1) Ensure that the information systems of the Agency are 
        efficiently and effectively managed and coordinated to achieve 
        the goals and accomplish the missions of the Agency.
            (2) Ensure that the information systems of the Agency are 
        designed and operated to provide for accurate and complete 
        reporting and evaluation of accomplishments and efforts of 
        programs of the Agency.
            (3) Ensure that the information systems of the Agency are 
        designed, acquired, and managed in the most cost-effective 
        manner practicable, and are made consistent with all applicable 
        laws, including section 111 of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 759).
            (4) Ensure, in coordination with the Chief Financial 
        Officer of the Agency, that the information systems of the 
        Agency compile and provide for all Agency programs--
                    (A) accurate, reliable, and complete financial 
                statements; and
                    (B) other financial, accounting, asset management 
                and related program performance data.
            (5) Maximize the effectiveness of the information systems 
        capabilities of the Agency by--
                    (A) developing and issuing appropriate policies and 
                guidelines;
                    (B) providing frequent and comprehensive training 
                opportunities for management and staff level employees; 
                and
                    (C) assisting and advising senior officials within 
                the Agency concerning properly managing information 
                systems programs to the fullest capabilities of the 
                systems.
            (6) Develop and implement appropriate measures to encourage 
        efficiency and improvements in information systems management 
        within the Agency.

SEC. 7. OFFICE OF SUPERFUND CONTRACT INTEGRITY.

    (a) Establishment.--The Administrator shall establish within the 
Office of Solid Waste and Emergency Response of the Environmental 
Protection Agency an Office of Superfund Contract Integrity (referred 
to in this section as the ``Office''). The Office shall be headed by a 
Director. The Director shall report directly to the Assistant 
Administrator for Solid Waste and Emergency Response.
    (b) Duties of the Director.--At a minimum, the Director shall carry 
out the following duties and responsibilities:
            (1) Ensure that contracts made by the Agency relating to 
        the Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980 (42 U.S.C. 9601 et seq.) (referred to in 
        this section as ``Superfund contracts'') are effectively 
        managed by the Agency, in particular with regard to--
                    (A) ensuring program management costs are kept to a 
                minimum;
                    (B) eliminating unnecessary excess contractor 
                capacity;
                    (C) controlling the charging, reviewing, and 
                payment of direct and indirect contractor costs;
                    (D) monitoring costs incurred to ensure the 
                allowability, allocability, and reasonableness of costs 
                claimed and the integrity of contract implementation;
                    (E) incorporating sufficiently detailed work 
                specifications;
                    (F) overseeing contractor performance in accordance 
                with specific, objective standards and criteria;
                    (G) implementing incentives to identify and prevent 
                waste, fraud, and abuse; and
                    (H) initiating other appropriate mechanisms to 
                improve the management accountability of the Agency and 
                enhance the quality and cost effectiveness of functions 
                contracted for outside the Agency.
            (2) Ensure that inherently governmental functions critical 
        to the operation of the Agency are not performed by persons who 
        enter into Superfund contracts (referred to in this section as 
        ``Superfund contractors''), and determine whether functions 
        that are not inherently governmental in nature should 
        nevertheless be performed by the Agency rather than Superfund 
        contractors.
            (3) Ensure that personal services are not improperly 
        provided by Superfund contractors.
            (4) Ensure that Superfund contractors do not have 
        unauthorized access to confidential business or other sensitive 
        information.
            (5) Ensure that the Agency is adequately protected against 
        Superfund contractor conflicts of interest.
    (c) Report.--
            (1) In general.--Not later than January 1, 1995, and 
        annually thereafter, the Assistant Administrator for Solid 
        Waste and Emergency Response shall transmit to the Committee on 
        Environment and Public Works and the Committee on Governmental 
        Affairs of the Senate, and the Committee on Energy and Commerce 
        and the Committee on Government Operations of the House of 
        Representatives, a report for the preceding fiscal year that 
        identifies specific measures and actions taken to monitor and 
        carry out each of the duties and responsibilities listed in 
        subsection (b).
            (2) Contents of report.--The report shall--
                    (A) identify any audits, reports, or investigations 
                completed by the Office of Inspector General of the 
                Agency during the preceding fiscal year, including the 
                annual audit conducted pursuant to section 111(k) of 
                the Comprehensive Environmental Response, Compensation, 
                and Liability Act of 1980 (42 U.S.C. 9611(k)), that 
                address in any way issues related to Superfund contract 
                management;
                    (B) describe the concrete steps taken and the 
                progress made by the Agency to resolve any issues and 
                recommendations identified by the Office of Inspector 
                General of the Agency under the audits, reports, or 
                investigations referred to in subparagraph (A); and
                    (C) identify initiatives taken and results achieved 
                during the preceding fiscal year to improve the overall 
                quality of Superfund contract management by the Agency.

SEC. 8. EFFECTIVE DATES; LIMITATIONS ON APPLICATION OF AMENDMENTS.

    (a) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), this 
        Act and the amendments made by this Act shall become effective 
        on the date that is 180 days after the date of enactment of 
        this Act.
            (2) Regulations.--Section 9 shall become effective on the 
        date of enactment of this Act.
    (b) Limitation on Application.--This Act and the amendments made by 
this Act shall not apply to a contract entered into before the 
effective date specified in subsection (a)(1), except with respect to--
            (1) a task added on or after the effective date to a 
        contract entered into before the effective date;
            (2) an order made on or after the effective date under a 
        contract entered into before the effective date; and
            (3) a contract that is extended, or for which an option to 
        renew is exercised, on or after the effective date.

SEC. 9. REGULATIONS.

    Not later than 120 days after the date of enactment of this Act, 
the Administrator shall promulgate regulations to implement this Act 
and the amendments made by this Act in final form. The regulations 
shall be consistent with section 25 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 421).

                                 <all>

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