[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3832 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 3832

 To make improvements with respect to the procurement of services for 
            the Federal Government, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 4, 2002

  Mr. Tom Davis of Virginia introduced the following bill; which was 
referred to the Committee on Government Reform, and in addition to the 
Committee on Armed Services, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To make improvements with respect to the procurement of services for 
            the Federal Government, 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 ``Services Acquisition Reform Act of 
2002''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                TITLE I--ACQUISITION WORKFORCE TRAINING

Sec. 101. Definition of acquisition.
Sec. 102. Acquisition workforce training fund.
Sec. 103. Government-industry exchange program.
Sec. 104. Reimbursement of costs.
Sec. 105. Conforming amendments.
Sec. 106. Acquisition workforce recruitment and retention pilot 
                            program.
Sec. 107. Authorization of telecommuting for Federal contractors.
Sec. 108. Architectural and engineering acquisition workforce.
         TITLE II--ADAPTATION OF BUSINESS ACQUISITION PRACTICES

        Subtitle A--Adaptation of Business Management Practices

Sec. 201. Chief Acquisition Officers.
Sec. 202. Increased role for Defense Contract Management Agency.
Sec. 203. Study on horizontal acquisition.
Sec. 204. Statutory and regulatory review.
                       Subtitle B--Payment Terms

Sec. 211. Payment terms.
                   Subtitle C--Acquisitions Generally

Sec. 221. Increase in authorization levels of Federal purchase cards.
Sec. 222. Reauthorization of franchise funds.
Sec. 223. Acquisition protests.
Sec. 224. Architectural and engineering services.
                     TITLE III--CONTRACT INCENTIVES

Sec. 301. Revisions to share-in-savings initiatives.
Sec. 302. Incentives for contract efficiency.
               TITLE IV--ACQUISITIONS OF COMMERCIAL ITEMS

Sec. 401. Preference for performance-based contracting.
Sec. 402. Authorization of additional contract types in FAR part 12.
Sec. 403. Clarification of commercial services definition.
Sec. 404. Designation of commercial business entities.
Sec. 405. Continuation of eligibility of contractor for award of 
                            information technology contract after 
                            providing design and engineering services.
Sec. 406. Commercial liability.
         TITLE V--TECHNOLOGY ACCESS IN A COMMERCIAL ENVIRONMENT

Sec. 501. Trade Agreements Act of 1979 exemption for information 
                            technology commercial items.
Sec. 502. Authorization for acquisition of information technology by 
                            State and local governments through Federal 
                            supply schedules.
Sec. 503. Certain research and development by civilian agencies.
                   TITLE VI--INFLATIONARY ADJUSTMENTS

Sec. 601. Simplified acquisition threshold inflation adjustment.

                TITLE I--ACQUISITION WORKFORCE TRAINING

SEC. 101. DEFINITION OF ACQUISITION.

    Section 4 of the Office of Federal Procurement Policy Act (41 
U.S.C. 403) is amended by adding at the end the following:
            ``(16) The term `acquisition'--
                    ``(A) means acquiring, by contract with 
                appropriated funds, property or services (including 
                construction) by and for the use of the Federal 
                Government through purchase or lease, from the point at 
                which executive agency needs are established by the 
                chief acquisition officer of the executive agency; and
                    ``(B) includes--
                            ``(i) acquiring property or services that 
                        are already in existence, or that must be 
                        created, developed, demonstrated, and 
                        evaluated;
                            ``(ii) the description of requirements to 
                        satisfy agency needs;
                            ``(iii) solicitation and selection of 
                        sources;
                            ``(iv) award of contracts;
                            ``(v) contract performance;
                            ``(vi) contract administration; and
                            ``(vii) technical and management functions 
                        directly related to the process of fulfilling 
                        agency needs by contract.''.

SEC. 102. ACQUISITION WORKFORCE TRAINING FUND.

    (a) Purposes.--The purposes of this section are to ensure that the 
Federal acquisition workforce--
            (1) adapts to fundamental changes in the nature of Federal 
        Government acquisition of property and services associated with 
        the changing role of the Federal Government; and
            (2) acquires new skills and a new mindset to enable it to 
        contribute effectively in the changing environment of the 21st 
        century.
    (b) Amendment of Office of Federal Procurement Policy Act.--Section 
37 of the Office of Federal Procurement Policy Act (41 U.S.C. 433) is 
amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Applicability.--Subsections (b) through (g) do not apply to 
an executive agency that is subject to chapter 87 of title 10, United 
States Code. Subsection (h) applies to all executive agencies, the 
United States Postal Service, and mixed-ownership Government 
corporations (as defined in section 9101 of title 31, United States 
Code).''; and
            (2) by adding at the end of subsection (h) the following 
        new paragraph:
            ``(3) Acquisition workforce training fund.--(A) The 
        Administrator of General Services shall establish an 
        acquisition workforce training fund, which shall be managed by 
        the Federal Acquisition Institute in support of acquisition 
        workforce training across executive agencies other than the 
        Department of Defense.
            ``(B) The training fund described in subparagraph (A) shall 
        be funded by depositing into the fund 5 percent of the fees 
        collected by executive agencies under Governmentwide task-and-
        delivery-order contracts authorized under sections 2304a 
        through 2304d of title 10, United States Code, sections 303H 
        through 303K of the Federal Property and Administrative 
        Services Act of 1949 (41 U.S.C. 253h-253k), Governmentwide 
        acquisition contracts described in section 5112(e) of the 
        Clinger-Cohen Act of 1996 (40 U.S.C. 1412(e)), multiagency 
        acquisition contracts authorized under section 5124 of the 
        Clinger-Cohen Act of 1996 (40 U.S.C. 1424), or multiple-award 
schedule contracts awarded by the General Services Administration.
            ``(C) The head of an executive agency that administers a 
        contract described in subparagraph (B) shall remit the amount 
        specified to the General Services Administration at the end of 
        each quarter of the fiscal year.
            ``(D) The Administrator of General Services and the Office 
        of Federal Acquisition Policy shall ensure that funds collected 
        for training under this section are not used for any purpose 
        other than the purpose specified in subparagraph (A). Amounts 
        deposited into the fund shall remain available until 
        expended.''.

SEC. 103. GOVERNMENT-INDUSTRY EXCHANGE PROGRAM.

    (a) In General.--Subpart B of part III of title 5, United States 
Code, is amended by adding at the end the following new chapter:

        ``CHAPTER 37--ACQUISITION PROFESSIONAL EXCHANGE PROGRAM

``Sec.
``3701. Definitions.
``3702. Detail authority.
``3703. Detail of employees to private sector organizations.
``3704. Transfer and detail of employees from private sector 
                            organizations.
``3705. Authority of the Office of Personnel Management.
``Sec. 3701. Definitions
    ``For purposes of this chapter--
            ``(1) the term `agency'--
                    ``(A) subject to subparagraph (B), means an 
                executive agency; and
                    ``(B) does not include--
                            ``(i) the General Accounting Office;
                            ``(ii) an Office of Inspector General of an 
                        establishment or a designated Federal entity 
                        established under the Inspector General Act of 
                        1978; and
                            ``(iii) the Defense Contract Audit Agency 
                        referred to in section 2313(b) of title 10; and
            ``(2) the term `detail' means--
                    ``(A) the assignment or loan of an employee to a 
                private sector organization without a change of 
                position in the agency at which the individual is 
                employed; or
                    ``(B) the assignment or loan of an employee of a 
                private sector organization to an agency without a 
                change of position in the private sector organization.
``Sec. 3702. Detail authority
    ``(a) At the request of, or with the agreement of, a private sector 
organization, and with the consent of the employee concerned, the head 
of an agency may arrange for the detail of an eligible employee of the 
agency to a private sector organization or an eligible individual 
employed by a private sector organization to the agency. For purposes 
of this section, an eligible employee or individual employed is an 
individual employed at the GS-11 level or above (or the equivalent) 
who--
            ``(1) works in the field of Federal acquisition or 
        acquisition management;
            ``(2) is considered an exceptional performer by the 
        individual's employer; and
            ``(3) is expected to assume increased acquisition 
        management responsibilities.
An employee of an agency shall be eligible to participate under this 
section only if the employee is serving under a career or career-
conditional appointment or an appointment of equivalent tenure in the 
excepted service.
    ``(b) Each agency that exercises the authority provided by this 
section shall establish a plan for implementing such authority. The 
plan shall provide for a written agreement between the agency and the 
employee concerned regarding the terms and conditions of the employee's 
detail. In the case of an employee of the agency, the agreement shall--
            ``(1) require the employee to serve in the civil service, 
        upon completion of the assignment, for a period equal to the 
        length of the detail; and
            ``(2) provide that, in the event the employee fails to 
        carry out the agreement (except for good and sufficient reason, 
        as determined by the head of the detailing agency), the 
        employee shall be liable to the United States for payment of 
        all expenses (excluding salary) of the detail. The amount shall 
        be treated as a debt due to the United States.
    ``(c) A detail under this chapter may be terminated by the agency 
or private sector organization concerned for any reason at any time.
    ``(d) A detail under this chapter shall be for a period of between 
6 months and 1 year and may be extended in three-month increments for a 
total of not more than 1 year.
    ``(e) The Procurement Executives Council, by agreement with the 
Office of Personnel Management, may assist in the administration of 
this chapter, including by maintaining lists of potential candidates 
for detail under this chapter, establishing mentoring relationships for 
the benefit of individuals who are given a detail under this chapter, 
and publicizing the program carried out under this chapter.
``Sec. 3703. Detail of employees to private sector organizations
    ``(a) An employee of an agency may be assigned to a private sector 
organization under this chapter as a detail to a regular work 
assignment.
    ``(b) Notwithstanding any other provision of law, an employee 
assigned under subsection (a) is entitled--
            ``(1) to receive supplemental pay from the agency in the 
        amount equal to the difference between the rate paid by the 
        organization to which detailed and the rate of basic pay 
        (including locality pay, where applicable, subject to 
        regulations of the Office of Personnel Management) payable for 
        the employee's Federal position, if the latter is greater;
            ``(2) in the case of an employee who is detailed under 
        subsection (a), to credit for the period of assignment under 
        this chapter toward periodic step increases, retention, and 
        leave accrual;
            ``(3) to retain coverage, rights, and benefits under 
        chapters 87 and 89, if necessary employee deductions and agency 
        contributions for the period of the assignment are deposited in 
        the Employees' Life Insurance Fund and the Employees Health 
        Benefits Fund, respectively, and the period of the assignment 
        is service as an employee under chapters 87 and 89;
            ``(4) to retain coverage, rights, and benefits under any 
        system established by law for the retirement of employees, if 
        necessary employee deductions and agency contributions in 
        payment for the coverage, rights, and benefits for the period 
        of assignment are deposited in the system's fund and the period 
        of the assignment is creditable under the system, except that 
        such service shall not be considered creditable service for the 
        purpose of any retirement system for Federal employees if such 
        service forms the basis, in whole or in part, for an annuity or 
        pension under the retirement system of the private sector 
        organization; and
            ``(5) to retain coverage, rights, and benefits under 
        subchapter I of chapter 81, and employment during the 
        assignment is deemed employment by the United States, but if 
        the employee or the employee's dependents receive from the 
        private sector organization any payment under an insurance 
        policy for which the premium is wholly paid by the private 
        sector organization, or other benefit of any kind on account of 
        the same injury or death, the amount of such payment or benefit 
        shall be credited against any compensation otherwise payable 
        under subchapter I of chapter 81.
During the employee's assignment to the private sector organization, 
the agency from which the employee is detailed shall make contributions 
for retirement and insurance purposes from the appropriations or funds 
of that agency so long as contributions are made by the employee.
    ``(c) The detail of an employee of an agency under subsection (a) 
may be made with or without reimbursement by the private sector 
organization for the travel and transportation expenses to or from the 
place of assignment, subject to the same terms and conditions that 
apply with respect to an employee of a Federal agency or a State or 
local government under section 3375, and for the pay, or supplemental 
pay, or any part thereof of the employee during assignment. Any 
reimbursements shall be credited to the appropriation of the agency 
used for paying the travel and transportation expenses or pay.
    ``(d) An employee assigned on detail under subsection (a) remains 
an employee of the agency from which detailed. The Federal Tort Claims 
Act and any other Federal tort liability law apply to the employee. The 
supervision of the duties of an employee on detail may be governed by 
an agreement between the agency and the organization to which detailed.
    ``(e) Notwithstanding any other provision of law, an employee 
detailed under subsection (a) is entitled to accrue annual and sick 
leave to the same extent as if the employee had continued working in 
the position from which detailed.
``Sec. 3704. Transfer and detail of employees from private sector 
              organizations
    ``(a) Notwithstanding any other provision of law, an individual 
employed by a private sector organization who is assigned to an agency 
under section 3702(a) may be--
            ``(1) transferred to the agency and appointed without 
        regard to the provisions of this title governing appointment in 
        the competitive service for the period of assignment; or
            ``(2) detailed to the agency.
    ``(b) An individual appointed under subsection (a)(1) is entitled 
to pay in accordance with chapter 51 and subchapter III of chapter 53 
or other applicable law, and is deemed an employee of the agency for 
all purposes except--
            ``(1) subchapter III of chapter 83, chapter 84, or other 
        applicable retirement system;
            ``(2) chapter 87; and
            ``(3) chapter 89 or other applicable health benefits system 
        unless the appointment results in the employee's loss of 
        coverage in a group health benefits plan the premium of which 
        has been paid in whole or in part by the private sector 
        organization.
The exceptions set forth in paragraphs (1) through (3) shall not apply 
to non-Federal employees who are covered by chapters 83, 84, 87, and 89 
by virtue of their non-Federal employment immediately before 
appointment under subsection (a)(1).
    ``(c) An employee of a private sector organization who is detailed 
to an agency under subsection (a)(2)--
            ``(1) is not entitled to pay from the agency, except to the 
        extent that the pay for the position to which detailed 
        (including locality pay, where applicable) exceeds the pay the 
        individual was receiving from the private sector organization 
        immediately before the detail;
            ``(2) may continue to receive pay and benefits from the 
        private sector organization from which he is detailed;
            ``(3) is deemed an employee of the agency for the purposes 
        of--
                    ``(A) chapter 73, except for section 7353(a)(1);
                    ``(B) sections 203, 205, 207, 208, 603, 606, 607, 
                643, 654, 1905, and 1913 of title 18;
                    ``(C) sections 1343, 1344, and 1349(b) of title 31;
                    ``(D) the Federal Tort Claims Act and any other 
                Federal tort liability law;
                    ``(E) the Ethics in Government Act of 1978;
                    ``(F) section 1043 of the Internal Revenue Code of 
                1986; and
                    ``(G) section 27(b) of the Office of Federal 
                Procurement Policy Act; and
            ``(4) is subject to such regulations as the President may 
        prescribe.
The supervision of an employee who is detailed under subsection (a)(2) 
may be governed by agreement between the agency and the private sector 
organization concerned. A detail under subsection (a)(2) may be made 
with or without reimbursement by the agency for the pay, or a part 
thereof, of the employee during the period of assignment, or for any 
contribution of the private sector organization to employee benefit 
systems.
    ``(d) If a private sector organization fails to continue the 
employer's contribution to private sector retirement, life insurance, 
and health benefit plans for an individual who is appointed in an 
agency under this section, the employer's contributions covering the 
period of the assignment may be made from the appropriations of the 
agency concerned.
    ``(e) A private sector employee who is given an assignment in an 
agency under subsection (a) and who suffers disability or dies as a 
result of personal injury sustained while performing duties during the 
assignment shall be treated, for the purpose of subchapter I of chapter 
81, as an employee as defined by section 8101 who had sustained the 
injury in the performance of duty, except that if the employee or the 
employee's dependents receive from the private sector organization any 
payment under an insurance policy for which the premium is wholly paid 
by the private sector organization, or other benefit of any kind on 
account of the same injury or death, the amount of such payment or 
benefit shall be credited against any compensation otherwise payable 
under subchapter I of chapter 81.
``Sec. 3705. Authority of the Office of Personnel Management
    ``The Director of the Office of Personnel Management shall 
prescribe regulations for the administration of this chapter.''.
    (b) Clerical Amendment.--The table of contents for part III of 
title 5, United States Code, is amended by inserting after the item 
relating to chapter 35 the following:

``37. Acquisition Professional Exchange Program.''.

SEC. 104. REIMBURSEMENT OF COSTS.

    Not later than 120 days after the date of the enactment of this 
Act, the Federal Acquisition Regulation shall be amended to provide for 
reimbursement of costs associated with an employee's participation in 
the program authorized by chapter 37 of title 5, United States Code (as 
added by section 103) as allowable training and education costs. Such 
costs--
            (1) include--
                    (A) the employee's salary and fringe benefits for a 
                period not to exceed the period of the employee's 
                assignment under such program; and
                    (B) moving and travel expenses; and
            (2) may be treated, for accounting purposes--
                    (A) as an indirect cost and accounted for in--
                            (i) an established overhead account; or
                            (ii) an overhead account established 
                        specifically for such program and allocated 
                        exclusively to the contractor's Federal 
                        Government contracts; or
                    (B) as a direct cost chargeable to fixed price or 
                time and material contracts.

SEC. 105. CONFORMING AMENDMENTS.

    (a) Title 5, U.S.C.--Title 5, United States Code, is amended--
            (1) in section 3111, by adding at the end the following:
    ``(d) Notwithstanding section 1342 of title 31, the head of an 
agency may accept voluntary service for the United States under chapter 
37 of this title and regulations of the Office of Personnel 
Management.''; and
            (2) in section 4108, by striking subsection (d).
    (b) Other Laws.--Section 125(c)(1) of Public Law 100-238 (5 U.S.C. 
8432 note) is amended--
            (1) in subparagraph (B), by striking ``or'' at the end;
            (2) in subparagraph (C), by striking ``and'' at the end and 
        inserting ``or''; and
            (3) by adding at the end the following:
                    ``(D) an individual assigned from a Federal agency 
                to a private sector organization under chapter 37 of 
                title 5, United States Code; and''.

SEC. 106. ACQUISITION WORKFORCE RECRUITMENT AND RETENTION PILOT 
              PROGRAM.

    (a) In General.--For purposes of sections 3304, 5333, and 5753 of 
title 5, United States Code, the head of an agency (including the 
Secretary of Defense) may determine that certain Federal acquisition 
positions are ``shortage category'' positions in order to recruit and 
directly hire employees with high qualifications, such as employees 
who--
            (1) hold a bachelor's degree from an accredited institution 
        of higher learning, earned with a grade point average of 3.2 or 
        higher (or the equivalent);
            (2) hold a law or masters or equivalent degree from an 
        accredited institution of higher education in business 
        administration, public administration, or systems engineering; 
        or
            (3) have had outstanding experience with commercial 
        acquisition practices, terms, and conditions.
    (b) Requirements.--Personnel actions under this paragraph shall be 
subject to policies prescribed by the Office of Personnel Management 
for direct recruitment, including the appointment of a preference 
eligible as long as preference eligibles are available who satisfy the 
stipulated high level of qualifications.
    (c) Period of Authority.--Authority under this section shall expire 
on September 30, 2006. The Administrator of the Office of Federal 
Procurement Policy shall submit a report to Congress 180 days prior to 
the expiration of this authority describing the efficacy of this 
program in attracting employees with unusually high qualifications to 
the acquisition workforce and providing a recommendation on whether the 
authority should be extended.

SEC. 107. AUTHORIZATION OF TELECOMMUTING FOR FEDERAL CONTRACTORS.

    (a) Amendment to the Federal Acquisition Regulation.--Not later 
than 180 days after the date of the enactment of this Act, the Federal 
Acquisition Regulation issued in accordance with sections 6 and 25 of 
the Office of Federal Procurement Policy Act (41 U.S.C. 405 and 421) 
shall be amended to permit the use of telecommuting by employees of 
Federal contractors in the performance of contracts with executive 
agencies.
    (b) Content of Amendment.--The amendment issued pursuant to 
subsection (a) shall, at a minimum, provide that solicitations for the 
acquisition of goods or services shall not set forth any requirement or 
evaluation criteria that would--
            (1) render an offeror ineligible to receive a contract 
        award based on the offeror's plan to allow its employees to 
        telecommute; or
            (2) reduce the scoring of an offeror's proposal based upon 
        the contractor's plan to allow its employees to telecommute, 
        unless the contracting officer first--
                    (A) determines that the needs of the agency, 
                including the security needs of the agency, cannot be 
                met without any such requirement; and
                    (B) explains in writing the basis for that 
                determination.
    (c) GAO Report.--Not later than one year after the date on which 
the amendment required by subsection (a) is published in the Federal 
Register, the Comptroller General shall submit to Congress an 
evaluation of--
            (1) compliance by executive agencies with the regulations; 
        and
            (2) conformance of the regulations with existing law, 
        together with any recommendations that the Comptroller General 
        considers appropriate.
    (d) Definition.--In this section, the term ``executive agency'' has 
the meaning given that term in section 105 of title 5, United States 
Code.

SEC. 108. ARCHITECTURAL AND ENGINEERING ACQUISITION WORKFORCE.

    The Administrator of the Office of Federal Procurement Policy, in 
consultation with the Secretary of Defense and the Director of the 
Office of Personnel Management, shall develop and implement a plan to 
assure that the Federal Government maintains a core in-house 
architectural and engineering capability to--
            (1) ensure expertise to determine each agency's need for 
        services;
            (2) establish priorities and programs (including 
        acquisition plans);
            (3) establish professional standards;
            (4) develop scopes of work; and
            (5) manage and award contracts for such services.

         TITLE II--ADAPTATION OF BUSINESS ACQUISITION PRACTICES

        Subtitle A--Adaptation of Business Management Practices

SEC. 201. CHIEF ACQUISITION OFFICERS.

    (a) Appointment of Chief Acquisition Officers.--(1) Section 16 of 
the Office of Federal Procurement Policy Act (41 U.S.C. 414) is amended 
to read as follows:

``SEC. 16. APPOINTMENT OF CHIEF ACQUISITION OFFICERS.

    ``(a) To further achieve effective, efficient, and economic 
administration of the Federal acquisition system, the head of each 
executive agency shall appoint a Chief Acquisition Officer for the 
agency.
    ``(b) A Chief Acquisition Officer appointed under subsection (a), 
in accordance with applicable laws, Governmentwide policies and 
regulations, and good business practices, shall be responsible for--
            ``(1) providing advice and other assistance to the head of 
        the executive agency and other senior management personnel of 
        the executive agency to ensure that the agency's mission goals 
        are achieved through the management of the agency's acquisition 
        activities and acquisitions in a manner that implements the 
        policies and procedures of this division, consistent with 
        chapter 11 of title 31, United States Code, and the priorities 
        established by the head of the executive agency;
            ``(2) increasing the use of full and open competition in 
        the acquisition of property or services by the executive agency 
        by establishing policies, procedures, and practices that assure 
        that the executive agency receives a sufficient number of 
        sealed bids or competitive proposals from responsible sources 
        to fulfill the Government's requirements (including performance 
        and delivery schedules) at the best value considering the 
        nature of the property or service procured;
            ``(3) making acquisition decisions consistent with all 
        applicable law and establishing clear lines of authority, 
        accountability, and responsibility for acquisition 
        decisionmaking within the executive agency;
            ``(4) managing the direction of acquisition policy for the 
        executive agency, including implementation of the unique 
        acquisition policies, regulations, and standards of the 
        executive agency; and
            ``(5) developing and maintaining an acquisition career 
        management program in the executive agency to assure an 
        adequate professional workforce.
    ``(c) The Chief Acquisition Officer of an executive agency shall--
            ``(1) have acquisition management as that official's 
        primary duty;
            ``(2) monitor the performance of acquisition activities and 
        acquisition programs of the agency, evaluate the performance of 
        those programs on the basis of the applicable performance 
        measurements, and advise the head of the agency regarding the 
        appropriate business strategy to achieve the agency mission; 
        and
            ``(3) annually, as part of the strategic planning and 
        performance evaluation process required (subject to section 
        1117 of title 31, United States Code) under section 306 of 
        title 5, United States Code, and sections 1105(a)(29), 1115, 
        1116, 1117, and 9703 of title 31, United States Code--
                    ``(A) assess the requirements established for 
                agency personnel regarding knowledge and skill in 
                acquisition resources management and the adequacy of 
                such requirements for facilitating the achievement of 
                the performance goals established for acquisition 
                management;
                    ``(B) in order to rectify any deficiency in meeting 
                those requirements, develop strategies and specific 
                plans for hiring, training, and professional 
                development; and
                    ``(C) report to the head of the agency on the 
                progress made in improving acquisition management 
                capability.''.
    (2) The item relating to section 16 in the table of contents of 
such Act is amended to read as follows:

``Sec. 16. Chief Acquisition Officers.''.
    (b) Conforming Amendments.--The Office of Federal Procurement 
Policy Act (41 U.S.C. 403 et seq.), the Federal Property and 
Administrative Services Act of 1949, and title 10, United States Code, 
are each amended by striking ``senior procurement executive'' each 
place such term appears and inserting ``Chief Acquisition Officer''.

SEC. 202. INCREASED ROLE FOR DEFENSE CONTRACT MANAGEMENT AGENCY.

    The Under Secretary of Defense for Acquisition, Technology, and 
Logistics shall review the feasibility of establishing the Defense 
Contract Management Agency as the primary organization responsible for 
performing contract management services on Department of Defense base 
operating service contracts in excess of $5,000,000.

SEC. 203. STUDY ON HORIZONTAL ACQUISITION.

    Not later than 9 months after the date of the enactment of this 
Act, the Administrator of the Office of Federal Procurement Policy 
shall submit to the Committee on Government Reform of the House of 
Representatives and the Committee on Governmental Affairs of the Senate 
a study on the laws, executive orders, and regulations that hinder the 
performance of acquisition functions across department or agency lines 
and otherwise impact the use of Governmentwide contracts.

SEC. 204. STATUTORY AND REGULATORY REVIEW.

    (a) Establishment.--Not later than 60 days after the date of the 
enactment of this Act, the Administrator of the Office of Federal 
Procurement Policy shall establish an advisory panel to review laws and 
regulations that hinder the use of commercial practices and 
performance-based contracting.
    (b) Membership.--The panel shall be composed of at least nine 
individuals who are recognized experts in acquisition law and 
Government acquisition policy. In making appointments to the panel, the 
Administrator shall ensure that the members of the panel reflect the 
diverse experiences in the public and private sectors.
    (c) Duties.--The panel shall--
            (1) review all Federal acquisition laws and regulations 
        with a view toward ensuring the use of greater commercial 
        practices and performance-based contracting; and
            (2) make any recommendations for the repeal or amendment of 
        such laws or regulations considered necessary as a result of 
        such review to--
                    (A) eliminate any such laws or regulations that are 
                unnecessary for the establishment and administration of 
                buyer and seller relationships in acquisition;
                    (B) ensure the continuing financial and ethical 
                integrity of Government acquisition programs; and
                    (C) protect the best interests of the Government.
    (d) Report.--(1) Not later than one year after the establishment of 
the panel, a report shall be transmitted to the Administrator and to 
the Committees on Government Reform and Armed Services of the House of 
Representatives and the Committees on Governmental Affairs and Armed 
Services of the Senate.
    (2) The report shall contain a detailed statement of the findings 
and conclusions of the panel, the proposed codification of acquisition 
laws or proposed regulations prepared pursuant to subsection (c), and 
such additional recommendations for such legislation or regulations as 
the panel considers appropriate.

                       Subtitle B--Payment Terms

SEC. 211. PAYMENT TERMS.

    Not later than 180 days after the date of the enactment of this 
Act, the Federal Acquisition Regulation shall be revised to provide 
that--
            (1) service contractors may submit invoices for payment 
        either biweekly or monthly, provided that any biweekly 
        invoicing must be through electronic means;
            (2) for an electronic invoice, the date of the invoice 
        shall be the date the invoice is electronically delivered to 
        the Federal Government;
            (3) the Federal Government shall accept or reject an 
        electronically delivered invoice within 5 working days of the 
        date of the invoice;
            (4) all accepted invoices shall be paid as soon as 
        possible, but in no event shall an accepted invoice be paid 
        later than 30 days after the date of the invoice; and
            (5) payment of an invoice does not prohibit either the 
        Government or the contractor from making corrections or 
        adjustments to the invoice at a later date.

                   Subtitle C--Acquisitions Generally

SEC. 221. INCREASE IN AUTHORIZATION LEVELS OF FEDERAL PURCHASE CARDS.

    Section 32 of the Office of Federal Procurement Policy Act (41 
U.S.C. 428) is amended by striking ``$2,500'' in subsections (c), (d), 
and (f), and inserting ``$25,000''.

SEC. 222. REAUTHORIZATION OF FRANCHISE FUNDS.

    Section 403(f) of the Federal Financial Management Act of 1994 (31 
U.S.C. 501 note) is amended by striking ``October 1, 2001'' and 
inserting ``October 1, 2005''.

SEC. 223. ACQUISITION PROTESTS.

    (a) Defense Contracts.--(1) Chapter 137 of title 10, United States 
Code, is amended by inserting after section 2305a the following new 
section:
``Sec. 2305b. Protests
    ``(a) In General.--A protest of an acquisition of supplies or 
services by an agency concerning an alleged violation of an acquisition 
law or regulation submitted to the agency by an interested party shall 
be decided by the agency if submitted in accordance with this section.
    ``(b) Restrictions Pending Decision.--(1) A contract may not be 
awarded in an acquisition after a protest concerning the acquisition 
has been submitted and while the protest is pending except that the 
head of the acquisition activity responsible for the award of the 
contract may authorize the award of the contract, notwithstanding the 
pending protest, upon a written finding that urgent and compelling 
circumstances do not allow for waiting for a decision.
    ``(2) Performance of a contract shall not be authorized (and 
performance of the contract shall cease if performance has already 
begun) in any case in which a protest of the contract award is 
submitted not later than 10 days after the date of contract award or 5 
days after an agency debriefing, whichever is later, except that the 
head of the acquisition activity responsible for the award of the 
contract may authorize performance of the contract notwithstanding the 
pending protest upon a written finding that urgent and compelling 
circumstances do not allow for waiting for a decision.
    ``(c) Deadline for Decision.--The head of the agency shall issue a 
decision not later than the date that is 10 working days after the date 
that the protest is submitted to the agency.
    ``(d) Construction.--Nothing contained in this section shall affect 
the right of an interested party to file a protest with the General 
Accounting Office under subchapter V of chapter 35 of title 31 or in 
the United States Court of Federal Claims.
    ``(e) Definitions.--In this section:
            ``(1) The term `interested party', with respect to a 
        contract or a solicitation or other request for offers 
        described in paragraph (2), means an actual or prospective 
        bidder or offeror whose direct economic interest would be 
        affected by the award of the contract or by failure to award 
        the contract.
            ``(2) The term `protest' means a written objection by an 
        interested party to any of the following:
                    ``(A) A solicitation or other request by an agency 
                for offers for a contract for the acquisition of 
                property or services.
                    ``(B) The cancellation of such a solicitation or 
                other request.
                    ``(C) An award or proposed award of such a 
                contract.
                    ``(D) A termination or cancellation of an award of 
                such a contract, if the written objection contains an 
                allegation that the termination or cancellation is 
                based in whole or in part on improprieties concerning 
                the award of the contract.''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 2305a the 
following new item:

``2305b. Protests.''.
    (b) Other Agencies.--(1) The Federal Property and Administrative 
Services Act of 1949 is amended by inserting after section 303M the 
following new section:

``SEC. 303L. PROTESTS.

    ``(a) In General.--A protest of an acquisition of supplies or 
services by an executive agency concerning an alleged violation of an 
acquisition law or regulation submitted to the agency by an interested 
party shall be decided by the agency if submitted in accordance with 
this section.
    ``(b) Restrictions Pending Decision.--(1) A contract may not be 
awarded in an acquisition after a protest concerning the acquisition 
has been submitted and while the protest is pending except that the 
head of the acquisition activity responsible for the award of the 
contract may authorize the award of the contract, notwithstanding the 
pending protest, upon a written finding that urgent and compelling 
circumstances do not allow for waiting for a decision.
    ``(2) Performance of a contract shall not be authorized (and 
performance of the contract shall cease if performance has already 
begun) in any case in which a protest of the contract award is 
submitted not later than 10 days after the date of contract award or 5 
days after an agency debriefing, whichever is later, except that the 
head of the acquisition activity responsible for the award of the 
contract may authorize performance of the contract notwithstanding the 
pending protest upon a written finding that urgent and compelling 
circumstances do not allow for waiting for a decision.
    ``(c) Deadline for Decision.--The head of the agency shall issue a 
decision not later than the date that is 10 working days after the date 
that the protest is submitted to the agency.
    ``(d) Construction.--Nothing contained in this section shall affect 
the right of an interested party to file a protest with the General 
Accounting Office under subchapter V of chapter 35 of title 31, United 
States Code, or in the United States Court of Federal Claims.
    ``(e) Definitions.--In this section:
            ``(1) The term `interested party', with respect to a 
        contract or a solicitation or other request for offers 
        described in paragraph (2), means an actual or prospective 
        bidder or offeror whose direct economic interest would be 
        affected by the award of the contract or by failure to award 
        the contract.
            ``(2) The term `protest' means a written objection by an 
        interested party to any of the following:
                    ``(A) A solicitation or other request by an agency 
                for offers for a contract for the acquisition of 
                property or services.
                    ``(B) The cancellation of such a solicitation or 
                other request.
                    ``(C) An award or proposed award of such a 
                contract.
                    ``(D) A termination or cancellation of an award of 
                such a contract, if the written objection contains an 
                allegation that the termination or cancellation is 
                based in whole or in part on improprieties concerning 
                the award of the contract.''.
    (2) The table of contents in section 1(b) of such Act is amended by 
inserting after the item relating to section 303M the following new 
item:

``303L. Protests.''.
    (c) Conforming Amendment.--Section 3553(d)(4) of title 31, United 
States Code, is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) by striking the period at the end of subparagraph (B) 
        and inserting ``; or''; and
            (3) by adding at the end the following new subparagraph:
            ``(C) the date that is 5 days after the date that the 
        agency issues its decision under section 2305b of title 10 or 
        section 303L of the Federal Property and Administrative 
        Services Act of 1949.''.

SEC. 224. ARCHITECTURAL AND ENGINEERING SERVICES.

    (a) Federal Property and Administrative Services Act.--Section 901 
of the Federal Property and Administrative Services Act of 1949 (40 
U.S.C. 541) is amended by adding at the end the following new 
paragraph:
            ``(4) The term `surveying and mapping' means contracts and 
        subcontracts for services utilizing Federal funds for 
        collecting, storing, retrieving, or disseminating graphical or 
        digital data depicting natural or manmade physical features, 
        phenomena, or boundaries of the earth and any information 
        related thereto, including but not limited to surveys, maps, 
        charts, geographic information systems, remote sensing data and 
        images, and aerial photographic services performed by 
        professionals such as surveyors, photogrammetrists, 
        hydrographers, geodesists, or cartographers.
            ``(5) The term `contract' means a contract or subcontract 
        awarded by an agency head, prime contractor, or grantee.''.
    (b) Amendment of FAR.--The Federal Acquisition Regulation shall be 
revised to include the definitions added by subsection (a) of this 
section.
    (c) Title 10.--Section 2855(b) of title 10, United States Code, is 
amended--
            (1) in paragraph (2), by striking ``$85,000'' and inserting 
        ``$300,000''; and
            (2) by adding at the end the following new paragraph:
            ``(3) The selection and competition requirements of this 
        section shall apply to any contract for architectural and 
        engineering services (including surveying and mapping services) 
        by all military departments and defense agencies.''.
    (d) Professional Engineering Services.--Notwithstanding any other 
provision of law, no executive agency shall establish or carry out a 
program to offer services or to offer contracts for professional 
engineering services unless--
            (1) such services are performed under the direct 
        supervision of a professional engineer licensed in a State; and
            (2) such services are awarded in accordance with the 
        selection procedures set forth in title IX of the Federal 
        Property and Administrative Services Act of 1949 (40 U.S.C. 
        541).

                     TITLE III--CONTRACT INCENTIVES

SEC. 301. REVISIONS TO SHARE-IN-SAVINGS INITIATIVES.

    (a) Defense Contracts.--(1) Chapter 137 of title 10, United States 
Code, is amended by adding at the end the following new section:
``Sec. 2332. Share-in-savings contracts
    ``(a) Authority To Enter Into Share-in-Savings Contracts.--(1) The 
head of an agency may enter into a share-in-savings contract for a 
period of not more than ten years.
    ``(2) An agency may retain savings realized through the use of a 
share-in-savings contract under this section that are in excess of the 
total amount of savings paid to the contractor under the contract. 
Amounts retained by the agency under this subsection shall, without 
further appropriation, remain available until expended.
    ``(3)(A) If funds are not made available for the continuation of a 
share-in-savings contract entered into under this section in a 
subsequent fiscal year, the contract shall be canceled or terminated. 
The costs of cancellation or termination may be paid out of--
            ``(i) appropriations available for the performance of the 
        contract;
            ``(ii) appropriations available for acquisition of the type 
        of property or services procured under the contract, and not 
        otherwise obligated; or
            ``(iii) funds appropriated for payments of costs of 
        cancellation or termination.
    ``(B) The amount payable in the event of cancellation or 
termination of a share-in-savings contract shall be negotiated with the 
contractor at the time the contract is entered into.
    ``(C) An agency may enter into a share-in-savings contract under 
this section even if funds are not made specifically available for the 
costs of cancellation or termination of the contract if funds are 
available and sufficient to make payments with respect to the first 
fiscal year of the contract.
    ``(b) Definitions.--In this section:
            ``(1) The term `contractor' means a private entity that 
        enters into a contract with an agency.
            ``(2) The term `savings' means--
                    ``(A) monetary savings to an agency; or
                    ``(B) savings in time or other benefits realized by 
                the agency, including enhanced revenues.
            ``(3) The term `share-in-savings contract' means a contract 
        under which--
                    ``(A) a contractor provides solutions for--
                            ``(i) improving the agency's mission-
                        related or administrative processes; or
                            ``(ii) accelerating the achievement of 
                        agency missions; and
                    ``(B) the agency pays the contractor an amount 
                equal to a portion of the savings derived by the agency 
                from--
                            ``(i) any improvements in mission-related 
                        or administrative processes that result from 
                        implementation of the solution; or
                            ``(ii) acceleration of achievement of 
                        agency missions.''.
    (2) The table of sections at the beginning of such chapter is 
amended by adding at the end the following new item:

``2332. Share-in-savings contracts.''.
    (b) Other Contracts.--(1) Title III of the Federal Property and 
Administrative Services Act of 1949 is amended by adding at the end the 
following:

``SEC. 317. SHARE-IN-SAVINGS CONTRACTS.

    ``(a) Authority To Enter Into Share-in-Savings Contracts.--(1) An 
executive agency may enter into a share-in-savings contract for a 
period of not more than ten years.
    ``(2) An executive agency may retain savings realized through the 
use of a share-in-savings contract under this section that are in 
excess of the total amount of savings paid to the contractor under the 
contract. Amounts retained by the executive agency under this 
subsection shall, without further appropriation, remain available until 
expended.
    ``(3)(A) If funds are not made available for the continuation of a 
share-in-savings contract entered into under this section in a 
subsequent fiscal year, the contract shall be canceled or terminated. 
The costs of cancellation or termination may be paid out of--
            ``(i) appropriations available for the performance of the 
        contract;
            ``(ii) appropriations available for acquisition of the type 
        of property or services procured under the contract, and not 
        otherwise obligated; or
            ``(iii) funds appropriated for payments of costs of 
        cancellation or termination.
    ``(B) The amount payable in the event of cancellation or 
termination of a share-in-savings contract shall be negotiated with the 
contractor at the time the contract is entered into.
    ``(C) An executive agency may enter into a share-in-savings 
contract under this section even if funds are not made specifically 
available for the costs of cancellation or termination of the contract 
if funds are available and sufficient to make payments with respect to 
the first fiscal year of the contract.
    ``(b) Definitions.--In this section:
            ``(1) The term `contractor' means a private entity that 
        enters into a contract with an executive agency.
            ``(2) The term `savings' means--
                    ``(A) monetary savings to an executive agency; or
                    ``(B) savings in time or other benefits realized by 
                the executive agency, including enhanced revenues.
            ``(3) The term `share-in-savings contract' means a contract 
        under which--
                    ``(A) a contractor provides solutions for--
                            ``(i) improving the executive agency's 
                        mission-related or administrative processes; or
                            ``(ii) accelerating the achievement of 
                        agency missions; and
                    ``(B) the executive agency pays the contractor an 
                amount equal to a portion of the savings derived by the 
                agency from--
                            ``(i) any improvements in mission-related 
                        or administrative processes that result from 
                        implementation of the solution; or
                            ``(ii) acceleration of achievement of 
                        agency missions.''.
    (2) The table of contents in section 1(b) of such Act is amended by 
adding at the end the following new item:

``Sec. 317. Share-in-savings contracts.''.
    (c) Development of Incentives.--The Director of the Office of 
Management and Budget shall--
            (1) in consultation with executive agencies--
                    (A) identify potential opportunities for the use of 
                share-in-savings contracts; and
                    (B) encourage the use of share-in-savings contracts 
                for projects for which significant savings are 
                expected; and
            (2) in consultation with Congress and executive agencies, 
        develop techniques--
                    (A) to provide incentives for the use of share-in-
                savings contracts; and
                    (B) to permit an executive agency to retain a 
                portion of the savings (after payment of the 
                contractor's share of the savings) derived from such 
                contracts as funds are appropriated to the agency in 
                future years.
    (d) Guidance and Regulations.--(1) Not later than 180 days after 
the date of the enactment of this section, the Federal Acquisition 
Regulation shall be revised to implement the provisions enacted by this 
section.
    (2) Not later than 180 days after the enactment of this section, 
the Director of the Office of Management and Budget shall issue 
guidance on the use by executive agencies of share-in-savings 
contracts. Such guidance shall--
            (A) provide for the use of competitive procedures for the 
        selection and award of share-in-savings contracts;
            (B) allow maximum regulatory flexibility to facilitate the 
        use of share-in-savings contracts by executive agencies, 
        including the use of nonstandard Federal Acquisition Regulation 
        contract clauses; and
            (C) provide guidance to executive agencies for determining 
        mutually beneficial savings share ratios and baselines from 
        which savings may be measured.
    (e) Report to Congress.--In consultation with executive agencies, 
the Director of the Office of Management and Budget shall, not later 
than 2 years after the date of the enactment of this section, submit to 
Congress a report describing--
            (1) the number of share-in-savings contracts entered into 
        by each executive agency under the provisions enacted by this 
        section; and
            (2) any recommendations regarding additional changes in law 
        necessary to encourage increased use of share-in-savings 
        contracts by executive agencies.
    (f) Definitions.--In this section, the terms ``contractor'', 
``savings'', and ``share-in-savings contract'' have the meanings given 
those terms under section 317 of the Federal Property and 
Administrative Services Act of 1949 (as added by subsection (b)).

SEC. 302. INCENTIVES FOR CONTRACT EFFICIENCY.

    (a) Defense Contracts.--(1) Chapter 137 of title 10, United States 
Code, is further amended by adding at the end the following new 
section:
``Sec. 2333. Incentives for contract efficiency
    ``(a) Authority To Enter Into 10-Year Service Contracts.--An agency 
may enter into contracts for the performance of services to the 
government for periods of not more than ten years if such contracts are 
performance-based.
    ``(b) Extensions.--An agency may enter into contracts for the 
performance of services to the government that provide for the contract 
to be extended by additional performance periods in instances of 
exceptional performance by the contractor. A contract that provides for 
such extensions shall be performance-based, and must include 
performance parameters that can be used to measure performance under 
the contract. The entire term of the contract, including the additional 
performance periods, may not exceed ten years.
    ``(c) Other Contracts.--An agency may enter into a level-of-effort 
contract that provides for savings realized through cost efficiencies 
to be shared with the contractor in an amount sufficient to encourage 
the contractor to invest in methods of performance that are likely to 
reduce the overall cost of contract performance.''.
    (2) The table of contents at the beginning of such chapter is 
amended by adding at the end the following new item:

        ``Sec. 2333. Incentives for contract efficiency.''.
    (b) Other Contracts.--(1) Title III of the Federal Property and 
Administrative Services Act of 1949 is further amended by adding at the 
end the following new section:

``SEC. 318. INCENTIVES FOR CONTRACT EFFICIENCY.

    ``(a) Authority To Enter Into 10-Year Service Contracts.--An 
executive agency may enter into contracts for the performance of 
services for the Government for periods of not more than ten years if 
such contracts are performance-based.
    ``(b) Extensions.--An executive agency may enter into contracts for 
the performance of services to the Government that provide for the 
contract to be extended by additional performance periods in instances 
of exceptional performance by the contractor. A contract that provides 
for such extensions shall be performance-based, and must include 
performance parameters that can be used to measure performance under 
the contract. The entire term of the contract, including the additional 
performance periods, may not exceed ten years.
    ``(c) Other Contracts.--An executive agency may enter into a level-
of-effort type contract that provides for savings realized through cost 
efficiencies to be shared with the contractor in an amount sufficient 
to encourage the contractor to invest in methods of performance that 
are likely to reduce the overall cost of contract performance.''.
    (2) The table of contents in section 1(b) of such Act is further 
amended by adding at the end the following new item:

        ``Sec. 318. Incentives for contract efficiency.''.

               TITLE IV--ACQUISITIONS OF COMMERCIAL ITEMS

SEC. 401. PREFERENCE FOR PERFORMANCE-BASED CONTRACTING.

    (a) In General.--In the administration of the preferences 
established by the Federal Acquisition Regulation under section 821(a) 
of the Floyd D. Spence National Defense Authorization Act for Fiscal 
Year 2001 (as enacted into law by Public Law 106-398; 114 Stat. 1654A-
218), a performance-based service contract or performance-based task 
order may be treated as a contract for the acquisition of commercial 
items if--
            (1) the contract or task order sets forth specifically each 
        task to be performed and, for each task--
                    (A) defines the task in measurable, mission-related 
                terms; and
                    (B) identifies the specific end products or output 
                to be achieved; and
            (2) the source of the services provides similar services to 
        the general public under terms and conditions similar to those 
        offered to the Federal Government.
    (b) Incentive for Use of Performance-Based Service Contracts.--(1) 
A performance-based service contract or performance-based task order of 
a covered agency may be treated as a contract for the acquisition of 
commercial items if--
            (A) the contract or task order is valued at $5,000,000 or 
        less;
            (B) the contract or task order sets forth specifically each 
        task to be performed and, for each task--
                    (i) defines the task in measurable, mission-related 
                terms; and
                    (ii) identifies the specific end products or output 
                to be achieved; and
            (C) the source of the services provides similar services to 
        the general public under terms and conditions similar to those 
        offered to the Federal Government.
    (2) The special simplified procedures provided in the Federal 
Acquisition Regulation pursuant to section 2304(g)(1)(B) of title 10, 
United States Code, and section 303(g)(1)(B) of the Federal Property 
and Administrative Services Act of 1949 (41 U.S.C. 253(g)(1)(B)) shall 
not apply to a performance-based service contract or performance-based 
task order that is treated as a contract for the acquisition of 
commercial items under subsection (a).
    (3) Not later than 2 years after the date of the enactment of this 
Act, the Comptroller General shall submit a report on the 
implementation of this subsection to the congressional defense 
committees, the Committee on Government Reform of the House of 
Representatives, and the Committee on Governmental Affairs of the 
Senate.
    (4) The authority under this subsection shall not apply to 
contracts entered into or task orders issued more than 3 years after 
the date of the enactment of this Act.
    (c) Center of Excellence in Service Contracting.--Not later than 
180 days after the date of the enactment of this Act, the Administrator 
of the Office of Federal Procurement Policy shall establish a center of 
excellence in contracting for services. The center of excellence shall 
assist the acquisition community by identifying, and serving as a 
clearinghouse for, best practices in contracting for services in the 
public and private sectors.
    (d) Definitions.--In this section:
            (1) The term ``performance-based'', with respect to a 
        contract, a task order, or contracting, means that the 
        contract, task order, or contracting, respectively, includes 
        the use of performance work statements that set forth contract 
        requirements in clear, specific, and objective terms with 
        measurable outcomes.
            (2) The term ``commercial item'' has the meaning given the 
        term in section 4(12) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 403(12)).
            (3) The term ``covered agency'' means an executive agency 
        to which title III of the Federal Property and Administrative 
        Services Act of 1949 applies under section 302(a) of that Act 
        (41 U.S.C. 252(a)).

SEC. 402. AUTHORIZATION OF ADDITIONAL CONTRACT TYPES IN FAR PART 12.

    Section 8002(d) of the Federal Acquisition and Streamlining Act of 
1994 (Public Law 103-355; 41 U.S.C. 264 note) is amended--
            (1) in paragraph (1), by striking ``and'';
            (2) by redesignating paragraph (2) as paragraph (3); and
            (3) by inserting after paragraph (1) the following new 
        paragraph (2):
            ``(2) a provision which allows use of time and material, 
        labor-hour or similar contract types, for services in 
        appropriate circumstances;''.

SEC. 403. CLARIFICATION OF COMMERCIAL SERVICES DEFINITION.

    Paragraph 12 of section 4 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 403) is amended--
            (1) in subparagraphs (A), (B), and (C), by inserting ``or 
        service'' after ``item'';
            (2) in subparagraph (D), by inserting ``or services'' after 
        ``items''; and
            (3) by striking subparagraph (F) and redesignating the 
        subsequent subparagraphs accordingly.

SEC. 404. DESIGNATION OF COMMERCIAL BUSINESS ENTITIES.

    (a) In General.--Section 4 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 403) is amended--
            (1) by adding at the end of paragraph (12) the following 
        new subparagraph:
                    ``(H) Products or services produced or provided by 
                a commercial entity.''; and
            (2) by adding at the end the following new paragraph:
            ``(16) The term `commercial entity' means any enterprise 
        whose primary customers are other than the United States 
        Federal Government. In order to qualify as a commercial entity, 
        at least 85 percent (in dollars) of the sales of the enterprise 
        over the past three business years must have been made to 
        nongovernment entities or under part 12 of the Federal 
        Acquisition Regulation.''.
    (b) Comptroller General Review.--The Comptroller General shall 
review the implementation of the amendments made by subsection (a) to 
determine the success of such implementation.

SEC. 405. CONTINUATION OF ELIGIBILITY OF CONTRACTOR FOR AWARD OF 
              INFORMATION TECHNOLOGY CONTRACT AFTER PROVIDING DESIGN 
              AND ENGINEERING SERVICES.

    (a) In General.--Notwithstanding any other provision of law, a 
contractor that provides architectural design and engineering services 
for an information system under an information technology program of an 
executive agency is not, solely by reason of having provided services, 
ineligible for award of a contract for acquisition of information 
technology under that program or for a subcontract under such a 
contract.
    (b) Definitions.--In this section:
            (1) The term ``architectural design and engineering 
        services'' includes, but is not limited to, business process 
        reengineering, determining specifications, developing work 
        statements, determining parameters, identifying and resolving 
        interface problems, developing test requirements, evaluating 
        test data, designing, and supervising design activities.
            (2) The term ``information system'' has the meaning given 
        that term in section 5002 of the Clinger-Cohen Act of 1996 (40 
        U.S.C. 1401).

SEC. 406. COMMERCIAL LIABILITY.

    (a) Limitation.--The Office of Federal Procurement Policy Act (41 
U.S.C. 403 et seq.) is further amended by inserting after section 29 
the following new section:

``SEC. 29A. LIMITATION OF CONTRACTOR LIABILITY.

    ``The Federal Acquisition Regulation shall provide that an 
executive agency shall include in all contracts and solicitations for 
contracts for the acquisition of property or services a provision 
that--
            ``(1) bars payment of consequential damages in cases of 
        contractor liability with respect to the contract; and
            ``(2) places a cap on payment of direct damages in cases of 
        contractor liability with respect to the contract that does not 
        exceed the cost of the service that was not performed or of the 
        product that was not delivered.''.
    (b) Conforming Amendment.--The table of contents of such Act is 
amended by inserting after the item relating to section 29 the 
following new item:

``Sec. 29A. Limitation of contractor liability.''.

         TITLE V--TECHNOLOGY ACCESS IN A COMMERCIAL ENVIRONMENT

SEC. 501. TRADE AGREEMENTS ACT OF 1979 EXEMPTION FOR INFORMATION 
              TECHNOLOGY COMMERCIAL ITEMS.

    (a) In General.--Notwithstanding any other provision of law, in 
order to promote Government access to commercial information 
technology, the restriction on purchasing nondomestic products set 
forth in the Buy American Act (41 U.S.C. 10a) and the prohibition on 
acquiring noneligible foreign products under section 302(a)(1) of the 
Trade Agreements Act of 1979 (Public Law 96-39; 19 U.S.C. 2512(a)(1)), 
shall not apply to the Federal Government's acquisition of commercial 
item information technology (as those terms are defined in section 5002 
of the Clinger-Cohen Act of 1996 (40 U.S.C. 1401)).
    (b) Definition.--Section 5002(3)(B) of the Clinger-Cohen Act of 
1996 (40 U.S.C. 1401(3)(B)) is amended by inserting ``(including 
imaging peripherals, input, output, and storage devices necessary for 
security and surveillance)'' after ``ancillary equipment''.

SEC. 502. AUTHORIZATION FOR ACQUISITION OF INFORMATION TECHNOLOGY BY 
              STATE AND LOCAL GOVERNMENTS THROUGH FEDERAL SUPPLY 
              SCHEDULES.

    (a) Authority To Use Certain Supply Schedules.--Section 201(b) of 
the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 
481(b)) is amended by adding at the end the following new paragraph:
    ``(4)(A) The Administrator may provide for the use by State or 
local governments of Federal supply schedules of the General Services 
Administration for automated data processing equipment (including 
firmware), software, supplies, support equipment, and services (as 
contained in Federal supply classification code group 70).
    ``(B) In any case of the use by a State or local government of a 
Federal supply schedule pursuant to subparagraph (A), participation by 
a firm that sells to the Federal Government through the supply schedule 
shall be voluntary with respect to a sale to the State or local 
government through such supply schedule.
    ``(C) As used in this paragraph, the term `State or local 
government' includes any State, local, regional, or tribal government, 
or any instrumentality thereof (including any accredited public school 
district or public educational institution).''.
    (b) Procedures.--Not later than 30 days after the date of the 
enactment of this Act, the Administrator of General Services shall 
establish procedures to implement section 201(b)(4) of the Federal 
Property and Administrative Services Act of 1949 (as added by 
subsection (a)).
    (c) Report.--Not later than December 31, 2004, the Administrator 
shall submit to the Committee on Government Reform of the House of 
Representatives and the Committee on Governmental Affairs of the Senate 
a report on the implementation and effects of the amendment made by 
subsection (a).

SEC. 503. CERTAIN RESEARCH AND DEVELOPMENT BY CIVILIAN AGENCIES.

    (a) Authority.--Title III of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) is further 
amended by adding at the end the following new section:

``SEC. 319. RESEARCH AND DEVELOPMENT TO FACILITATE DEFENSE AGAINST, OR 
              RECOVERY FROM, TERRORISM OR NUCLEAR, BIOLOGICAL, 
              CHEMICAL, RADIOLOGICAL, OR TECHNOLOGICAL ATTACK.

    ``(a) Authority.--(1) The head of an executive agency may engage in 
basic research, applied research, advanced research, and development 
projects that--
            ``(A) are necessary to the responsibilities of such 
        official's executive agency in the field of research and 
        development; and
            ``(B) have the potential to facilitate defense against, or 
        recovery from, terrorism or nuclear, biological, chemical, 
        radiological, or technological attack.
    ``(2) To engage in projects authorized under paragraph (1), the 
head of an executive agency may exercise the same authority (subject to 
the same restrictions and conditions) as the Secretary of Defense may 
exercise under sections 2358 and 2371 of title 10, United States Code, 
except for subsections (b), (f), and (g) of such section 2371.
    ``(3) The head of an executive agency may exercise authority under 
this subsection only if authorized by the Director of the Office of 
Management and Budget to do so.
    ``(b) Annual Report.--The annual report of the head of an executive 
agency that is required under subsection (h) of section 2371 of title 
10, United States Code, as applied to the head of an executive agency 
by subsection (a), shall be submitted to the Committee on Governmental 
Affairs of the Senate and the Committee on Government Reform of the 
House of Representatives.
    ``(c) Regulations.--The Director of the Office of Management and 
Budget shall prescribe regulations to carry out this section.''.
    (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is further amended by adding at the end the following new 
item:

        ``Sec. 319. Research and development to facilitate defense 
                            against, or recovery from, terrorism or 
                            nuclear, biological, chemical, or 
                            radiological, or technological attack.''.

SEC. 504. AUTHORITY FOR CARRYING OUT CERTAIN PROTOTYPE PROJECTS.

    (a) In General.--The head of an executive agency designated by the 
Director of the Office of Management and Budget to do so may, under the 
authority of section 319 of the Federal Property and Administrative 
Services Act of 1949 (as added by section 503), carry out prototype 
projects that meet the requirements of subparagraphs (A) and (B) of 
subsection (a)(1) of such section in accordance with the same 
requirements and conditions as are provided for carrying out prototype 
projects under section 845 of the National Defense Authorization Act 
for Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2371 note).
    (b) Conforming Authority.--In the application of the requirements 
and conditions of section 845 of the National Defense Authorization Act 
for Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2371 note) to the 
administration of authority under subsection (a)--
            (1) subsection (c) of such section shall apply with respect 
        to prototype projects carried out under this subsection; and
            (2) the Director of the Office of Management and Budget 
        shall perform the function of the Secretary of Defense under 
        subsection (d) of such section.

                   TITLE VI--INFLATIONARY ADJUSTMENTS

SEC. 601. SIMPLIFIED ACQUISITION THRESHOLD INFLATION ADJUSTMENT.

    The Administrator of the Office of Federal Procurement Policy may 
adjust the simplified acquisition threshold (as defined in section 
4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 
403(11))) every three years to account for changes in inflation.
                                 <all>