[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 4374 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
2d Session
S. 4374
To prevent price gouging at the Department of Defense.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 9, 2022
Ms. Warren introduced the following bill; which was read twice and
referred to the Committee on Armed Services
_______________________________________________________________________
A BILL
To prevent price gouging at the Department of Defense.
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 ``Stop Price Gouging the Military
Act''.
SEC. 2. STRENGTHENING TRUTH IN NEGOTIATIONS ACT PROVISIONS.
(a) Required Cost or Pricing Data and Certification.--Section
3702(a)(1) of title 10, United States Code, is amended by striking
``only expected to receive one bid shall be required'' and replacing
with ``only expected to have one offeror, or for which award of a cost-
reimbursement contract is contemplated regardless of the number of
offers received, shall be required''.
(b) Exceptions.--Section 3703(a) of title 10, United States Code,
is amended--
(1) in paragraph (1)(A), by striking ``adequate
competition'' and all that follows through ``bids'' and
inserting ``adequate price competition, except for the award of
a cost-reimbursement contract, that results in at least two
responsive and viable competing offerors''; and
(2) in paragraph (2), by inserting ``based on adequate
price competition that results in at least two responsive and
responsible offers'' after ``commercial service''.
(c) Conforming Amendment Related to Civilian Contracts.--Section
3503(a)(2) of title 41, United States Code is by inserting after
``commercial service'' the following: ``based on adequate price
competition that results in at least two responsive and responsible
offers''.
SEC. 3. REVISION OF DEFINITION OF TERM ``COMMERCIAL ITEM'' FOR PURPOSES
OF FEDERAL PROCUREMENT STATUTES PROVIDING PROCEDURES FOR
PROCUREMENT OF COMMERCIAL ITEMS.
(a) Elimination of ``of a Type'' Criterion.--Section 103 of title
41, United States Code, is amended by striking ``of a type'' each place
it appears.
(b) Elimination of Items and Services Merely Offered for Sale,
Lease, or License.--
(1) Items.--Section 103(1)(B) of title 41, United States
Code, is amended by striking ``, or offered for sale, lease, or
license,''.
(2) Services.--Section 103a(2) of title 41, United States
Code, is amended by striking ``offered and''.
SEC. 4. PROGRESS PAYMENT INCENTIVE PILOT.
(a) Pilot Program.--The Secretary of Defense, acting through the
Under Secretary of Defense for Acquisition and Sustainment, shall
establish and implement a pilot program, to be known as the ``Progress
Payment Incentive Pilot Program'', to make accelerated progress
payments contingent upon responsiveness to Department of Defense goals
for effectiveness, efficiency, and increasing small business contract
opportunities.
(b) Purpose.--The purpose of the pilot program is to reward
Department of Defense contractors who meet contract delivery dates,
respond to Department solicitations for required certified cost or
pricing data, meet small business contracting goals, and provide
subcontracting opportunities for AbilityOne contracts.
(c) Progress Payments.--
(1) Limitations for large contractors.--Except as provided
under paragraph (2), under the pilot program, the Department of
Defense may not award to large business contractors progress
payments in excess of 50 percent.
(2) Exceptions.--The Department of Defense may increase the
rate of progress payments, up to a total of 95 percent, by the
following percentages:
(A) 10 percent if the relevant division of the
contractor met contract delivery dates for contract end
items and contract data requirement lists or
performance milestone schedule, as the case may be, at
least 95 percent of the time during the preceding
Government fiscal year.
(B) 10 percent if the division does not have open
level III or IV corrective action requests.
(C) 7.5 percent if all applicable contractor
business systems are acceptable, without significant
deficiencies.
(D) 10 percent if at least 95 percent of the time
during the preceding Government fiscal year, when
responding to solicitations that required submission of
certified cost or pricing data, the division met the
due date in the request for proposal.
(E) 5 percent if the contractor discloses first
tier subcontractor data, the prime contractor's
beneficial owners, and total compensation for recipient
executives.
(F) 5 percent if the contractor has met its small
business subcontracting goals during the preceding
Government fiscal year.
(G) 3 percent if the contractor has provided
subcontracting opportunities for the blind and severely
disabled.
(d) Definitions.--In this section:
(1) Beneficial owners.--The term ``beneficial owner'' has
the meaning given the term in section 847 of the National
Defense Authorization Act for Fiscal Year 2020 (Public Law 116-
92; 133 Stat. 1505; 10 U.S.C. 2509 note).
(2) Compensation for recipient executives.--The term
``compensation for recipient executives'' refers to the names
and total compensation of the five most highly compensated
officers of the entity pursuant to section 2(b)(1) of the
Federal Funding Accountability and Transparency Act of 2006
(Public Law 109-282; 31 U.S.C. 6101 note).
(3) First tier subcontractor.--The term ``first tier
subcontractor'' means a subcontractor who has a subcontract
directly with the prime contractor.
(4) Large defense contractor.--The term ``large defense
contractor'' means a contractor (other than an institute of
higher education or a federally funded research and development
center) that received more than $10,000,000 in annual revenue
from the Department of Defense contracts or licenses in any of
the previous three years.
(5) Progress payments.--The term ``progress payments''
means payments provided for under section 3804 of title 10,
United States Code.
SEC. 5. DISCLOSURE BY LARGE DEFENSE CONTRACTORS.
(a) Annual Reporting.--Not later than 60 days after the date of the
enactment of this Act, the Secretary of Defense shall amend the
Department of Defense Supplement to the Federal Acquisition Regulation
to provide that large defense contractors shall be required to annually
report to the Under Secretary of Defense for Acquisition and
Sustainment the following information with regard to the covered year,
as compared with the year preceding that covered year:
(1) The percentage change in the volume of goods or
services sold and the percentage change in the average sales
price of those goods or services, which shall be broken down by
material product categories, when relevant, and presented in a
tabular format.
(2) The gross margins of the large defense contractor,
which shall be broken down by material product categories, when
relevant, and presented in a tabular format.
(3) Presented in tabular format, the share of the increase
in revenue of the large defense contractor that is attributable
to--
(A) a change in the cost of goods or services sold
by the large defense contractor; and
(B) a change in the volume of goods or services
sold by the large defense contractor.
(4) The percentage change in the costs of the large defense
contractor, which shall be broken down by category and
presented in tabular format.
(5) In dollars, the change in the costs of the large
defense contractor, which shall be presented in tabular format.
(6) A detailed narrative disclosure of the pricing strategy
of the large defense contractor, which shall include--
(A) an explanation for any increase in the gross
margins of material product categories, including--
(i) all material causes for such an
increase;
(ii) an explanation of how each such
material cause affected such an increase; and
(iii) a description of the relative
importance of each such material cause with
respect to such an increase;
(B) an explanation for the decisions made by the
large defense contractor with respect to the prices of
goods and services sold by the large defense
contractor;
(C) if the large defense contractor increased
prices at a rate that was greater than the rate at
which the costs incurred by the large defense
contractor increased, the rationale and objectives for
increasing prices in such a manner; and
(D) a description of conditions under which the
large defense contractor plans to modify pricing after
the date on which the large defense contractor submits
the report.
(b) Publication.--The Under Secretary of Defense for Acquisition
and Sustainment shall annually publish on a publicly available internet
website the previous year's reports received under subsection (a).
(c) Penalties.--A knowing failure to disclose or update information
in accordance with subsection (a) may result in--
(1) entry of the violation in the database for Federal
agency contract and grant officers and suspension and debarment
officials defined in section 2313 of title 41, United States
Code;
(2) imprisonment for not more than 5 years or a fine under
title 18, United States Code, or both;
(3) a civil fine of not more than $200,000, depending on
the extent and gravity of the violation;
(4) liability pursuant to section 3729 of title 31, United
States Code; or
(5) suspension or debarment.
(d) Large Defense Contractor Defined.--In this section, the term
``large defense contractor'' means a contractor (other than an
institute of higher education or a federally funded research and
development center) that--
(1) received more than $10,000,000 in annual revenue from
the Department of Defense contracts or licenses in any of the
previous three years; and
(2) earned more than 20 percent of its total annual revenue
from Department of Defense contracts or licenses in any of the
previous three fiscal years.
<all>