[Congressional Record Volume 141, Number 35 (Friday, February 24, 1995)]
[Extensions of Remarks]
[Pages E438-E439]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


               THE FEDERAL ACQUISITION REFORM ACT OF 1995

                                 ______


                      HON. WILLIAM F. CLINGER, JR.

                            of pennsylvania

                    in the house of representatives

                       Friday, February 24, 1995
  Mr. CLINGER. Mr. Speaker, today I am introducing legislation, on 
behalf of myself, and National Security Committee Chairman Floyd Spence 
and International Relations Committee Chairman Benjamin Gilman, to 
simplify and streamline the Federal procurement process. This 
legislation will complement the work we started last year with the 
enactment of the Federal Acquisition Streamlining Act of 1994 [FASA].
  There is no doubt that the almost $200 billion spent each year by the 
Federal Government has been done in an inefficient and Byzantine way. 
The current system has cost too much, has involved too much red tape, 
and has ill-served both the taxpayer and industry. FASA was a direct 
attack on a procurement system that had gone haywire--it applied some 
common sense approaches to the bureaucracy to reduce the inefficiencies 
of the system, get some real cost savings for the taxpayer by 
encouraging competition, and reduce the burdens on both Government 
contracting officials and those who sell to them.
  Reforming the Federal procurement system is an extremely difficult 
and complex task because the procurement process is itself arcanely 
difficult and complex. Nevertheless, it is an issue of prime importance 
to both American business and the American taxpayer.
  This bill we are introducing today will serve as the foundation for 
procurement reforms beyond those provided in FASA. The bill includes 
two issues which we were unable to resolve to our satisfaction during 
the development of FASA.
  First, the bill would repeal current provisions of law known as 
``Procurement Integrity'' and replace these provisions with simple 
prohibitions and clearer administrative standards. This proposal was 
developed originally by the Bush administration in 1989 and is 
supported by the Clinton administration.
  The proposal more squarely addresses the same basic concern as 
current law: the unauthorized disclosure and receipt of procurement-
sensitive information. But it does so by focusing on the information to 
be protected, not--as in current law--on the status of persons who 
might disclose or obtain the information or the particular stage of a 
procurement when sensitive information may be created.
  The complexity of the current restrictions have frustrated the 
ability of the contracting workforce--both in Government and industry--
to abide by them. Also, while our bill contains remedies similar to 
those available under the current law, it
 does not rely on the complex system of certifications demanded by 
current law to ensure compliance. We believe that statutory 
certification requirements are unlikely to deter conduct to be 
proscribed. Moreover, the certifications create considerable 
administrative burden that the system can no longer afford.

  Our legislation also would remove remaining agency-specific post-
employment restrictions. These provisions were made unnecessary when 
Congress passed the Ethics Reform Act of 1989 which included 
government-wide conflict of interest laws. The accumulation over time 
of several layers of tailored post-employment restrictions has 
complicated efforts to provide guidance and advice to those who must 
abide by the rules, and has frustrated Federal agencies in attracting 
the highest quality talent from industry and academia.
  Second, our bill repeals a current provision of law which 
disadvantages U.S. companies when selling American products in 
international markets. Current law requires that a fee be paid to the 
U.S. Government on foreign sales of products and technologies developed 
under Government contracts. It may have been an appropriate policy when 
it was originally adopted in the early 1960's as a way of sharing 
development costs with U.S. allies. But today, our allies are our 
competition, and this current policy threatens the future of American 
workers by making it more difficult for their employers to compete for 
business in the world marketplace. The Bush administration recommended 
repeal of this provision, and the Clinton administration currently is 
recommending its repeal.
  Beyond these reforms, we will be calling on the administration, 
industry and other interested parties to provide additional proposals 
which will assist us in developing the remainder of our legislative 
package. Although we do not intend a new procurement reform effort to 
be as comprehensive as FASA, we must continue to push for reforms which 
will make the Federal procurement system work better and cost less.
                                H.R. --

       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 ``Federal Acquisition Reform 
     Act of 1995''.

     SEC. 2. PROCUREMENT INTEGRITY AMENDMENT.

       (a) Amendment of Procurement Integrity Provision.--Section 
     27 of the Office of Federal Procurement Policy Act (41 U.S.C. 
     423) is amended to read as follows:

     ``SEC. 27. RESTRICTIONS ON DISCLOSING AND OBTAINING 
                   CONTRACTOR BID OR PROPOSAL INFORMATION OR 
                   SOURCE SELECTION INFORMATION.

       ``(a) Prohibition on Disclosing Procurement Information.--
     (1) A person described in paragraph (2) shall not, other than 
     as provided by law, knowingly and willfully disclose 
     contractor bid or proposal information or source selection 
     information before the award of a Federal agency procurement 
     contract to which the information relates.
       ``(2) Paragraph (1) applies to any person who--
       ``(A) is a present or former officer or employee of the 
     United States, or a person who is acting or has acted for or 
     on behalf of, or who is advising or has advised the United 
     States with respect to, a Federal agency procurement; and
       ``(B) by virtue of that office, employment, or relationship 
     has or had access to contractor bid or proposal information 
     or source selection information.
       ``(b) Prohibition on Obtaining Procurement Information.--A 
     person shall not, other than as provided by law, knowingly 
     and willfully obtain contractor bid or proposal information 
     or source selection information before the award of a Federal 
     agency procurement contract to which the information relates.
       ``(c) Prohibition on Disclosing or Obtaining Procurement 
     Information in Connection With a Protest.--(1) A person shall 
     not, other than as provided by law, knowingly and willfully 
     violate the terms of a protective order described in 
     paragraph (2) by disclosing or obtaining contractor bid or 
     proposal information or source selection information related 
     to the procurement contract concerned.
       ``(2) Paragraph (1) applies to any protective order issued 
     by the Comptroller General or the board of contract appeals 
     of the General Services Administration in connection with a 
     protest against the award or proposed award of a Federal 
     agency procurement contract.
       ``(d) Penalties and Administrative Actions.--
       ``(1) Criminal penalties.--
       ``(A) Whoever engages in conduct constituting an offense 
     under subsection (a), (b), or (c) shall be imprisoned for not 
     more than one year or fined as provided under title 18, 
     United States Code, or both.
       ``(B) Whoever engages in conduct constituting an offense 
     under subsection (a), (b), or (c) for the purpose of either--
       ``(i) exchanging the information covered by such subsection 
     for anything of value, or
       ``(ii) obtaining or giving anyone a competitive advantage 
     in the award of a Federal agency procurement contract,
     shall be imprisoned for not more than five years or fined as 
     provided under title 18, United States Code, or both.
       ``(2) Civil penalties.--The Attorney General may bring a 
     civil action in the appropriate United States district court 
     against any person who engages in conduct constituting an 
     offense under subsection (a), (b), or (c). Upon proof of such 
     conduct by a preponderance of the evidence, the person is 
     subject to a civil penalty. An individual who engages in such 
     conduct is subject to a civil penalty of not more than 
     $50,000 for each violation plus twice the amount of 
     compensation which the individual received or offered for the 
     prohibited conduct. An organization that engages in such 
     conduct is subject to a civil penalty of not more than 
     $500,000 for each violation plus twice the amount of 
     compensation which the organization received or offered for 
     the prohibited conduct.
       ``(3) Administrative actions.--(A) If a Federal agency 
     receives information that a contractor or a person has 
     engaged in conduct constituting an offense under subsection 
     (a), (b), or (c), the Federal agency shall consider taking 
     one or more of the following actions, as appropriate:
       ``(i) Cancellation of the Federal agency procurement, if a 
     contract has not yet been awarded.
       ``(ii) Rescission of a contract with respect to which--
       ``(I) the contractor or someone acting for the contractor 
     has been convicted for an offense under subsection (a), (b), 
     or (c), or
       ``(II) the head of the agency that awarded the contract has 
     determined, based upon clear and convincing evidence, that 
     the contractor or someone acting for the contractor has 
     engaged in conduct constituting such an offense.
       ``(iii) Initiation of suspension or debarment proceedings 
     for the protection of the Government for the protection of 
     the Government in accordance with procedures in the Federal 
     Acquisition Regulation.
       ``(iv) Initiation of adverse personnel action, pursuant to 
     the procedures in chapter 75 of title 5, United States Code, 
     or other applicable law or regulation.
       [[Page E439]] ``(B) If a Federal agency rescinds a contract 
     pursuant to subparagraph (A)(ii), the United States is 
     entitled to recover, in addition to any penalty prescribed by 
     law, the amount expended under the contract.
       ``(C) For purposes of any suspension or debarment 
     proceedings initiated pursuant to subparagraph (A)(iii), 
     engaging in conduct constituting an offense under subsection 
     (a), (b), or (c) affects the present responsibility of a 
     Government contractor or subcontractor.
       ``(e) Definitions.--As used in this section:
       ``(1) The term `contractor bid or proposal information' 
     means any of the following information submitted to a Federal 
     agency as part of or in connection with a bid or proposal to 
     enter into a Federal agency procurement contract, if that 
     information has not been previously made available to the 
     public or disclosed publicly:
       ``(A) Cost or pricing data (as defined by section 2306a(i) 
     of title 10, United States
      Code, with respect to procurements subject to that section, 
     and section 304A(i) of Federal Property and Administrative 
     Services Act of 1949 (41 U.S.C. 254b(i), with respect to 
     procurements subject to that section).
       ``(B) Indirect costs and direct labor rates.
       ``(C) Proprietary information about manufacturing 
     processes, operations, or techniques marked by the contractor 
     in accordance with applicable law or regulation.
       ``(D) Information marked by the contractor as `contractor 
     bid or proposal information', in accordance with applicable 
     law or regulation.
       ``(2) The term `source selection information' means any of 
     the following information prepared for use by a Federal 
     agency for the purpose of evaluating a bid or proposal to 
     enter into a Federal agency procurement contract, if that 
     information has not been previously made available to the 
     public or disclosed publicly:
       ``(A) Bid prices submitted in response to a Federal agency 
     solicitation for sealed bids, or lists of those bid prices 
     before public bid opening.
       ``(B) Proposed costs or prices submitted in response to a 
     Federal agency solicitation, or lists of those proposed costs 
     or prices.
       ``(C) Source selection plans.
       ``(D) Technical evaluation plans.
       ``(E) Technical evaluations of proposals.
       ``(F) Cost or price evaluations of proposals.
       ``(G) Competitive range determinations that identify 
     proposals that have a reasonable chance of being selected for 
     award of a contract.
       ``(H) Rankings of bids, proposals, or competitors.
       ``(I) The reports and evaluations of source selection 
     panels, boards, or advisory councils.
       ``(J) Other information marked as `source selection 
     information' based on a case-by-case determination by the 
     head of the agency, his designee, or the contracting officer 
     that its disclosure would jeopardize the integrity or 
     successful completion of the Federal agency procurement to 
     which the information relates.
       ``(3) The term `Federal agency' has the meaning provided 
     such term in section 3 of the Federal Property and 
     Administrative Services Act of 1949 (40 U.S.C. 472).
       ``(4) The term `Federal agency procurement' means the 
     acquisition (by using competitive procedures and awarding a 
     contract) of goods or services (including construction) from 
     non-Federal sources by a Federal agency using appropriated 
     funds.
       ``(5) The term `contracting officer' means a person who, by 
     appointment in accordance with applicable regulations, has 
     the authority to enter into a Federal agency procurement 
     contract on behalf of the Government and to make 
     determinations and findings with respect to such a contract.
       ``(6) The term `protest' means a written objection by an 
     interested party to the award or proposed award of a Federal 
     agency procurement contract, pursuant to section 111 of the 
     Federal Property and Administrative Services Act of 1949 (40 
     U.S.C. 759) or subchapter V of chapter 35 of title 31, United 
     States Code.
       ``(f) Limitation on Protests.--No person may file a protest 
     against the award or proposed award of a Federal agency 
     procurement contract alleging an offense under subsection 
     (a), (b), or (c), of this section, nor may the Comptroller 
     General or the board of contract appeals
      of the General Services Administration consider such an 
     allegation in deciding a protest, unless that person 
     reported to the Federal agency responsible for the 
     procurement information that the person believed 
     constituted evidence of the offense no later than 14 days 
     after the person first discovered the possible offense.
       ``(g) Savings Provisions.--This section does not--
       ``(1) restrict the disclosure of information to, or its 
     receipt by, any person or class of persons authorized, in 
     accordance with applicable agency regulations or procedures, 
     to receive that information;
       ``(2) restrict a contractor from disclosing its own bid or 
     proposal information or the recipient from receiving that 
     information;
       ``(3) restrict the disclosure or receipt of information 
     relating to a Federal agency procurement after it has been 
     canceled by the Federal agency before contract award unless 
     the Federal agency plans to resume the procurement;
       ``(4) authorize the withholding of information from, nor 
     restrict its receipt by, Congress, a committee or 
     subcommittee of Congress, the Comptroller General, a Federal 
     agency, or an inspector general of a Federal agency;
       ``(5) authorize the withholding of information from, nor 
     restrict its receipt by, any board of contract appeals of a 
     Federal agency or the Comptroller General in the course of a 
     protest against the award or proposed award of a Federal 
     agency procurement contract; or
       ``(6) limit the applicability of any requirements, 
     sanctions, contract penalties, and remedies established under 
     any other law or regulation.''.
       (b) Regulations.--(1) Proposed revisions to the Federal 
     Acquisition Regulation to implement this section shall be 
     published in the Federal Register not later than 60 days 
     after the date of the enactment of this Act.
       (2) The proposed regulations described in paragraph (1) 
     shall be made available for public comment for a period of 
     not less than 60 days.
       (3) Final regulations shall be published in the Federal 
     Register not later than 150 days after the date of the 
     enactment of this Act.
       (c) Repeals.--(1) The following provisions of law are 
     repealed:
       (A) Sections 2397, 2397a, 2397b, and 2397c of title 10, 
     United States Code.
       (B) Section 281 of title 18, United States Code.
       (C) Subsection (c) of section 32 of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 428).
       (2)(A) The table of sections at the beginning of chapter 
     141 of title 10, United States Code, is amended by striking 
     the items relating to sections 2397, 2397a, 2397b, and 2397c.
       (B) The table of sections at the beginning of chapter 15 of 
     title 18, United States Code, is amended by striking the item 
     relating to section 281.
       (C) Section 32 of the Office of Federal Procurement Policy 
     Act (41 U.S.C. 428) is amended by redesignating subsections 
     (d), (e), (f), and (g) as subsections (c), (d), (e), and (f), 
     respectively.

     SEC. 3. INTERNATIONAL COMPETITIVENESS.

       (a) Repeal of Provision Relating to Research, Development, 
     and Production Costs.--Section 21(e) of the Arms Export 
     Control Act (22 U.S.C. 2761(e)) is amended--
       (1) by inserting ``and'' after the semicolon at the end of 
     paragraph (1)(A);
       (2) by striking out subparagraph (B) of paragraph (1);
       (3) by redesignating subparagraph (C) of paragraph (1) as 
     subparagraph (B);
       (4) by striking out paragraph (2); and
       (5) by redesignating paragraph (3) as paragraph (2).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall be effective with respect to sales agreements pursuant 
     to sections 21 and 22 of the Arms Export Control Act (22 
     U.S.C. 2761 and 2762) entered into on or after the date of 
     the enactment of this Act.
     

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