[Congressional Record Volume 146, Number 123 (Thursday, October 5, 2000)]
[Senate]
[Pages S9948-S9949]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN:
  S. 3166. A bill to amend the Clinger-Cohen Act of 1996 to provide 
individual federal agencies and the executive branch as a whole with 
increased incentives to use the share-in-savings program under that 
Act, to ease the use of such program, and for other purposes; to the 
Committee on Governmental Affairs.


information technology share-in-savings program improvement act of 2000

  Mr. BINGAMAN. Mr. President, today I'm introducing a bill designed to 
lower the cost of the government's information technology systems and 
improve how those systems serve our citizens by encouraging greater use 
of a ``share-in-savings'' approach to contracting for information 
technology (IT).
  Under a share-in-savings approach, the government contracts with a 
company to provide an improved, lower cost IT service and the company 
pays the up-front costs of the project, which is not the usual 
practice. In return, the contractor gets paid a portion of the money 
saved by the government under the new arrangement. Essentially, the 
contractor bears the capital costs needed for the government to save 
some money and has a strong incentive to decrease the government's 
costs because they get paid a portion of any savings.
  Although this approach to IT contracting is authorized as a pilot 
program under the Clinger-Cohen Act, I understand the executive branch 
has not made much use of this approach to date. Hence, I believe there 
are opportunities for greater creativity in this area if we give the 
agencies greater incentives.
  Basically, my bill does three things. First, and most importantly, it 
gives agencies an incentive to try a share-in-savings approach by 
letting them keep up to half the government's net savings to use for 
additional IT projects, rather than having all the net savings going 
back to the Treasury. It's just human nature that if you ask someone to 
do something risky--like a new IT system--but all the benefits go 
elsewhere, they're not going to be very inclined to do it. That is, 
unless they get to keep some of the benefits to improve their own 
operations--which is what this bill let's them do. The point here is 
that the more agency managers actually are willing to use this 
approach, the more money the taxpayer will save in the long run.

  There's precedent for this with regard to certain Energy Savings 
Performance Contracts. Under a provision applicable to the Department 
of Defense, local base commanders can keep a portion of the savings 
from those contracts to purchase more energy saving equipment or even 
for morale and recreation purposes.
  Second, my bill gives the executive branch as a whole an incentive to 
try share-in-savings contracting for IT by allowing the pilot program 
to graduate to a regular authority once a significant number of 
projects have been done, the approach has been found to be useful, and 
guidance on how to use the authority has been issued. This gives the 
top levels of the executive branch a goal to push toward.
  Finally, my bill will ease implementation of share-in-savings 
contracting by allowing agency program managers to approve the 
projects, thereby giving them greater autonomy and streamlining the 
selection process. Currently, share-in-savings IT projects must be 
approved by the Administrator of Federal Procurement, a very high level 
in the executive branch.
  In sum, my bill will encourage greater use of the share-in-savings 
approach to IT contracting under the Clinger-Cohen Act by giving the 
agencies a portion of the savings to reinvest; the executive branch a 
goal; and the program managers more autonomy.

  I had originally planned to introduce this as an amendment to the 
Treasury, Postal Appropriations bill. But, because it doesn't look like 
we'll have a chance to really debate that bill this year, I've decided 
to introduce this bill today to get my proposal before the Senate.
  Now, to give some credit where credit is due, I got interested in 
this topic because of a piece I saw in Roll Call on E-Government by 
Patricia McGinnis of the Council for Excellence in Government. In it 
she mentioned the idea of letting agencies retain some of the IT 
savings they achieve in order to reinvest it in more IT.
  I also understand that the Governmental Affairs Committee recently 
put up a web site to discuss potential e-government policies and 
legislation. And, I was glad to learn that the share-in-savings 
approach to IT is one of its topics.
  So, I hope the Governmental Affairs committee will take a thorough 
look at the ideas in my bill. I look forward to working with them to 
find new ways to save the taxpayer money while improving the services 
they are provided.
  Mr. President, I ask unanimous consent that the text of my bill and a 
letter from Ms. McGinnis in support of the amendment I'd planned be 
included in the Record at the conclusion of my remarks.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3166

       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 ``Information Technology 
     Share-in-Savings Program Improvement Act of 2000''.

     SEC. 2. PURPOSES.

       The purposes of this Act are to provide individual federal 
     agencies and the executive branch as a whole with increased 
     incentives to use the share-in-savings program under the 
     Clinger-Cohen Act of 1996 and to ease the use of such 
     program.

     SEC. 3. EXPANSION OF AUTHORITY.

       Section 5311 of the Clinger-Cohen Act of 1996 (divisions D 
     and E of Public Law 104-106; 110 Stat. 692; 40 U.S.C. 1491) 
     is amended--
       (1) in subsection (a)--
       (A) by striking ``the heads of two executive agencies to 
     carry out '' and inserting ``heads of executive agencies to 
     carry out a total of five projects under'';
       (B) by striking ``and'' at the end of paragraph (1);
       (C) by striking the period at the end of paragraph (2) and 
     inserting ``; and''; and
       (D) by adding at the end the following:
       ``(3) encouraging the use of the contracting and sharing 
     approach described in paragraphs (1) and (2) by allowing the 
     head of the executive agency conducting a project under the 
     pilot program--
       ``(A) to retain, out of the appropriation accounts of the 
     executive agency in which savings computed under paragraph 
     (2) are realized as a result of the project, up to the amount 
     equal to half of the excess of--
       ``(i) the total amount of the savings, over
       ``(ii) the total amount of the portion of the savings paid 
     to the private sector source for such project under paragraph 
     (2); and
       ``(B) to use the retained amount to acquire additional 
     information technology.'';
       (2) in subsection (b)--
       (A) by inserting ``a project under'' after ``authorized to 
     carry out''; and
       (B) by striking ``carry out one project and''; and
       (3) by striking subsection (c) and inserting the following:
       ``(c) Evolution Beyond Pilot Program.--(1) The 
     Administrator may provide general authority to the heads of 
     executive agencies to use a share-in-savings contracting 
     approach to the acquisition of information technology 
     solutions for improving mission-related or administrative 
     processes of the Federal Government if--
       ``(A) after reviewing the experience under the five 
     projects carried out under the pilot program under subsection 
     (a), the Administrator finds that the approach offers the 
     Federal Government an opportunity to improve its use of 
     information technology and to reduce costs; and
       ``(B) issues guidance for the exercise of that authority.
       ``(2) For the purposes of paragraph (1), a share-in-savings 
     contracting approach provides for contracting as described in 
     paragraph (1) of subsection (a) together with the sharing and 
     retention of amounts saved as described in paragraphs (2) and 
     (3) of that subsection.
       ``(3) In exercising the authority provided to the 
     Administrator in paragraph (1), the Administrator shall 
     consult with the Administrator for the Office of Information 
     and Regulatory Affairs.
       ``(d) Availability of Retained Savings.--Amounts retained 
     by the head of an executive agency under subsection (a)(3) or 
     subsection (c) shall, without further appropriation, be 
     available for the executive agency for the acquisition of 
     information technology and shall remain available until 
     expended. Amounts so retained from any appropriation of the 
     executive agency not otherwise available for the acquisition 
     of information technology shall be transferred to any 
     appropriation of the executive agency that is available for 
     such purpose.''.
                                  ____

                                        The Council for Excellence


                                                in Government,

                                  Washington, DC, August 10, 2000.
     Sen. Jeff Bingaman,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Bingaman: The Council for Excellence in 
     Government applauds your interest in legislation to encourage 
     federal

[[Page S9949]]

     agencies to conduct pilot ``share-in-savings'' partnerships 
     under the Clinger-Cohen Act. We agree that making greater use 
     of ``share-in-savings'' projects will lead to successful 
     public-private joint ventures that can produce savings for 
     the agencies and better results for the American people.
       In particular, we think the approach to encouraging greater 
     use of ``share-in-savings'' partnerships embodied in your 
     planned amendment to this year's Treasury and General 
     Government appropriations bill--allowing agencies to retain 
     some of the savings, and the pilots to easily graduate to a 
     regular authority--deserves serious consideration by 
     Congress.
       As you move forward, you may also want to look at the work 
     of the General Service Administration's (GSA) Federal 
     Technology Center. Ken Buck, Director of Business 
     Innovations, Office of the Commissioner at GSA, is very 
     knowledgeable about the successful methods of contracting and 
     procurement using this approach.
       In fact, the Council is working with GSA to develop case 
     studies of best practices using share-in-savings methods for 
     use by federal agencies. We will share that work with you as 
     soon as it is available.
       Again, thanks for your leadership on this very important 
     issue, which will not only promote e-government but also 
     excellence in government.
           Sincerely,
                                                Patricia McGinnis,
                                                President and CEO.
                                 ______