[Congressional Record Volume 153, Number 31 (Saturday, February 17, 2007)]
[Senate]
[Pages S2205-S2206]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself, Mr. Lieberman, Mr. Coleman, Mr. 
        Carper, and Mrs. McCaskill):
  S. 680. A bill to ensure proper oversight and accountability in 
Federal contracting, and for other purposes; to the Committee on 
Homeland Security and Governmental Affairs.
  Ms. COLLINS. Mr. President. I rise to introduce the Accountability in 
Government Contracting Act of 2007. This bill, which I am delighted is 
cosponsored by Senators Lieberman, Coleman, Carper, and McCaskill, will 
improve our stewardship of taxpayers' money by reforming contracting 
practices, strengthening the procurement workforce, reforming our IG 
community, and including other provisions to combat waste, fraud, and 
abuse. It will also provide increased oversight and transparency in the 
Federal Government's dealings with its contractors.
  The Office of Federal Procurement Policy estimates that the Federal 
Government purchased approximately $410 billion in goods and services 
last year--more than a 50 percent increase in Federal purchases since 
2001.
  As the administration's proposed budget suggests, the costs of war, 
natural disaster, homeland-security precautions, and other vital 
programs will drive those expenditures to even higher levels in the 
years ahead.
  Each of us in this Chamber knows that the Federal Government's 
prodigious purchasing can create abundant opportunities for fraud, 
waste, and abuse. Whether the problem is purchases of unusable trailers 
for hurricane victims, shoddy construction of schools and clinics in 
Iraq, or abuse of purchase cards by Government employees, we must do a 
better job of protecting taxpayer dollars and delivering better 
acquisition outcomes.
  Recognizing that imperative requires that we also recognize the 
obstacles in our path. Such obstacles include resource constraints, 
inexcusable rushes to award contracts, poor program administration, and 
perverse incentives.
  Other challenges to fair, effective, and open competition and 
oversight include inadequate documentation requirements, overuse of 
letter contracts that fail to include all the critical terms until 
after performance is complete, excessive tiering of subcontractors, and 
insufficient publicly available data on Federal contracts.
  Too often, the problem of waste, fraud, and abuse stimulates floods 
of outrage and magic-bullet proposals that lean more toward symbolic 
gestures than practical reforms. The Accountability in Government 
Contracting Act of 2007 confines itself to sensible, practical reforms 
that will really make a difference.
  Competition for Government contracts clearly helps to control costs, 
encourage innovation, and keep contractors sharp. It is basic 
economics--and it's the law, as Congress provided in the Competition in 
Contracting Act of 1984. This bill promotes more open competition for 
Government contracts--a positive step for both contractors and 
taxpayers.
  Unfortunately, the tide has been running the wrong way. Competition, 
intended to produce savings, has sharply diminished. While the dollar 
volume of Federal contracting has nearly doubled since the year 2000, a 
recent report concluded that less than half of all ``contract 
actions''--new contracts and payments against existing contracts--are 
now subject to full and open competition: 48 percent in 2005, compared 
to 79 percent in 2001. This is inexcusable.
  The dangers inherent in sole-source contracting are on full display 
in Iraq. For example, the Kellogg, Brown, and Root unit of Halliburton 
designed and was awarded a multi-year sole-source contract for the 
Restore Iraqi Oil project. A Defense Department audit concluded that 
the firm later over-charged the government $61 million for fuel. 
Incredibly, the Army Corps of Engineers permitted the overcharge.
  According to a January 2007 Congressional Research Service report, 
Kellogg, Brown, and Root's contract work in Iraq included billing for 
$52 million to administer a project that entailed only $13 million in 
actual project work, piping unpurified water into showers and laundries 
used by our troops, and billing for 6 months of failure while using an 
unsuitable technique to lay oil pipeline beneath a river.
  As these examples suggest, we need more competition, less sole source 
contracting, and tougher management in Federal contracts. The bill I 
introduce today extends a practice adopted in the fiscal year 2002 
Defense Authorization Act government-wide, mandating competition for 
each task or delivery order over $100,000, the Simplified Acquisition 
Threshold.
  The bill would promote more informed and effective competition for 
orders over $5 million by requiring more information in the statement 
of work. At minimum, contractors would be given a clear statement of 
agency requirements, a reasonable response period, and disclosure of 
significant evaluation factors to be applied. For awards to be made on 
a best-value rather than lowest-cost basis, the agency must provide a 
written statement on the basis of the award and on the trade-off 
between quality and cost.
  To increase the quality of competitive bids, the bill mandates post-
award debriefings for task or delivery orders valued over $5 million. 
Debriefings improve the transparency of the Federal acquisition process 
by providing information that contractors can use to improve future 
offers.
  Competition helps secure good value for taxpayers' money, but there 
are exceptions, and they should be the exception and not the rule, when 
sole-source contracting is appropriate. Sole-source contracting 
heightens the importance of effective oversight, but oversight is often 
hampered by a lack of publicly available information on sole-source 
contract awards.
  The bill addresses that problem by requiring publication at the 
``FedBizOpps'' website of notices of all sole-source task-or-delivery 
orders above $100,000, within 10 business days after the award.
  I shall note some other important provisions of the bill.
  The bill will rein in the practice of awarding contracts missing key 
terms, such as price, scope or schedule, and then failing to supply 
those terms until the contractor delivers the good or service--thereby 
placing all risk of failure on the government. In Iraq and Katrina 
contracting, we saw the perils of failing to supply the ``missing 
term'' promptly. For example, the Special Inspector General for Iraq 
Reconstruction last July identified 194 individual task orders valued 
at $3.4 billion that were classified as ``undefinitized contract 
actions.''
  This is entirely too much money and too many contract actions to 
linger in this status. The bill corrects this flaw by requiring 
contracting officers to unilaterally determine all missing terms, if 
not mutually agreed upon, within 180 days or before 40 percent of the 
work is performed, with the approval of the head of the contracting 
agency, and subject to the contract disputes process.
  Contracting for Hurricane Katrina and Iraq has also involved 
excessive tiers of subcontractors, driving up costs and complicating 
administration. The bill extends a tiering-control rule we placed in 
the Department of Homeland Security appropriations bill, preventing 
contractors from using subcontracts for more than 65 percent of the 
cost of the contract, not including overhead and profit, unless the 
head of agency determines that exceptional circumstances apply.
  To further decrease the Government's reliance on large single-source

[[Page S2206]]

service contracts, the bill strengthens the preference for multiple 
awards of Indefinite Delivery/Indefinite Quantity, or IDIQ, contracts 
by prohibiting single awards of IDIQ contracts for services over $100 
million. The Government would therefore have at least two contractors 
for these large service contracts, who would then be required to 
compete with each other for all task and/or delivery orders, unless 
strict grounds for exceptions applied.
  To ensure that agencies' increasing use of interagency contracting is 
producing value, we require the Office of Federal Procurement Policy to 
collect and make publicly available data on the numbers, scope, users, 
and rationales for these contracts.
  But increased competition will not solve all our ills. We must also 
address the lack of personnel to award and administer Federal 
contracts. We moved into the 21st century with 22 percent fewer Federal 
civilian acquisition personnel than we had at the start of the 1990s. 
The Department of Defense has been disbursing enormous amounts of money 
to contractors since the first gulf war, but has reduced its 
acquisition workforce by more than 50 percent from 1994 to 2005.
  Among the current, attenuated Federal acquisition workforce, nearly 
40 percent are eligible to retire by the end of this fiscal year. 
Meanwhile, the number and scale of Federal purchases continue to rise, 
making this human-capital crisis even more dire.
  Therefore, the bill would help Federal agencies recruit, retain, and 
develop an adequate acquisition workforce. Its mechanisms include 
acquisition internship programs, promoting contracting careers, a 
government-industry exchange program; an Acquisition Fellowship Program 
with scholarships for graduate study, requirements for human-capital 
strategic plans by chief acquisition officers, and a new senior-
executive-level position in the Office of Federal Procurement Policy to 
manage this initiative.
  In keeping with earlier Senate action, the bill also targets wasteful 
use of purchase cards by seeking better analysis of purchase-card use 
to identify fraud as well as potential savings, negotiate discounts, 
collect and disseminate best practices, and address small-business 
concerns in micro-purchases.
  Such information is clearly necessary. In a hearing before the 
Homeland Security and Governmental Affairs Committee, GAO detailed how 
a FEMA employee provided his purchase card number to a vendor, who 
agreed to provide the government 20 flat-bottom boats. Besides the 
fact that FEMA agreed to pay $208,000 for the boats, about twice the 
retail price, the vendor used the FEMA employee's purchase card 
information to make two unauthorized transactions totaling about 
$30,000. Neither the cardholder nor the approving official disputed the 
unauthorized charges. As if this was not bad enough, FEMA failed to 
gain title to the boats. It did not even enter 12 of the 20 boats into 
their property system. Eventually, one of the boats was later found 
back in the possession of the original owner.

  The bill restricts the de-facto outsourcing of program-management 
responsibility when a large contractor becomes a ``lead systems 
integrator'' for a multi-part project. The bill requires OFPP to craft 
a government-wide definition of lead systems integrators and study 
their use by various agencies.
  The bill also specifically addresses demonstrated problems in 
contracting for assistance programs in Afghanistan. Numerous reports of 
fraud, waste, and abuse in that country, such as the shockingly poor 
construction of schools and clinics by the Louis Berger Group, echo the 
findings of the SIGIR in Iraq.
  The Louis Berger Group was awarded a contract to build schools and 
clinics to help restore a decent life for the people of Afghanistan. Of 
the 105 structures they erected before their work was stopped, 103 
suffered roof collapses after the first snowfall. Here was a case that 
combined a waste of taxpayer funds, damage to the U.S. image we were 
trying to enhance, and an actual danger to the people we were trying to 
help.
  This bill requires the Administrator of USAID to revise the strategy 
for the agency's assistance program in Afghanistan to include 
measurable goals, specific time frames, resource levels, delineated 
responsibilities, external factors bearing on success, and a schedule 
for program evaluations. All of these things should have been done from 
the outset, not after billions in Federal funds were expended.
  Title II of the bill introduces targeted reforms of the Inspector 
General system. IGs play a vital role in preventing and detecting 
waste, fraud, and abuse. We must attract more of these specialists to 
government service, and make the career attractive.
  One vital provision in our bill might appear to run counter to that 
aim but the provision, in fact, preserves the independence of our 
Inspector Generals. It prohibits IGs from accepting any cash award or 
cash bonus from the agency that they are auditing or investigating. 
This codifies the honorable practice of most IGs of declining to accept 
such awards because of the inherent conflict of interest they present.
  The balancing mechanism for that prohibition is to increase the 
salaries of Presidentially appointed IGs from Senior Executive Service 
Level III to Level IV. This also corrects a common anomaly wherein 
Deputy IGs collecting performance pay earn more than their supervising 
IG. The bill removes the inequity and the disincentive to accepting a 
promotion.
  The bill makes other reforms that will increase the quality of IG 
reports and audits. For example, it clarifies that IGs' subpoena power 
extends to electronic documents. It also sets out professional 
qualifications for the designated Federal entity IGs, or DFE IGs. These 
IGs work in our smaller Federal agencies and are not subject to 
confirmation. This is no excuse for this failure to supply minimum 
professional qualifications for these important positions.
  This bill also corrects a serious problem that has left millions of 
fraudulently disbursed dollars un-recouped. Currently DFE IGs do not 
have the power to institute lawsuits to recover claims under $150,000, 
even if they have a compelling case. This is unacceptable. DFE IGs need 
the power to pick this ``low hanging fruit,'' whose cumulative cost can 
be huge. The bill corrects this problem by giving DFE IGs the same 
authority that Presidentially appointed IGs have to investigate and 
report false claims, and to recoup losses resulting from fraud below 
$150,000.
  I believe this summary shows how the Accountability in Government 
Contracting Act of 2007 combines practical, workable, and targeted 
reforms to improve a complex process that expends hundreds of billions 
of taxpayer dollars every year. It will pay recurring dividends for 
years to come in higher-quality proposals, in more efficiently 
administered projects, and in better results for our citizens. I urge 
my colleagues to support it.
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