House Report 108-117 - SERVICES ACQUISITION REFORM ACT OF 2003

[House Report 108-117]
[From the U.S. Government Publishing Office]

108th Congress Rept. 108-117
HOUSE OF REPRESENTATIVES
1st Session Part 1

======================================================================

SERVICES ACQUISITION REFORM ACT OF 2003

_______

May 19, 2003.--Ordered to be printed

_______

Mr. Tom Davis of Virginia, from the Committee on Government Reform,
submitted the following

R E P O R T

together with

MINORITY VIEWS

[To accompany H.R. 1837]

[Including cost estimate of the Congressional Budget Office]

The Committee on Government Reform, to whom was referred the
bill (H.R. 1837) to improve the Federal acquisition workforce
and the process for the acquisition of services by the Federal
Government, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.

CONTENTS

Page
Committee Statement and Views.................................... 22
Section-by-Section............................................... 31
Explanation of Amendments........................................ 40
Committee Consideration.......................................... 40
Rollcall Votes................................................... 40
Application of Law to the Legislative Branch..................... 48
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 48
Statement of General Performance Goals and Objectives............ 48
Constitutional Authority Statement............................... 48
Unfunded Mandate Statement....................................... 48
Committee Estimate............................................... 48
Budget Authority and Congressional Budget Office Cost Estimate... 48
Changes in Exisiting Law Made by the Bill as Reported............ 51
Minority Views................................................... 101

The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Services Acquisition
Reform Act of 2003''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Executive agency defined.

TITLE I--ACQUISITION WORKFORCE AND TRAINING

Sec. 101. Definition of acquisition.
Sec. 102. Acquisition workforce training fund.
Sec. 103. Government-industry exchange program.
Sec. 104. Acquisition workforce recruitment program.
Sec. 105. 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. Chief Acquisition Officers Council.
Sec. 203. Statutory and regulatory review.

Subtitle B--Other Acquisition Improvements

Sec. 211. Extension of authority to carry out franchise fund programs.
Sec. 212. Agency acquisition protests.
Sec. 213. Improvements in contracting for architectural and engineering
services.
Sec. 214. Authorization of telecommuting for Federal contractors.
Sec. 215. Procedural requirements for civilian agencies relating to
products of Federal Prison Industries.

TITLE III--CONTRACT INCENTIVES

Sec. 301. 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 commercial contract types.
Sec. 403. Clarification of commercial services definition.
Sec. 404. Designation of commercial business entities.

TITLE V--OTHER MATTERS

Sec. 501. Authority to enter into certain procurement-related
transactions and to carry out certain prototype projects.
Sec. 502. Amendments relating to Federal emergency procurement
flexibility.
Sec. 503. Authority to make inflation adjustments to simplified
acquisition threshold.
Sec. 504. Technical corrections related to duplicative amendments.
Sec. 505. Exemption from limitations on procurement of foreign
information technology that is a commercial item.
Sec. 506. Prohibition on use of quotas.
Sec. 507. Public disclosure of noncompetitive contracting for the
reconstruction of infrastructure in Iraq.
Sec. 508. Applicability of certain provisions to sole source contracts
for goods and services treated as commercial items.

SEC. 2. EXECUTIVE AGENCY DEFINED.

In this Act, the term ``executive agency'' has the meaning given that
term in section 4(1) of the Office of Federal Procurement Policy Act
(41 U.S.C. 403(1)), unless specifically stated otherwise.

TITLE I--ACQUISITION WORKFORCE AND 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 the process of acquiring, with
appropriated funds, by contract for purchase or lease,
property or services (including construction) that
support the missions and goals of an executive agency,
from the point at which the requirements of the
executive agency are established in consultation with
the chief acquisition officer of the executive agency;
and
``(B) includes--
``(i) the process of 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 financing:
``(vii) management and measurement of
contract performance through final delivery and
payment; and
``(viii) technical and management functions
directly related to the process of fulfilling
agency requirements 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 roles of the Federal Government; and
(2) acquires new skills and a new perspective to enable it to
contribute effectively in the changing environment of the 21st
century.
(b) Establishment of Fund.--Section 37 of the Office of Federal
Procurement Policy Act (41 U.S.C. 433) is amended 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. The Administrator shall
manage the fund through the Federal Acquisition Institute to
support the training of the acquisition workforce of the
executive agencies other than the Department of Defense. The
Administrator shall consult with the Administrator for Federal
Procurement Policy in managing the fund.
``(B) There shall be credited to the acquisition workforce
training fund 5 percent of the fees collected by executive
agencies under the following contracts:
``(i) Governmentwide task and delivery-order
contracts entered into under sections 2304a and 2304b
of title 10, United States Code, or sections 303H and
303I of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 253h and 253i).
``(ii) Governmentwide contracts for the acquisition
of information technology as defined in section 11101
of title 40, United States Code, and multiagency
acquisition contracts for such technology authorized by
section 11314 of such title.
``(iii) Multiple-award schedule contracts entered
into by the Administrator of General Services.
``(C) The head of an executive agency that administers a
contract described in subparagraph (B) shall remit to the
General Services Administration the amount required to be
credited to the fund with respect to such contract at the end
of each quarter of the fiscal year.
``(D) The Administrator of General Services, through 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).
``(E) Amounts credited to the fund shall be in addition to
funds requested and appropriated for education and training
referred to in paragraph (1).
``(F) Amounts credited to 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:

``CHAPTER 38--ACQUISITION PROFESSIONAL EXCHANGE PROGRAM

``Sec.
``3801. Definitions.
``3802. General provisions.
``3803. Assignment of employees to private sector organizations.
``3804. Assignment of employees from private sector organizations.
``3805. Reporting requirement.
``3806. Regulations.

``Sec. 3801. 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 of an
agency to a private sector organization without a
change of position from the agency that employs the
individual, or
``(B) the assignment or loan of an employee of a
private sector organization to an agency without a
change of position from the private sector organization
that employs the individual,
whichever is appropriate in the context in which such term is
used.

``Sec. 3802. General provisions

``(a) Assignment Authority.--On request from 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 assignment of an
employee of the agency to a private sector organization or an employee
of a private sector organization to the agency. An eligible employee is
an individual who--
``(1) works in the field of Federal acquisition or
acquisition management;
``(2) is considered an exceptional performer by the
individual's current employer; and
``(3) is expected to assume increased acquisition management
responsibilities in the future.
An employee of an agency shall be eligible to participate in this
program only if the employee is employed at the GS-11 level or above
(or equivalent) and is serving under a career or career-conditional
appointment or an appointment of equivalent tenure in the excepted
service.
``(b) Agreements.--Each agency that exercises its authority under
this chapter shall provide for a written agreement between the agency
and the employee concerned regarding the terms and conditions of the
employee's assignment. 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 assignment; 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 agency from which assigned) the
employee shall be liable to the United States for payment of
all expenses of the assignment.
An amount under paragraph (2) shall be treated as a debt due the United
States.
``(c) Termination.--Assignments may be terminated by the agency or
private sector organization concerned for any reason at any time.
``(d) Duration.--Assignments under this chapter shall be for a period
of between 6 months and 1 year, and may be extended in 3-month
increments for a total of not more than 1 additional year, except that
no assignment under this chapter may commence after the end of the 5-
year period beginning on the date of the enactment of this chapter.
``(e) Assistance.--The Administrator for Federal Procurement Policy,
by agreement with the Office of Personnel Management, may assist in the
administration of this chapter, including by maintaining lists of
potential candidates for assignment under this chapter, establishing
mentoring relationships for the benefit of individuals who are given
assignments under this chapter, and publicizing the program.
``(f) Considerations.--In exercising any authority under this
chapter, an agency shall take into consideration--
``(1) the need to ensure that small business concerns are
appropriately represented with respect to the assignments
described in sections 3803 and 3804, respectively; and
``(2) how assignments described in section 3803 might best be
used to help meet the needs of the agency for the training of
employees in acquisition management.

``Sec. 3803. Assignment of employees to private sector organizations

``(a) In General.--An employee of an agency assigned to a private
sector organization under this chapter is deemed, during the period of
the assignment, to be on detail to a regular work assignment in his
agency.
``(b) Coordination With Chapter 81.--Notwithstanding any other
provision of law, an employee of an agency assigned to a private sector
organization under this chapter is entitled to retain coverage, rights,
and benefits under subchapter I of chapter 81, and employment during
the assignment is deemed employment by the United States, 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, then, the
amount of such payment or benefit shall be credited against any
compensation otherwise payable under subchapter I of chapter 81.
``(c) Reimbursements.--The assignment of an employee to a private
sector organization under this chapter 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 as apply with respect to an employee of a
Federal agency or a State or local government under section 3375, and
for the pay, or a 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) Tort Liability; Supervision.--The Federal Tort Claims Act and
any other Federal tort liability statute apply to an employee of an
agency assigned to a private sector organization under this chapter.
The supervision of the duties of an employee of an agency so assigned
to a private sector organization may be governed by an agreement
between the agency and the organization.
``(e) Small Business Concerns.--
``(1) In general.--The head of each agency shall take such
actions as may be necessary to ensure that, of the assignments
made under this chapter from such agency to private sector
organizations in each year, at least 20 percent are to small
business concerns.
``(2) Definitions.--For purposes of this subsection--
``(A) the term `small business concern' means a
business concern that satisfies the definitions and
standards specified by the Administrator of the Small
Business Administration under section 3(a)(2) of the
Small Business Act (as from time to time amended by the
Administrator);
``(B) the term `year' refers to the 12-month period
beginning on the date of the enactment of this chapter,
and each succeeding 12-month period in which any
assignments under this chapter may be made; and
``(C) the assignments `made' in a year are those
commencing in such year.
``(3) Reporting requirement.--An agency which fails to comply
with paragraph (1) in a year shall, within 90 days after the
end of such year, submit a report to the Committees on
Government Reform and Small Business of the House of
Representatives and the Committees on Governmental Affairs and
Small Business of the Senate. The report shall include--
``(A) the total number of assignments made under this
chapter from such agency to private sector
organizations in the year;
``(B) of that total number, the number (and
percentage) made to small business concerns; and
``(C) the reasons for the agency's noncompliance with
paragraph (1).
``(4) Exclusion.--This subsection shall not apply to an
agency in any year in which it makes fewer than 5 assignments
under this chapter to private sector organizations.

``Sec. 3804. Assignment of employees from private sector organizations

``(a) In General.--An employee of a private sector organization
assigned to an agency under this chapter is deemed, during the period
of the assignment, to be on detail to such agency.
``(b) Terms and Conditions.--An employee of a private sector
organization assigned to an agency under this chapter--
``(1) may continue to receive pay and benefits from the
private sector organization from which he is assigned;
``(2) is deemed, notwithstanding subsection (a), to be an
employee of the agency for the purposes of--
``(A) chapter 73;
``(B) sections 201, 203, 205, 207, 208, 209, 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 statute;
``(E) the Ethics in Government Act of 1978;
``(F) section 1043 of the Internal Revenue Code of
1986; and
``(G) section 27 of the Office of Federal Procurement
Policy Act;
``(3) may not have access to any trade secrets or to any
other nonpublic information which is of commercial value to the
private sector organization from which he is assigned; and
``(4) is subject to such regulations as the President may
prescribe.
The supervision of an employee of a private sector organization
assigned to an agency under this chapter may be governed by agreement
between the agency and the private sector organization concerned. Such
an assignment 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.
``(c) Coordination With Chapter 81.--An employee of a private sector
organization assigned to an agency under this chapter 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, then, the amount of such payment or benefit shall be
credited against any compensation otherwise payable under subchapter I
of chapter 81.
``(d) Prohibition Against Charging Certain Costs to the Federal
Government.--A private sector organization may not charge the Federal
Government, as direct or indirect costs under a Federal contract, the
costs of pay or benefits paid by the organization to an employee
assigned to an agency under this chapter for the period of the
assignment.

``Sec. 3805. Reporting requirement

``(a) In General.--The Office of Personnel Management shall, not
later than April 30 and October 31 of each year, prepare and submit to
the Committee on Government Reform of the House of Representatives and
the Committee on Governmental Affairs of the Senate a semiannual report
summarizing the operation of this chapter during the immediately
preceding 6-month period ending on March 31 and September 30,
respectively.
``(b) Content.--Each report shall include, with respect to the 6-
month period to which such report relates--
``(1) the total number of individuals assigned to, and the
total number of individuals assigned from, each agency during
such period;
``(2) a brief description of each assignment included under
paragraph (1), including--
``(A) the name of the assigned individual, as well as
the private sector organization and the agency
(including the specific bureau or other agency
component) to or from which such individual was
assigned;
``(B) the respective positions to and from which the
individual was assigned, including the duties and
responsibilities and the pay grade or level associated
with each; and
``(C) the duration and objectives of the individual's
assignment; and
``(3) such other information as the Office considers
appropriate.
``(c) Publication.--A copy of each report submitted under subsection
(a)--
``(1) shall be published in the Federal Register; and
``(2) shall be made publicly available on the Internet.
``(d) Agency Cooperation.--On request of the Office, agencies shall
furnish such information and reports as the Office may require in order
to carry out this section.

``Sec. 3806. Regulations

``The Director of the Office of Personnel Management shall prescribe
regulations for the administration of this chapter.''.
(b) Report.--Not later than 4 years after the date of the enactment
of this Act, the General Accounting Office shall prepare and 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
operation of chapter 38 of title 5, United States Code (as added by
this section). Such report shall include--
(1) an evaluation of the effectiveness of the program
established by such chapter; and
(2) a recommendation as to whether such program should be
continued (with or without modification) or allowed to lapse.
(c) Clerical Amendment.--The table of chapters at the beginning of
part III of title 5, United States Code, is amended by inserting after
the item relating to chapter 37 the following:

``38. Acquisition Professional Exchange Program............. 3801''.
(d) Coordination with Acquisition Workforce Provisions of Office of
Federal Procurement Policy Act.--Section 37 of the Office of Federal
Procurement Policy Act (41 U.S.C. 433) is amended by adding at the end
the following new subsection:
``(i) Authority to Detail Employees to Non-Federal Employers.--(1) In
carrying out the provisions of this section, the Administrator, by
agreement with the Director of the Office of Personnel Management, may
provide for a program under which a Federal employee may be detailed to
a non-Federal employer. The Administrator, by agreement with the
Director of the Office of Personnel Management, shall prescribe
regulations for such program, including the conditions for service and
duties as the Administrator considers necessary.
``(2) An assignment described in section 3803 of title 5, United
States Code, may not be made unless a program under paragraph (1) is
established, and the assignment is made in accordance with the
requirements of such program.''.
(e) Ethics Provisions.--
(1) One-year restriction on certain communications.--Section
207(c)(2)(A)(v) of title 18, United States Code, is amended by
inserting ``or 38'' after ``chapter 37''.
(2) Disclosure of confidential information.--Section 1905 of
title 18, United States Code, is amended by inserting ``or 38''
after ``chapter 37''.
(3) Contract advice.--Section 207(l) of title 18, United
States Code, is amended--
(A) in the subsection heading, by striking
``Details.--'' and inserting ``Detailees.--''; and
(B) by inserting ``or 38'' after ``chapter 37''.
(4) Restriction on disclosure of procurement information.--
Section 27 of the Office of Federal Procurement Policy Act (41
U.S.C. 423) is amended in the last sentence of subsection
(a)(1) by inserting ``or 38'' after ``chapter 37''.
(f) Technical and Conforming Amendments.--
(1) Amendments to Title 5, United States Code.--Title 5,
United States Code, is amended--
(A) in section 3111(d), by inserting ``or 38'' after
``chapter 37'';
(B) in section 7353(b)(4), by inserting ``or 38''
after ``chapter 37''.
(2) Amendment to title 18, united states code.--Section
209(g) of title 18, United States Code, is amended--
(A) in paragraph (1), by inserting ``or 38'' after
``chapter 37''; and
(B) by amending paragraph (2) to read as follows:
``(2) For purposes of this subsection, the term `agency'--
``(A) with respect to assignments under chapter 37 of title
5, means an agency (as defined in section 3701 of title 5) and
the Office of the Chief Technology Officer of the District of
Columbia; and
``(B) with respect to assignments under chapter 38 of title
5, means an agency (as defined by section 3801 of title 5).''.
(3) Eligibility for thrift savings plan.--Section
125(c)(1)(D) of Public Law 100-238 (101 Stat. 1757; 5 U.S.C.
8432 note) is amended by inserting ``or 38'' after ``chapter
37''.

SEC. 104. ACQUISITION WORKFORCE RECRUITMENT PROGRAM.

(a) Authority To Carry Out Program.--For purposes of sections 3304,
5333, and 5753 of title 5, United States Code, the head of a department
or agency of the United States (including the Secretary of Defense) may
determine that certain Federal acquisition positions are ``shortage
category'' positions in order to recruit and appoint directly to
positions of employment in the department or agency highly qualified
persons, such as any person who--
(1) holds a bachelor's degree from an accredited institution
of higher education;
(2) holds, from an accredited law school or an accredited
institution of higher education--
(A) a law degree; or
(B) a masters or equivalent degree in business
administration, public administration, or systems
engineering; or
(3) has significant experience with commercial acquisition
practices, terms, and conditions.
(b) Requirements.--The exercise of authority to take a personnel
action under this section shall be subject to policies prescribed by
the Office of Personnel Management that govern direct recruitment,
including policies requiring appointment of a preference eligible who
satisfies the qualification requirements.
(c) Termination of Authority.--The head of a department or agency may
not appoint a person to a position of employment under this section
after September 30, 2007.
(d) Report.--Not later than March 31, 2007, the Administrator for
Federal Procurement Policy shall submit to Congress a report on the
implementation of this section. The report shall include--
(1) the Administrator's assessment of the efficacy of the
exercise of the authority provided in this section in
attracting employees with unusually high qualifications to the
acquisition workforce; and
(2) any recommendations considered appropriate by the
Administrator on whether the authority to carry out the program
should be extended.

SEC. 105. ARCHITECTURAL AND ENGINEERING ACQUISITION WORKFORCE.

The Administrator for Federal Procurement Policy, in consultation
with the Secretary of Defense, the Administrator of General Services,
and the Director of the Office of Personnel Management, shall develop
and implement a plan to ensure that the Federal Government maintains
the necessary capability with respect to the acquisition of
architectural and engineering services to--
(1) ensure that Federal Government employees have the
expertise to determine agency requirements for such services;
(2) establish priorities and programs (including acquisition
plans);
(3) establish professional standards;
(4) develop scopes of work; and
(5) award and administer 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. CHIEF ACQUISITION OFFICERS.

``(a) Establishment of Agency Chief Acquisition Officers.--The head
of each executive agency (other than the Department of Defense) shall
appoint or designate a non-career employee as Chief Acquisition Officer
for the agency, who shall--
``(1) have acquisition management as that official's primary
duty; and
``(2) advise and assist the head of the executive agency and
other agency officials to ensure that the mission of the
executive agency is achieved through the management of the
agency's acquisition activities.
``(b) Authority and Functions of Agency Chief Acquisition Officers.--
The functions of each Chief Acquisition Officer shall include--
``(1) monitoring the performance of acquisition activities
and acquisition programs of the executive agency, evaluating
the performance of those programs on the basis of applicable
performance measurements, and advising the head of the
executive agency regarding the appropriate business strategy to
achieve the mission of the executive agency;
``(2) increasing the use of full and open competition in the
acquisition of property and services by the executive agency by
establishing policies, procedures, and practices that ensure
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 laws 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;
``(5) developing and maintaining an acquisition career
management program in the executive agency to ensure that there
is an adequate professional workforce; and
``(6) as part of the strategic planning and performance
evaluation process required under section 306 of title 5,
United States Code, and sections 1105(a)(28), 1115, 1116, and
9703 of title 31, United States Code--
``(A) assessing 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
such requirements, developing strategies and specific
plans for hiring, training, and professional
development; and
``(C) reporting to the head of the executive agency
on the progress made in improving acquisition
management capability.''.
(2) The item relating to section 16 in the table of contents in
section 1(b) of such Act is amended to read as follows:

``Sec. 16. Chief Acquisition Officers.''.

(b) References to Senior Procurement Executive.--
(1) Amendment to the office of federal policy act.--
(A) Subsections (a)(2)(A) and (b) of section 20 of
the Office of Federal Procurement Policy Act (41 U.S.C.
418(a)(2)(A), (b)) are amended by striking ``senior
procurement executive'' each place it appears and
inserting ``Chief Acquisition Officer''.
(B) Subsection (c)(2)(A)(ii) of section 29 of the
Office of Federal Procurement Policy Act (41 U.S.C.
425(c)(2)(A)(ii)) is amended by striking ``senior
procurement executive'' and inserting ``Chief
Acquisition Officer''.
(C) Subsection (c) of section 37 of the Office of
Federal Procurement Policy Act (41 U.S.C. 433(c)) is
amended--
(i) by striking ``Senior Procurement
Executive'' in the heading and inserting
``Chief Acquisition Officer''; and
(ii) by striking ``senior procurement
executive'' each place it appears and inserting
``Chief Acquisition Officer''.
(2) Amendment to title iii of the federal property and
administrative services act of 1949.--Sections 302C(b) and
303(f)(1)(B)(iii) of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 252c, 253) are amended by
striking ``senior procurement executive'' each place it appears
and inserting ``Chief Acquisition Officer''.
(3) Amendment to title 10, united states code.--The following
sections of title 10, United States Code are amended by
striking ``senior procurement executive'' each place it appears
and inserting ``Chief Acquisition Officer'':
(A) Section 133(c)(1).
(B) Subsections (d)(2)(B) and (f)(1) of section 2225.
(C) Section 2302c(b).
(D) Section 2304(f)(1)(B)(iii).
(E) Section 2359a(i).
(4) References.--Any reference to a senior procurement
executive of a department or agency of the United States in any
other provision of law or regulation, document, or record of
the United States shall be deemed to be a reference to the
Chief Acquisition Officer of the department or agency.
(c) Technical Correction.--Section 1115(a) of title 31, United States
Code, is amended by striking ``section 1105(a)(29)'' and inserting
``section 1105(a)(28)''.

SEC. 202. CHIEF ACQUISITION OFFICERS COUNCIL.

(a) Establishment of Council.--The Office of Federal Procurement
Policy Act (41 U.S.C. 403 et seq.) is amended by inserting after
section 16 the following new section:

``SEC. 16A. CHIEF ACQUISITION OFFICERS COUNCIL.

``(a) Establishment.--There is established in the executive branch a
Chief Acquisition Officers Council.
``(b) Membership.--The members of the Council shall be as follows:
``(1) The Deputy Director for Management of the Office of
Management and Budget, who shall act as Chairman of the
Council.
``(2) The Administrator for Federal Procurement Policy.
``(3) The chief acquisition officer of each executive agency.
``(4) The Under Secretary of Defense for Acquisition,
Technology, and Logistics.
``(5) Any other officer or employee of the United States
designated by the Chairman.
``(c) Leadership; Support.--(1) The Administrator for Federal
Procurement Policy shall lead the activities of the Council on behalf
of the Deputy Director for Management.
``(2)(A) The Vice Chairman of the Council shall be selected by the
Council from among its members.
``(B) The Vice Chairman shall serve a 1-year term, and may serve
multiple terms.
``(3) The Administrator of General Services shall provide
administrative and other support for the Council.
``(d) Principal Forum.--The Council is designated the principal
interagency forum for monitoring and improving the Federal acquisition
system.
``(e) Functions.--The Council shall perform functions that include
the following:
``(1) Develop recommendations for the Director of the Office
of Management and Budget on Federal acquisition policies and
requirements.
``(2) Share experiences, ideas, best practices, and
innovative approaches related to Federal acquisition.
``(3) Assist the Administrator in the identification,
development, and coordination of multiagency projects and other
innovative initiatives to improve Federal acquisition.
``(4) Promote effective business practices that ensure the
timely delivery of best value products to the Federal
Government and achieve appropriate public policy objectives.
``(5) Further integrity, fairness, competition, openness, and
efficiency in the Federal acquisition system.
``(6) Work with the Office of Personnel Management to assess
and address the hiring, training, and professional development
needs of the Federal Government related to acquisition.
``(7) Work with the Administrator and the Federal Acquisition
Regulatory Council to promote the business practices referred
to in paragraph (4) and other results of the functions carried
out under this subsection.''.
(b) Clerical Amendment.--The table of contents in section 1(b) of
such Act is amended by inserting after the item relating to section 16
the following new item:

``Sec. 16A. Chief Acquisition Officers Council.''.

SEC. 203. STATUTORY AND REGULATORY REVIEW.

(a) Establishment.--Not later than 90 days after the date of the
enactment of this Act, the Administrator for Federal Procurement Policy
shall establish an advisory panel to review laws and regulations
regarding the use of commercial practices, performance-based
contracting, the performance of acquisition functions across agency
lines of responsibility, and the use of Governmentwide contracts.
(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--
(1) consult with the Secretary of Defense, the Administrator
of General Services, the Committees on Armed Services and
Government Reform of the House of Representatives, and the
Committees on Armed Services and Governmental Affairs of the
Senate, and
(2) 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 effective and appropriate use of
commercial practices and performance-based contracting; and
(2) make any recommendations for the repeal or amendment of
such laws or regulations that are considered necessary as a
result of such review--
(A) to eliminate any provisions in such laws or
regulations that are unnecessary for the effective,
efficient, and fair award and administration of
contracts for the acquisition by the Federal Government
of goods and services;
(B) to ensure the continuing financial and ethical
integrity of acquisitions by the Federal Government;
and
(C) to protect the best interests of the Federal
Government.
(d) Report.--Not later than one year after the establishment of the
panel, the panel shall submit to the Administrator and to the
Committees on Armed Services and Government Reform of the House of
Representatives and the Committees on Armed Services and Governmental
Affairs of the Senate a report containing a detailed statement of the
findings, conclusions, and recommendations of the panel.

Subtitle B--Other Acquisition Improvements

SEC. 211. EXTENSION OF AUTHORITY TO CARRY OUT FRANCHISE FUND PROGRAMS.

Section 403(f) of the Federal Financial Management Act of 1994
(Public Law 103-356; 31 U.S.C. 501 note) is amended by striking
``October 1, 2003'' and inserting ``October 1, 2006''.

SEC. 212. AGENCY 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.--An interested party may protest an acquisition of
supplies or services by an agency based on an alleged violation of an
acquisition law or regulation, and a decision regarding such alleged
violation shall be made by the agency in accordance with this section.
``(b) Restriction on Contract Award Pending Decision.--(1) Except as
provided in paragraph (2), a contract may not be awarded by an agency
after a protest concerning the acquisition has been submitted under
this section and while the protest is pending.
``(2) The head of the acquisition activity responsible for the award
of the contract may authorize the award of a contract, notwithstanding
pending protest under this section, upon making a written finding that
urgent and compelling circumstances do not allow for waiting for a
decision on the protest.
``(c) Restriction on Contract Performance Pending Decision.--(1)
Except as provided in paragraph (2), performance of a contract may 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 under this section before the later of--
``(A) the date that is 10 days after the date of contract
award; or
``(B) the date that is five days after an agency debriefing
date offered to an unsuccessful offeror for any debriefing that
is requested and, when requested, is required, under section
2305(b)(5) of this title.
``(2) The head of the acquisition activity responsible for the award
of a contract may authorize performance of the contract notwithstanding
a pending protest under this section upon making a written finding that
urgent and compelling circumstances do not allow for waiting for a
decision on the protest.
``(d) Deadline for Decision.--The head of an agency shall issue a
decision on a protest under this section not later than the date that
is 20 working days after the date on which the protest is submitted to
such head of an agency.
``(e) Construction.--Nothing in this section shall affect the right
of an interested party to file a protest with the Comptroller General
under subchapter V of chapter 35 of title 31 or in the United States
Court of Federal Claims.
``(f) Definitions.--In this section, the terms `protest' and
`interested party' have the meanings given such terms in section 3551
of title 31.''.
(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.--Title III of the Federal Property and
Administrative Services Act of 1949 is amended by inserting after
section 303M (41 U.S.C. 253m) the following new section:

``SEC. 303N. PROTESTS.

``(a) In General.--An interested party may protest an acquisition of
supplies or services by an executive agency based on an alleged
violation of an acquisition law or regulation, and a decision regarding
such alleged violation shall be made by the agency in accordance with
this section.
``(b) Restriction on Contract Award Pending Decision.--(1) Except as
provided in paragraph (2), a contract may not be awarded by an agency
after a protest concerning the acquisition has been submitted under
this section and while the protest is pending.
``(2) The head of the acquisition activity responsible for the award
of a contract may authorize the award of the contract, notwithstanding
a pending protest under this section, upon making a written finding
that urgent and compelling circumstances do not allow for waiting for a
decision on the protest.
``(c) Restriction on Contract Performance Pending Decision.--(1)
Except as provided in paragraph (2), performance of a contract may 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 under this section before the later of--
``(A) the date that is 10 days after the date of contract
award; or
``(B) the date that is five days after an agency debriefing
date offered to an unsuccessful offeror for any debriefing that
is requested and, when requested, is required, under section
303B(e) of this title.
``(2) The head of the acquisition activity responsible for the award
of a contract may authorize performance of the contract notwithstanding
a pending protest under this section upon making a written finding that
urgent and compelling circumstances do not allow for waiting for a
decision on the protest.
``(d) Deadline for Decision.--The head of an executive agency shall
issue a decision on a protest under this section not later than the
date that is 20 working days after the date on which the protest is
submitted to the executive agency.
``(e) Construction.--Nothing in this section shall affect the right
of an interested party to file a protest with the Comptroller General
under subchapter V of chapter 35 of title 31, United States Code, or in
the United States Court of Federal Claims.
``(f) Definitions.--In this section, the terms `protest' and
`interested party' have the meanings given such terms in section 3551
of title 31, United States Code.''.
(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) in the case of a protest of the same matter regarding
such contract that is submitted under section 2305b of title 10
or section 303N of the Federal Property and Administrative
Services Act of 1949, the date that is 5 days after the date on
which a decision on that protest is issued.''.

SEC. 213. IMPROVEMENTS IN CONTRACTING FOR ARCHITECTURAL AND ENGINEERING
SERVICES.

(a) Clarification of Definition of Surveying and Mapping.--(1)
Section 1102 of title 40, United States Code, is amended by adding at
the end the following new paragraph:
``(4) Surveying and mapping.--The term `surveying and
mapping' means services performed by professionals such as
surveyors, photogrammetrists, hydrographers, geodesists, or
cartographers in the collection, storage, retrieval, or
dissemination of graphical or digital data to depict natural or
manmade physical features, phenomena, or boundaries of the
earth and any information related to such data, including any
such data that comprises a survey, map, chart, geographic
information system, remotely sensed image or data, or an aerial
photograph.''.
(2) The Federal Acquisition Regulation shall be revised to include
the definition added by subsection (a) of this section.
(b) 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:
``(4) The selection and competition requirements described in
subsection (a) shall apply to any contract for architectural and
engineering services (including surveying and mapping services) that is
entered into by the head of an agency (as such term is defined in
section 2302 of this title).''.
(c) Architectural and Engineering Services.--Architectural and
engineering services (as defined in section 1102 of title 40, United
States Code) shall not be offered under multiple-award schedule
contracts entered into by the Administrator of General Services or
under Governmentwide task and delivery-order contracts entered into
under sections 2304a and 2304b of title 10, United States Code, or
sections 303H and 303I of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 253h and 253i) unless such services--
(1) are performed under the direct supervision of a
professional engineer licensed in a State; and
(2) are awarded in accordance with the selection procedures
set forth in chapter 11 of title 40, United States Code.

SEC. 214. 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 Regulatory Council shall amend 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) to permit
telecommuting by employees of Federal Government contractors in the
performance of contracts entered into with executive agencies.
(b) Content of Amendment.--The regulation issued pursuant to
subsection (a) shall, at a minimum, provide that solicitations for the
acquisition of property or services may not set forth any requirement
or evaluation criteria that would--
(1) render an offeror ineligible to enter into a contract on
the basis of the inclusion of a plan of the offeror to permit
the offeror's employees to telecommute; or
(2) reduce the scoring of an offer on the basis of the
inclusion in the offer of a plan of the offeror to permit the
offeror's employees to telecommute, unless the contracting
officer concerned first--
(A) determines that the requirements of the agency,
including the security requirements of the agency,
cannot be met if the telecommuting is permitted; and
(B) documents in writing the basis for that
determination.
(c) GAO Report.--Not later than one year after the date on which the
regulation required by subsection (a) is published in the Federal
Register, the Comptroller General shall submit to Congress--
(1) an evaluation of--
(A) the conformance of the regulations with law; and
(B) the compliance by executive agencies with the
regulations; and
(2) 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 4 of the Office of Federal
Procurement Policy Act (41 U.S.C. 403).

SEC. 215. PROCEDURAL REQUIREMENTS FOR CIVILIAN AGENCIES RELATING TO
PRODUCTS OF FEDERAL PRISON INDUSTRIES.

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

``SEC. 318. PRODUCTS OF FEDERAL PRISON INDUSTRIES: PROCEDURAL
REQUIREMENTS.

``(a) Market Research.--Before purchasing a product listed in the
latest edition of the Federal Prison Industries catalog under section
4124(d) of title 18, United States Code, the head of an executive
agency shall conduct market research to determine whether the Federal
Prison Industries product is comparable to products available from the
private sector that best meet the executive agency's needs in terms of
price, quality, and time of delivery.
``(b) Competition Requirement.--If the head of the executive agency
determines that a Federal Prison Industries product is not comparable
in price, quality, or time of delivery to products available from the
private sector that best meet the executive agency's needs in terms of
price, quality, and time of delivery, the agency head shall use
competitive procedures for the procurement of the product or shall make
an individual purchase under a multiple award contract. In conducting
such a competition or making such a purchase, the agency head shall
consider a timely offer from Federal Prison Industries.
``(c) Implementation by Head of Executive Agency.--The head of an
executive agency shall ensure that--
``(1) the executive agency does not purchase a Federal Prison
Industries product or service unless a contracting officer of
the agency determines that the product or service is comparable
to products or services available from the private sector that
best meet the agency's needs in terms of price, quality, and
time of delivery; and
``(2) Federal Prison Industries performs its contractual
obligations to the same extent as any other contractor for the
executive agency.
``(d) Market Research Determination Not Subject to Review.--A
determination by a contracting officer regarding whether a product or
service offered by Federal Prison Industries is comparable to products
or services available from the private sector that best meet an
executive agency's needs in terms of price, quality, and time of
delivery shall not be subject to review pursuant to section 4124(b) of
title 18.
``(e) Performance as a Subcontractor.--(1) A contractor or potential
contractor of an executive agency may not be required to use Federal
Prison Industries as a subcontractor or supplier of products or
provider of services for the performance of a contract of the executive
agency by any means, including means such as--
``(A) a contract solicitation provision requiring a
contractor to offer to make use of products or services of
Federal Prison Industries in the performance of the contract;
``(B) a contract specification requiring the contractor to
use specific products or services (or classes of products or
services) offered by Federal Prison Industries in the
performance of the contract; or
``(C) any contract modification directing the use of products
or services of Federal Prison Industries in the performance of
the contract.
``(2) In this subsection, the term `contractor', with respect to a
contract, includes a subcontractor at any tier under the contract.
``(f) Protection of Classified and Sensitive Information.--The head
of an executive agency may not enter into any contract with Federal
Prison Industries under which an inmate worker would have access to--
``(1) any data that is classified;
``(2) any geographic data regarding the location of--
``(A) surface and subsurface infrastructure providing
communications or water or electrical power
distribution;
``(B) pipelines for the distribution of natural gas,
bulk petroleum products, or other commodities; or
``(C) other utilities; or
``(3) any personal or financial information about any
individual private citizen, including information relating to
such person's real property however described, without the
prior consent of the individual.
``(g) Definitions.--In this section:
``(1) The term `competitive procedures' has the meaning given
such term in section 4(5) of the Office of Federal Procurement
Policy Act (41 U.S.C. 403(5)).
``(2) The term `market research' means obtaining specific
information about the price, quality, and time of delivery of
products available in the private sector through a variety of
means, which may include--
``(A) contacting knowledgeable individuals in
government and industry;
``(B) interactive communication among industry,
acquisition personnel, and customers; and
``(C) interchange meetings or pre-solicitation
conferences with potential offerors.''.

TITLE III--CONTRACT INCENTIVES

SEC. 301. SHARE-IN-SAVINGS INITIATIVES.

(a) Defense Contracts.--Section 2332 of title 10, United States Code,
is amended to read as follows:

``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 in which
the Government awards a contract to improve mission-related or
administrative processes or to accelerate the achievement of its
mission and share with the contractor in savings achieved through
contract performance.
``(2)(A) Except as provided in subparagraph (B), a share-in-savings
contract shall be awarded for a period of not more than five years.
``(B) A share-in-savings contract may be awarded for a period greater
than five years, but not more than 10 years, if the head of the agency
determines in writing prior to award of the contract that--
``(i) the level of risk to be assumed and the investment to
be undertaken by the contractor is likely to inhibit the
government from obtaining the needed performance competitively
at a fair and reasonable price if the contract is limited in
duration to a period of five years or less; and
``(ii) the performance to be acquired is likely to continue
for a period of time sufficient to generate reasonable benefit
for the government.
``(3) Contracts awarded pursuant to the authority of this section
shall, to the maximum extent practicable, be performance-based
contracts that identify objective outcomes and contain performance
standards that will be used to measure achievement and milestones that
must be met before payment is made.
``(4) Contracts awarded pursuant to the authority of this section
shall include a provision containing a quantifiable baseline that is to
be the basis upon which a savings share ratio is established that
governs the amount of payment a contractor is to receive under the
contract. Before commencement of performance of such a contract, the
chief acquisition officer of the agency shall determine in writing that
the terms of the provision are quantifiable and will likely yield value
to the Government.
``(5)(A) The head of the 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. Except as provided in subparagraph (B), savings shall be
credited to the appropriation or fund against which charges were made
to carry out the contract.
``(B) Amounts retained by the agency under this subsection shall--
``(i) without further appropriation, remain available until
expended; and
``(ii) be applied first to fund any contingent liabilities
associated with share-in-savings procurements that are not
fully funded.
``(b) Cancellation and Termination.--(1) 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--
``(A) appropriations available for the performance of the
contract;
``(B) appropriations available for acquisition of the type of
property or services procured under the contract, and not
otherwise obligated; or
``(C) funds subsequently appropriated for payments of costs
of cancellation or termination, subject to the limitations in
paragraph (3).
``(2) 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.
``(3) The head of an agency may enter into share-in-savings contracts
under this section in any given fiscal year even if funds are not made
specifically available for the full 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 and
the following conditions are met regarding the funding of cancellation
and termination liability:
``(A) The amount of unfunded contingent liability for the
contract does not exceed the lesser of--
``(i) 50 percent of the estimated costs of a
cancellation or termination; or
``(ii) $10,000,000.
``(B) Unfunded contingent liability in excess of $5,000,000
has been approved by the Director of the Office of Management
and Budget or the Director's designee.
``(c) 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 head of 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.''.
(b) Other Contracts.--Section 317 of the Federal Property and
Administrative Services Act of 1949 is amended to read as follows:

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

``(a) Authority To Enter Into Share-in-Savings Contracts.--(1) The
head of an executive agency may enter into a share-in-savings contract
in which the Government awards a contract to improve mission-related or
administrative processes or to accelerate the achievement of its
mission and share with the contractor in savings achieved through
contract performance.
``(2)(A) Except as provided in subparagraph (B), a share-in-savings
contract shall be awarded for a period of not more than five years.
``(B) A share-in-savings contract may be awarded for a period greater
than five years, but not more than 10 years, if the head of the agency
determines in writing prior to award of the contract that--
``(i) the level of risk to be assumed and the investment to
be undertaken by the contractor is likely to inhibit the
government from obtaining the needed performance competitively
at a fair and reasonable price if the contract is limited in
duration to a period of five years or less; and
``(ii) the performance to be acquired is likely to continue
for a period of time sufficient to generate reasonable benefit
for the government.
``(3) Contracts awarded pursuant to the authority of this section
shall, to the maximum extent practicable, be performance-based
contracts that identify objective outcomes and contain performance
standards that will be used to measure achievement and milestones that
must be met before payment is made.
``(4) Contracts awarded pursuant to the authority of this section
shall include a provision containing a quantifiable baseline that is to
be the basis upon which a savings share ratio is established that
governs the amount of payment a contractor is to receive under the
contract. Before commencement of performance of such a contract, the
chief acquisition officer of the agency shall determine in writing that
the terms of the provision are quantifiable and will likely yield value
to the Government.
``(5)(A) The head of the 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. Except as provided in subparagraph (B), savings shall be
credited to the appropriation or fund against which charges were made
to carry out the contract.
``(B) Amounts retained by the agency under this subsection shall--
``(i) without further appropriation, remain available until
expended; and
``(ii) be applied first to fund any contingent liabilities
associated with share-in-savings procurements that are not
fully funded.
``(b) Cancellation and Termination.--(1) 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--
``(A) appropriations available for the performance of the
contract;
``(B) appropriations available for acquisition of the type of
property or services procured under the contract, and not
otherwise obligated; or
``(C) funds subsequently appropriated for payments of costs
of cancellation or termination, subject to the limitations in
paragraph (3).
``(2) 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.
``(3) The head of an executive agency may enter into share-in-savings
contracts under this section in any given fiscal year even if funds are
not made specifically available for the full 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 and
the following conditions are met regarding the funding of cancellation
and termination liability:
``(A) The amount of unfunded contingent liability for the
contract does not exceed the lesser of--
``(i) 50 percent of the estimated costs of a
cancellation or termination; or
``(ii) $10,000,000.
``(B) Unfunded contingent liability in excess of $5,000,000
has been approved by the Director of the Office of Management
and Budget or the Director's designee.
``(c) 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 head of 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.''.
(c) Development of Incentives.--The Director of the Office of
Management and Budget shall--
(1) identify potential opportunities for the use of share-in-
savings contracts;
(2) provide guidance to executive agencies for determining
mutually beneficial savings share ratios and baselines from
which savings may be measured; and
(3) in consultation with the Committee on Governmental
Affairs of the Senate, the Committee on Government Reform of
the House of Representatives, and executive agencies, develop
techniques to permit an executive agency to retain a portion of
the savings (after payment of the contractor's share of the
savings) derived from share-in-savings contracts as funds are
appropriated to the agency in future fiscal years.
(d) Regulations.--Not later than 180 days after the date of the
enactment of this Act, the Federal Acquisition Regulation shall be
revised to implement the provisions enacted by this section. Such
revisions shall--
(1) provide for the use of competitive procedures in the
selection and award of share-in-savings contracts to--
(A) ensure the contractor's share of savings reflects
the risk involved and market conditions; and
(B) otherwise yield best value to the government; and
(2) allow appropriate regulatory flexibility to facilitate
the use of share-in-savings contracts by executive agencies,
including the use of innovative provisions for technology
refreshment and nonstandard Federal Acquisition Regulation
contract clauses.
(e) OMB 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 completion of the revisions to the Federal
Acquisition Regulation under subsection (d), submit to Congress a
report containing--
(1) a description of the number of share-in-savings contracts
entered into by each executive agency under by this section and
the amendments made by this section, and, for each contract
identified--
(A) the performance acquired;
(B) the total amount of payments made to the
contractor; and
(C) the total amount of savings or other measurable
benefits realized;
(2) a description of the ability of agencies to determine the
baseline costs of a project against which savings can be
measured; and
(3) any recommendations, as the Director deems appropriate,
regarding additional changes in law that may be necessary to
ensure effective 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 in section 2332 of title 10, United States Code, and
section 317 of the Federal Property and Administrative Services Act of
1949 (as amended by subsections (a) and (b)).
(g) Repeal of Superseded Provisions.--Subsections (c), (d), (e), (f),
(g), and (i) of section 210 of the E-Government Act of 2002 (Public Law
107-317; 116 Stat. 2936) are repealed.

SEC. 302. INCENTIVES FOR CONTRACT EFFICIENCY.

(a) Incentives for Contract Efficiency.--The Office of Federal
Procurement Policy Act (41 U.S.C. 403 et seq.) is amended by adding at
the end the following new section:

``SEC. 41. INCENTIVES FOR EFFICIENT PERFORMANCE OF SERVICES CONTRACTS.

``(a) Options for Services Contracts.--An option included in a
contract for services to extend the contract by one or more periods may
provide that it be exercised on the basis of exceptional performance by
the contractor. A contract that contains such an option provision shall
include performance standards for measuring performance under the
contract, and to the maximum extent practicable be performance-based.
Such option provision shall only be exercised in accordance with
applicable provisions of law or regulation that set forth restrictions
on the duration of the contract containing the option.
``(b) Definition of Performance-Based.--In this section, the term
`performance-based', with respect to a contract, 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.''.
(b) Clerical and Technical Amendments.--(1) The table of contents in
section 1(b) of such Act is amended by striking the last item and
inserting the following:

``Sec. 40. Protection of constitutional rights of contractors.
``Sec. 41. Incentives for efficient performance of services
contracts.''.
(2) The section before section 41 of such Act (as added by subsection
(a)) is redesignated as section 40.

TITLE IV--ACQUISITIONS OF COMMERCIAL ITEMS

SEC. 401. ADDITIONAL INCENTIVE FOR USE OF PERFORMANCE-BASED CONTRACTING
FOR SERVICES.

(a) Other Contracts.--Section 41 of the Office of Federal Procurement
Policy Act, as added by section 302, is amended--
(1) by redesignating subsection (b) as subsection (c); and
(2) by inserting after subsection (a) the following new
subsection:
``(b) Incentive for Use of Performance-Based Services Contracts.--(1)
A performance-based contract for the procurement of services entered
into by an executive agency or a performance-based task order for
services issued by an executive agency may be treated as a contract for
the procurement of commercial items if--
``(A) 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
``(B) 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 regulations implementing this subsection shall require
agencies to collect and maintain reliable data sufficient to identify
the contracts or task orders treated as contracts for commercial items
using the authority of this subsection. The data may be collected using
the Federal Procurement Data System or other reporting mechanism.
``(3) Not later than two years after the date of the enactment of
this subsection, the Director of the Office of Management and Budget
shall prepare and submit to the Committees on Governmental Affairs and
on Armed Services of the Senate and the Committees on Government Reform
and on Armed Services of the House of Representatives a report on the
contracts or task orders treated as contracts for commercial items
using the authority of this subsection. The report shall include data
on the use of such authority both government-wide and for each
department and agency.
``(4) The authority under this subsection shall expire 10 years after
the date of the enactment of this subsection.''.
(b) Center of Excellence in Service Contracting.--Not later than 180
days after the date of the enactment of this Act, the Administrator for
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.
(c) Repeal of Superseded Provision.--Subsection (b) of section 821 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)
is repealed.

SEC. 402. AUTHORIZATION OF ADDITIONAL COMMERCIAL CONTRACT TYPES.

Section 8002(d) of the Federal Acquisition Streamlining Act of 1994
(Public Law 103-355; 108 Stat. 3387; 41 U.S.C. 264 note) is amended--
(1) in paragraph (1), by striking ``and'';
(2) by striking the period at the end of paragraph (2) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(3) authority for use of a time and materials contract or a
labor-hour contract for the procurement of commercial services
that are commonly sold to the general public through such
contracts.''

SEC. 403. CLARIFICATION OF COMMERCIAL SERVICES DEFINITION.

Subparagraph (F) of section 4(12) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(12)(F)) is amended--
(1) by striking ``catalog or''; and
(2) by inserting ``or specific outcomes to be achieved''
after ``performed''.

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), as amended by section 101, is further
amended--
(1) by adding at the end of paragraph (12) the following new
subparagraph:
``(I) Items or services produced or provided by a
commercial entity.''; and
(2) by adding at the end the following new paragraph:
``(17) The term `commercial entity' means any enterprise
whose primary customers are other than the Federal Government.
In order to qualify as a commercial entity, at least 90 percent
(in dollars) of the sales of the enterprise over the past three
business years must have been made to private sector
entities.''.
(b) Collection of Data.--Regulations implementing the amendments made
by subsection (a) shall require agencies to collect and maintain
reliable data sufficient to identify the contracts entered into or task
orders awarded for items or services produced or provided by a
commercial entity. The data may be collected using the Federal
Procurement Data System or other reporting mechanism.
(c) OMB Report.--Not later than two years after the date of the
enactment of this subsection, the Director of the Office of Management
and Budget shall prepare and submit to the Committees on Governmental
Affairs and on Armed Services of the Senate and the Committees on
Government Reform and on Armed Services of the House of Representatives
a report on the contracts entered into or task orders awarded for items
or services produced or provided by a commercial entity. The report
shall include data on the use of such authority both government-wide
and for each department and agency.
(d) Comptroller General Review.--The Comptroller General shall review
the implementation of the amendments made by subsection (a) to evaluate
the effectiveness of such implementation in increasing the availability
of items and services to the Federal Government at fair and reasonable
prices.

TITLE V--OTHER MATTERS

SEC. 501. AUTHORITY TO ENTER INTO CERTAIN PROCUREMENT-RELATED
TRANSACTIONS AND TO CARRY OUT CERTAIN PROTOTYPE
PROJECTS.

Title III of the Federal Property and Administrative Services Act of
1949 (41 U.S.C. 251 et seq.) as amended by section 215, is further
amended by adding at the end the following new section:

``SEC. 319. AUTHORITY TO ENTER INTO CERTAIN TRANSACTIONS FOR DEFENSE
AGAINST OR RECOVERY FROM TERRORISM OR NUCLEAR,
BIOLOGICAL, CHEMICAL, OR RADIOLOGICAL ATTACK.

``(a) Authority.--
``(1) In general.--The head of an executive agency who
engages 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, or radiological attack,
may exercise the same authority (subject to the same
restrictions and conditions) with respect to such research and
projects as the Secretary of Defense may exercise under section
2371 of title 10, United States Code, except for subsections
(b) and (f) of such section 2371.
``(2) Prototype projects.--The head of an executive agency
may, under the authority of paragraph (1), carry out prototype
projects that meet the requirements of subparagraphs (A) and
(B) of paragraph (1) in accordance with the requirements and
conditions 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). In
applying the requirements and conditions of that section 845--
``(A) subsection (c) of that section shall apply with
respect to prototype projects carried out under this
paragraph; and
``(B) the Director of the Office of Management and
Budget shall perform the functions of the Secretary of
Defense under subsection (d) of that section.
``(3) Applicability to selected executive agencies.--
``(A) OMB authorization required.--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) Relationship to authority of department of
homeland security.--The authority under this subsection
shall not apply to the Secretary of Homeland Security
while section 831 of the Homeland Security Act of 2002
(Public Law 107-296; 116 Stat. 2224) is in effect.
``(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 the 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.''.

SEC. 502. AMENDMENTS RELATING TO FEDERAL EMERGENCY PROCUREMENT
FLEXIBILITY.

(a) Repeal of Sunset for Authorities Applicable to Procurements for
Defense Against or Recovery From Terrorism or Nuclear, Biological,
Chemical, or Radiological Attack.--Section 852 of the Homeland Security
Act of 2002 (Public Law 107-296; 116 Stat. 2235) is amended by striking
``, but only if a solicitation of offers for the procurement is issued
during the 1-year period beginning on the date of the enactment of this
Act''.
(b) Applicability of Increased Simplified Acquisition Threshold.--(1)
The matter preceding paragraph (1) of section 853(a) of the Homeland
Security Act of 2002 (Public Law 107-296; 116 Stat. 2235) is amended to
read as follows:
``(a) Threshold Amounts.--For a procurement referred to in section
852, the simplified acquisition threshold referred to in section 4(11)
of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)) is
deemed to be--''.
(2) Subsections (b) and (c) of section 853 of such Act are repealed.
(3) The heading of section 853 of such Act is amended to read as
follows:

``SEC. 853. INCREASED SIMPLIFIED ACQUISITION THRESHOLD FOR CERTAIN
PROCUREMENTS.''.

(4) The table of contents in section 1(b) of such Act is amended by
striking the item relating to section 853 and inserting the following:

``Sec. 853. Increased simplified acquisition threshold for certain
procurements.''.
(5) Section 18(c)(1) of the Office of Federal Procurement Policy Act
(41 U.S.C. 416(c)(1)) is amended--
(A) by striking ``or'' at the end of subparagraph (G);
(B) by striking the period at the end of subparagraph (H) and
inserting ``; or''; and
(C) by adding at the end the following:
``(I) the procurement is by the head of an executive agency
pursuant to the special procedures provided in section 853 of
the Homeland Security Act of 2002 (Public Law 107-296).''.
(c) Applicability of Certain Commercial Items Authorities.--(1)
Subsection (a) of section 855 of the Homeland Security Act of 2002
(Public Law 107-296; 116 Stat. 2236) is amended to read as follows:
``(a) Authority.--With respect to a procurement referred to in
section 852, the head of an executive agency may deem any item or
service to be a commercial item for the purpose of Federal procurement
laws.''.
(2) Subsection (b)(1) of section 855 of such Act is amended by
striking ``to which any of the provisions of law referred to in
subsection (a) are applied''.
(d) Extension of Deadline for Review and Report.--Section 857(a) of
the Homeland Security Act of 2002 (Public Law 107-296; 116 Stat. 2237)
is amended by striking ``2004'' and inserting ``2006''.

SEC. 503. AUTHORITY TO MAKE INFLATION ADJUSTMENTS TO SIMPLIFIED
ACQUISITION THRESHOLD.

Section 4(11) of the Office of Federal Procurement Policy Act (41
U.S.C. 403(11)) is amended by inserting before the period at the end
the following: ``, except that such amount may be adjusted by the
Administrator every five years to the amount equal to $100,000 in
constant fiscal year 2003 dollars (rounded to the nearest $10,000)''.

SEC. 504. TECHNICAL CORRECTIONS RELATED TO DUPLICATIVE AMENDMENTS.

(a) Repeal of Superseded Subchapter and Related Conforming
Amendments.--(1) Subchapter II of chapter 35 of title 44, United States
Code, is repealed.
(2) Subchapter III of such chapter is redesignated as subchapter II.
(3) Section 3549 of title 44, United States Code, is amended by
striking the sentence beginning with ``While this subchapter''.
(4) The table of sections at the beginning of chapter 35 of title 44,
United States Code, is amended--
(A) by striking the items relating to sections 3531 through
3538; and
(B) by striking the heading ``SUBCHAPTER III--INFORMATION
SECURITY''.
(5) Section 2224a of title 10, United States Code, is repealed, and
the table of sections at the beginning of chapter 131 of such title is
amended by striking the item relating to such section.
(b) Conforming Amendments Related to Repeals of Share-in-Savings and
Solutions-Based Contracting Pilot Programs.--(1) Chapter 115 of title
40, United States Code, is repealed.
(2) The table of chapters at the beginning of subtitle III of such
title is amended by striking the item relating to chapter 115.
(c) Amendments Made by E-Government Act Made Applicable.--The
following provisions of law shall read as if the amendments made by
title X of the Homeland Security Act of 2002 (Public Law 107-296) to
such provisions did not take effect:
(1) Section 2224 of title 10, United States Code.
(2) Sections 20 and 21 of the National Institute of Standards
and Technology Act (15 U.S.C. 278g-3 and 278g-4).
(3) Sections 11331 and 11332 of title 40, United States Code.
(4) Subtitle G of title X of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001 (Public Law 106-
398; 44 U.S.C. 3531 note).
(5) Sections 3504(g), 3505, and 3506(g) of title 44, United
States Code.
(d) Correction of Cross Reference.--Section 2224(c) of title 10,
United States Code, as amended by section 301(c)(1)(B)(iii) of the E-
Government Act of 2002 (Public Law 107-347; 116 Stat. 2955), is amended
by striking ``subchapter III'' and inserting ``subchapter II''.

SEC. 505. EXEMPTION FROM LIMITATIONS ON PROCUREMENT OF FOREIGN
INFORMATION TECHNOLOGY THAT IS A COMMERCIAL ITEM.

(a) Exemption.--Notwithstanding any other provision of law, in order
to promote Government access to commercial information technology, the
restriction on purchasing nondomestic articles, materials, and supplies
set forth in the Buy American Act (41 U.S.C. 10a et seq.), and the
prohibition on acquiring 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 acquisition by the Federal
Government of information technology (as defined in section 11101 of
title 40, United States Code, that is a commercial item (as defined in
section 4(12) of the Office of Federal Procurement Policy Act (41
U.S.C. 403(12)).
(b) Definition.--Section 11101(6) of title 40, United States Code, is
amended--
(1) in subparagraph (A), by inserting after ``storage,'' the
following: ``analysis, evaluation,''; and
(2) in subparagraph (B), by striking ``ancillary equipment,''
and inserting ``ancillary equipment (including imaging
peripherals, input, output, and storage devices necessary for
security and surveillance), peripheral equipment designed to be
controlled by the central processing unit of a computer,''.

SEC. 506. PROHIBITION ON USE OF QUOTAS.

(a) In General.--After the date of enactment of this Act, the Office
of Management and Budget may not establish, apply, or enforce any
numerical goal, target, or quota for subjecting the employees of a
department or agency of the Government to public-private competitions
or converting such employees or the work performed by such employees to
contractor performance under Office of Management and Budget Circular
A-76 or any other administrative regulation, directive, or policy
unless the goal, target, or quota is based on considered research and
sound analysis of past activities and is consistent with the stated
mission of the department or agency.
(b) Limitations.--Subsection (a) shall not--
(1) otherwise affect the implementation or enforcement of the
Government Performance and Results Act of 1993 (107 Stat. 285);
or
(2) prevent any agency of the Executive branch from
subjecting work performed by Federal employees or private
contractors to public-private competition or conversions.

SEC. 507. PUBLIC DISCLOSURE OF NONCOMPETITIVE CONTRACTING FOR THE
RECONSTRUCTION OF INFRASTRUCTURE IN IRAQ.

(a) Disclosure Required.--
(1) Publication and public availability.--The head of an
executive agency of the United States that enters into a
contract for the repair, maintenance, or construction of
infrastructure in Iraq without full and open competition shall
publish in the Federal Register or Commerce Business Daily and
otherwise make available to the public, not later than 30 days
after the date on which the contract is entered into, the
following information:
(A) The amount of the contract.
(B) A brief description of the scope of the contract.
(C) A discussion of how the executive agency
identified, and solicited offers from, potential
contractors to perform the contract, together with a
list of the potential contractors that were issued
solicitations for the offers.
(D) The justification and approval documents on which
was based the determination to use procedures other
than procedures that provide for full and open
competition.
(2) Inapplicability to contracts after fiscal year 2013.--
Paragraph (1) does not apply to a contract entered into after
September 30, 2013.
(b) Classified Information.--
(1) Authority to withhold.--The head of an executive agency
may--
(A) withhold from publication and disclosure under
subsection (a) any document that is classified for
restricted access in accordance with an Executive order
in the interest of national defense or foreign policy;
and
(B) redact any part so classified that is in a
document not so classified before publication and
disclosure of the document under subsection (a).
(2) Availability to congress.--In any case in which the head
of an executive agency withholds information under paragraph
(1), the head of such executive agency shall make available an
unredacted version of the document containing that information
to the chairman and ranking member of each of the following
committees of Congress:
(A) The Committee on Governmental Affairs of the
Senate and the Committee on Government Reform of the
House of Representatives.
(B) The Committees on Appropriations of the Senate
and House of Representatives.
(C) Each committee that the head of the executive
agency determines has legislative jurisdiction for the
operations of such department or agency to which the
information relates.
(c) Fiscal Year 2003 Contracts.--This section shall apply to
contracts entered into on or after October 1, 2002, except that, in the
case of a contract entered into before the date of the enactment of
this Act, subsection (a) shall be applied as if the contract had been
entered into on the date of the enactment of this Act.
(d) Relationship to Other Disclosure Laws.--Nothing in this section
shall be construed as affecting obligations to disclose United States
Government information under any other provision of law.
(e) Definitions.--In this section, the terms ``executive agency'' and
``full and open competition'' have the meanings given such terms in
section 4 of the Office of Federal Procurement Policy Act (41 U.S.C.
403).

SEC. 508. APPLICABILITY OF CERTAIN PROVISIONS TO SOLE SOURCE CONTRACTS
FOR ITEMS AND SERVICES TREATED AS COMMERCIAL ITEMS.

(a) In General.--No contract awarded on a sole source basis for the
procurement of items or services that are treated as or deemed to be
commercial items pursuant to the amendments made by section 401, 404,
or 502 of this Act shall be exempt from--
(1) cost accounting standards promulgated pursuant to section
26 of the Office of Federal Procurement Policy Act (41 U.S.C.
422); and
(2) cost or pricing data requirements (commonly referred to
as truth in negotiating) under section 2306a of title 10,
United States Code, and section 304A of title III of the
Federal Property and Administrative Services Act of 1949 (41
U.S.C. 254b).
(b) Limitation.--This section shall not apply to any contract in an
amount less than $15,000,000.

Committee Statement and Views

PURPOSE AND SUMMARY

The current acquisition system, improved though it may be
through the reforms of the 80s and 90s is simply inadequate to
leverage the best and most innovative services and products our
vigorous private-sector economy has to offer. It has not kept
up with the dynamics of an economy that has, over the last few
years, become increasingly service and technology oriented.
H.R 1837 is targeted overall at the root causes of our
current dilemma. The legislation will allow us to put the tools
needed to access the commercial service and technology market
in the hands of a trained workforce. The legislation also
grants that workforce the discretion necessary to choose the
best value for the government and holds them accountable for
their choices.
Specifically, the legislation consists of a carefully
crafted set of balanced and interrelated proposals that will
address the multiple deficiencies plaguing government
acquisition today; (1) the lack of up-to-date comprehensive
training for our acquisition professionals, (2) the inability
of the current government structure to reflect business-like
practices by integrating the acquisition function into the
overall agency mission and facilitating cross-agency
acquisitions and information sharing, and (3) the lack of
effective tools and incentives to encourage the participation
of the best commercial firms in the government market.

TITLE I

H.R 1837 at title I amends federal procurement law to
remedy one of the most glaring difficulties facing today's
acquisition system; our inability to have the right people with
the right skills to manage the acquisition of the services and
technology the government needs. It will establish a sorely
needed workforce training fund within the General Services
Administration (GSA), financed by depositing 5 percent of the
fees collected by various agencies under their government-wide
contracts, including the GSA
Schedules. This will stabilize training funding and allow
our hard-working acquisition professionals to get the training
they need to transition to the new service oriented and
technology driven federal market.
It will also create an acquisition professional exchange
program to permit the exchange of high-performing acquisition
professionals between the federal government and participating
private-sector concerns. The program will provide both public
and private sector employees with invaluable first-hand
experience and insight to bring back to their respective
organizations. The program will contain extensive ethics
protections. It is modeled after the Digital Tech Corps Act for
technology professionals that is included in the recently
enacted E-Government Act of 2002 Pub L. 107-347.
Title I makes a number of other changes to help the
government recruit a skilled acquisition workforce and to
ensure that the government maintains an adequate workforce to
acquire the architectural and engineering services it needs.

TITLE II

Title II of the legislation includes a number of provisions
aimed at reforming the government's antiquated acquisition
management structure and provides other improvements to the
process. The legislation provides for the appointment of a
Chief Acquisition Officer (CAO) (the provision is modeled on
the Chief Human Capitol Officer position created in the
Homeland Security Act of 2002, Pub. L. 107-296) for each agency
to eliminate stovepipes and serve as a focal point for
acquisition in day-to-day operations, as well as in agency-wide
strategic planning and performance evaluation processes. It
also establishes a CAO Council modeled after the Chief
Information Officers Council established in the E-Government
Act of 2002, Pub. L. 107-347 to monitor and improve the federal
acquisition system. In a further effort to unlock the current
stove-piped structure, the legislation will provide for the
creation of an advisory panel of acquisition experts with
diverse experience to review current government-wide
acquisition laws and regulations. The panel will make
recommendations for change with a view towards ensuring the
effective and appropriate use of commercial practices and
encouraging the most innovative firms to compete in the
government market while retaining the integrity of the
acquisition process and ensuring that the government's best
interests are protected.
The legislation also contains a provision that will
prohibit government agencies from disqualifying from the award
of a government contract a business that permits its workers to
telecommute in the performance of the contract. The provision
is based upon the Freedom to Telecommute Act that passed the
House last Congress by a vote of 412-0. H.R 1837 also contains
provisions that (1) provide statutory authority for agency
level bid protests and clarify the relationship between agency-
level and the General Accounting Office protest process, (2)
extend the current authority to carry out the government's
franchise fund programs, (3) provide for a number of needed
improvements in the government's contracting for architectural
and engineering services and (4) add procedural requirements
for civilian agencies relating to the acquisition of products
of Federal Prison Industries.

TITLE III

H.R 1837 at title III adds tools to enable our acquisition
workforce to tap into our dynamic commercial marketplace. The
legislation provides for the increased authorization of the use
of innovative share-in-savings contracts beyond information
technology. A limited number of share-in--savings contracts are
authorized for information technology in the recently passed E-
Government Act. Share-in-savingscontracts represent an
innovative approach to encourage industry to share creative technology
and management solutions so that agencies can lower costs and improve
service delivery without large up-front investments. The legislation
also authorizes agencies to exercise options for additional performance
periods in service contracts based upon exceptional performance.

TITLE IV

H.R 1837 updates the improvements in the acquisition of
commercial items made during the reforms of the 90s. It
establishes a government-wide preference for the use of
performance-based service contracts by treating them in most
respects as contracts for commercial items. This will authorize
the use of simplified procedures for the award of performance-
based service contracts and apply to those contracts, within
certain limits, the current waivers of requirements and
certifications. The legislation authorizes the use of time and
material and labor-hour type contracts for commercial services
that are commonly sold to the public through such contracts.
The legislation provides a clarification of the existing
statutory definition of commercial items to better reflect the
commercial market for services and to include goods and
services provided by a firm's commercial entity.

TITLE V

This title of H.R 1837 provides for various improvements to
the acquisition system. It contains a provision allowing all
federal agencies to use approaches other than contracts to buy
research and development and prototypes for new technologies to
fight terror. The Department of Defense has long had such
authority. The new Department of Homeland Security has recently
been granted the authority. The legislation also makes
permanent the Federal Emergency Procurement Flexibility Act
that was included as part of the Homeland Security Act of 2002.
The Flexibility Act provides agencies with greater authority to
buy the most high-tech and sophisticated products and services
to support anti-terror efforts and to defend against
biological, chemical, or radiological attacks. All government
agencies need this authority to respond to possible terror
threats. The title also provides authority to make inflation
adjustments to the existing acquisition threshold for
simplified acquisition procedures and makes technical
corrections to the information security provisions of the
Homeland Security Act. The title further removes domestic
source restrictions for commercial information technology
products, prohibits the use of numerical goals, targets, or
quotas for competitive sourcing unless they are based on sound
research and analysis, provides for publication of information
on certain contract awards for Iraq reconstruction efforts and
places a $15,000,000 ceiling on the applicability of the waiver
of certification and accounting requirements for services or
goods deemed commercial pursuant to the title IV provisions of
H.R. 1837 encouraging the use of performance-based contracts
and clarifying the definition of commercial item to include
services and products of a commercial entity.

BACKGROUND AND NEED FOR THE LEGISLATION

Each year our government spends well over $200 billion
buying services and goods ranging from sophisticated
information technology and management services, to grass
cutting and window washing, from paper clips to advanced weapon
systems. More than half that $200 billion, over $135 billion is
now spent on services--an increase of about 24 percent since
1990--establishing services as the Nation's largest single
spending category.
The acquisition process that is tasked with this daunting
job is grounded on two basic, and largely mirror-image
statutes. The Armed Services Procurement Act of 1947 for the
Department of Defense, the National Aeronautics and Space
Administration, and the Coast Guard and the Federal Property
and Administrative Services Act of 1949 for most civilian
agencies. Additionally, the Office of Federal Procurement
Policy Act provides a tie between the defense and civilian
sectors through the establishment of government-wide
acquisition policies and procedures; particularly the
government-wide Federal Acquisition Regulation. Finally, an
array of other statutes such as the Small Business Act, Buy
American Act and other government-wide and agency-specific laws
impact the acquisition process. These governing provisions are
the culmination of a haphazard succession of reforms, reactions
to perceived abuses, socio-economic programs and management
initiatives stretching back to the 1700s.
The good news is that despite the lack of a long-term
coherent vision for the acquisition system, recent reforms
throughout the 90s have revolutionized the way the government
does business with the private sector.
The bad news is the reforms were not nearly sufficient to
match the best practices of industry particularly regarding the
acquisition of cutting edge information technology and
management services. The reforms were rooted in the late 80s
and early 90s context products and major systems. The current
system, improved though it may be, is simply inadequate to
leverage the best and most innovative services and products our
vigorous private-sector economy has to offer. It has not kept
up with the dynamics of an economy that has over the last few
years become increasingly service and technology oriented. We
do not have the right people with the right skills to manage
acquisition of the services and technology the government so
desperately needs.
The General Accounting Office, along with several civilian
oversight agencies, have found prevailing weaknesses in service
contacting; acquisitions are not competed sufficiently, are
poorly planned, or not well managed. These enduring failures
cause GAO to, year after year, place management of large
procurement operations on its High Risk list. This diminishes
the government's ability to be effective and efficient in
managing federal programs and spending, communicating with and
providing services to citizens, and protecting our homeland.
Without change, the current system cannot support the
President's vision, expressed in his Management Agenda, of a
government that is well run, results oriented, citizen
centered, and market based.
The proposals in H.R 1837 are grounded on the Services
Acquisition Reform Act of 2002 (SARA), H.R. 3832 from the last
Congress and the acquisition hearings held last year by the
Technology and Procurement Policy Subcommittee of the Committee
on Government Reform. We have made progress since then. The
Congress has passed the Homeland Security Act, Pub. L 107-296
and the E-Government Act, Pub. L. 107-347. The Homeland
Security Act contains some important procurement flexibilities,
while the E-Government Act contains limited share-in-savings
authority and cooperative purchasing authority to expand the
General Services Administration schedule contracts to state and
local governments. H.R. 1837 has benefited from the comments
received from a variety of sources on the original version of
SARA during last Congress's acquisition hearings and from the
debates surrounding the passage of the Homeland Security and E-
Government Acts.
SARA will provide our acquisition workforce with the
necessary tools to succeed through a carefully crafted set of
provisions along with training and insightful management based
on results and accountability. SARA is targeted towards the
goal of a modern, responsive, flexible, market-based
acquisition system that will result in the government
leveraging the best the private sector has to offer at fair and
reasonable prices. SARA will address training of our
acquisition workforce to meet the challenges of the new
service-oriented economy, it will provide for the adoption of
business-like acquisition practices within the government,
facilitate the acquisition of commercial services by building
on the prior reforms in the acquisition of commercial items and
enable our government to access cutting-edge technology within
today's commercial environment.
The federal government faces historic challenges. At the
same time, it sits at the brink of unprecedented opportunity.
We can and must develop new methods to harness the magic of our
dynamic private market to meet the critical needs of the
American people.

LEGISLATIVE HISTORY

The Services Acquisition Reform Act of 2003 (SARA), H.R.
1837 is targeted at the root causes of the dilemma facing the
government's acquisition system today: (1) The lack of up-to-
date comprehensive training for our acquisition professionals;
(2) the inability of the current government structure to
reflect business-like practices by integrating the acquisition
function into the overall agency mission and facilitating
cross-agency acquisitions and information sharing; and (3) the
lack of good tools and incentives to encourage the
participation of the best commercial firms in the government
market.
The legislation is the product of a rich hearing and
comment process that has stretched over two Congresses. The
provisions in the current legislation are grounded on the
Services Acquisition Reform Act of 2002, H.R. 3832, introduced
last Congress and the multiple hearings and debates that
surrounded its consideration, as well as the debates held in
connection with the passage of the Homeland Security Act and
the E-Government Act. The Homeland Security Act contains some
important procurement flexibilities, while the E-Government Act
contains limited share-in-savings authority and cooperative
purchasing authority. Consequently, the Committee has had the
benefit of wealth of comments and suggestions from a variety of
sources on the best reforms for the acquisition process.
On April 29, 2003, Chairman Tom Davis of the Committee on
Government Reform and Representative Duncan Hunter introduced
H.R. 1837 to give the government's acquisition workforce the
tools needed to access the commercial service and technology
markets and the discretion necessary to choose the best value
for the government and be held accountable for those choices.
The bill was referred to the House Committee on Government
Reform that met pursuant to notice on April 30, 2003 to hear
testimony on reforms that will promote best practices in
services acquisitions.
At the hearing, the Committee received testimony from
William Woods, Director, Acquisition and Sourcing Management,
United States General Accounting Office (GAO); Stephen Perry,
Administrator of General Services; Angela Styles, Administrator
of Federal Procurement Policy, Office of Management and Budget.
Also testifying were Charles Tiefer, professor of law,
University of Baltimore; Bruce Leinster, of IBM on behalf of
the Information Technology Association of America; Edward
Legasey, Executive Vice President and Chief Operating Officer
of SRA International on behalf of the Professional Services
Counsel and Mark Wagner, Vice President of Government Affairs,
Johnson Controls Corp. on behalf of the Contract Services
Association.
The government witnesses testified about the current status
of government contracting for services. All praised the
training provisions of the bill and spoke about the need to
address the explosive growth in the federal government's
services acquisitions. Administrator Styles stated that the
provisions dealing with time materials and labor hour
contracting were an improvement over the earlier version of the
bill but added that there was need for appropriate oversight
and safeguards in time material labor hour contracts. Mr. Woods
of the GAO noted that SARA addressed a number of longstanding
issues in service contracting and should enable agencies to
improve their performance. He did however raise concern about a
provision for more timely payment under service contracts,
since removed in the Chairman's amendment in the nature of a
substitute.
Professor Tiefer raised some concerns about the bill. He
viewed the bill as removing useful regulation and creating
opportunities for possible abuse. The witnesses representing
various industry groups praised the bill by pointing out that
it will increase competition by making it easier for commercial
firms to participate in the federal market.
This most recent hearing was the culmination of a fact
gathering and comment process that began last Congress. The
process featured two hearings targeted at services acquisition
reform. The first hearing was held on May 22, 2001, by the
Subcommittee on Technology and Procurement Policy. The
Subcommittee met on that day pursuant to notice to hear
testimony on services acquisition and future reforms to the
federal acquisition system.
The hearing addressed and examined the progress of the
acquisition reform initiatives of the early to mid-nineties.
This hearing focused on the next steps in services acquisition
reform. The recent reforms had to some extent streamlined the
process that resulted in some cost savings, increased access to
technological advancements, and reduced procurement cycles. The
reforms have also improved the quality of products and services
purchased by the federal government. The subcommittee reviewed
the implementation of the reform efforts government-wide and
examined future legislative proposals to further streamline the
procurement system and to better use commercial best practices.
Testimony was received from David E. Cooper, Director,
Acquisition and Sourcing Management, General Accounting Office
(GAO); David R. Oliver, Jr., principal Deputy Under Secretary
of Defense, Acquisition, Technology and Logistics; David A.
Drabkin, Deputy Associate Administrator, Office of Acquisition
Policy, Office of Government-wide Policy, General Services
Administration; Dr. Steven Kelman, Albert Weatherhead professor
of public management, John F. Kennedy School of Government,
Harvard University; Michael W. Mutek, Senior Vice President,
General Counsel, and Secretary, Raytheon Technical Services
Co., representing the Professional Services Counsel; and Mark
Wagner, Director of Federal Government Affairs, Johnson
Controls, representing the Contact Services Association.
Generally, the comments of the witnesses were as follows:
the government witnesses informed the subcommittee of their
services acquisition reform efforts and theirattempts to equip
federal employees to take advantage of the opportunities afforded by
these reforms; the testimony offered by the GAO and non-federal
witnesses expressed the need to consider new reforms. GAO pointed out
that, as a percentage of federal spending, services acquisition is
growing and that increasing needs in information technology services
and professional, administrative and management services drives this
growth. Private-sector witnesses stated that the system still contained
too many non-value-added requirements and processes.
There was a consensus that additional reforms were needed.
Some witnesses suggested aggressive implementation of
performance based contracting. Others advocated share-in-
savings contracting. Almost all witnesses cited training of the
acquisition workforce as critical to enhancing the effect of
any reforms.
Subsequently, on November 1, 2001 the Subcommittee on
Technology and Procurement Policy pursuant to notice met to
review proposed legislative initiatives designed to provide the
federal government greater access to the commercial marketplace
and lower the barriers agencies faced in acquiring goods and
services necessary to meet their mission objectives.
The hearing reviewed proposed legislative initiatives
designed to provide the federal government greater access to
the commercial marketplace. The subcommittee found that such
initiatives were critical as the government was not utilizing
best commercial practices and many of the best commercial firms
were reluctant to participate in the government market.
At the hearing, testimony was received from Stan Z.
Soloway, President, Professional Services Council; Mark Wagner,
Vice President, Federal Government affairs, Johnson Controls,
Inc.; Renato DiPentima, President, SRA Consulting and Systems
Integration, SRA International, Inc.; Charles Mather, Chief
Executive Officer, Acquisition Solutions, Inc.; and Charles
Tiefer, professor of law, University of Baltimore Law School.
Also testifying were William T. Woods, Acting Director,
Acquisition and Sourcing Management; Stephen A. Perry,
Administrator of General Services; Angela B. Styles,
Administrator for Federal Procurement Policy, Office of
Management and Budget; Deidre A. Lee, Director, Defense
Procurement, Office of the Under Secretary of Defense for
Acquisition, Technology and Logistics, Department of Defense.
The witnesses testifying on behalf of the government
generally stated that there was interest in particular
initiatives contained within the draft legislation. Some
witnesses cautioned that there was also a need to maintain
other governmental interests such as the benefits of
competition and transparency. They also reported on successes
and challenges in implementing earlier acquisition reforms.
The private-sector witnesses were enthusiastic in their
support for the draft legislation. They lauded, in particular,
the importance of an aggressive training program for the
acquisition workforce contained in the draft. Several witnesses
stated that a lack of adequate training led to the hampered
implementation of earlier reforms. They also encouraged the
increased emphasis on share-in-savings and performance based
contracting and the revision of standard payment terms.
The final witness, Professor Tiefer, cautioned the
subcommittee on three issues. He warned that any perceived
partial repeal of the Davis-Bacon Act or the Service
Contracting Act might be viewed as polarizing. He stated that
allowing government contractors to create more flexible
commercial business segments might lead to new instances of
defective pricing. Finally, he advised that share-in-savings
programs harbor some potential risks.
The information and knowledge developed in these two
hearings led to the development of the Services Acquisition
Reform Act (SARA) which was introduced as H.R. 3832 on March 4,
2002 by Chairman Davis. Following the introduction of H.R.
3832, the Subcommittee on Technology and Procurement Policy
held a third hearing on March 7, 2002 to gather views and data
on H.R. 3832 as introduced.
In his opening statement, Chairman Davis stated that over
the last year he continued to find that federal agencies were
failing to achieve contract management goals and efficiency in
service contracting. In addition, the GAO, along with several
civilian oversight agencies, had found that prevailing
weaknesses exist in service contracting. These weaknesses
include acquisitions that were not competed sufficiently, were
poorly planned, or were not well managed. According to the
Chairman, one of SARA's goals is to streamline procurement
cycles and integrate agency mission goals with acquisition
goals in order to help agencies meet the challenges presented
by the war on terrorism.
At the hearing, testimony was received from Dr. Steven
Kelman, professor of public management, Harvard University;
Steven Schooner, associate professor of law, the George
Washington University Law School; Scott Dever, Vice President
of Global Procurement, Hasbro, Inc.; Richard Roberts, Senior
Vice President and Managing Director, Federal Services, KPMG
Consulting, Inc.; Roberta StandsBlack-Carver, President and
CEO, Four Winds Services, Inc.; Jerry S. Howe, Senior Vice
President and General Counsel, Veridian. Also testifying were
William T. Woods, Director, Acquisition and Sourcing
Management, U.S. General Accounting Office (GAO); Angela B.
Styles, Administrator of Federal Procurement Policy, Office of
Management and Budget; Stephen Perry, Administrator of General
Services; and Deidre Lee, Director of Procurement, U.S.
Department of Defense.
The GAO witness expanded on its recent report on industry
best practices in services acquisition. He noted that various
provisions of the bill addressed aspects of the approaches
followed by leading companies, particularly the provisions
regarding performance-based contracting and the establishment
of an agency Chief Acquisition Officer. Commissioner Perry of
the General Services Administration spoke highly of SARA's
commitment to training acquisition professionals as well as the
concept of each agency having a Chief Acquisition Officer.
The witnesses from academia were generally supportive of
the reforms laid out in H.R. 3832. Dr. Kelman stated that SARA
``continues the effort to create a modern, businesslike
procurement system that began a decade ago, in an exercise in
bipartisanship and good government that is all-too-rare these
days.'' Professor Schooner did comment that he would like to
see even more emphasis on Congressional oversight in the
procurement process.
Witnesses testifying on behalf of the private sector
supported the provisions of H.R. 3832. Mr. Roberts of KPMG
stated that as the nation refocused its efforts toward new
challenges the federal government needed to have fast,
efficient access to the best information technology solutions.
He added that these solutions reside primarily in the private
sector but that SARA could help the federal government benefit
from them. Ms. StandsBlack Carver, CEO of a Native American-
owned small business was enthusiastic in her support of the
legislation. She noted that SARA would allow the
federalgovernment to take advantage of innovations offered in the
services area to the benefit of the U.S. taxpayer.
The Committee relied on the testimony, reports and
statements collected in the development and drafting of H.R.
3832 of the 107th Congress while crafting and reintroducing H.R
1837 in this the 108th Congress.

Section-by-Section

Section 1--Short title; table of contents

Section 2--Executive agency defined

The section would define the term ``executive agency'' as
that term is defined in section 4(1) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(1)), unless stated
otherwise.

TITLE I--ACQUISITION WORKFORCE AND TRAINING

Section 101--Definition of acquisition

The section would amend section 4 of the Office of Federal
Procurement Policy Act (41 U.S.C. 403) to provide a
comprehensive government-wide definition of the term
``acquisition.'' The new definition would encompass the entire
spectrum of acquisition starting with the development of an
agency's requirements through management and measurement of
contract performance.

Section 102--Acquisition workforce training fund

The section would amend section 37 of the Office of Federal
Procurement Policy Act (41 U.S.C. 433) to establish within the
General Services Administration an acquisition workforce-
training fund to be managed by the Federal Acquisition
Institute (FAI). The fund is to be financed by depositing 5% of
the fees collected by various executive agencies under their
government-wide contracts. This will provide the stabilized
funding needed by FAI to develop training resources needed to
enable our acquisition professionals to transition to the new
service oriented and technology driven federal market. The fund
can only be used for sorely needed acquisition workforce
training across the civilian government agencies.

Section 103--Government-Industry Exchange Program

The section would amend Subpart B of part III of title 5,
United States Code by adding a new Chapter 38 establishing an
acquisition professional exchange program to permit the
temporary exchange of high-performing acquisition professionals
between the federal government and participating private-sector
concerns. Under the program, which is modeled after the
Information Technology Exchange Program included in section 209
of the recently passed E-Government Act, Pub. L. 107-347, a
participating federal employee would retain his/her federal
benefits and would be deemed during the period of the
assignment (for a period of between 6 months and a year, with
possible extensions of up an additional year for both public
and private-sector employees) to be detailed to regular work
within the agency. Under the section an agency head would take
necessary actions to ensure that 20 percent of those federal
employees assigned to private sector firms are assigned to
small businesses. Private-sector employees could be assigned to
a federal agency. An assigned employee could still be paid by
the private-sector employer and would be deemed a federal
employee for most purposes. The section would amend a number of
current government employee ethics provisions to apply to
private sector employees assigned to federal agencies under the
program. The Office of Personnel Management (OPM) would submit
semi-annual reports to the Committees on Government Reform and
Governmental Affairs summarizing the operation of the program
including the number of individuals assigned, the positions
involved and the durations of the assignments. Assignments of
federal employees to non-federal employers would only be made
pursuant to a program developed by the Office of Federal
Procurement Policy and OPM. No assignments under the section
could be made after the end of a 5-year period beginning on the
date of enactment. The General Accounting Office would, 4 years
after enactment, report on the effectiveness of the program and
whether it should be continued. Finally, the section would
provide conforming amendments to title 5 and title 18, United
States Code and other law in connection with the new
professional exchange program.

Section 104--Acquisition Workforce Recruitment Program

The section would permit the head of an agency to
determine, for purposes of sections 3304, 5333, and 5753 of
title 5, United States Code, that certain Federal acquisition
positions are ``shortage category'' positions in order to
recruit and directly hire such employees with high
qualifications. The actions under this section would be subject
to Office of Personnel Management policies. The Administrator
for Federal Procurement Policy would be required to submit a
report to Congress prior to the authority's September 2007
expiration date concerning the efficacy of the program and
recommending whether the authority should be extended.

Section 105--Architectural and engineering acquisition workforce

The section would provide that the Administrator for
Federal Procurement Policy in consultation with the Secretary
of Defense, the Administrator of General Services and the
Director of the Office of Personnel Management develop and
implement a plan to assure that the federal government
maintains a core in-house architectural and engineering
capability to ensure that it has the capability to effectively
contract for the performance of architectural and engineering
services.

TITLE II--ADAPTATION OF BUSINESS ACQUISITION PRACTICES

Subtitle A--Adaptation of Business Management Practices

Section 201--Chief Acquisition Officers

The section would amend section 16 of the Office of Federal
Procurement Policy Act (41 U.S.C. 414) to provide for the
appointment of a non-career employee as the Chief Acquisition
Officer for each executive agency other than the Department of
Defense. The Department of Defense currently has a comparable
position established pursuant to section 133 of title 10,
United States Code. The Chief Acquisition Officer would have
acquisition as the official's primary duty and advise and
assist the agency head and other senior officials to ensure
that the agency mission is achieved through the management of
the agency's acquisition activities. The functions of the Chief
Acquisition Officer would include monitoring the agency's
acquisition activities, evaluating them based on applicable
performance measurements, increasing the use of full and open
competition in agency acquisitions, making acquisition
decisions consistent with applicable laws, and establishing
clear lines of authority, accountability, and responsibility
for acquisition decision-making and developing and maintaining
a acquisition career management program. The Chief Acquisition
Officer would, as a part of the statutorily required annual
strategic planning and performance evaluation process, assess
agency requirements foragency personnel knowledge and skills in
acquisition resources management and, if necessary, develop strategies
and plan for hiring, training and professional development.

Section 202--Chief Acquisition Officers Council

The section would add a new section 16A to the Office of
Federal Procurement Policy (OFPP) Act (41 U.S.C. 403 et seq.)
to authorize the establishment of a Chief Acquisition Officers
Council to monitor and improve the federal acquisition system.
The Council is to be chaired by the Deputy Director for
Management (DDM) of the Office of Management and Budget (OMB)
and comprised of the Administrator for Federal Procurement
Policy (Administrator), the Chief Acquisition Officers created
under section 16 of the OFPP Act, and any other federal officer
or employee designated by the chair. The Administrator is to
lead the activities of the Council on behalf of the DDM. The
General Services Administration is to provide administrative
and other support to the Council. The Council will, among other
things, develop recommendations for OMB on acquisition policies
and requirements, assist the Administrator in the
identification, development, and coordination of multi-agency
and other innovative acquisition initiatives, promote effective
business practices to ensure timely delivery of best value
products and services to the government. The Council will also
work with the Office of Personnel Management to assess and
address hiring, training, and professional development needs
related to acquisition.

Section 203--Statutory and regulatory review

The section would provide that the Administrator for
Federal Procurement Policy establish an advisory panel of at
least nine experts in acquisition law and policy who represent
diverse public and private sector experiences. The panel would
review acquisition laws and regulations with a view toward
ensuring effective and appropriate use of commercial practices
and performance-based contracting and enhancing the performance
of acquisition functions across agency lines, and the use of
government-wide contracts. The panel would make recommendations
for the repeal or amendment of laws or regulations that are
unnecessary for the effective, efficient and fair award and
administration of government contracts while retaining the
financial and ethical integrity of the acquisition programs and
ensuring that the government's best interest is protected. The
report is to be completed within one year after the
establishment of the panel and contain the findings and
conclusions of the panel.

Subtitle B--Other Acquisition Improvements

Section 211--Extension of authority to carry out franchise fund
programs

The section would amend section 403(f) of the Federal
Financial Management Act of 1994 (31 U.S.C. 501 note) to
reauthorize the government's franchise funds until October 1,
2006. These six franchise fund programs were authorized in the
Departments of the Interior, Commerce, Health and Human
Services, Treasury, and Veterans Affairs and in the
Environmental Protection Agency to provide common
administrative support services.

Section 212--Agency acquisition protests

The section would amend Chapter 137 of title 10, United
States Code and the Federal Property and Administrative
Services Act of 1949 to provide statutory authority for an
agency-level acquisition protest process. It would provide for
a ``stay'' of the award or of contract performance during the
20 working day period an agency is given to decide the protest.
The ``stay'' could be lifted by the head of the agency
procuring activity upon a written finding that urgent and
compelling circumstances do not permit waiting for the
decision. The section would provide that filing an agency-level
protest under this section would not affect the right of an
interested party to file a protest with the Comptroller General
or in the United States Court of Federal Claims. The section
would also amend section 3553(d)(4) of title 31, United States
Code to provide that an interested party filing a protest on
the same matter with the Comptroller General within 5 days of
the issuance of the agency protest decision would qualify for a
stay of performance in connection with such protest.

Section 213--Improvements in contracting for architectural and
engineering services

The section would amend section 1102 of title 40 of the
United States Code to clarify the terms ``surveying and
mapping'' as used in the definition of architectural and
engineering services to ensure that the quality-based selection
process in chapter 11 of title 40 of the United States Code is
used for the full spectrum of surveying and mapping services.
The Federal Acquisition Regulation would also be amended to
include the new clarified definition. Further, the section
would amend section 2855(b) of title 10, United States Code to
raise from $85,000 to $300,000 the threshold for a
participation incentive for small business concerns in
acquisitions for architectural and engineering services and to
conform section 2855 to the title 40 amendments. Finally, the
section would require that architectural and engineering
services offered under multiple-award schedule contracts
awarded by the General Services Administration or under
government-wide task and delivery order contracts be performed
under the supervision of a licensed professional engineer and
be awarded pursuant to the quality-based selection procedures
in chapter 11 of title 40 of the United States Code.

Section 214--Authorization of telecommuting for Federal contractors

The section would amend the Federal Acquisition Regulation
(FAR) to provide that solicitations for federal contracts
should not contain any requirement or evaluation criteria that
would render an offeror ineligible for award or would reduce
the scoring of the offeror's proposal based upon the offeror's
inclusion of a plan to allow its employees to telecommute
unless the contracting officer first determines in writing that
the needs of the agency, including security needs, could not be
meet without the requirement. The General Accounting Office
would report to Congress on the implementation one year after
the FAR amendment is published.

Section 215--Procedural requirements for civilian agencies relating to
products of Federal Prison Industries

The section would amend the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) to
add a new section 318 to provide that before purchasing a
product from the Federal Prison Industries (FPI) an agency head
must conduct market research to determine whether the FPI
product is comparable in terms of price, quality and time of
delivery to products available from the private sector. If the
agency determines that the FPI product is not comparable, the
agency shall use competitive procedures or a multiple award
contract to acquire the product. The agency is to consider a
timely offer from FPI under such an acquisition. The section
also provides that a firm contracting with an agency may not be
required by that agency to use FPI as a subcontractor or
supplier. Finally, the section prohibits an agency from
entering into a contract with FPI under which an inmate worker
would have access to classified or other sensitive data.

TITLE III--CONTRACT INCENTIVES

Section 301--Share-in-Savings Initiatives

The section would amend section 2332 title 10, United
States Code and section 317 of the Federal Property and
Administrative Services Act (Property Act) to authorize
government-wide the use of share-in-savings contracts. These
contracts represent an innovative approach to encourage
industry to share creative solutions with the government.
Through these contracts, agencies can lower their costs and
improve service delivery without large ``up front'' investments
as the contractor provides the technology and is compensated by
receiving a portion of savings achieved. The section would
amend and clarify the provisions in title 10 and the Property
Act that were added to the United States Code by section 210 of
the E-Government Act of 2002, Pub. L. 107-347. The new section
would expand the authorization beyond information technology
and provide for the use of such contracts whenever the proper
approvals are granted.
The section would authorize agencies to enter into share-
in-savings contracts for a term of 5 years, and with the
appropriate approval, for up to 10 years, to pay contractors
from the savings realized, and to retain those savings that
exceed the amount paid to the contractor. The section would
permit agencies to use various options for funding cancellation
or termination costs and would permit the cancellation or
termination amount to be negotiated by the parties. The section
would require that share-in-savings contracts include a
provision containing a quantifiable baseline for savings that
is approved by the agency's chief acquisition officer. The
section would not permit the award of such contracts where
funding for the full cost of cancellation or termination is not
available unless the amount of unfunded contingent liability
does not exceed the lesser of 50% of the estimated cancellation
or termination costs or $10,000,000. Any unfunded contingent
liability in excess of $5,000,000 would require approval by the
Director of the Office of Management and Budget (OMB). Further,
the section would require that the Federal Acquisition
Regulation (FAR) be revised to implement this section and to
provide for such matters as the use of competitive procedures
and innovative provisions for technology refreshment,
appropriate regulatory flexibility to facilitate the use of
such contracts and assurance that the contractor's share of the
savings reflects the risk involved and the market conditions.
The Director of OMB is to provide incentives to agencies in
identifying additional opportunities for the use of these
contracts and guidance for determining baselines and savings
share ratios. Finally, the section would require the Director
of OMB to report to Congress two years after the FAR revisions
are issued describing the number of share-in savings contracts
entered into, the total payments made and savings achieved,
agency efforts to determine baseline costs and making
recommendations for changes in law needed to encourage the
effective use of share-in-savings contracts.

Section 302--Incentives for contract efficiency

The section would amend the Office of Federal Procurement
Policy Act (41 U.S.C. 403 et seq.) to add a new section 41
authorizing an agency to exercise an option to extend a
contract for services by one or more performance periods based
on exceptional performance as measured by standards set forth
in the contract. The option is only to be exercised within the
applicable provisions of law or regulation that set forth
limitations on the duration of the contract containing the
option. The contract is, to the maximum extent practicable, to
be performance based.

TITLE IV--ACQUISITIONS OF COMMERCIAL ITEMS

Section 401--Additional incentive for use of performance-based
contracting for services

The section would amend section 41 of the Office of Federal
Procurement Policy Act (41 U.S.C. 41), as added by section 302
above, to add a new subsection that would provide that a
performance-based service contract or task order may be treated
as a contract for a commercial item if it defines tasks to be
performed in measurable, mission related terms, identifies
specific products or outputs and the source provides similar
services to the public under similar terms to those offered the
government. This would authorize the use of special simplified
procedures provided in the Federal Acquisition Regulation for
commercial items if the performance-based contract or task
order is valued at $5,000,000 or less and apply to those
contracts the current waivers of requirements and
certifications applicable to contracts for commercial items.
Section 508 below provides that the application of the
exemptions from cost accounting standards and cost or pricing
data for a contract for a service treated as a commercial item
under this section applies to contracts valued at up to
$15,000,000. The section further provides for agencies to
collect and maintain data to identify the contracts and orders
for services considered commercial items under this section and
for a report to congressional committees by the Office of
Management and Budget on the use of these authorities
government-wide and by agency. The provision would sunset after
10 years. Finally, the section would require the Administrator
for Federal Procurement Policy to establish a Center of
Excellence for Service Contracting to assist the acquisition
community in identifying best practices in service contracting.

Section 402--Authorization of additional commercial contract types

The section would provide that section 8002(d) of the
Federal Acquisition Streamlining Act of 1994 (Public Law 103-
355; 41 U.S.C. 264 note) be amended to provide that the Federal
Acquisition Regulation (FAR) include a provision that would
provide that time and material and labor-hour contracts could
be used for commercial services that are commonly sold to the
general public through such contracts. Time and material and
labor-hour contracts are treated in the current Part 16 of the
FAR as a separate contract type, as are fixed-price contracts
and cost-reimbursement contracts. While section 8002(d)
provides that the FAR is to prohibit the use of cost-type
contracts for commercial items, there is no comparable
prohibition applicable to time and material and labor-hour
contracts. Section 402 would make clear that, under the
appropriate circumstances, time and material and labor-hour
contracts should be specifically authorized by the FAR for
commercial services.

Section 403--Clarification of commercial services definition

The section would amend section 4 of the Office of Federal
Procurement Policy Act (41 U.S.C. 403 (12)) (OFPP Act) to
clarify the definition of commercial item to recognize the
changing dynamics of the commercial marketplace for services.
The new definition would eliminate the antiquated notion of an
established catalogue price, but retain the requirement that
commercial services have an established market price. Further
and most important, the definition now recognizes that services
that are sold on the basis of specific outcomes in addition to
those for specific tasks fit with the OFPP Act definition of
commercial services. Thus, benefits that attach to commercial
items will now be available not just for services sold in the
marketplace for specific tasks such asgrass cutting but for
more sophisticated services such as management consulting services use
to improve agency processes.

Section 404--Designation of commercial business entities

The section would amend section 4 of the Office of Federal
Procurement Policy Act, 41 U.S.C. 403 to add to the definition
of commercial item services or goods provided or produced by a
commercial entity that over the past 3 business years made 90%
of its sales to private-sector entities. Section 508 below
provides that the application of the exemptions from cost
accounting standards and cost or pricing data for a contract
for goods or services treated as a commercial item under this
section apply to contracts valued at up to $15,000,000. The
section would further provide for a report by the Office of
Management and Budget on the use of the authority in this
section, by agency and government-wide, and for a Comptroller
General review of the implementation of the new section to
determine its effectiveness in increasing the availability of
goods and services to the federal government at fair and
reasonable prices.

TITLE V--OTHER MATTERS

Section 501--Authority to enter into certain procurement-related
transactions and to carry out certain prototype projects

The section would amend title III of the Federal Property
and Administrative Services Act of 1949 (Property Act) (41
U.S.C. 251 et seq.) to authorize the head of a civilian
executive agency, if authorized by the Director of the Office
of Management and Budget (OMB), to enter into transactions
(other than contracts, cooperative agreements, and grants) to
carry out basic, applied and advanced research, and development
projects that are otherwise authorized and necessary to the
responsibilities of the agency that may facilitate defense
against, or recovery from, terrorism or nuclear, biological,
chemical, or radiological, attack. This authority would be
similar to that exercised by the Secretary of Defense under
section 2317 of title 10, United States Code with certain
exceptions.
The section would further amend the Property Act to provide
that the head of an executive agency, designated by the
Director of OMB to enter into transactions (other than
contracts, cooperative agreements, and grants) may, with the
approval of the Director of OMB, carryout prototype projects in
accordance with the same requirements and conditions for
prototype projects as are provided under section 845 of the
National Defense Authorization Act for Fiscal Year 1994 (Public
Law 103-160; 10 U.S.C. 2371 note).

Section 502--Amendments relating to federal emergency procurement
flexibility

The section would amend section 852, and various other
sections of subtitle F of The Homeland Security Act of 2002,
Pub. L. 107-296 to make permanent and clarify the authorities
applicable to agencies other than the Department of Homeland
Security for procurements for defense against terror. The
procurement flexibilities in subtitle F of the Homeland
Security Act, sections 851-858, provide for special streamlined
procedures for the procurement of property or services when the
head of the agency determines the property or services are to
facilitate defense against or recovery from terrorism or
nuclear, biological, chemical, or radiological attack.
The section would maintain the current expanded thresholds
in subtitle F, but would more closely align the accompanying
provisions with those in section 833 of the Homeland Security
Act that provide special streamlined acquisition authorities
for the Department of Homeland Security. Specifically, section
502 would provide for the application of the expanded
simplified acquisition threshold to acquisitions other than
those in support of humanitarian or peacekeeping or contingency
operations and eliminate notice and reservation restrictions.
The section would also provide for the application of the
attributes of a commercial item to an impacted acquisition, as
is the case in section 833 of the Homeland Security Act. This
provision would be applied in conjunction with section 508
below which provides that the application of the exemptions
from cost accounting standards and cost or pricing data for a
contract for a good or service treated as a commercial item
under this section applies to contracts valued at up to
$15,000,000.

Section 503--Authority to make inflation adjustments to simplified
acquisition threshold

The section would provide that the Administrator for
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
five years to an amount equal to $100,000 in constant fiscal
year 2003 dollars.

Section 504--Technical corrections related to duplicative amendments

The section would repeal subchapter II of chapter 35 of
title 44 of the United States Code and chapter 115 of title 40
of the United States Code. The section would also conform
various amendments made by the Homeland Security Act of 2002,
Pub.L. 107-296, with those made by the E-Government Act of
2002, Pub.L. 107-347.

Section 505--Exemption from limitations on procurement of foreign
information technology that is a commercial item

The section would provide that, in order to promote
government access to commercial information technology, the Buy
American Act (41 U.S.C.10a) restriction on the acquisition of
nondomestic products and the Trade Agreements Act of 1979
(Public Law 96-39; 19 U.S.C. 2512 (a)(1)) prohibition on
noneligible foreign products would not apply to the acquisition
of commercial information technology as defined in section
11101(6) of title 40 of the United States Code. The section
would also amend section 11101(6) by including in the
definition of information technology, equipment, interconnected
system, or subsystem of equipment used in the analysis and
evaluation of data or information and adding imaging
peripherals and certain devices necessary for security and
surveillance.

Section 506--Prohibition on the use of quotas

The section would provide that the Office of Management and
Budget (OMB) may not use a numerical goal, target, or quota for
the use of public-private competitions under OMB Circular A-76
or any other related policy unless the goal, target or quota is
based on considered research and sound analysis of past
activities and is consistent with the agency's mission. The
section further provides that it shall not affect the
implementation or enforcement of the Government Performance and
Results Act of 1993 (107 Stat.285) or prevent any agency from
subjecting work performed by federal employees or contractors
to public-private competitions or conversions.

Section 507--Public disclosure of noncompetitive contracting for the
reconstruction of infrastructure in Iraq

The section would require an agency to publish, within 30
days of award, information regarding a contract for repair,
maintenance, or construction of infrastructure in Iraq that was
awarded by the agency without full and open competition.

Section 508--Applicability of certain provisions to sole source
contracts for goods and services treated as commercial items

The section provides a ceiling of $15,000,000 per contract
for the applicability of an exemption from cost accounting
standards and cost or pricing data requirements (1) to a
contract for a service that is treated as a commercial item
under section 401 above because it is the subject of a
performance-based contact, (2) to a service or good that is
treated as a commercial item because it is provided or produced
by a commercial entity in accordance with section 404 above, or
(3) considered to be a commercial item under the emergency
procurement flexibilities in section 502 above.

Explanation of Amendments

The provisions of the substitute are explained in this
report.

Committee Consideration

On May 8, 2003, the Committee met in open session and
ordered favorably reported the bill, H.R. 1837, as amended, by
rollcall vote, a quorum being present.

Rollcall Votes

Application of Law to the Legislative Branch

Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. The bill does not prevent legislative branch employees
from receiving the benefits of this legislation.

Statement of Oversight Findings and Recommendations of the Committee

In compliance with clause 3(c)(2) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.

Statement of General Performance Goals and Objectives

Clause 3(c)(4) of rule XIII of the Rules of the House of
Representatives requires a statement of the Committee's general
performance goals and objectives for reported measures that
authorize funding. This bill does not authorize funding.

Constitutional Authority Statement

Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress to enact the law
proposed by H.R. 1837. The constitutional authority to regulate
the civil service of the Federal government lies within the
Necessary and Proper clause of Article I, Section Eight of the
United States Constitution.

Unfunded Mandate Statement

Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandate Reform Act, P.L. 104-4) requires a statement whether
the provisions of the reported include unfunded mandates. In
compliance with this requirement the Committee has received a
letter from the Congressional Budget Office included herein.

Committee Estimate

Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 1837. However, clause 3(d)(3)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act.

Budget Authority and Congressional Budget Office Cost Estimate

With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 1837 from the Director of
Congressional Budget Office:

H.R. 1837--Services Acquisition Reform Act of 2003

Summary: H.R. 1837 would amend the laws governing how the
federal government procures goods and services. The provisions
of the bill with the largest budgetary effects would expand the
authorized uses of share-in-savings (SIS) contracts by
government agencies to procure products and services and
establish a fund to train federal personnel in acquisition and
contracting positions.
CBO estimates that expanding the use of SIS contracts would
increase direct spending outlays by about $80 million over the
2004-2008 period and by a total of about $450 million over the
2004-2013 period. In addition, CBO estimates that implementing
H.R. 1837 would cost about $28 million in appropriated funds
over the 2004-2008 period, assuming appropriation of the
necessary amounts.
H.R. 1837 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 1837 is shown in the following table.
The costs of this legislation fall within budget function 800
(general government).

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------------------------------
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

Share-in-savings contracts:
Estimated budget authority............ 5 10 25 30 45 60 75 90 100 100
Estimated outlays..................... 2 6 14 24 34 48 62 77 91 98

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Acquisition workforce training program:
Estimated authorization level......... 5 5 5 5 5 6 6 6 6 6
Estimated outlays..................... 3 5 5 5 5 5 6 6 6 6
Other costs:
Estimated authorization level......... 1 1 1 1 1 * * * * *
Estimated outlays..................... 1 1 1 1 1 * * * * *
Total discretionary costs:
Estimated authorization level......... 6 6 6 6 6 6 6 6 6 6
Estimated outlays..................... 4 6 6 6 6 5 6 6 6 6
----------------------------------------------------------------------------------------------------------------
Note.--*=less than $500,000.

Basis of estimate

For this estimate, CBO assumes H.R. 1837 will be enacted by
the end of fiscal year 2003. We assume that the necessary
amounts will be appropriated for each year and that outlays
will occur at historical rates for similar programs.
Share-in-savings contracts
Section 301 would expand the authorization for the
government's use of SIS contracts to acquire goods and
services. Currently, the use of these contracts is limited to
purchasing information technology. The bill would allow
contracts to be awarded for up to 10 years.
A SIS contract is a special contracting and funding
strategy whereby a service or product required by an agency is
provided by a private firm without full up-front funding.
Instead, payment for this service or product is made by
spending some of the estimated annual savings generated by the
goods or services provided. Under H.R. 1837, agencies would be
authorized to enter into SIS contracts without funds available
for the termination cost of thecontract provided that
appropriated funds are available for the first year's payment under the
contract. The bill would limit the amount of such unfunded termination
liability to $10 million per contract (or 50 percent of the termination
costs, whichever is less).
Under current law agencies are authorized to use a limited
pilot program to enter into SIS contracts to obtain data and
information-processing equipment and services. To date, use of
the pilot program has been very limited. Because H.R. 1837
would broaden the potential use of this contracting mechanism,
CBO expects that its use would become more widespread as
agencies became familiar with it. In the mid-1980's, a similar
contracting mechanism, energy savings performance contracts
(ESPCs), was authorized by the Congress. Use of ESPCs has
accelerated overtime, and today federal agencies enter into
around $100 million worth of such contracts a year. Based on
the experience with ESPCs, CBO expects that agencies would need
a few years to become familiar with SIS contracts before use of
that type of contract would become common. We estimate that
agencies would agree to acquire about $115 million in goods and
services through SIS contracts over the next five years and
that obligations for such acquisitions would grow to $425
million over the following five years.
Because both ESPC and SIS contracts authorized agencies to
commit federal funds in advance of appropriations, CBO
considers the execution of such contracts to be a form of
direct spending that should be reflected in the budget when
such contracts are entered into and a new government obligation
is made. CBO's estimate assumes that outlays would be recorded
when the services or equipment are provided (similar to the
treatment of lease-purchases).
Spending subject to appropriation
Funding for Acquisition Workforce Training Fund. The bill
would authorize the establishment of an Acquisition Workforce
Training Fund. Under the bill, 5 percent of the fees collected
by the General Services Administration (GSA) from other,
nondefense agencies that procure goods and services through
GSA's governmentwide contracts would be deposited in the new
fund. GSA generates most of those fees by charging other
federal agencies approximately 1 percent of the cost of
purchases made through GSA's supply schedule services and data
processing contracts. That fee is designed to recover
administrative costs incurred by GSA. In 2002, GSA collected
$88 million in fees from agencies other than the Department of
Defense. Thus, CBO estimates that the bill would authorize GSA
to charge agencies a fee sufficient to establish a $5 million
Acquisition Workforce Training Fund each year, as well as
continuing to cover the administrative costs of GSA's
governmentwide contracting programs.
Government-Industry Exchange Program. H.R. 1837 would
establish an exchange program for certain types of employees
between the federal government and private-sector employers to
promote acquisition management skills. The bill would allow the
exchange of employees for between six months and two years.
Private-sector employers could be reimbursed for all or part of
their employees' assignment with the federal government.
Alternatively, H.R. 1837 would allow federal agencies to accept
voluntary employment services from private-sector employees.
Based on information from GSA and the experience of similar
exchange programs, CBO expects that few private-sector
employers would be willing to part with such employees for
extended periods of time. Thus, we estimate that this provision
would not result in significant additional costs to the
government. Any costs for reimbursing private-sector employers
would be subject to the availability of appropriated funds.
Other Costs. H.R. 1837 also would establish a new advisory
panel to review procurement policies, a Chief Acquisition
Officers Council, and a center of excellence in the Office of
Federal Procurement Policy. The bill would require implementing
regulations to be issued by GSA, the Office of Personnel
Management, and the Office of Management and Budget. In
addition, the bill would require the General Accounting Office
to prepare certain studies on procurement issues. In total, CBO
estimates that implementing these provisions would cost $1
million annually over the 2004-2008 period.
Intergovernmental and Private-sector impact: H.R. 1837
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal costs: Matthew Pickford, Lisa
Driskell, and Matthew Schmit; impact on state, local, and
tribal governments: Victoria Heid Hall; and impact on the
private sector: Paige Piper/Bach.
Estimate approved by: Robert A. Sunshine, Assistant
Director for Budget Analysis.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

OFFICE OF FEDERAL PROCUREMENT POLICY ACT

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Office of
Federal Procurement Policy Act''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title; table of contents.
* * * * * * *
[Sec. 16. Executive agency responsibilities.]
Sec. 16. Chief Acquisition Officers.
Sec. 16A. Chief Acquisition Officers Council.
* * * * * * *
[Sec. 39. Protection of constitutional rights of contractors.]
Sec. 40. Protection of constitutional rights of contractors.
Sec. 41. Incentives for efficient performance of services contracts.

* * * * * * *

SEC. 4. DEFINITIONS.

As used in this Act:
(1) * * *

* * * * * * *

(11) The term ``simplified acquisition threshold''
means $100,000, except that such amount may be adjusted
by the Administrator every five years to the amount
equal to $100,000 in constant fiscal year 2003 dollars
(rounded to the nearest $10,000).
(12) The term ``commercial item'' means any of the
following:
(A) * * *

* * * * * * *

(F) Services offered and sold competitively,
in substantial quantities, in the commercial
marketplace based on established [catalog or]
market prices for specific tasks performed or
specific outcomes to be achieved and under
standard commercial terms and conditions.

* * * * * * *

(I) Items or services produced or provided by
a commercial entity.

* * * * * * *

(16) The term ``acquisition''--
(A) means the process of acquiring, with
appropriated funds, by contract for purchase or
lease, property or services (including
construction) that support the missions and
goals of an executive agency, from the point at
which the requirements of the executive agency
are established in consultation with the chief
acquisition officer of the executive agency;
and
(B) includes--
(i) the process of 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 financing:
(vii) management and measurement of
contract performance through final
delivery and payment; and
(viii) technical and management
functions directly related to the
process of fulfilling agency
requirements by contract.
(17) The term ``commercial entity'' means any
enterprise whose primary customers are other than the
Federal Government. In order to qualify as a commercial
entity, at least 90 percent (in dollars) of the sales
of the enterprise over the past three business years
must have been made to private sector entities.

* * * * * * *

[SEC. 16. EXECUTIVE AGENCY RESPONSIBILITIES.

[To further achieve effective, efficient, and economic
administration of the Federal procurement system, the head of
each executive agency shall, in accordance with applicable
laws, Government-wide policies and regulations, and good
business practices--
[(1) increase the use of full and open competition in
the procurement 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 lowest
reasonable cost considering the nature of the property
or service procured;
[(2) establish clear lines of authority,
accountability, and responsibility for procurement
decisionmaking within the executive agency, including
placing the procurement function at a sufficiently high
level in the executive agency to provide--
[(A) direct access to the head of the major
organizational element of the executive agency
served; and
[(B) comparative equality with organizational
counterparts;
[(3) designate a senior procurement executive who
shall be responsible for management direction of the
procurement system of the executive agency, including
implementation of the unique procurement policies,
regulations, and standards of the executive agency; and
[(4) develop and maintain a procurement career
management program in the executive agency to assure an
adequate professional work force.]

SEC. 16. CHIEF ACQUISITION OFFICERS.

(a) Establishment of Agency Chief Acquisition Officers.--The
head of each executive agency (other than the Department of
Defense) shall appoint or designate a non-career employee as
Chief Acquisition Officer for the agency, who shall--
(1) have acquisition management as that official's
primary duty; and
(2) advise and assist the head of the executive
agency and other agency officials to ensure that the
mission of the executive agency is achieved through the
management of the agency's acquisition activities.
(b) Authority and Functions of Agency Chief Acquisition
Officers.--The functions of each Chief Acquisition Officer
shall include--
(1) monitoring the performance of acquisition
activities and acquisition programs of the executive
agency, evaluating the performance of those programs on
the basis of applicable performance measurements, and
advising the head of the executive agency regarding the
appropriate business strategy to achieve the mission of
the executive agency;
(2) increasing the use of full and open competition
in the acquisition of property and services by the
executive agency by establishing policies, procedures,
and practices that ensure 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 laws 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;
(5) developing and maintaining an acquisition career
management program in the executive agency to ensure
that there is an adequate professional workforce; and
(6) as part of the strategic planning and performance
evaluation process required under section 306 of title
5, United States Code, and sections 1105(a)(28), 1115,
1116, and 9703 of title 31, United States Code--
(A) assessing 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 such requirements, developing
strategies and specific plans for hiring,
training, and professional development; and
(C) reporting to the head of the executive
agency on the progress made in improving
acquisition management capability.

SEC. 16A. CHIEF ACQUISITION OFFICERS COUNCIL.

(a) Establishment.--There is established in the executive
branch a Chief Acquisition Officers Council.
(b) Membership.--The members of the Council shall be as
follows:
(1) The Deputy Director for Management of the Office
of Management and Budget, who shall act as Chairman of
the Council.
(2) The Administrator for Federal Procurement Policy.
(3) The chief acquisition officer of each executive
agency.
(4) The Under Secretary of Defense for Acquisition,
Technology, and Logistics.
(5) Any other officer or employee of the United
States designated by the Chairman.
(c) Leadership; Support.--(1) The Administrator for Federal
Procurement Policy shall lead the activities of the Council on
behalf of the Deputy Director for Management.
(2)(A) The Vice Chairman of the Council shall be selected by
the Council from among its members.
(B) The Vice Chairman shall serve a 1-year term, and may
serve multiple terms.
(3) The Administrator of General Services shall provide
administrative and other support for the Council.
(d) Principal Forum.--The Council is designated the principal
interagency forum for monitoring and improving the Federal
acquisition system.
(e) Functions.--The Council shall perform functions that
include the following:
(1) Develop recommendations for the Director of the
Office of Management and Budget on Federal acquisition
policies and requirements.
(2) Share experiences, ideas, best practices, and
innovative approaches related to Federal acquisition.
(3) Assist the Administrator in the identification,
development, and coordination of multiagency projects
and other innovative initiatives to improve Federal
acquisition.
(4) Promote effective business practices that ensure
the timely delivery of best value products to the
Federal Government and achieve appropriate public
policy objectives.
(5) Further integrity, fairness, competition,
openness, and efficiency in the Federal acquisition
system.
(6) Work with the Office of Personnel Management to
assess and address the hiring, training, and
professional development needs of the Federal
Government related to acquisition.
(7) Work with the Administrator and the Federal
Acquisition Regulatory Council to promote the business
practices referred to in paragraph (4) and other
results of the functions carried out under this
subsection.

SEC. 18. PROCUREMENT NOTICE.

(a) * * *

* * * * * * *

(c)(1) A notice is not required under subsection (a)(1) if--
(A) * * *

* * * * * * *

(G) the procurement is for the services of an expert
for use in any litigation or dispute (including any
reasonably foreseeable litigation or dispute) involving
the Federal Government in any trial, hearing, or
proceeding before any court, administrative tribunal,
or agency, or in any part of an alternative dispute
resolution process, whether or not the expert is
expected to testify; [or]
(H) the procurement is by the Secretary of Homeland
Security pursuant to the special procedures provided in
section 833(c) of the Homeland Security Act of 2002[.];
or
(I) the procurement is by the head of an executive
agency pursuant to the special procedures provided in
section 853 of the Homeland Security Act of 2002
(Public Law 107-296).

* * * * * * *

SEC. 20. ADVOCATES FOR COMPETITION.

(a)(1) There is established in each executive agency an
advocate for competition.
(2) The head of each executive agency shall--
(A) designate for the executive agency and for each
procuring activity of the executive agency one officer
or employee serving in a position authorized for such
executive agency on the date of enactment of the
Competition in Contracting Act of 1984 (other than the
[senior procurement executive] Chief Acquisition
Officer designated pursuant to section 16(3)) to serve
as the advocate for competition;

* * * * * * *

(b) The advocate for competition of an executive agency
shall--
(1) be responsible for challenging barriers to and
promoting full and open competition in the procurement
of property and services by the executive agency;
(2) review the procurement activities of the
executive agency;
(3) identify and report to the [senior procurement
executive] Chief Acquisition Officer of the executive
agency designated pursuant to section 16(3)--
(A) * * *

* * * * * * *

(4) prepare and transmit to such [senior procurement
executive] Chief Acquisition Officer an annual report
describing--
(A)
(5) recommend to the [senior procurement executive]
Chief Acquisition Officer of the executive agency goals
and the plans for increasing competition on a fiscal
year basis;
(6) recommend to the [senior procurement executive]
Chief Acquisition Officer of the executive agency a
system of personal and organizational accountability
for competition, which may include the use of
recognition and awards to motivate program managers,
contracting officers, and others in authority to
promote competition in procurement programs; and

* * * * * * *

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 disclose contractor bid or proposal
information or source selection information before the award of
a Federal agency procurement contract to which the information
relates. In the case of an employee of a private sector
organization assigned to an agency under chapter 37 or 38 of
title 5, United States Code, in addition to the restriction in
the preceding sentence, such employee shall not, other than as
provided by law, knowingly disclose contractor bid or proposal
information or source selection information during the three-
year period after the end of the assignment of such employee.

* * * * * * *

SEC. 29. CONTRACT CLAUSES AND CERTIFICATIONS.

(a) * * *

* * * * * * *

(c) Prohibition on Certification Requirements.--(1) * * *
(2)(A) A requirement for a certification by a contractor or
offeror may not be included in a procurement regulation of an
executive agency unless--
(i) * * *
(ii) written justification for such certification
requirement is provided to the head of the executive
agency by the [senior procurement executive] Chief
Acquisition Officer of the agency, and the head of the
executive agency approves in writing the inclusion of
such certification requirement.

* * * * * * *

SEC. 37. ACQUISITION WORKFORCE.

(a) * * *

* * * * * * *

(c) [Senior Procurement Executive] Chief Acquisition Officer
Authorities and Responsibilities.--Subject to the authority,
direction, and control of the head of an executive agency, the
[senior procurement executive] Chief Acquisition Officer of the
agency shall carry out all powers, functions, and duties of the
head of the agency with respect to implementation of this
section. The [senior procurement executive] Chief Acquisition
Officer shall ensure that the policies of the head of the
executive agency established in accordance with this section
are implemented throughout the agency.

* * * * * * *

(h) Education and Training.--
(1) * * *

* * * * * * *

(3) Acquisition workforce training fund.--(A) The
Administrator of General Services shall establish an
acquisition workforce training fund. The Administrator
shall manage the fund through the Federal Acquisition
Institute to support the training of the acquisition
workforce of the executive agencies other than the
Department of Defense. The Administrator shall consult
with the Administrator for Federal Procurement Policy
in managing the fund.
(B) There shall be credited to the acquisition
workforce training fund 5 percent of the fees collected
by executive agencies under the following contracts:
(i) Governmentwide task and delivery-order
contracts entered into under sections 2304a and
2304b of title 10, United States Code, or
sections 303H and 303I of the Federal Property
and Administrative Services Act of 1949 (41
U.S.C. 253h and 253i).
(ii) Governmentwide contracts for the
acquisition of information technology as
defined in section 11101 of title 40, United
States Code, and multiagency acquisition
contracts for such technology authorized by
section 11314 of such title.
(iii) Multiple-award schedule contracts
entered into by the Administrator of General
Services.
(C) The head of an executive agency that administers
a contract described in subparagraph (B) shall remit to
the General Services Administration the amount required
to be credited to the fund with respect to such
contract at the end of each quarter of the fiscal year.
(D) The Administrator of General Services, through
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).
(E) Amounts credited to the fund shall be in addition
to funds requested and appropriated for education and
training referred to in paragraph (1).
(F) Amounts credited to the fund shall remain
available until expended.
(i) Authority to Detail Employees to Non-Federal Employers.--
(1) In carrying out the provisions of this section, the
Administrator, by agreement with the Director of the Office of
Personnel Management, may provide for a program under which a
Federal employee may be detailed to a non-Federal employer. The
Administrator, by agreement with the Director of the Office of
Personnel Management, shall prescribe regulations for such
program, including the conditions for service and duties as the
Administrator considers necessary.
(2) An assignment described in section 3803 of title 5,
United States Code, may not be made unless a program under
paragraph (1) is established, and the assignment is made in
accordance with the requirements of such program.

* * * * * * *

SEC. [39.] 40. PROTECTION OF CONSTITUTIONAL RIGHTS OF CONTRACTORS.

(a) * * *

* * * * * * *

SEC. 41. INCENTIVES FOR EFFICIENT PERFORMANCE OF SERVICES CONTRACTS.

(a) Options for Services Contracts.--An option included in a
contract for services to extend the contract by one or more
periods may provide that it be exercised on the basis of
exceptional performance by the contractor. A contract that
contains such an option provision shall include performance
standards for measuring performance under the contract, and to
the maximum extent practicable be performance-based. Such
option provision shall only be exercised in accordance with
applicable provisions of law or regulation that set forth
restrictions on the duration of the contract containing the
option.
(b) Incentive for Use of Performance-Based Services
Contracts.--(1) A performance-based contract for the
procurement of services entered into by an executive agency or
a performance-based task order for services issued by an
executive agency may be treated as a contract for the
procurement of commercial items if--
(A) 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
(B) 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 regulations implementing this subsection shall
require agencies to collect and maintain reliable data
sufficient to identify the contracts or task orders treated as
contracts for commercial items using the authority of this
subsection. The data may be collected using the Federal
Procurement Data System or other reporting mechanism.
(3) Not later than two years after the date of the enactment
of this subsection, the Director of the Office of Management
and Budget shall prepare and submit to the Committees on
Governmental Affairs and on Armed Services of the Senate and
the Committees on Government Reform and on Armed Services of
the House of Representatives a report on the contracts or task
orders treated as contracts for commercial items using the
authority of this subsection. The report shall include data on
the use of such authority both government-wide and for each
department and agency.
(4) The authority under this subsection shall expire 10 years
after the date of the enactment of this subsection.
(c) Definition of Performance-Based.--In this section, the
term ``performance-based'', with respect to a contract, 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.
----------

TITLE 5, UNITED STATES CODE

* * * * * * *

PART III--EMPLOYEES

Subpart A--General Provisions

Chap. Sec.
Definitions...................................................2101
* * * * * * *

Subpart B--Employment and Retention

* * * * * * *
Acquisition Professional Exchange Program.....................3801
* * * * * * *

Subpart B--Employment and Retention

CHAPTER 31--AUTHORITY FOR EMPLOYMENT

* * * * * * *

SUBCHAPTER I--EMPLOYMENT AUTHORITIES

* * * * * * *

Sec. 3111. Acceptance of volunteer service

(a) * * *

* * * * * * *

(d) Notwithstanding section 1342 of title 31, the head of an
agency may accept voluntary service for the United States under
chapter 37 or 38 of this title and regulations of the Office of
Personnel Management.

* * * * * * *

CHAPTER 38--ACQUISITION PROFESSIONAL EXCHANGE PROGRAM

Sec.
3801. Definitions.
3802. General provisions.
3803. Assignment of employees to private sector organizations.
3804. Assignment of employees from private sector organizations.
3805. Reporting requirement.
3806. Regulations.

Sec. 3801. 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 of
an agency to a private sector organization
without a change of position from the agency
that employs the individual, or
(B) the assignment or loan of an employee of
a private sector organization to an agency
without a change of position from the private
sector organization that employs the
individual,
whichever is appropriate in the context in which such
term is used.

Sec. 3802. General provisions

(a) Assignment Authority.--On request from 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 assignment of an employee of the agency to a
private sector organization or an employee of a private sector
organization to the agency. An eligible employee is an
individual who--
(1) works in the field of Federal acquisition or
acquisition management;
(2) is considered an exceptional performer by the
individual's current employer; and
(3) is expected to assume increased acquisition
management responsibilities in the future.
An employee of an agency shall be eligible to participate in
this program only if the employee is employed at the GS-11
level or above (or equivalent) and is serving under a career or
career-conditional appointment or an appointment of equivalent
tenure in the excepted service.
(b) Agreements.--Each agency that exercises its authority
under this chapter shall provide for a written agreement
between the agency and the employee concerned regarding the
terms and conditions of the employee's assignment. 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 assignment; 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 agency from
which assigned) the employee shall be liable to the
United States for payment of all expenses of the
assignment.
An amount under paragraph (2) shall be treated as a debt due
the United States.
(c) Termination.--Assignments may be terminated by the agency
or private sector organization concerned for any reason at any
time.
(d) Duration.--Assignments under this chapter shall be for a
period of between 6 months and 1 year, and may be extended in
3-month increments for a total of not more than 1 additional
year, except that no assignment under this chapter may commence
after the end of the 5-year period beginning on the date of the
enactment of this chapter.
(e) Assistance.--The Administrator for Federal Procurement
Policy, by agreement with the Office of Personnel Management,
may assist in the administration of this chapter, including by
maintaining lists of potential candidates for assignment under
this chapter, establishing mentoring relationships for the
benefit of individuals who are given assignments under this
chapter, and publicizing the program.
(f) Considerations.--In exercising any authority under this
chapter, an agency shall take into consideration--
(1) the need to ensure that small business concerns
are appropriately represented with respect to the
assignments described in sections 3803 and 3804,
respectively; and
(2) how assignments described in section 3803 might
best be used to help meet the needs of the agency for
the training of employees in acquisition management.

Sec. 3803. Assignment of employees to private sector organizations

(a) In General.--An employee of an agency assigned to a
private sector organization under this chapter is deemed,
during the period of the assignment, to be on detail to a
regular work assignment in his agency.
(b) Coordination With Chapter 81.--Notwithstanding any other
provision of law, an employee of an agency assigned to a
private sector organization under this chapter is entitled to
retain coverage, rights, and benefits under subchapter I of
chapter 81, and employment during the assignment is deemed
employment by the United States, 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, then, the amount of such payment or benefit shall be
credited against any compensation otherwise payable under
subchapter I of chapter 81.
(c) Reimbursements.--The assignment of an employee to a
private sector organization under this chapter 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 as apply
with respect to an employee of a Federal agency or a State or
local government under section 3375, and for the pay, or a 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) Tort Liability; Supervision.--The Federal Tort Claims Act
and any other Federal tort liability statute apply to an
employee of an agency assigned to a private sector organization
under this chapter. The supervision of the duties of an
employee of an agency so assigned to a private sector
organization may be governed by an agreement between the agency
and the organization.
(e) Small Business Concerns.--
(1) In general.--The head of each agency shall take
such actions as may be necessary to ensure that, of the
assignments made under this chapter from such agency to
private sector organizations in each year, at least 20
percent are to small business concerns.
(2) Definitions.--For purposes of this subsection--
(A) the term ``small business concern'' means
a business concern that satisfies the
definitions and standards specified by the
Administrator of the Small Business
Administration under section 3(a)(2) of the
Small Business Act (as from time to time
amended by the Administrator);
(B) the term ``year'' refers to the 12-month
period beginning on the date of the enactment
of this chapter, and each succeeding 12-month
period in which any assignments under this
chapter may be made; and
(C) the assignments ``made'' in a year are
those commencing in such year.
(3) Reporting requirement.--An agency which fails to
comply with paragraph (1) in a year shall, within 90
days after the end of such year, submit a report to the
Committees on Government Reform and Small Business of
the House of Representatives and the Committees on
Governmental Affairs and Small Business of the Senate.
The report shall include--
(A) the total number of assignments made
under this chapter from such agency to private
sector organizations in the year;
(B) of that total number, the number (and
percentage) made to small business concerns;
and
(C) the reasons for the agency's
noncompliance with paragraph (1).
(4) Exclusion.--This subsection shall not apply to an
agency in any year in which it makes fewer than 5
assignments under this chapter to private sector
organizations.

Sec. 3804. Assignment of employees from private sector organizations

(a) In General.--An employee of a private sector organization
assigned to an agency under this chapter is deemed, during the
period of the assignment, to be on detail to such agency.
(b) Terms and Conditions.--An employee of a private sector
organization assigned to an agency under this chapter--
(1) may continue to receive pay and benefits from the
private sector organization from which he is assigned;
(2) is deemed, notwithstanding subsection (a), to be
an employee of the agency for the purposes of--
(A) chapter 73;
(B) sections 201, 203, 205, 207, 208, 209,
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 statute;
(E) the Ethics in Government Act of 1978;
(F) section 1043 of the Internal Revenue Code
of 1986; and
(G) section 27 of the Office of Federal
Procurement Policy Act;
(3) may not have access to any trade secrets or to
any other nonpublic information which is of commercial
value to the private sector organization from which he
is assigned; and
(4) is subject to such regulations as the President
may prescribe.
The supervision of an employee of a private sector organization
assigned to an agency under this chapter may be governed by
agreement between the agency and the private sector
organization concerned. Such an assignment 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.
(c) Coordination With Chapter 81.--An employee of a private
sector organization assigned to an agency under this chapter
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, then, the amount of such payment or benefit shall be
credited against any compensation otherwise payable under
subchapter I of chapter 81.
(d) Prohibition Against Charging Certain Costs to the Federal
Government.--A private sector organization may not charge the
Federal Government, as direct or indirect costs under a Federal
contract, the costs of pay or benefits paid by the organization
to an employee assigned to an agency under this chapter for the
period of the assignment.

Sec. 3805. Reporting requirement

(a) In General.--The Office of Personnel Management shall,
not later than April 30 and October 31 of each year, prepare
and submit to the Committee on Government Reform of the House
of Representatives and the Committee on Governmental Affairs of
the Senate a semiannual report summarizing the operation of
this chapter during the immediately preceding 6-month period
ending on March 31 and September 30, respectively.
(b) Content.--Each report shall include, with respect to the
6-month period to which such report relates--
(1) the total number of individuals assigned to, and
the total number of individuals assigned from, each
agency during such period;
(2) a brief description of each assignment included
under paragraph (1), including--
(A) the name of the assigned individual, as
well as the private sector organization and the
agency (including the specific bureau or other
agency component) to or from which such
individual was assigned;
(B) the respective positions to and from
which the individual was assigned, including
the duties and responsibilities and the pay
grade or level associated with each; and
(C) the duration and objectives of the
individual's assignment; and
(3) such other information as the Office considers
appropriate.
(c) Publication.--A copy of each report submitted under
subsection (a)--
(1) shall be published in the Federal Register; and
(2) shall be made publicly available on the Internet.
(d) Agency Cooperation.--On request of the Office, agencies
shall furnish such information and reports as the Office may
require in order to carry out this section.

Sec. 3806. Regulations

The Director of the Office of Personnel Management shall
prescribe regulations for the administration of this chapter.

* * * * * * *

Subpart F--Labor-Management and Employee Relations

* * * * * * *

CHAPTER 73--SUITABILITY, SECURITY, AND CONDUCT

* * * * * * *

SUBCHAPTER V--MISCONDUCT

* * * * * * *

Sec. 7353. Gifts to Federal employees

(a) * * *
(b)(1) * * *

* * * * * * *

(4) Nothing in this section precludes an employee of a
private sector organization, while assigned to an agency under
chapter 37 or 38, from continuing to receive pay and benefits
from such organization in accordance with such chapter.

* * * * * * *

----------

TITLE 18, UNITED STATES CODE

* * * * * * *

PART I--CRIMES

* * * * * * *

CHAPTER 11--BRIBERY, GRAFT, AND CONFLICTS OF INTEREST

* * * * * * *

Sec. 207. Restrictions on former officers, employees, and elected
officials of the executive and legislative branches

(a) * * *

* * * * * * *

(c) One-Year Restrictions on Certain Senior Personnel of the
Executive Branch and Independent Agencies.--
(1) * * *
(2) Persons to whom restrictions apply.--(A)
Paragraph (1) shall apply to a person (other than a
person subject to the restrictions of subsection (d))--
(i) * * *

* * * * * * *

(v) assigned from a private sector
organization to an agency under chapter 37 or
38 of title 5.

* * * * * * *

(l) Contract Advice by Former [Details] Detailees.--Whoever,
being an employee of a private sector organization assigned to
an agency under chapter 37 or 38 of title 5, within one year
after the end of that assignment, knowingly represents or aids,
counsels, or assists in representing any other person (except
the United States) in connection with any contract with that
agency shall be punished as provided in section 216 of this
title.

* * * * * * *

Sec. 209. Salary of Government officials and employees payable only by
United States

(a) * * *

* * * * * * *

(g)(1) This section does not prohibit an employee of a
private sector organization, while assigned to an agency under
chapter 37 or 38 of title 5, from continuing to receive pay and
benefits from such organization in accordance with such
chapter.
[(2) For purposes of this subsection, the term ``agency''
means an agency (as defined by section 3701 of title 5) and the
Office of the Chief Technology Officer of the District of
Columbia.]
(2) For purposes of this subsection, the term ``agency''--
(A) with respect to assignments under chapter 37 of
title 5, means an agency (as defined in section 3701 of
title 5) and the Office of the Chief Technology Officer
of the District of Columbia; and
(B) with respect to assignments under chapter 38 of
title 5, means an agency (as defined by section 3801 of
title 5).

* * * * * * *

CHAPTER 93--PUBLIC OFFICERS AND EMPLOYEES

* * * * * * *

Sec. 1905. Disclosure of confidential information generally

Whoever, being an officer or employee of the United States or
of any department or agency thereof, any person acting on
behalf of the Office of Federal Housing Enterprise Oversight,
or agent of the Department of Justice as defined in the
Antitrust Civil Process Act (15 U.S.C. 1311-1314), or being an
employee of a private sector organization who is or was
assigned to an agency under chapter 37 or 38 of title 5,
publishes, divulges, discloses, or makes known in any manner or
to any extent not authorized by law any information coming to
him in the course of his employment or official duties or by
reason of any examination or investigation made by, or return,
report or record made to or filed with, such department or
agency or officer or employee thereof, which information
concerns or relates to the trade secrets, processes,
operations, style of work, or apparatus, or to the identity,
confidential statistical data, amount or source of any income,
profits, losses, or expenditures of any person, firm,
partnership, corporation, or association; or permits any income
return or copy thereof or any book containing any abstract or
particulars thereof to be seen or examined by any person except
as provided by law; shall be fined under this title, or
imprisoned not more than one year, or both; and shall be
removed from office or employment.

* * * * * * *

----------

SECTION 125 OF THE ACT OF JANUARY 8, 1988

(Public Law 100-238)

A bill making technical corrections relating to the Federal Employees'
Retirement System, and for other purposes.

SEC. 125. ELIGIBILITY OF CERTAIN INDIVIDUALS TO PARTICIPATE IN THE
THRIFT SAVINGS PLAN.

(a) * * *

* * * * * * *

(c) Applicability.--This section applies with respect to--
(1) any individual participating in the Civil Service
Retirement System or the Federal Employees' Retirement
System as--
(A) * * *

* * * * * * *

(D) an individual assigned from a Federal
agency to a private sector organization under
chapter 37 or 38 of title 5, United States
Code; and

* * * * * * *

----------

FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949

TITLE III--PROCUREMENT PROCEDURE

* * * * * * *

SEC. 302C. IMPLEMENTATION OF FACNET CAPABILITY.

(a) * * *
(b) Designation of Agency Official.--The head of each
executive agency shall designate a program manager to have
responsibility for implementation of FACNET capability for that
agency and otherwise to implement this section. Such program
manager shall report directly to the [senior procurement
executive] Chief Acquisition Officer designated for the
executive agency under section 16(3) of the Office of Federal
Procurement Policy Act (41 U.S.C. 414(3)).

* * * * * * *

SEC. 303. COMPETITION REQUIREMENTS.

(a) * * *

* * * * * * *

(f)(1) Except as provided in paragraph (2), an executive
agency may not award a contract using procedures other than
competitive procedures unless--
(A) * * *
(B) the justification is approved--
(i) * * *

* * * * * * *

SEC. 303N. PROTESTS.

(a) In General.--An interested party may protest an
acquisition of supplies or services by an executive agency
based on an alleged violation of an acquisition law or
regulation, and a decision regarding such alleged violation
shall be made by the agency in accordance with this section.
(b) Restriction on Contract Award Pending Decision.--(1)
Except as provided in paragraph (2), a contract may not be
awarded by an agency after a protest concerning the acquisition
has been submitted under this section and while the protest is
pending.
(2) The head of the acquisition activity responsible for the
award of a contract may authorize the award of the contract,
notwithstanding a pending protest under this section, upon
making a written finding that urgent and compelling
circumstances do not allow for waiting for a decision on the
protest.
(c) Restriction on Contract Performance Pending Decision.--
(1) Except as provided in paragraph (2), performance of a
contract may 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 under this
section before the later of--
(A) the date that is 10 days after the date of
contract award; or
(B) the date that is five days after an agency
debriefing date offered to an unsuccessful offeror for
any debriefing that is requested and, when requested,
is required, under section 303B(e) of this title.
(2) The head of the acquisition activity responsible for the
award of a contract may authorize performance of the contract
notwithstanding a pending protest under this section upon
making a written finding that urgent and compelling
circumstances do not allow for waiting for a decision on the
protest.
(d) Deadline for Decision.--The head of an executive agency
shall issue a decision on a protest under this section not
later than the date that is 20 working days after the date on
which the protest is submitted to the executive agency.
(e) Construction.--Nothing in this section shall affect the
right of an interested party to file a protest with the
Comptroller General under subchapter V of chapter 35 of title
31, United States Code, or in the United States Court of
Federal Claims.
(f) Definitions.--In this section, the terms ``protest'' and
``interested party'' have the meanings given such terms in
section 3551 of title 31, United States Code.

* * * * * * *

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

[(a) Authority To Enter Into Share-in-Savings Contracts.--(1)
The head of an executive agency may enter into a share-in-
savings contract for information technology (as defined in
section 11101(6) of title 40, United States Code) in which the
Government awards a contract to improve mission-related or
administrative processes or to accelerate the achievement of
its mission and share with the contractor in savings achieved
through contract performance.
[(2)(A) Except as provided in subparagraph (B), a share-in-
savings contract shall be awarded for a period of not more than
five years.
[(B) A share-in-savings contract may be awarded for a period
greater than five years, but not more than 10 years, if the
head of the agency determines in writing prior to award of the
contract that--
[(i) the level of risk to be assumed and the
investment to be undertaken by the contractor is likely
to inhibit the government from obtaining the needed
information technology competitively at a fair and
reasonable price if the contract is limited in duration
to a period of five years or less; and
[(ii) usage of the information technology to be
acquired is likely to continue for a period of time
sufficient to generate reasonable benefit for the
government.
[(3) Contracts awarded pursuant to the authority of this
section shall, to the maximum extent practicable, be
performance-based contracts that identify objective outcomes
and contain performance standards that will be used to measure
achievement and milestones that must be met before payment is
made.
[(4) Contracts awarded pursuant to the authority of this
section shall include a provision containing a quantifiable
baseline that is to be the basis upon which a savings share
ratio is established that governs the amount of payment a
contractor is to receive under the contract. Before
commencement of performance of such a contract, the senior
procurement executive of the agency shall determine in writing
that the terms of the provision are quantifiable and will
likely yield value to the Government.
[(5)(A) The head of the 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, but may not retain any
portion of such savings that is attributable to a decrease in
the number of civilian employees of the Federal Government
performing the function. Except as provided in subparagraph
(B), savings shall be credited to the appropriation or fund
against which charges were made to carry out the contract and
shall be used for information technology.
[(B) Amounts retained by the agency under this subsection
shall--
[(i) without further appropriation, remain available
until expended; and
[(ii) be applied first to fund any contingent
liabilities associated with share-in-savings
procurements that are not fully funded.
[(b) Cancellation and Termination.--(1) 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--
[(A) appropriations available for the performance of
the contract;
[(B) appropriations available for acquisition of the
information technology procured under the contract, and
not otherwise obligated; or
[(C) funds subsequently appropriated for payments of
costs of cancellation or termination, subject to the
limitations in paragraph (3).
[(2) 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.
[(3)(A) Subject to subparagraph (B), the head of an executive
agency may enter into share-in-savings contracts under this
section in any given fiscal year even if funds are not made
specifically available for the full 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 and the following conditions are met
regarding the funding of cancellation and termination
liability:
[(i) The amount of unfunded contingent liability for
the contract does not exceed the lesser of--
[(I) 25 percent of the estimated costs of a
cancellation or termination; or
[(II) $5,000,000.
[(ii) Unfunded contingent liability in excess of
$1,000,000 has been approved by the Director of the
Office of Management and Budget or the Director's
designee.
[(B) The aggregate number of share-in-savings contracts that
may be entered into under subparagraph (A) by all executive
agencies to which this chapter applies in a fiscal year may not
exceed 5 in each of fiscal years 2003, 2004, and 2005.
[(c) 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 (other than enhanced revenues from the
collection of fees, taxes, debts, claims, or
other amounts owed the Federal Government).
[(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 head of 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.
[(d) Termination.--No share-in-savings contracts may be
entered into under this section after September 30, 2005.]

SEC. 317. SHARE-IN-SAVINGS CONTRACTS.

(a) Authority To Enter Into Share-in-Savings Contracts.--(1)
The head of an executive agency may enter into a share-in-
savings contract in which the Government awards a contract to
improve mission-related or administrative processes or to
accelerate the achievement of its mission and share with the
contractor in savings achieved through contract performance.
(2)(A) Except as provided in subparagraph (B), a share-in-
savings contract shall be awarded for a period of not more than
five years.
(B) A share-in-savings contract may be awarded for a period
greater than five years, but not more than 10 years, if the
head of the agency determines in writing prior to award of the
contract that--
(i) the level of risk to be assumed and the
investment to be undertaken by the contractor is likely
to inhibit the government from obtaining the needed
performance competitively at a fair and reasonable
price if the contract is limited in duration to a
period of five years or less; and
(ii) the performance to be acquired is likely to
continue for a period of time sufficient to generate
reasonable benefit for the government.
(3) Contracts awarded pursuant to the authority of this
section shall, to the maximum extent practicable, be
performance-based contracts that identify objective outcomes
and contain performance standards that will be used to measure
achievement and milestones that must be met before payment is
made.
(4) Contracts awarded pursuant to the authority of this
section shall include a provision containing a quantifiable
baseline that is to be the basis upon which a savings share
ratio is established that governs the amount of payment a
contractor is to receive under the contract. Before
commencement of performance of such a contract, the chief
acquisition officer of the agency shall determine in writing
that the terms of the provision are quantifiable and will
likely yield value to the Government.
(5)(A) The head of the 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. Except as provided in
subparagraph (B), savings shall be credited to the
appropriation or fund against which charges were made to carry
out the contract.
(B) Amounts retained by the agency under this subsection
shall--
(i) without further appropriation, remain available
until expended; and
(ii) be applied first to fund any contingent
liabilities associated with share-in-savings
procurements that are not fully funded.
(b) Cancellation and Termination.--(1) 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--
(A) appropriations available for the performance of
the contract;
(B) appropriations available for acquisition of the
type of property or services procured under the
contract, and not otherwise obligated; or
(C) funds subsequently appropriated for payments of
costs of cancellation or termination, subject to the
limitations in paragraph (3).
(2) 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.
(3) The head of an executive agency may enter into share-in-
savings contracts under this section in any given fiscal year
even if funds are not made specifically available for the full
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 and the following
conditions are met regarding the funding of cancellation and
termination liability:
(A) The amount of unfunded contingent liability for
the contract does not exceed the lesser of--
(i) 50 percent of the estimated costs of a
cancellation or termination; or
(ii) $10,000,000.
(B) Unfunded contingent liability in excess of
$5,000,000 has been approved by the Director of the
Office of Management and Budget or the Director's
designee.
(c) 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 head of 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.

SEC. 318. PRODUCTS OF FEDERAL PRISON INDUSTRIES: PROCEDURAL
REQUIREMENTS.

(a) Market Research.--Before purchasing a product listed in
the latest edition of the Federal Prison Industries catalog
under section 4124(d) of title 18, United States Code, the head
of an executive agency shall conduct market research to
determine whether the Federal Prison Industries product is
comparable to products available from the private sector that
best meet the executive agency's needs in terms of price,
quality, and time of delivery.
(b) Competition Requirement.--If the head of the executive
agency determines that a Federal Prison Industries product is
not comparable in price, quality, or time of delivery to
products available from the private sector that best meet the
executive agency's needs in terms of price, quality, and time
of delivery, the agency head shall use competitive procedures
for the procurement of the product or shall make an individual
purchase under a multiple award contract. In conducting such a
competition or making such a purchase, the agency head shall
consider a timely offer from Federal Prison Industries.
(c) Implementation by Head of Executive Agency.--The head of
an executive agency shall ensure that--
(1) the executive agency does not purchase a Federal
Prison Industries product or service unless a
contracting officer of the agency determines that the
product or service is comparable to products or
services available from the private sector that best
meet the agency's needs in terms of price, quality, and
time of delivery; and
(2) Federal Prison Industries performs its
contractual obligations to the same extent as any other
contractor for the executive agency.
(d) Market Research Determination Not Subject to Review.--A
determination by a contracting officer regarding whether a
product or service offered by Federal Prison Industries is
comparable to products or services available from the private
sector that best meet an executive agency's needs in terms of
price, quality, and time of delivery shall not be subject to
review pursuant to section 4124(b) of title 18.
(e) Performance as a Subcontractor.--(1) A contractor or
potential contractor of an executive agency may not be required
to use Federal Prison Industries as a subcontractor or supplier
of products or provider of services for the performance of a
contract of the executive agency by any means, including means
such as--
(A) a contract solicitation provision requiring a
contractor to offer to make use of products or services
of Federal Prison Industries in the performance of the
contract;
(B) a contract specification requiring the contractor
to use specific products or services (or classes of
products or services) offered by Federal Prison
Industries in the performance of the contract; or
(C) any contract modification directing the use of
products or services of Federal Prison Industries in
the performance of the contract.
(2) In this subsection, the term ``contractor'', with respect
to a contract, includes a subcontractor at any tier under the
contract.
(f) Protection of Classified and Sensitive Information.--The
head of an executive agency may not enter into any contract
with Federal Prison Industries under which an inmate worker
would have access to--
(1) any data that is classified;
(2) any geographic data regarding the location of--
(A) surface and subsurface infrastructure
providing communications or water or electrical
power distribution;
(B) pipelines for the distribution of natural
gas, bulk petroleum products, or other
commodities; or
(C) other utilities; or
(3) any personal or financial information about any
individual private citizen, including information
relating to such person's real property however
described, without the prior consent of the individual.
(g) Definitions.--In this section:
(1) The term ``competitive procedures'' has the
meaning given such term in section 4(5) of the Office
of Federal Procurement Policy Act (41 U.S.C. 403(5)).
(2) The term ``market research'' means obtaining
specific information about the price, quality, and time
of delivery of products available in the private sector
through a variety of means, which may include--
(A) contacting knowledgeable individuals in
government and industry;
(B) interactive communication among industry,
acquisition personnel, and customers; and
(C) interchange meetings or pre-solicitation
conferences with potential offerors.

SEC. 319. AUTHORITY TO ENTER INTO CERTAIN TRANSACTIONS FOR DEFENSE
AGAINST OR RECOVERY FROM TERRORISM OR NUCLEAR,
BIOLOGICAL, CHEMICAL, OR RADIOLOGICAL ATTACK.

(a) Authority.--
(1) In general.--The head of an executive agency who
engages 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, or radiological attack,
may exercise the same authority (subject to the same
restrictions and conditions) with respect to such
research and projects as the Secretary of Defense may
exercise under section 2371 of title 10, United States
Code, except for subsections (b) and (f) of such
section 2371.
(2) Prototype projects.--The head of an executive
agency may, under the authority of paragraph (1), carry
out prototype projects that meet the requirements of
subparagraphs (A) and (B) of paragraph (1) in
accordance with the requirements and conditions
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). In applying the requirements and conditions
of that section 845--
(A) subsection (c) of that section shall
apply with respect to prototype projects
carried out under this paragraph; and
(B) the Director of the Office of Management
and Budget shall perform the functions of the
Secretary of Defense under subsection (d) of
that section.
(3) Applicability to selected executive agencies.--
(A) OMB authorization required.--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) Relationship to authority of department
of homeland security.--The authority under this
subsection shall not apply to the Secretary of
Homeland Security while section 831 of the
Homeland Security Act of 2002 (Public Law 107-
296; 116 Stat. 2224) is in effect.
(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 the 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.

* * * * * * *

----------

TITLE 10, UNITED STATES CODE

* * * * * * *

PART I--ORGANIZATION AND GENERAL MILITARY POWERS

* * * * * * *

CHAPTER 1--DEFINITIONS

* * * * * * *

Sec. 133. Under Secretary of Defense for Acquisition, Technology, and
Logistics

(a) * * *

* * * * * * *

(c) The Under Secretary--
(1) is the [senior procurement executive] Chief
Acquisition Officer for the Department of Defense for
the purposes of section 16(3) of the Office of Federal
Procurement Policy Act (41 U.S.C. 414(3));

* * * * * * *

PART IV--SERVICE, SUPPLY, AND PROCUREMENT

* * * * * * *

CHAPTER 131--PLANNING AND COORDINATION

Sec.
2201. Apportionment of funds: authority for exemption; excepted
expenses.
* * * * * * *
[2224a. Information security: continued applicability of expiring
Governmentwide requirements to the Department of Defense.]

* * * * * * *

Sec. 2224. Defense Information Assurance Program

(a) * * *

* * * * * * *

(c) Program Strategy.--In carrying out the program, the
Secretary shall develop a program strategy that encompasses
those actions necessary to assure the readiness, reliability,
continuity, and integrity of Defense information systems,
networks, and infrastructure, including through compliance with
subtitle II of chapter 35 of title 44, including through
compliance with subchapter [III] II of chapter 35 of title 44.
The program strategy shall include the following:
(1) * * *

* * * * * * *

[Sec. 2224a. Information security: continued applicability of expiring
Governmentwide requirements to the Department of
Defense

[(a) In General.--The provisions of subchapter II of chapter
35 of title 44 shall continue to apply through September 30,
2004, with respect to the Department of Defense,
notwithstanding the expiration of authority under section 3536
of such title.
[(b) Responsibilities.--In administering the provisions of
subchapter II of chapter 35 of title 44 with respect to the
Department of Defense after the expiration of authority under
section 3536 of such title, the Secretary of Defense shall
perform the duties set forth in that subchapter for the
Director of the Office of Management and Budget.]

* * * * * * *

Sec. 2225. Information technology purchases: tracking and management

(a) * * *

* * * * * * *

(d) Limitation on Certain Purchases.--No purchase of
information technology products or services in excess of the
simplified acquisition threshold shall be made for the
Department of Defense from a Federal agency outside the
Department of Defense unless--
(1) * * *
(2)(A) * * *
(B) in the case of a purchase by a military
department, the purchase is approved by the [senior
procurement executive] Chief Acquisition Officer of the
military department.

* * * * * * *

(f ) Definitions.--In this section:
(1) The term ``[senior procurement executive] Chief
Acquisition Officer'', with respect to a military
department, means the official designated as the
[senior procurement executive] Chief Acquisition
Officer for the military department for the purposes of
section 16(3) of the Office of Federal Procurement
Policy Act (41 U.S.C. 414(3)).

* * * * * * *

CHAPTER 137--PROCUREMENT GENERALLY

Sec.
2302. Definitions.
* * * * * * *
2305b. Protests.
* * * * * * *

Sec. 2302c. Implementation of electronic commerce capability

(a) * * *
(b) Designation of Agency Official.--The head of each agency
named in paragraph (5) or (6) of section 2303(a) this title
shall designate a program manager to implement the electronic
commerce capability for that agency. The program manager shall
report directly to an official at a level not lower than the
[senior procurement executive] Chief Acquisition Officer
designated for the agency under section 16(3) of the Office of
Federal Procurement Policy Act (41 U.S.C. 414(3)).

* * * * * * *

Sec. 2304. Contracts: competition requirements

(a) * * *

* * * * * * *

(f)(1) Except as provided in paragraph (2), the head of an
agency may not award a contract using procedures other than
competitive procedures unless--
(A) * * *
(B) the justification is approved--
(i) * * *

* * * * * * *

(iii) in the case of a contract for an amount
exceeding $50,000,000, by the [senior
procurement executive] Chief Acquisition
Officer of the agency designated pursuant to
section 16(3) of the Office of Federal
Procurement Policy Act (41 U.S.C. 414(3))
(without further delegation) or in the case of
the Under Secretary of Defense for Acquisition,
Technology, and Logistics, acting in his
capacity as the [senior procurement executive]
Chief Acquisition Officer for the Department of
Defense, the Under Secretary's delegate
designated pursuant to paragraph (6)(B); and

* * * * * * *

Sec. 2305b. Protests

(a) In General.--An interested party may protest an
acquisition of supplies or services by an agency based on an
alleged violation of an acquisition law or regulation, and a
decision regarding such alleged violation shall be made by the
agency in accordance with this section.
(b) Restriction on Contract Award Pending Decision.--(1)
Except as provided in paragraph (2), a contract may not be
awarded by an agency after a protest concerning the acquisition
has been submitted under this section and while the protest is
pending.
(2) The head of the acquisition activity responsible for the
award of the contract may authorize the award of a contract,
notwithstanding pending protest under this section, upon making
a written finding that urgent and compelling circumstances do
not allow for waiting for a decision on the protest.
(c) Restriction on Contract Performance Pending Decision.--
(1) Except as provided in paragraph (2), performance of a
contract may 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 under this
section before the later of--
(A) the date that is 10 days after the date of
contract award; or
(B) the date that is five days after an agency
debriefing date offered to an unsuccessful offeror for
any debriefing that is requested and, when requested,
is required, under section 2305(b)(5) of this title.
(2) The head of the acquisition activity responsible for the
award of a contract may authorize performance of the contract
notwithstanding a pending protest under this section upon
making a written finding that urgent and compelling
circumstances do not allow for waiting for a decision on the
protest.
(d) Deadline for Decision.--The head of an agency shall issue
a decision on a protest under this section not later than the
date that is 20 working days after the date on which the
protest is submitted to such head of an agency.
(e) Construction.--Nothing in this section shall affect the
right of an interested party to file a protest with the
Comptroller General under subchapter V of chapter 35 of title
31 or in the United States Court of Federal Claims.
(f) Definitions.--In this section, the terms ``protest'' and
``interested party'' have the meanings given such terms in
section 3551 of title 31.

* * * * * * *

[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 information technology (as defined in section
11101(6) of title 40) in which the Government awards a contract
to improve mission-related or administrative processes or to
accelerate the achievement of its mission and share with the
contractor in savings achieved through contract performance.
[(2)(A) Except as provided in subparagraph (B), a share-in-
savings contract shall be awarded for a period of not more than
five years.
[(B) A share-in-savings contract may be awarded for a period
greater than five years, but not more than 10 years, if the
head of the agency determines in writing prior to award of the
contract that--
[(i) the level of risk to be assumed and the
investment to be undertaken by the contractor is likely
to inhibit the government from obtaining the needed
information technology competitively at a fair and
reasonable price if the contract is limited in duration
to a period of five years or less; and
[(ii) usage of the information technology to be
acquired is likely to continue for a period of time
sufficient to generate reasonable benefit for the
government.
[(3) Contracts awarded pursuant to the authority of this
section shall, to the maximum extent practicable, be
performance-based contracts that identify objective outcomes
and contain performance standards that will be used to measure
achievement and milestones that must be met before payment is
made.
[(4) Contracts awarded pursuant to the authority of this
section shall include a provision containing a quantifiable
baseline that is to be the basis upon which a savings share
ratio is established that governs the amount of payment a
contractor is to receive under the contract. Before
commencement of performance of such a contract, the senior
procurement executive of the agency shall determine in writing
that the terms of the provision are quantifiable and will
likely yield value to the Government.
[(5)(A) The head of the 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, but may not retain any
portion of such savings that is attributable to a decrease in
the number of civilian employees of the Federal Government
performing the function. Except as provided in subparagraph
(B), savings shall be credited to the appropriation or fund
against which charges were made to carry out the contract and
shall be used for information technology.
[(B) Amounts retained by the agency under this subsection
shall--
[(i) without further appropriation, remain available
until expended; and
[(ii) be applied first to fund any contingent
liabilities associated with share-in-savings
procurements that are not fully funded.
[(b) Cancellation and Termination.--(1) 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--
[(A) appropriations available for the performance of
the contract;
[(B) appropriations available for acquisition of the
information technology procured under the contract, and
not otherwise obligated; or
[(C) funds subsequently appropriated for payments of
costs of cancellation or termination, subject to the
limitations in paragraph (3).
[(2) 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.
[(3)(A) Subject to subparagraph (B), the head of an agency
may enter into share-in-savings contracts under this section in
any given fiscal year even if funds are not made specifically
available for the full 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
and the following conditions are met regarding the funding of
cancellation and termination liability:
[(i) The amount of unfunded contingent liability for
the contract does not exceed the lesser of--
[(I) 25 percent of the estimated costs of a
cancellation or termination; or
[(II) $5,000,000.
[(ii) Unfunded contingent liability in excess of
$1,000,000 has been approved by the Director of the
Office of Management and Budget or the Director's
designee.
[(B) The aggregate number of share-in-savings contracts that
may be entered into under subparagraph (A) by all agencies to
which this chapter applies in a fiscal year may not exceed 5 in
each of fiscal years 2003, 2004, and 2005.
[(c) 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 (other than enhanced revenues from the
collection of fees, taxes, debts, claims, or
other amounts owed the Federal Government).
[(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 head of 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.
[(d) Termination.--No share-in-savings contracts may be
entered into under this section after September 30, 2005.]

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 in which the Government awards a contract to improve
mission-related or administrative processes or to accelerate
the achievement of its mission and share with the contractor in
savings achieved through contract performance.
(2)(A) Except as provided in subparagraph (B), a share-in-
savings contract shall be awarded for a period of not more than
five years.
(B) A share-in-savings contract may be awarded for a period
greater than five years, but not more than 10 years, if the
head of the agency determines in writing prior to award of the
contract that--
(i) the level of risk to be assumed and the
investment to be undertaken by the contractor is likely
to inhibit the government from obtaining the needed
performance competitively at a fair and reasonable
price if the contract is limited in duration to a
period of five years or less; and
(ii) the performance to be acquired is likely to
continue for a period of time sufficient to generate
reasonable benefit for the government.
(3) Contracts awarded pursuant to the authority of this
section shall, to the maximum extent practicable, be
performance-based contracts that identify objective outcomes
and contain performance standards that will be used to measure
achievement and milestones that must be met before payment is
made.
(4) Contracts awarded pursuant to the authority of this
section shall include a provision containing a quantifiable
baseline that is to be the basis upon which a savings share
ratio is established that governs the amount of payment a
contractor is to receive under the contract. Before
commencement of performance of such a contract, the chief
acquisition officer of the agency shall determine in writing
that the terms of the provision are quantifiable and will
likely yield value to the Government.
(5)(A) The head of the 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. Except as provided in
subparagraph (B), savings shall be credited to the
appropriation or fund against which charges were made to carry
out the contract.
(B) Amounts retained by the agency under this subsection
shall--
(i) without further appropriation, remain available
until expended; and
(ii) be applied first to fund any contingent
liabilities associated with share-in-savings
procurements that are not fully funded.
(b) Cancellation and Termination.--(1) 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--
(A) appropriations available for the performance of
the contract;
(B) appropriations available for acquisition of the
type of property or services procured under the
contract, and not otherwise obligated; or
(C) funds subsequently appropriated for payments of
costs of cancellation or termination, subject to the
limitations in paragraph (3).
(2) 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.
(3) The head of an agency may enter into share-in-savings
contracts under this section in any given fiscal year even if
funds are not made specifically available for the full 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 and the following conditions
are met regarding the funding of cancellation and termination
liability:
(A) The amount of unfunded contingent liability for
the contract does not exceed the lesser of--
(i) 50 percent of the estimated costs of a
cancellation or termination; or
(ii) $10,000,000.
(B) Unfunded contingent liability in excess of
$5,000,000 has been approved by the Director of the
Office of Management and Budget or the Director's
designee.
(c) 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 head of 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.

* * * * * * *

CHAPTER 138--COOPERATIVE AGREEMENTS WITH NATO ALLIES AND OTHER
COUNTRIES

* * * * * * *

Sec. 2359a. Technology Transition Initiative

(a) * * *

* * * * * * *

(i) Definition.--In this section, the term ``acquisition
executive'', with respect to a military department or Defense
Agency, means the official designated as the [senior
procurement executive] Chief Acquisition Officer for that
military department or Defense Agency for the purposes of
section 16(3) of the Office of Federal Procurement Policy Act
(41 U.S.C. 414(3)).

* * * * * * *

CHAPTER 169--MILITARY CONSTRUCTION AND MILITARY FAMILY HOUSING

* * * * * * *

Sec. 2855. Law applicable to contracts for architectural and
engineering services and construction design

(a) * * *
(b)(1) * * *
(2) The initial threshold amount under paragraph (1) is
[$85,000] $300,000. The Secretary of Defense may revise that
amount in order to ensure that small business concerns receive
a reasonable share of contracts referred to in subsection (a).

* * * * * * *

(4) The selection and competition requirements described in
subsection (a) shall apply to any contract for architectural
and engineering services (including surveying and mapping
services) that is entered into by the head of an agency (as
such term is defined in section 2302 of this title).

* * * * * * *

----------

TITLE 31, UNITED STATES CODE

* * * * * * *

SUBTITLE II--THE BUDGET PROCESS

* * * * * * *

Sec. 1115. Performance plans

(a) In carrying out the provisions of [section 1105(a)(29)]
section 1105(a)(28), the Director of the Office of Management
and Budget shall require each agency to prepare an annual
performance plan covering each program activity set forth in
the budget of such agency. Such plan shall--
(1) * * *

* * * * * * *

SUBTITLE III--FINANCIAL MANAGEMENT

* * * * * * *

CHAPTER 35--ACCOUNTING AND COLLECTION

* * * * * * *

SUBCHAPTER V--PROCUREMENT PROTEST SYSTEM

* * * * * * *

Sec. 3553. Review of protests; effect on contracts pending decision

(a) * * *

* * * * * * *

(d)(1) * * *

* * * * * * *

(4) The period referred to in paragraphs (2) and (3)(A), with
respect to a contract, is the period beginning on the date of
the contract award and ending on the later of--
(A) the date that is 10 days after the date of the
contract award; [or]
(B) the date that is 5 days after the debriefing date
offered to an unsuccessful offeror for any debriefing
that is requested and, when requested, is required[.];
or
(C) in the case of a protest of the same matter
regarding such contract that is submitted under section
2305b of title 10 or section 303N of the Federal
Property and Administrative Services Act of 1949, the
date that is 5 days after the date on which a decision
on that protest is issued.

* * * * * * *

----------

SECTION 403 OF THE FEDERAL FINANCIAL MANAGEMENT ACT OF 1994

SEC. 403. FRANCHISE FUND PILOT PROGRAMS.

(a) * * *

* * * * * * *

(f) Termination.--The provisions of this section shall expire
on October 1, [2003] 2006.
----------

TITLE 40, UNITED STATES CODE

* * * * * * *

SUBTITLE I--FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES

* * * * * * *

CHAPTER 11--SELECTION OF ARCHITECTS AND ENGINEERS

* * * * * * *

Sec. 1102. Definitions

In this chapter, the following definitions apply:
(1) * * *

* * * * * * *

(4) Surveying and mapping.--The term ``surveying and
mapping'' means services performed by professionals
such as surveyors, photogrammetrists, hydrographers,
geodesists, or cartographers in the collection,
storage, retrieval, or dissemination of graphical or
digital data to depict natural or manmade physical
features, phenomena, or boundaries of the earth and any
information related to such data, including any such
data that comprises a survey, map, chart, geographic
information system, remotely sensed image or data, or
an aerial photograph.

* * * * * * *

SUBTITLE III--INFORMATION TECHNOLOGY MANAGEMENT

Chapter Sec.
GENERAL......................................................11101
* * * * * * *
11501]FORMATION TECHNOLOGY ACQUISITION PILOT PROGRAM..................

* * * * * * *

CHAPTER 111--GENERAL

* * * * * * *

Sec. 11101. Definitions

In this subtitle, the following definitions apply:
(1) * * *
* * * * * * *
(6) Information technology.--The term ``information
technology''--
(A) with respect to an executive agency means
any equipment or interconnected system or
subsystem of equipment, used in the automatic
acquisition, storage, analysis, evaluation,
manipulation, management, movement, control,
display, switching, interchange, transmission,
or reception of data or information by the
executive agency, if the equipment is used by
the executive agency directly or is used by a
contractor under a contract with the executive
agency that requires the use--
(i) of that equipment; or
(ii) of that equipment to a
significant extent in the performance
of a service or the furnishing of a
product;
(B) includes computers, [ancillary
equipment,] ancillary equipment (including
imaging peripherals, input, output, and storage
devices necessary for security and
surveillance), peripheral equipment designed to
be controlled by the central processing unit of
a computer, software, firmware and similar
procedures, services (including support
services), and related resources; but
* * * * * * *

[CHAPTER 115--INFORMATION TECHNOLOGY ACQUISITION PILOT PROGRAM

[SUBCHAPTER I--CONDUCT OF PILOT PROGRAM

[Sec.
[11501. Authority to conduct pilot program.
[11502. Evaluation criteria and plans.
[11503. Report.
[11504. Recommended legislation.
[11505. Rule of construction.

[SUBCHAPTER I--CONDUCT OF PILOT PROGRAM

[Sec. 11501. Authority to conduct pilot program

[(a) In General.--
[(1) Purpose.--In consultation with the Administrator
for the Office of Information and Regulatory Affairs,
the Administrator for Federal Procurement Policy may
conduct a pilot program pursuant to the requirements of
section 11521 of this title to test alternative
approaches for the acquisition of information
technology by executive agencies.
[(2) Multiagency, multi-activity conduct of each
program.--Except as otherwise provided in this chapter,
the pilot program conducted under this chapter shall be
carried out in not more than two procuring activities
in each of the executive agencies that are designated
by the Administrator for Federal Procurement Policy in
accordance with this chapter to carry out the pilot
program. With the approval of the Administrator for
Federal Procurement Policy, the head of each designated
executive agency shall select the procuring activities
of the executive agency that are to participate in the
test and shall designate a procurement testing official
who shall be responsible for the conduct and evaluation
of the pilot program within the executive agency.
[(b) Limitation on Amount.--The total amount obligated for
contracts entered into under the pilot program conducted under
this chapter may not exceed $750,000,000. The Administrator for
Federal Procurement Policy shall monitor those contracts and
ensure that contracts are not entered into in violation of this
subsection.
[(c) Period of Programs.--
[(1) In general.--Subject to paragraph (2), the pilot
program may be carried out under this chapter for the
period, not in excess of five years, the Administrator
for Federal Procurement Policy determines is sufficient
to establish reliable results.
[(2) Continuing validity of contracts.--A contract
entered into under the pilot program before the
expiration of that program remains in effect according
to the terms of the contract after the expiration of
the program.

[Sec. 11502. Evaluation criteria and plans

[(a) Measurable Test Criteria.--To the maximum extent
practicable, the head of each executive agency conducting the
pilot program under section 11501 of this title shall establish
measurable criteria for evaluating the effects of the
procedures or techniques to be tested under the program.
[(b) Test Plan.--Before the pilot program may be conducted
under section 11501 of this title, the Administrator for
Federal Procurement Policy shall submit to Congress a detailed
test plan for the program, including a detailed description of
the procedures to be used and a list of regulations that are to
be waived.

[Sec. 11503. Report

[(a) Requirement.--Not later than 180 days after the
completion of the pilot program under this chapter, the
Administrator for Federal Procurement Policy shall--
[(1) submit to the Director of the Office of
Management and Budget a report on the results and
findings under the program; and
[(2) provide a copy of the report to Congress.
[(b) Content.--The report shall include--
[(1) a detailed description of the results of the
program, as measured by the criteria established for
the program; and
[(2) a discussion of legislation that the
Administrator recommends, or changes in regulations
that the Administrator considers necessary, to improve
overall information resources management in the Federal
Government.

[Sec. 11504. Recommended legislation

[If the Director of the Office of Management and Budget
determines that the results and findings under the pilot
program under this chapter indicate that legislation is
necessary or desirable to improve the process for acquisition
of information technology, the Director shall transmit the
Director's recommendations for that legislation to Congress.

[Sec. 11505. Rule of construction

[This chapter does not authorize the appropriation or
obligation of amounts for the pilot program authorized under
this chapter.]
* * * * * * *
----------

SECTION 210 OF THE E-GOVERNMENT ACT OF 2002

SEC. 210. SHARE-IN-SAVINGS INITIATIVES.

(a) * * *
* * * * * * *
[(c) Development of Incentives.--The Director of the Office
of Management and Budget shall, in consultation with the
Committee on Governmental Affairs of the Senate, the Committee
on Government Reform of the House of Representatives, and
executive agencies, develop techniques to permit an executive
agency to retain a portion of the savings (after payment of the
contractor's share of the savings) derived from share-in-
savings contracts as funds are appropriated to the agency in
future fiscal years.
[(d) Regulations.--Not later than 270 days after the date of
the enactment of this Act, the Federal Acquisition Regulation
shall be revised to implement the provisions enacted by this
section. Such revisions shall--
[(1) provide for the use of competitive procedures in
the selection and award of share-in-savings contracts
to--
[(A) ensure the contractor's share of savings
reflects the risk involved and market
conditions; and
[(B) otherwise yield greatest value to the
government; and
[(2) allow appropriate regulatory flexibility to
facilitate the use of share-in-savings contracts by
executive agencies, including the use of innovative
provisions for technology refreshment and nonstandard
Federal Acquisition Regulation contract clauses.
[(e) Additional Guidance.--The Administrator of General
Services shall--
[(1) identify potential opportunities for the use of
share-in-savings contracts; and
[(2) in consultation with the Director of the Office
of Management and Budget, provide guidance to executive
agencies for determining mutually beneficial savings
share ratios and baselines from which savings may be
measured.
[(f) OMB 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 Act, submit to Congress a report containing--
[(1) a description of the number of share-in-savings
contracts entered into by each executive agency under
by this section and the amendments made by this
section, and, for each contract identified--
[(A) the information technology acquired;
[(B) the total amount of payments made to the
contractor; and
[(C) the total amount of savings or other
measurable benefits realized;
[(2) a description of the ability of agencies to
determine the baseline costs of a project against which
savings can be measured; and
[(3) any recommendations, as the Director deems
appropriate, regarding additional changes in law that
may be necessary to ensure effective use of share-in-
savings contracts by executive agencies.
[(g) GAO Report to Congress.--The Comptroller General shall,
not later than 6 months after the report required under
subsection (f) is submitted to Congress, conduct a review of
that report and submit to Congress a report containing--
[(1) the results of the review;
[(2) an independent assessment by the Comptroller
General of the effectiveness of the use of share-in-
savings contracts in improving the mission-related and
administrative processes of the executive agencies and
the achievement of agency missions; and
[(3) a recommendation on whether the authority to
enter into share-in-savings contracts should be
continued.]
* * * * * * *
[(i) Definitions.--In this section, the terms ``contractor'',
``savings'', and ``share-in-savings contract'' have the
meanings given those terms in section 317 of the Federal
Property and Administrative Services Act of 1949 (as added by
subsection (b)).]
----------

SECTION 821 OF THE FLOYD D. SPENCE NATIONAL DEFENSE AUTHORIZATION ACT
FOR FISCAL YEAR 2001

SEC. 821. IMPROVEMENTS IN PROCUREMENTS OF SERVICES.

(a) * * *
[(b) Incentive for Use of Performance-Based Service
Contracts.--(1) A Department of Defense performance-based
service contract or performance-based task order may be treated
as a contract for the procurement 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;
[(ii) identifies the specific end products or
output to be achieved; and
[(iii) contains a firm fixed price; and
[(C) the source of the services provides similar
services contemporaneously 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, shall not apply
to a performance-based service contract or performance-based
task order that is treated as a contract for the procurement of
commercial items under paragraph (1).
[(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.
[(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.]
* * * * * * *
----------

SECTION 8002 FEDERAL ACQUISITION STREAMLINING ACT OF 1994

SEC. 8002. REGULATIONS ON ACQUISITION OF COMMERCIAL ITEMS.

(a) * * *
* * * * * * *
(d) Use of Firm, Fixed Price Contracts.--The Federal
Acquisition Regulation shall include, for acquisitions of
commercial items--
(1) a requirement that firm, fixed price contracts or
fixed price with economic price adjustment contracts be
used to the maximum extent practicable; [and]
(2) a prohibition on use of cost type contracts[.];
and
(3) authority for use of a time and materials
contract or a labor-hour contract for the procurement
of commercial services that are commonly sold to the
general public through such contracts.
* * * * * * *
----------

HOMELAND SECURITY ACT OF 2002

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) * * *
(b) Table of Contents.--The table of contents for this Act is
as follows:

Sec. 1. Short title; table of contents.
* * * * * * *

TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL;
UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

* * * * * * *

Subtitle F--Federal Emergency Procurement Flexibility

Sec. 851. Definition.
* * * * * * *
[Sec. 853. Increased simplified acquisition threshold for procurements
in support of humanitarian or peacekeeping operations or
contingency operations.]
Sec. 853. Increased simplified acquisition threshold for certain
procurements.
* * * * * * *

TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL;
UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

* * * * * * *

Subtitle F--Federal Emergency Procurement Flexibility

* * * * * * *

SEC. 852. PROCUREMENTS FOR DEFENSE AGAINST OR RECOVERY FROM TERRORISM
OR NUCLEAR, BIOLOGICAL, CHEMICAL, OR RADIOLOGICAL
ATTACK.

The authorities provided in this subtitle apply to any
procurement of property or services by or for an executive
agency that, as determined by the head of the executive agency,
are to be used to facilitate defense against or recovery from
terrorism or nuclear, biological, chemical, or radiological
attack[, but only if a solicitation of offers for the
procurement is issued during the 1-year period beginning on the
date of the enactment of this Act].

[SEC. 853. INCREASED SIMPLIFIED ACQUISITION THRESHOLD FOR PROCUREMENTS
IN SUPPORT OF HUMANITARIAN OR PEACEKEEPING
OPERATIONS OR CONTINGENCY OPERATIONS.

[(a) Temporary Threshold Amounts.--For a procurement referred
to in section 852 that is carried out in support of a
humanitarian or peacekeeping operation or a contingency
operation, the simplified acquisition threshold definitions
shall be applied as if the amount determined under the
exception provided for such an operation in those definitions
were--]

SEC. 853. INCREASED SIMPLIFIED ACQUISITION THRESHOLD FOR CERTAIN
PROCUREMENTS.

(a) Threshold Amounts.--For a procurement referred to in
section 852, the simplified acquisition threshold referred to
in section 4(11) of the Office of Federal Procurement Policy
Act (41 U.S.C. 403(11)) is deemed to be--
(1) * * *

* * * * * * *

[(b) Simplified Acquisition Threshold Definitions.--In this
section, the term ``simplified acquisition threshold
definitions'' means the following:
[(1) Section 4(11) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(11)).
[(2) Section 309(d) of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 259(d)).
[(3) Section 2302(7) of title 10, United States Code.
[(c) Small Business Reserve.--For a procurement carried out
pursuant to subsection (a), section 15(j) of the Small Business
Act (15 U.S.C. 644(j)) shall be applied as if the maximum
anticipated value identified therein is equal to the amounts
referred to in subsection (a).]

* * * * * * *

SEC. 855. APPLICATION OF CERTAIN COMMERCIAL ITEMS AUTHORITIES TO
CERTAIN PROCUREMENTS.

[(a) Authority.--
[(1) In general.--The head of an executive agency may
apply the provisions of law listed in paragraph (2) to
a procurement referred to in section 852 without regard
to whether the property or services are commercial
items.
[(2) Commercial item laws.--The provisions of law
referred to in paragraph (1) are as follows:
[(A) Sections 31 and 34 of the Office of
Federal Procurement Policy Act (41 U.S.C. 427,
430).
[(B) Section 2304(g) of title 10, United
States Code.
[(C) Section 303(g) of the Federal Property
and Administrative Services Act of 1949 (41
U.S.C. 253(g)).]
(a) Authority.-- With respect to a procurement referred to in
section 852, the head of an executive agency may deem any item
or service to be a commercial item for the purpose of Federal
procurement laws.
(b) Inapplicability of Limitation on Use of Simplified
Acquisition Procedures.--
(1) In general.--The $5,000,000 limitation provided
in section 31(a)(2) of the Office of Federal
Procurement Policy Act (41 U.S.C. 427(a)(2)), 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 purchases of property
or services [to which any of the provisions of law
referred to in subsection (a) are applied] under the
authority of this section.

* * * * * * *

SEC. 857. REVIEW AND REPORT BY COMPTROLLER GENERAL.

(a) Requirements.--Not later than March 31, [2004] 2006, the
Comptroller General shall--
(1) * * *

* * * * * * *

----------

CHAPTER 35 OF TITLE 44, UNITED STATES CODE

CHAPTER 35--COORDINATION OF FEDERAL INFORMATION POLICY

SUBCHAPTER I--FEDERAL INFORMATION POLICY

Sec.
3501. Purposes.
* * * * * * *

SUBCHAPTER II--INFORMATION SECURITY

[Sec.
[3531. Purposes.
[3532. Definitions.
[3533. Authority and functions of the Director.
[3534. Federal agency responsibilities.
[3535. Annual independent evaluation.
[3536. National security systems.
[3537. Authorization of appropriations.
[3538. Effect on existing law.]

[SUBCHAPTER III--INFORMATION SECURITY]

Sec.
3541. Purposes.
* * * * * * *

[SUBCHAPTER II--INFORMATION SECURITY

[Sec. 3531. Purposes

[The purposes of this subchapter are to--
[(1) provide a comprehensive framework for ensuring
the effectiveness of information security controls over
information resources that support Federal operations
and assets;
[(2) recognize the highly networked nature of the
current Federal computing environment and provide
effective governmentwide management and oversight of
the related information security risks, including
coordination of information security efforts throughout
the civilian, national security, and law enforcement
communities;
[(3) provide for development and maintenance of
minimum controls required to protect Federal
information and information systems;
[(4) provide a mechanism for improved oversight of
Federal agency information security programs;
[(5) acknowledge that commercially developed
information security products offer advanced, dynamic,
robust, and effective information security solutions,
reflecting market solutions for the protection of
critical information infrastructures important to the
national defense and economic security of the nation
that are designed, built, and operated by the private
sector; and
[(6) recognize that the selection of specific
technical hardware and software information security
solutions should be left to individual agencies from
among commercially developed products.

[Sec. 3532. Definitions

[(a) In General.--Except as provided under subsection (b),
the definitions under section 3502 shall apply to this
subchapter.
[(b) Additional Definitions.--As used in this subchapter--
[(1) the term ``information security'' means
protecting information and information systems from
unauthorized access, use, disclosure, disruption,
modification, or destruction in order to provide--
[(A) integrity, which means guarding against
improper information modification or
destruction, and includes ensuring information
nonrepudiation and authenticity;
[(B) confidentiality, which means preserving
authorized restrictions on access and
disclosure, including means for protecting
personal privacy and proprietary information;
[(C) availability, which means ensuring
timely and reliable access to and use of
information; and
[(D) authentication, which means utilizing
digital credentials to assure the identity of
users and validate their access;
[(2) the term ``national security system'' means any
information system (including any telecommunications
system) used or operated by an agency or by a
contractor of an agency, or other organization on
behalf of an agency, the function, operation, or use of
which--
[(A) involves intelligence activities;
[(B) involves cryptologic activities related
to national security;
[(C) involves command and control of military
forces;
[(D) involves equipment that is an integral
part of a weapon or weapons system; or
[(E) is critical to the direct fulfillment of
military or intelligence missions provided that
this definition does not apply to a system that
is used for routine administrative and business
applications (including payroll, finance,
logistics, and personnel management
applications);
[(3) the term ``information technology'' has the
meaning given that term in section 11101 of title 40;
and
[(4) the term ``information system'' means any
equipment or interconnected system or subsystems of
equipment that is used in the automatic acquisition,
storage, manipulation, management, movement, control,
display, switching, interchange, transmission, or
reception of data or information, and includes--
[(A) computers and computer networks;
[(B) ancillary equipment;
[(C) software, firmware, and related
procedures;
[(D) services, including support services;
and
[(E) related resources.

[Sec. 3533. Authority and functions of the Director

[(a) The Director shall oversee agency information security
policies and practices, by--
[(1) promulgating information security standards
under section 11331 of title 40;
[(2) overseeing the implementation of policies,
principles, standards, and guidelines on information
security;
[(3) requiring agencies, consistent with the
standards promulgated under such section 11331 and the
requirements of this subchapter, to identify and
provide information security protections commensurate
with the risk and magnitude of the harm resulting from
the unauthorized access, use, disclosure, disruption,
modification, or destruction of--
[(A) information collected or maintained by
or on behalf of an agency; or
[(B) information systems used or operated by
an agency or by a contractor of an agency or
other organization on behalf of an agency;
[(4) coordinating the development of standards and
guidelines under section 20 of the National Institute
of Standards and Technology Act (15 U.S.C. 278g-3) with
agencies and offices operating or exercising control of
national security systems (including the National
Security Agency) to assure, to the maximum extent
feasible, that such standards and guidelines are
complementary with standards and guidelines developed
for national security systems;
[(5) overseeing agency compliance with the
requirements of this subchapter, including through any
authorized action under section 11303(b)(5) of title
40, to enforce accountability for compliance with such
requirements;
[(6) reviewing at least annually, and approving or
disapproving, agency information security programs
required under section 3534(b);
[(7) coordinating information security policies and
procedures with related information resources
management policies and procedures; and
[(8) reporting to Congress no later than March 1 of
each year on agency compliance with the requirements of
this subchapter, including--
[(A) a summary of the findings of evaluations
required by section 3535;
[(B) significant deficiencies in agency
information security practices;
[(C) planned remedial action to address such
deficiencies; and
[(D) a summary of, and the views of the
Director on, the report prepared by the
National Institute of Standards and Technology
under section 20(d)(9) of the National
Institute of Standards and Technology Act (15
U.S.C. 278g-3).
[(b) Except for the authorities described in paragraphs (4)
and (7) of subsection (a), the authorities of the Director
under this section shall not apply to national security
systems.

[Sec. 3534. Federal agency responsibilities

[(a) The head of each agency shall--
[(1) be responsible for--
[(A) providing information security
protections commensurate with the risk and
magnitude of the harm resulting from
unauthorized access, use, disclosure,
disruption, modification, or destruction of--
[(i) information collected or
maintained by or on behalf of the
agency; and
[(ii) information systems used or
operated by an agency or by a
contractor of an agency or other
organization on behalf of an agency;
[(B) complying with the requirements of this
subchapter and related policies, procedures,
standards, and guidelines, including--
[(i) information security standards
promulgated by the Director under
section 11331 of title 40; and
[(ii) information security standards
and guidelines for national security
systems issued in accordance with law
and as directed by the President; and
[(C) ensuring that information security
management processes are integrated with agency
strategic and operational planning processes;
[(2) ensure that senior agency officials provide
information security for the information and
information systems that support the operations and
assets under their control, including through--
[(A) assessing the risk and magnitude of the
harm that could result from the unauthorized
access, use, disclosure, disruption,
modification, or destruction of such
information or information systems;
[(B) determining the levels of information
security appropriate to protect such
information and information systems in
accordance with standards promulgated under
section 11331 of title 40 for information
security classifications and related
requirements;
[(C) implementing policies and procedures to
cost-effectively reduce risks to an acceptable
level; and
[(D) periodically testing and evaluating
information security controls and techniques to
ensure that they are effectively implemented;
[(3) delegate to the agency Chief Information Officer
established under section 3506 (or comparable official
in an agency not covered by such section) the authority
to ensure compliance with the requirements imposed on
the agency under this subchapter, including--
[(A) designating a senior agency information
security officer who shall--
[(i) carry out the Chief Information
Officer's responsibilities under this
section;
[(ii) possess professional
qualifications, including training and
experience, required to administer the
functions described under this section;
[(iii) have information security
duties as that official's primary duty;
and
[(iv) head an office with the mission
and resources to assist in ensuring
agency compliance with this section;
[(B) developing and maintaining an agencywide
information security program as required by
subsection (b);
[(C) developing and maintaining information
security policies, procedures, and control
techniques to address all applicable
requirements, including those issued under
section 3533 of this title, and section 11331
of title 40;
[(D) training and overseeing personnel with
significant responsibilities for information
security with respect to such responsibilities;
and
[(E) assisting senior agency officials
concerning their responsibilities under
paragraph (2);
[(4) ensure that the agency has trained personnel
sufficient to assist the agency in complying with the
requirements of this subchapter and related policies,
procedures, standards, and guidelines; and
[(5) ensure that the agency Chief Information
Officer, in coordination with other senior agency
officials, reports annually to the agency head on the
effectiveness of the agency information security
program, including progress of remedial actions.
[(b) Each agency shall develop, document, and implement an
agencywide information security program, approved by the
Director under section 3533(a)(5), to provide information
security for the information and information systems that
support the operations and assets of the agency, including
those provided or managed by another agency, contractor, or
other source, that includes--
[(1) periodic assessments of the risk and magnitude
of the harm that could result from the unauthorized
access, use, disclosure, disruption, modification, or
destruction of information and information systems that
support the operations and assets of the agency;
[(2) policies and procedures that--
[(A) are based on the risk assessments
required by paragraph (1);
[(B) cost-effectively reduce information
security risks to an acceptable level;
[(C) ensure that information security is
addressed throughout the life cycle of each
agency information system; and
[(D) ensure compliance with--
[(i) the requirements of this
subchapter;
[(ii) policies and procedures as may
be prescribed by the Director, and
information security standards
promulgated under section 11331 of
title 40;
[(iii) minimally acceptable system
configuration requirements, as
determined by the agency; and
[(iv) any other applicable
requirements, including standards and
guidelines for national security
systems issued in accordance with law
and as directed by the President;
[(3) subordinate plans for providing adequate
information security for networks, facilities, and
systems or groups of information systems, as
appropriate;
[(4) security awareness training to inform personnel,
including contractors and other users of information
systems that support the operations and assets of the
agency, of--
[(A) information security risks associated
with their activities; and
[(B) their responsibilities in complying with
agency policies and procedures designed to
reduce these risks;
[(5) periodic testing and evaluation of the
effectiveness of information security policies,
procedures, and practices, to be performed with a
frequency depending on risk, but no less than annually,
of which such testing--
[(A) shall include testing of management,
operational, and technical controls of every
information system identified in the inventory
required under section 3505(c); and
[(B) may include testing relied on in a
evaluation under section 3535;
[(6) a process for planning, implementing,
evaluating, and documenting remedial action to address
any deficiencies in the information security policies,
procedures, and practices of the agency;
[(7) procedures for detecting, reporting, and
responding to security incidents, including--
[(A) mitigating risks associated with such
incidents before substantial damage is done;
and
[(B) notifying and consulting with, as
appropriate--
[(i) law enforcement agencies and
relevant Offices of Inspector General;
[(ii) an office designated by the
President for any incident involving a
national security system; and
[(iii) any other agency or office, in
accordance with law or as directed by
the President; and
[(8) plans and procedures to ensure continuity of
operations for information systems that support the
operations and assets of the agency.
[(c) Each agency shall--
[(1) report annually to the Director, the Committees
on Government Reform and Science of the House of
Representatives, the Committees on Governmental Affairs
and Commerce, Science, and Transportation of the
Senate, the appropriate authorization and
appropriations committees of Congress, and the
Comptroller General on the adequacy and effectiveness
of information security policies, procedures, and
practices, and compliance with the requirements of this
subchapter, including compliance with each requirement
of subsection (b);
[(2) address the adequacy and effectiveness of
information security policies, procedures, and
practices in plans and reports relating to--
[(A) annual agency budgets;
[(B) information resources management under
subchapter 1 of this chapter;
[(C) information technology management under
subtitle III of title 40;
[(D) program performance under sections 1105
and 1115 through 1119 of title 31, and sections
2801 and 2805 of title 39;
[(E) financial management under chapter 9 of
title 31, and the Chief Financial Officers Act
of 1990 (31 U.S.C. 501 note; Public Law 101-
576) (and the amendments made by that Act);
[(F) financial management systems under the
Federal Financial Management Improvement Act
(31 U.S.C. 3512 note); and
[(G) internal accounting and administrative
controls under section 3512 of title 31, United
States Code, (known as the ``Federal Managers
Financial Integrity Act''); and
[(3) report any significant deficiency in a policy,
procedure, or practice identified under paragraph (1)
or (2)--
[(A) as a material weakness in reporting
under section 3512 of title 31; and
[(B) if relating to financial management
systems, as an instance of a lack of
substantial compliance under the Federal
Financial Management Improvement Act (31 U.S.C.
3512 note).
[(d)(1) In addition to the requirements of subsection (c),
each agency, in consultation with the Director, shall include
as part of the performance plan required under section 1115 of
title 31 a description of--
[(A) the time periods; and
[(B) the resources, including budget, staffing, and
training,
that are necessary to implement the program required under
subsection (b).
[(2) The description under paragraph (1) shall be based on
the risk assessments required under subsection (b)(2)(1).
[(e) Each agency shall provide the public with timely notice
and opportunities for comment on proposed information security
policies and procedures to the extent that such policies and
procedures affect communication with the public.

[Sec. 3535. Annual independent evaluation

[(a)(1) Each year each agency shall have performed an
independent evaluation of the information security program and
practices of that agency to determine the effectiveness of such
program and practices.
[(2) Each evaluation by an agency under this section shall
include--
[(A) testing of the effectiveness of information
security policies, procedures, and practices of a
representative subset of the agency's information
systems;
[(B) an assessment (made on the basis of the results
of the testing) of compliance with--
[(i) the requirements of this subchapter; and
[(ii) related information security policies,
procedures, standards, and guidelines; and
[(C) separate presentations, as appropriate,
regarding information security relating to national
security systems.
[(b) Subject to subsection (c)--
[(1) for each agency with an Inspector General
appointed under the Inspector General Act of 1978, the
annual evaluation required by this section shall be
performed by the Inspector General or by an independent
external auditor, as determined by the Inspector
General of the agency; and
[(2) for each agency to which paragraph (1) does not
apply, the head of the agency shall engage an
independent external auditor to perform the evaluation.
[(c) For each agency operating or exercising control of a
national security system, that portion of the evaluation
required by this section directly relating to a national
security system shall be performed--
[(1) only by an entity designated by the agency head;
and
[(2) in such a manner as to ensure appropriate
protection for information associated with any
information security vulnerability in such system
commensurate with the risk and in accordance with all
applicable laws.
[(d) The evaluation required by this section--
[(1) shall be performed in accordance with generally
accepted government auditing standards; and
[(2) may be based in whole or in part on an audit,
evaluation, or report relating to programs or practices
of the applicable agency.
[(e) Each year, not later than such date established by the
Director, the head of each agency shall submit to the Director
the results of the evaluation required under this section.
[(f) Agencies and evaluators shall take appropriate steps to
ensure the protection of information which, if disclosed, may
adversely affect information security. Such protections shall
be commensurate with the risk and comply with all applicable
laws and regulations.
[(g)(1) The Director shall summarize the results of the
evaluations conducted under this section in the report to
Congress required under section 3533(a)(8).
[(2) The Director's report to Congress under this subsection
shall summarize information regarding information security
relating to national security systems in such a manner as to
ensure appropriate protection for information associated with
any information security vulnerability in such system
commensurate with the risk and in accordance with all
applicable laws.
[(3) Evaluations and any other descriptions of information
systems under the authority and control of the Director of
Central Intelligence or of National Foreign Intelligence
Programs systems under the authority and control of the
Secretary of Defense shall be made available to Congress only
through the appropriate oversight committees of Congress, in
accordance with applicable laws.
[(h) The Comptroller General shall periodically evaluate and
report to Congress on--
[(1) the adequacy and effectiveness of agency
information security policies and practices; and
[(2) implementation of the requirements of this
subchapter.

[Sec. 3536. Expiration

[This subchapter shall not be in effect after May 31, 2003.

[Sec. 3537. Authorization of appropriations

[There are authorized to be appropriated to carry out the
provisions of this subchapter such sums as may be necessary for
each of fiscal years 2003 through 2007.

[Sec. 3538. Effect on existing law

[Nothing in this subchapter, section 11331 of title 40, or
section 20 of the National Standards and Technology Act (15
U.S.C. 278g-3) may be construed as affecting the authority of
the President, the Office of Management and Budget or the
Director thereof, the National Institute of Standards and
Technology, or the head of any agency, with respect to the
authorized use or disclosure of information, including with
regard to the protection of personal privacy under section 552a
of title 5, the disclosure of information under section 552 of
title 5, the management and disposition of records under
chapters 29, 31, or 33 of title 44, the management of
information resources under subchapter I of chapter 35 of this
title, or the disclosure of information to Congress or the
Comptroller General of the United States.]

SUBCHAPTER [III] II--INFORMATION SECURITY

Sec. 3541. Purposes

The purposes of this subchapter are to--
(1) * * *

* * * * * * *

Sec. 3549. Effect on existing law

Nothing in this subchapter, section 11331 of title 40, or
section 20 of the National Standards and Technology Act (15
U.S.C. 278g-3) may be construed as affecting the authority of
the President, the Office of Management and Budget or the
Director thereof, the National Institute of Standards and
Technology, or the head of any agency, with respect to the
authorized use or disclosure of information, including with
regard to the protection of personal privacy under section 552a
of title 5, the disclosure of information under section 552 of
title 5, the management and disposition of records under
chapters 29, 31, or 33 of title 44, the management of
information resources under subchapter I of chapter 35 of this
title, or the disclosure of information to the Congress or the
Comptroller General of the United States. [While this
subchapter is in effect, subchapter II of this chapter shall
not apply.]

* * * * * * *

MINORITY VIEWS

The Services Acquisition Reform Act (SARA), as reported by
the Government Reform Committee on May 7, 2003, affects how the
federal government procures federal goods and services worth
billions of dollars. The aim of the legislation is to
``streamline'' the procurement process. But in key areas, its
effect will be to impede the government's ability to protect
against waste, fraud, and abuse in federal contracting.
On the plus side, the legislation creates a chief
acquisition officer and establishes a training fund for
acquisition personnel. These steps will help promote a
professional, well-trained federal acquisition workforce.
There are, however, significant problems with the
legislation:
Contractor Involvement in Federal Acquisition
Decisions. The government-industry exchange program for
acquisition personnel created by the bill could give private
contractors undue influence over the federal contracting
process.
``Share in Savings'' Contracts. The bill
permanently authorizes a complicated and largely untested
contract type called share-in-savings. These contracts are
difficult to administer and are designed to escape
congressional oversight.
Inadequate Protections Against Waste, Fraud, and
Abuse. The bill would weaken current law by allowing the
government to enter into sole-source contracts for up to $15
million without verifying that the prices charged are fair and
reasonable.
``Other Transaction'' Authority. SARA greatly
expands ``other transaction'' authority, which allows agencies
to enter into contracts without regard to most federal
procurement laws.
Moreover, key amendments on important acquisition issues
offered by Democratic members were rejected during the
Committee consideration.

I. MAJOR ISSUES

A. Contractor Involvement in Federal Acquisition Decisions
Section 103 of SARA establishes a government-industry
exchange program for acquisition personnel. This legislation is
patterned on an exchange program for information technology
managers enacted as part of the E-Government Act of 2003 (P.L.
107-347).
In the case of information technology managers, an exchange
program may make sense. But acquisition personnel have a unique
oversight role in ensuring that contractorsare not overpaid and
that the work performed meets federal standards. Turning these
functions over to private sector employees puts the proverbial fox in
charge of the henhouse. Even if private sector contractors follow
conflict of interest laws and do not work on projects involving their
private employers, their involvement is still inappropriate. Only
persons who work for the government or are being paid by the government
should be involved in making decisions about how much specific
contractors are paid.
During the markup, Rep. Waxman offered an amendment to
stroke this provision, which was defeated.

B. ``Share in Savings'' Contracts

Section 301 of the bill authorizes a contract type called
``share-in-savings.'' Under these contracts, the contractor
agrees to bear the initial project costs, including capital
outlays, until the client agency begins to achieve specified
``savings'' or ``enhanced revenues'' from the work. Payment is
based on a percentage of the savings or revenues realized by
the agency.
These contracts are largely untested, both in the public
and private sector. For this reason, after extensive
negotiations, the E-Government Act of 2003 (P.L. 107-347)
authorized 15 share-in-savings contracts in military
departments and 15 in civilian agencies over a three-year
period. The idea was that these 30 contracts would serve as
``pilot projects.''
SARA eliminates these carefully negotiated limits and gives
all agencies permanent authority to enter into an unlimited
number of share-in-savings contracts before any of the pilots
have even begun. Moreover, SARA eliminates other safeguards in
the E-Government Act, such as the requirement that ``share in
savings'' contracts could not be used in revenue enhancement.
Revenue enhancing contracts raise a host of complicated issues,
such as ensuring that share-in-savings contracts for debt
collection activities do not create rogue bounty hunters.
One of the major concerns about these contracts is that
they are a form of ``back-door'' appropriating. For other
contracts, agencies must come to Congress for budget authority
for the contracts. But section 301 specifically waivers this
requirement if the government's potential liability under the
contract is $10 million or less. This removes an important
element of oversight and accountability.
The Administration stated in testimony before the
Government Committee last year that there is no reason to
expand authority for share-in-saving beyond a pilot project
``until there are demonstrable benefits. To date, we have not
seen results.'' \1\
---------------------------------------------------------------------------
\1\ Testimony of Angela Styles, Administrator of the Office of
Federal Procurement Policy, House Subcommittee on Technology and
Procurement Policy, Hearing on the Services Acquisition Reform Act,
107th Cong. (Mar. 7, 2002).
---------------------------------------------------------------------------
Rep. Waxman offered an amendment to delete this section,
which was defeated.

C. Waiver of Safeguards against Waste, Fraud, and Abuse

Sections 401, 404, and 502 of the bill allow the use of
commercial acquisition procedures for goods and services that
the bill defines as commercial in nature, but which in reality
are not. Specifically:
Section 401 treats any service contract that
contains ``performance-based'' terms as a ``commercial item,''
even if the contract is a sole-source contract for a unique
government service.
Section 404 treats any contract with a contractor
that does 90 percent of its business with the private sector as
a ``commercial item,'' even if the contract is a sole-source
contract for a unique government product or service.
Section 502 treats any contract for goods or
services needed to defined or respond to a terrorist attack as
a commercial item.
Some of the major safeguards at the government's disposal
to ensure the efficient and effective use of taxpayer dollars
are waived by these provisions. This waiver occurs because the
safeguards are not available to the government when using
commercial procedures. Among the most important of these
safeguards are the Truth in Negotiations Act (TINA) and Cost
Accounting Standards (CAS). TINA requires contractors to
provide the government with accurate, timely, and complete
pricing data for sole-source contracts over $550,000. CAS
requires that contractors consistently and accurately account
for their costs. These standards are essential for ensuring
that the federal taxpayer is not overcharged for costs such as
overhead or executive pensions.
An amendment to the bill was offered by Rep. Waxman that
would have ensured that no sole-source contract would be exempt
from TINA and CAS. Rep. Davis, however, offered a second degree
amendment, which passed over Rep. Waxman's objections, which
limits the applicability of the Waxman amendment to contracts
over $15 million.

D. ``Other Transaction'' Authority

Section 501 of SARA would extend to all civilian agencies
``other transaction'' authority for research and development
projects related to defense against terrorism. This authority
permits agencies to enter into contracts without regard to
almost all federal statutes and regulations, including the
Federal Acquisition Regulation, the Federal Property Act, the
Competition in Contracting Act, the Federal Acquisition
Streamlining Act, and the Federal Grant and Cooperative
Agreement Act, as well as the Truth in Negotiations Act and
Cost Accounting Standards.
In the recently passed Homeland Security Act, the new
Department of Homeland Security was given this authority for
five years. The effect of the SARA provision is to repeal this
time limit and to extend use of the authority to all agencies.
``Other transaction'' authority was originally granted to
the Department of Defense to attract nontraditional
contractors. The DOD IG has found, however, that this authority
has not attracted a significant number of nontraditional
defense contractors; to the contrary, traditional contractors
have received 94.5 percent of ``other transaction'' contracts
awarded by the Defense Department.\2\
---------------------------------------------------------------------------
\2\ Testimony for the record of Robert J. Lieberman, Deputy
Inspector General, Department of Defense, Subcommittee on Technology
and Procurement Policy, Hearing on the Services Acquisition Reform Act,
107th Cong. (Mar. 7, 2002).
---------------------------------------------------------------------------
Moreover, the DOD IG has reported that these arrangements
are subject to waste, fraud, and abuse. According to the IG,
these special contracts ``do not provide the government a
number of significant protections, ensure the prudent
expenditure of taxpayer dollars, or prevent fraud.'' \3\
---------------------------------------------------------------------------
\3\ Id.
---------------------------------------------------------------------------
Rep. Maloney offered an amendment to reapply certain basic
procurement statutes if other transaction authority is used.
The amendment was defeated.

II. ACCEPTED DEMOCRATIC AMENDMENTS

In a few important areas, Democratic amendments were
adopted by the Committee:
Definition of Commercial Services. An amendment to
section 403 by Rep. Waxman was adopted. Section 403 amends the
Office of Federal Procurement Policy Act to replace the current
definition of ``commercial services.'' As amended by the Waxman
amendment, the new definition is ``services offered and sold
competitively, in substantial quantities, in the commercial
marketplace based on established market prices for specific
tasks performed or specific outcomes to be achieved and under
standard commercial terms and conditions.'' The revised
definition changes existing law by eliminating the requirement
that commercial services be based on a catalogue price and
permitting them to be sold based on specific outcomes to be
achieved.
Disclosure of Iraqi Contracts. An amendment by
Rep. Maloney to require public disclosure of information
regarding contracts for Iraqi reconstruction activities, if
such contracts are not entered into using full and open
competition, was offered and adopted.

III. REJECTED DEMOCRATIC AMENDMENTS

Several key Democratic amendments were defeated on a party-
line vote:
Contract Tracking. Rep. Kucinich offered an
amendment to create a comprehensive, governmentwide system to
track the cost and quality of agency contracting efforts,
focusing on contracts entered into as the result of a public-
private competition.
Competition Requirement. Rep. Van Hollen offered
an amendment to require any decision by an agency to transfer
the performance of a function from federal employees to a
contractor to be based on the results of a public-private
competition process.
Standing. Rep. Kucinich offered an amendment to
give federal employees or their representatives standing to
appeal the results of an A-76 decision transferring federal
jobs to private contractors.
Corporate Expatriate. Rep. Sanchez offered an
amendment to prohibit agencies from entering into any contract
with a subsidiary of a publicly traded corporation if the
corporation is incorporated in a tax haven country but the
United States is the principal market for the public trading of
the corporation's stock.
Debarment. Rep. Maloney offered an amendment to
allow debarment officials across agencies to share information
regarding contractors' activities.
Chief Acquisition Officer. Rep. Maloney offered an
amendment to ensure the bill's position of Chief Acquisition
Officer is held by a career professional.

IV. CONCLUSION

While we support the goal of streamlining federal
procurement laws, we cannot support SARA in its current form.
Unfortunately, as reported by the Committee, the bill exposes
the taxpayer to new forms of waste, fraud, and abuse in federal
contracting.

Henry A. Waxman.
Tom Lantos.
Major R. Owens.
Edolphus Towns.
Paul E. Kanjorski.
Bernard Sanders.
Carolyn B. Maloney.
Elijah E. Cummings.
Dennis J. Kucinich.
Danny K. Davis.
John F. Tierney.
Wm. Lacy Clay.
Diane E. Watson.
Stephen F. Lynch.
Chris Van Hollen.
Linda T. Sanchez.
C. A. Dutch Ruppersberger.
Eleanor Holmes Norton.
Jim Cooper.
Chris Bell.