[House Report 109-91]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     109-91

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



 
           GENERAL SERVICES ADMINISTRATION MODERNIZATION ACT

                                _______
                                

  May 23, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 2066]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Government Reform, to whom was referred the 
bill (H.R. 2066) to amend title 40, United States Code, to 
establish a Federal Acquisition Service, to replace the General 
Supply Fund and the Information Technology Fund with an 
Acquisition Services Fund, 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....................................     5
Section-by-Section...............................................    10
Explanation of Amendments........................................    12
Committee Consideration..........................................    13
Rollcall Votes...................................................    13
Application of Law to the Legislative Branch.....................    13
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    13
Statement of General Performance Goals and Objectives............    13
Constitutional Authority Statement...............................    13
Federal Advisory Committee Act...................................    13
Unfunded Mandate Statement.......................................    13
Committee Estimate...............................................    14
Budget Authority and Congressional Budget Office Cost Estimate...    14
Changes in Existing Law Made by the Bill as Reported.............    15

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

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``General Services Administration 
Modernization Act''.

SEC. 2. FEDERAL ACQUISITION SERVICE.

  (a) Establishment.--
          (1) In general.--Section 303 of title 40, United States Code, 
        is amended to read as follows:

``Sec. 303. Federal Acquisition Service

  ``(a) Establishment.--There is established in the General Services 
Administration a Federal Acquisition Service. The Administrator of 
General Services shall appoint a Commissioner of the Federal 
Acquisition Service, who shall be the head of the Federal Acquisition 
Service.
  ``(b) Functions.--Subject to the direction and control of the 
Administrator of General Services, the Commissioner of the Federal 
Acquisition Service shall be responsible for carrying out functions 
related to the uses for which the Acquisition Services Fund is 
authorized under section 321 of this title, including any functions 
that were carried out by the entities known as the Federal Supply 
Service and the Federal Technology Service and such other related 
functions as the Administrator considers appropriate.
  ``(c) Regional Executives.--The Administrator may appoint up to five 
Regional Executives in the Federal Acquisition Service, to carry out 
such functions within the Federal Acquisition Service as the 
Administrator considers appropriate.''.
          (2) Clerical amendment.--The item relating to section 303 at 
        the beginning of chapter 3 of such title is amended to read as 
        follows:

``303. Federal Acquisition Service.''.

  (b) Executive Schedule Compensation.--Section 5316 of title 5, United 
States Code, is amended by striking ``Commissioner, Federal Supply 
Service, General Services Administration.'' and inserting the 
following:
          ``Commissioner, Federal Acquisition Service, General Services 
        Administration.''.
  (c) References.--Any reference in any other Federal law, Executive 
order, rule, regulation, reorganization plan, or delegation of 
authority, or in any document--
          (1) to the Federal Supply Service is deemed to refer to the 
        Federal Acquisition Service;
          (2) to the GSA Federal Technology Service is deemed to refer 
        to the Federal Acquisition Service;
          (3) to the Commissioner of the Federal Supply Service is 
        deemed to refer to the Commissioner of the Federal Acquisition 
        Service; and
          (4) to the Commissioner of the GSA Federal Technology Service 
        is deemed to refer to the Commissioner of the Federal 
        Acquisition Service.

SEC. 3. ACQUISITION SERVICES FUND.

  (a) Abolishment of General Supply Fund and Information Technology 
Fund.--The General Supply Fund and the Information Technology Fund in 
the Treasury are hereby abolished.
  (b) Transfers.--Capital assets and balances remaining in the General 
Supply Fund and the Information Technology Fund as in existence 
immediately before this section takes effect shall be transferred to 
the Acquisition Services Fund and shall be merged with and be available 
for the purposes of the Acquisition Services Fund under section 321 of 
title 40, United States Code (as amended by this Act).
  (c) Assumption of Obligations.--Any liabilities, commitments, and 
obligations of the General Supply Fund and the Information Technology 
Fund as in existence immediately before this section takes effect shall 
be assumed by the Acquisition Services Fund.
  (d) Existence and Composition of Acquisition Services Fund.--
Subsections (a) and (b) of section 321 of title 40, United States Code, 
are amended to read as follows:
  ``(a) Existence.--The Acquisition Services Fund is a special fund in 
the Treasury.
  ``(b) Composition.--
          ``(1) In general.--The Fund is composed of amounts authorized 
        to be transferred to the Fund or otherwise made available to 
        the Fund.
          ``(2) Other credits.--The Fund shall be credited with all 
        reimbursements, advances, and refunds or recoveries relating to 
        personal property or services procured through the Fund, 
        including--
                  ``(A) the net proceeds of disposal of surplus 
                personal property; and
                  ``(B) receipts from carriers and others for loss of, 
                or damage to, personal property; and
                  ``(C) receipts from agencies charged fees pursuant to 
                rates established by the Administrator.
          ``(3) Cost and capital requirements.--The Administrator shall 
        determine the cost and capital requirements of the Fund for 
        each fiscal year and shall develop a plan concerning such 
        requirements in consultation with the Chief Financial Officer 
        of the General Services Administration. Any change to the cost 
        and capital requirements of the Fund for a fiscal year shall be 
        approved by the Administrator. The Administrator shall 
        establish rates to be charged agencies provided, or to be 
        provided, supply of personal property and non-personal services 
        through the Fund, in accordance with the plan.
          ``(4) Deposit of fees.--Fees collected by the Administrator 
        under section 313 of this title may be deposited in the Fund to 
        be used for the purposes of the Fund.''.
  (e) Uses of Fund.--Section 321(c) of such title is amended in 
paragraph (1)(A)--
          (1) by striking ``and'' at the end of clause (i);
          (2) by inserting ``and'' after the semicolon at the end of 
        clause (ii); and
          (3) by inserting after clause (ii) the following new clause:
                          ``(iii) personal services related to the 
                        provision of information technology (as defined 
                        in section 11101(6) of this title);''.
  (f) Payment for Property and Services.--Section 321(d)(2)(A) of such 
title is amended--
          (1) by striking ``and'' at the end of clause (iv);
          (2) by redesignating clause (v) as clause (vi); and
          (3) by inserting after clause (iv) the following new clause:
                          ``(v) the cost of personal services employed 
                        directly in providing information technology 
                        (as defined in section 11101(6) of this title); 
                        and''.
  (g) Transfer of Uncommitted Balances.--Subsection (f) of section 321 
of such title is amended to read as follows:
  ``(f) Transfer of Uncommitted Balances.--Following the close of each 
fiscal year, after making provision for a sufficient level of inventory 
of personal property to meet the needs of Federal agencies, the 
replacement cost of motor vehicles, and other anticipated operating 
needs reflected in the cost and capital plan developed under subsection 
(b), the uncommitted balance of any funds remaining in the Fund shall 
be transferred to the general fund of the Treasury as miscellaneous 
receipts.''.
  (h) Conforming and Clerical Amendments.--
          (1) Section 322 of such title is repealed.
          (2) The heading for section 321 of such title is amended to 
        read as follows:

``Sec. 321. Acquisition Services Fund''.

          (3) The table of sections for chapter 3 of such title is 
        amended by striking the items relating to sections 321 and 322 
        and inserting the following:

``321. Acquisition Services Fund.''.

          (4) Section 573 of such title is amended by striking 
        ``General Supply Fund'' both places it appears and inserting 
        ``Acquisition Services Fund''.
          (5) Section 604(b) of such title is amended--
                  (A) in the heading, by striking ``General Supply 
                Fund'' and inserting ``Acquisition Services Fund''; and
                  (B) in the text, by striking ``General Supply Fund'' 
                and inserting ``Acquisition Services Fund''.
          (6) Section 605 of such title is amended--
                  (A) in subsection (a)--
                          (i) in the heading, by striking ``General 
                        Supply Fund'' and inserting ``Acquisition 
                        Services Fund''; and
                          (ii) in the text, by striking ``General 
                        Supply Fund'' and inserting ``Acquisition 
                        Services Fund''; and
                  (B) in subsection (b)(2)--
                          (i) by striking ``321(f)(1)'' and inserting 
                        ``321(f)''; and
                          (ii) by striking ``General Supply Fund'' and 
                        inserting ``Acquisition Services Fund''.

SEC. 4. PROVISIONS RELATING TO ACQUISITION PERSONNEL.

  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 subsections:
  ``(i) Provisions Relating to Reemployment.--
          ``(1) Policies and procedures.--The head of each executive 
        agency, after consultation with the Administrator and the 
        Director of the Office of Personnel Management, shall establish 
        policies and procedures under which the agency head may 
        reemploy in an acquisition-related position (as described in 
        subsection (g)(1)(A)) an individual receiving an annuity from 
        the Civil Service Retirement and Disability Fund, on the basis 
        of such individual's service, without discontinuing such 
        annuity. The head of each executive agency shall keep the 
        Administrator informed of the agency's use of this authority.
          ``(2) Service not subject to csrs or fers.--An individual so 
        reemployed shall not be considered an employee for the purposes 
        of chapter 83 or 84 of title 5, United States Code.
          ``(3) Criteria for exercise of authority.--Polices and 
        procedures established pursuant to this subsection shall 
        authorize the head of the executive agency, on a case-by-case 
        basis, to continue an annuity if--
                  ``(A) the unusually high or unique qualifications of 
                an individual receiving an annuity from the Civil 
                Service Retirement and Disability Fund on the basis of 
                such individual's service, or
                  ``(B) a special need of the agency for the services 
                of an employee,
        makes the reemployment of an individual essential.
          ``(4) Reporting requirement.--The Administrator shall submit 
        annually to the Committee on Government Reform of the House of 
        Representatives and the Committee on Homeland Security and 
        Governmental Affairs of the Senate a report on the use of the 
        authority under this subsection, including the number of 
        employees reemployed under authority of this subsection.
          ``(5) Sunset provision.--The authority under this subsection 
        shall expire on December 31, 2011.
  ``(j) Retention Bonuses.--
          ``(1) In general.--The head of each executive agency, after 
        consultation with the Administrator, shall establish policies 
        and procedures under which the agency head may pay retention 
        bonuses to employees holding acquisition-related positions (as 
        described in subsection (g)(1)(A)) within such agency, except 
        that the authority to pay a bonus under this subsection shall 
        be available only if--
                  ``(A) the unusually high or unique qualifications of 
                an employee or a special need of the agency for the 
                services of an employee makes the retention of such 
                employee essential; and
                  ``(B) the agency determines that, in the absence of 
                such a bonus, it is likely that the employee would 
                leave--
                          ``(i) the Federal service; or
                          ``(ii) for a different position in the 
                        Federal service under conditions described in 
                        regulations of the Office.
          ``(2) Service agreements.--(A) Payment of a bonus under this 
        subsection shall be contingent upon the employee entering into 
        a written agreement with the agency to complete a period of 
        service with the agency in return for the bonus.
          ``(B)(i) The agreement shall include--
                  ``(I) the length of the period of service required;
                  ``(II) the bonus amount;
                  ``(III) the manner in which the bonus will be paid 
                (as described in paragraph (3)(B)); and
                  ``(IV) any other terms and conditions of the bonus, 
                including the terms and conditions governing the 
                termination of an agreement.
          ``(3) Terms and conditions.--A bonus under this subsection--
                  ``(A) may not exceed 50 percent of the basic pay of 
                the employee;
                  ``(B) may be paid to an employee--
                          ``(i) in installments after completion of 
                        specified periods of service;
                          ``(ii) in a single lump sum at the end of the 
                        period of service required by the agreement; or
                          ``(iii) in any other manner mutually agreed 
                        to by the agency and the employee;
                  ``(C) is not part of the basic pay of the employee; 
                and
                  ``(D) may not be paid to an employee who holds a 
                position--
                          ``(i) appointment to which is by the 
                        President, by and with the advice and consent 
                        of the Senate;
                          ``(ii) in the Senior Executive Service as a 
                        noncareer appointee (as such term is defined 
                        under section 3132(a) of title 5, United States 
                        Code); or
                          ``(iii) which has been excepted from the 
                        competitive service by reason of its 
                        confidential, policy-determining, policy-
                        making, or policy-advocating character.''.

SEC. 5. EFFECTIVE DATE.

  This Act and the amendments made by this Act shall take effect 60 
days after the date of the enactment of this Act.

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 2066, the General Services Administration 
Modernization Act, was introduced by Chairmen Davis and Hunter 
and would authorize a much needed reorganization and 
streamlining of the General Services Administration (GSA), the 
federal agency charged with leveraging the federal government's 
buying power to purchase commercial goods and services for the 
federal government at the best value possible. This legislation 
was approved by the Committee on Government Reform by unanimous 
consent on May 5, 2005. This legislation has long been 
championed by Chairman Davis, has been the subject of multiple 
legislative and oversight hearings by the Committee on 
Government Reform, and was included in the President's budget 
proposal for fiscal year 2006.

                  BACKGROUND AND NEED FOR LEGISLATION

    The General Services Administration, through the Federal 
Supply Service (FSS) and the Federal Technology Service (FTS), 
each year buys products and services from the private sector 
worth well over $30 billion and resells them to federal 
agencies using the General Supply Fund and the Information 
Technology Fund. Under FSS, federal agencies, and in some cases 
State and local governments, can deal directly with private 
sector vendors who make their products available on the FSS 
Schedule, which is managed by GSA. Under FTS, GSA plays a more 
active role by acting as a ``third party advisor'' for the 
federal agency in acquiring telecommunication and information 
technology goods and services. Fees collected from customer 
agencies are the main source of funds for both programs.
    This bifurcated system may have made sense when it was 
created two decades ago when information technology investments 
were a relatively new phenomenon, but technologies such as 
laptop computers, cell phones, and e-mail are now as ubiquitous 
with office supplies as are desks and phones. The technology 
market has evolved from the acquisition of stand-alone hardware 
or services to solutions that are a mix of products and 
services. There is no longer a need for separate services for 
technology and other products and services. Two separate buying 
organizations operating out of two different funds has become a 
barrier to coordinated acquisition of management services, and 
the technology needed to support a total solution.
    The process of establishing GSA as a modern supplier of 
products received a boost in 1996 when Congress passed the 
Clinger Cohen Act. That legislation, among other reforms, 
eliminated GSA's outdated centralized acquisition authority 
over information technology and authorized a number of 
significant management innovations for information technology, 
including the use of government-wide acquisition contracts. 
These government-wide contracts became a significant part of 
FTS's business base. GSA's business grew rapidly after 1996, 
yet its organizational structure remained static. This 
unrestrained growth without corresponding structural 
realignment resulted in overlapping and redundant functions in 
both FTS and FSS causing inefficiencies within GSA and 
confusion for customer agencies.
    In 2002, GSA instituted the process of establishing itself 
as a more modern organization in response to a report by 
Accenture on FTS/FSS organizational issues requested by 
Chairman Davis. In response to the report, GSA took several 
actions, including transferring contract development and 
management activities from FTS to FSS as well as combining 
market research and marketing functions in FSS. GSA is 
currently in the process of reorganizing FSS and FTS into a 
single, more efficient and effective acquisition entity. The 
plan is to have the new organization supported by a unified 
Acquisition Services Fund created by H.R. 2066's merger of 
GSA's General Supply and Information Technology Funds. The 
merger of the funds was proposed by the Administration in this 
year's budget submission.
    While the initial realignment activities were underway, the 
GSA Inspector General in 2003 issued a disturbing report 
concerning mismanagement of several FTS contracts in GSA's 
Bremerton, Washington office in GSA's Northwest Region and 
another in late 2004 showing similar problems in the remaining 
ten GSA Regions. In response, GSA established its ``Get it 
Right'' initiative aimed at ensuring accurate and transparent 
use of GSA government-wide contracting vehicles.
    H.R. 2066 would assist GSA in remedying its management 
challenges and responding to the evolving technology market. 
Critical to the permanent resolution of GSA management 
challenges is ensuring that the structural reforms are 
memorialized in GSA's organic legislation so that the remedies 
developed will endure. H.R. 2066 would provide an overall 
structure within which to consolidate FSS and FTS into a single 
entity operating out of a unified fund, providing federal 
agencies with a one-stop shop to acquire all of their 
commercial goods and services. The legislation is a culmination 
of years of effort by this Committee and the Subcommittee on 
Technology and Procurement Policy to modernize the GSA and to 
bring it in line with the commercial market it must capture for 
its federal agency customers. This legislation will provide GSA 
the structure it requires to reflect the best of the commercial 
marketplace.
    Specifically, the legislation would amend the Federal 
Property and Administrative Services Act of 1949 to create a 
new ``Federal Acquisition Service,'' combining the existing FSS 
(which currently purchases commercial goods and services for 
the federal government), and FTS (which currently supplies 
information technology to federal agencies). The new Federal 
Acquisition Service would be headed by a high-level 
Commissioner appointed by the GSA Administrator.
    H.R. 2066 would authorize the Federal Acquisition Service 
to be supported by a newly created ``Acquisition Services 
Fund,'' consisting of the assets of the old Information 
Technology and Supply Funds. The merged Acquisition Services 
Fund and Federal Acquisition Service created by this 
legislation would eliminate the artificial and outdated 
barriers that have prohibited GSA from offering acquisition 
services to customer agencies that combine information 
technology and other goods and services. The bill would allow 
GSA for the first time to offer customer agencies goods, 
services, and information technology together in a single 
acquisition. It would bring GSA in line with the current 
commercial market that has evolved from stand-alone hardware or 
services to solutions that are a mix of products, services and 
technology.
    H.R. 2066 would also authorize the GSA Administrator to 
appoint up to five ``Regional Executives'' for the Federal 
Acquisition Service to facilitate closer oversight and more 
management control over acquisition-related activities. 
Recently, the existing GSA regions were the subject of 
Inspector General reports that revealed evidence of acquisition 
mismanagement. Audit of Federal Technology Service's Client 
Support Centers, Report No. A020144/T/5/Z04002, January 8, 
2004; Compendium of Audits of the Federal Technology Service 
Regional Client Support Centers, December 14, 2004.
    H.R. 2066 would establish authority for retention bonuses 
and reemployment relief aimed at maintaining the strength and 
experience of the federal government's civilian acquisition 
workforce. Specifically, H.R. 2066 would provide that an 
individual receiving a civil service annuity who becomes 
reemployed in an acquisition-related position would not 
necessarily have his or her annuity discontinued.
    H.R. 2066 would help the Administrator in his efforts to 
address GSA's management challenges and would provide the 
structure to allow GSA to meet the demands of the modern 
government market. H.R. 2066 would remove the old structures 
that inhibit efficient Federal purchases of solutions that are 
a mix of products, services and technology. The Federal 
marketplace should reflect the best of the commercial 
marketplace: both in the products and services we buy and the 
way we buy them.

                                HEARINGS

    H.R. 2066 would update GSA's structure to enable it to 
access the modern commercial marketplace for its customer 
federal agencies. The legislation would also provide the 
structure GSA needs to provide better, more effective oversight 
and control of its acquisition-related activities performed in 
the GSA regions.
    H.R. 2066 is the product of an intensive hearing and 
oversight process that has spanned three Congresses. The 
provisions in the current legislation are rooted in the 
findings of multiple hearings held by the Subcommittee on 
Technology and Procurement Policy, the Committee on Government 
Reform, as well as in the recommendations of the President 
contained in this year's Budget Submission and the findings of 
the GSA Inspector General.
    On April 11, 2002, the Subcommittee on Technology and 
Procurement Policy held a hearing, Making Sense of 
Procurement's Alphabet Soup: How Purchasing Agencies Choose 
Between FSS and FTS, as part of its continuing oversight of the 
government's procurement and information technology management 
activities. Concerned about the overlapping and possibly 
redundant nature of the FSS/FTS structure, the Subcommittee 
reviewed the impact of the existing structure on GSA's customer 
agencies and the vendor community. This hearing was based on 
the report conducted by Accenture on the existing 
organizational structure of the Federal Technology Service and 
the Federal Supply Service and how to maximize the efficiency 
and effectiveness of the two services.
    The Subcommittee heard testimony from David Cooper, General 
Accounting Office (GAO)--now the Government Accountability 
Office--Director, Acquisition and Sourcing Management; Stephen 
Perry, GSA Administrator; Claudia Knott, Executive Director, 
Logistics Policy and Acquisition Management, Defense Logistics 
Agency; Edward Allen, Executive Director, Coalition for 
Government Procurement (CGP); and Dwight Hutchins, Partner, USA 
Federal Government Strategy Practice, Accenture.
    Chairman Davis explained that the aim of the hearing was to 
determine whether FSS and FTS ensure that American taxpayers 
receive fair value for their hard-earned dollars when the 
government acquires products or services. Government witnesses, 
Mr. Cooper and Administrator Perry, raised concerns about the 
existing overlap between the two services, as both provide 
access to similar products and services. The witnesses noted 
that eight of the top ten IT product and service providers hold 
contracts with both FSS and FTS. Mr. Cooper suggested that GSA 
should develop better performance measures. Administrator Perry 
said GSA is instituting a rigorous management review to improve 
performance and provide best value to its customers and for the 
government. Administrator Perry noted that GSA had recently 
contracted with Accenture to assist in the review, provide 
recommendations, and alternate solutions for improving GSA 
performance. Mr. Hutchins's testimony was limited to the 
approach and methodology Accenture will use for the study.
    Ms. Knott said DLA spends more than $300 million annually 
on Schedule contracts but relies on the Defense Information 
Systems Agency (DISA) to acquire telecommunications services. 
DISA in turn spends $14-15 million a year utilizing FTS 
contracts. Mr. Allen said that CGP member companies work 
closely with both FSS and FTS. Mr. Allen expressed concern that 
GSA's substantial growth has resulted in overlap between the 
two services. He noted that virtually every technology solution 
available under FTS contracts can be found through the 
Schedules. FTS buyers are the largest users of Schedule 
contracts, and duplicative contracts within FTS exist. There 
are multiple contract vehicles in FTS with similar offerings. 
This overlap takes valuable time away from customer service and 
inevitably increases acquisition costs. Mr. Allen stated that 
eliminating this overlap is key to GSA's future success.
    The hearing established that despite existing challenges, 
GSA was making progress in addressing the structural and 
management issues surrounding FTS and FSS. Based on information 
gleaned from this hearing, the Subcommittee enlisted the help 
of GAO in following the progress of GSA's implementation of the 
recommendations of the Accenture study and vowed to continue 
its oversight of these aspects of GSA's activities.
    On October 2, 2003, the Committee on Government Reform held 
another hearing on structural issues faced by GSA titled 
Entrepreneurial Government Run Amok? A Review of FTS/FSS 
Organizational and Management Challenges. This hearing explored 
efforts to restructure the organization of FSS and FTS, the 
impact of GSA Inspector General investigations of FTS contract 
mismanagement, and GSA's plans for a new government-wide 
telecommunications program. The hearing built on the 
information on GSA structural and management challenges 
developed in the previous Subcommittee hearing and supplemented 
by GAO work performed for the Committee.
    At the hearing, GSA Administrator Stephen Perry and the GAO 
Director of Acquisition and Sourcing Management William Woods 
testified along with private sector witnesses, Larry Allen, 
Executive Vice President of the Coalition for Government 
Procurement and Donald Scott Senior Vice President of EDS, Inc. 
on behalf of the International Technology Association of 
America (ITAA). Testimony focused on GSA's actions to implement 
its performance improvement project and the importance of 
enhancing GSA's ability to help agencies strategically purchase 
products and services.
    Administrator Perry discussed GSA's FTS and FSS performance 
improvement project, recent reports about mismanagement of FTS 
operations and its Information Technology Fund, and the 
strategy for GSA's recently proposed government-wide voice and 
data telecommunications program, Networx. He explained that GSA 
had begun to consolidate independent functions into one 
structure to meet customer and agency needs and to reduce 
duplication. Administrator Perry addressed the contracting 
mismanagement in GSA Regions found by the GSA Inspector 
General. Many of the problems centered on the use of the 
Information Technology Fund for non-technology items. Mr. Woods 
said that, while GSA actions should help reduce certain 
inefficiencies in its structure, GAO believed that GSA needs to 
take a more active role in helping federal agencies reduce the 
overall cost of their FSS and FTS purchases.
    Private sector witnesses from CGP and ITAA reiterated the 
need for GSA to eliminate duplicative contracts that result in 
higher overhead burdens for contractors and confusion among GSA 
customers. They shared the view that GSA's focus should be on 
efficiency and effectiveness and the redundancies between the 
FSS and FTS should be eliminated. At the conclusion of this 
hearing, the Chairman reiterated his intention to continue the 
Committee's oversight activities.
    On March 16, 2005, the Committee held yet another hearing 
on GSA structural issues: Service Oriented Streamlining: 
Rethinking the Way GSA Does Business. The hearing was held to 
explore removing the artificial barrier, created by two 
separate buying organizations operating out of different funds, 
to coordinated acquisition of goods, services and technology. 
The hearing addressed legislative and administrative options to 
consolidate FSS and FTS into a single entity operating out of a 
unified fund, in order to provide federal agencies with a one-
stop shop to acquire commercial goods, services and technology. 
This final hearing built on evidence developed in the prior 
hearings as well as recent revelations of contract management 
challenges in FTS exposed by the GSA Inspector General reports 
on weaknesses in GSA's management controls over its regional 
offices.
    Witnesses at this hearing included: Stephen Perry, GSA 
Administrator; Deidre Lee, Procurement Executive, Department of 
Defense, GSA's largest customer; Eugene Waszily, GSA Assistant 
Inspector General for Auditing; Thomas Hewitt, President, 
Global Government Inc. on behalf of ITAA; Vic Avetissian, 
Corporate Director (Government Acquisition Initiative) Northrop 
Grumman Corporation on behalf of the Contract Services 
Association of America; Mike Davison, Director & General 
Manager, Canon Government Marketing Division on behalf of the 
Coalition for Government Procurement; Elaine Dauphin, Vice 
President, GSA and GWAC Programs, Computer Sciences Corporation 
on behalf of the Professional Services Council; Richard Brown, 
National President, National Federation of Federal Employees. 
In addition, a statement was provided by Steven Kelman, 
Harvard's Kennedy School of Government, who was invited to 
appear but was unable to attend due to teaching obligations.
    Administrator Perry said that the initiative to reorganize 
and consolidate FSS and FTS is designed to strengthen GSA's 
capability to meet increasing agency requirements for 
excellence in acquisition of technology, telecommunications, 
and other products and services, so that agencies can continue 
to rely on GSA to meet their requirements and avoid the need to 
duplicate acquisition activities within their agencies. He said 
that GSA teams are scheduled to complete detailed 
reorganization/consolidation implementation plans by July 
enabling implementation to begin in the near future.
    Ms. Lee testified that in fiscal year 2004, FTS awarded 
contracts and task orders valued at over $6 billion for 
telecommunications, professional services and technology for 
DOD, and that DOD spent $7 billion through the FSS Schedules. 
Mr. Waszily supported the merging of the Federal Technology 
Fund with the General Supply Fund as an improvement in 
financial management.
    The private sector witnesses agreed that GSA should 
determine the needs of customer agencies, conduct a 
performance-based review, and develop a business model to 
support them. ITAA believes that GSA restructuring should focus 
on establishing direct lines of authority and responsibility to 
complement a business model that assigns accountability for its 
execution and success.
    Information gathered at this and the previous hearings was 
used to formulate H.R. 2066.

                           Section-by-Section


Section 1--Short title

    This section would provide that the Act be cited as the 
``General Services Administration Modernization Act.''

Section 2--Federal Acquisition Service

    This section would amend 40 U.S.C. 303 to provide for a new 
Federal Acquisition Service to be headed by a high-level 
Commissioner appointed by the Administrator of General Services 
(Administrator). The Commissioner of the Federal Acquisition 
Service would be responsible for heading the new Federal 
Acquisition Service which will carry out functions related to 
the newly, merged Acquisition Services fund created by section 
3 of this Act including any functions carried out by the 
current Federal Supply and Federal Technology Services.
    GSA purchases commercial products and services, including 
information technology from the private sector and resells them 
through various contract vehicles to customer government 
agencies. The Federal Supply Service, operating out of the 
current General Supply Fund, resells commercial goods and 
services while the Federal Technology Service, operating out of 
the current Information Technology Fund, specializes in 
technology goods and services. This section would provide in 
statute a broad structural outline for the new service, which 
will allow the General Services Administration to offer to 
customer agencies for the first time, goods and services and 
information technology together in a single acquisition. The 
Federal Acquisition Service will operate out of a merged 
Acquisition Services Fund created by section 3 to replace the 
General Supply and Information Technology Funds.
    This section would also authorize the Administrator to 
appoint up to five ``Regional Executives'' for the Federal 
Acquisition Service. The Regional Executives would perform such 
Federal Acquisition Service related functions that the 
Administrator considers appropriate. This section would 
establish a statutory Executive to facilitate closer oversight 
and more management control over acquisition-related activities 
that are conducted in GSA's Regional Offices throughout the 
country. Recently, the GSA regions were the subject of 
Inspector General reports that revealed evidence of serious 
acquisition mismanagement. These activities are in need of 
careful management control and oversight.
    This section also would amend 5 U.S.C. 5316 to substitute 
the new Commissioner of the Federal Acquisition Service for the 
current Commissioner of the Federal Supply Service for purposes 
of compensation and make other necessary technical changes.

Section 3--Acquisition Services Fund

    This section would repeal 40 U.S.C. 322 that established 
the General Services Administration's Information Technology 
Fund and amend 40 U.S.C. 321 that established the General 
Supply Fund to create a new Acquisition Services Fund 
consisting of the assets of the old Information Technology and 
Supply funds. GSA purchases commercial products and services 
from the private sector and resells them through various 
contract vehicles to customer government agencies. GSA 
currently uses the Supply Fund for commercial goods and 
services and the Information Technology Fund for technology 
goods and services.
    This new Acquisition Services Fund would support the 
unified activities of the Federal Acquisition Service created 
in Section 2 of this Act. The new merged fund would have the 
combined attributes of the old Supply and Information 
Technology funds but would eliminate the artificial and 
outdated barriers that prohibited GSA from offering acquisition 
services to customer agencies that combined information 
technology and other goods and services. Though there are 
changes to some of the specific wording for purposes of 
updating, it is the belief of the Committee that the use of the 
new fund for ``the provision of information technology'' would 
include all the existing uses of the Information Technology 
Fund, including efficiently managing, coordinating, operating 
and using information technology resources. The Committee also 
notes that GSA currently has the authority to enter into multi-
year contracts under 41 U.S.C. 254c.
    This section would provide for various amendments to 40 
U.S.C. 322 establishing the existence and composition of the 
new fund. It would provide that the Administrator determine the 
cost and capital requirements of the fund each fiscal year and, 
in consultation with the Chief Financial Officer, develop a 
plan concerning these requirements. The Administrator would 
establish rates to be charged agencies for services provided 
through the fund. Among other things, this section would also 
provide that, at the close of each fiscal year, after 
provisions for a sufficient inventory of personal property to 
meet agencies' needs, the replacement cost of motor vehicles, 
and other anticipated operating needs reflected in the 
Administrator's requirements plan, the uncommitted balance of 
any funds remaining in the fund are to be transferred to the 
Treasury's general fund as miscellaneous receipts.

Section 4--Provisions relating to acquisition personnel

    This section would amend section 37 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 433) to establish 
retention bonuses and reemployment relief aimed at maintaining 
the strength and experience of our civilian acquisition 
workforce. Specifically, the section would provide that the 
head of an executive agency, after consultation with the 
Administrator for Federal Procurement Policy (Administrator) 
and the Director of the Office of Personnel Management, 
establish policies and procedures under which an individual 
receiving a Civil Service Annuity who becomes reemployed in an 
acquisition-related position could under certain conditions not 
have his/her annuity discontinued. An employee would qualify 
for such reemployment treatment on a case-by-case basis if the 
employee's high or unique qualifications or the special needs 
of the agency make the reemployment of the individual 
essential. The Administrator would report annually to the 
Committee on Government Reform and the Committee on Homeland 
Security and Governmental Affairs on the use of the authority. 
The authority would sunset on December 31, 2011.
    This section would also provide that the head of each 
executive agency, after consultation with the Administrator, 
shall establish policies and procedures to pay retention 
bonuses to employees in acquisition related positions if it is 
essential to retain an employee with unusually high or unique 
qualifications or the special needs of the agency for an 
employee's services make it essential to retain the employee. 
The agency must also determine that, but for the bonus, the 
employee would leave federal service or, under certain 
conditions, leave for a different position in the federal 
service.
    The payment of retention bonuses would be contingent upon 
the employee executing a written service agreement, including 
the length of service required, amount of bonus, method of 
payment and other terms including termination. Under this 
section, retention bonuses would not exceed 50 percent of the 
employee's pay, may be paid in a lump sum or installments, are 
not to be a part of an employee's basic pay and may not be paid 
to individuals appointed by the President with Senate 
confirmation, in the Senior Executive Service as a non-career 
appointee, or a position that is excepted from the competitive 
service.

Section 5--Effective date

    This section would provide that the Act and amendments made 
by it would take effect 60 days after enactment.

                       Explanation of Amendments

    The amendment in the nature of the substitute, as amended, 
is explained in the descriptive portions of this report.

                        Committee Consideration

    On May 5, 2005, the Committee met in open session and 
ordered reported favorably the bill, H.R. 2066, as amended, by 
voice vote, a quorum being present. During Committee 
consideration an amendment was offered by Rep. Maloney to 
eliminate the requirement that the Commissioner of the new 
Federal Acquisition Service be a non-career employee. The 
amendment was adopted by unanimous consent.

                             Rollcall Votes

    No rollcall votes were held.

              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 where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill reorganizes and streamlines the General Services 
Administration, the federal agency charged with leveraging the 
federal government's buying power to purchase commercial goods 
and services for the federal government at the best value 
possible. As such this bill does not relate to employment or 
access to public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) 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

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report.

                   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. 2066. Article I, Section 8, Clause 18 of the 
Constitution of the United States grants the Congress the power 
to enact this law.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates 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. 2066. 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. 2066 from the Director of 
the Congressional Budget Office:

                                                      May 19, 2005.
Hon. Tom Davis,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2066, the General 
Services Administration Modernization Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                               Douglas Holtz-Eakin.
    Enclosure.

H.R. 2066--General Services Administration Modernization Act

    H.R. 2066 would amend federal law to establish a Federal 
Acquisition Service by combining the assets and services of the 
Federal Supply Service and the Federal Technology Service. The 
Federal Supply Service purchases goods and services for the 
federal government, and the Federal Technology Service provides 
information technology to federal agencies. In addition, the 
legislation would authorize retention bonuses and re-employment 
incentives for certain civilian federal employees.
    Because the legislation would restructure the agencies that 
procure goods and services for federal agencies and would not 
provide any new authorities for federal procurement or civilian 
acquisition personnel, CBO estimates that implementing H.R. 
2066 would have no significant effect on the budget and would 
not affect direct spending or revenues.
    H.R. 2066 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by Peter H. Fontaine, 
Deputy 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):

TITLE 40, UNITED STATES CODE

           *       *       *       *       *       *       *



SUBTITLE I--FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES

           *       *       *       *       *       *       *


CHAPTER 3--ORGANIZATION OF GENERAL SERVICES ADMINISTRATION

           *       *       *       *       *       *       *



                          SUBCHAPTER I--GENERAL

Sec.
301.  Establishment.
302.  Administrator and Deputy Administrator.
[303.  Functions.]
303.  Federal Acquisition Service.
     * * * * * * *

                          SUBCHAPTER III--FUNDS

[321.  General Supply Fund.
[322.  Information Technology Fund.]
321.  Acquisition Services Fund.

           *       *       *       *       *       *       *


SUBCHAPTER I--GENERAL

           *       *       *       *       *       *       *


[Sec. 303. Functions

  [(a) Bureau of Federal Supply.--
          [(1) Transfer of functions.--Subject to paragraph 
        (2), the functions of the Administrator of General 
        Services include functions related to the Bureau of 
        Federal Supply in the Department of the Treasury that, 
        immediately before July 1, 1949, were functions of--
                  [(A) the Bureau;
                  [(B) the Director of the Bureau;
                  [(C) the personnel of the Bureau; or
                  [(D) the Secretary of the Treasury.
          [(2) Functions not transferred.--The functions of the 
        Administrator of General Services do not include 
        functions retained in the Department of the Treasury 
        under section 102(c) of the Federal Property and 
        Administrative Services Act of 1949 (ch. 288, 63 Stat. 
        380).
  [(b) Federal Works Agency and Commissioner of Public 
Buildings.--The functions of the Administrator of General 
Services include functions related to the Federal Works Agency 
and functions related to the Commissioner of Public Buildings 
that, immediately before July 1, 1949, were functions of--
          [(1) the Federal Works Agency;
          [(2) the Federal Works Administrator; or
          [(3) the Commissioner of Public Buildings.]

Sec. 303. Federal Acquisition Service

  (a) Establishment.--There is established in the General 
Services Administration a Federal Acquisition Service. The 
Administrator of General Services shall appoint a Commissioner 
of the Federal Acquisition Service, who shall be the head of 
the Federal Acquisition Service.
  (b) Functions.--Subject to the direction and control of the 
Administrator of General Services, the Commissioner of the 
Federal Acquisition Service shall be responsible for carrying 
out functions related to the uses for which the Acquisition 
Services Fund is authorized under section 321 of this title, 
including any functions that were carried out by the entities 
known as the Federal Supply Service and the Federal Technology 
Service and such other related functions as the Administrator 
considers appropriate.
  (c) Regional Executives.--The Administrator may appoint up to 
five Regional Executives in the Federal Acquisition Service, to 
carry out such functions within the Federal Acquisition Service 
as the Administrator considers appropriate.

           *       *       *       *       *       *       *


                         SUBCHAPTER III--FUNDS

[Sec. 321. General Supply Fund

  [(a) Existence.--The General Supply Fund is a special fund in 
the Treasury.
  [(b) Composition.--
          [(1) In general.--The Fund is composed of amounts 
        appropriated to the Fund and the value, as determined 
        by the Administrator of General Services, of personal 
        property transferred from executive agencies to the 
        Administrator under section 501(d) of this title to the 
        extent that payment is not made or credit allowed for 
        the property.
          [(2) Other credits.--
                  [(A) In general.--The Fund shall be credited 
                with all reimbursements, advances, and refunds 
                or recoveries relating to personal property or 
                services procured through the Fund, including--
                          [(i) the net proceeds of disposal of 
                        surplus personal property; and
                          [(ii) receipts from carriers and 
                        others for loss of, or damage to, 
                        personal property.
                  [(B) Reappropriation.--Amounts credited under 
                this paragraph are reappropriated for the 
                purposes of the Fund.
          [(3) Deposit of fees.--Fees collected by the 
        Administrator under section 313 of this title may be 
        deposited in the Fund to be used for the purposes of 
        the Fund.]

Sec. 321. Acquisition Services Fund

  (a) Existence.--The Acquisition Services Fund is a special 
fund in the Treasury.
  (b) Composition.--
          (1) In general.--The Fund is composed of amounts 
        authorized to be transferred to the Fund or otherwise 
        made available to the Fund.
          (2) Other credits.--The Fund shall be credited with 
        all reimbursements, advances, and refunds or recoveries 
        relating to personal property or services procured 
        through the Fund, including--
                  (A) the net proceeds of disposal of surplus 
                personal property; and
                  (B) receipts from carriers and others for 
                loss of, or damage to, personal property; and
                  (C) receipts from agencies charged fees 
                pursuant to rates established by the 
                Administrator.
          (3) Cost and capital requirements.--The Administrator 
        shall determine the cost and capital requirements of 
        the Fund for each fiscal year and shall develop a plan 
        concerning such requirements in consultation with the 
        Chief Financial Officer of the General Services 
        Administration. Any change to the cost and capital 
        requirements of the Fund for a fiscal year shall be 
        approved by the Administrator. The Administrator shall 
        establish rates to be charged agencies provided, or to 
        be provided, supply of personal property and non-
        personal services through the Fund, in accordance with 
        the plan.
          (4) Deposit of fees.--Fees collected by the 
        Administrator under section 313 of this title may be 
        deposited in the Fund to be used for the purposes of 
        the Fund.
  (c) Uses.--
          (1) In general.--The Fund is available for use by or 
        under the direction and control of the Administrator 
        for--
                  (A) procuring, for the use of federal 
                agencies in the proper discharge of their 
                responsibilities--
                          (i) personal property (including the 
                        purchase from or through the Public 
                        Printer, for warehouse issue, of 
                        standard forms, blankbook work, 
                        standard specifications, and other 
                        printed material in common use by 
                        federal agencies and not available 
                        through the Superintendent of 
                        Documents); [and]
                          (ii) nonpersonal services; and
                          (iii) personal services related to 
                        the provision of information technology 
                        (as defined in section 11101(6) of this 
                        title);

           *       *       *       *       *       *       *

  (d) Payment for Property and Services.--
          (1) * * *
          (2) Prices fixed by administrator.--The Administrator 
        shall fix prices at levels sufficient to recover--
                  (A) so far as practicable--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) the cost of personal services 
                        employed directly in the repair, 
                        rehabilitation, and conversion of 
                        personal property; [and]
                          (v) the cost of personal services 
                        employed directly in providing 
                        information technology (as defined in 
                        section 11101(6) of this title); and
                          [(v)] (vi) the cost of amortization 
                        and repair of equipment used for lease 
                        or rent to executive agencies; and
                  (B) properly allocable costs payable by the 
                Fund under subsection (c)(1)(C).

           *       *       *       *       *       *       *

  [(f) Treatment of Surplus.--
          [(1) Surplus deposited in treasury.--As of September 
        30 of each year, any surplus in the Fund above the 
        amounts transferred or appropriated to establish and 
        maintain the Fund (all assets, liabilities, and prior 
        losses considered) shall be deposited in the Treasury 
        as miscellaneous receipts.
          [(2) Surplus retained.--From any surplus generated by 
        operation of the Fund, the Administrator may retain 
        amounts necessary to maintain a sufficient level of 
        inventory of personal property to meet the needs of the 
        federal agencies.]
  (f) Transfer of Uncommitted Balances.--Following the close of 
each fiscal year, after making provision for a sufficient level 
of inventory of personal property to meet the needs of Federal 
agencies, the replacement cost of motor vehicles, and other 
anticipated operating needs reflected in the cost and capital 
plan developed under subsection (b), the uncommitted balance of 
any funds remaining in the Fund shall be transferred to the 
general fund of the Treasury as miscellaneous receipts.

           *       *       *       *       *       *       *


[Sec. 322. Information Technology Fund

  [(a) Existence.--There is an Information Technology Fund in 
the Treasury.
  [(b) Cost and Capital Requirements.--
          [(1) In general.--The Administrator of General 
        Services shall determine the cost and capital 
        requirements of the Fund for each fiscal year. The cost 
        and capital requirements may include amounts--
                  [(A) needed to purchase (if the Administrator 
                has determined that purchase is the least 
                costly alternative) information processing and 
                transmission equipment, software, systems, and 
                operating facilities necessary to provide 
                services;
                  [(B) resulting from operations of the Fund, 
                including the net proceeds from the disposal of 
                excess or surplus personal property and 
                receipts from carriers and others for loss or 
                damage to property; and
                  [(C) that are appropriated, authorized to be 
                transferred, or otherwise made available to the 
                Fund.
          [(2) Submitting plans to office of management and 
        budget.--The Administrator shall submit plans 
        concerning the cost and capital requirements determined 
        under this section, and other information as may be 
        requested, for review and approval by the Director of 
        the Office of Management and Budget. Plans submitted 
        under this section fulfill the requirements of sections 
        1512 and 1513 of title 31.
          [(3) Adjustments.--Any change to the cost and capital 
        requirements of the Fund for a fiscal year shall be 
        made in the same manner as the initial fiscal year 
        determination.
  [(c) Use.--
          [(1) In general.--The Fund is available for expenses, 
        including personal services and other costs, and for 
        procurement (by lease, purchase, transfer, or 
        otherwise) to efficiently provide information 
        technology resources to federal agencies and to 
        efficiently manage, coordinate, operate, and use those 
        resources.
          [(2) Specifically included items.--Information 
        technology resources provided under this section 
        include information processing and transmission 
        equipment, software, systems, operating facilities, 
        supplies, and related services including maintenance 
        and repair.
          [(3) Cancellation costs.--Any cancellation costs 
        incurred for a contract entered into under subsection 
        (e) shall be paid from money currently available in the 
        Fund.
          [(4) No fiscal year limitation.--The Fund is 
        available without fiscal year limitation.
  [(d) Charges to Agencies.--If the Director approves plans 
submitted by the Administrator under subsection (b), the 
Administrator shall establish rates, consistent with the 
approval, to be charged to agencies for information technology 
resources provided through the Fund.
  [(e) Contract Authority.--
          [(1) In general.--In operating the Fund, the 
        Administrator may enter into multiyear contracts, not 
        longer than 5 years, to provide information technology 
        hardware, software, or services if--
                  [(A) amounts are available and adequate to 
                pay the costs of the contract for the first 
                fiscal year and any costs of cancellation or 
                termination;
                  [(B) the contract is awarded on a fully 
                competitive basis; and
                  [(C) the Administrator determines that--
                          [(i) the need for the information 
                        technology hardware, software, or 
                        services being provided will continue 
                        over the period of the contract;
                          [(ii) the use of the multiyear 
                        contract will yield substantial cost 
                        savings when compared with other 
                        methods of providing the necessary 
                        resources; and
                          [(iii) the method of contracting will 
                        not exclude small business 
                        participation.
          [(2) Effect on other law.--This subsection does not 
        limit the authority of the Administrator to procure 
        equipment and services under sections 501-505 of this 
        title.
  [(f) Transfer of Uncommitted Balance.--After the close of 
each fiscal year, any uncommitted balance remaining in the 
Fund, after making provision for anticipated operating needs as 
determined by the Office of Management and Budget, shall be 
transferred to the Treasury as miscellaneous receipts.
  [(g) Annual Report.--The Administrator shall report annually 
to the Director on the operation of the Fund. The report must 
address the inventory, use, and acquisition of information 
processing equipment and identify any proposed increases to the 
capital of the Fund.]
          * * * * * * *

                     CHAPTER 5--PROPERTY MANAGEMENT

          * * * * * * *

             SUBCHAPTER IV--PROCEEDS FROM SALE OR TRANSFER

          * * * * * * *

Sec. 573. Personal property

  The Administrator of General Services may retain from the 
proceeds of sales of personal property the Administrator 
conducts amounts necessary to recover, to the extent 
practicable, costs the Administrator (or the Administrator's 
agent) incurs in conducting the sales. The Administrator shall 
deposit amounts retained into the [General Supply Fund] 
Acquisition Services Fund established under section 321(a) of 
this title. From the amounts deposited, the Administrator may 
pay direct costs and reasonably related indirect costs incurred 
in conducting sales of personal property. At least once each 
year, amounts retained that are not needed to pay the direct 
and indirect costs shall be transferred from the [General 
Supply Fund] Acquisition Services Fund to the general fund or 
another appropriate account in the Treasury.
          * * * * * * *

     SUBCHAPTER VI--MOTOR VEHICLE POOLS AND TRANSPORTATION SYSTEMS

          * * * * * * *

Sec. 604. Treatment of assets taken over to establish motor vehicle 
                    pools and transportation systems

  (a) * * *
  (b) Addition to [General Supply Fund] Acquisition Services 
Fund.--If the Administrator takes over motor vehicles or 
related equipment or supplies under section 602 of this title 
but reimbursement is not required under subsection (a), the 
value of the property taken over, as determined by the 
Administrator, may be added to the capital of the [General 
Supply Fund] Acquisition Services Fund. If the Administrator 
subsequently returns property of a similar kind under section 
610 of this title, the value of the property may be deducted 
from the Fund.

Sec. 605. Payment of costs

  (a) Use of [General Supply Fund] Acquisition Services Fund To 
Cover Costs.--The [General Supply Fund] Acquisition Services 
Fund provided for in section 321 of this title is available for 
use by or under the direction and control of the Administrator 
of General Services to pay the costs of carrying out section 
602 of this title, including the cost of purchasing or renting 
motor vehicles and related equipment and supplies.
  (b) Setting Prices To Recover Costs.--
          (1) * * *
          (2) Increment for replacement cost.--In the 
        Administrator's discretion, prices may include an 
        increment for the estimated replacement cost of motor 
        vehicles and related equipment and supplies. 
        Notwithstanding section [321(f)(1)] 321(f) of this 
        title, the increment may be retained as a part of the 
        capital of the [General Supply Fund] Acquisition 
        Services Fund but is available only to replace motor 
        vehicles and related equipment and supplies.
          * * * * * * *
                              ----------                              


              SECTION 5316 OF TITLE 5, UNITED STATES CODE

Sec. 5316. Positions at level V

  Level V of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Administrator, Bonneville Power Administration, 
        Department of the Interior.
          * * * * * * *
          [Commissioner, Federal Supply Service, General 
        Services Administration.]
          Commissioner, Federal Acquisition Service, General 
        Services Administration.
          * * * * * * *
                              ----------                              


       SECTION 37 OF THE OFFICE OF FEDERAL PROCUREMENT POLICY ACT

SEC. 37. ACQUISITION WORKFORCE.

  (a) * * *
          * * * * * * *
  (i) Provisions Relating to Reemployment.--
          (1) Policies and procedures.--The head of each 
        executive agency, after consultation with the 
        Administrator and the Director of the Office of 
        Personnel Management, shall establish policies and 
        procedures under which the agency head may reemploy in 
        an acquisition-related position (as described in 
        subsection (g)(1)(A)) an individual receiving an 
        annuity from the Civil Service Retirement and 
        Disability Fund, on the basis of such individual's 
        service, without discontinuing such annuity. The head 
        of each executive agency shall keep the Administrator 
        informed of the agency's use of this authority.
          (2) Service not subject to csrs or fers.--An 
        individual so reemployed shall not be considered an 
        employee for the purposes of chapter 83 or 84 of title 
        5, United States Code.
          (3) Criteria for exercise of authority.--Polices and 
        procedures established pursuant to this subsection 
        shall authorize the head of the executive agency, on a 
        case-by-case basis, to continue an annuity if--
                  (A) the unusually high or unique 
                qualifications of an individual receiving an 
                annuity from the Civil Service Retirement and 
                Disability Fund on the basis of such 
                individual's service, or
                  (B) a special need of the agency for the 
                services of an employee,
        makes the reemployment of an individual essential.
          (4) Reporting requirement.--The Administrator shall 
        submit annually to the Committee on Government Reform 
        of the House of Representatives and the Committee on 
        Homeland Security and Governmental Affairs of the 
        Senate a report on the use of the authority under this 
        subsection, including the number of employees 
        reemployed under authority of this subsection.
          (5) Sunset provision.--The authority under this 
        subsection shall expire on December 31, 2011.
  (j) Retention Bonuses.--
          (1) In general.--The head of each executive agency, 
        after consultation with the Administrator, shall 
        establish policies and procedures under which the 
        agency head may pay retention bonuses to employees 
        holding acquisition-related positions (as described in 
        subsection (g)(1)(A)) within such agency, except that 
        the authority to pay a bonus under this subsection 
        shall be available only if--
                  (A) the unusually high or unique 
                qualifications of an employee or a special need 
                of the agency for the services of an employee 
                makes the retention of such employee essential; 
                and
                  (B) the agency determines that, in the 
                absence of such a bonus, it is likely that the 
                employee would leave--
                          (i) the Federal service; or
                          (ii) for a different position in the 
                        Federal service under conditions 
                        described in regulations of the Office.
          (2) Service agreements.--(A) Payment of a bonus under 
        this subsection shall be contingent upon the employee 
        entering into a written agreement with the agency to 
        complete a period of service with the agency in return 
        for the bonus.
          (B)(i) The agreement shall include--
                  (I) the length of the period of service 
                required;
                  (II) the bonus amount;
                  (III) the manner in which the bonus will be 
                paid (as described in paragraph (3)(B)); and
                  (IV) any other terms and conditions of the 
                bonus, including the terms and conditions 
                governing the termination of an agreement.
          (3) Terms and conditions.--A bonus under this 
        subsection--
                  (A) may not exceed 50 percent of the basic 
                pay of the employee;
                  (B) may be paid to an employee--
                          (i) in installments after completion 
                        of specified periods of service;
                          (ii) in a single lump sum at the end 
                        of the period of service required by 
                        the agreement; or
                          (iii) in any other manner mutually 
                        agreed to by the agency and the 
                        employee;
                  (C) is not part of the basic pay of the 
                employee; and
                  (D) may not be paid to an employee who holds 
                a position--
                          (i) appointment to which is by the 
                        President, by and with the advice and 
                        consent of the Senate;
                          (ii) in the Senior Executive Service 
                        as a noncareer appointee (as such term 
                        is defined under section 3132(a) of 
                        title 5, United States Code); or
                          (iii) which has been excepted from 
                        the competitive service by reason of 
                        its confidential, policy-determining, 
                        policy-making, or policy-advocating 
                        character.

                                  
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