[House Report 110-47]
[From the U.S. Government Publishing Office]



110th Congress                                             Rept. 110-47
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2
_______________________________________________________________________

                                     


                   ACCOUNTABILITY IN CONTRACTING ACT

                               __________

                              R E P O R T

                                 of the

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                                   on

                               H.R. 1362

      [Including cost estimate of the Congressional Budget Office]




 March 14, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed
                   HOUSE COMMITTEE ON ARMED SERVICES
                       one hundred tenth congress

                         IKE SKELTON, Missouri
JOHN SPRATT, South Carolina          DUNCAN HUNTER, California
SOLOMON P. ORTIZ, Texas              JIM SAXTON, New Jersey
GENE TAYLOR, Mississippi             JOHN M. McHUGH, New York
NEIL ABERCROMBIE, Hawaii             TERRY EVERETT, Alabama
MARTY MEEHAN, Massachusetts          ROSCOE G. BARTLETT, Maryland
SILVESTRE REYES, Texas               HOWARD P. ``BUCK'' McKEON, 
VIC SNYDER, Arkansas                     California
ADAM SMITH, Washington               MAC THORNBERRY, Texas
LORETTA SANCHEZ, California          WALTER B. JONES, North Carolina
MIKE McINTYRE, North Carolina        ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California        KEN CALVERT, California
ROBERT A. BRADY, Pennsylvania        JO ANN DAVIS, Virginia
ROBERT ANDREWS, New Jersey           W. TODD AKIN, Missouri
SUSAN A. DAVIS, California           J. RANDY FORBES, Virginia
RICK LARSEN, Washington              JEFF MILLER, Florida
JIM COOPER, Tennessee                JOE WILSON, South Carolina
JIM MARSHALL, Georgia                FRANK A. LoBIONDO, New Jersey
MADELEINE Z. BORDALLO, Guam          TOM COLE, Oklahoma
MARK UDALL, Colorado                 ROB BISHOP, Utah
DAN BOREN, Oklahoma                  MICHAEL TURNER, Ohio
BRAD ELLSWORTH, Indiana              JOHN KLINE, Minnesota
NANCY BOYDA, Kansas                  CANDICE S. MILLER, Michigan
PATRICK J. MURPHY, Pennsylvania      PHIL GINGREY, Georgia
HANK JOHNSON, Georgia                MIKE ROGERS, Alabama
CAROL SHEA-PORTER, New Hampshire     TRENT FRANKS, Arizona
JOE COURTNEY, Connecticut            THELMA DRAKE, Virginia
DAVID LOEBSACK, Iowa                 CATHY McMORRIS RODGERS, Washington
KIRSTEN GILLIBRAND, New York         K. MICHAEL CONAWAY, Texas
JOE SESTAK, Pennsylvania             GEOFF DAVIS, Kentucky
GABRIELLE GIFFORDS, Arizona
ELIJAH E. CUMMINGS, Maryland
KENDRICK B. MEEK, Florida
KATHY CASTOR, Florida
                      Erin Conaton, Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

Purpose and Background...........................................     5
Legislative History..............................................     6
Section-by-Section Analysis......................................     6
  Section 1--Short Title; Table of Contents......................     6
TITLE I--IMPROVING THE QUALITY OF CONTRACTS......................     6
  Section 101--Limitation on Length of Noncompetitive Contracts..     6
  Section 102--Minimizing Sole-Source Contracts..................     7
  Section 103--Maximizing Fixed-Price Procurement Contracts......     8
TITLE II--INCREASING CONTRACT OVERSIGHT..........................     8
  Section 201--Public Disclosure of Justification and Approval 
    Documents for Noncompetitive Contracts.......................     8
  Section 202--Disclosure of Government Contractor Audit Findings     8
  Section 203--Study of Acquisition Workforce....................     9
  Section 204--Repeal of Sunset of Training Fund.................    10
TITLE III--PROMOTING INTEGRITY IN CONTRACTING....................    10
  Section 301--Additional Provisions Relating to Procurement 
    Officials....................................................    10
Committee Position...............................................    10
Congressional Budget Office Estimate.............................    11
Committee Cost Estimate..........................................    12
Oversight Findings...............................................    12
Constitutional Authority Statement...............................    12
Earmarks.........................................................    12
Statement of Federal Mandates....................................    12
Record Vote......................................................    12
Changes in Existing Law Made by the Bill, as Reported............    14


110th Congress                                             Rept. 110-47
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

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



 
                   ACCOUNTABILITY IN CONTRACTING ACT

                                _______
                                

                 March 14, 2007.--Ordered to be printed

                                _______
                                

   Mr. Skelton, from the Committee on Armed Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1362]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Armed Services, to whom was referred the 
bill (H.R. 1362) to reform acquisition practices of the Federal 
Government, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

Sec. 1. Short title and table of contents.

              TITLE I--IMPROVING THE QUALITY OF CONTRACTS

Sec. 101. Limitation on length of noncompetitive contracts.
Sec. 102. Minimizing sole-source contracts.
Sec. 103. Maximizing fixed-price procurement contracts.

                TITLE II--INCREASING CONTRACT OVERSIGHT

Sec. 201. Public disclosure of justification and approval documents for 
noncompetitive contracts.
Sec. 202. Disclosure of Government contractor audit findings.
Sec. 203. Study of acquisition workforce.
Sec. 204. Repeal of sunset of training fund.

             TITLE III--PROMOTING INTEGRITY IN CONTRACTING

Sec. 301. Additional provisions relating to procurement officials.

              TITLE I--IMPROVING THE QUALITY OF CONTRACTS

SEC. 101. LIMITATION ON LENGTH OF NONCOMPETITIVE CONTRACTS.

  (a) Revision of FAR.--Not later than one year after the date of the 
enactment of this Act, the Federal Acquisition Regulation shall be 
revised to restrict the contract period of any contract described in 
subsection (c) to the minimum contract period necessary--
          (1) to meet the urgent and compelling requirements of the 
        work to be performed under the contract; and
          (2) to enter into another contract for the required goods or 
        services through the use of competitive procedures.
  (b) Contract Period.--The regulations promulgated under subsection 
(a) shall require the contract period to not exceed one year, unless 
the head of the executive agency concerned determines that the 
Government would be seriously injured by the limitation on the contract 
period.
  (c) Covered Contracts.--This section applies to any contract in an 
amount greater than $1,000,000 entered into by an executive agency 
using procedures other than competitive procedures pursuant to the 
exception provided in section 303(c)(2) of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 253(c)(2)) or section 
2304(c)(2) of title 10, United States Code.
  (d) Definitions.--In this section:
          (1) The term ``executive agency'' has the meaning provided in 
        section 4(1) of the Office of Federal Procurement Policy Act 
        (41 U.S.C. 403(1)).
          (2) The term ``head of the executive agency'' means the head 
        of an executive agency except that, in the case of the 
        Department of Defense, the term means--
                  (A) in the case of a military department, the 
                Secretary of the military department;
                  (B) in the case of a Defense Agency, the head of the 
                Defense Agency; and
                  (C) in the case of any part of the Department of 
                Defense other than a military department or Defense 
                Agency, the Under Secretary of Defense for Acquisition, 
                Technology, and Logistics.

SEC. 102. MINIMIZING SOLE-SOURCE CONTRACTS.

  (a) Plans Required.--Subject to subsection (c), the head of each 
executive agency covered by title III of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) or, in the 
case of the Department of Defense, the Under Secretary of Defense for 
Acquisition, Technology, and Logistics, shall develop and implement a 
plan to minimize, to the maximum extent practicable, the use of 
contracts entered into using procedures other than competitive 
procedures by the agency or department concerned. The plan shall 
contain measurable goals and shall be completed and submitted to the 
Committee on Oversight and Government Reform of the House of 
Representatives, the Committee on Homeland Security and Governmental 
Affairs of the Senate, and the Committees on Appropriations of the 
House of Representatives and the Senate and, in the case of the 
Department of Defense and the Department of Energy, the Committees on 
Armed Services of the Senate and the House of Representatives, with a 
copy provided to the Comptroller General, not later than 1 year after 
the date of the enactment of this Act.
  (b) Comptroller General Review.--The Comptroller General shall review 
the plans provided under subsection (a) and submit a report to Congress 
on the plans not later than 18 months after the date of the enactment 
of this Act.
  (c) Requirement Limited to Certain Agencies.--The requirement of 
subsection (a) shall apply only to those agencies that awarded 
contracts in a total amount of at least $1,000,000,000 in the fiscal 
year preceding the fiscal year in which the report is submitted.

SEC. 103. MAXIMIZING FIXED-PRICE PROCUREMENT CONTRACTS.

  (a) Plans Required.--Subject to subsection (c), the head of each 
executive agency covered by title III of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) or, in the 
case of the Department of Defense, the Under Secretary of Defense for 
Acquisition, Technology, and Logistics, shall develop and implement a 
plan to maximize, to the fullest extent practicable, the use of fixed-
price type contracts for the procurement of goods and services by the 
agency or department concerned. The plan shall contain measurable goals 
and shall be completed and submitted to the Committee on Oversight and 
Government Reform of the House of Representatives, the Committee on 
Homeland Security and Governmental Affairs of the Senate, and the 
Committees on Appropriations of the House of Representatives and the 
Senate and, in the case of the Department of Defense and the Department 
of Energy, the Committees on Armed Services of the Senate and the House 
of Representatives, with a copy provided to the Comptroller General, 
not later than 1 year after the date of the enactment of this Act.
  (b) Comptroller General Review.--The Comptroller General shall review 
the plans provided under subsection (a) and submit a report to Congress 
on the plans not later than 18 months after the date of the enactment 
of this Act.
  (c) Requirement Limited to Certain Agencies.--The requirement of 
subsection (a) shall apply only to those agencies that awarded 
contracts in a total amount of at least $1,000,000,000 in the fiscal 
year preceding the fiscal year in which the report is submitted.

                TITLE II--INCREASING CONTRACT OVERSIGHT

SEC. 201. PUBLIC DISCLOSURE OF JUSTIFICATION AND APPROVAL DOCUMENTS FOR 
                    NONCOMPETITIVE CONTRACTS.

  (a) Civilian Agency Contracts.--
          (1) In general.--Section 303 of the Federal Property and 
        Administrative Services Act of 1949 (41 U.S.C. 253) is amended 
        by adding at the end the following new subsection:
  ``(j)(1)(A) Except as provided in subparagraph (B), in the case of a 
procurement permitted by subsection (c), the head of an executive 
agency shall make publicly available, within 14 days after the award of 
the contract, the documents containing the justification and approval 
required by subsection (f)(1) with respect to the procurement.
  ``(B) In the case of a procurement permitted by subsection (c)(2), 
subparagraph (A) shall be applied by substituting `30 days' for `14 
days'.
  ``(2) The documents shall be made available on the website of the 
agency and through the Federal Procurement Data System.
  ``(3) This subsection does not require the public availability of 
information that is exempt from public disclosure under section 552(b) 
of title 5, United States Code.''.
          (2) Conforming amendment.--Section 303(f) of such Act is 
        amended--
                  (A) by striking paragraph (4); and
                  (B) by redesignating paragraph (5) as paragraph (4).
  (b) Defense Agency Contracts.--
          (1) In general.--Section 2304 of title 10, United States 
        Code, is amended by adding at the end the following new 
        subsection:
  ``(l)(1)(A) Except as provided in subparagraph (B), in the case of a 
procurement permitted by subsection (c), the head of an agency shall 
make publicly available, within 14 days after the award of the 
contract, the documents containing the justification and approval 
required by subsection (f)(1) with respect to the procurement.
  ``(B) In the case of a procurement permitted by subsection (c)(2), 
subparagraph (A) shall be applied by substituting `30 days' for `14 
days'.
  ``(2) The documents shall be made available on the website of the 
agency and through the Federal Procurement Data System.
  ``(3) This subsection does not require the public availability of 
information that is exempt from public disclosure under section 552(b) 
of title 5.''.
          (2) Conforming amendment.--Section 2304(f) of such title is 
        amended--
                  (A) by striking paragraph (4); and
                  (B) by redesignating paragraphs (5) and (6) as 
                paragraphs (4) and (5), respectively.

SEC. 202. DISCLOSURE OF GOVERNMENT CONTRACTOR AUDIT FINDINGS.

  (a) Quarterly Report to Congress.--
          (1) The head of each Federal agency or department or, in the 
        case of the Department of Defense, the Under Secretary of 
        Defense for Acquisition, Technology, and Logistics, shall 
        submit to the chairman and ranking member of each committee 
        specified in paragraph (2) on a quarterly basis a report that 
        includes the following:
                  (A) A list of completed audits performed by such 
                agency or department issued during the applicable 
                quarter that describe contractor costs in excess of 
                $10,000,000 that have been identified as unjustified, 
                unsupported, questioned, or unreasonable under any 
                contract, task or delivery order, or subcontract.
                  (B) The specific amounts of costs identified as 
                unjustified, unsupported, questioned, or unreasonable 
                and the percentage of their total value of the 
                contract, task or delivery order, or subcontract.
                  (C) A list of completed audits performed by such 
                agency or department issued during the applicable 
                quarter that identify material deficiencies in the 
                performance of any contractor or in any business system 
                of any contractor under any contract, task or delivery 
                order, or subcontract.
          (2) The report described in paragraph (1) shall be submitted 
        to--
                  (A) the Committee on Oversight and Government Reform 
                of the House of Representatives;
                  (B) the Committee on Homeland Security and 
                Governmental Affairs of the Senate;
                  (C) the Committees on Appropriations of the House of 
                Representatives and the Senate;
                  (D) in the case of reports from the Department of 
                Defense or the Department of Energy, the Committees on 
                Armed Services of the Senate and the House of 
                Representatives; and
                  (E) the committees of primary jurisdiction over the 
                agency or department submitting the report.
          (3) Paragraph (1) shall not apply to an agency or department 
        with respect to a calendar quarter if no audits described in 
        paragraph (1) were issued during that quarter.
  (b) Submission of Individual Audits.--
          (1) The head of each Federal agency or department shall 
        provide, within 14 days after a request in writing by the 
        chairman or ranking member of any committee listed in paragraph 
        (2), a full and unredacted copy of any audit described in 
        subsection (a)(1). Such copy shall include an identification of 
        information in the audit exempt from public disclosure under 
        section 552(b) of title 5, United States Code.
          (2) The committees listed in this paragraph are the 
        following:
                  (A) The Committee on Oversight and Government Reform 
                of the House of Representatives.
                  (B) The Committee on Homeland Security and 
                Governmental Affairs of the Senate.
                  (C) The Committees on Appropriations of the House of 
                Representatives and the Senate.
                  (D) In the case of the Department of Defense or the 
                Department of Energy, the Committees on Armed Services 
                of the Senate and House of Representatives.
                  (E) The committees of primary jurisdiction over the 
                agency or department to which the request is made.

SEC. 203. STUDY OF ACQUISITION WORKFORCE.

  (a) Requirement for Study.--The Administrator for Federal Procurement 
Policy shall conduct a study of the composition, scope, and functions 
of the Government-wide acquisition workforce and develop a 
comprehensive definition of, and method of measuring the size of, such 
workforce.
  (b) Report.--Not later than 1 year after the date of the enactment of 
this Act, the Administrator shall submit to the relevant congressional 
committees a report on the results of the study required by subsection 
(a), with such findings and recommendations as the Administrator 
determines appropriate.

SEC. 204. REPEAL OF SUNSET OF TRAINING FUND.

  Subparagraph (H) of section 37(h)(3) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 433(h)(3)) is repealed.

             TITLE III--PROMOTING INTEGRITY IN CONTRACTING

SEC. 301. ADDITIONAL PROVISIONS RELATING TO PROCUREMENT OFFICIALS.

  (a) Elimination of Loopholes That Allow Former Federal Officials to 
Accept Compensation From Contractors or Related Entities.--Section 
27(d) of the Office of Federal Procurement Policy Act (41 U.S.C. 
423(d)) is amended--
          (1) in paragraph (1) by striking ``or consultant'' and 
        inserting ``consultant, lawyer, or lobbyist''; and
          (2) by amending paragraph (2) to read as follows:
  ``(2) Paragraph (1) shall not prohibit a former official of a Federal 
agency from accepting compensation from any division or affiliate of a 
contractor that does not produce the same or similar products or 
services as the entity of the contractor that is responsible for the 
contract referred to in subparagraph (A), (B), or (C) of such paragraph 
if the agency's designated ethics officer determines that the former 
official's acceptance of compensation would not damage public 
confidence in the integrity of the procurement process.''.
  (b) Requirement for Federal Procurement Officers to Disclose Job 
Offers Made on Behalf of Relatives.--Section 27(c)(1) of such Act (41 
U.S.C. 423(c)(1)) is amended by inserting after ``that official'' the 
following: ``or for a relative of that official (as defined in section 
3110 of title 5, United States Code)''.
  (c) Requirement on Award of Government Contracts to Former 
Employers.--Section 27 of such Act (41 U.S.C. 423) is amended by adding 
at the end the following new subsection:
  ``(i) Prohibition on Involvement by Certain Former Contractor 
Employees in Procurements.--An employee of the Federal Government who 
is a former employee of a contractor with the Federal Government shall 
not be personally and substantially involved with any award of a 
contract to the employee's former employer for the one-year period 
beginning on the date on which the employee leaves the employment of 
the contractor unless the employee has received a waiver from the 
agency's designated ethics officer. In determining whether to issue a 
waiver, the designated ethics officer shall take into account the 
agency's need for the involvement of the employee and the impact a 
waiver would have on public confidence in the integrity of the 
procurement process.''.
  (d) Regulations.--Section 27 of such Act (41 U.S.C. 423) is further 
amended by adding at the end the following new subsection:
  ``(j) Regulations.--The Administrator, in consultation with the 
Director of the Office of Government Ethics, shall--
          ``(1) promulgate regulations to carry out and ensure the 
        enforcement of this section; and
          ``(2) monitor and investigate individual and agency 
        compliance with this section.''.
  (e) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

                         Purpose and Background

    The purpose of H.R. 1362, the ``Accountability in 
Contracting Act,'' is to amend titles 10 and 41, United States 
Code, and to establish other new statutory requirements, to 
improve the quality of government contracts, increase contract 
oversight, and promote integrity in contracting.
    The committee has worked for decades to improve the 
contracting process at the Department of Defense, where more 
than half of all government contracts are administered. 
Although a number of the committee's legislative efforts have 
been major additions or revisions to the United States Code, 
such as the creation of the Federal Acquisition Streamlining 
Act (FASA) of 1994 (Public Law 103-355), the Federal 
Acquisition Reform Act (FARA) of 1996 (Public Law 104-106) and 
the Services Acquisition Reform Act (SARA) of 2003 (Public Law 
108-136) the committee has also worked steadily in each annual 
defense authorization act to exercise oversight of the defense 
contracting process and to make improvements, large and small, 
to acquisition law. The committee utilized the experience 
gained in these legislative efforts to formulate its 
recommendations on H.R. 1362.
    Currently, U.S. military forces are deployed worldwide in 
support of Operation Iraqi Freedom, efforts in Afghanistan and 
elsewhere as part of the war on terrorism, and other military 
operations. These contingency operations have generated a large 
number of contracts, many of substantial scope. In particular, 
the Department has expended billions of dollars on support and 
reconstruction contracts that have been awarded, administered, 
and overseen in the most challenging of conditions, presenting 
unique challenges to the acquisition system. H.R. 1362 would 
help address these challenges by empowering the secretaries of 
the military departments and the heads of the defense agencies 
to ensure the proper use of a variety of contract types, both 
competitive and non-competitive, and further empower Congress 
in its oversight of such contracts. It would also ensure 
continued faith in the integrity of the procurement system, 
without which the acquisition system cannot function.
    This bill would improve the ability of the heads of all 
federal agencies, and in the case of the Department, the Under 
Secretary of Defense for Acquisition, Technology, and 
Logistics, to promote competition in contracting and to 
maximize the use of efficient contracting methods such as fixed 
price contracting in procurement programs. This bill would also 
provide Congress and the general public greater oversight of 
contracts by making the contract documents used to justify 
limiting competition publicly available within 14 or 30 days, 
depending on the type of contract. This bill would codify the 
right and ability of Congress to obtain copies of completed 
audits relating to findings on contractor costs in excess of 
$10.0 million and of material performance deficiencies. This 
bill also would require a government-wide study of the 
acquisition workforce. This bill would amend title 41, United 
States Code, to make permanent the acquisition workforce 
training fund. It would further amend title 41 to strengthen 
requirements relating to the pre- and post-government 
employment of procurement officials.

                          Legislative History

    H.R. 1362 was introduced on March 6, 2007, and referred to 
the Committee on Oversight and Government Reform and the 
Committee on Armed Services, for a period to be subsequently 
determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the 
committee concerned. On March 8, 2007, the Committee on 
Oversight and Government Reform ordered H.R. 1362, as amended, 
reported to the House with a favorable recommendation by voice 
vote.
    On March 13, 2007, the Committee on Armed Services held a 
mark-up session to consider H.R. 1362, as introduced. By 
unanimous consent the committee agreed to consider Chairman 
Skelton's amendment in the nature of a substitute as the base 
text. The committee ordered H.R. 1362, as amended, reported to 
the House with a favorable recommendation by a record vote of 
53-0, a quorum being present.

                      Section-by-Section Analysis

    The following is a section-by-section analysis of those 
sections of H.R. 1362, as amended by the Committee on Armed 
Services.

Section 1--Short title; table of contents

    This section would establish the short title of the bill as 
the ``Accountability in Contracting Act.''

              TITLE I--IMPROVING THE QUALITY OF CONTRACTS


Section 101--Limitation on length of noncompetitive contracts

    This section would require a revision of the Federal 
Acquisition Regulation, within one year following the date of 
enactment, in order to limit the period of performance on 
certain contracts. This section would apply only to contracts 
valued at more than $1.0 million that, due to urgent and 
compelling need, are awarded using procedures other than full 
and open competition. This section would also limit the 
contract period to the minimum period necessary to meet the 
urgent and compelling requirement and to enter into a follow-on 
contract through the use of competitive procedures. In general, 
this section limits the contract period to not more than one 
year. The contract period limitation can be waived by the head 
of the executive agency or, in the case of the Department of 
Defense, the secretary of a military department, the head of a 
defense agency, or the Under Secretary of Defense for 
Acquisition, Technology, and Logistics, upon a determination 
that the Government would be seriously injured by the 
limitation on the contract period.
    The committee acknowledges that there may be circumstances, 
particularly during a time of war, during which the Department 
may require the use of noncompetitive contracts on the basis of 
urgent and compelling need. The committee believes that, in 
most circumstances, it should be possible to negotiate follow-
on contracts using competitive procedures within a one-year 
period. The committee provides a waiver to this limitation in 
recognition of the fact that, in some cases, it may be possible 
that the limitation on the contract period would result in 
injury to the Government. The committee has not limited the 
delegation of this waiver authority, but expects that it will 
be assigned at a level appropriate for making a determination 
on the possibility of serious injury occurring due to the 
limitation of the contract period.

Section 102--Minimizing sole-source contracts

    This section would require each executive agency that 
awards contracts in a total amount of $1.0 billion or more 
during the previous fiscal year to develop and implement a plan 
to minimize, to the maximum extent practicable, the use of all 
contracts entered into using procedures other than competitive 
procedures, including a single plan for the Department of 
Defense. All plans must include measurable goals and be 
submitted to Congress and to the Comptroller General within one 
year. This section would also require the Comptroller General 
to review the agency plans and submit a report to Congress 
within six months of receiving the plans.
    The committee is aware that the Competition in Contracting 
Act (Public Law 98-369) provides a number of exceptions to the 
requirement for the use of competitive procedures for 
procurement of goods and services. The committee does not 
intend to limit the appropriate use of sole-source contracts or 
contracts awarded on the basis of limited competition. For 
example, the committee is aware that, in certain circumstances, 
agencies are authorized to limit competition to participation 
only by small business concerns; likewise, there are other 
exceptions to competition requirements that are allowed in 
order to advance important public policy goals. The committee 
does not intend the implementation of the required plans to 
reduce the use of other than competitive procedures in a way 
that would undermine these policy goals. Rather, the committee 
recommends that the Under Secretary of Defense for Acquisition, 
Technology, and Logistics evaluate methods to maximize the use 
of competitive procedures. Such an evaluation should include, 
for example, an assessment of the benefits of the use of 
contingency contracts in preparation for national emergencies 
and contracts to develop secondary sources for goods and 
services currently available from only one responsible source.
    Finally, the committee understands that an urgent and 
compelling need for goods or services may shorten the time 
period available for defining contract terms, negotiating 
agreements on allowable costs, and protecting the Government's 
interest in contracts awarded using procedures other than 
competitive procedures. As a result of these challenges, it is 
of great importance that the Government be able to maintain the 
highest degree of visibility into the costs of executing such 
contracts and to maintain the highest degree of negotiating 
leverage with the contractor as possible. The committee is 
concerned that the award of these contracts to foreign firms, 
or to firms which relocate overseas, could reduce both 
visibility and the Government's negotiating leverage. The 
committee intends for agency heads to address these concerns in 
the plan that this section would require.

Section 103--Maximizing fixed-price procurement contracts

    This section would require each executive agency that 
awarded contracts in a total amount of $1.0 billion or more 
during the previous fiscal year to develop and implement a plan 
to maximize, where appropriate, the use of fixed-price type 
contracts for the procurement of goods and services, including 
a single plan for the Department of Defense. All plans must 
contain measurable goals and be submitted to Congress and the 
Comptroller General within one year. This section would also 
require the Comptroller General to review the agency plans and 
submit a report to Congress within six months of receiving the 
plans.
    The committee believes that fixed-price type contracts are 
appropriately used when the risk involved can be predicted with 
an acceptable degree of certainty. The committee also believes 
that, in the case of complex contract requirements, 
particularly those unique to the government, cost-reimbursement 
contracts can be fully appropriate. This is especially true for 
complex research and development contracts, when performance 
uncertainties or the likelihood of changes makes it difficult 
to estimate performance costs in advance. The committee 
recommends the Under Secretary of Defense for Acquisition, 
Technology, and Logistics evaluate methods to reduce risk to 
the Government in procurement contracts and, as a result, 
appropriately maximize the use of fixed-price type contracts 
for procurement.

                TITLE II--INCREASING CONTRACT OVERSIGHT


Section 201--Public disclosure of justification and approval documents 
        for noncompetitive contracts

    This section would require the head of an executive agency 
to make certain justification and approval documents relating 
to the use of noncompetitive procedures in contracting 
available on the website of the agency and through the Federal 
Procurement Data System within 14 days of contract award. In 
the case of noncompetitive contracts awarded on the basis of 
urgent and compelling needs, the documents would have to be 
posted within 30 days. The Competition in Contracting Act 
(Public Law 98-369) already requires that such justification 
and approval documents be made available for inspection by the 
public, subject to the exemptions from public disclosure 
provided in the Freedom of Information Act (5 U.S.C. 552).

Section 202--Disclosure of government contractor audit findings

    This section would require the head of each federal agency 
or department, in the case of the Department of Defense, the 
Under Secretary of Defense for Acquisition, Technology and 
Logistics, to submit quarterly reports to Congress on completed 
audits of contractors performed by the agency or department. 
Such reports would describe contractor costs in excess of 
$10,000,000 that a completed audit identified as unjustified, 
unsupported, questioned, or unreasonable. This section would 
also require such reports to list completed audits identifying 
material performance deficiencies of a contractor or a 
contractor business system.
    This section would also require the head of each federal 
agency or department to provide, within 14 days after a request 
in writing by the chairman or ranking member of the House 
Committee on Oversight and Government Reform, the Senate 
Committee on Homeland Security and Governmental Affairs, the 
Senate Committee on Appropriations and the House Committee on 
Appropriations, and in the case of audits performed by the 
Department of Defense or the Department of Energy, the Senate 
Committee on Armed Services and the House Committee on Armed 
Services, and the committees of primary jurisdiction, a full 
and unredacted copy of any completed audit referenced in a 
quarterly report. This section would require such a copy to 
identify information exempt from public disclosure under the 
Freedom of Information Act (5 U.S.C. 552).
    The committee does not intend this section to alter current 
procedures, formats, or findings of completed audits. The 
committee seeks to create a mechanism to make Congress aware of 
major audit findings, while also seeking to minimize the 
administrative burden of the requirement. In particular, this 
section requires only the transmission of audits that have been 
completed, and does not extend to interim audit findings. Also, 
the committee expects that the lists of audits will focus on 
those audits which specifically evaluate the legitimacy of 
contractor cost claims and contract performance evaluations. 
The committee expects that this will consist of completed 
incurred-cost audits and audits of policies, procedures, and 
internal controls relative to accounting and management 
systems. Such a report should only include completed audits 
that document material findings of noncompliance with disclosed 
or established practices, cost accounting standards, or the 
Federal Acquisition Regulation, or material performance 
deficiencies.
    The committee notes that the threshold for reporting audit 
findings relating to contractor costs was established to ensure 
that issues of significance and material importance would be 
brought to the attention of Congress. The committee expects 
that agency heads will not modify or subdivide contracts or 
task orders in order to remain below the threshold of this 
provision, and expects that audit agencies will continue to 
review contracts according to the audit procedures established 
by the Comptroller General.

Section 203--Study of acquisition workforce

    This section would require the Administrator of the Office 
of Federal Procurement Policy to conduct a study of the 
composition, scope, and functions of the government-wide 
acquisition workforce and develop a comprehensive definition 
of, and method of measuring the size of, such workforce.
    This section would also require the Administrator for 
Federal Procurement Policy to submit a report on the results of 
the study, along with findings and recommendations, to the 
relevant congressional committees, no later than one year after 
the date of enactment of this Act.

Section 204--Repeal of sunset of training fund

    This section would make permanent the acquisition workforce 
training fund. Under current law, the fund expires on November 
24, 2008.

             TITLE III--PROMOTING INTEGRITY IN CONTRACTING


Section 301--Additional provisions relating to procurement officials

    This section would expand several provisions relating to 
current and former procurement officials. This section would 
extend the prohibition on procurement officials receiving 
compensation from certain contractors to include restrictions 
on receiving compensation as lawyers or lobbyists for the 
contractor. This section would also limit the ability of former 
procurement officials to accept compensation from divisions or 
affiliates of a contractor with unrelated business lines, 
subject to a determination by the official's ethics officer. 
Additionally, this section would expand notification and 
recusal requirements for procurement officials who make contact 
or are contacted about employment for a relative. This section 
would establish a new requirement that procurement officials 
who are previous employees of a contractor could not be 
personally and substantially involved in contract awards to 
that contractor for a period of one year. This new requirement 
could be waived if the official's involvement is necessary and 
does not damage public confidence in the integrity of the 
procurement process. Finally, this section would direct the 
Administrator of the Office of Federal Procurement Policy to 
promulgate regulations implementing these provisions and to 
ensure the monitoring and enforcement of these requirements.
    The committee recognizes the critical importance of 
attracting talented and skilled individuals to government 
service, particularly in the area of contracting and program 
management. The committee does not wish to unduly restrict 
employment options following government service. Rather, the 
committee believes that the changes in this provision will 
address certain obvious cases where conflicts of interest were 
not addressed by existing law. At the same time, the intent of 
the committee is to provide flexibility in the form of waiver 
authority given to an agency's designated ethics officer to 
allow that officer to evaluate whether the preponderance of 
evidence supports the participation of a current or former 
procurement official in a procurement process. The committee 
expects that the Administrator of the Office of Federal 
Procurement Policy will reflect the need for balance in the 
implementation of these provisions, in any guidance issued to 
agency ethics officials in the criteria to be considered for 
the waiver authorities granted in this section, and in the 
monitoring and enforcement of these provisions.

                           Committee Position

    On March 13, 2007, the Committee on Armed Services, a 
quorum being present, adopted H.R. 1362, as amended by a voice 
vote and then ordered H.R. 1362, as amended, reported with a 
favorable recommendation by a record vote of 53 ayes to 0 noes.

                  Congressional Budget Office Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the cost estimate prepared by 
the Congressional Budget Office and submitted pursuant to 
section 402 of the Congressional Budget Act of 1974 is as 
follows:

                                                    March 14, 2007.
Hon. Ike Skelton,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1362, the 
Accountability in Contacting Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Newman.
            Sincerely,
                                           Peter R. Orszag,
                                                          Director.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

    H.R. 1362 would amend federal contracting rules. 
Specifically the legislation would require federal agencies to 
limit the length of noncompetitive contracts. It also would 
require agencies to limit the use of sole-source contracts and 
maximize the use of fixed-price contracts, when possible. Those 
provisions could increase the costs to administer contracts, 
but also could result in the use of contractual arrangements 
that might lower costs to the government. CBO has no basis for 
estimating the net impact on the budget of those provisions. 
Such impacts would primarily affect discretionary spending, 
although small changes in mandatory spending could occur.
    The legislation also would require federal agencies to 
report to the Congress on overcharges by contractors and on the 
use of noncompetitive contracts. In addition, H.R. 1362 would 
require reviews and reports by the Government Accountability 
Office on the use of federal contracts. Based on the cost of 
similar activities, CBO estimates that those provisions would 
increase federal administrative costs by less than $10 million 
a year, assuming appropriation of the necessary amounts.
    H.R. 1362 would amend restrictions on where federal 
procurement officials can work after they leave the government. 
Enacting those changes could affect federal revenues as a 
result of new civil penalties for violations of those 
restrictions. Collections of civil penalties are recorded in 
the budget as revenues. CBO estimates, however, that any 
increase in revenues that would result from enacting the bill 
would not be significant.
    H.R. 1362 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.
    On March 12, 2007, CBO transmitted a cost estimate for H.R. 
1362, the Accountability in Contracting Act, as ordered 
reported by the Committee on Oversight and Government Reform on 
March 8, 2007. The two versions of the bill are generally 
similar. Unlike the Armed Services Committee's version, the 
earlier version would authorize additional appropriations for 
contract management, which CBO estimates would cost $20 billion 
over the next four years.
    The CBO staff contacts for this estimate are David Newman 
and Matthew Pickford. This estimate was approved by Robert A. 
Sunshine, Assistant Director for Budget Analysis.

                        Committee Cost Estimate

    Pursuant to clause 3(d) of rule XIII of the Rules of the 
House of Representatives, the committee generally concurs with 
the estimate as contained in the report of the Congressional 
Budget Office.

                           Oversight Findings

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the committee reports that the 
findings and recommendations of the committee, based on 
oversight activities pursuant to clause 2(b)(1) of rule X, are 
incorporated in the descriptive portions of this report.
    With respect to clause 3(c)(2) of rule XIII of the Rules of 
the House of Representatives, this legislation does not include 
any new spending or credit authority, nor does it provide for 
any increase or decrease in tax revenues or expenditures.
    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the bill does not authorize 
specific program funding.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the committee finds the authority for 
this legislation in Article I, section 8 of the United States 
Constitution.

                                Earmarks

    Pursuant to clause 9 of Rule XXI, H.R. 1362, the 
Accountability in Contracting Act, contains no congressional 
earmarks, limited tax benefits, or limited tariff benefits as 
defined in clause 9(d), 9(e), or 9(f) of rule XXI.

                     Statement of Federal Mandates

    Pursuant to section 423 of Public Law 104-4, this 
legislation contains no federal mandates with respect to state, 
local, and tribal governments, nor with respect to the private 
sector. Similarly, the bill provides no unfunded federal 
intergovernmental mandates.

                              Record Vote

    In accordance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, a record vote was taken with 
respect to the committee's consideration of H.R. 1362. The 
record vote is attached to this report.
    The committee ordered H.R. 1362, as amended, reported to 
the House with a favorable recommendation by a record vote of 
53-0, a quorum being present.


         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):

        FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949


TITLE III--PROCUREMENT PROCEDURE

           *       *       *       *       *       *       *


SEC. 303. COMPETITION REQUIREMENTS.

  (a) * * *

           *       *       *       *       *       *       *

  (f)(1) * * *

           *       *       *       *       *       *       *

  [(4) The justification required by paragraph (1)(A) and any 
related information shall be made available for inspection by 
the public consistent with the provisions of section 552 of 
title 5, United States Code.]
  [(5)] (4) In no case may an executive agency--
          (A) * * *

        

           *       *       *       *       *       *       *
  (j)(1)(A) Except as provided in subparagraph (B), in the case 
of a procurement permitted by subsection (c), the head of an 
executive agency shall make publicly available, within 14 days 
after the award of the contract, the documents containing the 
justification and approval required by subsection (f)(1) with 
respect to the procurement.
  (B) In the case of a procurement permitted by subsection 
(c)(2), subparagraph (A) shall be applied by substituting ``30 
days'' for ``14 days''.
  (2) The documents shall be made available on the website of 
the agency and through the Federal Procurement Data System.
  (3) This subsection does not require the public availability 
of information that is exempt from public disclosure under 
section 552(b) of title 5, United States Code.

           *       *       *       *       *       *       *

                              ----------                              


TITLE 10, UNITED STATES CODE

           *       *       *       *       *       *       *


Subtitle A--General Military Law

           *       *       *       *       *       *       *


PART IV--SERVICE, SUPPLY, AND PROCUREMENT

           *       *       *       *       *       *       *


CHAPTER 137--PROCUREMENT GENERALLY

           *       *       *       *       *       *       *


Sec. 2304. CONTRACTS: COMPETITION REQUIREMENTS

  (a) * * *

           *       *       *       *       *       *       *

  (f)(1) * * *

           *       *       *       *       *       *       *

  [(4) The justification required by paragraph (1)(A) and any 
related information, and any document prepared pursuant to 
paragraph (2)(E), shall be made available for inspection by the 
public consistent with the provisions of section 552 of title 
5.]
  [(5)] (4) In no case may the head of an agency--
          (A) * * *

           *       *       *       *       *       *       *

  [(6)] (5)(A) The authority of the head of a procuring 
activity under paragraph (1)(B)(ii) may be delegated only to an 
officer or employee who--
          (i) * * *

           *       *       *       *       *       *       *

  (l)(1)(A) Except as provided in subparagraph (B), in the case 
of a procurement permitted by subsection (c), the head of an 
agency shall make publicly available, within 14 days after the 
award of the contract, the documents containing the 
justification and approval required by subsection (f)(1) with 
respect to the procurement.
  (B) In the case of a procurement permitted by subsection 
(c)(2), subparagraph (A) shall be applied by substituting ``30 
days'' for ``14 days''.
  (2) The documents shall be made available on the website of 
the agency and through the Federal Procurement Data System.
  (3) This subsection does not require the public availability 
of information that is exempt from public disclosure under 
section 552(b) of title 5.

           *       *       *       *       *       *       *

                              ----------                              


OFFICE OF FEDERAL PROCUREMENT POLICY ACT

           *       *       *       *       *       *       *


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

  (a) * * *

           *       *       *       *       *       *       *

  (c) Actions Required of Procurement Officers When Contacted 
by Offerors Regarding Non-Federal Employment.--(1) If an agency 
official who is participating personally and substantially in a 
Federal agency procurement for a contract in excess of the 
simplified acquisition threshold contacts or is contacted by a 
person who is a bidder or offeror in that Federal agency 
procurement regarding possible non-Federal employment for that 
official or for a relative of that official (as defined in 
section 3110 of title 5, United States Code), the official 
shall--
                  (A) * * *

           *       *       *       *       *       *       *

  (d) Prohibition on Former Official's Acceptance of 
Compensation From Contractor.--(1) A former official of a 
Federal agency may not accept compensation from a contractor as 
an employee, officer, director, [or consultant] consultant, 
lawyer, or lobbyist of the contractor within a period of one 
year after such former official--
                  (A) * * *

           *       *       *       *       *       *       *

  [(2) Nothing in paragraph (1) may be construed to prohibit a 
former official of a Federal agency from accepting compensation 
from any division or affiliate of a contractor that does not 
produce the same or similar products or services as the entity 
of the contractor that is responsible for the contract referred 
to in subparagraph (A), (B), or (C) of such paragraph.]
  (2) Paragraph (1) shall not prohibit a former official of a 
Federal agency from accepting compensation from any division or 
affiliate of a contractor that does not produce the same or 
similar products or services as the entity of the contractor 
that is responsible for the contract referred to in 
subparagraph (A), (B), or (C) of such paragraph if the agency's 
designated ethics officer determines that the former official's 
acceptance of compensation would not damage public confidence 
in the integrity of the procurement process.

           *       *       *       *       *       *       *

  (i) Prohibition on Involvement by Certain Former Contractor 
Employees in Procurements.--An employee of the Federal 
Government who is a former employee of a contractor with the 
Federal Government shall not be personally and substantially 
involved with any award of a contract to the employee's former 
employer for the one-year period beginning on the date on which 
the employee leaves the employment of the contractor unless the 
employee has received a waiver from the agency's designated 
ethics officer. In determining whether to issue a waiver, the 
designated ethics officer shall take into account the agency's 
need for the involvement of the employee and the impact a 
waiver would have on public confidence in the integrity of the 
procurement process.
  (j) Regulations.--The Administrator, in consultation with the 
Director of the Office of Government Ethics, shall--
          (1) promulgate regulations to carry out and ensure 
        the enforcement of this section; and
          (2) monitor and investigate individual and agency 
        compliance with this section.

           *       *       *       *       *       *       *


SEC. 37. ACQUISITION WORKFORCE.

  (a) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (3) Acquisition workforce training fund.--(A) * * *

           *       *       *       *       *       *       *

  [(H) This paragraph shall cease to be effective five years 
after the date of the enactment of the National Defense 
Authorization Act for Fiscal Year 2004.]

           *       *       *       *       *       *       *


                                  
