[House Report 111-588]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-588

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



 
                     OVERSEAS CONTRACTOR REFORM ACT

                                _______
                                

 September 14, 2010.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Towns, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 5366]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 5366) to require the proposal for 
debarment from contracting with the Federal Government of 
persons violating the Foreign Corrupt Practices Act of 1977, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Legislative History..............................................     2
Section-by-Section...............................................     2
Explanation of Amendments........................................     3
Committee Consideration..........................................     3
Rollcall Votes...................................................     3
Application of Law to the Legislative Branch.....................     3
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     3
Statement of General Performance Goals and Objectives............     3
Constitutional Authority Statement...............................     3
Federal Advisory Committee Act...................................     4
Unfunded Mandate Statement.......................................     4
Earmark Identification...........................................     4
Committee Estimate...............................................     4
Budget Authority and Congressional Budget Office Cost Estimate...     4
Changes in Existing Law Made by the Bill, as Reported............     5

                          PURPOSE AND SUMMARY

    H.R. 5366, the ``Overseas Contractor Reform Act,'' was 
introduced by Rep. Peter Welch on May 20, 2010. The legislation 
would require any person convicted of violating the Foreign 
Corrupt Practices Act of 1977 (FCPA) to be proposed for 
debarment from any further contracts or grants with the federal 
government. Furthermore, the legislation makes it federal 
policy that no contracts or grants should be awarded to any 
individuals or companies who violate the FCPA.
    H.R. 5366 requires that any person (defined as any 
individual, partnership, or corporation), found to be in 
violation of the FCPA be proposed for debarment from any 
federal contracts or grants within 30 days after final judgment 
of the violation. The legislation defines ``final judgment'' as 
occurring when all appeals of the judgment have been determined 
or all the time for filing such appeals has expired. The 
legislation also authorizes the head of a federal agency to 
issue a waiver, but the agency head must justify the decision 
and report the waiver and accompanying justification to 
Congress within 30 days.

                  BACKGROUND AND NEED FOR LEGISLATION

    Federal government contractors have used bribes in the past 
to influence the actions of foreign governments. The source of 
these bribes in part is American tax dollars paid by the 
federal government to contractors. This bill seeks to root out 
companies which tarnish the image of the United States of 
America by engaging in illegal activities.

                          LEGISLATIVE HISTORY

    H.R. 5366, the ``Overseas Contractor Reform Act,'' was 
introduced by Rep. Peter Welch on May 20, 2010, and referred to 
the House Committee on Oversight and Government Reform. The 
Committee met in open session and ordered H.R. 5366 to be 
reported favorably to the House by a voice vote.

                           SECTION-BY-SECTION

Section 1: Short title

    The short title of the bill is the Overseas Contractor 
Reform Act.

Section 2: Requirement to propose for debarment persons violating the 
        Foreign Corrupt Practices Act

    This section would require any person found to be in 
violation of the Foreign Corrupt Practices Act of 1977 (FCPA) 
to be proposed for debarment, unless the requirement was waived 
by the head of the federal agency concerned.
    The proposed debarment would be from any contract or grant 
awarded by the federal government within 30 days after a final 
judgment finding violation of the FCPA. This section also 
defines all applicable waivers for this bill. The head of a 
federal agency may waive the proposal for debarment requirement 
for a federal contract or grant, however, any waiver shall be 
reported to Congress by the head of the agency concerned within 
30 days from the date of the waiver, along with an accompanying 
justification for the waiver.
    This section defines the term ``final judgment'' as when 
all appeals of the judgment have been finally determined, or 
all time for filing such appeals has expired.
    This section defines a ``contract'' as a binding agreement 
entered into by a federal agency for the purpose of obtaining 
property or services.
    This section defines ``person'' as any: individual; 
partnership; and corporation.
    This section also defines the FCPA to include: section 30A 
of the Securities Exchange Act of 1934 (15 U.S.C. 78dd-1); and 
sections 104 and 104A of the FCPA (15 U.S.C. 78dd-2).

Section 3: Government policy

    This section makes it the policy of the United States 
government that no government contracts or grants should be 
awarded to individuals or companies who violate the Foreign 
Corrupt Practices Act of 1977.

                       EXPLANATION OF AMENDMENTS

    Not applicable; no amendments.

                        COMMITTEE CONSIDERATION

    The Committee on Oversight and Government Reform held a 
markup of the bill on July 28, 2010. The Committee ordered the 
bill to be reported favorably by a voice vote.

                             ROLLCALL VOTES

    No roll call votes were taken.

              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 terms and conditions of 
employment or access to public services and accommodations. 
This legislation does not apply to the legislative branch.

  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 including the need to prevent individuals who 
violate the FCPA from receiving federal contracts.

         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, including the legislation's requirement for a 
proposal for debarment from contracting with the federal 
government of any person found in violation of the Foreign 
Corrupt Practices Act of 1977 to reduce waste, fraud, and abuse 
in the federal procurement system.

                   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. 5366. 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 meaning 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 on 
whether the provisions of the report include unfunded mandates. 
In compliance with this requirement the Committee has received 
a letter from the Congressional Budget Office included herein.

                         EARMARK IDENTIFICATION

    H.R. 5366 does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(e), 9(f), or 9(g) of rule XXI.

                           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. 5366. 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. 5366 from the Director of 
the Congressional Budget Office:

                                                   August 10, 2010.
Hon. Edolphus Towns,
Chairman, Committee on Oversight and Government Reform,
U.S. House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5366, the Overseas 
Contractor Reform 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 W. Elmendorf.
    Enclosure.

H.R. 5366--Overseas Contractor Reform Act

    H.R. 5366 would amend federal law to require that any 
individual, partnership, or corporation found to be in 
violation of the Foreign Corrupt Practices Act of 1977 (FCPA) 
be suspended from receiving any federal contract or grant. That 
action would be required within 30 days after the final 
judgment of such a violation. Agencies could waive this 
provision for particular federal contracts or grants and would 
have to report such waivers to the Congress within 30 days. In 
addition, the legislation declares it to be the policy of the 
U.S. government that no contract or grant should be awarded to 
individuals or companies that violate the FCPA.
    CBO expects that this bill would apply only to a small 
number of individuals and entities subject to FCPA enforcement 
actions that are settled through judicial proceedings. 
Consequently, we estimate that implementing the legislation 
would have no significant impact on the federal budget. 
Enacting the bill would not affect direct spending or revenues; 
therefore, pay-as-you-go procedures do not apply.
    H.R. 5366 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. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    There are no changes to existing law in this bill.

                                  
