[House Report 115-341]
[From the U.S. Government Publishing Office]



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115th Congress      }                              {          Report
                        HOUSE OF REPRESENTATIVES
 1st Session        }                              {          115-341
======================================================================



 
                  BONUSES FOR COST-CUTTERS ACT OF 2017

                                _______
                                

October 10, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 378]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 378) to amend title 5, United 
States Code, to enhance the authority under which Federal 
agencies may pay cash awards to employees for making cost 
saving disclosures, 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....................................     3
Section-by-Section...............................................     4
Explanation of Amendments........................................     5
Committee Consideration..........................................     6
Roll Call Votes..................................................     6
Application of Law to the Legislative Branch.....................     6
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     6
Statement of General Performance Goals and Objectives............     6
Duplication of Federal Programs..................................     6
Disclosure of Directed Rule Makings..............................     6
Federal Advisory Committee Act...................................     6
Unfunded Mandates Statement......................................     7
Earmark Identification...........................................     7
Committee Estimate...............................................     7
Budget Authority and Congressional Budget Office Cost Estimate...     7
Changes in Existing Law Made by the Bill, as Reported............     8

    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 ``Bonuses for Cost-Cutters Act of 
2017''.

SEC. 2. COST SAVINGS ENHANCEMENTS.

  (a) Definitions.--Section 4511 of title 5, United States Code, is 
amended--
          (1) in the section heading, by striking ``Definition'' and 
        inserting ``Definitions''; and
          (2) in subsection (a)--
                  (A) by striking the period at the end and inserting 
                ``; and'';
                  (B) by striking ``this subchapter, the term'' and 
                inserting the following: ``this subchapter--
          ``(1) the term''; and
                  (C) by adding at the end the following:
          ``(2) the term `wasteful expenses' means amounts made 
        available for salaries and expenses accounts, operations and 
        maintenance accounts, or other equivalent accounts--
                  ``(A) that are identified by an employee of the 
                agency under section 4512(a) as wasteful; and
                  ``(B) that the Chief Financial Officer of the agency 
                determines are not required for the purpose for which 
                the amounts were made available.''.
  (b) Authority.--Section 4512 of title 5, United States Code, is 
amended--
          (1) in subsection (a)--
                  (A) by inserting ``The head of an agency may pay a 
                cash award to any employee of such agency whose 
                identification of wasteful expenses to the Chief 
                Financial Officer of the agency has resulted in cost 
                savings for the agency.'' after the first sentence;
                  (B) in paragraph (1) by striking ``$10,000'' and 
                inserting ``$20,000'';
                  (C) in paragraph (2)--
                          (i) by inserting ``Chief Financial Officer,'' 
                        after ``Inspector General,'' ;
                          (ii) by striking ``employee designated under 
                        subsection (b)'' and inserting ``designated 
                        employee''; and
                          (iii) by inserting ``or identification'' 
                        after ``disclosure''; and
                  (D) in the matter following paragraph (2)--
                          (i) by inserting ``, Chief Financial 
                        Officer,'' after ``Inspector General''; and
                          (ii) by inserting ``or identification'' after 
                        ``disclosure'';
          (2) in subsection (b) by striking ``awards permitted under 
        this section'' and inserting ``awards for the disclosure of 
        fraud, waste, or mismanagement under this section''; and
          (3) by adding at the end the following:
  ``(c)(1) If the Chief Financial Officer of the agency determines that 
potential wasteful expenses identified by an employee meet the 
requirements of section 4511(a)(2)(B), the head of the agency shall 
notify the President for purposes of proposing the expenses for 
rescission under title X of the Congressional Budget and Impoundment 
Control Act of 1974 (2 U.S.C. 681 et seq.).
  ``(2) In the case of an agency for which there is no Chief Financial 
Officer, the head of the agency shall designate an agency employee who 
shall have the authority to make the determinations for identification 
of wasteful expenses under this section.
  ``(d) The head of each agency shall make available, along with, and 
in the same manner and form as, the provision of information required 
under section 1116 of title 31, information on disclosures of wasteful 
expenses under this section, including--
          ``(1) a description of each disclosure of possible wasteful 
        expenses identified by an employee and determined by the agency 
        to have merit; and
          ``(2) the number and amount of cash awards provided by the 
        agency under subsection (a).
  ``(e) An individual may not receive a cash award under this 
subchapter if the individual is--
          ``(1) an officer or employee of the Office of the Inspector 
        General of an agency; or
          ``(2) ineligible for a cash award under section 4509.
  ``(f) The Director of the Office of Personnel Management shall--
          ``(1) ensure that the cash award program of each agency 
        complies with this section; and
          ``(2) submit to Congress an annual certification indicating 
        whether the cash award program of each agency complies with 
        this section.
  ``(g) Not later than 3 years after the date of enactment of the 
Bonuses for Cost-Cutters Act of 2017, and every 3 years thereafter for 
6 years, the Comptroller General of the United States shall submit to 
Congress a report on the operation of the cost savings and awards 
program under this section, including any recommendations for 
legislative changes.''.
  (c) Technical and Conforming Amendment.--The table of sections for 
subchapter II of chapter 45 of title 5, United States Code, is amended 
by striking the item relating to section 4511 and inserting the 
following:

``4511. Definitions and general provisions.''.

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 378, the Bonuses for Cost-Cutters Act of 2017, permits 
federal agencies to award employees up to $20,000 for the 
disclosure of wasteful expenses that result in cost savings. If 
the agency's Chief Financial Officer determines the expenses 
are wasteful, the head of the agency must report the spending 
to the President, who may in turn request that Congress rescind 
the funds. Agencies must include a description of each 
disclosure determined to have merit as well as any awards 
distributed in the agency's annual, publicly available 
performance reporting. The bill prohibits distribution of 
awards to executive schedule officers and officers or employees 
of Inspectors General.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 378 addresses wasteful spending by providing a 
financial incentive for federal employees to report instances 
of potentially unnecessary spending in salaries and expense 
accounts and maintenance and operations accounts. H.R. 378 
includes safeguards to ensure agency operations are not 
compromised when they consider eliminating these funds 
identified as unnecessary. An agency's chief financial officer 
must determine that such funds are not required for the purpose 
for which the amounts were made available.

                          LEGISLATIVE HISTORY

    On January 9, 2017, Representative Charles Fleischmann (R-
TN) introduced H.R. 378, the Bonuses for Cost-Cutters Act of 
2017, with Representative Jim Cooper (D-TN). H.R. 378 was 
referred to the House Committee on Oversight and Government 
Reform. The Committee considered H.R. 378 at a business meeting 
on July 19, 2017, and ordered the bill reported favorably, as 
amended, by voice vote.
    In the 114th Congress, Representative Fleischmann 
introduced a similar bill to H.R. 378, which was H.R. 2532, the 
Employees of America Streamlining for Your Savings Act of 2015, 
or the EASY Savings Act of 2015. Representative Fleischmann 
introduced H.R. 2532 on May 21, 2015, with Representative Jim 
Cooper. H.R. 2532 was referred to the House Committee on 
Oversight and Government Reform. The Committee considered H.R. 
2532 at a business meeting on September 15, 2016 and ordered 
the bill reported favorably, as amended, by voice vote.
    On May 19, 2015, Senator Rand Paul (R-KY) introduced S. 
1378, the Bonuses for Cost-Cutters Act of 2015 and Senate 
companion to H.R. 2532, with Senators Mark Warner (D-VA), 
Michael Enzi (R-WY), Cory Gardner (R-CO), and Pat Toomey (R-
PA). S. 1378 was referred to the Senate Committee on Homeland 
Security and Governmental Affairs. The Committee considered S. 
1378 at a markup on May 25, 2016, and ordered that bill 
reported favorably, as amended, by a roll call vote of nine in 
favor and five against.
    In the 113th Congress--on May 9, 2013--Representative 
Fleischmann introduced a similar bill, H.R. 1931, the Employees 
of America Streamlining for Your Savings Act of 2013, or the 
EASY Savings Act of 2013, with Representatives Dan Benishek (R-
MI), Marsha Blackburn (R-TN), Susan Brooks (R-IN), Rodney Davis 
(R-IL), Walter Jones (R-NC), and Delegate Eleanor Holmes Norton 
(D-DC). H.R. 1931 was referred to the House Committee on 
Oversight and Government Reform.
    On March 21, 2013, Senator Paul introduced S. 643, the 
Bonuses for Cost-Cutters Act of 2013 and Senate companion to 
H.R. 1931, with Senators Mark Begich (D-AK) and Saxby Chambliss 
(R-GA). S. 643 was referred to the Senate Committee on Homeland 
Security and Governmental Affairs.
    In the 112th Congress--March 21, 2012--Representative 
Fleischmann introduced a similar bill, H.R. 4237, the Employees 
of America Streamlining Your Savings Act of 2012, or EASY 
Savings Act of 2012. H.R. 4237 was referred to the House 
Committee on Oversight and Government Reform.
    On February 9, 2012, Senator Paul introduced S. 2085, the 
Cost Savings Enhancements Act of 2012 and Senate companion to 
H.R. 4237, with Senators Ron Johnson (R-WI) and Mike Lee (R-
UT). S. 2085 was referred to the Senate Committee on Homeland 
Security and Governmental Affairs.

                           Section-by-Section


Section 1. Short title

    The short title is the ``Bonuses for Cost-Cutters Act of 
2017.''

Section 2. Cost savings enhancements

    Subsection (a) of section 2 amends section 4511 of title 5, 
United States Code, by adding a definition of ``wasteful 
expenses,'' meaning amounts made available for salaries and 
expense accounts, operations and maintenance accounts, or 
similar accounts that are identified by an employee of the 
agency as wasteful and that the chief financial officer (CFO) 
of the agency determines are not required for the purpose for 
which the amounts were made available.
    Subsection (b) of section 2 amends section 4512 of title 5, 
United States Code. Paragraph (1) of subsection (b) inserts 
language allowing the head of an agency to pay a cash award to 
any employee that identifies wasteful expenses to the agency 
CFO resulting in cost savings. Subsection (b) increases the 
amount payable to such an employee from $10,000 to $20,000.
    Paragraph (1) of subsection (b) also amends section 4512 of 
title 5, United States Code, by allowing the agency's CFO, in 
addition to the agency's inspector general, to take into 
account agency cost savings projected for subsequent fiscal 
years attributable to an employee's identification of wasteful 
expenses.
    Paragraph (2) of subsection (b) amends section 4512(b) of 
title 5, United States Code, which states that in the case of 
an agency for which there is no Inspector General, the head of 
the agency shall designate an agency employee that shall have 
the authority to make the determinations and grant the awards 
permitted under section 4512. Paragraph (2) amends section 
4512(b) to clarify that the authority pertains to the awards 
for the disclosure of fraud, waste, or mismanagement under that 
subsection.
    Paragraph (3) of subsection (b) adds several new provisions 
to the end of section 4512 of title 5, United States Code. The 
first creates a subsection (c)(1), which requires the CFO of an 
agency to notify the President of the wasteful expenses 
identified by an employee. The President may then notify 
Congress for potential rescission of the funds through the 
procedure described in the Congressional Budget and Impoundment 
Control Act of 1974--codified in section 681 et seq. of title 
2, United States Code.
    A new subsection (c)(2) of section 4512 of title 5, United 
States Code, establishes that for agencies without a CFO, the 
head of the agency shall designate an employee to have 
authority in determining that wasteful expenses identified by 
employees are, in fact, wasteful.
    A new subsection (d) of section 4512 of title 5, United 
States Code, creates a reporting requirement whereby the head 
of each agency will describe disclosures of possible wasteful 
expenses determined by the agency to have merit, as well as the 
number and amount of subsequent cash awards.
    A new subsection (e) of section 4512 of title 5, United 
States Code, prohibits giving cash awards to an officer or 
employee of the office of the agency's Inspector General or any 
other individual ineligible for cash award under section 4509 
of title 5, United States Code.
    A new subsection (f) of section 4512 of title 5, United 
States Code, requires the Director of the Office of Personnel 
Management to oversee the cash award program and submit to 
Congress an annual certification on whether the cash award 
program of each agency complies with the bill's requirements.
    Finally, a new subsection (g) of section 4512 of title 5, 
United States Code, instructs GAO to submit a report to 
Congress on the operation of the cost savings and awards 
programs established under the bill and any recommendations for 
legislative changes.
    Subsection (c) of section 2 updates the table of sections.

                       Explanation of Amendments

    During Committee consideration of the bill, Representative 
John Duncan (R-TN) offered an amendment in the nature of a 
substitute to change the manner in which potentially wasteful 
expenses are evaluated for possible rescission. The original 
process allowed the agency's Chief Financial Officer to certify 
that spending was wasteful, thereby triggering rescission of 
funds. Under this amendment, potentially wasteful funds must be 
certified by the Chief Financial Officer of the agency as 
wasteful and reported to the President. The President may then 
report the funds in question to Congress, which in turn can 
consider whether rescission of funds would be appropriate. The 
Committee agreed to the amendment by voice vote.

                        Committee Consideration

    On July 19, 2017, the Committee met in open session and, 
with a quorum being present, ordered the bill favorably 
reported, as amended, by voice vote.

                            Roll Call Votes

    There were no roll call votes requested or conducted during 
Committee consideration of H.R. 378.

              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 enhances the authority under which Federal agencies 
may pay cash awards to employees for making cost saving 
disclosures. 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 
goal or objective of this bill is to enhance the authority 
under which Federal agencies may pay cash awards to employees 
for making cost saving disclosures.

                    Duplication of Federal Programs

    In accordance with clause 2(c)(5) of rule XIII no provision 
of this bill establishes or reauthorizes a program of the 
Federal Government known to be duplicative of another Federal 
program, a program that was included in any report from the 
Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting this bill does not 
direct the completion of any specific rule makings within the 
meaning of section 551 of title 5, United States Code.

                     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 Section 5(b) of the appendix to title 5, 
United States Code.

                      Unfunded Mandates Statement

    Pursuant to section 423 of the Congressional Budget and 
Impoundment Control Act (Pub. L. 113-67) the Committee has 
included a letter received from the Congressional Budget Office 
below.

                         Earmark Identification

    This bill does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                           Committee Estimate

    Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of 
the House of Representatives, the Committee includes below a 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.

   New Budget Authority and Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII 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:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 18, 2017.
Hon. Trey Gowdy,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 378, the Bonuses 
for Cost-Cutters Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 378--Bonuses for Cost-Cutters Act of 2017

    H.R. 378 would amend federal law to allow federal agencies 
to pay cash awards to employees who report wasteful spending. 
The bill also would increase the maximum amount payable from 
$10,000 to $20,000. Under current law, only Inspectors General 
(IG) can pay bonuses to federal employees who identify waste, 
fraud, or mismanagement of funds. Agencies would publicly 
report on the funds and the Government Accountability Office 
would report on cost savings and the award program every three 
years.
    Under current law and policy the government has many tools 
to combat unnecessary spending. In 2016 the government spent 
$2.7 billion for the activities of 73 IGs and their 13,000 
employees to detect and deter fraud, waste, and mismanagement 
of government funds. Because of the large scale of these 
ongoing activities, CBO estimates that there would be no 
significant cost to produce additional reports concerning fraud 
or for increasing the amount of the awards payable to 
employees. We also estimate that there would be no significant 
reduction in federal spending because of increased 
identification of wasteful or fraudulent spending as a result 
of enacting the bill.
    Because salaries and expenses for some agencies are 
mandatory appropriations, enacting the bill could have an 
insignificant effect on direct spending; therefore, pay-as-you-
go procedures apply. Enacting H.R. 378 would not affect 
revenues.
    CBO estimates that enacting H.R. 378 would not increase 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 378 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by H. Samuel Papenfuss, 
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, and existing law in which no 
change is proposed is shown in roman):

TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *



PART III--EMPLOYEES

           *       *       *       *       *       *       *


SUBPART C--EMPLOYEE PERFORMANCE

           *       *       *       *       *       *       *


                      CHAPTER 45--INCENTIVE AWARDS


            SUBCHAPTER I--AWARDS FOR SUPERIOR ACCOMPLISHMENTS

Sec.
4501. Definitions.
     * * * * * * *

           SUBCHAPTER II--AWARDS FOR COST SAVINGS DISCLOSURES

[4511. Definition and general provisions.]
4511. Definitions and general provisions.

           *       *       *       *       *       *       *


           SUBCHAPTER II--AWARDS FOR COST SAVINGS DISCLOSURES


Sec. 4511. [Definition]  Definitions and general provisions

  (a) For purposes of [this subchapter, the term] this 
subchapter--
          (1) the term  ``agency'' means any Executive 
        agency[.]; and
          (2) the term ``wasteful expenses'' means amounts made 
        available for salaries and expenses accounts, 
        operations and maintenance accounts, or other 
        equivalent accounts--
                  (A) that are identified by an employee of the 
                agency under section 4512(a) as wasteful; and
                  (B) that the Chief Financial Officer of the 
                agency determines are not required for the 
                purpose for which the amounts were made 
                available.
  (b) A cash award under this subchapter is in addition to the 
regular pay of the recipient. Acceptance of a cash award under 
this subchapter constitutes an agreement that the use by the 
Government of an idea, method, or device for which the award is 
made does not form the basis of a further claim of any nature 
against the Government by the employee, his heirs, or assigns.

Sec. 4512. Agency awards for cost savings disclosures

  (a) The Inspector General of an agency, or any other agency 
employee designated under subsection (b), may pay a cash award 
to any employee of such agency whose disclosure of fraud, 
waste, or mismanagement to the Inspector General of the agency, 
or to such other designated agency employee, has resulted in 
cost savings for the agency. The head of an agency may pay a 
cash award to any employee of such agency whose identification 
of wasteful expenses to the Chief Financial Officer of the 
agency has resulted in cost savings for the agency. The amount 
of an award under this section may not exceed the lesser of--
          (1) [$10,000] $20,000; or
          (2) an amount equal to 1 percent of the agency's cost 
        savings which the Inspector General, Chief Financial 
        Officer, or other [employee designated under subsection 
        (b)] designated employee, determines to be the total 
        savings attributable to the employee's disclosure or 
        identification.
For purposes of paragraph (2), the Inspector General, Chief 
Financial Officer, or other designated employee may take into 
account agency cost savings projected for subsequent fiscal 
years which will be attributable to such disclosure or 
identification.
  (b) In the case of an agency for which there is no Inspector 
General, the head of the agency shall designate an agency 
employee who shall have the authority to make the 
determinations and grant the [awards permitted under this 
section] awards for the disclosure of fraud, waste, or 
mismanagement under this section.
  (c)(1) If the Chief Financial Officer of the agency 
determines that potential wasteful expenses identified by an 
employee meet the requirements of section 4511(a)(2)(B), the 
head of the agency shall notify the President for purposes of 
proposing the expenses for rescission under title X of the 
Congressional Budget and Impoundment Control Act of 1974 (2 
U.S.C. 681 et seq.).
  (2) In the case of an agency for which there is no Chief 
Financial Officer, the head of the agency shall designate an 
agency employee who shall have the authority to make the 
determinations for identification of wasteful expenses under 
this section.
  (d) The head of each agency shall make available, along with, 
and in the same manner and form as, the provision of 
information required under section 1116 of title 31, 
information on disclosures of wasteful expenses under this 
section, including--
          (1) a description of each disclosure of possible 
        wasteful expenses identified by an employee and 
        determined by the agency to have merit; and
          (2) the number and amount of cash awards provided by 
        the agency under subsection (a).
  (e) An individual may not receive a cash award under this 
subchapter if the individual is--
          (1) an officer or employee of the Office of the 
        Inspector General of an agency; or
          (2) ineligible for a cash award under section 4509.
  (f) The Director of the Office of Personnel Management 
shall--
          (1) ensure that the cash award program of each agency 
        complies with this section; and
          (2) submit to Congress an annual certification 
        indicating whether the cash award program of each 
        agency complies with this section.
  (g) Not later than 3 years after the date of enactment of the 
Bonuses for Cost-Cutters Act of 2017, and every 3 years 
thereafter for 6 years, the Comptroller General of the United 
States shall submit to Congress a report on the operation of 
the cost savings and awards program under this section, 
including any recommendations for legislative changes.

           *       *       *       *       *       *       *


                                  [all]