[Senate Report 116-320]
[From the U.S. Government Publishing Office]


                                                 Calendar No. 623

116th Congress}                                           { Report
                                 SENATE
  2d Session  }                                           { 116-320

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

                      TO REPEAL SECTION 692 OF THE

          POST-KATRINA EMERGENCY MANAGEMENT REFORM ACT OF 2020

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 4165


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


               December 14, 2020.--Ordered to be printed
               
                                __________
               
               
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
                           WASHINGTON : 2020                     
          
-----------------------------------------------------------------------------------                
               
               
               
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
ROB PORTMAN, Ohio                    GARY C. PETERS, Michigan
RAND PAUL, Kentucky                  THOMAS R. CARPER, Delaware
JAMES LANKFORD, Oklahoma             MAGGIE HASSAN, New Hampshire
MITT ROMNEY, Utah                    KAMALA D. HARRIS, California
RICK SCOTT, Florida                  KYRSTEN SINEMA, Arizona
MICHAEL B. ENZI, Wyoming             JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri

                Gabrielle D'Adamo Singer, Staff Director
                   Joseph C. Folio III, Chief Counsel
             Barrett F. Percival, Professional Staff Member
               David M. Weinberg, Minority Staff Director
               Zachary I. Schram, Minority Chief Counsel
              Michelle M. Benecke, Minority Senior Counsel
                     Laura W. Kilbride, Chief Clerk
                     
                     
                                                 Calendar No. 623

116th Congress}                                           { Report
                                 SENATE
  2d Session  }                                           { 116-320

======================================================================                      
 
 TO REPEAL SECTION 692 OF THE POST-KATRINA EMERGENCY MANAGEMENT REFORM 
                              ACT OF 2006

                                _______
                                

               December 14, 2020.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 4165]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 4165) to repeal 
section 692 of the Post-Katrina Emergency Management Reform Act 
of 2006, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill, as amended, do 
pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and the Need for Legislation..........................1
III. Legislative History..............................................3
 IV. Section-by-Section Analysis......................................4
  V. Evaluation of Regulatory Impact..................................4
 VI. Congressional Budget Office Cost Estimate........................4
VII. Changes in Existing Law Made by the Bill, as Reported............4

                         I. Purpose and Summary

    S. 4165, a bill to repeal section 692 of the Post-Katrina 
Emergency Management Reform Act of 2006, repeals a unique 
Department of Homeland Security (DHS) contracting requirement 
that conflicts with subsequent legislation and Government-wide 
procurement regulations that place limits on excessive 
subcontracting.

              II. Background and the Need for Legislation

    Following Hurricane Katrina in 2005, Congress enacted the 
Post-Katrina Emergency Management Reform Act (PKEMRA) of 2006 
to address various shortcomings identified in preparation for 
and response to Hurricane Katrina.\1\ One of those reforms 
required DHS to limit tiered subcontracting. Section 692 of 
PKEMRA prohibits ``the use of subcontracts for more than 65 
percent of the cost of cost-reimbursement type contracts.''\2\
---------------------------------------------------------------------------
    \1\Post-Katrina Emergency Management Reform Act of 2006, Pub. L. 
No. 109-295, Sec. 691, 120 Stat. 1355, 1457 (2006) (codified at 6 
U.S.C. Sec. 791).
    \2\U.S. Gov't Accountability Office, GAO-15-783, Disaster 
Contracting: FEMA Needs to Cohesively Manage Its Workforce and Fully 
Address Post-Katrina Reforms 39 (2015), https://www.gao.gov/assets/680/
672771.pdf.
---------------------------------------------------------------------------
    After Hurricane Katrina, Congress moved to reform the 
Federal Emergency Management Agency's (FEMA) disaster 
contracting processes and practices. Two of those reforms 
stressed the importance of advance contracts that are entered 
into before a disaster occurs to reduce the need for FEMA to 
enter into non-competitive contracts, and to limit excessive 
use of subcontractors. Although FEMA outlined an advance 
contracting strategy in its report to Congress in 2007, they 
did not issue a final rule to address section 692 of PKEMRA.\3\
---------------------------------------------------------------------------
    \3\U.S. Dep't of Homeland Sec., Fed. Emergency Mgmt. Agency, 
Advance Contracting of Goods and Services Report to Congress (2007).
---------------------------------------------------------------------------
    In 2010, DHS published a proposed rule prohibiting the use 
of excessive contracting, but did not immediately act to 
implement the final rule due to challenges identified by the 
small business community. The Government Accountability Office 
stated in a September 2015 report that, ``DHS policy officials 
said they have delayed implementing this rule because of 
comments they received that indicate the limitation would have 
a negative impact on small businesses. Officials explained that 
FEMA uses type-contracts primarily for construction services 
that often bring an array of specialists together on one job, 
creating the need for subcontracting.''\4\
---------------------------------------------------------------------------
    \4\U.S. Gov't Accountability Office, supra note 2, at 39.
---------------------------------------------------------------------------
    To satisfy the requirements in PKEMRA, FEMA created an 
advance contracting strategy, which was outlined in its report 
to Congress in 2007.\5\ According to their strategy, FEMA 
stated that the agency ``[w]ill maximize the use of advance 
contracts to the extent they are practical and cost-effective, 
which will help preclude the need to procure goods and services 
under unusual and compelling urgency.'' The DHS Office of 
Inspector General concurred with the agency, stating it, 
``[b]elieve[s] Section 692 of the Post-Katrina Act may 
adversely affect future disaster response and recovery 
contracting by reducing the funds available to small and local 
businesses while potentially impairing FEMA's ability to 
respond quickly to catastrophic disasters.''\6\
---------------------------------------------------------------------------
    \5\U.S. Dep't of Homeland Sec., supra note 3.
    \6\U.S. Dep't of Homeland Sec., Office of Inspector Gen., OIG-08-
81, Hurricane Katrina Multitier Contracts (2008), https://
www.oig.dhs.gov/sites/default/files/assets/Mgmt/OIG_08-81_Jul08.pdf.
---------------------------------------------------------------------------
    Furthermore, the Duncan Hunter National Defense 
Authorization Act for Fiscal Year 2009 (NDAA FY'09) resulted in 
the amendment of the Federal Acquisition Regulation (FAR) to 
impose a Government-wide limit on agencies' use of tiered 
subcontractors for cost-type contracts or orders. Section 866 
of NDAA FY'09 achieved this goal by ``requiring prime 
contractors demonstrate the added value they provide to 
subcontract work that exceeds 70 percent of the total 
contract''.\7\
---------------------------------------------------------------------------
    \7\Letter from Christine Ciccone, Assistant Sec'y for Legislative 
Affairs, U.S. Dep't of Homeland Sec., to Mitch McConnell, Majority 
Leader, U.S. Senate (May 16, 2019) (on file with author).
---------------------------------------------------------------------------
    The unique requirement imposed on DHS by section 692 of 
PKEMRA conflicts with the requirement in the FAR. It is the 
intent of Congress, as required by section 866 of the NDAA 
FY'09, that subcontracting should still be limited, but that 
under unique and unusual circumstances, may be necessary if the 
prime contractor can demonstrate their value is necessary 
despite making up a minority of the contract's share. This 
legislation would repeal section 692 of PKEMRA and put DHS on 
par with every other Federal agency in so far as they are bound 
by section 866 of the NDAA FY'09 and resulting FAR regulations.
    As amended in Committee, the bill also provides DHS' 
oversight committees with more transparency into the order of 
succession at DHS. In addition to the Federal Vacancies Reform 
Act of 1998 (FVRA)\8\ and an executive order that outline the 
order of succession at DHS,\9\ the Homeland Security Act of 
2002 authorized the Secretary of DHS to designate a ``further'' 
line of succession for an individual to act as Acting Secretary 
in the event that the Secretary, Deputy Secretary, and Under 
Secretary for Management cannot serve.\10\ The same subsection 
requires the Secretary to notify this Committee and the 
Committee on Homeland Security of the House of Representatives 
of any vacancies that require notification under the FVRA.\11\ 
S. 4165 as amended would maintain the authorities provided in 
the Homeland Security Act and the requirement to inform the 
committees of applicable vacancies, but add a new requirement 
that the Secretary also notify the committees within three days 
if he or she changes the ``further'' order of succession. 
Finally, it would add the same three-day notification 
requirement for any changes the Secretary makes to the order of 
succession for the Deputy Secretary.\12\ These modifications 
will ensure that Congress is kept abreast of the order of 
succession of DHS' senior leadership.
---------------------------------------------------------------------------
    \8\5 U.S.C. Sec. Sec. 3345 et seq.
    \9\The White House, Office of the Press Secretary, Amending the 
Order of Succession in the Department of Homeland Security Executive 
Order (Dec. 9, 2016), available at https://
obamawhitehouse.archives.gov/the-press-office/2016/12/09/executive-
order-amending-order-succession-department-homeland-security.
    \10\Codified at 6 U.S.C. Sec. 113(g)(1), (2).
    \11\Id. at Sec. 113(g)(3).
    \12\This includes the DHS Delegation No. 0106, DHS Orders of 
Succession and Delegations of Authority for Named Positions, or any 
successor document.
---------------------------------------------------------------------------

                        III. Legislative History

    Senator Ron Johnson (R-WI) introduced S. 4165, to repeal 
section 692 of the Post-Katrina Emergency Management Reform Act 
of 2006, on July 2, 2020. The bill was referred to the 
Committee on Homeland Security and Governmental Affairs of the 
Senate.
    The Committee considered S. 4165 at a business meeting on 
July 22, 2020. Senator Carper (D-DE) offered an amendment, as 
modified, requiring the Secretary of Homeland Security to 
submit written notification to Congress when modifications are 
made to the order of succession of the Acting Secretary or 
Deputy Secretary of DHS. The Committee adopted the amendment, 
as modified, by voice vote en bloc with Senators Johnson, 
Portman, Paul, Lankford, Romney, Scott, Enzi, Hawley, Peters, 
Carper, Hassan, Harris, and Rosen present. Senator Scott asked 
to be recorded as having voted ``No'' for the record.
    The Committee ordered the bill, as amended, reported 
favorably by voice vote en bloc with Senators Johnson, Portman, 
Paul, Lankford, Romney, Scott, Enzi, Hawley, Peters, Carper, 
Hassan, Harris, and Rosen present.

        IV. Section-by-Section Analysis of the Bill, as Reported


Section 1. Repeal

    This section repeals section 692 of the Post-Katrina 
Emergency Management Reform Act of 2006.

Section 2. Notification requirements related to modifications to the 
        Order of Succession in the Department of Homeland Security or 
        Delegations of the Deputy Secretary

    This section amends the Homeland Security Act of 2002 to 
require the Secretary of DHS to notify the Committee on 
Homeland Security and Governmental Affairs of the Senate and 
the Committee on Homeland Security of the House of 
Representatives of any vacancies that require notification 
under the Federal Vacancies Reform Act of 1998.
    It also requires the Secretary of DHS to notify the 
Committee on Homeland Security and Governmental Affairs of the 
Senate and the Committee on Homeland Security of the House of 
Representatives within three days of any modifications made by 
the Secretary to the order of succession for the Acting 
Secretary of DHS under the Homeland Security Act, as well as 
any modification made by the Secretary to the order of 
succession outlined for the Deputy Secretary in Delegation No. 
0106, DHS Orders of Succession and Delegations of Authority for 
Named Positions, or any successor document.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

    CBO failed to provide the Committee with a cost estimate in 
time for the final reporting deadline of the 116th Congress.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows: (existing law 
proposed to be omitted is enclosed in brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman:

UNITED STATES CODE

           *       *       *       *       *       *       *


TITLE 6: DOMESTIC SECURITY

           *       *       *       *       *       *       *


CHAPTER 2: NATIONAL EMERGENCY MANAGEMENT

           *       *       *       *       *       *       *



Subchapter II: Comprehensive Preparedness System

           *       *       *       *       *       *       *



PART D: PREVENTION OF FRAUD, WASTE, AND ABUSE

           *       *       *       *       *       *       *



[SEC. 692. LIMITATIONS ON TIERING OF SUBCONTRACTORS.

    (a) Regulations.--The Secretary shall promulgate 
regulations applicable to contracts described in subsection (c) 
to minimize the excessive use by contractors of subcontractors 
or tiers of subcontractors to perform the principal work of the 
contract.
    (b) Specific Requirement.--At a minimum, the regulations 
promulgated under subsection (a) shall preclude a contractor 
from using subcontracts for more than 65 percent of the cost of 
the contract or the cost of any individual task or delivery 
order (not including overhead and profit), unless the Secretary 
determines that such requirement is not feasible or 
practicable.
    (c) Covered Contracts.--This section applies to any cost-
reimbursement type contract or task or delivery order in an 
amount greater than the simplified acquisition threshold (as 
defined by section 134 of title 41) entered into by the 
Department to facilitate response to or recovery from a natural 
disaster or act of terrorism or other man-made disaster.]

           *       *       *       *       *       *       *


HOMELAND SECURITY ACT OF 2002

           *       *       *       *       *       *       *


TITLE I: DEPARTMENT OF HOMELAND SECURITY

           *       *       *       *       *       *       *


SEC. 103. OTHER OFFICERS.

    (a) * * *

           *       *       *       *       *       *       *

    (g) * * *
          (1) * * *
          (2) * * *
          (3) Notification [of vacancies] requirements.--
                  (A) * * *
                  (B) Revisions to order of succession.--The 
                Secretary shall submit written notification to 
                the committees referred to in subparagraph (A) 
                not later than 3 days after--
                          (i) making any modification to the 
                        order of succession pursuant to 
                        paragraph (2); or
                          (ii) making any modification to Annex 
                        B of DHS Delegation 0106, which sets 
                        forth the order of succession for the 
                        Deputy Secretary of Homeland Security, 
                        to the Delegation to the Senior 
                        Official Performing the Duties of the 
                        Deputy Secretary, or to any successor 
                        document.

                                  [all]