[Senate Report 116-84]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 188
                                                       

116th Congress   }                                            {   Report
                                  SENATE                          
 1st Session     }                                            {   116-84
______________________________________________________________________

                                     

                                                       


               FEDERAL ADVANCED CONTRACTS ENHANCEMENT ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 979

             TO AMEND THE POST-KATRINA EMERGENCY MANAGEMENT
         REFORM ACT OF 2006 TO INCORPORATE THE RECOMMENDATIONS
   MADE BY THE GOVERNMENT ACCOUNTABILITY OFFICE RELATING TO ADVANCE 
                   CONTRACTS, AND FOR OTHER PURPOSES
                   
                   

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




               September 10, 2019.--Ordered to be printed
               
                          _________
               
               U.S. GOVERNMENT PUBLISHING OFFICE
               
89-010                 WASHINGTON : 2019


                        
                        
               
        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
   Christopher J. Mulkins, Minority Senior Professional Staff Member
                     Laura W. Kilbride, Chief Clerk
                     
                     
                     
                     

                                                       Calendar No. 188
                                                       
                                                       
116th Congress    }                                           {    Report
                                 SENATE
 1st Session      }                                           {    116-84

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



 
               FEDERAL ADVANCED CONTRACTS ENHANCEMENT ACT

                                _______
                                

               September 10, 2019.--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. 979]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 979) to amend the 
Post-Katrina Emergency Management Reform Act of 2006 to 
incorporate the recommendations made by the Government 
Accountability Office relating to advance contracts, and for 
other purposes, having considered the same, reports favorably 
thereon with amendments and recommends that the bill, as 
amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................3
 IV. Section-by-Section Analysis......................................3
  V. Evaluation of Regulatory Impact..................................4
 VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............6

                         I. Purpose and Summary

    S. 979, the Federal Advance Contracts Enhancement Act of 
2019, codifies nine recommendations made by the Government 
Accountability Office (GAO) related to the Federal Emergency 
Management Agency's (FEMA) use of advance contracting in 
carrying out its mission responsibilities. GAO's 
recommendations require FEMA to, among other things, update its 
strategy and guidance to clarify the use of advance contracts, 
improve the timeliness of its acquisition planning activities, 
and provide more consistent guidance, information, and 
coordination with states and localities to establish advance 
contracts. It also requires that FEMA report to Congress on its 
implementation efforts.

              II. Background and the Need for Legislation

    Following Hurricane Katrina in 2005, the Congress enacted 
the Post-Katrina Emergency Management Reform Act of 2006 
(PKEMRA) to address various shortcomings identified in 
preparation for and response to Hurricane Katrina.\1\ One of 
those reforms required FEMA to establish advance contracts. 
Advance contracts are contracts that are established prior to 
disasters and that are typically needed to quickly provide 
life-sustaining goods and services in the immediate aftermath 
of disasters.\2\ Other requirements in PKEMRA include that 
FEMA: coordinate advance contracts with state and local 
governments, encourage state and local governments to engage in 
similar pre-planning and contracting, and develop a contracting 
strategy.\3\
---------------------------------------------------------------------------
    \1\Pub. L. No. 109-295, Sec.  691 (codified at 6 U.S.C. Sec.  791).
    \2\Id.
    \3\Id.
---------------------------------------------------------------------------
    To satisfy the requirements in PKEMRA, FEMA created an 
advance contracting strategy, which was outlined in its report 
to the Congress in 2007.\4\ According to its strategy, FEMA 
``will 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.''\5\
---------------------------------------------------------------------------
    \4\Department of Homeland Security, Federal Emergency Management 
Agency, Advance Contracting of Goods and Services Report to Congress 
(Dec. 2007).
    \5\Id.
---------------------------------------------------------------------------
    Advance contracts are important because if contracts are 
not in place before a disaster strikes and a disaster is 
declared, FEMA could enter into contracts under ``unusual and 
compelling urgency'', a position that exempts the agency from 
full and open competition requirements.\6\ In these instances, 
FEMA enters into non-competitive contracts to deliver life-
sustaining resources to suffering communities.\7\ When 
resources are exhausted and contracts are entered into on a 
non-competitive manner, previous experience shows that the 
product typically ends up being produced at a higher cost to 
the Federal Government.\8\ In recognition of that, Congress 
required FEMA to leverage the use of advanced contracts and 
develop strategies to prioritize their use in PKEMRA.\9\
---------------------------------------------------------------------------
    \6\Id.
    \7\Id.
    \8\Id.
    \9\Id.
---------------------------------------------------------------------------
    At the request of Congress, GAO reviewed the Federal 
Government's contracting efforts for preparedness, response, 
and recovery efforts related to the 2017 hurricanes and 
California wildfires.\10\ In its review, GAO found that in 
response to Hurricanes Harvey, Irma, and Maria, as well as the 
2017 California wildfires, FEMA and the U.S. Army Corps of 
Engineers (USACE) relied heavily on advance contracts, 
obligating approximately $4.5 billion for goods and services as 
of May 31, 2018.\11\ Despite FEMA and USACE's extensive use of 
advance contracts, GAO identified several challenges, 
including, but not limited to, inconsistencies in Federal 
coordination with states and localities on their use--a 
requirement from PKEMRA. As GAO stated, ``without consistent 
information and coordination with FEMA, states and localities 
may not have the tools needed to establish their own advance 
contracts for critical goods and services and quickly respond 
to future disasters.''\12\
---------------------------------------------------------------------------
    \10\U.S. Gov't Accountability Office, GAO-19-93, 2017 Disaster 
Contracting: Action Needed to Better Ensure More Effective Use and 
Management of Advance Contracts (2019), available at https://
www.gao.gov/assets/700/695829.pdf.
    \11\Id.
    \12\Id.
---------------------------------------------------------------------------
    Concluding their review, GAO made nine recommendations to 
FEMA. Among others, those recommendations would require FEMA 
to:

          Update its strategy and guidance to clarify the use 
        of advance contracts, improve the timelines of its 
        acquisition planning activities, revise its methodology 
        for reporting disaster contracting actions to 
        congressional committees, and provide more consistent 
        guidance and information to contracting officers to 
        coordinate with and encourage states and localities to 
        establish advance contracts.\13\
---------------------------------------------------------------------------
    \13\Id.

    After reviewing GAO's report and the accompanying 
recommendations, FEMA concurred with all nine 
recommendations.\14\ S. 979 codifies those recommendations to 
ensure that FEMA is more effectively using and managing its 
advance contracts process while also coordinating with states 
and localities to ensure they are well-prepared and equipped 
for future disasters.\15\
---------------------------------------------------------------------------
    \14\Id.
    \15\Press Release, Senator Marco Rubio, The Federal Advance 
Contracts Enhancement (FACE) Act (2019), available at https://
www.rubio.senate.gov/public/_cache/files/3c25affe-baa4-43bb-9b3d-
21f7c7aef40a/949D2085980D52AF552926AEDA958DBF.rubio---the-face-act-one-
pager.pdf.
---------------------------------------------------------------------------

                        III. Legislative History

    Senator Marco Rubio (R-FL) introduced S. 979, the Federal 
Advance Contracts Enhancement Act, on April 2, 2019, with 
Committee Chairman Ron Johnson (R-WI) and Ranking Member Gary 
Peters (D-MI). The bill was referred to the Committee on the 
Homeland Security and Governmental Affairs.
    The Committee considered S. 979 at a business meeting on 
June 19, 2019. Senator Peters offered an amendment that 
requires FEMA to report within 180 days how the agency can 
maximize the award of advance contracts to small businesses. 
The Committee ordered the bill, as amended by the Peters 
Amendment, reported favorably by voice vote en bloc. Senators 
present for the vote were: Johnson, Portman, Paul, Lankford, 
Romney, Scott, Enzi, Hawley, Peters, Carper, Hassan, Sinema, 
and Rosen.

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


Section 1. Short title

    This section established that the Bill may be cited as the 
``Federal Advance Contracts Enhancement Act'' or the ``FACE 
Act.''

Section 2. Findings

    This section makes a number of findings. First it clarifies 
that, according to PKEMRA, FEMA is required to establish 
advance contracts. It defines advance contracts as contracts 
that are established prior to disasters and are typically 
needed to provide life-sustaining goods and services in the 
immediate aftermath of a disaster. It also finds that the 
hurricanes and wildfires in 2017 highlighted the importance of 
advance contracts, cites GAO's report that identified advance 
contract challenges in the review of the 2017 disaster season, 
and states the intent of Congress to amend PKEMRA to implement 
GAO's recommendations.

Section 3. Federal emergency management agency advance contracts

    Subsection (a) amends Section 691 of PKEMRA to add a new 
section (e), which requires that the Administrator of FEMA 
report to the appropriate committees of Congress on FEMA's 
reporting methodology, disaster contract spending, a strategy 
that defines the objective of advance contracts, how advance 
contracts contribute to disaster response operations, how to 
maximize the award of advanced contracts to small businesses, 
and whether and how advance contracts should be prioritized in 
relation to post-disaster contracts.
    It also adds a new section (f), which requires the 
Administrator of FEMA within 270 days to ensure the head of 
contracting activity updates the Disaster Contracting Desk 
Guide to provide guidance on instances where contracting 
officers should use advance contracts over post-disaster 
contracts, for contract officers to work with state and local 
governments to ensure sound advance contracts are in place at 
their respective levels, to adhere to hard copy contract file 
management requirements, that contracting officers be notified 
of the three-day time frame requirements for entering completed 
award documentation, to revise the reporting methodology to 
ensure all disaster contracts are entered into quarterly 
reports, to identify a single centralized resource that all 
advance contracts be entered into, and communicates complete 
and up-to-date information that is available to state and local 
governments to inform their advance contracting efforts.
    The Administrator of FEMA is also required within 180 days 
to update and implement guidance to identify acquisition 
planning time frames, to clearly communicate the purpose and 
use of a master acquisition planning schedule, and to report 
regularly to the appropriate committees of Congress on their 
efforts to implement the GAO recommendations.

                   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

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 18, 2019.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 979, the Federal 
Advance Contracts Enhancement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jon Sperl.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

    
    

    Under the Post-Katrina Emergency Management Reform Act of 
2006, the Federal Emergency Management Agency (FEMA) was 
required to provide a report to the Congress identifying goods 
and services that the agency is capable of contracting for in 
advance of disasters, as well as a strategy outlining how the 
agency could use advance contracts in a practical and cost-
effective manner.
    S. 979 would require FEMA, within 6 months of enactment, to 
provide an updated report and strategy to the Congress that 
includes new information about how advance contracts can be 
better employed by the agency. The bill also would require FEMA 
to undertake a variety of actions with respect to contracts 
including communicating complete and up-to-date information on 
available advance contracts to state and local governments.
    FEMA's Office of Chief Procurement Officer employs 54 staff 
focused on implementing advance contracts and is currently 
performing all of the activities required by S. 979, with the 
exception of communicating with state and local governments.
    Using information from FEMA, CBO estimates that the agency 
would need about $150,000 to develop a strategy for 
communicating information to state and local governments and 
would complete the strategy in 2020. After that, CBO expects 
the agency would start conducting two briefings each year with 
state and local officials. CBO estimates the agency would 
require the equivalent of 3 full-time employees for those 
briefings, at an annual cost of about $400,000. In total, CBO 
estimates that the briefings would cost $2 million over the 
2020-2024 period; any spending would be subject to the 
availability of appropriated funds.
    The CBO staff contact for this estimate is Jon Sperl. The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

       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. 791. ADVANCE CONTRACTING

           *       *       *       *       *       *       *


    (e) Updated Report.--Not later than 180 days after the date 
of enactment of this subsection, the Administrator shall submit 
to the appropriate committee of Congress an undated report that 
contains--
          (1) the information required in the initial report 
        under subparagraphs (A) and (B) of subsection (a)(1); 
        and
          (2) an updated strategy described in subsection 
        (a)(1)(C) that clearly defines--
                  (A) the objectives of advance contracts;
                  (B) how advance contracts contribute to 
                disaster response operations of the Agency;
                  (C) how to maximize the award of advance 
                contracts to small business concerns, as 
                defined in section 3 of the Small Business Act 
                (15 U.S.C. 632); and
                  (D) whether and how advance contracts should 
                be prioritized in relation to new post-disaster 
                contract awards.
    (f) Additional Duties of the Administrator.--
          (1) Head of contracting.--The Administrator shall 
        ensure that the head of contracting activity of the 
        agency--
                  (A) not later than 270 days after the date of 
                enactment of this subsection, updates the 
                Disaster Contracting Desk Guide of the Agency 
                to provide specific guidance--
                          (i) on whether and under what 
                        circumstances contracting officers 
                        should consider using existing advance 
                        contracts entered into in according 
                        with this section prior to making new 
                        post disaster contract awards, and 
                        include this guidance in existing semi-
                        annual training given to contracting 
                        officers; and
                          (ii) for contracting officers to 
                        perform outreach and to State and local 
                        government on the potential benefits of 
                        establishing their own pre-negotiated 
                        advance contracts;
                  (B) adheres to hard copy contract file 
                management requirements in effect to ensure 
                that the files relating to advance contracts 
                entered into in accordance with this section 
                are complete and up to date, whether the files 
                will be transferred into the Electronic 
                Contracting Filing System of the Agency or 
                remain in hard copy format;
                  (C) notifies contracting officers of the 3-
                day time frame requirement for entering 
                completed award documentation into the contract 
                writing system of the Agency when executing 
                notice to proceed documentation;
                  (D) not later than 180 days after the date of 
                enactment of this subsection, revises the 
                reporting methodology of the Agency to ensure 
                that all disaster contracts are included in 
                each quarterly report submitted to the 
                appropriate congressional committees under this 
                section on disaster contract actions;
                  (E) identifies a single centralized resource 
                listing advance contracts entered into under 
                this section and ensures that source is current 
                and up to date and includes all available 
                advance contracts; and
                  (F) communicates compete and up-to-date 
                information on available advance contracts to 
                State and local government to inform their 
                advance contracting efforts.
          (2) Master acquisition planning schedule.--Not later 
        than 180 days after the date of enactment of this 
        subsection, the Administrator shall update and 
        implement guidance for program office and acquisition 
        personal of the Agency to--
                  (A) identify acquisition planning time frames 
                and considerations across the entire 
                acquisition planning process of the Agency; and
                  (B) clearly communicate the purpose and use 
                of a master acquisition planning schedule.