[Senate Report 118-276]
[From the U.S. Government Publishing Office]
Calendar No. 679
118th Congress } { Report
SENATE
2d Session } { 118-276
_______________________________________________________________________
FEDERAL IMPROVEMENT IN TECHNOLOGY (FIT) PROCUREMENT ACT
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 4066
TO IMPROVE FEDERAL TECHNOLOGY PROCUREMENT,
AND FOR OTHER PURPOSES
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
December 9, 2024.--Ordered to be printed
_______
U.S. GOVERNMENT PUBLISHING OFFICE
59-010 WASHINGTON : 2025
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware RAND PAUL, Kentucky
MAGGIE HASSAN, New Hampshire RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona JAMES LANKFORD, Oklahoma
JACKY ROSEN, Nevada MITT ROMNEY, Utah
JON OSSOFF, Georgia RICK SCOTT, Florida
RICHARD BLUMENTHAL, Connecticut JOSH HAWLEY, Missouri
LAPHONZA R. BUTLER, California ROGER MARSHALL, Kansas
David M. Weinberg, Staff Director
Alan S. Kahn, Chief Counsel
Michelle M. Benecke, Senior Counsel
William E. Henderson III, Minority Staff Director
Christina N. Salazar, Minority Chief Counsel
Andrew J. Hopkins, Minority Counsel
Laura W. Kilbride, Chief Clerk
Calendar No. 679
118th Congress } { Report
SENATE
2d Session } { 118-276
======================================================================
FEDERAL IMPROVEMENT IN TECHNOLOGY (FIT) PROCUREMENT ACT
_______
December 9, 2024.--Ordered to be printed
_______
Mr. Peters, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 4066]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 4066) to improve
Federal technology procurement, and for other purposes; having
considered the same, reports favorably thereon with an
amendment, in the nature of a substitute, and recommends 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 of the Bill, as Reported............. 4
V. Evaluation of Regulatory Impact.................................. 6
VI. Changes in Existing Law Made by the Bill, as Reported............ 6
I. Purpose and Summary
S. 4066, the Federal Improvement in Technology (FIT)
Procurement Act addresses improving training and guidance for
procuring technology, and the need to increase competition and
small business participation. To do so the bill requires the
Federal Acquisition Institute (FAI) to provide training for the
acquisition workforce. The bill also updates authorities to
enable streamlined procurement methods and those consistent
with commercial practices. The bill requires the Office of
Federal Procurement Policy to identify and implement necessary
updates to procurement regulations and guidance that
disproportionately affect the ability of small businesses to
compete for federal contracts. The bill also requires the
Comptroller General of the United States to report to Congress
on the level of small business participation in Federal
procurement.
II. Background and Need for the Legislation
Recent Government Accountability Office (GAO) trend
analyses of government-wide contracting show that the federal
government continues to increase the amount of federal dollars
obligated through contracts.\1\ Growing technology needs are
driving this trend; currently, the federal government spends
more than $100 billion annually purchasing information
technology.\2\ Training is also important for the acquisition
workforce to ensure purchasing officials have an understanding
of current technology trends and technology acquisition best
practices.\3\
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\1\Timothy J. DiNapoli, A Snapshot of Government-Wide Contracting
for FY 2022, Government Accountability Office (blog) (Aug. 15, 2023)
(www.gao.gov/blog/snapshot-government-wide-contracting-fy-2022).;
Timothy J. DiNapoli, A Snapshot of Government-Wide Contracting for FY
2020 (infographic), Government Accountability Office (blog) (Jun. 22,
2021) (www.gao.gov/blog/snapshot-government-wide-contracting-fy-2020-
infographic).; William T. Woods, A Snapshot of Government-Wide
Contracting for 2019, Government Accountability Office (blog) (May 26,
2020) (www.gao.gov/blog/snapshot-government-wide-contracting-fy-2019-
infographic#::text=In%20FY
%202019%2C%20the%20federal,on%20services%20for%20national%20defense).
\2\Government Accountability Office, Information Technology:
Agencies Need to Continue Addressing Critical Legacy Systems (GAO-15-
477) (May 2023).
\3\National Security Commission on Artificial Intelligence, Final
Report (Mar. 2021) (www.nscai.gov/wp-content/uploads/2021/03/Full-
Report-Digital-1.pdf).
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Certain procurement rules and guidelines that are not in
line with commercial practices can in some cases cause the
government to pay more for a product or service, or not
consider relevant information in the award decision to obtain
the best solution. For example, cloud computing providers
charge federal agencies up to 25% more for cloud services when
they are billed in arrears than when services are purchased up
front.\4\ However, existing procurement law only allows for
certain exceptions, where an agency can pay in advance of
receipt of a supply or service, such as for subscriptions to
publications.\5\ In addition, business references that provide
feedback on how well a company has performed on previous
projects are typically only obtained for federal projects. As a
result, newer companies or those who have not worked for the
government before cannot provide references for work they have
completed successfully for the federal government.\6\
Consequently, these companies can be at a disadvantage in many
procurements where past performance references are a key
evaluation factor.\7\
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\4\Blame the lawyers if your agency is paying 10%-to-25% more for
certain cloud services, Federal News Network (August 16, 2023)
(federalnewsnetwork.com/reporters-notebook-jason-miller/2023/08/blame-
the-lawyers-if-your-agency-is-paying-10-to-25-more-for-certain-cloud-
services/).
\5\31 U.S. Code Sec. 3324.
\6\America's SBDC Florida, Strategies to Overcome Having No Past
Performance for Government Contracting (June 1, 2023)
(sbdctampabay.com/strategies-to-overcome-having-no-past-performance-
for-government-contracting/).
\7\Federal Acquisition Regulation 15.304(c)(3).
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While federal contracting dollars are increasing year over
year, the pool of federal contractors is shrinking,
particularly with regard to new and small companies. A GAO
study of Department of Defense (DOD) contracting, which makes
up a large share of federal contract awards, from fiscal years
2011 to 2020 found that, while DOD contracts with small
businesses increased by 15%, the number of small businesses
awarded DOD contracts decreased by almost half (43%). The
number of large businesses receiving DOD contracts also fell by
7.3% per year during that time period.\8\ Defense Logistics
Agency also found separately that from 2016 to 2022, its vendor
base decreased by 3,000 vendors, or 22%, including losing 2,300
small businesses.\9\
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\8\Government Accountability Office, Small Business Contracting:
Actions Needed to Implement and Monitor DOD's Small Business Strategy
(GAO-22-104621) (Oct. 14, 2021).
\9\U.S. Department of Defense, Industrial Base Strength Necessary
for Future DOD Success (May 9, 2023) (www.defense.gov/News/News-
Stories/Article/Article/3389621/industrial-base-strength-necessary-for-
future-dod-success/).
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The findings of a July 2021 Bipartisan Policy Center report
noted the importance of small businesses to the United States
economy, and the hurdles that these businesses face in
competing for federal contracts. The report noted that the
number of small businesses participating in federal procurement
as a whole dropped by 38% from 2010 to 2019, and the number of
new small businesses first entering the federal marketplace
fell by 79% from 2005 to 2019. The report found that the
difficulty in navigating the federal procurement process and
its ``barriers to entry'' was the cause of this substantial
decrease in small business participation. Such barriers include
onerous requirements that are expensive and time-consuming for
companies trying to secure federal work and increasing
consolidation of the work with larger contract vehicles awarded
to a relatively small pool of contractors.\10\
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\10\Bipartisan Policy Center, Supporting Small Business and
Strengthening the Economy Through Procurement Reform (Jul. 2021)
(bipartisanpolicy.org/download/?file=/wp-content/uploads/2021/06/Small-
Business-Report_RV1-FINAL.pdf).
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III. Legislative History
Chairman Gary Peters (D-MI) introduced S. 4066, the FIT
Procurement Act, on March 23, 2024, with original cosponsor
Senator Ted Cruz (R-TX). The bill was referred to the Committee
on Homeland Security and Governmental Affairs.
The Committee considered S. 4066 at a business meeting on
May 15, 2024. At the business meeting, Senator Peters offered a
substitute amendment to the bill, as well as a modification to
the substitute amendment.
The Peters substitute amendment, as modified, removed the
Findings section and certain other provisions including
Expansion of Commercial Solutions Opening Authority, a change
to Multiple Award Schedule Program Competitive Procedures, and
Incentivizing Employee Stock Ownership Plans for Business
Growth; it added a provision requiring a Comptroller General
Assessment of Small Business Participation in Federal
Procurement. The substitute amendment also clarified that the
provision on Enhancing Competition in Federal Procurement
focuses on identifying and eliminating unnecessary barriers
that adversely impact the ability of small businesses to
compete for Federal contracts.
The Committee adopted the Peters substitute amendment, as
modified, by unanimous consent, with Senators Peters, Carper,
Hassan, Rosen, Blumenthal, Paul, Lankford, Romney, Scott,
Hawley and Marshall present. The bill, as amended by the
modified Peters substitute amendment, was ordered reported
favorably, by roll call vote of 10 yeas and 0 nays, with
Peters, Carper, Hassan, Rosen, Blumenthal, Lankford, Romney,
Scott, Hawley and Marshall voting in the affirmative and with
Senator Paul recorded as ``Present''. Senators Sinema, Ossoff,
Butler and Johnson voted yea by proxy, for the record only.
IV. Section-by-Section Analysis of the Bill, as Reported
Section 1. Short title
This section provides that the Act may be cited as the
``Federal Improvement in Technology Procurement Act'' or the
``FIT Procurement Act.''
Section 2. Definitions
This section provides definitions for the terms
``Acquisition Workforce,'' ``Administrator,'' ``Cross-
functional,'' ``Executive Agency,'' ``Experiential Learning,''
``Information and Communications Technology,'' ``Relevant
Committees of Congress,'' and ``Small Business.''
Section 3. Acquisition workforce
Subsection (a) directs the FAI to establish a pilot program
within 18 months to consider incorporating experiential
learning into the Federal Credentials Program, the Federal
Acquisition Certification-Contracting Officer's Representative
(FAC COR) Program, and the Federal Acquisition Certification
for Program and Project Managers, or any successor programs.
Subsection (b) directs FAI, in coordination with the Office
of Federal Procurement Policy, the General Services
Administration (GSA), the Office of Electronic Government, the
Chief Information Officers Council, and the United States
Digital Service, to develop and implement or otherwise provide
a cross-functional information and communications technology
acquisition training program to acquisition workforce members
involved in acquiring information and communications
technology. The subsection requires the training program to be
updated as appropriate as technology advances but at least
every 2 years after implementation, and to be offered for a
minimum of 5 years following the date of implementation.
This subsection also requires FAI, within 18 months of
enactment, to provide a report to the relevant committees of
Congress, the Chief Acquisition Officers Council, and the Chief
Information Officers Council on FAI's progress towards
providing the information and communications technology
acquisition training and a list of any congressionally mandated
acquisition trainings that the Director determines to be
outdated or no longer necessary for other reasons.
Subsection (c) would increase the share of the fees paid by
federal agencies for the use of certain interagency contracts
to the Acquisition Workforce Training Fund maintained by GSA
for use by the Federal Acquisition Institute and Defense
Acquisition University to provide funding for training of the
acquisition workforce, from 5% to 7.5%.
Subsection (d) reassigns from the Director of the Office of
Management and Budget to the Administrator of General Services
the responsibility for the acquisition workforce training
requirements of the AI Training Act (Public Law 117-07; 41
U.S.C. 1703 note) passed in October 2022.
Section 4. Innovative procurement methods
Subsection (a) would increase the Simplified Acquisition
Threshold under the Federal Acquisition Regulation from
$250,000 to $500,000.
Subsection (b) adds an exception to the statutory list of
purchases for which advance payment is allowed, allowing
federal agencies to make payment arrangements for information
and communications technology acquired on a subscription,
reservations, or tenancy basis (including cloud computing and
data center solutions) consistent with commercial practices.
Section 5. Addressing barriers to entry in Federal contracting
Subsection (a) directs OFPP, within 1 year of enactment, to
provide guidance on when a wider range of projects should be
accepted as relevant past performance in order to permit access
to more eligible firms with capability to perform. OFPP must
also provide guidance on a means by which an agency may
validate non-government past performance references, and
alternative evaluation methods that may be appropriate for a
requirement without much precedent.
Subsection (b) directs OFPP, within 90 days of enactment,
to convene the Chief Acquisition Officers' Council (Council) to
make recommendations to identify and eliminate specific,
unnecessary procedural barriers that disproportionately affect
the ability of small businesses to compete for Federal
contracts. In formulating these recommendations, the Council
must obtain and consider input from the public, and any other
information determined to be relevant by the Council, to
identify legislative, regulatory, and other actions to increase
competition and remove barriers to small business participation
in the procurement process.
This subsection further requires OFPP, not later than 2
years after enactment, in consultation with the Federal
Acquisition Regulatory Council, the Chief Acquisition Officers
Council, and other agencies as appropriate, to implement the
regulatory and other non-legislative actions identified by the
Council, as determined necessary by the Administrator, to
remove barriers to entry for small businesses seeking to
participate in Federal Government procurement. Not later than 2
years after the date of enactment, the Administrator must brief
the relevant committees of Congress on the actions implemented
as well as potential legislative actions identified by the
Council under this subsection.
Subsection (c) requires OFPP to advocate for and prioritize
contracting policies that ensure that cost-efficiency and
quality of goods and services are key determining factors in
awarding Federal contracts.
Section 6. Comptroller General assessment of small business
participation in Federal procurement
This section requires the Comptroller General of the United
States, within 18 months of enactment, to submit to Congress
and make publicly available a report that assesses the current
level of small business participation in Federal procurement.
The report should identify barriers, opportunities, and the
impact of existing policies on the ability of small businesses
to compete in Federal procurement. The report to be submitted
must also catalog and evaluate the effectiveness of programs
intended to support small business participation in Federal
procurement and analyze trends in small business involvement in
Federal technology projects, including data on contract awards,
the diversity of sectors represented, and the geographic
distribution of small business contractors.
Section 7. Conflict of interest procedures
This section requires the Federal Acquisition Regulatory
Council to update the Federal Acquisition Regulation if
necessary to provide additional guidance to Federal agencies on
addressing personal and organizational conflicts of interest
involving members of the acquisition workforce.
Section 8. No additional funding
This section specifies that no additional funds are
authorized to be appropriated for the purpose of carrying out
this Act.
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 (CBO) 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. 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 31--MONEY AND FINANCE
* * * * * * *
Subtitle III--Financial Management
* * * * * * *
CHAPTER 33--DEPOSITING, KEEPING, AND PAYING MONEY
* * * * * * *
Subchapter II--Payments
* * * * * * *
SEC. 3324. ADVANCES.
(a) * * *
(b) * * *
(c) * * *
(d) * * *
(1) * * *
(A) * * *
(B) * * *
(C) installing and maintaining facilities for
sending messages[; and]
(2) charges for a publication or commercially
available content printed or recorded in any way for
the auditory or visual use of the agency [.]; and
(3) charges for information and communications
technology subscriptions, reservations, or tenancy,
which means the sharing of computing resources in a
private or public environment, including cloud
environments, for which the ordering agency defines
appropriate access and security standards.
TITLE 41--PUBLIC CONTRACTS
* * * * * * *
Subtitle I--Federal Procurement Policy
* * * * * * *
DIVISION A--GENERAL
* * * * * * *
CHAPTER 1--DEFINITIONS
* * * * * * *
Subchapter II--Division B Definitions
* * * * * * *
SEC. 134. SIMPLIFIED ACQUISITION THRESHOLD.
In division B, the term ``simplified acquisition
threshold'' means [$250,000] $500,000.
* * * * * * *
DIVISION B--OFFICE OF FEDERAL PROCUREMENT POLICY
* * * * * * *
CHAPTER 17--AGENCY RESPONSIBILITIES AND PROCEDURES
* * * * * * *
SEC. 1703. ACQUISITION WORKFORCE.
* * * * * * *
(i) Training Fund.--
(1) * * *
(2) * * *
(3) Credits to fund.--[Five percent] Seven and a half
percent of the fees collected by executive agencies
(other than the Department of Defense) under the
following contracts shall be credited to the fund:
* * * * * * *
[all]