DRAFT LEGISLATIVE PROPOSAL FOR THE OFFICE OF FEDERAL PROCUREMENT POLICY CONCERNING A UNIFORM FEDERAL PROCUREMENT SYSTEM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00338R000200210001-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 142
• Document Creation Date: December 21, 2016
• Document Release Date: October 22, 2008
• Sequence Number: 1
• Publication Date: April 9, 1982
• Content Type: MEMO

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S~)? o,3,)26
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 2D5O3
April g, 1982
LEGISLATIVE REFERRAL MEMORANDUM
TO: Legislative Liaison Officer
SEE DISTRIBUTION
SUBJECT: Draft legislative proposal for the Office of Federal
Procurement Policy concerning a uniform Federal
procurement system
The Office of Management and Budget requests the views of your
agency on the above subject before advising on its relationship to
the program of the President, in accordance with OMB Circular
A-19. NOTE: (The Office of Federal Procurement Policy will
submit its legislative proposal to the Congress no later than
April 30, 1982. Your comments must be received no later than
close of business, Thursday, April 22, 1982. There will be no
exceptions or extensions. Comments received after April 22, 1982,
will not be considered.)
Direct your questions to Gregory Jones (395-3802), of this office
or Pat Szervo of OFPP (395
Assistant Director for
Legislative Reference
Enclosures
cc: J. Jordan J. McNicholas A. Burman
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ACTION
Alaska Natural Gas
Transportation System
Central Intelligence Agency
Civil Aeronautics Board
Civil Rights Commission
Commerce Department
Defense Department
Education Department
Environmental Protection Agency
Federal Communication Commission
Federal Emergency Management
Agency
Federal Trade Commission
General Services Administration
Department of Health and Human Services
Department of Housing and Urban Development
Department of the Interior
Interstate Commerce Commission
International Communication Agency
Department of Justice
Department of Labor
National Aeronautics and Space Administration
National Science Foundation
Office of Personnel Management
Nuclear Regulatory Commission
-Panama Canal Commission
Securities and Exchange Commission
Small Bsuiness Administration
Smithsonian Institution
State Department
Tennessee Valley Authority
Department of Transportation
Department of the Treasury
U.S. Postal Service
Veterans Administration
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Proposed Implementing
Legislation
Attachment A: Office of Federal Procurement Policy Act Amendments of 198-
Attachment B: Section-by-Section Analysis
Attachment C: Armed Services Procurement Act Amendments of 198
Attachment D: Section-by-Section Analysis
Attachment E: Federal Property and Administrative Services Act Amendment
of 198
Attachment F: Section-by-Section Analysis
OFFICE OF FEDERAL PROCUREMENT POLICY
OFFICE OF MANAGEMENT AND BUDGET
April 9, 1982
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To amend Public Law 93-400 to enhance the role of the Office of Federal
Procurement Policy in Government contracting, to establish a Federal Procure-
ment System, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America assembled, that this Act shall be known as the "Office of
Federal Procurement Policy Act Amendments of 198.11
Sec. 2. Section 2 of the Office of Federal Procurement Policy Act, as amended (41
U.S.C. 401), is amended by deleting section 2 in its entirety and by inserting in lieu
thereof the following new section:
"SECTION 2. DECLARATION OF POLICY
It is the policy of the Congress that the Federal Government shall rely on
competitive private enterprise to supply needed property and services, and that the
system for procurement of property and services by the Federal Government
shall --
(1) promote responsiveness to agency mission needs by simplifying
and streamlining procurement processes;
(2) promote effective competition;
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(3) provide for a fair proportion of contracts to be placed with small
business concerns;
(4) support the continuing development of a professional work force;
(5) promote fair dealings with the private sector;
(6) ensure payment is made in a timely manner and only for value
received;
(7) require the description of needs, whenever possible, in terms of
functions to be performed or performance required;
(8) establish a preference for the use of commercial products to meet
the Government's needs;
(9) ensure the development of procurement policies that will accom-
modate serious emergencies and wartime as well as peacetime requirements;
(10) require that personal services are obtained in accordance with
civil service procedures and not by contract; and
(11) otherwise promote procurement efficiency, effectiveness and
economy within the Government and for those who do business with the
Government.".
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Sec. 3. Section 3 of the Office of Federal Procurement Policy Act, as amended (41
U.S.C. 402), is amended --
(1) by deleting "congressional findings and" in the title; and
(2) by deleting everything after "overall" in subsection (b) and inserting in
lieu thereof "leadership and coordination in the development of Government-wide
procurement policies and the implementation and maintenance of the Federal
procurement system, which includes the Government-wide procurement regulation
and standards and programs to improve the quality and performance of the
procurement work force.".
Sec. 4. Section 4 of the Office of Federal Procurement Policy Act, as amended (41
U.S.C. 403), is amended --
(1) by changing the title to "Definitions".
(2) by deleting subsection (a) in its entirety and inserting in lieu thereof the
following new subsection: "(a) As used in this chapter, the term 'executive agency'
means any executive department, military department, wholly-owned Government
corporation, or independent establishment in the executive branch of the Govern-
ment, or any independent regulatory agency. The military departments are subject
to the Department of Defense Reorganization Act, Public Law 85-599, section 2,
63 Stat. 579 (1958).";
STAT
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(3) by deleting subsection (b) in its entirety and inserting in lieu thereof the
following new subsection: "(b) As used in this chapter, the term 'procurement'
includes all stages of the process of acquiring property and services, beginning with
how needs are described and ending with the close out of the contractual
instrument."; and
(4) by adding at the end of the section the following new subsections:
"(c) As used in this chapter, the term 'grant or cooperative agreement'
does not include any agreement under which only direct Federal cash
assistance to individuals, a subsidy, a loan, a loan guarantee, or insurance is
provided.";
"(d) As used in this chapter, the term 'federal procurement system'
means the system described in Chapter 2 of the Proposal for a Uniform
Federal Procurement System submitted to the Congress on February 26,
1982. It includes the procurement process, the development of the procure-
ment work force, and the management structure for carrying out the
procurement function.";
"(e) As used in this chapter, the term 'standards' means the criteria
for measuring the effectiveness of the procurement function. 'Government-
wide standards' are enerally he broad standards which can be applied to all
agencies, and 'agency standards' are those which are unique to an agency.".
STAT
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Sec. 5. Section 6 of the Office of Federal Procurement Policy Act, as amended (41
U.S.C. 405), is amended --
(1) by deleting subsections (a), (b), (c), (d), (e), (h), (i) and (j) in their
entirety;
(2) by redesignating subsection (f) as a new section 14, entitled "NON-
INTERFERENCE WITH EXECUTIVE AGENCIES" and by adding at the end of the
new section 14 the following new subsection: "(3) authorize promulgation of
policies or any other action under this statute that impairs an agency's ability to
meet its mission responsibilities. An agency shall promptly notify the Director of
Office of Management and Budget of any instance in which it determines that an
Office of Federal Procurement Policy promulgation does impair its mission
responsibilities.";
(3) by redesignating subsection (g) as a new section 15, entitled
"RESTRICTIONS ON DELEGATION OF OTHER FUNCTIONS"; and
(4) by inserting in lieu thereof the following new section:
"SECTION 6. AUTHORITY AND FUNCTIONS OF THE ADMINISTRATOR
(a) The Administrator shall provide overall leadership in the development
and implementation of procurement policies and the coordination of programs to
improve the quality and performance of procurement personnel by --
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(1) developing and promulgating Government-wide procurement
11 been accordance with applicable laws *d the policies
rand shall be followed by executive agencies and
by recipients of Federal assistance undeharants or co
the procurement of property and services required for the performance of
such assistance programs. Policy directives may require executive agencies
to issue implementing regulations which shall be in accord with the standards
set forth in such policy directives;
(2) coordinating the development of Government-wide procurement
system standards and assisting agencies in the development of agency system
standards;
(3) providing leadership in the development and maintenance of the
Government-wide procurement regulation and in the development of simpli-
fied Government-wide procedures and forms;
(4) fostering and promoting, through the Federal Acquisition
Institute, career management programs for a professional procurement work
force;
(5) providing leadership and coordination in the formulation of
executive branch positions on legislation relating to procurement;
(6) providing for a computer-based Federal Procurement Data
System;
STAT
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(7) promoting and coordinating research to improve the procurement
process and procurement related laws, policies, methods, regulations, proce-
dures, and forms;
(8) completing action, as appropriate, on the recommendations of the
Commission on Government Procurement; and
(9) establishing procedures to ensure an effective and timely method
of soliciting the viewpoints of interested parties in the development of
procurement policies and regulations.
(b) The Administrator shall have authority to develop innovative
procurement methods and procedures to be tested by selected executive agencies,
notwithstanding any other provisions of law; provided, that the Director, Office of
Management and Budget, and the head of the executive agency concerned, concur
with the proposed test, and that appropriate committees of Congress are notified
at least 60 days in advance if such test will require waiver by the Administrator of
existing provisions of law. The notification to Congress shall include a description
of the planned test, its scope and purpose, the executive agencies involved, and
what actions are planned when the test is completed.
(c) In carrying out the functions in (a)(l) through (9) above, the
Administrator shall consult with the affected executive agencies. The Admini-
strator may designate an executive agency or agencies, establish advisory commit-
tees or interagency groups, or otherwise use agency representatives or personnel to
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provide advice and make recommendations to the Administrator in the
performance of functions under this Act.".
Sec. 6. Section 222 of the Act of October 24, 1978 (92 Stat. 1771; 41 U.S.C. 405a),
is amended by deleting the entire section.
Sec. 7. Section 7 of the Office of Federal Procurement Policy Act, as amended (41
U.S.C. 406), is amended by redesignating section 7 as section 17 and inserting in
lieu thereof the following new section:
"SECTION 7. PROCUREMENT REGULATIONS, PROCEDURES AND POLICIES
(a) The Administrator shall provide overall leadership and coordination in
the development and maintenance of the Government-wide procurement regulation
and Government-wide procurement procedures and forms.. Authority to issue the
Government-wide procurement regulation is vested in the Secretary of Defense,
the Administrator for General Services (on behalf of the civil agencies), and the
Administrator of the National Aeronautics and Space Administration. When
agreement cannot be reached on the content of the Government-wide procurement
regulation, the Administrator for Federal Procurement Policy will facilitate the
resolution of conflicting views among those agencies having regulatory authority.
The views of executive agencies shall be solicited and taken into account in the
development of the Government-wide procurement regulation.
(b) Procurement regulations issued by executive agencies shall be in accord
with the Government-wide procurement regulation required by subsection (a) and
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the procurement policy directives issued by the Administrator for Federal
Procurement Policy.".
Sec. 8. Section 8 of the Office of Federal Procurement Policy Act, as amended (41
U.S.C. 407), is amended --
(1) by deleting ", and shall submit a report thereon to the House of
Representatives and the Senate annually and at such other times as may be
necessary for this purpose" in paragraph (1) of subsection (a) and inserting in lieu
thereof a period;
(2) by deleting paragraphs (2), (3) and (4) of subsection (a) in their entirety;
(3) by redesignating subsection (a) of section 8 as subsection (a) of a new
section 11, entitled "FURNISHING INFORMATION TO CONGRESS AND
COMPTROLLER GENERAL";
(4) by deleting "(h)", by deleting the "s" at the end of "Committees", and by
inserting "the Committee on Governmental Affairs" before "of the Senate" in the
first sentence of subsection (b);
(5) by deleting "(b)" after "subsection" in subsection (c) and inserting in lieu
thereof "(a)";
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(6) by redesignating subsections (b) and (c) of section 8 as subsections (a)
and (b), respectively, of a new section 18, entitled "SUBMISSION OF POLICY
MATTER TO CONGRESSIONAL COMMITTEES"; and
(7) by inserting in lieu thereof the following new section:
"SECTION 8. FEDERAL PROCUREMENT DATA SYSTEM
The Administrator will provide for a computer-based Federal Procurement
Data System for collecting, developing, analyzing, and disseminating procurement
data which takes into account the needs of the Congress, the President, executive
agencies, and the private sector. The Federal Procurement Data Center shall be
located in the General Services Administration, which shall operate and maintain
the center as the executive agent for the Administrator.".
Sec. 9. Section 9 of the Office of Federal Procurement Policy Act, as amended (41
U.S.C. 408), is amended by redesignating section 9 as section 19 and by inserting in
lieu thereof the following new section:
"SECTION 9. THRESHOLDS
(a) Every three years, beginning the third year after enactment of this Act,
the Administrator shall review the prevailing costs of labor and materials, as
reflected in selected economic indices, and may:
STAT
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(1) with the concurrence of the Secretary of Defense, revise the
amounts stated in chapter 137 of title 10 and other related procurement
statutes; and
(2) with the concurrence of the Administrator of the General
Services Administration, revise the amounts stated in the Federal Property
and Administrative Services Act of 1949 and other related statutes.
(b) Written notice of any proposed revision shall be transmitted to both
Houses of Congress at least 60 days prior to the effective date of the revision. The
notice shall be accompanied by a detailed report which shall include --
(1) a summary of the reasons for the revision; and
(2) the names and positions of the employees of the Office who will
be made available, prior to such effective date, for consultation regarding
the revision.".
Sec. 10. Section 10 of the Office of Federal Procurement Policy Act, as amended
(41 U.S.C. 409), is amended by deleting section 10 in its entirety.
Sec. 11. Section 11 of the Office of Federal Procurement Policy, as amended
(41 U.S.C. 410), is amended --
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(1) by deleting everything in the first sentence of section 11 after the first
comma and inserting in lieu thereof "such funds as are necessary for each fiscal
year until September 30, 1988.";
(2) by adding "al" at the end of "Government" and by adding "and in the
House to the Committee on Government Operations" after "Affairs" and before the
period in the second sentence of section 11; and
(3) by redesignating section 11 as section 20.
Sec. 12. Section 12 of the Office of Federal Procurement Policy Act, as amended
(41 U.S.C. 411), is amended --
(1) by deleting subsection (a) in its entirety and inserting in lieu thereof the
following new subsection: "(a) The Administrator may delegate and authorize
successive redelegations of any authority, function, or power of the Administrator
under this chapter, other than the basic authority to provide overall leadership in
the development of Federal procurement policies and in the implementation and
maintenance of the Federal procurement system, including the Government-wide
procurement regulation, and the authority conferred by section 408 of this
Chapter, to any executive agency with the consent of such agency or at the
direction of the President.";
(2) by deleting "he determines to be" in subsection (b) and inserting in lieu
thereof "determined";
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(3) by redesignating section 12 as section 10; and
(4) by inserting in lieu thereof the following new section:
"SECTION 12. PROGRESS REPORTS
Within one year after the enactment of this Act, and each year thereafter for
the next three years, the Administrator shall report to the Congress on:
(1) the progress of the Office of Federal Procurement Policy and the
executive agencies in establishing standards for the Federal Procurement
System;
(2) the status of executive agency implementation of the Federal
procurement system standards; and
(3) the status of the Government-wide procurement regulation.".
Sec. 13. Section 14 of the Office of Federal Procurement Policy Act, as amended
(41 U.S.C. 412), is amended --
(1) by deleting "and personnel in his Office", by deleting "discharge" and
inserting in lieu thereof "exercise", and by deleting "his" and inserting in lieu
thereof "the Comptroller General's" in the first sentence of subsection (a);
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(2) by deleting "or his representatives" in the second sentence of subsection
(3) by deleting subsection (b) in its entirety; and
(4) by redesignating section 14 as subsection (b) of the new section 11.
Sec. 14. The Office of Federal Procurement Policy Act, as amended, is further
amended by adding the following new sections:
(1) "SECTION 16. AUTHORITY TO RESCIND REGULATIONS
The Director of the Office of Management and Budget is authorized to deny
or rescind the promulgation of any final rule or regulation of any executive agency
relating to procurement if the Director determines that such rule or regulation is
inconsistent with the policies set forth in this chapter or is inconsistent with any
policy directives issued pursuant to section 405 of this chapter."; and
(2) "SECTION 17. AUTHORITY TO TEST NEW CONCEPTS AND METHODS OF
(a) Section 405(b) of this Act authorizes the Administrator to develop
innovative procurement methods and procedures to be tested by selected executive
agencies. One such test under this authority shall be testing of the new concepts
of competition set forth in the Administration's Proposal for a Uniform Federal
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Procurement System. The Administrator shall work jointly with the heads of the
executive agencies to --
(1) develop guidelines and procedures for testing; and
(2) select the appropriate executive agencies or agency components
to test these concepts.
(b) Such tests shall be conducted in accordance with the parameters set
forth in the Armed Services Competitive Procurement Test Act of 198 and the
Federal Property Competitive Procurement Test Act of 198_. The Administrator
is authorized to deviate from those parameters as necessary to ensure a valid
testing program.
(c) Within thirty (30) months of the effective date of this Act, the
Administrator shall report test findings and results to the Congress and recommend
legislative amendments to implement the new concepts of competition.".
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OFFICE OF FEDERAL PROCUREMENT POLICY ACT AMENDMENTS
INTRODUCTION
The Office of Federal Procurement Policy Act (P.L. 93-400) was amended in 1979
by P.L. 96-83 to require the Office of Federal Procurement Policy (OFPP) to
submit to the Congress proposals for a uniform procurement system, a management
system which would implement and enforce the procurement system, and legisla-
tive changes needed to implement both systems. An integrated proposal for a
Uniform Federal Procurement System (including the management system and
proposed amendments to current procurement statutes) was presented to the
Congress on February 26, 1982.
Complete implementation of the proposed Federal Procurement System will take
several years and will require legislative changes as well as administrative actions
by the executive branch. In this regard, Executive Order 12352 was issued on
March 17, 1982, to initiate executive branch actions. The Office of Federal
Procurement Policy will play a key leadership and coordinating role in implement-
ing procurement reforms. These amendments to the OFPP Act eliminate require
ments that have been accomplished and provide an updated statutory basis f
OFPP's role in implementing the Federal Procurement System and its continui
role in improving Federal procurement.
Section by Section Analysis
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Section 1 states the short title of the bill, the Office of Federal Procurement
Policy Act Amendments of 198.
DECLARATION OF POLICY
Section 2 is a comprehensive statement of the policies which are the framework
for Federal procurement. They are intended to strengthen control of procurement
expenditures, help make procurement more responsive to agency missions, place
procurement on a more systematic, professional and businesslike basis than it is
today and generally establish a foundation for improvements in the procurement
process. This section also adds a national policy that the Federal Government, as a
tax supported activity, should not compete with its own citizen taxpayers, but,
rather, should rely on competitive private enterprise to supply the property and
services it needs whenever competitive sources are available. This country was
founded upon the principle that private enterprise, not the Federal Government,
should conduct business activities. Although an executive policy along these lines
was issued in the 1950's, implementation of the policy has been slow and uneven. It
is time for the executive branch and Congress to face up to this problem and
establish a stable and straightforward national policy.
Section 2(1) draws upon one of the central themes of the Federal Procurement
System proposed to the Congress by pointing out the need to simplify and
streamline the procurement process in order to make it more responsive to agency
needs. Federal Government procurement has become too complex and generally
overburdened due to inadequate planning, detailed Government specifications, a
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myriad of regulations, voluminous paperwork, and lengthy decisionmaking. The
intent of this policy is to favor wherever possible simplified ways of doing business
with the private sector.
Section 2(2) calls out another central theme of the proposed Federal Procurement
System -- expanding competition. The traditional Federal concept of competition
is too narrow and works against normal commercial marketplace incentives. In
order to obtain effective competition, it is the intent of the proposed legislation
that Federal agencies greatly simplify and streamline the process of doing business
with the Government and use new statutory concepts of competition that build on
successful practices of the past.
Section 2(3) calls for a fair proportion of procurements to be placed with small
business concerns. Of particular concern is the shrinking base of suppliers,
especially small businesses, who are the backbone of the national industrial base.
Many of the proposed changes in this legislation would benefit small businesses.
Section 2(4) calls for the continuing development by the agencies of a professional
work force -- another central theme of the proposed Federal Procurement System.
Such agency efforts are needed because of insufficient attention in the past to
management of procurement functions and, in particular, to the procurement work
force. With the work force upgrading must come removal of the procedural
restraints and excessive regulation which has unduly inhibited the exercise of
business judgment and initiative by procurement personnel.
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Section 2(5) would promote fair dealings with the private sector. It is important to
recognize that in our free enterprise system participation in any market, including
the Government market, is voluntary. Therefore, the Government is competing for
industrial resources. To obtain competent contractors, the Government must offer
satisfactory awards and an environment in which private sector managers are
willing to compete. In short, the Government must attract its industrial base and
deal fairly in the marketplace.
Section 2(6) calls for insuring that payment is made to contractors in a timely
manner and only for value received. Contractors are often required to wait
excessive periods of time for payment. When interest rates are high, delays disrupt
normal cash flow and seriously impact contractors' costs and financial stability,
particularly small businesses. Furthermore, late payments by the Government
restrict competition by discouraging contractors from doing business with the
Government. The Government should pay its contractors on time to take
advantage of offered discounts and as a norm no more than 30 days after receipt of
a proper invoice.
Section 2(7) calls for the description of needs whenever possible in terms of
functions to be performed or performance required. Too many needs are described
in precise detail, which limits procurement strategy, restricts competition, and
makes it difficult to take advantage of alternative products or services. It is the
intent of this policy that wherever possible contractors be told what the Govern-
ment requires and not how to do it.
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Section 2(8) would open the door to more effective competition by establishing a
preference for the use of commercial products, over uniquely designed items, to
meet the Government's needs. This will permit the Government to take advantage
of the innovation and efficiencies of the commercial marketplace, including a wide
range of products which have stood the test of a much larger public competition.
This will also avoid the development of duplicative Government products when
commercial products are available.
Section 2(9) states the policy that in embracing the new concepts of the Federal
Procurement System there must be sufficient flexibility to accommodate national
emergencies and wartime as well as peacetime requirements.
Section 2(10) recognizes a new Congressional policy that personal services are to
be obtained in accordance with Civil Service procedures and not by contract. This
deals with the problem of hiring consultants to do Government jobs but who, in
turn, are not accountable for results. Under the new policy, such persons would
have to be hired as Government employees on a limited or permanent basis. This
would reserve truly consultant services to non-personal service contracts in which
there is a well defined end item and no day-to-day supervision required.
Section 2(11) recognizes the broader concept of promoting procurement efficiency,
effectiveness and economy, not only within the Government, but also for those who
are doing business with the Government. It embraces, for example, a major theme
of the Administration's Federal Procurement System proposal that there must be
clear authority and responsibility, meaningful standards for performance measure-
ment, and accountability for results.
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Section 3 reaffirms the congressional findings which were the basis for establishing
the Office of Federal Procurement Policy in 1974, and the need to continue OFPP
as the focal point for establishing Government-wide procurement policies.
Further, it gives OFPP the leadership and coordinating role in implementing and
maintaining the Federal procurement system. This includes resolution of differ-
ences among Executive agencies with respect to the Government-wide regulation.
OFPP will also coordinate the development of Government-wide standards for
procurement performance. Standards are essential to the successful operation of
the procurement system, since they provide a means of measuring performance
results, not only for the system as a whole, but for individual contracting officers,
negotiators, analysts, etc.
Section 4 defines "executive agency," "procurement," "grant or cooperative
agreement," "federal procurement system," and "standards."
The definition of "executive agency" has been amended to clarify that the
definition includes independent regulatory agencies. The definition does not
include other agencies, such as the General Accounting Office or Government
Printing Office, which are not considered to be established within the executive
branch of the Government. The section has also been amended to clarify that in
implementing policies, regulations, or procedures under this Act, the military
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authorities are subject to section 2 of the Department of Defense Reorganization
Act (Public Law 85-599, 63 Stat. 579 (1958)).
The definition of "procurement" has been amended to clarify that it does not apply
to those agency functions which are concerned with mission or program develop-
ment or which are related to an agency's supply function.
The definition of "grant or cooperative agreement" which has been added is
identical to that set forth in the Federal Grants and Cooperative Agreements Act
(Public Law 95-224, %3(5); 41 U.S.C. 505(5)). This definition establishes the scope
of the Administrator's authority to promulgate policies to be followed by recipients
of Federal assistance under section 6 of the Act.
The definition of "federal procurement system" has been added because of the
many references to the procurement system in connection with the role of the
Office of Federal Procurement Policy. The system is the integration of the
procurement process with the management structure and the procurement work
force.
The term "standards" refers to the criteria by which the procurement function will
be measured. Government-wide standards will generally be very broad and will
have universal application -- e.g., classification standards for the procurement
work force, or identification of areas in which agencies should prescribe standards.
Agency standards may vary from agency to agency, or even within an agency, but
it is essential that there be standards throughout the system.
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Section 5 deletes those functions of the Administrator that have already been
accomplished, updates those that are to be continued and adds a new Procurement
System leadership role. It also deletes the current requirements for uniform
procurement system and central management system proposals. These were
furnished to the Congress on February 26, 1982.
Section 5 adds a new section 6 to the Act. Subsection (a) provides for the overall
leadership role of OFPP and then outlines the functions of the Administrator in
more detail. The purpose is to provide continuity of leadership and coordination
while the system is being established by the operating agencies and afterwards
during its maintenance.
Subsection 6(a)(1) continues the current law with respect to the Administrator's
responsibility to develop and issue Government-wide procurement policies. These
policies are to be in accordance with applicable laws and are to be followed by the
Executive agencies and for procurements made under Federal grants or cooperative
agreements. OFPP policy directives will not generally include detailed regulations
and procedures and will, therefore, normally require the executive agencies to
issue implementing regulations.
Subsection 6(a)(2) adds a new role of the Office of Federal Procurement Policy of
coordinating the development of Government-wide standards for the operation of
executive agency procurement systems. As outlined in the Administration's
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Federal procurement system proposal, agency Procurement Executives, in coordi-
nation with OFPP, will examine the various parts of the procurement system to
determine the specific areas where Government-wide standards will be established.
These standards will cover the procurement process, the management system, and
the work force. Once specific areas are identified within each part of the
procurement system, Procurement Executives will normally define the best way to
measure performance and establish specific levels of desired performance in the
agency for each measure. Agency Procurement Executives will also identify
agency-unique areas where standards should be established. Once standards are
fully implemented, agency Procurement Executives will use them to certify the
adequacy of their procurement systems to the agency head. OFPP will not
establish agency standards, but should assist agency Procurement Executives in
developing such standards.
Subsection 6(a)(3) amends Section 6 of Public Law 93-400 (41 U.S.C. %405(d)(2)) to
recognize that responsibility for developing the Government-wide regulation has
been shifted to the Department of Defense, NASA, and GSA. OFPP will continue
to provide overall leadership in the development and maintenance of this Govern-
ment-wide regulation, as well as in the development and maintenance of simplified
Government-wide procedures and forms.
Subsection 6(a)(4) makes minor language changes to the current law. It continues
the current OFPP responsibility, through the Federal Acquisition Institute, of
advancing agency career management programs. The term "career management
programs" replaces similar language in current law. The purpose of these career
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programs -- to develop a professional procurement work force -- has been added.
The primary responsibility for developing a professional work force in each agency
rests with the agency Procurement Executives.
Subsection 6(a)(5) continues OFPP's current responsibility of providing leadership
and coordination in the formulation of executive branch positions on legislation
relating to procurement.
Subsection 6(a)(6) amends the current law to recognize that the Federal
Procurement Data System has been established and is now operating. OFPP's new
role will be one of improving and maintaining this data system, especially to
improve the quality of the data collected. In addition, OFPP will explore with the
agencies potential opportunities for agency use of the Federal Procurement Data
System to support day-to-day management and operations. For example, the Data
System could be used by an agency to collect information for its use to measure
specific areas of system performance.
Subsection 6(a)(7) revises OFPP's role in procurement research from one of
conducting research of related laws, policies, methods, regulations, procedures and
forms to one of promoting and coordinating such research. Deleting the conduct of
research is consistent with OFPP's non-operational role.
Subsection 6(a)(8) revises OFPP's function in connection with the recommendations
of the Commission on Government Procurement from one of simply reviewing to
one of either taking action to implement them or to reject them and advise
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Congress of the reason for rejection. The recommendations are some ten years old
and it is time to resolve the remaining open ones and bring this matter to a close.
Subsection 6(a)(9) states that the Administrator shall establish criteria and
procedures to ensure an effective and timely method of soliciting the viewpoints of
interested parties in the development of procurement policies and regulations.
The purpose of this subsection is to clarify and restate the intent of Congress that
there be opportunity for interested parties to participate effectively in the
development of procurement policies and regulations. This is not limited to
policies developed by OFPP and the solicitation of viewpoints by OFPP. Rather, it
is intended that OFPP will establish Government-wide procedures and criteria
which will apply to any procurement policies and regulations which significantly
affect the private sector. It is intended that these criteria and procedures be
uniformly implemented through the Government-wide procurement regulation
insofar as they apply to that regulation or to agency implementing regulations.
Subsection 6(b) gives the Administrator new authority to develop innovative
procurement methods and procedures to be tested by selected agencies notwith-
standing any other provisions of law. Such tests will require the concurrence of the
OMB Director and the head of the agency or agencies concerned. OFPP will also
have to notify the Congress 60 days in advance when such tests will require waiver
of existing provisions of law and include such information as a description of the
planned test, its scope and purpose, the executive agencies involved, and what
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actions are planned when the test is completed. The Administrator is expected to
use this new test authority to make continuous improvements in the Federal
procurement system. One of the earliest tests, in addition to the test in section
17, will be the use of highly abbreviated and simplified procedures for the
procurement of commercial products and services.
Subsection 6(c) amends the current subsection (e) of Section 6, Public Law 93-400
(41 U.S.C. 405(e)) on consultations with executive agencies in the development of
the Federal procurement system. The new language recognizes that this system
development is now completed. It has been broadened to provide for consultation
with the executive agencies in connection with the performance of the Admin-
istrator's functions under this Act, including operation and maintenance of the new
system. To accomplish this, the Administrator may designate an executive agency
or agencies, establish advisory committees or interagency groups, or otherwise use
agency representatives or personnel.
Finally, Section 5 adds a new subsection (3) to "Noninterference with Executive
Agencies" (section 14). This new subsection 3 states that the authority of the
Administrator shall not be construed to authorize promulgation of policies which
impair an agency's ability to meet its mission responsibilities. The Committee does
not intend by this subsection to allow agencies to unilaterally exempt themselves
from policies issued by the Administrator. Rather, it is intended to give the
agency head an avenue of appeal in the event of an OFPP policy that does truly
impair the agency's mission responsibilities.
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UNIFORM FEDERAL PROCUREMENT REGULATIONS AND PROCEDURES
Section 6 deletes Sec. 222 of Act of October 24, 1978 (41 U.S.C. 1105a), which
authorized the Administrator to promulgate a single, simplified uniform procure-
ment regulation. This section has been replaced by section 7 of the Amendments.
PROCUREMENT REGULATIONS, PROCEDURES AND POLICIES
Section 7 adds new section 7 to the Act. Subsection (a) states that the
Administrator shall provide overall leadership and coordination for the develop-
ment and maintenance of a Government-wide procurement regulation as well as
procedures and forms. It recognizes the regulatory authority of the Secretary of
Defense, the Administrator for General Services, and the Administrator of the
National Aeronautics and Space Administration. The intent is that these agencies
will jointly issue the Federal Acquisition Regulation after soliciting and taking into
account the views of executive agencies. The Administrator for Federal Procure-
ment Policy, under its overall policy directive authority, will facilitate the
resolution of conflicting views among those agencies having regulatory authority.
The Congress intends that DOD, GSA, and NASA, in exercising this authority will
work together to ensure to the maximum extent practicable, that regulations,
procedures and forms are promulgated in a single, simplified Government-wide
regulation. Agency regulations implementing or supplementing the Government-
wide regulation shall be limited to unique agency requirements. It is further
intended that the needs and views of other agencies be considered in developing the
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Government-wide regulation. They should be given the opportunity to participate
in developing and maintaining the regulation whenever practical. Instances of
substantive disagreement on the content of the Government-wide regulation should
be rare, but if these agencies are unable to resolve conflicting views on a procure-
ment regulatory matter, the Administrator for Federal Procurement Policy is
authorized to facilitate the resolution. This may involve a policy decision which
the Administrator has authority to make, or the arbitration of differences, or
arranging for resolution by the Director of OMB.
Section 7(b) creates a system of regulations by requiring that all agency
procurement regulations shall be in accord with the Government-wide procurement
regulation (the Federal Acquisition Regulation) and with the procurement policy
directives issued by the Administrator for Federal Procurement Policy.
This subsection reiterates the intent of Congress that agencies shall not issue
procurement regulations that conflict with the single Government-wide regulation.
The Government-wide regulation is intended to serve most needs, and should only
be supplemented for unique agency requirements or internal management-type
procedures. Further, both the Government-wide regulation and agency unique
regulations must conform to policies issued by the Administrator for Federal
Procurement Policy.
FURNISHING INFORMATION TO CONGRESS
Section 8 amends subsection 8(a) of the Office of Federal Procurement Policy Act
and redesignates it as section 11(a). In the interests of reducing paperwork, this
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section has been amended to delete the requirement for an annual report from the
Administrator to the Congress. Nevertheless, the Committee wishes to emphasize
that this section requires the Administrator to continue to keep the Congress fully
and currently informed by providing it with timely information concerning the
activities of the Office.
SUBMISSION OF POLICY MATTERS TO CONGRESSIONAL COMMITTEES
Section 8 amends subsections (b) and (c) of section 8 of the Office of Federal
Procurement Policy Act by redesignating them as section 18 and by including the
name of the House Committee to which policy notification should be referred. It
provides for advance notification to appropriate committees of policy matters,
including the reasons for issuing the policy and the names of OFPP people to be
consulted regarding the policy.
FEDERAL PROCURMENT DATA SYSTEM
Section 8 states that the Federal Procurement Data Sytem (FPDS), which was
established under P.L. 93-400, as amended by P.L. 96-83, will continue to be run by
the General Services Administration as the executive agent of the Administrator.
It is the intent of this Section that the data system continue to be operated by GSA
and that the Administrator provide the oversight to ensure that it takes into
account the data needs of the Congress, the President, executive agencies, and the
private sector. GSA, as executive agent, will operate the data system under its
current design. Because of the impact data changes would have on agencies'
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procurement and data processing organizations, any modification to the FPDS
design must be approved by the Administrator.
Section 9 adds a new section to the Office of Federal Procurement Policy Act
which authorizes the Administrator to adjust the small purchase ceiling. Section
2304(i) of the Armed Services Procurement Act and Section 302(g) of the Federal
Property and Administrative Services Act set a ceiling for small purchases at
$25,000. This ceiling, which started at $1000 in 1947, has been adjusted by Congress
periodically to reflect inflation. Authorizing the Administrator for Federal
Procurement Policy to adjust this ceiling to reflect changes in the economy will
preclude the necessity of bringing this matter back to Congress every few years.
Tying the adjustment to selected economic indices is a safeguard against arbitrary
adjustments, and limiting the adjustments to not more often than every three years
will ensure adequate stability.
Section 10 deletes Section 10 of Public Law 93-400 (41 U.S.C. 40a) in its entirety.
This section provided that procurement policies, regulations, procedures, and forms
continued in effect until repealed, amended, or suspended pursuant to the adoption
of the uniform procurement system.
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AUTHORIZATION OF APPROPRIATIONS
Section 11 would amend the Act's current provisions for authorizing OFPP
appropriations (Sec. 11 of Public Law 93-400, 41 U.S.C. %+410) in three ways:
1. It removes the dollar ceiling in present law as not being relevant;
2. It extends the life of the OFPP for 5 years to cover the expected
implementation phase of the Federal Procurement System; and
3. It removes the reference to the Federal Acquisition Institute, which will be
assigned to an operating agency rather than be an integral part of the OFPP.
The new location is more in tune with the Institute's operating nature. The
Institute will still have the leadership responsibility for coordinating Govern-
ment-wide aspects of agency career management programs, spearheading
training in new policies, and working with the Office of Personnel Manage-
ment on any obstacles to professional development of the Federal procure-
ment work force.
This section has also been amended to include the name of the Committee of the
House to which authorization legislation shall be referred.
DELEGATION OF AUTHORITY BY ADMINISTRATOR
Section 12 redesignates former section 12 as section 10 which permits the
Administrator to delegate certain authorities and functions, except the basic
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authority to provide overall leadership in the development of Federal procurement
policies, and in implementing and maintaining the Federal procurement system.
Thus, the Administrator may delegate authorities and functions, for example, to
interagency groups, or to an individual agency acting as executive agent for OFPP.
The Administrator may also delegate functions in connection with developing
Federal procurement policy, but must retain overall direction of such efforts.
Section 12 adds a new section 12 to the Office of Federal Procurement Policy Act
which requires the Administrator to keep the Congress informed on the overall
progress of the Federal procurement system for the first four years after the
enactment of this bill's amendments.
Subsection (1) requires that Congress be kept informed annually on the progress of
establishing standards for the operation and performance of the Federal procure-
ment system. Government-wide standards are the joint responsibility of the OFPP
and the executive agencies. Agency unique standards, on the other hand, are the
sole responsibility of the individual agencies. OFPP is to keep the Congress
informed on the progress of both.
Subsection (2) requires that the Administrator keep the Congress informed on the
status of agency-by-agency implementation of the new procurement system
standards. In this regard, amendments to the Armed Services and Federal Property
Acts require that executive agencies implement procurement standards promptly
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after issuance. To fulfill this requirement, OFPP and agency Procurement
Executives must continuously maintain good understandings of expected results of
new standards and actual progress made in implementing them.
Subsection (3) requires that the Administrator keep the Congress informed on the
status of the system of regulations; i.e., the single Government-wide procurement
regulation and the agency implementing regulations. The ultimate goal here is a
further streamlining of the contemplated Government-wide regulation to eliminate
many of the procedural regulations or use them as guidance in expanded training
programs, handbooks or visual aids. The goal for achieving this reduced regulation
is two years after the enactment of this Act.
FURNISHING INFORMATION TO THE COMPTROLLER GENERAL
Section 13 amends section 14 of the Office of Federal Procurement Policy Act and
redesignates it as section 11(b). This section continues the current requirements to
furnish information to the Congress and the Comptroller General with minor
revision. It requires that the Administrator keep the Congress and its duly
authorized committees fully and currently informed of the major activities of the
Office of Federal Procurement Policy. It deletes the current requirement for an
annual report to the House of Representatives and the Senate and substitutes for
that requirement the Federal Procurement System progress reports discussed above
under section 12. This section also continues the current law to provide records
access to the Comptroller General and to provide such information as he may
require from time-to-time for the exercise of his responsibilities.
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AUTHORITY TO RESCIND REGULATIONS
Section 14 adds a new section 16 to the Office of Federal Procurement Policy Act
which authorizes the Director of the Office of Management and Budget to deny or
rescind the promulgation of any final rule or regulation of any executive agency
relating to procurement if the Director determines that such rule or regulation is
inconsistent with the policies set forth in the Office of Federal Procurement Policy
Act or is inconsistent with any policy directive of the Administrator. Recision
authority at this level in the Exeuctive Office of the President is intended to
ensure an effective and responsive Federal procurement system.
This section continues an authority previously given to the Director of OMB to
ensure that agency regulations conform to procurement policies issued by OFPP.
This authority should only have to be invoked rarely if ever. However, Congress
believes that OMB should have such authority as a safeguard in the public interest.
ADMINISTRATIVE POWERS
Provisions of the current law which enable the Administrator for Federal
Procurement Policy to call on the agencies for assistance, both in terms of
resources and access to information, in developing Federal procurement policies
(Section 7 of the OFPP Act; 41 U.S.C. 406) have not been amended. Some agencies
have expressed the concern that these provisions give OFPP unlimited authority to
augment its staff which may impair agency mission performance. Years of
experience under the current law have not resulted in this kind of excess. Rather,
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OFPP has judiciously utilized interagency task groups, short term details, etc., to
make sure that policies were developed with current operating needs in mind. The
interest of this section is to continue to provide for meaningful participation by the
agencies in this process.
AUTHORITY TO TEST NEW CONCEPTS AND
METHODS OF COMPETITION
Section 17 provides authority and direction for a test of the new concepts and
methods of competition described in Chapter 2, Section 4 of the proposal for a
Uniform Federal Procurement System. The parameters of this test are further set
forth in special legislation -- the Armed Services Competitive Procurement Test
Act of 198 and the Federal Property Competitive Procurement Test Act of
198 -- which has been proposed by the Administration.
The Committee believes that the new concepts and method of competition are very
viable, but because of concern by some agencies that such a change should be
tested before it becomes law, the Committee is providing for that test. It is
expected that the test will include a broad range of procuring activities, so that
the results will provide a firm basis for decision with respect to further legislation.
While the test should be conducted along the parameters set forth, the
Administrator is authorized to vary these parameters as necessary to ensure a fair
and valid test.
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To amend chapters 137 and 141 of Title 10 of the United States Code, to
simplify the procurement process, to strengthen management of the procurement
system and the procurement work force, to provide testing of new contracting
procedures which will expand the use of competition in Government contracting
and to impose certain requirements on the award of non-competitive contracts, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States in Congress assembled that this Title shall be known as the "Armed Services
Procurement Act Amendments of 198.11
(1) by deleting "(including weapon systems and associated items)" in the
second sentence of paragraph (1) of subsection (a);
(2) by deleting "such" and by inserting "and services" after "property" in
the last sentence of paragraph (1) of subsection (a);
(3) by deleting "advance" and by deleting "weapon" and inserting in lieu
thereof "major" in paragraph (2) of subsection (a); and
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(4) by deleting subsection (b) in its entirety and inserting in lieu thereof the
following new subsection:
"(b) Further, it is the policy of the Congress that the Federal
Government shall, with due regard to agency mission needs in support of
national defense, rely on competitive private enterprise to supply needed
property and services, and that the system for procurement of property and
services by the Federal Government shall --
(1) promote responsiveness to agency mission needs by
simplifying and streamlining procurement processes;
(2) promote effective competition;
(3) provide for a fair proportion of procurements to be placed
with small business concerns;
(4) support the continuing development of a professional work
force;
(5) promote fair dealings with the private sector;
(6) ensure payment is made in a timely manner and only for
value received;
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(7) require the description of needs, whenever possible, in terms
of functions to be performed or performance required; -
(8) establish a preference for the use of commercial products to
meet the Government's needs;
(9) ensure the development of procurement policies that will
accommodate national emergencies and wartime as well as peacetime
requirements;
(10) require that personal services are obtained in accordance
with civil service procedures and not by contract; and
(11) otherwise promote procurement efficiency, effectiveness
and economy within the Government and for those who do business with
the Government.".
Sec. 103. Section 2302 of Title 10 of the United States Code is amended by
deleting section 2302 in its entirety and inserting in lieu thereof the following new
section:
"SEC. 2302. DEFINITIONS
In this chapter --
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(1) The term 'agency head' shall mean the head or any assistant head
of an executive agency and may, at the option of the agency- head, include
the chief official of any principal organization of such agency.
(2) 'Executive agency' means any executive department, military
department, wholly-owned Government corporation, or independent
establishment in the executive branch of the Government, or any independent
regulatory agency.
(3) The term 'Federal agency' means any executive agency or any
establishment in the legislative or judicial branch of the Government (except
the Senate, the House of Representatives and any activities under the
direction of the Architect of the Capitol).
(4) 'Person' means any individual, corporation, firm, group, State or
local government, or other entity, foreign or domestic.
(5) 'Procurement' includes all stages of the process of acquiring
property and services, beginning with how needs are described and ending
with the close out of the contractual instrument.
(6) 'Property' means personal property (products) and leaseholds and
other interests therein, and construction, alteration or repair of real
property, but excludes real property and leaseholds and other interests
therein.
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(7) 'Services' means labor, time, or effort furnished under a
nonpersonal services contract.". -
Sec. 104. Section 2303 of Title 10 of the United States Code is amended --
(1) by deleting "the purchase, and contract to purchase" in subsection (a)
and inserting in lieu thereof "procurement"; and
(2) by redesignating paragraphs (1) through (5) as paragraphs (2) through (6),
respectively, and by inserting the following new paragraph before paragraph (2) in
subsection (a): "(1) The Department of Defense.".
Sec. 105. Section 2304 of Title 10 of the United States Code is amended --
(1) by deleting "324 and 325a" and inserting in lieu thereof "328(a) and 330"
in paragraph (3) of subsection (f); and
(2) by adding at the end of section 2304 a new subparagraph:
"(i) Small purchases. Purchases not expected to exceed $25,000 or an
amount established by the Administrator for Federal Procurement Policy
pursuant to section 9 of the Office of Federal Procurement Policy Act
Amendments of 198- (41 U.S.C. 408) are small purchases. A proposed
procurement shall not be divided into smaller procurements primarily for the
purpose of using the small purchase procedures. Procurement regulations
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shall include special simplified procedures and forms for small purchases, to
facilitate making the purchases efficiently and economically.".
Sec. 106. Section 2306 of Title 10 of the United States Code is amended --
(1) by inserting "in excess of the ceiling for small purchases in section
2304(i)" before "negotiated" in the first sentence of subsection (b);
(2) by deleting the first, third, and last sentences of subsection (d);
(3) by deleting "items of supply" in paragraph (1) of subsection (g) and
inserting in lieu thereof "property";
(4) by deleting "military" in subparagraph (1)(B) of subsection (g);
(5) by deleting "base" in subparagraph (1)(D) of subsection (g) and inserting
in lieu thereof "other";
(6) by deleting "weapon" each place it appears in the first sentence of
paragraph (1) of subsection (h) and inserting in lieu thereof "major";
(7) by deleting "security" in subparagraph (1)(A) of subsection (h) and
inserting in lieu thereof "interest";
(8) by deleting "Department of Defense" in subparagraph (1)(C) of
subsection (h) and inserting in lieu thereof "agency";
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(9) by deleting subparagraph (2)(A) of subsection (h) in its entirety and
inserting in lieu thereof the following new subparagraph: "(2)(A) Regulations in
accordance with section 2318 shall be prescribed which will promote the use of
multiyear contracting as authorized by paragraph (1) in a manner that will allow
the most efficient use of multiyear contracting.";
(10) by deleting "defense" in subparagraph (2)(C) of subsection (h);
(11) by deleting "in the Department of Defense" in subparagraph (2)(D) of
subsection (h);
(12) by deleting "weapon" in paragraph (4) of subsection (h) and inserting in
lieu thereof "major";
(13) by deleting paragraph (7) of subsection (h) in its entirety, and by
redesignating subsection (8) as subsection (7); and
(14) by adding at the end of subsection (h), the following new subsection:
"(i) When so specified in an Appropriation Act, and when multiyear contracting is
not feasible or desirable, contracts for support services may be entered into using
appropriations available for obligation only within the fiscal year for which
appropriated, for periods not in excess of twelve months, beginning at any time
during the fiscal year.".
Sec. 107. Section 2307 of Title 10 of the United States Code is amended by
deleting subsection (d) in its entirety and substituting in lieu thereof: "(d) In any
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contract providing for progress payments, the Government shall have title to all
property acquired or produced by the contractor and allocable or properly
chargeable to the contract. Notwithstanding any other provisions of law, that title
may not be divested by any action of the contractor or proceeding in bankruptcy or
encumbered by any lien or security interest.".
Sec. 108. Section 2313 of Title 10 of the United States Code is amended --
(1) by inserting "in excess of the ceiling for small purchases in section
2304(i)" before "negotiated" in subsection (b); and
(2) by deleting the sentence that appears at the end of subsection (c) after
paragraph (2).
Sec. 109. Section 2314 of Title 10 of the United States Code is amended by
deleting "6, 6a" and inserting in lieu thereof "8".
Sec. 110. Section 2315 of Title 10 of the United States Code is amended by
deleting "79511 and inserting in lieu thereof "759".
Sec. 111. Chapter 137 of Title 10 of the United States Code is amended by adding
the following new section:
"SEC. 2316. MANAGEMENT RESPONSIBILITIES
(a) The Secretary of Defense, jointly with the Administrator for
General Services and the Administrator of the National Aeronautics and
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Space Administration, shall develop, issue and maintain a Government-wide
procurement regulation and ensure that the views of the executive agencies
are considered.
(b) Heads of agencies shall:
(1) establish clear lines of authority, accountability, and
responsibility for procurement decisionmaking;
(2) assign responsibility for management direction of the
procurement system and provide that system standards are imple-
mented promptly; and
(3) develop and maintain procurement career management
programs to ensure an adequate professional work force.".
Sec. 112. Chapter 137 of Title 10 of the United States Code is amended by adding
"Sec. 2316. Management Responsibilities" at the end of the table of sections.
Sec. 113. Section 2393 of Title 10 of the United States Code is amended by
deleting in paragraph (1) of subsection (a) "the Secretary of a military department"
and inserting in lieu thereof "the Secretary of the Department of Defense, the
Secretary of a military department, the Commandant of the Coast Guard, and the
Administrator of the National Aeronautics and Space Administration (hereinafter
the "Secretary")".
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Sec. 201. This Title shall be known as the "Armed Services Competitive
Procurement Test Act of 198.11
Sec. 202. Authority to test new concepts and methods of competition
Section 6 of the Office of Federal Procurement Policy Act of 1974, as
amended (41 U.S.C. 405(b)), authorizes the Administrator for Federal Procurement
Policy (hereinafter the "Administrator") to develop innovative procurement
methods and procedures to be tested by selected executive agencies. The
Administrator is required to test the new concepts of competition as set forth in
the Administration's Proposal for a Uniform Federal Procurement System, by
working jointly with the heads of the executive agencies to --
(1) develop guidelines and procedures for testing; and
(2) select the appropriate executive agencies or agency components
to conduct tests of these concepts.
Sec. 203. Test parameters
Such tests shall be conducted within the following parameters:
(a) Competition
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(1) Bids shall be solicited from prospective sources to ensure
effective competition in obtaining needed property or services. Except
where circumstances require the use of detailed Government specifications,
an agency shall use functional specifications to describe its needs.
(2) In noncompetitive procurement, the agency must be assured that
the property or services are obtained at fair and reasonable prices. Noncom-
petitive procurement of property and services is appropriate only when --
(A) the property or service is available from a single source and
no competitive alternatives are available;
(B) a serious emergency will not permit the delay inherent in
obtaining competitive bids;
(C) an award must be directed to a specified person or
(1) in order to create or maintain an essential industrial
capability;
(2) for purposes of industrial mobilization; or
(3) because it is impracticable or uneconomical to obtain
competition for follow-on procurements;
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(D) a procurement source is required by international agreement
or for directed procurements for foreign governments;
(E) a procurement is required by statute to be obtained from or
through another Federal agency or a specified person;
(F) disclosure to more than one person of the property or
service to be obtained would jeopardize the national security; or
(G) it is impracticable to obtain competition.
(3) Each noncompetitive procurement in excess of the ceiling for
small purchases in section 2304(i) will require written approval by an agency
official at a level higher than the contracting officer; a determination under
(2)(g) shall not be made below the level of the Secretaries of the Department
of Defense, the Department of the Army, the Department of the Navy or the
Department of the Air Force, the Commandant of the Coast Guard, or the
Administrator of the National Aeronautics and Space Administration, who
shall not delegate that authority below the Assistant Secretary or equivalent
level;
(b) Evaluation of bids
(1) A bid to supply property or services shall be evaluated based on --
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(A) the offered price of the property or services and other
price-related factors;
(B) the total cost to the Government, including purchase price
and maintenance or operating costs over the useful life of the property
or services; or
(C) the offered price or cost of the property or services and
other factors, such as technical or management capability.
(2) Bids shall be evaluated without discussions whenever the
Government's requirements and the terms and conditions of the proposed
contract can be sufficiently described in the solicitation to allow the timely
preparation and evaluation of bids on a common basis without the need to
hold discussions with bidders.
(3) Solicitations shall provide for evaluation with discussions
whenever it may be necessary to discuss the Government's requirements or
the terms and conditions of the proposed contract with bidders after receipt
of bids but prior to award of the contract. For procurements in excess of the
ceiling for small purchases in section 2304(i), written or oral discussions shall
be conducted with all responsible bidders who submit bids within a competi-
tive range, price and other factors considered: Provided, however, that the
requirements of this subsection with respect to written or oral discussions
need not be applied to procurements in implementation of authorized set-
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aside programs or to procurements where it can be clearly demonstrated
from the existence of effective competition or accurate prior cost exper-
ience with the product or service, that acceptance of an initial bid without
discussion would result in fair and reasonable prices and where the request
for bids notifies all bidders of the possibility that award may be made without
discussion.
(4) The evaluation methods described in subsections (2) and (3) may
be combined whenever it would be beneficial to conduct the evaluation of
bids in successive steps; and
(c) Solicitation and award of contracts
(1) Each solicitation shall set forth and describe the relative
importance of factors reasonably expected to have a significant bearing on
selection for award.
(2) When the solicitation notifies potential bidders that bids will be
evaluated without discussions, bids shall be opened publicly at a time and
place stated in the solicitation. Such bids may not be withdrawn or modified
after public opening, within the time stated in the solicitation for award,
unless permitted by the agency concerned because of a mistake in bidding.
(3) Award shall be made to the responsible bidder whose bid conforms
to the solicitation and is most advantageous to the United States on the basis
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of price (including price-related factors), total cost to the Government, or
other evaluation factors in addition to price or cost. Notification to all
unsuccessful bidders shall be made with reasonable promptness. All bids may
be rejected if the head of the agency determines that rejection is in the
public interest.
(4) If any bid received evidences a violation of the antitrust laws, the
head of the agency shall refer the bid to the Attorney General for
appropriate action.
The Administrator is authorized to grant deviations from these parameters,
as necessary to ensure a valid testing program.
Sec. 205. Test period
The Administrator is required within thirty (30) months of the effective date
of the Office of Federal Procurement Policy Act Amendments of 198_ to report
test findings and results to the Congress and recommend legislative amendments to
implement the new concepts of competition.
For purposes of this Title, the term "functional specification" means a
description of the intended use of property or services required by the Government.
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A functional specification may include a statement of the qualitative nature of the
property or services required, and, when necessary, may set forth those minimum
essential characteristics and standards to which such property or services must
conform to satisfy the intended use.
TITLE III
AMENDMENTS
(1) Section 2356 of title 10 of the United States Code is amended by
deleting "negotiate" in the first sentence of subsection (b) and inserting in lieu
thereof "award" and by deleting the last sentence of subsection (b);
(2) Section 12 of the Act of June 30, 1936, as amended (41 U.S.C. 45), is
further amended by deleting section 12 and inserting in lieu thereof the following
new section: "SEC. 12. The provisions of this Act requiring the inclusion of
representations with respect to minimum wages shall apply only to purchases or
contracts relating to such industries as have been the subject matter of a
determination by the Secretary of Labor.";
(3) The following Acts shall not apply to a contract or subcontract which
does not exceed $25,000 or the amount established for small purchase procedures
under this Act:
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(a)
section 1 of the Act of dune 30, 1936, as amended (41 U.S.C. 35);
(b)
(c)
(d)
section 2631 of title 10 of the United States Code;
section 2207 of title 10 of the United States Code;
section 2 of the Act of December 22, 1975 (89 Stat. 874;
42
U.S.C. 6201);
(e) section 6002 of the Solid Waste Disposal Act of 1965, as amended
(42 U.S.C. 6962);
(f) sections 2 and 3 of the Act of March 3, 1933 (47 Stat. 1520; 41
U.S.C. lOa-b), and section 633 of the Act of October 29, 1949 (63 Stat. 1024;
41 U.S.C. 10d);
(g) section 15 of the Act of October 27, 1972, as amended (42 U.S.C.
4914);
(h) section 436 of title 18 of the United States Code;
(i) section 431 of Title 18 of the United States Code;
(j) section 21 of the Act of February 15, 1980 (94 Stat. 43; 49 U.S.C.
1517); and
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(k) section 874 of title 18 of the United States Code.
TITLE IV
REPEALS
Chapter 135 and sections 4535 and 9535 of title 10 of the United States.
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ARMED SERVICES PROCUREMENT ACT AMENDMENTS OF 1981
Section-by-Section Analysis
Section 101 states the short title of the bill, the Armed Services Procurement Act
Amendments of 198.
Section 102 amends subsection 2301(a)(1) to make it clear that the statement of
multiyear contracting policy covers the procurement of services and any type of
property. Subsection (a)(2) also has been clarified by stating that advance
procurement of any type of major system should be entered into in a manner to
achieve economic-lot purchases and more efficient production rates. Formerly,
subsection (a)(2) referred only to the advance procurement of weapon systems.
Subsection 2301(b) has been added. It is a comprehensive statement of the policies
which are the framework for Federal procurement. They are intended to
strengthen control of procurement expenditures, help make procurement more
responsive to agency missions, place procurement on a more systematic, profes-
sional and businesslike basis than it is today and generally establish a foundation
for improvements in the procurement process. This section also adds a national
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policy that the Federal Government, as a tax supported activity, should not
compete with its own citizen taxpayers, but, rather, should rely on competitive
private enterprise to supply the property and services it needs whenever competi-
tive sources are available. This country was founded upon the principle that
private enterprise, not the Federal Government, should conduct business activities.
Although an executive policy along these lines was issued in the 1950's,
implementation of the policy has been slow and uneven. It is time for the
executive branch and Congress to face up to this problem and establish a stable and
straightforward national policy.
Subsection b(l) draws upon one of the central themes of the Federal Procurement
System proposed to the Congress by pointing out the need to simplify and
streamline the procurement process in order to make it more responsive to agency
needs. Federal Government procurement has become too complex and generally
overburdened due to inadequate planning, detailed Government specifications, a
myriad of regulations, voluminous paperwork, and lengthy decisionmaking. The
intent of this policy is to favor wherever possible simplified ways of doing business
with the private sector.
Subsection (b)(2) calls out another central theme of the proposed Federal
Procurement System -- expanding competition. The traditional Federal concept of
competition is too narrow and works against normal commercial marketplace
incentives. In order to obtain effective competition, it is the intent of the
proposed legislation that Federal agencies greatly simplify and streamline the
process of doing business with the Government and use new statutory concepts of
competition that build on successful practices of the past.
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Subsection (b)(3) calls for a fair proportion of procurements to be placed with small
business concerns. Of particular concern is the shrinking base of suppliers,
especially small businesses, who are the backbone of the national industrial base.
Many of the proposed changes in this legislation would benefit small businesses.
Subsection (b)(4) calls for the continuing development by the agencies of q
professional work force -- another central theme of the proposed Federal Procure-
ment System. Such agency efforts are needed because of insufficient attention in
the past to management of procurement functions and, in particular, to the
procurement work force. With the work force upgrading must come removal of the
procedural restraints and excessive regulation which has unduly inhibited the
exercise of business judgment and initiative by procurement personnel.
Subsection (b)(5) would promote fair dealings with the private sector. It is
important to recognize that in our free enterprise system participation in any
market, including the Government market, is voluntary. Therefore, the Govern-
ment is competing for industrial resources. To obtain competent contractors, the
Government must offer satisfactory awards and an environment in which private
sector managers are willing to compete. In short, the Government must attract its
industrial base and deal fairly in the marketplace.
Subsection (b)(6) calls for insuring that payment is made to contractors in a timely
manner and only for value received. Contractors are often required to wait
excessive periods of time for payment. When interest rates are high, delays disrupt
normal cash flow and seriously impact contractors' costs and financial stability,
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particularly small businesses. Furthermore, late payments by the Government
restrict competition by discouraging contractors from doing business with the
Government. The Government should pay its contractors on time to take
advantage of offered discounts and as a norm no more than 30 days after receipt of
a proper invoice.
Subsection (b)(7) calls for the description of needs whenever possible in terms of
functions to be performed or performance required. Too many needs are described
in precise detail, which limits procurement strategy, restricts competition, and
makes it difficult to take advantage of alternative products or services. It is the
intent of this policy that wherever possible contractors be told what the Govern-
ment requires and not how to do it.
Subsection (b)(8) would open the door to more effective competition by establishing
a preference for the use of commercial products, over uniquely designed items, to
meet the Government's needs. This will permit the Government to take advantage
of the innovation and efficiencies of the commercial marketplace, including a wide
range of products which have stood the test of a much larger public competition.
This will also avoid the development of duplicative Government products when
commercial products are available.
Subsection (b)(9) states the policy that in embracing the new concepts of the
Federal Procurement System there must be sufficient flexibility to accommodate
national emergencies and wartime as well as peacetime requirements.
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Subsection (b)(10) recognizes a new Congressional policy that personal services are
to be obtained in accordance with Civil Service procedures and not by contract.
This deals with the problem of hiring consultants to do Government jobs but who, in
turn, are not accountable for results. Under the new policy, such persons would
have to be hired as Government employees on a limited or permanent basis. This
would reserve truly consultant services to non-personal service contracts in which
there is a well defined end item and no day-to-day supervision required.
Subsection (b)(11) recognizes the broader concept of promoting procurement
efficiency, effectiveness and economy, not only within the Government, but also
for those who are doing business with the Government. It embraces, for example, a
major theme of the Administration's Federal Procurement System proposal that
there must be clear authority and responsibility, meaningful standards for perform-
ance measurement, and accountability for results.
Section 103 amends section 2302 and defines "agency head", "executive agency",
"Federal agency", "person", "procurement," "property", and "services".
"Agency head" is defined to include the head of an agency, an assistant head of an
agency, and, at the option of an agency head, the chief official of any principal
organization of an agency. The term "assistant head" would include an Under-
secretary or Assistant Secretary of a department, an Associate or Assistant
Administrator of an agency, or an Executive Director for Operations of a
regulatory commission.
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"Executive agency" means any department, military department, wholly-owned
Government corporation, or independent establishment in the Executive branch of
the Government as these terms are defined in the United States Code. The term
also includes an independent regulatory agency, but it does not include the General
Accounting Office.
"Federal agency" means any executive agency or any establishment in the
legislative or judicial branch except the Senate, the House of Representatives, or
any activities under the direction of the Architect of the Capitol. The term
includes the General Accounting Office and the Government Printing Office.
"Person" means any individual, corporation, firm, State or local government,
or other foreign or domestic entity.
"Procurement" is defined to include all stages of the process of acquiring
goods and services. This process begins when the Government describes the
property or service it wishes to obtain and ends when the contractual instrument(s)
used to obtain the property or service are administratively closed out. Procure-
ment functions do not include supply functions nor the process for determining
which agency programs are to be established.
"Property" refers to personal property and leaseholds and other interests
therein. As used elsewhere in the statute, the term "products" means property.
The term does not include real property and other interests therein.
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The term "services" refers to labor, time, or effort furnished under a
nonpersonal services contract. Contracts for personal services are not included
within the definition and are not authorized by this Act.
APPLICABILITY
Section 104 amends subsection 2303(a) to clarify that the Act applies to the
Department of Defense and agencies under its sponsorship, such as the Defense
Logistics Agency. The broader term "procurement" has been substituted for the
phrase "the purchase and contract to purchase" to clarify the applicability of the
Act.
Section 105 amends subsection 2304(f)(3). The reference to the Eight-Hour Law (40
U.S.C. %324, 325a) has been amended to reflect the relevant provisions of the
Contract Work Hours and Safety Standards Act (40 U.S.C. %328(a), 330), which
replaces the Eight-Hour Law.
Section 105 also adds a new subparagraph (i) to section 2304. The purpose of this
section is to provide a basis in statute for special simplified procedures for small
purchases. There were over 18 million procurement actions in fiscal year 1981 of
which over 17.5 million were below $25,000. Yet these account for only about 10%
of the total FY 81 expenditures of $134 billion. Numerous contract provisions
required by statute and regulation are necessary controls to protect the public
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interest on the larger dollar contracts, but should not be slavishly applied to every
procurement. Accordingly, the Committee endorses the use of simplified regula-
tions, procedures and forms for small purchases. The dollar ceiling for small
purchases is initially set at $25,000, but the Administrator for Federal Procure-
ment Policy is authorized to adjust that ceiling not more often than once every
three years, to reflect economic conditions.
Section 106 amends section 2306(b) by excluding small purchase contracts from the
requirement that certain contracts contain a warranty against contingent fees.
The purpose of this amendment is to facilitate simplification of small purchase
contracting by reducing the paperwork in connection with small purchases.
Section 106 also continues the prohibition in subsection 2306(d) against awarding a
fee for performing architectural engineering services in excess of six percent of
the estimated cost of the project. Other fee limitations found in subsection
2306(d) have been repealed as well as the requirement that fee determinations shall
be made by the head of the agency.
Section 106 further amends Section 2306(g) which provides authority for agencies
to enter into contracts for services for periods of not more than five years. The
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deletion of the word "military" in subsection (g)(1)(B) and the substitution of the
word "other" for "base" in subsection (g)(1)(D) were made in order to empower the
National Aeronautics and Space Administration (NASA) as well as the Coast Guard
to make use of such authority. The term "property" was substituted for the phrase
"items of supply" in subsection (g)(1) to clarify the scope of the authority conferred
by the section.
Section 106 also amends Section 2306(h) to authorize all agencies covered by the
Armed Services Procurement Act to procure services on a multiyear basis. This
section authorizes the procurement of any type of property on a multiyear basis
whenever an agency head can make the findings required by the section. The
section has been amended to clarify the authority to procure all types of major
systems in addition to those which are weapons systems.
Subsection (h)(2)(A) has been amended by deleting the requirement for the
Secretary of Defense to publish regulations implementing this section. Such
regulations should be prescribed as part of the single, Government-wide regulation
established by section 2318 of this Act.
In addition, section 106 adds a new subsection (i) to section 2306 which permits
agencies, when the Appropriation Act so provides, to enter into contracts for
support services for periods of up to twelve months using appropriations available
for obligation only within the fiscal year for which appropriated. This provision
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would allow agencies, when multiyear contracting is not feasible or desirable, to
enter into twelve-month contracts for support services which start in one fiscal
year and are completed in a second fiscal year.
Section 107 amends Section 2307, "Advance Payments", which permits an agency to
make advance, partial, progress, or payments under contracts. Two substantive
changes have been made to the section. First - the requirement for Congressional
committee approval of expenditures in excess of $25,000,000 has been deleted in
view of the decision in Consumer Energy Council of America v. Federal Regulatory
Commission, _F2d_ (D.C. Cir. 1982), Nos. 80-2184, 80-2312 (filed January 29,
1982). And second -- a new paragraph has been added which gives title to the
Government to all property acquired or produced by a contractor which is allocable
or chargeable to the contract concerned. It further provides that the Government's
title may not be divested by any action of the contractor, including bankruptcy, or
encumbered by a lien or security interest.
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EXAMINATION OF BOOKS AND RECORDS
Section 108 amends section 2313. Subsection (b) continues the requirement that
certain contracts contain a clause entitling the Comptroller General to examine
books and records that pertain to the contract; however, this subsection has been
amended to exempt small purchases as set forth in 2304(i). This amendment
removes one of the statutory impediments to simplifying the small purchase
procedures. To further reduce paperwork, the requirement to furnish a report to
Congress whenever the clause is not inserted in a contract has been deleted from
subsection (c).
Section 109 amends section 2314, "Laws inapplicable to agencies named in section
2303 of this title." This section conforms the Armed Services Procurement Act
(ASPA) with the Federal Property and Administrative Services Act by exempting
transactions under the ASPA from the application of 41 U.S.C. 8 which sets forth
certain procedures regarding the opening of sealed bids. The procedure for public
announcement of sealed bids is covered by section 2305 of this Act.
References to 41 U.S.C. 6 and 6a have been deleted. The reference to 41 U.S.C. 6a
is unnecessary because it applies only when 41 USC 5 is applicable. Transactions
under this Act are exempt from 41 U.S.C. 6a. The reference to 41 U.S.C. 6 has
been deleted because the statute has been repealed.
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AUTOMATIC DATA PROCESSING EQUIPMENT
Section 110 amends section 2315, "Laws inapplicable to the procurement of
automatic data processing equipment and services for certain defense purposes", to
correct a legal citation.
Section 111 adds a new Section 2316, "Management Responsibilities," to the Act
and recognizes the need set forth in the Administration's Federal Procurement
System proposal to strengthen and modernize the management structure for
procurement.
Section 2316(a) requires that the Secretary of Defense, jointly with the
Amdinistrator for General Services and the Administrator of the National Aero-
nautics and Space Administration, develop, issue, and maintain a simplified
Government-wide procurement regulation, ensuring that the views of the executive
agencies are also considered. It is intended that joint issuance of the Federal
Acquisition Regulation, which is developed with full consideration of the views of
other agencies, will achieve effective and efficient management of the Federal
procurement system.
It is intended that the authorities issuing the single, simplified Government-wide
regulation shall provide the participation and consider the views of all other
Executive agencies in developing this Government-wide regulation. Agencies shall
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use the single regulation to the maximum practicable extent. Agency regulations
implementing or supplementing the Government-wide regulation shall be limited to
those unique to agency mission requirements.
Subsection (b)(1) requires that agency heads establish the above clear lines of
authority, accountability, and responsibility for procurement decisionmaking. With
regard to procurement decisionmaking, vital business decisions too often are made
by nonprocurement personnel or, at best, with insufficient participation by
procurement professionals. This section would require that agency heads clarify
those decisions which contracting officers should either participate in or make.
When the agency's mission is highly dependent on contracts with the private sector,
it is also important that the procurement function be placed at a sufficiently high
level in the organization to provide for direct access to the head of the major
organizational unit being served; comparative equality with organizational counter-
parts; and sufficient status to deal with contractor business executives.
Subsection (b)(2) requires that agency heads assign responsibility for management
direction of the procurement system. This normally should be accomplished
through the Procurement Executive. The Procurement Executive should be a full-
time position, except in small agencies. Since this position should be responsible
for management direction of the agency's procurement system, the Executive
should be an experienced professional. When the volume of procurement and its
impact on mission accomplishment is significant enough to warrant top level
visibility, the Executive should preferably be at, or report directly to, the Assistant
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Secretary or Assistant Administrator level. Large agencies may appoint additional
Procurement Executives, as needed, in subagency elements. The Procurement
Executiv^'s functions shall include:
- Developing policy, both Government-wide and agency unique;
- Designating areas for setting systems standards, developing ways to measure
performance, and defining desired levels of performance;
Developing a professional work force capable of meeting these systems'
performance standards;
Clarifying the flow of contracting authority and accountability as discussed
earlier;
Evaluating procurement systems' performance and certifying to the agency
head that procurement systems meet approved standards;
- Setting up control and feedback methods to monitor system performance,
make adjustments, and keep the system up to date; and
Acting as the agency's advocate for competition.
A clear line of contracting authority and accountability should be established from
the agency head through the Procurement Executive to each operational procure-
ment organization.
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Subsection (bX3) requires that each agency develop and maintain a procurement
career management program to maintain a professional work force meeting the
standards of the new procurement system. As noted above, the Procurement
Executive will have responsibility for day-to-day management of the career
program. The Executive will work with the agency's principal procurement
managers and personnel office representatives to analyze work force needs and
institute agency-wide plans and standards for:
- Insuring proper classification of positions;
- Recruiting and selecting qualified individuals;
- Strengthening procurement intern programs;
- Training the work force;
- Appointing qualified contracting officers; and
- Establishing accountability requirements and incentives for quality
performance.
In setting forth these career management requirements, the Act is recognizing that
as procurement becomes more complex and important in carrying out agency
missions, professionalism of the procurement work force becomes increasingly
critical. The Act envisions a more responsible role for the procurement personnel
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than they have generally exercised in the past. It calls for a more informed
judgment of the array of products and services available in the marketplace and
the opportunities to induce or expand competition. It calls for earlier participation
by procurement personnel, as the Government business managers, in the develop-
ment of procurement strategies. It requires reduced Federal procurement regula-
tions. It permits broader latitude for judgment by contracting officers, but would
hold them fully accountable for the results of their decisions.
TABLE OF CONTENTS
Section 112 amends the table of contents of the Act.
DEBARRED OR SUSPENDED BIDDERS
Section 113 amends section 2393. This section, which prohibits the Department of
Defense from soliciting bids from and awarding contracts to debarred or suspended
bidders, was added to the Act by the Department of Defense Authorization Act of
1982, Public Law 97-86, 95 Stat. 1124. The present amendment would extend the
prohibition against contracting with debarred or suspended bidders to the National
Aeronautics and Space Administration and the Coast Guard.
TITLE H
AUTHORITY TO TEST NEW CONCEPTS AND
METHODS OF COMPETITION
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Title H provides authority and direction for a test of the new concepts and methods
of competition described in Chapter 2, Section 4 of the proposal for a Uniform
Federal Procurement System. The parameters of this test are further set forth in
special legislation in this Title as the Armed Services Competitive Procurement
Test Act of 198_. Similar legislation -- the Federal Property Competitive
Procurement Test Act of 198_ -- is being proposed as an emdnement to the
Federal Property and Administrative Services Act.
The Committee believes that the new concepts and method of competition are very
viable, but because of concern by some agencies that such a change should be
tested before it becomes law, the Committee is providing for that test. It is
expected that the test will include a broad range of procuring activities, so that
the results will provide a firm basis for decision with respect to further legislation.
While the test should be conducted along the parameters set forth, the
Administrator for Federal Procurement Policy is authorized to vary these param-
eters as necessary to ensure a fair and valid test.
Section 201 states the short title of the Act, the Armed Services Competitive
Procurment Act of 198_.
Section 203(a) requires that bids shall be solicited from prospective sources to
ensure effective competition in obtaining needed property or services. "Effective
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competition" is a marketplace condition in which two or more independent firms,
each with a reasonable expectation of winning, can bid to obtain a contract. Bids
shall be solicited from a sufficient number of sources to enable the Government to
acquire property or services at reasonable prices. At the same time, consideration
shall be given to conducting the solicitation process in a manner which stresses
both fairness to competing bidders and administrative (including cost) efficiency.
Under the present law there has been some question with respect to whether the
requirement for competition in advertised procurements applies as well to procure-
ments which are solicited under negotiation procedures. This section makes it
clear that competition shall be solicited in all procurements, unless explicitly
excepted. This general rule is not dependent upon the type of solicitation
procedure under which the procurement is conducted.
This section also requires that functional specifications shall be used in describing
agency needs except in circumstances where conditions or circumstances require
the use of detailed specifications. "Functional specifications" are defined in
Section 206 of Title H. In many procurements the Government's needs are
described in great detail rather than in terms of the type of function or
performance required by the Government. Detailed specifications tend to restrict
competition by limiting the number of suppliers who can perform the basic needs of
the Government. By using detailed specifications the Government also may
preclude itself from taking advantage of alternative products or services which can
satisfy the Government's basic needs at lower cost.
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Section 203(aX2) sets forth seven exceptions to the rule in subsection (a)(1) that
effective competition shall be obtained in each procurement. Noncompetitive
procurements are permissible in only the specified circumstances. If an executive
agency does not compete a procurement, it nevertheless must assure itself that it
is obtaining needed property or services at prices which are fair and reasonable.
Section 203(a)(2)(A) permits a noncompetitive procurement when the property or
service is available only from a single source and no competitive alternatives are
available. If the Government's needs can be fulfilled through competition by, for
example, changing from a design specification to a functional specification,
altering the terms and conditions of the contract or modifying the requirement,
noncompetitive procurement would not be permissible if the choice of alternatives
would not substantially impair the Government's fulfillment of its needs. This
section permits the acceptance of unsolicited proposals which offer truly unique or
innovative solutions to Government needs. However, if alternative solutions are
available, a competition should be conducted to ensure that the best idea is chosen.
Section 203(a)(2)(B) permits noncompetitive procurements under emergency
conditions which do not permit the delay inherent in competitive bidding. A
serious emergency would include, for example, a situation which threatens imme-
diate harm to public health or safety. Abbreviated competitive solicitation
procedures shall be used in lieu of a noncompetitive procurement when practicable
under the circumstances.
Section 203(a)(2XC) permits a noncompetitive award under three circumstances:
(1) in order to create or maintain an essential industrial capability; (2) for purposes
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of industrial mobilization; or (3) because it is impracticable or uneconomical to
obtain competition for follow-on procurement. This authority may be used where
it is necessary to train, continue in production, or keep in business facilities or
suppliers which are vital to national programs or to assure their availability in the
event of a national emergency. This authority may also be used to maintain
properly balanced sources of supply for meeting the requirements of procurement
programs in the interest of industrial mobilization. Moreover, this authority may
be used where it would be uneconomical to the Government to award anyone else
than the contractor who has been established as a source under a previous
competitive solitication. In developing new major systems, it is sometimes
necessary to invest millions of dollars in a sustained hardware design and
demonstration competition before award of an initial production quantity. In such
cases, the time and efort invested by the winning contractor, including investment
in tooling, test equipment and plant modernization, precludes competing follow-on
quantities.
Section 203(a)(2)(D) permits an executive agency to award a contract where an
international agreement directs the source of supply or the source of supply is
fulfilled from a source requested by a foreign Government. This section would
apply to the Department of Defense foreign military sales program.
Section 203(a)(2)(E) permits a noncompetitive procurement when a statute requires
the procurement to be obtained through a specified person or another Federal
agency. This section would apply for example to agency contracts with the Small
Business Administration under section 8(a) of the Small Business Act and to the
purchase of blind-made products.
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Section 203(a)(2)(F) would allow a noncompetitive procurement when disclosure to
more than one person of the property or service to be obtained would jeopardize
the national security. This exception is to be used only under very limited circum-
stances and approved at a high agency level.
Section 203(a)(2)(G) would permit an agency to enter into a noncompetitive
procurement when it is impracticable to obtain competition. This exception is not
intended to give agencies an open door to continue past noncompetitive practices,
but rather, to permit noncompetitive procurement in exceptional circumstances
where competition is impracticable. Use of this exception will require approval by
the agency head at a level not below Assistant Secretary.
Subsection 203(a)(3) requires that each noncompetitive procurement which exceeds
the ceiling for small purchases shall be approved in writing by an agency official
whose position is higher than that of the contracting officer. A determination to
award a contract under section 203(a)(2)(G) shall be made only by the head of the
agency at a level not below that of Assistant Secretary.
Section 203(b) provides in paragraph (1) that a bid to supply property or services
shall be evaluated based on (A) the offered price of the property or services and
other price-related factors; (B) the total cost of the property or service to the
Government and (C) the offered price or cost of the property or service and other
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evaluation factors. Although a priority is not established for use of the evaluation
methods, a method should be chosen which is most appropriate for the circum-
stances of the procurement.
Solicitations should be evaluated on the basis of lowest price to the Government
when an analysis of the marketplace indicates that equal or similar products or
services are available which can satisfy agency needs and which can be evaluated
on a common basis. Bids should be evaluated on the basis of the lowest total cost
to the Government when an analysis indicates that competing products or services
would differ significantly in performance. Total cost analysis would permit the
consideration of such factors as operating and maintenance costs, energy consump-
tion, product life, reliability, and safety. This evaluation method would permit the
award of a contract for a product that was higher in price than competing products
provided that the overall cost to the Government was lower.
The final or "multiple factors" evaluation method should be used when (1)
Government needs cannot be precisely described; (2) a well-defined solution to the
Government's needs does not exist; (3) evaluation factors for award cannot be
objectively measured; or (4) technical or management performance is critical. This
method permits the evaluation of new ideas, productivity improvements, new
products and cost factors, as well as a bidder's technical and management ability.
Section 203(b)(2) provides that bids shall be evaluated without discussions with
bidders when the Government's requirements and terms and conditions of the
contract can be sufficiently described in the solitication to allow the timely
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preparation and evaluation of bids on a common basis without the need to hold
discussions with bidders. When bids are evaluated without discussion on the basis
of price, this method equates to the formal advertising procedure under the prior
law. If variations in quality and ownership costs can be objectively quantified in
advance, the bidding without discussion method may also be used when bids are to
be evaluated on the basis of lowest total cost to the Government.
Section 203(b)(3) states that bids shall be evaluated with discussions whenever it is
necessary to discuss the Government's requirements or the terms and conditions of
the proposed contract with bidders after receipt of bids but prior to award of the
contract. Normally, this method will be used when evaluation of bids is to be based
on a multiplicity of factors or on the basis of lowest total cost when variations in
quality and ownership costs cannot be objectively quantified in advance. Awards
on the basis of price will, in almost all cases, be made without discussions after a
public bid opening. In such cases, no discussion will be permitted after the opening.
However, there may be instances where the Government's knowledge of the market
is not adequate to allow it to commit itself unequivocally to accept the lowest bid
or to foreclose the possibility of discussions with bidders before awarding a
contract. In these cases, the solicitation will clearly indicate that the Government
reserves the right to discuss prices, and the bid opening will not be public.
This section continues the requirement in the prior law that oral or written
discussions shall be conducted with all responsible bidders who submit bids within a
competitive range. Such discussions need not be conducted where it can be
demonstrated from either the existence of effective competition or accurate prior
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cost experience that the acceptance of a bid without discussion would result in fair
and reasonable prices. If discussions are not held, the solicitation must have
notified all bidders of the possibility that award could be made without discussions.
The requirement of this section for written or oral discussions need not be applied
to procurements in implementation of authorized set-aside programs.
Subsection 203(b)(4) permits combining the evaluation methods in subsections (b)(2)
and (b)(3) whenever it would be beneficial to conduct the evaluation of bids in
succession. A procedure similar to "two-step formal advertising" contained in the
current procurement regulations would be permitted under this subsection.
SOLICITATION AND AWARD OF CONTRACTS
Section 203(c) sets forth requirements for the solicitation and award of contracts.
Section 203(c)(1) requires that each solicitation shall contain a description of all
evaluation factors which are reasonably expected to have a bearing on selection for
award and shall set forth the relative order of importance of these factors in the
evaluation process. This section does not require an agency to disclose in
solicitations the numerical weights which may be employed in the evaluation of
bids.
Section 203(c)(2) states that bids shall be opened publicly at a time and place
stated in the solicitation when an agency chooses to solicit bids in accordance with
the bidding without discussion method. The Committee intends that the decisional
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law which interprets the same requirement for public bid opening under present law
shall apply to this section. The requirement for public bid opening does not apply
when an agency, in accordance with section 203(b)(3), selects the bidding with
discussion solicitation method but does not conduct discussions after bids have been
received.
This section also continues the "firm bid rule" as developed under the present law
by prohibiting bidders from withdrawing bids while they are under consideration for
award by the Government, after bid opening, during a period which has been
identified in the solicitation.
Subsection 203(c)(2) also confers on executive agencies the authority to permit
withdrawal or modification of a bid in case of mistake. This authority had
previously been delegated to executive agencies. See 38 Comp. Gen. 177 (1958).
The Committee does not intend, however, to amend the jurisdiction of the federal
courts or the General Accounting Office established under present law to question
the correctness of any administrative determination made under this section.
Section 203(c)(3) states that bids are to be awarded to the responsible bidder whose
bid is reponsive to the solicitation and whose bid has been evaluated as being the
most advantageous to the United States. Bids are to be evaluated in accordance
with one of the three categories set forth in section 203(b)(1): (A) price (including
price-related factors); (B) total cost to the Government; (C) or other evaluation
factors in addition to price or cost. Bids which are evaluated on the basis of price
alone (including other price-related factors) must be awarded to the lowest,
responsive and responsible bidder.
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This section also requires that notice of award shall be given to the bidder chosen
for award and to all unsuccessful bidders. This section continues the present law
by permitting an agency to reject all bids if it determines that such rejection would
be in the public interest.
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AMENDMENTS NECESSITATED BY THE
PROPOSED ARMED SERVICES PROCUREMENT ACT
(1) Amendment of 10 U.S.C. S2356(b)
Section 2356(b) of title 10, United States Code, is amended by striking the
word "negotiate" in the first sentence and inserting the word "award" in lieu
thereof and by striking out the last sentence.
The amended provision would read:
"?2356. Contracts: delegations
"(a) The Secretary of a military department may delegate any
authority under section 1584, 2353, 2354, or 2355 of this title to --
(1) the Under Secretary of his department;
(2) an Assistant Secretary of his department; or
(3) the chief, and one assistant to the chief, of any technical
service, bureau, or office.
However, the authority of the Secretary under section 2353(b) (3) of this title
may not be delegated to a person described in clause (3) of this subsection.
"(b) Subject to other provisions of law, the power to negettate award
and administer contracts for research or development, or both, may be
further delegated. In this seetien lnegettateL means make wttheat the ?erma}
advertising preseribed by seetien 2395 of this ttt1e."
This definition is deleted as superfluous. The Armed Services Procurement
Act provides sufficient flexibility in selecting the most advantageous procurement
method, including authority to negotiate.
(2) Amendment of 41 U.S.C. S45
Section 11 of the Act of June 30, 1936 (49 Stat. 2039, renumbered section 12
of 66 Stat. 308; 41 U.S.C. 545), is amended to read as follows: "SEC. 12. The
provisions of this Act requiring the inclusion of representations with respect to
minimum wages shall apply only to purchases or contracts relating to such
industries as have been the subject matter of a determination by the Secretary of
Labor."
The present section of the Walsh-Healey Act states:
"?45. Same; effective date; exception as to representations with respect to
minimum wages.
"Sections 35 to 45 of this title shall apply to all contracts entered into
pursuant to invitations for bids issued on or after ninety days from June 30,
1936: Provided, however, That the provisions requiring the inclusion of
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representations with respect to minimum wages shall apply only to purchases
or contracts relating to such industries as have been the subject matter of a
determination by the Secretary of Labor."
"The provisions of this Act requiring the inclusion of representation
with respect to minimum wages shall apply only to purchases or contracts
relating to such industries as have been the subject matter of a determination
by the Secretary of Labor."
The provision is amended to eliminate an obsolete provision applying the
Walsh-Healey Act only to contracts entered into pursuant to invitations to bid.
(3) The following Acts shall not apply to a contract or subcontract awarded
under this chapter, the price of which does not exceed $25,000 or the amount
established for small purchase procedures under section 2308 of this title.*
(a) section 1 of the Act of June 30, 1936, as amended December 27,
1979 (93 Stat. 1215, 41 U.S.C. S35);
(b) chapter 1041 of the Act of August 10, 1956, (70A Stat. 146, 10
U.S.C. 52631);
(c) title III, section 207(a) of the Act of September 7, 1962 (76 Stat.
520, 10 U.S.C. 52207);
(d) section 3 of the Act of August 3, 1958 (72 Stat. 862, 7 U.S.C.
9'1903);
(e) section 2 of the Act of December 22, 1975 (89 Stat. 874, 42
U.S.C. 56201);
(f) section 2 of the Act of October 21, 1976, as amended October 21,
1980 (94 Stat. 2346, 42 U.S.C. 56962).
(g) title III, sections 2 and 3 of the Act of March 3, 1933 (47 Stat.
1520, 41 U.S.C. 510a-b) and title VI, section 633 of the Act of October 29,
1949 (63 Stat. 1024; 41 U.S.C. S 10d)
(h) section 15 of the Act of October 27, 1972, as amended by the Act
of May 31, 1976 (90 Stat. 590, 42 U.S.C. 54914)
5436)
(i) chapter 645 of the Act of June 25, 1948 (62 Stat. 703, 18 U.S.C.
* This provision will be codified in the appropriate section of the Armed
Services Procurement Act.
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(j) chapter 645 of the Act of June 25, 1948, as amended by the Act
of October 31, 1951 (65 Stat. 717, 18 U.S.C. 5431)
(k) section 21 of the Act of February 15, 1980 (94 Stat. 43, 49 U.S.C.
?1517)
?874)
(1) chapter 645 of the Act of June 25, 1948 (62 Stat. 740, 18 U.S.C.
The effect of the amendment is to raise the threshold at which the listed
statutory requirements become applicable to Government contracts to the level set
forth for small purchases.
(a) Walsh-Healey Act, 41 U.S.C. S35
(b) Preference for U.S. Flag Carriers, 10 U.S.C. 52631
(c) Gratuities, 10 U.S.C. 52207
(d) Humane Slaughter of Livestock, 7 U.S.C. S1903
(e) Conservation of Energy, 42 U.S.C. 56361
(f) Recycled Material, 42 U.S.C. 56962
(g) Buy American, 41 U.S.C. SlOa-d
(h) Noise Control Act, 42 U.S.C. 54914
(i) Convict Labor Act, 18 U.S.C. S436
(j) Officials Not to Benefit, 18 U.S.C. 5431
(k) Preference for U. S. Flag Air Carriers, 49 U.S.C. 51517
(1) Copeland "Anti-Kickback" Act, 18 U.S.C. 5874
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REPEALS NECESSITATED BY THE PROPOSED
ARMED SERVICES PROCUREMENT ACT
(a) Chapter 135 and Sections 4535 and 9535 of Title 10 U.S.C.
Chapter 135 and Sections 4535 and 9535 of Title 10 are repealed.
(1) Chapter 135 covers procurement of military aircraft. Its
restrictively worded requirements for formal advertising are replaced by the
authorities set forth in the proposed Act.
44535: Exceptional stubsistenee supplies; purehase without
advertising
uExeeptienal articles of subsistenee supplies that are for members
of the Army, and for which they are to pay regardless of eondition upon
arrival; may-, under regulations to be prescribed by the Secretary of the
Army, be bought an the open market w#thetit advertising
The effect of this provision is to allow negotiation in the above-mentioned
procurements. The proposed ASPA will confer appropriate authority and, thus, this
provision is repealed as obsolete.
{3-} u?9535: Exeeptienal subsistence supplies: purchases without
advertising
"Exceptional articles of subsistence supplies that are for members
of the Atr Force; and for which they are to pay regardless of condition
upon arrival may-, tinder regulations to be prescribed by the Secretary of
the Air Feree, be bought an the open market without advertising
The effect of this provision is to allow negotiation in the above-mentioned
procurements. The proposed ASPA will confer appropriate authority and, thus,
these provisions are repealed as obsolete.
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To further amend the Federal Property and Administrative Services Act of
1949, as amended, to simplify the procurement process, to strengthen management
of the procurement system and the procurement work force, to provide testing of
new contracting procedures which will expand the use of competition in Govern-
ment contracting and to impose certain requirements on the award of non-
competitive contracts, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, that this Title shall be known as the
"Federal Property and Administrative Services Act Amendments of 198_".
Sec. 102. Section 301 of the Federal Property and Administrative Services Act, as
amended (41 U.S.C. 251), is amended by deleting section 301 in its entirety and by
inserting in lieu thereof the following new section:
"SEC. 301. DECLARATION OF POLICY
(a) (1) The Congress finds that in order to further national interests, to
conserve fiscal resources and to enhance production capability, it is in the
interest of the United States to acquire property and services in the most
STAT
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timely, economic and efficient manner. It is, therefore, the policy dry the
Congress that property and services be acquired by any kind of contract,
other than cost-plus-a-percentage-of-cost contracts, but including multiyear
contracts. Further, it is the policy of the Congress that contracts, when
practicable, provide for the purchase of property and services at times and in
quantities that will result in reduced costs to the Government and provide
incentives to contractors to improve productivity through investment in
capital facilities, equipment and advanced technology.
(2) It is also the policy of the Congress that contracts for
procurement of components, parts and materials necessary for manufacture
or for logistics support of a major system should, if feasible and practicable,
be entered into in a manner to achieve economic-lot purchases and more
efficient production rates.
(b) Further, it is the policy of the Congress that the Federal Government
shall rely on competitive private enterprise to supply needed property and services
and that the system for procurement of property and services by the Federal
Government shall --
(1) promote responsiveness to agency mission needs by simplifying
and streamlining procurement processes;
(2) promote effective competition;
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(3) provide for a fair proportion of contracts to be placed with small
business concerns;
(4) support the continuing development of a professional work force;
(5) promote fair dealings with the private sector;
(6) ensure payment is made in a timely manner and only for value
received;
(7) require the description of needs, whenever possible, in terms of
functions to be performed or performance required;
(8) establish a preference for the use of commercial products to meet
the Government's needs;
(9) ensure the development of procurement policies that will accom-
modate serious emergencies and wartime as well as peacetime requirements;
(10) require that personal services are obtained in accordance with
civil service procedures and not by contract; and
(11) otherwise promote procurement efficiency, effectiveness and
economy within the Government and for those who do business with the
Government.".
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Sec. 103. Section 302 of the Federal Property and Administrative Services Act, as
amended (41 U.S.C. 252), is amended --
(1) by deleting "$10,000" and inserting in lieu thereof "$25,000" in
paragraph (3) of subsection (c); and
(2) by adding at the end thereof the following new subsection:
"(g) Small purchases. Purchases not expected to exceed $25,000 or an
amount established by the Administrator for Federal Procurement Policy
pursuant to section 9 of the Office of Federal Procurement Policy Act
Amendments of 198- (41 U.S.C. 408), are small purchases. A proposed
procurement shall not be divided into smaller procurements primarily for the
purpose of using the small purchase procedures. Procurement regulations
shall include special simplified procedures and forms for small purchases, to
facilitate making the purchases efficiently and economically.".
Sec. 104. Section 304 of the Federal Property and Administrative Services Act, as
amended (41 U.S.C. 254), is amended by deleting the first sentence of subsection
(b) and inserting in lieu thereof: "The cost-plus-a-percentage-of-cost system of
contracting shall not be used. The fee for performing a cost-plus-a-fixed-fee
contract for architectural or engineering services for a public work or utility plus
the cost of those services to the contractor may not be more than 6 percent of the
estimated cost of the work or project, not including fees.".
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Sec. 105. Section 305 of the Federal Property and Administrative Services Act, as
amended (41 U.S.C. 255), is amended by adding at the end thereof the following
new subsection:
"(d) In any contract providing for progress payments, the Government
shall have title to all property acquired or produced by the contractor and
allocable or properly chargeable to the contract. Notwithstanding any other
provisions of law, that title may not be divested by any action of the
contractor or proceeding in bankruptcy or encumbered by any lien or security
interest.".
Sec. 106. Section 308 of the Federal Property and Administrative Services Act, as
amended (41 U.S.C. 258), is amended by deleting the reference to section 1 of the
Act of dune 19, 1912, as amended (40 U.S.C. 324), and section 303 of the Act of
September 9, 1940 (54 Stat. 884; 40 U.S.C. 325a) and inserting in lieu thereof
"sections 102(a) and 104 of the Contract Work Hours Standards Act, as amended (40
U.S.C. 328(a) and 330).".
STAT
Sec. 107. Section 309 of the Federal Property and Administrative Services Act, as
amended (41 U.S.C. 259), is amended by deleting section 309 in its entirety and
inserting in lieu thereof the following new section:
In this chapter --
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(a) The term 'agency head' shall mean the head or any assistant head of any
executive agency and may, at the option of the agency head, include the chief
official of any principal organizational unit of such agency.
(b) 'Executive agency' means any executive department, military depart-
ment, wholly-owned Government corporation, or independent establishment in the
executive branch of the Government, or any independent regulatory agency.
(c) 'Person' means any individual, corporation, firm, group, State or local
government, foreign government, or other entity, foreign or domestic.
(d) 'Procurement' includes all stages of the process of acquiring property
and services, beginning with how needs are described and ending with the close out
of the contractual instrument.
(e) 'Property' means personal property (products) and leaseholds and other
interests therein, and construction, alteration or repair of real property, but
excludes real property and leaseholds and other interests therein.
(f) 'Services' means labor, time, or effort furnished under a nonpersonal
Sec. 108. The Federal Property and Administrative Services Act, as amended, is
further amended by adding the following new sections:
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(1) "SEC 311. COST OR PRICING DATA
(a) A prime contractor or any subcontractor shall be required to
submit cost or pricing data under the circumstances listed below, and shall be
required to certify that, to the best of his knowledge and belief, the cost or
pricing data he submitted was accurate, complete and current --
(1) prior to the award of any negotiated prime contract
pursuant to section 304 of this Act, when the price is expected to
exceed $500,000;
(2) prior to the pricing of any contract change or modification
for which the price adjustment is expected to exceed $500,000, or such
lesser amount as may be prescribed by the head of the agency;
(3) prior to the award of a subcontract at any tier, where the
prime contractor and each higher tier subcontractor have been required
to furnish such a certificate, if the price of such subcontract is
expected to exceed $500,000; or
(4) prior to the pricing of any contract change or modification
to a subcontract covered by (3) above, for which the price adjustment is
expected to exceed $500,000, or such lesser amount as may be
prescribed by the head of the agency.
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(b) Any prime contract or change or modification thereto under
which such certificate is required shall contain a provision that the price to
the Government, including profit or fee, shall be adjusted to exclude any
significant sums by which it may be determined by the head of the agency
that such price was increased because the contractor or any subcontractor
required to furnish such a certificate, furnished cost or pricing data which, as
of a date agreed upon between the parties (which date shall be as close to the
date of agreement on the negotiated price as is practicable), was inaccurate,
incomplete, or noncurrent: Provided, That the requirements of this section
need not be applied to contracts or subcontracts where the price negotiated
is based on adequate price competition, established catalog or market prices
of commercial items sold in substantial quantities to the general public,
prices set by law or regulation or, in exceptional cases where the head of the
agency determines in writing that the requirements of this section may be
waived.
(c) For the purpose of evaluating the accuracy, completeness, and the
currency of cost or pricing data required to be submitted by this section, any
authorized representative of the head of the agency who is an employee of
the United States Government shall have the right, until the expiration of
three years after final payment under the contract or subcontract, to
examine all books, records, documents, and other data of the contractor or
subcontractor related to the negotiation, pricing, or performance of the
contract or subcontract.";
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(2) "SEC. 312. CROSS YEAR AUTHORITY FOR SERVICE CONTRACTS
When so specified in an Appropriation Act, and where multiyear
contracting is not feasible or desirable, contracts for support services may be
entered into using appropriations available for obligation only within the
fiscal year for which appropriated, for periods not in excess of twelve
months, beginning at any time during the fiscal year.";
(3) "SEC 313. PROHIBITION AGAINST DOING BUSINESS WITH CERTAIN
BIDDERS OR CONTRACTORS
(a) (1) Except as provided in paragraph (2), an executive agency
may not solicit a bid from, award a contract to, extend an existing
contract with, or, when approval by the agency head of the award of a
subcontract is required, approve the award of a subcontract to, a bidder
or contractor which to the knowledge of the agency head has been
debarred or suspended by another Federal agency unless --
(A) in the case of a debarment, the debarment of the
bidder or contractor by all other agencies has been terminated or
the period of time specified for such debarment has expired; and
(B) in the case of a suspension, the period of time
specified by all other agencies for the suspension of the bidder or
contractor has expired.
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(2) Paragraph (1) does not apply in any case in which the agency
head concerned determines that there is a compelling reason to solicit a
bid from, award a contract to, extend a contract with, or approve a
subcontract with such bidder or contractor.
(b) The agency head shall, at the time of the determination described
in subsection (a)(2), transmit a notice to the Administrator of General
Services describing the determination. The Administrator of General
Services shall maintain each notice in a file available for public inspection.
(c) As used in this section:
(1) 'Debar' means to exclude, pursuant to established
administrative procedures, from Government contracting and subcon-
tracting for a specified period of time commensurate with the serious-
ness of the failure or offense or the inadequacy of performance.
(2) 'Suspend' means to disqualify, pursuant to established
administrative procedures, from Government contracting and subcon-
tracting for a temporary period of time because a concern or individual
is suspected of engaging in criminal, fraudulent, or seriously improper
conduct."; and
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(4) "SEC 314. MANAGEMENT RESPONSIBILITIES
(a) The Secretary of Defense, jointly with the Administrator for
General Services and the Administrator of the National Aeronautics and
Space Administration, shall develop, issue and maintain a Government-wide
procurement regulation and ensure that the views of the executive agencies
are considered.
(b) Heads of agencies shall:
(1) establish clear lines of authority, accountability, and
responsibility for procurement decisionmaking;
(2) assign responsibility for management direction of the
procurement system and provide that system standards are imple-
mented promptly; and
(3) develop and maintain procurement career management
programs to ensure an adequate professinal work force.".
Sec. 201. This Title shall be known as the "Federal Property Competitive
Procurement Test Act of 198.11
STAT
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Sec. 202. Authority to test new concepts and methods of competition
Section 6 of the Office of Federal Procurement Policy Act of 1974, as
amended (41 U.S.C. 405(b)), authorizes the Administrator for Federal Procurement
Policy (hereinafter the "Administrator") to develop innovative procurement
methods and procedures to be tested by selected executive agencies. The
Administrator is required to test the new concepts of competition as set forth in
the Administration's Proposal for a Uniform Federal Procurement System, by
working jointly with the heads of the executive agencies to --
(1) develop guidelines and procedures for testing; and
(2) select the appropriate executive agencies or agency components
to conduct tests of these concepts.
Sec. 203. Test parameters
Such tests shall be conducted within the following parameters:
(a) Competition
(1) Bids shall be solicited from prospective sources to ensure
effective competition in obtaining needed property or services. Except
,where circumstances require the use of detailed Government specifications,
an agency shall use functional specifications to describe its needs.
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(2) In noncompetitive procurement, the agency must be assured that
the property or services are obtained at fair and reasonable prices. Non-
competitive procurement of property and services is appropriate only
when --
(A) the property or service is available from a single source and
no competitive alternatives are available;
(B) a serious emergency will not permit the delay inherent in
obtaining competitive bids;
(C) an award must be directed to a specified person or
(1) in order to create or maintain an essential industrial
capability;
(2) for purposes of industrial mobilization; or
(3) because it is impracticable or uneconomical to obtain
competition for follow-on procurements;
(D) a procurement source is required by international agreement
or for directed procurements for foreign governments;
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(E) a procurement is required by statute to be obtained from or
through another Federal agency or a specified person;
(F) disclosure to more than one person of the property or
service to be obtained would jeopardize the national security; or
(G) it is impracticable to obtain competition.
(3) Each noncompetitive procurement in excess of the ceiling for
small purchases in section 302(g) will require written approval by an agency
official at a level higher than the contracting officer; a determination under
~(2
~(~ shall not be made below the level of the head of the executive agency,
who shall not delegate that authority below the Assistant Secretary or
equivalent level;
(b) Evaluation of bids
(1) A bid to supply property or services shall be evaluated based on --
(A) the offered price of the property or services and other
price-related factors;
(B) the total cost to the Government, including price and
maintenance or operating costs over the useful life of the property or
services; or
STAT
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(C) the offered price or cost of the property or services and
other factors, such as technical or management capability.
(2) Bids shall be evaluated without discussions whenever the
Government's requirements and the terms and conditions of the proposed
contract can be sufficiently described in the solicitation to allow the timely
preparation and evaluation of bids on a common basis without the need to
hold discussions with bidders.
(3) Solicitations shall provide for evaluation with discussions
whenever it may be necessary to discuss the Government's requirements or
the terms and conditions of the proposed contract with bidders after receipt
of bids but prior to award of the contract. For procurements in excess of the
ceiling for small purchases in section 302(g), written or oral discussions shall
be conducted with all responsible bidders who submit bids within a competi-
tive range, price and other factors considered: Provided, however, That the
requirements of this subsection with respect to written or oral discussions
need not be applied to procurements in implementation of authorized set-
aside programs or to procurements where it can be clearly demonstrated
from the existence of effective competition or accurate prior cost exper-
ience with the product or service, that acceptance of an initial bid without
discussion would result in fair and reasonable prices and where the request
for bids notifies all bidders of the possibility that award may be made without
discussion.
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(4) The evaluation methods described in subsections (2) and (3) may
be combined whenever it would be beneficial to conduct the evaluation of
bids in successive steps; and
(c) Solicitation and award of contracts
(1) Each solicitation shall set forth and describe the relative
importance of factors reasonably expected to have a significant bearing on
selection for award.
(2) When the solicitation notifies potential bidders that bids will be
evaluated without discussions, bids shall be opened publicly at a time and
place stated in the solicitation. Such bids may not be withdrawn or modified
after public opening within the time stated in the solicitation for award,
unless permitted by the agency concerned because of a mistake in bidding.
(3) Award shall be made to the responsible bidder whose bid conforms
to the solicitation and is most advantageous to the United States on the basis
of price (including price-related factors), total cost to the Government, or
other evaluation factors in addition to price or cost. Notification to all
unsuccessful bidders shall be made with reasonable promptness. All bids may
be rejected if the head of the agency determines that rejection is in the
public interest.
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(4) If any bid received evidences a violation of the antitrust laws, the
head of the agency shall refer such bid to the Attorney General for appro-
priate action.
Sec. 204. Deviations
The Administrator is authorized to grant deviations from these parameters,
as necessary, to ensure a valid testing program.
Sec. 205. Test period
The Administrator is required, within thirty (30) months of the effective date
of the Office of Federal Procurement Policy Act Amendments of 198_ to report
test findings and results to the Congress and recommend legislative amendments to
implement the new concepts of competition.
Sec. 206. Definition
For the purposes of this Title, the term "functional specification" means a
description of the intended use of property or services required by the Government.
A functional specification may include a statement of the qualitative nature of the
property or services required and, when necessary, may set forth those minimum
essential characteristics and standards to which such property or services must
conform to satisfy the intended use.
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(1) Section 303 of Title III of the Act of July 2, 1980 (94 Stat. 848; 15
U.S.C. 631b(b)), is amended by deleting "$10,000" and inserting in lieu thereof
"$25,000";
(2) Section 8 of the Act of July 18, 1958, as amended (15 U.S.C.
637(d)(2)(A)), is further amended by deleting "$10,000" and inserting in lieu thereof
"$25,000" in subsection (d);
(3) Section 15 of the Act of July 18, 1958, as amended (15 U.S.C. 644(g)
and (j)), is further amended by deleting "$10,000" in the first sentence of
paragraphs (g) and (j) and inserting in lieu thereof "$25,000";
(4) Section 1 of the Act of March 4, 1915, as amended (31 U.S.C. 686(a)), is
further amended in subsection (a) by --
(a) deleting the word "or" before the word "equipped" and inserting a
comma in lieu thereof;
(b) inserting the words ", or to obtain by contract" after the word
"render";
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(c) deleting "competitive bids" in such second proviso and inserting in
lieu thereof "contract"; and
(d) deleting the first proviso in such section, and by deleting "further"
in the second proviso;
(5) Subsection 9(a) of section 3709 of the Revised Statutes, as amended
(41 U.S.C. 5), is further amended by deleting "$10,000" in exception (1) and
inserting in lieu thereof, "$25,000";
(6) Section 101 of the Act of July 27, 1965, as amended (41 U.S.C. 6a-1), is
further amended by deleting "$10,000" and inserting in lieu thereof, "$25,000";
(7) Section 12 of the Act of June 30, 1936, as amended (41 U.S.C. 45), is
further amended by deleting section 12 in its entirety and inserting in lieu thereof
the following new section: "SEC. 12. The provisions of this Act requiring the
inclusion of representations with respect to minimum wages shall apply only to
purchases or contracts relating to such industries as have been the subject matter
of a determination by the Secretary of Labor.";
(8) Section 309 of the Act of September 1, 1951 (65 Stat. 307; 42 U.S.C.
1592h), is amended by deleting subsection (b) and by redesignating subsections (c)
and (d) as subsections (b) and (c), respectively;
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(9) The following Acts shall not apply to a contract or subcontract price
which does not exceed $25,000 or the amount established for small purchase
procedures under this Act:
(a) section 1 of the Act of June 30, 1936, as amended (41 U.S.C. 35);
(b) section 2 of the Act of December 22, 1975 (89 Stat. 874; 42
U.S.C. 6201);
(c) section 6002 of the Solid Waste Disposal Act of 1965, as amended
(42 U.S.C. 6962);
(d) sections 2 and 3 of the Act of March 3, 1933 (47 Stat. 1520;
41 U.S.C. lOa-b) and section 633 of the Act of October 29, 1949 (63 Stat.
1024; 41 U.S.C. 10d);
(e) section 15 of the Act of October 27, 1972, as amended (42 U.S.C.
4914);
(f) section 436 of title 18 of the United States Code;
(g) section 431 of title 18 of the United States Code;
(h) section 21 of the Act of February 15, 1980 (94 Stat. 43; 49 U.S.C.
1517); and
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(i) section 874 of title 18 of the United States Code.
TITLE IV
REPEALS
(1) Section 7 of the Act of March 3, 1875, as amended (25 U.S.C. 96);
(2) Section 3 of the Act of August 15, 1876, as amended (25 U.S.C. 97);
(3) Sections 3710 and 3735 of the Revised Statutes (41 U.S.C. 8, 13).
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Attachment F-1
FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT AMENDMENTS OF 198
Section-by-Section Analysis
Section 101 states the short title of the bill, the Armed Services Procurement Act
Amendments of 198.
DECLARATION OF POLICY
Section 102 amends section 301 and states in subsection (a) the policy of Congress
that property and services be acquired in a timely and efficient manner. Agencies
are permitted to use any kind of contract except for cost-plus-a-percentage-of-
cost. Contracts should provide incentives to contractors to improve their
productivity by investing in modern cost-reducing production facilities and equip-
ment.
Section 301 is further amended by subsection (b) to provide a comprehensive
statement of the policies which are the framework for Federal procurement. They
are intended to strengthen control of procurement expenditures, help make
procurement more responsive to agency missions, place procurement on a more
systematic, professional and businesslike basis than it is today and generally
establish a foundation for improvements in the procurement process. This section
STAT
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F-2
also adds a national policy that the Federal Government, as a tax supported
activity, should not compete with its own citizen taxpayers, but, rather, should rely
on competitive private enterprise to supply the property and services it needs
whenever competitive sources are available. This country was founded upon the
principle that private enterprise, not the Federal Government, should conduct
business activities. Although an executive policy along these lines was issued in
the 1950's, implementation of the policy has been slow and uneven. It is time for
the executive branch and Congress to face up to this problem and establish a stable
and straightforward national policy.
Subsection b(1) draws upon one of the central themes of the Federal Procurement
System proposed to the Congress by pointing out the need to simplify and
streamline the procurement process in order to make it more responsive to agency
needs. Federal Government procurement has become too complex and generally
overburdened due to inadequate planning, detailed Government specifications, a
myriad of regulations, voluminous paperwork, and lengthy decisionmaking. The
intent of this policy is to favor wherever possible simplified ways of doing business
with the private sector.
Subsection (b)(2) calls out another central theme of the proposed Federal
Procurement System -- expanding competition. The traditional Federal concept of
competition is too narrow and works against normal commercial marketplace
incentives. In order to obtain effective competition, it is the intent of the
proposed legislation that Federal agencies greatly simplify and streamline the
process of doing business with the Government and use new statutory concepts of
competition that build on successful practices of the past.
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Subsection (bX3) calls for a fair proportion of procurements to be placed with small
business concerns. Of particular concern is the shrinking base of suppliers,
especially small businesses, who are the backbone of the national industrial base.
Many of the proposed changes in this legislation would benefit small businesses.
Subsection (b)(4) calls for the continuing development by the agencies of a
professional work force -- another central theme of the proposed Federal Procure-
ment System. Such agency efforts are needed because of insufficient attention in
the past to management of procurement functions and, in particular, to the
procurement work force. With the work force upgrading must come removal of the
procedural restraints and excessive regulation which has unduly inhibited the
exercise of business judgment and initiative by procurement personnel.
Subsection (b)(5) would promote fair dealings with the private sector. It is
important to recognize that in our free enterprise system participation in any
market, including the Government market, is voluntary. Therefore, the Govern-
ment is competing for industrial resources. To obtain competent contractors, the
Government must offer satisfactory awards and an environment in which private
sector managers are willing to compete. In short, the Government must attract its
industrial base and deal fairly in the marketplace.
Subsection (b)(6) calls for insuring that payment is made to contractors in a timely
manner and only for value received. Contractors are often required to wait
excessive periods of time for payment. When interest rates are high, delays disrupt
normal cash flow and seriously impact contractors' costs and financial stability,
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particularly small businesses. Furthermore, late payments by the Government
restrict competition by discouraging contractors from doing business with the
Government. The Government should pay its contractors on time to take
advantage of offered discounts and as a norm no more than 30 days after receipt of
a proper invoice.
Subsection (b)(7) calls for the description of needs whenever possible in terms of
functions to be performed or performance required. Too many needs are described
in precise detail, which limits procurement strategy, restricts competition, and
makes it difficult to take advantage of alternative products or services. It is the
intent of this policy that wherever possible contractors be told what the Govern-
ment requires and not how to do it.
Subsection (b)(8) would open the door to more effective competition by establishing
a preference for the use of commercial products, over uniquely designed items, to
meet the Government's needs. This will permit the Government to take advantage
of the innovation and efficiencies of the commercial marketplace, including a wide
range of products which have stood the test of a much larger public competition.
This will also avoid the development of duplicative Government products when
commercial products are available.
Subsection (b)(9) states the policy that in embracing the new concepts of the
Federal Procurement System there must be sufficient flexibility to accommodate
national emergencies and wartime as well as peacetime requirements.
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Subsection (b)(10) recognizes a new Congressional policy that personal services are
to be obtained in accordance with Civil Service procedures and not by contract.
This deals with the problem of hiring consultants to do Government jobs but who, in
turn, are not accountable for results. Under the new policy, such persons would
have to be hired as Government employees on a limited or permanent basis. This
would reserve truly consultant services to non-personal service contracts in which
there is a well defined end item and no day-to-day supervision required.
Subsection (b)(11) recognizes the broader concept of promoting procurement
efficiency, effectiveness and economy, not only within the Government, but also
for those who are doing business with the Government. It embraces, for example, a
major theme of the Administration's Federal Procurement System proposal that
there must be clear authority and responsibility, meaningful standards for perform-
ance measurement, and accountability for results.
SMALL PURCHASES
Section 103 also adds a new subparagraph (g) to section 302, as well as deleting
"$10,000" from paragraph (3) of subsection (c) and inserting in lieu thereof
"$25,000." The purpose of this section is to provide a basis in statute for special
simplified procedures for small purchases. There were over 18 million procurement
actions in fiscal year 1981 of which over 17.5 million were below $25,000. Yet these
account for only about 10% of the total FY 81 expenditures of $134 billion.
Numerous contract provisions required by statute and regulation are necessary
controls to protect the public interest on the larger dollar contracts, but should not
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be slavishly applied to every procurement. Accordingly, the Committee endorses
the use of simplified regulations, procedures and forms for small purchases. The
dollar ceiling for small purchases is initially set at $25,000, but the Administrator
for Federal Procurement Policy is authorized to adjust that ceiling not more often
than once every three years, to reflect economic conditions.
CONTRACTOR PERFORMANCE FEES
Section 104 continues the prohibition in section 304 against awarding a fee for
performing architectural engineering services in excess of six percent of the
estimated cost of the project. Other fee limitations found in section 304 have been
repealed as well as the requirement that fee determinations shall be made by the
head of the agency.
ADVANCE PAYMENTS
Section 105 amends Section 305, which permits an agency to make advance,
partial, progress, or payments under contracts. A new paragraph has been added
which gives title to the Government to all property acquired or produced by a
contractor which is allocable or chargeable to the contract concerned. It further
provides that the Government's title may not be divested by any action of the
contractor, including bankruptcy, or encumbered by a lien or security interest.
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APPLICABILITY
Section 106 amends section 308. The reference to the Eight-Hour Law (40 U.S.C.
X324, 325a) has been amended to reflect the relevant provisions of the Contract
Work Hours and Safety Standards Act (40 U.S.C. %328(a), 330), which replaces the
Eight-Hour Law.
DEFINITIONS
Section 107 amends section 309 and defines "agency head", "executive agency",
"person", "procurement," "property", and "services".
"Agency head" is defined to include the head of an agency, an assistant head of an
agency, and, at the option of an agency head, the chief official of any principal
organization of an agency. The term "assistant head" would include an Under-
secretary or Assistant Secretary of a department, an Associate or Assistant
Administrator of an agency, or an Executive Director for Operations of a
regulatory commission.
"Executive agency" means any department, military department, wholly-owned
Government corporation, or independent establishment in the Executive branch of
the Government as these terms are defined in the United States Code. The term
also includes an independent regulatory agency, but it does not include the General
Accounting Office.
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"Person" means any individual, corporation, firm, State or local government,
or other foreign or domestic entity.
"Procurement" is defined to include all stages of the process of acquiring
goods and services. This process begins when the Government describes the
property or service it wishes to obtain and ends when the contractual instrument(s)
used to obtain the property or service are administratively closed out. Procure-
ment functions do not include supply functions nor the process for determining
which agency programs are to be established.
"Property" refers to personal property and leaseholds and other interests
therein. As used elsewhere in the statute, the term "products" means property.
The term does not include real property and other interests therein.
The term "services" refers to labor, time, or effort furnished under a
nonpersonal services contract. Contracts for personal services are not included
within the definition and are not authorized by this Act.
COST OR PRICING DATA
Section 108 adds a new section 311, "Cost or Pricing Data," to the Act. This
section extends the provisions of the "Truth in Negotiations Act" to the civil
agencies so that there is uniformity in treatment of contractors throughout the
executive branch.
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CROSS YEAR AUTHOIRTY FOR SERVICE CONTRACTS
In addition, section 108 adds a new section 312, which permits agencies, when the
Appropriation Act so provides, to enter into contracts for support services for
periods of up to twelve months using appropriations available for obligation only
within the fiscal year for which appropriated. This provision would allow agencies,
when multiyear contracting is not feasible or desirable, to enter into twelve-month
contracts for support services which start in one fiscal year and are completed in a
second fiscal year.
PROHIBITION AGAINST DOING BUSINESS WITH CERTAIN BIDDERS
OR CONTRACTORS
Section 108 further adds a new section 313, "Prohibition Against Doing Business
with Certain Bidders or Contractors," to the Act. This section is the same as
Section 914 of the Department of Defense Authorization Act of 1982, Public Law
97-86, 95 Stat. 1124. It extends the prohibition against awarding contracts to
debarred or suspended bidder to the civil agencies so that here also there is
uniformity in treatment of contractors throughout the executive branch.
MANAGEMENT RESPONSIBILITIES
And lastly, Section 108 adds a new Section 314, "Management Responsibilities," to
the Act and recognizes the need set forth in the Administration's Federal
Procurement System proposal to strengthen and modernize the management
structure for procurement.
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Section 314 requires that the Secretary of Defense, jointly with the Amdinistrator
for General Services and the Administrator of the National Aeronautics and Space
Administration, develop, issue, and maintain a simplified Government-wide pro-
curement regulation, ensuring that the views of the executive agencies are also
considered. It is intended that joint issuance of the Federal Acquisition Regula-
tion, which is developed with full consideration of the views of other agencies, will
achieve effective and efficient management of the Federal procurement system.
It is intended that the authorities issuing the single, simplified Government-wide
regulation shall provide the participation and consider the views of all othe
Executive agencies in developing this Government-wide regulation. Agencies shal
use the single regulation to the maximum practicable extent. Agency regulation
implementing or supplementing the Government-wide regulation shall be limited t
those unique to agency mission requirements.
Subsection (b)(1) requires that agency heads establish the above clear lines of
authority, accountability, and responsibility for procurement decisionmaking. With
regard to procurement decisionmaking, vital business decisions too often are made
by nonprocurement personnel or, at best, with insufficient participation by
procurement professionals. This section would require that agency heads clarify
those decisions which contracting officers should either participate in or make.
When the agency's mission is highly dependent on contracts with the private sector,
it is also important that the procurement function be placed at a sufficiently high
level in the organization to provide for direct access to the head of the major
STAT
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organizational unit being served; comparative equality with organizational counter-
parts; and sufficient status to deal with contractor business executives.
Subsection (b)(2) requires that agency heads assign responsibility for management
direction of the procurement system. This normally should be accomplished
through the Procurement Executive. The Procurement Executive should be a full-
time position, except in small agencies. Since this position should be responsible
for management direction of the agency's procurement system, the Executive
should be an experienced professional. When the volume of procurement and its
impact on mission accomplishment is significant enough to warrant top level
visibility, the Executive should preferably be at, or report directly to, the Assistant
Secretary or Assistant Administrator level. Large agencies may appoint additional
Procurement Executives, as needed, in subagency elements. The Procurement
Executive's functions shall include:
Developing policy, both Government-wide and agency unique;
- Designating areas for setting systems standards, developing ways to measure
performance, and defining desired levels of performance;
Developing a professional work force capable of meeting these systems'
performance standards;
Clarifying the flow of contracting authority and accountability as discussed
earlier;
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Evaluating procurement systems' performance and certifying to the agency
head that procurement systems meet approved standards;
Setting up control and feedback methods to monitor system performance,
make adjustments, and keep the system up to date; and
Acting as the agency's advocate for competition.
A clear line of contracting authority and accountability should be established from
the agency head through the Procurement Executive to each operational procure-
ment organization.
Subsection (b)(3) requires that each agency develop and maintain a procurement
career management program to maintain a professional work force meeting the
standards of the new procurement system. As noted above, the Procurement
Executive will have responsibility for day-to-day management of the career
program. The Executive will work with the agency's principal procurement
managers and personnel office representatives to analyze work force needs and
institute agency-wide plans and standards for:
- Insuring proper classification of positions;
Recruiting and selecting qualified individuals;
Strengthening procurement intern programs;
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Training the work force;
Appointing qualified contracting officers; and
Establishing accountability requirements and incentives for quality
performance.
In setting forth these career management requirements, the Act is recognizing that
as procurement becomes more complex and important in carrying out agency
missions, professionalism of the procurement work force becomes increasingly
critical. The Act envisions a more responsible role for the procurement personnel
than they have generally exercised in the past. It calls for a more informed
judgment of the array of products and services available in the marketplace and
the opportunities to induce or expand competition. It calls for earlier participation
by procurement personnel, as the Government business managers, in the develop-
ment of procurement strategies. It requires reduced Federal procurement regula-
tions. It permits broader latitude for judgment by contracting officers, but would
hold them fully accountable for the results of their decisions.
TITLE U
AUTHORITY TO TEST NEW CONCEPTS AND
METHODS OF COMPETITION
Title U provides authority and direction for a test of the new concepts and methods
of competition described in Chapter 2, Section 4 of the proposal for a Uniform
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Federal Procurement System. The parameters of this test are further set forth in
special legislation in this Title as the Armed S-rvices Competitive Procurement
Test Act of 198. Similar legislation -- the Federal Property Competitive
Procurement Test Act of 198 -- is being proposed as an emdnement to the
Federal Property and Administrative Services Act.
The Committee believes that the new concepts and method of competition are very
viable, but because of concern by some agencies that such a change should be
tested before it becomes law, the Committee is providing for that test. It is
expected that the test will include a broad range of procuring activities, so that
the results will provide a firm basis for decision with respect to further legislation.
While the test should be conducted along the parameters set forth, the
Administrator for Federal Procurement Policy is authorized to vary these param-
eters as necessary to ensure a fair and valid test.
COMPETITION
Section 201 states the short title of the Act, the Armed Services Competitive
Procurment Act of 198.
Section 203(a) requires that bids shall be solicited from prospective sources to
ensure effective competition in obtaining needed property or services. "Effective
competition" is a marketplace condition in which two or more independent firms,
each with a reasonable expectation of winning, can bid to obtain a contract. Bids
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shall be solicited from a sufficient number of sources to enable the Government to
acquire property or services at reasonable prices. At the same time, consideration
shall be given to conducting the solicitation process in a manner which stresses
both fairness to competing bidders and administrative (including cost) efficiency.
Under the present law there has been some question with respect to whether the
requirement for competition in advertised procurements applies as well to procure-
ments which are solicited under negotiation procedures. This section makes it
clear that competition shall be solicited in all procurements, unless explicitly
excepted. This general rule is not dependent upon the type of solicitation
procedure under which the procurement is conducted.
This section also requires that functional specifications shall be used in describing
agency needs except in circumstances where conditions or circumstances require
the use of detailed specifications. "Functional specifications" are defined in
Section 206 of Title U. In many procurements the Government's needs are
described in great detail rather than in terms of the type of function or
performance required by the Government. Detailed specifications tend to restrict
competition by limiting the number of suppliers who can perform the basic needs of
the Government. By using detailed specifications the Government also may
preclude itself from taking advantage of alternative products or services which can
satisfy the Government's basic needs at lower cost.
Section 203(a)(2) sets forth seven exceptions to the rule in subsection (a)(1) that
effective competition shall be obtained in each procurement. Noncompetitive
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procurements are permissible in only the specified circumstances. If an executive
agency does not compete a procurement, it nevertheless must assure itself that it
is obtaining needed property or services at prices which are fair and reasonable.
Section 203(a)(2XA) permits a noncompetitive procurement when the property or
service is available only from a single source and no competitive alternatives are
available. If the Government's needs can be fulfilled through competition by, for
example, changing from a design specification to a functional specification,
altering the terms and conditions of the contract or modifying the requirement,
noncompetitive procurement would not be permissible if the choice of alternatives
would not substantially impair the Government's fulfillment of its needs. This
section permits the acceptance of unsolicited proposals which offer truly unique or
innovative solutions to Government needs. However, if alternative solutions are
available, a competition should be conducted to ensure that the best idea is chosen.
Section 203(a)(2)(B) permits noncompetitive procurements under emergency
conditions which do not permit the delay inherent in competitive bidding. A
serious emergency would include, for example, a situation which threatens imme-
diate harm to public health or safety. Abbreviated competitive solicitation
procedures shall be used in lieu of a noncompetitive procurement when practicable
under the circumstances.
Section 203(a)(2)(C) permits a noncompetitive award under three circumstances:
(1) in order to create or maintain an essential industrial capability; (2) for purposes
of industrial mobilization; or (3) because it is impracticable or uneconomical to
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obtain competition for follow-on procurement. This authority may be used where
it is necessary to train, continue in production, or keep in business facilities or
suppliers which are vital to national programs or to assure their availability in the
event of a national emergency. This authority may also be used to maintain
properly balanced sources of supply for meeting the requirements of procurement
programs in the interest of industrial mobilization. Moreover, this authority may
be used where it would be uneconomical to the Government to award anyone else
than the contractor who has been established as a source under a previous
competitive solitication. In developing new major systems, it is sometimes
necessary to invest millions of dollars in a sustained hardware design and
demonstration competition before award of an initial production quantity. In such
cases, the time and efort invested by the winning contractor, including investment
in tooling, test equipment and plant modernization, precludes competing follow-on
quantities.
Section 203(a)(2)(D) permits an executive agency to award a contract where an
international agreement directs the source of supply or the source of supply is
fulfilled from a source requested by a foreign Government. This section would
apply to the Department of Defense foreign military sales program.
Section 203(a)(2)(E) permits a noncompetitive procurement when a statute requires
the procurement to be obtained through a specified person or another Federal
agency. This section would apply for example to agency contracts with the Small
Business Administration under section 8(a) of the Small Business Act and to the
purchase of blind-made products.
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Section 203(aX2)(F) would allow a noncompetitive procurement when disclosure to
more than one person of the property or service to be obtained would jeopardize
the national security. This exception is to be used only under very limited circum-
stances and approved at a high agency level.
Section 203(a)(2)(G) would permit an agency to enter into a noncompetitive
procurement when it is impracticable to obtain competition. This exception is not
intended to give agencies an open door to continue past noncompetitive practices,
but rather, to permit noncompetitive procurement in exceptional circumstances
where competition is impracticable. Use of this exception will require approval by
the agency head at a level not below Assistant Secretary.
Subsection 203(aX3) requires that each noncompetitive procurement which exceeds
the ceiling for small purchases shall be approved in writing by an agency official
whose position is higher than that of the contracting officer. A determination to
award a contract under section 203(a)(2)(G) shall be made only by the head of the
agency at a level not below that of Assistant Secretary.
EVALUATION OF BIDS
Section 203(b) provides in paragraph (1) that a bid to supply property or services
shall be evaluated based on (A) the offered price of the property or services and
other price-related factors; (B) the total cost of the property or service to the
Government and (C) the offered price or cost of the property or service and other
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evaluation factors. Although a priority is not established for use of the evaluation
methods, a method should be chosen which is most appropriate for the circum-
stances of the procurement.
Solicitations should be evaluated on the basis of lowest price to the Government
when an analysis of the marketplace indicates that equal or similar products or
services are available which can satisfy agency needs and which can be evaluated
on a common basis. Bids should be evaluated on the basis of the lowest total cost
to the Government when an analysis indicates that competing products or services
would differ significantly in performance. Total cost analysis would permit the
consideration of such factors as operating and maintenance costs, energy consump-
tion, product life, reliability, and safety. This evaluation method would permit the
award of a contract for a product that was higher in price than competing products
provided that the overall cost to the Government was lower.
The final or "multiple factors" evaluation method should be used when (1)
Government needs cannot be precisely described; (2) a well-defined solution to the
Government's needs does not exist; (3) evaluation factors for award cannot be
objectively measured; or (4) technical or management performance is critical. This
method permits the evaluation of new ideas, productivity improvements, new
products and cost factors, as well as a bidder's technical and management ability.
Section 203(b)(2) provides that bids shall be evaluated without discussions with
bidders when the Government's requirements and terms and conditions of the
contract can be sufficiently described in the solitication to allow the timely
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preparation and evaluation of bids on a common basis without the need to hold
discussions with bidders. When bids are evaluated without discussion on the basis
of price, this method equates to the formal advertising procedure under the prior
law. If variations in quality and ownership costs can be objectively quantified in
advance, the bidding without discussion method may also be used when bids are to
be evaluated on the basis of lowest total cost to the Government.
Section 203(b)(3) states that bids shall be evaluated with discussions whenever it is
necessary to discuss the Government's requirements or the terms and conditions of
the proposed contract with bidders after receipt of bids but prior to award of the
contract. Normally, this method will be used when evaluation of bids is to be based
on a multiplicity of factors or on the basis of lowest total cost when variations in
quality and ownership costs cannot be objectively quantified in advance. Awards
on the basis of price will, in almost all cases, be made without discussions after a
public bid opening. In such cases, no discussion will be permitted after the opening.
However, there may be instances where the Government's knowledge of the market
is not adequate to allow it to commit itself unequivocally to accept the lowest bid
or to foreclose the possibility of discussions with bidders before awarding a
contract. In these cases, the solicitation will clearly indicate that the Government
reserves the right to discuss prices, and the bid opening will not be public.
This section continues the requirement in the prior law that oral or written
discussions shall be conducted with all responsible bidders who submit bids within a
competitive range. Such discussions need not be conducted where it can be
demonstrated from either the existence of effective competition or accurate prior
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cost experience that the acceptance of a bid without discussion would result in fair
and reasonable prices. If discussions are not held, the solicitation must have
notified all bidders of the possibility that award could be made without discussions.
The requirement of this section for written or oral discussions need not be applied
to procurements in implementation of authorized set-aside programs.
Subsection 203(b)(4) permits combining the evaluation methods in subsections (b)(2)
and (b)(3) whenever it would be beneficial to conduct the evaluation of bids in
succession. A procedure similar to "two-step formal advertising" contained in the
current procurement regulations would be permitted under this subsection.
SOLICITATION AND AWARD OF CONTRACTS
Section 203(c) sets forth requirements for the solicitation and award of contracts.
Section 203(c)(1) requires that each solicitation shall contain a description of all
evaluation factors which are reasonably expected to have a bearing on selection for
award and shall set forth the relative order of importance of these factors in the
evaluation process. This section does not require an agency to disclose in
solicitations the numerical weights which may be employed in the evaluation of
bids.
Section 203(c)(2) states that bids shall be opened publicly at a time and place
stated in the solicitation when an agency chooses to solicit bids in accordance with
the bidding without discussion method. The Committee intends that the decisional
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law which interprets the same requirement for public bid opening under present law
shall apply to this section. The requirement for public bid opening does not apply
when an agency, in accordance with section 203(b)(3), selects the bidding with
discussion solicitation method but does not conduct discussions after bids have been
received.
This section also continues the "firm bid rule" as developed under the present law
by prohibiting bidders from withdrawing bids while they are under consideration for
award by the Government, after bid opening, during a period which has been
identified in the solicitation.
Subsection 203(c)(2) also confers on executive agencies the authority to permit
withdrawal or modification of a bid in case of mistake. This authority had
previously been delegated to executive agencies. See 38 Comp. Gen. 177 (1958).
The Committee does not intend, however, to amend the jurisdiction of the federal
courts or the General Accounting Office established under present law to question
the correctness of any administrative determination made 'under this section.
Section 203(c)(3) states that bids are to be awarded to the responsible bidder whose
bid is reponsive to the solicitation and whose bid has been evaluated as being the
most advantageous to the United States. Bids are to be evaluated in accordance
with one of the three categories set forth in section 203(b)(1): (A) price (including
price-related factors); (B) total cost to the Government; (C) or other evaluation
factors in addition to price or cost. Bids which are evaluated on the basis of price
alone (including other price-related factors) must be awarded to the lowest,
responsive and responsible bidder.
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This section also requires that notice of award shall be given to the bidder chosen
for award and to all unsuccessful bidders. This section continues the present law
by permitting an agency to reject all bids if it determines that such rejection would
be in the public interest.
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AMENDMENTS NECESSITATED BY THE
PROPOSED FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT
(1) Amendment of 15 U.S.C. S631b(b)
Section 303 of Title III of the Act of July 2, 1980 (94 Stat. 848, 15 U.S.C.
S631b(b), is amended by striking "$10,000" and inserting in lieu thereof $25,000.
The amended section would read:
"(b) The President also shall transmit simultaneously as an appendix to
such annual report, a report, by agency and department, on the total
dollar value of all Federal contracts exceeding $I8,000 $25,000 in
amount and the dollar amount (including the subcontracts thereunder) in
excess of $i97999 $25,000) awarded to small, minority-owned and
female-owned businesses.
The effect of the amendment is to raise the threshold for reporting to
comport with the small purchase dollar threshold set forth in the proposed Act.
(2) Amendment of 15 U.S.C. S637(d)(2)(A)
Section 8 of the Act of July 18, 1958, as amended October 24, 1978 (92 Stat.
1767, 15 U.S.C. 5637(d)(2)(A)), is amended by striking "$10,000" and inserting in lieu
thereof $25,000.
The amended section would read:
"(d) (1) It is the policy of the United States that small business
concerns, and small business concerns owned and controlled by socially
and economically disadvantaged individuals, shall have the maximum
practicable opportunity to participate in the performance of contracts
let by any Federal agency.
(2) The clause stated in paragraph (3) shall be included in all
contracts let by any Federal agency except any contract which --
(A) does not exceed $49;899 $25,000;
(B) including all subcontracts under such contracts will be
performed entirely outside of any State, territory, or possession
of the United States, the District of Columbia, or the Common-
wealth of Puerto Rico; or
(C) is for services which are personal in nature."
The effect of the amendment is to raise the threshold for inclusion of the
requirements of the Small Business and Minority Business subcontracting clause to
comport with the small purchase dollar threshold set forth in the proposed Act.
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(3) Amendment of 15 U.S.C. 5644(g) and (j)
Section 15 of the Act of July 18, 1958, as amended October 24, 1978 (92 Stat.
1770, 15 U.S.C. ?644(g)), is amended by striking "$10,000" in the first sentence and
inserting in lieu thereof $25,000.
The amended section 644(g) would read:
Goals for participation of small business concerns in
procurement contracts
(g) The head of each Federal agency shall, after consultation with the
Administration, establish goals for the participation by small business con-
cerns, and by small business concerns owned and controlled by socially and
economically disadvantaged individuals, in procurement contracts of such
agency having values of $19;999 $25,000 or more. Goals established under
this subsection shall be jointly established by the Administration and the head
of each Federal agency and shall realistically reflect the potential of small
business concerns and small business concerns owned and controlled by
socially and economically disadvantaged individuals to perform such con-
tracts and to perform subcontracts under such contracts. Whenever the
Administration and the head of any Federal agency fail to agree on
established goals, the disagreement shall be submitted to the Administrator
of the Office of Federal Procurement Policy for final determination.
The effect of the amendment is to raise the threshold for procurement
contracts being considered which establish Federal agency small and disadvantaged
business contracting goals to comport with the threshold for small purchases set
forth in the proposed FPASA.
The amended section 644(j) would read:
Small purchase procedures
(j) Each contract for the procurement of goods and services which
has an anticipated value of less than $}9;689 $25,000 and which is subject to
small purchase procedures shall be reserved exclusively for small business
concerns unless the contracting officer is unable to obtain offers from two or
more small business concerns that are competitive with market prices and in
terms of quality and delivery of the goods or services being purchased. In
utilizing small purchase procedures, contracting officers shall, wherever
circumstances permit, choose a method of payment which minimizes paper-
work and facilitates prompt payment to contractors.
The effect of the amendment is to raise the threshold for "small business
small purchase set asides" to comport with the small purchase threshold set forth
in the proposed FPASA.
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(4) Amendment of 31 U.S.C. ?686(a)
Section 7(a) of the Act of May 21, 1920, as amended June 30, 1932 (47 Stat.
417; 31 U.S.C. ?686(a)) is amended by --
(1) striking out the word "or" before the word "equipped" and
inserting a comma in lieu thereof;
(2) inserting the words ", or to obtain by contract" after the word
"render";
(3) striking out "competitive bids" in such second proviso and
inserting in lieu thereof "contract."
"further" (4)striking out the first proviso in such section, and by striking out
in the second proviso.
The amended section would read as follows:
"(a) Any executive department of independent establishment of the
Government, or any bureau or office thereof, if funds are available therefor
and if it is determined by the head of such executive department, establish-
ment, bureau, or office to be in the interest of the Government so to do, may
place orders with any other such department, establishment, bureau, or office
for materials, supplies, equipment, work, or services, of any kind that such
requisitioned Federal agency may be in a position to supply, equipped to
render, or obtain by contract, and shall pay promptly by check to such
Federal agency as may be requisitioned, upon its written request, either in
advance or upon the furnishing or performance thereof, all or part of the
estimated or actual cost thereof as determined by such department, estab-
lishment, bureau or office as may be requisitioned; but proper adjustments on
the basis of the actual cost of the materials, supplies, or equipment
furnished, or work or services performed, paid for in advance, shall be made
as may be agreed upon by the departments, establishments, bureaus, or
offices concerned: Provided. That the Department of Army; Navy Bepart-
ment; Treasury Department; Federai Aviation Administration,- and the
Federal Maritime Eommissien may plaee orders, as provided herein, for
materials; supplies; equipment, work-, or serviees of any kind that any
requisitioned Federal Ageney may be in a position to supply, or to render or
to obtain by eentraet. Provided further-, That if such work or services can be
as conveniently or more cheaply per ormed by private agencies such work
shall be let by contract to such private agencies. Bills rendered, or requests
for advance payments ade, pursuant to any such order, shall not be subject
to audit or certification in advance of payment.
The effect of the amendment is to permit all executive departments and
agencies to obtain property or services through interagency agreements by either
agency in-house capability or by contract under the authority of the proposed
FPASA. The amendment is not intended to authorize an agency to augment its
staff to procure or provide such materials, supplies, equipment, work, or services.
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(5) Amendment of 41 U.S.C. S5
Section 5 of the Act of August 2, 1946, as amended July 25, 1974 (88 Stat.
390; 41 U.S.C. S5) is amended by striking "$10,000" in exception (1) and inserting in
lieu thereof, "$25,000."
The amended statute would read:
S5. Advertisements for proposals for purchases and contracts for
supplies or services for Government departments; application to Government
sales and contracts to sell and to Government corporations
Unless otherwise provided in the appropriation concerned or other law,
purchases and contracts for supplies or services for the Government may be
made or entered into only after advertising a sufficient time previously for
proposals, except (1) when the amount involved in any one case does not
exceed $18;888 $25,000, (2) when the public exigencies require the immediate
delivery of the articles or performance of the service, (3) when only one
source of supply is available and the Gaovernment purchasing or contracting
officer shall so certify, or (4) when the services are required to be performed
by the contractor in person and are (A) of a technical and professional nature
or (b) under Government supervision and paid for on a time basis. Except (1)
as authorized by section 1638 of Appendix to Title 50, (2) when otherwise
authorized by law, or (3) when the reasonable value involved in any one case
does not exceed $500, sales and contracts of sale by the Governmeht shall be
governed by the requirements of this section for advertising.
In the case of wholly owned Government corporations, this section shall apply
to their administrative transactions only.
(6) Amendment of 41 U.S.C. 56a-l
Section 101 of the Act of July 27, 1965, as amended July 25, 1974 (88 Stat.
390, 41 U.S.C. S6a-1) is amended to strike "$10,000" and insert in lieu thereof
"$25,000."
The statute, as amended, would read:
S6a-1. Same; Architect of the Capitol
On and after July 27, 1965, the puchase of supplies and equipment and
the procurement of services for all branches under the Architect of the
Capitol may be made in the open market without compliance with section 5
of this title in the manner common among businessmen, when the aggregate
amount of the purchase or the service does not exceed $}8;888 $25,000 in any
instance.
The dollar amount is raised to be consistent with the small purchase threshold
in the proposed FPASA and 41 U.S.C. S5.
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(7) Amendment of 41 U.S.C. ?45
Section 11 of the Act of June 30, 1936 (49 Stat. 2039, renumbered section 12
of 66 Stat. 308; 41 U.S.C. ?45), is amended to read as follows: "SEC. 12. The
provisions of this Act requiring the inclusion of representations with respect to
minimum wages shall apply only to purchases or contracts relating to such
industries as have been the subject matter of a determination by the Secretary of
Labor."
The present section of the Walsh-Healey Act states:
X45. Same; effective date; exception as to representations with respect to
minimum wages.
"Sections 35 to 45 of this title shall apply to all contracts entered into
pursuant to invitations for bids issued on or after ninety days from June 30,
1936: Provided, however, That the provisions requiring the inclusion of
representations with respect to minimum wages shall apply only to purchases
or contracts relating to such industries as have been the subject matter of a
determination by the Secretary of Labor."
The revised version would be:
"The provisions of this Act requiring the inclusion of representation
with respect to minimum wages shall apply only to purchases or contracts
relating to such industries as have been the subject matter of a determination
by the Secretary of Labor."
The provision is amended to eliminate an obsolete provision applying the
Walsh-Healey Act only to contracts entered into pursuant to invitations to bid.
(8) Amendment of 42 U.S.C. ?1592h
Section 309 of the Act of September 1, 1951 (65 Stat. 307; 42 U.S.C. ?1592h),
is amended by striking out clause (b).
The following deletion in the section is proposed:
"In carrying out this subchapter --
"f $ the east plus a pereentage of east system of eentraeting shai+ net
be used; but eentraefs may be made an a east plus a fixed fee basist.
Prevvded; That the fixed fee shall net exeeed 6 per eentum of the eattmated
eest;s'
Subsection (b) is deleted to eliminate the superfluous reference to cost-plus-
a-percentage-of-cost system of contracting, which is prohibited by the proposed
FPASA, and the profit limitation of 6 percent, which is contrary to the intent of
the proposed FPASA.
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F-2 9
(9) The following Acts shall not apply to a contract or subcontract,
sawarded under this Act, the price of which does not exceed $25,000 or the amount
established for small purchase under section of this Act --
(a) section 1 of the Act of June 30, 1936, as amended December 27,
1979 (93 Stat. 1215, 41 U.S.C. S35);
(b) chapter 1041 of the Act of August 10, 1956, (70A Stat. 146, 10
U.S.C. ?2631);
(c) title III, section 207(a) of the Act of September 7, 1962 (76 Stat.
520, 10 U.S.C. ?2207);
(d) section 3 of the Act of August 3, 1958 (72 Stat. 862, 7 U.S.C.
?1903);
(e) section 2 of the Act of December 22, 1975 (89 Stat. 874, 42
U.S.C. S6201);
(f) section 2 of the Act of October 21, 1976, as amended October 21,
1980 (94 Stat. 2346, 42 U.S.C. ?6962).
(g) title III, sections 2 and 3 of the Act of March 3, 1933 (47 Stat.
1520, 41 U.S.C. 310a-b) and title VI, section 633 of the Act of October 29,
1949 (63 Stat. 1024; 41 U.S.C. S10d)
(h) section 15 of the Act of October 27, 1972, as amended by the Act
of May 31, 1976 (90 Stat. 590, 42 U.S.C. ?4914)
?436)
(i) chapter 645 of the Act of June 25, 1948 (62 Stat. 703, 18 U.S.C.
(j) chapter 645 of the Act of June 25 19
48
,
, as amended by the Act
of October 31, 1951 (65 Stat. 717, 18 U.S.C. ?431)
(k) section 21 of the Act of February 15, 1980 (94 Stat. 43, 49 U.S.C.
?1517)
S874)
(1) chapter 645 of the Act of June 25, 1948 (62 Stat. 740, 18 U.S.C.
The effect of the amendment is to raise the threshold at which the listed
statutory requirements become applicable to Government contracts to the level set
forth for small purchases.
(a) Walsh-Healey Act, 41 U.S.C. ?35
(b) Preference for U.S. Flag Carriers, 10 U.S.C. ?2631
(c) Gratuities, 10 U.S.C. ?2207
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(d) Humane Slaughter of Livestock, 7 U.S.C. 51903
(e) Conservation of Energy, 42 U.S.C. 56361
(f) Recycled Material, 42 U.S.C. S6962
(g) Buy American, 41 U.S.C. SlOa-d
(h) Noise Control Act, 42 U.S.C. 54914
(i) Convict Labor Act, 18 U.S.C. S436
(j) Officials Not to Benefit, 18 U.S.C. 5431
(k) Preference for U. S. Flag Air Carriers, 49 U.S.C. 51517
(1) Copeland "Anti-Kickback" Act, 18 U.S.C. 5874
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TITLE IV
REPEALS NECESSITATED BY THE PROPOSED
FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT
(1) 25 U.S.C. SS96 97
Section 7 of the Act of March 3, 1875, as amended (18 Stat. 450; 25 U.S.C.
S96) is repealed.
496: Copies of eentraets furnished to General Aeeeunting Gf?iee
before payment
u?epies of all eentraets made by the earn missiener of Indian Affairs or
any ether of?ieer of the Government, for the
furnished to the General Aeatin{-its e ~ Sorrier sloe}} be
thereon g ??iee before any payment shall be made
Section 3 of the Act of August 15, 1876, as amended (19 Stat. 199; 25 U.S.C.
?97) is repealed.
u?9 Proposals er bids for eentrets to be preserved
' n all lettings of eontraets in eanneetien with the Indian Service; the
Proposals or bids reeeived shall be filed and preserved; and an abstreet of all
bids or proposals received for the supplies at serviees embraeed in any
eentraet shall be attached to and filed with; the said eontraet when the same
is filed in the General Aeeoanting Offiee:u
Repeal of these provisions would eliminate the requirement contracts, and associated documents, of the Commissioner of Indian Affairs,hor any
other officer of the Government, for the Indian Service, be furnished to GAO
"before any payment shall be made" on the contracts. There would still remain the
provision in 41 U.S.C. ?20 (1970) which states that "all contracts to be made, by
virtue of any law, and requiring the advance of money, or in any manner connected
with the settlement of public accounts, shall be deposited promptly in the General
Accounting Office ...."
(2) 41 U.S.C. S13
Section 3735 of theRevised Statutes (41 U.S.C. ?13) is repealed.
1f3: Centraets limited to one year
uExeept as otherwise provided; it shall net be lawful for any of the
exeetttive departments to make eentraets for stationery or other supplies for
a longer term than one year from the time the contract is made
The repeal of section 13 still leaves a general one year limitation by virtue of
restrictions on the use of annual appropriations in 31 U.S.C. 712a. The proposed
FPASA provides for multi-year contracting in appropriate circumstances.
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(1) Add the following as paragraph (1) on page C-18 of Attachment C and as
paragraph (j) on page E-21 of Attachment E:
"Section 8 of the Small Business Act of 1958, as amended (15 U.S.C. 637(e)),
is amended by deleting subsection (e) in its entirety and inserting in lieu thereof
the following new subsection:
'(e) It shall be the duty of the Secretary of Commerce, and he is
empowered --
(1) to obtain notice of all proposed competitive and
noncompetitive procurement actions of $10,000 and above from any
Federal department, establishment, or agency engaged in procurement
of property and services in the United States; and to publicize such
notices in the daily publication "United States Department of Com-
merce Synopsis of the United States Government Proposed Procure-
ments, Sales and Contract Awards," immediately after the necessity for
the procurement is established and in sufficient time to permit the
preparation and submission of bids; -xcept that nothing herein shall
require publication of such notices with respect to those procurements
(A) which for security reasons are of a classified nature, or (B) which
involve perishable subsistence supplies, or (C) which are for utility
services and the procuring agency in accordance with applicable law has
predetermined the utility concern to whom the award will be made, or
(D) which are of such unusual and compelling emergency that the
Government would be seriously injured if bids or offers were permitted
to be made more than 15 days after the issuance of the solicitation, or
(E) which are made by an order placed under an existing contract, or (F)
which are made from another Government department or agency, or a
mandatory source of supply, (G) in which only foreign sources are to be
solicited, or (H) for which it is determined in writing by the procuring
agency, with the concurrence of the Administrator [of Small Business
Administration], that advance publicity is not appropriate or reason-
able; and
(2) except under inappropriate or unreasonable circumstances
specified, with the concurrence of the Administrator [of Small Business
Administration] in the Government-wide procurement regulation, to
obtain notice of all contract awards in excess of the ceiling for small
purchases and to publish such notice at the time of contract award in
the daily publication in (1) above.'."
(2) Add the following as on page
of Attachment _ and as on page of
Attachment
'Amendment of 15 U.S.C.S637(e).
Section 8 of the Act of September 26, 1961 (75 Stat. 668; 15 U.S.C. 5637(e))
is amended by striking out paragraph (e), which reads:
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It shall be the duty of the Secretary of Gommeree, and he 4s
empowered, to obtain notice of all proposed defense procurement actions of
$18;888 and above; and all civilian procurement actions of $57080 and above,
from any Federal department, establishment, or agency engaged in proeure-
ment of supplies and services in the United States-, and to publicize such
notices 4n the daily publication =United States Department of Gemmeree
Synopsis of the United States Government Proposed Procurements; Sales and
Gentraet Awards- immediately after the necessity for the procurement is
established, except that nothing herein shall require publication of such
notices with respect to these procurements (14 which for security reasons are
of a elassiiied nature, or (03 which involve perishable subsistence supplies, or
(33 which are for utility services and the procuring agency in accordance with
applicable law has predetermined the utility eeneern to whom the award will
be made, or 0) which are of such unusual and compelling emergency that the
Government would be seriously inured if bids or offers were permitted to be
made more than 45 days after the issuance of the invitation for bids or
solicitation for proposals,- er (53 which are made by an order placed under an
existing eontraet or (6) which are made from another Government depart-
ment or agency; at a mandatory source of supply; or which are for
personal or professional services; or (83 which are for services from eduea-
tienel institutions; or (93 in which only foreign sources are to be solicited; or
4483 for which it is determined in writing by the procuring agency; with the
eeneurrenee of the Administrator, that advance publicity is net appropriate
or reasenable'
and substituting in lieu thereof the following new paragraph:
'(e) It shall be the duty of the Secretary of Commerce, and he is
empowered --
(1) to obtain notice of all proposed competitive and
noncompetitive procurement actions of $10,000 and above from any
Federal department, establishment, or agency engaged in procurement
of property and services in the United States; and to publicize such
notices in the daily publication "United States Department of Com-
merce Synopsis of the United States Government Proposed Procure-
ments, Sales and Contract Awards," immediately after the necessity for
the procurement is established and in sufficient time to permit the
preparation and submission of OW, except that nothing herein shall
require publication of such notices with respect to those procurements
(A) which for security reasons are of a classified nature, or (B) which
involve perishable subsistence supplies, or (C) which are for utility
services and the procuring agency in accordance with applicable law has
predetermined the utility concern to whom the award will be made, or
(D) which are of such unusual and compelling emergency that the
Government would be seriously injured if bids or offers were permitted
to be made more than 15 days after the issuance of the solicitation, or
(E) which are made by an order placed under an existing contract, or (F)
which are made from another Government department or agency, or -a
mandatory source of supply, (G) in which only foreign sources are to be
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3
solicited, or (H) for which it is determined in writing by the procuring
agency, with the concurrence of the Administrator [of Small Business
Administration], that advance publicity is not appropriate or reason-
able; and
(2) except under inappropriate or unreasonable circumstances
speci d wit the concurrence of the Administrator [of Small Business
Administration] in the Government-wide procurement regulation. to
obtain notice of all contract away in excess o e cei n for sm
purchases and to publish such notice at the time of contract award in
the daily publication in (1) above.'
The amendments have the effect of standardizing at $10,000 the threshold
for all Federal agencies to publish notice of proposed procurements. The
amendments also make it clear that the notice requirement applies to both
noncompetitive and competitive procurements and that potential bidders are to be
provided sufficient time in which to submit bids in response to a published notice.
The provisions which except the procurement of personal or professional services
or services from educational institutions from the notice requirement are deleted
because experience has shown that such procurements are appropriate for notice.
Subparagraph (2) requires that a notice be published of a contract award in
excess of the ceiling for small purchases established by the proposed ASPA and
FPASA. Such notice need not be published in inappropriate or unreasonable
circumstances which are specified, after coordination with and approval by the
Administator, Small Business Administration, in the Government-wide procurement
regulation'."
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