COMPETITION IN CONTRACTING ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00338R000200260006-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 17
• Document Creation Date: December 21, 2016
• Document Release Date: December 8, 2008
• Sequence Number: 6
• Publication Date: August 6, 1984
• Content Type: MEMO

Approved For Release 2008/12/08: CIA-RDP86B00338R000200260006-8 ) (Z1 ~fi'lt--~
OLL 84-2793
6 August 1984
MEMORANDUM FOR: C/PMS/OL
C/L&PLD/OGC
STATFROM:
Legislation Division
Office of Legislative Liaison
SUBJECT: Competition in Contracting Act
Attached for your information is the relevant portion of
the Spending Reduction Act of 1984 containing the Competition
in Contracting Act (S.338/H.R. 2545). Also attached is the
relevant portion of the conference report.; As you know, the
President signed this bill into law on 18 July 1984 (Pub.L.
98-369).
STAT
STAT cc:
Distribution:
Original - Addressee
1 - C/L&PLD/OGC
STAT 1 -
1 - D/OLL
1 - DD/OLL
1 - OLL Chrono
1 - LEG Subject (Procurement)
1 - ROD Signer
OLL:LEG:ROD:sm (6 August 1984)
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-June 22, 1984
tamed in the substitute. This authorization
is strictly limited to state-of-the-srt propos-
als Which represent advanced scientific
tnoa?ledre.' Even under these conditions,
agencies should seek proposals wherever
possible from competing researchers to
ensure that the best proposal available is se-
lected. The substitute, like the Senate
amendment, therefore. requires that unso-
licited proposals be publicized in the Com-
merce Business Daily unless such publica-
tion would result in the disclosure of the
originality of thought or innovativeness of
the proposed research contained in the pro-
posal.
in the case of follow-on contracts, a sole-
source award under the first exception may
be made for the continued development or
production of a major system.or highly spe-
cialized equipment If award.to other than
the original source would result to substan-
tial duplication of cost that could not be re-
covered through the use of competition, or
unacceptable delays in fulfilling the agen-
cy's needs.
The conferees intend that follow-on con-
tracts be awarded only to incumbent ven-
dors who receive the original contracts fol-
lowing some form of price or technical com-
petition. The conference substitute recog-
nizes that in major systems and highly spe-
dalized equipment acquisitions, there are
situations where the Initial capital invest-
ment could cause substantial duplication of
cost if the contract were awarded to other
than the original source. However, the sub-
stitute requires the agency to determine and
document that such cost cannot be offset by
savings that would result from openly com-
peting the requirement The conferees be-
lieve that a cost/benefit anzJysis is neces-
sary to make a precise determination.
The conferees further note that follow-on
contracts sometimes result when an agency
fails to determine Its original requirements
accurately. The conferees emphasize that
better planning should eliminate this prob-
lem and the resultant need for a sole-source
contract to the incumbent contractor. The
language in the conference substitute
should not be construed as legitimizing sole-
source contracts that are caused by poor
planning.
The conferees also do not intend this pro-
vision to be used to perpetuate any contract
which Involves obsolete or outmoded facili-
ties, systems or processes, including comput-
er systems and software.
(5) Justification and Approval Procedures
Senate amendment
The Senate amendment safeguards
against unnecessary sole-source contracting
by prohibiting agencies from using noncom-
petitive procedures unless (1) the use of
such procedures has been justified in wrlt-
ing, and (2) the agency has provided ad-
vance notice of intent to award a sole-source
contract in the Commerce Business Daily,
inviting bids or proposals from potential
competitors, and has considered all bids or
proposals received in response to such
notice.
Conference substitute
The conference substitute retains the pre-
award notification requirements from the
Senate amendment which agencies must
first meet before a sole-source award can be
made.
In retaining the Senate provisions, the
conferees emphasize that agencies should,
at a minimum, give each bid or proposal re-
ceived in response to the Commerce Bus-i-
ness Daily notice sufficient consideration so
as to be able to make an Informed judgment
about the resporw?lbWty of the bidder and
the responsiveness of the bid.
Agencies are not explicitly required to
Issue solicitation packages to all contractors
who respond to a pre-award notice. This is
not to be interpreted to mean that agencies
are authorized:to deny the distribution of
such packages arhlirarily. The purpose of
the pre-award notice is to open competition
to all offerors who can meet the agency's
needs. To serve this purpose, solicitation
packages should be available upon request.
In situations where competition is not an-
ticipated and solicitation packages have not
been prepared, agencies shall provide poten-
tial competitors who do respond with solici-
tation packages or comparable information.
The conference substitute also strength-
ens the justification procedures in the
Senate amendment and establishes new re-
quirements for approvals of sole-source con-
tracts.
The justification statement required for
each noncompetitive procurement must be
certified as accurate and complete by the
contracting officer responsible for awarding
the contracts. The justification statement
must then be reviewed and approved by
either (1) the procuring activity's advocate
for competition in the case of contracts over
$100.000; (2) the head of the procuring ac-
tivity in the case of contracts over
$1.000,000; or (3) the agency's senior pro-
curement executive in the case of contracts
over $10,000,000. Contracting officer certifi-
cation and review and approval authorities
provided by this substitute cannot be dele-
gated, except as specifically authorized
under this substitute.
All determinations and decisions required
for use of the exceptions to competitive pro-
cedures provided In this substitute are to be
made on a case-by-case basis. Broad catego-
ries or classes of products and services
cannot be exempt from competitive proce-
dures.
In the event of an unusual and compelling
urgency, the required justification and ap-
provals may be made after the contract has
been awarded. Similarly, such justifications
and approvals are not required when the
head of an agency determines and reports to
Congress that it is-in the public interest to
conduct a noncompetitive procurement, or a
procurement is conducted in accordance
with the Wagner-O'Day Act (41 U.S.C. i 46
et seq.).
The justifications and related documenta-
tion are required to be made available to the
public. While these disclosures should be
made consistent with the provisions of the
Freedom of Information Act (5 U S.C.
1552), the conferees intend that the Act's
exemption for internal memoranda not be
used to shield these documents from public
disclosure. The use of the term "consistent
with" is designed merely to ensure that na-
tional security, law enforcement, and other
sensitive information is not publicly dis-
closed.
The conference sustitute places additions)
prohibitions and restrictions on the use of
procedures other than competitive proce-
dures. Noncompetitive procurements may
not be justified on the basis of concerns re-
garding the future availability of funding'
This prohibition is designed to prevent the
year-end spending abuses that occur when
agencies are faced with large amounts of un-
expended appropriations At the end of the
fiscal year. Under this situation, agencies
rush to sign a contract with a vendor on a
sole-source basis in order to avoid having to
turn money bark to the Treasury. The con-
ferees find this practice to be unconscion.
able. Similarly, the substitute prohibits the
use of the lack of advance planning as a jus-
tification for using noncompetitive prac-
tices. The conferees reject the assertions
made by some z ency procurement officials
-, E H 6757
that this is a legitimate reason to curtail
competition. A contrary conclusion would
legitimize unacceptable management prac-
tices.
The substitute also prohibits an agency
from procuring its goods and services from
another agency unless that agency has com-
plied with the requirements of the substi-
tute. The substitute Includes this prohibi-
tion to prevent one agency from acquiring
Its goods and services from another agency's
sole-source contract without having to justi-
fy a noncompetitive procurement itself.
This restriction is in addition to, not in lieu
of, any other restriction provided by law. In-
cluding the Economy Act of 1932 (31 U.S.C.
1686(a)).
(4) Small Purchax Procedures
Senate amendment .
- The Senate amendment recognizes that
the competitive procedures required of large
pruchases may not be appropriate for small
purchases. The Senate amendment there-
fore provides a basis In statute for regula-
tions to establish separate small purchase
procedures, allowing agencies to scale down
their efforts as lo-%g as they obtain reasona-
ble competition.
Coniference substitute
The small purchase '-provisions of the
Senate amendment are retained under the
conference substitute in a separate subsec-
tion. Within this new subsection, agencies
are required to promote competition to the
maximum extent practicable when using
small purchase procedures. The regulations
issued pursuant to this subsection are to be
incorporated into the government-wide Fed-
eral Acquisition Regulation consistent with
current statute.
(7) Planning and Solicitation Procedures
Senate amendment
The Senate amendment requires agencies,
as part of the affirmative effort to obtain
competition, to use advance procurement
planning, conduct market research, and de.
velop nonrestrictive specifications.
Conference substitute
The conference substitute retains these
requirements contained In the Senate
amendment, but applies them as planning
requirements for all procurements-com-
petitive and noncompetitive.
The substitute also retains the broad
guidelines set forth in the solicitation sec-
tion of the Senate amendment for agencies
to follow in defining their needs in order to
maximize, rather than limit, competition.
The substitute authorizes agencies to speci-
fy their needs in either functional, perform.
once, or detailed design terms, whichever
will ensure timely performance and will pro-
mote the use of full and open competition.
Wherever practical, the conferees strongly
believe that contractors should be told what
the Government needs in functional terms.
This approach allows the Government to
take advantage of the innovative ideas of
the private sector.
(8) Evaluation and Award Procedures
Senate amendment
The evaluation and award procedures jor_
sealed bids and competitive proposals set
forth in the Senate amendment are largely
the same as those currently required in the
Armed Services Procurement Act and the
Federal Property and Administrative Serv-
Ices Act for formal advertising and negotia-
tion. The amendment clarifies that agencies
shall evaluate sealed bids and competitive
proposals based solely on the factors speci-
fied in the solicitation.
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June 22, 1984 CONGRESSIONAL RECORD - HOUSE
record, which would be trartsaaitted on a
guarterly,b_1& to the Federal procurement
Data System, designates the contractor who
received the award. the property or services
which were obtained, the dollar value, the
reason for using noncompetitive procedures,
and the positions of the individuals in the
procuring agency who required and ap-
proved the sole-souroe award.
Conference substitute
The conference substitute retains the
record requirements of the Senate amend-
ment. again consolidating the amendments
to the defense and civilian procurement
statutes into a uniform provision in the
OFPP Act, but expands application of this
provision to Include all procurements-com-
petitive and noncompetitive=An a computer-
Ized file. This file should be Indexed in a
manner to provide ready access to such in.
formation by other agencies, Congress, and
the public.
(3) Advocate for Competition
Senate amendment
The Senate amendment establishes in
each executive agency the position of advo-
cate for competition with responsibilities for
promoting competition in the agency's pro-
curement process. The agency competition
advocate is designed to be at a sufficiently
high level to directly influence the procure-
ment poilicies and procedures within the
agency, while not being directly responsible
for the individual procurements. The head
of each agency is prohibited from assigning
duties to the competition advocate which
are inconsistent with the advocate's respon.
sibility to promote competition. As such, the
position of competition advocate should not
be assigned to any individual Who is respon-
sible for the Initiation or conduct of any
specific agency procurement.
Conference substitute
The conferees recognize the importance of
the position of competition advocate and
the need to ensure that key Federal officials
at all levels are made aware of the benefits
of competition and become firmly commit,
ted to its use. To further these goals, the
conference substitute expands the agency
advocate's responsibilities and requires the
establishment of an additional advocate for
competition in each procuring activity.
The substitute requires the competition
advocates to challenge barriers to. and pro-
mote full and open competition in, the pro-
curement of property and services. Under
the review and approval procedures estab-
lished by the conference substitute, the pro-
curing activities' competition advocates are
responsible for approving all noncompeti-
tive contract awards which Involve expendi-
and dollar value of noncompetitive con-
tracts., and the activities and accomplish-
ments of the agency's advocate for competi-
tion. IT,
Confer ence'su bs titu to
The conference substitute Incorporates
the annual report requirement from the
Senate amendment and establishes January
31 as the deadline for submission to Con-
gress for fiscal years 1986 through 1990.
(6) Competition Requirement
Senate amendment
The Senate amendment has no compara-
ble provision.
Conference substitute
The conference substitute amends Section
16(1) of the OFPP Act (executive agency re-
sponsibilities) to require the use of full and
open competition in executive agency pro-
curements of property and services. Lan-
guage contained in this substitute requires
agencies., when using competitive proce-
dw-es, to establish policies. procedures, and
practices necessary to ensure that a suffi-
cient number of sealed bids or competitive
proposals are received from resporu ible
sources to fulfill the government's regtire-
ments (including performance and delivery
schedules) at the lowest reasonable cost
considering the nature of the property or
services procured. This requirement applies
to all agency procurements. including those
made under set-aside programs.
Subtitle D-Amendments to the Budget and
Accounting Act
Section 2T51-Procurement Protest System
Senate amendment
The Senate amendment contains no provi-
sions regarding the General Accounting
Office bid protest system.
Conference substitute
The conferees believe that a strong en-
forcement mechanism is necessary to insure
that the mandate for competition is en-
forced and that vendors wrongly excluded
from competing for government contracts
receive equitable relief. To accomplish this.
the conference substitute adds a new sub-
chapter to Chapter 35 of Title 31, United
States Code, which codifies and strengthens
the bid protest function currently in oper-
ation al the General Accounting Office
(GAO). The provisions of this section
become effective on Janaury 15, 1985.
The conference substitute establishes an
enforcement mechanism keyed to the proce-
dures contained in the Senate amendment
for solicitation, notice, evaluation, and
award. The procurement protest system fur-
ther relies on record requirements in the
Senate amendment, as expanded in the con-
$1,000.000. Further, the agency advocate is ference substitute, to insure the availability
given the additional responsibilities of rec-' of information needed not only by the
ommending to the agency's senior procure-
ment executive (1) goals and plans for in-
creasing competition on a fiscal-year basis,
and (2) a system of personal and organiza-
tional accountability designed to encourage
the procurement workforce to emphasize
competition.
The conferees recommend that the per-
formance ratings of procurement personnel
include an appraisal of their efforts to pro-
mote competition in agency procurements.
(4) Annual Report on Competition
Senate amendment
The Senate amendment requires the head
of each executive agency to issue an annual
report to Congress on the agency's use of
competition in contracting. Specifically, the
report should provide an overview of the ac-
tions taken by the agency to Increase com-
petitive contracting and reduce the number
Comptroller General to make determina-
tions in procurement protests, but also by
interested parties to identify, and initiate
action against, solicitations and awards
The Comptroller General is not given ex-
clusive authority to hear protests. The con-
ferees do not intend, for example, that 'the
GAO decide matters dealing with the Small
Business Administration's responsibilities
under the Small Business Act to establish
industry size standards or to issue Certifi-
cates of Competency to small businesses. Fl-
nally. Interested parties with recourse to the
General Services Administration Board of
Contract Appeals in disputed computer pro-
curements may not protest the same action
to both the GAO and the GSA board.
Any actual or prospective bidder of of-
feror whose direct economic interest would
be affected by the award of or failure to
H 6759
award a procurement contract by an execu.
tive agency may challenge the agency's so-
licitation, award or proposed award by filing
a protest with the Comptroller General.
Final agency determinations under section
307 of tht Federal Property and Administra.
tive Services Act and section 2310 of title 10,
United States Code, may be the subjects of
protests to GAO. the courts, and where ap-
propriate, the GSA board.
Once a protest has been filed with OAO,
the Comptroller General shall notify the
executive agency Involved within one day of
receipt of the protest. The executive agency
then has 25 working days (10 if the Comp-
troller General selects the "express option")
to respond. the Comptroller General must
issue his opinion within 90 working days (45
calendar days under the express option).
The Comptroller General may extend the
deadlines when appropriate for specific pro-
tests, on a case-by-case basis; the conferees
regard such extensions as exceptional, how-
ever, and to be used in unique circumstances
only.
If, when a protest is filed, the contract in
question has not yet been awarded, an
award may not be made unless the head of
procuring activity- responsible finds and re-
ports to the Comptroller General that
urgent and oompelling'circumst.ances which
significantly affect the interests of the
United States will not permit awaiting the
Comptroller General decision. (This finding
may be made only if the award is likely to
occur within 30 calendar days.) If a protest
is filed within 10 daps after award of the
contrast, performance shall cease and all re-
lated activities which may result in addi-
tional obligations being incurred by the
United States must be suspended, unless the
head of the procuring activity Lnforats the
Comptroller General that urgent and com-
pelling circumstances which significantly
affect interests of the United States will not
permit waiting for the Comptroller Gener-
al's decision, or that performance of the
contract is in the best interest of the United
States.
Before notifying the Comptroller General
that continued performance of a disputed
contract is in the government's best inter-
est, however, the head of the procuring ac-
tivity should consider potential costs to the
government from tarrying out relief meas-
ures as may be recommended by the Comp-
troller General if the protest is subsequent-
ly sustained This is to Insure that if the
Comptroller General sustains a protest,
such forms of relief as termination, recom-
petition, or re-award of the contract will be
fully considered for recommendation. Agen-
cies in the past have resisted such recom-
mendations on the grounds that the govern-
ment's best interest would not be served by
relief measures of this sort because of the
added expenses involved. This provision is
designed to preclude that argument in the
future, and thus to avoid prejudicing those
relief measures in the Comptroller Gener-
al's review.
if the Comptroller General determines
that a protested procurement action has in-
volved government non-compliance with
statutes or regulations, the Comptroller
General is required to recommend correc-
tive action to the executive agency resfionSi-
ble, and the head of the procuring activity
Involved must notify the Comptroller Gen-
eral if the agency has not Implemented the
recommendations within 60 calender days.
This provision does not preclude the Comp-
troller General from requesting the agen-
cies to notify the GAO of the status of any
other recommendation. An annual report of
all notifications received by the Comptroller
General, describing each instance of non-im-
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