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Managing America: Government

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Week Ending March 16, 2006

H.R.1362 To reform acquisition practices of the Federal Government.

Any number of individuals, businesses, organizations and foreign governments contract with the Federal Government to provide products and services. Oversight of that spending is sometimes lacking resulting in a misuse or outright theft of taxpayer dollars. This bill tries to reduce the opportunity to abuse government contracts.

Non-competitive, sole-source and cost-reimbursement contracts are the most likely to be abused because the competition aspect is removed. The bill aims within a year to reduce the abuse potential by minimizing use of those types of contracts. However, the effort would not apply to disadvantaged minority contractors and service disabled veterans as well as projects in HUB Zones.

A plan would be developed and reported within a year to Congress to minimize the use of non-competitive contracts with measurable goals. The plan and goals would be applied only to agencies that awarded contract in a total amount of at least $1 billion in the prior fiscal year.

Agency heads must make public within fourteen days of award any contract awarded on a non-competitive basis. The document will be posted on the agency website and available through the Federal Procurement Data System.

A quarterly report to Congress is ordered from all agencies showing a list of audits or other reports that describe contractor costs in excess of $1 million that have been identified as unjustified, unsupported, questioned or unreasonable under any contract, task or delivery order or subcontract. The report will also show specific amounts of those amounts as a percentage of their total value contract, task, or delivery or subcontract and a list of audits is also required identifying significant deficiencies in the performance of any contractor or in any business system of any contractor under any contract, etcetera. Congress is also to be notified of any sole source contracts awarded to a foreign-owned company based in a country known to sponsor terrorism. The office of Government Ethics is to submit recommendations on requiring government contractors and research centers that advise the government to comply with personal financial interest restrictions.

An additional one percent of the aggregate amount of contracts let out is to be used by the government agency for hiring and training acquisition workforce personnel, contract planning, contract administration and over sight, and contract audits and enforcement.

The bill also amends law to close a loophole that allows former Federal officials to accept compensation from contractors or related entities. The provision requires two years to pass before an official can lobby or consult on such contracts for reward. The official could accept compensation if the contract does not produce the same or similar products or services as the entity or contractor responsible for the underlying contract. The agency’s ethics office must determine that the compensation is not a reward for any action leading to the contract award and will not affect the integrity of the procurement process. The two year requirement applies to individuals who terminate government service after March 31, 2007. Any senior level personnel who would participate personally and substantially in a decision to award a contract are included in the revolving door provisions of the bill. If they enter government service from the private sector they may not administer a contract for their former employer.

The Director of the Office of Government Ethics is to promulgate and carry out enforcement of this bill and monitor and investigate individual and agency compliance

Sponsor:  Rep. Henry A Waxman (D-CA-30^th)

Vote: Passed House 437 to 73 March 15, 2007 (RC 156) A Motion to recommit the bill with instructions was agreed to 309 to 114 March 15, 2007 (RC 155)

Cost to the taxpayers: No cost data given

Earmark Certification:   Not applicable to this bill in its current form

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