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108th Congress Rept. 108-117
HOUSE OF REPRESENTATIVES
1st Session Part 2
SERVICES ACQUISITION REFORM ACT OF 2003
September 3, 2003.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
R E P O R T
[To accompany H.R. 1837]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 1837) to improve the Federal acquisition workforce
and the process for the acquisition of services by the Federal
Government, and for other purposes, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill as amended do pass.
The Amendment.................................................... 2
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Committee Consideration.......................................... 3
Vote of the Committee............................................ 3
Committee Oversight Findings..................................... 3
New Budget Authority and Tax Expenditures........................ 3
Congressional Budget Office Cost Estimate........................ 3
Performance Goals and Objectives................................. 7
Constitutional Authority Statement............................... 7
Section-by-Section Analysis and Discussion....................... 7
Changes in Existing Law Made by the Bill, as Reported............ 9
Markup Transcript................................................ 9
Additional Views................................................. 97
The amendment adopted by this Committee is identical to the
text reported by the Committee on Government Reform shown in
their report filed May 19, 2003 (Rept. 108-117, Part 1).
Purpose and Summary
H.R. 1837, the ``Services Acquisition Reform Act of 2003,''
(SARA) reforms Federal Government acquisition services and
creates an acquisition workforce training program. As part of
these reforms, the bill establishes a program to allow for
exchanges of employees on a temporary basis between Federal
agencies and private sector organizations. Also, the bill
extends to the contracting officers of the various civilian
agencies, including the new Department of Homeland Security,
the same powers available to the Department of Defense in their
dealings with Federal Prison Industries, Inc. (FPI).
Background and Need for the Legislation
The Chairman of the Committee on Government Reform,
Representative Tom Davis, introduced H.R. 1837, the ``Services
Acquisition Reform Act of 2003,'' on April 29, 2003. This
legislation was referred to the Committees on Government Reform
and Armed Services. The Committee on the Judiciary requested a
sequential referral. The bill was referred to the Committee on
the Judiciary for consideration through September 3, 2003.
The bill would reform how the government buys services and
creates an acquisition workforce training program. As the
Committee on Government Reform reported:
[H.R. 1837, The Services Acquisition Reform Act of 2003
(SARA),] will provide our acquisition workforce with
the necessary tools to succeed through a carefully
crafted set of provisions along with training and
insightful management based on results and
accountability. SARA is targeted towards the goal of a
modern, responsive, flexible, market-based acquisition
system that will result in the government leveraging
the best the private sector has to offer at fair and
reasonable prices. SARA will address training of our
acquisition workforce to meet the challenges of the new
service-oriented economy, it will provide for the
adoption of business-like acquisition practices within
the government, facilitate the acquisition of
commercial services by building on the prior reforms in
the acquisition of commercial items and enable our
government to access cutting-edge technology within
today's commercial environment.\1\
\1\ H.R. Rept. No. 108-117, Part I, at 26.
The Committee on Government Reform reported the bill, as
amended, favorably on May 19, 2003. The bill as introduced was
referred to the Committee on the Judiciary because it contains
several substantial provisions that fall within the Committee's
subject matter jurisdiction pertaining to government ethics and
the Federal Tort Claims Act. These provisions apply to an
exchange program for government and private sector acquisition
employees. The details concerning these provisions are set
forth in the section by section analysis.
Additionally, the bill as reported by the Committee on
Government Reform affects FPI. Federal Prison Industries was
first authorized in 1934 to create work opportunities for
inmates in the Federal prison system. Under the FPI program,
all Federal agencies are required to purchase products offered
by FPI, commonly referred to as FPI's ``mandatory source''
rule. FPI, rather than the buying agency, determines if FPI's
offered product and delivery schedule meets the mission needs
of the buying agency. Currently, FPI, rather than the buying
agency, determines the reasonableness of FPI's offered price.
The details of the FPI provisions are set forth in the section
by section analysis.
No hearings were held on H.R. 1837 in the Committee on the
On July 25, 2003, the Committee met in open session and
ordered favorably reported the bill H.R. 1837 with an amendment
by voice vote, a quorum being present. The amendment consisted
of the text of the bill as reported by the Committee on
Vote of the Committee
In compliance with clause 3(b) of Rule XIII of the Rules of
the House of Representatives, the Committee notes that there
were no recorded votes during the Judiciary Committee's
consideration of H.R. 1837.
Committee Oversight Findings
In compliance with clause 3(c)(1) of Rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of Rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of Rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of Rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 1837, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
Congressional Budget Office,
Washington, DC, July 29, 2003.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1837, the Services
Acquisition Reform Act of 2003.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford, who can be reached at 226-2860.
Honorable John Conyers, Jr.
H.R. 1837--Services Acquisition Reform Act of 2003.
H.R. 1837 would amend the laws governing how the Federal
Government procures goods and services. The provisions of the
bill with the largest budgetary effects would expand the
authorized uses of share-in-savings (SIS) contracts by
Government agencies to procure products and services and
establish a fund to train Federal personnel in acquisition and
CBO estimates that expanding the use of SIS contracts would
increase direct spending by $80 million over the 2004-2008
period and by a total of about $450 million over the 2004-2013
period. Enacting the bill would not affect revenues. In
addition, CBO estimates that implementing H.R. 1837 would cost
$28 million over the 2004-2008 period for various
administrative requirements, including a new advisory panel and
council, as well as studies related to procurement issues,
assuming appropriation of the necessary amounts.
H.R. 1837 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of State, local, or tribal
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 1837 is shown in the
following table. The costs of this legislation fall within
budget function 800 (general government).
BASIS OF ESTIMATE
For this estimate, CBO assumes H.R. 1837 will be enacted by
the end of fiscal year 2003. We assume that the necessary
amounts will be appropriated for each year and that outlays
will occur at historical rates for similar programs.
Section 301 would expand the authority for Federal agencies
to use SIS contracts to acquire goods and services. Currently,
the use of those contracts is limited to purchasing information
technology. The bill would allow such contracts to be awarded
for up to 10 years.
A SIS contract is a contracting and funding strategy
whereby a service or product required by an agency is provided
by a private firm without full up-front funding. Instead,
payment for this service or product is made by spending some of
the estimated annual savings generated by the goods or services
provided. Under H.R. 1837, agencies would be authorized to
enter into SIS contracts without sufficient funds available for
the termination cost of the contract if sufficient funds are
available for the first year's payment under the contract. The
bill would limit the amount of such unfunded termination
liability to $10 million per contract (or 50 percent of the
termination costs, whichever is less).
Under current law, agencies are authorized to use a limited
pilot program to enter into SIS contracts to obtain data and
information-processing equipment and services. To date, use of
the pilot program has been very limited. Because H.R. 1837
would broaden the potential use of this contracting mechanism,
CBO expects that its use would become more widespread as
agencies became familiar with it. In the mid-1980's, a similar
contracting mechanism, energy-savings performance contracts
(ESPCs), was authorized by the Congress. Use of ESPCs has
accelerated over time, and today Federal agencies enter into
around $250 million worth of such contracts a year. Based on
the experience with ESPCs, CBO expects that agencies would need
a few years to become familiar with SIS contracts before use of
that type of contract would become common. We estimate that
agencies would agree to acquire about $115 million in goods and
services through SIS contracts over the next 5 years and that
obligations for such acquisitions would grow to $425 million
over the following 5 years.
Because both ESPC and SIS contracts authorize agencies to
commit Federal funds in advance of appropriations, CBO
considers the execution of such contracts to be a form of
direct spending that should be reflected in the budget when
such contracts are entered into and a new Government obligation
is made. CBO's estimate assumes that outlays would be recorded
when the services or equipment are provided (similar to the
budgetary treatment of lease-purchases of buildings and
Spending Subject to Appropriation
CBO estimates that several sections of the bill would
affect spending subject to appropriation. The following
paragraphs discuss those costs.
Funding for Acquisition Workforce Training Fund. The bill
would authorize the establishment of an Acquisition Workforce
Training Fund. Under the bill, 5 percent of the fees collected
by the General Services Administration (GSA) from other,
nondefense agencies that procure goods and services through
GSA's Governmentwide contracts would be deposited in the new
fund. GSA generates most of those fees by charging other
Federal agencies approximately 1 percent of the cost of
purchases made through GSA's supply schedule services and data
processing contracts. That fee is designed to recover
administrative costs incurred by GSA. In 2002, GSA collected
$88 million in fees from agencies other than the Department of
Defense. Thus, CBO estimates that the bill would authorize GSA
to charge agencies a fee sufficient to establish a $5 million
Acquisition Workforce Training Fund each year, as well as
continuing to cover the administrative costs of GSA's
Governmentwide contracting programs.
Government-Industry Exchange Program. H.R. 1837 would
establish an exchange program for certain types of employees
between the Federal Government and private-sector employers to
promote acquisition management skills. The bill would allow the
exchange of employees for between 6 months and 2 years.
Private-sector employers could be reimbursed for all or part of
their employees' assignment with the Federal Government.
Alternatively, H.R. 1837 would allow Federal agencies to accept
voluntary employment services from private-sector employees.
Based on information from GSA and the experience of similar
exchange programs, CBO expects that few private-sector
employers would be willing to part with such employees for
extended periods of time. Thus, we estimate that this provision
would not result in significant additional costs to the
Government. Any costs for reimbursing private-sector employers
would be subject to the availability of appropriated funds.
Other Costs. H.R. 1837 also would establish a new advisory
panel to review procurement policies, a Chief Acquisition
Officers Council, and a center of excellence in the Office of
Federal Procurement Policy. The bill would require various
implementing regulations to be issued by GSA, the Office of
Personnel Management, and the Office of Management and Budget.
In addition, the bill would require the General Accounting
Office to prepare certain studies for the Congress on
procurement issues. In total, CBO estimates that preforming
those responsibilities would cost $1 million per year over the
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 1837 contains no intergovernmental or private-sector
mandates as defined in UMRA and would not affect the budgets of
State, local, or tribal governments.
PREVIOUS CBO ESTIMATE
On May 14, 2003, CBO transmitted a cost estimate for H.R.
1837 as ordered reported by the House Committee on Government
Reform on May 8, 2003. The two versions of the bill are
similar, and our cost estimates are identical.
ESTIMATE PREPARED BY:
Federal Costs: Matthew Pickford and Lisa Cash Driskill (226-
Matthew Schmit (226-2840)
Impact on State, Local, and Tribal Governments: Sarah Puro
Impact on the Private Sector: Paige Piper/Bach (226-2940)
ESTIMATE APPROVED BY:
Peter H. Fontaine
Deputy Assistant Director for Budget Analysis
Performance Goals and Objectives
The provisions of H.R. 1837 which the Judiciary Committee
has jurisdiction over does not authorize funding. Therefore,
clause 3(c)(4) of Rule XIII of the Rules of the House of
Representatives is inapplicable.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8, of the United States
Section-by-Section Analysis and Discussion
H.R. 1837 was referred to the Judiciary Committee because
of its jurisdiction over sections 103 and 215. For a
description of the other provisions of the bill, please refer
to the report of the Committee on Government Reform. (H. Rept.
No. 108-117, Part I)
Sec. 103. Government-Industry Exchange Program.
Section 103 of this bill amends Subpart B of part III of
title 5 of the United States Code by adding Chapter 38--
Acquisition Professional Exchange Program. Specifically,
section 103 establishes a program to allow for exchanges of
high performing acquisition employees on a temporary basis
between Federal agencies and private sector organizations. The
Committee's jurisdiction is based on the criminal provisions
related to the ethics requirements for Federal employees. The
section has criminal, ethical, and tort provisions identical to
those included in the Digital Tech Corps Act of 2002, which
created a government-industry exchange program for high-tech
The purpose of section 103 and the bill generally is to
promote more efficient and effective government. Section 103
allows an agency employee to be assigned to a private sector
organization or a private sector employee to be assigned to an
agency. To be eligible the employee has to be an exceptional
performer in the field of Federal acquisition and is expected
to assume increased acquisition management responsibilities
within the Federal Government.
This program benefits the participating agencies by
exposing the acquisition components of these agencies to the
very best practices of the private sector. It exposes the
private sector participants to the special procurement
requirements and processes of the Federal Government.
Under this section, public employees who are temporarily
sent to the private sector would remain under the protections
of the Federal Tort Claims Act, a matter which falls within the
Committee on the Judiciary's Rule X jurisdiction. Also, under
this section, private sector employees who are temporarily sent
to the government would receive the protections of the Federal
Tort Claims Act as well as coming under a variety of government
ethics statutes, including Title 18 provisions, both matters
which fall within the Committee on the Judiciary's Rule X
jurisdiction. Private-sector employees could still be paid by
the private-sector but would be considered a Federal employee
for most purposes. Federal employees would only be assigned
pursuant to a program developed by the Office of Federal
Procurement Policy and the Office of Personnel Management.
Sec. 215. Products of Federal Prison Industries Procedural
Under FPI's 1934 authorizing statute, it is the mandatory
source for purchases by all Federal agencies of the products
FPI makes. Federal contracting officers must purchase products
offered by FPI, unless FPI authorizes, through the granting of
a ``waiver,'' solicitation of competitive offers from the
private sector. The decision as to whether to grant a waiver is
made by FPI, rather than the buying agency. FPI determines
whether FPI's offered product and delivery schedule meets the
mission needs of the buying agency. FPI, rather than the buying
agency, determines the reasonableness of FPI's price.
The only limitation, under current law, is that FPI's
offered price cannot exceed the highest price for a comparable
item offered to the Federal Government by the private sector.
FPI, rather than the buying agency, makes the determination of
comparability. The result is that under FPI's current
authorizing statute, businesses and their non-inmate workers,
are foreclosed from even being able to bid on Federal contract
opportunities funded with their tax dollars.
Section 215 would extend to the contracting officers of the
various civilian agencies, including the new Department of
Homeland Security, the same powers available to the Department
of Defense in its dealings with FPI. It will better enable them
to get the ``best value'' for the taxpayer dollars being
expended with FPI. Specifically, this section amends Title III
of the Federal Property and Administrative Services Act of
1949, which governs procurement by the civilian agencies.
Section 215 will--
(a) make explicit that a contracting officer is fully
empowered to determine if a product offered by FPI is
``comparable to products available from the private
sector that best meet the Department's needs in terms
of price, quality, and time of delivery;''
(b) provide a contracting officer access to the full
range of ``market research'' tools to make the required
comparability determination and full discretion on how
to use such tools;
(c) make explicit that the full range of competitive
procurement techniques are available to a contracting
(d) preclude FPI staff from challenging a contracting
officer's determination regarding the comparability of
a product offered by FPI; and
(e) empower contracting officers to ensure that FPI
``performs its contractual obligations to the same
extent as any other contractor.''
Changes in Existing Law Made by the Bill, as Reported
The bill was referred to this Committee for consideration
of such provisions of the bill and amendment as fall within the
jurisdiction of this Committee pursuant to clause 1(k) of Rule
X of the Rules of the House of Representatives. The changes
made to existing law by the amendment reported by the Committee
on Government Reform are shown in the report filed by that
Committee (Rept. 108-117, Part 1).
FRIDAY, JULY 25, 2003
House of Representatives,
Committee on the Judiciary,
The Committee met, pursuant to notice, at 9:40 a.m., in
Room 2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr., [Chairman of the Committee] presiding.
Chairman Sensenbrenner. The Committee will be in order. A
working quorum is present. It is the Chair's intention to do
the noncontroversial bills first while Members are staggering
in after our 3:30 a.m. vote last night. So pursuant to notice,
I now call up the bill H.R. 1837, the ``Services Acquisition
Reform Act of 2003'' for purposes of markup and move its
favorable recommendation to the House.
Without objection, the bill will be considered as read and
open for amendment at any point, and the text of the bill as
reported by the Committee on Government Reform, which the
Members have before them, will be considered as read,
considered as the original text for purposes of amendment and
open for amendment at any point.
[The Committee Print showing the text of H.R. 1837, as
approved by the Committee on Government Reform, follows:]
Chairman Sensenbrenner. I have a lengthy opening statement
which will put everybody to sleep, so I would ask unanimous
consent that all Members, including the Chair, be able to
insert opening statements in the record at this time.
[The prepared statement of Mr. Sensenbrenner follows:]
Prepared Statement of the Honorable F. James Sensenbrenner, Jr., a
Representative in Congress From the State of Wisconsin, and Chairman,
Committee on the Judiciary
H.R. 1837, the ``Service Acquisition Reform Act of 2003,'' was
introduced by Mr. Davis, the Chairman of the Government Reform
Committee, to improve Federal acquisition workforce and services. The
bill was reported by that Committee and sequentially referred to this
Committee because of the ethics and Federal Tort Claims Act provisions
that relate to an exchange program for public and private sector
employees. In addition, the Government Reform Committee added language
relating to Federal Prison Industries. The Committee received a one-day
referral for consideration, which was subsequently extended to July 25,
2003. Because that time is about to expire, we are marking this bill up
As the Committee on Government Reform reported ``the Service
Acquisition Reform Act of 2003 (SARA), . . . is targeted at the root
causes of the dilemma facing the government's acquisition system today:
(1) The lack of up-to-date comprehensive training for our acquisition
professionals; (2) the inability of the current government structure to
reflect business-like practices by integrating the acquisition function
into the overall agency mission and facilitating cross-agency
acquisitions and information sharing; and (3) the lack of good tools
and incentives to encourage the participation of the best commercial
firms in the government market.''
Section 103 of this bill authorizes a government-industry exchange
program for public and private employees, who specialize in
acquisition, to meet these goals. The section has criminal, ethical,
and tort provisions identical to those that were included in the
Digital Tech Corps Act of 2002. That Act created a government-industry
exchange program for high tech managers and was reported out of the
Judiciary Committee on March 20, 2002 and became law in December 2002.
This bill creates a similar employee exchange program between the
Federal Government and the private sector in the acquisition workforce.
Under H.R. 1837, public employees who are temporarily sent to the
private sector would remain under the protections of the Federal Tort
Claims Act and private sector employees assigned to the government
would receive the protections of the Federal Tort Claims Act.
Private sector employees detailed to Federal agencies for the
exchange program, would be deemed Federal employees for certain
purposes and subject to the same ethics rules, revolving door
prohibitions and accountability provisions that cover Federal
Additionally, this legislation would extend to the contracting
officers of the various Civilian Agencies, including the new Department
of Homeland Security, the same powers available to DOD in their
dealings with Federal Prison Industries, Inc. (FPI).
It will better enable them to get ``best value'' for the tax-payers
dollars being expended with FPI. Specifically, this section amends
Title III of the Federal Property and Administrative Services Act of
1949, which governs procurement by the Civilian Agencies, to make
explicit that a contracting officer is fully empowered to determine if
a product offered by FPI is ``comparable to products available from the
private sector that best meet the Department's needs in terms of price,
quality, and time of delivery.''
It will provide a contracting officer access to the full range of
``market research'' tools to make the required comparability
determination, make explicit that the full range of competitive
procurement techniques are available to a contracting officer, preclude
FPI staff from challenging a contracting officer's determination
regarding the comparability of a product offered by FPI, and empower
contracting officers to ensure that FPI ``performs its contractual
obligations to the same extent as any other contractor.''
These provisions are not inconsistent with H.R. 1829 and can
operate in conjunction with the provisions of that legislation.
I support the bill and encourage my colleague to support it as
[The prepared statement of Ms. Jackson Lee follows:]
Prepared Statement of the Honorable Sheila Jackson Lee, a
Representative in Congress From the State of Texas
Thank you Chairman Sensenbrenner and Ranking Member Conyers for
convening this Full Committee Markup opportunity concerning H.R. 1837,
the Services Acquisition Reform Act of 2003 (SARA). The purpose of this
legislation is to streamline the federal government procurement process
as to its billion dollar goods and services requirements. While I
support this bill and its goal of creating a chief acquisition officer
post and establishing a training fund for acquisition of personnel, I
regret that some of the amendments that my colleagues offered did not
pass with the draft we have before us. They suggested ways to
facilitate the government's ability to protect against waste, fraud,
and abuse in federal contracting. One amendment offered by
Representative Kucinich proposed to create a comprehensive, government-
wide system to track the cost and quality of agency contracting
efforts, focusing on contracts entered into as the result of a public-
private competition as to Contract Tracking. The other as to the issue
of Standing would have given federal employees or their representatives
standing to appeal the results of an A-76 decision transferring federal
jobs to private contractors. In the area of Competition, Representative
Van Hollen offered an amendment to require any decision by an agency to
transfer the performance of a function from federal employees to a
contractor to be based on the results of a public-private competition
process. To distinguish and ward against Corporate Expatriates,
Representative Sanchez offered an amendment to prohibit agencies from
entering into any contract with a subsidiary of a publicly traded
corporation if the corporation is incorporated in a tax haven country
but the United States is the principal market for the public trading of
the corporation's stock. Furthermore, Representative Maloney offered an
amendment to allow debarment officials across agencies to share
information regarding contractors' activities. Finally, Mr. Maloney
also offered an amendment to ensure the bill's position of Chief
Acquisition Officer is held by a career professional. All of the above
proposals would have made a substantive and positive contribution to
improving the thrust of this bill.
I share the sentiment of my Democratic Colleagues in bemoaning the
potential shortfalls of H.R. 1837 in the areas of Contractor
Involvement in Federal Acquisition Decisions; ``Share in Savings''
Contracts; and ``Other Transaction'' Authority.
In the area of Contractor Involvement, this bill, as drafted, would
give very weighty oversight duties of acquisition personnel to the
private sector. This provision could give private contractors undue
influence over the federal contracting and procurement process. I am a
staunch advocate of the advancement and increased opportunity for small
businesses; however, overall control of the process should remain in
the hands of the federal government lest we develop a system that
fosters unfair dealing and unsavory trade practices.
Section 301 of the bill authorizes a contract type called ``share-
in-savings.'' Under these contracts, the contractor agrees to bear the
initial project costs until the agency begins to achieve specified
savings or enhanced revenues from the work. Payment is based on a
percentage of the savings or revenues realized by the agency.
These contracts are largely untested, both in the public and
private sector. For this reason, after extensive negotiations, the E-
Government Act of 2003 (P.L. 107-347) authorized 15 share-in-savings
contracts in military departments and 15 in civilian agencies over a
three-year period. The idea was that these 30 contracts would serve as
H.R. 1837 eliminates these carefully negotiated limits and gives
all agencies permanent authority to enter into an unlimited number of
share-in-savings contracts before any of the pilots have even begun.
Moreover, SARA eliminates other safeguards in the E-Government Act,
such as the requirement that ``share in savings'' contracts not be used
in revenue enhancement. Revenue enhancing contracts raise a host of
complicated issues, such as ensuring that share-in-savings contracts
for debt collection do not bring about opportunities for excessive
One of the major concerns about these contracts is that they
contravene congressional appropriations procedures. For other
contracts, agencies must come to Congress for budget authority for the
contracts. However, section 301 specifically waives this requirement if
the government's potential liability under the contract is $10 million
or less. This removes an important element of oversight and
In addition, this legislation, in providing for ``Other
Transaction'' Authority, unfairly allows certain agencies to contract
absent the guidance of the procurement laws. Section 501 of SARA would
extend to all civilian agencies ``other transaction'' authority for
research and development projects related to defense against terrorism.
This authority permits agencies to enter into contracts without regard
to almost all federal statutes and regulations, including the Federal
Acquisition Regulation, the Federal Property Act, the Competition in
Contracting Act, the Federal Acquisition Streamlining Act, and the
Federal Grant and Cooperative Agreement Act, as well as the Truth in
Negotiations Act and Cost Accounting Standards.
In the recently passed Homeland Security Act, the new Department of
Homeland Security was given this authority for five years. The effect
of the SARA provision is to repeal this time limit and to extend use of
the authority to all agencies.
Mr. Chairman and Ranking Member, for the foregoing reasons, I
support H.R. 1837 with reservations as to those areas covered by the
amendments of my Democratic Colleagues that were rejected in Committee.
Thank you very much for this opportunity to provide input.
Chairman Sensenbrenner. I would point out that this bill
has been referred to us under a sequential referral which
expires today. There are some provisions within the
jurisdiction of the Committee. I have no amendments. Does
anybody else have an amendment?
The gentleman from Virginia Mr. Scott.
Mr. Scott. Mr. Chairman, I have an amendment at the desk.
Chairman Sensenbrenner. The clerk will report the
The Clerk. Mr. Chairman, I don't have an amendment.
Chairman Sensenbrenner. There is no amendment at the desk.
The clerk will report the amendment.
The Clerk. Amendment to H.R. 1837 offered by Mr. Scott of
Virginia. Strike section 215 of the bill, page 44, line 9
through page 48, line 15, and conform the table of contents
[The amendment follows:]
Chairman Sensenbrenner. The gentleman from Virginia is
recognized for 5 minutes.
Mr. Scott. Mr. Chairman, I won't take 5 minutes, because I
think the purpose of the amendment is fairly simple. The bill
would apply the Department of Defense contract restrictions to
the rest of the Government contracting--the prison provisions
to the rest of the Government contracting.
Already we have seen about 2,000 inmates' jobs lost. In a
few minutes, Mr. Chairman, we will be marking up a
comprehensive prison industries bill. So the provision is
duplicative and unnecessary. Moreover, we are the Committee
responsible for public safety, the safe, orderly and productive
operation of our prisons and the productive and feeding of the
prisoners. So anybody who believes that the public is better
served by more inmates coming out of prison without more work
and real work experience is, I think, speaking--is looking at
different numbers than I am.
I would hope, Mr. Chairman, that we would focus the debate
on the other bill and take the provision out of this
I yield back the balance of my time.
Chairman Sensenbrenner. The Chair recognizes himself in
opposition to the amendment.
This amendment should be defeated because it seeks to
continue during the 5-year transition period the current
captive relationship of the Federal agencies in which the
Federal Prison Industries rather than the buying agency
determines whether Prison Industries offer product, and
delivery schedule meets the buying agency's need; and Prison
Industries, rather than the buying agency, determine the
reasonableness of the offered price by Federal Prison
This amendment would simply continue to allow Federal
Prison Industries unilaterally to take Federal contracts and
thus wasting taxpayers' dollars. It has written, the provision
authorizes sole-source contract awards to Prison Industries
during the 5-year transition period to full and open
competition, which is a major concession to the business--by
the business-labor coalition supporting comprehensive Federal
prison industry reform.
The proponents of this amendment want to deprive the buying
agency of getting what it needs when it needs it and at a
reasonable price, and I urge a no vote on the amendment.
The question is on the--the gentleman from North Carolina.
Mr. Watt. Move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
Mr. Watt. Mr. Chairman, I don't get to do this very often,
so I want to take advantage of it. I just want to agree with
Chairman Sensenbrenner. With that, the question is on the
Scott amendment. Those in favor will say aye.
The ayes appear--excuse me. The noes appear to have it. The
noes have it, and the amendment is not agreed to.
Are there further amendments?
If not, a reporting quorum is not present. Without
objection, the previous question is ordered on the motion to
report the bill favorably.
Chairman Sensenbrenner. A reporting quorum is now present.
The unfinished business is the motion to report favorably the
bill H.R. 1837, the ``Services Acquisition Reform Act of
2003,'' upon which the previous question has been ordered on
the motion to favorably report the bill. Those in favor will
Those opposed, no.
The ayes appear to have it. The ayes have it. The motion to
report favorably is agreed to.
Without objection, the staff will be authorized to make
technical and conforming changes.
Without objection, the Chair is authorized to go to
conference pursuant to House rules, and all Members will be
given 2 days under the rules in which to submit additional
dissenting and minority or supplemental views.
I. BILL SUMMARY
Each year the U.S. government spends well over $200 billion
buying services and goods ranging from sophisticated
information technology and management services to grass cutting
and window washing, from paper clips to advanced weapon
systems. More than half of that $200 billion, over $135
billion, is now spent on services--an increase of about 24
percent since 1990--establishing services as the Nation's
largest single spending category.
The Services Acquisition Reform Act (SARA) affects how the
Federal Government procures these Federal goods and services.
The aim of the legislation is to ``streamline'' the procurement
process by remedying the following purported deficiencies: (1)
the lack of up-to-date comprehensive training for acquisition
professionals, (2) the inability of the current government
structure to reflect business-like practices by integrating the
acquisition function into the overall agency mission and
facilitating cross-agency acquisitions and information sharing,
and (3) the lack of effective tools and incentives to encourage
the participation of the best commercial firms in the
A similar SARA was introduced in the 107th Congress as H.R.
3832 and referred to the Committees on Government Reform and
Armed Services. No action was taken on the bill in either
Committee. Also introduced in the 107th Congress was H.R. 3925,
the ``Digital Tech Corps Act of 2002,'' which allowed for the
exchange of mid-level information technology staff between the
government and private sector. This bill was reported favorably
by the Judiciary Committee and passed the House on a voice
vote. The bill was referred to a Senate Subcommittee and no
action was taken.
In the 108th Congress, the new SARA was reintroduced and
referred to the Committees on Government Reform, Armed
Services, and Judiciary. The Government Reform Committee
reported the bill favorably on May 7, 2003. However, key
amendments on important acquisition issues offered by
Democratic members were rejected during markup. In their
dissenting views, the Democrats on the Committee concluded,
``While we support the goal of streamlining Federal procurement
laws, we cannot support SARA in its current form.
Unfortunately, as reported by the Committee, the bill exposes
the taxpayer to new forms of waste, fraud, and abuse in Federal
II. POLICY CONCERNS
We support the goal of improving the Federal procurement
process. Toward this end, the legislation creates a chief
acquisition officer and establishes a training fund for
acquisition personnel. These steps will help promote a
professional, well-trained Federal acquisition workforce and we
applaud these developments. There are, however, a number of
significant problems with the legislation. There are two
problematic sections, both of which fall under the jurisdiction
of the Judiciary Committee: 1) Section 103--the government-
industry exchange program for acquisition personnel and 2)
Section 215--procedural requirements for civilian agencies
relating to products of Federal prison industries.
A. Section 103
This program is troublesome because it could give private
contractors undue influence over the Federal contracting
process. In effect, industry workers would be making government
decisions on ensuring that contractors are not overpaid and
that the work performed meets Federal standards. Turning these
functions over to private sector employees is not only
irresponsible, but dangerous.
Even if private sector contractors follow conflict of
interest laws (which they are subject to in the bill) and do
not work on projects involving their private employers, their
involvement is still inappropriate. They will still be paid by
their private employers and are expected to return to take on
``increased acquisition management responsibilities'' after the
exchange is completed. They will still be making decisions
concerning the overall industry they are employed in which will
include decisions on competing private companies. Only persons
who work for the government or are being paid by the government
should be involved in making decisions about how much specific
contractors are paid.
There have been many questions raised in recent months
about possible ties between current members of the
administration and certain private companies that contract with
the government. How can the American people be sure that
contracting is handled impartially and objectively when the
very companies that benefit are also supplying the government
decision-makers. The American people will only become more
suspicious of this process if the bill in its current form
Furthermore, we are concerned that Section 103 of the bill
amounts to little more than a corporate welfare program for
companies that have fallen on leaner times as a result of our
ongoing economic recession. Rather than layoff workers in order
to decrease expenditures, companies will try to temporarily
shift their workers to government jobs. The expectation will be
that those workers will return to the company in higher-paying
jobs when the economy improves. And while these workers can
retain their salaries while participating in the exchange
program, they may apply for government funding and attempt to
save their employers money.
B. Section 215
Because the Judiciary Committee already passed a
comprehensive Federal Prison Industries bill, H.R. 1829, we
feel that Section 215 is unnecessary. The bill would apply the
Department of Defense contract restrictions to the rest of
government contracting. Yet these restrictions have already
brought about the loss of nearly 2,000 inmate jobs. Moreover,
we are the Committee responsible for public safety and the
safe, orderly and productive operation of our prisons. Research
has shown that inmates who are released from prison with
practical work skills and work experience have a better chance
of securing employment in the private sector. Prison work
programs reduce crime and recidivism rates. Section 215 will
take needed jobs away from inmates and have a negative effect
on our efforts to fight crime and reduce the prison population.
During the markup, Rep. Scott offered an amendment to
strike section 215 of the bill which was defeated by voice
In conclusion, we feel that Sections 103 and 215 of the
bill should be deleted and hope that amendments accomplishing
this will be ruled in order when the bill comes before the
whole House for a vote. This will go a long way toward fighting
crime, helping our prison population, and assuring the American
people that government contracting is conducted in an impartial
way--free of the undue influence of the private companies who
stand to benefit. An amendment eliminating Section 103 will
also remove what we see as little more than a government hand-
out to contractors who have fallen on hard times because of the
recession. An amendment eliminating Section 215 will ultimately
help reduce our growing prison population.
John Conyers, Jr.
Robert C. Scott.