[House Report 110-596]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-596
======================================================================
CONTRACTORS AND FEDERAL SPENDING ACCOUNTABILITY ACT OF 2008
_______
April 18, 2008.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Waxman, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 3033]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom was
referred the bill (H.R. 3033) to improve Federal agency awards
and oversight of contracts and assistance and to strengthen
accountability of the Government-wide suspension and debarment
system, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 4
Legislative History.............................................. 4
Section-by-Section............................................... 5
Explanation of Amendments........................................ 6
Committee Consideration.......................................... 7
Roll Call Votes.................................................. 7
Application of Law to the Legislative Branch..................... 7
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 7
Statement of General Performance Goals and Objectives............ 7
Constitutional Authority Statement............................... 7
Federal Advisory Committee Act................................... 7
Unfunded Mandates Statement...................................... 7
Earmark Identification........................................... 7
Committee Estimate............................................... 8
Budget Authority and Congressional Budget Office Cost Estimate... 8
Changes in Existing Law Made by the Bill, as Reported............ 10
Additional Views................................................. 11
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Contractors and Federal Spending
Accountability Act of 2008''.
SEC. 2. DATABASE FOR CONTRACTING OFFICERS AND SUSPENSION AND DEBARMENT
OFFICIALS.
(a) In General.--Subject to the authority, direction, and control of
the Director of the Office of Management and Budget, the Administrator
of General Services shall establish and maintain a database of
information regarding integrity and performance of Federal contracts
and grant recipients for use by Federal officials having authority over
contracts and grants.
(b) Information Included.--The database--
(1) shall consist of information regarding civil, criminal,
and administrative proceedings concluded by the Federal
Government and State governments against Federal contractors or
grant recipients; and
(2) shall include with respect to each person awarded a
Federal contract or grant--
(A) information regarding all proceedings referred to
in paragraph (1) against that person in at least the
most recent 5-year period;
(B) with respect to each proceeding--
(i) a brief description of the proceeding;
and
(ii) any amount paid by the person to the
Federal Government or a State government;
(C) all Federal contracts and grants awarded to the
person that were terminated in such period due to
default;
(D) all Federal suspensions and debarments of the
person in that period;
(E) all Federal administrative agreements entered
into by the person and the Federal Government in that
period to resolve a suspension or debarment proceeding
and, to the maximum extent practicable, such agreements
entered into by the person and a State government in
that period; and
(F) all final findings by a Federal official in that
period that the person is not a responsible source as
defined by section 4(7) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(7)).
(c) Requirements Relating to Information in Database.--
(1) Direct input and update.--The Administrator shall design
and maintain the database in a manner that allows the
appropriate officials of each Federal agency to directly input
and update in the database information relating to actions it
has taken with regard to contractors or grant recipients.
(2) Timeliness and accuracy.--The Administrator shall develop
policies to require the timely and accurate input of
information into the database and to allow Federal contractors
and grant recipients to append comments to information in the
database.
(d) Availability.--
(1) Availability to all federal agencies.--The Administrator
shall make the database available to all Federal agencies.
(2) Availability to the public.--The Administrator shall make
the database available to the public by posting the database on
the General Services Administration website.
(3) Limitation.--This subsection does not require the public
availability of information that is exempt from public
disclosure under section 552(b) of title 5, United States Code.
SEC. 3. SUSPENSION AND DEBARMENT PROCEDURE FOR REPEAT VIOLATORS.
Not later than 180 days after the date of the enactment of this Act,
Federal suspension and debarment regulations shall be amended to
require issuance of a notice of proposed debarment to any contractor or
grant recipient against whom is rendered, twice within any 3-year
period, a judgment or conviction for the same offense, or similar
offenses, if each judgment or conviction constitutes a cause for
debarment.
SEC. 4. DISCLOSURE IN APPLICATIONS.
(a) Requirement.--Not later than 180 days after the date of the
enactment of this Act, Federal regulations shall be amended to require
that in applying for any Federal grant or submitting a proposal or bid
for any Federal contract a person shall disclose in writing information
described in section 2(b).
(b) Covered Contracts and Grants.--This section shall apply only to
contracts and grants in an amount greater than the simplified
acquisition threshold, as defined in section 4(11) of the Office of
Federal Procurement Policy Act (41 U.S.C. 401(11)).
SEC. 5. ROLE OF INTERAGENCY COMMITTEE.
(a) Requirement.--The Interagency Committee on Debarment and
Suspension shall--
(1) resolve issues regarding which of several Federal
agencies is the lead agency having responsibility to initiate
suspension or debarment proceedings;
(2) coordinate actions among interested agencies with respect
to such action;
(3) encourage and assist Federal agencies in entering into
cooperative efforts to pool resources and achieve operational
efficiencies in the governmentwide suspension and debarment
system;
(4) recommend to the Office of Management and Budget changes
to Government suspension and debarment system and its rules, if
such recommendations are approved by a majority of the
Interagency Committee;
(5) authorize the Office of Management and Budget to issue
guidelines that implement those recommendations;
(6) authorize the chair of the Committee to establish
subcommittees as appropriate to best enable the Interagency
Committee to carry out its functions; and
(7) submit to the Congress an annual report on--
(A) the progress and efforts to improve the
suspension and debarment system;
(B) member agencies' active participation in the
committee's work; and
(C) a summary of each agency's activities and
accomplishments in the governmentwide debarment system.
(b) Definition.--The term ``Interagency Committee on Debarment and
Suspension'' means such committee constituted under sections 4 and 5
and of Executive Order 12549.
SEC. 6. AUTHORIZATION OF INDEPENDENT AGENCIES.
Any agency, commission, or organization of the Federal Government to
which Executive Order 12549 does not apply is authorized to participate
in the governmentwide suspension and debarment system and may recognize
the suspension or debarment issued by an executive branch agency in its
own procurement or assistance activities.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Administrator of
General Services such funds as may be necessary to establish the
database described in section 2.
SEC. 8. REPORT TO CONGRESS.
(a) Report Required.--Not later than 180 days after the date of the
enactment of this Act, the Administrator of General Services shall
submit to Congress a report.
(b) Contents of Report.--The report shall contain the following:
(1) A list of all databases that include information about
Federal contracting and Federal grants.
(2) Recommendations for further legislation or administrative
action that the Administrator considers appropriate to create a
centralized, comprehensive Federal contracting and Federal
grant database.
PURPOSE AND SUMMARY
H.R. 3033, the Contractors and Federal Spending
Accountability Act of 2007, was introduced by Rep. Carolyn
Maloney on July 12, 2007. The bill requires creation of a
database including information on government proceedings
relating to government contractors and grant recipients for use
in assessing contractor responsibility. The bill also requires
that contractors and grant recipients must present evidence to
establish their present responsibility if they have two
convictions or judgments for the same or similar offenses in a
three-year period, if each conviction or judgment is a cause
for suspension or debarment.
BACKGROUND AND NEED FOR LEGISLATION
Government contracting officers may award contracts only to
responsible contractors. A responsible contractor is one that
possesses the technical capability and financial capacity to
fully perform the requirements of the contract, as well as the
business integrity to justify the award of public tax dollars.
There is no accurate, centralized, comprehensive listing of
criminal, civil, and administrative proceedings concluded by
the federal and state governments relating to contractors.
Prospective federal contractors are not required to disclose
all relevant criminal, civil, or administrative rulings or
resolutions during the federal procurement process. Without
such a database or disclosure, federal contracting officers and
suspension and debarment officials lack important information
relevant to present responsibility.
This legislation seeks to strengthen the government's
capability to more comprehensively review a contractor's record
of performance and integrity, so that the government can better
assess responsibility and risk in the contract award process.
LEGISLATIVE HISTORY
H.R. 3033, the Contractors and Federal Spending
Accountability Act of 2007, was introduced by Rep. Carolyn
Maloney on July 12, 2007, and referred to the Committee on
Oversight and Government Reform.
The Subcommittee on Government Management, Organization,
and Procurement held a hearing on H.R. 3033 on July 18, 2007.
The witnesses were William Woods, Director, Acquisition and
Sourcing Management, Government Accountability Office; William
Desmond, Associate Administrator, National Nuclear Security
Administration, Department of Energy, accompanied by Tyler
Przybylek, Senior Adviser to the Administrator, National
Nuclear Security Administration, Department of Energy; Gregory
Friedman, Inspector General, U.S. Department of Energy; Elaine
Duke, Chief Procurement Officer, Department of Homeland
Security; Richard Skinner, Inspector General, Department of
Homeland Security; Robin Smith, former Wackenhut security
supervisor at DHS headquarters; Lawrence Brede, Senior Vice
President, DOE Operations, Wackenhut Services Inc.; and Scott
Amey, General Counsel, Project on Government Oversight.
The Subcommittee on Government Management, Organization,
and Procurement held an additional hearing on H.R. 3033 on
March 11, 2007. The witnesses were Paul A. Denett,
Administrator for Federal Procurement Policy, Office of
Management and Budget; John Hutton, Director of Acquisition and
Sourcing Management, U.S. Government Accountability Office;
Marcia Madsen, Chair of the Acquisition Advisory Panel; Scott
Amey, General Counsel, Project on Government Oversight (POGO);
and Alan Chvotkin, Senior Vice President and Counsel,
Professional Services Council.
The Subcommittee held a markup to consider H.R. 3033 on
March 11, 2007, and ordered the bill to be favorably reported,
as amended, by voice vote.
The Committee held a markup to consider H.R. 3033 on March
13, 2007, and ordered the bill to be favorably reported, as
amended, by voice vote.
SECTION-BY-SECTION
Section 1: Short title
The short title of the bill is the Contractors and Federal
Spending Accountability Act of 2008.
Section 2: Database for contracting officers and suspension and
debarment officials
This section requires the Director of OMB and Administrator
of General Services to establish a database regarding integrity
and performance of federal contractors and grant recipients.
Subsection (b) requires that the database include a
description of civil, criminal, and administrative proceedings
concluded by the federal and state governments against federal
contractors or grant recipients; all terminations for default
of federal contracts and grants; all federal suspensions and
debarments; all federal administrative agreements to resolve a
suspension or debarment proceeding and, to the maximum extent
practicable, such agreements with states; and all final
findings by a federal official that the person is not a
responsible source as defined in federal procurement law. The
database includes such information for the most recent five
years.
Subsection (c) requires federal agency officials to
directly input and update information in the database; requires
procedures to ensure the accuracy and timeliness of the
information; and permits contractors and grant recipients to
append comments to information in the database.
Subsection (d) requires that the database be publicly
available through the General Services Administration (GSA)
website, with the exception of information that is exempt from
public disclosure under the Freedom of Information Act.
Section 3: Suspension and debarment procedure for repeat violators
This section requires that suspension and debarment
regulations be revised so that contractors and grant recipients
are issued a notice of proposed debarment which would require
presentation of evidence to establish their present
responsibility if they have two convictions or judgments for
the same of similar offenses in a three-year period, if each
conviction or judgment is a cause for suspension or debarment.
Section 4: Disclosure in applications
This section requires revision of regulations so that
offers for contracts and applications for grants in an amount
exceeding the simplified acquisition threshold must provide the
information required to be included in the database.
Section 5: Role of Interagency Committee
This section requires the Interagency Committee on
Debarment and Suspension, as established in Executive Order
12549, with respect to the government-wide system of suspension
and debarment to resolve issues regarding which federal agency
is the lead agency having responsibility to initiate
proceedings; coordinate actions among interested agencies;
encourage pooled resources to achieve operational efficiencies;
recommend rules changes to OMB (if such recommendations are
approved by a majority of the Interagency Committee); authorize
OMB to issue guidelines that implement those recommendations;
authorize the chair of the Committee to establish subcommittees
as appropriate; and submit to the Congress an annual report on
progress and efforts to improve the system, member agencies'
active participation in the committee's work, and a summary of
each agency's activities and accomplishments in the system.
Section 6: Authorization of independent agencies
This section authorizes any federal entity not covered by
Executive Order 12549 to participate in the government-wide
suspension and debarment system.
Section 7: Authorization of appropriations
This section authorizes appropriations to GSA for the
establishment of the database.
Section 8: Report to Congress
This section requires a report to Congress describing all
federal contracting and grant databases and recommending
legislative or administrative action to create a comprehensive,
streamlines database.
EXPLANATION OF AMENDMENTS
At the Subcommittee markup on March 11, 2008, Mr. Towns
offered an amendment in the nature of a substitute, which
passed by voice vote. This amendment (1) struck factual
findings; (2) provided that the Director of the Office of
Management and Budget oversee the database; (3) provided that
only civil, criminal, and administrative proceedings that have
been concluded be included in the database; (4) removed
suspension and debarment show cause orders as information
required to be included in the database; (5) added final
findings that a person is not a responsible source to the
information required to be included in the database; (6)
required the Administrator for General Services to develop
policies to ensure the timeliness and accuracy of information
in the database; (7) permitted contractors and grantees to
append comments to information in the database; (8) excluded
information exempt from disclosure under the Freedom of
Information Act from the public database; (9) eliminated the
presumption of nonresponsibility for repeat violators and
replaced it with a requirement that repeat violators be issued
a notice of proposed debarment and show cause why they are
presently responsible; (10) conformed the section on
disclosures required in applications to the information
required to be included in the database; and (11) struck
surplus definitions.
At the Committee markup on March 13, 2008, Mr. Waxman
offered an amendment in the nature of a substitute that defined
administrative agreements as agreements between a person and
the federal government to resolve a suspension or debarment
proceeding and similar agreements with state governments.
COMMITTEE CONSIDERATION
On Thursday, March 13, 2008, the Committee met in open
session and favorably ordered H.R. 3928 to be reported, as
amended, to the House by a voice vote.
ROLLCALL VOTES
No rollcall votes were held.
APPLICATION OF LAW TO THE LEGISLATIVE BRANCH
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to terms and conditions of
employment or access to public services and accommodations. The
bill does not relate to employment or access to public services
and accommodations.
STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report, including improving the efficiency and
transparency of federal procurement.
CONSTITUTIONAL AUTHORITY STATEMENT
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress to enact the law
proposed by H.R. 3033. Article I, section 8, clause 18 of the
Constitution of the United States grants the Congress the power
to enact this law.
FEDERAL ADVISORY COMMITTEE ACT
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., section 5(b).
UNFUNDED MANDATES STATEMENT
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement on
whether the provisions of the report include unfunded mandates.
In compliance with this requirement the Committee has received
a letter from the Congressional Budget Office included herein.
EARMARK IDENTIFICATION
H.R. 3033 does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(d), 9(e), or 9(f) of rule XXI.
COMMITTEE ESTIMATE
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 3033. However, clause 3(d)(3)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act.
BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 3033 from the Director of
the Congressional Budget Office:
April 11, 2008.
Hon. Henry A. Waxman,
Chairman, Committee on Oversight and Government Reform, House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3033, the
Contractors and Federal Spending Accountability Act of 2008.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Peter R. Orszag.
Enclosure.
H.R. 3033--Contractors and Federal Spending Accountability Act of 2008
Summary: H.R. 3033 would require the Administrator of the
General Services Administration (GSA) to establish and maintain
a comprehensive and publicly accessible list of certain
criminal, civil, and administrative proceedings against federal
contractors and grant recipients. The bill also would require
new regulations for federal contractors, impose new
responsibilities on the Interagency Committee on Debarment and
Suspension (ISDC), and require a report to the Congress on
federal contracting and grants.
CBO estimates that implementing H.R. 3033 would cost $5
million in 2009 and about $20 million over the 2009-2013
period, assuming appropriation of the necessary amounts.
Enacting the legislation would not affect direct spending or
revenues. The bill contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act
(UMRA) and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 3033 is shown in the following table.
The cost of this legislation falls within budget function 800
(general government).
------------------------------------------------------------------------
By fiscal year, in millions of
dollars--
---------------------------------------
2009 2010 2011 2012 2013
------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level... 5 5 4 3 3
Estimated Outlays............... 5 5 4 3 3
------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted near the start of fiscal year 2009, that
the necessary funds will be provided for each year, and that
spending will follow historical patterns for similar programs.
Under current law, the Federal Acquisition Regulation
requires all federal agencies to procure goods and services
only from contractors determined to be ``responsible.'' To
assess a contractor's responsibility, a contracting officer may
use a variety of databases, such as the Web-based Excluded
Parties List System, which provides information about whether
or not a contractor is debarred or suspended from government
contracting, or the Past Performance Information Retrieval
System, which contains information on the past performance of
contractors doing work for the government. In addition,
contractors provide certifications in which they verify whether
they have been involved in civil and criminal proceedings
during the previous three years.
H.R. 3033 would establish a single comprehensive database
of federal spending that would be available through a public
Web site. That database would list all entities receiving
federal funds and information on the integrity and performance
of federal contracts and grant recipients. In addition, the
legislation would require agencies to initiate debarment
proceedings against any federal contractor that has faced two
adverse rulings within a three-year period. H.R. 3033 also
would provide new authorities for the ISDC, and require GSA to
provide to the Congress a list of all databases concerning
federal contractors and grants and to recommend procedures to
centralize that information.
According to OMB, GSA, and private firms, the government
currently collects much of the information necessary to create
a comprehensive database on the integrity and performance of
federal contractors and grantees. CBO estimates that updating
and expanding those efforts and adding a search engine through
a Web site to create a single comprehensive database would cost
about $10 million over the 2009-2010 period. Those amounts
include the costs of new regulations, additional government-
wide training, and the annual report to the Congress. CBO also
estimates that it would cost between $3 million and $4 million
in subsequent years to maintain the database and for ISDC to
undertake its additional responsibilities.
Intergovernmental and private-sector impact: H.R. 3033
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill would require state, local, and
tribal governments to provide OMB with information on how they
spend money received from the federal government. Such
requirements could be costly to intergovernmental entities, but
any costs would result from complying with conditions for
federal assistance.
Estimate prepared by: Federal Costs: Matthew Pickford;
Impact on State, Local, and Tribal Governments: Elizabeth Cove;
Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
There are no changes made to existing law made by the bill,
as reported.
ADDITIONAL VIEWS OF RANKING MEMBER TOM DAVIS
H.R. 3033 has been improved since the bill was introduced.
The original version would have created a draconian enforcement
measure, establishing a ``blacklist'' which would defame and
degrade firms merely accused of wrongdoing--not necessarily
convicted, simply accused. It is unclear what beneficial
purpose would be served by the collection of this information.
Fortunately, the Chairman and the sponsor were open to my
suggestion to revise the bill to include those civil, criminal
and administrative proceedings ``concluded'' as opposed to
merely ``initiated.'' This makes H.R. 3033 a much better bill,
but it still is not a good bill.
It is difficult to argue against contracting officers
having available to them information concerning ``concluded''
state and federal civil, criminal and administrative
proceedings and federal suspensions, debarments and default
terminations. However, much of this information likely will
have no meaning or be irrelevant to the required determination
that a firm is a responsible prospective contractor.
Further, the publication of information contained in
administrative agreements made in connection with a proposed
debarment or suspension raises concerns. When these agreements
are executed, the debarment proceeding is not concluded--there
is no decision to debar. The inclusion of information regarding
agreements to resolve state debarment proceedings raises even
more concerns as we simply do not know how various state
proceedings are conducted and what type of information might be
subject to disclosure. While much of this information to be
included in the database would have a clear purpose for
acquisition officials, the value of placing information on a
public website is not clear. The only purpose would be to
``punish'' or intimidate firms based on allegations.
The most problematic section of H.R. 3033, however, is
section 3--the ``two strikes and you're out'' provision. This
section would mandate the automatic initiation of debarment
proceedings against firms convicted of two offenses which
otherwise would be a cause for debarment. It is appropriate to
use the debarment process to prevent ``bad actors'' from
getting federal contracts. But there is no need to limit the
discretion of the government's debarment officials in bringing
these actions at the appropriate time. Again, this smacks of
``punishment.''
Moreover, the consequences of the provision have not been
thought out carefully. It is possible firms could come within
the terms of the provision and be banned from the federal
market. This would have disastrous consequences for the
government and the firm. Acquisition officials should be
allowed to exercise discretion in determining whether debarment
is appropriate under the circumstances. And to use the
debarment process as it was intended--to protect the
government, not punish businesses.
I fail to see how this bill will improve our acquisition
system. I fail to see how it will improve our ability to get
the best value goods and services we need at fair and
reasonable prices. Furthermore, I believe this bill will raise
yet another significant barrier to entry for companies that may
be considering entering the federal market.
For these reasons, I do not support H.R. 3033 in its
current form.
Tom Davis.