Contracting Bills: Last-Minute Scramble in Congress With Congress rushing toward adjournment, major contracting legislation appears likely to be folded into the 2009 Defense authorization bill and a continuing resolution to fund government agencies. Those bills are among the few expected to pass in September as Congress pushes to close out its election-year session by the end of the month. The House has passed several contracting bills, only to see them stall in the Senate Homeland Security and Government Reform Committee. Rep. Henry Waxman, D-CA, attached his “Clean Contracting” legislation to the House version of the Defense bill, H.R. 5658. It would require agencies to minimize the use of sole-source and cost-plus contracts and mandate that all contractors on multiple award contracts be given a fair opportunity to bid on task orders. (See summary, below.) The House has voted to create a public governmentwide database of contractor misconduct that would record suspensions and debarments, whether contracts have been terminated for cause, and any previous finding by contracting officials that a company does not have a satisfactory record of integrity and business ethics. The Senate has not acted on a companion bill sponsored by Sen. Claire McCaskill, D-MO. A watered-down version of the database is included in the Senate’s pending Defense authorization bill, S. 3001. It would apply only to defense contractors and would not be available to the public. An aide to McCaskill told Government Executive magazine the senator will offer an amendment to broaden the database so it covers civilian agencies. Senate consideration of the Defense bill has been blocked by a dispute over offshore oil drilling, but the Senate voted Sept. 8 to begin debate on the bill. If it does pass, a House-Senate conference committee will craft the final language. But the White House has threatened a veto over several provisions of the bill, including one that would block public-private job competitions. As part of a supplemental appropriations bill for the wars in Iraq and Afghanistan, Congress approved legislation requiring some contractors to disclose the salaries of their top executives. The provision, sponsored by Rep. Christopher Murphy, D-CT, applies to companies holding contracts worth more than $25 million a year and deriving more than 80% of their annual revenue from federal work. Provisions of the “Clean Contracting” amendment, included in the House-passed Defense authorization bill. Enhanced Competition Minimizing sole-source contracts. This section requires large federal agencies to implement a plan to promote competition and minimize the use of noncompetitive contracts. Waxman said noncompetitive contracts have soared from $67 billion in 2000 to $207 billion in 2006. Limiting the length of non-competitive contracts. This section would limit the duration of no-bid contracts awarded in emergencies such as Hurricane Katrina to nine months. Enhancing competition in multiple award contracts. This section would give all contractors under a multiple award contract a fair opportunity to bid for work under the contract. Curbing Abuse-Prone Contracts Minimizing cost-plus contracts. This section would require agencies to minimize the use of cost-reimbursement-type contracts. “Cost-plus contracts leave the government vulnerable to wasteful spending since they provide the contractor with little or no incentive to control costs,” Waxman said. “Spending on this type of contract rose from $62 billion in 2000 to $110 billion in 2005.” Limiting lead-system integrators. This section would prohibit contracts that rely on private contractors to serve as “lead-system integrators” who both manage and perform the contract. Waxman charges that LSI contracts, such as the Coast Guard’s “Deepwater,” have led to billions in wasteful spending. Prohibiting excessive pass-through charges. This section would require regulations to prevent contractors from billing taxpayers for excessive markups on work that is done by subcontractors. Waxman said, “This provision would prevent the abuses that occurred after Hurricane Katrina, where taxpayers were charged $2,480 for “blue roofs” that actually cost under $300.” Minimizing abuse of commercial item authority. This section would require additional cost and pricing information for goods and services “of a type” found in the commercial market place, requiring contractors to justify prices for items that are not regularly sold to commercial customers. Restricting interagency contracts. This section would require regulations to prevent abuse of interagency contracts. Waxman said the provision is designed to prevent abuses like the one that occurred when the Department of Defense hired interrogators at Iraq’s Abu Ghraib prison under a contract to provide information technology run by the Department of the Interior. Linking award fees to acquisition outcomes. This section would require award fees to be paid only when a contractor has at least a satisfactory level of performance. A series of audit reports have documented that contractors often receive large bonuses even on contracts that are far behind schedule and over budget. Contract Transparency Disclosure of CEO salaries. This section requires privately held contractors who hold at least $25 million in federal contracts and derive 80% of their revenue from the government to disclose the compensation of their top executives. Database for suspension and debarment. This section would create a single governmentwide database listing companies that have been suspended or debarred. Improvements to the Federal Procurement Data System. This section enhances the transparency of multiple-award and interagency contracts by requiring additional reporting to the existing federal procurement database. Anti-Fraud Provisions Whistleblower protection for contractor employees. This section would provide whistleblower protections for all federal contractor employees. Waxman said it is a response to testimony that contractors working for KBR “were fired after reporting egregious examples of wasteful spending.” Mandatory fraud reporting. This section would require both domestic and overseas contractors to report violations of federal criminal law and overcharging. Preventing contractor conflicts of interest. This section requires federal regulations to prevent organizational and personal conflicts of interest among contractor employees. The Government Accountability Office has found that there are no rules governing personal conflicts of interest by contractors. GAO access to contractor employees. This section would give GAO the authority to interview contractor employees. Acquisition Workforce Improvements Acquisition workforce development fund. This section would require agencies to devote at least an additional 2% of their service contracting budgets to oversight, planning and administration. Waxman said the provision is designed to relieve pressure on “a greatly over-extended workforce.” Contingency contracting corps. This section would authorize the establishment of a contingency contracting corps that would handle contracting in a national emergency.