Congressional interest in oversight of government contracting began early last year with separate bills during the first three months of the 110th Congress in both the House and Senate that provided for contractor oversight and limited the number of sole source contracts.
The House Oversight and Government Reform Committee chairman introduced House Resolution (H.R.) 1362, “Accountability in Contracting Act,” on March 6, 2007, which was passed by the full House on March 15, 2007. This bill limits noncompetitive contracts and promotes integrity in contracting by: mandating a one-year limit on sole-source contracts valued at or above $1 million, unless the executive agency head deems the one-year time limit detrimental; requiring the head of an agency awarding $1 billion or more in government contracts for the previous fiscal year to develop and implement a plan to decrease the number of noncompetitive contracts and increasing the number of fixed price contracts; and requiring agencies to publicly disclose justifications for all noncompetitive awards.
It also would have compelled agencies to inform Congress 30 days before a no-bid contract award to a foreign-owned company based in a “terrorist” nation. Finally, it would bar federal procurement officials from participating in contract review, award process, or contract administration within one year of private sector employment by the contractor.
In the Senate, the ranking member of the Homeland Security and Governmental Affairs Committee introduced a separate bill, Senate Resolution (S.) 680, “Accountability in Government Contracting Act,” which passed the full Senate on Nov. 7, 2007, with provisions similar to H.R. 1362. They are designed to curb contractor fraud and abuse, and aimed at improving the procurement workforce, with limits on no-bid contracts and enhanced accountability in contract administration.
Both bills would require publicly disclosing justifications of sole source contracts. The Senate bill was much more specific in its expectations of government officials in promoting a more competitive procurement process by: requiring the federal government to dedicate $5 million in personnel training for fiscal year 2008-09; requiring the Government Accountability Office to report on the qualifications of the government’s procurement workforce; and directing the Office of Federal Procurement Policy (OFPP) to pass Federal Acquisition Regulations covering multiple award contracts and the proper use of cost reimbursement contracts.
The Senate bill would also permit bid protests of task or delivery orders of over $5 million but allow the OFPP to increase to $25 million if the administrator deemed the $5 million threshold to be unduly burdensome.
Both resolutions would also set time limits to perform no-bid contracts. However, unlike H.R. 1362, the Senate bill would set a time frame of less than a year unless the agency head determined that exceptional circumstances apply. The Senate bill would further require that no task or delivery orders exceeding $100 million be awarded to a single contractor absent a written agency head determination that contract performance by multiple contractors would be impractical and less cost effective. It also would mandate an OFPP review of all multi-agency contracts for redundancy and all indefinite delivery, indefinite quantity contracts for cost effectiveness or redundancy with other available contracts.
Congress concluded the year by joining together to establish comprehensive contractor accountability legislation as part of its Fiscal Year 2008 authorization act. The conference report released by both houses: authorizes bid protests for task or delivery orders under multiple-award contracts of over $10 million; requires publicly disclosed justification and approval documents for noncompetitive contracts; and requires disclosure to Congress of significant agency findings in contractor audits.
The report also requires certain former Defense Department officials to obtain written opinions from internal ethics officials prior to accepting compensation from contractors. Finally, Congress resolved in its report to direct the comptroller general to report to the House and Senate Armed Services committees on the extent that major defense contractors’ ethics programs require disclosure of personal financial interests and outside employment by key personnel performing work for the government, conflict mitigation measures for employees related to Defense Department contract work, and reporting procedures for such conflicts.
Defense contractors can anticipate that Congress will seek to further tighten the control of Iraq reconstruction contracts and to curb awards to sole contractors.
Aside from the business ramifications, new legislation is imposing higher legal standards of ethics and conduct in federal procurement, as well. Companies that already have made “ethical readiness” a corporate imperative will likely not be phased by the new government contracting laws.
Joseph J. Summerill (email@example.com) is a shareholder with Greenberg Traurig LPP. The views expressed are solely those of the author. Sean M. Connolly, of Greenberg Traurig LLP, contributed to this article.
Please email your comments to SErwin@ndia.org