House passes contracting reform bill

The House on Thursday overwhelmingly approved legislation that would limit the use of certain types of federal contracts, boost oversight of procurement operations and take small steps to bolster the federal acquisition workforce.

House members cleared the measure by a vote of 347-73, working from a version of the bill (H.R. 1362) nearly identical to that approved during a Tuesday markup by the Armed Services Committee.

The legislation would require agencies to restrict their use of noncompetitive, sole-source and cost-reimbursement type contracts. Agencies could generally rely on a noncompetitive contract for only about eight months before replacing it with a competitively awarded agreement.

They also would have to develop plans, with measurable goals, to minimize their use of noncompetitive and reimbursement contracts. Those plans would be reviewed by the Government Accountability Office, which would report on them to Congress. The bill also would require agencies to disclose their justifications for and approvals of noncompetitive contracts.

The bill calls on the Office of Management and Budget's procurement policy office to study the size and skills of the federal acquisition workforce. It would extend the acquisition training fund provided under the 2003 Services Acquisition Reform Act.

In language that would channel additional oversight material to Congress, agencies would be required to report on a quarterly basis on any audits or other contracting reports that find more than $10 million in inappropriate or questioned costs, or that find major problems with contractor work.

In a policy statement, the Bush administration opposed adoption of that requirement. The "exhaustive" reporting requirements would "interfere with agencies' ability to address and resolve contract performance problems in a timely manner," the statement said.

The White House also opposed a provision to prohibit federal employees who recently worked for a contractor from being involved with any contract related to that employer. But the administration welcomed lawmakers' decision to drop a proposal that would have doubled the "cooling off" period that federal employees experience when moving to the private sector.

OMB procurement policy chief Paul Denett had argued that the measure would drive employees near retirement out the door faster, at a time when his office has focused on recruiting additional acquisition workers.

Lawmakers also approved a provision for pre-award congressional notification of contracts that might be awarded to companies based in countries that sponsor terrorism. They also backed an amendment calling for the Office of Government Ethics to issue recommendations related to personal financial interest restrictions, and one prohibiting contracts to educational institutions not supporting U.S. defense efforts.

On the Senate side, Sen. Susan Collins, R-Maine, presented contracting reform legislation last month. That legislation addresses different issues, with language targeting the transparency of sole-source federal contracts, protest rights for orders placed under large contracts and subcontracting limits. It was referred to the Homeland Security and Governmental Affairs Committee, where Collins is the ranking member.