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S. 2215 (100th): Office of Federal Procurement Policy Act Amendments of 1988


The text of the bill below is as of Nov 17, 1988 (Passed Congress).


PUBLIC LAW 100-679—NOV. 17, 1988                               102 STAT. 4055

Public Law 100-679
100th Congress
                                 An Act
To amend and extend the Office of Federal Procurement Policy Act, and for other    Nov. 17, 1988
                                   purposes.                                         [S. 2215]
 Be it enacted by the Senate and House of Representative of the                   ^^^^^ ^^ Federal
United States ofAmerica in Congress assembled.                                     Procurement
                                                                                  Policy Act
SECTION 1. SHORT TITLE.                                                           Amendments of
  This Act may be cited as the "Office of Federal Procurement                     \i use 40i note.
Policy Act Amendments of 1988".
SEC. 2. POLICY; FINDINGS AND PURPOSE.
  (a) PoucY.—Section 2 of the Office of Federal Procurement Policy
Act (41 U.S.C. 401) is amended by striking out "the Congress" and
inserting "the United States Government".
  (b) FINDINGS AND PURPOSE.—Section 3 of the Office of Federal
Procurement Policy Act (41 U.S.C. 402) is €unended in subsection (a)
by inserting "Government-wide" before "procurement policies".
SEC. 3. AUTHORITY AND FUNCTIONS OF THE OFPP ADMINISTRATOR.
  (a) IN GENERAL.—Section 6 of the Office of Federal Procurement
Policy Act (41 U.S.C. 405) is amended—
       (1) in subsection (a), by striking out "which shall be imple-
    mented in the single system of Government-wide procurement
    regulations and shall be" and inserting a period and the follow-
    ing: "These policies shall be implemented in a single
    Government-wide procurement regulation called the Federal
    Acquisition R^^ation and shall be";
       (2) in subsection (b)—
            (A) by inserting after "timely manner" the following: ",
          including any such r^ulations, procedures, and forms as
          are necessary to implement prescribed policy initiated by
          the Administrator under subsection (a),"; and
            (B) by striking out "may" and inserting "shall";
       (3) in subsection (d) by strilang out paragraphs (4) and (5) and
    inserting the following:
       "(4XA) providing for and directing the activities of the com-
    puter-based Federal Procurement Data System (including
    recommending to the Administrator of General Services a
    sufficient bu^et for such activities), which shall be located
    in the Greneral Services Administration, in order to adequately
    collect, develop, and disseminate procurement data; and
       "(B) ensuring executive agency compliance with the record
    requirements of section 19;
       "(5) providing for and directing the activities of the Federal
    Acquisition Institute (including recommending to the Adminis-
    trator of General Services a sufficient budget for such
    activities), which shall be located in the General Services
    Administration, in order to—

102 STAT. 4056 PUBLIC LAW 100-679—NOV. 17,1988 "(A) foster and promote Government-wide career management programs for a professional procurement work force; and Research and ''(B) promote and coordinate Government-wide research development. and studies to improve the procurement process and the laws, policies, mediods, r^ulations, procedures, and forms relating to procurement by the executive agencies;"; and (4) in subsection (f) by striking out "The Director of the Office of Management and Budget" ami inserting "The Administrator, with the concurrence of the Director of the Office of Manage- ment and Budget, and with ccmsultation with the head of tiie agency or agencies concerned,", (b) REAUTHORIZATION.—Section 11 of such Act (41 U.S.C. 410) is amended by striking out "for each of the three succeeding fiscal years" and inserting "such sums as may be necessary for each succeeding fiscal jrear". 41 use 403. (c) CONFORMING AMENDMENT.—Section 4 of such Act is amended fay striking out paragraph (4) and redesignating paragraphs (5) through (11) as paragraphs (4) through (10), respectively. SEC 4. FEDERAL ACQUISITION REGULATORY COUNCIL. The Qfifioe of Federal Procurement Policy Act is further amended by adding at the end the following: "FEDERAL AOQUBSrnON RBGULATORT CX)UNCIL 41 use 421. "SB& 25. (a) ESTABLISHMENT.—There is established a Federal Ac- quisition R^ulatory Council (hereinafter in this section referred to as the 'Council') to assist in the direction and coordination of Government-wide procurement policy and (jovemment-wide procurement r^ulatory activities in the Federal Ciovemment. "(b) MEMBERSHIP.—<1) The C!ouncil shall consist of the Adminis- trator for Federal Procurement PoUcy and— "(A) the Secretaiy of Defense, "(B) the Administrator of National Aeronautics and Space; and "(Q the Administrator of (Seneral Services. "(2) Notwithstanding section 205(d) of the Federal Property and Administrative Services Act of 1949, the officials specified in sub- paragraphs (A), (B), and (O of paragraph (1) may designate to serve on and attend meetings of the Council in place of that official (A) the official assigned by statute with the responsibility for acquisition policy in each of their respective agencies; or (B) if no official of such agenqr is assigned by stotute with the responsibility for acquisition policy for that agency, the official designated pursuant to section 16(3) of this A c t No other official or employee may be designated to serve on the Council. Regulations. "(c) FuNcnoNS.—<1) Subject to the provisions of section 6 of this Act, the General Services Administration, the Department of De- fense, and the National Aeronautics and Space Administration, pursuant to their respective authorities under title i n of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, et seq.), chapters 4 and 137 of title 10, United Stotes Code, and the National Aeronautics and Space Act of 1958 (42 U.S.C. 2451, et seq.), shall jointly issue and maintoin in accordance with subsection (f) of this section a single Government-wide procurement r^ulation, to be known as the Tederal Acquisition R^ulation'.
PUBLIC LAW 100-679—NOV. 17, 1988 102 STAT. 4057 "(2) Any other regulations relating to procurement issued by an executive agency shall be limited to (A) regulations essential to implement Government-wide policies and procedures within the agency, and (B) additional policies and procedures required to satisfy the specific and unique needs of the agency. "(3) The Administrator, in consultation with the Council, shall ensure that procurement regulations promulgated by executive agencies are consistent with the Federal Acquisition Regulation and in accordance with the policies set forth in section 2 of this Act or any policies issued pursuant to section 6(a) of this Act. "(4XA) Under procedures established by the Administrator, a person may request the Administrator to review any regulation relating to procurement on the basis that such regulation is inconsistent with the Federal Acquisition Regulation. "(B) Unless the request is frivolous or does not, on its face, state a valid basis for such review, the Administrator shall complete such a review not later than 60 days after receiving the request. The time for completion of the review may be extended if the Administrator determines that an additional period of review is required. The Administrator shall advise the requester of the reasons for the extension and the date by which the review will be completed. "(5) If the Administrator determines that a regulation relating to procurement is inconsistent with the Federal Acquisition Regula- tion or that the regulation should otherwise be revised to remove an inconsistency with any policies issued under section 6(a) of this Act or the policies set forth in section 2 of this Act, the Administrator shall rescind or deny the promulgation of the regulation or take such other action authorized under section 6 as may be necessary to remove the inconsistency. If the Administrator determines that such a r^ulation, although not inconsistent with the Federal Acquisition Regulation or such policies, should be revised to improve compliance with such Regulation or policies, the Administrator shall take such action authorized under section 6 as may be necessary and appropriate. "(6) The decisions of the Administrator shall be in writing and Public made publicly available. The Administrator shall provide a listing of information. such decisions in the annual report to Congress required by section 8 of this Act. "(d) ADDITIONAL RESPONSIBILITIES OF MEMBERSHIP.—Subject to the authority, direction, and control of the head of the agency con- cerned, each official who represents an agency on the CJouncil pursuant to subsection (b) shall— "(1) approve or disapprove all regulations that are, after 60 days after the date of enactment of this section, proposed for public comment, promulgated in final form, or otherwise made effective by such agency relating to procurement before such r ^ u l a t i o n may be promulgated in final form, or otherwise made effective, except that such ofHcial may grant an interim approval, without review, for not more than 60 days for a procurement r ^ ^ a t i o n in urgent and compelling cir- cumstances; "(2) carry out the responsibilities of such agency set forth in chapter 35 of title 44, United States Code, for each information collection request (as that term is defined in section 3502(11) of title 44, United States Code) that relates to procurement rules or r^ulations; and
102 STAT. 4058 PUBLIC LAW 100-679—NOV. 17, 1988 "(3) eliminate or reduce (A) any redundant or unnecessary levels of review and approval, in the procurement system of such agency, and (B) redundant or unnecessary procurement regulations which are unique to that agency. The authority to review and approve or disapprove regulations under paragraph (1) of this subsection may not be delegate to any person outside the office of the official who represents the agency on the Council pursuant to subsection (b). "(e) GOVERNING POUCIES.—All actions of the Council and of mem- bers of the Council shall be in accordance with and furtherance of the policies of section 2 and the policies prescribed under section 6(a) of this Act. "(f) GENERAL AUTHORITY WITH RESPECT TO FAR.—Subject to sec- tion 6(b), the Council shall manage, coordinate, control, and monitor the maintenance of, and issuance of and changes in, the Federal Acquisition Regulation. "(g) REPORTS.—The Administrator for Federal Procurement Policy shall— "(1) publish a report within 6 months after the date of enact- ment of this section and every 6 months thereafter relating to the development of procurement regulations to be issued in accordance with subsection (c) of this section; "(2) include in each report published under paragraph (1)— "(A) the status of each such regulation; "(B) a description of those regulations which are required by statute; "(C) a description of the methods by which public com- ment was sought with regard to each proposed regulation in accordance with section 22 of this Act, and to the extent appropriate, sections 3504(h) and 3507 of title 44, United States Code; "(D) regulatory activities completed and initiated since the last report; "(E) regulations, policies, procedures, practices, and forms that are under consideration or review by the OflQce of Federal Procurement Policy; "(F) whether the regulations have paperwork require- ments; "(G) the progress made in promulgating and implement- ing the Federal Acquisition Regulation; and (H) such other matters as the Administrator determines would be useful; and "(3) report to Congress within 180 days after the date of the enactment of this section, in consultation with the Adminis- trator of the Office of Information and Regulatory Affairs, regarding— "(A) the extent of the paperwork burden created by the Federal procurement process, and "(B) the extent to which the Federal procurement system can be streamlined to reduce unnecessary paperwork while at the same time maintaining recordkeeping and reporting requirements necessary to ensure the. int^rity and accountability of the system.". SEC. 5. COST ACCOUNTING STANDARDS BOARD. (a) AMENDMENT.—^The Office of Federal Procurement Policy Act is further amended by adding at the end thereof the following:
PUBLIC LAW 100-679—NOV. 17, 1988 102 STAT. 4059 "COST ACCSOUNTING STANDARDS BOARD "SBC. 26. (a) ESTABLISHMENT; MEBCBERSHIP; TERMS.—(1) There is 41 use 422. established within the OfHoe of Federal Procurement Policy an independent board to be known as the 'Cost Accounting Standards Board' (hereinafter referred to as the 'Board'). The Board shall consist of 5 members, including the Administrator, who shall serve as Chairman, and 4 members, all of whom shall have experience in Government contract cost accounting, and who shall be appointed as follows: "(A) two representatives of the Federal Government— "(i) one of whom shall be a representative of the Depart- ment of Defense and be appointed by the Secretaiy of Defense; and "(ii) one of whom shall be an ofHcer or employee of the General Services Administration appointed by the Adminis- trator of General Services; and "(B) two individuals from the private sector, each of whom shall be appointed by the Administrator and— "(i) one of whom shall be a representative of industry; and ''(ii) one of whom shall be particularly knowledgeable about cost accounting problems and systems. "(2XA) The term of office of each of the members of the Board, other than the Administrator for Federal Procurement Policy, shall be 4 years, except that— "(i) of the initial members, two shall be appointed for terms of two jrears, one shall be appointed for a term of three years, and one shall be appointed for a term of four years; "(ii) any member appointed to fill a vacancy in the Board shall serve for the remainder of the term for which his prede- cessor was appointed; and "(iii) no individual who is appointed under paragraph (IXA) of this subsection shall continue to serve after ceasing to be an officer or employee of the agency from which he or she was appointed. "^) A vacancy on the Board shall be filled in the same manner in which the original appointment was made. "(Q The initial members of the Board shall be appointed within 120 days after the date of enactment of this section. "(b) SENIOR STAFF.—^The Administrator, after consultation with the Board, may appoint an executive secretary and two additional staff mend)ers without r^;ard to the provisions of title 5, United States Code, governing appointments in the competitive service, and may pay such employees without r^ard to the provisions of chapter 51 and subchapter IQ of chapter 53 of such title relating to classi- fication and General Schedule pay rates, except that no individual so appointed may receive pay in excess of the annual rate of basic pay payable for ( ^ 1 8 of the General Schedule. "(c) OTHER STAFF.—^The Administrator may appoint, fix the com- pensation, and remove additional employees of the Board under the applicable provisions of title 5, United States Code. "(d) DETAHJED AND TEMPORARY PERSONNEL.—(1) The Board may use, without reimbursement, any personnel of a Federal agency (with the consent of the head of the agency concerned) to serve on advisory committees and task forces to assist the Board in carrying
102 STAT. 4060 PUBLIC LAW 100-679—NOV. 17, 1988 out the functions and responsibilities of the Board under this section. "(2) The Administrator, after consultation with the Board, may procure temporary and intermittent services under section 3109(b) of title 5, United States C!ode, of personnel for the purpose of serving on advisory committees and t£isk forces to assist the Board in carrying out the functions and responsibilities of the Board under this section. "(e) COMPENSATION.—Except as otherwise provided in subsection (a), the members of the Board who are officers or employees of the Federal Government, and officers and employees of other agencies of the Federal Grovernment who are used under subsection (dXD, shall receive no additional compensation for services, but shall continue to be compensated by the emplo3n[ng Department or agency of such officer or employee. Each member of the Board appointed from private life shall receive compensation at a rate not to exceed the daily equivalent of the rate prescribed for level IV of the Executive Schedule for each day (including travel time) in which the member is engaged in the actual performance of duties vested in the Board. Individuals hired under subsection (dX2) may receive com- pensation at rates fixed by the Administrator, but not to exceed the daily equivalent of the rate prescribed for level V of the Federal Executive Salary Schedule under section 5316 of title 5, United States Code, for each day (including travel time) in which such appointees are properly engaged in the actual performance of duties under this section. While serving away from homes or the regular place of business, Board members and other appointees serving on an intermittent basis under this section shall be allowed travel expenses in accordance with section 5703 of title 5, United Stetes Code. "(f) COST ACCOUNTING STANDARDS AUTHORITY.—(1) The Board shall have the exclusive authority to make, promulgate, amend, and rescind cost accounting standards and interpretetions thereof de- signed to achieve uniformity and consistency in the cost accounting standards governing measurement, assignment, and allocation of costs to contracts with the United States. "(2) Cost accounting standards promulgated under this section shall be mandatory for use by all executive agencies and by contrac- tors and subcontractors in estimating, accumulating, and reporting costs in connection with pricing and administration of, and settle- ment of disputes concerning, all negotiated prime contract and subcontract procurements with the United States in excess of $500,000, other than contracts or subcontracts where the price negotiated is based on (A) esteblished catalog or market prices of commercial items sold in substantial quantities to the general public, or (B) prices set by law or regulation. "(3) Not later than 180 days after the date of enactment of this section, the Administrator, after consultation with the Board, shall prescribe rules and procedures governing actions of the Board under this section. Such rules and procedures shall require that any cost accounting standard promulgated, amended, or rescinded (and interpretations thereoO shall be adopted by majority vote of the Board members. "(4) The Board is authorized— "(A) to exempt classes or categories of contractors and sub- contractors from the requirements of this section; and
PUBLIC LAW 100-679—NOV. 17, 1988 102 STAT. 4061 "(B) to establish procedures for the waiver of the require- ments of this section with respect to individual contracts and subcontracts. "(g) REQUIREMENTS FOR STANDARDS.—(1) Prior to the promulgation under this section of cost accounting standards and interpretations thereof, the Board shall— "(A) take into account, after consultation and discussions with the Comptroller General and professional accounting organiza- tions, contractors, and other interested parties— "(i) the probable costs of implementation, including infla- tionary effects, if any, compared to the probable benefits; "(ii) the advantages, disadvantages, and improvements anticipated in the pricing and administration of, and settle- ment of disputes concerning, contracts; and "(iii) the scope of, and alternatives available to, the action proposed to be taken; "(B) prepare and publish a report in the Federal Register on Reports. the issues reviewed under paragraph (IXA); Federal Register, "(CXi) publish an advanced notice of proposed rulemaking in publication. the Federal Register in order to solicit comments on the report Federal prepared pursuant to subparagraph (B); Register, "(ii) provide all parties affected a period of not less than 60 publication. days after such publication to submit their views and com- ments; and "(iii) during this 60-day period, consult with the Comptroller General and consider any recommendation the Comptroller General may make; and "(D) publish a notice of such proposed rulemaking in the Federal Federal Register and provide all parties affected a period of not Register, less than 60 days after such publication to submit their views publication. and comments. "(2) Rules, regulations, cost accounting standards, and modifica- Effective date. tions thereof promulgated or amended under this section shall have the full force and effect of law, and shall become effective within 120 days after publication in the Federal Register in final form, unless the Board determines a longer period is necessary. Implementation dates for contractors and subcontractors shall be determined by the Board, but in no event shall such dates be later than the beginning of the second fiscal year of the contractor or subcontractor after the standard becomes effective. Rules, regulations, cost accounting standards, and modifications thereof promulgated or amended under this section shall be accompanied by prefatory comments and by illustrations, if necessary. "(3) The functions exercised under this section are excluded from the operation of sections 551, 553 through 559, and 701 through 706 of title 5, United States (Dode. "(h) IMPLEMENTING REGULATIONS.—(1) The Board shall promul- gate rules and regulations for the implementation of cost accounting standards promulgated or interpreted under subsection (f). Such regulations shall be incorporated into the Federal Acquisition Regu- lation and shall require contractors and subcontractors as a condi- tion of contracting with the United States to— "(A) disclose in writing their cost accounting practices, includ- ing methods of distinguishing direct costs from indirect costs and the basis used for allocating indirect costs; and "(B) agree to a contract price adjustment, with interest, for any increased costs paid to such contractor or subcontractor by
102 STAT. 4062 PUBLIC LAW 100-679—NOV. 17, 1988 the United States by reason of a change in the contractor's or subcontractor's cost accounting practices or by reason of a failure by the contractor or subcontractor to comply with ap- plicable cost accounting standards. "(2) If the United States and a contractor or subcontractor fail to agree on a contract price adjustment, including whetiier the con- tractor or subcontractor has complied with the applicable cost accounting standards, the disagreement will constitute a dispute under the Contract D i l u t e s Act (41 U.S.C. 601). "(3) Any contract price adjustment undertaken pursuant to para- graph (1)^) shall be made, where applicable, on relevant contracts between the United States and the contractor that are subject to the cost accounting standards so as to protect the United States from payment, in t£e aggr^ate, of increased costs (as defined by the Board). In no case shall the Government recover costs greater than the increased cost (as defined by the Board) to the Government, in the aggr^ate, on the relevant contracts subject to the price adjust- ment, unless the contractor made a change in its cost accounting practices of which it was aware or should have been aware at the time of the price negotiation and which it failed to disclose to the Government. "(4) The interest rate applicable to any contract price adjustment shall be the annual rate of interest established under section 6621 of the Internal Revenue Code of 1986 (26 U.S.C. 6621) for such period. Such interest shall accrue from the time payments of the increased costs were made to the contractor or subcontractor to the time the United States receives full compensation for the price adjustment. "(i) REPOBTS TO CONGRESS.—^The Board shall report to the Con- gress not later than one year after the date of enactment of this section, and annually thereedfter, with respect to the activities and operations of the Board under this section, together with such recommendations as it considers appropriate. (j) EFVBCT ON OTHER STANDARDS AND REGULATIONS.—<1) All cost accounting standards, waivers, exemptions, interpretations, modi- fications, rules, and r^ulations promulgated by the Cost Accounting Standards Board under section 719 of the Defense Production Act of 1950 (50 UJS.C. App. 2168) shall remain in effect unless and until amended, superseded, or rescinded by the Board pursuant to this section. "(2) Existing cost accounting standards referred to in paragraph (1) shall be subject to the provisions of this Act in the same manner as if promulgated by the Board under this Act. "(3) The Administrator, under the authority set forth in section 6 of this Act, shall ensure that no r^ulation or proposed regulation of an executive agency is inconsistent with a cost accounting standard promulgated or amended under this section by rescinding or deny- ing the promulgation of any such inconsistent regulation or pro- posed regulation and taking such other action authorized under section 6 as may be appropriate. "(4) Costs which are the subject of cost accounting standards promulgated under this section shall not be subject to regulations that are established by another executive agency that differ from such standards with respect to the measurement assignment, and allocation of such costs. "(k) EhLAMiNATiONS.—For the purpose of determining whether a contractor or subcontractor has complied with cost accounting stondaids promulgated under this section and has followed consist-
PUBLIC LAW 100-679—NOV. 17, 1988 102 STAT. 4063 ently the contractor's or subcontractor's disclosed cost accounting practioes, any authorized representative of the head Of the agency ooncemed, df the offices of inspector general established pursuant to the Inspectar General Act of 1978, or of the CSomptroller General of the United States shall have the right to examine and make copies of any documents, papers, or records of such contractor or sub- contractor relating to compliance with such cost accounting standards. "(1) AUTHORIZATION OF APPROFBIATIONS.—There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section.". (b) CONFORMING AMENDMENT.—Section 719 of the Defense Produc- tion Act of 1950 (50 U.S.C. App. 2168) is repealed. SBC CL PROCDKEMENT INTEGRITY. (a) AMENDMENT.—The Office of Federal Procurement Policy Act is further amended by adding at the end the following: "PROCUREMENT INTEGRITT "SEC. 27. (a) PROHIBITBD CONDUCT BY COMPETING CONTRACTORS.— 4i use 423. During the conduct of any Federal agen<7 procurement of property or services, no competing contractor or any officer, employee, rep- resentative, agent, or consultant of any competing contractor shall knowingly— "(1) make, directly or indirectly, any ofTer or promise of future employment or business opportunity to, or engage, di- rectly or indirectly, in any discussion of future employment or business opportunity with, any procurement official of such agency; "(2) offer, give, or promise to offer or give, directly or in- directly, any money, gratuity, or other tlmig of value to any procurement official of such agency; or "(3) solicit or obtain, directly or indirectly, from any officer or employee of such agency, prior to the award of a contract any proprietary or source selection information regarding such procurement. "(b) PRomBFTED CONDUCT BY PROCUREMENT OFFICIALS.—^During the conduct of any Federal agency procurement of property or services, no procurement officisd of such agency shall knowingly— "(1) solicit or accept, directly or indirectly, any promise of future employment or business opportunity from, or engage, directly or indirectly, in any discussion of future employment or business opportunity with, any officer, employee, representa- tive, agent, or consultant of a competing contractor; "(2) ask for, demand, exact, solicit, seek, accept, receive, or agree to receive, directly or indirectly, any money, gratuity, or otiier thing of value from any officer, employee, representative, agent, or consultant of any competing contractor for such procurement; or "(3) disclose any proprietary or source selection information r^arding such procurement Erectly or indirectly to any person ot£er than a person authorized by the head of such agency or the contracting officer to receive such information. "(c) DISCLOSURE TO UNAUTHORIZED PERSONS.—During the conduct of any Federal agency procurement of property or services, no person who is given authorized or unauthorized access to propri-
102 STAT. 4064 PUBLIC LAW 100-679—NOV. 17, 1988 etary or source selection information regarding such procurement, shall knowingly disclose such information, directly or indirectly, to any person other than a person authorized by the head of such agency or the contracting officer to receive such information. "(d) CERTIFICATION AND ENFORCEMENT MATTERS.—(1) A Federal agency may not award a contract for the procurement of property or services to any competing contractor, or agree to any modification or extension of a contract, unless the officer or employee of such contractor responsible for the offer or bid for such contract, or the modification or extension of such contract, as the case may be— "(AXi) certifies in writing to the contracting officer respon- sible for such contract that such officer or employee of the competing contractor has no information concerning a violation or possible violation of subsection (a), (b), (c), or (e), or applicable implementing regulations, pertaining to such procurement; or "(ii) discloses to such contracting officer any and all such information and certifies in writing to such contracting officer that any and all such information has been disclcx^; and "(B) certifies in writing to such contracting officer that each officer, employee, agent, representative, and consultant of such competing contractor who has participated personally and substantially in the preparation or submission of such bid or offer, or in such modification or extension of such contract, as the case may be, has certified to such competing contractor that he or she— "(i) is familiar with, and will comply with, the require- ments of subsection (a) and applicable implementing regula- tions; and "(ii) will report immediately to the officer or employee of the competing contractor responsible for the offer or bid for any contract or the modification or extension of such con- tract, as the case may be, any information concerning a violation or possible violation of subsection (a), (b), (c), or (e), or such applicable implementing regulations, pertaining to such procurement. "(2) A Federal agency may not award a contract for the procure- ment of property or services, or agree to any modification or exten- sion of any such contract, unless the contracting officer responsible for such procurement— "(A) certifies in writing to the head of such agency that the contracting officer has no information concerning a violation or possible violation of subsection (a), (b), (c), or (e), or applicable implementing regulations, pertaining to such procurement; or "(B) discloses to the head of such agency any and all such information and certifies in writing that any and all such information has been disclosed. "(3) The head of a Federal agency may require any procurement official or any competing contractor, at any time during the conduct of any Federal agency procurement of property or services— "(A) to certify in writing to the head of such agency that such procurement official or the officer or employee of the competing contractor responsible for the offer or bid for such contract or the modification or extension of such contract, as the case may be, has no information concerning a violation or possible viola- tion of subsection (a), (b), (c), or (e), or applicable implementing r^ulations, pertaining to such procurement; or
PUBLIC LAW 100-679—NOV. 17, 1988 102 STAT. 4065 ''(B) to disclose to the head of such agency any and all such information and to certify in writing that any and all such information has been disclosed. "(4) DP a procurement official leaves the Government durii^ the conduct of such a procurement, such official shall certify that he or she understands tihe continuing obligation not to disclose propri- etary or source selection information. "(5) For the purposes of enforcing the requirements of this section, the contracting officer responsible for the conduct of a procurement shall maintain, as part of die procurement file— "(A) all certifications made by procurement officials and competing contractors with regard to such procurement, as required by this subsection; and (B) a record of all persons who have been authorized by the Records. head of the agency or the contracting officer to have access to proprietary or source selection information regarding such procurement. "(6) Any person making a certification required by this subsection Fraud. shall be notified of the applicability of section 1001 of title 18, United States Code, to false, fictitious, or fraudulent statements in such certification. "(7XA) This subsection applies only to contracts, extensions, and modifications in excess of $100,000. "(B) This subsection need not be applied to a contract— *'(i) with a foreign government or an international organiza- tion that is not required to be awarded using competitive proce- dures pursuant to section 303(cX4) of the F^eral Property and Administrative Services Act of 1949 or section 2304(cX4) of title 10, United States Code; or "(ii) in an exceptional case, when the head of the Federal agency concerned determines in writing that this subsection should be waived pursuant to procedures and criteria established in implementing r^ulations issued pursuant to subsection (m) and notifies the 0>ngress in writing of such determination. Hie authority to make determinations under clause (ii) of this subparagraph may not be delegated. "(e) REsnucnoNS ON GOVERNMENT OFFICIALS AND EMPLOYEES.— No Government official or employee, civilian, or military, who has participated personally and substantially in the conduct of any Federal agency procurement or who has personally reviewed and approved the aifi^utl, modification, or extension of any contract for such procurement shall— "(1) participate in any manner, as an officer, employee, agent, or representative of a competing contractor, in any n^otiations leading to tiie award, modification, or extension of a contract for such procurement, or "(2) participate personally and substantially on behalf of the competing contractor in the performance of such contract, during the period ending 2 years after the last date such individual participated personally and substantially in the conduct of such procurement or personally reviewed and approved the award, modi- fication, or extension of any contract for such procurement "(f) CONTRACTUAL PENALTIES.—(1) R^ulations issued pursuant to subsection (m) shall require that each contract awarded by a Federal agency contain a clause specified in such r^ulation that provides s^ypropriate contractual penalties for conduct of any competing
102 STAT. 4066 PUBLIC LAW 100-679—NOV. 17, 1988 contractor prohibited by subsection (a) and for any such conduct of any officer, employee, agent, representative, or consultant of such contractor. "(2) Tlie following remedies are authorized to be included in, and shall be considered in the development of, such regulations: "(A) Denial of pajrment of all or any portion of the profit component of amounts otherwise payable to the contractor by the Federal agency imder the contract and recovery of all or any portion of the profit component of amounts paid to the contractor by the Federal agency under the contract. "(B) Termination of the contract for default. "(C) Any other appropriate penalty. "(g) ADMINISTRATIVE ACTIONS.—(1) If an agency receives a disclo- sure of information pursuant to subsection (d) or otherwise receives or obtains information providing a reasonable basis to believe that an officer, employee, agent, representative, or consultant, of a competing contractor has knowingly violated the requirements of this section— "(A) in the case of a procurement in which a contract has not been awarded, the agency shall determine whether to terminate the procurement or take other appropriate actions; "(B) in the case of a procurement with respect to which a contract has been awarded, the agency shall determine whether to void or rescind the contract, to terminate the contract for default, to impose sanctions upon the contractor, or to permit the contractor to continue to perform the contract, subject to review in accordance with, and to the extent provided in, the Contract Disputes Act of 1978, or to take other appropriate actions; and "(O if the agency determines that such a knowing violation has occurred, the agency, pursuant to procedures specified in the Federal Acquisition Regulation— "(i) may impose an immediate suspension, and "(ii) shall determine whether to initiate a debarment proceeding, against the competing contractor or other person who commit- ted such violation. "(2) Any procurement official of a Federal agency who engages in conduct prohibited by subsection (b) or (c) shall be subject to removal or other appropriate adverse personnel action pursuant to the proce- dures specified in chapter 75 of title 5, United States Code, or other applicable law or regulation. "(3) The actions taken under paragraph (1) or (2) may be sus- pended by the agency head upon the request of the Attorney Gen- eral p e n ^ g the disposition of any civil or criminal actions pursuant to subsections (h) and (i). "(h) CIVIL PENALTIES.—Any person who engages in conduct prohibited by subsection (a), (b), (c), or (e) shall be subject to the imposition of a civil fine in a civil action brought by the United States in an appropriate district court of the United States. The amount of any such civil fine for such violation may not exceed— "(1) $100,000 in the case of an individual; or "(2) $1,000,000 in the case of a competing contractor (other than an individual), "(i) CRIMINAL PENALTIES.—Whoever, during the conduct of a Fed- eral agency procurement of property or services—
PUBLIC LAW 100-679—NOV. 17, 1988 102 STAT. 4067 "(1) being a competing contractor or an officer, employee, representative, agent, or consultant of a competing contractor, knowingly and willfully solicits or obtsiins, directly or indirectly, from any officer or employee of such agency any proprietary or source selection information (as such terms are defined in subsection (n) and in regulations prescribed pursuant to subsec- tion (m)), or "(2) being an officer or employee of such agency, knowingly and willfully discloses or promises to disclose, directly or in- directly, to any competing contractor or any officer, employee, representative, agent, or consultant of a competing contractor any proprietary or source selection information, shall be imprisoned for not more than 5 years, or fined in accord- ance with title 18, United States Code, or both. "(j) TRAINING.—The head of each Federal agency shall establish a procurement ethics program for its procurement officials. The program shall, at a minimum— "(1) provide for the distribution of written explanations of the provisions of subsection (b) to such procurement officials; and "(2) require each such procurement official, as a condition of serving as a procurement official, to certify that he or she is familiar with the provisions of subsection (b), and will not engage in any conduct prohibited by such subsection, and will report immediately to the contracting officer any information concerning a violation or possible violation of subsection (a), (b), (c), or (e), or applicable implementing regulations, "(k) REMEDIES NOT EXCLUSIVE.—Nothing in this subsection shall be construed to limit the applicability of the requirements, sanc- tions, contract penalties, and remedies established under any other law, but no Eigency shall be relieved of the obligation to carry out the requirements of this section because such agency has also applied such other requirements, sanctions, contract penalties, or remedies. "(1) No AUTHORITY TO WITHHOLD INFORMATION.—Nothing in this section shall be construed to authorize the withholding of any information from the Congress, any committee or subcommittee thereof, a Federal agency, any board of contract appeals of a Federal agency, the Comptroller General, or an Inspector General of a Federal agency. "(m) IMPLEMENTING REGULATIONS AND GuiDEUNES.—Government- wide regulations and guidelines deemed appropriate to carry out this section shall be issued in the Federal Acquisition Regulation within 180 days after the date of enactment of this section, "(n) DEFINITIONS.—As used in this section: "(1) The term 'during the conduct of any Federal agency procurement of property or services' means the period begin- ning with the development, preparation, and issuance of a procurement solicitation, and concluding with the award, modi- fication, or extension of a contract, and includes the evaluation of bids or proposals, selection of sources, and conduct of negotiations. "(2) The term 'competing contractor', with respect to any procurement (including any procurement using procedures other than competitive procedures) of property or services, means any entity that is, or is reasonably likely to become, a competitor for or recipient of a contract or subcontract under such procurement, and includes any other person acting on behalf of such an entity.
102 STAT. 4068 PUBLIC LAW 100-679—NOV. 17, 1988 "(3XA) The term 'procurement official' means any civilian or militaiy official or employee of an agency who has participated personally and substantially in the conduct of the agency procurement concerned, including all officials and employees who are responsible for reviewing or approving the pro- curement, as further defined by applicable implementing r^ulations. "(B) For purposes of subparagraph (A), the term 'employee of an agency* includes a contractor, subcontractor, consultant, expert, or adviser (other than a competing contractor) acting on behalf of, or providing advice to, the agency with respect to any phase of the agency procurement concerned. "(4) The term 'contracting officer* means any official or em- ployee of a Federal agency who has been authorized by the agenpy head or his or her designee to enter into, administer, or terminate contracts and m £ ^ related determinations and findings. "(5) The term ^Federal agency' has the meaning provided by section 3(b) of the Federal ^t)perty and Administrative Services Act of 1949 (40 U.S.C. 472(b)). "(6) The term 'proprietary information' means— "(A) information contained in a bid or proposal; "(B) cost or pricing data; or "(Q any other information submitted to the Grovemment by a contractor and designated as proprietary, in accord- ance with law or r^ulation, by the contractor, the head of the agency, or the contracting officer. "(7) The term 'source selection information' means informa- tion determined by the head of the agency or the contracting officer to be information— "(A) the disclosure of which to a competing contractor would jeopardize the i n t ^ ^ t y or successfid completion of the procurement concerned; and *'W>) which is required by statute, regulation, or order to be secured in a source selection file or other restricted facility to prevent such disclosure; as further defined by regulations issued pursuant to subsection (m) of this section.". 41 use 423 note. (b) EFTBCTIVB DATB.—^The amendment made by subsection (a) shall take effect 180 days after the date of enactment of this Act. 41 u s e 405 note. SEC 7. PROFIT METHODOLOGY STUDY. (a) I N GENERAL.—^The Administrator shall conduct a study to develop a consistent methodology which executive agencies should use for measuring the profits earned by government contractors on procurements, other than procurements where the price is based on adequate price competition or on established catalog or market prices of conunercial items sold in substantial quantities to the general public (b) CoiiiTRACTORs' FINANCIAL DATA.—^The methodology developed under subsection (a) shall include adequate procedures for verifying and maintaining the confidentiality of contractors' financial data. SEC 8. DEFINITION OF ARCHTTECTURAL AND ENGINEERING SERVICES. Section 901 of the Federal Property and Administrative Services Act of 1949 (40 UJS.C. 541) is amended by striking out paragraph (3) and inserting the following:
PUBLIC LAW 100-679—NOV. 17, 1988 102 STAT. 4069 "(3) The term 'architectural and engineering services* means— "(A) professional services of an architectural or engineering nature, as defined by State law, if applicable, which are re- quired to be performed or approved by a person licensed, reg- istered, or certified to provide such services as described in this paragraph; "(B) professional services of an architectural or engineering nature performed by contract that are associated with research, planning, development, design, construction, alteration, or repair of real property; and "(C) such other professional services of an architectural or engineering nature, or incidental services, which members of the architectural and engineering professions (and individuals in their employ) may logically or justifiably perform, including studies, investigations, surve3dng and mapping, tests, evalua- tions, consultations, comprehensive planning, program manage- ment, conceptual designs, plans and specifications, value engineering, construction phase services, soils engineering, drawing reviews, preparation of operating and maintenance manuals, and other related services.". SEC. 9. ESTABLISHMENT OF THE COMMERCIAL PRODUCTS ADVOCATE. The Office of Federal Procurement Policy Act is further amended by adding at the end thereof the following: "ADVOCATE FOR THE ACQUISITION OF COMMERCIAL PRODUCTS "SEC. 28. There is established in the Office of Federal Procure- 4i use 424. ment Policy the position of Advocate for the Acquisition of Commercial Products. The Advocate shall report directly to the Administrator. The Advocate for Acquisition of Commercial Prod- ucts shall— "(1) review all proposed procurement regulations and report Reports. to the Administrator as to whether such regulations will encourage or discourage the acquisition of commercial products by Federal agencies; "(2) provide recommendations to the Administrator as to which procurement regulations should be rescinded or modified to encourage the acquisition of commercial products; and "(3) provide recommendations to the Administrator as to methods of simplifying procurement regulations governing ac- quisition of commercial products, including the most efficient method to apply, modify, or waive the certification require- ments of section 27 of this Act with respect to contracts for such products.". SEC. 10. STUDY AND REPORT BY THE ADMINISTRATOR FOR FEDERAL PROCUREMENT POLICY. No later than April 1, 1989, the Administrator for Federal Procurement Policy, in consultation with the Comptroller General, shall conduct a study and submit a report to the Committee on Governmental Affairs of the Senate and the Committee on Govern- ment Operations of the House of Representatives— (1) on the extent to which the data collected by the Federal Procurement Data System is adequate for the management, oversight, and evaluation of Federal procurement; and
102 STAT. 4070 PIJBLIC LAW 100-679—NOV. 17, 1988 (2) which shall include any appropriate recommendations for improvements of such system. SEC. 11. ELEVATION OF PRESIDENTIAL APPOINTEES WITHIN THE OFFICE OF MANAGEMENT AND BUDGET. (a) EXECUTIVE SCHEDULE, LEVEL L—Section 5312 of title 5, United States Code, is amended by adding at the end thereof the following: "Director of the Office of Management and Budget.". (b) EXECUTIVE SCHEDULE, LEVEL IL—Section 5313 of title 5, United States Code, is amended— (1) by adding at the end thereof the following: "Deputy Director of the Office of Management and Budget."; and (2) by striking out "Director of the Office of Management and Budget.". (c) EXECUTIVE SCHEDULE, LEVEL IIL—Section 5314 of title 5, United States Code, is amended— (1) by adding at the end thereof the following: "Administrator for Federal Procurement Policy. "Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget."; and (2) by striking out "Deputy Director of the Office of Manage- ment and Budget.". (d) EXECUTIVE SCHEDULE, LEVEL IV.—Section 5315 of title 5, United States Code, is amended— (1) by striking out "Administrator for Federal Procurement Policy. ; and (2) by striking out "Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget.". 5 use 5312 note. (e) EFFECTIVE DATE.—The amendments made by this section shall be effective on January 20,1989. SEC. 12. TRAVEL EXPENSES UNDER CERTAIN GOVERNMENT CONTRACTS. Section 24 of the Office of Federal Procurement Policy Act (41 U.S.C. 420) is amended— (1) by redesignating such section as subsection (a) of section 24; and (2) by adding at the end thereof the following new subsection: "OJXI) The provisions of subsection (a) shall not apply to any agreement between an executive agency and a State institution, or an executive eigency and a nonprofit institution, entered into for the purpose for conducting federally sponsored research and related activities. "(2) Under any agreement described under paragraph (1), costs incurred by personnel for travel, including costs of lodging, other subsistence, and incidental expenses, shall be considered reasonable and allowable only to the extent that such costs do not exceed— "(A) charges normally allowed by the respective institution in its regular operations as a result of an institutional policy; and "(B) the limits and principles as are provided for by govern- ment-wide regulation of such costs established by the Director of the Office of Management and Budget.
PUBLIC LAW 100-679—NOV. 17, 1988 102 STAT. 4071 "(3) The regulation under paragraph (2XB) shall specifically pro- vide that in the absence of an institutional policy regarding travel costs, the rates and amounts established under subchapter I of chapter 57 of title 5, United States Ck)de, or by the Administrator of General Services or the President (or his designee) pursuant to any provisions of such subchapter shall apply to agreements between an , executive agency and a State institution, or an executive agency and a nonprofit institution, entered into for the purpose of conducting federally sponsored research and related activities.". SEC. 13. FEDERAL EMPLOYEE BENEFITS FOR CERTAIN EMPLOYEES OF FORMER PRESIDENTS AND VICE PRESIDENTS. (a) RETIREMENT BENEFITS.—(1) Section 8331(1) of title 5, United States CJode, is amended by— (A) striking out "and" at the end of subparagraph (I); (B) by inserting "and" after the semicolon at the end of subparagraph (J); and (C) inserting after subparagraph (J) the following new subparagraph: "(K) an individual appointed to a position on the office staff of a former President, or a former Vice President under section 4 of the Presidential Transition Act of 1963, as amended (78 Stat. 153), who immediately before the date of such appointment was an employee as defined under any other subparagraph of this paragraph;". (2) Section 8401(11) of title 5, United States Code, is amended by striking out "or (J)" and inserting in lieu thereof "(J), or (K)". (b) LIFE INSURANCE.—Section 8701(a) of title 5, United States Oxie, is amended by— (1) striking out "and" at the end of paragraph (8); (2) by inserting "and" after the semicolon at the end of paragraph (9); and (3) inserting after paragraph (9) the following new paragraph: "(10) an individual appointed to a position on the office staff of a former President, or a former Vice President under section 4 of the Presidential Transition Act of 1963, as amended (78 Stat. 153), who immediately before the date of such appointment was an employee as defined under any other paragraph of this subsection;". (c) HEALTH BENEFITS.—Section 8901(1) of title 5, United States Code, is amended by— (1) striking out "and" at the end of subparagraph (F); and (2) inserting after subparagraph (G) the following new subparagraphs: "(H) an individual appointed to a position on the office staff of a former President under section 10)) of the Act of August 25,1958 (72 Stat. 838); and 19-1S4 O—91—Part S-
102 STAT. 4072 PUBLIC LAW 100-679—NOV. 17, 1988 "(I) an individual appointed to a position on the office staff of a former President, or a former Vice President under section 4 of the Presidential Transition Act of 1963, as amended (78 Stat. 153), who immediately before the date of such appointment was an employee as defined under any other subparagraph of this paragraph;". Approved November 17, 1988. LEGISLATIVE HISTORY—S. 2215 (H.R. 3345): HOUSE REPORTS: No. 100-911 accompanying H.R. 3345 (Comm. on Government Operations). SENATE REPORTS: No. 100-424 (Comm. on Governmental Affairs). CONGRESSIONAL RECORD, Vol. 134 (1988): Aug. 11, considered and passed Senate. Sept. 13, H.R. 3345 considered and passed House; proceedings vacated and S. 2215, amended, passed in lieu. Oct. 19, Senate concurred in House amendments with an amendment. Oct. 20, House concurred in Senate amendment.