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S. 906: Reducing DHS Acquisition Cost Growth Act

The text of the bill below is as of Oct 5, 2017 (Reported by Senate Committee).


II

Calendar No. 234

115th CONGRESS

1st Session

S. 906

[Report No. 115–165]

IN THE SENATE OF THE UNITED STATES

April 7, 2017

(for herself and Mr. Daines) introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs

October 5, 2017

Reported by , with an amendment

Insert the part printed in italic

A BILL

To amend the Homeland Security Act of 2002 to provide for congressional notification regarding major acquisition program breaches, and for other purposes.

1.

Short title

This Act may be cited as the Reducing DHS Acquisition Cost Growth Act.

2.

Congressional notification for major acquisition programs

(a)

In general

Subtitle D of title VIII of the Homeland Security Act of 2002 (6 U.S.C. 391 et seq.) is amended by adding at the end the following:

836.

Congressional notification and other requirements for major acquisition program breach

(a)

Definitions

In this section:

(1)

Acquisition

The term acquisition has the meaning given the term in section 131 of title 41, United States Code.

(2)

Acquisition program

The term acquisition program means the process by which the Department acquires, with any appropriated amounts, by contract for purchase or lease, property or services (including construction) that support the missions and goals of the Department.

(3)

Acquisition program baseline

The term acquisition program baseline, with respect to an acquisition program, means a summary of the cost, schedule, and performance parameters, expressed in standard, measurable, quantitative terms, which shall be met in order to accomplish the goals of the program.

(4)

Appropriate committees of Congress

The term appropriate committees of Congress has the meaning given the term in section 226(a).

(5)

Best practices

The term best practices, with respect to acquisition, means a knowledge-based approach to capability development that includes—

(A)

identifying and validating needs;

(B)

assessing alternatives to select the most appropriate solution;

(C)

clearly establishing well-defined requirements;

(D)

developing realistic cost assessments and schedules;

(E)

securing stable funding that matches resources to requirements;

(F)

demonstrating technology, design, and manufacturing maturity;

(G)

using milestones and exit criteria or specific accomplishments that demonstrate progress;

(H)

adopting and executing standardized processes with known success across programs;

(I)

establishing an adequate workforce that is qualified and sufficient to perform necessary functions; and

(J)

integrating the capabilities described in subparagraphs (A) through (I) into the mission and business operations of the Department.

(6)

Breach

The term breach, with respect to a major acquisition program, means a failure to meet any cost, schedule, or performance threshold specified in the most recently approved acquisition program baseline.

(7)

Component Acquisition Executive

The term Component Acquisition Executive means the senior acquisition official within a component who is designated in writing by the Under Secretary for Management, in consultation with the component head, with authority and responsibility for leading a process and staff to provide acquisition and program management oversight, policy, and guidance to ensure that statutory, regulatory, and higher level policy requirements are fulfilled, including compliance with Federal law, the Federal Acquisition Regulation, and Department acquisition management directives established by the Under Secretary for Management.

(8)

Major acquisition program

The term major acquisition program means an acquisition program of the Department that is estimated by the Secretary to require an eventual total expenditure of at least $300,000,000 (based on fiscal year 2017 constant dollars) over the life cycle cost of the program.

(b)

Requirements within Department in event of breach

(1)

Notifications

(A)

Notification of breach

If a breach occurs in a major acquisition program, the program manager for the program shall notify the Component Acquisition Executive for the program, the head of the component concerned, the Executive Director of the Program Accountability and Risk Management division, the Under Secretary for Management, and the Deputy Secretary not later than 30 calendar days after the date on which the breach is identified.

(B)

Notification to Secretary

If a breach occurs in a major acquisition program and the breach results in a cost overrun greater than 15 percent, a schedule delay greater than 180 days, or a failure to meet any of the performance thresholds from the cost, schedule, or performance parameters specified in the most recently approved acquisition program baseline for the program, the Component Acquisition Executive for the program shall notify the Secretary and the Inspector General of the Department not later than 5 business days after the date on which the Component Acquisition Executive for the program, the head of the component concerned, the Executive Director of the Program Accountability and Risk Management Division, the Under Secretary for Management, and the Deputy Secretary are notified of the breach under subparagraph (A).

(2)

Remediation plan and root cause analysis

(A)

In general

If a breach occurs in a major acquisition program, the program manager for the program shall submit in writing to the head of the component concerned, the Executive Director of the Program Accountability and Risk Management division, and the Under Secretary for Management, at a date established by the Under Secretary for Management, a remediation plan and root cause analysis relating to the breach and program.

(B)

Remediation plan

The remediation plan required under subparagraph (A) shall—

(i)

explain the circumstances of the breach at issue;

(ii)

provide prior cost estimating information;

(iii)

include a root cause analysis that determines the underlying cause or causes of shortcomings in cost, schedule, or performance of the major acquisition program with respect to which the breach has occurred, including the role, if any, of—

(I)

unrealistic performance expectations;

(II)

unrealistic baseline estimates for cost or schedule or changes in program requirements;

(III)

immature technologies or excessive manufacturing or integration risk;

(IV)

unanticipated design, engineering, manufacturing, or technology integration issues arising during program performance;

(V)

changes to the scope of the program;

(VI)

inadequate program funding or changes in planned out-year funding from one 5-year funding plan to the next 5-year funding plan as outlined in the Future Years Homeland Security Program required under section 874;

(VII)

legislative, legal, or regulatory changes; or

(VIII)

inadequate program management personnel, including lack of sufficient number of staff, training, credentials, certifications, or use of best practices;

(iv)

propose corrective action to address cost growth, schedule delays, or performance issues;

(v)

explain the rationale for why a proposed corrective action is recommended; and

(vi)

in coordination with the Component Acquisition Executive for the program, discuss all options considered, including—

(I)

the estimated impact on cost, schedule, or performance of the program if no changes are made to current requirements;

(II)

the estimated cost of the program if requirements are modified; and

(III)

the extent to which funding from other programs will need to be reduced to cover the cost growth of the program.

(3)

Review of corrective actions

(A)

In general

The Under Secretary for Management—

(i)

shall review each remediation plan required under paragraph (2); and

(ii)

not later than 30 days after submission of a remediation plan under paragraph (2), may approve the plan or provide an alternative proposed corrective action.

(B)

Submission to Congress

Not later than 30 days after the date on which the Under Secretary for Management completes a review of a remediation plan under subparagraph (A), the Under Secretary for Management shall submit to the appropriate committees of Congress—

(i)

a copy of the remediation plan; and

(ii)

a statement describing the corrective action or actions that have occurred pursuant to paragraph (2)(B)(iv) for the major acquisition program at issue, with a justification for each action.

(c)

Requirements relating to congressional notification if breach occurs

(1)

Notification to Congress

If a notification to the Secretary is made under subsection (b)(1)(B) relating to a breach in a major acquisition program, the Under Secretary for Management shall notify the appropriate committees of Congress of the breach in the next quarterly Comprehensive Acquisition Status Report, as required in the matter under the heading Office of the Under Secretary for Management in title I of division F of the Consolidated Appropriations Act of 2016 (Public Law 114–113; 129 Stat. 2493), after receipt by the Under Secretary for Management of notification under that subsection.

(2)

Significant variances in costs or schedule

If a likely cost overrun is greater than 20 percent or a likely delay is greater than 12 months from the costs and schedule specified in the acquisition program baseline for a major acquisition program, the Under Secretary for Management shall include in the notification required in paragraph (1) a written certification, with supporting explanation, that—

(A)

the program is essential to the accomplishment of the mission of the Department;

(B)

there are no alternatives to the capability or asset provided by the program that will provide equal or greater capability in a more cost-effective and timely manner;

(C)

the new acquisition schedule and estimates for total acquisition cost are reasonable; and

(D)

the management structure for the program is adequate to manage and control cost, schedule, and performance.

.

(b)

Clerical amendment

The table of contents in section 1(b) of the Homeland Security Act of 2002 (Public Law 107–296; 116 Stat. 2135) is amended by inserting after the item relating to section 835 the following:

Sec. 836. Congressional notification and other requirements for major acquisition program breach.

.

3.

Report on bid protests

(a)

Definition

In this section, the term Department means the Department of Homeland Security.

(b)

Study and report

Not later than 1 year after the date of enactment of this Act, the Inspector General of the Department shall conduct a study and submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Homeland Security of the House of Representatives a report on the prevalence and impact of bid protests on the acquisition process of the Department, in particular bid protests filed with the Government Accountability Office and the United States Court of Federal Claims.

(c)

Contents

The report required under subsection (b) shall include—

(1)

with respect to contracts with the Department—

(A)

trends in the number of bid protests filed with Federal agencies, the Government Accountability Office, and Federal courts, the effectiveness of each forum for contracts and task or delivery orders, and the rate of those bid protests compared to contract obligations and the number of contracts;

(B)

an analysis of bid protests filed by incumbent contractors, including the rate at which those contractors are awarded bridge contracts or contract extensions over the period during which the bid protest remains unresolved;

(C)

a comparison of the number of bid protests and the outcome of bid protests for—

(i)

awards of contracts compared to awards of task or delivery orders;

(ii)

contracts or orders primarily for products compared to contracts or orders primarily for services;

(iii)

protests filed pre-award to challenge the solicitation compared to those filed post-award;

(iv)

contracts or awards with single protestors compared to multiple protestors; and

(v)

contracts with single awards compared to multiple award contracts;

(D)

a description of trends in the number of bid protests filed as a percentage of contracts and as a percentage of task or delivery orders by the value of the contract or order with respect to—

(i)

contracts valued at more than $300,000,000;

(ii)

contracts valued at not less than $50,000,000 and not more than $300,000,000;

(iii)

contracts valued at not less than $10,000,000 and not more than $50,000,000; and

(iv)

contracts valued at less than $10,000,000;

(E)

an assessment of the cost and schedule impact of successful and unsuccessful bid protests, as well as delineation of litigation costs, filed on major acquisitions with more than $100,000,000 in annual expenditures or $300,000,000 in lifecycle costs;

(F)

an analysis of how often bid protestors are awarded the contract that was the subject of the bid protest;

(G)

a summary of the results of bid protests in which the contracting Federal agencies took unilateral corrective action, including the average time for remedial action to be completed;

(H)

the time it takes Federal agencies to implement corrective actions after a ruling or decision with respect to a bid protest, and the percentage of those corrective actions that are subsequently protested, including the outcome of any subsequent bid protest;

(I)

an analysis of those contracts with respect to which a company files a bid protest and later files a subsequent bid protest;

(J)

an analysis of the time spent at each phase of the procurement process attempting to prevent a bid protest, addressing a bid protest, or taking corrective action in response to a bid protest, including the efficacy of any actions attempted to prevent the occurrence of a protest; and

(K)

with respect to a company bidding on contracts or task or delivery orders, the extent to and manner in which the bid protest process affects or may affect the decision to offer a bid or proposal on single award or multiple award contracts when the company is the incumbent or non-incumbent contractor; and

(2)

any recommendations by the Inspector General of the Department relating to the study conducted under this section.

October 5, 2017

Reported with an amendment