[Senate Report 112-16]
[From the U.S. Government Publishing Office]
Calendar No. 41
112th Congress } { Report
1st Session } SENATE { 112-16
_______________________________________________________________________
INDEPENDENT TASK AND DELIVERY ORDER REVIEW EXTENSION ACT OF 2011
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 498
TO ENSURE OBJECTIVE, INDEPENDENT REVIEW OF TASK AND DELIVERY ORDERS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
May 9, 2011.--Ordered to be printed
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio
JON TESTER, Montana RAND PAUL, Kentucky
MARK BEGICH, Alaska
Michael L. Alexander, Staff Director
Beth M. Grossman, Deputy Staff Director and Chief Counsel
Troy H. Cribb, Senior Counsel
Carly A. Steier, Professional Staff Member
Nicholas A. Rossi, Minority Staff Director
Molly A. Wilkinson, Minority General Counsel
Anne F. Terry, Minority DHS Detailee
Trina Driessnack Tyrer, Chief Clerk
Calendar No. 41
112th Congress } { Report
1st Session } SENATE { 112-16
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INDEPENDENT TASK AND DELIVERY ORDER REVIEW EXTENSION ACT OF 2011
_______
May 9, 2011.--Ordered to be printed
_______
Mr. Lieberman, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 498]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 498) to ensure
objective, independent review of task and delivery orders,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................1
III. Legislative History..............................................4
IV. Section by Section Analysis......................................4
V. Evaluation of Regulatory Impact..................................5
VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............6
I. Purpose and Summary
S. 498, the Independent Task and Delivery Order Review
Extension Act of 2011, extends through September 30, 2016 the
authority of the Government Accountability Office (GAO) to hear
protests of certain task and delivery orders--federal agency
purchases made under umbrella contracts. Specifically, the bill
extends the authority to hear protests of task and delivery
orders in excess of $10 million awarded under Federal civilian
agency contracts.
II. Background and Need for the Legislation
For more than 80 years, GAO has provided an objective,
independent and impartial forum for the resolution of disputes
concerning the award of Federal contracts. Through what is
known as the bid protest process, an interested party may ask
GAO to review whether a contract has been, or is about to be,
awarded improperly or illegally. GAO issues bid protest
decisions not later than 100 days from the date the protest is
filed, providing a quick adjudicative process that ensures that
Federal contracts are awarded fairly and in compliance with
applicable statutes and regulations.\1\
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\1\The bid protest authority is codified at 31 U.S.C.
Sec. Sec. 3551 et seq.
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In 1994, Congress passed the Federal Acquisition
Streamlining Act (FASA) to provide greater flexibilities to
agencies in their purchases of goods and services.\2\ FASA laid
out specific procedures for the use of indefinite-delivery,
indefinite-quantity (IDIQ) contracts, which allow agencies to
negotiate contracts with broad statements of work and then
procure goods and services through specific task and delivery
orders as needs arise. FASA, though, limited GAO's jurisdiction
over protests of task and delivery orders to cases in which the
protest alleged that the order increased the scope, period or
maximum value of the contract under which the order was
issued.\3\ Prior to FASA, GAO heard protests concerning task
and delivery orders that were competed among multiple vendors
holding contracts, regardless of value.\4\
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\2\Pub. L. No. 103-355.
\3\Section 1004 of FASA prescribed procedures for task and delivery
order contracts of the Department of Defense; section 1054 prescribed
those procedures for civilian agency contracts.
\4\E.g., GAO docket numbers B-254428, B-227340. In contrast, GAO
viewed a protest concerning the issuance of a task or delivery order
under a single, stand-alone contract to be generally a matter of
contract administration, unless the protester was contending that the
task order was beyond the scope of the underlying contract, thus
changing the nature of the original contract. E.g., GAO docket number
B-262800.
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In 2003, Congress created the Acquisition Advisory Panel
(``Panel'') to review laws, regulations, and government-wide
acquisition policies, and to make appropriate recommendations
to improve, among other things, the effective, efficient and
fair award of Federal contracts.\5\ The Panel issued its report
in 2007.\6\ In the area of competition, the Panel found that
IDIQ contracts provide significant benefits to the government,
including reduced administrative costs for fulfilling recurring
service needs. However, the Panel also found that agencies
frequently use task and delivery orders to make significant
purchases of complex services, and that the ordering process
under task and delivery order contracts sometimes occurs
without rigorous acquisition planning, adequate source
selection, and meaningful competition. The Panel also heard
evidence from GAO, Inspectors General and others concerning the
improper use of IDIQ contracts.
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\5\The Panel was authorized by Section 1423 of the Services
Acquisition Reform Act of 2003, which was enacted as section 1423 of
the National Defense Authorization Act for Fiscal Year 2004, Pub. L.
No. 108-136.
\6\Report of the Acquisition Advisory Panel to the Office of
Federal Procurement Policy and the United States Congress (January
2007) (``Report of the Panel'').
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The Panel recommended that Congress expand GAO's
jurisdiction to hear protests of task and delivery orders
beyond those related to scope, period and maximum value.
Specifically, the Panel wanted GAO to have authority to
consider whether agencies followed applicable statutes and
regulations, including relevant competition requirements, when
awarding task and delivery orders over $5 million.\7\
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\7\Report of the Panel, pp. 9-11, 36.
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The Committee agreed with the Panel's assessment and
recommendation and approved, as part of a larger acquisition
reform bill, a provision authorizing the protest of task and
delivery orders under both Department of Defense and civilian
agency contracts.\8\ This provision, in amended form, was then
enacted into law as part of the National Defense Authorization
Act for Fiscal Year 2008.\9\ The authorization limited protests
to task and delivery orders exceeding $10 million and included
a three-year sunset, in order to allow Congress the opportunity
to assess the impact of the protests on Federal procurement
system before deciding whether to extend, or let expire, the
authority.
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\8\Section 203 of S. 680, 110th Congress, 1st Session, passed by
the Senate on November 7, 2007. S. 680 set an initial threshold of $5
million for the protest of task and delivery orders but also would have
provided the Administrator for the Office of Federal Procurement
Policy, upon finding that the threshold was unduly burdensome, the
discretion to increase the threshold to an amount no higher than $25
million.
\9\Section 843, National Defense Authorization Act for Fiscal Year
2008, Pub. L. No. 110-181.
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After reviewing the implementation of these provisions over
the past three years, the Committee has concluded that Congress
should reauthorize GAO's expanded jurisdiction for another five
years. An increasing amount of taxpayer money has gone to fund
task and delivery orders. Such orders now commonly exceed $100
million; indeed, GAO recently received protests of three task
orders that each passed the $1 billion mark.\10\ Review of
large task and delivery orders by GAO provides important
oversight and discipline against abuse or other inappropriate
use of IDIQ contracts, and the ability of interested parties to
protest task and delivery orders promotes transparency,
accountability, and competition in the expenditure of tax
dollars through contracts.
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\10\GAO docket numbers B-404263.6 (regarding a $2.6 billion task
order awarded by the General Services Administration (GSA) for
information technology support to the Department of Homeland Security
for the St. Elizabeths campus); B-404671 (regarding a $1 billion task
order awarded by the Department of the Army for the training of the
Afghan National Police); and B-404682 (regarding a $2.5 billion task
order awarded by the Department of State under GSA's Alliant contract
for consolidation of the Department's information technology systems).
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In considering the reauthorization of task and delivery
order protests, the Committee has been sensitive to concerns
that protests slow the procurement process, and can thereby
burden agencies, contractors and taxpayers. The Committee must
weigh this concern, however, against the benefits yielded by a
process that ensures greater transparency, integrity and
discipline in government contracting, and enforces the
statutory requirements for competition.
Just as importantly, data provided to the Committee by GAO
show that GAO's expanded jurisdiction has not brought with it
an unwieldy increase in protests. In Fiscal Year 2009, GAO
reviewed 38 civilian agency task order protests, and in Fiscal
Year 2010, it heard 65, representing challenges to far less
than even one-tenth of one percent of all task and delivery
orders awarded under civilian agency contracts. Moreover, even
with GAO's expanded jurisdiction to hear protests of task and
delivery orders, the total number of protests filed at GAO in
Fiscal Years 2009 and 2010, while higher than recent years,
remains well below the number filed annually in the late 1980's
and early 1990's. This is true despite the substantial increase
in dollars expended by the U.S. government on contracts over
the past decade, from $222 billion in Fiscal Year 2001 to $536
billion in Fiscal Year 2010.
In considering GAO's experience with protests of task and
delivery orders thus far, the Committee concludes that
extension of the authority is in the best interest of the U.S.
government, contractors, and taxpayers. Section 825 of the Ike
Skelton National Defense Authorization Act for Fiscal Year
2011,\11\ signed into law on January 7, 2011, has already
extended the task and delivery order protest authority for
Department of Defense contracts through September 30, 2016. S.
498 will align the authority for civilian contracts to the
authority for defense contracts. The new sunset date will again
provide Congress the opportunity to assess the effectiveness of
the protest authority in five years.
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\11\Pub. L. No. 111-383.
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III. Legislative History
On March 7, 2011, Senators Lieberman, Collins, McCaskill
and Portman introduced S. 498, which was referred to the Senate
Committee on Homeland Security and Governmental Affairs. The
Committee considered the bill on April 13, 2011. The Committee
adopted by voice vote an amendment offered by Senator Collins
and then ordered the bill favorably reported, also by voice
vote. Members present for both votes were Chairman Lieberman
and Senators Levin, Akaka, Carper, Begich, Collins, Coburn,
McCain, and Johnson.
The amendment offered by Senator Collins makes clear that
the bill does not authorize appropriations for the specific
purpose of processing protests of task and delivery orders, and
that such protests shall be processed using existing resources
of GAO and Federal agencies. The Committee finds that GAO and
agencies have been able to absorb the costs of processing and
responding to task and delivery order protests into their
existing budgets, and therefore specific authorization and
appropriation of funds for this activity are unnecessary.
IV. Section-by-Section Summary of the Bill
Section 1. Short title
The short title of the bill is the ``Independent Task and
Delivery Order Review Extension Act of 2011.''
Section 2. Extension of sunset date for certain protests of task and
delivery order contracts
This section extends the jurisdiction of GAO to hear
protests of civilian task and delivery order contracts in
excess of $10 million through September 30, 2016, allowing
interested parties to seek GAO's review of whether a task order
was awarded in accordance with applicable laws and regulations.
The extension of jurisdictional authority also allows protests
of task and delivery orders of any amount on the ground that
the order increases the scope, period, or maximum value of the
contract under which the order was issued.
Section 3. Use of existing resources to process task and delivery order
protests
This section states that no amounts are authorized to be
appropriated for the specific purpose of processing protests of
task and delivery orders and that all such protests shall be
processed using the existing resources of the Government
Accountability Office and executive agencies.
V. Regulatory Impact and Evaluation
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of the bill. The Congressional
Budget Office states that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandate Reform Act and would not affect the budgets of
State, local, or tribal governments. The enactment of this
legislation will not have significant regulatory impact.
VI. Congressional Budget Office Cost Estimate
April 19, 2011.
Hon. Joseph I. Lieberman,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 498, the Independent
Task and Delivery Order Review Extension Act of 2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
S. 498--Independent Task and Delivery Order Review Extension Act of
2011
S. 498 would amend federal law to extend the process for
protesting the awards of certain civilian agency procurements.
Under the legislation, contractors could protest certain task
and delivery order contracts through September 30, 2016. In
addition, the legislation would provide that no funds are
authorized to be appropriated for processing protests made
under the bill.
Task and delivery order contracts authorize deliveries
during the life of the contract without specifying a firm
quantity of supplies or services. Such contracts are often used
when an agency cannot determine the precise number of supplies
or services that will be required. Under current law,
contractors under such orders can protest the award of any
order valued over $10 million, and the Government
Accountability Office (GAO) has exclusive jurisdiction to hear
those protests through May 2011. S. 498 would extend those
procedures through September 2016.
Information from GAO and several civilian agencies
indicates that more than 100 cases have been filed to protest
contract awards during the past two years; 50 percent of the
protestors have reported obtaining some form of relief from the
procuring agency. The form of relief can vary from improvements
in the procurement process to reimbursement of the protestors'
costs. Based on that information, CBO expects that complying
with the bill would increase the administrative expenses of
federal agencies for contract personnel, lawyers, and general
administrative overhead. Such expenses would generally be paid
from agencies' salaries and expense budgets, which are subject
to annual appropriation. CBO estimates that such costs would
total a few million dollars over the 2011-2016 period.
Enacting S. 498 also could affect direct spending by
agencies not funded through annual appropriations, such as the
Tennessee Valley Authority and the Bonneville Power
Administration; therefore, pay-as-you-go procedures apply. CBO
estimates, however, that any net increase in spending by those
agencies would not be significant. Enacting S. 498 would not
affect revenues.
S. 498 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
On March 16, 2011, CBO transmitted a cost estimate for H.R.
899, a bill to amend title 41, United States Code, to extend
the sunset date for certain protests of task and delivery order
contracts. The two pieces of legislation are similar, and CBO's
estimate of their costs is the same.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by Peter H. Fontaine,
Assistant Director for Budget Analysis.
VII. Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the following changes in existing
law made by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman).
Title 41.
SECTION 4106.
* * * * * * *
(f) Protests.--
(1) Protest not authorized.--A protest is not
authorized in connection with the issuance or proposed
issuance of a task or delivery order except for--
(A) a protest on the ground that the order
increases the scope, period, or maximum value
of the contract under which the order is
issued; or
(B) a protest of an order valued in excess of
$10,000,000.
(2) Jurisdiction over protests.--Notwithstanding
section 3556 of title 31, the Comptroller General shall
have exclusive jurisdiction of a protest authorized
under (1)(B).
(3) Effective period.--[This subsection shall be in
effect for three years, beginning on the date that is
120 days after January 28, 2008] Paragraph (1)(B) and
paragraph (2) of this subsection shall not be in effect
after September 30, 2016.