[Senate Report 115-232]
[From the U.S. Government Publishing Office]
Calendar No. 383
115th Congress} { Report
SENATE
2d Session } { 115-232
======================================================================
BRIDGE CONTRACT TRANSPARENCY AND ACCOUNTABILITY ACT OF 2018
__________
R E P O R T
OF THE
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 2413
TO PROVIDE FOR THE APPROPRIATE USE OF BRIDGE CONTRACTS
IN FEDERAL PROCUREMENT, AND FOR OTHER PURPOSES
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
April 18, 2018.--Ordered to be printed
__________
U.S. GOVERNMENT PUBLISHING OFFICE
WASHINGTON : 2018
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming MAGGIE HASSAN, New Hampshire
JOHN HOEVEN, North Dakota KAMALA D. HARRIS, California
STEVE DAINES, Montana DOUG JONES, Alabama
Christopher R. Hixon, Staff Director
Gabrielle D'Adamo Singer, Chief Counsel
Elliott A. Walden, Counsel
Margaret E. Daum, Minority Staff Director
Stacia M. Cardille, Minority Chief Counsel
Charles A. Moskowitz, Minority Senior Legislative Counsel
Thomas J.R. Richards, Minority Professional Staff Member
Laura W. Kilbride, Chief Clerk
Calendar No. 383
115th Congress} { Report
SENATE
2d Session } { 115-232
======================================================================
BRIDGE CONTRACT TRANSPARENCY AND ACCOUNTABILITY ACT OF 2018
_______
April 18, 2018.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 2413]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 2413) to provide
for the appropriate use of bridge contracts in Federal
procurement, and for other purposes, reports favorably thereon
with amendments and recommends that the bill, as amended, do
pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................3
IV. Section-by-Section Analysis......................................3
V. Evaluation of Regulatory Impact..................................4
VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............6
I. PURPOSE AND SUMMARY
S. 2413, the Bridge Contract Transparency and
Accountability Act of 2018, increases oversight of the use of
bridge contracts by requiring the Administrator of the Office
of Federal Procurement Policy (OFPP) to submit a series of
reports to Congress on the policies, practices, and uses of
bridge contracts across the Federal Government. Additionally,
the bill directs the Federal Acquisition Regulatory Council
(FARC) to amend the Federal Acquisition Regulation (FAR) to
include a common definition for ``bridge contracts,'' and
directs agencies to develop policies and procedures to minimize
the need for bridge contracts.
II. BACKGROUND AND THE NEED FOR LEGISLATION
Bridge contracts are executed to prevent gaps in service
when an existing contract is near expiration but there is still
a need for the goods or services being rendered and the follow-
on contract is not ready to be awarded.\1\ Despite their
usefulness in some situations, bridge contracts are not defined
in the FAR.
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\1\U.S. Gov't Accountability Office, GAO-16-15, Sole Source
Contracting: Defining and Tracking Bridge Contracts Would Help Agencies
Manage Their Use (Oct. 2015), https://www.gao.gov/assets/680/673110.pdf
[hereinafter GAO-16-15].
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Bridge contracts have come under increasing scrutiny in
recent years. The National Defense Authorization Act for Fiscal
Year 2018 (NDAA FY2018) included provisions to encourage
agencies to avoid the use of bridge contracts and to increase
oversight when situations arise requiring their use.\2\
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\2\See NDAA FY2018, Pub. L. No. 115-91, Sec. 851, Improvement of
Planning for Acquisition of Services [hereinafter NDAA FY2018].
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In 2015, Committee Chairman Ron Johnson and now-Ranking
Member Claire McCaskill asked the Government Accountability
Office (GAO) to study the use of bridge contracts by Federal
agencies.\3\ The resulting report found that, when used too
frequently, bridge contracts reduce competition and can result
in the Government paying more than it should for needed
services and supplies.\4\
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\3\Letter from Senators Johnson & McCaskill to the Hon. Gene L.
Dodaro, Comptroller General, U.S. Gov't Accountability (Apr. 14, 2015)
(on file with Committee staff).
\4\GAO-16-15, supra note 1, at 27-8.
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Because no formal definition for ``bridge contracts''
exists in the FAR, GAO defined bridge contracts as ``an
extension to an existing contract beyond the period of
performance (including option years), or a new, short-term
contract awarded on a sole-source basis to an incumbent
contractor to avoid a lapse in service caused by a delay in
awarding a follow-on contract.''\5\ This definition is similar
to the one subsequently adopted in the NDAA FY18.\6\
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\5\Id. at 4.
\6\NDAA FY2018 defines ``bridge contract'' as ``(A) an extension to
an existing contract beyond the period of performance to avoid a lapse
in service caused by a delay in awarding a subsequent contract; or (B)
a new short-term contract awarded on a sole source basis to avoid a
lapse in service caused by a delay in awarding a subsequent contract.''
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The GAO report also found the lack of a formal definition
and guidance for bridge contracts in the FAR contributed to
agencies having limited or no insight into their use of bridge
contracts.\7\ GAO noted that, ``without a definition for bridge
contracts, and strategies for tracking and managing their use,
agencies are not able to fully identify and monitor the risks
related to these contracts, and therefore may be missing
opportunities to increase competition.''\8\ GAO also found the
lack of a formal definition may be a contributing factor to
explain why some of the bridge contracts they reviewed varied
greatly in duration.\9\ For example, despite bridge contracts
being intended as ``short-term'' fixes, 6 of the 29 bridge
contracts GAO studied in-depth were three years or more in
duration.\10\
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\7\GAO-16-15, supra note 1, at 6.
\8\Id. at 10.
\9\Id. at Highlights; pp. 10-16.
\10\Id.
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When a contract is awarded outside of the competitive
process, such as when an incumbent contractor is granted a
sole-source contract, heightened oversight is necessary to
ensure the Government is getting the best value. This bill will
implement GAO's recommendation that the OFPP amend the FAR to
provide for a standardized definition of ``bridge contracts.''
The bill also increases oversight of the bridge contract award
process by requiring the heads of executive agencies to report
to the OFPP annually until 2025 on their agencies' use of
bridge contracts, and provide public notice within 30 days of
entering into a bridge contract to increase transparency on the
frequency and use of bridge contracts. The OFPP is required to
summarize the executive agency reports into a singular report
on the Government-wide use of bridge contracts, which is to be
submitted annually to Congress until 2025. Finally, the bill
directs executive agencies to implement policies that will
minimize the use of bridge contracts.
III. LEGISLATIVE HISTORY
Ranking Member Claire McCaskill (D-MO) introduced S. 2413,
the Bridge Contract Transparency and Accountability Act of
2018, on February 8, 2018. The bill was referred to the
Committee on Homeland Security and Governmental Affairs.
Chairman Ron Johnson (R-WI) joined as a cosponsor on February
13, 2018.
The Committee considered S. 2413 at a business meeting on
February 14, 2018. During the business meeting, an amendment
was offered by Ranking Member McCaskill and Chairman Johnson to
modify elements of the annual reporting requirement on the use
of bridge contracts. The amendment modifies the reporting
requirement to consider only the number of bridge contracts
entered into in the previous fiscal year and clarifies that the
annual reporting requirement should provide a description of
the number of bridge contracts that were entered into as a
result of a bid protest. Both the amendment and the
legislation, as amended, were ordered reported favorably by
voice vote en bloc with Senators Johnson, Portman, Paul,
Lankford, Enzi, Hoeven, Daines, McCaskill, Heitkamp, Peters,
Hassan, Harris, and Jones being present.
IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED
Section 1. Short title
This section provides that the bill may be cited as the
``Bridge Contract Transparency and Accountability Act of
2018.''
Sec. 2. Revisions to Federal procurement regulations
Subsection (a) requires the OFPP Administrator to submit a
report, no later than 180 days after enactment, to Congress on
the current Government-wide polices, practices, and uses of
bridge contracts.
Subsection (b) directs the FARC to amend the FAR to add a
common definition of ``bridge contracts.'' Subsection (b) also
directs the OFPP Administrator to issue guidance on the use of
bridge contracts to agencies.
Sec. 3. Agency transparency and reports
Subsection (a) directs the OFPP Administrator to issue
guidance, which includes an interim definition of bridge
contracts to use until the FAR is amended, to executive
agencies to use in their collection of information on their use
of bridge contracts.
Subsection (b) details the report that each executive
agency is required to submit annually until 2025 on their use
of bridge contracts to the OFPP Administrator. These reports
are required to provide information such as, but not limited
to, the common definition for bridge contracts used by that
executive agency, how many bridge contracts were entered into
during the previous fiscal year, an explanation as to why each
bridge contract was entered into, the cost of each bridge
contract, and the number of bridge contracts entered into
because of a bid protest. Each executive agency must make this
report publicly available on their website. On a quarterly
basis, each executive agency will submit a list of bridge
contracts issued during the prior quarter to the OFPP, which
the Administrator will compile into a single report and send to
Congress.
Subsection (c) directs the OFPP Administrator to submit an
annual report to Congress until 2025 on the use of bridge
contracts by executive agencies, including any legislative
recommendations to enhance oversight of bridge contracts.
Subsection (d) requires executive agencies to provide
public notice within 30 days of entering into a bridge
contract.
Sec. 4. Agency policies
Subsection (a) directs executive agencies to adopt policies
designed to minimize the use of bridge contracts.
Subsection (b) outlines elements that executive agencies
must include in their bridge contract policies, including that
the Chief Acquisition Officer must approve any bridge contract
that lasts longer than six months, and the head of the
executive agency must approve any bridge contract that lasts
longer than one year. Subsection (b) also carves out exceptions
to said policies for service contracts necessary for
contingency operations, humanitarian assistance, disaster
relief, national security emergencies, and pursuant to
international agreements.
Sec. 5. Definitions
This section defines ``appropriate congressional
committees'' and ``executive agency.'' ``Appropriate
congressional committees'' are the Senate Homeland Security and
Governmental Affairs Committee, the Senate Appropriations
Committee, the House Oversight and Government Reform Committee,
and the House Appropriations Committee. ``Executive agency''
has the same definition as found in 41 U.S.C. Sec. 133.
V. EVALUATION OF REGULATORY IMPACT
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 this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 5, 2018.
Hon. Ron Johnson,
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. 2413, the Bridge
Contract Transparency and Accountability Act of 2018.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall,
Director.
Enclosure.
S. 2413--Bridge Contract Transparency and Accountability Act of 2018
S. 2413 would require federal agencies to report annually
to the Congress on their use of bridge contracts to acquire
goods and services. Bridge contracts are generally considered
noncompetitive extensions between the end contract of a
contract and the competitive award of a follow-on agreement.
Specifically, the bill would direct the Office of Federal
Procurement Policy (OFPP) to report on governmentwide policies,
and practices for the use of bridge contracts. In addition, the
bill would require the Federal Acquisition Regulatory Council
to provide guidance to agencies on when to use bridge
contracts.
CBO is unaware of a standard definition of bridge contracts
or any comprehensive information on the use of such contracts.
In fiscal year 2017, the government acquired almost $400
billion in services and supplies through contracts, including
bridge contracts. The Government Accountability Office (GAO)
has reported that using noncompetitive contracts for extended
periods could result in greater costs to the government.
Considering the cost of similar governmentwide reporting
requirements and recent GAO reports on such contracts, CBO
estimates that implementing the bill would cost $7 million over
the 2018-2022 period to collect information and prepare reports
on the contracts. In general, CBO expects costs at each of the
26 major agencies would total about $65,000 per year for two
years or approximately $2 million annually in total. In
subsequent years costs would decline as the reporting process
became standardized.
Enacting S. 2413 could affect direct spending by some
agencies because they are authorized to use receipts from the
sale of goods, fees, and other collections to cover operating
costs. Therefore, pay-as-you-go procedures apply. Because most
of those agencies can make adjustments to the amounts collected
as operating costs change, CBO estimates that any net changes
in direct spending by those agencies would be negligible.
Enacting S. 2413 would not affect revenues.
CBO estimates that enacting S. 2413 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
S. 2413 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
Because this legislation would not repeal or amend any
provision of current law, it would make no changes in existing
law within the meaning of clauses (a) and (b) of paragraph 12
of rule XXVI of the Standing Rules of the Senate.
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