[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1526 Reported in Senate (RS)]
<DOC>
Calendar No. 656
114th CONGRESS
2d Session
S. 1526
[Report No. 114-366]
To amend title 10 and title 41, United States Code, to improve the
manner in which Federal contracts for construction and design services
are awarded, to prohibit the use of reverse auctions for design and
construction services procurements, to amend title 31 and title 41,
United States Code, to improve the payment protections available to
construction contractors, subcontractors, and suppliers for work
performed, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 8, 2015
Mr. Portman (for himself, Ms. Hirono, Ms. Ayotte, and Mrs. Shaheen)
introduced the following bill; which was read twice and referred to the
Committee on Homeland Security and Governmental Affairs
October 27, 2016
Reported under authority of the order of the Senate of September 29,
2016, by Mr. Johnson, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To amend title 10 and title 41, United States Code, to improve the
manner in which Federal contracts for construction and design services
are awarded, to prohibit the use of reverse auctions for design and
construction services procurements, to amend title 31 and title 41,
United States Code, to improve the payment protections available to
construction contractors, subcontractors, and suppliers for work
performed, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE; TABLE OF CONTENTS.</DELETED>
<DELETED> (a) Short Title.--This Act may be cited as the
``Construction Consensus Procurement Improvement Act of
2015''.</DELETED>
<DELETED> (b) Table of Contents.--The table of contents for this Act
is as follows:</DELETED>
<DELETED>Sec. 1. Short title; table of contents.
<DELETED>Sec. 2. Congressional findings.
<DELETED>Sec. 3. Design-build construction process improvement.
<DELETED>Sec. 4. Prohibition on the use of a reverse auction for the
award of a contract for design and
construction services.
<DELETED>Sec. 5. Assuring payment protections for construction
subcontractors and suppliers under an
alternative to a Miller Act payment bond.
<DELETED>Sec. 6. SBA surety bond guarantee program.
<DELETED>SEC. 2. CONGRESSIONAL FINDINGS.</DELETED>
<DELETED> Congress makes the following findings:</DELETED>
<DELETED> (1) The acquisition procedures that are often used
effectively to procure products and other forms of services are
not always appropriate for procurement of design and
construction services.</DELETED>
<DELETED> (2) Federal procurement officials often adopt
contracting techniques from the private sector and have used
those techniques effectively to procure products and
services.</DELETED>
<DELETED> (3) Design-build is a procurement technique
Federal officials have adopted from the private sector that has
worked well for procurement of design and construction
services.</DELETED>
<DELETED> (4) The current statutory framework for design-
build could benefit from legislative refinement.</DELETED>
<DELETED> (5) Reverse auctions are another procurement
technique Federal officials have adopted from the private
sector and used successfully to award contracts for the
purchase of products that are commercially equivalent to
commodities.</DELETED>
<DELETED> (6) Despite their success in other contexts,
reverse auctions are generally inappropriate for procurement of
design and construction services, given the unique nature of
each such project.</DELETED>
<DELETED> (7) To ensure payment protection for contractors,
subcontractors, and suppliers working on Federal construction
projects, bonds backed by individual sureties must be placed in
the care and custody of the Federal Government and be supported
by assets that are real, sufficient, verifiable, and readily
convertible into cash.</DELETED>
<DELETED>SEC. 3. DESIGN-BUILD CONSTRUCTION PROCESS
IMPROVEMENT.</DELETED>
<DELETED> (a) Civilian Contracts.--</DELETED>
<DELETED> (1) In general.--Section 3309 of title 41, United
States Code, is amended--</DELETED>
<DELETED> (A) by amending subsection (b) to read as
follows:</DELETED>
<DELETED> ``(b) Criteria for Use.--</DELETED>
<DELETED> ``(1) Contracts with a value of at least
$750,000.--Two-phase selection procedures shall be used for
entering into a contract for the design and construction of a
public building, facility, or work when a contracting officer
determines that the contract has a value of $750,000 or
greater, as adjusted for inflation in accordance with section
1908 of this title.</DELETED>
<DELETED> ``(2) Contracts with a value less than $750,000.--
For projects that a contracting officer determines have a value
of less than $750,000, the contracting officer shall make a
determination whether two-phase selection procedures are
appropriate for use for entering into a contract for the design
and construction of a public building, facility, or work when--
</DELETED>
<DELETED> ``(A) the contracting officer anticipates
that 3 or more offers will be received for the
contract;</DELETED>
<DELETED> ``(B) design work must be performed before
an offeror can develop a price or cost proposal for the
contract;</DELETED>
<DELETED> ``(C) the offeror will incur a substantial
amount of expense in preparing the offer; and</DELETED>
<DELETED> ``(D) the contracting officer has
considered information such as--</DELETED>
<DELETED> ``(i) the extent to which the
project requirements have been adequately
defined;</DELETED>
<DELETED> ``(ii) the time constraints for
delivery of the project;</DELETED>
<DELETED> ``(iii) the capability and
experience of potential contractors;</DELETED>
<DELETED> ``(iv) the suitability of the
project for use of the two-phase selection
procedures;</DELETED>
<DELETED> ``(v) the capability of the agency
to manage the two-phase selection process;
and</DELETED>
<DELETED> ``(vi) other criteria established
by the agency.''; and</DELETED>
<DELETED> (B) in subsection (d), by striking ``The
maximum number specified in the solicitation shall not
exceed 5 unless the agency determines with respect to''
and all that follows through the period at the end and
inserting the following: ``The maximum number specified
in the solicitation shall not exceed 5 unless the head
of the contracting activity, delegable to a level no
lower than the senior contracting official within the
contracting activity, approves the contracting
officer's justification that an individual solicitation
must have greater than 5 finalists to be in the Federal
Government's interest. The contracting officer shall
provide written documentation of how a maximum number
of offerors exceeding 5 is consistent with the purposes
and objectives of the two-phase selection
process.''.</DELETED>
<DELETED> (2) Annual reports.--</DELETED>
<DELETED> (A) In general.--Not later than November
30 of 2016, 2017, 2018, 2019, and 2020, the head of
each agency shall compile an annual report of each
instance in which the agency awarded a design-build
contract pursuant to section 3309 of title 41, United
States Code, during the fiscal year ending in such
calendar year, in which--</DELETED>
<DELETED> (i) more than 5 finalists were
selected for phase-two requests for proposals;
or</DELETED>
<DELETED> (ii) the contract was awarded
without using two-phase selection
procedures.</DELETED>
<DELETED> (B) Public availability.--The Director of
the Office of Management and Budget shall facilitate
public access to the reports, including by posting them
on a publicly available Internet website. A notice of
the availability of each report shall be published in
the Federal Register.</DELETED>
<DELETED> (b) Defense Contracts.--</DELETED>
<DELETED> (1) In general.--Section 2305a of title 10, United
States Code, is amended--</DELETED>
<DELETED> (A) by amending subsection (b) to read as
follows:</DELETED>
<DELETED> ``(b) Criteria for Use.--</DELETED>
<DELETED> ``(1) Contracts with a value of at least
$750,000.--Two-phase selection procedures shall be used for
entering into a contract for the design and construction of a
public building, facility, or work when a contracting officer
determines that the contract has a value of $750,000 or
greater, as adjusted for inflation in accordance with section
1908 of title 41, United States Code.</DELETED>
<DELETED> ``(2) Contracts with a value less than $750,000.--
For projects that a contracting officer determines have a value
of less than $750,000, the contracting officer shall make a
determination whether two-phase selection procedures are
appropriate for use for entering into a contract for the design
and construction of a public building, facility, or work when--
</DELETED>
<DELETED> ``(A) the contracting officer anticipates
that 3 or more offers will be received for the
contract;</DELETED>
<DELETED> ``(B) design work must be performed before
an offeror can develop a price or cost proposal for the
contract;</DELETED>
<DELETED> ``(C) the offeror will incur a substantial
amount of expense in preparing the offer; and</DELETED>
<DELETED> ``(D) the contracting officer has
considered information such as--</DELETED>
<DELETED> ``(i) the extent to which the
project requirements have been adequately
defined;</DELETED>
<DELETED> ``(ii) the time constraints for
delivery of the project;</DELETED>
<DELETED> ``(iii) the capability and
experience of potential contractors;</DELETED>
<DELETED> ``(iv) the suitability of the
project for use of the two-phase selection
procedures;</DELETED>
<DELETED> ``(v) the capability of the agency
to manage the two-phase selection process;
and</DELETED>
<DELETED> ``(vi) other criteria established
by the Department of Defense.''; and</DELETED>
<DELETED> (B) in subsection (d), by striking ``The
maximum number specified in the solicitation shall not
exceed 5 unless the agency determines with respect to''
and all that follows through the period at the end and
inserting the following: ``The maximum number specified
in the solicitation shall not exceed 5 unless the head
of the contracting activity approves the contracting
officer's justification that an individual solicitation
must have greater than 5 finalists to be in the Federal
Government's interest. The contracting officer shall
provide written documentation of how a maximum number
of offerors exceeding 5 is consistent with the purposes
and objectives of the two-phase selection
process.''.</DELETED>
<DELETED> (2) Annual reports.--</DELETED>
<DELETED> (A) In general.--Not later than November
30 of 2016, 2017, 2018, 2019, and 2020, the Secretary
of Defense shall compile an annual report of each
instance in which the Department awarded a design-build
contract pursuant to section 2305a of title 10, United
States Code, during the fiscal year ending in such
calendar year, in which--</DELETED>
<DELETED> (i) more than 5 finalists were
selected for phase-two requests for proposals;
or</DELETED>
<DELETED> (ii) the contract was awarded
without using two-phase selection
procedures.</DELETED>
<DELETED> (B) Public availability.--The Director of
the Office of Management and Budget shall facilitate
public access to the reports, including by posting them
on a publicly available Internet website. A notice of
the availability of each report shall be published in
the Federal Register.</DELETED>
<DELETED> (c) GAO Reports.--</DELETED>
<DELETED> (1) Civilian contracts.--Not later than 270 days
after the deadline for the final reports required under
subsection (f) of section 3309 of title 41, United States Code,
as added by subsection (a)(1), the Comptroller General of the
United States shall issue a report analyzing the compliance of
the various Federal agencies with the requirements of such
section.</DELETED>
<DELETED> (2) Defense contracts.--Not later than 270 days
after the deadline for the final reports required under
subsection (f) of section 2305a of title 10, United States
Code, as added by subsection (b)(1), the Comptroller General of
the United States shall issue a report analyzing the compliance
of the Department of Defense with the requirements of such
section.</DELETED>
<DELETED>SEC. 4. PROHIBITION ON THE USE OF A REVERSE AUCTION FOR THE
AWARD OF A CONTRACT FOR DESIGN AND CONSTRUCTION
SERVICES.</DELETED>
<DELETED> (a) Prohibition.--Not later than 180 days after the date
of the enactment of this Act, the Federal Acquisition Regulatory
Council, in consultation with the Administrator for Federal Procurement
Policy, shall amend the Federal Acquisition Regulation to prohibit the
use of reverse auctions for awarding contracts for construction and
design services.</DELETED>
<DELETED> (b) Definitions.--For purposes of this section--</DELETED>
<DELETED> (1) the term ``design and construction services''
means--</DELETED>
<DELETED> (A) site planning and landscape
design;</DELETED>
<DELETED> (B) architectural and engineering services
(including surveying and mapping defined in section
1101 of title 40, United States Code);</DELETED>
<DELETED> (C) interior design;</DELETED>
<DELETED> (D) performance of construction work for
facility, infrastructure, and environmental restoration
projects;</DELETED>
<DELETED> (E) delivery and supply of construction
materials to construction sites; and</DELETED>
<DELETED> (F) construction or substantial alteration
or repair of public buildings or public works;
and</DELETED>
<DELETED> (2) the term ``reverse auction'' means, with
respect to procurement by an agency--</DELETED>
<DELETED> (A) a real-time auction conducted through
an electronic medium between a group of offerors who
compete against each other by submitting bids for a
contract or task order with the ability to submit
revised bids throughout the course of the auction;
and</DELETED>
<DELETED> (B) the award of the contract or task
order to the offeror who submits the lowest
bid.</DELETED>
<DELETED>SEC. 5. ASSURING PAYMENT PROTECTIONS FOR CONSTRUCTION
SUBCONTRACTORS AND SUPPLIERS UNDER AN ALTERNATIVE TO A
MILLER ACT PAYMENT BOND.</DELETED>
<DELETED> Chapter 93 of subtitle VI of title 31, United States Code,
is amended--</DELETED>
<DELETED> (1) by adding at the end the following new
section:</DELETED>
<DELETED>``Sec. 9310. Individual sureties</DELETED>
<DELETED> ``If another applicable law or regulation permits the
acceptance of a bond from a surety that is not subject to sections 9305
and 9306 and is based on a pledge of assets by the surety, the assets
pledged by such surety shall--</DELETED>
<DELETED> ``(1) consist of eligible obligations described
under section 9303(a); and</DELETED>
<DELETED> ``(2) be submitted to the official of the
Government required to approve or accept the bond, who shall
deposit the assets with a depository described under section
9303(b).''; and</DELETED>
<DELETED> (2) in the table of sections for such chapter, by
adding at the end the following new item:</DELETED>
<DELETED>``9310. Individual sureties.''.
<DELETED>SEC. 6. SBA SURETY BOND GUARANTEE PROGRAM.</DELETED>
<DELETED> Section 411(c)(1) of the Small Business Investment Act of
1958 (15 U.S.C. 694b(c)(1)) is amended by striking ``70'' and inserting
``90''.</DELETED>
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Construction
Consensus Procurement Improvement Act of 2015''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Congressional findings.
Sec. 3. Design-build construction process improvement.
Sec. 4. Prohibition on the use of a reverse auction for the award of a
contract for design and construction
services.
SEC. 2. CONGRESSIONAL FINDINGS.
Congress makes the following findings:
(1) The acquisition procedures that are often used
effectively to procure products and other forms of services are
not always appropriate for procurement of design and
construction services.
(2) Federal procurement officials often adopt contracting
techniques from the private sector and have used those
techniques effectively to procure products and services.
(3) Design-build is a procurement technique Federal
officials have adopted from the private sector that has worked
well for procurement of design and construction services.
(4) The current statutory framework for design-build could
benefit from legislative refinement.
(5) Reverse auctions are another procurement technique
Federal officials have adopted from the private sector and used
successfully to award contracts for the purchase of products
that are commercially equivalent to commodities.
(6) Despite their success in other contexts, reverse
auctions are generally inappropriate for procurement of design
and construction services, given the unique nature of each such
project.
SEC. 3. DESIGN-BUILD CONSTRUCTION PROCESS IMPROVEMENT.
(a) Civilian Contracts.--
(1) In general.--Section 3309(b) of title 41, United States
Code, is amended to read as follows:
``(b) Criteria for Use.--
``(1) Contracts with a value of at least $750,000.--Two-
phase selection procedures shall be used for entering into a
contract for the design and construction of a public building,
facility, or work when a contracting officer determines that
the project has a value of $750,000 or greater, as adjusted for
inflation in accordance with section 1908 of this title.
``(2) Contracts with a value less than $750,000.--For
projects that a contracting officer determines have a value of
less than $750,000, the contracting officer shall make a
determination whether two-phase selection procedures are
appropriate for use for entering into a contract for the design
and construction of a public building, facility, or work when--
``(A) the contracting officer anticipates that 3 or
more offers will be received for the contract;
``(B) design work must be performed before an
offeror can develop a price or cost proposal for the
contract;
``(C) the offeror will incur a substantial amount
of expense in preparing the offer; and
``(D) the contracting officer has considered
information such as--
``(i) the extent to which the project
requirements have been adequately defined;
``(ii) the time constraints for delivery of
the project;
``(iii) the capability and experience of
potential contractors;
``(iv) the suitability of the project for
use of the two-phase selection procedures;
``(v) the capability of the agency to
manage the two-phase selection process; and
``(vi) other criteria established by the
agency.''.
(2) Annual reports.--
(A) In general.--Not later than November 30 of
2017, 2018, 2019, 2020, and 2021, the head of each
agency shall compile an annual report of each instance
in which the agency awarded a design-build contract
pursuant to section 3309 of title 41, United States
Code, during the fiscal year ending in such calendar
year, in which--
(i) more than 5 finalists were selected for
phase-two requests for proposals; or
(ii) the contract or order was awarded
without using two-phase selection procedures.
(B) Public availability.--The Director of the
Office of Management and Budget shall facilitate public
access to the reports, including by posting them on a
publicly available Internet website. A notice of the
availability of each report shall be published in the
Federal Register.
(b) GAO Reports.--Not later than 270 days after the deadline for
the final reports required under subsection (f) of section 3309 of
title 41, United States Code, as added by subsection (a)(1), the
Comptroller General of the United States shall issue a report analyzing
the compliance of the various Federal agencies with the requirements of
such section.
SEC. 4. PROHIBITION ON THE USE OF A REVERSE AUCTION FOR THE AWARD OF A
CONTRACT FOR DESIGN AND CONSTRUCTION SERVICES.
(a) Finding.--Congress finds that, in contrast to a traditional
auction in which the buyers bid up the price, sellers bid down the
price in a reverse auction.
(b) Prohibition.--Not later than 180 days after the date of the
enactment of this Act, the Federal Acquisition Regulatory Council, in
consultation with the Administrator for Federal Procurement Policy,
shall amend the Federal Acquisition Regulation to prohibit the use of
reverse auctions as part of the two-phase selection procedure for
awarding contracts for construction and design services.
(c) Definitions.--For purposes of this section--
(1) the term ``design and construction services'' means--
(A) site planning and landscape design;
(B) architectural and engineering services
(including surveying and mapping defined in section
1101 of title 40, United States Code);
(C) interior design;
(D) performance of substantial construction work
for facility, infrastructure, and environmental
restoration projects;
(E) delivery and supply of construction materials
to construction sites; or
(F) construction or substantial alteration of
public buildings or public works; and
(2) the term ``reverse auction'' means, with respect to
procurement by an agency--
(A) a real-time auction conducted through an
electronic medium among 2 or more offerors who compete
by submitting bids for a supply or service contract
with the ability to submit revised lower bids at any
time before the closing of the auction; and
(B) the award of the contract, delivery order, task
order, or purchase order to the offeror, in whole or in
part, based on the price obtained through the auction
process.
Calendar No. 656
114th CONGRESS
2d Session
S. 1526
[Report No. 114-366]
_______________________________________________________________________
A BILL
To amend title 10 and title 41, United States Code, to improve the
manner in which Federal contracts for construction and design services
are awarded, to prohibit the use of reverse auctions for design and
construction services procurements, to amend title 31 and title 41,
United States Code, to improve the payment protections available to
construction contractors, subcontractors, and suppliers for work
performed, and for other purposes.
_______________________________________________________________________
October 27, 2016
Reported with an amendment