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115th Congress }                                          { REPORT
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                          { 115-402

======================================================================
 
                FEDERAL ACQUISITION SAVINGS ACT OF 2017

                                _______
                                

November 8, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Gowdy, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3071]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 3071) to require executive agencies 
to consider equipment rental in any cost-effectiveness analysis 
for equipment acquisition, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................     1
Section-by-Section...............................................     3
Explanation of Amendments........................................     3
Committee Consideration..........................................     3
Roll Call Votes..................................................     4
Application of Law to the Legislative Branch.....................     4
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     4
Statement of General Performance Goals and Objectives............     4
Duplication of Federal Programs..................................     4
Disclosure of Directed Rule Makings..............................     4
Federal Advisory Committee Act...................................     4
Unfunded Mandates Statement......................................     4
Earmark Identification...........................................     5
Committee Estimate...............................................     5
Budget Authority and Congressional Budget Office Cost Estimate...     5

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 3071, the Federal Acquisition Savings Act of 2017, 
requires the federal government to analyze the cost 
effectiveness of renting equipment compared to buying or 
leasing such equipment and to revise the Federal Acquisition 
Regulation (FAR) to implement this requirement. This bill also 
requires the Government Accountability Office (GAO) to submit a 
report to Congress two years after enactment on agency 
decisions to acquire equipment by purchase, lease, or rental.

                  BACKGROUND AND NEED FOR LEGISLATION

    In 2012, the GAO reported that agencies annually spent more 
than $200 billion on average purchasing or leasing equipment, 
with purchasing accounting for almost all of this spending.\1\ 
Current rules encourage agencies to assess the cost and 
effectiveness of options to obtain equipment, but this analysis 
is limited to comparing only purchasing versus leasing.\2\ 
Notably, the GAO found that agencies often fail to perform the 
lease-versus-purchase analysis.\3\
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    \1\Gov't Accountability Office, GAO-12-281R, Air Force and Interior 
Can Benefit From Additional Guidance When Deciding Whether to Lease or 
Purchase Equipment (2012).
    \2\48 C.F.R subpart 7.4 (2017).
    \3\Gov't Accountability Office, supra note 1.
---------------------------------------------------------------------------
    Beginning in 2013, there was an attempt to prompt a policy 
change to reemphasize the need for cost effectiveness analysis 
and consideration of the rental option. On July 16, 2013, the 
General Services Administration (GSA) issued a Request For 
Information (RFI) to examine whether there was a distinction 
between leasing and renting of equipment that should be 
considered in the FAR directed cost effectiveness analysis.\4\ 
However, GSA did not pursue further action after the RFI.
---------------------------------------------------------------------------
    \4\78 Fed. Reg. 42524 (July 16, 2013) (request for information).
---------------------------------------------------------------------------
    H.R. 3071 makes clear that agencies should consider a range 
of options for obtaining equipment, to include purchasing, 
leasing, and renting, by directing a change to the FAR. H.R. 
3071 reemphasizes the need to perform cost effectiveness 
analysis and include in this analysis the rental option. This 
policy change is a significant opportunity for cost savings in 
obtaining equipment.
    Renting equipment can provide a more cost effective and 
flexible alternative to buying or even leasing, which becomes 
clear after analyzing these acquisition options. In purchasing 
equipment, the purchaser makes a long-term investment and 
assumes the total cost of ownership for the equipment. This is 
appropriate in many cases.
    However, there may be short-term needs that can be met with 
acquisition solutions without assuming the total cost of 
ownership that purchasing equipment requires. Instead of 
purchasing, leasing or renting may offer better solutions.
    It is important to consider the distinct attributes of 
leasing and renting in considering equipment acquisition 
options.\5\ In the case of leasing, there are defined leasing 
periods--which can be years--and leases are specific to a 
particular piece of equipment. Leasing may also require capital 
to finance the lease whereas renting typically does not. 
Further, the costs of maintenance, insurance, and storage are 
typically the responsibility of the lessee and not the lessor. 
In contrast to leasing, renting equipment may provide for a 
temporary period with no fixed duration and is generally more 
flexible. Typically, rental agreements will cover cost of 
ownership, including storage, maintenance, insurance, 
transport, and licensing. Renting may be a particularly cost 
effective option when there will be low utilization rates for 
the equipment.
---------------------------------------------------------------------------
    \5\Letter from Christine L. Wehrman, CEO/Executive Vice President, 
American Rental Association, to the Honorable Daniel Tangherlini, 
Acting Administrator, General Services Administration (June 14, 2012).
---------------------------------------------------------------------------
    State and local governments have used the equipment rental 
option with great success, but the federal government has not 
widely adopted it. For example, the Texas Department of 
Transportation reported savings of $10.8 million due to a 
rental program implemented by their Fleet Operations 
Division.\6\ The Director of the Fleet Operations Division 
reported renting more than 1,200 pieces of equipment at a cost 
of $18.9 million and purchasing 931 assets at a cost of more 
than $40 million.\7\ In Mississippi, the Department of 
Transportation commissioned a study on its equipment management 
processes and systems and found renting equipment to supplement 
their fleet was the most cost effective option.\8\ The study 
found Mississippi could realize over $13,000 in annual cost 
savings and $180,000 in life-cycle cost savings per bulldozer 
unit.\9\
---------------------------------------------------------------------------
    \6\Letter from Dalton Pratt, Director, Fleet Operations Division, 
Texas Department of Transportation, to John W. McClelland, Vice 
President Government Affairs and Chief Economist, American Rental 
Association (May 19, 2017).
    \7\Id.
    \8\Dye Management Group, Inc., Equipment Management Review Final 
Recommendation Report (Nov. 2013) (Report for the Mississippi 
Department of Transportation).
    \9\Id. at 27.
---------------------------------------------------------------------------

                          LEGISLATIVE HISTORY

    On June 27, 2017, Representative Earl L. ``Buddy'' Carter 
(R-GA) introduced H.R. 3071, the Federal Acquisition Savings 
Act of 2017, with Representatives James Himes (D-CT) and Glenn 
Grothman (R-WI). H.R. 3071 was referred to the Committee on 
Oversight and Government Reform. The Committee considered H.R. 
3071 at a business meeting on September 13, 2017, and ordered 
the bill reported favorably to the House, by voice vote.

                           Section-by-Section


Section 1. Short title

    Section 1 establishes the short title of the bill.

Section 2. Cost-effectiveness analysis of equipment rental

    Section 2 directs agencies to consider equipment rental in 
any cost effectiveness analysis for equipment acquisitions 
conducted 180 days after enactment, and requires the Federal 
Acquisition Regulation (FAR) be updated accordingly. In 
addition, Section 2 requires a GAO report on agency decisions 
made to acquire equipment by purchase, lease, or renting 
pursuant to the FAR.

                       Explanation of Amendments

    There were no amendments to H.R. 3071 offered or adopted 
during Committee consideration of the bill.

                        Committee Consideration

    On September 13, 2017, the Committee met in open session 
and, with a quorum being present, ordered the bill favorably 
reported to the House, by voice vote.

                            Roll Call Votes

    There were no roll call votes requested or conducted during 
Full Committee consideration of H.R. 3071.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill helps ensure the federal government makes cost 
effective decisions in obtaining equipment by analyzing various 
acquisition strategies. As such, this bill does not relate to 
employment or access to public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goal or objective of this bill is to ensure the federal 
government makes cost effective decisions in obtaining 
equipment by analyzing various acquisition strategies.

                    Duplication of Federal Programs

    In accordance with clause 2(c)(5) of rule XIII no provision 
of this bill establishes or reauthorizes a program of the 
Federal Government known to be duplicative of another Federal 
program, a program that was included in any report from the 
Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting this bill does not 
direct the completion of any specific rule makings within the 
meaning of section 551 or title 5, United States Code. However, 
this bill does direct a revision of the Federal Acquisition 
Regulation.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of Section 5(b) of the appendix to title 5, 
United States Code.

                      Unfunded Mandates Statement

    Pursuant to section 423 of the Congressional Budget and 
Impoundment Control Act (Pub. L. 113-67) the Committee has 
included a letter received from the Congressional Budget Office 
below.

                         Earmark Identification

    This bill does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the House of Representatives.

                           Committee Estimate

    Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of 
the House of Representatives, the Committee includes below a 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.

   New Budget Authority and Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the House of 
Representatives, the cost estimate prepared by the 
Congressional Budget Office and submitted pursuant to section 
402 of the Congressional Budget Act of 1974 is as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 4, 2017.
Hon. Trey Gowdy,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3071, the Federal 
Acquisition Savings Act of 2017.
    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.

H.R. 3071--Federal Acquisition Savings Act of 2017

    H.R. 3071 would amend the Federal Acquisition Regulation to 
require agencies to consider equipment rental in any analysis 
performed prior to acquiring a piece of equipment. The bill 
also would require a report within two years by the Government 
Accountability Office on equipment acquisitions. According to 
the General Services Administration, agencies are already 
required to consider purchasing or leasing when evaluating the 
acquisition of equipment. This bill would clarify that renting 
equipment is an acceptable method for acquiring equipment. 
Because H.R. 3071 would not materially change how agencies 
acquire equipment, CBO estimates that implementing H.R. 3071 
would have no significant effect on the federal budget.
    H.R. 3071 could affect direct spending by agencies not 
funded through annual appropriations; therefore, pay-as-you-go 
procedures apply. CBO estimates, however, that any net increase 
in spending by those agencies would not be significant. 
Enacting H.R. 3071 would not affect revenues.
    CBO estimates that enacting H.R. 3071 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 3071 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                                  [all]