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                                                   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.
---------------------------------------------------------------------------
    \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].
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \2\See NDAA FY2018, Pub. L. No. 115-91, Sec. 851, Improvement of 
Planning for Acquisition of Services [hereinafter NDAA FY2018].
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.''
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \7\GAO-16-15, supra note 1, at 6.
    \8\Id. at 10.
    \9\Id. at Highlights; pp. 10-16.
    \10\Id.
---------------------------------------------------------------------------
    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.

                                  [all]