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AN ACT To establish an Office of Federal Procurement Policy within the Office of
Management and Budget, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


(a) SHORT TITLE.-This Act may be cited as the "Office of Federal Procurement Policy Act".

(b) TABLE OF CONTENTS.-The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Declaration of policy.

Sec. 3. Findings and purpose.

Sec. 4. Definitions.

Sec. 5. Office of Federal Procurement Policy.

Sec. 6. Authority and functions of the Administrator.

Sec. 7. Administrative powers.

Sec. 8. Responsiveness to Congress.

Sec. 9. Effect on existing laws.

Sec. 10. Effect on existing regulations.

Sec. 11. Authorization of appropriations.

Sec. 12. Delegation.

Sec. 14. Access to information.

Sec. 15. Tests of innovative procurement methods and procedures.
Sec. 16. Executive agency responsibilities.

Sec. 18. Procurement notice.

Sec. 19. Record requirements.

Sec. 20. Advocates for competition.

Sec. 21. Rights in technical data.

Sec. 22. Publication of proposed regulations.

Sec. 23. Contracting functions performed by Federal personnel.

Sec. 25. Federal Acquisition Regulatory Council.

Sec. 26. Cost Accounting Standards Board.

Sec. 27. Procurement integrity.

Sec. 28. Advocate for the Acquisition of Commercial Products.

Sec. 29. Nonstandard contract clauses.

Sec. 30. Federal acquisition computer network (FACNET).

Sec. 30A. Federal acquisition computer network implementation.

Sec. 31. Simplified acquisition procedures.

Sec. 32. Procedures applicable to purchases below micro-purchase threshold.

Sec. 33. List of laws inapplicable to contracts not greater than the simplified acqui-
sition threshold in Federal Acquisition Regulation.
Sec. 34. List of laws inapplicable to procurements of commercial items in Federal
Acquisition Regulation.


It is the policy of the United States Government to promote economy, efficiency and effectiveness in the procurement of prop

1Section 502 of the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 1993 (Public Law 102-394; 106 Stat. 1825; 41 U.S.C. 401 note) provides:

SEC. 502. No part of any appropriation_contained in this Act or subsequent Departments of
Labor, Health and Human Services, and Education, and Related Agencies Appropriations Acts


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erty and services by the executive branch of the Federal Government by

(1) promoting full and open competition;

(2) establishing policies, procedures, and practices which will provide the Government with property and services of the requisite quality, within the time needed, at the lowest reasonable cost;

(3) promoting the development of simplified uniform procurement processes;

(4) promoting the participation of small business concerns; (5) supporting the continuing development of a competent, professional work force;

(6) eliminating fraud and waste in the procurement proc


(7) eliminating redundant administrative requirements placed on contractor and Federal procurement officials;

(8) promoting fair dealings and equitable relationships with the private sector;

(9) ensuring that payment is made in a timely manner and only for value received;

(10) requiring, to the extent practicable, the use of commercial products to meet the Government's needs;

(11) requiring that personal services are obtained in accordance with applicable personnel procedures and not by contract;

(12) ensuring the development of procurement policies that will accommodate emergencies and wartime as well as peacetime requirements;

(13) promoting, whenever feasible, the use of specifications which describe needs in terms of functions to be performed or the performance required; and

(14) establishing policies and procedures that encourage the consideration of the offerors' past performance in the selection of contractors.


(a) The Congress finds that economy, efficiency, and effectiveness in the procurement of property and services by the executive agencies will be improved by establishing an office to exercise responsibility for Government-wide procurement policies, regulations, procedures, and forms.

(b) The purpose of this Act is to establish an Office of Federal Procurement Policy in the Office of Management and Budget to provide overall direction of procurement policies, regulations, procedures, and forms for executive agencies in accordance with applicable laws.

SEC. 4. [41 U.S.C. 403] DEFINITIONS.

As used in this Act

(1) the term "executive agency" means

shall be expended by an executive agency, as referred to in the Office of Federal Procurement Policy Act (41 U.S.Č. 401 et seq.), pursuant to any obligation for services by contract, unless such executive agency has awarded and entered into such contract in full compliance with such Act and regulations promulgated thereunder.

(A) an executive department specified in section 101 of title 5, United States Code;

(B) a military department specified in section 102 of such title;

(C) an independent establishment as defined in section 104(1) of such title; and

(D) a wholly owned Government corporation fully subject to the provisions of chapter 91 of title 31, United States Code;

(2) the term "procurement" includes all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout;

(3) the term "procurement system" means the integration of the procurement process, the professional development of procurement personnel, and the management structure for carrying out the procurement function;

(4) the term "standards" means the criteria for determining the effectiveness of the procurement system by measuring the performance of the various elements of such system; and (5) the term "competitive procedures" means procedures under which an agency enters into a contract pursuant to full and open competition;

(6) the term "full and open competition", when used with respect to a procurement, means that all responsible sources are permitted to submit sealed bids or competitive proposals on the procurement;

(7) the term "responsible source" means a prospective contractor who

(A) has adequate financial resources to perform the contract or the ability to obtain such resources;

(B) is able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and Government business commitments;

(C) has a satisfactory performance record;

(D) has a satisfactory record of integrity and business.


(E) has the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain such organization, experience, controls, and skills;

(F) has the necessary production, construction, and technical equipment and facilities, or the ability to obtain such equipment and facilities; and

(G) is otherwise qualified and eligible, to receive an award under applicable laws and regulations;

(8) the term "technical data" means recorded information (regardless of the form or method of the recording) of a scientific or technical nature (including computer software documentation) relating to supplies procured by an agency. Such term does not include computer software or financial, administrative, cost or pricing, or management data or other information incidental to contract administration;

(9)(A) the term "major system” means a combination of elements that will function together to produce the capabilities required to fulfill a mission need, which elements may include hardware, equipment, software or any combination thereof, but excludes construction or other improvements to real property; and

(B) a system shall be considered a major system if (i) the Department of Defense is responsible for the system and the total expenditures for research, development, test and evaluation for the system are estimated to be more than $75,000,000 (based on fiscal year 1980 constant dollars) or the eventual total expenditure for procurement of more than $300,000,000 (based on fiscal year 1980 constant dollars); (ii) a civilian agency is responsible for the system and total expenditures for the system are estimated to exceed $750,000 (based on fiscal year 1980 constant dollars) or the dollar threshold for a "major system" established by the agency pursuant to Office of Management and Budget (OMB) Circular A-109, entitled "Major Systems Acquisitions", whichever is greater; or (iii) the system is designated a "major system" by the head of the agency responsible for the system;

(10) the term "item", "item of supply", or "supplies" means any individual part, component, subassembly, assembly, or subsystem integral to a major system, and other property which may be replaced during the service life of the system, and includes spare parts and replenishment spare parts, but does not include packaging or labeling associated with shipment or identification of an "item"; and

(11) The term "simplified acquisition threshold" means $100,000.

(12) The term "commercial item" means any of the follow

ing: 2

(A) Any item, other than real property, that is of a type customarily used by the general public or by nongovernmental entities for purposes other than governmental purposes, and that

(i) has been sold, leased, or licensed to the general public; or

(ii) has been offered for sale, lease, or license to the general public.

(B) Any item that evolved from an item described in subparagraph (A) through advances in technology or performance and that is not yet available in the commercial marketplace, but will be available in the commercial marketplace in time to satisfy the delivery requirements under a Federal Government solicitation.

(C) Any item that, but for

(i) modifications of a type customarily available in the commercial marketplace, or

(ii) minor modifications made to meet Federal Government requirements,

2 For a provision on regulations implementing paragraphs (12) through (15) of section 4, see section 8002 of the Federal Acquisition Streamlining Act of 1994 (P.L. 103-355; 108 Stat. 3386; 41 U.S.C. 264 note), set forth beginning on page 466.

would satisfy the criteria in subparagraph (A) or (B).

(D) Any combination of items meeting the requirements of subparagraph (A), (B), (C), or (E) that are of a type customarily combined and sold in combination to the general public.

(E) Installation services, maintenance services, repair services, training services, and other services if such services are procured for support of an item referred to in subparagraph (A), (B), (C), or (D) and if the source of such services

(i) offers such services to the general public and the Federal Government contemporaneously and under similar terms and conditions; and

(ii) offers to use the same work force for providing the Federal Government with such services as the source uses for providing such services to the general public.

(F) Services offered and sold competitively, in substantial quantities, in the commercial marketplace based on established catalog prices for specific tasks performed and under standard commercial terms and conditions.

(G) Any item, combination of items, or service referred to in subparagraphs (A) through (F) notwithstanding the fact that the item, combination of items, or service is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor.

(H) A nondevelopmental item, if the procuring agency determines, in accordance with conditions set forth in the Federal Acquisition Regulation, that the item was developed exclusively at private expense and has been sold in substantial quantities, on a competitive basis, to multiple State and local governments.

(13) The term "nondevelopmental item" means any of the following:

(A) Any commercial item.

(B) Any previously developed item of supply that is in use by a department or agency of the United States, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement.

(C) Any item of supply described in subparagraph (A) or (B) that requires only minor modification or modification of the type customarily available in the commercial marketplace in order to meet the requirements of the procuring department or agency.

(D) Any item of supply currently being produced that does not meet the requirements of subparagraph (A), (B), or (C) solely because the item is not yet in use.

(14) The term "component" means any item supplied to the Federal Government as part of an end item or of another component.

(15) The term "commercial component" means any component that is a commercial item.

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