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Title XIV—Services Acquisition Reform

The Services Acquisition Reform Act of 2003 (SARA)

Public Law 108-136

House Conference Report 108-354

SEC. 1431. ADDITIONAL INCENTIVE FOR USE OF PERFORMANCE-BASED CONTRACTING FOR SERVICES.

(a) IN GENERAL- The Office of Federal Procurement Policy Act (41 U.S.C. 403 et seq.) is amended by adding at the end the following new section:

`SEC. 41. INCENTIVES FOR EFFICIENT PERFORMANCE OF SERVICES CONTRACTS.

`(a) INCENTIVE FOR USE OF PERFORMANCE-BASED SERVICES CONTRACTS- A performance-based contract for the procurement of services entered into by an executive agency or a performance-based task order for services issued by an executive agency may be treated as a contract for the procurement of commercial items if--

`(1) the value of the contract or task order is estimated not to exceed $25,000,000;

`(2) the contract or task order sets forth specifically each task to be performed and, for each task--

`(A) defines the task in measurable, mission-related terms;

`(B) identifies the specific end products or output to be achieved; and

`(C) contains firm, fixed prices for specific tasks to be performed or outcomes to be achieved; and

`(3) the source of the services provides similar services to the general public under terms and conditions similar to those offered to the Federal Government.

`(b) REGULATIONS- The regulations implementing this section shall require agencies to collect and maintain reliable data sufficient to identify the contracts or task orders treated as contracts for commercial items using the authority of this section. The data may be collected using the Federal Procurement Data System or other reporting mechanism.

`(c) REPORT- Not later than two years after the date of the enactment of this section, the Director of the Office of Management and Budget shall prepare and submit to the Committees on Governmental Affairs and on Armed Services of the Senate and the Committees on Government Reform and on Armed Services of the House of Representatives a report on the contracts or task orders treated as contracts for commercial items using the authority of this section. The report shall include data on the use of such authority both government-wide and for each department and agency.

`(d) EXPIRATION- The authority under this section shall expire 10 years after the date of the enactment of this section.'.

(b) CENTER OF EXCELLENCE IN SERVICE CONTRACTING- Not later than 180 days after the date of the enactment of this Act, the Administrator for Federal Procurement Policy shall establish a center of excellence in contracting for services. The center of excellence shall assist the acquisition community by identifying, and serving as a clearinghouse for, best practices in contracting for services in the public and private sectors.

(c) REPEAL OF SUPERSEDED PROVISION- Subsection (b) of section 821 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 (as enacted into law by Public Law 106-398; 114 Stat. 1654A-218; 10 U.S.C. 2302 note) is repealed.

(d) CLERICAL AND TECHNICAL AMENDMENTS- (1) The table of contents in section 1(b) of such Act is amended by striking the last item and inserting the following:

`Sec. 40. Protection of constitutional rights of contractors.

`Sec. 41. Incentives for efficient performance of services contracts.'.

(2) The section before section 41 of such Act (as added by subsection (a)) is redesignated as section 40.

The House bill contained a provision (sec. 1441) that would amend the Office of Federal Procurement Policy Act (41 U.S.C. 403) to create an additional incentive for the use of performance-based services contracts by authorizing a performance-based contract or a performance-based task order for services to be treated as a contract for the procurement of a commercial item if each task is defined in measurable, mission related terms with specific products or outputs, and the contractor provides similar services to the general public. This provision would also require the Administrator for Federal Procurement Policy to establish a center of excellence for service contracting to assist the acquisition community in identifying best practices in service contracting.

The Senate amendment contained a provision (section 811) that would extend the authority in section 821(b) of the Floyd Spence National Defense Authorization Act for fiscal year 2001 to treat Department of Defense performance based services contracts as contracts for the procurement of commercial items and raise the ceiling on such contracts to $10.0 million.

The Senate recedes with an amendment that would make the new government-wide contract authority consistent with existing authority applicable to the DOD, extend the authority for ten years, and raise the ceiling to $25.0 million.

House Report 108-117, Part 1

The section would amend section 41 of the Office of Federal Procurement Policy Act (41 U.S.C. 41), as added by section 302 above, to add a new subsection that would provide that a performance-based service contract or task order may be treated as a contract for a commercial item if it defines tasks to be performed in measurable, mission related terms, identifies specific products or outputs and the source provides similar services to the public under similar terms to those offered the government. This would authorize the use of special simplified procedures provided in the Federal Acquisition Regulation for commercial items if the performance-based contract or task order is valued at $5,000,000 or less and apply to those contracts the current waivers of requirements and certifications applicable to contracts for commercial items. Section 508 below provides that the application of the exemptions from cost accounting standards and cost or pricing data for a contract for a service treated as a commercial item under this section applies to contracts valued at up to $15,000,000. The section further provides for agencies to collect and maintain data to identify the contracts and orders for services considered commercial items under this section and for a report to congressional committees by the Office of Management and Budget on the use of these authorities government-wide and by agency. The provision would sunset after 10 years. Finally, the section would require the Administrator for Federal Procurement Policy to establish a Center of Excellence for Service Contracting to assist the acquisition community in identifying best practices in service contracting.