Some of these requirements were established before the development of sophisticated cost principles, improved techniques for analyzing cost and pricing data, and the existence of government audit capabilities. Some were enacted in response to economic conditions that do not now exist. The monetary value for application of some of the statutes is unrealistically low in relation to the change in the value of the dollar from the time they were enacted. This has tended to extend the requirements to many small contracts which were exempt when the requirements were enacted. To avoid this situation in the future, Congress may want to consider a means of "indexing" to maintain applicability at a constant level. The Congress also should examine how the Department of Labor (DOL) implements the statutes under its jurisdiction that impact procurement Bacon Act, the Contract Work Hours and Safety Standards Act, and the Service Contract Act. - namely, the Davis In the past DOL has issued or proposed revisions to regulations implementing these statutes that were questionable as a matter of law, and have imposed or would result in burdensome requirements on the procurement process. In 1976 and 1978 the ABA adopted resolutions urging the Congress to amend the Service Contract Act to correct certain abuses under DOL's actions. Last year the ABA adopted another resolution opposing a number of revisions to the DOL regulations under these statutes. of these resolutions are attached. Copies While we recognize these matters are the primary responsibility of another Committee, we are calling them to your attention because of their impact on Federal procurement. One of the problems in assuring that Federal procurement is efficient and economical is the fact that jurisdiction over legislation affecting the procurement process is divided among several Committees of the House and the Senate. Statute of limitations on claims by the government. We have previously suggested that Congress should adopt a statute of limitations on claims by the government against its contractors. With the passage of Public Law 87-653, "Truth-in-Pricing," and Public Law 93379, "Cost Accounting Standards", the government can reach back into a completed contract many years after completion of deliveries and file a claim against the contractor. Although the audit clause in government contracts limits the government's right to audit to three years after date of final payment, the audit report setting forth the grounds for a claim might languish for three or four years before a contracting officer issues a final decision which can be appealed. A contractor's ability to submit a claim against the government under a contract provision, on the other hand, is forever closed once the contractor accepts final payment or, under a cost reimbursement type contract, once a contractor waives its right to such claims against the government. A statute of limitations on government claims is needed to reduce the significant burden of record keeping and to compel the initiation of government claims while the witnesses are still available and the evidence is reasonably fresh in the minds of the witnesses for both parties. Unsolicited proposals. The COGP recommended that the government eliminate restraints which discourage the generation and acceptance of innovative ideas through unsolicited proposals. We supported that recommendation and have previously proposed the adoption of legislation that would authorize the use of unsolicited proposals, and permit the award of contracts to those whose proposals are sufficiently unique to justify acceptance by the government. This is particularly true in the high technology arena. Bid and award protests; rights of judicial review. Title VII of S. 1264 expressly established the General Accounting Office (GAO) as a forum for deciding bid and award protests, and established criteria for the handling of such protests. The ABA endorsed that 81-896 0-81--3 proposal. We still believe it is sound, and urge the subcommittee to examine this aspect of Federal procurement. The Comptroller General and his staff have 55 years of experience in adjudicating bid and award protests. As the Court of Appeals has stated, the GAO has a non partisan, objective view towards the procurement decisions under challenge that could never be achieved by the contracting agencies. However, the authority for GAO's role is not expressly provided for by statute; it has no power to compel the contracting agencies to respond to a protest; to award bid and proposal costs; or to bind the contracting agencies to comply with its decisions. From time to time, various Attorneys General have raised constitutional questions as to the GAO's authority in this area. In our opinion placing this power in GAO does not contravene the separation of powers doctrine. In supporting the establishment of GAO in this role, we disagreed with one aspect of Title VII. As drafted, that Title made a GAO decision binding on both the contracting agency and the party filing the protest. The proposed protest procedure contemplated an informal type review although GAO, under criteria set forth in the bill, could conduct a formal hearing, including the issuance of subpoenas. Because there was no guarantee of a trial-type hearing before GAO, we recommended that GAO decisions be made binding only on the contracting agency, and that other interested persons (e.g., protester, party awarded the contract) have the right to a de novo review in Federal court. Payment of interest by the government on overdue bills. We also direct your attention to Section 511 of S. 1264 which would have required the government to pay interest on payments due to contractors for more than 30 days. The government routinely uses a contract provision adding interest on overdue payments owed by a contractor to the government. However, there is no requirement that the government pay interest on delinquent payments to contractors. This can have a serious financial impact on contractparticularly small business contractors. Unfortunately, the government sometimes adopts a policy of delaying payments for its own budgetary reasons. In other situations, invoices are not processed promptly because there is no penalty for late payments." Whatever the reason, ors - */ The GSA Board of Contract Appeals recently held the BCA GSBCA No. 5722, However, this decision is not binding on other agency BCAS, does not establish a universal rule for the start of interest, and is dependent on the conversion of a voucher to a claim for purposes of the Act. Cf. Alum Contractors, Inc., ASBCA No. 237929, 79-2 BCA ▼ 12199; Robert (Continued) |