Defense Authorization Act, H.R. 2647

DEFENSE AUTHORIZATION ACT, H.R. 2647 -- (Extensions of Remarks - July 13, 2009)

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Mr. GRAYSON. Mr. Chair, amendment 106 to the Defense Authorization Act, H.R. 2647, requires a justification for the use of factors other than cost or price as predominant factors in evaluating competitive proposals for defense procurement contracts. The intent of this provision is to mandate that officials of the Department of Defense weight cost or price as the predominant factor in solicitations for defense procurement contracts, with only occasional and well-justified exceptions.

This amendment requires quantification of the relative weight of evaluation factors in the evaluation scheme, insofar as this is necessary to ensure compliance with the amendment.

The purposes of this amendment are two-fold. First, the use of cost or price as the predominant evaluation factor will result more frequently in the selection of the low-cost or a lower-cost offeror, which will save the Government money. Second, the use of cost or price as the predominant evaluation factor will encourage and incentivize offerors to submit ``lean'' proposals that will save the Government money.

Defense Secretary Robert Gates recently criticized military systems that ``have grown ever more baroque, have become ever more costly, are taking longer to build, and are being fielded in ever-dwindling quantities.'' This amendment combats that trend.

Another recent reminder of the risk of ``gold plating'' comes from the ``Marine One'' Presidential helicopter procurement program. It would be difficult to identify any commercial helicopter that costs as much as $40 million, but the VH-71 helicopters being purchased are likely to cost ten times that much. This is more than the cost of the Boeing 747s employed in the ``Air Force One'' program, even when that cost is adjusted for inflation.

Agencies may avoid the use of cost or price as predominant factors in solicitations only if the procurement officer or agency head determines that employing cost or price as predominant factors would--

(1) Materially increase the risk of failure of the mission or missions in which the item being procured will be employed, in an ascertainable manner specific to the mission or missions involved;

(2) Demonstrably threaten the safety or health of members of the Armed Forces or persons in their custody or care;

(3) Result in foreseeable and quantifiable additional defense expenditures outside the context of the procurement at hand that exceed any savings expected from employing cost or price as predominant factors;

(4) Deprive the Government of post-performance rights or property, such as warranties or intellectual property, the quantifiable value of which exceeds any savings expected from employing cost or price as predominant factors; or

(5) Violate an international agreement.

Justifications that are not satisfactory include:

(1) Preexisting law, other than international agreements;

(2) A generalized preference for quality, reliability, experience or high performance;

(3) Evolving technical requirements;

(4) Concerns about contractor responsibility; and

(5) Any other reason not enumerated as a valid justification above.

The justification required by this provision generally should follow the same procedures as the justifications required for other than full and open competition, as currently set forth in Federal Acquisition Regulation sections 6.303 and 6.304. In all cases in which extrinsic savings or risks are the justification, they shall be described in detail, with a description of how they were derived.

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