Kate M. Manuel
Legislative Attorney
Jack Maskell
Legislative Attorney
Recent Congresses and the Obama Administration have taken numerous actions to promote “insourcing,” or the use of government personnel to perform functions that contractors previously performed on behalf of federal agencies. Among other things, the 109th through the 111th Congresses enacted several statutes requiring the development of policies and guidelines to ensure that agencies “consider” using government employees to perform functions previously performed by contractors, as well as any new functions. These statutes also require that “special consideration” be given to using government personnel to perform certain functions, including those functions (1) performed by government employees in the recent past, (2) closely associated with the performance of inherently governmental functions, (3) performed pursuant to a contract awarded on a non-competitive basis, or (4) performed poorly by a contractor because of excessive costs or inferior quality. The Obama Administration has similarly promoted insourcing. Among other things, on July 29, 2009, the Office of Management and Budget directed federal agencies to conduct pilot human capital analyses of programs where the agency has concerns about its reliance on contractors, as a prelude to potentially insourcing functions performed by contractors.
Several lawsuits have been filed in response to certain Obama Administration insourcing initiatives, alleging that agencies’ determinations to insource particular functions were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law” in violation of the Administrative Procedure Act (APA). These suits raise several legal issues that are presently unresolved. First, questions have arisen as to whether the federal district courts or the U.S. Court of Federal Claims have jurisdiction over such suits. Courts have reached differing conclusions as to whether a contractor challenging an insourcing determination is an “interested party” within the meaning of the Administrative Dispute Resolution Act (ADRA) of 1996, and whether an insourcing determination is made “in connection with a proposed procurement” under the act. Assuming that contractors are interested parties and insourcing determinations are made in connection with proposed procurements, the U.S. Court of Federal Claims would have exclusive jurisdiction under ADRA. If not, the district courts would have jurisdiction under the APA. Second, there is the question of whether contractors meet any prudential standing requirements to challenge insourcing decisions. Courts have also reached differing conclusions as to whether such standing requirements apply to “interested parties” under ADRA, and there could be disagreement as to whether contractors are within the “zone of interests” to be protected by insourcing statutes. Finally, assuming that contractors meet any prudential standing requirements, there may be questions as to whether particular insourcing guidelines are legally binding under the APA, as well as to whether particular agency actions were contrary to any binding guidelines.
Other provisions of law could also constrain whether and how agencies may proceed with insourcing in particular circumstances, or limit the activities that former contractor employees may perform after being hired by the federal government. These include (1) contract law, under which agencies could be found to have constructively terminated certain requirements contracts by augmenting their in-house capacity to perform services provided for in the contract; (2) civil service law, which would generally limit “direct hires” of contractor employees; and (3) ethics law, which could limit the involvement of former contractor employees in certain agency actions.
The 112th Congress is considering legislation that could constrain insourcing initiatives by requiring agencies to conduct a public-private competition and determine that provision of goods or services by federal employees provides “best value” prior to insourcing (H.R. 1474, S. 785). A provision of the House-passed National Defense Authorization Act for FY2012 (H.R. 1540, §939) could also limit agencies’ ability to insource functions.
Date of Report: November 15, 2011
Number of Pages: 22
Order Number: R41810
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Nathan James, Coordinator
Analyst in Crime Policy
Jennifer D. Williams, Coordinator
Specialist in American National Government
John F. Sargent Jr., Coordinator
Specialist in Science and Technology Policy
This report provides an overview of actions taken by Congress to provide FY2012 appropriations for Commerce, Justice, Science, and Related Agencies (CJS) accounts.
On November 1, 2011, the Senate passed an amended version of H.R. 2112, which included the Senate’s proposed funding for the agencies and bureaus funded as a part of the annual CJS appropriations bill. H.R. 2112, as passed by the Senate, would provide $60.664 billion for CJS. This includes $8.192 billion for the Department of Commerce, $26.925 billion for the Department of Justice, $24.643 billion for the science agencies, and $903.9 million for the related agencies.
On October 5, 2011, President Obama signed into law the Continuing Appropriations Act, 2012 (P.L. 112-36). The act continues appropriations for the agencies and bureaus funded under the annual CJS bill at 1.503% below the FY2011-enacted levels until November 18, 2011, or until the FY2011 CJS bill is passed by Congress and signed into law by the President.
On July 20, 2011, the House Committee on Appropriations reported the Commerce, Justice, Science, and Related Agencies Appropriations Act, 2012 (H.R. 2596). The bill would provide a total of $57.949 billion for CJS. The amount recommended by the committee is 10.9% less than the Administration’s FY2012 request for CJS and 5.3% below the FY2011-enacted level. The bill includes $7.161 billion for the Department of Commerce, $26.323 billion for the Department of Justice, $23.649 billion for the science agencies, and $814.8 million for the related agencies.
For FY2012, the Administration requests a total of $64.93 billion for the agencies and bureaus funded as part of the annual CJS appropriations bill. The FY2012 request is $3.839 billion, or 6.3%, more than the FY2011-enacted amount of $61.092 billion. The proposed reduction in overall funding for CJS is almost entirely attributable to the Administration requesting nearly $6.3 billion less for the Census Bureau because the 2010 decennial census is complete. The Administration’s FY2012 request includes $8.761 billion for the Department of Commerce, $28.68 billion for the Department of Justice, $26.498 billion for the science agencies, and $991.4 million for the related agencies.
On April 15, 2011, President Obama signed into law the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10). The act provided a total of $61.092 billion for agencies and bureaus funded as a part of the annual appropriation for CJS for FY2011. The $61.092 billion provided by the act includes $7.578 billion for the Department of Commerce, $27.281 billion for the Department of Justice, $25.315 billion for the science agencies, and $917.9 million for the related agencies.
The source for the FY2011-enacted amounts, the FY2012-requested amounts, and the House Committee on Appropriations-recommended amounts is H.Rept. 112-169. The Senate-passed amounts were taken from H.R. 2112, as passed by the Senate.
Date of Report: November 3, 2011
Number of Pages: 71
Order Number: R41721
Price: $29.95
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R. Sam Garrett
Specialist in American National Government
For decades, Congress, regulatory agencies, and courts have emphasized the need to reduce potential corruption by providing public disclosure of information about campaign contributions and expenditures. Preventing corruption and enhancing transparency remain prominent themes in campaign finance policy, but what those goals mean and how they should be accomplished appears to be in flux.
Minor and major changes have occurred in campaign finance policy since 2002, when Congress substantially amended campaign finance law via the Bipartisan Campaign Reform Act (BCRA). More recently, the Supreme Court’s 2010 ruling in Citizens United v. FEC and a related lowercourt decision, SpeechNow.org v. FEC, arguably represent the most fundamental changes to campaign finance law in decades. During the 111th Congress, the House responded by enacting the DISCLOSE Act (H.R. 5175; S. 3295; S. 3628). The Senate declined to do so.
Campaign finance issues continue developing in Congress, at regulatory agencies, and in the courts. In January 2011, the House passed legislation (H.R. 359) that would repeal the presidential public financing program. The House and Senate have held hearings on two campaign finance issues. First, S. 750 (see also S. 749 and H.R. 1404) is the latest version of the Fair Elections Now Act (FENA), which would publicly finance Senate campaigns. The Senate Judiciary Subcommittee on the Constitution, Civil Rights, and Human Rights held a hearing on the bill in April 2011. Second, amid reports of a possible Obama Administration executive order that would require additional disclosure of government contractors’ spending surrounding elections, the House Committee on Oversight and Government Reform and Committee on Small Business held a joint hearing in May 2011. Amendments to unrelated bills (H.R. 1540; H.R. 2017; and H.R. 2354) that passed the House in May, June, and July 2011, respectively, contain provisions reportedly developed in response to the possible draft executive order. In addition, the Committee on House Administration, Subcommittee on Elections, held an April 2011 hearing on H.R. 672. That measure proposes to eliminate the Election Assistance Commission (EAC) and transfer some functions to the Federal Election Commission (FEC). Finally, in June 2011, the Supreme Court issued a 5-4 decision in Arizona Free Enterprise Club’s Freedom Club PAC et al. v. Bennett. The Court invalidated Arizona’s use of matching funds for publicly financed candidates. The opinion is most relevant for state public financing programs but may shape federal policy options.
Fundraising and spending in the 2010 election cycle suggest that previously prohibited sources and amounts of funds will continue to be a factor in federal elections. Activities by independentexpenditure- only political action committees (super PACs) and tax-exempt organizations that are typically not political committees (e.g., Internal Revenue Code 501(c) and 527 organizations) may be particularly prominent.
Despite recent changes, some aspects of campaign finance policy remain unchanged. Presidential public financing and the FEC may require congressional attention regardless of more recent developments. As Congress decides whether to revisit law surrounding political campaigns, it may be appropriate to take stock of the current landscape and to examine what has changed, what has not, and what policy options might be relevant. This report provides a starting point for doing so. It also provides comments on how those events might affect future policy considerations.
Date of Report: November 17, 2011
Number of Pages: 30
Order Number: R41542
Price: $29.95
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Robert Jay Dilger
Senior Specialist in American National Government
Richard S. Beth
Specialist on Congress and the Legislative Process
The Unfunded Mandates Reform Act of 1995 (UMRA) culminated years of effort by state and local government officials and business interests to control, if not eliminate, the imposition of unfunded intergovernmental and private-sector federal mandates. Advocates argued the statute was needed to forestall federal legislation and regulations that imposed obligations on state and local governments or businesses that resulted in higher costs and inefficiencies. Opponents argued that federal mandates may be necessary to achieve national objectives in areas where voluntary action by state and local governments and business failed to achieve desired results.
UMRA provides a framework for the Congressional Budget Office (CBO) to estimate the direct costs of mandates in legislative proposals to state and local governments and to the private sector, and for issuing agencies to estimate the direct costs of mandates in proposed regulations to regulated entities. Aside from these informational requirements, UMRA controls the imposition of mandates only through a procedural mechanism allowing Congress to decline to consider unfunded intergovernmental mandates in proposed legislation if they are estimated to cost more than specified threshold amounts. UMRA applies to any provision in legislation, statute, or regulation that would impose an enforceable duty upon state and local governments or the private sector. It does not apply to conditions of federal assistance; duties stemming from participation in voluntary federal programs; rules issued by independent regulatory agencies; rules issued without a general notice of proposed rulemaking; and rules and legislative provisions that cover individual constitutional rights, discrimination, emergency assistance, grant accounting and auditing procedures, national security, treaty obligations, and certain elements of Social Security.
State and local government officials argue that UMRA has restrained the growth of unfunded federal mandates, but that its coverage should be broadened, with special consideration given to including conditions of federal financial assistance. Reflecting these views, H.R. 373, the Unfunded Mandates Information and Transparency Act of 2011 (as amended), would, among other things, broaden UMRA’s coverage to include assessments of indirect as well as direct costs and, when requested by the chair or ranking member of a committee, the prospective costs of legislation that would change conditions of federal financial assistance. That bill, as well as H.R. 5818, the Mandate Prevention Act of 2010, would also make private-sector mandates subject to a substantive point of order. H.R. 373 and S. 1189, the Unfunded Mandates Accountability Act of 2011, would also remove UMRA’s exemption for rules issued by most independent agencies. Other organizations have argued that UMRA’s coverage should be maintained or reinforced by adding exclusions for mandates regarding public health, safety, workers’ rights, environmental protection, and the disabled.
This report examines debates over what constitutes an unfunded federal mandate and UMRA’s implementation. It focuses on UMRA’s requirement that CBO issue written cost estimate statements for federal mandates in legislation, its procedures for raising points of order in the House and Senate concerning unfunded federal mandates in legislation, and its requirement that federal agencies prepare written cost estimate statements for federal mandates in rules. It also assesses UMRA’s impact on federal mandates and arguments concerning UMRA’s future, focusing on UMRA’s definitions, exclusions, and exceptions which currently exempt many federal actions with potentially significant financial impacts on nonfederal entities. An examination of the rise of unfunded federal mandates as a national issue and a summary of UMRA’s legislative history are provided in an Appendix.
Date of Report: November 18, 2011
Number of Pages: 51
Order Number: R40957
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Kate M. Manuel
Legislative Attorney
Moshe Schwartz
Specialist in Defense Acquisition
Bid protests, especially bid protests filed with the Government Accountability Office (GAO), have recently received increased congressional scrutiny due to protests of high-profile awards and reports that the number of protests is increasing. The potential delay of contract award or performance triggered by a GAO protest, coupled with the increasing number of GAO protests, has also prompted concerns about the impact of protests upon agency operations, especially in the Department of Defense. Additionally, questions have recently arisen about GAO’s jurisdiction over protests challenging the issuance of task and delivery orders valued in excess of $10 million. The 111th Congress enacted legislation (P.L. 111-383) extending certain provisions governing GAO’s jurisdiction over “large” orders issued under defense contracts that otherwise would have sunset in May 2011. The 112th Congress has considered, but not enacted, similar legislation regarding the orders of civilian agencies (H.R. 899, S. 498). However, in unrelated decisions issued on June 14, 2011, and August 19, 2011, the GAO and the U.S. Court of Federal Claims found that they have jurisdiction over protests of orders of any size issued under civilian agency contracts, notwithstanding the sunset date.
GAO, the contracting agencies, and the Court of Federal Claims all have authority to hear bid protests. However, GAO hears more protests annually than the Court of Federal Claims, the only other forum for which data are readily available. Legislation and regulations establish what issues may be protested with GAO and who may bring a protest. GAO may hear claims of alleged illegalities or improprieties in solicitations, cancellations of solicitations, or awards or proposed awards of contracts. However, it is barred from hearing certain issues, such as challenges to small business size certifications. Any “interested party”—or actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award it—may file a protest. Procedures for filing and conducting GAO protests are designed to ensure “inexpensive and expeditious resolution of [bid] protests.” Protesters need not file formal briefs or technical pleadings, can represent themselves, and can have protests decided without hearings. All protests are to be resolved within 100 calendar days of filing, and deadlines for mandatory and optional events within the GAO bid-protest process ensure decisions can be reached within this time frame.
Filing a GAO protest generally triggers an automatic stay of contract award or performance during the pendency of the protest. A similar stay does not result when protests are filed with the Court of Federal Claims. However, agencies can override stays because urgent and compelling circumstances will not permit waiting for GAO’s decision, or because performance of the contract is in the best interests of the United States. Agencies must inform GAO of their override decisions, but GAO cannot prevent an agency override.
GAO may deny or sustain a protest. A denial allows the agency to proceed with the challenged award. When GAO sustains a protest, it also makes recommendations to the agency about the challenged award, such as re-competing the contract or issuing a new solicitation. GAO’s recommendations are not legally binding upon the agency because the “separation of powers” doctrine precludes legislative branch agencies, such as GAO, from controlling the actions of executive branch agencies. However, the agency is to notify GAO if it does not fully implement GAO’s recommendations. GAO is, then, to inform Congress of agency noncompliance. Agencies comply with GAO recommendations in most protests. Protesters disappointed with GAO’s decision can seek reconsideration from GAO. They can also “appeal” GAO’s decision by filing a bid protest with the Court of Federal Claims.
Date of Report: November 14, 2011
Number of Pages: 23
Order Number: R40228
Price: $29.95
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