Proposals to Change the Operation of Cloture in the Senate

Christopher M. Davis
Analyst on Congress and the Legislative Process

Valerie Heitshusen
Analyst on Congress and the Legislative Process

Paragraph 2 of Senate Rule XXII, also known as the “cloture rule,” was adopted in 1917. It established a procedure, amended several times over the intervening years, by which the Senate may limit debate and act on a pending measure or matter. Aside from unanimous consent agreements and statutory limits applying to certain types of legislation, cloture is the only mechanism by which the Senate can limit debate.

In recent years, some Senators have expressed renewed concerns over the way in which extended debate is conducted in the Senate and the operation of the cloture rule. Proposals for changing the cloture process include the establishment of new precedents on amending the rules, changes in the threshold necessary to invoke cloture, reductions in the time costs associated with certain cloture-related actions, and new or additional restrictions on debate in certain circumstances.

This report provides a brief history of the Senate cloture rule, explains its main features and the arguments made by supporters and opponents of these features, outlines a range of proposals to change its operation, and briefly explains the methods by which the Senate might change its rules or practices.


Date of Report: January 11, 2013
Number of Pages: 24
Order Number: R41342
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Legal Protections for Subcontractors on Federal Prime Contracts

Kate M. Manuel
Legislative Attorney

Payment and other protections for subcontractors on federal contracts are of perennial interest to Members and committees of Congress, in part, because many subcontractors are small businesses, and it is the “declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small business concerns.” Subcontractors on federal contracts are not in privity of contract with the government and would generally lack the payment and other protections that federal prime contractors enjoy. However, Congress has enacted several measures that give small business and other subcontractors certain protections. Key among these are the Miller Act, the 1988 amendments to the Prompt Payment Act, and Section 8(d) of the Small Business Act.

The Miller Act of 1935, as amended, authorizes subcontractors who furnished labor or materials used in carrying out federal construction projects valued in excess of $150,000 to bring a civil action against prime contractors’ payment bonds to obtain payments due. Congress enacted the Miller Act to compensate for the difficulties that subcontractors would otherwise have in obtaining payment from federal construction contractors, given that they cannot place a mechanic’s lien on the work because the government has sovereign immunity. The doctrine of sovereign immunity protects the government from being sued without its consent, and the Contract Disputes Act waives the government’s sovereign immunity only as to suits involving contracts to which the government is a party, not subcontracts under these contracts. Relatedly, there is no privity of contract, or direct contractual relationship, between the government and the subcontractor, which means that the subcontractor generally cannot sue to enforce the payment or other terms of the subcontract against the government.

The 1988 amendments to the Prompt Payment Act provide an additional form of payment protection for subcontractors on federal construction contracts by requiring federal agencies to include in their contracts a clause obligating the prime contractor to pay the subcontractor for “satisfactory” performance within seven days of receiving payment from the government. Absent such a clause in the prime contract, the prime contractor would generally be free to agree to whatever payment terms it wishes with the subcontractor and would not necessarily pay the subcontractor as quickly. However, the federal government cannot be interpleaded as a party to any disputes between contractors and subcontractors over late payments or interest, and contractors’ obligations to pay subcontractors cannot be passed on to the federal government in any way, including by contract modifications or cost-reimbursement claims.

Section 8(d) of the Small Business Act provides a different sort of protection for prospective subcontractors by generally requiring that prime contractors agree to plans for subcontracting some percentage of the work to be performed under federal contracts with various types of small businesses. Without such subcontracting plans, or similar contract terms, prime contractors would generally be free to subcontract with whomever they wish for the completion of work under the contract and would not be required to deal with these categories of small businesses. The 111th Congress amended Section 8(d) to require that prime contractors with subcontracting plans make a “good faith effort” to work with the subcontractors whom they “used” in preparing their bids or proposals, and provide the contracting officer with a written explanation whenever they fail to do so (P.L. 111-240, §1322). The 2010 amendments also require that prime contractors notify the contracting officer in writing whenever they pay a “reduced price” to a subcontractor for completed work, or payment is more than 90 days past due (P.L. 111-240, §1334). The Small Business Administration is in the process of implementing these provisions of the 2010 act.


Date of Report: January 4, 2013
Number of Pages: 15
Order Number: R41230
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Location-Based Preferences in Federal and Federally Funded Contracting: An Overview

John R. Luckey
Legislative Attorney

Kate M. Manuel
Legislative Attorney

The recession of 2007-2009 and subsequent economic conditions have prompted interest among some Members of Congress and their constituents in legal authorities that could require or allow federal agencies to prefer contractors in one state or locality over those in other states or localities. Federal spending on procurement contracts has remained high, totaling $537.3 billion in FY2011, at a time when many other businesses have scaled back their purchases of goods and services. However, this spending has historically been localized in three to five states, which receive nearly half of all federal procurement dollars, prompting concerns about whether other states receive their “fair share.”

The federal government generally awards contracts to the lowest qualified responsible offeror, regardless of the offeror’s location. However, some provisions of federal law require or allow contracting agencies to favor vendors in certain localities. The main government-wide locationbased preferences are for (1) “local contractors” in areas affected by presidentially declared disasters or emergencies; (2) businesses in “labor surplus areas,” or areas with particularly high unemployment; and (3) small businesses in Historically Underutilized Business Zones (HUBZones), or census tracks, nonmetropolitan counties, or other areas with low household income or high unemployment. Federal agencies may conduct set-asides for, or grant evaluation preferences to, local contractors; use firms’ status as labor surplus area concerns, or willingness to locate facilities in labor surplus areas, as a tie-breaker in sealed bid procurements or an evaluation factor in certain negotiated procurements; and make special sole-source awards to, conduct setasides for, or grant price evaluation preferences to HUBZone small businesses. Other agencyspecific preferences also exist, such as those for “local private, nonprofit, or cooperative entities” under the Consolidated Appropriations Act, 2012 (P.L. 112-74).

There generally must be statutory authority for any geographic preference involving federal contracts or federally funded contracts. Such statutory preferences do not themselves deprive vendors outside the targeted area of equal protection in violation of the U.S. Constitution because classifications based on geography are subject to “rational basis review” and need only have a rational relationship to a legitimate government interest. However, absent congressional authorization, attempts by state or local governments to create location-based preferences for federally funded procurement contracts could run afoul of the constitutional prohibition on state or local legislation that burdens or discriminates against interstate commerce. Similar attempts by federal agencies to prefer vendors in certain locations without congressional authorization could be found to violate procurement integrity regulations, which require that government business be conducted “with complete impartiality and preferential treatment for none.” In addition, depending upon the nature of the preference granted, such attempts could also potentially be found to violate the Competition in Contracting Act (CICA) of 1984 by impermissibly restricting competition.


Date of Report: January 11, 2013
Number of Pages: 22
Order Number: R41115
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Responsibility Determinations Under the Federal Acquisition Regulation: Legal Standards and Procedures

Kate M. Manuel
Legislative Attorney

This report discusses the standards and procedures that federal agencies use in making responsibility determinations under the Federal Acquisition Regulation (FAR). As a general rule, government agencies contract with the lowest-priced (or best-value) qualified responsible bidder or offeror. Responsibility is an attribute of the contractor, while price and qualifications are attributes of the bid or offer. Under the FAR, “[n]o purchase or award shall be made unless the contracting officer makes an affirmative determination of responsibility.”

To be determined responsible, prospective contractors must meet general standards, which include so-called “collateral requirements.” These standards apply to all procurement contracts, even if they are not incorporated into the solicitation. They include the following seven criteria related to contractors’ capabilities and conduct: (1) adequate financial resources; (2) ability to comply with the delivery or performance schedule; (3) satisfactory performance record; (4) satisfactory record of integrity and business ethics; (5) necessary organization and experience; (6) necessary equipment and facilities; and (7) otherwise qualified and eligible. The seventh criterion—“otherwise qualified and eligible”—encompasses collateral requirements, or other provisions of law specifying when contractors are disqualified from or ineligible for awards.

Under current collateral requirements, contractors must be found nonresponsible when, among other things, they (1) do not comply with federal equal employment opportunity requirements; (2) fail to agree to an acceptable plan for subcontracting with small businesses; (3) are known government employees; (4) are quasi-military armed forces; or (5) have unavoidable and unmitigated organizational conflicts of interest. Unlike performance standards, which assess whether prospective contractors can be expected to complete the contract work in a timely and satisfactory manner, collateral requirements ensure that the government’s dealings with contractors promote socioeconomic goals.

In addition to the general standards, contractors may have to meet special standards, also known as “definitive criteria,” which apply only to specific acquisitions. Special standards must be expressly included in agencies’ solicitations. They are used when unusual expertise, special facilities, or specific experience or equipment are necessary to ensure that the government’s needs are satisfied.

Contracting officers determine prospective contractors’ responsibility prior to each contract award by considering information submitted by the contractor or otherwise acquired by the agency. When they lack sufficient information to determine that the contractor is responsible, they must make a determination of nonresponsibility. Contractors are generally not entitled to due process when contracting officers make a responsibility determination, meaning that they typically do not get notice of nonresponsibility determinations or an opportunity to present evidence regarding their responsibility.

Contracting officers have substantial discretion in making determinations, and judicial or other tribunals will generally hear protests regarding responsibility determinations only in limited circumstances. The Government Accountability Office, in particular, will only hear protests which allege that special standards (i.e., definitive criteria) were not met, or that identify evidence raising “serious concerns” that the contracting officer unreasonably failed to consider available relevant information or otherwise violated statute or regulation.


Date of Report: January 4, 2013
Number of Pages: 19
Order Number: R40633
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Competition in Federal Contracting: A Legal Overview

Kate M. Manuel
Legislative Attorney

Competition in federal procurement contracting has long been of interest to Congress and the executive branch, in part because of the belief that increased competition among potential vendors results in lower prices for the government. President Obama issued a memorandum calling for increased competition in federal contracting on March 4, 2009, shortly after taking office, and his Administration has sought to reduce the number of “noncompetitive” contracts by various means, including by issuing guidance on “Increasing Competition and Structuring Contracts for Best Results” in October 2009. Most recently, the Department of Defense (DOD), which generally accounts for nearly 70% of federal procurement spending per year, began implementing regulations that would promote competition by generally requiring contracting officers to re-solicit agency requirements if a solicitation allowed fewer than 30 days for the receipt of proposals and resulted in only one bid or offer.

The Competition in Contracting Act (CICA) of 1984 generally governs competition in federal procurement contracting. Any procurement contract not entered into through the use of procurement procedures expressly authorized by a particular statute is subject to CICA. CICA requires that contracts be entered into after “full and open competition through the use of competitive procedures” unless certain circumstances exist that would permit agencies to use noncompetitive procedures. Full and open competition can be obtained through the use of sealed bids, competitive proposals, or other procures defined as competitive under CICA (e.g., procurement of architectural or engineering services under the Brooks Act). Full and open competition under CICA also encompasses “full and open competition after exclusion of sources,” such as results when agencies engage in dual sourcing or set aside acquisitions for small businesses.

Any contract entered into without full and open competition is noncompetitive, but noncompetitive contracts can still be in compliance with CICA when circumstances permitting other than full and open competition exist. CICA recognizes seven such circumstances, including (1) single source for goods or services; (2) unusual and compelling urgency; (3) maintenance of the industrial base; (4) requirements of international agreements; (5) statutory authorization or acquisition of brand-name items for resale; (6) national security; and (7) contracts necessary in the public interest. CICA also allows agencies to use “special simplified procedures” when acquiring goods or services whose expected value is less than $150,000, or commercial goods or services whose expected value is less than $6.5 million ($12 million in emergencies).

Issuance of orders under task order and delivery order (TO/DO) contracts is not subject to CICA, although award of TO/DO contracts is. However, the Federal Acquisition Streamlining Act (FASA) of 1994 established a preference for multiple-award TO/DO contracts; required that agencies provide contractors “a fair opportunity” to compete for orders in excess of $3,000 under multiple-award contracts; and authorized the Government Accountability Office (GAO) to hear protests challenging the issuance of task or delivery orders that increase the scope, period, or maximum value of the underlying contract. The National Defense Authorization Act (NDAA) for FY2008 further limited the use of single-award TO/DO contracts. It also specified what constitutes a “fair opportunity to be considered” for orders in excess of $5.5 million under multiple-award contracts and granted GAO exclusive jurisdiction to hear protests of orders valued in excess of $10 million that do not increase the scope, period, or maximum value of the contract. This jurisdiction is permanent as to protests of defense agency contracts (P.L. 112-239), but only lasts through September 30, 2016, for protests of civilian agency contracts (P.L. 112-81).


Date of Report: January 11, 2013
Number of Pages: 26
Order Number: R40516
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