[House Report 111-588]
[From the U.S. Government Publishing Office]
111th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 111-588
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OVERSEAS CONTRACTOR REFORM ACT
_______
September 14, 2010.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Towns, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
[To accompany H.R. 5366]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 5366) to require the proposal for
debarment from contracting with the Federal Government of
persons violating the Foreign Corrupt Practices Act of 1977,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Legislative History.............................................. 2
Section-by-Section............................................... 2
Explanation of Amendments........................................ 3
Committee Consideration.......................................... 3
Rollcall Votes................................................... 3
Application of Law to the Legislative Branch..................... 3
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 3
Statement of General Performance Goals and Objectives............ 3
Constitutional Authority Statement............................... 3
Federal Advisory Committee Act................................... 4
Unfunded Mandate Statement....................................... 4
Earmark Identification........................................... 4
Committee Estimate............................................... 4
Budget Authority and Congressional Budget Office Cost Estimate... 4
Changes in Existing Law Made by the Bill, as Reported............ 5
PURPOSE AND SUMMARY
H.R. 5366, the ``Overseas Contractor Reform Act,'' was
introduced by Rep. Peter Welch on May 20, 2010. The legislation
would require any person convicted of violating the Foreign
Corrupt Practices Act of 1977 (FCPA) to be proposed for
debarment from any further contracts or grants with the federal
government. Furthermore, the legislation makes it federal
policy that no contracts or grants should be awarded to any
individuals or companies who violate the FCPA.
H.R. 5366 requires that any person (defined as any
individual, partnership, or corporation), found to be in
violation of the FCPA be proposed for debarment from any
federal contracts or grants within 30 days after final judgment
of the violation. The legislation defines ``final judgment'' as
occurring when all appeals of the judgment have been determined
or all the time for filing such appeals has expired. The
legislation also authorizes the head of a federal agency to
issue a waiver, but the agency head must justify the decision
and report the waiver and accompanying justification to
Congress within 30 days.
BACKGROUND AND NEED FOR LEGISLATION
Federal government contractors have used bribes in the past
to influence the actions of foreign governments. The source of
these bribes in part is American tax dollars paid by the
federal government to contractors. This bill seeks to root out
companies which tarnish the image of the United States of
America by engaging in illegal activities.
LEGISLATIVE HISTORY
H.R. 5366, the ``Overseas Contractor Reform Act,'' was
introduced by Rep. Peter Welch on May 20, 2010, and referred to
the House Committee on Oversight and Government Reform. The
Committee met in open session and ordered H.R. 5366 to be
reported favorably to the House by a voice vote.
SECTION-BY-SECTION
Section 1: Short title
The short title of the bill is the Overseas Contractor
Reform Act.
Section 2: Requirement to propose for debarment persons violating the
Foreign Corrupt Practices Act
This section would require any person found to be in
violation of the Foreign Corrupt Practices Act of 1977 (FCPA)
to be proposed for debarment, unless the requirement was waived
by the head of the federal agency concerned.
The proposed debarment would be from any contract or grant
awarded by the federal government within 30 days after a final
judgment finding violation of the FCPA. This section also
defines all applicable waivers for this bill. The head of a
federal agency may waive the proposal for debarment requirement
for a federal contract or grant, however, any waiver shall be
reported to Congress by the head of the agency concerned within
30 days from the date of the waiver, along with an accompanying
justification for the waiver.
This section defines the term ``final judgment'' as when
all appeals of the judgment have been finally determined, or
all time for filing such appeals has expired.
This section defines a ``contract'' as a binding agreement
entered into by a federal agency for the purpose of obtaining
property or services.
This section defines ``person'' as any: individual;
partnership; and corporation.
This section also defines the FCPA to include: section 30A
of the Securities Exchange Act of 1934 (15 U.S.C. 78dd-1); and
sections 104 and 104A of the FCPA (15 U.S.C. 78dd-2).
Section 3: Government policy
This section makes it the policy of the United States
government that no government contracts or grants should be
awarded to individuals or companies who violate the Foreign
Corrupt Practices Act of 1977.
EXPLANATION OF AMENDMENTS
Not applicable; no amendments.
COMMITTEE CONSIDERATION
The Committee on Oversight and Government Reform held a
markup of the bill on July 28, 2010. The Committee ordered the
bill to be reported favorably by a voice vote.
ROLLCALL VOTES
No roll call votes were taken.
APPLICATION OF LAW TO THE LEGISLATIVE BRANCH
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to terms and conditions of
employment or access to public services and accommodations.
This legislation does not apply to the legislative branch.
STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report including the need to prevent individuals who
violate the FCPA from receiving federal contracts.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report, including the legislation's requirement for a
proposal for debarment from contracting with the federal
government of any person found in violation of the Foreign
Corrupt Practices Act of 1977 to reduce waste, fraud, and abuse
in the federal procurement system.
CONSTITUTIONAL AUTHORITY STATEMENT
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress to enact the law
proposed by H.R. 5366. Article I, Section 8, Clause 18 of the
Constitution of the United States grants the Congress the power
to enact this law.
FEDERAL ADVISORY COMMITTEE ACT
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the meaning of 5 U.S.C. App., Section 5(b).
UNFUNDED MANDATE STATEMENT
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement on
whether the provisions of the report include unfunded mandates.
In compliance with this requirement the Committee has received
a letter from the Congressional Budget Office included herein.
EARMARK IDENTIFICATION
H.R. 5366 does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(e), 9(f), or 9(g) of rule XXI.
COMMITTEE ESTIMATE
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 5366. However, clause 3(d)(3)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act.
BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 5366 from the Director of
the Congressional Budget Office:
August 10, 2010.
Hon. Edolphus Towns,
Chairman, Committee on Oversight and Government Reform,
U.S. House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5366, the Overseas
Contractor Reform Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 5366--Overseas Contractor Reform Act
H.R. 5366 would amend federal law to require that any
individual, partnership, or corporation found to be in
violation of the Foreign Corrupt Practices Act of 1977 (FCPA)
be suspended from receiving any federal contract or grant. That
action would be required within 30 days after the final
judgment of such a violation. Agencies could waive this
provision for particular federal contracts or grants and would
have to report such waivers to the Congress within 30 days. In
addition, the legislation declares it to be the policy of the
U.S. government that no contract or grant should be awarded to
individuals or companies that violate the FCPA.
CBO expects that this bill would apply only to a small
number of individuals and entities subject to FCPA enforcement
actions that are settled through judicial proceedings.
Consequently, we estimate that implementing the legislation
would have no significant impact on the federal budget.
Enacting the bill would not affect direct spending or revenues;
therefore, pay-as-you-go procedures do not apply.
H.R. 5366 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by Theresa Gullo, Deputy
Assistant Director for Budget Analysis.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
There are no changes to existing law in this bill.