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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle D--Contractor Matters

P. L. 111-

Joint Explanatory Statement of the Committees on Armed Services of the U. S. Senate and House of Representatives on H. R. 6523

From H. R. 6523

SEC. 834. ENHANCEMENTS OF AUTHORITY OF SECRETARY OF DEFENSE TO REDUCE OR DENY AWARD FEES TO COMPANIES FOUND TO JEOPARDIZE THE HEALTH OR SAFETY OF GOVERNMENT PERSONNEL.

(a) Expansion of Dispositions Subject to Authority- Section 823 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84; 123 Stat. 2412; 10 U.S.C. 2302 note) is amended--

(1) in subsection (c), by adding at the end the following new paragraph:

`(5) In an administrative proceeding, a final determination of contractor fault by the Secretary of Defense pursuant to subsection (d).';

(2) by redesignating subsections (d) and (e) as subsections (e) and (f), respectively; and

(3) by inserting after subsection (c) the following new subsection (d):

`(d) Determinations of Contractor Fault by Secretary of Defense-

`(1) IN GENERAL- In any case described by paragraph (2), the Secretary of Defense shall--

`(A) provide for an expeditious independent investigation of the causes of the serious bodily injury or death alleged to have been caused by the contractor as described in that paragraph; and

`(B) make a final determination, pursuant to procedures established by the Secretary for purposes of this subsection, whether the contractor, in the performance of a covered contract, caused such serious bodily injury or death through gross negligence or with reckless disregard for the safety of civilian or military personnel of the Government.

`(2) COVERED CASES- A case described in this paragraph is any case in which the Secretary has reason to believe that--

`(A) a contractor, in the performance of a covered contract, may have caused the serious bodily injury or death of any civilian or military personnel of the Government; and

`(B) such contractor is not subject to the jurisdiction of United States courts.

`(3) CONSTRUCTION OF DETERMINATION- A final determination under this subsection may be used only for the purpose of evaluating contractor performance, and shall not be determinative of fault for any other purpose.'.

(b) Definition of Contractor- Paragraph (1) of subsection (e) of such section, as redesignated by subsection (a)(2) of this section, is amended to read as follows:

`(1) The term `contractor' means a company awarded a covered contract and a subcontractor at any tier under such contract.'.

(c) Technical Amendment- Subsection (c) of such section is further amended in the matter preceding paragraph (1) by striking `subsection (a)' and inserting `subsection (b)'.

(d) Inclusion of Determinations of Contractor Fault in Database for Federal Agency Contract and Grant Officers and Suspension and Debarment Officials- Section 872(c)(1) of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Public Law 110-417; 122 Stat. 4556) is amended by adding at the end the following new subparagraph:

`(E) In an administrative proceeding, a final determination of contractor fault by the Secretary of Defense pursuant to section 823(d) of the National Defense Authorization Act for Fiscal Year 2010 (10 U.S.C. 2302 note).'.

(e) Effective Date- The requirements of section 823 of the National Defense Authorization Act for Fiscal Year 2010, as amended by subsections (a) through (c), shall apply with respect to the following:

(1) Any contract entered into on or after the date of the enactment of this Act.

(2) Any task order or delivery order issued on or after the date of the enactment of this Act under a contract entered into before, on, or after that date.

From S. 3454, National Defense Authorization Act for Fiscal Year 2011

SEC. 843. ENHANCEMENTS OF AUTHORITY OF SECRETARY OF DEFENSE TO REDUCE OR DENY AWARD FEES TO COMPANIES FOUND TO JEOPARDIZE THE HEALTH OR SAFETY OF GOVERNMENT PERSONNEL.

(a) Expansion of Dispositions Subject to Authority- Section 823 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84; 123 Stat. 2412; 10 U.S.C. 2302 note) is amended--

(1) in subsection (c), by adding at the end the following new paragraph:

`(5) A final determination of contractor fault by the Secretary of Defense pursuant to subsection (d).';

(2) by redesignating subsections (d) and (e) as subsections (e) and (f), respectively; and

(3) by inserting after subsection (c) the following new subsection (d):

`(d) Determinations of Contractor Fault by Secretary of Defense-

`(1) IN GENERAL- In any case described by paragraph (2), the Secretary of Defense shall--

`(A) provide for an expeditious independent investigation of the causes of the serious bodily injury or death alleged to have been caused by the contractor as described in that paragraph; and

`(B) make a final determination, pursuant to procedures established by the Secretary for purposes of this subsection, whether the contractor, in the performance of a covered contract, caused such serious bodily injury or death through gross negligence or with reckless disregard for the safety of civilian or military personnel of the Government.

`(2) COVERED CASES- A case described in this paragraph is any case in which the Secretary has reason to believe that a contractor, in the performance of a covered contract, may have caused the serious bodily injury or death of any civilian or military personnel of the Government.

`(3) CONSTRUCTION OF DETERMINATION- A final determination under this subsection may be used only for the purpose of evaluating contractor performance, and shall not be determinative of fault for any other purpose.'.

(b) Definition of Contractor- Paragraph (1) of subsection (e) of such section, as redesignated by subsection (a)(2) of this section, is amended to read as follows:

`(1) The term `contractor' means a company awarded a covered contract and a subcontractor at any tier under such contract.'.

(c) Technical Amendment- Subsection (c) of such section is further amended in the matter preceding paragraph (1) by striking `subsection (a)' and inserting `subsection (b)'.

(d) Inclusion of Determinations of Contractor Fault in Database for Federal Agency Contract and Grant Officers and Suspension and Debarment Officials- Section 872(c)(1) of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Public Law 110-417; 122 Stat. 4556) is amended by adding at the end the following new subparagraph:

`(E) A final determination of contractor fault by the Secretary of Defense pursuant to section 823(d) of the National Defense Authorization Act for Fiscal Year 2010 (10 U.S.C. 2302 note).'.

(e) Effective Date- The requirements of section 823 of the National Defense Authorization Act for Fiscal Year 2010, as amended by subsections (a) through (c), shall apply with respect to the following:

(1) Any contract entered into on or after the date of the enactment of this Act.

(2) Any task order or delivery order awarded on or after the date of the enactment of this Act under a contract entered into before, on, or after that date.

The Senate committee-reported bill contained a provision (sec. 843) that would establish a process pursuant to which conduct by a contractor which results in the death or serious injury of U.S. Government personnel may be considered in the evaluation of contractor performance even in the absence of a judicial determination of fault.

The House bill contained no similar provision.

The agreement includes the Senate provision with an amendment clarifying that the process may be used only where the Secretary has reason to believe that the contractor‟s action is not subject to the jurisdiction of United States courts.

From S. Rpt. 111-201, to accompany S. 3454, NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2011

Enhancements of authority of Secretary of Defense to reduce or deny award fees to companies found to jeopardize the health or safety of Government personnel (sec. 843)

The committee recommends a provision that would amend section 823 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84) to authorize the Secretary of Defense to make determinations of fault in cases where the Secretary has reason to believe that a contractor, in the performance of a contract, may have caused the serious bodily injury or death of civilian or military personnel of the Department of Defense (DOD). If the Secretary finds that a contractor caused the death or serious injury through gross negligence or with reckless disregard for the safety of such personnel, this determination may be considered in award fee determinations under section 823, and in past performance evaluations and assessments of contractor responsibility under section 872 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Public Law 110-417). A determination by the Secretary under this section would not be determinative of fault for any other purpose.

The committee anticipates that investigations under this provision would be conducted pursuant to existing Department of Defense procedures for administrative fact-finding investigations, such as those provided by Army Regulation 15-6 and the Manual of the Judge Advocate General (JAGMAN) of the Navy. The committee understands that a contractor would have the same right to challenge award fee determinations, past performance evaluations, and assessments of contractor responsibility that are made on the basis of a determination under this section as they currently have to challenge determinations, evaluations, and assessments that are made on any other basis.

Under current law, a case of death or injury to civilian or military personnel may be excluded from consideration under section 823 because the U.S. courts lack jurisdiction to make a determination of fault, or because the contractor is immune from a civil action in the case. The committee concludes that conduct resulting in the death or serious injury of U.S. Government personnel should be considered in the evaluation of contractor performance, regardless whether such conduct is justiciable in the United States courts.