[House Report 115-402]
[From the U.S. Government Publishing Office]
115th Congress } { REPORT
HOUSE OF REPRESENTATIVES
1st Session } { 115-402
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FEDERAL ACQUISITION SAVINGS ACT OF 2017
_______
November 8, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Gowdy, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
[To accompany H.R. 3071]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 3071) to require executive agencies
to consider equipment rental in any cost-effectiveness analysis
for equipment acquisition, and for other purposes, having
considered the same, report favorably thereon without amendment
and recommend that the bill do pass.
CONTENTS
Page
Committee Statement and Views.................................... 1
Section-by-Section............................................... 3
Explanation of Amendments........................................ 3
Committee Consideration.......................................... 3
Roll Call Votes.................................................. 4
Application of Law to the Legislative Branch..................... 4
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 4
Statement of General Performance Goals and Objectives............ 4
Duplication of Federal Programs.................................. 4
Disclosure of Directed Rule Makings.............................. 4
Federal Advisory Committee Act................................... 4
Unfunded Mandates Statement...................................... 4
Earmark Identification........................................... 5
Committee Estimate............................................... 5
Budget Authority and Congressional Budget Office Cost Estimate... 5
Committee Statement and Views
PURPOSE AND SUMMARY
H.R. 3071, the Federal Acquisition Savings Act of 2017,
requires the federal government to analyze the cost
effectiveness of renting equipment compared to buying or
leasing such equipment and to revise the Federal Acquisition
Regulation (FAR) to implement this requirement. This bill also
requires the Government Accountability Office (GAO) to submit a
report to Congress two years after enactment on agency
decisions to acquire equipment by purchase, lease, or rental.
BACKGROUND AND NEED FOR LEGISLATION
In 2012, the GAO reported that agencies annually spent more
than $200 billion on average purchasing or leasing equipment,
with purchasing accounting for almost all of this spending.\1\
Current rules encourage agencies to assess the cost and
effectiveness of options to obtain equipment, but this analysis
is limited to comparing only purchasing versus leasing.\2\
Notably, the GAO found that agencies often fail to perform the
lease-versus-purchase analysis.\3\
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\1\Gov't Accountability Office, GAO-12-281R, Air Force and Interior
Can Benefit From Additional Guidance When Deciding Whether to Lease or
Purchase Equipment (2012).
\2\48 C.F.R subpart 7.4 (2017).
\3\Gov't Accountability Office, supra note 1.
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Beginning in 2013, there was an attempt to prompt a policy
change to reemphasize the need for cost effectiveness analysis
and consideration of the rental option. On July 16, 2013, the
General Services Administration (GSA) issued a Request For
Information (RFI) to examine whether there was a distinction
between leasing and renting of equipment that should be
considered in the FAR directed cost effectiveness analysis.\4\
However, GSA did not pursue further action after the RFI.
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\4\78 Fed. Reg. 42524 (July 16, 2013) (request for information).
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H.R. 3071 makes clear that agencies should consider a range
of options for obtaining equipment, to include purchasing,
leasing, and renting, by directing a change to the FAR. H.R.
3071 reemphasizes the need to perform cost effectiveness
analysis and include in this analysis the rental option. This
policy change is a significant opportunity for cost savings in
obtaining equipment.
Renting equipment can provide a more cost effective and
flexible alternative to buying or even leasing, which becomes
clear after analyzing these acquisition options. In purchasing
equipment, the purchaser makes a long-term investment and
assumes the total cost of ownership for the equipment. This is
appropriate in many cases.
However, there may be short-term needs that can be met with
acquisition solutions without assuming the total cost of
ownership that purchasing equipment requires. Instead of
purchasing, leasing or renting may offer better solutions.
It is important to consider the distinct attributes of
leasing and renting in considering equipment acquisition
options.\5\ In the case of leasing, there are defined leasing
periods--which can be years--and leases are specific to a
particular piece of equipment. Leasing may also require capital
to finance the lease whereas renting typically does not.
Further, the costs of maintenance, insurance, and storage are
typically the responsibility of the lessee and not the lessor.
In contrast to leasing, renting equipment may provide for a
temporary period with no fixed duration and is generally more
flexible. Typically, rental agreements will cover cost of
ownership, including storage, maintenance, insurance,
transport, and licensing. Renting may be a particularly cost
effective option when there will be low utilization rates for
the equipment.
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\5\Letter from Christine L. Wehrman, CEO/Executive Vice President,
American Rental Association, to the Honorable Daniel Tangherlini,
Acting Administrator, General Services Administration (June 14, 2012).
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State and local governments have used the equipment rental
option with great success, but the federal government has not
widely adopted it. For example, the Texas Department of
Transportation reported savings of $10.8 million due to a
rental program implemented by their Fleet Operations
Division.\6\ The Director of the Fleet Operations Division
reported renting more than 1,200 pieces of equipment at a cost
of $18.9 million and purchasing 931 assets at a cost of more
than $40 million.\7\ In Mississippi, the Department of
Transportation commissioned a study on its equipment management
processes and systems and found renting equipment to supplement
their fleet was the most cost effective option.\8\ The study
found Mississippi could realize over $13,000 in annual cost
savings and $180,000 in life-cycle cost savings per bulldozer
unit.\9\
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\6\Letter from Dalton Pratt, Director, Fleet Operations Division,
Texas Department of Transportation, to John W. McClelland, Vice
President Government Affairs and Chief Economist, American Rental
Association (May 19, 2017).
\7\Id.
\8\Dye Management Group, Inc., Equipment Management Review Final
Recommendation Report (Nov. 2013) (Report for the Mississippi
Department of Transportation).
\9\Id. at 27.
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LEGISLATIVE HISTORY
On June 27, 2017, Representative Earl L. ``Buddy'' Carter
(R-GA) introduced H.R. 3071, the Federal Acquisition Savings
Act of 2017, with Representatives James Himes (D-CT) and Glenn
Grothman (R-WI). H.R. 3071 was referred to the Committee on
Oversight and Government Reform. The Committee considered H.R.
3071 at a business meeting on September 13, 2017, and ordered
the bill reported favorably to the House, by voice vote.
Section-by-Section
Section 1. Short title
Section 1 establishes the short title of the bill.
Section 2. Cost-effectiveness analysis of equipment rental
Section 2 directs agencies to consider equipment rental in
any cost effectiveness analysis for equipment acquisitions
conducted 180 days after enactment, and requires the Federal
Acquisition Regulation (FAR) be updated accordingly. In
addition, Section 2 requires a GAO report on agency decisions
made to acquire equipment by purchase, lease, or renting
pursuant to the FAR.
Explanation of Amendments
There were no amendments to H.R. 3071 offered or adopted
during Committee consideration of the bill.
Committee Consideration
On September 13, 2017, the Committee met in open session
and, with a quorum being present, ordered the bill favorably
reported to the House, by voice vote.
Roll Call Votes
There were no roll call votes requested or conducted during
Full Committee consideration of H.R. 3071.
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 the terms and conditions of
employment or access to public services and accommodations.
This bill helps ensure the federal government makes cost
effective decisions in obtaining equipment by analyzing various
acquisition strategies. As such, this bill does not relate to
employment or access to public services and accommodations.
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.
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
goal or objective of this bill is to ensure the federal
government makes cost effective decisions in obtaining
equipment by analyzing various acquisition strategies.
Duplication of Federal Programs
In accordance with clause 2(c)(5) of rule XIII no provision
of this bill establishes or reauthorizes a program of the
Federal Government known to be duplicative of another Federal
program, a program that was included in any report from the
Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting this bill does not
direct the completion of any specific rule makings within the
meaning of section 551 or title 5, United States Code. However,
this bill does direct a revision of the Federal Acquisition
Regulation.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of Section 5(b) of the appendix to title 5,
United States Code.
Unfunded Mandates Statement
Pursuant to section 423 of the Congressional Budget and
Impoundment Control Act (Pub. L. 113-67) the Committee has
included a letter received from the Congressional Budget Office
below.
Earmark Identification
This bill does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI of the House of Representatives.
Committee Estimate
Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of
the House of Representatives, the Committee includes below a
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974.
New Budget Authority and Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the House of
Representatives, the cost estimate prepared by the
Congressional Budget Office and submitted pursuant to section
402 of the Congressional Budget Act of 1974 is as follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 4, 2017.
Hon. Trey Gowdy,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3071, the Federal
Acquisition Savings Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 3071--Federal Acquisition Savings Act of 2017
H.R. 3071 would amend the Federal Acquisition Regulation to
require agencies to consider equipment rental in any analysis
performed prior to acquiring a piece of equipment. The bill
also would require a report within two years by the Government
Accountability Office on equipment acquisitions. According to
the General Services Administration, agencies are already
required to consider purchasing or leasing when evaluating the
acquisition of equipment. This bill would clarify that renting
equipment is an acceptable method for acquiring equipment.
Because H.R. 3071 would not materially change how agencies
acquire equipment, CBO estimates that implementing H.R. 3071
would have no significant effect on the federal budget.
H.R. 3071 could affect direct spending by agencies not
funded through annual appropriations; therefore, pay-as-you-go
procedures apply. CBO estimates, however, that any net increase
in spending by those agencies would not be significant.
Enacting H.R. 3071 would not affect revenues.
CBO estimates that enacting H.R. 3071 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
H.R. 3071 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Matthew
Pickford. This estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
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