S.Amdt. 1547

SA 1547. Mr. PAUL submitted an amendment intended to be proposed to
amendment SA 1463 proposed by Mr. McCain to the bill H.R. 1735, to
authorize appropriations for fiscal year 2016 for military activities
of the Department of Defense and for military construction, to
prescribe military personnel strengths for such fiscal year, and for
other purposes; which was ordered to lie on the table; as follows:
At the appropriate place, insert the following:

Subtitle __--Bonuses for Cost-cutting Contracting

SEC. __. PREFERENCE FOR COST-CUTTING DEFENSE CONTRACTORS.

(a) In General.--Not later than 180 days after the date of
the enactment of this Act, the Defense Supplement to the
Federal Acquisition Regulation shall be revised to establish
a preference for the use by the Department of Defense of
contractors with an established record of completing
contracts under budget. The regulations as so revised shall
provide that, in the evaluation of bids for a contract, the
bid from a contractor that has achieved an average cost
savings for its last three completed Department of Defense
contracts within a contract cost category described under
subsection (b) shall be discounted as provided under
subsection (c) for purposes of price comparison.
(b) Contract Cost Categories.--For purposes of this
section, contract cost categories for total contract awards
are as follows:
(1) Under $1,000,000.
(2) Greater than or equal to $1,000,000 and less than
$5,000,000.
(3) Greater than or equal to $5,000,000 and less than
$10,000,000.
(4) Greater than or equal to $10,000,000 and less than
$25,000,000.
(5) Greater than or equal to $25,000,000 and less than
$50,000,000.
(6) Greater than or equal to $50,000,000 and less than
$100,000,000
(7) Greater than or equal to $100,000,000.
(c) Calculation of Discount.--
(1) Contract savings within same or higher contract cost
category.--A bid for a contract shall be discounted pursuant
to subsection (a) by an amount equal to the average
percentage cost savings of the last three completed
Department of Defense contracts within a contract cost
category if such contract cost category is the same as or
higher than the contract cost category of the contract that
is being bid upon.
(2) Contract savings within lower contract cost category.--
A bid for a contract shall be discounted pursuant to
subsection (a) by an amount equal to the average cost savings
of the last three completed Department of Defense contracts
within a contract cost category if such contract cost
category is lower than the contract cost category of the
contract that is being bid upon.
(3) Special rule for contracts equal to or greater than
$100,000,000.--In the case of a bid for a contract in the
contract cost category set forth in subsection (b)(7), the
bid shall be discounted pursuant to subsection (a)--
(A) by an amount equal to the average cost savings of the
last three completed Department of Defense contracts if--
(i) the contract cost category for such contracts is lower
than such contract cost category; or
(ii) the contract cost category for such contracts is the
same as the contract being bid upon, but the average value of
such contracts is less than the lower of--

(I) 75 percent of the value of the contract being bid upon;
or
(II) the amount equal to the value of such contract minus
$50,000,000; or

(B) by an amount equal to the average percentage cost
savings of the last three completed Department of Defense
contracts within the same contract cost category if the
average value of such contracts is equal to or greater than--
(i) 75 percent of the value of the contract being bid upon;
or
(ii) the amount equal to the value of such contract minus
$50,000,000.

SEC. __. USE OF FUNDS SAVED THROUGH CONTRACT SAVINGS.

(a) In General.--The Secretary of Defense shall ensure
that, of the total amount saved by the Department of Defense
on a contract completed after the date of the enactment of
this Act as a result of the contract costing less than the
amount bid by the contractor--
(1) 50 percent shall be awarded to the contractor; and
(2) 50 percent shall be deposited in the Treasury and used
for deficit reduction.
(b) Certification Requirement.--
(1) In general.--The head of the agency awarding a contract
described under subsection (a) shall certify that the savings
achieved under the contract were not the result of any
degradation in the quality of the goods or services provided
under the contract before any funds are distributed under
such subsection.
(2) Head of an agency defined.--In this section, the term
``head of an agency'' has the meaning given the term in
section 2302(1) of title 10, United States Code.
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