Nsf Major Research Facility Reform Act of 2016
Floor Speech
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Mr. LOUDERMILK. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5049) to provide for improved management and oversight of major multi-user research facilities funded by the National Science Foundation, to ensure transparency and accountability of construction and management costs, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 5049
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``NSF Major Research Facility Reform Act of 2016''. SEC. 2. DEFINITIONS.
In this Act:
(1) Director.--The term ``Director'' means the Director of the Foundation.
(2) Foundation.--The term ``Foundation'' means the National Science Foundation established under section 2 of the National Science Foundation Act of 1950 (42 U.S.C. 1861).
(3) Major multi-user research facility.--The term ``major multi-user research facility'' means a science and engineering infrastructure construction project that exceeds the lesser of 10 percent of a Directorate's annual budget or $100,000,000 in total project cost that is funded in the major research equipment and facilities construction account, or any successor thereto. SEC. 3. MANAGEMENT AND OVERSIGHT OF LARGE FACILITIES.
(a) Large Facilities Office.--The Director shall maintain a Large Facilities Office. The functions of the Large Facilities Office shall be to support the research directorates in the development, implementation, and assessment of major multi-user research facilities, including by--
(1) serving as the Foundation's primary resource for all policy or process issues related to the development and implementation of major multi-user research facilities;
(2) serving as a Foundation-wide resource on project management, including providing expert assistance on nonscientific and nontechnical aspects of project planning, budgeting, implementation, management, and oversight;
(3) coordinating and collaborating with research directorates to share best management practices and lessons learned from prior projects; and
(4) assessing projects during preconstruction and construction phases for cost and schedule risk.
(b) Oversight of Large Facilities.--The Director shall appoint a senior agency official as head of the Large Facilities Office whose responsibility is oversight of the development, construction, and transfer to operations of major multi-user research facilities across the Foundation.
(c) Policies for Large Facility Costs.--
(1) In general.--The Director shall ensure that the Foundation's polices for developing and maintaining major multi-user research facility construction costs are consistent with the best practices described in the March 2009 Government Accountability Office Report GAO-09-3SP, or any successor report thereto, the Uniform Guidance in 2 C.F.R. part 200, and the Federal Acquisition Regulation as appropriate.
(2) Cost proposal analysis.--
(A) General requirement.--The Director shall ensure that an external cost proposal analysis is conducted for any major multi-user research facility.
(B) Resolution of issues found.--The Director, or a senior agency official within the Office of the Director designated by the Director, shall certify in writing that all issues identified during the cost analysis, including any findings of unjustified or questionable cost items, are resolved before the Foundation may execute a construction agreement with respect to the project.
(C) Transmittal to congress.--The Director shall transmit each certification made under subparagraph (B) to the Committee on Science, Space, and Technology of the House of Representatives, the Committee on Commerce, Science, and Transportation of the Senate, the Committee on Appropriations of the House of Representatives, and the Committee on Appropriations of the Senate.
(3) Incurred cost audits.--The Director shall ensure that an incurred cost audit is conducted at least biennially on any major multi-user research facility, in accordance with Government Auditing Standards as established in Government Accountability Office Report GAO-12-331G, or any successor report thereto, with the first incurred cost audit to commence no later than 12 months after execution of the construction agreement.
(4) Contingencies.--
(A) In general.--Except as provided for in subparagraph (C)(ii), the Foundation shall--
(i) provide oversight for contingency in accordance with Cost Principles Uniform Guidance in 2 C.F.R. part 200.433, or any successor thereto, and the Federal Acquisition Regulation as appropriate, except as provided in this paragraph; and
(ii) not make any award which provides for contributions to a contingency reserve held or managed by the awardee, as defined in 2 C.F.R. part 200.433(c).
(B) Updating policy manual.--The Foundation shall update its Large Facilities Manual and any other applicable guidance for contingencies on major multi-user research facilities with regard to estimating, monitoring, and accounting for contingency.
(C) Foundation requirements.--The policy updated under subparagraph (B) shall require that the Foundation--
(i) may only include contingency amounts in an award in accordance with Cost Principles Uniform Guidance in 2 C.F.R. part 200.433, or any successor thereto, and the Federal Acquisition Regulation as appropriate; and
(ii) shall retain control over funds budgeted for contingency, but may disburse budgeted contingency funds incrementally to the awardee to ensure project stability and continuity.
(D) Awardee requirements.--The policy updated under subparagraph (B) shall require that an awardee shall--
(i) provide verifiable documentation to support any amounts proposed for contingencies; and
(ii) support requests for the release of contingency funds with evidence of a bona fide need and that the amounts allocated to the performance baseline are reasonable and allowable.
(E) Current awardees.--The Foundation shall work with awardees for whom awards with contingency provisions have been made before the date of enactment of this Act--
(i) to determine if any of their use of contingency funds represents out-of-scope changes for which Foundation's prior written approval was not obtained; and
(ii) if out-of-scope changes are found, to identify any financial action that may be appropriate.
(5) Management fees.--
(A) Definition.--In this paragraph, the term ``management fee'' means a portion of an award made by the Foundation for the purpose of covering ordinary and legitimate business expenses necessary to maintain operational stability which are not otherwise allowable under Cost Principles Uniform Guidance in 2 C.F.R. part 200, Subpart E, or any successor regulation thereto.
(B) Limitation.--The Foundation may provide a management fee under an award only if the awardee provides justification as to the need for such funds. In such cases, the Foundation shall take into account the awardee's overall financial circumstances when determining the amount of the fee if justified.
(C) Financial information.--The Foundation shall require award applicants to provide income and financial information covering a period of no less than 3 prior years (or in the case of an entity established less than 3 years prior to the entity's application date, the period beginning on the date of establishment and ending on the application date), including cash on hand and net asset information, in support of a request for management fees. The Foundation shall also require awardees to report to the Foundation annually any sources of non-Federal funds received in excess of $50,000 during the award period.
(D) Expense reporting.--The Foundation shall require awardees to track and report to the Foundation annually all expenses reimbursed or otherwise paid for with management fee funds, in accordance with Federal accounting practices as established in Government Accountability Office Report GAO- 12-331G, or any successor report thereto.
(E) Audits.--The Inspector General of the Foundation may audit any Foundation award for compliance with this paragraph.
(F) Prohibited uses.--An awardee may not use management fees for--
(i) costs allowable under Cost Principles Uniform Guidance in 2 C.F.R. part 200, Subpart E, or any successor regulation thereto;
(ii) alcoholic beverages;
(iii) tickets to concerts, sporting, or other entertainment events;
(iv) vacation or other travel for nonbusiness purposes;
(v) charitable contributions, except for a charitable contribution of direct benefit to the project or activity supported by the management fee;
(vi) social or sporting club memberships;
(vii) meals or entertainment for nonbusiness purposes;
(viii) luxury or personal items;
(ix) lobbying, as described in the Uniform Guidance at 2 C.F.R. 200.450; or
(x) any other purpose the Foundation determines is inappropriate.
(G) Review.--The Foundation shall review management fee usage for each Foundation award on at least an annual basis for compliance with this paragraph and the Foundation's Large Facilities Manual.
(6) Report.--Not later than 12 months after the date of enactment of this Act, the Director shall submit to Congress a report describing the Foundation's policies for developing and managing major multi-user research facility construction costs, including a description of any aspects of the policies that diverge from the best practices recommended in Government Accountability Office Report GAO-09-3SP, or any successor report thereto, and the Uniform Guidance in 2 C.F.R. part 200.
(7) Noncompliance.--The Director shall ensure that the Foundation shall take the enforcement actions specified in 45 C.F.R. 92.43 for noncompliance with this section. SEC. 4. WHISTLEBLOWER EDUCATION.
(a) In General.--The Foundation shall be subject to section 4712 of title 41, United States Code.
(b) Education and Training.--The Foundation shall provide education and training for Foundation managers and staff on the requirements of such section 4712, and provide information on such section to all awardees, contractors, and employees of such awardees and contractors.
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Mr. LOUDERMILK. 5049, the bill now under consideration.
I am pleased to sponsor H.R. 5049, the NSF Major Research Facility Reform Act of 2016, to improve the management and oversight of major multi-user research facilities that are funded by the National Science Foundation and to ensure that taxpayer dollars are spent with transparency and accountability.
The NSF funds a variety of large research projects through cooperative agreements, including multi-user research facilities, tools for research and education, and instrumentation networks. Current construction projects underway include the Large Synoptic Survey Telescope, the Daniel Inouye Solar Telescope, and the National Ecological Observatory Network, otherwise known as NEON. These 5- to 10-year construction projects range from $350 million to $500 million in total project cost. The proper stewardship of taxpayer dollars is paramount when executing projects of this magnitude.
The Committee on Science, Space, and Technology held a number of hearings over the last year and a half on these large research projects, including several on the NEON Project, after learning about the mismanagement of appropriated funds. Specifically, the hearings discussed the findings of two financial audits. One of those audits discovered that NEON was allowed to use Federal taxpayer dollars for explicitly unallowable costs, including liquor, lobbying, and a lavish holiday party.
Both audits of the NEON Project were initiated by the NSF inspector general due to concerns about the lack of review of costs by the NSF. In addition, the IG had concerns about the NSF's accounting financial controls of major research facilities prior to entering into cooperative agreements. The IG's work, combined with the oversight of this committee's, resulted in the National Academy of Public Administration's, also known as NAPA, conducting a commissioned review of the NSF's management of cooperative agreements.
The bill I bring to the floor today is a product of many recommendations that were made by the NSF IG, the auditors, NAPA, and the Committee on Science, Space, and Technology.
First, the bill enhances the role of the NSF Large Facilities Office in project management, giving it statutory permanence and ensuring that expert management staff at the NSF work with scientific program staff throughout all phases of project development and construction. It also requires a senior agency official to have responsibility for the oversight of the office.
Second, the bill requires the NSF to commission an external cost proposal analysis for all major multi-user research facilities with a total project cost of over $100 million. This will ensure that proposed construction budgets are reasonable while allowing the NSF and the awardee to address all cost issues before construction begins. This small investment at the beginning of the award will pay off in savings for the life of the construction project.
Third, the bill requires an incurred cost audit at least every 2 years during construction, starting 1 year after the execution of the agreement. These regular audits will help ensure that a project is on track and will detect problems while something can still be done to remedy the problem, not after the project is well on its way to being over budget or is already complete.
Fourth, the bill increases agency control over project contingency funds by requiring the NSF to retain the majority of the funds rather than the awardee. Reflecting the input of many stakeholders, the bill allows the NSF to disburse contingency funds incrementally to the awardee to allow for project continuity and stability. Contingency expenditures must be supported by verifiable cost data, and the awardee must record and report all contingency expenditures to the NSF.
Next, the bill closes loopholes for the use of management fees, codifying regulations that the NSF has recently put into place to ensure taxpayer funds are never abused again. This prohibition includes alcohol, concert tickets, unnecessary travel, and lobbying. The bill also requires awardees to demonstrate a financial need to justify management fees which are included as part of the award.
Finally, the bill has a provision that supports the education of the NSF grant awardees and their employees on the law that protects whistleblowers. It was thanks to a whistleblower auditor that many of the issues with the NEON Project were brought to light.
As a former small business owner and as the former director of a nonprofit, I, wholeheartedly, understand the importance of accountability. The fact that the NSF is mishandling American taxpayer dollars, with little consequence, is inexcusable. What is even more inexcusable is that the NSF has received warnings about this kind of irresponsible spending over the past 4 years, and it has not taken adequate measures to resolve the matter.
This bill will ensure that the NSF makes the systematic changes necessary to restore confidence in federally funded research projects and that taxpayers can trust us with their money in their knowing that it will be spent in the manner it was intended.
I thank Chairman Smith for his support in moving this bill forward, and I ask my colleagues to join me in passing these commonsense reforms.
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Mr. LOUDERMILK. Mr. Speaker, I urge my colleagues to support this strong bipartisan measure.
I yield back the balance of my time.
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Mr. LOUDERMILK. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
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