S. 594 would extend the length of time that the Department of Homeland Security (DHS) may enter into noncompetitive contracts following disasters and other emergencies. Under the Post-Katrina Emergency Management Reform Act of 2006, DHS is generally prohibited from entering into those types of contracts for a duration greater than 150 days. S. 594 would repeal that limitation and allow DHS to enter into such contracts for up to one year (the general limit on noncompetitive contracts). The bill also would require DHS to report to the Congress, within two years of enactment and annually thereafter for five years, on the details of noncompetitive contracts entered into by the department, and on the extent to which the repeal of the limitation results in any savings to the government or prevents waste, fraud, or abuse.

Based on the cost of similar reporting requirements, CBO estimates that the required reports would cost less than $500,000 over the 2025-2030 period; any spending would be subject to the availability of appropriated funds.

CBO also estimates that implementing S. 594 would reduce some administrative and contracting costs for DHS; those reductions would total less than $500,000 over the 2025‑2030 period. Under current law, DHS can extend the duration of the affected contracts beyond 150 days if the department certifies that exceptional circumstances justify doing so; that process typically takes several days. By allowing contracts to exceed the current limit, CBO expects that the bill would eliminate the need for agency employees to perform that certification. In addition, based on conversations with DHS officials and private-sector experts in the disaster response industry, CBO expects that, on net, the bill could reduce the cost of some contracts because contractors might be willing to bid prices that are marginally lower when the period of a contract is longer. Those savings would be offset to the extent that contractors charge higher amounts to cover their fixed costs in cases where the duration of work is shorter than originally contracted for. Any savings would depend on reductions in future appropriations by the estimated amount.

The CBO staff contact for this estimate is Jon Sperl. The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.