TO PROVIDE FOR EMERGENCY RELIEF FOR SMALL BUSI- SEPTEMBER 17 (legislative day, SEPTEMBER 11), 1975.-Ordered to be printed 57-010 U.S. GOVERNMENT PRINTING OFFICE CONTENTS I. Purpose and summary. V. Estimated cost of legislation. Office of Management and Budget letter to the Com- (III) SEPTEMBER 17 (legislative day, SEPTEMBER 11), 1975.-Ordered to be printed Mr. CHILES, from the Committee on Government Operations, REPORT [To accompany S. 1259] The Committee on Government Operations, to which was referred the bill (S. 1259) to provide for emergency relief for small business concerns in connection with fixed-price Government contracts having considered the same, reports favorably thereon with an amendment and recommends that the bill do pass. I. PURPOSE AND SUMMARY The purpose of the bill is to provide relief to small business concerns caught in the economic squeeze between fixed-price Federal contract commitments and soaring costs of material, supplies and energy. This bill would grant executive agencies the latitude to terminate for the convenience of the government any fixed-price contract between that agency and a small business concern upon a finding that (1) during the performance of the contract, the concern has experienced or is experiencing significant unanticipated cost increases directly related to the contract; and (2) the conditions which have caused or are causing such cost increases were, or are being, experienced generally by other small business concerns in the market at the same time and are not caused by negligence, underbidding, or other special management factors peculiar to that small business concern. II. NEED FOR THE LEGISLATION During the period from mid-1971 until early 1974, executive agencies required contractors to submit proposals on the basis of some phase of price controls. Escalation factors were not included in most contracts and material contingencies exceeding the President's guidelines were frowned upon. Since that time all controls have been lifted and, |