SECTION 1. DEPUTY SECRETARY OF DEFENSE FOR MANAGEMENT.

    (a) Establishment.--
            (1) Position and duties.--
                    (A) Chapter 4 of title 10, United States Code, is 
                amended--
                            (i) in section 131(b), by striking 
                        paragraph (1) and inserting the following new 
                        paragraph:
            ``(1) Two Deputy Secretaries of Defense, as follows:
                    ``(A) The Deputy Secretary of Defense.
                    ``(B) The Deputy Secretary of Defense for 
                Management.''; and
                            (ii) by inserting after section 132 the 
                        following new section 132a:
``SECTION 132a. Deputy Secretary of Defense for Management
    ``(a) Establishment.--(1) There is a Deputy Secretary of Defense 
for Management, appointed from civilian life by the President, by and 
with the advice and consent of the Senate, from among persons who 
have--
            ``(A) extensive executive level leadership and management 
        experience in the private or public sector;
            ``(B) strong leadership skills;
            ``(C) a demonstrated ability to manage large and complex 
        organizations; and
            ``(D) a record of achieving positive operational results.
    ``(2) A person may not be appointed as Deputy Secretary of Defense 
for Management within 10 years after relief from active duty as a 
commissioned officer of a regular component of an armed force.
    ``(3) The Deputy Secretary of Defense for Management shall serve 
for a term of seven years, except that the Deputy Secretary may be 
removed earlier if the Secretary of Defense determines under subsection 
(h)(2) that the Deputy Secretary's performance has not been 
satisfactory.
    ``(b) General Authority.--(1) The Deputy Secretary of Defense for 
Management--
            ``(A) serves as the Chief Management Officer of the 
        Department of Defense;
            ``(B) is the principal adviser to the Secretary of Defense 
        on matters relating to the management of the Department of 
        Defense, including defense business activities, to ensure 
        departmentwide capability to carry out the strategic plan of 
        the Department of Defense in support of national security 
        objectives; and
            ``(C) performs such additional duties and exercises such 
        other powers as the Secretary may prescribe.
    ``(2) The Deputy Secretary of Defense for Management takes 
precedence in the Department of Defense immediately after the Deputy 
Secretary of Defense.
    ``(3)(A) The Deputy Secretary of Defense for Management shall act 
for, and exercise the powers of, the Secretary of Defense when--
            ``(i) the Secretary is disabled or there is no Secretary of 
        Defense; and
            ``(ii) the Deputy Secretary of Defense is disabled or there 
        is no Deputy Secretary of Defense.
    ``(B) The Deputy Secretary of Defense for Management shall act for, 
and exercise the powers of, the Deputy Secretary of Defense when the 
Deputy Secretary is disabled or there is no Deputy Secretary of 
Defense.
    ``(c) Management Duties.--To support the economical, efficient, and 
effective execution of the national defense objectives, policies, and 
plans of the Department of Defense, the Deputy Secretary of Defense for 
Management shall be responsible to the Secretary of Defense for the 
development, approval, implementation, integration, and oversight of 
policies, procedures, processes, and systems for the management of the 
Department of Defense that relate to performance of the following 
functions:
            ``(1) Planning and budgeting, including performance 
        measurement.
            ``(2) Acquisition.
            ``(3) Logistics.
            ``(4) Facilities, installations, and environment.
            ``(5) Financial management.
            ``(6) Human resources and personnel.
            ``(7) Management of information resources, including 
        information technology, networks, and telecommunications 
        functions.
    ``(d) Defense Business Reform.--For the functions specified in 
subsection (c), the Deputy Secretary of Defense for Management shall--
            ``(1) develop and maintain a departmentwide management 
        strategic plan for business reform, and identify key 
        initiatives to be undertaken by the Department of Defense and 
        its components, together with related resource needs;
            ``(2) establish performance goals and measures for 
        improving and evaluating overall economy, efficiency, and 
        effectiveness;
            ``(3) monitor and measure the progress of the Department 
        and its components in meeting established performance goals for 
        improving economy, efficiency, and effectiveness; and
            ``(4) review and approve plans and budgets for business 
        reform, including any proposed changes to policies, procedures, 
        processes, and systems, to ensure the compatibility of those 
        plans and budgets with--
                    ``(A) the overall strategic plan and budget of the 
                Department;
                    ``(B) the strategic plan for business reform of the 
                Department; and
                    ``(C) achievement of the integration of business 
                activities throughout the Department.
    ``(e) Defense Business Systems.--(1) In carrying out the duties of 
the position under this section, the Deputy Secretary of Defense for 
Management shall oversee the implementation of a defense business 
systems modernization program including the expenditure of any funds 
appropriated for maintaining legacy systems and for modernizing defense 
business systems.
    ``(2) The Deputy Secretary of Defense for Management shall--
            ``(A) oversee the development of, and shall review and 
        approve, all budget requests for defense business systems, 
        including the information to be submitted to Congress under 
        section 2222(h) of this title; and
            ``(B) subject to the authority, direction, and control of 
        the Secretary of Defense, perform the responsibilities of the 
        Secretary under section 2222 of this title.
    ``(3) In this subsection, the terms `defense business system' and 
`defense business system modernization' have the meanings given to 
those terms in section 2222(j) of this title.
    ``(f) Relationship to Other Defense Officials.--The Deputy 
Secretary of Defense for Management exercises the authority of the 
Secretary of Defense in the performance of the duties of the Deputy 
Secretary under this section, subject to the authority, direction, and 
control of the Secretary. The Secretaries of the military departments 
and the heads of the other elements of the Department of Defense are 
subject to the authority, direction, and control of the Deputy 
Secretary in the performance of their duties with respect to matters 
within the authority of the Deputy Secretary, and the exercise of that 
authority by the Deputy Secretary is binding on the military 
departments and such other elements.
    ``(g) Consultation With Other Officials.--In carrying out the 
duties of the position under this section, the Deputy Secretary of 
Defense for Management shall consult on a continuing basis with the 
Deputy Secretary of Defense, the Secretaries of the military 
departments, and the Chairman of the Joint Chiefs of Staff--
            ``(1) to support economical, efficient, and effective 
        performance of the missions of the Department of Defense; and
            ``(2) to support each of those officials--
                    ``(A) in the implementation of the national defense 
                strategy and the strategic plan of the Department of 
                Defense; and
                    ``(B) in the administration of related programs, 
                plans, operations, and activities.
    ``(h) Performance and Evaluation.--(1) The Secretary of Defense and 
the Deputy Secretary of Defense for Management shall jointly identify 
in writing each year the individual and organizational goals to be 
achieved by the Deputy Secretary during the succeeding year. Such goals 
shall be expressed in terms of measurable milestones, and shall be 
consistent with the goals and measures established under subsection 
(d). Each set of goals so identified shall be available for public 
disclosure.
    ``(2) The Secretary of Defense shall evaluate the performance of 
the Deputy Secretary of Defense for Management each year and shall 
determine as part of each such evaluation whether the Deputy Secretary 
has made satisfactory progress toward achieving the goals set out in 
the performance agreement for that year under paragraph (1).''.
                    (B) The table of sections at the beginning of such 
                chapter is amended by inserting after the item relating 
                to section 132 the following new item:

``132a. Deputy Secretary of Defense for Management.''.
            (2) Executive level ii.--Section 5313 of title 5, United 
        States Code, is amended by inserting after ``Deputy Secretary 
        of Defense.'' the following:
            ``Deputy Secretary of Defense for Management.''.
    (b) Membership of Certain Department of Defense Management 
Committees.--
            (1) Financial management modernization executive 
        committee.--Section 185(a) of title 10, United States Code, is 
        amended--
                    (A) in paragraph (2)--
                            (i) by redesignating subparagraphs (A), 
                        (B), (C), (D), and (E) as subparagraphs (B), 
                        (C), (D), (E), and (F), respectively;
                            (ii) by inserting after ``composed of the 
                        following:'' the following new subparagraph 
                        (A):
            ``(A) The Deputy Secretary of Defense for Management, who 
        shall be the chairman of the committee.''; and
                            (iii) in subparagraph (B), as redesignated 
                        by clause (i), by striking ``, who shall be the 
                        chairman of the committee''; and
                    (B) in paragraph (3), by inserting ``the Deputy 
                Secretary of Defense for Management,'' after ``the 
                Deputy Secretary of Defense,''.
            (2) Defense business system management committee.--Section 
        186 of such title is amended by striking ``Deputy Secretary of 
        Defense'' each place it appears in subsections (a)(1) and (b) 
        and inserting ``Deputy Secretary of Defense for Management''.
    (c) Adjustments to Duties and Precedence of Other Officials.--
            (1) Under secretary of defense for policy.--Section 134 of 
        title 10, United States Code, is amended--
                    (A) in subsection (b)(2), by striking ``Secretary 
                of Defense--'' and inserting ``Secretary of Defense and 
                the Deputy Secretary of Defense--''; and
                    (B) in subsection (c), by inserting ``the Deputy 
                Secretary of Defense for Management,'' after ``the 
                Deputy Secretary of Defense,''.
            (2) Under secretary of defense for acquisition, technology, 
        and logistics.--Section 133(e) of such title is amended--
                    (A) in paragraph (1), by striking ``and the Deputy 
                Secretary of Defense'' and inserting ``, the Deputy 
                Secretary of Defense, and the Deputy Secretary of 
                Defense for Management''; and
                    (B) in paragraph (2), by inserting ``the Deputy 
                Secretary of Defense for Management,'' after ``the 
                Deputy Secretary of Defense,''.
            (3) Deputy under secretary of defense for logistics and 
        materiel readiness.--Section 133b(c)(2) of such title is 
        amended by inserting ``the Deputy Secretary of Defense for 
        Management,'' after ``the Deputy Secretary of Defense,''.
            (4) Director of operational test and evaluation.--Section 
        139 of such title is amended--
                    (A) in subsection (b)--
                            (i) in paragraph (2), by striking ``and the 
                        Under Secretary of Defense for Acquisition, 
                        Technology, and Logistics'' and inserting ``, 
                        the Deputy Secretary of Defense, the Deputy 
                        Secretary of Defense for Management, the Under 
                        Secretary of Defense for Acquisition, 
                        Technology, and Logistics,''; and
                            (ii) in paragraph (6), by inserting ``, the 
                        Deputy Secretary of Defense, and the Deputy 
                        Secretary of Defense for Management'' after 
                        ``the Secretary of Defense''; and
                    (B) in subsection (c), by striking ``and the Deputy 
                Secretary of Defense'' in the first sentence and 
                inserting ``, the Deputy Secretary of Defense, and the 
                Deputy Secretary of Defense for Management''.
Establishes in the Department of Defense (DOD) a Deputy Secretary of Defense for Management (Deputy Secretary) to: (1) serve as the Chief Management Officer of DOD; and (2) act as principal adviser to the Secretary of Defense on matters relating to the management of DOD, including defense business activities.

Makes the Deputy Secretary responsible to the Secretary for development, approval, implementation, integration, and oversight for the management of DOD that relate to performance of the the following functions: (1) planning and budgeting, including performance measurement; (2) acquisition; (3) logistics; (4) facilities, installations, and environment; (5) financial management; (6) human resources and personnel; and (7) management of information resources.

Requires the Deputy Secretary, among other things, to: (1) develop and maintain a department-wide strategic plan for defense business reform; and (2) establish performance goals and measures for improving and evaluating overall DOD economy, efficiency, and effectiveness.

Directs the Secretary and the Deputy Secretary to jointly identify each year the individual and organizational goals to be achieved by the Deputy Secretary.
A bill to amend title 10, United States Code, to establish the position of Deputy Secretary of Defense for Management, and for other purposes.