# Duncan Hunter National Defense Authorization Act for Fiscal Year 2009/Division A/Title VIII
## TITLE VIII — ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS
### Subtitle A—Acquisition Policy and Management
#### SEC. 801. ASSESSMENT OF URGENT OPERATIONAL NEEDS FULFILLMENT.

    (a) Assessment Required- The Secretary of Defense shall commission a study and report by an independent commission or a federally funded research and development center to assess the effectiveness of the processes used by the Department of Defense for the generation of urgent operational need requirements, and the acquisition processes used to fulfill such requirements. Such assessment shall include the following:
       (1) A description and evaluation of the effectiveness of the procedures used to generate, validate, and fulfill warfighting requirements through the urgent operational need and joint urgent operational need processes, including—
          (A) the extent to which joint and urgent operational need statements are used to document required capability gaps or are used to request specific acquisition outcomes, such as specific systems or equipment;
          (B) the effectiveness of the processes used by each of the military departments and the various elements of the Department of Defense to prioritize and fulfill joint and urgent operational needs, including the rapid acquisition processes of the military departments, as well as the joint improvised explosive device defeat organization and the joint rapid acquisition cell; and
          (C) the timeliness and responsiveness of the processes used by the military departments and the various elements of the Department of Defense to review and validate urgent operational needs statements and joint urgent operational needs statements.
       (2) An evaluation of the extent to which joint urgent operational need statements are used to avoid using service-specific urgent operational need and acquisition processes or to document non-urgent capability gaps.
       (3) An evaluation of the extent to which joint acquisition entities maintain oversight, once a military department or defense agency has been designated as responsible for execution and fielding of a capability in response to a joint urgent operational need statement, including oversight of—
          (A) the responsiveness of the military department or agency in execution;
          (B) the field performance of the capability delivered in response to the joint urgent operational need statement; and
          (C) the concurrent development of a long term acquisition and sustainment strategy.
       (8) Recommendations regarding—
          (A) best practices and process improvements to ensure that urgent operational needs statements and joint urgent operational needs statements are presented to appropriate authorities for review and validation not later than 60 days after the documents are submitted;
          (B) common definitions and standards for urgent operational needs statements and joint urgent operational need statements;
          (C) best practices and process improvements for the creation, evaluation, prioritization, and fulfillment of urgent operational need statements and joint urgent operational need statements; and
          (D) the extent to which rapid acquisition processes should be consolidated or expanded.
    (b) Submission to Congress- Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall submit to the congressional defense committees the report resulting from the study conducted pursuant to subsection (a).

#### SEC. 802. IMPLEMENTATION OF STATUTORY REQUIREMENTS REGARDING THE NATIONAL TECHNOLOGY AND INDUSTRIAL BASE.

    (a) Guidance Required- Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall issue guidance regarding—
       (1) the appropriate application of the authority in sections 2304(b) and 2304(c)(3)(A) of title 10, United States Code, in connection with major defense acquisition programs; and
       (2) the appropriate timing and performance of the requirement in section 2440 of title 10, United States Code, to consider the national technology and industrial base in the development and implementation of acquisition plans for each major defense acquisition program.
    (b) Definitions- In this section;
       (1) MAJOR DEFENSE ACQUISITION PROGRAM- The term `major defense acquisition program' has the meaning provided in section 2430 of title 10, United States Code.
       (2) NATIONAL TECHNOLOGY AND INDUSTRIAL BASE- The term `national technology and industrial base' has the meaning provided in section 2500(1) of title 10, United States Code.

#### SEC. 803. COMMERCIAL SOFTWARE REUSE PREFERENCE.

    (a) In General- The Secretary of Defense shall ensure that contracting officials identify and evaluate, at all stages of the acquisition process (including concept refinement, concept decision, and technology development), opportunities for the use of commercial computer software and other non-developmental software.
    (b) Report- Not later than 270 days after the date of enactment of this Act, the Secretary shall submit to the congressional defense committees a report on actions taken to implement subsection (a), including a description of any relevant regulations and policy guidance.

#### SEC. 804. INTERNAL CONTROLS FOR PROCUREMENTS ON BEHALF OF THE DEPARTMENT OF DEFENSE BY CERTAIN NON-DEFENSE AGENCIES.

    (a) Inclusion of Additional Non-Defense Agencies in Review- The covered non-defense agencies specified in subsection (c) of this section shall be considered covered non-defense agencies as defined in subsection (i) of section 817 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2326) for purposes of such section.
    (b) Deadlines and Applicability for Additional Non-Defense Agencies- For each covered non-defense agency specified in subsection (c) of this section, section 817 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2326) shall apply to such agency as follows:
       (1) The review and determination required by subsection (a)(1) of such section shall be completed by not later than March 15, 2009.
       (2) The review and determination required by subsection (a)(2) of such section, if necessary, shall be completed by not later than June 15, 2010, and such review and determination shall be a review and determination of such agency's procurement of property and services on behalf of the Department of Defense in fiscal year 2009.
       (3) The memorandum of understanding required by subsection (c)(1) of such section shall be entered into by not later than 60 days after the date of the enactment of this Act.
       (4) The limitation specified in subsection (d)(1) of such section shall apply after March 15, 2009, and before June 16, 2010.
       (5) The limitation specified in subsection (d)(2) of such section shall apply after June 15, 2010.
       (6) The limitation required by subsection (d)(3) of such section shall commence, if necessary, on the date that is 60 days after the date of the enactment of this Act.
    (c) Definition of Covered Non-Defense Agency- In this section, the term `covered non-defense agency' means each of the following:::(1) The Department of Commerce.
       (2) The Department of Energy.
    (d) Modification of Certain Additional Authorities on Internal Controls for Procurements on Behalf of DOD- Section 801 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 202; 10 U.S.C. 2304 note) is amended—
       (1) in subsection (a)(2)—
          (A) in subparagraph (B), by striking `each of the Department of the Treasury, the Department of the Interior, and the National Aeronautics and Space Administration' and inserting `the Department of the Interior'; and
          (B) by adding at the end the following new subparagraph:
                   `(D) In the case of each of the Department of Commerce and the Department of Energy, by not later than March 15, 2015.'; and
       (2) in subsection (f)(2)—
          (A) by striking subparagraphs (B) and (D);
          (B) by redesignating subparagraphs (C), (E), and (F) as subparagraphs (B), (C), and (D), respectively; and
          (C) by adding at the end the following new subparagraphs:
                   `(E) The Department of Commerce.
                   `(F) The Department of Energy.'.

### Subtitle B—Provisions Relating to Major Defense Acquisition Programs
#### SEC. 811. INCLUSION OF MAJOR SUBPROGRAMS TO MAJOR DEFENSE ACQUISITION PROGRAMS UNDER ACQUISITION REPORTING REQUIREMENTS.

    (a) Authority To Designate Major Subprograms as Subject to Acquisition Reporting Requirements-
       (1) IN GENERAL- Chapter 144 of title 10, United States Code, is amended by inserting after section 2430 the following new section:
          `Sec. 2430a. Major subprograms
             `(a) Authority To Designate Major Subprograms as Subject to Acquisition Reporting Requirements- (1) If the Secretary of Defense determines that a major defense acquisition program requires the delivery of two or more categories of end items which differ significantly from each other in form and function, the Secretary may designate each such category of end items as a major subprogram for the purposes of acquisition reporting under this chapter.
                `(2) The Secretary shall notify the congressional defense committees in writing of any proposed designation pursuant to paragraph (1) not less than 30 days before the date such designation takes effect.
             `(b) Reporting Requirements- If the Secretary designates a major subprogram of a major defense acquisition program in accordance with subsection (a), Selected Acquisition Reports, unit cost reports, and program baselines under this chapter shall reflect cost, schedule, and performance information—
                `(1) for the major defense acquisition program as a whole; and
                `(2) for each major subprogram of the major defense acquisition program so designated.
             `(c) Requirement to Cover Entire Major Defense Acquisition Program- If a subprogram of a major defense acquisition program is designated as a major subprogram under subsection (a), all other elements of the major defense acquisition program shall be appropriately organized into one or more subprograms under the major defense acquisition program, each of which subprograms, as so organized, shall be treated as a major subprogram under subsection (a).
             `(d) Definitions- Notwithstanding paragraphs (1) and (2) of section 2432(a) of this title, in the case of a major defense acquisition program for which the Secretary has designated one or more major subprograms under this section for the purposes of this chapter—
                `(1) the term `program acquisition unit cost' applies at the level of the subprogram and means the total cost for the development and procurement of, and specific military construction for, the major defense acquisition program that is reasonably allocable to each such major subprogram, divided by the relevant number of fully-configured end items to be produced under such major subprogram;
                `(2) the term `procurement unit cost' applies at the level of the subprogram and means the total of all funds programmed to be available for obligation for procurement for each such major subprogram, divided by the number of fully-configured end items to be procured under such major subprogram;
                `(3) the term `major contract', with respect to a designated major subprogram, means each of the six largest prime, associate, or Government furnished equipment contracts under the subprogram that is in excess of $40,000,000 and that is not a firm-fixed price contract; and
                `(4) the term `life cycle cost', with respect to a designated major subprogram, means all costs of development, procurement, military construction, and operations and support, without regard to funding source or management control.'.
       (2) CLERICAL AMENDMENT- The table of sections at the beginning of chapter 144 of such title is amended by inserting after the item relating to section 2430 the following new item:
          `2430a. Major subprograms.'.
    (b) Conforming Amendments to Section 2432- Section 2432 of such title is amended—
       (1) in subsection (b)(2)(A), by inserting `for the program (or for each designated subprogram under the program)' after `procurement unit cost';
       (2) in subsection (c)—
          (A) in paragraph (1)(B)—
             (i) by inserting `or designated major subprogram' after `for each major defense acquisition program'; and
             (ii) by inserting `or subprogram' after `the program';
          (B) in paragraph (1)(C)—
             (i) by inserting `or designated major subprogram' after `major defense acquisition program'; and
             (ii) by inserting `or subprogram' after `the program'; and
          (C) in paragraph (3)(A), by inserting `and each designated major subprogram' after `for each major defense acquisition program';
       (3) in subsection (e)—
          (A) in paragraph (3), by inserting before the period the following: `for the program (or for each designated major subprogram under the program)';
          (B) in paragraph (5), by inserting before the period the following: `(or for each designated major subprogram under the program)';
          (C) in paragraph (7), by inserting `or subprogram' after `of the program' each place it appears; and
          (D) in paragraph (8), by inserting `and designated major subprograms under the program' after `the program';
       (4) in subsection (g)—
          (A) by inserting `or designated major subprogram' after `major defense acquisition program'; and
          (B) by inserting `or subprogram' after `the program' each place it appears; and
       (5) in subsection (h)(2)(C), by inserting `and designated major subprograms under the program' after `the development program'.
    (c) Conforming Amendments to Section 2433- Section 2433 of such title is amended—
       (1) in subsection (a)—
          (A) in paragraph (1), by striking `The terms' and inserting `Except as provided in section 2430a(c) of this title, the terms';
          (B) in paragraph (2)—
             (i) by inserting `or designated major subprogram' after `major defense acquisition program'; and
             (ii) by inserting `or subprogram' after `the program';
          (C) in paragraph (4)—
             (i) by inserting `or designated major defense subprogram' after `major defense acquisition program' each place it appears; and
             (ii) by inserting `or subprogram' after `for the program' each place it appears; and
          (D) in paragraph (5)—
             (i) by inserting `or designated major defense subprogram' after `major defense acquisition program' each place it appears; and
             (ii) by inserting `or subprogram' after `for the program' each place it appears;
       (2) in subsection (b)—
          (A) in the matter preceding paragraph (1), by inserting `(or of each designated major subprogram under the program)' after `unit costs of the program';
          (B) in paragraph (1), by inserting before the period the following: `for the program (or for each designated major subprogram under the program)';
          (C) in paragraph (2), by inserting before the period the following: `for the program (or for each designated major subprogram under the program)'; and
          (D) in paragraph (5), by inserting `or subprogram' after `the program' each place it appears (other than the last place it appears);
       (3) in subsection (c)—
          (A) by striking `the program acquisition unit cost for the program or the procurement unit cost for the program' and inserting `the program acquisition unit cost for the program (or for a designated major subprogram under the program) or the procurement unit cost for the program (or for such a subprogram)'; and
          (B) by striking `for the program' after `significant cost growth threshold';
       (4) in subsection (d)—
          (A) in paragraph (1)—
             (i) by inserting `or any designated major subprogram under the program' after `major defense acquisition program'; and
             (ii) by inserting `or subprogram' after `for the program' each place it appears;
          (B) in paragraph (2)—
             (i) by inserting `or any designated major subprogram under the program' after `major defense acquisition program'; and
             (ii) by inserting `or subprogram' after `for the program' each place it appears; and
          (C) in paragraph (3), by striking `such program' and inserting `the program or subprogram concerned';
       (5) in subsection (e)—
          (A) in paragraph (1)—
             (i) in subparagraph (A)—
                (I) by inserting `or designated major subprogram' after `major defense acquisition program'; and
                (II) by inserting `or subprogram' after `for the program'; and
             (ii) in subparagraph (B)—
                (I) by inserting `or designated major subprogram' after `major defense acquisition program'; and
                (II) by inserting `or subprogram' after `that program'; and
          (B) in paragraph (2), in the matter preceding subparagraph (A)—
             (i) by inserting `or designated major subprogram' after `major defense acquisition program'; and
             (ii) by inserting `or subprogram' after `for the program'; and
       (6) in subsection (g)—
          (A) in paragraph (1)—
             (i) in subparagraph (D)—
                (I) by inserting `(and for each designated major subprogram under the program)' after `for the program'; and
                (II) by inserting `or subprogram' after `in which the program';
             (ii) in subparagraph (E), by inserting `for the program (and for each designated major subprogram under the program)' after `program acquisition cost';
             (iii) in subparagraph (F), by inserting before the period the following: `for the program (or for any designated major subprogram under the program)';
             (iv) in subparagraph (G)—
                (I) by inserting `and each designated major subprogram under the program' after of `the program'; and
                (II) by inserting `or subprogram' after `for the program' each place it appears;
             (v) in subparagraph (H)—
                (I) by inserting `and each designated major subprogram under the program' after `the program' the first place it appears; and
                (II) by inserting `or subprogram' after `the program' the second place it appears;
             (vi) in subparagraph (J), by inserting `for the program (or for each designated major subprogram under the program)' after `program acquisition unit cost';
             (vii) in subparagraph (K), by inserting `for the program (or for each designated major subprogram under the program)' after `procurement unit cost' each place it appears;
             (viii) in subparagraph (O), by inserting before the period the following: `for the program (or for any designated major subprogram under the program)';
             (ix) in subparagraph (P)—
                (I) by inserting `or subprogram' after `the program' the first place it appears; and
                (II) by inserting `and any designated major subprogram under the program' after `the program' the second place it appears; and
             (x) in subparagraph (Q), by inserting `or any designated major subprogram under the program' after `the program'; and
          (B) in paragraph (2)—
             (i) by inserting `or designated major subprogram' after `major defense acquisition program';
             (ii) by inserting `or subprogram' after `the entire program'; and
             (iii) by inserting `or subprogram' after `a program'.
    (d) Conforming Amendments to Section 2435- Section 2435 of such title is amended—
       (1) in subsection (a)—
          (A) in paragraph (1), by inserting `and for each designated major subprogram under the program' after `major defense acquisition program'; and
          (B) in paragraph (2), by inserting `or designated major subprogram' after `major defense acquisition program';
       (2) in subsection (b)—
          (A) by inserting `or any designated major subprogram under the program' after `major defense acquisition program'; and
          (B) by inserting `or subprogram' after `the program';
       (3) in subsection (c)—
          (A) by inserting `or any designated major subprogram under the program' after `major defense acquisition program'; and
          (B) by inserting `or subprogram' after `the program' each place it appears;
       (4) in subsection (d)—
          (A) by inserting `or any designated major subprogram under the program' after `major defense acquisition program' each place it appears;
          (B) in paragraph (1)—
             (i) by inserting `or subprogram' after `the program' each place it appears; and
             (ii) by inserting `or subprogram' after `at program'; and
          (C) in paragraph (2), by inserting `or subprogram' after `for the program' each place it appears; and
       (5) in subsection (e)—
          (A) by inserting `(or in the case of a major defense acquisition program with one or more designated major subprograms, approved baseline descriptions for such subprograms)' after `baseline description';
          (B) by striking `the baseline' and inserting `any such baseline description'; and
          (C) by inserting `or subprogram' after `of the program'.

#### SEC. 812. INCLUSION OF CERTAIN MAJOR INFORMATION TECHNOLOGY INVESTMENTS IN ACQUISITION OVERSIGHT AUTHORITIES FOR MAJOR AUTOMATED INFORMATION SYSTEM PROGRAMS.

    (a) Definitions-
       (1) IN GENERAL- Section 2445a of title 10, United States Code, is amended—
          (A) in subsection (a), by striking `In General' and inserting `Major Automated Information System Program'; and
          (B) by adding at the end the following new subsection:
             `(d) Other Major Information Technology Investment Program- In this chapter, the term `other major information technology investment program' means the following::::::`(1) An investment that is designated by the Secretary of Defense, or a designee of the Secretary, as a `pre-Major Automated Information System' or `pre-MAIS' program.
                `(2) Any other investment in automated information system products or services that is expected to exceed the thresholds established in subsection (a), as adjusted under subsection (b), but is not considered to be a major automated information system program because a formal acquisition decision has not yet been made with respect to such investment.'.
       (2) HEADING AMENDMENT- The heading of such section is amended to read as follows:
          `Sec. 2445a. Definitions'.
       (3) CLERICAL AMENDMENT- The table of sections at the beginning of chapter 144A of such title is amended by striking the item relating to section 2445a and inserting the following new item:
          `2445a. Definitions.'.
    (b) Cost, Schedule, and Performance Information- Section 2445b of such title is amended—
       (1) in subsection (a), by inserting `and each other major information technology investment program' after `each major automated information system program';
       (2) in subsection (b), by inserting `Regarding Major Automated Information System Programs' after `Elements'; and
       (3) by adding at the end the following new subsection:
             `(d) Elements Regarding Other Major Information Technology Investment Programs- With respect to each other major information technology investment program, the information required by subsection (a) may be provided in the format that is most appropriate to the current status of the program.'.
    (c) Quarterly Reports- Section 2445c of such title is amended—
       (1) in subsection (a)—
          (A) by inserting `or other major information technology investment program' after `major automated information system program'; and
          (B) by inserting `or information technology investment' after `the major automated information system';
       (2) in subsection (b)—
          (A) by inserting `or other major information technology investment program' after `major automated information system program' in the matter preceding paragraph (1); and
          (B) by inserting `or information technology investment' after `automated information system' each place it appears in paragraphs (1) and (2);
       (3) in subsection (d)—
          (A) in paragraph (1) and in paragraph (2) in the matter preceding subparagraph (A), by inserting `or other major information technology investment program' after `major automated information system program'; and
          (B) in paragraph (2)—
             (i) by striking subparagraph (A) and inserting the following:
                   `(A) the automated information system or information technology investment failed to achieve initial operational capability within five years after funds were first obligated for the program;';
             (ii) in subparagraph (B), by inserting before the semicolon the following: `or section 2445b(d) of this title, as applicable';
             (iii) in subparagraph (C), by inserting before the semicolon the following: `or section 2445b(d) of this title, as applicable'; and
             (iv) in subparagraph (D)—
                (I) by inserting `or major information technology investment' after `major automated information system'; and
                (II) by inserting before the period the following: `or section 2445b(d) of this title, as applicable';
       (4) in subsection (e), by inserting `or other major information technology investment program' after `major automated information system program'; and
       (5) in subsection (f)—
          (A) by inserting `or other major information technology investment program' after `major automated information system program' in the matter preceding paragraph (1);
          (B) in paragraph (1), by inserting `or information technology investment' after `automated information system';
          (C) in paragraph (2), by inserting `or information technology investment' after `the system'; and
          (D) in paragraph (3), by inserting `or information technology investment, as applicable,' after `the program and system'.

#### SEC. 813. TRANSFER OF SECTIONS OF TITLE 10 RELATING TO MILESTONE A AND MILESTONE B FOR CLARITY.

    (a) Reversal of Order of Sections- Section 2366b of title 10, United States Code, is transferred so as to appear before section 2366a of such title.
    (b) Redesignation of Sections- Section 2366b (relating to Milestone A) and section 2366a (relating to Milestone B) of such title, as so transferred, are redesignated as sections 2366a and 2366b, respectively.
    (c) Technical Amendment- The table of sections at the beginning of chapter 139 of title 10, United States Code, is amended by striking the items relating sections 2366a and 2366b and inserting the following new items:
          `2366a. Major defense acquisition programs: certification required before Milestone A or Key Decision Point A approval.
          `2366b. Major defense acquisition programs: certification required before Milestone B or Key Decision Point B approval.'.
    (d) Conforming Amendments-
       (1) SECTION 181 OF TITLE 10, UNITED STATES CODE- Section 181(b)(4) of title 10, United States Code, is amended by striking `section 2366a(a)(4), section 2366b(b),' and inserting `section 2366a(b), section 2366b(a)(4),'.
       (2) NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2008- The National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181) is amended—
          (A) in section 212(1) by striking `2366a' and inserting `2366b'; and
          (B) in section 816—
             (i) in subsection (a)(2) by striking `2366a' and inserting `2366b';
             (ii) in subsection (a)(3) by striking `2366b of title 10, United States Code, as added by section 943 of this Act' and inserting `2366a of title 10, United States Code'; and
             (iii) in subsection (c)(2) by striking `2366a' each place such term appears (including in the paragraph heading) and inserting `2366b'.
       (3) JOHN WARNER NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2007- The John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364) is amended in section 812 (120 Stat. 2317), in each of subsections (c)(2)(A) and (d)(2), by striking `2366a' and inserting `2366b'.
    (e) Additional Technical Amendments-
       (1) Section 2366a of title 10, United States Code, as transferred and redesignated by this section, is amended—
          (A) in paragraphs (1), (2), and (4) of subsection (a), by striking `system' each place it appears and inserting `program';
          (B) in paragraph (3) of subsection (a)—
             (i) by striking `if the system' and inserting `if the program'; and
             (ii) by striking `such system' and inserting `such program';
          (C) in subsection (b)—
             (i) by striking `major system' and inserting `major defense acquisition program'; and
             (ii) by striking `the system' each place it appears and inserting `the program'; and
          (D) in paragraph (1) of subsection (c)—
             (i) by striking `major system' and inserting `major defense acquisition program'; and
             (ii) by striking `2302(5)' and inserting `2430'.
       (2) Section 943 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 288) is amended—
          (A) in subsection (b), by striking `major weapon system' and inserting `major defense acquisition program'; and
          (B) in subsection (c)—
             (i) by striking `major systems' and inserting `major defense acquisition programs'; and
             (ii) by adding at the end the following: `In the case of the certification required by paragraph (2) of subsection (a) of such section, during the period prior to the completion of the first quadrennial roles and missions review required by section 118b of title 10, United States Code, the certification required by that paragraph shall be that the system is being executed by an entity with a relevant core competency as identified by the Secretary of Defense.'.

#### SEC. 814. CONFIGURATION STEERING BOARDS FOR COST CONTROL UNDER MAJOR DEFENSE ACQUISITION PROGRAMS.

    (a) Configuration Steering Boards- Each Secretary of a military department shall establish one or more boards (to be known as a `Configuration Steering Board') for the major defense acquisition programs of such department.
    (b) Composition-
       (1) CHAIR- Each Configuration Steering Board under this section shall be chaired by the service acquisition executive of the military department concerned.
       (2) PARTICULAR MEMBERS- Each Configuration Steering Board under this section shall include a representative of the following:
          (A) The Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics.
          (B) The Chief of Staff of the Armed Force concerned.
          (C) Other Armed Forces, as appropriate.
          (D) The Joint Staff.
          (E) The Comptroller of the military department concerned.
          (F) The military deputy to the service acquisition executive concerned.
          (G) The program executive officer for the major defense acquisition program concerned.
          (H) Other senior representatives of the Office of the Secretary of Defense and the military department concerned, as appropriate.
    (c) Responsibilities-
       (1) IN GENERAL- The Configuration Steering Board for a major defense acquisition program under this section shall be responsible for the following:
          (A) Preventing unnecessary changes to program requirements and system configuration that could have an adverse impact on program cost or schedule.
          (B) Mitigating the adverse cost and schedule impact of any changes to program requirements or system configuration that may be required.
          (C) Ensuring that the program delivers as much planned capability as possible, at or below the relevant program baseline.
       (2) DISCHARGE OF RESPONSIBILITIES- In discharging its responsibilities under this section with respect to a major defense acquisition program, a Configuration Steering Board shall—
          (A) review and approve or disapprove any proposed changes to program requirements or system configuration that have the potential to adversely impact program cost or schedule; and
          (B) review and recommend proposals to reduce program requirements that have the potential to improve program cost or schedule in a manner consistent with program objectives.
       (3) PRESENTATION OF RECOMMENDATIONS ON REDUCTION IN REQUIREMENTS- Any recommendation for a proposed reduction in requirements that is made by a Configuration Steering Board under paragraph (2)(B) shall be presented to appropriate organizations of the Joint Staff and the military departments responsible for such requirements for review and approval in accordance with applicable procedures.
       (4) ANNUAL CONSIDERATION OF EACH MAJOR DEFENSE ACQUISITION PROGRAM- The Secretary of the military department concerned shall ensure that a Configuration Steering Board under this section meets to consider each major defense acquisition program of such military department at least once each year.
       (5) CERTIFICATION OF COST AND SCHEDULE DEVIATIONS DURING SYSTEM DESIGN AND DEVELOPMENT- For a major defense acquisition program that received an initial Milestone B approval during fiscal year 2008, a Configuration Steering Board may not approve any proposed alteration to program requirements or system configuration if such an alteration would—
          (A) increase the cost (including any increase for expected inflation or currency exchange rates) for system development and demonstration by more than 25 percent; or
          (B) extend the schedule for key events by more than 15 percent of the total number of months between the award of the system development and demonstration contract and the scheduled Milestone C approval date, unless the Under Secretary of Defense for Acquisition, Technology, and Logistics certifies to the congressional defense committees, and includes in the certification supporting rationale, that approving such alteration to program requirements or system configuration is in the best interest of the Department of Defense despite the cost and schedule impacts to system development and demonstration of such program.
    (d) Applicability-
       (1) IN GENERAL- The requirements of this section shall apply with respect to any major defense acquisition program that is commenced before, on, or after the date of the enactment of this Act.
       (2) CURRENT PROGRAMS- In the case of any major defense acquisition program that is ongoing as of the date of the enactment of this Act, a Configuration Steering Board under this section shall be established for such program not later than 60 days after the date of the enactment of this Act.
    (e) Guidance on Authorities of Program Managers After Milestone B-
       (1) MODIFICATION OF GUIDANCE ON AUTHORITIES- Paragraph (2) of section 853(d) of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2343) is amended to read as follows:
                `(2) authorities available to the program manager, including—
                   `(A) the authority to object to the addition of new program requirements that would be inconsistent with the parameters established at Milestone B (or Key Decision Point B in the case of a space program) and reflected in the performance agreement, unless such requirements are approved by the appropriate Configuration Steering Board; and
                   `(B) the authority to recommend to the appropriate Configuration Steering Board reduced program requirements that have the potential to improve program cost or schedule in a manner consistent with program objectives; and'.
       (2) APPLICABILITY- The Secretary of Defense shall modify the guidance described in section 853(d) of the John Warner National Defense Authorization Act for Fiscal Year 2007 in order to take into account the amendment made by paragraph (1) not later than 60 days after the date of the enactment of this Act.
    (f) Major Defense Acquisition Program Defined- In this section, the term `major defense acquisition program' has the meaning given that term in section 2430(a) of title 10, United States Code.

#### SEC. 815. PRESERVATION OF TOOLING FOR MAJOR DEFENSE ACQUISITION PROGRAMS.

    (a) Guidance Required- Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall issue guidance requiring the preservation and storage of unique tooling associated with the production of hardware for a major defense acquisition program through the end of the service life of the end item associated with such a program. Such guidance shall—
       (1) require that the milestone decision authority approve a plan, including the identification of any contract clauses, facilities, and funding required, for the preservation and storage of such tooling prior to Milestone C approval;
       (2) require that the milestone decision authority periodically review the plan required by paragraph (1) prior to the end of the service life of the end item, to ensure that the preservation and storage of such tooling remains adequate and in the best interest of the Department of Defense;
       (3) provide a mechanism for the Secretary to waive the requirement for preservation and storage of unique production tooling, or any category of unique production tooling, if the Secretary—
          (A) makes a written determination that such a waiver is in the best interest of the Department of Defense; and
          (B) notifies the congressional defense committees of the waiver upon making such determination; and
       (4) provide such criteria as necessary to guide a determination made pursuant to paragraph (3)(A).
    (b) Definitions- In this section:::(1) MAJOR DEFENSE ACQUISITION PROGRAM- The term `major defense acquisition program' has the meaning provided in section 2430 of title 10, United States Code.
       (2) MILESTONE DECISION AUTHORITY- The term `milestone decision authority' has the meaning provided in section 2366a(f)(2) of such title.
       (3) MILESTONE C APPROVAL- The term `Milestone C approval' has the meaning provided in section 2366(e)(8) of such title.

### Subtitle C—Amendments to General Contracting Authorities, Procedures, and Limitations
#### SEC. 821. DEFINITION OF SYSTEM FOR DEFENSE ACQUISITION CHALLENGE PROGRAM.

    Section 2359b of title 10, United States Code, is amended by adding at the end the following new subsection:
             `(l) System Defined- In this section, the term `system'—
                `(1) means—
                   `(A) the organization of hardware, software, material, facilities, personnel, data, and services needed to perform a designated function with specified results (such as the gathering of specified data, its processing, and its delivery to users); or
                   `(B) a combination of two or more interrelated pieces (or sets) of equipment arranged in a functional package to perform an operational function or to satisfy a requirement; and
                `(2) includes a major system (as defined in section 2302(5) of this title).'.

#### SEC. 822. TECHNICAL DATA RIGHTS.

    (a) Policy Guidance- Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall issue policy guidance with respect to rights in technical data under a non-FAR agreement. The guidance shall—
       (1) establish criteria for defining the legitimate interests of the United States and the party concerned in technical data pertaining to an item or process to be developed under the agreement;
       (2) require that specific rights in technical data be established during agreement negotiations and be based upon negotiations between the United States and the potential party to the agreement, except in any case in which the Secretary of Defense determines, on the basis of criteria established in such policy guidance, that the establishment of rights during or through agreement negotiations would not be practicable; and
       (3) require the program manager for a major weapon system or an item of personnel protective equipment that is to be developed using a non-FAR agreement to assess the long-term technical data needs of such system or item.
    (b) Requirement to Include Provisions in Non-FAR Agreements- A non-FAR agreement shall contain appropriate provisions relating to rights in technical data consistent with the policy guidance issued pursuant to subsection (a).
    (c) Definitions- In this section:
       (1) The term `non-FAR agreement' means an agreement that is not subject to laws pursuant to which the Federal Acquisition Regulation is prescribed, including—
          (A) a transaction authorized under section 2371 of this title; and
          (B) a cooperative research and development agreement.
       (2) The term `party', with respect to a non-FAR agreement, means a non-Federal entity and includes any of the following:
          (A) A contractor and its subcontractors (at any tier).
          (B) A joint venture.
          (C) A consortium.
    (d) Report on Life Cycle Planning for Technical Data Needs- Not later than 270 days after the date of enactment of this Act, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the implementation of the requirements in section 2320(e) of title 10, United States Code, for the assessment of long-term technical data needs to sustain major weapon systems. Such report shall include—
       (1) a description of all relevant guidance or policies issued;
       (2) a description of the extent to which program managers have received training to better assess the long-term technical data needs of major weapon systems and subsystems; and
       (3) a description of one or more examples, if any, where a priced contract option has been used on major weapon systems for the future delivery of technical data and one or more examples, if any, where all relevant technical data were acquired upon contract award.

#### SEC. 823. REVISION TO THE APPLICATION OF COST ACCOUNTING STANDARDS.

    (a) Requirement for Review of Exemptions to the Cost Accounting Standards- The Cost Accounting Standards Board shall—
       (1) review the inapplicability of the cost accounting standards, in accordance with existing exemptions, to any contract or subcontract that is executed and performed outside the United States when such a contract or subcontract is performed by a contractor that, but for the fact that the contract or subcontract is being executed and performed entirely outside the United States, would be required to comply with such standards; and
       (2) determine whether the application of the standards to such a contract or subcontract (or any category of such contracts and subcontracts) would benefit the Government.
    (b) Publication of Request for Information- The Cost Accounting Standards Board shall publish a request for information as part of the review required by subsection (a) and shall provide a copy of the request to the appropriate committees of Congress not less than five days before the publication of such request.
    (c) Report to Congress Upon Completion of the Review- Not later than 270 days after the date of the enactment of this Act, the Cost Accounting Standards Board shall submit to the appropriate committees of Congress a report containing—
       (1) any revision to the cost accounting standards proposed as a result of the review required by subsection (a) and a copy of any proposed rulemaking implementing the revision; or
       (2) if no revision and rulemaking are proposed, a detailed justification for such decision.
    (d) Definitions- In this section:
       (1) The term `appropriate committees of Congress' means the Committees on Armed Services of the Senate and of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Committee on Oversight and Government Reform of the House of Representatives.
       (2) The term `cost accounting standards' means the standards promulgated under section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 422).
       (3) The term `Cost Accounting Standards Board' means the Board established pursuant to section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 422).

#### SEC. 824. MODIFICATION AND EXTENSION OF PILOT PROGRAM FOR TRANSITION TO FOLLOW-ON CONTRACTS UNDER AUTHORITY TO CARRY OUT CERTAIN PROTOTYPE PROJECTS.

    (a) Expansion of Scope of Pilot Program- Paragraph (1) of section 845(e) of the National Defense Authorization Act for Fiscal Year 1994 (10 U.S.C. 2371 note) is amended by striking `under prototype projects carried out under this section' and inserting `developed under prototype projects carried out under this section or research projects carried out pursuant to section 2371 of title 10, United States Code'.
    (b) Two-Year Extension of Authority- Paragraph (4) of such section is amended by striking `September 30, 2008' and inserting `September 30, 2010'.

#### SEC. 825. CLARIFICATION OF STATUS OF GOVERNMENT RIGHTS IN THE DESIGNS OF DEPARTMENT OF DEFENSE VESSELS, BOATS, CRAFT, AND COMPONENTS THEREOF.

    (a) In General- Chapter 633 of title 10, United States Code, is amended by adding at the end the following new section:
          `Sec. 7317. Status of Government rights in the designs of vessels, boats, and craft, and components thereof
             `(a) In General- Government rights in the design of a vessel, boat, or craft, and its components, including the hull, decks, superstructure, and all shipboard equipment and systems, shall be determined solely as follows:
                `(1) In the case of a vessel, boat, craft, or component procured through a contract, in accordance with the provisions of section 2320 of this title.
                `(2) In the case of a vessel, boat, craft, or component procured through an instrument not governed by section 2320 of this title, by the terms of the instrument (other than a contract) under which the design for such vessel, boat, craft, or component, as applicable, was developed for the Government.
             `(b) Construction of Superseding Authorities- This section may be modified or superseded by a provision of statute only if such provision expressly refers to this section in modifying or superseding this section.'.
    (b) Clerical Amendment- The table of sections at the beginning of chapter 633 of such title is amended by adding at the end the following new item:
          `7317. Status of Government rights in the designs of vessels, boats, and craft, and components thereof'.

### Subtitle D—Provisions Relating to Acquisition Workforce and Inherently Governmental Functions
#### SEC. 831. DEVELOPMENT OF GUIDANCE ON PERSONAL SERVICES CONTRACTS.

    (a) Guidance Required- Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall develop guidance related to personal services contracts to—
       (1) require a clear distinction between employees of the Department of Defense and employees of Department of Defense contractors;
       (2) provide appropriate safeguards with respect to when, where, and to what extent the Secretary may enter into a contract for the procurement of personal services; and
       (3) assess and take steps to mitigate the risk that, as implemented and administered, non-personal services contracts may become personal services contracts.
    (b) Definition of Personal Services Contract- In this section, the term `personal services contract' has the meaning given that term in section 2330a(g)(5) of title 10, United States Code.

#### SEC. 832. SENSE OF CONGRESS ON PERFORMANCE BY PRIVATE SECURITY CONTRACTORS OF CERTAIN FUNCTIONS IN AN AREA OF COMBAT OPERATIONS.

    It is the sense of Congress that—
       (1) security operations for the protection of resources (including people, information, equipment, and supplies) in uncontrolled or unpredictable high-threat environments should ordinarily be performed by members of the Armed Forces if they will be performed in highly hazardous public areas where the risks are uncertain and could reasonably be expected to require deadly force that is more likely to be initiated by personnel performing such security operations than to occur in self-defense;
       (2) it should be in the sole discretion of the commander of the relevant combatant command to determine whether or not the performance by a private security contractor under a contract awarded by any Federal agency of a particular activity, a series of activities, or activities in a particular location, within a designated area of combat operations is appropriate and such a determination should not be delegated to any person who is not in the military chain of command;
       (3) the Secretaries of the military departments and the Chiefs of Staff of the Armed Forces should ensure that the United States Armed Forces have appropriate numbers of trained personnel to perform the functions described in paragraph (1) without the need to rely upon private security contractors; and
       (4) the regulations issued by the Secretary of Defense pursuant to section 862(a) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 254; 10 U.S.C. 2302 note) should ensure that private security contractors are not authorized to perform inherently governmental functions in an area of combat operations.

#### SEC. 833. ACQUISITION WORKFORCE EXPEDITED HIRING AUTHORITY.

    Section 1705 of title 10, United States Code, is amended by adding at the end the following new subsection:
             `(h) Expedited Hiring Authority-
                `(1) For purposes of sections 3304, 5333, and 5753 of title 5, United States Code, the Secretary of Defense may—
                   `(A) designate any category of acquisition positions within the Department of Defense as shortage category positions; and
                   `(B) utilize the authorities in such sections to recruit and appoint highly qualified persons directly to positions so designated.
                `(2) The Secretary may not appoint a person to a position of employment under this subsection after September 30, 2012.'.

#### SEC. 834. CAREER PATH AND OTHER REQUIREMENTS FOR MILITARY PERSONNEL IN THE ACQUISITION FIELD.

    (a) Acquisition Personnel Requirements-
       (1) IN GENERAL- Chapter 87 of title 10, United States Code, is amended by inserting after section 1722 the following new section:
          `Sec. 1722a. Special requirements for military personnel in the acquisition field
             `(a) Requirement for Policy and Guidance Regarding Military Personnel in Acquisition- The Secretary of Defense shall require the Secretary of each military department (with respect to such military department) and the Under Secretary of Defense for Acquisition, Technology, and Logistics (with respect to the Office of the Secretary of Defense, the unified combatant commands, the Defense Agencies, and the Defense Field Activities) to establish policies and issue guidance to ensure the proper development, assignment, and employment of members of the armed forces in the acquisition field to achieve the objectives of this section as specified in subsection (b).
             `(b) Objectives- Policies established and guidance issued pursuant to subsection (a) shall ensure, at a minimum, the following:
                `(1) A career path in the acquisition field that attracts the highest quality officers and enlisted personnel.
                `(2) A number of command positions and senior noncommissioned officer positions, including acquisition billets reserved for general officers and flag officers under subsection (c), sufficient to ensure that members of the armed forces have opportunities for promotion and advancement in the acquisition field.
                `(3) A number of qualified, trained members of the armed forces eligible for and active in the acquisition field sufficient to ensure the optimum management of the acquisition functions of the Department of Defense and the appropriate use of military personnel in contingency contracting.
             `(c) Reservation of Acquisition Billets for General Officers and Flag Officers- (1) The Secretary of Defense shall—
                   `(A) establish for each military department a sufficient number of billets coded or classified for acquisition personnel that are reserved for general officers and flag officers that are needed for the purpose of ensuring the optimum management of the acquisition functions of the Department of Defense; and
                   `(B) ensure that the policies established and guidance issued pursuant to subsection (a) by the Secretary of each military department reserve at least that minimum number of billets and fill the billets with qualified and trained general officers and flag officers who have significant acquisition experience.
                `(2) The Secretary of Defense shall ensure—
                   `(A) a sufficient number of billets for acquisition personnel who are general officers or flag officers exist within the Office of the Secretary of Defense, the unified combatant commands, the Defense Agencies, and the Defense Field Activities to ensure the optimum management of the acquisition functions of the Department of Defense; and
                   `(B) that the policies established and guidance issued pursuant to subsection (a) by the Secretary reserve within the Office of the Secretary of Defense, the unified combatant commands, the Defense Agencies, and the Defense Field Activities at least that minimum number of billets and fill the billets with qualified and trained general officers and flag officers who have significant acquisition experience.
                `(3) The Secretary of Defense shall ensure that a portion of the billets referred to in paragraphs (1) and (2) involve command of organizations primarily focused on contracting and are reserved for general officers and flag officers who have significant contracting experience.
             `(d) Relationship to Limitation on Preference for Military Personnel- Any designation or reservation of a position for a member of the armed forces as a result of a policy established or guidance issued pursuant to this section shall be deemed to meet the requirements for an exception under paragraph (2) of section 1722(b) of this title from the limitation in paragraph (1) of such section.
             `(e) Report- Not later than January 1 of each year, the Secretary of each military department shall submit to the Under Secretary of Defense for Acquisition, Technology, and Logistics a report describing how the Secretary fulfilled the objectives of this section in the preceding calendar year. The report shall include information on the reservation of acquisition billets for general officers and flag officers within the department concerned.'.
       (2) CLERICAL AMENDMENT- The table of sections at the beginning of chapter 87 of such title is amended by inserting after the item relating to section 1722 the following new item:
          `1722a. Special requirements for military personnel in the acquisition field.'.
    (b) Additional Item in Strategic Plan- Section 543(f)(3)(E) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat 116) is amended by inserting after `officer assignments and grade requirements' the following: `, including requirements relating to the reservation of billets in the acquisition field for general and flag officers,'.
    (c) Annual Report Required- Not later than 270 days after the date of the enactment of this Act, and not later than March 1 of 2010, 2011, and 2012, the Secretary of Defense shall submit to the congressional defense committees a report on—
       (1) the number acquisition and contracting billets in each of the Armed Forces and joint activities that are reserved for general officers and flag officers; and
       (2) the extent to which these billets have been filled by general officers and flag officers with significant acquisition experience and significant contracting experience, as applicable.

### Subtitle E—Department of Defense Contractor Matters
#### SEC. 841. ETHICS SAFEGUARDS RELATED TO CONTRACTOR CONFLICTS OF INTEREST.

    (a) Policy on Personal Conflicts of Interest by Employees of Federal Government Contractors- Not later than 270 days after the date of the enactment of this Act, the Administrator for Federal Procurement Policy shall develop and issue a standard policy to prevent personal conflicts of interest by contractor employees performing acquisition functions closely associated with inherently governmental functions (including the development, award, and administration of Government contracts) for or on behalf of a Federal agency or department.
       (1) ELEMENTS OF POLICY- The policy required under subsection (a) shall—
          (A) provide a definition of the term `personal conflict of interest' as it relates to contractor employees performing acquisition functions closely associated with inherently governmental functions; and
          (B) require each contractor whose employees perform acquisition functions closely associated with inherently governmental functions to—
             (i) identify and prevent personal conflicts of interest for employees of the contractor who are performing such functions;
             (ii) prohibit contractor employees who have access to non-public government information obtained while performing such functions from using such information for personal gain;
             (iii) report any personal conflict-of-interest violation by such an employee to the applicable contracting officer or contracting officer's representative as soon as it is identified;
             (iv) maintain effective oversight to verify compliance with personal conflict-of-interest safeguards;
             (v) have procedures in place to screen for potential conflicts of interest for all employees performing such functions; and
             (vi) take appropriate disciplinary action in the case of employees who fail to comply with policies established pursuant to this section.
       (2) CONTRACT CLAUSE-
          (A) The Administrator shall develop a personal conflicts-of-interest clause or a set of clauses for inclusion in solicitations and contracts (and task or delivery orders) for the performance of acquisition functions closely associated with inherently governmental functions that sets forth the personal conflicts-of-interest policy developed under this subsection and that sets forth the contractor's responsibilities under such policy.
          (B) Subparagraph (A) shall take effect 300 days after the date of the enactment of this Act and shall apply to—
             (i) contracts entered into on or after that effective date; and
             (ii) task or delivery orders awarded on or after that effective date, regardless of whether the contracts pursuant to which such task or delivery orders are awarded are entered before, on, or after the date of the enactment of this Act.
       (3) APPLICABILITY-
          (A) Except as provided in subparagraph (B), this subsection shall apply to any contract for an amount in excess of the simplified acquisition threshold (as defined in section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)) if the contract is for the performance of acquisition functions closely associated with inherently governmental functions.
          (B) If only a portion of a contract described in subparagraph (A) is for the performance of acquisition functions described in that subparagraph, then this subsection applies only to that portion of the contract.
    (b) Review of Federal Acquisition Regulation Relating to Conflicts of Interest-
       (1) REVIEW- Not later than 12 months after the date of the enactment of this Act, the Administrator for Federal Procurement Policy, in consultation with the Director of the Office of Government Ethics, shall review the Federal Acquisition Regulation to—
          (A) identify contracting methods, types and services that raise heightened concerns for potential personal and organizational conflicts of interest; and
          (B) determine whether revisions to the Federal Acquisition Regulation are necessary to—
             (i) address personal conflicts of interest by contractor employees with respect to functions other than those described in subsection (a); or
             (ii) achieve sufficiently rigorous, comprehensive, and uniform government-wide policies to prevent and mitigate organizational conflicts of interest in Federal contracting.
       (2) REGULATORY REVISIONS- If the Administrator determines pursuant to the review under paragraph (1)(B) that revisions to the Federal Acquisition Regulation are necessary, the Administrator shall work with the Federal Acquisition Regulatory Council to prescribe appropriate revisions to the regulations, including the development of appropriate contract clauses.
       (3) REPORT- Not later than March 1, 2010, the Administrator shall submit to the Committees on Armed Services of the Senate and House of Representatives, the Committee on Homeland Security and Governmental Affairs in the Senate, and the Committee on Oversight and Government Reform of the House of Representatives a report setting forth such findings and determinations under subparagraphs (A) and (B) of paragraph (1), together with an assessment of any revisions to the Federal Acquisition Regulation that may be necessary.
    (c) Best Practices- The Administrator for Federal Procurement Policy shall, in consultation with the Director of the Office Government Ethics, develop and maintain a repository of best practices relating to the prevention and mitigation of organizational and personal conflicts of interest in Federal contracting.

#### SEC. 842. INFORMATION FOR DEPARTMENT OF DEFENSE CONTRACTOR EMPLOYEES ON THEIR WHISTLEBLOWER RIGHTS.

    (a) In General- The Secretary of Defense shall ensure that contractors of the Department of Defense inform their employees in writing of employee whistleblower rights and protections under section 2409 of title 10, United States Code, as implemented by subpart 3.9 of part I of title 48, Code of Federal Regulations.
    (b) Contractor Defined- In this section, the term `contractor' has the meaning given that term in section 2409(e)(4) of title 10, United States Code.

#### SEC. 843. REQUIREMENT FOR DEPARTMENT OF DEFENSE TO ADOPT AN ACQUISITION STRATEGY FOR DEFENSE BASE ACT INSURANCE.

    (a) In General- The Secretary of Defense shall adopt an acquisition strategy for insurance required by the Defense Base Act (42 U.S.C. 1651 et seq.) which minimizes the cost of such insurance to the Department of Defense and to defense contractors subject to such Act.
    (b) Criteria- The Secretary shall ensure that the acquisition strategy adopted pursuant to subsection (a) addresses the following criteria:
       (1) Minimize overhead costs associated with obtaining such insurance, such as direct or indirect costs for contract management and contract administration.
       (2) Minimize costs for coverage of such insurance consistent with realistic assumptions regarding the likelihood of incurred claims by contractors of the Department.
       (3) Provide for a correlation of premiums paid in relation to claims incurred that is modeled on best practices in government and industry for similar kinds of insurance.
       (4) Provide for a low level of risk to the Department.
       (5) Provide for a competitive marketplace for insurance required by the Defense Base Act to the maximum extent practicable.
    (c) Options- In adopting the acquisition strategy pursuant to subsection (a), the Secretary shall consider such options (including entering into a single Defense Base Act insurance contract) as the Secretary deems to best satisfy the criteria identified under subsection (b).
    (d) Report- (1) Not later than 270 days after the date of enactment of this Act, the Secretary shall submit to the Committees on Armed Services of the Senate and the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Committee on Oversight and Government Reform of the House of Representatives a report on the acquisition strategy adopted pursuant to subsection (a).
       (2) The report shall include a discussion of each of the options considered pursuant to subsection (c) and the extent to which each option addresses the criteria identified under subsection (b), and shall include a plan to implement within 18 months after the date of enactment of this Act the acquisition strategy adopted by the Secretary.
    (e) Review of Acquisition Strategy- As considered appropriate by the Secretary, but not less often than once every 3 years, the Secretary shall review and, as necessary, update the acquisition strategy adopted pursuant to subsection (a) to ensure that it best addresses the criteria identified under subsection (b).

#### SEC. 844. REPORT ON USE OF OFF-SHORE SUBSIDIARIES BY DEFENSE CONTRACTORS.

    (a) Report Required- Not later than one year after the date of the enactment of this Act, the Comptroller General shall provide a report to the Committees on Armed Services of the Senate and the House of Representatives on the use of off-shore subsidiaries by contractors of the Department of Defense.
    (b) Matters Covered- The report shall comprehensively examine the rationale, implications, and costs and benefits for both the contractor and the Department of Defense in using off-shore subsidiaries, particularly in respect to—
       (1) tax liability (including corporate income taxes and payroll taxes);
       (2) legal liability;
       (3) compliance with cost accounting standards;
       (4) efficiency in contract performance;
       (5) contract management and contract oversight; and
       (6) such other areas as the Comptroller General determines appropriate.

#### SEC. 845. DEFENSE INDUSTRIAL SECURITY.

    (a) Defense Industrial Security-
       (1) IN GENERAL- Subchapter I of chapter 21 of title 10, United States Code, is amended by adding at the end the following new section:
          `Sec. 438. Defense industrial security
             `(a) Responsibility for Defense Industrial Security- The Secretary of Defense shall be responsible for the protection of classified information disclosed to contractors of the Department of Defense.
             `(b) Consistency With Executive Orders and Directives- The Secretary shall carry out the responsibility assigned under subsection (a) in a manner consistent with Executive Order 12829 (or any successor order to such executive order) and consistent with policies relating to the National Industrial Security Program (or any successor to such program).
             `(c) Performance of Industrial Security Functions for Other Agencies- The Secretary may perform industrial security functions for other agencies of the Federal government upon request or upon designation of the Department of Defense as executive agent for the National Industrial Security Program (or any successor to such program).
             `(d) Regulations and Policy Guidance- The Secretary shall prescribe, and from time to time revise, such regulations and policy guidance as are necessary to ensure the protection of classified information disclosed to contractors of the Department of Defense.
             `(e) Dedication of Resources- The Secretary shall ensure that sufficient resources are provided to staff, train, and support such personnel as are necessary to fully protect classified information disclosed to contractors of the Department of Defense.
             `(f) Biennial Report- The Secretary shall report biennially to the congressional defense committees on expenditures and activities of the Department of Defense in carrying out the requirements of this section. The Secretary shall submit the report at or about the same time that the President's budget is submitted pursuant to section 1105(a) of title 31, United States Code, in odd numbered years. The report shall be in an unclassified form (with a classified annex if necessary) and shall cover the activities of the Department of Defense in the preceding two fiscal years, including the following::::::`(1) The workforce responsible for carrying out the requirements of this section, including the number and experience of such workforce; training in the performance of industrial security functions; performance metrics; and resulting assessment of overall quality.
                `(2) A description of funds authorized, appropriated, or reprogrammed to carry out the requirements of this section, the budget execution of such funds, and the adequacy of budgets provided for performing such purpose.
                `(3) Statistics on the number of contractors handling classified information of the Department of Defense, and the percentage of such contractors who are subject to foreign ownership, control, or influence.
                `(4) Statistics on the number of violations identified, enforcement actions taken, and the percentage of such violations occurring at facilities of contractors subject to foreign ownership, control, or influence.
                `(5) An assessment of whether major contractors implementing the program have adequate enforcement programs and have trained their employees adequately in the requirements of the program.
                `(6) Trend data on attempts to compromise classified information disclosed to contractors of the Department of Defense to the extent that such data are available.'.
       (2) CLERICAL AMENDMENT- The table of sections at the beginning of subchapter I of chapter 21 of title 10, United States Code, is amended by adding at the end the following new item:
          `438. Defense industrial security.'.
    (b) Submission of First Biennial Report- Notwithstanding the deadline in subsection (f) of section 438 of title 10, United States Code, as added by this section, the first biennial report submitted after the date of the enactment of this Act pursuant to such subsection shall be submitted not later than September 1, 2009, and shall address the period from the date of the enactment of this Act to the issuance of such report.
    (c) Report on Improving Industrial Security- Not later than March 1, 2009, the Secretary of Defense shall submit to the congressional defense committees a report on improving industrial security, including, at a minimum, the following:
       (1) The actions taken or actions planned to implement the recommendations of the Comptroller General as embodied in the report entitled `Industrial Security: DOD Cannot Ensure Its Oversight of Contractors Under Foreign Influence Is Sufficient' (GAO-05-681; July 2005).
       (2) Other actions taken or action planned to improve industrial security.
       (3) An analysis of the impact of emerging financial arrangements such as sovereign wealth funds, hedge funds, and other new financial debt and credit arrangements on the Department's ability to identify and mitigate foreign ownership, control, or influence.
       (4) Any recommendations of the Secretary for modifying regulations and policy guidance prescribed pursuant to section 438(d) of title 10, United States Code, or other regulations or policy guidance addressing industrial security, to extend best practices for industrial security across the broadest possible range of defense contractors, and to improve industrial security generally.

### Subtitle F—Matters Relating to Iraq and Afghanistan
#### SEC. 851. CLARIFICATION AND MODIFICATION OF AUTHORITIES RELATING TO THE COMMISSION ON WARTIME CONTRACTING IN IRAQ AND AFGHANISTAN.

    (a) Nature of Commission- Subsection (a) of section 841 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 230) is amended by inserting `in the legislative branch' after `There is hereby established'.
    (b) Pay and Annuities of Members and Staff on Federal Reemployment- Subsection (e) of such is amended by adding at the end the following new paragraph:
             `(8) PAY AND ANNUITIES OF MEMBERS AND STAFF ON FEDERAL REEMPLOYMENT- If warranted by circumstances described in subparagraph (A) or (B) of section 8344(i)(1) of title 5, United States Code, or by circumstances described in subparagraph (A) or (B) of section 8468(f)(1) of such title, as applicable, a co-chairman of the Commission may exercise, with respect to the members and staff of the Commission, the same waiver authority as would be available to the Director of the Office of Personnel Management under such section.'.
    (c) Effective Date-
       (1) NATURE OF COMMISSION- The amendment made by subsection (a) shall take effect as of January 28, 2008, as if included in the enactment of the National Defense Authorization Act for Fiscal Year 2008.
       (2) PAY AND ANNUITIES- The amendment made by subsection (b) shall apply to members and staff of the Commission on Wartime Contracting in Iraq and Afghanistan appointed or employed, as the case may be, on or after that date.

#### SEC. 852. COMPREHENSIVE AUDIT OF SPARE PARTS PURCHASES AND DEPOT OVERHAUL AND MAINTENANCE OF EQUIPMENT FOR OPERATIONS IN IRAQ AND AFGHANISTAN.

    (a) Audits Required- The Army Audit Agency, the Navy Audit Service, and the Air Force Audit Agency shall each conduct thorough audits to identify potential waste, fraud, and abuse in the performance of the following:
       (1) Department of Defense contracts, subcontracts, and task and delivery orders for—
          (A) depot overhaul and maintenance of equipment for the military in Iraq and Afghanistan; and
          (B) spare parts for military equipment used in Iraq and Afghanistan; and
       (2) Department of Defense in-house overhaul and maintenance of military equipment used in Iraq and Afghanistan.
    (b) Comprehensive Audit Plan-
       (1) PLANS- The Army Audit Agency, the Navy Audit Service, and the Air Force Audit Agency shall, in coordination with the Inspector General of the Department of Defense, develop a comprehensive plan for a series of audits to discharge the requirements of subsection (a).
       (2) INCORPORATION INTO REQUIRED AUDIT PLAN- The plan developed under paragraph (1) shall be submitted to the Inspector General of the Department of Defense for incorporation into the audit plan required by section 842(b)(1) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 234; 10 U.S.C. 2302 note).
    (c) Independent Conduct of Audit Functions- All audit functions performed under this section, including audit planning and coordination, shall be performed in an independent manner.
    (d) Availability of Results- All audit reports resulting from audits under this section shall be made available to the Commission on Wartime Contracting in Iraq and Afghanistan established pursuant to section 841 of the National Defense Authorization Act for Fiscal Year 2008 (122 Stat. 230).
    (e) Construction- Nothing in this section shall be construed to require any agency of the Federal Government to duplicate audit work that an agency of the Federal Government has already performed.

#### SEC. 853. ADDITIONAL MATTERS REQUIRED TO BE REPORTED BY CONTRACTORS PERFORMING SECURITY FUNCTIONS IN AREAS OF COMBAT OPERATIONS.

    Section 862 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 254; 10 U.S.C. 2302 note) is amended—
       (1) in subsection (a)(2)(D)—
          (A) by striking `or' at the end of clause (ii); and
          (B) by inserting after clause (iii) the following new clauses:
                `(iv) a weapon is discharged against personnel performing private security functions in an area of combat operations or personnel performing such functions believe a weapon was so discharged; or
                `(v) active, non-lethal countermeasures (other than the discharge of a weapon) are employed by the personnel performing private security functions in an area of combat operations in response to a perceived immediate threat to such personnel;'; and
       (2) in subsection (b)(2)(B) in the matter preceding clause (i)—
          (A) by inserting `comply with and' before `ensure'; and
          (B) by striking `comply with—' and inserting `act in accordance with—'.

#### SEC. 854. ADDITIONAL CONTRACTOR REQUIREMENTS AND RESPONSIBILITIES RELATING TO ALLEGED CRIMES BY OR AGAINST CONTRACTOR PERSONNEL IN IRAQ AND AFGHANISTAN.

    (a) In General- Section 861(b) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 253; 10 U.S.C. 2302 note) is amended by adding the following new paragraphs:
             `(7) Mechanisms for ensuring that contractors are required to report offenses described in paragraph (6) that are alleged to have been committed by or against contractor personnel to appropriate investigative authorities.
             `(8) Responsibility for providing victim and witness protection and assistance to contractor personnel in connection with alleged offenses described in paragraph (6).
             `(9) Development of a requirement that a contractor shall provide to all contractor personnel who will perform work on a contract in Iraq or Afghanistan, before beginning such work, information on the following:
                `(A) How and where to report an alleged offense described in paragraph (6).
                `(B) Where to seek the assistance required by paragraph (8).'.
    (b) Implementation-
       (1) THROUGH MEMORANDUM OF UNDERSTANDING- The memorandum of understanding required by section 861(a) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 253; 10 U.S.C. 2302 note) shall be modified to address the requirements under the amendment made by subsection (a) not later than 120 days after the date of the enactment of this Act.
       (2) AS CONDITION OF CURRENT AND FUTURE CONTRACTS- The requirements under the amendment made by subsection (a) shall be included in each contract in Iraq or Afghanistan (as defined in section 864(a)(2) of Public Law 110-181; 2302 note) awarded on or after the date that is 180 days after the date of the enactment of this Act. Federal agencies shall make best efforts to provide for the inclusion of such requirements in covered contracts awarded before such date.
    (c) Reporting Requirement- Beginning not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall make publicly available a numerical accounting of alleged offenses described in section 861(b)(6) of Public Law 110-181 that have been reported under that section that occurred after the date of the enactment of this Act. The information shall be updated no less frequently than semi-annually.
    (d) Definitions- Section 864(a) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 253; 10 U.S.C. 2302 note) is amended—
       (1) by redesignating paragraphs (5) and (6) as paragraphs (6) and (7), respectively; and
       (2) by inserting after paragraph (4) the following new paragraph:
             `(5) CONTRACTOR PERSONNEL- The term `contractor personnel' means any person performing work under contract for the Department of Defense, the Department of State, or the United States Agency for International Development, in Iraq or Afghanistan, including individuals and subcontractors at any tier.'.

#### SEC. 855. SUSPENSION OF STATUTES OF LIMITATIONS WHEN CONGRESS AUTHORIZES THE USE OF MILITARY FORCE.

    Section 3287 of title 18, United States Code, is amended—
       (1) by inserting `or Congress has enacted a specific authorization for the use of the Armed Forces, as described in section 5(b) of the War Powers Resolution (50 U.S.C. 1544(b)),' after `is at war';
       (2) by inserting `or directly connected with or related to the authorized use of the Armed Forces' after `prosecution of the war';
       (3) by striking `three years' and inserting `5 years';
       (4) by striking `proclaimed by the President' and inserting `proclaimed by a Presidential proclamation, with notice to Congress,'; and
       (5) by adding at the end the following: `For purposes of applying such definitions in this section, the term `war' includes a specific authorization for the use of the Armed Forces, as described in section 5(b) of the War Powers Resolution (50 U.S.C. 1544(b)).'.

### Subtitle G—Governmentwide Acquisition Improvements
#### SEC. 861. SHORT TITLE.

    This subtitle may be cited as the ``Clean Contracting Act of 2008´´.

#### SEC. 862. LIMITATION ON LENGTH OF CERTAIN NONCOMPETITIVE CONTRACTS.

    (a) Civilian Agency Contracts- Section 303(d) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(d)) is amended by adding at the end the following new paragraph:
             `(3)(A) The contract period of a contract described in subparagraph (B) that is entered into by an executive agency pursuant to the authority provided under subsection (c)(2)—
                   `(i) may not exceed the time necessary—
                      `(I) to meet the unusual and compelling requirements of the work to be performed under the contract; and
                      `(II) for the executive agency to enter into another contract for the required goods or services through the use of competitive procedures; and
                   `(ii) may not exceed one year unless the head of the executive agency entering into such contract determines that exceptional circumstances apply.
                `(B) This paragraph applies to any contract in an amount greater than the simplified acquisition threshold.'.
    (b) Defense Contracts- Section 2304(d) of title 10, United States Code, is amended by adding at the end the following new paragraph:
             `(3)(A) The contract period of a contract described in subparagraph (B) that is entered into by an agency pursuant to the authority provided under subsection (c)(2)—
                   `(i) may not exceed the time necessary—
                      `(I) to meet the unusual and compelling requirements of the work to be performed under the contract; and
                      `(II) for the agency to enter into another contract for the required goods or services through the use of competitive procedures; and
                   `(ii) may not exceed one year unless the head of the agency entering into such contract determines that exceptional circumstances apply.
                `(B) This paragraph applies to any contract in an amount greater than the simplified acquisition threshold.'.

#### SEC. 863. REQUIREMENTS FOR PURCHASE OF PROPERTY AND SERVICES PURSUANT TO MULTIPLE AWARD CONTRACTS.

    (a) Regulations Required- Not later than one year after the date of the enactment of this Act, the Federal Acquisition Regulation shall be amended to require enhanced competition in the purchase of property and services by all executive agencies pursuant to multiple award contracts.
    (b) Content of Regulations-
       (1) IN GENERAL- The regulations required by subsection (a) shall provide, at a minimum, that each individual purchase of property or services in excess of the simplified acquisition threshold that is made under a multiple award contract shall be made on a competitive basis unless a contracting officer—
          (A) waives the requirement on the basis of a determination that—
             (i) one of the circumstances described in paragraphs (1) through (4) of section 303J(b) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253j(b)) or section 2304c(b) of title 10, United States Code, applies to such individual purchase; or
             (ii) a law expressly authorizes or requires that the purchase be made from a specified source; and
          (B) justifies the determination in writing.
       (2) COMPETITIVE BASIS PROCEDURES- For purposes of this subsection, an individual purchase of property or services is made on a competitive basis only if it is made pursuant to procedures that—
          (A) except as provided in paragraph (3), require fair notice of the intent to make that purchase (including a description of the work to be performed and the basis on which the selection will be made) to be provided to all contractors offering such property or services under the multiple award contract; and
          (B) afford all contractors responding to the notice a fair opportunity to make an offer and have that offer fairly considered by the official making the purchase.
       (3) EXCEPTION TO NOTICE REQUIREMENT-
          (A) IN GENERAL- Notwithstanding paragraph (2), and subject to subparagraph (B), notice may be provided to fewer than all contractors offering such property or services under a multiple award contract as described in subsection (d)(2)(A) if notice is provided to as many contractors as practicable.
          (B) LIMITATION ON EXCEPTION- A purchase may not be made pursuant to a notice that is provided to fewer than all contractors under subparagraph (A) unless—
             (i) offers were received from at least 3 qualified contractors; or
             (ii) a contracting officer of the executive agency determines in writing that no additional qualified contractors were able to be identified despite reasonable efforts to do so.
    (c) Public Notice Requirements Related to Sole Source Task or Delivery Orders-
       (1) PUBLIC NOTICE REQUIRED- Not later than one year after the date of the enactment of this Act, the Federal Acquisition Regulation shall be amended to require the head of each executive agency to—
          (A) publish on FedBizOpps notice of all sole source task or delivery orders in excess of the simplified acquisition threshold that are placed against multiple award contracts not later than 14 days after such orders are placed, except in the event of extraordinary circumstances or classified orders; and
          (B) disclose the determination required by subsection (b)(1) related to sole source task or delivery orders in excess of the simplified acquisition threshold placed against multiple award contracts through the same mechanism and to the same extent as the disclosure of documents containing a justification and approval required by section 2304(f)(1) of title 10, United States Code, and section 303(f)(1) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(f)(1)), except in the event of extraordinary circumstances or classified orders.
       (2) EXEMPTION- This subsection does not require the public availability of information that is exempt from public disclosure under section 552(b) of title 5, United States Code.
    (d) Definitions- In this section:
       (1) The term `executive agency' has the meaning given such term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)).
       (2) The term `individual purchase' means a task order, delivery order, or other purchase.
       (3) The term `multiple award contract' means—
          (A) a contract that is entered into by the Administrator of General Services under the multiple award schedule program referred to in section 2302(2)(C) of title 10, United States Code;
          (B) a multiple award task order contract that is entered into under the authority of sections 2304a through 2304d of title 10, United States Code, or sections 303H through 303K of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h through 253k); and
          (C) any other indefinite delivery, indefinite quantity contract that is entered into by the head of an executive agency with 2 or more sources pursuant to the same solicitation.
       (4) The term `sole source task or delivery order' means any order that does not follow the competitive procedures in subsection (b)(2) or (b)(3).
    (e) Applicability- The regulations required by subsection (a) shall apply to all individual purchases of property or services that are made under multiple award contracts on or after the effective date of such regulations, without regard to whether the multiple award contracts were entered into before, on, or after such effective date.
    (f) Repeal of Redundant Provision- Section 803 of the National Defense Authorization Act for Fiscal Year 2002 (Public Law 107-107; 10 U.S.C. 2304 note) is repealed.

#### SEC. 864. REGULATIONS ON THE USE OF COST-REIMBURSEMENT CONTRACTS.

    (a) In General- Not later than 270 days after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised to address the use of cost-reimbursement contracts.
    (b) Content- The regulations promulgated under subsection (a) shall include, at a minimum, guidance regarding—
       (1) when and under what circumstances cost-reimbursement contracts are appropriate;
       (2) the acquisition plan findings necessary to support a decision to use cost-reimbursement contracts; and
       (3) the acquisition workforce resources necessary to award and manage cost-reimbursement contracts.
    (c) Inspector General Review- Not later than one year after the regulations required by subsection (a) are promulgated, the Inspector General for each executive agency shall review the use of cost-reimbursement contracts by such agency for compliance with such regulations and shall include the results of the review in the Inspector General's next semiannual report.
    (d) Report- Subject to subsection (f), the Director of the Office of Management and Budget shall submit an annual report to Congressional committees identified in subsection (e) on the use of cost-reimbursement contracts and task or delivery orders by all executive agencies. The report shall be submitted no later than March 1 and shall cover the fiscal year ending September 30 of the prior year. The report shall include—
       (1) the total number and value of contracts awarded and orders issued during the covered fiscal year;
       (2) the total number and value of cost-reimbursement contracts awarded and orders issued during the covered fiscal year; and
       (3) an assessment of the effectiveness of the regulations promulgated pursuant to subsection (a) in ensuring the appropriate use of cost-reimbursement contracts.
    (e) Congressional Committees Defined- The report required by subsection (d) shall be submitted to the Committee on Oversight and Government Reform of the House of Representatives; the Committee on Homeland Security and Governmental Affairs of the Senate; the Committees on Appropriations of the House of Representatives and the Senate; and, in the case of the Department of Defense and the Department of Energy, the Committees on Armed Services of the Senate and the House of Representatives.
    (f) Requirements Limited to Certain Agencies and Years-
       (1) AGENCIES- The requirement in subsection (c) shall apply only to those executive agencies that awarded contracts or issued orders (under contracts previously awarded) in a total amount of at least $1,000,000,000 in the fiscal year proceeding the fiscal year in which the assessments and reports are submitted.
       (2) YEARS- The report required by subsection (d) shall be submitted from March 1, 2009, until March 1, 2014.
    (g) Executive Agency Defined- In this section, the term `executive agency' has the meaning given such term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)).

#### SEC. 865. PREVENTING ABUSE OF INTERAGENCY CONTRACTS.

    (a) Office of Management and Budget Policy Guidance-
       (1) REPORT AND GUIDELINES- Not later than one year after the date of the enactment of this Act, the Director of the Office of Management and Budget shall—
          (A) submit to Congress a comprehensive report on interagency acquisitions, including their frequency of use, management controls, cost-effectiveness, and savings generated; and
          (B) issue guidelines to assist the heads of executive agencies in improving the management of interagency acquisitions.
       (2) MATTERS COVERED BY GUIDELINES- For purposes of paragraph (1)(B), the Director shall include guidelines on the following matters:
          (A) Procedures for the use of interagency acquisitions to maximize competition, deliver best value to executive agencies, and minimize waste, fraud, and abuse.
          (B) Categories of contracting inappropriate for interagency acquisition.
          (C) Requirements for training acquisition workforce personnel in the proper use of interagency acquisitions.
    (b) Regulations Required-
       (1) IN GENERAL- Not later than one year after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised to require that all interagency acquisitions—
          (A) include a written agreement between the requesting agency and the servicing agency assigning responsibility for the administration and management of the contract;
          (B) include a determination that an interagency acquisition is the best procurement alternative; and
          (C) include sufficient documentation to ensure an adequate audit.
       (2) MULTI-AGENCY CONTRACTS- Not later than one year after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised to require any multi-agency contract entered into by an executive agency after the effective date of such regulations to be supported by a business case analysis detailing the administration of such contract, including an analysis of all direct and indirect costs to the Federal Government of awarding and administering such contract and the impact such contract will have on the ability of the Federal Government to leverage its purchasing power.
    (c) Agency Reporting Requirement- The senior procurement executive for each executive agency shall, as directed by the Director of the Office of Management and Budget, submit to the Director annual reports on the actions taken by the executive agency pursuant to the guidelines issued under subsection (a).
    (d) Definitions- In this section:
       (1) The term `executive agency' has the meaning given such term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)), except that, in the case of a military department, it means the Department of Defense.
       (2) The term `head of executive agency' means the head of an executive agency except that, in the case of a military department, the term means the Secretary of Defense.
       (3) The term `interagency acquisition' means a procedure by which an executive agency needing supplies or services (the requesting agency) obtains them from another executive agency (the servicing agency). The term includes acquisitions under section 1535 of title 31, United States Code (commonly referred to as the `Economy Act'), Federal Supply Schedules above $500,000, and Governmentwide acquisition contracts.
       (4) The term `multi-agency contract' means a task or delivery order contract established for use by more than one executive agency to obtain supplies and services, consistent with section 1535 of title 31, United States Code (commonly referred to as the `Economy Act').

#### SEC. 866. LIMITATIONS ON TIERING OF SUBCONTRACTORS.

    (a) Regulations- Not later than one year after the date of the enactment of this Act, the Federal Acquisition Regulation shall be amended, for executive agencies other than the Department of Defense, to minimize the excessive use by contractors of subcontractors, or of tiers of subcontractors, that add no or negligible value, and to ensure that neither a contractor nor a subcontractor receives indirect costs or profit on work performed by a lower-tier subcontractor to which the higher-tier contractor or subcontractor adds no, or negligible, value (but not to limit charges for indirect costs and profit based on the direct costs of managing lower-tier subcontracts).
    (b) Covered Contracts- This section applies to any cost-reimbursement type contract or task or delivery order in an amount greater than the simplified acquisition threshold (as defined by section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)).
    (c) Rule of Construction- Nothing in this section shall be construed as limiting the ability of the Department of Defense to implement more restrictive limitations on the tiering of subcontractors.
    (d) Applicability- The Department of Defense shall continue to be subject to guidance on limitations on tiering of subcontractors issued by the Department pursuant to section 852 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2340).
    (e) Executive Agency Defined- In this section, the term `executive agency' has the meaning given such term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)).

#### SEC. 867. LINKING OF AWARD AND INCENTIVE FEES TO ACQUISITION OUTCOMES.

    (a) Guidance for Executive Agencies on Linking of Award and Incentive Fees to Acquisition Outcomes- Not later than 1 year after the date of the enactment of this Act, the Federal Acquisition Regulation shall be amended to provide executive agencies other than the Department of Defense with instructions, including definitions, on the appropriate use of award and incentive fees in Federal acquisition programs.
    (b) Elements- The regulations under subsection (a) shall—
       (1) ensure that all new contracts using award fees link such fees to acquisition outcomes (which shall be defined in terms of program cost, schedule, and performance);
       (2) establish standards for identifying the appropriate level of officials authorized to approve the use of award and incentive fees in new contracts;
       (3) provide guidance on the circumstances in which contractor performance may be judged to be `excellent' or `superior' and the percentage of the available award fee which contractors should be paid for such performance;
       (4) establish standards for determining the percentage of the available award fee, if any, which contractors should be paid for performance that is judged to be `acceptable', `average', `expected', `good', or `satisfactory';
       (5) ensure that no award fee may be paid for contractor performance that is judged to be below satisfactory performance or performance that does not meet the basic requirements of the contract;
       (6) provide specific direction on the circumstances, if any, in which it may be appropriate to roll over award fees that are not earned in one award fee period to a subsequent award fee period or periods;
       (7) ensure consistent use of guidelines and definitions relating to award and incentive fees across the Federal Government;
       (8) ensure that each executive agency—
          (A) collects relevant data on award and incentive fees paid to contractors; and
          (B) has mechanisms in place to evaluate such data on a regular basis;
       (9) include performance measures to evaluate the effectiveness of award and incentive fees as a tool for improving contractor performance and achieving desired program outcomes; and
       (10) provide mechanisms for sharing proven incentive strategies for the acquisition of different types of products and services among contracting and program management officials.
    (c) Guidance for Department of Defense- The Department of Defense shall continue to be subject to guidance on award and incentive fees issued by the Secretary of Defense pursuant to section 814 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2321).
    (d) Executive Agency Defined- In this section, the term `executive agency' has the meaning given such term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)).

#### SEC. 868. MINIMIZING ABUSE OF COMMERCIAL SERVICES ITEM AUTHORITY.

    (a) Regulations Required- Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulation shall be amended with respect to the procurement of commercial services.
    (b) Applicability of Commercial Procedures-
       (1) SERVICES OF A TYPE SOLD IN MARKETPLACE- The regulations modified pursuant to subsection (a) shall ensure that services that are not offered and sold competitively in substantial quantities in the commercial marketplace, but are of a type offered and sold competitively in substantial quantities in the commercial marketplace, may be treated as commercial items for purposes of section 254b of title 41, United States Code (relating to truth in negotiations), only if the contracting officer determines in writing that the offeror has submitted sufficient information to evaluate, through price analysis, the reasonableness of the price for such services.
       (2) INFORMATION SUBMITTED- To the extent necessary to make a determination under paragraph (1), the contracting officer may request the offeror to submit—
          (A) prices paid for the same or similar commercial items under comparable terms and conditions by both government and commercial customers; and
          (B) if the contracting officer determines that the information described in subparagraph (A) is not sufficient to determine the reasonableness of price, other relevant information regarding the basis for price or cost, including information on labor costs, material costs, and overhead rates.

#### SEC. 869. ACQUISITION WORKFORCE DEVELOPMENT STRATEGIC PLAN.

    (a) Purpose- The purpose of this section is to authorize the preparation and completion of a plan (to be known as the `Acquisition Workforce Development Strategic Plan') for Federal agencies other than the Department of Defense to develop a specific and actionable 5-year plan to increase the size of the acquisition workforce, and to operate a government-wide acquisition intern program, for such Federal agencies.
    (b) Establishment of Plan- The Associate Administrator for Acquisition Workforce Programs designated under section 855(a) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 251; 41 U.S.C. 433(a)) shall be responsible for the management, oversight, and administration of the Acquisition Workforce Development Strategic Plan in cooperation and consultation with the Office of Federal Procurement Policy and the assistance of the Federal Acquisition Institute.
    (c) Criteria- The Acquisition Workforce Development Strategic Plan shall include, at a minimum, an examination of the following matters:
       (1) The variety and complexity of acquisitions conducted by each Federal agency covered by the plan, and the workforce needed to effectively carry out such acquisitions.
       (2) The development of a sustainable funding model to support efforts to hire, retain, and train an acquisition workforce of appropriate size and skill to effectively carry out the acquisition programs of the Federal agencies covered by the plan, including an examination of interagency funding methods and a discussion of how the model of the Defense Acquisition Workforce Development Fund could be applied to civilian agencies.
       (3) Any strategic human capital planning necessary to hire, retain, and train an acquisition workforce of appropriate size and skill at each Federal agency covered by the plan.
       (4) Methodologies that Federal agencies covered by the plan can use to project future acquisition workforce personnel hiring requirements, including an appropriate distribution of such personnel across each category of positions designated as acquisition workforce personnel under section 37(j) of the Office of Federal Procurement Policy Act (41 U.S.C. 433(j)).
       (5) Government-wide training standards and certification requirements necessary to enhance the mobility and career opportunities of the Federal acquisition workforce within the Federal agencies covered by the plan.
       (6) If the Associate Administrator recommends as part of the plan a growth in the acquisition workforce of the Federal agencies covered by the plan below 25 percent over the next 5 years, an examination of each of the matters specified in paragraphs (1) through (5) in the context of a 5-year plan that increases the size of such acquisition workforce by not less than 25 percent, or an explanation why such a level of growth would not be in the best interest of the Federal Government.
    (d) Deadline for Completion- The Acquisition Workforce Development Strategic Plan shall be completed not later than one year after the date of the enactment of this Act and in a fashion that allows for immediate implementation of its recommendations and guidelines.
    (e) Funds- The Acquisition Workforce Development Strategic Plan shall be funded from the Acquisition Workforce Training Fund under section 37(h)(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 433(h)(3)).

#### SEC. 870. CONTINGENCY CONTRACTING CORPS.

    (a) Establishment- The Office of Federal Procurement Policy Act (41 U.S.C. 403 et seq.) is amended by adding at the end the following new section:
             `SEC. 44. CONTINGENCY CONTRACTING CORPS.
          `(a) Establishment- The Administrator of General Services, pursuant to policies established by the Office of Management and Budget, and in consultation with the Secretary of Defense and the Secretary of Homeland Security, shall establish a Governmentwide Contingency Contracting Corps (in this section referred to as the `Corps'). The members of the Corps shall be available for deployment in responding to an emergency or major disaster, or a contingency operation, both within or outside the continental United States.
          `(b) Applicability- The authorities provided in this section apply with respect to any procurement of property or services by or for an executive agency that, as determined by the head of such executive agency, are to be used—
             `(1) in support of a contingency operation as defined in section 101(a)(13) of title 10, United States Code; or
             `(2) to respond to an emergency or major disaster as defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122).
          `(c) Membership- Membership in the Corps shall be voluntary and open to all Federal employees and members of the Armed Forces who are members of the Federal acquisition workforce.
          `(d) Education and Training- The Administrator may, in consultation with the Director of the Federal Acquisition Institute and the Chief Acquisition Officers Council, establish educational and training requirements for members of the Corps. Education and training carried out pursuant to such requirements shall be paid for from funds available in the acquisition workforce training fund established pursuant to section 37(h)(3) of this Act.
          `(e) Salary- The salary for a member of the Corps shall be paid—
             `(1) in the case of a member of the Armed Forces, out of funds available to the Armed Force concerned; and
             `(2) in the case of a Federal employee, out of funds available to the employing agency.
          `(f) Authority to Deploy the Corps-
             `(1) The Director of the Office of Management and Budget shall have the authority, upon request by an executive agency, to determine when members of the Corps shall be deployed, with the concurrence of the head of the agency or agencies employing the members to be deployed.
             `(2) Nothing in this section shall preclude the Secretary of Defense or the Secretary's designee from deploying members of the Armed Forces or civilian personnel of the Department of Defense in support of a contingency operation as defined in section 101(a)(13) of title 10, United States Code.
          `(g) Annual Report-
             `(1) IN GENERAL- The Administrator of General Services shall provide to the Committee on Homeland Security and Governmental Affairs and the Committee on Armed Services of the Senate and the Committee on Oversight and Government Reform and the Committee on Armed Services of the House of Representatives an annual report on the status of the Contingency Contracting Corps as of September 30 of each fiscal year.
             `(2) CONTENT- At a minimum, each report under paragraph (1) shall include the number of members of the Contingency Contracting Corps, the total cost of operating the program, the number of deployments of members of the program, and the performance of members of the program in deployment.'.
    (b) Clerical Amendment- The table of contents for that Act (contained in section 1(b) of that Act) is amended by adding at the end the following new item:
             `Sec. 44. Contingency Contracting Corps.'.

#### SEC. 871. ACCESS OF GOVERNMENT ACCOUNTABILITY OFFICE TO CONTRACTOR EMPLOYEES.

    (a) Civilian Agencies- Section 304C of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 254d) is amended in subsection (c)(1) by inserting before the period the following: `and to interview any current employee regarding such transactions'.
    (b) Defense Agencies- Section 2313 of title 10, United States Code, is amended in subsection (c)(1) by inserting before the period the following: `and to interview any current employee regarding such transactions'.

#### SEC. 872. DATABASE FOR FEDERAL AGENCY CONTRACT AND GRANT OFFICERS AND SUSPENSION AND DEBARMENT OFFICIALS.

    (a) In General- Subject to the authority, direction, and control of the Director of the Office of Management and Budget, the Administrator of General Services shall establish, not later than one year after the date of the enactment of this Act, and maintain a database of information regarding the integrity and performance of certain persons awarded Federal agency contracts and grants for use by Federal agency officials having authority over contracts and grants.
    (b) Persons Covered- The database shall cover the following:
       (1) Any person awarded a Federal agency contract or grant in excess of $500,000, if any information described in subsection (c) exists with respect to such person.
       (2) Any person awarded such other category or categories of Federal agency contract as the Federal Acquisition Regulation may provide, if such information exists with respect to such person.
    (c) Information Included- With respect to a covered person the database shall include information (in the form of a brief description) for the most recent 5-year period regarding the following:
       (1) Each civil or criminal proceeding, or any administrative proceeding, in connection with the award or performance of a contract or grant with the Federal Government with respect to the person during the period to the extent that such proceeding results in the following dispositions:
          (A) In a criminal proceeding, a conviction.
          (B) In a civil proceeding, a finding of fault and liability that results in the payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more.
          (C) In an administrative proceeding, a finding of fault and liability that results in—
             (i) the payment of a monetary fine or penalty of $5,000 or more; or
             (ii) the payment of a reimbursement, restitution, or damages in excess of $100,000.
          (D) To the maximum extent practicable and consistent with applicable laws and regulations, in a criminal, civil, or administrative proceeding, a disposition of the matter by consent or compromise with an acknowledgment of fault by the person if the proceeding could have led to any of the outcomes specified in subparagraph (A), (B), or (C).
       (2) Each Federal contract and grant awarded to the person that was terminated in such period due to default.
       (3) Each Federal suspension and debarment of the person in that period.
       (4) Each Federal administrative agreement entered into by the person and the Federal Government in that period to resolve a suspension or debarment proceeding.
       (5) Each final finding by a Federal official in that period that the person has been determined not to be a responsible source under subparagraph (C) or (D) of section 4(7) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(7)).
       (6) Such other information as shall be provided for purposes of this section in the Federal Acquisition Regulation.
       (7) To the maximum extent practical, information similar to the information covered by paragraphs (1) through (4) in connection with the award or performance of a contract or grant with a State government.
    (d) Requirements Relating to Information in Database-
       (1) DIRECT INPUT AND UPDATE- The Administrator shall design and maintain the database in a manner that allows the appropriate Federal agency officials to directly input and update information in the database relating to actions such officials have taken with regard to contractors or grant recipients.
       (2) TIMELINESS AND ACCURACY- The Administrator shall develop policies to require—
          (A) the timely and accurate input of information into the database;
          (B) the timely notification of any covered person when information relevant to the person is entered into the database; and
          (C) opportunities for any covered person to submit comments pertaining to information about such person for inclusion in the database.
    (e) Use of Database-
       (1) AVAILABILITY TO GOVERNMENT OFFICIALS- The Administrator shall ensure that the information in the database is available to appropriate acquisition officials of Federal agencies, to such other government officials as the Administrator determines appropriate, and, upon request, to the Chairman and Ranking Member of the committees of Congress having jurisdiction.
       (2) REVIEW AND ASSESSMENT OF DATA-
          (A) IN GENERAL- Before awarding a contract or grant in excess of the simplified acquisition threshold under section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)), the Federal agency official responsible for awarding the contract or grant shall review the database and shall consider all information in the database with regard to any offer or proposal, and, in the case of a contract, shall consider other past performance information available with respect to the offeror in making any responsibility determination or past performance evaluation for such offeror.
          (B) DOCUMENTATION IN CONTRACT FILE- The contract file for each contract of a Federal agency in excess of the simplified acquisition threshold shall document the manner in which the material in the database was considered in any responsibility determination or past performance evaluation.
    (f) Disclosure in Applications- Not later than one year after the date of the enactment of this Act, the Federal Acquisition Regulation shall be amended to require that persons with Federal agency contracts and grants valued in total greater than $10,000,000 shall—
       (1) submit to the Administrator, in a manner determined appropriate by the Administrator, the information subject to inclusion in the database as listed in subsection (c) current as of the date of submittal of such information under this subsection; and
       (2) update such information on a semiannual basis.
    (g) Rulemaking- The Administrator shall promulgate such regulations as may be necessary to carry out this section.

#### SEC. 873. ROLE OF INTERAGENCY COMMITTEE ON DEBARMENT AND SUSPENSION.

    (a) Requirement- The Interagency Committee on Debarment and Suspension shall—
       (1) resolve issues regarding which of several Federal agencies is the lead agency having responsibility to initiate suspension or debarment proceedings;
       (2) coordinate actions among interested agencies with respect to such action;
       (3) encourage and assist Federal agencies in entering into cooperative efforts to pool resources and achieve operational efficiencies in the Governmentwide suspension and debarment system;
       (4) recommend to the Office of Management and Budget changes to Government suspension and debarment system and its rules, if such recommendations are approved by a majority of the Interagency Committee;
       (5) authorize the Office of Management and Budget to issue guidelines that implement those recommendations;
       (6) authorize the chair of the Committee to establish subcommittees as appropriate to best enable the Interagency Committee to carry out its functions; and
       (7) submit to Congress an annual report on—
          (A) the progress and efforts to improve the suspension and debarment system;
          (B) member agencies' active participation in the committee's work; and
          (C) a summary of each agency's activities and accomplishments in the Governmentwide debarment system.
    (b) Definition- The term `Interagency Committee on Debarment and Suspension' means such committee constituted under sections 4 and 5 and of Executive Order No. 12549.

#### SEC. 874. IMPROVEMENTS TO THE FEDERAL PROCUREMENT DATA SYSTEM.

    (a) Enhanced Transparency on Interagency Contracting and Other Transactions- Not later than one year after the date of the enactment of this Act, the Director of the Office of Management and Budget shall direct appropriate revisions to the Federal Procurement Data System or any successor system to facilitate the collection of complete, timely, and reliable data on interagency contracting actions and on transactions other than contracts, grants, and cooperative agreements issued pursuant to section 2371 of title 10, United States Code, or similar authorities. The Director shall ensure that data, consistent with what is collected for contract actions, is obtained on—
       (1) interagency contracting actions, including data at the task or delivery-order level; and
       (2) other transactions, including the initial award and any subsequent modifications awarded or orders issued (other than transactions that are reported through the Federal Assistance Awards Data System).
    (b) Amendment- Subsection (d) of section 19 of the Office of Federal Procurement Policy Act (41 U.S.C. 417(d)) is amended to read as follows:
          `(d) Transmission and Data Entry of Information- The head of each executive agency shall ensure the accuracy of the information included in the record established and maintained by such agency under subsection (a) and shall transmit in a timely manner such information to the General Services Administration for entry into the Federal Procurement Data System referred to in section 6(d)(4), or any successor system.'.
    (c) Report to Congress-
       (1) REPORT REQUIRED- Not later than 180 days after the date of the enactment of this Act, the Administrator of General Services shall submit to Congress a report.
       (2) CONTENTS OF REPORT- The report shall contain the following:
          (A) A list of all databases that include information about Federal contracting and Federal grants.
          (B) Recommendations for further legislation or administrative action that the Administrator considers appropriate to create a centralized, comprehensive Federal contracting and Federal grant database.

### Subtitle H—Other Matters
#### SEC. 881. EXPANSION OF AUTHORITY TO RETAIN FEES FROM LICENSING OF INTELLECTUAL PROPERTY.

    Section 2260 of title 10, United States Code, is amended—
       (1) in subsection (a), by inserting `or the Secretary of Homeland Security' after `Secretary of Defense'; and
       (2) in subsection (f)—
          (A) by striking `(f) Definitions- In this section, the' and inserting the following:
          `(f) Definitions- In this section:
             `(1) The'; and
          (B) by adding at the end the following new paragraph:
             `(2) The term `Secretary concerned' has the meaning provided in section 101(a)(9) of this title and also includes—
                `(A) the Secretary of Defense, with respect to matters concerning the Defense Agencies and Department of Defense Field Activities; and
                `(B) the Secretary of Homeland Security, with respect to matters concerning the Coast Guard when it is not operating as a service in the Department of the Navy.'.

#### SEC. 882. REPORT ON MARKET RESEARCH.

    Not later than October 1, 2009, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the implementation of section 826 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 10 U.S.C. 2377 note) and the amendments made by that section. The report shall address—
       (1) actions taken by the Department of Defense to implement the amendments made by section 826(a) of such Act to section 2377 of title 10, United States Code, with a particular focus on—
          (A) the guidance issued by the Department on the performance of market research;
          (B) the market research being performed pursuant to such guidance; and
          (C) the results of such guidance and market research;
       (2) training tools the Secretary of Defense has developed to assist contracting officials in performing market research in accordance with section 826(b) of such Act;
       (3) actions the Department of Defense intends to take to further implement such section 826 and the amendments made by that section, including dissemination of best practices and corrective actions where necessary; and
       (4) such other matters as the Secretary considers appropriate.

#### SEC. 883. REPORT RELATING TO MUNITIONS.

    Not later than March 1, 2009, the Secretary of Defense shall submit to the congressional defense committees a report detailing how 60mm and 81mm munitions used by the Armed Forces are procured, including, where relevant, an explanation of the decision to procure such munitions from non-domestic sources and the justification for awarding contracts to non-domestic sources.

#### SEC. 884. MOTOR CARRIER FUEL SURCHARGES.

    (a) Pass Through to Cost Bearer- The Secretary of Defense shall take appropriate actions to ensure that, to the maximum extent practicable, in all carriage contracts in which a fuel-related adjustment is provided for, any fuel-related adjustment is passed through to the person who bears the cost of the fuel that the adjustment relates to.
    (b) Use of Contract Clause- The actions taken by the Secretary under subsection (a) shall include the insertion of a contract clause, with appropriate flow-down requirements, into all contracts with motor carriers, brokers, or freight forwarders providing or arranging truck transportation or services in which a fuel-related adjustment is provided for.
    (c) Disclosure- The Secretary shall publicly disclose any decision by the Department of Defense to pay fuel-related adjustments under contracts (or a category of contracts) covered by this section.
    (d) Report- Not later than 270 days after the date of the enactment of this Act, the Secretary shall submit to the committees on Armed Services of the Senate and the House of Representatives a report on the actions taken in accordance with the requirements of subsection (a).

#### SEC. 885. PROCUREMENT BY STATE AND LOCAL GOVERNMENTS OF EQUIPMENT FOR HOMELAND SECURITY AND EMERGENCY RESPONSE ACTIVITIES THROUGH THE DEPARTMENT OF DEFENSE.

    (a) Expansion of Procurement Authority to Include Equipment for Homeland Security and Emergency Response Activities-
       (1) PROCEDURES- Subsection (a)(1) of section 381 of title 10, United States Code, is amended—
          (A) in subsection (a)(1)—
             (i) in the matter preceding subparagraph (A)—
                (I) by striking `law enforcement'; and
                (II) by inserting `, homeland security, and emergency response' after `counter-drug';
             (ii) in subparagraph (A)—
                (I) in the matter preceding clause (i), by inserting `, homeland security, or emergency response' after `counter-drug'; and
                (II) in clause (i), by striking `law enforcement';
             (iii) in subparagraph (C), by striking `law enforcement' each place it appears; and
             (iv) in subparagraph (D), by striking `law enforcement'.
       (2) GSA CATALOG- Subsection (c) of such section is amended—
          (A) by striking `law enforcement'; and
          (B) by inserting `, homeland security, and emergency response' after `counter-drug'.
       (3) DEFINITIONS- Subsection (d) of such section is amended—
          (A) in paragraph (2), by inserting `or emergency response' after `law enforcement' both places it appears; and
          (B) in paragraph (3)—
             (i) by striking `law enforcement';
             (ii) by inserting `, homeland security, and emergency response' after `counter-drug'; and
             (iii) by inserting `and, in the case of equipment for homeland security activities, may not include any equipment that is not found on the Authorized Equipment List published by the Department of Homeland Security' after `purposes'.
    (b) Clerical Amendments-
       (1) HEADING AMENDMENT- The heading of such section is amended to read as follows:-`Sec. 381. Procurement of equipment by State and local governments through the Department of Defense: equipment for counter-drug, homeland security, and emergency response activities'.
       (2) TABLE OF SECTIONS- The table of sections at the beginning of chapter 18 of such title is amended by striking the item relating to section 381 and inserting the following new item:
                   `381. Procurement of equipment by State and local governments through the Department of Defense: equipment for counter-drug, homeland security, and emergency response activities.'.

#### SEC. 886. REVIEW OF IMPACT OF COVERED SUBSIDIES ON ACQUISITION OF KC-45 AIRCRAFT.

    (a) Review of Covered Subsidies Required- The Secretary of Defense, not later than 10 days after a ruling by the World Trade Organization that the United States, the European Union, or any political entity within the United States or the European Union, has provided a covered subsidy to a manufacturer of large commercial aircraft, shall begin a review, as described in subsection (b), of the impact of such covered subsidy on the source selection for the KC-45 Aerial Refueling Aircraft Program.
    (b) Performance of the Review- In performing the review required by subsection (a), the Secretary of Defense shall consult with experts within the Department of Defense, the Office of Management and Budget, the Office of the United States Trade Representative, and other agencies and offices of the Federal Government, and with such other experts outside the Government as the Secretary considers appropriate, on the potential impact of a covered subsidy on the source selection process for the KC-45 Aerial Refueling Aircraft Program.
    (c) Completion of Review- The Secretary of Defense shall complete the review required by subsection (a) not later than 90 days after the World Trade Organization has completed ruling on all cases involving the allegation of a covered subsidy provided to a manufacturer of large commercial aircraft pending at the World Trade Organization as of the date of the enactment of this Act.
    (d) Report on Review- Not later than 30 days after the completion of the review required by subsection (a), the Secretary of Defense shall provide a report to the congressional defense committees on the findings of the review, together with any recommendations the Secretary considers appropriate.
    (e) Definitions- In this section:
       (1) The term `covered subsidy' means a subsidy found to constitute a violation of the Agreement on Subsidies and Countervailing Measures.
       (2) The term `Agreement on Subsidies and Countervailing Measures' means the agreement described in section 101(d)(12) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(12)).
       (3) The term `source selection', with respect to a program of the Department of Defense, means the selection, through the use of competitive procedures or such other procurement procedures as may be applicable, of a contractor to perform a contract to carry out the program.

#### SEC. 887. REPORT ON THE IMPLEMENTATION OF EARNED VALUE MANAGEMENT AT THE DEPARTMENT OF DEFENSE.

    (a) In General- The Secretary of Defense shall prepare a report on the implementation by the Department of Defense of earned value management. The report shall include, at a minimum, the following:
       (1) A discussion of the regulations and guidance of the Department applicable to the use and implementation of earned value management.
       (2) A discussion of the relative value of earned value management as a tool for program managers and senior Department officials.
       (3) A discussion of specific challenges the Department faces in successfully using earned value management because of the nature of the culture, history, systems, and activities of the Department, particularly with regard to requirements and funding instability.
       (4) A discussion of the methodology of the Department for earned value management implementation, including data quality issues, training, and information technology systems used to integrate and transmit earned value management data.
       (5) An evaluation of the accuracy of the earned value management data provided by vendors to the Federal Government concerning acquisition categories I and II programs, with a discussion of the impact of this data on the ability of the Department to achieve program objectives.
       (6) A description of the criteria used by the Department to evaluate the success of earned value management in delivering program objectives, with illustrative data and examples covering not less than three years.
       (7) Recommendations for improving earned value management and its implementation within the Department, including a discussion of the merits of possible alternatives.
    (b) Submission of Report- Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall submit the report required by subsection (a) to the Committees on Armed Services of the Senate and of the House of Representatives.
    (c) Definition- In this section, the term `earned value management' has the meaning given that term in section 300 of part 7 of Office of Management and Budget Circular A-11 as published in June 2008.