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[House Report 111-124]
[From the U.S. Government Publishing Office]

111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-124

======================================================================
 
              WEAPON SYSTEMS ACQUISTION REFORM ACT OF 2009

                                _______
                                

                  May 20, 2009.--Ordered to be printed

                                _______
                                

            Mr. Skelton, from the committee on conference, 
                        submitted the following

                           CONFERENCE REPORT

                         [To accompany S. 454]

      The committee of conference on the disagreeing votes of 
the two Houses on the amendment of the House to the bill (S. 
454), to improve the organization and procedures of the 
Department of Defense for the acquisition of major weapon 
systems, and for other purposes, having met, after full and 
free conference, have agreed to recommend and do recommend to 
their respective Houses as follows:
      That the Senate recede from its disagreement to the 
amendment of the House and agree to the same with an amendment 
as follows:
      In lieu of the matter proposed to be inserted by the 
House amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Weapon 
Systems Acquisition Reform Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act 
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

                    TITLE I--ACQUISITION ORGANIZATION

Sec. 101. Cost assessment and program evaluation.
Sec. 102. Directors of Developmental Test and Evaluation and Systems 
          Engineering.
Sec. 103. Performance assessments and root cause analyses for major 
          defense acquisition programs.
Sec. 104. Assessment of technological maturity of critical technologies 
          of major defense acquisition programs by the Director of 
          Defense Research and Engineering.
Sec. 105. Role of the commanders of the combatant commands in 
          identifying joint military requirements.

                      TITLE II--ACQUISITION POLICY

Sec. 201. Consideration of trade-offs among cost, schedule, and 
          performance objectives in Department of Defense acquisition 
          programs.
Sec. 202. Acquisition strategies to ensure competition throughout the 
          lifecycle of major defense acquisition programs.
Sec. 203. Prototyping requirements for major defense acquisition 
          programs.
Sec. 204. Actions to identify and address systemic problems in major 
          defense acquisition programs prior to Milestone B approval.
Sec. 205. Additional requirements for certain major defense acquisition 
          programs.
Sec. 206. Critical cost growth in major defense acquisition programs.
Sec. 207. Organizational conflicts of interest in major defense 
          acquisition programs.

              TITLE III--ADDITIONAL ACQUISITION PROVISIONS

Sec. 301. Awards for Department of Defense personnel for excellence in 
          the acquisition of products and services.
Sec. 302. Earned value management.
Sec. 303. Expansion of national security objectives of the national 
          technology and industrial base.
Sec. 304. Comptroller General of the United States reports on costs and 
          financial information regarding major defense acquisition 
          programs.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) The term ``congressional defense committees'' 
        has the meaning given that term in section 101(a)(16) 
        of title 10, United States Code.
            (2) The term ``major defense acquisition program'' 
        has the meaning given that term in section 2430 of 
        title 10, United States Code.
            (3) The term ``major weapon system'' has the 
        meaning given that term in section 2379(d) of title 10, 
        United States Code.

                   TITLE I--ACQUISITION ORGANIZATION

SEC. 101. COST ASSESSMENT AND PROGRAM EVALUATION.

    (a) Director of Cost Assessment and Program Evaluation.--
            (1) In general.--Chapter 4 of title 10, United 
        States Code, is amended by inserting after section 139b 
        the following new section:

``Sec. 139c. Director of Cost Assessment and Program Evaluation

    ``(a) Appointment.--There is a Director of Cost Assessment 
and Program Evaluation in the Department of Defense, appointed 
by the President, by and with the advice and consent of the 
Senate.
    ``(b) Independent Advice to Secretary of Defense.--(1) The 
Director of Cost Assessment and Program Evaluation is the 
principal advisor to the Secretary of Defense and other senior 
officials of the Department of Defense, and shall provide 
independent analysis and advice to such officials, on the 
following matters:
            ``(A) Matters assigned to the Director pursuant to 
        this section and section 2334 of this title.
            ``(B) Matters assigned to the Director by the 
        Secretary pursuant to section 113 of this title.
    ``(2) The Director may communicate views on matters within 
the responsibility of the Director directly to the Secretary of 
Defense and the Deputy Secretary of Defense without obtaining 
the approval or concurrence of any other official within the 
Department of Defense.
    ``(c) Deputy Directors.--There are two Deputy Directors 
within the Office of the Director of Cost Assessment and 
Program Evaluation, as follows:
            ``(1) The Deputy Director for Cost Assessment.
            ``(2) The Deputy Director for Program Evaluation.
    ``(d) Responsibilities.--The Director of Cost Assessment 
and Program Evaluation shall serve as the principal official 
within the senior management of the Department of Defense for 
the following:
            ``(1) Cost estimation and cost analysis for 
        acquisition programs of the Department of Defense, and 
        carrying out the duties assigned pursuant to section 
        2334 of this title.
            ``(2) Analysis and advice on matters relating to 
        the planning and programming phases of the Planning, 
        Programming, Budgeting and Execution system, and the 
        preparation of materials and guidance for such system, 
        as directed by the Secretary of Defense, working in 
        coordination with the Under Secretary of Defense 
        (Comptroller).
            ``(3) Analysis and advice for resource discussions 
        relating to requirements under consideration in the 
        Joint Requirements Oversight Council pursuant to 
        section 181 of this title.
            ``(4) Formulation of study guidance for analyses of 
        alternatives for major defense acquisition programs and 
        performance of such analyses, as directed by the 
        Secretary of Defense
            ``(5) Review, analysis, and evaluation of programs 
        for executing approved strategies and policies, 
        ensuring that information on programs is presented 
        accurately and completely, and assessing the effect of 
        spending by the Department of Defense on the United 
        States economy.
            ``(6) Assessments of special access and 
        compartmented intelligence programs, in coordination 
        with the Under Secretary of Defense for Acquisition, 
        Technology, and Logistics and the Under Secretary of 
        Defense for Intelligence and in accordance with 
        applicable policies.
            ``(7) Assessments of alternative plans, programs, 
        and policies with respect to the acquisition programs 
        of the Department of Defense.
            ``(8) Leading the development of improved 
        analytical skills and competencies within the cost 
        assessment and program evaluation workforce of the 
        Department of Defense and improved tools, data, and 
        methods to promote performance, economy, and efficiency 
        in analyzing national security planning and the 
        allocation of defense resources.''.
            (2) Clerical amendment.--The table of sections at 
        the beginning of chapter 4 of such title is amended by 
        inserting after the item relating to section 139b the 
        following new item:

``139c. Director of Cost Assessment and Program Evaluation.''.

            (3) Executive schedule level iv.--Section 5315 of 
        title 5, United States Code, is amended by inserting 
        after the item relating to the Director of Operational 
        Test and Evaluation, Department of Defense the 
        following new item:
            ``Director of Cost Assessment and Program 
        Evaluation, Department of Defense.''.
    (b) Independent Cost Estimation and Cost Analysis.--
            (1) In general.--Chapter 137 of title 10, United 
        States Code, is amended by adding at the end the 
        following new section:

``Sec. 2334. Independent cost estimation and cost analysis

    ``(a) In General.--The Director of Cost Assessment and 
Program Evaluation shall ensure that the cost estimation and 
cost analysis processes of the Department of Defense provide 
accurate information and realistic estimates of cost for the 
acquisition programs of the Department of Defense. In carrying 
out that responsibility, the Director shall--
            ``(1) prescribe, by authority of the Secretary of 
        Defense, policies and procedures for the conduct of 
        cost estimation and cost analysis for the acquisition 
        programs of the Department of Defense;
            ``(2) provide guidance to and consult with the 
        Secretary of Defense, the Under Secretary of Defense 
        for Acquisition, Technology, and Logistics, the Under 
        Secretary of Defense (Comptroller), the Secretaries of 
        the military departments, and the heads of the Defense 
        Agencies with respect to cost estimation in the 
        Department of Defense in general and with respect to 
        specific cost estimates and cost analyses to be 
        conducted in connection with a major defense 
        acquisition program under chapter 144 of this title or 
        a major automated information system program under 
        chapter 144A of this title;
            ``(3) issue guidance relating to the proper 
        selection of confidence levels in cost estimates 
        generally, and specifically, for the proper selection 
        of confidence levels in cost estimates for major 
        defense acquisition programs and major automated 
        information system programs;
            ``(4) issue guidance relating to full consideration 
        of life-cycle management and sustainability costs in 
        major defense acquisition programs and major automated 
        information system programs;
            ``(5) review all cost estimates and cost analyses 
        conducted in connection with major defense acquisition 
        programs and major automated information system 
        programs;
            ``(6) conduct independent cost estimates and cost 
        analyses for major defense acquisition programs and 
        major automated information system programs for which 
        the Under Secretary of Defense for Acquisition, 
        Technology, and Logistics is the Milestone Decision 
        Authority--
                    ``(A) in advance of--
                            ``(i) any certification under 
                        section 2366a or 2366b of this title;
                            ``(ii) any decision to enter into 
                        low-rate initial production or full-
                        rate production;
                            ``(iii) any certification under 
                        section 2433a of this title; and
                            ``(iv) any report under section 
                        2445c(f) of this title; and
                    ``(B) at any other time considered 
                appropriate by the Director or upon the request 
                of the Under Secretary of Defense for 
                Acquisition, Technology, and Logistics; and
            ``(7) periodically assess and update the cost 
        indexes used by the Department to ensure that such 
        indexes have a sound basis and meet the Department's 
        needs for realistic cost estimation.
    ``(b) Review of Cost Estimates, Cost Analyses, and Records 
of the Military Departments and Defense Agencies.--The 
Secretary of Defense shall ensure that the Director of Cost 
Assessment and Program Evaluation--
            ``(1) promptly receives the results of all cost 
        estimates and cost analyses conducted by the military 
        departments and Defense Agencies, and all studies 
        conducted by the military departments and Defense 
        Agencies in connection with such cost estimates and 
        cost analyses, for major defense acquisition programs 
        and major automated information system programs of the 
        military departments and Defense Agencies; and
            ``(2) has timely access to any records and data in 
        the Department of Defense (including the records and 
        data of each military department and Defense Agency and 
        including classified and proprietary information) that 
        the Director considers necessary to review in order to 
        carry out any duties under this section.
    ``(c) Participation, Concurrence, and Approval in Cost 
Estimation.--The Director of Cost Assessment and Program 
Evaluation may--
            ``(1) participate in the discussion of any 
        discrepancies between an independent cost estimate and 
        the cost estimate of a military department or Defense 
        Agency for a major defense acquisition program or major 
        automated information system program of the Department 
        of Defense;
            ``(2) comment on deficiencies in the methodology or 
        execution of any cost estimate or cost analysis 
        developed by a military department or Defense Agency 
        for a major defense acquisition program or major 
        automated information system program;
            ``(3) concur in the choice of a cost estimate 
        within the baseline description or any other cost 
        estimate (including the confidence level for any such 
        cost estimate) for use at any event specified in 
        subsection (a)(6); and
            ``(4) participate in the consideration of any 
        decision to request authorization of a multiyear 
        procurement contract for a major defense acquisition 
        program.
    ``(d) Disclosure of Confidence Levels for Baseline 
Estimates of Major Defense Acquisition Programs.--The Director 
of Cost Assessment and Program Evaluation, and the Secretary of 
the military department concerned or the head of the Defense 
Agency concerned (as applicable), shall each--
            ``(1) disclose in accordance with paragraph (2) the 
        confidence level used in establishing a cost estimate 
        for a major defense acquisition program or major 
        automated information system program, the rationale for 
        selecting such confidence level, and, if such 
        confidence level is less than 80 percent, the 
        justification for selecting a confidence level of less 
        than 80 percent; and
            ``(2) include the disclosure required by paragraph 
        (1)--
                    ``(A) in any decision documentation 
                approving a cost estimate within the baseline 
                description or any other cost estimate for use 
                at any event specified in subsection (a)(6); 
                and
                    ``(B) in the next Selected Acquisition 
                Report pursuant to section 2432 of this title 
                in the case of a major defense acquisition 
                program, or the next quarterly report pursuant 
                to section 2445c of this title in the case of a 
                major automated information system program.
    ``(e) Annual Report on Cost Assessment Activities.--(1) The 
Director of Cost Assessment and Program Evaluation shall 
prepare an annual report summarizing the cost estimation and 
cost analysis activities of the Department of Defense during 
the previous year and assessing the progress of the Department 
in improving the accuracy of its cost estimates and analyses. 
Each report shall include, for the year covered by such report, 
an assessment of--
            ``(A) the extent to which each of the military 
        departments and Defense Agencies have complied with 
        policies, procedures, and guidance issued by the 
        Director with regard to the preparation of cost 
        estimates for major defense acquisition programs and 
        major automated information systems;
            ``(B) the overall quality of cost estimates 
        prepared by each of the military departments and 
        Defense Agencies for major defense acquisition programs 
        and major automated information system programs; and
            ``(C) any consistent differences in methodology or 
        approach among the cost estimates prepared by the 
        military departments, the Defense Agencies, and the 
        Director.
    ``(2) Each report under this subsection shall be submitted 
concurrently to the Secretary of Defense, the Under Secretary 
of Defense for Acquisition, Technology, and Logistics, the 
Under Secretary of Defense (Comptroller), and the congressional 
defense committees not later than 10 days after the transmittal 
to Congress of the budget of the President for the next fiscal 
year (as submitted pursuant to section 1105 of title 31).
    ``(3)(A) Each report submitted to the congressional defense 
committees under this subsection shall be submitted in 
unclassified form, but may include a classified annex.
    ``(B) The Director shall ensure that a report submitted 
under this subsection does not include any information, such as 
proprietary or source selection sensitive information, that 
could undermine the integrity of the acquisition process.
    ``(C) The unclassified version of each report submitted to 
the congressional defense committees under this subsection 
shall be posted on an Internet website of the Department of 
Defense that is available to the public.
    ``(4) The Secretary of Defense may comment on any report of 
the Director to the congressional defense committees under this 
subsection.
    ``(f) Staff.--The Secretary of Defense shall ensure that 
the Director of Cost Assessment and Program Evaluation has 
sufficient professional staff of military and civilian 
personnel to enable the Director to carry out the duties and 
responsibilities of the Director under this section.''.
            (2) Clerical amendment.--The table of sections at 
        the beginning of chapter 137 of such title is amended 
        by adding at the end the following new item:

``2334. Independent cost estimation and cost analysis.''.

    (c) Transfer of Personnel and Functions.--
            (1) Transfer of functions.--The functions of the 
        Office of Program Analysis and Evaluation of the 
        Department of Defense, including the functions of the 
        Cost Analysis Improvement Group, are hereby transferred 
        to the Office of the Director of Cost Assessment and 
        Program Evaluation.
            (2) Transfer of personnel to deputy director for 
        independent cost assessment.--The personnel of the Cost 
        Analysis Improvement Group are hereby transferred to 
        the Deputy Director for Cost Assessment in the Office 
        of the Director of Cost Assessment and Program 
        Evaluation.
            (3) Transfer of personnel to deputy director for 
        program analysis and evaluation.--The personnel (other 
        than the personnel transferred under paragraph (2)) of 
        the Office of Program Analysis and Evaluation are 
        hereby transferred to the Deputy Director for Program 
        Evaluation in the Office of the Director of Cost 
        Assessment and Program Evaluation.
    (d) Conforming Amendments.--
            (1) Section 181(d) of title 10, United States Code, 
        is amended by striking ``Director of the Office of 
        Program Analysis and Evaluation'' and inserting 
        ``Director of Cost Assessment and Program Evaluation''.
            (2) Section 2306b(i)(1)(B) of such title is amended 
        by striking ``Cost Analysis Improvement Group of the 
        Department of Defense'' and inserting ``Director of 
        Cost Assessment and Program Analysis''.
            (3) Section 2366a(a)(4) of such title is amended by 
        inserting ``, with the concurrence of the Director of 
        Cost Assessment and Program Evaluation,'' after ``has 
        been submitted''.
            (4) Section 2366b(a)(1)(C) of such title is amended 
        by inserting ``, with the concurrence of the Director 
        of Cost Assessment and Program Evaluation,'' after 
        ``have been developed to execute''.
            (5) Subparagraph (A) of section 2434(b)(1) of such 
        title is amended to read as follows:
    ``(A) be prepared or approved by the Director of Cost 
Assessment and Program Evaluation; and''.
            (6) Section 2445c(f)(3) of such title is amended by 
        striking ``are reasonable'' and inserting ``have been 
        determined, with the concurrence of the Director of 
        Cost Assessment and Program Evaluation, to be 
        reasonable''.
    (e) Report on Monitoring of Operating and Support Costs for 
Major Defense Acquisition Programs.--
            (1) Report to secretary of defense.--Not later than 
        one year after the date of the enactment of this Act, 
        the Director of Cost Assessment and Program Evaluation 
        under section 139c of title 10 United States Code (as 
        added by subsection (a)), shall review existing systems 
        and methods of the Department of Defense for tracking 
        and assessing operating and support costs on major 
        defense acquisition programs and submit to the 
        Secretary of Defense a report on the finding and 
        recommendations of the Director as a result of the 
        review, including an assessment by the Director of the 
        feasibility and advisability of establishing baselines 
        for operating and support costs under section 2435 of 
        title 10, United States Code.
            (2) Transmittal to congress.--Not later than 30 
        days after receiving the report required by paragraph 
        (1), the Secretary shall transmit the report to the 
        congressional defense committees, together with any 
        comments on the report the Secretary considers 
        appropriate.

SEC. 102. DIRECTORS OF DEVELOPMENTAL TEST AND EVALUATION AND SYSTEMS 
                    ENGINEERING.

    (a) In General.--
            (1) Establishment of positions.--Chapter 4 of title 
        10, United States Code, as amended by section 101(a) of 
        this Act, is further amended by inserting after section 
        139c the following new section:

``Sec. 139d. Director of Developmental Test and Evaluation; Director of 
                    Systems Engineering: joint guidance

    ``(a) Director of Developmental Test and Evaluation.--
            ``(1) Appointment.--There is a Director of 
        Developmental Test and Evaluation, who shall be 
        appointed by the Secretary of Defense from among 
        individuals with an expertise in test and evaluation.
            ``(2) Principal advisor for developmental test and 
        evaluation.--The Director shall be the principal 
        advisor to the Secretary of Defense and the Under 
        Secretary of Defense for Acquisition, Technology, and 
        Logistics on developmental test and evaluation in the 
        Department of Defense.
            ``(3) Supervision.--The Director shall be subject 
        to the supervision of the Under Secretary of Defense 
        for Acquisition, Technology, and Logistics and shall 
        report to the Under Secretary.
            ``(4) Coordination with director of systems 
        engineering.--The Director of Developmental Test and 
        Evaluation shall closely coordinate with the Director 
        of Systems Engineering to ensure that the developmental 
        test and evaluation activities of the Department of 
        Defense are fully integrated into and consistent with 
        the systems engineering and development planning 
        processes of the Department.
            ``(5) Duties.--The Director shall--
                    ``(A) develop policies and guidance for--
                            ``(i) the conduct of developmental 
                        test and evaluation in the Department 
                        of Defense (including integration and 
                        developmental testing of software);
                            ``(ii) in coordination with the 
                        Director of Operational Test and 
                        Evaluation, the integration of 
                        developmental test and evaluation with 
                        operational test and evaluation;
                            ``(iii) the conduct of 
                        developmental test and evaluation 
                        conducted jointly by more than one 
                        military department or Defense Agency;
                    ``(B) review and approve the developmental 
                test and evaluation plan within the test and 
                evaluation master plan for each major defense 
                acquisition program of the Department of 
                Defense;
                    ``(C) monitor and review the developmental 
                test and evaluation activities of the major 
                defense acquisition programs;
                    ``(D) provide advocacy, oversight, and 
                guidance to elements of the acquisition 
                workforce responsible for developmental test 
                and evaluation;
                    ``(E) periodically review the organizations 
                and capabilities of the military departments 
                with respect to developmental test and 
                evaluation and identify needed changes or 
                improvements to such organizations and 
                capabilities, and provide input regarding 
                needed changes or improvements for the test and 
                evaluation strategic plan developed in 
                accordance with section 196(d) of this title; 
                and
                    ``(F) perform such other activities 
                relating to the developmental test and 
                evaluation activities of the Department of 
                Defense as the Under Secretary of Defense for 
                Acquisition, Technology, and Logistics may 
                prescribe.
            ``(6) Access to records.--The Secretary of Defense 
        shall ensure that the Director has access to all 
        records and data of the Department of Defense 
        (including the records and data of each military 
        department and including classified and propriety 
        information, as appropriate) that the Director 
        considers necessary in order to carry out the 
        Director's duties under this subsection.
            ``(7) Concurrent service as director of department 
        of defense test resources management center.--The 
        individual serving as the Director of Developmental 
        Test and Evaluation may also serve concurrently as the 
        Director of the Department of Defense Test Resource 
        Management Center under section 196 of this title.
    ``(b) Director of Systems Engineering.--
            ``(1) Appointment.--There is a Director of Systems 
        Engineering, who shall be appointed by the Secretary of 
        Defense from among individuals with an expertise in 
        systems engineering and development planning.
            ``(2) Principal advisor for systems engineering and 
        development planning.--The Director shall be the 
        principal advisor to the Secretary of Defense and the 
        Under Secretary of Defense for Acquisition, Technology, 
        and Logistics on systems engineering and development 
        planning in the Department of Defense.
            ``(3) Supervision.--The Director shall be subject 
        to the supervision of the Under Secretary of Defense 
        for Acquisition, Technology, and Logistics and shall 
        report to the Under Secretary.
            ``(4) Coordination with director of developmental 
        test and evaluation.--The Director of Systems 
        Engineering shall closely coordinate with the Director 
        of Developmental Test and Evaluation to ensure that the 
        developmental test and evaluation activities of the 
        Department of Defense are fully integrated into and 
        consistent with the systems engineering and development 
        planning processes of the Department.
            ``(5) Duties.--The Director shall--
                    ``(A) develop policies and guidance for--
                            ``(i) the use of systems 
                        engineering principles and best 
                        practices, generally;
                            ``(ii) the use of systems 
                        engineering approaches to enhance 
                        reliability, availability, and 
                        maintainability on major defense 
                        acquisition programs;
                            ``(iii) the development of systems 
                        engineering master plans for major 
                        defense acquisition programs including 
                        systems engineering considerations in 
                        support of lifecycle management and 
                        sustainability; and
                            ``(iv) the inclusion of provisions 
                        relating to systems engineering and 
                        reliability growth in requests for 
                        proposals;
                    ``(B) review and approve the systems 
                engineering master plan for each major defense 
                acquisition program;
                    ``(C) monitor and review the systems 
                engineering and development planning activities 
                of the major defense acquisition programs;
                    ``(D) provide advocacy, oversight, and 
                guidance to elements of the acquisition 
                workforce responsible for systems engineering, 
                development planning, and lifecycle management 
                and sustainability functions;
                    ``(E) provide input on the inclusion of 
                systems engineering requirements in the process 
                for consideration of joint military 
                requirements by the Joint Requirements 
                Oversight Council pursuant to section 181 of 
                this title, including specific input relating 
                to each capabilities development document;
                    ``(F) periodically review the organizations 
                and capabilities of the military departments 
                with respect to systems engineering, 
                development planning, and lifecycle management 
                and sustainability, and identify needed changes 
                or improvements to such organizations and 
                capabilities; and
                    ``(G) perform such other activities 
                relating to the systems engineering and 
                development planning activities of the 
                Department of Defense as the Under Secretary of 
                Defense for Acquisition, Technology, and 
                Logistics may prescribe.
            ``(6) Access to records.--The Director shall have 
        access to any records or data of the Department of 
        Defense (including the records and data of each 
        military department and including classified and 
        proprietary information as appropriate) that the 
        Director considers necessary to review in order to 
        carry out the Director's duties under this subsection.
    ``(c) Joint Annual Report.--Not later than March 31 each 
year, beginning in 2010, the Director of Developmental Test and 
Evaluation and the Director of Systems Engineering shall 
jointly submit to the congressional defense committees a report 
on the activities undertaken pursuant to subsections (a) and 
(b) during the preceding year. Each report shall include a 
section on activities relating to the major defense acquisition 
programs which shall set forth, at a minimum, the following:
            ``(1) A discussion of the extent to which the major 
        defense acquisition programs are fulfilling the 
        objectives of their systems engineering master plans 
        and developmental test and evaluation plans.
            ``(2) A discussion of the waivers of and deviations 
        from requirements in test and evaluation master plans, 
        systems engineering master plans, and other testing 
        requirements that occurred during the preceding year 
        with respect to such programs, any concerns raised by 
        such waivers or deviations, and the actions that have 
        been taken or are planned to be taken to address such 
        concerns.
            ``(3) An assessment of the organization and 
        capabilities of the Department of Defense for systems 
        engineering, development planning, and developmental 
        test and evaluation with respect to such programs.
            ``(4) Any comments on such report that the 
        Secretary of Defense considers appropriate.
    ``(d) Joint Guidance.--The Director of Developmental Test 
and Evaluation and the Director of Systems Engineering shall 
jointly, in coordination with the official designated by the 
Secretary of Defense under section 103 of the Weapon Systems 
Acquisition Reform Act of 2009, issue guidance on the 
following:
            ``(1) The development and tracking of detailed 
        measurable performance criteria as part of the systems 
        engineering master plans and the developmental test and 
        evaluation plans within the test and evaluation master 
        plans of major defense acquisition programs.
            ``(2) The use of developmental test and evaluation 
        to measure the achievement of specific performance 
        objectives within a systems engineering master plan.
            ``(3) A system for storing and tracking information 
        relating to the achievement of the performance criteria 
        and objectives specified pursuant to this subsection.
    ``(e) Major Defense Acquisition Program Defined.--In this 
section, the term `major defense acquisition program' has the 
meaning given that term in section 2430 of this title.''.
            (2) Clerical amendment.--The table of sections at 
        the beginning of chapter 4 of such title, as amended by 
        section 101(a) of this Act, is further amended by 
        inserting after the item relating to section 139c the 
        following new item:

``139d. Director of Developmental Test and Evaluation; Director of 
          Systems Engineering: joint guidance.''.

    (b) Developmental Test and Evaluation and Systems 
Engineering in the Military Departments and Defense Agencies.--
            (1) Plans.--The service acquisition executive of 
        each military department and each Defense Agency with 
        responsibility for a major defense acquisition program 
        shall develop and implement plans to ensure the 
        military department or Defense Agency concerned has 
        provided appropriate resources for each of the 
        following:
                    (A) Developmental testing organizations 
                with adequate numbers of trained personnel in 
                order to--
                            (i) ensure that developmental 
                        testing requirements are appropriately 
                        addressed in the translation of 
                        operational requirements into contract 
                        specifications, in the source selection 
                        process, and in the preparation of 
                        requests for proposals on all major 
                        defense acquisition programs;
                            (ii) participate in the planning of 
                        developmental test and evaluation 
                        activities, including the preparation 
                        and approval of a developmental test 
                        and evaluation plan within the test and 
                        evaluation master plan for each major 
                        defense acquisition program; and
                            (iii) participate in and oversee 
                        the conduct of developmental testing, 
                        the analysis of data, and the 
                        preparation of evaluations and reports 
                        based on such testing.
                    (B) Development planning and systems 
                engineering organizations with adequate numbers 
                of trained personnel in order to--
                            (i) support key requirements, 
                        acquisition, and budget decisions made 
                        for each major defense acquisition 
                        program prior to Milestone A approval 
                        and Milestone B approval through a 
                        rigorous systems analysis and systems 
                        engineering process;
                            (ii) include a robust program for 
                        improving reliability, availability, 
                        maintainability, and sustainability as 
                        an integral part of design and 
                        development within the systems 
                        engineering master plan for each major 
                        defense acquisition program; and
                            (iii) identify systems engineering 
                        requirements, including reliability, 
                        availability, maintainability, and 
                        lifecycle management and sustainability 
                        requirements, during the Joint 
                        Capabilities Integration Development 
                        System process, and incorporate such 
                        systems engineering requirements into 
                        contract requirements for each major 
                        defense acquisition program.
            (2) Reports by service acquisition executives.--Not 
        later than 180 days after the date of the enactment of 
        this Act, the service acquisition executive of each 
        military department and each Defense Agency with 
        responsibility for a major defense acquisition program 
        shall submit to the Director of Developmental Test and 
        Evaluation and the Director of Systems Engineering a 
        report on the extent to which--
                    (A) such military department or Defense 
                Agency has implemented, or is implementing, the 
                plan required by paragraph (1); and
                    (B) additional authorities or resources are 
                needed to attract, develop, retain, and reward 
                developmental test and evaluation personnel and 
                systems engineers with appropriate levels of 
                hands-on experience and technical expertise to 
                meet the needs of such military department or 
                Defense Agency.
            (3) Assessment of reports by directors of 
        developmental test and evaluation and systems 
        engineering.--The first annual report submitted to 
        Congress by the Director of Developmental Test and 
        Evaluation and the Director of Systems Engineering 
        under section 139d(c) of title 10, United States Code 
        (as added by subsection (a)), shall include an 
        assessment by the Directors of the reports submitted by 
        the service acquisition executives to the Directors 
        under paragraph (2).

SEC. 103. PERFORMANCE ASSESSMENTS AND ROOT CAUSE ANALYSES FOR MAJOR 
                    DEFENSE ACQUISITION PROGRAMS.

    (a) Designation of Senior Official Responsibility for 
Performance Assessments and Root Cause Analyses.--
            (1) In general.--The Secretary of Defense shall 
        designate a senior official in the Office of the 
        Secretary of Defense as the principal official of the 
        Department of Defense responsible for conducting and 
        overseeing performance assessments and root cause 
        analyses for major defense acquisition programs.
            (2) No program execution responsibility.--The 
        Secretary shall ensure that the senior official 
        designated under paragraph (1) is not responsible for 
        program execution.
            (3) Staff and resources.--The Secretary shall 
        assign to the senior official designated under 
        paragraph (1) appropriate staff and resources necessary 
        to carry out official's function under this section.
    (b) Responsibilities.--The senior official designated under 
subsection (a) shall be responsible for the following:
            (1) Carrying out performance assessments of major 
        defense acquisition programs in accordance with the 
        requirements of subsection (c) periodically or when 
        requested by the Secretary of Defense, the Under 
        Secretary of Defense for Acquisition, Technology and 
        Logistics, the Secretary of a military department, or 
        the head of a Defense Agency.
            (2) Conducting root cause analyses for major 
        defense acquisition programs in accordance with the 
        requirements of subsection (d) when required by section 
        2433a(a)(1) of title 10, United States Code (as added 
        by section 206(a) of this Act), or when requested by 
        the Secretary of Defense, the Under Secretary of 
        Defense for Acquisition, Technology and Logistics, the 
        Secretary of a military department, or the head of a 
        Defense Agency.
            (3) Issuing policies, procedures, and guidance 
        governing the conduct of performance assessments and 
        root cause analyses by the military departments and the 
        Defense Agencies.
            (4) Evaluating the utility of performance metrics 
        used to measure the cost, schedule, and performance of 
        major defense acquisition programs, and making such 
        recommendations to the Secretary of Defense as the 
        official considers appropriate to improve such metrics.
            (5) Advising acquisition officials on performance 
        issues regarding a major defense acquisition program 
        that may arise--
                    (A) prior to certification under section 
                2433a of title 10, United States Code (as so 
                added);
                    (B) prior to entry into full-rate 
                production; or
                    (C) in the course of consideration of any 
                decision to request authorization of a 
                multiyear procurement contract for the program.
    (c) Performance Assessments.--For purposes of this section, 
a performance assessment with respect to a major defense 
acquisition program is an evaluation of the following:
            (1) The cost, schedule, and performance of the 
        program, relative to current metrics, including 
        performance requirements and baseline descriptions.
            (2) The extent to which the level of program cost, 
        schedule, and performance predicted relative to such 
        metrics is likely to result in the timely delivery of a 
        level of capability to the warfighter that is 
        consistent with the level of resources to be expended 
        and provides superior value to alternative approaches 
        that may be available to meet the same military 
        requirement.
    (d) Root Cause Analyses.--For purposes of this section and 
section 2433a of title 10, United States Code (as so added), a 
root cause analysis with respect to a major defense acquisition 
program is an assessment of the underlying cause or causes of 
shortcomings in cost, schedule, or performance of the program, 
including the role, if any, of--
            (1) unrealistic performance expectations;
            (2) unrealistic baseline estimates for cost or 
        schedule;
            (3) immature technologies or excessive 
        manufacturing or integration risk;
            (4) unanticipated design, engineering, 
        manufacturing, or technology integration issues arising 
        during program performance;
            (5) changes in procurement quantities;
            (6) inadequate program funding or funding 
        instability;
            (7) poor performance by government or contractor 
        personnel responsible for program management; or
            (8) any other matters.
    (e) Support of Applicable Capabilities and Expertise.--The 
Secretary of Defense shall ensure that the senior official 
designated under subsection (a) has the support of other 
Department of Defense officials with relevant capabilities and 
expertise needed to carry out the requirements of this section.
    (f) Annual Report.--Not later than March 1 each year, 
beginning in 2010, the official responsible for conducting and 
overseeing performance assessments and root cause analyses for 
major defense acquisition programs shall submit to the 
congressional defense committees a report on the activities 
undertaken under this section during the preceding year.

SEC. 104. ASSESSMENT OF TECHNOLOGICAL MATURITY OF CRITICAL TECHNOLOGIES 
                    OF MAJOR DEFENSE ACQUISITION PROGRAMS BY THE 
                    DIRECTOR OF DEFENSE RESEARCH AND ENGINEERING.

    (a) Assessment by Director of Defense Research and 
Engineering.--
            (1) In general.--Section 139a of title 10, United 
        States Code, is amended by adding at the end the 
        following new subsection:
    ``(c)(1) The Director of Defense Research and Engineering, 
in consultation with the Director of Developmental Test and 
Evaluation, shall periodically review and assess the 
technological maturity and integration risk of critical 
technologies of the major defense acquisition programs of the 
Department of Defense and report on the findings of such 
reviews and assessments to the Under Secretary of Defense for 
Acquisition, Technology, and Logistics.
    ``(2) The Director shall submit to the Secretary of Defense 
and to the congressional defense committees by March 1 of each 
year a report on the technological maturity and integration 
risk of critical technologies of the major defense acquisition 
programs of the Department of Defense.''.
            (2) First annual report.--The first annual report 
        under subsection (c)(2) of section 139a of title 10, 
        United States Code (as added by paragraph (1)), shall 
        be submitted to the congressional defense committees 
        not later than March 1, 2010, and shall address the 
        results of reviews and assessments conducted by the 
        Director of Defense Research and Engineering pursuant 
        to subsection (c)(1) of such section (as so added) 
        during the preceding calendar year.
    (b) Report on Resources for Implementation.--Not later than 
120 days after the date of the enactment of this Act, the 
Director of Defense Research and Engineering shall submit to 
the congressional defense committees a report describing any 
additional resources that may be required by the Director, and 
by other research and engineering elements of the Department of 
Defense, to carry out the following:
            (1) The requirements under the amendment made by 
        subsection (a)(1).
            (2) The technological maturity assessments required 
        by section 2366b(a) of title 10, United States Code.
            (3) The requirements of Department of Defense 
        Instruction 5000, as revised.
    (c) Technological Maturity Standards.--Not later than 180 
days after the date of the enactment of this Act, the Director 
of Defense Research and Engineering, in consultation with the 
Director of Developmental Test and Evaluation, shall develop 
knowledge-based standards against which to measure the 
technological maturity and integration risk of critical 
technologies at key stages in the acquisition process for 
purposes of conducting the reviews and assessments of major 
defense acquisition programs required by subsection (c) of 
section 139a of title 10, United States Code (as so added).

SEC. 105. ROLE OF THE COMMANDERS OF THE COMBATANT COMMANDS IN 
                    IDENTIFYING JOINT MILITARY REQUIREMENTS.

    (a) In General.--Section 181(d) of title 10, United States 
Code, as amended by section 101(d) of this Act, is further 
amended--
            (1) by inserting ``(1)'' before ``The Under 
        Secretary''; and
            (2) by adding at the end the following new 
        paragraph:
    ``(2) The Council shall seek and consider input from the 
commanders of the combatant commands in carrying out its 
mission under paragraphs (1) and (2) of subsection (b) and in 
conducting periodic reviews in accordance with the requirements 
of subsection (e).''.
    (b) Input From Commanders of Combatant Commands.--The Joint 
Requirements Oversight Council in the Department of Defense 
shall seek and consider input from the commanders of combatant 
commands, in accordance with section 181(d) of title 10, United 
States Code (as amended by subsection (a)). Such input may 
include, but is not limited to, an assessment of the following:
            (1) Any current or projected missions or threats in 
        the theater of operations of the commander of a 
        combatant command that would inform the assessment of a 
        new joint military requirement.
            (2) The necessity and sufficiency of a proposed 
        joint military requirement in terms of current and 
        projected missions or threats.
            (3) The relative priority of a proposed joint 
        military requirement in comparison with other joint 
        military requirements within the theater of operations 
        of the commander of a combatant command.
            (4) The ability of partner nations in the theater 
        of operations of the commander of a combatant command 
        to assist in meeting the joint military requirement or 
        the benefit, if any, of a partner nation assisting in 
        development or use of technologies developed to meet 
        the joint military requirement.
    (c) Comptroller General of the United States Review of 
Implementation.--
            (1) Requirement.--Not later than two years after 
        the date of the enactment of this Act, the Comptroller 
        General of the United States shall submit to the 
        Committees on Armed Services of the Senate and the 
        House of Representatives a report on the implementation 
        of the requirements of--
                    (A) subsection (d)(2) of section 181 of 
                title 10, United States Code (as amended by 
                subsection (a)), for the Joint Requirements 
                Oversight Council to solicit and consider input 
                from the commanders of the combatant commands;
                    (B) the amendments to subsection (b) of 
                section 181 of title 10, United States Code, 
                made by section 942 of the National Defense 
                Authorization Act for Fiscal Year 2008 (Public 
                Law 110-181; 122 Stat. 287) and by section 
                201(b) of this Act; and
                    (C) the requirements of section 201(c) of 
                this Act.
            (2) Matters covered.--The report shall include, at 
        a minimum, an assessment of--
                    (A) the extent to which the Council has 
                effectively sought, and the commanders of the 
                combatant commands have provided, meaningful 
                input on proposed joint military requirements;
                    (B) the quality and effectiveness of 
                efforts to estimate the level of resources 
                needed to fulfill joint military requirements; 
                and
                    (C) the extent to which the Council has 
                considered trade-offs among cost, schedule, and 
                performance objectives.

                      TITLE II--ACQUISITION POLICY

SEC. 201. CONSIDERATION OF TRADE-OFFS AMONG COST, SCHEDULE, AND 
                    PERFORMANCE OBJECTIVES IN DEPARTMENT OF DEFENSE 
                    ACQUISITION PROGRAMS.

    (a) Consideration of Trade-Offs.--
            (1) In general.--The Secretary of Defense shall 
        ensure that mechanisms are developed and implemented to 
        require consideration of trade-offs among cost, 
        schedule, and performance objectives as part of the 
        process for developing requirements for Department of 
        Defense acquisition programs.
            (2) Elements.--The mechanisms required under this 
        subsection shall ensure, at a minimum, that--
                    (A) Department of Defense officials 
                responsible for acquisition, budget, and cost 
                estimating functions are provided an 
                appropriate opportunity to develop estimates 
                and raise cost and schedule matters before 
                performance objectives are established for 
                capabilities for which the Chairman of the 
                Joint Requirements Oversight Council is the 
                validation authority; and
                    (B) the process for developing requirements 
                is structured to enable incremental, 
                evolutionary, or spiral acquisition approaches, 
                including the deferral of technologies that are 
                not yet mature and capabilities that are likely 
                to significantly increase costs or delay 
                production until later increments or spirals.
    (b) Duties of Joint Requirements Oversight Council.--
Section 181(b) of title 10, United States Code, is amended--
            (1) in paragraph (1)--
                    (A) by striking ``and'' at the end of 
                subparagraph (A);
                    (B) by inserting ``and'' at the end of 
                subparagraph (B) after the semicolon; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) in ensuring the consideration of 
                trade-offs among cost, schedule, and 
                performance objectives for joint military 
                requirements in consultation with the advisors 
                specified in subsection (d);''.
            (2) in paragraph (3)--
                    (A) by inserting ``, in consultation with 
                the Under Secretary of Defense (Comptroller), 
                the Under Secretary of Defense for Acquisition, 
                Technology, and Logistics, and the Director of 
                Cost Assessment and Performance Evaluation,'' 
                after ``assist the Chairman''; and
                    (B) by striking ``and'' after the semicolon 
                at the end;
            (3) in paragraph (4), by striking the period at the 
        end and inserting ``; and''; and
            (4) by adding at the end the following new 
        paragraph:
            ``(5) assist the Chairman, in consultation with the 
        commanders of the combatant commands and the Under 
        Secretary of Defense for Acquisition, Technology, and 
        Logistics, in establishing an objective for the overall 
        period of time within which an initial operational 
        capability should be delivered to meet each joint 
        military requirement.''.
    (c) Review of Joint Military Requirements.--The Secretary 
of Defense shall ensure that each new joint military 
requirement recommended by the Joint Requirements Oversight 
Council is reviewed to ensure that the Joint Requirements 
Oversight Council has, in making such recommendation--
            (1) taken appropriate action to seek and consider 
        input from the commanders of the combatant commands, in 
        accordance with the requirements of section 181(d) of 
        title 10, United States Code (as amended by section 
        105(a) of this Act);
            (2) engaged in consideration of trade-offs among 
        cost, schedule, and performance objectives in 
        accordance with the requirements of section 
        181(b)(1)(C) of title 10, United States Code (as added 
        by subsection (b)); and
            (3) engaged in consideration of issues of joint 
        portfolio management, including alternative material 
        and non-material solutions, as provided in Department 
        of Defense instructions for the development of joint 
        military requirements.
    (d) Study Guidance for Analyses of Alternatives.--The 
Director of Cost Assessment and Program Evaluation shall take 
the lead in the development of study guidance for an analysis 
of alternatives for each joint military requirement for which 
the Chairman of the Joint Requirements Oversight Council is the 
validation authority. In developing the guidance, the Director 
shall solicit the advice of appropriate officials within the 
Department of Defense and ensure that the guidance requires, at 
a minimum--
            (1) full consideration of possible trade-offs among 
        cost, schedule, and performance objectives for each 
        alternative considered; and
            (2) an assessment of whether or not the joint 
        military requirement can be met in a manner that is 
        consistent with the cost and schedule objectives 
        recommended by the Joint Requirements Oversight 
        Council.
    (e) Analysis of Alternatives in Certification for Milestone 
A.--Section 2366a(a) of title 10, United States Code, as 
amended by section 101(d)(3) of this Act, is further amended--
            (1) by striking ``and'' at the end of paragraph 
        (3);
            (2) by redesignating paragraph (4) as paragraph 
        (5); and
            (3) by inserting after paragraph (3) the following 
        new paragraph (4):
            ``(4) that an analysis of alternatives has been 
        performed consistent with study guidance developed by 
        the Director of Cost Assessment and Program Evaluation; 
        and''.
    (f) Duties of Milestone Decision Authority.--Section 
2366b(a)(1)(B) of such title is amended by inserting 
``appropriate trade-offs among cost, schedule, and performance 
objectives have been made to ensure that'' before ``the program 
is affordable''.

SEC. 202. ACQUISITION STRATEGIES TO ENSURE COMPETITION THROUGHOUT THE 
                    LIFECYCLE OF MAJOR DEFENSE ACQUISITION PROGRAMS.

    (a) Acquisition Strategies To Ensure Competition.--The 
Secretary of Defense shall ensure that the acquisition strategy 
for each major defense acquisition program includes--
            (1) measures to ensure competition, or the option 
        of competition, at both the prime contract level and 
        the subcontract level (at such tier or tiers as are 
        appropriate) of such program throughout the life-cycle 
        of such program as a means to improve contractor 
        performance; and
            (2) adequate documentation of the rationale for the 
        selection of the subcontract tier or tiers under 
        paragraph (1).
    (b) Measures To Ensure Competition.--The measures to ensure 
competition, or the option of competition, for purposes of 
subsection (a)(1) may include measures to achieve the 
following, in appropriate cases if such measures are cost-
effective:
            (1) Competitive prototyping.
            (2) Dual-sourcing.
            (3) Unbundling of contracts.
            (4) Funding of next-generation prototype systems or 
        subsystems.
            (5) Use of modular, open architectures to enable 
        competition for upgrades.
            (6) Use of build-to-print approaches to enable 
        production through multiple sources.
            (7) Acquisition of complete technical data 
        packages.
            (8) Periodic competitions for subsystem upgrades.
            (9) Licensing of additional suppliers.
            (10) Periodic system or program reviews to address 
        long-term competitive effects of program decisions.
    (c) Additional Measures To Ensure Competition at 
Subcontract Level.--The Secretary shall take actions to ensure 
fair and objective ``make-buy'' decisions by prime contractors 
on major defense acquisition programs by--
            (1) requiring prime contractors to give full and 
        fair consideration to qualified sources other than the 
        prime contractor for the development or construction of 
        major subsystems and components of major weapon 
        systems;
            (2) providing for government surveillance of the 
        process by which prime contractors consider such 
        sources and determine whether to conduct such 
        development or construction in-house or through a 
        subcontract; and
            (3) providing for the assessment of the extent to 
        which a contractor has given full and fair 
        consideration to qualified sources other than the 
        contractor in sourcing decisions as a part of past 
        performance evaluations.
    (d) Consideration of Competition Throughout Operation and 
Sustainment of Major Weapon Systems.--Whenever a decision 
regarding source of repair results in a plan to award a 
contract for performance of maintenance and sustainment of a 
major weapon system, the Secretary shall take actions to ensure 
that, to the maximum extent practicable and consistent with 
statutory requirements, contracts for such maintenance and 
sustainment are awarded on a competitive basis and give full 
consideration to all sources (including sources that partner or 
subcontract with public or private sector repair activities).
    (e) Applicability.--
            (1) Strategy and measures to ensure competition.--
        The requirements of subsections (a) and (b) shall apply 
        to any acquisition plan for a major defense acquisition 
        program that is developed or revised on or after the 
        date that is 60 days after the date of the enactment of 
        this Act.
            (2) Additional actions.--The actions required by 
        subsections (c) and (d) shall be taken within 180 days 
        after the date of the enactment of this Act.

SEC. 203. PROTOTYPING REQUIREMENTS FOR MAJOR DEFENSE ACQUISITION 
                    PROGRAMS.

    (a) Competitive Prototyping.--Not later than 90 days after 
the date of the enactment of this Act, the Secretary of Defense 
shall modify the guidance of the Department of Defense relating 
to the operation of the acquisition system with respect to 
competitive prototyping for major defense acquisition programs 
to ensure the following:
            (1) That the acquisition strategy for each major 
        defense acquisition program provides for competitive 
        prototypes before Milestone B approval (or Key Decision 
        Point B approval in the case of a space program) unless 
        the Milestone Decision Authority for such program 
        waives the requirement pursuant to paragraph (2).
            (2) That the Milestone Decision Authority may waive 
        the requirement in paragraph (1) only--
                    (A) on the basis that the cost of producing 
                competitive prototypes exceeds the expected 
                life-cycle benefits (in constant dollars) of 
                producing such prototypes, including the 
                benefits of improved performance and increased 
                technological and design maturity that may be 
                achieved through competitive prototyping; or
                    (B) on the basis that, but for such waiver, 
                the Department would be unable to meet critical 
                national security objectives.
            (3) That whenever a Milestone Decision Authority 
        authorizes a waiver pursuant to paragraph (2), the 
        Milestone Decision Authority--
                    (A) shall require that the program produce 
                a prototype before Milestone B approval (or Key 
                Decision Point B approval in the case of a 
                space program) if the expected life-cycle 
                benefits (in constant dollars) of producing 
                such prototype exceed its cost and its 
                production is consistent with achieving 
                critical national security objectives; and
                    (B) shall notify the congressional defense 
                committees in writing not later than 30 days 
                after the waiver is authorized and include in 
                such notification the rationale for the waiver 
                and the plan, if any, for producing a 
                prototype.
            (4) That prototypes may be required under paragraph 
        (1) or (3) for the system to be acquired or, if 
        prototyping of the system is not feasible, for critical 
        subsystems of the system.
    (b) Comptroller General Review of Certain Waivers.--
            (1) Notice to comptroller general.--Whenever a 
        Milestone Decision Authority authorizes a waiver of the 
        requirement for prototypes pursuant to paragraph (2) of 
        subsection (a) on the basis of excessive cost, the 
        Milestone Decision Authority shall submit the 
        notification of the waiver, together with the 
        rationale, to the Comptroller General of the United 
        States at the same time it is submitted to the 
        congressional defense committees.
            (2) Comptroller general review.--Not later than 60 
        days after receipt of a notification of a waiver under 
        paragraph (1), the Comptroller General shall--
                    (A) review the rationale for the waiver; 
                and
                    (B) submit to the congressional defense 
                committees a written assessment of the 
                rationale for the waiver.

SEC. 204. ACTIONS TO IDENTIFY AND ADDRESS SYSTEMIC PROBLEMS IN MAJOR 
                    DEFENSE ACQUISITION PROGRAMS PRIOR TO MILESTONE B 
                    APPROVAL.

    (a) Modification to Certification Requirement.--Subsection 
(a) of section 2366a of title 10, United States Code, is 
amended by striking ``may not receive Milestone A approval, or 
Key Decision Point A approval in the case of a space program,'' 
and inserting ``may not receive Milestone A approval, or Key 
Decision Point A approval in the case of a space program, or 
otherwise be initiated prior to Milestone B approval, or Key 
Decision Point B approval in the case of a space program,''.
    (b) Modification to Notification Requirement.--Subsection 
(b) of such section is amended--
            (1) by inserting ``(1)'' before ``With respect 
        to'';
            (2) in paragraph (1), as so designated, by striking 
        ``by at least 25 percent,'' and inserting ``by at least 
        25 percent, or the program manager determines that the 
        period of time required for the delivery of an initial 
        operational capability is likely to exceed the schedule 
        objective established pursuant to section 181(b)(5) of 
        this title by more than 25 percent,''; and
            (3) by adding at the end the following new 
        paragraph:
    ``(2) Not later than 30 days after a program manager 
submits a notification to the Milestone Decision Authority 
pursuant to paragraph (1) with respect to a major defense 
acquisition program, the Milestone Decision Authority shall 
submit to the congressional defense committees a report that--
            ``(A) identifies the root causes of the cost or 
        schedule growth in accordance with applicable policies, 
        procedures, and guidance;
            ``(B) identifies appropriate acquisition 
        performance measures for the remainder of the 
        development of the program; and
            ``(C) includes one of the following:
                    ``(i) A written certification (with a 
                supporting explanation) stating that--
                            ``(I) the program is essential to 
                        national security;
                            ``(II) there are no alternatives to 
                        the program that will provide 
                        acceptable military capability at less 
                        cost;
                            ``(III) new estimates of the 
                        development cost or schedule, as 
                        appropriate, are reasonable; and
                            ``(IV) the management structure for 
                        the program is adequate to manage and 
                        control program development cost and 
                        schedule.
                    ``(ii) A plan for terminating the 
                development of the program or withdrawal of 
                Milestone A approval, or Key Decision Point A 
                approval in the case of a space program, if the 
                Milestone Decision Authority determines that 
                such action is in the interest of national 
                defense.''.
    (c) Application to Ongoing Programs.--
            (1) In general.--Each major defense acquisition 
        program described in paragraph (2) shall be certified 
        in accordance with the requirements of section 2366a of 
        title 10, United States Code (as amended by this 
        section), within one year after the date of the 
        enactment of this Act.
            (2) Covered programs.--The requirement in paragraph 
        (1) shall apply to any major defense acquisition 
        program that--
                    (A) was initiated before the date of the 
                enactment of this Act; and
                    (B) as of the date of certification under 
                paragraph (1) has not otherwise been certified 
                pursuant to either section 2366a (as so 
                amended) or 2366b of title 10, United States 
                Code.

SEC. 205. ADDITIONAL REQUIREMENTS FOR CERTAIN MAJOR DEFENSE ACQUISITION 
                    PROGRAMS.

    (a) Additional Requirements Relating to Milestone B 
Approval.--Section 2366b of title 10, United States Code, is 
amended--
            (1) in subsection (d)--
                    (A) by inserting ``(1)'' before ``The 
                milestone decision authority may''; and
                    (B) by striking the second sentence and 
                inserting the following:
    ``(2) Whenever the milestone decision authority makes such 
a determination and authorizes such a waiver--
            ``(A) the waiver, the determination, and the 
        reasons for the determination shall be submitted in 
        writing to the congressional defense committees within 
        30 days after the waiver is authorized; and
            ``(B) the milestone decision authority shall review 
        the program not less often than annually to determine 
        the extent to which such program currently satisfies 
        the certification components specified in paragraphs 
        (1) and (2) of subsection (a) until such time as the 
        milestone decision authority determines that the 
        program satisfies all such certification components.'';
            (2) by redesignating subsections (e) and (f) as 
        subsections (f) and (g), respectively, and inserting 
        after subsection (d) the following new subsection (e):
    ``(e) Designation of Certification Status in Budget 
Documentation.--Any budget request, budget justification 
material, budget display, reprogramming request, Selected 
Acquisition Report, or other budget documentation or 
performance report submitted by the Secretary of Defense to the 
President regarding a major defense acquisition program 
receiving a waiver pursuant to subsection (d) shall prominently 
and clearly indicate that such program has not fully satisfied 
the certification requirements of this section until such time 
as the milestone decision authority makes the determination 
that such program has satisfied all such certification 
components.''; and
            (3) in subsection (a)--
                    (A) in paragraph (1), by striking ``and'' 
                at the end;
                    (B) by redesignating paragraph (2) as 
                paragraph (3);
                    (C) by inserting after paragraph (1) the 
                following new paragraph (2):
            ``(2) has received a preliminary design review and 
        conducted a formal post-preliminary design review 
        assessment, and certifies on the basis of such 
        assessment that the program demonstrates a high 
        likelihood of accomplishing its intended mission; 
        and''; and
                    (D) in paragraph (3), as redesignated by 
                subparagraph (B) of this paragraph--
                            (i) in subparagraph (D), by 
                        striking the semicolon and inserting 
                        ``, as determined by the Milestone 
                        Decision Authority on the basis of an 
                        independent review and assessment by 
                        the Director of Defense Research and 
                        Engineering; and'';
                            (ii) by striking subparagraph (E); 
                        and
                            (iii) by redesignating subparagraph 
                        (F) as subparagraph (E).
    (b) Certification and Review of Programs Entering 
Development Prior To Enactment of Section 2366b of Title 10.--
            (1) Determination.--Not later than 270 days after 
        the date of the enactment of this Act, for each major 
        defense acquisition program that received Milestone B 
        approval before January 6, 2006, and has not received 
        Milestone C approval, and for each space program that 
        received Key Decision Point B approval before January 
        6, 2006, and has not received Key Decision Point C 
        approval, the Milestone Decision Authority shall 
        determine whether or not such program satisfies all of 
        the certification components specified in paragraphs 
        (1) and (2) of subsection (a) of section 2366b of title 
        10, United States Code (as amended by subsection (a) of 
        this section).
            (2) Annual review.--The Milestone Decision 
        Authority shall review any program determined pursuant 
        to paragraph (1) not to satisfy any of the 
        certification components of subsection (a) of section 
        2366b of title 10, United States Code (as so amended), 
        not less often than annually thereafter to determine 
        the extent to which such program currently satisfies 
        such certification components until such time as the 
        Milestone Decision Authority determines that such 
        program satisfies all such certification components.
            (3) Designation of certification status in budget 
        documentation.--Any budget request, budget 
        justification material, budget display, reprogramming 
        request, Selected Acquisition Report, or other budget 
        documentation or performance report submitted by the 
        Secretary of Defense to the President regarding a major 
        defense acquisition program which the Milestone 
        Decision Authority determines under paragraph (1) does 
        not satisfy all of the certification components of 
        subsection (a) of section 2366b of title 10, United 
        States Code, (as so amended) shall prominently and 
        clearly indicate that such program has not fully 
        satisfied such certification components until such time 
        as the Milestone Decision Authority makes the 
        determination that such program has satisfied all such 
        certification components.
    (c) Reviews of Programs Restructured After Experiencing 
Critical Cost Growth.--The official designated to perform 
oversight of performance assessment pursuant to section 103 of 
this Act, shall assess the performance of each major defense 
acquisition program that has exceeded critical cost growth 
thresholds established pursuant to section 2433(e) of title 10, 
United States Code, but has not been terminated in accordance 
with section 2433a of such title (as added by section 206(a) of 
this Act) not less often than semi-annually until one year 
after the date on which such program receives a new milestone 
approval, in accordance with section 2433a(c)(3) of such title 
(as so added). The results of reviews performed under this 
subsection shall be reported to the Under Secretary of Defense 
for Acquisition, Technology, and Logistics and summarized in 
the next annual report of such designated official.

SEC. 206. CRITICAL COST GROWTH IN MAJOR DEFENSE ACQUISITION PROGRAMS.

    (a) Actions Following Critical Cost Growth.--
            (1) In general.--Chapter 144 of title 10, United 
        States Code, is amended by inserting after section 2433 
        the following new section:

``Sec. 2433a. Critical cost growth in major defense acquisition 
                    programs

    ``(a) Reassessment of Program.--If the program acquisition 
unit cost or procurement unit cost of a major defense 
acquisition program or designated subprogram (as determined by 
the Secretary under section 2433(d) of this title) increases by 
a percentage equal to or greater than the critical cost growth 
threshold for the program or subprogram, the Secretary of 
Defense, after consultation with the Joint Requirements 
Oversight Council regarding program requirements, shall--
            ``(1) determine the root cause or causes of the 
        critical cost growth in accordance with applicable 
        statutory requirements and Department of Defense 
        policies, procedures, and guidance; and
            ``(2) in consultation with the Director of Cost 
        Assessment and Program Evaluation, carry out an 
        assessment of--
                    ``(A) the projected cost of completing the 
                program if current requirements are not 
                modified;
                    ``(B) the projected cost of completing the 
                program based on reasonable modification of 
                such requirements;
                    ``(C) the rough order of magnitude of the 
                costs of any reasonable alternative system or 
                capability; and
                    ``(D) the need to reduce funding for other 
                programs due to the growth in cost of the 
                program.
    ``(b) Presumption of Termination.--(1) After conducting the 
reassessment required by subsection (a) with respect to a major 
defense acquisition program, the Secretary shall terminate the 
program unless the Secretary submits to Congress, before the 
end of the 60-day period beginning on the day the Selected 
Acquisition Report containing the information described in 
section 2433(g) of this title is required to be submitted under 
section 2432(f) of this title, a written certification in 
accordance with paragraph (2).
    ``(2) A certification described by this paragraph with 
respect to a major defense acquisition program is a written 
certification that--
            ``(A) the continuation of the program is essential 
        to the national security;
            ``(B) there are no alternatives to the program 
        which will provide acceptable capability to meet the 
        joint military requirement (as defined in section 
        181(g)((1) of this title) at less cost;
            ``(C) the new estimates of the program acquisition 
        unit cost or procurement unit cost have been determined 
        by the Director of Cost Assessment and Program 
        Evaluation to be reasonable;
            ``(D) the program is a higher priority than 
        programs whose funding must be reduced to accommodate 
        the growth in cost of the program; and
            ``(E) the management structure for the program is 
        adequate to manage and control program acquisition unit 
        cost or procurement unit cost.
    ``(3) A written certification under paragraph (2) shall be 
accompanied by a report presenting the root cause analysis and 
assessment carried out pursuant to subsection (a) and the basis 
for each determination made in accordance with subparagraphs 
(A) through (E) of paragraph (2), together with supporting 
documentation.
    ``(c) Actions if Program Not Terminated.--(1) If the 
Secretary elects not to terminate a major defense acquisition 
program pursuant to subsection (b), the Secretary shall--
            ``(A) restructure the program in a manner that 
        addresses the root cause or causes of the critical cost 
        growth, as identified pursuant to subsection (a), and 
        ensures that the program has an appropriate management 
        structure as set forth in the certification submitted 
        pursuant to subsection (b)(2)(E);
            ``(B) rescind the most recent Milestone approval, 
        or Key Decision Point approval in the case of a space 
        program, for the program and withdraw any associated 
        certification under section 2366a or 2366b of this 
        title;
            ``(C) require a new Milestone approval, or Key 
        Decision Point approval in the case of a space program, 
        for the program before taking any contract action to 
        enter a new contract, exercise an option under an 
        existing contract, or otherwise extend the scope of an 
        existing contract under the program, except to the 
        extent determined necessary by the Milestone Decision 
        Authority, on a non-delegable basis, to ensure that the 
        program can be restructured as intended by the 
        Secretary without unnecessarily wasting resources;
            ``(D) include in the report specified in paragraph 
        (2) a description of all funding changes made as a 
        result of the growth in cost of the program, including 
        reductions made in funding for other programs to 
        accommodate such cost growth; and
            ``(E) conduct regular reviews of the program in 
        accordance with the requirements of section 205 of the 
        Weapon Systems Acquisition Reform Act of 2009.
    ``(2) For purposes of paragraph (1)(D), the report 
specified in this paragraph is the first Selected Acquisition 
Report for the program submitted pursuant to section 2432 of 
this title after the President submits a budget pursuant to 
section 1105 of title 31, in the calendar year following the 
year in which the program was restructured.
    ``(d) Actions if Program Terminated.--If a major defense 
acquisition program is terminated pursuant to subsection (b), 
the Secretary shall submit to Congress a written report setting 
forth--
            ``(1) an explanation of the reasons for terminating 
        the program;
            ``(2) the alternatives considered to address any 
        problems in the program; and
            ``(3) the course the Department plans to pursue to 
        meet any continuing joint military requirements 
        otherwise intended to be met by the program.''.
            (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 2433 
        the following new item:

``2433a. Critical cost growth in major defense acquisition programs.''.

            (3) Conforming amendment.--Paragraph (2) of section 
        2433(e) of such title 10 is amended to read as follows:
    ``(2) If the program acquisition unit cost or procurement 
unit cost of a major defense acquisition program or designated 
major subprogram (as determined by the Secretary under 
subsection (d)) increases by a percentage equal to or greater 
than the critical cost growth threshold for the program or 
subprogram, the Secretary of Defense shall take actions 
consistent with the requirements of section 2433a of this 
title.''.
    (b) Treatment as MDAP.--Section 2430 of such title is 
amended--
            (1) in subsection (a)(2), by inserting ``, 
        including all planned increments or spirals,'' after 
        ``an eventual total expenditure for procurement''; and
            (2) by adding at the end the following new 
        subsection:
    ``(c) For purposes of subsection (a)(2), the Secretary 
shall consider, as applicable, the following:
            ``(1) The estimated level of resources required to 
        fulfill the relevant joint military requirement, as 
        determined by the Joint Requirements Oversight Council 
        pursuant to section 181 of this title.
            ``(2) The cost estimate referred to in section 
        2366a(a)(4) of this title.
            ``(3) The cost estimate referred to in section 
        2366b(a)(1)(C) of this title.
            ``(4) The cost estimate within a baseline 
        description as required by section 2435 of this 
        title.''.

SEC. 207. ORGANIZATIONAL CONFLICTS OF INTEREST IN MAJOR DEFENSE 
                    ACQUISITION PROGRAMS.

    (a) Revised Regulations Required.--Not later than 270 days 
after the date of the enactment of this Act, the Secretary of 
Defense shall revise the Defense Supplement to the Federal 
Acquisition Regulation to provide uniform guidance and tighten 
existing requirements for organizational conflicts of interest 
by contractors in major defense acquisition programs.
    (b) Elements.--The revised regulations required by 
subsection (a) shall, at a minimum--
            (1) address organizational conflicts of interest 
        that could arise as a result of--
                    (A) lead system integrator contracts on 
                major defense acquisition programs and 
                contracts that follow lead system integrator 
                contracts on such programs, particularly 
                contracts for production;
                    (B) the ownership of business units 
                performing systems engineering and technical 
                assistance functions, professional services, or 
                management support services in relation to 
                major defense acquisition programs by 
                contractors who simultaneously own business 
                units competing to perform as either the prime 
                contractor or the supplier of a major subsystem 
                or component for such programs;
                    (C) the award of major subsystem contracts 
                by a prime contractor for a major defense 
                acquisition program to business units or other 
                affiliates of the same parent corporate entity, 
                and particularly the award of subcontracts for 
                software integration or the development of a 
                proprietary software system architecture; or
                    (D) the performance by, or assistance of, 
                contractors in technical evaluations on major 
                defense acquisition programs;
            (2) ensure that the Department of Defense receives 
        advice on systems architecture and systems engineering 
        matters with respect to major defense acquisition 
        programs from federally funded research and development 
        centers or other sources independent of the prime 
        contractor;
            (3) require that a contract for the performance of 
        systems engineering and technical assistance functions 
        for a major defense acquisition program contains a 
        provision prohibiting the contractor or any affiliate 
        of the contractor from participating as a prime 
        contractor or a major subcontractor in the development 
        or construction of a weapon system under the program; 
        and
            (4) establish such limited exceptions to the 
        requirement in paragraphs (2) and (3) as may be 
        necessary to ensure that the Department of Defense has 
        continued access to advice on systems architecture and 
        systems engineering matters from highly-qualified 
        contractors with domain experience and expertise, while 
        ensuring that such advice comes from sources that are 
        objective and unbiased.
    (c) Consultation in Revision of Regulations.--
            (1) Recommendations of panel on contracting 
        integrity.--Not later than 90 days after the date of 
        the enactment of this Act, the Panel on Contracting 
        Integrity established pursuant to section 813 of the 
        John Warner National Defense Authorization Act for 
        Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2320) 
        shall present recommendations to the Secretary of 
        Defense on measures to eliminate or mitigate 
        organizational conflicts of interest in major defense 
        acquisition programs.
            (2) Consideration of recommendations.--In 
        developing the revised regulations required by 
        subsection (a), the Secretary shall consider the 
        following:
                    (A) The recommendations presented by the 
                Panel on Contracting Integrity pursuant to 
                paragraph (1).
                    (B) Any findings and recommendations of the 
                Administrator for Federal Procurement Policy 
                and the Director of the Office of Government 
                Ethics pursuant to section 841(b) of the Duncan 
                Hunter National Defense Authorization Act for 
                Fiscal Year 2009 (Public Law 110-417; 122 Stat. 
                4539).
    (d) Extension of Panel on Contracting Integrity.--
Subsection (e) of section 813 of the John Warner National 
Defense Authorization Act for Fiscal Year 2007 is amended to 
read as follows:
    ``(e) Termination.--
            ``(1) In general.--Subject to paragraph (2), the 
        panel shall continue to serve until the date that is 18 
        months after the date on which the Secretary of Defense 
        notifies the congressional defense committees of an 
        intention to terminate the panel based on a 
        determination that the activities of the panel no 
        longer justify its continuation and that concerns about 
        contracting integrity have been mitigated.
            ``(2) Minimum continuing service.--The panel shall 
        continue to serve at least until December 31, 2011.''.

              TITLE III--ADDITIONAL ACQUISITION PROVISIONS

SEC. 301. AWARDS FOR DEPARTMENT OF DEFENSE PERSONNEL FOR EXCELLENCE IN 
                    THE ACQUISITION OF PRODUCTS AND SERVICES.

    (a) In General.--Not later than 180 days after the date of 
the enactment of this Act, the Secretary of Defense shall 
commence carrying out a program to recognize excellent 
performance by individuals and teams of members of the Armed 
Forces and civilian personnel of the Department of Defense in 
the acquisition of products and services for the Department of 
Defense.
    (b) Elements.--The program required by subsection (a) shall 
include the following:
            (1) Procedures for the nomination by the personnel 
        of the military departments and the Defense Agencies of 
        individuals and teams of members of the Armed Forces 
        and civilian personnel of the Department of Defense for 
        eligibility for recognition under the program.
            (2) Procedures for the evaluation of nominations 
        for recognition under the program by one or more panels 
        of individuals from the Government, academia, and the 
        private sector who have such expertise, and are 
        appointed in such manner, as the Secretary shall 
        establish for purposes of the program.
    (c) Award of Cash Bonuses.--As part of the program required 
by subsection (a), the Secretary may award to any individual 
recognized pursuant to the program a cash bonus authorized by 
any other provision of law to the extent that the performance 
of such individual so recognized warrants the award of such 
bonus under such provision of law.

SEC. 302. EARNED VALUE MANAGEMENT.

    (a) Modification of Elements in Report on Implementation.--
Subsection (a) of section 887 of the Duncan Hunter National 
Defense Authorization Act for Fiscal Year 2009 (Public Law 110-
417; 122 Stat. 4562) is amended by striking paragraph (7) and 
inserting the following new paragraphs:
            ``(7) A discussion of the methodology used to 
        establish appropriate baselines for earned value 
        management at the award of a contract or commencement 
        of a program, whichever is earlier.
            ``(8) A discussion of the manner in which the 
        Department ensures that personnel responsible for 
        administering and overseeing earned value management 
        systems have the training and qualifications needed to 
        perform that responsibility.
            ``(9) A discussion of mechanisms to ensure that 
        contractors establish and use approved earned value 
        management systems, including mechanisms such as the 
        consideration of the quality of contractor earned value 
        management performance in past performance evaluations.
            ``(10) Recommendations for improving earned value 
        management and its implementation within the 
        Department, including--
                    ``(A) a discussion of the merits of 
                possible alternatives; and
                    ``(B) a plan for implementing any 
                improvements the Secretary determines to be 
                appropriate.''.
    (b) Modification of Report Date.--Subsection (b) of such 
section is amended by striking ``270 days after the date of the 
enactment of this Act'' and inserting ``October 14, 2009''.

SEC. 303. EXPANSION OF NATIONAL SECURITY OBJECTIVES OF THE NATIONAL 
                    TECHNOLOGY AND INDUSTRIAL BASE.

    (a) In General.--Section 2501(a) of title 10, United States 
Code, is amended by adding at the end the following new 
paragraph:
            ``(6) Maintaining critical design skills to ensure 
        that the armed forces are provided with systems capable 
        of ensuring technological superiority over potential 
        adversaries.''.
    (b) Assessment of Effect of Termination of Major Defense 
Acquisition Programs on Technology and Industrial 
Capabilities.--Section 2505(b) of such title is amended--
            (1) in paragraph (2), by striking ``and'' at the 
        end;
            (2) in paragraph (3), by striking the period at the 
        end and inserting ``; and''; and
            (3) by adding at the end the following new 
        paragraph:
            ``(4) consider the effects of the termination of 
        major defense acquisition programs (as the term is 
        defined in section 2430 of this title) in the previous 
        fiscal year on the sectors and capabilities in the 
        assessment.''.

SEC. 304. COMPTROLLER GENERAL OF THE UNITED STATES REPORTS ON COSTS AND 
                    FINANCIAL INFORMATION REGARDING MAJOR DEFENSE 
                    ACQUISITION PROGRAMS.

    (a) Review of Operating and Support Costs of Major Weapon 
Systems.--
            (1) In general.--Not later than one year after the 
        date of the enactment of this Act, the Comptroller 
        General of the United States shall submit to the 
        congressional defense committees a report on growth in 
        operating and support costs for major weapon systems.
            (2) Elements.--In preparing the report required by 
        paragraph (1), the Comptroller General shall, at a 
        minimum--
                    (A) identify the original estimates for 
                operating and support costs for major weapon 
                systems selected by the Comptroller General for 
                purposes of the report;
                    (B) assess the actual operating and support 
                costs for such major weapon systems;
                    (C) analyze the rate of growth for 
                operating and support costs for such major 
                weapon systems;
                    (D) for such major weapon systems that have 
                experienced the highest rate of growth in 
                operating and support costs, assess the factors 
                contributing to such growth;
                    (E) assess measures taken by the Department 
                of Defense to reduce operating and support 
                costs for major weapon systems; and
                    (F) make such recommendations as the 
                Comptroller General considers appropriate.
    (b) Review of Financial Information Relating to Major 
Defense Acquisition Programs.--
            (1) Review.--The Comptroller General of the United 
        States shall perform a review of weaknesses in 
        operations affecting the reliability of financial 
        information on the systems and assets to be acquired 
        under major defense acquisition programs.
            (2) Elements.--The review required under paragraph 
        (1) shall--
                    (A) identify any weaknesses in operations 
                under major defense acquisition programs that 
                hinder the capacity to assemble reliable 
                financial information on the systems and assets 
                to be acquired under such programs in 
                accordance with applicable accounting 
                standards;
                    (B) identify any mechanisms developed by 
                the Department of Defense to address weaknesses 
                in operations under major defense acquisition 
                programs identified pursuant to subparagraph 
                (A); and
                    (C) assess the implementation of the 
                mechanisms set forth pursuant to subparagraph 
                (B), including--
                            (i) the actions taken, or planned 
                        to be taken, to implement such 
                        mechanisms;
                            (ii) the schedule for carrying out 
                        such mechanisms; and
                            (iii) the metrics, if any, 
                        instituted to assess progress in 
                        carrying out such mechanisms.
            (3) Consultation.--In performing the review 
        required by paragraph (1), the Comptroller General 
        shall seek and consider input from each of the 
        following:
                    (A) The Chief Management Officer of the 
                Department of Defense.
                    (B) The Chief Management Officer of the 
                Department of the Army.
                    (C) The Chief Management Officer of the 
                Department of the Navy.
                    (D) The Chief Management Officer of the 
                Department of the Air Force.
            (4) Report.--Not later than one year after the date 
        of enactment of this Act, the Comptroller General shall 
        submit to the congressional defense committees a report 
        on the results of the review required by paragraph (1).

      And the House agree to the same.

                                   Ike Skelton,
                                   John M. Spratt,
                                   Solomon P. Ortiz,
                                   Gene Taylor,
                                   Neil Abercrombie,
                                   Silvestre Reyes,
                                   Vic Snyder,
                                   Adam Smith,
                                   Loretta Sanchez,
                                   Mike McIntyre,
                                   Ellen O. Tauscher,
                                   Robert E. Andrews,
                                   Susan A. Davis,
                                   James R. Langevin,
                                   Jim Cooper,
                                   Brad Ellsworth,
                                   Joe Sestak,
                                   John M. McHugh,
                                   Roscoe G. Bartlett,
                                   Howard ``Buck'' McKeon,
                                   Mac Thornberry,
                                   Walter B. Jones,
                                   W. Todd Akin,
                                   J. Randy Forbes,
                                   Jeff Miller,
                                   Joe Wilson,
                                   K. Michael Conaway,
                                   Duncan Hunter,
                                   Mike Coffman,
                                 Managers on the Part of the House.

                                   Carl Levin,
                                   Edward M. Kennedy,
                                   Robert C. Byrd,
                                   Joseph Lieberman,
                                   Jack Reed,
                                   Daniel K. Akaka,
                                   Bill Nelson,
                                   Ben Nelson,
                                   Evan Bayh,
                                   Jim Webb,
                                   Claire McCaskill,
                                   Mark Udall,
                                   Kay R. Hagan,
                                   Mark Begich,
                                   Roland W. Burris,
                                   John McCain,
                                   James M. Inhofe,
                                   Jeff Sessions,
                                   Saxby Chambliss,
                                   Lindsey Graham,
                                   John Thune,
                                   Mel Martinez,
                                   Roger F. Wicker,
                                   Richard Burr,
                                   David Vitter,
                                   Susan Collins,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendment of the House to the bill (S. 454), to improve the 
organization and procedures of the Department of Defense for 
the acquisition of major weapon systems, and for other 
purposes, submit the following joint statement to the House and 
the Senate in explanation of the effect of the action agreed 
upon by the managers and recommended in the accompanying 
conference report:
      The House amendment struck all of the Senate bill after 
the enacting clause and inserted a substitute text.
      The Senate recedes from its disagreement to the amendment 
of the House with an amendment that is a substitute for the 
Senate bill and the House amendment. The differences between 
the Senate bill, the House amendment, and the substitute agreed 
to in conference are noted below, except for clerical 
corrections, conforming changes made necessary by agreements 
reached by the conferees, and minor drafting and clarifying 
changes.

                   TITLE I--ACQUISITION ORGANIZATION

Cost assessment and program evaluation (sec. 101)
      The Senate bill contained a provision (sec. 104) that 
would establish a Director of Independent Cost Assessment in 
the Department of Defense (DOD) to ensure that cost estimates 
for major defense acquisition programs and major automated 
information system programs are fair, reliable, and unbiased.
      The House amendment contained a provision (sec. 102) that 
would require the Secretary of Defense to designate an official 
within the Office of the Secretary of Defense to perform this 
function.
      The House recedes with an amendment that would establish 
a Director of Cost Assessment and Performance Evaluation, who 
would be responsible for ensuring that cost estimates are fair, 
reliable, and unbiased, and for performing program analysis and 
evaluation functions currently performed by the Director of 
Program Analysis and Evaluation. The provision would also 
codify the cost estimating requirements from the Senate bill 
and the House amendment in a new section 2334 of title 10, 
United States Code.
Directors of Developmental Test and Evaluation and Systems Engineering 
        (sec. 102)
      The Senate bill contained a provision (sec. 101) that 
would require certain reports on systems engineering 
capabilities of the Department of Defense. The Senate bill also 
contained a provision (sec. 102) that would establish the 
position of Director of Developmental Test and Evaluation.
      The House amendment contained provisions (sec. 101 and 
103) that would require the Secretary of Defense to appoint 
senior officials to carry out acquisition oversight functions, 
including systems engineering and developmental testing.
      The Senate recedes with an amendment that would establish 
the positions of Director of Developmental Test and Evaluation 
and Director of Systems Engineering and establish requirements 
on the issuance of guidance and reports on systems engineering 
and developmental testing. The amendment would further require 
the service acquisition executive of each military department 
and defense agency to implement and report on plans to ensure 
that the military departments and defense agencies have 
appropriate developmental test, systems engineering, and 
development planning resources.
      The Defense Science Board Task Force on Developmental 
Test and Evaluation reported in May 2008 that the Army has 
essentially eliminated its developmental testing component, 
while the Navy and the Air Force have cut their testing 
workforce by up to 60 percent in some organizations. As a 
result, ``(a) significant amount of developmental testing is 
currently performed without a needed degree of government 
involvement or oversight and in some cases, with limited 
government access to contractor data.''
      Similarly, the Committee on Pre-Milestone A and Early-
Phase Systems Engineering of Air Force Studies Board of the 
National Research Council reported that ``in recent years the 
depth of systems engineering (SE) talent in the Air Force has 
declined owing to policies within the Department of Defense 
(DOD) that shifted the oversight of SE functions increasingly 
to outside contractors, as well as to the decline of in-house 
development planning capabilities in the Air Force . . . . The 
result is that there are no longer enough experienced systems 
engineers to fill the positions in programs that need them, 
particularly within the government.''
      The conferees expect the Director of Developmental Test 
and Evaluation and the Director of Systems Engineering to work 
with the military departments and defense agencies to ensure 
that they rebuild these capabilities and perform the 
developmental testing and systems engineering functions 
necessary to ensure the successful execution of major defense 
acquisition programs. In particular, the conferees expect the 
military departments to conduct developmental testing early in 
the execution of a major defense acquisition program, to 
validate that a system's design is demonstrating appropriate 
progress toward technological maturity and toward meeting 
system performance requirements.
Performance assessments and root cause analyses for major defense 
        acquisition programs (sec. 103)
      The House amendment contained a provision (sec. 104) that 
would require the Secretary of Defense to designate a senior 
official in the Office of the Secretary of Defense as the 
principal Department of Defense official responsible for 
issuing policies, procedures, and guidance governing the 
conduct of performance assessments for major defense 
acquisition programs.
      The Senate bill contained no similar provision.
      The Senate recedes with an amendment that would require 
the Secretary to designate a senior official responsible for 
conducting and overseeing performance assessments and root 
cause analyses for major defense acquisition programs.
Assessment of technological maturity of critical technologies of major 
        defense acquisition programs by the Director of Defense 
        Research and Engineering (sec. 104)
      The Senate bill contained a provision (sec. 103) that 
would require the Director of Defense Research and Engineering, 
in consultation with the Director of Developmental Test and 
Evaluation, to periodically review and assess the technological 
maturity and integration risk of critical technologies on major 
defense acquisition programs.
      The House amendment contained a similar provision (sec. 
105).
      The Senate recedes with an amendment that would combine 
the two provisions. The conferees note that the technological 
maturity standard for major defense acquisition programs at the 
time of Milestone B approval (or Key Decision Point B approval 
in the case of space programs) is established by statute in 
section 2366b of title 10, United States Code. The conferees 
expect the Director of Defense Research and Engineering to 
establish appropriate knowledge-based standards for 
technological maturity at other key points in the acquisition 
process, as well as appropriate standards for integration risk.
Role of the commanders of the combatant commands in identifying joint 
        military requirements (sec. 105)
      The Senate bill contained a provision (sec. 105) that 
would clarify the role of the commanders of the combatant 
commands in identifying joint military requirements.
      The House amendment contained a similar provision (sec. 
106).
      The Senate recedes with an amendment to ensure that the 
Comptroller General review required by the provision would 
address the full range of issues raised by recent legislative 
changes to the process for the identification of joint military 
requirements.

                   LEGISLATIVE PROVISION NOT ADOPTED

Clarification of submittal of certification of adequacy of budgets by 
        the Director of the Department of Defense Test Resource 
        Management Center
      The Senate bill contained a provision (sec. 106) that 
would clarify the impact of organizational changes made in the 
Senate bill on the requirement for the Director of the 
Department of Defense Test Resource Management Center to 
certify the adequacy of budgets to the Secretary of Defense.
      The House amendment contained no similar provision.
      The Senate recedes. The provision is unnecessary, because 
the organizational changes to the Defense Test Resource 
Management Center that required the clarification are not 
included in the conference report.

                      TITLE II--ACQUISITION POLICY

Consideration of trade-offs among cost, schedule, and performance 
        objectives in Department of Defense acquisition programs (sec. 
        201)
      The Senate bill contained a provision (sec. 201) that 
would require the Department of Defense to implement mechanisms 
to ensure that trade-offs among cost, schedule, and performance 
objectives are considered early in the process of developing 
requirements for major weapon systems.
      The House amendment contained a provision (sec. 207) that 
would require the Comptroller General to review and report to 
Congress on mechanisms used by the Department to make such 
trade-offs.
      The House recedes with an amendment clarifying the 
required mechanisms. The conference amendment includes a 
requirement for the Secretary of Defense to review proposed 
joint military requirements to ensure that the Joint 
Requirements Oversight Council has given appropriate 
consideration to trade-offs between cost, schedule, and 
performance objectives. The Secretary would have flexibility to 
determine how best to conduct the required review.
Acquisition strategies to ensure competition throughout the lifecycle 
        of major defense acquisition programs (sec. 202)
      The Senate bill contained a provision (sec. 203) that 
would require the Secretary of Defense to ensure that the 
acquisition strategy for each major defense acquisition program 
includes measures to ensure competition, or the option of 
competition, at both the prime contract level and the 
subcontract level. The Senate provision would also establish 
certain requirements for the use of prototypes on major defense 
acquisition programs.
      The House amendment contained a similar provision (sec. 
201), but did not include requirements for the use of 
prototypes.
      The House recedes with an amendment combining elements 
from the Senate bill and the House amendment. The Senate 
language on prototypes is addressed in a separate section.
Prototyping requirements for major defense acquisition programs (sec. 
        203)
      The Senate bill contained a provision (sec. 203(c) and 
(d)) that would establish prototyping requirements for major 
defense acquisition programs.
      The House amendment contained no similar provision.
      The House recedes with an amendment that would simplify 
the requirement.
Actions to identify and address systemic problems in major defense 
        acquisition programs prior to Milestone B approval (sec. 204)
      The House amendment contained a provision (sec. 203) that 
would enhance requirements for the Department of Defense to 
identify and address systemic problems in major defense 
acquisition programs before Milestone B approval, while such 
programs are still in the technology development phase.
      The Senate bill contained no similar provision.
      The Senate recedes with a clarifying amendment. The 
conferees agree that greater investment of time and resources 
in the technology development phase is likely to result in 
better overall program performance and lower overall program 
costs. For this reason, increased time or expenditures for 
early testing and development should not alone be taken as an 
indication that a program is troubled and needs to be 
terminated or restructured.
Additional requirements for certain major defense acquisition programs 
        (sec. 205)
      The Senate bill contained a provision (sec. 202) that 
would establish certain requirements relating to preliminary 
design review and critical design review for major defense 
acquisition programs.
      The House amendment contained a provision (sec. 202) that 
would establish new procedures for programs that fail to meet 
all of the requirements for Milestone B certification under 
section 2366b of title 10, United States Code, and would 
establish requirements relating to preliminary design review 
for major defense acquisition programs.
      The Senate recedes with a clarifying amendment. The 
conference amendment does not include the Senate provision 
regarding critical design review, because this requirement is 
already addressed in Department of Defense Instruction 5000.02 
(December 2008 revision). The conferees view this requirement 
as a key step in a knowledge-based approach to acquisition, and 
expect to revisit this issue if the current requirement for 
critical design review is discontinued or is not enforced.
Critical cost growth in major defense acquisition programs (sec. 206)
      The Senate bill contained a provision (sec. 204) that 
would strengthen the so-called ``Nunn-McCurdy'' requirements in 
section 2433(e)(2) of title 10, United States Code, for major 
defense acquisition programs that experience excessive cost 
growth.
      The House amendment contained a similar provision (sec. 
204).
      The House recedes with an amendment combining elements 
from the Senate bill and the House amendment. The conference 
amendment would also recodify these requirements in a new 
section 2433a of title 10, United States Code.
Organizational conflicts of interest in major defense acquisition 
        programs (sec. 207)
      The Senate bill contained a provision (sec. 205) that 
would require the Under Secretary of Defense for Acquisition, 
Technology, and Logistics to issue regulations addressing 
organizational conflicts of interest by contractors in the 
acquisition of major weapon systems.
      The House amendment contained a similar provision (sec. 
205).
      The House recedes with an amendment combining elements 
from the Senate bill and the House amendment. Existing 
Department of Defense regulations leave it up to individual 
elements of the Department to determine on a case-by-case basis 
whether or not organizational conflicts of interest can be 
mitigated, and if so, what mitigation measures are required. 
The conferees agree that additional guidance is required to 
tighten existing requirements, provide consistency throughout 
the Department, and ensure that advice provided by contractors 
is objective and unbiased. In developing the regulations 
required by this section for cases in which mitigation is 
determined to be appropriate, the conferees expect the 
Secretary to give consideration to strengthened measures of 
organizational separation of the type included in the Senate 
bill.

              TITLE III--ADDITIONAL ACQUISITION PROVISIONS

Awards for Department of Defense personnel for excellence in the 
        acquisition of products and services (sec. 301)
      The Senate bill contained a provision (sec. 206) that 
would direct the Secretary of Defense to establish a program to 
recognize excellent performance by individuals and teams in the 
acquisition of products and services for the Department of 
Defense.
      The House amendment contained an identical provision 
(sec. 206). The conference report includes this provision.
Earned value management (sec. 302)
      The Senate bill contained a provision (sec. 207) that 
would require the Under Secretary of Defense for Acquisition, 
Technology, and Logistics to review and improve guidance 
governing the implementation of Earned Value Management (EVM) 
systems for Department of Defense (DOD) contracts.
      The House amendment contained no similar provision.
      The House recedes with an amendment that would 
incorporate the requirements of the Senate provision into 
section 887 of the Duncan Hunter National Defense Authorization 
Act for Fiscal Year 2009 (Public Law 110-417), which requires 
the Secretary of Defense to identify and address shortcomings 
in EVM systems for DOD contracts.
Expansion of national security objectives of the national technology 
        and industrial base (sec. 303)
      The Senate bill contained a provision (sec. 208) that 
would amend section 2501 of title 10, United States Code, to 
address critical design skills in the national technology and 
industrial base and require reports on the termination of major 
defense acquisition programs.
      The House amendment contained no similar provision.
      The House recedes with an amendment requiring that 
defense capability assessments performed pursuant to section 
2505 of title 10, United States Code, consider the effects of 
the termination of major defense acquisition programs. The 
outcome of this assessment would be incorporated into the 
annual reports required by section 2504 of title 10, United 
States Code.
Comptroller General of the United States reports on costs and financial 
        information regarding major defense acquisition programs (sec. 
        304)
      The Senate bill contained two provisions (sec. 104(b) and 
sec. 209) that would require reports by the Government 
Accountability Office on: (1) operating and support costs of 
major weapon systems; and (2) financial information relating to 
major defense acquisition programs.
      The House amendment contained no similar provision.
      The House recedes with an amendment incorporating the two 
reporting requirements into a single provision.

                 COMPLIANCE WITH SENATE AND HOUSE RULES

Compliance with rules of the Senate and the House of Representatives 
        regarding earmarks and congressionally directed spending items
      Pursuant to clause 9 of rule XXI of the Rules of the 
House of Representatives and Rule XLIV(3) of the Standing Rules 
of the Senate, neither this conference report nor the 
accompanying joint statement of managers contains any 
congressional earmarks, congressionally directed spending 
items, limited tax benefits, or limited tariff benefits, as 
defined in such rules.

                                   Ike Skelton,
                                   John M. Spratt,
                                   Solomon P. Ortiz,
                                   Gene Taylor,
                                   Neil Abercrombie,
                                   Silvestre Reyes,
                                   Vic Snyder,
                                   Adam Smith,
                                   Loretta Sanchez,
                                   Mike McIntyre,
                                   Ellen O. Tauscher,
                                   Robert E. Andrews,
                                   Susan A. Davis,
                                   James R. Langevin,
                                   Jim Cooper,
                                   Brad Ellsworth,
                                   Joe Sestak,
                                   John M. McHugh,
                                   Roscoe G. Bartlett,
                                   Howard ``Buck'' McKeon,
                                   Mac Thornberry,
                                   Walter B. Jones,
                                   W. Todd Akin,
                                   J. Randy Forbes,
                                   Jeff Miller,
                                   Joe Wilson,
                                   K. Michael Conaway,
                                   Duncan Hunter,
                                   Mike Coffman,
                                 Managers on the Part of the House.

                                   Carl Levin,
                                   Edward M. Kennedy,
                                   Robert C. Byrd,
                                   Joseph Lieberman,
                                   Jack Reed,
                                   Daniel K. Akaka,
                                   Bill Nelson,
                                   Ben Nelson,
                                   Evan Bayh,
                                   Jim Webb,
                                   Claire McCaskill,
                                   Mark Udall,
                                   Kay R. Hagan,
                                   Mark Begich,
                                   Roland W. Burris,
                                   John McCain,
                                   James M. Inhofe,
                                   Jeff Sessions,
                                   Saxby Chambliss,
                                   Lindsey Graham,
                                   John Thune,
                                   Mel Martinez,
                                   Roger F. Wicker,
                                   Richard Burr,
                                   David Vitter,
                                   Susan Collins,
                                Managers on the Part of the Senate.

                                  
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