II 

118TH CONGRESS 

2D SESSION S. 5553 

To provide for the use of capability-based analysis of price of goods or 

services offered by nontraditional defense contractors. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 17 (legislative day, DECEMBER 16), 2024 

Mr. CORNYN introduced the following bill; which was read twice and referred 

to the Committee on Armed Services 

A BILL 

To provide for the use of capability-based analysis of price 

of goods or services offered by nontraditional defense 

contractors. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. USE OF CAPABILITY-BASED ANALYSIS OF 

4 PRICE OF GOODS OR SERVICES OFFERED BY 

5 NONTRADITIONAL DEFENSE CONTRACTORS. 

6 (a) PILOT PROGRAM.—A contracting officer of the 

7 Department of Defense may use alternative capability8 based analysis to determine whether the proposed price 

9 or fee for a commercial product or commercial service of10 fered by a nontraditional defense contractor (as that term 


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1 is defined in section 3014 of title 10, United States Code) 

2 is fair and reasonable. 

3 (b) REPORT.—Not later than February 1, 2028, the 

4 Under Secretary of Defense for Acquisition and 

5 Sustainment shall submit to the Committees on Armed 

6 Services of the Senate and the House of Representatives 

7 a report evaluating the use of the authority under sub8 section (a), including the following elements: 

9 (1) A summary of activities conducted because 

10 of the inclusion of alternative capability-based anal11 ysis into the evaluation of proposals offered by non12 traditional contractors, including specific examples. 

13 (2) An analysis of the effectiveness of the au14 thority under subsection (a) in increasing nontradi15 tional defense contractor participation in the defense 

16 industrial base and in increasing access by the De17 partment of Defense to new technologies or capabili18 ties. 

19 (3) Recommendations on— 

20 (A) the continuation of the authority under 

21 subsection (a); 

22 (B) changes to existing law; and 

23 (C) the expansion of the program to in24 clude other contractors. 


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1 (c) SUNSET.—The authority under subsection (a) 

2 shall expire on September 30, 2029. 

3 (d) ALTERNATIVE CAPACITY-BASED ANALYSIS DE4 FINED.—In this section, the term ‘‘alternative capability5 based analysis’’ means an analysis of the value to the Fed6 eral Government of a commercial product or commercial 

7 service that considers one or more of the following ele8 ments: 

9 (1) The fitness of the product or service for the 

10 particular purpose such commercial product or com11 mercial service is being procured. 

12 (2) The unique nature of, technical expertise re13 quired to produce or provide, and the non-Federal 

14 resources expended to develop such commercial prod15 uct or commercial service. 

16 (3) The business model or financial projections 

17 of the nontraditional defense contractor, commensu18 rate with the scale of the potential investment by the 

19 Secretary of Defense, which may include cost infor20 mation, self-funded risk, financial projections, ex21 penditure rates, estimates of total sales market, and 

22 other financial, technical, or management data. 

23 (4) The estimated total cost avoidance or in24 creased capacity afforded by such commercial prod25 uct or commercial service in relation to current and 


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1 future costs of programs and operations that provide 

2 the same or similar capabilities. 

3 (5) Input from the anticipated users of such 

4 commercial product or commercial service on the po5 tential value added by the improved capabilities or 

6 production processes resulting from such commercial 

7 product or commercial service. 

Æ 


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