II 

112TH CONGRESS 

1ST SESSION S. 1694 

To limit the use of cost-type contracts by the Department of Defense for 

major defense acquisition programs. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 12, 2011 

Mr. MCCAIN (for himself and Ms. AYOTTE) introduced the following bill; 

which was read twice and referred to the Committee on Armed Services 

A BILL 

To limit the use of cost-type contracts by the Department 

of Defense for major defense acquisition programs. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Defense Cost-Type 

5 Contracting Reform Act of 2011’’. 

6 SEC. 2. LIMITATION ON USE OF COST-TYPE CONTRACTS. 

7 (a) PROHIBITION WITH RESPECT TO PRODUCTION

8 OF MAJOR DEFENSE ACQUISITION PROGRAMS.—Not later 

9 than 120 days after the date of the enactment of this Act, 

10 the Secretary of Defense shall modify the acquisition regumstockstill on DSK4VPTVN1PROD with BILLS

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1 lations of the Department of Defense to prohibit the De2 partment from entering into cost-type contracts for the 

3 production of major defense acquisition programs 

4 (MDAPs). 

5 (b) CONDITIONS WITH RESPECT TO DEVELOPMENT

6 OF MAJOR DEFENSE ACQUISITION PROGRAMS.—Section 

7 818(d) of the John Warner National Defense Authoriza8 tion Act for Fiscal Year 2007 (Public Law 109–364; 120 

9 Stat. 2329; 10 U.S.C. 2306 note) is amended— 

10 (1) in paragraph (1), by striking ‘‘; and’’ and 

11 inserting a semicolon; 

12 (2) in paragraph (2), by striking the period at 

13 the end and inserting ‘‘; and’’; and 

14 (3) by adding at the end the following new 

15 paragraphs: 

16 ‘‘(3) all reasonable efforts have been made to 

17 define the requirements sufficiently to allow for the 

18 use of a fixed-price contract for the development of 

19 the major defense acquisition program; and 

20 ‘‘(4) despite these efforts, the Department of 

21 Defense cannot define requirements sufficiently to 

22 allow for the use of a fixed-price contract for the de23 velopment of the major defense acquisition pro24 gram.’’. 

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1 (c) REPORTING OF COST-TYPE DEVELOPMENT CON2 TRACTS.—Not later than 30 business days before issuing 

3 a solicitation for the development of a major defense ac4 quisition program, the Secretary of Defense shall submit 

5 to the Committee on Armed Services and the Committee 

6 on Appropriations of the Senate and the Committee on 

7 Armed Services and the Committee on Appropriations of 

8 the House of Representatives notice of the proposed award 

9 and the written determinations required under paragraphs 

10 (1) and (4) of section 818(d) of the John Warner National 

11 Defense Authorization Act for Fiscal Year 2007, as 

12 amended by subsection (b), and the reasons supporting 

13 the determinations. 

14 (d) DEFINITIONS.—In this section: 

15 (1) MAJOR DEFENSE ACQUISITION PROGRAM.— 

16 The term ‘‘major defense acquisition program’’ has 

17 the meaning given the term in section 2430(a) of 

18 title 10, United States Code. 

19 (2) PRODUCTION OF A MAJOR DEFENSE ACQUI20 SITION PROGRAM.—The term ‘‘production of a major 

21 defense acquisition program’’ means the production, 

22 either on a low-rate initial production or full-rate 

23 production basis, and deployment of a major system 

24 that is intended to achieve operational capability 

25 that satisfies mission needs, or any activity othermstockstill on DSK4VPTVN1PROD with BILLS

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1 wise defined as Milestone C, or Key Decision Point 

2 C in the case of a space program, under Department 

3 of Defense Instruction 5000.02 or related authori4 ties. 

5 (3) DEVELOPMENT OF A MAJOR DEFENSE AC6 QUISITION PROGRAM.—The term ‘‘development of a 

7 major defense acquisition program’’ means the de8 velopment of a major defense acquisition program or 

9 related increment of capability, the completion of full 

10 system integration, the development of an affordable 

11 and executable manufacturing process, the dem12 onstration of system integration, interoperability, 

13 safety, and utility, or any activity otherwise defined 

14 as Milestone B, or Key Decision Point B in the case 

15 of a space program, under Department of Defense 

16 Instruction 5000.02 or related authorities. 

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