II 

113TH CONGRESS 

1ST SESSION S. 1510 

To provide for auditable financial statements for the Department of Defense, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 17, 2013 

Mr. COBURN (for himself, Mr. MANCHIN, Mr. GRASSLEY, Mr. JOHNSON of 

Wisconsin, Mr. PAUL, Ms. AYOTTE, Mr. CORNYN, Mr. CHAMBLISS, Mr. 

HELLER, Mrs. MCCASKILL, and Mr. WYDEN) introduced the following 

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

A BILL 

To provide for auditable financial statements for the 

Department of Defense, and for other purposes. 

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 ‘‘Audit the Pentagon 

5 Act of 2013’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 

8 (1) Section 9 of Article I of the Constitution of 

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1 eral Government, including the Department of De2 fense, to publish ‘‘a regular statement and account 

3 of the receipts and expenditures of all public 

4 money’’. 

5 (2) Section 3515 of title 31, United States 

6 Code, requires the agencies of the Federal Govern7 ment, including the Department of Defense, to 

8 present auditable financial statements beginning not 

9 later than March 1, 1997. The Department has not 

10 complied with this law. 

11 (3) The Federal Financial Management Im12 provement Act of 1996 (31 U.S.C. 3512 note) re13 quires financial systems acquired by the Federal 

14 Government, including the Department of Defense, 

15 to be able to provide information to leaders to man16 age and control the cost of Government. The De17 partment has not complied with this law. 

18 (4) The financial management of the Depart19 ment of Defense has been on the ‘‘High-Risk’’ list 

20 of the Government Accountability Office, which 

21 means that the Department is not consistently able 

22 to ‘‘control costs; ensure basic accountability; antici23 pate future costs and claims on the budget; measure 

24 performance; maintain funds control; [and] prevent 

25 and detect fraud, waste, and abuse’’. 


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1 (5) The National Defense Authorization Act for 

2 Fiscal Year 2002 (Public Law 107–107) requires 

3 the Secretary of Defense to report to Congress an4 nually on the reliability of the financial statements 

5 of the Department of Defense, to minimize resources 

6 spent on producing unreliable financial statements, 

7 and to use resources saved to improve financial man8 agement policies, procedures, and internal controls. 

9 (6) In 2005, the Department of Defense cre10 ated a Financial Improvement and Audit Readiness 

11 (FIAR) Plan, overseen by a directorate within the 

12 office of the Under Secretary of Defense (Comp13 troller), to improve Department business processes 

14 with the goal of producing timely, reliable, and accu15 rate financial information that could generate an 

16 audit-ready annual financial statement. In December 

17 2005, that directorate, known as the FIAR Direc18 torate, issued the first of a series of semiannual re19 ports on the status of the Financial Improvement 

20 and Audit Readiness Plan. 

21 (7) The National Defense Authorization Act for 

22 Fiscal Year 2010 (Public Law 111–84) requires reg23 ular status reports on the Financial Improvement 

24 and Audit Readiness Plan described in paragraph 

25 (6), and codified as a statutory requirement the goal 


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1 of the Plan in ensuring that Department of Defense 

2 financial statements are validated as ready for audit 

3 not later than September 30, 2017. In addition, the 

4 National Defense Authorization Act for Fiscal Year 

5 2013 (Public Law 112–239) requires that the state6 ment of budgetary resources of the Department of 

7 Defense be validated as ready for audit by not later 

8 than September 30, 2014. 

9 (8) At a September 2010 hearing of the Senate, 

10 the Government Accountability Office stated that 

11 past expenditures by the Department of Defense of 

12 $5,800,000,000 to improve financial information, 

13 and billions of dollars more of anticipated expendi14 tures on new information technology systems for 

15 that purpose, may not suffice to achieve full audit 

16 readiness of the financial statement of the Depart17 ment. At that hearing, the Government Account18 ability Office could not predict when the Department 

19 would achieve full audit readiness of such state20 ments. 

21 (9) At a 2013 hearing of the Senate, Secretary 

22 of Defense Chuck Hagel affirmed his commitment to 

23 audit-ready budget statements for the Department 

24 of Defense by the end of 2014, and stated that he 

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1 ment’’. At that hearing, Secretary Hagel noted that 

2 auditable financial statements were essential to the 

3 Department not only for improving the quality of its 

4 financial information, but also for reassuring the 

5 public and Congress that it is a good steward of 

6 public funds. 

7 SEC. 3. CESSATION OF APPLICABILITY OF REPORTING RE8 QUIREMENTS REGARDING THE FINANCIAL 

9 STATEMENTS OF THE DEPARTMENT OF DE10 FENSE. 

11 (a) CESSATION OF APPLICABILITY.— 

12 (1) MILITARY DEPARTMENTS.—The financial 

13 statements of a military department shall cease to 

14 be covered by the reporting requirements specified in 

15 subsection (b) upon the issuance of an unqualified 

16 audit opinion on such financial statements. 

17 (2) DEPARTMENT OF DEFENSE.—The reporting 

18 requirements specified in subsection (b) shall cease 

19 to be effective when an unqualified audit opinion is 

20 issued on the financial statements of the Depart21 ment of Defense, including each of the military de22 partments and the other reporting entities defined 

23 by the Office of Management and Budget. 

24 (b) REPORTING REQUIREMENTS.—The reporting re25 quirements specified in this subsection are the following: 


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1 (1) The requirement for annual reports in sec2 tion 892(b) of the Ike Skelton National Defense Au3 thorization Act for Fiscal Year 2011 (Public Law 

4 111–383; 124 Stat. 4311; 10 U.S.C. 2306a note). 

5 (2) The requirement for semi-annual reports in 

6 section 1003(b) of the National Defense Authoriza7 tion Act for Fiscal Year 2010 (Public Law 111–84; 

8 123 Stat. 2440; 10 U.S.C. 2222 note). 

9 (3) The requirement for annual reports in sec10 tion 817(d) of the Bob Stump National Defense Au11 thorization Act for Fiscal Year 2003 (10 U.S.C. 

12 2306a note). 

13 (4) The requirement for annual reports in sec14 tion 1008(a) of the National Defense Authorization 

15 Act for Fiscal Year 2002 (Public Law 107–107; 115 

16 Stat. 1204; 10 U.S.C. 113 note). 

17 (5) The requirement for periodic reports in sec18 tion 908(b) of the Defense Acquisition Improvement 

19 Act of 1986 (Public Law 99–500; 100 Stat. 1783– 

20 140; 10 U.S.C. 2326 note) and duplicate require21 ments as provided for in section 6 of the Defense 

22 Technical Corrections Act of 1987 (Public Law 100– 

23 26; 101 Stat. 274; 10 U.S.C. 2302 note). 


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1 SEC. 4. ENHANCED REPROGRAMMING AUTHORITY FOL2 LOWING ACHIEVEMENT BY DEPARTMENT OF 

3 DEFENSE AND MILITARY DEPARTMENTS OF 

4 AUDIT WITH UNQUALIFIED OPINION OF 

5 STATEMENT OF BUDGETARY RESOURCES 

6 FOR FISCAL YEARS AFTER FISCAL YEAR 2014. 

7 (a) DEPARTMENT OF DEFENSE GENERALLY.—Sub8 ject to section 6(1), if the Department of Defense obtains 

9 an audit with an unqualified opinion on its statement of 

10 budgetary resources for any fiscal year after fiscal year 

11 2014, the limitation on the total amount of authorizations 

12 that the Secretary of Defense may transfer pursuant to 

13 general transfer authority available to the Secretary in the 

14 national interest in the succeeding fiscal year shall be 

15 $8,000,000,000. 

16 (b) MILITARY DEPARTMENTS, DEFENSE AGENCIES, 

17 AND DEFENSE FIELD ACTIVITIES.—Subject to section 

18 7(a), if a military department, Defense Agency, or defense 

19 field activity obtains an audit with an unqualified opinion 

20 on its statement of budgetary resources for any fiscal year 

21 after fiscal year 2014, the thresholds for reprogramming 

22 of funds of such military department, Defense Agency, or 

23 defense field activity, as the case may be, without prior 

24 notice to Congress for the succeeding fiscal year shall be 

25 deemed to be the thresholds as follows: 


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1 (1) In the case of an increase or decrease to the 

2 program base amount for a procurement program, 

3 $60,000,000. 

4 (2) In the case of an increase or decrease to the 

5 program base amount for a research program, 

6 $30,000,000. 

7 (3) In the case of an increase or decrease to the 

8 amount for a budget activity for operation and 

9 maintenance, $45,000,000. 

10 (4) In the case of an increase or decrease to the 

11 amount for a budget activity for military personnel, 

12 $30,000,000. 

13 (c) CONSTRUCTION.—Nothing in this section shall be 

14 construed to alter or revise any requirement (other than 

15 a threshold amount) for notice to Congress on transfers 

16 covered by subsection (a) or reprogrammings covered by 

17 subsection (b) under any other provision of law. 

18 (d) DEFINITIONS.—In this section, the terms ‘‘pro19 gram base amount’’, ‘‘procurement program’’, ‘‘research 

20 program’’, and ‘‘budget activity’’ have the meanings given 

21 such terms in chapter 6 of volume 3 of the Financial Man22 agement Regulation of the Department of Defense (DoD 

23 7000.14R), dated March 2011, or any successor docu24 ment. 


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1 SEC. 5. FAILURE TO OBTAIN AUDITS WITH UNQUALIFIED 

2 OPINION OF FISCAL YEAR 2015 GENERAL 

3 FUND STATEMENT OF BUDGETARY RE4 SOURCES OF THE DEPARTMENT OF DE5 FENSE. 

6 (a) IN GENERAL.—If the Department of Defense 

7 fails to obtain an audit with an unqualified opinion on its 

8 general fund statement of budgetary resources for fiscal 

9 year 2015 by December 31, 2015, the following shall take 

10 effect on January 1, 2016: 

11 (1) ADDITIONAL QUALIFICATIONS AND DUTIES

12 OF USD (COMPTROLLER).— 

13 (A) QUALIFICATIONS.—Any individual 

14 nominated for appointment to the position of 

15 Under Secretary of Defense (Comptroller) 

16 under section 135 of title 10, United States 

17 Code, shall be an individual who has served— 

18 (i) as the chief financial officer or 

19 equivalent position of a Federal or State 

20 agency that has received an audit with an 

21 unqualified opinion on such agency’s finan22 cial statements during the time of such in23 dividual’s service; or 

24 (ii) as the chief financial officer or 

25 equivalent position of a public company 

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1 fied opinion on such company’s financial 

2 statements during the time of such individ3 ual’s service. 

4 (B) DUTIES AND POWERS.—The duties 

5 and powers of the individual serving as Under 

6 Secretary of Defense (Comptroller) shall in7 clude, in addition to the duties and powers 

8 specified in section 135(c) of title 10, United 

9 States Code, such duties and powers with re10 spect to the financial management of the De11 partment of Defense as the Deputy Secretary of 

12 Defense (acting in the capacity of Chief Man13 agement Officer of the Department of Defense) 

14 or a successor official in the Department of De15 fense (acting in such capacity) may prescribe. 

16 (2) ADDITIONAL QUALIFICATIONS AND RESPON17 SIBILITIES OF ASA FOR FINANCIAL MANAGEMENT.— 

18 (A) QUALIFICATIONS.—Any individual 

19 nominated for appointment to the position of 

20 Assistant Secretary of the Army for Financial 

21 Management under section 3016 of title 10, 

22 United States Code, shall be an individual who 

23 has served— 

24 (i) as the chief financial officer or 

25 equivalent position of a Federal or State 


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1 agency that has received an audit with an 

2 unqualified opinion on such agency’s finan3 cial statements during the time of such in4 dividual’s service; or 

5 (ii) as the chief financial officer or 

6 equivalent position of a public company 

7 that has received an audit with an unquali8 fied opinion on such company’s financial 

9 statements during the time of such individ10 ual’s service. 

11 (B) RESPONSIBILITIES.—The responsibil12 ities of the individual serving as Assistant Sec13 retary of the Army for Financial Management 

14 shall include, in addition to the responsibilities 

15 specified in section 3016(b)(4) of title 10, 

16 United States Code, such responsibilities as the 

17 Deputy Secretary of Defense (acting in the ca18 pacity of Chief Management Officer of the De19 partment of Defense) or a successor official in 

20 the Department of Defense (acting in such ca21 pacity) may prescribe. 

22 (3) ADDITIONAL QUALIFICATIONS AND RESPON23 SIBILITIES OF ASN FOR FINANCIAL MANAGEMENT.— 

24 (A) QUALIFICATIONS.—Any individual 

25 nominated for appointment to the position of 


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1 Assistant Secretary of the Navy for Financial 

2 Management under section 5016 of title 10, 

3 United States Code, shall be an individual who 

4 has served— 

5 (i) as the chief financial officer or 

6 equivalent position of a Federal or State 

7 agency that has received an audit with an 

8 unqualified opinion on such agency’s finan9 cial statements during the time of such in10 dividual’s service; or 

11 (ii) as the chief financial officer or 

12 equivalent position of a public company 

13 that has received an audit with an unquali14 fied opinion on such company’s financial 

15 statements during the time of such individ16 ual’s service. 

17 (B) RESPONSIBILITIES.—The responsibil18 ities of the individual serving as Assistant Sec19 retary of the Navy for Financial Management 

20 shall include, in addition to the responsibilities 

21 specified in section 5016(b)(4) of title 10, 

22 United States Code, such responsibilities as the 

23 Deputy Secretary of Defense (acting in the ca24 pacity of Chief Management Officer of the De25 partment of Defense) or a successor official in 


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1 the Department of Defense (acting in such ca2 pacity) may prescribe. 

3 (4) ADDITIONAL QUALIFICATIONS AND RESPON4 SIBILITIES OF ASAF FOR FINANCIAL MANAGE5 MENT.— 

6 (A) QUALIFICATIONS.—Any individual 

7 nominated for appointment to the position of 

8 Assistant Secretary of the Air Force for Finan9 cial Management under section 8016 of title 10, 

10 United States Code, shall be an individual who 

11 has served— 

12 (i) as the chief financial officer or 

13 equivalent position of a Federal or State 

14 agency that has received an audit with an 

15 unqualified opinion on such agency’s finan16 cial statements during the time of such in17 dividual’s service; or 

18 (ii) as the chief financial officer or 

19 equivalent position of a public company 

20 that has received an audit with an unquali21 fied opinion on such company’s financial 

22 statements during the time of such individ23 ual’s service. 

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1 retary of the Air Force for Financial Manage2 ment shall include, in addition to the respon3 sibilities specified in section 8016(b)(4) of title 

4 10, United States Code, such responsibilities as 

5 the Deputy Secretary of Defense (acting in the 

6 capacity of Chief Management Officer of the 

7 Department of Defense) or a successor official 

8 in the Department of Defense (acting in such 

9 capacity) may prescribe. 

10 (b) PUBLIC COMPANY DEFINED.—In this section, the 

11 term ‘‘public company’’ has the meaning given the term 

12 ‘‘issuer’’ in section 2(a)(7) of the Sarbanes-Oxley Act of 

13 2002 (15 U.S.C. 7201(a)(7)). 

14 SEC. 6. FAILURE OF THE DEPARTMENT OF DEFENSE TO OB15 TAIN AUDITS WITH UNQUALIFIED OPINION 

16 OF FISCAL YEAR 2018 FINANCIAL STATE17 MENTS. 

18 If the Department of Defense fails to obtain an audit 

19 with an unqualified opinion on its general fund statement 

20 of budgetary resources for fiscal year 2018 by December 

21 31, 2018: 

22 (1) PERMANENT CESSATION OF ENHANCED

23 GENERAL TRANSFER AUTHORITY.—Effective as of 

24 January 1, 2019, the authority in section 4(a) shall 


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1 cease to be available to the Department of Defense 

2 for fiscal year 2018 and any fiscal year thereafter. 

3 (2) REORGANIZATION OF RESPONSIBILITIES OF

4 CHIEF MANAGEMENT OFFICER.—Effective as of 

5 April 1, 2019: 

6 (A) POSITION OF CHIEF MANAGEMENT OF7 FICER.—Section 132a of title 10, United States 

8 Code, is amended to read as follows: 

9 ‘‘§ 132a. Chief Management Officer 

10 ‘‘(a) IN GENERAL.—(1) There is a Chief Manage11 ment Officer of the Department of Defense, appointed 

12 from civilian life by the President, by and with the advice 

13 and consent of the Senate. 

14 ‘‘(2) Any individual nominated for appointment as 

15 Chief Management Officer shall be an individual who 

16 has— 

17 ‘‘(A) extensive executive level leadership and 

18 management experience in the public or private sec19 tor; 

20 ‘‘(B) strong leadership skills; 

21 ‘‘(C) a demonstrated ability to manage large 

22 and complex organizations; and 

23 ‘‘(D) a proven record in achieving positive oper24 ational results. 


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1 ‘‘(b) POWERS AND DUTIES.—The Chief Management 

2 Officer shall perform such duties and exercise such powers 

3 as the Secretary of Defense may prescribe. 

4 ‘‘(c) SERVICE AS CHIEF MANAGEMENT OFFICER.— 

5 (1) The Chief Management Officer is the Chief Manage6 ment Officer of the Department of Defense. 

7 ‘‘(2) In serving as the Chief Management Officer of 

8 the Department of Defense, the Chief Management Offi9 cer shall be responsible for the management and adminis10 tration of the Department of Defense with respect to the 

11 following: 

12 ‘‘(A) The expenditure of funds, accounting, and 

13 finance. 

14 ‘‘(B) Procurement, including procurement of 

15 any enterprise resource planning (ERP) system and 

16 any information technology (IT) system that is a fi17 nancial feeder system, human resources system, or 

18 logistics system. 

19 ‘‘(C) Facilities, property, nonmilitary equip20 ment, and other resources. 

21 ‘‘(D) Strategic planning, annual performance 

22 planning, and identification and tracking of perform23 ance measures. 


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1 ‘‘(E) Internal audits and management analyses 

2 of the programs and activities of the Department, 

3 including the Defense Contract Audit Agency. 

4 ‘‘(F) Such other areas or matters as the Sec5 retary of Defense may designate. 

6 ‘‘(3) The head of the Defense Contract Audit Agency 

7 shall be under the supervision of, and shall report directly 

8 to, the Chief Management Officer. 

9 ‘‘(d) PRECEDENCE.—The Chief Management Officer 

10 takes precedence in the Department of Defense after the 

11 Secretary of Defense and the Deputy Secretary of De12 fense.’’. 

13 (B) CONFORMING AMENDMENTS.— 

14 (i) Section 131(b) of title 10, United 

15 States Code, is amended— 

16 (I) by striking paragraph (3); 

17 (II) by redesignating paragraph 

18 (2) as paragraph (3); and 

19 (III) by inserting after paragraph 

20 (1) the following new paragraph (2): 

21 ‘‘(2) The Chief Management Officer of the De22 partment of Defense.’’. 

23 (ii) Section 132 of such title is 

24 amended— 


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1 (I) by striking subsection (c); 

2 and 

3 (II) by redesignating subsections 

4 (d) and (e) as subsections (c) and (d), 

5 respectively. 

6 (iii) Section 133(e)(1) of such title is 

7 amended by striking ‘‘and the Deputy Sec8 retary of Defense’’ and inserting ‘‘, the 

9 Deputy Secretary of Defense, and the 

10 Chief Management Officer of the Depart11 ment of Defense’’. 

12 (iv) Such title is further amended by 

13 inserting ‘‘the Chief Management Officer 

14 of the Department of Defense,’’ after ‘‘the 

15 Deputy Secretary of Defense,’’ each place 

16 it appears in the provisions as follows: 

17 (I) Section 133(e)(2). 

18 (II) Section 134(c). 

19 (v) Section 137a(d) of such title is 

20 amended by striking ‘‘the Secretaries of 

21 the military departments,’’ and all that fol22 lows and inserting ‘‘the Chief Management 

23 Officer of the Department of Defense, the 

24 Secretaries of the military departments, 

25 and the Under Secretaries of Defense.’’. 


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1 (vi) Section 138(d) of such title is 

2 amended by striking ‘‘the Secretaries of 

3 the military departments,’’ and all that fol4 lows through the period and inserting ‘‘the 

5 Chief Management Officer of the Depart6 ment of Defense, the Secretaries of the 

7 military departments, the Under Secre8 taries of Defense, and the Director of De9 fense Research and Engineering.’’. 

10 (C) CLERICAL AMENDMENT.—The table of 

11 sections at the beginning of chapter 4 of such 

12 title is amended by striking the item relating to 

13 section 132a and inserting the following new 

14 item: 

‘‘132a. Chief Management Officer.’’. 

15 (D) EXECUTIVE SCHEDULE.—Section 

16 5313 of title 5, United States Code, is amended 

17 by adding at the end the following: 

18 ‘‘Chief Management Officer of the Department 

19 of Defense.’’. 

20 (E) REFERENCE IN LAW.—Any reference 

21 in any provision of law to the Chief Manage22 ment Officer of the Department of Defense 

23 shall be deemed to refer to the Chief Manage24 ment Officer of the Department of Defense 


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1 under section 132a of title 10, United States 

2 Code (as amended by this paragraph). 

3 (3) JURISDICTION OF DFAS.—Effective as of 

4 April 1, 2019: 

5 (A) TRANSFER TO DEPARTMENT OF THE

6 TREASURY.—Jurisdiction of the Defense Fi7 nance and Accounting Service (DFAS) is trans8 ferred from the Department of Defense to the 

9 Department of the Treasury. 

10 (B) ADMINISTRATION.—The Secretary of 

11 the Treasury shall administer the Defense Fi12 nance and Accounting Service following transfer 

13 under this paragraph through the Financial 

14 Management Service of the Department of the 

15 Treasury. 

16 (C) MEMORANDUM OF UNDERSTANDING.— 

17 The Secretary of Defense and the Secretary of 

18 the Treasury shall jointly enter into a memo19 randum of understanding regarding the trans20 fer of jurisdiction of the Defense Finance and 

21 Accounting Service under this paragraph. The 

22 memorandum of understanding shall provide for 

23 the transfer of the personnel and other re24 sources of the Service to the Department of the 

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1 bility for such personnel and resources by the 

2 Department of the Treasury. 

3 (D) CONSTRUCTION.—Nothing in this 

4 paragraph shall be construed as terminating, al5 tering, or revising any responsibilities or au6 thorities of the Defense Finance and Account7 ing Service (other than responsibilities and au8 thorities in connection with the exercise of ju9 risdiction of the Service following transfer 

10 under this paragraph). 

11 SEC. 7. FAILURE OF THE MILITARY DEPARTMENTS TO OB12 TAIN AUDITS WITH UNQUALIFIED OPINION 

13 OF FINANCIAL STATEMENTS FOR FISCAL 

14 YEARS AFTER FISCAL YEAR 2017. 

15 (a) PERMANENT CESSATION OF AUTHORITIES ON

16 REPROGRAMMING OF FUNDS.—If a military department 

17 fails to obtain an audit with an unqualified opinion on its 

18 financial statements for fiscal year 2018 by December 31, 

19 2018, effective as of January 1, 2019, the authorities in 

20 section 4(b) shall cease to be available to the military de21 partment for fiscal year 2018 and any fiscal year there22 after. 

23 (b) ANNUAL PROHIBITION ON EXPENDITURE OF

24 FUNDS FOR CERTAIN MDAPS PAST MILESTONE B IN

25 CONNECTION WITH FAILURE.— 


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1 (1) PROHIBITION.—Effective for fiscal years 

2 after fiscal year 2017, if a military department fails 

3 to obtain an audit with an unqualified opinion on its 

4 financial statements for any fiscal year, effective as 

5 of the date of the issuance of the opinion on such 

6 audit, amounts available to the military department 

7 for the following fiscal year may not be obligated by 

8 the military department for a weapon or weapon sys9 tem or platform being acquired as a major defense 

10 acquisition program for any activity beyond Mile11 stone B approval unless such program has already 

12 achieved Milestone B approval of the date of the 

13 issuance of the opinion on such audit. 

14 (2) DEFINITIONS.—In this subsection: 

15 (A) The term ‘‘major defense acquisition 

16 program’’ has the meaning given that term in 

17 section 2430 of title 10, United States Code. 

18 (B) The term ‘‘Milestone B approval’’ has 

19 the meaning given that term in section 

20 2366(e)(7) of title 10, United States Code. 

21 SEC. 8. ENTERPRISE RESOURCE PLANNING. 

22 The Secretary of Defense shall amend the acquisition 

23 guidance of the Department of Defense to provide for the 

24 following: 


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1 (1) The Defense Business System Management 

2 Committee may not approve procurement of any En3 terprise Resource Planning (ERP) business system 

4 that is independently estimated to take longer than 

5 three years to procure from initial obligation of 

6 funds to full deployment and sustainment. 

7 (2) Any contract for the acquisition of an En8 terprise Resource Planning business system shall in9 clude a provision authorizing termination of the con10 tract at no cost to the Government if procurement 

11 of the system takes longer than three years from ini12 tial obligation of funds to full deployment and 

13 sustainment. 

14 (3) Any implementation of an Enterprise Re15 source Planning system shall comply with each of 

16 the following: 

17 (A) The current Business Enterprise Ar18 chitecture established by the Chief Management 

19 Officer of the Department of Defense. 

20 (B) The provisions of section 2222 of title 

21 10, United States Code. 

22 (4) The Deputy Secretary of Defense (acting in 

23 the capacity of Chief Management Officer of the De24 partment of Defense) or a successor official in the 

25 Department of Defense (acting in such capacity) 


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1 shall have the authority to replace any program 

2 manager (whether in a military department or a De3 fense Agency) for the procurement of an Enterprise 

4 Resource Planning business system if procurement 

5 of the system takes longer than three years from ini6 tial obligation of funds to full deployment and 

7 sustainment. 

8 (5) Any integrator contract for the implementa9 tion of an Enterprise Resource Planning business 

10 system shall only be awarded to companies that have 

11 a history of successful implementation of other En12 terprise Resource Planning business systems for the 

13 Federal Government (whether with the Department 

14 of Defense or another department or agency of the 

15 Federal Government), including meeting cost and 

16 schedule goals. 

Æ 


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