II

104TH CONGRESS

1ST SESSION S. 646

To amend title 10, United States Code, to modernize Department of Defense

acquisition procedures, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 29 (legislative day, MARCH 27), 1995

Mr. ROTH (for himself, Mr. GRASSLEY, and Mr. COHEN) introduced the following bill; which was read twice and referred to the Committee on

Armed Services

A BILL

To amend title 10, United States Code, to modernize Department of Defense acquisition procedures, 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 ‘‘Department of Defense

5 Acquisition Management Reform Act of 1995’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I—PERFORMANCE BASED ACQUISITION PROCESS
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Subtitle A—Performance Goals

Sec. 101. Strengthened reporting requirement.

Sec. 102. Termination of major defense acquisition programs not meeting

goals.

Sec. 103. Enhanced performance incentives for acquisition workforce.

Subtitle B—Results-Oriented Acquisition Process

Sec. 111. Revision of regulations relating to acquisition of major systems and

information technology systems.

Sec. 112. Results oriented acquisition program cycle.

Sec. 113. Operational test and evaluation requirements in relation to low-rate

production.

Sec. 114. Acquisition of information technology.

Subtitle C—Rapid Contracting

Sec. 121. Goal.

Sec. 122. Authority to limit number of offerors.

Sec. 123. Preference for certified contractors.

Sec. 124. Consideration of past performance and eligibility certification.

Sec. 125. Encouragement of multiyear contracting.

Sec. 126. Encouragement of use of leasing authority.

Subtitle D—Performance Based Contract Management

Sec. 131. Unallowable costs.

Sec. 132. Alternatives approaches to contract management.

Sec. 133. Contractor share of gains and losses from cost, schedule, and performance experience.

Subtitle E—Financial Management

Sec. 141. Phase funding of defense acquisition programs.

Sec. 142. Maximized benefit funding.

Sec. 143. Improved Department of Defense contract payment procedures.

Subtitle F—Defense Acquisition Workforce

Sec. 151. Consideration of past performance in assignment to acquisition positions.

Sec. 152. Termination of defense acquisition schools.

Subtitle G—Revision of Procurement Integrity Requirements

Sec. 161. Amendments to Office of Federal Procurement Policy Act.

Sec. 162. Amendments to title 18, United States Code.

Sec. 163. Repeal of superseded and obsolete laws.

Sec. 164. Implementation.

Subtitle H—Clerical Amendments

Sec. 171. Clerical amendments to title 10.

Sec. 172. Other laws.

TITLE II—REORGANIZATION AND REFORM OF THE

DEFENSE ACQUISITION SYSTEM
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Subtitle A—Streamlining and Improvement of Acquisition

Management

Sec. 201. Reorganization of acquisition authority.

Sec. 202. Joint foreign products development.

Subtitle B—Transfer of Functions

Sec. 211. Transfers.

Sec. 212. Savings provisions.

Subtitle C—Conforming Amendments

Sec. 221. Modification of the responsibility of the Under Secretary of Defense

(Comptroller) for defense acquisition budgets.

Sec. 222. The defense acquisition work force.

Sec. 223. Procurement procedures generally.

Sec. 224. Research and development.

Sec. 225. Miscellaneous procurement provisions.

Sec. 226. Major defense acquisition programs.

Sec. 227. Service specific acquisition authority.

Sec. 228. Other laws.

Subtitle D—Effective Date

Sec. 241. Effective date.

TITLE III—DEPOT-LEVEL MAINTENANCE

Sec. 301. Elimination of 60 / 40 rule for public / private division of depot-level

maintenance workload.

Sec. 302. Preservation of core maintenance and repair capability.

Sec. 303. Performance of depot-level maintenance workload by private sector

whenever possible.

1 TITLE I—PERFORMANCE BASED

2 ACQUISITION PROCESS

3 Subtitle A—Performance Goals

4 SEC. 101. STRENGTHENED REPORTING REQUIREMENT.

5 Section 2220(b) of title 10, United States Code, is

6 amended in the first sentence by striking out ‘‘an assess7 ment of whether major and nonmajor acquisition pro8 grams of the Department of Defense are achieving’’ and

9 inserting in lieu thereof ‘‘an assessment, for each Depart10 ment of Defense appropriation account, of whether the
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1 major and nonmajor acquisition programs funded from

2 such account are achieving’’.

3 SEC. 102. TERMINATION OF MAJOR DEFENSE ACQUISITION

4 PROGRAMS NOT MEETING GOALS.

5 Section 2220 of title 10, United States Code, is amend6 ed by adding at the end the following:

7 ‘‘(d) TERMINATION OF PROGRAMS SIGNIFICANTLY

8 UNDER GOALS.—The Secretary of Defense shall termi9 nate any major defense acquisition program that—

10 ‘‘(1) is more than 50 percent over the cost goal

11 established for a phase of the program;

12 ‘‘(2) fails to achieve at least 50 percent of the

13 performance capability goals established for a phase

14 of the program; or

15 ‘‘(3) is more than 50 percent behind schedule,

16 as determined in accordance with the schedule goal

17 established for a phase of the program.’’.

18 SEC. 103. ENHANCED PERFORMANCE INCENTIVES FOR AC19 QUISITION WORKFORCE.

20 (a) CLARIFICATION OF REQUIREMENTS FOR SYSTEM

21 OF INCENTIVES.—Subsection (b) of section 5001 of the

22 Federal Acquisition Streamlining Act of 1994 (Public Law

23 103–355; 108 Stat. 3350; 10 U.S.C. 2220 note) is

24 amended—
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1 (1) by redesignating paragraphs (1) and (2) as

2 subparagraphs (A) and (B), respectively;

3 (2) by designating the second sentence as para4 graph (2); and

5 (3) by inserting ‘‘(1)’’ after ‘‘(b) ENHANCED

6 SYSTEM OF PERFORMANCE INCENTIVES.—’’; and

7 (4) by adding at the end the following:

8 ‘‘(3) The Secretary shall include in the enhanced sys9 tem of incentives the following:

10 ‘‘(A) Pay bands.

11 ‘‘(B) Significant and material pay and pro12 motion incentives to be awarded, and significant and

13 material unfavorable personnel actions to be im14 posed, under the system exclusively, or primarily, on

15 the basis of the contributions of personnel to the

16 performance of the acquisition program in relation

17 to cost goals, performance goals, and schedule goals.

18 ‘‘(C) Provisions for pay incentives and pro19 motion incentives to be awarded under the system

20 only if—

21 ‘‘(i) the cost of the acquisition program is

22 less than 90 percent of the baseline parameter

23 established for the cost of the program under

24 section 2435 of title 10, United States Code;
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1 ‘‘(ii) the period for completion of the pro2 gram is less than 90 percent of the period pro3 vided under the baseline parameter established

4 for the program schedule under such section;

5 and

6 ‘‘(iii) the results of the phase of the pro7 gram being executed exceed the performance

8 parameter established for the system under

9 such section by more than 10 percent.

10 ‘‘(D) Provisions for unfavorable personnel ac11 tions to be taken under the system only if the acqui12 sition program performance for the phase being exe13 cuted exceeds by more than 10 percent the cost and

14 schedule parameters established for the program

15 phase under section 2435 of title 10, United States

16 Code, and the performance of the system acquired or

17 to be acquired under the program fails to achieve at

18 lease 90 percent of the baseline parameters estab19 lished for performance of the program under such

20 section.’’.

21 (b) RECOMMENDED LEGISLATION.—Subsection (c)

22 of such section is amended by adding at the end the follow23 ing: ‘‘The Secretary shall include in the recommendations

24 provisions necessary to implement the requirements of

25 subsection (b)(3).’’.
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1 (c) IMPLEMENTATION OF INCENTIVES SYSTEM.—

2 Section 5001 of the Federal Acquisition Streamlining Act

3 of 1994 is further amended by adding at the end the fol4 lowing:

5 ‘‘(d) IMPLEMENTATION OF INCENTIVES SYSTEM.—

6 (1) The Secretary shall complete the review required by

7 subsection (b) and take such actions as are necessary to

8 provide an enhanced system of incentives in accordance

9 with such subsection not later than October 1, 1997.

10 ‘‘(2) Not later than October 1, 1996, the Secretary

11 shall submit to the Committee on Armed Services of the

12 Senate and the Committee on National Security of the

13 House of Representatives a report on the actions taken

14 to satisfy the requirements of paragraph (1).’’.

15 Subtitle B—Results-Oriented

16 Acquisition Process

17 SEC. 111. REVISION OF REGULATIONS RELATING TO ACQUI18 SITION OF MAJOR SYSTEMS AND INFORMA19 TION TECHNOLOGY SYSTEMS.

20 Not later than October 1, 1996, the Secretary of De21 fense shall revise the regulations of the Department of De22 fense relating to the acquisition of major systems and of

23 information technology systems to ensure that, in the ac24 quisition of those systems, program managers focus on

25 achieving results rather than on preparing and transmit-
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1 ting reports and building consensus among interested per2 sons.

3 SEC. 112. RESULTS ORIENTED ACQUISITION PROGRAM

4 CYCLE.

5 (a) CYCLE DEFINED.—Chapter 131 of title 10,

6 United States Code, is amended by adding at the end the

7 following:

8 ‘‘§ 2221. Results oriented acquisition program cycle

9 ‘‘(a) PROGRAM PHASES.—The Secretary of Defense

10 shall define in regulations a simplified acquisition program

11 cycle that is results-oriented and consists of the following

12 phases:

13 ‘‘(1) The integrated decision team meeting

14 which—

15 ‘‘(A) may be requested by a potential user

16 of the system or component to be acquired, the

17 head of a laboratory, or a program office on

18 such bases as the emergence of a new military

19 requirement, cost savings opportunity, or new

20 technology opportunity;

21 ‘‘(B) shall be conducted by the program

22 executive officer;

23 ‘‘(C) shall include representatives of com24 manders of unified and specified combatant
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1 commands, all armed forces (other than the

2 Coast Guard), laboratories, and industry;

3 ‘‘(D) shall result in the team recommend4 ing to the potential user a range of solutions for

5 meeting user requirements or for evaluating op6 portunities; and

7 ‘‘(E) shall be completed within one to three

8 months.

9 ‘‘(2) The prototype development and testing

10 phase which—

11 ‘‘(A) shall include operational tests and

12 concerns relating to manufacturing operations

13 and life cycle support;

14 ‘‘(B) shall be completed within 6 to 36

15 months; and

16 ‘‘(C) shall produce sufficient numbers of

17 prototypes to assess operational utility.

18 ‘‘(3) Product integration, development, and

19 testing which—

20 ‘‘(A) shall include full-scale development,

21 operational testing, and integration of compo22 nents; and

23 ‘‘(B) shall be completed within one to five

24 years.
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1 ‘‘(4) Production, integration into existing sys2 tems, or production and integration into existing

3 systems.

4 ‘‘(b) RELATIONSHIP BETWEEN EXTENT OF TECH5 NICAL RISK AND COMPLETION OF PHASES.—(1) The time

6 constraints set forth in subsections (a)(1)(E), (a)(2)(B),

7 and (a)(3)(B) establish maximum limits for completion of

8 the acquisition program cycle and for each phase of the

9 program cycle. The regulations prescribed for the acquisi10 tion program cycle shall provide for reducing the maxi11 mum time limits for an acquisition program in relation

12 to the degree of the technical difficulty that is involved

13 in the execution of the various recommendations developed

14 for the program in the integrated decision team phase

15 under subsection (a)(1)(D).

16 ‘‘(2) The regulations shall provide three alternatives

17 for maximum time limits that are to apply to completion

18 of the acquisition program cycle for a program and for

19 each phase of the program cycle, as follows:

20 ‘‘(A) In the case of an acquisition that involves

21 complex technical risks and integration issues, com22 pletion within the maximum time limits set forth in

23 subsection (a).

24 ‘‘(B) In the case of an acquisition of a compo25 nent primarily using existing technology or of a
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1 modification of a component or system primarily

2 using existing technology, accelerated completion.

3 ‘‘(C) In the case of an acquisition of a commer4 cial item or a nondevelopmental item, relatively

5 rapid completion.

6 ‘‘(c) SINGLE MAJOR DECISION POINT.—(1) The ac7 quisition program approval process within the Department

8 of Defense shall have one major decision point which shall

9 occur for an acquisition program before that program pro10 ceeds into product integration, development, and testing.

11 ‘‘(2) At the major decision point for an acquisition

12 program, the Under Secretary of Defense for Acquisition,

13 in consultation with the Vice Chairman of the Joint Chiefs

14 of Staff, shall—

15 ‘‘(A) review the program;

16 ‘‘(B) determine whether the program should

17 continue to be carried out beyond product integra18 tion and development; and

19 ‘‘(C) decide whether—

20 ‘‘(i) to direct the program manager to re21 quest an integrated decision team meeting;

22 ‘‘(ii) to proceed into product integration or

23 development; or

24 ‘‘(iii) to terminate the program.
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1 ‘‘(3) In the review of an acquisition program, the

2 Under Secretary shall consider the potential benefits,

3 independent cost estimates, affordability, needs, and risks

4 of the program.

5 ‘‘(d) USER INVOLVEMENT IN INTEGRATION MAT6 TERS.—The regulations under subsection (a) shall ensure

7 that the potential users (within the military departments)

8 of an item being acquired under the program cycle set

9 forth in subsection (a) are afforded an opportunity to par10 ticipate meaningfully in the acquisition decisions concern11 ing such item during the phases described in paragraphs

12 (3) and (4) of that subsection.’’.

13 (b) CONFORMING AMENDMENTS.—

14 (1) COORDINATION AND COMMUNICATION OF

15 DEFENSE RESEARCH ACTIVITIES.—Section 2364 of

16 title 10, United States Code, is amended—

17 (A) in subsection (b)(5), by striking out

18 ‘‘making milestone 0, milestone I, and mile19 stone II decision’’ and inserting in lieu thereof

20 ‘‘the integrated decision team meeting, the

21 making of the decision at the single major deci22 sion point under subsection (c) of section 2221

23 of this title, and, as appropriate, the making of

24 other acquisition program decisions during the
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1 acquisition program cycle described in section

2 2221 of this title’’; and

3 (B) by striking out subsection (c).

4 (2) SURVIVABILITY AND LETHALITY TEST5 ING.—Section 2366(c) of such title is amended by

6 striking out ‘‘engineering and manufacturing devel7 opment’’ in paragraph (1) and in the second sen8 tence of paragraph (2) and inserting in lieu thereof

9 ‘‘product integration, development, and testing’’.

10 (3) LOW-RATE INITIAL PRODUCTION OF NEW

11 SYSTEMS.—Section 2400(a)(2) of such title is

12 amended by striking out ‘‘engineering and manufac13 turing development’’ and inserting in lieu thereof

14 ‘‘product integration, development, and testing’’.

15 (4) SELECTED ACQUISITION REPORTS.—Section

16 2432 of such title is amended—

17 (A) in subsection (b)(3)(A)(i), by striking

18 out ‘‘engineering and manufacturing develop19 ment’’ and inserting in lieu thereof ‘‘product in20 tegration, development, and testing’’;

21 (B) in subsection (c)(3)(A), by striking out

22 ‘‘engineering and manufacturing development

23 phase or has completed that stage’’ and insert24 ing in lieu thereof ‘‘product integration, devel-
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1 opment, and testing phase or has completed

2 that phase’’;

3 (C) in subsection (h)(1)—

4 (i) in the first sentence, by striking

5 out ‘‘engineering and manufacturing devel6 opment’’ and inserting in lieu thereof ‘‘pro7 totype development and testing’’; and

8 (ii) in the second sentence, by striking

9 out ‘‘engineering and manufacturing devel10 opment’’ and inserting in lieu thereof

11 ‘‘product integration, development, and

12 testing’’.

13 (5) MAJOR DEFENSE ACQUISITION PRO14 GRAMS.—

15 (A) INDEPENDENT COST ESTIMATES.—

16 Section 2434(a) of such title is amended by

17 striking out ‘‘engineering and manufacturing

18 development, or the production and deploy19 ment,’’ and inserting in lieu thereof ‘‘product

20 integration, development, and testing’’.

21 (B) BASELINE DESCRIPTION.—Section

22 2435 of such title is amended—

23 (i) in subsection (b), by striking out

24 ‘‘engineering and manufacturing develop-
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1 ment’’ and inserting in lieu thereof ‘‘proto2 type development and testing’’; and

3 (ii) by striking out subsection (c) and

4 inserting in lieu thereof the following:

5 ‘‘(c) SCHEDULE.—A baseline description for a major

6 defense acquisition program shall be prepared under this

7 section—

8 ‘‘(1) before the program enters prototype devel9 opment and testing;

10 ‘‘(2) before the program enters product integra11 tion and development; and

12 ‘‘(3) before the program enters production, in13 tegration into existing systems, or production and

14 integration into existing systems.’’.

15 SEC. 113. OPERATIONAL TEST AND EVALUATION REQUIRE16 MENTS IN RELATION TO LOW-RATE PRODUC17 TION.

18 (a) REQUIREMENTS.—Section 2399 of title 10,

19 United States Code, is amended to read as follows:

20 ‘‘§ 2399. Operational test and evaluation of major sys21 tems

22 ‘‘(a) CONDITION FOR PROCEEDING INTO LOW-RATE

23 INITIAL PRODUCTION.—(1) The Secretary of Defense

24 may not issue a notice to proceed with production of a

25 major system until—
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1 ‘‘(A) at least one phase of initial operational

2 test and evaluation has been completed, during the

3 prototype development and testing phase and again

4 during the product integration, development, and

5 testing phase, in order to demonstrate that the sys6 tem—

7 ‘‘(i) meets the minimum performance re8 quirements established for the system;

9 ‘‘(ii) is suitable for the purposes for which

10 the system is to be acquired; and

11 ‘‘(iii) does not require significant design

12 changes or other significant modifications in

13 order to demonstrate required operational capa14 bilities; and

15 ‘‘(B) the Director of Operational Test and

16 Evaluation has certified to the Secretary and to the

17 congressional defense committees that—

18 ‘‘(i) the test and evaluation performed on

19 the system were adequate; and

20 ‘‘(ii) the conditions set forth in clauses (i),

21 (ii), and (iii) of subparagraph (A) were satis22 fied.

23 ‘‘(2) The Secretary may waive the requirements of

24 paragraph (1)(B) in the case of a major system if the Sec25 retary—
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1 ‘‘(A) determines and certifies to the congres2 sional defense committees that the waiver is vital to

3 national security interests; or

4 ‘‘(B) certifies to the congressional defense com5 mittees that the Secretary has information that

6 demonstrates that the conditions set forth in clauses

7 (i), (ii), and (iii) of paragraph (1)(A) can be satis8 fied without increasing—

9 ‘‘(i) the production unit cost of the system

10 by more than 10 percent over the production

11 unit cost estimated at the time of the waiver;

12 and

13 ‘‘(ii) the production period for the system

14 by more than 10 percent over the production

15 period estimated at the time of the waiver.

16 ‘‘(3) Paragraph (1) does not apply to acquisition of

17 a naval vessel or a satellite.

18 ‘‘(b) CONDITION FOR PROCEEDING BEYOND LOW19 RATE INITIAL PRODUCTION.—The Secretary of Defense

20 shall provide that a program for the acquisition of a major

21 system may not proceed beyond low-rate initial production

22 until initial operational test and evaluation of the program

23 is completed.

24 ‘‘(c) OPERATIONAL TEST AND EVALUATION.—(1)

25 Operational testing of a major system may not be con-
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1 ducted until the Director of Operational Test and Evalua2 tion of the Department of Defense—

3 ‘‘(A) approves (in writing) the adequacy of the

4 plans for operational test and evaluation of the sys5 tem, including the adequacy of the plans with regard

6 to—

7 ‘‘(i) the projected level of funding; and

8 ‘‘(ii) demonstration of the matters set

9 forth in clauses (i), (ii), and (iii) of subsection

10 (a)(1)(A); and

11 ‘‘(B) determines the quantity of articles of the

12 system that are needed for operational testing.

13 ‘‘(2) The Director shall analyze the results of the

14 operational test and evaluation of each major system. At

15 the conclusion of such testing, the Director shall deter16 mine whether—

17 ‘‘(A) the test and evaluation performed were

18 adequate; and

19 ‘‘(B) the results of such test and evaluation

20 confirm that the items or components actually tested

21 are effective and suitable for combat.

22 ‘‘(3) A final decision within the Department of De23 fense to proceed with a program for the acquisition of a

24 major system beyond low-rate initial production may not

25 be made until the Director submits to the Secretary of
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1 Defense and the congressional defense committees a writ2 ten opinion on the matters.

3 ‘‘(d) NON-MAJOR SYSTEMS.—Operational testing of

4 a new system other than a major system may not be con5 ducted until the head of the operational test and evalua6 tion agency of the military department concerned deter7 mines the quantity of articles of the system that are to

8 be procured for operational testing.

9 ‘‘(e) IMPARTIALITY OF CONTRACTOR TESTING PER10 SONNEL.—No person employed by the contractor under

11 a program for the acquisition of a major system may be

12 involved in the conduct of the operational test and evalua13 tion necessary for the program to proceed beyond low-rate

14 production in accordance with subsection (b). The limita15 tion in the preceding sentence does not apply to the extent

16 that the Secretary of Defense plans for persons employed

17 by that contractor to be involved in the operation, mainte18 nance, and support of the system when the system is de19 ployed in combat.

20 ‘‘(f) IMPARTIAL CONTRACTED ADVISORY AND AS21 SISTANCE SERVICES.—(1) The Director may not contract

22 with any person for advisory and assistance services with

23 regard to the test and evaluation of a major system if that

24 person participated in (or is participating in) the develop25 ment, production, or testing of such system for a military
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1 department or Defense Agency (or for another contractor

2 of the Department of Defense).

3 ‘‘(2) The Director may waive the limitation under

4 paragraph (1) in any case if the Director determines in

5 writing that sufficient steps have been taken to ensure the

6 impartiality of the contractor in providing the services.

7 The Inspector General of the Department of Defense shall

8 review each such waiver and shall include in the Inspector

9 General’s semi-annual report an assessment of those waiv10 ers made since the last such report.

11 ‘‘(3)(A) A contractor that has participated in (or is

12 participating in) the development, production, or testing

13 of a system for the Department of Defense or for another

14 contractor of the Department of Defense may not be in15 volved in any way in the establishment of criteria for data

16 collection, performance assessment, or evaluation activities

17 for the operational test and evaluation of that system.

18 ‘‘(B) The limitation in subparagraph (A) does not

19 apply to a contractor that has participated solely in testing

20 for the Federal Government.

21 ‘‘(g) SOURCE OF FUNDS FOR TESTING.—The costs

22 for all tests required under subsection (b) shall be paid

23 from funds available for the system being tested.

24 ‘‘(h) DIRECTOR’S ANNUAL REPORT.—As part of the

25 annual report of the Director under section 139 of this
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1 title, the Director shall describe for each program covered

2 in the report the status of test and evaluation activities

3 in comparison with the test and evaluation master plan

4 for that program, as approved by the Director. The Direc5 tor shall include in such annual report a description of

6 each waiver granted under subsection (f)(2) since the last

7 such report.

8 ‘‘(i) DEFINITIONS.—In this section:

9 ‘‘(1) The term ‘major system’ has the meaning

10 given that term in section 2302(5) of this title.

11 ‘‘(2) The term ‘operational test and evaluation’

12 has the meaning given that term in section

13 139(a)(2)(A) of this title. For purposes of subsection

14 (a), that term does not include an operational as15 sessment based exclusively on—

16 ‘‘(A) computer modeling;

17 ‘‘(B) simulation; or

18 ‘‘(C) an analysis of system requirements,

19 engineering proposals, design specifications, or

20 any other information contained in program

21 documents.

22 ‘‘(3) The term ‘congressional defense commit23 tees’ means—
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1 ‘‘(A) the Committee on Armed Services

2 and the Committee on Appropriations of the

3 Senate; and

4 ‘‘(B) the Committee on National Security

5 and the Committee on Appropriations of the

6 House of Representatives.’’.

7 (b) QUANTITIES PROCURED FOR LOW-RATE INITIAL

8 PRODUCTION.—(1) Subsection (a) of section 2400 of such

9 title is amended—

10 (A) by striking out paragraph (3);

11 (B) by redesignating paragraphs (4) and (5) as

12 paragraphs (3) and (4), respectively;

13 (C) by striking out the second sentence of para14 graph (4), as so redesignated; and

15 (D) by adding at the end the following new

16 paragraph:

17 ‘‘(5)(A) Except as provided in subparagraph (B), the

18 quantity determined for a system under paragraph (1)

19 may not exceed the quantity equal to 10 percent of the

20 total quantity of articles of the system that is to be ac21 quired under the program for the acquisition of such sys22 tem, determined as of the date on which funds appro23 priated for procurement are first obligated for the pro24 gram.
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1 ‘‘(B) The quantity of articles determined for a system

2 under paragraph (1) may exceed the maximum quantity

3 provided under subparagraph (A)—

4 ‘‘(i) during a war declared by Congress or a na5 tional emergency declared by Congress or the Presi6 dent; or

7 ‘‘(ii) if the Secretary of Defense certifies to the

8 congressional defense committees referred to in sec9 tion 2399(i)(3) of this title that it is necessary to do

10 so in order to provide for completion of initial oper11 ational test and evaluation of the system and that it

12 is impracticable to limit the quantity of the articles

13 procured to such maximum quantity.

14 ‘‘(6) The additional quantity of articles that may be

15 determined for a system pursuant to the exception in

16 paragraph (5)(B)(ii) may not exceed the quantity equal

17 to 5 percent of the total quantity of articles of the system

18 that are to be acquired under the program, determined

19 as of the date referred to in paragraph (5)(A).’’.

20 (2) Subsection (b) of such section is amended to read

21 as follows:

22 ‘‘(b) LOW-RATE INITIAL PRODUCTION OF WEAPON

23 SYSTEMS.—Except as provided in subsection (c), low-rate

24 initial production with respect to a new system is produc25 tion of the system in the minimum quantity necessary—
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1 ‘‘(1) to establish an initial production base with

2 the capacity to provide production-configured or rep3 resentative articles for operational tests pursuant to

4 section 2399 of this title; and

5 ‘‘(2) to maintain such production base until ini6 tial operational test and evaluation of the system is

7 completed and a decision is made regarding whether

8 to proceed into full-rate production.’’.

9 (c) DUTIES AND AUTHORITY OF DIRECTOR OF OPER10 ATIONAL TEST AND EVALUATION.—Section 139(c) of title

11 10, United States Code, is amended by striking out the

12 first sentence and inserting in lieu thereof the following:

13 ‘‘The Director reports directly, without intervening review

14 or approval, to the Secretary of Defense personally.’’.

15 (d) EFFECTIVE DATE AND SAVINGS PROVISION.—(1)

16 The amendments made by this section shall take effect

17 on the date of the enactment of this Act.

18 (2) The amendments made by subsections (a), (b),

19 and (c) shall apply with respect to programs for the acqui20 sition of systems that, as of the date of the enactment

21 of this Act, are scheduled to enter low-rate initial produc22 tion on or after October 1, 1996.

23 (3) The provisions of sections 2399 and 2400 of title

24 10, United States Code, as in effect on the day before

25 the date of the enactment of this Act, shall continue to
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1 apply after that date to programs for the acquisition of

2 major systems that enter or, as of the date of the enact3 ment of this Act, are scheduled to enter low-rate initial

4 production before October 1, 1996.

5 SEC. 114. ACQUISITION OF INFORMATION TECHNOLOGY.

6 The Secretary of Defense shall revise the existing De7 partment of Defense directives regarding development and

8 procurement of information systems (numbered in the

9 8000 series) and the Department of Defense directives

10 numbered in the 5000 series in order to consolidate those

11 directives into one series of directives that is consistent

12 with the simplified acquisition program cycle provided for

13 in section 2221 of title 10, United States Code, as added

14 by section 112.

15 Subtitle C—Rapid Contracting

16 SEC. 121. GOAL.

17 (a) ESTABLISHMENT.—The Secretary of Defense

18 shall establish a goal of reducing by 50 percent the time

19 necessary for the Department of Defense to acquire an

20 item for the user of that item.

21 (b) ACTION.—The Secretary shall take such action

22 as is necessary to ensure that the Department of Defense

23 achieves the goal established under subsection (a), includ24 ing actions necessary to facilitate—
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1 (1) the definition of the requirements for an ac2 quisition; and

3 (2) the selection of sources from among the

4 offerors.

5 SEC. 122. AUTHORITY TO LIMIT NUMBER OF OFFERORS.

6 Section 2305(b) of title 10, United States Code, is

7 amended by adding at the end the following:

8 ‘‘(5) Under regulations prescribed by the head of an

9 agency, a contracting officer of the agency receiving more

10 than three competitive proposals for a proposed contract

11 may solicit best and final offers from three of the offerors

12 who submitted offers within the competitive range. Not13 withstanding paragraph (4)(A)(i), the contracting officer

14 need not first conduct discussions with all of the respon15 sible parties that submit offers within the competitive

16 range.’’.

17 SEC. 123. PREFERENCE FOR CERTIFIED CONTRACTORS.

18 Chapter 137 of title 10, United States Code is

19 amended by inserting after section 2319 the following new

20 section:

21 ‘‘§ 2319a. Contractor performance certification sys22 tem

23 ‘‘(a) CERTIFICATION AUTHORIZED.—The Secretary

24 of Defense may establish a contractor certification system

25 for the procurement of particular property or services that
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1 are procured by the Department of Defense on a repetitive

2 basis. Under the system, the Secretary shall use competi3 tive procedures to certify contractors as eligible for con4 tracts to furnish such property or services. The Secretary

5 shall award certifications on the basis of the relative effi6 ciency and effectiveness of the business practices, level of

7 quality, and demonstrated contract performance of the re8 sponding contractors with regard to the particular prop9 erty or services.

10 ‘‘(b) PROCUREMENT FROM CERTIFIED CONTRAC11 TORS.—The head of an agency within the Department of

12 Defense may enter into a contract for a procurement of

13 property or services referred to in subsection (a) on the

14 basis of a competition among contractors certified with re15 spect to such property or services pursuant to that sub16 section.

17 ‘‘(c) TERMINATION OF CERTIFICATION.—The Sec18 retary—

19 ‘‘(1) may provide for the termination of a cer20 tification awarded a contractor under this section

21 upon the expiration of a period specified by the Sec22 retary; and

23 ‘‘(2) may revoke a certification awarded a con24 tractor under this section upon a determination that

25 the quality of performance of the contractor does not
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1 meet standards applied by the Secretary as of the

2 time of the revocation decision.’’.

3 SEC. 124. CONSIDERATION OF PAST PERFORMANCE AND

4 ELIGIBILITY CERTIFICATION.

5 Section 2305 of title 10, United States Code, is

6 amended—

7 (1) in subsection (a)(2)(A)(i)—

8 (A) by striking out ‘‘(including price)’’ and

9 inserting in lieu thereof ‘‘(including price, past

10 contract performance of the offeror, and any

11 certification of the offeror under section 2319a

12 of this title)’’; and

13 (B) by striking out ‘‘and noncost-related’’

14 and inserting in lieu thereof the following: ‘‘past

15 contract performance of the offeror, any certifi16 cation of the offeror under section 2319a of this

17 title, and other noncost-related’’;

18 (2) in subsection (b)—

19 (A) in paragraph (3), by striking out ‘‘and

20 the other price-related factors included in the

21 solicitation’’ in the second sentence and insert22 ing in lieu thereof ‘‘, the other price-related fac23 tors included in the solicitation, the past con24 tract performance (if any) of the offerors, and
29

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1 any certification of offerors under section

2 2319a of this title’’; and

3 (B) in paragraph (4)(B), by striking out

4 ‘‘and the other factors included in the solicita5 tion’’ in the first sentence and inserting in lieu

6 thereof ‘‘, the past contract performance (if

7 any) of the offerors, any certification of offerors

8 under section 2319a of this title, and the other

9 factors included in the solicitation’’;

10 (3) in subsection (c)(1), by inserting ‘‘past per11 formance of the offerors, any certification of offerors

12 under section 2319a of this title,’’ after ‘‘(consider13 ing quality, price, delivery,’’; and

14 (4) by adding at the end the following new sub15 section:

16 ‘‘(g) The Secretary of Defense shall maintain a con17 tractor performance data base. The Secretary shall include

18 in the data base information on the history of the perform19 ance of each contractor under Department of Defense con20 tracts and, for each such contract performed by the con21 tractor, a technical evaluation of the contractor’s perform22 ance prepared by the acquisition program manager re23 sponsible for the contract. The Secretary shall make infor24 mation in the data base available to acquisition program

25 executive officers and acquisition program managers of
30

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1 the Department of Defense and to the contractor to which

2 the information pertains.’’.

3 SEC. 125. ENCOURAGEMENT OF MULTIYEAR CONTRACTING.

4 Section 2306b(a) of title 10, United States Code, is

5 amended in the matter preceding paragraph (1) by strik6 ing out ‘‘may’’ and inserting in lieu thereof ‘‘shall, to the

7 maximum extent possible,’’.

8 SEC. 126. ENCOURAGEMENT OF USE OF LEASING

9 AUTHORITY.

10 (a) IN GENERAL.—Chapter 137 of title 10, United

11 States Code, is amended by inserting after section 2316

12 the following new section:

13 ‘‘§ 2317. Equipment leasing

14 ‘‘The Secretary of Defense shall authorize and en15 courage the use of leasing in the acquisition of equipment

16 whenever such leasing is practicable and otherwise author17 ized by law.’’.

18 (b) REPORT.—Not later than 90 days after the date

19 of the enactment of this Act, the Secretary of Defense

20 shall submit to Congress a report setting forth changes

21 in legislation that would be required in order to facilitate

22 the use of leases by the Department of Defense in the

23 acquisition of equipment, including the use of multiyear

24 leases.
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1 Subtitle D—Performance Based

2 Contract Management

3 SEC. 131. UNALLOWABLE COSTS.

4 (a) SPECIFIC COSTS.—Section 2324(e)(1) of title 10,

5 United States Code, is amended by adding at the end the

6 following:

7 ‘‘(P) Labor costs in excess of the labor costs

8 provided for in the offer of the contractor.

9 ‘‘(Q) Bid protest costs.’’.

10 (b) EFFECTIVE DATE.—The amendment made by

11 subsection (a) shall take effect on the date of the enact12 ment of this Act and shall apply with respect to solicita13 tions for offers issued under chapter 137 of title 10,

14 United States Code, on or after that date.

15 SEC. 132. ALTERNATIVES APPROACHES TO CONTRACT

16 MANAGEMENT.

17 The Secretary of Defense shall prescribe in regula18 tions policies and procedures that encourage contract ad19 ministrators of the Department of Defense to submit to

20 program managers, and program managers to consider,

21 alternative approaches to contract management. A con22 tract administrator submitting an alternative approach to

23 the program manager shall include an analysis of the costs

24 and benefits of each alternative.
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1 SEC. 133. CONTRACTOR SHARE OF GAINS AND LOSSES

2 FROM COST, SCHEDULE, AND PERFORMANCE

3 EXPERIENCE.

4 Chapter 137 of title 10, United States Code, is

5 amended by inserting after section 2306b the following

6 new section:

7 ‘‘§ 2306c. Contractor share of gains and losses from

8 cost, schedule, and performance experi9 ence

10 ‘‘The Secretary of Defense shall prescribe in regula11 tions a clause, to be included in each cost-type contract

12 and incentive-type contract, that provides a system for the

13 contractor to be rewarded for contract performance ex14 ceeding the contract cost, schedule, or performance pa15 rameters to the benefit of the United States and to be

16 penalized for failing to adhere to cost, schedule, or per17 formance parameters to the detriment of the United

18 States.’’.

19 Subtitle E—Financial Management

20 SEC. 141. PHASE FUNDING OF DEFENSE ACQUISITION PRO21 GRAMS.

22 Chapter 131 of title 10, United States Code, as

23 amended by section 112, is further amended by adding

24 at the end the following:
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1 ‘‘§ 2222. Funding for results oriented acquisition pro2 gram cycle

3 ‘‘(a) PROGRAM PHASE DETAILS TO BE SUBMITTED

4 TO CONGRESS.—Before initial funding is made available

5 for a phase of the acquisition program cycle of an acquisi6 tion program for which an authorization of appropriations

7 is required by section 114 of this title, the Secretary of

8 Defense shall submit to Congress information about the

9 objectives and plans for the conduct of that phase and the

10 funding requirements for the entire phase. The informa11 tion shall identify the intended user of the system to be

12 acquired under the program and shall include objective,

13 quantifiable criteria for assessing the extent to which the

14 objectives and goals determined pursuant to section 2435

15 of this title are achieved.

16 ‘‘(b) FULL PHASE FUNDING.—(1) In authorizing ap17 propriations for an acquisition program for which an au18 thorization of appropriations is required by section 114

19 of this title, Congress shall provide in an Act authorizing

20 appropriations for the Department of Defense an author21 ization of appropriations for a phase of the acquisition

22 program in a single amount that is sufficient for carrying

23 out that phase. Each such authorization of appropriations

24 shall be stated in the Act as a specific item.

25 ‘‘(2) In each Act making appropriations for the De26 partment of Defense Congress shall specify the phase of
34

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1 each such acquisition program of the department for

2 which an appropriation is made and the amount of the

3 appropriation for the phase of that program.’’.

4 SEC. 142. MAXIMIZED BENEFIT FUNDING.

5 Chapter 131 of title 10, United States Code, as

6 amended by section 141, is further amended by adding

7 at the end the following:

8 ‘‘§ 2223. Maximized benefit funding

9 ‘‘(a) TRANSFERS AUTHORITY.—The Secretary of De10 fense may transfer funds from appropriations available for

11 a particular phase of an acquisition program of the De12 partment of Defense in order to pay out of the transferred

13 funds the cost of incentives provided program managers

14 who have been certified by the Secretary as having

15 achieved at least 90 percent of the cost, schedule, and per16 formance goals established for that phase.

17 ‘‘(b) LIMITATIONS.—The Secretary shall prescribe in

18 regulations—

19 ‘‘(1) the percent of available funds that may be

20 transferred under the authority of subsection (a) for

21 payment of incentives; and

22 ‘‘(2) a limitation that the total amount transferred for a phase of a program may not exceed 1 23 ⁄3

24 of the total amount of the cost of such phase that

25 is determined under the regulations to have been
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1 saved as a result of the achievement of the goals

2 for which the incentives are to be paid.’’.

3 SEC. 143. IMPROVED DEPARTMENT OF DEFENSE CON4 TRACT PAYMENT PROCEDURES.

5 (a) REVIEW AND IMPROVEMENT OF PROCEDURES.—

6 The Comptroller General of the United States shall review

7 commercial practices regarding accounts payable and, con8 sidering the results of the review, develop standards for

9 the Secretary of Defense to use for improving the contract

10 payment procedures and financial management systems of

11 the Department of Defense.

12 (b) GAO REPORT.—Not later than September 30,

13 1996, the Comptroller General shall submit to Congress

14 a report containing the following matters:

15 (1) The weaknesses in the financial manage16 ment processes of the Department of Defense.

17 (2) Deviations of the Department of Defense

18 payment procedures and financial management sys19 tems from the standards developed pursuant to sub20 section (a), expressed quantitatively.

21 (3) The officials of the Department of Defense

22 who are responsible for resolving the deviations.

23 (c) RESPONSIBILITIES OF THE SECRETARY.—The

24 Secretary of Defense shall take such corrective actions as

25 are necessary to resolve the deviations reported pursuant
36

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1 to subsection (b) to within 90 percent of the applicable

2 standards developed under subsection (a).

3 (d) ENFORCEMENT OF RESPONSIBILITY FOR RE4 SOLVING SYSTEM WEAKNESSES.—The Secretary of De5 fense may not provide any bonus or incentive pay to an

6 official identified pursuant to subsection (b) as responsible

7 for resolving deviations until the Secretary certifies to

8 Congress that the official has resolved more than 90 per9 cent of those deviations to be within the applicable stand10 ards developed under subsection (a).

11 Subtitle F—Defense Acquisition

12 Workforce

13 SEC. 151. CONSIDERATION OF PAST PERFORMANCE IN AS14 SIGNMENT TO ACQUISITION POSITIONS.

15 (a) REQUIREMENT.—Section 1701(a) of title 10,

16 United States Code, is amended by adding at the end the

17 following: ‘‘The policies and procedures shall provide that

18 education and training in acquisition matters, and past

19 performance of acquisition responsibilities, are major fac20 tors in the selection of personnel for assignment to acqui21 sition positions in the Department of Defense.’’.

22 (b) PERFORMANCE REQUIREMENTS FOR ASSIGN23 MENT.—(1) Section 1723(a) of title 10, United States

24 Code, is amended by inserting ‘‘, including requirements

25 relating to demonstrated past performance of acquisition
37

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1 duties,’’ in the first sentence after ‘‘experience require2 ments’’.

3 (2) Section 1724(a)(2) of such title is amended by

4 inserting before the semicolon at the end the following:

5 ‘‘and have demonstrated proficiency in the performance of

6 acquisition duties in the contracting position or positions

7 previously held’’.

8 (3) Section 1735 of such title is amended—

9 (A) in subsection (b)—

10 (i) by striking out ‘‘and’’ at the end of

11 paragraph (2);

12 (ii) by striking out the period at the end

13 of paragraph (3) and inserting in lieu thereof

14 ‘‘; and’’; and

15 (iii) by adding at the end the following:

16 ‘‘(4) must have demonstrated proficiency in the

17 performance of acquisition duties.’’;

18 (B) in subsection (c)—

19 (i) by striking out ‘‘and’’ at the end of

20 paragraph (2);

21 (ii) by striking out the period at the end

22 of paragraph (3) and inserting in lieu thereof

23 ‘‘; and’’; and

24 (iii) by adding at the end the following:
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1 ‘‘(4) must have demonstrated proficiency in the

2 performance of acquisition duties.’’;

3 (C) in subsection (d), by inserting before the

4 period at the end the following: ‘‘, and have dem5 onstrated proficiency in the performance of acquisi6 tion duties’’; and

7 (D) in subsection (e), by inserting before the

8 period at the end the following: ‘‘, and have dem9 onstrated proficiency in the performance of acquisi10 tion duties’’.

11 SEC. 152. TERMINATION OF DEFENSE ACQUISITION

12 SCHOOLS.

13 (a) CONTRACTING FOR DEFENSE ACQUISITION EDU14 CATION AND TRAINING.—Chapter 87 of title 10, United

15 States Code, is amended by adding at the end of sub16 chapter IV the following:

17 ‘‘§ 1747 Professional educational development and

18 training programs

19 ‘‘The Secretary of Defense shall provide for the ac20 quisition of professional educational development and

21 training services for the acquisition workforce from com22 mercial sources and through programs provided by Fed23 eral Government sources for all acquisition personnel of

24 all departments and agencies of the Federal Govern25 ment.’’.
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1 (b) TERMINATION OF DEFENSE ACQUISITION UNI2 VERSITY STRUCTURE.—Section 1746 of title 10, United

3 States Code, is repealed.

4 (c) EDUCATION AND TRAINING OF PROGRAM MAN5 AGERS AND PROGRAM EXECUTIVE OFFICERS.—Section

6 1735 of such title is amended—

7 (1) by striking out paragraph (1) of subsection

8 (b) and inserting in lieu thereof the following:

9 ‘‘(1) must have completed a course of program

10 management provided for under section 1747 of this

11 title or determined by the Secretary of Defense as

12 appropriate training for program managers of the

13 Department of Defense;’’; and

14 (2) by striking out paragraph (1) of subsection

15 (c) and inserting in lieu thereof the following:

16 ‘‘(1) must have completed a course of program

17 management provided for under section 1747 of this

18 title or determined by the Secretary of Defense as

19 appropriate training for program executive officers

20 of the Department of Defense;’’.

21 (d) ALTERNATIVE PROPOSAL.—The Secretary may

22 submit to Congress a proposed system of professional edu23 cational development and training for the Department of

24 Defense acquisition workforce as an alternative to the sys25 tem provided for in the amendments made by this section.
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1 Any such proposal shall be submitted not later than June

2 30, 1996.

3 (e) EFFECTIVE DATE.—The amendments made by

4 this section shall take effect on October 1, 1996.

5 Subtitle G—Revision of Procure6 ment Integrity Requirements

7 SEC. 161. AMENDMENTS TO OFFICE OF FEDERAL PROCURE8 MENT POLICY ACT.

9 (a) RECUSAL.—Subsection (c) of section 27 of the

10 Office of Procurement Policy Act (41 U.S.C. 423) is

11 amended—

12 (1) in paragraph (1)—

13 (A) in the matter above subparagraph (A),

14 by inserting ‘‘only’’ after ‘‘subsection (b)(1)’’;

15 and

16 (B) in subparagraph (A), by inserting

17 ‘‘(including the modification or extension of a

18 contract)’’ after ‘‘any procurement’’;

19 (2) by striking out paragraphs (2) and (3) and

20 inserting in lieu thereof:

21 ‘‘(2) Whenever the head of a procuring activity ap22 proves a recusal under paragraph (1), a copy of the

23 recusal request and the approval of the request shall be

24 retained by such official for a period (not less than five
41

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1 years) specified in regulations prescribed in accordance

2 with subsection (o).

3 ‘‘(3)(A) Except as provided in subparagraph (B), all

4 recusal requests and approvals of recusal requests pursu5 ant to this subsection shall be made available to the public

6 on request.

7 ‘‘(B) Any part of a recusal request or an approval

8 of a recusal request that is exempt from the disclosure

9 requirements of section 552 of title 5, United States Code,

10 under subsection (b)(1) of such section may be withheld

11 from disclosure to the public otherwise required under

12 subparagraph (A).’’; and

13 (3) in paragraph (4), by striking out ‘‘compet14 ing contractor’’ and inserting in lieu thereof ‘‘per15 son’’.

16 (b) APPLICABILITY OF CERTIFICATION REQUIRE17 MENT.—Subsection (e)(7)(A) of such section is amended

18 by adding at the end the following: ‘‘However, paragraph

19 (1)(B) does not apply with respect to a contract for less

20 than $500,000.’’.

21 (c) RESTRICTIONS RESULTING FROM PROCUREMENT

22 ACTIVITIES OF PROCUREMENT OFFICIALS.—Subsection

23 (f) of such section is amended—

24 (1) by redesignating paragraph (3) as para25 graph (4); and
42

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1 (2) by striking out paragraphs (1) and (2) and

2 inserting in lieu thereof the following:

3 ‘‘(1) No individual who, in the year prior to separa4 tion from service as an officer or employee of the Govern5 ment or an officer of the uniformed services in a covered

6 position, participated personally and substantially in ac7 quisition functions related to a contract, subcontract, or

8 claim of $500,000 or more and—

9 ‘‘(A) engaged in repeated direct contact with

10 the contractor or subcontractor on matters relating

11 to such contract, subcontract, or claim; or

12 ‘‘(B) exercised significant ongoing decisionmak13 ing responsibility with respect to the contractor or

14 subcontractor on matters relating to such contract,

15 subcontract, or claim,

16 shall knowingly accept or continue employment with such

17 contractor or subcontractor for a period of one year follow18 ing the individual’s separation from service, except that

19 such individual may accept or continue employment with

20 any division or affiliate of such contractor or subcontrac21 tor that does not produce the same or similar products

22 as the entity involved in the negotiation or performance

23 of the contract or subcontract or the adjustment of the

24 claim.
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1 ‘‘(2) No contractor or subcontractor, or any officer,

2 employee, agent, or consultant of such contractor or sub3 contractor shall knowingly offer, provide, or continue any

4 employment for another person, if such contractor, sub5 contractor, officer, employee, agent, or consultant knows

6 or should know that the acceptance of such employment

7 is or would be in violation of paragraph (1).

8 ‘‘(3) The head of each Federal agency shall designate

9 in writing as a ‘covered position’ under this section each

10 of the following positions in that agency:

11 ‘‘(A) The position of source selection authority,

12 member of a source selection evaluation board, or

13 chief of a financial or technical evaluation team, or

14 any other position, if the officer or employee in that

15 position is likely personally to exercise substantial

16 responsibility for ongoing discretionary functions in

17 the evaluation of proposals or the selection of a

18 source for a contract in excess of $500,000.

19 ‘‘(B) The position of procuring contracting offi20 cer, or any other position, if the officer or employee

21 in that position is likely personally to exercise sub22 stantial responsibility for ongoing discretionary func23 tions in the negotiation of a contract in excess of

24 $500,000 or the negotiation or settlement of a claim

25 in excess of $500,000.
44

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1 ‘‘(C) The position of program executive officer,

2 program manager, or deputy program manager, or

3 any other position, if the officer or employee in that

4 position is likely personally to exercise similar sub5 stantial responsibility for ongoing discretionary func6 tions in the management or administration of a con7 tract in excess of $500,000.

8 ‘‘(D) The position of administrative contracting

9 officer, the position of an officer or employee as10 signed on a permanent basis to a Government Plant

11 Representative’s Office, the position of auditor, a

12 quality assurance position, or any other position, if

13 the officer or employee in that position is likely per14 sonally to exercise substantial responsibility for on15 going discretionary functions in the on-site oversight

16 of a contractor’s operations with respect to a con17 tract in excess of $500,000.

18 ‘‘(E) A position in which the incumbent is likely

19 personally to exercise substantial responsibility for

20 ongoing discretionary functions in operational or de21 velopmental testing activities involving repeated di22 rect contact with a contractor regarding a contract

23 in excess of $500,000.’’.
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1 (d) DISCLOSURE OF PROPRIETARY OR SOURCE SE2 LECTION INFORMATION TO UNAUTHORIZED PERSONS.—

3 Subsection (l) of such section is amended—

4 (1) by inserting ‘‘who are likely to be involved

5 in contracts, modifications, or extensions in excess of

6 $25,000’’ in the first sentence after ‘‘its procure7 ment officials’’; and

8 (2) by striking out ‘‘(e)’’ each place it appears

9 and inserting in each such place ‘‘(f)’’.

10 (e) RULES OF CONSTRUCTION.—Subsection (n) of

11 such section is amended to read as follows:

12 ‘‘(n) RULES OF CONSTRUCTION.—Nothing in this

13 section shall be construed to—

14 ‘‘(1) authorize the withholding of any informa15 tion from the Congress, any committee or sub16 committee thereof, a Federal agency, any board of

17 contract appeals of a Federal agency, the Comptrol18 ler General, or an inspector general of a Federal

19 agency;

20 ‘‘(2) restrict the disclosure of information to, or

21 receipt of information by, any person or class of per22 sons authorized, in accordance with applicable agen23 cy regulations or procedures, to receive that infor24 mation;
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1 ‘‘(3) restrict a contractor from disclosing its

2 own proprietary information or the recipient of in3 formation so disclosed by a contractor from receiving

4 such information; or

5 ‘‘(4) restrict the disclosure or receipt of infor6 mation relating to a Federal agency procurement

7 that has been canceled by the agency and that the

8 contracting officer concerned determines in writing

9 is not likely to be resumed.’’.

10 (f) TERM TO BE DEFINED IN REGULATIONS.—Sub11 section (o)(2)(A) of such section is amended—

12 (1) by inserting ‘‘money, gratuity, or other’’ be13 fore ‘‘thing of value’ ’’; and

14 (2) by inserting before the semicolon ‘‘and such

15 other exceptions as may be adopted on a Govern16 mentwide basis under section 7353 of title 5, United

17 States Code’’.

18 (g) TERMS DEFINED IN LAW.—Subsection (p) of

19 such section is amended—

20 (1) in paragraph (1) by striking out ‘‘clauses

21 (i)–(viii)’’ and inserting in lieu thereof ‘‘clauses (i)

22 through (vii)’’;

23 (2) in paragraph (3)—

24 (A) in subparagraph (A)—

25 (i) by striking out clause (i);
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1 (ii) by redesignating clauses (ii), (iii),

2 (iv), (v), (vi), (vii), and (viii) as clauses (i),

3 (ii), (iii), (iv), (v), (vi), and (vii), respec4 tively; and

5 (iii) in clause (i) (as redesignated by

6 subclause (II) of this clause), by striking

7 out ‘‘review and approval of a specifica8 tion’’ and inserting in lieu thereof ‘‘ap9 proval or issuance of a specification, acqui10 sition plan, procurement request, or req11 uisition’’; and

12 (B) in subparagraph (B), by striking out

13 all after ‘‘includes’’ and inserting in lieu thereof

14 the following: ‘‘any individual acting on behalf

15 of, or providing advice to, the agency with re16 spect to any phase of the agency procurement

17 concerned, regardless of whether such individ18 ual is a consultant, expert, or adviser, or an of19 ficer or employee of a contractor or subcontrac20 tor (other than a competing contractor).’’; and

21 (3) in paragraph (6)(A), by inserting

22 ‘‘nonpublic’’ before ‘‘information’’.
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1 SEC. 162. AMENDMENTS TO TITLE 18, UNITED STATES

2 CODE.

3 Section 208(a) of title 18, United States Code, is

4 amended—

5 (1) by inserting ‘‘(1)’’ before ‘‘Except as per6 mitted’’; and

7 (2) by adding at the end the following new

8 paragraph:

9 ‘‘(2) Whoever knowingly aids, abets, counsels, com10 mands, induces, or procures conduct prohibited by this

11 section shall be subject to the penalties set forth in section

12 216 of this title.’’.

13 SEC. 163. REPEAL OF SUPERSEDED AND OBSOLETE LAWS.

14 (a) REPEAL.—The following provisions of law are re15 pealed:

16 (1) Sections 2207, 2397, 2397a, 2397b, and

17 2397c of title 10, United States Code.

18 (2) Section 281 of title 18, United States Code.

19 (3) Part A of title VI of the Department of En20 ergy Organization Act (42 U.S.C. 7211 through

21 7218).

22 (b) REPEAL OF SUPERSEDED LAW.—Section

23 6001(b) of the Federal Acquisition Streamlining Act of

24 1994 (Public Law 103–355; 108 Stat. 3362; (18 U.S.C.

25 281 note) is repealed.
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1 SEC. 164. IMPLEMENTATION.

2 (a) REGULATIONS.—Not later than 180 days after

3 the date of the enactment of this Act, regulations imple4 menting the amendments made by section 161 to section

5 27 of the Office of Federal Procurement Policy Act (41

6 U.S.C. 423), including definitions of the terms used in

7 subsection (f) of such section, shall be issued in accord8 ance with sections 6 and 25 of such Act (41 U.S.C. 405

9 and 521) after coordination with the Director of the Office

10 of Government Ethics.

11 (b) SAVINGS PROVISIONS.—(1) No officer, employee,

12 agent, representative, or consultant of a contractor who

13 has signed a certification under section 27(e)(1)(B) of the

14 Office of Federal Procurement Policy Act (41 U.S.C.

15 423(e)(1)(B)) before the effective date of this Act shall

16 be required to sign a new certification as a result of the

17 enactment of this Act.

18 (2) No procurement official of a Federal agency who

19 has signed a certification under section 27(l) of the Office

20 of Federal Procurement Policy Act (41 U.S.C. 423(l)) be21 fore the date of enactment of this Act shall be required

22 to sign a new certification as a result of the enactment

23 of this Act.

24 (c) INSPECTOR GENERAL REPORTS.—Not later than

25 May 31 of each of the years 1996 through 1999, the In26 spector General of each Federal agency (or, in the case
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1 of a Federal agency that does not have an Inspector Gen2 eral, the head of such agency) shall submit to Congress

3 a report on the compliance by the agency during the pre4 ceding year with the requirement for the head of the agen5 cy to designate covered procurement positions under sec6 tion 27(f)(3) of the Office of Federal Procurement Policy

7 Act (as added by section 161(c)).

8 Subtitle H—Clerical Amendments

9 SEC. 171. CLERICAL AMENDMENTS TO TITLE 10.

10 (a) CHAPTER 87.—The table of sections at the begin11 ning of subchapter IV of chapter 87 of title 10, United

12 States Code, is amended—

13 (1) by striking out the item relating to section

14 1746; and

15 (2) by adding at the end the following new

16 item:

‘‘1747. Professional educational development and training programs.’’.

17 (b) CHAPTER 131.—The table of sections at the be18 ginning of chapter 131 of title 10, United States Code,

19 is amended—

20 (1) by striking out the item relating to section

21 2207; and

22 (2) by adding at the end the following new

23 items:

‘‘2221. Results oriented acquisition program cycle.

‘‘2222. Funding for results oriented acquisition program cycle.

‘‘2223. Maximized benefit funding.’’.
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1 (c) CHAPTER 137.—The table of sections at the be2 ginning of chapter 137 of title 10, United States Code,

3 is amended—

4 (1) by inserting after the item relating to sec5 tion 2306b the following new item:

‘‘2306c. Contractor share of gains and losses from cost, schedule, and performance experience.’’;

6 (2) by inserting after the item relating to sec7 tion 2316 the following new item:

‘‘2317. Equipment leasing.’’;

8 and

9 (3) by inserting after the item relating to sec10 tion 2319 the following new item:

‘‘2319a. Contractor performance certification system.’’.

11 (d) CHAPTER 141.—The table of sections at the be12 ginning of chapter 141 of title 10, United States Code,

13 is amended—

14 (1) by striking out the items relating to sections

15 2397, 2397a, 2397b, and 2397c; and

16 (2) by striking out the item relating to section

17 2399 and inserting in lieu thereof the following new

18 item:

‘‘2399. Operational test and evaluation of major systems under defense acquisition programs.’’.
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1 SEC. 172. OTHER LAWS.

2 (a) TITLE 18.—The table of sections for chapter 15

3 of title 18, United States Code, is amended by striking

4 out the item relating to section 281.

5 (b) DEPARTMENT OF ENERGY ORGANIZATION

6 ACT.—The table of contents in the first section of the De7 partment of Energy Organization Act (42 U.S.C. 7101 et

8 seq.) is amended by striking out the item relating to part

9 A of title VI and the sections therein.

10 TITLE II—REORGANIZATION

11 AND REFORM OF THE DE12 FENSE ACQUISITION SYSTEM

13 Subtitle A—Streamlining and Im14 provement of Acquisition Man15 agement

16 SEC. 201. REORGANIZATION OF ACQUISITION AUTHORITY.

17 (a) UNDER SECRETARY OF DEFENSE FOR ACQUISI18 TION AND TECHNOLOGY.—Section 133(b) of title 10,

19 United States Code, is amended—

20 (1) by redesignating paragraphs (3) and (4) as

21 paragraphs (4) and (5), respectively; and

22 (2) by striking out paragraphs (1) and (2) and

23 inserting in lieu thereof the following:

24 ‘‘(1) prescribing policies for research, develop25 ment, and acquisition activities of the Department of

26 Defense;
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1 ‘‘(2) planning, programming, and overseeing

2 the research, development, and acquisition activities

3 of the Department of Defense;

4 ‘‘(3) assisting in the preparation and integra5 tion of budgets for the research, development, and

6 acquisition activities of the Department of Defense,

7 including assisting in the planning, programming,

8 and budgeting system with respect to such activi9 ties;’’.

10 (b) DEFENSE RESEARCH, DEVELOPMENT, AND AC11 QUISITION AGENCY.—(1) Part I of subtitle A of title 10,

12 United States Code, is amended by inserting after chapter

13 9 the following new chapter:

14 ‘‘CHAPTER 10—DEFENSE RESEARCH,

15 DEVELOPMENT, AND ACQUISITION

16 AGENCY

‘‘Sec.

‘‘231. Establishment.

‘‘232. Use of agency for all research, development, and acquisition activities.

‘‘233. Duties.

‘‘234. Program executive officers.

‘‘235. Program managers.

‘‘236. Functional analytical capability.

17 ‘‘§ 231. Establishment

18 ‘‘(a) AGENCY.—There is established a Defense Re19 search, Development, and Acquisition Agency in the De20 partment of Defense.

21 ‘‘(b) DIRECTOR.—(1) The head of the agency is the

22 Director of Defense Research, Development, and Acquisi-
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1 tion who shall be appointed by the Under Secretary of De2 fense for Acquisition and Technology from among persons

3 who are career professional employees in the acquisition

4 workforce of the Department of Defense.

5 ‘‘(2) A member of the armed forces, while serving as

6 the Director, holds the grade of general or, in the case

7 of an officer of the Navy, admiral. A civilian, while serving

8 as the Director, holds an equivalent civilian grade.

9 ‘‘(c) CHIEF OF ENGINEERING AND ANALYSIS.—(1)

10 In the Defense Research, Development, and Acquisition

11 Agency there is a Chief of Engineering and Analysis who

12 shall be appointed by the Director from among the career

13 professional employees in the acquisition workforce of the

14 Department of Defense.

15 ‘‘(2) The Director shall evaluate the performance of

16 the Chief of Engineering and Analysis. The Director may

17 not delegate the performance of the evaluation responsibil18 ity.

19 ‘‘(3) The Chief of Engineering and Analysis shall be

20 the senior technical adviser for the Defense Research, De21 velopment, and Acquisition Agency.

22 ‘‘§ 232. Use of agency for all research, development,

23 and acquisition activities

24 ‘‘Subject to sections 3013(h), 5013(h), 8013(h) of

25 this title, the Director shall conduct the research, develop-
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1 ment, and acquisition activities of the Department of De2 fense, including the activities of the research, development,

3 and engineering centers of the Department of Defense.

4 ‘‘§ 233. Duties

5 ‘‘The responsibilities of the Under Secretary of De6 fense for Acquisition and Technology that are to be per7 formed by the Defense Research, Development, and Acqui8 sition Agency include the following:

9 ‘‘(1) Planning, programming, and carrying out

10 the research, development, and acquisition activities

11 of the Department of Defense.

12 ‘‘(2) Advising the Secretary of Defense and the

13 Secretaries of the military departments regarding

14 the preparation and integration of the budgets for

15 the research, development, and acquisition activities

16 of the Department of Defense.

17 ‘‘(3) Identifying and informing operational com18 manders regarding alternative technology solutions

19 to fulfill emerging requirements.

20 ‘‘(4) Ensuring that the acquisition plan for

21 each acquisition program realistically reflects the

22 budget and related decisions made for that program.

23 ‘‘(5) Conducting research on management tech24 niques as well as on individual systems.
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1 ‘‘§ 234. Program executive officers

2 ‘‘(a) SELECTION AND EVALUATION.—The program

3 executive officers of the Defense Research, Development,

4 and Acquisition Agency shall be selected and evaluated by

5 the Director.

6 ‘‘(b) DUTIES.—The duties of a program executive of7 ficer are as follows:

8 ‘‘(1) To manage acquisition programs assigned

9 to the program executive officer.

10 ‘‘(2) To manage related technical support re11 sources.

12 ‘‘(3) To establish and conduct integrated deci13 sion team meetings.

14 ‘‘(4) To provide technological advice (including

15 advice regarding costs, schedule, and performance

16 data relating to alternative technological approaches

17 for fulfilling emerging requirements) to users of pro18 gram products and to the officials within the De19 partment of Defense who plan, program, and budget

20 for the acquisition programs assigned to the pro21 gram executive officer.

22 ‘‘(c) ORGANIZATION OF PERSONNEL.—The program

23 executive officers shall be organized on the basis of unique

24 mission areas or, in the case of programs for systems spe25 cifically relating to certain classes of targets, on the basis

26 of target classes. No program executive officer may be or-
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1 ganized with other program executive officers on both

2 bases. The Secretary of Defense shall identify the mission

3 areas or target classes on the basis of which program exec4 utive officers may be organized.

5 ‘‘(d) ACQUISITION LIFE-CYCLE MANAGEMENT.—The

6 responsibilities of a program executive officer for a weapon

7 acquisition program shall cover the entire life cycle of the

8 program.

9 ‘‘(e) USER AND OPERATOR INTERACTION.—(1) The

10 Chairman of the Joint Chiefs of Staff, in consultation with

11 the Under Secretary of Defense for Acquisition and Tech12 nology, shall prescribe policies and procedures for the

13 interaction of the commanders of the unified and specified

14 combatant commands with program executive officers re15 garding the initiation and conduct of weapon acquisition

16 programs. The policies and procedures shall include provi17 sions for enabling such commands to perform operational

18 and acceptance testing of weapons acquired pursuant to

19 such programs.

20 ‘‘(2) The Under Secretary of Defense (Comptroller),

21 in consultation with the Under Secretary of Defense for

22 Acquisition and Technology and the Secretaries of the

23 military departments, shall prescribe policies and proce24 dures for the interaction between the commanders of the

25 unified and specified combatant commands and the pro-
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1 gram executive officers regarding funding for weapon ac2 quisition programs.

3 ‘‘(3) The policies and procedures prescribed pursuant

4 to this subsection shall include a system for the command5 ers of the unified and specified combatant command to

6 choose among alternatives developed by program executive

7 officers for meeting acquisition requirements presented by

8 the commanders.

9 ‘‘§ 235. Program managers

10 ‘‘(a) SELECTION AND EVALUATION.—Each program

11 manager of the Defense Research, Development, and Ac12 quisition Agency shall be selected and evaluated by the

13 Director and a program executive officer and shall report

14 directly to the program executive officer having primary

15 responsibility for the system being acquired under the pro16 gram.

17 ‘‘(b) DUTIES.—A program manager is responsible for

18 the routine management of a research, development, and

19 acquisition program, including the obtaining of necessary

20 logistical support and support services for that program.

21 ‘‘(c) NONDUPLICATION OF FUNCTIONS.—The man22 agement functions of a program manager should not du23 plicate the management functions of a program executive

24 officer.
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1 ‘‘§ 236. Functional analytical capability

2 ‘‘(a) RESPONSIBILITY OF CHIEF OF ENGINEERING

3 AND ANALYSIS.—The Chief of Engineering and Analysis

4 shall be responsible for ensuring that each of the func5 tional analytical capabilities provided to the Director, ac6 quisition program executive officers, and acquisition pro7 gram managers in connection with acquisition programs

8 of the Department of Defense is the most advanced capa9 bility of its type.

10 ‘‘(b) FUNCTIONAL ANALYTICAL CAPABILITIES.—The

11 functional analytical capabilities referred to in subsection

12 (a) are as follows:

13 ‘‘(1) Cost and affordability analysis.

14 ‘‘(2) Logistics and support analysis.

15 ‘‘(3) Reliability and maintainability analysis.

16 ‘‘(4) Producibility analysis.

17 ‘‘(5) Environmental analysis.

18 ‘‘(6) Configuration management.

19 ‘‘(7) Warfighting and battlefield performance

20 and utility analysis.

21 ‘‘(8) System engineering.

22 ‘‘(9) Any other analytical capability that may

23 be necessary for ensuring the timeliness, perform24 ance, and affordability of acquisition programs.’’.

25 (2) The tables of chapters at the beginning of subtitle

26 A of title 10, United States Code, and at the beginning
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1 of part I of such subtitle, are amended by inserting after

2 the item relating to chapter 9 the following new item:

‘‘10. Defense Research, Development, and Acquisition Agency ............... 231’’.

3 (c) LIMITATION OF PROCUREMENT AUTHORITY OF

4 MILITARY DEPARTMENTS.—(1) Section 3013 of title 10,

5 United States Code, is amended—

6 (A) in subsection (b)—

7 (i) by striking out ‘‘and subject to the pro8 visions of chapter 6 of this title,’’ and inserting

9 in lieu thereof ‘‘, subject to the provisions of

10 chapter 6 of this title, and subject to subsection

11 (h),’’; and

12 (ii) in paragraph (4), by striking out ‘‘(in13 cluding research and development)’’; and

14 (B) by adding at the end the following new sub15 section:

16 ‘‘(h)(1) The Secretary of the Army shall be respon17 sible for procurements of property and services, and may

18 exercise authority to conduct such procurements, only to

19 the extent that the Secretary of Defense determines nec20 essary for the sustainment of operations of the Army. The

21 Secretary of Defense shall prescribe in regulations the ex22 tent of the responsibility and authority of the Secretary

23 of the Army for procurements of property and services.

24 ‘‘(2) In conducting a procurement in accordance with

25 paragraph (1), the Secretary of the Army shall be subject
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1 to the same laws as are applicable to acquisitions con2 ducted by the Secretary of Defense.’’.

3 (2) Section 5013 of title 10, United States Code, is

4 amended—

5 (A) in subsection (b)—

6 (i) by striking out ‘‘and subject to the pro7 visions of chapter 6 of this title,’’ and inserting

8 in lieu thereof ‘‘, subject to the provisions of

9 chapter 6 of this title, and subject to subsection

10 (h),’’; and

11 (ii) in paragraph (4), by striking out ‘‘(in12 cluding research and development)’’; and

13 (B) by adding at the end the following new sub14 section:

15 ‘‘(h)(1) The Secretary of the Navy shall be respon16 sible for procurements of property and services, and may

17 exercise authority to conduct such procurements, only to

18 the extent that the Secretary of Defense determines nec19 essary for the sustainment of operations of the Navy. The

20 Secretary of Defense shall prescribe in regulations the ex21 tent of the responsibility and authority of the Secretary

22 of the Navy for procurements of property and services.

23 ‘‘(2) In conducting a procurement in accordance with

24 paragraph (1), the Secretary of the Navy shall be subject
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1 to the same laws as are applicable to acquisitions con2 ducted by the Secretary of Defense.’’.

3 (3) Section 8013 of title 10, United States Code, is

4 amended—

5 (A) in subsection (b)—

6 (i) by striking out ‘‘and subject to the pro7 visions of chapter 6 of this title,’’ and inserting

8 in lieu thereof ‘‘, subject to the provisions of

9 chapter 6 of this title, and subject to subsection

10 (h),’’; and

11 (ii) in paragraph (4), by striking out ‘‘(in12 cluding research and development)’’; and

13 (B) by adding at the end the following new sub14 section:

15 ‘‘(h)(1) The Secretary of the Air Force shall be re16 sponsible for procurements of property and services, and

17 may exercise authority to conduct such procurements, only

18 to the extent that the Secretary of Defense determines

19 necessary for the sustainment of operations of the Air

20 Force. The Secretary of Defense shall prescribe in regula21 tions the extent of the responsibility and authority of the

22 Secretary of the Air Force for procurements of property

23 and services.

24 ‘‘(2) In conducting a procurement in accordance with

25 paragraph (1), the Secretary of the Air Force shall be sub-
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1 ject to the same laws as are applicable to acquisitions con2 ducted by the Secretary of Defense.’’.

3 (4) Section 2302(1) of title 10, United States Code,

4 is amended by striking out ‘‘the Secretary of the Army,

5 the Secretary of the Navy, the Secretary of the Air

6 Force,’’.

7 (5) Section 2302c of such title is amended—

8 (A) in subsection (a)(1), by striking out the sec9 ond sentence; and

10 (B) in subsection (b), by striking out ‘‘para11 graph (5) or (6)’’ and inserting in lieu thereof

12 ‘‘paragraph (2) or (3)’’.

13 (6) Section 2303(a) of such title is amended—

14 (A) by striking out paragraphs (2), (3), and

15 (4); and

16 (B) by redesignating paragraphs (5) and (6) as

17 paragraphs (2) and (3), respectively.

18 SEC. 202. JOINT FOREIGN PRODUCTS DEVELOPMENT.

19 Section 153 of title 10, United States Code, is

20 amended by adding at the end the following new sub21 section:

22 ‘‘(c) RECOMMENDATIONS FOR JOINT DEVELOPMENT

23 OF FOREIGN PRODUCTS.—The Chairman of the Joint

24 Chiefs of Staff, in consultation with the commanders of

25 the unified and specified combatant commands, shall make
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1 recommendations to the Under Secretary of Defense for

2 Acquisition and Technology regarding the desirability of

3 joint development by the United States and one or more

4 foreign countries of systems proposed to be developed, or

5 under development, by such foreign country or foreign

6 countries.’’.

7 Subtitle B—Transfer of Functions

8 SEC. 211. TRANSFERS.

9 (a) MILITARY DEPARTMENTS.—Except as provided

10 in subsection (c), all research, development, and acquisi11 tion functions of the Secretaries of the military depart12 ments are transferred to the Secretary of Defense.

13 (b) PROCUREMENT AGENCIES, COMMANDS, AND OF14 FICES.—Except as provided in subsection (c), there is

15 transferred to the Defense Research, Development, and

16 Acquisition Agency referred to in section 231(a) of title

17 10, United States Code (as added by section 201), all

18 functions of the following organizations:

19 (1) The Defense Logistics Agency.

20 (2) The Advanced Research Projects Agency.

21 (3) The following procurement commands of

22 the Army:

23 (A) The Army Materiel Command.

24 (B) The Army Information Systems Com25 mand.
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1 (C) The Army Space and Strategic De2 fense Command.

3 (4) The following procurement commands of

4 the Navy and Marine Corps:

5 (A) The Navy weapon systems commands.

6 (B) The Navy Strategic Systems Program

7 Office.

8 (C) The Marine Corps Research, Develop9 ment and Acquisition Command.

10 (5) The Air Force Materiel Command.

11 (6) Any successor organization to any agency,

12 command, or office named in paragraphs (1)

13 through (5).

14 (7) Each agency or command within the De15 partment of Defense not referred to in paragraphs

16 (1) through (6) that, on the day before the effective

17 date of this title, has as a primary mission or func18 tion the performance of a research, development, or

19 acquisition function of the Department of Defense.

20 (c) FUNCTIONS NOT TRANSFERRED.—(1) The fol21 lowing functions of the Secretaries of the military depart22 ments are not transferred to the Secretary of Defense:

23 (A) Functions that relate to planning, program24 ming, and budgeting.
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1 (B) Functions to be performed by the Secretary

2 of a military department pursuant to section

3 3013(h), 5013(h), or 8013(h) of title 10, United

4 States Code, as added by section 201(c).

5 (2) To the extent prescribed by the Secretary of De6 fense, functions referred to in paragraph (1)(B) that are

7 performed by an organization referred to in subsection (b)

8 need not be transferred in accordance with that sub9 section.

10 (d) TERMINATION OF ORGANIZATION.—The Sec11 retary of Defense shall terminate each organization from

12 which all of its functions are transferred under subsection

13 (b).

14 SEC. 212. SAVINGS PROVISIONS.

15 (a) REGULATIONS, INSTRUMENTS, RIGHTS, AND

16 PRIVILEGES.—All rules, regulations, contracts, orders, de17 terminations, permits, certificates, licenses, grants, and

18 privileges—

19 (1) which have been issued, made, granted, or

20 allowed to become effective by the Secretary or other

21 officer or employee of a military department, the

22 head of a Defense Agency of the Department of De23 fense, or by a court of competent jurisdiction, in

24 connection with any research, development, or acqui-
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1 sition activity of a military department or Defense

2 Agency, and

3 (2) which are in effect on the effective date of

4 this title,

5 shall continue in effect according to their terms until

6 modified, terminated, superseded, set aside, or revoked in

7 accordance with law by the Secretary of Defense, the

8 Under Secretary of Defense for Acquisition and Tech9 nology, or another authorized official, by a court of com10 petent jurisdiction, or by operation of law.

11 (b) PROCEEDINGS AND APPLICATIONS.—(1)(A) The

12 provisions of this subtitle shall not affect any proceeding,

13 including any proceeding involving a claim or application,

14 in connection with any acquisition activity of a military

15 department or a Defense Agency of the Department of De16 fense that is pending before that military department or

17 Defense Agency on the effective date of this title.

18 (B) Orders may be issued in any such proceeding,

19 appeals may be taken therefrom, and payments may be

20 made pursuant to such orders, as if this Act had not been

21 enacted. An order issued in any such proceeding shall con22 tinue in effect until modified, terminated, superseded, or

23 revoked by the Secretary of Defense or the Under Sec24 retary of Defense for Acquisition and Technology, by a

25 court of competent jurisdiction, or by operation of law.
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1 (C) Nothing in this paragraph prohibits the dis2 continuance or modification of any such proceeding under

3 the same terms and conditions and to the same extent that

4 such proceeding could have been discontinued or modified

5 if this Act had not been enacted.

6 (2) The Secretary of Defense may prescribe regula7 tions providing for the orderly transfer of proceedings con8 tinued under paragraph (1) to the Secretary of Defense

9 or to the Under Secretary of Defense for Acquisition and

10 Technology.

11 Subtitle C—Conforming

12 Amendments

13 SEC. 221. MODIFICATION OF THE RESPONSIBILITY OF THE

14 UNDER SECRETARY OF DEFENSE (COMP15 TROLLER) FOR DEFENSE ACQUISITION BUDG16 ETS.

17 Section 135(c) of title 10, United States Code, is

18 amended in each of paragraphs (2), (3), and (4), by insert19 ing after the paragraph designation the following: ‘‘subject

20 to section 133(b) of this title,’’.

21 SEC. 222. THE DEFENSE ACQUISITION WORK FORCE.

22 (a) GENERAL AUTHORITIES AND RESPONSIBIL23 ITIES.—(1)(A) Sections 1704, 1705, and 1707 of title 10,

24 United States Code, are repealed.
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1 (B) The table of sections at the beginning of sub2 chapter I of chapter 87 of such title is amended by strik3 ing out the items relating to sections 1704 through 1707

4 and inserting in lieu thereof the following:

‘‘1704. Acquisition career program boards.’’.

5 (2) Section 1706 of title 10, United States Code, is

6 amended—

7 (A) in subsection (a), by striking out ‘‘an Ac8 quisition Corps’’ in the first sentence and inserting

9 in lieu thereof ‘‘the Acquisition Corps’’;

10 (B) in the section heading by striking out

11 ‘‘§ 1706’’ and inserting in lieu thereof ‘‘§ 1704’’;

12 (C) by striking out subsection (a) and inserting

13 in lieu thereof the following:

14 ‘‘(a) ESTABLISHMENT.—The Under Secretary of De15 fense for Acquisition and Technology shall establish an ac16 quisition career program board to advise the Under Sec17 retary in managing the accession, training, education, and

18 career development of military and civilian personnel in

19 the acquisition workforce and in selecting individuals for

20 the Acquisition Corps under section 1731 of this title.’’;

21 (D) in subsection (b)—

22 (i) in the first sentence, by striking out

23 ‘‘Each’’ and inserting in lieu thereof ‘‘The’’;

24 and
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1 (ii) in the second sentence, by striking out

2 ‘‘service acquisition executive’’ and inserting in

3 lieu thereof ‘‘Under Secretary’’; and

4 (E) in subsection (c)—

5 (i) by striking out ‘‘Secretary of a military

6 department’’ and inserting in lieu thereof

7 ‘‘Under Secretary’’; and

8 (ii) by striking out ‘‘in the department’’.

9 (b) DEFENSE ACQUISITION POSITIONS.—(1) Section

10 1722 of title 10, United States Code, is amended—

11 (A) in subsection (g), by striking out ‘‘Sec12 retary of each military department, acting through

13 the service acquisition executive for that depart14 ment,’’ and inserting in lieu thereof ‘‘Secretary of

15 Defense’’; and

16 (B) in subsection (h), by striking out ‘‘or the

17 Secretary of a military department (as applicable)’’.

18 (2) Section 1724(d) of such title is amended in the

19 first sentence—

20 (A) by striking out ‘‘a military department’’

21 and inserting in lieu thereof ‘‘the Department of De22 fense’’; and

23 (B) by striking out ‘‘of that military depart24 ment’’.
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1 (c) ACQUISITION CORPS.—(1) Section 1731 of title

2 10, United States Code, is amended—

3 (A) by striking out subsection (a) and inserting

4 in lieu thereof the following:

5 ‘‘(a) ACQUISITION CORPS.—The Secretary of Defense

6 shall establish a Department of Defense Acquisition

7 Corps.’’; and

8 (B) in subsection (b), by striking out ‘‘an Ac9 quisition Corps’’ and inserting in lieu thereof ‘‘the

10 Acquisition Corps’’.

11 (2) Section 1732 of such title is amended—

12 (A) in subsection (a), by striking out ‘‘an Ac13 quisition Corps’’ in the first sentence and inserting

14 in lieu thereof ‘‘the Acquisition Corps’’;

15 (B) in subsection (b)—

16 (i) in paragraph (2)(A)(ii), by striking out

17 ‘‘of the employing military department’’; and

18 (ii) in paragraph (4), by striking out ‘‘or

19 the Secretary of the military department con20 cerned’’; and

21 (C) in subsection (d)—

22 (i) by striking out ‘‘of a military depart23 ment’’ in the first sentence of paragraph (1)

24 and in paragraph (2); and
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1 (ii) by striking out ‘‘of that military de2 partment’’ in the first sentence of paragraph

3 (1).

4 (3) Section 1733(a) of such title is amended by strik5 ing out ‘‘an Acquisition Corps’’ and inserting in lieu there6 of ‘‘the Acquisition Corps’’.

7 (4) Section 1734 of such title is amended—

8 (A) in subsection (a)(1), by striking out ‘‘Sec9 retary of each military department, acting through

10 the service acquisition executive for that depart11 ment,’’ in the first sentence and inserting in lieu

12 thereof ‘‘Secretary of Defense, acting through the

13 Under Secretary of Defense for Acquisition and

14 Technology,’’;

15 (B) in subsection (b)(1), by striking out ‘‘major

16 milestone’’ and inserting in lieu thereof ‘‘phase of

17 the program cycle’’;

18 (C) by striking out subsection (c);

19 (D) in subsection (d), by striking out para20 graphs (2) and (3) and inserting in lieu thereof the

21 following:

22 ‘‘(2) The authority to grant waivers may be delegated

23 by the Under Secretary only to the Director of Acquisi24 tion, Education, Training, and Career Development.
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1 ‘‘(3) With respect to each waiver granted under this

2 subsection, the Under Secretary shall set forth in a writ3 ten document the rationale for the decision to grant the

4 waiver. The Director of Acquisition, Education, Training,

5 and Career Development shall maintain all such docu6 ments.’’;

7 (E) in subsection (e)—

8 (i) in the first sentence of paragraph (1)—

9 (I) by striking out ‘‘an Acquisition

10 Corps’’ in the first sentence and inserting

11 in lieu thereof ‘‘the Acquisition Corps’’;

12 and

13 (II) by striking out ‘‘major program

14 milestone’’ and inserting in lieu thereof

15 ‘‘phase of the program cycle’’; and

16 (ii) in paragraph (2), by striking out ‘‘of

17 the department concerned’’ in the first sen18 tence;

19 (F) by striking out subsections (g) and (h) and

20 inserting in lieu thereof the following:

21 ‘‘(g) ASSIGNMENTS.—Subject to the authority, direc22 tion, and control of the Secretary, the Under Secretary

23 shall make the assignments of civilian and military mem24 bers of the Acquisition Corps to critical acquisition posi25 tions.’’;
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1 (G) by striking out ‘‘concerned’’ in—

2 (i) the second sentence of subsection

3 (a)(1);

4 (ii) the second sentence of subsection

5 (a)(2);

6 (iii) the sentence following subparagraph

7 (B) in subsection (b)(1);

8 (iv) the second sentence of subsection

9 (b)(2); and

10 (v) subsection (d)(1); and

11 (H) by redesignating subsections (d), (e), (f),

12 (g), and (h) as subsections (c), (d), (e), (f), and (g),

13 respectively.

14 (5) Section 1737 of title 10, United States Code, is

15 amended—

16 (A) in subsection (a)—

17 (i) in paragraph (1), by striking out ‘‘an

18 Acquisition Corps’’ and inserting in lieu thereof

19 ‘‘the Acquisition Corps’’; and

20 (ii) in paragraph (5), by striking out ‘‘, or

21 a principal deputy to a director of contracting’’

22 and all that follows through ‘‘Department of

23 Defense’’ and inserting in lieu thereof ‘‘or a

24 principal deputy to a director of contracting’’;

25 and
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1 (B) by striking out subsection (c) and inserting

2 in lieu thereof the following:

3 ‘‘(c) WAIVER.—(1) The Secretary of Defense may

4 waive, on a case-by-case basis, the requirements estab5 lished under this subchapter with respect to the assign6 ment of an individual to a particular critical acquisition

7 position. Such a waiver may be granted only if unusual

8 circumstances justify the waiver or if the Secretary deter9 mines that the individual’s qualifications obviate the need

10 for meeting the education, training, and experience re11 quirements established under this subchapter.

12 ‘‘(2) The Secretary shall act through the Under Sec13 retary of Defense for Acquisition and Technology in exer14 cising the authority provided in paragraph (1). The au15 thority to grant waivers under this subsection may be dele16 gated by the Under Secretary only to the Director of Ac17 quisition Education, Training, and Career Development.’’.

18 (d) EDUCATION AND TRAINING.—(1) Section

19 1741(c) of title 10, United States Code, is amended to

20 read as follows:

21 ‘‘(c) PROGRAMS.—The Under Secretary shall estab22 lish and implement the education and training programs

23 authorized by this subchapter.’’.

24 (2) Section 1742 of such title is amended by striking

25 out ‘‘require that each military department’’.
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1 (3) Section 1743 of such title is amended in the first

2 sentence by striking out ‘‘require that the Secretary of

3 each military department’’.

4 (e) GENERAL MANAGEMENT.—(1) Section 1761(a)

5 of title 10, United States Code, is amended by striking

6 out ‘‘prescribe regulations to ensure that the military de7 partments and Defense Agencies’’.

8 (2) Section 1762(c) of such title is amended—

9 (A) by striking out the parenthetical material in

10 the matter above paragraph (1);

11 (B) in paragraph (4), by striking out ‘‘an ac12 quisition corps’’ in subparagraphs (A) and (B) and

13 inserting in lieu thereof ‘‘the Acquisition Corps’’;

14 and

15 (C) in paragraph (14), by striking out ‘‘and the

16 performance of each military department’’.

17 (3) Section 1763 of such title is amended by striking

18 out the second sentence.

19 SEC. 223. PROCUREMENT PROCEDURES GENERALLY.

20 Chapter 137 of title 10, United States Code, is

21 amended as follows:

22 (1) Section 2305(d) is amended—

23 (A) in the first sentence of paragraph

24 (1)(A), by striking out ‘‘shall ensure that,’’ and

25 all that follows through ‘‘the head of an agen-
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1 cy’’ and inserting in lieu thereof ‘‘, in preparing

2 a solicitation for the award of a development

3 contract for a major system, shall’’;

4 (B) in the first sentence of paragraph

5 (2)(A), by striking out ‘‘shall ensure that,’’ and

6 all that follows through ‘‘the head of an agen7 cy’’ and inserting in lieu thereof ‘‘, in preparing

8 a solicitation for the award of a production con9 tract for a major system, shall’’;

10 (C) by striking out ‘‘the head of the agen11 cy’’ each place it appears and inserting in lieu

12 thereof ‘‘the Secretary’’; and

13 (D) by striking out ‘‘the head of an agen14 cy’’ each place it appears and inserting in lieu

15 thereof ‘‘the Secretary of Defense’’.

16 (2) Section 2306b is amended—

17 (A) in subsection (b)(1), by striking out

18 ‘‘for the agency or agencies under the jurisdic19 tion of such official’’; and

20 (B) in subsection (j), by striking out ‘‘in21 struct the Secretary of the military department

22 concerned to’’.

23 (3) Section 2307 is amended—

24 (A) in subsection (g), by striking out ‘‘Sec25 retary of the Navy’’ each place it appears and
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1 inserting in lieu thereof ‘‘Secretary of Defense’’;

2 and

3 (B) in subsection (h)(7), by striking out

4 the second sentence.

5 (4) Section 2311 is amended in subsection

6 (a)—

7 (A) by inserting ‘‘(1)’’ after ‘‘IN GEN8 ERAL.—’’; and

9 (B) by adding at the end the following new

10 paragraph:

11 ‘‘(2) The Secretary of Defense may delegate any au12 thority of the Secretary under this chapter only to—

13 ‘‘(A) the Deputy Secretary of Defense, who may

14 successively delegate such authority only to the

15 Under Secretary of Defense for Acquisition and

16 Technology;

17 ‘‘(B) the Under Secretary of Defense for Acqui18 sition and Technology; or

19 ‘‘(C) any acquisition program executive officer

20 or acquisition program manager of the Defense Re21 search, Development, and Acquisition Agency.’’.

22 (5) Section 2318(a) is amended by striking out

23 ‘‘Defense Logistics Agency’’ each place it appears

24 and inserting in lieu thereof ‘‘Defense Research, De25 velopment, and Acquisition Agency’’.
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1 (6) Section 2320(b) is amended—

2 (A) in the matter above paragraph (1), by

3 striking out ‘‘an agency named in section 2303

4 of this title’’ and inserting in lieu thereof ‘‘the

5 Department of Defense’’; and

6 (B) in paragraph (9), by striking out ‘‘the

7 head of the agency to withhold’’ and inserting

8 in lieu thereof ‘‘the withholding of’’.

9 (7) Section 2323(e)(1)(A)(iii) is amended by

10 striking out ‘‘military departments, Defense Agen11 cies,’’ and inserting in lieu thereof ‘‘Department of

12 Defense’’.

13 (8) Section 2324 is amended—

14 (A) in subsection (e)(3)(A), by striking out

15 the matter above clause (i) and inserting in lieu

16 thereof the following:

17 ‘‘(A) Pursuant to regulations prescribed by the Sec18 retary of Defense and subject to the availability of appro19 priations, the Secretary may waive the application of the

20 provisions of subparagraphs (M) and (N) of paragraph (1)

21 to a covered contract (other than a contract to which para22 graph (2) applies) if the Secretary determines that—’’;

23 (B) in subsection (h)(2), by striking out

24 ‘‘or the Secretary of the military department

25 concerned’’;
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1 (C) in subsection (k)(4)—

2 (i) by striking out ‘‘or Secretary of

3 the military department concerned’’;

4 (ii) by striking out ‘‘or Secretary de5 termines’’ and inserting in lieu thereof

6 ‘‘determines’’; and

7 (iii) by striking out ‘‘or military de8 partment’’; and

9 (D) by striking out subsection (l) and in10 serting in lieu thereof the following:

11 ‘‘(l) COVERED CONTRACT DEFINED.—(1) In this sec12 tion, the term ‘covered contract’ means a contract for an

13 amount in excess of $500,000 that is entered into by the

14 head of an agency, except that such term does not include

15 a fixed-price contract without cost incentives or any firm

16 fixed-price contract for the purchase of commercial items.

17 ‘‘(2) Effective on October 1 of each year that is divis18 ible by five, the amount set forth in paragraph (1) shall

19 be adjusted to the equivalent amount in constant fiscal

20 year 1994 dollars. An amount, as so adjusted, that is not

21 evenly divisible by $50,000 shall be rounded to the nearest

22 multiple of $50,000. In the case of an amount that is even23 ly divisible by $25,000 but is not evenly divisible by

24 $50,000, the amount shall be rounded to the next higher

25 multiple of $50,000.’’.
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1 (9) Section 2326 is amended—

2 (A) by striking out ‘‘head of an agency’’

3 each place it appears and inserting in lieu

4 thereof ‘‘Secretary of Defense’’;

5 (B) by striking out ‘‘head of the agency’’

6 each place it appears and inserting in lieu

7 thereof ‘‘Secretary of Defense’’;

8 (C) in subsection (a), by striking out ‘‘mili9 tary department concerned’’ and inserting in

10 lieu thereof ‘‘Department of Defense’’; and

11 (D) in subsection (b)(4), by striking out

12 ‘‘of that agency if such’’ and inserting in lieu

13 thereof ‘‘of the Department of Defense if the’’.

14 (10) Section 2327 is amended—

15 (A) in subsection (a), by striking out ‘‘The

16 head of an agency’’ and inserting in lieu thereof

17 ‘‘The Secretary of Defense’’;

18 (B) in subsection (b), by striking out ‘‘the

19 head of an agency’’ and inserting in lieu thereof

20 ‘‘the Secretary of Defense’’;

21 (C) in subsection (c)(1)—

22 (i) by striking out ‘‘the head of an

23 agency’’ each place it appears and insert24 ing in lieu thereof ‘‘the Secretary’’; and
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1 (ii) by striking out ‘‘such head of an

2 agency’’ each place it appears and insert3 ing in lieu thereof ‘‘the Secretary’’;

4 (D) in subsection (c)(2), by striking out

5 ‘‘Upon the request of the head of an agency,

6 the’’ and inserting in lieu thereof ‘‘The’’; and

7 (E) in subsection (d)—

8 (i) by striking out ‘‘(1)’’; and

9 (ii) by striking out paragraph (2).

10 SEC. 224. RESEARCH AND DEVELOPMENT.

11 Chapter 139 of title 10, United States Code, is

12 amended as follows:

13 (1) Section 2352(a) is amended in the matter

14 above paragraph (1)—

15 (A) by striking out ‘‘The Secretary of a

16 military department’’ and inserting in lieu

17 thereof ‘‘The Secretary of Defense’’; and

18 (B) by striking out ‘‘that military depart19 ment’’ and inserting in lieu thereof ‘‘the De20 partment of Defense’’.

21 (2) Section 2353 is amended—

22 (A) in the first sentence of subsection

23 (a)—

24 (i) by striking out ‘‘contract of a mili25 tary department’’ and inserting in lieu
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1 thereof ‘‘Department of Defense contract’’;

2 and

3 (ii) by striking out ‘‘the Secretary of

4 the military department concerned’’ and

5 inserting in lieu thereof ‘‘the Secretary of

6 Defense’’; and

7 (B) in subsection (b)(3), by striking out

8 ‘‘the Secretary concerned’’ and inserting in lieu

9 thereof ‘‘the Secretary of Defense’’.

10 (3) Section 2354 is amended—

11 (A) in subsection (a), by striking out ‘‘the

12 Secretary of the military department concerned,

13 any contract of a military department’’ and in14 serting in lieu thereof ‘‘the Secretary of De15 fense, any contract of the Department of De16 fense’’;

17 (B) in subsection (c)—

18 (i) by striking out ‘‘the Secretary of

19 the department concerned’’ and inserting

20 in lieu thereof ‘‘the Secretary of Defense’’;

21 and

22 (ii) by striking out ‘‘of his depart23 ment’’; and
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1 (C) in subsection (d), by striking out ‘‘the

2 Secretary concerned’’ and inserting in lieu

3 thereof ‘‘the Secretary of Defense’’.

4 (4) Section 2356(a) is amended to read as

5 follows:

6 ‘‘(a)(1) Except as provided in paragraph (2), the Sec7 retary of Defense may delegate any authority under sec8 tion 1584, 2353, 2354, or 2358 of this title to—

9 ‘‘(A) the Deputy Secretary of Defense, who may

10 successively delegate such authority only to the

11 Under Secretary of Defense for Acquisition and

12 Technology;

13 ‘‘(B) the Under Secretary of Defense for Acqui14 sition and Technology; or

15 ‘‘(C) any employee of the Defense Research,

16 Development, and Acquisition Agency.

17 ‘‘(2) The authority of the Secretary under section

18 2353(b)(3) of this title may not be delegated to a person

19 described in paragraph (1)(C).’’.

20 (5) Section 2358 is amended—

21 (A) by striking out ‘‘or the Secretary of a

22 military department’’ in subsections (a) and

23 (b);
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1 (B) in subsection (a)(1), by striking out

2 ‘‘such Secretary’s department’’ and inserting in

3 lieu thereof ‘‘the Department of Defense’’; and

4 (C) in subsection (c)—

5 (i) by striking out ‘‘or the Secretary

6 of that military department, respectively,’’;

7 and

8 (ii) by striking out ‘‘or to such mili9 tary department, respectively’’.

10 (6) Section 2367(c) is amended to read as fol11 lows:

12 ‘‘(c) Funds appropriated to the Department of De13 fense may not be obligated or expended for purposes of

14 operating a federally funded research center that was not

15 in existence before June 2, 1986, until—

16 ‘‘(1) the Secretary of Defense submits to Con17 gress a report with respect to such center that de18 scribes the purpose, mission, and general scope of ef19 fort of the center; and

20 ‘‘(2) 60 days elapse after the date on which

21 such report is received by Congress.’’.

22 (7) Section 2371 is amended—

23 (A) in subsection (a), by striking out ‘‘and

24 the Secretary of each military department;’’;

25 and
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1 (B) by striking out subsection (b);

2 (C) in subsection (f), by striking out

3 ‘‘There is hereby established on the books of

4 the Treasury separate accounts for each of the

5 military departments and the Advanced Re6 search Projects Agency’’ and inserting in lieu

7 thereof the following: ‘‘The Secretary of the

8 Treasury, after consultation with the Secretary

9 of Defense, shall establish on the books of the

10 Treasury one or more separate accounts for the

11 Department of Defense’’; and

12 (D) in subsection (i), by striking out ‘‘in

13 carrying out advanced research projects

14 through the Advanced Research Projects Agen15 cy, and the Secretary of each military depart16 ment,’’.

17 (8) Section 2373(a) is amended—

18 (A) by striking out ‘‘and the Secretaries of

19 the military departments may each’’ and insert20 ing in lieu thereof ‘‘may’’; and

21 (B) by striking out ‘‘or the Secretary con22 cerned’’.

23 SEC. 225. MISCELLANEOUS PROCUREMENT PROVISIONS.

24 (a) CHAPTER 141.—Chapter 141 of title 10, United

25 States Code, is amended as follows:
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1 (1) Section 2381(b) is amended—

2 (A) in the matter above paragraph (1), by

3 striking out ‘‘the Secretary concerned’’ and in4 serting in lieu thereof ‘‘the Secretary of De5 fense’’; and

6 (B) in paragraph (2), by striking out

7 ‘‘military department concerned’’ and inserting

8 in lieu thereof ‘‘Department of Defense’’.

9 (2) Section 2385 is amended by striking out ‘‘a

10 military department’’ and inserting in lieu thereof

11 ‘‘the Department of Defense’’.

12 (3) Section 2386 is amended by striking out ‘‘a

13 military department’’ and inserting in lieu thereof

14 ‘‘the Department of Defense’’.

15 (4) Section 2388(a) is amended by striking out

16 ‘‘and the Secretary of a military department may

17 each’’ and inserting in lieu thereof ‘‘may’’.

18 (5) Section 2393 is amended—

19 (A) in subsection (a)—

20 (i) by striking out ‘‘the Secretary of a

21 military department’’ in paragraph (1) and

22 inserting in lieu thereof ‘‘the Secretary of

23 Defense’’; and

24 (ii) by striking out ‘‘the Secretary

25 concerned’’ in paragraph (2) and inserting
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1 in lieu thereof ‘‘the Secretary of Defense’’;

2 and

3 (B) in subsection (b), by striking out ‘‘the

4 Secretary concerned’’ and inserting in lieu

5 thereof ‘‘the Secretary of Defense’’.

6 (6) Section 2394 is amended—

7 (A) in subsection (a), by striking out ‘‘the

8 Secretary of a military department’’ and insert9 ing in lieu thereof ‘‘the Secretary of Defense’’;

10 (B) by striking out subsection (b); and

11 (C) by redesignating subsection (c) as sub12 section (b).

13 (7) Section 2394a is amended—

14 (A) in subsection (a)—

15 (i) by striking out ‘‘Secretary of a

16 military department’’ and inserting in lieu

17 thereof ‘‘Secretary of Defense’’; and

18 (ii) by striking out ‘‘military depart19 ment under his jurisdiction’’ and inserting

20 in lieu thereof ‘‘Department of Defense’’;

21 and

22 (B) in subsection (b), by striking out the

23 second sentence.

24 (8) Section 2401(a) is amended by striking out

25 ‘‘The Secretary of a military department’’ both
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1 places it appears and inserting in lieu thereof ‘‘The

2 Secretary of Defense’’.

3 (9) Section 2104a is amended by striking out

4 ‘‘or the Secretary of a military department’’.

5 (10) Section 2403 is amended—

6 (A) in subsection (a), by striking out para7 graph (8);

8 (B) in subsection (b), by striking out ‘‘the

9 head of an agency’’ in the matter above para10 graph (1) and inserting in lieu thereof ‘‘the

11 Secretary of Defense’’;

12 (C) in subsections (c), (f), and (g), by

13 striking out ‘‘head of the agency concerned’’

14 each place it appears and inserting in lieu

15 thereof ‘‘Secretary of Defense’’;

16 (D) in subsection (d)—

17 (i) by inserting ‘‘(1)’’ after the sub18 section designation;

19 (ii) by redesignating paragraphs (1)

20 and (2) as subparagraphs (A) and (B),

21 respectively;

22 (iii) by striking out the second sen23 tence; and

24 (iv) by adding at the end the following

25 new paragraph:
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1 ‘‘(2) The Secretary may delegate authority under this

2 subsection only to the Under Secretary of Defense for Ac3 quisition and Technology.’’; and

4 (E) in subsection (h), by striking out para5 graph (3).

6 (11) Section 2405(a) is amended by striking

7 out ‘‘The Secretary of a military department’’ and

8 inserting in lieu thereof ‘‘The Secretary of Defense.’’

9 (12) Section 2410c(a) of title 10, United States

10 Code, is amended by striking out ‘‘Secretary of a

11 military department or the head of a Defense Agen12 cy, as the case may be,’’ and inserting in lieu thereof

13 ‘‘Secretary of Defense’’.

14 (13) Section 2410d(a) is amended by striking

15 out ‘‘a military department or a Defense Agency’’

16 and inserting in lieu thereof ‘‘the Department of De17 fense’’.

18 (14) Section 2410g(b) is amended by striking

19 out ‘‘notification—’’ and all that follows through

20 ‘‘any other Department of Defense contract, to’’ and

21 insert in lieu thereof ‘‘notification to’’.

22 (b) CHAPTER 142.—Chapter 142 of title 10, United

23 States Code, is amended as follows:

24 (1) Section 2411(3) is amended by striking out

25 ‘‘Director of the Defense Logistics Agency’’ and in-
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1 serting in lieu thereof ‘‘Under Secretary of Defense

2 for Acquisition and Technology’’.

3 (2) Section 2417 is amended by striking out

4 ‘‘Director of the Defense Logistics Agency’’ and in5 serting in lieu thereof ‘‘Under Secretary of Defense

6 for Acquisition and Technology’’.

7 SEC. 226. MAJOR DEFENSE ACQUISITION PROGRAMS.

8 Chapter 144 of title 10, United States Code, is

9 amended as follows:

10 (1) Section 2432(c)(3)(A) is amended by strik11 ing out ‘‘The Secretary of Defense’’ and all that fol12 lows.

13 (2) Section 2433 is amended—

14 (A) by striking out ‘‘service acquisition ex15 ecutive designated by the Secretary concerned’’

16 each place it appears and inserting in lieu

17 thereof ‘‘Under Secretary of Defense for Acqui18 sition and Technology’’;

19 (B) in subsection (c), by striking out ‘‘such

20 service acquisition executive’’ in the matter fol21 lowing paragraph (3) and inserting in lieu

22 thereof ‘‘the Under Secretary of Defense for

23 Acquisition and Technology’’;

24 (C) in subsection (d)—
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1 (i) by striking out ‘‘the service acqui2 sition executive’’ in paragraphs (1) and (2)

3 and inserting in lieu thereof ‘‘the Under

4 Secretary’’; and

5 (ii) in paragraph (3), by striking out

6 ‘‘If, based upon the service acquisition ex7 ecutive’s determination, the Secretary con8 cerned’’ and inserting in lieu thereof ‘‘If

9 the Under Secretary of Defense for Acqui10 sition and Technology’’; and

11 (D) in subsection (e)—

12 (i) in paragraph (1)(A), by striking

13 out ‘‘Secretary concerned’’ and inserting in

14 lieu thereof ‘‘Under Secretary of Defense

15 for Acquisition and Technology’’;

16 (ii) in paragraph (1)(B), by striking

17 out ‘‘Secretary’’ both places it appears and

18 inserting in lieu thereof ‘‘Under Sec19 retary’’;

20 (iii) in paragraph (2), by striking out

21 ‘‘(as determined by the Secretary’’ in the

22 matter above subparagraph (A) and insert23 ing in lieu thereof ‘‘(as determined by the

24 Under Secretary’’; and
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1 (iv) in paragraph (3), by striking out

2 ‘‘by the Secretary’’ both places it appears

3 in the first sentence and inserting in lieu

4 thereof ‘‘by the Under Secretary’’.

5 (3) Section 2434(b)(1)(A) is amended by strik6 ing out ‘‘under the supervision,’’ and all that follows

7 and inserting in lieu thereof ‘‘in the Department of

8 Defense.’’.

9 (4) Section 2435 is amended—

10 (A) in subsection (a)(1), by striking out

11 ‘‘Secretary of a military department’’ and in12 serting in lieu thereof ‘‘Under Secretary of De13 fense for Acquisition and Technology’’; and

14 (B) in subsection (d)(2), by striking out

15 ‘‘the Secretary of the military department con16 cerned and’’.

17 SEC. 227. SERVICE SPECIFIC ACQUISITION AUTHORITY.

18 (a) ARMY.—Part IV of subtitle B of title 10, United

19 States Code, is amended by striking out ‘‘Secretary of the

20 Army’’ in sections 4540(a) and 4542 (each place it ap21 pears) and inserting in lieu thereof ‘‘Secretary of De22 fense’’.

23 (b) NAVY.—Part IV of subtitle C of such title is

24 amended as follows:
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1 (1) The following sections are amended by

2 striking out ‘‘Secretary of the Navy’’ and inserting

3 in lieu thereof ‘‘Secretary of Defense’’: sections

4 7212(a), 7229, 7299a (each place it appears),

5 7309(c), 7310(b) (both places it appears), 7311(a)

6 (in the matter before paragraph (1)), 7311(b) (in

7 the matter before paragraph (1)), 7314, and 7361

8 (each place it appears) .

9 (2) Section 7314(1)(B) is amended by striking

10 out ‘‘Navy supply system’’ each place it appears and

11 inserting in lieu thereof ‘‘Department of Defense

12 supply system’’.

13 (3) Section 7522 is amended by striking out

14 ‘‘Secretary of the Navy’’ and all that follows through

15 ‘‘chiefs of bureaus’’ and inserting in lieu thereof

16 ‘‘Secretary of Defense’’.

17 (c) AIR FORCE.—Part IV of subtitle D of such title

18 is amended as follows:

19 (1) Sections 9511(10) and 9540(a) are amend20 ed by striking out ‘‘Secretary of the Air Force’’ and

21 inserting in lieu thereof ‘‘Secretary of Defense’’.

22 (2) Section 9513(a) is amended—

23 (A) in paragraph (1), by striking out ‘‘Sec24 retary of the Air Force—’’ and all that follows

25 and inserting in lieu thereof the following: ‘‘Sec-
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1 retary, in consultation with the Secretary of the

2 military department concerned, may, by con3 tract entered into with a contractor, authorize

4 such contractor to use one or more Department

5 of Defense installations designated by the Sec6 retary of Defense.’’; and

7 (B) in paragraph (2), by striking out ‘‘of

8 the Air Force’’.

9 SEC. 228. OTHER LAWS.

10 In any other provision of law providing authority for

11 the Secretary of a military department or the head of a

12 Defense Agency of the Department of Defense to perform

13 a research, development, or acquisition function of the De14 partment of Defense, the reference to that official shall

15 be deemed to refer to the Secretary of Defense. That func16 tion shall be performed as provided in section 133(b) of

17 title 10, United States Code (as amended by section

18 201(a)), and section 232 of such title (as added by section

19 201(b)).

20 Subtitle D—Effective Date

21 SEC. 231. EFFECTIVE DATE.

22 This title and the amendments made by this title

23 shall take effect on the date that is one year after the

24 date of the enactment of this Act.
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1 TITLE III—DEPOT-LEVEL

2 MAINTENANCE

3 SEC. 301. ELIMINATION OF 60 / 40 RULE FOR PUBLIC / PRI4 VATE DIVISION OF DEPOT-LEVEL MAINTE5 NANCE WORKLOAD.

6 (a) ELIMINATION OF RULE.—Section 2466 of title

7 10, United States Code, is amended—

8 (1) by striking out subsections (a), (c), (d), and

9 (e); and

10 (2) by striking out ‘‘(b) PROHIBITION ON MAN11 AGEMENT BY END STRENGTH.—’’.

12 (b) CONFORMING AMENDMENTS.—(1) The heading

13 of such section is amended to read as follows:

14 ‘‘§ 2466. Civilian employees involved in depot-level

15 maintenance and repair of materiel: pro16 hibition on management by end

17 strength’’.

18 (2) The item relating to such section in the table of

19 sections at the beginning of chapter 146 of such title is

20 amended to read as follows:

‘‘2466. Civilian employees involved in depot-level maintenance and repair of materiel: prohibition on management by end strength.’’.
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1 SEC. 302. PRESERVATION OF CORE MAINTENANCE AND RE2 PAIR CAPABILITY.

3 (a) IN GENERAL.—(1) Chapter 146 of title 10, Unit4 ed States Code, is amended by adding at the end the fol5 lowing new section:

6 ‘‘§ 2472. Core maintenance and repair capability:

7 preservation

8 ‘‘(a) NECESSITY FOR CORE MAINTENANCE AND RE9 PAIR CAPABILITIES.—It is essential for the national de10 fense that the Department of Defense preserve an organic

11 maintenance and repair capability (including personnel,

12 equipment, and facilities) to meet readiness and sustain13 ability requirements established by the Chairman of the

14 Joint Chiefs of Staff for the systems and equipment re15 quired for contingency plans approved by the Chairman

16 of the Joint Chiefs of Staff under section 153(a)(3) of

17 this title.

18 ‘‘(b) IDENTIFICATION OF CORE MAINTENANCE AND

19 REPAIR CAPABILITIES.—The Secretary of Defense shall

20 identify those maintenance and repair activities of the De21 partment of Defense that are necessary to preserve the

22 maintenance and repair capability described in subsection

23 (a). The Secretary may identify for such purpose only

24 those activities of the Department of Defense that are nec25 essary to ensure a ready and controlled source of technical

26 competence for that purpose. The Secretary may not iden-
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1 tify for such purpose any intermediate-level or depot-level

2 maintenance or repair activity.

3 ‘‘(c) LIMITATION ON CONTRACTING.—The Secretary

4 may not contract for the performance by non-Government

5 personnel of a maintenance activity identified by the Sec6 retary under subsection (b) under the procedures and re7 quirements of Office of Management and Budget Circular

8 A–76 or any successor administrative regulation or policy

9 unless the Secretary of Defense determines (under regula10 tions prescribed by the Secretary) that Government per11 formance of the activity is no longer required for national

12 defense reasons.

13 ‘‘(d) CONTRACTING FOR PERFORMANCE OF NON14 CORE FUNCTIONS.—In the case of any maintenance or

15 repair activity (including the making of major modifica16 tions and upgrades) that is not identified by the Secretary

17 under subsection (b), the Secretary concerned shall pro18 vide for the performance of that activity by an entity in

19 the private sector, selected through the use of competitive

20 procedures, unless the Secretary determines that the per21 formance of that activity by a Government entity is nec22 essary to maintain the defense industrial base.’’.

23 (2) The table of sections at the beginning of such

24 chapter is amended by adding at the end the following

25 new item:

‘‘2472. Core maintenance and repair capability: preservation.’’.
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1 (b) REVISION OF REGULATIONS.—The Secretary of

2 Defense shall revise the existing Department of Defense

3 regulations relating to depot level maintenance and repair

4 activities in order to ensure the consistency of those regu5 lations with the policy provided in section 2472(d) of title

6 10, United States Code, as added by subsection (a).

7 SEC. 303. PERFORMANCE OF DEPOT-LEVEL MAINTENANCE

8 WORKLOAD BY PRIVATE SECTOR WHENEVER

9 POSSIBLE.

10 (a) REQUIREMENT.—Section 2469 of title 10, United

11 States Code, is amended to read as follows:

12 ‘‘§ 2469. Depot-level maintenance and repair activi13 ties: use of private sector

14 ‘‘(a) IN GENERAL.—The Secretary of Defense shall

15 (except as provided in subsection (b)) provide for the per16 formance by private sector entities of all depot-level main17 tenance and all depot-level repair work of the Department

18 of Defense.

19 ‘‘(b) EXCEPTION.—The Secretary may provide for

20 the performance of a particular depot-level maintenance

21 workload, or a particular depot-level repair workload, by

22 an entity of the Department of Defense if—

23 ‘‘(1) no responsive bids for performance of that

24 workload are received from responsible offerors; or
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1 ‘‘(2) the Secretary makes a determination that

2 subsection (a) must be waived for that particular

3 workload for reasons of national security.’’.

4 (b) CLERICAL AMENDMENT.—The item relating to

5 section 2469 in the table of sections at the beginning of

6 chapter 146 of such title is amended to read as follows:

‘‘2469. Depot-level maintenance and repair activities: use of private sector.’’.

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