111TH CONGRESS 

2D SESSION H. R. 5013 

AN ACT 

To amend title 10, United States Code, to provide for performance management of the defense acquisition system, 

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, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Implementing Manage3 ment for Performance and Related Reforms to Obtain 

4 Value in Every Acquisition Act of 2010’’. 

5 SEC. 2. DEFINITION OF CONGRESSIONAL DEFENSE COM6 MITTEES. 

7 In this Act, the term ‘‘congressional defense commit8 tees’’ has the meaning given that term in section 

9 101(a)(16) of title 10, United States Code. 

10 SEC. 3. TABLE OF CONTENTS. 

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

Sec. 1. Short title. 

Sec. 2. Definition of congressional defense committees. 

Sec. 3. Table of contents. 

TITLE I—DEFENSE ACQUISITION SYSTEM 

Sec. 101. Performance management of the defense acquisition system. 

Sec. 102. Meaningful consideration by Joint Requirements Oversight Council of 

input from certain officials. 

Sec. 103. Performance management for the Joint Capabilities Integration and 

Development System. 

Sec. 104. Requirements for the acquisition of services. 

Sec. 105. Joint evaluation task forces. 

Sec. 106. Review of defense acquisition guidance. 

Sec. 107. Requirement to include references to services acquisition throughout 

the Federal Acquisition Regulation. 

Sec. 108. Procurement of military purpose nondevelopmental items. 

TITLE II—DEFENSE ACQUISITION WORKFORCE 

Sec. 201. Acquisition workforce excellence. 

Sec. 202. Amendments to the acquisition workforce demonstration project. 

Sec. 203. Incentive programs for civilian and military personnel in the acquisition workforce. 

Sec. 204. Career development for civilian and military personnel in the acquisition workforce. 

Sec. 205. Recertification and training requirements. 

Sec. 206. Information technology acquisition workforce. 

Sec. 207. Definition of acquisition workforce. 

Sec. 208. Defense Acquisition University curriculum review. 

Sec. 209. Cost estimating internship and scholarship programs. 

Sec. 210. Prohibition on personal services contracts for senior mentors. 
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TITLE III—FINANCIAL MANAGEMENT 

Sec. 301. Incentives for achieving auditability. 

Sec. 302. Measures required after failure to achieve auditability. 

Sec. 303. Review of obligation and expenditure thresholds. 

Sec. 304. Disclosure and traceability of the cost of Department of Defense 

health care contracts. 

TITLE IV—INDUSTRIAL BASE 

Sec. 401. Expansion of the industrial base. 

Sec. 402. Commercial pricing analysis. 

Sec. 403. Contractor and grantee disclosure of delinquent Federal tax debts. 

Sec. 404. Independence of contract audits and business system reviews. 

Sec. 405. Blue ribbon panel on eliminating barriers to contracting with the Department of Defense. 

Sec. 406. Inclusion of the providers of services and information technology in 

the national technology and industrial base. 

Sec. 407. Construction of Act on competition requirements for the acquisition 

of services. 

Sec. 408. Acquisition Savings Program. 

Sec. 409. Sense of Congress regarding compliance with the Berry Amendment, 

the Buy American Act, and labor standards of the United 

States. 

Sec. 410. Industrial Base Council and Fund. 

TITLE V—OTHER MATTERS 

Sec. 501. Clothing allowance requirement. 

Sec. 502. Requirement that cost or price to the Federal Government be given 

at least equal importance as technical or other criteria in evaluating competitive proposals for defense contracts. 

1 TITLE I—DEFENSE ACQUISITION 

2 SYSTEM 

3 SEC. 101. PERFORMANCE MANAGEMENT OF THE DEFENSE 

4 ACQUISITION SYSTEM. 

5 (a) PERFORMANCE MANAGEMENT OF THE DEFENSE

6 ACQUISITION SYSTEM.— 

7 (1) IN GENERAL.—Part IV of title 10, United 

8 States Code, is amended by inserting after chapter 

9 148 the following new chapter: 
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1 ‘‘CHAPTER 149—PERFORMANCE MANAGE2 MENT OF THE DEFENSE ACQUISITION 

3 SYSTEM 

‘‘Sec. 

‘‘2545. Performance assessments of the defense acquisition system. 

‘‘2546. Audits of performance assessments. 

‘‘2547. Use of performance assessments for managing performance. 

‘‘2548. Acquisition-related functions of the Chiefs of Staff of the armed forces. 

4 ‘‘§ 2545. Performance assessments of the defense ac5 quisition system 

6 ‘‘(a) PERFORMANCE ASSESSMENTS REQUIRED.—(1) 

7 The Secretary of Defense shall ensure that all elements 

8 of the defense acquisition system are subject to regular 

9 performance assessments— 

10 ‘‘(A) to determine the extent to which such ele11 ments deliver appropriate value to the Department 

12 of Defense; and 

13 ‘‘(B) to enable senior officials of the Depart14 ment of Defense to manage the elements of the de15 fense acquisition system to maximize their value to 

16 the Department. 

17 ‘‘(2) The performance of each element of the defense 

18 acquisition system shall be assessed as needed, but not 

19 less often than annually. 

20 ‘‘(3) The Secretary shall ensure that the performance 

21 assessments required by this subsection are appropriately 

22 tailored to reflect the diverse nature of defense acquisition 

23 so that the performance assessment of each element of the 
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1 defense acquisition system accurately reflects the work 

2 performed by such element. 

3 ‘‘(b) SYSTEMWIDE CATEGORIES.—(1) The Secretary 

4 of Defense shall establish categories of metrics for the de5 fense acquisition system, including, at a minimum, cat6 egories relating to cost, quality, delivery, workforce, and 

7 policy implementation that apply to all elements of the de8 fense acquisition system. 

9 ‘‘(2) The Secretary of Defense shall issue guidance 

10 for service acquisition executives within the Department 

11 of Defense on the establishment of metrics, and goals and 

12 standards relating to such metrics, within the categories 

13 established by the Secretary under paragraph (1) to en14 sure that there is sufficient uniformity in performance as15 sessments across the defense acquisition system so that 

16 elements of the defense acquisition system can be mean17 ingfully compared. 

18 ‘‘(c) METRICS, GOALS, AND STANDARDS.—(1) Each 

19 service acquisition executive of the Department of Defense 

20 shall establish metrics to be used in the performance as21 sessments required by subsection (a) for each element of 

22 the defense acquisition system for which such executive 

23 is responsible within the categories established by the Sec24 retary under subsection (b). Such metrics shall be appro-
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1 priately tailored pursuant to subsection (a)(3) and may 

2 include measures of— 

3 ‘‘(A) cost, quality, and delivery; 

4 ‘‘(B) contractor performance, including compli5 ance with the Department of Defense policy regard6 ing the participation of small business concerns 

7 owned and controlled by socially and economically 

8 disadvantaged individuals, veteran-owned small busi9 nesses, service-disabled, veteran-owned small busi10 nesses, and women-owned small businesses; 

11 ‘‘(C) excessive use of contract bundling and 

12 availability of non-bundled contract vehicles; 

13 ‘‘(D) workforce quality and program manager 

14 tenure (where applicable); 

15 ‘‘(E) the quality of market research; 

16 ‘‘(F) appropriate use of integrated testing; 

17 ‘‘(G) appropriate consideration of long-term 

18 sustainment and energy efficiency; and 

19 ‘‘(H) appropriate acquisition of technical data 

20 and other rights and assets necessary to support 

21 long-term sustainment. 

22 ‘‘(2) Each service acquisition executive within the De23 partment of Defense shall establish goals and standards 

24 (including, at a minimum, a threshold standard and an 

25 objective goal) for each metric established under para-
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1 graph (1) by the executive. In establishing the goals and 

2 standards for an element of the defense acquisition sys3 tem, a service acquisition executive shall consult with the 

4 head of the element to the maximum extent practicable, 

5 but the service acquisition executive shall retain the final 

6 authority to determine the goals and standards estab7 lished. The service acquisition executive shall update the 

8 goals and standards as necessary and appropriate con9 sistent with the guidance issued under subsection (b)(2). 

10 ‘‘(3) The Under Secretary of Defense for Acquisition, 

11 Technology, and Logistics shall periodically review the 

12 metrics, goals, and standards established by service acqui13 sition executives under this subsection to ensure that they 

14 are consistent with the guidance issued under subsection 

15 (b)(2). 

16 ‘‘(d) RESPONSIBILITY FOR OVERSIGHT AND DIREC17 TION OF PERFORMANCE ASSESSMENTS.—(1) Perform18 ance assessments required by subsection (a) shall either 

19 be carried out by, or shall be subject to the oversight of, 

20 the Director of the Office of Performance Assessment and 

21 Root Cause Analysis. The authority and responsibility 

22 granted by this subsection is in addition to any other au23 thority or responsibility granted to the Director of the Of24 fice of Performance Assessment and Root Cause Analysis 

25 by the Secretary of Defense or by any other provision of 
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1 law. In the performance of duties pursuant to this section, 

2 the Director of the Office of Performance Assessment and 

3 Root Cause Analysis shall coordinate with the Deputy 

4 Chief Management Officer to ensure that performance as5 sessments carried out pursuant to this section are con6 sistent with the performance management initiatives of 

7 the Department of Defense. 

8 ‘‘(2) A performance assessment may be carried out 

9 by an organization under the control of the service acquisi10 tion executive of a military department if— 

11 ‘‘(A) the assessment fulfills the requirements of 

12 subsection (a); 

13 ‘‘(B) the organization is approved to carry out 

14 the assessment by the Director of the Office of Per15 formance Assessment and Root Cause Analysis; and 

16 ‘‘(C) the assessment is subject to the oversight 

17 of the Director of the Office of Performance Assess18 ment and Root Cause Analysis in accordance with 

19 paragraph (1). 

20 ‘‘(e) RETENTION AND ACCESS TO RECORDS OF PER21 FORMANCE ASSESSMENTS WITHIN THE MILITARY DE22 PARTMENTS AND DEFENSE AGENCIES.—The Secretary of 

23 Defense shall ensure that information from performance 

24 assessments of all elements of the defense acquisition sys25 tem are retained electronically and that the Director of 
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1 the Office of Performance Assessment and Root Cause 

2 Analysis— 

3 ‘‘(1) promptly receives the results of all per4 formance assessments conducted by an organization 

5 under the control of the service acquisition executive 

6 of a military department; and 

7 ‘‘(2) has timely access to any records and data 

8 in the Department of Defense (including the records 

9 and data of each military department and Defense 

10 Agency and including classified and proprietary in11 formation) that the Director considers necessary to 

12 review in order to perform or oversee performance 

13 assessments pursuant to this section. 

14 ‘‘(f) INCLUSION IN ANNUAL REPORT.—The Director 

15 of the Office of Performance Assessment and Root Cause 

16 Analysis shall include information on the activities under17 taken by the Director under this section in the annual re18 port of the Director required under section 103(f) of the 

19 Weapon Systems Acquisition Reform Act of 2009 (Public 

20 Law 111–23; 123 Stat. 1716), including information on 

21 any performance assessment required by subsection (a) 

22 with significant findings. In addition, if a performance as23 sessment uncovers particularly egregious problems, as 

24 identified by the Director, the Director shall submit to the 

25 Committees on Armed Services of the Senate and the 
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1 House of Representatives a report on such problems with2 in 30 days after the problems are identified. 

3 ‘‘(g) DEFINITIONS.—In this section: 

4 ‘‘(1) The term ‘defense acquisition system’ 

5 means the acquisition workforce; the process by 

6 which the Department of Defense manages the ac7 quisition of goods and services, including weapon 

8 systems, commodities, commercial and military 

9 unique services, and information technology; and the 

10 management structure for carrying out the acquisi11 tion function within the Department of Defense. 

12 ‘‘(2) The term ‘element of the defense acquisi13 tion system’ means an organization that operates 

14 within the defense acquisition system and that fo15 cuses primarily on acquisition. 

16 ‘‘(3) The term ‘metric’ means a specific meas17 ure that serves as a basis for comparison. 

18 ‘‘(4) The term ‘threshold performance standard’ 

19 means the minimum acceptable level of performance 

20 in relation to a metric. 

21 ‘‘(5) The term ‘objective performance goal’ 

22 means the most desired level of performance in rela23 tion to a metric. 

24 ‘‘(6) The term ‘Office of Performance Assess25 ment and Root Cause Analysis’ means the office re-
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1 porting to the senior official designated by the Sec2 retary of Defense under section 103(a) of the Weap3 on Systems Acquisition Reform Act of 2009 (Public 

4 Law 111–23, 10 U.S.C. 2430 note). 

5 ‘‘§ 2546. Audits of performance assessments 

6 ‘‘(a) AUDITS REQUIRED.—The Secretary of Defense 

7 shall ensure that the performance assessments of the de8 fense acquisition system required by section 2545 of this 

9 title are subject to periodic audits to determine the accu10 racy, reliability, and completeness of such assessments. 

11 ‘‘(b) STANDARDS AND APPROACH.—In performing 

12 the audits required by subsection (a), the Secretary shall 

13 ensure that such audits— 

14 ‘‘(1) comply with generally accepted government 

15 auditing standards issued by the Comptroller Gen16 eral; 

17 ‘‘(2) use a risk-based approach to audit plan18 ning; and 

19 ‘‘(3) appropriately account for issues associated 

20 with auditing assessments of activities occurring in 

21 a contingency operation. 

22 ‘‘§ 2547. Use of performance assessments for man23 aging performance 

24 ‘‘(a) IN GENERAL.—The Secretary of Defense shall 

25 ensure that the results of performance assessments are 
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1 used in the management of elements of the defense acqui2 sition system through direct linkages between the results 

3 of a performance assessment and the following: 

4 ‘‘(1) The size of the bonus pool available to the 

5 workforce of an element of the defense acquisition 

6 system. 

7 ‘‘(2) Rates of promotion in the workforce of an 

8 element of the defense acquisition system. 

9 ‘‘(3) Awards for acquisition excellence. 

10 ‘‘(4) The scope of work assigned to an element 

11 of the defense acquisition system. 

12 ‘‘(b) ADDITIONAL REQUIREMENTS.—The Secretary 

13 of Defense shall ensure that actions taken to manage the 

14 acquisition workforce pursuant to subsection (a) are un15 dertaken in accordance with the requirements of sub16 sections (c) and (d) of section 1701a of this title. 

17 ‘‘§ 2548. Acquisition-related functions of the Chiefs of 

18 Staff of the armed forces 

19 ‘‘(a) ASSISTANCE.—The Secretary of Defense shall 

20 ensure, notwithstanding section 3014(c)(1)(A), section 

21 5014(c)(1)(A), and section 8014(c)(1)(A) of this title, that 

22 the Chief of Staff of the Army, the Chief of Naval Oper23 ations, the Chief of Staff of the Air Force, and the Com24 mandant of the Marine Corps assist the Secretary of the 
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1 military department concerned in the performance of the 

2 following acquisition-related functions of such department: 

3 ‘‘(1) The development of requirements relating 

4 to the defense acquisition system. 

5 ‘‘(2) The development of measures to control 

6 requirements creep in the defense acquisition sys7 tem. 

8 ‘‘(3) The development of career paths in acqui9 sition for military personnel (as required by section 

10 1722a of this title). 

11 ‘‘(4) The assignment and training of con12 tracting officer representatives when such represent13 atives are required to be members of the armed 

14 forces because of the nature of the contract con15 cerned. 

16 ‘‘(b) DEFINITIONS.—In this section: 

17 ‘‘(1) The term ‘requirements creep’ means the 

18 addition of new technical or operational specifica19 tions after a requirements document is approved. 

20 ‘‘(2) The term ‘requirements document’ means 

21 a document produced in the requirements process 

22 that is provided for an acquisition program to guide 

23 the subsequent development, production, and testing 

24 of the program and that— 
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1 ‘‘(A) justifies the need for a materiel ap2 proach, or an approach that is a combination of 

3 materiel and non-materiel, to satisfy one or 

4 more specific capability gaps; 

5 ‘‘(B) details the information necessary to 

6 develop an increment of militarily useful, 

7 logistically supportable, and technically mature 

8 capability, including key performance param9 eters; or 

10 ‘‘(C) identifies production attributes re11 quired for a single increment of a program.’’. 

12 (2) CLERICAL AMENDMENTS.—The table of 

13 chapters at the beginning of subtitle A of title 10, 

14 United States Code, and at the beginning of part IV 

15 of such subtitle, are each amended by inserting after 

16 the item relating to chapter 148 the following new 

17 item: 

‘‘149. Performance Management of the Defense Acquisition System ...... 2545’’. 

18 (b) PHASED IMPLEMENTATION OF PERFORMANCE

19 ASSESSMENTS.—The Secretary of Defense shall imple20 ment the requirements of chapter 149 of title 10, United 

21 States Code, as added by subsection (a), in a phased man22 ner while guidance is issued, and categories, metrics, 

23 goals, and standards are established. Implementation shall 

24 begin with a cross section of elements of the defense acqui25 sition system representative of the entire system and shall 
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1 be completed for all elements not later than 2 years after 

2 the date of the enactment of this Act. 

3 SEC. 102. MEANINGFUL CONSIDERATION BY JOINT RE4 QUIREMENTS OVERSIGHT COUNCIL OF 

5 INPUT FROM CERTAIN OFFICIALS. 

6 (a) ADVISORS TO THE JOINT REQUIREMENTS OVER7 SIGHT COUNCIL.— 

8 (1) ADDITIONAL CIVILIAN ADVISORS.—Sub9 section (d)(1) of section 181 of title 10, United 

10 States Code, is amended by striking ‘‘The Under 

11 Secretary’’ and all that follows through ‘‘and exper12 tise.’’ and inserting the following: ‘‘The following of13 ficials of the Department of Defense shall serve as 

14 advisors to the Council on matters within their au15 thority and expertise: 

16 ‘‘(A) The Under Secretary of Defense for Ac17 quisition, Technology, and Logistics. 

18 ‘‘(B) The Under Secretary of Defense (Comp19 troller). 

20 ‘‘(C) The Under Secretary of Defense for Pol21 icy. 

22 ‘‘(D) The Director of Cost Assessment and Pro23 gram Evaluation.’’. 
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1 (2) ROLE OF COMBATANT COMMANDERS AS

2 MEMBERS OF THE JROC.—Paragraph (1) of sub3 section (c) of such section is amended— 

4 (A) by striking ‘‘and’’ at the end of sub5 paragraph (D); 

6 (B) by striking the period at the end of 

7 subparagraph (E) and inserting ‘‘; and’’; and 

8 (C) by adding at the end the following new 

9 subparagraph: 

10 ‘‘(F) when directed by the chairman, the 

11 commander of any combatant command (or, as 

12 directed by that commander, the deputy com13 mander of that command) when matters related 

14 to the area of responsibility or functions of that 

15 command will be under consideration by the 

16 Council.’’. 

17 (b) AMENDMENT RELATED TO REPORT.—Paragraph 

18 (2) of section 105(c) of the Weapon Systems Acquisition 

19 Reform Act of 2009 (Public Law 111–23; 123 Stat. 1718) 

20 is amended to read as follows: 

21 ‘‘(2) MATTERS COVERED.—The report shall in22 clude, at a minimum, an assessment of— 

23 ‘‘(A) the extent to which the Council has 

24 effectively sought, and the commanders of the 

25 combatant commands have provided, meaning-
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1 ful input on proposed joint military require2 ments; 

3 ‘‘(B) the extent to which the Council has 

4 meaningfully considered the input and expertise 

5 of the Under Secretary of Defense for Acquisi6 tion, Technology, and Logistics in its discus7 sions; 

8 ‘‘(C) the extent to which the Council has 

9 meaningfully considered the input and expertise 

10 of the Director of Cost Assessment and Pro11 gram Evaluation in its discussions; 

12 ‘‘(D) the quality and effectiveness of ef13 forts to estimate the level of resources needed 

14 to fulfill joint military requirements; and 

15 ‘‘(E) the extent to which the Council has 

16 considered trade-offs among cost, schedule, and 

17 performance objectives.’’. 

18 (c) ASSESSMENT OF INDEPENDENCE OF COST ESTI19 MATORS AND COST ANALYSTS REQUIRED IN NEXT AN20 NUAL REPORT ON COST ASSESSMENT ACTIVITIES.—In 

21 the next annual report prepared by the Director of Cost 

22 Assessment and Program Evaluation under section 

23 2334(e) of title 10, United States Code, the Director shall 

24 include an assessment of whether and to what extent per25 sonnel responsible for cost estimates or cost analysis devel-
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1 oped by a military department or defense agency for a 

2 major defense acquisition program are independent and 

3 whether their independence or lack thereof affects their 

4 ability to generate reliable cost estimates. 

5 SEC. 103. PERFORMANCE MANAGEMENT FOR THE JOINT 

6 CAPABILITIES INTEGRATION AND DEVELOP7 MENT SYSTEM. 

8 (a) REQUIREMENT FOR PROGRAM.—The Secretary of 

9 Defense shall ensure that the Department of Defense de10 velops and implements a program to manage performance 

11 in establishing joint military requirements pursuant to 

12 section 181 of title 10, United States Code. 

13 (b) LEADERS.—The Secretary of Defense shall des14 ignate an officer identified or designated as a joint quali15 fied officer to serve as leader of a joint effort to develop 

16 the performance management program required by sub17 section (a). The Secretary shall also designate an officer 

18 from each Armed Force to serve as leader of the effort 

19 within the Armed Force concerned. Officers designated 

20 pursuant to this section shall have the seniority and au21 thority necessary to oversee and direct all personnel en22 gaged in establishing joint military requirements within 

23 the Joint Staff or within the Armed Force concerned. 

24 (c) MATTERS COVERED.—The program developed 

25 pursuant to subsection (a) shall: 
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1 (1) Measure the following in relation to each 

2 joint military requirement: 

3 (A) The time a requirements document 

4 takes to receive validation through the require5 ments process. 

6 (B) The quality of cost information associ7 ated with the requirement and the extent to 

8 which cost information was considered during 

9 the requirements process. 

10 (C) The extent to which the requirements 

11 process established a meaningful level of pri12 ority for the requirement. 

13 (D) The extent to which the requirements 

14 process considered trade-offs between cost, 

15 schedule, and performance objectives. 

16 (E) The quality of information on 

17 sustainment associated with the requirement 

18 and the extent to which sustainment informa19 tion was considered during the requirements 

20 process. 

21 (F) Such other matters as the Secretary 

22 shall determine appropriate. 

23 (2) Achieve, to the maximum extent practicable, 

24 the following outcomes in the requirements process: 
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1 (A) Timeliness in delivering capability to 

2 the warfighter. 

3 (B) Mechanisms for controlling require4 ments creep. 

5 (C) Responsiveness to fact-of-life changes 

6 occurring after the approval of a requirements 

7 document, including changes to the threat envi8 ronment, the emergence of new capabilities, or 

9 changes in the resources estimated to procure 

10 or sustain a capability. 

11 (D) The development of the personnel 

12 skills, capacity, and training needed for an ef13 fective and efficient requirements process. 

14 (E) Such other outcomes as the Secretary 

15 shall determine appropriate. 

16 (d) IMPLEMENTATION.—The program required by 

17 subsection (a) shall be developed and initially implemented 

18 not later than 1 year after the date of the enactment of 

19 this Act and shall apply to requirements documents enter20 ing the requirements process after the date of initial im21 plementation. 

22 (e) INITIAL REPORT.—Not later than 90 days after 

23 the initial implementation of the program required by sub24 section (a), the Secretary shall submit to the congressional 

25 defense committees a report on the steps taken to develop 
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1 and implement the performance management program for 

2 joint military requirements. The report shall address the 

3 measures specified in subsection (c)(1). 

4 (f) FINAL REPORT.—Not later than 4 years after the 

5 initial implementation of the program required by sub6 section (a), the Secretary shall submit to the congressional 

7 defense committees a report on the effectiveness of the 

8 program for joint military requirements in achieving the 

9 outcomes specified in subsection (c)(2). 

10 (g) DEFINITIONS.—In this section: 

11 (1) REQUIREMENTS PROCESS.—The term ‘‘re12 quirements process’’ means the Joint Capabilities 

13 Integration and Development System (JCIDS) proc14 ess or any successor to such process established by 

15 the Chairman of the Joint Chiefs of Staff to support 

16 the statutory responsibility of the Joint Require17 ments Oversight Council in advising the Chairman 

18 and the Secretary of Defense in identifying, assess19 ing, and validating joint military capability needs, 

20 with their associated operational performance cri21 teria, in order to successfully execute missions. 

22 (2) REQUIREMENTS DOCUMENT.—The term 

23 ‘‘requirements document’’ means a document pro24 duced in the requirements process that is provided 

25 for an acquisition program to guide the subsequent 
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1 development, production, and testing of the program 

2 and that— 

3 (A) justifies the need for a materiel ap4 proach, or an approach that is a combination of 

5 materiel and non-materiel, to satisfy one or 

6 more specific capability gaps; 

7 (B) details the information necessary to 

8 develop an increment of militarily useful, 

9 logistically supportable, and technically mature 

10 capability, including key performance param11 eters; or 

12 (C) identifies production attributes re13 quired for a single increment of a program. 

14 (3) REQUIREMENTS CREEP.—The term ‘‘re15 quirements creep’’ means the addition of new tech16 nical or operational specifications after a require17 ments document is approved. 

18 (h) DISCRETIONARY IMPLEMENTATION AFTER 5 

19 YEARS.—After the date that is 5 years after the initial 

20 implementation of the performance management program 

21 under this section, the requirement to implement a pro22 gram under this section shall be at the discretion of the 

23 Secretary of Defense. 
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1 SEC. 104. REQUIREMENTS FOR THE ACQUISITION OF SERV2 ICES. 

3 (a) PROCESS REQUIRED.—The Secretary of Defense 

4 shall ensure that each military department establishes a 

5 process for identifying, assessing, and approving require6 ments for the acquisition of services, and that com7 manders of unified combatant commands and other offi8 cers identified or designated as joint qualified officers have 

9 an opportunity to participate in the process of each mili10 tary department to provide input on joint requirements 

11 for the acquisition of services. 

12 (b) GUIDANCE AND PLAN REQUIRED.—The Chief of 

13 Staff of the Army, the Chief of Naval Operations, the 

14 Chief of Staff of the Air Force, and the Commandant of 

15 the Marine Corps shall— 

16 (1) issue and maintain guidance relating to 

17 each process established under subsection (a); and 

18 (2) develop a plan to implement each process 

19 established under subsection (a). 

20 (c) MATTERS REQUIRED IN GUIDANCE.—The guid21 ance issued under subsection (b) shall establish, in relation 

22 to a process for identifying, assessing, and approving re23 quirements for the acquisition of services, the following: 

24 (1) Organization of such process. 

25 (2) The level of command responsibility re26 quired for identifying and validating requirements 
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1 for the acquisition of services in accordance with the 

2 categories established under section 2330(a)(1)(C) 

3 of title 10, United States Code. 

4 (3) The composition of billets necessary to oper5 ate such process. 

6 (4) The training required for personnel engaged 

7 in such process. 

8 (5) The relationship between doctrine and such 

9 process. 

10 (6) Methods of obtaining input on joint require11 ments for the acquisition of services. 

12 (7) Procedures for coordinating with the acqui13 sition process. 

14 (8) Considerations relating to opportunities for 

15 strategic sourcing. 

16 (d) MATTERS REQUIRED IN IMPLEMENTATION

17 PLAN.—Each plan required under subsection (b) shall 

18 provide for initial implementation of a process for identi19 fying, assessing, and approving requirements for the ac20 quisition of services not later than 180 days after the date 

21 of the enactment of this Act and shall provide for full im22 plementation of such process at the earliest date prac23 ticable. 

24 (e) CONSISTENCY WITH JOINT GUIDANCE.—When25 ever, at any time, guidance is issued by the Chairman of 
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1 the Joint Chiefs of Staff relating to requirements for the 

2 acquisition of services, each process established under sub3 section (a) shall be revised in accordance with such joint 

4 guidance. 

5 (f) DEFINITION.—The term ‘‘requirements for the 

6 acquisition of services’’ means objectives to be achieved 

7 through acquisitions primarily involving the procurement 

8 of services. 

9 SEC. 105. JOINT EVALUATION TASK FORCES. 

10 (a) TASK FORCES REQUIRED.—For each joint mili11 tary requirement involving a materiel solution for which 

12 the Chairman of the Joint Requirements Oversight Coun13 cil is the validation authority, the Chairman shall des14 ignate a commander of a unified combatant command to 

15 provide a joint evaluation task force to participate in such 

16 materiel solution. Such task force shall— 

17 (1) come from a military unit or units des18 ignated by the combatant commander concerned; 

19 (2) be selected based on the relevance of such 

20 materiel solution to the mission of the unit; and 

21 (3) participate consistent with its operational 

22 obligations. 

23 (b) RESPONSIBILITIES.—A task force provided pur24 suant to subsection (a) shall, for the materiel solution con25 cerned— 
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1 (1) provide input to the analysis of alternatives; 

2 (2) participate in testing (including limited user 

3 tests and prototype testing); 

4 (3) provide input on a concept of operations 

5 and doctrine; 

6 (4) provide end user feedback to the resource 

7 sponsor; and 

8 (5) participate, through the combatant com9 mander concerned, in any alteration of the require10 ment for such solution. 

11 (c) ADMINISTRATIVE SUPPORT.—The resource spon12 sor for the joint military requirement shall provide admin13 istrative support to the joint evaluation task force for pur14 poses of carrying out this section. 

15 (d) DEFINITIONS.—In this section: 

16 (1) RESOURCE SPONSOR.—The term ‘‘resource 

17 sponsor’’ means the organization responsible for all 

18 common documentation, periodic reporting, and 

19 funding actions required to support the capabilities 

20 development and acquisition process for the materiel 

21 solution. 

22 (2) MATERIEL SOLUTION.—The term ‘‘materiel 

23 solution’’ means the development, acquisition, pro24 curement, or fielding of a new item, or of a modi-
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1 fication to an existing item, necessary to equip, oper2 ate, maintain, and support military activities. 

3 SEC. 106. REVIEW OF DEFENSE ACQUISITION GUIDANCE. 

4 (a) REVIEW OF GUIDANCE.—The Secretary of De5 fense shall review the acquisition guidance of the Depart6 ment of Defense, including, at a minimum, the guidance 

7 contained in Department of Defense Instruction 5000.02 

8 entitled ‘‘Operation of the Defense Acquisition System’’. 

9 (b) MATTERS CONSIDERED.—The review performed 

10 under subsection (a) shall consider— 

11 (1) the extent to which it is appropriate to 

12 apply guidance primarily relating to the acquisition 

13 of weapon systems to acquisitions not involving 

14 weapon systems (including the acquisition of com15 mercial goods and commodities, commercial and 

16 military unique services, and information tech17 nology); 

18 (2) whether long-term sustainment and energy 

19 efficiency of weapon systems is appropriately empha20 sized; 

21 (3) whether appropriate mechanisms exist to 

22 communicate information relating to the mission 

23 needs of the Department of Defense to the industrial 

24 base in a way that allows the industrial base to 

25 make appropriate investments in infrastructure, ca-
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1 pacity, and technology development to help meet 

2 such needs; 

3 (4) the extent to which earned value manage4 ment should be required on acquisitions not involv5 ing the acquisition of weapon systems and whether 

6 measures of quality and technical performance 

7 should be included in any earned value management 

8 system; 

9 (5) the extent to which it is appropriate to 

10 apply processes primarily relating to the acquisition 

11 of weapon systems to the acquisition of information 

12 technology systems, consistent with the requirement 

13 to develop an alternative process for such systems 

14 contained in section 804 of the National Defense 

15 Authorization Act for Fiscal Year 2010 (Public Law 

16 111–84; 123 Stat. 2401; 10 U.S.C. 2225 note); and 

17 (6) such other matters as the Secretary con18 siders appropriate. 

19 (c) REPORT.—Not later than 270 days after the date 

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

21 shall submit to the Committees on Armed Services of the 

22 Senate and of the House of Representatives a report de23 tailing any changes in the acquisition guidance of the De24 partment of Defense identified during the review required 
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1 by subsection (a), and any actions taken, or planned to 

2 be taken, to implement such changes. 

3 SEC. 107. REQUIREMENT TO INCLUDE REFERENCES TO 

4 SERVICES ACQUISITION THROUGHOUT THE 

5 FEDERAL ACQUISITION REGULATION. 

6 (a) FINDINGS.—Congress finds the following: 

7 (1) The acquisition of services can be extremely 

8 complex, and program management skills, tools, and 

9 processes need to be applied to services acquisitions. 

10 (2) An emphasis on the concept of ‘‘services’’ 

11 throughout the Federal Acquisition Regulation 

12 would enhance and support the procurement and 

13 project management community in all aspects of the 

14 acquisition planning process, including requirements 

15 development, assessment of reasonableness, and 

16 post-award management and oversight. 

17 (b) REQUIREMENT FOR CHANGES TO FAR.—The 

18 Federal Acquisition Regulation shall be revised to provide, 

19 throughout the Regulation, appropriate references to serv20 ices acquisition that are in addition to references provided 

21 in part 37 (which relates specifically to services acquisi22 tion). 

23 (c) DEADLINE.—This section shall be carried out 

24 within 270 days after the date of the enactment of this 

25 Act. 
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1 SEC. 108. PROCUREMENT OF MILITARY PURPOSE NON2 DEVELOPMENTAL ITEMS. 

3 (a) IN GENERAL.— 

4 (1) PROCUREMENT OF MILITARY PURPOSE

5 NONDEVELOPMENTAL ITEMS.—Chapter 141 of title 

6 10, United States Code, is amended by adding at 

7 the end the following new section: 

8 ‘‘§ 2410r. Military purpose nondevelopmental items 

9 ‘‘(a) DEFINITIONS.—In this section: 

10 ‘‘(1) The term ‘military purpose nondevelop11 mental item’ means an item— 

12 ‘‘(A) developed exclusively at private ex13 pense; 

14 ‘‘(B) that meets a validated military re15 quirement, as certified in writing by the respon16 sible program manager; 

17 ‘‘(C) for which delivery of an initial lot of 

18 production-representative items may be made 

19 within nine months after contract award; and 

20 ‘‘(D) for which the unit cost is less than 

21 $10,000,000. 

22 ‘‘(2) The term ‘item’ has the meaning provided 

23 in section 2302(3) of this title. 

24 ‘‘(b) REQUIREMENTS.—The Secretary of Defense 

25 shall ensure that, with respect to a contract for the acqui-
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1 sition of a military purpose nondevelopmental item, the 

2 following requirements apply: 

3 ‘‘(1) The contract shall be awarded using com4 petitive procedures in accordance with section 2304 

5 of this title. 

6 ‘‘(2) Certain contract clauses, as specified in 

7 regulations prescribed under subsection (c), shall be 

8 included in each such contract. 

9 ‘‘(3) The type of contract used shall be a firm, 

10 fixed price type contract. 

11 ‘‘(4) Nothing in the contract shall further re12 strict or otherwise affect the rights in technical data 

13 of the Government, the contractor, or any subcon14 tractor of the contractor for items developed by the 

15 contractor or any such subcontractor exclusively at 

16 private expense, as prescribed in regulations imple17 menting section 2320(a)(2)(B) of this title. 

18 ‘‘(c) REGULATIONS.—The Secretary of Defense shall 

19 prescribe regulations to carry out this section. Such regu20 lations shall be included in regulations of the Department 

21 of Defense prescribed as part of the Federal Acquisition 

22 Regulation. At a minimum, the regulations shall include— 

23 ‘‘(1) a list of contract clauses to be included in 

24 each contract for the acquisition of a military pur25 pose nondevelopmental item; 
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1 ‘‘(2) definitions for the terms ‘developed’ and 

2 ‘exclusively at private expense’ that— 

3 ‘‘(A) are consistent with the definitions de4 veloped for such terms in accordance with 

5 2320(a)(3) of this title; and 

6 ‘‘(B) also exclude an item developed in 

7 part or in whole with— 

8 ‘‘(i) foreign government funding; or 

9 ‘‘(ii) foreign or Federal Government 

10 loan financing at nonmarket rates; and 

11 ‘‘(3) standards for evaluating the reasonable12 ness of price for the military purpose nondevelop13 mental item, in lieu of certified cost or pricing 

14 data.’’. 

15 (2) CLERICAL AMENDMENT.—The table of sec16 tions at the beginning of such chapter is amended 

17 by adding at the end the following new item: 

‘‘2410r. Military purpose nondevelopmental items.’’. 

18 (b) COST OR PRICING DATA EXCEPTION.—Section 

19 2306a(b)(1) of title 10, United States Code, is amended— 

20 (1) by striking ‘‘or’’ at the end of subparagraph 

21 (B); 

22 (2) by striking the period at the end of sub23 paragraph (C) and inserting ‘‘; or’’; and 

24 (3) by adding at the end the following new sub25 paragraph: 
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1 ‘‘(D) for the acquisition of a military pur2 pose nondevelopmental item, as defined in sec3 tion 2410r of this title, if the contracting officer 

4 determines in writing that— 

5 ‘‘(i) the contract, subcontract or modi6 fication will be a firm, fixed price type con7 tract; and 

8 ‘‘(ii) the offeror has submitted suffi9 cient information to evaluate, through 

10 price analysis, the reasonableness of the 

11 price for the military purpose nondevelop12 mental item.’’. 

13 (c) EFFECTIVE DATE.—Section 2410r of title 10, 

14 United States Code, as added by subsection (a), and the 

15 amendment made by subsection (b), shall apply with re16 spect to contracts entered into after the date that is 120 

17 days after the date of the enactment of this Act. 

18 TITLE II—DEFENSE 

19 ACQUISITION WORKFORCE 

20 SEC. 201. ACQUISITION WORKFORCE EXCELLENCE. 

21 (a) IN GENERAL.— 

22 (1) ACQUISITION WORKFORCE EXCELLENCE.— 

23 Subchapter I of chapter 87 of title 10, United States 

24 Code, is amended by inserting after section 1701 the 

25 following new section: 
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1 ‘‘§ 1701a. Management for acquisition workforce ex2 cellence 

3 ‘‘(a) PURPOSE.—The purpose of this chapter is to re4 quire the Department of Defense to develop and manage 

5 a highly skilled professional acquisition workforce— 

6 ‘‘(1) in which excellence and contribution to 

7 mission is rewarded; 

8 ‘‘(2) which has the technical expertise and busi9 ness skills to ensure the Department receives the 

10 best value for the expenditure of public resources; 

11 ‘‘(3) which serves as a model for performance 

12 management of employees of the Department; and 

13 ‘‘(4) which is managed in a manner that com14 plements and reinforces the performance manage15 ment of the defense acquisition system pursuant to 

16 chapter 149 of this title. 

17 ‘‘(b) PERFORMANCE MANAGEMENT.—In order to 

18 achieve the purpose set forth in subsection (a), the Sec19 retary of Defense shall— 

20 ‘‘(1) use the full authorities provided in sub21 sections (a) through (d) of section 9902 of title 5, 

22 including flexibilities related to performance manage23 ment and hiring and to training of managers; 

24 ‘‘(2) require managers to develop performance 

25 plans for individual members of the acquisition 

26 workforce in order to give members an under-
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1 standing of how their performance contributes to 

2 their organization’s mission and the success of the 

3 defense acquisition system (as defined in section 

4 2545 of this title); 

5 ‘‘(3) to the extent appropriate, use the lessons 

6 learned from the acquisition demonstration project 

7 carried out under section 1762 of this title related 

8 to contribution-based compensation and appraisal, 

9 and how those lessons may be applied within the 

10 General Schedule system; 

11 ‘‘(4) develop attractive career paths; 

12 ‘‘(5) encourage continuing education and train13 ing; 

14 ‘‘(6) develop appropriate procedures for warn15 ings during performance evaluations and due process 

16 for members of the acquisition workforce who con17 sistently fail to meet performance standards; 

18 ‘‘(7) take full advantage of the Defense Civilian 

19 Leadership Program established under section 1112 

20 of the National Defense Authorization Act for Fiscal 

21 Year 2010 (Public Law 111–84; 123 Stat. 2496; 10 

22 U.S.C. 1580 note prec.); 

23 ‘‘(8) use the authorities for highly qualified ex24 perts under section 9903 of title 5, to hire experts 

25 who are skilled acquisition professionals to— 
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1 ‘‘(A) serve in leadership positions within 

2 the acquisition workforce to strengthen manage3 ment and oversight; 

4 ‘‘(B) provide mentors to advise individuals 

5 within the acquisition workforce on their career 

6 paths and opportunities to advance and excel 

7 within the acquisition workforce; and 

8 ‘‘(C) assist with the design of education 

9 and training courses and the training of indi10 viduals in the acquisition workforce; and 

11 ‘‘(9) use the authorities for expedited security 

12 clearance processing pursuant to section 1564 of 

13 this title. 

14 ‘‘(c) NEGOTIATIONS.—Any action taken by the Sec15 retary under this section, or to implement this section, 

16 shall be subject to the requirements of chapter 71 of title 

17 5. 

18 ‘‘(d) REGULATIONS.—Any rules or regulations pre19 scribed pursuant to this section shall be deemed an agency 

20 rule or regulation under section 7117(a)(2) of title 5, and 

21 shall not be deemed a Government-wide rule or regulation 

22 under section 7117(a)(1) of such title.’’. 

23 (2) CLERICAL AMENDMENT.—The table of sec24 tions at the beginning of such subchapter is amend-
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1 ed by inserting after the item relating to section 

2 1701 the following new item: 

‘‘1701a. Management for acquisition workforce excellence.’’. 

3 (b) AUTHORITY TO APPOINT HIGHLY QUALIFIED

4 EXPERTS ON PART-TIME BASIS.—Section 9903(b)(1) of 

5 title 5, United States Code, is amended by inserting ‘‘, 

6 on a full-time or part-time basis,’’ after ‘‘positions in the 

7 Department of Defense’’ the first place it appears. 

8 SEC. 202. AMENDMENTS TO THE ACQUISITION WORKFORCE 

9 DEMONSTRATION PROJECT. 

10 (a) CODIFICATION INTO TITLE 10.— 

11 (1) IN GENERAL.—Chapter 87 of title 10, 

12 United States Code, is amended by inserting after 

13 section 1761 the following new section: 

14 ‘‘§ 1762. Demonstration project relating to certain ac15 quisition personnel management policies 

16 and procedures 

17 ‘‘(a) COMMENCEMENT.—The Secretary of Defense is 

18 encouraged to carry out a demonstration project, the pur19 pose of which is to determine the feasibility or desirability 

20 of one or more proposals for improving the personnel man21 agement policies or procedures that apply with respect to 

22 the acquisition workforce of the Department of Defense 

23 and supporting personnel assigned to work directly with 

24 the acquisition workforce. 
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1 ‘‘(b) TERMS AND CONDITIONS.—(1) Except as other2 wise provided in this subsection, any demonstration 

3 project described in subsection (a) shall be subject to sec4 tion 4703 of title 5 and all other provisions of such title 

5 that apply with respect to any demonstration project 

6 under such section. 

7 ‘‘(2) Subject to paragraph (3), in applying section 

8 4703 of title 5 with respect to a demonstration project 

9 described in subsection (a)— 

10 ‘‘(A) ‘180 days’ in subsection (b)(4) of such 

11 section shall be deemed to read ‘120 days’; 

12 ‘‘(B) ‘90 days’ in subsection (b)(6) of such sec13 tion shall be deemed to read ‘30 days’; and 

14 ‘‘(C) subsection (d)(1) of such section shall be 

15 disregarded. 

16 ‘‘(3) Paragraph (2) shall not apply with respect to 

17 a demonstration project unless— 

18 ‘‘(A) for each organization or team partici19 pating in the demonstration project— 

20 ‘‘(i) at least one-third of the workforce par21 ticipating in the demonstration project consists 

22 of members of the acquisition workforce; and 

23 ‘‘(ii) at least two-thirds of the workforce 

24 participating in the demonstration project con25 sists of members of the acquisition workforce 
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1 and supporting personnel assigned to work di2 rectly with the acquisition workforce; and 

3 ‘‘(B) the demonstration project commences be4 fore October 1, 2007. 

5 ‘‘(c) LIMITATION ON NUMBER OF PARTICIPANTS.— 

6 The total number of persons who may participate in the 

7 demonstration project under this section may not exceed 

8 120,000. 

9 ‘‘(d) EFFECT OF REORGANIZATIONS.—The applica10 bility of paragraph (2) of subsection (b) to an organization 

11 or team shall not terminate by reason that the organiza12 tion or team, after having satisfied the conditions in para13 graph (3) of such subsection when it began to participate 

14 in a demonstration project under this section, ceases to 

15 meet one or both of the conditions set forth in subpara16 graph (A) of such paragraph (3) as a result of a reorga17 nization, restructuring, realignment, consolidation, or 

18 other organizational change. 

19 ‘‘(e) ASSESSMENT.—(1) The Secretary of Defense 

20 shall designate an independent organization to review the 

21 acquisition workforce demonstration project described in 

22 subsection (a). 

23 ‘‘(2) Such assessment shall include: 

24 ‘‘(A) A description of the workforce included in 

25 the project. 
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1 ‘‘(B) An explanation of the flexibilities used in 

2 the project to appoint individuals to the acquisition 

3 workforce and whether those appointments are based 

4 on competitive procedures and recognize veteran’s 

5 preferences. 

6 ‘‘(C) An explanation of the flexibilities used in 

7 the project to develop a performance appraisal sys8 tem that recognizes excellence in performance and 

9 offers opportunities for improvement. 

10 ‘‘(D) The steps taken to ensure that such sys11 tem is fair and transparent for all employees in the 

12 project. 

13 ‘‘(E) How the project allows the organization to 

14 better meet mission needs. 

15 ‘‘(F) An analysis of how the flexibilities in sub16 paragraphs (B) and (C) are used, and what barriers 

17 have been encountered that inhibit their use. 

18 ‘‘(G) Whether there is a process for— 

19 ‘‘(i) ensuring ongoing performance feed20 back and dialogue among supervisors, man21 agers, and employees throughout the perform22 ance appraisal period; and 

23 ‘‘(ii) setting timetables for performance ap24 praisals. 
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1 ‘‘(H) The project’s impact on career progres2 sion. 

3 ‘‘(I) The project’s appropriateness or inappro4 priateness in light of the complexities of the work5 force affected. 

6 ‘‘(J) The project’s sufficiency in terms of pro7 viding protections for diversity in promotion and re8 tention of personnel. 

9 ‘‘(K) The adequacy of the training, policy 

10 guidelines, and other preparations afforded in con11 nection with using the project. 

12 ‘‘(L) Whether there is a process for ensuring 

13 employee involvement in the development and im14 provement of the project. 

15 ‘‘(3) The first such assessment under this subsection 

16 shall be completed not later than September 30, 2011, and 

17 subsequent assessments shall be completed every two 

18 years thereafter until the termination of the project. The 

19 Secretary shall submit to the covered congressional com20 mittees a copy of the assessment within 30 days after re21 ceipt by the Secretary of the assessment. 

22 ‘‘(f) COVERED CONGRESSIONAL COMMITTEES.—In 

23 this section, the term ‘covered congressional committees’ 

24 means— 
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1 ‘‘(1) the Committees on Armed Services of the 

2 Senate and the House of Representatives; 

3 ‘‘(2) the Committee on Homeland Security and 

4 Governmental Affairs of the Senate; and 

5 ‘‘(3) the Committee on Oversight and Govern6 ment Reform of the House of Representatives. 

7 ‘‘(g) TERMINATION OF AUTHORITY.—The authority 

8 to conduct a demonstration program under this section 

9 shall terminate on September 30, 2017. 

10 ‘‘(h) CONVERSION.—Within six months after the au11 thority to conduct a demonstration project under this sec12 tion is terminated as provided in subsection (g), employees 

13 in the project shall convert to the civilian personnel system 

14 created pursuant to section 9902 of title 5.’’. 

15 (2) CLERICAL AMENDMENT.—The table of sec16 tions at the beginning of subchapter V of chapter 87 

17 of title 10, United States Code, is amended by in18 serting after the item relating to section 1761 the 

19 following new item: 

‘‘1762. Demonstration project relating to certain acquisition personnel management policies and procedures.’’. 

20 (b) CONFORMING REPEAL.—Section 4308 of the Na21 tional Defense Authorization Act for Fiscal Year 1996 

22 (Public Law 104–106; 10 U.S.C. 1701 note) is repealed. 
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1 SEC. 203. INCENTIVE PROGRAMS FOR CIVILIAN AND MILI2 TARY PERSONNEL IN THE ACQUISITION 

3 WORKFORCE. 

4 (a) IN GENERAL.—Chapter 87 of title 10, United 

5 States Code, is amended by inserting after section 1762, 

6 as added by section 202, the following new section: 

7 ‘‘§ 1763. Incentive programs for civilian and military 

8 personnel in the acquisition workforce 

9 ‘‘(a) CIVILIAN ACQUISITION WORKFORCE INCEN10 TIVES.—The Secretary of Defense, acting through the 

11 Under Secretary of Defense for Acquisition, Technology, 

12 and Logistics, shall provide for an enhanced system of in13 centives for the encouragement of excellence in the acqui14 sition workforce by providing rewards for employees who 

15 contribute to achieving the agency’s performance goals. 

16 The system of incentives shall include provisions that— 

17 ‘‘(1) relate salary increases, bonuses, and 

18 awards to performance and contribution to the agen19 cy mission (including the extent to which the per20 formance of personnel in such workforce contributes 

21 to achieving the goals and standards established for 

22 acquisition programs pursuant to section 2545 of 

23 this title); 

24 ‘‘(2) provide for consideration, in personnel 

25 evaluations and promotion decisions, of the extent to 

26 which the performance of personnel in such work-
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1 force contributes to achieving such goals and stand2 ards; 

3 ‘‘(3) use the Department of Defense Civilian 

4 Workforce Incentive Fund established pursuant to 

5 section 9902(a) of title 5; and 

6 ‘‘(4) provide opportunities for career broad7 ening experiences for high performers. 

8 ‘‘(b) MILITARY ACQUISITION WORKFORCE INCEN9 TIVES.—The Secretaries of the military departments shall 

10 fully use and enhance incentive programs that reward in11 dividuals, through recognition certificates or cash awards, 

12 for suggestions of process improvements that contribute 

13 to improvements in efficiency and economy and a better 

14 way of doing business.’’. 

15 (b) CLERICAL AMENDMENT.—The table of sections 

16 at the beginning of subchapter V of chapter 87 of title 

17 10, United States Code, is amended by inserting after the 

18 item relating to section 1762, as added by section 202, 

19 the following new item: 

‘‘1763. Incentive programs for civilian and military personnel in the acquisition 

workforce.’’. 

20 SEC. 204. CAREER DEVELOPMENT FOR CIVILIAN AND MILI21 TARY PERSONNEL IN THE ACQUISITION 

22 WORKFORCE. 

23 (a) CAREER PATHS.— 
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1 (1) AMENDMENT.—Chapter 87 of title 10, 

2 United States Code, is amended by inserting after 

3 section 1722a the following new section: 

4 ‘‘§ 1722b. Special requirements for civilian employees 

5 in the acquisition field 

6 ‘‘(a) REQUIREMENT FOR POLICY AND GUIDANCE RE7 GARDING CIVILIAN PERSONNEL IN ACQUISITION.—The 

8 Secretary of Defense, acting through the Under Secretary 

9 of Defense for Acquisition, Technology, and Logistics, 

10 shall establish policies and issue guidance to ensure the 

11 proper development, assignment, and employment of civil12 ian members of the acquisition workforce to achieve the 

13 objectives specified in subsection (b). 

14 ‘‘(b) OBJECTIVES.—Policies established and guidance 

15 issued pursuant to subsection (a) shall ensure, at a min16 imum, the following: 

17 ‘‘(1) A career path in the acquisition field that 

18 attracts the highest quality civilian personnel, from 

19 either within or outside the Federal Government. 

20 ‘‘(2) A deliberate workforce development strat21 egy that increases attainment of key experiences 

22 that contribute to a highly qualified acquisition 

23 workforce. 

24 ‘‘(3) Sufficient opportunities for promotion and 

25 advancement in the acquisition field. 
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1 ‘‘(4) A sufficient number of qualified, trained 

2 members eligible for and active in the acquisition 

3 field to ensure adequate capacity, capability, and ef4 fective succession for acquisition functions, including 

5 contingency contracting, of the Department of De6 fense. 

7 ‘‘(5) A deliberate workforce development strat8 egy that ensures diversity in promotion, advance9 ment, and experiential opportunities commensurate 

10 with the general workforce outlined in this section. 

11 ‘‘(c) INCLUSION OF INFORMATION IN ANNUAL RE12 PORT.—The Secretary of Defense shall include in the re13 port to Congress required under section 115b(d) of this 

14 title the following information related to the acquisition 

15 workforce for the period covered by the report (which shall 

16 be shown for the Department of Defense as a whole and 

17 separately for the Army, Navy, Air Force, Marine Corps, 

18 Defense Agencies, and Office of the Secretary of Defense): 

19 ‘‘(1) The total number of persons serving in the 

20 Acquisition Corps, set forth separately for members 

21 of the armed forces and civilian employees, by grade 

22 level and by functional specialty. 

23 ‘‘(2) The total number of critical acquisition po24 sitions held, set forth separately for members of the 

25 armed forces and civilian employees, by grade level 
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1 and by other appropriate categories (including by 

2 program manager, deputy program manager, and di3 vision head positions). For each such category, the 

4 report shall specify the number of civilians holding 

5 such positions compared to the total number of posi6 tions filled. 

7 ‘‘(3) The number of employees to whom the re8 quirements of subsections (b)(2)(A) and (b)(2)(B) of 

9 section 1732 of this title did not apply because of 

10 the exceptions provided in paragraphs (1) and (2) of 

11 section 1732(c) of this title, set forth separately by 

12 type of exception. 

13 ‘‘(4) The number of program managers and 

14 deputy program managers who were reassigned after 

15 completion of a major milestone occurring closest in 

16 time to the date on which the person has served in 

17 the position for four years (as required under section 

18 1734(b) of this title), and the proportion of those re19 assignments to the total number of reassignments of 

20 program managers and deputy program managers, 

21 set forth separately for program managers and dep22 uty program managers. The Secretary also shall in23 clude the average length of assignment served by 

24 program managers and deputy program managers so 

25 reassigned. 
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1 ‘‘(5) The number of persons, excluding those 

2 reported under paragraph (4), in critical acquisition 

3 positions who were reassigned after a period of three 

4 years or longer (as required under section 1734(a) 

5 of this title), and the proportion of those reassign6 ments to the total number of reassignments of per7 sons, excluding those reported under paragraph (4), 

8 in critical acquisition positions. 

9 ‘‘(6) The number of times a waiver authority 

10 was exercised under section 1724(d), 1732(d), 

11 1734(d), or 1736(c) of this title or any other provi12 sion of this chapter (or other provision of law) which 

13 permits the waiver of any requirement relating to 

14 the acquisition workforce, and in the case of each 

15 such authority, the reasons for exercising the au16 thority. The Secretary may present the information 

17 provided under this paragraph by category or group18 ing of types of waivers and reasons.’’. 

19 (2) CLERICAL AMENDMENT.—The table of sec20 tions at the beginning of subchapter II of chapter 87 

21 of title 10, United States Code, is amended by in22 serting after the item relating to section 1722a the 

23 following new item: 

‘‘1722b. Special requirements for civilian employees in the acquisition field.’’. 

24 (b) CAREER EDUCATION AND TRAINING.—Chapter 

25 87 of title 10, United States Code, is amended in section 
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1 1723 by redesignating subsection (b) as subsection (c) and 

2 inserting after subsection (a) the following new subsection: 

3 ‘‘(b) CAREER PATH REQUIREMENTS.—For each ca4 reer path, the Secretary of Defense, acting through the 

5 Under Secretary of Defense for Acquisition, Technology, 

6 and Logistics shall establish requirements for the comple7 tion of course work and related on-the-job training and 

8 demonstration of qualifications in the critical acquisition9 related duties and tasks of the career path. The Secretary 

10 of Defense, acting through the Under Secretary, shall 

11 also— 

12 ‘‘(1) encourage individuals in the acquisition 

13 workforce to maintain the currency of their acquisi14 tion knowledge and generally enhance their knowl15 edge of related acquisition management disciplines 

16 through academic programs and other self-develop17 mental activities; and 

18 ‘‘(2) develop key work experiences, including 

19 the creation of a program sponsored by the Depart20 ment of Defense that facilitates the periodic inter21 action between individuals in the acquisition work22 force and the end user in such end user’s environ23 ment to enhance the knowledge base of such work24 force, for individuals in the acquisition workforce so 

25 that the individuals may gain in-depth knowledge 
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1 and experience in the acquisition process and become 

2 seasoned, well-qualified members of the acquisition 

3 workforce.’’. 

4 SEC. 205. RECERTIFICATION AND TRAINING REQUIRE5 MENTS. 

6 (a) CONTINUING EDUCATION.—Section 1723 of title 

7 10, United States Code, as amended by section 204, is 

8 further amended by amending subsection (a) to read as 

9 follows: 

10 ‘‘(a) QUALIFICATION REQUIREMENTS.—(1) The Sec11 retary of Defense shall establish education, training and 

12 experience requirements for each acquisition position, 

13 based on the level of complexity of duties carried out in 

14 the position. In establishing such requirements, the Sec15 retary shall ensure the availability and sufficiency of train16 ing in all areas of acquisition, including additional training 

17 courses with an emphasis on services contracting, market 

18 research strategies (including assessments of local con19 tracting capabilities), long-term sustainment strategies, 

20 information technology, and rapid acquisition. 

21 ‘‘(2) In establishing such requirements for positions 

22 other than critical acquisition positions designated pursu23 ant to section 1733 of this title, the Secretary may state 

24 the requirements by categories of positions. 
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1 ‘‘(3) The Secretary of Defense, acting through the 

2 Under Secretary of Defense for Acquisition, Technology, 

3 and Logistics, shall establish requirements for continuing 

4 education and periodic renewal of an individual’s certifi5 cation. Any requirement for a certification renewal shall 

6 not require a renewal more often than once every five 

7 years.’’. 

8 (b) STANDARDS FOR TRAINING.— 

9 (1) IN GENERAL.—Subchapter IV of Chapter 

10 87 of title 10, United States Code, is amended by 

11 adding at the end the following new section: 

12 ‘‘§ 1748. Guidance and standards for acquisition 

13 workforce training 

14 ‘‘(a) FULFILLMENT STANDARDS.—The Secretary of 

15 Defense, acting through the Under Secretary of Defense 

16 for Acquisition, Technology, and Logistics, shall develop 

17 fulfillment standards, and implement and maintain a pro18 gram, for purposes of the training requirements of sec19 tions 1723, 1724, and 1735 of this title. Such fulfillment 

20 standards shall consist of criteria for determining whether 

21 an individual has demonstrated competence in the areas 

22 that would be taught in the training courses required 

23 under those sections. If an individual meets the appro24 priate fulfillment standard, the applicable training re25 quirement is fulfilled. 
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1 ‘‘(b) GUIDANCE AND STANDARDS RELATING TO CON2 TRACTS FOR TRAINING.—The Secretary of Defense shall 

3 develop appropriate guidance and standards to ensure that 

4 the Department of Defense will continue, where appro5 priate and cost-effective, to enter into contracts for the 

6 training requirements of sections 1723, 1724, and 1735 

7 of this title, while maintaining appropriate control over the 

8 content and quality of such training.’’. 

9 (2) CLERICAL AMENDMENT.—The table of sec10 tions at the beginning of such subchapter is amend11 ed by adding at the end the following new item: 

‘‘1748. Guidance and standards for acquisition workforce training.’’. 

12 (3) DEADLINE FOR FULFILLMENT STAND13 ARDS.—The fulfillment standards required under 

14 section 1748(a) of title 10, United States Code, as 

15 added by paragraph (1), shall be developed not later 

16 than 90 days after the date of the enactment of this 

17 Act. 

18 (4) CONFORMING REPEAL.—Section 853 of 

19 Public Law 105–85 (111 Stat. 1851) is repealed. 

20 SEC. 206. INFORMATION TECHNOLOGY ACQUISITION 

21 WORKFORCE. 

22 (a) IN GENERAL.— 

23 (1) INFORMATION TECHNOLOGY.—Subchapter 

24 II of chapter 87 of title 10, United States Code, is 
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1 amended by adding at the end the following new sec2 tion: 

3 ‘‘§ 1725. Information technology acquisition positions 

4 ‘‘(a) PLAN REQUIRED.—The Secretary of Defense 

5 shall develop and carry out a plan to strengthen the part 

6 of the acquisition workforce that specializes in information 

7 technology. The plan shall include the following: 

8 ‘‘(1) Defined targets for billets devoted to infor9 mation technology acquisition. 

10 ‘‘(2) Specific certification requirements for indi11 viduals in the acquisition workforce who specialize in 

12 information technology acquisition. 

13 ‘‘(3) Defined career paths for individuals in the 

14 acquisition workforce who specialize in information 

15 technology acquisitions. 

16 ‘‘(b) DEFINITIONS.—In this section: 

17 ‘‘(1) The term ‘information technology’ has the 

18 meaning provided such term in section 11101 of title 

19 40 and includes information technology incorporated 

20 into a major weapon system. 

21 ‘‘(2) The term ‘major weapon system’ has the 

22 meaning provided such term in section 2379(f) of 

23 this title.’’. 
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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions at the beginning of such subchapter is amend3 ed by adding at the end the following new item: 

‘‘1725. Information technology acquisition positions.’’. 

4 (b) DEADLINE.—The Secretary of Defense shall de5 velop the plan required under section 1725 of title 10, 

6 United States Code, as added by subsection (a), not later 

7 than 180 days after the date of the enactment of this Act. 

8 SEC. 207. DEFINITION OF ACQUISITION WORKFORCE. 

9 Section 101(a) of title 10, United States Code, is 

10 amended by inserting after paragraph (17) the following 

11 new paragraph: 

12 ‘‘(18) The term ‘acquisition workforce’ means 

13 the persons serving in acquisition positions within 

14 the Department of Defense, as designated pursuant 

15 to section 1721(a) of this title.’’. 

16 SEC. 208. DEFENSE ACQUISITION UNIVERSITY CUR17 RICULUM REVIEW. 

18 (a) CURRICULUM REVIEW.—Not later than 1 year 

19 after the date of the enactment of this Act, the Under 

20 Secretary of Defense for Acquisition, Technology, and Lo21 gistics shall lead a review of the curriculum offered by the 

22 Defense Acquisition University to ensure it adequately 

23 supports the training and education requirements of ac24 quisition professionals, particularly in service contracting, 

25 long term sustainment strategies, information technology, 
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1 and rapid acquisition. The review shall also involve the 

2 service acquisition executives of each military department. 

3 (b) ANALYSIS OF FUNDING REQUIREMENTS FOR

4 TRAINING.—Following the review conducted under sub5 section (a), the Secretary of Defense shall analyze the 

6 most recent future-years defense program to determine 

7 the amounts of estimated expenditures and proposed ap8 propriations necessary to support the training require9 ments of the amendments made by section 205 of this Act, 

10 including any new training requirements determined after 

11 the review conducted under subsection (a). The Secretary 

12 shall identify any additional funding needed for such 

13 training requirements in the separate chapter on the de14 fense acquisition workforce required in the next annual 

15 strategic workforce plan under 115b of title 10, United 

16 States Code. 

17 (c) REQUIREMENT FOR ONGOING CURRICULUM DE18 VELOPMENT WITH CERTAIN SCHOOLS.— 

19 (1) REQUIREMENT.—Section 1746 of title 10, 

20 United States Code, is amended by adding at the 

21 end the following new subsection: 

22 ‘‘(c) CURRICULUM DEVELOPMENT.—The President 

23 of the Defense Acquisition University shall work with the 

24 relevant professional schools and degree-granting institu25 tions of the Department of Defense and military depart-
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1 ments to ensure that best practices are used in curriculum 

2 development to support acquisition workforce positions.’’. 

3 (2) AMENDMENT TO SECTION HEADING.—(A) 

4 The heading of section 1746 of such title is amended 

5 to read as follows: 

6 ‘‘§ 1746. Defense Acquisition University’’. 

7 (B) The item relating to section 1746 in the 

8 table of sections at the beginning of subchapter IV 

9 of chapter 87 of such title is amended to read as fol10 lows: 

‘‘1746. Defense Acquisition University.’’. 

11 SEC. 209. COST ESTIMATING INTERNSHIP AND SCHOLAR12 SHIP PROGRAMS. 

13 (a) PURPOSE.—The purpose of this section is to re14 quire the Department of Defense to develop internship 

15 and scholarship programs in cost estimating to underscore 

16 the importance of cost estimating, as a core acquisition 

17 function, to the acquisition process. 

18 (b) REQUIREMENT.—The Secretary of Defense shall 

19 develop intern and scholarship programs in cost esti20 mating for purposes of improving education and training 

21 in cost estimating and providing an opportunity to meet 

22 any certification requirements in cost estimating. 

23 (c) IMPLEMENTATION.—Such programs shall be es24 tablished not later than 270 days after the date of the 
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1 enactment of this Act and shall be implemented for a 4- 

2 year period following establishment of the programs. 

3 SEC. 210. PROHIBITION ON PERSONAL SERVICES CON4 TRACTS FOR SENIOR MENTORS. 

5 (a) PROHIBITION.—The Secretary of Defense shall 

6 prohibit the award of a contract for personal services by 

7 any component of the Department of Defense for the pur8 pose of obtaining the services of a senior mentor. 

9 (b) INTERPRETATION.—Nothing in this section shall 

10 be interpreted to prohibit the employment of a senior men11 tor as a highly qualified expert pursuant to section 9903 

12 of title 5, United States Code, subject to the pay and term 

13 limitations of that section. A senior mentor employed as 

14 a highly qualified expert shall be required to submit a fi15 nancial disclosure report and comply with all conflict of 

16 interest laws and regulations applicable to other Federal 

17 employees with similar conditions of service. 

18 (c) DEFINITIONS.—In this section: 

19 (1) The term ‘‘contract for personal services’’ 

20 means a contract awarded under the authority of 

21 section 129b(a) of title 10, United States Code, or 

22 section 3109 of title 5, United States Code. 

23 (2) The term ‘‘component of the Department of 

24 Defense’’ means a military department, a defense 
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1 agency, a Department of Defense field activity, a 

2 unified combatant command, or the joint staff. 

3 (3) The term ‘‘senior mentor’’ means any per4 son— 

5 (A)(i) who has served as a general or flag 

6 officer in the Armed Forces; or 

7 (ii) who has served in a position at a level 

8 at or above the level of the senior executive 

9 service; 

10 (B) has retired within the 10 years pre11 ceding the award of a contract; and 

12 (C) who serves as a mentor, teacher, train13 er, or advisor to government personnel on mat14 ters pertaining to the former official duties of 

15 such person. 

16 TITLE III—FINANCIAL 

17 MANAGEMENT 

18 SEC. 301. INCENTIVES FOR ACHIEVING AUDITABILITY. 

19 (a) PREFERENTIAL TREATMENT AUTHORIZED.—The 

20 Under Secretary of Defense (Comptroller) shall ensure 

21 that any component of the Department of Defense that 

22 the Under Secretary determines has financial statements 

23 validated as ready for audit earlier than September 30, 

24 2017, shall receive preferential treatment, as the Under 

25 Secretary determines appropriate— 
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1 (1) in financial matter matters, including— 

2 (A) consistent with the need to fund ur3 gent warfighter requirements and operational 

4 needs, priority in the release of appropriated 

5 funds to such component; 

6 (B) relief from the frequency of financial 

7 reporting of such component in cases in which 

8 such reporting is not required by law; 

9 (C) relief from departmental obligation and 

10 expenditure thresholds to the extent that such 

11 thresholds establish requirements more restric12 tive than those required by law; or 

13 (D) such other measures as the Under 

14 Secretary considers appropriate; and 

15 (2) in the availability of personnel management 

16 incentives, including— 

17 (A) the size of the bonus pool available to 

18 the financial and business management work19 force of the component; 

20 (B) the rates of promotion within the fi21 nancial and business management workforce of 

22 the component; 

23 (C) awards for excellence in financial and 

24 business management; or 
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1 (D) the scope of work assigned to the fi2 nancial and business management workforce of 

3 the component. 

4 (b) INCLUSION OF INFORMATION IN REPORT.—The 

5 Under Secretary shall include information on any measure 

6 initiated pursuant to this section in the next semiannual 

7 report pursuant to section 1003(b) of the National De8 fense Authorization Act for Fiscal Year 2010 (Public Law 

9 111–84; 123 Stat. 2439; 10 U.S.C. 2222 note) after such 

10 measure is initiated. 

11 (c) EXPIRATION.—This section shall expire on Sep12 tember 30, 2017. 

13 (d) DEFINITION.—In this section, the term ‘‘compo14 nent of the Department of Defense’’ means any organiza15 tion within the Department of Defense that is required 

16 to submit an auditable financial statement to the Sec17 retary of Defense. 

18 SEC. 302. MEASURES REQUIRED AFTER FAILURE TO 

19 ACHIEVE AUDITABILITY. 

20 (a) IN GENERAL.—The Secretary of Defense shall 

21 ensure that corrective measures are immediately taken to 

22 address the failure of a component of the Department of 

23 Defense to achieve a financial statement validated as 

24 ready for audit by September 30, 2017. 
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1 (b) MEASURES REQUIRED.—Not later than 180 days 

2 after the date of the enactment of this Act, the Secretary 

3 shall develop and issue guidance detailing measures to be 

4 taken in accordance with subsection (a). Such measures 

5 shall include— 

6 (1) the development of a remediation plan to 

7 ensure the component can achieve a financial state8 ment validated as ready for audit within 1 year; 

9 (2) additional reporting requirements that may 

10 be necessary to mitigate financial risk to the compo11 nent; 

12 (3) delaying the release of appropriated funds 

13 to such component, consistent with the need to fund 

14 urgent warfighter requirements and operational 

15 needs, until such time as the Secretary is assured 

16 that the component will achieve a financial state17 ment validated as ready for audit within 1 year; 

18 (4) specific consequences for key personnel in 

19 order to ensure accountability within the leadership 

20 of the component; and 

21 (5) such other measures as the Secretary con22 siders appropriate. 

23 (c) DEFINITION.—The term ‘‘component’’ of the De24 partment of Defense means any organization within the 
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1 Department of Defense that is required to submit an 

2 auditable financial statement to the Secretary of Defense. 

3 SEC. 303. REVIEW OF OBLIGATION AND EXPENDITURE 

4 THRESHOLDS. 

5 (a) SENSE OF CONGRESS.—It is the sense of Con6 gress that— 

7 (1) Department of Defense program managers 

8 should be encouraged to place a higher priority on 

9 seeking the best value for the Government than on 

10 meeting arbitrary benchmarks for spending; and 

11 (2) actions to carry out paragraph (1) should 

12 be supported by the Department’s leadership at 

13 every level. 

14 (b) POLICY REVIEW.—Not later than 180 days after 

15 the date of the enactment of this Act, the Chief Manage16 ment Officer of the Department of Defense, in coordina17 tion with the Chief Management Officer of each military 

18 department, shall review and update as necessary all rel19 evant policy and instruction regarding obligation and ex20 penditure benchmarks to ensure that such guidance does 

21 not inadvertently prevent achieving the best value for the 

22 Government in the obligation and expenditure of funds. 

23 (c) PROCESS REVIEW.—Not later than 1 year after 

24 the date of the enactment of this Act, the Chief Manage25 ment Officer, in coordination with the Chief Management 
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1 Officer of each military department, the Director of the 

2 Office of Performance Assessment and Root Cause Anal3 ysis, the Under Secretary of Defense (Comptroller), and 

4 the Comptrollers of the military departments, shall con5 duct a comprehensive review of the use and value of obli6 gation and expenditure benchmarks and propose new 

7 benchmarks or processes for tracking financial perform8 ance, including, as appropriate— 

9 (1) increased reliance on individual obligation 

10 and expenditure plans for measuring program finan11 cial performance; 

12 (2) mechanisms to improve funding stability 

13 and to increase the predictability of the release of 

14 funding for obligation and expenditure; and 

15 (3) streamlined mechanisms for a program 

16 manager to submit an appeal for funding changes 

17 and to have such appeal evaluated promptly. 

18 (d) TRAINING.—The Under Secretary of Defense for 

19 Acquisition, Technology, and Logistics and the Under Sec20 retary of Defense (Comptroller) shall ensure that as part 

21 of the training required for program managers and busi22 ness managers, an emphasis is placed on obligating and 

23 expending appropriated funds in a manner that achieves 

24 the best value for the Government and that the purpose 
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1 and limitations of obligation and expenditure benchmarks 

2 are made clear. 

3 SEC. 304. DISCLOSURE AND TRACEABILITY OF THE COST 

4 OF DEPARTMENT OF DEFENSE HEALTH CARE 

5 CONTRACTS. 

6 (a) DISCLOSURE REQUIREMENT.—The Secretary of 

7 Defense shall require— 

8 (1) an offeror that submits a bid or proposal in 

9 response to an invitation for bids or a request for 

10 proposals issued by a component of the Department 

11 of Defense for a health care contract to submit with 

12 the bid or proposal a disclosure of the additional 

13 cost, if any, contained in such bid or proposal associ14 ated with compliance with the Patient Protection 

15 and Affordable Care Act (Public Law 111–148) and 

16 the Health Care and Education Reconciliation Act of 

17 2010 (Public Law 111–152); and 

18 (2) a contractor for a health care contract 

19 awarded following the date of the enactment of this 

20 Act to disclose on an annual basis the additional 

21 cost, if any, incurred for such contract associated 

22 with compliance with the Patient Protection and Af23 fordable Care Act (Public Law 111–148) and the 

24 Health Care and Education Reconciliation Act of 

25 2010 (Public Law 111–152). 
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1 (b) REPORT.— 

2 (1) REQUIREMENT.—Not later than April 1, 

3 2011, and each April 1st thereafter until April 1, 

4 2016, the Secretary of Defense shall submit to the 

5 Committee on Armed Services of the Senate and the 

6 Committee on Armed Services of the House of Rep7 resentatives a detailed report on the additional cost 

8 to the Department of Defense associated with com9 pliance with the Patient Protection and Affordable 

10 Care Act (Public Law 111–148) and the Health 

11 Care and Education Reconciliation Act of 2010 

12 (Public Law 111–152). 

13 (2) MATTERS COVERED.—The report required 

14 by paragraph (1) shall include— 

15 (A) the projected costs of compliance for 

16 all health care contracts awarded during the 

17 preceding year, as disclosed in a bid or proposal 

18 in accordance with subsection (a)(1); 

19 (B) for all other health care contracts, the 

20 incurred cost of compliance for the preceding 

21 year, as disclosed in accordance with subsection 

22 (a)(2); and 

23 (C) any additional costs to the Department 

24 of Defense necessary to comply with such Acts. 
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1 (c) HEALTH CARE CONTRACT DEFINED.—In this 

2 section, the term ‘‘health care contract’’ means a contract 

3 in an amount greater than the simplified acquisition 

4 threshold for the acquisition of any of the following: 

5 (1) Medical supplies. 

6 (2) Health care services and administration, in7 cluding the services of medical personnel. 

8 (3) Durable medical equipment. 

9 (4) Pharmaceuticals. 

10 (5) Health care-related information technology. 

11 TITLE IV—INDUSTRIAL BASE 

12 SEC. 401. EXPANSION OF THE INDUSTRIAL BASE. 

13 (a) PROGRAM TO EXPAND INDUSTRIAL BASE RE14 QUIRED.—The Secretary of Defense shall establish a pro15 gram to expand the industrial base of the Department of 

16 Defense to increase the Department’s access to innovation 

17 and the benefits of competition. The program shall be lim18 ited to firms within the national technology and industrial 

19 base (as defined in section 2500(1) of title 10, United 

20 States Code). 

21 (b) IDENTIFYING AND COMMUNICATING WITH NON22 TRADITIONAL SUPPLIERS.—The program established 

23 under subsection (a) shall use tools and resources available 

24 within the Federal Government and available from the pri25 vate sector, to provide a capability for identifying and 
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1 communicating with nontraditional suppliers, including 

2 commercial firms and firms of all business sizes, that are 

3 engaged in markets of importance to the Department of 

4 Defense. 

5 (c) OUTREACH TO LOCAL FIRMS NEAR DEFENSE IN6 STALLATIONS.—The program established under sub7 section (a) shall include outreach, using procurement tech8 nical assistance centers, to notify firms of all business 

9 sizes in the vicinity of Department of Defense installations 

10 of opportunities to obtain contracts and subcontracts to 

11 perform work at such installations. 

12 (d) INDUSTRIAL BASE REVIEW.—The program re13 quired by subsection (a) shall include a continuous effort 

14 to review the industrial base supporting the Department 

15 of Defense, including the identification of markets of im16 portance to the Department of Defense. 

17 (e) DEFINITION.—In this section: 

18 (1) NONTRADITIONAL SUPPLIERS.—The term 

19 ‘‘nontraditional suppliers’’ means firms that have re20 ceived contracts from the Department of Defense 

21 with a total value of not more than $100,000 in the 

22 previous 5 years. 

23 (2) MARKETS OF IMPORTANCE TO THE DE24 PARTMENT OF DEFENSE.—The term ‘‘markets of 

25 importance to the Department of Defense’’ means 
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1 industrial sectors in which the Department of De2 fense spends more than $500,000,000 annually. 

3 (3) PROCUREMENT TECHNICAL ASSISTANCE

4 CENTER.—The term ‘‘procurement technical assist5 ance center’’ means a center operating under a coop6 erative agreement with the Defense Logistics Agency 

7 to provide procurement technical assistance pursu8 ant to the authority provided in chapter 142 of title 

9 10, United States Code. 

10 SEC. 402. COMMERCIAL PRICING ANALYSIS. 

11 Section 803(c) of the Strom Thurmond National De12 fense Authorization Act for Fiscal Year 1999 (Public Law 

13 105–261; 10 U.S.C. 2306a note) is amended to read as 

14 follows: 

15 ‘‘(c) COMMERCIAL PRICE TREND ANALYSIS.— 

16 ‘‘(1) The Secretary of Defense shall develop and 

17 implement procedures that, to the maximum extent 

18 practicable, provide for the collection and analysis of 

19 information on price trends for categories of exempt 

20 commercial items described in paragraph (2). 

21 ‘‘(2) A category of exempt commercial items re22 ferred to in paragraph (1) consists of exempt com23 mercial items that are in a single Federal Supply 

24 Group or Federal Supply Class, are provided by a 

25 single contractor, or are otherwise logically grouped 
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1 for the purpose of analyzing information on price 

2 trends. 

3 ‘‘(3) The analysis of information on price 

4 trends under paragraph (1) shall include, in any cat5 egory in which significant escalation in prices is 

6 identified, a more detailed examination of the causes 

7 of escalation for such prices within the category and 

8 whether such price escalation is consistent across the 

9 Department of Defense. 

10 ‘‘(4) The head of a Department of Defense 

11 agency or the Secretary of a military department 

12 shall take appropriate action to address any unjusti13 fied escalation in prices being paid for items pro14 cured by that agency or military department as iden15 tified in an analysis conducted pursuant to para16 graph (1). 

17 ‘‘(5) Not later than April 1 of each of year, the 

18 Secretary of Defense shall submit to the Committee 

19 on Armed Services of the Senate and the Committee 

20 on Armed Services of the House of Representatives 

21 a report on the analyses of price trends that were 

22 conducted for categories of exempt commercial items 

23 during the preceding fiscal year under the proce24 dures prescribed pursuant to paragraph (1). The re25 port shall include a description of the actions taken 
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1 to identify and address any unjustified price esca2 lation for the categories of items. 

3 ‘‘(6) This subsection shall not be in effect on 

4 and after April 1, 2013.’’. 

5 SEC. 403. CONTRACTOR AND GRANTEE DISCLOSURE OF DE6 LINQUENT FEDERAL TAX DEBTS. 

7 (a) REQUIREMENT.— 

8 (1) IN GENERAL.—Chapter 37 of title 31, 

9 United States Code, is amended by adding at the 

10 end of subchapter II the following new section: 

11 ‘‘§ 3720F. Contractor and grantee disclosure of delin12 quent Federal tax debts 

13 ‘‘(a) REQUIREMENT RELATING TO CONTRACTS.— 

14 The head of any executive agency that issues an invitation 

15 for bids or a request for proposals for a contract in an 

16 amount greater than the simplified acquisition threshold 

17 shall require each person that submits a bid or proposal 

18 to submit with the bid or proposal a form— 

19 ‘‘(1) certifying that the person does not have a 

20 seriously delinquent tax debt; and 

21 ‘‘(2) authorizing the Secretary of the Treasury 

22 to disclose to the head of the agency information 

23 strictly limited to verifying whether the person has 

24 a seriously delinquent tax debt. 
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1 ‘‘(b) REQUIREMENT RELATING TO GRANTS.—The 

2 head of any executive agency that offers a grant in excess 

3 of an amount equal to the simplified acquisition threshold 

4 may not award such grant to any person unless such per5 son submits with the application for such grant a form— 

6 ‘‘(1) certifying that the person does not have a 

7 seriously delinquent tax debt; and 

8 ‘‘(2) authorizing the Secretary of the Treasury 

9 to disclose to the head of the executive agency infor10 mation strictly limited to verifying whether the per11 son has a seriously delinquent tax debt. 

12 ‘‘(c) FORM FOR RELEASE OF INFORMATION.—The 

13 Secretary of the Treasury shall make available to all exec14 utive agencies a standard form for the certification and 

15 authorization described in subsections (a) and (b). 

16 ‘‘(d) DEFINITIONS.—In this section: 

17 ‘‘(1) CONTRACT.—The term ‘contract’ means a 

18 binding agreement entered into by an executive 

19 agency for the purpose of obtaining property or serv20 ices, but does not include— 

21 ‘‘(A) a contract for property or services 

22 that is intended to be entered into through the 

23 use of procedures other than competitive proce24 dures by reason of section 2304(c)(2) of this 

25 title; or 
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1 ‘‘(B) a contract designated by the head of 

2 the agency as necessary to the national security 

3 of the United States. 

4 ‘‘(2) EXECUTIVE AGENCY.—The term ‘executive 

5 agency’ has the meaning given that term in section 

6 4(1) of the Office of Federal Procurement Policy 

7 Act (41 U.S.C. 403(1)). 

8 ‘‘(3) PERSON.—The term ‘person’ includes— 

9 ‘‘(A) an individual; 

10 ‘‘(B) a partnership; and 

11 ‘‘(C) a corporation. 

12 ‘‘(4) SERIOUSLY DELINQUENT TAX DEBT.—The 

13 term ‘seriously delinquent tax debt’— 

14 ‘‘(A) means any Federal tax liability— 

15 ‘‘(i) that exceeds $3,000; 

16 ‘‘(ii) that has been assessed by the 

17 Secretary of the Treasury and not paid; 

18 and 

19 ‘‘(iii) for which a notice of lien has 

20 been filed in public records; and 

21 ‘‘(B) does not include any Federal tax li22 ability— 

23 ‘‘(i) being paid in a timely manner 

24 under an offer-in-compromise or install25 ment agreement; 
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1 ‘‘(ii) with respect to which collection 

2 due process proceedings are not completed; 

3 or 

4 ‘‘(iii) with respect to which collection 

5 due process proceedings are completed and 

6 no further payment is required. 

7 ‘‘(5) SIMPLIFIED ACQUISITION THRESHOLD.— 

8 The term ‘simplified acquisition threshold’ has the 

9 meaning given that term in section 4(11) of the Of10 fice of Federal Procurement Policy Act (41 U.S.C. 

11 403(11)). 

12 ‘‘(e) REGULATIONS.—The Administrator for Federal 

13 Procurement Policy, in consultation with the Secretary of 

14 the Treasury, shall promulgate regulations that— 

15 ‘‘(1) treat corporations and partnerships as 

16 having a seriously delinquent tax debt if such cor17 poration or partnership is controlled (directly or in18 directly) by persons who have a seriously delinquent 

19 tax debt; 

20 ‘‘(2) provide for the proper application of sub21 sections (a)(2) and (b)(2) in the case of corporations 

22 and partnerships; and 

23 ‘‘(3) provide for the proper application of sub24 section (a) to first-tier subcontractors that are iden-
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1 tified in a bid or proposal and are a significant part 

2 of a bid or proposal team.’’. 

3 (2) CLERICAL AMENDMENT.—The table of sec4 tions at the beginning of chapter 37 of such title is 

5 amended by adding after the item relating to section 

6 3720E the following new item: 

‘‘3720F. Contractor and grantee disclosure of delinquent Federal tax debts.’’. 

7 (b) REVISION OF FEDERAL ACQUISITION REGULA8 TION.—Not later than 90 days after the final promulga9 tion of regulations under section 3720F(e) of title 31, 

10 United States Code, as added by subsection (a), the Fed11 eral Acquisition Regulation shall be revised to incorporate 

12 the requirements of section 3720F of such title. 

13 SEC. 404. INDEPENDENCE OF CONTRACT AUDITS AND BUSI14 NESS SYSTEM REVIEWS. 

15 (a) DEFENSE CONTRACT AUDIT AGENCY GENERAL

16 COUNSEL.— 

17 (1) IN GENERAL.—Subchapter II of chapter 8 

18 of title 10, United States Code, is amended by add19 ing at the end the following new section: 

20 ‘‘§ 204. Defense Contract Audit Agency general coun21 sel 

22 ‘‘(a) GENERAL COUNSEL.—The Director of the De23 fense Contract Audit Agency shall appoint a General 

24 Counsel of the Defense Contract Audit Agency. 
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1 ‘‘(b) DUTIES.—(1) The General Counsel shall per2 form such functions as the Director may prescribe and 

3 shall serve at the discretion of the Director. 

4 ‘‘(2) Notwithstanding section 140(b) of this title, the 

5 General Counsel shall be the chief legal officer of the De6 fense Contract Audit Agency. 

7 ‘‘(3) The Defense Contract Audit Agency shall be the 

8 exclusive legal client of the General Counsel. 

9 ‘‘(c) OFFICE OF THE GENERAL COUNSEL.—There is 

10 established an Office of the General Counsel within the 

11 Defense Contract Audit Agency. The Director may ap12 point to the Office to serve as staff of the General Counsel 

13 such legal counsel as the Director determines is appro14 priate.’’. 

15 (2) CLERICAL AMENDMENT.—The table of sec16 tions at the beginning of subchapter II of chapter 8 

17 of such title is amended by adding at the end the 

18 following new item: 

‘‘204. Defense Contract Audit Agency general counsel.’’. 

19 (b) CRITERIA FOR BUSINESS SYSTEM REVIEWS.— 

20 (1) IN GENERAL.—Chapter 131 of title 10, 

21 United States Code, is amended by inserting after 

22 section 2222 the following new section: 

23 ‘‘§ 2222a. Criteria for business system reviews 

24 ‘‘(a) CRITERIA FOR BUSINESS SYSTEM REVIEWS.— 

25 The Secretary of Defense shall ensure that any contractor 
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1 business system review carried out by a military depart2 ment, a Defense Agency, or a Department of Defense 

3 Field Activity— 

4 ‘‘(1) complies with generally accepted govern5 ment auditing standards issued by the Comptroller 

6 General; 

7 ‘‘(2) is performed by an audit team that does 

8 not engage in any other official activity (audit-re9 lated or otherwise) involving the contractor con10 cerned; 

11 ‘‘(3) is performed in a time and manner con12 sistent with a documented assessment of risk to the 

13 Federal Government; and 

14 ‘‘(4) involves testing on a representative sample 

15 of transactions sufficient to fully examine the integ16 rity of the contractor business system concerned. 

17 ‘‘(b) CONTRACTOR BUSINESS SYSTEM REVIEW DE18 FINED.—In this section, the term ‘contractor business sys19 tem review’ means an audit of policies, procedures, and 

20 internal controls relating to accounting and management 

21 systems of a contractor.’’. 

22 (2) CLERICAL AMENDMENT.—The table of sec23 tions at the beginning of chapter 131 of such title 

24 is amended by inserting after the item relating to 

25 section 2222 the following new item: 

‘‘2222a. Criteria for business system reviews.’’. 
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1 (c) CONTRACT AUDIT GUIDANCE.—Not later than 

2 180 days after the date of the enactment of this Act, the 

3 Secretary of Defense shall issue guidance relating to con4 tract audits carried out by a military department, a de5 fense agency, or a Department of Defense field activity 

6 that are not contractor business system reviews, as de7 scribed under section 2222a of title 10, United States 

8 Code, that— 

9 (1) requires that such audits comply with gen10 erally accepted government auditing standards 

11 issued by the Comptroller General and are per12 formed in a time and manner consistent with a doc13 umented assessment of risk to the Federal Govern14 ment; 

15 (2) establishes guidelines for discussions of the 

16 scope of the audit with the contractor concerned 

17 that ensure that such scope is not improperly influ18 enced by the contractor; 

19 (3) provides for withholding of contract pay20 ments when necessary to compel the submission of 

21 documentation from the contractor; and 

22 (4) requires that the results of contract audits 

23 performed on behalf of an agency of the Department 

24 of Defense be shared with other Federal agencies 

25 upon request, without reimbursement. 
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1 (d) EFFECTIVE DATES.— 

2 (1) SECTION 204.—Section 204 of title 10, 

3 United States Code, as added by subsection (a), 

4 shall take effect on the date of the enactment of this 

5 Act. 

6 (2) SECTION 2222A.—Section 2222a of title 10, 

7 United States Code, as added by subsection (b), 

8 shall take effect 180 days after the date of the en9 actment of this Act. 

10 SEC. 405. BLUE RIBBON PANEL ON ELIMINATING BARRIERS 

11 TO CONTRACTING WITH THE DEPARTMENT 

12 OF DEFENSE. 

13 (a) REQUIREMENT TO ESTABLISH.—The Secretary 

14 of Defense shall establish a panel consisting of owners of 

15 large and small businesses that are not traditional defense 

16 suppliers, for purposes of creating a set of recommenda17 tions on eliminating barriers to contracting with the De18 partment of Defense and its defense supply centers. 

19 (b) MEMBERS.—The panel shall consist of nine mem20 bers, of whom— 

21 (1) three shall be appointed by the Secretary of 

22 the Army; 

23 (2) three shall be appointed by the Secretary of 

24 the Navy; and 
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1 (3) three shall be appointed by the Secretary of 

2 the Air Force. 

3 (c) APPOINTMENT DEADLINE.—Members shall be 

4 appointed to the panel not later than 180 days after the 

5 date of the enactment of this Act. 

6 (d) DUTIES.—The panel shall be responsible for de7 veloping a set of recommendations on eliminating barriers 

8 to contracting with the Department of Defense and its de9 fense supply centers. 

10 (e) REPORT.—Not later than 1 year after the date 

11 of the enactment of this Act, the panel shall submit to 

12 Congress a report containing its recommendations. 

13 SEC. 406. INCLUSION OF THE PROVIDERS OF SERVICES 

14 AND INFORMATION TECHNOLOGY IN THE NA15 TIONAL TECHNOLOGY AND INDUSTRIAL 

16 BASE. 

17 (a) REVISED DEFINITIONS.—Section 2500 of title 

18 10, United States Code, is amended— 

19 (1) in paragraph (1), by striking ‘‘or mainte20 nance’’ and inserting ‘‘integration, services, or infor21 mation technology’’; 

22 (2) in paragraph (4), by striking ‘‘or produc23 tion’’ and inserting ‘‘production, integration, serv24 ices, or information technology’’; 
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1 (3) in paragraph (9)(A), by striking ‘‘and man2 ufacturing’’ and inserting ‘‘manufacturing, integra3 tion, services, and information technology’’; and 

4 (4) by adding at the end the following new 

5 paragraph: 

6 ‘‘(15) The term ‘integration’ means the process 

7 of providing systems engineering and technical direc8 tion for a system for the purpose of achieving capa9 bilities that satisfy program requirements.’’. 

10 (b) REVISED OBJECTIVES.—Section 2501(a) of such 

11 title is amended— 

12 (1) in paragraph (1), by striking ‘‘Supplying 

13 and equipping’’ and inserting ‘‘Supplying, equipping, 

14 and supporting’’; 

15 (2) in paragraph (2), by striking ‘‘and logistics 

16 for’’ and inserting ‘‘logistics, and other activities in 

17 support of’’; 

18 (3) in paragraph (4), by striking ‘‘and produce’’ 

19 and inserting ‘‘, produce, and support’’; and 

20 (4) by redesignating paragraph (6) as para21 graph (8) and inserting after paragraph (5) the fol22 lowing new paragraphs: 

23 ‘‘(6) Providing for the generation of services ca24 pabilities that are not core functions of the armed 
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1 forces and that are critical to military operations 

2 within the national technology and industrial base. 

3 ‘‘(7) Providing for the development, production, 

4 and integration of information technology within the 

5 national technology and industrial base.’’. 

6 (c) REVISED ASSESSMENTS.—Section 2505(b)(4) of 

7 such title is amended by inserting after ‘‘of this title)’’ 

8 the following ‘‘or major automated information systems 

9 (as defined in section 2445a of this title)’’. 

10 (d) REVISED POLICY GUIDANCE.—Section 2506(a) 

11 of such title is amended by striking ‘‘budget allocation, 

12 weapons’’ and inserting ‘‘strategy, management, budget 

13 allocation,’’. 

14 SEC. 407. CONSTRUCTION OF ACT ON COMPETITION RE15 QUIREMENTS FOR THE ACQUISITION OF 

16 SERVICES. 

17 Nothing in this Act or the amendments made by this 

18 Act shall be construed to affect the competition require19 ments of section 2304 of title 10, United States Code, with 

20 respect to the acquisition of services. 

21 SEC. 408. ACQUISITION SAVINGS PROGRAM. 

22 (a) PROGRAM REQUIRED.— 

23 (1) IN GENERAL.—The Secretary of Defense, 

24 acting through the Under Secretary of Defense for 

25 Acquisition, Technology, and Logistics, shall carry 
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1 out a program to provide opportunities to provide 

2 cost-savings on nondevelopmental items. 

3 (2) SAVINGS.—The program, to be known as 

4 the Acquisition Savings Program, shall provide any 

5 person or activity within or outside the Department 

6 of Defense with the opportunity to offer a proposal 

7 to provide savings in excess of 15 percent, to be 

8 known as an acquisition savings proposal, for cov9 ered contracts. 

10 (3) SUNSET.—The program shall cease to be 

11 required on September 30, 2013. 

12 (b) QUALIFYING ACQUISITION SAVINGS PRO13 POSALS.—A proposal shall qualify as an acquisition sav14 ings proposal for purposes of this section if it offers to 

15 supply a nondevelopmental item that is identical to, or 

16 equivalent to (under a performance specification or rel17 evant commercial standard), an item being procured under 

18 a covered contract. 

19 (c) REVIEW BY CONTRACTING OFFICER.—Each ac20 quisition savings proposal shall be reviewed by the con21 tracting officer for the covered contract concerned to de22 termine if such proposal qualifies under this section and 

23 to calculate the savings provided by such proposal. 

24 (d) ACTIONS UPON FAVORABLE REVIEW.—If the 

25 contracting officer for a covered contract determines after 
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1 review of an acquisition savings proposal that the proposal 

2 would provide an identical or equivalent nondevelopmental 

3 item at a savings in excess of 15 percent, and that a con4 tract award to the offeror of the proposal would not result 

5 in the violation of a minimum purchase agreement or oth6 erwise cause a breach of contract for the covered contract, 

7 the contracting officer may make an award under the cov8 ered contract to the offeror of the acquisition savings pro9 posal or otherwise award a contract for the nondevelop10 mental item concerned to such offeror. 

11 (e) ACTIONS UPON UNFAVORABLE REVIEW.—If a 

12 contracting officer determines after review of an acquisi13 tion savings proposal that the proposal would not satisfy 

14 the requirements of this section, the contracting officer 

15 shall debrief the person or activity offering such proposal 

16 within 30 days after completion of the review. 

17 (f) REPORT.—Not later than March 1, 2013, the Sec18 retary of Defense shall submit to the Committees on 

19 Armed Services of the Senate and House of Representa20 tives a report regarding the program, including the num21 ber of acquisition savings proposals submitted, the number 

22 favorably reviewed, the cumulative savings, and any fur23 ther recommendations for the program. 

24 (g) DEFINITIONS.—In this section: 
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1 (1) NONDEVELOPMENTAL ITEM.—The term 

2 ‘‘nondevelopmental item’’ has the meaning provided 

3 for such term in section 4 of the Office of Federal 

4 Procurement Policy Act (41 U.S.C. 403). 

5 (2) COVERED CONTRACT.—The term ‘‘covered 

6 contract’’— 

7 (A) means an indefinite delivery indefinite 

8 quantity contract for property as defined in sec9 tion 2304d(2) of title 10, United States Code; 

10 and 

11 (B) does not include any contract awarded 

12 under an exception to competitive acquisition 

13 authorized by the Small Business Act (15 

14 U.S.C. 631 et seq.) 

15 (3) PERFORMANCE SPECIFICATION.—The term 

16 ‘‘performance specification’’ means a specification of 

17 required item functional characteristics. 

18 (4) COMMERCIAL STANDARD.—The term ‘‘com19 mercial standard’’ means a standard used in indus20 try promulgated by an accredited standards organi21 zations that is not a Federal entity. 
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1 SEC. 409. SENSE OF CONGRESS REGARDING COMPLIANCE 

2 WITH THE BERRY AMENDMENT, THE BUY 

3 AMERICAN ACT, AND LABOR STANDARDS OF 

4 THE UNITED STATES. 

5 In order to create jobs, level the playing field for do6 mestic manufacturers, and strengthen economic recovery, 

7 it is the sense of Congress that the Department of Defense 

8 should— 

9 (1) ensure full contractor and subcontractor 

10 compliance with the Berry Amendment (10 U.S.C. 

11 2533a) and the Buy American Act (41 U.S.C. 10a 

12 et seq.); and 

13 (2) not procure products made by manufactur14 ers in the United States that violate labor standards 

15 as defined under the laws of the United States. 

16 SEC. 410. INDUSTRIAL BASE COUNCIL AND FUND. 

17 (a) INDUSTRIAL BASE COUNCIL.— 

18 (1) IN GENERAL.—Chapter 7 of title 10, United 

19 States Code, is amended by adding at the end the 

20 following new section: 

21 ‘‘§ 188. Industrial Base Council 

22 ‘‘(a) COUNCIL ESTABLISHED.—There is in the De23 partment of Defense an Industrial Base Council. 

24 ‘‘(b) MISSION.—The mission of the Industrial Base 

25 Council is to assist the Secretary in all matters pertaining 

26 to the industrial base of the Department of Defense, in-
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1 cluding matters pertaining to the national defense tech2 nology and industrial base included in chapter 148 of this 

3 title. 

4 ‘‘(c) MEMBERSHIP.—The following officials of the 

5 Department of Defense shall be members of the Council: 

6 ‘‘(1) The Chairman of the Council, who shall be 

7 the Under Secretary of Defense for Acquisition, 

8 Technology, and Logistics, the functions of which 

9 may be delegated by the Under Secretary only to the 

10 Principal Deputy Under Secretary of Defense for 

11 Acquisition, Technology, and Logistics. 

12 ‘‘(2) The Executive Director of the Council, 

13 who shall be an official from within the Office of the 

14 Under Secretary responsible for industrial base mat15 ters and who shall report directly to the Under Sec16 retary or the Principal Deputy Under Secretary. 

17 ‘‘(3) Officials from within the Office of the Sec18 retary of Defense, as designated by the Secretary, 

19 with direct responsibility for matters pertaining to 

20 following areas: 

21 ‘‘(A) Manufacturing. 

22 ‘‘(B) Research and development. 

23 ‘‘(C) Systems engineering and system inte24 gration. 

25 ‘‘(D) Services. 
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1 ‘‘(E) Information Technology. 

2 ‘‘(F) Sustainment and logistics. 

3 ‘‘(4) The Director of the Defense Logistics 

4 Agency. 

5 ‘‘(5) Officials from the military departments, as 

6 designated by the Secretary of each military depart7 ment, with responsibility for industrial base matters 

8 relevant to the military department concerned. 

9 ‘‘(d) DUTIES.—The Council shall assist the Secretary 

10 in the following: 

11 ‘‘(1) Providing input on industrial base matters 

12 to strategy reviews, including quadrennial defense 

13 reviews performed pursuant to section 118 of this 

14 title. 

15 ‘‘(2) Managing the industrial base. 

16 ‘‘(3) Providing recommendations to the Sec17 retary on budget matters pertaining to the industrial 

18 base. 

19 ‘‘(4) Providing recommendations to the Sec20 retary on supply chain management and supply 

21 chain vulnerability. 

22 ‘‘(5) Providing input on industrial base matters 

23 to defense acquisition policy guidance. 
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1 ‘‘(6) Issuing and revising the Department of 

2 Defense technology and industrial base guidance re3 quired by section 2506 of this title. 

4 ‘‘(7) Such other duties as are assigned by the 

5 Secretary. 

6 ‘‘(e) REPORTING OF ACTIVITIES.—The Secretary 

7 shall include a section describing the activities of the 

8 Council in the annual report to Congress required by sec9 tion 2505 of this title.’’. 

10 (2) CLERICAL AMENDMENT.—The table of sec11 tions at the beginning of such chapter is amended 

12 by adding at the end the following new item: 

‘‘188. Industrial Base Council.’’. 

13 (b) INDUSTRIAL BASE FUND.— 

14 (1) IN GENERAL.—Chapter 148 of title 10, 

15 United States Code, is amended by adding at the 

16 end the following new section: 

17 ‘‘§ 2508. Industrial Base Fund 

18 ‘‘(a) ESTABLISHMENT.—The Secretary of Defense 

19 shall establish an Industrial Base Fund (in this section 

20 referred to as the ‘Fund’). 

21 ‘‘(b) CONTROL OF FUND.—The Fund shall be under 

22 the control of the Industrial Base Council established pur23 suant to section 188 of this title. 
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1 ‘‘(c) AMOUNTS IN FUND.—The Fund shall consist of 

2 amounts appropriated or otherwise made available to the 

3 Fund. 

4 ‘‘(d) USE OF FUND.—Subject to subsection (e), the 

5 Fund shall be used— 

6 ‘‘(1) to support the monitoring and assessment 

7 of the industrial base required by this chapter; 

8 ‘‘(2) to address critical issues in the industrial 

9 base relating to urgent operation needs; 

10 ‘‘(3) to support efforts to expand the industrial 

11 base; and 

12 ‘‘(4) to address supply chain vulnerabilities. 

13 ‘‘(e) USE OF FUND SUBJECT TO APPROPRIATIONS.— 

14 The authority of the Secretary of Defense to use the Fund 

15 under this section in any fiscal year is subject to the avail16 ability of appropriations for that purpose. 

17 ‘‘(f) EXPENDITURES.—The Secretary shall establish 

18 procedures for expending monies in the Fund in support 

19 of the uses identified in subsection (d), including the fol20 lowing: 

21 ‘‘(1) Direct obligations from the Fund. 

22 ‘‘(2) Transfers of monies from the Fund to rel23 evant appropriations of the Department of De24 fense.’’. 
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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions at the beginning of such chapter is amended 

3 by adding at the end the following new item: 

‘‘2508. Industrial Base Fund.’’. 

4 TITLE V—OTHER MATTERS 

5 SEC. 501. CLOTHING ALLOWANCE REQUIREMENT. 

6 The Comptroller General shall conduct a study of the 

7 items purchased under section 418 of title 37, United 

8 States Code, to determine if there is sufficient domestic 

9 production of such items to adequately supply members 

10 of the Armed Forces and shall transmit the results of such 

11 study to the Secretary of Defense. Not later than 6 

12 months after receiving the results of such study, the Sec13 retary of Defense shall transmit to the Committees on 

14 Armed Services of the Senate and the House of Represent15 atives an evaluation on whether such items under the 

16 study should be considered subject to section 2533a of 

17 title 10, United States Code (popularly known as the 

18 ‘‘Berry Amendment’’). 

19 SEC. 502. REQUIREMENT THAT COST OR PRICE TO THE 

20 FEDERAL GOVERNMENT BE GIVEN AT LEAST 

21 EQUAL IMPORTANCE AS TECHNICAL OR 

22 OTHER CRITERIA IN EVALUATING COMPETI23 TIVE PROPOSALS FOR DEFENSE CONTRACTS. 

24 (a) REQUIREMENT.—Subparagraph (A) of section 

25 2305(a)(3) of title 10, United States Code, is amended 
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1 by striking ‘‘proposals; and’’ at the end of clause (ii) and 

2 all that follows through the end of the subparagraph and 

3 inserting the following: ‘‘proposals and that must be as4 signed importance at least equal to all evaluation factors 

5 other than cost or price when combined.’’. 

6 (b) WAIVER.—Section 2305(a)(3) of such title is fur7 ther amended by striking subparagraph (B) and inserting 

8 the following: 

9 ‘‘(B) The requirement of subparagraph (A)(ii) relat10 ing to assigning at least equal importance to evaluation 

11 factors of cost or price may be waived by the head of the 

12 agency. The authority to issue a waiver under this sub13 paragraph may not be delegated.’’. 

14 (c) REPORT.—Section 2305(a)(3) of such title is fur15 ther amended by adding at the end the following new sub16 paragraph: 

17 ‘‘(C) Not later than 180 days after the end of each 

18 fiscal year, the Secretary of Defense shall submit to Con19 gress, and post on a publicly available website of the De20 partment of Defense, a report containing a list of each 
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1 waiver issued by the head of an agency under subpara2 graph (B) during the preceding fiscal year.’’. 

Passed the House of Representatives April 28, 2010. 

Attest: 

Clerk. 

111TH CONGRESS 

2D SESSION H. R. 5013 

AN ACT 

To amend title 10, United States Code, to provide 

quisition system, and for other purposes. for performance management of the defense ac-