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(b) MEASURES REQUIRED.—Not later than 180 days 
after the date of the enactment of this Act, the Secretary 
shall develop and issue guidance detailing measures to be 
taken in accordance with subsection (a). Such measures 
shall include— 
(1) the development of a remediation plan to 
ensure the component can achieve a financial state-
ment validated as ready for audit within 1 year; 
(2) additional reporting requirements that may 
be necessary to mitigate financial risk to the compo-
nent; 
(3) delaying the release of appropriated funds 
to such component, consistent with the need to fund 
urgent warfighter requirements and operational 
needs, until such time as the Secretary is assured 
that the component will achieve a financial state-
ment validated as ready for audit within 1 year; 
(4) specific consequences for key personnel in 
order to ensure accountability within the leadership 
of the component; and 
(5) such other measures as the Secretary con-
siders appropriate. 
(c) DEFINITION.—The term ‘‘component’’ of the De-
partment of Defense means any organization within the 
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Department of Defense that is required to submit an 
auditable financial statement to the Secretary of Defense. 
SEC. 303. REVIEW OF OBLIGATION AND EXPENDITURE 
THRESHOLDS. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) Department of Defense program managers 
should be encouraged to place a higher priority on 
seeking the best value for the Government than on 
meeting arbitrary benchmarks for spending; and 
(2) actions to carry out paragraph (1) should 
be supported by the Department’s leadership at 
every level. 
(b) POLICY REVIEW.—Not later than 180 days after 
the date of the enactment of this Act, the Chief Manage-
ment Officer of the Department of Defense, in coordina-
tion with the Chief Management Officer of each military 
department, shall review and update as necessary all rel-
evant policy and instruction regarding obligation and ex-
penditure benchmarks to ensure that such guidance does 
not inadvertently prevent achieving the best value for the 
Government in the obligation and expenditure of funds. 
(c) PROCESS REVIEW.—Not later than 1 year after 
the date of the enactment of this Act, the Chief Manage-
ment Officer, in coordination with the Chief Management 
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Officer of each military department, the Director of the 
Office of Performance Assessment and Root Cause Anal-
ysis, the Under Secretary of Defense (Comptroller), and 
the Comptrollers of the military departments, shall con-
duct a comprehensive review of the use and value of obli-
gation and expenditure benchmarks and propose new 
benchmarks or processes for tracking financial perform-
ance, including, as appropriate— 
(1) increased reliance on individual obligation 
and expenditure plans for measuring program finan-
cial performance; 
(2) mechanisms to improve funding stability 
and to increase the predictability of the release of 
funding for obligation and expenditure; and 
(3) streamlined mechanisms for a program 
manager to submit an appeal for funding changes 
and to have such appeal evaluated promptly. 
(d) TRAINING.—The Under Secretary of Defense for 
Acquisition, Technology, and Logistics and the Under Sec-
retary of Defense (Comptroller) shall ensure that as part 
of the training required for program managers and busi-
ness managers, an emphasis is placed on obligating and 
expending appropriated funds in a manner that achieves 
the best value for the Government and that the purpose 
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and limitations of obligation and expenditure benchmarks 
are made clear. 
SEC. 304. DISCLOSURE AND TRACEABILITY OF THE COST 
OF DEPARTMENT OF DEFENSE HEALTH CARE 
CONTRACTS. 
(a) DISCLOSURE REQUIREMENT.—The Secretary of 
Defense shall require— 
(1) an offeror that submits a bid or proposal in 
response to an invitation for bids or a request for 
proposals issued by a component of the Department 
of Defense for a health care contract to submit with 
the bid or proposal a disclosure of the additional 
cost, if any, contained in such bid or proposal associ-
ated with compliance with the Patient Protection 
and Affordable Care Act (Public Law 111–148) and 
the Health Care and Education Reconciliation Act of 
2010 (Public Law 111–152); and 
(2) a contractor for a health care contract 
awarded following the date of the enactment of this 
Act to disclose on an annual basis the additional 
cost, if any, incurred for such contract associated 
with compliance with the Patient Protection and Af-
fordable Care Act (Public Law 111–148) and the 
Health Care and Education Reconciliation Act of 
2010 (Public Law 111–152). 
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(b) REPORT.— 
(1) REQUIREMENT.—Not later than April 1, 
2011, and each April 1st thereafter until April 1, 
2016, the Secretary of Defense shall submit to the 
Committee on Armed Services of the Senate and the 
Committee on Armed Services of the House of Rep-
resentatives a detailed report on the additional cost 
to the Department of Defense associated with com-
pliance with the Patient Protection and Affordable 
Care Act (Public Law 111–148) and the Health 
Care and Education Reconciliation Act of 2010 
(Public Law 111–152). 
(2) MATTERS COVERED.—The report required 
by paragraph (1) shall include— 
(A) the projected costs of compliance for 
all health care contracts awarded during the 
preceding year, as disclosed in a bid or proposal 
in accordance with subsection (a)(1); 
(B) for all other health care contracts, the 
incurred cost of compliance for the preceding 
year, as disclosed in accordance with subsection 
(a)(2); and 
(C) any additional costs to the Department 
of Defense necessary to comply with such Acts. 
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