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parts, or to implement design modifica-
tions to eliminate obsolete electronic parts; 
‘‘(ii) the Department elects not to 
fund design modifications to eliminate ob-
solete electronic parts; and 
‘‘(iii) the contractor applies inspec-
tions and tests intended to detect counter-
feit electronic parts and suspect counterfeit 
electronic parts when purchasing electronic 
parts from other than the original manu-
facturers or their authorized dealers, pur-
suant to paragraph (3).’’. 
SEC. 813. GOVERNMENT-WIDE LIMITATIONS ON ALLOW-
ABLE COSTS FOR CONTRACTOR COMPENSA-
TION. 
(a) DEFENSE CONTRACTS.— 
(1) AMENDMENTS RELATING TO CONTRACTOR 
EMPLOYEES.—Subparagraph 
(P) 
of 
section 
2324(e)(1) of title 10, United States Code, is 
amended to read as follows: 
‘‘(P) Costs of compensation of any contractor 
employee for a fiscal year, regardless of the contract 
funding source, to the extent that such compensa-
tion exceeds $763,029 adjusted annually for the 
U.S. Bureau of Labor Statistics Employment Cost 
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Index for total compensation for private industry 
workers, by occupational and industry group not 
seasonally adjusted, except that the Secretary of De-
fense may establish narrowly targeted exceptions for 
positions in the science, technology, engineering, 
mathematics, medical, and manufacturing fields 
upon a determination that such exceptions are need-
ed to ensure that the Department of Defense has 
continued access to needed skills and capabilities.’’. 
(2) AMENDMENTS
RELATING
TO
SENIOR
EX-
ECUTIVES
OF
CERTAIN
CONTRACTORS.—Section 
2324(e)(1) of such title is further amended by add-
ing at the end the following new subparagraph: 
‘‘(Q) Costs of compensation of senior executives 
of a covered contractor.’’. 
(3) DEFINITIONS.—Section 2324(l) of such title 
is amended— 
(A) by inserting after paragraph (4) the 
following new paragraph (5): 
‘‘(5) The term ‘senior executives’, with respect 
to a covered contractor, means the five most highly 
compensated employees of the contractor. In deter-
mining the five most highly compensated employees 
in the case of a contractor with components (such as 
subsidiaries or divisions), the determination shall be 
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made using the five most highly compensated em-
ployees contractor-wide, not within each compo-
nent.’’; and 
(B) by inserting after paragraph (6) the 
following new paragraph (7): 
‘‘(7) The term ‘covered contractor’, with respect 
to a fiscal year, means a contractor that was award-
ed Federal contracts in an amount totaling more 
than $500,000,000 during the previous fiscal year.’’. 
(b) CIVILIAN AGENCY CONTRACTS.— 
(1) AMENDMENTS RELATING TO CONTRACTOR 
EMPLOYEES.—Paragraph (16) of section 4304(a) of 
title 41, United States Code, is amended to read as 
follows: 
‘‘(16) Costs of compensation of any contractor 
employee for a fiscal year, regardless of the contract 
funding source, to the extent that such compensa-
tion exceeds $763,029 adjusted annually for the 
U.S. Bureau of Labor Statistics Employment Cost 
Index for total compensation for private industry 
workers, by occupational and industry group not 
seasonally adjusted, except that the executive agency 
may establish narrowly targeted exceptions for posi-
tions in the science, technology, engineering, mathe-
matics, medical, and manufacturing fields upon a 
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determination that such exceptions are needed to en-
sure that the executive agency has continued access 
to needed skills and capabilities.’’. 
(2) AMENDMENTS
RELATING
TO
SENIOR
EX-
ECUTIVES
OF
CERTAIN
CONTRACTORS.—Section 
4304(a) of such title is further amended by adding 
at the end the following new paragraph: 
‘‘(17) Costs of compensation of senior execu-
tives of a covered contractor.’’. 
(3) DEFINITIONS.—Section 4301 of such title is 
amended by striking paragraph (4) and inserting the 
following new paragraphs (4) and (5): 
‘‘(4) The term ‘senior executives’, with respect 
to a covered contractor, means the five most highly 
compensated employees of the contractor. In deter-
mining the five most highly compensated employees 
in the case of a contractor with components (such as 
subsidiaries or divisions), the determination shall be 
made using the five most highly compensated em-
ployees contractor-wide, not within each component. 
‘‘(5) The term ‘covered contractor’, with respect 
to a fiscal year, means a contractor that was award-
ed Federal contracts in an amount totaling more 
than $500,000,000 during the previous fiscal year.’’. 
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(c) CONFORMING AMENDMENTS.—Chapter 11 of title 
41, United States Code, is amended— 
(1) by striking section 1127; and 
(2) by striking the item relating to that section 
in the table of sections at the beginning of such 
chapter. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to costs of compensa-
tion incurred under contracts entered into on or after the 
date that is 180 days after the date of the enactment of 
this Act. 
SEC. 814. INCLUSION OF ADDITIONAL COST ESTIMATE IN-
FORMATION IN CERTAIN REPORTS. 
(a) ADDITIONAL COST ESTIMATE INFORMATION RE-
QUIRED TO BE INCLUDED IN SELECTED ACQUISITION 
REPORTS.—Section 2432(c)(1) of title 10, United States 
Code, is amended— 
(1) by redesignating subparagraphs (B), (C) 
and (D) as subparagraphs (C), (D), and (F), respec-
tively; 
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraph (B): 
‘‘(B) for each major defense acquisition pro-
gram or designated major subprogram included in 
the report— 
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‘‘(i) the Baseline Estimate (as that term is 
defined in section 2433(a)(2) of this title), 
along with the associated risk curve and sensi-
tivity of that estimate; 
‘‘(ii) the original Baseline Estimate (as 
that term is defined in section 2435(d)(1) of 
this title), along with the associated risk curve 
and sensitivity of that estimate; 
‘‘(iii) if the original Baseline Estimate was 
adjusted 
or 
revised 
pursuant 
to 
section 
2435(d)(2) of this title, such adjusted or re-
vised estimate, along with the associated risk 
curve and sensitivity of that estimate; and 
‘‘(iv) the primary risk parameters associ-
ated with the current procurement cost for the 
program (as that term is used in section 
2432(e)(4) of this title);’’; 
(3) in subparagraph (D), as so redesignated, by 
striking ‘‘and’’ at the end; and 
(4) by inserting after subparagraph (D), as so 
redesignated, the following new subparagraph (E): 
‘‘(E) estimated contract termination costs; 
and’’. 
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(b) ADDITIONAL DUTIES OF DIRECTOR OF COST AS-
SESSMENT AND PROGRAM EVALUATION WITH RESPECT 
TO SAR.— 
(1) REVIEW
REQUIRED.—Section 2334(a) of 
title 10, United States Code, is amended— 
(A) by striking ‘‘and’’ at the end of para-
graph (6); 
(B) by striking the period and inserting ‘‘; 
and’’ at the end of paragraph (7); and 
(C) by adding at the end the following new 
paragraph (8): 
‘‘(8) annually review the cost estimates and as-
sociated information required to be included, by sec-
tion 2432(c)(1)(B) of this title, in the Selected Ac-
quisition Reports required by that section.’’. 
(2) ADDITIONAL
INFORMATION
REQUIRED
IN 
ANNUAL REPORT.—Section 2334(f)(1) of such title 
is amended— 
(A) by striking ‘‘report, an assessment 
of—’’ and inserting ‘‘report—’’; 
(B) in each of subparagraphs (A), (B), and 
(C), by inserting ‘‘an assessment of’’ before the 
first word of the text; 
(C) in subparagraph (B), by striking 
‘‘and’’ at the end; 
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(D) in subparagraph (C), by striking the 
period at the end and inserting ‘‘; and’’; and 
(E) by adding at the end the following new 
subparagraph: 
‘‘(D) a summary of the cost estimate informa-
tion reviewed under subsection (a)(8), an identifica-
tion of any trends in that information, an aggrega-
tion of the cumulative risk of the portfolio of sys-
tems reviewed under that subsection, and rec-
ommendations for improving cost estimates on the 
basis of the review under that subsection.’’. 
SEC. 815. AMENDMENT RELATING TO COMPELLING REA-
SONS FOR WAIVING SUSPENSION OR DEBAR-
MENT. 
Section 2393(b) of title 10, United States Code, is 
amended by inserting after the first sentence the fol-
lowing: ‘‘The Secretary of Defense shall also make the de-
termination described in subsection (a)(2) available on a 
publicly accessible website.’’. 
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SEC. 816. REQUIREMENT THAT COST OR PRICE TO THE 
FEDERAL GOVERNMENT BE GIVEN AT LEAST 
EQUAL 
IMPORTANCE 
AS 
TECHNICAL 
OR 
OTHER CRITERIA IN EVALUATING COMPETI-
TIVE PROPOSALS FOR DEFENSE CONTRACTS. 
(a) REQUIREMENT.—Subparagraph (A) of section 
2305(a)(3) of title 10, United States Code, is amended 
by striking ‘‘proposals; and’’ at the end of clause (ii) and 
all that follows through the end of the subparagraph and 
inserting the following: ‘‘proposals and that must be as-
signed importance at least equal to all evaluation factors 
other than cost or price when combined.’’. 
(b) WAIVER.—Section 2305(a)(3) of such title is fur-
ther amended by striking subparagraph (B) and inserting 
the following: 
‘‘(B) The requirement of subparagraph 
(A)(ii) relating to assigning at least equal im-
portance to evaluation factors of cost or price 
may be waived by the head of the agency.’’. 
(c) REPORT.—Section 2305(a)(3) of such title is fur-
ther amended by adding at the end the following new sub-
paragraph: 
‘‘(C) Not later than 180 days after the end 
of each fiscal year, the Secretary of Defense 
shall submit to Congress, and post on a publicly 
available website of the Department of Defense, 
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a report containing a list of each waiver issued 
by the head of an agency under subparagraph 
(B) during the preceding fiscal year.’’. 
SEC. 817. REQUIREMENT TO BUY AMERICAN FLAGS FROM 
DOMESTIC SOURCES. 
Section 2533a(b) of title 10, United States Code, is 
amended by adding at the end the following new para-
graph: 
‘‘(3) A flag of the United States of America 
(within the meaning of chapter 1 of title 4).’’. 
Subtitle C—Provisions Relating to 
Contracts in Support of Contin-
gency Operations in Iraq or Af-
ghanistan 
SEC. 821. AMENDMENTS RELATING TO PROHIBITION ON 
CONTRACTING WITH THE ENEMY. 
(a) AMENDMENTS RELATING
TO PROHIBITION.— 
Section 841(a)(1) of the National Defense Authorization 
Act for Fiscal Year 2012 (Public Law 112–81; 126 Stat. 
1510) is amended— 
(1) in the matter preceding subparagraph (A), 
by striking ‘‘Commander of the United States Cen-
tral Command’’ and inserting ‘‘commander of a cov-
ered combatant command’’; 
(2) in subparagraph (A)— 
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(A) by striking ‘‘Commander of the United 
States Central Command’’ and inserting ‘‘com-
mander of the covered combatant command’’; 
and 
(B) by striking ‘‘United States Central 
Command theater of operations’’ and inserting 
‘‘theater of operations of that command’’; 
(3) in subparagraph (B), by striking ‘‘United 
States Central Command theater of operations’’ and 
inserting ‘‘theater of operations of the covered com-
batant command’’; and 
(4) in subparagraph (C)— 
(A) by striking ‘‘Commander of the United 
States Central Command’’ and inserting ‘‘com-
mander of the covered combatant command’’; 
and 
(B) by striking ‘‘United States Central 
Command theater of operations’’ and inserting 
‘‘theater of operations of that command’’. 
(b) 
AMENDMENTS
RELATING
TO
CONTRACT 
CLAUSE.—Section 841(b)(3) of such Act is amended— 
(1) by striking ‘‘$100,000’’ and inserting 
‘‘$50,000’’; and 
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