‘‘(VII) other causes as identified by the Sec-
retary; 
‘‘(ii) subject to subparagraph (B), determine 
whether to terminate such program or to restructure 
such program after assessing— 
‘‘(I) the root causes of cost growth identified 
pursuant to subparagraph (A); 
‘‘(II) the validity and urgency of the joint 
military requirement; 
‘‘(III) the viability of the acquisition strat-
egy; 
‘‘(IV) the quality of program management; 
‘‘(V) a broad range of potential material 
and non-material alternatives to such program; 
and 
‘‘(VI) the need to reduce funding for other 
programs due to the cost growth on such pro-
gram; 
‘‘(iii) submit the determination made under 
clause (ii) to Congress, before the end of the 60-day 
period beginning on the day the Selected Acquisition 
Report containing the information described in sub-
section (g) is required to be submitted under section 
2432(f) of this title; and 
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‘‘(iv) if a report under paragraph (1) has been 
previously submitted to Congress with respect to such 
program or subprogram for the current fiscal year but 
was based upon a different unit cost report from the 
program manager to the service acquisition executive 
designated by the Secretary concerned, submit a fur-
ther report containing the information described in 
subsection (g), determined from the time of the pre-
vious report to the time of the current report. 
‘‘(B) A program may be restructured pursuant to a 
determination under subparagraph (A)(ii) only if— 
‘‘(i) a written certification (with a supporting 
explanation) is submitted along with the determina-
tion stating that— 
‘‘(I) such program is essential to national 
security; 
‘‘(II) there are no alternatives to such pro-
gram which will provide acceptable military ca-
pability at less cost; 
‘‘(III) new estimates of the program acqui-
sition unit cost or procurement unit cost are rea-
sonable; 
‘‘(IV) the program is a higher priority than 
programs whose funding must be reduced to ac-
commodate cost growth on such program; and 
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‘‘(V) the management structure for the pro-
gram is adequate to manage and control pro-
gram acquisition unit cost or procurement unit 
cost; and 
‘‘(ii) the most recent milestone decision is revis-
ited and results in the approval of such restructured 
program.’’. 
(b) TOTAL EXPENDITURE
FOR PROCUREMENT RE-
SULTING IN TREATMENT AS MAJOR DEFENSE ACQUISITION 
PROGRAM.—Section 2430(a)(2) of such title is amended by 
inserting ‘‘, including all planned increments or spirals,’’ 
after ‘‘an eventual total expenditure for procurement’’. 
(c) REQUIREMENT TO INCLUDE COST GROWTH FUND-
ING CHANGES IN REPORT.—When a program is restruc-
tured under paragraph (2) of section 2433(e) of title 10, 
United States Code, the next Selected Acquisition Report 
for such program submitted pursuant to section 2432 of 
such title occurring after the submission of the budget for 
the fiscal year following the fiscal year in which the pro-
gram was restructured shall contain a description of all 
funding changes included in the budget for that fiscal year 
as a result of the cost growth on such program, including 
reductions made in the budgets of other programs to accom-
modate such cost growth. 
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(d) CONFORMING AMENDMENTS.—Section 2433(e)(3) 
of such title is amended— 
(1) in subparagraph (A), by striking ‘‘or (2)(B)’’ 
and inserting ‘‘or (2)(A)(iii)’’; and 
(2) in subparagraph (B)— 
(A) by striking ‘‘or (2)(B)’’ and inserting 
‘‘or (2)(A)(iii)’’; and 
(B) by striking ‘‘paragraph (2)(A)’’ and in-
serting ‘‘paragraph (2)(B)’’. 
SEC. 205. ORGANIZATIONAL CONFLICTS OF INTEREST IN 
THE ACQUISITION OF MAJOR WEAPON SYS-
TEMS. 
(a) REQUIREMENT FOR PANEL TO PRESENT REC-
OMMENDATIONS.—Not later than one year after the date of 
the enactment of this Act, the Panel on Contracting Integ-
rity established pursuant to section 813 of the John Warner 
National Defense Authorization Act for Fiscal Year 2007 
(Public Law 109–364; 120 Stat. 2320) shall present rec-
ommendations to the Secretary of Defense on measures to 
eliminate or mitigate organizational conflicts of interest in 
the acquisition of major weapons systems. 
(b) REVISED REGULATIONS REQUIRED.—Not later 
than 180 days after receiving recommendations pursuant 
to subsection (a), the Secretary of Defense shall revise the 
Defense Supplement to the Federal Acquisition Regulation 
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to address organizational conflicts of interest by contractors 
in the acquisition of major weapon systems. 
(c) POTENTIAL ORGANIZATIONAL CONFLICTS OF IN-
TEREST.—The organizational conflicts of interest consid-
ered during the preparation of the recommendations re-
quired pursuant to subsection (a) shall include conflicts 
that could arise as a result of any of the following: 
(1) Lead system integrator contracts on major 
defense acquisition programs and contracts that fol-
low lead system integrator contracts on such pro-
grams, particularly contracts for production. 
(2) The ownership of business units performing 
systems engineering and technical assistance func-
tions, professional services, or management support 
services in relation to major defense acquisition pro-
grams by contractors who simultaneously own busi-
ness units competing to perform as either the prime 
contractor or the supplier of a major subsystem or 
component for such programs. 
(3) The award of major subsystem contracts by 
a prime contractor for a major defense acquisition 
program to business units or other affiliates of the 
same parent corporate entity, and particularly the 
award of subcontracts for software integration or the 
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