H. R. 5122—244
‘‘(3) the new estimates of the costs, schedule, and perform-
ance parameters with respect to the program and system are 
reasonable; and 
‘‘(4) the management structure for the program is adequate 
to manage and control program costs. 
‘‘(g) PROHIBITION ON OBLIGATION OF FUNDS.—(1) If the deter-
mination of a critical change to a program is made by the senior 
Department official responsible for the program under subsection 
(d)(2) and a report is not submitted to Congress within the 60-
day period provided by subsection (d)(1), appropriated funds may 
not be obligated for any major contract under the program. 
‘‘(2) The prohibition on the obligation of funds for a program 
under paragraph (1) shall cease to apply on the date on which 
Congress has received a report in compliance with the requirements 
of subsection (d)(2). 
‘‘§ 2445d. Construction with other reporting requirements 
‘‘In the case of a major automated information system program 
covered by this chapter that is also treatable as a major defense 
acquisition program for which reports would be required under 
chapter 144 of this title, no reports on the program are required 
under such chapter if the requirements of this chapter with respect 
to the program are met.’’. 
(2) CLERICAL
AMENDMENTS.—The tables of chapters the 
beginning of subtitle A of such title, and of part IV of subtitle 
A of such title, are each amended by inserting after the item 
relating to chapter 144 the following new item:
‘‘144A. Major Automated Information System Programs ...................................2445a’’.
(b) REPORT
ON
REPORTING
REQUIREMENTS
APPLICABLE
TO 
MAJOR AUTOMATED INFORMATION SYSTEM PROGRAMS.—Not later 
than 180 days after the date of enactment of this Act, the Secretary 
of Defense shall submit to the congressional defense committees 
a report setting forth the reporting requirements applicable to major 
automated information system programs as of the date of the report, 
including a specification of such reporting requirements considered 
by the Secretary to be duplicative or redundant. 
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by subsection 
(a) shall take effect on January 1, 2008, and shall apply with 
respect to any major automated information system program 
for which amounts are requested in the budget of the President 
(as submitted to Congress under section 1105 of title 31, United 
States Code) for a fiscal year after fiscal year 2008, regardless 
of whether the acquisition of the automated information system 
to be acquired under the program was initiated before, on, 
or after January 1, 2008. 
(2) REPORT REQUIREMENT.—Subsection (b) shall take effect 
on the date of the enactment of this Act. 
SEC. 817. INTERNAL CONTROLS FOR PROCUREMENTS ON BEHALF OF 
THE 
DEPARTMENT 
OF 
DEFENSE 
BY 
CERTAIN 
NON-
DEFENSE AGENCIES. 
(a) INSPECTOR GENERAL REVIEWS AND DETERMINATIONS.—
(1) IN
GENERAL.—For each covered non-defense agency, 
the Inspector General of the Department of Defense and the 
Inspector General of such non-defense agency shall, not later 
than March 15, 2007, jointly—
H. R. 5122—245
(A) review—
(i) the procurement policies, procedures, and 
internal controls of such non-defense agency that are 
applicable to the procurement of property and services 
on behalf of the Department by such non-defense 
agency; and 
(ii) the administration of those policies, procedures, 
and internal controls; and 
(B) determine in writing whether—
(i) such non-defense agency is compliant with 
defense procurement requirements; 
(ii) such non-defense agency is not compliant with 
defense procurement requirements, but has a program 
or initiative to significantly improve compliance with 
defense procurement requirements; 
(iii) neither of the conclusions stated in clauses 
(i) and (ii) is correct in the case of such non-defense 
agency; or 
(iv) such non-defense agency is not compliant with 
defense procurement requirements to such an extent 
that the interests of the Department of Defense are 
at risk in procurements conducted by such non-defense 
agency. 
(2) ACTIONS FOLLOWING CERTAIN DETERMINATIONS.—If the 
Inspectors General determine under paragraph (1) that a 
conclusion stated in clause (ii), (iii), or (iv) of subparagraph 
(B) of that paragraph is correct in the case of a covered non-
defense agency, such Inspectors General shall, not later than 
June 15, 2008, jointly—
(A) conduct a second review, as described in subpara-
graph (A) of that paragraph, regarding such non-defense 
agency’s procurement of property or services on behalf of 
the Department of Defense in fiscal year 2007; and 
(B) determine in writing whether such non-defense 
agency is or is not compliant with defense procurement 
requirements. 
(b) COMPLIANCE
WITH
DEFENSE
PROCUREMENT
REQUIRE-
MENTS.—For the purposes of this section, a covered non-defense 
agency is compliant with defense procurement requirements if such 
non-defense agency’s procurement policies, procedures, and internal 
controls applicable to the procurement of products and services 
on behalf of the Department of Defense, and the manner in which 
they are administered, are adequate to ensure such non-defense 
agency’s compliance with the requirements of laws and regulations 
that apply to procurements of property and services made directly 
by the Department of Defense. 
(c) MEMORANDA
OF UNDERSTANDING BETWEEN INSPECTORS 
GENERAL.—
(1) IN GENERAL.—Not later than 60 days after the date 
of the enactment of this Act, the Inspector General of the 
Department of Defense and the Inspector General of each cov-
ered non-defense agency shall enter into a memorandum of 
understanding with each other to carry out the reviews and 
make the determinations required by this section. 
(2) SCOPE OF MEMORANDA.—The Inspector General of the 
Department of Defense and the Inspector General of a covered 
non-defense agency may by mutual agreement conduct separate
H. R. 5122—246
reviews of the procurement of property and services on behalf 
of the Department of Defense that are conducted by separate 
business units, or under separate governmentwide acquisition 
contracts, of such non-defense agency. In any case where such 
separate reviews are conducted, the Inspectors General shall 
make separate determinations under paragraph (1) or (2) of 
subsection (a), as applicable, with respect to each such separate 
review. 
(d) LIMITATIONS ON PROCUREMENTS ON BEHALF OF DEPARTMENT 
OF DEFENSE.—
(1) LIMITATION DURING REVIEW PERIOD.—After March 15, 
2007, and before June 16, 2008, no official of the Department 
of Defense may, except as provided in subsection (e) or (f), 
order, purchase, or otherwise procure property or services in 
an amount in excess of $100,000 through a covered non-defense 
agency for which a determination described in clause (iii) or 
(iv) of paragraph (1)(B) of subsection (a) has been made under 
subsection (a). 
(2) LIMITATION AFTER REVIEW PERIOD.—After June 15, 2008, 
no official of the Department of Defense may, except as provided 
in subsection (e) or (f), order, purchase, or otherwise procure 
property or services in an amount in excess of $100,000 through 
a covered non-defense agency that, having been subject to 
review under this section, has not been determined under this 
section as being compliant with defense procurement require-
ments. 
(3) LIMITATION FOLLOWING FAILURE TO REACH MOU.—Com-
mencing on the date that is 60 days after the date of the 
enactment of this Act, if a memorandum of understanding 
between the Inspector General of the Department of Defense 
and the Inspector General of a covered non-defense agency 
cannot be attained causing the review required by this section 
to not be performed, no official of the Department of Defense, 
except as provided in subsection (e) or (f), may order, purchase 
or otherwise procure property or services in an amount in 
excess of $100,000 through such non-defense agency. 
(e) EXCEPTION FROM APPLICABILITY OF LIMITATIONS.—
(1) EXCEPTION.—No limitation applies under subsection (d) 
with respect to the procurement of property and services on 
behalf of the Department of Defense by a covered non-defense 
agency during any period that there is in effect a determination 
of the Under Secretary of Defense for Acquisition, Technology, 
and Logistics, made in writing, that it is necessary in the 
interest of the Department of Defense to continue to procure 
property and services through such non-defense agency. 
(2) APPLICABILITY
OF
DETERMINATION.—A written deter-
mination with respect to a covered non-defense agency under 
paragraph (1) is in effect for the period, not in excess of one 
year, that the Under Secretary shall specify in the written 
determination. The Under Secretary may extend from time 
to time, for up to one year at a time, the period for which 
the written determination remains in effect. 
(f) TERMINATION OF APPLICABILITY OF LIMITATIONS.—Subsection 
(d) shall cease to apply to a covered non-defense agency on the 
date on which the Inspector General of the Department of Defense 
and the Inspector General of such non-defense agency jointly—
H. R. 5122—247
(1) determine that such non-defense agency is compliant 
with defense procurement requirements; and 
(2) notify the Secretary of Defense of that determination. 
(g) IDENTIFICATION OF PROCUREMENTS MADE DURING A PAR-
TICULAR FISCAL YEAR.—For the purposes of subsection (a), a 
procurement shall be treated as being made during a particular 
fiscal year to the extent that funds are obligated by the Department 
of Defense for that procurement in that fiscal year. 
(h) RESOLUTION OF DISAGREEMENTS.—If the Inspector General 
of the Department of Defense and the Inspector General of a covered 
non-defense agency are unable to agree on a joint determination 
under subsection (a) or (f), a determination by the Inspector General 
of the Department of Defense under such subsection shall be conclu-
sive for the purposes of this section. 
(i) DEFINITIONS.—In this section: 
(1) The term ‘‘covered non-defense agency’’ means each 
of the following: 
(A) The Department of Veterans Affairs. 
(B) The National Institutes of Health. 
(2) The term ‘‘governmentwide acquisition contract’’, with 
respect to a covered non-defense agency, means a task or 
delivery order contract that—
(A) is entered into by the non-defense agency; and 
(B) may be used as the contract under which property 
or services are procured for one or more other departments 
or agencies of the Federal Government. 
SEC. 818. DETERMINATION OF CONTRACT TYPE FOR DEVELOPMENT 
PROGRAMS. 
(a) REPEAL
OF SUPERSEDED REQUIREMENTS.—Section 807 of 
the National Defense Authorization Act, Fiscal Year 1989 (10 U.S.C. 
2304 note) is repealed. 
(b) MODIFICATION OF REGULATIONS.—Not later than 120 days 
after the date of the enactment of this Act, the Secretary of Defense 
shall modify the regulations of the Department of Defense regarding 
the determination of contract type for development programs. 
(c) ELEMENTS.—As modified under subsection (b), the regula-
tions shall require the Milestone Decision Authority for a major 
defense acquisition program to select the contract type for a develop-
ment program at the time of a decision on Milestone B approval 
(or Key Decision Point B approval in the case of a space program) 
that is consistent with the level of program risk for the program. 
The Milestone Decision Authority may select—
(1) a fixed-price type contract (including a fixed price incen-
tive contract); or 
(2) a cost type contract. 
(d) CONDITIONS WITH RESPECT
TO AUTHORIZATION
OF COST 
TYPE CONTRACT.—As modified under subsection (b), the regulations 
shall provide that the Milestone Decision Authority may authorize 
the use of a cost type contract under subsection (c) for a development 
program only upon a written determination that—
(1) the program is so complex and technically challenging 
that it would not be practicable to reduce program risk to 
a level that would permit the use of a fixed-price type contract; 
and