629 
(3) identify one or more other organizations 
within the Department of Defense that could more ef-
fectively scale and execute the Initiatives across the 
Department. 
(c) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Secretary of Defense shall 
submit to the congressional defense committees a report that 
includes— 
(1) the Secretary’s final determination under 
subsection (a); 
(2)(A) in the event the Secretary determines that 
the Defense Innovation Unit should continue to have 
primary responsibility for the Blue UAS Initiatives 
as described in subsection (a)(1), a strategy for pro-
viding the Unit with any additional resources (in-
cluding funding, personnel, and authorities) needed 
for the Unit to effectively execute and scale the Initia-
tives across the Department of Defense; or 
(B) in the event the Secretary determines that 
another organization within the Department should 
assume primary responsibility administering and 
executing the Initiatives as described in subsection 
(a)(2), a plan with milestones for transferring the 
Initiatives (including all associated funding, per-
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sonnel, and authorities) from the Unit to such other 
organization; and 
(3) a strategy for decreasing unit costs for plat-
forms under the Initiatives, including— 
(A) benchmarks to assess progress in reduc-
ing the cost of secure unmanned aircraft system 
end products; and 
(B) a timeline for meeting such cost reduc-
tion goals. 
(d) IMPLEMENTATION.—Following the submittal of the 
report required under subsection (c), the Secretary of De-
fense shall commence implementation of the resourcing 
strategy described in subsection (c)(2)(A) or the transfer 
plan described in subsection (c)(2)(B) (as the case may be). 
(e) DEFINITIONS.—In this section: 
(1) The term ‘‘Blue UAS Cleared List’’ means 
the initiative executed by the Defense Innovation Unit 
(as of the date of the enactment of this Act) pursuant 
to which the Unit maintains a list of approved small 
unmanned aircraft systems that— 
(A) are validated as cyber-secure and safe to 
fly; and 
(B) comply with applicable requirements 
of— 
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(i) section 848 of the National Defense 
Authorization Act for Fiscal Year 2020 
(Public Law 116–92; 10 U.S.C. 4871 note); 
(ii) section 817(b) of the James M. 
Inhofe National Defense Authorization Act 
for Fiscal Year 2023 (Public Law 117–263; 
10 U.S.C. 4871 note); and 
(iii) the American Security Drone Act 
of 2023 (subtitle B of title XVIII of the Na-
tional Defense Authorization Act for Fiscal 
Year 2024 (Public Law 118–31; 41 U.S.C. 
note prec. 3901)). 
(2) The term ‘‘Blue UAS Framework’’ means the 
initiative executed by the Defense Innovation Unit (as 
of the date of the enactment of this Act) pursuant to 
which the Unit validates unmanned aircraft system 
components, subcomponents, modules, and software 
for use by the Department of Defense. 
SEC. 918. DEPARTMENT OF DEFENSE ADVISORY SUB-
COMMITTEE 
TO 
REVIEW 
TECHNOLOGIES, 
PROCESSES, AND INVESTMENT RELATED TO 
COMBINED 
JOINT 
ALL-DOMAIN 
COMMAND 
AND CONTROL. 
(a) ESTABLISHMENT.—The Secretary of Defense may 
establish a subcommittee (referred to in this section as the 
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‘‘Subcommittee’’) under the board of advisors established 
pursuant to section 233 of the William M. (Mac) Thorn-
berry National Defense Authorization Act for Fiscal Year 
2021 (Public Law 116–283; 10 U.S.C. 4001 note) to review 
technologies to achieve combined joint all-domain command 
and control. 
(b) MEMBERS.—The Subcommittee shall consist of a 
subset of the members of the board of advisors described in 
subsection (a). 
(c) AREAS OF REVIEW.—The Subcommittee may re-
view: 
(1) Processes for integrating joint effects chains 
to support priority operational challenges. 
(2) Data architectures, including potential roles 
for artificial intelligence and machine learning tech-
nologies. 
(3) Methods for achieving a platform-agnostic 
joint common operating picture through data accessi-
bility, interoperability, and integration into combat-
ant command workflows, to assist the incorporation of 
commercial communications technologies. 
(4) Networking technologies, including potential 
roles for artificial intelligence and machine learning. 
(5) Enterprise and edge cloud technologies. 
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(6) Interoperability technologies, including soft-
ware programs like the System-of-Systems Technology 
Integration Tool Chain for Heterogeneous Electronic 
Systems (commonly referred to as ‘‘STITCHES’’). 
(7) Interoperability technologies to integrate ve-
hicles out of the Replicator project with relevant bat-
tle networks. 
(8) Any other matters determined relevant by the 
Secretary of Defense. 
(d) TERMINATION.—The Subcommittee shall terminate 
on December 31, 2029. 
TITLE X—GENERAL PROVISIONS 
Subtitle A—Financial Matters 
SEC. 1001. GENERAL TRANSFER AUTHORITY. 
(a) AUTHORITY TO TRANSFER AUTHORIZATIONS.— 
(1) AUTHORITY.—Upon determination by the 
Secretary of Defense that such action is necessary in 
the national interest, the Secretary may transfer 
amounts of authorizations made available to the De-
partment of Defense in this division for fiscal year 
2026 between any such authorizations for that fiscal 
year (or any subdivisions thereof). Amounts of au-
thorizations so transferred shall be merged with and 
be available for the same purposes as the authoriza-
tion to which transferred. 
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(2) LIMITATION.—Except as provided in para-
graph (3), the total amount of authorizations that the 
Secretary may transfer under the authority of this 
section may not exceed $6,000,000,000. 
(3) EXCEPTION FOR TRANSFERS BETWEEN MILI-
TARY
PERSONNEL
AUTHORIZATIONS.—A transfer of 
funds between military personnel authorizations 
under title IV shall not be counted toward the dollar 
limitation in paragraph (2). 
(b) LIMITATIONS.—The authority provided by sub-
section (a) to transfer authorizations— 
(1) may only be used to provide authority for 
items that have a higher priority than the items from 
which authority is transferred; and 
(2) may not be used to provide authority for an 
item that has been denied authorization by Congress. 
(c) EFFECT ON AUTHORIZATION AMOUNTS.—A trans-
fer made from one account to another under the authority 
of this section shall be deemed to increase the amount au-
thorized for the account to which the amount is transferred 
by an amount equal to the amount transferred. 
(d) NOTICE
TO
CONGRESS.—The Secretary shall 
promptly notify Congress of each transfer made under sub-
section (a). 
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SEC. 1002. RESPONSIBILITIES OF UNDER SECRETARY OF 
DEFENSE (COMPTROLLER). 
Section 135(c)(3)(B) of title 10, United States Code, 
is amended by inserting ‘‘, and defense business systems 
that affect the auditability of financial statements’’ after 
‘‘accounting’’. 
SEC. 1003. ADDITIONAL ELEMENTS FOR DEPARTMENT OF 
DEFENSE 
FINANCIAL 
IMPROVEMENT 
AND 
AUDIT REMEDIATION PLAN AND REPORT. 
(a) ADDITIONAL ELEMENTS FOR PLAN.—Subsection 
(a)(2)(A) of section 240b of title 10, United States Code, 
is amended— 
(1) in clause (iv), by striking ‘‘and’’ at the end; 
and 
(2) by adding at the end the following new 
clauses: 
‘‘(vi) meeting resource requirements, 
including personnel, training, and informa-
tion technology infrastructure; and 
‘‘(vii) identifying long-range goals and 
measurable objectives, including audit cycle 
timelines, control testing frequency, and 
independent third-party validation bench-
marks.’’. 
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(b) ADDITIONAL ELEMENTS FOR REPORT.—Subsection 
(b)(1)(B) of such section is amended by adding at the end 
the following new clauses: 
‘‘(ix) A description of progress made 
with respect to audit-related system mod-
ernization efforts, including rationalization 
of business systems. 
‘‘(x) The number and scope of auto-
mated processes implemented, including rec-
onciliation, inventory validation, and inter-
nal controls.’’. 
SEC. 1004. CONSOLIDATION OF REPORTING REQUIRE-
MENTS RELATING TO DEPARTMENT OF DE-
FENSE FINANCIAL IMPROVEMENT AND AUDIT 
REMEDIATION PLAN. 
(a) FINANCIAL IMPROVEMENT AND AUDIT REMEDI-
ATION PLAN.—Section 240b(b) of title 10, United States 
Code, as amended by section 1003(b), is further amended— 
(1) in paragraph (1)(B), by adding at the end 
the following new clause: 
‘‘(ix) A detailed estimate of the fund-
ing required for the next fiscal year to pro-
cure, obtain, or otherwise implement each 
process, system, and technology identified to 
address the corrective action plan or plans 
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of each department, agency, component, or 
element of the Department of Defense, and 
the corrective action plan of the Department 
as a whole, for purposes of this chapter dur-
ing such fiscal year.’’; 
(2) in paragraph (2), by striking subparagraph 
(B) and inserting the following new subparagraph 
(B): 
‘‘(B) The January 31 briefing under sub-
paragraph (A) shall include a ranking of all of 
the military departments and Defense Agencies 
in order of how advanced each is in achieving 
auditable financial statements, as required by 
law.’’; 
(3) by redesignating paragraph (3) as para-
graph (4); 
(4) by inserting after paragraph (2) the fol-
lowing new paragraph (3): 
‘‘(3) ANNUAL REPORT BY BOTTOM QUARTILE.— 
Not later than June 30 of each year, the head of each 
military department and Defense Agency that was 
ranked in the bottom quartile of the report submitted 
under paragraph (2)(B) for that year shall submit to 
the congressional defense committees a report that in-
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cludes the following information for that military de-
partment or Defense Agency: 
‘‘(A) A description of the material weak-
nesses of the military department or Defense 
Agency. 
‘‘(B) The underlying causes of such weak-
nesses. 
‘‘(C) A plan for remediating such weak-
nesses. 
‘‘(D) The total number of open audit notices 
of findings and recommendations (in this para-
graph referred to as ‘NFRs’) for the most re-
cently concluded fiscal year and the preceding 
two fiscal years, where applicable. 
‘‘(E) The number of repeat or reissued 
NFRs from the most recently concluded fiscal 
year. 
‘‘(F) The number of NFRs that were pre-
viously forecasted to be closed during the most 
recently concluded fiscal year that remain open. 
‘‘(G) The number of closed NFRs during the 
current fiscal year and prior fiscal years. 
‘‘(H) The number of material weaknesses 
that were validated by external auditors as fully 
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resolved or downgraded during the current fiscal 
year relative to prior fiscal years. 
‘‘(I) A breakdown, by fiscal year, of which 
open NFRs are forecasted to be closed. 
‘‘(J) Explanations for any unfavorable 
trends in the information included under para-
graphs (1) through (9).’’; and 
(5) in paragraph (4), as redesignated by para-
graph (3) of this subsection, by striking ‘‘the critical 
capabilities described in the Department of Defense 
report titled ‘Financial Improvement and Audit 
Readiness (FIAR) Plan Status Report’ and dated 
May 2016’’ and inserting ‘‘the financial statement 
audit priorities designated by the Secretary of De-
fense for the fiscal year in which the report is sub-
mitted’’. 
(b) ANNUAL REPORTS ON FUNDING FOR CORRECTIVE 
ACTION PLANS.—Section 1009 of the National Defense Au-
thorization Act for Fiscal Year 2020 (Public Law 116–92; 
10 U.S.C. 240b note) is amended by striking subsection (c). 
(c) ANNUAL
REPORT
ON
AUDITABLE
FINANCIAL 
STATEMENTS.—Title 10, United States Code, is amended 
by striking section 240h. 
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SEC. 1005. CONCURRENT REPORTING DATE FOR ANNUAL 
UPDATE TO DEFENSE BUSINESS SYSTEMS 
AUDIT REMEDIATION PLAN AND DEPART-
MENT 
OF 
DEFENSE 
ANNUAL 
FINANCIAL 
STATEMENTS. 
Section 240g(b) of title 10, United States Code, is 
amended to read as follows: 
‘‘(b) ANNUAL REPORT.—On the same date as the date 
of the submission of the audited financial statements of the 
Department of Defense required pursuant to section 240a 
of this title each year, the Secretary of Defense shall submit 
to the congressional defense committees an updated annual 
report on the Defense Business Systems Audit Remediation 
Plan under subsection (a).’’. 
SEC. 1006. LIMITATION ON AVAILABILITY OF FUNDS FOR 
TRAVEL EXPENSES OF OFFICE OF SECRETARY 
OF DEFENSE UNTIL COMPLETION OF CER-
TAIN AUDIT REQUIREMENTS. 
(a) LIMITATION.—Of the funds authorized to be appro-
priated by this Act or otherwise made available for fiscal 
year 2026 for operation and maintenance, defense-wide, 
and available for the Office of the Secretary of Defense for 
travel expenses, not more than 75 percent may be obligated 
or expended until the earlier of the following: 
(1) The first date on which at least eleven cov-
ered reporting entities have received an unmodified 
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audit opinion with respect to the financial statements 
of that entity undergoing audit for the preceding fis-
cal year. 
(2) The date on which a Department of Defense- 
wide material weakness identified in the annual re-
port on the implementation of the Financial Improve-
ment and Audit Remediation Plan required under 
section 240b of title 10, United States Code, for fiscal 
year 2024, is closed or otherwise resolved in a manner 
other than through consolidation. 
(b) COVERED REPORTING ENTITY DEFINED.—In this 
section, the term ‘‘covered reporting entity’’ has the mean-
ing given the term ‘‘government-wide reporting entity’’ in 
the document of the Federal Accounting Standards Advi-
sory Board titled ‘‘Statement of Federal Financial Account-
ing Standards 47: Reporting Entity’’ and issued December 
30, 2014, or such successor document. 
SEC. 1007. REPORTING REQUIREMENTS FOR AMOUNTS 
MADE AVAILABLE PURSUANT TO TITLE II OF 
PUBLIC LAW 119–21. 
(a) ANNUAL REPORTS.—At the time of the submittal 
to Congress of the budget of the President for each of fiscal 
years 2027 through 2029 pursuant to section 1105(a) of 
title 31, United States Code, the Secretary of Defense shall 
submit to the Committees on Armed Services of the House 
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of Representatives and the Senate the following with respect 
to amounts made available by title II of Public Law 119– 
21: 
(1) Proposed allocations by account and by pro-
gram, project, or activity, with detailed justifications. 
(2) P–1 and R–1 budget justification documents, 
which shall identify the allocation of funds by pro-
gram, project, and activity. 
(3) Budget justification documents, to be known 
as M–1 and O–1, which shall identify the allocation 
of funds by budget activity, activity group, and sub- 
activity group. 
(b) QUARTERLY REPORTS.—The Secretary of Defense 
shall submit to the Committees on Armed Services of the 
House of Representatives and Senate quarterly reports on 
the status of balances of projects and activities funded using 
amounts described in subsection (a), including all uncom-
mitted, committed, and unobligated funds. 
Subtitle B—Naval Vessels 
SEC. 1011. INCLUSION OF CERTAIN DESIGN INFORMATION 
IN ANNUAL NAVAL VESSEL CONSTRUCTION 
PLANS. 
Section 231(b) of title 10, United States Code, is 
amended— 
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(1) by redesignating subparagraphs (H) through 
(J) as subparagraphs (I) through (K), respectively; 
and 
(2) by inserting after subparagraph (G) the fol-
lowing new subparagraph: 
‘‘(H) If 50 percent or more of the vessels in the 
naval vessel force provided for under the naval vessel 
construction plan are to be designed by one or more 
foreign firms (as such term is defined in section 
4852(d) of this title)— 
‘‘(i) an identification of each such foreign 
firm; and 
‘‘(ii) a description of the benefit to the 
United States Government of including in such 
force the naval vessels so designed.’’. 
SEC. 1012. LIMITATION ON USE OF FUNDS IN THE NA-
TIONAL DEFENSE SEALIFT FUND TO PUR-
CHASE 
CERTAIN 
USED 
FOREIGN 
CON-
STRUCTED VESSELS. 
(a) IN GENERAL.—Section 2218 of title 10, United 
States Code, is amended— 
(1) in subsection (f)— 
(A) in paragraph (3)— 
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‘‘(1) a Member of Congress seeking access to a 
covered installation is granted such access if such 
Member presents a covered identification card; and 
‘‘(2) any Congressional employees accompanying 
a Member of Congress granted access under para-
graph (1) are granted the same access. 
‘‘(b) PROHIBITED PROCEDURES.—Under such proce-
dures, the Secretary may not require a Member of Congress 
to schedule a grant of access to a covered installation under 
subsection (a) prior to the arrival of such Member and ac-
companying Congressional employees, if applicable, at such 
covered installation. 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) The term ‘Congressional employee’ has the 
meaning given such term in paragraph (5) of section 
2107 of title 5. 
‘‘(2) The term ‘covered identification card’ 
means a valid identification badge issued by the ap-
propriate office of the House of Representatives or the 
Senate, as the case may be, which identifies the indi-
vidual to which such identification badge was issued 
as a current Member of Congress. 
‘‘(3) The term ‘covered installation’ means a 
military installation located in the United States or 
Guam at which the presentation of an issued Depart-
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‘‘(i) an evaluation of the strength and 
capacity of United States shipyards, repair 
facilities, and supporting infrastructure, in-
cluding the ability of such shipyards, facili-
ties, and infrastructure to meet current and 
future Navy and sealift demands; 
‘‘(ii) an assessment of the skilled work-
force for shipbuilding and maritime oper-
ations, including with respect to training 
and the sustainability of the labor force; 
‘‘(iii) an examination of the effects of 
domestic tax, regulatory, and permitting 
policies on maritime industry investment 
and innovation; 
‘‘(iv) an analysis of the effect of foreign 
subsidies and competition from State-owned 
shipbuilding enterprises on the competitive-
ness of the United States; and 
‘‘(v) recommendations for legislative or 
administrative actions to— 
‘‘(I) strengthen the United States 
maritime industrial base; 
‘‘(II) modernize and expand the 
capacity of shipyards; 
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than annually thereafter, the Secretary of Defense 
shall submit to the congressional defense committees a 
report that includes the following: 
(A) A description of any actions taken to 
improve the technology transfer policies of the 
military departments and the National Disclo-
sure Policy in accordance with the implementa-
tion requirements under subsection (c). 
(B) A description of any actions taken to 
implement or incorporate industry recommenda-
tion into the technology transfer policies of the 
military departments and the National Disclo-
sure Policy. 
(C) A summary of any feedback from indus-
try stakeholders with respect to current applica-
tions of the technology transfer policies of the 
military departments and National Disclosure 
Policy, and a description of any actions taken to 
address such feedback. 
(D) The results of an audit of license appli-
cations that were denied during the preceding 
12-month period on the basis of technology trans-
fer policies of the military departments or the 
National Disclosure Policy, including sufficient 
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(c) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Secretary of Defense shall 
submit to the Committees on Armed Services of the House 
of Representatives and the Senate a report on the activities 
performed under the pilot program established under sub-
section (a). 
(d) TERMINATION.—The authority to carry out a pilot 
program under subsection (a) shall terminate on January 
1, 2029. 
(e) DEFINITIONS.—In this section: 
(1) The term ‘‘distributed ledger’’ means a ledger 
that— 
(A) is shared across a set of distributed 
nodes, which are devices or processes, that par-
ticipate in a network and store a complete or 
partial replica of the ledger; 
(B) is synchronized between the nodes; and 
(C) has data appended to it by following a 
specified consensus mechanism. 
(2) The term ‘‘distributed ledger technology’’ 
means technology that enables the operation and use 
of distributed ledgers. 
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(4) in subsection (c), as redesignated by para-
graph (2), by inserting ‘‘or (b)(1)’’ after ‘‘subsection 
(a)(1)’’ each place it appears; 
(5) in subsection (d), as so redesignated, by add-
ing at the end the following: 
‘‘(6) The term ‘unmanned aircraft system’ has 
the meaning given that term in section 44801 of title 
49, United States Code. 
‘‘(7) The term ‘foreign adversary’— 
‘‘(A) means a foreign adversary (as such 
term is defined in section 8(c) of the Secure and 
Trusted Communications Networks Act of 2019 
(47 U.S.C. 1607(c))); and 
‘‘(B) includes any person owned by, con-
trolled by, or subject to the jurisdiction or direc-
tion of a foreign adversary. 
‘‘(8) The term ‘person owned by, controlled by, 
or subject to the jurisdiction or direction of a foreign 
adversary’ has the meaning given such term in sec-
tion 791.301 of title 15, Code of Federal Regulations, 
or any such successor regulation.’’; and 
(6) in subsection (e), as so redesignated, by strik-
ing ‘‘subsection (b)(1)(A)’’ and inserting ‘‘subsection 
(c)(1)(A)’’. 
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‘‘(ii) that considers the roles of each partner 
as the covered system transitions from acquisi-
tion, 
development, 
production, 
fielding, 
sustainment, and disposal. 
‘‘(F) A plan to transition the covered system 
from production to initial fielding that addresses spe-
cific products or services required for successful ini-
tial fielding of the covered system, including— 
‘‘(i) a description of the necessary tooling or 
other unique support equipment, requirements 
for initial spare parts and components, technical 
handbooks and maintenance manuals, mainte-
nance training, and facilities; 
‘‘(ii) an identification of the funding re-
quired to provide such products and services for 
any initial fielding location of the covered sys-
tem; 
‘‘(iii) an identification of any procurement 
line, program element, or subactivity group in 
the budget of the Secretary concerned associated 
with such products or services; 
‘‘(iv) the timeline for delivery of such prod-
ucts and services; and 
‘‘(v) an assessment of any reduction in 
operational readiness requirements and materiel 
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