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(3) The standards determined to be compulsory and
binding may be waived by the Secretary of Commerce in
writing upon a determination that compliance would ad-
versely affect the accomplishment of the mission of an oper-
ator of a Federal computer system, or cause a major adverse
financial impact on the operator which is not offset by Gov-
ernmentwide savings. The Secretary may delegate to the
head of one or more Federal agencies authority to waive
such standards to the extent to which the Secretary deter-
mines such action to be necessary and desirable to allow
for timely and effective implementation of Federal computer
system standards. The head of such agency may redelegate
such authority only to a Chief Information Officer des-
ignated pursuant to section 3506 of title 44, United States
Code. Notice of each such waiver and delegation shall be
transmitted promptly to the Committee on Government Re-
form and Oversight of the House of Representatives and the
Committee on Governmental Affairs of the Senate and shall
be published promptly in the Federal Register.
(4) As used in this section, the terms ‘‘Federal com-
puter system’’ and ‘‘operator of a Federal computer system’’
have the meanings given in section 20(d) of the National
Bureau of Standards Act.
(b) EXERCISE OF AUTHORITY.—The authority con-
ferred upon the Secretary by this section shall be exercised
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subject to direction by the President and in coordination
with the Director of the Office of Management and Budget
to ensure fiscal and policy consistency.
(c) TECHNICAL AND CONFORMING AMENDMENT.—Sub-
sections 3504(g) (2) and (3), and 3506(g) (2) and (3) to
title 44, United States Code, are each amended by inserting
the phrase ‘‘and section 161 of the Information Technology
Reform Act of 1995’’ after the phrase ‘‘the Computer Secu-
rity Act of 1987 (P.L. 100–235).
Subtitle G—Sense of Congress
SEC. 4171. SENSE OF CONGRESS.
It is the sense of Congress over the next five years that
executive agencies should achieve at least a real 5 percent
per year decrease in the cost incurred by the agency for
operating and maintaining information technology, and a
real 5 percent per year increase in the efficiency of the agen-
cy operations, by reason of improvements in information
resources management by the agency.
TITLE XLII—PROCESS FOR AC-
QUISITIONS 
OF 
INFORMA-
TION TECHNOLOGY
Subtitle A—Procedures
SEC. 4201. PROCUREMENT PROCEDURES.
(a) RESPONSIBILITY.—The Director of the Office of
Management and Budget of the United States shall issue
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guidance to be used in conducting information technology
acquisitions.
(b) STANDARDS
FOR PROCEDURES.—The Director
shall ensure that the process for acquisition of information
technology is, in general, a simplified, clear, and under-
standable process that specifically addresses the manage-
ment of risk.
(c) PERFORMANCE MEASUREMENTS.—The guidance
shall include performance measurements and other perform-
ance requirements that the Director determines appro-
priate.
(d) USE OF COMMERCIAL ITEMS.—The guidance shall
mandate the use, to the maximum extent practicable, of
commercial items to meet the information technology re-
quirements of the executive agency.
(e) DIFFERENTIATED PROCEDURES.—Subject to sub-
section (b), the Director shall consider whether and, to the
extent appropriate, how to differentiate in the treatment
and conduct of acquisitions of information technology on
any of the following bases:
(1) The dollar value of the acquisition.
(2) The information technology to be acquired,
including such consideration as whether the item is a
commercial item or an item being developed or modi-
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fied uniquely for use by one or more executive agen-
cies.
(3) The complexity of the information technology
acquisition, including such considerations as size and
scope.
(4) The level of risk, including technical and
schedule risks.
(5) The level of experience or expertise of the
critical personnel in the program office, mission unit,
or office of the chief information officer of the execu-
tive agency concerned.
(6) the extent to which the information tech-
nology may be used Governmentwide or by several
agencies.
SEC. 4202. INCREMENTAL ACQUISITION OF INFORMATION
TECHNOLOGY.
(a) CIVILIAN AGENCIES.—
(1) PROCEDURES AUTHORIZED.—Title III of the
Federal Property and Administrative Services Act of
1949 (41 U.S.C. 251 et seq.) is amended by inserting
after section 303H the following new section:
‘‘MODULAR CONTRACTING
‘‘SEC. 303I. (a) IN GENERAL.—An executive agency’s
need for a major system of information technology should,
to the maximum extent practicable, be satisfied in succes-
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sive acquisitions of interoperable increments pursuant to
subsections (b) and (c). Such increments shall comply with
readily available standards such that they can be connected
to other increments that comply with such standards.
‘‘(b) DIVISION OF ACQUISITIONS INTO INCREMENTS.—
Under the successive, incremental acquisition process, a
major system of information technology may be divided into
several smaller acquisition increments that—
‘‘(1) are easier to manage individually than
would be one extensive acquisition;
‘‘(2) address complex information technology
problems incrementally in order to enhance the likeli-
hood of achieving workable solutions for those prob-
lems;
‘‘(3) provide for delivery, implementation, and
testing of workable systems or solutions in discrete in-
crements each of which comprises a system or solution
that is not dependent on any subsequent increment in
order to perform its principal functions; and
‘‘(4) provide an opportunity for subsequent in-
crements of the acquisition to take advantage of any
evolution in technology or needs that occur during
conduct of the earlier increments.
‘‘(c) TIMELY ACQUISITIONS.—(1) A contract for an in-
crement of an information technology acquisition should,
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to the maximum extent practicable, be awarded within 180
days after the date on which the solicitation is issued, or
that increment of the acquisition should be considered for
cancellation.
‘‘(2) The information technology provided for in a con-
tract for acquisition of information technology should be de-
livered within 18 months after the date on which the solici-
tation resulting in award of the contract was issued.’’.
(2) CLERICAL AMENDMENT.—The table of con-
tents in the first section of such Act is amended by
inserting after the item relating to section 303H the
following new item:
‘‘Sec. 303I Modular contracting.’’.
(b) DEPARTMENT OF DEFENSE.—
(1) PROCEDURES AUTHORIZED.—Chapter 137 of
title 10, United States Code, is amended by inserting
after section 2305 the following new section:
‘‘§ 2305a. Modular Contracting
‘‘(a) IN GENERAL.—An executive agency’s need for a
major system of information technology should, to the maxi-
mum extent practicable, be satisfied in successive acquisi-
tions of interoperable increments pursuant to subsections
(b) and (c). Such increments shall comply with readily
available standards such that they can be connected to other
increments that comply with such standards.
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‘‘(b) DIVISION OF ACQUISITIONS INTO INCREMENTS.—
Under the successive incremental acquisition process, a
major system of information technology may be divided into
several smaller acquisition increments that—
‘‘(1) are easier to manage individually than
would be one extensive acquisition;
‘‘(2) address complex information technology
problems incrementally in order to enhance the likeli-
hood of achieving workable solutions for those prob-
lems;
‘‘(3) provide for delivery, implementation, and
testing of workable systems or solutions in discrete in-
crements each of which comprises a system or solution
that is not dependent on any subsequent increment in
order to perform its principal functions; and
‘‘(4) provide an opportunity for subsequent in-
crements of the acquisition to take advantage of any
evolution in technology or needs that occur during
conduct of the earlier increments.
‘‘(c) TIMELY ACQUISITIONS.—(1) A contract for an in-
crement of an information technology acquisition should,
to the maximum extent practicable, be awarded within 180
days after the date on which the solicitation is issued, or
that increment of the acquisition should be considered for
cancellation.