I 
111TH CONGRESS 
1ST SESSION H. R. 1665 
To structure Coast Guard acquisition processes and policies, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 23, 2009 
Mr. CUMMINGS (for himself, Mr. OBERSTAR, Mr. MICA, and Mr. LOBIONDO) 
introduced the following bill; which was referred to the Committee on 
Transportation and Infrastructure 
A BILL 
To structure Coast Guard acquisition processes and policies, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Coast Guard Acquisition Reform Act of 2009’’. 
(b) TABLE OF CONTENTS.— 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
TITLE I—RESTRICTIONS ON THE USE OF LEAD SYSTEMS 
INTEGRATORS 
Sec. 101. Procurement structure. 
TITLE II—COAST GUARD ACQUISITION POLICY 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6211
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
Sec. 201. Operational requirements. 
Sec. 202. Required contract terms. 
Sec. 203. Life-cycle cost estimates. 
Sec. 204. Test and evaluation. 
Sec. 205. Capability standards. 
Sec. 206. Acquisition program reports. 
Sec. 207. Undefinitized contractual actions. 
Sec. 208. Guidance on excessive pass-through charges. 
Sec. 209. Acquisition of major capabilities: Alternatives analysis. 
Sec. 210. Cost overruns and delays. 
Sec. 211. Report on former Coast Guard officials employed by contractors to 
the agency. 
Sec. 212. Department of Defense consultation. 
TITLE III—COAST GUARD PERSONNEL 
Sec. 301. Chief Acquisition Officer. 
Sec. 302. Improvements in Coast Guard acquisition management. 
Sec. 303. Recognition of Coast Guard personnel for excellence in acquisition. 
Sec. 304. Enhanced status quo officer promotion system. 
Sec. 305. Coast Guard acquisition workforce expedited hiring authority. 
SEC. 2. DEFINITIONS. 
In this Act, the following definitions apply: 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means the Committee on Transportation 
and Infrastructure of the House of Representatives 
and the Committee on Commerce, Science, and 
Transportation of the Senate. 
(2) COMMANDANT.—The term ‘‘Commandant’’ 
means the Commandant of the Coast Guard. 
(3) LEVEL 1 ACQUISITION.—The term ‘‘Level 1 
acquisition’’ means— 
(A) an acquisition by the Coast Guard— 
(i) the estimated life-cycle costs of 
which exceed $1,000,000,000; or 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(ii) the estimated total acquisition 
costs of which exceed $300,000,000; or 
(B) any acquisition that the Chief Acquisi-
tion Officer of the Coast Guard determines to 
have a special interest— 
(i) due to— 
(I) the experimental or tech-
nically immature nature of the asset; 
(II) the technological complexity 
of the asset; 
(III) the commitment of re-
sources; or 
(IV) the nature of the capability 
or set of capabilities to be achieved; or 
(ii) because such acquisition is a joint 
acquisition. 
(4) LEVEL 2 ACQUISITION.—The term ‘‘Level 2 
acquisition’’ means an acquisition by the Coast 
Guard— 
(A) the estimated life-cycle costs of which 
are equal to or less than $1,000,000,000, but 
greater than $300,000,000; or 
(B) the estimated total acquisition costs of 
which are equal to or less than $300,000,0000, 
but greater than $100,000,000. 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(5) LIFE-CYCLE
COST.—The term ‘‘life-cycle 
cost’’ means all costs for development, procurement, 
construction, and operations and support for a par-
ticular capability or asset, without regard to funding 
source or management control. 
TITLE I—RESTRICTIONS ON THE 
USE OF LEAD SYSTEMS INTE-
GRATORS 
SEC. 101. PROCUREMENT STRUCTURE. 
(a) IN GENERAL.— 
(1) USE OF LEAD SYSTEMS INTEGRATOR.—Ex-
cept as provided in subsection (b), the Commandant 
may not use a private sector entity as a lead systems 
integrator for an acquisition contract awarded or de-
livery order or task order issued after the end of the 
180-day period beginning on the date of enactment 
of this Act. 
(2) FULL AND OPEN COMPETITION.—The Com-
mandant and any lead systems integrator engaged 
by the Coast Guard shall use full and open competi-
tion for any acquisition contract awarded after the 
date of enactment of this Act, unless otherwise ex-
cepted in accordance with Federal acquisition laws 
and regulations promulgated under those laws, in-
cluding the Federal Acquisition Regulation. 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(3) NO EFFECT ON SMALL BUSINESS ACT.— 
Nothing in this subsection shall be construed to su-
persede or otherwise affect the authorities provided 
by and under the Small Business Act (15 U.S.C. 
631 et seq.). 
(b) EXCEPTIONS.— 
(1) NATIONAL DISTRESS AND RESPONSE SYS-
TEM
MODERNIZATION
PROGRAM; NATIONAL
SECU-
RITY
CUTTERS
AND
3.—Notwithstanding sub-
sections (a) and (e), the Commandant may use a 
private sector entity as a lead systems integrator for 
the Coast Guard to complete the National Distress 
and Response System Modernization Program (oth-
erwise known as the ‘‘Rescue 21’’ program) and Na-
tional Security Cutters 2 and 3. 
(2) COMPLETION
OF
ACQUISITION
BY
LEAD 
SYSTEMS INTEGRATOR.—Notwithstanding subsection 
(a), the Commandant may use a private sector enti-
ty as a lead systems integrator for the Coast 
Guard— 
(A) to complete any delivery order or task 
order, including the exercise of previously estab-
lished options on a delivery order or task order 
that was issued to a lead systems integrator on 
or before the date that is 180 days after the 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
date of enactment of this Act without any 
change in the quantity of capabilities or assets 
or the specific type of capabilities or assets cov-
ered by the order; 
(B) for a contract awarded after the date 
that is 180 days after the date of enactment of 
this Act for acquisition of, or in support of, the 
HC–130J aircraft, the HH–65 aircraft, or the 
C4ISR system, if the requirements of sub-
section (c) are met with respect to such acquisi-
tions; 
(C) for a contract awarded after the date 
that is 180 days after the date of enactment of 
this Act for acquisition of, or in support of, 
Maritime Patrol Aircraft, if the requirements of 
subsection (c) are met with respect to such an 
acquisition; and 
(D) for the acquisition of, or in support of, 
additional National Security Cutters or Mari-
time Patrol Aircraft, if the Commandant deter-
mines that— 
(i) the acquisition is in accordance 
with Federal acquisition laws and regula-
tions promulgated under those laws, in-
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
cluding the Federal Acquisition Regula-
tion; 
(ii) the acquisition and the use of a 
private sector entity as a lead systems inte-
grator for the acquisition are in the best 
interest of the Federal Government; and 
(iii) the requirements of subsection (c) 
are met with respect to such acquisition. 
(3) REPORT ON DECISION-MAKING PROCESS.— 
If the Commandant determines under subparagraph 
(B), (C), or (D) of subsection (b)(2) that the Coast 
Guard will use a private sector lead systems inte-
grator for an acquisition, the Commandant shall no-
tify in writing the appropriate congressional commit-
tees of the Commandant’s determination and shall 
provide a detailed rationale for the determination, at 
least 30 days before the award of a contract or 
issuance of a delivery order or task order, using a 
private sector lead systems integrator, including a 
comparison of the cost of the acquisition through the 
private sector lead systems integrator with the ex-
pected cost if the acquisition were awarded directly 
to the manufacturer or shipyard. For purposes of 
that comparison, the cost of award directly to a 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
manufacturer or shipyard shall include the costs of 
Government contract management and oversight. 
(c) LIMITATION ON LEAD SYSTEMS INTEGRATORS.— 
Neither an entity performing lead systems integrator func-
tions for a Coast Guard acquisition nor a Tier 1 subcon-
tractor for any acquisition described in subparagraph (B), 
(C), or (D) of subsection (b)(2) may have a financial inter-
est in a subcontractor below the Tier 1 subcontractor level 
unless— 
(1) the subcontractor was selected by the prime 
contractor through full and open competition for 
such procurement; 
(2) the procurement was awarded by the lead 
systems integrator or a subcontractor through full 
and open competition; 
(3) the procurement was awarded by a subcon-
tractor through a process over which the lead sys-
tems integrator or a Tier 1 subcontractor exercised 
no control; or 
(4) the Commandant has determined that the 
procurement was awarded in a manner consistent 
with Federal acquisition laws and regulations pro-
mulgated under those laws, including the Federal 
Acquisition Regulation. 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(d) RULE
OF CONSTRUCTION.—The limitation in 
subsection (b)(1)(A) on the quantity and specific type of 
assets to which subsection (b) applies shall not be con-
strued to apply to the modification of the number or type 
of any sub-systems or other components of a vessel or air-
craft described in subparagraph (B), (C), or (D) of sub-
section (b)(2). 
(e) TERMINATION DATE FOR EXCEPTIONS.—Except 
as described in subsection (b)(1), the Commandant may 
not use a private sector entity as a lead systems integrator 
for acquisition contracts awarded, or task orders or deliv-
ery orders issued, after the earlier of— 
(1) September 30, 2011; or 
(2) the date on which the Commandant certifies 
in writing to the appropriate congressional commit-
tees that the Coast Guard has available and can re-
tain sufficient acquisition workforce personnel and 
expertise within the Coast Guard, through an ar-
rangement with other Federal agencies, or through 
contracts or other arrangements with private sector 
entities, to perform the functions and responsibilities 
of the lead systems integrator in an efficient and 
cost-effective manner. 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
TITLE II—COAST GUARD 
ACQUISITION POLICY 
SEC. 201. OPERATIONAL REQUIREMENTS. 
(a) IN GENERAL.—No Level 1 or Level 2 acquisition 
program may be initiated by the Coast Guard, and no pro-
duction contract may be awarded for such an acquisition, 
unless the Commandant has approved an operational re-
quirement for such acquisition. 
(b) OPERATIONAL REQUIREMENT FOR ACQUISITION 
PROGRAMS.— 
(1) IN GENERAL.—The Commandant shall es-
tablish mature and stable operational requirements 
for acquisition programs. 
(2) ELEMENTS.—Prior to establishing oper-
ational requirements under paragraph (1), the Com-
mandant shall— 
(A) prepare a preliminary statement of 
need, a concept of operations, an analysis of al-
ternatives or the equivalent, an estimate of life- 
cycle costs, and requirements for interoper-
ability with other capabilities and assets within 
and external to the Coast Guard; and 
(B) in preparing the concept of operations 
under subparagraph (A), coordinate with acqui-
sition and support professionals, requirements 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
officials, operational users and maintainers, and 
resource officials who can ensure the appro-
priate consideration of performance, cost, 
schedule and risk trade-offs. 
(c) CONSIDERATION
OF TRADE-OFFS.—In estab-
lishing operational requirements under subsection (a), the 
Commandant shall develop and implement mechanisms to 
ensure that trade-offs among performance, cost, schedule, 
and risk are considered in the establishment of operational 
requirements for development and production of a Level 
1 or Level 2 acquisition. 
(d) ELEMENTS.—The mechanisms required under 
this section shall ensure at a minimum that Coast Guard 
officials responsible for acquisition management, budget, 
and cost estimating functions have the authority to de-
velop cost estimates and raise cost and schedule matters 
at any point in the process of establishing operational re-
quirements for a Level 1 or Level 2 acquisition. 
SEC. 202. REQUIRED CONTRACT TERMS. 
(a) IN GENERAL.—The Commandant shall ensure 
that a contract awarded or a delivery order or task order 
issued for an acquisition of a capability or an asset with 
an expected service life of 10 years and with a total acqui-
sition cost that is equal to or exceeds $10,000,000 award-
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
ed or issued by the Coast Guard after the date of enact-
ment of this Act— 
(1) provides that all certifications for an end- 
state capability or asset under such contract, deliv-
ery order, or task order, respectively, will be con-
ducted by the Commandant or an independent third 
party, and that self-certification by a contractor or 
subcontractor is not allowed; 
(2) requires that the Commandant shall main-
tain the authority to establish, approve, and main-
tain technical requirements; 
(3) requires that any measurement of con-
tractor and subcontractor performance be based on 
the status of all work performed, including the ex-
tent to which the work performed met all perform-
ance, cost, and schedule requirements; 
(4) specifies that, for the acquisition or upgrade 
of air, surface, or shore capabilities and assets for 
which compliance with TEMPEST certification is a 
requirement, the standard for determining such com-
pliance will be the air, surface, or shore standard 
then used by the Department of the Navy for that 
type of capability or asset; and 
(5) for any contract awarded to acquire an Off-
shore Patrol Cutter, includes provisions specifying 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
the service life, fatigue life, and days underway in 
general Atlantic and North Pacific Sea conditions, 
maximum range, and maximum speed the cutter will 
be built to achieve. 
(b) PROHIBITED CONTRACT PROVISIONS.—The Com-
mandant shall ensure that any contract awarded or deliv-
ery order or task order issued by the Coast Guard after 
the date of enactment of this Act does not include any 
provision allowing for equitable adjustment that differs 
from the Federal Acquisition Regulation. 
(c) EXTENSION OF PROGRAM.—Any contract, con-
tract modification, or award term extending a contract 
with a lead systems integrator— 
(1) shall not include any minimum require-
ments for the purchase of a given or determinable 
number of specific capabilities or assets; and 
(2) shall be reviewed by an independent third 
party with expertise in acquisition management, and 
the results of that review shall be submitted to the 
appropriate congressional committees at least 60 
days prior to the award of the contract, contract 
modification, or award term. 
SEC. 203. LIFE-CYCLE COST ESTIMATES. 
(a) IN GENERAL.—The Commandant shall imple-
ment mechanisms to ensure the development and regular 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
updating of life-cycle cost estimates for each acquisition 
with a total acquisition cost that equals or exceeds 
$10,000,000 and an expected service life of 10 years, and 
to ensure that these estimates are considered in decisions 
to develop or produce new or enhanced capabilities and 
assets. 
(b) TYPES OF ESTIMATES.—In addition to life-cycle 
cost estimates that may be developed by acquisition pro-
gram offices, the Commandant shall require that an inde-
pendent life-cycle cost estimate be developed for each 
Level 1 or Level 2 acquisition program or project. 
(c) REQUIRED UPDATES.—For each Level 1 or Level 
2 acquisition program or project the Commandant shall 
require that life-cycle cost estimates shall be updated be-
fore each milestone decision is concluded and the program 
or project enters a new acquisition phase. 
SEC. 204. TEST AND EVALUATION. 
(a) TEST AND EVALUATION MASTER PLAN.— 
(1) IN GENERAL.—For any Level 1 or Level 2 
acquisition program or project the Coast Guard 
Chief Acquisition Officer must approve a Test and 
Evaluation Master Plan specific to the acquisition 
program or project for the capability, asset, or sub- 
systems of the capability or asset and intended to 
minimize technical, cost, and schedule risk as early 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
as practicable in the development of the program or 
project. 
(2) TEST
AND
EVALUATION
STRATEGY.—The 
TEMP shall— 
(A) set forth an integrated test and evalua-
tion strategy that will verify that capability-level 
or asset-level and sub-system-level design and 
development, 
including 
performance 
and 
supportability, have been sufficiently proven be-
fore the capability, asset, or sub-system of the 
capability or asset is approved for production; 
and 
(B) require that adequate developmental 
tests and evaluations and operational tests and 
evaluations established under subparagraph (A) 
are performed to inform production decisions. 
(3) OTHER COMPONENTS OF TEMP.—At a min-
imum, the TEMP shall identify— 
(A) the key performance parameters to be 
resolved through the integrated test and evalua-
tion strategy; 
(B) critical operational issues to be as-
sessed in addition to the key performance pa-
rameters; 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(C) specific development test and evalua-
tion phases and the scope of each phase; 
(D) modeling and simulation activities to 
be performed, if any, and the scope of such ac-
tivities; 
(E) early operational assessments to be 
performed, if any, and the scope of such assess-
ments; 
(F) operational test and evaluation phases; 
(G) an estimate of the resources, including 
funds, that will be required for all test, evalua-
tion, assessment, modeling, and simulation ac-
tivities; and 
(H) the Government entity or independent 
entity that will perform the test, evaluation, as-
sessment, modeling, and simulation activities. 
(4) UPDATE.—The Coast Guard Chief Acquisi-
tion Officer shall approve an updated TEMP when-
ever there is a revision to program or project test 
and evaluation strategy, scope, or phasing. 
(5) LIMITATION.—The Coast Guard may not— 
(A) proceed past that phase of the acquisi-
tion process that entails approving the sup-
porting acquisition of a capability or asset be-
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
shall also include an explanation of the actions that 
will be taken to correct or mitigate the safety con-
cern, the date by which those actions will be taken, 
and the adequacy of current funding to correct or 
mitigate the safety concern. 
(5) ASSET ALREADY IN LOW, INITIAL, OR FULL- 
RATE PRODUCTION.—If operational test and evalua-
tion on a capability or asset already in low, initial, 
or full-rate production identifies a safety concern 
with the capability or asset or any sub-systems of 
the capability or asset not previously identified dur-
ing developmental or operational test and evaluation, 
the Commandant shall— 
(A) notify the program manager and the 
Chief Acquisition Officer of the safety concern 
as soon as practicable, but not later than 30 
days after the completion of the test and eval-
uation event or activity that identified the safe-
ty concern; and 
(B) notify the appropriate congressional 
Committee of the safety concern not later than 
30 days after notification is made to the pro-
gram manager and Chief Acquisition Officer, 
and include in such notification— 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
pairing, or operating the capability, asset, or sub- 
system or any hazard associated with the capability, 
asset, or sub-system that is likely to cause major 
damage to the capability, asset, or sub-system dur-
ing the course of its normal operation by a typical 
Coast Guard user. 
(4) TEMP.—The term ‘‘TEMP’’ means a Test 
and Evaluation Master Plan for which approval is 
required under this section. 
SEC. 205. CAPABILITY STANDARDS. 
(a) CUTTER CLASSIFICATION.—The Commandant 
shall cause each cutter, other than a National Security 
Cutter, acquired by the Coast Guard and delivered after 
the date of enactment of this Act to be classed by the 
American Bureau of Shipping before final acceptance. 
(b) TEMPEST TESTING.—The Commandant shall— 
(1) cause all electronics on all aircraft, surface, 
and shore capabilities and assets that require TEM-
PEST certification and that are delivered after the 
date of enactment of this Act to be tested in accord-
ance with TEMPEST standards and communication 
security (COMSEC) standards by an independent 
third party that is authorized by the Federal Gov-
ernment to perform such testing; and 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(2) certify that the capabilities and assets meet 
all applicable TEMPEST requirements. 
(c) NATIONAL SECURITY CUTTERS.— 
(1) NATIONAL SECURITY CUTTERS 1 AND 2.— 
Not later than 90 days before the Coast Guard 
awards any contract or issues any delivery order or 
task order to strengthen the hull of either of Na-
tional Security Cutter 1 or 2 to resolve the struc-
tural design and performance issues identified in the 
Department of Homeland Security Inspector Gen-
eral’s report OIG–07–23 dated January 2007, the 
Commandant shall submit to the appropriate con-
gressional committees all results of an assessment of 
the proposed hull strengthening design conducted by 
the Coast Guard, including— 
(A) a description in detail of the extent to 
which the hull strengthening measures to be im-
plemented on those cutters will enable the cut-
ters to meet contract and performance require-
ments; 
(B) a cost benefit analysis of the proposed 
hull strengthening measures for National Secu-
rity Cutters 1 and 2; and 
(C) a description of any operational re-
strictions that would have to be applied to ei-
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
ther National Security Cutters 1 or 2 if the 
proposed hull strengthening measures were not 
implemented on either cutter. 
(2) OTHER VESSELS.—The Commandant shall 
cause the design and construction of each National 
Security Cutter, other than National Security Cut-
ters 1, 2, and 3, to be assessed by an independent 
third party with expertise in vessel design and con-
struction certification. 
(d) AIRCRAFT AIRWORTHINESS.—The Commandant 
shall cause all aircraft and aircraft engines acquired by 
the Coast Guard and delivered after the date of enactment 
of this Act to be assessed for airworthiness by an inde-
pendent third party with expertise in aircraft and aircraft 
engine certification, before final acceptance. 
SEC. 206. ACQUISITION PROGRAM REPORTS. 
Any Coast Guard Level 1 or Level 2 acquisition pro-
gram or project may not begin to obtain any capability 
or asset or proceed beyond that phase of its development 
that entails approving the supporting acquisition until the 
Commandant submits to the appropriate congressional 
committees the following: 
(1) The key performance parameters, the key 
system attributes, and the operational performance 
attributes of the capability and asset to be acquired 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
under the proposed acquisition program or project 
will be built to achieve. 
(2) A detailed list of the systems or other capa-
bilities with which the capability or asset to be ac-
quired is intended to be interoperable, including an 
explanation of the attributes of interoperability. 
(3) The anticipated acquisition program base-
line and acquisition unit cost for the capability or 
asset to be produced and deployed under the pro-
gram or project. 
(4) A detailed schedule for the acquisition proc-
ess showing when all capability and asset acquisi-
tions are to be completed and when all acquired ca-
pabilities and assets are to be initially and fully de-
ployed. 
SEC. 207. UNDEFINITIZED CONTRACTUAL ACTIONS. 
(a) IN GENERAL.—The Coast Guard may not enter 
into an undefinitized contractual action unless such action 
is directly approved by the Head of Contracting Activity 
of the Coast Guard. 
(b) REQUESTS FOR UNDEFINITIZED CONTRACTUAL 
ACTIONS.—Any request to the Head of Contracting Activ-
ity for approval of an undefinitized contractual action cov-
ered under subsection (a) must include a description of 
the anticipated effect on requirements of the Coast Guard 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
if a delay is incurred for the purposes of determining con-
tractual terms, specifications, and price before perform-
ance is begun under the contractual action. 
(c) REQUIREMENTS FOR UNDEFINITIZED CONTRAC-
TUAL ACTIONS.— 
(1) DEADLINE
FOR
AGREEMENT
ON
TERMS, 
SPECIFICATIONS, AND PRICE.—A contracting officer 
of the Coast Guard may not enter into an 
undefinitized contractual action unless the contrac-
tual action provides for agreement upon contractual 
terms, specification, and price by the earlier of— 
(A) the end of the 180-day period begin-
ning on the date on which the contractor sub-
mits a qualifying proposal to definitize the con-
tractual terms, specifications, and price; or 
(B) the date on which the amount of funds 
obligated under the contractual action is equal 
to more than 50 percent of the negotiated over-
all ceiling price for the contractual action. 
(2) LIMITATION ON OBLIGATIONS.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the contracting officer for an 
undefinitized contractual action may not obli-
gate under such contractual action an amount 
that exceeds 50 percent of the negotiated over-
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
all ceiling price until the contractual terms, 
specifications, and price are definitized for such 
contractual action. 
(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), if a contractor submits a quali-
fying proposal to definitize an undefinitized 
contractual action before an amount that ex-
ceeds 50 percent of the negotiated overall ceil-
ing price is obligated on such action, the con-
tracting officer for such action may not obligate 
with respect to such contractual action an 
amount that exceeds 75 percent of the nego-
tiated overall ceiling price until the contractual 
terms, specifications, and price are definitized 
for such contractual action. 
(3) WAIVER.—The Commandant may waive the 
application of this subsection with respect to a con-
tract if the Commandant determines that the waiver 
is necessary to support— 
(A) a contingency operation (as that term 
is defined in section 101(a)(13) of title 10, 
United States Code); 
(B) an operation in response to an emer-
gency that poses an unacceptable threat to 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
human health or safety or to the marine envi-
ronment; or 
(C) an operation in response to a natural 
disaster or major disaster or emergency des-
ignated by the President under the Robert T. 
Stafford Disaster Relief and Emergency Assist-
ance Act (42 U.S.C. 5121 et seq.). 
(4) LIMITATION ON APPLICATION.—This sub-
section does not apply to an undefinitized contrac-
tual action for the purchase of initial spares. 
(d) INCLUSION OF NONURGENT REQUIREMENTS.— 
Requirements for spare parts and support equipment that 
are not needed on an urgent basis may not be included 
in an undefinitized contractual action by the Coast Guard 
for spare parts and support equipment that are needed 
on an urgent basis unless the Commandant approves such 
inclusion as being— 
(1) good business practice; and 
(2) in the best interests of the United States. 
(e) MODIFICATION
OF SCOPE.—The scope of an 
undefinitized contractual action under which performance 
has begun may not be modified unless the Commandant 
approves such modification as being— 
(1) good business practice; and 
(2) in the best interests of the United States. 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(f) ALLOWABLE PROFIT.—The Commandant shall 
ensure that the profit allowed on an undefinitized contrac-
tual action for which the final price is negotiated after 
a substantial portion of the performance required is com-
pleted reflects— 
(1) the possible reduced cost risk of the con-
tractor with respect to costs incurred during per-
formance of the contract before the final price is ne-
gotiated; and 
(2) the reduced cost risk of the contractor with 
respect to costs incurred during performance of the 
remaining portion of the contract. 
(g) DEFINITIONS.—In this section: 
(1) UNDEFINITIZED CONTRACTUAL ACTION.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘‘undefinitized con-
tractual action’’ means a new procurement ac-
tion entered into by the Coast Guard for which 
the contractual terms, specifications, or price 
are not agreed upon before performance is 
begun under the action. 
(B) EXCLUSION.—Such term does not in-
clude contractual actions with respect to the fol-
lowing: 
(i) Foreign military sales. 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(ii) Purchases in an amount not in ex-
cess of the amount of the simplified acqui-
sition threshold. 
(iii) Special access programs. 
(2) QUALIFYING PROPOSAL.—The term ‘‘quali-
fying proposal’’ means a proposal that contains suf-
ficient information to enable complete and meaning-
ful audits of the information contained in the pro-
posal as determined by the contracting officer. 
SEC. 
208. 
GUIDANCE 
ON 
EXCESSIVE 
PASS-THROUGH 
CHARGES. 
(a) IN GENERAL.—Not later than 180 days after the 
date of enactment of this Act, the Commandant shall issue 
guidance to ensure that pass-through charges on con-
tracts, subcontracts, delivery orders, and task orders that 
are entered into with a private entity acting as a lead sys-
tems integrator by or on behalf of the Coast Guard are 
not excessive in relation to the cost of work performed by 
the relevant contractor or subcontractor. The guidance 
shall, at a minimum— 
(1) set forth clear standards for determining 
when no, or negligible, value has been added to a 
contract by a contractor or subcontractor; 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
(2) set forth procedures for preventing the pay-
ment by the Government of excessive pass-through 
charges; and 
(3) identify any exceptions determined by the 
Commandant to be in the best interest of the Gov-
ernment. 
(b) 
EXCESSIVE
PASS-THROUGH
CHARGE
DE-
FINED.—In this section the term ‘‘excessive pass-through 
charge’’, with respect to a contractor or subcontractor that 
adds no, or negligible, value to a contract or subcontract, 
means a charge to the Government by the contractor or 
subcontractor that is for overhead or profit on work per-
formed by a lower-tier contractor or subcontractor, other 
than reasonable charges for the direct costs of managing 
lower-tier contractors and subcontracts and overhead and 
profit based on such direct costs. 
(c) APPLICATION
OF
GUIDANCE.—The guidance 
under this subsection shall apply to contracts awarded to 
a private entity acting as a lead systems integrator by or 
on behalf of the Coast Guard on or after the date that 
is 360 days after the date of enactment of this Act. 
SEC. 209. ACQUISITION OF MAJOR CAPABILITIES: ALTER-
NATIVES ANALYSIS. 
The Coast Guard may not acquire an experimental 
or technically immature capability or asset or implement 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS
a Level 1 or Level 2 acquisition, unless it has conducted 
an alternatives analysis for the capability or asset to be 
acquired in the concept and technology development phase 
of the acquisition process for the capability or asset. Such 
analysis shall be conducted by a federally funded research 
and development center, a qualified entity of the Depart-
ment of Defense, or a similar independent third party enti-
ty that has appropriate acquisition expertise. Such alter-
natives analysis shall include— 
(1) an assessment of the technical maturity of 
the capability or asset and technical and other risks; 
(2) an examination of capability, interoper-
ability, and other advantages and disadvantages; 
(3) an evaluation of whether different combina-
tions or quantities of specific capabilities or assets 
could meet the Coast Guard’s overall performance 
needs; 
(4) a discussion of key assumptions and vari-
ables, and sensitivity to change in such assumptions 
and variables; 
(5) when an alternative is an existing capa-
bility, asset, or prototype, an evaluation of relevant 
safety and performance records and costs; 
(6) a calculation of life-cycle costs, including— 
VerDate Nov 24 2008 
02:14 Mar 24, 2009
Jkt 079200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.IH
H1665
jbell on PROD1PC69 with BILLS