(4) In addition, contractors are currently hold-
ing program funding, estimated to be in the hun-
dreds of millions of dollars, to cover the potential 
termination liability should the Government choose 
to terminate a program for convenience. As a result, 
hundreds of millions of taxpayer dollars are unavail-
able for meaningful work on these programs. 
(5) According to the Government Accountability 
Office, the Administration procures most of its 
goods and services through contracts, and it termi-
nates very few of them. In fiscal year 2010, the Ad-
ministration terminated 28 of 16,343 active con-
tracts and orders—a termination rate of about 0.17 
percent. 
(6) Providing processes requiring congressional 
action on termination of these high-priority pro-
grams would enable contractors to apply taxpayer 
dollars to making maximum progress in meeting the 
established technical goals and schedule milestones 
of these programs. 
(b) NASA TERMINATION LIABILITY.— 
(1) GENERAL
RULE.—Termination liability 
costs for a covered program shall be provided only 
pursuant to this subsection. 
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(2) PROHIBITION ON RESERVING FUNDS.—The 
Administrator may not reserve funds from amounts 
appropriated for a covered program, or require the 
reservation of funds by the prime contractor, for po-
tential termination liability costs with respect to a 
covered program. 
(3) INTENT OF CONGRESS.—It is the intent of 
Congress that funds authorized to be appropriated 
for covered programs be applied in meeting estab-
lished technical goals and schedule milestones. 
(4) 
APPLICATION
OF
PRIOR
RESERVED 
FUNDS.—Funds that have been reserved before the 
date of enactment of this Act for potential termi-
nation liability shall be promptly used to make max-
imum progress in meeting the established goals and 
milestones of the covered program. 
(5) NOTIFICATION.—The Administrator shall 
notify the Committee on Science, Space, and Tech-
nology of the House of Representatives and the 
Committee on Commerce, Science, and Transpor-
tation of the Senate not later than 120 days in ad-
vance of initiating termination for convenience or 
termination for cause of a prime contract on a cov-
ered program. 
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(6) 
SUPPLEMENTAL
APPROPRIATION
RE-
QUEST.— 
(A) REQUEST.—If the Administrator initi-
ates termination of a prime contract on a cov-
ered program pursuant to paragraph (5), and 
sufficient unobligated appropriations are not 
available to cover termination liability costs in 
the appropriations account that is funding the 
prime contract being terminated, the Adminis-
trator shall provide to Congress a notification 
that an authorization of appropriations is nec-
essary not later than 120 days in advance of 
the proposed contract termination settlement 
for the covered program. 
(B) INTENT OF CONGRESS.—It is the in-
tent of Congress to provide additional author-
ization for appropriations as may be necessary 
to pay termination liability costs on prime con-
tracts for covered programs if Congress deems 
it appropriate that the Administration termi-
nate such prime contracts. The Administration 
shall be responsible for applying these addi-
tional funds for payment of all allowable and 
reasonable negotiated termination liability costs 
if the Administration terminates a prime con-
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tract for a covered program. If the Administra-
tion terminates a prime contract for a covered 
program for the convenience of the Federal 
Government, then the Federal Government is 
responsible for payment of all allowable and 
reasonable negotiated termination liability costs 
on the prime contract. 
(c) REPORTING.—Not later than 6 months after the 
date of enactment of this Act, and every 6 months there-
after for the duration of the prime contracts on covered 
programs, the Administrator shall transmit to the Com-
mittee on Science, Space, and Technology of the House 
of Representatives and the Committee on Commerce, 
Science, and Transportation of the Senate a report that 
provides— 
(1) the estimated termination liability costs for 
each of the prime contracts; and 
(2) the basis for how such estimate was deter-
mined. 
(d) DEFINITIONS.—For purposes of this section: 
(1) COVERED
PROGRAM.—The term ‘‘covered 
program’’ means the International Space Station, 
the Space Launch System, the Orion crew capsule, 
and the James Webb Space Telescope. 
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(2) PRIME CONTRACT.—The term ‘‘prime con-
tract’’ means a contract entered directly between a 
person or entity and the Federal Government for the 
performance of all or the majority of the responsibil-
ities for developing, integrating, fielding, operating, 
or sustaining a covered program. 
(3) PRIME
CONTRACTOR.—The term ‘‘prime 
contractor’’ means a person or entity contracting di-
rectly with the Federal Government on a covered 
program. 
(4) TERMINATION LIABILITY COSTS.—The term 
‘‘termination liability costs’’ means any costs in-
curred by a prime contractor, or by any subcon-
tractor of a prime contractor, for which the Federal 
Government is liable as a result of termination of a 
prime contract by the Administrator. 
SEC. 703. BASELINE AND COST CONTROLS. 
Section 30104 of title 51, United States Code, is 
amended— 
(1) in subsection (a)(1), by striking ‘‘Proce-
dural Requirements 7120.5c, dated March 22, 
2005’’ and inserting ‘‘Procedural Requirements 
7120.5E, dated August 14, 2012’’; and 
(2) in subsection (f), by striking ‘‘beginning 18 
months after the date the Administrator transmits a 
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report under subsection (e)(1)(A)’’ and inserting 
‘‘beginning 18 months after the Administrator 
makes such determination’’. 
SEC. 704. PROJECT AND PROGRAM RESERVES. 
To ensure that the establishment, maintenance, and 
allotment of project and program reserves contribute to 
prudent management, not later than 180 days after the 
date of enactment of this Act, the Administrator shall 
transmit to the Committee on Science, Space, and Tech-
nology of the House of Representatives and the Committee 
on Commerce, Science, and Transportation of the Senate 
a report describing the Administration’s criteria for estab-
lishing the amount of reserves at the project and program 
levels and how such criteria complement the Administra-
tion’s policy of budgeting at a 70-percent confidence level. 
SEC. 705. INDEPENDENT REVIEWS. 
Not later than 270 days after the date of enactment 
of this Act, the Administrator shall transmit to the Com-
mittee on Science, Space, and Technology of the House 
of Representatives and the Committee on Commerce, 
Science, and Transportation of the Senate a report de-
scribing the Administration’s procedures for conducting 
independent reviews of projects and programs at lifecycle 
milestones and how the Administration ensures the inde-
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