710 
(A) the congressional defense committees; 
and 
(B) the Committee on Foreign Relations of 
the Senate and the Committee on Foreign Af-
fairs of the House of Representatives. 
SEC. 1213. ONE-YEAR EXTENSION OF AUTHORITY TO USE 
FUNDS FOR REINTEGRATION ACTIVITIES IN 
AFGHANISTAN. 
Section 1216 of the Ike Skelton National Defense 
Authorization Act for Fiscal Year 2011 (Public Law 111– 
383; 124 Stat. 4392), as amended by section 1216 of the 
National Defense Authorization Act for Fiscal Year 2012 
(Public Law 112–81; 125 Stat. 1632), is further amend-
ed— 
(1) in subsection (a)— 
(A) by striking ‘‘$50,000,000’’ and insert-
ing ‘‘$35,000,000’’; and 
(B) by striking ‘‘in each of fiscal years 
2011 and 2012’’ and inserting ‘‘for fiscal year 
2013’’; and 
(2) in subsection (e)— 
(A) by striking ‘‘utilize funds’’ and insert-
ing ‘‘obligate funds’’; and 
(B) by striking ‘‘December 31, 2012’’ and 
inserting ‘‘December 31, 2013’’.
711 
SEC. 1214. PROHIBITION ON USE OF PRIVATE SECURITY 
CONTRACTORS AND MEMBERS OF THE AF-
GHAN PUBLIC PROTECTION FORCE TO PRO-
VIDE 
SECURITY 
FOR 
MEMBERS 
OF 
THE 
ARMED FORCES AND MILITARY INSTALLA-
TIONS AND FACILITIES IN AFGHANISTAN. 
(a) FINDINGS.—Congress makes the following find-
ings: 
(1) According to the Department of Defense, as 
of February 1, 2012, there had been 42 insider at-
tacks on coalition forces since 2007 by the Afghan 
National Army, Afghan National Police, or Afghan 
nationals hired by private security contractors to 
guard United States bases and facilities in Afghani-
stan. 
(2) The Department of Defense data shows 
that the trend of insider attacks is increasing. 
(3) Members of the Armed Forces of the 
United States continue to be garrisoned and housed 
in facilities and installations in Afghanistan that are 
guarded by private security contractors and not by 
United States or coalition forces. 
(4) President Karzai has prohibited the use of 
private security contractors in Afghanistan and de-
termined that beginning in March, 2012, the Afghan 
Ministry of Interior will provide Afghan Public Pro-
712 
tection Forces on a reimbursable basis to those de-
siring to contract for additional security. 
(5) The Afghan Ministry of Interior will have 
the primary responsibility for screening and vetting 
the Afghan nationals who will comprise the Afghan 
Public Protection Force. 
(6) The current force levels in Afghanistan are 
necessary to accomplish the International Security 
Assistance Force mission and force protection for 
members of the Armed Forces garrisoned and 
housed in Afghanistan should not come at the ex-
pense of mission success. 
(7) The President of the United States has 
begun to draw down United States military forces in 
Afghanistan and has committed to continue this 
drawdown through 2014. 
(8) The redeployment phase of any military op-
eration brings increasing vulnerabilities to members 
of the Armed Forces. 
(9) It is the responsibility of the Commander in 
Chief to provide for the security for members of the 
Armed Forces deployed to Afghanistan and to miti-
gate internal threats to such forces to the greatest 
extent possible, while continuing to meet the objec-
tives of the International Security Assistance Force
713 
mission in Afghanistan, including the training and 
equipping of the Afghan National Security Forces in 
order that they may provide for their own security. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) the best security and force protection for 
members of the Armed Forces garrisoned and 
housed in Afghanistan should be provided; 
(2) better security and force protection for 
members of the Armed Forces garrisoned and 
housed in Afghanistan can be provided by United 
States military personnel than private security con-
tractors or members of the Afghan Public Protection 
Force; 
(3) the President should take action in light of 
the increased risk to members of the Armed Forces 
during this transitional period in Afghanistan and 
the increasing number of insider attacks; and 
(4) the United States remains committed to 
mission success in Afghanistan in light of the na-
tional security interests in the region and the sac-
rifice and commitment of the United States Armed 
Forces over the last ten years. 
(c) PROHIBITION.—Notwithstanding section 2465 of 
title 10, United States Code, funds appropriated to the
714 
Department of Defense may not be obligated or expended 
for the purpose of— 
(1) entering into a contract for the performance 
of security-guard functions at a military installation 
or facility in Afghanistan at which members of the 
Armed Forces deployed to Afghanistan are garri-
soned or housed; 
(2) otherwise employing private security con-
tractors to provide security for members of the 
Armed Forces deployed to Afghanistan; or 
(3) employing the Afghan Public Protection 
Force to provide security for such members or to 
perform such security-guard functions at such a 
military installation or facility. 
(d) REQUIREMENT.— 
(1) IN GENERAL.—The President shall ensure 
that as many appropriately trained members of the 
Armed Forces of the United States as are necessary 
are available to— 
(A) perform security-guard functions at all 
military installations and facilities in Afghani-
stan at which members of the Armed Forces 
deployed to Afghanistan are garrisoned or 
housed;
715 
(B) provide security for members of the 
Armed Forces deployed to Afghanistan; and 
(C) provide adequate counterintelligence 
support for such members. 
(2) RELATIONSHIP TO OTHER REQUIREMENTS 
AND
LIMITATIONS.—The members of the Armed 
Forces required to be made available under para-
graph (1) shall be in addition to— 
(A) the number of such members who are 
deployed to Afghanistan to support the require-
ments of the North Atlantic Treaty Organiza-
tion mission in Afghanistan and the military 
campaign plan of the Commander of the Inter-
national Security and Assistance Force; and 
(B) any limitation on force levels that may 
be in effect. 
(e) WAIVER.—The President may waive the prohibi-
tion under subsection (c) and the requirement under sub-
section (d) if the President submits to Congress a certifi-
cation in writing that— 
(1) the use of private security contractors or 
the Afghan Public Protection Force can provide a 
level of security and force protection for members of 
the Armed Forces deployed to Afghanistan that is at 
least equal to the security and force protection that
716 
can be provided by members of the Armed Forces; 
and 
(2) the Secretary of Defense has ensured that 
all employees of private security contractors and 
members of the Afghan Public Protection Force pro-
viding security or force protection for members of 
the Armed Forces deployed to Afghanistan are inde-
pendently screened and vetted by members of the 
Armed Forces of the United States. 
(f) REPORT.— 
(1) IN GENERAL.—Not later than 30 days after 
the end of each quarter of fiscal years 2013 and 
2014, the Secretary of Defense shall submit to the 
congressional defense committees a report on the fol-
lowing: 
(A) Data on attempted and successful at-
tacks by the Afghan National Security Forces, 
the Afghan Public Protection Force, and pri-
vate security contractors on United States 
Armed Forces and civilian personnel of the De-
partment of Defense. 
(B) The number of members of the United 
States Armed Forces and civilian personnel of 
the Department of Defense wounded or killed 
due to such attacks.
717 
(C) A description of tactical or covert 
methods used in such attacks and a description 
of motivations for such attacks. 
(2) ADDITIONAL INFORMATION.—The first re-
port submitted following the date of the enactment 
of this Act and the report submitted for the first 
quarter of fiscal year 2014 shall also include the fol-
lowing: 
(A) Actions the Department of Defense is 
taking to monitor indicators and early warning 
signs of infiltration or co-option of the Afghan 
National Security Forces, the Afghan Public 
Protection Force, and private security contrac-
tors. 
(B) The methodology and systematic ap-
proach to resolving disputes between the Af-
ghan National Security Forces and United 
States Armed Forces and civilian personnel of 
the Department of Defense when such disputes 
arise. 
(g) DEFINITION.—In this section, the term ‘‘mem-
bers of the Armed Forces deployed to Afghanistan’’ means 
members of the Armed Forces deployed to Afghanistan 
in support of the International Security Assistance Force 
in Afghanistan and members of the Armed Forces of the
718 
United States deployed to Afghanistan in support of Oper-
ation Enduring Freedom. 
SEC. 1215. REPORT ON UPDATES AND MODIFICATIONS TO 
CAMPAIGN PLAN FOR AFGHANISTAN. 
(a) REPORT REQUIRED.—Not later than 180 days 
after the date on which any substantial update or modi-
fication is made to the campaign plan for Afghanistan (in-
cluding the supporting and implementing documents for 
such plan), the Comptroller General of the United States 
shall submit to the congressional defense committees a re-
port on the updated or modified plan, including an assess-
ment of the updated or modified plan. 
(b) EXCEPTION.—The requirement to submit a re-
port under subsection (a) on any substantial update or 
modification to the campaign plan for Afghanistan shall 
not apply if the Comptroller General— 
(1) determines that a report submitted to Con-
gress by the Comptroller General before the date of 
the enactment of this Act substantially meets the re-
quirement to submit the report under subsection (a); 
and 
(2) notifies the congressional defense commit-
tees in writing of the determination under paragraph 
(1).
719 
(c) TERMINATION.—The requirement to submit a re-
port under subsection (a) on any substantial update or 
modification to the campaign plan for Afghanistan shall 
terminate on September 30, 2014. 
(d) REPEAL.—Section 1226 of the National Defense 
Authorization Act for Fiscal Year 2010 (Public Law 111– 
84; 123 Stat. 2525) is repealed. 
SEC. 1216. UNITED STATES MILITARY SUPPORT IN AFGHAN-
ISTAN. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) following Al Qaeda’s attacks on the United 
States on September 11, 2001, United States and 
coalition forces have achieved significant progress to-
ward security and stability in Afghanistan; 
(2) as the United States completes transfer of 
the lead for security to the Afghan National Security 
Forces by the end of 2014, the United States should 
ensure that the gains in security are maintained; 
(3) the United States mission in Afghanistan 
continues to be to disrupt, dismantle, and defeat al 
Qaeda, as well as to prevent its return to either Af-
ghanistan or Pakistan; 
(4) the specific objectives in Afghanistan are to 
deny safe haven to Al Qaeda and to deny the
720 
Taliban the ability to overthrow the Afghan Govern-
ment; 
(5) the Taliban, Haqqanis, and associated in-
surgents continue to enjoy safe havens in Pakistan, 
but are unlikely to be capable of overthrowing the 
Afghan Government unless the United States with-
draws forces precipitously from Afghanistan; 
(6) the Haqqani Network provides unique capa-
bilities and capacity to the Afghan Taliban, and ad-
ditionally, serves as a combat multiplier to the Af-
ghan insurgency due to its geographic primacy over 
the key terrain of the Paktika, Paktia, and Khost 
provinces, as well as North and South Waziristan, 
and willingness to introduce international weaponry 
and technology into the battle space and serve as the 
reception point and integrator of international for-
eign fighters into the Afghan insurgency; 
(7) the Haqqani Network has been the most 
important Afghan-based protector of Al Qaeda; 
(8) the unique capabilities and effects brought 
to the battle space by the Haqqani Network neces-
sitate that the Government of Afghanistan should 
have superior operational capacity in order to main-
tain the security of Afghanistan over time;
721 
(9) the United States military should not main-
tain an indefinite combat mission in Afghanistan 
and should transition to a counter-terrorism and ad-
vise and assist mission at the earliest practicable 
date, consistent with conditions on the ground; 
(10) significant uncertainty exists within Af-
ghanistan regarding the level of future United 
States military support; and 
(11) in order to reduce this uncertainty, and to 
promote further stability and security in Afghani-
stan, the President should— 
(A) fully consider the International Secu-
rity Assistance Force Commander’s assessment 
regarding the need for the United States to 
maintain 
a 
‘‘significant 
combat 
presence 
through 2013’’; 
(B) maintain a force of at least 68,000 
troops through December 31, 2014, unless 
fewer forces can achieve United States objec-
tives; 
(C) maintain a credible troop presence 
after December 31, 2014, sufficient to conduct 
counter-terrorism and train and advise the Af-
ghan National Security Forces, consistent with
722 
the Strategic Partnership Agreement (signed on 
May 2, 2012); and 
(D) maintain sufficient funding for the Af-
ghan National Security Forces to accomplish 
the objectives described in paragraphs (3), (4), 
and (8). 
(b) NOTIFICATION.—The President shall notify the 
congressional defense committees of any decision to reduce 
the number of United States Armed Forces deployed in 
Afghanistan below the number of such Armed Forces de-
ployed in Afghanistan on— 
(1) December 31, 2012; 
(2) December 31, 2013; and 
(3) December 31, 2014, 
prior to any public announcement of any such decision to 
reduce the number of United States Armed Forces de-
ployed in Afghanistan. 
(c) MATTERS TO INCLUDE IN NOTIFICATION.—As 
part of a notification required by subsection (b), the Presi-
dent shall— 
(1) provide an assessment of the relevant secu-
rity risk metrics associated with the marginal reduc-
tion in force levels; and 
(2) provide a by-unit assessment of the oper-
ational capability of the Afghan National Security
723 
Forces to independently conduct the required oper-
ations to maintain security in Afghanistan. 
SEC. 1217. EXTENSION AND MODIFICATION OF PAKISTAN 
COUNTERINSURGENCY FUND. 
(a) IN GENERAL.—Section 1224(h) of the National 
Defense Authorization Act for Fiscal Year 2010 (Public 
Law 111–84; 123 Stat. 2521), as most recently amended 
by section 1220 of the National Defense Authorization Act 
for Fiscal Year 2012 (Public Law 112–81; 125 Stat. 
1633), is further amended by striking ‘‘September 30, 
2012’’ both places it appears and inserting ‘‘September 
30, 2013’’. 
(b) LIMITATION ON FUNDS SUBJECT TO REPORT 
AND UPDATES.—Section 1220(b) of the National Defense 
Authorization Act for Fiscal Year 2012 (Public Law 112– 
81; 125 Stat. 1633) is amended— 
(1) in the heading of paragraph (1), by insert-
ing ‘‘FOR FISCAL YEAR 2012’’ after ‘‘FUNDS’’; 
(2) by redesignating paragraphs (2), (3), and 
(4) as paragraphs (3), (4), and (5), respectively; 
(3) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) LIMITATION ON FUNDS FOR FISCAL YEAR 
2013; REPORT REQUIRED.—Of the amounts appro-
priated or transferred to the Fund for fiscal year
724 
2013, not more than 10 percent of such amounts 
may be obligated or expended until 30 days after the 
date on which the Secretary of Defense, with the 
concurrence of the Secretary of State, submits to the 
appropriate congressional committees an update of 
the report required under paragraph (1).’’; 
(4) in paragraph (3) (as redesignated)— 
(A) by inserting ‘‘after fiscal year 2013’’ 
after ‘‘any fiscal year’’; 
(B) by striking ‘‘requested to be’’; and 
(C) by striking ‘‘at the same time that the 
President’s budget is submitted pursuant to 
section 1105(a) of title 31, United States 
Code’’ and inserting ‘‘not later than 45 days be-
fore amounts in the Fund are made available to 
the Secretary of Defense’’; and 
(5) in paragraph (4) (as redesignated), by strik-
ing ‘‘the update required under paragraph (2)’’ and 
inserting ‘‘the updates required under paragraphs 
(2) and (3)’’. 
SEC. 1218. MODIFICATION OF REPORT ON PROGRESS TO-
WARD SECURITY AND STABILITY IN AFGHAN-
ISTAN. 
(a) IN GENERAL.—Section 1230 of the National De-
fense Authorization Act for Fiscal Year 2008 (Public Law
725 
110–181; 122 Stat. 385), as most recently amended by 
section 1218(a) of the National Defense Authorization Act 
for Fiscal Year 2012 (Public Law 112–81; 125 Stat. 
1632), is further amended— 
(1) by redesignating subsections (e), (f), and 
(g) as subsections (f), (g), and (h), respectively; and 
(2) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) ADDITIONAL MATTERS TO BE INCLUDED ON 
AFGHANISTAN NATIONAL SECURITY FORCES.—In report-
ing on performance indicators and measures of progress 
required under subsection (d)(2)(D), the report required 
under subsection (a) shall assess the following: 
‘‘(1) For overall Afghanistan National Security 
Forces (ANSF): 
‘‘(A) 
Overall 
Afghan 
National 
Army 
(ANA) and Afghan National Police (ANP) lit-
eracy rate; ANA and ANP literacy rate by re-
gion; ANSF literacy rate by Kandak, Brigade, 
and Corps; trends over time; and how literacy 
improvements have enhanced associated mission 
essential competencies and professionalization 
of the ANSF. 
‘‘(B) An assessment of the ANA and the 
ANP interaction with the Afghan civilian popu-
726 
lation, respect for human rights, and associated 
professional education. 
‘‘(C) By fiscal year (current and one-year 
projected) budget requirements. 
‘‘(D) A by-country outline of contributions 
for the current fiscal year and one-year pro-
jected fiscal year. 
‘‘(E) By-Kandak Mission Essential Task 
List proficiency. 
‘‘(2) For recruitment: 
‘‘(A) Outline of screening criteria. 
‘‘(B) Literacy rate of all recruits. 
‘‘(C) Outline of the security vetting proce-
dures. 
‘‘(D) Percentage screened that are not eli-
gible to serve. 
‘‘(E) Percentage screened that report for 
entry level training. 
‘‘(F) Percentage attained of the required 
ANA end strength, of the ANP end strength, 
and overall ANSF end strength. 
‘‘(G) Trends in each above mentioned cat-
egory from the prior fiscal year through the 
current report deadline. 
‘‘(3) For entry-level training:
727 
‘‘(A) Percentage that entered and success-
fully complete training. 
‘‘(B) A by-specialty list of all recruits that 
fail to graduate entry level training for the 
ANA and ANP. 
‘‘(C) Percentage of recruits that become 
unaccounted (UA) for or are ‘Absent Without 
Leave’ (AWOL) during training. 
‘‘(D) Trends in each above mentioned cat-
egory from the prior fiscal year through the 
current report deadline. 
‘‘(4) For personnel administration: 
‘‘(A) Percentage of the ANSF that was 
paid on time. 
‘‘(B) UA/AWOL rate by Kandak, Brigade, 
and Corps. 
‘‘(C) Trends in each above mentioned cat-
egory from the prior fiscal year through the 
current report deadline. 
‘‘(5) For professionalization of the ANSF: 
‘‘(A) Percentage of noncommissioned offi-
cer corps personnel as compared to noncommis-
sioned officer corps end-strength requirements.
728 
‘‘(B) Number of enlisted, noncommissioned 
officer corps, and officers that complete con-
tinuing education. 
‘‘(C) An assessment of the noncommis-
sioned officer corps continuing education pro-
gram. 
‘‘(6) For retention: 
‘‘(A) On average time ANA and ANP per-
sonnel remain in their respective units. 
‘‘(B) By-fiscal year, by-Kandak percentage 
of personnel retained and personnel attrition 
from the prior fiscal year through the current 
report deadline. 
‘‘(7) For logistics: 
‘‘(A) On average percentage shortfall, by 
Kandak, of Class I-IX supplies, which includes 
Class I - Food, rations, and water; Class II – 
Clothing; Class III - Petroleum, oils, and lubri-
cants; Class IV - Fortification and barrier ma-
terials; Class V – Ammunition; Class VII - 
Major End Items; Class VIII - Medical sup-
plies; and Class IX - Repair Parts. 
‘‘(B) On average number of days to fill 
supply requests to address operational short-
falls.
729 
‘‘(C) Operational readiness rate for all mis-
sion essential equipment by Kandak, Brigade, 
and Corps. 
‘‘(8) For transition: 
‘‘(A) Provide the framework that ISAF, in 
conjunction with the Afghan government, uses 
to synthesize ANSF performance metrics and 
adjudicate transition of ANSF units through 
proficiency levels. 
‘‘(B) A by-Kandak analysis of the on aver-
age time to transition between proficiency levels 
since inception of the ANSF transition. 
‘‘(C) A by-region overview of the force 
structure mix that is correlated with the evo-
lution of threat picture in the region.’’. 
(b) EFFECTIVE DATE.—The amendments made this 
section apply with respect to any report required to be 
submitted under section 1230 of the National Defense Au-
thorization Act for Fiscal Year 2008 (Public Law 110– 
181; 122 Stat. 385) on or after the date of the enactment 
of this Act. 
SEC. 1219. LIMITATION ON USE OF FUNDS UNDER THE 
PAKISTAN COUNTERINSURGENCY FUND. 
(a) LIMITATION.—None of the funds authorized to 
be appropriated by this Act for the Pakistan Counter-
730 
insurgency Fund may be used to provide assistance to the 
Government of Pakistan until the Secretary of Defense, 
in consultation with the Secretary of State, certifies to the 
appropriate congressional committees that the Govern-
ment of Pakistan is demonstrating a continuing commit-
ment to and is making significant efforts toward the im-
plementation of a strategy to counter improvised explosive 
devices (IEDs), including— 
(1) attacking IED networks; 
(2) monitoring known precursors used in IEDs; 
and 
(3) developing a strict protocol for the manufac-
ture of explosive materials, including calcium ammo-
nium nitrate, and accessories and their supply to le-
gitimate end users. 
(b) WAIVER.—The Secretary of Defense, in consulta-
tion with the Secretary of State, may waive the require-
ments of subsection (a) if the Secretary determines it is 
in the national security interest of the United States to 
do so. 
(c) DEFINITION.—In this section, the term ‘‘appro-
priate congressional committees’’ means— 
(1) the congressional defense committees; and
731 
(2) the Committee on Foreign Relations of the 
Senate and the Committee on Foreign Affairs of the 
House of Representatives. 
Subtitle C—Matters Relating to 
Iran 
SEC. 1221. DECLARATION OF POLICY. 
(a) FINDINGS.—Congress makes the following find-
ings: 
(1) Iran, which has long sought to foment in-
stability and promote extremism in the Middle East, 
is now seeking to exploit the dramatic political tran-
sition underway in the region to undermine govern-
ments traditionally aligned with the United States 
and support extremist political movements in these 
countries. 
(2) At the same time, Iran may soon attain a 
nuclear weapons capability, a development that 
would threaten United States interests, destabilize 
the region, encourage regional nuclear proliferation, 
further empower and embolden Iran, the world’s 
leading state sponsor of terrorism, and provide it the 
tools to threaten its neighbors, including Israel. 
(3) With the assistance of Iran over the past 
several years, Syria, Hezbollah, and Hamas have in-
creased their stockpiles of rockets, with more than
732 
60,000 rockets now ready to be fired at Israel. Iran 
continues to add to its arsenal of ballistic missiles 
and cruise missiles, which threaten Iran’s neighbors, 
Israel, and United States Armed Forces in the re-
gion. 
(4) Preventing Iran from acquiring a nuclear 
weapon is among the most urgent national security 
challenges facing the United States. 
(5) Successive United States administrations 
have stated that an Iran armed with a nuclear weap-
on is unacceptable. 
(6) President Obama stated on January 24, 
2012, ‘‘Let there be no doubt: America is deter-
mined to prevent Iran from getting a nuclear weap-
on, and I will take no options off the table to achieve 
that goal.’’. 
(7) In order to prevent Iran from developing 
nuclear weapons, the United States, in cooperation 
with its allies, must utilize all elements of national 
power including diplomacy, robust economic sanc-
tions, and credible, visible preparations for a mili-
tary option. 
(8) Nevertheless, to date, diplomatic overtures, 
sanctions, and other non-kinetic actions toward Iran
733 
have not caused the Government of Iran to abandon 
its nuclear weapons program. 
(9) With the impact of additional sanctions un-
certain, additional pressure on the Government of 
Iran could come from the credible threat of military 
action against Iran’s nuclear program. 
(b) DECLARATION OF POLICY.—It shall be the policy 
of the United States to take all necessary measures, in-
cluding military action if required, to prevent Iran from 
threatening the United States, its allies, or Iran’s neigh-
bors with a nuclear weapon. 
SEC. 1222. UNITED STATES MILITARY PREPAREDNESS IN 
THE MIDDLE EAST. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) military exercises conducted in the Persian 
Gulf and Gulf of Oman emphasize the United States 
resolve and the policy of the United States described 
in section 1221(b) by enhancing the readiness of the 
United States military and allied forces, as well as 
signaling to the Government of Iran the commitment 
of the United States to defend its vital national se-
curity interests; and 
(2) the President, as Commander in Chief, 
should augment the presence of the United States
734 
Fifth Fleet in the Middle East and to conduct mili-
tary deployments, exercises, or other visible, concrete 
military readiness activities to underscore the policy 
of the United States described in section 1221(b). 
(b) PLAN.— 
(1) IN
GENERAL.—The Secretary of Defense 
shall prepare a plan to augment the presence of the 
United States Fifth Fleet in the Middle East and to 
conduct military deployments, exercises, or other 
visible, concrete military readiness activities to un-
derscore the policy of the United States described in 
section 1221(b). 
(2) MATTERS TO BE INCLUDED.—The plan re-
quired under paragraph (1) shall include, at a min-
imum, steps necessary for the Armed Forces to sup-
port the policy of the United States described in sec-
tion 1221(b), including— 
(A) pre-positioning sufficient supplies of 
aircraft, munitions, fuel, and other materials 
for both air- and sea-based missions at key for-
ward locations in the Middle East and Indian 
Ocean; 
(B) maintaining sufficient naval assets in 
the region necessary to signal United States re-
solve and to bolster United States capabilities
735 
to launch a sustained sea and air campaign 
against a range of Iranian nuclear and military 
targets, to protect seaborne shipping, and to 
deny Iranian retaliation against United States 
interests in the region; 
(C) discussing the viability of deploying at 
least two United States aircraft carriers, an ad-
ditional large deck amphibious ship, and a Mine 
Countermeasures Squadron in the region on a 
continual basis, in support of the actions de-
scribed in subparagraph (B); and 
(D) conducting naval fleet exercises similar 
to the United States Fifth Fleet’s major exer-
cise in the region in March 2007 to dem-
onstrate ability to keep the Strait of Hormuz 
open and to counter the use of anti-ship mis-
siles and swarming high-speed boats. 
(3) SUBMISSION TO CONGRESS.—The plan re-
quired under paragraph (1) shall be submitted to 
the congressional defense committees not later than 
120 days after the date of enactment of this Act. 
SEC. 1223. ANNUAL REPORT ON MILITARY POWER OF IRAN. 
(a) IN GENERAL.—Section 1245 of the National De-
fense Authorization Act for Fiscal Year 2010 (Public Law 
111–84; 123 Stat. 2542) is amended—
736 
(1) by redesignating subsections (c) and (d) as 
subsections (d) and (e), respectively; and 
(2) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) COMBATANT COMMANDER ASSESSMENT.—The 
report required under subsection (a) shall include an 
annex, in classified or unclassified form, that includes an 
identification and assessment of the Commander of the 
United States Central Command on the following: 
‘‘(1) Any critical gaps in intelligence that limit 
the ability of the Commander to counter threats 
emanating from Iran. 
‘‘(2) Any gaps in the capabilities, capacity, and 
authorities of the Commander to counter Iranian 
threats to United States Armed Forces and United 
States interests in the region. 
‘‘(3) Any gaps in the capabilities and capacity 
of the Commander to take military action against 
Iran to prevent Iran from developing a nuclear 
weapon. 
‘‘(4) Any other matters the Commander con-
siders to be relevant.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) take effect on the date of the enactment 
of this Act and apply with respect to each report required
737 
to be submitted under section 1245 of the National De-
fense Authorization Act for Fiscal Year 2010 on or after 
such date of enactment. 
SEC. 1224. ENHANCING THE DEFENSE OF ISRAEL AND 
UNITED STATES INTERESTS IN THE MIDDLE 
EAST. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that the United States should take the following ac-
tions to assist in the defense of Israel: 
(1) Provide Israel such support as may be nec-
essary to increase development and production of 
joint missile defense systems, particularly such sys-
tems that defend the urgent threat posed to Israel 
and United States forces in the region. 
(2) Provide Israel defense articles, intelligence, 
and defense services through such mechanisms as 
appropriate, to include air refueling tankers, missile 
defense capabilities, and specialized munitions. 
(3) Allocate additional weaponry and munitions 
for the forward-deployed United States stockpile in 
Israel. 
(4) Provide Israel additional surplus defense ar-
ticles and defense services, as appropriate, in the 
wake of the withdrawal of United States forces from 
Iraq.
738 
(5) Offer the Israeli Air Force additional train-
ing and exercise opportunities in the United States 
to compensate for Israel’s limited air space. 
(6) Expand Israel’s authority to make pur-
chases under section 23 of the Arms Export Control 
Act (relating to the ‘‘Foreign Military Financing’’ 
program) on a commercial basis. 
(7) Seek to enhance the capabilities of the 
United States and Israel to address emerging com-
mon threats, increase security cooperation, and ex-
pand joint military exercises. 
(8) Encourage an expanded role for Israel with-
in the North Atlantic Treaty Organization (NATO), 
including an enhanced presence at NATO head-
quarters and exercises. 
(9) Support extension of the long-standing loan 
guarantee program for Israel, recognizing Israel’s 
unbroken record of repaying its loans on time and 
in full. 
(10) Expand already-close intelligence coopera-
tion, including satellite intelligence, with Israel. 
(b) REPORT ON ISRAEL’S QUALITATIVE MILITARY 
EDGE.— 
(1) STATEMENT OF POLICY.—It is the policy of 
the United States—
739 
(A) to help Israel preserve its qualitative 
military edge amid rapid and uncertain regional 
political transformation; and 
(B) to encourage further development of 
advanced technology programs between the 
United States and Israel in light of current 
trends and instability in the region. 
(2) REPORT.—Not later than 180 days after 
the date of the enactment of this Act, the President 
shall submit to the appropriate congressional com-
mittees a report on the status of Israel’s qualitative 
military edge in light of current trends and insta-
bility in the region. 
(c) REPORT ON OTHER MATTERS.—Not later than 
180 days after the date of the enactment of this Act, the 
President shall submit to the appropriate congressional 
committees a report on each of the following: 
(1) Taking into account Israel’s urgent require-
ment for F–35 aircraft, actions to improve the proc-
ess relating to Israel’s purchase of F–35 aircraft to 
improve cost efficiency and timely delivery. 
(2) Efforts to expand cooperation between the 
United States and Israel in homeland defense, 
counter-terrorism, maritime security, cybersecurity, 
and other appropriate areas.
740 
(3) Actions to integrate Israel into the defense 
of the Eastern Mediterranean. 
SEC. 1225. PLAN TO ENHANCE MILITARY CAPABILITIES OF 
PERSIAN GULF ALLIES. 
(a) PLAN.—The Secretary of Defense, in consultation 
with the Secretary of State, shall develop a plan to en-
hance the military capabilities of Persian Gulf allies to bol-
ster the posture of such allies in relation to Iran. 
(b) MATTERS TO BE INCLUDED.—The plan required 
under subsection (a) shall include the following: 
(1) A description of the means to augment the 
offensive strike capabilities of key Gulf Cooperation 
Council allies, including the potential sale or up-
grades of strike attack aircraft and bunker buster 
munitions, to augment the viability of a credible 
military option and to strengthen such allies’ self-de-
fense capabilities against retaliation or military ag-
gression by Iran. 
(2) A needs-based assessment, or an update to 
an existing needs-based assessment, of the military 
requirements of Persian Gulf allies to support a 
credible military option and to defend against poten-
tial military aggression by Iran. 
(3) A detailed summary of any arms sales and 
training requests by Persian Gulf allies and a de-
741 
scription and justification for United States actions 
taken. 
(c) RULE OF CONSTRUCTION.—Nothing in the plan 
required under subsection (a) shall be construed to alter 
Israel’s qualitative military edge. 
(d) SUBMISSION TO CONGRESS.—The plan required 
under subsection (a) shall be submitted to the appropriate 
congressional committees not later than 180 days after the 
date of the enactment of this Act. 
(e) FORM.—The plan required under subsection (a) 
shall be submitted in an unclassified form, but may con-
tain a classified annex. 
SEC. 1226. PLAN TO INCREASE STRATEGIC REGIONAL 
PARTNERSHIPS. 
(a) FINDINGS.—Congress finds the following: 
(1) The United States should ensure that it has 
the broadest set of geographic approaches to mili-
tarily access Iran. 
(2) United States Armed Forces and support 
staff currently have access from the eastern, south-
ern, and western borders of Iran. 
(3) Azerbaijan borders the northern frontier of 
Iran closest to nuclear sites near Tehran and the 
Government of Azerbaijan cooperates with the
742 
United States on Caspian Sea security and energy 
issues. 
(b) POLICY.—It shall be the policy of the United 
States to— 
(1) increase pressure on Iran by providing 
United States Armed Forces with the broadest set 
of geographic approaches to militarily access Iran; 
and 
(2) explore means to enhance access to military 
facilities on the northern border of Iran. 
(c) PLAN.— 
(1) IN GENERAL.—The Secretary of Defense, in 
consultation with the Secretary of State, shall de-
velop a plan to increase the strategic partnership 
with regional allies to provide United States Armed 
Forces with the broadest set of geographic ap-
proaches to militarily access Iran. 
(2) MATTERS TO BE INCLUDED.—The plan re-
quired under paragraph (1) shall include the fol-
lowing information: 
(A) Mechanisms to broaden the geo-
graphical approaches to militarily access Iran. 
(B) The need, if any, to strengthen the 
self-defense capabilities of regional allies as a 
result of such partnerships.
743 
(C) The viability of increasing access for 
United States Armed Forces to bases in Azer-
baijan to augment the viability of a credible 
military option. 
(3) SUBMISSION TO CONGRESS.—The plan re-
quired under paragraph (1) shall be submitted to 
the appropriate congressional committees not later 
than 180 days after the date of the enactment of 
this Act. 
SEC. 1227. DEFINITIONS. 
In this subtitle: 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means— 
(A) the Committee on Appropriations, the 
Committee on Armed Services, and the Com-
mittee on Foreign Affairs of the House of Rep-
resentatives; and 
(B) the Committee on Appropriations, the 
Committee on Armed Services, and the Com-
mittee on Foreign Relations of the Senate. 
(2) QUALITATIVE MILITARY EDGE.—The term 
‘‘qualitative military edge’’ has the meaning given 
the term in section 36(h)(2) of the Arms Export 
Control Act (22 U.S.C. 2776(h)(2)).
744 
SEC. 1228. RULE OF CONSTRUCTION. 
Nothing in this Act shall be construed as authorizing 
the use of force against Iran. 
Subtitle D—Reports and Other 
Matters 
SEC. 1231. ANNUAL REPORT ON MILITARY AND SECURITY 
DEVELOPMENTS INVOLVING THE PEOPLE’S 
REPUBLIC OF CHINA. 
(a) IN GENERAL.—Subsection (b) of section 1202 of 
the National Defense Authorization Act for Fiscal Year 
2000 (Public Law 106–65; 113 Stat. 781; 10 U.S.C. 113 
note), as most recently amended by section 1238 of the 
National Defense Authorization Act for Fiscal Year 2012 
(Public Law 112–81; 125 Stat. 1642), is further amend-
ed— 
(1) by redesignating paragraphs (10), (11), and 
(12) as paragraphs (12), (13), and (14), respec-
tively; and 
(2) by inserting after paragraph (9) the fol-
lowing: 
‘‘(10) The strategy, goals, and capabilities of 
Chinese space programs, including trends, global 
and regional activities, the involvement of military 
and civilian organizations, including state-owned en-
terprises, academic institutions, and commercial en-
tities, and efforts to develop, acquire, or gain access
745 
to advanced technologies that would enhance Chi-
nese military capabilities. 
‘‘(11) The strategy, goals, and capabilities of 
Chinese cyber activities, including trends, global and 
regional activities, the involvement of military and 
civilian organizations, including state-owned enter-
prises, academic institutions, and commercial enti-
ties. Relevant analyses and forecasts shall con-
sider— 
‘‘(A) Chinese cyber activities directed 
against the Department of Defense; 
‘‘(B) potential harms that may affect De-
partment of Defense communications, com-
puters, networks, systems, or other military as-
sets as a result of a cyber attack; and 
‘‘(C) any other developments regarding 
Chinese cyber activities that the Secretary of 
Defense determines are relevant to the national 
security of the United States.’’. 
(b) COMBATANT COMMANDER ASSESSMENT.—Such 
section is further amended— 
(1) by redesignating subsections (c) and (d) as 
subsections (d) and (e), respectively; and 
(2) by inserting after subsection (b) the fol-
lowing:
746 
‘‘(c) COMBATANT COMMANDER ASSESSMENT.—The 
report required under subsection (a) shall include an 
annex, in classified or unclassified form, that includes an 
identification and assessment of the Commander of the 
United States Pacific Command on the following: 
‘‘(1) Any gaps in intelligence that limit the abil-
ity of the Commander to address challenges posed 
by the People’s Republic of China. 
‘‘(2) Any gaps in the capabilities, capacity, and 
authorities of the Commander to address challenges 
posed by the People’s Republic of China to United 
States Armed Forces and United States interests in 
the region. 
‘‘(3) Any other matters the Commander con-
siders to be relevant.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) take effect on the date of the en-
actment of this Act and apply with respect to each report 
required to be submitted under section 1202 of the Na-
tional Defense Authorization Act for Fiscal Year 2000 on 
or after such date of enactment.
747 
SEC. 1232. REPORT ON MILITARY AND SECURITY DEVELOP-
MENTS INVOLVING THE DEMOCRATIC PEO-
PLE’S REPUBLIC OF KOREA. 
(a) ADDITIONAL REPORT.—Subsection (a) of section 
1236 of the National Defense Authorization Act for Fiscal 
Year 2012 (Public Law 112–81; 125 Stat. 1641) is 
amended by inserting after ‘‘November 1, 2012,’’ the fol-
lowing: ‘‘and November 1, 2013,’’. 
(b) COMBATANT COMMANDER ASSESSMENT.—Such 
section is further amended— 
(1) by redesignating subsection (c) as sub-
section (d); and 
(2) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) COMBATANT COMMANDER ASSESSMENT.—The 
report required under subsection (a) shall include an 
annex, in classified or unclassified form, that includes an 
identification and assessment of the Commander of the 
United States Pacific Command on the following: 
‘‘(1) Any gaps in intelligence that limit the abil-
ity of the Commander to counter threats emanating 
from North Korea. 
‘‘(2) Any gaps in the capabilities, capacity, and 
authorities of the Commander to counter North Ko-
rean threats to United States Armed Forces and 
United States interests in the region.
748 
‘‘(3) Any other matters the Commander con-
siders to be relevant.’’. 
SEC. 1233. REPORT ON HOST NATION SUPPORT FOR OVER-
SEAS UNITED STATES MILITARY INSTALLA-
TIONS AND UNITED STATES ARMED FORCES 
DEPLOYED IN COUNTRY. 
(a) REPORT REQUIRED.— 
(1) IN GENERAL.—Not later than March 1 of 
each year from 2013 through 2015, the Secretary of 
Defense, in consultation with the Secretary of State, 
shall submit to the appropriate congressional com-
mittees a report on the direct, indirect, and burden- 
sharing contributions made by host nations to sup-
port United States Armed Forces deployed in coun-
try. 
(2) ELEMENTS.—The report required by para-
graph (1) shall include at least the following: 
(A) The methodology and accounting pro-
cedures used to measure and track direct, indi-
rect, and burden-sharing contributions made by 
host nations. 
(B) The stationing costs, paid by the host 
nation, associated with United States Armed 
Forces stationed outside the territory of the 
United States in that nation.
749 
(C) A description of direct, indirect, and 
burden-sharing contributions by host nation, in-
cluding the following: 
(i) Contributions accepted for the fol-
lowing costs: 
(I) Compensation for local na-
tional employees of the Department of 
Defense. 
(II) 
Military 
construction 
projects of the Department of De-
fense, including design, procurement, 
construction management costs, rents 
on privately-owned land, facilities, 
labor, utilities and vicinity improve-
ments. 
(III) Other costs such as loan 
guarantees on public-private venture 
housing and payment-in-kind for fa-
cilities returned to the host nation. 
(ii) Contributions accepted for any 
other purpose. 
(b) FORM.—The report required by subsection (a) 
shall be submitted in unclassified form, but may include 
a classified annex if necessary. 
(c) DEFINITIONS.—In this section:
750 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means— 
(A) the congressional defense committees; 
and 
(B) the Committee on Foreign Relations of 
the Senate and the Committee on Foreign Af-
fairs of the House of Representatives. 
(2) HOST
NATION.—The term ‘‘host nation’’ 
means any country that hosts a permanent or tem-
porary United States military installation or a per-
manent or rotational deployment of United State 
Armed Forces located outside of the borders of the 
United States. 
(3) CONTRIBUTIONS.—The term ‘‘contribu-
tions’’ means cash and in-kind contributions made 
by a host nation that replace expenditures that 
would otherwise be made by the Secretary of De-
fense using funds appropriated or otherwise made 
available in defense appropriations Acts. 
SEC. 1234. NATO SPECIAL OPERATIONS HEADQUARTERS. 
(a) IN GENERAL.—Section 1244(a) of the National 
Defense Authorization Act for Fiscal Year 2010 (Public 
Law 111–84; 123 Stat. 2541), as amended by section 
1242 of the Ike Skelton National Defense Authorization
751 
Act for Fiscal Year 2011 (Public Law 111–383; 124 Stat. 
4405), is further amended by striking ‘‘fiscal year 2011’’ 
and inserting ‘‘fiscal year 2013’’. 
(b) LIMITATION.—Of the funds authorized to be ap-
propriated by this Act or otherwise made available for fis-
cal year 2013 for the NATO Special Operations Head-
quarters, not more than 50 percent may be obligated or 
expended until the date that is 30 days after the date on 
which the Secretary of Defense finalizes and formalizes 
United States Special Operations Command as the execu-
tive agent and lead component for the NATO Special Op-
erations Headquarters. 
SEC. 1235. REPORTS ON EXPORTS OF MISSILE DEFENSE 
TECHNOLOGY TO CERTAIN COUNTRIES. 
(a) REPORTS.—Not later than 180 days after the 
date of the enactment of this Act, and each year thereafter 
through 2015, the Secretary of Defense shall submit to 
the appropriate congressional committees a report on the 
following: 
(1) A description of the types of assistance, in-
cluding assistance relating to missile defense, pro-
vided by the Department of Defense to foreign coun-
tries that export space, counter-space, and ballistic 
missile equipment, material, and technologies that
752 
could be used in other countries’ space, counter- 
space, and ballistic missile programs. 
(2) A description of such exports to countries 
with space, counter-space, and ballistic missile pro-
grams, including a description of specific tech-
nologies that are exported to such countries. 
(b) APPROPRIATE
CONGRESSIONAL
COMMITTEES 
DEFINED.—In this section, the term ‘‘appropriate con-
gressional committees’’ means— 
(1) the congressional defense committees; and 
(2) the Committee of Foreign Relations of the 
Senate and the Committee on Foreign Affairs of the 
House of Representatives. 
SEC. 1236. LIMITATION ON FUNDS TO PROVIDE THE RUS-
SIAN FEDERATION WITH ACCESS TO MISSILE 
DEFENSE TECHNOLOGY. 
(a) LIMITATION ON FUNDS FOR CLASSIFIED TECH-
NOLOGY AND DATA.— 
(1) IN
GENERAL.—None of the funds made 
available for fiscal years 2012 or 2013 for the De-
partment of Defense may be used to provide the 
Russian Federation with access to information that 
is classified or was classified as of January 2, 2012, 
regarding—
753 
(A) missile defense technology of the 
United States, including hit-to-kill technology; 
or 
(B) data, including sensitive technical 
data, warning, detection, tracking, targeting, te-
lemetry, command and control, and battle man-
agement data, that support the missile defense 
capabilities of the United States. 
(2) APPLICABILITY.—The limitation in para-
graph (1) shall apply with respect to the use of 
funds on or after the date of the enactment of this 
Act. 
(b) LIMITATION
ON FUNDS
FOR OTHER TECH-
NOLOGY AND DATA.— 
(1) IN
GENERAL.—None of the funds made 
available for fiscal years 2012 or 2013 for the De-
partment of Defense may be used to provide the 
Russian Federation with access to missile defense 
technology or technical data not described in sub-
section (a) unless— 
(A) the President submits to the appro-
priate congressional committees— 
(i) a report that contains a description 
of—
754 
(I) the specific missile defense 
technology or technical data to be pro-
vided to the Russian Federation, the 
reasons for providing such technology 
or data, and how the technology or 
technical data is intended to be used; 
(II) the measures necessary to 
protect the technology or technical 
data; 
(III) the specific missile defense 
technology or technical data of the 
Russian Federation that the Russian 
Federation is providing the United 
States with access to; and 
(IV) the status and substance of 
discussions between the United States 
and the Russian Federation on missile 
defense matters; and 
(ii) written certification by the Presi-
dent that providing the Russian Federation 
with access to such missile defense tech-
nology or technical data— 
(I) includes an agreement on pro-
hibiting access to such technology or 
data by any other country or entity;
755 
(II) will not enable the develop-
ment of countermeasures to any mis-
sile defense system of the United 
States or otherwise undermine the ef-
fectiveness of any such missile defense 
system; and 
(III) will correspond to equitable 
access by the United States to missile 
defense technology or technical data 
of the Russian Federation; and 
(B) a period of 30 days has elapsed fol-
lowing the date on which the President submits 
to the appropriate congressional committees the 
report and written certification under subpara-
graph (A). 
(2) APPLICABILITY.—The limitation in para-
graph (1) shall apply with respect to the use of 
funds on or after the date of the enactment of this 
Act. 
(c) FORM.—The report described in clause (i) of sub-
section (b)(1)(A) and the certification described in clause 
(ii) of such subsection shall be submitted in unclassified 
form, but may contain a classified annex, if necessary.
756 
(d) APPROPRIATE
CONGRESSIONAL
COMMITTEES 
DEFINED.—In this section, the term ‘‘appropriate con-
gressional committees’’ means— 
(1) the Committee on Armed Services and the 
Committee on Foreign Relations of the Senate; and 
(2) the Committee on Armed Services and the 
Committee on Foreign Affairs of the House of Rep-
resentatives. 
SEC. 1237. INTERNATIONAL AGREEMENTS RELATING TO 
MISSILE DEFENSE. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that an agreement regarding missile defense co-
operation between the United States and the Russian Fed-
eration that is negotiated with the Russian Federation 
through 
the 
North 
Atlantic 
Treaty 
Organization 
(‘‘NATO’’) or a provision to amend the charter of the 
NATO–Russia Council, should not be considered legally 
or politically binding unless the agreement is— 
(1) specifically approved with the advice and 
consent of the Senate pursuant to article II, section 
2, clause 2 of the Constitution; or 
(2) specifically authorized by an Act of Con-
gress. 
(b) MISSILE DEFENSE AGREEMENTS.—
757 
(1) IN GENERAL.—Chapter 3 of title 10, United 
States Code, is amended by adding at the end the 
following new section: 
‘‘§ 130f. International agreements relating to missile 
defense 
‘‘(a) IN GENERAL.—In accordance with the under-
standing under subsection (b)(1)(B) of the Resolution of 
Advice and Consent to Ratification of the New START 
Treaty of the Senate, any agreement with a country or 
international organization or amendment to the New 
START Treaty (including an agreement made by the Bi-
lateral Consultative Commission established by the New 
START Treaty) concerning the limitation of the missile 
defense capabilities of the United States shall not be bind-
ing on the United States, and shall not enter into force 
with respect to the United States, unless after the date 
of the enactment of this section, such agreement or 
amendment is— 
‘‘(1) specifically approved with the advice and 
consent of the Senate pursuant to article II, section 
2, clause 2 of the Constitution; or 
‘‘(2) specifically authorized by an Act of Con-
gress. 
‘‘(b) ANNUAL NOTIFICATION.—Not later than Janu-
ary 31 of each year, beginning in 2013, the President shall
758 
submit to the congressional defense committees and the 
Committee on Foreign Relations of the Senate and the 
Committee on Foreign Affairs of the House of Representa-
tives a notification of— 
‘‘(1) whether the Russian Federation has recog-
nized during the previous year the sovereign right of 
the United States to pursue quantitative and quali-
tative improvements in missile defense capabilities; 
and 
‘‘(2) whether during any treaty negotiations or 
other Government-to-Government contacts between 
the United States and the Russian Federation (in-
cluding under the auspices of the Bilateral Consult-
ative Commission established by the New START 
Treaty) during the previous year a representative of 
the Russian Federation suggested that a treaty or 
other international agreement include, with respect 
to the United States— 
‘‘(A) restricting missile defense capabili-
ties, military capabilities in space, or conven-
tional prompt global strike capabilities; or 
‘‘(B) reducing the number of non-strategic 
nuclear weapons deployed in Europe. 
‘‘(c) NEW START TREATY DEFINED.—In this sec-
tion, the term ‘New START Treaty’ means the Treaty be-
759 
tween the United States of America and the Russian Fed-
eration on Measures for the Further Reduction and Limi-
tation of Strategic Offensive Arms, signed on April 8, 
2010, and entered into force on February 5, 2011.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such chapter is amended 
by inserting after the item relating to section 130e 
the following new item: 
‘‘130f. International agreements relating to missile defense.’’. 
(c) DEFENSE TECHNOLOGY COOPERATION AGREE-
MENTS.— 
(1) IN
GENERAL.—Subchapter II of chapter 
138 of title 10, United States Code, is amended by 
adding at the end the following new section: 
‘‘§ 2350n. Defense technology cooperation agreements 
between the United States and the Rus-
sian Federation 
‘‘(a) IN GENERAL.—None of the funds made avail-
able for fiscal year 2012 or any fiscal year thereafter for 
the Department of Defense may be used to implement a 
defense technology cooperation agreement entered into be-
tween the United States and the Russian Federation until 
a period of 60 days has elapsed following the date on 
which the President transmits such agreement to the con-
gressional defense committees.
760 
‘‘(b) DEFENSE TECHNOLOGY COOPERATION AGREE-
MENT DEFINED.—In this section, the term ‘defense tech-
nology cooperation agreement’ means a cooperative agree-
ment related to research and development entered into 
under section 2358 of this title or any other provision of 
this title.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such subchapter is amend-
ed by inserting after the item relating to section 
2350m the following new item: 
‘‘2350n. Defense technology cooperation agreement between the United States 
and the Russian Federation.’’. 
(d) LIMITATION ON MISSILE DEFENSE NEGOTIA-
TION.— 
(1) IN
GENERAL.—None of the funds made 
available for fiscal years 2012 or 2013 for the De-
partment of Defense may be used to implement an 
agreement regarding missile defense entered into 
with the Russian Federation until the date that is 
30 days after the date on which the President trans-
mits to the appropriate congressional committees the 
draft agreement discussed between the United 
States and the Russian Federation at Deauville, 
France, in May 2011. 
(2) APPLICABILITY.—The limitation in para-
graph (1) shall apply with respect to the use of
761 
funds on or after the date of the enactment of this 
Act. 
(3) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES DEFINED.—In this subsection, the term ‘‘ap-
propriate congressional committees’’ means— 
(A) the Committee on Armed Services and 
the Committee on Foreign Relations of the Sen-
ate; and 
(B) the Committee on Armed Services and 
the Committee on Foreign Affairs of the House 
of Representatives. 
SEC. 1238. LIMITATION ON ASSISTANCE TO PROVIDE TEAR 
GAS OR OTHER RIOT CONTROL ITEMS. 
None of the funds authorized to be appropriated by 
this Act may be used to provide tear gas or other riot 
control items to the government of a country undergoing 
a transition to democracy in the Middle East or North 
Africa unless the Secretary of Defense certifies to the 
Committee on Armed Services of the Senate and the Com-
mittee on Armed Services of the House of Representatives 
that the security forces of such government are not using 
excessive force to repress peaceful, lawful, and organized 
dissent.
762 
SEC. 1239. REQUIREMENT TO SUBMIT TO CONGRESS A 
PLAN FOR A FOREIGN INFRASTRUCTURE 
PROJECT USING FUNDS MADE AVAILABLE 
FOR OVERSEAS CONTINGENCY OPERATIONS. 
(a) PLAN REQUIRED.—Not later than 60 days prior 
to the commencement of a covered infrastructure project, 
the head of the Federal department or agency with pri-
mary responsibility for carrying out the project shall sub-
mit to Congress a plan to carry out and sustain the 
project. 
(b) MATTERS TO BE INCLUDED.—The plan shall in-
clude a description of the following: 
(1) The total amount of funds to be obligated 
and expended under the project, including the total 
amount of funds to be contributed from other 
sources. 
(2) How the project will be maintained after its 
completion, who will be responsible for maintaining 
the project, and who will contribute funds for main-
taining the project. 
(3) How the project will be protected after its 
completion. 
(c) COVERED INFRASTRUCTURE PROJECT.—In this 
section, the term ‘‘covered infrastructure project’’ or 
‘‘project’’ means a project to improve the infrastructure 
of a foreign country under which the United States con-
763 
tributes not less than $1,000,000 from funds made avail-
able for overseas contingency operations. 
(d) EFFECTIVE DATE.—This section takes effect on 
the date of the enactment of this Act and applies with 
respect covered infrastructure projects commenced on or 
after 60 days after such date of enactment. 
SEC. 1240. SALE OF F–16 AIRCRAFT TO TAIWAN. 
The President shall carry out the sale of no fewer 
than 66 F–16C/D multirole fighter aircraft to Taiwan. 
SEC. 1240A. LIMITATION ON FUNDS FOR INSTITUTIONS OR 
ORGANIZATIONS 
ESTABLISHED 
BY 
THE 
UNITED NATIONS CONVENTION ON THE LAW 
OF THE SEA. 
None of the funds authorized to be appropriated by 
this Act may be made available for any institution or orga-
nization established by the United Nations Convention on 
the Law of the Sea, including the International Seabed 
Authority, the International Tribunal for the Law of the 
Sea, and the Commission on the Limits of the Continental 
Shelf. 
SEC. 1240B. REMOVAL OF BRIGADE COMBAT TEAMS FROM 
EUROPE. 
(a) FINDING.—Congress finds that, because defense 
spending among European NATO countries fell 12% since 
2008, from $314 billion to $275 billion, so that currently
764 
only 4 out of the 28 NATO allies of the United States 
are spending the widely agreed-to standard of 2% of their 
GDP on defense, the United States must look to more 
wisely allocate scarce resources to provide for the national 
defense. 
(b) REMOVAL AUTHORIZED.—The President is au-
thorized and requested to end the permanent basing of 
units of the United States Armed Forces in European 
member nations of the North Atlantic Treaty Organiza-
tion and return the four Brigade Combat Teams currently 
stationed in Europe to the United States. 
(c) USE OF ROTATIONAL FORCES TO SATISFY SECU-
RITY NEEDS.—It is the policy of the United States that 
the deployment of units of the United States Armed 
Forces on a rotational basis at military installations in 
European member nations of the North Atlantic Treaty 
Organization pursuant to the Army Force Generation 
(ARFORGEN) process is a force-structure arrangement 
sufficient to permit the United States— 
(1) to satisfy the commitments undertaken by 
United States pursuant to Article 5 of the North At-
lantic Treaty, signed at Washington, District of Co-
lumbia, on April 4, 1949, and entered into force on 
August 24, 1949 (63 Stat. 2241; TIAS 1964);
765 
(2) to address the current security environment 
in Europe; and 
(3) to contribute to peace and stability in Eu-
rope. 
SEC. 1240C. LIMITATION ON FUNDS FOR UNITED STATES 
PARTICIPATION IN JOINT MILITARY EXER-
CISES WITH EGYPT. 
None of the funds authorized to be appropriated by 
this Act may be made available for United States partici-
pation in joint military exercises with Egypt if the Govern-
ment of Egypt terminates or withdraws from the 1979 
Israeli-Egypt peace treaty. 
Subtitle E—Authority to Remove 
Satellites and Related Compo-
nents and Technology From the 
United States Munitions List 
SEC. 1241. AUTHORITY TO REMOVE SATELLITES AND RE-
LATED 
COMPONENTS 
AND 
TECHNOLOGY 
FROM THE UNITED STATES MUNITIONS LIST. 
(a) AUTHORITY.—Subject to subsection (b), the 
President is authorized to remove commercial satellites 
and related components and technology from the United 
States Munitions List, consistent with the procedures in 
section 38(f) of the Arms Export Control Act (22 U.S.C. 
2778(f)).
766 
(b) DETERMINATION.—The President may exercise 
the authority provided in subsection (a) only if the Presi-
dent submits to the appropriate congressional committees 
a determination that the transfer of commercial satellites 
and related components and technology from the United 
States Munitions List does not pose an unacceptable risk 
to the national security of the United States. Such deter-
mination shall include a description of the risk-mitigating 
controls, procedures, and safeguards the President will put 
in place to reduce such risk to an absolute minimum. 
(c) PROHIBITION.—No license or other authorization 
for export shall be granted for the transfer, retransfer, or 
reexport of any commercial satellite or related component 
or technology contained on the Commerce Control List to 
any person or entity of the following: 
(1) The People’s Republic of China. 
(2) Cuba. 
(3) Iran. 
(4) North Korea. 
(5) Sudan. 
(6) Syria. 
(7) Any other country with respect to which the 
United States would deny the application for licenses 
and other approvals for exports and imports of de-
767 
fense articles under section 126.1 of the Inter-
national Traffic in Arms Regulations. 
(d) REPORT.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this Act, and annually 
thereafter, the Director of National Intelligence shall 
submit to the appropriate congressional committees 
on efforts of state sponsors of terrorism, other for-
eign countries, or entities to illicitly acquire commer-
cial satellites and related components and tech-
nology. 
(2) FORM.—Such report shall be submitted in 
unclassified form, but may contain a classified 
annex. 
(e) APPROPRIATE CONGRESSIONAL COMMITTEE DE-
FINED.—In this section, the term ‘‘appropriate congres-
sional committees’’ means— 
(1) the Committee on Foreign Relations, the 
Committee on Armed Services, and the Select Com-
mittee on Intelligence of the Senate; and 
(2) the Committee on Foreign Affairs, the 
Committee on Armed Services, and the Permanent 
Select Committee on Intelligence of the House of 
Representatives.
768 
SEC. 1242. REPORT ON LICENSES AND OTHER AUTHORIZA-
TIONS TO EXPORT COMMERCIAL SATELLITES 
AND RELATED COMPONENTS AND TECH-
NOLOGY CONTAINED ON THE COMMERCE 
CONTROL LIST. 
(a) IN GENERAL.—Not later than 60 days after the 
end of each calendar quarter, the President shall transmit 
to the Committee on Banking, Finance, and Urban Affairs 
of the Senate and the Committee on Foreign Affairs of 
the House of Representatives a report containing a listing 
of all licenses and other authorizations to export commer-
cial satellites and related components and technology con-
tained on the Commerce Control List. 
(b) FORM.—Such report shall be submitted in unclas-
sified form, but may contain a classified annex. 
SEC. 1243. REVIEW OF UNITED STATES MUNITIONS LIST. 
Section 38(f)(1) of the Arms Export Control Act (22 
U.S.C. 2778(f)(1)) is amended by striking the last sen-
tence and inserting the following: ‘‘Such notice shall in-
clude, to the extent practicable, an enumeration of the 
item or items to be removed and describe the nature of 
any controls to be imposed on the item or items under 
any other provision of law.’’.
769 
SEC. 1244. REPORT ON COUNTRY EXEMPTIONS FOR LI-
CENSING OF EXPORTS OF MUNITIONS AND 
RELATED TECHNICAL DATA. 
(a) IN GENERAL.—Not later than 120 days after the 
date of the enactment of this Act, the Attorney General 
and Secretary of Homeland Security shall submit to the 
appropriate congressional committees a report that con-
tains an assessment of the extent to which the terms and 
conditions of an exemption for foreign countries from the 
licensing requirements of the Commerce Munitions List 
(or analogous controls for commercial satellites and re-
lated components and technology) contain strong safe-
guards. 
(b) MATTERS TO BE INCLUDED.—The report shall 
include a compilation of sufficient documentation relating 
to the export of munitions, commercial spacecraft, and re-
lated technical data to facilitate law enforcement efforts 
to effectively detect, investigate, deter, and enforce crimi-
nal violations of any provision of the Export Administra-
tion Regulations, including efforts on the part of state 
sponsors of terrorism, other foreign countries, or entities 
to illicitly acquire such controlled United States tech-
nology. 
(c) APPROPRIATE CONGRESSIONAL COMMITTEES DE-
FINED.—In this section, the term ‘‘appropriate congres-
sional committees’’ means—
770 
(1) the Committee on Armed Services and the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate; and 
(2) the Committee on Armed Services and the 
Committee on Foreign Affairs of the House of Rep-
resentatives. 
SEC. 1245. END-USE MONITORING OF MUNITIONS AND RE-
LATED TECHNICAL DATA. 
(a) ESTABLISHMENT OF MONITORING PROGRAM.— 
In order to ensure accountability with respect to the ex-
port of munitions and related technical data on the Com-
merce Munitions List, the President shall establish a pro-
gram to provide for the end-use monitoring of such muni-
tions and related technical data. 
(b) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, and annually thereafter, the 
President shall submit to Congress a report describing the 
actions taken to implement this section, including a de-
tailed accounting of the costs and number of personnel 
associated with the program established under subsection 
(a).
771 
SEC. 1246. INTERAGENCY PROCESS FOR MODIFICATION OF 
CATEGORY XV OF THE UNITED STATES MUNI-
TIONS LIST. 
(a) INTERAGENCY REVIEW.—Subject to the proce-
dures in section 38(f) of the Arms Export Control Act (22 
U.S.C. 2778(f)), the President shall ensure that, through 
interagency procedures or regulations, the Secretary of 
State, the Secretary of Defense, the Secretary of Com-
merce, and as appropriate the Director of National Intel-
ligence concur on all subsequent modifications to Category 
XV of the United States Munitions List (relating to space-
craft systems and associated equipment). 
(b) ANNUAL REPORT.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this Act, and annually 
thereafter, the President shall submit to the appro-
priate congressional committees a report on the re-
sults of the interagency reviews required by sub-
section (a). 
(2) MATTERS TO BE INCLUDED.—The report 
required under paragraph (1) shall include the fol-
lowing matters: 
(A) A review of the space and space-re-
lated technologies currently on the United 
States Munitions List, to include satellite sys-
tems, dedicated subsystems, and components.
772 
(B) An assessment of the national security 
risks of removing certain space and space-re-
lated technologies identified under subpara-
graph (A) from the United States Munitions 
List. 
(C) An examination of the degree to which 
other nations’ export control policies control or 
limit the export of space and space-related tech-
nologies for national security reasons. 
(D) Recommendations for— 
(i) the space and space-related tech-
nologies that should remain on, or may be 
candidates for removal from, the United 
States Munitions List based on the na-
tional security review required under sub-
section (a); 
(ii) the safeguards and verifications 
necessary to— 
(I) prevent the proliferation and 
diversion of such space and space-re-
lated technologies; 
(II) confirm appropriate end use 
and end users; and 
(III) minimize the risk that such 
space and space-related technologies
773 
could be use in foreign missile, space, 
or other applications that could pose a 
threat to the security of the United 
States; and 
(iii) improvements to the space export 
control policy and processes of the United 
States that do not adversely affect United 
States national security. 
(E) A description of and recommendations 
regarding how the United States industrial base 
and United States national security could be 
enhanced and strengthened through reforms to 
and amendments of export control laws and 
regulations. 
(3) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES DEFINED.—In this subsection, the term ‘‘ap-
propriate congressional committees’’ means— 
(A) the Committee on Armed Services, the 
Committee on Foreign Relations, and the Select 
Committee on Intelligence of the Senate; and 
(B) the Committee on Armed Services, the 
Committee on Foreign Affairs, and the Perma-
nent Select Committee on Intelligence of the 
House of Representatives.
774 
SEC. 1247. DEFINITIONS. 
In this subtitle: 
(1) COMMERCE
MUNITIONS
LIST.—The term 
‘‘Commerce Munitions List’’ means items trans-
ferred from the United States Munitions List to the 
Commerce Control List and designated as ‘‘600 se-
ries’’ items on the Commerce Control List under the 
Export Administration Regulations, as proposed by 
the Bureau of Industry and Security of the Depart-
ment of Commerce on July 15, 2011 (76 Fed. Reg. 
41958), or any successor regulations. 
(2) COMMERCIAL
SATELLITES
AND
RELATED 
COMPONENTS AND TECHNOLOGY.—The term ‘‘com-
mercial satellites and related components and tech-
nology’’ means— 
(A) communications satellites that do not 
contain classified components, including remote 
sensing satellites with performance parameters 
below thresholds identified on the United States 
Munitions List; and 
(B) systems, subsystems, parts, and com-
ponents associated with such satellites and with 
performance parameters below thresholds speci-
fied for items that would remain on the United 
States Munitions List.
775 
(3) EXPORT ADMINISTRATION REGULATIONS.— 
The term ‘‘Export Administration Regulations’’ 
means the Export Administration Regulations as 
maintained and amended under the authority of the 
International Emergency Economic Powers Act (50 
U.S.C. 1701 et seq.), or any successor regulations. 
(4) STATE SPONSOR OF TERRORISM.—The term 
‘‘state sponsor of terrorism’’ means any country the 
government of which the Secretary of State has de-
termined has repeatedly provided support for acts of 
international terrorism pursuant to section 6(j) of 
the Export Administration Act of 1979, section 
620A of the Foreign Assistance Act of 1961, section 
40 of the Arms Export Control Act, or any other 
provision of law. 
(5) UNITED
STATES
MUNITIONS
LIST.—The 
term ‘‘United States Munitions List’’ means the list 
referred to in section 38(a)(1) of the Arms Export 
Control Act (22 U.S.C. 2778(a)(1)). 
TITLE XIII—COOPERATIVE 
THREAT REDUCTION 
SEC. 1301. SPECIFICATION OF COOPERATIVE THREAT RE-
DUCTION PROGRAMS AND FUNDS. 
(a) SPECIFICATION OF COOPERATIVE THREAT RE-
DUCTION PROGRAMS.—For purposes of section 301 and
776 
other provisions of this Act, Cooperative Threat Reduction 
programs are the programs specified in section 1501 of 
the National Defense Authorization Act for Fiscal Year 
1997 (50 U.S.C. 2362 note). 
(b) FISCAL YEAR 2013 COOPERATIVE THREAT RE-
DUCTION FUNDS DEFINED.—As used in this title, the 
term ‘‘fiscal year 2013 Cooperative Threat Reduction 
funds’’ means the funds appropriated pursuant to the au-
thorization of appropriations in section 301 and made 
available by the funding table in section 4301 for Coopera-
tive Threat Reduction programs. 
(c) AVAILABILITY OF FUNDS.—Funds appropriated 
pursuant to the authorization of appropriations in section 
301 and made available by the funding table in section 
4301 for Cooperative Threat Reduction programs shall be 
available for obligation for fiscal years 2013, 2014, and 
2015. 
SEC. 1302. FUNDING ALLOCATIONS. 
(a) FUNDING
FOR SPECIFIC PURPOSES.—Of the 
$519,111,000 authorized to be appropriated to the De-
partment of Defense for fiscal year 2013 in section 301 
and made available by the funding table in section 4301 
for Cooperative Threat Reduction programs, the following 
amounts may be obligated for the purposes specified:
777 
(1) For strategic offensive arms elimination, 
$68,271,000. 
(2) 
For 
chemical 
weapons 
destruction, 
$14,630,000. 
(3) For global nuclear security, $99,789,000. 
(4) For cooperative biological engagement, 
$276,399,000. 
(5) For proliferation prevention, $32,402,000. 
(6) 
For 
threat 
reduction 
engagement, 
$2,375,000. 
(7) For activities designated as Other Assess-
ments/Administrative Costs, $25,245,000. 
(b) REPORT ON OBLIGATION OR EXPENDITURE OF 
FUNDS FOR OTHER PURPOSES.—No fiscal year 2013 Co-
operative Threat Reduction funds may be obligated or ex-
pended for a purpose other than a purpose listed in para-
graphs (1) through (7) of subsection (a) until 15 days 
after the date that the Secretary of Defense submits to 
Congress a report on the purpose for which the funds will 
be obligated or expended and the amount of funds to be 
obligated or expended. Nothing in the preceding sentence 
shall be construed as authorizing the obligation or expend-
iture of fiscal year 2013 Cooperative Threat Reduction 
funds for a purpose for which the obligation or expendi-
778 
ture of such funds is specifically prohibited under this title 
or any other provision of law. 
(c) LIMITED
AUTHORITY
TO
VARY
INDIVIDUAL 
AMOUNTS.— 
(1) IN GENERAL.—Subject to paragraph (2), in 
any case in which the Secretary of Defense deter-
mines that it is necessary to do so in the national 
interest, the Secretary may obligate amounts appro-
priated for fiscal year 2013 for a purpose listed in 
paragraphs (1) through (7) of subsection (a) in ex-
cess of the specific amount authorized for that pur-
pose. 
(2) NOTICE-AND-WAIT REQUIRED.—An obliga-
tion of funds for a purpose stated in paragraphs (1) 
through (7) of subsection (a) in excess of the specific 
amount authorized for such purpose may be made 
using the authority provided in paragraph (1) only 
after— 
(A) the Secretary submits to Congress no-
tification of the intent to do so together with a 
complete discussion of the justification for 
doing so; and 
(B) 15 days have elapsed following the 
date of the notification.
779 
SEC. 1303. LIMITATION ON AVAILABILITY OF FUNDS FOR 
COOPERATIVE THREAT REDUCTION ACTIVI-
TIES WITH RUSSIAN FEDERATION. 
(a) LIMITATION.—None of the funds authorized to 
be appropriated by this Act or otherwise made available 
for fiscal year 2013 for Cooperative Threat Reduction may 
be obligated or expended for cooperative threat reduction 
activities with the Russian Federation until the date that 
is 30 days after the date on which the Secretary of De-
fense certifies, in coordination with the Secretary of State, 
to the appropriate congressional committees that— 
(1) Russia is no longer— 
(A) providing direct or indirect support to 
the government of Syria’s suppression of the 
Syrian people; and 
(B) transferring to Iran, North Korea, or 
Syria equipment and technology that have the 
potential to make a material contribution to the 
development of weapons of mass destruction or 
cruise or ballistic missile systems controlled 
under multilateral control lists; or 
(2) funds planned to be obligated or expended 
for cooperative threat reduction activities with the 
Russian Federation are strictly for project closeout 
activities and will not be used for new activities or 
activities that will extend beyond fiscal year 2013.
780 
(b) WAIVER.—The Secretary of Defense may waive 
the limitation in subsection (a) if— 
(1) the Secretary determines that such waiver is 
in the national security interests of the United 
States; 
(2) the Secretary briefs, in an unclassified 
form, the appropriate congressional committees on 
the justifications of such waiver; and 
(3) a period of 90 days has elapsed following 
the date on which such briefing is held. 
(c) APPROPRIATE CONGRESSIONAL COMMITTEES DE-
FINED.—In this section, the term ‘‘appropriate congres-
sional committees’’ means— 
(1) the Committee on Armed Services and the 
Committee on Foreign Affairs of the House of Rep-
resentatives; and 
(2) the Committee on Armed Services and the 
Committee on Foreign Relations of the Senate. 
TITLE XIV—OTHER 
AUTHORIZATIONS 
Subtitle A—Military Programs 
SEC. 1401. WORKING CAPITAL FUNDS. 
Funds are hereby authorized to be appropriated for 
fiscal year 2013 for the use of the Armed Forces and other 
activities and agencies of the Department of Defense for
781 
providing capital for working capital and revolving funds, 
as specified in the funding table in section 4501. 
SEC. 1402. NATIONAL DEFENSE SEALIFT FUND. 
Funds are hereby authorized to be appropriated for 
the fiscal year 2013 for the National Defense Sealift 
Fund, as specified in the funding table in section 4501. 
SEC. 1403. CHEMICAL AGENTS AND MUNITIONS DESTRUC-
TION, DEFENSE. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Funds 
are hereby authorized to be appropriated for the Depart-
ment of Defense for fiscal year 2013 for expenses, not oth-
erwise provided for, for Chemical Agents and Munitions 
Destruction, Defense, as specified in the funding table in 
section 4501. 
(b) USE.—Amounts authorized to be appropriated 
under subsection (a) are authorized for— 
(1) the destruction of lethal chemical agents 
and munitions in accordance with section 1412 of 
the Department of Defense Authorization Act, 1986 
(50 U.S.C. 1521); and 
(2) the destruction of chemical warfare materiel 
of the United States that is not covered by section 
1412 of such Act.
782 
SEC. 1404. DRUG INTERDICTION AND COUNTER-DRUG AC-
TIVITIES, DEFENSE-WIDE. 
Funds are hereby authorized to be appropriated for 
the Department of Defense for fiscal year 2013 for ex-
penses, not otherwise provided for, for Drug Interdiction 
and Counter-Drug Activities, Defense-wide, as specified in 
the funding table in section 4501. 
SEC. 1405. DEFENSE INSPECTOR GENERAL. 
Funds are hereby authorized to be appropriated for 
the Department of Defense for fiscal year 2013 for ex-
penses, not otherwise provided for, for the Office of the 
Inspector General of the Department of Defense, as speci-
fied in the funding table in section 4501. 
SEC. 1406. DEFENSE HEALTH PROGRAM. 
Funds are hereby authorized to be appropriated for 
fiscal year 2013 for the Defense Health Program, as spec-
ified in the funding table in section 4501, for use of the 
Armed Forces and other activities and agencies of the De-
partment of Defense in providing for the health of eligible 
beneficiaries. 
SEC. 1407. CEMETERIAL EXPENSES. 
Funds are hereby authorized to be appropriated for 
the Department of the Army for fiscal year 2013 for 
cemeterial expenses, not otherwise provided for, as speci-
fied in the funding table in section 4501.
783 
Subtitle B—National Defense 
Stockpile 
SEC. 1411. AUTHORIZED USES OF NATIONAL DEFENSE 
STOCKPILE FUNDS. 
(a) OBLIGATION OF STOCKPILE FUNDS.—During fis-
cal year 2013, the National Defense Stockpile Manager 
may obligate up to $44,899,227 of the funds in the Na-
tional Defense Stockpile Transaction Fund established 
under subsection (a) of section 9 of the Strategic and Crit-
ical Materials Stock Piling Act (50 U.S.C. 98h) for the 
authorized uses of such funds under subsection (b)(2) of 
such section, including the disposal of hazardous materials 
that are environmentally sensitive. 
(b) ADDITIONAL OBLIGATIONS.—The National De-
fense Stockpile Manager may obligate amounts in excess 
of the amount specified in subsection (a) if the National 
Defense Stockpile Manager notifies Congress that extraor-
dinary or emergency conditions necessitate the additional 
obligations. The National Defense Stockpile Manager may 
make the additional obligations described in the notifica-
tion after the end of the 45-day period beginning on the 
date on which Congress receives the notification. 
(c) LIMITATIONS.—The authorities provided by this 
section shall be subject to such limitations as may be pro-
vided in appropriations Acts.
784 
SEC. 1412. ADDITIONAL SECURITY OF STRATEGIC MATE-
RIALS SUPPLY CHAINS. 
Section 2(b) of the Strategic and Critical Materials 
Stock Piling Act (50 U.S.C. 98a) is amended by inserting 
‘‘or a single point of failure’’ after ‘‘foreign sources’’. 
Subtitle C—Other Matters 
SEC. 1421. REDUCTION OF UNOBLIGATED BALANCES WITH-
IN THE PENTAGON RESERVATION MAINTE-
NANCE REVOLVING FUND. 
Not later than 60 days after the date of the enact-
ment of this Act, the Secretary of Defense shall transfer 
$26,000,000 from the unobligated balances of the Pen-
tagon Reservation Maintenance Revolving Fund estab-
lished under section 2674(e) of title 10, United States 
Code, to the Miscellaneous Receipts Fund of the United 
States Treasury. 
SEC. 1422. AUTHORITY FOR TRANSFER OF FUNDS TO JOINT 
DEPARTMENT OF DEFENSE-DEPARTMENT OF 
VETERANS AFFAIRS MEDICAL FACILITY DEM-
ONSTRATION FUND FOR CAPTAIN JAMES A. 
LOVELL HEALTH CARE CENTER, ILLINOIS. 
(a) AUTHORITY FOR TRANSFER OF FUNDS.—Of the 
funds authorized to be appropriated for section 1406 and 
available for the Defense Health Program for operation 
and maintenance, $139,204,000 may be transferred by the 
Secretary of Defense to the Joint Department of Defense–
785 
Department of Veterans Affairs Medical Facility Dem-
onstration Fund established by subsection (a)(1) of sec-
tion 1704 of the National Defense Authorization Act for 
Fiscal Year 2010 (Public Law 111–84; 123 Stat. 2571). 
For purposes of subsection (a)(2) of such section 1704, 
any funds so transferred shall be treated as amounts au-
thorized and appropriated specifically for the purpose of 
such a transfer. 
(b) USE OF TRANSFERRED FUNDS.—For the pur-
poses of subsection (b) of such section 1704, facility oper-
ations for which funds transferred under subsection (a) 
may be used are operations of the Captain James A. 
Lovell Federal Health Care Center, consisting of the 
North Chicago Veterans Affairs Medical Center, the Navy 
Ambulatory Care Center, and supporting facilities des-
ignated as a combined Federal medical facility under an 
operational agreement covered by section 706 of the Dun-
can Hunter National Defense Authorization Act for Fiscal 
Year 2009 (Public Law 110–417; 122 Stat. 4500). 
SEC. 1423. AUTHORIZATION OF APPROPRIATIONS FOR 
ARMED FORCES RETIREMENT HOME. 
There is hereby authorized to be appropriated for fis-
cal year 2013 from the Armed Forces Retirement Home 
Trust Fund the sum of $67,590,000 for the operation of 
the Armed Forces Retirement Home.
786 
TITLE XV—AUTHORIZATION OF 
ADDITIONAL 
APPROPRIA-
TIONS FOR OVERSEAS CON-
TINGENCY OPERATIONS 
Subtitle A—Authorization of 
Additional Appropriations 
SEC. 1501. PURPOSE. 
The purpose of this subtitle is to authorize appropria-
tions for the Department of Defense for fiscal year 2013 
to provide additional funds for overseas contingency oper-
ations being carried out by the Armed Forces. 
SEC. 1502. PROCUREMENT. 
Funds are hereby authorized to be appropriated for 
fiscal year 2013 for procurement accounts for the Army, 
the Navy and the Marine Corps, the Air Force, and De-
fense-wide activities, as specified in the funding table in 
section 4102. 
SEC. 1503. RESEARCH, DEVELOPMENT, TEST, AND EVALUA-
TION. 
Funds are hereby authorized to be appropriated for 
fiscal year 2013 for the use of the Department of Defense 
for research, development, test, and evaluation, as speci-
fied in the funding table in section 4202.
787 
SEC. 1504. OPERATION AND MAINTENANCE. 
Funds are hereby authorized to be appropriated for 
fiscal year 2013 for the use of the Armed Forces and other 
activities and agencies of the Department of Defense for 
expenses, not otherwise provided for, for operation and 
maintenance, as specified in the funding table in section 
4302. 
SEC. 1505. MILITARY PERSONNEL. 
Funds are hereby authorized to be appropriated for 
fiscal year 2013 for the use of the Armed Forces and other 
activities and agencies of the Department of Defense for 
expenses, not otherwise provided for, for military per-
sonnel, as specified in the funding table in section 4402. 
SEC. 1506. WORKING CAPITAL FUNDS. 
Funds are hereby authorized to be appropriated for 
fiscal year 2013 for the use of the Armed Forces and other 
activities and agencies of the Department of Defense for 
providing capital for working capital and revolving funds, 
as specified in the funding table in section 4502. 
SEC. 1507. DEFENSE HEALTH PROGRAM. 
Funds are hereby authorized to be appropriated for 
the Department of Defense for fiscal year 2013 for ex-
penses, not otherwise provided for, for the Defense Health 
Program, as specified in the funding table in section 4502.
788 
SEC. 1508. DRUG INTERDICTION AND COUNTER-DRUG AC-
TIVITIES, DEFENSE-WIDE. 
Funds are hereby authorized to be appropriated for 
the Department of Defense for fiscal year 2013 for ex-
penses, not otherwise provided for, for Drug Interdiction 
and Counter-Drug Activities, Defense-wide, as specified in 
the funding table in section 4502. 
SEC. 1509. DEFENSE INSPECTOR GENERAL. 
Funds are hereby authorized to be appropriated for 
the Department of Defense for fiscal year 2013 for ex-
penses, not otherwise provided for, for the Office of the 
Inspector General of the Department of Defense, as speci-
fied in the funding table in section 4502. 
Subtitle B—Financial Matters 
SEC. 1521. TREATMENT AS ADDITIONAL AUTHORIZATIONS. 
The amounts authorized to be appropriated by this 
title are in addition to amounts otherwise authorized to 
be appropriated by this Act. 
SEC. 1522. SPECIAL 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 title for fiscal year 2013 
between any such authorizations for that fiscal year
789 
(or any subdivisions thereof). Amounts of authoriza-
tions so transferred shall be merged with and be 
available for the same purposes as the authorization 
to which transferred. 
(2) LIMITATION.—The total amount of author-
izations that the Secretary may transfer under the 
authority of this subsection may not exceed 
$3,000,000,000. 
(b) TERMS AND CONDITIONS.—Transfers under this 
section shall be subject to the same terms and conditions 
as transfers under section 1001. 
(c) ADDITIONAL AUTHORITY.—The transfer author-
ity provided by this section is in addition to the transfer 
authority provided under section 1001. 
SEC. 1523. LIMITATION ON USE OF FUNDS IN OVERSEAS 
CONTINGENCY 
OPERATIONS 
TRANSFER 
FUND. 
Amounts appropriated to the Overseas Contingency 
Operations Transfer Fund pursuant to the authorizations 
of appropriations contained in this title and available for 
use or transfer to cover expenses directly relating to over-
seas contingency operations by the United States Armed 
Forces may be used only for an item or activity specified 
in the overseas contingency operations portion of the 
budget submitted to Congress by the President under sec-
790 
tion 1105 of title 31, United States Code, for fiscal year 
2013. 
Subtitle C—Limitations and Other 
Matters 
SEC. 1531. JOINT IMPROVISED EXPLOSIVE DEVICE DEFEAT 
FUND. 
(a) USE AND TRANSFER OF FUNDS.—Subsections 
(b) and (c) of section 1514 of the John Warner National 
Defense Authorization Act for Fiscal Year 2007 (Public 
Law 109–364; 120 Stat. 2439), as in effect before the 
amendments made by section 1503 of the Duncan Hunter 
National Defense Authorization Act for Fiscal Year 2009 
(Public Law 110–417; 122 Stat. 4649), shall apply to the 
funds made available to the Department of Defense for 
the Joint Improvised Explosive Device Defeat Fund for 
fiscal year 2013. In providing prior notice to the congres-
sional defense committees of the obligation of funds from 
the Joint Improvised Explosive Device Defeat Fund for 
such fiscal year, as required by paragraph (4) of such sub-
section (c), the Secretary of Defense shall include the mar-
ket research or associated analysis of alternatives con-
ducted in the process of taking action to initiate any 
project for which the total obligation of funds from the 
Fund will exceed $10,000,000.
791 
(b) MONTHLY OBLIGATIONS AND EXPENDITURE RE-
PORTS.—Not later than 15 days after the end of each 
month of fiscal year 2013, the Secretary of Defense shall 
provide to the congressional defense committees a report 
on the Joint Improvised Explosive Device Defeat Fund ex-
plaining monthly commitments, obligations, and expendi-
tures by line of action. 
(c) ADDITIONAL AUTHORIZED USE OF FUNDS IN 
JIEDDF.—Funds in the Joint Improvised Explosive De-
vice Defeat Fund shall be available, with the concurrence 
of the Secretary of State, for the purpose of monitoring, 
disrupting, and interdicting the movement of explosive de-
vice precursors from a country that borders Afghanistan 
to a location within Afghanistan. For a country in which 
the actions and activities described in the preceding sen-
tence are carried out, such funds may, with the concur-
rence of the Secretary of State, also be used to train and 
equip the security forces of that country that support mis-
sions to monitor, disrupt, and interdict the movement of 
explosive device precursors into Afghanistan.
792 
SEC. 1532. ONE-YEAR EXTENSION OF PROJECT AUTHORITY 
AND 
RELATED 
REQUIREMENTS 
OF 
TASK 
FORCE FOR BUSINESS AND STABILITY OPER-
ATIONS IN AFGHANISTAN. 
(a) EXTENSION.—Subsection (a) of section 1535 of 
the Ike Skelton National Defense Authorization Act for 
Fiscal Year 2011 (Public Law 111–383; 124 Stat. 4426), 
as amended by section 1534 of the National Defense Au-
thorization Act for Fiscal Year 2012 (Public Law 112– 
81; 125 Stat. 1658), is further amended— 
(1) in paragraph (6), by striking ‘‘October 31, 
2011, and October 31, 2012’’ and inserting ‘‘Octo-
ber 31, 2011, October 31, 2012, and October 31, 
2013’’; and 
(2) in paragraph (7), by striking ‘‘September 
30, 2012’’ and inserting ‘‘September 30, 2013’’. 
(b) SCOPE OF PROJECTS.—Paragraph (3) of such 
subsection, as so amended, is further amended— 
(1) by striking ‘‘private investment, mining sec-
tor development, industrial development, and other 
projects’’ and inserting ‘‘mining and natural re-
source industry development’’; and 
(2) by striking ‘‘focus on improving the com-
mercial viability of’’ and inserting ‘‘complement’’. 
(c) FUNDING.—Paragraph (4) of such subsection, as 
so amended, is further amended—
793 
(1) by striking ‘‘The Secretary’’ and inserting 
the following: 
‘‘(A) IN GENERAL.—The Secretary’’. 
(2) by striking ‘‘The amount’’ and all that fol-
lows through ‘‘appropriate congressional commit-
tees.’’ and inserting the following: 
‘‘(B) LIMITATION.—The amount of funds 
used under authority of subparagraph (A)— 
‘‘(i) may not exceed $150,000,000 for 
fiscal year 2012, except that not more than 
50 percent of such amount may be obli-
gated until the plan required by subsection 
(b) is submitted to the appropriate con-
gressional committees; and 
‘‘(ii) may not exceed $50,000,000 for 
fiscal year 2013, except that no such funds 
may be obligated until the Secretary noti-
fies the appropriate congressional commit-
tees that the activities of the Task Force 
for Business and Stability Operations in 
Afghanistan will be transitioned to the De-
partment of State by September 30, 
2013.’’; and 
(3) by striking ‘‘The funds’’ and inserting the 
following:
794 
‘‘(C) AVAILABILITY.—The funds’’. 
SEC. 1533. LIMITATIONS ON AVAILABILITY OF FUNDS IN AF-
GHANISTAN SECURITY FORCES FUND. 
(a) CONTINUATION OF EXISTING LIMITATIONS ON 
AVAILABILITY
OF FUNDS
IN AFGHANISTAN SECURITY 
FORCES FUND.—Funds available to the Department of 
Defense for the Afghanistan Security Forces Fund for fis-
cal year 2013 shall be subject to the conditions contained 
in subsections (b) through (g) of section 1513 of the Na-
tional Defense Authorization Act for Fiscal Year 2008 
(Public Law 110–181; 122 Stat. 428), as amended by sec-
tion 1531(b) of the Ike Skelton National Defense Author-
ization Act for Fiscal Year 2011 (Public Law 111–383; 
124 Stat. 4424). 
(b) AFGHAN PUBLIC PROTECTION FORCE.— 
(1) LIMITATION.—None of the funds available 
to the Department of Defense for fiscal year 2013 
for the Afghanistan Security Forces Fund may be 
obligated or expended for the Afghan Public Protec-
tion Force (in this subsection referred to as the 
‘‘APPF’’) until the Secretary of Defense certifies in 
writing to the congressional defense committees the 
following: 
(A) Each subcontract, task order, or deliv-
ery order entered into with the APPF under a
795 
contract of the Department of Defense, or any 
agreement between the United States and Af-
ghanistan for services of the APPF for the De-
partment of Defense, will include— 
(i) standard format, content, and li-
ability clauses to ensure consistent levels of 
security and dispute resolution mecha-
nisms; 
(ii) a requirement for members of the 
APPF to adhere to the APPF Code of 
Conduct, including principles of conduct 
for such personnel, minimum vetting re-
quirements, and management and over-
sight commitments; 
(iii) authority for the prime contractor 
or, in the case of an agreement, the United 
States, to independently conduct biometric 
screening; 
(iv) authority for the prime contractor 
or, in the case of an agreement, the United 
States— 
(I) to direct the APPF, at its 
own expense, to remove or replace any 
personnel performing on a subcontract 
or such agreement who fail to meet
796 
the APPF Code of Conduct or terms 
of such subcontract or agreement; and 
(II) to terminate the subcontract 
or such agreement, if the failure to 
comply is a gross violation or is re-
peated; and 
(v) authority for the Commander, 
International Security Assistance Force (or 
his designee)— 
(I) to provide an arming author-
ization for APPF personnel author-
ized to perform activities at a military 
installation or facility in Afghanistan 
at which members of the Armed 
Forces deployed to Afghanistan are 
garrisoned or housed; 
(II) to account for and keep ap-
propriate records of APPF personnel 
authorized to perform activities at a 
military installation or facility in Af-
ghanistan at which members of the 
Armed Forces deployed to Afghani-
stan are garrisoned or housed, includ-
ing on a database referred to as the
797 
Synchronized 
Predeployment 
and 
Operational Tracker; and 
(III) to consult with the Minister 
of Interior of Afghanistan regarding 
rules on the use of force for APPF 
personnel. 
(B) The Minister of Interior of Afghani-
stan is committed to ensuring that sufficient 
numbers of APPF personnel are trained to 
match demand and attrition. 
(C) Sufficient clarity exists with regard to 
command and control of APPF personnel and 
the role of risk management consultants. 
(D) The program established pursuant to 
section 1225 of the National Defense Author-
ization Act for Fiscal Year 2010 (Public Law 
111–84; 22 U.S.C. 2785 note) is sufficient to— 
(i) account for the transfer of any 
contractor-acquired, United States Govern-
ment-owned defense articles to the APPF; 
and 
(ii) conduct end-use monitoring, in-
cluding an inventory of the existence and 
completeness of any such defense articles;
798 
(E) Mechanisms are in place to ensure 
that there is no additional cost to the United 
States for— 
(i) a weapon used in the performance 
of APPF services under a subcontract of a 
contract of the Department of Defense, or 
through an agreement between the United 
States and Afghanistan, if such a weapon 
is a United States Government-owned 
weapon; and 
(ii) any assistance also provided 
through the Afghan Security Forces Fund 
for support to APPF. 
(F) The Minister of Interior of Afghani-
stan has established the elements required by 
subparagraphs (A) through (F) of section 
862(a)(2) of the National Defense Authoriza-
tion Act for Fiscal Year 2008 (Public Law 
110–181). For purposes of the preceding sen-
tence, the terms ‘‘personnel performing private 
security functions in an area of combat oper-
ations or other significant military operations’’, 
‘‘contractor’’, and ‘‘contractor personnel’’, as 
used in section 862 of such Act, mean members 
of the APPF.
799 
(G) The Secretary is confident the security 
provided to supply convoys, to Department of 
Defense construction projects, and to Armed 
Forces deployed to Afghanistan will not be de-
graded. 
(2) ADDITIONAL
LIMITATION.—None of the 
funds available to the Department of Defense for 
fiscal year 2013 for the Afghanistan Security Forces 
Fund may be obligated or expended for infrastruc-
ture improvements at a APPF training center. 
(3) QUARTERLY REPORTS.— 
(A) ASSESSMENT REQUIRED.—Each fiscal 
year quarter during fiscal years 2013 and 2014, 
the Secretary of Defense shall conduct an as-
sessment of the APPF. 
(B) REPORTS.—Thirty days following the 
end of each quarter of fiscal years 2013 and 
2014, the Secretary shall submit a report to the 
congressional defense committees of each as-
sessment conducted under subparagraph (A). 
(C) MATTERS COVERED.—Each such re-
port shall include— 
(i) a detailed assessment of the ability 
of the APPF to perform the essential tasks 
identified by the assessment team;
800 
(ii) an identification and evaluation of 
measures of effectiveness; 
(iii) a description of the size of the 
APPF and an assessment of the suffi-
ciency of its recruiting and training; and 
(iv) a discussion of the issues the Sec-
retary considers significant, and any rec-
ommendations to address those issues or 
other recommendations to improve future 
performance of the APPF, as the Sec-
retary considers appropriate. 
(D) FIRST REPORT.—The first quarterly 
report submitted after the date of the enact-
ment of this Act shall include an estimate of 
the cost to the Department of Defense of the 
APPF, including funds within the Afghan Secu-
rity Forces Fund and estimated contractual 
costs for fiscal years 2013 and 2014. 
(E) A report submitted following the end 
of the second and fourth quarter of a fiscal year 
shall include a comparison of the cost to the 
Department of Defense (both direct and to con-
tractors of the Department of Defense) for the 
preceding six months of— 
(i) the use of the APPF; and
801 
(ii) the historical use of private secu-
rity contractors for a similar six-month pe-
riod. 
(4) AGREEMENTS.—The Secretary shall submit 
to the congressional defense committees a copy of 
each agreement signed by the United States and Af-
ghanistan for services of the APPF for the Depart-
ment of Defense during the first six months fol-
lowing the date of the enactment of this Act. 
TITLE XVI—INDUSTRIAL BASE 
MATTERS 
Subtitle A—Defense Industrial 
Base Matters 
SEC. 1601. DISESTABLISHMENT OF DEFENSE MATERIEL 
READINESS BOARD. 
(a) DISESTABLISHMENT OF BOARD.—The Defense 
Materiel Readiness Board established pursuant to section 
871 of the National Defense Authorization Act for Fiscal 
Year 2008 (Public Law 110–181; 10 U.S.C. 117 note) is 
hereby disestablished. 
(b) TERMINATION OF DEFENSE STRATEGIC READI-
NESS FUND.—The Defense Strategic Readiness Fund es-
tablished by section 872(d) of the National Defense Au-
thorization Act for Fiscal Year 2008 (Public Law 110– 
181; 10 U.S.C. 117 note) is hereby closed.
802 
(c) REPEAL.—Subtitle G of title VIII of the National 
Defense Authorization Act for Fiscal Year 2008 (Public 
Law 110–181; 10 U.S.C. 117 note) is repealed. 
SEC. 1602. ASSESSMENT OF EFFECTS OF FOREIGN BOY-
COTTS. 
Section 2505 of title 10, United States Code, is 
amended— 
(1) by redesignating subsection (d) as sub-
section (e); and 
(2) by inserting after subsection (c) the fol-
lowing new subsection (d): 
‘‘(d) ASSESSMENT OF EXTENT OF EFFECTS OF FOR-
EIGN BOYCOTTS.—Each assessment under subsection (a) 
shall include a separate discussion and presentation re-
garding the extent to which the national technology and 
industrial base is affected by foreign boycotts. The discus-
sion and presentation regarding foreign boycotts shall— 
‘‘(1) identify sectors of the national technology 
and industrial base being affected by foreign boy-
cotts; 
‘‘(2) assess the harm to the national technology 
and industrial base as a result of such boycotts; and 
‘‘(3) identify actions necessary to minimize the 
effects of foreign boycotts on the national technology 
and industrial base.’’.
803 
SEC. 1603. ADVANCING INNOVATION PILOT PROGRAM. 
(a) PILOT PROGRAM.—The Secretary of Defense, 
acting through the Assistant Secretary of Defense for Re-
search and Engineering, may establish and implement a 
pilot program, to be known as the ‘‘Advancing Innovation 
Pilot Program’’, in furtherance of the national security ob-
jectives in section 2501(a) of title 10, United States Code. 
(b) PURPOSE.—The purpose of the pilot program is 
to accelerate development and fielding of research innova-
tions from qualifying institutions. 
(c) AVAILABILITY OF FUNDS.—Of the funds author-
ized and appropriated, or otherwise made available, for re-
search, development, test and evaluation, the Secretary 
may allocate funding to qualifying institutions in accord-
ance with this subsection. Such funding shall be used to 
evaluate the potential of fielding or commercialization of 
existing discoveries, including— 
(1) proof of concept research or prototype de-
velopment; and 
(2) activities that contribute to determining a 
project’s path to fielding or commercialization of 
dual-use technologies, including technical validations, 
market research, determination of intellectual prop-
erty rights, and investigating military or commercial 
opportunities.
804 
(d) IMPLEMENTATION.—Prior to obligation or execu-
tion of funding under the pilot program, the Secretary 
shall develop and issue guidance to implement the pilot 
program. Such guidance shall, at a minimum— 
(1) require that funding allocated under the 
pilot program shall be done using a competitive, 
merit-based process; 
(2) ensure that qualifying institutions establish 
a rigorous, diverse review board for program execu-
tion that shall be comprised of experts in 
translational and proof of concept research, includ-
ing 
representatives 
that 
provide 
expertise 
in 
transitioning technology, financing mechanisms, in-
tellectual property rights, and advancement of small 
business concerns; 
(3) ensure that technology validation milestones 
are established; and 
(4) enable the Assistant Secretary to reallocate 
funding with the pilot program from poor per-
forming projects to those with more potential. 
(e) LIMITATION.—Funding made available under the 
pilot program shall not be used for basic research, or to 
fund the acquisition of research equipment or supplies not 
directly related to fielding activities to meet military re-
quirements or commercialization of dual-use technologies.
805 
(f) REPORT.—Not later than 90 days after the com-
pletion of the pilot program, the Secretary shall submit 
to the congressional defense committees a report evalu-
ating the effectiveness of the activities of the pilot pro-
gram. The report shall include— 
(1) a detailed description of the execution of the 
pilot program, including incentives and activities un-
dertaken by review board experts; 
(2) an accounting of the funds used in the pilot 
program; 
(3) a detailed description of the institutional 
and proposal selection process; 
(4) a detailed compilation of results achieved by 
the pilot program; 
(5) an analysis of the program’s effectiveness, 
with data supporting the analysis; and 
(6) recommendations for advancing innovation 
and otherwise improving the transition of technology 
to meet Department of Defense requirements. 
(g) DEFINITIONS.—In this section: 
(1) 
QUALIFYING
INSTITUTION.—The 
term 
‘‘qualifying institution’’ means any entity at which 
research and development activities are conducted 
and that has past performance in technology transi-
806 
tion or commercialization of third-party research, in-
cluding— 
(A) an institution of higher education or 
other nonprofit entity; and 
(B) a for-profit entity. 
(2) RESEARCHER.—The term ‘‘researcher’’ 
means a university or Federal laboratory that con-
ducts basic research. 
(3) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given such term in section 101 of the High-
er Education Act of 1965. 
(4) DUAL-USE.—The term ‘‘dual-use’’ has the 
meaning provided in section 2500(2) of title 10, 
United States Code. 
(h) TERMINATION.—The pilot program conducted 
under this section shall terminate on September 30, 2017. 
SEC. 1604. NATIONAL SECURITY STRATEGY FOR NATIONAL 
TECHNOLOGY AND INDUSTRIAL BASE. 
(a) REQUIREMENT FOR STRATEGY.— 
(1) IN
GENERAL.—Section 2501 of title 10, 
United States Code, is amended as follows: 
(A) The section heading is amended by 
striking ‘‘objectives concerning’’ and in-
serting ‘‘strategy for’’.
807 
(B) Subsection (a) is amended— 
(i) in the subsection heading, by strik-
ing ‘‘OBJECTIVES’’ and inserting ‘‘STRAT-
EGY’’; 
(ii) by striking ‘‘It is the policy of’’ 
and all that follows through ‘‘objectives:’’ 
and inserting the following: ‘‘The Secretary 
of Defense shall develop a national security 
strategy for the national technology and 
industrial base. Such strategy shall be 
based on a prioritized assessment of risks 
and challenges to the defense supply chain 
and shall ensure that the national tech-
nology and industrial base is capable of 
achieving the following national security 
objectives:’’; and 
(iii) by adding at the end the fol-
lowing new paragraphs: 
‘‘(9) Ensuring reliable sources of materials that 
are critical to national security, such as specialty 
metals, armor plate and rare earth elements. 
‘‘(10) Reducing, to the maximum extent prac-
ticable, the presence of counterfeit parts in the sup-
ply chain and the risk associated with such parts.’’.
808 
(2) CLERICAL AMENDMENT.—The item relating 
to section 2501 in the table of sections at the begin-
ning of subchapter II of chapter 148 of such title is 
amended to read as follows: 
‘‘2501. National security strategy for national technology and industrial base.’’. 
(b) AMENDMENT TO ANNUAL REPORT RELATING TO 
DEFENSE INDUSTRIAL BASE.—Section 2504 of such title 
is amended— 
(1) by striking paragraph (2); 
(2) by redesignating paragraph (3) as para-
graph (2); and 
(3) by inserting after paragraph (2) (as so re-
designated) the following new paragraph (3): 
‘‘(3) Based on the assessments prepared pursu-
ant to section 2505 of this title— 
‘‘(A) a description of any mitigation strate-
gies 
necessary 
to 
address 
any 
gaps 
or 
vulnerabilities in the national technology and 
industrial base; and 
‘‘(B) any other steps necessary to foster 
and safeguard the national technology and in-
dustrial base.’’. 
(c) REQUIREMENT FOR CONSIDERATION OF STRAT-
EGY IN ACQUISITION PLANS.—Section 2440 of such title 
is amended by inserting after ‘‘base’’ the following: ‘‘, in
809 
accordance with the strategy required by section 2501 of 
this title,’’. 
(d) CONFORMING AMENDMENTS.—Section 852 of the 
National Defense Authorization Act for Fiscal Year 2012 
(Public Law 112–81; 125 Stat. 1517; 10 U.S.C. 2504 
note) is amended— 
(1) by striking subsection (c); and 
(2) by redesignating subsection (d) as sub-
section (c), and in that subsection by striking ‘‘sub-
section (c).’’ in the first sentence and inserting ‘‘sec-
tion 2501 of title 10, United States Code.’’. 
Subtitle B—Department of Defense 
Activities Related to Small Busi-
ness Matters 
SEC. 1611. PILOT PROGRAM TO ASSIST IN THE GROWTH 
AND DEVELOPMENT OF ADVANCED SMALL 
BUSINESS CONCERNS. 
(a) ESTABLISHMENT OF PILOT PROGRAM.—The Sec-
retary of Defense shall establish a pilot program within 
the Department of Defense to assist in the growth and 
development of advanced small business concerns in ac-
cordance with this section. 
(b) REQUIREMENTS OF PILOT PROGRAM.— 
(1) RESTRICTED
COMPETITION
FOR
CERTAIN 
CONTRACTS.—Under the pilot program and except
810 
as provided under paragraph (2)(B), competition for 
contract awards may be restricted to advanced small 
business concerns if— 
(A) the anticipated award price of the con-
tract (including options) is reasonably expected 
to exceed $25,000,000; 
(B) the Procurement Center Representa-
tive of the Small Business Administration or 
the Director of Small Business Programs of the 
Department of Defense determines that, if the 
contract were not awarded under the pilot pro-
gram, the contract would likely be awarded to 
an entity other than a small business concern; 
(C) there is a reasonable expectation that 
at least two advanced small business concerns 
will submit offers with respect to the contract; 
(D) such advanced small business concerns 
agree to the requirements specified in section 
15(o) of the Small Business Act (15 U.S.C. 
644(o)) (relating to percentage of work under 
the contract to be performed by the concern), 
except that work performed by other advanced 
small business concerns or by small business 
concerns shall be considered as work performed
811 
by the prime contractor for purposes of such re-
quirements; and 
(E) the contract award can be made at a 
fair market price. 
(2) ELIGIBILITY.— 
(A) ADVANCED
SMALL
BUSINESS
CON-
CERN.—An entity shall be considered an ad-
vanced small business concern and eligible for 
participation in the pilot program if the enti-
ty— 
(i) is independently owned and oper-
ated and is not dominant in its field of op-
eration; and 
(ii) has fewer than— 
(I) twice the number of employ-
ees the Small Business Administration 
has assigned as a size standard to the 
North American Industrial Classifica-
tion Standard code in which the entity 
is operating; or 
(II) three times the average an-
nual receipts the Small Business Ad-
ministration has assigned as a size 
standard to the North American In-
812 
dustrial Classification Standard code 
in which the entity is operating. 
(B) SMALL
BUSINESS
CONCERN.—Not-
withstanding paragraph (1), a small business 
concern may submit an offer for any contract 
under the pilot program. 
(3) CONSIDERATION AND NOTICE TO PUBLIC.— 
With respect to a contract opportunity determined to 
meet the criteria specified in paragraph (1), a con-
tracting officer for the Department of Defense 
shall— 
(A) consider awarding a contract under the 
pilot program before using full and open com-
petition for such contract; and 
(B) provide notice of the contract oppor-
tunity (including the eligibility requirements of 
the contract opportunity) in accordance with 
the Federal Acquisition Regulation and other 
applicable guidelines. 
(4) RELATIONSHIP
TO
SMALL
BUSINESS
ACT 
PROGRAMS.— 
(A) An advanced small business concern 
shall not be eligible for any assistance provided 
to small businesses by the Small Business Act 
(15 U.S.C. 637 et seq.) or the Small Business
813 
Investment Act of 1958 22 (15 U.S.C. 661 et 
seq.), unless eligibility is expressly provided 
through the pilot program established by this 
Act, and contracts awarded pursuant to the 
pilot program shall not be counted toward the 
achievement of the small business prime or sub-
contracting goals established by the Small Busi-
ness Act (15 U.S.C. 644). 
(B) An advanced small business concern 
shall enter into a subcontracting plan in accord-
ance with section 8(d) of the Small Business 
Act (15 U.S.C. 637(d)). 
(C) Nothing in this section authorizes a 
Procurement Center Representative or an em-
ployee of the Office of Small Business Pro-
grams to provide assistance to advanced small 
business concerns or to advocate for the restric-
tion of competition to advanced small business 
concerns. 
(c) IMPLEMENTATION.—Not later than 180 days 
after the date of the enactment of this Act, the Secretary 
of Defense, in consultation with the Administrator of the 
Small Business Administration, shall develop and issue 
guidance to implement the pilot program. The guidance 
shall—
814 
(1) identify criteria under which the pilot pro-
gram is evaluated, including a methodology to collect 
data during the course of the pilot program to facili-
tate an assessment at the conclusion of the pilot pro-
gram; 
(2) permit a self-certification for eligibility for 
participation in the pilot program; 
(3) ensure that any self-certification requires 
the concern involved to meet the requirements of the 
Small Business Administration regarding ownership, 
control, and affiliation (as set forth in section 
121.103 of title 13 of the Code of Federal Regula-
tions); 
(4) establish an appeals process to handle chal-
lenges to self-certifications of advanced small busi-
ness concerns, with the certification of eligibility re-
siding with the Small Business Administration’s Of-
fice of Hearings and Appeals; 
(5) identify a method to reimburse the Small 
Business Administration for additional costs to the 
Administration relating to such self-certifications; 
(6) establish a methodology for identifying and 
tracking program participants, including reporting 
on contracts awarded to program participants using 
the Federal Procurement Data System; and
815 
(7) ensure that the pilot program does not su-
persede goals or programs authorized by the Small 
Business Act (15 U.S.C. 637 et seq.) or the Small 
Business Investment Act of 1958 22 (15 U.S.C. 661 
et seq.) or count toward the achievement of the 
small business prime or subcontracting goals estab-
lished by the Small Business Act (15 U.S.C. 644). 
(d) REPORT TO CONGRESS.—Not later than one year 
after the date of the enactment of this Act, and annually 
thereafter for the duration of the pilot program, the Sec-
retary of Defense shall submit to the appropriate congres-
sional committees a report on the pilot program that in-
cludes each of the following: 
(1) The number of contracts awarded in the 
prior year under the pilot program. 
(2) The value of the contracts awarded under 
the pilot program and a description of the work car-
ried out under such contracts. 
(3) The number of program participants under 
the pilot program. 
(4) An assessment of the success of the pilot 
program based on the criteria described in sub-
section (c)(1). 
(5) Such recommendations as the Secretary 
considers appropriate, including a recommendation
816 
regarding whether to extend the pilot program or 
terminate it early. 
(e) TERMINATION.—The pilot program shall termi-
nate on the date that is three years after the date on which 
the guidance for the pilot program is issued pursuant to 
subsection (c). 
(f) DEFINITIONS.—In this section: 
(1) ADVANCED SMALL BUSINESS CONCERN.— 
The term ‘‘advanced small business concern’’ means 
an entity that meets the requirements specified in 
subsection (b)(2)(A). 
(2) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means each of the following: 
(A) The Committees on Armed Services 
and on Small Business and Entrepreneurship of 
the Senate. 
(B) The Committees on Armed Services 
and on Small Business of the House of Rep-
resentatives. 
(3) OFFICE OF SMALL BUSINESS PROGRAMS.— 
The term ‘‘Office of Small Business Programs’’ 
means the Office of Small Business Programs de-
scribed in section 144(b) of title 10, United States 
Code.
817 
(4) PILOT
PROGRAM.—The term ‘‘pilot pro-
gram’’ means the program established by the Sec-
retary of Defense under subsection (a). 
(5) 
PROCUREMENT
CENTER
REPRESENTA-
TIVE.—The term ‘‘Procurement Center Representa-
tive’’ has the meaning provided in section 15 of the 
Small Business Act (15 U.S.C. 644). 
(6) SMALL
BUSINESS
CONCERN.—The term 
‘‘small business concern’’ has the meaning provided 
under section 3(a) of the Small Business Act (15 
U.S.C. 632(a)). 
SEC. 1612. ROLE OF THE DIRECTORS OF SMALL BUSINESS 
PROGRAMS 
IN 
REQUIREMENTS 
DEVELOP-
MENT AND ACQUISITION DECISION PROC-
ESSES OF THE DEPARTMENT OF DEFENSE. 
(a) GUIDANCE REQUIRED.—The Secretary of De-
fense shall develop and issue guidance to ensure that the 
head of each Office of Small Business Programs in the 
Department of Defense is a participant in requirements 
development and acquisition decision processes— 
(1) of the Department, in the case of the Direc-
tor of Small Business Programs in the Department 
of Defense; and 
(2) of the military department concerned, in the 
case of the Director of Small Business Programs in
818 
the Department of the Army, in the Department of 
the Navy, and in the Department of the Air Force. 
(b) MATTERS
TO BE INCLUDED.—Such guidance 
shall, at a minimum— 
(1) require the Director of Small Business Pro-
grams in the Department of Defense— 
(A) to serve as an advisor to the Defense 
Acquisition Board; and 
(B) to serve as an advisor to the Informa-
tion Technology Acquisition Board; and 
(2) require coordination between the chiefs of 
the Armed Forces and the service acquisition execu-
tives, as appropriate (or their designees), and the 
Director of Small Business Programs in each mili-
tary department during the process for approval 
of— 
(A) a requirements document, as defined 
in section 2547 of title 10, United States Code; 
and 
(B) acquisition strategies or plans. 
SEC. 1613. SMALL BUSINESS ADVOCATE FOR DEFENSE 
AUDIT AGENCIES. 
(a) SMALL BUSINESS ADVOCATE.—Subchapter II of 
chapter 8 of title 10, United States Code, is amended by 
adding at the end the following new section:
819 
‘‘§ 204. Small Business Advocate for defense audit 
agencies 
‘‘(a) SMALL BUSINESS ADVOCATE.—The Secretary 
of Defense shall designate within each defense audit agen-
cy an official as the Small Business Advocate to have the 
duties described in subsection (b) and such other respon-
sibilities as may be determined by the Secretary. 
‘‘(b) DUTIES.—The Small Business Advocate at a de-
fense audit agency shall— 
‘‘(1) advise the Director of the defense audit 
agency on all issues related to small business con-
cerns; 
‘‘(2) serve as the defense audit agency’s pri-
mary point of contact and source of information for 
small business concerns; and 
‘‘(3) collect relevant data and monitor the de-
fense audit agency’s conduct of audits of small busi-
ness concerns, including— 
‘‘(A) monitoring the timeliness of audit 
closeouts for small business concerns; and 
‘‘(B) monitoring the responsiveness of the 
agency to issues or other matters raised by 
small business concerns; and 
‘‘(4) develop and implement processes and pro-
cedures to improve the performance of the defense 
audit agency related to the timeliness of audits of
820 
small business concerns and the responsiveness of 
the agency to issues or other matters raised by small 
business concerns. 
‘‘(c) DEFENSE AUDIT AGENCY DEFINED.—In this 
section, the term ‘defense audit agency’ means the De-
fense Contract Audit Agency and the Defense Contract 
Management Agency.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
at the beginning of chapter 8 of such title is amended by 
inserting after the item relating to section 203 the fol-
lowing new item: 
‘‘204. Small Business Advocate for defense audit agencies.’’. 
SEC. 1614. INDEPENDENT ASSESSMENT OF FEDERAL PRO-
CUREMENT 
CONTRACTING 
PERFORMANCE 
OF THE DEPARTMENT OF DEFENSE. 
(a) ASSESSMENT REQUIRED.—Not later than 60 
days after the date of the enactment of this Act, the Sec-
retary of Defense shall enter into a contract with a feder-
ally funded research and development center to conduct 
an independent assessment of the Department’s procure-
ment performance related to small business concerns. 
(b) MATTERS COVERED.—The assessment under 
subsection (a) shall, at a minimum, include— 
(1) a description of the industrial composition 
of companies receiving subcontracts pursuant to the 
test program for the negotiation of comprehensive
821 
small business subcontracting plans pursuant to sec-
tion 834 of the National Defense Authorization Act 
for Fiscal Years 1990 and 1991 (Public Law 101– 
189; 15 U.S.C. 637 note); 
(2) a comparison of the industrial composition 
of prime contractors participating in such test pro-
gram and the industrial composition of all prime 
contractors of the Department of Defense; 
(3) a determination of barriers to accurately 
capturing data on small business prime contracting 
and subcontracting, including an examination of the 
reliability of the information technology systems of 
the Department that are used to track such data; 
(4) recommendations for improving the quality 
and availability of data regarding small business 
prime contracting and subcontracting performance; 
(5) recommendations to improve and inform ne-
gotiations regarding small business contract goals 
for the Department; 
(6) an examination of the execution of small 
business subcontracting plans, including an assess-
ment of the degree to which initial teaming agree-
ments are not maintained through the performance 
of contracts;
822 
(7) an examination of the extent to which the 
Department adheres to current policies and guide-
lines relating to small business prime contracting 
and subcontracting goals; 
(8) recommendations for increasing opportuni-
ties for small business concerns owned and con-
trolled by service-disabled veterans (as defined by 
section 3(q) of the Small Business Act (15 U.S.C. 
632(q)) to do business with the Department of De-
fense; 
(9) an examination of the extent to which the 
Department bundles, consolidates, or otherwise 
groups requirements into contracts that are unsuit-
able for award to small businesses, and the effects 
that such practices have on small business participa-
tion; 
(10) recommendations for increasing small 
business prime contracting and subcontracting op-
portunities with the Department; and 
(11) recommendations for steps that can be 
taken to prevent abuses and ensuring that small 
business contracts are in fact going to small busi-
nesses. 
(c) REPORT.—Not later than January 1, 2014, the 
Secretary shall submit to the congressional defense com-
823 
mittees a report on the independent assessment conducted 
under this section. 
SEC. 1615. ASSESSMENT OF SMALL BUSINESS PROGRAMS 
TRANSITION. 
(a) INDEPENDENT REVIEW AND ASSESSMENT.—Not 
later than 30 days after the date of the enactment of this 
Act, the Secretary of Defense shall select an appropriate 
entity outside the Department of Defense to conduct an 
independent review and assessment of the transition of 
technologies developed by small business, such as those de-
veloped under the Small Business Innovation Research 
Program, into major weapon systems and major auto-
mated information systems for the Department of De-
fense. 
(b) ELEMENTS.—The review and assessment re-
quired by subsection (a) shall include the following: 
(1) An analysis of a representative sample of 
major weapon systems and major automated infor-
mation systems to determine the content of the sys-
tems from small businesses, including components 
transitioned from the Small Business Innovation Re-
search Program. 
(2) An analysis of established or ad hoc proc-
esses to allow program offices to monitor, evaluate,
824 
and transition small business-developed technologies 
into their program. 
(3) Recommendations for developing a system-
atic and sustained process for monitoring, evalu-
ating, and transitioning small business-developed 
technologies for use by the entire defense acquisition 
system of the Department of Defense, including data 
collection and measures of effectiveness and per-
formance. 
(c) REPORT.— 
(1) REPORT REQUIRED.—Not later than 120 
days after the date of the enactment of this Act, the 
entity conducting the review and assessment under 
subsection (a) shall submit to the Secretary and the 
congressional defense committees a report con-
taining— 
(A) the results of the review and assess-
ment; and 
(B) recommendations for improving the 
process for managing the transition and inte-
gration of technologies developed by small busi-
ness (including under the Small Business Inno-
vation Research Program) into major weapons 
systems and major automated information sys-
tems.
825 
(2) ADDITIONAL EVALUATION REQUIRED.—Not 
later than 30 days after the date on which the con-
gressional defense committees receive the report re-
quired by paragraph (1), the Secretary shall submit 
to such committees an evaluation by the Secretary 
of the results and recommendations contained in 
such report. 
(d) SBIR PROGRAM DEFINED.—In this section, the 
term ‘‘Small Business Innovation Research Program’’ has 
the meaning provided such term by section 2500(11) of 
title 10, United States Code. 
SEC. 1616. ADDITIONAL RESPONSIBILITIES OF INSPECTOR 
GENERAL OF THE DEPARTMENT OF DE-
FENSE. 
(a) REQUIREMENT
FOR PEER REVIEWS.—Section 
8(c) of the Inspector General Act of 1978 (5 U.S.C. App.) 
is amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(8); 
(2) by striking the period and inserting ‘‘; and’’ 
at the end of paragraph (9); and 
(3) by adding at the end the following new 
paragraph: 
‘‘(10) conduct peer reviews of Department of 
Defense audit agencies in accordance with and in
826 
such frequency as provided by Government auditing 
standards as established by the Comptroller General 
of the United States.’’. 
(b) REQUIREMENT FOR ADDITIONAL INFORMATION 
IN SEMIANNUAL REPORTS.—Section 8(f) of such Act is 
amended by striking paragraph (1) and inserting the fol-
lowing: 
‘‘(1) Each semiannual report prepared by the Inspec-
tor General of the Department of Defense under section 
5(a) shall be transmitted by the Secretary of Defense to 
the Committees on Armed Services and on Homeland Se-
curity and Governmental Affairs of the Senate and the 
Committees on Armed Services and on Oversight and Gov-
ernment Reform of the House of Representatives and to 
other appropriate committees or subcommittees of Con-
gress. Each such report shall include— 
‘‘(A) information concerning the numbers and 
types of contract audits conducted by the Depart-
ment during the reporting period; and 
‘‘(B) information concerning any Department of 
Defense audit agency that, during the reporting pe-
riod, has either failed an audit or is overdue for a 
peer review required to be conducted in accordance 
with subsection (c)(10).’’.
827 
SEC. 1617. RESTORATION OF 1 PERCENT FUNDING FOR AD-
MINISTRATIVE 
EXPENSES 
OF 
COMMER-
CIALIZATION READINESS PROGRAM OF DE-
PARTMENT OF DEFENSE. 
(a) RESTORATION.—Section 9(y) of the Small Busi-
ness Act (15 U.S.C. 638(y)), as amended by section 
5141(b)(1)(B) of the National Defense Authorization Act 
for Fiscal Year 2012 (Public Law 112–81; 125 Stat. 
1853) is amended— 
(1) by redesignating paragraphs (4) and (5) as 
paragraphs (5) and (6), respectively; and 
(2) by inserting after paragraph (3) the fol-
lowing new paragraph (4): 
‘‘(4) FUNDING.—For payment of expenses in-
curred to administer the Commercialization Readi-
ness Program under this subsection, the Secretary 
of Defense and each Secretary of a military depart-
ment is authorized to use not more than an amount 
equal to 1 percent of the funds available to the De-
partment of Defense or the military department pur-
suant to the Small Business Innovation Research 
Program. Such funds shall not be used to make 
Phase III awards.’’. 
(b) 
TECHNICAL
AMENDMENT.—Section 
5141(b)(3)(B) of the National Defense Authorization Act
828 
for Fiscal Year 2012 (Public Law 112–81; 125 Stat. 
1854) is amended— 
(1) by striking ‘‘subsection (y)—’’ and all that 
follows through ‘‘the following:’’ and inserting ‘‘sub-
section (y), by amending paragraph (4) to read as 
follows:’’ 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as of January 1, 2012. 
Subtitle C—Matters Relating to 
Small Business Concerns 
PART I—PROCUREMENT CENTER 
REPRESENTATIVES 
SEC. 1621. PROCUREMENT CENTER REPRESENTATIVES. 
(a) IN GENERAL.—Section 15(l) of the Small Busi-
ness Act (15 U.S.C. 644(l)) is amended by striking the 
subsection enumerator and inserting the following: 
‘‘(l) PROCUREMENT CENTER REPRESENTATIVES.— 
’’. 
(b) ASSIGNMENT AND ROLE.—Paragraph (1) of sec-
tion 15(l) of such Act (15 U.S.C. 644(l)) is amended to 
read as follows: 
‘‘(1) ASSIGNMENT AND ROLE.—The Adminis-
trator shall assign to each major procurement center 
a procurement center representative with such as-
sistance as may be appropriate.’’.
829 
(c) ACTIVITIES.—Section 15(l)(2) of such Act (15 
U.S.C. 644(l)(2)) is amended— 
(1) in the matter preceding subparagraph (A) 
by striking ‘‘(2) In addition to carrying out the re-
sponsibilities assigned by the Administration, a 
breakout’’ and inserting the following: 
‘‘(2) ACTIVITIES.—A’’; 
(2) by striking subparagraph (A) and inserting 
the following: 
‘‘(A) attend any provisioning conference or 
similar evaluation session during which a deter-
mination may be made with respect to the pro-
curement method to be used to satisfy a re-
quirement, review any acquisition plan with re-
spect to a requirement, and make recommenda-
tions regarding procurement method determina-
tions and acquisition plans;’’; 
(3) in subparagraph (B)— 
(A) by striking ‘‘(B) review, at any time, 
restrictions on competition’’ and inserting the 
following: 
‘‘(B) review, at any time, barriers to small 
business participation in Federal contracting’’; 
(B) by striking ‘‘items’’ and inserting 
‘‘goods and services’’; and
830 
(C) by striking ‘‘limitations’’ and inserting 
‘‘barriers’’; 
(4) in subparagraph (C) by striking ‘‘(C) review 
restrictions on competition’’ and inserting the fol-
lowing: 
‘‘(C) review barriers to small business par-
ticipation in Federal contracting’’; 
(5) by striking subparagraph (D) and inserting 
the following: 
‘‘(D) review any bundled or consolidated 
solicitation or contract in accordance with this 
Act;’’; 
(6) by striking subparagraph (E) and inserting 
the following: 
‘‘(E) have electronic access to procurement 
records, acquisition plans developed or in devel-
opment, and other data of the procurement cen-
ter commensurate with the level of such rep-
resentative’s approve security clearance classi-
fication;’’; and 
(7) by striking subparagraphs (F) and (G) and 
inserting the following: 
‘‘(F) receive, from personnel responsible 
for reviewing unsolicited proposals, copies of 
unsolicited proposals from small business con-
831 
cerns and any information on outcomes relating 
to such proposals; 
‘‘(G) participate in any session or planning 
process and review any documents with respect 
to a decision to convert an activity performed 
by a small business concern to an activity per-
formed by a Federal employee; 
‘‘(H) be an advocate for the maximum 
practicable utilization of small business con-
cerns in Federal contracting, including by advo-
cating against the bundling of contract require-
ments when not justified; and 
‘‘(I) carry out any other responsibility as-
signed by the Administrator.’’. 
(d) APPEALS.—Section 15(l)(3) of such Act (15 
U.S.C. 644(l)(3)) is amended by striking ‘‘(3) A breakout 
procurement center representative’’ and inserting the fol-
lowing: 
‘‘(3) APPEALS.—A procurement center rep-
resentative’’. 
(e) NOTIFICATION AND INCLUSION.—Paragraph (4) 
of section 15(l) of such Act (15 U.S.C. 644(l)) is amended 
to read as follows: 
‘‘(4) NOTIFICATION AND INCLUSION.—Agency 
heads shall ensure that procurement center rep-
832 
resentatives are included in applicable acquisition 
planning processes.’’. 
(f) POSITION REQUIREMENTS.—Section 15(l)(5) of 
such Act (15 U.S.C. 644(l)(5)) is amended— 
(1) by striking the paragraph enumerator and 
inserting the following: 
‘‘(5) POSITION REQUIREMENTS.—’’; 
(2) by striking subparagraphs (A) and (B) and 
inserting the following: 
‘‘(A) IN GENERAL.—A procurement center 
representative assigned under this subsection 
shall— 
‘‘(i) be a full-time employee of the Ad-
ministration; 
‘‘(ii) be fully qualified, technically 
trained, and familiar with the goods and 
services procured by the major procure-
ment center to which that representative is 
assigned; and 
‘‘(iii) have a Level III Federal Acqui-
sition Certification in Contracting (or any 
successor certification) or the equivalent 
Department of Defense certification, ex-
cept that any person serving in such a po-
sition on the date of enactment of this
833 
clause may continue to serve in that posi-
tion for a period of 5 years without the re-
quired certification.’’; and 
(3) in subparagraph (C) by striking ‘‘(C) The 
Administration shall establish personnel positions for 
breakout procurement representatives and advisers 
assigned pursuant to’’ and inserting the following: 
‘‘(B) COMPENSATION.—The Administrator 
shall establish personnel positions for procure-
ment center representatives assigned under’’. 
(g) MAJOR PROCUREMENT CENTER DEFINED.—Sec-
tion 15(l)(6) of such Act (15 U.S.C. 644(l)(6)) is amend-
ed— 
(1) by striking ‘‘(6) For purposes’’ and insert-
ing the following: 
‘‘(6) 
MAJOR
PROCUREMENT
CENTER
DE-
FINED.—For purposes’’; and 
(2) by striking ‘‘other than commercial items 
and which has the potential to incur significant sav-
ings as the result of the placement of a breakout 
procurement center representative’’ and inserting 
‘‘goods or services, including goods or services that 
are commercially available’’. 
(h) TRAINING.—Section 15(l)(7) of such Act (15 
U.S.C. 644(l)(7)) is amended—
834 
(1) by striking the paragraph enumerator and 
inserting the following: 
‘‘(7) TRAINING.—’’; 
(2) by striking subparagraph (A) and inserting 
the following: 
‘‘(A) AUTHORIZATION.—At such times as 
the Administrator deems appropriate, a pro-
curement center representative shall provide 
training for contracting officers, other appro-
priate personnel of the procurement center to 
which such representative is assigned, and small 
businesses groups seeking to do business with 
such procurement center. Such training shall 
acquaint the participants with the provisions of 
this subsection and shall instruct the partici-
pants in methods designed to further the pur-
poses of this subsection. 
‘‘(B) LIMITATION.—A procurement center 
representative may provide training under sub-
paragraph (A) only to the extent that the train-
ing does not interfere with the representative 
carrying out other activities under this sub-
section.’’; and 
(3) in subparagraph (B)—
835 
(A) by striking ‘‘(B) The breakout pro-
curement center representative’’ and inserting 
the following: 
‘‘(8) ANNUAL BRIEFING AND REPORT.—A pro-
curement center representative’’; and 
(B) by striking ‘‘sixty’’ and inserting ‘‘60’’. 
SEC. 1622. SMALL BUSINESS ACT CONTRACTING REQUIRE-
MENTS TRAINING. 
(a) ESTABLISHMENT.—Not later than 1 year after 
the date of enactment of this part, the Defense Acquisition 
University and the Federal Acquisition Institute shall each 
provide a course on contracting requirements under the 
Small Business Act, including the requirements for small 
business concerns owned and controlled by service-disabled 
veterans, qualified HUBZone small business concerns, 
small business concerns owned and controlled by socially 
and economically disadvantaged individuals, and small 
business concerns owned and controlled by women. 
(b) COURSE REQUIRED.—To have a Federal Acquisi-
tion Certification in Contracting (or any successor certifi-
cation) or the equivalent Department of Defense certifi-
cation an individual shall be required to complete the 
course established under subsection (a). 
(c) REQUIREMENT THAT BUSINESS OPPORTUNITY 
SPECIALISTS BE CERTIFIED.—Section 7(j)(10)(D)(i) of
836 
the Small Business Act (15 U.S.C. 636(j)(10)(D)(i)) is 
amended by inserting after ‘‘to assist such Program Par-
ticipant.’’ the following: ‘‘The Business Opportunity Spe-
cialist shall have a Level I Federal Acquisition Certifi-
cation in Contracting (or any successor certification) or 
the equivalent Department of Defense certification, except 
that a Business Opportunity Specialist serving at the time 
of the date of enactment of the Small Business Oppor-
tunity Act of 2012 may continue to serve as a Business 
Opportunity Specialist for a period of 5 years beginning 
on that date of enactment without such a certification.’’. 
(d) GAO REPORT.—Not later than 365 days after 
the date of enactment of this part, the Comptroller Gen-
eral of the United States shall conduct a study and submit 
a report to the Committee on Small Business of the House 
of Representatives and the Committee on Small Business 
and Entrepreneurship of the Senate on the relationship 
between the size and quality of the acquisition workforce 
and the Federal government’s ability to maximize the utili-
zation of small businesses in Federal procurement. The 
report shall specifically address the following: 
(1) The extent to which training on small busi-
ness contracting laws affects a contracting officer’s 
determination to use one of the contracting authori-
ties provided in the Small Business Act.
837 
(2) The relationship between a robust Federal 
acquisition workforce and small business success in 
obtaining Federal contracting opportunities. 
(3) The effect on economic growth if small busi-
nesses experienced a significant reduction in small 
business procurement activities. 
(4) The effect of the anticipated acceleration of 
retirements by the acquisition workforce on small 
business procurement opportunities. 
SEC. 1623. ACQUISITION PLANNING. 
Section 15(e)(1) of the Small Business Act (15 
U.S.C. 644(e)(1)) is amended— 
(1) by striking ‘‘the various agencies’’ and in-
serting ‘‘a Federal department or agency’’; and 
(2) by striking the period and inserting ‘‘and 
each such Federal department or agency shall— 
‘‘(A) enumerate opportunities for the par-
ticipation of small business concerns during all 
acquisition planning processes and in all acqui-
sition plans; 
‘‘(B) invite the participation of the appro-
priate Director of Small and Disadvantaged 
Business Utilization in all acquisition planning 
processes and provide that Director access to all 
acquisition plans in development; and
838 
‘‘(C) invite the participation of the appro-
priate procurement center representative in all 
acquisition planning processes and provide that 
representative access to all acquisition plans in 
development.’’. 
PART 
II—GOALS 
FOR 
PROCUREMENT 
CON-
TRACTS 
AWARDED 
TO 
SMALL 
BUSINESS 
CONCERNS 
SEC. 1631. GOALS FOR PROCUREMENT CONTRACTS AWARD-
ED TO SMALL BUSINESS CONCERNS. 
(a) IN GENERAL.—Section 15(g) of the Small Busi-
ness Act (15 U.S.C. 644(g)) is amended by striking the 
subsection enumerator and inserting the following: 
‘‘(g) 
GOALS
FOR
PROCUREMENT
CONTRACTS 
AWARDED TO SMALL BUSINESS CONCERNS.—’’. 
(b) GOVERNMENTWIDE GOALS.—Paragraph (1) of 
section 15(g) of such Act (15 U.S.C. 644(g)) is amended 
to read as follows: 
‘‘(1) GOVERNMENTWIDE
GOALS.—The Presi-
dent shall annually establish Governmentwide goals 
for procurement contracts awarded to small business 
concerns, small business concerns owned and con-
trolled 
by 
service-disabled 
veterans, 
qualified 
HUBZone small business concerns, small business 
concerns owned and controlled by socially and eco-
839 
nomically disadvantaged individuals, and small busi-
ness concerns owned and controlled by women in ac-
cordance with the following: 
‘‘(A) The Governmentwide goal for partici-
pation by small business concerns shall be es-
tablished at not less than 25 percent of the 
total value of all prime contract awards for each 
fiscal year and 40 percent of the total value of 
all subcontract awards for each fiscal year. 
‘‘(B) The Governmentwide goal for partici-
pation by small business concerns owned and 
controlled by service-disabled veterans shall be 
established at not less than 3 percent of the 
total value of all prime contract and at not less 
than 3 percent of the total value of all sub-
contract awards for each fiscal year. 
‘‘(C) The Governmentwide goal for partici-
pation by qualified HUBZone small business 
concerns shall be established at not less than 3 
percent of the total value of all prime contract 
and at not less than 3 percent of the total value 
of all subcontract awards for each fiscal year. 
‘‘(D) The Governmentwide goal for partici-
pation by small business concerns owned and 
controlled by socially and economically dis-
840 
advantaged individuals shall be established at 
not less than 5 percent of the total value of all 
prime contract and at not less than 5 percent 
of the total value of all subcontract awards for 
each fiscal year. 
‘‘(E) The Governmentwide goal for partici-
pation by small business concerns owned and 
controlled by women shall be established at not 
less than 5 percent of the total value of all 
prime contract and at not less than 5 percent 
of the total value of all subcontract awards for 
each fiscal year.’’. 
(c) AGENCY GOALS.—Paragraph (2) of section 15(g) 
of such Act (15 U.S.C. 644(g)) is amended to read as fol-
lows: 
‘‘(2) AGENCY GOALS.— 
‘‘(A) ESTABLISHMENT.—The head of each 
Federal agency shall annually establish, for the 
agency that individual heads, goals for procure-
ment contracts awarded to small business con-
cerns, small business concerns owned and con-
trolled by service-disabled veterans, qualified 
HUBZone small business concerns, small busi-
ness concerns owned and controlled by socially 
and economically disadvantaged individuals, and
841 
small business concerns owned and controlled 
by women. 
‘‘(B) RELATIONSHIP
TO
GOVERNMENT-
WIDE GOALS.— 
‘‘(i) SCOPE.—The goals established by 
the head of a Federal agency under sub-
paragraph (A) shall be in the same format 
as the goals established by the President 
under paragraph (1) and shall address 
both prime contract and subcontract 
awards. 
‘‘(ii) REQUIREMENT
PERTAINING
TO 
AGENCY
GOALS.—With respect to each 
goal for a fiscal year established under 
subparagraph (A) for a category of small 
business concern, the participation percent-
age applicable to such goal may not be less 
than the participation percentage applica-
ble to the Governmentwide goal for such 
fiscal year established under paragraph (1) 
for such category. 
‘‘(C) CONSULTATION REQUIRED.— 
‘‘(i) IN
GENERAL.—.In establishing 
goals under subparagraph (A), the head of
842 
each Federal agency shall consult with the 
Administrator. 
‘‘(ii) 
DISAGREEMENTS.—Except 
as 
provided by clause (iii), if the Adminis-
trator and the head of a Federal agency 
fail to agree on a goal established under 
subparagraph (A), the disagreement shall 
be submitted to the Administrator for Fed-
eral Procurement Policy for final deter-
mination. 
‘‘(iii) AGENCY
GOALS
OF
THE
DE-
PARTMENT OF DEFENSE.—In the case of a 
goal proposed by the Secretary of Defense 
that is lower than a goal established dur-
ing the preceding fiscal year for the De-
partment of the Defense and for which the 
Administrator does not agree, the disagree-
ment shall be submitted to the Adminis-
trator for Federal Procurement Policy for 
final determination. 
‘‘(D) PLAN FOR ACHIEVING GOALS.—After 
establishing goals under subparagraph (A) for a 
fiscal year, the head of each Federal agency 
shall develop a plan for achieving such goals,
843 
which shall apportion responsibilities among the 
agency’s acquisition executives and officials. 
‘‘(E) EXPANDED PARTICIPATION.—In es-
tablishing goals under subparagraph (A), the 
head of each Federal agency shall make a con-
sistent effort to annually expand participation 
by small business concerns from each industry 
category in procurement contracts of such agen-
cy, including participation by small business 
concerns owned and controlled by service-dis-
abled veterans, qualified HUBZone small busi-
ness concerns, small business concerns owned 
and controlled by socially and economically dis-
advantaged individuals, and small business con-
cerns owned and controlled by women. 
‘‘(F) CONSIDERATION.—The head of each 
Federal agency, in attempting to attain ex-
panded participation under subparagraph (E), 
shall consider— 
‘‘(i) contracts awarded as the result of 
unrestricted competition; and 
‘‘(ii) contracts awarded after competi-
tion restricted to eligible small business 
concerns under this section and under the 
program established under section 8(a).
844 
‘‘(G) 
COMMUNICATION
REGARDING 
GOALS.— 
‘‘(i) 
IMPORTANCE
OF
ACHIEVING 
GOALS.—Each procurement employee or 
program manager described in clause (ii) 
shall communicate to the subordinates of 
the procurement employee or program 
manager the importance of achieving goals 
established under subparagraph (A). 
‘‘(ii) PROCUREMENT
EMPLOYEES
OR 
PROGRAM MANAGERS DESCRIBED.—A pro-
curement employee or program manager 
described in this clause is a senior procure-
ment executive, senior program manager, 
or Director of Small and Disadvantaged 
Business Utilization of a Federal agency 
having contracting authority.’’. 
(d) ENFORCEMENT; DETERMINATIONS
OF
THE 
TOTAL VALUE OF CONTRACT AWARDS.—Section 15(g) of 
the Small Business Act (15 U.S.C. 644(g)), as amended 
by this part, is further amended by adding at the end the 
following: 
‘‘(3) ENFORCEMENT.—If the Administrator 
does not issue the report required in subsection 
(h)(2) on or before the date that is 120 days after
845 
the end of the prior fiscal year, the Administrator 
may not carry out or establish any pilot program 
until the date on which the Administrator issues the 
report. 
‘‘(4) DETERMINATIONS OF THE TOTAL VALUE 
OF CONTRACT AWARDS.—For purposes of the goals 
established under paragraphs (1) and (2), the total 
value of contract awards for a fiscal year may not 
be determined in a manner that excludes the value 
of a contract based on— 
‘‘(A) where the contract is awarded; 
‘‘(B) where the contract is performed; 
‘‘(C) whether the contract is mandated by 
Federal law to be performed by an entity other 
than a small business concern; 
‘‘(D) whether funding for the contract is 
made available in an appropriations Act, if the 
contract is subject to competitive procedures 
under chapter 33 of title 41, United States 
Code; or 
‘‘(E) whether the contract is subject to the 
Federal Acquisition Regulation.’’.
846 
SEC. 1632. REPORTING ON GOALS FOR PROCUREMENT 
CONTRACTS AWARDED TO SMALL BUSINESS 
CONCERNS. 
Subsection (h) of section 15 of the Small Business 
Act (15 U.S.C. 644) is amended to read as follows: 
‘‘(h) REPORTING
ON GOALS
FOR PROCUREMENT 
CONTRACTS
AWARDED
TO
SMALL
BUSINESS
CON-
CERNS.— 
‘‘(1) AGENCY REPORTS.—At the conclusion of 
each fiscal year, the head of each Federal agency 
shall submit to the Administrator a report describ-
ing— 
‘‘(A) the extent of the participation by 
small business concerns, small business con-
cerns owned and controlled by veterans (includ-
ing 
service-disabled 
veterans), 
qualified 
HUBZone small business concerns, small busi-
ness concerns owned and controlled by socially 
and economically disadvantaged individuals, and 
small business concerns owned and controlled 
by women in the procurement contracts of such 
agency during such fiscal year; 
‘‘(B) whether the agency achieved the 
goals established for the agency under sub-
section (g)(2)(A) with respect to such fiscal 
year; and
847 
‘‘(C) any justifications for a failure to 
achieve such goals. 
‘‘(2) REPORTS BY ADMINISTRATOR.—Not later 
than 60 days after receiving a report from each Fed-
eral agency under paragraph (1) with respect to a 
fiscal year, the Administrator shall submit to the 
President and Congress, and to make available on a 
public website, a report that includes— 
‘‘(A) a copy of each report submitted to 
the Administrator under paragraph (1); 
‘‘(B) a determination of whether each goal 
established by the President under subsection 
(g)(1) for such fiscal year was achieved; 
‘‘(C) a determination of whether each goal 
established by the head of a Federal agency 
under subsection (g)(2)(A) for such fiscal year 
was achieved; 
‘‘(D) the reasons for any failure to achieve 
a goal established under paragraph (1) or 
(2)(A) of subsection (g) for such fiscal year and 
a description of actions planned by the applica-
ble agency to address such failure, including the 
Administrator’s comments and recommenda-
tions on the proposed remediation plan;
848 
‘‘(E) for the Federal Government and each 
Federal agency, an analysis of the number and 
dollar amount of prime contracts awarded dur-
ing such fiscal year to— 
‘‘(i) small business concerns— 
‘‘(I) in the aggregate; 
‘‘(II) through sole source con-
tracts; 
‘‘(III) through competitions re-
stricted to small business concerns; 
and 
‘‘(IV) through unrestricted com-
petition; 
‘‘(ii) small business concerns owned 
and controlled by service-disabled vet-
erans— 
‘‘(I) in the aggregate; 
‘‘(II) through sole source con-
tracts; 
‘‘(III) through competitions re-
stricted to small business concerns; 
‘‘(IV) through competitions re-
stricted to small business concerns 
owned and controlled by service-dis-
abled veterans; and
849 
‘‘(V) through unrestricted com-
petition; 
‘‘(iii) qualified HUBZone small busi-
ness concerns— 
‘‘(I) in the aggregate; 
‘‘(II) through sole source con-
tracts; 
‘‘(III) through competitions re-
stricted to small business concerns; 
‘‘(IV) through competitions re-
stricted to qualified HUBZone small 
business concerns; 
‘‘(V) through unrestricted com-
petition where a price evaluation pref-
erence was used; and 
‘‘(VI) through unrestricted com-
petition where a price evaluation pref-
erence was not used; 
‘‘(iv) small business concerns owned 
and controlled by socially and economically 
disadvantaged individuals— 
‘‘(I) in the aggregate; 
‘‘(II) through sole source con-
tracts;
850 
‘‘(III) through competitions re-
stricted to small business concerns; 
‘‘(IV) through competitions re-
stricted to small business concerns 
owned and controlled by socially and 
economically disadvantaged individ-
uals; 
‘‘(V) through unrestricted com-
petition; and 
‘‘(VI) by reason of that concern’s 
certification as a small business 
owned and controlled by socially and 
economically disadvantaged individ-
uals; 
‘‘(v) small business concerns owned by 
an Indian tribe other than an Alaska Na-
tive Corporation— 
‘‘(I) in the aggregate; 
‘‘(II) through sole source con-
tracts; 
‘‘(III) through competitions re-
stricted to small business concerns; 
‘‘(IV) through competitions re-
stricted to small business concerns 
owned and controlled by socially and
851 
economically disadvantaged individ-
uals; and 
‘‘(V) through unrestricted com-
petition; and 
‘‘(vi) small business concerns owned 
by Native Hawaiian Organization— 
‘‘(I) in the aggregate; 
‘‘(II) through sole source con-
tracts; 
‘‘(III) through competitions re-
stricted to small business concerns; 
‘‘(IV) through competitions re-
stricted to small business concerns 
owned and controlled by socially and 
economically disadvantaged individ-
uals; and 
‘‘(V) through unrestricted com-
petition; and 
‘‘(vii) small business concerns owned 
by an Alaska Native Corporation— 
‘‘(I) in the aggregate; 
‘‘(II) through sole source con-
tracts; 
‘‘(III) through competitions re-
stricted to small business concerns;
852 
‘‘(IV) through competitions re-
stricted to small business concerns 
owned and controlled by socially and 
economically disadvantaged individ-
uals; and 
‘‘(V) through unrestricted com-
petition; and 
‘‘(viii) small business concerns owned 
and controlled by women— 
‘‘(I) in the aggregate; 
‘‘(II) through competitions re-
stricted to small business concerns; 
‘‘(III) through competitions re-
stricted using the authority under sec-
tion 8(m)(2); 
‘‘(IV) through competitions re-
stricted using the authority under sec-
tion 8(m)(2) and in which the waiver 
authority under section 8(m)(3) was 
used; and 
‘‘(V) through unrestricted com-
petition; and 
‘‘(F) for the Federal Government and each 
Federal agency, the number, dollar amount, 
and distribution with respect to the North
853 
American Industry Classification System of 
subcontracts awarded during such fiscal year to 
small business concerns, small business con-
cerns owned and controlled by service-disabled 
veterans, qualified HUBZone small business 
concerns, small business concerns owned and 
controlled by socially and economically dis-
advantaged individuals, and small business con-
cerns owned and controlled by women.’’. 
SEC. 1633. SENIOR EXECUTIVES. 
(a) TRAINING.—Programs established for the devel-
opment of senior executives under section 3396(a) of title 
5, United States Code, shall include training with respect 
to Federal procurement requirements, including con-
tracting requirements under the Small Business Act (15 
U.S.C. 631 et seq.). 
(b) EVALUATION OF EXECUTIVES.—The head of an 
agency shall ensure that evaluations of members of the 
senior executive service, as defined under section 3396(a) 
of title 5, United States Code, responsible for acquisition, 
other senior officials responsible for acquisition, and other 
members of the senior executive service, as appropriate, 
include consideration of the agency’s success in achieving 
small business contracting goals and percentages. Such
854 
evaluations shall, as a minimum, consider the extent to 
which the executive— 
(1) promotes a climate or environment that is 
responsive to small business concerns; 
(2) communicates the importance of achieving 
the agency’s small business contracting goals; and 
(3) encourages small business awareness, out-
reach, and support. 
(c) DEFINITIONS.—In this section the term ‘‘respon-
sible for acquisition’’, with respect to a member of the sen-
ior executive service or other senior official, means such 
a member or official who acquires services or supplies, di-
rects agency organizations to acquire services or supplies, 
oversees acquisition officials, including program managers, 
contracting officers, and other acquisition workforce per-
sonnel responsible for formulating and approving acquisi-
tion strategies and plans. 
PART III—MENTOR-PROTEGE PROGRAM 
SEC. 1641. MENTOR-PROTEGE PROGRAMS. 
The Small Business Act (15 U.S.C. 631 et seq.) is 
amended— 
(1) by redesignating section 45 as section 46; 
and 
(2) by inserting after section 44 the following:
855 
‘‘SEC. 45. MENTOR-PROTEGE PROGRAMS. 
‘‘(a) ADMINISTRATION PROGRAM.— 
‘‘(1) AUTHORITY.—The Administrator is au-
thorized to establish a mentor-protege program for 
all small business concerns. 
‘‘(2) MODEL FOR PROGRAM.—The mentor-pro-
tege program established under paragraph (1) shall 
be identical to the mentor-protege program of the 
Administration for small business concerns that par-
ticipate in the program under section 8(a) of this 
Act (as in effect on the date of enactment of the Na-
tional Defense Authorization Act for Fiscal Year 
2013), except that the Administrator may modify 
the program to the extent necessary given the types 
of small business concerns included as proteges. 
‘‘(b) PROGRAMS OF OTHER AGENCIES.— 
‘‘(1) APPROVAL
REQUIRED.—Except as pro-
vided in paragraph (4), a Federal department or 
agency may not carry out a mentor-protege program 
for small business concerns unless— 
‘‘(A) the head of the department or agency 
submits a plan to the Administrator for the 
program; and 
‘‘(B) the Administrator approves such 
plan.
856 
‘‘(2) BASIS
FOR
APPROVAL.—The Adminis-
trator shall approve or disapprove a plan submitted 
under paragraph (1) based on whether the program 
proposed— 
‘‘(A) will assist proteges to compete for 
Federal prime contracts and subcontracts; and 
‘‘(B) complies with the regulations issued 
under paragraph (3). 
‘‘(3) REGULATIONS.—Not later than 270 days 
after the date of enactment of the National Defense 
Authorization Act for Fiscal Year 2013, the Admin-
istrator shall issue, subject to notice and comment, 
regulations with respect to mentor-protege pro-
grams, which shall ensure that such programs im-
prove the ability of proteges to compete for Federal 
prime contracts and subcontracts and which shall 
address, at a minimum, the following: 
‘‘(A) Eligibility criteria for program par-
ticipants, including any restrictions on the num-
ber of mentor-protege relationships permitted 
for each participant. 
‘‘(B) The types of developmental assistance 
to be provided by mentors, including how the 
assistance provided shall improve the competi-
tive viability of the proteges.
857 
‘‘(C) Whether any developmental assist-
ance provided by a mentor may affect the sta-
tus of a program participant as a small busi-
ness concern due to affiliation. 
‘‘(D) The length of mentor-protege rela-
tionships. 
‘‘(E) The effect of mentor-protege relation-
ships on contracting. 
‘‘(F) Benefits that may accrue to a mentor 
as a result of program participation. 
‘‘(G) Reporting requirements during pro-
gram participation. 
‘‘(H) Postparticipation reporting require-
ments. 
‘‘(I) The need for a mentor-protege pair, if 
accepted to participate as a pair in a mentor- 
protege program of any Federal department or 
agency, to be accepted to participate as a pair 
in all Federal mentor-protege programs. 
‘‘(J) Actions to be taken to ensure benefits 
for proteges and to protect proteges against ac-
tions by the mentor that— 
‘‘(i) may adversely affect the proteges 
status as a small business; or
858 
‘‘(ii) provide disproportionate eco-
nomic benefits to the mentor relative to 
those provided the protege. 
‘‘(4) LIMITATION
ON
APPLICABILITY.—Para-
graph (1) does not apply to the following: 
‘‘(A) Any mentor-protege program of the 
Department of Defense. 
‘‘(B) Any mentoring assistance provided 
under a Small Business Innovation Research 
Program or a Small Business Technology 
Transfer Program. 
‘‘(C) Until the date that is 1 year after the 
date on which the Administrator issues regula-
tions under paragraph (3), any Federal depart-
ment or agency operating a mentor-protege pro-
gram in effect on the date of enactment of the 
National Defense Authorization Act for Fiscal 
Year 2013. 
‘‘(c) REPORTING.— 
‘‘(1) IN
GENERAL.—Not later than 2 years 
after the date of enactment of the National Defense 
Authorization Act for Fiscal Year 2013, and annu-
ally thereafter, the Administrator shall submit to the 
Committee on Small Business of the House of Rep-
859 
resentatives and the Committee on Small Business 
and Entrepreneurship of the Senate a report that— 
‘‘(A) identifies each Federal mentor-pro-
tege program; 
‘‘(B) specifies the number of participants 
in each such program, including the number of 
participants that are— 
‘‘(i) small business concerns; 
‘‘(ii) small business concerns owned 
and controlled by service-disabled veterans; 
‘‘(iii) qualified HUBZone small busi-
ness concerns; 
‘‘(iv) small business concerns owned 
and controlled by socially and economically 
disadvantaged individuals; or 
‘‘(v) small business concerns owned 
and controlled by women; 
‘‘(C) describes the type of assistance pro-
vided to proteges under each such program; 
‘‘(D) describes the benefits provided to 
mentors under each such program; and 
‘‘(E) describes the progress of proteges 
under each such program with respect to com-
peting for Federal prime contracts and sub-
contracts.
860 
‘‘(2) PROVISION OF INFORMATION.—The head 
of each Federal department or agency carrying out 
a mentor-protege program shall provide to the Ad-
ministrator, on an annual basis, the information nec-
essary for the Administrator to submit a report re-
quired under paragraph (1). 
‘‘(d) DEFINITIONS.—In this section, the following 
definitions apply: 
‘‘(1) MENTOR.—The term ‘mentor’ means a 
for-profit business concern, of any size, that— 
‘‘(A) has the ability to assist and commits 
to assisting a protege to compete for Federal 
prime contracts and subcontracts; and 
‘‘(B) satisfies any other requirements im-
posed by the Administrator. 
‘‘(2) MENTOR-PROTEGE PROGRAM.—The term 
‘mentor-protege program’ means a program that 
pairs a mentor with a protege for the purpose of as-
sisting the protege to compete for Federal prime 
contracts and subcontracts. 
‘‘(3) PROTEGE.—The term ‘protege’ means a 
small business concern that— 
‘‘(A) is eligible to enter into Federal prime 
contracts and subcontracts; and
861 
‘‘(B) satisfies any other requirements im-
posed by the Administrator. 
‘‘(e) CURRENT MENTOR PROTEGE AGREEMENTS.— 
Mentors and proteges with approved agreement in a pro-
gram operating pursuant to subsection (b)(4)(C) shall be 
permitted to continue their relationship according to the 
terms specified in their agreement until the expiration 
date specified in the agreement. 
‘‘(f) SUBMISSION OF AGENCY PLANS.—Agencies op-
erating mentor protege programs pursuant to subsection 
(b)(4)(C) must submit the plans specified in subsection 
(b)(1)(A) to the Administrator within 6 months of the pro-
mulgation of rules required by subsection (b)(3). The Ad-
ministrator shall provide initial comments on each plan 
within 60 days of receipt, and final approval or denial of 
each plan with 180 days of receipt.’’. 
SEC. 1642. GOVERNMENT ACCOUNTABILITY OFFICE RE-
PORT. 
Not later than the date that is 2 years after the agen-
cies operating subject to section 45(b)(4)(C) of the Small 
Business Act have their plans approved or denied by the 
Administrator, the Comptroller General of the United 
States shall conduct a study to—
862 
(1) update the study required by section 1345 
of the Small Business Jobs Act of 2010 (Pub. Law 
111–240); 
(2) examine whether potential affiliation issues 
between mentors and proteges under the prior pro-
grams have been resolved by enactment of this Act; 
and 
(3) examine whether the regulations issued pur-
suant to section 45(b)(3)(I) of the Small Business 
Act have increased opportunities for mentor-protege 
pairs, and if they have decreased the paperwork re-
quired for such pairs participating in programs at 
multiple agencies. 
PART IV—TRANSPARENCY IN SUBCONTRACTING 
Subpart A—Limitations on Subcontracting 
SEC. 1651. LIMITATIONS ON SUBCONTRACTING. 
The Small Business Act (15 U.S.C. 631 et seq.) is 
amended— 
(1) by redesignating section 45 as section 47; 
and 
(2) by inserting after section 44 the following: 
‘‘SEC. 45. LIMITATIONS ON SUBCONTRACTING. 
‘‘(a) IN GENERAL.—If awarded a contract under sec-
tion 8(a), 8(m), 15(a), 31, or 36, a covered small business 
concern—
863 
‘‘(1) in the case of a contract for services, may 
not expend on subcontractors more than 50 percent 
of the amount paid to the concern under the con-
tract; 
‘‘(2) in the case of a contract for supplies 
(other than from a regular dealer in such supplies), 
may not expend on subcontractors more than 50 
percent of the amount, less the cost of materials, 
paid to the concern under the contract; 
‘‘(3) in the case of a contract described in more 
than 1 of paragraphs (1) through (2)— 
‘‘(A) shall determine for which category of 
services or supplies, described in 1 of para-
graphs (1) through (4), the greatest percentage 
of the contract amount is awarded; 
‘‘(B) shall determine the amount awarded 
under the contract for that category of services 
or supplies; and 
‘‘(C) may not expend on subcontractors, 
with respect to the amount determined under 
subparagraph (B), more than— 
‘‘(i) 50 percent of that amount, if the 
category of services or supplies applicable 
under subparagraph (A) is described in 
paragraph (1); and
864 
‘‘(ii) 50 percent of that amount, if the 
category of services or supplies applicable 
under subparagraph (A) is described in 
paragraph (2); and 
‘‘(4) in the case of a contract for supplies from 
a regular dealer in such supplies, shall supply the 
product of a domestic small business manufacturer 
or processor, unless a waiver of such requirement is 
granted— 
‘‘(A) by the Administrator, after reviewing 
a determination by the applicable contracting 
officer that no small business manufacturer or 
processor can reasonably be expected to offer a 
product meeting the specifications (including 
period for performance) required by the con-
tract; or 
‘‘(B) by the Administrator for a product 
(or class of products), after determining that no 
small business manufacturer or processor is 
available to participate in the Federal procure-
ment market. 
‘‘(b) SIMILARLY
SITUATED
ENTITIES.—Contract 
amounts expended by a covered small business concern on 
a subcontractor that is a similarly situated entity shall not 
be considered subcontracted for purposes of determining
865 
whether the covered small business concern has violated 
a requirement established under subsection (a) or (d). 
‘‘(c) MODIFICATIONS OF PERCENTAGES.— 
‘‘(1) IN
GENERAL.—The Administrator may 
change, by rule (after providing notice and an oppor-
tunity for public comment), a percentage specified in 
paragraphs (1) through (4) of subsection (a) if the 
Administrator determines that such change is nec-
essary to reflect conventional industry practices 
among business concerns that are below the numer-
ical size standard for businesses in that industry 
category. 
‘‘(2) UNIFORMITY.—A change to a percentage 
under paragraph (1) shall apply to all covered small 
business concerns. 
‘‘(d) OTHER CONTRACTS.— 
‘‘(1) IN GENERAL.—With respect to a category 
of contracts to which a requirement under sub-
section (a) does not apply, the Administrator is au-
thorized to establish, by rule (after providing notice 
and an opportunity for public comment), a require-
ment that a covered small business concern may not 
expend on subcontractors more than a specified per-
centage of the amount paid to the concern under a 
contract in that category.
866 
‘‘(2) UNIFORMITY.—A requirement established 
under paragraph (1) shall apply to all covered small 
business concerns. 
‘‘(3) CONSTRUCTION PROJECTS.—The Adminis-
trator shall establish, through public rulemaking, re-
quirements similar to those specified in paragraph 
(1) to be applicable to contracts for general and spe-
cialty construction and to contracts for any other in-
dustry category not otherwise subject to the require-
ments of such paragraph. The percentage applicable 
to any such requirement shall be determined in ac-
cordance with paragraph (2). 
‘‘(e) DEFINITIONS.—In this section, the following 
definitions apply: 
‘‘(1) COVERED SMALL BUSINESS CONCERN.— 
The term ‘covered small business concern’ means a 
business concern that— 
‘‘(A) with respect to a contract awarded 
under section 8(a), is a small business concern 
eligible to receive contracts under that section; 
‘‘(B) with respect to a contract awarded 
under section 8(m)— 
‘‘(i) is a small business concern owned 
and controlled by women (as defined in 
that section); or
867 
‘‘(ii) is a small business concern 
owned and controlled by women (as de-
fined in that section) that is not less than 
51 percent owned by 1 or more women 
who are economically disadvantaged (and 
such ownership is determined without re-
gard to any community property law); 
‘‘(C) with respect to a contract awarded 
under section 15(a), is a small business con-
cern; 
‘‘(D) with respect to a contract awarded 
under section 31, is a qualified HUBZone small 
business concern; or 
‘‘(E) with respect to a contract awarded 
under section 36, is a small business concern 
owned and controlled by service-disabled vet-
erans. 
‘‘(2) SIMILARLY SITUATED ENTITY.—The term 
‘similarly situated entity’ means a subcontractor 
that— 
‘‘(A) if a subcontractor for a small busi-
ness concern, is a small business concern; 
‘‘(B) if a subcontractor for a small busi-
ness concern eligible to receive contracts under 
section 8(a), is such a concern;
868 
‘‘(C) if a subcontractor for a small busi-
ness concern owned and controlled by women 
(as defined in section 8(m)), is such a concern; 
‘‘(D) if a subcontractor for a small busi-
ness concern owned and controlled by women 
(as defined in section 8(m)) that is not less 
than 51 percent owned by 1 or more women 
who are economically disadvantaged (and such 
ownership is determined without regard to any 
community property law), is such a concern; 
‘‘(E) if a subcontractor for a qualified 
HUBZone small business concern, is such a 
concern; or 
‘‘(F) if a subcontractor for a small busi-
ness concern owned and controlled by service- 
disabled veterans, is such a concern.’’. 
SEC. 1652. PENALTIES. 
Section 16 of the Small Business Act (15 U.S.C. 645) 
is amended by adding at the end the following: 
‘‘(g) SUBCONTRACTING LIMITATIONS.— 
‘‘(1) IN GENERAL.—Whoever violates a require-
ment established under section 45 shall be subject to 
the penalties prescribed in subsection (d), except 
that, for an entity that exceeded a limitation on sub-
contracting under such section, the fine described in
869 
subsection (d)(2)(A) shall be treated as the greater 
of— 
‘‘(A) $500,000; or 
‘‘(B) the dollar amount expended, in excess 
of permitted levels, by the entity on subcontrac-
tors. 
‘‘(2) MONITORING.—Not later than 1 year after 
the date of enactment of this subsection, the Admin-
istrator shall take such actions as are necessary to 
ensure that an existing Federal subcontracting re-
porting system is modified to notify the Adminis-
trator, the appropriate Director of the Office of 
Small and Disadvantaged Business Utilization, and 
the appropriate contracting officer if a requirement 
established under section 45 is violated.’’. 
SEC. 1653. CONFORMING AMENDMENTS. 
(a) HUBZONES.—Section 3(p)(5) of the Small Busi-
ness Act (15 U.S.C. 632(p)(5)) is amended— 
(1) in subparagraph (A)(i) by striking sub-
clause (III) and inserting the following: 
‘‘(III) with respect to any sub-
contract entered into by the small 
business concern pursuant to a con-
tract awarded to the small business 
concern under section 31, the small
870 
business concern will ensure that the 
requirements of section 45 are satis-
fied; and’’; 
(2) by striking subparagraphs (B) and (C); and 
(3) by redesignating subparagraph (D) as sub-
paragraph (B). 
(b) ENTITIES ELIGIBLE
FOR CONTRACTS UNDER 
SECTION 8(a).—Section 8(a) of such Act (15 U.S.C. 
637(a)) is amended by striking paragraph (14) and insert-
ing the following: 
‘‘(14) LIMITATIONS ON SUBCONTRACTING.—A 
concern may not be awarded a contract under this 
subsection as a small business concern unless the 
concern agrees to satisfy the requirements of section 
45.’’. 
(c) SMALL BUSINESS CONCERNS.—Section 15 of 
such Act (15 U.S.C. 644) is amended by striking sub-
section (o) and inserting the following: 
‘‘(o) LIMITATIONS ON SUBCONTRACTING.—A concern 
may not be awarded a contract under subsection (a) as 
a small business concern unless the concern agrees to sat-
isfy the requirements of section 45.’’. 
SEC. 1654. REGULATIONS. 
Not later than 180 days after the date of enactment 
of this Act, the Administrator of the Small Business Ad-
871 
ministration shall issue guidance with respect to compli-
ance with the changes made to the Small Business Act 
by the amendments in this part, with opportunities for no-
tice and comment. 
Subpart B—Subcontracting Plans 
SEC. 1655. SUBCONTRACTING PLANS. 
(a) 
SUBCONTRACTING
REPORTING
REQUIRE-
MENTS.— 
(1) IN GENERAL.—Section 8(d)(6) of the Small 
Business Act (15 U.S.C. 637(d)(6)) is amended— 
(A) by striking ‘‘(6) Each subcontracting 
plan’’ and inserting the following: 
‘‘(6) 
SUBCONTRACTING
PLAN
REQUIRE-
MENTS.—Each subcontracting plan’’; 
(B) by amending subparagraph (E) to read 
as follows: 
‘‘(E) assurances that the offeror or bidder 
will— 
‘‘(i) submit— 
‘‘(I) not later than 180 days 
after the date on which performance 
under the applicable contract begins, 
and every 180 days thereafter until 
contract performance ends, a report 
that describes all subcontracting ac-
872 
tivities under the contract during the 
preceding 180-day period; 
‘‘(II) not later than 1 year after 
the date on which performance under 
the applicable contract begins, and 
annually thereafter until contract per-
formance ends, a report that describes 
all subcontracting activities under the 
contract that have occurred before the 
date on which the report is submitted; 
and 
‘‘(III) not later than 30 days 
after the date on which performance 
under the applicable contract ends, a 
report that describes all subcon-
tracting activities under the contract; 
and 
‘‘(ii) cooperate with any study or sur-
vey required by the applicable Federal 
agency or the Administration to determine 
the extent of compliance by the offeror or 
bidder with the subcontracting plan;’’; and 
(C) by moving the margins for subpara-
graphs (A), (B), (C), (D), and (F) 2 ems to the 
right (so that the align with subparagraph (E),
873 
as amended by subparagraph (B) of this para-
graph). 
(2) REPORTING SYSTEM MODIFICATION.— 
(A) IN GENERAL.—Not later than 1 year 
after the date of enactment of this part, the 
Administrator of the Small Business Adminis-
tration shall take such actions as are necessary 
to ensure that the Federal subcontracting re-
porting system to which covered reports are 
submitted is modified to notify the Adminis-
trator, the appropriate contracting officer, and 
the appropriate Director of Small and Dis-
advantaged Business Utilization if an entity 
fails to submit a required covered report. If the 
Administrator does not modify the subcon-
tracting reporting system on or before the date 
that is 1 year after the date of enactment of 
this part, the Administrator may not carry out 
or establish any pilot program until the date 
the Administrator modifies the reporting sys-
tem. 
(B) COVERED REPORT DEFINED.—In this 
paragraph, the term ‘‘covered report’’ means a 
report submitted in accordance with assurances
874 
provided under section 8(d)(6)(E) of the Small 
Business Act (15 U.S.C. 637(d)(6)(E)). 
(b) FAILURE TO SUBMIT SUBCONTRACTING RE-
PORTS AS BREACH OF CONTRACT.—Section 8(d)(8) of 
such Act (15 U.S.C. 637(d)(8)) is amended— 
(1) by striking ‘‘(8) The failure’’ and inserting 
the following: 
‘‘(8) MATERIAL BREACH.—The failure’’; 
(2) in subparagraph (A) by striking ‘‘sub-
section, or’’ and inserting ‘‘subsection,’’; 
(3) in subparagraph (B) by striking ‘‘sub-
contract,’’ and inserting ‘‘subcontract, or’’; 
(4) by inserting after subparagraph (B) the fol-
lowing: 
‘‘(C) assurances provided under paragraph 
(6)(E),’’; and 
(5) by moving the margins of subparagraphs 
(A), (B), and the matter following subparagraph (B) 
2 ems to the right. 
(c) AUTHORITY OF SMALL BUSINESS ADMINISTRA-
TION.—Section 8(d)(10) of such Act (15 U.S.C. 
637(d)(10)) is amended— 
(1) by striking ‘‘(10) In the case of’’ and insert-
ing the following:
875 
‘‘(10) AUTHORITY
OF
ADMINISTRATION.—In 
the case of’’; 
(2) in subparagraph (B) by striking ‘‘, which 
shall be advisory in nature,’’; 
(3) in subparagraph (C) by striking ‘‘, either on 
a contract-by-contract basis, or in the case contrac-
tors’’ and inserting ‘‘as a supplement to evaluations 
performed by the contracting agency, either on a 
contract-by-contract basis or, in the case of contrac-
tors’’; and 
(4) by moving the margins of subparagraphs 
(A) through (C) 2 ems to the right. 
(d) APPEALS.—Section 8(d) of such Act (15 U.S.C. 
637(d)) is amended by adding at the end the following: 
‘‘(13) REVIEW AND ACCEPTANCE OF SUBCON-
TRACTING PLANS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (E), if a procurement center rep-
resentative or commercial market representative 
determines that a subcontracting plan required 
under paragraph (4) or (5) fails to provide the 
maximum practicable opportunity for covered 
small business concerns to participate in the 
performance of the contract to which the plan 
applies, such representative may delay accept-
876 
ance of the plan in accordance with subpara-
graph (B). 
‘‘(B) PROCESS.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a procurement center 
representative or commercial market rep-
resentative who makes the determination 
under subparagraph (A) with respect to a 
subcontracting plan may delay acceptance 
of the plan for a 30-day period by pro-
viding written notice of such determination 
to head of the procuring activity of the 
contracting agency. Such notice shall in-
clude recommendations for altering the 
plan to provide the maximum practicable 
opportunity described in that subpara-
graph. 
‘‘(ii) EXCEPTION.—In the case of the 
Department of Defense, a procurement 
center representative or commercial market 
representative who makes the determina-
tion under subparagraph (A) with respect 
to a subcontracting plan may delay accept-
ance of the plan for a 15-day period by 
providing written notice of such determina-
877 
tion to appropriate personnel of the De-
partment of Defense. Such notice shall in-
clude recommendations for altering the 
plan to provide the maximum practicable 
opportunity described in that subpara-
graph. The authority of a procurement 
center representative or commercial market 
representative to delay acceptance of a 
subcontracting plan as provided in sub-
paragraph (A), does not include the au-
thority to delay the award or performance 
of the contract concerned. 
‘‘(C) DISAGREEMENTS.—If a procurement 
center representative or commercial market rep-
resentative delays the acceptance of a subcon-
tracting plan under subparagraph (B) and does 
not reach agreement with head of the procuring 
activity of the contracting agency to alter the 
plan to provide the maximum practicable oppor-
tunity described in subparagraph (A) not later 
than 30 days from the date written notice was 
provided, the disagreement shall be submitted 
to the head of the contracting agency by the 
Administrator for a final determination.
878 
‘‘(D) COVERED
SMALL
BUSINESS
CON-
CERNS DEFINED.—In this paragraph, the term 
‘covered small business concerns’ means small 
business concerns, qualified HUBZone small 
business concerns, small business concerns 
owned and controlled by veterans, small busi-
ness concerns owned and controlled by service- 
disabled veterans, small business concerns 
owned and controlled by socially and economi-
cally disadvantaged individuals, and small busi-
ness concerns owned and controlled by women. 
‘‘(E) EXCEPTION.—The procurement cen-
ter representative or commercial market rep-
resentative may not delay the acceptance of a 
subcontracting plan if the appropriate personnel 
of the contracting agency certify that the agen-
cy’s need for the property or services is of such 
an unusual and compelling urgency that the 
United States would be seriously injured unless 
the agency is permitted to accept the subcon-
tracting plan.’’. 
SEC. 1656. NOTICES OF SUBCONTRACTING OPPORTUNI-
TIES. 
Section 8(k)(1) of the Small Business Act (15 U.S.C. 
637(k)(1)) is amended by striking ‘‘in the Commerce
879 
Business Daily’’ and inserting ‘‘on the appropriate Fed-
eral Web site (as determined by the Administrator)’’. 
SEC. 1657. REGULATIONS. 
Not later than 180 days after the date of enactment 
of this Act, the Administrator of the Small Business Ad-
ministration shall issue guidance with respect to the 
changes made to the Small Business Act, with opportunity 
for notice and comment. 
Subpart C—Publication of Certain Documents 
SEC. 1658. PUBLICATION OF CERTAIN DOCUMENTS. 
The Small Business Act (15 U.S.C. 631 et seq.), as 
amended by this part, is further amended by inserting 
after section 45 the following: 
‘‘SEC. 46. PUBLICATION OF CERTAIN DOCUMENTS. 
‘‘A Federal agency, other than the Department of 
Defense, may only convert a function that is being per-
formed by a small business concern to performance by a 
Federal employee if the agency has made publicly available 
the procedures and methodologies of the agency with re-
spect to decisions to convert a function being performed 
by a small business concern to performance by a Federal 
employee, including procedures and methodologies for de-
termining which contracts will be studied for potential 
conversion; procedures and methodologies by which a con-
tract is evaluated as inherently governmental or as a crit-
880 
ical agency function; and procedures and methodologies 
for estimating and comparing costs.’’. 
PART V—SMALL BUSINESS CONCERN SIZE 
STANDARDS 
SEC. 1661. SMALL BUSINESS CONCERN SIZE STANDARDS. 
Section 3 of the Small Business Act (15 U.S.C. 632) 
is amended— 
(1) by striking ‘‘SEC. 3.’’ and inserting the fol-
lowing: 
‘‘SEC. 3. DEFINITIONS.’’; 
and 
(2) in subsection (a)— 
(A) by striking the subsection enumerator 
and inserting the following: 
‘‘(a) SMALL BUSINESS CONCERNS.—’’; 
(B) in paragraph (1) by striking ‘‘(1) For 
the purposes’’ and inserting the following: 
‘‘(1) IN GENERAL.—For the purposes’’; 
(C) in paragraph (3) by striking ‘‘(3) 
When establishing’’ and inserting the following: 
‘‘(3) VARIATION BY INDUSTRY AND CONSIDER-
ATION OF OTHER FACTORS.—When establishing’’; 
(D) by moving paragraph (5), including 
each subparagraph and clause therein, 2 ems to 
the right; and
881 
(E) by adding at the end the following: 
‘‘(6) PROPOSED RULE MAKING.—In conducting 
rulemaking to revise, modify or establish size stand-
ards pursuant to this section, the Administrator 
shall consider, and address, and make publicly avail-
able as part of the notice of proposed rule making 
and notice of final rule each of the following: 
‘‘(A) a detailed description of the industry 
for which the new size standard is proposed; 
‘‘(B) an analysis of the competitive envi-
ronment for that industry; 
‘‘(C) the approach the Administrator used 
to develop the proposed standard including the 
source of all data used to develop the proposed 
rulemaking; and 
‘‘(D) the anticipated effect of the proposed 
rulemaking on the industry, including the num-
ber of concerns not currently considered small 
that would be considered small under the pro-
posed rulemaking and the number of concerns 
currently considered small that would be 
deemed other than small under the proposed 
rulemaking. 
‘‘(7) COMMON SIZE STANDARDS.—In carrying 
out this subsection, the Administrator may establish
882 
or approve a single size standard for a grouping of 
four digit North American Industrial Classification 
codes only if the Administrator makes publicly avail-
able, not later than the date on which such size 
standard is established or approved, a justification 
demonstrating that such size standard is appropriate 
for each individual industry classification included in 
the grouping. 
‘‘(8) NUMBER OF SIZE STANDARDS.—The Ad-
ministrator shall not limit the number of size stand-
ards it creates pursuant to paragraph (2), and shall 
assign the appropriate size standard to each North 
American Industrial Classification System Code’’. 
PART VI—CONTRACT BUNDLING 
SEC. 1671. CONSOLIDATION OF PROVISIONS RELATING TO 
CONTRACT BUNDLING. 
Section 44 of the Small Business Act (15 U.S.C. 
657q) is amended to read as follows: 
‘‘SEC. 44. CONTRACT BUNDLING. 
‘‘(a) DEFINITIONS.—In this Act: 
‘‘(1) BUNDLED CONTRACT.—The term ‘bundled 
contract’— 
‘‘(A) means a contract that is entered into 
to meet procurement requirements that are 
combined in a bundling of contract require-
883 
ments, without regard to whether a study of the 
effects of the solicitation on Federal officers or 
employees has been made; and 
‘‘(B) does not include— 
‘‘(i) a contract with an aggregate dol-
lar value below the dollar threshold; or 
‘‘(ii) a single award contract for the 
acquisition of a weapons system acquired 
through a major defense acquisition. 
‘‘(2) BUNDLING
METHODOLOGY.—The term 
‘bundling methodology’ means— 
‘‘(A) a solicitation to obtain offers for a 
single contract or a multiple award contract; 
‘‘(B) a solicitation of offers for the 
issuance of a task or a delivery order under an 
existing single or multiple award contract; or 
‘‘(C) the creation of any new procurement 
requirements that permits a combination of 
contract requirements, including any combina-
tion of contract requirements or order require-
ments. 
‘‘(3) 
BUNDLING
OF
CONTRACT
REQUIRE-
MENTS.—The term ‘bundling of contract require-
ments’, with respect to the contract requirements of 
a Federal agency—
884 
‘‘(A) means the use of any bundling meth-
odology to satisfy 2 or more procurement re-
quirements for new or existing goods or services 
provided to or performed for the Federal agen-
cy, including any construction services, that is 
likely to be unsuitable for award to a small- 
business concern due to— 
‘‘(i) the diversity, size, or specialized 
nature of the elements of the performance 
specified; 
‘‘(ii) the aggregate dollar value of the 
anticipated award; 
‘‘(iii) the geographical dispersion of 
the contract performance sites; or 
‘‘(iv) any combination of the factors 
described in clauses (i), (ii), and (iii); and 
‘‘(B) does not include the use of a bun-
dling methodology for an anticipated award 
with an aggregate dollar value below the dollar 
threshold. 
‘‘(4) CHIEF ACQUISITION OFFICER.—The term 
‘Chief Acquisition Officer’ means the employee of a 
Federal agency designated as the Chief Acquisition 
Officer for the Federal agency under section 1702(a) 
of title 41, United States Code.
885 
‘‘(5) CONTRACT.—The term ‘contract’ includes, 
for purposes of this section, any task order made 
pursuant to an indefinite quantity, indefinite deliv-
ery contract. 
‘‘(6) CONTRACT
BUNDLING.—The term ‘con-
tract bundling’ means the process by which a bun-
dled contract is created. 
‘‘(7) DOLLAR THRESHOLD.—The term ‘dollar 
threshold’ means— 
‘‘(A) in the case of a contract for construc-
tion, $5,000,000; and 
‘‘(B) in any other case, $2,000,000. 
‘‘(8) 
MAJOR
DEFENSE
ACQUISITION
PRO-
GRAM.—The term ‘major defense acquisition pro-
gram’ has the meaning given in section 2430(a) of 
title 10, United States Code. 
‘‘(9) PREVIOUSLY BUNDLED CONTRACT.—The 
term ‘previously bundled contract’ means a contract 
that is the successor to a contract that required a 
bundling analysis, contract for which any of the suc-
cessor contract were designated as a consolidated 
contract or bundled contract in the Federal procure-
ment database, or a contract for which the Adminis-
trator designated the prior contract as a bundled 
contract.
886 
‘‘(10) PROCUREMENT
ACTIVITY.—The term 
‘procurement activity’ means the Federal agency or 
office thereof acquiring goods or services. 
‘‘(11) 
PROCUREMENT
REQUIREMENT.—The 
term ‘procurement requirement’ means a determina-
tion by an agency that the acquisition of a specified 
good or service is needed to satisfy the mission of 
the agency. 
‘‘(12) SENIOR
PROCUREMENT
EXECUTIVE.— 
The term ‘senior procurement executive’ means an 
official designated under section 1702(c) of title 41, 
United States Code, as the senior procurement exec-
utive for a Federal agency. 
‘‘(13) TRADE ASSOCIATION.—The term ‘trade 
association’ means any entity that is described in 
paragraph (3), (6), (12), or (19) of section 501(c) 
of the Internal Revenue Code of 1986 and which is 
exempt from tax under section 501(a) of such Code. 
‘‘(b) POLICY.—The head of each Federal agency shall 
ensure that the decisions made by the Federal agency re-
garding contract bundling are made with a view to pro-
viding small business concerns with the maximum prac-
ticable opportunities to participate as prime contractors 
and subcontractors in the procurements of the Federal 
agency.
887 
‘‘(c) CONTRACT BUNDLING.— 
‘‘(1) PROPOSED PROCUREMENTS.—Paragraphs 
(2) through (4) shall apply to a proposed procure-
ment if the proposed procurement— 
‘‘(A) one or more small business concerns 
would suffer economic harm or disruption of its 
business operations, including the potential loss 
of an existing contract, as a direct or indirect 
result of the contract bundling; 
‘‘(B) includes, in its statement of work, 
goods or services— 
‘‘(i)(I) currently being performed by a 
small business; and 
‘‘(II) if the proposed procurement is 
in a quantity or estimated dollar value the 
magnitude of which renders small business 
prime contract participation unlikely; or 
‘‘(ii)(I) that are of a type that the Ad-
ministrator through market research can 
demonstrate that two or more small busi-
nesses are capable of performing; and 
‘‘(II) if the statement of work pro-
poses combining the goods or services iden-
tified in subclause (I) with other require-
888 
ments for goods or services into the solici-
tation of offers; 
‘‘(C) is for construction and— 
‘‘(i) seeks to package or combine dis-
crete construction projects; or 
‘‘(ii) the value of the goods or services 
subject to the contract exceeds the dollar 
threshold; or 
‘‘(D) is determined by the Administrator 
to have a solicitation that involves an unneces-
sary or unjustified bundling of contract require-
ments. 
‘‘(2) RESPONSIBILITY OF THE PROCUREMENT 
ACTIVITY.—At least 45 days prior to the issuance of 
a solicitation, the Procurement Activity shall notify 
and provide a copy of the proposed procurement to 
the procurement center representative assigned to 
the Procurement Activity. The 45-day notification 
process under this paragraph shall occur concur-
rently with other processing steps required prior to 
issuance of the solicitation. The notice shall include 
a statement as to why the agency has determined 
that contract bundling is necessary and justified and 
shall also describe why the proposed acquisition can-
889 
not be offered so as to make small business partici-
pation likely. Such statement shall address— 
‘‘(A) why the proposed acquisition cannot 
be further divided into reasonably small lots or 
discrete tasks in order to permit offers by small 
business concerns; 
‘‘(B) if applicable, a list of the incumbent 
contractors disaggregated by and including 
names, addresses, and whether or not the con-
tractor is a small business concern; 
‘‘(C) a description of the industries that 
might be interested in bidding on the contract 
requirements; 
‘‘(D) an assessment of the impact on small 
businesses that had bid on previous procure-
ment requirements that are included in the 
bundling of contract requirements; 
‘‘(E) delineating the number of existing 
small business concerns whose contracts will 
cease if the contract bundling proceeds; 
‘‘(F) if delivery schedule was a factor in 
the decision to bundle, an explanation as to why 
a schedule could not be developed that would 
encourage small business participation; and
890 
‘‘(G) in the case of a construction contract, 
why construction cannot be procured as sepa-
rate discrete projects. 
‘‘(3) PUBLICATION OF NOTICE STATEMENT.— 
Concurrently, the statement required in paragraph 
(2) shall be published in the Federal contracting op-
portunities database. 
‘‘(4) RECOMPETITION OF A PREVIOUSLY BUN-
DLED CONTRACT.—If the proposed procurement is a 
previously bundled contract, that is to be recompeted 
as a bundled contract, the Administrator shall deter-
mine, with the assistance of the agency proposing 
the procurement— 
‘‘(A) the amount of savings and benefits 
(in accordance with subsection (d)) achieved 
under the bundling of contract requirements; 
‘‘(B) whether such savings and benefits 
will continue to be realized if the contract re-
mains bundled, and whether such savings and 
benefits would be greater if the procurement re-
quirements were divided into separate solicita-
tions suitable for award to small business con-
cerns; 
‘‘(C) the dollar value of subcontracts 
awarded to small business concerns under the
891 
bundled contract, disaggregated by North 
American 
Industrial 
Classification 
System 
Code; 
‘‘(D) the percentage of subcontract dollars 
awarded to small businesses under the bundled 
contract, disaggregated by North American In-
dustrial Classification System Code; and 
‘‘(E) the dollar amount and percentage of 
prime contract dollars awarded to small busi-
nesses in the primary North American Indus-
trial Classification System Code for that bun-
dled contract during each of the two fiscal years 
preceding the award of the bundled contract 
and during each fiscal year of the performance 
of the bundled contract. 
‘‘(5) FAILURE TO PROVIDE NOTICE.— 
‘‘(A) NO NOTIFICATION RECEIVED.—If no 
notification of the proposed procurement or ac-
companying statement is received, but the Ad-
ministrator determines that the proposed pro-
curement is a proposed procurement described 
in paragraph (1), then the Administrator shall 
require that such a statement of work be com-
pleted by the Procurement Activity and sent to 
the procurement center representative and post-
892 
pone the solicitation process for at least 10 
days but not more than 45 days to allow the 
Administrator to review the statement and 
make recommendations as described in this sec-
tion before the procurement process is contin-
ued. 
‘‘(B) NO WORK CONTINUED.—If the Ad-
ministrator requires a Procurement Activity to 
provide a statement of work pursuant to sub-
paragraph (A), the Procurement Activity shall 
not be permitted to continue with the procure-
ment until such time as the Procurement Activ-
ity complies with the requirements of subpara-
graph (A). 
‘‘(6) RESPONSIBILITY OF THE PROCUREMENT 
CENTER REPRESENTATIVE.—Within 15 days after 
receipt of the proposed procurement and accom-
panying statement, if the procurement center rep-
resentative believes that the procurement as pro-
posed will render small business prime contract par-
ticipation unlikely, the representative shall rec-
ommend to the Procurement Activity alternative pro-
curement methods which would increase small busi-
ness prime contracting opportunities.
893 
‘‘(7) DISAGREEMENT BETWEEN THE ADMINIS-
TRATOR AND THE PROCUREMENT ACTIVITY.— 
‘‘(A) IN GENERAL.—If the Administrator 
determines that a small business concern would 
be adversely affected, directly or indirectly, by 
the proposed procurement, or if a small busi-
ness concern or a trade association of which 
that small business concern is a member so re-
quests, the Administrator may take action 
under this paragraph to further the interests of 
small businesses. 
‘‘(B) APPEAL
TO
AGENCY
HEAD.—The 
proposed procurement shall be submitted for 
determination to the head of the contracting 
agency by the Administrator. 
‘‘(C) APPEAL BY AFFECTED SMALL BUSI-
NESS CONCERN TO GAO.—For purposes of sub-
chapter V of chapter 35 of title 31, United 
States Code, if a protest is submitted to the 
Comptroller General under that subchapter al-
leging a violation of this section of the Small 
Business Act, a trade association representing 
small business concerns shall be considered an 
interested party. 
‘‘(d) MARKET RESEARCH.—
894 
‘‘(1) IN GENERAL.—Before proceeding with an 
acquisition strategy that could lead to bundled con-
tracts, the head of an agency shall conduct market 
research to determine whether bundling of the re-
quirements is necessary and justified. 
‘‘(2) FACTORS.—For purposes of subsection 
(c)(1), a bundled contract is necessary and justified 
if the bundling of contract requirements will result 
in substantial measurable benefits in excess of those 
benefits resulting from a procurement of the con-
tract requirements that does not involve contract 
bundling. 
‘‘(3) BENEFITS.—For the purposes of bundling 
of contract requirements, benefits described in para-
graph (2) may include the following: 
‘‘(A) Cost savings. 
‘‘(B) Quality improvements. 
‘‘(C) Reduction in acquisition cycle times. 
‘‘(D) Better terms and conditions. 
‘‘(E) Any other benefits. 
‘‘(4) REDUCTION OF COSTS NOT DETERMINA-
TIVE.—For purposes of this subsection: 
‘‘(A) Cost savings shall not include any re-
duction in the use of military interdepartmental 
purchase requests or any similar transfer funds
895 
among Federal agencies for the use of a con-
tract issued by another Federal agency. 
‘‘(B) The reduction of administrative or 
personnel costs alone shall not be a justification 
for bundling of contract requirements unless 
the cost savings are expected to be substantial 
in relation to the dollar value of the procure-
ment requirements to be bundled. 
‘‘(5) LIMITATION ON ACQUISITION STRATEGY.— 
The head of a Federal agency may not carry out an 
acquisition strategy that includes bundled contracts 
valued in excess of the dollar threshold, unless the 
senior procurement executive or, if applicable, Chief 
Acquisition Officer, for the Federal agency, certifies 
to the head of the Federal agency that steps will be 
taken to include small business concerns in the ac-
quisition strategy prior to the implementation of 
such acquisition strategy. 
‘‘(e) STRATEGY SPECIFICATIONS.—If the head of a 
contracting agency determines that an acquisition plan or 
proposed procurement strategy will result in a bundled 
contract, the proposed acquisition plan or procurement 
strategy shall—
896 
‘‘(1) identify specifically the benefits anticipated 
to be derived from the bundling of contract require-
ments; 
‘‘(2) set forth an assessment of the specific im-
pediments to participation by small business con-
cerns as prime contractors that result from the con-
tract bundling and specify actions designed to maxi-
mize small business participation as subcontractors 
(including suppliers) at various tiers under the con-
tract or contracts that are awarded to meet the re-
quirements; and 
‘‘(3) include a specific determination that the 
anticipated measurable benefits of the proposed bun-
dled contract justify its use. 
‘‘(f) CONTRACT TEAMING.—In the case of a solicita-
tion of offers for a bundled contract that is issued by the 
head of an agency, a small-business concern may submit 
an offer that provides for use of a particular team of sub-
contractors for the performance of the contract. The head 
of the agency shall evaluate the offer in the same manner 
as other offers, with due consideration to the capabilities 
of all of the proposed subcontractors. If a small business 
concern teams under this paragraph, it shall not affect 
its status as a small business concern for any other pur-
pose.
897 
‘‘(g) DATABASE, ANALYSIS, AND ANNUAL REPORT 
REGARDING CONTRACT BUNDLING.— 
‘‘(1) DATABASE.—Not later than 180 days 
after the date of the enactment of this subsection, 
the Administrator shall develop and shall thereafter 
maintain a database containing data and informa-
tion regarding— 
‘‘(A) each bundled contract awarded by a 
Federal agency; and 
‘‘(B) each small business concern that has 
been displaced as a prime contractor as a result 
of the award of such a contract. 
‘‘(2) ANALYSIS.—For each bundled contract 
that is to be recompeted, the Administrator shall de-
termine— 
‘‘(A) the amount of savings and benefits 
realized, in comparison with the savings and 
benefits anticipated by the analysis required 
under subsection (d) prior to the contract 
award; and 
‘‘(B) whether such savings and benefits 
will continue to be realized if the contract re-
mains bundled, and whether such savings and 
benefits would be greater if the procurement re-
quirements were divided into separate solicita-
898 
tions suitable for award to small business con-
cerns. 
‘‘(3) ANNUAL
REPORT
ON
CONTRACT
BUN-
DLING.— 
‘‘(A) IN GENERAL.—Not later than 1 year 
after the date of the enactment of this para-
graph, and annually in March thereafter, the 
Administrator shall transmit a report on con-
tract bundling to the Committee on Small Busi-
ness of the House of Representatives and the 
Committee on Small Business and Entrepre-
neurship of the Senate. 
‘‘(B) 
CONTENTS.—Each 
report 
trans-
mitted under subparagraph (A) shall include— 
‘‘(i) data on the number, arranged by 
industrial classification, of small business 
concerns displaced as prime contractors as 
a result of the award of bundled contracts 
by Federal agencies; and 
‘‘(ii) a description of the activities 
with respect to previously bundled con-
tracts of each Federal agency during the 
preceding year, including—