‘‘(iii) for which a notice of lien has 
been filed in public records; and 
‘‘(B) does not include any Federal tax li-
ability— 
‘‘(i) being paid in a timely manner 
under an offer-in-compromise or install-
ment agreement; 
‘‘(ii) with respect to which collection 
due process proceedings are not completed; 
or 
‘‘(iii) with respect to which collection 
due process proceedings are completed and 
no further payment is required. 
‘‘(5) SIMPLIFIED
ACQUISITION
THRESHOLD.— 
The term ‘simplified acquisition threshold’ has the 
meaning given that term in section 4(11) of the Office 
of Federal Procurement Policy Act (41 U.S.C. 
403(11)). 
‘‘(e) REGULATIONS.—The Administrator for Federal 
Procurement Policy, in consultation with the Secretary of 
the Treasury, shall promulgate regulations that— 
‘‘(1) treat corporations and partnerships as hav-
ing a seriously delinquent tax debt if such corpora-
tion or partnership is controlled (directly or indi-
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rectly) by persons who have a seriously delinquent tax 
debt; 
‘‘(2) provide for the proper application of sub-
sections (a)(2) and (b)(2) in the case of corporations 
and partnerships; and 
‘‘(3) provide for the proper application of sub-
section (a) to first-tier subcontractors that are identi-
fied in a bid or proposal and are a significant part 
of a bid or proposal team.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 37 of such title is 
amended by adding after the item relating to section 
3720E the following new item: 
‘‘3720F. Contractor and grantee disclosure of delinquent Federal tax debts.’’. 
(b) REVISION
OF FEDERAL ACQUISITION REGULA-
TION.—Not later than 90 days after the final promulgation 
of regulations under section 3720F(e) of title 31, United 
States Code, as added by subsection (a), the Federal Acqui-
sition Regulation shall be revised to incorporate the require-
ments of section 3720F of such title. 
SEC. 404. INDEPENDENCE OF CONTRACT AUDITS AND BUSI-
NESS SYSTEM REVIEWS. 
(a) DEFENSE CONTRACT AUDIT AGENCY GENERAL 
COUNSEL.— 
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(1) IN GENERAL.—Subchapter II of chapter 8 of 
title 10, United States Code, is amended by adding 
at the end the following new section: 
‘‘§ 204. Defense Contract Audit Agency general counsel 
‘‘(a) GENERAL COUNSEL.—The Director of the Defense 
Contract Audit Agency shall appoint a General Counsel of 
the Defense Contract Audit Agency. 
‘‘(b) DUTIES.—(1) The General Counsel shall perform 
such functions as the Director may prescribe and shall serve 
at the discretion of the Director. 
‘‘(2) Notwithstanding section 140(b) of this title, the 
General Counsel shall be the chief legal officer of the Defense 
Contract Audit Agency. 
‘‘(3) The Defense Contract Audit Agency shall be the 
exclusive legal client of the General Counsel. 
‘‘(c) OFFICE OF THE GENERAL COUNSEL.—There is 
established an Office of the General Counsel within the De-
fense Contract Audit Agency. The Director may appoint to 
the Office to serve as staff of the General Counsel such legal 
counsel as the Director determines is appropriate.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of subchapter II of chapter 8 
of such title is amended by adding at the end the fol-
lowing new item: 
‘‘204. Defense Contract Audit Agency general counsel.’’. 
(b) CRITERIA FOR BUSINESS SYSTEM REVIEWS.— 
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(1) IN
GENERAL.—Chapter 131 of title 10, 
United States Code, is amended by inserting after sec-
tion 2222 the following new section: 
‘‘§ 2222a. Criteria for business system reviews 
‘‘(a) CRITERIA FOR BUSINESS SYSTEM REVIEWS.— 
The Secretary of Defense shall ensure that any contractor 
business system review carried out by a military depart-
ment, a Defense Agency, or a Department of Defense Field 
Activity— 
‘‘(1) complies with generally accepted govern-
ment auditing standards issued by the Comptroller 
General; 
‘‘(2) is performed by an audit team that does not 
engage in any other official activity (audit-related or 
otherwise) involving the contractor concerned; 
‘‘(3) is performed in a time and manner con-
sistent with a documented assessment of the risk to 
the Federal Government; and 
‘‘(4) involves testing on a representative sample 
of transactions sufficient to fully examine the integ-
rity of the contractor business system concerned. 
‘‘(b) CONTRACTOR BUSINESS SYSTEM REVIEW DE-
FINED.—In this section, the term ‘contractor business sys-
tem review’ means an audit of policies, procedures, and in-
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