SEC. 204. CRITICAL COST GROWTH IN MAJOR DEFENSE AC-
QUISITION PROGRAMS. 
(a) AUTHORIZED ACTIONS IN EVENT OF CRITICAL 
COST GROWTH.—Section 2433(e)(2) of title 10, United 
States Code, is amended— 
(1) by redesignating subparagraph (C) as sub-
paragraph (D); 
(2) by striking subparagraph (B); and 
(3) by inserting after subparagraph (A) the fol-
lowing new subparagraphs (B) and (C): 
‘‘(B) terminate such acquisition program, un-
less the Secretary determines that the continuation 
of such program is essential to the national security 
of the United States and submits a written certifi-
cation in accordance with subparagraph (C)(i) ac-
companied by a report setting forth the assessment 
carried out pursuant to subparagraph (A) and the 
basis for each determination made in accordance 
with clauses (I) through (IV) of subparagraph 
(C)(i), together with supporting documentation; 
‘‘(C) if the program is not terminated— 
‘‘(i) submit to Congress, before the end of 
the 60-day period beginning on the day the Se-
lected Acquisition Report containing the infor-
mation described in subsection (g) is required 
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to be submitted under section 2432(f) of this 
title, a written certification stating that— 
‘‘(I) such acquisition program is es-
sential to national security; 
‘‘(II) there are no alternatives to such 
acquisition program which will provide 
equal or greater capability to meet a joint 
military requirement (as that term is de-
fined in section 181(g)(1) of this title) at 
less cost; 
‘‘(III) the new estimates of the pro-
gram acquisition unit cost or procurement 
unit cost were arrived at in accordance 
with the requirements of section 139d of 
this title and are reasonable; and 
‘‘(IV) the management structure for 
the acquisition program is adequate to 
manage and control program acquisition 
unit cost or procurement unit cost; 
‘‘(ii) rescind the most recent Milestone ap-
proval (or Key Decision Point approval in the 
case of a space program) for such program and 
withdraw any associated certification under sec-
tion 2366a or 2366b of this title; and 
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‘‘(iii) require a new Milestone approval (or 
Key Decision Point approval in the case of a 
space program) for such program before enter-
ing into a new contract, exercising an option 
under an existing contract, or otherwise extend-
ing the scope of an existing contract under such 
program; and’’. 
(b) TOTAL EXPENDITURE FOR PROCUREMENT RE-
SULTING IN TREATMENT AS MDAP.—Section 2430(a)(2) 
of such title is amended by inserting ‘‘, including all 
planned increments or spirals,’’ after ‘‘an eventual total 
expenditure for procurement’’. 
SEC. 205. ORGANIZATIONAL CONFLICTS OF INTEREST IN 
THE ACQUISITION OF MAJOR WEAPON SYS-
TEMS. 
(a) REVISED REGULATIONS REQUIRED.—Not later 
than 180 days after the date of the enactment of this Act, 
the Under Secretary of Defense for Acquisition, Tech-
nology, and Logistics shall revise the Defense Supplement 
to the Federal Acquisition Regulation to address organiza-
tional conflicts of interest by contractors in the acquisition 
of major weapon systems. 
(b) ELEMENTS.—The revised regulations required by 
subsection (a) shall, at a minimum— 
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(1) ensure that the Department of Defense re-
ceives advice on systems architecture and systems 
engineering matters with respect to major weapon 
systems from federally funded research and develop-
ment centers or other sources independent of the 
prime contractor; 
(2) require that a contract for the performance 
of systems engineering and technical assistance 
(SETA) functions with regard to a major weapon 
system contains a provision prohibiting the con-
tractor or any affiliate of the contractor from having 
a direct financial interest in the development or con-
struction of the weapon system or any component 
thereof; and 
(3) provide for fair and objective ‘‘make-buy’’ 
decisions by the prime contractor on a major weapon 
system by— 
(A) requiring prime contractors to give full 
and fair consideration to qualified sources other 
than the prime contractor for the development 
or construction of major subsystems and com-
ponents of the weapon system; 
(B) providing for government oversight of 
the process by which prime contractors consider 
such sources and determine whether to conduct 
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such development or construction in-house or 
through a subcontract; 
(C) where appropriate, requiring that pro-
gram managers, rather than prime contractors, 
make the determination whether such develop-
ment or construction should be conducted in- 
house or through a subcontract; and 
(D) providing for the consideration of 
prime contractors ‘‘make-buy’’ decisions in past 
performance evaluations. 
(c) ORGANIZATIONAL CONFLICT OF INTEREST RE-
VIEW BOARD.— 
(1) ESTABLISHMENT
REQUIRED.—Not later 
than 90 days after the date of the enactment of this 
Act, the Secretary of Defense shall establish within 
the Department of Defense a board to be known as 
the ‘‘Organizational Conflict of Interest Review 
Board’’. 
(2) DUTIES.—The Board shall have the fol-
lowing duties: 
(A) To advise the Under Secretary of De-
fense for Acquisition, Technology, and Logistics 
on policies relating to organizational conflicts of 
interest in the acquisition of major weapon sys-
tems. 
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(B) To advise program managers on steps 
to comply with the requirements of the revised 
regulations required by this section and to ad-
dress organizational conflicts of interest in the 
acquisition of major weapon systems. 
(C) To advise appropriate officials of the 
Department on organizational conflicts of inter-
est arising in proposed mergers of defense con-
tractors. 
(d) MAJOR WEAPON SYSTEM DEFINED.—In this sec-
tion, the term ‘‘major weapon system’’ has the meaning 
given that term in section 2379(d) of title 10, United 
States Code. 
SEC. 206. AWARDS FOR DEPARTMENT OF DEFENSE PER-
SONNEL FOR EXCELLENCE IN THE ACQUISI-
TION OF PRODUCTS AND SERVICES. 
(a) IN GENERAL.—Not later than 180 days after the 
date of the enactment of this Act, the Secretary of Defense 
shall commence carrying out a program to recognize excel-
lent performance by individuals and teams of members of 
the Armed Forces and civilian personnel of the Depart-
ment of Defense in the acquisition of products and serv-
ices for the Department of Defense. 
(b) ELEMENTS.—The program required by sub-
section (a) shall include the following: 
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(1) Procedures for the nomination by the per-
sonnel of the military departments and the Defense 
Agencies of individuals and teams of members of the 
Armed Forces and civilian personnel of the Depart-
ment of Defense for eligibility for recognition under 
the program. 
(2) Procedures for the evaluation of nomina-
tions for recognition under the program by one or 
more panels of individuals from the government, 
academia, and the private sector who have such ex-
pertise, and are appointed in such manner, as the 
Secretary shall establish for purposes of the pro-
gram. 
(c) AWARD OF CASH BONUSES.—As part of the pro-
gram required by subsection (a), the Secretary may award 
to any individual recognized pursuant to the program a 
cash bonus authorized by any other provision of law to 
the extent that the performance of such individual so rec-
ognized warrants the award of such bonus under such pro-
vision of law. 
Æ 
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