H. R. 4546—147
the operational assessment of fieldable prototypes, and the manage-
ment of spiral development programs.
(e) REPORTING REQUIREMENT.—The Secretary shall submit to
Congress by September 30 of each of 2003 through 2008 a status
report on each research and development program that is a spiral
development program. The report shall contain information on unit
costs that is similar to the information on unit costs under major
defense acquisition programs that is required to be provided to
Congress under chapter 144 of title 10, United States Code, except
that the information on unit costs shall address projected prototype
costs instead of production costs.
(f) APPLICABILITY OF EXISTING LAW.—Nothing in this section
shall be construed to exempt any program of the Department of
Defense from the application of any provision of chapter 144 of
title 10, United States Code, section 139, 181, 2366, 2399, or 2400
of such title, or any requirement under Department of Defense
Directive 5000.1, Department of Defense Instruction 5000.2, or
Chairman of the Joint Chiefs of Staff Instruction 3170.01B in
accordance with the terms of such provision or requirement.
(g) DEFINITIONS.—In this section:
(1) The term ‘‘spiral development program’’, with respect
to a research and development program, means a program
that—
(A) is conducted in discrete phases or blocks, each
of which will result in the development of fieldable proto-
types; and
(B) will not proceed into acquisition until specific
performance parameters, including measurable exit cri-
teria, have been met.
(2) The term ‘‘spiral’’ means one of the discrete phases
or blocks of a spiral development program.
(3) The term ‘‘major defense acquisition program’’ has the
meaning given such term in section 139(a)(2)(B) of title 10,
United States Code.
SEC. 804. IMPROVEMENT OF SOFTWARE ACQUISITION PROCESSES.
(a) ESTABLISHMENT OF PROGRAMS.—(1) The Secretary of each
military department shall establish a program to improve the soft-
ware acquisition processes of that military department.
(2) The head of each Defense Agency that manages a major
defense acquisition program with a substantial software component
shall establish a program to improve the software acquisition proc-
esses of that Defense Agency.
(3) The programs required by this subsection shall be estab-
lished not later than 120 days after the date of the enactment
of this Act.
(b) PROGRAM REQUIREMENTS.—A program to improve software
acquisition processes under this section shall, at a minimum,
include the following:
(1) A documented process for software acquisition planning,
requirements development and management, project manage-
ment and oversight, and risk management.
(2) Efforts to develop appropriate metrics for performance
measurement and continual process improvement.
(3) A process to ensure that key program personnel have
an appropriate level of experience or training in software
acquisition.
H. R. 4546—148
(4) A process to ensure that each military department
and Defense Agency implements and adheres to established
processes and requirements relating to the acquisition of soft-
ware.
(c) DEPARTMENT OF DEFENSE GUIDANCE.—The Assistant Sec-
retary of Defense for Command, Control, Communications, and
Intelligence, in consultation with the Under Secretary of Defense
for Acquisition, Technology, and Logistics, shall—
(1) prescribe uniformly applicable guidance for the adminis-
tration of all of the programs established under subsection
(a) and take such actions as are necessary to ensure that
the military departments and Defense Agencies comply with
the guidance; and
(2) assist the Secretaries of the military departments and
the heads of the Defense Agencies to carry out such programs
effectively by—
(A) ensuring that the criteria applicable to the selection
of sources provides added emphasis on past performance
of potential sources, as well as on the maturity of the
software products offered by the potential sources; and
(B) identifying, and serving as a clearinghouse for
information regarding, best practices in software develop-
ment and acquisition in both the public and private sectors.
(d) DEFINITIONS.—In this section:
(1) The term ‘‘Defense Agency’’ has the meaning given
the term in section 101(a)(11) of title 10, United States Code.
(2) The term ‘‘major defense acquisition program’’ has the
meaning given such term in section 139(a)(2)(B) of title 10,
United States Code.
SEC. 805. PERFORMANCE GOALS FOR PROCURING SERVICES PURSU-
ANT TO MULTIPLE AWARD CONTRACTS.
(a) PERFORMANCE GOALS.—Subsection (a) of section 802 of the
National Defense Authorization Act for Fiscal Year 2002 (Public
Law 107–107; 115 Stat. 1178; 10 U.S.C. 2330 note) is amended
to read as follows:
‘‘(a) GOALS.—(1) It shall be an objective of the Department
of Defense to achieve efficiencies in procurements of services pursu-
ant to multiple award contracts through the use of—
‘‘(A) performance-based services contracting;
‘‘(B) appropriate competition for task orders under services
contracts;
‘‘(C) program review, spending analyses, and improved
management of services contracts.
‘‘(2) In furtherance of such objective, the Department of Defense
shall have the following goals:
‘‘(A) To increase, as a percentage of all of the individual
purchases of services made by or for the Department of Defense
under multiple award contracts for a fiscal year (calculated
on the basis of dollar value), the volume of the individual
purchases of services that are made on a competitive basis
and involve receipt of more than one offer from qualified con-
tractors to a percentage as follows:
‘‘(i) For fiscal year 2003, a percentage not less than
40 percent.
‘‘(ii) For fiscal year 2004, a percentage not less than
50 percent.
H. R. 4546—149
‘‘(iii) For fiscal year 2011, a percentage not less than
75 percent.
‘‘(B) To increase, as a percentage of all of the individual
purchases of services made by or for the Department of Defense
under multiple award contracts for a fiscal year (calculated
on the basis of dollar value), the use of performance-based
purchasing specifying firm fixed prices for the specific tasks
to be performed to a percentage as follows:
‘‘(i) For fiscal year 2003, a percentage not less than
25 percent.
‘‘(ii) For fiscal year 2004, a percentage not less than
35 percent.
‘‘(iii) For fiscal year 2005, a percentage not less than
50 percent.
‘‘(iv) For fiscal year 2011, a percentage not less than
70 percent.
‘‘(3) The Secretary of Defense may adjust any percentage goal
established in paragraph (2) if the Secretary determines in writing
that such a goal is too high and cannot reasonably be achieved.
In the event that the Secretary chooses to adjust such a goal,
the Secretary shall—
‘‘(A) establish a percentage goal that the Secretary deter-
mines would create an appropriate incentive for Department
of Defense components to use competitive procedures or
performance-based services contracting, as the case may be;
and
‘‘(B) submit to the congressional defense committees a
report containing an explanation of the reasons for the Sec-
retary’s determination and a statement of the new goal that
the Secretary has established.’’.
(b) EXTENSION AND REVISION OF REPORTING REQUIREMENT.—
Subsection (b) of such section is amended—
(1) by striking ‘‘March 1, 2006’’ and inserting ‘‘March 1,
2011’’; and
(2) by amending paragraph (5) to read as follows:
‘‘(5) Regarding the individual purchases of services that
were made by or for the Department of Defense under multiple
award contracts in the fiscal year preceding the fiscal year
in which the report is required to be submitted, information
(determined using the data collection system established under
section 2330a of title 10, United States Code) as follows:
‘‘(A) The percentage (calculated on the basis of dollar
value) of such purchases that are purchases that were
made on a competitive basis and involved receipt of more
than one offer from qualified contractors.
‘‘(B) The percentage (calculated on the basis of dollar
value) of such purchases that are performance-based pur-
chases specifying firm fixed prices for the specific tasks
to be performed.’’.
(c) DEFINITIONS.—Such section is further amended by adding
at the end the following new subsection:
‘‘(c) DEFINITIONS.—(1) In this section, the terms ‘individual
purchase’ and ‘multiple award contract’ have the meanings given
such terms in section 803(c) of this Act.
‘‘(2) For the purposes of this section, an individual purchase
of services is made on a competitive basis only if it is made pursuant
H. R. 4546—150
to procedures described in paragraphs (2), (3), and (4) of section
803(b) of this Act.’’.
(d) CONFORMING AMENDMENT.—The heading for such section
is amended by striking ‘‘SAVINGS GOALS’’ and inserting ‘‘PERFORM-
ANCE GOALS’’.
SEC. 806. RAPID ACQUISITION AND DEPLOYMENT PROCEDURES.
(a) REQUIREMENT TO ESTABLISH PROCEDURES.—Not later than
180 days after the date of the enactment of this Act, the Secretary
of Defense shall prescribe procedures for the rapid acquisition and
deployment of items that are—
(1) currently under development by the Department of
Defense or available from the commercial sector; and
(2) urgently needed to react to an enemy threat or to
respond to significant and urgent safety situations.
(b) ISSUES TO BE ADDRESSED.—The procedures prescribed
under subsection (a) shall include the following:
(1) A process for streamlined communications between the
Chairman of the Joint Chiefs of Staff, the acquisition commu-
nity, and the research and development community, including—
(A) a process for the commanders of the combatant
commands and the Joint Chiefs of Staff to communicate
their needs to the acquisition community and the research
and development community; and
(B) a process for the acquisition community and the
research and development community to propose items that
meet the needs communicated by the combatant commands
and the Joint Chiefs of Staff.
(2) Procedures for demonstrating, rapidly acquiring, and
deploying items proposed pursuant to paragraph (1)(B),
including—
(A) a process for demonstrating performance and evalu-
ating for current operational purposes the existing capa-
bility of an item;
(B) a process for developing an acquisition and funding
strategy for the deployment of an item; and
(C) a process for making deployment determinations
based on information obtained pursuant to subparagraphs
(A) and (B).
(c) TESTING REQUIREMENT.—(1) The process for demonstrating
performance and evaluating for current operational purposes the
existing capability of an item prescribed under subsection (b)(2)(A)
shall include—
(A) an operational assessment in accordance with proce-
dures prescribed by the Director of Operational Test and
Evaluation; and
(B) a requirement to provide information about any defi-
ciency of the item in meeting the original requirements for
the item (as stated in an operational requirements document
or similar document) to the deployment decisionmaking
authority.
(2) The process may not include a requirement for any defi-
ciency of an item to be the determining factor in deciding whether
to deploy the item.
(d) LIMITATION.—The quantity of items of a system procured
using the procedures prescribed pursuant to this section may not
exceed the number established for low-rate initial production for
H. R. 4546—151
the system. Any such items shall be counted for purposes of the
number of items of the system that may be procured through
low-rate initial production.
SEC. 807. QUICK-REACTION SPECIAL PROJECTS ACQUISITION TEAM.
(a) ESTABLISHMENT.—The Under Secretary of Defense for
Acquisition, Technology, and Logistics shall establish a team of
highly qualified acquisition professionals who shall be available
to advise the Under Secretary on actions that can be taken to
expedite the acquisition of urgently needed systems.
(b) DUTIES.—The issues on which the team may provide advice
shall include the following:
(1) Industrial base issues, including the limited availability
of suppliers.
(2) Technology development and technology transition
issues.
(3) Issues of acquisition policy, including the length of
the acquisition cycle.
(4) Issues of testing policy and ensuring that weapon sys-
tems perform properly in combat situations.
(5) Issues of procurement policy, including the impact of
socio-economic requirements.
(6) Issues relating to compliance with environmental
requirements.
Subtitle B—Amendments to General Con-
tracting Authorities, Procedures, and
Limitations
SEC. 811. LIMITATION PERIOD FOR TASK AND DELIVERY ORDER CON-
TRACTS.
(a) LIMITATION PERIOD.—Section 2306c of title 10, United States
Code, is amended by adding at the end the following new subsection:
‘‘(g) LIMITATION PERIOD FOR TASK AND DELIVERY ORDER CON-
TRACTS.—(1) The authority and restrictions of this section, including
the authority to enter into contracts for periods of not more than
five years, shall apply with respect to task order and delivery
order contracts entered into under the authority of section 2304a,
2304b, or 2304c of this title.
‘‘(2) The regulations implementing this subsection shall estab-
lish a preference that, to the maximum extent practicable, multi-
year requirements for task order and delivery order contracts be
met with separate awards to two or more sources under the
authority of section 2304a(d)(1)(B) of this title.’’.
(b) EFFECTIVE DATE.—Subsection (g) of section 2306c of title
10, United States Code, as added by subsection (a), shall apply
to all task order and delivery order contracts entered into on or
after the date of the enactment of this Act.
(c) COMPTROLLER GENERAL REPORT.—Not later than March
15, 2003, the Comptroller General shall submit to the Committee
on Armed Services of the Senate and the Committee on Armed
Services of the House of Representatives a report on the contract
periods (including any options or extensions) for all single and
multiple contract awards entered into under section 2304a(d) of
H. R. 4546—152
title 10, United States Code, before the effective date in subsection
(b).
SEC. 812. ONE-YEAR EXTENSION OF PROGRAM APPLYING SIMPLIFIED
PROCEDURES 
TO 
CERTAIN 
COMMERCIAL 
ITEMS;
REPORT.
(a) EXTENSION
OF
PILOT
PROGRAM.—Section 4202 of the
Clinger-Cohen Act of 1996 (divisions D and E of Public Law 104–
106; 10 U.S.C. 2304 note) is amended in subsection (e) by striking
‘‘January 1, 2003’’ and inserting ‘‘January 1, 2004’’.
(b) REPORT REQUIRED.—(1) Not later than March 15, 2003,
the Comptroller General shall submit to Congress a report on
the authority to issue solicitations for purchases of commercial
items in excess of the simplified acquisition threshold pursuant
to the special simplified procedures authorized by section 2304(g)(1)
of title 10, United States Code, and section 31(a) of the Office
of Federal Procurement Policy Act (41 U.S.C. 427(a)).
(2) The report required by paragraph (1) shall address, at
a minimum—
(A) the extent to which such authority has been used
by the Secretary of Defense;
(B) the benefits realized by the Department of Defense
through the use of such authority;
(C) the impact of the use of such authority on competition
for contracts with the Department of Defense; and
(D) any recommendations of the Comptroller General for
the continuation or modification of such authority.
SEC. 813. EXTENSION AND IMPROVEMENT OF PERSONNEL DEM-
ONSTRATION POLICIES AND PROCEDURES APPLICABLE
TO THE CIVILIAN ACQUISITION WORKFORCE.
(a) PLAN REQUIRED.—(1) The Secretary of Defense shall develop
a plan for improving the personnel management policies and proce-
dures applicable to the Department of Defense civilian acquisition
workforce based on the results of the demonstration project
described in section 4308 of the Clinger–Cohen Act of 1996 (divisions
D and E of Public Law 104–106; 10 U.S.C. 1701 note).
(2) Not later than February 15, 2003, the Secretary shall submit
to Congress the plan required under paragraph (1) and a report
on the plan, including any recommendations for legislative action
necessary to implement the plan.
(b) EXTENSION OF DEMONSTRATION PROJECT AUTHORITY.—Sec-
tion 4308 of the Clinger–Cohen Act of 1996 (divisions D and E
of Public Law 104–106; 10 U.S.C. 1701 note) is amended—
(1) in subsection (b)(2)(C), by striking ‘‘subsection (d)(1)(A)’’
and inserting ‘‘subsection (d)(1)’’;
(2) by amending subparagraph (B) of subsection (b)(3) to
read as follows:
‘‘(B) commences before October 1, 2007.’’; and
(3) by adding at the end the following new subsection:
‘‘(e) TERMINATION OF AUTHORITY.—The authority to conduct
a demonstration program under this section shall terminate on
September 30, 2012.’’.
H. R. 4546—153
SEC. 814. PAST PERFORMANCE GIVEN SIGNIFICANT WEIGHT IN
RENEWAL OF PROCUREMENT TECHNICAL ASSISTANCE
COOPERATIVE AGREEMENTS.
Section 2413 of title 10, United States Code, is amended by
adding at the end the following new subsection:
‘‘(d) In conducting a competition for the award of a cooperative
agreement under subsection (a), and in determining the level of
funding to provide under an agreement under subsection (b), the
Secretary shall give significant weight to successful past perform-
ance of eligible entities under a cooperative agreement under this
section.’’.
SEC. 815. INCREASED MAXIMUM AMOUNT OF ASSISTANCE FOR TRIBAL
ORGANIZATIONS 
OR 
ECONOMIC 
ENTERPRISES 
CAR-
RYING OUT PROCUREMENT TECHNICAL ASSISTANCE
PROGRAMS IN TWO OR MORE SERVICE AREAS.
Section 2414(a)(4) of title 10, United States Code, is amended
by striking ‘‘$300,000’’ and inserting ‘‘$600,000’’.
SEC. 816. EXTENSION OF CONTRACT GOAL FOR SMALL DISADVAN-
TAGED BUSINESSES AND CERTAIN INSTITUTIONS OF
HIGHER EDUCATION.
Section 2323(k) of title 10, United States Code, is amended
by striking ‘‘2003’’ both places it appears and inserting ‘‘2006’’.
SEC. 817. GRANTS OF EXCEPTIONS TO COST OR PRICING DATA CER-
TIFICATION REQUIREMENTS AND WAIVERS OF COST
ACCOUNTING STANDARDS.
(a) 
GUIDANCE
FOR
EXCEPTIONS
IN
EXCEPTIONAL
CIR-
CUMSTANCES.—Not later than 60 days after the date of the enact-
ment of this Act, the Secretary of Defense shall issue guidance
on the circumstances under which it is appropriate to grant an
exceptional case exception or waiver with respect to certified cost
and pricing data and cost accounting standards.
(b) DETERMINATION REQUIRED FOR EXCEPTIONAL CASE EXCEP-
TION OR WAIVER.—The guidance shall, at a minimum, include a
limitation that a grant of an exceptional case exception or waiver
is appropriate with respect to a contract, subcontract, or (in the
case of submission of certified cost and pricing data) modification
only upon a determination that—
(1) the property or services cannot reasonably be obtained
under the contract, subcontract, or modification, as the case
may be, without the grant of the exception or waiver;
(2) the price can be determined to be fair and reasonable
without the submission of certified cost and pricing data or
the application of cost accounting standards, as the case may
be; and
(3) there are demonstrated benefits to granting the excep-
tion or waiver.
(c) APPLICABILITY
OF NEW GUIDANCE.—The guidance issued
under subsection (a) shall apply to each exceptional case exception
or waiver that is granted on or after the date on which the guidance
is issued.
(d) ANNUAL REPORT ON BOTH COMMERCIAL ITEM AND EXCEP-
TIONAL CASE EXCEPTIONS
AND WAIVERS WITH PRICE
OR VALUE
GREATER THAN $15,000,000.—(1) The Secretary of Defense shall
transmit to the congressional defense committees promptly after
the end of each fiscal year a report on commercial item exceptions,
H. R. 4546—154
and exceptional case exceptions and waivers, described in paragraph
(2) that were granted during that fiscal year.
(2) The report for a fiscal year shall include—
(A) with respect to any commercial item exception granted
in the case of a contract, subcontract, or contract or subcontract
modification that is expected to have a price of $15,000,000
or more, an explanation of the basis for the determination
that the products or services to be purchased are commercial
items, including an identification of the specific steps taken
to ensure price reasonableness; and
(B) with respect to any exceptional case exception or waiver
granted in the case of a contract or subcontract that is expected
to have a value of $15,000,000 or more, an explanation of
the basis for the determination described in subsection (b),
including an identification of the specific steps taken to ensure
that the price was fair and reasonable.
(e) DEFINITIONS.—In this section:
(1) The term ‘‘exceptional case exception or waiver’’ means
either of the following:
(A) An exception pursuant to section 2306a(b)(1)(C)
of title 10, United States Code, relating to submission
of certified cost and pricing data.
(B) A waiver pursuant to section 26(f)(5)(B) of the
Office of Federal Procurement Policy Act (41 U.S.C.
422(f)(5)(B)), relating to the applicability of cost accounting
standards to contracts and subcontracts.
(2) The term ‘‘commercial item exception’’ means an excep-
tion pursuant to section 2306a(b)(1)(B) of title 10, United States
Code, relating to submission of certified cost and pricing data.
SEC. 818. TIMING OF CERTIFICATION IN CONNECTION WITH WAIVER
OF SURVIVABILITY AND LETHALITY TESTING REQUIRE-
MENTS.
(a) CERTIFICATION FOR EXPEDITED PROGRAMS.—Paragraph (1)
of subsection (c) of section 2366 of title 10, United States Code,
is amended to read as follows:
‘‘(1) The Secretary of Defense may waive the application of
the survivability and lethality tests of this section to a covered
system, munitions program, missile program, or covered product
improvement program if the Secretary determines that live-fire
testing of such system or program would be unreasonably expensive
and impractical and submits a certification of that determination
to Congress—
‘‘(A) before Milestone B approval for the system or program;
or
‘‘(B) in the case of a system or program initiated at—
‘‘(i) Milestone B, as soon as is practicable after the
Milestone B approval; or
‘‘(ii) Milestone C, as soon as is practicable after the
Milestone C approval.’’.
(b) DEFINITIONS.—Subsection (e) of such section is amended
by adding at the end the following new paragraphs:
‘‘(8) The term ‘Milestone B approval’ means a decision
to enter into system development and demonstration pursuant
to guidance prescribed by the Secretary of Defense for the
management of Department of Defense acquisition programs.
H. R. 4546—155
‘‘(9) The term ‘Milestone C approval’ means a decision
to enter into production and deployment pursuant to guidance
prescribed by the Secretary of Defense for the management
of Department of Defense acquisition programs.’’.
SEC. 819. CONTRACTING WITH FEDERAL PRISON INDUSTRIES.
(a) ASSURANCE OF BEST VALUE FOR NATIONAL DEFENSE.—(1)
Section 2410n of title 10, United States Code, is amended—
(A) in subsection (a)—
(i) by amending the heading to read as follows:
‘‘MARKET RESEARCH.—’’; and
(ii) by striking ‘‘comparable in price, quality, and time
of delivery to products available from the private sector’’
and inserting ‘‘comparable to products available from the
private sector that best meet the Department’s needs in
terms of price, quality, and time of delivery’’;
(B) by striking subsection (b) and inserting the following:
‘‘(b) COMPETITION REQUIREMENT.—If the Secretary determines
that a Federal Prison Industries product is not comparable in
price, quality, or time of delivery to products available from the
private sector that best meet the Department’s needs in terms
of price, quality, and time of delivery, the Secretary shall use
competitive procedures for the procurement of the product or shall
make an individual purchase under a multiple award contract.
In conducting such a compeititon or making such a purchase, the
Secretary shall consider a timely offer from Federal Prison Indus-
tries.’’; and
(C) by adding at the end the following new subsections:
‘‘(c) IMPLEMENTATION BY SECRETARY OF DEFENSE.—The Sec-
retary of Defense shall ensure that—
‘‘(1) the Department of Defense does not purchase a Federal
Prison Industries product or service unless a contracting officer
of the Department determines that the product or service is
comparable to products or services available from the private
sector that best meet the Department’s needs in terms of price,
quality, and time of delivery; and
‘‘(2) Federal Prison Industries performs its contractual
obligations to the same extent as any other contractor for
the Department of Defense.
‘‘(d) MARKET
RESEARCH
DETERMINATION
NOT
SUBJECT
TO
REVIEW.—A determination by a contracting officer regarding
whether a product or service offered by Federal Prison Industries
is comparable to products or services available from the private
sector that best meet the Department’s needs in terms of price,
quality, and time of delivery shall not be subject to review pursuant
to section 4124(b) of title 18.
‘‘(e) PERFORMANCE AS A SUBCONTRACTOR.—(1) A contractor or
potential contractor of the Department of Defense may not be
required to use Federal Prison Industries as a subcontractor or
supplier of products or provider of services for the performance
of a Department of Defense contract by any means, including means
such as—
‘‘(A) a contract solicitation provision requiring a contractor
to offer to make use of products or services of Federal Prison
Industries in the performance of the contract;