H. R. 1588—214
(2) Section 724 (10 U.S.C. 1092 note) is amended by striking
subsection (e).
(3) Section 1039 (10 U.S.C. 113 note) is amended by striking
subsection (b).
(i) MILITARY CONSTRUCTION APPROPRIATIONS ACT, 2001.—Sec-
tion 125 of the Military Construction Appropriations Act, 2001
(division A of Public Law 106–246; 114 Stat. 517), is repealed.
(j) DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2002.—Sec-
tion 8009 of the Department of Defense Appropriations Act, 2002
(division A of Public Law 107–117; 115 Stat. 2249; 10 U.S.C. 401
note), is amended by striking ‘‘, and these obligations shall be
reported to the Congress’’.
SEC. 1032. PLAN FOR PROMPT GLOBAL STRIKE CAPABILITY.
(a) INTEGRATED PLAN
FOR PROMPT GLOBAL STRIKE CAPA-
BILITY.—The Secretary of Defense shall establish an integrated
plan for developing, deploying, and sustaining a prompt global
strike capability in the Armed Forces. The Secretary shall update
the plan annually.
(b) ANNUAL REPORTS.—(1) Not later than April 1 of each of
2004, 2005, and 2006, the Secretary shall submit to the congres-
sional defense committees a report on the plan established under
subsection (a).
(2) Each report under paragraph (1) shall include the following:
(A) A description and assessment of the targets against
which long-range strike assets might be directed and the condi-
tions under which those assets might be used.
(B) The role of, and plans for ensuring, sustainment and
modernization of current long-range strike assets, including
bombers, intercontinental ballistic missiles, and submarine-
launched ballistic missiles.
(C) A description of the capabilities desired for advanced
long-range strike assets and plans to achieve those capabilities.
(D) A description of the capabilities desired for advanced
conventional munitions and the plans to achieve those capabili-
ties.
(E) An assessment of advanced nuclear concepts that could
contribute to the prompt global strike mission.
(F) An assessment of the command, control, and commu-
nications capabilities necessary to support prompt global strike
capabilities.
(G) An assessment of intelligence, surveillance, and recon-
naissance capabilities necessary to support prompt global strike
capabilities.
(H) A description of how prompt global strike capabilities
are to be integrated with theater strike capabilities.
(I) An estimated schedule for achieving the desired prompt
global strike capabilities.
(J) The estimated cost of achieving the desired prompt
global strike capabilities.
(K) A description of ongoing and future studies necessary
for updating the plan appropriately.
SEC. 1033. ANNUAL REPORT CONCERNING DISMANTLING OF STRA-
TEGIC NUCLEAR WARHEADS.
(a) ANNUAL REPORT.—Concurrent with the submission of the
President’s budget request to Congress each year, the Director
of Central Intelligence shall submit to the committees specified
H. R. 1588—215
in subsection (e) a report concerning dismantlement of Russian
strategic nuclear warheads under the Moscow Treaty. Each such
report shall discuss nuclear weapons dismantled by Russia during
the prior fiscal year and the Director’s projections for nuclear
weapons to be dismantled by Russia during the current fiscal year
and the fiscal year covered by the budget.
(b) CLASSIFICATION.—The annual report under this section shall
be transmitted in an unclassified form when possible and classified
form as necessary.
(c) TERMINATION OF REPORT REQUIREMENT.—The requirement
to submit an annual report under this section terminates when
the Moscow Treaty is no longer in effect.
(d) MOSCOW TREATY DEFINED.—For purposes of this section,
the term ‘‘Moscow Treaty’’ means the Treaty Between the United
States of America and the Russian Federation on Strategic Offen-
sive Reductions, done at Moscow on May 24, 2002.
(e) COMMITTEES SPECIFIED.—The committees to which annual
reports are to be submitted under this section are the following:
(1) The Committee on Armed Services, the Select Com-
mittee on Intelligence, and the Committee on Foreign Relations
of the Senate.
(2) The Committee on Armed Services, the Permanent
Select Committee on Intelligence, and the Committee on Inter-
national Relations of the House of Representatives.
SEC. 1034. REPORT ON USE OF UNMANNED AERIAL VEHICLES FOR
SUPPORT OF HOMELAND SECURITY MISSIONS.
(a) REQUIREMENT FOR REPORT.—Not later than April 1, 2004,
the President shall submit to Congress a report on the potential
uses of unmanned aerial vehicles for support of the performance
of homeland security missions.
(b) CONTENT.—The report shall, at a minimum, include the
following matters:
(1) An assessment of the potential for using unmanned
aerial vehicles for monitoring activities in remote areas along
the northern and southern borders of the United States.
(2) An assessment of the potential for using long-endurance,
land-based unmanned aerial vehicles for supporting the Coast
Guard in the performance of its—
(A) homeland security missions;
(B) drug interdiction missions; and
(C) other maritime missions along the approximately
95,000 miles of inland waterways in the United States.
(3) An assessment of the potential for using unmanned
aerial vehicles for monitoring the safety and integrity of critical
infrastructure within the territory of the United States,
including the following:
(A) Oil and gas pipelines.
(B) Long-distance power transmission lines.
(C) Hydroelectric and nuclear power plants.
(D) Dams and drinking water utilities.
(4) An assessment of the potential for using unmanned
aerial vehicles for monitoring the transportation of hazardous
cargo.
(5) A discussion of the safety issues involved in—
(A) the use of unmanned aerial vehicles by agencies
other than the Department of Defense; and
H. R. 1588—216
(B) the operation of unmanned aerial vehicles over
populated areas of the United States.
(6) A discussion of—
(A) the effects on privacy and civil liberties that could
result from the monitoring uses of unmanned aerial
vehicles operated over the territory of the United States;
and
(B) any restrictions on the domestic use of unmanned
aerial vehicles that should be imposed, or any other actions
that should be taken, to prevent any adverse effect of
such a use of unmanned aerial vehicles on privacy or
civil liberties.
(7) A discussion of what, if any, legislation and organiza-
tional changes may be necessary to accommodate the use of
unmanned aerial vehicles of the Department of Defense in
support of the performance of homeland security missions,
including any amendment of section 1385 of title 18, United
States Code (popularly referred to as the ‘‘Posse Comitatus
Act’’).
(8) An evaluation of the capabilities of manufacturers of
unmanned aerial vehicles to produce such vehicles at higher
rates if necessary to meet any increased requirements for home-
land security and homeland defense missions.
(c) REFERRAL TO COMMITTEES.—The report under subsection
(a) shall—
(1) upon receipt in the Senate, be referred to the Committee
on Armed Services of the Senate and other committees, as
appropriate; and
(2) upon receipt in the House of Representatives, be
referred to the Committee on Armed Services of the House
of Representatives and other committees, as appropriate.
Subtitle E—Codifications, Definitions, and Technical
Amendments
SEC. 1041. CODIFICATION AND REVISION OF DEFENSE COUNTERINTEL-
LIGENCE POLYGRAPH PROGRAM AUTHORITY.
(a) CODIFICATION.—(1) Chapter 80 of title 10, United States
Code, is amended by inserting after section 1564 the following
new section:
‘‘§ 1564a. Counterintelligence polygraph program
‘‘(a) AUTHORITY FOR PROGRAM.—The Secretary of Defense may
carry out a program for the administration of counterintelligence
polygraph examinations to persons described in subsection (b). The
program shall be based on Department of Defense Directive 5210.48,
dated December 24, 1984.
‘‘(b) PERSONS COVERED.—Except as provided in subsection (c),
the following persons whose duties involve access to information
that has been classified at the level of top secret or designated
as being within a special access program under section 4.4(a) of
Executive Order 12958 (or a successor Executive order) are subject
to this section:
‘‘(1) Military and civilian personnel of the Department of
Defense.
‘‘(2) Personnel of defense contractors.
H. R. 1588—217
‘‘(3) A person assigned or detailed to the Department of
Defense.
‘‘(4) An applicant for a position in the Department of
Defense.
‘‘(c) EXCEPTIONS FROM COVERAGE FOR CERTAIN INTELLIGENCE
AGENCIES
AND FUNCTIONS.—This section does not apply to the
following persons:
‘‘(1) A person assigned or detailed to the Central Intel-
ligence Agency or to an expert or consultant under a contract
with the Central Intelligence Agency.
‘‘(2) A person who is—
‘‘(A) employed by or assigned or detailed to the
National Security Agency;
‘‘(B) an expert or consultant under contract to the
National Security Agency;
‘‘(C) an employee of a contractor of the National Secu-
rity Agency; or
‘‘(D) a person applying for a position in the National
Security Agency.
‘‘(3) A person assigned to a space where sensitive cryp-
tographic information is produced, processed, or stored.
‘‘(4) A person employed by, or assigned or detailed to,
an office within the Department of Defense for the collection
of specialized national foreign intelligence through reconnais-
sance programs or a contractor of such an office.
‘‘(d) OVERSIGHT.—(1) The Secretary shall establish a process
to monitor responsible and effective application of polygraph
examinations within the Department of Defense.
‘‘(2) The Secretary shall make information on the use of poly-
graphs within the Department of Defense available to the congres-
sional defense committees.
‘‘(e) POLYGRAPH RESEARCH PROGRAM.—The Secretary shall
carry out a continuing research program to support the polygraph
examination activities of the Department of Defense. The program
shall include—
‘‘(1) an on-going evaluation of the validity of polygraph
techniques used by the Department;
‘‘(2) research on polygraph countermeasures and anti-
countermeasures; and
‘‘(3) developmental research on polygraph techniques,
instrumentation, and analytic methods.’’.
(2) The table of sections at the beginning of such chapter
is amended by inserting after the item relating to section 1564
the following new item:
‘‘1564a. Counterintelligence polygraph program.’’.
(b) CONFORMING REPEAL.—Section 1121 of the National Defense
Authorization Act for Fiscal Years 1988 and 1989 (10 U.S.C. 113
note), is repealed.
SEC. 1042. GENERAL DEFINITIONS APPLICABLE TO FACILITIES AND
OPERATIONS OF DEPARTMENT OF DEFENSE.
(a) GENERAL DEFINITIONS APPLICABLE TO FACILITIES AND OPER-
ATIONS.—Section 101 of title 10, United States Code, is amended—
(1) by redesignating subsections (e) and (f) as subsections
(f) and (g), respectively; and
H. R. 1588—218
(2) by inserting after subsection (d) the following new sub-
section (e):
‘‘(e) FACILITIES
AND OPERATIONS.—The following definitions
relating to facilities and operations apply in this title:
‘‘(1) RANGE.—The term ‘range’, when used in a geographic
sense, means a designated land or water area that is set
aside, managed, and used for range activities of the Department
of Defense. Such term includes the following:
‘‘(A) Firing lines and positions, maneuver areas, firing
lanes, test pads, detonation pads, impact areas, electronic
scoring sites, buffer zones with restricted access, and exclu-
sionary areas.
‘‘(B) Airspace areas designated for military use in
accordance with regulations and procedures prescribed by
the Administrator of the Federal Aviation Administration.
‘‘(2) 
RANGE
ACTIVITIES.—The 
term 
‘range 
activities’
means—
‘‘(A) research, development, testing, and evaluation of
military munitions, other ordnance, and weapons systems;
and
‘‘(B) the training of members of the armed forces in
the use and handling of military munitions, other ordnance,
and weapons systems.
‘‘(3) OPERATIONAL
RANGE.—The term ‘operational range’
means a range that is under the jurisdiction, custody, or control
of the Secretary of Defense and—
‘‘(A) that is used for range activities, or
‘‘(B) although not currently being used for range activi-
ties, that is still considered by the Secretary to be a range
and has not been put to a new use that is incompatible
with range activities.
‘‘(4) MILITARY MUNITIONS.—(A) The term ‘military muni-
tions’ means all ammunition products and components produced
for or used by the armed forces for national defense and secu-
rity, including ammunition products or components under the
control of the Department of Defense, the Coast Guard, the
Department of Energy, and the National Guard.
‘‘(B) Such term includes the following:
‘‘(i) Confined gaseous, liquid, and solid propellants.
‘‘(ii) Explosives, pyrotechnics, chemical and riot control
agents, smokes, and incendiaries, including bulk explosives,
and chemical warfare agents.
‘‘(iii) Chemical munitions, rockets, guided and ballistic
missiles, bombs, warheads, mortar rounds, artillery
ammunition, small arms ammunition, grenades, mines, tor-
pedoes, depth charges, cluster munitions and dispensers,
and demolition charges.
‘‘(iv) Devices and components of any item specified
in clauses (i) through (iii).
‘‘(C) Such term does not include the following:
‘‘(i) Wholly inert items.
‘‘(ii) Improvised explosive devices.
‘‘(iii) Nuclear weapons, nuclear devices, and nuclear
components, other than nonnuclear components of nuclear
devices that are managed under the nuclear weapons pro-
gram of the Department of Energy after all required
H. R. 1588—219
sanitization operations under the Atomic Energy Act of
1954 (42 U.S.C. 2011 et seq.) have been completed.
‘‘(5) UNEXPLODED ORDNANCE.—The term ‘unexploded ord-
nance’ means military munitions that—
‘‘(A) have been primed, fused, armed, or otherwise
prepared for action;
‘‘(B) have been fired, dropped, launched, projected, or
placed in such a manner as to constitute a hazard to
operations, installations, personnel, or material; and
‘‘(C) remain unexploded, whether by malfunction,
design, or any other cause.’’.
(b) REFERENCES TO MILITARY MUNITIONS, ETC.—Section 2710(e)
of such title is amended—
(1) by striking paragraphs (3), (5), and (9); and
(2) by redesignating paragraphs (4), (6), (7), (8), and (10)
as paragraphs (3), (4), (5), (6), and (7), respectively.
SEC. 1043. ADDITIONAL DEFINITIONS FOR PURPOSES OF TITLE 10,
UNITED STATES CODE.
(a) GENERAL DEFINITIONS.—Section 101(a) of title 10, United
States Code, is amended by adding at the end the following new
paragraphs:
‘‘(16) The term ‘congressional defense committees’ means—
‘‘(A) the Committee on Armed Services and the Com-
mittee on Appropriations of the Senate; and
‘‘(B) the Committee on Armed Services and the Com-
mittee on Appropriations of the House of Representatives.
‘‘(17) The term ‘base closure law’ means the following:
‘‘(A) Section 2687 of this title.
‘‘(B) The Defense Base Closure and Realignment Act
of 1990 (part A of title XXIX of Public Law 101–510;
10 U.S.C. 2687 note).
‘‘(C) Title II of the Defense Authorization Amendments
and Base Closure and Realignment Act (Public Law 100–
526; 10 U.S.C. 2687 note).’’.
(b) REFERENCES TO CONGRESSIONAL DEFENSE COMMITTEES.—
Title 10, United States Code, is further amended as follows:
(1) Section 135(e) is amended—
(A) by striking ‘‘(1)’’;
(B) by striking ‘‘each congressional committee specified
in paragraph (2)’’ and inserting ‘‘each of the congressional
defense committees’’; and
(C) by striking paragraph (2).
(2) Section 153(c) is amended—
(A) in paragraph (1), by striking ‘‘committees of Con-
gress named in paragraph (2)’’ and inserting ‘‘congressional
defense committees’’;
(B) by striking paragraph (2); and
(C) by designating the second sentence of paragraph
(1) as paragraph (2) and in that paragraph (as so des-
ignated) by striking ‘‘The report’’ and inserting ‘‘Each report
under paragraph (1)’’.
(3) Section 181(d)(2) is amended—
(A) by striking ‘‘subsection:’’ and all that follows
through ‘‘ ‘oversight’’ and inserting ‘‘subsection, the term
‘oversight’’; and
(B) by striking subparagraph (B).
H. R. 1588—220
(4) Section 224 is amended by striking subsection (f).
(5) Section 228(e) is amended—
(A) by striking ‘‘DEFINITIONS’’ and all that follows
through ‘‘(1) The term’’ and inserting ‘‘O&M BUDGET
ACTIVITY DEFINED.—In this section, the term’’; and
(B) by striking paragraph (2).
(6) Section 229 is amended by striking subsection (f).
(7) Section 1107(f)(4) is amended by striking subparagraph
(C).
(8) Section 2216(j) is amended by striking paragraph (3).
(9) Section 2218(l) is amended—
(A) by striking paragraph (4); and
(B) by redesignating paragraph (5) as paragraph (4).
(10) Section 2306b(l) is amended—
(A) by striking paragraph (9); and
(B) by redesignating paragraph (10) as paragraph (9).
(11) Section 2308(e)(2) is amended—
(A) by striking subparagraph (A); and
(B) by redesignating subparagraphs (B) and (C) as
subparagraphs (A) and (B), respectively.
(12) Section 2350j is amended—
(A) in subsection (e), by striking ‘‘congressional commit-
tees specified in subsection (g)’’ in paragraphs (1) and (3)
and inserting ‘‘congressional defense committees’’; and
(B) by striking subsection (g).
(13) Section 2366(e) is amended—
(A) by striking paragraph (7); and
(B) by redesignating paragraphs (8) and (9) as para-
graphs (7) and (8), respectively.
(14) Section 2399(h) is amended—
(A) by striking ‘‘DEFINITIONS.—’’ and all that follows
through ‘‘(1) The term’’ and inserting ‘‘OPERATIONAL TEST
AND EVALUATION DEFINED.—In this section, the term’’;
(B) by striking paragraph (2);
(C) by redesignating subparagraphs (A), (B), and (C)
as paragraphs (1), (2), and (3), respectively; and
(D) by realigning those paragraphs (as so redesignated)
so as to be indented two ems from the left margin.
(15) Section 2667(h) is amended by striking paragraph
(1).
(16) Section 2801(c)(4) is amended by striking ‘‘the Com-
mittee on’’ the first place it appears and all that follows through
‘‘House of Representatives’’ and inserting ‘‘the congressional
defense committees’’.
(c) REFERENCES
TO BASE CLOSURE LAWS.—Title 10, United
States Code, is further amended as follows:
(1) Section 2306c(h) is amended by striking ‘‘ADDITIONAL’’
and all that follows through ‘‘(2) The term’’ and inserting ‘‘MILI-
TARY INSTALLATION DEFINED.—In this section, the term’’.
(2) Section 2490a(f) is amended—
(A) by striking ‘‘DEFINITIONS.—’’ and all that follows
through ‘‘(1) The term’’ and inserting ‘‘NONAPPROPRIATED
FUND INSTRUMENTALITY DEFINED.—In this section, the
term’’; and
(B) by striking paragraph (2).
H. R. 1588—221
(3) Section 2667(h), as amended by subsection (b)(15), is
further amended by striking ‘‘section:’’ and all that follows
through ‘‘(3) The term’’ and inserting ‘‘section, the term’’.
(4) Section 2696(e) is amended—
(A) by striking paragraphs (1), (2), (3), and (4) and
inserting the following:
‘‘(1) A base closure law.’’; and
(B) by redesignating paragraphs (5) and (6) as para-
graphs (2) and (3), respectively.
(5) Section 2705 is amended by striking subsection (h).
(6) Section 2871 is amended by striking paragraph (2).
SEC. 
1044. 
INCLUSION 
OF 
ANNUAL 
MILITARY 
CONSTRUCTION
AUTHORIZATION 
REQUEST 
IN 
ANNUAL 
DEFENSE
AUTHORIZATION REQUEST.
(a) INCLUSION OF MILITARY CONSTRUCTION REQUEST.—Section
113a(b) of title 10, United States Code, is amended—
(1) by redesignating paragraph (3) as paragraph (4); and
(2) by inserting after paragraph (2) the following new para-
graph (3):
‘‘(3) Authority to carry out military construction projects,
as required by section 2802 of this title.’’.
(b) REPEAL OF SEPARATE TRANSMISSION OF REQUEST.—(1) Sec-
tion 2859 of such title is repealed.
(2) The table of sections at the beginning of subchapter III
of chapter 169 of such title is amended by striking the item relating
to section 2859.
SEC. 1045. TECHNICAL AND CLERICAL AMENDMENTS.
(a) TITLE 10, UNITED STATES CODE.—Title 10, United States
Code, is amended as follows:
(1) The tables of chapters at the beginning of subtitle
A, and at the beginning of part IV of subtitle A, are amended
by striking ‘‘2701’’ in the item relating to chapter 160 and
inserting ‘‘2700’’.
(2) Section 101(a)(9)(D) is amended by striking ‘‘Transpor-
tation’’ and inserting ‘‘Homeland Security’’.
(3) Section 1115(c)(1)(B) is amended by striking ‘‘and other
than members’’ and inserting ‘‘(other than members’’.
(4) Section 2002(a)(2) is amended by striking ‘‘Foreign
Service Institute’’ and inserting ‘‘George P. Schultz National
Foreign Affairs Training Center’’.
(5)(A) Section 2248 is repealed.
(B) The table of sections at the beginning of subchapter
I of chapter 134 is amended by striking the item relating
to section 2248.
(6) Section 2432(h)(1) is amended by inserting ‘‘program’’
in the first sentence after ‘‘for such’’.
(7) Section 7305(d) is amended by inserting ‘‘such’’ before
‘‘title III’’ the second place it appears.
(b) TITLE 37, UNITED STATES CODE.—Title 37, United States
Code, is amended as follows:
(1) Section 323(a) is amended by striking ‘‘1 year’’ in para-
graphs (1) and (2) and inserting ‘‘one year’’.
(2) Section 402 is amended—
(A) in subsection (b)—
(i) by striking paragraph (1);
H. R. 1588—222
(ii) by redesignating paragraphs (2), (3), and (4)
as paragraphs (1), (2), and (3), respectively;
(iii) in paragraph (1) (as so redesignated), by
striking ‘‘On and after January 1, 2002, the’’ and
inserting ‘‘The’’; and
(iv) in paragraph (3) (as so redesignated), by
striking ‘‘paragraph (2)’’ and inserting ‘‘paragraph (1)’’;
and
(B) in subsection (d), by striking ‘‘subsection (b)(2)’’
and inserting ‘‘subsection (b)(1)’’.
(c) FLOYD D. SPENCE NATIONAL DEFENSE AUTHORIZATION ACT
FOR FISCAL YEAR 2001.—The Floyd D. Spence National Defense
Authorization Act for Fiscal Year 2001 (as enacted into law by
Public Law 106–398) is amended as follows:
(1) Section 814(g)(1) is amended by striking ‘‘the Clinger-
Cohen Act of 1996 (divisions D and E of Public Law 104–
106)’’ and inserting ‘‘subtitle III of title 40, United States Code’’.
(2) Section 1308(c) (22 U.S.C. 5959) is amended—
(A) by redesignating paragraph (7) as paragraph (8);
and
(B) by redesignating the second paragraph (6) as para-
graph (7).
(d) STROM THURMOND NATIONAL DEFENSE AUTHORIZATION ACT
FOR FISCAL YEAR 1999.—Section 819(a) of the Strom Thurmond
National Defense Authorization Act for Fiscal Year 1999 (Public
Law 105–261; 112 Stat. 2089) is amended by striking ‘‘section
201(c) of the Federal Property and Administrative Services Act
of 1949 (40 U.S.C. 481(c)),’’ and inserting ‘‘section 503 of title
40, United States Code,’’.
(e) NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR
1997.—Section 1084(e) of the National Defense Authorization Act
for Fiscal Year 1997 (Public Law 104–201; 110 Stat. 2675) is
amended by striking ‘‘98–515’’ and inserting ‘‘98–525’’. The amend-
ment made by the preceding sentence shall take effect as if included
in Public Law 104–201.
(f) FEDERAL ACQUISITION STREAMLINING ACT OF 1994.—Sub-
section (d) of section 1004 of the Federal Acquisition Streamlining
Act of 1994 (Public Law 103–355; 108 Stat. 3253) is amended
by striking ‘‘under—’’ and all that follows through the end of para-
graph (2) and inserting ‘‘under chapter 11 of title 40, United States
Code.’’.
(g) ARMED FORCES RETIREMENT HOME ACT OF 1991.—Section
1520(b)(1)(C) of the Armed Forces Retirement Home Act of 1991
(24 U.S.C. 420(b)(1)(C)) is amended by inserting ‘‘Armed Forces’’
before ‘‘Retirement Home Trust Fund’’.
Subtitle F—Other Matters
SEC. 1051. ASSESSMENT OF EFFECTS OF SPECIFIED STATUTORY
LIMITATIONS ON THE GRANTING OF SECURITY CLEAR-
ANCES.
Not later than 60 days after the date of the enactment of
this Act, the Secretary of Defense shall submit to the Committee
on Armed Services of the Senate and the Committee on Armed
Services of the House of Representatives an assessment of the
effects of the provisions of section 986 of title 10, United States
H. R. 1588—223
Code (relating to limitations on security clearances), on the granting
(or renewal) of security clearances for Department of Defense per-
sonnel and defense contractor personnel. The assessment shall
review the effects of the disqualification factors specified in sub-
section (c) of that section and shall include such recommendations
for legislation or administrative steps as the Secretary considers
necessary.
SEC. 1052. ACQUISITION OF HISTORICAL ARTIFACTS THROUGH
EXCHANGE OF OBSOLETE OR SURPLUS PROPERTY.
(a) ACQUISITION AUTHORIZED.—The Secretary of a military
department may use the authority provided by section 2572 of
title 10, United States Code, to acquire an historical artifact that
directly benefits the historical collection of the Armed Forces in
exchange for any obsolete or surplus property held by that military
department, without regard to whether the property is described
in subsection (c) of such section.
(b) DURATION OF AUTHORITY.—The authority provided by sub-
section (a) applies during fiscal years 2004 and 2005.
SEC. 1053. CONVEYANCE OF SURPLUS T–37 AIRCRAFT TO AIR FORCE
AVIATION HERITAGE FOUNDATION, INCORPORATED.
(a) AUTHORITY TO CONVEY.—The Secretary of the Air Force
may convey to the Air Force Aviation Heritage Foundation, Incor-
porated, of Georgia (in this section referred to as the ‘‘Foundation’’),
all right, title, and interest of the United States in and to one
surplus T–37 ‘‘Tweet’’ aircraft for the sole purpose of permitting
the Foundation to use the aircraft in a static display. The convey-
ance shall be made by means of a conditional deed of gift.
(b) CONDITION OF AIRCRAFT.—(1) The Secretary may not convey
the aircraft under subsection (a) until the aircraft has been demili-
tarized in such manner as the Secretary determines necessary
to ensure that the aircraft is permanently unfit for flight and
does not have any capability for use as a platform for launching
or releasing munitions or any other combat capability that it was
designed to have.
(2) The Foundation shall be responsible for the costs of demili-
tarizing the aircraft, as required by paragraph (1). Demilitarization
shall be carried out in a manner intended to preserve the historical
and display value of the aircraft.
(c) CONDITIONS FOR CONVEYANCE.—(1) The conveyance of a
T–37 aircraft under this section shall be subject to the following
conditions:
(A) That the Foundation not convey any right, title, or
interest in, or transfer possession of, the aircraft to any other
party without the prior approval of the Secretary of the Air
Force.
(B) That the Foundation not alter the aircraft to restore
it to flyable condition.
(C) That if the Secretary of the Air Force determines at
any time that the Foundation has conveyed an ownership
interest in, or transferred possession of, the aircraft to any
other party without the prior approval of the Secretary, or
has failed to comply with the condition set forth in subpara-
graph (B), all right, title, and interest in and to the aircraft,
including any repair or alteration of the aircraft, shall revert
to the United States, and the United States shall have the
right of immediate possession of the aircraft.
H. R. 1588—224
(2) The Secretary shall include the conditions under paragraph
(1) in the instrument of conveyance of the T–37 aircraft.
(d) CONVEYANCE AT NO COST TO THE UNITED STATES.—Any
conveyance of a T–37 aircraft under this section shall be made
at no cost to the United States. Any costs associated with such
conveyance, costs of determining compliance by the Foundation
with the conditions in subsection (b), and costs of restoration and
maintenance of the aircraft conveyed shall be borne by the Founda-
tion.
(e) ADDITIONAL TERMS AND CONDITIONS.—The Secretary of the
Air Force may require such additional terms and conditions in
connection with the conveyance under this section as the Secretary
considers appropriate to protect the interests of the United States.
(f) DURATION OF CONVEYANCE AUTHORITY.—The authority to
make the conveyance to the Foundation authorized by this section
expires on September 30, 2005.
SEC. 1054. DEPARTMENT OF DEFENSE BIENNIAL STRATEGIC PLAN FOR
MANAGEMENT OF ELECTROMAGNETIC SPECTRUM.
(a) REQUIREMENT FOR PLAN.—Chapter 23 of title 10, United
States Code, is amended by inserting after section 487 the following
new section:
‘‘§ 488. Management of electromagnetic spectrum: biennial
strategic plan
‘‘(a) REQUIREMENT FOR STRATEGIC PLAN.—Every other year,
and in time for submission to Congress under subsection (b), the
Secretary of Defense shall prepare a strategic plan for the manage-
ment of the electromagnetic spectrum to ensure the accessibility
and efficient use of that spectrum needed to support the mission
of the Department of Defense.
‘‘(b) SUBMISSION
OF PLAN
TO CONGRESS.—The Secretary of
Defense shall submit to Congress the strategic plan most recently
prepared under subsection (a) at the same time that the President
submits to Congress the budget for an even-numbered fiscal year
under section 1105(a) of title 31.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of such chapter is amended by inserting after the item relating
to section 487 the following new item:
‘‘488. Management of electromagnetic spectrum: biennial strategic plan.’’.
SEC. 1055. REVISION OF DEPARTMENT OF DEFENSE DIRECTIVE
RELATING TO MANAGEMENT AND USE OF RADIO FRE-
QUENCY SPECTRUM.
Not later than one year after the date of the enactment of
this Act, the Secretary of Defense shall revise and reissue Depart-
ment of Defense Directive 4650.1, relating to management and
use of the radio frequency spectrum, last issued on June 24, 1987,
to update the procedures applicable to Department of Defense
management and use of the radio frequency spectrum and to ensure
the consideration of requirements for usage of such spectrum by
a system as early as practicable in the acquisition program for
such system.
H. R. 1588—225
SEC. 1056. SENSE OF CONGRESS ON DEPLOYMENT OF AIRBORNE
CHEMICAL AGENT MONITORING SYSTEMS AT CHEMICAL
STOCKPILE DISPOSAL SITES IN THE UNITED STATES.
(a) FINDINGS.—The Congress makes the following findings:
(1) Over 23,700 tons of lethal chemical agents in assembled
chemical weapons and bulk storage containers are stored and
awaiting destruction at eight chemical agent disposal facilities
and stockpile storage sites in the United States. Some of these
weapons and storage containers contain GB or VX nerve agents,
while others contain blister agents such as HD (mustard agent).
(2) Approximately 960,000 persons live in the vicinity of
the eight chemical weapons disposal facilities and stockpile
storage sites.
(3) Airborne-agent chemical monitoring systems are cur-
rently deployed at each of the chemical demilitarization facili-
ties and stockpile storage sites to provide continuous and near-
real-time monitoring of the presence of chemical agents.
(4) The National Research Council has determined that
monitoring levels used at the demilitarization facilities are
very conservative and highly protective of workers and public
health and safety and that the conservative monitoring levels
are a contributing factor in false positive alarms.
(5) The National Research Council has expressed repeated
concern about relatively frequent false positive alarms and
the lack of real-time monitoring for airborne agents and has
noted the poor state of agent monitoring technology for liquid
waste streams and solid materials suspected of possible agent
contamination.
(6) The National Research Council has concluded that,
although the Program Manager for Chemical Demilitarization
has made some efforts to develop better agent-monitoring tech-
nology, results to date have been disappointing.
(7) The National Research Council has concluded that
development and deployment of airborne-agent monitors with
shorter response time and lower false alarm rates would
enhance safety and reduce the tendency to discount agent
alarms, and has recommended that the Program Manager for
Chemical Demilitarization and the relevant Department of
Defense research and development agencies should invigorate
and coordinate efforts to develop chemical agent monitors with
improved sensitivity, specificity, and response time.
(b) SENSE
OF CONGRESS.—It is the sense of Congress that
the Secretary of the Army—
(1) should, in coordination with relevant Department of
Defense research and development agencies, invigorate and
coordinate efforts to develop chemical agent monitors with
improved sensitivity, specificity, and response time; and
(2) should deploy improved chemical agent monitors in
order to ensure the maximum protection of the general public,
personnel involved in the chemical demilitarization program,
and the environment.
SEC. 1057. EXPANSION OF PRE-SEPTEMBER 11, 2001, FIRE GRANT PRO-
GRAM OF UNITED STATES FIRE ADMINISTRATION.
The Federal Fire Prevention and Control Act of 1974 (15 U.S.C.
2201 et seq.) is amended by redesignating the second section 33
H. R. 1588—226
and section 34 as sections 35 and 36, respectively, and by inserting
after the first section 33 the following new section:
‘‘SEC. 34. EXPANSION OF PRE-SEPTEMBER 11, 2001, FIRE GRANT PRO-
GRAM.
‘‘(a) EXPANDED AUTHORITY TO MAKE GRANTS.—
‘‘(1) HIRING GRANTS.—(A) The Administrator shall make
grants directly to career, volunteer, and combination fire
departments, in consultation with the chief executive of the
State in which the applicant is located, for the purpose of
increasing the number of firefighters to help communities meet
industry minimum standards and attain 24-hour staffing to
provide adequate protection from fire and fire-related hazards,
and to fulfill traditional missions of fire departments that ante-
date the creation of the Department of Homeland Security.
‘‘(B)(i) Grants made under this paragraph shall be for 4
years and be used for programs to hire new, additional fire-
fighters.
‘‘(ii) Grantees are required to commit to retaining for at
least 1 year beyond the termination of their grants those fire-
fighters hired under this paragraph.
‘‘(C) In awarding grants under this subsection, the Adminis-
trator may give preferential consideration to applications that
involve a non-Federal contribution exceeding the minimums
under subparagraph (E).
‘‘(D) The Administrator may provide technical assistance
to States, units of local government, Indian tribal governments,
and to other public entities, in furtherance of the purposes
of this section.
‘‘(E) The portion of the costs of hiring firefighters provided
by a grant under this paragraph may not exceed—
‘‘(i) 90 percent in the first year of the grant;
‘‘(ii) 80 percent in the second year of the grant;
‘‘(iii) 50 percent in the third year of the grant; and
‘‘(iv) 30 percent in the fourth year of the grant.
‘‘(F) Notwithstanding any other provision of law, any fire-
fighter hired with funds provided under this subsection shall
not be discriminated against for, or be prohibited from,
engaging in volunteer activities in another jurisdiction during
off-duty hours.
‘‘(G) All grants made pursuant to this subsection shall
be awarded on a competitive basis through a neutral peer
review process.
‘‘(H) At the beginning of the fiscal year, the Administrator
shall set aside 10 percent of the funds appropriated for carrying
out this paragraph for departments with majority volunteer
or all volunteer personnel. After awards have been made, if
less than 10 percent of the funds appropriated for carrying
out this paragraph are not awarded to departments with
majority volunteer or all volunteer personnel, the Administrator
shall transfer from funds appropriated for carrying out this
paragraph to funds available for carrying out paragraph (2)
an amount equal to the difference between the amount that
is provided to such fire departments and 10 percent.
‘‘(2) RECRUITMENT
AND
RETENTION
GRANTS.—In addition
to any amounts transferred under paragraph (1)(H), the
Administrator shall direct at least 10 percent of the total
H. R. 1588—227
amount of funds appropriated pursuant to this section annually
to a competitive grant program for the recruitment and reten-
tion of volunteer firefighters who are involved with or trained
in the operations of firefighting and emergency response.
Eligible entities shall include volunteer or combination fire
departments, and organizations on a local or statewide basis
that represent the interests of volunteer firefighters.
‘‘(b) APPLICATIONS.—(1) No grant may be made under this sec-
tion unless an application has been submitted to, and approved
by, the Administrator.
‘‘(2) An application for a grant under this section shall be
submitted in such form, and contain such information, as the
Administrator may prescribe.
‘‘(3) At a minimum, each application for a grant under this
section shall—
‘‘(A) explain the applicant’s inability to address the need
without Federal assistance;
‘‘(B) in the case of a grant under subsection (a)(1), explain
how the applicant plans to meet the requirements of subsection
(a)(1)(B)(ii) and (F);
‘‘(C) specify long-term plans for retaining firefighters fol-
lowing the conclusion of Federal support provided under this
section; and
‘‘(D) provide assurances that the applicant will, to the
extent practicable, seek, recruit, and hire members of racial
and ethnic minority groups and women in order to increase
their ranks within firefighting.
‘‘(c) LIMITATION ON USE OF FUNDS.—(1) Funds made available
under this section to fire departments for salaries and benefits
to hire new, additional firefighters shall not be used to supplant
State or local funds, or, in the case of Indian tribal governments,
funds supplied by the Bureau of Indian Affairs, but shall be used
to increase the amount of funds that would, in the absence of
Federal funds received under this section, be made available from
State or local sources, or in the case of Indian tribal governments,
from funds supplied by the Bureau of Indian Affairs.
‘‘(2) No grant shall be awarded pursuant to this section to
a municipality or other recipient whose annual budget at the time
of the application for fire-related programs and emergency response
has been reduced below 80 percent of the average funding level
in the 3 years prior to the date of enactment of this section.
‘‘(3) Funds appropriated by the Congress for the activities of
any agency of an Indian tribal government or the Bureau of Indian
Affairs performing firefighting functions on any Indian lands may
be used to provide the non-Federal share of the cost of programs
or projects funded under this section.
‘‘(4)(A) Total funding provided under this section over 4 years
for hiring a firefighter may not exceed $100,000.
‘‘(B) The $100,000 cap shall be adjusted annually for inflation
beginning in fiscal year 2005.
‘‘(d) PERFORMANCE
EVALUATION.—The Administrator may
require a grant recipient to submit any information the Adminis-
trator considers reasonably necessary to evaluate the program.
‘‘(e) SUNSET AND REPORTS.—The authority under this section
to make grants shall lapse at the conclusion of 10 years from
the date of enactment of this section. Not later than 6 years after
the date of the enactment of this section, the Administrator shall
H. R. 1588—228
submit a report to Congress concerning the experience with, and
effectiveness of, such grants in meeting the objectives of this section.
The report may include any recommendations the Administrator
may have for amendments to this section and related provisions
of law.
‘‘(f) REVOCATION OR SUSPENSION OF FUNDING.—If the Adminis-
trator determines that a grant recipient under this section is not
in substantial compliance with the terms and requirements of an
approved grant application submitted under this section, the
Administrator may revoke or suspend funding of that grant, in
whole or in part.
‘‘(g) ACCESS TO DOCUMENTS.—(1) The Administrator shall have
access for the purpose of audit and examination to any pertinent
books, documents, papers, or records of a grant recipient under
this section and to the pertinent books, documents, papers, or
records of State and local governments, persons, businesses, and
other entities that are involved in programs, projects, or activities
for which assistance is provided under this section.
‘‘(2) Paragraph (1) shall apply with respect to audits and
examinations conducted by the Comptroller General of the United
States or by an authorized representative of the Comptroller Gen-
eral.
‘‘(h) DEFINITIONS.—In this section, the term—
‘‘(1) ‘firefighter’ has the meaning given the term ‘employee
in fire protection activities’ under section 3(y) of the Fair Labor
Standards Act (29 U.S.C. 203(y)); and
‘‘(2) ‘Indian tribe’ means a tribe, band, pueblo, nation,
or other organized group or community of Indians, including
an Alaska Native village (as defined in or established under
the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et
seq.)), that is recognized as eligible for the special programs
and services provided by the United States to Indians because
of their status as Indians.
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated for the purposes of carrying out this section—
‘‘(1) $1,000,000,000 for fiscal year 2004;
‘‘(2) $1,030,000,000 for fiscal year 2005;
‘‘(3) $1,061,000,000 for fiscal year 2006;
‘‘(4) $1,093,000,000 for fiscal year 2007;
‘‘(5) $1,126,000,000 for fiscal year 2008;
‘‘(6) $1,159,000,000 for fiscal year 2009; and
‘‘(7) $1,194,000,000 for fiscal year 2010.’’.
SEC. 1058. REVIEW AND ENHANCEMENT OF EXISTING AUTHORITIES
FOR USING AIR FORCE AND AIR NATIONAL GUARD MOD-
ULAR AIRBORNE FIRE-FIGHTING SYSTEMS AND OTHER
DEPARTMENT 
OF 
DEFENSE 
ASSETS 
TO 
FIGHT
WILDFIRES.
(a) REVIEW REQUIRED.—The Director of the Office of Manage-
ment and Budget shall conduct a review of existing authorities
regarding the use of Air Force and Air National Guard Modular
Airborne Fire-Fighting Systems units and other Department of
Defense assets to fight wildfires to ensure that, in accordance
with applicable legal requirements, such assets are available in
the most expeditious manner to fight wildfires on Federal lands
or non-Federal lands at the request of a Federal agency or State
H. R. 1588—229
government. In conducting the review, the Director shall specifically
consider—
(1) any adverse impact caused by the restrictions contained
in section 1535(a)(4) of title 31, United States Code, or caused
by the interpretation of such restrictions, on the ability of
the Forest Service and other Federal agencies to procure such
firefighting services; and
(2) whether the authorities under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
et seq.), including section 403(c) of such Act (42 U.S.C. 5170b),
are being properly utilized to facilitate an expeditious Depart-
ment of Defense response to State requests under, and con-
sistent with, such Act for firefighting services.
(b) DETERMINATION REQUIRED.—On the basis of the review,
the Director shall make a determination regarding whether existing
authorities are being used in a manner consistent with using the
available capabilities of Department of Defense assets to fight
wildfires in the most expeditious and efficacious way to minimize
the risk to public safety.
(c) EXPEDITED ECONOMY ACT REVIEW PROCESS.—If the Director
determines under subsection (b) that existing authorities are ade-
quate for the deployment of Department of Defense assets to fight
wildfires, the Director shall develop and implement, subject to
subsection (f), such modifications to the process for conducting
the cost comparison required by section 1535(a)(4) of title 31, United
States Code, as the Director considers appropriate to further expe-
dite the procurement of such firefighting services.
(d) DEVELOPMENT
AND IMPLEMENTATION
OF REVISED POLI-
CIES.—If the Director determines under subsection (b) that the
existing authorities or their use is inadequate or can be improved,
the Director shall develop and implement, subject to subsection
(f), such regulations, policies, and interagency procedures as may
be necessary to improve the ability of the Department of Defense
to respond to a request by a Federal agency or State government
to assist in fighting wildfires on Federal lands or non-Federal
lands under section 1535(a) of title 31, United States Code, or
the Robert T. Stafford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5121 et seq.), or both.
(e) REPORTING REQUIREMENT.—Not later than 120 days after
the date of the enactment of this Act, the Director shall transmit
to Congress a report—
(1) containing the results of the review conducted under
subsection (a) and the determination made under subsection
(b); and
(2) based on such determination, describing the modifica-
tions proposed to be made to existing authorities under sub-
section (c) or (d), including whether there is a need for legisla-
tive changes to further improve the procedures for using
Department of Defense assets to fight wildfires.
(f) DELAYED IMPLEMENTATION.—The modifications described in
the report prepared under subsection (e) to be made to existing
authorities under subsection (c) or (d) shall not take effect until
the end of the 30-day period beginning on the date on which
the report is transmitted to Congress.
H. R. 1588—230
TITLE XI—CIVILIAN PERSONNEL
MATTERS
Subtitle A—Department of Defense National Security Personnel System
Sec. 1101. Department of Defense national security personnel system.
Subtitle B—Department of Defense Civilian Personnel Generally
Sec. 1111. Pilot program for improved civilian personnel management.
Sec. 1112. Clarification and revision of authority for demonstration project relating
to certain acquisition personnel management policies and procedures.
Sec. 1113. Military leave for mobilized Federal civilian employees.
Sec. 1114. Restoration of annual leave for certain Department of Defense employ-
ees.
Sec. 1115. Authority to employ civilian faculty members at the Western Hemi-
sphere Institute for Security Cooperation.
Sec. 1116. Extension of authority for experimental personnel program for scientific
and technical personnel.
Subtitle C—Other Federal Government Civilian Personnel Matters
Sec. 1121. Modification of the overtime pay cap.
Sec. 1122. Common occupational and health standards for differential payments as
a consequence of exposure to asbestos.
Sec. 1123. Increase in annual student loan repayment authority.
Sec. 1124. Authorization for cabinet secretaries, secretaries of military depart-
ments, and heads of executive agencies to be paid on a biweekly basis.
Sec. 1125. Senior Executive Service and performance.
Sec. 1126. Design elements of pay-for-performance systems in demonstration
projects.
Sec. 1127. Federal flexible benefits plan administrative costs.
Sec. 1128. Employee surveys.
Sec. 1129. Human capital performance fund.
Subtitle A—Department of Defense
National Security Personnel System
SEC. 1101. DEPARTMENT OF DEFENSE NATIONAL SECURITY PER-
SONNEL SYSTEM.
(a) IN GENERAL.—(1) Subpart I of part III of title 5, United
States Code, is amended by adding at the end the following new
chapter:
‘‘CHAPTER 99—DEPARTMENT OF DEFENSE
NATIONAL SECURITY PERSONNEL SYSTEM
‘‘Sec.
‘‘9901. Definitions.
‘‘9902. Establishment of human resources management system.
‘‘9903. Attracting highly qualified experts.
‘‘9904. Special pay and benefits for certain employees outside the United States.
‘‘§ 9901. Definitions
‘‘For purposes of this chapter—
‘‘(1) the term ‘Director’ means the Director of the Office
of Personnel Management; and
‘‘(2) the term ‘Secretary’ means the Secretary of Defense.
‘‘§ 9902. Establishment of human resources management
system
‘‘(a) IN GENERAL.—Notwithstanding any other provision of this
part, the Secretary may, in regulations prescribed jointly with the
H. R. 1588—231
Director, establish, and from time to time adjust, a human resources
management system for some or all of the organizational or func-
tional units of the Department of Defense. The human resources
management system established under authority of this section
shall be referred to as the ‘National Security Personnel System’.
‘‘(b) SYSTEM REQUIREMENTS.—Any system established under
subsection (a) shall—
‘‘(1) be flexible;
‘‘(2) be contemporary;
‘‘(3) not waive, modify, or otherwise affect—
‘‘(A) the public employment principles of merit and
fitness set forth in section 2301, including the principles
of hiring based on merit, fair treatment without regard
to political affiliation or other nonmerit considerations,
equal pay for equal work, and protection of employees
against reprisal for whistleblowing;
‘‘(B) any provision of section 2302, relating to prohib-
ited personnel practices;
‘‘(C)(i) any provision of law referred to in section
2302(b)(1), (8), and (9); or
‘‘(ii) any provision of law implementing any provision
of law referred to in section 2302(b)(1), (8), and (9) by—
‘‘(I) providing for equal employment opportunity
through affirmative action; or
‘‘(II) providing any right or remedy available to
any employee or applicant for employment in the public
service;
‘‘(D) any other provision of this part (as described
in subsection (d)); or
‘‘(E) any rule or regulation prescribed under any provi-
sion of law referred to in this paragraph;
‘‘(4) ensure that employees may organize, bargain collec-
tively as provided for in this chapter, and participate through
labor organizations of their own choosing in decisions which
affect them, subject to the provisions of this chapter and any
exclusion from coverage or limitation on negotiability estab-
lished pursuant to law;
‘‘(5) not be limited by any specific law or authority under
this title, or by any rule or regulation prescribed under this
title, that is waived in regulations prescribed under this
chapter, subject to paragraph (3); and
‘‘(6) include a performance management system that incor-
porates the following elements:
‘‘(A) Adherence to merit principles set forth in section
2301.
‘‘(B) A fair, credible, and transparent employee
performance appraisal system.
‘‘(C) A link between the performance management
system and the agency’s strategic plan.
‘‘(D) A means for ensuring employee involvement in
the design and implementation of the system.
‘‘(E) Adequate training and retraining for supervisors,
managers, and employees in the implementation and oper-
ation of the performance management system.
‘‘(F) A process for ensuring ongoing performance feed-
back and dialogue between supervisors, managers, and
H. R. 1588—232
employees throughout the appraisal period, and setting
timetables for review.
‘‘(G) Effective safeguards to ensure that the manage-
ment of the system is fair and equitable and based on
employee performance.
‘‘(H) A means for ensuring that adequate agency
resources are allocated for the design, implementation, and
administration of the performance management system.
‘‘(I) A pay-for-performance evaluation system to better
link individual pay to performance, and provide an equi-
table method for appraising and compensating employees.
‘‘(c) PERSONNEL MANAGEMENT AT DEFENSE LABORATORIES.—
(1) The National Security Personnel System shall not apply with
respect to a laboratory under paragraph (2) before October 1, 2008,
and shall apply on or after October 1, 2008, only to the extent
that the Secretary determines that the flexibilities provided by
the National Security Personnel System are greater than the flexi-
bilities provided to those laboratories pursuant to section 342 of
the National Defense Authorization Act for Fiscal Year 1995 (Public
Law 103–337; 108 Stat. 2721) and section 1101 of the Strom
Thurmond National Defense Authorization Act for Fiscal Year 1999
(5 U.S.C. 3104 note), respectively.
‘‘(2) The laboratories to which this subsection applies are—
‘‘(A) the Aviation and Missile Research Development and
Engineering Center;
‘‘(B) the Army Research Laboratory;
‘‘(C) the Medical Research and Materiel Command;
‘‘(D) the Engineer Research and Development Command;
‘‘(E) the Communications-Electronics Command;
‘‘(F) the Soldier and Biological Chemical Command;
‘‘(G) the Naval Sea Systems Command Centers;
‘‘(H) the Naval Research Laboratory;
‘‘(I) the Office of Naval Research; and
‘‘(J) the Air Force Research Laboratory.
‘‘(d) OTHER NONWAIVABLE PROVISIONS.—The other provisions
of this part referred to in subsection (b)(3)(D) are (to the extent
not otherwise specified in this title)—
‘‘(1) subparts A, B, E, G, and H of this part; and
‘‘(2) chapters 41, 45, 47, 55 (except subchapter V thereof,
apart from section 5545b), 57, 59, 71, 72, 73, and 79, and
this chapter.
‘‘(e) LIMITATIONS RELATING TO PAY.—(1) Nothing in this section
shall constitute authority to modify the pay of any employee who
serves in an Executive Schedule position under subchapter II of
chapter 53.
‘‘(2) Except as provided for in paragraph (1), the total amount
in a calendar year of allowances, differentials, bonuses, awards,
or other similar cash payments paid under this title to any employee
who is paid under section 5376 or 5383 or under title 10 or under
other comparable pay authority established for payment of Depart-
ment of Defense senior executive or equivalent employees may
not exceed the total annual compensation payable to the Vice Presi-
dent under section 104 of title 3.
‘‘(3) To the maximum extent practicable, the rates of compensa-
tion for civilian employees at the Department of Defense shall
be adjusted at the same rate, and in the same proportion, as
are rates of compensation for members of the uniformed services.
H. R. 1588—233
‘‘(4) To the maximum extent practicable, for fiscal years 2004
through 2008, the overall amount allocated for compensation of
the civilian employees of an organizational or functional unit of
the Department of Defense that is included in the National Security
Personnel System shall not be less than the amount that would
have been allocated for compensation of such employees for such
fiscal year if they had not been converted to the National Security
Personnel System, based on, at a minimum—
‘‘(A) the number and mix of employees in such organiza-
tional or functional unit prior to the conversion of such
employees to the National Security Personnel System; and
‘‘(B) adjusted for normal step increases and rates of pro-
motion that would have been expected, had such employees
remained in their previous pay schedule.
‘‘(5) To the maximum extent practicable, the regulations imple-
menting the National Security Personnel System shall provide a
formula for calculating the overall amount to be allocated for fiscal
years after fiscal year 2008 for compensation of the civilian
employees of an organization or functional unit of the Department
of Defense that is included in the National Security Personnel
System. The formula shall ensure that in the aggregate, employees
are not disadvantaged in terms of the overall amount of pay avail-
able as a result of conversion to the National Security Personnel
System, while providing flexibility to accommodate changes in the
function of the organization, changes in the mix of employees per-
forming those functions, and other changed circumstances that
might impact pay levels.
‘‘(f) PROVISIONS TO ENSURE COLLABORATION WITH EMPLOYEE
REPRESENTATIVES.—(1) In order to ensure that the authority of
this section is exercised in collaboration with, and in a manner
that ensures the participation of, employee representatives in the
planning, development, and implementation of the National Secu-
rity Personnel System, the Secretary and the Director shall provide
for the following:
‘‘(A) The Secretary and the Director shall, with respect
to any proposed system—
‘‘(i) provide to the employee representatives rep-
resenting any employees who might be affected a written
description of the proposed system or adjustment (including
the reasons why it is considered necessary);
‘‘(ii) give such representatives at least 30 calendar
days (unless extraordinary circumstances require earlier
action) to review and make recommendations with respect
to the proposal; and
‘‘(iii) give any recommendations received from such
representatives under clause (ii) full and fair consideration
in deciding whether or how to proceed with the proposal.
‘‘(B) Following receipt of recommendations, if any, from
such employee representatives with respect to a proposal
described in subparagraph (A), the Secretary and the Director
shall accept such modifications to the proposal in response
to the recommendations as they determine advisable and shall,
with respect to any parts of the proposal as to which they
have not accepted the recommendations—
‘‘(i) notify Congress of those parts of the proposal,
together with the recommendations of the employee rep-
resentatives;
H. R. 1588—234
‘‘(ii) meet and confer for not less than 30 calendar
days with the employee representatives, in order to attempt
to reach agreement on whether or how to proceed with
those parts of the proposal; and
‘‘(iii) at the Secretary’s option, or if requested by a
majority of the employee representatives participating, use
the services of the Federal Mediation and Conciliation
Service during such meet and confer period to facilitate
the process of attempting to reach agreement.
‘‘(C)(i) Any part of the proposal as to which the representa-
tives do not make a recommendation, or as to which the rec-
ommendations are accepted by the Secretary and the Director,
may be implemented immediately.
‘‘(ii) With respect to any parts of the proposal as to which
recommendations have been made but not accepted by the
Secretary and the Director, at any time after 30 calendar days
have elapsed since the initiation of the congressional notifica-
tion, consultation, and mediation procedures set forth in
subparagraph (B), if the Secretary, in his discretion, determines
that further consultation and mediation is unlikely to produce
agreement, the Secretary may implement any or all of such
parts (including any modifications made in response to the
recommendations as the Secretary determines advisable), but
only after 30 days have elapsed after notifying Congress of
the decision to implement the part or parts involved (as so
modified, if applicable).
‘‘(iii) The Secretary shall notify Congress promptly of the
implementation of any part of the proposal and shall furnish
with such notice an explanation of the proposal, any changes
made to the proposal as a result of recommendations from
the employee representatives, and of the reasons why
implementation is appropriate under this subparagraph.
‘‘(D) If a proposal described in subparagraph (A) is imple-
mented, the Secretary and the Director shall—
‘‘(i) develop a method for the employee representatives
to participate in any further planning or development
which might become necessary; and
‘‘(ii) give the employee representatives adequate access
to information to make that participation productive.
‘‘(2) The Secretary may, at the Secretary’s discretion, engage
in any and all collaboration activities described in this subsection
at an organizational level above the level of exclusive recognition.
‘‘(3) In the case of any employees who are not within a unit
with respect to which a labor organization is accorded exclusive
recognition, the Secretary and the Director may develop procedures
for representation by any appropriate organization which represents
a substantial percentage of those employees or, if none, in such
other manner as may be appropriate, consistent with the purposes
of this subsection.
‘‘(4) The procedures under this subsection are the exclusive
procedures for the participation of employee representatives in the
planning, development, implementation, or adjustment of the
National Security Personnel System.
‘‘(g) PROVISIONS REGARDING NATIONAL LEVEL BARGAINING.—
(1) The National Security Personnel System implemented or modi-
fied under this chapter may include employees of the Department
of Defense from any bargaining unit with respect to which a labor
H. R. 1588—235
organization has been accorded exclusive recognition under chapter
71.
‘‘(2) For any bargaining unit so included under paragraph (1),
the Secretary may bargain with a labor organization at an organiza-
tional level above the level of exclusive recognition. The decision
to bargain at a level above the level of exclusive recognition shall
not be subject to review or to statutory third-party dispute resolu-
tion procedures outside the Department of Defense. Any such bar-
gaining shall—
‘‘(A) be binding on all subordinate bargaining units of the
labor organization at the level of recognition and their exclusive
representatives, and the Department of Defense and its sub-
components, without regard to levels of recognition;
‘‘(B) supersede all other collective bargaining agreements
of the labor organization, including collective bargaining agree-
ments negotiated with an exclusive representative at the level
of recognition, except as otherwise determined by the Secretary;
‘‘(C) not be subject to further negotiations with the labor
organizations for any purpose, including bargaining at the level
of recognition, except as provided for by the Secretary; and
‘‘(D) be subject to review by an independent third party
only to the extent provided and pursuant to procedures estab-
lished under paragraph (6) of subsection (m).
‘‘(3) The National Guard Bureau and the Army and Air Force
National Guard are excluded from coverage under this subsection.
‘‘(4) Any bargaining completed pursuant to this subsection with
a labor organization not otherwise having national consultation
rights with the Department of Defense or its subcomponents shall
not create any obligation on the Department of Defense or its
subcomponents to confer national consultation rights on such a
labor organization.
‘‘(h) PROVISIONS RELATING TO APPELLATE PROCEDURES.—(1) The
Secretary—
‘‘(A) may establish an appeals process that provides
employees of the Department of Defense organizational and
functional units that are included in the National Security
Personnel System fair treatment in any appeals that they bring
in decisions relating to their employment; and
‘‘(B) shall in prescribing regulations for any such appeals
process—
‘‘(i) ensure that employees in the National Security
Personnel System are afforded the protections of due
process; and
‘‘(ii) toward that end, be required to consult with the
Merit Systems Protection Board before issuing any such
regulations.
‘‘(2) Regulations implementing the appeals process may estab-
lish legal standards and procedures for personnel actions, including
standards for applicable relief, to be taken on the basis of employee
misconduct or performance that fails to meet expectations. Such
standards shall be consistent with the public employment principles
of merit and fitness set forth in section 2301.
‘‘(3) Legal standards and precedents applied before the effective
date of this section by the Merit Systems Protection Board and
the courts under chapters 43, 75, and 77 of this title shall apply
to employees of organizational and functional units included in
the National Security Personnel System, unless such standards
H. R. 1588—236
and precedents are inconsistent with legal standards established
under this subsection.
‘‘(4) An employee who—
‘‘(A) is removed, suspended for more than 14 days, fur-
loughed for 30 days or less, reduced in pay, or reduced in
pay band (or comparable reduction) by a final decision under
the appeals process established under paragraph (1);
‘‘(B) is not serving under probationary period as defined
under regulations established under paragraph (2); and
‘‘(C) would otherwise be eligible to appeal a performance-
based or adverse action under chapter 43 or 75, as applicable,
to the Merit Systems Protection Board,
shall have the right to petition the full Merit Systems Protection
Board for review of the record of that decision pursuant to regula-
tions established under paragraph (2). The Board may dismiss
any petition that, in the view of the Board, does not raise substan-
tial questions of fact or law. No personnel action shall be stayed
and no interim relief shall be granted during the pendency of
the Board’s review unless specifically ordered by the Board.
‘‘(5) The Board may order such corrective action as the Board
considers appropriate only if the Board determines that the decision
was—
‘‘(A) arbitrary, capricious, an abuse of discretion, or other-
wise not in accordance with law;
‘‘(B) obtained without procedures required by law, rule,
or regulation having been followed; or
‘‘(C) unsupported by substantial evidence.
‘‘(6) An employee who is adversely affected by a final order
or decision of the Board may obtain judicial review of the order
or decision as provided in section 7703. The Secretary of Defense,
after notifying the Director, may obtain judicial review of any
final order or decision of the Board under the same terms and
conditions as provided an employee.
‘‘(7) Nothing in this subsection shall be construed to authorize
the waiver of any provision of law, including an appeals provision
providing a right or remedy under section 2302(b) (1), (8) or (9),
that is not otherwise waivable under subsection (a).
‘‘(8) The right of an employee to petition the Merit Systems
Protection Board of the Department’s final decision on an action
covered by paragraph (4) of this subsection, and the right of the
Merit Systems Protection Board to review such action or to order
corrective action pursuant to paragraph (5), is provisional for 7
years after the date of the enactment of this chapter, and shall
become permanent unless Congress acts to revise such provisions.
‘‘(i) PROVISIONS RELATED
TO SEPARATION
AND RETIREMENT
INCENTIVES.—(1) The Secretary may establish a program within
the Department of Defense under which employees may be eligible
for early retirement, offered separation incentive pay to separate
from service voluntarily, or both. This authority may be used to
reduce the number of personnel employed by the Department of
Defense or to restructure the workforce to meet mission objectives
without reducing the overall number of personnel. This authority
is in addition to, and notwithstanding, any other authorities estab-
lished by law or regulation for such programs.
‘‘(2)(A) The Secretary may not authorize the payment of vol-
untary separation incentive pay under paragraph (1) to more than
25,000 employees in any fiscal year, except that employees who
H. R. 1588—237
receive voluntary separation incentive pay as a result of a closure
or realignment of a military installation under the Defense Base
Closure and Realignment Act of 1990 (title XXIX of Public Law
101–510; 10 U.S.C. 2687 note) shall not be included in that number.
‘‘(B) The Secretary shall prepare a report each fiscal year setting
forth the number of employees who received such pay as a result
of a closure or realignment of a military base as described under
subparagraph (A).
‘‘(C) The Secretary shall submit the report under subparagraph
(B) to the Committee on Armed Services and the Committee on
Governmental Affairs of the Senate, and the Committee on Armed
Services and the Committee on Government Reform of the House
of Representatives.
‘‘(3) For purposes of this section, the term ‘employee’ means
an employee of the Department of Defense, serving under an
appointment without time limitation, except that such term does
not include—
‘‘(A) a reemployed annuitant under subchapter III of
chapter 83 or chapter 84, or another retirement system for
employees of the Federal Government;
‘‘(B) an employee having a disability on the basis of which
such employee is or would be eligible for disability retirement
under any of the retirement systems referred to in subpara-
graph (A); or
‘‘(C) for purposes of eligibility for separation incentives
under this section, an employee who is in receipt of a decision
notice of involuntary separation for misconduct or unacceptable
performance.
‘‘(4) An employee who is at least 50 years of age and has
completed 20 years of service, or has at least 25 years of service,
may, pursuant to regulations promulgated under this section, apply
and be retired from the Department of Defense and receive benefits
in accordance with chapter 83 or 84 if the employee has been
employed continuously within the Department of Defense for more
than 30 days before the date on which the determination to conduct
a reduction or restructuring within 1 or more Department of
Defense components is approved.
‘‘(5)(A) Separation pay shall be paid in a lump sum or in
installments and shall be equal to the lesser of—
‘‘(i) an amount equal to the amount the employee would
be entitled to receive under section 5595(c), if the employee
were entitled to payment under such section; or
‘‘(ii) $25,000.
‘‘(B) Separation pay shall not be a basis for payment, and
shall not be included in the computation, of any other type of
Government benefit. Separation pay shall not be taken into account
for the purpose of determining the amount of any severance pay
to which an individual may be entitled under section 5595, based
on any other separation.
‘‘(C) Separation pay, if paid in installments, shall cease to
be paid upon the recipient’s acceptance of employment by the Fed-
eral Government, or commencement of work under a personal serv-
ices contract as described in paragraph (6).
‘‘(6)(A) An employee who receives separation pay under such
program may not be reemployed by the Department of Defense
for a 12-month period beginning on the effective date of the
H. R. 1588—238
employee’s separation, unless this prohibition is waived by the
Secretary on a case-by-case basis.
‘‘(B) An employee who receives separation pay under this sec-
tion on the basis of a separation occurring on or after the date
of the enactment of the Federal Workforce Restructuring Act of
1994 (Public Law 103–236; 108 Stat. 111) and accepts employment
with the Government of the United States, or who commences
work through a personal services contract with the United States
within 5 years after the date of the separation on which payment
of the separation pay is based, shall be required to repay the
entire amount of the separation pay to the Department of Defense.
If the employment is with an Executive agency (as defined by
section 105) other than the Department of Defense, the Director
may, at the request of the head of that agency, waive the repayment
if the individual involved possesses unique abilities and is the
only qualified applicant available for the position. If the employment
is within the Department of Defense, the Secretary may waive
the repayment if the individual involved is the only qualified
applicant available for the position. If the employment is with
an entity in the legislative branch, the head of the entity or the
appointing official may waive the repayment if the individual
involved possesses unique abilities and is the only qualified
applicant available for the position. If the employment is with
the judicial branch, the Director of the Administrative Office of
the United States Courts may waive the repayment if the individual
involved possesses unique abilities and is the only qualified
applicant available for the position.
‘‘(7) Under this program, early retirement and separation pay
may be offered only pursuant to regulations established by the
Secretary, subject to such limitations or conditions as the Secretary
may require.
‘‘(j) PROVISIONS RELATING TO REEMPLOYMENT.—If an annuitant
receiving an annuity from the Civil Service Retirement and Dis-
ability Fund becomes employed in a position within the Department
of Defense, his annuity shall continue. An annuitant so reemployed
shall not be considered an employee for purposes of chapter 83
or 84.
‘‘(k) ADDITIONAL PROVISIONS RELATING TO PERSONNEL MANAGE-
MENT.—(1) Notwithstanding subsection (d), the Secretary of
Defense, in establishing and implementing the National Security
Personnel System under subsection (a), shall not be limited by
any provision of this title or any rule or regulation prescribed
under this title in establishing and implementing regulations
relating to—
‘‘(A) the methods of establishing qualification requirements
for, recruitment for, and appointments to positions;
‘‘(B) the methods of assigning, reassigning, detailing,
transferring, or promoting employees; and
‘‘(C) the methods of reducing overall agency staff and grade
levels, except that performance, veterans’ preference, tenure
of employment, length of service, and such other factors as
the Secretary considers necessary and appropriate shall be
considered in decisions to realign or reorganize the Depart-
ment’s workforce.
‘‘(2) In implementing this subsection, the Secretary shall comply
with the provisions of section 2302(b)(11), regarding veterans’ pref-
erence requirements, as provided for in subsection (b)(3).
H. R. 1588—239
‘‘(l) PHASE-IN.—The Secretary may apply the National Security
Personnel System—
‘‘(1) to an organizational or functional unit that includes
up to 300,000 civilian employees of the Department of Defense,
without having to make a determination described in paragraph
(2); and
‘‘(2) to an organizational or functional unit that includes
more than 300,000 civilian employees of the Department of
Defense, if the Secretary determines in accordance with sub-
section (a) that the Department has in place a performance
management system that meets the criteria specified in sub-
section (b).
‘‘(m) LABOR MANAGEMENT RELATIONS IN THE DEPARTMENT OF
DEFENSE.—(1) Notwithstanding section 9902(d)(2), the Secretary,
together with the Director, may establish and from time to time
adjust a labor relations system for the Department of Defense
to address the unique role that the Department’s civilian workforce
plays in supporting the Department’s national security mission.
‘‘(2) The system developed or adjusted under paragraph (1)
would allow for a collaborative issue-based approach to labor
management relations.
‘‘(3) In order to ensure that the authority of this section is
exercised in collaboration with, and in a manner that ensures
the participation of, employee representatives in the development
and implementation of the labor management relations system or
adjustments to such system under this section, the Secretary shall
provide for the following:
‘‘(A) The Secretary and the Director shall, with respect
to any proposed system or adjustment—
‘‘(i) afford employee representatives and management
the opportunity to have meaningful discussions concerning
the development of the new system;
‘‘(ii) give such representatives at least 30 calendar
days (unless extraordinary circumstances require earlier
action) to review the proposal for the system and make
recommendations with respect to it; and
‘‘(iii) give any recommendations received from such
representatives under clause (ii) full and fair consideration.
‘‘(B) Following receipt of recommendations, if any, from
such employee representatives with respect to a proposal
described in subparagraph (A), the Secretary and the Director
shall accept such modifications to the proposal in response
to the recommendations as are determined advisable and shall,
with respect to any parts of the proposal as to which they
have not accepted the recommendations—
‘‘(i) meet and confer for not less than 30 calendar
days with the employee representatives, in order to attempt
to reach agreement on whether or how to proceed with
those parts of the proposal; and
‘‘(ii) at the Secretary’s option, or if requested by a
majority of the employee representatives participating, use
the services of the Federal Mediation and Conciliation
Service during such meet and confer period to facilitate
the process of attempting to reach agreement.
H. R. 1588—240
‘‘(C)(i) Any part of the proposal described in subparagraph
(A) as to which employee representatives do not make a rec-
ommendation, or as to which the recommendations are accepted
under subparagraph (B), may be implemented immediately.
‘‘(ii) With respect to any parts of the proposal as to which
recommendations have been made but not accepted, at any
time after 30 calendar days have elapsed since the consultation
and mediation procedures set forth in subparagraph (B), if
the Secretary, in his discretion, determines that further con-
sultation and mediation is unlikely to produce agreement, the
Secretary may implement any or all of such parts (including
any modifications made in response to the recommendations
as the Secretary determines advisable), but only after 30 days
have elapsed after notifying Congress of the decision to imple-
ment the part or parts involved (as so modified, if applicable).
‘‘(D) The process for collaborating with employee represent-
atives provided for under this subsection shall begin no later
than 60 calendar days after the date of enactment of this
subsection.
‘‘(4) The Secretary may engage in any and all collaboration
activities described in this subsection at an organizational level
above the level of exclusive recognition.
‘‘(5) The system developed or adjusted under this subsection
may incorporate the authority to bargain at a level above the
level of exclusion recognition provided for in subsection (g) of this
section, but may not abrogate or modify the authority provided
for in that subsection. Notwithstanding this subsection, the Sec-
retary may, at his discretion, implement the authority in subsection
(g) immediately upon enactment of this subsection.
‘‘(6) The labor relations system developed or adjusted under
this subsection shall provide for independent third party review
of decisions, including defining what decisions are reviewable by
the third party, what third party would conduct the review, and
the standard or standards for that review.
‘‘(7) Nothing in this section, including the authority provided
to waive, modify, or otherwise affect provisions of law not listed
in subsections (b) and (c) as nonwaivable, shall be construed to
expand the scope of bargaining under chapter 71 or this subsection
with respect to any provision of this title that may be waived,
modified, or otherwise affected under this section.
‘‘(8) The labor relations system developed or adjusted under
this subsection shall be binding on all bargaining units within
the Department of Defense, all employee representatives of such
units, and the Department of Defense and its subcomponents, and
shall supersede all other collective bargaining agreements for bar-
gaining units in the Department of Defense, including collective
bargaining agreements negotiated with employee representatives
at the level of recognition, except as otherwise determined by the
Secretary.
‘‘(9) Unless it is extended or otherwise provided for in law,
the authority to establish, implement and adjust the labor relations
system developed under this subsection shall expire six years after
the date of enactment of this subsection, at which time the provi-
sions of chapter 71 will apply.
H. R. 1588—241
‘‘§ 9903. Attracting highly qualified experts
‘‘(a) IN GENERAL.—The Secretary may carry out a program
using the authority provided in subsection (b) in order to attract
highly qualified experts in needed occupations, as determined by
the Secretary.
‘‘(b) AUTHORITY.—Under the program, the Secretary may—
‘‘(1) appoint personnel from outside the civil service and
uniformed services (as such terms are defined in section 2101)
to positions in the Department of Defense without regard to
any provision of this title governing the appointment of
employees to positions in the Department of Defense;
‘‘(2) prescribe the rates of basic pay for positions to which
employees are appointed under paragraph (1) at rates not in
excess of the maximum rate of basic pay authorized for senior-
level positions under section 5376, as increased by locality-
based comparability payments under section 5304, notwith-
standing any provision of this title governing the rates of pay
or classification of employees in the executive branch; and
‘‘(3) pay any employee appointed under paragraph (1) pay-
ments in addition to basic pay within the limits applicable
to the employee under subsection (d).
‘‘(c) LIMITATION ON TERM OF APPOINTMENT.—(1) Except as pro-
vided in paragraph (2), the service of an employee under an appoint-
ment made pursuant to this section may not exceed 5 years.
‘‘(2) The Secretary may, in the case of a particular employee,
extend the period to which service is limited under paragraph
(1) by up to 1 additional year if the Secretary determines that
such action is necessary to promote the Department of Defense’s
national security missions.
‘‘(d) LIMITATIONS
ON ADDITIONAL PAYMENTS.—(1) The total
amount of the additional payments paid to an employee under
this section for any 12-month period may not exceed the lesser
of the following amounts:
‘‘(A) $50,000 in fiscal year 2004, which may be adjusted
annually thereafter by the Secretary, with a percentage
increase equal to one-half of 1 percentage point less than the
percentage by which the Employment Cost Index, published
quarterly by the Bureau of Labor Statistics, for the base quarter
of the year before the preceding calendar year exceeds the
Employment Cost Index for the base quarter of the second
year before the preceding calendar year.
‘‘(B) The amount equal to 50 percent of the employee’s
annual rate of basic pay.
For purposes of this paragraph, the term ‘base quarter’ has the
meaning given such term by section 5302(3).
‘‘(2) An employee appointed under this section is not eligible
for any bonus, monetary award, or other monetary incentive for
service except for payments authorized under this section.
‘‘(3) Notwithstanding any other provision of this subsection
or of section 5307, no additional payments may be paid to an
employee under this section in any calendar year if, or to the
extent that, the employee’s total annual compensation will exceed
the maximum amount of total annual compensation payable at
the salary set in accordance with section 104 of title 3.
‘‘(e) LIMITATION ON NUMBER OF HIGHLY QUALIFIED EXPERTS.—
The number of highly qualified experts appointed and retained
H. R. 1588—242
by the Secretary under subsection (b)(1) shall not exceed 2,500
at any time.
‘‘(f) SAVINGS PROVISIONS.—In the event that the Secretary
terminates this program, in the case of an employee who, on the
day before the termination of the program, is serving in a position
pursuant to an appointment under this section—
‘‘(1) the termination of the program does not terminate
the employee’s employment in that position before the expira-
tion of the lesser of—
‘‘(A) the period for which the employee was appointed;
or
‘‘(B) the period to which the employee’s service is lim-
ited under subsection (c), including any extension made
under this section before the termination of the program;
and
‘‘(2) the rate of basic pay prescribed for the position under
this section may not be reduced as long as the employee con-
tinues to serve in the position without a break in service.
‘‘§ 9904. Special pay and benefits for certain employees out-
side the United States
‘‘The Secretary may provide to certain civilian employees of
the Department of Defense assigned to activities outside the United
States as determined by the Secretary to be in support of Depart-
ment of Defense activities abroad hazardous to life or health or
so specialized because of security requirements as to be clearly
distinguishable from normal Government employment—
‘‘(1) allowances and benefits—
‘‘(A) comparable to those provided by the Secretary
of State to members of the Foreign Service under chapter
9 of title I of the Foreign Service Act of 1980 (Public
Law 96–465, 22 U.S.C. 4081 et seq.) or any other provision
of law; or
‘‘(B) comparable to those provided by the Director of
Central Intelligence to personnel of the Central Intelligence
Agency; and
‘‘(2) special retirement accrual benefits and disability in
the same manner provided for by the Central Intelligence
Agency Retirement Act (50 U.S.C. 2001 et seq.) and in section
18 of the Central Intelligence Agency Act of 1949 (50 U.S.C.
403r).’’.
(2) The table of chapters for part III of such title is amended
by adding at the end of subpart I the following new item:
‘‘99. Department of Defense National Security Personnel System .................... 9901’’.
(b) IMPACT
ON
DEPARTMENT
OF
DEFENSE
CIVILIAN
PER-
SONNEL.—(1) Any exercise of authority under chapter 99 of such
title (as added by subsection (a)), including under any system estab-
lished under such chapter, shall be in conformance with the require-
ments of this subsection.
(2) No other provision of this Act or of any amendment made
by this Act may be construed or applied in a manner so as to
limit, supersede, or otherwise affect the provisions of this section,
except to the extent that it does so by specific reference to this
section.
H. R. 1588—243
Subtitle B—Department of Defense
Civilian Personnel Generally
SEC. 1111. PILOT PROGRAM FOR IMPROVED CIVILIAN PERSONNEL
MANAGEMENT.
(a) PILOT PROGRAM.—The Secretary of Defense may carry out
a pilot program using an automated workforce management system
to demonstrate improved efficiency in the performance of civilian
personnel management. The automated workforce management
system used for the pilot program shall be capable of automating
the following workforce management functions:
(1) Job definition.
(2) Position management.
(3) Recruitment.
(4) Staffing.
(5) Performance management.
(b) AUTHORITIES UNDER PILOT PROGRAM.—Under the pilot pro-
gram, the Secretary of Defense shall provide the Secretary of each
military department with the authority for the following:
(1) To use an automated workforce management system
for the civilian workforce of that military department to assess
the potential of such a system to do the following:
(A) Substantially reduce hiring cycle times.
(B) Lower labor costs.
(C) Increase efficiency.
(D) Improve performance management.
(E) Provide better management reporting.
(F) Enable that system to make operational new per-
sonnel management flexibilities granted under the civilian
personnel transformation program.
(2) Identify at least one regional civilian personnel center
(or equivalent) in that military department for participation
in the pilot program.
(c) DURATION OF PILOT PROGRAM.—The Secretary of Defense
may carry out the pilot program under this section at each selected
regional civilian personnel center for a period of two years beginning
not later than March 1, 2004.
SEC. 1112. CLARIFICATION AND REVISION OF AUTHORITY FOR DEM-
ONSTRATION PROJECT RELATING TO CERTAIN ACQUISI-
TION PERSONNEL MANAGEMENT POLICIES AND PROCE-
DURES.
Section 4308 of the National Defense Authorization Act for
Fiscal Year 1996 (10 U.S.C. 1701 note) is amended—
(1) in subsection (b), by striking paragraph (3) and inserting
the following:
‘‘(3) CONDITIONS.—Paragraph (2) shall not apply with
respect to a demonstration project unless—
‘‘(A) for each organization or team participating in
the demonstration project—
‘‘(i) at least one-third of the workforce participating
in the demonstration project consists of members of
the acquisition workforce; and
H. R. 1588—244
‘‘(ii) at least two-thirds of the workforce partici-
pating in the demonstration project consists of mem-
bers of the acquisition workforce and supporting per-
sonnel assigned to work directly with the acquisition
workforce; and
‘‘(B) the demonstration project commences before
October 1, 2007.’’;
(2) in subsection (d), by striking ‘‘95,000’’ and inserting
‘‘120,000’’;
(3) by redesignating subsection (e) as subsection (f); and
(4) by inserting after subsection (d) the following:
‘‘(e) EFFECT OF REORGANIZATIONS.—The applicability of para-
graph (2) of subsection (b) to an organization or team shall not
terminate by reason that the organization or team, after having
satisfied the conditions in paragraph (3) of such subsection when
it began to participate in a demonstration project under this section,
ceases to meet one or both of the conditions set forth in subpara-
graph (A) of such paragraph (3) as a result of a reorganization,
restructuring, realignment, consolidation, or other organizational
change.’’.
SEC. 1113. MILITARY LEAVE FOR MOBILIZED FEDERAL CIVILIAN
EMPLOYEES.
(a) IN GENERAL.—Subsection (b) of section 6323 of title 5,
United States Code, is amended—
(1) in paragraph (2)—
(A) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively, and at the end of clause
(ii), as so redesignated, by inserting ‘‘or’’; and
(B) by inserting ‘‘(A)’’ after ‘‘(2)’’; and
(2) by inserting the following before the text beginning
with ‘‘is entitled’’:
‘‘(B) performs full-time military service as a result of a
call or order to active duty in support of a contingency operation
as defined in section 101(a)(13) of title 10;’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall apply to military service performed on or after the date
of the enactment of this Act.
SEC. 1114. RESTORATION OF ANNUAL LEAVE FOR CERTAIN DEPART-
MENT OF DEFENSE EMPLOYEES.
(a) RESTORATION
OF
ANNUAL
LEAVE.—During the period
October 1, 1992, through December 31, 1997, all employees transfer-
ring from a closing or realigning Department of Defense installation
or activity as defined under section 6304(d)(3) of title 5, United
States Code, to another Department of Defense installation or
activity—
(1) may be deemed eligible by the Secretary of Defense
for automatic restoration of forfeited annual leave under section
6304(d)(3) of title 5, United States Code, during the year of
transfer; and
(2) may be deemed by the Secretary of Defense to have
used all forfeited annual leave properly restored under section
6304(d)(3) of title 5, United States Code, within the appropriate
time limits, only if such restored annual leave was used by
the employee or paid to the employee in the form of a lump
sum payment under section 5551(a) of title 5, United States
Code, by the last day of the 2001 leave year.
H. R. 1588—245
(b) PAYMENT OF RESTORED ANNUAL LEAVE.—(1) On or after
September 23, 1996, all employees transferring from a closing or
realigning Department of Defense installation or activity as defined
under section 6304(d)(3)(A) of title 5, United States Code, to another
Department of Defense installation or activity who, upon transfer,
were entitled to payment of a lump sum payment under section
5551(c) of title 5, United States Code, for forfeited annual leave
properly restored under section 6304(d)(3) of title 5, United States
Code—
(A) may be paid only for any such restored annual leave
currently remaining to their credit at the hourly rate payable
on the date of transfer with appropriate back pay interest;
and
(B) shall be deemed paid for all such restored annual
leave to which that employee was entitled to payment upon
transfer, but subsequently used or was otherwise paid for upon
separation.
(2) This subsection shall take effect on the date of the enactment
of this Act.
SEC. 1115. AUTHORITY TO EMPLOY CIVILIAN FACULTY MEMBERS AT
THE WESTERN HEMISPHERE INSTITUTE FOR SECURITY
COOPERATION.
Section 1595(c) of title 10, United States Code, is amended
by adding at the end the following new paragraph:
‘‘(6) The Western Hemisphere Institute for Security
Cooperation.’’.
SEC. 1116. EXTENSION OF AUTHORITY FOR EXPERIMENTAL PER-
SONNEL PROGRAM FOR SCIENTIFIC AND TECHNICAL
PERSONNEL.
(a) EXTENSION OF PROGRAM.—Subsection (e)(1) of section 1101
of the Strom Thurmond National Defense Authorization Act for
Fiscal Year 1999 (Public Law 105–261; 112 Stat. 2139; 5 U.S.C.
3104 note) is amended by striking ‘‘October 16, 2005’’ and inserting
‘‘September 30, 2008’’.
(b) COMMENSURATE EXTENSION OF REQUIREMENT FOR ANNUAL
REPORT.—Subsection (g) of such section is amended by striking
‘‘2006’’ and inserting ‘‘2009’’.
Subtitle C—Other Federal Government
Civilian Personnel Matters
SEC. 1121. MODIFICATION OF THE OVERTIME PAY CAP.
Section 5542(a)(2) of title 5, United States Code, is amended—
(1) by inserting ‘‘the greater of’’ before ‘‘one and one-half’’;
and
(2) by inserting ‘‘or the hourly rate of basic pay of the
employee’’ after ‘‘law)’’ the second place it appears.
SEC. 1122. COMMON OCCUPATIONAL AND HEALTH STANDARDS FOR
DIFFERENTIAL PAYMENTS AS A CONSEQUENCE OF EXPO-
SURE TO ASBESTOS.
(a) PREVAILING RATE SYSTEMS.—Section 5343(c)(4) of title 5,
United States Code, is amended by inserting before the semicolon
at the end the following: ‘‘, and for any hardship or hazard related
H. R. 1588—246
to asbestos, such differentials shall be determined by applying
occupational safety and health standards consistent with the
permissible exposure limit promulgated by the Secretary of Labor
under the Occupational Safety and Health Act of 1970’’.
(b) GENERAL SCHEDULE PAY RATES.—Section 5545(d) of such
title is amended by inserting before the period at the end of the
first sentence the following: ‘‘, and for any hardship or hazard
related to asbestos, such differentials shall be determined by
applying occupational safety and health standards consistent with
the permissible exposure limit promulgated by the Secretary of
Labor under the Occupational Safety and Health Act of 1970’’.
(c) APPLICABILITY.—Subject to any vested constitutional prop-
erty rights, any administrative or judicial determination after the
date of the enactment of this Act concerning backpay for a differen-
tial established under sections 5343(c)(4) or 5545(d) of such title
shall be based on occupational safety and health standards
described in the amendments made by subsections (a) and (b).
SEC. 1123. INCREASE IN ANNUAL STUDENT LOAN REPAYMENT
AUTHORITY.
(a) INCREASE.—Section 5379(b)(2)(A) of title 5, United States
Code, is amended by striking ‘‘$6,000’’ and inserting ‘‘$10,000’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall take effect on January 1, 2004.
SEC. 1124. AUTHORIZATION FOR CABINET SECRETARIES, SECRE-
TARIES OF MILITARY DEPARTMENTS, AND HEADS OF
EXECUTIVE AGENCIES TO BE PAID ON A BIWEEKLY
BASIS.
(a) AUTHORIZATION.—Section 5504 of title 5, United States
Code, is amended—
(1) by redesignating subsection (c) as subsection (d);
(2) by striking the last sentence of both subsection (a)
and subsection (b); and
(3) by inserting after subsection (b) the following:
‘‘(c) For the purposes of this section:
‘‘(1) The term ‘employee’ means—
‘‘(A) an employee in or under an Executive agency;
‘‘(B) an employee in or under the Office of the Architect
of the Capitol, the Botanic Garden, and the Library of
Congress, for whom a basic administrative workweek is
established under section 6101(a)(5) of this title; and
‘‘(C) an individual employed by the government of the
District of Columbia.
‘‘(2) The term ‘employee’ does not include—
‘‘(A) an employee on the Isthmus of Panama in the
service of the Panama Canal Commission; or
‘‘(B) an employee or individual excluded from the defi-
nition of employee in section 5541(2) of this title other
than an employee or individual excluded by clauses (ii),
(iii), and (xiv) through (xvii) of such section.
‘‘(3) Notwithstanding paragraph (2), an individual who
otherwise would be excluded from the definition of employee
shall be deemed to be an employee for purposes of this section
if the individual’s employing agency so elects, under guidelines
in regulations promulgated by the Office of Personnel Manage-
ment under subsection (d)(2).’’.
H. R. 1588—247
(b) GUIDELINES.—Subsection (d) of section 5504 of such title,
as redesignated by subsection (a), is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and
(2) by adding at the end the following new paragraph:
‘‘(2) The Office of Personnel Management shall provide guide-
lines by regulation for exemptions to be made by the heads of
agencies under subsection (c)(3). Such guidelines shall provide for
such exemptions only under exceptional circumstances.’’.
SEC. 1125. SENIOR EXECUTIVE SERVICE AND PERFORMANCE.
(a) SENIOR EXECUTIVE PAY.—Chapter 53 of title 5, United
States Code, is amended—
(1) in section 5304—
(A) in subsection (g)(2)—
(i) in subparagraph (A) by striking ‘‘subparagraphs
(A)–(E)’’ and inserting ‘‘subparagraphs (A)–(D)’’; and
(ii) in subparagraph (B) by striking ‘‘subsection
(h)(1)(F)’’ and inserting ‘‘subsection (h)(1)(D)’’;
(B) in subsection (h)(1)—
(i) by striking subparagraphs (B) and (C);
(ii) by redesignating subparagraphs (D), (E), and
(F) as subparagraphs (B), (C), and (D), respectively;
(iii) in clause (ii) by striking ‘‘or’’ at the end;
(iv) in clause (iii) by striking the period and
inserting a semicolon; and
(v) by adding at the end the following new clauses:
‘‘(iv) a Senior Executive Service position under section 3132;
‘‘(v) a position in the Federal Bureau of Investigation and
Drug Enforcement Administration Senior Executive Service
under section 3151; or
‘‘(vi) a position in a system equivalent to the system in
clause (iv), as determined by the President’s Pay Agent des-
ignated under subsection (d).’’; and
(C) in subsection (h)(2)(B)—
(i) in clause (i)—
(I) by striking ‘‘subparagraphs (A) through (E)’’
and inserting ‘‘subparagraphs (A) through (C)’’;
and
(II) by striking ‘‘clause (i) or (ii)’’ and inserting
‘‘clause (i), (ii), (iii), (iv), (v), or (vii)’’; and
(ii) in clause (ii)—
(I) by striking ‘‘paragraph (1)(F)’’ and inserting
‘‘paragraph (1)(D)’’; and
(II) by striking ‘‘clause (i) or (ii)’’ and inserting
‘‘clause (i), (ii), (iii), (iv), (v), or (vi)’’;
(2) by amending section 5382 to read as follows:
‘‘§ 5382. Establishment of rates of pay for the Senior Execu-
tive Service
‘‘(a) Subject to regulations prescribed by the Office of Personnel
Management, there shall be established a range of rates of basic
pay for the Senior Executive Service, and each senior executive
shall be paid at one of the rates within the range, based on indi-
vidual performance, contribution to the agency’s performance, or
both, as determined under a rigorous performance management
system. The lowest rate of the range shall not be less than the
minimum rate of basic pay payable under section 5376, and the
H. R. 1588—248
highest rate, for any position under this system or an equivalent
system as determined by the President’s Pay Agent designated
under section 5304(d), shall not exceed the rate for level III of
the Executive Schedule. The payment of the rates shall not be
subject to the pay limitation of section 5306(e) or 5373.
‘‘(b) Notwithstanding the provisions of subsection (a), the
applicable maximum shall be level II of the Executive Schedule
for any agency that is certified under section 5307 as having a
performance appraisal system which, as designed and applied,
makes meaningful distinctions based on relative performance.
‘‘(c) No employee may suffer a reduction in pay by reason
of transfer from an agency with an applicable maximum rate of
pay prescribed under subsection (b) to an agency with an applicable
maximum rate of pay prescribed under subsection (a).’’; and
(3) in section 5383—
(A) in subsection (a) by striking ‘‘which of the rates
established under section 5382 of this title’’ and inserting
‘‘which of the rates within a range established under section
5382’’; and
(B) in subsection (c) by striking ‘‘for any pay adjust-
ment under section 5382 of this title’’ and inserting ‘‘as
provided in regulations prescribed by the Office under sec-
tion 5385’’.
(b) POST-EMPLOYMENT RESTRICTIONS.—(1) Clause (ii) of section
207(c)(2)(A) of title 18, United States Code, is amended to read
as follows:
‘‘(ii) employed in a position which is not referred to
in clause (i) and for which that person is paid at a rate
of basic pay which is equal to or greater than 86.5 percent
of the rate of basic pay for level II of the Executive
Schedule, or, for a period of 2 years following the enactment
of the National Defense Authorization Act for Fiscal Year
2004, a person who, on the day prior to the enactment
of that Act, was employed in a position which is not referred
to in clause (i) and for which the rate of basic pay, exclusive
of any locality-based pay adjustment under section 5304
or section 5304a of title 5, was equal to or greater than
the rate of basic pay payable for level 5 of the Senior
Executive Service on the day prior to the enactment of
that Act,’’.
(2) Subchapter I of chapter 73 of title 5, United States Code,
is amended by inserting at the end the following new section:
‘‘§ 7302. Post-employment notification
‘‘(a) Not later than the effective date of the amendments made
by section 1106 of the National Defense Authorization Act for
Fiscal Year 2004, or 180 days after the date of the enactment
of that Act, whichever is later, the Office of Personnel Management
shall, in consultation with the Attorney General and the Office
of Government Ethics, promulgate regulations requiring that each
Executive branch agency notify any employee of that agency who
is subject to the provisions of section 207(c)(1) of title 18, as a
result of the amendment to section 207(c)(2)(A)(ii) of that title
by that Act.
‘‘(b) The regulations shall require that notice be given before,
or as part of, the action that affects the employee’s coverage under
section 207(c)(1) of title 18, by virtue of the provisions of section
H. R. 1588—249
207(c)(2)(A)(ii) of that title, and again when employment or service
in the covered position is terminated.’’.
(3) The table of sections for chapter 73 of title 5, United States
Code, is amended by adding after the item relating to section
7301 the following:
‘‘7302. Post-employment notification.’’.
(c) EFFECTIVE DATE AND APPLICABILITY.—(1) The amendments
made by this section shall take effect on the first day of the
first pay period beginning on or after the first January 1 following
the date of the enactment of this section.
(2) The amendments made by subsection (a) may not result
in a reduction in the rate of basic pay for any senior executive
during the first year after the effective date of those amendments.
(3) For the purposes of paragraph (2), the rate of basic pay
for a senior executive shall be deemed to be the rate of basic
pay set for the senior executive under section 5383 of title 5,
United States Code, plus applicable locality pay paid to that senior
executive, as of the date of the enactment of this Act.
(4) Until otherwise provided by law, or except as otherwise
provided by this section, any reference in a provision of law to
a rate of basic pay that is above the minimum payable and below
the maximum payable to a member of the Senior Executive Service
shall be considered a reference to the rate of basic pay payable
for level IV of the Executive Schedule.
SEC. 1126. DESIGN ELEMENTS OF PAY-FOR-PERFORMANCE SYSTEMS
IN DEMONSTRATION PROJECTS.
A pay-for-performance system may not be initiated under
chapter 47 of title 5, United States Code, after the date of the
enactment of this Act, unless it incorporates the following elements:
(1) Adherence to merit principles set forth in section 2301
of such title.
(2) A fair, credible, and transparent employee performance
appraisal system.
(3) A link between elements of the pay-for-performance
system, the employee performance appraisal system, and the
agency’s strategic plan.
(4) A means for ensuring employee involvement in the
design and implementation of the system.
(5) Adequate training and retraining for supervisors, man-
agers, and employees in the implementation and operation
of the pay-for-performance system.
(6) A process for ensuring ongoing performance feedback
and dialogue between supervisors, managers, and employees
throughout the appraisal period, and setting timetables for
review.
(7) Effective safeguards to ensure that the management
of the system is fair and equitable and based on employee
performance.
(8) A means for ensuring that adequate agency resources
are allocated for the design, implementation, and administra-
tion of the pay-for-performance system.
SEC. 1127. FEDERAL FLEXIBLE BENEFITS PLAN ADMINISTRATIVE
COSTS.
(a) IN GENERAL.—Notwithstanding any other provision of law,
an agency or other employing entity of the Government which
H. R. 1588—250
provides or plans to provide a flexible spending account option
for its employees shall not impose any fee with respect to any
of its employees in order to defray the administrative costs associ-
ated therewith.
(b) OFFSET OF ADMINISTRATIVE COSTS.—Each such agency or
employing entity that offers a flexible spending account option
under a program established or administered by the Office of Per-
sonnel Management shall periodically forward to such Office, or
entity designated by such Office, the amount necessary to offset
the administrative costs of such program which are attributable
to such agency.
(c) REPORTS.—(1) The Office shall submit a report to the Com-
mittee on Government Reform of the House of Representatives
and the Committee on Governmental Affairs of the Senate no
later than March 31, 2004, specifying the administrative costs asso-
ciated with the Governmentwide program (referred to in subsection
(b)) for fiscal year 2003, as well as the projected administrative
costs of such program for each of the 5 fiscal years thereafter.
(2) At the end of each of the first 3 calendar years in which
an agency or other employing entity offers a flexible spending
account option under this section, such agency or entity shall submit
a report to the Office of Management and Budget showing the
amount of its employment tax savings in such year which are
attributable to such option, net of administrative fees paid under
subsection (b).
SEC. 1128. EMPLOYEE SURVEYS.
(a) IN GENERAL.—Each agency shall conduct an annual survey
of its employees (including survey questions unique to the agency
and questions prescribed under subsection (b)) to assess—
(1) leadership and management practices that contribute
to agency performance; and
(2) employee satisfaction with—
(A) leadership policies and practices;
(B) work environment;
(C) rewards and recognition for professional accom-
plishment 
and 
personal 
contributions 
to 
achieving
organizational mission;
(D) opportunity for professional development and
growth; and
(E) opportunity to contribute to achieving organiza-
tional mission.
(b) REGULATIONS.—The Office of Personnel Management shall
issue regulations prescribing survey questions that should appear
on all agency surveys under subsection (a) in order to allow a
comparison across agencies.
(c) AVAILABILITY OF RESULTS.—The results of the agency sur-
veys under subsection (a) shall be made available to the public
and posted on the website of the agency involved, unless the head
of such agency determines that doing so would jeopardize or nega-
tively impact national security.
(d) AGENCY DEFINED.—For purposes of this section, the term
‘‘agency’’ means an Executive agency (as defined by section 105
of title 5, United States Code).
SEC. 1129. HUMAN CAPITAL PERFORMANCE FUND.
(a) IN GENERAL.—Subpart D of part III of title 5, United States
Code, is amended by inserting after chapter 53 the following:
H. R. 1588—251
‘‘CHAPTER 54—HUMAN CAPITAL PERFORMANCE FUND
‘‘Sec.
‘‘5401. Purpose.
‘‘5402. Definitions.
‘‘5403. Human Capital Performance Fund.
‘‘5404. Human capital performance payments.
‘‘5405. Regulations.
‘‘5406. Agency plan.
‘‘5407. Nature of payment.
‘‘5408. Appropriations.
‘‘§ 5401. Purpose
‘‘The purpose of this chapter is to promote, through the creation
of a Human Capital Performance Fund, greater performance in
the Federal Government. Monies from the Fund will be used to
reward agencies’ highest performing and most valuable employees.
This Fund will offer Federal managers a new tool to recognize
employee performance that is critical to the achievement of agency
missions.
‘‘§ 5402. Definitions
‘‘For the purpose of this chapter—
‘‘(1) ‘agency’ means an Executive agency under section 105,
but does not include the General Accounting Office;
‘‘(2) ‘employee’ includes—
‘‘(A) an individual paid under a statutory pay system
defined in section 5302(1);
‘‘(B) a prevailing rate employee, as defined in section
5342(a)(2); and
‘‘(C) a category of employees included by the Office
of Personnel Management following the review of an agency
plan under section 5403(b)(1);
but does not include—
‘‘(i) an individual paid at an annual rate of basic pay
for a level of the Executive Schedule, under subchapter
II of chapter 53, or at a rate provided for one of those
levels under another provision of law;
‘‘(ii) a member of the Senior Executive Service paid
under subchapter VIII of chapter 53, or an equivalent
system;
‘‘(iii) an administrative law judge paid under section
5372;
‘‘(iv) a contract appeals board member paid under sec-
tion 5372a;
‘‘(v) an administrative appeals judge paid under section
5372b; and
‘‘(vi) an individual in a position which is excepted from
the competitive service because of its confidential, policy-
determining, policy-making, or policy-advocating character;
and
‘‘(3) ‘Office’ means the Office of Personnel Management.
‘‘§ 5403. Human Capital Performance Fund
‘‘(a) There is hereby established the Human Capital Perform-
ance Fund, to be administered by the Office for the purpose of
this chapter.
‘‘(b)(1)(A) An agency shall submit a plan as described in section
5406 to be eligible for consideration by the Office for an allocation
H. R. 1588—252
under this section. An allocation shall be made only upon approval
by the Office of an agency’s plan.
‘‘(B)(i) After the reduction for training required under section
5408, ninety percent of the remaining amount appropriated to the
Fund may be allocated by the Office to the agencies. Of the amount
to be allocated, an agency’s pro rata distribution may not exceed
its pro rata share of Executive branch payroll.
‘‘(ii) If the Office does not allocate an agency’s full pro rata
share, the undistributed amount remaining from that share will
become available for distribution to other agencies, as provided
in subparagraph (C).
‘‘(C)(i) After the reduction for training under section 5408,
ten percent of the remaining amount appropriated to the Fund,
as well as the amount of the pro rata share not distributed because
of an agency’s failure to submit a satisfactory plan, shall be allocated
among agencies with exceptionally high-quality plans.
‘‘(ii) An agency with an exceptionally high-quality plan is
eligible to receive an additional distribution in addition to its full
pro rata distribution.
‘‘(2) Each agency is required to provide to the Office such
payroll information as the Office specifies necessary to determine
the Executive branch payroll.
‘‘§ 5404. Human capital performance payments
‘‘(a)(1) Notwithstanding any other provision of law, the Office
may authorize an agency to provide human capital performance
payments to individual employees based on exceptional performance
contributing to the achievement of the agency mission.
‘‘(2) The number of employees in an agency receiving payments
from the Fund, in any year, shall not be more than the number
equal to 15 percent of the agency’s average total civilian full-
and part-time permanent employment for the previous fiscal year.
‘‘(b)(1) A human capital performance payment provided to an
individual employee from the Fund, in any year, shall not exceed
10 percent of the employee’s rate of basic pay.
‘‘(2) The aggregate of an employee’s rate of basic pay, adjusted
by any locality-based comparability payments, and human capital
performance pay, as defined by regulation, may not exceed the
rate of basic pay for Executive Level IV in any year.
‘‘(3) Any human capital performance payment provided to an
employee from the Fund is in addition to any annual pay adjustment
(under section 5303 or any similar provision of law) and any locality-
based comparability payment that may apply.
‘‘(c) No monies from the Human Capital Performance Fund
may be used to pay for a new position, for other performance-
related payments, or for recruitment or retention incentives paid
under sections 5753 and 5754.
‘‘(d)(1) An agency may finance initial human capital perform-
ance payments using monies from the Human Capital Performance
Fund, as available.
‘‘(2) In subsequent years, continuation of previously awarded
human capital performance payments shall be financed from other
agency funds available for salaries and expenses.
‘‘§ 5405. Regulations
‘‘The Office shall issue such regulations as it determines to
be necessary for the administration of this chapter, including the
H. R. 1588—253
administration of the Fund. The Office’s regulations shall include
criteria governing—
‘‘(1) an agency plan under section 5406;
‘‘(2) the allocation of monies from the Fund to agencies;
‘‘(3) the nature, extent, duration, and adjustment of, and
approval processes for, payments to individual employees under
this chapter;
‘‘(4) the relationship to this chapter of agency performance
management systems;
‘‘(5) training of supervisors, managers, and other individ-
uals involved in the process of making performance distinctions;
and
‘‘(6) the circumstances under which funds may be allocated
by the Office to an agency in amounts below or in excess
of the agency’s pro rata share.
‘‘§ 5406. Agency plan
‘‘(a) To be eligible for consideration by the Office for an alloca-
tion under this section, an agency shall—
‘‘(1) develop a plan that incorporates the following elements:
‘‘(A) adherence to merit principles set forth in section
2301;
‘‘(B) a fair, credible, and transparent employee perform-
ance appraisal system;
‘‘(C) a link between the pay-for-performance system,
the employee performance appraisal system, and the
agency’s strategic plan;
‘‘(D) a means for ensuring employee involvement in
the design and implementation of the system;
‘‘(E) adequate training and retraining for supervisors,
managers, and employees in the implementation and oper-
ation of the pay-for-performance system;
‘‘(F) a process for ensuring ongoing performance feed-
back and dialogue between supervisors, managers, and
employees throughout the appraisal period, and setting
timetables for review;
‘‘(G) effective safeguards to ensure that the manage-
ment of the system is fair and equitable and based on
employee performance; and
‘‘(H) a means for ensuring that adequate agency
resources are allocated for the design, implementation, and
administration of the pay-for-performance system;
‘‘(2) upon approval, receive an allocation of funding from
the Office;
‘‘(3) make payments to individual employees in accordance
with the agency’s approved plan; and
‘‘(4) provide such information to the Office regarding pay-
ments made and use of funds received under this section as
the Office may specify.
‘‘(b) The Office, in consultation with the Chief Human Capital
Officers Council, shall review and approve an agency’s plan before
the agency is eligible to receive an allocation of funding from the
Office.
‘‘(c) The Chief Human Capital Officers Council shall include
in its annual report to Congress under section 1303(d) of the Home-
land Security Act of 2002 an evaluation of the formulation and
implementation of agency performance management systems.
H. R. 1588—254
‘‘§ 5407. Nature of payment
‘‘Any payment to an employee under this section shall be part
of the employee’s basic pay for the purposes of subchapter III
of chapter 83, and chapters 84 and 87, and for such other purposes
(other than chapter 75) as the Office shall determine by regulation.
‘‘§ 5408. Appropriations
‘‘There is authorized to be appropriated $500,000,000 for fiscal
year 2004, and, for each subsequent fiscal year, such sums as
may be necessary to carry out the provisions of this chapter. In
the first year of implementation, up to 10 percent of the amount
appropriated to the Fund shall be available to participating agencies
to train supervisors, managers, and other individuals involved in
the appraisal process on using performance management systems
to make meaningful distinctions in employee performance and on
the use of the Fund.’’.
(b) CLERICAL AMENDMENT.—The table of chapters for part III
of title 5, United States Code, is amended by inserting after the
item relating to chapter 53 the following:
‘‘54.
Human Capital Performance Fund ........................................................... 5401’’.
TITLE XII—MATTERS RELATING TO
OTHER NATIONS
Subtitle A—Matters Relating to Iraq
Sec. 1201. Medical assistance to Iraqi children injured during Operation Iraqi Free-
dom.
Sec. 1202. Report on the conduct of Operation Iraqi Freedom.
Sec. 1203. Report on Department of Defense security and reconstruction activities
in Iraq.
Sec. 1204. Report on acquisition by Iraq of advanced weapons.
Sec. 1205. Sense of Congress on use of small businesses, minority-owned busi-
nesses, and women-owned businesses in efforts to rebuild Iraq.
Subtitle B—Matters Relating to Export Protections
Sec. 1211. Review of export protections for military superiority resources.
Sec. 1212. Report on Department of Defense costs relating to national security con-
trols on satellite exports.
Subtitle C—Administrative Requirements and Authorities
Sec. 1221. Authority to use funds for payment of costs of attendance of foreign visi-
tors under Regional Defense Counterterrorism Fellowship Program.
Sec. 1222. Recognition of superior noncombat achievements or performance by
members of friendly foreign forces and other foreign nationals.
Sec. 1223. Expansion of authority to waive charges for costs of attendance at
George C. Marshall European Center for Security Studies.
Sec. 1224. Authority for check cashing and currency exchange services to be pro-
vided to foreign military members participating in certain activities with
United States forces.
Sec. 1225. Depot maintenance and repair work on certain types of trainer aircraft
to be transferred to foreign countries as excess aircraft.
Subtitle D—Other Reports and Sense of Congress Statements
Sec. 1231. Annual report on the NATO Prague Capabilities Commitment and the
NATO Response Force.
Sec. 1232. Report on actions that could be taken regarding countries that initiate
certain legal actions against United States officials or members of the
Armed Forces.
Sec. 1233. Sense of Congress on redeployment of United States forces in Europe.
Sec. 1234. Sense of Congress concerning Navy port calls in Israel.
H. R. 1588—255
Subtitle A—Matters Relating to Iraq
SEC. 1201. MEDICAL ASSISTANCE TO IRAQI CHILDREN INJURED
DURING OPERATION IRAQI FREEDOM.
(a) ASSISTANCE.—Subject to subsections (c) and (d), the Sec-
retary of Defense shall, to the maximum extent practicable, provide
all necessary health care and related support to provide needed
medical assistance to Iraqi children who, as determined by the
Secretary of Defense, were injured during and as a result of Oper-
ation Iraqi Freedom. Such assistance shall be provided in an expedi-
tious manner.
(b) RELATED SUPPORT.—Related support under subsection (a)
includes transportation on aeromedical evacuation aircraft of the
Department of Defense on a space-available basis.
(c) LIMITATIONS RELATING TO MEDICAL CARE.—Assistance may
be provided to a child under subsection (a)—
(1) only if adequate treatment from other sources in Iraq
or neighboring countries is not available; and
(2) only after completion of an evaluation by a physician
or other appropriate medical personnel of the United States
Armed Forces.
(d) LIMITATION RELATING TO UNITED STATES MILITARY OPER-
ATIONS.—Assistance may be provided to a child under subsection
(a) only if the provision of such assistance would not adversely
affect military operations of the United States.
SEC. 1202. REPORT ON THE CONDUCT OF OPERATION IRAQI FREEDOM.
(a) REPORT REQUIRED.—(1) Not later than March 31, 2004,
the Secretary of Defense shall submit to the congressional defense
committees and the Permanent Select Committee on Intelligence
of the House of Representatives and the Select Committee on Intel-
ligence of the Senate a report on the preparation for and conduct
of military operations under Operation Iraqi Freedom from March
19, 2003, to May 1, 2003.
(2) The report shall be prepared in consultation with the Chair-
man of the Joint Chiefs of Staff, the commander of the United
States Central Command, and such other officers and officials as
the Secretary considers appropriate.
(b) CONTENT.—The report shall include a discussion, with a
particular emphasis on accomplishments and shortcomings and on
near-term and long-term corrective actions to address those short-
comings, of the following:
(1) The military objectives of the international coalition
conducting Operation Iraqi Freedom, the military strategy
selected to achieve the objectives, and an assessment of the
execution of the military strategy.
(2) The deployment process, including the adaptability of
the process to unforeseen contingencies and changing require-
ments.
(3) The effectiveness of the reserve component forces used
in Operation Iraqi Freedom, including the reserve component
mobilization process, the timeliness of mobilization notification,
training, operational effectiveness in theater, and subsequent
demobilization.
(4) The use and performance of major items of United
States military equipment, weapon systems, and munitions
H. R. 1588—256
(including items classified under special access procedures and
items drawn from prepositioned stocks) and any expected effects
of the experience with the use and performance of those items
on the doctrinal and tactical employment of such items and
on plans for continuing the acquisition of such items.
(5) The effectiveness of joint air operations, including the
doctrine for the employment of close air support in the varied
environments of Operation Iraqi Freedom, and the effectiveness
of attack helicopter operations.
(6) The use of special operations forces, including oper-
ational and intelligence uses classified under special access
procedures.
(7) The scope of logistics support, including support from
other nations.
(8) The incidence of accidental fratricide, together with
a discussion of the effectiveness of the tracking of friendly
forces and of the combat identification systems in mitigating
friendly fire incidents.
(9) The adequacy of spectrum and bandwidth to transmit
all necessary information to operational forces and assets,
including unmanned aerial vehicles, ground vehicles, and indi-
vidual soldiers.
(10) The effectiveness of information operations, including
the effectiveness of Commando Solo and other psychological
operations assets, in achieving established objectives, together
with a description of technological and other restrictions on
the use of psychological operations capabilities.
(11) The adequacy of United States and coalition intel-
ligence 
and 
counterintelligence 
systems 
and 
personnel,
including contributions regarding bomb damage assessments
and particularly including United States tactical intelligence
and related activities (TIARA) programs and the Joint Military
Intelligence Program (JMIP), as well as the adequacy of such
support to facilitate searches for weapons of mass destruction.
(12) The rapid insertion and integration, if any, of develop-
mental but mission-essential equipment during all phases of
the operation.
(13) The most critical lessons learned that could lead to
long-term doctrinal, organizational, and technological changes
(including new equipment, weapons systems, and munitions)
and the probable effects that an implementation of those
changes would have on current visions, goals, and plans for
transformation of the Armed Forces and for joint and combined
operations.
(14) The role of the law of armed conflict in the planning
and execution of military operations by United States forces
and the other coalition forces and the effects on operations
of Iraqi compliance or noncompliance with the law of armed
conflict.
(15) The policies and procedures relating to the media,
including the use of embedded media.
(16) The results of a study, carried out by the Secretary
of Defense, regarding the availability of family support services
provided for the dependents of members of the National Guard
and other reserve components of the Armed Forces who are
called or ordered to active duty.
H. R. 1588—257
(17) The direct and indirect cost of military operations,
including an assessment of the total incremental expenditures
made by the Department of Defense as a result of Operation
Iraqi Freedom.
(c) FORMS
OF REPORT.—The report shall be submitted in
unclassified form with a classified annex, if necessary.
SEC. 1203. REPORT ON DEPARTMENT OF DEFENSE SECURITY AND
RECONSTRUCTION ACTIVITIES IN IRAQ.
(a) REPORT REQUIRED.—Not later than 90 days after the date
of the enactment of this Act, the Secretary of Defense shall submit
to Congress a report on the security and reconstruction activities
of the Department of Defense in Iraq.
(b) REPORT ELEMENTS.—The report shall discuss the range
of infrastructure reconstruction, civil administration, humanitarian
assistance, interim governance, and political development activities
undertaken in Iraq by officials of the Department and by those
civilians reporting to the Secretary of Defense and the missions
undertaken in Iraq by United States military forces. In particular,
the report shall include a discussion of the following:
(1) The evolution of the organizational structure of the
civilian groups reporting to the Secretary, including the Office
of Reconstruction and Humanitarian Assistance and the Office
of the Coalition Provisional Authority, on issues of Iraqi
administration and reconstruction and the factors influencing
that evolution.
(2) The relationship of the Department of Defense with
other United States departments and agencies involved in
administration and reconstruction planning and execution in
Iraq.
(3) The relationship of Department of Defense entities,
including the Office of Reconstruction and Humanitarian Assist-
ance and the Office of the Coalition Provisional Authority,
with intergovernmental and nongovernmental organizations
contributing to the reconstruction and governance efforts.
(4) Progress made to the date of the report in—
(A) rebuilding Iraqi infrastructure;
(B) providing for the humanitarian needs of the Iraqi
people;
(C) reconstituting the Iraqi governmental bureaucracy
and its provision of services;
(D) developing mechanisms of fully transitioning Iraq
to representative self-government; and
(E) recruiting, training, and fielding Iraqi police and
military forces.
(5) Progress made to the date of the report by Department
of Defense civilians and military personnel in accounting for
any Iraqi weapons of mass destruction and associated weapons
capabilities.
(6) Progress made to the date of the report by United
States military personnel in providing security in Iraq and
in transferring security functions to a reconstituted Iraqi police
force and military.
(7) The Secretary’s assessment of the scope of the ongoing
needed commitment of United States military forces and of
the remaining tasks to be completed by Department of Defense
civilian personnel in the governance and reconstruction areas,
H. R. 1588—258
including an estimate of the total expenditures the Department
of Defense expects to make for security and reconstruction
activities in Iraq.
(8) The Secretary’s assessment of the effect that the United
States military presence in Iraq will have on replacement and
unit rotation policies, including the overall effect on global
United States military deployments.
SEC. 1204. REPORT ON ACQUISITION BY IRAQ OF ADVANCED WEAPONS.
(a) REPORT.—Not later than one year after the date of the
enactment of this Act, the Secretary of Defense shall submit to
the Committees on Armed Services and Foreign Relations of the
Senate and the Committees on Armed Services and International
Relations of the House of Representatives a report on the acquisition
by Iraq of weapons of mass destruction and associated delivery
systems and the acquisition by Iraq of advanced conventional
weapons.
(b) MATTERS TO BE INCLUDED.—The report shall include the
following:
(1) A description of any materials, technology, and know-
how that Iraq was able to obtain for its nuclear, chemical,
biological, ballistic missile, and unmanned aerial vehicle pro-
grams, and advanced conventional weapons programs, from
1979 through April 2003 from entities (including Iraqi citizens)
outside of Iraq, as well as a description of how Iraq obtained
these capabilities from those entities.
(2) An assessment of the degree to which United States,
foreign, and multilateral export control regimes prevented
acquisition by Iraq of weapons of mass destruction-related tech-
nology and materials and advanced conventional weapons and
delivery systems since the commencement of international
inspections in Iraq.
(3) An assessment of the effectiveness of United Nations
sanctions at halting the flow of militarily-useful contraband
to Iraq from 1991 until the end of Operation Iraqi Freedom.
(4) An assessment of how Iraq was able to evade Inter-
national Atomic Energy Agency and United Nations inspections
regarding chemical, nuclear, biological, and missile weapons
and related capabilities.
(5) Identification and a catalog of the entities and countries
that transferred militarily useful contraband and items
described pursuant to paragraph (1) to Iraq between 1991 and
the end of major combat operations of Operation Iraqi Freedom
on May 1, 2003, and the nature of that contraband and of
those items.
(c) FORM
OF
REPORT.—The report shall be submitted in
unclassified form with a classified annex, if necessary.
SEC. 1205. SENSE OF CONGRESS ON USE OF SMALL BUSINESSES,
MINORITY-OWNED 
BUSINESSES, 
AND 
WOMEN-OWNED
BUSINESSES IN EFFORTS TO REBUILD IRAQ.
It is the sense of Congress that the Secretary of Defense should
ensure that outreach procedures are in place to provide information
to small businesses, minority-owned businesses, and women-owned
businesses regarding Department of Defense requirements and con-
tract opportunities for the rebuilding of Iraq.
H. R. 1588—259
Subtitle B—Matters Relating to Export
Protections
SEC. 1211. REVIEW OF EXPORT PROTECTIONS FOR MILITARY SUPERI-
ORITY RESOURCES.
(a) REVIEW REQUIRED.—The Secretary of Defense shall carry
out a review—
(1) to identify goods or technology (as defined in section
16 of the Export Administration Act of 1979 (50 U.S.C. App.
2415)) that, if obtained by a potential adversary, could signifi-
cantly undermine the military superiority or qualitative mili-
tary advantage of the United States over potential adversaries
or otherwise contribute to the acquisition of weapons of mass
destruction and their delivery systems; and
(2) to determine whether any of the items or technologies
identified under paragraph (1) are not currently controlled for
export purposes on either the Commerce Control List or the
United States Munitions List.
(b) ANNUAL REPORTS.—(1) Not later than March 1, 2004, the
Secretary of Defense shall submit to the Committee on Armed
Services of the Senate and the Committee on Armed Services of
the House of Representatives an unclassified report, with a classi-
fied annex as necessary, on the results of the review under sub-
section (a).
(2) For each of the next two years after the submission of
the report under paragraph (1), the Secretary shall submit to those
committees an update on that report. Such updates shall be sub-
mitted not later than March 1, 2005, and not later than March
1, 2006.
SEC. 1212. REPORT ON DEPARTMENT OF DEFENSE COSTS RELATING
TO NATIONAL SECURITY CONTROLS ON SATELLITE
EXPORTS.
(a) STUDY.—The Inspector General of the Department of
Defense shall conduct a study of the costs incurred by the Depart-
ment of Defense for each fiscal year from fiscal year 1999 through
fiscal year 2003 relating to national security controls on satellite
exports. As part of such study, the Inspector General shall identify
for each such fiscal year the amounts expended by the Department
of Defense (1) for the monitoring of launches of satellites and
related items in a foreign country pursuant to section 1514 of
the Strom Thurmond National Defense Authorization Act for Fiscal
Year 1999 (Public Law 105–261; 22 U.S.C. 2778 note), and (2)
in connection with applications for licenses for the export of sat-
ellites and related items (as that term is defined in section 1516
of that Act).
(b) REPORT.—Not later than April 1, 2004, the Inspector Gen-
eral shall submit to the Committees on Armed Services of the
Senate and the House of Representatives a report on the study
under subsection (a). The report shall include the following:
(1) An identification and assessment of the costs referred
to in subsection (a), shown in the aggregate and separately,
by fiscal year and by clauses (1) and (2) of that subsection.
(2) A review of the costs referred to in clause (1) of sub-
section (a) for which the Department of Defense has been
reimbursed by the person or entity receiving the satellite launch
H. R. 1588—260
monitoring services involved, including the extent to which
indirect costs were included in such reimbursement.
Subtitle C—Administrative Requirements
and Authorities
SEC. 1221. AUTHORITY TO USE FUNDS FOR PAYMENT OF COSTS OF
ATTENDANCE OF FOREIGN VISITORS UNDER REGIONAL
DEFENSE COUNTERTERRORISM FELLOWSHIP PROGRAM.
(a) AUTHORITY TO USE FUNDS.—(1) Subchapter I of chapter
134 of title 10, United States Code, is amended by adding at
the end the following new section:
‘‘§ 2249c. Authority to use appropriated funds for costs of
attendance of foreign visitors under Regional
Defense Counterterrorism Fellowship Program
‘‘(a) AUTHORITY TO USE FUNDS.—Under regulations prescribed
by the Secretary of Defense, funds appropriated to the Department
of Defense may be used to pay any costs associated with the
attendance of foreign military officers, ministry of defense officials,
or security officials at United States military educational institu-
tions, regional centers, conferences, seminars, or other training
programs conducted under the Regional Defense Counterterrorism
Fellowship Program, including costs of transportation and travel
and subsistence costs.
‘‘(b) LIMITATION.—The total amount of funds used under the
authority in subsection (a) in any fiscal year may not exceed
$20,000,000.
‘‘(c) ANNUAL REPORT.—Not later than December 1 of each year,
the Secretary of Defense shall submit to Congress a report on
the administration of this section during the fiscal year ended
in such year. The report shall include the following matters:
‘‘(1) A complete accounting of the expenditure of appro-
priated funds for purposes authorized under subsection (a),
including—
‘‘(A) the countries of the foreign officers and officials
for whom costs were paid; and
‘‘(B) for each such country, the total amount of the
costs paid.
‘‘(2) The training courses attended by the foreign officers
and officials, including a specification of which, if any, courses
were conducted in foreign countries.
‘‘(3) An assessment of the effectiveness of the Regional
Defense Counterterrorism Fellowship Program in increasing
the cooperation of the governments of foreign countries with
the United States in the global war on terrorism.
‘‘(4) A discussion of any actions being taken to improve
the program.’’.
(2) The table of sections at the beginning of such subchapter
is amended by adding at the end the following new item:
‘‘2249c. Authority to use appropriated funds for costs of attendance of foreign visi-
tors under Regional Defense Counterterrorism Fellowship Program.’’.
(b) NOTIFICATION OF CONGRESS.—Not later than December 1,
2003, the Secretary of Defense shall—
H. R. 1588—261
(1) prescribe the final regulations for carrying out section
2249c of title 10, United States Code, as added by subsection
(a); and
(2) notify the congressional defense committees of the
prescription of such regulations.
SEC. 1222. RECOGNITION OF SUPERIOR NONCOMBAT ACHIEVEMENTS
OR PERFORMANCE BY MEMBERS OF FRIENDLY FOREIGN
FORCES AND OTHER FOREIGN NATIONALS.
(a) AUTHORITY.—Chapter 53 of title 10, United States Code,
is amended by inserting after section 1051a the following new
section:
‘‘§ 1051b. Bilateral or regional cooperation programs: awards
and mementos to recognize superior noncombat
achievements or performance
‘‘(a) GENERAL AUTHORITY.—The Secretary of Defense may
present awards and mementos purchased with funds appropriated
for operation and maintenance of the armed forces to recognize
superior noncombat achievements or performance by members of
friendly foreign forces and other foreign nationals that significantly
enhance or support the National Security Strategy of the United
States.
‘‘(b) ACTIVITIES THAT MAY BE RECOGNIZED.—Activities that
may be recognized under subsection (a) include superior achieve-
ment or performance that—
‘‘(1) plays a crucial role in shaping the international secu-
rity environment in ways that protect and promote United
States interests;
‘‘(2) supports or enhances United States overseas presence
and 
peacetime 
engagement 
activities, 
including 
defense
cooperation initiatives, security assistance training and pro-
grams, and training and exercises with the armed forces;
‘‘(3) helps to deter aggression and coercion, build coalitions,
and promote regional stability; or
‘‘(4) serves as a role model for appropriate conduct by
military forces in emerging democracies.
‘‘(c) LIMITATION.—Expenditures for the purchase or production
of mementos for award under this section may not exceed the
minimal value in effect under section 7342(a)(5) of title 5.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of such chapter is amended by inserting after the item relating
to section 1051a the following new item:
‘‘1051b. Bilateral or regional cooperation programs: awards and mementos to recog-
nize superior noncombat achievements or performance.’’.
SEC. 1223. EXPANSION OF AUTHORITY TO WAIVE CHARGES FOR COSTS
OF ATTENDANCE AT GEORGE C. MARSHALL EUROPEAN
CENTER FOR SECURITY STUDIES.
Section 1306(b)(1) of the National Defense Authorization Act
for Fiscal Year 1995 (Public Law 103–337; 108 Stat. 2892) is
amended by striking ‘‘of cooperation partner states of the North
Atlantic Council or the Partnership for Peace’’ and inserting ‘‘from
states located in Europe or the territory of the former Soviet Union’’.
H. R. 1588—262
SEC. 
1224. 
AUTHORITY 
FOR 
CHECK 
CASHING 
AND 
CURRENCY
EXCHANGE SERVICES TO BE PROVIDED TO FOREIGN
MILITARY 
MEMBERS 
PARTICIPATING 
IN 
CERTAIN
ACTIVITIES WITH UNITED STATES FORCES.
(a) AUTHORITY.—Subsection (b) of section 3342 of title 31,
United States Code, is amended by adding at the end the following
new paragraph:
‘‘(8) A member of the military forces of an allied or coalition
nation who is participating in a combined operation, combined
exercise, or combined humanitarian or peacekeeping mission
with the Armed Forces of the United States, but—
‘‘(A) only if—
‘‘(i) such disbursing official action for members
of the military forces of that nation is approved by
the senior United States military commander assigned
to that operation, exercise, or mission; and
‘‘(ii) that nation has guaranteed payment for any
deficiency resulting from such disbursing official action;
and
‘‘(B) in the case of negotiable instruments, only for
a negotiable instrument drawn on a financial institution
located in the United States or on a foreign branch of
such an institution.’’.
(b) TECHNICAL
AMENDMENTS.—That subsection is further
amended—
(1) by striking ‘‘only for—’’ in the matter preceding para-
graph (1) and inserting ‘‘only for the following:’’;
(2) by striking ‘‘an’’ at the beginning of paragraph (1)
and inserting ‘‘An’’;
(3) by striking ‘‘personnel’’ in paragraphs (2) and (6) and
inserting ‘‘Personnel’’;
(4) by striking ‘‘a’’ at the beginning of paragraphs (3),
(4), (5), and (7) and inserting ‘‘A’’;
(5) by striking the semicolon at the end of paragraphs
(1) through (5) and inserting a period;
(6) by striking ‘‘; or’’ at the end of paragraph (6) and
inserting a period; and
(7) by striking ‘‘1752(1))’’ in paragraph (7) and inserting
‘‘1752(1)))’’.
SEC. 1225. DEPOT MAINTENANCE AND REPAIR WORK ON CERTAIN
TYPES OF TRAINER AIRCRAFT TO BE TRANSFERRED TO
FOREIGN COUNTRIES AS EXCESS AIRCRAFT.
(a) 
DEPOT
MAINTENANCE
AND
REPAIR
WORK
BEFORE
TRANSFER.—Before an excess trainer aircraft of a type specified
in subsection (b) is transferred to a foreign country for the purpose
of flight operations by that country, the Secretary of Defense shall
make all reasonable efforts to ensure that the aircraft receives
necessary depot maintenance and repair work and that such work
is performed in the United States.
(b) COVERED TYPES OF AIRCRAFT.—Subsection (a) applies to
the following types of trainer aircraft:
(1) T–2 Buckeye aircraft.
(2) T–37 Tweet aircraft.
(c) WORK TO BE PERFORMED AT NO COST TO DOD.—Any work
referred to in subsection (a) shall be performed at no cost to the
Department of Defense.
H. R. 1588—263
Subtitle D—Other Reports and Sense of
Congress Statements
SEC. 1231. ANNUAL REPORT ON THE NATO PRAGUE CAPABILITIES
COMMITMENT AND THE NATO RESPONSE FORCE.
(a) FINDINGS.—Congress makes the following findings:
(1) At the meeting of the North Atlantic Council held
in Prague in November 2002, the heads of states and govern-
ments of the North Atlantic Treaty Organization (NATO)
launched a Prague Capabilities Commitment and decided to
create a NATO Response Force.
(2) The Prague Capabilities Commitment is part of the
continuing NATO effort to improve and develop new military
capabilities for modern warfare in a high-threat environment.
As part of this commitment, individual NATO allies have made
firm and specific political commitments to improve their
capabilities in the areas of—
(A) chemical, biological, radiological, and nuclear
defense;
(B) intelligence, surveillance, and target acquisition;
(C) air-to-ground surveillance;
(D) command, control, and communications;
(E) combat effectiveness, including precision guided
munitions and suppression of enemy air defenses;
(F) strategic air and sea lift;
(G) air-to-air refueling; and
(H) deployable combat support and combat service sup-
port units.
(3) The NATO Response Force is envisioned to be a techno-
logically advanced, flexible, deployable, interoperable, and
sustainable force that includes land, sea, and air elements
ready to move quickly to wherever needed, as determined by
the North Atlantic Council. The NATO Response Force is also
intended to be a catalyst for focusing and promoting improve-
ments in NATO’s military capabilities. It is expected to have
initial operational capability by October 2004, and full oper-
ational capability by October 2006.
(b) ANNUAL REPORT.—(1) Not later than January 31 of each
year through 2008, the Secretary of Defense shall submit to the
congressional committees specified in paragraph (5) a report, to
be prepared in consultation with the Secretary of State, on
implementation of the Prague Capabilities Commitment and
development of the NATO Response Force by the member nations
of the North Atlantic Treaty Organization (NATO).
(2) The annual report under this subsection shall include the
following matters:
(A) A description of the actions taken by NATO as a whole
and by each member nation of NATO other than the United
States to further the Prague Capabilities Commitment,
including any actions taken to improve capability shortfalls
in the areas identified for improvement.
(B) A description of the actions taken by NATO as a whole
and by each member nation of NATO, including the United
States, to create the NATO Response Force.
(C) A discussion of the relationship between NATO’s efforts
to improve capabilities through the Prague Capabilities
H. R. 1588—264
Commitment and those of the European Union to enhance
European capabilities through the European Capabilities Action
Plan, including the extent to which they are mutually rein-
forcing.
(D) A discussion of NATO decisionmaking on the
implementation of the Prague Capabilities Commitment and
the development of the NATO Response Force, including—
(i) an assessment of whether the Prague Capabilities
Commitment and the NATO Response Force are the sole
jurisdiction of the Defense Planning Committee, the North
Atlantic Council, or the Military Committee;
(ii) a description of the circumstances which led to
the defense, military, security, and nuclear decisions of
NATO on matters such as the Prague Capabilities Commit-
ment and the NATO Response Force being made in bodies
other than the Defense Planning Committee;
(iii) a description of the extent to which any member
that does not participate in the integrated military struc-
ture of NATO contributes to each of the component commit-
tees of NATO, including any and all committees relevant
to the Prague Capabilities Commitment and the NATO
Response Force;
(iv) a description of the extent to which any member
that does not participate in the integrated military struc-
ture of NATO participates in deliberations and decisions
of NATO on resource policy, contribution ceilings, infra-
structure, force structure, modernization, threat assess-
ments, training, exercises, deployments, and other issues
related to the Prague Capabilities Commitment or the
NATO Response Force;
(v) a description and assessment of the impediments,
if any, that would preclude or limit NATO from conducting
deliberations and making decisions on matters such as
the Prague Capabilities Commitment or the NATO
Response Force solely in the Defense Planning Committee;
and
(vi) the recommendations of the Secretary of Defense
on streamlining defense, military, and security decision-
making within NATO relating to the Prague Capabilities
Commitment, the NATO Response Force, and other mat-
ters, including an assessment of the feasibility and advis-
ability of the greater utilization of the Defense Planning
Committee for such purposes.
(3) In the case of a report under this subsection after the
first such report, the information submitted in such report under
any of clauses (i) through (vi) of subparagraph (D) of paragraph
(2) may consist solely of an update of any information previously
submitted under that clause in a preceding report under this sub-
section.
(4) Each report under this subsection shall be submitted in
unclassified form, but may also be submitted in classified form
if necessary.
(5) The committees specified in this paragraph are—
(A) the Committee on Armed Services and the Committee
on Foreign Relations of the Senate; and
(B) the Committee on Armed Services and the Committee
on International Relations of the House of Representatives.
H. R. 1588—265
SEC. 1232. REPORT ON ACTIONS THAT COULD BE TAKEN REGARDING
COUNTRIES THAT INITIATE CERTAIN LEGAL ACTIONS
AGAINST UNITED STATES OFFICIALS OR MEMBERS OF
THE ARMED FORCES.
(a) FINDING.—Congress finds that actions for or on behalf of
a foreign government that constitute attempts to commence legal
proceedings against, or attempts to compel the appearance of or
production of documents from, any current or former official or
employee of the United States or member of the Armed Forces
of the United States relating to the performance of official duties,
other than pursuant to a status of forces agreement or other inter-
national agreement to which the United States is a party, may
have a negative effect on the ability of the United States to take
necessary and timely military action.
(b) REPORT.—Not later than 60 days after the date of the
enactment of this Act, the Secretary of Defense shall submit to
Congress a report on appropriate steps that could be taken by
the Department of Defense (such as restrictions on military travel,
limitations on military support and exchange programs, and consid-
eration of relocating, or limiting funding for, United States or
allied military commands, headquarters, or organizations) to
respond to an action by a foreign government described in sub-
section (a).
SEC. 1233. SENSE OF CONGRESS ON REDEPLOYMENT OF UNITED
STATES FORCES IN EUROPE.
(a) FINDINGS.—Congress makes the following findings:
(1) In March 1999, in its initial round of expansion, the
North Atlantic Treaty Organization (NATO) admitted Poland,
the Czech Republic, and Hungary to the Alliance.
(2) At the Prague Summit on November 21–22, 2002, the
NATO heads of state and government invited the countries
of Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia,
and Slovenia to join the Alliance.
(3) The countries admitted in the initial round of expansion
referred to in paragraph (1) and the seven new invitee nations
referred to in paragraph (2) will in combination significantly
alter the nature of the Alliance.
(4) During the first 50 years of the Alliance, NATO materi-
ally contributed to the security and stability of Western Europe,
bringing peace and prosperity to the member nations.
(5) The expansion of NATO is an opportunity to assist
the invitee nations in gaining the capabilities to ensure peace,
prosperity, and democracy for themselves during the next 50
years of the Alliance.
(6) The military structure and mission of NATO has
changed, no longer being focused on the threat of a Soviet
invasion, but evolving to handle new threats and new missions
in the area of crisis management, peacekeeping, and peace-
support in and beyond the Euro-Atlantic area of operations.
(b) SENSE OF CONGRESS.—In light of the findings in subsection
(a), it is the sense of Congress that—
(1) the expansion of the North Atlantic Treaty Organization
Alliance and the evolution of the military mission of that Alli-
ance requires a fundamental reevaluation of the current posture
of United States forces stationed in Europe; and
H. R. 1588—266
(2) the Secretary of Defense, in consultation with the Sec-
retary of State, should—
(A) initiate a reevaluation referred to in paragraph
(1); and
(B) in carrying out such a reevaluation, consider a
military posture that takes maximum advantage of basing
and training opportunities in the newly admitted and
invitee states referred to in paragraphs (1) and (2), respec-
tively, of subsection (a).
SEC. 1234. SENSE OF CONGRESS CONCERNING NAVY PORT CALLS IN
ISRAEL.
It is the sense of Congress that—
(1) the United States has invested significant amounts
of funds in expanding the capacity and security of the port
of Haifa, Israel, and the United States Navy should be able
to implement the necessary force protection measures that
would enable it to take advantage of the repair, replenishment,
and communications links available at that port;
(2) the Secretary of Defense and the Secretary of the Navy
should conclude discussions with the Government of Israel and
the Israel Defense Forces to establish appropriate and effective
arrangements to ensure the safety of United States Navy ves-
sels and personnel during port visits to Haifa, Israel; and
(3) upon such arrangements being made, the United States
Navy should consider resumption of regular port visits to Haifa,
Israel.
TITLE XIII—COOPERATIVE THREAT RE-
DUCTION 
WITH 
STATES 
OF 
THE
FORMER SOVIET UNION
Sec. 1301. Specification of Cooperative Threat Reduction programs and funds.
Sec. 1302. Funding allocations.
Sec. 1303. Limitation on use of funds until certain permits obtained.
Sec. 1304. Limitation on use of funds for biological research in the former Soviet
Union.
Sec. 1305. Requirement for on-site managers.
Sec. 1306. Temporary authority to waive limitation on funding for chemical weap-
ons destruction facility in Russia.
Sec. 1307. Annual certifications on use of facilities being constructed for Coopera-
tive Threat Reduction projects or activities.
Sec. 1308. Authority to use Cooperative Threat Reduction funds outside the former
Soviet Union.
SEC. 1301. SPECIFICATION OF COOPERATIVE THREAT REDUCTION
PROGRAMS AND FUNDS.
(a) SPECIFICATION OF CTR PROGRAMS.—For purposes of section
301 and other provisions of this Act, Cooperative Threat Reduction
programs are the programs specified in section 1501(b) of the
National Defense Authorization Act for Fiscal Year 1997 (Public
Law 104–201; 110 Stat. 2731; 50 U.S.C. 2362 note).
(b) FISCAL YEAR 2004 COOPERATIVE THREAT REDUCTION FUNDS
DEFINED.—As used in this title, the term ‘‘fiscal year 2004 Coopera-
tive Threat Reduction funds’’ means the funds appropriated pursu-
ant to the authorization of appropriations in section 301 for
Cooperative Threat Reduction programs.
(c) AVAILABILITY OF FUNDS.—Funds appropriated pursuant to
the authorization of appropriations in section 301 for Cooperative
H. R. 1588—267
Threat Reduction programs shall be available for obligation for
three fiscal years.
SEC. 1302. FUNDING ALLOCATIONS.
(a) FUNDING
FOR SPECIFIC PURPOSES.—Of the $450,800,000
authorized to be appropriated to the Department of Defense for
fiscal year 2004 in section 301(19) for Cooperative Threat Reduction
programs, the following amounts may be obligated for the purposes
specified:
(1) For strategic offensive arms elimination in Russia,
$57,600,000.
(2) For strategic nuclear arms elimination in Ukraine,
$3,900,000.
(3) For nuclear weapons transportation security in Russia,
$23,200,000.
(4) For nuclear weapons storage security in Russia,
$48,000,000.
(5) For activities designated as Other Assessments/
Administrative Support, $13,100,000.
(6) For defense and military contacts, $11,100,000.
(7) 
For 
chemical 
weapons 
destruction 
in 
Russia,
$200,300,000.
(8) For biological weapons proliferation prevention in the
former Soviet Union, $54,200,000.
(9) For weapons of mass destruction proliferation preven-
tion in the states of the former Soviet Union, $39,400,000.
(b) REPORT ON OBLIGATION OR EXPENDITURE OF FUNDS FOR
OTHER PURPOSES.—No fiscal year 2004 Cooperative Threat Reduc-
tion funds may be obligated or expended for a purpose other than
a purpose listed in paragraphs (1) through (9) of subsection (a)
until 30 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 expenditure of fiscal year 2004
Cooperative Threat Reduction funds for a purpose for which the
obligation or expenditure of such funds is specifically prohibited
under this title or any other provision of law.
(c) LIMITED AUTHORITY TO VARY INDIVIDUAL AMOUNTS.—(1)
Subject to paragraphs (2) and (3), in any case in which the Secretary
of Defense determines that it is necessary to do so in the national
interest, the Secretary may obligate amounts appropriated for fiscal
year 2004 for a purpose listed in any of the paragraphs in subsection
(a) in excess of the specific amount authorized for that purpose.
(2) An obligation of funds for a purpose stated in any of the
paragraphs in subsection (a) in excess of the specific amount author-
ized for such purpose may be made using the authority provided
in paragraph (1) only after—
(A) the Secretary submits to Congress notification 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 notifica-
tion.
(3) The Secretary may not, under the authority provided in
paragraph (1), obligate amounts for a purpose stated in any of
paragraphs (5) through (8) of subsection (a) in excess of 125 percent
of the specific amount authorized for such purpose.
H. R. 1588—268
SEC. 1303. LIMITATION ON USE OF FUNDS UNTIL CERTAIN PERMITS
OBTAINED.
(a) IN GENERAL.—The Secretary of Defense shall seek to obtain
all the permits required to complete each phase of construction
of a project under Cooperative Threat Reduction programs before
obligating significant amounts of funding for that phase of the
project.
(b) USE OF FUNDS FOR NEW CONSTRUCTION PROJECTS.—Except
as provided in subsection (e), with respect to a new construction
project to be carried out by the Department of Defense under
Cooperative Threat Reduction programs, not more than 40 percent
of the total costs of the project may be obligated from Cooperative
Threat Reduction funds for any fiscal year until the Secretary
of Defense—
(1) determines the number and type of permits that may
be required for the lifetime of the project in the proposed
location or locations of the project; and
(2) obtains from the State in which the project is to be
located any permits that may be required to begin construction.
(c) IDENTIFICATION OF REQUIRED PERMITS FOR ONGOING INCOM-
PLETE CONSTRUCTION PROJECTS.—With respect to an incomplete
construction project carried out by the Department of Defense under
Cooperative Threat Reduction programs, the Secretary shall identify
all the permits that are required for the lifetime of the project
not later than 120 days after the date of the enactment of this
Act.
(d) USE OF FUNDS FOR CERTAIN INCOMPLETE CONSTRUCTION
PROJECTS.—Except as provided in subsection (e), with respect to
an incomplete construction project carried out by the Department
of Defense under Cooperative Threat Reduction programs for which
construction has not yet commenced as of the date of the enactment
of this Act, not more than 40 percent of the total costs of the
project may be obligated from Cooperative Threat Reduction funds
for any fiscal year until the Secretary obtains from the State in
which the project is located the permits required to commence
construction on the project.
(e) EXCEPTION TO LIMITATIONS ON USE OF FUNDS.—The limita-
tion in subsection (b) or (d) on the obligation of funds for a construc-
tion project otherwise covered by such subsection shall not apply
with respect to the obligation of funds for a particular project
if the Secretary—
(1) determines that it is necessary in the national interest
to obligate funds for such project; and
(2) submits to the congressional defense committees a
notification of the intent to obligate funds for such project,
together with a complete discussion of the justification for
doing so.
(f) DEFINITIONS.—In this section, with respect to a project under
Cooperative Threat Reduction programs:
(1) 
INCOMPLETE
CONSTRUCTION
PROJECT.—The 
term
‘‘incomplete construction project’’ means a construction project
for which funds have been obligated or expended before the
date of the enactment of this Act and which is not completed
as of such date.
(2) NEW CONSTRUCTION PROJECT.—The term ‘‘new construc-
tion project’’ means a construction project for which no funds
H. R. 1588—269
have been obligated or expended as of the date of the enactment
of this Act.
(3) PERMIT.—The term ‘‘permit’’ means any local or national
permit for development, general construction, environmental,
land use, or other purposes that is required for purposes of
major construction in a state of the former Soviet Union in
which the construction project is being or is proposed to be
carried out.
SEC. 1304. LIMITATION ON USE OF FUNDS FOR BIOLOGICAL RESEARCH
IN THE FORMER SOVIET UNION.
(a) LIMITATION ON USE OF FUNDS.—Except as provided in sub-
section (b), none of the funds authorized to be appropriated pursuant
to section 1302 for biological weapons proliferation prevention may
be obligated to begin any collaborative biodefense research or bio-
attack early warning and preparedness project under a Cooperative
Threat Reduction program at a facility in a state of the former
Soviet Union until the Secretary of Defense notifies Congress that
the Secretary—
(1) has determined, through access to the facility, that
no offensive biological weapons research prohibited by inter-
national law is being conducted at the facility; and
(2) has determined that appropriate security measures have
begun to be, or will be, put in place at the facility to prevent
theft of dangerous pathogens from the facility.
(b) AVAILABILITY OF FUNDS FOR DETERMINATIONS.—Of the funds
referred to in subsection (a) that are available for projects referred
to in that subsection, up to 25 percent of such funds may be
obligated and expended for purposes of making determinations
referred to in that subsection.
(c) FACILITY DEFINED.—In this section, the term ‘‘facility’’
means the buildings and areas at a location in which Cooperative
Threat Reduction program work is actually being conducted.
SEC. 1305. REQUIREMENT FOR ON-SITE MANAGERS.
(a) ON-SITE MANAGER REQUIREMENT.—Before obligating any
Cooperative Threat Reduction funds for a project described in sub-
section (b), the Secretary of Defense shall appoint one on-site man-
ager for that project. The manager shall be appointed from among
employees of the Federal Government.
(b) PROJECTS COVERED.—Subsection (a) applies to a project—
(1) to be located in a state of the former Soviet Union;
(2) which involves dismantlement, destruction, or storage
facilities, or construction of a facility; and
(3) with respect to which the total contribution by the
Department of Defense is expected to exceed $50,000,000.
(c) DUTIES
OF
ON-SITE
MANAGER.—The on-site manager
appointed under subsection (a) shall—
(1) develop, in cooperation with representatives from
governments of countries participating in the project, a list
of those steps or activities critical to achieving the project’s
disarmament or nonproliferation goals;
(2) establish a schedule for completing those steps or activi-
ties;
(3) meet with all participants to seek assurances that those
steps or activities are being completed on schedule; and
(4) suspend United States participation in a project when
a non-United States participant fails to complete a scheduled
H. R. 1588—270
step or activity on time, unless directed by the Secretary of
Defense to resume United States participation.
(d) AUTHORITY
TO MANAGE MORE THAN ONE PROJECT.—(1)
Subject to paragraph (2), an employee of the Federal Government
may serve as on-site manager for more than one project, including
projects at different locations.
(2) If such an employee serves as on-site manager for more
than one project in a fiscal year, the total cost of the projects
for that fiscal year may not exceed $150,000,000.
(e) STEPS
OR ACTIVITIES.—Steps or activities referred to in
subsection (c)(1) are those activities that, if not completed, will
prevent a project from achieving its disarmament or nonprolifera-
tion goals, including, at a minimum, the following:
(1) Identification and acquisition of permits (as defined
in section 1303).
(2) Verification that the items, substances, or capabilities
to be dismantled, secured, or otherwise modified are available
for dismantlement, securing, or modification.
(3) Timely provision of financial, personnel, management,
transportation, and other resources.
(f) NOTIFICATION
TO CONGRESS.—In any case in which the
Secretary of Defense directs an on-site manager to resume United
States participation in a project under subsection (c)(4), the Sec-
retary shall concurrently notify Congress of such direction.
(g) EFFECTIVE DATE.—This section shall take effect six months
after the date of the enactment of this Act.
SEC. 1306. TEMPORARY AUTHORITY TO WAIVE LIMITATION ON
FUNDING 
FOR 
CHEMICAL 
WEAPONS 
DESTRUCTION
FACILITY IN RUSSIA.
(a) TEMPORARY AUTHORITY.—The conditions described in sec-
tion 1305 of the National Defense Authorization Act for Fiscal
Year 2000 (Public Law 106–65; 22 U.S.C. 5952 note) shall not
apply to the obligation and expenditure of funds available for obliga-
tion during fiscal year 2004 for the planning, design, or construction
of a chemical weapons destruction facility in Russia if the President
submits to Congress a written certification that includes—
(1) a statement as to why the waiver of the conditions
is important to the national security interests of the United
States;
(2) a full and complete justification for the waiver of the
conditions; and
(3) a plan to promote a full and accurate disclosure by
Russia regarding the size, content, status, and location of its
chemical weapons stockpile.
(b) EXPIRATION.—The authority in subsection (a) shall expire
on September 30, 2004.
SEC. 1307. ANNUAL CERTIFICATIONS ON USE OF FACILITIES BEING
CONSTRUCTED FOR COOPERATIVE THREAT REDUCTION
PROJECTS OR ACTIVITIES.
(a) CERTIFICATION
ON
USE
OF
FACILITIES
BEING
CON-
STRUCTED.—Not later than the first Monday of February each year,
the Secretary of Defense shall submit to the congressional defense
committees a certification for each facility for a Cooperative Threat
Reduction project or activity for which construction occurred during
the preceding fiscal year on matters as follows:
H. R. 1588—271
(1) Whether or not such facility will be used for its intended
purpose by the government of the state of the former Soviet
Union in which the facility is constructed.
(2) Whether or not the government of such state remains
committed to the use of such facility for its intended purpose.
(3) Whether those actions needed to ensure security at
the facility, including secure transportation of any materials,
substances, or weapons to, from, or within the facility, have
been taken.
(b) APPLICABILITY.—Subsection (a) shall apply to—
(1) any facility the construction of which commences on
or after the date of the enactment of this Act; and
(2) any facility the construction of which is ongoing as
of that date.
SEC. 1308. AUTHORITY TO USE COOPERATIVE THREAT REDUCTION
FUNDS OUTSIDE THE FORMER SOVIET UNION.
(a) AUTHORITY.—Subject to the provisions of this section, the
President may obligate and expend Cooperative Threat Reduction
funds for a fiscal year, and any Cooperative Threat Reduction
funds for a fiscal year before such fiscal year that remain available
for obligation, for a proliferation threat reduction project or activity
outside the states of the former Soviet Union if the President
determines each of the following:
(1) That such project or activity will—
(A)(i) assist the United States in the resolution of
a critical emerging proliferation threat; or
(ii) permit the United States to take advantage of
opportunities to achieve long-standing nonproliferation
goals; and
(B) be completed in a short period of time.
(2) That the Department of Defense is the entity of the
Federal Government that is most capable of carrying out such
project or activity.
(b) SCOPE OF AUTHORITY.—The authority in subsection (a) to
obligate and expend funds for a project or activity includes authority
to provide equipment, goods, and services for such project or activity
utilizing such funds, but does not include authority to provide
cash directly to such project or activity.
(c) LIMITATION
ON
TOTAL
AMOUNT
OF
OBLIGATION.—The
amount that may be obligated in a fiscal year under the authority
in subsection (a) may not exceed $50,000,000.
(d) LIMITATION ON AVAILABILITY OF FUNDS.—(1) The President
may not obligate funds for a project or activity under the authority
in subsection (a) until the President makes each determination
specified in that subsection with respect to such project or activity.
(2) Not later than 10 days after obligating funds under the
authority in subsection (a) for a project or activity, the President
shall notify Congress in writing of the determinations made under
paragraph (1) with respect to such project or activity, together
with—
(A) a justification for such determinations; and
(B) a description of the scope and duration of such project
or activity.
(e) ADDITIONAL LIMITATIONS AND REQUIREMENTS.—Except as
otherwise provided in subsections (a) and (b), the exercise of the
H. R. 1588—272
authority in subsection (a) shall be subject to any requirement
or limitation under another provision of law as follows:
(1) Any requirement for prior notice or other reports to
Congress on the use of Cooperative Threat Reduction funds
or on Cooperative Threat Reduction projects or activities.
(2) Any limitation on the obligation or expenditure of
Cooperative Threat Reduction funds.
(3) Any limitation on Cooperative Threat Reduction projects
or activities.
TITLE XIV—SERVICES ACQUISITION
REFORM
Sec. 1401. Short title.
Subtitle A—Acquisition Workforce and Training
Sec. 1411. Definition of acquisition.
Sec. 1412. Acquisition workforce training fund.
Sec. 1413. Acquisition workforce recruitment program.
Sec. 1414. Architectural and engineering acquisition workforce.
Subtitle B—Adaptation of Business Acquisition Practices
PART I—ADAPTATION OF BUSINESS MANAGEMENT PRACTICES
Sec. 1421. Chief Acquisition Officers.
Sec. 1422. Chief Acquisition Officers Council.
Sec. 1423. Statutory and regulatory review.
PART II—OTHER ACQUISITION IMPROVEMENTS
Sec. 1426. Extension of authority to carry out franchise fund programs.
Sec. 1427. Improvements in contracting for architectural and engineering services.
Sec. 1428. Authorization of telecommuting for Federal contractors.
Subtitle C—Acquisitions of Commercial Items
Sec. 1431. Additional incentive for use of performance-based contracting for serv-
ices.
Sec. 1432. Authorization of additional commercial contract types.
Sec. 1433. Clarification of commercial services definition.
Subtitle D—Other Matters
Sec. 1441. Authority to enter into certain transactions for defense against or recov-
ery from terrorism or nuclear, biological, chemical, or radiological at-
tack.
Sec. 1442. Public disclosure of noncompetitive contracting for the reconstruction of
infrastructure in Iraq.
Sec. 1443. Special emergency procurement authority.
SEC. 1401. SHORT TITLE.
This title may be cited as the ‘‘Services Acquisition Reform
Act of 2003’’.
Subtitle A—Acquisition Workforce and
Training
SEC. 1411. DEFINITION OF ACQUISITION.
Section 4 of the Office of Federal Procurement Policy Act (41
U.S.C. 403) is amended by adding at the end the following:
‘‘(16) The term ‘acquisition’—
‘‘(A) means the process of acquiring, with appropriated
funds, by contract for purchase or lease, property or serv-
ices (including construction) that support the missions and
H. R. 1588—273
goals of an executive agency, from the point at which
the requirements of the executive agency are established
in consultation with the chief acquisition officer of the
executive agency; and
‘‘(B) includes—
‘‘(i) the process of acquiring property or services
that are already in existence, or that must be created,
developed, demonstrated, and evaluated;
‘‘(ii) the description of requirements to satisfy
agency needs;
‘‘(iii) solicitation and selection of sources;
‘‘(iv) award of contracts;
‘‘(v) contract performance;
‘‘(vi) contract financing;
‘‘(vii) management and measurement of contract
performance through final delivery and payment; and
‘‘(viii) technical and management functions directly
related to the process of fulfilling agency requirements
by contract.’’.
SEC. 1412. ACQUISITION WORKFORCE TRAINING FUND.
(a) PURPOSES.—The purposes of this section are to ensure that
the Federal acquisition workforce—
(1) adapts to fundamental changes in the nature of Federal
Government acquisition of property and services associated
with the changing roles of the Federal Government; and
(2) acquires new skills and a new perspective to enable
it to contribute effectively in the changing environment of the
21st century.
(b) ESTABLISHMENT OF FUND.—Section 37 of the Office of Fed-
eral Procurement Policy Act (41 U.S.C. 433) is amended by adding
at the end of subsection (h) the following new paragraph:
‘‘(3) ACQUISITION
WORKFORCE
TRAINING
FUND.—(A) The
Administrator of General Services shall establish an acquisition
workforce training fund. The Administrator shall manage the
fund through the Federal Acquisition Institute to support the
training of the acquisition workforce of the executive agencies
other than the Department of Defense. The Administrator shall
consult with the Administrator for Federal Procurement Policy
in managing the fund.
‘‘(B) There shall be credited to the acquisition workforce
training fund 5 percent of the fees collected by executive agen-
cies (other than the Department of Defense) under the following
contracts:
‘‘(i) Governmentwide task and delivery-order contracts
entered into under sections 303H and 303I of the Federal
Property and Administrative Services Act of 1949 (41
U.S.C. 253h and 253i).
‘‘(ii) Governmentwide contracts for the acquisition of
information technology as defined in section 11101 of title
40, United States Code, and multiagency acquisition con-
tracts for such technology authorized by section 11314 of
such title.
‘‘(iii) Multiple-award schedule contracts entered into
by the Administrator of General Services.
‘‘(C) The head of an executive agency that administers
a contract described in subparagraph (B) shall remit to the
H. R. 1588—274
General Services Administration the amount required to be
credited to the fund with respect to such contract at the end
of each quarter of the fiscal year.
‘‘(D) The Administrator of General Services, through the
Office of Federal Acquisition Policy, shall ensure that funds
collected for training under this section are not used for any
purpose other than the purpose specified in subparagraph (A).
‘‘(E) Amounts credited to the fund shall be in addition
to funds requested and appropriated for education and training
referred to in paragraph (1).
‘‘(F) Amounts credited to the fund shall remain available
to be expended only in the fiscal year for which credited and
the two succeeding fiscal years.
‘‘(G) This paragraph shall cease to be effective five years
after the date of the enactment of the National Defense
Authorization Act for Fiscal Year 2004.’’.
(c) EXCEPTION.—This section and the amendments made by
this section shall not apply to the acquisition workforce of the
Department of Defense. Fees charged to the Department of Defense
under contracts covered by section 37(h)(3) of the Office of Federal
Procurement Policy Act, as added by subsection (b), shall be reduced
by 5 percent to reflect the Department’s nonparticipation in the
acquisition workforce training fund established by such section.
SEC. 1413. ACQUISITION WORKFORCE RECRUITMENT PROGRAM.
(a) DETERMINATION OF SHORTAGE CATEGORY POSITIONS.—For
purposes of sections 3304, 5333, and 5753 of title 5, United States
Code, the head of a department or agency of the United States
(other than the Secretary of Defense) may determine, under regula-
tions prescribed by the Office of Personnel Management, that cer-
tain Federal acquisition positions (as described in section 37(g)(1)(A)
of the Office of Federal Procurement Policy Act (41 U.S.C.
433(g)(1)(A)) are shortage category positions in order to use the
authorities in those sections to recruit and appoint highly qualified
persons directly to such positions in the department or agency.
(b) TERMINATION OF AUTHORITY.—The head of a department
or agency may not appoint a person to a position of employment
under this section after September 30, 2007.
(c) REPORT.—Not later than March 31, 2007, the Director of
the Office of Personnel Management, in consultation with the
Administrator for Federal Procurement Policy, shall submit to Con-
gress a report on the implementation of this section. The report
shall include—
(1) a list of the departments and agencies that exercised
the authority provided in this section, and whether the exercise
of the authority was carried out in accordance with the regula-
tions prescribed by the Office of Personnel Management;
(2) the Director’s assessment of the efficacy of the exercise
of the authority provided in this section in attracting employees
with unusually high qualifications to the acquisition workforce;
and
(3) any recommendations considered appropriate by the
Director on whether the authority to carry out the program
should be extended.
H. R. 1588—275
SEC. 
1414. 
ARCHITECTURAL 
AND 
ENGINEERING 
ACQUISITION
WORKFORCE.
The Administrator for Federal Procurement Policy, in consulta-
tion with the Secretary of Defense, the Administrator of General
Services, and the Director of the Office of Personnel Management,
shall develop and implement a plan to ensure that the Federal
Government maintains the necessary capability with respect to
the acquisition of architectural and engineering services to—
(1) ensure that Federal Government employees have the
expertise to determine agency requirements for such services;
(2) establish priorities and programs (including acquisition
plans);
(3) establish professional standards;
(4) develop scopes of work; and
(5) award and administer contracts for such services.
Subtitle B—Adaptation of Business
Acquisition Practices
PART I—ADAPTATION OF BUSINESS
MANAGEMENT PRACTICES
SEC. 1421. CHIEF ACQUISITION OFFICERS.
(a) APPOINTMENT OF CHIEF ACQUISITION OFFICERS.—(1) Section
16 of the Office of Federal Procurement Policy Act (41 U.S.C.
414) is amended to read as follows:
‘‘SEC. 16. CHIEF ACQUISITION OFFICERS AND SENIOR PROCUREMENT
EXECUTIVES.
‘‘(a) ESTABLISHMENT
OF AGENCY CHIEF ACQUISITION OFFI-
CERS.—(1) The head of each executive agency described in section
901(b)(1) (other than the Department of Defense) or section
901(b)(2)(C) of title 31, United States Code, with a Chief Financial
Officer appointed or designated under section 901(a) of such title
shall appoint or designate a non-career employee as Chief Acquisi-
tion Officer for the agency, who shall—
‘‘(A) have acquisition management as that official’s primary
duty; and
‘‘(B) advise and assist the head of the executive agency
and other agency officials to ensure that the mission of the
executive agency is achieved through the management of the
agency’s acquisition activities.
‘‘(b) AUTHORITY AND FUNCTIONS OF AGENCY CHIEF ACQUISITION
OFFICERS.—The functions of each Chief Acquisition Officer shall
include—
‘‘(1) monitoring the performance of acquisition activities
and acquisition programs of the executive agency, evaluating
the performance of those programs on the basis of applicable
performance measurements, and advising the head of the execu-
tive agency regarding the appropriate business strategy to
achieve the mission of the executive agency;
‘‘(2) increasing the use of full and open competition in
the acquisition of property and services by the executive agency
by establishing policies, procedures, and practices that ensure
that the executive agency receives a sufficient number of sealed
H. R. 1588—276
bids or competitive proposals from responsible sources to fulfill
the Government’s requirements (including performance and
delivery schedules) at the lowest cost or best value considering
the nature of the property or service procured;
‘‘(3) increasing appropriate use of performance-based con-
tracting and performance specifications;
‘‘(4) making acquisition decisions consistent with all
applicable laws and establishing clear lines of authority,
accountability, and responsibility for acquisition decisionmaking
within the executive agency;
‘‘(5) managing the direction of acquisition policy for the
executive agency, including implementation of the unique
acquisition policies, regulations, and standards of the executive
agency;
‘‘(6) developing and maintaining an acquisition career
management program in the executive agency to ensure that
there is an adequate professional workforce; and
‘‘(7) as part of the strategic planning and performance
evaluation process required under section 306 of title 5, United
States Code, and sections 1105(a)(28), 1115, 1116, and 9703
of title 31, United States Code—
‘‘(A) assessing the requirements established for agency
personnel regarding knowledge and skill in acquisition
resources management and the adequacy of such require-
ments for facilitating the achievement of the performance
goals established for acquisition management;
‘‘(B) in order to rectify any deficiency in meeting such
requirements, developing strategies and specific plans for
hiring, training, and professional development; and
‘‘(C) reporting to the head of the executive agency
on the progress made in improving acquisition management
capability.
‘‘(c) SENIOR PROCUREMENT EXECUTIVE.—(1) The head of each
executive agency shall designate a senior procurement executive
who shall be responsible for management direction of the procure-
ment system of the executive agency, including implementation
of the unique procurement policies, regulations, and standards of
the executive agency.
‘‘(2) In the case of an executive agency for which a Chief
Acquisition Officer has been appointed or designated under sub-
section (a), the head of such executive agency shall either—
‘‘(A) designate the Chief Acquisition Officer as the senior
procurement executive for the executive agency; or
‘‘(B) ensure that the senior procurement executive des-
ignated for the executive agency under paragraph (1) reports
directly to the Chief Acquisition Officer without intervening
authority.’’.
(2) The item relating to section 16 in the table of contents
in section 1(b) of such Act is amended to read as follows:
‘‘Sec. 16. Chief Acquisition Officers and senior procurement executives.’’.
(b) TECHNICAL CORRECTION.—Section 1115(a) of title 31, United
States Code, is amended by striking ‘‘section 1105(a)(29)’’ and
inserting ‘‘section 1105(a)(28)’’.
H. R. 1588—277
SEC. 1422. CHIEF ACQUISITION OFFICERS COUNCIL.
(a) ESTABLISHMENT
OF
COUNCIL.—The Office of Federal
Procurement Policy Act (41 U.S.C. 403 et seq.) is amended by
inserting after section 16 the following new section:
‘‘SEC. 16A. CHIEF ACQUISITION OFFICERS COUNCIL.
‘‘(a) ESTABLISHMENT.—There is established in the executive
branch a Chief Acquisition Officers Council.
‘‘(b) MEMBERSHIP.—The members of the Council shall be as
follows:
‘‘(1) The Deputy Director for Management of the Office
of Management and Budget, who shall act as Chairman of
the Council.
‘‘(2) The Administrator for Federal Procurement Policy.
‘‘(3) The Under Secretary of Defense for Acquisition, Tech-
nology, and Logistics.
‘‘(4) The chief acquisition officer of each executive agency
that is required to have a chief acquisition officer under section
16 and the senior procurement executive of each military
department.
‘‘(5) Any other senior agency officer of each executive
agency, appointed by the head of the agency in consultation
with the Chairman, who can effectively assist the Council in
performing the functions set forth in subsection (e) and sup-
porting the associated range of acquisition activities.
‘‘(c) LEADERSHIP; SUPPORT.—(1) The Administrator for Federal
Procurement Policy shall lead the activities of the Council on behalf
of the Deputy Director for Management.
‘‘(2)(A) The Vice Chairman of the Council shall be selected
by the Council from among its members.
‘‘(B) The Vice Chairman shall serve a 1-year term, and may
serve multiple terms.
‘‘(3) The Administrator of General Services shall provide
administrative and other support for the Council.
‘‘(d) PRINCIPAL FORUM.—The Council is designated the principal
interagency forum for monitoring and improving the Federal
acquisition system.
‘‘(e) FUNCTIONS.—The Council shall perform functions that
include the following:
‘‘(1) Develop recommendations for the Director of the Office
of Management and Budget on Federal acquisition policies and
requirements.
‘‘(2) Share experiences, ideas, best practices, and innovative
approaches related to Federal acquisition.
‘‘(3) Assist the Administrator in the identification, develop-
ment, and coordination of multiagency projects and other
innovative initiatives to improve Federal acquisition.
‘‘(4) Promote effective business practices that ensure the
timely delivery of best value products to the Federal Govern-
ment and achieve appropriate public policy objectives.
‘‘(5) Further integrity, fairness, competition, openness, and
efficiency in the Federal acquisition system.
‘‘(6) Work with the Office of Personnel Management to
assess and address the hiring, training, and professional
development needs of the Federal Government related to
acquisition.
H. R. 1588—278
‘‘(7) Work with the Administrator and the Federal Acquisi-
tion Regulatory Council to promote the business practices
referred to in paragraph (4) and other results of the functions
carried out under this subsection.’’.
(b) CLERICAL AMENDMENT.—The table of contents in section
1(b) of such Act is amended by inserting after the item relating
to section 16 the following new item:
‘‘Sec. 16A. Chief Acquisition Officers Council.’’.
SEC. 1423. STATUTORY AND REGULATORY REVIEW.
(a) ESTABLISHMENT.—Not later than 90 days after the date
of the enactment of this Act, the Administrator for Federal Procure-
ment Policy shall establish an advisory panel to review laws and
regulations regarding the use of commercial practices, performance-
based contracting, the performance of acquisition functions across
agency lines of responsibility, and the use of Governmentwide con-
tracts.
(b) MEMBERSHIP.—The panel shall be composed of at least
nine individuals who are recognized experts in acquisition law
and Government acquisition policy. In making appointments to
the panel, the Administrator shall—
(1) consult with the Secretary of Defense, the Administrator
of General Services, the Committees on Armed Services and
Government Reform of the House of Representatives, and the
Committees on Armed Services and Governmental Affairs of
the Senate; and
(2) ensure that the members of the panel reflect the diverse
experiences in both the public and private sectors, including
academia.
(c) DUTIES.—The panel shall—
(1) review all Federal acquisition laws and regulations,
and, to the extent practicable, government-wide acquisition poli-
cies, with a view toward ensuring effective and appropriate
use of commercial practices and performance-based contracting;
and
(2) make any recommendations for the modification of such
laws, regulations, or policies that are considered necessary as
a result of such review—
(A) to protect the best interests of the Federal Govern-
ment;
(B) to ensure the continuing financial and ethical integ-
rity of acquisitions by the Federal Government; and
(C) to amend or eliminate any provisions in such laws,
regulations, or policies that are unnecessary for the effec-
tive, efficient, and fair award and administration of con-
tracts for the acquisition by the Federal Government of
goods and services.
(d) REPORT.—Not later than one year after the establishment
of the panel, the panel shall submit to the Administrator and
to the Committees on Armed Services and Government Reform
of the House of Representatives and the Committees on Armed
Services and Governmental Affairs of the Senate a report containing
a detailed statement of the findings, conclusions, and recommenda-
tions of the panel.
H. R. 1588—279
PART II—OTHER ACQUISITION
IMPROVEMENTS
SEC. 1426. EXTENSION OF AUTHORITY TO CARRY OUT FRANCHISE
FUND PROGRAMS.
Section 403(f) of the Federal Financial Management Act of
1994 (Public Law 103–356; 31 U.S.C. 501 note) is amended by
striking ‘‘October 1, 2003’’ and inserting ‘‘December 31, 2004’’.
SEC. 1427. IMPROVEMENTS IN CONTRACTING FOR ARCHITECTURAL
AND ENGINEERING SERVICES.
(a) TITLE 10.—Section 2855(b) of title 10, United States Code,
is amended in paragraph (2), by striking ‘‘$85,000’’ and inserting
‘‘$300,000’’.
(b) ARCHITECTURAL AND ENGINEERING SERVICES.—Architectural
and engineering services (as defined in section 1102 of title 40,
United States Code) shall not be offered under multiple-award
schedule contracts entered into by the Administrator of General
Services or under Governmentwide task and delivery order contracts
entered into under sections 2304a and 2304b of title 10, United
States Code, or sections 303H and 303I of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253h and 253i)
unless such services—
(1) are performed under the direct supervision of a profes-
sional architect or engineer licensed, registered, or certified
in the State, territory (including the Commonwealth of Puerto
Rico), possession, or Federal District in which the services
are to be performed; and
(2) are awarded in accordance with the selection procedures
set forth in chapter 11 of title 40, United States Code.
SEC. 1428. AUTHORIZATION OF TELECOMMUTING FOR FEDERAL CON-
TRACTORS.
(a) AMENDMENT TO THE FEDERAL ACQUISITION REGULATION.—
Not later than 180 days after the date of the enactment of this
Act, the Federal Acquisition Regulatory Council shall amend the
Federal Acquisition Regulation issued in accordance with sections
6 and 25 of the Office of Federal Procurement Policy Act (41
U.S.C. 405 and 421) to permit telecommuting by employees of
Federal Government contractors in the performance of contracts
entered into with executive agencies.
(b) CONTENT OF AMENDMENT.—The regulation issued pursuant
to subsection (a) shall, at a minimum, provide that solicitations
for the acquisition of property or services may not set forth any
requirement or evaluation criteria that would—
(1) render an offeror ineligible to enter into a contract
on the basis of the inclusion of a plan of the offeror to permit
the offeror’s employees to telecommute, unless the contracting
officer concerned first determines that the requirements of the
agency, including security requirements, cannot be met if the
telecommuting is permitted and documents in writing the basis
for that determination; or
(2) reduce the scoring of an offer on the basis of the inclu-
sion in the offer of a plan of the offeror to permit the offeror’s
employees to telecommute, unless the contracting officer con-
cerned first determines that the requirements of the agency,
including security requirements, would be adversely impacted
H. R. 1588—280
if telecommuting is permitted and documents in writing the
basis for that determination.
(c) DEFINITION.—In this section, the term ‘‘executive agency’’
has the meaning given that term in section 4(1) of the Office
of Federal Procurement Policy Act (41 U.S.C. 403(1)).
Subtitle C—Acquisitions of Commercial
Items
SEC. 1431. ADDITIONAL INCENTIVE FOR USE OF PERFORMANCE-BASED
CONTRACTING FOR SERVICES.
(a) IN GENERAL.—The Office of Federal Procurement Policy
Act (41 U.S.C. 403 et seq.) is amended by adding at the end
the following new section:
‘‘SEC. 41. INCENTIVES FOR EFFICIENT PERFORMANCE OF SERVICES
CONTRACTS.
‘‘(a) INCENTIVE
FOR USE
OF PERFORMANCE-BASED SERVICES
CONTRACTS.—A performance-based contract for the procurement
of services entered into by an executive agency or a performance-
based task order for services issued by an executive agency may
be treated as a contract for the procurement of commercial items
if—
‘‘(1) the value of the contract or task order is estimated
not to exceed $25,000,000;
‘‘(2) the contract or task order sets forth specifically each
task to be performed and, for each task—
‘‘(A) defines the task in measurable, mission-related
terms;
‘‘(B) identifies the specific end products or output to
be achieved; and
‘‘(C) contains firm, fixed prices for specific tasks to
be performed or outcomes to be achieved; and
‘‘(3) the source of the services provides similar services
to the general public under terms and conditions similar to
those offered to the Federal Government.
‘‘(b) REGULATIONS.—The regulations implementing this section
shall require agencies to collect and maintain reliable data sufficient
to identify the contracts or task orders treated as contracts for
commercial items using the authority of this section. The data
may be collected using the Federal Procurement Data System or
other reporting mechanism.
‘‘(c) REPORT.—Not later than two years after the date of the
enactment of this section, the Director of the Office of Management
and Budget shall prepare and submit to the Committees on Govern-
mental Affairs and on Armed Services of the Senate and the
Committees on Government Reform and on Armed Services of the
House of Representatives a report on the contracts or task orders
treated as contracts for commercial items using the authority of
this section. The report shall include data on the use of such
authority both government-wide and for each department and
agency.
‘‘(d) EXPIRATION.—The authority under this section shall expire
10 years after the date of the enactment of this section.’’.
(b) CENTER OF EXCELLENCE IN SERVICE CONTRACTING.—Not
later than 180 days after the date of the enactment of this Act,
H. R. 1588—281
the Administrator for Federal Procurement Policy shall establish
a center of excellence in contracting for services. The center of
excellence shall assist the acquisition community by identifying,
and serving as a clearinghouse for, best practices in contracting
for services in the public and private sectors.
(c) REPEAL OF SUPERSEDED PROVISION.—Subsection (b) of sec-
tion 821 of the Floyd D. Spence National Defense Authorization
Act for Fiscal Year 2001 (as enacted into law by Public Law 106–
398; 114 Stat. 1654A–218; 10 U.S.C. 2302 note) is repealed.
(d) CLERICAL AND TECHNICAL AMENDMENTS.—(1) The table of
contents in section 1(b) of such Act is amended by striking the
last item and inserting the following:
‘‘Sec. 40. Protection of constitutional rights of contractors.
‘‘Sec. 41. Incentives for efficient performance of services contracts.’’.
(2) The section before section 41 of such Act (as added by
subsection (a)) is redesignated as section 40.
SEC. 1432. AUTHORIZATION OF ADDITIONAL COMMERCIAL CONTRACT
TYPES.
Section 8002(d) of the Federal Acquisition Streamlining Act
of 1994 (Public Law 103–355; 108 Stat. 3387; 41 U.S.C. 264 note)
is amended—
(1) by redesignating paragraph (1) as subparagraph (A)
and in that subparagraph by striking ‘‘and’’;
(2) by redesignating paragraph (2) as subparagraph (B)
and in that subparagraph by striking the period at the end
and inserting ‘‘; and’’;
(3) by adding after subparagraph (B) (as so redesignated)
the following new subparagraph:
‘‘(C) subject to paragraph (2), authority for use of a time-
and-materials contract or a labor-hour contract for the procure-
ment of commercial services that are commonly sold to the
general public through such contracts and are purchased by
the procuring agency on a competitive basis.’’;
(4) by striking ‘‘USE OF FIRM, FIXED PRICE CONTRACTS.—
The’’ and inserting ‘‘PROVISIONS RELATING TO TYPES OF CON-
TRACTS FOR COMMERCIAL ITEMS.—(1)’’; and
(5) by adding at the end the following new paragraphs:
‘‘(2) A time-and-materials contract or a labor-hour contract
may be used pursuant to the authority referred to in paragraph
(1)(C)—
‘‘(A) only for a procurement of commercial services in a
category of commercial services described in paragraph (3);
and—
‘‘(B) only if the contracting officer for such procurement—
‘‘(i) executes a determination and findings that no other
contract type is suitable;
‘‘(ii) includes in the contract a ceiling price that the
contractor exceeds at its own risk; and
‘‘(iii) authorizes any subsequent change in the ceiling
price only upon a determination, documented in the con-
tract file, that it is in the best interest of the procuring
agency to change such ceiling price.
‘‘(3) The categories of commercial services referred to in para-
graph (2) are as follows:
‘‘(A) Commercial services procured for support of a
commercial item, as described in section 4(12)(E) of the
H. R. 1588—282
Office of Federal Procurement Policy Act (41 U.S.C.
403(12)(E)).
‘‘(B) Any other category of commercial services that
is designated by the Administrator for Federal Procurement
Policy in the Federal Acquisition Regulation for the pur-
poses of this paragraph on the basis that—
‘‘(i) the commercial services in such category are
of a type of commercial services that are commonly
sold to the general public through use of time-and-
materials or labor-hour contracts; and
‘‘(ii) it would be in the best interests of the Federal
Government to authorize use of time-and-materials or
labor-hour contracts for purchases of the commercial
services in such category.’’.
SEC. 1433. CLARIFICATION OF COMMERCIAL SERVICES DEFINITION.
Section 4 of the Office of Federal Procurement Policy Act (41
U.S.C. 403) is amended in paragraph (12)(F) by inserting ‘‘or specific
outcomes to be achieved’’ after ‘‘performed’’.
Subtitle D—Other Matters
SEC. 1441. AUTHORITY TO ENTER INTO CERTAIN TRANSACTIONS FOR
DEFENSE AGAINST OR RECOVERY FROM TERRORISM OR
NUCLEAR, BIOLOGICAL, CHEMICAL, OR RADIOLOGICAL
ATTACK.
(a) AUTHORITY.—
(1) IN GENERAL.—The head of an executive agency who
engages in basic research, applied research, advanced research,
and development projects that—
(A) are necessary to the responsibilities of such official’s
executive agency in the field of research and development,
and
(B) have the potential to facilitate defense against or
recovery from terrorism or nuclear, biological, chemical,
or radiological attack,
may exercise the same authority (subject to the same restric-
tions and conditions) with respect to such research and projects
as the Secretary of Defense may exercise under section 2371
of title 10, United States Code, except for subsections (b) and
(f) of such section 2371.
(2) PROTOTYPE PROJECTS.—The head of an executive agency
may, under the authority of paragraph (1), carry out prototype
projects that meet the requirements of subparagraphs (A) and
(B) of paragraph (1) in accordance with the requirements and
conditions provided for carrying out prototype projects under
section 845 of the National Defense Authorization Act for Fiscal
Year 1994 (Public Law 103–160; 10 U.S.C. 2371 note), including
that, to the maximum extent practicable, competitive proce-
dures shall be used when entering into agreements to carry
out projects under subsection (a) of that section and that the
period of authority to carry out projects under such subsection
(a) terminates as provided in subsection (g) of that section.
(3) APPLICATION OF REQUIREMENTS AND CONDITIONS.—In
applying the requirements and conditions of section 845 of