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(2) The table of sections at the beginning of chapter
169 of that title is amended by striking the item relating
to section 2810.
SEC. 
313. 
INCREASED 
PROCUREMENT 
OF 
ENVIRON-
MENTALLY PREFERABLE PRODUCTS.
(a) PROCUREMENT GOALS.—(1) The Secretary of De-
fense shall establish goals for the increased procurement by
the Department of Defense of procurement items that are
environmentally preferable or are made with recovered ma-
terials.
(2) The goals established under paragraph (1) shall be
consistent with the requirements of section 6002 of the Solid
Waste Disposal Act (42 U.S.C. 6962).
(3) In establishing goals under paragraph (1), the Sec-
retary shall review the Comprehensive Procurement Guide-
lines and Guidance on Acquisition of Environmentally
Preferable Products and Services developed pursuant to Ex-
ecutive Order 13101 and products identified as environ-
mentally preferable in the Federal Logistics Information
System.
(4) In establishing goals under paragraph (1), the Sec-
retary shall establish a procurement goal for each category
of procurement items that is environmentally preferable or
is made with recovered materials.
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(5) The goals established under paragraph (1) shall
apply to Department purchases in each category of procure-
ment items designated by the Secretary for purposes of
paragraph (4), but shall not apply to—
(A) products or services purchased by Depart-
ment contractors and subcontractors, even if such
products or services are incorporated into procure-
ment items purchased by the Department; or
(B) credit card purchases or other local pur-
chases that are made outside the requisitioning proc-
ess of the Department.
(b) ASSESSMENT OF TRAINING AND EDUCATION.—The
Secretary shall assess the need to establish a program, or
enhance existing programs, for training and educating De-
partment of Defense procurement officials and contractors
to ensure that they are aware of Department requirements,
preferences, and goals for the procurement of items that are
environmentally preferable or are made with recovered ma-
terials.
(c) TRACKING SYSTEM.—The Secretary shall develop
a tracking system to identify the extent to which the De-
partment of Defense is procuring items that are environ-
mentally preferable or are made with recovered materials.
The tracking system shall separately track procurement of
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each category of procurement items for which a goal has
been established under subsection (a)(4).
(d) INITIAL REPORT.—Not later than 120 days after
the date of the enactment of this Act, the Secretary shall
submit to the congressional defense committees a report that
sets forth—
(1) the initial goals the Secretary plans to estab-
lish under subsection (a); and
(2) the findings of the Secretary as a result of
the assessment under subsection (b), together with any
recommendations of the Secretary as a result of the
assessment.
(e) IMPLEMENTATION.—Not later than 180 days after
the date of the enactment of this Act, the Secretary shall—
(1) establish an initial set of goals in accordance
subsection (a);
(2) begin the implementation of any rec-
ommendations of the Secretary under subsection
(d)(2) as a result of the assessment under subsection
(b); and
(3) implement the tracking system required by
subsection (c).
(f) ANNUAL REPORT.—Not later than March 1 of each
year from 2004 through 2007, the Secretary shall submit
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to Congress a report on the progress made in the implemen-
tation of this section. Each report shall—
(1) identify each category of procurement items
for which a goal has been established under subsection
(a) as of the end of such year; and
(2) provide information from the tracking system
required by subsection (b) that indicates the extent to
which the Department has met the goal for the cat-
egory of procurement items as of the end of such year.
(g) DEFINITIONS.—In this section:
(1) ENVIRONMENTALLY PREFERABLE.—The term
‘‘environmentally preferable’’, in the case of a pro-
curement item, means that the item has a lesser or re-
duced effect on human health and the environment
when compared with competing procurement items
that serve the same purpose. The comparison may be
based upon consideration of raw materials acquisi-
tion, production, manufacturing, packaging, distribu-
tion, reuse, operation, maintenance, or disposal of the
procurement item, or other appropriate matters.
(2) PROCUREMENT ITEM.—The term ‘‘procure-
ment item’’ has the meaning given that term in sec-
tion 1004(16) of the Solid Waste Disposal Act (40
U.S.C. 6903(16)).
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(3) RECOVERED MATERIALS.—The term ‘‘recov-
ered materials’’ means waste materials and by-prod-
ucts that have been recovered or diverted from solid
waste, but does not include materials and by-products
generated from, and commonly used within, an origi-
nal manufacturing process.
SEC. 314. CLEANUP OF UNEXPLODED ORDNANCE ON
KAHO’OLAWE ISLAND, HAWAII.
(a) LEVEL OF CLEANUP REQUIRED.—The Secretary of
the Navy shall continue activities for the clearance and re-
moval of unexploded ordnance on the Island of Kaho’olawe,
Hawaii, and related remediation activities, until the later
of the following dates:
(1) The date on which the Kaho’olawe Island ac-
cess control period expires.
(2) The date on which the Secretary achieves
each of the following objectives:
(A) The inspection and assessment of all of
Kaho’olawe Island in accordance with current
procedures.
(B) The clearance of 75 percent of
Kaho’olawe Island to the degree specified in the
Tier One standards in the memorandum of un-
derstanding.
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(C) 
The 
clearance 
of 
percent 
of
Kaho’olawe Island to the degree specified in the
Tier Two standards in the memorandum of un-
derstanding.
(b) DEFINITIONS.—In this section:
(1) The term ‘‘Kaho’olawe Island access control
period’’ means the period for which the Secretary of
the Navy is authorized to retain the control of access
to the Island of Kaho’olawe, Hawaii, under title X of
the Department of Defense Appropriations Act, 1994
(Public Law 103–139; 107 Stat. 1480).
(2) The term ‘‘memorandum of understanding’’
means the Memorandum of Understanding Between
the United States Department of the Navy and the
State of Hawaii Concerning the Island of Kaho’olawe,
Hawaii.
Subtitle C—Defense Dependents’
Education
SEC. 331. ASSISTANCE TO LOCAL EDUCATIONAL AGENCIES
THAT BENEFIT DEPENDENTS OF MEMBERS
OF THE ARMED FORCES AND DEPARTMENT
OF DEFENSE CIVILIAN EMPLOYEES.
(a) CONTINUATION
OF DEPARTMENT
OF DEFENSE
PROGRAM FOR FISCAL YEAR 2003.—Of the amount author-
ized to be appropriated pursuant to section 301(a)(5) for
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ementary and Secondary Education Act of 1965 (20
U.S.C. 7713(9)).
SEC. 332. IMPACT AID FOR CHILDREN WITH SEVERE DIS-
ABILITIES.
Of the amount authorized to be appropriated pursuant
to section 301(a)(5) for operation and maintenance for De-
fense-wide activities, $5,000,000 shall be available for pay-
ments under section 363 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–77; 20
U.S.C. 7703a).
SEC. 333. OPTIONS FOR FUNDING DEPENDENT SUMMER
SCHOOL PROGRAMS.
Section 1402(d)(2) of the Defense Dependents’ Edu-
cation Act of 1978 (20 U.S.C. 921(d)(2)) is amended to read
as follows:
‘‘(2) The Secretary shall provide any summer school
program under this subsection on the same financial basis
as programs offered during the regular school year, except
that the Secretary may charge reasonable fees for all or por-
tions of such summer school programs to the extent that
the Secretary determines appropriate.’’.
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SEC. 334. COMPTROLLER GENERAL STUDY OF ADEQUACY
OF COMPENSATION PROVIDED FOR TEACH-
ERS IN THE DEPARTMENT OF DEFENSE OVER-
SEAS DEPENDENTS’ SCHOOLS.
(a) ADDITIONAL CONSIDERATION FOR STUDY.—Sub-
section (b) of section 354 of the National Defense Authoriza-
tion Act for Fiscal Year 2002 (Public Law 107–107; 115
Stat. 1064) is amended by inserting after paragraph (2)
the following new paragraph:
‘‘(3) Whether the process for setting teacher com-
pensation is efficient and cost effective.’’.
(b) EXTENSION
OF TIME
FOR REPORTING.—Sub-
section (c) of such section is amended by striking ‘‘May 1,
2002’’ and inserting ‘‘December 12, 2002’’.
Subtitle D—Other Matters
SEC. 341. USE OF HUMANITARIAN AND CIVIC ASSISTANCE
FUNDS FOR RESERVE COMPONENT MEMBERS
OF 
SPECIAL 
OPERATIONS 
COMMAND 
EN-
GAGED IN ACTIVITIES RELATING TO CLEAR-
ANCE OF LANDMINES.
Section 401(c) of title 10, United States Code, is
amended by adding at the end the following new paragraph
(5):
‘‘(5) Up to 10 percent of the amount available for a
fiscal year for activities described in subsection (e)(5) may
be expended for the pay and allowances of reserve compo-
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nent members of the Special Operations Command per-
forming duty in connection with training and activities re-
lated to the clearing of landmines for humanitarian pur-
poses.’’.
SEC. 342. CALCULATION OF FIVE-YEAR PERIOD OF LIMITA-
TION FOR NAVY-MARINE CORPS INTRANET
CONTRACT.
(a) COMMENCEMENT OF PERIOD.—The five-year pe-
riod of limitation that is applicable to the multiyear Navy-
Marine Corps Intranet contract under section 2306c of title
10, United States Code, shall be deemed to have begun on
the date on which the Under Secretary of Defense for Acqui-
sition, Technology, and Logistics and the Chief Information
Officer of the Department of Defense approved the ordering
of additional workstations under such contract in accord-
ance with subsection (c) of section 814 of the Floyd D.
Spence National Defense Authorization Act for Fiscal Year
2001, as added by section 362(a) of the National Defense
Authorization Act for Fiscal Year 2002 (Public Law 107–
107; 115 Stat. 1065).
(b) DEFINITION.—In this section, the term ‘‘Navy-Ma-
rine Corps Intranet contract’’ has the meaning given such
term in section 814(i)(1) of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001 (as amend-
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ed by section 362(c) of Public Law 107–107 (115 Stat.
1067)).
SEC. 343. REIMBURSEMENT FOR RESERVE COMPONENT IN-
TELLIGENCE SUPPORT.
(a) SOURCE OF FUNDS.—Chapter 1003 of title 10,
United States Code, is amended by adding at the end the
following new section:
‘‘§ 10115. Reimbursement for reserve component intel-
ligence support
‘‘(a) AUTHORITY.—Funds appropriated or otherwise
made available to a military department, Defense Agency,
or combatant command for operation and maintenance
shall be available for the pay, allowances, and other costs
that would be charged to appropriations for a reserve com-
ponent for the performance of duties by members of that
reserve component in providing intelligence or counterintel-
ligence support to—
‘‘(1) such military department, Defense Agency,
or combatant command; or
‘‘(2) a joint intelligence activity, including any
such activity for which funds are authorized to be ap-
propriated within the National Foreign Intelligence
Program, the Joint Military Intelligence Program, or
the Tactical Intelligence and Related Activities aggre-
gate (or any successor to such program or aggregate).
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‘‘(b) CONSTRUCTION OF PROVISION.—Nothing in this
section shall be construed to authorize deviation from estab-
lished reserve component personnel or training proce-
dures.’’.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of such chapter is amended by adding at the
end the following new item:
‘‘10115. Reimbursement for reserve component intelligence support.’’.
SEC. 344. REBATE AGREEMENTS UNDER THE SPECIAL SUP-
PLEMENTAL FOOD PROGRAM.
(a) APPLICABILITY TO NAVY EXCHANGE MARKETS.—
Paragraph (1)(A) of section 1060a(e) of title 10, United
States Code, is amended by inserting ‘‘or Navy Exchange
Markets’’ after ‘‘commissary stores’’.
(b) INCREASED MAXIMUM PERIOD OF AGREEMENT.—
Paragraph (3) of such section 1060a(e) is amended by strik-
ing ‘‘subsection may not exceed one year’’ in the first sen-
tence and inserting ‘‘subsection, including any period of ex-
tension of the contract by modification of the contract, exer-
cise of an option, or other cause, may not exceed three
years’’.
SEC. 345. LOGISTICS SUPPORT AND SERVICES FOR WEAPON
SYSTEMS CONTRACTORS.
(a) AUTHORITY.—The Secretary of Defense may make
available, in accordance with this section and the regula-
tions prescribed under subsection (e), logistics support and
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logistics services to a contractor in support of the perform-
ance by the contractor of a contract for the construction,
modification, or maintenance of a weapon system that is
entered into by an official of the Department of Defense.
(b) SUPPORT CONTRACTS.—Any logistics support and
logistics services that is to be provided under this section
to a contractor in support of the performance of a contract
shall be provided under a separate contract that is entered
into by the Director of the Defense Logistics Agency with
that contractor.
(c) SCOPE OF SUPPORT AND SERVICES.—The logistics
support and logistics services that may be provided under
this section in support of the performance of a contract de-
scribed in subsection (a) are the distribution, disposal, and
cataloging of materiel and repair parts necessary for the
performance of that contract.
(d) LIMITATIONS.—(1) The number of contracts de-
scribed in subsection (a) for which the Secretary makes lo-
gistics support and logistics services available under the au-
thority of this section may not exceed five contracts. The
total amount of the estimated costs of all such contracts for
which logistics support and logistics services are made
available under this section may not exceed $100,000,000.
(2) No contract entered into by the Director of the De-
fense Logistics Agency under subsection (b) may be for a
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period in excess of five years, including periods for which
the contract is extended under options to extend the con-
tract.
(e) REGULATIONS.—Before exercising the authority
under this section, the Secretary of Defense shall prescribe
in regulations such requirements, conditions, and restric-
tions as the Secretary determines appropriate to ensure that
logistics support and logistics services are provided under
this section only when it is in the best interests of the
United States to do so. The regulations shall include, at
a minimum, the following:
(1) A requirement for the authority under this
section to be used only for providing logistics support
and logistics services in support of the performance of
a contract that is entered into using competitive pro-
cedures (as defined in section 4 of the Office of Fed-
eral Procurement Policy Act (41 U.S.C. 403)).
(2) A requirement for the solicitation of offers for
a contract described in subsection (a), for which logis-
tics support and logistics services are to be made
available under this section, to include—
(A) a statement that the logistics support
and logistics services are to be made available
under the authority of this section to any con-
tractor awarded the contract, but only on a basis
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that does not require acceptance of the support
and services; and
(B) a description of the range of the logis-
tics support and logistics services that are to be
made available to the contractor.
(3) A requirement for the rates charged a con-
tractor for logistics support and logistics services pro-
vided to a contractor under this section to reflect the
full cost to the United States of the resources used in
providing the support and services, including the
costs of resources used, but not paid for, by the De-
partment of Defense.
(4) A requirement to credit to the General Fund
of the Treasury amounts received by the Department
of Defense from a contractor for the cost of logistics
support and logistics services provided to the con-
tractor by the Department of Defense under this sec-
tion but not paid for out of funds available to the De-
partment of Defense.
(5) With respect to a contract described in sub-
section (a) that is being performed for a department
or agency outside the Department of Defense, a prohi-
bition, in accordance with applicable contracting pro-
cedures, on the imposition of any charge on that de-
partment or agency for any effort of Department of
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Defense personnel or the contractor to correct defi-
ciencies in the performance of such contract.
(6) A prohibition on the imposition of any
charge on a contractor for any effort of the contractor
to correct a deficiency in the performance of logistics
support and logistics services provided to the con-
tractor under this section.
(f) RELATIONSHIP
TO TREATY OBLIGATIONS.—The
Secretary shall ensure that the exercise of authority under
this section does not conflict with any obligation of the
United States under any treaty or other international
agreement.
(g) TERMINATION OF AUTHORITY.—(1) The authority
provided in this section shall expire on September 30, 2007,
subject to paragraph (2).
(2) The expiration of the authority under this section
does not terminate—
(A) any contract that was entered into by the
Director of the Defense Logistics Agency under sub-
section (b) before the expiration of the authority or
any obligation to provide logistics support and logis-
tics services under that contract; or
(B) any authority—
(i) to enter into a contract described in sub-
section (a) for which a solicitation of offers was
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issued in accordance with the regulations pre-
scribed pursuant to subsection (e)(2) before the
date of the expiration of the authority; or
(ii) to provide logistics support and logistics
services to the contractor with respect to that
contract in accordance with this section.
SEC. 346. CONTINUATION OF ARSENAL SUPPORT PROGRAM
INITIATIVE.
(a) EXTENSION THROUGH FISCAL YEAR 2004.—Sub-
section (a) of section 343 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–65) is
amended by striking ‘‘and 2002’’ and inserting ‘‘through
2004’’.
(b) REPORTING REQUIREMENTS.—Subsection (g) of
such section is amended—
(1) in paragraph (1), by striking ‘‘2002’’ and in-
serting ‘‘2004’’; and
(2) in paragraph (2), by striking the first sen-
tence and inserting the following new sentence: ‘‘Not
later than July 1, 2003, the Secretary of the Army
shall submit to the congressional defense committees a
report on the results of the demonstration program
since its implementation, including the Secretary’s
views regarding the benefits of the program for Army
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manufacturing arsenals and the Department of the
Army and the success of the program in achieving the
purposes specified in subsection (b).’’.
SEC. 347. TWO-YEAR EXTENSION OF AUTHORITY OF THE
SECRETARY OF DEFENSE TO ENGAGE IN COM-
MERCIAL ACTIVITIES AS SECURITY FOR IN-
TELLIGENCE 
COLLECTION 
ACTIVITIES
ABROAD.
Section 431(a) of title 10, United States Code, is
amended by striking ‘‘December 31, 2002’’ in the second
sentence and inserting ‘‘December 31, 2004’’.
SEC. 348. INSTALLATION AND CONNECTION POLICY AND
PROCEDURES REGARDING DEFENSE SWITCH
NETWORK.
(a) ESTABLISHMENT OF POLICY AND PROCEDURES.—
Not later than 180 days after the date of the enactment of
this Act, the Secretary of Defense shall establish clear and
uniform policy and procedures, applicable to the military
departments and Defense Agencies, regarding the installa-
tion and connection of telecom switches to the Defense
Switch Network.
(b) ELEMENTS OF POLICY AND PROCEDURES.—The
policy and procedures shall address at a minimum the fol-
lowing:
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(1) Clear interoperability and compatibility re-
quirements for procuring, certifying, installing, and
connecting telecom switches to the Defense Switch
Network.
(2) Current, complete, and enforceable testing,
validation, and certification procedures needed to en-
sure the interoperability and compatibility require-
ments are satisfied.
(c) EXCEPTIONS.—(1) The Secretary of Defense may
specify certain circumstances in which—
(A) the requirements for testing, validation, and
certification of telecom switches may be waived; or
(B) interim authority for the installation and
connection of telecom switches to the Defense Switch
Network may be granted.
(2) Only the Assistant Secretary of Defense for Com-
mand, Control, Communications, and Intelligence, after
consultation with the Chairman of the Joint Chiefs of Staff,
may approve a waiver or grant of interim authority under
paragraph (1).
(d) INVENTORY OF DEFENSE SWITCH NETWORK.—The
Secretary of Defense shall prepare and maintain an inven-
tory of all telecom switches that, as of the date on which
the Secretary issues the policy and procedures—
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(1) are installed or connected to the Defense
Switch Network; but
(2) have not been tested, validated, and certified
by the Defense Information Systems Agency (Joint
Interoperability Test Center).
(e) INTEROPERABILITY RISKS.—(1) The Secretary of
Defense shall, on an ongoing basis—
(A) identify and assess the interoperability risks
that are associated with the installation or connection
of uncertified switches to the Defense Switch Network
and the maintenance of such switches on the Defense
Switch Network; and
(B) develop and implement a plan to eliminate
or mitigate such risks as identified.
(2) The Secretary shall initiate action under para-
graph (1) upon completing the initial inventory of telecom
switches required by subsection (d).
(f) TELECOM SWITCH DEFINED.—In this section, the
term ‘‘telecom switch’’ means hardware or software designed
to send and receive voice, data, or video signals across a
network that provides customer voice, data, or video equip-
ment access to the Defense Switch Network or public
switched telecommunications networks.
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SEC. 349. ENGINEERING STUDY AND ENVIRONMENTAL
ANALYSIS OF ROAD MODIFICATIONS IN VI-
CINITY OF FORT BELVOIR, VIRGINIA.
(a) STUDY AND ANALYSIS.—(1) The Secretary of the
Army shall conduct a preliminary engineering study and
environmental analysis to evaluate the feasibility of estab-
lishing a connector road between Richmond Highway
(United States Route 1) and Telegraph Road in order to
provide an alternative to Beulah Road (State Route 613)
and Woodlawn Road (State Route 618) at Fort Belvoir,
Virginia, which were closed as a force protection measure.
(2) It is the sense of Congress that the study and anal-
ysis should consider as one alternative the extension of Old
Mill Road between Richmond Highway and Telegraph
Road.
(b) CONSULTATION.—The study required by subsection
(a) shall be conducted in consultation with the Department
of Transportation of the Commonwealth of Virginia and
Fairfax County, Virginia.
(c) REPORT.—The Secretary shall submit to Congress
a summary report on the study and analysis required by
subsection (a). The summary report shall be submitted to-
gether with the budget justification materials in support of
the budget of the President for fiscal year 2006 that is sub-
mitted to Congress under section 1105(a) of title 31, United
States Code.
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(d) FUNDING.—Of the amount authorized to be appro-
priated by section 301(a)(1) for the Army for operation and
maintenance, $5,000,000 may be available for the study
and analysis required by subsection (a).
SEC. 350. EXTENSION OF WORK SAFETY DEMONSTRATION
PROGRAM.
Section 1112 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–313) is
amended—
(1) in subsection (d), by striking ‘‘September 30,
2002’’ and inserting ‘‘September 30, 2003’’; and
(2) in subsection (e)(2), by striking ‘‘December 1,
2002’’ and inserting ‘‘December 1, 2003’’.
SEC. 351. LIFT SUPPORT FOR MINE WARFARE SHIPS AND
OTHER VESSELS.
(a) AMOUNT.—Of the amount authorized to be appro-
priated by section 302(2), $10,000,000 shall be available for
implementing the recommendations resulting from the
Navy’s Non-Self Deployable Watercraft (NDSW) Study and
the Joint Chiefs of Staff Focused Logistics Study, which
are to determine the requirements of the Navy for providing
lift support for mine warfare ships and other vessels.
(b) OFFSETTING REDUCTION.—Of the amount author-
ized to be appropriated by section 302(2), the amount pro-
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vided for the procurement of mine countermeasures ships
cradles is hereby reduced by $10,000,000.
SEC. 352. NAVY DATA CONVERSION ACTIVITIES.
(a) AMOUNT FOR ACTIVITIES.—The amount author-
ized to be appropriated by section 301(a)(2) is hereby in-
creased by $1,500,000. The total amount of such increase
may be available for the Navy Data Conversion and Man-
agement Laboratory to support data conversion activities
for the Navy.
(b) OFFSET.—The amount authorized to be appro-
priated by section 301(a)(1) is hereby reduced by
$1,500,000 to reflect a reduction in the utilities privatiza-
tion efforts previously planned by the Army.
TITLE IV—MILITARY PERSONNEL
AUTHORIZATIONS
Subtitle A—Active Forces
SEC. 401. END STRENGTHS FOR ACTIVE FORCES.
The Armed Forces are authorized strengths for active
duty personnel as of September 30, 2003, as follows:
(1) The Army, 485,000.
(2) The Navy, 379,200.
(3) The Marine Corps, 175,000.
(4) The Air Force, 362,500.
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SEC. 402. AUTHORITY TO INCREASE STRENGTH AND GRADE
LIMITATIONS TO ACCOUNT FOR RESERVE
COMPONENT MEMBERS ON ACTIVE DUTY IN
SUPPORT OF A CONTINGENCY OPERATION.
(a) ACTIVE DUTY STRENGTH.—Section 115(c)(1) of
title 10, United States Code, is amended to read as follows:
‘‘(1) increase the end strength authorized pursu-
ant to subsection (a)(1)(A) for a fiscal year for any
of the armed forces by—
‘‘(A) a number equal to not more than 2
percent of that end strength;
‘‘(B) a number equal to the number of mem-
bers of the reserve components of that armed
force on active duty under section 12301(d) of
this title in support of a contingency operation
in that fiscal year; or
‘‘(C) a number not greater than the sum of
the numbers authorized by subparagraphs (A)
and (B).’’.
(b) AUTHORIZED DAILY AVERAGE FOR MEMBERS IN
PAY GRADES E–8 AND E–9 ON ACTIVE DUTY.—Section 517
of such title is amended by adding at the end the following
new paragraph:
‘‘(d) The Secretary of Defense may increase the author-
ized daily average number of enlisted members on active
duty in an armed force in pay grades E–8 and E–9 in
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a fiscal year under subsection (a) by the number of enlisted
members of reserve components of that armed force in pay
grades E–8 and E–9, respectively, that are on active duty
in that fiscal year under section 12301(d) of this title in
support of a contingency operation.’’.
(c) AUTHORIZED STRENGTHS FOR COMMISSIONED OF-
FICERS IN PAY GRADES O–4, O–5, AND O–6 ON ACTIVE
DUTY.—Section 523 of such title is amended—
(1) in subsection (a), by striking ‘‘subsection (c)’’
in paragraphs (1) and (2) and inserting ‘‘subsections
(c) and (e)’’; and
(2) by adding at the end the following new sub-
section:
‘‘(e) The Secretary of Defense may increase the author-
ized total number of commissioned officers serving on active
duty in the Army, Navy, Air Force, or Marine Corps in
a grade referred to in subsection (c) at the end of any fiscal
year under that subsection by the number of commissioned
officers of reserve components of the Army, Navy, Air Force,
or Marine Corps, respectively, that are then serving on ac-
tive duty in that grade under section 12301(d) of this title
in support of a contingency operation.’’.
(d) AUTHORIZED STRENGTHS
FOR GENERAL
AND
FLAG OFFICERS ON ACTIVE DUTY.—Section 526(a) of such
title is amended—
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(1) by redesignating paragraphs (1), (2), (3),
and (4) as subparagraphs (A), (B), (C), and (D), re-
spectively;
(2) by striking ‘‘LIMITATIONS.—The’’ and insert-
ing ‘‘LIMITATIONS.—(1) Except as provided in para-
graph (2), the’’; and
(3) by adding at the end the following new para-
graph (2):
‘‘(2) The Secretary of Defense may increase the number
of general and flag officers authorized to be on active duty
in the Army, Navy, Air Force, or Marine Corps under
paragraph (1) by the number of reserve general or flag offi-
cers of reserve components of the Army, Navy, Air Force,
or Marine Corps, respectively, that are on active duty under
section 12301(d) of this title in support of a contingency
operation.’’.
SEC. 403. INCREASED ALLOWANCE FOR NUMBER OF MA-
RINE CORPS GENERAL OFFICERS ON ACTIVE
DUTY IN GRADES ABOVE MAJOR GENERAL.
Section 525(b)(2)(B) of title 10, United States Code,
is amended by striking ‘‘16.2 percent’’ and inserting ‘‘17.5
percent’’.
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SEC. 404. INCREASE IN AUTHORIZED STRENGTHS FOR MA-
RINE CORPS OFFICERS ON ACTIVE DUTY IN
THE GRADE OF COLONEL.
The table in section 523(a)(1) of title 10, United States
Code, is amended by striking the figures under the heading
‘‘Colonel’’ in the portion of the table relating to the Marine
Corps and inserting the following:
‘‘571
632
653
673
694
715
735’’.
Subtitle B—Reserve Forces
SEC. 411. END STRENGTHS FOR SELECTED RESERVE.
(a) IN GENERAL.—The Armed Forces are authorized
strengths for Selected Reserve personnel of the reserve com-
ponents as of September 30, 2003, as follows:
(1) The Army National Guard of the United
States, 350,000.
(2) The Army Reserve, 205,000.
(3) The Naval Reserve, 87,800.
(4) The Marine Corps Reserve, 39,558.
(5) The Air National Guard of the United
States, 106,600.
(6) The Air Force Reserve, 75,600.
(7) The Coast Guard Reserve, 9,000.
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(b) ADJUSTMENTS.—The end strengths prescribed by
subsection (a) for the Selected Reserve of any reserve compo-
nent shall be proportionately reduced by—
(1) the total authorized strength of units orga-
nized to serve as units of the Selected Reserve of such
component which are on active duty (other than for
training) at the end of the fiscal year; and
(2) the total number of individual members not
in units organized to serve as units of the Selected
Reserve of such component who are on active duty
(other than for training or for unsatisfactory partici-
pation in training) without their consent at the end
of the fiscal year.
Whenever such units or such individual members are re-
leased from active duty during any fiscal year, the end
strength prescribed for such fiscal year for the Selected Re-
serve of such reserve component shall be proportionately in-
creased by the total authorized strengths of such units and
by the total number of such individual members.
SEC. 412. END STRENGTHS FOR RESERVES ON ACTIVE
DUTY IN SUPPORT OF THE RESERVES.
Within the end strengths prescribed in section 411(a),
the reserve components of the Armed Forces are authorized,
as of September 30, 2003, the following number of Reserves
to be serving on full-time active duty or full-time duty, in
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the case of members of the National Guard, for the purpose
of organizing, administering, recruiting, instructing, or
training the reserve components:
(1) The Army National Guard of the United
States, 24,492.
(2) The Army Reserve, 13,888.
(3) The Naval Reserve, 14,572.
(4) The Marine Corps Reserve, 2,261.
(5) The Air National Guard of the United
States, 11,727.
(6) The Air Force Reserve, 1,498.
SEC. 413. END STRENGTHS FOR MILITARY TECHNICIANS
(DUAL STATUS).
The minimum number of military technicians (dual
status) as of the last day of fiscal year 2003 for the reserve
components of the Army and the Air Force (notwith-
standing section 129 of title 10, United States Code) shall
be the following:
(1) For the Army Reserve, 6,599.
(2) For the Army National Guard of the United
States, 24,102.
(3) For the Air Force Reserve, 9,911.
(4) For the Air National Guard of the United
States, 22,495.
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SEC. 414. FISCAL YEAR 2003 LIMITATIONS ON NON-DUAL
STATUS TECHNICIANS.
(a) LIMITATIONS.—(1) Within the limitation provided
in section 10217(c)(2) of title 10, United States Code, the
number of non-dual status technicians employed by the Na-
tional Guard as of September 30, 2003, may not exceed the
following:
(A) For the Army National Guard of the United
States, 1,600.
(B) For the Air National Guard of the United
States, 350.
(2) The number of non-dual status technicians em-
ployed by the Army Reserve as of September 30, 2003, may
not exceed 995.
(3) The Air Force Reserve may not employ any person
as a non-dual status technician during fiscal year 2003.
(b) NON-DUAL STATUS TECHNICIANS DEFINED.—In
this section, the term ‘‘non-dual status technician’’ has the
meaning given the term in section 10217(a) of title 10,
United States Code.
Subtitle C—Authorization of
Appropriations
SEC. 421. AUTHORIZATION OF APPROPRIATIONS FOR MILI-
TARY PERSONNEL.
There is hereby authorized to be appropriated to the
Department of Defense for military personnel for fiscal year
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2003 a total of $94,352,208,000. The authorization in the
preceding sentence supersedes any other authorization of
appropriations (definite or indefinite) for such purpose for
fiscal year 2003.
TITLE V—MILITARY PERSONNEL
POLICY
Subtitle A—Officer Personnel Policy
SEC. 501. EXTENSION OF CERTAIN REQUIREMENTS AND EX-
CLUSIONS APPLICABLE TO SERVICE OF GEN-
ERAL AND FLAG OFFICERS ON ACTIVE DUTY
IN CERTAIN JOINT DUTY ASSIGNMENTS.
(a) RECOMMENDATIONS FOR ASSIGNMENT TO SENIOR
JOINT OFFICER POSITIONS.—Section 604(c) of title 10,
United States Code, is amended by striking ‘‘September 30,
2003’’ and inserting ‘‘December 31, 2003’’.
(b) INAPPLICABILITY OF GRADE DISTRIBUTION RE-
QUIREMENTS.—Section 525(b)(5)(C) of such title is amend-
ed by striking ‘‘September 30, 2003’’ and inserting ‘‘Decem-
ber 31, 2003’’.
(c) EXCLUSION FROM STRENGTH LIMITATION.—Sec-
tion 526(b)(3) of such title is amended by striking ‘‘October
1, 2002’’ and inserting ‘‘December 31, 2003’’.
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SEC. 502. EXTENSION OF AUTHORITY TO WAIVE REQUIRE-
MENT FOR SIGNIFICANT JOINT DUTY EXPERI-
ENCE FOR APPOINTMENT AS A CHIEF OF A
RESERVE 
COMPONENT 
OR 
A 
NATIONAL
GUARD DIRECTOR.
(a) CHIEF OF ARMY RESERVE.—Section 3038(b)(4) of
title 10, United States Code, is amended by striking ‘‘Octo-
ber 1, 2003’’ and inserting ‘‘December 31, 2003’’.
(b) CHIEF OF NAVAL RESERVE.—Section 5143(b)(4)
of such title is amended by striking ‘‘October 1, 2003’’ and
inserting ‘‘December 31, 2003’’.
(c) COMMANDER, MARINE FORCES RESERVE.—Section
5144(b)(4) of such title is amended by striking ‘‘October 1,
2003’’ and inserting ‘‘December 31, 2003’’.
(d) CHIEF
OF
AIR
FORCE
RESERVE.—Section
8038(b)(4) of such title 10, United States Code, is amended
by striking ‘‘October 1, 2003’’ and inserting ‘‘December 31,
2003’’.
(e) DIRECTORS OF THE NATIONAL GUARD.—Section
10506(a)(3)(D) of such title is amended by striking ‘‘Octo-
ber 1, 2003’’ and inserting ‘‘December 31, 2003’’.
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SEC. 503. REPEAL OF LIMITATION ON AUTHORITY TO
GRANT CERTAIN OFFICERS A WAIVER OF RE-
QUIRED 
SEQUENCE 
FOR 
JOINT 
PROFES-
SIONAL MILITARY EDUCATION AND JOINT
DUTY ASSIGNMENT.
Section 661(c)(3)(D) of title 10, United States Code,
is amended by striking ‘‘In the case of officers in grades
below brigadier general’’ and all that follows through ‘‘se-
lected for the joint specialty during that fiscal year.’’.
SEC. 504. EXTENSION OF TEMPORARY AUTHORITY FOR RE-
CALL OF RETIRED AVIATORS.
Section 501(e) of the National Defense Authorization
Act for Fiscal Year 2000 (Public Law 106–65; 113 Stat.
589) is amended by striking ‘‘September 30, 2002’’ and in-
serting ‘‘September 30, 2008’’.
SEC. 505. INCREASED GRADE FOR HEADS OF NURSE CORPS.
(a) ARMY.—Section 3069(b) of title 10, United States
Code, is amended by striking ‘‘brigadier general’’ in the sec-
ond sentence and inserting ‘‘major general’’.
(b) NAVY.—The first sentence of section 5150(c) of such
title is amended—
(1) by inserting ‘‘rear admiral (upper half) in
the case of an officer in the Nurse Corps or’’ after ‘‘for
promotion to the grade of’’; and
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(2) by inserting ‘‘in the case of an officer in the
Medical Service Corps’’ after ‘‘rear admiral (lower
half)’’.
(c) AIR FORCE.—Section 8069(b) of such title is
amended by striking ‘‘brigadier general’’ in the second sen-
tence and inserting ‘‘major general’’.
SEC. 506. REINSTATEMENT OF AUTHORITY TO REDUCE
SERVICE REQUIREMENT FOR RETIREMENT IN
GRADES ABOVE O–4.
(a) 
OFFICERS
ON
ACTIVE
DUTY.—Subsection
(a)(2)(A) of section 1370 of title 10, United States Code,
is amended—
(1) by striking ‘‘may authorize’’ and all that fol-
lows and inserting ‘‘may, in the case of retirements
effective during the period beginning on September 1,
2002, and ending on December 31, 2004, author-
ize—’’; and
(2) by adding at the end the following:
‘‘(1) the Deputy Under Secretary of Defense for
Personnel and Readiness to reduce such 3-year period
of required service to a period not less than two years
for retirements in grades above colonel or, in the case
of the Navy, captain; and
‘‘(2) the Secretary of a military department or
the Assistant Secretary of a military department hav-
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ing responsibility for manpower and reserve affairs to
reduce such 3-year period to a period of required serv-
ice not less than two years for retirements in grades
of lieutenant colonel and colonel or, in the case of the
Navy, commander and captain.’’.
(b) RESERVE OFFICERS.—Subsection (d)(5) of such
section is amended—
(1) in the first sentence—
(A) by striking ‘‘may authorize’’ and all
that follows and inserting ‘‘may, in the case of
retirements effective during the period beginning
on September 1, 2002, and ending on December
31, 2004, authorize—’’; and
(B) by adding at the end the following:
‘‘(A) the Deputy Under Secretary of Defense for
Personnel and Readiness to reduce such 3-year period
of required service to a period not less than two years
for retirements in grades above colonel or, in the case
of the Navy, captain; and
‘‘(B) the Secretary of a military department or
the Assistant Secretary of a military department hav-
ing responsibility for manpower and reserve affairs to
reduce such 3-year period of required service to a pe-
riod not less than two years for retirements in grades
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of lieutenant colonel and colonel or, in the case of the
Navy, commander and captain.’’;
(2) by designating the second sentence as para-
graph (6) and realigning such paragraph, as so redes-
ignated 2 ems from the left margin; and
(3) in paragraph (6), as so redesignated, by
striking ‘‘this paragraph’’ and inserting ‘‘paragraph
(5)’’.
(c) ADVANCE NOTICE TO THE PRESIDENT AND CON-
GRESS.—Such section is further amended by adding at the
end the following new subsection:
‘‘(e) ADVANCE NOTICE TO CONGRESS.—(1) The Sec-
retary of Defense shall notify the Committees on Armed
Services of the Senate and House of Representatives of—
‘‘(A) an exercise of authority under paragraph
(2)(A) of subsection (a) to reduce the 3-year min-
imum period of required service on active duty in a
grade in the case of an officer to whom such para-
graph applies before the officer is retired in such
grade under such subsection without having satisfied
that 3-year service requirement; and
‘‘(B) an exercise of authority under paragraph
(5) of subsection (d) to reduce the 3-year minimum
period of service in grade required under paragraph
(3)(A) of such subsection in the case of an officer to
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whom such paragraph applies before the officer is
credited with satisfactory service in such grade under
subsection (d) without having satisfied that 3-year
service requirement.
‘‘(2) The requirement for a notification under para-
graph (1) is satisfied in the case of an officer to whom sub-
section (c) applies if the notification is included in the cer-
tification submitted with respect to such officer under para-
graph (1) of such subsection.
‘‘(3) The notification requirement under paragraph
(1) does not apply to an officer being retired in the grade
of lieutenant colonel or colonel or, in the case of the Navy,
commander or captain.’’.
Subtitle B—Reserve Component
Personnel Policy
SEC. 511. TIME FOR COMMENCEMENT OF INITIAL PERIOD
OF ACTIVE DUTY FOR TRAINING UPON EN-
LISTMENT IN RESERVE COMPONENT.
Section 12103(d) of title 10, United States Code, is
amended by striking ‘‘270 days’’ in the second sentence and
inserting ‘‘one year’’.
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SEC. 512. AUTHORITY FOR LIMITED EXTENSION OF MED-
ICAL DEFERMENT OF MANDATORY RETIRE-
MENT OR SEPARATION OF RESERVE COMPO-
NENT OFFICER.
(a) AUTHORITY.—Chapter 1407 of title 10, United
States Code, is amended by adding at the end the following
new section:
‘‘§ 14519. Deferment of retirement or separation for
medical reasons
‘‘(a) AUTHORITY.—If, in the case of an officer required
to be retired or separated under this chapter or chapter
1409 of this title, the Secretary concerned determines that
the evaluation of the physical condition of the officer and
determination of the officer’s entitlement to retirement or
separation for physical disability require hospitalization or
medical observation and that such hospitalization or med-
ical observation cannot be completed with confidence in a
manner consistent with the officer’s well being before the
date on which the officer would otherwise be required to re-
tire or be separated, the Secretary may defer the retirement
or separation of the officer.
‘‘(b) PERIOD OF DEFERMENT.—A deferral of retire-
ment or separation under subsection (a) may not extend
for more than 30 days after the completion of the evaluation
requiring hospitalization or medical observation.’’.
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(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of such chapter is amended by adding at the
end the following new item:
‘‘14519. Deferment of retirement or separation for medical reasons.’’.
SEC. 513. REPEAL OF PROHIBITION ON USE OF AIR FORCE
RESERVE AGR PERSONNEL FOR AIR FORCE
BASE SECURITY FUNCTIONS.
(a) REPEAL.—Section 12551 of title 10, United States
Code, is repealed.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 1215 of such title is amended by
striking the item relating to section 12551.
Subtitle C—Education and
Training
SEC. 521. INCREASE IN AUTHORIZED STRENGTHS FOR THE
SERVICE ACADEMIES.
(a) UNITED STATES MILITARY ACADEMY.—Section
4342 of title 10, United States Code, is amended—
(1) in subsection (a), by striking ‘‘4,000’’ in the
first sentence and inserting ‘‘4,400’’; and
(2) in subsection (i), by striking ‘‘variance in
that limitation’’ and inserting ‘‘variance above that
limitation’’.
(b) UNITED STATES NAVAL ACADEMY.—Section 6954
of title 10, United States Code, is amended—
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(1) in subsection (a), by striking ‘‘4,000’’ in the
first sentence and inserting ‘‘4,400’; and
(2) in subsection (g), by striking ‘‘variance in
that limitation’’ and inserting ‘‘variance above that
limitation’’.
(c) UNITED STATES AIR FORCE ACADEMY.—Section
9342 of title 10, United States Code, is amended—
(1) in subsection (a), by striking ‘‘4,000’’ in the
first sentence and inserting ‘‘4,400’’; and
(2) in subsection (i), by striking ‘‘variance in
that limitation’’ and inserting ‘‘variance above that
limitation’’.
Subtitle D—Decorations, Awards,
and Commendations
SEC. 531. WAIVER OF TIME LIMITATIONS FOR AWARD OF
CERTAIN DECORATIONS TO CERTAIN PER-
SONS.
(a) WAIVER.—Any limitation established by law or
policy for the time within which a recommendation for the
award of a military decoration or award must be submitted
shall not apply to awards of decorations described in this
section, the award of each such decoration having been de-
termined by the Secretary concerned to be warranted in ac-
cordance with section 1130 of title 10, United States Code.
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(b) DISTINGUISHED-SERVICE CROSS OF THE ARMY.—
Subsection (a) applies to the award of the Distinguished-
Service Cross of the Army as follows:
(1) To Henry Johnson of Albany, New York, for
extraordinary heroism in France during the period of
May 13 to 15, 1918, while serving as a member of the
Army.
(2) To Hilliard Carter of Jackson, Mississippi,
for extraordinary heroism in actions near Troung
Loung, Republic of Vietnam, on September 28, 1966,
while serving as a member of the Army.
(3) To Albert C. Welch of Highland Ranch, Colo-
rado, for extraordinary heroism in actions in Ong
Thanh, Binh Long Province, Republic of Vietnam, on
October 17, 1967, while serving as a member of the
Army.
(c) DISTINGUISHED FLYING CROSS OF THE NAVY.—
Subsection (a) applies to the award of the Distinguished
Flying Cross of the Navy as follows:
(1) To Eduguardo Coppola of Falls Church, Vir-
ginia, for extraordinary achievement while partici-
pating in aerial flight during World War II, while
serving as a member of the Navy.
(2) To James Hoisington, Jr., of Stillman Val-
ley, Illinois, for extraordinary achievement while par-
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ticipating in aerial flight during World War II, while
serving as a member of the Navy.
(3) To William M. Melvin of Lawrenceburg, Ten-
nessee, for extraordinary achievement while partici-
pating in aerial flight during World War II, while
serving as a member of the Navy.
(4) To Vincent Urbank of Tom River, New Jer-
sey, for extraordinary achievement while partici-
pating in aerial flight during World War II, while
serving as a member of the Navy.
SEC. 532. KOREA DEFENSE SERVICE MEDAL.
(a) FINDINGS.—Congress makes the following findings:
(1) More than 40,000 members of the United
States Armed Forces have served on the Korean Pe-
ninsula each year since the signing of the cease-fire
agreement in July 1953 ending the Korean War.
(2) An estimated 1,200 members of the United
States Armed Forces died as a direct result of their
service in Korea since the cease-fire agreement in
July 1953.
(b) ARMY.—(1) Chapter 357 of title 10, United States
Code, is amended by adding at the end the following new
section:
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‘‘§ 3755. Korea Defense Service Medal
‘‘(a) The Secretary of the Army shall issue a campaign
medal, to be known as the Korea Defense Service Medal,
to each person who while a member of the Army served in
the Republic of Korea or the waters adjacent thereto during
the KDSM eligibility period and met the service require-
ments for the award of that medal prescribed under sub-
section (c).
‘‘(b) In this section, the term ‘KDSM eligibility period’
means the period beginning on July 28, 1954, and ending
on such date after the date of the enactment of this section
as may be determined by the Secretary of Defense to be ap-
propriate for terminating eligibility for the Korea Defense
Service Medal.
‘‘(c) The Secretary of the Army shall prescribe service
requirements for eligibility for the Korea Defense Service
Medal. Those requirements shall not be more stringent than
the service requirements for award of the Armed Forces Ex-
peditionary Medal for instances in which the award of that
medal is authorized.’’.
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item:
‘‘3755. Korea Defense Service Medal.’’.
(c) NAVY AND MARINE CORPS.—(1) Chapter 567 of
title 10, United States Code, is amended by adding at the
end the following new section:
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‘‘§ 6257. Korea Defense Service Medal
‘‘(a) The Secretary of the Navy shall issue a campaign
medal, to be known as the Korea Defense Service Medal,
to each person who while a member of the Navy or Marine
Corps served in the Republic of Korea or the waters adja-
cent thereto during the KDSM eligibility period and met
the service requirements for the award of that medal pre-
scribed under subsection (c).
‘‘(b) In this section, the term ‘KDSM eligibility period’
means the period beginning on July 28, 1954, and ending
on such date after the date of the enactment of this section
as may be determined by the Secretary of Defense to be ap-
propriate for terminating eligibility for the Korea Defense
Service Medal.
‘‘(c) The Secretary of the Navy shall prescribe service
requirements for eligibility for the Korea Defense Service
Medal. Those requirements shall not be more stringent than
the service requirements for award of the Armed Forces Ex-
peditionary Medal for instances in which the award of that
medal is authorized.’’.
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item:
‘‘6257. Korea Defense Service Medal.’’.
(d) AIR FORCE.—(1) Chapter 857 of title 10, United
States Code, is amended by adding at the end the following
new section:
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‘‘§ 8755. Korea Defense Service Medal
‘‘(a) The Secretary of the Air Force shall issue a cam-
paign medal, to be known as the Korea Defense Service
Medal, to each person who while a member of the Air Force
served in the Republic of Korea or the waters adjacent there-
to during the KDSM eligibility period and met the service
requirements for the award of that medal prescribed under
subsection (c).
‘‘(b) In this section, the term ‘KDSM eligibility period’
means the period beginning on July 28, 1954, and ending
on such date after the date of the enactment of this section
as may be determined by the Secretary of Defense to be ap-
propriate for terminating eligibility for the Korea Defense
Service Medal.
‘‘(c) The Secretary of the Air Force shall prescribe serv-
ice requirements for eligibility for the Korea Defense Service
Medal. Those requirements shall not be more stringent than
the service requirements for award of the Armed Forces Ex-
peditionary Medal for instances in which the award of that
medal is authorized.’’.
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item:
‘‘8755. Korea Defense Service Medal.’’.
(e) AWARD FOR SERVICE BEFORE DATE OF ENACT-
MENT.—The Secretary of the military department con-
cerned shall take appropriate steps to provide in a timely
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manner for the issuance of the Korea Defense Service Medal,
upon application therefor, to persons whose eligibility for
that medal is by reason of service in the Republic of Korea
or the waters adjacent thereto before the date of the enact-
ment of this Act.
Subtitle E—National Call to
Service
SEC. 541. ENLISTMENT INCENTIVES FOR PURSUIT OF
SKILLS TO FACILITATE NATIONAL SERVICE.
(a) AUTHORITY.—(1) Chapter 5 of title 37, United
States Code, is amended by adding at the end the following
new section:
‘‘§ 326. Enlistment incentives for pursuit of skills to
facilitate national service
‘‘(a) INCENTIVES AUTHORIZED.—The Secretary of De-
fense may carry out a program in accordance with the pro-
visions of this section under which program a National Call
to Service participant described in subsection (b) shall be
entitled to an incentive specified in subsection (d).
‘‘(b) NATIONAL CALL TO SERVICE PARTICIPANT.—In
this section, the term ‘National Call to Service participant’
means a person who first enlists in the armed forces pursu-
ant to a written agreement (prescribed by the Secretary of
the military department concerned) under which agreement
the person shall—
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‘‘(1) upon completion of initial entry training
(as prescribed by the Secretary of Defense), serve on
active duty in the armed forces in a military occupa-
tional specialty designated by the Secretary of Defense
under subsection (c) for a period of 15 months; and
‘‘(2) upon completion of such service on active
duty, and without a break in service, serve the min-
imum period of obligated service specified in the
agreement under this section—
‘‘(A) on active duty in the armed forces;
‘‘(B) in the Selected Reserve;
‘‘(C) in the Individual Ready Reserve;
‘‘(D) in the Peace Corps, Americorps, or an-
other national service program jointly designated
by the Secretary of Defense and the head of such
program for purposes of this section; or
‘‘(E) in any combination of service referred
to in subparagraphs (A) through (D) that is ap-
proved by the Secretary of the military depart-
ment concerned pursuant to regulations pre-
scribed by the Secretary of Defense.
‘‘(c) DESIGNATED MILITARY OCCUPATIONAL SPECIAL-
TIES.—The Secretary of Defense shall designate military
occupational specialties for purposes of subsection (b)(1).
Such military occupational specialties shall be military oc-
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cupational specialties that will facilitate, as determined by
the Secretary, pursuit of national service by National Call
to Service participants during and after their completion
of duty or service under an agreement under subsection (b).
‘‘(d) INCENTIVES.—The incentives specified in this
subsection are as follows:
‘‘(1) Payment of a bonus in the amount of
$5,000.
‘‘(2) Payment of outstanding principal and in-
terest on qualifying student loans of the National Call
to Service participant in an amount not to exceed
$18,000.
‘‘(3) Entitlement to an allowance for educational
assistance at the monthly rate equal to the monthly
rate payable for basic educational assistance allow-
ances under section 3015(a)(1) of title 38 for a total
of 12 months.
‘‘(4) Entitlement to an allowance for educational
assistance at the monthly rate equal to 2⁄3 of the
monthly rate payable for basic educational assistance
allowances under section 3015(b)(1) of title 38 for a
total of 36 months.
‘‘(e) ELECTION OF INCENTIVES.—A National Call to
Service participant shall elect in the agreement under sub-
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section (b) which incentive under subsection (d) to receive.
An election under this subsection is irrevocable.
‘‘(f) PAYMENT OF BONUS AMOUNTS.—(1) Payment to
a National Call to Service participant of the bonus elected
by the National Call to Service participant under sub-
section (d)(1) shall be made in such time and manner as
the Secretary of Defense shall prescribe.
‘‘(2)(A) Payment of outstanding principal and interest
on the qualifying student loans of a National Call to Service
participant, as elected under subsection (d)(2), shall be
made in such time and manner as the Secretary of Defense
shall prescribe.
‘‘(B) Payment under this paragraph of the out-
standing principal and interest on the qualifying student
loans of a National Call to Service participant shall be
made to the holder of such student loans, as identified by
the National Call to Service participant to the Secretary
of the military department concerned for purposes of such
payment.
‘‘(3) Payment of a bonus or incentive in accordance
with this subsection shall be made by the Secretary of the
military department concerned.
‘‘(g) COORDINATION WITH MONTGOMERY GI BILL
BENEFITS.—(1) A National Call to Service participant
who elects an incentive under paragraph (3) or (4) of sub-
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section (d) is not entitled to educational assistance under
chapter 1606 of title 10 or basic educational assistance
under subchapter II of chapter 30 of title 38.
‘‘(2)(A) The Secretary of Defense shall, to the max-
imum extent practicable, administer the receipt by Na-
tional Call to Service participants of incentives under
paragraph (3) or (4) of subsection (d) as if such National
Call to Service participants were, in receiving such incen-
tives, receiving educational assistance for members of the
Selected Reserve under chapter 1606 of title 10.
‘‘(B) The Secretary of Defense shall, in consultation
with the Secretary of Veterans Affairs, prescribe regulations
for purposes of subparagraph (A). Such regulations shall,
to the maximum extent practicable, take into account the
administrative provisions of chapters 30 and 36 of title 38
that are specified in section 16136 of title 10.
‘‘(3) Except as provided in paragraph (1), nothing in
this section shall prohibit a National Call to Service partic-
ipant who satisfies through service under subsection (b) the
eligibility requirements for educational assistance under
chapter 1606 of title 10 or basic educational assistance
under chapter 30 of title 38 from an entitlement to such
educational assistance under chapter 1606 of title 10 or
basic educational assistance under chapter 30 of title 38,
as the case may be.
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‘‘(h) REPAYMENT.—(1) If a National Call to Service
participant who has entered into an agreement under sub-
section (b) and received or benefited from an incentive
under subsection (d)(1) or (d)(2) fails to complete the total
period of service specified in such agreement, the National
Call to Service participant shall refund to the United States
the amount that bears the same ratio to the amount of the
incentive as the uncompleted part of such service bears to
the total period of such service.
‘‘(2) Subject to paragraph (3), an obligation to reim-
burse the United States imposed under paragraph (1) is
for all purposes a debt owed to the United States.
‘‘(3) The Secretary concerned may waive, in whole or
in part, a reimbursement required under paragraph (1) if
the Secretary concerned determines that recovery would be
against equity and good conscience or would be contrary
to the best interests of the United States.
‘‘(4) A discharge in bankruptcy under title 11 that is
entered into less than 5 years after the termination of an
agreement entered into under subsection (b) does not dis-
charge the person signing the agreement from a debt arising
under the agreement or under paragraph (1).
‘‘(i) FUNDING.—Amounts for payment of incentives
under subsection (d), including payment of allowances for
educational assistance under that subsection, shall be de-
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rived from amounts available to the Secretary of the mili-
tary department concerned for payment of pay, allowances,
and other expenses of the members of the armed force con-
cerned.
‘‘(j) REGULATIONS.—The Secretary of Defense and the
Secretaries of the military departments shall prescribe regu-
lations for purposes of the program under this section.
‘‘(k) DEFINITIONS.—In this section:
‘‘(1) 
The 
term 
‘Americorps’ 
means 
the
Americorps program carried out under subtitle C of
title I of the National and Community Service Act of
1990 (42 U.S.C. 12571 et seq.).
‘‘(2) The term ‘qualifying student loan’ means a
loan, the proceeds of which were used to pay the cost
of attendance (as defined in section 472 of the Higher
Education Act of 1965 (20 U.S.C. 1087ll) at an insti-
tution of higher education (as defined in section 101
of the Higher Education Act of 1965 (20 U.S.C.
1001).
‘‘(3) The term ‘Secretary of a military depart-
ment’ includes the Secretary of Transportation, with
respect to matters concerning the Coast Guard when
it is not operating as a service in the Navy.’’.
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(2) The table of sections at the beginning of that chap-
ter is amended by inserting after the item relating to section
325 the following new item:
‘‘326. Enlistment incentives for pursuit of skills to facilitate national service.’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect on October 1, 2002. No indi-
vidual entering into an enlistment before that date may
participate in the program under section 326 of title 37,
United States Code, as added by that subsection.
SEC. 542. MILITARY RECRUITER ACCESS TO INSTITUTIONS
OF HIGHER EDUCATION.
(a) ACCESS
TO INSTITUTIONS
OF HIGHER EDU-
CATION.—Section 503 of title 10, United States Code, is
amended—
(1) by redesignating subsection (d) as subsection
(e); and
(2) by inserting after subsection (c) the following
new subsection (d):
‘‘(d) ACCESS
TO INSTITUTIONS
OF HIGHER EDU-
CATION.—(1) Each institution of higher education receiving
assistance under the Higher Education Act of 1965 (20
U.S.C. 1001 et seq.)—
‘‘(A) shall provide to military recruiters the
same access to students at the institution as is pro-
vided generally to prospective employers of those stu-
dents; and
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‘‘(B) shall, upon a request made by military re-
cruiters for military recruiting purposes, provide ac-
cess to the names, addresses, and telephone listings of
students at the institution, notwithstanding section
444(a)(5)(B) of the General Education Provisions Act
(20 U.S.C. 1232g(a)(5)(B)).
‘‘(2) An institution of higher education may not re-
lease a student’s name, address, and telephone listing under
paragraph (1)(B) without the prior written consent of the
student or the parent of the student (in the case of a student
under the age of 18) if the student, or a parent of the stu-
dent, as appropriate, has submitted a request to the institu-
tion of higher education that the student’s information not
be released for a purpose covered by that subparagraph
without prior written consent. Each institution of higher
education shall notify students and parents of the rights
provided under the preceding sentence.
‘‘(3) In this subsection, the term ‘institution of higher
education’ has the meaning given the term in section 101
of the Higher Education Act of 1965 (20 U.S.C. 1001).’’.
(b) NOTIFICATION.—The Secretary of Education shall
provide to institutions of higher education notice of the pro-
visions of subsection (d) of section 503 of title 10, United
States Code, as amended by subsection (a) of this section.
Such notice shall be provided not later than 120 days after
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the date of the enactment of this Act, and shall be provided
in consultation with the Secretary of Defense.
Subtitle F—Other Matters
SEC. 551. BIENNIAL SURVEYS ON RACIAL, ETHNIC, AND
GENDER ISSUES.
(a) DIVISION OF ANNUAL SURVEY INTO TWO BIENNIAL
SURVEYS.—Section 481 of title 10, United States Code, is
amended to read as follows:
‘‘§ 481. Racial, ethnic, and gender issues: biennial
surveys
‘‘(a) IN GENERAL.—The Secretary of Defense shall
carry out two separate biennial surveys in accordance with
this section to identify and assess racial, ethnic, and gender
issues and discrimination among members of the armed
forces serving on active duty and the extent (if any) of ac-
tivity among such members that may be seen as so-called
‘hate group’ activity.
‘‘(b) BIENNIAL SURVEY
ON RACIAL
AND ETHNIC
ISSUES.—One of the surveys conducted every two years
under this section shall solicit information on racial and
ethnic issues and the climate in the armed forces for form-
ing professional relationships among members of the armed
forces of the various racial and ethnic groups. The informa-
tion solicited shall include the following:
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‘‘(1) Indicators of positive and negative trends
for professional and personal relationships among
members of all racial and ethnic groups.
‘‘(2) The effectiveness of Department of Defense
policies designed to improve relationships among all
racial and ethnic groups.
‘‘(3) The effectiveness of current processes for
complaints on and investigations into racial and eth-
nic discrimination.
‘‘(c) BIENNIAL SURVEY ON GENDER ISSUES.—One of
the surveys conducted every two years under this section
shall solicit information on gender issues, including issues
relating to gender-based harassment and discrimination,
and the climate in the armed forces for forming professional
relationships between male and female members of the
armed forces. The information solicited shall include the fol-
lowing:
‘‘(1) Indicators of positive and negative trends
for professional and personal relationships between
male and female members of the armed forces.
‘‘(2) The effectiveness of Department of Defense
policies designed to improve professional relationships
between male and female members of the armed forces.
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‘‘(3) The effectiveness of current processes for
complaints on and investigations into gender-based
discrimination.
‘‘(d) SURVEYS TO ALTERNATE EVERY YEAR.—The bi-
ennial survey under subsection (b) shall be conducted in
odd-numbered years. The biennial survey under subsection
(c) shall be conducted in even-numbered years.
‘‘(e) IMPLEMENTING ENTITY.—The Secretary shall
carry out the biennial surveys through entities in the De-
partment of Defense as follows:
‘‘(1) The biennial review under subsection (b),
through the Armed Forces Survey on Racial and Eth-
nic Issues.
‘‘(2) The biennial review under subsection (c),
through the Armed Forces Survey on Gender Issues.
‘‘(f) REPORTS TO CONGRESS.—Upon the completion of
a biennial survey under this section, the Secretary shall
submit to Congress a report containing the results of the
survey.
‘‘(g) INAPPLICABILITY
TO COAST GUARD.—The re-
quirements for surveys under this section do not apply to
the Coast Guard.’’.
(b) CLERICAL AMENDMENT.—The item relating to
such section in the table of sections at the beginning of chap-
ter 23 of such title is amended to read as follows:
‘‘481. Racial, ethnic, and gender issues: biennial surveys.’’.
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SEC. 552. LEAVE REQUIRED TO BE TAKEN PENDING REVIEW
OF A RECOMMENDATION FOR REMOVAL BY A
BOARD OF INQUIRY.
(a) REQUIREMENT.—Section 1182(c) of title 10,
United States Code, is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and
(2) by adding at the end the following new para-
graph:
‘‘(2) Under regulations prescribed by the Secretary
concerned, an officer referred to in paragraph (1) may be
required to take leave pending the completion of the action
under this chapter in the case of that officer. The officer
may be required to begin such leave at any time following
the officer’s receipt of the report of the board of inquiry,
including the board’s recommendation for removal from ac-
tive duty, and the expiration of any period allowed for sub-
mission by the officer of a rebuttal to that report. The leave
may be continued until the date on which action by the
Secretary concerned under this chapter is completed in the
case of the officer or may be terminated at any earlier
time.’’.
(b) PAYMENT FOR MANDATORY EXCESS LEAVE UPON
DISAPPROVAL
OF
CERTAIN
INVOLUNTARY
SEPARATION
RECOMMENDATIONS.—Chapter 40 of such title is amended
by inserting after section 707 the following new section:
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‘‘§ 707a. Payment upon disapproval of certain board
of inquiry recommendations for excess
leave required to be taken
‘‘(a) An officer—
‘‘(1) who is required to take leave under section
1182(c)(2) of this title, any period of which is charged
as excess leave under section 706(a) of this title, and
‘‘(2) whose recommendation for removal from ac-
tive duty in a report of a board of inquiry is not ap-
proved by the Secretary concerned under section 1184
of this title,
shall be paid, as provided in subsection (b), for the period
of leave charged as excess leave.
‘‘(b)(1) An officer entitled to be paid under this section
shall be deemed, for purposes of this section, to have accrued
pay and allowances for each day of leave required to be
taken under section 1182(c)(2) of this title that is charged
as excess leave (except any day of accrued leave for which
the officer has been paid under section 706(b)(1) of this title
and which has been charged as excess leave).
‘‘(2) The officer shall be paid the amount of pay and
allowances that is deemed to have accrued to the officer
under paragraph (1), reduced by the total amount of his
income from wages, salaries, tips, other personal service in-
come, unemployment compensation, and public assistance
benefits from any Government agency during the period the
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officer is deemed to have accrued pay and allowances. Ex-
cept as provided in paragraph (3), such payment shall be
made within 60 days after the date on which the Secretary
concerned decides not to remove the officer from active duty.
‘‘(3) If an officer is entitled to be paid under this sec-
tion, but fails to provide sufficient information in a timely
manner regarding the officer’s income when such informa-
tion is requested under regulations prescribed under sub-
section (c), the period of time prescribed in paragraph (2)
shall be extended until 30 days after the date on which the
member provides the information requested.
‘‘(c) This section shall be administered under uniform
regulations prescribed by the Secretaries concerned. The reg-
ulations may provide for the method of determining an offi-
cer’s income during any period the officer is deemed to have
accrued pay and allowances, including a requirement that
the officer provide income tax returns and other documenta-
tion to verify the amount of the officer’s income.’’.
(c) CONFORMING AMENDMENTS.—(1) Section 706 of
such title is amended by inserting ‘‘or 1182(c)(2)’’ after
‘‘section 876a’’ in subsections (a), (b), and (c).
(2) The heading for such section is amended to read
as follows:
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‘‘§ 706. Administration of required leave’’.
(d) CLERICAL AMENDMENTS.—The table of sections at
the beginning of chapter 40 of title 10, United States Code,
is amended—
(1) by striking the item relating to section 706
and inserting the following:
‘‘706. Administration of required leave.’’;
and
(2) by inserting after the item relating to section
707 the following new item:
‘‘707a. Payment upon disapproval of certain board of inquiry recommendations
for excess leave required to be taken.’’.
SEC. 553. STIPEND FOR PARTICIPATION IN FUNERAL HON-
ORS DETAILS.
Section 1491(d) of title 10, United States Code, is
amended—
(1) by striking paragraph (1) and inserting the
following:
‘‘(A) For a participant in the funeral honors de-
tail who is a member or former member of the armed
forces in a retired status or is not a member of the
armed forces (other than a former member in a re-
tired status) and not an employee of the United
States, either—
‘‘(i) transportation; or
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‘‘(ii) a daily stipend prescribed annually by
the Secretary of Defense at a single rate that is
designed to defray the costs for transportation
and other expenses incurred by the participant
in connection with participation in the funeral
honors detail.’’;
(2) by inserting ‘‘(1)’’ after ‘‘(d) SUPPORT.—’’;
(3) by redesignating paragraph (2) as subpara-
graph (B);
(4) in subparagraph (B), as so redesignated, by
inserting ‘‘members of the armed forces in a retired
status and’’ after ‘‘training for’’; and
(5) by adding at the end the following:
‘‘(2) A stipend paid under paragraph (1)(A) to a
member or former member of the armed forces in a retired
status shall be in addition to any other compensation to
which the retired member may be entitled.’’.
SEC. 554. WEAR OF ABAYAS BY FEMALE MEMBERS OF THE
ARMED FORCES IN SAUDI ARABIA.
(a) PROHIBITIONS RELATING TO WEAR OF ABAYAS.—
No member of the Armed Forces having authority over a
member of the Armed Forces and no officer or employee of
the United States having authority over a member of the
Armed Forces may—
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(1) require or encourage that member to wear the
abaya garment or any part of the abaya garment
while the member is in the Kingdom of Saudi Arabia
pursuant to a permanent change of station or orders
for temporary duty; or
(2) take any adverse action, whether formal or
informal, against the member for choosing not to
wear the abaya garment or any part of the abaya
garment while the member is in the Kingdom of
Saudi Arabia pursuant to a permanent change of sta-
tion or orders for temporary duty.
(b) INSTRUCTION.—(1) The Secretary of Defense shall
provide each female member of the Armed Forces ordered
to a permanent change of station or temporary duty in the
Kingdom of Saudi Arabia with instructions regarding the
prohibitions in subsection (a) immediately upon the arrival
of the member at a United States military installation
within the Kingdom of Saudi Arabia. The instructions shall
be presented orally and in writing. The written instruction
shall include the full text of this section.
(2) In carrying out paragraph (1), the Secretary shall
act through the Commander in Chief, United States Central
Command and Joint Task Force Southwest Asia, and the
commanders of the Army, Navy, Air Force, and Marine
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Corps components of the United States Central Command
and Joint Task Force Southwest Asia.
(c) PROHIBITION ON USE OF FUNDS FOR PROCURE-
MENT OF ABAYAS.—Funds appropriated or otherwise made
available to the Department of Defense may not be used
to procure abayas for regular or routine issuance to mem-
bers of the Armed Forces serving in the Kingdom of Saudi
Arabia or for any personnel of contractors accompanying
the Armed Forces in the Kingdom of Saudi Arabia in the
performance of contracts entered into with such contractors
by the United States.
TITLE VI—COMPENSATION AND
OTHER PERSONNEL BENEFITS
Subtitle A—Pay and Allowances
SEC. 601. INCREASE IN BASIC PAY FOR FISCAL YEAR 2003.
(a) WAIVER OF SECTION 1009 ADJUSTMENT.—The ad-
justment to become effective during fiscal year 2003 re-
quired by section 1009 of title 37, United States Code, in
the rates of monthly basic pay authorized members of the
uniformed services shall not be made.
(b) INCREASE IN BASIC PAY.—Effective on January
1, 2003, the rates of monthly basic pay for members of the
uniformed services within each pay grade are as follows:
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COMMISSIONED OFFICERS 1
Years of service computed under section 205 of title 37, United States Code
Pay
Grade
2 or less
Over 2
Over 3
Over 4
Over 6
O–10 2
$0.00
$0.00
$0.00
$0.00
$0.00
O–9 ....
0.00
0.00
0.00
0.00
0.00
O–8 ....
7,474.50
7,719.30
7,881.60
7,927.20
8,129.40
O–7 ....
6,210.90
6,499.20
6,633.00
6,739.20
6,930.90
O–6 ....
4,603.20
5,057.10
5,388.90
5,388.90
5,409.60
O–5 ....
3,837.60
4,323.00
4,622.40
4,678.50
4,864.80
O–4 ....
3,311.10
3,832.80
4,088.70
4,145.70
4,383.00
O–3 3
2,911.20
3,300.30
3,562.20
3,883.50
4,069.50
O–2 3
2,515.20
2,864.70
3,299.40
3,410.70
3,481.20
O–1 3
2,183.70
2,272.50
2,746.80
2,746.80
2,746.80
Over 8
Over 10
Over 12
Over 14
Over 16
O–10 2
$0.00
$0.00
$0.00
$0.00
$0.00
O–9 ....
0.00
0.00
0.00
0.00
0.00
O–8 ....
8,468.70
8,547.30
8,868.90
8,961.30
9,238.20
O–7 ....
7,120.80
7,340.40
7,559.40
7,779.00
8,468.70
O–6 ....
5,641.20
5,672.10
5,672.10
5,994.60
6,564.30
O–5 ....
4,977.00
5,222.70
5,403.00
5,635.50
5,991.90
O–4 ....
4,637.70
4,954.50
5,201.40
5,372.70
5,471.10
O–3 3
4,273.50
4,405.80
4,623.30
4,736.10
4,736.10
O–2 3
3,481.20
3,481.20
3,481.20
3,481.20
3,481.20
O–1 3
2,746.80
2,746.80
2,746.80
2,746.80
2,746.80
Over 18
Over 20
Over 22
Over 24
Over 26
O–10 2
$0.00
$12,077.70
$12,137.10
$12,389.40
$12,829.20
O–9 ....
0.00
10,563.60
10,715.70
10,935.60
11,319.60
O–8 ....
9,639.00
10,008.90
10,255.80
10,255.80
10,255.80
O–7 ....
9,051.30
9,051.30
9,051.30
9,051.30
9,096.90
O–6 ....
6,898.80
7,233.30
7,423.50
7,616.10
7,989.90
O–5 ....
6,161.70
6,329.10
6,519.60
6,519.60
6,519.60
O–4 ....
5,528.40
5,528.40
5,528.40
5,528.40
5,528.40
O–3 3
4,736.10
4,736.10
4,736.10
4,736.10
4,736.10
O–2 3
3,481.20
3,481.20
3,481.20
3,481.20
3,481.20
O–1 3
2,746.80
2,746.80
2,746.80
2,746.80
2,746.80
1 Notwithstanding the basic pay rates specified in this table, the actual rate of basic pay for com-
missioned officers in pay grades O–7 through O–10 may not exceed the rate of pay for level III of the
Executive Schedule and the actual rate of basic pay for all other officers may not exceed the rate of
pay for level V of the Executive Schedule.
2 Subject to the preceding footnote, while serving as Chairman or Vice Chairman of the Joint
Chiefs of Staff, Chief of Staff of the Army, Chief of Naval Operations, Chief of Staff of the Air Force,
Commandant of the Marine Corps, or Commandant of the Coast Guard, the rate of basic pay for this
grade is $14,155.50, regardless of cumulative years of service computed under section 205 of title 37,
United States Code.
3 This table does not apply to commissioned officers in pay grade O–1, O–2, or O–3 who have been
credited with over 4 years of active duty service as an enlisted member or warrant officer.
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HR 4546 EAS
COMMISSIONED OFFICERS WITH OVER 4 YEARS OF ACTIVE
DUTY SERVICE AS AN ENLISTED MEMBER OR WARRANT OF-
FICER
Years of service computed under section 205 of title 37, United States Code
Pay
Grade
2 or less
Over 2
Over 3
Over 4
Over 6
O–3E
$0.00
$0.00
$0.00
$3,883.50
$4,069.50
O–2E
0.00
0.00
0.00
3,410.70
3,481.20
O–1E
0.00
0.00
0.00
2,746.80
2,933.70
Over 8
Over 10
Over 12
Over 14
Over 16
O–3E
$4,273.50
$4,405.80
$4,623.30
$4,806.30
$4,911.00
O–2E
3,591.90
3,778.80
3,923.40
4,031.10
4,031.10
O–1E
3,042.00
3,152.70
3,261.60
3,410.70
3,410.70
Over 18
Over 20
Over 22
Over 24
Over 26
O–3E
$5,054.40
$5,054.40
$5,054.40
$5,054.40
$5,054.40
O–2E
4,031.10
4,031.10
4,031.10
4,031.10
4,031.10
O–1E
3,410.70
3,410.70
3,410.70
3,410.70
3,410.70
WARRANT OFFICERS 1
Years of service computed under section 205 of title 37, United States Code
Pay
Grade
2 or less
Over 2
Over 3
Over 4
Over 6
W–5 ...
$0.00
$0.00
$0.00
$0.00
$0.00
W–4 ...
3,008.10
3,236.10
3,329.10
3,420.60
3,578.10
W–3 ...
2,747.10
2,862.00
2,979.30
3,017.70
3,141.00
W–2 ...
2,416.50
2,554.50
2,675.10
2,763.00
2,838.30
W–1 ...
2,133.90
2,308.50
2,425.50
2,501.10
2,662.50
Over 8
Over 10
Over 12
Over 14
Over 16
W–5 ...
$0.00
$0.00
$0.00
$0.00
$0.00
W–4 ...
3,733.50
3,891.00
4,044.60
4,203.60
4,356.00
W–3 ...
3,281.70
3,467.40
3,580.50
3,771.90
3,915.60
W–2 ...
2,993.10
3,148.50
3,264.00
3,376.50
3,453.90
W–1 ...
2,782.20
2,888.40
3,006.90
3,085.20
3,203.40
Over 18
Over 20
Over 22
Over 24
Over 26
W–5 ...
$0.00
$5,169.30
$5,346.60
$5,524.50
$5,703.30
W–4 ...
4,512.00
4,664.40
4,822.50
4,978.20
5,137.50
W–3 ...
4,058.40
4,201.50
4,266.30
4,407.00
4,548.00
W–2 ...
3,579.90
3,705.90
3,831.00
3,957.30
3,957.30
W–1 ...
3,320.70
3,409.50
3,409.50
3,409.50
3,409.50
1 Notwithstanding the basic pay rates specified in this table, the actual rate of basic pay for war-
rant officers may not exceed the rate of pay for level V of the Executive Schedule.
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ENLISTED MEMBERS 1
Years of service computed under section 205 of title 37, United States Code
Pay
Grade
2 or less
Over 2
Over 3
Over 4
Over 6
E–9 2
$0.00
$0.00
$0.00
$0.00
$0.00
E–8 ....
0.00
0.00
0.00
0.00
0.00
E–7 ....
2,068.50
2,257.80
2,343.90
2,428.20
2,516.40
E–6 ....
1,770.60
1,947.60
2,033.70
2,117.10
2,204.10
E–5 ....
1,625.40
1,733.70
1,817.40
1,903.50
2,037.00
E–4 ....
1,502.70
1,579.80
1,665.30
1,749.30
1,824.00
E–3 ....
1,356.90
1,442.10
1,528.80
1,528.80
1,528.80
E–2 ....
1,290.00
1,290.00
1,290.00
1,290.00
1,290.00
E–1 3
1,150.80
1,150.80
1,150.80
1,150.80
1,150.80
Over 8
Over 10
Over 12
Over 14
Over 16
E–9 2
$0.00
$3,564.30
$3,645.00
$3,747.00
$3,867.00
E–8 ....
2,975.40
3,061.20
3,141.30
3,237.60
3,342.00
E–7 ....
2,667.90
2,753.40
2,838.30
2,990.40
3,066.30
E–6 ....
2,400.90
2,477.40
2,562.30
2,636.70
2,663.10
E–5 ....
2,151.90
2,236.80
2,283.30
2,283.30
2,283.30
E–4 ....
1,824.00
1,824.00
1,824.00
1,824.00
1,824.00
E–3 ....
1,528.80
1,528.80
1,528.80
1,528.80
1,528.80
E–2 ....
1,290.00
1,290.00
1,290.00
1,290.00
1,290.00
E–1 3
1,150.80
1,150.80
1,150.80
1,150.80
1,150.80
Over 18
Over 20
Over 22
Over 24
Over 26
E–9 2
$3,987.30
$4,180.80
$4,344.30
$4,506.30
$4,757.40
E–8 ....
3,530.10
3,625.50
3,787.50
3,877.50
4,099.20
E–7 ....
3,138.60
3,182.70
3,331.50
3,427.80
3,671.40
E–6 ....
2,709.60
2,709.60
2,709.60
2,709.60
2,709.60
E–5 ....
2,283.30
2,283.30
2,283.30
2,283.30
2,283.30
E–4 ....
1,824.00
1,824.00
1,824.00
1,824.00
1,824.00
E–3 ....
1,528.80
1,528.80
1,528.80
1,528.80
1,528.80
E–2 ....
1,290.00
1,290.00
1,290.00
1,290.00
1,290.00
E–1 3
1,150.80
1,150.80
1,150.80
1,150.80
1,150.80
1 Notwithstanding the basic pay rates specified in this table, the actual rate of basic pay for en-
listed members may not exceed the rate of pay for level V of the Executive Schedule.
2 Subject to the preceding footnote, while serving as Sergeant Major of the Army, Master Chief
Petty Officer of the Navy, Chief Master Sergeant of the Air Force, Sergeant Major of the Marine
Corps, or Master Chief Petty Officer of the Coast Guard, the rate of basic pay for this grade is
$5,732.70, regardless of cumulative years of service computed under section 205 of title 37, United
States Code.
3 In the case of members in pay grade E–1 who have served less than 4 months on active duty, the
rate of basic pay is $1,064.70.
SEC. 602. RATE OF BASIC ALLOWANCE FOR SUBSISTENCE
FOR ENLISTED PERSONNEL OCCUPYING SIN-
GLE GOVERNMENT QUARTERS WITHOUT ADE-
QUATE AVAILABILITY OF MEALS.
(a) AUTHORITY TO PAY INCREASED RATE.—Section
402(d) of title 37, United States Code, is amended to read
as follows:
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‘‘(d) SPECIAL RATE FOR ENLISTED MEMBERS OCCU-
PYING SINGLE QUARTERS WITHOUT ADEQUATE AVAIL-
ABILITY OF MEALS.—The Secretary of Defense, and the Sec-
retary of Transportation with respect to the Coast Guard
when it is not operating as a service in the Navy, may
pay an enlisted member the basic allowance for subsistence
under this section at a monthly rate that is twice the
amount in effect under subsection (b)(2) while—
‘‘(1) the member is assigned to single Govern-
ment quarters which have no adequate food storage or
preparation facility in the quarters; and
‘‘(2) there is no Government messing facility
serving those quarters that is capable of making meals
available to the occupants of the quarters.’’.
(b) EFFECTIVE DATE.—Subsection (a) and the amend-
ment made by such subsection shall take effect on October
1, 2002.
SEC. 603. BASIC ALLOWANCE FOR HOUSING IN CASES OF
LOW-COST OR NO-COST MOVES.
Section 403 of title 37, United States Code, is
amended—
(1) by transferring paragraph (7) of subsection
(b) to the end of the section; and
(2) in such paragraph—
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(A) by striking ‘‘(7)’’ and all that follows
through ‘‘circumstances of which make it nec-
essary that the member be’’ and inserting ‘‘(o)
TREATMENT OF LOW-COST AND NO-COST MOVES
AS NOT BEING REASSIGNMENTS.—In the case of
a member who is assigned to duty at a location
or under circumstances that make it necessary
for the member to be’’; and
(B) by inserting ‘‘for the purposes of this
section’’ after ‘‘may be treated’’.
SEC. 604. TEMPORARY AUTHORITY FOR HIGHER RATES OF
PARTIAL BASIC ALLOWANCE FOR HOUSING
FOR CERTAIN MEMBERS ASSIGNED TO HOUS-
ING UNDER ALTERNATIVE AUTHORITY FOR
ACQUISITION AND IMPROVEMENT OF MILI-
TARY HOUSING.
(a) AUTHORITY.—The Secretary of Defense may pre-
scribe and, under section 403(n) of title 37, United States
Code, pay for members of the Armed Forces (without de-
pendents) in privatized housing higher rates of partial basic
allowance for housing than those that are authorized under
paragraph (2) of such section 403(n).
(b) MEMBERS IN PRIVATIZED HOUSING.—For the pur-
poses of this section, a member of the Armed Forces (without
dependents) is a member of the Armed Forces (without de-
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pendents) in privatized housing while the member is as-
signed to housing that is acquired or constructed under the
authority of subchapter IV of chapter 169 of title 10, United
States Code.
(c) TREATMENT OF HOUSING AS GOVERNMENT QUAR-
TERS.—For purposes of section 403 of title 37, United
States Code, a member of the Armed Forces (without de-
pendents) in privatized housing shall be treated as residing
in quarters of the United States or a housing facility under
the jurisdiction of the Secretary of a military department
while a higher rate of partial allowance for housing is paid
for the member under this section.
(d) PAYMENT TO PRIVATE SOURCE.—The partial basic
allowance for housing paid for a member at a higher rate
under this section may be paid directly to the private sector
source of the housing to whom the member is obligated to
pay rent or other charge for residing in such housing if
the private sector source credits the amount so paid against
the amount owed by the member for the rent or other charge.
(e) TERMINATION OF AUTHORITY.—Rates prescribed
under subsection (a) may not be paid under the authority
of this section in connection with contracts that are entered
into after December 31, 2007, for the construction or acqui-
sition of housing under the authority of subchapter IV of
chapter 169 of title 10, United States Code.
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Subtitle B—Bonuses and Special
and Incentive Pays
SEC. 611. ONE-YEAR EXTENSION OF CERTAIN BONUS AND
SPECIAL PAY AUTHORITIES FOR RESERVE
FORCES.
(a) SELECTED RESERVE REENLISTMENT BONUS.—
Section 308b(f ) of title 37, United States Code, is amended
by striking ‘‘December 31, 2002’’ and inserting ‘‘December
31, 2003’’.
(b) SELECTED RESERVE ENLISTMENT BONUS.—Sec-
tion 308c(e) of such title is amended by striking ‘‘December
31, 2002’’ and inserting ‘‘December 31, 2003’’.
(c) SPECIAL PAY FOR ENLISTED MEMBERS ASSIGNED
TO CERTAIN HIGH PRIORITY UNITS.—Section 308d(c) of
such title is amended by striking ‘‘December 31, 2002’’ and
inserting ‘‘December 31, 2003’’.
(d) SELECTED RESERVE AFFILIATION BONUS.—Sec-
tion 308e(e) of such title is amended by striking ‘‘December
31, 2002’’ and inserting ‘‘December 31, 2003’’.
(e) READY RESERVE ENLISTMENT
AND REENLIST-
MENT BONUS.—Section 308h(g) of such title is amended by
striking ‘‘December 31, 2002’’ and inserting ‘‘December 31,
2003’’.
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(f) PRIOR SERVICE ENLISTMENT BONUS.—Section
308i(f ) of such title is amended by striking ‘‘December 31,
2002’’ and inserting ‘‘December 31, 2003’’.
SEC. 612. ONE-YEAR EXTENSION OF CERTAIN BONUS AND
SPECIAL PAY AUTHORITIES FOR CERTAIN
HEALTH CARE PROFESSIONALS.
(a) NURSE OFFICER CANDIDATE ACCESSION PRO-
GRAM.—Section 2130a(a)(1) of title 10, United States Code,
is amended by striking ‘‘December 31, 2002’’ and inserting
‘‘December 31, 2003’’.
(b) REPAYMENT OF EDUCATION LOANS FOR CERTAIN
HEALTH PROFESSIONALS WHO SERVE IN THE SELECTED
RESERVE.—Section 16302(d) of such title is amended by
striking ‘‘January 1, 2003’’ and inserting ‘‘January 1,
2004’’.
(c) ACCESSION BONUS FOR REGISTERED NURSES.—
Section 302d(a)(1) of title 37, United States Code, is
amended by striking ‘‘December 31, 2002’’ and inserting
‘‘December 31, 2003’’.
(d) INCENTIVE SPECIAL PAY
FOR NURSE ANES-
THETISTS.—Section 302e(a)(1) of such title is amended by
striking ‘‘December 31, 2002’’ and inserting ‘‘December 31,
2003’’.
(e) SPECIAL PAY FOR SELECTED RESERVE HEALTH
PROFESSIONALS IN CRITICALLY SHORT WARTIME SPECIAL-
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TIES.—Section 302g(f ) of such title is amended by striking
‘‘December 31, 2002’’ and inserting ‘‘December 31, 2003’’.
(f) ACCESSION BONUS FOR DENTAL OFFICERS.—Sec-
tion 302h(a)(1) of such title is amended by striking ‘‘De-
cember 31, 2002’’ and inserting ‘‘December 31, 2003’’.
SEC. 613. ONE-YEAR EXTENSION OF SPECIAL PAY AND
BONUS AUTHORITIES FOR NUCLEAR OFFI-
CERS.
(a) SPECIAL PAY FOR NUCLEAR-QUALIFIED OFFICERS
EXTENDING PERIOD OF ACTIVE SERVICE.—Section 312(e)
of title 37, United States Code, is amended by striking ‘‘De-
cember 31, 2002’’ and inserting ‘‘December 31, 2003’’.
(b) NUCLEAR CAREER ACCESSION BONUS.—Section
312b(c) of such title is amended by striking ‘‘December 31,
2002’’ and inserting ‘‘December 31, 2003’’.
(c) NUCLEAR CAREER ANNUAL INCENTIVE BONUS.—
Section 312c(d) of such title is amended by striking ‘‘De-
cember 31, 2002’’ and inserting ‘‘December 31, 2003’’.
SEC. 614. ONE-YEAR EXTENSION OF OTHER BONUS AND
SPECIAL PAY AUTHORITIES.
(a) AVIATION OFFICER RETENTION BONUS.—Section
301b(a) of title 37, United States Code, is amended by strik-
ing ‘‘December 31, 2002’’ and inserting ‘‘December 31,
2003’’.
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(b) REENLISTMENT BONUS FOR ACTIVE MEMBERS.—
Section 308(g) of such title is amended by striking ‘‘Decem-
ber 31, 2002’’ and inserting ‘‘December 31, 2003’’.
(c) ENLISTMENT BONUS FOR ACTIVE MEMBERS.—Sec-
tion 309(e) of such title is amended by striking ‘‘December
31, 2002’’ and inserting ‘‘December 31, 2003’’.
(d) RETENTION BONUS FOR MEMBERS WITH CRITICAL
MILITARY SKILLS.—Section 323(i) of such title is amended
by striking ‘‘December 31, 2002’’ and inserting ‘‘December
31, 2003’’.
(e) ACCESSION BONUS FOR NEW OFFICERS IN CRIT-
ICAL SKILLS.—Section 324(g) of such title is amended by
striking ‘‘December 31, 2002’’ and inserting ‘‘December 31,
2003’’.
SEC. 615. INCREASED MAXIMUM AMOUNT PAYABLE AS
MULTIYEAR RETENTION BONUS FOR MED-
ICAL OFFICERS OF THE ARMED FORCES.
Section 301d(a)(2) of title 37, United States Code, is
amended by striking ‘‘$14,000’’ and inserting ‘‘$25,000’’.
SEC. 616. INCREASED MAXIMUM AMOUNT PAYABLE AS IN-
CENTIVE SPECIAL PAY FOR MEDICAL OFFI-
CERS OF THE ARMED FORCES.
Section 302(b)(1) of title 37, United States Code, is
amended—
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(1) by striking ‘‘fiscal year 1992, and’’ in the
second sentence and inserting ‘‘fiscal year 1992,’’; and
(2) by inserting before the period at the end of
such sentence the following: ‘‘and before fiscal year
2003, and $50,000 for any twelve-month period begin-
ning after fiscal year 2002’’.
SEC. 617. ASSIGNMENT INCENTIVE PAY.
(a) AUTHORITY.—(1) Chapter 5 of title 37, United
States Code, is amended by inserting after section 305a the
following new section:
‘‘§ 305b. Special pay: assignment incentive pay
‘‘(a) AUTHORITY.—The Secretary concerned, with the
concurrence of the Secretary of Defense, may pay monthly
incentive pay under this section to a member of a uni-
formed service for a period that the member performs serv-
ice, while entitled to basic pay, in an assignment that is
designated by the Secretary concerned.
‘‘(b) MAXIMUM RATE.—The maximum monthly rate of
incentive pay payable to a member under this section is
$1,500.
‘‘(c) RELATIONSHIP
TO OTHER PAY
AND ALLOW-
ANCES.—Incentive pay paid to a member under this section
is in addition to any other pay and allowances to which
the member is entitled.
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‘‘(d) STATUS NOT AFFECTED BY TEMPORARY DUTY OR
LEAVE.—The service of a member in an assignment referred
to in subsection (a) shall not be considered discontinued
during any period that the member is not performing serv-
ice in such assignment by reason of temporary duty per-
formed by the member pursuant to orders or absence of the
member for authorized leave.
‘‘(e) TERMINATION OF AUTHORITY.—No assignment
incentive pay may be paid under this section for months
beginning more than three years after the date of the enact-
ment of the National Defense Authorization Act for Fiscal
Year 2003.’’.
(2) The table of sections at the beginning of such chap-
ter is amended by inserting after the item relating to section
305a the following new item:
‘‘305b. Special pay: assignment incentive pay.’’.
(b) ANNUAL REPORT.—Not later than February 28 of
each of 2004 and 2005, the Secretary of Defense shall sub-
mit to the Committees on Armed Services of the Senate and
the House of Representatives a report on the administration
of the authority under section 305b of title 37, United
States Code, as added by subsection (a). The report shall
include an assessment of the utility of that authority.
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SEC. 618. INCREASED MAXIMUM AMOUNTS FOR PRIOR
SERVICE ENLISTMENT BONUS.
Section 308i(b)(1) of title 37, United States Code, is
amended—
(1) in subparagraph (A), by striking ‘‘$5,000’’
and inserting ‘‘$8,000’’;
(2) in subparagraph (B), by striking ‘‘$2,500’’
and inserting ‘‘$4,000’’; and
(3) in subparagraph (C), by striking ‘‘$2,000’’
and inserting ‘‘$3,500’’.
Subtitle C—Travel and
Transportation Allowances
SEC. 631. DEFERRAL OF TRAVEL IN CONNECTION WITH
LEAVE BETWEEN CONSECUTIVE OVERSEAS
TOURS.
(a) DATE TO WHICH TRAVEL MAY BE DEFERRED.—
Section 411b(a)(2) of title 37, United States Code, is
amended by striking ‘‘not more than one year’’ in the first
sentence and all that follows through ‘‘operation ends.’’ in
the second sentence and inserting the following: ‘‘the date
on which the member departs the duty station in termi-
nation of the consecutive tour of duty at that duty station
or reports to another duty station under the order involved,
as the case may be.’’.
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(b) EFFECTIVE DATE AND SAVINGS PROVISION.—(1)
The amendment made by subsection (a) shall take effect on
October 1, 2002.
(2) Section 411b(a) of title 37, United States Code, as
in effect on September 30, 2002, shall continue to apply
with respect to travel described in subsection (a)(2) of such
title (as in effect on such date) that commences before Octo-
ber 1, 2002.
SEC. 632. TRANSPORTATION OF MOTOR VEHICLES FOR
MEMBERS REPORTED MISSING.
(a) AUTHORITY TO SHIP TWO MOTOR VEHICLES.—
Subsection (a) of section 554 of title 37, United States Code,
is amended by striking ‘‘one privately owned motor vehicle’’
both places it appears and inserting ‘‘two privately owned
motor vehicles’’.
(b) PAYMENTS FOR LATE DELIVERY.—Subsection (i)
of such section is amended by adding at the end the fol-
lowing: ‘‘In a case in which two motor vehicles of a member
(or the dependent or dependents of a member) are trans-
ported at the expense of the United States, no reimburse-
ment is payable under this subsection unless both motor ve-
hicles do not arrive at the authorized destination of the ve-
hicles by the designated delivery date.’’.
(c) APPLICABILITY.—The amendments made by sub-
section (a) shall apply with respect to members whose eligi-
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bility for benefits under section 554 of title 37, United
States Code, commences on or after the date of the enact-
ment of this Act.
SEC. 633. DESTINATIONS AUTHORIZED FOR GOVERNMENT
PAID TRANSPORTATION OF ENLISTED PER-
SONNEL 
FOR 
REST 
AND 
RECUPERATION
UPON EXTENDING DUTY AT DESIGNATED
OVERSEAS LOCATIONS.
Section 705(b)(2) of title 10, United States Code, is
amended by inserting before the period at the end the fol-
lowing: ‘‘, or to an alternative destination at a cost not
to exceed the cost of the round-trip transportation from the
location of the extended tour of duty to such nearest port
and return’’.
SEC. 634. VEHICLE STORAGE IN LIEU OF TRANSPORTATION
TO CERTAIN AREAS OF THE UNITED STATES
OUTSIDE CONTINENTAL UNITED STATES.
Section 2634(b) of title 10, United States Code, is
amended:
(1) by redesignating paragraphs (2), (3), and (4)
as paragraphs (3), (4), and (5), respectively; and
(2) by inserting after paragraph (1) the fol-
lowing new paragraph (2):
‘‘(2) In lieu of transportation authorized by this sec-
tion, if a member is ordered to make a change of permanent
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station to Alaska, Hawaii, Puerto Rico, the Northern Mar-
iana Islands, Guam, or any territory or possession of the
United States and laws, regulations, or other restrictions
preclude transportation of a motor vehicle described in sub-
section (a) to the new station, the member may elect to have
the vehicle stored at the expense of the United States at a
location approved by the Secretary concerned.’’.
Subtitle D—Retirement and
Survivor Benefit Matters
SEC. 641. PAYMENT OF RETIRED PAY AND COMPENSATION
TO DISABLED MILITARY RETIREES.
(a) IN GENERAL.—Section 1414 of title 10, United
States Code, is amended to read as follows:
‘‘§ 1414. Members eligible for retired pay who have
service-connected disabilities: payment of
retired pay and veterans’ disability com-
pensation
‘‘(a) PAYMENT OF BOTH RETIRED PAY AND COM-
PENSATION.—Except as provided in subsection (b), a mem-
ber or former member of the uniformed services who is enti-
tled to retired pay (other than as specified in subsection
(c)) and who is also entitled to veterans’ disability com-
pensation is entitled to be paid both without regard to sec-
tions 5304 and 5305 of title 38.
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‘‘(b) SPECIAL RULE FOR CHAPTER 61 CAREER RETIR-
EES.—The retired pay of a member retired under chapter
61 of this title with 20 years or more of service otherwise
creditable under section 1405 of this title at the time of the
member’s retirement is subject to reduction under sections
5304 and 5305 of title 38, but only to the extent that the
amount of the member’s retired pay under chapter 61 of
this title exceeds the amount of retired pay to which the
member would have been entitled under any other provision
of law based upon the member’s service in the uniformed
services if the member had not been retired under chapter
61 of this title.
‘‘(c) EXCEPTION.—Subsection (a) does not apply to a
member retired under chapter 61 of this title with less than
20 years of service otherwise creditable under section 1405
of this title at the time of the member’s retirement.
‘‘(d) DEFINITIONS.—In this section:
‘‘(1) The term ‘retired pay’ includes retainer
pay, emergency officers’ retirement pay, and naval
pension.
‘‘(2) The term ‘veterans’ disability compensation’
has the meaning given the term ‘compensation’ in sec-
tion 101(13) of title 38.’’.
(b) REPEAL OF SPECIAL COMPENSATION PROGRAM.—
Section 1413 of such title is repealed.
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(c) CONFORMING AMENDMENT.—Section 641(d) of the
National Defense Authorization Act for Fiscal Year 2002
(Public Law 107–107; 115 Stat. 1150; 10 U.S.C. 1414 note)
is repealed.
(d) CLERICAL AMENDMENTS.—The table of sections at
the beginning of chapter 71 of title 10, United States Code,
is amended by striking the items relating to sections 1413
and 1414 and inserting the following new item:
‘‘1414. Members eligible for retired pay who have service-connected disabilities:
payment of retired pay and veterans’ disability compensation.’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall take effect on—
(1) the first day of the first month that begins
after the date of the enactment of this Act; or
(2) the first day of the fiscal year that begins in
the calendar year in which this Act is enacted, if later
than the date specified in paragraph (1).
(f) PROHIBITION
ON RETROACTIVE BENEFITS.—No
benefits may be paid to any person by reason of section
1414 of title 10, United States Code, as amended by sub-
section (a), for any period before the effective date specified
in subsection (e).
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SEC. 642. INCREASED RETIRED PAY FOR ENLISTED RE-
SERVES CREDITED WITH EXTRAORDINARY
HEROISM.
(a) AUTHORITY.—Section 12739 of title 10, United
States Code, is amended—
(1) by redesignating subsections (b) and (c) as
subsections (c) and (d), respectively;
(2) by inserting after subsection (a) the following
new subsection (b):
‘‘(b) If an enlisted member retired under section 12731
of this title has been credited by the Secretary concerned
with extraordinary heroism in the line of duty, the mem-
ber’s retired pay shall be increased by 10 percent of the
amount determined under subsection (a). The Secretary’s
determination as to extraordinary heroism is conclusive for
all purposes.’’; and
(3) in subsection (c), as redesignated by para-
graph (1), by striking ‘‘amount computed under sub-
section (a),’’ and inserting ‘‘total amount of the
monthly retired pay computed under subsections (a)
and (b)’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect on October 1, 2002, and shall
apply with respect to retired pay for months beginning on
or after that date.
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SEC. 643. EXPANDED SCOPE OF AUTHORITY TO WAIVE TIME
LIMITATIONS ON CLAIMS FOR MILITARY PER-
SONNEL BENEFITS.
(a) AUTHORITY.—Section 3702(e)(1) of title 31,
United States Code, is amended by striking ‘‘a claim for
pay, allowances, or payment for unused accrued leave under
title 37 or a claim for retired pay under title 10’’ and in-
serting ‘‘a claim referred to in subsection (a)(1)(A)’’.
(b) APPLICABILITY.—The amendment made by sub-
section (a) shall apply with respect to claims presented to
the Secretary of Defense under section 3702 of title 31,
United States Code, on or after the date of the enactment
of this Act.
Subtitle E—Other Matters
SEC. 651. ADDITIONAL AUTHORITY TO PROVIDE ASSIST-
ANCE FOR FAMILIES OF MEMBERS OF THE
ARMED FORCES.
(a) AUTHORITY.—(1) Subchapter I of chapter 88 of
title 10, United States Code, is amended by adding at the
end the following new section:
‘‘§ 1788. Additional family assistance
‘‘(a) AUTHORITY.—The Secretary of Defense may pro-
vide for the families of members of the armed forces serving
on active duty, in addition to any other assistance available
for such families, any assistance that the Secretary con-
siders appropriate to ensure that the children of such mem-
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bers obtain needed child care, education, and other youth
services.
‘‘(b) PRIMARY PURPOSE OF ASSISTANCE.—The assist-
ance authorized by this section should be directed primarily
toward providing needed family support, including child
care, education, and other youth services, for children of
members of the Armed Forces who are deployed, assigned
to duty, or ordered to active duty in connection with a con-
tingency operation.’’.
(2) The table of sections at the beginning of such sub-
chapter is amended by adding at the end the following new
item:
‘‘1788. Additional family assistance.’’.
(b) EFFECTIVE DATE.—Section 1788 of title 10,
United States Code, as added by subsection (a), shall take
effect on October 1, 2002.
SEC. 652. TIME LIMITATION FOR USE OF MONTGOMERY GI
BILL ENTITLEMENT BY MEMBERS OF THE SE-
LECTED RESERVE.
(a) EXTENSION
OF LIMITATION PERIOD.—Section
16133(a)(1) of title 10, United States Code, is amended by
striking ‘‘10-year’’ and inserting ‘‘14-year’’.
(b) EFFECTIVE
DATE
AND
APPLICABILITY.—The
amendment made by subsection (a) shall take effect on Octo-
ber 1, 2002, and shall apply with respect to periods of enti-
tlement to educational assistance under chapter 1606 of title
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10, United States Code, that begin on or after October 1,
1992.
SEC. 653. STATUS OF OBLIGATION TO REFUND EDU-
CATIONAL ASSISTANCE UPON FAILURE TO
PARTICIPATE SATISFACTORILY IN SELECTED
RESERVE.
Section 16135 of title 10, United States Code, is
amended by adding at the end the following new subsection:
‘‘(c)(1) An obligation to pay a refund to the United
States under subsection (a)(1)(B) in an amount determined
under subsection (b) is, for all purposes, a debt owed to the
United States.
‘‘(2) A discharge in bankruptcy under title 11 that is
entered for a person less than five years after the termi-
nation of the person’s enlistment or other service described
in subsection (a) does not discharge the person from a debt
arising under this section with respect to that enlistment
or other service.’’.
SEC. 654. PROHIBITION ON ACCEPTANCE OF HONORARIA
BY PERSONNEL AT CERTAIN DEPARTMENT OF
DEFENSE SCHOOLS.
(a) REPEAL OF EXEMPTION.—Section 542 of the Na-
tional Defense Authorization Act for Fiscal Year 1993 (Pub-
lic Law 102–484; 106 Stat. 2413; 10 U.S.C. prec. 2161
note) is repealed.
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(b) EFFECTIVE
DATE
AND
APPLICABILITY.—The
amendment made by subsection (a) shall take effect on Octo-
ber 1, 2002, and shall apply with respect to appearances
made, speeches presented, and articles published on or after
that date.
SEC. 655. RATE OF EDUCATIONAL ASSISTANCE UNDER
MONTGOMERY 
GI 
BILL 
OF 
DEPENDENTS
TRANSFERRED ENTITLEMENT BY MEMBERS
OF THE ARMED FORCES WITH CRITICAL
SKILLS.
(a) CLARIFICATION.—Section 3020(h) of title 38,
United States Code, is amended—
(1) in paragraph (2)—
(A) by striking ‘‘paragraphs (4) and (5)’’
and inserting ‘‘paragraphs (5) and (6)’’; and
(B) by striking ‘‘and at the same rate’’;
(2) by redesignating paragraphs (3) through (6)
as paragraphs (4) through (7), respectively; and
(3) by inserting after paragraph (2) the fol-
lowing new paragraph (3):
‘‘(3)(A) Subject to subparagraph (B), the monthly rate
of educational assistance payable to a dependent to whom
entitlement is transferred under this section shall be the
monthly amount payable under sections 3015 and 3022 of
this title to the individual making the transfer.
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‘‘(B) The monthly rate of assistance payable to a de-
pendent under subparagraph (A) shall be subject to the pro-
visions of section 3032 of this title, except that the provi-
sions of subsection (a)(1) of that section shall not apply even
if the individual making the transfer to the dependent
under this section is on active duty during all or any part
of enrollment period of the dependent in which such entitle-
ment is used.’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect as if included in the enactment
of the National Defense Authorization Act for Fiscal Year
2002 (Public Law 107–107), to which such amendments re-
late.
SEC. 656. PAYMENT OF INTEREST ON STUDENT LOANS.
(a) AUTHORITY.—(1) Chapter 109 of title 10, United
States Code, is amended by adding at the end the following
new section:
‘‘§ 2174. Interest payment program: members on active
duty
‘‘(a) AUTHORITY.—(1) The Secretary concerned may
pay in accordance with this section the interest and any
special allowances that accrue on one or more student loans
of an eligible member of the armed forces.
‘‘(2) The Secretary of a military department may exer-
cise the authority under paragraph (1) only if approved
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by the Secretary of Defense and subject to such require-
ments, conditions, and restrictions as the Secretary of De-
fense may prescribe.
‘‘(b) ELIGIBLE PERSONNEL.—A member of the armed
forces is eligible for the benefit under subsection (a) while
the member—
‘‘(1) is serving on active duty in fulfillment of
the member’s first enlistment in the armed forces or,
in the case of an officer, is serving on active duty and
has not completed more than three years of service on
active duty;
‘‘(2) is the debtor on one or more unpaid loans
described in subsection (c); and
‘‘(3) is not in default on any such loan.
‘‘(c) STUDENT LOANS.—The authority to make pay-
ments under subsection (a) may be exercised with respect
to the following loans:
‘‘(1) A loan made, insured, or guaranteed under
part B of title IV of the Higher Education Act of
1965 (20 U.S.C. 1071 et seq.).
‘‘(2) A loan made under part D of such title (20
U.S.C. 1087a et seq.).
‘‘(3) A loan made under part E of such title (20
U.S.C. 1087aa et seq.).
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‘‘(d) MAXIMUM BENEFIT.—The months for which in-
terest and any special allowance may be paid on behalf of
a member of the armed forces under this section are any
36 consecutive months during which the member is eligible
under subsection (b).
‘‘(e) FUNDS FOR PAYMENTS.—Appropriations avail-
able for the pay and allowances of military personnel shall
be available for payments under this section.
‘‘(f) COORDINATION.—(1) The Secretary of Defense
and, with respect to the Coast Guard when it is not oper-
ating as a service in the Navy, the Secretary of Transpor-
tation shall consult with the Secretary of Education regard-
ing the administration of the authority under this section.
‘‘(2) The Secretary concerned shall transfer to the Sec-
retary of Education the funds necessary—
‘‘(A) to pay interest and special allowances on
student loans under this section (in accordance with
sections 428(o) and 464(j) of the Higher Education
Act of 1965 (20 U.S.C. 1078(o) and 1087dd(j)); and
‘‘(B) to reimburse the Secretary of Education for
any reasonable administrative costs incurred by the
Secretary in coordinating the program under this sec-
tion with the administration of the student loan pro-
grams under parts B, D, and E of title IV of the
Higher Education Act of 1965.
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‘‘(g) SPECIAL ALLOWANCE DEFINED.—In this section,
the term ‘special allowance’ means a special allowance that
is payable under section 438 of the Higher Education Act
of 1965 (20 U.S.C. 1087–1).’’.
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item:
‘‘2174. Interest payment program: members on active duty.’’.
(b) FEDERAL FAMILY EDUCATION LOANS AND DIRECT
LOANS.—(1) Subsection (c)(3) of section 428 of the Higher
Education Act of 1965 (20 U.S.C. 1078) is amended—
(A) in clause (i) of subparagraph (A)—
(i) by striking ‘‘or’’ at the end of subclause
(II);
(ii) by inserting ‘‘or’’ at the end of sub-
clause (III); and
(iii) by adding at the end the following new
subclause:
‘‘(IV) is eligible for interest pay-
ments to be made on such loan for
service in the Armed Forces under sec-
tion 2174 of title 10, United States
Code, and, pursuant to that eligibility,
the interest is being paid on such loan
under subsection (o);’’;
(B) in clause (ii)(II) of subparagraph (A), by
inserting ‘‘or (i)(IV)’’ after ‘‘clause (i)(II)’’; and
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(C) by striking subparagraph (C) and inserting
the following:
‘‘(C) shall contain provisions that specify
that—
‘‘(i) the form of forbearance granted by
the lender pursuant to this paragraph, other
than subparagraph (A)(i)(IV), shall be tem-
porary cessation of payments, unless the
borrower selects forbearance in the form of
an extension of time for making payments,
or smaller payments than were previously
scheduled; and
‘‘(ii) the form of forbearance granted
by the lender pursuant to subparagraph
(A)(i)(IV) shall be the temporary cessation
of all payments on the loan other than pay-
ments of interest on the loan, and payments
of any special allowance payable with re-
spect to the loan under section 438 of this
Act, that are made under subsection (o);
and’’.
(2) Section 428 of such Act is further amended by add-
ing at the end the following new subsection:
‘‘(o) ARMED FORCES STUDENT LOAN INTEREST PAY-
MENT PROGRAM.—
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‘‘(1) AUTHORITY.—Using funds received by
transfer to the Secretary under section 2174 of title
10, United States Code, for the payment of interest
and any special allowance on a loan to a member of
the Armed Forces that is made, insured, or guaran-
teed under this part, the Secretary shall pay the in-
terest and special allowance on such loan as due for
a period not in excess of 36 consecutive months. The
Secretary may not pay interest or any special allow-
ance on such a loan out of any funds other than
funds that have been so transferred.
‘‘(2) FORBEARANCE.—During the period in
which the Secretary is making payments on a loan
under paragraph (1), the lender shall grant the bor-
rower forbearance in accordance with the guaranty
agreement under subsection (c)(3)(A)(i)(IV).
‘‘(3) SPECIAL
ALLOWANCE
DEFINED.—For the
purposes of this subsection, the term ‘special allow-
ance’, means a special allowance that is payable with
respect to a loan under section 438 of this Act.’’.
(c) FEDERAL PERKINS LOANS.—Section 464 of the
Higher Education Act of 1965 (20 U.S.C. 1087dd) is
amended—
(1) in subsection (e)—
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(A) by striking ‘‘or’’ at the end of para-
graph (1);
(B) by striking the period at the end of
paragraph (2) and inserting ‘‘; or’’; and
(C) by adding at the end the following new
paragraph:
‘‘(3) the borrower is eligible for interest pay-
ments to be made on such loan for service in the
Armed Forces under section 2174 of title 10, United
States Code, and, pursuant to that eligibility, the in-
terest on such loan is being paid under subsection (j),
except that the form of a forbearance under this para-
graph shall be a temporary cessation of all payments
on the loan other than payments of interest on the
loan that are made under subsection (j).’’; and
(2) by adding at the end the following new sub-
section:
‘‘(j) ARMED FORCES STUDENT LOAN INTEREST PAY-
MENT PROGRAM.—
‘‘(1) AUTHORITY.—Using funds received by
transfer to the Secretary under section 2174 of title
10, United States Code, for the payment of interest on
a loan made under this part to a member of the
Armed Forces, the Secretary shall pay the interest on
the loan as due for a period not in excess of 36 con-
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secutive months. The Secretary may not pay interest
on such a loan out of any funds other than funds that
have been so transferred.
‘‘(2) FORBEARANCE.—During the period in
which the Secretary is making payments on a loan
under paragraph (1), the institution of higher edu-
cation shall grant the borrower forbearance in accord-
ance with subsection (e)(3).’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to interest, and any special
allowance under section 438 of the Higher Education Act
of 1965, that accrue for months beginning on or after Octo-
ber 1, 2003, on student loans described in subsection (c)
of section 2174 of title 10, United States Code (as added
by subsection (a)), that were made before, on, or after such
date to members of the Armed Forces who are on active
duty (as defined in section 101(d) of title 10, United States
Code) on or after that date.
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SEC. 657. MODIFICATION OF AMOUNT OF BACK PAY FOR
MEMBERS OF NAVY AND MARINE CORPS SE-
LECTED FOR PROMOTION WHILE INTERNED
AS PRISONERS OF WAR DURING WORLD WAR
II TO TAKE INTO ACCOUNT CHANGES IN CON-
SUMER PRICE INDEX.
(a) MODIFICATION.—Section 667(c) 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–170) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(3) The amount determined for a person under para-
graph (1) shall be increased to reflect increases in cost of
living since the basic pay referred to in paragraph (1)(B)
was paid to or for that person, calculated on the basis of
the Consumer Price Index (all items—United States city
average) published monthly by the Bureau of Labor Statis-
tics.’’.
(b) RECALCULATION OF PREVIOUS PAYMENTS.—In the
case of any payment of back pay made to or for a person
under section 667 of the Floyd D. Spence National Defense
Authorization Act for Fiscal Year 2001 before the date of
the enactment of this Act, the Secretary of the Navy shall—
(1) recalculate the amount of back pay to which
the person is entitled by reason of the amendment
made by subsection (a); and
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(2) if the amount of back pay, as so recalculated,
exceeds the amount of back pay so paid, pay the per-
son, or the surviving spouse of the person, an amount
equal to the excess.
TITLE VII—HEALTH CARE
SEC. 701. ELIGIBILITY OF SURVIVING DEPENDENTS FOR
TRICARE DENTAL PROGRAM BENEFITS AFTER
DISCONTINUANCE OF FORMER ENROLLMENT.
Section 1076a(k)(2) of title 10, United States Code, is
amended by striking ‘‘if the dependent is enrolled on the
date of the death of the members in a dental benefits plan
established under subsection (a)’’ and inserting ‘‘if, on the
date of the death of the member, the dependent is enrolled
in a dental benefits plan established under subsection (a)
or is not enrolled in such a plan by reason of a discontinu-
ance of a former enrollment under subsection (f)’’.
SEC. 702. ADVANCE AUTHORIZATION FOR INPATIENT MEN-
TAL HEALTH SERVICES.
Section 1079(i)(3) of title 10, United States Code, is
amended—
(1) by inserting ‘‘(A)’’ after ‘‘(3)’’;
(2) by striking ‘‘Except in the case of an emer-
gency,’’ and inserting ‘‘Except as provided in sub-
paragraphs (B) and (C),’’; and
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(3) by adding at the end the following new sub-
paragraph:
‘‘(B) Preadmission authorization for inpatient mental
health services is not required under subparagraph (A) in
the case of an emergency.
‘‘(C) Preadmission authorization for inpatient mental
health services is not required under subparagraph (A) in
a case in which any benefits are payable for such services
under part A of title XVIII of the Social Security Act (42
U.S.C. 1395c et seq.). The Secretary shall require, however,
advance authorization for the continued provision of the in-
patient mental health services after benefits cease to be pay-
able for such services under part A of such title in such
case.’’.
SEC. 703. CONTINUED TRICARE ELIGIBILITY OF DEPEND-
ENTS 
RESIDING 
AT 
REMOTE 
LOCATIONS
AFTER DEPARTURE OF SPONSORS FOR UNAC-
COMPANIED ASSIGNMENTS.
Section 1079(p) of title 10, United States Code, is
amended—
(1) in paragraph (1), by striking ‘‘dependents
referred to in subsection (a) of a member of the uni-
formed services referred to in section 1074(c)(3) of
this title who are residing with the member’’ and in-
serting ‘‘dependents described in paragraph (3)’’;
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(2) by redesignating paragraph (3) as para-
graph (4); and
(3) by inserting after paragraph (2), the fol-
lowing new paragraph (3):
‘‘(3) This subsection applies with respect to a depend-
ent referred to in subsection (a) who—
‘‘(A) is a dependent of a member of the uni-
formed services referred to in section 1074(c)(3) of
this title and is residing with the member; or
‘‘(B) is a dependent of a member who, after hav-
ing served in a duty assignment described in section
1074(c)(3) of this title, has relocated without the de-
pendent pursuant to orders for a permanent change
of duty station from a remote location described in
subparagraph (B)(ii) of such section where the mem-
ber and the dependent resided together while the mem-
ber served in such assignment, if the orders do not au-
thorize dependents to accompany the member to the
new duty station at the expense of the United States
and the dependent continues to reside at the same re-
mote location.’’.
SEC. 704. APPROVAL OF MEDICARE PROVIDERS AS TRICARE
PROVIDERS.
Section 1079 of title 10, United States Code, is amend-
ed by adding at the end the following new subsection:
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‘‘(q) A physician or other health care practitioner who
is eligible to receive reimbursement for services provided
under the Medicare Program under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.) shall be considered
approved to provide medical care under this section and
section 1086 of this title.’’.
SEC. 705. CLAIMS INFORMATION.
(a) CORRESPONDENCE TO MEDICARE CLAIMS INFOR-
MATION REQUIREMENTS.—Section 1095c of title 10, United
States Code, is amended by adding at the end the following
new subsection:
‘‘(d) CORRESPONDENCE TO MEDICARE CLAIMS INFOR-
MATION REQUIREMENTS.—The Secretary of Defense, in
consultation with the other administering Secretaries, shall
limit the requirements for information in support of claims
for payment for health care items and services provided
under the TRICARE program so that the information re-
quired under the program is substantially the same as the
information that would be required for claims for reim-
bursement for those items and services under title XVIII
of the Social Security Act (42 U.S.C. 1395 et seq.).’’.
(b) APPLICABILITY.—The Secretary of Defense, in con-
sultation with the other administering Secretaries referred
to in section 1072(3) of title 10, United States Code, shall
apply the limitations required under subsection (d) of sec-
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tion 1095c of such title (as added by subsection (a)) with
respect to contracts entered into under the TRICARE pro-
gram on or after October 1, 2002.
SEC. 706. DEPARTMENT OF DEFENSE MEDICARE-ELIGIBLE
RETIREE HEALTH CARE FUND.
(a) SOURCE OF FUNDS FOR MONTHLY ACCRUAL PAY-
MENTS INTO
THE FUND.—Section 1116(c) of title 10,
United States Code, is amended by striking ‘‘health care
programs’’ and inserting ‘‘pay of members’’.
(b) MANDATORY PARTICIPATION
OF OTHER UNI-
FORMED
SERVICES.—Section 1111(c) of such title is
amended—
(1) in the first sentence, by striking ‘‘may enter
into an agreement with any other administering Sec-
retary’’ and inserting ‘‘shall enter into an agreement
with each other administering Secretary’’; and
(2) in the second sentence, by striking ‘‘Any
such’’ and inserting ‘‘The’’.
SEC. 707. TECHNICAL CORRECTIONS RELATING TO TRANSI-
TIONAL HEALTH CARE FOR MEMBERS SEPA-
RATED FROM ACTIVE DUTY.
(a) CONTINUED APPLICABILITY TO DEPENDENTS.—
Subsection (a)(1) of section 736 of the National Defense Au-
thorization Act for Fiscal Year 2002 (Public Law 107–107;
115 Stat. 1172) is amended to read as follows:
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‘‘(1) in paragraph (1), by striking ‘paragraph
(2), a member’ and all that follows through ‘of the
member),’ and inserting ‘paragraph (3), a member of
the armed forces who is separated from active duty as
described in paragraph (2) (and the dependents of the
member)’;’’.
(b) CLARIFICATION REGARDING THE COAST GUARD.—
Subsection (b)(2) of such section is amended to read as fol-
lows:
‘‘(2) in subsection (e)—
‘‘(A) by striking the first sentence; and
‘‘(B) by striking ‘the Coast Guard’ in the
second sentence and inserting ‘the members of the
Coast Guard and their dependents’.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect as of December 28, 2001, and as
if included in the National Defense Authorization Act for
Fiscal Year 2002 as enacted.
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SEC. 708. EXTENSION OF TEMPORARY AUTHORITY FOR EN-
TERING INTO PERSONAL SERVICES CON-
TRACTS FOR THE PERFORMANCE OF HEALTH
CARE RESPONSIBILITIES FOR THE ARMED
FORCES AT LOCATIONS OTHER THAN MILI-
TARY MEDICAL TREATMENT FACILITIES.
Section 1091(a)(2) of title 10, United States Code, is
amended by striking ‘‘December 31, 2002’’ and inserting
‘‘December 31, 2003’’.
SEC. 709. RESTORATION OF PREVIOUS POLICY REGARDING
RESTRICTIONS ON USE OF DEPARTMENT OF
DEFENSE MEDICAL FACILITIES.
Section 1093 of title 10, United States Code, is
amended—
(1) by striking subsection (b); and
(2) in subsection (a), by striking ‘‘RESTRICTION
ON USE OF FUNDS.—’’.
SEC. 710. HEALTH CARE UNDER TRICARE FOR TRICARE
BENEFICIARIES RECEIVING MEDICAL CARE
AS VETERANS FROM THE DEPARTMENT OF
VETERANS AFFAIRS.
Section 1097 of title 10, United States Code, is amend-
ed by adding at the end the following new subsection:
‘‘(f) PERSONS RECEIVING MEDICAL CARE FROM THE
DEPARTMENT OF VETERANS AFFAIRS.—A covered bene-
ficiary who is enrolled in and seeks care under the
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TRICARE program may not be denied such care on the
ground that the covered beneficiary is receiving health care
from the Department of Veterans Affairs on an ongoing
basis if the Department of Veterans Affairs cannot provide
the covered beneficiary with the particular care sought by
the covered beneficiary within the maximum period pro-
vided in the access to care standards that are applicable
to that particular care under TRICARE program policy.’’.
TITLE VIII—ACQUISITION POL-
ICY, ACQUISITION MANAGE-
MENT, AND RELATED MAT-
TERS
Subtitle A—Major Defense
Acquisition Programs
SEC. 801. BUY-TO-BUDGET ACQUISITION OF END ITEMS.
(a) AUTHORITY.—(1) Chapter 131 of title 10, United
States Code, is amended by adding at the end the following
new section:
‘‘§ 2228. Buy-to-budget acquisition: end items
‘‘(a) AUTHORITY
TO
ACQUIRE
ADDITIONAL
END
ITEMS.—Using funds available to the Department of De-
fense for the acquisition of an end item, the head of agency
making the acquisition may acquire a higher quantity of
the end item than the quantity specified for the end item
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in a law providing for the funding of that acquisition if
that head of an agency makes each of the following findings:
‘‘(1) The agency has an established requirement
for the end item that is expected to remain substan-
tially unchanged throughout the period of the acquisi-
tion.
‘‘(2) It is possible to acquire the higher quantity
of the end item without additional funding because of
production efficiencies or other cost reductions.
‘‘(3) The amount of the funds used for the acqui-
sition of the higher quantity of the end item will not
exceed the amount provided under that law for the ac-
quisition of the end item.
‘‘(4) The amount so provided is sufficient to en-
sure that each unit of the end item acquired within
the higher quantity is fully funded as a complete end
item.
‘‘(b) REGULATIONS.—The Secretary of Defense shall
prescribe regulations for the administration of this section.
The regulations shall include, at a minimum, the following:
‘‘(1) The level of approval within the Depart-
ment of Defense that is required for a decision to ac-
quire a higher quantity of an end item under sub-
section (a).
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‘‘(2) Authority to exceed by up to 10 percent the
quantity of an end item approved in a justification
and approval of the use of procedures other than com-
petitive procedures for the acquisition of the end item
under section 2304 of this title, but only to the extent
necessary to acquire a quantity of the end item per-
mitted in the exercise of authority under subsection
(a).
‘‘(c) NOTIFICATION OF CONGRESS.—The head of an
agency is not required to notify Congress in advance re-
garding a decision under the authority of this section to
acquire a higher quantity of an end item than is specified
in a law described in subsection (a), but shall notify the
congressional defense committees of the decision not later
than 30 days after the date of the decision.
‘‘(d) WAIVER BY OTHER LAW.—A provision of law
may not be construed as prohibiting the acquisition of a
higher quantity of an end item under this section unless
that provision of law—
‘‘(1) specifically refers to this section; and
‘‘(2) specifically states that the acquisition of the
higher quantity of the end item is prohibited notwith-
standing the authority provided in this section.
‘‘(e) DEFINITIONS.—(1) For the purposes of this sec-
tion, a quantity of an end item shall be considered specified
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in a law if the quantity is specified either in a provision
of that law or in any related representation that is set forth
separately in a table, chart, or explanatory text included
in a joint explanatory statement or governing committee
report accompanying the law.
‘‘(2) In this section:
‘‘(A) The term ‘congressional defense com-
mittees’ means—
‘‘(i) the Committee on Armed Services
and the Committee on Appropriations of the
Senate; and
‘‘(ii) the Committee on Armed Services
and the Committee on Appropriations of the
House of Representatives.
‘‘(B) The term ‘head of an agency’ means
the Secretary of Defense, the Secretary of the
Army, the Secretary of the Navy, and the Sec-
retary of the Air Force.’’.
(2) The table of sections at the beginning of such chap-
ter is amended by adding at the end the following new item:
‘‘2228. Buy-to-budget acquisition: end items.’’.
(b) TIME FOR ISSUANCE OF FINAL REGULATIONS.—
The Secretary of Defense shall issue the final regulations
under section 2228(b) of title 10, United States Code (as
added by subsection (a)), not later than 120 days after the
date of the enactment of this Act.
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SEC. 802. REPORT TO CONGRESS ON INCREMENTAL ACQUI-
SITION OF MAJOR SYSTEMS.
(a) REPORT REQUIRED.—Not later than 120 days
after the date of the enactment of this Act, the Secretary
of Defense shall submit to the congressional defense commit-
tees a report on the approach that the Secretary plans to
take to applying the requirements of chapter 144 of title
10, United States Code, sections 139, 181, 2366, 2399, and
2400 of such title, Department of Defense Directive 5000.1,
Department of Defense Instruction 5000.2, and Chairman
of the Joint Chiefs of Staff Instruction 3170.01B, and other
provisions of law and regulations applicable to incremental
acquisition programs.
(b) CONTENT OF REPORT.—The report shall, at a min-
imum, address the following matters:
(1) The manner in which the Secretary plans to
establish and approve, for each increment of an incre-
mental acquisition program—
(A) operational requirements; and
(B) cost and schedule goals.
(2) The manner in which the Secretary plans,
for each increment of an incremental acquisition
program—
(A) to meet requirements for operational
testing and live fire testing;
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(B) to monitor cost and schedule perform-
ance; and
(C) to comply with laws requiring reports
to Congress on results testing and on cost and
schedule performance.
(3) The manner in which the Secretary plans to
ensure that each increment of an incremental acquisi-
tion program is designed—
(A) to achieve interoperability within and
among United States forces and United States
coalition partners; and
(B) to optimize total system performance
and minimize total ownership costs by giving
appropriate consideration to—
(i) logistics planning;
(ii) manpower, personnel, and train-
ing;
(iii) human, environmental, safety, oc-
cupational 
health, 
accessibility, 
surviv-
ability, operational continuity, and security
factors;
(iv) protection of critical program in-
formation; and
(v) spectrum management.
(c) DEFINITIONS.—In this section:
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(1) The term ‘‘incremental acquisition program’’
means an acquisition program that is to be conducted
in discrete phases or blocks, with each phase or block
consisting of the planned production and acquisition
of one or more units of a major system.
(2) The term ‘‘increment’’ refers to one of the dis-
crete phases or blocks of an incremental acquisition
program.
(3) The term ‘‘major system’’ has the meaning
given such term in section 2302(5) of title 10, United
States Code.
SEC. 803. PILOT PROGRAM FOR SPIRAL DEVELOPMENT OF
MAJOR SYSTEMS.
(a) AUTHORITY.—The Secretary of Defense is author-
ized to conduct a pilot program for the spiral development
of major systems and to designate research and development
programs of the military departments and Defense Agencies
to participate in the pilot program.
(b) DESIGNATION OF PARTICIPATING PROGRAMS.—(1)
A research and development program for a major system
of a military department or Defense Agency may be con-
ducted as a spiral development program only if the Sec-
retary of Defense approves a spiral development plan sub-
mitted by the Secretary of that military department or head
of that Defense Agency, as the case may be, and designates
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the program as a participant in the pilot program under
this section.
(2) The Secretary of Defense shall submit a copy of
each spiral development plan approved under this section
to the congressional defense committees.
(c) SPIRAL DEVELOPMENT PLANS.—A spiral develop-
ment plan for a participating program shall, at a min-
imum, include the following matters:
(1) A rationale for dividing the program into
separate spirals, together with a preliminary identi-
fication of the spirals to be included.
(2) A program strategy, including overall cost,
schedule, and performance goals for the total pro-
gram.
(3) Specific cost, schedule, and performance pa-
rameters, including measurable exit criteria, for the
first spiral to be conducted.
(4) A testing plan to ensure that performance
goals, parameters, and exit criteria are met.
(5) An appropriate limitation on the number of
prototype units that may be produced under the pro-
gram.
(6) Specific performance parameters, including
measurable exit criteria, that must be met before the
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program proceeds into production of units in excess
of the limitation on the number of prototype units.
(d) GUIDANCE.—Not later than 120 days after the date
of the enactment of this Act, the Secretary of Defense shall
issue guidance for the implementation of the spiral develop-
ment pilot program authorized by this section. The guid-
ance shall, at a minimum, include the following matters:
(1) A process for the development, review, and
approval of each spiral development plan submitted
by the Secretary of a military department or head of
a Defense Agency.
(2) A process for establishing and approving spe-
cific cost, schedule, and performance parameters, in-
cluding measurable exit criteria, for spirals to be con-
ducted after the first spiral.
(3) Appropriate planning, testing, reporting,
oversight, and other requirements to ensure that the
spiral development program—
(A) satisfies realistic and clearly-defined
performance standards, cost objectives, and
schedule parameters (including measurable exit
criteria for each spiral);
(B) achieve interoperability within and
among United States forces and United States
coalition partners; and
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(C) optimize total system performance and
minimize total ownership costs by giving appro-
priate consideration to—
(i) logistics planning;
(ii) manpower, personnel, and train-
ing;
(iii) human, environmental, safety, oc-
cupational 
health, 
accessibility, 
surviv-
ability, operational continuity, and security
factors;
(iv) protection of critical program in-
formation; and
(v) spectrum management.
(4) A process for independent validation of the
satisfaction of exit criteria and other relevant require-
ments.
(5) A process for operational testing of fieldable
prototypes to be conducted before or in conjunction
with the fielding of the prototypes.
(e) REPORTING REQUIREMENT.—The Secretary shall
submit to Congress at the end of each quarter of a fiscal
year a status report on each research and development pro-
gram that is a participant in the pilot program. The report
shall contain information on unit costs that is similar to
the information on unit costs under major defense acquisi-
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tion programs that is required to be provided to Congress
under chapter 144 of title 10, United States Code, except
that the information on unit costs shall address projected
prototype costs instead of production costs.
(f) APPLICABILITY OF EXISTING LAW.—Nothing in
this section shall be construed to exempt any program of
the Department of Defense from the application of any pro-
vision of chapter 144 of title 10, United States Code, section
139, 181, 2366, 2399, or 2400 of such title, or any require-
ment under Department of Defense Directive 5000.1, De-
partment of Defense Instruction 5000.2, or Chairman of the
Joint Chiefs of Staff Instruction 3170.01B in accordance
with the terms of such provision or requirement.
(g) TERMINATION OF PROGRAM PARTICIPATION.—The
conduct of a participating program as a spiral development
program under the pilot program shall terminate when the
decision is made for the participating program to proceed
into the production of units in excess of the number of pro-
totype units permitted under the limitation provided in
spiral development plan for the program pursuant to sub-
section (c)(5).
(h) TERMINATION OF PILOT PROGRAM.—(1) The au-
thority to conduct a pilot program under this section shall
terminate three years after the date of the enactment of this
Act.
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(2) The termination of the pilot program shall not ter-
minate the authority of the Secretary of a military depart-
ment or head of a Defense Agency to continue to conduct,
as a spiral development program, any research and develop-
ment program that was designated to participate in the
pilot program before the date on which the pilot program
terminates. In the continued conduct of such a research and
development program as a spiral development program on
and after such date, the spiral development plan approved
for the program, the guidance issued under subsection (d),
and subsections (e), (f), and (g) shall continue to apply.
(i) DEFINITIONS.—In this section:
(1) The term ‘‘spiral development program’’
means a research and development program that—
(A) is conducted in discrete phases or
blocks, each of which will result in the develop-
ment of fieldable prototypes; and
(B) will not proceed into acquisition until
specific 
performance 
parameters, 
including
measurable exit criteria, have been met.
(2) The term ‘‘spiral’’ means one of the discrete
phases or blocks of a spiral development program.
(3) The term ‘‘major system’’ has the meaning
given such term in section 2302(5) of title 10, United
States Code.
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(4) The term ‘‘participating program’’ means a
research and development program that is designated
to participate in the pilot program under subsection
(b).
SEC. 804. IMPROVEMENT OF SOFTWARE ACQUISITION
PROCESSES.
(a) ESTABLISHMENT OF PROGRAMS.—(1) The Sec-
retary of each military department shall establish a pro-
gram to improve the software acquisition processes of that
military department.
(2) The head of each Defense Agency that manages a
major defense acquisition program with a substantial soft-
ware component shall establish a program to improve the
software acquisition processes of that Defense Agency.
(3) The programs required by this subsection shall be
established not later than 120 days after the date of the
enactment of this Act.
(b) PROGRAM REQUIREMENTS.—A program to im-
prove software acquisition processes under this section shall,
at a minimum, include the following:
(1) A documented process for software acquisi-
tion planning, requirements development and man-
agement, project management and oversight, and risk
management.
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(2) Efforts to develop systems for performance
measurement and continual process improvement.
(3) A system for ensuring that each program of-
fice with substantial software responsibilities imple-
ments and adheres to established processes and re-
quirements.
(c) DEPARTMENT OF DEFENSE GUIDANCE.—The As-
sistant Secretary of Defense for Command, Control, Com-
munications, and Intelligence, in consultation with the
Under Secretary of Defense for Acquisition, Technology,
and Logistics, shall—
(1) prescribe uniformly applicable guidance for
the administration of all of the programs established
under subsection (a) and take such actions as are nec-
essary to ensure that the military departments and
Defense Agencies comply with the guidance; and
(2) assist the Secretaries of the military depart-
ments and the heads of the Defense Agencies to carry
out such programs effectively by identifying, and
serving as a clearinghouse for information regarding,
best practices in software acquisition processes in both
the public and private sectors.
(d) DEFINITIONS.—In this section:
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(1) The term ‘‘Defense Agency’’ has the meaning
given the term in section 101(a)(11) of title 10,
United States Code.
(2) The term ‘‘major defense acquisition pro-
gram’’ has the meaning given the term in section
2430 of title 10, United States Code.
SEC. 805. INDEPENDENT TECHNOLOGY READINESS ASSESS-
MENTS.
Section 804(b) of the National Defense Authorization
Act for Fiscal Year 2002 (Public Law 107–107; 115 Stat.
1180) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(1);
(2) by striking the period at the end of para-
graph (2) and inserting ‘‘; and’’; and
(3) by adding at the end the following new para-
graph:
‘‘(3) identify each case in which an authoritative
decision has been made within the Department of De-
fense not to conduct an independent technology readi-
ness assessment for a critical technology on a major
defense acquisition program and explain the reasons
for the decision.’’.
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SEC. 806. TIMING OF CERTIFICATION IN CONNECTION WITH
WAIVER OF SURVIVABILITY AND LETHALITY
TESTING REQUIREMENTS.
(a) CERTIFICATION
FOR EXPEDITED PROGRAMS.—
Paragraph (1) of subsection (c) of section 2366 of title 10,
United States Code, is amended to read as follows:
‘‘(1) The Secretary of Defense may waive the applica-
tion of the survivability and lethality tests of this section
to a covered system, munitions program, missile program,
or covered product improvement program if the Secretary
determines that live-fire testing of such system or program
would be unreasonably expensive and impractical and sub-
mits a certification of that determination to Congress—
‘‘(A) before Milestone B approval for the system
or program; or
‘‘(B) in the case of a system or program initi-
ated at—
‘‘(i) Milestone B, as soon as is practicable
after the Milestone B approval; or
‘‘(ii) Milestone C, as soon as is practicable
after the Milestone C approval.’’.
(b) DEFINITIONS.—Subsection (e) of such section is
amended by adding at the end the following new para-
graphs:
‘‘(8) The term ‘Milestone B approval’ means a
decision to enter into system development and dem-
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onstration pursuant to guidance prescribed by the
Secretary of Defense for the management of Depart-
ment of Defense acquisition programs.
‘‘(9) The term ‘Milestone C approval’ means a
decision to enter into production and deployment
pursuant to guidance prescribed by the Secretary of
Defense for the management of Department of Defense
acquisition programs.’’.
Subtitle B—Procurement Policy
Improvements
SEC. 811. PERFORMANCE GOALS FOR CONTRACTING FOR
SERVICES.
(a) INDIVIDUAL PURCHASES
OF SERVICES.—Sub-
section (a) of section 802 of the National Defense Authoriza-
tion Act for Fiscal Year 2002 (Public Law 107–107; 10
U.S.C. 2330 note) is amended by adding at the end the fol-
lowing new paragraphs:
‘‘(3) To support the attainment of the goals established
in paragraph (2), the Department of Defense shall have the
following goals:
‘‘(A) To increase, as a percentage of all of the in-
dividual purchases of services made by or for the De-
partment of Defense under multiple award contracts
for a fiscal year (calculated on the basis of dollar
value), the volume of the individual purchases of serv-
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ices that are made on a competitive basis and involve
the receipt of two or more offers from qualified con-
tractors to a percentage as follows:
‘‘(i) For fiscal year 2003, a percentage not
less than 50 percent.
‘‘(ii) For fiscal year 2004, a percentage not
less than 60 percent.
‘‘(iii) For fiscal year 2011, a percentage not
less than 80 percent.
‘‘(B) To increase, as a percentage of all of the in-
dividual purchases of services made by or for the De-
partment of Defense under multiple award contracts
for a fiscal year (calculated on the basis of dollar
value), the use of performance-based purchasing speci-
fying firm fixed prices for the specific tasks to be per-
formed to a percentage as follows:
‘‘(i) For fiscal year 2003, a percentage not
less than 30 percent.
‘‘(ii) For fiscal year 2004, a percentage not
less than 40 percent.
‘‘(iii) For fiscal year 2005, a percentage not
less than 50 percent.
‘‘(iv) For fiscal year 2011, a percentage not
less than 80 percent.’’.
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(b) EXTENSION AND REVISION OF REPORTING RE-
QUIREMENT.—Subsection (b) of such section is amended—
(1) by striking ‘‘March 1, 2006’’, and inserting
‘‘March 1, 2011’’; and
(2) by adding at the end the following new para-
graphs:
‘‘(6) Regarding the individual purchases of serv-
ices that were made by or for the Department of De-
fense under multiple award contracts in the fiscal
year preceding the fiscal year in which the report is
required to be submitted, information (determined
using the data collection system established under sec-
tion 2330a of title 10, United States Code) as follows:
‘‘(A) The percentage (calculated on the basis
of dollar value) of such purchases that are pur-
chases that were made on a competitive basis
and involved receipt of two or more offers from
qualified contractors.
‘‘(B) The percentage (calculated on the basis
of dollar value) of such purchases that are per-
formance-based purchases specifying firm fixed
prices for the specific tasks to be performed.’’.
(c) DEFINITIONS.—Such section is further amended by
adding at the end the following new subsection:
‘‘(c) DEFINITIONS.—In this section:
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‘‘(1) The term ‘individual purchase’ means a
task order, delivery order, or other purchase.
‘‘(2) 
The 
term 
‘multiple 
award 
contract’
means—
‘‘(A) a contract that is entered into by the
Administrator of General Services under the
multiple award schedule program referred to in
section 2302(2)(C) of title 10, United States
Code;
‘‘(B) a multiple award task order contract
that is entered into under the authority of sec-
tions 2304a through 2304d of title 10, United
States Code, or sections 303H through 303K of
the Federal Property and Administrative Serv-
ices Act of 1949 (41 U.S.C. 253h through 253k);
and
‘‘(C) any other indefinite delivery, indefi-
nite quantity contract that is entered into by the
head of a Federal agency with two or more
sources pursuant to the same solicitation.’’.
SEC. 812. GRANTS OF EXCEPTIONS TO COST OR PRICING
DATA CERTIFICATION REQUIREMENTS AND
WAIVERS OF COST ACCOUNTING STANDARDS.
(a) GUIDANCE FOR EXCEPTIONS IN EXCEPTIONAL CIR-
CUMSTANCES.—(1) Not later than 60 days after the date
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of the enactment of this Act, the Secretary of Defense shall
issue guidance on the circumstances under which it is ap-
propriate to grant—
(A) 
an 
exception 
pursuant 
to 
section
2306a(b)(1)(C) of title 10, United States Code, relat-
ing to submittal of certified contract cost and pricing
data; or
(B) a waiver pursuant to section 26(f)(5)(B) of
the Office of Federal Procurement Policy Act (41
U.S.C. 422(f)(5)(B)), relating to the applicability of
cost accounting standards to contracts and sub-
contracts.
(2) The guidance shall, at a minimum, include a limi-
tation that a grant of an exception or waiver referred to
in paragraph (1) is appropriate with respect to a contract
or subcontract, or (in the case of submittal of certified cost
and pricing data) a modification, only upon a determina-
tion that the property or services cannot be obtained under
the contract, subcontract, or modification, as the case may
be, without the grant of the exception or waiver.
(b) SEMIANNUAL REPORT.—(1) The Secretary of De-
fense shall transmit to the congressional defense committees
promptly after the end of each half of a fiscal year a report
on the exceptions to cost or pricing data certification re-
quirements and the waivers of applicability of cost account-
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ing standards that, in cases described in paragraph (2),
were granted during that half of the fiscal year.
(2) The report for a half of a fiscal year shall include
an explanation of—
(A) each decision by the head of a procuring ac-
tivity within the Department of Defense to exercise
the authority under subparagraph (B) or (C) of sub-
section (b)(1) of section 2306a of title 10, United
States Code, to grant an exception to the requirements
of such section in the case of a contract, subcontract,
or contract or subcontract modification that is ex-
pected to have a price of $15,000,000 or more; and
(B) each decision by the Secretary of Defense or
the head of an agency within the Department of De-
fense to exercise the authority under subsection
(f)(5)(B) of section 26 of the Office of Federal Pro-
curement Policy Act to waive the applicability of the
cost accounting standards under such section in the
case of a contract or subcontract that is expected to
have a value of $15,000,000 or more.
(c) ADVANCE NOTIFICATION OF CONGRESS.—(1) The
Secretary of Defense shall transmit to the congressional de-
fense committees an advance notification of—
(A) any decision by the head of a procuring ac-
tivity within the Department of Defense to exercise
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the authority under subsection (b)(1)(C) of section
2306a of title 10, United States Code, to grant an ex-
ception to the requirements of such section in the case
of a contract, subcontract, or contract or subcontract
modification that is expected to have a price of
$75,000,000 or more; or
(B) any decision by the Secretary of Defense or
the head of an agency within the Department of De-
fense to exercise the authority under subsection
(f)(5)(B) of section 26 of the Office of Federal Pro-
curement Policy Act to waive the applicability of the
cost accounting standards under such section to a
contract or subcontract that is expected to have a
value of $75,000,000 or more.
(2) The notification under paragraph (1) regarding a
decision to grant an exception or waiver shall be trans-
mitted not later than 10 days before the exception or waiver
is granted.
(d) CONTENTS OF REPORTS AND NOTIFICATIONS.—A
report pursuant to subsection (b) and a notification pursu-
ant to subsection (c) shall include, for each grant of an ex-
ception or waiver, the following matters:
(1) A discussion of the justification for the grant
of 
the 
exception 
or 
waiver, 
including 
at 
a
minimum—
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(A) in the case of an exception granted pur-
suant to section 2306a(b)(1)(B) of title 10,
United States Code, an explanation of the basis
for the determination that the products or serv-
ices to be purchased are commercial items; and
(B) in the case of an exception granted pur-
suant to section 2306a(b)(1)(C) of such title, or
a waiver granted pursuant to section 26(f)(5)(B)
of the Office of Federal Procurement Policy Act,
an explanation of the basis for the determination
that it would not have been possible to obtain the
products or services from the offeror without the
grant of the exception or waiver.
(2) A description of the specific steps taken or to
be taken within the Department of Defense to ensure
that the price of each contract, subcontract, or modi-
fication covered by the report or notification, as the
case may be, is fair and reasonable.
(e) EFFECTIVE DATE.—The requirements of this sec-
tion shall apply to each exception or waiver that is granted
under a provision of law referred to in subsection (a) on
or after the date on which the guidance required by that
subsection (a) is issued.
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SEC. 813. EXTENSION OF REQUIREMENT FOR ANNUAL RE-
PORT ON DEFENSE COMMERCIAL PRICING
MANAGEMENT IMPROVEMENT.
Section 803(c)(4) of the Strom Thurmond National
Defense Authorization Act for Fiscal Year 1999 (Public
Law 105–261; 112 Stat. 2082; 10 U.S.C. 2306a note) is
amended by striking ‘‘2000, 2001, and 2002,’’ and inserting
‘‘2000 through 2006,’’.
SEC. 814. INTERNAL CONTROLS ON THE USE OF PURCHASE
CARDS.
(a) REQUIREMENT FOR ENHANCED INTERNAL CON-
TROLS.—Not later than 120 days after the date of the enact-
ment of this Act, the Secretary of Defense shall take action
to ensure that appropriate internal controls for the use of
purchase cards issued by the Federal Government to De-
partment of Defense personnel are in place throughout the
Department of Defense. At a minimum, the internal con-
trols shall include the following:
(1) A requirement that the receipt and accept-
ance, and the documentation of the receipt and ac-
ceptance, of the property or services purchased on a
purchase card be verified by a Department of Defense
official who is independent of the purchaser.
(2) A requirement that the monthly purchase
card statements of purchases on a purchase card be
reviewed and certified for accuracy by an official of
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the Department of Defense who is independent of the
purchaser.
(3) Specific policies limiting the number of pur-
chase cards issued, with the objective of significantly
reducing the number of cardholders.
(4) Specific policies on credit limits authorized
for cardholders, with the objective of minimizing fi-
nancial risk to the Federal Government.
(5) Specific criteria for identifying employees el-
igible to be issued purchase cards, with the objective
of ensuring the integrity of cardholders.
(6) Accounting procedures that ensure that pur-
chase card transactions are properly recorded in De-
partment of Defense accounting records.
(7) Requirements for regular internal review of
purchase card statements to identify—
(A) potentially fraudulent, improper, and
abusive purchases;
(B) any patterns of improper cardholder
transactions, such as purchases of prohibited
items; and
(C) categories of purchases that should be
made through other mechanisms to better aggre-
gate purchases and negotiate lower prices.
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(b) TRAINING.—The Secretary of Defense shall ensure
that all Department of Defense purchase cardholders are
aware of the enhanced internal controls instituted pursuant
to subsection (a).
(c) COMPTROLLER GENERAL REVIEW.—Not later than
March 1, 2003, the Comptroller General shall—
(1) review the actions that have been taken with-
in the Department of Defense to comply with the re-
quirements of this section; and
(2) submit a report on the actions reviewed to
the congressional defense committees.
SEC. 815. ASSESSMENT REGARDING FEES PAID FOR ACQUI-
SITIONS 
UNDER 
OTHER 
AGENCIES’ 
CON-
TRACTS.
(a) REQUIREMENT FOR ASSESSMENT AND REPORT.—
Not later than March 1, 2003, the Secretary of Defense shall
carry out an assessment to determine the total amount paid
by the Department of Defense as fees for the acquisition of
property and services by the Department of Defense under
contracts between other departments and agencies of the
Federal Government and the sources of the property and
services in each of fiscal years 2000, 2001, and 2002, and
submit a report on the results of the assessment to Congress.
(b) CONTENT OF REPORT.—The report shall include
the Secretary’s views on what, if any, actions should be
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taken within the Department of Defense to reduce the total
amount of the annual expenditures on fees described in sub-
section (a) and to use the amounts saved for other author-
ized purposes.
SEC. 816. PILOT PROGRAM FOR TRANSITION TO FOLLOW-
ON CONTRACTS FOR CERTAIN PROTOTYPE
PROJECTS.
Section 845 of the National Defense Authorization Act
for Fiscal Year 1994 (10 U.S.C. 2371 note) is amended
by—
(1) redesignating subsections (e), (f), and (g) as
subsections (f), (g), and (h), respectively; and
(2) inserting after subsection (d) the following
new subsection (e):
‘‘(e) PILOT PROGRAM FOR TRANSITION TO FOLLOW-
ON CONTRACTS.—(1) The Secretary of Defense is authorized
to carry out a pilot program for follow-on contracting for
the production of items or processes that are developed by
nontraditional defense contractors under prototype projects
carried out under this section.
‘‘(2) Under the pilot program—
‘‘(A) a qualifying contract for the procurement of
such an item or process, or a qualifying subcontract
under a contract for the procurement of such an item
or process, may be treated as a contract or sub-
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contract, respectively, for the procurement of commer-
cial items, as defined in section 4(12) of the Office of
Federal Procurement Policy Act (41 U.S.C. 403(12));
and
‘‘(B) the item or process may be treated as an
item or process, respectively, that is developed in part
with Federal funds and in part at private expense for
the purposes of section 2320 of title 10, United States
Code.
‘‘(3) For the purposes of the pilot program, a quali-
fying contract or subcontract is a contract or subcontract,
respectively, with a nontraditional defense contractor
that—
‘‘(A) does not exceed $20,000,000; and
‘‘(B) is either—
‘‘(i) a firm, fixed-price contract or sub-
contract; or
‘‘(ii) a fixed-price contract or subcontract
with economic price adjustment.
‘‘(4) The authority to conduct a pilot program under
this subsection shall terminate on September 30, 2005. The
termination of the authority shall not affect the validity
of contracts or subcontracts that are awarded or modified
during the period of the pilot program, without regard to
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whether the contracts or subcontracts are performed during
the period.’’.
SEC. 817. WAIVER AUTHORITY FOR DOMESTIC SOURCE OR
CONTENT REQUIREMENTS.
(a) AUTHORITY.—Subchapter V of chapter 148 of title
10, United States Code, is amended by adding at the end
the following new section:
‘‘§ 2539c. Waiver of domestic source or content re-
quirements
‘‘(a) AUTHORITY.—Except as provided in subsection
(f), the Secretary of Defense may waive the application of
any domestic source requirement or domestic content re-
quirement referred to in subsection (b) and thereby author-
ize the procurement of items that are grown, reprocessed,
reused, produced, or manufactured—
‘‘(1) in a foreign country that has a reciprocal
defense procurement memorandum of understanding
or agreement with the United States;
‘‘(2) in a foreign country that has a reciprocal
defense procurement memorandum of understanding
or agreement with the United States substantially
from components and materials grown, reprocessed,
reused, produced, or manufactured in the United
States or any foreign country that has a reciprocal
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defense procurement memorandum of understanding
or agreement with the United States; or
‘‘(3) in the United States substantially from
components and materials grown, reprocessed, reused,
produced, or manufactured in the United States or
any foreign country that has a reciprocal defense pro-
curement memorandum of understanding or agree-
ment with the United States.
‘‘(b) COVERED REQUIREMENTS.—For purposes of this
section:
‘‘(1) A domestic source requirement is any re-
quirement under law that the Department of Defense
satisfy its requirements for an item by procuring an
item that is grown, reprocessed, reused, produced, or
manufactured in the United States or by a manufac-
turer that is a part of the national technology and in-
dustrial base (as defined in section 2500(1) of this
title).
‘‘(2) A domestic content requirement is any re-
quirement under law that the Department of Defense
satisfy its requirements for an item by procuring an
item produced or manufactured partly or wholly from
components and materials grown, reprocessed, reused,
produced, or manufactured in the United States.
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‘‘(c) APPLICABILITY.—The authority of the Secretary
to waive the application of a domestic source or content
requirements under subsection (a) applies to the procure-
ment of items for which the Secretary of Defense determines
that—
‘‘(1) application of the requirement would im-
pede the reciprocal procurement of defense items
under a memorandum of understanding providing for
reciprocal procurement of defense items between a for-
eign country and the United States in accordance
with section 2531 of this title; and
‘‘(2) such country does not discriminate against
defense items produced in the United States to a
greater degree than the United States discriminates
against defense items produced in that country.
‘‘(d) LIMITATION ON DELEGATION.—The authority of
the Secretary to waive the application of domestic source
or content requirements under subsection (a) may not be
delegated to any officer or employee other than the Under
Secretary of Defense for Acquisition, Technology and Logis-
tics.
‘‘(e) CONSULTATIONS.—The Secretary may grant a
waiver of the application of a domestic source or content
requirement under subsection (a) only after consultation
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with the United States Trade Representative, the Secretary
of Commerce, and the Secretary of State.
‘‘(f) LAWS NOT WAIVABLE.—The Secretary of Defense
may not exercise the authority under subsection (a) to
waive any domestic source or content requirement con-
tained in any of the following laws:
‘‘(1) The Small Business Act (15 U.S.C. 631 et
seq.).
‘‘(2) The Javits-Wagner-O’Day Act (41 U.S.C. et
seq.).
‘‘(3) Sections 7309 and 7310 of this title.
‘‘(4) Section 2533a of this title.
‘‘(g) RELATIONSHIP
TO OTHER WAIVER AUTHOR-
ITY.—The authority under subsection (a) to waive a domes-
tic source requirement or domestic content requirement is
in addition to any other authority to waive such require-
ment.
‘‘(h) CONSTRUCTION WITH RESPECT TO LATER EN-
ACTED LAWS.—This section may not be construed as being
inapplicable to a domestic source requirement or domestic
content requirement that is set forth in a law enacted after
the enactment of this section solely on the basis of the later
enactment.’’.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of such subchapter is amended by inserting
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after the item relating to section 2539b the following new
item:
‘‘2539c. Waiver of domestic source or content requirements.’’.
Subtitle C—Other Matters
SEC. 821. EXTENSION OF THE APPLICABILITY OF CERTAIN
PERSONNEL DEMONSTRATION PROJECT EX-
CEPTIONS TO AN ACQUISITION WORKFORCE
DEMONSTRATION PROJECT.
Section 4308(b)(3)(B) of the National Defense Author-
ization Act for Fiscal Year 1996 (Public Law 104–106; 10
U.S.C. 1701 note) is amended to read as follows:
‘‘(B) 
commences 
before 
November 
18,
2007.’’.
SEC. 822. MORATORIUM ON REDUCTION OF THE DEFENSE
ACQUISITION AND SUPPORT WORKFORCE.
(a) PROHIBITION.—Notwithstanding any other provi-
sion of law, the defense acquisition and support workforce
may not be reduced, during fiscal years 2003, 2004, and
2005, below the level of that workforce as of September 30,
2002, determined on the basis of full-time equivalent posi-
tions.
(b) WAIVER AUTHORITY.—The Secretary of Defense
may waive the prohibition in subsection (a) and reduce the
level of the defense acquisition and support workforce upon
submitting to Congress the Secretary’s certification that the
defense acquisition and support workforce, at the level to
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which reduced, will be able efficiently and effectively to per-
form the workloads that are required of that workforce con-
sistent with the cost-effective management of the defense ac-
quisition system to obtain best value equipment and with
ensuring military readiness.
(c) DEFENSE ACQUISITION AND SUPPORT WORKFORCE
DEFINED.—In this section, the term ‘‘defense acquisition
and support workforce’’ means Armed Forces and civilian
personnel who are assigned to, or are employed in, an orga-
nization of the Department of Defense that is—
(1) an acquisition organization specified in De-
partment of Defense Instruction 5000.58, dated Janu-
ary 14, 1992; or
(2) an organization not so specified that has ac-
quisition as its predominant mission, as determined
by the Secretary of Defense.
SEC. 823. EXTENSION OF CONTRACT GOAL FOR SMALL DIS-
ADVANTAGED BUSINESSES AND CERTAIN IN-
STITUTIONS OF HIGHER EDUCATION.
Section 2323(k) of title 10, United States Code, is
amended by striking ‘‘2003’’ both places it appears and in-
serting ‘‘2006’’.
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SEC. 824. MENTOR-PROTEGE PROGRAM ELIGIBILITY FOR
HUBZONE SMALL BUSINESS CONCERNS AND
SMALL BUSINESS CONCERNS OWNED AND
CONTROLLED BY SERVICE-DISABLED VET-
ERANS.
Section 831(m)(2) of the National Defense Authoriza-
tion Act for Fiscal Year 1991 (10 U.S.C. 2302 note), is
amended—
(1) by striking ‘‘or’’ at the end of subparagraph
(D);
(2) by striking the period at the end of subpara-
graph (E) and inserting a semicolon; and
(3) by adding at the end the following new sub-
paragraphs:
‘‘(F) a qualified HUBZone small business
concern, within the meaning of section 3(p)(5) of
the Small Business Act (15 U.S.C. 632(p)(5)); or
‘‘(G) a small business concern owned and
controlled by service-disabled veterans, as defined
in section 3(q)(2) of the Small Business Act (15
U.S.C. 632(q)(2)).’’.
SEC. 825. REPEAL OF REQUIREMENTS FOR CERTAIN RE-
VIEWS BY THE COMPTROLLER GENERAL.
The following provisions of the National Defense Au-
thorization Act for Fiscal Year 1996 (Public Law 104–106)
are repealed:
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(1) Section 912(d) (110 Stat. 410; 10 U.S.C.
2216 note), relating to Comptroller General reviews of
the administration of the Defense Modernization Ac-
count.
(2) Section 5312(e) (110 Stat. 695; 40 U.S.C.
1492), relating to Comptroller General monitoring of
a pilot program for solutions-based contracting for
acquisition of information technology.
(3) Section 5401(c)(3) (110 Stat. 697; 40 U.S.C.
1501), relating to a Comptroller General review and
report regarding a pilot program to test streamlined
procedures for the procurement of information tech-
nology products and services available for ordering
through multiple award schedules.
SEC. 826. MULTIYEAR PROCUREMENT AUTHORITY FOR PUR-
CHASE OF DINITROGEN TETROXIDE, HYDRA-
ZINE, AND HYDRAZINE-RELATED PRODUCTS.
(a) IN GENERAL.—Chapter 141 of title 10, United
States Code, is amended by inserting after section 2410n
the following new section:
‘‘§ 2410o. Multiyear procurement authority: purchase
of dinitrogen tetroxide, hydrazine, and hy-
drazine-related products
‘‘(a) TEN-YEAR CONTRACT PERIOD.—The Secretary of
Defense may enter into a contract for a period of up to
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10 years for the purchase of dinitrogen tetroxide, hydrazine,
and hydrazine-related products for the support of a United
States national security program or a United States space
program.
‘‘(b) EXTENSIONS.—A contract entered into for more
than one year under the authority of subsection (a) may
be extended for a total of not more than 10 years pursuant
to any option or options set forth in the contract.’’.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 141 is amended by adding at the
end the following item:
‘‘2410o. Multiyear procurement authority: purchase of dinitrogen tetroxide, hydra-
zine, and hydrazine-related products.’’.
SEC. 827. MULTIYEAR PROCUREMENT AUTHORITY FOR EN-
VIRONMENTAL SERVICES FOR MILITARY IN-
STALLATIONS.
(a) AUTHORITY.—Subsection (b) of section 2306c of
title 10, United States Code, is amended by adding at the
end the following new paragraph:
‘‘(5) Environmental remediation services for—
‘‘(A) an active military installation;
‘‘(B) a military installation being closed or
realigned under a base closure law; or
‘‘(C) a site formerly used by the Department
of Defense.’’.
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(b) DEFINITIONS.—Such section is further amended by
adding at the end the following new subsection:
‘‘(g) ADDITIONAL DEFINITIONS.—In this section:
‘‘(1) The term ‘base closure law’ has the meaning
given such term in section 2667(h)(2) of this title.
‘‘(2) The term ‘military installation’ has the
meaning given such term in section 2801(c)(2) of this
title.’’.
SEC. 828. INCREASED MAXIMUM AMOUNT OF ASSISTANCE
FOR TRIBAL ORGANIZATIONS OR ECONOMIC
ENTERPRISES CARRYING OUT PROCUREMENT
TECHNICAL ASSISTANCE PROGRAMS IN TWO
OR MORE SERVICE AREAS.
Section 2414(a)(4) of title 10, United States Code, is
amended by striking ‘‘$300,000’’ and inserting ‘‘$600,000’’.
SEC. 829. AUTHORITY FOR NONPROFIT ORGANIZATIONS TO
SELF-CERTIFY ELIGIBILITY FOR TREATMENT
AS QUALIFIED ORGANIZATIONS EMPLOYING
SEVERELY DISABLED UNDER MENTOR-PRO-
TEGE PROGRAM.
Section 831 of the National Defense Authorization Act
for Fiscal Year 1991 (10 U.S.C. 2302 note) is amended by
adding at the end the following new subsection:
‘‘(n) SELF-CERTIFICATION OF NONPROFIT ORGANIZA-
TIONS AS QUALIFIED ORGANIZATIONS EMPLOYING THE SE-
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VERELY DISABLED.—(1) The Secretary of Defense may, in
accordance with such requirements as the Secretary may
establish, permit a business entity operating on a non-profit
basis to self-certify its eligibility for treatment as a quali-
fied organization employing the severely disabled under
subsection (m)(2)(D).
‘‘(2) The Secretary shall treat any entity described in
paragraph (1) that submits a self-certification under that
paragraph as a qualified organization employing the se-
verely disabled until the Secretary receives evidence, if any,
that such entity is not described by paragraph (1) or does
not merit treatment as a qualified organization employing
the severely disabled in accordance with applicable provi-
sions of subsection (m).
‘‘(3) Paragraphs (1) and (2) shall cease to be effective
on the effective date of regulations prescribed by the Small
Business Administration under this section setting forth a
process for the certification of business entities as eligible
for treatment as a qualified organization employing the se-
verely disabled under subsection (m)(2)(D).’’.
SEC. 830. REPORT ON EFFECTS OF ARMY CONTRACTING
AGENCY.
(a) IN GENERAL.—The Secretary of the Army shall
submit a report on the effects of the establishment of an
Army Contracting Agency on small business participation
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in Army procurements during the first year of operation
of such an agency to—
(1) the Committee on Armed Services of the
House of Representatives;
(2) the Committee on Armed Services of the Sen-
ate;
(3) the Committee on Small Business of the
House of Representatives; and
(4) the Committee on Small Business and Entre-
preneurship of the Senate.
(b) CONTENT.—The report required under subsection
(a) shall include, in detail—
(1) the justification for the establishment of an
Army Contracting Agency;
(2) the impact of the creation of an Army Con-
tracting Agency on—
(A) Army compliance with—
(i) Department of Defense Directive
4205.1;
(ii) section 15(g) of the Small Business
Act (15 U.S.C. 644(g)); and
(iii) section 15(k) of the Small Busi-
ness Act (15 U.S.C. 644(k));
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(B) small business participation in Army
procurement of products and services for affected
Army installations, including—
(i) the impact on small businesses lo-
cated near Army installations, including—
(I) the increase or decrease in the
total value of Army prime contracting
with local small businesses; and
(II) the opportunities for small
business owners to meet and interact
with Army procurement personnel; and
(ii) any change or projected change in
the use of consolidated contracts and bun-
dled contracts; and
(3) a description of the Army’s plan to address
any negative impact on small business participation
in Army procurement, to the extent such impact is
identified in the report.
(c) TIME FOR SUBMISSION.—The report under this sec-
tion shall be due 15 months after the date of the establish-
ment of the Army Contracting Agency.
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TITLE IX—DEPARTMENT OF DE-
FENSE 
ORGANIZATION 
AND
MANAGEMENT
SEC. 901. TIME FOR SUBMITTAL OF REPORT ON QUADREN-
NIAL DEFENSE REVIEW.
Section 118(d) of title 10, United States Code, is
amended by striking ‘‘not later than September 30 of the
year in which the review is conducted’’ in the second sen-
tence and inserting ‘‘in the year following the year in which
the review is conducted, but not later than the date on which
the President submits the budget for the next fiscal year
to Congress under section 1105(a) of title 31’’.
SEC. 902. INCREASED NUMBER OF DEPUTY COMMANDANTS
AUTHORIZED FOR THE MARINE CORPS.
Section 5045 of title 10, United States Code, is amend-
ed by striking ‘‘five’’ and inserting ‘‘six’’.
SEC. 903. BASE OPERATING SUPPORT FOR FISHER HOUSES.
(a) EXPANSION OF REQUIREMENT TO INCLUDE ARMY
AND AIR FORCE.—Section 2493(f) of title 10, United States
Code, is amended to read as follows:
‘‘(f) BASE OPERATING SUPPORT.—The Secretary of
the military department concerned shall provide base oper-
ating support for Fisher Houses associated with health care
facilities of that military department.’’.
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(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on October 1, 2002.
SEC. 904. PREVENTION AND MITIGATION OF CORROSION.
(a) ESTABLISHMENT.—Not later than 120 days after
the date of the enactment of this Act, the Secretary of De-
fense shall designate an officer or employee of the Depart-
ment of Defense as the senior official responsible (after the
Secretary of Defense and the Under Secretary of Defense
for Acquisition, Technology, and Logistics) for the preven-
tion and mitigation of corrosion of the military equipment
and infrastructure of the Department. The designated offi-
cial shall report directly to the Under Secretary of Defense
for Acquisition, Technology, and Logistics.
(b) DUTIES.—The official designated under subsection
(a) shall direct and coordinate initiatives throughout the
Department of Defense to prevent and mitigate corrosion
of the military equipment and infrastructure of the Depart-
ment, including efforts to facilitate the prevention and miti-
gation of corrosion through—
(1) development and recommendation of policy
guidance on the prevention and mitigation of corro-
sion which the Secretary of Defense shall issue;
(2) review of the annual budget proposed for the
prevention and mitigation of corrosion by the Sec-
retary of each military department and submittal of
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recommendations regarding the proposed budget to the
Secretary of Defense;
(3) direction and coordination of the efforts
within the Department of Defense to prevent or miti-
gate corrosion during—
(A) the design, acquisition, and mainte-
nance of military equipment; and
(B) the design, construction, and mainte-
nance of infrastructure; and
(4) monitoring of acquisition practices—
(A) to ensure that the use of corrosion pre-
vention technologies and the application of corro-
sion prevention treatments are fully considered
during research and development in the acquisi-
tion process; and
(B) to ensure that, to the extent determined
appropriate in each acquisition program, such
technologies and treatments are incorporated
into the program, particularly during the engi-
neering and design phases of the acquisition
process.
(c) INTERIM REPORT.—When the President submits
the budget for fiscal year 2004 to Congress pursuant to sec-
tion 1105(a) of title 31, United States Code, the Secretary
of Defense shall submit to Congress a report regarding the
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actions taken under this section. The report shall include
the following matters:
(1) The organizational structure for the per-
sonnel carrying out the responsibilities of the official
designated under subsection (a) with respect to the
prevention and mitigation of corrosion.
(2) An outline and milestones for developing a
long-term corrosion prevention and mitigation strat-
egy.
(d) LONG-TERM STRATEGY.—(1) Not later than one
year after the date of the enactment of this Act, the Sec-
retary of Defense shall submit to Congress a long-term strat-
egy to reduce corrosion and the effects of corrosion on the
military equipment and infrastructure of the Department
of Defense.
(2) The strategy shall provide for the following actions:
(A) Expanding the emphasis on corrosion pre-
vention and mitigation to include coverage of infra-
structure.
(B) Applying uniformly throughout the Depart-
ment of Defense requirements and criteria for the test-
ing and certification of new technologies for the pre-
vention of corrosion.
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(C) Implementing programs, including programs
supporting databases, to foster the collection and
analysis of—
(i) data useful for determining the extent of
the effects of corrosion on the maintenance and
readiness of military equipment and infrastruc-
ture; and
(ii) data on the costs associated with the
prevention and mitigation of corrosion.
(D) Implementing programs, including sup-
porting databases, to ensure that a focused and co-
ordinated approach is taken throughout the Depart-
ment of Defense to collect, review, validate, and dis-
tribute information on proven methods and products
that are relevant to the prevention of corrosion of
military equipment and infrastructure.
(E) Implementing a program to identify specific
funding in future budgets for the total life cycle costs
of the prevention and mitigation of corrosion.
(F) Establishing a coordinated research and de-
velopment program for the prevention and mitigation
of corrosion for new and existing military equipment
and infrastructure that includes a plan to transition
new corrosion prevention technologies into operational
systems.
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(3) The strategy shall also include, for the actions pro-
vided for pursuant to paragraph (2), the following:
(A) Policy guidance.
(B) Performance measures and milestones.
(C) An assessment of the necessary program
management resources and necessary financial re-
sources.
(e) GAO REVIEWS.—The Comptroller General shall
monitor the implementation of the long-term strategy re-
quired under subsection (d) and, not later than 18 months
after the date of the enactment of this Act, submit to Con-
gress an assessment of the extent to which the strategy has
been implemented.
(f) DEFINITIONS.—In this section:
(1) The term ‘‘corrosion’’ means the deterioration
of a substance or its properties due to a reaction with
its environment.
(2) The term ‘‘military equipment’’ includes all
air, land, and sea weapon systems, weapon platforms,
vehicles, and munitions of the Department of Defense,
and the components of such items.
(3) The term ‘‘infrastructure’’ includes all build-
ings, structures, airfields, port facilities, surface and
subterranean utility systems, heating and cooling sys-
tems, fuel tanks, pavements, and bridges.
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(g) TERMINATION.—This section shall cease to be effec-
tive on the date that is five years after the date of the enact-
ment of this Act.
SEC. 905. WESTERN HEMISPHERE INSTITUTE FOR SECU-
RITY COOPERATION.
(a) AUTHORITY TO ACCEPT FOREIGN GIFTS AND DO-
NATIONS.—Section 2166 of title 10, United States Code, is
amended—
(1) by redesignating subsections (f), (g), and (h),
as subsections (g), (h), and (i), respectively; and
(2) by inserting after subsection (e) the following
new subsection (f):
‘‘(f) AUTHORITY TO ACCEPT FOREIGN GIFTS AND DO-
NATIONS.—(1) The Secretary of Defense may, on behalf of
the Institute, accept foreign gifts or donations in order to
defray the costs of, or enhance the operation of, the Institute.
‘‘(2) Funds received by the Secretary under paragraph
(1) shall be credited to appropriations available for the De-
partment of Defense for the Institute. Funds so credited
shall be merged with the appropriations to which credited
and shall be available for the Institute for the same purposes
and same period as the appropriations with which merged.
‘‘(3) The Secretary of Defense shall notify Congress if
the total amount of money accepted under paragraph (1)
exceeds $1,000,000 in any fiscal year. Any such notice shall
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list each of the contributors of such money and the amount
of each contribution in such fiscal year.
‘‘(4) For the purposes of this subsection, a foreign gift
or donation is a gift or donation of funds, materials (in-
cluding research materials), property, or services (including
lecture services and faculty services) from a foreign govern-
ment, a foundation or other charitable organization in a
foreign country, or an individual in a foreign country.’’.
(b) CONTENT OF ANNUAL REPORT TO CONGRESS.—
Subsection (i) of such section, as redesignated by subsection
(a)(1), is amended by inserting after the first sentence the
following: ‘‘The report shall include a copy of the latest re-
port of the Board of Visitors received by the Secretary under
subsection (e)(5), together with any comments of the Sec-
retary on the Board’s report.’’.
SEC. 906. VETERINARY CORPS OF THE ARMY.
(a) COMPOSITION AND ADMINISTRATION.—(1) Chapter
307 of title 10, United States Code, is amended by inserting
after section 3070 the following new section 3071:
‘‘§ 3071. Veterinary Corps: composition; Chief and as-
sistant chief; appointment; grade
‘‘(a) COMPOSITION.—The Veterinary Corps consists of
the Chief and assistant chief of that corps and other officers
in grades prescribed by the Secretary of the Army.
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‘‘(b) CHIEF.—The Secretary of the Army shall appoint
the Chief from the officers of the Regular Army in that corps
whose regular grade is above lieutenant colonel and who
are recommended by the Surgeon General. An appointee
who holds a lower regular grade may be appointed in the
regular grade of brigadier general. The Chief serves during
the pleasure of the Secretary, but not for more than four
years, and may not be reappointed to the same position.
‘‘(c) ASSISTANT CHIEF.—The Surgeon General shall
appoint the assistant chief from the officers of the Regular
Army in that corps whose regular grade is above lieutenant
colonel. The assistant chief serves during the pleasure of the
Surgeon General, but not for more than four years and may
not be reappointed to the same position.’’.
(2) The table of sections at the beginning of such chap-
ter is amended by inserting after the item relating to section
3070 the following new item:
‘‘3071. Veterinary Corps: composition; Chief and assistant chief; appointment;
grade.’’.
(b) EFFECTIVE DATE.—Section 3071 of title 10,
United States Code, as added by subsection (a), shall take
effect on October 1, 2002.
SEC. 907. UNDER SECRETARY OF DEFENSE FOR INTEL-
LIGENCE.
(a) ESTABLISHMENT OF POSITION.—Chapter 4 of title
10, United States Code, is amended—
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(1) by transferring section 137 within such chap-
ter to appear following section 138;
(2) by redesignating sections 137 and 139 as sec-
tions 139 and 139a, respectively; and
(3) by inserting after section 136a the following
new section 137:
‘‘§ 137. Under Secretary of Defense for Intelligence
‘‘(a) There is an Under Secretary of Defense for Intel-
ligence, appointed from civilian life by the President, by
and with the advice and consent of the Senate.
‘‘(b) Subject to the authority, direction, and control of
the Secretary of Defense, the Under Secretary of Defense
for Intelligence shall perform such duties and exercise such
powers as the Secretary of Defense may prescribe in the
area of intelligence.
‘‘(c) The Under Secretary of Defense for Personnel and
Readiness takes precedence in the Department of Defense
after the Under Secretary of Defense for Personnel and
Readiness.’’.
(b) CONFORMING AMENDMENTS.—(1) Section 131 of
such title is amended—
(A) by striking paragraphs (2), (3), (4), and (5),
and inserting the following:
‘‘(2) The Under Secretaries of Defense, as follows:
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‘‘(A) The Under Secretary of Defense for
Acquisition, Technology, and Logistics.
‘‘(B) The Under Secretary of Defense for
Policy.
‘‘(C) The Under Secretary of Defense
(Comptroller).
‘‘(D) The Under Secretary of Defense for
Personnel and Readiness.
‘‘(E) The Under Secretary of Defense for In-
telligence.’’; and
(B) by redesignating paragraphs (6), (7), (8),
(9), (10), and (11) as paragraphs (3), (4), (5), (6),
(7), and (8), respectively.
(2) The table of sections at the beginning of chapter
4 of such title is amended—
(A) by striking the item relating to section 137
and inserting the following:
‘‘137. Under Secretary of Defense for Intelligence.’’;
and
(B) by striking the item relating to section 139
and inserting the following:
‘‘139. Director of Research and Engineering.
‘‘139a. Director of Operational Test and Evaluation.’’.
(c) EXECUTIVE LEVEL III.—Section 5314 of title 5,
United States Code, is amended by inserting after ‘‘Under
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Secretary of Defense for Personnel and Readiness.’’ the fol-
lowing:
‘‘Under Secretary of Defense for Intelligence.’’.
TITLE X—GENERAL PROVISIONS
Subtitle A—Financial Matters
SEC. 1001. TRANSFER AUTHORITY.
(a) AUTHORITY TO TRANSFER AUTHORIZATIONS.—(1)
Upon determination by the Secretary of Defense that such
action is necessary in the national interest, the Secretary
may transfer amounts of authorizations made available to
the Department of Defense in this division for fiscal year
2003 between any such authorizations for that fiscal year
(or any subdivisions thereof). Amounts of authorizations so
transferred shall be merged with and be available for the
same purposes as the authorization to which transferred.
(2) The total amount of authorizations that the Sec-
retary may transfer under the authority of this section may
not exceed $2,500,000,000.
(b) LIMITATIONS.—The authority provided by this sec-
tion to transfer authorizations—
(1) may only be used to provide authority for
items that have a higher priority than the items from
which authority is transferred; and
(2) may not be used to provide authority for an
item that has been denied authorization by Congress.
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(c) EFFECT ON AUTHORIZATION AMOUNTS.—A trans-
fer made from one account to another under the authority
of this section shall be deemed to increase the amount au-
thorized for the account to which the amount is transferred
by an amount equal to the amount transferred.
(d) NOTICE
TO
CONGRESS.—The Secretary shall
promptly notify Congress of each transfer made under sub-
section (a).
SEC. 1002. REALLOCATION OF AUTHORIZATIONS OF APPRO-
PRIATIONS FROM BALLISTIC MISSILE DE-
FENSE TO SHIPBUILDING.
(a) AMOUNT.—Notwithstanding any other provision of
this Act, the total amount authorized to be appropriated
under section 201(4) is hereby reduced by $690,000,000,
and the amount authorized to be appropriated under sec-
tion 102(a)(3) is hereby increased by $690,000,000.
(b) SOURCE OF REDUCTION.—The total amount of the
reduction in the amount authorized to be appropriated
under section 201(4) shall be derived from the amount pro-
vided under that section for ballistic missile defense for re-
search, development, test, and evaluation.
(c) ALLOCATION
OF INCREASE.—Of the additional
amount authorized to be appropriated under section
102(a)(3) pursuant to subsection (a)—
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(1) $415,000,000 shall be available for advance
procurement of a Virginia class submarine;
(2) $125,000,000 shall be available for advance
procurement of a DDG–51 class destroyer; and
(3) $150,000,000 shall be available for advance
procurement of an LPD–17 class amphibious trans-
port dock.
SEC. 1003. AUTHORIZATION OF APPROPRIATIONS FOR CON-
TINUED OPERATIONS FOR THE WAR ON TER-
RORISM.
(a) AMOUNT.—(1) In addition to the amounts author-
ized to be appropriated under divisions A and B, funds are
hereby authorized to be appropriated for fiscal year 2003
(subject to subsection (b)) in the total amount of
$10,000,000,000 for the conduct of operations in continu-
ation of the war on terrorism in accordance with the Au-
thorization for Use of Military Force (Public Law 107–40;
50 U.S.C. 1541 note).
(2) The amount authorized to be appropriated under
paragraph (1) shall be available for increased operating
costs, transportation costs, costs of humanitarian efforts,
costs of special pays, costs of enhanced intelligence efforts,
increased personnel costs for members of the reserve compo-
nents ordered to active duty under a provision of law re-
ferred to in section 101(a)(13)(B) of title 10, United States
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Code, and other costs related to operations referred to in
paragraph (1).
(b) AUTHORIZATION CONTINGENT ON BUDGET RE-
QUEST.—The authorization of appropriations in subsection
(a) shall be effective only to the extent of the amount pro-
vided in a budget request for the appropriation of funds
for purposes set forth in subsection (a) that is submitted
by the President to Congress after the date of the enactment
of this Act and—
(1) includes a designation of the requested
amount as being essential to respond to or protect
against acts or threatened acts of terrorism; and
(2) specifies a proposed allocation and plan for
the use of the appropriation for purposes set forth in
subsection (a).
SEC. 
1004. 
AUTHORIZATION 
OF 
EMERGENCY 
SUPPLE-
MENTAL APPROPRIATIONS FOR FISCAL YEAR
2002.
Amounts authorized to be appropriated to the Depart-
ment of Defense for fiscal year 2002 in the National Defense
Authorization Act for Fiscal Year 2002 (Public Law 107–
107) are hereby adjusted, with respect to any such author-
ized amount, by the amount by which appropriations pur-
suant to such authorization were increased (by a supple-
mental appropriation) or decreased (by a rescission), or
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both, in any law making supplemental appropriations for
fiscal year 2002 that is enacted during the 107th Congress,
second session.
SEC. 1005. UNITED STATES CONTRIBUTION TO NATO COM-
MON-FUNDED BUDGETS IN FISCAL YEAR 2003.
(a) FISCAL
YEAR
2003 LIMITATION.—The total
amount contributed by the Secretary of Defense in fiscal
year 2003 for the common-funded budgets of NATO may
be any amount up to, but not in excess of, the amount speci-
fied in subsection (b) (rather than the maximum amount
that would otherwise be applicable to those contributions
under the fiscal year 1998 baseline limitation).
(b) TOTAL AMOUNT.—The amount of the limitation
applicable under subsection (a) is the sum of the following:
(1) The amounts of unexpended balances, as of
the end of fiscal year 2002, of funds appropriated for
fiscal years before fiscal year 2003 for payments for
those budgets.
(2) The amount specified in subsection (c)(1).
(3) The amount specified in subsection (c)(2).
(4) The total amount of the contributions author-
ized to be made under section 2501.
(c) AUTHORIZED AMOUNTS.—Amounts authorized to
be appropriated by titles II and III of this Act are available
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for contributions for the common-funded budgets of NATO
as follows:
(1) Of the amount provided in section 201(1),
$750,000 for the Civil Budget.
(2) Of the amount provided in section 301(a)(1),
$205,623,000 for the Military Budget.
(d) DEFINITIONS.—For purposes of this section:
(1) COMMON-FUNDED BUDGETS OF NATO.—The
term ‘‘common-funded budgets of NATO’’ means the
Military Budget, the Security Investment Program,
and the Civil Budget of the North Atlantic Treaty Or-
ganization (and any successor or additional account
or program of NATO).
(2) FISCAL YEAR 1998 BASELINE LIMITATION.—
The term ‘‘fiscal year 1998 baseline limitation’’
means the maximum annual amount of Department
of Defense contributions for common-funded budgets of
NATO that is set forth as the annual limitation in
section 3(2)(C)(ii) of the resolution of the Senate giv-
ing the advice and consent of the Senate to the ratifi-
cation of the Protocols to the North Atlantic Treaty
of 1949 on the Accession of Poland, Hungary, and the
Czech Republic (as defined in section 4(7) of that res-
olution), approved by the Senate on April 30, 1998.
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SEC. 1006. DEVELOPMENT AND IMPLEMENTATION OF FI-
NANCIAL MANAGEMENT ENTERPRISE ARCHI-
TECTURE.
(a) REQUIREMENT FOR ENTERPRISE ARCHITECTURE
AND TRANSITION PLAN.—Not later than March 15, 2003,
the Secretary of Defense shall develop a proposed financial
management enterprise architecture for all budgetary, ac-
counting, finance, and data feeder systems of the Depart-
ment of Defense, together with a transition plan for imple-
menting the proposed enterprise architecture.
(b) COMPOSITION OF ARCHITECTURE.—The proposed
financial management enterprise architecture developed
under subsection (a) shall describe a system that, at a
minimum—
(1) includes data standards and system interface
requirements that are to apply uniformly throughout
the Department of Defense;
(2) enables the Department of Defense—
(A) to comply with Federal accounting, fi-
nancial management, and reporting require-
ments;
(B) to routinely produce timely, accurate,
and useful financial information for manage-
ment purposes;
(C) to integrate budget, accounting, and
program information and systems; and
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(D) to provide for the systematic measure-
ment of performance, including the ability to
produce timely, relevant, and reliable cost infor-
mation.
(c) COMPOSITION OF TRANSITION PLAN.—The transi-
tion plan developed under subsection (a) shall contain spe-
cific time-phased milestones for modifying or eliminating
existing systems and for acquiring new systems necessary
to implement the proposed enterprise architecture.
(d) EXPENDITURES FOR IMPLEMENTATION.—The Sec-
retary of Defense may not obligate more than $1,000,000
for a defense financial system improvement on or after the
enterprise architecture approval date unless the Financial
Management Modernization Executive Committee deter-
mines that the defense financial system improvement is con-
sistent with the proposed enterprise architecture and transi-
tion plan.
(e) EXPENDITURES
PENDING
ARCHITECTURE
AP-
PROVAL.—The Secretary of Defense may not obligate more
than $1,000,000 for a defense financial system improvement
during the enterprise architecture pre-approval period un-
less the Financial Management Modernization Executive
Committee determines that the defense financial system im-
provement is necessary—
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(1) to achieve a critical national security capa-
bility or address a critical requirement in an area
such as safety or security; or
(2) to prevent a significant adverse effect (in
terms of a technical matter, cost, or schedule) on a
project that is needed to achieve an essential capa-
bility, taking into consideration in the determination
the alternative solutions for preventing the adverse ef-
fect.
(f) COMPTROLLER GENERAL REVIEW.—Not later than
March 1 of each of 2003, 2004, and 2005, the Comptroller
General shall submit to the congressional defense committees
a report on defense financial management system improve-
ments that have been undertaken during the previous year.
The report shall include the Comptroller General’s assess-
ment of the extent to which the improvements comply with
the requirements of this section.
(g) DEFINITIONS.—In this section:
(1) 
The 
term 
‘‘defense 
financial 
system
improvement’’—
(A) means the acquisition of a new budg-
etary, accounting, finance, or data feeder system
for the Department of Defense, or a modification
of an existing budgetary, accounting, finance, or
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data feeder system of the Department of Defense;
and
(B) does not include routine maintenance
and operation of any such system.
(2) The term ‘‘enterprise architecture approval
date’’ means the date on which the Secretary of De-
fense approves a proposed financial management en-
terprise architecture and a transition plan that sat-
isfy the requirements of this section.
(3) The term ‘‘enterprise architecture pre-ap-
proval period’’ means the period beginning on the
date of the enactment of this Act and ending on the
day before the enterprise architecture approval date.
(4) The term ‘‘feeder system’’ means a data feed-
er system within the meaning of section 2222(c)(2) of
title 10, United States Code.
(5) The term ‘‘Financial Management Mod-
ernization Executive Committee’’ means the Finan-
cial Management Modernization Executive Committee
established pursuant to section 185 of title 10, United
States Code.
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SEC. 1007. DEPARTMENTAL ACCOUNTABLE OFFICIALS IN
THE DEPARTMENT OF DEFENSE.
(a) DESIGNATION
AND ACCOUNTABILITY.—Chapter
165 of title 10, United States Code, is amended by inserting
after section 2773 the following new section:
‘‘§ 2773a. Departmental accountable officials
‘‘(a) DESIGNATION.—The Secretary of Defense may
designate, in writing, as a departmental accountable offi-
cial any employee of the Department of Defense or any
member of the armed forces who—
‘‘(1) has a duty to provide a certifying official
of the Department of Defense with information, data,
or services directly relied upon by the certifying offi-
cial in the certification of vouchers for payment; and
‘‘(1) is not otherwise accountable under subtitle
III of title 31 or any other provision of law for pay-
ments made on the basis of the vouchers.
‘‘(b) PECUNIARY LIABILITY.—(1) The Secretary of De-
fense may, in a designation of a departmental accountable
official under subsection (a), subject that official to pecu-
niary liability, in the same manner and to the same extent
as an official accountable under subtitle III of title 31, for
an illegal, improper, or incorrect payment made pursuant
to a voucher certified by a certifying official of the Depart-
ment of Defense on the basis of information, data, or serv-
ices that—
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‘‘(A) the departmental accountable official pro-
vides to the certifying official in the performance of
a duty described in subsection (a)(1); and
‘‘(B) the certifying official directly relies upon in
certifying the voucher.
‘‘(2) Any pecuniary liability imposed on a depart-
mental accountable official under this subsection for a loss
to the United States resulting from an illegal, improper,
or incorrect payment shall be joint and several with that
of any other employee or employees of the United States
or member or members of the uniformed services who are
pecuniarily liable for the loss.
‘‘(c) RELIEF FROM PECUNIARY LIABILITY.—The Sec-
retary of Defense shall relieve a departmental accountable
official from pecuniary liability imposed under subsection
(b) in the case of a payment if the Secretary determines
that the payment was not a result of fault or negligence
on the part of the departmental accountable official.
‘‘(d) CERTIFYING OFFICIAL DEFINED.—In this section,
the term ‘certifying official’ means an employee who has
the responsibilities specified in section 3528(a) of title 31.’’.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of such chapter is amended by inserting after
the item relating to section 2773 the following new item:
‘‘2773a. Departmental accountable officials.’’.
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SEC. 1008. DEPARTMENT-WIDE PROCEDURES FOR ESTAB-
LISHING AND LIQUIDATING PERSONAL PECU-
NIARY LIABILITY.
(a) REPORT OF SURVEY PROCEDURES.—(1) Chapter
165 of title 10, United States Code, is amended by inserting
after section 2786 the following new section:
‘‘§ 2787. Reports of survey
‘‘(a) REGULATIONS.—Under regulations prescribed
pursuant to subsection (c), any officer of the armed forces
or any civilian employee of the Department of Defense des-
ignated in accordance with the regulations may act upon
reports of survey and vouchers pertaining to the loss, spoil-
age, unserviceability, unsuitability, or destruction of, or
damage to, property of the United States under the control
of the Department of Defense.
‘‘(b) FINALITY OF ACTION.—(1) Action taken under
subsection (a) is final except as provided in paragraph (2).
‘‘(2) An action holding a person pecuniarily liable for
loss, spoilage, destruction, or damage is not final until ap-
proved by a person designated to do so by the Secretary
of a military department, commander of a combatant com-
mand, or Director of a Defense Agency, as the case may
be, who has jurisdiction of the person held pecuniarily lia-
ble. The person designated to provide final approval shall
be an officer of an armed force, or a civilian employee,
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under the jurisdiction of the official making the designa-
tion.
‘‘(c) REGULATIONS.—The Secretary of Defense shall
prescribe regulations to carry out this section.’’.
(2) The table of sections at the beginning of chapter
165 of such title is amended by inserting after the item re-
lating to section 2786 the following new item:
‘‘2787. Reports of survey.’’.
(b) DAMAGE OR REPAIR OF ARMS AND EQUIPMENT.—
Section 1007(e) of title 37, United States Code, is amended
by striking ‘‘Army or the Air Force’’ and inserting ‘‘Army,
Navy, Air Force, or Marine Corps’’.
(c) REPEAL OF SUPERSEDED PROVISIONS.—(1) Sec-
tions 4835 and 9835 of title 10, United States Code, are
repealed.
(2) The tables of sections at the beginning of chapters
453 and 953 of such title are amended by striking the items
relating to sections 4835 and 9835, respectively.
SEC. 1009. TRAVEL CARD PROGRAM INTEGRITY.
(a) AUTHORITY.—Section 2784 of title 10, United
States Code, is amended by adding at the end the following
new subsections:
‘‘(d) DISBURSEMENT OF ALLOWANCES DIRECTLY TO
CREDITORS.—(1) The Secretary of Defense may require
that any part of the travel or transportation allowances of
an employee of the Department of Defense or a member of
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the armed forces be disbursed directly to the issuer of a De-
fense travel card if the amount is disbursed to the issuer
in payment of amounts of expenses of official travel that
are charged by the employee or member on the Defense trav-
el card.
‘‘(2) For the purposes of this subsection, the travel and
transportation allowances referred to in paragraph (1) are
amounts to which an employee of the Department of Defense
is entitled under section 5702 of title 5 and or a member
of the armed forces is entitled section 404 of title 37.
‘‘(e) OFFSETS
FOR
DELINQUENT
TRAVEL
CARD
CHARGES.—(1) The Secretary of Defense may require that
there be deducted and withheld from any pay payable to
an employee of the Department of Defense or a member of
the armed forces any amount that is owed by the employee
or member to a creditor by reason of one or more charges
of expenses of official travel of the employee or member on
a Defense travel card issued by the creditor if the employee
or member—
‘‘(A) is delinquent in the payment of such
amount under the terms of the contract under which
the card is issued; and
‘‘(B) does not dispute the amount of the delin-
quency.
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‘‘(2) The amount deducted and withheld from pay
under paragraph (1) with respect to a debt owed a creditor
as described in that paragraph shall be disbursed to the
creditor to reduce the amount of the debt.
‘‘(3) The amount of pay deducted and withheld from
the pay owed to an employee or member with respect to
a pay period under paragraph (1) may not exceed 15 per-
cent of the disposable pay of the employee or member for
that pay period, except that a higher amount may be de-
ducted and withheld with the written consent of the em-
ployee or member.
‘‘(4) The Secretary of Defense shall prescribe proce-
dures for deducting and withholding amounts from pay
under this subsection. The procedures shall be substantially
equivalent to the procedures under section 3716 of title 31.
‘‘(f) UNDER
SECRETARY
OF
DEFENSE
(COMP-
TROLLER).—The Secretary of Defense shall act through the
Under Secretary of Defense (Comptroller) in carrying out
this section.
‘‘(g) DEFINITIONS.—In this section:
‘‘(1) The term ‘Defense travel card’ means a
charge or credit card that—
‘‘(A) is issued to an employee of the Depart-
ment of Defense or a member of the armed forces