312 
Subtitle B—Amendments to General 
Contracting Authorities, Proce-
dures, and Limitations 
SEC. 811. ADDITIONAL CONTRACTOR RESPONSIBILITIES IN 
REGULATIONS RELATING TO DETECTION AND 
AVOIDANCE OF COUNTERFEIT ELECTRONIC 
PARTS. 
Section 818(c)(2)(B) of the National Defense Author-
ization Act for Fiscal Year 2012 (Public Law 112–81; 125 
Stat. 1493; 10 U.S.C. 2302 note) is amended— 
(1) in clause (i), by inserting ‘‘electronic’’ after 
‘‘avoid counterfeit’’; and 
(2) in clause (ii), by striking ‘‘were provided’’ 
and inserting the following: ‘‘were— 
‘‘(I) procured from an original 
manufacturer or its authorized dealer 
or from a trusted supplier in accord-
ance with regulations described in 
paragraph (3); or 
‘‘(II) provided’’. 
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313 
SEC. 812. AMENDMENTS RELATING TO DETECTION AND 
AVOIDANCE OF COUNTERFEIT ELECTRONIC 
PARTS. 
Section 818(c)(2) of the National Defense Authoriza-
tion Act for Fiscal Year 2012 (Public Law 112–81; 10 
U.S.C. 2302 note) is amended— 
(1) in subparagraph (A), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (B), at the end of clause 
(iii), by striking the period and inserting ‘‘; and’’; 
and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(C) the cost of counterfeit electronic parts 
and suspect counterfeit electronic parts and the 
cost of rework or corrective action that may be 
required to remedy the use or inclusion of obso-
lete parts are not allowable costs under Depart-
ment contracts, unless— 
‘‘(i) the offeror’s proposal in response 
to a Department of Defense solicitation for 
maintenance, refurbishment, or remanufac-
ture work identifies obsolete electronic parts 
and includes a plan to ensure trusted 
sources of supply for obsolete electronic 
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314 
parts, or to implement design modifications 
to eliminate obsolete electronic parts; 
‘‘(ii) the Department elects not to fund 
design modifications to eliminate obsolete 
electronic parts; and 
‘‘(iii) the contractor applies inspec-
tions and tests intended to detect counterfeit 
electronic parts and suspect counterfeit elec-
tronic parts when purchasing electronic 
parts from other than the original manufac-
turers or their authorized dealers, pursuant 
to paragraph (3).’’. 
SEC. 813. GOVERNMENT-WIDE LIMITATIONS ON ALLOWABLE 
COSTS FOR CONTRACTOR COMPENSATION. 
(a) DEFENSE CONTRACTS.— 
(1) AMENDMENTS
RELATING
TO
CONTRACTOR 
EMPLOYEES.—Subparagraph (P) of section 2324(e)(1) 
of title 10, United States Code, is amended to read as 
follows: 
‘‘(P) Costs of compensation of any contractor 
employee for a fiscal year, regardless of the contract 
funding source, to the extent that such compensation 
exceeds $763,029 adjusted annually for the U.S. Bu-
reau of Labor Statistics Employment Cost Index for 
total compensation for private industry workers, by 
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occupational and industry group not seasonally ad-
justed, except that the Secretary of Defense may estab-
lish narrowly targeted exceptions for positions in the 
science, technology, engineering, mathematics, med-
ical, and manufacturing fields upon a determination 
that such exceptions are needed to ensure that the De-
partment of Defense has continued access to needed 
skills and capabilities.’’. 
(2) AMENDMENTS RELATING TO SENIOR EXECU-
TIVES
OF
CERTAIN
CONTRACTORS.—Section 
2324(e)(1) of such title is further amended by adding 
at the end the following new subparagraph: 
‘‘(Q) Costs of compensation of senior executives 
of a covered contractor.’’. 
(3) DEFINITIONS.—Section 2324(l) of such title 
is amended— 
(A) by inserting after paragraph (4) the fol-
lowing new paragraph (5): 
‘‘(5) The term ‘senior executives’, with respect to 
a covered contractor, means the five most highly com-
pensated employees of the contractor. In determining 
the five most highly compensated employees in the 
case of a contractor with components (such as subsidi-
aries or divisions), the determination shall be made 
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316 
using the five most highly compensated employees 
contractor-wide, not within each component.’’; and 
(B) by inserting after paragraph (6) the fol-
lowing new paragraph (7): 
‘‘(7) The term ‘covered contractor’, with respect 
to a fiscal year, means a contractor that was awarded 
Federal contracts in an amount totaling more than 
$500,000,000 during the previous fiscal year.’’. 
(b) CIVILIAN AGENCY CONTRACTS.— 
(1) AMENDMENTS
RELATING
TO
CONTRACTOR 
EMPLOYEES.—Paragraph (16) of section 4304(a) of 
title 41, United States Code, is amended to read as 
follows: 
‘‘(16) Costs of compensation of any contractor 
employee for a fiscal year, regardless of the contract 
funding source, to the extent that such compensation 
exceeds $763,029 adjusted annually for the U.S. Bu-
reau of Labor Statistics Employment Cost Index for 
total compensation for private industry workers, by 
occupational and industry group not seasonally ad-
justed, except that the executive agency may establish 
narrowly targeted exceptions for positions in the 
science, technology, engineering, mathematics, med-
ical, and manufacturing fields upon a determination 
that such exceptions are needed to ensure that the ex-
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317 
ecutive agency has continued access to needed skills 
and capabilities.’’. 
(2) AMENDMENTS RELATING TO SENIOR EXECU-
TIVES OF CERTAIN CONTRACTORS.—Section 4304(a) 
of such title is further amended by adding at the end 
the following new paragraph: 
‘‘(17) Costs of compensation of senior executives 
of a covered contractor.’’. 
(3) DEFINITIONS.—Section 4301 of such title is 
amended by striking paragraph (4) and inserting the 
following new paragraphs (4) and (5): 
‘‘(4) The term ‘senior executives’, with respect to 
a covered contractor, means the five most highly com-
pensated employees of the contractor. In determining 
the five most highly compensated employees in the 
case of a contractor with components (such as subsidi-
aries or divisions), the determination shall be made 
using the five most highly compensated employees 
contractor-wide, not within each component. 
‘‘(5) The term ‘covered contractor’, with respect 
to a fiscal year, means a contractor that was awarded 
Federal contracts in an amount totaling more than 
$500,000,000 during the previous fiscal year.’’. 
(c) CONFORMING AMENDMENTS.—Chapter 11 of title 
41, United States Code, is amended— 
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318 
(1) by striking section 1127; and 
(2) by striking the item relating to that section 
in the table of sections at the beginning of such chap-
ter. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to costs of compensation 
incurred under contracts entered into on or after the date 
that is 180 days after the date of the enactment of this Act. 
SEC. 814. INCLUSION OF ADDITIONAL COST ESTIMATE IN-
FORMATION IN CERTAIN REPORTS. 
(a) ADDITIONAL COST ESTIMATE INFORMATION RE-
QUIRED TO BE INCLUDED IN SELECTED ACQUISITION RE-
PORTS.—Section 2432(c)(1) of title 10, United States Code, 
is amended— 
(1) by redesignating subparagraphs (B), (C) and 
(D) as subparagraphs (C), (D), and (F), respectively; 
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraph (B): 
‘‘(B) for each major defense acquisition program 
or designated major subprogram included in the re-
port— 
‘‘(i) the Baseline Estimate (as that term is 
defined in section 2433(a)(2) of this title), along 
with the associated risk curve and sensitivity of 
that estimate; 
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‘‘(ii) the original Baseline Estimate (as that 
term is defined in section 2435(d)(1) of this 
title), along with the associated risk curve and 
sensitivity of that estimate; 
‘‘(iii) if the original Baseline Estimate was 
adjusted 
or 
revised 
pursuant 
to 
section 
2435(d)(2) of this title, such adjusted or revised 
estimate, along with the associated risk curve 
and sensitivity of that estimate; and 
‘‘(iv) the primary risk parameters associ-
ated with the current procurement cost for the 
program (as that term is used in section 
2432(e)(4) of this title);’’; 
(3) in subparagraph (D), as so redesignated, by 
striking ‘‘and’’ at the end; and 
(4) by inserting after subparagraph (D), as so 
redesignated, the following new subparagraph (E): 
‘‘(E) estimated contract termination costs; and’’. 
(b) ADDITIONAL DUTIES OF DIRECTOR OF COST AS-
SESSMENT AND PROGRAM EVALUATION WITH RESPECT TO 
SAR.— 
(1) REVIEW REQUIRED.—Section 2334(a) of title 
10, United States Code, is amended— 
(A) by striking ‘‘and’’ at the end of para-
graph (6); 
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(B) by striking the period and inserting ‘‘; 
and’’ at the end of paragraph (7); and 
(C) by adding at the end the following new 
paragraph (8): 
‘‘(8) annually review the cost estimates and asso-
ciated information required to be included, by section 
2432(c)(1)(B) of this title, in the Selected Acquisition 
Reports required by that section.’’. 
(2) ADDITIONAL INFORMATION REQUIRED IN AN-
NUAL REPORT.—Section 2334(f)(1) of such title is 
amended— 
(A) by striking ‘‘report, an assessment of— 
’’ and inserting ‘‘report—’’; 
(B) in each of subparagraphs (A), (B), and 
(C), by inserting ‘‘an assessment of’’ before the 
first word of the text; 
(C) in subparagraph (B), by striking ‘‘and’’ 
at the end; 
(D) in subparagraph (C), by striking the 
period at the end and inserting ‘‘; and’’; and 
(E) by adding at the end the following new 
subparagraph: 
‘‘(D) a summary of the cost estimate information 
reviewed under subsection (a)(8), an identification of 
any trends in that information, an aggregation of the 
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cumulative risk of the portfolio of systems reviewed 
under that subsection, and recommendations for im-
proving cost estimates on the basis of the review 
under that subsection.’’. 
SEC. 815. AMENDMENT RELATING TO COMPELLING REA-
SONS FOR WAIVING SUSPENSION OR DEBAR-
MENT. 
Section 2393(b) of title 10, United States Code, is 
amended by inserting after the first sentence the following: 
‘‘The Secretary of Defense shall also make the determination 
described in subsection (a)(2) available on a publicly acces-
sible website.’’. 
SEC. 816. REQUIREMENT THAT COST OR PRICE TO THE FED-
ERAL GOVERNMENT BE GIVEN AT LEAST 
EQUAL 
IMPORTANCE 
AS 
TECHNICAL 
OR 
OTHER CRITERIA IN EVALUATING COMPETI-
TIVE PROPOSALS FOR DEFENSE CONTRACTS. 
(a) REQUIREMENT.—Subparagraph (A) of section 
2305(a)(3) of title 10, United States Code, is amended by 
striking ‘‘proposals; and’’ at the end of clause (ii) and all 
that follows through the end of the subparagraph and insert-
ing the following: ‘‘proposals and that must be assigned im-
portance at least equal to all evaluation factors other than 
cost or price when combined.’’. 
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322 
(b) WAIVER.—Section 2305(a)(3) of such title is fur-
ther amended by striking subparagraph (B) and inserting 
the following: 
‘‘(B) The requirement of subparagraph 
(A)(ii) relating to assigning at least equal im-
portance to evaluation factors of cost or price 
may be waived by the head of the agency.’’. 
(c) REPORT.—Section 2305(a)(3) of such title is fur-
ther amended by adding at the end the following new sub-
paragraph: 
‘‘(C) Not later than 180 days after the end 
of each fiscal year, the Secretary of Defense shall 
submit to Congress, and post on a publicly avail-
able website of the Department of Defense, a re-
port containing a list of each waiver issued by 
the head of an agency under subparagraph (B) 
during the preceding fiscal year.’’. 
SEC. 817. REQUIREMENT TO BUY AMERICAN FLAGS FROM 
DOMESTIC SOURCES. 
Section 2533a(b) of title 10, United States Code, is 
amended by adding at the end the following new paragraph: 
‘‘(3) A flag of the United States of America 
(within the meaning of chapter 1 of title 4).’’. 
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323 
Subtitle C—Provisions Relating to 
Contracts in Support of Contin-
gency Operations in Iraq or Af-
ghanistan 
SEC. 821. AMENDMENTS RELATING TO PROHIBITION ON 
CONTRACTING WITH THE ENEMY. 
(a) AMENDMENTS RELATING TO PROHIBITION.—Sec-
tion 841(a)(1) of the National Defense Authorization Act 
for Fiscal Year 2012 (Public Law 112–81; 126 Stat. 1510) 
is amended— 
(1) in the matter preceding subparagraph (A), 
by striking ‘‘Commander of the United States Central 
Command’’ and inserting ‘‘commander of a covered 
combatant command’’; 
(2) in subparagraph (A)— 
(A) by striking ‘‘Commander of the United 
States Central Command’’ and inserting ‘‘com-
mander of the covered combatant command’’; 
and 
(B) by striking ‘‘United States Central 
Command theater of operations’’ and inserting 
‘‘theater of operations of that command’’; 
(3) in subparagraph (B), by striking ‘‘United 
States Central Command theater of operations’’ and 
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inserting ‘‘theater of operations of the covered combat-
ant command’’; and 
(4) in subparagraph (C)— 
(A) by striking ‘‘Commander of the United 
States Central Command’’ and inserting ‘‘com-
mander of the covered combatant command’’; 
and 
(B) by striking ‘‘United States Central 
Command theater of operations’’ and inserting 
‘‘theater of operations of that command’’. 
(b) AMENDMENTS RELATING TO CONTRACT CLAUSE.— 
Section 841(b)(3) of such Act is amended— 
(1) by striking ‘‘$100,000’’ and inserting 
‘‘$50,000’’; and 
(2) by striking ‘‘United States Central Com-
mand theater of operations’’ and inserting ‘‘theater of 
operations of a covered combatant command’’. 
(c) AMENDMENTS RELATING TO IDENTIFICATION OF 
CONTRACTS.—Section 841(c) of such Act is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘, acting through the Com-
mander of the United States Central Com-
mand,’’; and 
(B) by striking ‘‘United States Central 
Command theater of operations’’ and inserting 
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‘‘theaters of operations of covered combatant 
commands’’; 
(2) in paragraph (2)— 
(A) by striking ‘‘Commander of the United 
States Central Command’’ and inserting ‘‘com-
mander of a covered combatant command’’; and 
(B) by striking ‘‘Commander may notify’’ 
and inserting ‘‘commander may notify’’; and 
(3) in paragraph (3), by striking ‘‘Commander 
of the United States Central Command’’ and insert-
ing ‘‘commander of a covered combatant command’’. 
(d) AMENDMENTS RELATING TO NONDELEGATION OF 
RESPONSIBILITIES.—Section 841(d)(2) of such Act is 
amended by striking ‘‘Commander of the United States 
Central Command’’ and inserting ‘‘commander of a covered 
combatant command’’. 
(e) AMENDMENTS RELATING TO DEFINITIONS.—Sec-
tion 841(f) of such Act is amended— 
(1) by striking the subsection heading and in-
serting ‘‘DEFINITIONS.—’’; 
(2) by striking ‘‘In this section, the term’’ and 
inserting the following: ‘‘In this section: 
‘‘(1) CONTINGENCY OPERATION.—The term’’; and 
(3) by adding at the end the following new para-
graph: 
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‘‘(2) COVERED COMBATANT COMMAND.—The term 
‘covered combatant command’ means the United 
States Central Command, the United States Euro-
pean Command, the United States Southern Com-
mand, and the United States Pacific Command.’’. 
(f) REPEAL OF SUNSET.—Subsection (g) of section 841 
of such Act is repealed. 
(g) TECHNICAL AMENDMENTS.— 
(1) CONFORMING
AMENDMENT
TO
SECTION 
HEADING.— 
(A) The heading of section 841 of such Act 
is amended by striking ‘‘IN
THE
UNITED 
STATES CENTRAL COMMAND THEATER OF 
OPERATIONS’’. 
(B) The item relating to section 841 in the 
table of sections at the beginning of title VIII 
and in section 2 of such Act is amended to read 
as follows: 
‘‘Sec. 841. Prohibition on contracting with the enemy.’’. 
(2) REPEAL
OF
SUPERSEDED
DEADLINES.— 
Paragraph (1) of each of subsections (a), (b), and (c) 
of section 841 of such Act is amended by striking 
‘‘Not later than 30 days after the date of the enact-
ment of this Act, the’’ and inserting ‘‘The’’. 
(h) EFFECTIVE DATE.—The amendments made by this 
section shall apply to contracts entered into on or after the 
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date that is 90 days after the date of the enactment of this 
Act. 
SEC. 822. COLLECTION OF DATA RELATING TO CONTRACTS 
IN IRAQ AND AFGHANISTAN. 
(a) PENALTIES.—Section 861 of the National Defense 
Authorization Act for Fiscal Year 2008 (Public Law 110– 
181; 10 U.S.C. 2302 note) is amended by adding at the 
end the following new subsection: 
‘‘(e) PENALTIES FOR FAILURE TO COMPLY.—Any con-
tract in Afghanistan entered into or modified after the date 
of the enactment of the National Defense Authorization Act 
for Fiscal Year 2014 may include a clause requiring the 
imposition of a penalty on any contractor that does not 
comply with the policies or guidance issued or the regula-
tions prescribed pursuant to subsection (c). Compliance 
with such policies, guidance, or regulations may be consid-
ered as a factor in the determination of award and incen-
tive fees.’’. 
(b) PENALTY INFORMATION COVERED IN REPORT.— 
Section 863(c) of the National Defense Authorization Act 
for Fiscal Year 2008 (Public Law 110–181; 10 U.S.C. 2302 
note) is amended by adding at the end the following new 
paragraph: 
‘‘(4) Any penalties imposed on contractors for 
failing to comply with requirements under section 
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861(e), including requirements to provide information 
for the common databases identified under section 
861(b)(4).’’. 
Subtitle D—Other Matters 
SEC. 831. EXTENSION OF PILOT PROGRAM ON ACQUISITION 
OF MILITARY PURPOSE NONDEVELOPMENTAL 
ITEMS. 
Section 866(f)(1) of the Ike Skelton National Defense 
Authorization Act for Fiscal Year 2011 (Public Law 111– 
383; 124 Stat. 4296; 10 U.S.C. 2302 note) is amended by 
striking ‘‘the date that is five years after the date of the 
enactment of this Act.’’ and inserting ‘‘December 31, 
2019.’’. 
SEC. 832. EXTENSION OF AUTHORITY TO ACQUIRE PROD-
UCTS AND SERVICES PRODUCED IN COUN-
TRIES ALONG A MAJOR ROUTE OF SUPPLY TO 
AFGHANISTAN. 
Section 801(f) of the National Defense Authorization 
Act for Fiscal Year 2010 (Public Law 111–84; 123 Stat. 
2399), as amended by section 841(a) of the National Defense 
Authorization Act for Fiscal Year 2013 (Public Law 112– 
239; 126 Stat. 1845), is amended by striking ‘‘December 
31, 2014’’ and inserting ‘‘December 31, 2015’’. 
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