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section (a), shall apply with respect to beneficiaries who 
attain age 65 after the date of the enactment of this Act. 
SEC. 708. INFLATION ADJUSTMENT OF DIFFERENTIAL PAY-
MENTS TO CHILDREN’S HOSPITALS PARTICI-
PATING IN TRICARE PROGRAM. 
(a) ANNUAL INFLATION ADJUSTMENT.—Beginning 
in fiscal year 2007, the Secretary of Defense shall annu-
ally adjust for inflation the TRICARE children’s hospital 
differential payment rate. The adjustment for a fiscal year 
shall be the same as the applicable percentage increase 
defined under section 1886(d)(3)(B)(i) of the Social Secu-
rity Act (42 U.S.C. 1395ww(d)(3)(B)(i)) for that fiscal 
year for hospitals located in large urban areas. 
(b) TRICARE CHILDREN’S HOSPITAL DIFFEREN-
TIAL
PAYMENT
RATE.—In this section, the term 
‘‘TRICARE children’s hospital differential payment rate’’ 
means the differential payment rate by the Department 
of Defense to children’s hospitals for health care services 
for dependent children of members of the uniformed serv-
ices under the TRICARE program. 
SEC. 709. EXPANDED ELIGIBILITY OF SELECTED RESERVE 
MEMBERS UNDER TRICARE PROGRAM. 
(a) GENERAL ELIGIBILITY.—Subsection (a) of sec-
tion 1076d of title 10, United States Code, is amended— 
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(1) by striking ‘‘(a) ELIGIBILITY.—A member’’ 
and inserting ‘‘(a) ELIGIBILITY.—(1) Except as pro-
vided in paragraph (2), a member’’; 
(2) by striking ‘‘after the member completes’’ 
and all that follows through ‘‘one or more whole 
years following such date’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) Paragraph (1) does not apply to a member who 
is enrolled, or is eligible to enroll, in a health benefits plan 
under chapter 89 of title 5.’’. 
(b) CONDITION
FOR
TERMINATION
OF
ELIGI-
BILITY.—Subsection (b) of such section is amended— 
(1) by striking ‘‘(b) PERIOD OF COVERAGE.— 
(1) TRICARE Standard’’ and all that follows 
through ‘‘(4) Eligibility’’ and inserting ‘‘(b) TERMI-
NATION
OF ELIGIBILITY UPON TERMINATION
OF 
SERVICE.—Eligibility’’; and 
(2) by striking paragraph (5). 
(c) CONFORMING AMENDMENTS.— 
(1) Such section is further amended— 
(A) by striking subsection (e); 
(B) by redesignating subsection (g) as sub-
section (e) and transferring such subsection 
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within such section so as to appear following 
subsection (d); and 
(C) by striking paragraph (3) of subsection 
(f). 
(2) The heading for such section is amended to 
read as follows: 
‘‘§ 1076d. TRICARE program: TRICARE standard cov-
erage for members of the Selected Re-
serve’’. 
(d) REPEAL OF OBSOLETE PROVISION.—Effective 
October 1, 2007, section 1076b of title 10, United States 
Code, is repealed. 
(e) CLERICAL AMENDMENTS.—Effective October 1, 
2007, the table of sections at the beginning of chapter 55 
of title 10, United States Code, is amended— 
(1) by striking the item relating to section 
1076b; and 
(2) by striking the item relating to section 
1076d and inserting the following: 
‘‘1076d. TRICARE program: TRICARE Standard coverage for members of the 
Selected Reserve.’’. 
(f) SAVINGS PROVISION.—Enrollments in TRICARE 
Standard that are in effect on the day before the date of 
the enactment of this Act under section 1076d of title 10, 
United States Code, as in effect on such day, shall be con-
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tinued until terminated after such day under such section 
1076d as amended by this section. 
(g) EFFECTIVE DATE.—The Secretary of Defense 
shall ensure that health care under TRICARE Standard 
is provided under section 1076d of title 10, United States 
Code, as amended by this section, beginning not later than 
October 1, 2007. 
SEC. 710. EXTENSION TO TRICARE OF MEDICARE PROHIBI-
TION OF FINANCIAL INCENTIVES NOT TO EN-
ROLL IN GROUP HEALTH PLAN. 
(a) IN GENERAL.—Section 1097b of title 10, United 
States Code, is amended by redesignating subsection (c) 
as subsection (d) and by adding the following after sub-
section (b): 
‘‘(c) PROHIBITION OF FINANCIAL INCENTIVES NOT 
TO ENROLL IN A GROUP HEALTH PLAN.—(1) Except as 
provided in this subsection, the provisions of section 
1862(b)(3)(C) of the Social Security Act shall apply with 
respect to financial or other incentives for an individual 
eligible for benefits under section 1086 of this title not 
to enroll (or to terminate enrollment) under a health plan 
which would (in the case of such enrollment) be a primary 
plan under sections 1079(j)(1) and 1086(g) of this title 
in the same manner as such section 1862(b)(3)(C) applies 
to financial or other incentives for an individual entitled 
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HR 5122 PCS 
to benefits under title XVIII of the Social Security Act 
not to enroll (or to terminate enrollment) under a group 
health plan or a large group health plan which would (in 
the case of enrollment) be a primary plan (as defined in 
section 1862(b)(2)(A) of such Act). 
‘‘(2)(A) The Secretary of Defense may by regulation 
adopt such exceptions to the prohibition referenced and 
applied under paragraph (1) as the Secretary deems ap-
propriate and such paragraph (1) shall be implemented 
taking into account the adoption of such exceptions. 
‘‘(B) The Secretary of Defense and the Secretary of 
Health and Human Services are authorized to enter into 
agreements for carrying out this subsection. Any such 
agreement shall provide that any expenses incurred by the 
Secretary of Health and Human Services pertaining to 
carrying out this subsection shall be reimbursed by the 
Secretary of Defense. 
‘‘(C) Authorities of the Inspector General of the De-
partment of Defense shall be available for oversight and 
investigations of responsibilities of employers and other 
entities under this subsection. 
‘‘(D) Information obtained under section 1095(k) of 
this title may be used in carrying out this subsection in 
the same manner as information obtained under section 
1862(b)(5) may be used in carrying out section 1862(b). 
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‘‘(E) Any amounts collected in carrying out para-
graph (1) shall be handled in accordance with section 
1079a of this title. 
‘‘(3) In addition to any penalty applied under the au-
thority of paragraph (1), the Secretary of Defense may 
by regulation provide that repeated violations by an em-
ployer or other entity of the prohibition referenced and 
applied under paragraph (1) are grounds for exclusion of 
the employer or other entity from any contract or sub-
contract to provide goods or services to, or any financial 
assistance from, the Department of Defense.’’. 
(b) CONFORMING AMENDMENT.—Section 1095(k)(5) 
of such title is amended by striking ‘‘and 1086(d)’’ and 
inserting ‘‘, 1086(d), and 1097b(c)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect January 1, 2008. 
Subtitle B—Studies and Reports 
SEC. 711. DEPARTMENT OF DEFENSE TASK FORCE ON THE 
FUTURE OF MILITARY HEALTH CARE. 
(a) REQUIREMENT TO ESTABLISH.—The Secretary 
of Defense shall establish within the Department of De-
fense a task force to examine matters relating to the fu-
ture of military health care. 
(b) COMPOSITION.— 
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(1) MEMBERS.—The task force shall consist of 
not more than 14 members appointed by the Sec-
retary of Defense from among individuals described 
in paragraph (2) who have demonstrated expertise in 
the area of health care programs and costs. 
(2) RANGE OF MEMBERS.—The individuals ap-
pointed to the task force shall include— 
(A) at least one member of each of the 
Medical Departments of the Army, Navy, and 
Air Force; 
(B) a number of persons from outside the 
Department of Defense equal to the total num-
ber of personnel from within the Department of 
Defense (whether members of the Armed 
Forces or civilian personnel) who are appointed 
to the task force; 
(C) persons who have experience in— 
(i) health care actuarial forecasting; 
(ii) health care program development; 
(iii) health care budget management; 
(iv) evidence-based medicine; 
(v) health care performance measure-
ment; 
(vi) health care quality improvement; 
and 
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HR 5122 PCS 
(vii) academic institute research in 
health care services; 
(D) at least one member from the Institute 
of Medicine; 
(E) at least one member from the Defense 
Business Board; and 
(F) at least one representative from a mili-
tary or veterans service organization who has 
experience in health care. 
(3) INDIVIDUALS APPOINTED OUTSIDE THE DE-
PARTMENT OF DEFENSE.— 
(A) Individuals appointed to the task force 
from outside the Department of Defense may 
include officers or employees of other depart-
ments or agencies of the Federal Government, 
officers or employees of State and local govern-
ments, or individuals from the private sector. 
(B) Individuals appointed to the task force 
from outside the Department of Defense shall 
include— 
(i) an officer or employee of the De-
partment of Veterans Affairs; and 
(ii) an officer or employee of the De-
partment of Health and Human Services. 
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HR 5122 PCS 
(4) DEADLINE
FOR
APPOINTMENT.—All ap-
pointments of individuals to the task force shall be 
made not later than 90 days after the date of the 
enactment of this Act. 
(5) CO-CHAIRS OF TASK FORCE.—There shall 
be two co-chairs of the task force. One of the co- 
chairs shall be designated by the Secretary of De-
fense at the time of appointment from among the 
Department of Defense personnel appointed to the 
task force. The other co-chair shall be selected from 
among the members appointed from outside the De-
partment of Defense by members so appointed. 
(c) ASSESSMENT AND RECOMMENDATIONS ON THE 
FUTURE OF MILITARY HEALTH CARE.— 
(1) IN GENERAL.—Not later than 12 months 
after the date on which all members of the task 
force have been appointed, the task force shall sub-
mit to the Secretary a report containing an assess-
ment of, and recommendations for, sustaining the 
military health care services being provided to mem-
bers of the Armed Forces, retirees, and their fami-
lies. 
(2) UTILIZATION OF OTHER EFFORTS.—In pre-
paring the report, the task force shall take into con-
sideration the findings and recommendation included 
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HR 5122 PCS 
in the Healthcare for Military Retirees Task Group 
of the Defense Business Board, previous Govern-
ment Accountability Office reports, studies and re-
views by the Assistant Secretary of Defense for 
Health Affairs, and any other studies or research 
conducted by organizations regarding improvements 
to sustain the military health care system. 
(3) ELEMENTS.—The assessment and rec-
ommendations (including recommendations for legis-
lative or administrative action) shall include meas-
ures to improve the following: 
(A) Wellness initiatives and disease man-
agement programs of the Department of De-
fense, including health risk tracking and the 
use of rewards for wellness. 
(B) Education programs focused on pre-
vention awareness and patient-initiated health 
care. 
(C) The ability to account for the true and 
accurate cost of health care in the military 
health system. 
(D) Alternative health care initiatives to 
manage patient behavior and costs. 
(E) The appropriate command and control 
structure within the Department of Defense 
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HR 5122 PCS 
and the Armed Forces to manage the military 
health system. 
(F) The adequacy of the military health 
care procurement system, including methods to 
streamline existing procurement activities. 
(G) The appropriate mix of military and 
civilian personnel to meet future readiness and 
high-quality health care service requirements. 
(H) The beneficiary and Government cost 
sharing structure required to sustain the mili-
tary health benefits over the long term. 
(I) Programs focused on managing the 
health care needs of Medicare-eligible military 
beneficiaries. 
(J) Efficient and cost effective contracts 
for health care services, including performance- 
based requirements for health care provider re-
imbursement. 
(c) ADMINISTRATIVE MATTERS.— 
(1) COMPENSATION.—Each member of the task 
force who is a member of the Armed Forces or a ci-
vilian officer or employee of the United States shall 
serve without compensation (other than compensa-
tion to which entitled as a member of the Armed 
Forces or an officer or employee of the United 
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HR 5122 PCS 
States, as the case may be). Other members of the 
task force shall be treated for purposes of section 
3161 of title 5, United States Code, as having been 
appointed under subsection (b) of such section. 
(2) OVERSIGHT.—The Under Secretary of De-
fense for Personnel and Readiness shall oversee the 
activities of the task force. 
(3) ADMINISTRATIVE
SUPPORT.—The Wash-
ington Headquarters Services of the Department of 
Defense shall provide the task force with personnel, 
facilities, and other administrative support as nec-
essary for the performance of the duties of the task 
force. 
(4) ACCESS TO FACILITIES.—The Under Sec-
retary of Defense for Personnel and Readiness shall, 
in coordination with the Secretaries of the military 
departments, ensure appropriate access by the task 
force to military installations and facilities for pur-
poses of the discharge of the duties of the task force. 
(e) REPORT.— 
(1) IN GENERAL.—The task force shall submit 
to the Secretary of Defense a report on its activities 
under this section. The report shall include— 
(A) a description of the activities of the 
task force; 
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HR 5122 PCS 
(B) the assessment and recommendations 
required by subsection (c); and 
(C) such other matters relating to the ac-
tivities of the task force that the task force con-
siders appropriate. 
(2) TRANSMITTAL
TO
CONGRESS.—Not later 
than 90 days after receipt of the report under para-
graph (1), the Secretary shall transmit the report to 
the Committees on Armed Services of the Senate 
and the House of Representatives. The Secretary 
may include in the transmittal such comments on 
the report as the Secretary considers appropriate. 
(f) PLAN REQUIRED.—Not later than 6 months after 
receipt of the report from the task force under subsection 
(e)(1), the Secretary of Defense shall develop a plan based 
on the recommendations of the task force and submit the 
plan to the Committees on Armed Services of the Senate 
and the House of Representatives. 
(g) TERMINATION.—The task force shall terminate 
90 days after the date on which the report of the task 
force is submitted to Congress under subsection (e)(2). 
SEC. 712. STUDY AND PLAN RELATING TO CHIROPRACTIC 
HEALTH CARE SERVICES. 
(a) STUDY REQUIRED.— 
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(1) GROUPS COVERED.—The Secretary of De-
fense shall conduct a study of providing chiropractic 
health care services and benefits to the following 
groups: 
(A) All members of the uniformed services 
on active duty and entitled to care under sec-
tion 1074(a) of title 10, United States Code. 
(B) All members described in subpara-
graph (A) and their eligible dependents, and all 
members of reserve components of the uni-
formed services and their eligible dependents. 
(C) All members or former members of the 
uniformed services who are entitled to retired or 
retainer pay or equivalent pay and their eligible 
dependents. 
(2) MATTERS EXAMINED.— 
(A) For each group listed in subpara-
graphs (A), (B), and (C) of paragraph (1), the 
study shall examine the following with respect 
to chiropractic health care services and benefits: 
(i) The cost of providing such services 
and benefits. 
(ii) The feasibility of providing such 
services and benefits. 
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HR 5122 PCS 
(iii) An assessment of the health care 
benefits of providing such services and 
benefits. 
(iv) An estimate of the potential cost 
savings of providing such services and ben-
efits in lieu of other medical services. 
(v) The identification of existing and 
planned health care infrastructure, includ-
ing personnel, equipment, and facilities, to 
accommodate the provision of chiropractic 
health care services. 
(B) For the members of the group listed in 
subparagraph (A) of paragraph (1), the study 
shall examine the effects of providing chiro-
practic health care services and benefits— 
(i) on the readiness of such members; 
and 
(ii) on the acceleration of the return 
to duty of such members following an iden-
tified injury or other malady that can be 
appropriately treated with chiropractic 
health care services. 
(3) SPACE AVAILABLE COSTS.—The study shall 
also include a detailed analysis of the projected costs 
of providing chiropractic health care services on a 
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space available basis in the military treatment facili-
ties currently providing chiropractic care under sec-
tion 702 of the Floyd D. Spence National Defense 
Authorization Act of Fiscal Year 2001 (as enacted 
by Public Law 106–398; 10 U.S.C. 1092 note). 
(4) ELIGIBLE DEPENDENTS DEFINED.—In this 
section, the term ‘‘eligible dependent’’ has the mean-
ing given that term in section 1076a(k) of title 10, 
United States Code. 
(b) PLAN REQUIRED.—Not later than March 31, 
2007, the Secretary of Defense shall revise the plan re-
quired under section 702 of the Floyd D. Spence National 
Defense Authorization Act of Fiscal Year 2001 (as en-
acted by Public Law 106–398; 10 U.S.C. 1092 note), in-
cluding a detailed analysis of the projected costs, to pro-
vide chiropractic health care services and benefits as a per-
manent part of the Defense Health Program (including 
the TRICARE program) as required under that section. 
(c) REPORT REQUIRED.—Not later than March 31, 
2007, the Secretary of Defense shall submit a report on 
the study required under subsection (a), together with the 
plan required under subsection (b), to the Committees on 
Armed Services of the Senate and the House of Represent-
atives. 
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HR 5122 PCS 
SEC. 713. COMPTROLLER GENERAL STUDY AND REPORT ON 
DEFENSE HEALTH PROGRAM. 
(a) STUDY REQUIRED.—The Comptroller General, in 
cooperation with the Congressional Budget Office, shall 
conduct a study of the projected cost savings to the De-
fense Health Program included in the fiscal year 2007 
budget request. 
(b) ELEMENTS.—The study required by subsection 
(a) shall include the following: 
(1) An evaluation of the rationale for calcula-
tions made by the Department of Defense for the 
portion of total health care costs paid by bene-
ficiaries in 1995 and in 2005, including issues such 
as— 
(A) the rationale for the Department’s 
stated costs of providing the benefit in 1995 
and in 2005; 
(B) the basis for the Department’s calcula-
tions of increases in cost between 1995 and 
2005; and 
(C) the amounts paid by beneficiaries for 
health care in 1995 and 2005. 
(2) An evaluation of the rationale for calcula-
tions and assumptions made by the Department of 
Defense for the estimated savings associated with 
the implementation of its cost share increases. 
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HR 5122 PCS 
(3) A review of the annual rate of medical infla-
tion of the Department of Defense and how it com-
pares with the annual rates of increase in health 
care premiums in the Federal Employee Health 
Benefit Program and other health care programs as 
well as other health care indexes for the past 5 
years. 
(4) An assessment of the rationale for the cost 
share increase amounts made by the Department of 
Defense. 
(c) INDEPENDENT EXPERTS.—To ensure the avail-
ability of appropriate expertise in addressing the elements 
of the study required under this section, the Comptroller 
General may use independent experts, such as actuaries, 
if needed. 
(d) REPORT.—The Comptroller General shall submit 
to the Committees on Armed Services of the Senate and 
the House of Representatives a report on the study re-
quired by subsection (a) not later than June 1, 2007. 
SEC. 714. TRANSFER OF CUSTODY OF THE AIR FORCE 
HEALTH STUDY ASSETS TO MEDICAL FOL-
LOW-UP AGENCY. 
(a) TRANSFER.— 
(1) NOTIFICATION
OF
PARTICIPANTS.—The 
Secretary of the Air Force shall notify the partici-
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HR 5122 PCS 
pants of the Air Force Health Study that the study 
as currently constituted is ending as of September 
30, 2006. In consultation with the Medical Follow- 
up Agency (in this section referred to as the ‘‘Agen-
cy’’) of the Institute of Medicine of the National 
Academy of Sciences, the Secretary of the Air Force 
shall request the written consent of the participants 
to transfer their data and biological specimens to the 
Agency during fiscal year 2007 and written consent 
for the Agency to maintain the data and specimens 
and make them available for additional studies. 
(2) COMPLETION
OF
TRANSFER.—Custodian-
ship of the Air Force Health Study shall be com-
pletely transferred to the Agency on or before Sep-
tember 30, 2007. Assets to be transferred shall in-
clude electronic data files and biological specimens of 
all the study participants. 
(3) COPIES TO ARCHIVES.—The Air Force shall 
send paper copies of all study documents to the Na-
tional Archives. 
(b) REPORT ON TRANSFER.— 
(1) REQUIREMENT.—Not later than 30 days 
after completion of the transfer of the assets of the 
Air Force Health Study under subsection (a), the 
Secretary of the Air Force shall submit to the Com-
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HR 5122 PCS 
mittees on Armed Services of the Senate and the 
House of Representatives a report on the transfer. 
(2) MATTERS COVERED.—At a minimum, the 
report shall include information on the number of 
study participants whose data and biological speci-
mens were not transferred, the efforts that were 
taken to contact such participants, and the reasons 
why the transfer of their data and specimens did not 
occur. 
(c) DISPOSITION OF ASSETS NOT TRANSFERRED.— 
The Secretary of the Air Force may not destroy any data 
or biological specimens not transferred under subsection 
(a) until the expiration of the one-year period following 
submission of the report under subsection (b). 
(d) FUNDING.— 
(1) COSTS
OF
TRANSFER.—The Secretary of 
Defense shall make available to the Air Force 
$850,000 for preparation, transfer of the assets of 
the Air Force Health Study and shipment of data 
and specimens to the Medical Follow-up Agency and 
the National Archives during fiscal year 2007 from 
amounts available from the Department of Defense 
for that year. The Secretary of Defense is author-
ized to transfer the freezers and other physical as-
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HR 5122 PCS 
sets assigned to the Air Force Health Study to the 
Agency without charge. 
(2) COSTS OF COLLABORATION.—The Secretary 
of Defense may reimburse the National Academy of 
Sciences up to $200,000 for costs of the Medical 
Follow-up Agency to collaborate with the Air Force 
in the transfer and receipt of the assets of the Air 
Force Health Study to the Agency during fiscal year 
2007 from amounts available from the Department 
of Defense for that year. 
SEC. 715. STUDY ON ALLOWING DEPENDENTS OF ACTI-
VATED MEMBERS OF RESERVE COMPONENTS 
TO RETAIN CIVILIAN HEALTH CARE COV-
ERAGE. 
(a) STUDY REQUIREMENT.—The Secretary of De-
fense shall conduct a study on the feasibility of allowing 
family members of members of the Reserve Components 
who are called or ordered to active duty to continue health 
care coverage under a civilian health care program and 
provide reimbursement for such health care. 
(b) ELEMENTS.—The study required by subsection 
(a) shall include the following: 
(1) An assessment of the number of military 
dependents with special health care needs (such as 
ongoing chemotherapy or physical therapy) who 
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would benefit from continued coverage under the 
member’s civilian health care plan instead of enroll-
ing in the TRICARE program. 
(2) An assessment of the feasibility of providing 
reimbursement to the member or the sponsor of the 
civilian health coverage. 
(3) A recommendation on the appropriate rate 
of reimbursement for civilian employers or members. 
(4) The feasibility of including dependents who 
do not have access to health care providers that ac-
cept payment under the TRICARE program (such 
as those in rural areas). 
(c) REPORT REQUIRED.—Not later than 180 days 
after the date of the enactment of this Act, the Secretary 
of Defense shall submit to the Committees on Armed Serv-
ices of the Senate and the House of Representatives a re-
port on the study required under subsection (a). 
SEC. 716. STUDY OF HEALTH EFFECTS OF EXPOSURE TO 
DEPLETED URANIUM. 
(a) STUDY.—The Secretary of Defense, in consulta-
tion with the Secretary for Veterans Affairs and the Sec-
retary of Health and Human Services, shall conduct a 
comprehensive study of the health effects of exposure to 
depleted uranium munitions on uranium-exposed soldiers 
and on children of uranium-exposed soldiers who were 
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born after the exposure of the uranium-exposed soldiers 
to depleted uranium. 
(b) URANIUM-EXPOSED SOLDIERS.—In this section, 
the term ‘‘uranium-exposed soldiers’’ means a member or 
former member of the Armed Forces who handled, came 
in contact with, or had the likelihood of contact with de-
pleted uranium munitions while on active duty, including 
members and former members who— 
(1) were exposed to smoke from fires resulting 
from the burning of vehicles containing depleted ura-
nium munitions or fires at depots at which depleted 
uranium munitions were stored; 
(2) worked within environments containing de-
pleted uranium dust or residues from depleted ura-
nium munitions; 
(3) were within a structure or vehicle while it 
was struck by a depleted uranium munition; 
(4) climbed on or entered equipment or struc-
tures struck by a depleted uranium munition; or 
(5) were medical personnel who provided initial 
treatment to members of the Armed Forces de-
scribed in paragraph (1), (2), (3), or (4). 
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Subtitle C—Other Matters 
SEC. 721. COSTS OF INCENTIVE PAYMENTS TO EMPLOYEES 
FOR TRICARE ENROLLMENT MADE UNAL-
LOWABLE FOR CONTRACTORS. 
(a) DEFENSE CONTRACTS.—Section 2324(e)(1) of 
title 10, United States Code, is amended by adding at the 
end the following new subparagraph: 
‘‘(Q) Costs incurred by a contractor for incen-
tive payments to employees to encourage enrollment 
in the TRICARE program under chapter 55 of this 
title or any other Government-sponsored health care 
program, except that this subparagraph does not 
apply to such costs incurred by a contractor per-
forming a contract to which any of the following ap-
plies: 
‘‘(i) The Services Contract Act of 1965 (41 
U.S.C. 351 et seq.). 
‘‘(ii) Any other law or labor agreement 
that requires a company to compensate its em-
ployees for health care whether or not the em-
ployee participates in a company health plan.’’. 
(b) 
CIVILIAN
AGENCY
CONTRACTS.—Section 
306(e)(1) of the Federal Property and Administrative 
Services Act of 1949 (41 U.S.C. 256(e)(1)) is amended 
by adding at the end the following new subparagraph: 
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‘‘(P) Costs incurred by a contractor for incen-
tive payments to employees to encourage enrollment 
in the TRICARE program under chapter 55 of title 
10, United States Code, or any other Government- 
sponsored health care program, except that this sub-
paragraph does not apply to such costs incurred by 
a contractor performing a contract to which any of 
the following applies: 
‘‘(i) The Services Contract Act of 1965 (41 
U.S.C. 351 et seq.). 
‘‘(ii) Any other law or labor agreement 
that requires a company to compensate its em-
ployees for health care whether or not the em-
ployee participates in a company health plan.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to contracts entered 
into after the date occurring 180 days after the date of 
the enactment of this Act. 
SEC. 722. REQUIREMENT FOR MILITARY MEDICAL PER-
SONNEL TO BE TRAINED IN PRESERVATION 
OF REMAINS. 
(a) REQUIREMENT.—The Secretary of Defense shall 
develop a program requiring each military department to 
include training in the preservation of remains for health 
care professionals under the department’s jurisdiction. 
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The training shall be provided before a health care profes-
sional is deployed into a theater of operation and periodi-
cally thereafter as determined necessary for refresher 
training. 
(b) MATTERS COVERED BY TRAINING.—The training 
shall include, at a minimum— 
(1) best practices and procedures for the pres-
ervation of the remains of a member of the Armed 
Forces after death, taking into account the needs, 
sensitivities, and potential wishes of the family of 
the decedent, including the return of the remains to 
the family in the best possible condition; and 
(2) practical case studies to illustrate the objec-
tives of paragraph (1) and provide a real world per-
spective. 
(c) HEALTH CARE PROFESSIONAL.—In this section, 
the term ‘‘health care professional’’ means a physician, 
dentist, clinical psychologist, nurse, nurse practitioner, or 
physician assistant and any other person providing direct 
patient care as may be designated by the Secretary of De-
fense in regulations. 
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Subtitle D—Pharmacy Benefits 
Program Improvements 
SEC. 731. TRICARE PHARMACY PROGRAM COST-SHARE RE-
QUIREMENTS. 
Paragraph (6) of section 1074g(a) of title 10, United 
States Code, is amended to read as follows: 
‘‘(6)(A) The Secretary, in regulations prescribed 
under subsection (g), may establish cost-sharing require-
ments (which may be established as a percentage or fixed 
dollar amount) under the pharmacy benefits program for 
generic, formulary, and nonformulary agents. 
‘‘(B)(i) With respect to agents available through the 
national mail-order pharmacy program, the Secretary of 
Defense may not establish requirements for cost sharing 
for generic and formulary agents that are in excess of cost 
sharing requirements for generic and formulary agents 
available through facilities of the uniformed services. 
‘‘(ii) With respect to agents available through retail 
pharmacies, the Secretary of Defense may not establish 
cost sharing in excess of— 
‘‘(I) $6 for generic agents; 
‘‘(II) $16 for formulary agents; and 
‘‘(III) $22 for nonformulary agents. 
‘‘(iii) The cost sharing requirements of this subpara-
graph shall be in effect during the period beginning 90 
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days after the date of the enactment of the National De-
fense Authorization Act for Fiscal Year 2007 and ending 
on December 31, 2007.’’. 
TITLE VIII—ACQUISITION POL-
ICY, ACQUISITION MANAGE-
MENT, AND RELATED MAT-
TERS 
Subtitle A—Provisions Relating to Major Defense Acquisition Programs 
Sec. 801. Requirements Management Certification Training Program. 
Sec. 802. Additional requirements relating to technical data rights. 
Sec. 803. Study and report on revisions to Selected Acquisition Report require-
ments. 
Sec. 804. Quarterly updates on implementation of acquisition reform in the De-
partment of Defense. 
Sec. 805. Establishment of defense challenge process for critical cost growth 
threshold breaches in major defense acquisition programs. 
Sec. 806. Market research required for major defense acquisition programs be-
fore proceeding to Milestone B. 
Subtitle B—Acquisition Policy and Management 
Sec. 811. Applicability of statutory executive compensation cap made prospec-
tive. 
Sec. 812. Prohibition on procurement from beneficiaries of foreign subsidies. 
Sec. 813. Time-certain development for Department of Defense information 
technology business systems. 
Sec. 814. Establishment of Panel on Contracting Integrity. 
Sec. 815. Award and incentive fee contract standards. 
Sec. 816. Oversight and accountability of contractor personnel. 
Subtitle C—Amendments to General Contracting Authorities, Procedures, and 
Limitations 
Sec. 821. Extension of special temporary contract closeout authority. 
Sec. 822. Limitation on contracts for the acquisition of certain services. 
Sec. 823. Use of Federal supply schedules by State and local governments for 
goods and services for recovery from natural disasters, ter-
rorism, or nuclear, biological, chemical, or radiological attack. 
Sec. 824. Waivers to extend task order contracts for advisory and assistance 
services. 
Sec. 825. Enhanced access for small business. 
Sec. 826. Procurement goal for Hispanic-serving institutions. 
Sec. 827. Prohibition on defense contractors requiring licenses or fees for use 
of military likenesses and designations. 
Subtitle D—United States Defense Industrial Base Provisions 
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Sec. 831. Protection of strategic materials critical to national security. 
Sec. 832. Strategic Materials Protection Board. 
Subtitle A—Provisions Relating to 
Major Defense Acquisition Pro-
grams 
SEC. 801. REQUIREMENTS MANAGEMENT CERTIFICATION 
TRAINING PROGRAM. 
(a) TRAINING PROGRAM.— 
(1) REQUIREMENT.—The Under Secretary of 
Defense for Acquisition, Technology, and Logistics, 
in consultation with the Defense Acquisition Univer-
sity, shall develop a training program to certify civil-
ian and military personnel of the Department of De-
fense with responsibility for generating requirements 
for major defense acquisition programs (as defined 
in section 2430 of title 10, United States Code). 
(2) 
COMPETENCY
AND
OTHER
REQUIRE-
MENTS.—The Under Secretary shall establish com-
petency requirements for the personnel undergoing 
the training program. The Under Secretary shall de-
fine the target population for such training program 
by identifying which civilian and military personnel 
should have responsibility for generating require-
ments. The Under Secretary also may establish 
other training programs for personnel not subject to 
chapter 87 of title 10, United States Code, and who 
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contribute significantly to other types of acquisitions 
by the Department of Defense. 
(3) MATTERS COVERED.—At a minimum, the 
training program shall, with respect to a major de-
fense acquisition program— 
(A) provide instruction on the inter-
relationship among the requirements generation 
process, the budget process, and the acquisition 
process within the Department of Defense for 
such a program; 
(B) stress the importance of generating re-
quirements for such a program that result in 
joint applications to the maximum extent pos-
sible; 
(C) provide instruction on the effects of in-
troducing new requirements for such a pro-
gram— 
(i) both before and after the com-
mencement of system development and 
demonstration; and 
(ii) during initial operational test and 
evaluation; 
(D) ensure that requirements for such a 
program are derived primarily from capability 
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shortfalls in the program identified by a com-
mander of a combatant command; 
(E) ensure that requirements for such a 
program are informed by a sound analysis of al-
ternatives, by realistic technical assessments 
based on technology readiness levels, and by fis-
cal guidance, including consultation with pro-
duction engineers on the cost, schedule and 
technical feasibility of the requirements; 
(F) ensure that, for the introduction of 
any changes to requirements for such a pro-
gram, an engineering feasibility assessment that 
weighs technology readiness, integration, cost, 
and schedule impacts is conducted after Mile-
stone B approval at the latest, and before Mile-
stone B approval to the maximum extent prac-
ticable; 
(G) stress the importance of introducing 
requirements for such a program that are tech-
nologically mature, feasible, and achievable 
without schedule risk; and 
(H) stress the importance of stable re-
quirements for such a program to provide the 
baseline for successful execution of the pro-
gram. 
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(4) AVAILABILITY.—The training program shall 
be made available on the Internet to ensure the 
widest dissemination possible. 
(b) APPLICABILITY.—Effective on and after Sep-
tember 30, 2007, a member of the Armed Forces or an 
employee of the Department of Defense with authority to 
generate requirements for a major defense acquisition pro-
gram may not continue to participate in the requirements 
generation process unless the member or employee suc-
cessfully completes the certification training program de-
veloped under this section. 
SEC. 802. ADDITIONAL REQUIREMENTS RELATING TO 
TECHNICAL DATA RIGHTS. 
(a) ADDITIONAL
REQUIREMENTS
RELATING
TO 
TECHNICAL DATA RIGHTS .—Section 2320 of title 10, 
United States Code, is amended by adding at the end the 
following new subsection: 
‘‘(e) ADDITIONAL REGULATIONS.—(1) Regulations 
prescribed under subsection (a) shall ensure, at a min-
imum, that— 
‘‘(A) in the case of a major system that is de-
veloped exclusively with Federal funds, in part with 
Federal funds and in part at private expense, or ex-
clusively at private expense, rights are acquired in 
full by the United States to technical data necessary 
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to support competition for contracts required for 
sustainment of the system; and 
‘‘(B) any contract for a major system includes 
price and delivery options for acquiring, at any point 
during the life cycle of the system, major elements 
of technical data not acquired at the time of initial 
contract award. 
‘‘(2) Regulations prescribed under subsection (a) also 
shall establish a standard for acquiring rights in technical 
data that supports the purchase of data rights appropriate 
to minimize life cycle costs. 
‘‘(3) The Under Secretary of Defense for Acquisition, 
Technology, and Logistics shall ensure that members of 
the acquisition workforce working with any contract in an 
amount greater than $5,000,000 and involving the acqui-
sition of rights in technical data be provided information 
and formal training sufficient to carry out the regulations 
prescribed under subsection (a) to implement this sub-
section.’’. 
(b) REGULATIONS.—Not later than 180 days after 
the date of the enactment of this Act, the Secretary of 
Defense shall revise regulations under section 2320 of title 
10, United States Code, to implement subsection (e) of 
such section (as added by this section). 
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SEC. 803. STUDY AND REPORT ON REVISIONS TO SELECTED 
ACQUISITION REPORT REQUIREMENTS. 
(a) STUDY REQUIREMENT.—The Secretary of De-
fense, acting through the Under Secretary of Defense for 
Acquisition, Technology, and Logistics in coordination 
with the service acquisition executives of each military de-
partment, shall conduct a study on revisions to require-
ments relating to Selected Acquisition Reports, as set 
forth in section 2432 of title 10, United States Code. 
(b) MATTERS COVERED.—The study required under 
subsection (a) shall— 
(1) focus on incorporating into the Selected Ac-
quisition Report those elements of program progress 
that the Department of Defense considers most rel-
evant to evaluating the performance and progress of 
major defense acquisition programs, with particular 
reference to the cost estimates and program sched-
ule established when a major defense acquisition 
program receives Milestone B approval; and 
(2) include any recommendations to eliminate 
elements of the Selected Acquisition Report that the 
Department believes are no longer needed (other 
than the elimination of any unit cost information). 
(c) REPORT.—Not later than March 1, 2007, the 
Secretary shall submit to the Committees on Armed Serv-
ices of the Senate and the House of Representatives a re-
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port on the results of the study, including such rec-
ommendations as the Secretary considers appropriate. 
SEC. 804. QUARTERLY UPDATES ON IMPLEMENTATION OF 
ACQUISITION REFORM IN THE DEPARTMENT 
OF DEFENSE. 
(a) QUARTERLY
UPDATES
REQUIREMENT.—Not 
later than 45 days after the date of the enactment of this 
Act, and on the first day of each calendar quarter there-
after, the Secretary of Defense shall provide an update 
to the Committees on Armed Services of the Senate and 
the House of Representatives on the implementation of 
plans to reform the acquisition system in the Department 
of Defense. 
(b) MATTERS
COVERED.—Each update provided 
under subsection (a) shall cover the implementation of re-
forms of the processes for acquisition, including genera-
tion of requirements, award of contracts, and financial 
management. At a minimum, the updates shall take into 
account the recommendations made by the following: 
(1) The Defense Acquisition Performance As-
sessment Panel. 
(2) The Defense Science Board Summer Study 
on Transformation, issued in February 2006. 
(3) The Beyond Goldwater-Nichols Study of the 
Center for Strategic and International Studies. 
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