‘‘(2) The Director shall consult closely with, but the 
Director and the Director’s staff shall be independent of, 
the Under Secretary of Defense for Acquisition, Tech-
nology, and Logistics, the Under Secretary of Defense 
(Comptroller), and all other officers and entities of the De-
partment of Defense responsible for acquisition and budg-
eting. 
‘‘(d)(1) The Secretary of a military department shall 
report promptly to the Director the results of all cost esti-
mates and cost analyses conducted by the military depart-
ment and all studies conducted by the military department 
in connection with cost estimates and cost analyses for 
major defense acquisition programs of the military depart-
ment. 
‘‘(2) The Director may make comments on cost esti-
mates and cost analyses conducted by a military depart-
ment for a major defense acquisition program, request 
changes in such cost estimates and cost analyses to ensure 
that they are fair and reliable, and develop or require the 
development of independent cost estimates or cost anal-
yses for such program, as the Director determines to be 
appropriate. 
‘‘(3) The Director shall have access to any records 
and data in the Department of Defense (including the 
records and data of each military department) that the 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
Director considers necessary to review in order to carry 
out the Director’s duties under this section. 
‘‘(e)(1) The Director shall prepare an annual report 
summarizing the cost estimation and cost analysis activi-
ties of the Department of Defense during the previous 
year and assessing the progress of the Department in im-
proving the accuracy of its costs estimates and analyses. 
‘‘(2) Each report under this subsection shall be sub-
mitted concurrently to the Secretary of Defense, the 
Under Secretary of Defense for Acquisition, Technology, 
and Logistics, the Under Secretary of Defense (Comp-
troller), and Congress not later than 10 days after the 
transmission of the budget for the next fiscal year under 
section 1105 of title 31. The Director shall ensure that 
a report submitted under this subsection does not include 
any information, such as proprietary or source selection 
sensitive information, that could undermine the integrity 
of the acquisition process. 
‘‘(3) The Secretary may comment on any report of 
the Director to Congress under this subsection. 
‘‘(f) The President shall include in the budget trans-
mitted to Congress pursuant to section 1105 of title 31 
for each fiscal year a separate statement of estimated ex-
penditures and proposed appropriations for that fiscal 
year for the Director of Independent Cost Assessment in 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
carrying out the duties and responsibilities of the Director 
under this section. 
‘‘(g) The Secretary of Defense shall ensure that the 
Director has sufficient professional staff of military and 
civilian personnel to enable the Director to carry out the 
duties and responsibilities of the Director under this sec-
tion.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 4 of such title, as 
so amended, is further amended by inserting after 
the item relating to section 139c the following new 
item: 
‘‘139d. Director of Independent Cost Assessment.’’. 
(b) REPORT ON MONITORING OF OPERATING AND 
SUPPORT COSTS FOR MDAPS.— 
(1) REPORT TO SECRETARY OF DEFENSE.—Not 
later than one year after the date of the enactment 
of this Act, the Director of Independent Cost Assess-
ment under section 139d of title 10 United States 
Code (as added by subsection (a)), shall review exist-
ing systems and methods of the Department of De-
fense for tracking and assessing operating and sup-
port costs on major defense acquisition programs 
and submit to the Secretary of Defense a report on 
the finding and recommendations of the Director as 
a result of the review. 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
(2) TRANSMITTAL
TO
CONGRESS.—Not later 
than 30 days after receiving the report required by 
paragraph (1), the Secretary shall transmit the re-
port to the congressional defense committees, to-
gether with any comments on the report the Sec-
retary considers appropriate. 
(c) TRANSFER OF PERSONNEL AND FUNCTIONS OF 
COST ANALYSIS IMPROVEMENT GROUP.—The personnel 
and functions of the Cost Analysis Improvement Group 
of the Department of Defense are hereby transferred to 
the Director of Independent Cost Assessment under sec-
tion 139d of title 10, United States Code (as so added), 
and shall report directly to the Director. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 2306b(i)(1)(B) of title 10, United 
States Code, is amended by striking ‘‘Cost Analysis 
Improvement Group of the Department of Defense’’ 
and inserting ‘‘Director of Independent Cost Assess-
ment’’. 
(2) Section 2366a(a)(4) of such title is amend-
ed by striking ‘‘has been submitted’’ and inserting 
‘‘has been approved by the Director of Independent 
Cost Assessment’’. 
(3) Section 2366b(a)(1)(C) of such title is 
amended by striking ‘‘have been developed to exe-
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
cute’’ and inserting ‘‘have been approved by the Di-
rector of Independent Cost Assessment to provide 
for the execution of’’. 
(4) Section 2433(e)(2)(B)(iii) of such title is 
amended by striking ‘‘are reasonable’’ and inserting 
‘‘have been determined by the Director of Inde-
pendent Cost Assessment to be reasonable’’. 
(5) Subparagraph (A) of section 2434(b)(1) of 
such title is amended to read as follows: 
‘‘(A) be prepared or approved by the Di-
rector of Independent Cost Assessment; and’’. 
(6) Section 2445c(f)(3) of such title is amended 
by striking ‘‘are reasonable’’ and inserting ‘‘have 
been determined by the Director of Independent 
Cost Assessment to be reasonable’’. 
SEC. 105. ROLE OF THE COMMANDERS OF THE COMBATANT 
COMMANDS IN IDENTIFYING JOINT MILITARY 
REQUIREMENTS. 
Section 181(d) of title 10, United States Code, is 
amended— 
(1) by inserting ‘‘(1)’’ before ‘‘The Under Sec-
retary’’; and 
(2) by adding at the end the following new 
paragraph: 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
‘‘(2) The Council shall seek and consider input from 
the commanders of the combatant commands in carrying 
out its mission under paragraphs (1) and (2) of subsection 
(b) and in conducting periodic reviews in accordance with 
the requirements of subsection (e).’’. 
TITLE II—ACQUISITION POLICY 
SEC. 201. CONSIDERATION OF TRADE-OFFS AMONG COST, 
SCHEDULE, AND PERFORMANCE IN THE AC-
QUISITION OF MAJOR WEAPON SYSTEMS. 
(a) CONSIDERATION OF TRADE-OFFS.— 
(1) IN
GENERAL.—The Secretary of Defense 
shall develop and implement mechanisms to ensure 
that trade-offs between cost, schedule, and perform-
ance are considered as part of the process for devel-
oping requirements for major weapon systems. 
(2) ELEMENTS.—The mechanisms required 
under this subsection shall ensure, at a minimum, 
that— 
(A) Department of Defense officials re-
sponsible acquisition, budget, and cost esti-
mating functions are provided an appropriate 
opportunity to develop estimates and raise cost 
and schedule matters before performance re-
quirements are established for major weapon 
systems; and 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
(B) consideration is given to fielding major 
weapon systems through incremental or spiral 
acquisition, while deferring technologies that 
are not yet mature, and capabilities that are 
likely to significantly increase costs or delay 
production, until later increments or spirals. 
(3) MAJOR
WEAPONS
SYSTEM
DEFINED.—In 
this subsection, the term ‘‘major weapon system’’ 
has the meaning given that term in section 2379(d) 
of title 10, United States Code. 
(b) DUTIES OF JOINT REQUIREMENTS OVERSIGHT 
COUNCIL.—Section 181(b)(1) of title 10, United States 
Code, is amended— 
(1) in subparagraph (A), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(C) in ensuring the consideration of 
trade-offs among cost, schedule and perform-
ance for joint military requirements;’’. 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
SEC. 202. PRELIMINARY DESIGN REVIEW FOR MAJOR DE-
FENSE ACQUISITION PROGRAMS. 
Section 2366b(a) of title 10, United States Code, is 
amended— 
(1) in paragraph (1), by striking ‘‘and’’ at the 
end; 
(2) by redesignating paragraph (2) as para-
graph (3); 
(3) by inserting after paragraph (1) the fol-
lowing new paragraph (2): 
‘‘(2) has received a preliminary design review 
(PDR) and conducted a formal post-preliminary de-
sign review assessment, and certifies on the basis of 
such assessment that the program demonstrates a 
high likelihood of accomplishing its intended mis-
sion; and’’; and 
(4) in paragraph (3), as redesignated by para-
graph (2) of this section— 
(A) in subparagraph (D), by striking the 
semicolon and inserting ‘‘, as determined by the 
Milestone Decision Authority on the basis of an 
independent review and assessment by the Di-
rector of Defense Research and Engineering; 
and’’; 
(B) by striking subparagraph (E); and 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
(C) by redesignating subparagraph (F) as 
subparagraph (E). 
SEC. 203. MAXIMIZATION OF COMPETITION THROUGHOUT 
THE LIFE CYCLE OF MAJOR DEFENSE ACQUI-
SITION PROGRAMS. 
(a) MAXIMIZATION
OF COMPETITION.—The Sec-
retary of Defense shall ensure that the acquisition plan 
for each major defense acquisition program includes meas-
ures to maximize competition at both the prime contract 
level and the subcontract level of such program throughout 
the life cycle of such program. 
(b) MEASURES TO MAXIMIZE COMPETITION.—The 
measures to maximize competition utilized for purposes of 
subsection (a) may include, but are not limited to, meas-
ures to achieve the following, where cost-effective: 
(1) Competitive prototyping. 
(2) Dual-sourcing. 
(3) Funding of a second source for interchange-
able, next-generation prototype systems or sub-
systems. 
(4) Utilization of modular, open architectures 
to enable competition for upgrades. 
(5) Periodic competitions for subsystem up-
grades. 
(6) Licensing of additional suppliers. 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
(7) Requirements for Government oversight or 
approval of make or buy decisions to ensure com-
petition at the subsystem level. 
(8) Periodic system or program reviews to ad-
dress long-term competitive effects of program deci-
sions. 
(9) Consideration of competition at the sub-
contract level and in make or buy decisions as a fac-
tor in proposal evaluations. 
(c) COMPETITIVE PROTOTYPING.—The Secretary of 
Defense shall modify the acquisition regulations of the De-
partment of Defense to ensure with respect to competitive 
prototyping for major defense acquisition programs the 
following: 
(1) That the acquisition strategy for each major 
defense acquisition program provides for two or 
more competing teams to produce prototypes before 
Milestone B approval (or Key Decision Point B ap-
proval in the case of a space program) unless the 
milestone decision authority for such program waives 
the requirement on the basis of a determination 
that, but for such waiver, the Department would be 
unable to meet critical national security objectives. 
(2) That if the milestone decision authority 
waives the requirement for prototypes produced by 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS
two or more teams for a major defense acquisition 
program under paragraph (1), the acquisition strat-
egy for the program provides for the production of 
at least one prototype before Milestone B approval 
(or Key Decision Point B approval in the case of a 
space program) unless the milestone decision author-
ity waives such requirement on the basis of a deter-
mination that, but for such waiver, the Department 
would be unable to meet critical national security ob-
jectives. 
(3) That whenever a milestone decision author-
ity authorizes a waiver under paragraph (1) or (2), 
the waiver, the determination upon which the waiver 
is based, and the reasons for the determination are 
submitted in writing to the congressional defense 
committees not later than 30 days after the waiver 
is authorized. 
(d) MAJOR DEFENSE ACQUISITION PROGRAM DE-
FINED.—In this section, the term ‘‘major defense acquisi-
tion program’’ has the meaning given that term in section 
2430 of title 10, United States Code. 
(e) APPLICABILITY.—This section shall apply to any 
acquisition plan for a major defense acquisition program 
that is developed or revised on or after the date that is 
60 days after the date of the enactment of this Act. 
VerDate Nov 24 2008 
03:51 Apr 02, 2009
Jkt 079200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H1830.IH
H1830
rfrederick on PROD1PC67 with BILLS