SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—CONTRACT FORMATION
Subtitle A—Congressional Policy, Definitions, and Applicability
Sec. 101. Congressional defense procurement policy.
Sec. 102. Definitions.
Subtitle B—Competitive Statutes
Sec. 111. Contracts: planning, solicitation, evaluation, and award procedures.
Sec. 112. Kinds of contracts.
Sec. 113. Encouragement of competition and cost savings.
Sec. 114. Advocates for competition.
Sec. 115. Preference for nondevelopmental items.
Subtitle C—Truth in Negotiations Act
Sec. 121. Stabilization of dollar threshold of applicability.
Sec. 122. Exceptions to cost or pricing data requirements.
Sec. 123. Limitation on authority to require a submission not otherwise re-
quired.
Sec. 124. Additional special rules for commercial items.
Sec. 125. Right of United States to examine contractor records.
Sec. 126. Required regulations.
Sec. 127. Consistency of time references.
Sec. 128. Repeal of superseded provision.
Subtitle D—Research and Development
Sec. 131. Delegation of contracting authority.
Sec. 132. Research projects.
Sec. 133. Awards of grants and contracts to colleges and universities: require-
ment of competition.
Sec. 134. Elimination of inflexible terminology regarding coordination and com-
munication of defense research activities.
Sec. 135. Cooperative agreements and other transactions.
Sec. 136. Contracts for research.
Subtitle E—Procurement Protests
Sec. 141. Sense of Congress on single forum for review of contract protests.
Sec. 142. Review of protests; effect on contracts pending decision.
Sec. 143. Decisions on protests.
Sec. 144. Regulations; authority of Comptroller General to verify assertions.
Sec. 145. Nonexclusivity of remedies; matters included in agency record.
Subtitle F—Other Related Statutes
Sec. 151. Delegation.
Sec. 152. Determinations and decisions.
Sec. 153. Undefinitized contractual actions: restrictions.
Sec. 154. Production special tooling and production special test equipment: con-
tract terms and conditions.
Sec. 155. Contracts: regulations for bids.
Sec. 156. Supplies: identification of supplier and sources.
TITLE II—CONTRACT ADMINISTRATION
Sec. 201. Contract payments.
Sec. 202. Cost principles.
Sec. 203. Consolidation and revision of authority to examine records of contrac-
tors.
Sec. 204. Administration of contract provisions relating to price, delivery, and
product quality.
TITLE III—MAJOR SYSTEMS AND COMMERCIAL ACTIVITIES
Subtitle A—Major Systems
Sec. 301. Selected acquisition reports; unit cost reports.
Sec. 302. Unit cost reports.
Sec. 303. Independent cost estimates; operational manpower requirements.
Sec. 304. Enhanced program stability.
Sec. 305. Major programs: competitive prototyping.
Sec. 306. Major programs: competitive alternative sources.
Subtitle B—Testing Statutes
Sec. 311. Repeal of testing requirement for wheeled or tracked vehicles.
Sec. 312. Major systems and munitions programs: survivability and lethality
testing.
Sec. 313. Operational test and evaluation of defense acquisition programs.
Sec. 314. Low-rate initial production of new systems.
Subtitle C—DOD Commercial and Industrial Activities
Sec. 321. Factories and arsenals: manufacture at.
Subtitle D—Industrial Base and Manufacturing Technology Laws
Sec. 331. Policy objectives relating to defense international trade.
Subtitle E—Miscellaneous
Sec. 341. Obligation of funds: limitation.
Sec. 342. Repeal of limitation on length of contracts.
TITLE IV—SMALL PURCHASE PROCEDURES AND SMALL
BUSINESS PROVISIONS
Sec. 401. Use of small purchase procedures for procurements conducted
through Federal acquisition computer network system; imple-
mentation of system.
Sec. 402. Small business reservation.
Sec. 403. Exemptions for contracts not in excess of the small purchase thresh-
old.
Sec. 404. Small business amendments.
Sec. 405. Notification of small business concerns in locality of procuring
agency.
TITLE V—INTELLECTUAL PROPERTY
Sec. 501. Department of Defense acquisition of intellectural property rights.
TITLE VI—STANDARDS OF CONDUCT
Subtitle A—Ethics Provisions
Sec. 601. Amendments to Office of Federal Procurement Policy Act.
Sec. 602. Repeal of superseded and obsolete laws.
Subtitle B—Additional Amendments
Sec. 611. Contracting functions performed by Federal personnel.
Sec. 612. Repeal of executed requirement for study and report.
Sec. 613. Waiting period for significant changes proposed for acquisition regu-
lations.
TITLE VII—DEFENSE TRADE AND COOPERATION
Sec. 701. International cooperative agreements.
Sec. 702. Acquisition, cross-servicing agreements, and standardization.
TITLE VIII—COMMERCIAL ITEM ACQUISITION
Sec. 801. Procurement of commercial and nondevelopmental items.
TITLE IX—EFFECTIVE DATE
Sec. 901. Effective date.
TITLE I—CONTRACT FORMATION
Subtitle A—Congressional Policy,
Definitions, and Applicability
SEC. 101. CONGRESSIONAL DEFENSE PROCUREMENT POL-
ICY.
Section 2301 of title 10, United States Code, is
amended to read as follows:
‘‘§ 2301. Congressional defense procurement policy
‘‘(a) The Congress finds that in order to ensure na-
tional defense preparedness; conserve fiscal resources; en-
hance science and technology, research and development,
and production capability; provide for continued develop-
ment and preservation of an efficient and responsive de-
fense industrial base; and ensure the financial and ethical
integrity of defense procurement programs, it is in the in-
terest of the United States that property and services be
acquired for the Department of Defense in the most time-
ly, economic, and efficient manner consistent with achiev-
ing an optimum balance among efficient processes, full
and open access to the procurement system, and sound
implementation of socioeconomic policies. It is therefore
the policy of Congress that—
‘‘(1) full and open competitive procedures shall
be used by the Department of Defense in accordance
with the requirements of this chapter;
‘‘(2) to the maximum extent practicable, the
Department of Defense shall acquire commercial
items to meet its needs and shall require prime con-
tractors and subcontractors, at all levels, which fur-
nish other than commercial items, to incorporate to
the maximum extent practicable commercial items as
components of items being supplied to the Depart-
ment;
‘‘(3) when commercial items and components
are not available, practicable, or cost effective, the
Department of Defense shall acquire, and shall re-
quire prime contractors and subcontractors to incor-
porate, nondevelopmental items and components to
the maximum extent practicable;
‘‘(4) property and services for the Department
of Defense may be acquired by any kind of contract,
other than cost-plus-a-percentage-of-cost contracts,
but including multiyear contracts, that will promote
the interest of the United States and will provide for
appropriate allocation of risk between the Govern-
ment and the contractor with due regard to the na-
ture of the property or services to be acquired;
‘‘(5) contracts, when appropriate, shall provide
incentives to contractors to improve productivity
through investment in capital facilities, equipment,
flexible manufacturing processes, and advanced and
dual-use technology;
‘‘(6) contracts for advance procurement of com-
ponents, parts, and materials necessary for manufac-
ture or for logistics support of a weapon system
should, if practicable, be entered into in a manner
to achieve economic-lot purchases and more efficient
production rates;
‘‘(7) procurement protests and disputes be fair-
ly and expeditiously resolved through uniform inter-
pretation of relevant laws and regulations;
‘‘(8) the head of an agency shall use advance
procurement planning and market research and de-
velop contract requirements in such a manner as is
necessary to obtain full and open competition with
due regard to the nature of the property or services
to be acquired; but may restrict competitions to sup-
pliers of commercial items to foster accomplishment
of the above objective; and
‘‘(9) the head of an agency shall develop and
maintain an acquisition career management program
to ensure a professional acquisition work force in ac-
cordance with the requirements of chapter 87 of this
title.
‘‘(b) Further, it is the policy of Congress that pro-
curement policies and procedures for the agencies named
in section 2303 of this title shall, in accordance with the
requirements of this title—
‘‘(1) be issued in accordance with and conform
to the requirements of sections 22 and 25 of the Of-
fice of Federal Procurement Policy Act (41 U.S.C.
418b and 421);
‘‘(2) promote and implement the Congressional
policies in subsection (a) of this section and section
2 of the Office of Federal Procurement Policy Act
(41 U.S.C. 401);
‘‘(3) be implemented to support the require-
ments of such agencies in time of war or national
emergency as well as in peacetime;
‘‘(4) promote responsiveness of the procurement
system to agency needs by—
‘‘(A) simplifying and streamlining procure-
ment processes; and
‘‘(B) providing incentives to encourage
contractors to take actions and make rec-
ommendations that would reduce the costs of
property or services to be acquired;
‘‘(5) facilitate the acquisition of commercial
items and commercial components at or based on
commercial market prices, without requiring contrac-
tors to change their business practices; and
‘‘(6) promote the acquisition and use of com-
mercial 
items, 
commercial 
components, 
and
nondevelopmental items by requiring descriptions of
agency requirements, whenever practicable, in terms
of functions to be performed or performance re-
quired.
‘‘(c) Further, it is the policy of Congress that 20 per-
cent of the purchases and contracts entered into under
this chapter be placed with small business concerns.
‘‘(d) It is also the policy of Congress that qualified
nonprofit agencies for the blind or severely handicapped
(as defined in section 2410d(b) of this title) shall be af-
forded the maximum practicable opportunity to provide
approved commodities and services (as defined in such sec-
tion) as subcontractors and suppliers under contracts
awarded by the Department of Defense.’’.
SEC. 102. DEFINITIONS.
Section 2302 of title 10, United States Code, is
amended—
(1) by striking out paragraph (3) and inserting
in lieu thereof the following:
‘‘(3) The terms ‘procurement’, ‘procurement
system’, ‘standards’, ‘full and open competition’, ‘re-
sponsible source’, ‘technical data’, and ‘major sys-
tem’ have the meanings provided such terms by sec-
tion 4 of the Office of Federal Procurement Policy
Act (41 U.S.C. 403).’’;
(2) by striking out paragraph (4) and inserting
in lieu thereof the following:
‘‘(4) The term ‘small purchase threshold’ has
the meaning provided that term by section 4(11) of
the Office of Federal Procurement Policy Act (41
U.S.C. 403(11)).’’;
(3) by striking out paragraph (5) and inserting
in lieu thereof the following:
‘‘(5) The term ‘nondevelopmental item’ means
any item of supply that is not a commercial item but
which is—
‘‘(A) previously developed and in use by a
department or agency of the United States, a
State or local government, or a foreign govern-
ment with which the United States has a mu-
tual defense cooperation agreement;
‘‘(B) previously developed and requires
only minor modification in order to meet the re-
quirements of the procuring agency; or
‘‘(C) currently being produced but not yet
in use.’’; and
(4) by striking out paragraph (7) and inserting
in lieu thereof the following:
‘‘(7)(A) The term ‘commercial item’ means—
‘‘(i) property other than real property, or
a combination of such property and related inci-
dental services of the type customarily com-
bined and sold, leased, or licensed in combina-
tion, that—
‘‘(I) has been sold, leased, or licensed
to the general public;
‘‘(II) has not been sold, leased, or li-
censed to the general public, but has been
offered for sale, lease, or license to the
general public; or
‘‘(III) is not yet available in the com-
mercial marketplace, but will be available
for commercial delivery in a reasonable pe-
riod of time; and
‘‘(ii) services used to support property and
combinations of property and services described
in clause (i), whether such services are procured
with the property or combination of property
and services or under separate contract, if such
services are or will be offered contempora-
neously to the general public under similar
terms and conditions.
‘‘(B) With respect to a specific solicitation, an
item meeting the criteria set forth in subparagraph
(A) if unmodified will be deemed to be a commercial
item when modified for sale to the Government if
the modifications required to meet Government re-
quirements—
‘‘(i) are modifications of the type cus-
tomarily provided in the commercial market-
place; or
‘‘(ii) would not significantly alter the non-
governmental function or purpose of the item in
order to meet the requirements or specifications
of the procuring agency.’’.
Subtitle B—Competitive Statutes
SEC. 111. CONTRACTS: PLANNING, SOLICITATION, EVALUA-
TION, AND AWARD PROCEDURES.
Section 2305 of title 10, United States Code, is
amended—
(1) in subsection (a)(2), by striking out ‘‘(other
than for small purchases)’’ in the first sentence and
inserting in lieu thereof ‘‘(estimated to be in excess
of the small purchase threshold)’’;
(2) in subsection (a), by redesignating para-
graph (3) as paragraph (4);
(3) in subsection (a), by adding after paragraph
(2) the following new paragraph (3):
‘‘(3) The head of an agency, in issuing a solicitation
for a contract to be awarded using sealed bid procedures,
shall not include in such solicitation a clause providing for
the evaluation of prices under the contract for options to
purchase additional supplies or services under the contract
unless the head of the agency has determined that there
is a reasonable likelihood that the options will be exer-
cised.’’;
(4) by adding at the end of subsection
(b)(4)(B) the following: ‘‘The regulations implement-
ing this chapter shall—
‘‘(i) establish the criteria for determining
whether an unsuccessful offeror is entitled to a de-
briefing;
‘‘(ii) provide that any required debriefing shall
be conducted to the maximum extent practicable
within 15 calendar days after the date of award; and
‘‘(iii) provide that any required debriefing con-
tain information on the strengths and weaknesses of
that offeror’s proposal.’’; and
(5) in subsection (b), by redesignating para-
graph (5) as paragraph (7) and inserting after para-
graph (4) the following new paragraphs:
‘‘(5) Where a protest is filed pursuant to the proce-
dures in subchapter V of chapter 35 of title 31, United
States Code (31 U.S.C. 3551 et seq.) and where an actual
or prospective offeror so requests, a file of the protest shall
be established by the contracting activity and reasonable
access shall be provided to actual or prospective offerors.
This file should contain such information as would ordi-
narily be releasable under the section 552 of title 5, Unit-
ed States Code (commonly referred to as the ‘Freedom
of Information Act’).
‘‘(6) If a protest is filed and if the head of the agency
determines that a solicitation, proposed award, or award
does not comply with a statute or regulation, the head of
the agency may take any action which the agency is au-
thorized to take under subparagraphs (A) through (F) of
section 3554(b)(1) of title 31, United States Code.’’.
SEC. 112. KINDS OF CONTRACTS.
Section 2306 of title 10, United States Code, is
amended—
(1) by striking out the first sentence of sub-
section (b) and inserting in lieu thereof the follow-
ing: ‘‘Each contract in an amount in excess of the
small purchase threshold awarded under this chapter
after using noncompetitive procedures shall contain
a warranty that the contractor has employed or re-
tained no person or selling agency to solicit or obtain
the contract under an understanding or agreement
for a commission, percentage, brokerage, or contin-
gent fee, except a bona fide employee or established
commercial or selling agency maintained by the con-
tractor to obtain business.’’;
(2) by striking out subsections (c), (d), and (f);
(3) by redesignating subsection (e) as sub-
section (c); and
(4) by redesignating subsections (g) and (h) as
subsections (d) and (e), respectively.
SEC. 113. ENCOURAGEMENT OF COMPETITION AND COST
SAVINGS.
(a) REPEAL.—Section 2317 of title 10, United States
Code, is hereby repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 137 of such title is amended
by striking out the item relating to section 2317.
SEC. 114. ADVOCATES FOR COMPETITION.
Section 2318 of title 10, United States Code, is
amended by striking out subsection (c).
SEC. 115. PREFERENCE FOR NONDEVELOPMENTAL ITEMS.
(a) REPEAL.—Section 2325 of title 10, United States
Code, is hereby repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 137 of such title is amended
by striking out the item relating to section 2325.
Subtitle C—Truth in Negotiations
Act
SEC. 121. STABILIZATION OF DOLLAR THRESHOLD OF AP-
PLICABILITY.
Section 2306a(a)(1)(A) of title 10, United States
Code, is amended—
(1) in clause (i), by striking out ‘‘and before
January 1, 1996,’’; and
(2) in clause (ii), by striking out ‘‘or after De-
cember 31, 1995,’’.
SEC. 122. EXCEPTIONS TO COST OR PRICING DATA RE-
QUIREMENTS.
Section 2306a(b) of title 10, United States Code, is
amended to read as follows:
‘‘(b) EXCEPTIONS.—(1) This section need not be ap-
plied to a contract or subcontract—
‘‘(A) for which the price agreed upon is based
on—
‘‘(i) adequate price competition;
‘‘(ii) established catalog or market prices
of commercial items or of services regularly
used for other than Government purposes, as
the case may be, that are sold in substantial
quantities to the general public; or
‘‘(iii) prices set by law or regulation; or
‘‘(B) in an exceptional case when the head of
the agency determines that the requirements of this
section may be waived and states in writing the rea-
sons for such determination.
‘‘(2) This section need not be applied to a modifica-
tion of a contract or subcontract if—
‘‘(A) the contract or subcontract being modified
is one to which this section need not be applied by
reason of clause (i) or (ii) of paragraph (1)(A); and
‘‘(B) the modification would not change the
contract or subcontract, as the case may be, from a
contract or subcontract for the acquisition of a com-
mercial item to a contract or subcontract for the ac-
quisition of a noncommercial item.’’.
SEC. 123. LIMITATION ON AUTHORITY TO REQUIRE A SUB-
MISSION NOT OTHERWISE REQUIRED.
Section 2306a(c) of title 10, United States Code, is
amended by striking out ‘‘by subsection (a), such data
may nevertheless be required to be submitted by the head
of the agency if’’ and inserting in lieu thereof ‘‘by reason
of subsection (b), submission of such data may not be re-
quired unless’’.
SEC. 124. ADDITIONAL SPECIAL RULES FOR COMMERCIAL
ITEMS.
Section 2306a of title 10, United States Code, is
amended—
(1) by redesignating subsections (d), (e), (f),
and (g) as subsections (e), (f), (g), and (i), respec-
tively; and
(2) by inserting after subsection (c) the follow-
ing new subsection (d):
‘‘(d) ADDITIONAL EXCEPTION REGARDING COMMER-
CIAL ITEMS.—(1) To the maximum extent practicable, the
head of an agency shall—
‘‘(A) conduct procurements of commercial items
on a competitive basis; and
‘‘(B) exercise the authority provided in sub-
section (b)(1)(A) to exempt the contracts and sub-
contracts under such procurements from the require-
ments of subsection (a).
‘‘(2) In any case in which it is not practicable to con-
duct a procurement of a commercial item on a competitive
basis and the procurement is not covered by an exception
in subsection (b), the contracting officer shall nonetheless
exempt a contract or subcontract under the procurement
from the requirements of subsection (a) if—
‘‘(A) in accordance with regulations implement-
ing this paragraph, the offeror, contractor, or sub-
contractor, as the case may be, provides the con-
tracting officer with information on the price
charged by such offeror, contractor, or subcontractor
for the same or similar products in the commercial
marketplace; and
‘‘(B) the contracting officer determines in writ-
ing that the information provided is adequate for
evaluating the reasonableness of the price of the con-
tract or subcontract.
‘‘(3)(A) The Government shall be entitled to a reduc-
tion in price and the return of any overpayment, with in-
terest, if an offeror, contractor, or subcontractor provides
materially inaccurate or misleading information to the
contracting officer pursuant to paragraph (2).
‘‘(B) Nothing in subparagraph (A) is intended to pre-
clude the head of an agency from negotiating any contract
clause that provides additional price adjustment authority
for the protection of the Government’s interest in specific
types of contracts, including multiple ordering agree-
ments.
‘‘(4)(A) The head of an agency shall have the right
to examine all information provided by an offeror, contrac-
tor, or subcontractor pursuant to paragraph (2) and all
books and records of such offeror, contractor, or sub-
contractor that directly relate to the information provided
in order to determine whether such information is materi-
ally inaccurate or misleading.
‘‘(B) The right under subparagraph (A) shall expire
1 year after the date of award of the contract, or 1 year
after the date of the modification of the contract, with
respect to which the information was provided.’’.
SEC. 125. RIGHT OF UNITED STATES TO EXAMINE CON-
TRACTOR RECORDS.
Section 2306a of title 10, United States Code, is
amended by striking out subsection (g), as redesignated
by section 124(1), and inserting in lieu thereof the follow-
ing:
‘‘(g) RIGHT OF UNITED STATES TO EXAMINE CON-
TRACTOR RECORDS.—For the purpose of evaluating the
accuracy, completeness, and currency of cost or pricing
data required to be submitted by this section, the head
of an agency shall have the rights provided by section
2313 of this title.’’.
SEC. 126. REQUIRED REGULATIONS.
Section 2306a of title 10, United States Code, as
amended by sections 124 and 125, is further amended by
inserting after subsection (g) the following new subsection:
‘‘(h) REQUIRED REGULATIONS.—(1) The Secretary
of Defense shall prescribe regulations identifying the type
of procurements for which contracting officers should con-
sider requiring the submission of certified cost or pricing
data under this section.
‘‘(2) The Secretary also shall prescribe regulations
concerning the types of information that offerors must
submit for a contracting officer to consider in determining
whether the price of a procurement to the Government is
fair and reasonable when certified cost or pricing data are
not required to be submitted under this section because
the price of the procurement to the United States is not
expected to exceed $500,000. Such information, at a mini-
mum, shall include appropriate information on the prices
at which such offeror has previously sold the same or simi-
lar products.’’.
SEC. 127. CONSISTENCY OF TIME REFERENCES.
Section 2306a of title 10, United States Code, as
amended by sections 124, 125, and 126, is further amend-
ed—
(1) in subparagraphs (A)(ii) and (B)(ii) of sub-
section (e)(4), by inserting ‘‘or, if applicable consist-
ent with paragraph (1)(B), another date agreed
upon between the parties’’ after ‘‘(or price of the
modification)’’; and
(2) in subsection (i), by inserting ‘‘or, if appli-
cable consistent with subsection (d)(1)(B), another
date agreed upon between the parties’’ after ‘‘(or the
price of a contract modification)’’.
SEC. 128. REPEAL OF SUPERSEDED PROVISION.
Subsection (c) of section 803 of Public Law 101–510
(10 U.S.C. 2306a note) is repealed.
Subtitle D—Research and
Development
SEC. 131. DELEGATION OF CONTRACTING AUTHORITY.
Section 2356 of title 10, United States Code, is
amended to read as follows:
‘‘§ 2356. Contracts: delegations
‘‘(a) AUTHORITY.—The Secretary of a military de-
partment may delegate any authority under section 1584,
2353, or 2354 of this title to—
‘‘(1) the Under Secretary of his department;
‘‘(2) an Assistant Secretary of his department;
‘‘(3) a Deputy Assistant Secretary of his de-
partment; or
‘‘(4) except as provided in subsection (b), the
chief, and one assistant to the chief, of any technical
service, bureau, or office.
‘‘(b) LIMITATION.—The authority of the Secretary of
a military department under section 2353(b)(3) of this
title may not be delegated to a person described in sub-
section (a)(4).’’.
SEC. 132. RESEARCH PROJECTS.
(a) AUTHORITY TO CONDUCT BASIC, ADVANCED,
AND APPLIED RESEARCH.—Section 2358 of title 10,
United States Code, is amended to read as follows:
‘‘§ 2358. Research projects
‘‘(a) AUTHORITY.—The Secretary of Defense or the
Secretary of a military department may engage in basic,
advanced, and applied research and development projects
that—
‘‘(1) are necessary to the responsibilities of
such Secretary’s department in the field of basic, ad-
vanced, and applied research and development; and
‘‘(2) either—
‘‘(A) relate to weapons systems and other
military needs; or
‘‘(B) are of potential interest to such de-
partment.
‘‘(b) AUTHORIZED MEANS.—The Secretary of De-
fense or the Secretary of a military department may per-
form research and development projects—
‘‘(1) by contract, cooperative agreement, or
other transaction with, or by grant to, educational or
research institutions, private businesses, or other
agencies of the United States;
‘‘(2) by using employees and consultants of the
Department of Defense; or
‘‘(3) through one or more of the military de-
partments.
‘‘(c) REQUIREMENT OF POTENTIAL MILITARY IN-
TEREST.—Funds appropriated to the Department of De-
fense or to a military department may not be used to fi-
nance any research project or study unless the project or
study is, in the opinion of the Secretary of Defense or the
Secretary of that military department, respectively, of po-
tential interest to the Department of Defense or to such
military department, respectively.’’.
(b) AUTHORITY RELATED TO ADVANCED RESEARCH
PROJECTS.—
(1) REPEAL OF REDUNDANT AUTHORITY.—Sec-
tion 2371 of such title is amended—
(A) by striking out subsection (a);
(B) by redesignating subsections (b), (c),
(d), (e), (f), and (g) as subsections (a), (b), (c),
(d), (e), and (f), respectively;
(C) in subsection (a), as redesignated by
subparagraph (B)—
(i) in paragraph (1), by striking out
‘‘subsection (a)’’ and inserting in lieu
thereof ‘‘section 2358 of this title’’; and
(ii) in paragraph (2), by striking out
‘‘subsection (e)’’ and inserting in lieu
thereof ‘‘subsection (d)’’;
(D) in subsection (d), as redesignated by
subparagraph (B), by striking out ‘‘subsection
(a)’’ and inserting in lieu thereof ‘‘section 2358
of this title’’; and
(E) in subsection (e), as redesignated by
subparagraph (B)—
(i) in paragraph (4), by striking out
‘‘subsection (b)’’ and inserting in lieu
thereof ‘‘subsection (a)’’; and
(ii) in paragraph (5), by striking out
‘‘subsection (e)’’ and inserting in lieu
thereof ‘‘subsection (d)’’.
(2) CONSISTENCY
OF
TERMINOLOGY.—Such
section, as amended by paragraph (1), is further
amended—
(A) in subsection (c)(1), by inserting ‘‘and
development’’ after ‘‘research’’ both places it
appears;
(B) in subsections (d) and (e)(3), by strik-
ing out ‘‘advanced research’’ and inserting in
lieu thereof ‘‘research and development’’; and
(C) in subsection (e)(1), by striking out
‘‘advanced research is’’ and inserting in lieu
thereof ‘‘research and development are’’.
(c) REDUNDANT AND OBSOLETE AUTHORITY FOR
THE ARMY.—
(1) REPEAL.—Section 4503 of title 10, United
States Code, is repealed.
(2) TECHNICAL
AMENDMENT.—The table of
sections at the beginning of chapter 431 of such title
is amended by striking out the item relating to sec-
tion 4503.
(d) REDUNDANT AND OBSOLETE AUTHORITY FOR
THE AIR FORCE.—
(1) REPEAL.—Section 9503 of title 10, United
States Code, is repealed.
(2) TECHNICAL
AMENDMENT.—The table of
sections at the beginning of chapter 931 of such title
is amended by striking out the item relating to sec-
tion 9503.
SEC. 133. AWARDS OF GRANTS AND CONTRACTS TO COL-
LEGES AND UNIVERSITIES: REQUIREMENT
OF COMPETITION.
(a) REPEAL.—Subsection (c) of section 2361 of title
10, United States Code, is repealed.
(b) AMENDMENT.—Section 2361 of title 10, United
States Code, is amended by inserting ‘‘or nonprofit organi-
zation other than a federally funded research and develop-
ment center (FFRDC)’’ after ‘‘college or university’’ in
each place it appears in subsections (a) and (b).
SEC. 134. ELIMINATION OF INFLEXIBLE TERMINOLOGY RE-
GARDING COORDINATION AND COMMUNICA-
TION OF DEFENSE RESEARCH ACTIVITIES.
Section 2364 of title 10, United States Code, is
amended—
(1) in subsection (b)(5), by striking out ‘‘mile-
stone 0, milestone I, and milestone II decisions’’ and
inserting in lieu thereof ‘‘acquisition program deci-
sions’’; and
(2) in subsection (c), by striking out para-
graphs (2), (3), and (4) and inserting in lieu thereof
the following:
‘‘(2) The term ‘acquisition program decisions’
has the meaning given such term in regulations pre-
scribed by the Secretary of Defense for the purposes
of this section.’’.
SEC. 135. COOPERATIVE AGREEMENTS AND OTHER TRANS-
ACTIONS.
(a) 
NONPROCUREMENT
AGREEMENTS.—Section
2371 of title 10, United States Code, is amended as fol-
lows:
(1) Subsection (a) is amended by striking out
‘‘cooperative agreements and other transactions’’
and inserting in lieu thereof ‘‘nonprocurement agree-
ments’’.
(2) Subsection (b)(1) is amended by striking
out ‘‘Cooperative agreements and other trans-
actions’’ 
and 
inserting 
in 
lieu 
thereof
‘‘Nonprocurement agreements’’.
(3) Subsection (d) is amended by striking out
‘‘cooperative agreement or other transaction’’ each
place it appears and inserting in lieu thereof
‘‘nonprocurement agreement’’.
(4) Subsection (e) is amended by striking out
‘‘cooperative agreements and other transactions’’
and inserting in lieu thereof ‘‘nonprocurement agree-
ments’’.
(5) Subsection (f) is amended—
(A) in the matter before paragraph (1)—
(i) by striking out ‘‘cooperative agree-
ments and other transactions (other than
contracts and grants)’’ and inserting in
lieu thereof ‘‘nonprocurement agreements’’;
and
(ii) by striking out ‘‘cooperative agree-
ment and transaction’’ and inserting in
lieu thereof ‘‘nonprocurement agreement’’;
(B) in paragraph (1)—
(i) by striking out ‘‘cooperative agree-
ment or other transaction (as the case may
be)’’ 
and 
inserting 
in 
lieu 
thereof
‘‘nonprocurement agreement’’; and
(ii) by striking out ‘‘agreement or
transaction.’’ and inserting in lieu thereof
‘‘agreement.’’; and
(C) in paragraph (4), by striking out ‘‘co-
operative agreement or other transaction’’ and
inserting in lieu thereof ‘‘nonprocurement
agreement’’.
(b) DEFINITION.—Section 2371 of such title is fur-
ther amended by adding at the end the following new sub-
section:
‘‘(h) DEFINITION.—In this section, the term
‘nonprocurement agreement’ means an agreement other
than—
‘‘(1) a procurement contract, grant, or coopera-
tive agreement, as those terms are used in sections
6301 through 6308 of title 31; and
‘‘(2) a cooperative research and development
agreement (CRDA), as defined in section 12 of the
Stevenson-Wydler Technology Innovation Act of
1980 (15 U.S.C. 3710a).’’.
(c) OTHER DEFENSE RESEARCH
AND DEVELOP-
MENT AGENCIES.—Subsections (a) and (g) of section
2371 of such title are each amended by inserting ‘‘and
other defense research and development agencies’’ after
‘‘Defense Advanced Research Projects Agency’’.
(d) SECTION HEADING AMENDMENT.—(1) The head-
ing of section 2371 of such title is amended to read as
follows:
‘‘§ 2371. Advanced research projects: nonprocurement
agreements’’.
(2) The table of sections at the beginning of chapter
139 of such title is amended by striking out the item relat-
ing to section 2371 and inserting in lieu thereof the follow-
ing:
‘‘2371. Advanced research projects: nonprocurement agreements.’’.
SEC. 136. CONTRACTS FOR RESEARCH.
(a) REPEAL.—Section 7522 of title 10, United States
Code, is hereby repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 645 of such title is amended
by striking out the item related to section 7522.
Subtitle E—Procurement Protests
SEC. 141. SENSE OF CONGRESS ON SINGLE FORUM FOR RE-
VIEW OF CONTRACT PROTESTS.
It is the sense of Congress that there should be a
single forum, in the Office of the Comptroller General in
the General Accounting Office, to review government con-
tracting protests.
endar days after the contract award), whichever is
later, the Federal agency (except as provided under
paragraph (2)) shall, upon receipt of that notice, im-
mediately direct the contractor to cease performance
under the contract and to suspend any related ac-
tivities that may result in additional obligations
being incurred by the United States under that con-
tract. Performance of the contract may not be re-
sumed while the protest is pending.’’; and
(6) by striking out subsection (f) and inserting
in lieu thereof the following:
‘‘(f)(1) Within such deadlines as the Comptroller
General prescribes and subject to any order made under
paragraph (2), upon request each Federal agency shall
provide to an interested party any document relevant to
a protested procurement action (including the report re-
quired by subsection (b)(2)) that would not give that party
a competitive advantage and that the party is otherwise
authorized by law to receive.
‘‘(2) The Comptroller General, under the procedures
established pursuant to section 3555 of this title, may
make an appropriate protective order specifying that, not-
withstanding any other provision of law—
‘‘(A) access to documents or information, in-
cluding any Federal agency documents or informa-
tion, may be had on specific terms and conditions;
‘‘(B) procurement sensitive, trade secret, or
other proprietary and confidential research, develop-
ment, or commercial information may not be dis-
closed or may be disclosed only in a designated way;
and
‘‘(C) any hearing shall be conducted with no
one present except persons designated by the Comp-
troller General.’’.
SEC. 143. DECISIONS ON PROTESTS.
Section 3554 of title 31, United States Code, is
amended—
(1) in subsection (a)(1), by striking out ‘‘90
working’’ and inserting in lieu thereof ‘‘120 cal-
endar’’;
(2) in subsection (a)(2), by striking out ‘‘45’’
and inserting in lieu thereof ‘‘60 calendar’’;
(3) in subsection (a), by redesignating para-
graph (3) as paragraph (4) and inserting after para-
graph (2) the following new paragraph (3):
‘‘(3) Amendments to protests which add new
grounds of protest should be resolved, to the maxi-
mum extent practicable, within the time limits estab-
lished under paragraph (1) of this subsection for the
initial protest. If amended protests cannot be re-
solved within such time limit, the Comptroller Gen-
eral may resolve the amended protest through the
express option under paragraph (2) of this sub-
section.’’;
(4) by adding at the end of subsection (a) the
following new paragraph:
‘‘(5) If the Comptroller General expressly finds
that a protest or a portion of a protest is frivolous
or has not been brought or pursued in good faith,
the protester or other interested party who joins the
protest shall be liable to the United States for pay-
ment of, and the Comptroller General shall order the
protester or other interested party to pay, all or that
portion of the United States costs, for which such a
finding is made, of reviewing the protest, including
the fees and other expenses (as defined in section
2412(d)(2)(A) of title 28) incurred by the United
States in defending the protest, unless (1) special
circumstances would make such payment unjust, or
(2) the protester obtains documents or other infor-
mation for the first time, after the protest is filed
with the Comptroller General, that establishes that
the protest or a portion of the protest is frivolous or
has not been brought in good faith, and the pro-
tester then promptly withdraws the protest or por-
tion of the protest.’’;
(5) in subsection (c)(1)(A) by adding ‘‘and con-
sultant and expert witness fees’’ after ‘‘attorneys’
fees’’; and
(6) in subsection (e)(2) by adding at the end
the following: ‘‘The report shall also describe each
instance where a final decision was not rendered
within 120 calendar days.’’.
SEC. 144. REGULATIONS; AUTHORITY OF COMPTROLLER
GENERAL TO VERIFY ASSERTIONS.
Section 3555 of title 31, United States Code, is
amended to read as follows:
‘‘§ 3555. Regulations; authority of Comptroller Gen-
eral to verify assertions
‘‘(a) The Comptroller General shall prescribe such
procedures as may be necessary to the expeditious decision
of protests under this subchapter, including procedures for
accelerated resolution of protests under the express option
authorized by section 3554(a)(2) of this title. Such proce-
dures shall provide that the protest process may not be
delayed by the failure of a party to make a filing within
the time provided for the filing.
‘‘(b) In computing any period of time prescribed or
allowed by this subchapter, the procedures shall provide
that the day of the act, event, or default from which the
designated period of time begins to run shall not be in-
cluded. The last day of the period so computed shall be
included, unless it is a Saturday, a Sunday, or a legal holi-
day, or, when the act to be done is the filing of a paper
at the General Accounting Office or a Federal agency, a
day on which weather or other conditions have made the
General Accounting Office or Federal agency inaccessible,
in which event the period runs until the end of the next
day that is not one of the previously mentioned days.
‘‘(c) The procedures may provide for electronic filing
and dissemination of documents and information required
under this subchapter and in so providing shall consider
the ability of all parties to achieve electronic access to such
documents and records.
‘‘(d) The procedures shall address the implementa-
tion of the provisions for payment of costs under section
3554(f), including the composition, proof, and calculation
of such costs, the special circumstances that make such
payment unjust, and what constitutes prompt withdrawal
of the protest.
‘‘(e) The Comptroller General may use any authority
available under Chapter 7 of this title and this chapter
to verify assertions made by parties in protests under this
subchapter.’’.
SEC. 145. NONEXCLUSIVITY OF REMEDIES; MATTERS IN-
CLUDED IN AGENCY RECORD.
The first sentence of section 3556 of title 31, United
States Code, is amended to read as follows: ‘‘This sub-
chapter does not give the Comptroller General exclusive
jurisdiction over protests, and nothing contained in this
subchapter shall affect the right of any interested party
to file a protest with the contracting agency or to file an
action in the United States Court of Federal Claims.’’.
Subtitle F—Other Related Statutes
SEC. 151. DELEGATION.
(a) AMENDMENT OF TITLE 10.—Section 2311 of title
10, United States Code, is amended to read as follows:
‘‘§ 2311. Delegation
‘‘(a) Unless expressly prohibited by law, the head of
an agency may delegate, subject to his direction, to any
other officer or official of that agency, any power under
this chapter.
‘‘(b) To facilitate the procurement of property and
services covered by this chapter by each agency named in
section 2303 of this title for any other agency, and to fa-
cilitate joint procurement by those agencies—
‘‘(1) the head of an agency may, within his
agency, delegate functions and assign responsibilities
relating to procurement;
‘‘(2) the heads of two or more agencies may by
agreement delegate procurement functions and as-
sign procurement responsibilities from one agency to
another of those agencies or to an officer or civilian
employee of another of those agencies; and
‘‘(3) the heads of two or more agencies may
create joint or combined offices to exercise procure-
ment functions and responsibilities.
‘‘(c)(1) The Secretary of Defense shall prescribe reg-
ulations that prohibit each military department participat-
ing in a joint acquisition program approved by the Under
Secretary of Defense for Acquisition from terminating or
substantially reducing its participation in such program
without the approval of the Under Secretary.
‘‘(2) The regulations shall include the following
provisions:
‘‘(A) A requirement that, before any such ter-
mination or substantial reduction in participation is
approved, the proposed termination or reduction be
reviewed by the Joint Requirements Oversight Coun-
cil of the Department of Defense.
‘‘(B) A provision that authorizes the Under
Secretary of Defense for Acquisition to require a
military department approved for termination or
substantial reduction in participation in a joint ac-
quisition program to continue to provide some or all
of the funding necessary for the acquisition program
to be continued in an efficient manner.’’.
(b) CONFORMING REPEAL.—(1) Section 2308 of title
10, United States Code, is repealed.
(2) The table of sections at the beginning of chapter
137 of such title is amended by striking out the item
related to section 2308.
SEC. 152. DETERMINATIONS AND DECISIONS.
Section 2310 of title 10, United States Code, is
amended to read as follows:
‘‘§ 2310. Determinations and decisions
‘‘Determinations and decisions required to be made
under this chapter by the head of an agency may be made
for an individual purchase or contract or for a class of
purchases or contracts except when expressly prohibited
under this title. Such determinations or decisions are
final.’’.
SEC. 153. UNDEFINITIZED CONTRACTUAL ACTIONS: RE-
STRICTIONS.
Section 2326 of title 10, United States Code, is
amended—
(1) by striking out ‘‘AND EXPENDITURES’’ in
the heading of subsection (b);
(2) by striking out ‘‘or expended’’ in subsection
(b)(1)(B);
(3) by striking out ‘‘expend’’ in subsection
(b)(2) and inserting in lieu thereof ‘‘obligate’’;
(4) by striking out ‘‘expended’’ and ‘‘expend’’
and inserting in lieu thereof ‘‘obligated’’ and ‘‘obli-
gate’’, respectively, in subsection (b)(3);
(5) by redesignating paragraph (4) in sub-
section (b) as paragraph (5); and
(6) by inserting after paragraph (3) in sub-
section (b) the following new paragraph:
‘‘(4) The provisions of this subsection may be
waived if the head of the agency determines that
waiver is necessary in support of contingency oper-
ations, as defined in section 101(a)(13) of this title,
or is otherwise in the best interests of the United
States.’’.
SEC. 154. PRODUCTION SPECIAL TOOLING AND PRODUC-
TION SPECIAL TEST EQUIPMENT: CONTRACT
TERMS AND CONDITIONS.
(a) REPEAL.—Section 2329 of title 10, United States
Code, is hereby repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 137 of such title is amended
by striking out the item related to section 2329.
SEC. 155. CONTRACTS: REGULATIONS FOR BIDS.
Section 2381 of title 10, United States Code, is
amended in subsection (a) by striking out ‘‘The’’ and in-
serting in lieu thereof ‘‘The Secretary of Defense or the’’.
SEC. 156. SUPPLIES: IDENTIFICATION OF SUPPLIER AND
SOURCES.
Paragraph (2) of section 2384(b) of title 10, United
States Code, is amended to read as follows:
‘‘(2) Paragraph (1) does not apply to a contract
that requires the delivery of supplies that are com-
mercial items, as defined in section 2302(7) of this
title.’’.
TITLE II—CONTRACT
ADMINISTRATION
SEC. 201. CONTRACT PAYMENTS.
(a) CONTRACT FINANCING.—(1) Subsection (a)(2) of
section 2307 of title 10, United States Code, is amended
by striking out ‘‘bid’’ before ‘‘solicitations’’.
(2) Subsection (c) of such section is amended by
striking out the last sentence and inserting in lieu thereof
the following: ‘‘Such lien is paramount to all other liens
and is effective on the date the first advance payment is
made, regardless of whether the United States has notified
the contractor of the lien or taken any other action.
(3) Subsection (d) of such section is amended—
(A) in the first sentence of paragraph (1)—
(i) by striking out ‘‘The Secretary’’ and in-
serting in lieu thereof ‘‘Except as provided in
paragraph (4), the Secretary’’; and
(ii) by striking out ‘‘commensurate with
the work, which meets standards of quality es-
tablished under the contract, that has been ac-
complished.’’ and inserting in lieu thereof ‘‘com-
mensurate with the work that has been accom-
plished and that meets standards of quality es-
tablished under the contract.’’;
(B) by redesignating paragraph (3) as para-
graph (4) and amending such paragraph to read as
follows:
‘‘(4) This subsection does not apply to contracts
awarded using simplified procedures.’’; and
(C) by inserting after paragraph (2) the follow-
ing new paragraph (3):
‘‘(3) When payments have been made for work in
progress, the United States shall take title to all work in
progress properly allocable or chargeable to the contract.
Title shall vest in the United States regardless of any
prior or subsequently asserted security interest in the
work in progress.’’.
(4) Such section is further amended by adding at the
end the following new subsection:
‘‘(f) For contracts made by the Department of the
Navy, the Secretary of the Navy—
‘‘(1) shall provide that the rate for progress
payments on any contract awarded by the Secretary
for repair, maintenance, or overhaul of a naval ves-
sel shall be not less than—
‘‘(A) 95 percent, in the case of firms con-
sidered to be small businesses; and
‘‘(B) 90 percent, in the case of all other
firms; and
‘‘(2) may advance to private salvage companies
such funds as the Secretary considers necessary to
provide for the immediate financing of salvage oper-
ations, provided such advances are made on terms
the Secretary considers adequate for the protection
of the United States.’’.
(b) REPAIR OR MAINTENANCE OF NAVAL VESSELS:
PROGRESS PAYMENTS UNDER CERTAIN CONTRACTS.—
Section 7312 of title 10, United States Code, is repealed.
The table of sections at the beginning of chapter 633 of
such title is amended by striking out the item related to
section 7312.
(c) ADVANCE
OF
FUNDS
FOR
SALVAGE
OPER-
ATIONS.—Section 7364 of title 10, United States Code,
is repealed. The table of sections at the beginning of chap-
ter 637 of such title is amended by striking out the item
related to section 7364.
(d) PROGRESS PAYMENT FOR WORK DONE; LIEN
BASED ON PAYMENT.—Section 7521 of title 10, United
States Code, is repealed. The table of sections at the be-
ginning of chapter 645 of such title is amended by striking
out the item related to section 7521.
SEC. 202. COST PRINCIPLES.
(a) ALLOWABLE COSTS.—Section 2324 of title 10,
United States Code, is amended—
(1) by striking out subsections (e), (f), (g), (i),
and (k);
(2) by redesignating subsections (a), (b), (c),
(d), (h), (j), (l), and (m) as subsections (b), (c), (d),
(e), (f), (g), (h), and (i), respectively;
(6) in subsection (e), as redesignated, by strik-
ing out ‘‘subsection (a) or (b)—’’ and inserting in
lieu thereof ‘‘subsection (b) or (c)—’’;
(7) in subsection (g), as redesignated, by strik-
ing out ‘‘United States Claims Court’’ and inserting
in lieu thereof ‘‘United States Court of Federal
Claims’’; and
(8) in subsection (h), as redesignated—
(A) in paragraph (2), by striking out
‘‘committees named in paragraph (3)’’ and in-
serting in lieu thereof ‘‘Committees on Armed
Services and the Committees on Appropriations
of the Senate and the House of Representa-
tives’’;
(B) by striking out ‘‘in regulations pre-
scribed under subsection (e) or (f) or in any
other regulations of the Department of De-
fense’’; and
(C) by striking out paragraph (3).
(b) CONTRACT PROFIT CONTROLS DURING EMER-
GENCY PERIODS.—Section 2382 of title 10, United States
Code, is repealed. The table of sections at the beginning
of chapter 141 of such title is amended by striking out
the item related to section 2382.
(c) TRAVEL EXPENSES OF GOVERNMENT CONTRAC-
TORS.—Section 24(a) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 420) is amended by inserting
after ‘‘Under any contract’’ the following: ‘‘requiring the
submission of cost or pricing data or the negotiation of
final indirect costs’’.
SEC. 203. CONSOLIDATION AND REVISION OF AUTHORITY
TO EXAMINE RECORDS OF CONTRACTORS.
(a) AUTHORITY.—
(1) IN
GENERAL.—Section 2313 of title 10,
United States Code, is amended to read as follows:
‘‘§ 2313. Examination of records of contractor
‘‘(a) AGENCY AUTHORITY.—The head of an agency,
acting through an authorized representative—
‘‘(1) is entitled to inspect the plant and audit
the records of—
‘‘(A) a contractor performing a cost-reim-
bursement, incentive, time-and-materials, labor-
hour, or price-redeterminable contract, or any
combination of such contracts, made by that
agency under this chapter; and
‘‘(B) a subcontractor performing any sub-
contract under such a contract or combination
of contracts; and
‘‘(2) shall, for the purpose of evaluating the ac-
curacy, completeness, and currency of cost or pricing
data required to be submitted pursuant to section
2306a of this title with respect to a contract or sub-
contract, have the right to examine all records of the
contractor or subcontractor related to—
‘‘(A) the proposal for the contract or sub-
contract;
‘‘(B) the discussions conducted on the pro-
posal; or
‘‘(C) pricing of the contract or subcontract.
‘‘(b) SUBPOENA POWER.—(1) The Director of the
Defense Contract Audit Agency (or any successor agency)
may require by subpoena the production of records of a
contractor, access to which is provided to the Secretary
of Defense by subsection (a).
‘‘(2) Any such subpoena, in the case of contumacy
or refusal to obey, shall be enforceable by order of an ap-
propriate United States district court.
‘‘(3) The authority provided by paragraph (1) may
not be redelegated.
‘‘(4) The Director (or any successor official) shall
submit an annual report to the Secretary of Defense on
the exercise of such authority during the preceding year
and the reasons why such authority was exercised in any
instance. The Secretary shall forward a copy of each such
report to the Committees on Armed Services of the Senate
and House of Representatives.
‘‘(c) COMPTROLLER GENERAL AUTHORITY.—(1) Ex-
cept as provided in paragraph (2), each contract awarded
after using procedures other than sealed bid procedures
shall provide that the Comptroller General and his rep-
resentatives are entitled to examine any records of the
contractor, or any of its subcontractors, that directly per-
tain to, and involve transactions relating to, the contract
or subcontract.
‘‘(2) Paragraph (1) does not apply to a contract or
subcontract with a foreign contractor or foreign sub-
contractor if the head of the agency concerned determines,
with the concurrence of the Comptroller General or his
designee, that the application of that paragraph to the
contract or subcontract would not be in the public interest.
However, the concurrence of the Comptroller General or
his designee is not required—
‘‘(A) where the contractor or subcontractor is a
foreign government or agency thereof or is precluded
by the laws of the country involved from making its
records available for examination; and
‘‘(B) where the head of the agency determines,
after taking into account the price and availability of
the property and services from United States
sources, that the public interest would be best served
by not applying paragraph (1).
‘‘(d) LIMITATION.—The right of the head of an agen-
cy under subsection (a), and the right of the Comptroller
General under subsection (c), with respect to a contract
or subcontract shall expire three years after final payment
under such contract or subcontract.
‘‘(e) INAPPLICABILITY TO CERTAIN CONTRACTS.—
This section is inapplicable with respect to contracts for
utility services at rates not exceeding those established to
apply uniformly to the public, plus any applicable reason-
able connection charge.
‘‘(f) RECORDS DEFINED.—In this section, the term
‘records’ includes books, documents, accounting proce-
dures and practices, and other data, regardless of type and
regardless of whether such items are in written form, in
the form of computer data, or in any other form.’’.
(2) TECHNICAL AMENDMENT.—The item relat-
ing to such section in the table of sections at the be-
ginning of chapter 137 of title 10, United States
Code, is amended to read as follows:
‘‘2313. Examination of records of contractor.’’.
(b) REPEAL OF SUPERSEDED PROVISION.—
(1) REPEAL.—Section 2406 of title 10, United
States Code, is repealed.
(2) TECHNICAL
AMENDMENT.—The table of
sections at the beginning of chapter 141 of such title
is amended by striking out the item relating to sec-
tion 2406.
SEC. 204. ADMINISTRATION OF CONTRACT PROVISIONS RE-
LATING TO PRICE, DELIVERY, AND PRODUCT
QUALITY.
(a) REPEAL OF PROVISION RELATING TO CONTRAC-
TOR GUARANTEES ON MAJOR WEAPON SYSTEMS.—Sec-
tion 2403 of title 10, United States Code, is repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 141 of such title is amended
by striking out the item related to section 2403.
TITLE III—MAJOR SYSTEMS AND
COMMERCIAL ACTIVITIES
Subtitle A—Major Systems
SEC. 301. SELECTED ACQUISITION REPORTS; UNIT COST
REPORTS.
(a) AMENDMENT OF TITLE 10.—Section 2432 of title
10, United States Code, is amended to read as follows:
‘‘§ 2432. Selected Acquisition Reports; unit cost re-
ports
‘‘(a)(1) The Secretary of Defense shall submit to
Congress at the end of each fiscal year quarter a report
on current major defense acquisition programs. Except as
‘‘(iii) the system configuration for such pro-
gram is not well defined.
‘‘(B) The Secretary shall submit to the Committees
on Armed Services of the Senate and House of Represent-
atives a written notification of each waiver under subpara-
graph (A) for a program for a fiscal year not later than
60 days before the President submits the budget to Con-
gress pursuant to section 1105 of title 31 in that fiscal
year.
‘‘(b)(1) Selected Acquisition Reports for the first
quarter of a fiscal year shall be known as comprehensive
annual Selected Acquisition Reports.
‘‘(2) Selected Acquisition Reports for the second,
third, and fourth quarters of a fiscal year shall be known
as quarterly Selected Acquisition Reports.
‘‘(3) Each Selected Acquisition Report for the first
quarter of a fiscal year shall be designed to provide to
the Committees on Armed Services of the Senate and
House of Representatives the information such Commit-
tees need to perform their oversight functions. In the in-
terests of consistency and streamlining of reporting, the
Secretary of Defense shall include in the Selected Acquisi-
tion Reports such information as is used by the Depart-
ment of Defense to manage major defense acquisition pro-
grams. The Secretary of Defense shall determine the scope
and form of the items to be included in both the Com-
prehensive Annual and Quarterly Selected Acquisition Re-
port and issue guidelines to ensure consistent reporting
procedures. The Secretary of Defense may approve
changes in the content of the Selected Acquisition Report
if the Secretary provides such Committees with written no-
tification of such changes at least 60 days before the date
of the report that incorporates the changes.
‘‘(c) Each comprehensive annual Selected Acquisition
Report shall be submitted within 60 days after the date
on which the President transmits the Budget to Congress
for the following fiscal year, and each Quarterly Selected
Acquisition Report shall be submitted within 45 days after
the end of the fiscal-year quarter.
‘‘(d) The requirements of this section with respect to
a major defense acquisition program shall cease to apply
after 90 percent of the items to be delivered to the United
States under the program (shown as the total quantity
of items to be purchased under the program in the most
recent Selected Acquisition Report) have been delivered or
90 percent of planned expenditures under the program
have been made.
‘‘(e) Total program reporting under this section shall
apply to a major defense acquisition program when funds
have been appropriated for such and the Secretary of De-
fense has decided to proceed to engineering and manufac-
turing development of such program. Reporting may be
limited to the development program as provided by the
guidelines of the Secretary of Defense promulgated pursu-
ant to subsection (b)(3) before a decision is made by the
Secretary to proceed to engineering and manufacturing
development if the Secretary notifies the Committees on
Armed Services of the Senate and House of Representa-
tives of the intention to submit a limited report under this
subsection not less than 15 days before a report is due
under this section.
‘‘(f)(1) The Secretary of Defense shall require the
program manager for a major defense acquisition pro-
gram, on a quarterly basis, to submit to the service acqui-
sition executive designated by the Secretary concerned a
written report on the unit costs of the program. It shall
be submitted not more than 30 calendar days after the
end of the quarter. The Secretary of Defense shall issue
regulations implementing this requirement.
‘‘(2) When a unit cost report is submitted to the serv-
ice acquisition executive designated by the Secretary con-
cerned under this section with respect to a major defense
acquisition program, the service acquisition executive shall
determine whether the current program acquisition unit
cost for the program has increased 15 percent or more
over the baseline program acquisition unit cost for the pro-
gram.
‘‘(3) When a unit cost report is submitted to the serv-
ice acquisition executive designated by the Secretary con-
cerned under this section with respect to a major defense
acquisition program that is a procurement program, the
service acquisition executive, in addition to the determina-
tion under paragraph (2), shall determine whether the
current procurement unit cost for the program has in-
creased by 15 percent or more over the baseline procure-
ment unit cost for the program.
‘‘(4) If, based upon the service acquisition executive’s
determination, the Secretary concerned determines (for
the first time since the beginning of the current fiscal
year) that the current program acquisition unit cost has
increased by 15 percent or more as determined under
paragraph (2), or that the current procurement unit cost
has increased by 15 percent or more as determined under
paragraph (3), the Secretary shall notify Congress in writ-
ing of such determination and of the increase with respect
to such program within 45 days after the date of that re-
port and shall include in such notification the date on
which the determination was made.’’.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 144 of title 10, United States
Code, is amended by striking out the item relating to sec-
tion 2432 and inserting in lieu thereof the following:
‘‘Sec. 2432. Selected Acquisition Reports; unit cost reports.’’.
SEC. 302. UNIT COST REPORTS.
(a) REPEAL.—Section 2433 of title 10, United States
Code, is repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 144 of such title is amended
by striking out the item relating to section 2433.
SEC. 303. INDEPENDENT COST ESTIMATES; OPERATIONAL
MANPOWER REQUIREMENTS.
Section 2434 of title 10, United States Code, is
amended to read as follows:
‘‘§ 2434. Independent cost estimates; operational man-
power requirements
‘‘(a) REQUIREMENT FOR APPROVAL.—The Secretary
of Defense may not approve the engineering and manufac-
turing development, or the production and deployment, of
a major defense acquisition program unless an independ-
ent estimate of the cost of the program, and a manpower
estimate, has been considered by the Secretary.
‘‘(b) REGULATIONS.—The Secretary of Defense shall
promulgate regulations governing the content and submis-
sion of an independent estimate of the cost of the program
and a manpower estimate. The regulations shall require
that—
‘‘(1) the independent estimate shall—
‘‘(A) be prepared by an office or other en-
tity that is not under the supervision, direction,
or control of the military department, defense
agency, or other component of the Department
of Defense that is directly responsible for carry-
ing out the development or acquisition of the
program, and
‘‘(B) include all costs of development, pro-
curement, and operations and support, without
regard to funding source or management con-
trol; and
‘‘(2) the manpower estimate shall properly con-
sider, prior to the engineering and manufacturing
development and production and deployment phases
of the program, the total endstrengths for personnel
required to operate, maintain, train, and support the
program upon full operational deployment.’’.
SEC. 304. ENHANCED PROGRAM STABILITY.
Section 2435 of title 10, United States Code, is
amended to read as follows:
‘‘§ 2435. Enhanced program stability
‘‘(a) BASELINE DESCRIPTION REQUIREMENT.—(1)
The Secretary of a military department shall establish a
baseline description for each major defense acquisition
program under the jurisdiction of such Secretary.
‘‘(2) The baseline shall include sufficient parameters
to describe the cost, schedule, and performance of such
major defense acquisition program.
‘‘(3) No amounts appropriated or otherwise made
available to the Department of Defense for carrying out
a major defense acquisition program may be obligated
without an approved baseline description unless such obli-
gation is specifically approved by the Under Secretary of
Defense for Acquisition.
‘‘(4) A baseline description for a major defense acqui-
sition program shall be established—
‘‘(A) before such program enters engineering
manufacturing and development; and
‘‘(B) before such program enters production
and deployment.
‘‘(b) REGULATIONS.—The Secretary of Defense shall
promulgate regulations governing—
‘‘(1) the content of baselines;
‘‘(2) the submission of deviation reports by pro-
gram managers to the Secretary of the military de-
partment concerned and the Under Secretary of De-
fense for Acquisition; and