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environment and provide for a residual operational 
capability within five years of the development of an 
approved requirement. 
(2) RAPID FIELDING.—The rapid fielding path-
way shall provide for the use of proven technologies 
to field production quantities of new or upgraded sys-
tems with minimal development required. The objec-
tive of an acquisition program under this pathway 
shall be to begin production within six months and 
complete fielding within five years of the development 
of an approved requirement. 
(c) EXPEDITED PROCESS.— 
(1) IN GENERAL.—The guidance required by sub-
section (a) shall provide for a streamlined and coordi-
nated requirements, budget, and acquisition process 
that results in the development of an approved re-
quirement for each program in a period of not more 
than six months from the time that the process is ini-
tiated. Programs that are subject to the guidance shall 
not be subject to the Joint Capabilities Integration 
and Development System Manual and Department of 
Defense Directive 5000.01, except to the extent specifi-
cally provided in the guidance.
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(A) a merit-based process for the consider-
ation of existing products and proven tech-
nologies to meet needs communicated by the 
Joint Chiefs of Staff and the combatant com-
manders; 
(B) a process for demonstrating perform-
ance and evaluating for current operational pur-
poses the proposed products and technologies; 
(C) a process for developing and imple-
menting acquisition and funding strategies for 
the program; and 
(D) a process for considering lifecycle costs 
and addressing issues of logistics support and 
system interoperability. 
(4) STREAMLINED PROCEDURES.—The guidance 
for the programs may provide for any of the following 
streamlined procedures: 
(A) The service acquisition executive of the 
military department concerned shall appoint a 
program manager for such program from among 
candidates from among civilian employees or 
members of the armed forces who have signifi-
cant and relevant experience managing large 
and complex programs.
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† HR 1735 EAS1S 
(B) The program manager for each pro-
gram shall report with respect to such program 
directly, without intervening review or approval, 
to the service acquisition executive of the mili-
tary department concerned. 
(C) The service acquisition executive of the 
military department concerned shall evaluate the 
job performance of such manager on an annual 
basis. In conducting an evaluation under this 
paragraph, a service acquisition executive shall 
consider the extent to which the manager has 
achieved the objectives of the program for which 
the manager is responsible, including quality, 
timeliness, and cost objectives. 
(D) The program manager of a defense 
streamlined program shall be authorized staff po-
sitions for a technical staff, including experts in 
business management, contracting, auditing, en-
gineering, testing, and logistics, to enable the 
manager to manage the program without the 
technical assistance of another organizational 
unit of an agency to the maximum extent prac-
ticable. 
(E) The program manager of a defense 
streamlined program shall be authorized, in co-
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ordination with the users of the equipment and 
capability to be acquired and the test commu-
nity, to make trade-offs among life-cycle costs, 
requirements, and schedules to meet the goals of 
the program. 
(F) The service acquisition executive, acting 
in coordination with the defense acquisition exec-
utive, shall serve as the milestone decision au-
thority for the program. 
(G) The program manager of a defense 
streamlined program shall be provided a process 
to expeditiously seek a waiver from Congress 
from any statutory or regulatory requirement 
that the program manager determines adds little 
or no value to the management of the program. 
(d) RAPID PROTOTYPING FUND.— 
(1) IN GENERAL.—The Secretary of Defense shall 
establish a fund to be known as the ‘‘Department of 
Defense Rapid Prototyping Fund’’ to provide funds, 
in addition to other funds that may be available for 
acquisition programs under the rapid prototyping 
pathway established pursuant to this section. The 
Fund shall be managed by a senior official of the De-
partment of Defense designated by the Under Sec-
retary of Defense for Acquisition, Technology, and Lo-
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† HR 1735 EAS1S 
gistics. The Fund shall consist of amounts appro-
priated to the Fund and amounts credited to the 
Fund pursuant to section 849 of this Act. 
(2) TRANSFER AUTHORITY.—Amounts available 
in the Fund may be transferred to a military depart-
ment for the purpose of carrying out an acquisition 
program under the rapid prototyping pathway estab-
lished pursuant to this section. Any amount so trans-
ferred shall be credited to the account to which it is 
transferred. The transfer authority provided in this 
subsection is in addition to any other transfer author-
ity available to the Department of Defense. 
(3) CONGRESSIONAL NOTICE.—The senior official 
designated to manage the Fund shall notify the con-
gressional defense committees of all transfers under 
paragraph (2). Each notification shall specify the 
amount transferred, the purpose of the transfer, and 
the total projected cost and estimated cost to complete 
the acquisition program to which the funds were 
transferred. 
SEC. 804. AMENDMENTS TO OTHER TRANSACTION AUTHOR-
ITY. 
(a) AUTHORITY OF THE DEFENSE ADVANCED RE-
SEARCH PROJECTS AGENCY TO CARRY OUT CERTAIN PRO-
TOTYPE PROJECTS.—
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† HR 1735 EAS1S 
(1) IN
GENERAL.—Chapter 193 of title 10, 
United States Code, is amended by inserting after sec-
tion 2371a the following new section: 
‘‘§ 2371b. Authority of the Defense Advanced Research 
Projects Agency to carry out certain proto-
type projects 
‘‘(a) AUTHORITY.—(1) Subject to paragraph (2), the 
Director of the Defense Advanced Research Projects Agency, 
the Secretary of a military department, or any other official 
designated by the Secretary of Defense may, under the au-
thority of section 2371 of this title, carry out prototype 
projects that are directly relevant to enhancing the mission 
effectiveness of military personnel and the supporting plat-
forms, systems, components, or materials proposed to be ac-
quired or developed by the Department of Defense, or to im-
provement of platforms, systems, components, or materials 
in use by the armed forces. 
‘‘(2) The authority of this section— 
‘‘(A) may be exercised for a prototype project 
that is expected to cost the Department of Defense in 
excess 
of 
$50,000,000 
but 
not 
in 
excess 
of 
$250,000,000 (including all options) only upon a 
written determination by the senior procurement exec-
utive for the agency as designated for the purpose of 
section 1702(c) of title 41, or, for the Defense Ad-
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† HR 1735 EAS1S 
vanced Research Projects Agency or the Missile De-
fense Agency, the director of the agency that— 
‘‘(i) the requirements of subsection (d) will 
be met; and 
‘‘(ii) the use of the authority of this section 
is essential to promoting the success of the proto-
type project; and 
‘‘(B) may be exercised for a prototype project 
that is expected to cost the Department of Defense in 
excess of $250,000,000 (including all options) only 
if— 
‘‘(i) the Under Secretary of Defense for Ac-
quisition, Technology, and Logistics determines 
in writing that— 
‘‘(I) the requirements of subsection (d) 
will be met; and 
‘‘(II) the use of the authority of this 
section is essential to meet critical national 
security objectives; and 
‘‘(ii) the congressional defense committees 
are notified in writing at least 30 days before 
such authority is exercised. 
‘‘(3) The authority of a senior procurement executive 
or director of the Defense Advanced Research Projects Agen-
cy or Missile Defense Agency under paragraph (2)(A), and
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† HR 1735 EAS1S 
the authority of the Under Secretary of Defense for Acquisi-
tion, Technology, and Logistics under paragraph (2)(B), 
may not be delegated. 
‘‘(b) EXERCISE OF AUTHORITY.— 
‘‘(1) Subsections (e)(1)(B) and (e)(2) of such sec-
tion 2371 shall not apply to projects carried out 
under subsection (a). 
‘‘(2) To the maximum extent practicable, com-
petitive procedures shall be used when entering into 
agreements to carry out projects under subsection (a). 
‘‘(c) COMPTROLLER GENERAL ACCESS TO INFORMA-
TION.—(1) Each agreement entered into by an official re-
ferred to in subsection (a) to carry out a project under that 
subsection that provides for payments in a total amount 
in excess of $5,000,000 shall include a clause that provides 
for the Comptroller General, in the discretion of the Comp-
troller General, to examine the records of any party to the 
agreement or any entity that participates in the perform-
ance of the agreement. 
‘‘(2) The requirement in paragraph (1) shall not apply 
with respect to a party or entity, or a subordinate element 
of a party or entity, that has not entered into any other 
agreement that provides for audit access by a Government 
entity in the year prior to the date of the agreement.
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† HR 1735 EAS1S 
ment. The waiver shall be effective with respect to the agree-
ment only if the head of the contracting activity transmits 
a notification of the waiver to Congress and the Comptroller 
General before entering into the agreement. The notification 
shall include the rationale for the determination. 
‘‘(5) The Comptroller General may not examine 
records pursuant to a clause included in an agreement 
under paragraph (1) more than three years after the final 
payment is made by the United States under the agreement. 
‘‘(d) APPROPRIATE USE OF AUTHORITY.—(1) The Sec-
retary of Defense shall ensure that no official of an agency 
enters into a transaction (other than a contract, grant, or 
cooperative agreement) for a prototype project under the au-
thority of this section unless one of following conditions is 
met: 
‘‘(A) There is at least one nontraditional defense 
contractor participating to a significant extent in the 
prototype project. 
‘‘(B) All parties to the transaction other than the 
Federal Government are innovative small businesses 
and non-traditional contractors with unique capabili-
ties relevant to the prototype project. 
‘‘(C) At least one third of the total cost of the 
prototype project is to be paid out of funds provided
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† HR 1735 EAS1S 
by parties to the transaction other than the Federal 
Government. 
‘‘(D) The senior procurement executive for the 
agency determines in writing that exceptional cir-
cumstances justify the use of a transaction that pro-
vides for innovative business arrangements or struc-
tures that would not be feasible or appropriate under 
a contract. 
‘‘(2)(A) Except as provided in subparagraph (B), the 
amounts counted for the purposes of this subsection as being 
provided, or to be provided, by a party to a transaction 
with respect to a prototype project that is entered into 
under this section other than the Federal Government do 
not include costs that were incurred before the date on which 
the transaction becomes effective. 
‘‘(B) Costs that were incurred for a prototype project 
by a party after the beginning of negotiations resulting in 
a transaction (other than a contract, grant, or cooperative 
agreement) with respect to the project before the date on 
which the transaction becomes effective may be counted for 
purposes of this subsection as being provided, or to be pro-
vided, by the party to the transaction if and to the extent 
that the official responsible for entering into the transaction 
determines in writing that—
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† HR 1735 EAS1S 
‘‘(i) the party incurred the costs in anticipation 
of entering into the transaction; and 
‘‘(ii) it was appropriate for the party to incur 
the costs before the transaction became effective in 
order to ensure the successful implementation of the 
transaction. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) The term ‘nontraditional defense contractor’ 
has the meaning given the term under section 2302(9) 
of this title. 
‘‘(2) The term ‘small business’ means a small 
business concern as defined under section 3 of the 
Small Business Act (15 U.S.C. 632). 
‘‘(f) FOLLOW-ON PRODUCTION CONTRACTS OR TRANS-
ACTIONS.—(1) A transaction entered into under this section 
for a prototype project may provide for the award of a fol-
low-on production contract or transactions to the partici-
pants in the transaction. 
‘‘(2) A follow-on production contract or transaction 
provided for in a transaction under paragraph (1) may be 
awarded to the participants in the transaction without the 
use of competitive procedures, notwithstanding the require-
ments of section 2304 of this title, if—
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‘‘(A) competitive procedures were used for the se-
lection of parties for participation in the transaction; 
and 
‘‘(B) the participants in the transaction success-
fully completed the prototype project provided for in 
the transaction. 
‘‘(3) Contracts and transactions entered into pursuant 
to this subsection may be awarded using the authority in 
subsection (a), under the authority of chapter 137 of this 
title, or under such procedures, terms, and conditions as 
the Secretary of Defense may establish by regulation. 
‘‘(g) AUTHORITY TO PROVIDE PROTOTYPES AND FOL-
LOW-ON PRODUCTION ITEMS AS GOVERNMENT FURNISHED 
EQUIPMENT.—An agreement entered pursuant to the au-
thority of subsection (a) or a follow-on contract entered pur-
suant to the authority of subsection (f) may provide for pro-
totypes or follow-on production items to be provided to an-
other contractor as government-furnished equipment. 
‘‘(h) APPLICABILITY OF PROCUREMENT ETHICS RE-
QUIREMENTS.—An agreement entered into under the au-
thority of this section shall be treated as a Federal agency 
procurement for the purposes of chapter 21 of title 41.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 139 of such title is
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† HR 1735 EAS1S 
amended by inserting after the item relating to sec-
tion 2371a the following new item: 
‘‘2371b. Authority of the Defense Advanced Research Projects Agency to carry out 
certain prototype projects.’’. 
(b) MODIFICATION
TO DEFINITION
OF NON-TRADI-
TIONAL CONTRACTOR.—Section 2302(9) of such title is 
amended to read as follows: 
‘‘(9) The term ‘nontraditional defense con-
tractor’, with respect to a procurement or with respect 
to a transaction authorized under section 2371(a) of 
this title, means an entity that— 
‘‘(A) is not currently performing and has 
not performed, for at least the one-year period 
preceding the solicitation of sources by the De-
partment of Defense for the procurement or 
transaction, any contract or subcontract that is 
subject to full coverage under the cost accounting 
standards prescribed pursuant to 1502 of title 41 
and the regulations implementing such section; 
and 
‘‘(B) has not been awarded, for at least the 
one-year period preceding the solicitation of 
sources by the Department of Defense for the pro-
curement or transaction, any other contract 
under which the contractor was required to sub-
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† HR 1735 EAS1S 
mit certified cost or pricing data under section 
2306a of this title.’’. 
(c) REPEAL OF OBSOLETE AUTHORITY.—Section 845 
of the National Defense Authorization Act for Fiscal Year 
1994 (Public Law 103–160; 10 U.S.C. 2371 note) is hereby 
repealed. 
(d) TECHNICAL AND CONFORMING AMENDMENT.—Sec-
tion 1601(c)(1) of the National Defense Authorization Act 
for Fiscal Year 2004 (Public Law 108–136; 10 U.S.C. 
2370a note) is amended by restating subparagraph (B) to 
read as follows: 
‘‘(B) sections 2371 and 2371b of title 10, United 
States Code.’’. 
SEC. 805. USE OF ALTERNATIVE ACQUISITION PATHS TO AC-
QUIRE CRITICAL NATIONAL SECURITY CAPA-
BILITIES. 
(a) GUIDELINES.—The Secretary of Defense shall es-
tablish procedures and guidelines for alternative acquisition 
pathways to acquire capital assets and services that meet 
critical national security needs. The guidelines shall— 
(1) be separate from existing acquisition proce-
dures and guidelines; 
(2) be supported by streamlined contracting, 
budgeting, and requirements processes;
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† HR 1735 EAS1S 
(3) establish alternative acquisition paths based 
on the capabilities being bought and the time needed 
to deploy these capabilities; and 
(4) maximize the use of flexible authorities in ex-
isting law and regulation. 
(b) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, the Secretary of Defense shall 
submit to the congressional defense committees a report that 
includes a summary of the guidelines established under sub-
section (a) and recommendations for any legislation nec-
essary to meet the objectives set forth in subsection (a) and 
to implement the guidelines established under such sub-
section. 
SEC. 806. SECRETARY OF DEFENSE WAIVER OF ACQUISI-
TION LAWS TO ACQUIRE VITAL NATIONAL SE-
CURITY CAPABILITIES. 
(a) WAIVER AUTHORITY.—The Secretary of Defense is 
authorized to waive any provision of acquisition law or reg-
ulation described in subsection (c) for the purpose of acquir-
ing a capability that would not otherwise be available to 
the Armed Forces of the United States, upon a determina-
tion that— 
(1) the acquisition of the capability is in the 
vital national security interest of the United States;
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† HR 1735 EAS1S 
(2) the application of the law or regulation to be 
waived would impede the acquisition of the capability 
in a manner that would undermine the national secu-
rity of the United States; and 
(3) the underlying purpose of the law or regula-
tion to be waived can be addressed in a different 
manner or at a different time. 
(b) DESIGNATION OF RESPONSIBLE OFFICIAL.—When-
ever the Secretary of Defense makes a determination under 
subsection (a)(1) that the acquisition of a capability is in 
the vital national security interest of the United States, the 
Secretary shall designate a senior official of the Department 
of Defense who shall be personally responsible and account-
able for the rapid and effective acquisition and deployment 
of the needed capability. The Secretary shall provide the 
designated official such authority as the Secretary deter-
mines necessary to achieve this objective, and may use the 
waiver authority in subsection (a) for this purpose. 
(c) ACQUISITION LAWS AND REGULATIONS.— 
(1) IN
GENERAL.—Upon a determination de-
scribed in subsection (a), the Secretary of Defense is 
authorized to waive any provision of law or regula-
tion addressing— 
(A) the establishment of a requirement or 
specification for the capability to be acquired;
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† HR 1735 EAS1S 
(B) research, development, test, and evalua-
tion of the capability to be acquired; 
(C) production, fielding, and sustainment of 
the capability to be acquired; or 
(D) solicitation, selection of sources, and 
award of contracts for the capability to be ac-
quired. 
(2) LIMITATIONS.—Nothing in this subsection 
authorizes the waiver of— 
(A) the requirements of this section; 
(B) any provision of law imposing civil or 
criminal penalties; or 
(C) any provision of law governing the 
proper expenditure of appropriated funds. 
(d) REPORT TO CONGRESS.—The Secretary of Defense 
shall notify the congressional defense committees at least 30 
days before exercising the waiver authority under subsection 
(a). Each such notice shall include— 
(1) an explanation of the basis for determining 
that the acquisition of the capability is in the vital 
national security interest of the United States; 
(2) an identification of each provision of law or 
regulation to be waived; and 
(3) for each provision identified pursuant to 
paragraph (2)—
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† HR 1735 EAS1S 
(A) an explanation of why the application 
of the provision would impede the acquisition in 
a manner that would undermine the national se-
curity of the United States; and 
(B) a description of the time or manner in 
which the underlying purpose of the law or regu-
lation to be waived will be addressed. 
(e) NON-DELEGATION.—The authority of the Secretary 
to waive provisions of laws and regulations under sub-
section (a) is non-delegable. 
SEC. 807. ACQUISITION AUTHORITY OF THE COMMANDER 
OF UNITED STATES CYBER COMMAND. 
(a) AUTHORITY.— 
(1) IN GENERAL.—The Commander of the United 
States Cyber Command shall be responsible for, and 
shall have the authority to conduct, the following ac-
quisition activities: 
(A) Development and acquisition of cyber 
operations-peculiar equipment and capabilities. 
(B) Acquisition of cyber capability-peculiar 
equipment, capabilities, and services. 
(2) ACQUISITION FUNCTIONS.—Subject to the au-
thority, direction, and control of the Secretary of De-
fense, the Commander shall have authority to exercise
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† HR 1735 EAS1S 
the functions of the head of an agency under chapter 
137 of title 10, United States Code. 
(b) COMMAND ACQUISITION EXECUTIVE.— 
(1) IN GENERAL.—The staff of the Commander 
shall include a command acquisition executive, who 
shall be responsible for the overall supervision of ac-
quisition matters for the United States Cyber Com-
mand. The command acquisition executive shall have 
the authority— 
(A) to negotiate memoranda of agreement 
with the military departments to carry out the 
acquisition of equipment, capabilities, and serv-
ices described in subsection (a)(1) on behalf of 
the Command; 
(B) to supervise the acquisition of equip-
ment, capabilities, and services described in sub-
section (a)(1); 
(C) to represent the Command in discus-
sions with the military departments regarding 
acquisition programs for which the Command is 
a customer; and 
(D) to work with the military departments 
to ensure that the Command is appropriately 
represented in any joint working group or inte-
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† HR 1735 EAS1S 
grated product team regarding acquisition pro-
grams for which the Command is a customer. 
(2) DELIVERY OF ACQUISITION SOLUTIONS.—The 
command acquisition executive of the United States 
Cyber Command shall be— 
(A) responsible to the Commander for rap-
idly delivering acquisition solutions to meet vali-
dated cyber operations-peculiar requirements; 
(B) subordinate to the defense acquisition 
executive in matters of acquisition; 
(C) subject to the same oversight as the serv-
ice acquisition executives; and 
(D) included on the distribution list for ac-
quisition directives and instructions of the De-
partment of Defense. 
(c) ACQUISITION PERSONNEL.— 
(1) IN GENERAL.—The Secretary of Defense shall 
provide the United States Cyber Command with the 
personnel or funding equivalent to ten full-time equiv-
alent personnel to support the Commander in ful-
filling the acquisition responsibilities provided for 
under this section with experience in— 
(A) program acquisition; 
(B) the Joint Capabilities Integration and 
Development System Process;
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† HR 1735 EAS1S 
(C) program management; 
(D) system engineering; and 
(E) costing. 
(2) EXISTING PERSONNEL.—The personnel pro-
vided under this subsection shall be provided from 
among the existing personnel of the Department of 
Defense. 
(d) INSPECTOR GENERAL ACTIVITIES.—The staff of 
the Commander of the United States Cyber Command shall 
on a periodic basis include a representative from the De-
partment of Defense Office of Inspector General who shall 
conduct internal audits and inspections of purchasing and 
contracting actions through the United States Cyber Com-
mand and such other Inspector General functions as may 
be assigned. 
(e) BUDGET.—In addition to the activities of a com-
batant command for which funding may be requested under 
section 166(b) of title 10, United States Code, the budget 
proposal of the United States Cyber Command shall include 
requests for funding for— 
(1) development and acquisition of cyber oper-
ations-peculiar equipment; and 
(2) acquisition of other capabilities or services 
that are peculiar to offensive cyber operations activi-
ties.
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† HR 1735 EAS1S 
(f) CYBER OPERATIONS PROCUREMENT FUND.—There 
is authorized to be appropriated for each of fiscal years 
2016 through 2021, out of funds made available for procure-
ment, Defense-wide, $75,000,000 for a Cyber Operations 
Procurement Fund to support acquisition activities pro-
vided for under this section. 
(g) RULE
OF CONSTRUCTION REGARDING INTEL-
LIGENCE AND SPECIAL ACTIVITIES.—Nothing in this sec-
tion shall be construed to constitute authority to conduct 
any activity which, if carried out as an intelligence activity 
by the Department of Defense, would require a notice to 
the Select Committee on Intelligence of the Senate and the 
Permanent Select Committee on Intelligence of the House 
of Representatives under title V of the National Security 
Act of 1947 (50 U.S.C. 3091 et seq.). 
(h) SUNSET.— 
(1) IN GENERAL.—The authority under this sec-
tion shall terminate on September 30, 2021. 
(2) LIMITATION
ON
DURATION
OF
ACQUISI-
TIONS.—The authority under this section does not in-
clude major defense acquisitions or acquisitions of 
foundational infrastructure or software architectures 
the duration of which is expected to last more than 
five years.
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† HR 1735 EAS1S 
SEC. 808. ADVISORY PANEL ON STREAMLINING AND CODI-
FYING ACQUISITION REGULATIONS. 
(a) ESTABLISHMENT.—Not later than 180 days after 
the date of the enactment of this Act, the Secretary of De-
fense shall establish under the sponsorship of the Defense 
Acquisition University and the National Defense Univer-
sity an advisory panel on streamlining acquisition regula-
tions. 
(b) MEMBERSHIP.—The panel shall be composed of at 
least nine individuals who are recognized experts in acqui-
sition and procurement policy. In making appointments to 
the advisory panel, the Under Secretary shall ensure that 
the members of the panel reflect diverse experiences in the 
public and private sectors. 
(c) DUTIES.—The panel shall— 
(1) review the acquisition regulations applicable 
to the Department of Defense with a view toward 
streamlining and improving the efficiency and effec-
tiveness of the defense acquisition process and main-
taining defense technology advantage; and 
(2) make any recommendations for the amend-
ment or repeal of such regulations that the panel con-
siders necessary, as a result of such review, to— 
(A) establish and administer appropriate 
buyer and seller relationships in the procurement 
system;
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† HR 1735 EAS1S 
(B) improve the functioning of the acquisi-
tion system; 
(C) ensure the continuing financial and eth-
ical integrity of defense procurement programs; 
(D) protect the best interests of the Depart-
ment of Defense; and 
(E) eliminate any regulations that are un-
necessary for the purposes described in subpara-
graphs (A) through (D). 
(d) ADMINISTRATIVE MATTERS.— 
(1) IN GENERAL.—The Secretary of Defense shall 
provide the advisory panel established pursuant to 
subsection (a) with timely access to appropriate infor-
mation, data, resources, and analysis so that the ad-
visory panel may conduct a thorough and inde-
pendent assessment as required under such subsection. 
(2) INAPPLICABILITY
OF
FACA.—The require-
ments of the Federal Advisory Committee Act (5 
U.S.C. App.) shall not apply to the advisory panel es-
tablished pursuant to subsection (a). 
(e) REPORT.— 
(1) PANEL REPORT.—Not later than two years 
after the date on which the Secretary of Defense estab-
lishes the advisory panel, the panel shall transmit a 
final report to the Secretary.
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(2) ELEMENTS.—The final report shall contain a 
detailed statement of the findings and conclusions of 
the panel, including— 
(A) a history of each current acquisition 
regulation and a recommendation as to whether 
the regulation and related law (if applicable) 
should be retained, modified, or repealed; and 
(B) such additional recommendations for 
legislation as the panel considers appropriate. 
(3) INTERIM REPORTS.—(A) Not later than 6 
months and 18 months after the date of the enactment 
of this Act, the Secretary of Defense shall submit a re-
port to or brief the congressional defense committees 
on the interim findings of the panel with respect to 
the elements set forth in paragraph (2). 
(B) The panel shall provide regular updates to 
the Secretary of Defense for purposes of providing the 
interim reports required under this paragraph. 
(4) FINAL
REPORT.—Not later than 30 days 
after receiving the final report of the advisory panel, 
the Secretary of Defense shall transmit the final re-
port, together with such comments as the Secretary 
determines appropriate, to the congressional defense 
committees.
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† HR 1735 EAS1S 
(f) DEFENSE ACQUISITION WORKFORCE DEVELOP-
MENT FUND SUPPORT.—The Secretary of Defense may use 
amounts available in the Department of Defense Acquisi-
tion Workforce Development Fund established under section 
1705 of title 10, United States Code, to support activities 
of the advisory panel under this section. 
SEC. 809. REVIEW OF TIME-BASED REQUIREMENTS PROC-
ESS AND BUDGETING AND ACQUISITION SYS-
TEMS. 
(a) TIME-BASED REQUIREMENTS PROCESS.—The Sec-
retary of Defense and the Chairman of the Joint Chiefs of 
Staff shall review the requirements process with the goal 
of establishing an agile and streamlined system that devel-
ops requirements that provide stability and foundational 
direction for acquisition programs. The requirements sys-
tem should be informed by technological market research 
and provide a time-based or phased distinction between ca-
pabilities needed to be deployed urgently, within 2 years, 
within 5 years, and longer than 5 years. 
(b) BUDGETING
AND ACQUISITION SYSTEMS.—The 
Secretary of Defense shall review and ensure that the acqui-
sition and budgeting systems are structured to meet time- 
based or phased requirements in a manner that is predict-
able, cost effective, and efficient and takes advantage of 
emerging technological developments. The Secretary shall
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† HR 1735 EAS1S 
make all necessary changes in regulation and policy to 
achieve a time-based requirements, budgeting, and acquisi-
tion system and shall identify and report to Congress with-
in 180 days after the date of the enactment of this Act on 
any statutory impediments to achieving such a system. 
SEC. 810. IMPROVEMENT OF PROGRAM AND PROJECT MAN-
AGEMENT BY THE DEPARTMENT OF DEFENSE. 
(a) DEPARTMENT-WIDE RESPONSIBILITIES OF SEC-
RETARY
OF DEFENSE.—In fulfilling the responsibilities 
under chapter 87 of title 10, United States Code, the Sec-
retary of Defense shall— 
(1) develop Department-wide standards, policies, 
and guidelines for program and project management 
for the Department of Defense based on appropriate 
and applicable nationally accredited standards for 
program and project management; 
(2) develop polices to monitor compliance with 
the standards, policies, and guidelines developed 
under paragraph (1); and 
(3) engage with the private sector on matters re-
lating to program and project management for the 
Department. 
(b) RESPONSIBILITIES OF USD (ATL).—In fulfilling 
the responsibilities under chapter 87 of title 10, United 
States Code, for the military departments and the Defense
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Agencies, the Under Secretary of Defense for Acquisition, 
Technology, and Logistics shall— 
(1) advise and assist Secretary of Defense with 
respect Department of Defense practices related to 
program and project management; 
(2) review programs identified as high-risk in 
program and project management by the Government 
Accountability Office, and make recommendations for 
actions to be taken by the Secretary to mitigate such 
risks; 
(3) assess matters of importance to the workforce 
in program and project management, including— 
(A) career development and workforce devel-
opment; 
(B) policies to support continuous improve-
ment in program and project management; and 
(C) major challenges of the Department in 
managing programs and projects; and 
(4) advise on the development and applicability 
of standards Department-wide for program and 
project management transparency. 
(c) RESPONSIBILITIES
OF
ACQUISITION
EXECU-
TIVES.—In fulfilling the responsibilities under chapter 87 
of title 10, United States Code, for the military depart-
ments, the service acquisition executives (in consultation
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with the Chiefs of the Armed Forces with respect to military 
program managers), and the component acquisition execu-
tives for the Defense Agencies, shall— 
(1) ensure the compliance of the department or 
Agency concerned with standards, policies, and guide-
lines for program and project management for the De-
partment of Defense developed by the Secretary of De-
fense under subsection (a)(1); and 
(2) ensure the effective career development of pro-
gram managers through— 
(A) training and educational opportunities 
for program managers, including exchange pro-
grams with the private sector; 
(B) mentoring of current and future pro-
gram managers by experienced public and pri-
vate sector senior executives and program man-
agers; 
(C) continued refinement of career paths 
and career opportunities for program managers; 
(D) incentives for the recruitment of highly 
qualified individuals to serve as program man-
agers; 
(E) improved means of collecting and dis-
seminating best practices and lessons learned to 
enhance program management; and
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(F) improved methods to support improved 
data gathering and analysis for program man-
agement and oversight purposes. 
(d) DEADLINE
FOR
STANDARDS, POLICIES, 
AND 
GUIDELINES.—Not later than one year after the date of the 
enactment of this Act, the Secretary of Defense shall issue 
the standards, policies, and guidelines required by sub-
section (a)(1). The Secretary shall provide Congress an in-
terim update on the progress made in implementing this 
section not later than six months after the date of the enact-
ment of this Act. 
Subtitle B—Amendments to General 
Contracting Authorities, Proce-
dures, and Limitations 
SEC. 821. PREFERENCE FOR FIXED-PRICE CONTRACTS IN 
DETERMINING CONTRACT TYPE FOR DEVEL-
OPMENT PROGRAMS. 
(a) ESTABLISHMENT
OF PREFERENCE.—Not later 
than 180 days after the date of the enactment of this Act, 
the Defense Federal Acquisition Regulation Supplement 
shall be revised to establish a preference for fixed-price con-
tracts, including fixed-price incentive fee contracts, in the 
determination of contract type for development programs. 
(b) TECHNICAL AND CONFORMING CHANGES.—Section 
818(c) of the John Warner National Defense Authorization
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Act for Fiscal Year 2007 (Public Law 109–364; 120 Stat. 
2329) is amended— 
(1) in the first sentence, by inserting ‘‘or major 
automated information system’’ after ‘‘major defense 
acquisition program’’; and 
(2) by striking the second sentence. 
SEC. 822. APPLICABILITY OF COST AND PRICING DATA AND 
CERTIFICATION REQUIREMENTS. 
Section 2306a(b)(1) of title 10, United States Code, is 
amended— 
(1) in subparagraph (B), by striking ‘‘; or’’ and 
inserting a semicolon; 
(2) in subparagraph (C), by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(D) to the extent such data relates to an 
offset agreement in connection with a contract 
for the sale of a weapon system or defense-related 
item to a foreign country or foreign firm.’’. 
SEC. 823. RISK-BASED CONTRACTING FOR SMALLER CON-
TRACT ACTIONS UNDER THE TRUTH IN NEGO-
TIATIONS ACT. 
(a) INCREASE IN THRESHOLDS.—Subsection (a) of 
section 2306a of title 10, United States Code, is amended—
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(1) in paragraph (1)— 
(A) by striking ‘‘December 5, 1990’’ each 
place it appears and inserting ‘‘January 15, 
2016’’; 
(B) by striking ‘‘$500,000’’ each place it 
appears and inserting ‘‘$5,000,000’’; and 
(C) by striking ‘‘$100,000’’ each place it ap-
pears and inserting ‘‘$750,000’’; and 
(2) in paragraph (7), by striking ‘‘fiscal year 
1994 constant dollar value’’ and inserting ‘‘fiscal year 
2016 constant dollar value’’. 
(b) RISK-BASED CONTRACTING.—Subsection (c) of 
such section is amended to read as follows: 
‘‘(c) COST OR PRICING DATA ON BELOW-THRESHOLD 
CONTRACTS.— 
‘‘(1) AUTHORITY
TO
REQUIRE
SUBMISSION.— 
Subject to paragraph (4), when certified cost or pric-
ing data are not required to be submitted by sub-
section (a) for a contract, subcontract, or modifica-
tion of a contract or subcontract, such data may nev-
ertheless be required to be submitted by the head of the 
procuring activity, if the head of the procuring activ-
ity— 
‘‘(A) determines that such data are nec-
essary for the evaluation by the agency of the
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reasonableness of the price of the contract, sub-
contract, or modification of a contract or sub-
contract; or 
‘‘(B) requires the submission of such data in 
accordance with a risk-based contracting ap-
proach established pursuant to paragraph (3). 
‘‘(2) WRITTEN DETERMINATION REQUIRED.—In 
any case in which the head of the procuring activity 
requires certified cost or pricing data to be submitted 
under paragraph (1)(A), the head of the procuring ac-
tivity shall justify in writing the reason for such re-
quirement. 
‘‘(3) RISK-BASED
CONTRACTING.—The head of 
an agency shall establish a risk-based sampling ap-
proach under which the submission of certified cost or 
pricing data may be required for a risk-based sample 
of contracts, the price of which is expected to exceed 
the dollar amount in subsection (a)(1)(A)(ii), but not 
the amount in subsection (a)(1)(A)(i). The authority 
to require certified cost or pricing data under this 
paragraph shall not apply to any contract of an offer-
or that has not been awarded, for at least the one-year 
period preceding the issuance of a solicitation for the 
contract, any other contract in excess of the amount 
in subsection (a)(1)(A)(i) under which the offeror was
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required to submit certified cost or pricing data 
under this section. 
‘‘(4) EXCEPTION.—The head of the procuring ac-
tivity may not require certified cost or pricing data 
to be submitted under this subsection for any contract 
or subcontract, or modification of a contract or sub-
contract, covered by the exceptions in subparagraph 
(A) or (B) of subsection (b)(1). 
‘‘(5) DELEGATION
OF
AUTHORITY
PROHIB-
ITED.—The head of a procuring activity may not del-
egate functions under this subsection.’’. 
SEC. 824. LIMITATION ON USE OF REVERSE AUCTION AND 
LOWEST PRICE TECHNICALLY ACCEPTABLE 
CONTRACTING METHODS. 
Not later than 180 days after the date of the enactment 
of this Act, the Federal Acquisition Regulation and the De-
fense Supplement to the Federal Acquisition Regulation 
shall be amended— 
(1) to prohibit the use by the Department of De-
fense of reverse auction or lowest price technically ac-
ceptable contracting methods for the procurement of 
personal protective equipment where the level of qual-
ity or failure of the item could result in combat cas-
ualties; and
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(2) to establish a preference for the use of best 
value contracting methods for the procurement of such 
equipment. 
SEC. 825. RIGHTS IN TECHNICAL DATA. 
(a) RIGHTS IN TECHNICAL DATA RELATING TO MAJOR 
WEAPON SYSTEMS.—Paragraph (2) of section 2321(f) of 
title 10, United States Code, is amended to read as follows: 
‘‘(2) In the case of a challenge to a use or release re-
striction that is asserted with respect to technical data of 
a contractor or subcontractor for a major system or a sub-
system or component thereof on the basis that the major 
weapon system, subsystem, or component was developed ex-
clusively at private expense— 
‘‘(A) the presumption in paragraph (1) shall 
apply— 
‘‘(i) with regard to a commercial subsystem 
or component of a major system, if the major 
system was acquired as a commercial item in ac-
cordance with section 2379(a) of this title; 
‘‘(ii) with regard to a component of a sub-
system, if the subsystem was acquired as a com-
mercial item in accordance with section 2379(b) 
of this title; and 
‘‘(iii) with regard to any other component, 
if the component is a commercially available off-
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the-shelf item or a commercially available off- 
the-shelf item with modifications of a type cus-
tomarily available in the commercial market-
place or minor modifications made to meet Fed-
eral Government requirements; and 
‘‘(B) in all other cases, the challenge to the use 
or release restriction shall be sustained unless infor-
mation provided by the contractor or subcontractor 
demonstrates that the item was developed exclusively 
at private expense.’’. 
(b) GOVERNMENT-INDUSTRY ADVISORY PANEL.— 
(1) ESTABLISHMENT.—Not later than 90 days 
after the date of the enactment of this Act, the Sec-
retary of Defense, acting through the Under Secretary 
of Defense for Acquisition, Technology, and Logistics, 
shall establish a government-industry advisory panel 
for the purpose of reviewing sections 2320 and 2321 
of title 10, United States Code, regarding rights in 
technical data and the validation of proprietary data 
restrictions and the regulations implementing such 
sections, for the purpose of ensuring that such statu-
tory and regulatory requirements are best structured 
to serve the interests of the taxpayers and the national 
defense.
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(2) MEMBERSHIP.—The panel shall be chaired 
by an individual selected by the Under Secretary, and 
the Under Secretary shall ensure that— 
(A) the government members of the advisory 
panel are knowledgeable about technical data 
issues and appropriately represent the three 
military departments, as well as the legal, acqui-
sition, logistics, and research and development 
communities in the Department of Defense; and 
(B) the private sector members of the advi-
sory panel include independent experts and indi-
viduals appropriately representative of the diver-
sity of interested parties, including large and 
small businesses, traditional and non-traditional 
government contractors, prime contractors and 
subcontractors, suppliers of hardware and soft-
ware, and institutions of higher education. 
(3) SCOPE OF REVIEW.—In conducting the re-
view required by paragraph (1), the advisory panel 
shall give appropriate consideration to the following 
factors: 
(A) Ensuring that the Department of De-
fense does not pay more than once for the same 
work.
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(B) Ensuring that Department of Defense 
contractors are appropriately rewarded for their 
innovation and invention. 
(C) Providing for cost-effective reprocure-
ment, sustainment, modification, and upgrades 
to Department of Defense systems. 
(D) Encouraging the private sector to invest 
in new products, technologies, and processes rel-
evant to the missions of the Department of De-
fense. 
(E) Ensuring that the Department of De-
fense has appropriate access to innovative prod-
ucts, technologies, and processes developed by the 
private sector for commercial use. 
(4) FINAL REPORT.—Not later than September 
30, 2016, the advisory panel shall submit its final re-
port and recommendations to the Secretary of De-
fense. Not later than 60 days after receiving the re-
port, the Secretary shall submit a copy of the report, 
together with any comments or recommendations, to 
the congressional defense committees. 
SEC. 826. PROCUREMENT OF SUPPLIES FOR EXPERIMENTAL 
PURPOSES. 
(a) ADDITIONAL PROCUREMENT AUTHORITY.—Sub-
section (a) of section 2373 of title 10, United States Code,
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is amended by inserting ‘‘transportation, energy, medical, 
space-flight,’’ before ‘‘and aeronautical supplies’’. 
(b) APPLICABILITY OF CHAPTER 137 OF TITLE 10, 
UNITED STATES CODE.—Subsection (b) of such section is 
amended by striking ‘‘only when such purchases are made 
in quantity’’ and inserting ‘‘only when such purchases are 
made in quantities greater than necessary for experimen-
tation, technical evaluation, assessment of operational util-
ity, or safety or to provide a residual operational capa-
bility’’. 
SEC. 827. EXTENSION OF AUTHORITY TO ACQUIRE PROD-
UCTS AND SERVICES PRODUCED IN COUN-
TRIES ALONG A MAJOR ROUTE OF SUPPLY TO 
AFGHANISTAN. 
Section 801(f) of the National Defense Authorization 
Act for Fiscal Year 2010 (Public Law 111–84; 123 Stat. 
2399), as most recently amended by section 832(a) of the 
National Defense Authorization Act for Fiscal Year 2014 
(Public Law 113–66; 127 Stat. 814), is further amended 
by striking ‘‘December 31, 2015’’ and inserting ‘‘December 
31, 2016’’.
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SEC. 828. REPORTING RELATED TO FAILURE OF CONTRAC-
TORS TO MEET GOALS UNDER NEGOTIATED 
COMPREHENSIVE SMALL BUSINESS SUBCON-
TRACTING PLANS. 
Paragraph (2) of section 834(d) of the National De-
fense Authorization Act for Fiscal Years 1990 and 1991 (15 
U.S.C. 637 note), as added by section 821(d)(2) of the Carl 
Levin and Howard P. ‘‘Buck’’ McKeon National Defense 
Authorization Act for Fiscal Year 2015 (Public Law 113– 
291; 128 Stat. 3434) is amended by striking ‘‘may not nego-
tiate’’ and all that follows through the period at the end 
and inserting ‘‘shall report to Congress on any negotiated 
comprehensive subcontracting plan that the Secretary deter-
mines did not meet the subcontracting goals negotiated in 
the plan for the prior fiscal year.’’. 
SEC. 829. COMPETITION FOR RELIGIOUS SERVICES CON-
TRACTS. 
The Department of Defense may not preclude a non- 
profit organization from competing for a contract for reli-
gious related services on a United States military installa-
tion.
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SEC. 830. TREATMENT OF INTERAGENCY AND STATE AND 
LOCAL PURCHASES WHEN THE DEPARTMENT 
OF DEFENSE ACTS AS CONTRACT INTER-
MEDIARY FOR THE GENERAL SERVICES AD-
MINISTRATION. 
Contracts executed by the Department of Defense as 
a result of the transfer of contracts from the General Serv-
ices Administration or for which the Department serves as 
an item manager for products on behalf of the General Serv-
ices Administration shall not be subject to requirements 
under chapter 148 of title 10, United States Code, to the 
extent such contracts are for purchases of products by other 
Federal agencies or State or local governments. 
SEC. 831. PILOT PROGRAM FOR STREAMLINING AWARDS 
FOR INNOVATIVE TECHNOLOGY PROJECTS. 
(a) EXCEPTION FROM CERTIFIED COST AND PRICING 
DATE REQUIREMENTS.—The requirements under section 
2306a(a) of title 10, United States Code, shall not apply 
to a contract, subcontract, or modification of a contract or 
subcontract valued at less than $7,500,000 awarded to a 
small business or non-traditional defense contractor pursu-
ant to— 
(1) a technical merit based selection procedure, 
such as a broad agency announcement; or 
(2) the Small Business Innovation Research Pro-
gram,
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unless the head of the agency determines that submission 
of cost and pricing data should be required based on past 
performance of the specific small business or non-tradi-
tional defense contractor, or based on analysis of other in-
formation specific to the award. 
(b) EXCEPTION FROM RECORDS EXAMINATION RE-
QUIREMENT.—The requirements under section 2313 of title 
10, United States Code, shall not apply to a contract valued 
at less than $7,500,000 awarded to a small business or non- 
traditional defense contractor pursuant to— 
(1) a technical merit based selection procedure, 
such as a broad agency announcement; or 
(2) the Small Business Innovation Research Pro-
gram, 
unless the head of the agency determines that auditing of 
records should be required based on past performance of the 
specific small business or non-traditional defense con-
tractor, or based on analysis of other information specific 
to the award. 
(c) SUNSET.—The exceptions under subsections (a) 
and (b) shall terminate on October 1, 2020.