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‘‘(2) The head of a Federal agency shall make management
decisions on all findings and recommendations set forth in an
audit report of any auditor from outside the Federal Government
within a maximum of six months after the date on which the
head of the agency receives the report.
‘‘(b) COMPLETION OF FINAL ACTION.—The head of a Federal
agency shall complete final action on each management decision
required with regard to a recommendation in an inspector general’s
report under subsection (a)(1) within 12 months after the date
of the inspector general’s report. If the head of the agency fails
to complete final action with regard to a management decision
within the 12-month period, the inspector general concerned shall
identify the matter in each of the inspector general’s semiannual
reports pursuant to section 5(a)(3) of the Inspector General Act
of 1978 (5 U.S.C. App.) until final action on the management
decision is completed.’’.
SEC. 811. TEST PROGRAM FOR NEGOTIATION OF COMPREHENSIVE
SUBCONTRACTING PLANS.
(a) REVISION OF AUTHORITY.—Subsection (a) of section 834 of
National Defense Authorization Act for Fiscal Years 1990 and 1991
(15 U.S.C. 637 note) is amended by striking out paragraph (1)
and inserting in lieu thereof the following:
‘‘(1) The Secretary of Defense shall establish a test program
under which contracting activities in the military departments and
the Defense Agencies are authorized to undertake one or more
demonstration projects to determine whether the negotiation and
administration of comprehensive subcontracting plans will reduce
administrative burdens on contractors while enhancing opportuni-
ties provided under Department of Defense contracts for small
business concerns and small business concerns owned and controlled
by socially and economically disadvantaged individuals. In selecting
the contracting activities to undertake demonstration projects, the
Secretary shall take such action as is necessary to ensure that
a broad range of the supplies and services acquired by the Depart-
ment of Defense are included in the test program.’’.
(b) COVERED CONTRACTORS.—Subsection (b) of such section is
amended by striking out paragraph (3) and inserting in lieu thereof
the following:
‘‘(3) A Department of Defense contractor referred to in para-
graph (1) is, with respect to a comprehensive subcontracting plan
negotiated in any fiscal year, a business concern that, during the
immediately preceding fiscal year, furnished the Department of
Defense with supplies or services (including professional services,
research and development services, and construction services) pur-
suant to at least three Department of Defense contracts having
an aggregate value of at least $5,000,000.’’.
(c) TECHNICAL AMENDMENTS.—Such section is amended—
(1) by striking out subsection (g); and
(2) by redesignating subsection (h) as subsection (g).
SEC. 812. PROCUREMENT OF ITEMS FOR EXPERIMENTAL OR TEST
PURPOSES.
Section 2373(b) of title 10, United States Code, is amended
by inserting ‘‘only’’ after ‘‘applies’’ in the second sentence.
H. R. 1530—212
SEC. 813. USE OF FUNDS FOR ACQUISITION OF DESIGNS, PROCESSES,
TECHNICAL DATA, AND COMPUTER SOFTWARE.
Section 2386(3) of title 10, United States Code, is amended
to read as follows:
‘‘(3) Design and process data, technical data, and computer
software.’’.
SEC. 814. INDEPENDENT COST ESTIMATES FOR MAJOR DEFENSE
ACQUISITION PROGRAMS.
Section 2434(b)(1)(A) of title 10, United States Code, is amended
to read as follows:
‘‘(A) be prepared—
‘‘(i) by an office or other entity 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 carrying out the development or acquisition of the
program; or
‘‘(ii) if the decision authority for the program has
been delegated to an official of a military department,
Defense Agency, or other component of the Department
of Defense, by an office or other entity that is not
directly responsible for carrying out the development
or acquisition of the program; and’’.
SEC. 815. CONSTRUCTION, REPAIR, ALTERATION, FURNISHING, AND
EQUIPPING OF NAVAL VESSELS.
(a) APPLICABILITY OF CERTAIN LAW.—Chapter 633 of title 10,
United States Code, is amended by inserting after section 7297
the following:
‘‘§ 7299. Contracts: applicability of Walsh-Healey Act
‘‘Each contract for the construction, alteration, furnishing, or
equipping of a naval vessel is subject to the Walsh-Healey Act
(41 U.S.C. 35 et seq.) unless the President determines that this
requirement is not in the interest of national defense.’’.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of such chapter is amended by inserting after the item relating
to section 7297 the following:
‘‘7299. Contracts: applicability of Walsh-Healey Act.’’.
Subtitle B—Other Matters
SEC. 821. PROCUREMENT TECHNICAL ASSISTANCE PROGRAMS.
(a) FUNDING.—Of the amount authorized to be appropriated
under section 301(5), $12,000,000 shall be available for carrying
out the provisions of chapter 142 of title 10, United States Code.
(b) SPECIFIC PROGRAMS.—Of the amounts made available pursu-
ant to subsection (a), $600,000 shall be available for fiscal year
1996 for the purpose of carrying out programs sponsored by eligible
entities referred to in subparagraph (D) of section 2411(1) of title
10, United States Code, that provide procurement technical assist-
ance in distressed areas referred to in subparagraph (B) of section
2411(2) of such title. If there is an insufficient number of satisfac-
tory proposals for cooperative agreements in such distressed areas
to allow effective use of the funds made available in accordance
H. R. 1530—213
with this subsection in such areas, the funds shall be allocated
among the Defense Contract Administration Services regions in
accordance with section 2415 of such title.
SEC. 822. DEFENSE FACILITY-WIDE PILOT PROGRAM.
(a) AUTHORITY TO CONDUCT DEFENSE FACILITY-WIDE PILOT
PROGRAM.—The Secretary of Defense may conduct a pilot program,
to be known as the ‘‘defense facility-wide pilot program’’, for the
purpose of determining the potential for increasing the efficiency
and effectiveness of the acquisition process in facilities by using
commercial practices on a facility-wide basis.
(b) DESIGNATION OF PARTICIPATING FACILITIES.—(1) Subject to
paragraph (2), the Secretary may designate up to two facilities
as participants in the defense facility-wide pilot program.
(2) The Secretary may designate for participation in the pilot
program only those facilities that are authorized to be so designated
in a law authorizing appropriations for national defense programs
that is enacted after the date of the enactment of this Act.
(c) SCOPE OF PROGRAM.—At a facility designated as a partici-
pant in the pilot program, the pilot program shall consist of the
following:
(1) All contracts and subcontracts for defense supplies and
services that are performed at the facility.
(2) All Department of Defense contracts and all sub-
contracts under Department of Defense contracts performed
elsewhere that the Secretary determines are directly and
substantially related to the production of defense supplies and
services at the facility and are necessary for the pilot program.
(d) CRITERIA FOR DESIGNATION OF PARTICIPATING FACILITIES.—
The Secretary shall establish criteria for selecting a facility for
designation as a participant in the pilot program. In developing
such criteria, the Secretary shall consider the following:
(1) The number of existing and anticipated contracts and
subcontracts performed at the facility—
(A) for which contractors are required to provide cer-
tified cost or pricing data pursuant to section 2306a of
title 10, United States Code; and
(B) which are administered with the application of
cost accounting standards under section 26(f) of the Office
of Federal Procurement Policy Act (41 U.S.C. 422(f)).
(2) The relationship of the facility to other organizations
and facilities performing under contracts with the Department
of Defense and subcontracts under such contracts.
(3) The impact that the participation of the facility under
the pilot program would have on competing domestic
manufacturers.
(4) Such other factors as the Secretary considers
appropriate.
(e) NOTIFICATION.—(1) The Secretary shall transmit to the
Committee on Armed Services of the Senate and the Committee
on National Security of the House of Representatives a written
notification of each facility proposed to be designated by the Sec-
retary for participation in the pilot program.
(2) The Secretary shall include in the notification regarding
a facility designated for participation in the program a management
plan addressing the following:
H. R. 1530—214
(A) The proposed treatment of research and development
contracts or subcontracts to be performed at the facility during
the pilot program.
(B) The proposed treatment of the cost impact of the use
of commercial practices on the award and administration of
contracts and subcontracts performed at the facility.
(C) The proposed method for reimbursing the contractor
for existing and new contracts.
(D) The proposed method for measuring the performance
of the facility for meeting the management goals of the
Secretary.
(E) Estimates of the annual amount and the total amount
of the contracts and subcontracts covered under the pilot
program.
(3)(A) The Secretary shall ensure that the management plan
for a facility provides for attainment of the following objectives:
(i) A significant reduction of the cost to the Government
for programs carried out at the facility.
(ii) A reduction of the schedule associated with programs
carried out at the facility.
(iii) An increased use of commercial practices and proce-
dures for programs carried out at the facility.
(iv) Protection of a domestic manufacturer competing for
contracts at such facility from being placed at a significant
competitive disadvantage by the participation of the facility
in the pilot program.
(B) The management plan for a facility shall also require that
all or substantially all of the contracts to be awarded and performed
at the facility after the designation of that facility under subsection
(b), and all or substantially all of the subcontracts to be awarded
under those contracts and performed at the facility after the des-
ignation, be—
(i) for the production of supplies or services on a firm-
fixed price basis;
(ii) awarded without requiring the contractors or sub-
contractors to provide certified cost or pricing data pursuant
to section 2306a of title 10, United States Code; and
(iii) awarded and administered without the application of
cost accounting standards under section 26(f) of the Office
of Federal Procurement Policy Act (41 U.S.C. 422(f)).
(f) EXEMPTION FROM CERTAIN REQUIREMENTS.—In the case of
a contract or subcontract that is to be performed at a facility
designated for participation in the defense facility-wide pilot pro-
gram and that is subject to section 2306a of title 10, United States
Code, or section 26(f) of the Office of Federal Procurement Policy
Act (41 U.S.C. 422(f)), the Secretary of Defense may exempt such
contract or subcontract from the requirement to obtain certified
cost or pricing data under such section 2306a or the requirement
to apply mandatory cost accounting standards under such section
26(f) if the Secretary determines that the contract or subcontract—
(1) is within the scope of the pilot program (as described
in subsection (c)); and
(2) is fairly and reasonably priced based on information
other than certified cost and pricing data.
(g) SPECIAL AUTHORITY.—The authority provided under sub-
section (a) includes authority for the Secretary of Defense—