223 
SEC. 644. ELECTION TO RECEIVE RETIRED PAY FOR NON- 
REGULAR SERVICE UPON RETIREMENT FOR 
SERVICE IN AN ACTIVE RESERVE STATUS 
PERFORMED AFTER ATTAINING ELIGIBILITY 
FOR REGULAR RETIREMENT. 
(a) ELECTION AUTHORITY; REQUIREMENTS.—Sub-
section (a) of section 12741 of title 10, United States Code, 
is amended to read as follows: 
‘‘(a) AUTHORITY TO ELECT TO RECEIVE RESERVE RE-
TIRED PAY.—(1) A person may elect to receive retired pay 
under this chapter, instead of receiving retired or retainer 
pay under chapter 65, 367, 571, or 867 of this title, if— 
‘‘(A) the person satisfies the requirements speci-
fied in paragraphs (1) and (2) of section 12731(a) of 
this title for entitlement to retired pay under this 
chapter; 
‘‘(B) the person served in an active status in the 
Selected Reserve of the Ready Reserve after becoming 
eligible for retirement under chapter 65, 367, 571, or 
867 of this title (without regard to whether the person 
actually retired or received retired or retainer pay 
under one of those chapters); 
‘‘(C) the person completed not less than two 
years of service in such active status (excluding any 
period of active service); and 
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‘‘(D) the service of the person in such active sta-
tus is determined by the Secretary concerned to have 
been satisfactory. 
‘‘(2) The Secretary concerned may reduce the two-year 
service requirement specified in paragraph (1)(C) in the 
case of a person who— 
‘‘(A) completed at least six months of service in 
a position of adjutant general required under section 
314 of title 32 or in a position of assistant adjutant 
general subordinate to such a position of adjutant 
general; and 
‘‘(B) failed to complete the minimum two years 
of service solely because the appointment of the person 
to such position was terminated or vacated as de-
scribed in section 324(b) of title 32.’’. 
(b) ACTIONS TO EFFECTUATE ELECTION.—Subsection 
(b) of such section is amended by striking paragraph (1) 
and inserting the following new paragraph: 
‘‘(1) terminate the eligibility of the person to re-
tire under chapter 65, 367, 571, or 867 of this title, 
if the person is not already retired under one of those 
chapters, and terminate entitlement of the person to 
retired or retainer pay under one of those chapters, 
if the person was already receiving retired or retainer 
pay under one of those chapters; and’’. 
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(c) CONFORMING AMENDMENT TO REFLECT NEW 
VARIABLE AGE REQUIREMENT FOR RETIREMENT.—Sub-
section (d) of such section is amended— 
(1) in paragraph (1), by striking ‘‘attains 60 
years of age’’ and inserting ‘‘attains the eligibility 
age applicable to the person under section 12731(f) of 
this title’’; and 
(2) in paragraph (2)(A), by striking ‘‘attains 60 
years of age’’ and inserting ‘‘attains the eligibility 
age applicable to the person under such section’’. 
(d) REPEAL OF RESTRICTION ON ELECTION TO RE-
CEIVE RESERVE RETIRED PAY.—Section 12731(a) of such 
title is amended— 
(1) by inserting ‘‘and’’ at the end of paragraph 
(2); 
(2) by striking ‘‘; and’’ at the end of paragraph 
(3) and inserting a period; and 
(3) by striking paragraph (4). 
(e) CLERICAL AMENDMENTS.— 
(1) SECTION HEADING.—The heading for section 
12741 of such title is amended to read as follows: 
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‘‘§ 12741. Retirement for service in an active status 
performed in the Selected Reserve of the 
Ready Reserve after eligibility for regular 
retirement’’. 
(2) TABLE OF SECTIONS.—The table of sections 
at the beginning of chapter 1223 of such title is 
amended by striking the item relating to section 
12741 and inserting the following new item: 
‘‘12741. Retirement for service in an active status performed in the Selected Re-
serve of the Ready Reserve after eligibility for regular retire-
ment.’’. 
(f) RETROACTIVE APPLICABILITY.—The amendments 
made by this section shall take effect as of January 1, 2008. 
SEC. 645. RECOMPUTATION OF RETIRED PAY AND ADJUST-
MENT OF RETIRED GRADE OF RESERVE RE-
TIREES TO REFLECT SERVICE AFTER RETIRE-
MENT. 
(a) RECOMPUTATION.—Section 10145 of title 10, 
United States Code, is amended by adding at the end the 
following new subsection: 
‘‘(e)(1) If a member of the Retired Reserve is recalled 
to an active status under subsection (d) in the Selected Re-
serve of the Ready Reserve and completes not less than two 
years of service in such active status, the member is entitled 
to— 
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‘‘(A) the recomputation of the retired pay of the 
member determined under section 12739 of this title; 
and 
‘‘(B) in the case of a commissioned officer, an 
adjustment in the retired grade of the member in the 
manner provided in section 1370 of this title. 
‘‘(2) The Secretary concerned may reduce the two-year 
service requirement specified in paragraph (1) in the case 
of a member who— 
‘‘(A) is recalled to serve in a position of adjutant 
general required under section 314 of title 32 or in 
a position of assistant adjutant general subordinate 
to such a position of adjutant general; 
‘‘(B) completes at least six months of service in 
such position; and 
‘‘(C) fails to complete the minimum two years of 
service solely because the appointment of the member 
to such position is terminated or vacated as described 
in section 324(b) of title 32.’’. 
(b) RETROACTIVE APPLICABILITY.—The amendment 
made by this section shall take effect as of January 1, 2008. 
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228 
SEC. 646. CORRECTION OF UNINTENDED REDUCTION IN 
SURVIVOR BENEFIT PLAN ANNUITIES DUE TO 
PHASED ELIMINATION OF TWO-TIER ANNUITY 
COMPUTATION AND SUPPLEMENTAL ANNU-
ITY. 
Effective as of October 28, 2004, and as if included 
therein as enacted, section 644(c) of the Ronald W. Reagan 
National Defense Authorization Act for Fiscal Year 2005 
(Public Law 108–375; 118 Stat. 1961; 19 U.S.C. 1450 note) 
is amended by adding at the end the following new para-
graph: 
‘‘(3) SAVINGS PROVISION.—If, as a result of the 
recomputation of annuities under section 1450 of title 
10, United States Code, and supplemental survivor 
annuities under section 1457 of such title, as required 
by paragraph (1), the total amount of both annuities 
to be paid to an annuitant for a month would be less 
(because of the offset required by section 1450(c) of 
such title for dependency and indemnity compensa-
tion) than the amount that would be paid to the an-
nuitant in the absence of recomputation, the Sec-
retary of Defense shall take such actions as are nec-
essary to adjust the annuity amounts to eliminate the 
reduction.’’. 
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229 
SEC. 647. PRESUMPTION OF DEATH FOR PARTICIPANTS IN 
SURVIVOR BENEFIT PLAN IN MISSING STA-
TUS. 
(a) CONDITIONS ON PRESUMPTION.—In the case of a 
participant in the Survivor Benefit Plan who has been de-
termined by the Secretary of State to have been kidnapped 
in Iraq or Afghanistan on or after August 1, 2007, the Sec-
retary of a military department may not make a deter-
mination under section 1450(l) of title 10, United States 
Code, that the participant is missing, with the presumption 
of death, until the earlier of— 
(1) a period of at least 7 years expires after the 
date of the determination of the Secretary of State; or 
(2) the date on which the participant is con-
firmed dead and a death certificate is delivered to the 
next of kin of the participant. 
(b) RESUMPTION OF RETIRED PAY; PAYMENT OF BACK 
PAY.—In the case of a participant in the Survivor Benefit 
Plan described in subsection (a) who was presumed to be 
dead before the date of the enactment of this Act under sec-
tion 1450(l) of title 10, United States Code, the Secretary 
of a military department concerned shall— 
(1) resume payment of any retired pay to which 
the participant is entitled to as a retired member of 
the Armed Forces pending satisfaction of the condi-
tions specified in subsection (a); and 
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230 
(2) pay retired pay for periods occurring before 
the date of the enactment of this Act for which retired 
pay was not paid because of the presumption of 
death. 
Subtitle E—Commissary and Non-
appropriated Fund Instrumen-
tality Benefits and Operations 
SEC. 651. USE OF COMMISSARY STORES SURCHARGES DE-
RIVED FROM TEMPORARY COMMISSARY INI-
TIATIVES FOR RESERVE COMPONENTS AND 
RETIRED MEMBERS. 
Section 2484(h) of title 10, United States Code, is 
amended— 
(1) by redesignating paragraphs (3) and (4) as 
paragraphs (4) and (5), respectively; 
(2) in such paragraph (4), as so redesignated, by 
striking ‘‘paragraph (1) or (2)’’ and inserting ‘‘para-
graph (1), (2), or (3)’’; and 
(3) by inserting after paragraph (2) the fol-
lowing new paragraph: 
‘‘(3)(A) The Secretary of Defense may use the proceeds 
derived from surcharges imposed under subsection (d) in 
connection with sales of commissary merchandise through 
initiatives described in subparagraph (B) to offset the cost 
of such initiatives. 
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231 
‘‘(B) Subparagraph (A) applies with respect to initia-
tives, utilizing temporary and mobile equipment, intended 
to provide members of reserve components, Retired mem-
bers, and other persons eligible for commissary benefits, but 
without reasonable access to commissary stores, improved 
access to commissary merchandise.’’. 
SEC. 652. REQUIREMENTS FOR PRIVATE OPERATION OF 
COMMISSARY STORE FUNCTIONS. 
Section 2485(a)(2) of title 10, United States Code, is 
amended in the last sentence by striking ‘‘December 31, 
2008’’ and inserting ‘‘December 31, 2013’’. 
SEC. 653. ADDITIONAL EXCEPTION TO LIMITATION ON USE 
OF APPROPRIATED FUNDS FOR DEPARTMENT 
OF DEFENSE GOLF COURSES. 
Section 2491a of title 10, United States Code, is 
amended— 
(1) by redesignating paragraph (2) of subsection 
(b) as subsection (c) and, in such subsection (as so re-
designated)— 
(A) by inserting ‘‘REGULATIONS.—’’ before 
‘‘The Secretary’’; and 
(B) by striking ‘‘this subsection’’ and in-
serting ‘‘subsection (b)’’; and 
(2) by inserting after paragraph (1) of sub-
section (b) the following new paragraph: 
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232 
‘‘(2) Subsection (a) does not apply to the purchase and 
maintenance of specialized golf carts designed to accommo-
date persons with disabilities and the use of the golf carts 
at a facility or installation where the Secretary determines 
the golf carts can be safely operated.’’. 
SEC. 654. ENHANCED ENFORCEMENT OF PROHIBITION ON 
SALE OR RENTAL OF SEXUALLY EXPLICIT MA-
TERIAL ON MILITARY INSTALLATIONS. 
(a) ESTABLISHMENT OF RESALE ACTIVITIES REVIEW 
BOARD.—Section 2495b of title 10, United States Code, is 
amended— 
(1) by redesignating subsections (c) and (d) as 
subsections (d) and (e), respectively; and 
(2) by inserting after subsection (b) the following 
new subsection: 
‘‘(c) RESALE ACTIVITIES REVIEW BOARD.—(1) The 
Secretary of Defense shall establish a nine-member board 
to make recommendations to the Secretary regarding wheth-
er material sold or rented, or proposed for sale or rental, 
on property under the jurisdiction of the Department of De-
fense is barred from sale or rental by subsection (a). 
‘‘(2)(A) The Secretary of Defense shall appoint six 
members of the board to broadly represent the interests of 
the patron base served by the defense commissary system 
and the exchange system. The Secretary shall appoint one 
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233 
of the members to serve as the chairman of the board. At 
least one member appointed under this subparagraph shall 
be a person with experience managing or advocating for 
military family programs and who is also an eligible pa-
tron of the defense commissary system and the exchange sys-
tem. 
‘‘(B) The Secretary of each of the military departments 
shall appoint one member of the board. 
‘‘(C) A vacancy on the board shall be filled in the same 
manner as the original appointment. 
‘‘(3) The Secretary of Defense may detail persons to 
serve as staff for the board. At a minimum, the Secretary 
shall ensure that the board is assisted at meetings by mili-
tary resale and legal advisors. 
‘‘(4) The recommendations made by the board under 
paragraph (1) shall be made available to the public. The 
Secretary of Defense shall publicize the availability of such 
recommendations by such means as the Secretary considers 
appropriate. 
‘‘(5) Members of the board shall be allowed travel ex-
pense, including per diem in lieu of subsistence, at rates 
authorized for employees of agencies under subchapter I of 
chapter 57 of title 5 while away from their homes or regular 
places of business in the performance of services for the 
board.’’. 
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234 
(b) DEADLINE
FOR ESTABLISHMENT
AND INITIAL 
MEETING.— 
(1) ESTABLISHMENT.—The board required by 
subsection (c) of section 2495b of title 10, United 
States Code, as added by subsection (a), shall be es-
tablished, and its initial nine members appointed, not 
later than 120 days after the date of the enactment 
of this Act. 
(2) MEETINGS.—The board shall conduct an ini-
tial meeting within one year after the date of the ap-
pointment of the initial members of the board. At the 
discretion of the board, the board may consider all 
materials previously reviewed under such section as 
available for reconsideration for a minimum of 180 
days following the initial meeting of the board. 
SEC. 655. REQUIREMENT TO BUY MILITARY DECORATIONS, 
RIBBONS, BADGES, MEDALS, INSIGNIA, AND 
OTHER 
UNIFORM 
ACCOUTERMENTS 
PRO-
DUCED IN THE UNITED STATES. 
(a) REQUIREMENT.—Subchapter III of chapter 147 of 
title 10, United States Code, is amended by adding at the 
end the following new section: 
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‘‘§ 2495c. Requirement to buy military decorations and 
other uniform accouterments from Amer-
ican sources; exceptions 
‘‘(a) BUY-AMERICAN REQUIREMENT.—A military ex-
change store or other nonappropriated fund instrumentality 
of the Department of Defense may not purchase for resale 
any military decorations, ribbons, badges, medals, insignia, 
and other uniform accouterments that are not produced in 
the United States. 
‘‘(b) EXCEPTION.—Subsection (a) does not apply to the 
extent that the Secretary of Defense determines that— 
‘‘(1) a satisfactory quality and sufficient quan-
tity of an item covered by such subsection and pro-
duced in the United States cannot be procured; or 
‘‘(2) the purchase of the item produced outside 
the United States is in the best interests of members 
of the armed forces. 
‘‘(c) CONGRESSIONAL
NOTIFICATION.—As soon as 
practicable after an exception is granted under subsection 
(b), the Secretary of Defense shall submit to Congress a re-
port explaining the reasons for the exception. 
‘‘(d) UNITED STATES DEFINED.—In this section, the 
term ‘United States’ includes the Commonwealth of Puerto 
Rico, Guam, the United States Virgin Islands, the Com-
monwealth of the Northern Mariana Islands, American 
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236 
Samoa, and any other territory or possession of the United 
States.’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such subchapter is amended by adding at 
the end the following new item: 
‘‘2495c. 
Requirement 
to 
buy 
military 
decorations 
and 
other 
uniform 
accouterments from American sources; exceptions.’’. 
SEC. 656. USE OF APPROPRIATED FUNDS
TO PAY POST AL-
LOWANCES OR OVERSEAS COST OF LIVING 
ALLOWANCES TO NONAPPROPRIATED FUND 
INSTRUMENTALITY 
EMPLOYEES 
SERVING 
OVERSEAS. 
(a) AUTHORITY TO USE APPROPRIATED FUNDS.— 
Chapter 81 of title 10, United States Code, is amended by 
inserting after section 1587a the following new section: 
‘‘§ 1587b. Employees of nonappropriated fund instru-
mentalities: payment of overseas post al-
lowances or overseas cost of living allow-
ances 
‘‘(a) USE OF APPROPRIATED FUNDS TO PAY ALLOW-
ANCES.—Subject to the availability of appropriated funds 
for this purpose, the Secretary of Defense may pay post al-
lowances or cost of living allowances to an nonappropriated 
fund instrumentality employee who is a citizen of the 
United States and is employed in a full-time position at 
a location outside of the continental United States. 
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237 
‘‘(b) DURATION.—The Secretary of Defense may use 
the authority provided by this section to pay post allow-
ances or cost of living allowances that have been due to an 
nonappropriated fund instrumentality employee or former 
employee since December 1, 2001, but have not been pre-
viously paid. No allowance may be provided under this sec-
tion after December 31, 2011. 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) The term ‘nonappropriated fund instrumen-
tality employee’ has the meaning given that term in 
section 1587 of this title. 
‘‘(2) The term ‘continental United States’ means 
the 48 contiguous States and the District of Colum-
bia.’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such chapter is amended by inserting after 
the item relating to section 1587a the following new item: 
‘‘1587b. Employees of nonappropriated fund instrumentalities: payment of over-
seas post allowances or overseas cost of living allowances.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on October 1, 2008. 
SEC. 657. STUDY REGARDING SALE OF ALCOHOLIC WINE 
AND BEER IN COMMISSARY STORES IN ADDI-
TION TO EXCHANGE STORES. 
(a) STUDY REQUIRED.—The Secretary of Defense shall 
conduct a study evaluating the propriety, patron conven-
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239 
Subtitle F—Other Matters 
SEC. 661. BONUS TO ENCOURAGE ARMY PERSONNEL AND 
OTHER PERSONS TO REFER PERSONS FOR 
ENLISTMENT IN THE ARMY. 
(a) AVAILABILITY
OF BONUS
TO TRAINED CIVIL-
IANS.—Subsection (a)(2) of section 3252 of title 10, United 
States Code, is amended by adding at the end the following 
new subparagraph: 
‘‘(F) A member of the general public who has 
completed a training course provided by the Sec-
retary, directly or through an entity contracted to 
provide such training, regarding the appropriate pro-
cedures used to recruit persons for enlistment in the 
Army.’’. 
(b) TIME FOR PAYMENT OF BONUS.—Subsection (b) 
of such section is amended— 
(1) by striking ‘‘or’’ at the end of paragraph (1); 
(2) by striking the period at the end of para-
graph (2) and inserting ‘‘; or’’; and 
(3) by adding at the end the following new para-
graph: 
‘‘(3) when the individual concerned contacts an 
entity contracted to recruit persons for enlistment in 
the Army.’’. 
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240 
(c) PAYMENT METHODS.—Such section is further 
amended— 
(1) in subsection (d), by striking the second sen-
tence; and 
(2) by striking subsection (e) and inserting the 
following new subsection: 
‘‘(e) PAYMENT METHODS.—At the discretion of the 
Secretary, a bonus payable for a referral of a person under 
subsection (a) may be paid— 
‘‘(1) directly to the individual referred to in sub-
section (b) making the referral; or 
‘‘(2) through an entity contracted to make bonus 
payments under this section.’’. 
(d) CLERICAL AMENDMENTS.— 
(1) SECTION HEADING.—The heading of such sec-
tion is amended to read as follows: 
‘‘§ 3252. Bonus to encourage Army personnel and 
other persons to refer persons for enlist-
ment in the Army’’. 
(2) TABLE OF SECTIONS.—The table of sections 
at the beginning of chapter 333 of such title is 
amended by striking the item relating to section 3252 
and inserting the following new item: 
‘‘3252. Bonus to encourage Army personnel and other persons to refer persons for 
enlistment in the Army.’’. 
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241 
SEC. 662. CONTINUATION OF ENTITLEMENT TO BONUSES 
AND SIMILAR BENEFITS FOR MEMBERS OF 
THE UNIFORMED SERVICES WHO DIE, ARE 
SEPARATED OR RETIRED FOR DISABILITY, OR 
MEET OTHER CRITERIA. 
(a) DISCRETION TO PROVIDE EXCEPTION TO TERMI-
NATION AND REPAYMENT REQUIREMENTS UNDER CERTAIN 
CIRCUMSTANCES.—Section 303a(e) of title 37, United 
States Code, is amended— 
(1) in the subsection heading, by inserting ‘‘; 
TERMINATION
OF
ENTITLEMENT
TO
UNPAID 
AMOUNTS’’ after ‘‘MET’’; 
(2) in paragraph (1)— 
(A) by striking ‘‘A member’’ and inserting 
‘‘(A) Except as provided in paragraph (2), a 
member’’; and 
(B) by striking ‘‘the requirements, except in 
certain circumstances authorized by the Sec-
retary concerned.’’ and inserting ‘‘the eligibility 
requirements and may not receive any unpaid 
amounts of the bonus or similar benefit after the 
member fails to satisfy the requirements, unless 
the Secretary concerned determines that the im-
position of the repayment requirement and ter-
mination of the payment of unpaid amounts of 
the bonus or similar benefit with regard to the 
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242 
member would be contrary to a personnel policy 
or management objective, would be against eq-
uity and good conscience, or would be contrary 
to the best interests of the United States.’’; and 
(3) by redesignating paragraph (2) as subpara-
graph (B) of paragraph (1). 
(b) MANDATORY
PAYMENT
OF
UNPAID
AMOUNTS 
UNDER CERTAIN CIRCUMSTANCES; NO REPAYMENT OF UN-
EARNED AMOUNTS.—Section 303a(e) of title 37, United 
States Code, is amended by inserting after paragraph (1), 
as amended by subsection (a), the following new paragraph 
(2): 
‘‘(2)(A) If a member of the uniformed services dies 
(other than as a result the member’s misconduct) or is re-
tired or separated for disability under chapter 61 of title 
10, the Secretary concerned— 
‘‘(i) shall not require repayment by the member 
or the member’s estate of the unearned portion of any 
bonus or similar benefit previously paid to the mem-
ber; and 
‘‘(ii) shall require the payment to the member or 
the member’s estate of the remainder of any bonus or 
similar benefit that was not yet paid to the member, 
but to which the member was entitled immediately be-
fore the death, retirement, or separation of the mem-
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243 
ber, and would be paid if not for the death, retire-
ment, or separation of the member. 
‘‘(B) The amount to be paid under subparagraph 
(A)(ii) shall be equal to the full amount specified by the 
agreement or contract applicable to the bonus or similar 
benefit as if the member continued to be entitled to the 
bonus or similar benefit following the death, retirement, or 
separation. 
‘‘(C) Amounts to be paid to a member or the member’s 
estate under subparagraph (A)(ii) shall be paid in a lump 
sum not later than 90 days after the date of the death, re-
tirement, or separation of the member, whichever applies.’’. 
(c) CONFORMING AMENDMENTS REFLECTING CONSOLI-
DATED SPECIAL PAY AND BONUS AUTHORITIES.— 
(1) CONFORMING AMENDMENTS.—Section 373 of 
title 37, United States Code, as added by section 661 
of the National Defense Authorization Act for Fiscal 
Year 2008, is amended— 
(A) in subsection (a)— 
(i) in the subsection heading, by insert-
ing ‘‘AND
TERMINATION’’ after ‘‘REPAY-
MENT’’; and 
(ii) by inserting before the period at 
the end the following: ‘‘, and the member 
may not receive any unpaid amounts of the 
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bonus, incentive pay, or similar benefit 
after the member fails to satisfy such service 
or eligibility requirement’’; and 
(B) by striking subsection (b) and inserting 
the following new subsection: 
‘‘(b) EXCEPTIONS.— 
‘‘(1) DISCRETION
TO
PROVIDE
EXCEPTION
TO 
TERMINATION
AND
REPAYMENT
REQUIREMENTS.— 
Pursuant to the regulations prescribed to administer 
this section, the Secretary concerned may grant an 
exception to the repayment requirement and require-
ment to terminate the payment of unpaid amounts of 
a bonus, incentive pay, or similar benefit if the Sec-
retary concerned determines that the imposition of the 
repayment and termination requirements with regard 
to a member of the uniformed services would be con-
trary to a personnel policy or management objective, 
would be against equity and good conscience, or 
would be contrary to the best interests of the United 
States. 
‘‘(2) MANDATORY PAYMENT OF UNPAID AMOUNTS 
UNDER CERTAIN CIRCUMSTANCES; NO REPAYMENT OF 
UNEARNED AMOUNTS.—(A) If a member of the uni-
formed services dies (other than as a result the mem-
ber’s misconduct) or is retired or separated for dis-
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ability under chapter 61 of title 10, the Secretary 
concerned— 
‘‘(i) shall not require repayment by the 
member or the member’s estate of the unearned 
portion of any bonus, incentive pay, or similar 
benefit previously paid to the member; and 
‘‘(ii) shall require the payment to the mem-
ber or the member’s estate of the remainder of 
any bonus, incentive pay, or similar benefit that 
was not yet paid to the member, but to which the 
member was entitled immediately before the 
death, retirement, or separation of the member, 
and would be paid if not for the death, retire-
ment, or separation of the member. 
‘‘(B) The amount to be paid under subparagraph 
(A)(ii) shall be equal to the full amount specified by 
the agreement or contract applicable to the bonus, in-
centive pay, or similar benefit as if the member con-
tinued to be entitled to the bonus, incentive pay, or 
similar benefit following the death, retirement, or sep-
aration. 
‘‘(C) Amounts to be paid to a member or the 
member’s estate under subparagraph (A)(ii) shall be 
paid in a lump sum not later than 90 days after the 
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date of the death, retirement, or separation of the 
member, whichever applies.’’. 
(2) CLERICAL AMENDMENTS.— 
(A) SECTION
HEADING.—The heading of 
such section is amended to read as follows: 
‘‘§ 373. Repayment of unearned portion of bonus, in-
centive pay, or similar benefit, and termi-
nation of remaining payments, when con-
ditions of payment not met’’. 
(B) TABLE OF CONTENTS.—The table of sec-
tions at the beginning of chapter 5 of title 37, 
United States Code, is amended by striking the 
item relating to section 373 and inserting the 
following new item: 
‘‘373. Repayment of unearned portion of bonus, incentive pay, or similar benefit, 
and termination of remaining payments, when conditions of 
payment not met.’’. 
SEC. 663. PROVIDING INJURED MEMBERS OF THE ARMED 
FORCES INFORMATION CONCERNING BENE-
FITS. 
Section 1651 of the National Defense Authorization 
Act for Fiscal Year 2008 (Public Law 110–181; 122 Stat. 
476; 10 U.S.C. 1071 note) is amended to read as follows: 
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‘‘SEC. 1651. HANDBOOK FOR MEMBERS OF THE ARMED 
FORCES ON COMPENSATION AND BENEFITS 
AVAILABLE FOR SERIOUS INJURIES AND ILL-
NESSES. 
‘‘(a) INFORMATION ON AVAILABLE COMPENSATION AND 
BENEFITS.—Not later than March 31, 2009, the Secretary 
of Defense shall develop and maintain a comprehensive de-
scription of the compensation and other benefits to which 
a member of the Armed Forces, and the family of such mem-
ber, would be entitled upon the separation or retirement of 
the member from the Armed Forces as a result of a serious 
injury or illness. Such description shall be published— 
‘‘(1) in a handbook; and 
‘‘(2) on a publically available, searchable Inter-
net website or comparable successor facility. 
‘‘(b) CONTENTS.—The comprehensive description shall 
include the following: 
‘‘(1) The range of compensation and benefits 
based on grade, length of service, degree of disability 
at separation or retirement, and other factors affect-
ing compensation and benefits as the Secretary con-
siders appropriate. 
‘‘(2) Information concerning the Disability Eval-
uation System of each military department, includ-
ing— 
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‘‘(A) an explanation of the process of the 
Disability Evaluation System; 
‘‘(B) a general timeline of the process of the 
Disability Evaluation System; 
‘‘(C) the role and responsibilities of the 
military department throughout the process of 
the Disability Evaluation System; and 
‘‘(D) the role and responsibilities of a mem-
ber of the Armed Forces throughout the process 
of the Disability Evaluation System. 
‘‘(3) Benefits administered by the Department of 
Veterans Affairs that a member of the Armed Forces 
would be entitled upon the separation or retirement 
from the Armed Forces as a result of a serious injury 
or illness. 
‘‘(4) A list of State veterans service organizations 
and their contact information and Internet website 
addresses. 
‘‘(c) CONSULTATION.—The Secretary of Defense shall 
develop and maintain the comprehensive description re-
quired by subsection (a) in consultation with the Secretary 
of Veterans Affairs, the Secretary of Health and Human 
Services, and the Commissioner of Social Security. 
‘‘(d) UPDATE.—The Secretary of Defense shall up-
date— 
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‘‘(1) the handbook on a periodic basis, but not 
less often than annually; and 
‘‘(2) the Internet website or comparable successor 
facility immediately after any change has been made 
to the compensation or other benefits described in sub-
section (a). 
‘‘(e) PROVISION TO MEMBERS.—The Secretary of the 
military department concerned shall provide the handbook 
to each member of the Armed Forces under the jurisdiction 
of that Secretary as soon as practicable following an injury 
or illness for which the member may retire or separate from 
the Armed Forces. 
‘‘(f) PROVISION TO REPRESENTATIVES.—If a member 
is incapacitated or otherwise unable to receive the hand-
book, the handbook shall be provided to the next of kin or 
a legal representative of the member, as determined in ac-
cordance with regulations prescribed by the Secretary of the 
military department concerned for purposes of this sec-
tion.’’. 
TITLE VII—HEALTH CARE 
PROVISIONS 
Subtitle A—Improvements to Health Benefits 
Sec. 701. One-year extension of prohibition on increases in certain health care 
costs for members of the uniformed services. 
Sec. 702. Temporary prohibition on increase in copayments under retail phar-
macy system of pharmacy benefits program. 
Sec. 703. Prohibition on conversion of military medical and dental positions to 
civilian medical and dental positions. 
Sec. 704. Chiropractic health care for members on active duty. 
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Sec. 705. Requirement to recalculate TRICARE Reserve Select premiums based 
on actual cost data. 
Sec. 706. Program for health care delivery at military installations projected to 
grow. 
Sec. 707. Guidelines for combined Federal medical facilities. 
Subtitle B—Preventive Care 
Sec. 711. Waiver of copayments for preventive services for certain TRICARE 
beneficiaries. 
Sec. 712. Military health risk management demonstration project. 
Sec. 713. Smoking cessation program under TRICARE. 
Sec. 714. Availability of allowance to assist members of the Armed Forces and 
their dependents procure preventive health care services. 
Subtitle C—Wounded Warrior Matters 
Sec. 721. Center of excellence in prevention, diagnosis, mitigation, treatment, and 
rehabilitation of hearing loss and auditory system injuries. 
Sec. 722.
Clarification to center of excellence relating to military eye injuries. 
Sec. 723. National Casualty Care Research Center. 
Sec. 724. Peer-reviewed research program on extremity war injuries. 
Sec. 725. Review of policies and processes related to the delivery of mail to 
wounded members of the Armed Forces. 
Subtitle D—Other Matters 
Sec. 731. Report on stipend for members of reserve components for health care for 
certain dependents. 
Sec. 732. Report on providing the Extended Care Health Option Program to au-
tistic dependents of military retirees. 
Sec. 733. Sense of Congress regarding autism therapy services. 
Subtitle A—Improvements to Health 
Benefits 
SEC. 701. ONE-YEAR EXTENSION OF PROHIBITION ON IN-
CREASES IN CERTAIN HEALTH CARE COSTS 
FOR MEMBERS OF THE UNIFORMED SERV-
ICES. 
(a) CHARGES
UNDER
CONTRACTS
FOR
MEDICAL 
CARE.—Section 1097(e) of title 10, United States Code, is 
amended by striking ‘‘September 30, 2008’’ and inserting 
‘‘September 30, 2009’’. 
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(b) 
CHARGES
FOR
INPATIENT
CARE.—Section 
1086(b)(3) of such title is amended by striking ‘‘September 
30, 2008’’ and inserting ‘‘September 30, 2009’’. 
SEC. 702. TEMPORARY PROHIBITION ON INCREASE IN CO-
PAYMENTS UNDER RETAIL PHARMACY SYS-
TEM OF PHARMACY BENEFITS PROGRAM. 
During the period beginning on October 1, 2008, and 
ending on September 30, 2009, the cost sharing require-
ments established under paragraph (6) of section 1074g(a) 
of title 10, United States Code, for pharmaceutical agents 
available through retail pharmacies covered by paragraph 
(2)(E)(ii) of such section may not exceed amounts as fol-
lows: 
(1) In the case of generic agents, $3. 
(2) In the case of formulary agents, $9. 
(3) In the case of nonformulary agents, $22. 
SEC. 703. PROHIBITION ON CONVERSION OF MILITARY 
MEDICAL AND DENTAL POSITIONS TO CIVIL-
IAN MEDICAL AND DENTAL POSITIONS. 
(a) PROHIBITION.—The Secretary of a military de-
partment may not convert any military medical or dental 
position to a civilian medical or dental position on or after 
October 1, 2008. 
(b) RESTORATION OF CERTAIN POSITIONS TO MILI-
TARY POSITIONS.—In the case of any military medical or 
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dental position that is converted to a civilian medical or 
dental position during the period beginning on October 1, 
2004, and ending on September 30, 2008, if the position 
is not filled by a civilian by September 30, 2008, the Sec-
retary of the military department concerned shall restore 
the position to a military medical or dental position that 
can be filled only by a member of the Armed Forces who 
is a health professional. 
(c) DEFINITIONS.—In this section: 
(1) The term ‘‘military medical or dental posi-
tion’’ means a position for the performance of health 
care functions (or coded to work within a military 
treatment facility) within the Armed Forces held by 
a member of the Armed Forces. 
(2) The term ‘‘civilian medical or dental posi-
tion’’ means a position for the performance of health 
care functions within the Department of Defense held 
by an employee of the Department or of a contractor 
of the Department. 
(3) The term ‘‘conversion’’, with respect to a 
military medical or dental position, means a change 
of the position to a civilian medical or dental posi-
tion, effective as of the date of the manning authoriza-
tion document of the military department making the 
change (through a change in designation from mili-
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253 
tary to civilian in the document, the elimination of 
the listing of the position as a military position in 
the document, or through any other means indicating 
the change in the document or otherwise). 
(d) REPEAL.—Section 721 of the National Defense Au-
thorization Act for Fiscal Year 2008 (Public Law 110–181) 
is repealed. 
SEC. 704. CHIROPRACTIC HEALTH CARE FOR MEMBERS ON 
ACTIVE DUTY. 
(a) REQUIREMENT FOR CHIROPRACTIC CARE.—Sub-
ject to such regulations as the Secretary of Defense may pre-
scribe, the Secretary shall provide chiropractic services for 
members of the uniformed services who are entitled to care 
under section 1074(a) of title 10, United States Code. Such 
chiropractic services may be provided only by a doctor of 
chiropractic. 
(b) DEMONSTRATION PROJECTS.—The Secretary of 
Defense may conduct one or more demonstration projects 
to provide chiropractic services to deployed members of the 
uniformed services. Such chiropractic services may be pro-
vided only by a doctor of chiropractic. 
(c) DEFINITIONS.—In this section: 
(1) The term ‘‘chiropractic services’’— 
(A) includes diagnosis (including by diag-
nostic X-ray tests), evaluation and management, 
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and therapeutic services for the treatment of a 
patient’s health condition, including neuro-
musculoskeletal conditions and the subluxation 
complex, and such other services determined ap-
propriate by the Secretary and as authorized 
under State law; and 
(B) does not include the use of drugs or sur-
gery. 
(2) The term ‘‘doctor of chiropractic’’ means only 
a doctor of chiropractic who is licensed as a doctor 
of chiropractic, chiropractic physician, or chiro-
practor by a State, the District of Columbia, or a ter-
ritory or possession of the United States. 
SEC. 705. REQUIREMENT TO RECALCULATE TRICARE RE-
SERVE SELECT PREMIUMS BASED ON ACTUAL 
COST DATA. 
(a) CALCULATION BASED ON ACTUAL COST DATA.— 
Paragraph (3) of section 1076d(d) of title 10, United States 
Code, is amended to read as follows: 
‘‘(3) The monthly amount of the premium in effect for 
a month for TRICARE Standard coverage under this sec-
tion shall be not more than the lesser of— 
‘‘(A) the amount equal to 28 percent of the total 
average monthly amount for that coverage, as deter-
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mined by the Secretary based on actual cost data for 
the preceding fiscal year; or 
‘‘(B) the amount in effect for the month of March 
2006.’’. 
(b) EFFECTIVE DATE.—Paragraph (3) of section 
1076d(d) of title 10, United States Code, as amended by 
this section, shall apply with respect to fiscal year 2009 
and fiscal years thereafter. 
SEC. 706. PROGRAM FOR HEALTH CARE DELIVERY AT MILI-
TARY INSTALLATIONS PROJECTED TO GROW. 
(a) PROGRAM.—Not later than 90 days after the date 
of the enactment of this Act, the Secretary of Defense shall 
develop a plan to establish a program to build cooperative 
health care arrangements and agreements between military 
installations projected to grow and local and regional non- 
military health care systems. 
(b) REQUIREMENTS OF PLAN.—In developing the plan, 
the Secretary of Defense shall— 
(1) identify and analyze health care delivery op-
tions involving the private sector and health care 
services in military facilities located on military in-
stallations; 
(2) develop methods for determining the cost 
avoidance or savings resulting from innovative part-
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nerships between the Department of Defense and the 
private sector; 
(3) develop requirements for Department of De-
fense health care providers to deliver health care in ci-
vilian community hospitals; and 
(4) collaborate with State and local authorities 
to create an arrangement to share and exchange, be-
tween the Department of Defense and nonmilitary 
health care systems, personal health information, and 
data of military personnel and their families. 
(c) COORDINATION WITH OTHER ENTITIES.—The 
plan shall include requirements for coordination with Fed-
eral, State, and local entities, TRICARE managed care 
support contractors, and other contracted assets around in-
stallations selected for participation in the program. 
(d) CONSULTATION REQUIREMENTS.—The Secretary 
of Defense shall develop the plan in consultation with the 
Secretaries of the military departments. 
(e) SELECTION OF MILITARY INSTALLATIONS.—The 
program shall be implemented at each installation partici-
pating in the pilot program conducted pursuant to section 
721 of the Ronald W. Reagan National Defense Authoriza-
tion Act for Fiscal Year 2005 (Public Law 108–375; 118 
Stat. 1988) and other military installations selected by the 
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Secretary of Defense. Each selected military installation 
shall meet the following criteria: 
(1) The military installation has members of the 
Armed Forces on active duty and members of reserve 
components of the Armed Forces that use the installa-
tion as a training and operational base, with mem-
bers routinely deploying in support of the global war 
on terrorism. 
(2) The military population of an installation 
will significantly increase by 2013 due to actions re-
lated to either Grow the Force initiatives or rec-
ommendations of the Defense Base Realignment and 
Closure Commission. 
(3) There is a military treatment facility on the 
installation that has— 
(A) no inpatient or trauma center care ca-
pabilities; and 
(B) no current or planned capacity that 
would satisfy the proposed increase in military 
personnel at the installation. 
(4) There is a civilian community hospital near 
the military installation, and the military treatment 
facility has— 
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258 
(A) no inpatient services or limited capa-
bility to expand inpatient care beds, intensive 
care, and specialty services; and 
(B) limited or no capability to provide 
trauma care. 
(f) REPORTS.—Not later than one year after the date 
of the enactment of this Act, and every year thereafter, the 
Secretary of Defense shall submit to the Committees on 
Armed Services of the Senate and House of Representatives 
an annual report describing the results of the program. 
SEC. 707. GUIDELINES FOR COMBINED FEDERAL MEDICAL 
FACILITIES. 
Before a facility may be designated a combined Fed-
eral medical facility of the Department of Defense and the 
Department of Veterans Affairs, the Secretary of Defense 
and the Secretary of Veterans Affairs shall issue a signed 
agreement that specifies, at a minimum, a binding oper-
ational agreement on the following areas: 
(1) Patient priority categories. 
(2) Budgeting. 
(3) Staffing. 
(4) Construction. 
(5) Physical plant management. 
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Subtitle B—Preventive Care 
SEC. 711. WAIVER OF COPAYMENTS FOR PREVENTIVE SERV-
ICES FOR CERTAIN TRICARE BENEFICIARIES. 
(a) WAIVER OF CERTAIN COPAYMENTS.—Subject to 
subsection (b) and under regulations prescribed by the Sec-
retary of Defense, the Secretary shall— 
(1) waive all copayments under sections 1079(b) 
and 1086(b) of title 10, United States Code, for pre-
ventive services for all beneficiaries who would other-
wise pay copayments; and 
(2) ensure that a beneficiary pays nothing for 
preventive services during a year even if the bene-
ficiary has not paid the amount necessary to cover 
the beneficiary’s deductible for the year. 
(b) EXCLUSION
FOR
MEDICARE-ELIGIBLE
BENE-
FICIARIES.—Subsection (a) shall not apply to a medicare- 
eligible beneficiary. 
(c) REFUND OF COPAYMENTS.— 
(1) AUTHORITY.—Under regulations prescribed 
by the Secretary of Defense, the Secretary may pay 
a refund to a medicare-eligible beneficiary excluded 
by subsection (b), subject to the availability of appro-
priations specifically for such refunds, consisting of 
an amount up to the difference between— 
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260 
(A) the amount the beneficiary pays for co-
payments for preventive services during fiscal 
year 2009; and 
(B) the amount the beneficiary would have 
paid during such fiscal year if the copayments 
for preventive services had been waived pursuant 
to subsection (a) during that year. 
(2) COPAYMENTS COVERED.—The refunds under 
paragraph (1) are available only for copayments paid 
by medicare-eligible beneficiaries during fiscal year 
2009. 
(3) FUNDING.—Of the amounts authorized to be 
appropriated under title XIV of this Act for the De-
fense Health Program, $10,000,000 is authorized for 
the purposes of the refund authorized under this sub-
section. 
(d) DEFINITIONS.—In this section: 
(1) PREVENTIVE SERVICES.—The term ‘‘preven-
tive services’’ includes, taking into consideration the 
age and gender of the beneficiary: 
(A) Colorectal screening. 
(B) Breast screening. 
(C) Cervical screening. 
(D) Prostate screening. 
(E) Annual physical exam. 
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(F) Vaccinations 
(2) MEDICARE-ELIGIBLE.—The term ‘‘medicare- 
eligible’’ has the meaning provided by section 
1111((b) of title 10, United States Code. 
SEC. 712. MILITARY HEALTH RISK MANAGEMENT DEM-
ONSTRATION PROJECT. 
(a) DEMONSTRATION PROJECT REQUIRED.—The Sec-
retary of Defense shall conduct a demonstration project de-
signed to evaluate the efficacy of providing incentives to en-
courage healthy behaviors on the part of eligible military 
health system beneficiaries. 
(b) ELEMENTS OF DEMONSTRATION PROJECT.— 
(1) WELLNESS
ASSESSMENT.—The Secretary 
shall develop a wellness assessment to be offered to 
beneficiaries enrolled in the demonstration project. 
The wellness assessment shall incorporate nationally 
recognized standards for health and healthy behaviors 
and shall be offered to determine a baseline and at 
appropriate intervals determined by the Secretary. 
The wellness assessment shall include the following: 
(A) A self-reported health risk assessment. 
(B) Physiological and biometric measures, 
including at least— 
(i) blood pressure; 
(ii) glucose level; 
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(iii) lipids; and 
(iv) nicotine use. 
(2) POPULATION ENROLLED.—Non-medicare eli-
gible retired beneficiaries of the military health sys-
tem and their dependents who are enrolled in 
TRICARE Prime and who reside in the demonstra-
tion project service area shall be enrolled in the dem-
onstration project. 
(3) GEOGRAPHIC COVERAGE OF DEMONSTRATION 
PROJECT.—The demonstration project shall be con-
ducted in at least three geographic areas within the 
United States where TRICARE Prime is offered, as 
determined by the Secretary. The area covered by the 
project shall be referred to as the demonstration 
project service area. 
(4) PROGRAMS.—The Secretary shall develop 
programs to assist enrollees to improve healthy behav-
iors, as identified by the wellness assessment. 
(5) INCLUSION OF INCENTIVES REQUIRED.—For 
the purpose of conducting the demonstration project, 
the Secretary may offer monetary and non-monetary 
incentives to enrollees to encourage participation in 
the demonstration project. 
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(c) EVALUATION OF DEMONSTRATION PROJECT.—The 
Secretary shall annually evaluate the demonstration project 
for the following: 
(1) The extent to which the health risk assess-
ment and the physiological and biometric measures of 
beneficiaries are improved from the baseline (as deter-
mined in the wellness assessment). 
(2) In the case of baseline health risk assessments 
and physiological and biometric measures that reflect 
healthy behaviors, the extent to which the measures 
are maintained. 
(d) IMPLEMENTATION PLAN.—The Secretary of De-
fense shall submit a plan to implement the health risk man-
agement demonstration project required by this section not 
later than 90 days after the date of the enactment of this 
Act. 
(e) DURATION OF PROJECT.—The health risk manage-
ment demonstration project shall be implemented for a pe-
riod of three years, beginning not later than March 1, 2009, 
and ending three years after that date. 
(f) REPORT.— 
(1) IN GENERAL.—The Secretary of Defense shall 
submit to the Committees on Armed Services of the 
Senate and the House of Representatives an annual 
report on the effectiveness of the health risk manage-
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264 
ment demonstration project in improving the health 
risk measures of military health system beneficiaries 
enrolled in the demonstration project. The first report 
shall be submitted not later than one year after the 
date of the enactment of this Act, and subsequent re-
ports shall be submitted for each year of the dem-
onstration project with the final report being sub-
mitted not later than 90 days after the termination 
of the demonstration project. 
(2) MATTERS COVERED.—Each report shall ad-
dress, at a minimum, the following: 
(A) The number of beneficiaries who were 
enrolled in the project. 
(B) The number of enrolled beneficiaries 
who participate in the project. 
(C) The incentives to encourage healthy be-
haviors that were provided to the beneficiaries in 
each beneficiary category, and the extent to 
which the incentives encouraged healthy behav-
iors. 
(D) An assessment of the effectiveness of the 
demonstration project. 
(E) Recommendations for adjustments to 
the demonstration project. 
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(F) The estimated costs avoided as a result 
of decreased health risk conditions on the part of 
each of the beneficiary categories. 
(G) Recommendations for extending the 
demonstration project or implementing a perma-
nent wellness assessment program. 
(H) Identification of legislative authorities 
required to implement a permanent program. 
SEC. 713. SMOKING CESSATION PROGRAM UNDER TRICARE. 
(a) TRICARE SMOKING CESSATION PROGRAM.—Not 
later than 180 days after the date of the enactment of this 
Act, the Secretary of Defense shall establish a smoking ces-
sation program under the TRICARE program, to be made 
available to all beneficiaries under the TRICARE program 
who are not medicare-eligible. The Secretary may prescribe 
such regulations as may be necessary to implement the pro-
gram. 
(b) ELEMENTS.—The program shall include, at a min-
imum, the following elements: 
(1) The availability, at no cost to the bene-
ficiary, of pharmaceuticals used for smoking ces-
sation, with a limitation on the availability of such 
pharmaceuticals to the national mail-order pharmacy 
program under the TRICARE program if appro-
priate. 
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(2) Access to a toll-free quit line that is available 
24 hours a day, 7 days a week. 
(3) Access to printed and Internet web-based to-
bacco cessation material. 
(c) PLAN.—Not later than 90 days after the date of 
the enactment of this Act, the Secretary shall submit to the 
congressional defense committees a plan to implement the 
program. 
(d) REFUND OF COPAYMENTS.— 
(1) AUTHORITY.—Under regulations prescribed 
by the Secretary of Defense, the Secretary may pay 
a refund to a medicare-eligible beneficiary otherwise 
excluded by this section, subject to the availability of 
appropriations specifically for such refunds, con-
sisting of an amount up to the difference between— 
(A) the amount the beneficiary pays for co-
payments for smoking cessation services de-
scribed in subsection (b) during fiscal year 2009; 
and 
(B) the amount the beneficiary would have 
paid during such fiscal year if the copayments 
for smoking cessation services had been waived 
pursuant to subsection (b) during that year. 
(2) COPAYMENTS COVERED.—The refunds under 
paragraph (1) are available only for copayments paid 
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by medicare-eligible beneficiaries during fiscal year 
2009. 
(3) FUNDING.—Of the amounts authorized to be 
appropriated under title XIV for the Defense Health 
Program, $3,000,000 is authorized for the purposes of 
the refund authorized under this subsection. 
(e) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Secretary shall submit to 
the congressional defense committees a report covering the 
following: 
(1) The status of the program. 
(2) The number of participants in the program. 
(3) The cost of the program. 
(4) The costs avoided that are attributed to the 
program. 
(5) The success rates of the program compared to 
other nationally recognized smoking cessation pro-
grams. 
(6) Findings regarding the success rate of par-
ticipants in the program. 
(7) Recommendations to modify the policies and 
procedures of the program. 
(8) Recommendations concerning the future util-
ity of the program. 
(f) DEFINITIONS.—In this section: 
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(1) TRICARE PROGRAM.—The term ‘‘TRICARE 
program’’ has the meaning provided by section 
1072(7) of title 10, United States Code. 
(2) MEDICARE-ELIGIBLE.—The term ‘‘medicare- 
eligible’’ has the meaning provided by section 1111(b) 
of title 10, United States Code. 
SEC. 714. AVAILABILITY OF ALLOWANCE TO ASSIST MEM-
BERS OF THE ARMED FORCES AND THEIR DE-
PENDENTS PROCURE PREVENTIVE HEALTH 
CARE SERVICES. 
(a) ALLOWANCE.—Chapter 7 of title 37, United States 
Code, is amended by adding at the end the following new 
section: 
‘‘§ 438. Preventive health services allowance 
‘‘(a) DEMONSTRATION PROJECT.—During the period 
beginning on January 1, 2009, and ending on December 
31, 2011, the Secretary of Defense shall conduct a dem-
onstration project designed to evaluate the efficacy of pro-
viding an annual allowance (to be known as a ‘preventive 
health services allowance’) to members of the armed forces 
described in subsection (b) to increase the use of preventive 
health services by such members and their dependents. 
‘‘(b) ELIGIBLE MEMBERS.—(1) Subject to the numer-
ical limitations specified in paragraph (2), a member of 
the armed forces who is serving on active duty for a period 
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of more than 30 days and meets the medical and dental 
readiness requirements for the armed force of the member 
may receive a preventive health services allowance. 
‘‘(2) Not more than 1,500 members of each of the 
Army, Navy, Air Force, and Marine Corps may receive a 
preventive health services allowance during any year, of 
which half in each armed force shall be members without 
dependents and half shall be members with dependents. 
‘‘(c) AMOUNT OF ALLOWANCE.—The Secretary of the 
military department concerned shall pay a preventive 
health services allowance to a member selected to receive the 
allowance in an amount equal to— 
‘‘(1) $500 per year, in the case of a member 
without dependents; and 
‘‘(2) $1,000 per year, in the case of a member 
with dependents. 
‘‘(d) AUTHORIZED PREVENTIVE HEALTH SERVICES.— 
(1) The Secretary of Defense shall specify the types of pre-
ventive health services that may be procured using a preven-
tive health services allowance and the frequency at which 
such services may be procured. 
‘‘(2) At a minimum, authorized preventive health serv-
ices shall include, taking into consideration the age and 
gender of the member and dependents of the member: 
‘‘(A) Colorectal screening. 
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‘‘(B) Breast screening. 
‘‘(C) Cervical screening. 
‘‘(D) Prostate screening. 
‘‘(E) Annual physical exam. 
‘‘(F) Annual dental exam. 
‘‘(G) Vaccinations. 
‘‘(3) The Secretary of Defense shall ensure that mem-
bers selected to receive the preventive health services allow-
ance and their dependents are provided a reasonable oppor-
tunity to receive the services authorized under this sub-
section in their local area. 
‘‘(e) DATA COLLECTION.—At a minimum, the Sec-
retary of Defense shall monitor and record the health of 
members receiving a preventive health services allowance 
and their dependents and the results the testing required 
to qualify for payment of the allowance, if conducted. The 
Secretary shall assess the medical utility of the testing re-
quired to qualify for payment of a preventive health allow-
ance. 
‘‘(f) REPORTING
REQUIREMENT.—Not later than 
March 31, 2010, and March 31, 2012, the Secretary of De-
fense shall submit to Congress a report on the status of the 
demonstration project, including findings regarding the 
medical status of participants, recommendations to modify 
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the policies and procedures of the program, and rec-
ommendations concerning the future utility of the project. 
‘‘(g) REGULATIONS.—The Secretary of Defense shall 
prescribe regulations to carry out this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such chapter is amended by adding at the 
end the following new item: 
‘‘438. Preventive health care allowance.’’. 
Subtitle C—Wounded Warrior 
Matters 
SEC. 721. CENTER OF EXCELLENCE IN PREVENTION, DIAG-
NOSIS, MITIGATION, TREATMENT, AND REHA-
BILITATION OF HEARING LOSS AND AUDI-
TORY SYSTEM INJURIES. 
(a) IN GENERAL.—The Secretary of Defense shall es-
tablish within the Department of Defense a center of excel-
lence in the prevention, diagnosis, mitigation, treatment, 
and rehabilitation of hearing loss and auditory system in-
jury to carry out the responsibilities specified in subsection 
(c). 
(b) PARTNERSHIPS.—The Secretary shall ensure that 
the center collaborates to the maximum extent practicable 
with the Secretary of Veterans Affairs, institutions of higher 
education, and other appropriate public and private enti-
ties (including international entities) to carry out the re-
sponsibilities specified in subsection (c). 
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(c) RESPONSIBILITIES.— 
(1) IN GENERAL.—The center shall— 
(A) implement a comprehensive plan and 
strategy for the Department of Defense, as devel-
oped by the Secretary of Defense, for a registry 
of information for the tracking of the diagnosis, 
surgical intervention or other operative proce-
dure, other treatment, and follow up for each 
case of hearing loss and auditory system injury 
incurred by a member of the Armed Forces while 
serving on active duty; 
(B) ensure the electronic exchange with the 
Secretary of Veterans Affairs of information ob-
tained through tracking under subparagraph 
(A); and 
(C) enable the Secretary of Veterans Affairs 
to access the registry and add information per-
taining to additional treatments or surgical pro-
cedures and eventual hearing outcomes for vet-
erans who were entered into the registry and 
subsequently received treatment through the Vet-
erans Health Administration. 
(2) DESIGNATION
OF
REGISTRY.—The registry 
under this subsection shall be known as the ‘‘Hearing 
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Loss and Auditory System Injury Registry’’ (herein-
after referred to as the ‘‘Registry’’). 
(3) CONSULTATION IN DEVELOPMENT.—The cen-
ter shall develop the Registry in consultation with au-
diologists, 
speech 
and 
language 
pathologists, 
otolaryngologists, and other specialist personnel of the 
Department of Defense and the audiologists, speech 
and language pathologists, otolaryngologists, and 
other specialist personnel of the Department of Vet-
erans Affairs. The mechanisms and procedures of the 
Registry shall reflect applicable expert research on 
military and other hearing loss. 
(4) MECHANISMS.—The mechanisms of the Reg-
istry for tracking under paragraph (1)(A) shall en-
sure that each military medical treatment facility or 
other medical facility shall submit to the center for 
inclusion in the Registry information on the diag-
nosis, surgical intervention or other operative proce-
dure, other treatment, and follow up for each case of 
hearing loss and auditory system injury described in 
that paragraph as follows (to the extent applicable): 
(A) Not later than 30 days after surgery or 
other operative intervention, including a surgery 
or other operative intervention carried out as a 
result of a follow-up examination. 
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(B) Not later than 180 days after the hear-
ing loss and auditory system injury is reported 
or recorded in the medical record. 
(5) COORDINATION OF CARE AND BENEFITS.— 
(A) The center shall provide notice to the National 
Center 
for 
Rehabilitative 
Auditory 
Research 
(NCRAR) of the Department of Veterans Affairs and 
to the auditory system impairment services of the Vet-
erans Health Administration on each member of the 
Armed Forces described in subparagraph (B) for pur-
poses of ensuring the coordination of the provision of 
ongoing auditory system rehabilitation benefits and 
services by the Department of Veterans Affairs after 
the separation or release of such member from the 
Armed Forces. 
(B) A member of the Armed Forces described in 
this subparagraph is a member of the Armed Forces 
with significant hearing loss or auditory system in-
jury incurred while serving on active duty, including 
a member with auditory dysfunction related to trau-
matic brain injury. 
(d) UTILIZATION OF REGISTRY INFORMATION.—The 
Secretary of Defense and the Secretary of Veterans Affairs 
shall jointly ensure that information in the Registry is 
available to appropriate audiologists, speech and language 
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pathologists, otolaryngologists, and other specialist per-
sonnel of the Department of Defense and the Department 
of Veterans Affairs for purposes of encouraging and facili-
tating the conduct of research, and the development of best 
practices and clinical education, on hearing loss or audi-
tory system injury incurred by members of the Armed 
Forces. 
(e) INCLUSION
OF
RECORDS
OF
OIF/OEF VET-
ERANS.—The Secretary of Defense shall take appropriate 
actions to include in the Registry such records of members 
of the Armed Forces who incurred a hearing loss or audi-
tory system injury while serving on active duty on or after 
September 11, 2001, but before the establishment of the Reg-
istry, as the Secretary considers appropriate for purposes 
of the Registry. 
SEC. 722. CLARIFICATION TO CENTER OF EXCELLENCE RE-
LATING TO MILITARY EYE INJURIES. 
Section 1623(d) of Public Law 110–181 is amended 
by striking ‘‘in combat’’ at the end. 
SEC. 723. NATIONAL CASUALTY CARE RESEARCH CENTER. 
(a) REDESIGNATION OF RESEARCH PROGRAM AS CEN-
TER.—Not later than October 1, 2009, the Secretary of De-
fense shall designate a center be known as the ‘‘National 
Casualty Care Research Center’’ (in this section referred to 
as the ‘‘Center’’), which shall consist of the program known 
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as the combat casualty care research program at the Army 
Medical Research and Materiel Command as modified in 
accordance with this section. 
(b) DIRECTOR.—There shall be a director of the Center, 
who shall be appointed by the Secretary after consultation 
with the commanding general of the Medical Research and 
Materiel Command. 
(c) ACTIVITIES OF THE CENTER.—In addition to the 
functions already performed by the combat casualty care 
research program, the Center shall— 
(1) provide a public-private partnership for 
funding clinical and experimental studies in combat 
injury; 
(2) integrate laboratory and clinical research to 
hasten improvements in care to both civilians and 
members of the Armed Forces who are injured; 
(3) ensure that data from both military and ci-
vilian entities, including the Joint Theater Trauma 
Registry and the National Trauma Data Bank, are 
optimally used to establish research agendas and 
measure improvements in outcomes; and 
(4) fund the full spectrum of injury research and 
evaluation, including— 
(A) laboratory, translational, and clinical 
research; 
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(B) point of wounding and pre-hospital 
care; 
(C) early resuscitative management; 
(D) initial and definitive surgical care; 
(E) rehabilitation and reintegration into 
society; and 
(F) coordinate multi-institutional civilian/ 
military collaboration and trauma research. 
(d) AUTHORIZATION.—In addition to amounts author-
ized for the combat casualty care research program of the 
Army Medical Research and Materiel Command, there is 
authorized to be appropriated $1,000,000 for the Center es-
tablished pursuant to this section. 
(e) FUNDING ADJUSTMENTS.—For the amounts au-
thorized in subsection (d): 
(1) The amount for the Defense Health Program, 
Research and Development, is hereby increased by 
$1,000,000, to be available for the United States 
Army Medical Research and Materiel Command. 
(2) The amount for Weapons Procurement, 
Navy, is hereby reduced by $1,000,000, to be derived 
from other missiles. 
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SEC. 724. PEER-REVIEWED RESEARCH PROGRAM ON EX-
TREMITY WAR INJURIES. 
(a) 
ESTABLISHMENT
OF
PEER-REVIEWED 
ORTHOPAEDIC
EXTREMITY
TRAUMA
RESEARCH
PRO-
GRAM.—Not later than 180 days after the date of the enact-
ment of this Act, the Secretary of Defense shall establish 
a competitive, peer-reviewed research program within the 
Defense Health Program’s research and development func-
tion to conduct peer-reviewed medical research at military 
and civilian institutions designed to develop scientific in-
formation aimed at saving injured extremities, avoiding 
amputations, and preserving and restoring the function of 
injured extremities. Such research shall address military 
medical needs and include the full range of scientific in-
quiry encompassing basic, translational, and clinical re-
search. 
(b) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, the Secretary of Defense shall 
submit to Congress a report on the plans for establishment, 
management, and operation of the Peer-Reviewed Research 
Program on Extremity War Injuries required under this 
section. 
(c) EFFECTIVE DATE.—This section shall be in effect 
until September 30, 2013. 
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SEC. 725. REVIEW OF POLICIES AND PROCESSES RELATED 
TO THE DELIVERY OF MAIL TO WOUNDED 
MEMBERS OF THE ARMED FORCES. 
(a) REVIEW OF DELIVERY POLICY AND PROCESSES.— 
The Secretary of Defense shall review the policies and proc-
esses related to the delivery of letters, packages, messages, 
and other communications that are intended as measures 
of support and addressed generally to wounded and injured 
members of the Armed Forces (such as ‘‘To any Wounded 
Warrior’’ or ‘‘To Any Wounded Service Member’’) in mili-
tary medical treatment facilities and other locations where 
members of the Armed Forces are treated and rehabilitated. 
(b) SPECIFIC PROCESSES.—In conducting the review 
under subsection (a), the Secretary of Defense shall deter-
mine the following: 
(1) Whether the current Department of Defense 
prohibition on the direct delivery of such letters, pack-
ages, messages, and other communications to wounded 
and injured members of the Armed Forces should be 
modified. 
(2) The adequacy, particularly from the perspec-
tive of wounded and injured members of the Armed 
Forces, of the current governmental and non-govern-
mental delivery processes. 
(c) CORRECTIVE ACTIONS.—Based on the review under 
subsection (a), the Secretary of Defense may take actions 
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to correct or modify the policies and processes related to 
the delivery of letters, packages, messages, and other com-
munications to wounded and injured members of the Armed 
Forces as the Secretary determines appropriate. 
(d) REPORT.—Not later than 90 days after the date 
of the enactment of this Act, the Secretary of Defense shall 
submit to the Committee on Armed Services of the Senate 
and the Committee on Armed Services of the House of Rep-
resentatives a report on the results of the review under sub-
section (a) and the ongoing and projected actions to correct 
or modify the policies and processes related to the delivery 
of letters, packages, messages, and other communications to 
wounded and injured members of the Armed Forces. 
Subtitle D—Other Matters 
SEC. 731. REPORT ON STIPEND FOR MEMBERS OF RESERVE 
COMPONENTS FOR HEALTH CARE FOR CER-
TAIN DEPENDENTS. 
The Secretary of Defense shall submit to the congres-
sional defense committees a report on the extent to which 
the Secretary has exercised the authority provided in section 
704 of the National Defense Authorization Act for Fiscal 
Year 2008 (Public Law 110–181; 122 Stat. 188; 10 U.S.C. 
1076 note). 
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SEC. 732. REPORT ON PROVIDING THE EXTENDED CARE 
HEALTH OPTION PROGRAM TO AUTISTIC DE-
PENDENTS OF MILITARY RETIREES. 
(a) REPORT REQUIRED.—Not later than 90 days after 
the date of the enactment of this Act, the Secretary of De-
fense shall submit to the congressional defense committees 
a report that contains a plan for including autistic depend-
ents of military retirees in the Extended Care Health Op-
tion program (hereafter in this section referred to as the 
‘‘ECHO program’’). 
(b) CONTENTS
OF REPORT.—The report required 
under subsection (a) shall include the following: 
(1) The most current data on the number of 
military retirees with autistic dependents and an es-
timate of the number of future military retirees with 
autistic dependents. 
(2) The cost estimates of providing extended ben-
efits under the ECHO program to autistic dependents 
of all current and future military retirees. 
(3) The feasibility of including autistic depend-
ents of military retirees in any ongoing demonstra-
tion or pilot programs within the ECHO program. 
(4) The statutory and regulatory impediments to 
including autistic dependents of military retirees in 
the ECHO program. 
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SEC. 733. SENSE OF CONGRESS REGARDING AUTISM THER-
APY SERVICES. 
(a) SENSE OF CONGRESS.—It is the sense of Congress 
that the Secretary of Defense should ensure that the process 
in determining eligibility for autistic therapy services pro-
vided to the children of members of the Armed Forces is 
conducted in an expeditious manner and without delay. 
(b) STUDY AND REPORT.— 
(1) STUDY.—The Secretary of Defense shall con-
duct a study on autistic therapy services in the De-
partment of Defense. The study shall include— 
(A) an evaluation of whether such services 
would be better managed under the TRICARE 
program; and 
(C) the potential benefits and costs of a 
transition of the management of such services 
from the exceptional family member programs to 
the TRICARE program. 
(2) REPORT.—Not later than July 30, 2009, the 
Secretary shall submit to the Committees on Armed 
Services of the Senate and the House of Representa-
tives a report on the results of the study. 
(c) DEFINITIONS.—In this section: 
(1) AUTISTIC
THERAPY
SERVICES.—The term 
‘‘autistic therapy services’’ includes applied behavior 
analysis. 
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(2) TRICARE PROGRAM.—The term ‘‘TRICARE 
program’’ has the meaning provided by section 1072 
of title 10, United States Code. 
TITLE VIII—ACQUISITION POL-
ICY, ACQUISITION MANAGE-
MENT, AND RELATED MAT-
TERS 
Subtitle A—Acquisition Policy and Management 
Sec. 801. Review of impact of illegal subsidies on acquisition of KC–45 aircraft. 
Sec. 802. Assessment of urgent operational needs fulfillment. 
Sec. 803. Preservation of tooling for major defense acquisition programs. 
Sec. 804. Prohibition on procurement from beneficiaries of foreign subsidies. 
Sec. 805. Domestic industrial base considerations during source selection. 
Sec. 806. Commercial software reuse preference. 
Sec. 807. Comprehensive proposal analysis required during source selection. 
Subtitle B—Amendments to General Contracting Authorities, Procedures, and 
Limitations 
Sec. 811. Acquisition workforce expedited hiring authority. 
Sec. 812. Definition of system for Defense Acquisition Challenge Program. 
Sec. 813. Career path and other requirements for military personnel in the acqui-
sition field. 
Sec. 814. Technical data rights for non-FAR agreements. 
Sec. 815. Clarification that cost accounting standards apply to Federal contracts 
performed outside the United States. 
Subtitle C—Provisions Relating to Inherently Governmental Functions 
Sec. 821. Policy on personal conflicts of interest by employees of Department of 
Defense contractors. 
Sec. 822. Development of guidance on personal services contracts. 
Sec. 823. Limitation on performance of product support integrator functions. 
Subtitle D—Defense Industrial Security 
Sec. 831. Requirements relating to facility clearances. 
Sec. 832. Foreign ownership control or influence. 
Sec. 833. Congressional oversight relating to facility clearances and foreign own-
ership control or influence; definitions. 
Subtitle E—Other Matters 
Sec. 841. Clarification of status of Government rights in the designs of depart-
ment of defense vessels, boats, and craft, and components thereof. 
Sec. 842. Expansion of authority to retain fees from licensing of intellectual 
property. 
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Sec. 843. Transfer of sections of title 10 relating to Milestone A and Milestone 
B for clarity. 
Sec. 844. Earned value management study and report. 
Sec. 845. Report on market research. 
Sec. 846. System development and demonstration benchmark report. 
Sec. 847. Additional matters required to be reported by contractors performing se-
curity functions in areas of combat operations. 
Sec. 848. Report relating to munitions. 
Subtitle A—Acquisition Policy and 
Management 
SEC. 801. REVIEW OF IMPACT OF ILLEGAL SUBSIDIES ON 
ACQUISITION OF KC–45 AIRCRAFT. 
(a) REVIEW OF ILLEGAL SUBSIDIES REQUIRED.—The 
Secretary of the Air Force, not later than 10 days after 
a ruling by the World Trade Organization that either or 
both of the United States or the European Union, or any 
political entity within the United States or the European 
Union, has provided illegal subsidies to a manufacturer of 
large commercial aircraft, shall begin a review, as described 
in subsection (b), of the impact of such illegal subsidies on 
the source selection for the KC–45 Aerial Refueling Aircraft 
Program. 
(b) PERFORMANCE OF THE REVIEW.—In performing 
the review required by subsection (a), the Secretary of Air 
Force shall comply with the following requirements: 
(1) The Secretary shall seek information from 
the public on the potential impact of illegal subsidies 
on the source selection process for the KC–45 Aerial 
Refueling Aircraft Program through a notice and 
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comment process. The Secretary shall adopt such pro-
cedures for handling information provided under such 
notice and comment process as are necessary to pro-
tect national security and confidential business infor-
mation. 
(2) The Secretary shall consult with experts 
within the Department of Defense, the Office of Man-
agement and Budget, the Office of the United States 
Trade Representative, and other agencies and offices 
of the Federal government, as appropriate, on the po-
tential impact of illegal subsidies on the source selec-
tion process for the KC–45 Aerial Refueling Aircraft 
Program. 
(3) The Secretary shall request information from 
each of the offerors in the source selection process for 
the KC–45 Aerial Refueling Aircraft Program on the 
potential impact of illegal subsidies on such process. 
(c) COMPLETION OF REVIEW.—The Secretary of the 
Air Force shall complete the review required by subsection 
(a) not later than 90 days after the World Trade Organiza-
tion has ruled on all illegal subsidy cases involving large 
commercial aircraft pending at the World Trade Organiza-
tion as of the date of the enactment of this Act. 
(d) DETERMINATION AND REMEDY REQUIRED.—If the 
Secretary of the Air Force determines, after performing the 
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review required by subsection (a), that an illegal subsidy 
or subsidies had a material impact on the source selection 
process for the KC–45 Aerial Refueling Aircraft Program 
sufficient to bring into question the fairness of such source 
selection process, the Secretary shall take such measures as 
are necessary and appropriate to ensure that the effect of 
such subsidy or subsidies is removed and the source selection 
process for the KC–45 Aerial Refueling Aircraft Program 
is fair to all offerors. 
(e) DEFINITIONS.—In this section: 
(1) The term ‘‘illegal subsidy’’ means a subsidy 
found to constitute a violation of the Agreement on 
Subsidies and Countervailing Measures. 
(2) The term ‘‘Agreement on Subsidies and 
Countervailing Measures’’ means the agreement de-
scribed in section 101(d)(12) of the Uruguay Round 
Agreements Act (19 U.S.C. 3511(d)(12)). 
(3) The term ‘‘source selection’’, with respect to 
a program of the Department of Defense, means the 
selection, through the use of competitive procedures or 
such other procurement procedures as may be appli-
cable, of a contractor to perform a contract to carry 
out the program. 
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SEC. 802. ASSESSMENT OF URGENT OPERATIONAL NEEDS 
FULFILLMENT. 
(a) ASSESSMENT REQUIRED.—The Secretary of De-
fense shall commission a study and report by a federally 
funded research and development center to assess the effec-
tiveness of the processes used by the Department of Defense 
for the generation of urgent operational need requirements, 
and the acquisition processes used to fulfill such require-
ments. Such assessment shall include the following: 
(1) A description and evaluation of the effective-
ness of the procedures used to generate warfighting re-
quirements through the urgent operational need proc-
ess. 
(2) An evaluation of the extent to which urgent 
operational need statements are used to document re-
quired capability gaps or are used to request specific 
acquisition outcomes, such as specific systems or 
equipment. 
(3) A description and evaluation of the effective-
ness of the processes used by each of the military de-
partments to prioritize and fulfill urgent operational 
needs, including the rapid acquisition processes of the 
military departments. 
(4) A description and evaluation of the effective-
ness of the procedures used to generate warfighting re-
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(B) the field performance of the capability 
delivered in response to the joint urgent oper-
ational need statement; and 
(C) the concurrent development of a long- 
term acquisition and sustainment strategy. 
(8) Recommendations regarding— 
(A) common definitions and standards for 
urgent operational needs statements and joint 
urgent operational need statements; 
(B) best practices and process improvements 
for the creation, evaluation, prioritization, and 
fulfillment of urgent operational need statements 
and joint urgent operational need statements; 
and 
(C) the extent to which rapid acquisition 
processes should be consolidated or expanded. 
(b) SUBMISSION TO CONGRESS.—Not later than 180 
days after the date of the enactment of this Act, the Sec-
retary of Defense shall submit to the congressional defense 
committees the report resulting from the study conducted 
pursuant to subsection (a). 
(c) DEFINITIONS.—In this section: 
(1) The term ‘‘urgent operational need’’ or ‘‘ur-
gent operational need statement’’ means a high pri-
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ority capability gap from an ongoing, named oper-
ation— 
(A) that is validated and resourced by a 
specific military department or defense agency; 
and 
(B) that, if not addressed immediately, will 
seriously endanger personnel or pose a major 
threat to ongoing operations. 
(2) The term ‘‘joint urgent operational need’’ 
means a high priority capability gap from an ongo-
ing, named operation— 
(A) that is identified by a combatant com-
mander; 
(B) that requires validation and resourcing 
by the Joint Chiefs of Staff; 
(C) that falls outside of the established proc-
esses of the military departments; and 
(D) that, if not addressed immediately will 
seriously endanger personnel or pose a major 
threat to ongoing operations. 
SEC. 803. PRESERVATION OF TOOLING FOR MAJOR DE-
FENSE ACQUISITION PROGRAMS. 
(a) GUIDANCE REQUIRED.—The Secretary of Defense 
shall issue guidance requiring that all unique tooling asso-
ciated with the production of hardware for a major defense 
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291 
acquisition program be preserved and stored through the 
end of the service life of the end item associated with such 
a program. Such guidance shall— 
(1) provide that either a component of the De-
partment of Defense or a contractor (or subcontractor 
at any tier) may be responsible for preservation and 
storage of such tooling; 
(2) require that the milestone decision authority 
approve a plan for the preservation and storage of 
such tooling prior to granting a Milestone C ap-
proval; 
(3) if such tooling is to be preserved and stored 
by a component of the Department of Defense, require 
the component to ensure adequate funds and facilities 
are available to preserve and store such tooling 
through the projected service life of the end item; 
(4) if such tooling is to be preserved and stored 
by a contractor, or a subcontractor at any tier, re-
quire that any production contract (or subcontract) 
awarded in support of the major defense acquisition 
program include a contract clause regarding the pres-
ervation and storage of such tooling; and 
(5) provide a mechanism for the Secretary of De-
fense to waive such requirement if— 
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(A) the Secretary determines that such a 
waiver is in the best interest of national security; 
and 
(B) notifies the congressional defense com-
mittees at least 15 days before taking such ac-
tion. 
(b) DEFINITIONS.—In this section: 
(1) MAJOR DEFENSE ACQUISITION PROGRAM.— 
The term ‘‘major defense acquisition program’’ has 
the meaning provided in section 2430 of title 10, 
United States Code. 
(2) MILESTONE
DECISION
AUTHORITY.—The 
term ‘‘milestone decision authority’’ has the meaning 
provided in section 2366a(f)(2). 
(3) MILESTONE C APPROVAL.—The term ‘‘Mile-
stone C approval’’ has the meaning provided in sec-
tion 2366(e)(8) of title 10, United States Code. 
SEC. 804. PROHIBITION ON PROCUREMENT FROM BENE-
FICIARIES OF FOREIGN SUBSIDIES. 
(a) PROHIBITION.—Except as provided in subsections 
(c) and (d), the Secretary of Defense may not enter into 
a contract for the procurement of goods or services from any 
foreign person to which the government of a foreign country 
that is a member of the World Trade Organization has pro-
vided a subsidy if— 
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(1) the United States has requested consultations 
with that foreign country under the Agreement on 
Subsidies and Countervailing Measures on the basis, 
in whole or in part, that the subsidy is a prohibited 
subsidy under that Agreement; and 
(2) either— 
(A) the dispute before the World Trade Or-
ganization has not been resolved; or 
(B) the World Trade Organization has 
ruled that the subsidy provided by the foreign 
country is a prohibited subsidy under the Agree-
ment on Subsidies and Countervailing Measures. 
(b) ADDITIONAL APPLICABILITY.— 
(1) JOINT
VENTURES.—The prohibition under 
subsection (a) with respect to a foreign person also 
applies to any joint venture, cooperative organization, 
partnership, or contracting team of which that for-
eign person is a member. 
(2) SUBCONTRACTS AND TASK AND DELIVERY OR-
DERS.—The prohibition under subsection (a) with re-
spect to a contract also applies to any subcontracts at 
any tier entered into under the contract and any task 
orders or delivery orders at any tier issued under the 
contract. 
(c) EXCEPTIONS TO APPLICABILITY.— 
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(1) INAPPLICABILITY TO PROGRAMS WITH MILE-
STONE
B
APPROVAL.—The prohibition under sub-
section (a) shall not apply to any contract under a 
major defense acquisition program that has received 
Milestone B approval as of the date of the enactment 
of this Act. 
(2) INAPPLICABILITY
TO
CERTAIN
PROCURE-
MENTS.—The prohibition under subsection (a) shall 
not apply to a contract for the procurement of goods 
or services from a foreign person being provided a 
subsidy if— 
(A) in any case in which goods or services 
are the subject of the consultation requested by 
the United States (as described in subsection 
(a)(1)), the goods or services to be procured 
under the contract are not related to the goods 
and services that are the subject of the consulta-
tion; or 
(B) in any case in which the subject of the 
consultation requested by the United States (as 
described in subsection (a)) is not a good or serv-
ice (but is law, regulations, or other policies of 
the foreign country), the Department of Defense 
contracting officer for the contract has certified 
that the foreign person has demonstrated that the 
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cost of the offeror’s proposal is not materially af-
fected by the subsidy. 
(d) WAIVER.—The President may waive the prohibi-
tion in this section with respect to a specific contract if 
the President (without delegation) determines that failure 
to waive the prohibition would result in a significant and 
imminent threat to national security. The President shall 
submit to Congress a notice of any waiver granted under 
this subsection within 7 days after granting it. 
(e) DURATION OF PROHIBITION.—In the case of a sub-
sidy that the World Trade Organization has ruled is a pro-
hibited subsidy as described in subsection (a)(2)(B), the 
prohibition under subsection (a) shall not apply to a con-
tract for the procurement of goods or services that were the 
subject of the consultation after— 
(1) the dispute is resolved; and 
(2) either— 
(A) a mutual agreement has been reached 
between the United States and the foreign gov-
ernment with respect to the prohibited subsidy; 
or 
(B) the foreign government has agreed to 
comply with the requirements of the ruling 
issued by the World Trade Organization in the 
dispute. 
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(f) DEFINITIONS.—In this section: 
(1) The term ‘‘Agreement on Subsidies and 
Countervailing Measures’’ means the agreement de-
scribed in section 101(d)(12) of the Uruguay Round 
Agreements Act (19 U.S.C. 3501(d)(12)). 
(2) The term ‘‘foreign person’’ means— 
(A) an individual who is not a United 
States person or an alien lawfully admitted for 
permanent residence into the United States; or 
(B) a corporation, partnership, or other 
nongovernmental entity which is not a United 
States person. 
(3) The term ‘‘United States person’’ means— 
(A) a natural person who is a citizen of the 
United States or who owes permanent allegiance 
to the United States; and 
(B) a corporation or other legal entity 
which is organized under the laws of the United 
States, any State or territory thereof, or the Dis-
trict of Columbia, if natural persons described in 
subparagraph (A) own, directly or indirectly, 
more than 50 percent of the outstanding capital 
stock or other beneficial interest in such legal en-
tity. 
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(4) The term ‘‘major defense acquisition pro-
gram’’ means a Department of Defense acquisition 
program that is a major defense acquisition program 
for purposes of section 2430 of title 10, United States 
Code. 
(5) The term ‘‘Milestone B approval’’ has the 
meaning provided that term in section 2366(e)(7) of 
such title. 
SEC. 805. DOMESTIC INDUSTRIAL BASE CONSIDERATIONS 
DURING SOURCE SELECTION. 
(a) REGULATIONS REQUIRED.—Not later than 120 
days after the date of the enactment of this Act, the Sec-
retary of Defense shall prescribe regulations regarding the 
application of a domestic industrial base evaluation factor 
during source selection for a major defense acquisition pro-
gram of the Department of Defense. Such regulations 
shall— 
(1) allow the source selection authority to con-
sider impacts on the domestic industrial base as an 
evaluation factor during the source selection process; 
(2) provide the source selection authority flexi-
bility with regard to the importance assigned to such 
an evaluation factor; and 
(3) provide defense acquisition officials with the 
authority to impose penalties on the contractor 
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awarded the contract resulting from the source selec-
tion, including fines and contract termination, if— 
(A) the domestic industrial base evaluation 
factor was used during source selection; 
(B) the evaluation factor had a material ef-
fect on the outcome of the source selection; and 
(C) the official determines that the potential 
contractor knowingly or willfully misrepresented 
impacts to the domestic industrial base during 
source selection. 
(b) IMPACTS ON DOMESTIC INDUSTRIAL BASE.—For 
purposes of the regulations, the Secretary shall consider, at 
a minimum, the following to be impacts on the domestic 
industrial base: 
(1) The creation or maintenance of domestic ca-
pability for production of critical supplies. 
(2) The creation or maintenance of domestic jobs. 
(3) The creation or maintenance of domestic sci-
entific and technological competencies or manufac-
turing skills. 
(c) REPORT REQUIRED.—The Secretary of Defense 
shall notify the congressional defense committees at least 30 
days before the issuance of a request for proposal for any 
major defense acquisition program that will not use a do-
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299 
mestic industrial base evaluation factor during the source 
selection process. Such notification shall include— 
(1) a brief description of the major defense ac-
quisition program; 
(2) a justification for not using a domestic in-
dustrial base evaluation factor; and 
(3) an assessment of potential impacts on the do-
mestic industrial base, if known, as a result of not 
using a domestic industrial base evaluation factor. 
(d) DEFINITIONS.—In this section: 
(1) DOMESTIC
INDUSTRIAL
BASE.—The term 
‘‘domestic industrial base’’ means— 
(A) persons and organizations that are en-
gaged in research, development, production, or 
maintenance activities conducted within the 
United States and United States territories; and 
(B) includes, at a minimum, prime con-
tractors, as well as second and third tier sub-
contractors, engaged in such activities. 
(2) MAJOR DEFENSE ACQUISITION PROGRAM.— 
The term ‘‘major defense acquisition program’’ has 
the meaning provided in section 2430 of title 10, 
United States Code. 
(3) SOURCE SELECTION.—The term ‘‘source se-
lection’’, with respect to a major defense acquisition 
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300 
program, means the selection, through the use of com-
petitive procedures or such other procurement proce-
dures as may be applicable, of a contractor to per-
form a contract to carry out the program. 
(4) SOURCE SELECTION AUTHORITY.—The term 
‘‘source selection authority’’, with respect to a major 
defense acquisition program, means the official in the 
Department of Defense designated as responsible for 
the source selection for that program. 
SEC. 806. COMMERCIAL SOFTWARE REUSE PREFERENCE. 
(a) IN GENERAL.—The Secretary of Defense shall en-
sure that contracting officials identify and evaluate, at all 
stages of the acquisition process (including concept refine-
ment, concept decision, and technology development), op-
portunities for the use of commercial computer software 
and, if practicable, use such software instead of developing 
new software. 
(b) REGULATIONS.—The Secretary of Defense shall re-
view and revise the Defense Federal Acquisition Regulation 
Supplement, Part 207.103, to clarify that the preference for 
commercial items in the acquisition process includes a pref-
erence for commercial computer software, and the preference 
applies at all stages of the acquisition process. 
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301 
SEC. 
807. 
COMPREHENSIVE 
PROPOSAL 
ANALYSIS 
RE-
QUIRED DURING SOURCE SELECTION. 
(a) REGULATIONS REQUIRED.—Not later than 120 
days after the date of the enactment of this Act, the Sec-
retary of Defense shall prescribe regulations regarding the 
comprehensive evaluation of a proposal for a major defense 
acquisition program for which a significant proportion of 
the research, design, development, manufacturing, assembly, 
or test and evaluation will be performed outside the United 
States. Such regulations shall— 
(1) require the offeror of such a proposal, in ad-
dition to providing a breakdown of costs as required 
by the Federal Acquisition Regulation, to provide a 
breakdown of costs not borne by the offeror as a result 
of activities performed outside the United States, and 
such costs shall— 
(A) include, at a minimum, costs borne by 
a foreign government that are not borne by a 
local, State, or Federal Government in the 
United States, such as government-borne— 
(i) health care; 
(ii) retirement compensation; and 
(iii) workman’s compensation; 
(B) not include direct labor and material 
costs; and 
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302 
(C) be limited to those costs that would oth-
erwise be allowable and allocable to the contract 
for the major defense acquisition program if all 
activities were performed in the United States; 
(2) be applicable only to proposals submitted in 
response to a solicitation from the Department of De-
fense that requires cost or pricing data; 
(3) require the contracting officer responsible for 
conducting proposal analysis to consider such costs in 
any cost and price analysis performed; and 
(4) require the contracting officer to certify, 
prior to source selection, that the contracting officer 
has no reasonable grounds to believe that the final as-
sessed price excludes any cost or other element of price 
(such as the monetary policy of a foreign government) 
that other offers performing in the United States 
could not also exclude. 
(b) ADDITIONAL APPLICABILITY WITH RESPECT TO 
SUBCONTRACTORS.—The regulations under subsection (a) 
also shall apply with respect to any subcontractor (at any 
tier) of a prospective contractor if the subcontractor is ex-
pected to perform outside the United States a significant 
portion of the research, design, development, manufac-
turing, assembly, or test and evaluation under the proposal 
being evaluated. 
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(c) DEFINITION.—In this section, the term ‘‘major de-
fense acquisition program’’ means a Department of Defense 
acquisition program that is a major defense acquisition 
program for the purposes of section 2430 of title 10, United 
States Code. 
Subtitle B—Amendments to General 
Contracting Authorities, Proce-
dures, and Limitations 
SEC. 811. ACQUISITION WORKFORCE EXPEDITED HIRING 
AUTHORITY. 
Section 1705 of title 10, United States Code, is amend-
ed by adding at the end the following new subsection: 
‘‘(h) EXPEDITED HIRING AUTHORITY.— 
‘‘(1) For purposes of sections 3304, 5333, and 
5753 of title 5, United States Code, the Secretary of 
Defense may— 
‘‘(A) designate any category of acquisition 
positions within the Department of Defense as 
shortage category positions; and 
‘‘(B) utilize the authorities in such sections 
to recruit and appoint highly qualified persons 
directly to positions so designated. 
‘‘(2) The Secretary may not appoint a person to 
a position of employment under this subsection after 
September 30, 2012.’’. 
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304 
SEC. 812. DEFINITION OF SYSTEM FOR DEFENSE ACQUISI-
TION CHALLENGE PROGRAM. 
Section 2359b of title 10, United States Code, is 
amended by adding at the end the following new subsection: 
‘‘(l) SYSTEM DEFINED.—In this section, the term ‘sys-
tem’— 
‘‘(1) means— 
‘‘(A) the organization of hardware, software, 
material, facilities, personnel, data, and services 
needed to perform a designated function with 
specified results (such as the gathering of speci-
fied data, its processing, and its delivery to 
users); or 
‘‘(B) a combination of two or more inter-
related pieces (or sets) of equipment arranged in 
a functional package to perform an operational 
function or to satisfy a requirement; and 
‘‘(2) includes a major system (as defined in sec-
tion 2302(5) of this title).’’. 
SEC. 813. CAREER PATH AND OTHER REQUIREMENTS FOR 
MILITARY PERSONNEL IN THE ACQUISITION 
FIELD. 
(a) ACQUISITION PERSONNEL REQUIREMENTS.— 
(1) IN GENERAL.—Chapter 87 of title 10, United 
States Code, is amended by inserting after section 
1722 the following new section: 
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‘‘§ 1722a. Special requirements for military personnel 
in the acquisition field 
‘‘(a) REQUIREMENT FOR POLICY AND GUIDANCE RE-
GARDING MILITARY PERSONNEL
IN ACQUISITION.—The 
Secretary of Defense shall require the Secretary of each 
military department (with respect to the military depart-
ments) and the Under Secretary of Defense for Acquisition, 
Technology, and Logistics (with respect to the Office of the 
Secretary of Defense, the unified combatant commands, the 
Defense Agencies, and Defense Field Activities), to establish 
policies and issue guidance to ensure the proper develop-
ment, assignment, and employment of members of the 
armed forces in the acquisition field to achieve the objectives 
of this section as specified in subsection (b). 
‘‘(b) OBJECTIVES.—Policies established and guidance 
issued pursuant to subsection (a) shall ensure, at a min-
imum, the following: 
‘‘(1) A career path in the acquisition field that 
attracts the highest quality officers and enlisted per-
sonnel. 
‘‘(2) A number of command positions and senior 
non-commissioned officer positions, including acquisi-
tion billets reserved for general officers and flag offi-
cers under subsection (c), sufficient to ensure that 
members of the armed forces have opportunities for 
promotion and advancement in the acquisition field. 
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‘‘(3) A number of qualified, trained members of 
the armed forces eligible for and active in the acquisi-
tion field sufficient to ensure the appropriate use of 
military personnel in contingency contracting. 
‘‘(c) RESERVATION
OF ACQUISITION BILLETS
FOR 
GENERAL OFFICERS AND FLAG OFFICERS.—(1) The Sec-
retary of Defense shall establish for each military depart-
ment a minimum number of billets coded or classified for 
acquisition personnel that are reserved for general officers 
and flag officers and shall ensure that the policies estab-
lished and guidance issued pursuant to subsection (a) by 
the Secretary of that military department reserve at least 
that minimum number of billets and fill the billets with 
qualified and trained general officers and flag officers. 
‘‘(2) The Secretary of Defense shall ensure that a suffi-
cient number of billets for acquisition personnel who are 
general officers or flag officers exist within the Office of the 
Secretary of Defense, the unified combatant commands, the 
Defense Agencies, and the Defense Field Activities. 
‘‘(3) The Secretary of Defense shall ensure that a por-
tion of the billets referred to in paragraphs (1) and (2) in-
volve command of organizations primarily focused on con-
tracting. 
‘‘(d) RELATIONSHIP TO LIMITATION ON PREFERENCE 
FOR MILITARY PERSONNEL.—Any designation or reserva-
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tion of a position for a member of the armed forces as a 
result of a policy established or guidance issued pursuant 
to this section shall be deemed to meet the requirements for 
an exception under paragraph (2) of section 1722(b) of this 
title from the limitation in paragraph (1) of such section. 
‘‘(e) REPORT.—Not later than January 1 of each year, 
the Secretary of each military department shall submit to 
the Under Secretary of Defense for Acquisition, Technology, 
and Logistics a report describing how the Secretary fulfilled 
the objectives of this section in the preceding calendar year. 
The report shall include information on the reservation of 
acquisition billets for general officers and flag officers with-
in the department.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such chapter is amended by 
inserting after the item relating to section 1722 the 
following new item: 
‘‘1722a. Special requirements for military personnel in the acquisition field.’’. 
(b) ADDITIONAL ITEM FOR INCLUSION IN STRATEGIC 
PLAN.—Section 543(f)(3)(E) of the National Defense Au-
thorization Act for Fiscal Year 2008 (Public Law 110–181; 
122 Stat 116) is amended by inserting after ‘‘officer assign-
ments and grade requirements’’ the following: ‘‘, including 
requirements relating to the reservation of billets in the ac-
quisition field for general and flag officers,’’. 
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308 
SEC. 814. TECHNICAL DATA RIGHTS FOR NON-FAR AGREE-
MENTS. 
(a) RIGHTS
IN TECHNICAL DATA
FOR NON-FAR 
AGREEMENTS.— 
(1) IN
GENERAL.—Chapter 137 of title 10, 
United States Code, is amended by inserting after sec-
tion 2320 the following new section: 
‘‘§ 2320a. Rights in technical data for non-FAR agree-
ments 
‘‘(a) POLICY GUIDANCE.— 
‘‘(1) The Secretary of Defense shall issue policy 
guidance with respect to the use of a non-FAR agree-
ment for the development of a major weapon system 
or an item of personnel protective equipment. 
‘‘(2) The guidance shall— 
‘‘(A) define the legitimate interest of the 
United States and a party to such an agreement 
in technical data pertaining to an item or proc-
ess to be developed under the agreement, includ-
ing, at a minimum, the interest of— 
‘‘(i) the United States in increasing 
competition and lowering costs by devel-
oping and locating alternative sources of 
supply and manufacture; 
‘‘(ii) the United States in the ability to 
conduct emergency repair and overhaul; or 
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309 
‘‘(iii) the party to the agreement to re-
strict the release of technical data relating 
to an item or process developed at private 
expense; and 
‘‘(B) require that specific rights in technical 
data shall be established during agreement nego-
tiations and be based upon negotiations between 
the United States and the potential party to the 
agreement, except in any case in which the Sec-
retary of Defense determines, on the basis of cri-
teria established in such policy guidance, that 
the establishment of rights during or through 
agreement negotiations would not be practicable. 
‘‘(b) PROVISIONS IN NON-FAR AGREEMENTS.—When-
ever practicable, a non-FAR agreement described in sub-
section (a) shall contain appropriate provisions relating to 
technical data, including provisions— 
‘‘(1) defining the respective rights of the United 
States and the party to the agreement regarding any 
technical data to be delivered under the agreement; 
‘‘(2) specifying the technical data to be delivered 
under the agreement and delivery schedules for such 
delivery; 
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‘‘(3) establishing or referencing procedures for 
determining the acceptability of technical data to be 
delivered under the agreement; 
‘‘(4) to the maximum practicable extent, identi-
fying, in advance of delivery, technical data which is 
to be delivered with restrictions on the right of the 
United States to use such data; 
‘‘(5) requiring the party to the agreement to re-
vise any technical data delivered under the agreement 
to reflect engineering design changes made during the 
performance of the agreement and affecting the form, 
fit, and function of the items specified in the agree-
ment and to deliver such revised technical data to an 
agency within a time specified in the agreement; and 
‘‘(6) establishing remedies to be available to the 
United States when technical data required to be de-
livered or made available under the agreement is 
found to be incomplete or inadequate or to not satisfy 
the requirements of the agreement concerning tech-
nical data. 
‘‘(c) ASSESSMENT OF LONG-TERM TECHNICAL DATA 
NEEDS.—The Secretary of Defense shall require the pro-
gram manager for a major weapon system or an item of 
personnel protective equipment that is to be developed using 
a non-FAR agreement described in subsection (a) to assess 
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311 
the long-term technical data needs of such systems and 
items, in accordance with the requirements of section 
2320(e) of this title. 
‘‘(d) DEFINITIONS.—In this section: 
‘‘(1) The term ‘non-FAR agreement’ means an 
agreement that is not subject to laws pursuant to 
which the Federal Acquisition Regulation is pre-
scribed, including— 
‘‘(A) a transaction authorized under section 
2371 of this title; and 
‘‘(B) a cooperative research and develop-
ment agreement. 
‘‘(2) The term ‘party’, with respect to a non- 
FAR agreement, means a non-Federal entity and in-
cludes any of the following: 
‘‘(A) A contractor and its subcontractors (at 
any tier). 
‘‘(B) A joint venture. 
‘‘(C) A consortium.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such chapter is amended by 
inserting after the item relating to section 2320 the 
following new item: 
‘‘2320a. Rights in technical data for non-FAR agreements.’’. 
(b) REPORT ON LIFE CYCLE PLANNING FOR TECH-
NICAL DATA NEEDS.—Not later than 120 days after the 
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312 
date of enactment of this Act, the Secretary of Defense shall 
submit to the Committees on Armed Services of the Senate 
and the House of Representatives a report on the implemen-
tation of the requirements in section 2320(e) of title 10, 
United States Code, for the assessment of long-term tech-
nical data needs to sustain major weapon systems. Such 
report shall include— 
(1) a description of all relevant guidance or poli-
cies issued; 
(2) the extent to which program managers have 
received training to better assess the long-term tech-
nical data needs of major weapon systems and sub-
systems; 
(3) a description of the data rights strategies de-
veloped prior to the issuance of contract solicitations 
released since October 17, 2006; and 
(4) a characterization of the extent to which such 
strategies made use of priced contract options for the 
future delivery of technical data or acquired all rel-
evant technical data upon contract award. 
SEC. 815. CLARIFICATION THAT COST ACCOUNTING STAND-
ARDS APPLY TO FEDERAL CONTRACTS PER-
FORMED OUTSIDE THE UNITED STATES. 
(a) CLARIFICATION.—Section 26(f)(2)(A) of the Office 
of Federal Procurement Policy Act (41 U.S.C. 422(f)(2)(A)) 
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313 
is amended by adding at the end the following: ‘‘, whether 
the contracts or subcontracts are performed inside or out-
side the United States’’. 
(b) IMPLEMENTING REGULATIONS.—Not later than 
180 days after the date of the enactment of this Act, the 
cost accounting standards promulgated under section 26 of 
such Act shall be amended to take into account the amend-
ment made by subsection (a). 
Subtitle C—Provisions Relating to 
Inherently Governmental Functions 
SEC. 821. POLICY ON PERSONAL CONFLICTS OF INTEREST 
BY EMPLOYEES OF DEPARTMENT OF DE-
FENSE CONTRACTORS. 
(a) POLICY REQUIRED.—Not later than 180 days after 
the date of the enactment of this Act, the Secretary of De-
fense shall develop a standard policy aimed at preventing 
personal conflicts of interest by employees of Department 
of Defense contractors that is similar to the policy of the 
Department of Defense aimed at preventing such conflicts 
by Department of Defense civilian employees. 
(b) ELEMENTS OF POLICY.—The policy required under 
subsection (a) shall— 
(1) provide a definition of the term ‘‘personal 
conflict of interest’’ as it relates to employees of De-
partment of Defense contractors; 
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314 
(2) identify types of contracts that raise height-
ened concerns for potential personal conflicts of inter-
est; and 
(3) require each contractor that participates in 
the Department’s decision-making in such mission- 
critical areas as the development, award, and admin-
istration of Government contracts, and each con-
tractor that is closely supporting inherently govern-
mental functions, to— 
(A) identify and prevent personal conflicts 
of interest for employees of the contractor who 
are performing such functions; 
(B) report any personal conflict-of-interest 
violation to the applicable contracting officer or 
contracting officer’s representative as soon as it 
is identified; 
(C) maintain effective oversight to verify 
compliance with personal conflict-of-interest safe-
guards; and 
(D) have procedures in place to screen for 
potential conflicts of interest for all employees in 
a position to make or materially influence find-
ings, recommendations, and decisions regarding 
Department of Defense contracts and other advi-
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315 
sory and assistance functions, either by screening 
on a task-by-task basis or on an annual basis. 
(c) CONTRACT CLAUSE.—The Secretary shall include 
in each contract entered into by the Secretary for the per-
formance of functions described in subsection (b)(3) a clause 
that reflects the personal conflicts-of-interest policy devel-
oped under this section and that sets forth the contractor’s 
responsibility under such policy. 
(d) PANEL
ON
CONTRACTING
INTEGRITY
REC-
OMMENDATIONS.—The Department of Defense Panel on 
Contracting Integrity, established by the section 813 of the 
John Warner National Defense Authorization Act for Fiscal 
Year 2007 (Public Law 109–364), shall consider and make 
recommendations on the feasibility of applying certain pro-
curement integrity rules to employees of Department of De-
fense contractors to include such rules related to— 
(1) improper business practices and personal 
conflicts of interest under Federal Acquisition Regula-
tions 3.104; 
(2) public corruption; 
(3) financial conflicts of interest; 
(4) seeking other employment conflicts of inter-
est; 
(5) gifts and travel; and 
(6) misuse of position or endorsement. 
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316 
SEC. 822. DEVELOPMENT OF GUIDANCE ON PERSONAL 
SERVICES CONTRACTS. 
Not later than 120 days after the date of the enactment 
of this Act, the Secretary of Defense shall develop guidance 
to— 
(1) establish a clear definition of the term ‘‘per-
sonal services contract’’; 
(2) require a clear distinction between employees 
of the Department of Defense and employees of De-
partment of Defense contractors; 
(3) provide appropriate safeguards with respect 
to when, where, and to what extent the Secretary may 
enter into a contract for the procurement of personal 
services; and 
(4) assess and take steps to mitigate the risk 
that, as implemented and administered, non-personal 
services contracts may become personal services con-
tracts. 
SEC. 823. LIMITATION ON PERFORMANCE OF PRODUCT 
SUPPORT INTEGRATOR FUNCTIONS. 
(a) LIMITATION.— 
(1) IN
GENERAL.—Chapter 141 of title 10, 
United States Code, is amended by adding at the end 
the following new section: 
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‘‘§ 2410r. Performance-based logistics arrangements: 
limitation on product support integrator 
functions 
‘‘(a) LIMITATION.—A function that is a product sup-
port integrator function may be performed only by a mem-
ber of the armed forces or an employee of the Department 
of Defense. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) The term ‘product support integrator func-
tion’ means, with respect to a performance-based lo-
gistics arrangement, the function of integrating all 
sources of support, both public and private, to achieve 
the specific outcomes specified in the arrangement. 
‘‘(2) The term ‘performance-based logistics ar-
rangement’ means a performance-based contract, task 
order, or other arrangement for the logistics sup-
port— 
‘‘(A) of a weapon system or major end item 
over the life cycle of the system or item; or 
‘‘(B) of parts, assemblies, subassemblies, or 
platforms of a weapon system or major end item. 
‘‘(3) The term ‘performance-based’ has the mean-
ing given such term in section 2331(g) of this title.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such chapter is amended by 
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318 
adding after the item relating to section 2410q the fol-
lowing new item: 
‘‘2410r. Performance-based logistics arrangements: limitation on product support 
integrator functions.’’. 
(b) EFFECTIVE DATE.—Section 2410r of title 10, 
United States Code, as added by subsection (a), shall apply 
to performance-based logistics arrangements entered into 
after September 30, 2010. 
Subtitle D—Defense Industrial 
Security 
SEC. 831. REQUIREMENTS RELATING TO FACILITY CLEAR-
ANCES. 
Chapter 21 of title 10, United States Code, is amended 
by adding at the end the following new subchapter: 
‘‘SUBCHAPTER III—DEFENSE INDUSTRIAL 
SECURITY 
‘‘Sec. 438. Facility clearances: requirements. 
‘‘§ 438. Facility clearances: requirements 
‘‘(a) FACILITY CLEARANCES: GENERAL PROVISIONS.— 
‘‘(1) ACCESS TO CLASSIFIED INFORMATION BY 
CONTRACTORS.—A contractor of the Department of 
Defense may not be granted custody of classified in-
formation unless the contractor has a facility clear-
ance. 
‘‘(2) REQUIREMENTS FOR ENTITIES WITH FACIL-
ITY CLEARANCES.—An entity may not be granted a 
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319 
facility clearance by the Department of Defense or 
continue to hold such a facility clearance unless the 
entity agrees to comply with, and maintains compli-
ance with, the requirements set forth in this sub-
chapter. 
‘‘(3) AUTHORITY TO REVOKE OR SUSPEND FACIL-
ITY CLEARANCES.—The Secretary of Defense may re-
voke or suspend a facility clearance granted by the 
Department of Defense at any time. 
‘‘(b) GENERAL REQUIREMENTS FOR FACILITY CLEAR-
ANCES.—The Secretary of Defense shall require an entity 
granted a facility clearance by the Department of Defense 
to comply with the following requirements: 
‘‘(1) The entity shall safeguard classified infor-
mation in its possession. 
‘‘(2) The entity shall safeguard covered controlled 
unclassified information in its possession. 
‘‘(3) The entity shall ensure that it complies with 
Department of Defense security agreements, contract 
provisions regarding security, and relevant regula-
tions of the Department of Defense pertaining to in-
dustrial security. 
‘‘(4) The entity shall ensure that its business and 
management practices do not result in the com-
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320 
promise of classified information or adversely affect 
the performance of classified contracts. 
‘‘(5) The entity shall undergo a determination 
under section 439 of this title of whether the entity is 
under foreign ownership control or influence and 
shall comply with ongoing notification requirements 
under that section related to foreign ownership and 
control. 
‘‘(c) REQUIREMENTS FOR DIRECTORS OF ENTITIES 
WITH FACILITY CLEARANCES.— 
‘‘(1) REQUIREMENTS.—Except as provided in 
paragraph (3), the Secretary of Defense shall require 
an entity with a facility clearance to require the di-
rectors on the entity’s board of directors to ensure, in 
their capacity as fiduciaries of the entity, that the en-
tity employs and maintains policies and procedures 
that meet the general requirements for facility clear-
ances listed in subsection (b). 
‘‘(2) BY-LAWS REQUIREMENT.—The requirements 
of paragraph (1) shall be set forth in the by-laws of 
the entity. 
‘‘(3) EXCEPTIONS.—(A) The Secretary of Defense 
may waive the requirements of paragraph (1) for rea-
sons of national security. In the event the Secretary 
grants such a waiver, the Secretary shall submit to 
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321 
the Committees on Armed Services of the Senate and 
the House of Representatives a notification that such 
a waiver has been granted and a justification for 
granting the waiver. 
‘‘(B) The requirements of paragraph (1) shall 
not apply to an entity determined by the Secretary 
of Defense under section 439(a) of this title to be 
under foreign ownership control or influence. 
‘‘(d) REQUIREMENTS RELATING TO SECURITY MAN-
AGEMENT OF ENTITIES WITH FACILITY CLEARANCES.— 
‘‘(1) DESIGNATION OF EMPLOYEE RESPONSIBLE 
FOR SECURITY.—The Secretary of Defense shall re-
quire an entity, in consultation with and subject to 
the approval of the chairman of its board of directors, 
to designate an employee who meets the requirements 
of paragraph (2) to be responsible for the following: 
‘‘(A) Reporting to the board of directors of 
the entity as its principal advisor concerning the 
general requirements for facility clearances listed 
in subsection (b), the manner in which they are 
carried out through the policies and procedures 
required by subsection (c), and the related Fed-
eral requirements for classified information. 
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‘‘(B) Supervising and directing security 
measures necessary for implementing such re-
quirements, policies, and procedures. 
‘‘(C) Establishing and administering all 
intracompany procedures to prevent unauthor-
ized disclosure and export of controlled unclassi-
fied information and ensuring that the entity 
otherwise complies with the requirements of Fed-
eral export control laws. 
‘‘(2) QUALIFICATIONS OF EMPLOYEE.—An em-
ployee may not be designated to be responsible for the 
matters described in paragraph (1) unless the em-
ployee— 
‘‘(A) is a citizen of the United States; 
‘‘(B) obtains a security clearance at the 
same level as the facility clearance; and 
‘‘(C) completes security training that meets 
the requirements of the Department of Defense. 
‘‘(e) REQUIREMENTS RELATING TO MANAGEMENT RE-
SPONSIBILITIES
FOR ENTITIES WITH FACILITY CLEAR-
ANCES.—The Secretary of Defense shall require an entity 
with a facility clearance to provide a certification of secu-
rity responsibilities to the Secretary. The certification of se-
curity responsibilities shall— 
‘‘(1) affirm the entity’s responsibility— 
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323 
‘‘(A) to identify the key management per-
sonnel of the entity involved in the performance 
of classified contracts or in the setting of policies 
and practices for such contracts and to designate 
a security manager with primary responsibility 
for security functions; 
‘‘(B) to ensure that such key management 
personnel of the entity meet all eligibility re-
quirements for the performance of classified con-
tracts; 
‘‘(C) to provide such key management per-
sonnel of the entity with all the authority and 
capability necessary to safeguard classified infor-
mation and covered controlled unclassified infor-
mation in the performance of classified contracts 
in accordance with regulations prescribed by the 
Secretary; and 
‘‘(D) to manage all subcontractors and sup-
pliers of the entity performing work on a classi-
fied contract to ensure that use of such sub-
contractors and suppliers does not result in the 
compromise of classified information or ad-
versely affect the performance of classified con-
tracts; 
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324 
‘‘(2) be signed by an appropriate member of the 
board of directors of the entity or a similar executive 
body determined by the Secretary to function as an 
equivalent to a board of directors; 
‘‘(3) be disseminated to all appropriate personnel 
of the entity; and 
‘‘(4) be updated as necessary according to proce-
dures proscribed by the Secretary. 
‘‘(f) REPORTING REQUIREMENTS.—The Secretary of 
Defense shall require an entity with a facility clearance to 
submit to the Department of Defense a report on any 
event— 
‘‘(1) that affects the status of the facility clear-
ance; 
‘‘(2) that affects proper safeguarding of classified 
information or that indicates classified information 
has been lost or compromised; 
‘‘(3) that affects the entity’s compliance with De-
partment of Defense security agreements, contract 
provisions regarding security, and relevant regula-
tions of the Department of Defense pertaining to in-
dustrial security; or 
‘‘(4) that is related to the entity’s business and 
management practices that results in the compromise 
of classified information.’’. 
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SEC. 832. FOREIGN OWNERSHIP CONTROL OR INFLUENCE. 
(a) IN GENERAL.—Subchapter III of chapter 21 of 
title 10, United States Code, as added by section 831, is 
amended by adding at the end the following new section: 
‘‘§ 439. Foreign ownership control or influence 
‘‘(a) DETERMINATION OF FOREIGN OWNERSHIP CON-
TROL OR INFLUENCE.— 
‘‘(1) IN GENERAL.—Before granting a facility 
clearance to an entity, and while such entity holds a 
facility clearance, the Secretary of Defense shall deter-
mine whether an entity is under foreign ownership 
control or influence (in this subchapter referred to as 
‘FOCI’). 
‘‘(2) DESCRIPTION
OF
FOCI.—For purposes of 
paragraph (1), the Secretary shall determine an enti-
ty to be under FOCI if a foreign interest has the 
power, direct or indirect, whether or not exercised, 
and whether or not exercisable through the ownership 
of the entity’s securities, by contractual arrangements 
or other means, to direct or decide matters affecting 
the management or operations of that entity in a 
manner that may result in— 
‘‘(A) unauthorized access to classified infor-
mation; 
‘‘(B) unauthorized access to covered con-
trolled unclassified information; 
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‘‘(C) an adverse effect on the performance of 
classified contracts; or 
‘‘(D) an adverse effect on the entity’s com-
pliance with Department of Defense security 
agreements, appropriate contract provisions re-
garding security, and relevant Department regu-
lations pertaining to industrial security. 
‘‘(b) FOCI FACTORS.— 
‘‘(1) IN GENERAL.—The following factors relat-
ing to an entity, a foreign interest, or a government 
of a foreign interest shall be considered by the Sec-
retary of Defense in determining under this section 
whether an entity is under foreign ownership control 
or influence and the protective measures that may be 
required to mitigate the FOCI of the entity: 
‘‘(A) Record of economic and government es-
pionage against United States targets by the en-
tity, by any foreign interest in the entity, and 
by the government of any such foreign interest. 
‘‘(B) Record of enforcement of covered con-
trolled unclassified information or engagement 
in unauthorized technology transfer. 
‘‘(C) The type and sensitivity of the infor-
mation expected to be accessed in performing a 
classified contract. 
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‘‘(D) The source, nature, and extent of 
FOCI, including whether foreign interests hold a 
majority or substantial minority position in the 
entity, taking into consideration the immediate, 
intermediate, and ultimate parent entities, sister 
entities, joint ventures, and hedge funds. 
‘‘(E) Record of compliance with pertinent 
United States laws, regulations, and contracts by 
the entity, by the foreign interest (if any) in the 
entity, and by parent entities, sister entities, 
joint ventures, and hedge funds. 
‘‘(F) The nature of any bilateral and multi-
lateral security and information exchange agree-
ments that may pertain to the entity, any for-
eign interest in the entity, and the government 
of any such foreign interest. 
‘‘(G) Ownership, control, or influence of the 
entity, in whole or in part, by a foreign govern-
ment. 
‘‘(2) MINORITY
POSITION.—For purposes of 
paragraph (1)(D), a minority position shall be con-
sidered substantial if— 
‘‘(A) it consists of greater than 5 percent of 
the ownership interests; 
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328 
‘‘(B) it consists of greater than 10 percent 
of the voting interest; or 
‘‘(C) the minority position controls a seat 
on the entity’s board of directors. 
‘‘(c) MITIGATION OF FOREIGN OWNERSHIP CONTROL 
OR INFLUENCE.— 
‘‘(1) PROTECTIVE MEASURES AUTHORIZED FOR 
MITIGATION
OF
FOCI.—With respect to any entity 
with a facility clearance under FOCI, as determined 
under subsection (a), the Secretary of Defense may 
impose any security method, safeguard, or restriction 
the Secretary believes necessary to ensure that the en-
tity complies with the general requirements for facil-
ity clearances listed in subsection (b) of section 438 
of this title. 
‘‘(2) GOVERNMENT
SECURITY
COMMITTEE
RE-
QUIREMENT FOR MITIGATION OF FOCI.— 
‘‘(A) IN GENERAL.—As part of the mitiga-
tion of foreign ownership control or influence of 
an entity determined to be under FOCI, the Sec-
retary of Defense shall require the entity to es-
tablish a permanent committee of the entity’s 
board of directors, or equivalent executive body, 
to be known as the entity’s ‘Government Security 
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329 
Committee’, for purposes of carrying out the re-
quirements of this paragraph. 
‘‘(B) RESPONSIBILITIES OF GSC.—The re-
sponsibilities of the Government Security Com-
mittee of an entity are to ensure that the entity 
employs and maintains policies and procedures 
that ensure that the entity complies with the gen-
eral requirements for facility clearances listed in 
subsection (b) of section 438 of this title. 
‘‘(C) ROLE
OF
SECURITY
MANAGER
IN 
GSC.—The employee of the entity designated pur-
suant to section 438(c)(1)(A) as the security 
manager shall be the principal advisor to the 
Government Security Committee and attend 
committee meetings. The chairman of the Gov-
ernment Security Committee must concur with 
the appointment and replacement of persons fill-
ing the position of security manager selected by 
management of the entity. The functions of the 
security manager shall be carried out under the 
authority of the Government Security Com-
mittee. 
‘‘(3) RELATIONSHIP TO FACILITY CLEARANCE.— 
In the case of an entity with a facility clearance 
under FOCI, as determined under subsection (a), the 
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following provisions apply with respect to the status 
of the facility clearance of the entity: 
‘‘(A) CONTINUATION IN EFFECT WHILE NE-
GOTIATING MITIGATION MEASURE.—The facility 
clearance of the entity shall continue in effect if 
the entity is negotiating with the Secretary a 
mitigation measure and the Secretary determines 
that there is no indication that classified infor-
mation or covered controlled unclassified infor-
mation is at risk of compromise. 
‘‘(B) INVALIDATION
IF
NO
MITIGATION 
MEASURE WITHIN SIX MONTHS.—(i) Subject to 
subparagraph (C), the Secretary shall invalidate 
the facility clearance of the entity if an accept-
able mitigation measure has not been agreed to 
by the Secretary and the entity by the end of the 
six-month period beginning on the date of the de-
termination by the Secretary that the entity is 
under FOCI. 
‘‘(ii) The six-month period described in 
clause (i) may be extended for one additional 
three-month period upon request by the entity if 
the Secretary approves an extension. 
‘‘(C) REVOCATION IF POSSIBILITY OF UNAU-
THORIZED ACCESS OR ADVERSE EFFECT.—The 
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Secretary shall revoke the facility clearance of 
the entity at any time if, regardless of whether 
the entity is negotiating a mitigation measure 
with the Secretary, the Secretary determines that 
security measures cannot be taken to remove the 
possibility of unauthorized access or an adverse 
effect on classified contracts. 
‘‘(d) NOTIFICATION TO DEPARTMENT OF DEFENSE RE-
GARDING CHANGE IN FOCI.—The Secretary of Defense 
shall require an entity to notify the Secretary when mate-
rial changes occur to information previously submitted to 
the Department of Defense pertaining to the FOCI factors 
affecting the entity as soon as such information is known 
to the entity. 
‘‘(e) NOTIFICATION TO DEPARTMENT OF DEFENSE RE-
GARDING MERGERS, ACQUISITIONS, OR TAKEOVERS
BY 
FOREIGN PERSONS.—The Secretary of Defense shall require 
that when an entity with a facility clearance enters into 
negotiations for a proposed merger, acquisition, or takeover 
by a foreign person, the entity shall submit to the Secretary 
of Defense a notification of the commencement of such nego-
tiations and a plan to negate the FOCI resulting from the 
transaction.’’. 
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332 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such subchapter is amended by adding at 
the end the following new item: 
‘‘Sec. 439. Foreign ownership control or influence.’’. 
SEC. 833. CONGRESSIONAL OVERSIGHT RELATING TO FA-
CILITY CLEARANCES AND FOREIGN OWNER-
SHIP CONTROL OR INFLUENCE; DEFINITIONS. 
(a) NOTIFICATIONS AND REPORTS.—Subchapter III of 
chapter 21 of title 10, United States Code, as added by sec-
tion 831, is further amended by adding at the end the fol-
lowing new section: 
‘‘§ 440. Notifications and reports 
‘‘(a) NOTIFICATIONS REQUIRED.—The Secretary of 
Defense shall submit to the Committees on Armed Services 
of the Senate and the House of Representatives a notifica-
tion within 30 days after the occurrence of any of the fol-
lowing: 
‘‘(1) The revocation or suspension by the Sec-
retary of a facility clearance of an entity previously 
determined to be under foreign ownership control or 
influence. 
‘‘(2) The receipt by the Secretary of a notifica-
tion under section 439(d) from an entity that the en-
tity has entered into negotiations for a proposed 
merger, acquisition, or takeover by a foreign person. 
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‘‘(b) BIANNUAL REPORT.—(1) The Secretary of De-
fense shall, not later than September 1, 2009, and bian-
nually thereafter, submit to the Committees on Armed Serv-
ices of the Senate and the House of Representatives a report 
containing the following: 
‘‘(A) Specific, cumulative, and, as appropriate, 
trend information on the numbers of entities— 
‘‘(i) holding facility clearances; 
‘‘(ii) that have reported a material change 
relating to FOCI factors; 
‘‘(iii) that have measures in place to miti-
gate foreign ownership control or influence; or 
‘‘(iv) that have had a facility clearance sus-
pended or revoked. 
‘‘(B) Specific, cumulative, and, as appropriate, 
trend information, on— 
‘‘(i) the entities that have filed for or main-
tain facility clearances; 
‘‘(ii) the number of such entities determined 
to be under foreign ownership control or influ-
ence; 
‘‘(iii) the countries from which such entities 
have originated; 
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334 
‘‘(iv) the number that went through the 
Committee on Foreign Investment in the United 
States; and 
‘‘(v) the types of security arrangements and 
conditions that the Government Security Com-
mittees of entities have used to mitigate foreign 
ownership control or influence. 
‘‘(C) An analysis of trends in the Industrial Se-
curity Program, including an assessment of the num-
ber and types of errors found in compliance within 
the Program. 
‘‘(D) An analysis of the details of companies that 
have committed violations of the Industrial Security 
Program and the frequency of the violations, includ-
ing the number of companies that have committed re-
curring violations. 
‘‘(E) A description of the corrective actions, if 
any, taken by the Defense Security Service to address 
the violations. 
‘‘(2) The information required under paragraph 
(1)(B) shall be organized and set forth separately in the 
report by defense sector within the defense industrial base. 
‘‘(3) The report shall be submitted in an unclassified 
form, but may contain a classified annex.’’. 
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335 
(b) DEFINITIONS.—Subchapter III of chapter 21 of 
title 10, United States Code, as added by section 831, is 
further amended by adding at the end the following new 
section: 
‘‘§ 440a. Definitions 
‘‘In this subchapter: 
‘‘(1) ENTITY.—The term ‘entity’ includes a cor-
poration, company, association, firm, partnership, so-
ciety, or joint stock company, but does not include an 
individual. 
‘‘(2) FACILITY CLEARANCE.—The term ‘facility 
clearance’, with respect to an entity, means an ad-
ministrative determination by the Secretary of De-
fense that the entity is eligible for— 
‘‘(A) access to classified information; or 
‘‘(B) award of a classified contract. 
‘‘(3) CLASSIFIED INFORMATION.—The term ‘clas-
sified information’ means any information that has 
been determined pursuant to Executive Order 12958 
or any predecessor order to require protection against 
unauthorized disclosure and is so designated. The 
classifications ‘top secret’, ‘secret’, and ‘confidential’ 
are used to designate such information. 
‘‘(4) CLASSIFIED CONTRACT.—The term ‘classi-
fied contract’ means any contract requiring access to 
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336 
classified information by a contractor or the contrac-
tor’s employees in the performance of the contract or 
in any phase of precontract activity or post-contract 
activity. 
‘‘(5) COVERED CONTROLLED UNCLASSIFIED IN-
FORMATION.—The term ‘covered controlled unclassi-
fied information’ means unclassified information the 
export of which— 
‘‘(A) is controlled, in the case of technical 
data that is inherently military in nature, by 
the International Traffic in Arms Regulations 
(ITAR); and 
‘‘(B) is controlled, in the case of technical 
data that has both military and commercial 
uses, by the Export Administration Regulations 
(EAR).’’. 
(c) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such subchapter is amended by adding at 
the end the following new items: 
‘‘Sec. 440. Notifications and reports. 
‘‘Sec. 440a. Definitions.’’. 
(d) REGULATIONS.—The Secretary of Defense shall 
prescribe regulations to carry out subchapter III of chapter 
21 of title 10, United States Code, not later than September 
1, 2009. 
(e) STUDY AND REPORT.— 
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(1) IN GENERAL.—The Secretary of Defense shall 
conduct a study on investments in entities covered by 
subchapter III of chapter 21 of title 10, United States 
Code, as added by this title. The study shall examine 
investments in such entities by— 
(A) foreign governments; 
(B) entities controlled by or acting on be-
half of a foreign government; 
(C) persons of foreign countries; and 
(D) hedge funds. 
(2) REPORT.—Not later than 180 days after the 
date of the enactment of this Act, the Secretary of De-
fense shall submit to Congress a report on the results 
of the study conducted under paragraph (1). The in-
formation in the report shall be organized and set 
forth separately by defense sector within the defense 
industrial base. 
Subtitle E—Other Matters 
SEC. 841. CLARIFICATION OF STATUS OF GOVERNMENT 
RIGHTS IN THE DESIGNS OF DEPARTMENT OF 
DEFENSE VESSELS, BOATS, AND CRAFT, AND 
COMPONENTS THEREOF. 
(a) IN GENERAL.—Chapter 633 of title 10, United 
States Code, is amended by adding at the end the following 
new section: 
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‘‘§ 7317. Status of Government rights in the designs of 
vessels, boats, and craft, and components 
thereof 
‘‘Government rights in the design of a vessel, boat, or 
craft, or its components, including the hull, decks, and su-
perstructure, shall be determined solely by operation of sec-
tion 2320 of this title or by the instrument under which 
the design was developed for the Government.’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such chapter is amended by adding at the 
end the following new item: 
‘‘7317. Status of Government rights in the designs of vessels, boats, and craft, and 
components thereof.’’. 
SEC. 842. EXPANSION OF AUTHORITY TO RETAIN FEES 
FROM LICENSING OF INTELLECTUAL PROP-
ERTY. 
Section 2260 of title 10, United States Code, is amend-
ed— 
(1) in subsection (a), by inserting ‘‘or the Sec-
retary of Homeland Security’’ after ‘‘Secretary of De-
fense’’; and 
(2) in subsection (f)— 
(A) by striking ‘‘(f) DEFINITIONS.—In this 
section, the’’ and inserting the following: 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) The’’; and 
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339 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) The term ‘Secretary concerned’ has the 
meaning provided in section 101(a)(9) of this title 
and also includes— 
‘‘(A) the Secretary of Defense, with respect 
to matters concerning the Defense Agencies and 
Department of Defense Field Activities; and 
‘‘(B) the Secretary of Homeland Security, 
with respect to matters concerning the Coast 
Guard when it is not operating as a service in 
the Department of the Navy.’’. 
SEC. 843. TRANSFER OF SECTIONS OF TITLE 10 RELATING 
TO MILESTONE A AND MILESTONE B FOR 
CLARITY. 
(a) REVERSAL
OF ORDER
OF SECTIONS.—Section 
2366b of title 10, United States Code, is transferred so as 
to appear before section 2366a of such title. 
(b) REDESIGNATION
OF SECTIONS.—Section 2366b 
(relating to Milestone A) and section 2366a (relating to 
Milestone B) of such title, as so transferred, are redesignated 
as sections 2366a and 2366b, respectively. 
(c) TECHNICAL AMENDMENT.—The table of sections at 
the beginning of chapter 139 of title 10, United States Code, 
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is amended by striking the items relating sections 2366a 
and 2366b and inserting the following new items: 
‘‘2366a. Major defense acquisition programs: certification required before Mile-
stone A or Key Decision Point A approval. 
‘‘2366b. Major defense acquisition programs: certification required before Milestone 
B or Key Decision Point B approval.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) SECTION 181 OF TITLE 10, UNITED STATES 
CODE.—Section 181(b)(4) of title 10, United States 
Code, is amended by striking ‘‘section 2366a(a)(4), 
section 2366b(b),’’ and inserting ‘‘section 2366a(b), 
section 2366b(a)(4),’’. 
(2) NATIONAL
DEFENSE
AUTHORIZATION
ACT 
FOR FISCAL YEAR 2008.—The National Defense Au-
thorization Act for Fiscal Year 2008 (Public Law 
110–181) is amended— 
(A) in section 212(1) by striking ‘‘2366a’’ 
and inserting ‘‘2366b’’; and 
(B) in section 816— 
(i) in subsection (a)(2) by striking 
‘‘2366a’’ and inserting ‘‘2366b’’; 
(ii) in subsection (a)(3) by striking 
‘‘2366b of title 10, United States Code, as 
added by section 943 of this Act’’ and in-
serting ‘‘2366a of title 10, United States 
Code’’; and 
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341 
(iii) in subsection (c)(2) by striking 
‘‘2366a’’ each place such term appears (in-
cluding in the paragraph heading) and in-
serting ‘‘2366b’’. 
(3) JOHN WARNER NATIONAL DEFENSE AUTHOR-
IZATION ACT FOR FISCAL YEAR 2007.—The John War-
ner National Defense Authorization Act for Fiscal 
Year 2007 (Public Law 109–364) is amended in sec-
tion 812 (120 Stat. 2317), in each of subsections 
(c)(2)(A) and (d)(2), by striking ‘‘2366a’’ and insert-
ing ‘‘2366b’’. 
SEC. 844. EARNED VALUE MANAGEMENT STUDY AND RE-
PORT. 
(a) STUDY.—The Secretary of Defense shall conduct a 
study that— 
(1) assesses weaknesses in earned value manage-
ment implementation, including a review of the meth-
odology, accuracy of data, training, and information 
technology systems used to develop earned value man-
agement data; 
(2) audits the accuracy of the earned value man-
agement data provided by vendors to the Federal Gov-
ernment concerning acquisition categories I and II 
programs; and 
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342 
(3) measures the success of utilizing earned value 
management to deliver program objectives. 
(b) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, the Secretary of Defense shall 
submit to the appropriate committees a report that— 
(1) identifies recommendations for improving the 
implementation of earned value management, includ-
ing alternatives; and 
(2) contains the findings of the study conducted 
under subsection (a). 
(c) DEFINITIONS.—In this section: 
(1) APPROPRIATE COMMITTEES.—The term ‘‘ap-
propriate committees’’ means the Committee on 
Armed Services of the Senate and the Committee on 
Armed Services of the House of Representatives. 
(2) EARNED
VALUE
MANAGEMENT.—The term 
‘‘earned value management’’ has the meaning given 
that term in section 300 of part 7 of Office of Man-
agement and Budget Circular A–11. 
SEC. 845. REPORT ON MARKET RESEARCH. 
(a) REPORT REQUIRED.—Not later than October 1, 
2009, the Secretary of Defense shall submit to the Commit-
tees on Armed Services of the Senate and the House of Rep-
resentatives a report on the market research conducted by 
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343 
the Secretary in implementing section 2377 of title 10, 
United States Code. 
(b) SAMPLE EXAMINED.—For purposes of the report, 
the Secretary shall examine a representative sample of con-
tracts and task or delivery orders, each of which— 
(1) is for an amount in excess of $5,000,000; and 
(2) is for the acquisition of a mission critical or 
a complex military system in which computer soft-
ware is a component or subcomponent. 
(c) MATTERS COVERED.—The report shall contain the 
following: 
(1) A statement of the total number of contracts 
and task or delivery orders awarded in fiscal year 
2007 for a mission critical or complex military sys-
tem in which software is a component or subcompo-
nent. 
(2) A statement of the number of contracts and 
task or delivery orders in the sample examined for 
purposes of the report (as described in subsection (b)), 
and a description of those contracts and orders. 
(3) For the sampled contracts and orders, a de-
scription of how often market research was performed 
on the sampled contracts and orders. 
(4) For the sampled contracts and orders, a de-
scription of whether a Government employee or a con-
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344 
tractor employee performed the market research and 
how the market research was performed. 
(5) For the sampled contracts and orders, an 
identification of— 
(A) instances when the market research 
identified software that was available as a com-
mercial item and that could be used to meet the 
Government’s requirements; 
(B) instances when the software was modi-
fied or proposed to be modified to meet the De-
partment’s requirements; or 
(C) instances when the Department’s re-
quirements were modified to meet the capability 
of the commercial item software. 
(6) An identification of the training tools the 
Secretary of Defense has developed to assist con-
tracting officials in performing market research. 
(7) An identification of actions the Department 
of Defense intends to take to further implement sec-
tion 2377 of title 10, United States Code, and section 
826(b) of the National Defense Authorization Act for 
Fiscal year 2007 (Public Law 110–181; 10 U.S.C. 
2377 note), including dissemination of best practices 
and corrective actions where necessary. 
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345 
SEC. 846. SYSTEM DEVELOPMENT AND DEMONSTRATION 
BENCHMARK REPORT. 
(a) SYSTEM DEVELOPMENT
AND DEMONSTRATION 
BENCHMARK REPORT.— 
(1) BENCHMARK REPORT REQUIRED.—The Sec-
retary of a military department shall submit a sys-
tem development and demonstration benchmark re-
port as an annex to the baseline description required 
in section 2435 of title 10, United States Code, for 
each major defense acquisition program identified in 
subsection (b). Such a system development and dem-
onstration benchmark report shall be based upon the 
most recent contractor proposal, the capabilities devel-
opment document, and the systems requirements docu-
ment approved prior to Milestone B approval and 
shall include the following information: 
(A) The key performance parameters and 
technical requirements identified in the capabili-
ties development document and systems require-
ments document. 
(B) A detailed description of performance 
capabilities proposed by the contractor, matched 
to the capabilities and requirements in the capa-
bilities development document and systems re-
quirements document. 
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346 
(C) A target cost for system development 
and demonstration, excluding incentive or award 
fees and including both government and non-gov-
ernment costs. 
(D) A detailed outline of negotiated contract 
incentive or award fees. 
(E) A detailed outline of contract ceiling 
price, target cost, target profit, and contract 
share line. 
(F) A schedule of key events. 
(G) An identification of critical technologies 
and associated technology readiness levels esti-
mated for each upon both the initiation and the 
conclusion of system development and dem-
onstration. 
(H) Estimated percentage completion of de-
tail design at each scheduled design readiness re-
view and the scheduled Milestone C approval 
date. 
(I) A discussion of development risk and 
concurrency within the program. 
(J) Any other factors that the milestone de-
cision authority considers relevant. 
(2) TIMELINE FOR SUBMISSION OF BENCHMARK 
REPORT.—A system development and demonstration 
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benchmark report for a major defense acquisition pro-
gram identified in subsection (b) shall be submitted to 
the congressional defense committees and prepared 
under this section— 
(A) not later than 30 days after the date of 
the enactment of this Act, if the Department of 
Defense has entered into a contract for system 
development and demonstration for such a major 
defense acquisition program prior to the date of 
enactment of this Act; or 
(B) in accordance with the requirements for 
the establishment of a baseline description re-
quired by section 2435 of title 10, United States 
Code, in any other case. 
(3) ALTERATIONS.—No alterations or revisions 
may be made to a system development and dem-
onstration benchmark report after the first such re-
port is prepared in accordance with paragraph (2). 
(b) MAJOR DEFENSE ACQUISITION PROGRAMS IN-
CLUDED.—For the purposes of this section, the major de-
fense acquisition programs to be included in the pilot pro-
gram are the following: 
(1) BAMS, broad area maritime surveillance un-
manned aerial vehicle. 
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(2) CSAR–X, combat search and rescue heli-
copter. 
(3) JLTV, joint light tactical vehicle. 
(4) KC–45A, aerial refueling tanker. 
(5) VH–71, presidential helicopter, increment II. 
(6) Warrior-Alpha, unmanned aerial vehicle. 
(c) SYSTEM
DEVELOPMENT
AND
DEMONSTRATION 
CHANGES.—The Under Secretary of Defense for Acquisi-
tion, Technology, and Logistics shall establish a Configura-
tion Steering Board for each major defense acquisition pro-
gram identified in subsection (b). The Board shall oversee 
any proposed alteration to the requirements or to the pro-
posed technical configuration for such a major defense ac-
quisition program during system development and dem-
onstration. If such an alteration would increase the cost to 
the Government, extend the schedule by more than 30 days, 
or alter the proposed performance capabilities, as estab-
lished in the system development and demonstration base-
line required by subsection (a), the Configuration Steering 
Board shall not approve the alteration until— 
(1) the chair of the Configuration Steering 
Board has submitted to the congressional defense com-
mittees a written description of the alteration and an 
explanation of the rationale for the alteration; and 
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349 
(2) not less than 15 days have expired since the 
date of submission of such description and expla-
nation to those committees. 
(d) ADDITIONAL REPORTING REQUIREMENTS.— 
(1) IN GENERAL.—The Secretary of a military 
department shall submit a semi-annual contract per-
formance assessment report to the milestone decision 
authority and to the congressional defense committees 
on each major defense acquisition program identified 
in subsection (b). The report shall be in unclassified 
form, but may have a classified annex or an annex 
that is restricted to protect source selection, business- 
sensitive, or proprietary information. 
(2) CONTENTS.—Each such report shall describe 
contract execution regarding contract cost perform-
ance, schedule performance, and incentive or award 
fee reviews and outlays, and an estimated cost at 
completion of the end item compared to the system de-
velopment and demonstration benchmark report re-
quired in subsection (a)(1). 
(3) FIRST REPORT.—The first such report shall 
be submitted not later than 180 days after— 
(A) system design and development contract 
award; or 
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(B) after enactment of this Act in the case 
of a system design and development contract that 
was awarded before the date of the enactment of 
this Act. 
(4) TERMINATION
OF
REPORTING
REQUIRE-
MENT.—The reporting requirement shall terminate 
upon a full rate production decision for each major 
defense acquisition program identified in subsection 
(b). 
(e) PROHIBITION ON MILESTONE C APPROVAL.—(1) 
Except as provided in paragraph (2), the Milestone C ap-
proval shall not be granted if the milestone decision author-
ity determines, on the basis of a report submitted pursuant 
to subsection (d), or has other reason to believe, that— 
(A) the cost (including any increase for ex-
pected inflation or currency exchange rates) for 
system development and demonstration has in-
creased by more than 25 percent over the system 
development and demonstration baseline estab-
lished in (a)(1), or 
(B) the schedule for key events is delayed by 
more than 15 percent of the total number of 
months between the award of the system develop-
ment and demonstration contract and the sched-
uled Milestone C approval date, as provided in 
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351 
the system development and demonstration base-
line established in subsection (a)(1). 
(2) The Under Secretary of Defense for Acquisi-
tion, Technology, and Logistics may waive the prohi-
bition in paragraph (1) upon certification to the con-
gressional defense committees, along with supporting 
rationale, that proceeding to low rate initial produc-
tion is in the best interest of the Department of De-
fense. 
(f) DEFINITIONS.—In this section: 
(1) CONFIGURATION
STEERING
BOARD.—The 
term ‘‘Configuration Steering Board’’ means the com-
mittee described in the memorandum regarding Con-
figuration Steering Boards from the Under Secretary 
of Defense for Acquisition, Technology, and Logistics 
dated July 30, 2007, for the secretaries of the military 
departments, Chairman of the Joint Chiefs of Staff, 
Under Secretaries of Defense, and Commander, U.S. 
Special Operations Command. 
(2) MILESTONE B APPROVAL.—The term ‘‘Mile-
stone B approval’’ has the meaning provided in sec-
tion 2366(e)(7) of title 10, United States Code. 
(3) MILESTONE C APPROVAL.—The term ‘‘Mile-
stone C approval’’ has the meaning provided in sec-
tion 2366(e)(8) of title 10, United States Code; 
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(4) MAJOR DEFENSE ACQUISITION PROGRAM.— 
The term ‘‘major defense acquisition program’’ has 
the meaning provided in section 2430 of title 10, 
United States Code. 
SEC. 847. ADDITIONAL MATTERS REQUIRED TO BE RE-
PORTED BY CONTRACTORS PERFORMING SE-
CURITY FUNCTIONS IN AREAS OF COMBAT 
OPERATIONS. 
Section 862(a)(2)(D) of the National Defense Author-
ization Act for Fiscal Year 2008 (Public Law 110–181) is 
amended— 
(1) by striking ‘‘or’’ at the end of clause (ii); and 
(2) by adding at the end the following new 
clauses: 
‘‘(iv) a weapon is discharged against 
personnel performing private security func-
tions in an area of combat operations or 
personnel performing such functions believe 
a weapon was so discharged; or 
‘‘(v) active, non-lethal countermeasures 
(other than the discharge of a weapon) are 
employed by the personnel performing pri-
vate security functions in an area of combat 
operations in response to a perceived imme-
diate threat to such personnel;’’. 
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SEC. 848. REPORT RELATING TO MUNITIONS. 
Not later than March 1, 2009, the Secretary of Defense 
shall submit to the congressional defense committees a re-
port detailing how 60mm and 81mm munitions used by 
the Armed Forces are procured, including, where relevant, 
an explanation of the decision to procure such munitions 
from non-domestic sources and the justification for award-
ing contracts to non-domestic sources. The report shall also 
include a plan to develop a domestic producer as the source 
for 60mm and 81mm munitions used by the Armed Forces 
by 2012. 
TITLE IX—DEPARTMENT OF DE-
FENSE 
ORGANIZATION 
AND 
MANAGEMENT 
Subtitle A—Department of Defense Management 
Sec. 901. Revisions in functions and activities of special operations command. 
Sec. 902. Requirement to designate officials for irregular warfare. 
Sec. 903. Plan required for personnel management of special operations forces. 
Sec. 904. Director of Operational Energy Plans and Programs. 
Sec. 905. Corrosion control and prevention executives for the military depart-
ments. 
Sec. 906. Alignment of Deputy Chief Management Officer responsibilities. 
Sec. 907. Requirement for the Secretary of Defense to prepare a strategic plan to 
enhance the role of the National Guard and Reserves. 
Sec. 908. Redesignation of the Department of the Navy as the Department of the 
Navy and Marine Corps. 
Sec. 909. Support to Committee review. 
Subtitle B—Space Activities 
Sec. 911. Extension of authority for pilot program for provision of space surveil-
lance network services to non-United States Government entities. 
Sec. 912. Investment and acquisition strategy for commercial satellite capabili-
ties. 
Subtitle C—Chemical Demilitarization Program 
Sec. 921. Chemical Demilitarization Citizens Advisory Commissions in Colorado 
and Kentucky. 
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Sec. 922. Prohibition on transport of hydrolysate at Pueblo Chemical Depot, Col-
orado. 
Subtitle D—Intelligence-Related Matters 
Sec. 931. Technical changes following the redesignation of National Imagery and 
Mapping Agency as National Geospatial-Intelligence Agency. 
Sec. 932. Technical amendments to title 10, United States Code, arising from en-
actment of the Intelligence Reform and Terrorism Prevention 
Act of 2004. 
Sec. 933. Technical amendments relating to the Associate Director of the CIA for 
Military Affairs. 
Subtitle E—Other Matters 
Sec. 941. Department of Defense School of Nursing revisions. 
Sec. 942. Amendments of authority for regional centers for security studies. 
Sec. 943. Findings and Sense of Congress regarding the Western Hemisphere In-
stitute for Security Cooperation. 
Sec. 944. Restriction on obligation of funds for United States Southern Command 
development assistance activities. 
Sec. 945. Authorization of non-conventional assisted recovery capabilities. 
Sec. 946. Report on United States Northern Command development of inter-
agency plans and command and control relationships. 
Subtitle A—Department of Defense 
Management 
SEC. 901. REVISIONS IN FUNCTIONS AND ACTIVITIES OF 
SPECIAL OPERATIONS COMMAND. 
Subsection (j) of section 167 of title 10, United States 
Code, is amended to read as follows: 
‘‘(j) SPECIAL OPERATIONS ACTIVITIES.—For purposes 
of this section, special operations activities include each of 
the following insofar as it relates to special operations: 
‘‘(1) Unconventional warfare. 
‘‘(2) Irregular warfare. 
‘‘(3) Counterterrorism. 
‘‘(4) Counterinsurgency. 
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‘‘(5) Counterproliferation of weapons of mass de-
struction. 
‘‘(6) Direct action. 
‘‘(7) Strategic reconnaissance. 
‘‘(8) Foreign internal defense. 
‘‘(9) Civil-military defense. 
‘‘(10) Psychological and information operations. 
‘‘(11) Humanitarian assistance. 
‘‘(12) Theater search and rescue. 
‘‘(13) Such other activities as may be specified 
by the President or the Secretary of Defense.’’. 
SEC. 902. REQUIREMENT TO DESIGNATE OFFICIALS FOR IR-
REGULAR WARFARE. 
The Secretary of Defense shall designate— 
(1) a single executive agent for irregular warfare 
within the Department of Defense; and 
(2) an Assistant Secretary of Defense to be re-
sponsible for overall management and coordination of 
irregular warfare. 
SEC. 903. PLAN REQUIRED FOR PERSONNEL MANAGEMENT 
OF SPECIAL OPERATIONS FORCES. 
(a) REQUIREMENT FOR PLAN.—Not later than 30 days 
after the date of the enactment of this Act, the commander 
of the special operations command shall submit to the con-
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356 
gressional defense committees a plan relating to personnel 
management of special operations forces. 
(b) MATTERS COVERED.—The plan submitted under 
subsection (a) shall address the following: 
(1) Coordination among the military depart-
ments in order to enhance the manpower management 
and improve overall readiness of special operations 
forces. 
(2) Coordination by the commander of the spe-
cial operations command with the Secretaries of the 
military departments in order to better execute his re-
sponsibility to maintain readiness of special oper-
ations forces, including in the areas of accessions, as-
signments, compensation, promotions, professional de-
velopment, retention, sustainment, and training. 
SEC. 904. DIRECTOR OF OPERATIONAL ENERGY PLANS AND 
PROGRAMS. 
(a) ESTABLISHMENT OF POSITION; DUTIES.—Chapter 
4 of title 10, United States Code, is amended by inserting 
after section 139a the following new section: 
‘‘§ 139b. Director of Operational Energy Plans and 
Programs 
‘‘(a) APPOINTMENT.—There is a Director of Oper-
ational Energy Plans and Programs in the Department of 
Defense (in this section referred to as the ‘Director’), ap-
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pointed by the President, by and with the advice and con-
sent of the Senate. The Director shall be appointed without 
regard to political affiliation and solely on the basis of fit-
ness to perform the duties of the office of Director. 
‘‘(b) DUTIES.—The Director shall— 
‘‘(1) provide leadership and facilitate commu-
nication regarding, and conduct oversight to manage 
and be accountable for, operational energy plans and 
programs within the Department of Defense and the 
Army, Navy, Air Force, and Marine Corps; 
‘‘(2) establish the operational energy strategy; 
‘‘(3) coordinate and oversee planning and pro-
gram activities of the Department of Defense and the 
Army, Navy, Air Force, and the Marine Corps related 
to— 
‘‘(A) implementation of the operational en-
ergy strategy; 
‘‘(B) the consideration of operational energy 
demands in defense planning, requirements, and 
acquisition processes; and 
‘‘(C) research and development investments 
related to operational energy demand and sup-
ply technologies; and 
‘‘(4) monitor and review all operational energy 
initiatives in the Department of Defense. 
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358 
‘‘(c) PRINCIPAL ADVISOR FOR OPERATIONAL ENERGY 
PLANS AND PROGRAMS.—(1) The Director is the principal 
adviser to the Secretary of Defense and the Deputy Sec-
retary of Defense regarding operational energy plans and 
programs and the principal policy official within the senior 
management of the Department of Defense regarding oper-
ational energy plans and programs. 
‘‘(2) The Director may communicate views on matters 
related to operational energy plans and programs and the 
energy strategy required by subsection (d) directly to the 
Secretary of Defense and the Deputy Secretary of Defense 
without obtaining the approval or concurrence of any other 
official within the Department of Defense. 
‘‘(d) OPERATIONAL ENERGY STRATEGY.—(1) The Di-
rector shall be responsible for the establishment and mainte-
nance of a department-wide transformational strategy for 
operational energy. The strategy shall establish near-term, 
mid-term, and long-term goals, performance metrics to 
measure progress in meeting the goals, and a plan for im-
plementation of the strategy within the military depart-
ments, the Office of the Secretary of Defense, and Defense 
Agencies. 
‘‘(2) Not later than 90 days after the date on which 
the Director is first appointed, the Secretary of each of the 
military departments shall designate a senior official with-
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359 
in each armed force under the jurisdiction of the Secretary 
who will be responsible for operational energy plans and 
programs for that armed force. The officials shall be respon-
sible for coordinating with the Director and implementing 
initiatives pursuant to the strategy with regard to that offi-
cial’s armed force. 
‘‘(3) By authority of the Secretary of Defense, the Di-
rector shall prescribe policies and procedures for the imple-
mentation of the strategy. The Director shall provide guid-
ance to, and consult with, the Secretary of Defense, the Dep-
uty Secretary of Defense, the Secretaries of the military de-
partments, and the officials designated under paragraph (2) 
with respect to specific operational energy plans and pro-
grams to be carried out pursuant to the strategy. 
‘‘(4) The initial strategy shall be submitted to the con-
gressional defense committees not later than 180 days after 
the date on which the Director is first appointed. Subse-
quent updates to the strategy shall be submitted to the con-
gressional defense committees as soon as practicable after 
the modifications to the strategy are made. 
‘‘(e) BUDGETARY AND FINANCIAL MATTERS.—(1) The 
Director shall review and make recommendations to the 
Secretary of Defense regarding all budgetary and financial 
matters relating to the operational energy strategy. 
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‘‘(2) The Secretary of Defense shall require that the 
Secretary of each military department and the head of each 
Defense Agency with responsibility for executing activities 
associated with the strategy transmit their proposed budget 
for those activities for a fiscal year to the Director for re-
view before submission of the proposed budget to the Under 
Secretary of Defense (Comptroller). 
‘‘(3) The Director shall review a proposed budget 
transmitted under paragraph (2) for a fiscal year and, not 
later than January 31 of the preceding fiscal year, shall 
submit to the Secretary of Defense a report containing the 
comments of the Director with respect to the proposed budg-
et, together with the certification of the Director regarding 
whether the proposed budget is adequate for implementation 
of the strategy. 
‘‘(4) Not later than 10 days after the date on which 
the budget for a fiscal year is submitted to Congress pursu-
ant to section 1105 of title 31, the Secretary of Defense shall 
submit to Congress a report on the proposed budgets for that 
fiscal year that the Director has not certified under para-
graph (3). The report shall include the following: 
‘‘(A) A discussion of the actions that the Sec-
retary proposes to take, together with any rec-
ommended legislation that the Secretary considers ap-
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361 
propriate, to address the inadequacy of the proposed 
budgets. 
‘‘(B) Any additional comments that the Sec-
retary considers appropriate regarding the inad-
equacy of the proposed budgets. 
‘‘(5) The report required by paragraph (4) shall also 
include a separate statement of estimated expenditures and 
requested appropriations for that fiscal year for the activi-
ties of the Director in carrying out the duties of the Direc-
tor. 
‘‘(f) 
ACCESS
TO
INITIATIVE
RESULTS
AND 
RECORDS.—(1) The Secretary of a military department 
shall submit to the Director the results of all studies and 
initiatives conducted by the military department in connec-
tion with the operational energy strategy. 
‘‘(2) The Director shall have access to all records and 
data in the Department of Defense (including the records 
and data of each military department) necessary in order 
to permit the Director to carry out the duties of the Direc-
tor. 
‘‘(g) STAFF.—The Director shall have a dedicated pro-
fessional staff of military and civilian personnel in a num-
ber sufficient to enable the Director to carry out the duties 
and responsibilities of the Director. 
‘‘(h) DEFINITIONS.—In this section: 
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362 
‘‘(1) OPERATIONAL
ENERGY.—The term ‘oper-
ational energy’ means the energy required for moving 
and sustaining military forces and weapons plat-
forms for military operations. The term includes en-
ergy used by tactical power systems and generators 
and weapons platforms. 
‘‘(2) OPERATIONAL
ENERGY
STRATEGY.—The 
terms ‘operational energy strategy’ and ‘strategy’ 
mean the operational energy strategy developed under 
subsection (d).’’. 
(b) CLERICAL AMENDMENT.—The table of sections at 
the beginning of such chapter is amended by inserting after 
the item relating to section 139a the following new item: 
‘‘139b. Director of Operational Energy Plans and Programs.’’. 
SEC. 905. CORROSION CONTROL AND PREVENTION EXECU-
TIVES FOR THE MILITARY DEPARTMENTS. 
(a) REQUIREMENT TO DESIGNATE CORROSION CON-
TROL AND PREVENTION EXECUTIVE.—Not later than 90 
days after the date of the enactment of this Act, the Assist-
ant Secretary of each military department with responsi-
bility for acquisition, technology, and logistics shall des-
ignate an employee of the military department as the corro-
sion control and prevention executive. Such executive shall 
be the senior official in the department with responsibility 
for coordinating department-level corrosion control and 
prevention program activities (including budget program-
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ming) with the military department and the Office of the 
Secretary of Defense, the program executive officers of the 
military departments, and relevant major subordinate com-
mands of the military departments. 
(b) DUTIES.—(1) The corrosion control and prevention 
executive of a military department shall ensure that corro-
sion control and prevention is maintained in the depart-
ment’s policy and guidance for management of each of the 
following: 
(A) System acquisition and production, includ-
ing design and maintenance. 
(B) Research, development, test, and evaluation 
programs and activities. 
(C) Equipment standardization programs, in-
cluding international standardization agreements. 
(D) Logistics research and development initia-
tives. 
(E) Logistics support analysis as it relates to in-
tegrated logistic support in the materiel acquisition 
process. 
(F) Military infrastructure design, construction, 
and maintenance. 
(2) The corrosion control and prevention executive of 
a military department shall be responsible for identifying 
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364 
the funding levels necessary to accomplish the items listed 
in subparagraphs (A) through (F) of paragraph (1). 
(3) The corrosion control and prevention executive of 
a military department shall, in cooperation with the appro-
priate staff of the department, develop, support, and provide 
the rationale for resources— 
(A) to initiate and sustain an effective corrosion 
control and prevention program in the department; 
(B) to evaluate the program’s effectiveness; and 
(C) to ensure that corrosion control and preven-
tion requirements for materiel are reflected in budg-
eting and policies of the department for the formula-
tion, management, and evaluation of personnel and 
programs for the entire department, including its re-
serve components. 
(4) The corrosion control and prevention executive of 
a military department shall be the principal point of con-
tact of the department to the Director of Corrosion Policy 
and Oversight (as assigned under section 2228 of title 10, 
United States Code). 
(5) The corrosion control and prevention executive of 
a military department shall submit an annual report to 
the Secretary of Defense containing recommendations per-
taining to the corrosion control and prevention program of 
the military department, including corrosion-related fund-
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ing levels to carry out all of the duties of the executive under 
this section. 
SEC. 906. ALIGNMENT OF DEPUTY CHIEF MANAGEMENT OF-
FICER RESPONSIBILITIES. 
Section 192(e) of title 10, United States Code, is 
amended to read as follows: 
‘‘(e) SPECIAL RULE FOR DEFENSE BUSINESS TRANS-
FORMATION AGENCY.—Notwithstanding the results of any 
periodic review under subsection (c) with regard to the De-
fense Business Transformation Agency, the Secretary of De-
fense shall designate that the Director of the Agency shall 
report directly to the Deputy Chief Management Officer of 
the Department of Defense.’’. 
SEC. 907. REQUIREMENT FOR THE SECRETARY OF DEFENSE 
TO PREPARE A STRATEGIC PLAN TO EN-
HANCE THE ROLE OF THE NATIONAL GUARD 
AND RESERVES. 
(a) PLAN.—Not later than April 1, 2009, the Secretary 
of Defense, in consultation with the Chairman of the Joint 
Chiefs of Staff and the Chief of the National Guard Bureau, 
shall prepare a plan for enhancing the roles of the National 
Guard and Reserve— 
(1) when federalized in the case of the National 
Guard, or activated in the case of the Reserves, in 
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366 
support of operations conducted under title 10, 
United States Code; and 
(2) in support of operations conducted under 
title 32, United States Code, or in support of State 
missions. 
(b) MATTERS TO BE ASSESSED.—In preparing the 
plan, the Secretary shall assess— 
(1) the findings, conclusions, and recommenda-
tions of the Final Report to Congress and the Sec-
retary of Defense of the Commission on the National 
Guard and Reserves, dated January 31, 2008, and ti-
tled ‘‘Transforming the National Guard and Reserves 
into a 21st-Century Operational Force’’; and 
(2) the provisions of H.R. 5603 of the 110th Con-
gress, as introduced on March 13, 2008 (the National 
Guard Empowerment and State-National Defense In-
tegration Act of 2008). 
(c) REPORT.—Not later than April 1, 2009, the Sec-
retary of Defense shall submit to the Committees on Armed 
Services of the Senate and the House of Representatives a 
report on the plan required under this section. The report 
shall include recommendations on— 
(1) any changes to the current Department of 
Defense organization, structure, command relation-
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367 
ships, budget authority, procurement authority, and 
compensation and benefits; 
(2) any legislation that the Secretary considers 
necessary; and 
(3) any other matter the Secretary considers ap-
propriate. 
SEC. 908. REDESIGNATION OF THE DEPARTMENT OF THE 
NAVY AS THE DEPARTMENT OF THE NAVY 
AND MARINE CORPS. 
(a) REDESIGNATION OF THE DEPARTMENT OF THE 
NAVY AS THE DEPARTMENT OF THE NAVY AND MARINE 
CORPS.— 
(1) REDESIGNATION
OF
MILITARY
DEPART-
MENT.—The military department designated as the 
Department of the Navy is redesignated as the De-
partment of the Navy and Marine Corps. 
(2) REDESIGNATION OF SECRETARY AND OTHER 
STATUTORY OFFICES.— 
(A) SECRETARY.—The position of the Sec-
retary of the Navy is redesignated as the Sec-
retary of the Navy and Marine Corps. 
(B) OTHER STATUTORY OFFICES.—The po-
sitions of the Under Secretary of the Navy, the 
four Assistant Secretaries of the Navy, and the 
General Counsel of the Department of the Navy 
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are redesignated as the Under Secretary of the 
Navy and Marine Corps, the Assistant Secre-
taries of the Navy and Marine Corps, and the 
General Counsel of the Department of the Navy 
and Marine Corps, respectively. 
(b) CONFORMING AMENDMENTS TO TITLE 10, UNITED 
STATES CODE.— 
(1) DEFINITION OF ‘‘MILITARY DEPARTMENT’’.— 
Paragraph (8) of section 101(a) of title 10, United 
States Code, is amended to read as follows: 
‘‘(8) The term ‘military department’ means the 
Department of the Army, the Department of the Navy 
and Marine Corps, and the Department of the Air 
Force.’’. 
(2) ORGANIZATION OF DEPARTMENT.—The text 
of section 5011 of such title is amended to read as fol-
lows: ‘‘The Department of the Navy and Marine 
Corps is separately organized under the Secretary of 
the Navy and Marine Corps.’’. 
(3) 
POSITION
OF
SECRETARY.—Section 
5013(a)(1) of such title is amended by striking ‘‘There 
is a Secretary of the Navy’’ and inserting ‘‘There is 
a Secretary of the Navy and Marine Corps’’. 
(4) CHAPTER HEADINGS.— 
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(A) The heading of chapter 503 of such title 
is amended to read as follows: 
‘‘CHAPTER 503—DEPARTMENT OF THE 
NAVY AND MARINE CORPS’’. 
(B) The heading of chapter 507 of such title 
is amended to read as follows: 
‘‘CHAPTER 507—COMPOSITION OF THE DE-
PARTMENT OF THE NAVY AND MARINE 
CORPS’’. 
(5) OTHER AMENDMENTS.— 
(A) Title 10, United States Code, is amend-
ed by striking ‘‘Department of the Navy’’ and 
‘‘Secretary of the Navy’’ each place they appear 
other than as specified in paragraphs (1), (2), 
(3), and (4) (including in section headings, sub-
section captions, tables of chapters, and tables of 
sections) and inserting ‘‘Department of the Navy 
and Marine Corps’’ and ‘‘Secretary of the Navy 
and Marine Corps’’, respectively, in each case 
with the matter inserted to be in the same type-
face and typestyle as the matter stricken. 
(B)(i) Sections 5013(f), 5014(b)(2), 5016(a), 
5017(2), 5032(a), and 5042(a) of such title are 
amended by striking ‘‘Assistant Secretaries of the 
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Navy’’ and inserting ‘‘Assistant Secretaries of 
the Navy and Marine Corps’’. 
(ii) The heading of section 5016 of such 
title, and the item relating to such section in the 
table of sections at the beginning of chapter 503 
of such title, are each amended by inserting ‘‘and 
Marine Corps’’ after ‘‘of the Navy’’, with the 
matter inserted in each case to be in the same 
typeface and typestyle as the matter amended. 
(c) OTHER PROVISIONS OF LAW AND OTHER REF-
ERENCES.— 
(1) TITLE 37, UNITED STATES CODE.—Title 37, 
United States Code, is amended by striking ‘‘Depart-
ment of the Navy’’ and ‘‘Secretary of the Navy’’ each 
place they appear and inserting ‘‘Department of the 
Navy and Marine Corps’’ and ‘‘Secretary of the Navy 
and Marine Corps’’, respectively. 
(2) OTHER REFERENCES.—Any reference in any 
law other than in title 10 or title 37, United States 
Code, or in any regulation, document, record, or other 
paper of the United States, to the Department of the 
Navy shall be considered to be a reference to the De-
partment of the Navy and Marine Corps. Any such 
reference to an office specified in subsection (b)(2) 
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shall be considered to be a reference to that officer as 
redesignated by that section. 
(d) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on the first day 
of the first month beginning more than 60 days after the 
date of the enactment of this Act. 
SEC. 909. SUPPORT TO COMMITTEE REVIEW. 
(a) FINDINGS.—Congress finds the following: 
(1) In accordance with section 118 of title 10, 
United States Code, the Department of Defense con-
ducts a Quadrennial Defense Review as a comprehen-
sive examination of ‘‘the national defense strategy, 
force structure, force modernization plans, infrastruc-
ture, budget plan, and other elements of the defense 
program and policies of the United States with a 
view toward determining and expressing the defense 
strategy of the United States and establishing a de-
fense program for the next 20 years’’. 
(2) In submitting reports on these reviews to the 
Committees on Armed Services of the Senate and the 
House of Representatives, the Secretary is mandated 
to include the threats to the assumed or defined na-
tional security interests of the United States, the 
threat-based scenarios developed to conduct the review, 
and other assumptions that impact the ability to 
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counter such threats, including force readiness, co-
operation of allies, warning times, and levels of en-
gagement in operations other than war and smaller- 
scale contingencies. 
(3) There is no statutory requirement to assume 
certain funding levels available to the Department of 
Defense in the conduct of this review because Congress 
reserves its prerogative to provide the resources nec-
essary to address threats to United States national se-
curity interests and uses this review as a data point 
in determining the proper level of those resources. 
(4) The reports associated with the 1997, 2001, 
and 2006 reviews clearly demonstrated that the Sec-
retary made certain assumptions about anticipated 
funding. 
(5) As a result, the reported recommendations 
were unnecessarily constrained by those funding as-
sumptions. 
(6) As the Department of Defense is preparing to 
conduct another Quadrennial Defense Review with a 
report due to the Congress by 2010, the Committee on 
Armed Services of the House of Representatives should 
review in a bipartisan, thorough manner the military 
capabilities required to address challenges to United 
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States national security interests over the next 20 
years. 
(b) SUPPORT REQUIRED.—Within 15 days after re-
ceiving a request, the Secretary of Defense shall provide the 
Committee on Armed Services of the House of Representa-
tives with any information or data requested by that Com-
mittee so that it can review in a comprehensive, threat- 
based, and bipartisan manner the national defense strategy, 
force structure, force modernization plans, infrastructure, 
budget plan, and other elements of the defense program and 
policies of the United States with a view toward deter-
mining and expressing the defense strategy of the United 
States and establishing a defense program for the next 20 
years, as well as preparing for the upcoming Quadrennial 
Roles and Missions Review and Quadrennial Defense Re-
view. 
Subtitle B—Space Activities 
SEC. 911. EXTENSION OF AUTHORITY FOR PILOT PROGRAM 
FOR PROVISION OF SPACE SURVEILLANCE 
NETWORK SERVICES TO NON-UNITED STATES 
GOVERNMENT ENTITIES. 
Section 2274(i) of title 10, United States Code, is 
amended by striking ‘‘September 30, 2009’’ and inserting 
‘‘September 30, 2010’’. 
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SEC. 912. INVESTMENT AND ACQUISITION STRATEGY FOR 
COMMERCIAL SATELLITE CAPABILITIES. 
(a) REQUIREMENT.—The Secretary of Defense shall 
conduct an assessment to determine a recommended invest-
ment and acquisition strategy for commercial satellite ca-
pabilities. 
(b) ELEMENTS.—The assessment required under sub-
section (a) shall include the following: 
(1) Review of national and defense policy rel-
evant to the requirements for, acquisition of, and use 
of commercial satellite capabilities, and the relation-
ship with commercial satellite providers. 
(2) Assessment of the manner in which commer-
cial satellite capabilities are utilized by the Depart-
ment of Defense and options for expanding such utili-
zation or identifying new means to leverage commer-
cial satellite capabilities, such as hosting payloads. 
(3) Review of military requirements for satellite 
communications and remote sensing by quantity, 
quality, timeline, and any other metric considered 
appropriate. 
(4) Description of current and planned commer-
cial satellite capabilities and an assessment of their 
ability to meet the requirements identified in para-
graph (3). 
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(5) Assessment of the ability of commercial sat-
ellite capabilities to meet other military requirements 
not identified in paragraph (3). 
(6) Description of the utilization of and re-
sources allocated to commercial satellite communica-
tions and remote sensing in the past (past five years), 
present (current date through Future Years Defense 
Plan (FYDP)), and future (beyond the FYDP) to 
meet the requirements identified in paragraph (3). 
(7) Assessment of purchasing patterns that may 
lead to recommendations in which the Department 
may consolidate requirements, centralize operations, 
aggregate purchases, or leverage purchasing power 
(including the use of multiyear contracting). 
(8) Assessment of various models for acquiring 
commercial satellite capabilities, including funding, 
management, and operations models. 
(c) REPORT.— 
(1) IN GENERAL.—Not later than February 1, 
2009, the Secretary of Defense shall submit to the con-
gressional defense committees a report setting forth 
the results of the assessment required under subsection 
(a) and provide recommendations, to include— 
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(A) the recommended investment and acqui-
sition strategy or strategies of the Department 
for commercial satellite capabilities; 
(B) how the investment and acquisition 
strategy or strategies should be addressed in fis-
cal years after fiscal year 2009; and 
(C) a proposal for such legislative action as 
the Secretary considers necessary to acquire ap-
propriate types and amounts of commercial sat-
ellite capabilities. 
(2) FORM.—The report shall be in unclassified 
form, but may include a classified annex. 
(d) DEFINITIONS.—In this section: 
(1) The term ‘‘commercial satellite capabilities’’ 
means the system, capability, or service provided by 
a commercial satellite provider. 
(2) The term ‘‘commercial satellite provider’’ re-
fers to privately owned and operated space systems, 
their technology, components, products, data, services, 
and related information, as well as foreign systems 
whose products and services are sold commercially. 
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Subtitle C—Chemical 
Demilitarization Program 
SEC. 921. CHEMICAL DEMILITARIZATION CITIZENS ADVI-
SORY COMMISSIONS IN COLORADO AND KEN-
TUCKY. 
Section 172 of the National Defense Authorization Act 
for Fiscal Year 1993 (50 U.S.C. 1521 note) is amended by 
adding at the end the following: 
‘‘(i) COLORADO AND KENTUCKY CHEMICAL DEMILI-
TARIZATION CITIZENS ADVISORY COMMISSIONS.—Notwith-
standing subsections (b), (f), and (g), and consistent with 
section 142 of the Strom Thurmond National Defense Au-
thorization Act for Fiscal Year 1999 (50 U.S.C. 1521 note) 
and section 8122 of the Department of Defense Appropria-
tions Act, 2003 (50 U.S.C. 1521 note), responsibilities for 
the Chemical Demilitarization Citizens Advisory Commis-
sions in Colorado and Kentucky shall be transferred from 
the Secretary of the Army to the Program Manager for As-
sembled Chemical Weapons Alternatives. The Program 
Manager for Assembled Chemical Weapons Alternatives 
shall ensure the ability to receive citizen and State concerns 
regarding the ongoing chemical destruction program in 
these States. A representative from the Office of the Assist-
ant to the Secretary of Defense for Nuclear, Chemical, and 
Biological Defense Programs shall meet with these commis-
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sions not less often than twice a year. Funds appropriated 
for the Assembled Chemical Weapons Alternatives Program 
shall be used for travel and associated travel costs for these 
Citizens Advisory Commissioners, when such travel is con-
ducted at the invitation of the Department of Defense Spe-
cial Assistant for Chemical and Biological Defense and 
Chemical Demilitarization Programs.’’. 
SEC. 922. PROHIBITION ON TRANSPORT OF HYDROLYSATE 
AT PUEBLO CHEMICAL DEPOT, COLORADO. 
(a) PROHIBITION.—During fiscal year 2009, the Sec-
retary of Defense may not transport hydrolysate from the 
Pueblo Chemical Depot, Colorado, to an off-site location for 
treatment, storage, or disposal. 
(b) SAVINGS CLAUSE.—Nothing in this section limits 
or otherwise affects section 8119 of the Department of De-
fense Appropriations Act, 2008 (Public Law 110–116; 50 
U.S.C. 1521 note). 
(c) REPORT.—Not later than February 15, 2009, the 
Secretary shall submit to the congressional defense commit-
tees a report on hydrolysate stockpiled at the Pueblo Chem-
ical Depot, Colorado. The report shall include a comprehen-
sive cost-benefit analysis between on-site and off-site meth-
ods for disposing of such hydrolysate. 
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