‘‘(3) procedures for departmental review of de-
viation reports and submission and approval of a re-
vised baseline.’’.
SEC. 305. MAJOR PROGRAMS: COMPETITIVE PROTOTYPING.
(a) REPEAL.—Section 2438 of title 10, United States
Code, is repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 144 of such title is amended
by striking out the item relating to section 2438.
SEC. 306. MAJOR PROGRAMS: COMPETITIVE ALTERNATIVE
SOURCES.
(a) REPEAL.—Section 2439 of title 10, United States
Code, is repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 144 of such title is amended
by striking out the item relating to section 2439.
Subtitle B—Testing Statutes
SEC. 
311. 
REPEAL 
OF 
TESTING 
REQUIREMENT 
FOR
WHEELED OR TRACKED VEHICLES.
(a) REPEAL.—Section 2362 of title 10, United States
Code, is repealed.
(b) TECHNICAL AMENDMENT.—The table of sections
at the beginning of chapter 139 of such title is amended
by striking out the item relating to section 2362.
SEC. 312. MAJOR SYSTEMS AND MUNITIONS PROGRAMS:
SURVIVABILITY AND LETHALITY TESTING.
(a) SUBSTITUTION OF VULNERABILITY TESTING FOR
SURVIVABILITY TESTING.—Section 2366 of title 10, Unit-
ed States Code, is amended—
(1) by striking out ‘‘survivability’’ each place it
appears in subsections (a)(1)(A), (a)(2)(A), (c)(1),
(d), (e)(3), and (e)(6)(A) and inserting in lieu there-
of ‘‘vulnerability’’; and
(2) in subsection (b)(1), by striking out ‘‘Sur-
vivability’’ and inserting in lieu thereof ‘‘Vulner-
ability’’.
(b) LESS THAN FULL-UP TESTING AUTHORIZED.—
Section 2366(e)(3) of such title is amended by inserting
after ‘‘configured for combat,’’ the following: ‘‘or, if the
covered system is a high value system, by firing such mu-
nitions at components, subsystems, and subassemblies (or
realistic replicas or surrogates) together with performing
design analyses, modeling and simulation, and analysis of
combat data,’’.
(c) WAIVER AUTHORITY AFTER FULL-SCALE DE-
VELOPMENT BEGINS.—Section 2366(c)(1) of such title is
amended in the first sentence by striking out ‘‘, before
the system enters full-scale development,’’.
(d) REFERENCE
TO
CONGRESSIONAL
COMMIT-
TEES.—Section 2366(d) of such title is amended in the
first sentence by striking out ‘‘defense committees of Con-
gress (as defined in section 2362(e)(3) of this title)’’ and
inserting in lieu thereof ‘‘Committees on Armed Services
and on Appropriations of the Senate and House of Rep-
resentatives’’.
SEC. 313. OPERATIONAL TEST AND EVALUATION OF DE-
FENSE ACQUISITION PROGRAMS.
Section 2399(b) of title 10, United States Code, is
amended—
(1) by redesignating paragraph (5) as para-
graph (6); and
(2) by inserting after paragraph (4) the follow-
ing new paragraph (5):
‘‘(5)(A) The Secretary of Defense may, for a particu-
lar major defense acquisition program, prescribe and apply
different operational test and evaluation procedures than
those provided under subsection (a) and paragraphs (1)
through (3) of this subsection if the Secretary first trans-
mits to Congress—
‘‘(i) a certification that such testing would be
unreasonably expensive and impracticable, cause un-
warranted delay, or be unnecessary because of the
acquisition strategy for that system; and
‘‘(ii) a description of the actions taken to en-
sure that the system will be operationally effective
and suitable when the system is introduced into the
field.
‘‘(B) Alternative operational test and evaluation pro-
cedures prescribed pursuant to subparagraph (A) may not
be used to proceed with a major defense acquisition pro-
gram beyond low-rate initial production.’’.
SEC. 314. LOW-RATE INITIAL PRODUCTION OF NEW SYS-
TEMS.
(a) EXCEPTION FOR STRATEGIC DEFENSE MISSILE
SYSTEMS.—Subsection (c) of section 2400 of title 10,
United States Code, is amended—
(1) in paragraph (1), by striking out ‘‘and mili-
tary satellite programs’’ and inserting in lieu thereof
‘‘, military satellite programs, and strategic defense
missile programs’’;
(2) in paragraph (2), by striking out ‘‘and mili-
tary satellite program’’ and inserting in lieu thereof
‘‘, military satellite program, and strategic defense
missile program’’; and
(3) by striking out the caption of such sub-
section and inserting in lieu thereof ‘‘LOW-RATE
INITIAL
PRODUCTION
OF
NAVAL
VESSEL, SAT-
ELLITE, AND STRATEGIC DEFENSE MISSILE PRO-
GRAMS.—’’.
(b) SUBMISSION OF TEST AND EVALUATION MASTER
PLAN.—Paragraph (2) of such section is amended by
striking out subparagraph (B) and inserting in lieu there-
of the following:
‘‘(B) any test and evaluation master plan pre-
pared for that program;’’.
Subtitle C—DOD Commercial and
Industrial Activities
SEC. 321. FACTORIES AND ARSENALS: MANUFACTURE AT.
(a) CONSOLIDATED SECTION.—Chapter 148 of title
10, United States Code, is amended by adding at the end
the following:
‘‘§ 2538. Factories and arsenals: manufacture at
‘‘(a) The Secretary of Defense or secretary of a mili-
tary department may have supplies needed for the Depart-
ment of Defense and its components made in factories or
arsenals owned by the United States.
‘‘(b) The Secretary of Defense or secretary of a mili-
tary department may abolish any United States arsenal
that the Secretary considers unnecessary.’’.
(b) CONFORMING REPEALS AND TECHNICAL AMEND-
MENTS.—(1) Sections 4532 and 9532 of title 10, United
States Code, are hereby repealed.
(2) The table of sections at the beginning of chapter
433 of such title is amended by striking out the item relat-
ing to section 4532. The table of sections at the beginning
of chapter 933 of such title is amended by striking out
the item relating to section 9532.
(3) The table of sections at the beginning of chapter
148 is amended by adding at the end the following new
item:
‘‘2538. Factories and arsenals: manufacture at.’’.
Subtitle D—Industrial Base and
Manufacturing Technology Laws
SEC. 331. POLICY OBJECTIVES RELATING TO DEFENSE
INTERNATIONAL TRADE.
Section 2501 of title 10, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(d) POLICY OBJECTIVES RELATING TO DEFENSE
INTERNATIONAL TRADE.—It is the policy of Congress
that the United States attain the national defense tech-
nology and industrial base objectives set forth in this sec-
tion by fully coordinating domestic defense acquisition
practices with defense trade and cooperation, under chap-
ter 173 of this title, and foreign military sales and assist-
ance.’’.
Subtitle E—Miscellaneous
SEC. 341. OBLIGATION OF FUNDS: LIMITATION.
Section 2202 of title 10, United States Code, is
amended by striking out subsection (a) and inserting in
lieu thereof the following:
‘‘(a) The Secretary of Defense shall issue regulations
to be followed by all agencies of the Department of De-
fense for the procurement, production, warehousing, or
distribution of supplies and related functions.’’.
SEC. 342. REPEAL OF LIMITATION ON LENGTH OF CON-
TRACTS.
Section 9081 of the Department of Defense Appro-
priations Act, 1990 (Public Law 101–165) is repealed.
TITLE 
IV—SMALL 
PURCHASE
PROCEDURES 
AND 
SMALL
BUSINESS PROVISIONS
SEC. 401. USE OF SMALL PURCHASE PROCEDURES FOR
PROCUREMENTS 
CONDUCTED 
THROUGH
FEDERAL 
ACQUISITION 
COMPUTER 
NET-
WORK SYSTEM; IMPLEMENTATION OF SYS-
TEM.
(a) INCREASE IN SMALL PURCHASE THRESHOLD.—
(1) IN GENERAL.—Section 4 of the Office of
Federal Procurement Policy Act (41 U.S.C. 403) is
amended—
(A) in paragraph (10) by striking ‘‘and’’
after the semicolon; and
(B) by striking paragraph (11) and insert-
ing the following:
‘‘(11) The term ‘small purchase threshold’
means—
‘‘(A) $25,000, except as provided in sub-
paragraphs (B) and (C);
‘‘(B) $50,000, in the case of a procure-
ment—
‘‘(i) that is conducted by a procuring
activity 
that 
has 
implemented 
the
FACNET system in accordance with the
requirements of section 29(f)(1)(A) and
(B)(i); and
‘‘(ii) in which notices of solicitation
for all contracting opportunities are issued
through the FACNET system; or
‘‘(C) $100,000, in the case of a procure-
ment—
‘‘(i) that is conducted by a procuring
activity 
that 
has 
implemented 
the
FACNET system in accordance with the
requirements of section 29(f)(1)(A) and
(B)(i), (ii), (iii), and (iv); and
‘‘(ii) in which—
‘‘(I) notices of solicitation for all
contracting opportunities are issued
through the FACNET system,
‘‘(II) responses to solicitations
and requests for information may be
submitted to the procuring activity
through such system,
‘‘(III) information pursuant to
those requests is available through
such system,
‘‘(IV) orders are made through
such system, and
‘‘(V) public notice of awards is
provided through such system; and
‘‘(12) the term ‘FACNET system’ means such
system developed by the Administrator under section
29.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall take effect on, and apply to
solicitations made and orders placed on or after, the
expiration of the 60-day period beginning on the
date of issuance in final form of revisions to the
Federal Acquisition Regulation under subsection (b).
(3) INTERIM
RULE.—Notwithstanding para-
graphs (1) and (2), during the 5-year period begin-
ning on the date of the issuance in final form of re-
visions to the Federal Acquisition Regulation under
subsection (b), procuring activities shall continue to
report, pursuant to section 19(d) of the Office of
Federal Procurement Policy Act (41 U.S.C. 417(d)),
procurement awards with a dollar value of at least
$10,000, but less than $100,000, in conformity with
the procedures for the reporting of a contract award
in excess of $25,000 in effect on May 24, 1993.
(b) IMPROVED SMALL PURCHASE PROCEDURES.—
(1) REVISION OF FAR.—The Federal Acquisi-
tion Regulation shall be revised to ensure that—
(A) procuring activities of executive agen-
cies comply with the requirements of section
8(a) of the Small Business Act (15 U.S.C.
637(a)) and section 2323 of title 10, United
States Code, in awarding any contract with a
price exceeding $25,000;
(B) the authority under part 13.106(a)(1)
of the Federal Acquisition Regulation (48
C.F.R. 13.106(a)(1)), as in effect on May 19,
1993, to make purchases without securing com-
petitive quotations does not apply to any pur-
chases with a price exceeding $2,500; and
(C) procuring activities of executive agen-
cies comply with the requirements of section
15(j) of the Small Business Act (15 U.S.C.
644), relating to the small business reserve, in
awarding any contract with a price below the
small purchase threshold.
(2) NOTICE REQUIRED REGARDING ORAL SO-
LICITATIONS.—Section 18(a)(1)(B) of the Office of
Federal 
Procurement 
Policy 
Act 
(41 
U.S.C.
416(a)(1)(B)) is amended in the matter preceding
clause (i)—
(A) by inserting ‘‘(including orally or by
any other means)’’ after ‘‘intending to solicit’’;
and
(B) by inserting after ‘‘ten days’’ the fol-
lowing: ‘‘before contract award (except for any
procurement in which public notice of contract
opportunities for the acquisition of property or
services by a procuring activity of an executive
agency is performed through the FACNET sys-
tem),’’.
(3) PARTICIPATION
BY
ALL
RESPONSIBLE
SMALL BUSINESS CONCERNS.—Section 18 of the Of-
fice of Federal Procurement Policy Act (41 U.S.C.
416) is amended by adding at the end the following:
‘‘(e) An executive agency intending to solicit offers
for a contract for which a notice of solicitation is required
to be posted under subsection (a)(1)(B) shall ensure that
all small business concerns are permitted to respond to
solicitations for the contract within the time specified in
the solicitations.’’.
(c) PERFORMANCE TEST AND REPORT.—
(1) PERFORMANCE
TEST.—The Comptroller
General of the United States shall monitor and col-
lect data on the results of the amendments made by
subsection (a)(1), to ascertain the effects of the
amendments on the participation of small business
concerns (including small business concerns owned
and controlled by socially and economically disadvan-
taged individuals) in procurement awards of less
than $100,000 and the benefits and detriments, if
any, to the buying activities of the various Executive
agencies.
(2) DATA TO BE COLLECTED.—Data collected
under paragraph (1) shall include data regarding
whether the amendments made by subsection (a)(1)
have improved the acquisition process in terms of re-
duced paperwork, financial or other savings to the
Government, and any increase in the number of con-
tractors participating in the contracting process.
(3) PERIOD.—Data shall be collected for pur-
poses of paragraph (1) during the period beginning
with the first full fiscal year quarter after the effec-
tive date of the amendments made by subsection
(a)(1) and ending September 30, 1996.
(4) REPORT.—By March 1, 1997, the Comp-
troller General of the United States shall report to
the Committee on Government Operations of the
House of Representatives, the Committee on Govern-
mental Affairs of the Senate, and the Committees on
Small Business of the House of Representatives and
the Senate on the effects of the increase in the small
purchase threshold made by the amendments made
by subsection (a)(1).
(d) FUNCTIONS OF ADMINISTRATOR FOR FEDERAL
PROCUREMENT POLICY.—Section 6(d) of the Office of
Federal Procurement Policy Act (41 U.S.C. 405(d)) is
amended—
(1) in paragraph (7) by striking ‘‘and’’ after
the semicolon at the end; and
(2) by redesignating paragraph (8) as para-
graph (10) and inserting after paragraph (7) the fol-
lowing:
‘‘(8) developing policies, in consultation with
the Administrator of the Small Business Administra-
tion, that ensure that small businesses and small
businesses owned and controlled by socially and eco-
nomically disadvantaged persons are provided with
the maximum practicable opportunities to partici-
pate in procurements that are conducted below the
small purchase threshold; and
‘‘(9) developing policies that will promote
achievement of goals for participation by small busi-
nesses and small businesses owned and controlled by
socially and economically disadvantaged individ-
uals.’’.
(e) IMPLEMENTATION OF ELECTRONIC DATA INTER-
CHANGE FOR PROCUREMENT INFORMATION.—The Office
of Federal Procurement Policy Act (41 U.S.C. 401 et seq.)
is further amended by adding after section 28 the follow-
ing:
‘‘SEC. 29. ELECTRONIC INTERCHANGE OF PROCUREMENT
INFORMATION.
‘‘(a) IN GENERAL.—The Administrator, in consulta-
tion with the Office of Information and Regulatory Af-
fairs, shall establish a program and assign a program
manager for, and provide overall direction of policy and
leadership in, the development, coordination, installation,
operation, and completion of implementation by executive
agencies, by not later than 5 years after the date of the
enactment of the Defense Acquisition Reform Act of 1993,
of a Federal Acquisition Computer Network system. Such
system shall be known as the ‘FACNET system’. The
FACNET system shall involve enabling technology and
procurement electronic data interchange transaction sets.
The enabling technology shall consist of a computer net-
work, supporting data bases, and interfaces that inter-
connect Government automated systems to the network.
The procurement electronic data interchange transaction
sets shall facilitate the electronic interchange of standard
procurement information between Government and indus-
try automated acquisition systems.
‘‘(b) FUNCTIONS OF ADMINISTRATOR OF GENERAL
SERVICES.—The Administrator of General Services shall
do the following:
‘‘(1) 
Provide 
technical 
support 
for 
the
FACNET system by doing the following:
‘‘(A) Coordinate with the Administrator to
facilitate the efficient and widespread imple-
mentation of the FACNET system by executive
agencies. This shall include interfacing the
FACNET system to other systems, such as the
Government bank card and Electronic Funds
Transfer payment systems.
‘‘(B) Assist the Director of the National
Institute of Standards and Technology in the
development and application of appropriate
Federal Information Processing Standards.
‘‘(C) Prepare a technical plan for coordi-
nating the design, development, implementation,
operation, and maintenance of the FACNET
system. The plan shall include roles and respon-
sibilities, major milestones, cost estimates, and
performance requirements.
‘‘(2) Ensure compliance with section 111 of the
Federal Property and Administrative Services Act of
1949 in the implementation of the FACNET system
by executive agencies, including by limiting the scope
of delegations under subsection (a) of that section.
‘‘(3) Evaluate progress by executive agencies in
implementing the FACNET system, and recommend
changes in that implementation to the program
manager assigned by the Administrator under sub-
section (a).
‘‘(4) Submit to the Congress, on the date that
is one year after the date of the enactment of the
Defense Acquisition Reform Act of 1993 and on that
date in each of the 5 years thereafter, a report on
the overall progress by the executive branch of the
Government and by each executive agency in imple-
menting the FACNET system.
‘‘(c) IMPLEMENTATION OF FACNET SYSTEM BY EX-
ECUTIVE AGENCIES.—
‘‘(1) IN GENERAL.—The head of each executive
agency shall cooperate with the Administrator and
the Administrator of General Services to implement
the FACNET system for the agency.
‘‘(2) DESIGNATION OF AGENCY PROGRAM MAN-
AGER.—
‘‘(A) DESIGNATION.—The head of each ex-
ecutive agency shall designate a program man-
ager to implement the FACNET system for the
agency and otherwise implement this section.
‘‘(B) FUNCTIONS.—A program manager
designated under this paragraph for an execu-
tive agency shall—
‘‘(i) report directly to the senior pro-
curement executive designated for the
agency under section 16(3);
‘‘(ii) be responsible for the timely and
cost-effective 
implementation 
of 
the
FACNET system for the agency in a man-
ner that is responsive to the procurement
needs of the agency, national business
needs, and the public’s interest in open
government;
‘‘(iii) develop plans for phasing-in the
implementation of the FACNET system
for the procuring activities of the executive
agency and phasing-out local network sys-
tems that perform comparable procure-
ment functions;
‘‘(iv) participate in the interagency
development of standard procurement elec-
tronic data interchange transaction sets;
‘‘(v) using the resources of the agen-
cy, develop and implement a standardized
and comprehensive training program for
agency employees in the use and manage-
ment of the FACNET system; and
‘‘(vi) in carrying out this section, com-
ply with guidelines issued by the Adminis-
trator under this section and program di-
rectives issued by the Administrator of
General Services under section 111 of the
Federal Property and Administrative Serv-
ices Act of 1949.
‘‘(d) FUNCTIONS
OF
NATIONAL
INSTITUTE
OF
STANDARDS AND TECHNOLOGY.—The Director of the Na-
tional Institute of Standards and Technology shall—
‘‘(1) ensure that the FACNET system complies
with Federal Information Processing Standards;
‘‘(2) 
issue 
additional 
standards 
for 
the
FACNET system as necessary; and
‘‘(3) establish tests to facilitate the aims of this
section and support policies established by the Ad-
ministrator under this section.
‘‘(e) FUNCTIONS OF SMALL BUSINESS ADMINISTRA-
TION.—The Administrator of the Small Business Adminis-
tration shall—
‘‘(1) develop plans to coordinate and promote
the use of the FACNET system by small businesses,
that incorporate outreach efforts by the Small Busi-
ness Administration, agency Offices of Small and
Disadvantaged Business and Utilization, Small Busi-
ness Development Centers, and other appropriate or-
ganizations; and
‘‘(2) use the resources of the Office of Procure-
ment Assistance and Office of Advocacy to develop
a standardized and comprehensive training program
to train small business concerns in the use of the
FACNET system, through Small Business Adminis-
tration district offices and Small Business Develop-
ment Centers.
‘‘(f) FACNET SYSTEM
COMPATIBILITY
STAND-
ARDS.—
‘‘(1) IN GENERAL.—The Administrator, in con-
sultation with the Office of Information and Regu-
latory Affairs, the Administrator of General Serv-
ices, the Administrator of the Small Business Ad-
ministration, and the Director of the National Insti-
tute of Standards and Technology, shall prescribe
policies for ensuring convenient and universal access
to the FACNET system, and shall develop a set of
system compatibility standards for each FACNET
system interface and FACNET system support data
base. The system compatibility standards shall speci-
fy the functional capabilities of each FACNET sys-
tem interface, and the minimum set of data elements
of each FACNET system support data base. The
system compatibility standards shall ensure that the
following FACNET system functions are satisfac-
torily performed by each executive agency, executive
agency component, or procuring activity:
‘‘(A) Provision of widespread public notice
of solicitations for contract opportunities issued
by the agency, component, or activity and of or-
ders to be made by the agency, component, or
activity below the small purchase threshold.
‘‘(B) Allowing private users to electroni-
cally—
‘‘(i) selectively access and review so-
licitations issued by the agency, compo-
nent, or activity;
‘‘(ii) respond to solicitations issued by
the agency, component, or activity;
‘‘(iii) receive orders from the agency,
component, or activity; and
‘‘(iv) access information on contract
awards made by the agency, component, or
activity.
‘‘(2) BINDING
STANDARDS.—The FACNET
system interface and FACNET system support data
base of each procuring activity shall comply with the
system compatibility standards developed under
paragraph (1), except to the extent the Adminis-
trator has waived application of such standards to
the activity under paragraph (3).
‘‘(3) WAIVERS.—(A) The Administrator may, in
writing, waive the application of any system compat-
ibility standard to a procuring activity if the Admin-
istrator—
‘‘(i) determines that compliance with the
standard by the procuring activity would ad-
versely affect the accomplishment of the mission
of the activity or cause a major adverse finan-
cial impact on the activity which is not offset by
Government-wide savings; and
‘‘(ii) approves a plan, developed by the pro-
curing activity, for complying with the standard
by not later than 1 year after the issuance of
the waiver.
‘‘(B) The authority of the Administrator to
issue waivers under this paragraph may not be dele-
gated.
‘‘(C) A waiver under this paragraph may be is-
sued by the Administrator only after receipt of a re-
quest for the waiver submitted by the program man-
ager designated under subsection (c)(2)(A) for the
procuring activity for which the waiver is requested.
‘‘(D) The Administrator shall promptly submit
a notice of each waiver under this paragraph to the
Committee on Government Operations of the House
of Representatives and the Committee on Govern-
mental Affairs of the Senate, and promptly publish
the notice in the Federal Register.’’.
(f) TECHNICAL CORRECTIONS.—
(1) Section 18(d) of the Office of Federal Pro-
curement Policy Act (41 U.S.C. 416) is amended by
striking ‘‘(e)’’ in the first sentence and inserting
‘‘(a)’’.
(2) Section 18(a)(1) of the Office of Federal
Procurement Policy Act (41 U.S.C. 416(a)(1)) is
amended—
(A) in subparagraph (A) in the matter fol-
lowing clause (ii) by striking ‘‘notice’’ and in-
serting ‘‘notice of solicitation’’; and
(B) in subparagraph (B) in the matter
preceding clause (i) by striking ‘‘a notice of so-
licitation described in subsection (f)’’ and in-
serting ‘‘a notice of solicitation described in
subsection (b)’’.
SEC. 402. SMALL BUSINESS RESERVATION.
Section 15(j) of the Small Business Act (15 U.S.C.
644(j)) is amended to read as follows:
‘‘(j) Each contract for the procurement of goods and
services which has an anticipated value not in excess of
the small purchase threshold and which is subject to small
purchase procedures prescribed by section 2304(g) of title
10, United States Code, or section 303(g) of the Federal
Property and Administrative Services Act of 1949 (41
U.S.C. 253(g)) shall be reserved exclusively for small busi-
ness concerns unless the contracting officer is unable to
obtain offers from two or more small business concerns
that are competitive with market prices and in terms of
quality and delivery of the goods or services being pur-
chased. Nothing in this subsection shall be construed as
precluding the award of contracts with a value not in ex-
cess of the small purchase threshold under the authority
of section 8(a) of this Act, section 2323 of title 10, United
States Code, or section 712 of the Business Opportunity
Development Reform Act of 1988 (Public Law 100–656;
15 U.S.C. 644 note). In utilizing small purchase proce-
dures, contracting officers shall, wherever circumstances
permit, choose a method of payment which minimizes pa-
perwork and facilitates prompt payment to contractors.’’.
SEC. 403. EXEMPTIONS FOR CONTRACTS NOT IN EXCESS OF
THE SMALL PURCHASE THRESHOLD.
The Office of Federal Procurement Policy Act (41
U.S.C. 401 et seq.), as amended by section 401(e), is fur-
ther amended by adding at the end the following new sec-
tion:
‘‘SEC. 30. SMALL PURCHASE THRESHOLD.
‘‘(a) EXEMPTION FROM CERTAIN LAWS.—Purchases
made and contracts awarded with a value that is not in
excess of the small purchase threshold shall be exempt
from the following laws:
‘‘(1) Section 2313 of title 10, United States
Code.
‘‘(2) Section 2393(d) of title 10, United States
Code.
‘‘(3) Section 2631 of title 10, United States
Code.
‘‘(b) EXEMPTION FROM CONTRACT CLAUSE RE-
QUIREMENT.—Unless otherwise determined by the Admin-
istrator, for contracts awarded with a value that is not
in excess of the small purchase threshold and which are
subject to small purchase procedures prescribed by section
2304(g) of title 10, United States Code or section 303(g)
of the Federal Property and Administrative Services Act
(41 U.S.C. 253(g)), no contract clause shall be required
to implement the following laws:
‘‘(1) Section 2207 of title 10, United States
Code.
‘‘(2) Section 2306(b) of title 10, United States
Code.
‘‘(3) Section 3741 of the Revised Statutes (41
U.S.C. 22).
‘‘(c) SPECIAL RULE RELATING TO EXEMPTIONS.—
A provision of law hereafter enacted shall not be construed
as applicable to purchases of property or services not in
excess of the small purchase threshold unless that provi-
sion of law specifically refers to this section and specifi-
cally states that such provision of law modifies or super-
sedes the provisions of this section.’’.
SEC. 404. SMALL BUSINESS AMENDMENTS.
Subparagraph (A) of section 8(a)(1) of the Small
Business Act (15 U.S.C. 637(a)(1)) is amended in the
first full sentence—
(1) by inserting ‘‘(i)’’ after ‘‘in his discretion’’;
(2) by striking out the period at the end of such
sentence and inserting in lieu thereof ‘‘, or’’; and
(3) by adding at the end of such sentence the
following: ‘‘(ii) to award such procurement contract
directly to a socially and economically disadvantaged
small business designated by the Administration pro-
vided that the small business does not request that
the award be made through the Administration.’’.
SEC. 405. NOTIFICATION OF SMALL BUSINESS CONCERNS
IN LOCALITY OF PROCURING AGENCY.
Section 18 of the Office of Federal Procurement Pol-
icy Act (41 U.S.C. 416), as amended by section 401(b)(3),
is further amended by adding at the end the following:
‘‘(f) NOTIFICATION
OF LOCAL SMALL BUSINESS
CONCERNS.—An executive agency intending to solicit of-
fers for a contract for which a notice of solicitation is re-
quired to be posted under subsection (a)(1)(B) shall en-
sure that small business concerns located in the jurisdic-
tion of the Small Business Administration District Office
nearest to the agency, and other small business concerns
in the State in which the agency is located, are sent no-
tices of the solicitation.’’.
TITLE V—INTELLECTUAL
PROPERTY
SEC. 501. DEPARTMENT OF DEFENSE ACQUISITION OF IN-
TELLECTUAL PROPERTY RIGHTS.
(a) AUTHORIZED ACQUISITIONS.—Section 2386 of
title 10, United States Code, is amended by striking out
paragraphs (3) and (4) and inserting in lieu thereof the
following:
‘‘(3) Technical data and computer software.
‘‘(4) Releases for past infringement of patents
or copyrights or for unauthorized use of technical
data or computer software.’’.
(b) REDUNDANT PROVISION.—
(1) REPEAL.—Section 7210 of title 10, United
States Code, is repealed.
(2) TECHNICAL
AMENDMENT.—The table of
sections at the beginning of chapter 631 of such title
is amended by striking out the item relating to sec-
tion 7210.
TITLE VI—STANDARDS OF
CONDUCT
Subtitle A—Ethics Provisions
SEC. 601. AMENDMENTS TO OFFICE OF FEDERAL PROCURE-
MENT POLICY ACT.
(a) APPLICABILITY
OF CERTIFICATION REQUIRE-
MENT TO CONTRACTS IN EXCESS OF $500,000.—Sub-
section (e)(7)(A) of section 27 of the Office of Federal
Procurement Policy Act (41 U.S.C. 423) is amended by
striking out ‘‘$100,000’’ and inserting in lieu thereof
‘‘$500,000’’.
(b) APPLICABILITY
OF RESTRICTIONS RESULTING
FROM PROCUREMENT ACTIVITIES OF PROCUREMENT OF-
FICIALS TO CONTRACTS IN EXCESS OF $500,000.—Sub-
section (f) of such section is amended—
(1) by adding at the end of paragraph (1) the
following new sentence: ‘‘This subsection applies
only to contracts, extensions, and modifications in
excess of $500,000.’’; and
(2) in paragraph (2)(A), by striking out
‘‘$100,000’’ 
and 
inserting 
in 
lieu 
thereof
‘‘$500,000’’.
SEC. 602. REPEAL OF SUPERSEDED AND OBSOLETE LAWS.
(a) REPEAL.—The following sections of title 10,
United States Code, are repealed: Sections 2207, 2397,
2397a, 2397b, 2397c, and 2408.
(b) TECHNICAL AMENDMENTS.—Part IV of subtitle
A of title 10, United States Code, is amended—
(1) in the table of sections at the beginning of
chapter 131, by striking out the item relating to sec-
tion 2207; and
(2) in the table of sections for chapter 141, by
striking out the items relating to sections 2397,
2397a, 2397b, 2397c, and 2408.
Subtitle B—Additional
Amendments
SEC. 611. CONTRACTING FUNCTIONS PERFORMED BY FED-
ERAL PERSONNEL.
(a) AMENDMENT OF OFPP ACT.—The Office of Fed-
eral Procurement Policy Act, as amended by sections
401(e) and 403, is further amended by adding at the end
the following new section:
‘‘CONTRACTING FUNCTIONS PERFORMED BY FEDERAL
PERSONNEL
‘‘SEC. 31. (a) LIMITATION ON PAYMENT FOR ADVI-
SORY AND ASSISTANCE SERVICES.—(1) No person who is
not an employee may be paid by an agency for services
to conduct evaluations or analyses of any aspect of a pro-
posal submitted for an acquisition unless employees with
adequate training and capabilities to perform such evalua-
tions and analyses are not readily available within the
agency or any other Federal agency.
‘‘(2) In the administration of this subsection, the
head of each agency shall determine the standards of ade-
quate training and capability of employees to conduct such
acquisitions.
‘‘(b) DELEGATION OF PROCUREMENT AUTHORITY.—
With respect to an acquisition that is subject to section
111 of the Federal Property and Administrative Services
Act of 1949 (40 U.S.C. 759), the Administrator of Gen-
eral Services may not issue a delegation of procurement
authority for the acquisition unless the request for the del-
egation of procurement authority includes a determination
of the contracting agency that—
‘‘(1) such agency has and will utilize employees
within the agency, or employees available from an-
other agency, who are adequately trained and capa-
ble of conducting evaluations and analyses of pro-
posals submitted for such an acquisition; or
‘‘(2)(A) such agency does not have employees
within the agency who are adequately trained and
capable of conducting evaluations and analyses of
proposals submitted for such an acquisition; and
‘‘(B) adequately trained and capable employees
are not readily available from other agencies in ac-
cordance with regulations promulgated by the Fed-
eral Acquisition Regulatory Council.
‘‘(c) DEFINITION.—For purposes of this section, the
term ‘employee’ has the meaning given such term in sec-
tion 2105 of title 5, United States Code.’’.
(b) REQUIREMENT
FOR GUIDANCE
AND REGULA-
TIONS.—
(1) GUIDANCE AND REGULATIONS REQUIRED.—
Not later than 90 days after the date of the enact-
ment of this Act, the Federal Acquisition Regulatory
Council established by section 25(a) of the Office of
Federal Procurement Policy Act (41 U.S.C. 421(a))
shall—
(A) review part 37 of title 48 of the Code
of Federal Regulations as it relates to the use
of advisory and assistance services; and
(B) provide guidance and promulgate regu-
lations regarding—
(i) what actions Federal agencies are
required to take to determine whether ex-
pertise is readily available within the Fed-
eral Government before contracting for ad-
visory and technical services to conduct ac-
quisitions; and
(ii) the manner in which Federal em-
ployees with expertise may be shared with
agencies needing expertise for such acquisi-
tions.
(2) DEFINITION.—In paragraph (1), the term
‘‘employee’’ has the meaning given such term in sec-
tion 2105 of title 5, United States Code.
SEC. 612. REPEAL OF EXECUTED REQUIREMENT FOR
STUDY AND REPORT.
Section 17 of the Office of Federal Procurement Pol-
icy Act (41 U.S.C. 415) is repealed.
SEC. 613. WAITING PERIOD FOR SIGNIFICANT CHANGES
PROPOSED FOR ACQUISITION REGULATIONS.
Section 22(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 418b) is amended—
(1) by striking out ‘‘30 days’’ and inserting in
lieu thereof ‘‘60 days’’; and
(2) by adding at the end the following: ‘‘Not-
withstanding the preceding sentence, such a policy,
regulation, procedure, or form may take effect ear-
lier than 60 days after the publication date when
there are compelling circumstances for the earlier
effective date, but in no event may that effective
date be less than 30 days after the publication
date.’’.
TITLE VII—DEFENSE TRADE AND
COOPERATION
SEC. 701. INTERNATIONAL COOPERATIVE AGREEMENTS.
(a) DEFENSE INTERNATIONAL AGREEMENTS.—
(1) TERMINOLOGY
REVISIONS.—Section 2531
of title 10, United States Code, is amended—
(A) in the subsection captions for sub-
sections (a) and (c), by striking out ‘‘MOUS
AND RELATED’’ and inserting in lieu thereof
‘‘INTERNATIONAL’’;
(B) in subsection (a), by striking out ‘‘pro-
posed memorandum of understanding, or any
existing or proposed agreement related to a
memorandum of understanding,’’ in the matter
above paragraph (1) and inserting in lieu there-
of ‘‘proposed international agreement, including
a memorandum of understanding,’’;
(C) by striking out ‘‘memorandum of un-
derstanding or related agreement’’ each place it
appears and inserting in lieu thereof ‘‘inter-
national agreement’’;
(D) in subsection (b), by striking out
‘‘memorandum or related agreement’’ each
place it appears in the second sentence and in-
serting in lieu thereof ‘‘international agree-
ment’’; and
(E) in subsection (c)—
(i) by striking out ‘‘A’’ after ‘‘AGREE-
MENTS.—’’ and inserting in lieu thereof
‘‘An’’; and
(ii) by striking out ‘‘memorandum or
agreement’’ and inserting in lieu thereof
‘‘international agreement’’.
(2) EXPANDED SCOPE OF AGREEMENTS.—Sec-
tion 2531(a) of title 10, United States Code, is
amended by striking out ‘‘research, development, or
production’’ in the matter above paragraph (1) and
inserting in lieu thereof ‘‘research, development, pro-
duction, or logistics support’’.
(3) TECHNICAL AMENDMENTS.—
(A) SECTION HEADING.—The heading of
section 2531 of title 10, United States Code, is
amended to read as follows:
‘‘§ 2531. Defense international agreements’’.
(B) TABLE OF SECTIONS.—The item relat-
ing to such section in the table of sections at
the beginning of subchapter V of chapter 148
of such title is amended to read as follows:
‘‘2531. Defense international agreements.’’.
(b) REPEAL OF UNNECESSARY AUTHORITY.—
(1) REPEAL.—Section 7344 of title 10, United
States Code, is repealed.
(2) TECHNICAL
AMENDMENT.—The table of
sections at the beginning of chapter 635 of such title
is amended by striking out the item relating to sec-
tion 7344.
SEC. 702. ACQUISITION, CROSS-SERVICING AGREEMENTS,
AND STANDARDIZATION.
(a) LIMITED WAIVER
OF RESTRICTIONS
ON AC-
CRUED REIMBURSABLE LIABILITIES AND CREDITS FOR
CONTINGENCY OPERATIONS.—Section 2347 of title 10,
United States Code, is amended by adding at the end the
following new subsection:
‘‘(c) The Secretary of Defense may waive the restric-
tions in subsections (a) and (b) for a period not to exceed
180 days upon a written determination that the armed
forces are involved in a contingency operation or that in-
volvement of the armed forces in a contingency operation
is imminent. Upon making such a determination, the Sec-
retary shall transmit a copy of the determination to the
Committees on Armed Services of the Senate and House
of Representatives.’’.
(b) COMMUNICATIONS SUPPORT.—Section 2350f of
title 10, United States Code, is amended—
(1) by redesignating subsection (d) as sub-
section (e); and
(2) by inserting after subsection (c) the follow-
ing new subsection:
‘‘(d)(1) Nothing in this section shall be construed to
limit the authority of the Secretary of Defense, without
a formal bilateral agreement or multilateral arrangement,
to furnish communications support and related supplies
to, or receive communications support and related supplies
from, an allied country in accordance with this subsection.
‘‘(2) The Secretary of Defense may furnish or receive
such support and supplies on a reciprocal basis for a pe-
riod not to exceed 90 days—
‘‘(A) in order to meet emerging operational re-
quirements of the United States and the allied coun-
try; or
‘‘(B) incident to a joint military exercise with
the allied country.
‘‘(3) If interconnection of communication circuits is
maintained for joint or multilateral defense purposes
under the authority of this subsection, the costs of main-
taining such circuits may be allocated among the various
users.’’.
TITLE VIII—COMMERCIAL ITEM
ACQUISITION
SEC. 
801. 
PROCUREMENT 
OF 
COMMERCIAL 
AND
NONDEVELOPMENTAL ITEMS.
(a) ADDITION OF CHAPTER TO TITLE 10.—(1) Part
IV of subtitle A of title 10, United States Code, is amend-
ed by adding at the end the following new chapter:
‘‘CHAPTER 174—PROCUREMENT OF
COMMERCIAL ITEMS
‘‘Sec.
‘‘2951. Policy.
‘‘2952. Acquisition of commercial items.
‘‘2953. Precedence; relationship to other laws.
‘‘2954. Specific acquisition procedures and restrictions.
‘‘2955. Pricing; remedy for inaccurate documentation; audit; nonexclusivity.
‘‘§ 2951. Policy.
‘‘To further achieve effective, efficient, and economic
administration of the Federal procurement system, the
Secretary of Defense shall, in accordance with applicable
laws, Government-wide policies and regulations, and good
business practices, implement a preference for the acquisi-
tion of commercial items by—
‘‘(1) whenever practicable, stating specifications
in solicitation for bids and proposals in terms such
that bidders and offerors are enabled and encour-
aged to offer to supply commercial items in response
to agency solicitations;
‘‘(2) reducing impediments to the acquisition of
commercial items in agency procurement policies,
practices, and procedures not required by law; and
‘‘(3) requiring training of appropriate personnel
in the acquisition of commercial items.
‘‘§ 2952. Acquisition of commercial items.
‘‘(a) MARKET RESEARCH.—Before soliciting bids or
proposals for a contract for property or services, the Sec-
retary of Defense or the Secretary of the military depart-
ment concerned shall conduct market research, appro-
priate to the circumstances, to determine whether the
needs of the department can be met by the acquisition of
commercial items.
‘‘(b) ADVOCATE FOR ACQUISITION OF COMMERCIAL
ITEMS.—
‘‘(1) ESTABLISHMENT.—There is established in
the Department of Defense the position of Advocate
for the Acquisition of Commercial Items (hereinafter
in this subsection referred to as the ‘Advocate’).
‘‘(2) FUNCTIONS.—The Advocate shall—
‘‘(A) monitor compliance by the Depart-
ment with the preference required under sub-
section (a) for the acquisition of commercial
items;
‘‘(B) make recommendations and proposals
to the Secretary of Defense regarding the re-
form of procurement statutes and regulations to
implement that preference; and
‘‘(C) report to the Secretary of Defense on
the prospective effect of proposed statutes and
regulations on the acquisition of commercial
items.
‘‘§ 2953. Precedence; relationship to other laws
‘‘(a) EXEMPTIONS FROM PRESENT LAW.—In the ac-
quisition of commercial items or commercial components
by the Department of Defense, the following sections of
this title do not apply:
‘‘(1) Section 2207.
‘‘(2) Section 2306(b).
‘‘(3) Section 2313.
‘‘(4) Section 2384(b).
‘‘(5) Section 2393.
‘‘(6) Section 2397c.
‘‘(7) Section 2408.
‘‘(8) Section 2410b.
‘‘(9) Section 2631.
‘‘(b) PRINCIPLE OF CONSTRUCTION WITH FUTURE
LAWS.—Notwithstanding any other provision of law en-
acted after the date of the enactment of this chapter, no
provision of this chapter or of any other law expressly ref-
erenced in this chapter shall be held to have been amended
by another law unless that law specifically refers to and
amends such provision of this chapter or such provision
of law expressly referenced in this chapter.
‘‘(c) RELATION
TO
SIMPLIFIED
PROCEDURES.—
When commercial items are being procured by the Govern-
ment, the provisions of this chapter, and regulations is-
sued under this chapter, shall take precedence over regula-
tions issued pursuant to section 2304(g) of this title.
Nothing in this section shall affect the set-aside for small
businesses established by section 15(j) of the Small Busi-
ness Act (15 U.S.C. 644(j)).
‘‘(d) SET-ASIDES
PRESERVED.—Nothing in this
chapter shall prevent the Secretary of Defense from re-
stricting the award of prime contracts for commercial
items to any source as may from time to time be pre-
scribed or permitted by law.
‘‘§ 2954. Specific acquisition procedures and restric-
tions
‘‘(a) RESTRICTION TO FIXED PRICE BASIS.—The
Department of Defense shall purchase commercial items
and components acquired under this chapter on a firm,
fixed price basis or on a fixed price with economic price
adjustment basis.
100
‘‘(b) ECONOMIC PRICE ADJUSTMENT.—To the extent
practical, contracts for commercial items shall not require
contract performance for a term longer than customary
industry practice for the product being acquired. Contract-
ing officers may consider the use of economic price adjust-
ment provisions if an extended period of performance can-
not be avoided.
‘‘(c) 
REQUIREMENTS
FOR
COMMERCIAL
AND
NONDEVELOPMENTAL ITEMS.—The Secretary of Defense
shall ensure that, to the maximum extent practicable—
‘‘(1) requirements of the Department of De-
fense with respect to a procurement of supplies are
stated in terms of—
‘‘(A) functions to be performed;
‘‘(B) performance required; or
‘‘(C) essential physical characteristics;
‘‘(2) such requirements are defined so that
commercial or nondevelopmental items and commer-
cial components may be procured to fulfill such re-
quirements;
‘‘(3) such requirements are fulfilled through the
procurement of commercial or nondevelopmental
items and commercial components; and
‘‘(4) prior to developing new specifications, the
Department conducts market research to determine
101
whether commercial or nondevelopmemental items
are available or could be modified to meet agency
needs.
‘‘(d) CONTRACT QUALITY REQUIREMENTS.—(1) To
the maximum extent practicable, regulations issued under
this chapter shall permit contractors providing commercial
items to use their existing quality assurance systems and
quality programs.
‘‘(2) To the maximum extent practicable, regulations
issued under this chapter shall prohibit Government in-
spection or test of commercial items prior to tender of
those items by the contractor for acceptance by the Gov-
ernment.
‘‘§ 2955. Pricing; remedy for inaccurate documenta-
tion; audit; nonexclusivity
‘‘(a) REQUIREMENT FOR DETERMINATION OF PRICE
REASONABLENESS.—(1) When a procurement for a com-
mercial item or component by the Government or its con-
tractors, using other than sealed bid procedures, has been
based on adequate price competition, or when the price
agreed on is based on prices of items or components sold
in sufficient quantities to the general public to establish
a market price, the contracting officer shall presume that
the price contained in the most advantageous evaluated
offer (price and all other factors considered) received in
102
response to a solicitation, or a price based on established
market prices, is fair and reasonable unless the contract-
ing officer has information that the price is not fair and
reasonable. Prior to the award of a contract where price
is based on market prices, the contracting officer shall
make reasonable efforts to establish the currency and ac-
curacy of such prices.
‘‘(2) When paragraph (1) is not applicable, the con-
tracting officer shall use price analysis to determine
whether or not the price is fair and reasonable.
‘‘(3) When required by the contracting officer prior
to award or contract definitization, the contractor shall
promptly furnish documentation adequate to demonstrate
the market price of the item or items or otherwise needed
to establish a fair and reasonable price. All documentation
received from an offeror, if not otherwise in the public do-
main and if requested by the offeror and marked as con-
fidential, shall be treated by the Government as confiden-
tial and exempt from disclosure to the extent permitted
by section 552 of title 5.
‘‘(4) If the contracting officer determines under para-
graph (1) or (2) that the price is fair and reasonable, no
cost or pricing data may be required under the provisions
of section 2306a of this title.
103
‘‘(b) GOVERNMENT’S
REMEDY
FOR
INACCURATE
DOCUMENTATION.—When documentation is submitted
pursuant to subsection (a)(3), the Government shall be en-
titled to a reduction in price, and the return of any over-
payment, with interest thereon, if an offeror knowingly or
negligently submits materially inaccurate or misleading
documentation in support of a contract or modification,
the contracting officer relies on such documentation in
reaching a determination that a price is reasonable, and
because of such reliance the price significantly exceeds
that which would otherwise have been accepted. For pur-
poses of applying this subsection, a contracting officer will
be rebuttably presumed to have relied upon all material
documentation supplied by an offeror.
‘‘(c) GOVERNMENT’S RIGHT TO AUDIT.—The United
States shall have the right to audit all documentation pro-
vided by an offeror under subsection (b) and all books and
records of the offeror directly relating to such documenta-
tion, except that, if the offeror has made no representation
as to the completeness of the documentation supplied, the
United States shall have no right to audit for complete-
ness. The audit right created by this subsection shall ex-
pire one year after the date of award of the contract or
the date of the modification of a contract with respect to
which documentation was provided. When contract price
104
is established under this section, the Government shall
have no audit rights other than those set out in this sub-
section.
‘‘(d) NON-EXCLUSIVITY.—The Government’s rights
and remedies available in this chapter are in addition to
those otherwise provided by law.’’.
(2) The tables of chapters at the beginning of subtitle
A of title 10, United States Code, and at the beginning
of part IV of such subtitle are each amended by inserting
after the item relating to chapter 173 the following new
item:
‘‘174. Procurement of Commercial Items ................................. 2951’’.
(b) REGULATIONS
AND SIMPLIFIED FORM CON-
TRACTS.—
(1) REVISION OF FAR.—Unless otherwise spe-
cifically provided in this Act, not later than 180
days after the date of the enactment of this Act, the
Federal Acquisition Regulation issued under section
25(c) of the Office of Federal Procurement Policy
Act (41 U.S.C. 421(c)) shall be revised to implement
the amendments made by this section.
(2) SIMPLIFIED
UNIFORM
CONTRACT.—(A)(i)
The revision of the Federal Acquisition Regulation
under paragraph (1) shall include issuance of one or
more simplified uniform contracts for the acquisition
of commercial items by the Department of Defense