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(II) personnel performing private
security functions in an area of combat
operations are killed or injured; or
(III) persons are killed or injured,
or property is destroyed, as a result of
conduct by contractor personnel;
(B) ensure that all personnel performing
private security functions under such contract or
subcontract are briefed on and understand their
obligation to comply with—
(i) qualification, training, screening,
and security requirements established by the
Secretary of Defense for personnel per-
forming private security functions in an
area of combat operations;
(ii) applicable laws and regulations of
the United States and the host country, and
applicable treaties and international agree-
ments, regarding the performance of the
functions of the contractor or subcontractor;
(iii) orders, directives, and instructions
issued by the applicable commander of a
combatant command relating to force pro-
tection, security, health, safety, or relations
and interaction with locals; and
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(iv) rules on the use of force issued by
the applicable commander of a combatant
command for personnel performing private
security functions in an area of combat op-
erations; and
(C) cooperate with any investigation con-
ducted by the Department of Defense pursuant to
subsection (a)(2)(D) by providing access to em-
ployees of the contractor or subcontractor, as the
case may be, and relevant information in the
possession of the contractor or subcontractor, as
the case may be, regarding the incident con-
cerned.
(3) 
NONCOMPLIANCE
OF
PERSONNEL
WITH
CLAUSE.—The contracting officer for a covered con-
tract or subcontract may direct the contractor or sub-
contractor, at its own expense, to remove or replace
any personnel performing private security functions
in an area of combat operations who violate or fail
to comply with applicable requirements of the clause
required by this subsection. If the violation or failure
to comply is significant or repeated, the contract or
subcontract may be terminated for default.
(4) APPLICABILITY.—The contract clause re-
quired by this subsection shall be included in all cov-
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ered contracts and covered subcontracts awarded on
or after the date that is 180 days after the date of the
enactment of this Act. Federal agencies shall make
best efforts to provide for the inclusion of the contract
clause required by this subsection in covered contracts
and covered subcontracts awarded before such date.
(5) INSPECTOR GENERAL REPORT ON PILOT PRO-
GRAM ON IMPOSITION OF FINES FOR NONCOMPLIANCE
OF PERSONNEL WITH CLAUSE.—Not later than Janu-
ary 30, 2008, the Inspector General of the Depart-
ment of Defense shall submit to Congress a report as-
sessing the feasibility and advisability of carrying out
a pilot program for the imposition of fines on con-
tractors or subcontractors for personnel who violate or
fail to comply with applicable requirements of the
clause required by this section as a mechanism for en-
hancing the compliance of such personnel with the
clause. The report shall include—
(A) an assessment of the feasibility and ad-
visability of carrying out the pilot program; and
(B) if the Inspector General determines that
carrying out the pilot program is feasible and
advisable—
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(i) recommendations on the range of
contracts and subcontracts to which the
pilot program should apply; and
(ii) a schedule of fines to be imposed
under the pilot program for various types of
personnel actions or failures.
(c) AREAS OF COMBAT OPERATIONS.—
(1) DESIGNATION.—The Secretary of Defense
shall designate the areas constituting an area of com-
bat operations for purposes of this section by not later
than 120 days after the date of the enactment of this
Act.
(2) PARTICULAR AREAS.—Iraq and Afghanistan
shall be included in the areas designated as an area
of combat operations under paragraph (1).
(3) ADDITIONAL
AREAS.—The Secretary may
designate any additional area as an area constituting
an area of combat operations for purposes of this sec-
tion if the Secretary determines that the presence or
potential of combat operations in such area warrants
designation of such area as an area of combat oper-
ations for purposes of this section.
(4) MODIFICATION OR ELIMINATION OF DESIGNA-
TION.—The Secretary may modify or cease the des-
ignation of an area under this subsection as an area
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of combat operations if the Secretary determines that
combat operations are no longer ongoing in such
area.
(d) DEFINITIONS.—In this section:
(1) The term ‘‘covered contract’’ means a con-
tract of a Federal agency for the performance of serv-
ices in an area of combat operations, as designated by
the Secretary of Defense under subsection (c).
(2) The term ‘‘covered subcontract’’ means a sub-
contract for the performance of private security func-
tions at any tier under a covered contract.
(3) The term ‘‘private security functions’’ means
activities engaged in by a contractor or subcontractor
under a covered contract or subcontract as follows:
(A) Guarding of personnel, facilities, or
property of a Federal agency, the contractor or
subcontractor, or a third party.
(B) Any other activity for which personnel
are required to carry weapons in the perform-
ance of their duties.
SEC. 872. ENHANCED AUTHORITY TO ACQUIRE PRODUCTS
AND SERVICES PRODUCED IN IRAQ AND AF-
GHANISTAN.
(a) IN GENERAL.—In the case of a product or service
to be acquired in support of military operations or stability