306
tember 30, 1996’’ and inserting in lieu thereof ‘‘Septem-
ber 30, 1998’’.
(c) SELECTED RESERVE AFFILIATION BONUS.—Sec-
tion 308e(e) of such title is amended by striking out ‘‘Sep-
tember 30, 1996’’ and inserting in lieu thereof ‘‘Septem-
ber 30, 1998’’.
(d) READY RESERVE ENLISTMENT AND REENLIST-
MENT BONUS.—Section 308h(g) of such title is amended
by striking out ‘‘September 30, 1996’’ and inserting in
lieu thereof ‘‘September 30, 1998’’.
(e) PRIOR SERVICE ENLISTMENT BONUS.—Section
308i(i) of such title is amended by striking out ‘‘Septem-
ber 30, 1996’’ and inserting in lieu thereof ‘‘September
30, 1998’’.
SEC. 612. EXTENSION OF CERTAIN BONUSES AND SPECIAL
PAY FOR NURSE OFFICER CANDIDATES, REG-
ISTERED 
NURSES, 
AND 
NURSE 
ANES-
THETISTS.
(a) NURSE OFFICER CANDIDATE ACCESSION PRO-
GRAM.—Section 2130a(a)(1) of title 10, United States
Code, is amended by striking out ‘‘September 30, 1996’’
and inserting in lieu thereof ‘‘September 30, 1998’’.
(b) ACCESSION BONUS FOR REGISTERED NURSES.—
Section 302d(a)(1) of title 37, United States Code, is
307
amended by striking out ‘‘September 30, 1996’’ and in-
serting in lieu thereof ‘‘September 30, 1998’’.
(c) INCENTIVE SPECIAL PAY
FOR NURSE ANES-
THETISTS.—Section 302e(a)(1) of title 37, United States
Code, is amended by striking out ‘‘September 30, 1996’’
and inserting in lieu thereof ‘‘September 30, 1998’’.
SEC. 613. EXTENSION OF AUTHORITY RELATING TO PAY-
MENT OF OTHER BONUSES AND SPECIAL
PAYS.
(a) AVIATION OFFICER RETENTION BONUS.—Sec-
tion 301b(a) of title 37, United States Code, is amended
by striking out ‘‘September 30, 1995’’ and inserting in
lieu thereof ‘‘September 30, 1998’’.
(b) REENLISTMENT
BONUS
FOR
ACTIVE
MEM-
BERS.—Section 308(g) of such title is amended by strik-
ing out ‘‘September 30, 1996’’ and inserting in lieu there-
of ‘‘September 30, 1998’’.
(c) ENLISTMENT BONUSES FOR CRITICAL SKILLS.—
Sections 308a(c) and 308f(c) of such title are each amend-
ed by striking out ‘‘September 30, 1996’’ and inserting
in lieu thereof ‘‘September 30, 1998’’.
(d) SPECIAL PAY FOR ENLISTED MEMBERS OF THE
SELECTED RESERVE ASSIGNED TO CERTAIN HIGH PRI-
ORITY UNITS.—Section 308d(c) of such title is amended
308
by striking out ‘‘September 30, 1996’’ and inserting in
lieu thereof ‘‘September 30, 1998’’.
(e) SPECIAL PAY FOR NUCLEAR-QUALIFIED OFFI-
CERS EXTENDING PERIOD OF ACTIVE SERVICE.—Section
312(e) of such title is amended by striking out ‘‘Septem-
ber 30, 1996’’ and inserting in lieu thereof ‘‘September
30, 1998’’.
(f) NUCLEAR CAREER ACCESSION BONUS.—Section
312b(c) of such title is amended by striking out ‘‘Septem-
ber 30, 1996’’ and inserting in lieu thereof ‘‘September
30, 1998’’.
(g) 
NUCLEAR
CAREER
ANNUAL
INCENTIVE
BONUS.—Section 312c(d) of such title is amended by
striking out ‘‘October 1, 1996’ and inserting in lieu there-
of ‘‘October 1, 1998’’.
(h) REPAYMENT OF EDUCATION LOANS FOR CER-
TAIN HEALTH PROFESSIONALS WHO SERVE IN THE SE-
LECTED RESERVE.—Section 16302(d) of title 10, United
States Code, is amended by striking out ‘‘October 1,
1996’’ and inserting in lieu thereof ‘‘October 1, 1998’’.
309
SEC. 614. CODIFICATION AND EXTENSION OF SPECIAL PAY
FOR CRITICALLY SHORT WARTIME HEALTH
SPECIALISTS IN THE SELECTED RESERVES.
(a) SPECIAL PAY AUTHORIZED.—(1) Chapter 5 of
title 37, United States Code, is amended by inserting after
section 302f the following new section:
‘‘§ 302g. Special pay: Selected Reserve health care
professionals in critically short wartime
specialties
‘‘(a) SPECIAL PAY AUTHORIZED.—An officer of a re-
serve component of the armed forces described in sub-
section (b) who executes a written agreement under which
the officer agrees to serve in the Selected Reserve of an
armed force for a period of not less than one year nor
more than three years, beginning on the date the officer
accepts the award of special pay under this section, may
be paid special pay at an annual rate not to exceed
$10,000.
‘‘(b) ELIGIBLE OFFICERS.—An officer referred to in
subsection (a) is an officer in a health care profession who
is qualified in a specialty designated by regulations as a
critically short wartime specialty.
‘‘(c) TIME FOR PAYMENT.—Special pay under this
section shall be paid annually at the beginning of each
twelve-month period for which the officer has agreed to
serve.
310
‘‘(d) REFUND REQUIREMENT.—An officer who volun-
tarily terminates service in the Selected Reserve of an
armed force before the end of the period for which a pay-
ment was made to such officer under this section shall
refund to the United States the full amount of the pay-
ment made for the period on which the payment was
based.
‘‘(e) INAPPLICABILITY
OF DISCHARGE
IN BANK-
RUPTCY.—A discharge in bankruptcy under title 11 that
is entered less than five years after the termination of an
agreement under this section does not discharge the per-
son receiving special pay under the agreement from the
debt arising under the agreement.
‘‘(f) TERMINATION OF AGREEMENT AUTHORITY.—
No agreement under this section may be entered into after
September 30, 1998.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 302f the following new item:
‘‘302g. Special pay: Selected Reserve health care professionals in critically short
wartime specialties.’’.
(b) CONFORMING AMENDMENT.—Section 303a of
title 37, United States Code is amended by striking out
‘‘302, 302a, 302b, 302c, 302d, 302e,’’ each place it ap-
pears and inserting in lieu thereof ‘‘302 through 302g,’’.
311
(c) CONFORMING REPEAL.—(1) Section 613 of the
National Defense Authorization Act, Fiscal Year 1989
(Public Law 100–456; 37 U.S.C. 302 note) is repealed.
(2) The repeal of section 613 of the National Defense
Authorization Act, Fiscal Year 1989, by paragraph (1)
shall not affect the validity or terms of any agreement en-
tered into under such section before the date of the enact-
ment of this Act.
SEC. 615. CHANGE IN ELIGIBILITY REQUIREMENTS FOR
CONTINUOUS MONTHLY AVIATION INCEN-
TIVE PAY.
(a) 
LOWER
INCENTIVE
PAY
GATE.—Section
301a(a)(4) of title 37, United States Code, is amended
by striking out ‘‘9’’ in the first sentence and inserting in
lieu thereof ‘‘8’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on October 1, 1995.
SEC. 616. CONTINUOUS ENTITLEMENT TO CAREER SEA PAY
FOR CREWMEMBERS OF SHIPS DESIGNATED
AS TENDERS.
(a) 
CONTINUOUS
ENTITLEMENT.—Section
305a(d)(1)(A) of title 37, United States Code, is amend-
ed—
(1) by striking out ‘‘or’’ after ‘‘under way’’ and
inserting in lieu thereof a comma; and
312
(2) by inserting before the semicolon at the end
the following: ‘‘, or while serving as a member of a
tender-class ship (with the hull classification of sub-
marine or destroyer)’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect on October 1, 1995.
SEC. 617. INCREASE IN MAXIMUM RATE OF SPECIAL DUTY
ASSIGNMENT PAY FOR ENLISTED MEMBERS
SERVING AS RECRUITERS.
(a) SPECIAL MAXIMUM RATE FOR RECRUITERS.—
Section 307(a) of title 37, United States Code, is amended
by adding at the end the following new sentence: ‘‘In the
case of a member who is serving as a military recruiter
and is eligible for special duty assignment pay under this
subsection on account of such duty, the Secretary con-
cerned may increase the monthly rate of special duty as-
signment pay for the member to not more than $375.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on January 1, 1996.
313
Subtitle C—Travel and
Transportation Allowances
SEC. 621. AUTHORIZATION OF RETURN TO UNITED STATES
OF FORMERLY DEPENDENT CHILDREN OF
MEMBERS.
(a) RETURN AT GOVERNMENT EXPENSE.—Section
406(h)(1) of title 37, United States Code, is amended in
the last sentence—
(1) by striking out ‘‘who became 21 years of
age’’ and inserting in lieu thereof ‘‘who, by reason
of age or graduation from (or cessation of enroll-
ment in) an institution of higher education, would
otherwise cease to be a dependent of the member’’;
and
(2) by inserting ‘‘still’’ after ‘‘shall’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect on October 1, 1995.
SEC. 622. AUTHORIZATION OF DISLOCATION ALLOWANCE
FOR MOVES IN CONNECTION WITH BASE
REALIGNMENTS AND CLOSURES.
(a) DISLOCATION ALLOWANCE AUTHORIZED.—Sub-
section (a) of section 407 of title 37, United States Code,
is amended—
(1) by striking out ‘‘or’’ at the end of para-
graph (3);
314
(2) by striking out the period at the end of
paragraph (4)(B) and inserting in lieu thereof ‘‘;
or’’; and
(3) by inserting after paragraph (4)(B) the fol-
lowing new paragraph:
‘‘(5) the member’s dependents actually make an
authorized move in connection with the member’s di-
rected order to move as a result of the closure or re-
alignment of a military installation.’’.
(b) CONFORMING AMENDMENTS.—Such section is
further amended—
(1) 
in 
the 
sentence 
following 
subsection
(a)(4)—
(A) by striking out ‘‘clause (3) or (4)(B)’’
and inserting in lieu thereof ‘‘paragraph (3) or
(4)(B)’’; and
(B) by striking out ‘‘clause (1)’’ and in-
serting in lieu thereof ‘‘paragraph (1) or (5)’’;
(2) in subsection (b)—
(A) by striking out ‘‘subsection (a)(3) or
(a)(4)(B)’’ and inserting in lieu thereof ‘‘para-
graph (3) or (4)(B) of subsection (a)’’; and
(B) by striking out ‘‘subsection (a)(1)’’
and inserting in lieu thereof ‘‘paragraph (1) or
(5) of subsection (a)’’.
315
SEC. 623. REPEAL OF PROHIBITION ON PAYMENT OF LODG-
ING EXPENSES WHEN ADEQUATE GOVERN-
MENT QUARTERS ARE AVAILABLE.
(a) REPEAL.—Section 1589 of title 10, United States
Code, is repealed.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 81 of such title is amended
by striking out the item relating to section 1589.
Subtitle D—Other Matters
SEC. 631. ELIMINATION OF UNNECESSARY ANNUAL RE-
PORTING REQUIREMENTS REGARDING COM-
PENSATION MATTERS.
(a) REPORT ON TRAVEL AND TRANSPORTATION AL-
LOWANCES FOR DEPENDENTS.—(1) Section 406 of title
37, United States Code, is amended—
(A) by striking out subsection (i); and
(B) by redesignating subsections (j), (k), (l),
(m), and (n) as subsections (i), (j), (k), (l), and (m),
respectively.
(2) Section 2634(d) of title 10, United States Code,
is amended by striking out ‘‘section 406(l) of title 37’’
and inserting in lieu thereof ‘‘section 406(k) of title 37’’.
(b) ANNUAL REVIEW OF PAY AND ALLOWANCES.—
Subsection (a) of section 1008 of title 37, United States
Code, is amended to read as follows:
316
‘‘(a) Not later than March 31 of each year, the Presi-
dent shall submit to Congress such recommendations (if
any) as the President considers appropriate for adjust-
ments in the rates of pay and allowances authorized by
this title for members of the uniformed services.’’.
SEC. 632. STUDY REGARDING JOINT PROCESS FOR DETER-
MINING 
LOCATION 
OF 
RECRUITING 
STA-
TIONS.
(a) STUDY REQUIRED.—The Secretary of Defense
shall conduct a study regarding the feasibility of—
(1) using a joint process among the Armed
Forces for determining the location of recruiting sta-
tions and the number of military personnel required
to operate such stations; and
(2) basing such determinations on market re-
search and analysis conducted jointly by the Armed
Forces.
(b) REPORT.—Not later than March 31, 1996, the
Secretary of Defense shall submit to Congress a report
describing the results of the study. The report shall in-
clude a recommended method for measuring the efficiency
of individual recruiting stations, such as cost per accession
or other efficiency standard, as determined by the Sec-
retary.
317
SEC. 633. ELIMINATION OF DISPARITY BETWEEN EFFEC-
TIVE DATES FOR MILITARY AND CIVILIAN RE-
TIREE COST-OF-LIVING ADJUSTMENTS FOR
FISCAL YEAR 1996.
(a) IN GENERAL.—The fiscal year 1996 increase in
military retired pay shall (notwithstanding subparagraph
(B) of section 1401a(b)(2) of title 10, United States Code)
first be payable as part of such retired pay for the month
of March 1996.
(b) DEFINITIONS.—For the purposes of subsection
(a):
(1) The term ‘‘fiscal year 1996 increase in mili-
tary retired pay’’ means the increase in retired pay
that, pursuant to paragraph (1) of section 1401a(b)
of title 10, United States Code, becomes effective on
December 1, 1995.
(2) The term ‘‘retired pay’’ includes retainer
pay.
(c) LIMITATION.—Subsection (a) shall be effective
only if there is appropriated to the Department of Defense
Military Retirement Fund (in an Act making appropria-
tions for the Department of Defense for fiscal year 1996
that is enacted before March 1, 1996) such amount as
is necessary to offset increased outlays to be made from
that fund during fiscal year 1996 by reason of the provi-
sions of subsection (a).
318
(d) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated for fiscal year 1996 to the
Department of Defense Military Retirement Fund the sum
of $403,000,000 to offset increased outlays to be made
from that fund during fiscal year 1996 by reason of the
provisions of subsection (a).
TITLE VII—HEALTH CARE
PROVISIONS
Subtitle A—Health Care Services
SEC. 701. MODIFICATION OF REQUIREMENTS REGARDING
ROUTINE PHYSICAL EXAMINATIONS AND IM-
MUNIZATIONS UNDER CHAMPUS.
Section 1079(a) of title 10, United States Code, is
amended by striking out paragraph (2) and inserting in
lieu thereof the following new paragraph:
‘‘(2) consistent with such regulations as the
Secretary of Defense may prescribe regarding the
content of health promotion and disease prevention
visits, the schedule of pap smears and mammo-
grams, and the types and schedule of immuniza-
tions—
‘‘(A) for dependents under six years of age,
both health promotion and disease prevention
visits and immunizations may be provided; and
319
‘‘(B) for dependents six years of age or
older, health promotion and disease prevention
visits may be provided in connection with im-
munizations or with diagnostic or preventive
pap smears and mammograms;’’.
SEC. 702. CORRECTION OF INEQUITIES IN MEDICAL AND
DENTAL CARE AND DEATH AND DISABILITY
BENEFITS FOR CERTAIN RESERVISTS.
(a) MEDICAL AND DENTAL CARE.—Section 1074a(a)
of title 10, United States Code, is amended by adding at
the end the following new paragraph:
‘‘(3) Each member of the armed forces who in-
curs or aggravates an injury, illness, or disease in
the line of duty while remaining overnight, between
successive periods of inactive-duty training, at or in
the vicinity of the site of the inactive-duty training,
and the site is outside reasonable commuting dis-
tance from the member’s residence.’’.
(b) RECOVERY, CARE, AND DISPOSITION
OF RE-
MAINS.—Section 1481(a)(2) of title 10, United States
Code, is amended—
(1) in subparagraph (C), by striking out ‘‘or’’
at the end of the subparagraph;
(2) by redesignating subparagraph (D) as sub-
paragraph (E); and
320
(3) by inserting after subparagraph (C) the fol-
lowing new subparagraph:
‘‘(D) remaining overnight, between succes-
sive periods of inactive-duty training, at or in
the vicinity of the site of the inactive-duty
training, and the site is outside reasonable com-
muting distance from the member’s residence;
or’’.
(c) ENTITLEMENT TO BASIC PAY.—(1) Subsection
(g)(1) of section 204 of title 37, United States Code, is
amended—
(A) in subparagraph (B), by striking out ‘‘or’’
at the end of the subparagraph;
(B) in subparagraph (C), by striking out the
period at the end of the subparagraph and inserting
in lieu thereof ‘‘; or’’; and
(C) by inserting after subparagraph (C) the fol-
lowing new subparagraph:
‘‘(D) in line of duty while remaining overnight,
between successive periods of inactive-duty training,
at or in the vicinity of the site of the inactive-duty
training, and the site is outside reasonable commut-
ing distance from the member’s residence.’’.
(2) Subsection (h)(1) of such section is amended—
321
(A) in subparagraph (B), by striking out ‘‘or’’
at the end of the subparagraph;
(B) in subparagraph (C), by striking out the
period at the end of the subparagraph and inserting
in lieu thereof ‘‘; or’’; and
(C) by inserting after subparagraph (C) the fol-
lowing new subparagraph:
‘‘(D) in line of duty while remaining overnight,
between successive periods of inactive-duty training,
at or in the vicinity of the site of the inactive-duty
training, and the site is outside reasonable commut-
ing distance from the member’s residence.’’.
(d) COMPENSATION
FOR INACTIVE-DUTY TRAIN-
ING.—Section 206(a)(3) of title 37, United States Code,
is amended—
(1) in subparagraph (A), by striking out ‘‘or’’
at the end of clause (ii);
(2) in subparagraph (B), by striking out the pe-
riod at the end of the subparagraph and inserting in
lieu thereof ‘‘; or’’; and
(3) by inserting after subparagraph (B) the fol-
lowing new subparagraph:
‘‘(C) in line of duty while remaining over-
night, between successive periods of inactive-
duty training, at or in the vicinity of the site of
322
the inactive-duty training, and the site is out-
side reasonable commuting distance from the
member’s residence.’’.
SEC. 703. MEDICAL AND DENTAL CARE FOR MEMBERS OF
THE SELECTED RESERVE.
(a) MEMBERS OF EARLY DEPLOYING UNITS OF THE
ARMY SELECTED RESERVE.—Section 1074a of title 10,
United States Code, is amended—
(1) in subsection (c), by striking out ‘‘this sec-
tion’’ and inserting in lieu thereof ‘‘subsection (b)’’;
and
(2) by adding at the end the following new sub-
section:
‘‘(d)(1) The Secretary of the Army shall provide to
members of the Selected Reserve of the Army who are as-
signed to units scheduled for deployment within 75 days
after mobilization the following medical and dental serv-
ices:
‘‘(A) An annual medical screening.
‘‘(B) For members who are over 40 years of
age, a full physical examination not less often than
once every two years.
‘‘(C) An annual dental screening.
‘‘(D) The dental care identified in an annual
dental screening as required to ensure that a mem-
323
ber meets the dental standards required for deploy-
ment in the event of mobilization.
‘‘(2) The services provided under this subsection shall
be provided at no cost to the member.’’.
(b) VOLUNTARY DEMONSTRATION PROGRAM TO IM-
PROVE DENTAL READINESS OF SELECTED RESERVE.—
(1) For members of the Selected Reserve who are not cov-
ered by subsection (a), the Secretary of Defense shall con-
duct a demonstration program to offer such members af-
fordable dental care for the purpose of ensuring that such
members meet the dental standards required for deploy-
ment in the event of mobilization. The Secretary shall de-
termine the geographical scope of the demonstration pro-
gram and the number of members of the Selected Reserve
who will be invited to participate in the program. However,
participation in the demonstration program shall be of-
fered to the members of at least one ground combat ma-
neuver unit of the Selected Reserve of the Army scheduled
for deployment within 90 days after mobilization.
(2) The Secretary may model the dental demonstra-
tion program after the dependents’ dental program au-
thorized under section 1076a of title 10, United States
Code, except that participants in the demonstration pro-
gram shall be responsible for all costs incurred to provide
dental care under the program. The Secretary shall pro-
324
vide for allotment or deduction from the military pay of
participants as a means to pay any premiums required
under the demonstration program.
(3) The authority to carry out the dental demonstra-
tion program under this subsection shall expire on Sep-
tember 30, 1997.
(c) EVALUATION OF DEMONSTRATION PROGRAM.—
Not later than March 1, 1997, the Secretary shall submit
to Congress a report evaluating the success of the dental
demonstration program conducted under subsection (b) in
improving the dental readiness of the Selected Reserve.
The Secretary shall submit a revised report under this
subsection not later than 30 days after the expiration of
the demonstration program.
(d) CONFORMING REPEALS.—Sections 1117 and
1118 of the Army National Guard Combat Readiness Re-
form Act of 1992 (title XI of Public Law 102–484; 10
U.S.C. 3077 note) are repealed.
Subtitle B—TRICARE Program
SEC. 711. PRIORITY USE OF MILITARY TREATMENT FACILI-
TIES FOR PERSONS ENROLLED IN MANAGED
CARE INITIATIVES.
Section 1097(c) of title 10, United States Code, is
amended in the third sentence by striking out ‘‘However,
the Secretary may’’ and inserting in lieu thereof ‘‘Notwith-
325
standing the preferences established by sections 1074(b)
and 1076 of this title, the Secretary shall’’.
SEC. 712. STAGGERED PAYMENT OF ENROLLMENT FEES
FOR TRICARE.
Section 1097(e) of title 10, United States Code, is
amended by adding at the end the following new sentence:
‘‘Without imposing additional costs on covered bene-
ficiaries who participate in contracts for health care serv-
ices under this section or health care plans offered under
section 1099 of this title, the Secretary shall permit such
covered beneficiaries to pay, on a monthly or quarterly
basis, any enrollment fee required for such participation.’’.
SEC. 713. REQUIREMENT OF BUDGET NEUTRALITY FOR
TRICARE TO BE BASED ON ENTIRE PRO-
GRAM.
(a) CHANGE
IN BUDGET NEUTRALITY REQUIRE-
MENTS.—Subsection (c) of section 731 of the National
Defense Authorization Act for Fiscal Year 1994 (Public
Law 103–160; 10 U.S.C. 1073 note) is amended—
(1) by striking out ‘‘each managed health care
initiative that includes the option’’ and inserting in
lieu thereof ‘‘the TRICARE program’’; and
(2) by striking out ‘‘covered beneficiaries who
enroll in the option’’ and inserting in lieu thereof
‘‘members of the uniformed services and covered
326
beneficiaries who participate in the TRICARE pro-
gram’’.
(b) ADDITION OF DEFINITION OF TRICARE PRO-
GRAM.—Subsection (d) of such section is amended to read
as follows:
‘‘(d) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘covered beneficiary’ means a
beneficiary under chapter 55 of title 10, United
States Code, other than a beneficiary under section
1074(a) of such title.
‘‘(2) The term ‘TRICARE program’ means the
managed health care program that is established by
the Secretary of Defense under the authority of
chapter 55 of title 10, United States Code, prin-
cipally section 1097 of such title, and includes the
competitive selection of contractors to financially un-
derwrite the delivery of health care services under
the Civilian Health and Medical Program of the
Uniformed Services.’’.
SEC. 714. TRAINING IN HEALTH CARE MANAGEMENT AND
ADMINISTRATION 
FOR 
TRICARE 
LEAD
AGENTS.
(a) PROVISION OF TRAINING.—Not later than six
months after the date of the enactment of this Act, the
Secretary of Defense shall implement a professional edu-
327
cational program to provide appropriate training in health
care management and administration to each commander
of a military medical treatment facility of the Department
of Defense who is selected to serve as a lead agent to co-
ordinate the delivery of health care by military and civilian
providers under the TRICARE program.
(b) TRICARE PROGRAM DEFINED.—For purposes
of this section, the term ‘‘TRICARE program’’ means the
managed health care program that is established by the
Secretary of Defense under the authority of chapter 55
of title 10, United States Code, principally section 1097
of such title, and includes the competitive selection of con-
tractors to financially underwrite the delivery of health
care services under the Civilian Health and Medical Pro-
gram of the Uniformed Services.
(c) REPORT ON IMPLEMENTATION.—Not later than
six months after the date of the enactment of this Act,
the Secretary of Defense shall submit to Congress a report
describing the professional educational program imple-
mented pursuant to this section.
SEC. 715. EVALUATION AND REPORT ON TRICARE EFFEC-
TIVENESS.
(a) EVALUATION REQUIRED.—The Secretary of De-
fense shall arrange for an on-going evaluation of the effec-
tiveness of the TRICARE program in meeting the goals
328
of increasing the access of covered beneficiaries under
chapter 55 of title 10, United States Code, to health care
and improving the quality of health care provided to cov-
ered beneficiaries, without increasing the costs incurred by
the Government or covered beneficiaries. The evaluation
shall specifically address the impact of the TRICARE pro-
gram on military retirees with regard to access, costs, and
quality of health care services and identify noncatchment
areas in which the HMO option of the TRICARE program
will be available. The Secretary shall use a federally fund-
ed research and development center to conduct the evalua-
tion required by this section.
(b) ANNUAL REPORT.—Not later than March 1 of
each year, the center conducting the evaluation under sub-
section (a) shall submit to Congress a report describing
the results of the evaluation during the preceding year.
(c) TRICARE PROGRAM DEFINED.—For purposes
of this section, the term ‘‘TRICARE program’’ means the
managed health care program that is established by the
Secretary of Defense under the authority of chapter 55
of title 10, United States Code, principally section 1097
of such title, and includes the competitive selection of con-
tractors to financially underwrite the delivery of health
care services under the Civilian Health and Medical Pro-
gram of the Uniformed Services.
329
Subtitle C—Uniformed Services
Treatment Facilities
SEC. 721. LIMITATION ON EXPENDITURES TO SUPPORT
UNIFORMED SERVICES TREATMENT FACILI-
TIES AND LIMITATION ON NUMBER OF PAR-
TICIPANTS IN USTF MANAGED CARE PLANS.
Subsection (f) of section 1252 of the Department of
Defense Authorization Act, 1984 (42 U.S.C. 248d), is
amended to read as follows:
‘‘(f) LIMITATION ON EXPENDITURES AND PARTICI-
PANTS.—(1) The total amount of expenditures by the Sec-
retary of Defense to carry out this section and section 911
of the Military Construction Authorization Act, 1982 (42
U.S.C. 248c), for fiscal year 1996 may not exceed
$300,000,000, adjusted by the Secretary to reflect the in-
flation factor used by the Department of Defense for such
year.
‘‘(2) During fiscal year 1996, the number of covered
beneficiaries under chapter 55 of title 10, United States
Code (including covered beneficiaries described in section
1086(d)(1) of such title), who are enrolled in managed
care plans offered by facilities described in subsection (a)
and designated under subsection (c) may not exceed the
number of such covered beneficiaries so enrolled as of Oc-
tober 1, 1994.’’.
330
SEC. 722. APPLICATION OF FEDERAL ACQUISITION REGU-
LATION TO PARTICIPATION AGREEMENTS
WITH UNIFORMED SERVICES TREATMENT FA-
CILITIES.
(a) Section 718(c) of the National Defense Author-
ization Act for Fiscal Year 1991 (Public Law 101–510;
104 Stat. 1587) is amended—
(1) in the second sentence of paragraph (1), by
striking out ‘‘A participation agreement’’ and insert-
ing in lieu thereof ‘‘Except as provided in paragraph
(4), a participation agreement’’;
(2) by redesignating paragraph (4) as para-
graph (6); and
(3) by inserting after paragraph (3) the follow-
ing new paragraph:
‘‘(4) APPLICATION
OF
FEDERAL
ACQUISITION
REGULATION.—On and after the date of the enact-
ment of this paragraph, Uniformed Services Treat-
ment Facilities and any participation agreement be-
tween Uniformed Services Treatment Facilities and
the Secretary of Defense shall be subject to the Fed-
eral Acquisition Regulation issued pursuant to sec-
tion 25(c) of the Office of Federal Procurement Pol-
icy Act (41 U.S.C. 421(c)) notwithstanding any pro-
vision to the contrary in such a participation agree-
ment. The requirements regarding competition in
331
the Federal Acquisition Regulation shall apply with
regard to the negotiation of any new participation
agreement between the Uniformed Services Treat-
ment Facilities and the Secretary of Defense under
this subsection or any other provision of law.’’.
(b) SENSE OF CONGRESS.—(1) Congress finds that
the Uniformed Services Treatment Facilities provide qual-
ity health care to the 120,000 Department of Defense
beneficiaries enrolled in the Uniformed Services Family
Health Plan provided by these facilities.
(2) In light of such finding, it is the sense of Con-
gress that the Uniformed Services Family Health Plan
provided by the Uniformed Services Treatment Facilities
should not be terminated for convenience under provisions
of the Federal Acquisition Regulation by the Secretary of
Defense before the expiration of the current participation
agreements.
SEC. 723. DEVELOPMENT OF PLAN FOR INTEGRATING UNI-
FORMED SERVICES TREATMENT FACILITIES
IN MANAGED CARE PROGRAMS OF DEPART-
MENT OF DEFENSE.
Section 718(c) of the National Defense Authorization
Act for Fiscal Year 1991 (Public Law 101–510; 104 Stat.
1587) is amended by inserting after paragraph (4), as
added by section 722, the following new paragraph:
332
‘‘(5) PLAN FOR INTEGRATING FACILITIES.—(A)
Not later than March 1, 1996, the Secretary of De-
fense shall submit to Congress a plan under which
Uniformed Services Treatment Facilities, on or be-
fore September 30, 1997, shall be included in the
exclusive health care provider networks established
by the Secretary for the geographic regions in which
the facilities are located. The Secretary shall address
in the plan the feasibility of implementing the man-
aged care plan of the Uniformed Services Treatment
Facilities, known as Option II, on a mandatory basis
for all USTF Medicare-eligible beneficiaries and the
potential cost savings to the Military Health Care
Program that could be achieved under such option.
‘‘(B) The plan developed under this paragraph
shall be consistent with the requirements specified in
paragraph (4). If the plan is not submitted to Con-
gress by the expiration date of the participation
agreements entered into under this section, the par-
ticipation agreements shall remain in effect, at the
option of the Uniformed Services Treatment Facili-
ties, until the end of the 180-day period beginning
on the date the plan is finally submitted.
‘‘(C) For purposes of this paragraph, the term
‘USTF Medicare-eligible beneficiaries’ means cov-
333
ered beneficiaries under chapter 55 of title 10, Unit-
ed States Code, who are enrolled in a managed
health plan offered by the Uniformed Services Treat-
ment Facilities and entitled to hospital insurance
benefits under part A of title XVIII of the Social Se-
curity Act (42 U.S.C. 1395c et seq.).’’.
SEC. 724. EQUITABLE IMPLEMENTATION OF UNIFORM
COST SHARING REQUIREMENTS FOR UNI-
FORMED SERVICES TREATMENT FACILITIES.
(a) TIME FOR FEE IMPLEMENTATION.—The uniform
managed care benefit fee and copayment schedule devel-
oped by the Secretary of Defense for use in all managed
care initiatives of the military health service system, in-
cluding the managed care program of the Uniformed Serv-
ices Treatment Facilities, shall be extended to the man-
aged care program of a Uniformed Services Treatment
Facility only after the later of—
(1) the implementation of the TRICARE re-
gional program covering the service area of the Uni-
formed Services Treatment Facility; or
(2) the end of the 180-day period beginning on
the date of the enactment of this Act.
(b) SUBMISSION OF ACTUARIAL ESTIMATES.—Para-
graph (2) of subsection (a) shall operate as a condition
on the extension of the uniform managed care benefit fee
334
and copayment schedule to the Uniformed Services Treat-
ment Facilities only if the Uniformed Services Treatment
Facilities submit to the Comptroller General of the United
States, within 30 days after the date of the enactment of
this Act, actuarial estimates in support of their contention
that the extension of such fees and copayments will have
an adverse effect on the operation of the Uniformed Serv-
ices Treatment Facilities and the enrollment of partici-
pants.
(c) EVALUATION.—Except as provided in paragraph
(2), not later than 90 days after the date of the enactment
of this Act, the Comptroller General shall submit to Con-
gress the results of an evaluation of the effect on the Uni-
formed Services Treatment Facilities of the extension of
the uniform benefit fee and copayment schedule to the
Uniformed Services Treatment Facilities. The evaluation
shall include an examination of whether the benefit fee
and copayment schedule may—
(A) cause adverse selection of enrollees;
(B) be inappropriate for a fully at-risk program
similar to civilian health maintenance organizations;
or
(C) result in an enrolled population dissimilar
to the general beneficiary population.
335
(2) The Comptroller General shall not be required to
prepare or submit the evaluation under paragraph (1) if
the Uniformed Services Treatment Facilities fail to satis-
factorily comply with subsection (b), as determined by the
Comptroller General.
Subtitle D—Other Changes to Ex-
isting Laws Regarding Health
Care Management
SEC. 731. MAXIMUM ALLOWABLE PAYMENTS TO INDIVID-
UAL 
HEALTH-CARE 
PROVIDERS 
UNDER
CHAMPUS.
(a) MAXIMUM PAYMENT.—Subsection (h) of section
1079 of title 10, United States Code, is amended by strik-
ing out paragraph (1) and inserting in lieu thereof the
following new paragraph:
‘‘(1) Payment for a charge for services by an individ-
ual health care professional (or other noninstitutional
health care provider) for which a claim is submitted under
a plan contracted for under subsection (a) may not exceed
the lesser of—
‘‘(A) an amount equivalent to the 80th percent-
ile of billed charges made for similar services in the
same locality during a 12-month base period; or
‘‘(B) an amount determined to be appropriate,
to the extent practicable, in accordance with the
336
same reimbursement rules as apply to payments for
similar services under title XVIII of the Social Secu-
rity Act (42 U.S.C. 1395 et seq.).’’.
(b) COMPARISON TO MEDICARE PAYMENTS.—Such
subsection is further amended by adding at the end the
following new paragraph:
‘‘(3) For the purposes of paragraph (1)(B), the ap-
propriate payment amount shall be determined by the Sec-
retary of Defense, in consultation with the other admin-
istering Secretaries.’’.
(c) EXCEPTIONS
AND
LIMITATIONS.—Such sub-
section is further amended by inserting after paragraph
(3), as added by subsection (b), the following new para-
graphs:
‘‘(4) The Secretary of Defense, in consultation with
the other administering Secretaries, shall prescribe regula-
tions to provide for such exceptions to the payment limita-
tions under paragraph (1) as the administering Secretar-
ies determine to be necessary to assure that covered bene-
ficiaries retain adequate access to health care services.
Such exceptions may include the payment of amounts
greater than the amount allowed under paragraph (1)
when enrollees in managed care programs obtain covered
emergency services from nonparticipating providers. To
transition from the payment methods in effect before the
337
date of the enactment of this paragraph to the methodol-
ogy required by paragraph (1), the amount allowable for
any service may not be reduced by more than 15 percent
from the amount allowed for the same service during the
immediately preceding 12-month period (or other period
as established by the Secretary of Defense).
‘‘(5) The Secretary of Defense, in consultation with
the other administering Secretaries, shall prescribe regula-
tions to establish limitations (similar to those limitations
established under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.)) on beneficiary liability for
charges of an individual health care professional (or other
noninstitutional health care provider).’’.
(d) CONFORMING AMENDMENT.—Paragraph (2) of
such subsection is amended by striking out ‘‘paragraph
(1)’’ and inserting in lieu thereof ‘‘paragraph (1)(A)’’.
(e) REPORT
ON EFFECT
OF AMENDMENTS.—Not
later than March 1, 1996, the Secretary of Defense shall
submit to Congress a report analyzing the effect of the
amendments made by this section on the ability or willing-
ness of individual health care professionals and other
noninstitutional health care providers to participate in the
Civilian Health and Medical Program of the Uniformed
Services.
338
SEC. 732. EXPANSION OF EXISTING RESTRICTION ON USE
OF DEFENSE FUNDS FOR ABORTIONS.
(a) INCLUSION OF DEFENSE FACILITIES.—Section
1093 of title 10, United States Code, is amended by in-
serting after ‘‘Department of Defense’’ the following: ‘‘,
and medical treatment facilities or other facilities of the
Department of Defense,’’.
(b) CLERICAL AMENDMENTS.—(1) The heading of
such section is amended by inserting ‘‘or facilities’’
after ‘‘funds’’.
(2) The item relating to such section in the table of
sections at the beginning of chapter 55 of such title is
amended to read as follows:
‘‘1093. Restriction on use of funds or facilities for abortions.’’.
SEC. 733. IDENTIFICATION OF THIRD-PARTY PAYER SITUA-
TIONS.
Section 1095 of title 10, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(k)(1) To improve the administration of this section
and sections 1079(j)(1) and 1086(d) of this title, the Sec-
retary of Defense, in consultation with the other admin-
istering Secretaries, may prescribe regulations to collect
information regarding insurance, medical service, or
health plans of third-party payers held by covered bene-
ficiaries.
340
the purpose of this section and sections 1079(j)(1) and
1086(d) of this title.’’.
SEC. 734. REDESIGNATION OF MILITARY HEALTH CARE AC-
COUNT AS DEFENSE HEALTH PROGRAM AC-
COUNT AND TWO-YEAR AVAILABILITY OF
CERTAIN ACCOUNT FUNDS.
(a) REDESIGNATION.—Section 1100 of title 10, Unit-
ed States Code, is amended—
(1) in subsection (a)(1)—
(A) by striking out ‘‘Military Health Care
Account’’ and inserting in lieu thereof ‘‘Defense
Health Program Account’’; and
(B) by striking out ‘‘the Civilian Health
and Medical Program of the Uniformed Serv-
ices’’ and inserting in lieu thereof ‘‘medical and
health care programs of the Department of De-
fense’’; and
(2) in subsection (b)—
(A) by striking out ‘‘entering into a con-
tract’’ and inserting in lieu thereof ‘‘conducting
programs and activities under this chapter, in-
cluding contracts entered into’’; and
(B) by inserting a comma after ‘‘title’’.
341
(b) TWO YEAR AVAILABILITY OF CERTAIN APPRO-
PRIATIONS.—Subsection (a)(2) of such section is amended
to read as follows:
‘‘(2) Three percent of the funds appropriated annu-
ally for the operation and maintenance of the programs
and activities authorized by this chapter shall remain
available for obligation until the end of the fiscal year fol-
lowing the fiscal year for which the funds were appro-
priated. This paragraph shall not apply for a fiscal year
to the extent that a provision of law specifically refers to
this paragraph and specifies that this paragraph shall not
apply for that fiscal year.’’.
(c) CONFORMING AMENDMENTS.—Such section is
further amended—
(1) by striking out subsections (c), (d), and (f);
and
(2) by redesignating subsection (e) as sub-
section (c).
(d) CLERICAL AMENDMENTS.—(1) The heading of
such section is amended to read as follows:
‘‘§ 1100. Defense Health Program Account’’.
(2) The item relating to such section in the table of
sections at the beginning of chapter 55 of such title is
amended to read as follows:
‘‘1100. Defense Health Program Account.’’.
342
SEC. 735. EXPANSION OF FINANCIAL ASSISTANCE PRO-
GRAM FOR HEALTH-CARE PROFESSIONALS IN
RESERVE COMPONENTS TO INCLUDE DEN-
TAL SPECIALTIES.
Section 16201(b) of title 10, United States Code, is
amended—
(1) in the subsection heading, by inserting
‘‘AND DENTISTS’’ after ‘‘PHYSICIANS’’;
(2) in paragraph (1)(A), by inserting ‘‘or dental
school’’ after ‘‘medical school’’;
(3) in paragraphs (1)(B) and (2)(B), by insert-
ing ‘‘or dental officer’’ after ‘‘medical officer’’; and
(4) in paragraph (1)(C), by striking out ‘‘physi-
cians in a medical specialty’’ and inserting in lieu
thereof ‘‘physicians or dentists in a medical or den-
tal specialty’’.
SEC. 736. ELIMINATION OF UNNECESSARY ANNUAL RE-
PORTING REQUIREMENTS REGARDING MILI-
TARY HEALTH CARE.
Section 1252 of the Department of Defense Author-
ization Act, 1984 (42 U.S.C. 248d), is amended by strik-
ing out subsection (d).
343
Subtitle E—Other Matters
SEC. 741. TERMINATION OF PROGRAM TO TRAIN AND UTI-
LIZE MILITARY PSYCHOLOGISTS TO PRE-
SCRIBE PSYCHOTROPIC MEDICATIONS.
(a) TERMINATION.—Immediately after the date of
the enactment of this Act, the Secretary of Defense shall
terminate the demonstration pilot program for training
and utilizing military psychologists in the prescription of
psychotropic medications, which is referred to in section
8097 of the Department of Defense Appropriations Act,
1991 (Public Law 101–511; 104 Stat. 1897). None of the
funds appropriated to the Department of Defense for a
fiscal year after fiscal year 1995 may be used to train psy-
chologists to be able to prescribe psychotropic medications.
(b) EFFECT ON AUTHORITY TO PRESCRIBE PSYCHO-
TROPIC MEDICATIONS.—Psychologists who participated in
the demonstration pilot training program regarding the
prescription of psychotropic medications shall not be au-
thorized to prescribe such medications despite the comple-
tion of training under the program.
SEC. 742. WAIVER OF COLLECTION OF PAYMENTS DUE
FROM CERTAIN PERSONS UNAWARE OF LOSS
OF CHAMPUS ELIGIBILITY.
(a) AUTHORITY TO WAIVE COLLECTION.—The ad-
ministering Secretaries may waive the collection of pay-
344
ments otherwise due from a person described in subsection
(b) as a result of the receipt by the person of health bene-
fits under section 1086 of title 10, United States Code,
after the termination of the person’s eligibility for such
benefits.
(b) PERSONS ELIGIBLE
FOR WAIVER.—A person
shall be eligible for relief under subsection (a) if the per-
son—
(1) is a person described in paragraph (1) of
subsection (d) of section 1086 of title 10, United
States Code;
(2) in the absence of such paragraph, would
have been eligible for health benefits under such sec-
tion; and
(3) at the time of the receipt of such benefits,
satisfied the criteria specified in subparagraphs (A)
and (B) of paragraph (2) of such subsection.
(c) EXTENT OF WAIVER AUTHORITY.—The authority
to waive the collection of payments pursuant to this sec-
tion shall apply with regard to health benefits provided
under section 1086 of title 10, United States Code, to per-
sons described in subsection (b) during the period begin-
ning on January 1, 1967, and ending on the later of—
(1) the termination date of any special enroll-
ment period provided under title XVIII of the Social
345
Security Act (42 U.S.C. 1395c et seq.) specifically
for such persons; and
(2) July 1, 1996.
(d) DEFINITIONS.—For purposes of this section, the
term ‘‘administering Secretaries’’ has the meaning given
such term in section 1072(3) of title 10, United States
Code.
SEC. 743. NOTIFICATION OF CERTAIN CHAMPUS COVERED
BENEFICIARIES OF LOSS OF CHAMPUS ELIGI-
BILITY.
Section 1086(d) of title 10, United States Code, is
amended by adding at the end the following new para-
graph:
‘‘(4) The administering Secretaries shall develop a
mechanism by which persons described in paragraph (1)
who satisfy only the criteria specified in subparagraphs
(A) and (B) of paragraph (2), but not subparagraph (C)
of such paragraph, are promptly notified of their ineligibil-
ity for health benefits under this section. The administer-
ing Secretaries shall consult with the Secretary of Health
and Human Services and the Health Care Financing Ad-
ministration regarding a method to promptly identify per-
sons requiring notice under this subsection.’’.
346
SEC. 744. DEMONSTRATION PROGRAM TO TRAIN MILITARY
MEDICAL PERSONNEL IN CIVILIAN SHOCK
TRAUMA UNITS.
(a) DEMONSTRATION PROGRAM.—Not later than
April 1, 1996, the Secretary of Defense shall implement
a demonstration program to evaluate the feasibility of pro-
viding shock trauma training for military medical person-
nel through the use of civilian hospitals. Pursuant to an
agreement between the Secretary and one or more public
or nonprofit hospitals, the Secretary shall assign military
medical personnel participating in the demonstration pro-
gram to temporary duty in shock trauma units operated
by the hospitals that are parties to the agreement. As con-
sideration for the services provided by military medical
personnel under the agreement, the agreement shall re-
quire the hospitals to provide appropriate care to members
of the Armed Forces and to other persons whose care in
the hospital would otherwise require reimbursement by the
Secretary. The value of the services provided by the hos-
pitals shall be at least equal to the value of the services
provided by military medical personnel under the agree-
ment.
(b) TERMINATION OF PROGRAM.—The authority of
the Secretary of Defense to conduct the demonstration
program under this section, and any agreement entered
347
into under the demonstration program, shall expire on
March 31, 1998.
(c) REPORT AND EVALUATION OF PROGRAM.—(1)
Not later than March 1 of each year in which the dem-
onstration program is conducted under this section, the
Secretary of Defense shall submit to Congress a report
describing the scope and activities of the demonstration
program during the preceding year.
(2) Not later than May 1, 1998, the Comptroller Gen-
eral of the United States shall submit to Congress a report
evaluating the effectiveness of the demonstration program
in providing shock trauma training for military medical
personnel.
SEC. 745. STUDY REGARDING DEPARTMENT OF DEFENSE
EFFORTS 
TO 
DETERMINE 
APPROPRIATE
FORCE LEVELS OF WARTIME MEDICAL PER-
SONNEL.
(a) STUDY REQUIRED.—The Comptroller General of
the United States shall conduct a study to evaluate the
reasonableness of the models used by each military depart-
ment for determining the appropriate wartime force level
for medical personnel in the department. The study shall
include the following:
(1) An assessment of the modeling techniques
used by each department.
348
(2) An analysis of the data used in the models
to identify medical personnel requirements.
(3) An identification of the ability of the models
to integrate personnel of reserve components to meet
department requirements.
(4) An evaluation of the ability of the Secretary
of Defense to integrate the various modeling efforts
into a comprehensive, coordinated plan for obtaining
the optimum force level for wartime medical person-
nel.
(b) REPORT OF STUDY.—Not later than June 30,
1996, the Comptroller General shall report to Congress
on the results of the study conducted under subsection (a).
SEC. 746. STUDY REGARDING EXPANDED MENTAL HEALTH
SERVICES FOR CERTAIN COVERED BENE-
FICIARIES.
(a) STUDY REQUIRED.—In connection with the men-
tal health services already available for covered bene-
ficiaries under chapter 55 of title 10, United States Code,
who are children and require residential treatment, the
Secretary of Defense shall conduct a study regarding the
feasibility of expanding such services to include a program
of individualized continued care following completion of
the residential treatment to compliment the residential
treatment and prevent recidivism.
349
(b) REPORT OF STUDY.—Not later than March 1,
1996, the Secretary of Defense shall submit to Congress
a report describing the results of the study conducted
under subsection (a).
SEC. 747. REPORT ON IMPROVED ACCESS TO MILITARY
HEALTH CARE FOR COVERED BENEFICIARIES
ENTITLED TO MEDICARE.
Not later than March 1, 1996, the Secretary of De-
fense shall submit to Congress a report evaluating the fea-
sibility, costs, and consequences for the military health
care system of improving access to the system for covered
beneficiaries under chapter 55 of title 10, United States
Code, who have limited access to military medical treat-
ment facilities and are ineligible for the Civilian Health
and Medical Program of the Uniformed Services under
section 1086(d)(1) of such title. The alternatives the Sec-
retary shall consider to improve access for such covered
beneficiaries shall include—
(1) whether CHAMPUS should serve as a sec-
ond payer for covered beneficiaries who are entitled
to hospital insurance benefits under part A of title
XVIII of the Social Security Act (42 U.S.C. 1395c
et seq.); and
(2) whether such covered beneficiaries should be
offered enrollment in the Federal Employees Health
350
Benefits program under chapter 89 of title 5, United
States Code.
SEC. 748. SENSE OF CONGRESS ON CONTINUITY OF
HEALTH 
CARE 
SERVICES 
FOR 
COVERED
BENEFICIARIES ADVERSELY AFFECTED BY
CLOSURES OF MILITARY MEDICAL TREAT-
MENT FACILITIES.
(a) FINDING.—Congress finds the following:
(1) Military installations selected for closure in
the 1991 and 1993 rounds of the base closure proc-
ess are approaching their closing dates.
(2) Additional military installations are being
selected for closure in the 1995 round of the base
closure process.
(3) As a result of these base closures, tens of
thousands of covered beneficiaries under chapter 55
of title 10, United States Code, who reside in the vi-
cinity of affected installations will be left without im-
mediate access to military medical treatment facili-
ties.
(b) SENSE OF CONGRESS.—In light of the findings
specified in subsection (a), it is the sense of Congress that
the Secretary of Defense should take all appropriate steps
necessary to ensure the continuation of medical and phar-
351
maceutical benefits to covered beneficiaries adversely af-
fected by the closure of military installations.
TITLE VIII—ACQUISITION POL-
ICY, ACQUISITION MANAGE-
MENT, AND RELATED MAT-
TERS
Subtitle A—Competition
SEC. 801. COMPETITION PROVISIONS.
(a) CONFERENCE BEFORE SUBMISSION OF BIDS OR
PROPOSALS.—(1) Section 2305(a) of title 10, United
States Code, is amended by adding at the end the follow-
ing paragraph:
‘‘(6) To the extent practicable, for each procurement
of property or services by an agency, the head of the agen-
cy shall provide for a conference on the procurement to
be held for anyone interested in submitting a bid or pro-
posal in response to the solicitation for the procurement.
The purpose of the conference shall be to inform potential
bidders and offerors of the needs of the agency and the
qualifications considered necessary by the agency to com-
pete successfully in the procurement.’’.
(2) Section 303A of the Federal Property and Admin-
istrative Services Act of 1949 (41 U.S.C. 253a) is amend-
ed by adding at the end the following new subsection:
352
‘‘(f) To the extent practicable, for each procurement
of property or services by an agency, an executive agency
shall provide for a conference on the procurement to be
held for anyone interested in submitting a bid or proposal
in response to the solicitation for the procurement. The
purpose of the conference shall be to inform potential bid-
ders and offerors of the needs of the executive agency and
the qualifications considered necessary by the executive
agency to compete successfully in the procurement.’’.
(b) DESCRIPTION OF SOURCE SELECTION PLAN IN
SOLICITATION.—(1) Section 2305(a) of title 10, United
States Code, is further amended in paragraph (2)—
(A) by striking out ‘‘and’’ after the semicolon
at the end of subparagraph (A);
(B) by striking out the period at the end of
subparagraph (B) and inserting in lieu thereof ‘‘;
and’’; and
(C) by adding at the end the following new sub-
paragraph:
‘‘(C) a description, in as much detail as is prac-
ticable, of the source selection plan of the agency, or
a notice that such plan is available upon request.’’.
(2) Section 303A of the Federal Property and Admin-
istrative Services Act of 1949 (41 U.S.C. 253a) is further
amended in subsection (b)—
353
(A) by striking out ‘‘and’’ after the semicolon
at the end of paragraph (1);
(B) by striking out the period at the end of
paragraph (2) and inserting in lieu thereof ‘‘; and’’;
and
(C) by adding at the end the following new
paragraph:
‘‘(3) a description, in as much detail as is prac-
ticable, of the source selection plan of the executive
agency, or a notice that such plan is available upon
request.’’.
(c) DISCUSSIONS NOT NECESSARY WITH EVERY
OFFEROR.—(1) Section 2305(b)(4)(A)(i) of title 10, Unit-
ed States Code, is amended by inserting before the semi-
colon the following: ‘‘and provided that discussions need
not be conducted with an offeror merely to permit that
offeror to submit a technically acceptable revised pro-
posal’’.
(2) Section 303B(d)(1)(A) of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253b)
is amended by inserting before the semicolon the following:
‘‘and provided that discussions need not be conducted with
an offeror merely to permit that offeror to submit a tech-
nically acceptable revised proposal’’.
354
(d) PRELIMINARY ASSESSMENTS OF COMPETITIVE
PROPOSALS.—(1) Section 2305(b)(2) of title 10, United
States Code, is amended by adding at the end the follow-
ing: ‘‘With respect to competitive proposals, the head of
the agency may make a preliminary assessment of a pro-
posal received, rather than a complete evaluation of the
proposal, and may eliminate the proposal from further
consideration if the head of the agency determines the pro-
posal has no chance for contract award.’’.
(2) Section 303B(b) of the Federal Property and Ad-
ministrative Services Act of 1949 (41 U.S.C. 253b(b)) is
amended by adding at the end the following: ‘‘With respect
to competitive proposals, the head of the agency may make
a preliminary assessment of a proposal received, rather
than a complete evaluation of the proposal, and may elimi-
nate the proposal from further consideration if the head
of the agency determines the proposal has no chance for
contract award.’’.
(e) FEDERAL ACQUISITION REGULATION.—The Fed-
eral Acquisition Regulation shall be revised to reflect the
amendments made by subsections (a), (b), (c), and (d).
SEC. 802. PREAWARD DEBRIEFINGS.
(a) 
ARMED
SERVICES
ACQUISITIONS.—Section
2305(b) of title 10, United States Code, is amended—
355
(1) by striking out subparagraph (F) of para-
graph (5);
(2) by redesignating paragraph (6) as para-
graph (8); and
(3) by inserting after paragraph (5) the follow-
ing new paragraphs:
‘‘(6)(A) When the contracting officer excludes
an offeror submitting a competitive proposal from
the competitive range (or otherwise excludes such an
offeror from further consideration prior to the final
source selection decision), the excluded offeror may
request in writing, within three days after the date
on which the excluded offeror receives notice of its
exclusion, a debriefing prior to award. The contract-
ing officer shall make every effort to debrief the un-
successful offeror as soon as practicable and may
refuse the request for a debriefing if it is not in the
best interests of the Government to conduct a de-
briefing at that time.
‘‘(B) The contracting officer is required to de-
brief an excluded offeror in accordance with para-
graph (5) of this section only if that offeror re-
quested and was refused a preaward debriefing
under subparagraph (A) of this paragraph.
356
‘‘(C) The debriefing conducted under this sub-
section shall include—
‘‘(i) the executive agency’s evaluation of
the significant elements in the offeror’s offer;
‘‘(ii) a summary of the rationale for the
offeror’s exclusion; and
‘‘(iii) reasonable responses to relevant
questions posed by the debriefed offeror as to
whether source selection procedures set forth in
the solicitation, applicable regulations, and
other applicable authorities were followed by the
executive agency.
‘‘(D) The debriefing conducted pursuant to this
subsection may not disclose the number or identity
of other offerors and shall not disclose information
about the content, ranking, or evaluation of other
offerors’ proposals.
‘‘(7) The contracting officer shall include a summary
of any debriefing conducted under paragraph (5) or (6)
in the contract file.’’.
(b) CIVILIAN AGENCY ACQUISITIONS.—Section 303B
of the Federal Property and Administrative Services Act
of 1949 (41 U.S.C. 253b) is amended—
(1) by striking out paragraph (6) of subsection
(e);
357
(2) by redesignating subsections (f), (g), (h),
and (i) as subsections (h), (i), (j), and (k), respec-
tively; and
(3) by inserting after subsection (e) the follow-
ing new subsections:
‘‘(f)(1) When the contracting officer excludes an
offeror submitting a competitive proposal from the com-
petitive range (or otherwise excludes such an offeror from
further consideration prior to the final source selection de-
cision), the excluded offeror may request in writing, within
3 days after the date on which the excluded offeror re-
ceives notice of its exclusion, a debriefing prior to award.
The contracting officer shall make every effort to debrief
the unsuccessful offeror as soon as practicable and may
refuse the request for a debriefing if it is not in the best
interests of the Government to conduct a debriefing at
that time.
‘‘(2) The contracting officer is required to debrief an
excluded offeror in accordance with subsection (e) of this
section only if that offeror requested and was refused a
preaward debriefing under paragraph (1) of this sub-
section.
‘‘(3) The debriefing conducted under this subsection
shall include—
358
‘‘(A) the executive agency’s evaluation of the
significant elements in the offeror’s offer;
‘‘(B) a summary of the rationale for the
offeror’s exclusion; and
‘‘(C) reasonable responses to relevant questions
posed by the debriefed offeror as to whether source
selection procedures set forth in the solicitation, ap-
plicable regulations, and other applicable authorities
were followed by the executive agency.
‘‘(4) The debriefing conducted pursuant to this sub-
section may not disclose the number or identity of other
offerors and shall not disclose information about the con-
tent, ranking, or evaluation of other offerors’ proposals.
‘‘(g) The contracting officer shall include a summary
of the any debriefing conducted under subsection (e) or
(f) in the contract file.’’.
SEC. 803. CONTRACT TYPES.
(a) ARMED SERVICES ACQUISITIONS.—(1) Section
2306 of title 10, United States Code, is amended—
(A) by inserting before the period at the end of
subsection (a) the following: ‘‘, based on market con-
ditions, established commercial practice (if any) for
the product or service being acquired, and sound
business judgment’’;
359
(B) by striking out subsections (b), (d), (e), (f),
and (h); and
(C) by redesignating subsection (g) as sub-
section (b).
(2) The heading of such section is amended to read
as follows:
‘‘§ 2306. Contract types’’.
(b) CIVILIAN AGENCY ACQUISITIONS.—(1) Section
304 of the Federal Property and Administrative Services
Act of 1949 (41 U.S.C. 254) is amended—
(A) by inserting before the period at the end of
the first sentence of subsection (a) the following: ‘‘,
based on market conditions, established commercial
practice (if any) for the product or service being ac-
quired, and sound business judgment’’; and
(B) by striking out ‘‘Every contract award’’ in
the second sentence of subsection (a) and all that
follows through the end of the section.
(2) The heading of such section is amended to read
as follows:
‘‘SEC. 304. CONTRACT TYPES.’’.
(c) CONFORMING
REPEALS.—(1) Sections 4540,
7212, and 9540 of title 10, United States Code, are re-
pealed.
360
(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 4540.
(3) The table of sections at the beginning of chapter
631 of such title is amended by striking out the item relat-
ing to section 7212.
(4) The table of sections at the beginning of chapter
933 of such title is amended by striking out the item relat-
ing to section 9540.
(d) CIVIL WORKS AUTHORITY.—(1) Chapter 137 of
title 10, United States Code, is amended by adding at the
end the following new section:
‘‘§ 2332. Contracts for architectural and engineering
services and construction design
‘‘The Secretary of Defense and the Secretaries of the
military departments may enter into contracts for archi-
tectural and engineering services in connection with a mili-
tary construction or family housing project or for other
Department of Defense or military department purposes.
Such contracts shall be awarded in accordance with the
Brooks Architect-Engineers Act (40 U.S.C. 541 et seq.).’’.
(2) The table of sections at the beginning of chapter
137 of such title is amended by adding at the end the
following new item:
‘‘2332. Contracts for architectural and engineering services and construction de-
sign.’’.
361
(3) Section 2855 of such title is repealed. The table
of sections at the beginning of chapter 169 of such title
is amended by striking out the item relating to such sec-
tion.
Subtitle B—Commercial Items
SEC. 811. COMMERCIAL ITEM EXCEPTION TO REQUIRE-
MENT FOR COST OR PRICING DATA AND IN-
FORMATION LIMITATIONS.
(a) ARMED
SERVICES
ACQUISITIONS.—(1) Sub-
sections (b), (c), and (d) of section 2306a of title 10, Unit-
ed States Code, are amended to read as follows:
‘‘(b) EXCEPTIONS.—
‘‘(1) IN GENERAL.—Submission of cost or pric-
ing data shall not be required under subsection (a)
in the case of a contract, a subcontract, or modifica-
tion of a contract or subcontract—
‘‘(A) for which the price agreed upon is
based on—
‘‘(i) adequate price competition; or
‘‘(ii) prices set by law or regulation;
‘‘(B) for the acquisition of a commercial
item; or
‘‘(C) in an exceptional case when the head
of the procuring activity, without delegation, de-
termines that the requirements of this section
362
may be waived and justifies in writing the rea-
sons for such determination.
‘‘(2) MODIFICATIONS OF CONTRACTS AND SUB-
CONTRACTS FOR COMMERCIAL ITEMS.—In the case
of a modification of a contract or subcontract for a
commercial item that is not covered by the exception
on the submission of cost or pricing data in para-
graph (1)(A) or (1)(B), submission of cost or pricing
data shall not be required under subsection (a) if—
‘‘(A) the contract or subcontract being
modified is a contract or subcontract for which
submission of cost or pricing data may not be
required by reason of paragraph (1)(A) or
(1)(B); and
‘‘(B) the modification would not change
the contract or subcontract, as the case may be,
from a contract or subcontract for the acquisi-
tion of a commercial item to a contract or sub-
contract for the acquisition of an item other
than a commercial item.
‘‘(c) AUTHORITY TO REQUIRE COST OR PRICING
DATA ON BELOW-THRESHOLD CONTRACTS.—(1) Subject
to paragraph (2), when certified cost or pricing data are
not required to be submitted by subsection (a) for a con-
tract, subcontract, or modification of a contract or sub-
363
contract, such data may nevertheless be required to be
submitted by the head of the procuring activity, but only
if the head of the procuring activity determines that such
data are necessary for the evaluation by the agency of the
reasonableness of the price of the contract, subcontract,
or modification of a contract or subcontract. In any case
in which the head of the procuring activity requires such
data to be submitted under this subsection, the head of
the procuring activity shall justify in writing the reason
for such requirement.
‘‘(2) The head of the procuring activity may not re-
quire certified cost or pricing data to be submitted under
this paragraph for any contract or subcontract, or modi-
fication of a contract or subcontract, covered by the excep-
tions in subparagraph (A) or (B) of subsection (b)(1).
‘‘(3) The head of a procuring activity may not dele-
gate functions under this paragraph.
‘‘(d) LIMITATIONS ON OTHER INFORMATION.—The
Federal Acquisition Regulation shall include the following:
‘‘(1) Provisions concerning the types of infor-
mation that contracting officers may consider in de-
termining whether the price of a procurement to the
Government is fair and reasonable when certified
cost or pricing data are not required to be submitted
under this section, including appropriate information
364
on the prices at which the same item or similar
items have previously been sold that is adequate for
evaluating the reasonableness of the price of the pro-
posed contract or subcontract for the procurement.
‘‘(2) Reasonable limitations on requests for
sales data relating to commercial items.
‘‘(3) A requirement that a contracting officer
shall, to the maximum extent practicable, limit the
scope of any request for information relating to com-
mercial items from an offeror to only that informa-
tion that is in the form regularly maintained by the
offeror in commercial operations.
‘‘(4) A statement that any information received
relating to commercial items that is exempt from
disclosure under section 552(b) of title 5 shall not
be disclosed by the Federal Government.’’.
(2) Section 2306a of such title is further amended—
(A) by striking out subsection (h); and
(B) by redesignating subsection (i) as sub-
section (h).
(3) Section 2375 of title 10, United States Code, is
amended by striking out subsection (c).
(b) CIVILIAN
AGENCY
ACQUISITIONS.—(1) Sub-
sections (b), (c) and (d) of section 304A of the Federal
365
Property and Administrative Services Act of 1949 (41
U.S.C. 254b) are amended to read as follows:
‘‘(b) EXCEPTIONS.—
‘‘(1) IN GENERAL.—Submission of cost or pric-
ing data shall not be required under subsection (a)
in the case of a contract, a subcontract, or a modi-
fication of a contract or subcontract—
‘‘(A) for which the price agreed upon is
based on—
‘‘(i) adequate price competition; or
‘‘(ii) prices set by law or regulation;
‘‘(B) for the acquisition of a commercial
item; or
‘‘(C) in an exceptional case when the head
of the procuring activity, without delegation, de-
termines that the requirements of this section
may be waived and justifies in writing the rea-
sons for such determination.
‘‘(2) MODIFICATIONS OF CONTRACTS AND SUB-
CONTRACTS FOR COMMERCIAL ITEMS.—In the case
of a modification of a contract or subcontract for a
commercial item that is not covered by the exception
on the submission of cost or pricing data in para-
graph (1)(A) or (1)(B), submission of cost or pricing
data shall not be required under subsection (a) if—
366
‘‘(A) the contract or subcontract being
modified is a contract or subcontract for which
submission of cost or pricing data may not be
required by reason of paragraph (1)(A) or
(1)(B); and
‘‘(B) the modification would not change
the contract or subcontract, as the case may be,
from a contract or subcontract for the acquisi-
tion of a commercial item to a contract or sub-
contract for the acquisition of an item other
than a commercial item.
‘‘(c) AUTHORITY TO REQUIRE COST OR PRICING
DATA ON BELOW-THRESHOLD CONTRACTS.—(1) Subject
to paragraph (2), when certified cost or pricing data are
not required to be submitted by subsection (a) for a con-
tract, subcontract, or modification of a contract or sub-
contract, such data may nevertheless be required to be
submitted by the head of the procuring activity, but only
if the head of the procuring activity determines that such
data are necessary for the evaluation by the agency of the
reasonableness of the price of the contract, subcontract,
or modification of a contract or subcontract. In any case
in which the head of the procuring activity requires such
data to be submitted under this subsection, the head of
367
the procuring activity shall justify in writing the reason
for such requirement.
‘‘(2) The head of the procuring activity may not re-
quire certified cost or pricing data to be submitted under
this paragraph for any contract or subcontract, or modi-
fication of a contract or subcontract, covered by the excep-
tions in subparagraph (A) or (B) of subsection (b)(1).
‘‘(3) The head of a procuring activity may not dele-
gate the functions under this paragraph.
‘‘(d) LIMITATIONS ON OTHER INFORMATION.—The
Federal Acquisition Regulation shall include the following:
‘‘(1) Provisions concerning the types of infor-
mation that contracting officers may consider in de-
termining whether the price of a procurement to the
Government is fair and reasonable when certified
cost or pricing data are not required to be submitted
under this section, including appropriate information
on the prices at which the same item or similar
items have previously been sold that is adequate for
evaluating the reasonableness of the price of the pro-
posed contract or subcontract for the procurement.
‘‘(2) Reasonable limitations on requests for
sales data relating to commercial items.
‘‘(3) A requirement that a contracting officer
shall, to the maximum extent practicable, limit the
368
scope of any request for information relating to com-
mercial items from an offeror to only that informa-
tion that is in the form regularly maintained by the
offeror in commercial operations.
‘‘(4) A statement that any information received
relating to commercial items that is exempt from
disclosure under section 552(b) of title 5 shall not
be disclosed by the Federal Government.’’.
(2) Section 304A of such Act is further amended—
(A) by striking out subsection (h); and
(B) by redesignating subsection (i) as sub-
section (h).
SEC. 812. APPLICATION OF SIMPLIFIED PROCEDURES TO
COMMERCIAL ITEMS.
(a) 
ARMED
SERVICES
ACQUISITIONS.—Section
2304(e) of title 10, United States Code, as added by sec-
tion 801(a), is amended—
(1) in paragraph (1), by inserting after ‘‘special
simplified procedures’’ the following: ‘‘for purchases
of commercial items and’’; and
(2) by adding at the end the following new
paragraph:
‘‘(4) The Federal Acquisition Regulation shall pro-
vide that, in the case of a purchase of commercial items
in an amount greater than the simplified acquisition
369
threshold, the head of an agency may not conduct the pur-
chase on a sole source basis unless the need to do so is
justified in writing and approved in accordance with the
Federal Acquisition Regulation.
(b) 
CIVILIAN
AGENCY
ACQUISITIONS.—Section
303(e) of the Federal Property and Administrative Serv-
ices Act of 1949 (41 U.S.C. 253), as added by section
801(b), is amended—
(1) in paragraph (1), by inserting after ‘‘special
simplified procedures’’ the following: ‘‘for purchases
of commercial items and’’; and
(2) by adding at the end the following new
paragraph:
‘‘(5) The Federal Acquisition Regulation shall pro-
vide that, in the case of a purchase of commercial items
in an amount greater than the simplified acquisition
threshold, an executive agency may not conduct the pur-
chase on a sole source basis unless the need to do so is
justified in writing and approved in accordance with the
Federal Acquisition Regulation.’’.
(c) SIMPLIFIED NOTICE.—Section 18 of the Office
of Federal Procurement Policy Act (41 U.S.C. 416) is
amended in subsection (a)(5) (as redesignated by section
801(d))—
(1) by striking out ‘‘limited’’; and
370
(2) by inserting before ‘‘submission’’ the follow-
ing: ‘‘issuance of solicitations and the’’.
SEC. 813. AMENDMENT TO DEFINITION OF COMMERCIAL
ITEMS.
Section 4(12)(F) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 403(12)(F)) is amended by
striking out ‘‘catalog’’.
SEC. 814. INAPPLICABILITY OF COST ACCOUNTING STAND-
ARDS TO CONTRACTS AND SUBCONTRACTS
FOR COMMERCIAL ITEMS.
Subparagraph (B) of section 26(f)(2) of the Office
of Federal Procurement Policy Act (41 U.S.C. 422(f)(2))
is amended—
(1) by striking out clause (i) and inserting in
lieu thereof the following:
‘‘(i) Contracts or subcontracts for the acquisi-
tion of commercial items.’’; and
(2) by striking out clause (iii).
Subtitle C—Additional Reform
Provisions
SEC. 821. REPEALS OF CERTAIN PROCUREMENT PROVI-
SIONS.
(a) POST-EMPLOYMENT
RESTRICTIONS.—Sections
2397, 2397a, 2397b, and 2397c of title 10, United States
Code, are repealed.
371
(b) LIMITATION ON EXPENDITURE OF APPROPRIA-
TIONS.—Section 2207 of such title is repealed.
(c) CERTAIN
DELEGATION
AUTHORITY.—Section
2356 of such title is repealed.
(d) SPARE PARTS CONTROL.—Section 2383 of such
title is repealed.
(e) CLERICAL AMENDMENTS.—(1) The table of sec-
tions at the beginning of chapter 131 of title 10, United
States Code, is amended by striking out the item relating
to section 2207.
(2) The table of sections at the beginning of chapter
139 of such title is amended by striking out the item relat-
ing to section 2356.
(3) The table of sections at the beginning of chapter
141 of title 10, United States Code, is amended by strik-
ing out the items relating to sections 2383, 2397, 2397a,
2397b, and 2397c.
SEC. 822. FEES FOR CERTAIN TESTING SERVICES.
Section 2539b(c) of title 10, United States Code, is
amended by inserting ‘‘and indirect’’ after ‘‘recoup the di-
rect’’.
SEC. 823. TESTING OF DEFENSE ACQUISITION PROGRAMS.
(a) IN GENERAL.—Section 2366 to title 10, United
States Code, is amended—
372
(1) by striking out ‘‘survivability’’ each place it
appears (including in the section heading) and in-
serting in lieu thereof ‘‘vulnerability’’; and
(2) in subsection (b)—
(A) by striking out ‘‘Survivability’’ and in-
serting in lieu thereof ‘‘Vulnerability’’; and
(B) by inserting after paragraph (2) the
following new paragraph:
‘‘(3) Testing should begin at the component, sub-
system, and subassembly level, culminating with tests of
the complete system configured for combat.’’.
(b) CLERICAL AMENDMENT.—The item relating to
such section in the table of sections at the beginning of
chapter 139 of such title is amended to read as follows:
‘‘2366. Major systems and munitions programs: vulnerability testing and
lethality testing required before full-scale production.’’.
SEC. 824. COORDINATION AND COMMUNICATION OF DE-
FENSE RESEARCH ACTIVITIES.
Section 2364 of title 10, United States Code, is
amended—
(1) in subsection (b)(5), by striking out ‘‘mile-
stone O, milestone I, and milestone II’’ and insert-
ing in lieu thereof ‘‘acquisition program’’; and
(2) in subsection (c), by striking out para-
graphs (2), (3), and (4) and inserting in lieu thereof
the following:
373
‘‘(2) The term ‘acquisition program decisions’
has the meaning prescribed by the Secretary of De-
fense in regulations.’’.
SEC. 825. ADDITION OF CERTAIN ITEMS TO DOMESTIC
SOURCE LIMITATION.
(a) LIMITATION.—(1) Paragraph (3) of section
2534(a) of title 10, United States Code, is amended to
read as follows:
‘‘(3) VESSEL COMPONENTS FOR ALL BRANCHES
OF THE ARMED FORCES.—(A) The following compo-
nents of vessels:
‘‘(i) Air circuit breakers.
‘‘(ii) Vessel propellers with a diameter of
six feet or more, if the propellers incorporate
only castings poured and finished in the United
States.
‘‘(iii) Welded shipboard anchor and moor-
ing chain with a diameter of four inches or less.
‘‘(B) The following components of vessels, to
the extent they are unique to marine applications:
cable assemblies, hose assemblies, hydraulics and
pumps 
for 
steering, 
gyrocompasses, 
marine
autopilots, electronic navigation chart systems, navi-
gators, attitude and heading reference units, power
supplies, radars, steering controls, pumps, engines,
374
turbines, reduction gears, motors, refrigeration sys-
tems, generators, propulsion and machinery control
systems, and totally enclosed lifeboards, including
associated davits and winches.’’.
(2) Section 2534 of such title is amended by adding
at the end the following new subsection:
‘‘(h) IMPLEMENTATION OF MARINE VESSEL COMPO-
NENT
LIMITATION.—In 
implementing 
subsection
(a)(3)(B), the Secretary of Defense—
‘‘(1) may not use contract clauses or certifi-
cations; and
‘‘(2) shall use management and oversight tech-
niques that achieve the objective of the subsection
without imposing a significant management burden
on the Government or the contractor involved.’’.
(b) EXTENSION OF LIMITATION RELATING TO BALL
BEARINGS AND ROLLER BEARINGS.—Section 2534(c)(3)
of such title is amended by striking out ‘‘October 1, 1995’’
and inserting in lieu thereof ‘‘October 1, 2000’’.
(c) INAPPLICABILITY OF SIMPLIFIED ACQUISITION
LIMITATION TO CONTRACTS FOR BALL BEARINGS AND
ROLLER BEARINGS.—Section 2534(g) of title 10, United
States Code, is amended—
(1) by inserting ‘‘(1)’’ before ‘‘This section’’;
and
375
(2) by adding at the end the following new
paragraph:
‘‘(2) Paragraph (1) does not apply to contracts for
items described in subsection (a)(5) (relating to ball bear-
ings and roller bearings), notwithstanding section 33 of
the Office of Federal Procurement Policy Act (41 U.S.C.
429).’’.
SEC. 826. REVISIONS TO PROCUREMENT NOTICE PROVI-
SIONS.
Section 18(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 416(a)) is amended—
(1) in subparagraph (B) of paragraph (1)—
(A) by striking out ‘‘subsection (f)—’’ and
all that follows through the end of the subpara-
graph and inserting in lieu thereof ‘‘subsection
(b); and’’; and
(B) by inserting after ‘‘property or serv-
ices’’ the following: ‘‘for a price expected to ex-
ceed $10,000 but not to exceed $25,000’’;
(2) by striking out paragraph (4); and
(3) by redesignating paragraphs (5) and (6) as
paragraphs (4) and (5), respectively.
376
SEC. 827. ENCOURAGEMENT OF USE OF LEASING AUTHOR-
ITY.
(a) IN GENERAL.—(1) Chapter 137 of title 10, Unit-
ed States Code, is amended by inserting after section 2316
the following new section:
‘‘§ 2317. Equipment leasing
‘‘The Secretary of Defense shall authorize and en-
courage the use of leasing in the acquisition of equipment
whenever such leasing is practicable and otherwise author-
ized by law.’’.
(2) The table of sections at the beginning of such
chapter is amended by adding at the end the following
new item:
‘‘2317. Equipment leasing.’’.
(b) REPORT.—Not later than 90 days after the date
of the enactment of this Act, the Secretary of Defense
shall submit to Congress a report setting forth changes
in legislation that would be required in order to facilitate
the use of leases by the Department of Defense in the
acquisition of equipment.
SEC. 828. GOVERNMENT RELIANCE ON THE PRIVATE SEC-
TOR.
(a) GOVERNMENT RELIANCE ON THE PRIVATE SEC-
TOR.—The Office of Federal Procurement Policy Act (41
U.S.C. 401 et seq.) is amended by inserting after section
16 the following new section:
377
‘‘SEC. 17. GOVERNMENT RELIANCE ON THE PRIVATE SEC-
TOR.
‘‘It is the policy of the Federal Government to rely
on the private sector to supply the products and services
the Federal Government needs.’’.
(b) CLERICAL AMENDMENT.—The table of contents
for the Office of Federal Procurement Policy Act (con-
tained in section 1(b)) is amended by inserting after the
item relating to section 16 the following new item:
‘‘Sec. 17. Government reliance on the private sector.’’.
SEC. 829. ELIMINATION OF CERTAIN CERTIFICATION RE-
QUIREMENTS.
(a) ELIMINATION OF CERTAIN STATUTORY CERTIFI-
CATION REQUIREMENTS.—(1)(A) Section 2410 of title 10,
United States Code, is amended—
(i) in the heading, by striking out ‘‘: certifi-
cation’’; and
(ii) in subsection (a)—
(I) in the heading, by striking out ‘‘CER-
TIFICATION’’;
(II) by striking out ‘‘unless’’ and all that
follows through ‘‘that—’’ and inserting in lieu
thereof ‘‘unless—’’; and
(III) in paragraph (2), by striking out ‘‘to
the best of that person’s knowledge and belief’’.
378
(B) The item relating to section 2410 in the table
of sections at the beginning of chapter 141 of such title
is amended to read as follows:
‘‘Sec. 2410. Requests for equitable adjustment or other relief.’’.
(2) Section 2410b of title 10, United States Code,
is amended in paragraph (2) by striking out ‘‘certification
and’’.
(3) Section 1352(b)(2) of title 31, United States
Code, is amended—
(A) by striking out subparagraph (C); and
(B) by inserting ‘‘and’’ after the semicolon at
the end of subparagraph (A).
(4) Section 5152 of the Drug-Free Workplace Act of
1988 (41 U.S.C. 701) is amended—
(A) in subsection (a)(1), by striking out ‘‘has
certified to the contracting agency that it will’’ and
inserting in lieu thereof ‘‘agrees to’’;
(B) in subsection (a)(2), by striking out ‘‘con-
tract includes a certification by the individual’’ and
inserting in lieu thereof ‘‘individual agrees’’; and
(C) in subsection (b)(1)—
(i) by striking out subparagraph (A);
(ii) by redesignating subparagraph (B) as
subparagraph (A) and in that subparagraph by
striking out ‘‘such certification by failing to
carry out’’; and
379
(iii) by redesignating subparagraph (C) as
subparagraph (B).
(b) ELIMINATION OF CERTAIN REGULATORY CER-
TIFICATION REQUIREMENTS.—
(1) 
CURRENT
CERTIFICATION
REQUIRE-
MENTS.—Not later than 210 days after the date of
the enactment of this Act, any certification required
of contractors or offerors by the Federal Acquisition
Regulation or an executive agency procurement reg-
ulation that is not specifically imposed by statute
shall be removed by the Administrator for Federal
Procurement Policy from the Federal Acquisition
Regulation or such agency regulation unless—
(A) written justification for such certifi-
cation is provided to the Administrator (i) by
the Federal Acquisition Regulatory Council (in
the case of a certification in the Federal Acqui-
sition Regulation), or (ii) by the head of an ex-
ecutive agency (in the case of a certification in
an executive agency procurement regulation);
and
(B) the Administrator approves in writing
the retention of such certification.
380
(2) FUTURE CERTIFICATION REQUIREMENTS.—
(A) Section 29 of the Office of Federal Procurement
Policy Act (41 U.S.C. 425) is amended—
(i) by amending the heading to read as fol-
lows:
‘‘SEC. 22. CONTRACT CLAUSES AND CERTIFICATIONS.’’;
(ii) by inserting ‘‘(a) NONSTANDARD CON-
TRACT CLAUSES.—’’ before ‘‘The Federal Ac-
quisition’’; and
(iii) by adding at the end the following new
subsection:
‘‘(b) PROHIBITION
ON CERTIFICATION REQUIRE-
MENTS.—A requirement for a certification by a contractor
or offeror may not be included in the Federal Acquisition
Regulation or an executive agency procurement regulation
unless—
‘‘(1) the certification is specifically imposed by
statute; or
‘‘(2) written justification for such certification
is provided to the Administrator for Federal Pro-
curement Policy (A) by the Federal Acquisition Reg-
ulatory Council (in the case of a certification in the
Federal Acquisition Regulation), or (B) the head of
an executive agency (in the case of a certification in
an executive agency procurement regulation), and
381
the Administrator approves in writing the inclusion
of such certification.’’.
(B) The item relating to section 29 in the table of
contents for the Office of Federal Procurement Policy Act
(contained in section 1(b)) (41 U.S.C. 401 note) is amend-
ed to read as follows:
‘‘Sec. 29. Contract clauses and certifications.’’.
SEC. 830. AMENDMENT TO COMMENCEMENT AND EXPIRA-
TION OF AUTHORITY TO CONDUCT CERTAIN
TESTS OF PROCUREMENT PROCEDURES.
Subsection (j) of section 5061 of the Federal Acquisi-
tion Streamlining Act of 1994 (41 U.S.C. 413 note) is
amended to read as follows:
‘‘(j) COMMENCEMENT AND EXPIRATION OF AUTHOR-
ITY.—The authority to conduct a test under subsection
(a) in an agency and to award contracts under such a test
shall take effect on August 1, 1995, and shall expire on
August 1, 2000. Contracts entered into before such au-
thority expires in an agency pursuant to a test shall re-
main in effect, notwithstanding the expiration of the au-
thority to conduct the test under this section.’’.
SEC. 831. PROCUREMENT INTEGRITY.
(a) AMENDMENT OF PROCUREMENT INTEGRITY PRO-
VISION.—Section 27 of the Office of Federal Procurement
Policy Act (41 U.S.C. 423) is amended to read as follows:
382
‘‘SEC. 27. RESTRICTIONS ON DISCLOSING AND OBTAINING
CONTRACTOR BID OR PROPOSAL INFORMA-
TION OR SOURCE SELECTION INFORMATION.
‘‘(a) PROHIBITION ON DISCLOSING PROCUREMENT
INFORMATION.—(1) A person described in paragraph (2)
shall not, other than as provided by law, knowingly dis-
close contractor bid or proposal information or source se-
lection information before the award of a Federal agency
procurement contract to which the information relates.
‘‘(2) Paragraph (1) applies to any person who—
‘‘(A) is a present or former officer or employee
of the United States, or a person who is acting or
has acted for or on behalf of, or who is advising or
has advised the United States with respect to, a
Federal agency procurement; and
‘‘(B) by virtue of that office, employment, or re-
lationship has or had access to contractor bid or pro-
posal information or source selection information.
‘‘(b) PROHIBITION
ON OBTAINING PROCUREMENT
INFORMATION.—A person shall not, other than as pro-
vided by law, knowingly obtain contractor bid or proposal
information or source selection information before the
award of a Federal agency procurement contract to which
the information relates.
‘‘(c) PROHIBITION ON DISCLOSING OR OBTAINING
PROCUREMENT INFORMATION IN CONNECTION WITH A
383
PROTEST.—(1) A person shall not, other than as provided
by law, knowingly violate the terms of a protective order
described in paragraph (2) by disclosing or obtaining con-
tractor bid or proposal information or source selection in-
formation related to the procurement contract concerned.
‘‘(2) Paragraph (1) applies to any protective order
issued by the the United States Board of Contract Appeals
in connection with a protest against the award or proposed
award of a Federal agency procurement contract.
‘‘(d) PENALTIES AND ADMINISTRATIVE ACTIONS.—
‘‘(1) CRIMINAL PENALTIES.—
‘‘(A) Whoever engages in conduct con-
stituting an offense under subsection (a), (b),
or (c) shall be imprisoned for not more than
one year or fined as provided under title 18,
United States Code, or both.
‘‘(B) Whoever engages in conduct con-
stituting an offense under subsection (a), (b),
or (c) for the purpose of either—
‘‘(i) exchanging the information cov-
ered by such subsection for anything of
value, or
‘‘(ii) obtaining or giving anyone a
competitive advantage in the award of a
Federal agency procurement contract,
384
shall be imprisoned for not more than 15 years
or fined as provided under title 18, United
States Code, or both.
‘‘(2) CIVIL PENALTIES.—The Attorney General
may bring a civil action in the appropriate United
States district court against any person who engages
in conduct constituting an offense under subsection
(a), (b), or (c). Upon proof of such conduct by a
preponderance of the evidence, the person is subject
to a civil penalty. An individual who engages in such
conduct is subject to a civil penalty of not more than
$50,000 for each violation plus twice the amount of
compensation which the individual received or of-
fered for the prohibited conduct. An organization
that engages in such conduct is subject to a civil
penalty of not more than $500,000 for each violation
plus twice the amount of compensation which the or-
ganization received or offered for the prohibited con-
duct.
‘‘(3) ADMINISTRATIVE ACTIONS.—(A) If a Fed-
eral agency receives information that a contractor or
a person has engaged in conduct constituting an of-
fense under subsection (a), (b), or (c), the Federal
agency shall consider taking one or more of the fol-
lowing actions, as appropriate:
385
‘‘(i) Cancellation of the Federal agency
procurement, if a contract has not yet been
awarded.
‘‘(ii) Rescission of a contract with respect
to which—
‘‘(I) the contractor or someone acting
for the contractor has been convicted for
an offense under subsection (a), (b), or (c),
or
‘‘(II) the head of the agency that
awarded the contract has determined,
based upon a preponderance of the evi-
dence, that the contractor or someone act-
ing for the contractor has engaged in con-
duct constituting such an offense.
‘‘(iii) Initiation of suspension or debarment
proceedings for the protection of the Govern-
ment in accordance with procedures in the Fed-
eral Acquisition Regulation.
‘‘(iv) Initiation of adverse personnel action,
pursuant to the procedures in chapter 75 of
title 5, United States Code, or other applicable
law or regulation.
‘‘(B) If a Federal agency rescinds a contract
pursuant to subparagraph (A)(ii), the United States
386
is entitled to recover, in addition to any penalty pre-
scribed by law, the amount expended under the con-
tract.
‘‘(C) For purposes of any suspension or debar-
ment proceedings initiated pursuant to subpara-
graph (A)(iii), engaging in conduct constituting an
offense under subsection (a), (b), or (c) affects the
present responsibility of a Government contractor or
subcontractor.
‘‘(e) DEFINITIONS.—As used in this section:
‘‘(1) The term ‘contractor bid or proposal infor-
mation’ means any of the following information sub-
mitted to a Federal agency as part of or in connec-
tion with a bid or proposal to enter into a Federal
agency procurement contract, if that information has
not been previously made available to the public or
disclosed publicly:
‘‘(A) Cost or pricing data (as defined by
section 2306a(h) of title 10, United States
Code, with respect to procurements subject to
that section, and section 304A(h) of Federal
Property and Administrative Services Act of
1949 (41 U.S.C. 254b(h), with respect to pro-
curements subject to that section).
‘‘(B) Indirect costs and direct labor rates.
387
‘‘(C) Proprietary information about manu-
facturing processes, operations, or techniques
marked by the contractor in accordance with
applicable law or regulation.
‘‘(D) Information marked by the contrac-
tor as ‘contractor bid or proposal information’,
in accordance with applicable law or regulation.
‘‘(2) The term ‘source selection information’
means any of the following information prepared for
use by a Federal agency for the purpose of evaluat-
ing a bid or proposal to enter into a Federal agency
procurement contract, if that information has not
been previously made available to the public or dis-
closed publicly:
‘‘(A) Bid prices submitted in response to a
Federal agency solicitation for sealed bids, or
lists of those bid prices before public bid open-
ing.
‘‘(B) Proposed costs or prices submitted in
response to a Federal agency solicitation, or
lists of those proposed costs or prices.
‘‘(C) Source selection plans.
‘‘(D) Technical evaluation plans.
‘‘(E) Technical evaluations of proposals.
388
‘‘(F) Cost or price evaluations of propos-
als.
‘‘(G) Competitive range determinations
that identify proposals that have a reasonable
chance of being selected for award of a con-
tract.
‘‘(H) Rankings of bids, proposals, or com-
petitors.
‘‘(I) The reports and evaluations of source
selection panels, boards, or advisory councils.
‘‘(J) Other information marked as ‘source
selection information’ based on a case-by-case
determination by the head of the agency, his
designee, or the contracting officer that its dis-
closure would jeopardize the integrity or suc-
cessful completion of the Federal agency pro-
curement to which the information relates.
‘‘(3) The term ‘Federal agency’ has the mean-
ing provided such term in section 3 of the Federal
Property and Administrative Services Act of 1949
(40 U.S.C. 472).
‘‘(4) The term ‘Federal agency procurement’
means the acquisition (by using competitive proce-
dures and awarding a contract) of goods or services
389
(including construction) from non-Federal sources
by a Federal agency using appropriated funds.
‘‘(5) The term ‘contracting officer’ means a
person who, by appointment in accordance with ap-
plicable regulations, has the authority to enter into
a Federal agency procurement contract on behalf of
the Government and to make determinations and
findings with respect to such a contract.
‘‘(6) The term ‘protest’ means a written objec-
tion by an interested party to the award or proposed
award of a Federal agency procurement contract,
pursuant to title IV of the Federal Acquisition Re-
form Act of 1995.
‘‘(f) LIMITATION ON PROTESTS.—No person may file
a protest against the award or proposed award of a Fed-
eral agency procurement contract alleging an offense
under subsection (a), (b), or (c), of this section, nor may
the United States Board of Contract Appeals consider
such an allegation in deciding a protest, unless that person
reported to the Federal agency responsible for the pro-
curement information that the person believed constituted
evidence of the offense no later than 14 days after the
person first discovered the possible offense.
‘‘(g) SAVINGS PROVISIONS.—This section does not—
390
‘‘(1) restrict the disclosure of information to, or
its receipt by, any person or class of persons author-
ized, in accordance with applicable agency regula-
tions or procedures, to receive that information;
‘‘(2) restrict a contractor from disclosing its
own bid or proposal information or the recipient
from receiving that information;
‘‘(3) restrict the disclosure or receipt of infor-
mation relating to a Federal agency procurement
after it has been canceled by the Federal agency be-
fore contract award unless the Federal agency plans
to resume the procurement;
‘‘(4) prohibit individual meetings between a
Federal agency employee and an offeror or potential
offeror for, or a recipient of, a contract or sub-
contract under a Federal agency procurement, pro-
vided that unauthorized disclosure or receipt of con-
tractor bid or proposal information or source selec-
tion information does not occur;
‘‘(5) authorize the withholding of information
from, nor restrict its receipt by, Congress, a commit-
tee or subcommittee of Congress, the Comptroller
General, a Federal agency, or an inspector general
of a Federal agency;
391
‘‘(6) authorize the withholding of information
from, nor restrict its receipt by, any board of con-
tract appeals of a Federal agency or the Comptroller
General in the course of a protest against the award
or proposed award of a Federal agency procurement
contract; or
‘‘(7) limit the applicability of any requirements,
sanctions, contract penalties, and remedies estab-
lished under any other law or regulation.’’.
(b) REPEALS.—The following provisions of law are
repealed:
(1) Sections 2397, 2397a, 2397b, and 2397c of
title 10, United States Code.
(2) Section 33 of the Federal Energy Adminis-
tration Act of 1974 (15 U.S.C. 789).
(3) Section 281 of title 18, United States Code.
(4) Subsection (c) of section 32 of the Office of
Federal Procurement Policy Act (41 U.S.C. 428).
(5) The first section 19 of the Federal Non-
nuclear Energy Research and Development Act of
1974 (42 U.S.C. 5918).
(c) CLERICAL AMENDMENTS.—
(1) The table of sections at the beginning of
chapter 141 of title 10, United States Code, is
392
amended by striking out the items relating to sec-
tions 2397, 2397a, 2397b, and 2397c.
(2) The table of sections at the beginning of
chapter 15 of title 18, United States Code, is
amended by striking out the item relating to section
281.
(3) Section 32 of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 428) is amended by re-
designating subsections (d), (e), (f), and (g) as sub-
sections (c), (d), (e), and (f), respectively.
SEC. 832. FURTHER ACQUISITION STREAMLINING PROVI-
SIONS.
(a) PURPOSE OF OFFICE OF FEDERAL PROCURE-
MENT POLICY.—(1) Section 5(a) of the Office of Federal
Procurement Policy Act (41 U.S.C. 404) is amended to
read as follows:
‘‘(a) To promote economy, efficiency, and effective-
ness in the procurement of property and services by the
executive branch of the Federal Government, there shall
be an Office of Federal Procurement Policy (hereinafter
referred to as the ‘Office’) in the Office of Management
and Budget to provide overall direction of Government-
wide procurement policies, regulations, procedures, and
forms for executive agencies.’’.
393
(2) Sections 2 and 3 of such Act (41 U.S.C. 401 and
402) are repealed.
(b) REPEAL OF REPORT REQUIREMENT.—Section 8
of the Office of Federal Procurement Policy Act (41
U.S.C. 407) is repealed.
(c) REPEAL OF OBSOLETE PROVISIONS.—(1) Sec-
tions 10 and 11 of the Office of Federal Procurement Pol-
icy Act (41 U.S.C. 409 and 410) are repealed.
(d) CLERICAL AMENDMENTS.—The table of contents
for the Office of Federal Procurement Policy Act (con-
tained in section 1(b)) is amended by striking out the
items relating to sections 2, 3, 8, 10, and 11.
SEC. 833. JUSTIFICATION OF MAJOR DEFENSE ACQUISI-
TION PROGRAMS NOT MEETING GOALS.
Section 2220(b) of title 10, United States Code, is
amended by adding at the end the following: ‘‘In addition,
the Secretary shall include in such annual report a jus-
tification for the continuation of any program that—
‘‘(1) is more than 50 percent over the cost goal
established for the development, procurement, or
operational phase of the program;
‘‘(2) fails to achieve at least 50 percent of the
performance capability goals established for the de-
velopment, procurement, or operational phase of the
program; or
394
‘‘(3) is more than 50 percent behind schedule,
as determined in accordance with the schedule goal
established for the development, procurement, or
operational phase of the program.’’.
SEC. 834. ENHANCED PERFORMANCE INCENTIVES FOR AC-
QUISITION WORKFORCE.
(a) ARMED SERVICES ACQUISITIONS.—Subsection
(b) of section 5001 of the Federal Acquisition Streamlin-
ing Act of 1994 (Public Law 103–355; 108 Stat. 3350;
10 U.S.C. 2220 note) is amended—
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively;
(2) by designating the second sentence as para-
graph (2);
(3) by inserting ‘‘(1)’’ after ‘‘(b) ENHANCED
SYSTEM OF PERFORMANCE INCENTIVES.—’’; and
(4) by adding at the end the following:
‘‘(3) The Secretary shall include in the enhanced sys-
tem of incentives the following:
‘‘(A) Pay bands.
‘‘(B) Significant and material pay and pro-
motion incentives to be awarded, and significant and
material unfavorable personnel actions to be im-
posed, under the system exclusively, or primarily, on
the basis of the contributions of personnel to the
395
performance of the acquisition program in relation
to cost goals, performance goals, and schedule goals.
‘‘(C) Provisions for pay incentives and pro-
motion incentives to be awarded under the system.’’.
(b) CIVILIAN AGENCY ACQUISITIONS.—Subsection
(c) of section 5051 of the Federal Acquisition Streamlin-
ing Act of 1994 (Public Law 103–355; 108 Stat. 3351;
41 U.S.C. 263 note) is amended—
(1) by redesignating subparagraphs (A) and
(B) of paragraph (2) as clauses (i) and (ii); respec-
tively;
(2) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively;
(3) by inserting ‘‘(1)’’ after ‘‘(c) ENHANCED
SYSTEM OF PERFORMANCE INCENTIVES.—’’; and
(4) by adding at the end the following:
‘‘(2) The Deputy Director shall include in the en-
hanced system of incentives under paragraph (1)(B) the
following:
‘‘(A) Pay bands.
‘‘(B) Significant and material pay and pro-
motion incentives to be awarded, and significant and
material unfavorable personnel actions to be im-
posed, under the system exclusively, or primarily, on
the basis of the contributions of personnel to the
396
performance of the acquisition program in relation
to cost goals, performance goals, and schedule goals.
‘‘(C) Provisions for pay incentives and pro-
motion incentives to be awarded under the system.’’.
SEC. 835. RESULTS ORIENTED ACQUISITION PROGRAM
CYCLE.
Section 5002(a) of the Federal Acquisition Stream-
lining Act of 1994 (Public Law 103–355; 108 Stat. 3350)
is amended—
(1) by inserting ‘‘(1)’’ before ‘‘to ensure’’; and
(2) by striking out the period at the end and inserting
in lieu thereof the following: ‘‘; (2) to ensure that the regu-
lations compress the time periods associated with develop-
ing, procuring, and making operational new systems; and
(3) to ensure that Department of Defense directives relat-
ing to development and procurement of information sys-
tems (numbered in the 8000 series) and the Department
of Defense directives numbered in the 5000 series are con-
solidated into one series of directives that is consistent
with such compressed time periods.’’.
SEC. 836. RAPID CONTRACTING GOAL.
(a) GOAL.—The Office of Federal Procurement Pol-
icy Act is amended by adding at the end the following new
section:
397
‘‘SEC. 35. RAPID CONTRACTING GOAL.
The Administrator for Federal Procurement Policy
shall establish a goal of reducing by 50 percent the time
necessary for executive agencies to acquire an item for the
user of that item.’’.
(b) CLERICAL AMENDMENT.—The table of contents
for such Act, contained in section 1(b), is amended by add-
ing at the end the following new item:
‘‘Sec. 35. Rapid contracting goal.’’.
SEC. 837. ENCOURAGEMENT OF MULTIYEAR CONTRACTING.
(a) 
ARMED
SERVICES
ACQUISITIONS.—Section
2306b(a) of title 10, United States Code, is amended in
the matter preceding paragraph (1) by striking out ‘‘may’’
and inserting in lieu thereof ‘‘shall, to the maximum ex-
tent possible,’’.
(b) 
CIVILIAN
AGENCY
ACQUISITIONS.—Section
304B(a) of the Federal Property and Administrative Serv-
ices Act of 1949 (41 U.S.C. 254c(a)) is amended in the
matter preceding paragraph (1) by striking out ‘‘may’’
and inserting in lieu thereof ‘‘shall, to the maximum ex-
tent possible,’’.
398
SEC. 838. CONTRACTOR SHARE OF GAINS AND LOSSES
FROM COST, SCHEDULE, AND PERFORMANCE
EXPERIENCE.
(a) ARMED SERVICES ACQUISITIONS.—(1) Chapter
137 of title 10, United States Code, is amended by insert-
ing after section 2306b the following new section:
‘‘§ 2306c. Contractor share of gains and losses from
cost, schedule, and performance experi-
ence
‘‘The Federal Acquisition Regulation shall contain
provisions to ensure that, for any cost-type contract or in-
centive-type contract, the contractor may be rewarded for
contract performance exceeding the contract cost, sched-
ule, or performance parameters to the benefit of the Unit-
ed States and may be penalized for failing to adhere to
cost, schedule, or performance parameters to the det-
riment of the United States.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 2306b the following new item:
‘‘2306c. Contractor share of gains and losses from cost, schedule, and perform-
ance experience.’’.
(b) CIVILIAN AGENCY ACQUISITIONS.—(1) Title III
of the Federal Property and Administrative Services Act
of 1949 (41 U.S.C. 251 et seq.) is amended by inserting
after section 304C the following new section:
399
‘‘SEC. 304D. CONTRACTOR SHARE OF GAINS AND LOSSES
FROM COST, SCHEDULE, AND PERFORMANCE
EXPERIENCE.
‘‘The Federal Acquisition Regulation shall contain
provisions to ensure that, for any cost-type contract or in-
centive-type contract, the contractor may be rewarded for
contract performance exceeding the contract cost, sched-
ule, or performance parameters to the benefit of the Unit-
ed States and may be penalized for failing to adhere to
cost, schedule, or performance parameters to the det-
riment of the United States.’’.
(2) The table of contents for such Act, contained in
section 1(b), is amended by inserting after the item relat-
ing to section 304C the following new item:
‘‘Sec. 304D. Contractor share of gains and losses from cost, schedule, and per-
formance experience.’’.
SEC. 839. PHASE FUNDING OF DEFENSE ACQUISITION PRO-
GRAMS.
Chapter 131 of title 10, United States Code, is
amended by adding at the end the following new section:
‘‘§ 2221. Funding for results oriented acquisition pro-
gram cycle
‘‘Before initial funding is made available for the de-
velopment, procurement, or operational phase of an acqui-
sition program for which an authorization of appropria-
tions is required by section 114 of this title, the Secretary
400
of Defense shall submit to Congress information about the
objectives and plans for the conduct of that phase and the
funding requirements for the entire phase. The informa-
tion shall identify the intended user of the system to be
acquired under the program and shall include objective,
quantifiable criteria for assessing the extent to which the
objectives and goals determined pursuant to section 2435
of this title are achieved.’’.
(2) The table of sections at the beginning of such
chapter is amended by adding at the end the following
new item:
‘‘2221. Funding for results oriented acquisition program cycle.’’.
SEC. 840. IMPROVED DEPARTMENT OF DEFENSE CON-
TRACT PAYMENT PROCEDURES.
(a) REVIEW AND IMPROVEMENT OF PROCEDURES.—
The Comptroller General of the United States shall review
commercial practices regarding accounts payable and, con-
sidering the results of the review, develop standards for
the Secretary of Defense to consider using for improving
the contract payment procedures and financial manage-
ment systems of the Department of Defense.
(b) GAO REPORT.—Not later than September 30,
1996, the Comptroller General shall submit to Congress
a report containing the following matters:
(1) The weaknesses in the financial manage-
ment processes of the Department of Defense.
401
(2) Deviations of the Department of Defense
payment procedures and financial management sys-
tems from the standards developed pursuant to sub-
section (a), expressed quantitatively.
(3) The officials of the Department of Defense
who are responsible for resolving the deviations.
SEC. 841. CONSIDERATION OF PAST PERFORMANCE IN AS-
SIGNMENT TO ACQUISITION POSITIONS.
(a) REQUIREMENT.—Section 1701(a) of title 10,
United States Code, is amended by adding at the end the
following: ‘‘The policies and procedures shall provide that
education and training in acquisition matters, and past
performance of acquisition responsibilities, are major fac-
tors in the selection of personnel for assignment to acqui-
sition positions in the Department of Defense.’’.
(b) PERFORMANCE REQUIREMENTS
FOR ASSIGN-
MENT.—(1) Section 1723(a) of title 10, United States
Code, is amended by inserting ‘‘, including requirements
relating to demonstrated past performance of acquisition
duties,’’ in the first sentence after ‘‘experience require-
ments’’.
(2) Section 1724(a)(2) of such title is amended by
inserting before the semicolon at the end the following:
‘‘and have demonstrated proficiency in the performance of
402
acquisition duties in the contracting position or positions
previously held’’.
(3) Section 1735 of such title is amended—
(A) in subsection (b)—
(i) by striking out ‘‘and’’ at the end of
paragraph (2);
(ii) by striking out the period at the end
of paragraph (3) and inserting in lieu thereof ‘‘;
and’’; and
(iii) by adding at the end the following:
‘‘(4) must have demonstrated proficiency in the
performance of acquisition duties.’’;
(B) in subsection (c)—
(i) by striking out ‘‘and’’ at the end of
paragraph (2);
(ii) by striking out the period at the end
of paragraph (3) and inserting in lieu thereof ‘‘;
and’’; and
(iii) by adding at the end the following:
‘‘(4) must have demonstrated proficiency in the
performance of acquisition duties.’’;
(C) in subsection (d), by inserting before the
period at the end the following: ‘‘, and have dem-
onstrated proficiency in the performance of acquisi-
tion duties’’; and
403
(D) in subsection (e), by inserting before the
period at the end the following: ‘‘, and have dem-
onstrated proficiency in the performance of acquisi-
tion duties’’.
SEC. 842. VALUE ENGINEERING FOR FEDERAL AGENCIES.
(a) USE OF VALUE ENGINEERING.—The Office of
Federal Procurement Policy Act (41 U.S.C. 401 et seq.),
as amended by section 837, is further amended by adding
at the end the following new section:
‘‘SEC. 37. VALUE ENGINEERING.
‘‘(a) IN GENERAL.—Each executive agency shall es-
tablish and maintain effective value engineering proce-
dures and processes.
‘‘(b) THRESHOLD.—The procedures and processes
established pursuant to subsection (a) shall be applied to
those programs, projects, systems, and products of an ex-
ecutive agency that, in a ranking of all programs, projects,
systems, and products of the agency according to greatest
dollar value, are within the highest 20th percentile.
‘‘(c) DEFINITION.—As used in this section, the term
‘value engineering’ means a team effort, performed by
qualified agency or contractor personnel, directed at ana-
lyzing the functions of a program, project, system, prod-
uct, item of equipment, building, facility, service, or supply
for the purpose of achieving the essential functions at the
404
lowest life-cycle cost that is consistent with required or
improved performance, reliability, quality, and safety.’’.
(b) CLERICAL AMENDMENT.—The table of contents
for such Act, contained in section 1(b), is amended by add-
ing at the end the following new item:
‘‘Sec. 37. Value engineering.’’.
SEC. 843. ACQUISITION WORKFORCE.
(a) ACQUISITION WORKFORCE.—(1) The Office of
Federal Procurement Policy Act (41 U.S.C. 401 et seq.),
as amended by section 843, is further amended by adding
at the end the following new section:
‘‘SEC. 38. ACQUISITION WORKFORCE.
‘‘(a) APPLICABILITY.—This section does not apply to
an executive agency that is subject to chapter 87 of title
10, United States Code.
‘‘(b) MANAGEMENT POLICIES.—
‘‘(1) POLICIES AND PROCEDURES.—The head
of each executive agency, after consultation with the
Administrator for Federal Procurement Policy, shall
establish policies and procedures for the effective
management (including accession, education, train-
ing, career development, and performance incentives)
of the acquisition workforce of the agency. The de-
velopment of acquisition workforce policies under
this section shall be carried out consistent with the
merit system principles set forth in paragraphs (1)
405
and (2) of section 2301(b) of title 5, United States
Code.
‘‘(2) UNIFORM
IMPLEMENTATION.—The head
of each executive agency shall ensure that, to the
maximum extent practicable, acquisition workforce
policies and procedures established are uniform in
their implementation throughout the agency.
‘‘(3) GOVERNMENTWIDE POLICIES AND EVAL-
UATION.—The Administrator shall issue policies to
promote uniform implementation of this section by
executive agencies, with due regard for differences in
program requirements among agencies that may be
appropriate and warranted in view of the agency
mission. The Administrator shall coordinate with the
Deputy Director for Management of the Office of
Management and Budget to ensure that such poli-
cies are consistent with the policies and procedures
established and enhanced system of incentives pro-
vided pursuant to section 5051(c) of the Federal Ac-
quisition Streamlining Act of 1994 (41 U.S.C. 263
note). The Administrator shall evaluate the imple-
mentation of the provisions of this section by execu-
tive agencies.
‘‘(c) SENIOR PROCUREMENT EXECUTIVE AUTHORI-
TIES AND RESPONSIBILITIES.—Subject to the authority,
406
direction, and control of the head of an executive agency,
the senior procurement executive of the agency shall carry
out all powers, functions, and duties of the head of the
agency with respect to implementation of this section. The
senior procurement executive shall ensure that the policies
of the head of the executive agency established in accord-
ance with this section are implemented throughout the
agency.
‘‘(d) MANAGEMENT INFORMATION SYSTEMS.—The
Administrator shall ensure that the heads of executive
agencies collect and maintain standardized information on
the acquisition workforce related to implementation of this
section. To the maximum extent practicable, such data re-
quirements shall conform to standards established by the
Office of Personnel Management for the Central Personnel
Data File.
‘‘(e) ACQUISITION WORKFORCE.—The programs es-
tablished by this section shall apply to all employees in
the General Schedule Contracting series (GS–1102) and
the General Schedule Purchasing series (GS–1105), and
to any employees regardless of series who have been ap-
pointed as contracting officers whose authority exceeds the
micro-purchase threshold, as that term is defined in sec-
tion 32(g). The head of each executive agency may include
407
employees in other series who perform acquisition or ac-
quisition-related functions.
‘‘(f) CAREER DEVELOPMENT.—
‘‘(1) CAREER PATHS.—The head of each execu-
tive agency shall ensure that appropriate career
paths for personnel who desire to pursue careers in
acquisition are identified in terms of the education,
training, experience, and assignments necessary for
career progression to the most senior acquisition po-
sitions. The head of each executive agency shall
make information available on such career paths.
‘‘(2) CRITICAL DUTIES AND TASKS.—For each
career path, the head of each executive agency shall
identify the critical acquisition-related duties and
tasks in which, at minimum, employees of the agen-
cy in the career path shall be competent to perform
at full performance grade levels. For this purpose,
the head of the executive agency shall provide appro-
priate coverage of the critical duties and tasks iden-
tified by the Director of the Federal Acquisition In-
stitute.
‘‘(3) 
MANDATORY
TRAINING
AND
EDU-
CATION.—For each career path, the head of each ex-
ecutive agency shall establish requirements for the
completion of course work and related on-the-job
408
training in the critical acquisition-related duties and
tasks of the career path. The head of each executive
agency shall also encourage employees to maintain
the currency of their acquisition knowledge and gen-
erally enhance their knowledge of related acquisition
management disciplines through academic programs
and other self-developmental activities.
‘‘(4) PERFORMANCE INCENTIVES.—The head of
each executive agency, acting through the senior
procurement executive for the agency, shall provide
for an enhanced system of incentives for the encour-
agement of excellence in the acquisition workforce
which rewards performance of employees that con-
tribute to achieving the agency’s performance goals.
The system of incentives shall include provisions
that—
‘‘(A) relate pay to performance;
‘‘(B) provide for consideration, in person-
nel evaluations and promotion decisions, of the
extent to which the performance of personnel
contributed to achieving the agency’s perform-
ance goals; and
‘‘(C) provide pay and promotion incentives
to be awarded, and unfavorable personnel ac-
tions to be imposed, under the system on the
409
basis of the contributions of personnel to
achieving the agency’s performance goals.
‘‘(g) QUALIFICATION REQUIREMENTS.—
‘‘(1) GENERAL
SCHEDULE
CONTRACTING
SE-
RIES (GS–1102).—
‘‘(A) ENTRY
LEVEL
QUALIFICATIONS.—
The Director of the Office of Personnel Man-
agement shall require that, after October 1,
1996, a person may not be appointed to a posi-
tion in the GS–1102 occupational series unless
the person—
‘‘(i) has received a baccalaureate de-
gree from an accredited educational insti-
tution authorized to grant baccalaureate
degrees,
‘‘(ii) has completed at least 24 semes-
ter credit hours (or the equivalent) of
study from an accredited institution of
higher education in any of the following
disciplines: accounting, business finance,
law, contracts, purchasing, economics, in-
dustrial management, marketing, quan-
titative methods, or organization and man-
agement, or
410
‘‘(iii) has passed a written test deter-
mined by the Administrator for Federal
Procurement Policy, after consultation
with the Director of the Office of Person-
nel Management, to demonstrate the
judgmental skills necessary for positions in
this series.
‘‘(B) QUALIFICATIONS FOR SENIOR CON-
TRACTING POSITIONS.—The Director of the Of-
fice of Personnel Management shall require
that, after October 1, 1996, persons may be ap-
pointed to positions at and above full perform-
ance grade levels in the GS–1102 occupational
series only if those persons—
‘‘(i) have satisfied the educational re-
quirement either of subsection (g)(1)(A)(i)
or subsection (g)(1)(A)(ii),
‘‘(ii) have successfully completed all
training required for the position under
subsection (f)(3), and
‘‘(iii) have satisfied experience and
other requirements established by the Di-
rector for such positions.
However, this requirement shall apply to per-
sons employed on October 1, 1996, in GS–1102
411
positions at those grade levels only as a pre-
requisite for promotion to a GS–1102 position
at a higher grade.
‘‘(2) GENERAL SCHEDULE PURCHASING SERIES
(GS–1105).—The Director of the Office of Personnel
Management shall require that, after October 1,
1996, a person may not be appointed to a position
in the GS–1105 occupational series unless the per-
son—
‘‘(A) has successfully completed 2 years of
course work from an accredited educational in-
stitution authorized to grant degrees, or
‘‘(B) has passed a written test determined
by the Administrator for Federal Procurement
Policy, after consultation with the Director of
the Office of Personnel Management, to dem-
onstrate the judgmental skills necessary for po-
sitions in this series.
‘‘(3) CONTRACTING
OFFICERS.—The head of
each executive agency shall require that, beginning
after October 1, 1996, a person may be appointed
as a contracting officer with authority to award or
administer contracts for amounts above the micro-
purchase threshold, as that term is defined in sec-
tion 32(g), only if the person—
412
‘‘(A) has successfully completed all manda-
tory training required of an employee in an
equivalent GS–1102 or 1105 position under
subsection (f)(3); and
‘‘(B) meets experience and other require-
ments established by the head of the agency,
based on the dollar value and complexity of the
contracts that the employee will be authorized
to award or administer under the appointment
as a contracting officer.
‘‘(4) EXCEPTIONS.—(A) The requirements set
forth in subsection (g)(1) and (2), as applicable,
shall not apply to any person employed in the GS–
1101 or GS–1105 series on October 1, 1996.
‘‘(B) Employees of an executive agency who do
not satisfy the full qualification requirements for ap-
pointment as a contracting officer under subsection
(g)(3) may be appointed as a contracting officer for
a temporary period of time under procedures estab-
lished by the agency head. The procedures shall—
‘‘(i) require that the person have completed
a significant portion of the required training,
‘‘(ii) require a plan be established for the
balance of the required training,
413
‘‘(iii) specify a period of time for comple-
tion of the training, and
‘‘(iv) include provisions for withdrawing or
terminating the appointment prior to the sched-
uled expiration date, where appropriate.
‘‘(5) WAIVER.—The senior procurement execu-
tive for an executive agency may waive any or all of
the qualification requirements of subsections (g)(1)
and (2) for a person if the person possesses signifi-
cant potential for advancement to levels of greater
responsibility and authority, based on demonstrated
job performance and qualifying experience. This au-
thority may not be redelegated by the senior pro-
curement executive. With respect to each waiver
granted under this subsection, the senior procure-
ment executive shall set forth in writing the ration-
ale for the decision to waive such requirements.
‘‘(h) PROGRAM ESTABLISHMENT AND IMPLEMENTA-
TION.—
‘‘(1) FUNDING LEVELS.—(A) The head of an
executive agency shall request in the budget for a
fiscal year for the agency—
‘‘(i) for education and training under this
section, an amount equal to no less than 2.5
percent of the base aggregate salary cost of the
414
acquisition workforce subject to this section for
that fiscal year; and
‘‘(ii) 
for 
salaries 
of 
the 
acquisition
workforce, an amount equal to no more than
97.5 percent of such base aggregate salary cost.
‘‘(B) The head of the executive agency shall set
forth separately the funding levels requested in the
budget justification documents submitted in support
of the President’s budget submitted to Congress
under section 1105 of title 31, United States Code.
‘‘(C) Funds appropriated for education and
training under this section may not be obligated or
used for any other purpose.
‘‘(2) INTERAGENCY
AGREEMENTS.—The head
of an executive agency may enter into a written
agreement with another agency to participate in pro-
grams established under this section on a reimburs-
able basis.
‘‘(3) TUITION
ASSISTANCE.—Notwithstanding
the prohibition in section 4107(b) of title 5, United
States Code, the head of each executive agency may
provide for tuition reimbursement and education (in-
cluding a full-time course of study leading to a de-
gree) for acquisition personnel in the agency related
to the purposes of this section.
415
‘‘(4) INTERN PROGRAMS.—The head of each ex-
ecutive agency may establish intern programs in
order to recruit highly qualified and talented individ-
uals and provide them with opportunities for acceler-
ated promotions, career broadening assignments,
and specified training for advancement to senior ac-
quisition positions. For such programs, the head of
an executive agency, without regard to the provisions
of title 5, United States Code, may appoint individ-
uals to competitive GS–5, GS–7, or GS–9 positions
in the General Schedule Contracting series (GS–
1102) who have graduated from baccalaureate or
master’s programs in purchasing or contracting
from accredited educational institutions authorized
to grant baccalaureate and master’s degrees.
‘‘(5) COOPERATIVE
EDUCATION
PROGRAM.—
The head of each executive agency may establish an
agencywide cooperative education credit program for
acquisition positions. Under the program, the head
of the executive agency may enter into cooperative
arrangements with one or more accredited institu-
tions of higher education which provide for such in-
stitutions to grant undergraduate credit for work
performed in such position.
‘‘(6) SCHOLARSHIP PROGRAM.—
416
‘‘(A) ESTABLISHMENT.—Where deemed
appropriate, the head of each executive agency
may establish a scholarship program for the
purpose of qualifying individuals for acquisition
positions in the agency.
‘‘(B) ELIGIBILITY.—To be eligible to par-
ticipate in a scholarship program established
under this paragraph by an executive agency,
an individual must—
‘‘(i) be accepted for enrollment or be
currently enrolled as a full-time student at
an accredited educational institution au-
thorized to grant baccalaureate or grad-
uate degrees (as appropriate);
‘‘(ii) be pursuing a course of edu-
cation that leads toward completion of a
bachelor’s, master’s, or doctor’s degree (as
appropriate) in a qualifying field of study,
as determined by the head of the agency;
‘‘(iii) sign an agreement described in
subparagraph (C) under which the partici-
pant agrees to serve a period of obligated
service in the agency in an acquisition po-
sition in return for payment of educational
417
assistance as provided in the agreement;
and
‘‘(iv) meet such other requirements as
the head of the agency prescribes.
‘‘(C) AGREEMENT.—An agreement be-
tween the head of an executive agency and a
participant in a scholarship program established
under this paragraph shall be in writing, shall
be signed by the participant, and shall include
the following provisions:
‘‘(i) The agreement of the head of the
agency to provide the participant with edu-
cational assistance for a specified number
of school years, not to exceed 4, during
which the participant is pursuing a course
of education in a qualifying field of study.
The assistance may include payment of
tuition, fees, books, laboratory expenses,
and a stipend.
‘‘(ii) The participant’s agreement—
‘‘(I) to accept such educational
assistance,
‘‘(II) to maintain enrollment and
attendance in the course of education
until completed,
418
‘‘(III) while enrolled in such
course, to maintain an acceptable level
of academic standing (as prescribed
by the head of the agency), and
‘‘(IV) after completion of the
course of education, to serve as a full-
time employee in an acquisition posi-
tion in the agency for a period of time
of one calendar year for each school
year or part thereof for which the par-
ticipant was provided a scholarship
under the program.
‘‘(D) REPAYMENT.—(i) Any person partici-
pating in a program established under this
paragraph shall agree to pay to the United
States the total amount of educational assist-
ance provided to the person under the program
if the person is voluntarily separated from the
agency or involuntarily separated for cause
from the agency before the end of the period for
which the person has agreed to continue in the
service of the agency in an acquisition position.
‘‘(ii) If an employee fails to fulfill the
agreement to pay to the Government the total
amount of educational assistance provided to
419
the person under the program, a sum equal to
the amount of the educational assistance may
be recovered by the Government from the em-
ployee (or the estate of the employee) by setoff
against accrued pay, compensation, amount of
retirement credit, or other amount due the em-
ployee from the Government; and by such other
method as is provided by law for the recovery
of amounts owing to the Government.
‘‘(iii) The head of an executive agency may
waive in whole or in part a repayment required
under this paragraph if the head of the agency
determines the recovery would be against equity
and good conscience or would be contrary to the
best interests of the United States.
‘‘(E) TERMINATION
OF
AGREEMENT.—
There shall be no requirement that a position
be offered to a person after such person suc-
cessfully completes a course of education re-
quired by an agreement under this paragraph.
If no position is offered, the agreement shall be
considered terminated.’’.
(2) The table of contents for such Act, contained in
section 1(b), is amended by adding at the end the follow-
ing new item:
‘‘Sec. 38. Acquisition workforce.’’.
420
(b) FEDERAL ACQUISITION INSTITUTE.—Section 6
of the Office of Federal Procurement Policy Act (41
U.S.C. 405), is amended—
(1) in subsection (d) by amending paragraph
(5) to read as follows:
‘‘(5) providing for and directing the activities of
the Federal Acquisition Institute (including rec-
ommending to the Administrator of General Services
a sufficient budget for such activities), which shall
be located in the General Services Administration;’’;
and
(2) by adding at the end the following new sub-
section:
‘‘(l) The Federal Acquisition Institute shall—
‘‘(1) recommend policies, procedures, and
guidelines to the Administrator, for—
‘‘(A) fostering and promoting the develop-
ment of a professional acquisition workforce
governmentwide, and
‘‘(B) administering the provisions of sec-
tion 35;
‘‘(2) collect data and analyze acquisition
workforce data from the Office of Personnel Man-
agement, the heads of executive agencies, and,
through periodic surveys, from individual employees;
421
‘‘(3) periodically analyze acquisition career
fields to identify critical competencies, duties, tasks,
and related academic prerequisites, skills, and
knowledge;
‘‘(4) coordinate and assist agencies in identify-
ing and recruiting highly qualified candidates for ac-
quisition fields;
‘‘(5) develop instructional materials for acquisi-
tion personnel in coordination with private and pub-
lic acquisition colleges and training facilities;
‘‘(6) evaluate the effectiveness of training and
career development programs for acquisition person-
nel;
‘‘(7) promote the establishment and utilization
of academic programs by colleges and universities in
acquisition fields;
‘‘(8) promote, coordinate, or conduct govern-
mentwide research and studies to improve the acqui-
sition process and the laws, policies, methods, regu-
lations, procedures, and forms relating to acquisition
by the executive agencies;
‘‘(9) facilitate, to the extent requested by agen-
cies, interagency intern and training programs; and
‘‘(10) perform other career management or re-
search functions as directed by the Administrator.’’.
422
(c) REPEAL OF SUPERSEDED PROVISION.—Section
502 of the Small Business and Federal Procurement Com-
petition Enhancement Act of 1984 (41 U.S.C. 414a) is
repealed.
SEC. 844. COST REIMBURSEMENT RULES FOR INDIRECT
COSTS ATTRIBUTABLE TO PRIVATE SECTOR
WORK OF DEFENSE CONTRACTORS.
(a) DEFENSE CAPABILITY PRESERVATION AGREE-
MENT.—The Secretary of Defense may enter into an
agreement, to be known as a ‘‘defense capability preserva-
tion agreement’’, with a defense contractor under which
the cost reimbursement rules described in subsection (b)
shall be applied. Such an agreement may be entered into
in any case in which the Secretary determines that the
application of such cost reimbursement rules would facili-
tate the achievement of the policy set forth in section
2501(c) of title 10, United States Code.
(b) COST REIMBURSEMENT RULES.—(1) The cost re-
imbursement rules applicable under an agreement entered
into under subsection (a) are as follows:
(A) The Department of Defense shall, in deter-
mining the reimbursement due a contractor for its
indirect costs of performing a defense contract, allow
the contractor to allocate indirect costs to its private
sector work only to the extent of the contractor’s al-
423
locable indirect private sector costs, subject to sub-
paragraph (C).
(B) For purposes of subparagraph (A), the allo-
cable indirect private sector costs of a contractor are
those costs of the contractor that are equal to the
amount by which the revenue attributable to the pri-
vate sector work of the contractor exceeds the sum
of—
(i) the direct costs attributable to such
work, and
(ii) the incremental indirect costs attrib-
utable to such work.
(C) The total amount of allocable indirect pri-
vate sector costs for a contract in any year of the
agreement may not exceed the amount of indirect
costs that a contractor would have allocated to its
private sector work during that year in accordance
with the contractor’s accounting practices.
(2) The cost reimbursement rules set forth in para-
graph (1) may be modified if the Secretary of Defense de-
termines that modifications are appropriate to the particu-
lar situation to facilitate achievement of the policy set
forth in section 2501(c) of title 10, United States Code.
(c) RELATIONSHIP
TO
ACCOUNTING
PRACTICE
CHANGE.—The use of the cost reimbursement rules de-
424
scribed in subsection (b) under such an agreement with
a contractor and the implementation of such an agreement
does not constitute a change in cost accounting practices
of the contractor within the meaning of section
26(h)(1)(B) of the Office of Federal Procurement Policy
Act (41 U.S.C. 422(h)(1)(B)).
(d) CONTRACTS COVERED.—An agreement entered
into with a contractor under subsection (a) shall apply to
all Department of Defense contracts with the contractor
either existing on the date on which the agreement was
entered into or awarded during the term of the agreement.
Subtitle D—Streamlining of
Dispute Resolution
PART I—GENERAL PROVISIONS
SEC. 850. DEFINITIONS.
In this subtitle:
(1) The term ‘‘Board’’ means the United States
Board of Contract Appeals.
(2) The term ‘‘Board judge’’ means a member
of the United States Board of Contract Appeals.
(3) The term ‘‘Chairman’’ means the Chairman
of the United States Board of Contract Appeals.
(4) The term ‘‘executive agency’’ has the mean-
ing given by section 2(2) of the Contract Disputes
Act of 1978 (41 U.S.C. 601(2)).
425
(5) The term ‘‘alternative means of dispute res-
olution’’ has the meaning given by section 571(3) of
title 5, United States Code.
(6) The term ‘‘protest’’ means a written objec-
tion by an interested party to any of the following:
(A) A solicitation or other request by an
executive agency for offers for a contract for
the procurement of property or services.
(B) The cancellation of such a solicitation
or other request.
(C) An award or proposed award of such
a contract.
(D) A termination or cancellation of an
award of such a contract, if the written objec-
tion contains an allegation that the termination
or cancellation is based in whole or in part on
improprieties concerning the award of the con-
tract.
(7) The term ‘‘interested party’’, with respect
to a contract or a solicitation or other request for of-
fers, means an actual or prospective bidder or
offeror whose direct economic interest would be af-
fected by the award of the contract or by failure to
award the contract.
426
(8) The term ‘‘prevailing party’’, with respect
to a determination of the Board under section
864(b) that a decision of a contracting officer vio-
lates a statute or regulation, means a party that
demonstrated such violation.
PART II—ESTABLISHMENT OF THE UNITED
STATES BOARD OF CONTRACT APPEALS
SEC. 851. ESTABLISHMENT.
There is established in the executive branch of the
Government an independent establishment to be known as
the United States Board of Contract Appeals.
SEC. 852. MEMBERSHIP.
(a) APPOINTMENT.—(1) The Board shall consist of
Board judges appointed by the Chairman, without regard
to political affiliation and solely on the basis of the profes-
sional qualifications required to perform the duties and
responsibilities of a Board judge, from a register of appli-
cants maintained by the Board.
(2) The members of the Board shall be selected and
appointed to serve in the same manner as administrative
law judges appointed pursuant to section 3105 of title 5,
United States Code, with an additional requirement that
such members shall have had not fewer than five years’
experience in public contract law.
427
(3) Notwithstanding paragraph (2) and subject to
subsection (b), the following persons shall serve as Board
judges:
(A) Any full-time member of an agency board
of contract appeals serving as such on the day before
the effective date of this subtitle.
(B) Any person serving on the day before the
date of the enactment of this Act in a position at
a level of assistant general counsel or higher with
authority delegated from the Comptroller General to
decide bid protests under subchapter V of chapter
35 of title 31, United States Code.
(b) REMOVAL.—Members of the Board shall be sub-
ject to removal in the same manner as administrative law
judges, as provided in section 7521 of title 5, United
States Code.
(c) COMPENSATION.—Compensation for the Chair-
man and all other members of the Board shall be deter-
mined under section 5273a of title 5, United States Code.
SEC. 853. CHAIRMAN.
(a) DESIGNATION.—(1) The Chairman shall be des-
ignated by the President to serve for a term of five years.
The President shall select the Chairman from among sit-
ting Board judges each of whom has had at least five years
of service—
428
(A) as a member of an agency board of contract
appeals; or
(B) in a position at a level of assistant general
counsel or higher with authority delegated from the
Comptroller General to decide bid protests under
subchapter V of chapter 35 of title 31, United
States Code (as in effect on the day before the effec-
tive date of this subtitle).
(2) A Chairman may continue to serve after the expi-
ration of the Chairman’s term until a successor has taken
office. A Chairman may be reappointed any number of
times.
(b) RESPONSIBILITIES.—The Chairman shall be re-
sponsible on behalf of the Board for the executive and ad-
ministrative operation of the Board, including functions
of the Board with respect to the following:
(1) The selection, appointment, and fixing of
the compensation of such personnel, pursuant to
part III of title 5, United States Code, as the Chair-
man considers necessary or appropriate, including a
Clerk of the Board, a General Counsel, and clerical
and legal assistance for Board judges.
(2) The supervision of personnel employed by or
assigned to the Board, and the distribution of work
among such personnel.
429
(3) The response to any request that may be
made by Congress or the Office of Management and
Budget.
(4) The allocation of funds among the various
functions of the Board.
(5) The entering into and performance of such
contracts, leases, cooperative agreements, or other
similar transactions with public agencies and private
organizations and persons, and the making of such
payments, as the Chairman considers necessary or
appropriate to carry out functions vested in the
Board.
(6) The operation of an Office of the Clerk of
the Board, including the receipt of all filings made
with the Board, the assignment of cases, and the
maintenance of all records of the Board.
(7) The acquisition, operation, and maintenance
of such automatic data processing resources as may
be needed by the Board.
(8) The prescription of such rules and regula-
tions as the Chairman considers necessary or appro-
priate for the administration and management of the
Board.
(c) VICE CHAIRMEN.—The Chairman may designate
up to four other Board judges as Vice Chairmen. The
430
Chairman may divide the Board into two or more divi-
sions, and, if such division is made, shall assign a Vice
Chairman to head each division. The Vice Chairmen, in
the order designated by the Chairman, shall act in the
place and stead of the Chairman during the absence of
the Chairman.
SEC. 854. RULEMAKING AUTHORITY.
(a) IN GENERAL.—The Board may establish—
(1) such procedural rules and regulations as are
necessary to the exercise of its functions, including
internal rules for the assignment of cases; and
(2) statements of policy of general applicability
with respect to its functions.
(b) PROHIBITION ON REVIEW BY OTHER AGENCY OR
PERSON.—Rules and regulations established by the Board
(including forms which are a part thereof) shall not be
subject to review by any other agency or person (including
the Administrator of Information and Regulatory Affairs,
pursuant to chapter 35 of title 44, United States Code)
in advance of publication.
SEC. 855. LITIGATION AUTHORITY.
Except as provided in section 518 of title 28, United
States Code, relating to litigation before the Supreme
Court, attorneys designated by the Chairman may appear
431
for, and represent the Board in, any civil action brought
in connection with any function carried out by the Board.
SEC. 856. SEAL OF BOARD.
The Chairman shall cause a seal of office to be made
for the Board of such design as the Board shall approve.
Judicial notice shall be taken of such seal.
SEC. 857. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for fiscal
year 1997 and each succeeding fiscal year such sums as
may be necessary to carry out the provisions of this sub-
title and to enable the Board to perform its functions.
Funds appropriate pursuant to this section shall remain
available until expended.
PART III—FUNCTIONS OF UNITED STATES BOARD
OF CONTRACT APPEALS
SEC. 861. ALTERNATIVE DISPUTE RESOLUTION SERVICES.
(a) REQUIREMENT TO PROVIDE SERVICES UPON RE-
QUEST.—The Board shall provide alternative means of
dispute resolution for any disagreement regarding a con-
tract or prospective contract of an executive agency upon
the request of all parties to the disagreement.
(b) PERSONNEL QUALIFIED TO ACT.—Each Board
judge and each attorney employed by the Board shall be
considered to be qualified to act for the purpose of con-
432
ducting alternative means of dispute resolution under this
section.
(c) 
SERVICES
TO
BE
PROVIDED
WITHOUT
CHARGE.—Any services provided by the Board or any
Board judge or employee pursuant to this section shall be
provided without charge.
(d) RECUSAL OF CERTAIN PERSONNEL UPON RE-
QUEST.—In the event that a matter which is presented
to the Board for alternative means of dispute resolution,
pursuant to this section, later becomes the subject of for-
mal proceedings before the Board, any Board judge or em-
ployee who was involved in the alternative means shall,
if requested by any party to the formal proceeding, take
no part in that proceeding.
SEC. 862. ALTERNATIVE DISPUTE RESOLUTION OF DIS-
PUTES 
AND 
PROTESTS 
SUBMITTED 
TO
BOARD.
With reasonable promptness after the submission to
the Board of a contract dispute under section 863 or a
bid protest under section 864, a Board judge to whom the
contract dispute or protest is assigned shall request the
parties to meet with a Board judge, or an attorney em-
ployed by the Board, for the purpose of attempting to re-
solve the dispute or protest through alternative means of
dispute resolution. Formal proceedings in the appeal shall
433
then be suspended until such time as any party or a Board
judge to whom the dispute or protest is assigned deter-
mines that alternative means of dispute resolution are not
appropriate for resolution of the dispute or protest.
SEC. 863. CONTRACT DISPUTES.
The Board shall have jurisdiction as provided by sec-
tion 8(a) of the Contract Disputes Act of 1978 (41 U.S.C.
601–613).
SEC. 864. PROTESTS.
(a) REVIEW REQUIRED UPON REQUEST.—Upon re-
quest of an interested party in connection with any pro-
curement conducted by any executive agency, the Board
shall review, as provided in this section, any decision by
a contracting officer alleged to violate a statute or regula-
tion. The authority of the Board to conduct such review
shall include the authority to review regulations to deter-
mine their consistency with applicable statutes. A decision
or order of the Board pursuant to this section shall not
be subject to interlocutory appeal or review.
(b) STANDARD OF REVIEW.—In deciding a protest,
the Board may consider all evidence that is relevant to
the decision under protest. It shall accord a presumption
of correctness to all facts found and determinations made
by the contracting officer whose decision is being pro-
tested. The protester may rebut this presumption by show-
434
ing, by a preponderance of the evidence, that a finding
or determination was incorrect. The Board may find that
a decision by a contracting officer violates a statute or
regulation for any of the reasons stated in section 706(2)
of title 5, United States Code.
(c) DETERMINATION OF WHETHER TO SUSPEND AU-
THORITY
TO
CONDUCT
PROCUREMENT
IN
PROTEST
FILED BEFORE CONTRACT AWARD.—(1) When a protest
under this section is filed before the award of a contract
in a protested procurement, the Board, at the request of
an interested party and within 10 days after the submis-
sion of the protest, shall hold a hearing to determine
whether the Board should suspend the authority of the
executive agency involved (or its head) to conduct such
procurement until the Board can decide the protest.
(2) The Board shall suspend the authority of the ex-
ecutive agency (or its head) unless the agency concerned
establishes that—
(A) absent action by the Board, contract award
is likely to occur within 30 days after the hearing;
and
(B) urgent and compelling circumstances which
significantly affect interests of the United States will
not permit waiting for the decision of the Board.
435
(3) A suspension under paragraph (2) shall not pre-
clude the executive agency concerned from continuing the
procurement process up to but not including award of the
contract unless the Board determines such action is not
in the best interests of the United States.
(d) DETERMINATION OF WHETHER TO SUSPEND AU-
THORITY
TO
CONDUCT
PROCUREMENT
IN
PROTEST
FILED AFTER CONTRACT AWARD.—(1) If, with respect
to an award of a contract, the Board receives notice of
a protest under this section within the period described
in paragraph (2), the Board shall, at the request of an
interested party, hold a hearing to determine whether the
Board should suspend the authority of the executive agen-
cy involved (or its head) to conduct such procurement
until the Board can decide the protest.
(2) The period referred to in paragraph (1) is the
period beginning on the date on which the contract is
awarded and ending at the end of the later of—
(A) the tenth day after the date of contract
award; or
(B) the fifth day after the debriefing date of-
fered to an unsuccessful offeror for any debriefing
that is requested and, when requested, is required.
(3) The Board shall hold the requested hearing with-
in 5 days after the date of the filing of the protest or,
436
in the case of a request for debriefing, within 5 days after
the later of the date of the filing of the protest or the
date of the debriefing.
(4) The Board shall suspend the procurement author-
ity of the executive agency involved (or its head) to acquire
any goods or services under the contract which are not
previously delivered and accepted unless such agency es-
tablishes that urgent and compelling circumstances which
significantly affect interests of the United States will not
permit waiting for the decision of the Board.
(e) PROCEDURES.—
(1) 
PROCEEDINGS
AND
DISCOVERY.—The
Board shall conduct proceedings and allow such dis-
covery as may be required for the expeditious, fair,
and reasonable resolution of the protest. The Board
shall limit discovery to material which is relevant to
the grounds of protest or to such affirmative de-
fenses as the executive agency involved, or any inter-
venor supporting the agency, may raise.
(2) PRIORITY.—The Board shall give priority to
protests filed under this section over contract dis-
putes and alternative dispute services. Except as
provided in paragraph (3), the Board shall issue its
final decision within 65 days after the date of the
filing of the protest, unless the Chairman determines
437
that the specific and unique circumstances of the
protest require a longer period, in which case the
Board shall issue such decision within the longer pe-
riod determined by the Chairman. An amendment
that adds a new ground of protest should be re-
solved, to the maximum extent practicable, within
the time limits established for resolution of the ini-
tial protest.
(3) THRESHOLD.—Any protest in which the an-
ticipated value of the contract award that will result
from the protested procurement, as estimated by the
executive agency involved, is less than $1,000,000
shall be considered under simplified rules of proce-
dure. These rules shall provide that discovery in
such protests shall be in writing only. Such protests
shall be decided by a single Board judge, whose deci-
sion shall be final and conclusive and shall not be set
aside except in cases of fraud. The Board shall issue
its final decision in each such protest within 35 days
after the date of the filing of the protest.
(4) CALCULATION OF TIME FOR ADR.—In cal-
culating time for purposes of paragraph (2) or (3)
of this subsection, any days during which proceed-
ings are suspended for the purpose of attempting to
resolve the protest by alternative means of dispute
438
resolution, up to a maximum of 20 days, shall not
be counted.
(5) DISMISSAL OF FRIVOLOUS PROTESTS.—The
Board may dismiss a protest that the Board deter-
mines is frivolous or which, on its face, does not
state a valid basis for protest.
(6) PAYMENT OF COSTS FOR FRIVOLOUS PRO-
TESTS.—(A) If the Board expressly finds that a pro-
test or a portion of a protest is frivolous or does not
state on its face a valid basis for protest, the Board
shall declare that the protester or other interested
party who joins the protest is liable to the United
States for payment of the costs described in sub-
paragraph (B) unless—
(i) special circumstances would make such
payment unjust; or
(ii) the protester obtains documents or
other information after the protest is filed with
the Board that establishes that the protest or
a portion of the protest is frivolous or does not
state on its face a valid basis for protest, and
the protester then promptly withdraws the pro-
test or portion of the protest.
(B) The costs referred to in subparagraph (A)
are all of the costs incurred by the United States of
439
reviewing the protest, or of reviewing that portion of
the protest for which the finding is made, including
the fees and other expenses (as defined in section
2412(d)(2)(A) of title 28, United States Code) in-
curred by the United States in defending the pro-
test.
(f) DECISIONS AND CORRECTIVE ACTIONS ON PRO-
TESTS.—(1) In making a decision on protests filed under
this section, the Board shall accord due weight to the goals
of economic and efficient procurement, and shall take due
account of the rule of prejudicial error.
(2) If the Board determines that a decision of a con-
tracting officer violates a statute or regulation, the Board
may order the agency (or its head) to take such corrective
action as the Board considers appropriate. Corrective ac-
tion includes requiring that the Federal agency—
(A) refrain from exercising any of its options
under the contract;
(B) recompete the contract immediately;
(C) issue a new solicitation;
(D) terminate the contract;
(E) award a contract consistent with the re-
quirements of such statute and regulation;
(F) implement any combination of requirements
under subparagraphs (A), (B), (C), (D), and (E); or
440
(G) implement such other actions as the Board
determines necessary.
(3) If the Board orders corrective action after the
contract award, the affected contract shall be presumed
valid as to all goods or services delivered and accepted
under the contract before the corrective action was or-
dered.
(4) Any agreement that provides for the dismissal of
a protest and involves a direct or indirect expenditure of
appropriated funds shall be submitted to the Board and
shall be made a part of the public record (subject to any
protective order considered appropriate by the Board) be-
fore dismissal of the protest.
(g) AUTHORITY TO DECLARE ENTITLEMENT
TO
COSTS.—(1)(A) Whenever the Board determines that a
decision of a contracting officer violates a statute or regu-
lation, it may, in accordance with section 1304 of title 31,
United States Code, further declare an appropriate pre-
vailing party to be entitled to the costs of—
(i) filing and pursuing the protest, including
reasonable attorneys’ fees and consultant and expert
witness fees, and
(ii) bid and proposal preparation.
(B) No party (other than a small business concern
(within the meaning of section 3(a) of the Small Business
441
Act)) may be declared entitled under this paragraph to
costs for—
(i) consultants and expert witness fees that ex-
ceed the highest rate of compensation for expert wit-
nesses paid by the Federal Government, or
(ii) attorneys’ fees that exceed $150 per hour
unless the Board, on a case by case basis, deter-
mines that an increase in the cost of living or a spe-
cial factor, such as the limited availability of quali-
fied attorneys for the proceedings involved, justifies
a higher fee.
(2) Payment of amounts due from an agency under
paragraph (1) or under the terms of a settlement agree-
ment under subsection (e)(4) shall be made from the ap-
propriation made by section 1304 of title 31, United
States Code, for the payment of judgments. The executive
agency concerned shall reimburse that appropriation ac-
count out of funds available for the procurement.
(h) APPEALS.—Except as provided in subsection
(e)(3), a final decision of the Board may be appealed as
set forth in section 8(d)(1) of the Contract Disputes Act
of 1978 by the head of the executive agency concerned
and by any interested party, including interested parties
who intervene in any protest filed under this section.
442
(i) ADDITIONAL RELIEF.—Nothing contained in this
section shall affect the power of the Board to order any
additional relief which it is authorized to provide under
any statute or regulation.
(j) NONEXCLUSIVITY OF REMEDIES.—Nothing con-
tained in this section shall affect the right of any inter-
ested party to file a protest with the contracting agency
or to file an action in the United States Court of Federal
Claims or in a United States district court.
SEC. 865. APPLICABILITY TO CONTRACTS FOR COMMER-
CIAL ITEMS.
Notwithstanding section 34 of the Office of Federal
Procurement Policy Act (41 U.S.C. 430), the authority
conferred on the Board by this subtitle is applicable to
contracts for the procurement of commercial items.
PART IV—REPEAL OF OTHER STATUTES
AUTHORIZING ADMINISTRATIVE PROTESTS
SEC. 871. REPEALS.
(a) GSBCA PROVISIONS.—Subsection (f) of the
Brooks Automatic Data Processing Act (section 111 of the
Federal Property and Administrative Services Act of
1949; 40 U.S.C. 759) is repealed.
(b) GAO PROVISIONS.—Subchapter V of chapter 35
of title 31, United States Code (31 U.S.C. 3551-3556)
is repealed.
443
PART V—TRANSFERS AND TRANSITIONAL,
SAVINGS, AND CONFORMING PROVISIONS
SEC. 881. TRANSFER AND ALLOCATION OF APPROPRIA-
TIONS AND PERSONNEL.
(a) TRANSFER.—The personnel employed in connec-
tion with, and the assets, liabilities, contracts, property,
records, and unexpended balance of appropriations, au-
thorizations, allocations, and other funds employed, held,
used, arising from, available to, or to be made available
in connection with the functions vested by law in the
Comptroller General pursuant to subchapter V of chapter
35 of title 31, United States Code, and in the boards of
contract appeals established pursuant to section 8 of the
Contract Disputes Act of 1978 (41 U.S.C. 607) (as in ef-
fect on the day before the effective date of this Act), shall
be transferred to the Board for appropriate allocation by
the Chairman.
(b) EFFECT ON PERSONNEL.—Personnel transferred
pursuant to this subtitle shall not be separated or reduced
in compensation for one year after such transfer, except
for cause.
(c) REGULATIONS.—(1) The Board shall prescribe
regulations for the release of competing employees in a
reduction in force that gives due effect to—
(A) efficiency or performance ratings;
(B) military preference; and
444
(C) tenure of employment.
(2) In prescribing the regulations, the Board shall
provide for military preference in the same manner as set
forth in subchapter I of chapter 35 of title 5, United
States Code.
SEC. 882. TERMINATIONS AND SAVINGS PROVISIONS.
(a) TERMINATION OF BOARDS OF CONTRACT AP-
PEALS.—On the effective date of this subtitle, the boards
of contract appeals established pursuant to section 8 of
the Contract Disputes Act of 1978 (41 U.S.C. 607) (as
in effect on the day before the effective date of this Act)
shall terminate.
(b) SAVINGS PROVISION FOR CONTRACT DISPUTE
MATTERS PENDING BEFORE BOARDS.—The provisions of
this subtitle shall not affect any proceedings (other than
bid protests pending before the board of contract appeals
of the General Services Administration) pending on the
effective date of this Act before any board of contract ap-
peals described in subsection (a). Such proceedings shall
be continued by the Board, and orders which were issued
in any such proceeding by any board of contract appeals
shall continue in effect until modified, terminated, super-
seded, or revoked by the Board, by a court of competent
jurisdiction, or by operation of law.
445
(c) BID PROTEST TRANSITION PROVISIONS.—(1) No
protest may be submitted to the Comptroller General pur-
suant to section 3553(a) of title 31, United States Code,
or to the board of contract appeals for the General Serv-
ices Administration pursuant to the Brooks Automatic
Data Processing Act (40 U.S.C. 759) on or after the effec-
tive date of this Act.
(2) The provisions repealed by section 871 shall con-
tinue to apply to proceedings pending on the effective date
of this subtitle before the board of contract appeals of the
General Services Administration and the Comptroller Gen-
eral pursuant to those provisions, until the board or the
Comptroller General determines such proceedings have
been completed.
SEC. 883. CONTRACT DISPUTE AUTHORITY OF BOARD.
(a) Section 2 of the Contract Disputes Act of 1978
(41 U.S.C. 601) is amended by striking out paragraph (6)
and inserting in lieu thereof the following:
‘‘(6) the term ‘Board’ means the United States
Board of Contract Appeals; and’’.
(b) Section 6(c) of the Contract Disputes Act of 1978
(41 U.S.C. 605(c)) is amended—
(1) in paragraph (4)—
(A) by striking out ‘‘the agency board of
contract appeals’’ and inserting in lieu thereof
446
‘‘the United States Board of Contract Ap-
peals’’; and
(B) by striking out ‘‘the board’’ and insert-
ing in lieu thereof ‘‘the Board’’; and
(2) in paragraph (6)—
(A) by striking out ‘‘an agency board of
contract appeals’’ and inserting in lieu thereof
‘‘the United States Board of Contract Ap-
peals’’; and
(B) by striking out ‘‘agency board’’ and in-
serting in lieu thereof ‘‘the Board’’.
(c) Section 7 of the Contract Disputes Act of 1978
(41 U.S.C. 606) is amended by striking out ‘‘an agency
board of contract appeals’’ and inserting in lieu thereof
‘‘the United States Board of Contract Appeals’’.
(d) Section 8 of the Contract Disputes Act of 1978
(41 U.S.C. 607) is amended—
(1) by amending the heading to read as follows:
‘‘UNITED STATES BOARD OF CONTRACT APPEALS’’;
(2) by striking out subsections (a), (b), and (c);
(3) in subsection (d)—
(A) by striking out the first sentence and
inserting in lieu thereof the following:
‘‘The United States Board of Contract Appeals shall have
jurisdiction to decide any appeal from a decision of a con-
447
tracting officer of any executive agency relative to a con-
tract made by that agency.’’; and
(B) in the second sentence, by striking out
‘‘the agency board’’ and inserting in lieu thereof
‘‘the Board’’;
(4) in subsection (e), by striking out ‘‘An agen-
cy board’’ and inserting in lieu thereof ‘‘The United
States Board of Contract Appeals’’;
(5) in subsection (f), by striking out ‘‘each
agency board’’ and inserting in lieu thereof ‘‘the
United States Board of Contract Appeals’’;
(6) in subsection (g)—
(A) in the first sentence of paragraph (1),
by striking out ‘‘an agency board of contract
appeals’’ and inserting in lieu thereof ‘‘the
United States Board of Contract Appeals’’;
(B) by striking out paragraph (2); and
(C) by redesignating paragraph (3) as
paragraph (2);
(7) by striking out subsections (h) and (i); and
(8) by redesignating subsections (d), (e), (f),
and (g) (as amended) as subsections (a), (b), (c),
and (d), respectively.
(e) Section 9 of the Contract Disputes Act of 1978
(41 U.S.C. 608) is amended—
448
(1) in subsection (a), by striking out ‘‘each
agency board’’ and inserting in lieu thereof ‘‘the
United States Board of Contract Appeals’’; and
(2) in subsection (b), by striking out ‘‘the agen-
cy board’’ and inserting in lieu thereof ‘‘the Board’’.
(f) Section 10 of the Contract Disputes Act of 1978
(41 U.S.C. 609) is amended—
(1) in subsection (a)—
(A) in the first sentence of paragraph
(1)—
(i) by striking out ‘‘Except as pro-
vided in paragraph (2), and in’’ and insert-
ing in lieu thereof ‘‘In’’; and
(ii) by striking out ‘‘an agency board’’
and inserting in lieu thereof ‘‘the United
States Board of Contract Appeals’’;
(B) by striking out paragraph (2); and
(C) by redesignating paragraph (3) as
paragraph (2), and in that paragraph, by strik-
ing out ‘‘or (2)’’;
(2) in subsection (b), by striking out ‘‘any
agency board’’ and ‘‘the agency board’’ and inserting
in lieu of each ‘‘the Board’’;
449
(3) in subsection (c), by striking out ‘‘an agen-
cy board’’ and ‘‘the agency board’’ and inserting in
lieu of each ‘‘the Board’’; and
(4) in subsection (d), by striking out ‘‘one or
more agency boards’’ and ‘‘or among the agency
boards involved’’ and inserting in lieu of each ‘‘the
Board’’.
(g) Section 11 of the Contract Disputes Act of 1978
(41 U.S.C. 610) is amended—
(1) in the first sentence, by striking out ‘‘an
agency board of contract appeals’’ and inserting in
lieu thereof ‘‘the United States Board of Contract
Appeals’’; and
(2) in the second sentence, by striking out ‘‘the
agency board through the Attorney General; or upon
application by the board of contract appeals of the
Tennessee Valley Authority’’ and inserting in lieu
thereof ‘‘the Board’’.
(h) Section 13 of the Contract Disputes Act of 1978
(41 U.S.C. 612) is amended—
(1) in subsection (b), by striking out ‘‘an agen-
cy board of contract appeals’’ and inserting in lieu
thereof ‘‘the United States Board of Contract Ap-
peals’’; and
450
(2) in subsection (d)(2), by striking out ‘‘by the
board of contract appeals for’’ and inserting in lieu
thereof ‘‘by the Board from’’.
SEC. 884. REFERENCES TO AGENCY BOARDS OF CONTRACT
APPEALS.
Any reference to an agency board of contract appeals
in any provision of law or in any rule, regulation, or other
paper of the United States shall be treated as referring
to the United States Board of Contract Appeals.
SEC. 885. CONFORMING AMENDMENTS.
(a) TITLE 5.—Section 5372a of title 5, United States
Code, is amended—
(1) in subsection (a)(1), by striking out ‘‘an
agency board of contract appeals appointed under
section 8 of the Contract Disputes Act of 1978’’ and
inserting in lieu thereof ‘‘the United States Board of
Contract Appeals’’;
(2) in subsection (a)(2), by striking out ‘‘an
agency board of contract appeals established pursu-
ant to section 8 of the Contract Disputes Act of
1978’’ and inserting in lieu thereof ‘‘the United
States Board of Contract Appeals’’; and
(3) in subsection (b), by striking out ‘‘an ap-
peals board’’ each place it appears and inserting in
lieu thereof ‘‘the appeals board’’.
451
(b) TITLE 10.—(1) Section 2305(e) of title 10, Unit-
ed States Code, is amended—
(A) in paragraph (1), by striking out ‘‘sub-
chapter V of chapter 35 of title 31’’ and inserting
in lieu thereof ‘‘title IV of the Federal Acquisition
Reform Act of 1995’’; and
(B) by striking out paragraph (3).
(2) Section 2305(f) of such title is amended—
(A) in paragraph (1), by striking out ‘‘in sub-
paragraphs (A) through (F) of subsection (b)(1) of
section 3554 of title 31’’ and inserting in lieu there-
of ‘‘section 424(f)(2) of the Federal Acquisition Re-
form Act of 1995’’; and
(B) in paragraph (2), by striking out ‘‘para-
graph (1) of section 3554(c) of title 31’’ and insert-
ing in lieu thereof ‘‘section 424(g)(1)(A) of the Fed-
eral Acquisition Reform Act of 1995’’.
(c) FEDERAL
PROPERTY
AND
ADMINISTRATIVE
SERVICES ACT OF 1949.—(1) Section 303B(h) of the
Federal Property and Administrative Services Act of 1949
(41 U.S.C. 253b(h)) is amended—
(A) in paragraph (1), by striking out ‘‘sub-
chapter V of chapter 35 of title 31’’ and inserting
in lieu thereof ‘‘title IV of the Federal Acquisition
Reform Act of 1995’’; and
452
(B) by striking out paragraph (3).
(2) Section 303B(i) of such Act (41 U.S.C. 253b(i))
is amended—
(A) in paragraph (1), by striking out ‘‘in sub-
paragraphs (A) through (F) of subsection (b)(1) of
section 3554 of title 31’’ and inserting in lieu there-
of ‘‘section 424(f)(2) of the Federal Acquisition Re-
form Act of 1995’’; and
(B) in paragraph (2), by striking out ‘‘para-
graph (1) of section 3554(c) of title 31’’ and insert-
ing in lieu thereof ‘‘section 424(g)(1)(A) of the Fed-
eral Acquisition Reform Act of 1995’’.
PART VI—EFFECTIVE DATE; INTERIM
APPOINTMENT AND RULES
SEC. 891. EFFECTIVE DATE.
This subtitle shall take effect on October 1, 1996.
SEC. 892. INTERIM APPOINTMENT.
The Board judge serving as chairman of the board
of contract appeals of the General Services Administration
on the date of the enactment of this Act shall serve as
Chairman during the two-year period beginning on the ef-
fective date of this subtitle, unless such individual resigns
such position or the position otherwise becomes vacant be-
fore the expiration of such period. The authority vested
in the President by section 853 shall take effect upon the
453
expiration of such two-year period or on the date such po-
sition is vacated, whichever occurs earlier.
SEC. 893. INTERIM RULES.
(a) RULES OF PROCEDURE.—Until such date as the
Board promulgates rules of procedure, the rules of proce-
dure of the board of contract appeals of the General Serv-
ices Administration, as in effect on the effective date of
this Act, shall be the rules of procedure of the Board.
(b) RULES REGARDING BOARD JUDGES.—Until such
date as the Board promulgates rules governing the estab-
lishment and maintenance of a register of eligible appli-
cants and the selection of Board judges, the rules of the
Armed Services Board of Contract Appeals governing the
establishment and maintenance of a register of eligible ap-
plicants and the selection of board members shall be the
rules of the Board governing the establishment and main-
tenance of a register of eligible applicants and the selec-
tion of Board judges, except that any provisions of the
rules of the Armed Services Board of Contract Appeals
that authorize any individual other than the chairman of
such board to select a Board judge shall have no effect.
454
Subtitle E—Effective Dates and
Implementation
SEC. 895. EFFECTIVE DATE AND APPLICABILITY.
(a) EFFECTIVE DATE.—Except as otherwise provided
in this title, this title and the amendments made by this
title shall take effect on the date of the enactment of this
Act.
(b) APPLICABILITY
OF
AMENDMENTS.—(1) An
amendment made by this title shall apply, in the manner
prescribed in the final regulations promulgated pursuant
to section 896 to implement such amendment, with respect
to any solicitation that is issued, any unsolicited proposal
that is received, and any contract entered into pursuant
to such a solicitation or proposal, on or after the date de-
scribed in paragraph (3).
(2) An amendment made by this title shall also apply,
to the extent and in the manner prescribed in the final
regulations promulgated pursuant to section 896 to imple-
ment such amendment, with respect to any matter related
to—
(A) a contract that is in effect on the date de-
scribed in paragraph (3);
(B) an offer under consideration on the date
described in paragraph (3); or
455
(C) any other proceeding or action that is ongo-
ing on the date described in paragraph (3).
(3) The date referred to in paragraphs (1) and (2)
is the date specified in such final regulations. The date
so specified shall be October 1, 1996, or any earlier date
that is not within 30 days after the date on which such
final regulations are published.
SEC. 896. IMPLEMENTING REGULATIONS.
(a) PROPOSED REVISIONS.—Proposed revisions to
the Federal Acquisition Regulation and such other pro-
posed regulations (or revisions to existing regulations) as
may be necessary to implement this title shall be published
in the Federal Register not later than 210 days after the
date of the enactment of this Act.
(b) PUBLIC COMMENT.—The proposed regulations
described in subsection (a) shall be made available for
public comment for a period of not less than 60 days.
(c) FINAL REGULATIONS.—Final regulations shall be
published in the Federal Register not later than 330 days
after the date of enactment of this Act.
(d) MODIFICATIONS.—Final regulations promulgated
pursuant to this section to implement an amendment
made by this title may provide for modification of an exist-
ing contract without consideration upon the request of the
contractor.
456
(e) SAVINGS PROVISIONS.—(1) Nothing in this title
shall be construed to affect the validity of any action taken
or any contract entered into before the date specified in
the regulations pursuant to section 895(b)(3) except to the
extent and in the manner prescribed in such regulations.
(2) Except as specifically provided in this title, noth-
ing in this title shall be construed to require the renegoti-
ation or modification of contracts in existence on the date
of the enactment of this Act.
(3) Except as otherwise provided in this title, a law
amended by this title shall continue to be applied accord-
ing to the provisions thereof as such law was in effect on
the day before the date of the enactment of this Act
until—
(A) the date specified in final regulations imple-
menting the amendment of that law (as promulgated
pursuant to this section); or
(B) if no such date is specified in regulations,
October 1, 1996.
457
TITLE IX—DEPARTMENT OF DE-
FENSE ORGANIZATION AND
MANAGEMENT
SEC. 901. REORGANIZATION OF OFFICE OF THE SEC-
RETARY OF DEFENSE.
(a) REORGANIZATION.—The Secretary of Defense
shall carry out in accordance with this section a reorga-
nization of the Office of the Secretary of Defense. The
reorganization shall include a substantial streamlining and
reduction in size of that office, as provided in this section.
(b) PLAN
FOR REORGANIZATION.—The Secretary
shall submit to Congress a report setting forth a com-
prehensive plan by which the Secretary will carry out the
reorganization of the Office of the Department of Defense
required by this section. The Secretary shall include in the
report identification of all provisions of law (or other con-
gressional directives) that preclude or inhibit any proposed
reorganization or streamlining of the Office of the Sec-
retary of Defense set forth in the plan. The report shall
be submitted when the budget of the President for fiscal
year 1997 is submitted to Congress.
(c) CONTENT OF PLAN.—The plan required by sub-
section (b) shall enable the Secretary to accomplish the
following:
458
(1) Reduce the number of military and civilian
personnel assigned to, or employed in, the Office of
the Secretary of Defense by 25 percent over a period
of four years, as required by subsection (e).
(2) Increase organizational efficiency and civil-
ian control.
(3) Eliminate (or substantially reduce) duplica-
tion of functions between the Office of the Secretary
of Defense and the military departments.
(4) Eliminate (or substantially reduce) duplica-
tion of functions between the Office of the Secretary
of Defense and the Joint Chiefs of Staff.
(d) DEVELOPMENT
OF PLAN.—In developing the
plan required by subsection (b), the Secretary shall—
(1) reassess the appropriate function and mis-
sion of the Office of the Secretary of Defense;
(2) reassess whether the current organization of
the Office of the Secretary of Defense provides the
most efficient and effective organization to support
the Secretary in carrying out the Secretary’s respon-
sibilities;
(3) examine alternative organizational struc-
tures for that office and alternative allocations of
functional responsibilities within that office, includ-
ing—
459
(A) a reduction in the number of Under
Secretaries of Defense;
(B) a reduction in the number of Deputy
Assistant Secretaries of Defense and Deputy
Under Secretaries of Defense; and
(C) decentralizing functions of the Office
of the Secretary of Defense; and
(4) reassess the size, number, and functional al-
location of the Defense Agencies and other Depart-
ment of Defense support organizations.
(e) PERSONNEL REDUCTION.—(1) The number of
military and civilian personnel of the Department of De-
fense who as of October 1, 1998, are assigned to, or em-
ployed in, functions in the Office of the Secretary of De-
fense (including Direct Support Activities of that Office
and the Washington Headquarters Services of the Depart-
ment of Defense) may not exceed 75 percent of the num-
ber of such personnel as of October 1, 1994.
(2) In carrying out reductions under paragraph (1),
the Secretary may not reassign functions solely in order
to evade the requirement contained in that paragraph.
(f) REDUCTION IN NUMBER AND SPECIFICATION OF
ASSISTANT SECRETARY
OF DEFENSE POSITIONS.—(1)
Section 138 of title 10, United States Code, is amended—
460
(A) in subsection (a), by striking out ‘‘eleven’’
and inserting in lieu thereof ‘‘nine’’; and
(B) by striking out subsection (b) and inserting
in lieu thereof the following:
‘‘(b) The Assistant Secretaries shall perform such du-
ties and exercise such powers as the Secretary of Defense
may prescribe.’’.
(2) Section 5315 of title 5, United States Code, is
amended by striking out ‘‘(11)’’ after ‘‘Assistant Secretar-
ies of Defense’’ and inserting in lieu thereof ‘‘(9)’’.
(g) REPEAL
OF STATUTORY ESTABLISHMENT
OF
VARIOUS OSD POSITIONS.—(1)(A) The following sections
of chapter 4 of title 10, United States Code, are repealed:
sections 133a, 134a, 137, 139, and 142.
(B) The table of sections at the beginning of such
chapter is amended by striking out the items relating to
the sections specified in paragraph (1).
(2) Section 1056 is amended by striking out sub-
section (d).
(h) SENIOR STAFF FLOOR FOR SPECIFIED ASSIST-
ANT SECRETARY OF DEFENSE.—Section 355 of the Na-
tional Defense Authorization Act for Fiscal Year 1991
(Public Law 101–510; 104 Stat. 1540) is repealed.
461
(i) CONFORMING AMENDMENTS TO TITLE 10, UNIT-
ED STATES CODE.—Title 10, United States Code, is
amended as follows:
(1) Section 131(b) is amended—
(A) by striking out paragraphs (6) and
(8); and
(B) by redesignating paragraphs (7), (9),
(10), and (11), as paragraphs (6), (7), (8), and
(9), respectively.
(2) Section 138(d) is amended by striking out
‘‘the Under Secretaries of Defense, and the Director
of Defense Research and Engineering’’ and inserting
in lieu thereof ‘‘and the Under Secretaries of De-
fense’’.
(3) Section 176(a)(3) is amended—
(A) by striking out ‘‘Assistant Secretary of
Defense for Health Affairs’’ and inserting in
lieu thereof ‘‘official in the Department of De-
fense with principal responsibility for health af-
fairs’’; and
(B) by striking out ‘‘Chief Medical Direc-
tor of the Department of Veterans Affairs’’ and
inserting in lieu thereof ‘‘Under Secretary for
Health of the Department of Veterans Affairs’’.
462
(4) Section 1216(d) is amended by striking out
‘‘Assistant Secretary of Defense for Health Affairs’’
and inserting in lieu thereof ‘‘official in the Depart-
ment of Defense with principal responsibility for
health affairs’’.
(5) Section 1587(d) is amended by striking out
‘‘Assistant Secretary of Defense for Manpower and
Logistics’’ and inserting in lieu thereof ‘‘official in
the Department of Defense with principal respon-
sibility for personnel and readiness’’.
(6) The text of section 10201 is amended to
read as follows:
‘‘The official in the Department of Defense with re-
sponsibility for overall supervision of reserve component
affairs of the Department of Defense is the official des-
ignated by the Secretary of Defense to have that respon-
sibility.’’.
(j) CONFORMING AMENDMENTS RELATING TO OPER-
ATIONAL TEST AND EVALUATION AUTHORITY.—Section
2399 of such title is amended—
(1) in subsection (a)—
(A) in paragraph (2)—
(i) by inserting ‘‘a conventional weap-
ons system that’’ after ‘‘means’’ in the
matter preceding subparagraph (A); and
463
(ii) in subparagraph (A), by striking
out ‘‘a conventional weapons system that’’;
and
(B) by adding at the end the following new
paragraph:
‘‘(3) The Secretary of Defense shall designate an offi-
cial of the Department of Defense to perform the duties
of the position referred to in this section as the ‘designated
OT&E official’.’’;
(2) in subsection (b)—
(A) by striking out ‘‘Director of Oper-
ational Test and Evaluation of the Department
of Defense’’ in paragraph (1) and inserting in
lieu thereof ‘‘designated OT&E official’’; and
(B) by striking out ‘‘Director’’ each place
it appears in paragraphs (2) and (3) and insert-
ing in lieu thereof ‘‘designated OT&E official’’;
(3) in subsection (c), by striking out ‘‘Director
of Operational Test and Evaluation of the Depart-
ment of Defense’’ and inserting in lieu thereof ‘‘des-
ignated OT&E official’’;
(4) in subsection (e), by striking out ‘‘Director’’
each place it appears and inserting in lieu thereof
‘‘designated OT&E official’’;
(5) by striking out subsection (g); and
464
(6) by redesignating subsection (h) as sub-
section (g).
(k) OTHER
CONFORMING
AMENDMENT.—Section
1211(b)(2) of the National Defense Authorization Act for
Fiscal Year 1988 and 1989 (P.L. 100–180; 101 Stat
1155; 10 U.S.C. 167 note) is amended by striking out
‘‘the Assistant Secretary of Defense for Special Oper-
ations and Low Intensity Conflict’’ and inserting in lieu
thereof ‘‘the official designated by the Secretary of De-
fense to have principal responsibility for matters relating
to special operations and low intensity conflict’’.
SEC. 902. RESTRUCTURING OF DEPARTMENT OF DEFENSE
ACQUISITION 
ORGANIZATION 
AND
WORKFORCE.
(a) RESTRUCTURING
REPORT.—Not later than
March 1, 1996, the Secretary of Defense shall submit to
Congress a report on the acquisition organization and
workforce of the Department of Defense. The report shall
include—
(1) the plan described in subsection (b); and
(2) the assessment of streamlining and restruc-
turing options described in subsection (c).
(b) PLAN FOR RESTRUCTURING.—(1) The Secretary
shall include in the report under subsection (a) a plan on
how to restructure the current acquisition organization of
465
the Department of Defense in a manner that would enable
the Secretary to accomplish the following:
(A) Reduce the number of military and civilian
personnel assigned to, or employed in, acquisition or-
ganizations of the Department of Defense by 25 per-
cent over a period of four years, as required by sub-
section (d).
(B) Eliminate duplication of functions among
existing acquisition organizations of the Department
of Defense.
(C) Maximize opportunity for consolidation
among acquisition organizations of the Department
of Defense to reduce management overhead.
(2) In the report, the Secretary shall also identify any
statutory requirement or congressional directive that in-
hibits any proposed restructuring plan or reduction in the
size of the defense acquisition organization.
(3) In designing the plan under paragraph (1), the
Secretary shall give full consideration to the process effi-
ciencies expected to be achieved through the implementa-
tion of the Federal Acquisition Streamlining Act of 1994
(Public Law 103–355) and other ongoing initiatives to in-
crease the use of commercial practices and reduce contract
overhead in the defense procurement system.
466
(c) ASSESSMENT
OF SPECIFIED RESTRUCTURING
OPTIONS.—The Secretary shall include in the report
under subsection (a) a detailed assessment of each of the
following options for streamlining and restructuring the
existing defense acquisition organization, together with a
specific recommendation as to whether each such option
should be implemented:
(1) Consolidation of certain functions of the
Defense Contract Audit Agency and the Defense
Contract Management Command.
(2) Contracting for performance of a significant
portion of the workload of the Defense Contract
Audit Agency and other Defense Agencies that per-
form acquisition functions.
(3) Consolidation or selected elimination of De-
partment of Defense acquisition organizations.
(4) Any other defense acquisition infrastructure
streamlining or restructuring option the Secretary
may determine.
(d) REDUCTION OF ACQUISITION WORKFORCE.—(1)
Effective as of October 1, 1998, the total number of de-
fense acquisition personnel may not exceed 75 percent of
the total number of defense acquisition personnel as of Oc-
tober 1, 1994.
467
(2) In carrying out paragraph (1), the Secretary of
Defense shall exempt personnel who possess technical
competence in trade-skill maintenance and repair positions
involved in performing depot maintenance functions for
the Department of Defense.
(3) In carrying out paragraph (1), the Secretary of
Defense shall accomplish reductions in defense acquisition
personnel positions during fiscal year 1996 so that the
total number of such personnel as of October 1, 1996, is
less than the total number of such personnel as of October
1, 1995, by at least 30,000.
(4) For purposes of this section, the term ‘‘defense
acquisition personnel’’ means military and civilian person-
nel of the Department of Defense assigned to, or employed
in, acquisition organizations of the Department of De-
fense.
(e) ACQUISITION
ORGANIZATION
DEFINED.—For
purposes of this section, acquisition organizations of the
Department of Defense are those organizations specified
in Department of Defense Instruction Numbered 5000.58,
dated January 14, 1992.
468
SEC. 903. PLAN FOR INCORPORATION OF DEPARTMENT OF
ENERGY NATIONAL SECURITY FUNCTIONS IN
DEPARTMENT OF DEFENSE.
(a) REPORT REQUIRED.—The Secretary of Defense
shall submit to Congress a report setting forth the Sec-
retary’s plan for the incorporation into the Department
of Defense of the national security programs of the De-
partment of Energy. The plan submitted shall be one
which could be implemented if the Department of Energy
is abolished and the national security programs of that
department are transferred to the Department of Defense
and consolidated with programs of the Department of De-
fense.
(b) MATTERS TO BE INCLUDED.—The plan submit-
ted in the report under subsection (a) shall include the
following:
(1) A detailed plan for the integration into the
Department of Defense of the offices and labora-
tories of the Department of Energy which could be
anticipated to be transferred to the Department of
Defense as part of such a transfer of functions.
(2) An assessment of the personnel end-
strength reductions estimated to be achieved as a re-
sult of such a transfer of functions.
(3) An assessment of costs, or savings, associ-
ated with the various transfer of function options.
469
(4) An identification of all applicable provisions
of law that may inhibit or preclude such a transfer
of functions.
(c) PRESERVATION
OF INTEGRITY
OF DOE NA-
TIONAL SECURITY PROGRAMS.—In developing the plan
under subsection (a), the Secretary shall make every effort
to ensure that the mission and functioning of the national
security programs of the Department of Energy are not
unduly affected adversely during the transfer of those
functions to the Department of Defense and the consolida-
tion of those functions into activities of the Department.
(d) SUBMISSION OF REPORT.—The report required
under subsection (a) shall be submitted not later than
February 1, 1996.
SEC. 904. CHANGE IN TITLES OF CERTAIN MARINE CORPS
GENERAL 
OFFICER 
BILLETS 
RESULTING
FROM 
REORGANIZATION 
OF 
THE 
HEAD-
QUARTERS, MARINE CORPS.
(a) HEADQUARTERS, MARINE CORPS, FUNCTION;
COMPOSITION.—Subsection (b) of section 5041 of title 10,
United States Code, is amended by striking out para-
graphs (2) through (5) and inserting in lieu thereof the
following:
‘‘(2) The Vice Commandant of the Marine
Corps.
470
‘‘(3) The Director of the Marine Corps Staff.
‘‘(4) The Deputy Commandants of the Marine
Corps.
‘‘(5) The Assistant Commandants of the Marine
Corps.’’.
(b) VICE COMMANDANT.—(1) Section 5044 of such
title is amended by striking out ‘‘Assistant Commandant’’
each place it appears and inserting in lieu thereof ‘‘Vice
Commandant’’.
(2) The heading of such section is amended to read
as follows:
‘‘§ 5044. Vice Commandant of the Marine Corps’’.
(c) DIRECTOR OF THE MARINE CORPS STAFF; DEP-
UTY AND ASSISTANT COMMANDANTS.—Section 5045 of
such title is amended to read as follows:
‘‘§ 5045. Director of the Marine Corps Staff; Deputy
and Assistant Commandants
‘‘(a) There are in the Headquarters, Marine Corps,
the following:
‘‘(1) A Director of the Marine Corps Staff.
‘‘(2) Not more than five Deputy Commandants
of the Marine Corps.
‘‘(3) Not more than three Assistant Com-
mandants of the Marine Corps.
471
‘‘(b) The officers specified in subsection (a) shall be
detailed by the Secretary of the Navy from officers on the
active-duty list of the Marine Corps.’’.
(d) CLERICAL AMENDMENT.—The items relating to
sections 5044 and 5045 in the table of sections at the be-
ginning of chapter 506 of such title are amended to read
as follows:
‘‘5044. Vice Commandant of the Marine Corps.
‘‘5045. Director of the Marine Corps Staff; Deputy and Assistant Com-
mandants.’’.
SEC. 905. INCLUSION OF INFORMATION RESOURCES MAN-
AGEMENT COLLEGE IN THE NATIONAL DE-
FENSE UNIVERSITY.
(a) TECHNICAL AMENDMENT AND ADDITION OF IN-
FORMATION RESOURCES MANAGEMENT COLLEGE TO THE
DEFINITION OF THE NATIONAL DEFENSE UNIVERSITY.—
Section 1595(d)(2) of title 10, United States Code, is
amended by striking out ‘‘the Institute for National Stra-
tegic Study,’’ and inserting in lieu thereof ‘‘the Institute
for National Strategic Studies, the Information Resources
Management College,’’.
(b) CONFORMING AMENDMENT.—Section 2162(d)(2)
of such title is amended by inserting ‘‘the Institute for
National Strategic Studies, the Information Resources
Management College,’’ after ‘‘the Armed Forces Staff Col-
lege,’’.
472
SEC. 906. EMPLOYMENT OF CIVILIANS AT THE ASIA-PA-
CIFIC CENTER FOR SECURITY STUDIES.
Section 1595 of title 10, United States Code, is
amended—
(1) in subsection (c), by adding at the end the
following new paragraph:
‘‘(4) The Asia-Pacific Center for Security Stud-
ies.’’; and
(2) by adding at the end the following new sub-
section:
‘‘(f) APPLICATION TO DIRECTOR AND DEPUTY DI-
RECTOR AT ASIA-PACIFIC CENTER FOR SECURITY STUD-
IES.—In the case of the Asia-Pacific Center for Security
Studies, this section also applies with respect to the Direc-
tor and the Deputy Director.’’.
SEC. 907. CONTINUED OPERATION OF UNIFORMED SERV-
ICES UNIVERSITY OF THE HEALTH SCIENCES.
(a) CLOSURE PROHIBITED.—In light of the impor-
tant role of the Uniformed Services University of the
Health Sciences in providing trained health care providers
for the uniformed services, Congress reaffirms the require-
ment contained in section 922 of the National Defense Au-
thorization Act for Fiscal Year 1995 (Public Law 103–
337; 108 Stat 2829) that the Uniformed Services Univer-
sity of the Health Sciences may not be closed.
473
(b) BUDGETARY COMMITMENT TO CONTINUATION.—
It is the sense of Congress that the Secretary of Defense
should budget for the operation of the Uniformed Services
University of the Health Sciences during fiscal year 1997
at a level at least equal to the level of operations conducted
at the University during fiscal year 1995.
SEC. 
908. 
REDESIGNATION 
OF 
ADVANCED 
RESEARCH
PROJECTS AGENCY.
(a) REDESIGNATION.—The agency in the Depart-
ment of Defense known as the Advanced Research
Projects Agency shall after the date of the enactment of
this Act be designated as the Defense Advanced Research
Projects Agency.
(b) REFERENCES.—Any reference in any law, regula-
tion, document, record, or other paper of the United
States to the Advanced Research Projects Agency shall be
considered to be a reference to the Defense Advanced Re-
search Projects Agency.
SEC. 909. NAVAL NUCLEAR PROPULSION PROGRAM.
No department or agency may regulate or direct any
change in function for facilities under the Naval Nuclear
Propulsion Program unless otherwise permitted or speci-
fied by law.
474
SEC. 910. AVIATION TESTING CONSOLIDATION.
(a) LIMITATION.—The Secretary of the Army may
not consolidate the Aviation Technical Test Center, Fort
Rucker, Alabama, with any other aviation testing facility
until 60 days after the date on which a report containing
the results of the evaluation of such consolidation de-
scribed in subsection (b) is received by the congressional
defense committees.
(b) INDEPENDENT EVALUATION.—The Secretary of
the Army shall provide for an evaluation by the Institute
for Defense Analyses (a Federal contract research center)
of the proposal of the Test and Evaluation Command of
the Army to relocate the Aviation Technical Test Center
to Yuma Proving Ground, Arizona. The evaluation of such
proposal shall include consideration of the following:
(1) A review and validation of studies con-
ducted by the Army Materiel Command and the
Army Test and Evaluation Command of the pro-
posed relocation.
(2) The effect on, and cost of, maintenance and
logistics capability (including maintenance of a parts
inventory) to support the test evaluation fleet.
(3) The availability of facilities and infrastruc-
ture necessary to conduct the aviation testing mis-
sion at Yuma Proving Ground.
475
(4) The availability of engineers and mainte-
nance technicians to support the aviation testing
mission at Yuma Proving Ground.
(5) The effect on current and planned aircraft
programs.
(6) Consistency with the efforts of the Army to
become the Department of Defense leader for ro-
tary-wing aircraft.
(7) Potential savings, including the time period
over which such savings could be realized.
(8) Comparison of live-fire testing with com-
puter-simulated testing.
(c) TIME REQUIREMENT FOR COMPLETION OF EVAL-
UATION.—The evaluation under subsection (b) shall be
completed not later than 120 days after the date of the
enactment of this Act.
TITLE X—GENERAL PROVISIONS
Subtitle A—Financial Matters
SEC. 1001. TRANSFER AUTHORITY.
(a) AUTHORITY TO TRANSFER AUTHORIZATIONS.—
(1) Upon determination by the Secretary of Defense that
such action is necessary in the national interest, the Sec-
retary may transfer amounts of authorizations made avail-
able to the Department of Defense in this division for fis-
cal year 1996 between any such authorizations for that
476
fiscal year (or any subdivisions thereof). Amounts of au-
thorizations so transferred shall be merged with and be
available for the same purposes as the authorization to
which transferred.
(2) The total amount of authorizations that the Sec-
retary of Defense may transfer under the authority of this
section may not exceed $2,000,000,000.
(b) LIMITATIONS.—The authority provided by this
section to transfer authorizations—
(1) may only be used to provide authority for
items that have a higher priority than the items
from which authority is transferred; and
(2) may not be used to provide authority for an
item that has been denied authorization by Con-
gress.
(c) EFFECT
ON
AUTHORIZATION
AMOUNTS.—A
transfer made from one account to another under the au-
thority of this section shall be deemed to increase the
amount authorized for the account to which the amount
is transferred by an amount equal to the amount trans-
ferred.
SEC. 1002. INCORPORATION OF CLASSIFIED ANNEX.
(a) STATUS OF CLASSIFIED ANNEX.—The Classified
Annex prepared by the Committee on National Security
of the House of Representatives to accompany the bill
477
H.R. 1530 of the One Hundred Fourth Congress and
transmitted to the President is hereby incorporated into
this Act.
(b) CONSTRUCTION WITH OTHER PROVISIONS OF
ACT.—The amounts specified in the Classified Annex are
not in addition to amounts authorized to be appropriated
by other provisions of this Act.
(c) LIMITATION ON USE OF FUNDS.—Funds appro-
priated pursuant to an authorization contained in this Act
that are made available for a program, project, or activity
referred to in the Classified Annex may only be expended
for such program, project, or activity in accordance with
such terms, conditions, limitations, restrictions, and re-
quirements as are set out for that program, project, or
activity in the Classified Annex.
(d) DISTRIBUTION
OF CLASSIFIED ANNEX.—The
President shall provide for appropriate distribution of the
Classified Annex, or of appropriate portions of the annex,
within the executive branch of the Government.
SEC. 
1003. 
IMPROVED 
FUNDING 
MECHANISMS 
FOR
UNBUDGETED OPERATIONS.
(a) REVISION OF FUNDING MECHANISM.—(1) Chap-
ter 3 of title 10, United States Code, is amended by strik-
ing out section 127a and inserting in lieu thereof the fol-
lowing:
478
‘‘§ 127a. Operations for which funds are not provided
in advance: funding mechanisms
‘‘(a) IN GENERAL.—(1) The Secretary of Defense
shall use the procedures prescribed by this section with
respect to any operation of the Department of Defense—
‘‘(A) that involves the deployment (other than
for a training exercise) of elements of the armed
forces for a purpose other than a purpose for which
funds have been specifically provided in advance; or
‘‘(B) that involves humanitarian assistance, dis-
aster relief, or support for law enforcement (includ-
ing immigration control) for which funds have not
been specifically provided in advance.
‘‘(2) Whenever any operation described in paragraph
(1) is commenced, the Secretary of Defense shall designate
and identify that operation for the purposes of this section
and shall promptly notify Congress of that designation
(and of the identification of the operation).
‘‘(3) This section does not provide authority for the
President or the Secretary of Defense to carry out any
operation, but establishes mechanisms for the Department
of Defense by which funds are provided for operations that
the armed forces are required to carry out under some
other authority.
‘‘(b) WAIVER
OF REQUIREMENT TO REIMBURSE
SUPPORT UNITS.—(1) The Secretary of Defense shall di-
479
rect that, when a unit of the armed forces participating
in an operation described in subsection (a) receives serv-
ices from an element of the Department of Defense that
operates through the Defense Business Operations Fund
(or a successor fund), such unit of the armed forces may
not be required to reimburse that element for the incre-
mental costs incurred by that element in providing such
services, notwithstanding any other provision of law or any
Government accounting practice.
‘‘(2) The amounts which but for paragraph (1) would
be required to be reimbursed to an element of the Depart-
ment of Defense (or a fund) shall be recorded as an ex-
pense attributable to the operation and shall be accounted
for separately.
‘‘(c) TRANSFER AUTHORITY.—(1) Whenever there is
an operation of the Department of Defense described in
subsection (a), the Secretary of Defense may, subject to
the provisions of appropriations Acts, transfer amounts
described in paragraph (3) to accounts from which incre-
mental expenses for that operation were incurred in order
to reimburse those accounts for those incremental ex-
penses. Amounts so transferred shall be merged with and
be available for the same purposes as the accounts to
which transferred.
480
‘‘(2) The total amount that the Secretary of Defense
may transfer under the authority of this section in any
fiscal year is $200,000,000.
‘‘(3) Transfers under this subsection may only be
made from amounts appropriated to the Department of
Defense for any fiscal year that remain available for obli-
gation from any of the following accounts:
‘‘(A) Environmental Restoration, Defense.
‘‘(B) Cooperative Threat Reduction programs.
‘‘(C) Overseas Humanitarian, Disaster, and
Civic Aid (OHDACA) programs.
‘‘(D) Operations and Maintenance, Defense-
Wide (but only from funds available for administra-
tion and service-wide activities).
‘‘(4) The authority provided by this subsection is in
addition to any other authority provided by law authoriz-
ing the transfer of amounts available to the Department
of Defense. However, the Secretary may not use any such
authority under another provision of law for a purpose de-
scribed in paragraph (1) if there is authority available
under this subsection for that purpose.
‘‘(5) The authority provided by this subsection to
transfer amounts may not be used to provide authority
for an activity that has been denied authorization by Con-
gress.
481
‘‘(6) A transfer made from one account to another
under the authority of this subsection shall be deemed to
increase the amount authorized for the account to which
the amount is transferred by an amount equal to the
amount transferred.
‘‘(d) FINANCIAL PLAN.—(1) Within 30 days after the
beginning of an operation described in subsection (a), the
Secretary of Defense shall submit to Congress a financial
plan for the operation that sets forth the manner by which
the Secretary proposes to obtain funds for the cost to the
United States of the operation. The plan shall specify in
detail how the Secretary proposes to restore balances in
the Defense Business Operations Fund (or a successor
fund) to the levels that would have been anticipated but
for the provisions of subsection (b). The Secretary may
not include in such a plan a means to restore such bal-
ances that is prohibited by paragraph (2) or (4).
‘‘(2) The Secretary may not restore (or propose in
a plan under paragraph (1) to restore) balances in the
Defense Business Operations Fund through increases in
rates charged by that fund in order to compensate for
costs incurred and not reimbursed due to subsection (b).
‘‘(3) If the Secretary of Defense transfers funds
under subsection (c), the Secretary shall submit to Con-
gress, within 30 days of such transfer, a plan for the res-
482
toration of the balance in the each account from which
the transfer was made to the level that would have been
the case but for the transfer.
‘‘(4) The Secretary may not restore (or propose in
a plan under paragraph (1) or (3) to restore) balances
in any the Defense Business Operations Fund or any
other fund or account through the use of unobligated
amounts in an appropriation made for operation and
maintenance that are available within that appropriation
for an account (known as a budget activity 1 account) that
is specified as being for operating forces.
‘‘(e) SUBMISSION OF REQUESTS FOR SUPPLEMENTAL
APPROPRIATIONS.—(1) Whenever there is an operation
described in subsection (a), the President shall submit to
Congress a request for the enactment of supplemental ap-
propriations for the then-current fiscal year, to be des-
ignated as an emergency supplemental appropriations, in
order to provide funds to replenish the Defense Business
Operations Fund or any other fund or account of the De-
partment of Defense from which funds for the incremental
expenses of that operation were derived under this section.
‘‘(2) A request under paragraph (1) shall be submit-
ted not later than the earlier of (A) the time at which
incremental 
expenses 
for 
the 
operation 
exceed
$10,000,000, or (B) 90 days after the date on which the
483
operation begins. The request shall be submitted as a sep-
arate request from any other legislative proposal.
‘‘(f) INCREMENTAL COSTS.—For purposes of this
section, incremental costs of the Department of Defense
with respect to an operation are the costs of the Depart-
ment that are directly attributable to the operation (and
would not have been incurred but for the operation).
‘‘(g) RELATIONSHIP
TO WAR POWERS RESOLU-
TION.—This section may not be construed as altering or
superseding the War Powers Resolution. This section does
not provide authority to conduct any military operation.
‘‘(h) GAO COMPLIANCE REVIEWS.—The Comptroller
General of the United States shall from time to time, and
when requested by a committee of Congress, conduct a
review of the defense funding structure under this section
to determine whether the Department of Defense is com-
plying with the requirements and limitations of this sec-
tion.
‘‘§ 127b. Budgeting for ongoing operations
‘‘(a) REQUIREMENT FOR INCLUSION IN BUDGET.—
In the case of an operation of the Department of Defense
described in subsection (c), the President shall include
with the budget submitted to Congress pursuant to section
1105 of title 31 for the next fiscal year a specific request
for enactment of legislation to provide for the provision
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of funds for such operation for that fiscal year in a man-
ner that will result in there not being a lower amount of
funds available to the Department of Defense for that fis-
cal year than would be the case if that operation were not
carried out during that year. Such a request shall include
one or more of the following:
‘‘(1) A request for enactment of appropriation
of funds for the incremental costs for that operation
that are expected to be incurred by the Department
of Defense during the fiscal year for which the budg-
et is submitted, with such funds to be provided in,
and charged to, a budget function other than the na-
tional defense budget function (function 050).
‘‘(2) A request for enactment of appropriation
of funds for the incremental costs for that operation
that are expected to be incurred by the Department
of Defense during the fiscal year for which the budg-
et is submitted, with such designations or waivers as
may be necessary to ensure that (if enacted) such
appropriations are not counted against the total
amount of funds for the Department of Defense, or
for the national defense budget function, for purpose
of any statutory limitation or restriction.
‘‘(3) A request for enactment of rescissions.