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(a) and the contract clause inserted into a covered con-
tract pursuant to subsection (b), and the availability of 
the remedies provided in subsection (d), shall not be re-
duced or diminished by the failure of a higher or lower 
tier contractor under such contract to comply with such 
requirements, or by a failure of the contracting activity 
to provide the oversight required by subsection (c).’’. 
(b) 
REVISED
REGULATIONS
AND
CONTRACT 
CLAUSE.— 
(1) DEADLINE FOR REGULATIONS.—Not later 
than 60 days after the date of the enactment of this 
Act, the Secretary of Defense shall revise the regula-
tions prescribed pursuant to section 862 of the Na-
tional Defense Authorization Act for Fiscal Year 
2008 (Public Law 110–181; 10 U.S.C. 2302 note) 
to incorporate the requirements of the amendments 
made by subsection (a). 
(2) COMMENCEMENT OF APPLICABILITY OF RE-
VISIONS.—The revision of regulations under para-
graph (1) shall apply to the following: 
(A) Any contract that is awarded on or 
after the date that is 120 days after the date 
of the enactment of this Act. 
(B) Any task or delivery order that is 
issued on or after the date that is 120 days 
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after the date of the enactment of this Act pur-
suant to a contract that is awarded before, on, 
or after the date that is 120 days after the date 
of the enactment of this Act. 
(3) COMMENCEMENT OF INCLUSION OF CON-
TRACT CLAUSE.—A contract clause that reflects the 
revision of regulations required by the amendments 
made by subsection (a) shall be inserted, as required 
by such section 862, into the following: 
(A) Any contract described in paragraph 
(2)(A). 
(B) Any task or delivery order described in 
paragraph (2)(B). 
SEC. 832. EXTENSION OF REGULATIONS ON CONTRACTORS 
PERFORMING 
PRIVATE 
SECURITY 
FUNC-
TIONS TO AREAS OF OTHER SIGNIFICANT 
MILITARY OPERATIONS. 
(a) AREAS OF OTHER SIGNIFICANT MILITARY OPER-
ATIONS.—Section 862 of the National Defense Authoriza-
tion Act for Fiscal Year 2008 (Public Law 110–181; 10 
U.S.C. 2302 note), as amended by section 831, is further 
amended— 
(1) by striking ‘‘combat operations’’ each place 
it appears and inserting ‘‘combat operations or other 
significant military operations’’; and 
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(2) in subsection (f), as redesignated by such 
section 831— 
(A) by redesignating paragraphs (2), (3), 
and (4) as paragraphs (3), (4), and (5), respec-
tively; 
(B) in paragraph (1)— 
(i) by inserting ‘‘either’’ after ‘‘consti-
tuting’’; and 
(ii) by adding at the end the fol-
lowing: ‘‘In making designations under this 
paragraph, the Secretary shall ensure that 
an area is not designated in whole or part 
as both an area of combat operations and 
an area of other significant military oper-
ations.’’; and 
(C) by inserting after paragraph (1) the 
following new paragraph (2): 
‘‘(2) OTHER
SIGNIFICANT
MILITARY
OPER-
ATIONS.—For purposes of this section, the term 
‘other significant military operations’ means activi-
ties, other than combat operations, as part of an 
overseas contingency operation that are carried out 
by United States Armed Forces in an uncontrolled 
or unpredictable high-threat environment where per-
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sonnel performing security functions may be called 
upon to use deadly force.’’. 
(b) ADDITIONAL AREAS CONSIDERED FOR DESIGNA-
TION.— 
(1) DETERMINATION REQUIRED FOR CERTAIN 
AREAS.—Not later than 150 days after the date of 
the enactment of this Act, the Secretary of Defense 
shall make a written determination for each of the 
following areas regarding whether or not the area 
constitutes an area of combat operations or an area 
of other significant military operations for purposes 
of designation as such an area under section 862 of 
the National Defense Authorization Act for Fiscal 
Year 2008 (Public Law 110–181; 10 U.S.C. 2302 
note), as amended by this section: 
(A) The Horn of Africa region. 
(B) Yemen. 
(C) The Philippines. 
(2) SUBMISSION TO CONGRESS.—Not later than 
180 days after the date of the enactment of this Act, 
the Secretary of Defense shall submit to the con-
gressional defense committees a copy of each written 
determination under paragraph (1), together with an 
explanation of the basis for such determination. 
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(c) LIMITATION AND EXCEPTION.—Section 862 of 
the National Defense Authorization Act for Fiscal Year 
2008 (Public Law 110–181; 10 U.S.C. 2302 note), as 
amended by subsection (a) and by section 831, is further 
amended— 
(1) by redesignating subsection (g), as redesig-
nated by such section 831, as subsection (h) and in-
serting after subsection (f) the following new sub-
section (g): 
‘‘(g) LIMITATION.—With respect to an area of other 
significant military operations, the requirements of this 
section shall apply only upon agreement of the Secretary 
of Defense and the Secretary of State. An agreement of 
the Secretaries under this subsection may be made only 
on an area-by-area basis. With respect to an area of com-
bat operations, the requirements of this section shall al-
ways apply.’’; and 
(2) in subsection (h), as so redesignated— 
(A) by striking the subsection designation 
and ‘‘EXCEPTION.—’’ and inserting the fol-
lowing: 
‘‘(h) EXCEPTIONS.— 
‘‘(1) INTELLIGENCE ACTIVITIES.—’’; and 
(B) by adding at the end the following new 
paragraph: 
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‘‘(2) NONGOVERNMENTAL
ORGANIZATIONS.— 
The requirements of this section shall not apply to 
a nonprofit nongovernmental organization receiving 
grants or cooperative agreements for activities con-
ducted within an area of other significant military 
operations if the Secretary of Defense and the Sec-
retary of State agree that such organization may be 
exempted. An exemption may be granted by the 
agreement of the Secretaries under this paragraph 
on an organization-by-organization or area-by-area 
basis. Such an exemption may not be granted with 
respect to an area of combat operations.’’. 
(d) REPORT ON IMPLEMENTATION.—Not later than 
180 days after a designation of an area as an area of com-
bat operations or an area of other significant military op-
erations pursuant to subsection (b)(2), the Secretary of 
Defense, in coordination with the Secretary of State, shall 
submit to Congress a report on steps taken or planned 
to be taken to implement the regulations prescribed under 
section 862 of the National Defense Authorization Act for 
Fiscal Year 2008 (Public Law 110–181; 10 U.S.C. 2302 
note) in such area. In the case of any agreement by the 
Secretaries to limit the applicability of such section or ex-
empt nongovernmental organizations from such section, 
pursuant to subsections (g) or (h)(1) of such section (as 
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added by subsection (c)), the report shall document the 
basis for such agreement. 
SEC. 833. STANDARDS AND CERTIFICATION FOR PRIVATE 
SECURITY CONTRACTORS. 
(a) REVIEW OF THIRD-PARTY STANDARDS AND CER-
TIFICATION PROCESSES.—Not later than 90 days after 
the date of the enactment of this Act, the Secretary of 
Defense shall— 
(1) determine whether the private sector has 
developed— 
(A) operational and business practice 
standards applicable to private security contrac-
tors; and 
(B) third-party certification processes for 
determining whether private security contrac-
tors adhere to standards described in subpara-
graph (A); and 
(2) review any standards and processes identi-
fied pursuant to paragraph (1) to determine whether 
the application of such standards and processes will 
make a substantial contribution to the successful 
performance of private security functions in areas of 
combat operations or other significant military oper-
ations. 
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(b) REVISED REGULATIONS.—Not later than 270 
days after the date of the enactment of this Act, the Sec-
retary of Defense shall revise the regulations promulgated 
under section 862 of the National Defense Authorization 
Act for Fiscal Year 2008 (Public Law 110–181; 10 U.S.C. 
2302 note) to ensure that such regulations— 
(1) establish criteria for defining standard prac-
tices for the performance of private security func-
tions, which shall reflect input from industry rep-
resentatives as well as the Inspector General of the 
Department of Defense; and 
(2) establish criteria for weapons training pro-
grams for contractors performing private security 
functions, including minimum requirements for 
weapons training programs of instruction and min-
imum qualifications for instructors for such pro-
grams. 
(c) INCLUSION OF THIRD-PARTY STANDARDS AND 
CERTIFICATIONS IN REVISED REGULATIONS.— 
(1) STANDARDS.—If the Secretary determines 
that the application of operational and business 
practice standards identified pursuant to subsection 
(a)(1)(A) will make a substantial contribution to the 
successful performance of private security functions 
in areas of combat operations or other significant 
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military operations, the revised regulations promul-
gated pursuant to subsection (b) shall incorporate a 
requirement to comply with such standards, subject 
to such exceptions as the Secretary may determine 
to be necessary. 
(2) CERTIFICATIONS.—If the Secretary deter-
mines that the application of a third-party certifi-
cation process identified pursuant to subsection 
(a)(1)(B) will make a substantial contribution to the 
successful performance of private security functions 
in areas of combat operations or other significant 
military operations, the revised regulations promul-
gated pursuant to subsection (b) may provide for the 
consideration of such certifications as a factor in the 
evaluation of proposals for award of a covered con-
tract for the provision of private security functions, 
subject to such exceptions as the Secretary may de-
termine to be necessary. 
(d) DEFINITIONS.—In this section: 
(1) COVERED CONTRACT.—The term ‘‘covered 
contract’’ means— 
(A) a contract of the Department of De-
fense for the performance of services; 
(B) a subcontract at any tier under such 
a contract; or 
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(C) a task order or delivery order issued 
under such a contract or subcontract. 
(2) 
CONTRACTOR.—The 
term 
‘‘contractor’’ 
means, with respect to a covered contract, the con-
tractor or subcontractor carrying out the covered 
contract. 
(3) PRIVATE SECURITY FUNCTIONS.—The term 
‘‘private security functions’’ means activities en-
gaged in by a contractor under a covered contract as 
follows: 
(A) Guarding of personnel, facilities, or 
property of a Federal agency, the contractor or 
subcontractor, or a third party. 
(B) Any other activity for which personnel 
are required to carry weapons in the perform-
ance of their duties. 
(e) EXCEPTION.—The requirements of this section 
shall not apply to contracts entered into by elements of 
the intelligence community in support of intelligence ac-
tivities. 
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SEC. 834. ENHANCEMENTS OF AUTHORITY OF SECRETARY 
OF DEFENSE TO REDUCE OR DENY AWARD 
FEES TO COMPANIES FOUND TO JEOPARDIZE 
THE HEALTH OR SAFETY OF GOVERNMENT 
PERSONNEL. 
(a) EXPANSION OF DISPOSITIONS SUBJECT TO AU-
THORITY.—Section 823 of the National Defense Author-
ization Act for Fiscal Year 2010 (Public Law 111–84; 123 
Stat. 2412; 10 U.S.C. 2302 note) is amended— 
(1) in subsection (c), by adding at the end the 
following new paragraph: 
‘‘(5) In an administrative proceeding, a final 
determination of contractor fault by the Secretary of 
Defense pursuant to subsection (d).’’; 
(2) by redesignating subsections (d) and (e) as 
subsections (e) and (f), respectively; and 
(3) by inserting after subsection (c) the fol-
lowing new subsection (d): 
‘‘(d) DETERMINATIONS OF CONTRACTOR FAULT BY 
SECRETARY OF DEFENSE.— 
‘‘(1) IN GENERAL.—In any case described by 
paragraph (2), the Secretary of Defense shall— 
‘‘(A) provide for an expeditious inde-
pendent investigation of the causes of the seri-
ous bodily injury or death alleged to have been 
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caused by the contractor as described in that 
paragraph; and 
‘‘(B) make a final determination, pursuant 
to procedures established by the Secretary for 
purposes of this subsection, whether the con-
tractor, in the performance of a covered con-
tract, caused such serious bodily injury or death 
through gross negligence or with reckless dis-
regard for the safety of civilian or military per-
sonnel of the Government. 
‘‘(2) COVERED CASES.—A case described in this 
paragraph is any case in which the Secretary has 
reason to believe that— 
‘‘(A) a contractor, in the performance of a 
covered contract, may have caused the serious 
bodily injury or death of any civilian or military 
personnel of the Government; and 
‘‘(B) such contractor is not subject to the 
jurisdiction of United States courts. 
‘‘(3) CONSTRUCTION
OF
DETERMINATION.—A 
final determination under this subsection may be 
used only for the purpose of evaluating contractor 
performance, and shall not be determinative of fault 
for any other purpose.’’. 
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(b) DEFINITION OF CONTRACTOR.—Paragraph (1) of 
subsection (e) of such section, as redesignated by sub-
section (a)(2) of this section, is amended to read as fol-
lows: 
‘‘(1) The term ‘contractor’ means a company 
awarded a covered contract and a subcontractor at 
any tier under such contract.’’. 
(c) TECHNICAL AMENDMENT.—Subsection (c) of 
such section is further amended in the matter preceding 
paragraph (1) by striking ‘‘subsection (a)’’ and inserting 
‘‘subsection (b)’’. 
(d) INCLUSION
OF
DETERMINATIONS
OF
CON-
TRACTOR FAULT IN DATABASE FOR FEDERAL AGENCY 
CONTRACT AND GRANT OFFICERS AND SUSPENSION AND 
DEBARMENT OFFICIALS.—Section 872(c)(1) of the Dun-
can Hunter National Defense Authorization Act for Fiscal 
Year 2009 (Public Law 110–417; 122 Stat. 4556) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(E) In an administrative proceeding, a 
final determination of contractor fault by the 
Secretary of Defense pursuant to section 
823(d) of the National Defense Authorization 
Act for Fiscal Year 2010 (10 U.S.C. 2302 
note).’’. 
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(e) EFFECTIVE DATE.—The requirements of section 
823 of the National Defense Authorization Act for Fiscal 
Year 2010, as amended by subsections (a) through (c), 
shall apply with respect to the following: 
(1) Any contract entered into on or after the 
date of the enactment of this Act. 
(2) Any task order or delivery order issued on 
or after the date of the enactment of this Act under 
a contract entered into before, on, or after that date. 
SEC. 835. ANNUAL JOINT REPORT AND COMPTROLLER 
GENERAL REVIEW ON CONTRACTING IN IRAQ 
AND AFGHANISTAN. 
Section 863 of the National Defense Authorization 
Act for Fiscal Year 2008 (Public Law 110–181; 10 U.S.C. 
2302 note) is amended to read as follows: 
‘‘SEC. 863. ANNUAL JOINT REPORT AND COMPTROLLER 
GENERAL REVIEW ON CONTRACTING IN IRAQ 
AND AFGHANISTAN. 
‘‘(a) JOINT REPORT REQUIRED.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (6), every 12 months, the Secretary of De-
fense, the Secretary of State, and the Administrator 
of the United States Agency for International Devel-
opment shall submit to the relevant committees of 
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Congress a joint report on contracts in Iraq or Af-
ghanistan. 
‘‘(2) PRIMARY MATTERS COVERED.—A report 
under this subsection shall, at a minimum, cover the 
following with respect to contracts in Iraq and Af-
ghanistan during the reporting period: 
‘‘(A) Total number of contracts awarded. 
‘‘(B) Total number of active contracts. 
‘‘(C) Total value of all contracts awarded. 
‘‘(D) Total value of active contracts. 
‘‘(E) The extent to which such contracts 
have used competitive procedures. 
‘‘(F) Total number of contractor personnel 
working on contracts at the end of each quarter 
of the reporting period. 
‘‘(G) Total number of contractor personnel 
who are performing security functions at the 
end of each quarter of the reporting period. 
‘‘(H) Total number of contractor personnel 
killed or wounded. 
‘‘(3) ADDITIONAL MATTERS COVERED.—A re-
port under this subsection shall also cover the fol-
lowing: 
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‘‘(A) The sources of information and data 
used to compile the information required under 
paragraph (2). 
‘‘(B) A description of any known limita-
tions of the data reported under paragraph (2), 
including known limitations of the methodology 
and data sources used to compile the report. 
‘‘(C) Any plans for strengthening collec-
tion, coordination, and sharing of information 
on contracts in Iraq and Afghanistan through 
improvements to the common databases identi-
fied under section 861(b)(4). 
‘‘(4) REPORTING PERIOD.—A report under this 
subsection shall cover a period of not less than 12 
months. 
‘‘(5) SUBMISSION
OF
REPORTS.—The Secre-
taries and the Administrator shall submit an initial 
report under this subsection not later than February 
1, 2011, and shall submit an updated report by Feb-
ruary 1 of every year thereafter until February 1, 
2013. 
‘‘(6) EXCEPTION.—If the total annual amount 
of obligations for contracts in Iraq and Afghanistan 
combined is less than $250,000,000 for the report-
ing period, for all three agencies combined, the Sec-
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retaries and the Administrator may submit, in lieu 
of a report, a letter stating the applicability of this 
paragraph, with such documentation as the Secre-
taries and the Administrator consider appropriate. 
‘‘(7) ESTIMATES.—In determining the total 
number of contractor personnel working on contracts 
under paragraph (2)(F), the Secretaries and the Ad-
ministrator may use estimates for any category of 
contractor personnel for which they determine it is 
not feasible to provide an actual count. The report 
shall fully disclose the extent to which estimates are 
used in lieu of an actual count. 
‘‘(b) COMPTROLLER GENERAL REVIEW
AND RE-
PORT.— 
‘‘(1) IN GENERAL.—Within 180 days after sub-
mission of each annual joint report required under 
subsection (a), but in no case later than August 5 
of each year until 2013, the Comptroller General of 
the United States shall review the joint report and 
submit to the relevant committees of Congress a re-
port on such review. 
‘‘(2) MATTERS COVERED.—A report under this 
subsection shall, at minimum— 
‘‘(A) assess the data and data sources used 
in developing the joint report; 
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‘‘(B) review how the Department of De-
fense, the Department of State, and the United 
States Agency for International Development 
are using the data and the data sources used to 
develop the joint report in managing, over-
seeing, and coordinating contracting in Iraq 
and Afghanistan; 
‘‘(C) assess the plans of the departments 
and agency for strengthening or improving the 
common databases identified under section 
861(b)(4); and 
‘‘(D) review and make recommendations on 
any specific contract or class of contracts that 
the Comptroller General determines raises 
issues of significant concern. 
‘‘(3) ACCESS TO DATABASES AND OTHER IN-
FORMATION.—The Secretary of Defense, the Sec-
retary of State, and the Administrator of the United 
States Agency for International Development shall 
provide to the Comptroller General full access to in-
formation on contracts in Iraq and Afghanistan for 
the purposes of the review carried out under this 
subsection, including the common databases identi-
fied under section 861(b)(4).’’. 
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Subtitle E—Other Matters 
SEC. 841. IMPROVEMENTS TO STRUCTURE AND FUNC-
TIONING OF JOINT REQUIREMENTS OVER-
SIGHT COUNCIL. 
(a) VICE CHAIRMAN OF JOINT CHIEFS OF STAFF TO 
BE CHAIRMAN OF COUNCIL.—Subsection (c) of section 
181 of title 10, United States Code, is amended— 
(1) in paragraph (1), by inserting ‘‘Vice’’ before 
‘‘Chairman of the Joint Chiefs of Staff’’; 
(2) in paragraph (2), by striking ‘‘, other than 
the Chairman of the Joint Chiefs of Staff,’’ and in-
serting ‘‘under subparagraphs (B), (C), (D), and 
(E) of paragraph (1)’’; and 
(3) by striking paragraph (3). 
(b) ROLE OF COMMANDERS OF COMBATANT COM-
MANDS AS MEMBERS OF COUNCIL.—Paragraph (1) of 
subsection (c) of such section is further amended— 
(1) in subparagraph (D), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (E), by striking the period 
at the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(F) in addition, when directed by the chair-
man, the commander of any combatant command 
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(or, as directed by that commander, the deputy com-
mander of that command) when matters related to 
the area of responsibility or functions of that com-
mand will be under consideration by the Council.’’. 
(c) CIVILIAN ADVISORS.— 
(1) ADDITIONAL
CIVILIAN
ADVISORS.—Sub-
section (d) of such section is amended by striking 
‘‘The Under Secretary’’ and all that follows through 
‘‘and expertise.’’ and inserting: ‘‘The following offi-
cials of the Department of Defense shall serve as ad-
visors to the Council on matters within their author-
ity and expertise: 
‘‘(A) The Under Secretary of Defense for 
Acquisition, Technology, and Logistics. 
‘‘(B) The Under Secretary of Defense 
(Comptroller). 
‘‘(C) The Under Secretary of Defense for 
Policy. 
‘‘(D) The Director of Cost Assessment and 
Program Evaluation. 
‘‘(E) The Director of Operational Test and 
Evaluation. 
‘‘(F) Such other civilian officials of the De-
partment of Defense as are designated by the 
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Secretary of Defense for purposes of this sub-
section.’’. 
(2) 
CONFORMING
AMENDMENT.—Subsection 
(b)(3) of such section is amended by striking 
‘‘Under Secretary of Defense (Comptroller), the 
Under Secretary of Defense for Acquisition, Tech-
nology, and Logistics, and the Director of Cost As-
sessment and Performance Evaluation’’ and insert-
ing ‘‘advisors to the Council under subsection (d)’’. 
(d) RECOGNITION
OF
PERMANENT
NATURE
OF 
COUNCIL.—Subsection (a) of such section is amended by 
striking ‘‘The Secretary of Defense shall establish’’ and 
inserting ‘‘There is’’. 
SEC. 842. DEPARTMENT OF DEFENSE POLICY ON ACQUISI-
TION AND PERFORMANCE OF SUSTAINABLE 
PRODUCTS AND SERVICES. 
(a) FINDING.—Congress finds the following: 
(1) Executive Order No. 13514, dated October 
5, 2009, requires the departments and agencies of 
the Federal Government to establish an integrated 
strategy towards the procurement of sustainable 
products and services. 
(2) The Department of Defense Strategic Sus-
tainability Performance Plan, issued in August 
2010, provides a framework for the Department’s 
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compliance with Executive Order No. 13514 and 
other applicable sustainability requirements. 
(b) REPORT.— 
(1) IN
GENERAL.—Not later than 180 days 
after the date of the enactment of this Act, the Sec-
retary of Defense shall submit to the congressional 
defense committees a report on the status of the 
achievement by the Department of Defense of the 
objectives and goals on the procurement of sustain-
able products and services established by section 
2(h) of Executive Order No. 13514. 
(2) ELEMENTS.—The report required by para-
graph (1) shall include the following: 
(A) A description of the actions taken, and 
to be taken, by the Department to identify par-
ticular sustainable products and services that 
contribute to the achievement of the objectives 
and goals described in paragraph (1). 
(B) An assessment of the tools available to 
the Department to promote the use of par-
ticular sustainable products and services identi-
fied pursuant to the actions described in sub-
paragraph (A) across the Department, and a 
description of the actions taken, and to be 
taken, by the Department to use such tools. 
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(C) A description of strategies and tools 
identified by the Department that could assist 
the other departments and agencies of the Fed-
eral Government in procuring sustainable prod-
ucts and services, including a description of 
mechanisms for sharing best practices in such 
procurement, as identified by the Department, 
among the other departments and agencies of 
the Federal Government. 
(D) An assessment of the progress the De-
partment has made toward the achievement of 
the objectives and goals described in paragraph 
(1), including the scorecard identified in its 
Strategic Sustainability Performance Plan. 
SEC. 843. ASSESSMENT AND PLAN FOR CRITICAL RARE 
EARTH MATERIALS IN DEFENSE APPLICA-
TIONS. 
(a) ASSESSMENT REQUIRED.— 
(1) IN
GENERAL.—The Secretary of Defense 
shall undertake an assessment of the supply and de-
mand for rare earth materials in defense applica-
tions and identify which, if any, rare earth material 
meets both of the following criteria: 
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(A) The rare earth material is critical to 
the production, sustainment, or operation of 
significant United States military equipment. 
(B) The rare earth material is subject to 
interruption of supply, based on actions or 
events outside the control of the Government of 
the United States. 
(2) EVALUATION OF SUPPLY.—The assessment 
shall include a comprehensive evaluation of the long- 
term security and availability of all aspects of the 
supply chain for rare earth materials in defense ap-
plications, particularly the location and number of 
sources at each step of the supply chain, including— 
(A) mining of rare earth ores; 
(B) separation of rare earth oxides; 
(C) refining and reduction of rare earth 
metals; 
(D) creation of rare earth alloys; 
(E) manufacturing of components and sys-
tems containing rare earth materials; and 
(F) recycling of components and systems 
to reclaim and reuse rare earth materials. 
(3) EVALUATION OF DEMAND.—The assessment 
shall include a comprehensive evaluation of the de-
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mand for and usage of rare earth materials in all de-
fense applications, including— 
(A) approximations of the total amounts of 
individual rare earth materials used in defense 
applications; 
(B) determinations of which, if any, de-
fense applications are dependent upon rare 
earth materials for proper operation and func-
tioning; and 
(C) assessments of the feasibility of alter-
natives to usage of rare earth materials in de-
fense applications. 
(4) OTHER STUDIES AND AGENCIES.—Any ap-
plicable studies conducted by the Department of De-
fense, the Comptroller General of the United States, 
or other Federal agencies during fiscal year 2010 
may be considered as partial fulfillment of the re-
quirements of this section. The Secretary may con-
sider the views of other Federal agencies, as appro-
priate. 
(5) SPECIFIC MATERIAL INCLUDED.—At a min-
imum, the Secretary shall identify sintered neodym-
ium iron boron magnets as meeting the criteria spec-
ified in paragraph (1). 
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(b) PLAN.—For each rare earth material identified 
pursuant to subsection (a)(1), the Secretary shall develop 
a plan to ensure the long-term availability of such rare 
earth material, with a goal of establishing an assured 
source of supply of such material in critical defense appli-
cations by December 31, 2015. In developing the plan, the 
Secretary shall consider all aspects of the material’s sup-
ply chain, as described in subsection (a)(2). The plan shall 
include consideration of numerous risk mitigation methods 
with respect to the material, including— 
(1) an assessment of including the material in 
the National Defense Stockpile; 
(2) in consultation with the United States 
Trade Representative, the identification of any trade 
practices known to the Secretary that limit the Sec-
retary’s ability to ensure the long-term availability of 
such material or the ability to meet the goal of es-
tablishing an assured source of supply of such mate-
rial by December 31, 2015; 
(3) an assessment of the availability of financ-
ing to industry, academic institutions, or not-for- 
profit entities to provide the capacity required to en-
sure the availability of the material, as well as po-
tential mechanisms to increase the availability of 
such financing; 
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(4) an assessment of the benefits, if any, of De-
fense Production Act funding to support the estab-
lishment of an assured source of supply for military 
components; 
(5) an assessment of funding for research and 
development related to any aspect of the rare earth 
material supply chain or research on alternatives 
and substitutes; 
(6) any other risk mitigation method deter-
mined appropriate by the Secretary that is con-
sistent with the goal of establishing an assured 
source of supply by December 31, 2015; and 
(7) for steps of the rare earth material supply 
chain for which no other risk mitigation method, as 
described in paragraphs (1) through (6), will ensure 
an assured source of supply by December 31, 2015, 
a specific plan to eliminate supply chain vulner-
ability by the earliest date practicable. 
(c) REPORT.— 
(1) REQUIREMENT.—Not later than 180 days 
after the date of the enactment of this Act, the Sec-
retary of Defense shall submit to the congressional 
committees described in paragraph (2) a report con-
taining the findings of the assessment required 
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under subsection (a) and the plan developed under 
subsection (b). 
(2) CONGRESSIONAL
COMMITTEES.—The con-
gressional committees described in this paragraph 
are as follows: 
(A) The congressional defense committees. 
(B) The Committee on Science and Tech-
nology, the Committee on Financial Services, 
and the Committee on Ways and Means of the 
House of Representatives. 
(C) The Committee on Energy and Nat-
ural Resources, the Committee on Finance, and 
the Committee on Banking, Housing, and 
Urban Affairs of the Senate. 
SEC. 844. REVIEW OF NATIONAL SECURITY EXCEPTION TO 
COMPETITION. 
(a) REVIEW REQUIRED.—The Comptroller General 
of the United States shall review the use of the national 
security exception to full and open competition provided 
in section 2304(c)(6) of title 10, United States Code, by 
the Department of Defense. 
(b) MATTERS REVIEWED.—The review of the use of 
the national security exception required by subsection (a) 
shall include— 
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(1) the pattern of usage of such exception by 
acquisition organizations within the Department to 
determine which organizations are commonly using 
the exception and the frequency of such usage; 
(2) the range of items or services being ac-
quired through the use of such exception; 
(3) the process for reviewing and approving jus-
tifications involving such exception; 
(4) whether the justifications for use of such 
exception typically meet the relevant requirements of 
the Federal Acquisition Regulation applicable to the 
use of such exception; 
(5) issues associated with follow-on procure-
ments for items or services acquired using such ex-
ception; and 
(6) potential additional instances where such 
exception could be applied and any authorities avail-
able to the Department other than such exception 
that could be applied in such instances. 
(c) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Comptroller General shall 
submit to the Committees on Armed Services of the Sen-
ate and the House of Representatives a report on the re-
view required by subsection (a), including a discussion of 
each of the matters specified in subsection (b). The report 
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shall include any recommendations relating to the matters 
reviewed that the Secretary considers appropriate. The re-
port shall be submitted in unclassified form but may in-
clude a classified annex. 
SEC. 845. REQUIREMENT FOR ENTITIES WITH FACILITY 
CLEARANCES THAT ARE NOT UNDER FOR-
EIGN OWNERSHIP CONTROL OR INFLUENCE 
MITIGATION. 
(a) REQUIREMENT.—The Secretary of Defense shall 
develop a plan to ensure that covered entities employ and 
maintain policies and procedures that meet requirements 
under the national industrial security program. In devel-
oping the plan, the Secretary shall consider whether or 
not covered entities, or any category of covered entities, 
should be required to establish government security com-
mittees similar to those required for companies that are 
subject to foreign ownership control or influence mitiga-
tion measures. 
(b) COVERED ENTITY.—A covered entity under this 
section is an entity— 
(1) to which the Department of Defense has 
granted a facility clearance; and 
(2) that is not subject to foreign ownership con-
trol or influence mitigation measures. 
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(c) GUIDANCE.—The Secretary of Defense shall issue 
guidance, including appropriate compliance mechanisms, 
to implement the requirement in subsection (a). To the 
extent determined appropriate by the Secretary, the guid-
ance shall require covered entities, or any category of cov-
ered entities, to establish government security committees 
similar to those required for companies that are subject 
to foreign ownership control or influence mitigation meas-
ures. 
(d) REPORT.—Not later than 270 days after the date 
of the enactment of this Act, the Secretary shall submit 
to the Committees on Armed Services of the Senate and 
the House of Representatives a report on the plan devel-
oped pursuant to subsection (a) and the guidance issued 
pursuant to subsection (c). The report shall specifically 
address the rationale for the Secretary’s decision on 
whether or not to require covered entities, or any category 
of covered entities, to establish government security com-
mittees similar to those required for companies that are 
subject to foreign ownership control or influence mitiga-
tion measures. 
SEC. 846. PROCUREMENT OF PHOTOVOLTAIC DEVICES. 
(a) CONTRACT REQUIREMENT.—The Secretary of 
Defense shall ensure that each contract described in sub-
section (b) awarded by the Department of Defense in-
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cludes a provision requiring the photovoltaic devices pro-
vided under the contract to comply with the Buy American 
Act (41 U.S.C. 10a et seq.), subject to the exceptions to 
that Act provided in the Trade Agreements Act of 1979 
(19 U.S.C. 2501 et seq.) or otherwise provided by law. 
(b) CONTRACTS DESCRIBED.—The contracts de-
scribed in this subsection include energy savings perform-
ance contracts, utility service contracts, land leases, and 
private housing contracts, to the extent that such con-
tracts result in ownership of photovoltaic devices by the 
Department of Defense. For the purposes of this section, 
the Department of Defense is deemed to own a photo-
voltaic device if the device is— 
(1) installed on Department of Defense prop-
erty or in a facility owned by the Department of De-
fense; and 
(2) reserved for the exclusive use of the Depart-
ment of Defense for the full economic life of the de-
vice. 
(c) DEFINITION
OF PHOTOVOLTAIC DEVICES.—In 
this section, the term ‘‘photovoltaic devices’’ means devices 
that convert light directly into electricity through a solid- 
state, semiconductor process. 
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SEC. 847. NON-AVAILABILITY EXCEPTION FROM BUY AMER-
ICAN REQUIREMENTS FOR PROCUREMENT 
OF HAND OR MEASURING TOOLS. 
Section 2533a(c) of title 10, United States Code, is 
amended by striking ‘‘subsection (b)(1)’’ and inserting 
‘‘subsection (b)’’. 
SEC. 848. CONTRACTOR LOGISTICS SUPPORT OF CONTIN-
GENCY OPERATIONS. 
(a) DEFENSE SCIENCE BOARD REVIEW OF ORGANI-
ZATION, TRAINING, AND PLANNING.—Not later than 90 
days after the date of the enactment of this Act, the Sec-
retary of Defense shall direct the Defense Science Board 
to carry out a review of Department of Defense organiza-
tion, doctrine, training, and planning for contractor logis-
tics support of contingency operations. 
(b) MATTERS TO BE ADDRESSED.— 
(1) IN GENERAL.—The matters addressed by 
the review required by subsection(a) shall include, at 
a minimum, the following: 
(A) Department of Defense policies and 
procedures for planning for contractor logistics 
support of contingency operations. 
(B) Department organization and staffing 
for the implementation of such policies and pro-
cedures. 
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(C) The development of Department doc-
trine for contractor logistics support of contin-
gency operations. 
(D) The training of Department military 
and civilian personnel for the planning, man-
agement, and oversight of contractor logistics 
support of contingency operations. 
(E) The extent to which the Department 
should rely upon contractor logistics support in 
future contingency operations, and the risks as-
sociated with reliance on such support. 
(F) Any logistics support functions for 
contingency operations for which the Depart-
ment should establish or retain an organic ca-
pability. 
(G) The scope and level of detail on con-
tractor logistics support of contingency oper-
ations that is currently included in operational 
plans, and that should be included in oper-
ational plans. 
(H) Contracting mechanisms and contract 
vehicles that are currently used, and should be 
used, to provide contractor logistics support of 
contingency operations. 
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(I) Department organization and staffing 
for the management and oversight of contractor 
logistics support of contingency operations. 
(J) Actions that could be taken to improve 
Department management and oversight of con-
tractors providing logistics support of contin-
gency operations. 
(K) The extent to which logistics support 
of contingency operations has been, and should 
be, provided by subcontractors, and the advan-
tages and disadvantages of reliance upon sub-
contractors for that purpose. 
(L) The extent to which logistics support 
of contingency operations has been, and should 
be, provided by local nationals and third coun-
try nationals, and the advantages and disadvan-
tages of reliance upon such sources for that 
purpose. 
(2) FINDINGS AND RECOMMENDATIONS.—The 
review required by subsection (a) shall include find-
ings and recommendations related to— 
(A) legislative or policy guidance to ad-
dress the matters listed in paragraph (1); and 
(B) whether and to what extent the quad-
rennial defense review (conducted pursuant to 
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section 118 of title 10, United States Code) or 
assessments by the Chairman of the Joint 
Chiefs of Staff for the biennial review of the na-
tional military strategy (conducted pursuant to 
section 153(d) of such title) should be required 
to address requirements for contractor support 
of the Armed Forces in conducting peacetime 
training, peacekeeping, overseas contingency op-
erations, and major combat operations, and the 
risks associated with such support. 
(c) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Secretary shall submit 
to the congressional defense committees a report on the 
results of the review required by subsection (a). The report 
shall include the findings and recommendations of the De-
fense Science Board, including such recommendations for 
legislative or administrative action as the Board considers 
appropriate, together with any comments the Secretary 
considers appropriate. 
Subtitle F—Improve Acquisition 
Act 
SEC. 860. SHORT TITLE. 
This subtitle may be cited as the ‘‘Improve Acquisi-
tion Act of 2010’’. 
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PART I—DEFENSE ACQUISITION SYSTEM 
SEC. 861. IMPROVEMENTS TO THE MANAGEMENT OF THE 
DEFENSE ACQUISITION SYSTEM. 
(a) MANAGEMENT OF THE DEFENSE ACQUISITION 
SYSTEM.—Part IV of title 10, United States Code, is 
amended by inserting after chapter 148 the following new 
chapter: 
‘‘CHAPTER 149—DEFENSE ACQUISITION 
SYSTEM 
‘‘Sec. 
‘‘2545. Definitions. 
‘‘2546. Civilian management of the defense acquisition system. 
‘‘2547. Acquisition-related functions of chiefs of the armed forces. 
‘‘2548. Performance assessments of the defense acquisition system. 
‘‘§ 2545. Definitions 
‘‘In this chapter: 
‘‘(1) The term ‘acquisition’ has the meaning 
provided in section 4(16) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403(16)). 
‘‘(2) The term ‘defense acquisition system’ 
means the workforce engaged in carrying out the ac-
quisition of property and services for the Depart-
ment of Defense; the management structure respon-
sible for directing and overseeing the acquisition of 
property and services for the Department of De-
fense; and the statutory, regulatory, and policy 
framework that guides the acquisition of property 
and services for the Department of Defense. 
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‘‘(3) The term ‘element of the defense acquisi-
tion system’ means an organization that employs 
members of the acquisition workforce, carries out ac-
quisition functions, and focuses primarily on acquisi-
tion. 
‘‘(4) The term ‘acquisition workforce’ has the 
meaning provided in section 101(a)(18) of this title. 
‘‘§ 2546. Civilian management of the defense acquisi-
tion system 
‘‘(a) RESPONSIBILITY OF THE UNDER SECRETARY 
OF DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LO-
GISTICS.—Subject to the authority, direction and control 
of the Secretary of Defense, the Under Secretary of De-
fense for Acquisition, Technology, and Logistics shall be 
responsible for the management of the defense acquisition 
system and shall exercise such control of the system and 
perform such duties as are necessary to ensure the suc-
cessful and efficient operation of the defense acquisition 
system, including the duties enumerated and assigned to 
the Under Secretary elsewhere in this title. 
‘‘(b) RESPONSIBILITY OF THE SERVICE ACQUISITION 
EXECUTIVES.—Subject to the direction of the Under Sec-
retary of Defense for Acquisition, Technology, and Logis-
tics on matters pertaining to acquisition, and subject to 
the authority, direction, and control of the Secretary of 
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the military department concerned, a service acquisition 
executive of a military department shall be responsible for 
the management of elements of the defense acquisition 
system in that military department and shall exercise such 
control of the system and perform such duties as are nec-
essary to ensure the successful and efficient operation of 
such elements of the defense acquisition system. 
‘‘§ 2547. Acquisition-related functions of chiefs of the 
armed forces 
‘‘(a) PERFORMANCE OF CERTAIN ACQUISITION-RE-
LATED FUNCTIONS.—The Secretary of Defense shall en-
sure that the Chief of Staff of the Army, the Chief of 
Naval Operations, the Chief of Staff of the Air Force, and 
the Commandant of the Marine Corps assist the Secretary 
of the military department concerned in the performance 
of the following acquisition-related functions of such de-
partment: 
‘‘(1) The development of requirements relating 
to the defense acquisition system (subject, where ap-
propriate, to validation by the Joint Requirements 
Oversight Council pursuant to section 181 of this 
title). 
‘‘(2) The coordination of measures to control 
requirements creep in the defense acquisition sys-
tem. 
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‘‘(3) The development of career paths in acqui-
sition for military personnel (as required by section 
1722a of this title). 
‘‘(4) The assignment and training of con-
tracting officer representatives when such represent-
atives are required to be members of the armed 
forces because of the nature of the contract con-
cerned. 
‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to affect the assignment of func-
tions under section 3014(c)(1)(A), section 5014(c)(1)(A), 
or section 8014(c)(1)(A) of this title, except as explicitly 
provided in this section. 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) The term ‘requirements creep’ means the 
addition of new technical or operational specifica-
tions after a requirements document is approved by 
the appropriate validation authority for the require-
ments document. 
‘‘(2) The term ‘requirements document’ means 
a document produced in the requirements process 
that is provided for an acquisition program to guide 
the subsequent development, production, and testing 
of the program and that— 
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‘‘(A) justifies the need for a materiel ap-
proach, or an approach that is a combination of 
materiel and non-materiel, to satisfy one or 
more specific capability gaps; 
‘‘(B) details the information necessary to 
develop an increment of militarily useful, 
logistically supportable, and technically mature 
capability, including key performance param-
eters; or 
‘‘(C) identifies production attributes re-
quired for a single increment of a program. 
‘‘§ 2548. Performance assessments of the defense ac-
quisition system 
‘‘(a) PERFORMANCE ASSESSMENTS REQUIRED.—Not 
later than 180 days after the date of the enactment of 
the Ike Skelton National Defense Authorization Act for 
Fiscal Year 2011, the Secretary of Defense, acting 
through the Under Secretary of Defense for Acquisition, 
Technology, and Logistics, the Director of Procurement 
and Acquisition Policy, and the Director of the Office of 
Performance Assessment and Root Cause Analysis, shall 
issue guidance, with detailed implementation instructions, 
for the Department of Defense to provide for periodic 
independent performance assessments of elements of the 
defense acquisition system for the purpose of— 
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‘‘(1) determining the extent to which such ele-
ments of the defense acquisition system deliver value 
to the Department of Defense, taking into consider-
ation the performance elements identified in sub-
section (b); 
‘‘(2) assisting senior officials of the Department 
of Defense in identifying and developing lessons 
learned from best practices and shortcomings in the 
performance of such elements of the defense acquisi-
tion system; and 
‘‘(3) assisting senior officials of the Department 
of Defense in developing acquisition workforce excel-
lence under section 1701a of this title 
‘‘(b) AREAS CONSIDERED IN PERFORMANCE ASSESS-
MENTS.—(1) Each performance assessment conducted 
pursuant to subsection (a) shall consider, at a minimum— 
‘‘(A) the extent to which acquisitions conducted 
by the element of the defense acquisition system 
under review meet applicable cost, schedule, and per-
formance objectives; and 
‘‘(B) the staffing and quality of the acquisition 
workforce and the effectiveness of the management 
of the acquisition workforce, including workforce in-
centives and career paths. 
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‘‘(2) The Secretary of Defense shall ensure that the 
performance assessments required by this section are ap-
propriately tailored to reflect the diverse nature of the 
work performed by each element of the defense acquisition 
system. In addition to the mandatory areas under para-
graph (1), a performance assessment may consider, as ap-
propriate, specific areas of acquisition concern, such as— 
‘‘(A) the selection of contractors, including— 
‘‘(i) the extent of competition and the use 
of exceptions to competition requirements; 
‘‘(ii) compliance with Department of De-
fense policies regarding the participation of 
small business concerns and various categories 
of small business concerns, including the use of 
contract bundling and the availability of non- 
bundled contract vehicles; 
‘‘(iii) the quality of market research; 
‘‘(iv) the effective consideration of con-
tractor past performance; and 
‘‘(v) the number of bid protests, the extent 
to which such bid protests have been successful, 
and the reasons for such success; 
‘‘(B) the negotiation of contracts, including— 
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‘‘(iv) the appropriate use of integrated 
testing. 
‘‘(c) CONTENTS OF GUIDANCE.—The guidance issued 
pursuant to subsection (a) shall ensure that each element 
of the defense acquisition system is subject to a perform-
ance assessment under this section not less often than 
once every four years, and shall address, at a minimum— 
‘‘(1) the designation of elements of the defense 
acquisition system that are subject to performance 
assessment at an organizational level that ensures 
such assessments can be performed in an efficient 
and integrated manner; 
‘‘(2) the frequency with which such perform-
ance assessments should be conducted; 
‘‘(3) goals, standards, tools, and metrics for use 
in conducting performance assessments; 
‘‘(4) the composition of the teams designated to 
perform performance assessments; 
‘‘(5) any phase-in requirements needed to en-
sure that qualified staff are available to perform per-
formance assessments; 
‘‘(6) procedures for tracking the implementa-
tion of recommendations made pursuant to perform-
ance assessments; 
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‘‘(7) procedures for developing and dissemi-
nating lessons learned from performance assess-
ments; and 
‘‘(8) procedures for ensuring that information 
from performance assessments are retained elec-
tronically and are provided in a timely manner to 
the Under Secretary of Defense for Acquisition, 
Technology, and Logistics and the Director of the 
Office of Performance Assessment and Root Cause 
Analysis as needed to assist them in performing 
their responsibilities under this section. 
‘‘(d) PERFORMANCE GOALS UNDER GOVERNMENT 
PERFORMANCE RESULTS ACT OF 1993.—Beginning with 
fiscal year 2012, the annual performance plan prepared 
by the Department of Defense pursuant to section 1115 
of title 31 shall include appropriate performance goals for 
elements of the defense acquisition system. 
‘‘(e) REPORTING REQUIREMENTS.—Beginning with 
fiscal year 2012— 
‘‘(1) the annual report prepared by the Sec-
retary of Defense pursuant to section 1116 of title 
31, United States Code, shall address the Depart-
ment’s success in achieving performance goals estab-
lished pursuant to such section for elements of the 
defense acquisition system; and 
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‘‘(2) the annual report prepared by the Director 
of the Office of Performance Assessment and Root 
Cause Analysis pursuant to section 103(f) of the 
Weapon Systems Acquisition Reform Act of 2009 
(10 U.S.C. 2430 note), shall include information on 
the activities undertaken by the Department pursu-
ant to such section, including a summary of signifi-
cant findings or recommendations arising out of per-
formance assessments.’’. 
(b) CLERICAL AMENDMENTS.—The table of chapters 
at the beginning of subtitle A of title 10, United States 
Code, and at the beginning of part IV of such subtitle, 
are each amended by inserting after the item relating to 
chapter 148 the following new item: 
‘‘149. Defense Acquisition System ............................................... 2545’’. 
SEC. 862. COMPTROLLER GENERAL REPORT ON JOINT CA-
PABILITIES 
INTEGRATION 
AND 
DEVELOP-
MENT SYSTEM. 
(a) REPORT REQUIRED.—The Comptroller General 
of the United States shall carry out a comprehensive re-
view of the Joint Capabilities Integration and Develop-
ment System (in this section referred to as ‘‘JCIDS’’). 
Not later than one year after the date of the enactment 
of this Act, the Comptroller General shall submit to the 
congressional defense committees a report on the review 
and include in such report any recommendations the 
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Comptroller General considers necessary and advisable to 
improve or replace JCIDS. 
(b) CONTENT OF THE REVIEW.— 
(1) PURPOSE.—The purpose of the review re-
quired by subsection (a) is to evaluate the effective-
ness of JCIDS in achieving the following objectives: 
(A) Timeliness in delivering capability to 
the warfighter. 
(B) Efficient use of the investment re-
sources of the Department of Defense. 
(C) Control of requirements creep. 
(D) Responsiveness to changes occurring 
after the approval of a requirements document 
(including changes to the threat environment, 
the emergence of new capabilities, or changes in 
the resources estimated to procure or sustain a 
capability). 
(E) Development of the personnel skills, 
capacity, and training needed for an effective 
and efficient requirements process. 
(2) MATTERS CONSIDERED.—In performing the 
review, the Comptroller General shall gather infor-
mation on and consider the following matters: 
(A) The time that requirements documents 
take to receive approval through JCIDS. 
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(B) The quality of cost information consid-
ered in JCIDS and the extent of its consider-
ation. 
(C) The extent to which JCIDS establishes 
a meaningful level of priority for requirements. 
(D) The extent to which JCIDS is consid-
ering trade-offs between cost, schedule, and per-
formance objectives. 
(E) 
The 
quality 
of 
information 
on 
sustainment considered in JCIDS and the ex-
tent to which sustainment information is con-
sidered. 
(F) An evaluation of the advantages and 
disadvantages of designating a commander of a 
unified combatant command for each require-
ments document for which the Joint Require-
ments Oversight Council is the validation au-
thority to provide a joint evaluation task force 
to participate in a materiel solution and to— 
(i) provide input to the analysis of al-
ternatives; 
(ii) participate in testing (including 
limited user tests and prototype testing); 
(iii) provide input on a concept of op-
erations and doctrine; 
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(iv) provide end user feedback to the 
resource sponsor; and 
(v) participate, through the combatant 
commander concerned, in any alteration of 
the requirement for such solution. 
(c) DEFINITIONS.—In this section: 
(1) JOINT CAPABILITIES INTEGRATION AND DE-
VELOPMENT SYSTEM.—The term ‘‘Joint Capabilities 
Integration and Development System’’ means the 
system for the assessment, review, validation, and 
approval of joint warfighting requirements that is 
described in Chairman of the Joint Chiefs of Staff 
Instruction 3170.01G 
(2) REQUIREMENTS
DOCUMENT.—The term 
‘‘requirements document’’ means a document pro-
duced in JCIDS that is provided for an acquisition 
program to guide the subsequent development, pro-
duction, and testing of the program and that— 
(A) justifies the need for a materiel ap-
proach, or an approach that is a combination of 
materiel and non-materiel, to satisfy one or 
more specific capability gaps; 
(B) details the information necessary to 
develop an increment of militarily useful, 
logistically supportable, and technically mature 
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capability, including key performance param-
eters; or 
(C) identifies production attributes re-
quired for a single increment of a program. 
(3) REQUIREMENTS
CREEP.—The term ‘‘re-
quirements creep’’ means the addition of new tech-
nical or operational specifications after a require-
ments document is approved. 
(4) MATERIEL SOLUTION.—The term ‘‘materiel 
solution’’ means the development, acquisition, pro-
curement, or fielding of a new item, or of a modi-
fication to an existing item, necessary to equip, oper-
ate, maintain, and support military activities. 
SEC. 863. REQUIREMENTS FOR THE ACQUISITION OF SERV-
ICES. 
(a) ESTABLISHMENT OF REQUIREMENTS PROCESSES 
FOR THE ACQUISITION OF SERVICES.—The Secretary of 
Defense shall ensure that the military departments and 
Defense Agencies each establish a process for identifying, 
assessing, reviewing, and validating requirements for the 
acquisition of services. 
(b) OPERATIONAL REQUIREMENTS.—With regard to 
requirements for the acquisition of services in support of 
combatant commands and military operations, the Sec-
retary shall ensure— 
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(1) that the Chief of Staff of the Army, the 
Chief of Naval Operations, the Chief of Staff of the 
Air Force, and the Commandant of the Marine 
Corps implement and bear chief responsibility for 
carrying out, within the Armed Force concerned, the 
process established pursuant to subsection (a) for 
such Armed Force; and 
(2) that commanders of unified combatant com-
mands and other officers identified or designated as 
joint qualified officers have an opportunity to par-
ticipate in the process of each military department 
to provide input on joint requirements for the acqui-
sition of services. 
(c) SUPPORTING REQUIREMENTS.—With regard to 
requirements for the acquisition of services not covered by 
subsection (b), the Secretary shall ensure that the secre-
taries of the military departments and the heads of the 
Defense Agencies implement and bear chief responsibility 
for carrying out, within the military department or De-
fense Agency concerned, the process established pursuant 
to subsection (a) for such military department or Defense 
Agency. 
(d) IMPLEMENTATION PLANS REQUIRED.—The Sec-
retary shall ensure that an implementation plan is devel-
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oped for each process established pursuant to subsection 
(a) that addresses, at a minimum, the following: 
(1) The organization of such process. 
(2) The level of command responsibility re-
quired for identifying, assessing, reviewing, and vali-
dating requirements for the acquisition of services in 
accordance with the requirements of this section and 
the 
categories 
established 
under 
section 
2330(a)(1)(C) of title 10, United States Code. 
(3) The composition of positions necessary to 
operate such process. 
(4) The training required for personnel engaged 
in such process. 
(5) The relationship between doctrine and such 
process. 
(6) Methods of obtaining input on joint require-
ments for the acquisition of services. 
(7) Procedures for coordinating with the acqui-
sition process. 
(8) Considerations relating to opportunities for 
strategic sourcing. 
(e) MATTERS
REQUIRED
IN
IMPLEMENTATION 
PLAN.—Each plan required under subsection (d) shall 
provide for initial implementation of a process for identi-
fying, assessing, reviewing, and validating requirements 
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for the acquisition of services not later than one year after 
the date of the enactment of this Act and shall provide 
for full implementation of such process at the earliest date 
practicable. 
(f) CONSISTENCY WITH JOINT GUIDANCE.—When-
ever, at any time, guidance is issued by the Chairman of 
the Joint Chiefs of Staff relating to requirements for the 
acquisition of services in support of combatant commands 
and military operations, each process established pursuant 
to subsection (a) shall be revised in accordance with such 
joint guidance. 
(g) DEFINITION.—The term ‘‘requirements for the 
acquisition of services’’ means objectives to be achieved 
through acquisitions primarily involving the procurement 
of services. 
(h) REVIEW
OF SUPPORTING REQUIREMENTS TO 
IDENTIFY SAVINGS.—The secretaries of the military de-
partments and the heads of the Defense Agencies shall 
review and validate each requirement described in sub-
section (c) with an anticipated cost in excess of 
$10,000,000 with the objective of identifying unneeded or 
low priority requirements that can be reduced or elimi-
nated, with the savings transferred to higher priority ob-
jectives. Savings identified and transferred to higher pri-
ority objectives through review and revalidation under this 
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subsection shall count toward the savings objectives estab-
lished in the June 4, 2010, guidance of the Secretary of 
Defense on improved operational efficiencies and the an-
nual reduction in funding for service support contractors 
required by the August 16, 2010, guidance of the Sec-
retary of Defense on efficiency initiatives. As provided by 
the Secretary, cost avoidance shall not count toward these 
objectives. 
(i) EXTENSION OF AUTHORITY.—Subsection (e) of 
section 834 of the National Defense Authorization Act for 
Fiscal Years 1990 and 1991 (15 U.S.C. 637 note) is 
amended by striking ‘‘September 30, 2010’’ and inserting 
‘‘December 31, 2011’’. 
SEC. 864. REVIEW OF DEFENSE ACQUISITION GUIDANCE. 
(a) REVIEW OF GUIDANCE.—The Secretary of De-
fense shall review the acquisition guidance of the Depart-
ment of Defense, including, at a minimum, the guidance 
contained in Department of Defense Instruction 5000.02 
entitled ‘‘Operation of the Defense Acquisition System’’. 
(b) MATTERS CONSIDERED.—The review performed 
under subsection (a) shall consider— 
(1) the extent to which the acquisition of com-
mercial goods and commodities, commercial and 
military unique services, and information technology 
should be addressed in Department of Defense In-
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struction 5000.02 and other guidance primarily re-
lating to the acquisition of weapon systems, or 
should be addressed in separate instructions and 
guidance; 
(2) whether long-term sustainment and energy 
efficiency of weapon systems is appropriately empha-
sized; 
(3) whether appropriate mechanisms exist to 
communicate information relating to the mission 
needs of the Department of Defense to the industrial 
base in a way that allows the industrial base to 
make appropriate investments in infrastructure, ca-
pacity, and technology development to help meet 
such needs; 
(4) the extent to which earned value manage-
ment should be required on acquisitions not involv-
ing the acquisition of weapon systems and whether 
measures of quality and technical performance 
should be included in any earned value management 
system; and 
(5) such other matters as the Secretary con-
siders appropriate. 
(c) REPORT.—Not later than 270 days after the date 
of the enactment of this Act, the Secretary of Defense 
shall submit to the Committees on Armed Services of the 
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Senate and the House of Representatives a report detail-
ing any changes in the acquisition guidance of the Depart-
ment of Defense identified during the review required by 
subsection (a), and any actions taken, or planned to be 
taken, to implement such changes. 
SEC. 865. REQUIREMENT TO REVIEW REFERENCES TO 
SERVICES ACQUISITION THROUGHOUT THE 
FEDERAL ACQUISITION REGULATION AND 
THE DEFENSE FEDERAL ACQUISITION REGU-
LATION SUPPLEMENT. 
(a) REVIEW REQUIRED.—The Secretary of Defense, 
in consultation with the Administrator for Federal Pro-
curement Policy and the heads of such other Federal agen-
cies as the Secretary considers appropriate, shall review 
the Federal Acquisition Regulation and the Defense Fed-
eral Acquisition Regulation Supplement to ensure that 
such regulations include appropriate guidance for and ref-
erences to services acquisition that are in addition to ref-
erences provided in part 37 and the Defense Supplement 
to part 37. 
(b) MATTERS CONSIDERED.—The review required by 
subsection (a) shall consider the extent to which additional 
guidance is needed— 
(1) to provide the tools and processes needed to 
assist contracting officials in addressing the full 
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range of complexities that can arise in the acquisi-
tion of services; and 
(2) to enhance and support the procurement 
and project management community in all aspects of 
the process for the acquisition of services, including 
requirements development, assessment of reasonable-
ness, and post-award management and oversight. 
(c) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, the Secretary of Defense 
shall submit to the Committees on Armed Services of the 
Senate and the House of Representatives a report con-
taining— 
(1) a summary of the findings of the review re-
quired by subsection (a); and 
(2) any recommendations that the Secretary 
may have for changes to the Federal Acquisition 
Regulation and the Defense Federal Acquisition 
Regulation Supplement to address such findings, in-
cluding identifying any changes that are necessary 
to improve part 37 (which specifically addresses 
services acquisitions). 
SEC. 866. PILOT PROGRAM ON ACQUISITION OF MILITARY 
PURPOSE NONDEVELOPMENTAL ITEMS. 
(a) PILOT PROGRAM AUTHORIZED.— 
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(1) IN
GENERAL.—The Secretary of Defense 
may carry out a pilot program to assess the 
feasability and advisability of acquiring military pur-
pose nondevelopmental items in accordance with this 
section. 
(2) SCOPE OF PROGRAM.—Under the pilot pro-
gram, the Secretary may enter into contracts with 
nontraditional defense contractors for the acquisition 
of military purpose nondevelopmental items in ac-
cordance with the requirements set forth in sub-
section (b). 
(b) CONTRACT REQUIREMENTS.—Each contract en-
tered into under the pilot program— 
(1) shall be a firm, fixed price contract, or a 
firm, fixed price contract with an economic price ad-
justment clause awarded using competitive proce-
dures in accordance with chapter 137 of title 10, 
United States Code; 
(2) shall be in an amount not in excess of 
$50,000,000, including all options; 
(3) shall provide— 
(A) for the delivery of an initial lot of pro-
duction quantities of completed items not later 
than nine months after the date of the award 
of such contract; and 
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(B) that failure to make delivery as pro-
vided for under subparagraph (A) may result in 
the termination of such contract for default; 
and 
(4) shall be— 
(A) exempt from the requirement to sub-
mit certified cost or pricing data under section 
2306a of title 10, United States Code, and the 
cost accounting standards under section 26 of 
the Office of Federal Procurement Policy Act 
(41 U.S.C. 422); and 
(B) subject to the requirement to provide 
data other than certified cost or pricing data 
for the purpose of price reasonableness deter-
minations, as provided in section 2306a(d) of 
title 10, United States Code. 
(c) REGULATIONS.—If the Secretary establishes the 
pilot program authorized under subsection (a), the Sec-
retary shall prescribe regulations governing such pilot pro-
gram. Such regulations shall be included in regulations of 
the Department of Defense prescribed as part of the Fed-
eral Acquisition Regulation and shall include the contract 
clauses and procedures necessary to implement such pro-
gram. 
(d) REPORTS.— 
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(1) REPORTS ON PROGRAM ACTIVITIES.—Not 
later than 60 days after the end of any fiscal year 
in which the pilot program is in effect, the Secretary 
shall submit to the congressional defense committees 
a report on the pilot program. The report shall be 
in unclassified form but may include a classified 
annex. Each report shall include, for each contract 
entered into under the pilot program in the pre-
ceding fiscal year, the following: 
(A) The contractor. 
(B) The item or items to be acquired. 
(C) The military purpose to be served by 
such item or items. 
(D) The amount of the contract. 
(E) The actions taken by the Department 
of Defense to ensure that the price paid for 
such item or items is fair and reasonable. 
(2) PROGRAM ASSESSMENT.—If the Secretary 
establishes the pilot program authorized under sub-
section (a), not later than four years after the date 
of the enactment of this Act, the Comptroller Gen-
eral of the United States shall submit to the con-
gressional defense committees a report setting forth 
the assessment of the Comptroller General of the ex-
tent to which the pilot program— 
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(A) enabled the Department to acquire 
items that otherwise might not have been avail-
able to the Department; 
(B) assisted the Department in the rapid 
acquisition and fielding of capabilities needed to 
meet urgent operational needs; and 
(C) protected the interests of the United 
States in paying fair and reasonable prices for 
the item or items acquired. 
(e) DEFINITIONS.—In this section: 
(1) The term ‘‘military purpose nondevelop-
mental item’’ means a nondevelopmental item that 
meets a validated military requirement, as deter-
mined in writing by the responsible program man-
ager, and has been developed exclusively at private 
expense. For purposes of this paragraph, an item 
shall not be considered to be developed exclusively at 
private expense if development of the item was paid 
for in whole or in part through— 
(A) independent research and development 
costs or bid and proposal costs that have been 
reimbursed directly or indirectly by a Federal 
agency or have been submitted to a Federal 
agency for reimbursement; or 
(B) foreign government funding. 
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(2) The term ‘‘nondevelopmental item’’— 
(A) has the meaning given that term in 
section 4(13) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 403(13)); and 
(B) also includes previously developed 
items of supply that require modifications other 
than those customarily available in the commer-
cial marketplace if such modifications are con-
sistent with the requirement in subsection 
(b)(3)(A). 
(3) The term ‘‘nontraditional defense con-
tractor’’ has the meaning given that term in section 
2302(9) of title 10, United States Code (as added 
by subsection (g)). 
(4) The terms ‘‘independent research and devel-
opments costs’’ and ‘‘bid and proposal costs’’ have 
the meaning given such terms in section 31.205-18 
of the Federal Acquisition Regulation. 
(f) SUNSET.— 
(1) IN GENERAL.—The authority to carry out 
the pilot program shall expire on the date that is 
five years after the date of the enactment of this 
Act. 
(2) CONTINUATION OF CURRENT CONTRACTS.— 
The expiration under paragraph (1) of the authority 
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to carry out the pilot program shall not affect the 
validity of any contract awarded under the pilot pro-
gram before the date of the expiration of the pilot 
program under that paragraph. 
(g) STATUTORY DEFINITION OF NONTRADITIONAL 
DEFENSE CONTRACTOR.— 
(1) 
NONTRADITIONAL
DEFENSE
CON-
TRACTOR.—Section 2302 of title 10, United States 
Code, is amended by adding at the end the fol-
lowing: 
‘‘(9) The term ‘nontraditional defense con-
tractor’, with respect to a procurement or with re-
spect to a transaction authorized under section 
2371(a) of this title, means an entity that is not 
currently performing and has not performed, for at 
least the one-year period preceding the solicitation of 
sources by the Department of Defense for the pro-
curement or transaction, any of the following for the 
Department of Defense: 
‘‘(A) Any contract or subcontract that is 
subject to full coverage under the cost account-
ing standards prescribed pursuant to section 26 
of the Office of Federal Procurement Policy Act 
(41 U.S.C. 422) and the regulations imple-
menting such section. 
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‘‘(B) Any other contract in excess of 
$500,000 under which the contractor is re-
quired to submit certified cost or pricing data 
under section 2306a of this title.’’. 
(2) CONFORMING AMENDMENT.—Section 845(f) 
of the National Defense Authorization Act for Fiscal 
Year 1994 (10 U.S.C. 2371 note) is amended to 
read as follows: 
‘‘(f) NONTRADITIONAL DEFENSE CONTRACTOR DE-
FINED.—In this section, the term ‘nontraditional defense 
contractor’ has the meaning provided by section 2302(9) 
of title 10, United States Code.’’. 
PART II—DEFENSE ACQUISITION WORKFORCE 
SEC. 871. ACQUISITION WORKFORCE EXCELLENCE. 
(a) ACQUISITION WORKFORCE EXCELLENCE.—Sub-
chapter I of chapter 87 of title 10, United States Code, 
is amended by inserting after section 1701 the following 
new section: 
‘‘§ 1701a. Management for acquisition workforce ex-
cellence 
‘‘(a) PURPOSE.—The purpose of this chapter is to re-
quire the Department of Defense to develop and manage 
a highly skilled professional acquisition workforce— 
‘‘(1) in which excellence and contribution to 
mission is rewarded; 
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‘‘(2) which has the technical expertise and busi-
ness skills to ensure the Department receives the 
best value for the expenditure of public resources; 
‘‘(3) which serves as a model for performance 
management of employees of the Department; and 
‘‘(4) which is managed in a manner that com-
plements and reinforces the management of the de-
fense acquisition system pursuant to chapter 149 of 
this title. 
‘‘(b) PERFORMANCE MANAGEMENT.—In order to 
achieve the purpose set forth in subsection (a), the Sec-
retary of Defense shall— 
‘‘(1) use the full authorities provided in sub-
sections (a) through (d) of section 9902 of title 5, 
including flexibilities related to performance manage-
ment and hiring and to training of managers; 
‘‘(2) require managers to develop performance 
plans for individual members of the acquisition 
workforce in order to give members an under-
standing of how their performance contributes to 
their organization’s mission and the success of the 
defense acquisition system (as defined in section 
2545 of this title); 
‘‘(3) to the extent appropriate, use the lessons 
learned from the acquisition demonstration project 
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carried out under section 1762 of this title related 
to contribution-based compensation and appraisal, 
and how those lessons may be applied within the 
General Schedule system; 
‘‘(4) develop attractive career paths; 
‘‘(5) encourage continuing education and train-
ing; 
‘‘(6) develop appropriate procedures for warn-
ings during performance evaluations for members of 
the acquisition workforce who consistently fail to 
meet performance standards; 
‘‘(7) take full advantage of the Defense Civilian 
Leadership Program established under section 1112 
of the National Defense Authorization Act for Fiscal 
Year 2010 (Public Law 111–84; 123 Stat. 2496; 10 
U.S.C. 1580 note prec.); 
‘‘(8) use the authorities for highly qualified ex-
perts under section 9903 of title 5, to hire experts 
who are skilled acquisition professionals to— 
‘‘(A) serve in leadership positions within 
the acquisition workforce to strengthen manage-
ment and oversight; 
‘‘(B) provide mentors to advise individuals 
within the acquisition workforce on their career 
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paths and opportunities to advance and excel 
within the acquisition workforce; and 
‘‘(C) assist with the design of education 
and training courses and the training of indi-
viduals in the acquisition workforce; and 
‘‘(9) use the authorities for expedited security 
clearance processing pursuant to section 1564 of 
this title. 
‘‘(c) NEGOTIATIONS.—Any action taken by the Sec-
retary under this section, or to implement this section, 
shall be subject to the requirements of chapter 71 of title 
5. 
‘‘(d) REGULATIONS.—Any rules or regulations pre-
scribed pursuant to this section shall be deemed an agency 
rule or regulation under section 7117(a)(2) of title 5, and 
shall not be deemed a Government-wide rule or regulation 
under section 7117(a)(1) of such title.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
at the beginning of such subchapter is amended by insert-
ing after the item relating to section 1701 the following 
new item: 
‘‘1701a. Management for acquisition workforce excellence.’’. 
SEC. 872. AMENDMENTS TO THE ACQUISITION WORKFORCE 
DEMONSTRATION PROJECT. 
(a) CODIFICATION INTO TITLE 10.— 
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(1) IN
GENERAL.—Chapter 87 of title 10, 
United States Code, is amended by inserting after 
section 1761 the following new section: 
‘‘§ 1762. Demonstration project relating to certain ac-
quisition personnel management policies 
and procedures 
‘‘(a) COMMENCEMENT.—The Secretary of Defense is 
authorized to carry out a demonstration project, the pur-
pose of which is to determine the feasibility or desirability 
of one or more proposals for improving the personnel man-
agement policies or procedures that apply with respect to 
the acquisition workforce of the Department of Defense 
and supporting personnel assigned to work directly with 
the acquisition workforce. 
‘‘(b) TERMS AND CONDITIONS.—(1) Except as other-
wise provided in this subsection, any demonstration 
project described in subsection (a) shall be subject to sec-
tion 4703 of title 5 and all other provisions of such title 
that apply with respect to any demonstration project 
under such section. 
‘‘(2) Subject to paragraph (3), in applying section 
4703 of title 5 with respect to a demonstration project 
described in subsection (a)— 
‘‘(A) ‘180 days’ in subsection (b)(4) of such 
section shall be deemed to read ‘120 days’; 
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‘‘(B) ‘90 days’ in subsection (b)(6) of such sec-
tion shall be deemed to read ‘30 days’; and 
‘‘(C) subsection (d)(1) of such section shall be 
disregarded. 
‘‘(3) Paragraph (2) shall not apply with respect to 
a demonstration project unless— 
‘‘(A) for each organization or team partici-
pating in the demonstration project— 
‘‘(i) at least one-third of the workforce par-
ticipating in the demonstration project consists 
of members of the acquisition workforce; and 
‘‘(ii) at least two-thirds of the workforce 
participating in the demonstration project con-
sists of members of the acquisition workforce 
and supporting personnel assigned to work di-
rectly with the acquisition workforce; and 
‘‘(B) the demonstration project commences be-
fore October 1, 2007. 
‘‘(c) LIMITATION ON NUMBER OF PARTICIPANTS.— 
The total number of persons who may participate in the 
demonstration project under this section may not exceed 
120,000. 
‘‘(d) EFFECT OF REORGANIZATIONS.—The applica-
bility of paragraph (2) of subsection (b) to an organization 
or team shall not terminate by reason that the organiza-
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tion or team, after having satisfied the conditions in para-
graph (3) of such subsection when it began to participate 
in a demonstration project under this section, ceases to 
meet one or both of the conditions set forth in subpara-
graph (A) of such paragraph (3) as a result of a reorga-
nization, restructuring, realignment, consolidation, or 
other organizational change. 
‘‘(e) ASSESSMENTS.—(1) The Secretary of Defense 
shall designate an independent organization to conduct 
two assessments of the acquisition workforce demonstra-
tion project described in subsection (a). 
‘‘(2) Each such assessment shall include the fol-
lowing: 
‘‘(A) A description of the workforce included in 
the project. 
‘‘(B) An explanation of the flexibilities used in 
the project to appoint individuals to the acquisition 
workforce and whether those appointments are based 
on competitive procedures and recognize veteran’s 
preferences. 
‘‘(C) An explanation of the flexibilities used in 
the project to develop a performance appraisal sys-
tem that recognizes excellence in performance and 
offers opportunities for improvement. 
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‘‘(D) The steps taken to ensure that such sys-
tem is fair and transparent for all employees in the 
project. 
‘‘(E) How the project allows the organization to 
better meet mission needs. 
‘‘(F) An analysis of how the flexibilities in sub-
paragraphs (B) and (C) are used, and what barriers 
have been encountered that inhibit their use. 
‘‘(G) Whether there is a process for— 
‘‘(i) ensuring ongoing performance feed-
back and dialogue among supervisors, man-
agers, and employees throughout the perform-
ance appraisal period; and 
‘‘(ii) setting timetables for performance ap-
praisals. 
‘‘(H) The project’s impact on career progres-
sion. 
‘‘(I) The project’s appropriateness or inappro-
priateness in light of the complexities of the work-
force affected. 
‘‘(J) The project’s sufficiency in terms of pro-
viding protections for diversity in promotion and re-
tention of personnel. 
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‘‘(K) The adequacy of the training, policy 
guidelines, and other preparations afforded in con-
nection with using the project. 
‘‘(L) Whether there is a process for ensuring 
employee involvement in the development and im-
provement of the project. 
‘‘(3) The first assessment under this subsection shall 
be completed not later than September 30, 2012. The sec-
ond and final assessment shall be completed not later than 
September 30, 2016. The Secretary shall submit to the 
covered congressional committees a copy of each assess-
ment within 30 days after receipt by the Secretary of the 
assessment. 
‘‘(f) COVERED CONGRESSIONAL COMMITTEES.—In 
this section, the term ‘covered congressional committees’ 
means— 
‘‘(1) the Committees on Armed Services of the 
Senate and the House of Representatives; 
‘‘(2) the Committee on Homeland Security and 
Governmental Affairs of the Senate; and 
‘‘(3) the Committee on Oversight and Govern-
ment Reform of the House of Representatives. 
‘‘(g) TERMINATION OF AUTHORITY.—The authority 
to conduct a demonstration program under this section 
shall terminate on September 30, 2017. 
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‘‘(h) CONVERSION.—Within 6 months after the au-
thority to conduct a demonstration project under this sec-
tion is terminated as provided in subsection (g), employees 
in the project shall convert to the civilian personnel system 
created pursuant to section 9902 of title 5.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of subchapter V of chapter 87 
of title 10, United States Code, is amended by in-
serting after the item relating to section 1761 the 
following new item: 
‘‘1762. Demonstration project relating to certain acquisition personnel manage-
ment policies and procedures.’’. 
(b) CONFORMING REPEAL.—Section 4308 of the Na-
tional Defense Authorization Act for Fiscal Year 1996 
(Public Law 104–106; 10 U.S.C. 1701 note) is repealed. 
SEC. 873. CAREER DEVELOPMENT FOR CIVILIAN AND MILI-
TARY 
PERSONNEL 
IN 
THE 
ACQUISITION 
WORKFORCE. 
(a) CAREER PATHS.— 
(1) AMENDMENT.—Chapter 87 of title 10, 
United States Code, is amended by inserting after 
section 1722a the following new section: 
‘‘§ 1722b. Special requirements for civilian employees 
in the acquisition field 
‘‘(a) REQUIREMENT FOR POLICY AND GUIDANCE RE-
GARDING CIVILIAN PERSONNEL IN ACQUISITION.—The 
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Secretary of Defense, acting through the Under Secretary 
of Defense for Acquisition, Technology, and Logistics, 
shall establish policies and issue guidance to ensure the 
proper development, assignment, and employment of civil-
ian members of the acquisition workforce to achieve the 
objectives specified in subsection (b). 
‘‘(b) OBJECTIVES.—Policies established and guidance 
issued pursuant to subsection (a) shall ensure, at a min-
imum, the following: 
‘‘(1) A career path in the acquisition field that 
attracts the highest quality civilian personnel, from 
either within or outside the Federal Government. 
‘‘(2) A deliberate workforce development strat-
egy that increases attainment of key experiences 
that contribute to a highly qualified acquisition 
workforce. 
‘‘(3) Sufficient opportunities for promotion and 
advancement in the acquisition field. 
‘‘(4) A sufficient number of qualified, trained 
members eligible for and active in the acquisition 
field to ensure adequate capacity, capability, and ef-
fective succession for acquisition functions, including 
contingency contracting, of the Department of De-
fense. 
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‘‘(5) A deliberate workforce development strat-
egy that ensures diversity in promotion, advance-
ment, and experiential opportunities commensurate 
with the general workforce outlined in this section. 
‘‘(c) INCLUSION OF INFORMATION IN ANNUAL RE-
PORT.—The Secretary of Defense shall include in the re-
port to Congress required under section 115b(d) of this 
title the following information related to the acquisition 
workforce for the period covered by the report (which shall 
be shown for the Department of Defense as a whole and 
separately for the Army, Navy, Air Force, Marine Corps, 
Defense Agencies, and Office of the Secretary of Defense): 
‘‘(1) The total number of persons serving in the 
Acquisition Corps, set forth separately for members 
of the armed forces and civilian employees, by grade 
level and by functional specialty. 
‘‘(2) The total number of critical acquisition po-
sitions held, set forth separately for members of the 
armed forces and civilian employees, by grade level 
and by other appropriate categories (including by 
program manager, deputy program manager, and di-
vision head positions), including average length of 
time served in each position. For each such category, 
the report shall specify the number of civilians hold-
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ing such positions compared to the total number of 
positions filled. 
‘‘(3) The number of employees to whom the re-
quirements of subsections (b)(2)(A) and (b)(2)(B) of 
section 1732 of this title did not apply because of 
the exceptions provided in paragraphs (1) and (2) of 
section 1732(c) of this title, set forth separately by 
type of exception. 
‘‘(4) The number of times a waiver authority 
was exercised under section 1724(d), 1732(d), 
1734(d), or 1736(c) of this title or any other provi-
sion of this chapter (or other provision of law) which 
permits the waiver of any requirement relating to 
the acquisition workforce, and in the case of each 
such authority, the reasons for exercising the au-
thority. The Secretary may present the information 
provided under this paragraph by category or group-
ing of types of waivers and reasons.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of subchapter II of chapter 87 
of such title is amended by inserting after the item 
relating to section 1722a the following new item: 
‘‘1722b. Special requirements for civilian employees in the acquisition field.’’. 
(b) CAREER EDUCATION AND TRAINING.—Section 
1723 of such title is amended by redesignating subsection 
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(b) as subsection (c) and inserting after subsection (a) the 
following new subsection: 
‘‘(b) CAREER PATH REQUIREMENTS.—For each ca-
reer path, the Secretary of Defense, acting through the 
Under Secretary of Defense for Acquisition, Technology, 
and Logistics, shall establish requirements for the comple-
tion of course work and related on-the-job training and 
demonstration of qualifications in the critical acquisition- 
related duties and tasks of the career path. The Secretary 
of Defense, acting through the Under Secretary, shall 
also— 
‘‘(1) encourage individuals in the acquisition 
workforce to maintain the currency of their acquisi-
tion knowledge and generally enhance their knowl-
edge of related acquisition management disciplines 
through academic programs and other self-develop-
mental activities; and 
‘‘(2) develop key work experiences, including 
the creation of a program sponsored by the Depart-
ment of Defense that facilitates the periodic inter-
action between individuals in the acquisition work-
force and the end user in such end user’s environ-
ment to enhance the knowledge base of such work-
force, for individuals in the acquisition workforce so 
that the individuals may gain in-depth knowledge 
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and experience in the acquisition process and become 
seasoned, well-qualified members of the acquisition 
workforce.’’. 
SEC. 874. RECERTIFICATION AND TRAINING REQUIRE-
MENTS. 
(a) CONTINUING EDUCATION.—Section 1723 of title 
10, United States Code, as amended by section 873, is 
further amended by amending subsection (a) to read as 
follows: 
‘‘(a) QUALIFICATION REQUIREMENTS.—(1) The Sec-
retary of Defense shall establish education, training, and 
experience requirements for each acquisition position, 
based on the level of complexity of duties carried out in 
the position. In establishing such requirements, the Sec-
retary shall ensure the availability and sufficiency of train-
ing in all areas of acquisition, including additional training 
courses with an emphasis on services contracting, market 
research strategies (including assessments of local con-
tracting capabilities), long-term sustainment strategies, 
information technology, and rapid acquisition. 
‘‘(2) In establishing such requirements for positions 
other than critical acquisition positions designated pursu-
ant to section 1733 of this title, the Secretary may state 
the requirements by categories of positions. 
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‘‘(3) The Secretary of Defense, acting through the 
Under Secretary of Defense for Acquisition, Technology, 
and Logistics, shall establish requirements for continuing 
education and periodic renewal of an individual’s certifi-
cation. Any requirement for a certification renewal shall 
not require a renewal more often than once every five 
years.’’. 
(b) STANDARDS FOR TRAINING.— 
(1) IN GENERAL.—Subchapter IV of Chapter 
87 of title 10, United States Code, is amended by 
adding at the end the following new section: 
‘‘§ 1748. Fulfillment standards for acquisition work-
force training 
‘‘The Secretary of Defense, acting through the Under 
Secretary of Defense for Acquisition, Technology, and Lo-
gistics, shall develop fulfillment standards, and implement 
and maintain a program, for purposes of the training re-
quirements of sections 1723, 1724, and 1735 of this title. 
Such fulfillment standards shall consist of criteria for de-
termining whether an individual has demonstrated com-
petence in the areas that would be taught in the training 
courses required under those sections. If an individual 
meets the appropriate fulfillment standard, the applicable 
training requirement is fulfilled.’’. 
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(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such subchapter is amend-
ed by adding at the end the following new item: 
‘‘1748. Fulfillment standards for acquisition workforce training.’’. 
(3) DEADLINE
FOR
FULFILLMENT
STAND-
ARDS.—The fulfillment standards required under 
section 1748 of title 10, United States Code, as 
added by paragraph (1), shall be developed not later 
than 270 days after the date of the enactment of 
this Act. 
(4) CONFORMING
REPEAL.—Section 853 of 
Public Law 105–85 (111 Stat. 1851) is repealed. 
SEC. 
875. 
INFORMATION 
TECHNOLOGY 
ACQUISITION 
WORKFORCE. 
(a) PLAN REQUIRED.—The Secretary of Defense 
shall develop and carry out a plan to strengthen the part 
of the acquisition workforce that specializes in information 
technology. The plan shall include the following: 
(1) Defined targets for billets devoted to infor-
mation technology acquisition. 
(2) Specific certification requirements for indi-
viduals in the acquisition workforce who specialize in 
information technology acquisition. 
(3) Defined career paths for individuals in the 
acquisition workforce who specialize in information 
technology acquisitions. 
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(b) DEFINITIONS.—In this section: 
(1) The term ‘‘information technology’’ has the 
meaning provided such term in section 11101 of title 
40, United States Code, and includes information 
technology incorporated into a major weapon system. 
(2) The term ‘‘major weapon system’’ has the 
meaning provided such term in section 2379(f) of 
title 10, United States Code. 
(c) DEADLINE.—The Secretary of Defense shall de-
velop the plan required under this section not later than 
270 days after the date of the enactment of this Act. 
SEC. 876. DEFINITION OF ACQUISITION WORKFORCE. 
Section 101(a) of title 10, United States Code, is 
amended by inserting after paragraph (17) the following 
new paragraph: 
‘‘(18) The term ‘acquisition workforce’ means 
the persons serving in acquisition positions within 
the Department of Defense, as designated pursuant 
to section 1721(a) of this title.’’. 
SEC. 
877. 
DEFENSE 
ACQUISITION 
UNIVERSITY 
CUR-
RICULUM REVIEW. 
(a) CURRICULUM REVIEW.—Not later than one year 
after the date of the enactment of this Act, the Under 
Secretary of Defense for Acquisition, Technology, and Lo-
gistics shall lead a review of the curriculum offered by the 
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Defense Acquisition University to ensure it adequately 
supports the training and education requirements of ac-
quisition professionals, particularly in service contracting, 
long term sustainment strategies, information technology, 
and rapid acquisition. The review shall also involve the 
service acquisition executives of each military department. 
(b) ANALYSIS
OF FUNDING REQUIREMENTS
FOR 
TRAINING.—Following the review conducted under sub-
section (a), the Secretary of Defense shall analyze the 
most recent future-years defense program to determine 
the amounts of estimated expenditures and proposed ap-
propriations necessary to support the training require-
ments of the amendments made by section 874, including 
any new training requirements determined after the review 
conducted under subsection (a). The Secretary shall iden-
tify any additional funding needed for such training re-
quirements in the separate chapter on the defense acquisi-
tion workforce required in the next annual strategic work-
force plan under 115b of title 10, United States Code. 
(c) REQUIREMENT FOR ONGOING CURRICULUM DE-
VELOPMENT WITH CERTAIN SCHOOLS.— 
(1) REQUIREMENT.—Section 1746 of title 10, 
United States Code, is amended by adding at the 
end the following new subsection: 
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‘‘(c) CURRICULUM DEVELOPMENT.—The President 
of the Defense Acquisition University shall work with the 
relevant professional schools and degree-granting institu-
tions of the Department of Defense and military depart-
ments to ensure that best practices are used in curriculum 
development to support acquisition workforce positions.’’. 
(2) AMENDMENT TO SECTION HEADING.—(A) 
The heading of section 1746 of such title is amended 
to read as follows: 
‘‘§ 1746. Defense Acquisition University’’. 
(B) The item relating to section 1746 in the 
table of sections at the beginning of subchapter IV 
of chapter 87 of such title is amended to read as fol-
lows: 
‘‘1746. Defense Acquisition University.’’. 
PART III—FINANCIAL MANAGEMENT 
SEC. 881. AUDIT READINESS OF FINANCIAL STATEMENTS 
OF THE DEPARTMENT OF DEFENSE. 
(a) INTERIM MILESTONES.— 
(1) REQUIREMENT.—Not later than 90 days 
after the date of the enactment of this Act, the 
Under Secretary of Defense (Comptroller), in con-
sultation with the Deputy Chief Management Officer 
of the Department of Defense, the secretaries of the 
military departments, and the heads of the defense 
agencies and defense field activities, shall establish 
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interim milestones for achieving audit readiness of 
the financial statements of the Department of De-
fense, consistent with the requirements of section 
1003 of the National Defense Authorization Act for 
Fiscal Year 2010 (Public Law 111–84; 123 Stat. 
2439; 10 U.S.C. 2222 note). 
(2) MATTERS
INCLUDED.—The interim mile-
stones established pursuant to paragraph (1) shall 
include, at a minimum, for each military department 
and for the defense agencies and defense field activi-
ties— 
(A) an interim milestone for achieving 
audit readiness for each major element of the 
statement of budgetary resources, including ci-
vilian pay, military pay, supply orders, con-
tracts, and funds balance with the Treasury; 
and 
(B) an interim milestone for addressing 
the existence and completeness of each major 
category of Department of Defense assets, in-
cluding military equipment, real property, in-
ventory, and operating material and supplies. 
(3) DESCRIPTION IN SEMIANNUAL REPORTS.— 
The Under Secretary shall describe each interim 
milestone established pursuant to paragraph (1) in 
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U.S.C. App. 2061 et seq.), including authorities 
under titles I and II of such Act. 
‘‘(13) Establishing policies related to inter-
national technology security and export control 
issues. 
‘‘(14) Establishing policies related to industrial 
independent research and development programs 
under section 2372 of this title. 
‘‘(15) Such other duties as are assigned by the 
Under Secretary. 
‘‘(c) RULE
OF CONSTRUCTION.—Nothing in sub-
section (b)(9) may be construed to limit the authority or 
modify the policies of the Committee on Foreign Invest-
ment in the United States established under section 
721(k) of the Defense Production Act of 1950 (50 U.S.C. 
App. 2170(k)).’’. 
(b) INDUSTRIAL BASE FUND.— 
(1) IN
GENERAL.—Chapter 148 of title 10, 
United States Code, is amended by adding at the 
end the following new section: 
‘‘§ 2508. Industrial Base Fund 
‘‘(a) ESTABLISHMENT.—The Secretary of Defense 
shall establish an Industrial Base Fund (in this section 
referred to as the ‘Fund’). 
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(7) ASSISTANT SECRETARY FOR OPERATIONAL 
ENERGY PLANS AND PROGRAMS.—Section 139b of 
such title is transferred so as to appear after section 
138b (as transferred and redesignated by paragraph 
(6)), redesignated as section 138c, and amended— 
(A) in subsection (a), by striking ‘‘There is 
a’’ and all that follows through ‘‘The Director’’ 
and inserting ‘‘The Assistant Secretary of De-
fense for Operational Energy Plans and Pro-
grams’’; 
(B) by striking ‘‘Director’’ each place it 
appears and inserting ‘‘Assistant Secretary’’; 
(C) in subsection (d)(2)— 
(i) by striking ‘‘Not later than’’ and 
all that follows through ‘‘military depart-
ments’’ and inserting ‘‘The Secretary of 
each military department’’; 
(ii) by striking ‘‘who will’’ and insert-
ing ‘‘who shall’’; and 
(iii) by inserting ‘‘so designated’’ after 
‘‘The officials’’; and 
(D) in subsection (d)(4), by striking ‘‘The 
initial’’ and all that follows through ‘‘updates to 
the strategy’’ and inserting ‘‘Updates to the 
strategy required by paragraph (1)’’. 
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well as the accounting for missing persons (including 
locating, recovering, and identifying missing persons 
or their remains after hostilities have ceased); and’’; 
(3) by redesignating paragraphs (2), (3), (4), 
and (5) as paragraphs (3), (4), (5), and (6), respec-
tively; 
(4) by inserting after paragraph (1) the fol-
lowing new paragraph (2): 
‘‘(2) The official designated under paragraph 
(1) shall also serve as the Director, Defense Pris-
oner of War/Missing Personnel Office, as established 
under paragraph (6)(A), exercising authority, direc-
tion, and control over that activity.’’. 
(5) in paragraph (3), as so redesignated— 
(A) by striking ‘‘of the office’’ the first 
place it appears; and 
(B) by striking ‘‘head of the office’’ and 
inserting ‘‘official designated under paragraph 
(1) and (2)’’; 
(6) in paragraph (4), as so redesignated— 
(A) by striking ‘‘office’’ and inserting ‘‘des-
ignated official’’; and 
(B) by inserting after ‘‘evasion)’’ the fol-
lowing: ‘‘and for personnel accounting (includ-
ing locating, recovering, and identifying missing 
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SEC. 913. LIMITATION ON USE OF FUNDS FOR PURCHASING 
GLOBAL POSITIONING SYSTEM USER EQUIP-
MENT. 
(a) IN GENERAL.—Except as provided in subsections 
(b) and (c), none of the funds authorized to be appro-
priated or otherwise made available by this Act or any 
other Act for the Department of Defense may be obligated 
or expended to purchase user equipment for the Global 
Positioning System during fiscal years after fiscal year 
2017 unless the equipment is capable of receiving the mili-
tary code (commonly known as the ‘‘M code’’) from the 
Global Positioning System. 
(b) EXCEPTION.—The limitation under subsection 
(a) shall not apply with respect to the purchase of pas-
senger vehicles or commercial vehicles in which Global Po-
sitioning System equipment is installed. 
(c) WAIVER.—The Secretary of Defense may waive 
the limitation under subsection (a) if the Secretary deter-
mines that— 
(1) suitable user equipment capable of receiving 
the military code from the Global Positioning Sys-
tem is not available; or 
(2) with respect to a purchase of user equip-
ment, the Department of Defense does not require 
that user equipment to be capable of receiving the 
military code from the Global Positioning System. 
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(b) ELEMENTS.—The report required by subsection 
(a) shall include the following: 
(1) A description of the Joint Concept of Oper-
ation under which the Air Force operates to fulfill 
intelligence, surveillance, and reconnaissance re-
quirements provided by remotely piloted aircraft. 
(2) A description of the current requirements of 
each combatant command for Air Force intelligence, 
surveillance, and reconnaissance provided by re-
motely piloted aircraft, including— 
(A) the number of orbits or combat air pa-
trols for each major platform and sensor pay-
load combination; 
(B) the number of aircraft, aircraft opera-
tors, and ground crews in each orbit or combat 
air patrol, variations in the numbers of each, 
and the explanation for such variations; 
(C) a description of how requirements are 
being met by the management of personnel, 
platforms, sensors, and networks; and 
(D) a description of various means of ad-
dressing any shortfalls in meeting such require-
ments, including temporary shortfalls and per-
manent shortfalls. 
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