†
356
HR 1585 PP
dures established for the procurement of commercial items
only if—
‘‘(1) the subsystem is intended for a major weap-
on system that is being purchased, or has been pur-
chased, under procedures established for the procure-
ment of commercial items in accordance with the re-
quirements of subsection (a);
‘‘(2) the Secretary of Defense determines that—
‘‘(A) the subsystem is a commercial item, as
defined in section 4(12) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(12));
and
‘‘(B) the treatment of the subsystem as a
commercial item is necessary to meet national
security objectives; or
‘‘(3) the contractor demonstrates that it has sold,
leased, or licensed the subsystem or an item that is
the same as the subsystem, but for modifications de-
scribed in subparagraphs (B) and (C) of section 4(12)
of the Office of Federal Procurement Policy Act, in
significant quantities to the general public.’’;
(B) by redesignating subsections (c) and (d)
as subsections (e) and (f), respectively; and
(C) by inserting after subsection (b) the fol-
lowing new subsections (c) and (d):
†
357
HR 1585 PP
‘‘(c) TREATMENT OF COMPONENTS AND SPARE PARTS
AS COMMERCIAL ITEMS.—A component or spare part for
a major weapon system may be treated as a commercial
item, and purchased under procedures established for the
procurement of commercial items, only if—
‘‘(1) the component or spare part is intended
for—
‘‘(A) a major weapon system that is being
purchased, or has been purchased, under proce-
dures established for the procurement of commer-
cial items in accordance with the requirements of
subsection (a); or
‘‘(B) a subsystem of a major weapon system
that is being purchased, or has been purchased,
under procedures established for the procurement
of commercial items in accordance with the re-
quirements of subsection (b); or
‘‘(2) the contractor demonstrates that it has sold,
leased, or licensed the component or spare part, or an
item that is the same as the component or spare part,
but for modifications described in subparagraphs (B)
and (C) of section 4(12) of the Office of Federal Pro-
curement Policy Act, in significant quantities to the
general public.
†
358
HR 1585 PP
‘‘(d) PRICE INFORMATION.—In the case of any major
weapon system, subsystem, component, or spare part pur-
chased under procedures established for the procurement of
commercial items under the authority of this section, the
contractor shall provide data other than certified cost or
pricing data, including information on prices at which the
same item or similar items have previously been sold to the
general public, that is adequate for evaluating, through
price analysis, the reasonableness of the price of the con-
tract, subcontract, or modification of the contract or sub-
contract pursuant to which such major weapon system, sub-
system, component or spare part, as the case may be, will
be purchased.’’.
(2) CONFORMING
AMENDMENT
TO
TECHNICAL
DATA PROVISION.—Section 2321(f)(2) of such title is
amended by striking ‘‘(whether or not under a con-
tract for commercial items)’’ and inserting ‘‘(other
than technical data for a subsystem, component, or
spare part that is determined to be a commercial item
in accordance with the requirements of section 2379
of this title)’’.
(b) SALES OF COMMERCIAL ITEMS TO NONGOVERN-
MENTAL ENTITIES.—Not later than 180 days after the date
of the enactment of this Act, the Secretary of Defense shall
modify the regulations of the Department of Defense on the
†
359
HR 1585 PP
procurement of commercial items in order to clarify that
the terms ‘‘general public’’ and ‘‘nongovernmental entities’’
in such regulations do not include the following:
(1) The Federal Government or a State, local, or
foreign government.
(2) A contractor or subcontractor acting on be-
half of the Federal Government or a State, local, or
foreign government.
(c) HARMONIZATION OF THRESHOLDS FOR COST OR
PRICING DATA.—Section 2306a(b)(3)(A) of title 10, United
States Code, is amended by striking ‘‘$500,000’’ and insert-
ing ‘‘the amount specified in subsection (a)(1)(A)(i), as ad-
justed from time to time under subsection (a)(7),’’.
SEC. 823. CLARIFICATION OF RULES REGARDING THE PRO-
CUREMENT OF COMMERCIAL SERVICES.
Notwithstanding section 8002(d) of the Federal Acqui-
sition Streamlining Act of 1994 (41 U.S.C. 264 note), the
Secretary of Defense shall modify the regulations of the De-
partment of Defense on procurements for or on behalf of
the Department of Defense in order to prohibit the use of
time and materials contracts or labor-hour contracts to pur-
chase as commercial items any category of commercial serv-
ices other than the following:
(1) Commercial services procured for support of
a commercial item, as described in section 4(12)(E)
†
360
HR 1585 PP
of the Office of Federal Procurement Policy Act (41
U.S.C. 403(12)(E)).
(2) Emergency repair services.
SEC. 824. MODIFICATION OF COMPETITION REQUIREMENTS
FOR PURCHASES FROM FEDERAL PRISON IN-
DUSTRIES.
(a) 
MODIFICATION
OF
COMPETITION
REQUIRE-
MENTS.—
(1) IN
GENERAL.—Section 2410n of title 10,
United States Code, is amended by striking sub-
sections (a) and (b) and inserting the following new
subsections (a) and (b):
‘‘(a) PRODUCTS FOR WHICH FEDERAL PRISON INDUS-
TRIES DOES NOT HAVE SIGNIFICANT MARKET SHARE.—
(1) Before purchasing a product listed in the latest edition
of the Federal Prison Industries catalog under section
4124(d) of title 18 for which Federal Prison Industries does
not have a significant market share, the Secretary of De-
fense shall conduct market research to determine whether
the product is comparable to products available from the
private sector that best meet the needs of the Department
in terms of price, quality, and time of delivery.
‘‘(2) If the Secretary determines that a Federal Prison
Industries product described in paragraph (1) is not com-
parable in price, quality, or time of delivery to products