H. R. 1119—200
‘‘(3) Information regarding the possible side effects of the
investigational new drug or drug unapproved for its applied
use, including any known side effects possible as a result of
the interaction of such drug with other drugs or treatments
being administered to the members receiving such drug.
‘‘(4) Such other information that, as a condition of authoriz-
ing the use of the investigational new drug or drug unapproved
for its applied use, the Secretary of Health and Human Services
may require to be disclosed.
‘‘(e) RECORDS OF USE.—The Secretary of Defense shall ensure
that the medical records of members accurately document—
‘‘(1) the receipt by members of any investigational new
drug or drug unapproved for its applied use; and
‘‘(2) the notice required by subsection (a)(1).
‘‘(f) DEFINITIONS.—In this section:
‘‘(1) The term ‘investigational new drug’ means a drug
covered by section 505(i) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 355(i)).
‘‘(2) The term ‘drug unapproved for its applied use’ means
a drug administered for a use not described in the approved
labeling of the drug under section 505 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355).’’.
(b) CLERICAL AMENDMENT.—The table of sections at the begin-
ning of such chapter is amended by adding at the end the following
new item:
‘‘1107. Notice of use of an investigational new drug or a drug unapproved for its
applied use.’’.
SEC. 767. REPORT ON PLANS TO TRACK LOCATION OF MEMBERS IN
A THEATER OF OPERATIONS.
Not later than March 1, 1998, the Secretary of Defense shall
submit to Congress a report containing a plan for collecting and
maintaining information regarding the daily location of units of
the Armed Forces, and to the extent practicable individual members
of such units, serving in a theater of operations during a contingency
operation or combat operation.
SEC. 768. SENSE OF CONGRESS REGARDING THE DEPLOYMENT OF
SPECIALIZED UNITS FOR DETECTING AND MONITORING
CHEMICAL, BIOLOGICAL, AND SIMILAR HAZARDS IN A
THEATER OF OPERATIONS.
It is the sense of Congress that the Secretary of Defense,
in conjunction with the Chairman of the Joint Chiefs of Staff,
should take such actions as are necessary to ensure that the units
of the Armed Forces deployed in the theater of operations for
each contingency operation or combat operation include specialized
units with sufficient capability (including personnel with the appro-
priate training and expertise, and the appropriate equipment) to
detect and monitor the presence of chemical, biological, and similar
hazards to which members of the Armed Forces could be exposed
in that theater during the operation.
SEC. 769. REPORT ON EFFECTIVENESS OF RESEARCH EFFORTS
REGARDING GULF WAR ILLNESSES.
Not later than March 1, 1998, the Secretary of Defense shall
submit to Congress a report evaluating the effectiveness of medical
research initiatives regarding Gulf War illnesses. The report shall
address the following:
H. R. 1119—201
(1) The type and effectiveness of previous research efforts,
including the activities undertaken pursuant to section 743
of the National Defense Authorization Act for Fiscal Year 1997
(Public Law 104–201; 10 U.S.C. 1074 note), section 722 of
the National Defense Authorization Act for Fiscal Year 1995
(Public Law 103–337; 10 U.S.C. 1074 note), and sections 270
and 271 of the National Defense Authorization Act for Fiscal
Year 1994 (Public Law 103–160; 107 Stat. 1613).
(2) Recommendations regarding additional research regard-
ing Gulf War illnesses, including research regarding the nature
and causes of Gulf War illnesses and appropriate treatments
for such illnesses.
(3) The adequacy of Federal funding and the need for
additional funding for medical research initiatives regarding
Gulf War illnesses.
SEC. 770. PERSIAN GULF ILLNESS CLINICAL TRIALS PROGRAM.
(a) FINDINGS.—Congress finds the following:
(1) There are many ongoing studies that investigate risk
factors which may be associated with the health problems
experienced by Persian Gulf veterans; however, there have
been no studies that examine health outcomes and the effective-
ness of the treatment received by such veterans.
(2) The medical literature and testimony presented in hear-
ings on Gulf War illnesses indicate that there are therapies,
such as cognitive behavioral therapy, that have been effective
in treating patients with symptoms similar to those seen in
many Persian Gulf veterans.
(b) ESTABLISHMENT OF PROGRAM.—The Secretary of Defense
and the Secretary of Veterans Affairs, acting jointly, shall establish
a program of cooperative clinical trials at multiple sites to assess
the effectiveness of protocols for treating Persian Gulf veterans
who suffer from ill-defined or undiagnosed conditions. Such proto-
cols shall include a multidisciplinary treatment model, of which
cognitive behavioral therapy is a component.
(c) FUNDING.—Of the funds authorized to be appropriated in
section 201(1) for research, development, test, and evaluation for
the Army, the sum of $4,500,000 shall be available for program
element 62787A (medical technology) in the budget of the Depart-
ment of Defense for fiscal year 1998 to carry out the clinical trials
program established pursuant to subsection (b).
SEC. 771. SENSE OF CONGRESS CONCERNING GULF WAR ILLNESS.
(a) FINDINGS.—Congress makes the following findings:
(1) Americans served in the Persian Gulf Conflict of 1991
in defense of vital national security interests of the United
States.
(2) It was known to United States intelligence and military
commanders that biological and chemical agents were in theater
throughout the conflict.
(3) An undetermined amount of these agents were released
into theater.
(4) A large number of United States military veterans
and allied veterans who served in the Southwest Asia theater
of operations have been stricken with a variety of severe ill-
nesses.
H. R. 1119—202
(5) Previous efforts to discern the causes of those illnesses
have been inadequate, and those illnesses are affecting the
health of both veterans and their families.
(b) SENSE
OF CONGRESS.—It is the sense of Congress that
all promising technology and treatments relating to Gulf War ill-
nesses should be fully explored and tested to facilitate treatment
for members of the Armed Forces and veterans who served the
United States in the Persian Gulf conflict and are stricken with
unexplainable illness.
TITLE 
VIII—ACQUISITION 
POLICY,
ACQUISITION 
MANAGEMENT, 
AND
RELATED MATTERS
Subtitle A—Amendments to General Contracting Authorities, Procedures,
and Limitations
Sec. 801. Expansion of authority to enter into contracts crossing fiscal years to all
severable service contracts not exceeding a year.
Sec. 802. Vesting of title in the United States under contracts paid under progress
payment arrangements or similar arrangements.
Sec. 803. Restriction on undefinitized contract actions.
Sec. 804. Limitation and report on payment of restructuring costs under defense
contracts.
Sec. 805. Increased price limitation on purchases of right-hand drive vehicles.
Sec. 806. Multiyear procurement contracts.
Sec. 807. Audit of procurement of military clothing and clothing-related items by
military installations in the United States.
Sec. 808. Limitation on allowability of compensation for certain contractor person-
nel.
Sec. 809. Elimination of certification requirement for grants.
Sec. 810. Repeal of limitation on adjustment of shipbuilding contracts.
Sec. 811. Item-by-item and country-by-country waivers of domestic source limita-
tions.
Subtitle B—Acquisition Assistance Programs
Sec. 821. One-year extension of pilot mentor-protege program.
Sec. 822. Test program for negotiation of comprehensive subcontracting plans.
Subtitle C—Administrative Provisions
Sec. 831. Retention of expired funds during the pendency of contract litigation.
Sec. 832. Protection of certain information from disclosure.
Sec. 833. Unit cost reports.
Sec. 834. Plan for providing contracting information to general public and small
businesses.
Sec. 835. Two-year extension of crediting of certain purchases toward meeting
subcontracting goals.
Subtitle D—Other Matters
Sec. 841. Repeal of certain acquisition requirements and reports
Sec. 842. Use of major range and test facility installations by commercial entities.
Sec. 843. Requirement to develop and maintain list of firms not eligible for defense
contracts.
Sec. 844. Sense of Congress regarding allowability of costs of employee stock owner-
ship plans.
Sec. 845. Expansion of personnel eligible to participate in demonstration project
relating to acquisition workforce.
Sec. 846. Time for submission of annual report relating to Buy American Act.
Sec. 847. Repeal of requirement for contractor guarantees on major weapon
systems.
Sec. 848. Requirements relating to micro-purchases.
Sec. 849. Promotion rate for officers in an acquisition corps.
Sec. 850. Use of electronic commerce in Federal procurement.
Sec. 851. Conformance of policy on performance based management of civilian
acquisition programs with policy established for defense acquisition pro-
grams.
H. R. 1119—203
Sec. 852. Modification of process requirements for the solutions-based contracting
pilot program.
Sec. 853. Guidance and standards for defense acquisition workforce training
requirements.
Sec. 854. Study and report to Congress assessing dependence on foreign sources for
resistors and capacitors.
Sec. 855. Department of Defense and Federal Prison Industries joint study.
Subtitle A—Amendments to General Con-
tracting Authorities, Procedures, and
Limitations
SEC. 801. EXPANSION OF AUTHORITY TO ENTER INTO CONTRACTS
CROSSING FISCAL YEARS TO ALL SEVERABLE SERVICE
CONTRACTS NOT EXCEEDING A YEAR.
(a) EXPANDED AUTHORITY.—Section 2410a of title 10, United
States Code, is amended to read as follows:
‘‘§ 2410a. Severable service contracts for periods crossing fis-
cal years
‘‘(a) AUTHORITY.—The Secretary of Defense, the Secretary of
a military department, or the Secretary of Transportation with
respect to the Coast Guard when it is not operating as a service
in the Navy, may enter into a contract for procurement of severable
services for a period that begins in one fiscal year and ends in
the next fiscal year if (without regard to any option to extend
the period of the contract) the contract period does not exceed
one year.
‘‘(b) OBLIGATION OF FUNDS.—Funds made available for a fiscal
year may be obligated for the total amount of a contract entered
into under the authority of subsection (a).’’.
(b) CLERICAL AMENDMENT.—The item relating to such section
in the table of sections at the beginning of chapter 141 of such
title is amended to read as follows:
‘‘2410a. Severable service contracts for periods crossing fiscal years.’’.
SEC. 802. VESTING OF TITLE IN THE UNITED STATES UNDER CON-
TRACTS PAID UNDER PROGRESS PAYMENT ARRANGE-
MENTS OR SIMILAR ARRANGEMENTS.
Section 2307 of title 10, United States Code, is amended—
(1) by redesignating subsection (h) as subsection (i); and
(2) by inserting after subsection (g) the following new sub-
section (h):
‘‘(h) VESTING OF TITLE IN THE UNITED STATES.—If a contract
paid by a method authorized under subsection (a)(1) provides for
title to property to vest in the United States, the title to the
property shall vest in accordance with the terms of the contract,
regardless of any security interest in the property that is asserted
before or after the contract is entered into.’’.
SEC. 803. RESTRICTION ON UNDEFINITIZED CONTRACT ACTIONS.
(a) APPLICABILITY
OF WAIVER AUTHORITY
TO HUMANITARIAN
OR PEACEKEEPING OPERATIONS.—Section 2326(b)(4) of title 10,
United States Code, is amended to read as follows:
‘‘(4) The head of an agency may waive the provisions of this
subsection with respect to a contract of that agency if that head
H. R. 1119—204
of an agency determines that the waiver is necessary in order
to support any of the following operations:
‘‘(A) A contingency operation.
‘‘(B) A humanitarian or peacekeeping operation.’’.
(b) HUMANITARIAN OR PEACEKEEPING OPERATION DEFINED.—
Section 2302(7) of such title is amended—
(1) by striking out ‘‘(7)(A)’’ and inserting in lieu thereof
‘‘(7)’’; and
(2) by striking out ‘‘(B) In subparagraph (A), the’’ and
inserting in lieu thereof ‘‘(8) The’’.
SEC. 804. LIMITATION AND REPORT ON PAYMENT OF RESTRUCTURING
COSTS UNDER DEFENSE CONTRACTS.
(a) IN GENERAL.—(1) Chapter 137 of title 10, United States
Code, is amended by inserting after section 2324 the following
new section:
‘‘§ 2325. Restructuring costs
‘‘(a) LIMITATION ON PAYMENT OF RESTRUCTURING COSTS.—(1)
The Secretary of Defense may not pay, under section 2324 of this
title, a defense contractor for restructuring costs associated with
a business combination of the contractor unless the Secretary deter-
mines in writing either—
‘‘(A) that the amount of projected savings for the Depart-
ment of Defense associated with the restructuring will be at
least twice the amount of the costs allowed; or
‘‘(B) that the amount of projected savings for the Depart-
ment of Defense associated with the restructuring will exceed
the amount of the costs allowed and that the business combina-
tion will result in the preservation of a critical capability that
otherwise might be lost to the Department.
‘‘(2) The Secretary may not delegate the authority to make
a determination under paragraph (1) to an official of the Depart-
ment of Defense below the level of an Assistant Secretary of
Defense.
‘‘(b) REPORT.—Not later than March 1 in each of 1998, 1999,
2000, 2001, and 2002, the Secretary of Defense shall submit to
Congress a report that contains, with respect to business combina-
tions occurring on or after August 15, 1994, the following:
‘‘(1) For each defense contractor to which the Secretary
has paid, under section 2324 of this title, restructuring costs
associated with a business combination, a summary of the
following:
‘‘(A) An estimate of the amount of savings for the
Department of Defense associated with the restructuring
that has been realized as of the end of the preceding
calendar year.
‘‘(B) An estimate of the amount of savings for the
Department of Defense associated with the restructuring
that is expected to be achieved on defense contracts.
‘‘(2) An identification of any business combination for which
the Secretary has paid restructuring costs under section 2324
of this title during the preceding calendar year and, for each
such business combination—
‘‘(A) the supporting rationale for allowing such costs;
H. R. 1119—205
‘‘(B) factual information associated with the determina-
tion made under subsection (a) with respect to such costs;
and
‘‘(C) a discussion of whether the business combination
would have proceeded without the payment of restructuring
costs by the Secretary.
‘‘(3) For business combinations of major defense contractors
that took place during the year preceding the year of the
report—
‘‘(A) an assessment of any potentially adverse effects
that the business combinations could have on competition
for Department of Defense contracts (including potential
horizontal effects, vertical effects, and organizational con-
flicts of interest), the national technology and industrial
base, or innovation in the defense industry; and
‘‘(B) the actions taken to mitigate the potentially
adverse effects.
‘‘(c) DEFINITION.—In this section, the term ‘business combina-
tion’ includes a merger or acquisition.’’.
(2) The table of sections at the beginning of such chapter
is amended by inserting after the item relating to section 2324
the following new item:
‘‘2325. Restructuring costs.’’.
(b) GAO REPORTS.—(1) Not later than April 1, 1998, the
Comptroller General shall—
(A) in consultation with appropriate officials in the Depart-
ment of Defense—
(i) identify major market areas affected by business
combinations of defense contractors since January 1, 1990;
and
(ii) develop a methodology for determining the savings
from business combinations of defense contractors on the
prices paid on particular defense contracts; and
(B) submit to the congressional defense committees a report
describing, for each major market area identified pursuant
to subparagraph (A)(i), the changes in numbers of businesses
competing for major defense contracts since January 1, 1990.
(2) Not later than December 1, 1998, the Comptroller General
shall submit to the congressional defense committees a report
containing the following:
(A) Updated information on—
(i) restructuring costs of business combinations paid
by the Department of Defense pursuant to certifications
under section 818 of the National Defense Authorization
Act for Fiscal Year 1995, and
(ii) savings realized by the Department of Defense
as a result of the business combinations for which the
payment of restructuring costs was so certified.
(B) An assessment of the savings from business combina-
tions of defense contractors on the prices paid on a meaningful
sample of defense contracts, determined in accordance with
the methodology developed pursuant to paragraph (1)(A)(ii),
as well as a description of the methodology.
(C) Any recommendations that the Comptroller General
considers appropriate.
H. R. 1119—206
(3) In this subsection, the term ‘‘business combination’’ has
the meaning given that term in section 2325(c) of title 10, United
States Code, as added by subsection (a).
(c) EFFECTIVE DATE.—Section 2325(a) of title 10, United States
Code, as added by subsection (a), shall apply with respect to busi-
ness combinations that occur after the date of the enactment of
this Act.
(d) REPEAL OF SUPERSEDED PROVISIONS.—Subsections (a) and
(g)(3) of section 818 of the National Defense Authorization Act
for Fiscal Year 1995 (10 U.S.C. 2324 note) are repealed.
SEC. 805. INCREASED PRICE LIMITATION ON PURCHASES OF RIGHT-
HAND DRIVE VEHICLES.
Section 2253(a)(2) of title 10, United States Code, is amended
by striking out ‘‘$12,000’’ and inserting in lieu thereof ‘‘$30,000’’.
SEC. 806. MULTIYEAR PROCUREMENT CONTRACTS.
(a) REQUIREMENT FOR AUTHORIZATION BY LAW IN ACTS OTHER
THAN APPROPRIATIONS ACTS.—(1) Subsection (i) of section 2306b
of title 10, United States Code, is amended by adding at the end
the following new paragraph:
‘‘(3) In the case of the Department of Defense, a multiyear
contract in an amount equal to or greater than $500,000,000 may
not be entered into for any fiscal year under this section unless
the contract is specifically authorized by law in an Act other than
an appropriations Act.’’.
(2) Paragraph (3) of section 2306b(i) of title 10, United States
Code, as added by paragraph (1), shall not apply with respect
to a contract authorized by law before the date of the enactment
of this Act.
(b) CODIFICATION OF ANNUAL RECURRING MULTIYEAR PROCURE-
MENT REQUIREMENTS.—(1) Such section is further amended by add-
ing at the end the following new subsection:
‘‘(l) VARIOUS ADDITIONAL REQUIREMENTS WITH RESPECT
TO
MULTIYEAR DEFENSE CONTRACTS.—(1)(A) The head of an agency
may not initiate a contract described in subparagraph (B) unless
the congressional defense committees are notified of the proposed
contract at least 30 days in advance of the award of the proposed
contract.
‘‘(B) Subparagraph (A) applies to the following contracts:
‘‘(i) A multiyear contract—
‘‘(I) that employs economic order quantity procurement
in excess of $20,000,000 in any one year of the contract;
or
‘‘(II) that includes an unfunded contingent liability in
excess of $20,000,000.
‘‘(ii) Any contract for advance procurement leading to a
multiyear contract that employs economic order quantity
procurement in excess of $20,000,000 in any one year.
‘‘(2) The head of an agency may not initiate a multiyear contract
for which the economic order quantity advance procurement is
not funded at least to the limits of the Government’s liability.
‘‘(3) The head of an agency may not initiate a multiyear procure-
ment contract for any system (or component thereof) if the value
of the multiyear contract would exceed $500,000,000 unless author-
ity for the contract is specifically provided in an appropriations
Act.
H. R. 1119—207
‘‘(4) The head of an agency may not terminate a multiyear
procurement contract until 10 days after the date on which notice
of the proposed termination is provided to the congressional defense
committees.
‘‘(5) The execution of multiyear contracting authority shall
require the use of a present value analysis to determine lowest
cost compared to an annual procurement.
‘‘(6) This subsection does not apply to the National Aeronautics
and Space Administration or to the Coast Guard.
‘‘(7) In this subsection, the term ‘congressional defense commit-
tees’ means the following:
‘‘(A) The Committee on Armed Services of the Senate and
the Subcommittee on Defense of the Committee on Appropria-
tions of the Senate.
‘‘(B) The Committee on National Security of the House
of Representatives and the Subcommittee on National Security
of the Committee on Appropriations of the House of Representa-
tives.’’.
(2) The amendment made by paragraph (1) shall take effect
on October 1, 1998.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—Such section
is further amended as follows:
(1) Subsection (a) is amended—
(A) by striking out ‘‘finds—’’ in the matter preceding
paragraph (1) and inserting in lieu thereof ‘‘finds each
of the following:’’;
(B) by capitalizing the initial letter of the first word
in each of paragraphs (1) through (6);
(C) by striking out the semicolon at the end of para-
graphs (1) through (4) and inserting in lieu thereof a period;
and
(D) by striking out ‘‘; and’’ at the end of paragraph
(5) and inserting in lieu thereof a period.
(2) Subsection (d)(1) is amended by striking out ‘‘paragraph
(1)’’ and inserting in lieu thereof ‘‘subsection (a)’’.
(3) Subsection (i)(1) is amended by striking ‘‘five-year’’ and
inserting in lieu thereof ‘‘future-years’’.
SEC. 807. AUDIT OF PROCUREMENT OF MILITARY CLOTHING AND
CLOTHING-RELATED ITEMS BY MILITARY INSTALLA-
TIONS IN THE UNITED STATES.
(a) AUDIT REQUIREMENT.—Not later than September 30, 1998,
the Inspector General of the Department of Defense shall perform
an audit of purchases of military clothing and clothing-related items
in excess of the micro-purchase threshold by military installations
during fiscal years 1996 and 1997 to determine the extent to which
such installations procured military clothing and clothing-related
items in violation of the Buy American Act (41 U.S.C. 10a et
seq.) during those fiscal years.
(b) INSTALLATIONS TO BE AUDITED.—The audit under sub-
section (a)—
(1) shall include an audit of the procurement of military
clothing and clothing-related items by a military installation
of each of the Army, Navy, Air Force, and Marine Corps;
and
(2) shall not cover procurements of clothing and clothing-
related items by the Defense Logistics Agency.
H. R. 1119—208
(c) DEFINITION.—The term ‘‘micro-purchase threshold’’ has the
meaning provided by section 32(f) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 428(f)).
(d) REPORT.—Not later than October 31, 1998, the Inspector
General of the Department of Defense shall submit to Congress
a report on the results of the audit performed under subsection
(a).
SEC. 808. LIMITATION ON ALLOWABILITY OF COMPENSATION FOR CER-
TAIN CONTRACTOR PERSONNEL.
(a) CERTAIN COMPENSATION NOT ALLOWABLE AS COSTS UNDER
DEFENSE CONTRACTS.—(1) Subsection (e)(1) of section 2324 of title
10, United States Code, is amended by adding at the end the
following:
‘‘(P) Costs of compensation of senior executives of contrac-
tors for a fiscal year, regardless of the contract funding source,
to the extent that such compensation exceeds the benchmark
compensation amount determined applicable for the fiscal year
by the Administrator for Federal Procurement Policy under
section 39 of the Office of Federal Procurement Policy Act
(41 U.S.C. 435).’’.
(2) Subsection (l) of such section is amended by adding at
the end the following:
‘‘(4) The term ‘compensation’, for a year, means the total
amount of wages, salary, bonuses and deferred compensation
for the year, whether paid, earned, or otherwise accruing, as
recorded in an employer’s cost accounting records for the year.
‘‘(5) The term ‘senior executive’, with respect to a contractor,
means—
‘‘(A) the chief executive officer of the contractor or
any individual acting in a similar capacity for the contrac-
tor;
‘‘(B) the four most highly compensated employees in
management positions of the contractor other than the
chief executive officer; and
‘‘(C) in the case of a contractor that has components
which report directly to the contractor’s headquarters, the
five most highly compensated employees in management
positions at each such component.
‘‘(6) The term ‘fiscal year’ means a fiscal year established
by a contractor for accounting purposes.’’.
(b) CERTAIN COMPENSATION NOT ALLOWABLE AS COSTS UNDER
NON-DEFENSE CONTRACTS.—(1) Subsection (e)(1) of section 306 of
the Federal Property and Administrative Services Act of 1949 (41
U.S.C. 256) is amended by adding at the end the following:
‘‘(P) Costs of compensation of senior executives of contrac-
tors for a fiscal year, regardless of the contract funding source,
to the extent that such compensation exceeds the benchmark
compensation amount determined applicable for the fiscal year
by the Administrator for Federal Procurement Policy under
section 39 of the Office of Federal Procurement Policy Act
(41 U.S.C. 435).’’.
(2) Such section is further amended by adding at the end
the following:
‘‘(m) OTHER DEFINITIONS.—In this section:
H. R. 1119—209
‘‘(1) The term ‘compensation’, for a fiscal year, means the
total amount of wages, salary, bonuses and deferred compensa-
tion for the fiscal year, whether paid, earned, or otherwise
accruing, as recorded in an employer’s cost accounting records
for the fiscal year.
‘‘(2) The term ‘senior executive’, with respect to a contractor,
means—
‘‘(A) the chief executive officer of the contractor or
any individual acting in a similar capacity for the contrac-
tor;
‘‘(B) the four most highly compensated employees in
management positions of the contractor other than the
chief executive officer; and
‘‘(C) in the case of a contractor that has components
which report directly to the contractor’s headquarters, the
five most highly compensated individuals in management
positions at each such component.
‘‘(3) The term ‘fiscal year’ means a fiscal year established
by a contractor for accounting purposes.’’.
(c) LEVELS OF COMPENSATION NOT ALLOWABLE.—(1) The Office
of Federal Procurement Policy Act (41 U.S.C. 401 et seq.) is amend-
ed by adding at the end the following:
‘‘SEC. 39. LEVELS OF COMPENSATION OF CERTAIN CONTRACTOR
PERSONNEL NOT ALLOWABLE AS COSTS UNDER CERTAIN
CONTRACTS.
‘‘(a) DETERMINATION
REQUIRED.—For purposes of section
2324(e)(1)(P) of title 10, United States Code, and section 306(e)(1)(P)
of the Federal Property and Administrative Services Act of 1949
(41 U.S.C. 256(e)(1)(P)), the Administrator shall review commer-
cially available surveys of executive compensation and, on the basis
of the results of the review, determine a benchmark compensation
amount to apply for each fiscal year. In making determinations
under this subsection the Administrator shall consult with the
Director of the Defense Contract Audit Agency and such other
officials of executive agencies as the Administrator considers appro-
priate.
‘‘(b) BENCHMARK COMPENSATION AMOUNT.—The benchmark
compensation amount applicable for a fiscal year is the median
amount of the compensation provided for all senior executives of
all benchmark corporations for the most recent year for which
data is available at the time the determination under subsection
(a) is made.
‘‘(c) DEFINITIONS.—In this section:
‘‘(1) The term ‘compensation’, for a fiscal year, means the
total amount of wages, salary, bonuses and deferred compensa-
tion for the fiscal year, whether paid, earned, or otherwise
accruing, as recorded in an employer’s cost accounting records
for the fiscal year.
‘‘(2) The term ‘senior executive’, with respect to a corpora-
tion, means—
‘‘(A) the chief executive officer of the corporation or
any individual acting in a similar capacity for the corpora-
tion;
‘‘(B) the four most highly compensated employees in
management positions of the corporation other than the
chief executive officer; and
H. R. 1119—210
‘‘(C) in the case of a corporation that has components
which report directly to the corporate headquarters, the
five most highly compensated individuals in management
positions at each such component.
‘‘(3) The term ‘benchmark corporation’, with respect to a
fiscal year, means a publicly-owned United States corporation
that has annual sales in excess of $50,000,000 for the fiscal
year.
‘‘(4) The term ‘publicly-owned United States corporation’
means a corporation organized under the laws of a State of
the United States, the District of Columbia, the Commonwealth
of Puerto Rico, or a possession of the United States the voting
stock of which is publicly traded.
‘‘(5) The term ‘fiscal year’ means a fiscal year established
by a contractor for accounting purposes.’’.
(2) The table of sections in section 1(b) of such Act is amended
by adding at the end the following:
‘‘Sec. 39. Levels of compensation of certain contractor personnel not allowable as
costs under certain contracts.’’.
(d) REGULATIONS.—Regulations implementing the amendments
made by this section shall be published in the Federal Register
not later than the effective date of the amendments under sub-
section (e).
(e) EFFECTIVE DATE.—The amendments made by this section
shall—
(1) take effect on the date that is 90 days after the date
of the enactment of this Act; and
(2) apply with respect to costs of compensation incurred
after January 1, 1998, under covered contracts entered into
before, on, or after the date of the enactment of this Act.
(f) EXCLUSIVE
APPLICABILITY.—Notwithstanding any other
provision of law, no other limitation in law on the allowability
of costs of compensation of senior executives under covered contracts
shall apply to such costs of compensation incurred after January
1, 1998.
(g) DEFINITIONS.—In this section:
(1) The term ‘‘covered contract’’ has the meaning given
such term in section 2324(l) of title 10, United States Code,
and section 306(l) of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 256(l)).
(2) The terms ‘‘compensation’’ and ‘‘senior executive’’ have
the meanings given such terms in section 2324(l) of title 10,
United States Code, and section 306(m) of the Federal Property
and Administrative Services Act of 1949.
SEC. 809. ELIMINATION OF CERTIFICATION REQUIREMENT FOR
GRANTS.
Section 5153 of the Drug-Free Workplace Act of 1988 (Public
Law 100–690; 102 Stat. 4306; 41 U.S.C. 702) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by striking out ‘‘has certified
to the granting agency that it will’’ and inserting in lieu
thereof ‘‘agrees to’’; and
(B) in paragraph (2), by striking out ‘‘certifies to the
agency’’ and inserting in lieu thereof ‘‘agrees’’; and
(2) in subsection (b)(1)—
(A) by striking out subparagraph (A);
H. R. 1119—211
(B) by redesignating subparagraphs (B) and (C) as
subparagraphs (A) and (B), respectively; and
(C) in subparagraph (A), as so redesignated, by striking
out ‘‘such certification by failing to carry out’’.
SEC. 810. REPEAL OF LIMITATION ON ADJUSTMENT OF SHIPBUILDING
CONTRACTS.
(a) REPEAL.—(1) Section 2405 of title 10, United States Code,
is repealed.
(2) The table of sections at the beginning of chapter 141 of
such title is amended by striking out the item relating to section
2405.
(b) APPLICABILITY.—(1) Except as provided in paragraph (2),
the repeal made by subsection (a) shall be effective with respect
to claims, requests for equitable adjustment, and demands for pay-
ment under shipbuilding contracts that have been or are submitted
before, on, or after the date of the enactment of this Act.
(2) Section 2405 of title 10, United States Code, as in effect
immediately before the date of the enactment of this Act, shall
continue to apply to a contractor’s claim, request for equitable
adjustment, or demand for payment under a shipbuilding contract
that was submitted before such date if—
(A) a contracting officer denied the claim, request, or
demand, and the period for appealing the decision to a court
or board under the Contract Disputes Act of 1978 expired
before such date;
(B) a court or board of contract appeals considering the
claim, request, or demand (including any appeal of a decision
of a contracting officer to deny the claim, request, or demand)
denied or dismissed the claim, request, or demand (or the
appeal), and the action of the court or board became final
and unappealable before such date; or
(C) the contractor released or releases the claim, request,
or demand.
SEC. 811. ITEM-BY-ITEM AND COUNTRY-BY-COUNTRY WAIVERS OF
DOMESTIC SOURCE LIMITATIONS.
(a) ITEM-BY-ITEM AND COUNTRY-BY-COUNTRY IMPLEMENTATION
OF CERTAIN WAIVER AUTHORITY.—Section 2534 of title 10, United
States Code, is amended by adding at the end the following new
subsection:
‘‘(i) IMPLEMENTATION OF CERTAIN WAIVER AUTHORITY.—(1) The
Secretary of Defense may exercise the waiver authority described
in paragraph (2) only if the waiver is made for a particular item
listed in subsection (a) and for a particular foreign country.
‘‘(2) This subsection applies to the waiver authority provided
by subsection (d) on the basis of the applicability of paragraph
(2) or (3) of that subsection.
‘‘(3) The waiver authority described in paragraph (2) may not
be delegated below the Under Secretary of Defense for Acquisition
and Technology.
‘‘(4) At least 15 days before the effective date of any waiver
made under the waiver authority described in paragraph (2), the
Secretary shall publish in the Federal Register and submit to the
congressional defense committees a notice of the determination
to exercise the waiver authority.
H. R. 1119—212
‘‘(5) Any waiver made by the Secretary under the waiver author-
ity described in paragraph (2) shall be in effect for a period not
greater than one year, as determined by the Secretary.’’.
(b) EFFECTIVE DATE.—Subsection (i) of section 2534 of such
title, as added by subsection (a), shall apply with respect to—
(1) contracts and subcontracts entered into on or after
the date of the enactment of this Act; and
(2) options for the procurement of items that are exercised
after such date under contracts that are entered into before
such date if the option prices are adjusted for any reason
other than the application of a waiver granted under subsection
(d) of such section 2534, on the basis of the applicability of
paragraph (2) or (3) of that subsection.
Subtitle B—Acquisition Assistance
Programs
SEC. 821. ONE-YEAR EXTENSION OF PILOT MENTOR-PROTEGE PRO-
GRAM.
(a) ONE-YEAR EXTENSION
OF PILOT MENTOR-PROTEGE PRO-
GRAM.—Section 831(j) of the National Defense Authorization Act
for Fiscal Year 1991 (10 U.S.C. 2302 note) is amended—
(1) in paragraph (1), by striking out ‘‘1998’’ and inserting
in lieu thereof ‘‘1999’’;
(2) in paragraph (2), by striking out ‘‘1999’’ and inserting
in lieu thereof ‘‘2000’’; and
(3) in paragraph (3), by striking out ‘‘1999’’ and inserting
in lieu thereof ‘‘2000’’.
(b) STUDY
ON IMPLEMENTATION
OF PILOT MENTOR-PROTEGE
PROGRAM.—(1) The Comptroller General shall conduct a study on
the implementation of the Mentor-Protege Program established
under section 831 of the National Defense Authorization Act for
Fiscal Year 1991 (10 U.S.C. 2302 note) and the extent to which
the program is achieving the purposes established under that sec-
tion.
(2) The study also shall include the following:
(A) A review of the manner in which funds for the program
have been obligated.
(B) An identification and assessment of the average amount
spent by the Department of Defense on individual mentor-
protege agreements and the correlation between levels of fund-
ing and the business development of the protege firms.
(C) An evaluation of the effectiveness of the incentives
provided to mentor firms to participate in the program.
(D) An assessment of the success of the Mentor-Protege
Program in enhancing the business competitiveness and finan-
cial independence of protege firms.
(3) The Comptroller General shall submit to the Committee
on Armed Services of the Senate and the Committee on National
Security of the House of Representatives a report on the results
of the study not later than March 31, 1998.
SEC. 822. TEST PROGRAM FOR NEGOTIATION OF COMPREHENSIVE
SUBCONTRACTING PLANS.
(a) CONTENT OF SUBCONTRACTING PLANS.—Subsection (b)(2) of
section 834 of the National Defense Authorization Act for Fiscal
H. R. 1119—213
Years 1990 and 1991 (Public Law 101–189; 15 U.S.C. 637 note)
is amended—
(1) by striking out ‘‘plan—’’ and inserting in lieu thereof
‘‘plan of a contractor—’’;
(2) by striking out subparagraph (A);
(3) by redesignating subparagraph (B) as subparagraph
(A) and by striking out the period at the end of such subpara-
graph and inserting in lieu thereof ‘‘; and’’; and
(4) by adding at the end the following:
‘‘(B) shall cover each Department of Defense contract that
is entered into by the contractor and each subcontract that
is entered into by the contractor as the subcontractor under
a Department of Defense contract.’’.
(b) EXTENSION OF PROGRAM.—Subsection (e) of such section
is amended by striking out ‘‘September 30, 1998’’ in the second
sentence and inserting in lieu thereof ‘‘September 30, 2000.’’.
Subtitle C—Administrative Provisions
SEC. 831. RETENTION OF EXPIRED FUNDS DURING THE PENDENCY
OF CONTRACT LITIGATION.
(a) IN GENERAL.—Chapter 141 of title 10, United States Code,
is amended by adding at the end the following new section:
‘‘§ 2410m. Retention of amounts collected from contractor
during the pendency of contract dispute
‘‘(a) RETENTION OF FUNDS.—Notwithstanding sections 1552(a)
and 3302(b) of title 31, any amount, including interest, collected
from a contractor as a result of a claim made by a military depart-
ment or Defense Agency under the Contract Disputes Act of 1978
(41 U.S.C. 601 et seq.), shall remain available in accordance with
this section to pay—
‘‘(1) any settlement of the claim by the parties;
‘‘(2) any judgment rendered in the contractor’s favor on
an appeal of the decision on that claim to the Armed Services
Board of Contract Appeals under section 7 of such Act (41
U.S.C. 606); or
‘‘(3) any judgment rendered in the contractor’s favor in
an action on that claim in a court of the United States.
‘‘(b) PERIOD OF AVAILABILITY.—(1) The period of availability
of an amount under subsection (a), in connection with a claim—
‘‘(A) expires 180 days after the expiration of the period
for bringing an action on that claim in the United States
Court of Federal Claims under section 10(a) of the Contract
Disputes Act of 1978 (41 U.S.C. 609(a)) if, within that 180-
day period—
‘‘(i) no appeal on the claim is commenced at the Armed
Services Board of Contract Appeals under section 7 of
such Act; and
‘‘(ii) no action on the claim is commenced in a court
of the United States; or
‘‘(B) if not expiring under subparagraph (A), expires—
‘‘(i) in the case of a settlement of the claim, 180 days
after the date of the settlement; or
‘‘(ii) in the case of a judgment rendered on the claim
in an appeal to the Armed Services Board of Contract