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of section 411b(a)(2) of title 37, United States Code (as
added by subsection (a)).
SEC. 624. FUNDING FOR TRANSPORTATION OF HOUSEHOLD
EFFECTS OF PUBLIC HEALTH SERVICE OFFI-
CERS.
Section 406(j)(1) of title 37, United States Code, is
amended in the first sentence—
(1) by inserting ‘‘, and appropriations available
to the Department of Health and Human Services for
providing transportation of household effects of mem-
bers of the Commissioned Corps of the Public Health
Service under subsection (b),’’ after ‘‘members of the
armed forces under subsection (b)’’; and
(2) by striking out ‘‘of the military department’’.
Subtitle D—Retired Pay, Survivor
Benefits, and Related Matters
SEC. 631. EFFECTIVE DATE FOR MILITARY RETIREE COST-
OF-LIVING ADJUSTMENT FOR FISCAL YEAR
1998.
(a) REPEAL OF ADJUSTMENT OF EFFECTIVE DATE
FOR FISCAL YEAR 1998.—Section 1401a(b)(2)(B) of title
10, United States Code, is amended—
(1) by striking out ‘‘(B) SPECIAL RULES’’ and
all that follows through ‘‘In the case of’’ in clause (i)
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and inserting in lieu thereof ‘‘(B) SPECIAL RULE FOR
FISCAL YEAR 1996.—In the case of’’; and
(2) by striking out clause (ii).
(b) REPEAL OF CONTINGENT ALTERNATIVE DATE FOR
FISCAL YEAR 1998.—Section 631 of the National Defense
Authorization Act for Fiscal Year 1996 (Public Law 104–
106; 110 Stat. 364) is amended by striking out subsection
(b).
SEC. 632. ALLOTMENT OF RETIRED OR RETAINER PAY.
(a) AUTHORITY.—(1) Part II of subtitle A of title 10,
United States Code, is amended by inserting after chapter
71 the following new chapter:
‘‘CHAPTER 72—MISCELLANEOUS RETIRED
AND RETAINER PAY AUTHORITIES
‘‘Sec.
‘‘1421. Allotments.
‘‘§ 1421. Allotments
‘‘(a) AUTHORITY.—Subject to such conditions and re-
strictions as may be provided in regulations prescribed
under subsection (b), a member or former member of the
armed forces entitled to retired or retainer pay may trans-
fer or assign the member or former member’s retired or re-
tainer pay account when due and payable.
‘‘(b) REGULATIONS.—The Secretaries of the military
departments and the Secretary of Transportation (with re-
spect to the Coast Guard when it is not operating as a serv-
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ice in the Navy) shall prescribe uniform regulations for the
administration of subsection (a).’’.
(2) The tables of chapters at the beginning of subtitle
A of such title and the beginning of part II of such subtitle
are amended by inserting after the item relating to chapter
71 the following:
‘‘72. Miscellaneous retired and retainer pay authorities ..............................
1421’’.
(b) IMPLEMENTATION.—(1) Notwithstanding section
1421 of title 10, United States Code (as added by subsection
(a)), a person entitled to retired or retainer pay may not
initiate a transfer or assignment of retired or retainer pay
under such section until regulations prescribed under sub-
section (b) of such section take effect.
(2) The Secretaries of the military departments and
the Secretary of Transportation shall prescribe regulations
under subsection (b) of such section that ensure that, begin-
ning not later than October 1, 1997, a person may make
up to six transfers or assignments of the person’s retired
or retainer pay account when due and payable for payment
of any financial obligations.
SEC. 633. COST-OF-LIVING INCREASES IN SBP CONTRIBU-
TIONS TO BE EFFECTIVE CONCURRENTLY
WITH PAYMENT OF RELATED RETIRED PAY
COST-OF-LIVING INCREASES.
(a) SURVIVOR BENEFIT PLAN.—Section 1452(h) of
title 10, United States Code, is amended—
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(1) by inserting ‘‘(1)’’ after ‘‘(h)’’; and
(2) by adding at the end the following new sub-
section:
‘‘(2)(A) Notwithstanding paragraph (1), when the ini-
tial payment of an increase in retired pay under section
1401a of this title (or any other provision of law) to a per-
son is later than the effective date of that increase by reason
of the application of subsection (b)(2)(B) of such section (or
section 631(b) of Public Law 104–106 (110 Stat. 364)),
then the amount of the reduction in the person’s retired pay
shall be effective on the date of that initial payment of the
increase in retired pay rather than the effective date of the
increase in retired pay.
‘‘(B) Subparagraph (A) may not be construed as de-
laying, for purposes of determining the amount of a month-
ly annuity under section 1451 of this title, the effective date
of an increase in a base amount under subsection (h) of
such section from the effective date of an increase in retired
pay under section 1401a of this title to the date on which
the initial payment of that increase in retired pay is made
in accordance with subsection (b)(2)(B) of such section
1401a.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect with respect to retired pay pay-
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able for months beginning on or after the date of the enact-
ment of this Act.
SEC. 634. ANNUITIES FOR CERTAIN MILITARY SURVIVING
SPOUSES.
(a) SURVIVOR ANNUITY.—(1) The Secretary concerned
shall pay an annuity to the qualified surviving spouse of
each member of the uniformed services who—
(A) died before March 21, 1974, and was entitled
to retired or retainer pay on the date of death; or
(B) was a member of a reserve component of the
Armed Forces during the period beginning on Sep-
tember 21, 1972, and ending on October 1, 1978, and
at the time of his death would have been entitled to
retired pay under chapter 67 of title 10, United
States Code (as in effect before December 1, 1994), but
for the fact that he was under 60 years of age.
(2) A qualified surviving spouse for purposes of this
section is a surviving spouse who has not remarried and
who is not eligible for an annuity under section 4 of Public
Law 92–425 (10 U.S.C. 1448 note).
(b) AMOUNT OF ANNUITY.—(1) An annuity under this
section shall be paid at the rate of $165 per month, as ad-
justed from time to time under paragraph (3).
(2) An annuity paid to a surviving spouse under this
section shall be reduced by the amount of any dependency
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and indemnity compensation (DIC) to which the surviving
spouse is entitled under section 1311(a) of title 38, United
States Code.
(3) Whenever after the date of the enactment of this
Act retired or retainer pay is increased under section
1401a(b)(2) of title 10, United States Code, each annuity
that is payable under this section shall be increased at the
same time and by the same total percent. The amount of
the increase shall be based on the amount of the monthly
annuity payable before any reduction under this section.
(c) APPLICATION REQUIRED.—No benefit shall be paid
to any person under this section unless an application for
such benefit is filed with the Secretary concerned by or on
behalf of such person.
(d) DEFINITIONS.—For purposes of this section:
(1) The terms ‘‘uniformed services’’ and ‘‘Sec-
retary concerned’’ have the meanings given such terms
in section 101 of title 37, United States Code.
(2) The term ‘‘surviving spouse’’ has the mean-
ing given the terms ‘‘widow’’ and ‘‘widower’’ in para-
graphs (3) and (4) of section 1447 of title 10, United
States Code.
(e) PROSPECTIVE
APPLICABILITY.—(1) Annuities
under this section shall be paid for months beginning after
the month in which this Act is enacted.
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(2) No benefit shall accrue to any person by reason
of the enactment of this section for any period before the
first month referred to in paragraph (1).
(f) EXPIRATION
OF AUTHORITY.—The authority to
pay annuities under this section shall expire on September
30, 2001.
SEC. 635. ADJUSTED ANNUAL INCOME LIMITATION APPLI-
CABLE TO ELIGIBILITY FOR INCOME SUPPLE-
MENT FOR CERTAIN WIDOWS OF MEMBERS OF
THE UNIFORMED SERVICES.
Section 4 of Public Law 92–425 (10 U.S.C. 1448 note)
is amended by striking out ‘‘$2,340’’ in subsection (a)(3)
and in the first sentence of subsection (b) and inserting in
lieu thereof ‘‘$5,448’’.
SEC. 636. PREVENTION OF CIRCUMVENTION OF COURT
ORDER BY WAIVER OF RETIRED PAY TO EN-
HANCE CIVIL SERVICE RETIREMENT ANNU-
ITY.
(a) CIVIL SERVICE RETIREMENT AND DISABILITY SYS-
TEM.—
(1) IN GENERAL.—Subsection (c) of section 8332
of title 5, United States Code, is amended by adding
at the end the following:
‘‘(4) If an employee or Member waives retired pay that
is subject to a court order for which there has been effective
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service on the Secretary concerned for purposes of section
1408 of title 10, the military service on which the retired
pay is based may be credited as service for purposes of this
subchapter only if, in accordance with regulations pre-
scribed by the Director of the Office of Personnel Manage-
ment, the employee or Member authorizes the Director to
deduct and withhold from the annuity payable to the em-
ployee or Member under this subchapter, and to pay to the
former spouse covered by the court order, the same amount
that would have been deducted and withheld from the em-
ployee’s or Member’s retired pay and paid to that former
spouse under such section 1408.’’.
(2) CONFORMING AMENDMENT.—Paragraph (1)
of such subsection is amended by striking ‘‘Except as
provided in paragraph (2)’’ and inserting ‘‘Except as
provided in paragraphs (2) and (4)’’.
(b) FEDERAL EMPLOYEES’ RETIREMENT SYSTEM.—
(1) IN GENERAL.—Subsection (c) of section 8411
of title 5, United States Code, is amended by adding
at the end the following:
‘‘(5) If an employee or Member waives retired pay that
is subject to a court order for which there has been effective
service on the Secretary concerned for purposes of section
1408 of title 10, the military service on which the retired
pay is based may be credited as service for purposes of this
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chapter only if, in accordance with regulations prescribed
by the Director of the Office of Personnel Management, the
employee or Member authorizes the Director to deduct and
withhold from the annuity payable to the employee or Mem-
ber under this subchapter, and to pay to the former spouse
covered by the court order, the same amount that would
have been deducted and withheld from the employee’s or
Member’s retired pay and paid to that former spouse under
such section 1408.’’.
(2) CONFORMING AMENDMENT.—Paragraph (1)
of such subsection is amended by striking ‘‘Except as
provided in paragraph (2) or (3)’’ and inserting ‘‘Ex-
cept as provided in paragraphs (2), (3), and (5)’’.
(c) EFFECTIVE DATE.—The amendments made by sub-
sections (a) and (b) shall take effect on January 1, 1997.
Subtitle E—Other Matters
SEC. 641. REIMBURSEMENT FOR ADOPTION EXPENSES IN-
CURRED IN ADOPTIONS THROUGH PRIVATE
PLACEMENTS.
(a) DEPARTMENT OF DEFENSE.—Section 1052(g)(1)
of title 10, United States Code, is amended by striking out
‘‘adoption or by a nonprofit, voluntary adoption agency
which is authorized by State or local law to place children
for adoption’’ and inserting in lieu thereof ‘‘adoption, by
a nonprofit, voluntary adoption agency which is authorized
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by State or local law to place children for adoption, or by
any other source if the adoption is supervised by a court
under State or local law’’.
(b) COAST GUARD.—Section 514(g)(1) of title 14,
United States Code, is amended by striking out ‘‘adoption
or by a nonprofit, voluntary adoption agency which is au-
thorized by State or local law to place children for adop-
tion’’ and inserting in lieu thereof ‘‘adoption, by a non-
profit, voluntary adoption agency which is authorized by
State or local law to place children for adoption, or by any
other source if the adoption is supervised by a court under
State or local law’’.
SEC. 642. WAIVER OF RECOUPMENT OF AMOUNTS WITH-
HELD FOR TAX PURPOSES FROM CERTAIN
SEPARATION PAY RECEIVED BY INVOLUNTAR-
ILY 
SEPARATED 
MEMBERS 
AND 
FORMER
MEMBERS OF THE ARMED FORCES.
(a) IN GENERAL.—Section 1174(h) of title 10, United
States Code, is amended—
(1) in paragraph (1), by inserting ‘‘(less the
amount of Federal income tax withheld from such
pay)’’ before the period at the end; and
(2) in paragraph (2), by inserting ‘‘(less the
amount of Federal income tax withheld from such
pay)’’ before the period at the end of the first sentence.
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(b) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 1996, and shall apply
to payments of separation pay, severance pay, or readjust-
ment pay that are made after October 1, 1996.
SEC. 643. PAYMENT TO VIETNAMESE COMMANDOS CAP-
TURED AND INTERNED BY NORTH VIETNAM.
(a) PAYMENT AUTHORIZED.—(1) The Secretary of De-
fense shall make a payment to any person who demonstrates
that he or she was captured and incarcerated by the Demo-
cratic Republic of Vietnam after having entered into the
territory of the Democratic Republic of Vietnam pursuant
to operations conducted under OPLAN 34A or its prede-
cessor.
(2) No payment may be made under this section to
any individual who the Secretary of Defense determines,
based on the available evidence, served in the Peoples Army
of Vietnam or who provided active assistance to the Govern-
ment of the Democratic Republic of Vietnam during the pe-
riod 1958 through 1975.
(3) In the case of a decedent who would have been eligi-
ble for a payment under this section if the decedent had
lived, the payment shall be made to survivors of the decedent
in the order in which the survivors are listed, as follows:
(A) To the surviving spouse.
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(B) If there is no surviving spouse, to the surviv-
ing children (including natural children and adopted
children) of the decedent, in equal shares.
(b) AMOUNT PAYABLE.—The amount payable to or
with respect to a person under this section is $40,000.
(c) TIME LIMITATIONS.—(1) In order to be eligible for
payment under this section, the claimant must file his or
her claim with the Secretary of Defense within 18 months
of the effective date of the regulations implementing this sec-
tion.
(2) Not later than 18 months after the Secretary re-
ceives a claim for payment under this section—
(A) the claimant’s eligibility for payment of the
claim under subsection (a) shall be determined; and
(B) if the claimant is determined eligible, the
claim shall be paid.
(d) DETERMINATION AND PAYMENT OF CLAIMS.—(1)
SUBMISSION AND DETERMINATION OF CLAIMS.—The Sec-
retary of Defense shall establish by regulation procedures
whereby individuals may submit claims for payment under
this section. Such regulations shall be issued within 6
months of the date of enactment of this Act.
(2) PAYMENT OF CLAIMS.—The Secretary of Defense,
in consultation with the other affected agencies, may estab-
lish guidelines for determining what constitutes adequate
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documentation that an individual was captured and incar-
cerated by the Democratic Republic of Vietnam after having
entered the territory of the Democratic Republic of Vietnam
pursuant to operations conducted under OPLAN 34A or its
predecessor.
(e) AUTHORIZATION
OF APPROPRIATIONS.—Of the
total amount authorized to be appropriated under section
301, $20,000,000 is available for payments under this sec-
tion. Notwithstanding section 301, that amount is author-
ized to be appropriated so as to remain available until ex-
pended.
(f) PAYMENT
IN FULL SATISFACTION
OF CLAIMS
AGAINST THE UNITED STATES.—The acceptance of pay-
ment by an individual under this section shall be in full
satisfaction of all claims by or on behalf of that individual
against the United States arising from operations under
OPLAN 34A or its predecessor.
(g) ATTORNEY FEES.—Notwithstanding any contract,
the representative of an individual may not receive, for
services rendered in connection with the claim of an indi-
vidual under this section, more than ten percent of a pay-
ment made under this section on such claim.
(h) NO RIGHT TO JUDICIAL REVIEW.—All determina-
tions by the Secretary of Defense pursuant to this section
are final and conclusive, notwithstanding any other provi-
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sion of law. Claimants under this program have no right
to judicial review, and such review is specifically precluded.
(i) REPORTS.—(1) No later than 24 months after the
enactment of this Act, the Secretary of Defense shall submit
a report to the Congress on the payment of claims pursuant
to this section.
(2) No later than 42 months after the enactment of
this Act, the Secretary of Defense shall submit a final report
to the Congress on the payment of claims pursuant to this
section.
TITLE VII—HEALTH CARE
PROVISIONS
Subtitle A—General
SEC. 701. IMPLEMENTATION OF REQUIREMENT FOR SE-
LECTED RESERVE DENTAL INSURANCE PLAN.
(a) 
IMPLEMENTATION
BY
CONTRACT.—Section
1076b(a) of title 10, United States Code, is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a) AUTHORITY TO
ESTABLISH PLAN.—’’;
(2) by designating the third sentence as para-
graph (3); and
(3) by inserting after paragraph (1), as des-
ignated by paragraph (1) of this subsection, the fol-
lowing:
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‘‘(2) The Secretary shall provide benefits under the
plan through one or more contracts awarded after full and
open competition.’’.
(b) 
SCHEDULE
FOR
IMPLEMENTATION.—Section
705(b) of the National Defense Authorization Act for Fiscal
Year 1996 (Public Law 104–106; 110 Stat. 373; 10 U.S.C.
1076b note) is amended—
(1) by striking out ‘‘Beginning not later than
October 1, 1996’’ in the first sentence and inserting
in lieu thereof ‘‘During fiscal year 1997’’;
(2) by striking out ‘‘fiscal year 1996’’ both places
it appears and inserting in lieu thereof ‘‘fiscal years
1996 and 1997’’; and
(3) in the second sentence, by striking out ‘‘by
that date’’ and inserting in lieu thereof ‘‘during fiscal
year 1997’’.
SEC. 702. DENTAL INSURANCE PLAN FOR MILITARY RETIR-
EES AND CERTAIN DEPENDENTS.
(a) IN GENERAL.—(1) Chapter 55 of title 10, United
States Code, is amended by inserting after section 1076b
the following new section:
‘‘§ 1076c. Military retirees’ dental insurance plan
‘‘(a) REQUIREMENT.—(1) The Secretary of Defense
shall establish a dental insurance plan for—
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‘‘(A) members and former members of the armed
forces who are entitled to retired or retainer pay;
‘‘(B) members of the Retired Reserve who, except
for not having attained 60 years of age, would be en-
titled to retired pay; and
‘‘(C) eligible dependents of members and former
members covered by the enrollment of such members
or former members in the plan.
‘‘(2) The dental insurance plan shall provide for vol-
untary enrollment of participants and shall authorize a
member or former member to enroll for self only or for self
and eligible dependents.
‘‘(3) The plan shall be administered under regulations
prescribed by the Secretary of Defense, in consultation with
the Secretary of Transportation.
‘‘(b) PREMIUMS.—(1) Subject to paragraph (2), a
member or former member enrolled in the dental insurance
plan shall pay the premiums charged for the insurance cov-
erage. The amount of the premiums payable by a member
or former member entitled to retired or retainer pay shall
be deducted and withheld from the retired or retainer pay
and shall be disbursed to pay the premiums. The regula-
tions prescribed under subsection (a)(3) shall specify the
procedures for payment of the premiums by other enrolled
members and former members.
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‘‘(2) The Secretary of Defense may provide for pre-
mium-sharing between the Department of Defense and the
members and former members enrolled in the plan.
‘‘(c) BENEFITS AVAILABLE UNDER PLAN.—The dental
insurance plan established under subsection (a) shall pro-
vide benefits for basic dental care and treatment, including
diagnostic services, preventative services, basic restorative
services (including endodontics), surgical services, and
emergency services.
‘‘(d) COVERAGE.—(1) The Secretary shall prescribe a
minimum required period for enrollment by a member or
former member in the dental insurance plan established
under subsection (a).
‘‘(2) The Secretary shall terminate the enrollment in
the plan of any member or former member, and any de-
pendents covered by the enrollment, upon the occurrence of
one of the following events:
‘‘(A) Termination of the member or former mem-
ber’s entitlement to retired pay or retainer pay.
‘‘(B) Termination of the member or former mem-
ber’s status as a member of the Retired Reserve.
‘‘(e) CONTINUATION OF DEPENDENTS’ ENROLLMENT
UPON DEATH OF ENROLLEE.—Coverage of a dependent
under an enrollment of a member or former member who
dies during the period of enrollment shall continue until
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the end of that period, except that the coverage may be ter-
minated on any earlier date when the premiums paid are
no longer sufficient to cover continuation of the enrollment.
The Secretary shall prescribe in regulations the parties re-
sponsible for paying the remaining premiums due on the
enrollment and the manner for collection of the premiums.
‘‘(f) ELIGIBLE DEPENDENT DEFINED.—In this sec-
tion, the term ‘eligible dependent’ means a dependent de-
scribed in subparagraph (A), (D), or (I) of section 1072(2)
of this title.’’.
(2) The table of sections at the beginning of such chap-
ter is amended by inserting after the item relating to section
1076b the following new item:
‘‘1076c. Military retirees’ dental insurance plan.’’.
(b) IMPLEMENTATION.—Beginning not later than Oc-
tober 1, 1997, the Secretary of Defense shall offer members
and former members of the Armed Forces referred to in sub-
section (a)(1) of section 1076c of title 10, United States
Code (as added by subsection (a)(1) of this section), the op-
portunity to enroll in the dental insurance plan required
under such section and to receive the benefits under the plan
immediately upon enrollment.
SEC. 703. UNIFORM COMPOSITE HEALTH CARE SYSTEM
SOFTWARE.
(a) REQUIREMENT
FOR USE
OF UNIFORM SOFT-
WARE.—The Secretary of Defense, in consultation with the
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provider to use the uniform software package required
under subsection (a).
(d) DEFINITIONS.—In this section:
(1) The term ‘‘administering Secretaries’’ has the
meaning given such term in section 1072(3) of title
10, United States Code.
(2) The term ‘‘military treatment facility’’—
(A) means a facility of the uniformed serv-
ices in which health care is provided under chap-
ter 55 of title 10, United States Codes; and
(B) includes a facility deemed to be a facil-
ity of the uniformed services by virtue of section
911(a) of the Military Construction Authoriza-
tion Act, 1982 (42 U.S.C. 248c(a)).
(3) The term ‘‘TRICARE program’’ means the
managed health care program that is established by
the Secretary of Defense under the authority of chap-
ter 55 of title 10, United States Code, principally sec-
tion 1097 of such title, and includes the competitive
selection of contractors to financially underwrite the
delivery of health care services under the Civilian
Health and Medical Program of the Uniformed Serv-
ices.
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SEC. 704. ENHANCEMENT OF THIRD-PARTY COLLECTION
AND 
SECONDARY 
PAYER 
AUTHORITIES
UNDER CHAMPUS.
(a) RETENTION AND USE BY TREATMENT FACILITIES
OF AMOUNTS COLLECTED.—Subsection (g)(1) of section
1095 of title 10, United States Code, is amended by insert-
ing ‘‘or through’’ after ‘‘provided at’’.
(b) EXPANSION
OF DEFINITION
OF THIRD PARTY
PAYER.—Subsection (h) of such section is amended—
(1) in the first sentence of paragraph (1), by in-
serting ‘‘and a workers’ compensation program or
plan’’ before the period; and
(2) in paragraph (2)—
(A) by striking out ‘‘organization and’’ and
inserting in lieu thereof a ‘‘organization,’’; and
(B) by inserting ‘‘, and a personal injury
protection plan or medical payments benefit
plan for personal injuries resulting from the op-
eration of a motor vehicle’’ before the period.
(c) APPLICABILITY OF SECONDARY PAYER REQUIRE-
MENT.—Section 1079(j)(1) of such title is amended by in-
serting ‘‘, including any plan offered by a third party payer
(as defined in section 1095(h)(1) of this title),’’ after ‘‘or
health plan’’.
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SEC. 
705. 
CODIFICATION 
OF 
AUTHORITY 
TO 
CREDIT
CHAMPUS COLLECTIONS TO PROGRAM AC-
COUNTS.
(a) CREDITS TO CHAMPUS ACCOUNTS.—Chapter 55
of title 10, United States Code, is amended by inserting
after section 1079 the following:
‘‘§ 1079a. Crediting of CHAMPUS collections to pro-
gram accounts
‘‘All refunds and other amounts collected by or for the
United States in the administration of the Civilian Health
and 
Medical 
Program 
of 
the 
Uniformed 
Services
(CHAMPUS) shall be credited to the appropriation avail-
able for that program for the fiscal year in which col-
lected.’’.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of such chapter is amended by inserting after
the item relating to section 1079 the following new item:
‘‘1079a. Crediting of CHAMPUS collections to program accounts.’’.
SEC. 706. COMPTROLLER GENERAL REVIEW OF HEALTH
CARE ACTIVITIES OF THE DEPARTMENT OF
DEFENSE RELATING TO PERSIAN GULF ILL-
NESSES.
(a) MEDICAL RESEARCH AND CLINICAL CARE PRO-
GRAMS.—The Comptroller General shall analyze the effec-
tiveness of the medical research programs and clinical care
programs of the Department of Defense that relate to ill-
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nesses that might have been contracted by members of the
Armed Forces as a result of service in the Southwest Asia
theater of operations during the Persian Gulf War.
(b) EXPERIMENTAL DRUGS.—The Comptroller General
shall analyze the scope and effectiveness of the policies of
the Department of Defense with respect to the investiga-
tional use of drugs, the experimental use of drugs, and the
use of drugs not approved by the Food and Drug Adminis-
tration to treat illnesses referred to in subsection (a).
(c) ADMINISTRATION
OF MEDICAL RECORDS.—The
Comptroller General shall analyze the administration of
medical records by the military departments in order to as-
sess the extent to which such records accurately reflect the
pre-deployment medical assessments, immunization records,
informed consent releases, complaints during routine sick
call, emergency room visits, visits with unit medics during
deployment, and other relevant medical information relat-
ing to the members and former members referred to in sub-
section (a) with respect to the illnesses referred to in that
subsection.
(d) REPORTS.—The Comptroller General shall submit
to Congress a separate report on each of the analyses re-
quired under subsections (a), (b), and (c). The Comptroller
General shall submit the reports not later than March 1,
1997.
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SEC. 707. RESTORATION OF PREVIOUS POLICY REGARDING
RESTRICTIONS ON USE OF DEPARTMENT OF
DEFENSE MEDICAL FACILITIES.
Section 1093 of title 10, United States Code, is amend-
ed—
(1) by striking out subsection (b); and
(2) in subsection (a), by striking out ‘‘(a) RE-
STRICTION ON USE OF FUNDS.—’’.
SEC. 708. PLANS FOR MEDICARE SUBVENTION DEMONSTRA-
TION PROGRAMS.
(a) PROGRAM FOR ENROLLMENT IN TRICARE MAN-
AGED CARE OPTION.—(1) Not later than September 6,
1996, the Secretary of Defense and the Secretary of Health
and Human Services shall jointly submit to Congress and
the President a report that sets forth a specific plan and
the Secretaries’ recommendations regarding the establish-
ment of a demonstration program under which—
(A) military retirees who are eligible for medi-
care are permitted to enroll in the managed care op-
tion of the Tricare program; and
(B) the Secretary of Health and Human Services
reimburses the Secretary of Defense from the medicare
program on a capitated basis for the costs of provid-
ing health care services to military retirees who en-
roll.
(2) The report shall include the following:
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(A) The number of military retirees projected to
participate in the demonstration program and the
minimum number of such participants necessary to
conduct the demonstration program effectively.
(B) A plan for notifying military retirees of
their eligibility for enrollment in the demonstration
program and for any other matters connected with
enrollment.
(C) A recommendation for the duration of the
demonstration program.
(D) A recommendation for the geographic regions
in which the demonstration program should be con-
ducted.
(E) The appropriate level of capitated reim-
bursement, and a schedule for such reimbursement,
from the medicare program to the Department of De-
fense for health care services provided enrollees in the
demonstration program.
(F) An estimate of the amounts to be allocated
by the Department for the provision of health care
services to military retirees eligible for medicare in
the regions in which the demonstration program is
proposed to be conducted in the absence of the pro-
gram and an assessment of revisions to such alloca-
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tion that would result from the conduct of the pro-
gram.
(G) An estimate of the cost to the Department
and to the medicare program of providing health care
services to medicare eligible military retirees who en-
roll in the demonstration program.
(H) An assessment of the likelihood of cost shift-
ing among the Department and the medicare program
under the demonstration program.
(I) A proposal for mechanisms for reconciling
and reimbursing any improper payments among the
Department and the medicare program under the
demonstration program.
(J) A methodology for evaluating the demonstra-
tion program, including cost analyses.
(K) As assessment of the extent to which the
Tricare program is prepared to meet requirements of
the medicare program for purposes of the demonstra-
tion program and the provisions of law or regulation
that would have to be waived in order to facilitate the
carrying out of the demonstration program.
(L) An assessment of the impact of the dem-
onstration program on military readiness.
(M) Contingency plans for the provision of
health care services under the demonstration program
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in the event of the mobilization of health care person-
nel.
(N) A recommendation of the reports that the
Department and the Department of Health and
Human Services should submit to Congress describing
the conduct of the demonstration program.
(b) FEASABILITY STUDY FOR PROGRAM FOR ENROLL-
MENT IN TRICARE FEE-FOR-SERVICE OPTION.—Not later
than January 3, 1997, the Secretary of Defense and the Sec-
retary of Health and Human Services shall jointly submit
to Congress and the President a report on the feasibility
and advisability of expanding the demonstration program
referred to in subsection (a) so as to provide the Department
with reimbursement from the medicare program on a fee-
for-service basis for health care services provided medicare-
eligible military retirees who enroll in the demonstration
program. The report shall include a proposal for the expan-
sion of the program if the expansion is determined to be
advisable.
(c) AUTHORIZATION
OF APPROPRIATIONS.—Of the
amounts authorized to be appropriated in section 301,
$75,000,000 shall be made available to carry out the dem-
onstration program referred to in subsection (a) if Congress
authorizes the program by the end of the Second Session
of the One Hundred Fourth Congress.
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SEC. 709. RESEARCH AND BENEFITS RELATING TO GULF
WAR SERVICE.
(a) RESEARCH.—(1) The Secretary of Defense shall,
by contract, grant, or other transaction, provide for sci-
entific research to be carried out by entities independent
of the Federal Government on possible causal relationships
between the complex of illnesses and symptoms commonly
known as ‘‘Gulf War syndrome’’ and the possible exposures
of members of the Armed Forces to chemical warfare agents
or other hazardous materials during Gulf War service.
(2) The Secretary shall prescribe the procedures for
making awards under paragraph (1). The procedures
shall—
(A) include a comprehensive, independent peer-
review process for the evaluation of proposals for sci-
entific research that are submitted to the Department
of Defense; and
(B) provide for the final selection of proposals
for award to be based on the scientific merit and pro-
gram relevance of the proposed research.
(3) Of the amount authorized to be appropriated under
section 301(19), $10,000,000 is available for research under
paragraph (1).
(b) HEALTH CARE BENEFITS FOR AFFLICTED CHIL-
DREN OF GULF WAR VETERANS.—(1) Under regulations
prescribed by the Secretary of Defense, any child of a Gulf
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War veteran who has been born after August 2, 1990, and
has a congenital defect or catastrophic illness not excluded
from coverage under paragraph (2) is eligible for medical
and dental care under chapter 55 of title 10, United States
Code, for the congenital defect or catastrophic illness, and
associated conditions, of the child.
(2) The administering Secretaries may exclude from
coverage under this subsection—
(A) any congenital defect or catastrophic illness
that, as determined by the Secretary of Defense to a
reasonable degree of scientific certainty on the basis
of scientific research, is not a defect or catastrophic
illness that can result in a child from an exposure of
a parent of the child to a chemical warfare agent or
other hazardous material to which members of the
Armed Forces might have been exposed during Gulf
War service; and
(B) a particular congenital defect or catastrophic
illness (and any associated condition) of a particular
child if the onset of the defect or illness is determined
to have preceded any possible exposure of the parent
or parents of the child to a chemical warfare agent
or other hazardous material during Gulf War service.
(3) No fee, deductible, or copayment requirement may
be imposed or enforced for medical or dental care provided
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under chapter 55 of title 10, United States Code, in the
case of a child who is eligible for such care under this sub-
section (even if the child would otherwise be subject to such
a requirement on the basis of any eligibility for such care
that the child also has under any provision of law other
than this subsection).
(c) DEFINITIONS.—(1) In this section:
(A) The term ‘‘Gulf War veteran’’ means a vet-
eran of Gulf War service.
(B) The term ‘‘Gulf War service’’ means service
on active duty as a member of the Armed Forces in
the Southwest Asia theater of operations during the
Persian Gulf War.
(C) The term ‘‘Persian Gulf War’’ has the mean-
ing given that term in section 101(33) of title 38,
United States Code.
(D) The term ‘‘administering Secretaries’’ has
the meaning given that term in section 1072(3) of
title 10, United States Code.
(E) The term ‘‘child’’ means a natural child.
(2) The Secretary of Defense shall prescribe in regula-
tions a definition of the terms ‘‘congenital defect’’ and ‘‘cat-
astrophic illness’’ for the purposes of this section.
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SEC. 710. PREVENTIVE HEALTH CARE SCREENING FOR
COLON AND PROSTATE CANCER.
(a) MEMBERS AND FORMER MEMBERS.—(1) Section
1074d of title 10, United States Code, is amended—
(A) in subsection (a)—
(i) by inserting ‘‘(1)’’ before ‘‘Female’’; and
(ii) by adding at the end the following new
paragraph:
‘‘(2) Male members and former members of the uni-
formed services entitled to medical care under section 1074
or 1074a of this title shall also be entitled to preventive
health care screening for colon or prostate cancer at such
intervals and using such screening methods as the admin-
istering Secretaries consider appropriate.’’; and
(B) in subsection (b), by adding at the end the
following new paragraph:
‘‘(8) Colon cancer screening, at the intervals and
using the screening methods prescribed under sub-
section (a)(2).’’.
(2)(A) The heading of such section is amended to read
as follows:
‘‘§ 1074d. Primary and preventive health care services
(B) The item relating to such section in the table of
sections at the beginning of chapter 55 of such title is
amended to read as follows:
‘‘1074d. Primary and preventive health care services.’’.
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(b) DEPENDENTS.—(1) Section 1077(a) of such title
is amended by adding at the end the following new para-
graph:
‘‘(14) Preventive health care screening for colon
or prostate cancer, at the intervals and using the
screening 
methods 
prescribed 
under 
section
1074d(a)(2) of this title.’’.
(2) Section 1079(a)(2) of such title is amended—
(A) in the matter preceding subparagraph (A),
by inserting ‘‘the schedule and method of colon and
prostate cancer screenings,’’ after ‘‘pap smears and
mammograms,’’; and
(B) in subparagraph (B), by inserting ‘‘or colon
and prostate cancer screenings’’ after ‘‘pap smears
and mammograms’’.
Subtitle B—Uniformed Services
Treatment Facilities
SEC. 721. DEFINITIONS.
In this subtitle:
(1) The term ‘‘administering Secretaries’’ means
the Secretary of Defense, the Secretary of Transpor-
tation, and the Secretary of Health and Human Serv-
ices.
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(2) The term ‘‘agreement’’ means the agreement
required under section 722(b) between the Secretary of
Defense and a designated provider.
(3) The term ‘‘capitation payment’’ means an
actuarially sound payment for a defined set of health
care services that is established on a per enrollee per
month basis.
(4) The term ‘‘covered beneficiary’’ means a ben-
eficiary under chapter 55 of title 10, United States
Code, other than a beneficiary under section 1074(a)
of such title.
(5) The term ‘‘designated provider’’ means a
public or nonprofit private entity that was a trans-
feree of a Public Health Service hospital or other sta-
tion under section 987 of the Omnibus Budget Rec-
onciliation Act of 1981 (Public Law 97–35; 95 Stat.
603) and that, before the date of the enactment of this
Act, was deemed to be a facility of the uniformed
services for the purposes of chapter 55 of title 10,
United States Code. The term includes any legal suc-
cessor in interest of the transferee.
(6) The term ‘‘enrollee’’ means a covered bene-
ficiary who enrolls with a designated provider.
(7) The term ‘‘health care services’’ means the
health care services provided under the health plan
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known as the TRICARE PRIME option under the
TRICARE program.
(8) The term ‘‘Secretary’’ means the Secretary of
Defense.
(9) The term ‘‘TRICARE program’’ means the
managed health care program that is established by
the Secretary of Defense under the authority of chap-
ter 55 of title 10, United States Code, principally sec-
tion 1097 of such title, and includes the competitive
selection of contractors to financially underwrite the
delivery of health care services under the Civilian
Health and Medical Program of the Uniformed Serv-
ices.
SEC. 722. INCLUSION OF DESIGNATED PROVIDERS IN UNI-
FORMED SERVICES HEALTH CARE DELIVERY
SYSTEM.
(a) INCLUSION IN SYSTEM.—The health care delivery
system of the uniformed services shall include the designated
providers.
(b) AGREEMENTS
TO PROVIDE MANAGED HEALTH
CARE SERVICES.—(1) After consultation with the other ad-
ministering Secretaries, the Secretary of Defense shall nego-
tiate and enter into an agreement with each designated pro-
vider, under which the designated provider will provide
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managed health care services to covered beneficiaries who
enroll with the designated provider.
(2) The agreement shall be entered into on a sole source
basis. The Federal Acquisition Regulation, except for those
requirements regarding competition, issued pursuant to sec-
tion 25(c) of the Office of Federal Procurement Policy Act
(41 U.S.C. 421(c)) shall apply to the agreements as acquisi-
tions of commercial items.
(3) The implementation of an agreement is subject to
availability of funds for such purpose.
(c) EFFECTIVE DATE OF AGREEMENTS.—(1) Unless
an earlier effective date is agreed upon by the Secretary
and the designated provider, the agreement shall take effect
upon the later of the following:
(A) The date on which a managed care support
contract under the TRICARE program is imple-
mented in the service area of the designated provider.
(B) October 1, 1997.
(2) Notwithstanding paragraph (1), the designated
provider whose service area includes Seattle, Washington,
shall implement its agreement as soon as the agreement per-
mits.
(d) TEMPORARY CONTINUATION OF EXISTING PARTICI-
PATION AGREEMENTS.—The Secretary shall extend the par-
ticipation agreement of a designated provider in effect im-
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mediately before the date of the enactment of this Act under
section 718(c) of the National Defense Authorization Act for
Fiscal Year 1991 (Public Law 101–510; 104 Stat. 1587)
until the agreement required by this section takes effect
under subsection (c).
(e) SERVICE AREA.—The Secretary may not reduce the
size of the service area of a designated provider below the
size of the service area in effect as of September 30, 1996.
(f) COMPLIANCE WITH ADMINISTRATIVE REQUIRE-
MENTS.—(1) Unless otherwise agreed upon by the Secretary
and a designated provider, the designated provider shall
comply with necessary and appropriate administrative re-
quirements established by the Secretary for other providers
of health care services and requirements established by the
Secretary of Health and Human Services for risk-sharing
contractors under section 1876 of the Social Security Act
(42 U.S.C. 1395mm). The Secretary and the designated
provider shall determine and apply only such administra-
tive requirements as are minimally necessary and appro-
priate. A designated provider shall not be required to com-
ply with a law or regulation of a State government requir-
ing licensure as a health insurer or health maintenance or-
ganization.
(2) A designated provider may not contract out more
than five percent of its primary care enrollment without
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the approval of the Secretary, except in the case of primary
care contracts between a designated provider and a primary
care contractor in force on the date of the enactment of this
Act.
SEC. 723. PROVISION OF UNIFORM BENEFIT BY DES-
IGNATED PROVIDERS.
(a) UNIFORM BENEFIT REQUIRED.—A designated pro-
vider shall offer to enrollees the health benefit option pre-
scribed and implemented by the Secretary under section 731
of the National Defense Authorization Act for Fiscal Year
1994 (Public Law 103–160; 10 U.S.C. 1073 note), includ-
ing accompanying cost-sharing requirements.
(b) TIME FOR IMPLEMENTATION OF BENEFIT.—A des-
ignated provider shall offer the health benefit option de-
scribed in subsection (a) to enrollees upon the later of the
following:
(1) The date on which health care services within
the health care delivery system of the uniformed serv-
ices are rendered through the TRICARE program in
the region in which the designated provider operates.
(2) October 1, 1996.
(c) ADJUSTMENTS.—The Secretary may establish a
later date under subsection (b)(2) or prescribe reduced cost-
sharing requirements for enrollees.
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SEC. 724. ENROLLMENT OF COVERED BENEFICIARIES.
(a) FISCAL YEAR 1997 LIMITATION.—(1) During fis-
cal year 1997, the number of covered beneficiaries who are
enrolled in managed care plans offered by designated pro-
viders may not exceed the number of such enrollees as of
October 1, 1995.
(2) The Secretary may waive the limitation under
paragraph (1) if the Secretary determines that additional
enrollment authority for a designated provider is required
to accommodate covered beneficiaries who are dependents
of members of the uniformed services entitled to health care
under section 1074(a) of title 10, United States Code.
(b) PERMANENT LIMITATION.—For each fiscal year
after fiscal year 1997, the number of enrollees in managed
care plans offered by designated providers may not exceed
110 percent of the number of such enrollees as of the first
day of the immediately preceding fiscal year. The Secretary
may waive this limitation as provided in subsection (a)(2).
(c) RETENTION OF CURRENT ENROLLEES.—An en-
rollee in the managed care program of a designated pro-
vider as of September 30, 1997, or such earlier date as the
designated provider and the Secretary may agree upon,
shall continue receiving services from the designated pro-
vider pursuant to the agreement entered into under section
722 unless the enrollee disenrolls from the designated pro-
vider. Except as provided in subsection (e), the administer-
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ing Secretaries may not disenroll such an enrollee unless
the disenrollment is agreed to by the Secretary and the des-
ignated provider.
(d) ADDITIONAL ENROLLMENT AUTHORITY.—Other
covered beneficiaries may also receive health care services
from a designated provider, except that the designated pro-
vider may market such services to, and enroll, only those
covered beneficiaries who—
(1) do not have other primary health insurance
coverage (other than medicare coverage) covering
basic primary care and inpatient and outpatient
services; or
(2) are enrolled in the direct care system under
the TRICARE program, regardless of whether the cov-
ered beneficiaries were users of the health care deliv-
ery system of the uniformed services in prior years.
(e) SPECIAL RULE FOR MEDICARE-ELIGIBLE BENE-
FICIARIES.—If a covered beneficiary who desires to enroll
in the managed care program of a designated provider is
also entitled to hospital insurance benefits under part A
of title XVIII of the Social Security Act (42 U.S.C. 1395c
et seq.), the covered beneficiary shall elect whether to receive
health care services as an enrollee or under part A of title
XVIII of the Social Security Act. The Secretary may
disenroll an enrollee who subsequently violates the election
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made under this subsection and receives benefits under part
A of title XVIII of the Social Security Act.
(f) INFORMATION REGARDING ELIGIBLE COVERED
BENEFICIARIES.—The Secretary shall provide, in a timely
manner, a designated provider with an accurate list of cov-
ered beneficiaries within the marketing area of the des-
ignated provider to whom the designated provider may offer
enrollment.
SEC. 725. APPLICATION OF CHAMPUS PAYMENT RULES.
(a) APPLICATION OF PAYMENT RULES.—Subject to
subsection (b), the Secretary shall require a private facility
or health care provider that is a health care provider under
the Civilian Health and Medical Program of the Uniformed
Services to apply the payment rules described in section
1074(c) of title 10, United States Code, in imposing charges
for health care that the private facility or provider provides
to enrollees of a designated provider.
(b) AUTHORIZED ADJUSTMENTS.—The payment rules
imposed under subsection (a) shall be subject to such modi-
fications as the Secretary considers appropriate. The Sec-
retary may authorize a lower rate than the maximum rate
that would otherwise apply under subsection (a) if the lower
rate is agreed to by the designated provider and the private
facility or health care provider.
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(c) REGULATIONS.—The Secretary shall prescribe reg-
ulations to implement this section after consultation with
the other administering Secretaries.
(d) CONFORMING AMENDMENT.—Section 1074 of title
10, United States Code, is amended by striking out sub-
section (d).
SEC. 726. PAYMENTS FOR SERVICES.
(a) FORM OF PAYMENT.—Unless otherwise agreed to
by the Secretary and a designated provider, the form of
payment for services provided by a designated provider
shall be full risk capitation. The capitation payments shall
be negotiated and agreed upon by the Secretary and the
designated provider. In addition to such other factors as
the parties may agree to apply, the capitation payments
shall be based on the utilization experience of enrollees and
competitive market rates for equivalent health care services
for a comparable population to such enrollees in the area
in which the designated provider is located.
(b) LIMITATION ON TOTAL PAYMENTS.—Total capita-
tion payments to a designated provider shall not exceed an
amount equal to the cost that would have been incurred by
the Government if the enrollees had received their care
through a military treatment facility, the TRICARE pro-
gram, or the medicare program, as the case may be.
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(c) ESTABLISHMENT OF PAYMENT RATES ON ANNUAL
BASIS.—The Secretary and a designated provider shall es-
tablish capitation payments on an annual basis, subject to
periodic review for actuarial soundness and to adjustment
for any adverse or favorable selection reasonably antici-
pated to result from the design of the program.
(d) ALTERNATIVE BASIS
FOR CALCULATING PAY-
MENTS.—After September 30, 1999, the Secretary and a
designated provider may mutually agree upon a new basis
for calculating capitation payments.
SEC. 727. REPEAL OF SUPERSEDED AUTHORITIES.
(a) REPEALS.—The following provisions of law are re-
pealed:
(1) Section 911 of the Military Construction Au-
thorization Act, 1982 (42 U.S.C. 248c).
(2) Section 1252 of the Department of Defense
Authorization Act, 1984 (42 U.S.C. 248d).
(3) Section 718(c) of the National Defense Au-
thorization Act for Fiscal year 1991 (Public Law
101–510; 42 U.S.C. 248c note).
(4) Section 726 of the National Defense Author-
ization Act for Fiscal Year 1996 (Public Law 104–
106; 42 U.S.C. 248c note).
(b) EFFECTIVE DATE.—The amendments made by this
section shall take effect on October 1, 1997.
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TITLE VIII—ACQUISITION POL-
ICY, ACQUISITION MANAGE-
MENT, AND RELATED MAT-
TERS
SEC. 801. PROCUREMENT TECHNICAL ASSISTANCE PRO-
GRAMS.
(a) FUNDING.—Of the amount authorized to be appro-
priated under section 301(5), $12,000,000 shall be available
for carrying out the provisions of chapter 142 of title 10,
United States Code.
(b) SPECIFIC PROGRAMS.—Of the amounts made
available pursuant to subsection (a), $600,000 shall be
available for fiscal year 1997 for the purpose of carrying
out programs sponsored by eligible entities referred to in
subparagraph (D) of section 2411(1) of title 10, United
States Code, that provide procurement technical assistance
in distressed areas referred to in subparagraph (B) of sec-
tion 2411(2) of such title. If there is an insufficient number
of satisfactory proposals for cooperative agreements in such
distressed areas to allow effective use of the funds made
available in accordance with this subsection in such areas,
the funds shall be allocated among the Defense Contract Ad-
ministration Services regions in accordance with section
2415 of such title.
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SEC. 802. 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 amend-
ed—
(1) in paragraph (1), by striking out ‘‘1995’’
and inserting in lieu thereof ‘‘1998’’; and
(2) in paragraph (2), by striking out ‘‘1996’’
and inserting in lieu thereof ‘‘1999’’.
SEC. 803. MODIFICATION OF AUTHORITY TO CARRY OUT
CERTAIN PROTOTYPE PROJECTS.
(a) AUTHORIZED OFFICIALS.—(1) Subsection (a) of
section 845 of the National Defense Authorization Act for
Fiscal Year 1994 (107 Stat. 1547; 10 U.S.C. 2371 note)
is amended by inserting ‘‘, the Secretary of a military de-
partment, or any other official designated by the Secretary
of Defense’’ after ‘‘Agency’’.
(2) Subsection (b)(2) of such section is amended to
read as follows:
‘‘(2) To the maximum extent practicable, competitive
procedures shall be used when entering into agreements to
carry out projects under subsection (a).’’.
(b) EXTENSION
OF AUTHORITY.—Subsection (c) of
such section is amended by striking out ‘‘terminate’’ and
all that follows and inserting in lieu thereof ‘‘terminate at
the end of September 30, 2001.’’.
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SEC. 804. REVISIONS TO THE PROGRAM FOR THE ASSESS-
MENT OF THE NATIONAL DEFENSE TECH-
NOLOGY AND INDUSTRIAL BASE.
(a) NATIONAL DEFENSE PROGRAM FOR ANALYSIS OF
THE TECHNOLOGY AND INDUSTRIAL BASE.—Section 2503
of title 10, United States Code, is amended—
(1) in subsection (a)—
(A) by striking out ‘‘(1) The Secretary of
Defense, in consultation with the National De-
fense Technology and Industrial Base Council’’
in paragraph (1) and inserting in lieu thereof
‘‘The Secretary of Defense, in consultation with
the Secretary of Commerce’’; and
(B) by striking out paragraphs (2), (3), and
(4); and
(2) in subsection (c)(3)(A)—
(A) by striking out ‘‘the National Defense
Technology and Industrial Base Council in’’ and
inserting in lieu thereof ‘‘the Secretary of De-
fense for’’; and
(B) by striking out ‘‘and the periodic plans
required by section 2506 of this title’’.
(b) PERIODIC DEFENSE CAPABILITY ASSESSMENTS.—
(1) Section 2505 of title 10, United States Code, is amended
to read as follows:
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‘‘§ 2505. National technology and industrial base:
periodic defense capability assessments
‘‘(a) PERIODIC ASSESSMENT.—Each fiscal year, the
Secretary of Defense shall prepare selected assessments of
the capability of the national technology and industrial
base to attain the national security objectives set forth in
section 2501(a) of this title.
‘‘(b) ASSESSMENT PROCESS.—The Secretary of De-
fense shall ensure that technology and industrial capability
assessments—
‘‘(1) describe sectors or capabilities, their under-
lying infrastructure and processes;
‘‘(2) analyze present and projected financial per-
formance of industries supporting the sectors or capa-
bilities in the assessment; and
‘‘(3) identify technological and industrial capa-
bilities and processes for which there is potential for
the national industrial and technology base not to be
able to support the achievement of national security
objectives.
‘‘(c) FOREIGN DEPENDENCY CONSIDERATIONS.—In
the preparation of the periodic assessments, the Secretary
shall include considerations of foreign dependency.
‘‘(d) INTEGRATED PROCESS.—The Secretary of De-
fense shall ensure that consideration of the technology and
industrial base assessments is integrated into the overall
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budget, acquisition, and logistics support decision processes
of the Department of Defense.’’.
(2) Section 2502(b) of title 10, United States Code, is
amended—
(A) by striking out ‘‘the following responsibil-
ities:’’ and all that follows through ‘‘effective coopera-
tion’’ and inserting in lieu thereof ‘‘the responsibility
to ensure effective cooperation’’; and
(B) by striking out paragraph (2); and
(3) by redesignating subparagraphs (A), (B),
and (C) as paragraphs (1), (2), and (3), respectively,
and adjusting the margin of such paragraphs two ems
to the left.
(c) REPEAL OF REQUIREMENT FOR PERIODIC DE-
FENSE CAPABILITY PLAN.—Section 2506 of title 10, United
States Code, is repealed.
(d) DEPARTMENT OF DEFENSE TECHNOLOGY AND IN-
DUSTRIAL BASE POLICY GUIDANCE.—Subchapter II of
chapter 148 of title 10, United States Code, is amended by
inserting after section 2505 the following new section 2506:
‘‘§ 2506. Department of Defense technology and indus-
trial base policy guidance
‘‘(a) DEPARTMENTAL GUIDANCE.—The Secretary of
Defense shall prescribe departmental guidance for the at-
tainment of each of the national security objectives set forth
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in section 2501(a) of this title. Such guidance shall provide
for technological and industrial capability considerations
to be integrated into the budget allocation, weapons acquisi-
tion, and logistics support decision processes.
‘‘(b) REPORT TO CONGRESS.—The Secretary of De-
fense shall report on the implementation of the depart-
mental guidance in the annual report to Congress submitted
pursuant to section 2508 of this title.’’.
(e) ANNUAL REPORT TO CONGRESS.—Such subchapter
is amended by inserting after section 2507 the following
new section:
‘‘§ 2508. Annual report to Congress
‘‘The Secretary of Defense shall transmit to the Com-
mittee on Armed Services of the Senate and the Committee
on National Security of the House of Representatives by
March 1 of each year a report which shall include the fol-
lowing information:
‘‘(1) A description of the departmental guidance
prepared pursuant to section 2506 of this title.
‘‘(2) A description of the methods and analyses
being undertaken by the Department of Defense alone
or in cooperation with other Federal agencies, to
identify and address concerns regarding technological
and industrial capabilities of the national technology
and industrial base.
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‘‘(3) A description of the assessments prepared
pursuant to section 2505 of this title and other analy-
ses used in developing the budget submission of the
Department of Defense for the next fiscal year.
‘‘(4) Identification of each program designed to
sustain specific essential technological and industrial
capabilities and processes of the national technology
and industrial base.’’.
(f) REPEAL OF REQUIREMENT TO COORDINATE THE
ENCOURAGEMENT OF TECHNOLOGY TRANSFER WITH THE
COUNCIL.—Subsection 2514(c) of title 10, United States
Code, is amended by striking out paragraph (5).
(g) CLERICAL AMENDMENTS.—The table of sections at
the beginning of subchapter II of chapter 148 of title 10,
United States Code, is amended—
(1) by striking out the item relating to section
2506 and inserting in lieu thereof the following:
‘‘2506. Department of Defense technology and industrial base policy guidance.’’;
and
(2) by adding at the end the following:
‘‘2508. Annual report to Congress.’’.
(h) REPEAL OF SUPERSEDED AND EXECUTED LAW.—
Sections 4218, 4219, and 4220 of the National Defense Au-
thorization Act for Fiscal Year 1993 (Public Law 102–484;
10 U.S.C. 2505 note and 2506 note) are repealed.
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SEC. 805. PROCUREMENTS TO BE MADE FROM SMALL ARMS
INDUSTRIAL BASE FIRMS.
(a) REQUIREMENT.—Chapter 146 of title 10, United
States Code, is amended by adding at the end the following:
‘‘§ 2473. Procurements from the small arms industrial
base
‘‘(a) 
AUTHORITY
TO
DESIGNATE
EXCLUSIVE
SOURCES.—To the extent that the Secretary of Defense de-
termines necessary to preserve the part of the national tech-
nology and industrial base that supplies property and serv-
ices described in subsection (b), the Secretary may require
that the procurements of such items for the Department of
Defense be made only from the firms listed in the plan enti-
tled ‘Preservation of Critical Elements of the Small Arms
Industrial Base’, dated January 8, 1994, that was prepared
by an independent assessment panel of the Army Science
Board.
‘‘(b) COVERED ITEMS.—The authority provided in
subsection (a) applies to the following property and serv-
ices:
‘‘(1) Repair parts for small arms.
‘‘(2) Modifications of parts to improve small
arms used by the armed forces.
‘‘(3) Overhaul of unserviceable small arms of the
armed forces.’’.
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(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of such chapter is amended by adding at the
end the following:
‘‘2473. Procurements from the small arms industrial base.’’.
SEC. 806. EXCEPTION TO PROHIBITION ON PROCUREMENT
OF FOREIGN GOODS.
Section 2534(d)(3) of title 10, United States Code, is
amended by inserting ‘‘or would impede the reciprocal pro-
curement of defense items under a memorandum of under-
standing providing for reciprocal procurement of defense
items that is entered into under section 2531 of this title,’’
after ‘‘a foreign country,’’.
SEC. 807. TREATMENT OF DEPARTMENT OF DEFENSE
CABLE 
TELEVISION 
FRANCHISE 
AGREE-
MENTS.
(a) TREATMENT AS CONTRACT FOR TELECOMMUNI-
CATIONS SERVICES.—Subject to subsection (b), a cable tele-
vision franchise agreement for the Department of Defense
shall be considered a contract for telecommunications serv-
ices for purposes of part 49 of the Federal Acquisition Regu-
lation.
(b) LIMITATION.—The treatment of a cable television
franchise agreement as a contract for telecommunications
services shall be subject to such terms, conditions, limita-
tions, restrictions, and requirements relating to the power
of the executive branch to treat such an agreement as such
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a contract as are identified in the advisory opinion re-
quired under section 823 of the National Defense Authoriza-
tion Act for Fiscal Year 1996 (Public Law 104–106; 110
Stat. 399).
(c) APPLICABILITY.—This section applies to cable tele-
vision franchise agreements for the Department of Defense
only if the United States Court of Federal Claims states
in an advisory opinion referred to in subsection (b) that
it is within the power of the executive branch to treat cable
television franchise agreements for the construction, instal-
lation, or capital improvement of cable television systems
at military installations of the Department of Defense as
contracts under part 49 of the Federal Acquisition Regula-
tion without violating title VI of the Communications Act
of 1934 (47 U.S.C. 521 et seq.).
SEC. 808. REMEDIES FOR REPRISALS AGAINST CONTRAC-
TOR EMPLOYEE WHISTLEBLOWERS.
Section 2409(c)(1) of title 10, United States Code, is
amended by striking out subparagraph (B) and inserting
in lieu thereof the following:
‘‘(B) Order the contractor either—
‘‘(i) to reinstate the person to the position
that the person held before the reprisal, together
with the compensation (including back pay), em-
ployment benefits, and other terms and condi-
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tions of employment that would apply to the per-
son in that position if the reprisal had not been
taken; or
‘‘(ii) without reinstating the person, to pay
the person an amount equal to the compensation
(including back pay) that, if the reprisal had not
been taken, would have been paid the person in
that position up to the date on which the head
of the agency determines that the person has been
subjected to a reprisal prohibited under sub-
section (a).’’.
SEC. 
809. 
IMPLEMENTATION 
OF 
INFORMATION 
TECH-
NOLOGY MANAGEMENT REFORM.
(a) REPORT.—(1) The Secretary of Defense shall in-
clude in the report submitted in 1997 under section 381
of Public Law 103–337 (108 Stat. 2739) a discussion of
the following matters relating to information resources
management by the Federal Government:
(A) The progress made in implementing the In-
formation Technology Management Reform Act of
1996 (division E of Public Law 104–106; 110 Stat.
679; 40 U.S.C. 1401 et seq.) and the amendments
made by that Act.
(B) The progress made in implementing the
strategy for the development or modernization of
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automated information systems for the Department of
Defense, as required by section 366 of Public Law
104–106 (110 Stat 275; 10 U.S.C. 113 note).
(C) Plans of the Department of Defense for estab-
lishing an integrated framework for management of
information resources within the department.
(2) The discussion of matters under paragraph (1)
shall specifically include a discussion of the following:
(A) The status of the implementation of a set of
strategic, outcome-oriented performance measures.
(B) The specific actions being taken to link the
proposed performance measures to the planning, pro-
gramming, and budgeting system of the Department
of Defense and to the life-cycle management processes
of the department.
(C) The results of pilot program testing of pro-
posed performance measures.
(D) The additional training necessary for the
implementation of performance-based information
management.
(E) Plans for integrating management improve-
ment programs of the Department of Defense.
(F) The department-wide actions that are nec-
essary to comply with the requirements of the follow-
ing provisions of law:
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(i) The amendments made by the Govern-
ment Performance and Results Act of 1993 (Pub-
lic Law 103–62; 107 Stat. 285).
(ii) The Information Management Reform
Act of 1996 (division E of Public Law 104–106;
110 Stat 679; 40 U.S.C. 1401 et seq.) and the
amendments made by that Act.
(iii) Title V of the Federal Acquisition
Management Streamlining Act of 1994 (Public
Law 103–355; 108 Stat. 3349) and the amend-
ments made by that title.
(iv) The Chief Financial Officers Act of
1990 (Public Law 101–576; 104 Stat. 2838) and
the amendments made by that Act.
(G) A strategic information resources plan for
the Department of Defense that is based on the strat-
egy of the Secretary of Defense for support of the de-
partment’s overall strategic goals by the core and sup-
porting processes of the department.
(b) YEAR 2000 SOFTWARE CONVERSION.—(1) The Sec-
retary of Defense shall ensure that all information tech-
nology acquired by the Department of Defense pursuant to
contracts entered into after September 30, 1996, have the
capabilities that comply with time and date standards es-
tablished by the National Institute of Standards and Tech-
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nology or, if there is no such standard, generally accepted
industry standards for providing fault-free processing of
date and date-related data in 2000.
(2) The Secretary, acting through the chief information
officers within the department (as designated pursuant to
section 3506 of title 44, United States Code), shall assess
all information technology within the Department of De-
fense to determine the extent to which such technology have
the capabilities to operate effectively with technology that
meet the standards referred to in paragraph (1).
(3) Not later than January 1, 1997, the Secretary shall
submit to Congress a detailed plan for eliminating any defi-
ciencies identified pursuant to paragraph (2). The plan
shall include—
(A) a prioritized list of all affected programs;
(B) a description of how the deficiencies could
affect the national security of the United States; and
(C) an estimate of the resources that are nec-
essary to eliminate the deficiencies.
SEC. 810. RESEARCH UNDER TRANSACTIONS OTHER THAN
CONTRACTS AND GRANTS.
(a) CONDITIONS
FOR USE
OF AUTHORITY.—Sub-
section (e) of section 2371 of title 10, United States Code,
is amended—
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(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B);
(2) by inserting ‘‘and’’ after the semicolon at the
end of subparagraph (A), as so redesignated;
(3) by striking out ‘‘; and’’ at the end of sub-
paragraph (B), as so redesignated, and inserting in
lieu thereof a period;
(4) by inserting ‘‘(1)’’ after ‘‘(e) CONDITIONS.—
’’; and
(5) by striking out paragraph (3) and inserting
in lieu thereof the following:
‘‘(2) A cooperative agreement containing a clause
under subsection (d) or a transaction authorized under sub-
section (a) may be used for a research project when the use
of a standard contract, grant, or cooperative agreement for
such project is not feasible or appropriate.’’.
(b) REVISED REQUIREMENT FOR ANNUAL REPORT.—
Section 2371 of such title is amended by striking out sub-
section (h) and inserting in lieu thereof the following:
‘‘(h) ANNUAL REPORT.—(1) Not later than 90 days
after the end of each fiscal year, the Secretary of Defense
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 Department of Defense
use during such fiscal year of—
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‘‘(A) cooperative agreements authorized under
section 2358 of this title that contain a clause under
subsection (d); and
‘‘(B) transactions authorized under subsection
(a).
‘‘(2) The report shall include, with respect to the coop-
erative agreements and other transactions covered by the
report, the following:
‘‘(A) The technology areas in which research
projects were conducted under such agreements or
other transactions.
‘‘(B) The extent of the cost-sharing among Fed-
eral Government and non-Federal sources.
‘‘(C) The extent to which the use of the coopera-
tive agreements and other transactions—
‘‘(i) has contributed to a broadening of the
technology and industrial base available for
meeting Department of Defense needs; and
‘‘(ii) has fostered within the technology and
industrial base new relationships and practices
that support the national security of the United
States.
‘‘(D) The total amount of payments, if any, that
were received by the Federal Government during the
fiscal year covered by the report pursuant to a clause