619 
ment Policy, in coordination with the Director of the Of-
fice of Personnel Management, shall encourage executive 
agencies to utilize existing authorities, including direct 
hire authority and tuition assistance programs, to recruit 
and retain acquisition personnel and consider recruiting 
acquisition personnel who may be retiring from the private 
sector, consistent with existing laws and regulations. 
(h) DEFINITIONS.—In this section: 
(1) EXECUTIVE AGENCY.—The term ‘‘executive 
agency’’ has the meaning provided in section 4(1) of 
the Office of Federal Procurement Policy Act (41 
U.S.C. 403(1)). 
(2) CHIEF ACQUISITION OFFICER.—The term 
‘‘Chief Acquisition Officer’’ means a Chief Acquisi-
tion Officer for an executive agency appointed pur-
suant to section 16 of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 414). 
Subtitle F—Contracts in Iraq and 
Afghanistan 
SEC. 861. MEMORANDUM OF UNDERSTANDING ON MAT-
TERS RELATING TO CONTRACTING. 
(a) 
MEMORANDUM
OF
UNDERSTANDING
RE-
QUIRED.—The Secretary of Defense, the Secretary of 
State, and the Administrator of the United States Agency 
for International Development shall, not later than July 
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1, 2008, enter into a memorandum of understanding re-
garding matters relating to contracting for contracts in 
Iraq or Afghanistan. 
(b) MATTERS COVERED.—The memorandum of un-
derstanding required by subsection (a) shall address, at 
a minimum, the following: 
(1) Identification of the major categories of 
contracts in Iraq or Afghanistan being awarded by 
the Department of Defense, the Department of 
State, or the United States Agency for International 
Development. 
(2) Identification of the roles and responsibil-
ities of each department or agency for matters relat-
ing to contracting for contracts in Iraq or Afghani-
stan. 
(3) Responsibility for establishing procedures 
for, and the coordination of, movement of contractor 
personnel in Iraq or Afghanistan. 
(4) Identification of common databases that will 
serve as repositories of information on contracts in 
Iraq or Afghanistan and contractor personnel in 
Iraq or Afghanistan, including agreement on the ele-
ments to be included in the databases, including, at 
a minimum— 
(A) with respect to each contract— 
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(i) a brief description of the contract 
(to the extent consistent with security con-
siderations); 
(ii) the total value of the contract; 
and 
(iii) whether the contract was awarded 
competitively; and 
(B) with respect to contractor personnel— 
(i) the total number of personnel em-
ployed on contracts in Iraq or Afghanistan; 
(ii) the total number of personnel per-
forming security functions under contracts 
in Iraq or Afghanistan; and 
(iii) the total number of personnel 
working under contracts in Iraq or Af-
ghanistan who have been killed or wound-
ed. 
(5) Responsibility for maintaining and updating 
information in the common databases identified 
under paragraph (4). 
(6) Responsibility for the collection and referral 
to the appropriate Government agency of any infor-
mation relating to offenses under chapter 47 of title 
10, United States Code (the Uniform Code of Mili-
tary Justice) or chapter 212 of title 18, United 
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States Code (commonly referred to as the Military 
Extraterritorial Jurisdiction Act), including a clari-
fication of responsibilities under section 802(a)(10) 
of title 10, United States Code (article 2(a) of the 
Uniform Code of Military Justice), as amended by 
section 552 of the John Warner National Defense 
Authorization Act for Fiscal Year 2007 (Public Law 
109–364). 
(c) IMPLEMENTATION OF MEMORANDUM OF UNDER-
STANDING.—Not later than 120 days after the memo-
randum of understanding required by subsection (a) is 
signed, the Secretary of Defense, the Secretary of State, 
and the Administrator of the United States Agency for 
International Development shall issue such policies or 
guidance and prescribe such regulations as are necessary 
to implement the memorandum of understanding for the 
relevant matters pertaining to their respective agencies. 
(d) COPIES PROVIDED TO CONGRESS.— 
(1) MEMORANDUM OF UNDERSTANDING.—Cop-
ies of the memorandum of understanding required 
by subsection (a) shall be provided to the relevant 
committees of Congress within 30 days after the 
memorandum is signed. 
(2) REPORT ON IMPLEMENTATION.—Not later 
than 180 days after the memorandum of under-
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standing required by subsection (a) is signed, the 
Secretary of Defense, the Secretary of State, and 
the Administrator of the United States Agency for 
International Development shall each provide a re-
port to the relevant committees of Congress on the 
implementation of the memorandum of under-
standing. 
(3) DATABASES.—The Secretary of Defense, 
the Secretary of State, or the Administrator of the 
United States Agency for International Development 
shall provide access to the common databases identi-
fied under subsection (b)(4) to the relevant commit-
tees of Congress. 
(4) CONTRACTS.—Effective on the date of the 
enactment of this Act, copies of any contracts in 
Iraq or Afghanistan awarded after December 1, 
2007, shall be provided to any of the relevant com-
mittees of Congress within 15 days after the submis-
sion of a request for such contract or contracts from 
such committee to the department or agency man-
aging the contract. 
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SEC. 862. CONTRACTORS PERFORMING PRIVATE SECURITY 
FUNCTIONS IN AREAS OF COMBAT OPER-
ATIONS. 
(a) REGULATIONS ON CONTRACTORS PERFORMING 
PRIVATE SECURITY FUNCTIONS.— 
(1) IN
GENERAL.—Not later than 120 days 
after the date of the enactment of this Act, the Sec-
retary of Defense, in coordination with the Secretary 
of State, shall prescribe regulations on the selection, 
training, equipping, and conduct of personnel per-
forming private security functions under a covered 
contract in an area of combat operations. 
(2) ELEMENTS.—The regulations prescribed 
under subsection (a) shall, at a minimum, estab-
lish— 
(A) a process for registering, processing, 
accounting for, and keeping appropriate records 
of personnel performing private security func-
tions in an area of combat operations; 
(B) a process for authorizing and account-
ing for weapons to be carried by, or available to 
be used by, personnel performing private secu-
rity functions in an area of combat operations; 
(C) a process for the registration and iden-
tification of armored vehicles, helicopters, and 
other military vehicles operated by contractors 
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(I) a process by which the training require-
ments referred to in subparagraph (G)(ii) shall 
be implemented. 
(3) AVAILABILITY
OF
ORDERS, DIRECTIVES, 
AND
INSTRUCTIONS.—The regulations prescribed 
under subsection (a) shall include mechanisms to en-
sure the provision and availability of the orders, di-
rectives, and instructions referred to in paragraph 
(2)(G)(i) to contractors referred to in that para-
graph, including through the maintenance of a single 
location (including an Internet website, to the extent 
consistent with security considerations) at or 
through which such contractors may access such or-
ders, directives, and instructions. 
(b) CONTRACT CLAUSE
ON CONTRACTORS PER-
FORMING PRIVATE SECURITY FUNCTIONS.— 
(1) REQUIREMENT
UNDER
FAR.—Not later 
than 180 days after the date of the enactment of 
this Act, the Federal Acquisition Regulation issued 
in accordance with section 25 of the Office of Fed-
eral Procurement Policy Act (41 U.S.C. 421) shall 
be revised to require the insertion into each covered 
contract (or, in the case of a task order, the contract 
under which the task order is issued) of a contract 
clause addressing the selection, training, equipping, 
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and conduct of personnel performing private security 
functions under such contract. 
(2) 
CLAUSE
REQUIREMENT.—The 
contract 
clause required by paragraph (1) shall require, at a 
minimum, that the contractor concerned shall— 
(A) comply with regulations prescribed 
under subsection (a), including any revisions or 
updates to such regulations, and follow the pro-
cedures established in such regulations for— 
(i) registering, processing, accounting 
for, and keeping appropriate records of 
personnel performing private security func-
tions in an area of combat operations; 
(ii) authorizing and accounting of 
weapons to be carried by, or available to be 
used by, personnel performing private se-
curity functions in an area of combat oper-
ations; 
(iii) registration and identification of 
armored vehicles, helicopters, and other 
military vehicles operated by contractors 
and subcontractors performing private se-
curity functions in an area of combat oper-
ations; and 
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(iv) the reporting of incidents in 
which— 
(I) a weapon is discharged by 
personnel performing private security 
functions in an area of combat oper-
ations; 
(II) personnel performing private 
security functions in an area of com-
bat operations are killed or injured; or 
(III) persons are killed or in-
jured, or property is destroyed, as a 
result of conduct by contractor per-
sonnel; 
(B) ensure that all personnel performing 
private security functions under such contract 
are briefed on and understand their obligation 
to comply with— 
(i) qualification, training, screening 
(including, if practicable, through back-
ground checks), and security requirements 
established by the Secretary of Defense for 
personnel performing private security func-
tions in an area of combat operations; 
(ii) applicable laws and regulations of 
the United States and the host country, 
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and applicable treaties and international 
agreements, regarding the performance of 
the functions of the contractor; 
(iii) orders, directives, and instruc-
tions issued by the applicable commander 
of a combatant command relating to equip-
ment, force protection, security, health, 
safety, or relations and interaction with 
locals; and 
(iv) rules on the use of force issued by 
the applicable commander of a combatant 
command for personnel performing private 
security functions in an area of combat op-
erations; and 
(C) cooperate with any investigation con-
ducted by the Department of Defense pursuant 
to subsection (a)(2)(E) by providing access to 
employees of the contractor and relevant infor-
mation in the possession of the contractor re-
garding the incident concerned. 
(3) NONCOMPLIANCE
OF
PERSONNEL
WITH 
CLAUSE.—The contracting officer for a covered con-
tract may direct the contractor, at its own expense, 
to remove or replace any personnel performing pri-
vate security functions in an area of combat oper-
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ations who violate or fail to comply with applicable 
requirements of the clause required by this sub-
section. If the violation or failure to comply is a 
gross violation or failure or is repeated, the contract 
may be terminated for default. 
(4) APPLICABILITY.—The contract clause re-
quired by this subsection shall be included in all cov-
ered contracts awarded on or after the date that is 
180 days after the date of the enactment of this Act. 
Federal agencies shall make best efforts to provide 
for the inclusion of the contract clause required by 
this subsection in covered contracts awarded before 
such date. 
(5) INSPECTOR
GENERAL
REPORT
ON
PILOT 
PROGRAM
ON
IMPOSITION
OF
FINES
FOR
NON-
COMPLIANCE
OF
PERSONNEL
WITH
CLAUSE.—Not 
later than March 30, 2008, the Inspector General of 
the Department of Defense shall submit to Congress 
a report assessing the feasibility and advisability of 
carrying out a pilot program for the imposition of 
fines on contractors for personnel who violate or fail 
to comply with applicable requirements of the clause 
required by this section as a mechanism for enhanc-
ing the compliance of such personnel with the clause. 
The report shall include— 
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(A) an assessment of the feasibility and 
advisability of carrying out the pilot program; 
and 
(B) if the Inspector General determines 
that carrying out the pilot program is feasible 
and advisable— 
(i) recommendations on the range of 
contracts and subcontracts to which the 
pilot program should apply; and 
(ii) a schedule of fines to be imposed 
under the pilot program for various types 
of personnel actions or failures. 
(c) AREAS OF COMBAT OPERATIONS.— 
(1) DESIGNATION.—The Secretary of Defense 
shall designate the areas constituting an area of 
combat operations for purposes of this section by not 
later than 120 days after the date of the enactment 
of this Act. 
(2) PARTICULAR AREAS.—Iraq and Afghanistan 
shall be included in the areas designated as an area 
of combat operations under paragraph (1). 
(3) ADDITIONAL AREAS.—The Secretary may 
designate any additional area as an area constituting 
an area of combat operations for purposes of this 
section if the Secretary determines that the presence 
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or potential of combat operations in such area war-
rants designation of such area as an area of combat 
operations for purposes of this section. 
(4) MODIFICATION OR ELIMINATION OF DES-
IGNATION.—The Secretary may modify or cease the 
designation of an area under this subsection as an 
area of combat operations if the Secretary deter-
mines that combat operations are no longer ongoing 
in such area. 
(d) EXCEPTION.—The requirements of this section 
shall not apply to contracts entered into by elements of 
the intelligence community in support of intelligence ac-
tivities. 
SEC. 863. COMPTROLLER GENERAL REVIEWS AND RE-
PORTS ON CONTRACTING IN IRAQ AND AF-
GHANISTAN. 
(a) REVIEWS AND REPORTS REQUIRED.— 
(1) IN
GENERAL.—Every 12 months, the 
Comptroller General shall review contracts in Iraq or 
Afghanistan and submit to the relevant committees 
of Congress a report on such review. 
(2) MATTERS COVERED.—A report under this 
subsection shall cover the following with respect to 
the contracts in Iraq or Afghanistan reviewed for the 
report: 
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(A) Total number of contracts and task or-
ders awarded during the period covered by the 
report. 
(B) Total number of active contracts and 
task orders. 
(C) Total value of all contracts and task 
orders awarded during the reporting period. 
(D) Total value of active contracts and 
task orders. 
(E) The extent to which such contracts 
have used competitive procedures. 
(F) Total number of contractor personnel 
working on contracts during the reporting pe-
riod. 
(G) Total number of contractor personnel, 
on average, who are performing security func-
tions during the reporting period. 
(H) The number of contractor personnel 
killed or wounded during the reporting period. 
(I) Information on any specific contract or 
class of contracts that the Comptroller General 
determines raises issues of significant concern. 
(3) SUBMISSION
OF
REPORTS.—The Comp-
troller General shall submit an initial report under 
this subsection not later than October 1, 2008, and 
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shall submit an updated report every year thereafter 
until October 1, 2010. 
(b) ACCESS TO DATABASES ON CONTRACTS.—The 
Secretary of Defense and the Secretary of State shall pro-
vide full access to the databases described in section 
861(b)(4) to the Comptroller General for purposes of the 
reviews carried out under this section. 
SEC. 864. DEFINITIONS AND OTHER GENERAL PROVISIONS. 
(a) DEFINITIONS.—In this subtitle: 
(1) MATTERS
RELATING
TO
CONTRACTING.— 
The term ‘‘matters relating to contracting’’, with re-
spect to contracts in Iraq and Afghanistan, means 
all matters relating to awarding, funding, managing, 
tracking, monitoring, and providing oversight to con-
tracts and contractor personnel. 
(2) CONTRACT IN IRAQ OR AFGHANISTAN.—The 
term ‘‘contract in Iraq or Afghanistan’’ means a 
contract with the Department of Defense, the De-
partment of State, or the United States Agency for 
International Development, a subcontract at any tier 
issued under such a contract, or a task order or de-
livery order at any tier issued under such a contract 
(including a contract, subcontract, or task order or 
delivery order issued by another Government agency 
for the Department of Defense, the Department of 
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State, or the United States Agency for International 
Development), if the contract, subcontract, or task 
order or delivery order involves worked performed in 
Iraq or Afghanistan for a period longer than 14 
days. 
(3) COVERED CONTRACT.—The term ‘‘covered 
contract’’ means— 
(A) a contract of a Federal agency for the 
performance of services in an area of combat 
operations, as designated by the Secretary of 
Defense under subsection (c) of section 862; 
(B) a subcontract at any tier under such 
a contract; or 
(C) a task order or delivery order issued 
under such a contract or subcontract. 
(4) CONTRACTOR.—The term ‘‘contractor’’, 
with respect to a covered contract, means the con-
tractor or subcontractor carrying out the covered 
contract. 
(5) PRIVATE SECURITY FUNCTIONS.—The term 
‘‘private security functions’’ means activities en-
gaged in by a contractor under a covered contract as 
follows: 
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(A) Guarding of personnel, facilities, or 
property of a Federal agency, the contractor or 
subcontractor, or a third party. 
(B) Any other activity for which personnel 
are required to carry weapons in the perform-
ance of their duties. 
(6) RELEVANT COMMITTEES OF CONGRESS.— 
The term ‘‘relevant committees of Congress’’ means 
each of the following committees: 
(A) The Committees on Armed Services of 
the Senate and the House of Representatives. 
(B) The Committee on Homeland Security 
and Governmental Affairs of the Senate and the 
Committee on Oversight and Government Re-
form of the House of Representatives. 
(C) The Committee on Foreign Relations 
of the Senate and the Committee on Foreign 
Affairs of the House of Representatives. 
(D) For purposes of contracts relating to 
the National Foreign Intelligence Program, the 
Select Committee on Intelligence of the Senate 
and the Permanent Select Committee on Intel-
ligence of the House of Representatives. 
(b) CLASSIFIED INFORMATION.—Nothing in this sub-
title shall be interpreted to require the handling of classi-
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fied information or information relating to intelligence 
sources and methods in a manner inconsistent with any 
law, regulation, executive order, or rule of the House of 
Representatives or of the Senate relating to the handling 
or protection of such information. 
Subtitle G—Defense Materiel 
Readiness Board 
SEC. 871. ESTABLISHMENT OF DEFENSE MATERIEL READI-
NESS BOARD. 
(a) ESTABLISHMENT.—Not later than 6 months after 
the date of the enactment of this Act, the Secretary of 
Defense shall establish a Defense Materiel Readiness 
Board (in this subtitle referred to as the ‘‘Board’’) within 
the Office of the Secretary of Defense. 
(b) MEMBERSHIP.—The Secretary shall appoint the 
chairman and the members of the Board from among offi-
cers of the Armed Forces with expertise in matters rel-
evant to the function of the Board to assess materiel readi-
ness and evaluate plans and policies relating to materiel 
readiness. At a minimum, the Board shall include rep-
resentatives of the Joint Chiefs of Staff, each of the 
Armed Forces, and each of the reserve components of the 
Armed Forces. 
(c) STAFF.—The Secretary of Defense shall assign 
staff, and request the Secretaries of the military depart-
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(5) assist the Secretary of Defense in deter-
mining whether the industrial capacity of the De-
partment of Defense and of the defense industrial 
base is being best utilized to support the materiel 
readiness needs of the Armed Forces; 
(6) review and assess Department of Defense 
systems for measuring the status of current materiel 
readiness of the Armed Forces; and 
(7) make recommendations with respect to ma-
teriel readiness funding, measurement techniques, 
plans, policies, and programs. 
(e) REPORTS.—The Board shall submit to the Sec-
retary of Defense a report summarizing its findings and 
recommendations not less than once every six months. 
Within 30 days after receiving a report from the Board, 
the Secretary shall forward the report in its entirety, to-
gether with his comments, to the congressional defense 
committees. The report shall be submitted in unclassified 
form. To the extent necessary, the report may be accom-
panied by a classified annex. 
SEC. 872. CRITICAL MATERIEL READINESS SHORTFALLS. 
(a) DESIGNATION OF CRITICAL MATERIEL READI-
NESS SHORTFALLS.— 
(1) DESIGNATION.—The Secretary of Defense 
may designate any requirement of the Armed Forces 
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for equipment or supplies as a critical materiel read-
iness shortfall if there is a shortfall in the required 
equipment or supplies that materially reduces readi-
ness of the Armed Forces and that— 
(A) cannot be adequately addressed by 
identifying acceptable substitute capabilities or 
cross leveling of equipment that does not unac-
ceptably reduce the readiness of other Armed 
Forces; and 
(B) that is likely to persist for more than 
two years based on currently projected budgets 
and schedules for deliveries of equipment and 
supplies. 
(2) CONSIDERATION OF BOARD FINDINGS AND 
RECOMMENDATIONS.—In making any such designa-
tion, the Secretary shall take into consideration the 
findings and recommendations of the Defense Mate-
riel Readiness Board. 
(b) MEASURES TO ADDRESS CRITICAL MATERIEL 
READINESS SHORTFALLS.—The Secretary of Defense 
shall ensure that critical materiel readiness shortfalls des-
ignated pursuant to subsection (a)(1) are transmitted to 
the relevant officials of the Department of Defense respon-
sible for requirements, budgets, and acquisition, and that 
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such officials prioritize and address such shortfalls in the 
shortest time frame practicable. 
(c) TRANSFER AUTHORITY.— 
(1) IN GENERAL.—The amounts of authoriza-
tions that the Secretary may transfer under the au-
thority of section 1001 of this Act is hereby in-
creased by $2,000,000,000. 
(2) LIMITATIONS.—The additional transfer au-
thority provided by this section— 
(A) may be made only from authorizations 
to the Department of Defense for fiscal year 
2008; 
(B) may be exercised solely for the purpose 
of addressing critical materiel readiness short-
falls as designated by the Secretary of Defense 
under subsection (a); and 
(C) is subject to the same terms, condi-
tions, and procedures as other transfer author-
ity under section 1001 of this Act. 
(d) STRATEGIC READINESS FUND.— 
(1) ESTABLISHMENT.—There is established on 
the books of the Treasury a fund to be known as the 
Department of Defense Strategic Readiness Fund 
(in this subsection referred to as the ‘‘Fund’’), which 
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643 
shall be administered by the Secretary of the Treas-
ury. 
(2) PURPOSES.—The Fund shall be used to ad-
dress critical materiel readiness shortfalls as des-
ignated by the Secretary of Defense under sub-
section (a). 
(3) ASSETS OF FUND.—There shall be depos-
ited into the Fund any amount appropriated to the 
Fund, which shall constitute the assets of the Fund. 
(4) LIMITATION.—The procurement unit cost 
(as defined in section 2432(a) of title 10, United 
States Code) of any item purchased using assets of 
the Fund, whether such assets are in the Fund or 
after such assets have been transferred from the 
Fund using the authority provided in subsection (c), 
shall not exceed $30,000,000. 
(e) MULTIYEAR CONTRACT NOTIFICATION.— 
(1) NOTIFICATION.—If the Secretary of a mili-
tary department makes the determination described 
in paragraph (2) with respect to the use of a 
multiyear contract, the Secretary shall notify the 
congressional defense committees within 30 days of 
the determination and provide a detailed description 
of the proposed multiyear contract. 
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(2) DETERMINATION.—The determination re-
ferred to in paragraph (1) is a determination by the 
Secretary of a military department that the use of 
a multiyear contract to procure an item to address 
a critical materiel readiness shortfall— 
(A) will significantly accelerate efforts to 
address a critical materiel readiness shortfall; 
(B) will provide savings compared to the 
total anticipated costs of carrying out the con-
tract through annual contracts; and 
(C) will serve the interest of national secu-
rity. 
(f) DEFINITION.—In this section, the term ‘‘critical 
materiel readiness shortfall’’ means a critical materiel 
readiness shortfall designated by the Secretary of Defense 
under this section. 
Subtitle H—Other Matters 
SEC. 881. CLEARINGHOUSE FOR RAPID IDENTIFICATION 
AND DISSEMINATION OF COMMERCIAL IN-
FORMATION TECHNOLOGIES. 
(a) 
REQUIREMENT
TO
ESTABLISH
CLEARING-
HOUSE.—Not later than 180 days after the date of the 
enactment of this Act, the Secretary of Defense, acting 
through the Assistant Secretary of Defense for Networks 
and Information Integration, shall establish a clearing-
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the funding and acquisition processes of the Depart-
ment of Defense. 
(8) Developing methods to measure how well 
processes developed by the clearinghouse are being 
utilized and to collect data on an ongoing basis to 
assess the benefits of commercial technologies that 
are procured on the recommendation of the clearing-
house. 
(c) PERSONNEL.—The Secretary of Defense, acting 
through the Assistant Secretary of Defense for Networks 
and Information Integration, shall provide for the hiring 
and support of employees (including detailees from other 
components of the Department of Defense and from other 
Federal departments or agencies) to assist in identifying, 
assessing, and disseminating information regarding com-
mercial technologies under this section. 
(d) REPORT TO CONGRESS.—Not later than one year 
after the date of the enactment of this Act, the Secretary 
of Defense shall submit to the congressional defense com-
mittees a report on the implementation of this section. 
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SEC. 882. AUTHORITY TO LICENSE CERTAIN MILITARY DES-
IGNATIONS AND LIKENESSES OF WEAPONS 
SYSTEMS TO TOY AND HOBBY MANUFACTUR-
ERS. 
(a) AUTHORITY TO LICENSE CERTAIN ITEMS.—Sec-
tion 2260 of title 10, United States Code, is amended— 
(1) by redesignating subsections (c), (d), and 
(e) as subsections (d), (e), and (f), respectively; and 
(2) by inserting after subsection (b) the fol-
lowing new subsection: 
‘‘(c) LICENSES FOR QUALIFYING COMPANIES.—(1) 
The Secretary concerned may license trademarks, service 
marks, certification marks, and collective marks owned or 
controlled by the Secretary relating to military designa-
tions and likenesses of military weapons systems to any 
qualifying company upon receipt of a request from the 
company. 
‘‘(2) For purposes of paragraph (1), a qualifying 
company is any United States company that— 
‘‘(A) is a toy or hobby manufacturer; and 
‘‘(B) is determined by the Secretary concerned 
to be qualified in accordance with such criteria as 
determined appropriate by the Secretary of Defense. 
‘‘(3) The fee for a license under this subsection shall 
not exceed by more than a nominal amount the amount 
needed to recover all costs of the Department of Defense 
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in processing the request for the license and supplying the 
license. 
‘‘(4) A license to a qualifying company under this 
subsection shall provide that the license may not be trans-
ferred, sold, or relicensed by the qualifying company. 
‘‘(5) A license under this subsection shall not be an 
exclusive license.’’. 
(b) EFFECTIVE DATE.—The Secretary of Defense 
shall prescribe regulations to implement the amendment 
made by this section not later than 180 days after the 
date of the enactment of this Act. 
SEC. 883. MODIFICATIONS TO LIMITATION ON CONTRACTS 
TO ACQUIRE MILITARY FLIGHT SIMULATOR. 
(a) EFFECT ON EXISTING CONTRACTS.—Section 832 
of the John Warner National Defense Authorization Act 
for Fiscal Year 2007 (Public Law 109–364; 120 Stat. 
2331) is amended by adding at the end the following new 
subsection: 
‘‘(e) EFFECT ON EXISTING CONTRACTS.—The limi-
tation in subsection (a) does not apply to any service con-
tract of a military department to acquire a military flight 
simulator, or to any renewal or extension of, or follow- 
on contract to, such a contract, if— 
‘‘(1) the contract was in effect as of October 
17, 2006; 
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‘‘(2) the number of flight simulators to be ac-
quired under the contract (or renewal, extension, or 
follow-on) will not result in the total number of 
flight simulators acquired by the military depart-
ment concerned through service contracts to exceed 
the total number of flight simulators to be acquired 
under all service contracts of such department for 
such simulators in effect as of October 17, 2006; 
and 
‘‘(3) in the case of a renewal or extension of, 
or follow-on contract to, the contract, the Secretary 
of the military department concerned provides to the 
congressional defense committees a written notice of 
the decision to exercise an option to renew or extend 
the contract, or to issue a solicitation for bids or 
proposals using competitive procedures for a follow- 
on contract, and an economic analysis as described 
in subsection (c) supporting the decision, at least 30 
days before carrying out such decision.’’. 
(b) CHANGE IN GROUNDS FOR WAIVER.—Section 
832(c)(1) of such Act, as redesignated by subsection (a), 
is amend by striking ‘‘necessary for national security pur-
poses’’ and inserting ‘‘in the national interest’’. 
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SEC. 884. REQUIREMENTS RELATING TO WAIVERS OF CER-
TAIN DOMESTIC SOURCE LIMITATIONS RE-
LATING TO SPECIALTY METALS. 
(a) NOTICE REQUIREMENT.—At least 30 days prior 
to making a domestic nonavailability determination pursu-
ant to section 2533b(b) of title 10, United States Code, 
that would apply to more than one contract of the Depart-
ment of Defense, the Secretary of Defense shall, to the 
maximum extent practicable and in a manner consistent 
with the protection of national security information and 
confidential business information— 
(1) publish a notice on the website maintained 
by the General Services Administration known as 
FedBizOpps.gov (or any successor site) of the Sec-
retary’s intent to make the domestic nonavailability 
determination; and 
(2) solicit information relevant to such notice 
from interested parties, including producers of spe-
cialty metal mill products. 
(b) DETERMINATION.—(1) The Secretary shall take 
into consideration all information submitted pursuant to 
subsection (a) in making a domestic nonavailability deter-
mination pursuant to section 2533b(b) of title 10, United 
States Code, that would apply to more than one contract 
of the Department of Defense, and may also consider 
other relevant information that cannot be made part of 
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the public record consistent with the protection of national 
security information and confidential business informa-
tion. 
(2) The Secretary shall ensure that any such deter-
mination and the rationale for such determination is made 
publicly available to the maximum extent consistent with 
the protection of national security information and con-
fidential business information. 
SEC. 885. TELEPHONE SERVICES FOR MILITARY PER-
SONNEL SERVING IN COMBAT ZONES. 
(a) COMPETITIVE PROCEDURES REQUIRED.— 
(1) REQUIREMENT.—When the Secretary of 
Defense considers it necessary to provide morale, 
welfare, and recreation telephone services for mili-
tary personnel serving in combat zones, the Sec-
retary shall use competitive procedures when enter-
ing into a contract to provide those services. 
(2) REVIEW AND DETERMINATION.—Before so-
liciting bids or proposals for new contracts, or con-
sidering extensions to existing contracts, to provide 
morale, welfare, and recreation telephone services for 
military personnel serving in combat zones, the Sec-
retary shall review and determine whether it is in 
the best interest of the Department to require bids 
or proposals, or adjustments for the purpose of ex-
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tending a contract, to include options that minimize 
the cost of the telephone services to individual users 
while providing individual users the flexibility of 
using phone cards from other than the prospective 
contractor. The Secretary shall submit the results of 
this review and determination to the Committees on 
Armed Services of the Senate and the House of Rep-
resentatives. 
(b) EFFECTIVE DATE.— 
(1) REQUIREMENT.—Subsection (a)(1) shall 
apply to any new contract to provide morale, wel-
fare, and recreation telephone services for military 
personnel serving in combat zones that is entered 
into after the date of the enactment of this Act. 
(2) REVIEW AND DETERMINATION.—Subsection 
(a)(2) shall apply to any new contract or extension 
to an existing contract to provide morale, welfare, 
and recreation telephone services for military per-
sonnel serving in combat zones that is entered into 
or agreed upon after the date of the enactment of 
this Act. 
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SEC. 886. ENHANCED AUTHORITY TO ACQUIRE PRODUCTS 
AND SERVICES PRODUCED IN IRAQ AND AF-
GHANISTAN. 
(a) IN GENERAL.—In the case of a product or service 
to be acquired in support of military operations or stability 
operations in Iraq or Afghanistan (including security, 
transition, reconstruction, and humanitarian relief activi-
ties) for which the Secretary of Defense makes a deter-
mination described in subsection (b), the Secretary may 
conduct a procurement in which— 
(1) competition is limited to products or serv-
ices that are from Iraq or Afghanistan; 
(2) procedures other than competitive proce-
dures are used to award a contract to a particular 
source or sources from Iraq or Afghanistan; or 
(3) a preference is provided for products or 
services that are from Iraq or Afghanistan. 
(b) DETERMINATION.—A determination described in 
this subsection is a determination by the Secretary that— 
(1) the product or service concerned is to be 
used only by the military forces, police, or other se-
curity personnel of Iraq or Afghanistan; or 
(2) it is in the national security interest of the 
United States to limit competition, use procedures 
other than competitive procedures, or provide a pref-
erence as described in subsection (a) because— 
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(A) such limitation, procedure, or pref-
erence is necessary to provide a stable source of 
jobs in Iraq or Afghanistan; and 
(B) such limitation, procedure, or pref-
erence will not adversely affect— 
(i) military operations or stability op-
erations in Iraq or Afghanistan; or 
(ii) the United States industrial base. 
(c) PRODUCTS, SERVICES, AND SOURCES FROM IRAQ 
OR AFGHANISTAN.—For the purposes of this section: 
(1) A product is from Iraq or Afghanistan if it 
is mined, produced, or manufactured in Iraq or Af-
ghanistan. 
(2) A service is from Iraq or Afghanistan if it 
is performed in Iraq or Afghanistan by citizens or 
permanent resident aliens of Iraq or Afghanistan. 
(3) A source is from Iraq or Afghanistan if it— 
(A) is located in Iraq or Afghanistan; and 
(B) offers products or services that are 
from Iraq or Afghanistan. 
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SEC. 887. DEFENSE SCIENCE BOARD REVIEW OF DEPART-
MENT OF DEFENSE POLICIES AND PROCE-
DURES FOR THE ACQUISITION OF INFORMA-
TION TECHNOLOGY. 
(a) REVIEW REQUIRED.—Not later than 90 days 
after the date of the enactment of this Act, the Secretary 
of Defense shall direct the Defense Science Board to carry 
out a review of Department of Defense policies and proce-
dures for the acquisition of information technology. 
(b) MATTERS TO BE ADDRESSED.—The matters ad-
dressed by the review required by subsection (a) shall in-
clude the following: 
(1) Department of Defense policies and proce-
dures for acquiring national security systems, busi-
ness information systems, and other information 
technology. 
(2) The roles and responsibilities in imple-
menting such policies and procedures of— 
(A) the Under Secretary of Defense for 
Acquisition, Technology, and Logistics; 
(B) the Chief Information Officer of the 
Department of Defense; 
(C) the Director of the Business Trans-
formation Agency; 
(D) the service acquisition executives; 
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(E) the chief information officers of the 
military departments; 
(F) Defense Agency acquisition officials; 
(G) the information officers of the Defense 
Agencies; and 
(H) the Director of Operational Test and 
Evaluation and the heads of the operational 
test organizations of the military departments 
and the Defense Agencies. 
(3) The application of such policies and proce-
dures to information technologies that are an inte-
gral part of weapons or weapon systems. 
(4) The requirements of subtitle III of title 40, 
United States Code, and chapter 35 of title 44, 
United States Code, regarding performance-based 
and results-based management, capital planning, 
and investment control in the acquisition of informa-
tion technology. 
(5) Department of Defense policies and proce-
dures for maximizing the usage of commercial infor-
mation technology while ensuring the security of the 
microelectronics, software, and networks of the De-
partment. 
(6) The suitability of Department of Defense 
acquisition regulations, including Department of De-
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fense Directive 5000.1 and the accompanying mile-
stones, to the acquisition of information technology 
systems. 
(7) The adequacy and transparency of metrics 
used by the Department of Defense for the acquisi-
tion of information technology systems. 
(8) The effectiveness of existing statutory and 
regulatory reporting requirements for the acquisition 
of information technology systems. 
(9) The adequacy of operational and develop-
ment test resources (including infrastructure and 
personnel), policies, and procedures to ensure appro-
priate testing of information technology systems 
both during development and before operational use. 
(10) The appropriate policies and procedures 
for technology assessment, development, and oper-
ational testing for purposes of the adoption of com-
mercial technologies into information technology sys-
tems. 
(c) REPORT REQUIRED.—Not later than one year 
after the date of enactment of this Act, the Secretary shall 
submit to the congressional defense committees a report 
on the results of the review required by subsection (a). 
The report shall include the findings and recommenda-
tions of the Defense Science Board pursuant to the review, 
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including such recommendations for legislative or adminis-
trative action as the Board considers appropriate, together 
with any comments the Secretary considers appropriate. 
SEC. 888. GREEN PROCUREMENT POLICY. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that the Department of Defense should establish a 
system to document and track the use of environmentally 
preferable products and services. 
(b) REPORT.—Not later than 90 days after the date 
of the enactment of this Act, the Secretary of Defense 
shall submit to Congress a report on a plan to increase 
the usage of environmentally friendly products that mini-
mize potential impacts to human health and the environ-
ment at all Department of Defense facilities inside and 
outside the United States, including through the direct 
purchase of products and the purchase of products by fa-
cility maintenance contractors. The report shall also cover 
consideration of the budgetary impact of implementation 
of the plan. 
SEC. 889. COMPTROLLER GENERAL REVIEW OF USE OF AU-
THORITY UNDER THE DEFENSE PRODUCTION 
ACT OF 1950. 
(a) THOROUGH REVIEW REQUIRED.—The Comp-
troller General of the United States (in this section re-
ferred to as the ‘‘Comptroller’’) shall conduct a thorough 
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review of the application of the Defense Production Act 
of 1950, covering the period beginning on the date of the 
enactment of the Defense Production Act Reauthorization 
of 2003 (Public Law 108–195) and ending on the date 
of the enactment of this Act. 
(b) CONSIDERATIONS.—In conducting the review re-
quired by this section, the Comptroller shall examine— 
(1) the relevance and utility of the authorities 
provided under the Defense Production Act of 1950 
to meet the security challenges of the 21st Century; 
(2) the manner in which the authorities pro-
vided under such Act have been used by the Federal 
Government— 
(A) to meet security challenges; 
(B) to meet current and future defense re-
quirements; 
(C) to meet current and future energy re-
quirements; 
(D) to meet current and future domestic 
emergency and disaster response and recovery 
requirements; 
(E) to reduce the interruption of critical 
infrastructure operations during a terrorist at-
tack, natural catastrophe, or other similar na-
tional emergency; and 
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(F) to safeguard critical components of the 
United States industrial base, including Amer-
ican aerospace and shipbuilding industries; 
(3) the economic impact of foreign offset con-
tracts; 
(4) the relative merit of developing rapid and 
standardized systems for use of the authorities pro-
vided under the Defense Production Act of 1950, by 
any Federal agency; and 
(5) such other issues as the Comptroller deter-
mines relevant. 
(c) REPORT TO CONGRESS.—Not later than 150 days 
after the date of the enactment of this Act, the Comp-
troller shall submit to the Committees on Armed Services 
and on Banking, Housing, and Urban Affairs of the Sen-
ate and the Committees on Armed Services and on Finan-
cial Services of the House of Representatives a report on 
the review conducted under this section. 
(d) RULES OF CONSTRUCTION ON PROTECTION OF 
INFORMATION.—Notwithstanding any other provision of 
law— 
(1) the provisions of section 705(d) of the De-
fense Production Act of 1950 (50 U.S.C. App. 
2155(d)) shall not apply to information sought or 
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obtained by the Comptroller for purposes of the re-
view required by this section; and 
(2) provisions of law pertaining to the protec-
tion of classified information or proprietary informa-
tion otherwise applicable to information sought or 
obtained by the Comptroller in carrying out this sec-
tion shall not be affected by any provision of this 
section. 
SEC. 890. PREVENTION OF EXPORT CONTROL VIOLATIONS. 
(a) PREVENTION
OF
EXPORT
CONTROL
VIOLA-
TIONS.—Not later than 180 days after the date of the en-
actment of this Act, the Secretary of Defense shall pre-
scribe regulations requiring any contractor under a con-
tract with the Department of Defense to provide goods 
or technology that is subject to export controls under the 
Arms Export Control Act or the Export Administration 
of 1979 (as continued in effect under the International 
Emergency Economic Powers Act) to comply with those 
Acts and applicable regulations with respect to such goods 
and technology, including the International Traffic in 
Arms Regulations and the Export Administration Regula-
tions. Regulations prescribed under this subsection shall 
include a contract clause enforcing such requirement. 
(b) TRAINING
ON EXPORT CONTROLS.—The Sec-
retary of Defense shall ensure that any contractor under 
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a contract with the Department of Defense to provide 
goods or technology that is subject to export controls 
under the Arms Export Control Act or the Export Admin-
istration of 1979 (as continued in effect under the Inter-
national Emergency Economic Powers Act) is made aware 
of any relevant resources made available by the Depart-
ment of State and the Department of Commerce to assist 
in compliance with the requirement established by sub-
section (a) and the need for a corporate compliance plan 
and periodic internal audits of corporate performance 
under such plan. 
(c) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, the Secretary of Defense 
shall submit to the Committee on Armed Services of the 
Senate and the Committee on Armed Services of the 
House of Representatives a report assessing the utility 
of— 
(1) requiring defense contractors (or sub-
contractors at any tier) to periodically report on 
measures taken to ensure compliance with the Inter-
national Traffic in Arms Regulations and the Export 
Administration Regulations; 
(2) requiring periodic audits of defense contrac-
tors (or subcontractors at any tier) to ensure compli-
ance with all provisions of the International Traffic 
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in Arms Regulations and the Export Administration 
Regulations; 
(3) requiring defense contractors to maintain a 
corporate training plan to disseminate information 
to appropriate contractor personnel regarding the 
applicability of the Arms Export Control Act and the 
Export Administration Act of 1979; and 
(4) requiring a designated corporate liaison, 
available for training provided by the United States 
Government, whose primary responsibility would be 
contractor compliance with the Arms Export Control 
Act and the Export Administration Act of 1979. 
(d) DEFINITIONS.—In this section: 
(1) EXPORT ADMINISTRATION REGULATIONS.— 
The term ‘‘Export Administration Regulations’’ 
means those regulations contained in sections 730 
through 774 of title 15, Code of Federal Regulations 
(or successor regulations). 
(2) INTERNATIONAL TRAFFIC IN ARMS REGULA-
TIONS.—The term ‘‘International Traffic in Arms 
Regulations’’ means those regulations contained in 
sections 120 through 130 of title 22, Code of Fed-
eral Regulations (or successor regulations). 
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Hawaiian-serving institutions and Alaska Native- 
serving institutions,’’. 
SEC. 892. COMPETITION FOR PROCUREMENT OF SMALL 
ARMS SUPPLIED TO IRAQ AND AFGHANISTAN. 
(a) COMPETITION REQUIREMENT.—For the procure-
ment of pistols and other weapons described in subsection 
(b), the Secretary of Defense shall ensure, consistent with 
the provisions of section 2304 of title 10, United States 
Code, that— 
(1) full and open competition is obtained to the 
maximum extent practicable; 
(2) no responsible United States manufacturer 
is excluded from competing for such procurements; 
and 
(3) products manufactured in the United States 
are not excluded from the competition. 
(b) PROCUREMENTS COVERED.—This section applies 
to the procurement of the following: 
(1) Pistols and other weapons less than 0.50 
caliber for assistance to the Army of Iraq, the Iraqi 
Police Forces, and other Iraqi security organiza-
tions. 
(2) Pistols and other weapons less than 0.50 
caliber for assistance to the Army of Afghanistan, 
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the Afghani Police Forces, and other Afghani secu-
rity organizations. 
TITLE IX—DEPARTMENT OF DE-
FENSE ORGANIZATION AND 
MANAGEMENT 
Subtitle A—Department of Defense Management 
Sec. 901. Repeal of limitation on major Department of Defense headquarters 
activities personnel and related report. 
Sec. 902. Flexibility to adjust the number of deputy chiefs and assistant chiefs. 
Sec. 903. Change in eligibility requirements for appointment to Department of 
Defense leadership positions. 
Sec. 904. Management of the Department of Defense. 
Sec. 905. Revision in guidance relating to combatant command acquisition au-
thority. 
Sec. 906. Department of Defense Board of Actuaries. 
Sec. 907. Modification of background requirement of individuals appointed as 
Under Secretary of Defense for Acquisition, Technology, and 
Logistics. 
Sec. 908. Assistant Secretaries of the military departments for acquisition mat-
ters; principal military deputies. 
Sec. 909. Sense of Congress on term of Office of the Director of Operational 
Test and Evaluation. 
Subtitle B—Space Activities 
Sec. 911. Space protection strategy. 
Sec. 912. Biennial report on management of space cadre within the Depart-
ment of Defense. 
Sec. 913. Additional report on oversight of acquisition for defense space pro-
grams. 
Subtitle C—Chemical Demilitarization Program 
Sec. 921. Chemical demilitarization citizens advisory commissions. 
Sec. 922. Sense of Congress on completion of destruction of United States 
chemical weapons stockpile. 
Sec. 923. Repeal of certain qualifications requirement for director of chemical 
demilitarization management organization. 
Sec. 924. Modification of termination of assistance to State and local govern-
ments after completion of the destruction of the United States 
chemical weapons stockpile. 
Subtitle D—Intelligence-Related Matters 
Sec. 931. Technical amendments to title 10, United States Code, arising from 
enactment of the Intelligence Reform and Terrorism Preven-
tion Act of 2004. 
Subtitle E—Roles and Missions Analysis 
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Sec. 941. Requirement for quadrennial roles and missions review. 
Sec. 942. Joint Requirements Oversight Council additional duties relating to 
core mission areas. 
Sec. 943. Requirement for certification of major systems prior to technology de-
velopment. 
Sec. 944. Presentation of future-years mission budget by core mission area. 
Subtitle F—Other Matters 
Sec. 951. Department of Defense consideration of effect of climate change on 
Department facilities, capabilities, and missions. 
Sec. 952. Interagency policy coordination. 
Sec. 953. Expansion of employment creditable under service agreements under 
National Security Education Program. 
Sec. 954. Board of Regents for the Uniformed Services University of the 
Health Sciences. 
Sec. 955. Establishment of Department of Defense School of Nursing. 
Sec. 956. Inclusion of commanders of Western Hemisphere combatant com-
mands in Board of Visitors of Western Hemisphere Institute 
for Security Cooperation. 
Sec. 957. Comptroller General assessment of reorganization of the Office of the 
Under Secretary of Defense for Policy. 
Sec. 958. Report on foreign language proficiency. 
Subtitle A—Department of Defense 
Management 
SEC. 901. REPEAL OF LIMITATION ON MAJOR DEPARTMENT 
OF DEFENSE HEADQUARTERS ACTIVITIES 
PERSONNEL AND RELATED REPORT. 
(a) REPEAL OF LIMITATION.— 
(1) REPEAL.—Section 130a of title 10, United 
States Code, is repealed. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 3 of such title is 
amended by striking the item relating to section 
130a. 
(b) REPORT REQUIRED.—The Secretary of Defense 
shall include a report with the defense budget materials 
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for each fiscal year that includes the following informa-
tion: 
(1) The average number of military personnel 
and civilian employees of the Department of Defense 
assigned to major Department of Defense head-
quarters activities for each component of the De-
partment of Defense during the preceding fiscal 
year. 
(2) The total increase in personnel assigned to 
major headquarters activities, if any, during the pre-
ceding fiscal year— 
(A) attributable to the replacement of con-
tract personnel with military personnel or civil-
ian employees of the Department of Defense, 
including the number of positions associated 
with the replacement of contract personnel per-
forming inherently governmental functions; and 
(B) attributable to reasons other than the 
replacement of contract personnel with military 
personnel or civilian employees of the Depart-
ment, such as workload or operational demand 
increases. 
(3) An estimate of the cost savings, if any, as-
sociated with the elimination of contracts for the 
performance of major headquarters activities. 
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(4) The number of military personnel and civil-
ian employees of the Department of Defense as-
signed to major headquarters activities for each 
component of the Department of Defense as of Octo-
ber 1 of the preceding fiscal year. 
(c) DEFINITIONS.—In this section: 
(1) DEFENSE BUDGET MATERIALS.—The term 
‘‘defense budget materials’’, with respect to a fiscal 
year, means the materials submitted to Congress by 
the Secretary of Defense in support of the budget 
for that fiscal year that is submitted to Congress by 
the President under section 1105 of title 31, United 
States Code. 
(2) CONTRACT PERSONNEL.—The term ‘‘con-
tract personnel’’ means persons hired under a con-
tract with the Department of Defense for the per-
formance of major Department of Defense head-
quarters activities. 
SEC. 902. FLEXIBILITY TO ADJUST THE NUMBER OF DEP-
UTY CHIEFS AND ASSISTANT CHIEFS. 
(a) ARMY.—Section 3035(b) of title 10, United 
States Code, is amended to read as follows: 
‘‘(b) The Secretary of the Army shall prescribe the 
number of Deputy Chiefs of Staff and Assistant Chiefs 
of Staff, for a total of not more than eight positions.’’. 
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(b) NAVY.— 
(1) DEPUTY CHIEFS OF NAVAL OPERATIONS.— 
Section 5036(a) of title 10, United States Code, is 
amended— 
(A) by striking ‘‘There are in the Office of 
the Chief of Naval Operations not more than 
five Deputy Chiefs of Naval Operations,’’ and 
inserting ‘‘There are Deputy Chiefs of Naval 
Operations in the Office of the Chief of Naval 
Operations,’’; and 
(B) by adding at the end the following: 
‘‘The Secretary of the Navy shall prescribe the 
number of Deputy Chiefs of Naval Operations 
under this section and Assistant Chiefs of 
Naval Operations under section 5037 of this 
title, for a total of not more than eight posi-
tions.’’. 
(2) ASSISTANT
CHIEFS
OF
NAVAL
OPER-
ATIONS.—Section 5037(a) of such title is amend-
ed— 
(A) by striking ‘‘There are in the Office of 
the Chief of Naval Operations not more than 
three Assistant Chiefs of Naval Operations,’’ 
and inserting ‘‘There are Assistant Chiefs of 
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Naval Operations in the Office of the Chief of 
Naval Operations,’’; and 
(B) by adding at the end the following: 
‘‘The Secretary of the Navy shall prescribe the 
number of Assistant Chiefs of Naval Operations 
in accordance with section 5036(a) of this 
title.’’. 
(c) AIR FORCE.—Section 8035(b) of title 10, United 
States Code, is amended to read as follows: 
‘‘(b) The Secretary of the Air Force shall prescribe 
the number of Deputy Chiefs of Staff and Assistant Chiefs 
of Staff, for a total of not more than eight positions.’’. 
SEC. 903. CHANGE IN ELIGIBILITY REQUIREMENTS FOR AP-
POINTMENT TO DEPARTMENT OF DEFENSE 
LEADERSHIP POSITIONS. 
(a) SECRETARY OF DEFENSE.—Section 113(a) of 
title 10, United States Code, is amended by striking ‘‘10’’ 
and inserting ‘‘seven’’. 
(b) DEPUTY SECRETARY
OF DEFENSE.—Section 
132(a) of such title is amended by striking ‘‘ten’’ and in-
serting ‘‘seven’’. 
(c) UNDER SECRETARY OF DEFENSE FOR POLICY.— 
Section 134(a) of such title is amended by striking ‘‘10’’ 
and inserting ‘‘seven’’. 
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SEC. 904. MANAGEMENT OF THE DEPARTMENT OF DE-
FENSE. 
(a) ASSIGNMENT
OF MANAGEMENT DUTIES
AND 
DESIGNATION OF A CHIEF MANAGEMENT OFFICER AND 
DEPUTY CHIEF MANAGEMENT OFFICER OF THE DEPART-
MENT OF DEFENSE.— 
(1) ESTABLISHMENT
OF
POSITION.—Section 
132 of title 10, United States Code is amended— 
(A) by redesignating subsection (c) as sub-
section (d); and 
(B) by inserting after subsection (b) the 
following new subsection (c): 
‘‘(c) The Deputy Secretary serves as the Chief Man-
agement Officer of the Department of Defense. The Dep-
uty Secretary shall be assisted in this capacity by a Dep-
uty Chief Management Officer, who shall be appointed 
from civilian life by the President, by and with the advice 
and consent of the Senate.’’. 
(2) ASSIGNMENT OF DUTIES.— 
(A) The Secretary of Defense shall assign 
duties and authorities relating to the manage-
ment of the business operations of the Depart-
ment of Defense. 
(B) The Secretary shall assign such duties 
and authorities to the Chief Management Offi-
cer as are necessary for that official to effec-
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tively and efficiently organize the business oper-
ations of the Department of Defense. 
(C) The Secretary shall assign such duties 
and authorities to the Deputy Chief Manage-
ment Officer as are necessary for that official 
to assist the Chief Management Officer to effec-
tively and efficiently organize the business oper-
ations of the Department of Defense. 
(D) The Deputy Chief Management Officer 
shall perform the duties and have the authori-
ties assigned by the Secretary under subpara-
graph (C) and perform such duties and have 
such authorities as are delegated by the Chief 
Management Officer. 
(3) EXECUTIVE SCHEDULE LEVEL III.—Section 
5314 of title 5, United States Code, is amended by 
inserting after the item relating to the Under Sec-
retary of Defense for Intelligence the following new 
item: 
‘‘Deputy Chief Management Officer of the De-
partment of Defense.’’. 
(4) PLACEMENT IN OSD.—Section 131(b)(2) of 
title 10, United States Code, is amended— 
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(A) 
by 
redesignating 
paragraphs 
(3) 
through (8) as paragraphs (4) through (9), re-
spectively; and 
(B) by inserting after paragraph (2) the 
following new paragraph (3): 
‘‘(3) The Deputy Chief Management Officer of 
the Department of Defense.’’. 
(b) ASSIGNMENT
OF MANAGEMENT DUTIES
AND 
DESIGNATION OF THE CHIEF MANAGEMENT OFFICERS 
OF THE MILITARY DEPARTMENTS.— 
(1) The Secretary of a military department 
shall assign duties and authorities relating to the 
management of the business operations of such mili-
tary department. 
(2) The Secretary of a military department, in 
assigning duties and authorities under paragraph 
(1) shall designate the Under Secretary of such mili-
tary department to have the primary management 
responsibility for business operations, to be known in 
the performance of such duties as the Chief Manage-
ment Officer. 
(3) The Secretary shall assign such duties and 
authorities to the Chief Management Officer as are 
necessary for that official to effectively and effi-
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ciently organize the business operations of the mili-
tary department concerned. 
(4) The Chief Management Officer of each mili-
tary department shall promptly provide such infor-
mation relating to the business operations of such 
department to the Chief Management Officer and 
Deputy Chief Management Officer of the Depart-
ment of Defense as is necessary to assist those offi-
cials in the performance of their duties. 
(c) MANAGEMENT OF DEFENSE BUSINESS TRANS-
FORMATION AGENCY.—Section 192(e)(2) of title 10, 
United States Code, is amended by striking ‘‘that the 
Agency’’ and all that follows and inserting ‘‘that the Di-
rector of the Agency shall report directly to the Deputy 
Chief Management Officer of the Department of De-
fense.’’. 
(d) STRATEGIC MANAGEMENT PLAN REQUIRED.— 
(1) REQUIREMENT.—The Secretary of Defense, 
acting through the Chief Management Officer of the 
Department of Defense, shall develop a strategic 
management plan for the Department of Defense. 
(2) MATTERS COVERED.—Such plan shall in-
clude, at a minimum, detailed descriptions of— 
(A) performance goals and measures for 
improving and evaluating the overall efficiency 
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and effectiveness of the business operations of 
the Department of Defense and achieving an in-
tegrated management system for business sup-
port areas within the Department of Defense; 
(B) key initiatives to be undertaken by the 
Department of Defense to achieve the perform-
ance goals under subparagraph (A), together 
with related resource needs; 
(C) procedures to monitor the progress of 
the Department of Defense in meeting perform-
ance goals and measures under subparagraph 
(A); 
(D) procedures to review and approve 
plans and budgets for changes in business oper-
ations, including any proposed changes to poli-
cies, procedures, processes, and systems, to en-
sure the compatibility of such plans and budg-
ets with the strategic management plan of the 
Department of Defense; and 
(E) procedures to oversee the development 
of, and review and approve, all budget requests 
for defense business systems. 
(3) UPDATES.—The Secretary of Defense, act-
ing through the Chief Management Officer, shall up-
date the strategic management plan no later than 
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(b) REFERENCES TO HEAD OF CENTRAL INTEL-
LIGENCE AGENCY.—Such title is further amended by 
striking ‘‘Director of Central Intelligence’’ each place it 
appears in the following provisions and inserting ‘‘Director 
of the Central Intelligence Agency’’: 
(1) Section 431(b)(1). 
(2) Section 444. 
(3) Section 1089(g). 
(c) OTHER AMENDMENTS.— 
(1) SUBSECTION HEADINGS.— 
(A) SECTION 441(c).—The heading of sub-
section (c) of section 441 of such title is amend-
ed by striking ‘‘DIRECTOR OF CENTRAL INTEL-
LIGENCE’’ and inserting ‘‘DIRECTOR
OF NA-
TIONAL INTELLIGENCE’’. 
(B) SECTION
443(d).—The heading of 
subsection (d) of section 443 of such title is 
amended by striking ‘‘DIRECTOR OF CENTRAL 
INTELLIGENCE’’ and inserting ‘‘DIRECTOR OF 
NATIONAL INTELLIGENCE’’. 
(2) SECTION 201.—Section 201 of such title is 
further amended— 
(A) in subsection (b)(1), to read as follows: 
‘‘(1) In the event of a vacancy in a position re-
ferred to in paragraph (2), before appointing an in-
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