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(B) savings that exceed 5 percent of the
total anticipated costs of carrying out a program
through annual contracts, but do not exceed 10
percent of such costs, shall not be considered to
be substantial unless the Secretary determines in
writing that an exceptionally strong case has
been made with regard to the findings required
by paragraphs (2) through (6) of section
2306b(a) of such title; and
(C) savings that do not exceed 5 percent of
the total anticipated costs of carrying out a pro-
gram through annual contracts shall not be con-
sidered to be substantial.
(2) EFFECTIVE
DATE.—The modification re-
quired by paragraph (1) shall apply with regard to
any multiyear contract that is authorized after the
date that is 60 days after the date of the enactment
of this Act.
(b) REPORT ON BASIS FOR DETERMINATION.—Section
2306b(i)(3) of title 10, United States Code, is amended by
inserting before the period at the end the following: ‘‘after
the head of the agency concerned submits to the congres-
sional defense committees a report on the specific facts sup-
porting the determination of the head of that agency under
subsection (a)’’.
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(c) REPORTS ON SAVINGS ACHIEVED.—
(1) REPORTS REQUIRED.—Not later than Janu-
ary 15 of 2008, 2009, and 2010, the Secretary shall
submit to the congressional defense committees a re-
port on the savings achieved through the use of
multiyear contracts that were entered under the au-
thority of section 2306b of title 10, United States
Code, and the performance of which was completed in
the preceding fiscal year.
(2) ELEMENTS.—Each report under paragraph
(1) shall specify, for each multiyear contract covered
by such report—
(A) the savings that the Department of De-
fense estimated it would achieve through the use
of the multiyear contract at the time such con-
tract was awarded; and
(B) the best estimate of the Department on
the savings actually achieved under such con-
tract.
SEC. 802. CHANGES TO MILESTONE B CERTIFICATIONS.
Section 2366a of title 10, United States Code, is
amended—
(1) in subsection (a), by inserting ‘‘, after receiv-
ing a business case analysis,’’ after ‘‘the milestone de-
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cision authority’’ in the matter preceding paragraph
(1);
(2) by redesignating subsections (b), (c), (d), and
(e) as subsections (c), (d), (e), and (f), respectively;
(3) by inserting after subsection (a) the following
new subsection (b):
‘‘(b) CHANGES TO CERTIFICATION.—(1) The program
manager for a major defense acquisition program that has
received certification under subsection (a) shall imme-
diately notify the milestone decision authority of any
changes to the program that are—
‘‘(A) inconsistent with such certification; or
‘‘(B) deviate significantly from the material pro-
vided to the milestone decision authority in support
of such certification.
‘‘(2) Upon receipt of information under paragraph (1),
the milestone decision authority may withdraw the certifi-
cation concerned or rescind Milestone B approval (or Key
Decision Point B approval in the case of a space program)
if the milestone decision authority determines that such ac-
tion is in the best interest of the national security of the
United States.’’;
(4) in subsection (c), as redesignated by para-
graph (1)—
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(A) by inserting ‘‘(1)’’ before ‘‘The certifi-
cation’’; and
(B) by adding at the end the following new
paragraph (2):
‘‘(2) Any information provided to the milestone deci-
sion authority pursuant to subsection (b) shall be summa-
rized in the first Selected Acquisition Report submitted
under section 2432 of this title after such information is
received by the milestone decision authority.’’; and
(5) in subsection (e), as so redesignated, by strik-
ing ‘‘subsection (c)’’ and inserting ‘‘subsection (d)’’.
SEC. 803. COMPTROLLER GENERAL REPORT ON DEPART-
MENT 
OF 
DEFENSE 
ORGANIZATION 
AND
STRUCTURE FOR MAJOR DEFENSE ACQUISI-
TION PROGRAMS.
(a) REPORT REQUIRED.—Not later than one year
after the date of the enactment of this Act, the Comptroller
General of the United States shall submit to the congres-
sional defense committees a report on potential modifica-
tions of the organization and structure of the Department
of Defense for major defense acquisition programs.
(b) ELEMENTS.—The report required by subsection (a)
shall include the results of a review, conducted by the Comp-
troller General for purposes of the report, regarding the fea-
sibility and advisability of, at a minimum, the following:
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(1) Establishing system commands within each
military department, each of which commands would
be headed by a 4-star general or flag officer, to whom
the program managers and program executive officers
for major defense acquisition programs would report.
(2) Revising the acquisition process for major de-
fense acquisition programs by establishing shorter,
more frequent acquisition program milestones.
(3) Requiring certifications of program status to
the defense acquisition executive and Congress prior
to milestone approval for major defense acquisition
programs.
(4) Establishing a new office (to be known as the
‘‘Office of Independent Assessment’’) to provide inde-
pendent cost estimates and performance estimates for
major defense acquisition programs.
(5) Establishing a milestone system for major de-
fense acquisition programs utilizing the following
milestones (or such other milestones as the Comp-
troller General considers appropriate for purposes of
the review):
(A) MILESTONE 0.—The time for the devel-
opment and approval of a mission need state-
ment for a major defense acquisition program.
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(B) MILESTONE 1.—The time for the devel-
opment and approval of a capability need defi-
nition for a major defense acquisition program,
including development and approval of a certifi-
cation statement on the characteristics required
for the system under the program and a deter-
mination of the priorities among such character-
istics.
(C) MILESTONE 2.—The time for technology
development and assessment for a major defense
acquisition program, including development and
approval of a certification statement on tech-
nology maturity of elements under the program.
(D) MILESTONE 3.—The time for system de-
velopment and demonstration for a major defense
acquisition program, including development and
approval of a certification statement on design
proof of concept.
(E) MILESTONE 4.—The time for final de-
sign, production prototyping, and testing of a
major defense acquisition program, including de-
velopment and approval of a certification state-
ment on cost, performance, and schedule in ad-
vance of initiation of low-rate production of the
system under the program.