IIB 
111TH CONGRESS 
1ST SESSION H. R. 1665 
IN THE SENATE OF THE UNITED STATES 
JULY 30, 2009 
Received; read twice and referred to the Committee on Commerce, Science, 
and Transportation 
AN ACT 
To structure Coast Guard acquisition processes and policies, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Coast Guard Acquisition Reform Act of 2009’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
TITLE I—RESTRICTIONS ON THE USE OF LEAD SYSTEMS 
INTEGRATORS 
Sec. 101. Procurement structure. 
TITLE II—COAST GUARD ACQUISITION POLICY 
Sec. 201. Operational requirements. 
Sec. 202. Required contract terms. 
Sec. 203. Life-cycle cost estimates. 
Sec. 204. Test and evaluation. 
Sec. 205. Capability standards. 
Sec. 206. Acquisition program reports. 
Sec. 207. Undefinitized contractual actions. 
Sec. 208. Guidance on excessive pass-through charges. 
Sec. 209. Acquisition of major capabilities: Alternatives analysis. 
Sec. 210. Cost overruns and delays. 
Sec. 211. Report on former Coast Guard officials employed by contractors to 
the agency. 
Sec. 212. Department of Defense consultation. 
TITLE III—COAST GUARD PERSONNEL 
Sec. 301. Chief Acquisition Officer. 
Sec. 302. Improvements in Coast Guard acquisition management. 
Sec. 303. Recognition of Coast Guard personnel for excellence in acquisition. 
Sec. 304. Enhanced status quo officer promotion system. 
Sec. 305. Coast Guard acquisition workforce expedited hiring authority. 
SEC. 2. DEFINITIONS. 
In this Act, the following definitions apply: 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means the Committee on Transportation 
and Infrastructure of the House of Representatives 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
and the Committee on Commerce, Science, and 
Transportation of the Senate. 
(2) COMMANDANT.—The term ‘‘Commandant’’ 
means the Commandant of the Coast Guard. 
(3) LEVEL 1 ACQUISITION.—The term ‘‘Level 1 
acquisition’’ means— 
(A) an acquisition by the Coast Guard— 
(i) the estimated life-cycle costs of 
which exceed $1,000,000,000; or 
(ii) the estimated total acquisition 
costs of which exceed $300,000,000; or 
(B) any acquisition that the Chief Acquisi-
tion Officer of the Coast Guard determines to 
have a special interest— 
(i) due to— 
(I) the experimental or tech-
nically immature nature of the asset; 
(II) the technological complexity 
of the asset; 
(III) the commitment of re-
sources; or 
(IV) the nature of the capability 
or set of capabilities to be achieved; or 
(ii) because such acquisition is a joint 
acquisition. 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(4) LEVEL 2 ACQUISITION.—The term ‘‘Level 2 
acquisition’’ means an acquisition by the Coast 
Guard— 
(A) the estimated life-cycle costs of which 
are equal to or less than $1,000,000,000, but 
greater than $300,000,000; or 
(B) the estimated total acquisition costs of 
which are equal to or less than $300,000,0000, 
but greater than $100,000,000. 
(5) LIFE-CYCLE
COST.—The term ‘‘life-cycle 
cost’’ means all costs for development, procurement, 
construction, and operations and support for a par-
ticular capability or asset, without regard to funding 
source or management control. 
TITLE I—RESTRICTIONS ON THE 
USE OF LEAD SYSTEMS INTE-
GRATORS 
SEC. 101. PROCUREMENT STRUCTURE. 
(a) IN GENERAL.— 
(1) USE OF LEAD SYSTEMS INTEGRATOR.—Ex-
cept as provided in subsection (b), the Commandant 
may not use a private sector entity as a lead systems 
integrator for an acquisition contract awarded or de-
livery order or task order issued after the end of the 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
180-day period beginning on the date of enactment 
of this Act. 
(2) FULL AND OPEN COMPETITION.—The Com-
mandant and any lead systems integrator engaged 
by the Coast Guard shall use full and open competi-
tion for any acquisition contract awarded after the 
date of enactment of this Act, unless otherwise ex-
cepted in accordance with Federal acquisition laws 
and regulations promulgated under those laws, in-
cluding the Federal Acquisition Regulation. 
(3) NO EFFECT ON SMALL BUSINESS ACT.— 
Nothing in this subsection shall be construed to su-
persede or otherwise affect the authorities provided 
by and under the Small Business Act (15 U.S.C. 
631 et seq.). 
(b) EXCEPTIONS.— 
(1) NATIONAL DISTRESS AND RESPONSE SYS-
TEM
MODERNIZATION
PROGRAM; NATIONAL
SECU-
RITY
CUTTERS
AND
3.—Notwithstanding sub-
sections (a) and (e), the Commandant may use a 
private sector entity as a lead systems integrator for 
the Coast Guard to complete the National Distress 
and Response System Modernization Program (oth-
erwise known as the ‘‘Rescue 21’’ program) and Na-
tional Security Cutters 2 and 3. 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(2) COMPLETION
OF
ACQUISITION
BY
LEAD 
SYSTEMS INTEGRATOR.—Notwithstanding subsection 
(a), the Commandant may use a private sector enti-
ty as a lead systems integrator for the Coast 
Guard— 
(A) to complete any delivery order or task 
order, including the exercise of previously estab-
lished options on a delivery order or task order 
that was issued to a lead systems integrator on 
or before the date that is 180 days after the 
date of enactment of this Act without any 
change in the quantity of capabilities or assets 
or the specific type of capabilities or assets cov-
ered by the order; 
(B) for a contract awarded after the date 
that is 180 days after the date of enactment of 
this Act for acquisition of, or in support of, the 
HC–130J aircraft, the HH–65 aircraft, or the 
C4ISR system, if the requirements of sub-
section (c) are met with respect to such acquisi-
tions; 
(C) for a contract awarded after the date 
that is 180 days after the date of enactment of 
this Act for acquisition of, or in support of, 
Maritime Patrol Aircraft, if the requirements of 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
subsection (c) are met with respect to such an 
acquisition; and 
(D) for the acquisition of, or in support of, 
additional National Security Cutters or Mari-
time Patrol Aircraft, if the Commandant deter-
mines that— 
(i) the acquisition is in accordance 
with Federal acquisition laws and regula-
tions promulgated under those laws, in-
cluding the Federal Acquisition Regula-
tion; 
(ii) the acquisition and the use of a 
private sector entity as a lead systems inte-
grator for the acquisition are in the best 
interest of the Federal Government; and 
(iii) the requirements of subsection (c) 
are met with respect to such acquisition. 
(3) REPORT ON DECISION-MAKING PROCESS.— 
If the Commandant determines under subparagraph 
(B), (C), or (D) of subsection (b)(2) that the Coast 
Guard will use a private sector lead systems inte-
grator for an acquisition, the Commandant shall no-
tify in writing the appropriate congressional commit-
tees of the Commandant’s determination and shall 
provide a detailed rationale for the determination, at 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
least 30 days before the award of a contract or 
issuance of a delivery order or task order, using a 
private sector lead systems integrator, including a 
comparison of the cost of the acquisition through the 
private sector lead systems integrator with the ex-
pected cost if the acquisition were awarded directly 
to the manufacturer or shipyard. For purposes of 
that comparison, the cost of award directly to a 
manufacturer or shipyard shall include the costs of 
Government contract management and oversight. 
(c) LIMITATION ON LEAD SYSTEMS INTEGRATORS.— 
Neither an entity performing lead systems integrator func-
tions for a Coast Guard acquisition nor a Tier 1 subcon-
tractor for any acquisition described in subparagraph (B), 
(C), or (D) of subsection (b)(2) may have a financial inter-
est in a subcontractor below the Tier 1 subcontractor level 
unless— 
(1) the subcontractor was selected by the prime 
contractor through full and open competition for 
such procurement; 
(2) the procurement was awarded by the lead 
systems integrator or a subcontractor through full 
and open competition; 
(3) the procurement was awarded by a subcon-
tractor through a process over which the lead sys-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
tems integrator or a Tier 1 subcontractor exercised 
no control; or 
(4) the Commandant has determined that the 
procurement was awarded in a manner consistent 
with Federal acquisition laws and regulations pro-
mulgated under those laws, including the Federal 
Acquisition Regulation. 
(d) RULE
OF CONSTRUCTION.—The limitation in 
subsection (b)(1)(A) on the quantity and specific type of 
assets to which subsection (b) applies shall not be con-
strued to apply to the modification of the number or type 
of any sub-systems or other components of a vessel or air-
craft described in subparagraph (B), (C), or (D) of sub-
section (b)(2). 
(e) TERMINATION DATE FOR EXCEPTIONS.—Except 
as described in subsection (b)(1), the Commandant may 
not use a private sector entity as a lead systems integrator 
for acquisition contracts awarded, or task orders or deliv-
ery orders issued, after the earlier of— 
(1) September 30, 2011; or 
(2) the date on which the Commandant certifies 
in writing to the appropriate congressional commit-
tees that the Coast Guard has available and can re-
tain sufficient acquisition workforce personnel and 
expertise within the Coast Guard, through an ar-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
rangement with other Federal agencies, or through 
contracts or other arrangements with private sector 
entities, to perform the functions and responsibilities 
of the lead systems integrator in an efficient and 
cost-effective manner. 
TITLE II—COAST GUARD 
ACQUISITION POLICY 
SEC. 201. OPERATIONAL REQUIREMENTS. 
(a) IN GENERAL.—No Level 1 or Level 2 acquisition 
program may be initiated by the Coast Guard, and no pro-
duction contract may be awarded for such an acquisition, 
unless the Commandant has approved an operational re-
quirement for such acquisition. 
(b) OPERATIONAL REQUIREMENT FOR ACQUISITION 
PROGRAMS.— 
(1) IN GENERAL.—The Commandant shall es-
tablish mature and stable operational requirements 
for acquisition programs. 
(2) ELEMENTS.—Prior to establishing oper-
ational requirements under paragraph (1), the Com-
mandant shall— 
(A) prepare a preliminary statement of 
need, a concept of operations, an analysis of al-
ternatives or the equivalent, an estimate of life- 
cycle costs, and requirements for interoper-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
ability with other capabilities and assets within 
and external to the Coast Guard; and 
(B) in preparing the concept of operations 
under subparagraph (A), coordinate with acqui-
sition and support professionals, requirements 
officials, operational users and maintainers, and 
resource officials who can ensure the appro-
priate consideration of performance, cost, 
schedule and risk trade-offs. 
(c) CONSIDERATION
OF TRADE-OFFS.—In estab-
lishing operational requirements under subsection (a), the 
Commandant shall develop and implement mechanisms to 
ensure that trade-offs among performance, cost, schedule, 
and risk are considered in the establishment of operational 
requirements for development and production of a Level 
1 or Level 2 acquisition. 
(d) ELEMENTS.—The mechanisms required under 
this section shall ensure at a minimum that Coast Guard 
officials responsible for acquisition management, budget, 
and cost estimating functions have the authority to de-
velop cost estimates and raise cost and schedule matters 
at any point in the process of establishing operational re-
quirements for a Level 1 or Level 2 acquisition. 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
SEC. 202. REQUIRED CONTRACT TERMS. 
(a) IN GENERAL.—The Commandant shall ensure 
that a contract awarded or a delivery order or task order 
issued for an acquisition of a capability or an asset with 
an expected service life of 10 years and with a total acqui-
sition cost that is equal to or exceeds $10,000,000 award-
ed or issued by the Coast Guard after the date of enact-
ment of this Act— 
(1) provides that all certifications for an end- 
state capability or asset under such contract, deliv-
ery order, or task order, respectively, will be con-
ducted by the Commandant or an independent third 
party, and that self-certification by a contractor or 
subcontractor is not allowed; 
(2) requires that the Commandant shall main-
tain the authority to establish, approve, and main-
tain technical requirements; 
(3) requires that any measurement of con-
tractor and subcontractor performance be based on 
the status of all work performed, including the ex-
tent to which the work performed met all perform-
ance, cost, and schedule requirements; 
(4) specifies that, for the acquisition or upgrade 
of air, surface, or shore capabilities and assets for 
which compliance with TEMPEST certification is a 
requirement, the standard for determining such com-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
pliance will be the air, surface, or shore standard 
then used by the Department of the Navy for that 
type of capability or asset; and 
(5) for any contract awarded to acquire an Off-
shore Patrol Cutter, includes provisions specifying 
the service life, fatigue life, and days underway in 
general Atlantic and North Pacific Sea conditions, 
maximum range, and maximum speed the cutter will 
be built to achieve. 
(b) PROHIBITED CONTRACT PROVISIONS.—The Com-
mandant shall ensure that any contract awarded or deliv-
ery order or task order issued by the Coast Guard after 
the date of enactment of this Act does not include any 
provision allowing for equitable adjustment that differs 
from the Federal Acquisition Regulation. 
(c) EXTENSION OF PROGRAM.—Any contract, con-
tract modification, or award term extending a contract 
with a lead systems integrator— 
(1) shall not include any minimum require-
ments for the purchase of a given or determinable 
number of specific capabilities or assets; and 
(2) shall be reviewed by an independent third 
party with expertise in acquisition management, and 
the results of that review shall be submitted to the 
appropriate congressional committees at least 60 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
days prior to the award of the contract, contract 
modification, or award term. 
SEC. 203. LIFE-CYCLE COST ESTIMATES. 
(a) IN GENERAL.—The Commandant shall imple-
ment mechanisms to ensure the development and regular 
updating of life-cycle cost estimates for each acquisition 
with a total acquisition cost that equals or exceeds 
$10,000,000 and an expected service life of 10 years, and 
to ensure that these estimates are considered in decisions 
to develop or produce new or enhanced capabilities and 
assets. 
(b) TYPES OF ESTIMATES.—In addition to life-cycle 
cost estimates that may be developed by acquisition pro-
gram offices, the Commandant shall require that an inde-
pendent life-cycle cost estimate be developed for each 
Level 1 or Level 2 acquisition program or project. 
(c) REQUIRED UPDATES.—For each Level 1 or Level 
2 acquisition program or project the Commandant shall 
require that life-cycle cost estimates shall be updated be-
fore each milestone decision is concluded and the program 
or project enters a new acquisition phase. 
SEC. 204. TEST AND EVALUATION. 
(a) TEST AND EVALUATION MASTER PLAN.— 
(1) IN GENERAL.—For any Level 1 or Level 2 
acquisition program or project the Coast Guard 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
Chief Acquisition Officer must approve a Test and 
Evaluation Master Plan specific to the acquisition 
program or project for the capability, asset, or sub- 
systems of the capability or asset and intended to 
minimize technical, cost, and schedule risk as early 
as practicable in the development of the program or 
project. 
(2) TEST
AND
EVALUATION
STRATEGY.—The 
TEMP shall— 
(A) set forth an integrated test and evalua-
tion strategy that will verify that capability-level 
or asset-level and sub-system-level design and 
development, 
including 
performance 
and 
supportability, have been sufficiently proven be-
fore the capability, asset, or sub-system of the 
capability or asset is approved for production; 
and 
(B) require that adequate developmental 
tests and evaluations and operational tests and 
evaluations established under subparagraph (A) 
are performed to inform production decisions. 
(3) OTHER COMPONENTS OF TEMP.—At a min-
imum, the TEMP shall identify— 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(A) the key performance parameters to be 
resolved through the integrated test and evalua-
tion strategy; 
(B) critical operational issues to be as-
sessed in addition to the key performance pa-
rameters; 
(C) specific development test and evalua-
tion phases and the scope of each phase; 
(D) modeling and simulation activities to 
be performed, if any, and the scope of such ac-
tivities; 
(E) early operational assessments to be 
performed, if any, and the scope of such assess-
ments; 
(F) operational test and evaluation phases; 
(G) an estimate of the resources, including 
funds, that will be required for all test, evalua-
tion, assessment, modeling, and simulation ac-
tivities; and 
(H) the Government entity or independent 
entity that will perform the test, evaluation, as-
sessment, modeling, and simulation activities. 
(4) UPDATE.—The Coast Guard Chief Acquisi-
tion Officer shall approve an updated TEMP when-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
ever there is a revision to program or project test 
and evaluation strategy, scope, or phasing. 
(5) LIMITATION.—The Coast Guard may not— 
(A) proceed past that phase of the acquisi-
tion process that entails approving the sup-
porting acquisition of a capability or asset be-
fore the TEMP is approved by the Coast Guard 
Chief Acquisition Officer; or 
(B) award any production contract for a 
capability, asset, or sub-system for which a 
TEMP is required under this subsection before 
the TEMP is approved by the Coast Guard 
Chief Acquisition Officer. 
(b) TESTS AND EVALUATIONS.— 
(1) IN GENERAL.—The Commandant shall en-
sure that the Coast Guard conducts developmental 
tests and evaluations and operational tests and eval-
uations of a capability or asset and the sub-systems 
of the capability or asset for which a TEMP has 
been prepared under subsection (a). 
(2) USE
OF
THIRD
PARTIES.—The Com-
mandant shall ensure that the Coast Guard uses 
third parties with expertise in testing and evaluating 
the capabilities or assets and the sub-systems of the 
capabilities or assets being acquired to conduct de-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
velopmental tests and evaluations and operational 
tests and evaluations whenever the Coast Guard 
lacks the capability to conduct the tests and evalua-
tions required by a TEMP. 
(3) COMMUNICATION OF SAFETY CONCERNS.— 
The Commandant shall require that safety concerns 
identified during developmental or operational tests 
and evaluations or through independent or Govern-
ment-conducted design assessments of capabilities or 
assets and sub-systems of capabilities or assets to be 
acquired by the Coast Guard shall be communicated 
as soon as practicable, but not later than 30 days 
after the completion of the test or assessment event 
or activity that identified the safety concern, to the 
program manager for the capability or asset and the 
sub-systems concerned and to the Coast Guard Chief 
Acquisition Officer. 
(4) REPORTING OF SAFETY CONCERNS.—Any 
safety concerns that have been reported to the Chief 
Acquisition Officer for an acquisition program or 
project shall be reported by the Commandant to the 
appropriate congressional committees at least 90 
days before the award of any contract or issuance of 
any delivery order or task order for low, initial, or 
full-rate production of the capability or asset con-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
cerned if they will remain uncorrected or unmiti-
gated at the time such a contract is awarded or de-
livery order or task order is issued. The report shall 
include a justification for the approval of that level 
of production of the capability or asset before the 
safety concern is corrected or mitigated. The report 
shall also include an explanation of the actions that 
will be taken to correct or mitigate the safety con-
cern, the date by which those actions will be taken, 
and the adequacy of current funding to correct or 
mitigate the safety concern. 
(5) ASSET ALREADY IN LOW, INITIAL, OR FULL- 
RATE PRODUCTION.—If operational test and evalua-
tion on a capability or asset already in low, initial, 
or full-rate production identifies a safety concern 
with the capability or asset or any sub-systems of 
the capability or asset not previously identified dur-
ing developmental or operational test and evaluation, 
the Commandant shall— 
(A) notify the program manager and the 
Chief Acquisition Officer of the safety concern 
as soon as practicable, but not later than 30 
days after the completion of the test and eval-
uation event or activity that identified the safe-
ty concern; and 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(B) notify the appropriate congressional 
Committee of the safety concern not later than 
30 days after notification is made to the pro-
gram manager and Chief Acquisition Officer, 
and include in such notification— 
(i) an explanation of the actions that 
will be taken to correct or mitigate the 
safety concern in all capabilities or assets 
and sub-systems of the capabilities or as-
sets yet to be produced, and the date by 
which those actions will be taken; 
(ii) an explanation of the actions that 
will be taken to correct or mitigate the 
safety concern in previously produced ca-
pabilities or assets and sub-systems of the 
capabilities or assets, and the date by 
which those actions will be taken; and 
(iii) an assessment of the adequacy of 
current funding to correct or mitigate the 
safety concern in capabilities or assets and 
sub-systems of the capabilities or assets 
and in previously produced capabilities or 
assets and sub-systems. 
(c) DEFINITIONS.—In this section: 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(B) the evaluation of the results of such 
testing. 
(3) SAFETY CONCERN.—The term ‘‘safety con-
cern’’ means any hazard associated with a capability 
or asset or a sub-system of a capability or asset that 
is likely to cause serious bodily injury or death to a 
typical Coast Guard user in testing, maintaining, re-
pairing, or operating the capability, asset, or sub- 
system or any hazard associated with the capability, 
asset, or sub-system that is likely to cause major 
damage to the capability, asset, or sub-system dur-
ing the course of its normal operation by a typical 
Coast Guard user. 
(4) TEMP.—The term ‘‘TEMP’’ means a Test 
and Evaluation Master Plan for which approval is 
required under this section. 
SEC. 205. CAPABILITY STANDARDS. 
(a) CUTTER CLASSIFICATION.—The Commandant 
shall cause each cutter, other than a National Security 
Cutter, acquired by the Coast Guard and delivered after 
the date of enactment of this Act to be classed by the 
American Bureau of Shipping before final acceptance. 
(b) TEMPEST TESTING.—The Commandant shall— 
(1) cause all electronics on all aircraft, surface, 
and shore capabilities and assets that require TEM-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
PEST certification and that are delivered after the 
date of enactment of this Act to be tested in accord-
ance with TEMPEST standards and communication 
security (COMSEC) standards by an independent 
third party that is authorized by the Federal Gov-
ernment to perform such testing; and 
(2) certify that the capabilities and assets meet 
all applicable TEMPEST requirements. 
(c) NATIONAL SECURITY CUTTERS.— 
(1) NATIONAL SECURITY CUTTERS 1 AND 2.— 
Not later than 90 days before the Coast Guard 
awards any contract or issues any delivery order or 
task order to strengthen the hull of either of Na-
tional Security Cutter 1 or 2 to resolve the struc-
tural design and performance issues identified in the 
Department of Homeland Security Inspector Gen-
eral’s report OIG–07–23 dated January 2007, the 
Commandant shall submit to the appropriate con-
gressional committees and the Committee on Home-
land Security of the House of Representatives all re-
sults of an assessment of the proposed hull strength-
ening design conducted by the Coast Guard, includ-
ing— 
(A) a description in detail of the extent to 
which the hull strengthening measures to be im-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
plemented on those cutters will enable the cut-
ters to meet contract and performance require-
ments; 
(B) a cost benefit analysis of the proposed 
hull strengthening measures for National Secu-
rity Cutters 1 and 2; and 
(C) a description of any operational re-
strictions that would have to be applied to ei-
ther National Security Cutter 1 or 2 if the pro-
posed hull strengthening measures were not im-
plemented on either cutter. 
(2) OTHER VESSELS.—The Commandant shall 
cause the design and construction of each National 
Security Cutter, other than National Security Cut-
ters 1, 2, and 3, to be assessed by an independent 
third party with expertise in vessel design and con-
struction certification. 
(d) AIRCRAFT AIRWORTHINESS.—The Commandant 
shall cause all aircraft and aircraft engines acquired by 
the Coast Guard and delivered after the date of enactment 
of this Act to be assessed for airworthiness by an inde-
pendent third party with expertise in aircraft and aircraft 
engine certification, before final acceptance. 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
SEC. 206. ACQUISITION PROGRAM REPORTS. 
Any Coast Guard Level 1 or Level 2 acquisition pro-
gram or project may not begin to obtain any capability 
or asset or proceed beyond that phase of its development 
that entails approving the supporting acquisition until the 
Commandant submits to the appropriate congressional 
committees the following: 
(1) The key performance parameters, the key 
system attributes, and the operational performance 
attributes of the capability and asset to be acquired 
under the proposed acquisition program or project 
will be built to achieve. 
(2) A detailed list of the systems or other capa-
bilities with which the capability or asset to be ac-
quired is intended to be interoperable, including an 
explanation of the attributes of interoperability. 
(3) The anticipated acquisition program base-
line and acquisition unit cost for the capability or 
asset to be produced and deployed under the pro-
gram or project. 
(4) A detailed schedule for the acquisition proc-
ess showing when all capability and asset acquisi-
tions are to be completed and when all acquired ca-
pabilities and assets are to be initially and fully de-
ployed. 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
SEC. 207. UNDEFINITIZED CONTRACTUAL ACTIONS. 
(a) IN GENERAL.—The Coast Guard may not enter 
into an undefinitized contractual action unless such action 
is directly approved by the Head of Contracting Activity 
of the Coast Guard. 
(b) REQUESTS FOR UNDEFINITIZED CONTRACTUAL 
ACTIONS.—Any request to the Head of Contracting Activ-
ity for approval of an undefinitized contractual action cov-
ered under subsection (a) must include a description of 
the anticipated effect on requirements of the Coast Guard 
if a delay is incurred for the purposes of determining con-
tractual terms, specifications, and price before perform-
ance is begun under the contractual action. 
(c) REQUIREMENTS FOR UNDEFINITIZED CONTRAC-
TUAL ACTIONS.— 
(1) DEADLINE
FOR
AGREEMENT
ON
TERMS, 
SPECIFICATIONS, AND PRICE.—A contracting officer 
of the Coast Guard may not enter into an 
undefinitized contractual action unless the contrac-
tual action provides for agreement upon contractual 
terms, specification, and price by the earlier of— 
(A) the end of the 180-day period begin-
ning on the date on which the contractor sub-
mits a qualifying proposal to definitize the con-
tractual terms, specifications, and price; or 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(B) the date on which the amount of funds 
obligated under the contractual action is equal 
to more than 50 percent of the negotiated over-
all ceiling price for the contractual action. 
(2) LIMITATION ON OBLIGATIONS.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the contracting officer for an 
undefinitized contractual action may not obli-
gate under such contractual action an amount 
that exceeds 50 percent of the negotiated over-
all ceiling price until the contractual terms, 
specifications, and price are definitized for such 
contractual action. 
(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), if a contractor submits a quali-
fying proposal to definitize an undefinitized 
contractual action before an amount that ex-
ceeds 50 percent of the negotiated overall ceil-
ing price is obligated on such action, the con-
tracting officer for such action may not obligate 
with respect to such contractual action an 
amount that exceeds 75 percent of the nego-
tiated overall ceiling price until the contractual 
terms, specifications, and price are definitized 
for such contractual action. 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(3) WAIVER.—The Commandant may waive the 
application of this subsection with respect to a con-
tract if the Commandant determines that the waiver 
is necessary to support— 
(A) a contingency operation (as that term 
is defined in section 101(a)(13) of title 10, 
United States Code); 
(B) an operation in response to an emer-
gency that poses an unacceptable threat to 
human health or safety or to the marine envi-
ronment; or 
(C) an operation in response to a natural 
disaster or major disaster or emergency des-
ignated by the President under the Robert T. 
Stafford Disaster Relief and Emergency Assist-
ance Act (42 U.S.C. 5121 et seq.). 
(4) LIMITATION ON APPLICATION.—This sub-
section does not apply to an undefinitized contrac-
tual action for the purchase of initial spares. 
(d) INCLUSION OF NONURGENT REQUIREMENTS.— 
Requirements for spare parts and support equipment that 
are not needed on an urgent basis may not be included 
in an undefinitized contractual action by the Coast Guard 
for spare parts and support equipment that are needed 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
on an urgent basis unless the Commandant approves such 
inclusion as being— 
(1) good business practice; and 
(2) in the best interests of the United States. 
(e) MODIFICATION
OF SCOPE.—The scope of an 
undefinitized contractual action under which performance 
has begun may not be modified unless the Commandant 
approves such modification as being— 
(1) good business practice; and 
(2) in the best interests of the United States. 
(f) ALLOWABLE PROFIT.—The Commandant shall 
ensure that the profit allowed on an undefinitized contrac-
tual action for which the final price is negotiated after 
a substantial portion of the performance required is com-
pleted reflects— 
(1) the possible reduced cost risk of the con-
tractor with respect to costs incurred during per-
formance of the contract before the final price is ne-
gotiated; and 
(2) the reduced cost risk of the contractor with 
respect to costs incurred during performance of the 
remaining portion of the contract. 
(g) DEFINITIONS.—In this section: 
(1) UNDEFINITIZED CONTRACTUAL ACTION.— 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘‘undefinitized con-
tractual action’’ means a new procurement ac-
tion entered into by the Coast Guard for which 
the contractual terms, specifications, or price 
are not agreed upon before performance is 
begun under the action. 
(B) EXCLUSION.—Such term does not in-
clude contractual actions with respect to the fol-
lowing: 
(i) Foreign military sales. 
(ii) Purchases in an amount not in ex-
cess of the amount of the simplified acqui-
sition threshold. 
(iii) Special access programs. 
(2) QUALIFYING PROPOSAL.—The term ‘‘quali-
fying proposal’’ means a proposal that contains suf-
ficient information to enable complete and meaning-
ful audits of the information contained in the pro-
posal as determined by the contracting officer. 
SEC. 
208. 
GUIDANCE 
ON 
EXCESSIVE 
PASS-THROUGH 
CHARGES. 
(a) IN GENERAL.—Not later than 180 days after the 
date of enactment of this Act, the Commandant shall issue 
guidance to ensure that pass-through charges on con-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
tracts, subcontracts, delivery orders, and task orders that 
are entered into with a private entity acting as a lead sys-
tems integrator by or on behalf of the Coast Guard are 
not excessive in relation to the cost of work performed by 
the relevant contractor or subcontractor. The guidance 
shall, at a minimum— 
(1) set forth clear standards for determining 
when no, or negligible, value has been added to a 
contract by a contractor or subcontractor; 
(2) set forth procedures for preventing the pay-
ment by the Government of excessive pass-through 
charges; and 
(3) identify any exceptions determined by the 
Commandant to be in the best interest of the Gov-
ernment. 
(b) 
EXCESSIVE
PASS-THROUGH
CHARGE
DE-
FINED.—In this section the term ‘‘excessive pass-through 
charge’’, with respect to a contractor or subcontractor that 
adds no, or negligible, value to a contract or subcontract, 
means a charge to the Government by the contractor or 
subcontractor that is for overhead or profit on work per-
formed by a lower-tier contractor or subcontractor, other 
than reasonable charges for the direct costs of managing 
lower-tier contractors and subcontracts and overhead and 
profit based on such direct costs. 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(c) APPLICATION
OF
GUIDANCE.—The guidance 
under this subsection shall apply to contracts awarded to 
a private entity acting as a lead systems integrator by or 
on behalf of the Coast Guard on or after the date that 
is 360 days after the date of enactment of this Act. 
SEC. 209. ACQUISITION OF MAJOR CAPABILITIES: ALTER-
NATIVES ANALYSIS. 
The Coast Guard may not acquire an experimental 
or technically immature capability or asset or implement 
a Level 1 or Level 2 acquisition, unless it has conducted 
an alternatives analysis for the capability or asset to be 
acquired in the concept and technology development phase 
of the acquisition process for the capability or asset. Such 
analysis shall be conducted by a federally funded research 
and development center, a qualified entity of the Depart-
ment of Defense, or a similar independent third party enti-
ty that has appropriate acquisition expertise. Such alter-
natives analysis shall include— 
(1) an assessment of the technical maturity of 
the capability or asset and technical and other risks; 
(2) an examination of capability, interoper-
ability, and other advantages and disadvantages; 
(3) an evaluation of whether different combina-
tions or quantities of specific capabilities or assets 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
could meet the Coast Guard’s overall performance 
needs; 
(4) a discussion of key assumptions and vari-
ables, and sensitivity to change in such assumptions 
and variables; 
(5) when an alternative is an existing capa-
bility, asset, or prototype, an evaluation of relevant 
safety and performance records and costs; 
(6) a calculation of life-cycle costs, including— 
(A) an examination of development costs 
and the levels of uncertainty associated with 
such estimated costs; 
(B) an examination of likely production 
and deployment costs and the levels of uncer-
tainty associated with such estimated costs; 
(C) an examination of likely operating and 
support costs and the levels of uncertainty asso-
ciated with such estimated costs; 
(D) if they are likely to be significant, an 
examination of likely disposal costs and the lev-
els of uncertainty associated with such esti-
mated costs; and 
(E) such additional measures the Com-
mandant determines to be necessary for appro-
priate evaluation of the capability or asset; and 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(7) the business case for each viable alternative. 
SEC. 210. COST OVERRUNS AND DELAYS. 
(a) IN GENERAL.—The Commandant shall submit a 
report to the appropriate congressional committees as 
soon as possible, but not later than 30 days, after the 
Chief Acquisition Officer of the Coast Guard becomes 
aware of the breach of an acquisition program baseline 
for any Level 1 or Level 2 acquisition program, by— 
(1) a likely cost overrun greater than 10 per-
cent of the acquisition program baseline for that in-
dividual capability or asset or a class of capabilities 
or assets; 
(2) a likely delay of more than 180 days in the 
delivery schedule for any individual capability or 
asset or class of capabilities or assets; or 
(3) an anticipated failure for any individual ca-
pability or asset or class of capabilities or assets to 
satisfy any key performance threshold or parameter 
under the acquisition program baseline. 
(b) CONTENT.—The report submitted under sub-
section (a) shall include— 
(1) a detailed description of the breach and an 
explanation of its cause; 
(2) the projected impact to performance, cost, 
and schedule; 
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
(3) an updated acquisition program baseline 
and the complete history of changes to the original 
acquisition program baseline; 
(4) the updated acquisition schedule and the 
complete history of changes to the original schedule; 
(5) a full life-cycle cost analysis for the capa-
bility or asset or class of capabilities or assets; 
(6) a remediation plan identifying corrective ac-
tions and any resulting issues or risks; and 
(7) a description of how progress in the remedi-
ation plan will be measured and monitored. 
(c) SUBSTANTIAL VARIANCES IN COSTS OR SCHED-
ULE.—If a likely cost overrun is greater than 20 percent 
or a likely delay is greater than 12 months from the costs 
and schedule described in the acquisition program baseline 
for any Level 1 or Level 2 acquisition program or project 
of the Coast Guard, the Commandant shall include in the 
report a written certification, with a supporting expla-
nation, that— 
(1) the capability or asset or capability or asset 
class to be acquired under the program or project is 
essential to the accomplishment of Coast Guard mis-
sions; 
(2) there are no alternatives to such capability 
or asset or capability or asset class which will pro-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
vide equal or greater capability in both a more cost- 
effective and timely manner; 
(3) the new acquisition schedule and estimates 
for total acquisition cost are reasonable; and 
(4) the management structure for the acquisi-
tion program is adequate to manage and control per-
formance, cost, and schedule. 
SEC. 211. REPORT ON FORMER COAST GUARD OFFICIALS 
EMPLOYED BY CONTRACTORS TO THE AGEN-
CY. 
(a) REPORT REQUIRED.—Not later than December 
31, 2009, and annually thereafter, the Comptroller Gen-
eral of the United States shall submit a report to the ap-
propriate congressional committees on the employment 
during the preceding year by Coast Guard contractors of 
individuals who were Coast Guard officials in the previous 
5-year period. The report shall assess the extent to which 
former Coast Guard officials were provided compensation 
by Coast Guard contractors in the preceding calendar 
year. 
(b) OBJECTIVES OF REPORT.—At a minimum, the 
report required by this section shall assess the extent to 
which former Coast Guard officials who receive compensa-
tion from Coast Guard contractors have been assigned by 
those contractors to work on contracts or programs be-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
tween the contractor and the Coast Guard, including con-
tracts or programs for which the former official personally 
had oversight responsibility or decision-making authority 
when they served in or worked for the Coast Guard. 
(c) CONFIDENTIALITY REQUIREMENT.—The report 
required by this subsection shall not include the names 
of the former Coast Guard officials who receive compensa-
tion from Coast Guard contractors. 
(d) ACCESS TO INFORMATION.—A Coast Guard con-
tractor shall provide the Comptroller General access to in-
formation requested by the Comptroller General for the 
purpose of conducting the study required by this section. 
(e) DEFINITIONS.—In this section: 
(1) COAST
GUARD
CONTRACTOR.—The term 
‘‘Coast Guard contractor’’ includes any person that 
received at least $10,000,000 in contractor awards 
from the Coast Guard in the calendar year covered 
by the annual report. 
(2) COAST GUARD OFFICIAL.—The term ‘‘Coast 
Guard official’’ includes former officers of the Coast 
Guard who were compensated at a rate of pay for 
grade O–7 or above during the calendar year prior 
to the date on which they separated from the Coast 
Guard, and former civilian employees of the Coast 
Guard who served at any level of the Senior Execu-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS
HR 1665 RFS 
tive Service under subchapter VIII of chapter 53 of 
title 5, United States Code, during the calendar year 
prior to the date on which they separated from the 
Coast Guard. 
SEC. 212. DEPARTMENT OF DEFENSE CONSULTATION. 
(a) IN GENERAL.—The Commandant shall make ar-
rangements as appropriate with the Secretary of Defense 
for support in contracting and management of Coast 
Guard acquisition programs. The Commandant shall also 
seek opportunities to make use of Department of Defense 
contracts, and contracts of other appropriate agencies, to 
obtain the best possible price for capabilities and assets 
acquired for the Coast Guard. 
(b) INTER-SERVICE TECHNICAL ASSISTANCE.—The 
Commandant may enter into a memorandum of under-
standing or a memorandum of agreement with the Sec-
retary of the Navy to obtain the assistance of the Office 
of the Assistant Secretary of the Navy for Research, De-
velopment, and Acquisition, including the Navy Systems 
Commands, with the oversight of Coast Guard major ac-
quisition programs. Such memorandum of understanding 
or memorandum of agreement shall, at a minimum, pro-
vide for— 
(1) the exchange of technical assistance and 
support that the Coast Guard Chief Acquisition Offi-
VerDate Nov 24 2008 
08:13 Jul 31, 2009
Jkt 079200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H1665.RFS
H1665
erowe on DSKG8SOYB1PROD with BILLS