[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3586 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3586

  To amend laws relating to defense acquisition, including provisions 
  relating to the formation of contracts, contract administration and 
major system management, procurement of information management systems 
  and commercial activity contracting, the small purchase threshold, 
 intellectual property rights, defense trade and cooperation, and the 
                    acquisition of commercial items.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 20, 1993

 Mr. Bilbray introduced the following bill; which was referred jointly 
 to the Committees on Armed Services, Government Operations, and Small 
                                Business

_______________________________________________________________________

                                 A BILL


 
  To amend laws relating to defense acquisition, including provisions 
  relating to the formation of contracts, contract administration and 
major system management, procurement of information management systems 
  and commercial activity contracting, the small purchase threshold, 
 intellectual property rights, defense trade and cooperation, and the 
                    acquisition of commercial items.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Defense Acquisition Reform Act of 
1993''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

                      TITLE I--CONTRACT FORMATION

    Subtitle A--Congressional Policy, Definitions, and Applicability

Sec. 101. Congressional defense procurement policy.
Sec. 102. Definitions.
                    Subtitle B--Competitive Statutes

Sec. 111. Contracts: planning, solicitation, evaluation, and award 
                            procedures.
Sec. 112. Kinds of contracts.
Sec. 113. Encouragement of competition and cost savings.
Sec. 114. Advocates for competition.
Sec. 115. Preference for nondevelopmental items.
                 Subtitle C--Truth in Negotiations Act

Sec. 121. Stabilization of dollar threshold of applicability.
Sec. 122. Exceptions to cost or pricing data requirements.
Sec. 123. Limitation on authority to require a submission not otherwise 
                            required.
Sec. 124. Additional special rules for commercial items.
Sec. 125. Right of United States to examine contractor records.
Sec. 126. Required regulations.
Sec. 127. Consistency of time references.
Sec. 128. Repeal of superseded provision.
                  Subtitle D--Research and Development

Sec. 131. Delegation of contracting authority.
Sec. 132. Research projects.
Sec. 133. Awards of grants and contracts to colleges and universities: 
                            requirement of competition.
Sec. 134. Elimination of inflexible terminology regarding coordination 
                            and communication of defense research 
                            activities.
Sec. 135. Cooperative agreements and other transactions.
Sec. 136. Contracts for research.
                    Subtitle E--Procurement Protests

Sec. 141. Sense of Congress on single forum for review of contract 
                            protests.
Sec. 142. Review of protests; effect on contracts pending decision.
Sec. 143. Decisions on protests.
Sec. 144. Regulations; authority of Comptroller General to verify 
                            assertions.
Sec. 145. Nonexclusivity of remedies; matters included in agency 
                            record.
                   Subtitle F--Other Related Statutes

Sec. 151. Delegation.
Sec. 152. Determinations and decisions.
Sec. 153. Undefinitized contractual actions: restrictions.
Sec. 154. Production special tooling and production special test 
                            equipment: contract terms and conditions.
Sec. 155. Contracts: regulations for bids.
Sec. 156. Supplies: identification of supplier and sources.
                   TITLE II--CONTRACT ADMINISTRATION

Sec. 201. Contract payments.
Sec. 202. Cost principles.
Sec. 203. Consolidation and revision of authority to examine records of 
                            contractors.
Sec. 204. Administration of contract provisions relating to price, 
                            delivery, and product quality.
           TITLE III--MAJOR SYSTEMS AND COMMERCIAL ACTIVITIES

                       Subtitle A--Major Systems

Sec. 301. Selected acquisition reports; unit cost reports.
Sec. 302. Unit cost reports.
Sec. 303. Independent cost estimates; operational manpower 
                            requirements.
Sec. 304. Enhanced program stability.
Sec. 305. Major programs: competitive prototyping.
Sec. 306. Major programs: competitive alternative sources.
                      Subtitle B--Testing Statutes

Sec. 311. Repeal of testing requirement for wheeled or tracked 
                            vehicles.
Sec. 312. Major systems and munitions programs: survivability and 
                            lethality testing.
Sec. 313. Operational test and evaluation of defense acquisition 
                            programs.
Sec. 314. Low-rate initial production of new systems.
          Subtitle C--DOD Commercial and Industrial Activities

Sec. 321. Factories and arsenals: manufacture at.
     Subtitle D--Industrial Base and Manufacturing Technology Laws

Sec. 331. Policy objectives relating to defense international trade.
                       Subtitle E--Miscellaneous

Sec. 341. Obligation of funds: limitation.
Sec. 342. Repeal of limitation on length of contracts.
   TITLE IV--SMALL PURCHASE PROCEDURES AND SMALL BUSINESS PROVISIONS

Sec. 401. Use of small purchase procedures for procurements conducted 
                            through Federal acquisition computer 
                            network system; implementation of system.
Sec. 402. Small business reservation.
Sec. 403. Exemptions for contracts not in excess of the small purchase 
                            threshold.
Sec. 404. Small business amendments.
Sec. 405. Notification of small business concerns in locality of 
                            procuring agency.
                     TITLE V--INTELLECTUAL PROPERTY

Sec. 501. Department of Defense acquisition of intellectural property 
                            rights.
                     TITLE VI--STANDARDS OF CONDUCT

                     Subtitle A--Ethics Provisions

Sec. 601. Amendments to Office of Federal Procurement Policy Act.
Sec. 602. Repeal of superseded and obsolete laws.
                   Subtitle B--Additional Amendments

Sec. 611. Contracting functions performed by Federal personnel.
Sec. 612. Repeal of executed requirement for study and report.
Sec. 613. Waiting period for significant changes proposed for 
                            acquisition regulations.
                TITLE VII--DEFENSE TRADE AND COOPERATION

Sec. 701. International cooperative agreements.
Sec. 702. Acquisition, cross-servicing agreements, and standardization.
                TITLE VIII--COMMERCIAL ITEM ACQUISITION

Sec. 801. Procurement of commercial and nondevelopmental items.
                        TITLE IX--EFFECTIVE DATE

Sec. 901. Effective date.

                      TITLE I--CONTRACT FORMATION

    Subtitle A--Congressional Policy, Definitions, and Applicability

SEC. 101. CONGRESSIONAL DEFENSE PROCUREMENT POLICY.

    Section 2301 of title 10, United States Code, is amended to read as 
follows:
``Sec. 2301. Congressional defense procurement policy
    ``(a) The Congress finds that in order to ensure national defense 
preparedness; conserve fiscal resources; enhance science and 
technology, research and development, and production capability; 
provide for continued development and preservation of an efficient and 
responsive defense industrial base; and ensure the financial and 
ethical integrity of defense procurement programs, it is in the 
interest of the United States that property and services be acquired 
for the Department of Defense in the most timely, economic, and 
efficient manner consistent with achieving an optimum balance among 
efficient processes, full and open access to the procurement system, 
and sound implementation of socioeconomic policies. It is therefore the 
policy of Congress that--
            ``(1) full and open competitive procedures shall be used by 
        the Department of Defense in accordance with the requirements 
        of this chapter;
            ``(2) to the maximum extent practicable, the Department of 
        Defense shall acquire commercial items to meet its needs and 
        shall require prime contractors and subcontractors, at all 
        levels, which furnish other than commercial items, to 
        incorporate to the maximum extent practicable commercial items 
        as components of items being supplied to the Department;
            ``(3) when commercial items and components are not 
        available, practicable, or cost effective, the Department of 
        Defense shall acquire, and shall require prime contractors and 
        subcontractors to incorporate, nondevelopmental items and 
        components to the maximum extent practicable;
            ``(4) property and services for the Department of Defense 
        may be acquired by any kind of contract, other than cost-plus-
        a-percentage-of-cost contracts, but including multiyear 
        contracts, that will promote the interest of the United States 
        and will provide for appropriate allocation of risk between the 
        Government and the contractor with due regard to the nature of 
        the property or services to be acquired;
            ``(5) contracts, when appropriate, shall provide incentives 
        to contractors to improve productivity through investment in 
        capital facilities, equipment, flexible manufacturing 
        processes, and advanced and dual-use technology;
            ``(6) contracts for advance procurement of components, 
        parts, and materials necessary for manufacture or for logistics 
        support of a weapon system should, if practicable, be entered 
        into in a manner to achieve economic-lot purchases and more 
        efficient production rates;
            ``(7) procurement protests and disputes be fairly and 
        expeditiously resolved through uniform interpretation of 
        relevant laws and regulations;
            ``(8) the head of an agency shall use advance procurement 
        planning and market research and develop contract requirements 
        in such a manner as is necessary to obtain full and open 
        competition with due regard to the nature of the property or 
        services to be acquired; but may restrict competitions to 
        suppliers of commercial items to foster accomplishment of the 
        above objective; and
            ``(9) the head of an agency shall develop and maintain an 
        acquisition career management program to ensure a professional 
        acquisition work force in accordance with the requirements of 
        chapter 87 of this title.
    ``(b) Further, it is the policy of Congress that procurement 
policies and procedures for the agencies named in section 2303 of this 
title shall, in accordance with the requirements of this title--
            ``(1) be issued in accordance with and conform to the 
        requirements of sections 22 and 25 of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 418b and 421);
            ``(2) promote and implement the Congressional policies in 
        subsection (a) of this section and section 2 of the Office of 
        Federal Procurement Policy Act (41 U.S.C. 401);
            ``(3) be implemented to support the requirements of such 
        agencies in time of war or national emergency as well as in 
        peacetime;
            ``(4) promote responsiveness of the procurement system to 
        agency needs by--
                    ``(A) simplifying and streamlining procurement 
                processes; and
                    ``(B) providing incentives to encourage contractors 
                to take actions and make recommendations that would 
                reduce the costs of property or services to be 
                acquired;
            ``(5) facilitate the acquisition of commercial items and 
        commercial components at or based on commercial market prices, 
        without requiring contractors to change their business 
        practices; and
            ``(6) promote the acquisition and use of commercial items, 
        commercial components, and nondevelopmental items by requiring 
        descriptions of agency requirements, whenever practicable, in 
        terms of functions to be performed or performance required.
    ``(c) Further, it is the policy of Congress that 20 percent of the 
purchases and contracts entered into under this chapter be placed with 
small business concerns.
    ``(d) It is also the policy of Congress that qualified nonprofit 
agencies for the blind or severely handicapped (as defined in section 
2410d(b) of this title) shall be afforded the maximum practicable 
opportunity to provide approved commodities and services (as defined in 
such section) as subcontractors and suppliers under contracts awarded 
by the Department of Defense.''.

SEC. 102. DEFINITIONS.

    Section 2302 of title 10, United States Code, is amended--
            (1) by striking out paragraph (3) and inserting in lieu 
        thereof the following:
            ``(3) The terms `procurement', `procurement system', 
        `standards', `full and open competition', `responsible source', 
        `technical data', and `major system' have the meanings provided 
        such terms by section 4 of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 403).'';
            (2) by striking out paragraph (4) and inserting in lieu 
        thereof the following:
            ``(4) The term `small purchase threshold' has the meaning 
        provided that term by section 4(11) of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 403(11)).'';
            (3) by striking out paragraph (5) and inserting in lieu 
        thereof the following:
            ``(5) The term `nondevelopmental item' means any item of 
        supply that is not a commercial item but which is--
                    ``(A) previously developed and in use by a 
                department or agency of the United States, a State or 
                local government, or a foreign government with which 
                the United States has a mutual defense cooperation 
                agreement;
                    ``(B) previously developed and requires only minor 
                modification in order to meet the requirements of the 
                procuring agency; or
                    ``(C) currently being produced but not yet in 
                use.''; and
            (4) by striking out paragraph (7) and inserting in lieu 
        thereof the following:
            ``(7)(A) The term `commercial item' means--
                    ``(i) property other than real property, or a 
                combination of such property and related incidental 
                services of the type customarily combined and sold, 
                leased, or licensed in combination, that--
                            ``(I) has been sold, leased, or licensed to 
                        the general public;
                            ``(II) has not been sold, leased, or 
                        licensed to the general public, but has been 
                        offered for sale, lease, or license to the 
                        general public; or
                            ``(III) is not yet available in the 
                        commercial marketplace, but will be available 
                        for commercial delivery in a reasonable period 
                        of time; and
                    ``(ii) services used to support property and 
                combinations of property and services described in 
                clause (i), whether such services are procured with the 
                property or combination of property and services or 
                under separate contract, if such services are or will 
                be offered contemporaneously to the general public 
                under similar terms and conditions.
            ``(B) With respect to a specific solicitation, an item 
        meeting the criteria set forth in subparagraph (A) if 
        unmodified will be deemed to be a commercial item when modified 
        for sale to the Government if the modifications required to 
        meet Government requirements--
                    ``(i) are modifications of the type customarily 
                provided in the commercial marketplace; or
                    ``(ii) would not significantly alter the 
                nongovernmental function or purpose of the item in 
                order to meet the requirements or specifications of the 
                procuring agency.''.

                    Subtitle B--Competitive Statutes

SEC. 111. CONTRACTS: PLANNING, SOLICITATION, EVALUATION, AND AWARD 
              PROCEDURES.

    Section 2305 of title 10, United States Code, is amended--
            (1) in subsection (a)(2), by striking out ``(other than for 
        small purchases)'' in the first sentence and inserting in lieu 
        thereof ``(estimated to be in excess of the small purchase 
        threshold)'';
            (2) in subsection (a), by redesignating paragraph (3) as 
        paragraph (4);
            (3) in subsection (a), by adding after paragraph (2) the 
        following new paragraph (3):
    ``(3) The head of an agency, in issuing a solicitation for a 
contract to be awarded using sealed bid procedures, shall not include 
in such solicitation a clause providing for the evaluation of prices 
under the contract for options to purchase additional supplies or 
services under the contract unless the head of the agency has 
determined that there is a reasonable likelihood that the options will 
be exercised.'';
            (4) by adding at the end of subsection (b)(4)(B) the 
        following: ``The regulations implementing this chapter shall--
            ``(i) establish the criteria for determining whether an 
        unsuccessful offeror is entitled to a debriefing;
            ``(ii) provide that any required debriefing shall be 
        conducted to the maximum extent practicable within 15 calendar 
        days after the date of award; and
            ``(iii) provide that any required debriefing contain 
        information on the strengths and weaknesses of that offeror's 
        proposal.''; and
            (5) in subsection (b), by redesignating paragraph (5) as 
        paragraph (7) and inserting after paragraph (4) the following 
        new paragraphs:
    ``(5) Where a protest is filed pursuant to the procedures in 
subchapter V of chapter 35 of title 31, United States Code (31 U.S.C. 
3551 et seq.) and where an actual or prospective offeror so requests, a 
file of the protest shall be established by the contracting activity 
and reasonable access shall be provided to actual or prospective 
offerors. This file should contain such information as would ordinarily 
be releasable under the section 552 of title 5, United States Code 
(commonly referred to as the `Freedom of Information Act').
    ``(6) If a protest is filed and if the head of the agency 
determines that a solicitation, proposed award, or award does not 
comply with a statute or regulation, the head of the agency may take 
any action which the agency is authorized to take under subparagraphs 
(A) through (F) of section 3554(b)(1) of title 31, United States 
Code.''.

SEC. 112. KINDS OF CONTRACTS.

    Section 2306 of title 10, United States Code, is amended--
            (1) by striking out the first sentence of subsection (b) 
        and inserting in lieu thereof the following: ``Each contract in 
        an amount in excess of the small purchase threshold awarded 
        under this chapter after using noncompetitive procedures shall 
        contain a warranty that the contractor has employed or retained 
        no person or selling agency to solicit or obtain the contract 
        under an understanding or agreement for a commission, 
        percentage, brokerage, or contingent fee, except a bona fide 
        employee or established commercial or selling agency maintained 
        by the contractor to obtain business.'';
            (2) by striking out subsections (c), (d), and (f);
            (3) by redesignating subsection (e) as subsection (c); and
            (4) by redesignating subsections (g) and (h) as subsections 
        (d) and (e), respectively.

SEC. 113. ENCOURAGEMENT OF COMPETITION AND COST SAVINGS.

    (a) Repeal.--Section 2317 of title 10, United States Code, is 
hereby repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 137 of such title is amended by striking out the item relating 
to section 2317.

SEC. 114. ADVOCATES FOR COMPETITION.

    Section 2318 of title 10, United States Code, is amended by 
striking out subsection (c).

SEC. 115. PREFERENCE FOR NONDEVELOPMENTAL ITEMS.

    (a) Repeal.--Section 2325 of title 10, United States Code, is 
hereby repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 137 of such title is amended by striking out the item relating 
to section 2325.

                 Subtitle C--Truth in Negotiations Act

SEC. 121. STABILIZATION OF DOLLAR THRESHOLD OF APPLICABILITY.

    Section 2306a(a)(1)(A) of title 10, United States Code, is 
amended--
            (1) in clause (i), by striking out ``and before January 1, 
        1996,''; and
            (2) in clause (ii), by striking out ``or after December 31, 
        1995,''.

SEC. 122. EXCEPTIONS TO COST OR PRICING DATA REQUIREMENTS.

    Section 2306a(b) of title 10, United States Code, is amended to 
read as follows:
    ``(b) Exceptions.--(1) This section need not be applied to a 
contract or subcontract--
            ``(A) for which the price agreed upon is based on--
                    ``(i) adequate price competition;
                    ``(ii) established catalog or market prices of 
                commercial items or of services regularly used for 
                other than Government purposes, as the case may be, 
                that are sold in substantial quantities to the general 
                public; or
                    ``(iii) prices set by law or regulation; or
            ``(B) in an exceptional case when the head of the agency 
        determines that the requirements of this section may be waived 
        and states in writing the reasons for such determination.
    ``(2) This section need not be applied to a modification of a 
contract or subcontract if--
            ``(A) the contract or subcontract being modified is one to 
        which this section need not be applied by reason of clause (i) 
        or (ii) of paragraph (1)(A); and
            ``(B) the modification would not change the contract or 
        subcontract, as the case may be, from a contract or subcontract 
        for the acquisition of a commercial item to a contract or 
        subcontract for the acquisition of a noncommercial item.''.

SEC. 123. LIMITATION ON AUTHORITY TO REQUIRE A SUBMISSION NOT OTHERWISE 
              REQUIRED.

    Section 2306a(c) of title 10, United States Code, is amended by 
striking out ``by subsection (a), such data may nevertheless be 
required to be submitted by the head of the agency if'' and inserting 
in lieu thereof ``by reason of subsection (b), submission of such data 
may not be required unless''.

SEC. 124. ADDITIONAL SPECIAL RULES FOR COMMERCIAL ITEMS.

    Section 2306a of title 10, United States Code, is amended--
            (1) by redesignating subsections (d), (e), (f), and (g) as 
        subsections (e), (f), (g), and (i), respectively; and
            (2) by inserting after subsection (c) the following new 
        subsection (d):
    ``(d) Additional Exception Regarding Commercial Items.--(1) To the 
maximum extent practicable, the head of an agency shall--
            ``(A) conduct procurements of commercial items on a 
        competitive basis; and
            ``(B) exercise the authority provided in subsection 
        (b)(1)(A) to exempt the contracts and subcontracts under such 
        procurements from the requirements of subsection (a).
    ``(2) In any case in which it is not practicable to conduct a 
procurement of a commercial item on a competitive basis and the 
procurement is not covered by an exception in subsection (b), the 
contracting officer shall nonetheless exempt a contract or subcontract 
under the procurement from the requirements of subsection (a) if--
            ``(A) in accordance with regulations implementing this 
        paragraph, the offeror, contractor, or subcontractor, as the 
        case may be, provides the contracting officer with information 
        on the price charged by such offeror, contractor, or 
        subcontractor for the same or similar products in the 
        commercial marketplace; and
            ``(B) the contracting officer determines in writing that 
        the information provided is adequate for evaluating the 
        reasonableness of the price of the contract or subcontract.
    ``(3)(A) The Government shall be entitled to a reduction in price 
and the return of any overpayment, with interest, if an offeror, 
contractor, or subcontractor provides materially inaccurate or 
misleading information to the contracting officer pursuant to paragraph 
(2).
    ``(B) Nothing in subparagraph (A) is intended to preclude the head 
of an agency from negotiating any contract clause that provides 
additional price adjustment authority for the protection of the 
Government's interest in specific types of contracts, including 
multiple ordering agreements.
    ``(4)(A) The head of an agency shall have the right to examine all 
information provided by an offeror, contractor, or subcontractor 
pursuant to paragraph (2) and all books and records of such offeror, 
contractor, or subcontractor that directly relate to the information 
provided in order to determine whether such information is materially 
inaccurate or misleading.
    ``(B) The right under subparagraph (A) shall expire 1 year after 
the date of award of the contract, or 1 year after the date of the 
modification of the contract, with respect to which the information was 
provided.''.

SEC. 125. RIGHT OF UNITED STATES TO EXAMINE CONTRACTOR RECORDS.

    Section 2306a of title 10, United States Code, is amended by 
striking out subsection (g), as redesignated by section 124(1), and 
inserting in lieu thereof the following:
    ``(g) Right of United States To Examine Contractor Records.--For 
the purpose of evaluating the accuracy, completeness, and currency of 
cost or pricing data required to be submitted by this section, the head 
of an agency shall have the rights provided by section 2313 of this 
title.''.

SEC. 126. REQUIRED REGULATIONS.

    Section 2306a of title 10, United States Code, as amended by 
sections 124 and 125, is further amended by inserting after subsection 
(g) the following new subsection:
    ``(h) Required Regulations.--(1) The Secretary of Defense shall 
prescribe regulations identifying the type of procurements for which 
contracting officers should consider requiring the submission of 
certified cost or pricing data under this section.
    ``(2) The Secretary also shall prescribe regulations concerning the 
types of information that offerors must submit for a contracting 
officer to consider in determining whether the price of a procurement 
to the Government is fair and reasonable when certified cost or pricing 
data are not required to be submitted under this section because the 
price of the procurement to the United States is not expected to exceed 
$500,000. Such information, at a minimum, shall include appropriate 
information on the prices at which such offeror has previously sold the 
same or similar products.''.

SEC. 127. CONSISTENCY OF TIME REFERENCES.

    Section 2306a of title 10, United States Code, as amended by 
sections 124, 125, and 126, is further amended--
            (1) in subparagraphs (A)(ii) and (B)(ii) of subsection 
        (e)(4), by inserting ``or, if applicable consistent with 
        paragraph (1)(B), another date agreed upon between the 
        parties'' after ``(or price of the modification)''; and
            (2) in subsection (i), by inserting ``or, if applicable 
        consistent with subsection (d)(1)(B), another date agreed upon 
        between the parties'' after ``(or the price of a contract 
        modification)''.

SEC. 128. REPEAL OF SUPERSEDED PROVISION.

    Subsection (c) of section 803 of Public Law 101-510 (10 U.S.C. 
2306a note) is repealed.

                  Subtitle D--Research and Development

SEC. 131. DELEGATION OF CONTRACTING AUTHORITY.

    Section 2356 of title 10, United States Code, is amended to read as 
follows:
``Sec. 2356. Contracts: delegations
    ``(a) Authority.--The Secretary of a military department may 
delegate any authority under section 1584, 2353, or 2354 of this title 
to--
            ``(1) the Under Secretary of his department;
            ``(2) an Assistant Secretary of his department;
            ``(3) a Deputy Assistant Secretary of his department; or
            ``(4) except as provided in subsection (b), the chief, and 
        one assistant to the chief, of any technical service, bureau, 
        or office.
    ``(b) Limitation.--The authority of the Secretary of a military 
department under section 2353(b)(3) of this title may not be delegated 
to a person described in subsection (a)(4).''.

SEC. 132. RESEARCH PROJECTS.

    (a) Authority To Conduct Basic, Advanced, and Applied Research.--
Section 2358 of title 10, United States Code, is amended to read as 
follows:
``Sec. 2358. Research projects
    ``(a) Authority.--The Secretary of Defense or the Secretary of a 
military department may engage in basic, advanced, and applied research 
and development projects that--
            ``(1) are necessary to the responsibilities of such 
        Secretary's department in the field of basic, advanced, and 
        applied research and development; and
            ``(2) either--
                    ``(A) relate to weapons systems and other military 
                needs; or
                    ``(B) are of potential interest to such department.
    ``(b) Authorized Means.--The Secretary of Defense or the Secretary 
of a military department may perform research and development 
projects--
            ``(1) by contract, cooperative agreement, or other 
        transaction with, or by grant to, educational or research 
        institutions, private businesses, or other agencies of the 
        United States;
            ``(2) by using employees and consultants of the Department 
        of Defense; or
            ``(3) through one or more of the military departments.
    ``(c) Requirement of Potential Military Interest.--Funds 
appropriated to the Department of Defense or to a military department 
may not be used to finance any research project or study unless the 
project or study is, in the opinion of the Secretary of Defense or the 
Secretary of that military department, respectively, of potential 
interest to the Department of Defense or to such military department, 
respectively.''.
    (b) Authority Related to Advanced Research Projects.--
            (1) Repeal of redundant authority.--Section 2371 of such 
        title is amended--
                    (A) by striking out subsection (a);
                    (B) by redesignating subsections (b), (c), (d), 
                (e), (f), and (g) as subsections (a), (b), (c), (d), 
                (e), and (f), respectively;
                    (C) in subsection (a), as redesignated by 
                subparagraph (B)--
                            (i) in paragraph (1), by striking out 
                        ``subsection (a)'' and inserting in lieu 
                        thereof ``section 2358 of this title''; and
                            (ii) in paragraph (2), by striking out 
                        ``subsection (e)'' and inserting in lieu 
                        thereof ``subsection (d)'';
                    (D) in subsection (d), as redesignated by 
                subparagraph (B), by striking out ``subsection (a)'' 
                and inserting in lieu thereof ``section 2358 of this 
                title''; and
                    (E) in subsection (e), as redesignated by 
                subparagraph (B)--
                            (i) in paragraph (4), by striking out 
                        ``subsection (b)'' and inserting in lieu 
                        thereof ``subsection (a)''; and
                            (ii) in paragraph (5), by striking out 
                        ``subsection (e)'' and inserting in lieu 
                        thereof ``subsection (d)''.
            (2) Consistency of terminology.--Such section, as amended 
        by paragraph (1), is further amended--
                    (A) in subsection (c)(1), by inserting ``and 
                development'' after ``research'' both places it 
                appears;
                    (B) in subsections (d) and (e)(3), by striking out 
                ``advanced research'' and inserting in lieu thereof 
                ``research and development''; and
                    (C) in subsection (e)(1), by striking out 
                ``advanced research is'' and inserting in lieu thereof 
                ``research and development are''.
    (c) Redundant and Obsolete Authority for the Army.--
            (1) Repeal.--Section 4503 of title 10, United States Code, 
        is repealed.
            (2) Technical amendment.--The table of sections at the 
        beginning of chapter 431 of such title is amended by striking 
        out the item relating to section 4503.
    (d) Redundant and Obsolete Authority for the Air Force.--
            (1) Repeal.--Section 9503 of title 10, United States Code, 
        is repealed.
            (2) Technical amendment.--The table of sections at the 
        beginning of chapter 931 of such title is amended by striking 
        out the item relating to section 9503.

SEC. 133. AWARDS OF GRANTS AND CONTRACTS TO COLLEGES AND UNIVERSITIES: 
              REQUIREMENT OF COMPETITION.

    (a) Repeal.--Subsection (c) of section 2361 of title 10, United 
States Code, is repealed.
    (b) Amendment.--Section 2361 of title 10, United States Code, is 
amended by inserting ``or nonprofit organization other than a federally 
funded research and development center (FFRDC)'' after ``college or 
university'' in each place it appears in subsections (a) and (b).

SEC. 134. ELIMINATION OF INFLEXIBLE TERMINOLOGY REGARDING COORDINATION 
              AND COMMUNICATION OF DEFENSE RESEARCH ACTIVITIES.

    Section 2364 of title 10, United States Code, is amended--
            (1) in subsection (b)(5), by striking out ``milestone 0, 
        milestone I, and milestone II decisions'' and inserting in lieu 
        thereof ``acquisition program decisions''; and
            (2) in subsection (c), by striking out paragraphs (2), (3), 
        and (4) and inserting in lieu thereof the following:
            ``(2) The term `acquisition program decisions' has the 
        meaning given such term in regulations prescribed by the 
        Secretary of Defense for the purposes of this section.''.

SEC. 135. COOPERATIVE AGREEMENTS AND OTHER TRANSACTIONS.

    (a) Nonprocurement Agreements.--Section 2371 of title 10, United 
States Code, is amended as follows:
            (1) Subsection (a) is amended by striking out ``cooperative 
        agreements and other transactions'' and inserting in lieu 
        thereof ``nonprocurement agreements''.
            (2) Subsection (b)(1) is amended by striking out 
        ``Cooperative agreements and other transactions'' and inserting 
        in lieu thereof ``Nonprocurement agreements''.
            (3) Subsection (d) is amended by striking out ``cooperative 
        agreement or other transaction'' each place it appears and 
        inserting in lieu thereof ``nonprocurement agreement''.
            (4) Subsection (e) is amended by striking out ``cooperative 
        agreements and other transactions'' and inserting in lieu 
        thereof ``nonprocurement agreements''.
            (5) Subsection (f) is amended--
                    (A) in the matter before paragraph (1)--
                            (i) by striking out ``cooperative 
                        agreements and other transactions (other than 
                        contracts and grants)'' and inserting in lieu 
                        thereof ``nonprocurement agreements''; and
                            (ii) by striking out ``cooperative 
                        agreement and transaction'' and inserting in 
                        lieu thereof ``nonprocurement agreement'';
                    (B) in paragraph (1)--
                            (i) by striking out ``cooperative agreement 
                        or other transaction (as the case may be)'' and 
                        inserting in lieu thereof ``nonprocurement 
                        agreement''; and
                            (ii) by striking out ``agreement or 
                        transaction.'' and inserting in lieu thereof 
                        ``agreement.''; and
                    (C) in paragraph (4), by striking out ``cooperative 
                agreement or other transaction'' and inserting in lieu 
                thereof ``nonprocurement agreement''.
    (b) Definition.--Section 2371 of such title is further amended by 
adding at the end the following new subsection:
    ``(h) Definition.--In this section, the term `nonprocurement 
agreement' means an agreement other than--
            ``(1) a procurement contract, grant, or cooperative 
        agreement, as those terms are used in sections 6301 through 
        6308 of title 31; and
            ``(2) a cooperative research and development agreement 
        (CRDA), as defined in section 12 of the Stevenson-Wydler 
        Technology Innovation Act of 1980 (15 U.S.C. 3710a).''.
    (c) Other Defense Research and Development Agencies.--Subsections 
(a) and (g) of section 2371 of such title are each amended by inserting 
``and other defense research and development agencies'' after ``Defense 
Advanced Research Projects Agency''.
    (d) Section Heading Amendment.--(1) The heading of section 2371 of 
such title is amended to read as follows:
``Sec. 2371. Advanced research projects: nonprocurement agreements''.
    (2) The table of sections at the beginning of chapter 139 of such 
title is amended by striking out the item relating to section 2371 and 
inserting in lieu thereof the following:

``2371. Advanced research projects: nonprocurement agreements.''.

SEC. 136. CONTRACTS FOR RESEARCH.

    (a) Repeal.--Section 7522 of title 10, United States Code, is 
hereby repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 645 of such title is amended by striking out the item related 
to section 7522.

                    Subtitle E--Procurement Protests

SEC. 141. SENSE OF CONGRESS ON SINGLE FORUM FOR REVIEW OF CONTRACT 
              PROTESTS.

    It is the sense of Congress that there should be a single forum, in 
the Office of the Comptroller General in the General Accounting Office, 
to review government contracting protests.

SEC. 142. REVIEW OF PROTESTS; EFFECT ON CONTRACTS PENDING DECISION.

    Section 3553 of title 31, United States Code, is amended--
            (1) in subsection (b)(1), by striking out ``working day'' 
        and inserting in lieu thereof ``calender day from the date'';
            (2) in subsection (b)(2)(A), by striking out ``25 working 
        days'' and inserting in lieu thereof ``25 calender days'';
            (3) in subsection (b)(2)(C), by striking out ``10 working 
        days'' and inserting in lieu thereof ``25 calendar days'';
            (4) by striking out ``days thereafter'' in subsection 
        (c)(3) and inserting in lieu thereof ``calender days from the 
        date of the finding'';
            (5) by striking out paragraph (1) of subsection (d) and 
        inserting in lieu thereof the following:
            ``(1) If a Federal agency receives notice of a protest 
        under this section after the contract has been awarded but (A) 
        within 10 calendar days after the date of the contract award, 
        or (B) within five calendar days from the debriefing date 
        offered to an unsuccessful offeror for any requested and 
        required debriefing (provided that the unsuccessful offeror 
        requested the debriefing in writing within three calendar days 
        after the contract award), whichever is later, the Federal 
        agency (except as provided under paragraph (2)) shall, upon 
        receipt of that notice, immediately direct the contractor to 
        cease performance under the contract and to suspend any related 
        activities that may result in additional obligations being 
        incurred by the United States under that contract. Performance 
        of the contract may not be resumed while the protest is 
        pending.''; and
            (6) by striking out subsection (f) and inserting in lieu 
        thereof the following:
    ``(f)(1) Within such deadlines as the Comptroller General 
prescribes and subject to any order made under paragraph (2), upon 
request each Federal agency shall provide to an interested party any 
document relevant to a protested procurement action (including the 
report required by subsection (b)(2)) that would not give that party a 
competitive advantage and that the party is otherwise authorized by law 
to receive.
    ``(2) The Comptroller General, under the procedures established 
pursuant to section 3555 of this title, may make an appropriate 
protective order specifying that, notwithstanding any other provision 
of law--
            ``(A) access to documents or information, including any 
        Federal agency documents or information, may be had on specific 
        terms and conditions;
            ``(B) procurement sensitive, trade secret, or other 
        proprietary and confidential research, development, or 
        commercial information may not be disclosed or may be disclosed 
        only in a designated way; and
            ``(C) any hearing shall be conducted with no one present 
        except persons designated by the Comptroller General.''.

SEC. 143. DECISIONS ON PROTESTS.

    Section 3554 of title 31, United States Code, is amended--
            (1) in subsection (a)(1), by striking out ``90 working'' 
        and inserting in lieu thereof ``120 calendar'';
            (2) in subsection (a)(2), by striking out ``45'' and 
        inserting in lieu thereof ``60 calendar'';
            (3) in subsection (a), by redesignating paragraph (3) as 
        paragraph (4) and inserting after paragraph (2) the following 
        new paragraph (3):
            ``(3) Amendments to protests which add new grounds of 
        protest should be resolved, to the maximum extent practicable, 
        within the time limits established under paragraph (1) of this 
        subsection for the initial protest. If amended protests cannot 
        be resolved within such time limit, the Comptroller General may 
        resolve the amended protest through the express option under 
        paragraph (2) of this subsection.'';
            (4) by adding at the end of subsection (a) the following 
        new paragraph:
            ``(5) If the Comptroller General expressly finds that a 
        protest or a portion of a protest is frivolous or has not been 
        brought or pursued in good faith, the protester or other 
        interested party who joins the protest shall be liable to the 
        United States for payment of, and the Comptroller General shall 
        order the protester or other interested party to pay, all or 
        that portion of the United States costs, for which such a 
        finding is made, of reviewing the protest, including the fees 
        and other expenses (as defined in section 2412(d)(2)(A) of 
        title 28) incurred by the United States in defending the 
        protest, unless (1) special circumstances would make such 
        payment unjust, or (2) the protester obtains documents or other 
        information for the first time, after the protest is filed with 
        the Comptroller General, that establishes that the protest or a 
        portion of the protest is frivolous or has not been brought in 
        good faith, and the protester then promptly withdraws the 
        protest or portion of the protest.'';
            (5) in subsection (c)(1)(A) by adding ``and consultant and 
        expert witness fees'' after ``attorneys' fees''; and
            (6) in subsection (e)(2) by adding at the end the 
        following: ``The report shall also describe each instance where 
        a final decision was not rendered within 120 calendar days.''.

SEC. 144. REGULATIONS; AUTHORITY OF COMPTROLLER GENERAL TO VERIFY 
              ASSERTIONS.

    Section 3555 of title 31, United States Code, is amended to read as 
follows:
``Sec. 3555. Regulations; authority of Comptroller General to verify 
              assertions
    ``(a) The Comptroller General shall prescribe such procedures as 
may be necessary to the expeditious decision of protests under this 
subchapter, including procedures for accelerated resolution of protests 
under the express option authorized by section 3554(a)(2) of this 
title. Such procedures shall provide that the protest process may not 
be delayed by the failure of a party to make a filing within the time 
provided for the filing.
    ``(b) In computing any period of time prescribed or allowed by this 
subchapter, the procedures shall provide that the day of the act, 
event, or default from which the designated period of time begins to 
run shall not be included. The last day of the period so computed shall 
be included, unless it is a Saturday, a Sunday, or a legal holiday, or, 
when the act to be done is the filing of a paper at the General 
Accounting Office or a Federal agency, a day on which weather or other 
conditions have made the General Accounting Office or Federal agency 
inaccessible, in which event the period runs until the end of the next 
day that is not one of the previously mentioned days.
    ``(c) The procedures may provide for electronic filing and 
dissemination of documents and information required under this 
subchapter and in so providing shall consider the ability of all 
parties to achieve electronic access to such documents and records.
    ``(d) The procedures shall address the implementation of the 
provisions for payment of costs under section 3554(f), including the 
composition, proof, and calculation of such costs, the special 
circumstances that make such payment unjust, and what constitutes 
prompt withdrawal of the protest.
    ``(e) The Comptroller General may use any authority available under 
Chapter 7 of this title and this chapter to verify assertions made by 
parties in protests under this subchapter.''.

SEC. 145. NONEXCLUSIVITY OF REMEDIES; MATTERS INCLUDED IN AGENCY 
              RECORD.

    The first sentence of section 3556 of title 31, United States Code, 
is amended to read as follows: ``This subchapter does not give the 
Comptroller General exclusive jurisdiction over protests, and nothing 
contained in this subchapter shall affect the right of any interested 
party to file a protest with the contracting agency or to file an 
action in the United States Court of Federal Claims.''.

                   Subtitle F--Other Related Statutes

SEC. 151. DELEGATION.

    (a) Amendment of Title 10.--Section 2311 of title 10, United States 
Code, is amended to read as follows:
``Sec. 2311. Delegation
    ``(a) Unless expressly prohibited by law, the head of an agency may 
delegate, subject to his direction, to any other officer or official of 
that agency, any power under this chapter.
    ``(b) To facilitate the procurement of property and services 
covered by this chapter by each agency named in section 2303 of this 
title for any other agency, and to facilitate joint procurement by 
those agencies--
            ``(1) the head of an agency may, within his agency, 
        delegate functions and assign responsibilities relating to 
        procurement;
            ``(2) the heads of two or more agencies may by agreement 
        delegate procurement functions and assign procurement 
        responsibilities from one agency to another of those agencies 
        or to an officer or civilian employee of another of those 
        agencies; and
            ``(3) the heads of two or more agencies may create joint or 
        combined offices to exercise procurement functions and 
        responsibilities.
    ``(c)(1) The Secretary of Defense shall prescribe regulations that 
prohibit each military department participating in a joint acquisition 
program approved by the Under Secretary of Defense for Acquisition from 
terminating or substantially reducing its participation in such program 
without the approval of the Under Secretary.
    ``(2) The regulations shall include the following provisions:
            ``(A) A requirement that, before any such termination or 
        substantial reduction in participation is approved, the 
        proposed termination or reduction be reviewed by the Joint 
        Requirements Oversight Council of the Department of Defense.
            ``(B) A provision that authorizes the Under Secretary of 
        Defense for Acquisition to require a military department 
        approved for termination or substantial reduction in 
        participation in a joint acquisition program to continue to 
        provide some or all of the funding necessary for the 
        acquisition program to be continued in an efficient manner.''.
    (b) Conforming Repeal.--(1) Section 2308 of title 10, United States 
Code, is repealed.
    (2) The table of sections at the beginning of chapter 137 of such 
title is amended by striking out the item related to section 2308.

SEC. 152. DETERMINATIONS AND DECISIONS.

    Section 2310 of title 10, United States Code, is amended to read as 
follows:
``Sec. 2310. Determinations and decisions
    ``Determinations and decisions required to be made under this 
chapter by the head of an agency may be made for an individual purchase 
or contract or for a class of purchases or contracts except when 
expressly prohibited under this title. Such determinations or decisions 
are final.''.

SEC. 153. UNDEFINITIZED CONTRACTUAL ACTIONS: RESTRICTIONS.

    Section 2326 of title 10, United States Code, is amended--
            (1) by striking out ``and Expenditures'' in the heading of 
        subsection (b);
            (2) by striking out ``or expended'' in subsection 
        (b)(1)(B);
            (3) by striking out ``expend'' in subsection (b)(2) and 
        inserting in lieu thereof ``obligate'';
            (4) by striking out ``expended'' and ``expend'' and 
        inserting in lieu thereof ``obligated'' and ``obligate'', 
        respectively, in subsection (b)(3);
            (5) by redesignating paragraph (4) in subsection (b) as 
        paragraph (5); and
            (6) by inserting after paragraph (3) in subsection (b) the 
        following new paragraph:
            ``(4) The provisions of this subsection may be waived if 
        the head of the agency determines that waiver is necessary in 
        support of contingency operations, as defined in section 
        101(a)(13) of this title, or is otherwise in the best interests 
        of the United States.''.

SEC. 154. PRODUCTION SPECIAL TOOLING AND PRODUCTION SPECIAL TEST 
              EQUIPMENT: CONTRACT TERMS AND CONDITIONS.

    (a) Repeal.--Section 2329 of title 10, United States Code, is 
hereby repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 137 of such title is amended by striking out the item related 
to section 2329.

SEC. 155. CONTRACTS: REGULATIONS FOR BIDS.

    Section 2381 of title 10, United States Code, is amended in 
subsection (a) by striking out ``The'' and inserting in lieu thereof 
``The Secretary of Defense or the''.

SEC. 156. SUPPLIES: IDENTIFICATION OF SUPPLIER AND SOURCES.

    Paragraph (2) of section 2384(b) of title 10, United States Code, 
is amended to read as follows:
            ``(2) Paragraph (1) does not apply to a contract that 
        requires the delivery of supplies that are commercial items, as 
        defined in section 2302(7) of this title.''.

                   TITLE II--CONTRACT ADMINISTRATION

SEC. 201. CONTRACT PAYMENTS.

    (a) Contract Financing.--(1) Subsection (a)(2) of section 2307 of 
title 10, United States Code, is amended by striking out ``bid'' before 
``solicitations''.
    (2) Subsection (c) of such section is amended by striking out the 
last sentence and inserting in lieu thereof the following: ``Such lien 
is paramount to all other liens and is effective on the date the first 
advance payment is made, regardless of whether the United States has 
notified the contractor of the lien or taken any other action.
    (3) Subsection (d) of such section is amended--
            (A) in the first sentence of paragraph (1)--
                    (i) by striking out ``The Secretary'' and inserting 
                in lieu thereof ``Except as provided in paragraph (4), 
                the Secretary''; and
                    (ii) by striking out ``commensurate with the work, 
                which meets standards of quality established under the 
                contract, that has been accomplished.'' and inserting 
                in lieu thereof ``commensurate with the work that has 
                been accomplished and that meets standards of quality 
                established under the contract.'';
            (B) by redesignating paragraph (3) as paragraph (4) and 
        amending such paragraph to read as follows:
    ``(4) This subsection does not apply to contracts awarded using 
simplified procedures.''; and
            (C) by inserting after paragraph (2) the following new 
        paragraph (3):
    ``(3) When payments have been made for work in progress, the United 
States shall take title to all work in progress properly allocable or 
chargeable to the contract. Title shall vest in the United States 
regardless of any prior or subsequently asserted security interest in 
the work in progress.''.
    (4) Such section is further amended by adding at the end the 
following new subsection:
    ``(f) For contracts made by the Department of the Navy, the 
Secretary of the Navy--
            ``(1) shall provide that the rate for progress payments on 
        any contract awarded by the Secretary for repair, maintenance, 
        or overhaul of a naval vessel shall be not less than--
                    ``(A) 95 percent, in the case of firms considered 
                to be small businesses; and
                    ``(B) 90 percent, in the case of all other firms; 
                and
            ``(2) may advance to private salvage companies such funds 
        as the Secretary considers necessary to provide for the 
        immediate financing of salvage operations, provided such 
        advances are made on terms the Secretary considers adequate for 
        the protection of the United States.''.
    (b) Repair or Maintenance of Naval Vessels: Progress Payments Under 
Certain Contracts.--Section 7312 of title 10, United States Code, is 
repealed. The table of sections at the beginning of chapter 633 of such 
title is amended by striking out the item related to section 7312.
    (c) Advance of Funds for Salvage Operations.--Section 7364 of title 
10, United States Code, is repealed. The table of sections at the 
beginning of chapter 637 of such title is amended by striking out the 
item related to section 7364.
    (d) Progress Payment for Work Done; Lien Based on Payment.--Section 
7521 of title 10, United States Code, is repealed. The table of 
sections at the beginning of chapter 645 of such title is amended by 
striking out the item related to section 7521.

SEC. 202. COST PRINCIPLES.

    (a) Allowable Costs.--Section 2324 of title 10, United States Code, 
is amended--
            (1) by striking out subsections (e), (f), (g), (i), and 
        (k);
            (2) by redesignating subsections (a), (b), (c), (d), (h), 
        (j), (l), and (m) as subsections (b), (c), (d), (e), (f), (g), 
        (h), and (i), respectively;
            (3) by inserting at the beginning of the section the 
        following new subsection:
    ``(a) For purposes of this section, the term `allowable cost' means 
a cost, whether it is direct or indirect, that the Department of 
Defense reimburses a contractor for carrying out a defense contract. In 
determining what constitutes a cost, the Department of Defense may use 
any generally accepted method of determining or estimating costs that 
is equitable and consistently applied. The allowability of costs shall 
be determined in accordance with the Federal Acquisition Regulation and 
the Department of Defense Supplement to the Federal Acquisition 
Regulation.''.
            (4) in subsection (c), as redesignated--
                    (A) by striking out ``subsection (a)'' in the first 
                paragraph and inserting in lieu thereof ``subsection 
                (b)''; and
                    (B) by striking out the period at the end of 
                paragraph (2) and inserting in lieu thereof ``, plus 
                interest to be computed as provided by paragraph 
                (1)(B).'';
            (5) in subsection (d), as redesignated, by striking out 
        ``subsection (b)'' and inserting in lieu thereof ``subsection 
        (c)'';
            (6) in subsection (e), as redesignated, by striking out 
        ``subsection (a) or (b)--'' and inserting in lieu thereof 
        ``subsection (b) or (c)--'';
            (7) in subsection (g), as redesignated, by striking out 
        ``United States Claims Court'' and inserting in lieu thereof 
        ``United States Court of Federal Claims''; and
            (8) in subsection (h), as redesignated--
                    (A) in paragraph (2), by striking out ``committees 
                named in paragraph (3)'' and inserting in lieu thereof 
                ``Committees on Armed Services and the Committees on 
                Appropriations of the Senate and the House of 
                Representatives'';
                    (B) by striking out ``in regulations prescribed 
                under subsection (e) or (f) or in any other regulations 
                of the Department of Defense''; and
                    (C) by striking out paragraph (3).
    (b) Contract Profit Controls During Emergency Periods.--Section 
2382 of title 10, United States Code, is repealed. The table of 
sections at the beginning of chapter 141 of such title is amended by 
striking out the item related to section 2382.
    (c) Travel Expenses of Government Contractors.--Section 24(a) of 
the Office of Federal Procurement Policy Act (41 U.S.C. 420) is amended 
by inserting after ``Under any contract'' the following: ``requiring 
the submission of cost or pricing data or the negotiation of final 
indirect costs''.

SEC. 203. CONSOLIDATION AND REVISION OF AUTHORITY TO EXAMINE RECORDS OF 
              CONTRACTORS.

    (a) Authority.--
            (1) In general.--Section 2313 of title 10, United States 
        Code, is amended to read as follows:
``Sec. 2313. Examination of records of contractor
    ``(a) Agency Authority.--The head of an agency, acting through an 
authorized representative--
            ``(1) is entitled to inspect the plant and audit the 
        records of--
                    ``(A) a contractor performing a cost-reimbursement, 
                incentive, time-and-materials, labor-hour, or price-
                redeterminable contract, or any combination of such 
                contracts, made by that agency under this chapter; and
                    ``(B) a subcontractor performing any subcontract 
                under such a contract or combination of contracts; and
            ``(2) shall, for the purpose of evaluating the accuracy, 
        completeness, and currency of cost or pricing data required to 
        be submitted pursuant to section 2306a of this title with 
        respect to a contract or subcontract, have the right to examine 
        all records of the contractor or subcontractor related to--
                    ``(A) the proposal for the contract or subcontract;
                    ``(B) the discussions conducted on the proposal; or
                    ``(C) pricing of the contract or subcontract.
    ``(b) Subpoena Power.--(1) The Director of the Defense Contract 
Audit Agency (or any successor agency) may require by subpoena the 
production of records of a contractor, access to which is provided to 
the Secretary of Defense by subsection (a).
    ``(2) Any such subpoena, in the case of contumacy or refusal to 
obey, shall be enforceable by order of an appropriate United States 
district court.
    ``(3) The authority provided by paragraph (1) may not be 
redelegated.
    ``(4) The Director (or any successor official) shall submit an 
annual report to the Secretary of Defense on the exercise of such 
authority during the preceding year and the reasons why such authority 
was exercised in any instance. The Secretary shall forward a copy of 
each such report to the Committees on Armed Services of the Senate and 
House of Representatives.
    ``(c) Comptroller General Authority.--(1) Except as provided in 
paragraph (2), each contract awarded after using procedures other than 
sealed bid procedures shall provide that the Comptroller General and 
his representatives are entitled to examine any records of the 
contractor, or any of its subcontractors, that directly pertain to, and 
involve transactions relating to, the contract or subcontract.
    ``(2) Paragraph (1) does not apply to a contract or subcontract 
with a foreign contractor or foreign subcontractor if the head of the 
agency concerned determines, with the concurrence of the Comptroller 
General or his designee, that the application of that paragraph to the 
contract or subcontract would not be in the public interest. However, 
the concurrence of the Comptroller General or his designee is not 
required--
            ``(A) where the contractor or subcontractor is a foreign 
        government or agency thereof or is precluded by the laws of the 
        country involved from making its records available for 
        examination; and
            ``(B) where the head of the agency determines, after taking 
        into account the price and availability of the property and 
        services from United States sources, that the public interest 
        would be best served by not applying paragraph (1).
    ``(d) Limitation.--The right of the head of an agency under 
subsection (a), and the right of the Comptroller General under 
subsection (c), with respect to a contract or subcontract shall expire 
three years after final payment under such contract or subcontract.
    ``(e) Inapplicability to Certain Contracts.--This section is 
inapplicable with respect to contracts for utility services at rates 
not exceeding those established to apply uniformly to the public, plus 
any applicable reasonable connection charge.
    ``(f) Records Defined.--In this section, the term `records' 
includes books, documents, accounting procedures and practices, and 
other data, regardless of type and regardless of whether such items are 
in written form, in the form of computer data, or in any other form.''.
            (2) Technical amendment.--The item relating to such section 
        in the table of sections at the beginning of chapter 137 of 
        title 10, United States Code, is amended to read as follows:

``2313. Examination of records of contractor.''.
    (b) Repeal of Superseded Provision.--
            (1) Repeal.--Section 2406 of title 10, United States Code, 
        is repealed.
            (2) Technical amendment.--The table of sections at the 
        beginning of chapter 141 of such title is amended by striking 
        out the item relating to section 2406.

SEC. 204. ADMINISTRATION OF CONTRACT PROVISIONS RELATING TO PRICE, 
              DELIVERY, AND PRODUCT QUALITY.

    (a) Repeal of Provision Relating to Contractor Guarantees on Major 
Weapon Systems.--Section 2403 of title 10, United States Code, is 
repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 141 of such title is amended by striking out the item related 
to section 2403.

           TITLE III--MAJOR SYSTEMS AND COMMERCIAL ACTIVITIES

                       Subtitle A--Major Systems

SEC. 301. SELECTED ACQUISITION REPORTS; UNIT COST REPORTS.

    (a) Amendment of Title 10.--Section 2432 of title 10, United States 
Code, is amended to read as follows:
``Sec. 2432. Selected Acquisition Reports; unit cost reports
    ``(a)(1) The Secretary of Defense shall submit to Congress at the 
end of each fiscal year quarter a report on current major defense 
acquisition programs. Except as provided in paragraphs (2) and (3), 
each such report shall include a status report on each defense 
acquisition program that at the end of such quarter is a major defense 
acquisition program. Reports under this section shall be known as 
Selected Acquisition Reports.
    ``(2) A status report on a major defense acquisition program need 
not be included in the Selected Acquisition Report for the second, 
third, or fourth quarter of a fiscal year if such a report was included 
in a previous Selected Acquisition Report for that fiscal year and 
during the period since that report there has been--
            ``(A) less than a 15 percent increase in program 
        acquisition unit cost and current procurement unit cost; and
            ``(B) less than a six-month delay in any program schedule 
        milestone shown in the Selected Acquisition Report.
    ``(3)(A) The Secretary of Defense may waive the requirement for 
submission of Selected Acquisition Reports for a program for a fiscal 
year if--
            ``(i) the program has not entered engineering and 
        manufacturing development;
            ``(ii) a reasonable cost estimate has not been established 
        for such program; and
            ``(iii) the system configuration for such program is not 
        well defined.
    ``(B) The Secretary shall submit to the Committees on Armed 
Services of the Senate and House of Representatives a written 
notification of each waiver under subparagraph (A) for a program for a 
fiscal year not later than 60 days before the President submits the 
budget to Congress pursuant to section 1105 of title 31 in that fiscal 
year.
    ``(b)(1) Selected Acquisition Reports for the first quarter of a 
fiscal year shall be known as comprehensive annual Selected Acquisition 
Reports.
    ``(2) Selected Acquisition Reports for the second, third, and 
fourth quarters of a fiscal year shall be known as quarterly Selected 
Acquisition Reports.
    ``(3) Each Selected Acquisition Report for the first quarter of a 
fiscal year shall be designed to provide to the Committees on Armed 
Services of the Senate and House of Representatives the information 
such Committees need to perform their oversight functions. In the 
interests of consistency and streamlining of reporting, the Secretary 
of Defense shall include in the Selected Acquisition Reports such 
information as is used by the Department of Defense to manage major 
defense acquisition programs. The Secretary of Defense shall determine 
the scope and form of the items to be included in both the 
Comprehensive Annual and Quarterly Selected Acquisition Report and 
issue guidelines to ensure consistent reporting procedures. The 
Secretary of Defense may approve changes in the content of the Selected 
Acquisition Report if the Secretary provides such Committees with 
written notification of such changes at least 60 days before the date 
of the report that incorporates the changes.
    ``(c) Each comprehensive annual Selected Acquisition Report shall 
be submitted within 60 days after the date on which the President 
transmits the Budget to Congress for the following fiscal year, and 
each Quarterly Selected Acquisition Report shall be submitted within 45 
days after the end of the fiscal-year quarter.
    ``(d) The requirements of this section with respect to a major 
defense acquisition program shall cease to apply after 90 percent of 
the items to be delivered to the United States under the program (shown 
as the total quantity of items to be purchased under the program in the 
most recent Selected Acquisition Report) have been delivered or 90 
percent of planned expenditures under the program have been made.
    ``(e) Total program reporting under this section shall apply to a 
major defense acquisition program when funds have been appropriated for 
such and the Secretary of Defense has decided to proceed to engineering 
and manufacturing development of such program. Reporting may be limited 
to the development program as provided by the guidelines of the 
Secretary of Defense promulgated pursuant to subsection (b)(3) before a 
decision is made by the Secretary to proceed to engineering and 
manufacturing development if the Secretary notifies the Committees on 
Armed Services of the Senate and House of Representatives of the 
intention to submit a limited report under this subsection not less 
than 15 days before a report is due under this section.
    ``(f)(1) The Secretary of Defense shall require the program manager 
for a major defense acquisition program, on a quarterly basis, to 
submit to the service acquisition executive designated by the Secretary 
concerned a written report on the unit costs of the program. It shall 
be submitted not more than 30 calendar days after the end of the 
quarter. The Secretary of Defense shall issue regulations implementing 
this requirement.
    ``(2) When a unit cost report is submitted to the service 
acquisition executive designated by the Secretary concerned under this 
section with respect to a major defense acquisition program, the 
service acquisition executive shall determine whether the current 
program acquisition unit cost for the program has increased 15 percent 
or more over the baseline program acquisition unit cost for the 
program.
    ``(3) When a unit cost report is submitted to the service 
acquisition executive designated by the Secretary concerned under this 
section with respect to a major defense acquisition program that is a 
procurement program, the service acquisition executive, in addition to 
the determination under paragraph (2), shall determine whether the 
current procurement unit cost for the program has increased by 15 
percent or more over the baseline procurement unit cost for the 
program.
    ``(4) If, based upon the service acquisition executive's 
determination, the Secretary concerned determines (for the first time 
since the beginning of the current fiscal year) that the current 
program acquisition unit cost has increased by 15 percent or more as 
determined under paragraph (2), or that the current procurement unit 
cost has increased by 15 percent or more as determined under paragraph 
(3), the Secretary shall notify Congress in writing of such 
determination and of the increase with respect to such program within 
45 days after the date of that report and shall include in such 
notification the date on which the determination was made.''.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 144 of title 10, United States Code, is amended by striking out 
the item relating to section 2432 and inserting in lieu thereof the 
following:

``Sec. 2432. Selected Acquisition Reports; unit cost reports.''.

SEC. 302. UNIT COST REPORTS.

    (a) Repeal.--Section 2433 of title 10, United States Code, is 
repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 144 of such title is amended by striking out the item relating 
to section 2433.

SEC. 303. INDEPENDENT COST ESTIMATES; OPERATIONAL MANPOWER 
              REQUIREMENTS.

    Section 2434 of title 10, United States Code, is amended to read as 
follows:
``Sec. 2434. Independent cost estimates; operational manpower 
              requirements
    ``(a) Requirement for Approval.--The Secretary of Defense may not 
approve the engineering and manufacturing development, or the 
production and deployment, of a major defense acquisition program 
unless an independent estimate of the cost of the program, and a 
manpower estimate, has been considered by the Secretary.
    ``(b) Regulations.--The Secretary of Defense shall promulgate 
regulations governing the content and submission of an independent 
estimate of the cost of the program and a manpower estimate. The 
regulations shall require that--
            ``(1) the independent estimate shall--
                    ``(A) be prepared by an office or other entity that 
                is not under the supervision, direction, or control of 
                the military department, defense agency, or other 
                component of the Department of Defense that is directly 
                responsible for carrying out the development or 
                acquisition of the program, and
                    ``(B) include all costs of development, 
                procurement, and operations and support, without regard 
                to funding source or management control; and
            ``(2) the manpower estimate shall properly consider, prior 
        to the engineering and manufacturing development and production 
        and deployment phases of the program, the total endstrengths 
        for personnel required to operate, maintain, train, and support 
        the program upon full operational deployment.''.

SEC. 304. ENHANCED PROGRAM STABILITY.

    Section 2435 of title 10, United States Code, is amended to read as 
follows:
``Sec. 2435. Enhanced program stability
    ``(a) Baseline Description Requirement.--(1) The Secretary of a 
military department shall establish a baseline description for each 
major defense acquisition program under the jurisdiction of such 
Secretary.
    ``(2) The baseline shall include sufficient parameters to describe 
the cost, schedule, and performance of such major defense acquisition 
program.
    ``(3) No amounts appropriated or otherwise made available to the 
Department of Defense for carrying out a major defense acquisition 
program may be obligated without an approved baseline description 
unless such obligation is specifically approved by the Under Secretary 
of Defense for Acquisition.
    ``(4) A baseline description for a major defense acquisition 
program shall be established--
            ``(A) before such program enters engineering manufacturing 
        and development; and
            ``(B) before such program enters production and deployment.
    ``(b) Regulations.--The Secretary of Defense shall promulgate 
regulations governing--
            ``(1) the content of baselines;
            ``(2) the submission of deviation reports by program 
        managers to the Secretary of the military department concerned 
        and the Under Secretary of Defense for Acquisition; and
            ``(3) procedures for departmental review of deviation 
        reports and submission and approval of a revised baseline.''.

SEC. 305. MAJOR PROGRAMS: COMPETITIVE PROTOTYPING.

    (a) Repeal.--Section 2438 of title 10, United States Code, is 
repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 144 of such title is amended by striking out the item relating 
to section 2438.

SEC. 306. MAJOR PROGRAMS: COMPETITIVE ALTERNATIVE SOURCES.

    (a) Repeal.--Section 2439 of title 10, United States Code, is 
repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 144 of such title is amended by striking out the item relating 
to section 2439.

                      Subtitle B--Testing Statutes

SEC. 311. REPEAL OF TESTING REQUIREMENT FOR WHEELED OR TRACKED 
              VEHICLES.

    (a) Repeal.--Section 2362 of title 10, United States Code, is 
repealed.
    (b) Technical Amendment.--The table of sections at the beginning of 
chapter 139 of such title is amended by striking out the item relating 
to section 2362.

SEC. 312. MAJOR SYSTEMS AND MUNITIONS PROGRAMS: SURVIVABILITY AND 
              LETHALITY TESTING.

    (a) Substitution of Vulnerability Testing for Survivability 
Testing.--Section 2366 of title 10, United States Code, is amended--
            (1) by striking out ``survivability'' each place it appears 
        in subsections (a)(1)(A), (a)(2)(A), (c)(1), (d), (e)(3), and 
        (e)(6)(A) and inserting in lieu thereof ``vulnerability''; and
            (2) in subsection (b)(1), by striking out ``Survivability'' 
        and inserting in lieu thereof ``Vulnerability''.
    (b) Less Than Full-Up Testing Authorized.--Section 2366(e)(3) of 
such title is amended by inserting after ``configured for combat,'' the 
following: ``or, if the covered system is a high value system, by 
firing such munitions at components, subsystems, and subassemblies (or 
realistic replicas or surrogates) together with performing design 
analyses, modeling and simulation, and analysis of combat data,''.
    (c) Waiver Authority After Full-Scale Development Begins.--Section 
2366(c)(1) of such title is amended in the first sentence by striking 
out ``, before the system enters full-scale development,''.
    (d) Reference to Congressional Committees.--Section 2366(d) of such 
title is amended in the first sentence by striking out ``defense 
committees of Congress (as defined in section 2362(e)(3) of this 
title)'' and inserting in lieu thereof ``Committees on Armed Services 
and on Appropriations of the Senate and House of Representatives''.

SEC. 313. OPERATIONAL TEST AND EVALUATION OF DEFENSE ACQUISITION 
              PROGRAMS.

    Section 2399(b) of title 10, United States Code, is amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph (5):
    ``(5)(A) The Secretary of Defense may, for a particular major 
defense acquisition program, prescribe and apply different operational 
test and evaluation procedures than those provided under subsection (a) 
and paragraphs (1) through (3) of this subsection if the Secretary 
first transmits to Congress--
            ``(i) a certification that such testing would be 
        unreasonably expensive and impracticable, cause unwarranted 
        delay, or be unnecessary because of the acquisition strategy 
        for that system; and
            ``(ii) a description of the actions taken to ensure that 
        the system will be operationally effective and suitable when 
        the system is introduced into the field.
    ``(B) Alternative operational test and evaluation procedures 
prescribed pursuant to subparagraph (A) may not be used to proceed with 
a major defense acquisition program beyond low-rate initial 
production.''.

SEC. 314. LOW-RATE INITIAL PRODUCTION OF NEW SYSTEMS.

    (a) Exception for Strategic Defense Missile Systems.--Subsection 
(c) of section 2400 of title 10, United States Code, is amended--
            (1) in paragraph (1), by striking out ``and military 
        satellite programs'' and inserting in lieu thereof ``, military 
        satellite programs, and strategic defense missile programs'';
            (2) in paragraph (2), by striking out ``and military 
        satellite program'' and inserting in lieu thereof ``, military 
        satellite program, and strategic defense missile program''; and
            (3) by striking out the caption of such subsection and 
        inserting in lieu thereof ``Low-Rate Initial Production of 
        Naval Vessel, Satellite, and Strategic Defense Missile 
        Programs.--''.
    (b) Submission of Test and Evaluation Master Plan.--Paragraph (2) 
of such section is amended by striking out subparagraph (B) and 
inserting in lieu thereof the following:
            ``(B) any test and evaluation master plan prepared for that 
        program;''.

          Subtitle C--DOD Commercial and Industrial Activities

SEC. 321. FACTORIES AND ARSENALS: MANUFACTURE AT.

    (a) Consolidated Section.--Chapter 148 of title 10, United States 
Code, is amended by adding at the end the following:
``Sec. 2538. Factories and arsenals: manufacture at
    ``(a) The Secretary of Defense or secretary of a military 
department may have supplies needed for the Department of Defense and 
its components made in factories or arsenals owned by the United 
States.
    ``(b) The Secretary of Defense or secretary of a military 
department may abolish any United States arsenal that the Secretary 
considers unnecessary.''.
    (b) Conforming Repeals and Technical Amendments.--(1) Sections 4532 
and 9532 of title 10, United States Code, are hereby repealed.
    (2) The table of sections at the beginning of chapter 433 of such 
title is amended by striking out the item relating to section 4532. The 
table of sections at the beginning of chapter 933 of such title is 
amended by striking out the item relating to section 9532.
    (3) The table of sections at the beginning of chapter 148 is 
amended by adding at the end the following new item:

``2538. Factories and arsenals: manufacture at.''.

     Subtitle D--Industrial Base and Manufacturing Technology Laws

SEC. 331. POLICY OBJECTIVES RELATING TO DEFENSE INTERNATIONAL TRADE.

    Section 2501 of title 10, United States Code, is amended by adding 
at the end the following new subsection:
    ``(d) Policy Objectives Relating to Defense International Trade.--
It is the policy of Congress that the United States attain the national 
defense technology and industrial base objectives set forth in this 
section by fully coordinating domestic defense acquisition practices 
with defense trade and cooperation, under chapter 173 of this title, 
and foreign military sales and assistance.''.

                       Subtitle E--Miscellaneous

SEC. 341. OBLIGATION OF FUNDS: LIMITATION.

    Section 2202 of title 10, United States Code, is amended by 
striking out subsection (a) and inserting in lieu thereof the 
following:
    ``(a) The Secretary of Defense shall issue regulations to be 
followed by all agencies of the Department of Defense for the 
procurement, production, warehousing, or distribution of supplies and 
related functions.''.

SEC. 342. REPEAL OF LIMITATION ON LENGTH OF CONTRACTS.

    Section 9081 of the Department of Defense Appropriations Act, 1990 
(Public Law 101-165) is repealed.

   TITLE IV--SMALL PURCHASE PROCEDURES AND SMALL BUSINESS PROVISIONS

SEC. 401. USE OF SMALL PURCHASE PROCEDURES FOR PROCUREMENTS CONDUCTED 
              THROUGH FEDERAL ACQUISITION COMPUTER NETWORK SYSTEM; 
              IMPLEMENTATION OF SYSTEM.

    (a) Increase in Small Purchase Threshold.--
            (1) In general.--Section 4 of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 403) is amended--
                    (A) in paragraph (10) by striking ``and'' after the 
                semicolon; and
                    (B) by striking paragraph (11) and inserting the 
                following:
            ``(11) The term `small purchase threshold' means--
                    ``(A) $25,000, except as provided in subparagraphs 
                (B) and (C);
                    ``(B) $50,000, in the case of a procurement--
                            ``(i) that is conducted by a procuring 
                        activity that has implemented the FACNET system 
                        in accordance with the requirements of section 
                        29(f)(1)(A) and (B)(i); and
                            ``(ii) in which notices of solicitation for 
                        all contracting opportunities are issued 
                        through the FACNET system; or
                    ``(C) $100,000, in the case of a procurement--
                            ``(i) that is conducted by a procuring 
                        activity that has implemented the FACNET system 
                        in accordance with the requirements of section 
                        29(f)(1)(A) and (B)(i), (ii), (iii), and (iv); 
                        and
                            ``(ii) in which--
                                    ``(I) notices of solicitation for 
                                all contracting opportunities are 
                                issued through the FACNET system,
                                    ``(II) responses to solicitations 
                                and requests for information may be 
                                submitted to the procuring activity 
                                through such system,
                                    ``(III) information pursuant to 
                                those requests is available through 
                                such system,
                                    ``(IV) orders are made through such 
                                system, and
                                    ``(V) public notice of awards is 
                                provided through such system; and
            ``(12) the term `FACNET system' means such system developed 
        by the Administrator under section 29.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect on, and apply to solicitations made and 
        orders placed on or after, the expiration of the 60-day period 
        beginning on the date of issuance in final form of revisions to 
        the Federal Acquisition Regulation under subsection (b).
            (3) Interim rule.--Notwithstanding paragraphs (1) and (2), 
        during the 5-year period beginning on the date of the issuance 
        in final form of revisions to the Federal Acquisition 
        Regulation under subsection (b), procuring activities shall 
        continue to report, pursuant to section 19(d) of the Office of 
        Federal Procurement Policy Act (41 U.S.C. 417(d)), procurement 
        awards with a dollar value of at least $10,000, but less than 
        $100,000, in conformity with the procedures for the reporting 
        of a contract award in excess of $25,000 in effect on May 24, 
        1993.
    (b) Improved Small Purchase Procedures.--
            (1) Revision of far.--The Federal Acquisition Regulation 
        shall be revised to ensure that--
                    (A) procuring activities of executive agencies 
                comply with the requirements of section 8(a) of the 
                Small Business Act (15 U.S.C. 637(a)) and section 2323 
                of title 10, United States Code, in awarding any 
                contract with a price exceeding $25,000;
                    (B) the authority under part 13.106(a)(1) of the 
                Federal Acquisition Regulation (48 C.F.R. 
                13.106(a)(1)), as in effect on May 19, 1993, to make 
                purchases without securing competitive quotations does 
                not apply to any purchases with a price exceeding 
                $2,500; and
                    (C) procuring activities of executive agencies 
                comply with the requirements of section 15(j) of the 
                Small Business Act (15 U.S.C. 644), relating to the 
                small business reserve, in awarding any contract with a 
                price below the small purchase threshold.
            (2) Notice required regarding oral solicitations.--Section 
        18(a)(1)(B) of the Office of Federal Procurement Policy Act (41 
        U.S.C. 416(a)(1)(B)) is amended in the matter preceding clause 
        (i)--
                    (A) by inserting ``(including orally or by any 
                other means)'' after ``intending to solicit''; and
                    (B) by inserting after ``ten days'' the following: 
                ``before contract award (except for any procurement in 
                which public notice of contract opportunities for the 
                acquisition of property or services by a procuring 
                activity of an executive agency is performed through 
                the FACNET system),''.
            (3) Participation by all responsible small business 
        concerns.--Section 18 of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 416) is amended by adding at the end the 
        following:
    ``(e) An executive agency intending to solicit offers for a 
contract for which a notice of solicitation is required to be posted 
under subsection (a)(1)(B) shall ensure that all small business 
concerns are permitted to respond to solicitations for the contract 
within the time specified in the solicitations.''.
    (c) Performance Test and Report.--
            (1) Performance test.--The Comptroller General of the 
        United States shall monitor and collect data on the results of 
        the amendments made by subsection (a)(1), to ascertain the 
        effects of the amendments on the participation of small 
        business concerns (including small business concerns owned and 
        controlled by socially and economically disadvantaged 
        individuals) in procurement awards of less than $100,000 and 
        the benefits and detriments, if any, to the buying activities 
        of the various Executive agencies.
            (2) Data to be collected.--Data collected under paragraph 
        (1) shall include data regarding whether the amendments made by 
        subsection (a)(1) have improved the acquisition process in 
        terms of reduced paperwork, financial or other savings to the 
        Government, and any increase in the number of contractors 
        participating in the contracting process.
            (3) Period.--Data shall be collected for purposes of 
        paragraph (1) during the period beginning with the first full 
        fiscal year quarter after the effective date of the amendments 
        made by subsection (a)(1) and ending September 30, 1996.
            (4) Report.--By March 1, 1997, the Comptroller General of 
        the United States shall report to the Committee on Government 
        Operations of the House of Representatives, the Committee on 
        Governmental Affairs of the Senate, and the Committees on Small 
        Business of the House of Representatives and the Senate on the 
        effects of the increase in the small purchase threshold made by 
        the amendments made by subsection (a)(1).
    (d) Functions of Administrator for Federal Procurement Policy.--
Section 6(d) of the Office of Federal Procurement Policy Act (41 U.S.C. 
405(d)) is amended--
            (1) in paragraph (7) by striking ``and'' after the 
        semicolon at the end; and
            (2) by redesignating paragraph (8) as paragraph (10) and 
        inserting after paragraph (7) the following:
            ``(8) developing policies, in consultation with the 
        Administrator of the Small Business Administration, that ensure 
        that small businesses and small businesses owned and controlled 
        by socially and economically disadvantaged persons are provided 
        with the maximum practicable opportunities to participate in 
        procurements that are conducted below the small purchase 
        threshold; and
            ``(9) developing policies that will promote achievement of 
        goals for participation by small businesses and small 
        businesses owned and controlled by socially and economically 
        disadvantaged individuals.''.
    (e) Implementation of Electronic Data Interchange for Procurement 
Information.--The Office of Federal Procurement Policy Act (41 U.S.C. 
401 et seq.) is further amended by adding after section 28 the 
following:

``SEC. 29. ELECTRONIC INTERCHANGE OF PROCUREMENT INFORMATION.

    ``(a) In General.--The Administrator, in consultation with the 
Office of Information and Regulatory Affairs, shall establish a program 
and assign a program manager for, and provide overall direction of 
policy and leadership in, the development, coordination, installation, 
operation, and completion of implementation by executive agencies, by 
not later than 5 years after the date of the enactment of the Defense 
Acquisition Reform Act of 1993, of a Federal Acquisition Computer 
Network system. Such system shall be known as the `FACNET system'. The 
FACNET system shall involve enabling technology and procurement 
electronic data interchange transaction sets. The enabling technology 
shall consist of a computer network, supporting data bases, and 
interfaces that interconnect Government automated systems to the 
network. The procurement electronic data interchange transaction sets 
shall facilitate the electronic interchange of standard procurement 
information between Government and industry automated acquisition 
systems.
    ``(b) Functions of Administrator of General Services.--The 
Administrator of General Services shall do the following:
            ``(1) Provide technical support for the FACNET system by 
        doing the following:
                    ``(A) Coordinate with the Administrator to 
                facilitate the efficient and widespread implementation 
                of the FACNET system by executive agencies. This shall 
                include interfacing the FACNET system to other systems, 
                such as the Government bank card and Electronic Funds 
                Transfer payment systems.
                    ``(B) Assist the Director of the National Institute 
                of Standards and Technology in the development and 
                application of appropriate Federal Information 
                Processing Standards.
                    ``(C) Prepare a technical plan for coordinating the 
                design, development, implementation, operation, and 
                maintenance of the FACNET system. The plan shall 
                include roles and responsibilities, major milestones, 
                cost estimates, and performance requirements.
            ``(2) Ensure compliance with section 111 of the Federal 
        Property and Administrative Services Act of 1949 in the 
        implementation of the FACNET system by executive agencies, 
        including by limiting the scope of delegations under subsection 
        (a) of that section.
            ``(3) Evaluate progress by executive agencies in 
        implementing the FACNET system, and recommend changes in that 
        implementation to the program manager assigned by the 
        Administrator under subsection (a).
            ``(4) Submit to the Congress, on the date that is one year 
        after the date of the enactment of the Defense Acquisition 
        Reform Act of 1993 and on that date in each of the 5 years 
        thereafter, a report on the overall progress by the executive 
        branch of the Government and by each executive agency in 
        implementing the FACNET system.
    ``(c) Implementation of FACNET System by Executive Agencies.--
            ``(1) In general.--The head of each executive agency shall 
        cooperate with the Administrator and the Administrator of 
        General Services to implement the FACNET system for the agency.
            ``(2) Designation of agency program manager.--
                    ``(A) Designation.--The head of each executive 
                agency shall designate a program manager to implement 
                the FACNET system for the agency and otherwise 
                implement this section.
                    ``(B) Functions.--A program manager designated 
                under this paragraph for an executive agency shall--
                            ``(i) report directly to the senior 
                        procurement executive designated for the agency 
                        under section 16(3);
                            ``(ii) be responsible for the timely and 
                        cost-effective implementation of the FACNET 
                        system for the agency in a manner that is 
                        responsive to the procurement needs of the 
                        agency, national business needs, and the 
                        public's interest in open government;
                            ``(iii) develop plans for phasing-in the 
                        implementation of the FACNET system for the 
                        procuring activities of the executive agency 
                        and phasing-out local network systems that 
                        perform comparable procurement functions;
                            ``(iv) participate in the interagency 
                        development of standard procurement electronic 
                        data interchange transaction sets;
                            ``(v) using the resources of the agency, 
                        develop and implement a standardized and 
                        comprehensive training program for agency 
                        employees in the use and management of the 
                        FACNET system; and
                            ``(vi) in carrying out this section, comply 
                        with guidelines issued by the Administrator 
                        under this section and program directives 
                        issued by the Administrator of General Services 
                        under section 111 of the Federal Property and 
                        Administrative Services Act of 1949.
    ``(d) Functions of National Institute of Standards and 
Technology.--The Director of the National Institute of Standards and 
Technology shall--
            ``(1) ensure that the FACNET system complies with Federal 
        Information Processing Standards;
            ``(2) issue additional standards for the FACNET system as 
        necessary; and
            ``(3) establish tests to facilitate the aims of this 
        section and support policies established by the Administrator 
        under this section.
    ``(e) Functions of Small Business Administration.--The 
Administrator of the Small Business Administration shall--
            ``(1) develop plans to coordinate and promote the use of 
        the FACNET system by small businesses, that incorporate 
        outreach efforts by the Small Business Administration, agency 
        Offices of Small and Disadvantaged Business and Utilization, 
        Small Business Development Centers, and other appropriate 
        organizations; and
            ``(2) use the resources of the Office of Procurement 
        Assistance and Office of Advocacy to develop a standardized and 
        comprehensive training program to train small business concerns 
        in the use of the FACNET system, through Small Business 
        Administration district offices and Small Business Development 
        Centers.
    ``(f) FACNET System Compatibility Standards.--
            ``(1) In general.--The Administrator, in consultation with 
        the Office of Information and Regulatory Affairs, the 
        Administrator of General Services, the Administrator of the 
        Small Business Administration, and the Director of the National 
        Institute of Standards and Technology, shall prescribe policies 
        for ensuring convenient and universal access to the FACNET 
        system, and shall develop a set of system compatibility 
        standards for each FACNET system interface and FACNET system 
        support data base. The system compatibility standards shall 
        specify the functional capabilities of each FACNET system 
        interface, and the minimum set of data elements of each FACNET 
        system support data base. The system compatibility standards 
        shall ensure that the following FACNET system functions are 
        satisfactorily performed by each executive agency, executive 
        agency component, or procuring activity:
                    ``(A) Provision of widespread public notice of 
                solicitations for contract opportunities issued by the 
                agency, component, or activity and of orders to be made 
                by the agency, component, or activity below the small 
                purchase threshold.
                    ``(B) Allowing private users to electronically--
                            ``(i) selectively access and review 
                        solicitations issued by the agency, component, 
                        or activity;
                            ``(ii) respond to solicitations issued by 
                        the agency, component, or activity;
                            ``(iii) receive orders from the agency, 
                        component, or activity; and
                            ``(iv) access information on contract 
                        awards made by the agency, component, or 
                        activity.
            ``(2) Binding standards.--The FACNET system interface and 
        FACNET system support data base of each procuring activity 
        shall comply with the system compatibility standards developed 
        under paragraph (1), except to the extent the Administrator has 
        waived application of such standards to the activity under 
        paragraph (3).
            ``(3) Waivers.--(A) The Administrator may, in writing, 
        waive the application of any system compatibility standard to a 
        procuring activity if the Administrator--
                    ``(i) determines that compliance with the standard 
                by the procuring activity would adversely affect the 
                accomplishment of the mission of the activity or cause 
                a major adverse financial impact on the activity which 
                is not offset by Government-wide savings; and
                    ``(ii) approves a plan, developed by the procuring 
                activity, for complying with the standard by not later 
                than 1 year after the issuance of the waiver.
            ``(B) The authority of the Administrator to issue waivers 
        under this paragraph may not be delegated.
            ``(C) A waiver under this paragraph may be issued by the 
        Administrator only after receipt of a request for the waiver 
        submitted by the program manager designated under subsection 
        (c)(2)(A) for the procuring activity for which the waiver is 
        requested.
            ``(D) The Administrator shall promptly submit a notice of 
        each waiver under this paragraph to the Committee on Government 
        Operations of the House of Representatives and the Committee on 
        Governmental Affairs of the Senate, and promptly publish the 
        notice in the Federal Register.''.
    (f) Technical Corrections.--
            (1) Section 18(d) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 416) is amended by striking ``(e)'' in 
        the first sentence and inserting ``(a)''.
            (2) Section 18(a)(1) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 416(a)(1)) is amended--
                    (A) in subparagraph (A) in the matter following 
                clause (ii) by striking ``notice'' and inserting 
                ``notice of solicitation''; and
                    (B) in subparagraph (B) in the matter preceding 
                clause (i) by striking ``a notice of solicitation 
                described in subsection (f)'' and inserting ``a notice 
                of solicitation described in subsection (b)''.

SEC. 402. SMALL BUSINESS RESERVATION.

    Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) is 
amended to read as follows:
    ``(j) Each contract for the procurement of goods and services which 
has an anticipated value not in excess of the small purchase threshold 
and which is subject to small purchase procedures prescribed by section 
2304(g) of title 10, United States Code, or section 303(g) of the 
Federal Property and Administrative Services Act of 1949 (41 U.S.C. 
253(g)) shall be reserved exclusively for small business concerns 
unless the contracting officer is unable to obtain offers from two or 
more small business concerns that are competitive with market prices 
and in terms of quality and delivery of the goods or services being 
purchased. Nothing in this subsection shall be construed as precluding 
the award of contracts with a value not in excess of the small purchase 
threshold under the authority of section 8(a) of this Act, section 2323 
of title 10, United States Code, or section 712 of the Business 
Opportunity Development Reform Act of 1988 (Public Law 100-656; 15 
U.S.C. 644 note). In utilizing small purchase procedures, contracting 
officers shall, wherever circumstances permit, choose a method of 
payment which minimizes paperwork and facilitates prompt payment to 
contractors.''.

SEC. 403. EXEMPTIONS FOR CONTRACTS NOT IN EXCESS OF THE SMALL PURCHASE 
              THRESHOLD.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.), as amended by section 401(e), is further amended by adding at 
the end the following new section:

``SEC. 30. SMALL PURCHASE THRESHOLD.

    ``(a) Exemption From Certain Laws.--Purchases made and contracts 
awarded with a value that is not in excess of the small purchase 
threshold shall be exempt from the following laws:
            ``(1) Section 2313 of title 10, United States Code.
            ``(2) Section 2393(d) of title 10, United States Code.
            ``(3) Section 2631 of title 10, United States Code.
    ``(b) Exemption From Contract Clause Requirement.--Unless otherwise 
determined by the Administrator, for contracts awarded with a value 
that is not in excess of the small purchase threshold and which are 
subject to small purchase procedures prescribed by section 2304(g) of 
title 10, United States Code or section 303(g) of the Federal Property 
and Administrative Services Act (41 U.S.C. 253(g)), no contract clause 
shall be required to implement the following laws:
            ``(1) Section 2207 of title 10, United States Code.
            ``(2) Section 2306(b) of title 10, United States Code.
            ``(3) Section 3741 of the Revised Statutes (41 U.S.C. 22).
    ``(c) Special Rule Relating to Exemptions.--A provision of law 
hereafter enacted shall not be construed as applicable to purchases of 
property or services not in excess of the small purchase threshold 
unless that provision of law specifically refers to this section and 
specifically states that such provision of law modifies or supersedes 
the provisions of this section.''.

SEC. 404. SMALL BUSINESS AMENDMENTS.

    Subparagraph (A) of section 8(a)(1) of the Small Business Act (15 
U.S.C. 637(a)(1)) is amended in the first full sentence--
            (1) by inserting ``(i)'' after ``in his discretion'';
            (2) by striking out the period at the end of such sentence 
        and inserting in lieu thereof ``, or''; and
            (3) by adding at the end of such sentence the following: 
        ``(ii) to award such procurement contract directly to a 
        socially and economically disadvantaged small business 
        designated by the Administration provided that the small 
        business does not request that the award be made through the 
        Administration.''.

SEC. 405. NOTIFICATION OF SMALL BUSINESS CONCERNS IN LOCALITY OF 
              PROCURING AGENCY.

    Section 18 of the Office of Federal Procurement Policy Act (41 
U.S.C. 416), as amended by section 401(b)(3), is further amended by 
adding at the end the following:
    ``(f) Notification of Local Small Business Concerns.--An executive 
agency intending to solicit offers for a contract for which a notice of 
solicitation is required to be posted under subsection (a)(1)(B) shall 
ensure that small business concerns located in the jurisdiction of the 
Small Business Administration District Office nearest to the agency, 
and other small business concerns in the State in which the agency is 
located, are sent notices of the solicitation.''.

                     TITLE V--INTELLECTUAL PROPERTY

SEC. 501. DEPARTMENT OF DEFENSE ACQUISITION OF INTELLECTUAL PROPERTY 
              RIGHTS.

    (a) Authorized Acquisitions.--Section 2386 of title 10, United 
States Code, is amended by striking out paragraphs (3) and (4) and 
inserting in lieu thereof the following:
            ``(3) Technical data and computer software.
            ``(4) Releases for past infringement of patents or 
        copyrights or for unauthorized use of technical data or 
        computer software.''.
    (b) Redundant Provision.--
            (1) Repeal.--Section 7210 of title 10, United States Code, 
        is repealed.
            (2) Technical amendment.--The table of sections at the 
        beginning of chapter 631 of such title is amended by striking 
        out the item relating to section 7210.

                     TITLE VI--STANDARDS OF CONDUCT

                     Subtitle A--Ethics Provisions

SEC. 601. AMENDMENTS TO OFFICE OF FEDERAL PROCUREMENT POLICY ACT.

    (a) Applicability of Certification Requirement to Contracts in 
Excess of $500,000.--Subsection (e)(7)(A) of section 27 of the Office 
of Federal Procurement Policy Act (41 U.S.C. 423) is amended by 
striking out ``$100,000'' and inserting in lieu thereof ``$500,000''.
    (b) Applicability of Restrictions Resulting From Procurement 
Activities of Procurement Officials to Contracts in Excess of 
$500,000.--Subsection (f) of such section is amended--
            (1) by adding at the end of paragraph (1) the following new 
        sentence: ``This subsection applies only to contracts, 
        extensions, and modifications in excess of $500,000.''; and
            (2) in paragraph (2)(A), by striking out ``$100,000'' and 
        inserting in lieu thereof ``$500,000''.

SEC. 602. REPEAL OF SUPERSEDED AND OBSOLETE LAWS.

    (a) Repeal.--The following sections of title 10, United States 
Code, are repealed: Sections 2207, 2397, 2397a, 2397b, 2397c, and 2408.
    (b) Technical Amendments.--Part IV of subtitle A of title 10, 
United States Code, is amended--
            (1) in the table of sections at the beginning of chapter 
        131, by striking out the item relating to section 2207; and
            (2) in the table of sections for chapter 141, by striking 
        out the items relating to sections 2397, 2397a, 2397b, 2397c, 
        and 2408.

                   Subtitle B--Additional Amendments

SEC. 611. CONTRACTING FUNCTIONS PERFORMED BY FEDERAL PERSONNEL.

    (a) Amendment of OFPP Act.--The Office of Federal Procurement 
Policy Act, as amended by sections 401(e) and 403, is further amended 
by adding at the end the following new section:

         ``contracting functions performed by federal personnel

    ``Sec. 31. (a) Limitation on Payment for Advisory and Assistance 
Services.--(1) No person who is not an employee may be paid by an 
agency for services to conduct evaluations or analyses of any aspect of 
a proposal submitted for an acquisition unless employees with adequate 
training and capabilities to perform such evaluations and analyses are 
not readily available within the agency or any other Federal agency.
    ``(2) In the administration of this subsection, the head of each 
agency shall determine the standards of adequate training and 
capability of employees to conduct such acquisitions.
    ``(b) Delegation of Procurement Authority.--With respect to an 
acquisition that is subject to section 111 of the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 759), the Administrator 
of General Services may not issue a delegation of procurement authority 
for the acquisition unless the request for the delegation of 
procurement authority includes a determination of the contracting 
agency that--
            ``(1) such agency has and will utilize employees within the 
        agency, or employees available from another agency, who are 
        adequately trained and capable of conducting evaluations and 
        analyses of proposals submitted for such an acquisition; or
            ``(2)(A) such agency does not have employees within the 
        agency who are adequately trained and capable of conducting 
        evaluations and analyses of proposals submitted for such an 
        acquisition; and
            ``(B) adequately trained and capable employees are not 
        readily available from other agencies in accordance with 
        regulations promulgated by the Federal Acquisition Regulatory 
        Council.
    ``(c) Definition.--For purposes of this section, the term 
`employee' has the meaning given such term in section 2105 of title 5, 
United States Code.''.
    (b) Requirement for Guidance and Regulations.--
            (1) Guidance and regulations required.--Not later than 90 
        days after the date of the enactment of this Act, the Federal 
        Acquisition Regulatory Council established by section 25(a) of 
        the Office of Federal Procurement Policy Act (41 U.S.C. 421(a)) 
        shall--
                    (A) review part 37 of title 48 of the Code of 
                Federal Regulations as it relates to the use of 
                advisory and assistance services; and
                    (B) provide guidance and promulgate regulations 
                regarding--
                            (i) what actions Federal agencies are 
                        required to take to determine whether expertise 
                        is readily available within the Federal 
                        Government before contracting for advisory and 
                        technical services to conduct acquisitions; and
                            (ii) the manner in which Federal employees 
                        with expertise may be shared with agencies 
                        needing expertise for such acquisitions.
            (2) Definition.--In paragraph (1), the term ``employee'' 
        has the meaning given such term in section 2105 of title 5, 
        United States Code.

SEC. 612. REPEAL OF EXECUTED REQUIREMENT FOR STUDY AND REPORT.

    Section 17 of the Office of Federal Procurement Policy Act (41 
U.S.C. 415) is repealed.

SEC. 613. WAITING PERIOD FOR SIGNIFICANT CHANGES PROPOSED FOR 
              ACQUISITION REGULATIONS.

    Section 22(a) of the Office of Federal Procurement Policy Act (41 
U.S.C. 418b) is amended--
            (1) by striking out ``30 days'' and inserting in lieu 
        thereof ``60 days''; and
            (2) by adding at the end the following: ``Notwithstanding 
        the preceding sentence, such a policy, regulation, procedure, 
        or form may take effect earlier than 60 days after the 
        publication date when there are compelling circumstances for 
        the earlier effective date, but in no event may that effective 
        date be less than 30 days after the publication date.''.

                TITLE VII--DEFENSE TRADE AND COOPERATION

SEC. 701. INTERNATIONAL COOPERATIVE AGREEMENTS.

    (a) Defense International Agreements.--
            (1) Terminology revisions.--Section 2531 of title 10, 
        United States Code, is amended--
                    (A) in the subsection captions for subsections (a) 
                and (c), by striking out ``MOUs and Related'' and 
                inserting in lieu thereof ``International'';
                    (B) in subsection (a), by striking out ``proposed 
                memorandum of understanding, or any existing or 
                proposed agreement related to a memorandum of 
                understanding,'' in the matter above paragraph (1) and 
                inserting in lieu thereof ``proposed international 
                agreement, including a memorandum of understanding,'';
                    (C) by striking out ``memorandum of understanding 
                or related agreement'' each place it appears and 
                inserting in lieu thereof ``international agreement'';
                    (D) in subsection (b), by striking out ``memorandum 
                or related agreement'' each place it appears in the 
                second sentence and inserting in lieu thereof 
                ``international agreement''; and
                    (E) in subsection (c)--
                            (i) by striking out ``A'' after 
                        ``Agreements.--'' and inserting in lieu thereof 
                        ``An''; and
                            (ii) by striking out ``memorandum or 
                        agreement'' and inserting in lieu thereof 
                        ``international agreement''.
            (2) Expanded scope of agreements.--Section 2531(a) of title 
        10, United States Code, is amended by striking out ``research, 
        development, or production'' in the matter above paragraph (1) 
        and inserting in lieu thereof ``research, development, 
        production, or logistics support''.
            (3) Technical amendments.--
                    (A) Section heading.--The heading of section 2531 
                of title 10, United States Code, is amended to read as 
                follows:
``Sec. 2531. Defense international agreements''.
                    (B) Table of sections.--The item relating to such 
                section in the table of sections at the beginning of 
                subchapter V of chapter 148 of such title is amended to 
                read as follows:

``2531. Defense international agreements.''.
    (b) Repeal of Unnecessary Authority.--
            (1) Repeal.--Section 7344 of title 10, United States Code, 
        is repealed.
            (2) Technical amendment.--The table of sections at the 
        beginning of chapter 635 of such title is amended by striking 
        out the item relating to section 7344.

SEC. 702. ACQUISITION, CROSS-SERVICING AGREEMENTS, AND STANDARDIZATION.

    (a) Limited Waiver of Restrictions on Accrued Reimbursable 
Liabilities and Credits for Contingency Operations.--Section 2347 of 
title 10, United States Code, is amended by adding at the end the 
following new subsection:
    ``(c) The Secretary of Defense may waive the restrictions in 
subsections (a) and (b) for a period not to exceed 180 days upon a 
written determination that the armed forces are involved in a 
contingency operation or that involvement of the armed forces in a 
contingency operation is imminent. Upon making such a determination, 
the Secretary shall transmit a copy of the determination to the 
Committees on Armed Services of the Senate and House of 
Representatives.''.
    (b) Communications Support.--Section 2350f of title 10, United 
States Code, is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d)(1) Nothing in this section shall be construed to limit the 
authority of the Secretary of Defense, without a formal bilateral 
agreement or multilateral arrangement, to furnish communications 
support and related supplies to, or receive communications support and 
related supplies from, an allied country in accordance with this 
subsection.
    ``(2) The Secretary of Defense may furnish or receive such support 
and supplies on a reciprocal basis for a period not to exceed 90 days--
            ``(A) in order to meet emerging operational requirements of 
        the United States and the allied country; or
            ``(B) incident to a joint military exercise with the allied 
        country.
    ``(3) If interconnection of communication circuits is maintained 
for joint or multilateral defense purposes under the authority of this 
subsection, the costs of maintaining such circuits may be allocated 
among the various users.''.

                TITLE VIII--COMMERCIAL ITEM ACQUISITION

SEC. 801. PROCUREMENT OF COMMERCIAL AND NONDEVELOPMENTAL ITEMS.

    (a) Addition of Chapter to Title 10.--(1) Part IV of subtitle A of 
title 10, United States Code, is amended by adding at the end the 
following new chapter:

             ``CHAPTER 174--PROCUREMENT OF COMMERCIAL ITEMS

``Sec.
``2951. Policy.
``2952. Acquisition of commercial items.
``2953. Precedence; relationship to other laws.
``2954. Specific acquisition procedures and restrictions.
``2955. Pricing; remedy for inaccurate documentation; audit; 
                            nonexclusivity.
``Sec. 2951. Policy.
    ``To further achieve effective, efficient, and economic 
administration of the Federal procurement system, the Secretary of 
Defense shall, in accordance with applicable laws, Government-wide 
policies and regulations, and good business practices, implement a 
preference for the acquisition of commercial items by--
            ``(1) whenever practicable, stating specifications in 
        solicitation for bids and proposals in terms such that bidders 
        and offerors are enabled and encouraged to offer to supply 
        commercial items in response to agency solicitations;
            ``(2) reducing impediments to the acquisition of commercial 
        items in agency procurement policies, practices, and procedures 
        not required by law; and
            ``(3) requiring training of appropriate personnel in the 
        acquisition of commercial items.
``Sec. 2952. Acquisition of commercial items.
    ``(a) Market Research.--Before soliciting bids or proposals for a 
contract for property or services, the Secretary of Defense or the 
Secretary of the military department concerned shall conduct market 
research, appropriate to the circumstances, to determine whether the 
needs of the department can be met by the acquisition of commercial 
items.
    ``(b) Advocate for Acquisition of Commercial Items.--
            ``(1) Establishment.--There is established in the 
        Department of Defense the position of Advocate for the 
        Acquisition of Commercial Items (hereinafter in this subsection 
        referred to as the `Advocate').
            ``(2) Functions.--The Advocate shall--
                    ``(A) monitor compliance by the Department with the 
                preference required under subsection (a) for the 
                acquisition of commercial items;
                    ``(B) make recommendations and proposals to the 
                Secretary of Defense regarding the reform of 
                procurement statutes and regulations to implement that 
                preference; and
                    ``(C) report to the Secretary of Defense on the 
                prospective effect of proposed statutes and regulations 
                on the acquisition of commercial items.
``Sec. 2953. Precedence; relationship to other laws
    ``(a) Exemptions From Present Law.--In the acquisition of 
commercial items or commercial components by the Department of Defense, 
the following sections of this title do not apply:
            ``(1) Section 2207.
            ``(2) Section 2306(b).
            ``(3) Section 2313.
            ``(4) Section 2384(b).
            ``(5) Section 2393.
            ``(6) Section 2397c.
            ``(7) Section 2408.
            ``(8) Section 2410b.
            ``(9) Section 2631.
    ``(b) Principle of Construction With Future Laws.--Notwithstanding 
any other provision of law enacted after the date of the enactment of 
this chapter, no provision of this chapter or of any other law 
expressly referenced in this chapter shall be held to have been amended 
by another law unless that law specifically refers to and amends such 
provision of this chapter or such provision of law expressly referenced 
in this chapter.
    ``(c) Relation to Simplified Procedures.--When commercial items are 
being procured by the Government, the provisions of this chapter, and 
regulations issued under this chapter, shall take precedence over 
regulations issued pursuant to section 2304(g) of this title. Nothing 
in this section shall affect the set-aside for small businesses 
established by section 15(j) of the Small Business Act (15 U.S.C. 
644(j)).
    ``(d) Set-Asides Preserved.--Nothing in this chapter shall prevent 
the Secretary of Defense from restricting the award of prime contracts 
for commercial items to any source as may from time to time be 
prescribed or permitted by law.
``Sec. 2954. Specific acquisition procedures and restrictions
    ``(a) Restriction to Fixed Price Basis.--The Department of Defense 
shall purchase commercial items and components acquired under this 
chapter on a firm, fixed price basis or on a fixed price with economic 
price adjustment basis.
    ``(b) Economic Price Adjustment.--To the extent practical, 
contracts for commercial items shall not require contract performance 
for a term longer than customary industry practice for the product 
being acquired. Contracting officers may consider the use of economic 
price adjustment provisions if an extended period of performance cannot 
be avoided.
    ``(c) Requirements for Commercial and Nondevelopmental Items.--The 
Secretary of Defense shall ensure that, to the maximum extent 
practicable--
            ``(1) requirements of the Department of Defense with 
        respect to a procurement of supplies are stated in terms of--
                    ``(A) functions to be performed;
                    ``(B) performance required; or
                    ``(C) essential physical characteristics;
            ``(2) such requirements are defined so that commercial or 
        nondevelopmental items and commercial components may be 
        procured to fulfill such requirements;
            ``(3) such requirements are fulfilled through the 
        procurement of commercial or nondevelopmental items and 
        commercial components; and
            ``(4) prior to developing new specifications, the 
        Department conducts market research to determine whether 
        commercial or nondevelopmemental items are available or could 
        be modified to meet agency needs.
    ``(d) Contract Quality Requirements.--(1) To the maximum extent 
practicable, regulations issued under this chapter shall permit 
contractors providing commercial items to use their existing quality 
assurance systems and quality programs.
    ``(2) To the maximum extent practicable, regulations issued under 
this chapter shall prohibit Government inspection or test of commercial 
items prior to tender of those items by the contractor for acceptance 
by the Government.
``Sec. 2955. Pricing; remedy for inaccurate documentation; audit; 
              nonexclusivity
    ``(a) Requirement for Determination of Price Reasonableness.--(1) 
When a procurement for a commercial item or component by the Government 
or its contractors, using other than sealed bid procedures, has been 
based on adequate price competition, or when the price agreed on is 
based on prices of items or components sold in sufficient quantities to 
the general public to establish a market price, the contracting officer 
shall presume that the price contained in the most advantageous 
evaluated offer (price and all other factors considered) received in 
response to a solicitation, or a price based on established market 
prices, is fair and reasonable unless the contracting officer has 
information that the price is not fair and reasonable. Prior to the 
award of a contract where price is based on market prices, the 
contracting officer shall make reasonable efforts to establish the 
currency and accuracy of such prices.
    ``(2) When paragraph (1) is not applicable, the contracting officer 
shall use price analysis to determine whether or not the price is fair 
and reasonable.
    ``(3) When required by the contracting officer prior to award or 
contract definitization, the contractor shall promptly furnish 
documentation adequate to demonstrate the market price of the item or 
items or otherwise needed to establish a fair and reasonable price. All 
documentation received from an offeror, if not otherwise in the public 
domain and if requested by the offeror and marked as confidential, 
shall be treated by the Government as confidential and exempt from 
disclosure to the extent permitted by section 552 of title 5.
    ``(4) If the contracting officer determines under paragraph (1) or 
(2) that the price is fair and reasonable, no cost or pricing data may 
be required under the provisions of section 2306a of this title.
    ``(b) Government's Remedy for Inaccurate Documentation.--When 
documentation is submitted pursuant to subsection (a)(3), the 
Government shall be entitled to a reduction in price, and the return of 
any overpayment, with interest thereon, if an offeror knowingly or 
negligently submits materially inaccurate or misleading documentation 
in support of a contract or modification, the contracting officer 
relies on such documentation in reaching a determination that a price 
is reasonable, and because of such reliance the price significantly 
exceeds that which would otherwise have been accepted. For purposes of 
applying this subsection, a contracting officer will be rebuttably 
presumed to have relied upon all material documentation supplied by an 
offeror.
    ``(c) Government's Right to Audit.--The United States shall have 
the right to audit all documentation provided by an offeror under 
subsection (b) and all books and records of the offeror directly 
relating to such documentation, except that, if the offeror has made no 
representation as to the completeness of the documentation supplied, 
the United States shall have no right to audit for completeness. The 
audit right created by this subsection shall expire one year after the 
date of award of the contract or the date of the modification of a 
contract with respect to which documentation was provided. When 
contract price is established under this section, the Government shall 
have no audit rights other than those set out in this subsection.
    ``(d) Non-Exclusivity.--The Government's rights and remedies 
available in this chapter are in addition to those otherwise provided 
by law.''.
    (2) The tables of chapters at the beginning of subtitle A of title 
10, United States Code, and at the beginning of part IV of such 
subtitle are each amended by inserting after the item relating to 
chapter 173 the following new item:

``174. Procurement of Commercial Items......................    2951''.
    (b) Regulations and Simplified Form Contracts.--
            (1) Revision of far.--Unless otherwise specifically 
        provided in this Act, not later than 180 days after the date of 
        the enactment of this Act, the Federal Acquisition Regulation 
        issued under section 25(c) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 421(c)) shall be revised to implement the 
        amendments made by this section.
            (2) Simplified uniform contract.--(A)(i) The revision of 
        the Federal Acquisition Regulation under paragraph (1) shall 
        include issuance of one or more simplified uniform contracts 
        for the acquisition of commercial items by the Department of 
        Defense and shall require that such simplified uniform contract 
        or contracts be used for the acquisition of commercial items to 
        the maximum extent practicable. The uniform contract or 
        contracts shall include only--
                    (I) those contract clauses that are required to 
                implement provisions of law applicable to such an 
                acquisition; and
                    (II) those contract clauses that are determined to 
                be consistent with standard commercial practice and 
                appropriate for inclusion in such contracts.
            (ii) In addition to the clauses described under clause (i), 
        contracts for the acquisition of commercial items may include 
        such clauses as are essential for the protection of the Federal 
        Government's interest in--
                    (I) a particular contract, as determined in writing 
                by the contracting officer for such contract; or
                    (II) a class of contracts, as determined by the 
                Secretary of Defense or Secretary of the military 
                department concerned, in consultation with the 
                Administrator for Federal Procurement Policy.
            (iii) Contracts for the acquisition of commercial items may 
        not include any clause other than those clauses authorized 
        under clause (i) or (ii).
            (B)(i) Except as provided in clause (ii), a prime 
        contractor under a Department of Defense contract for the 
        acquisition of commercial items may be required to include in 
        subcontracts under such contract only those contract clauses 
        that are required to implement provisions of law applicable to 
        such subcontracts.
            (ii) In addition to the clauses described under clause (i), 
        a contractor under a Department of Defense contract for the 
        acquisition of commercial items may be required to include in a 
        subcontract under such contract such clauses as are essential 
        for the protection of the Federal Government's interest in--
                    (I) a particular subcontract, as determined in 
                writing by the contracting officer for such contract; 
                or
                    (II) a class of subcontracts, as determined by the 
                Secretary of Defense or Secretary of the military 
                department concerned, in consultation with the 
                Administrator for Federal Procurement Policy.
            (iii) The Department of Defense may not require a 
        contractor for the acquisition of commercial items to include 
        in a subcontract for that acquisition any clause other than 
        those clauses authorized under clause (i) or (ii).
            (C) Notwithstanding subparagraphs (A) and (B) of this 
        paragraph, the Department of Defense may use uniform contract 
        clauses developed under paragraphs (2) and (3) of section 
        824(b) of the National Defense Authorization Act for Fiscal 
        Years 1990 and 1991 (10 U.S.C. 2325 note; Public Law 101-189) 
        until September 30, 1995.
            (3) Warranties.--The Federal Acquisition Regulation shall 
        require that, to the maximum extent practicable, the Department 
        of Defense shall take advantage of warranties offered by 
        commercial contractors and use such warranties for the repair 
        and replacement of commercial items.
            (4) Market acceptance.--The Federal Acquisition Regulation 
        shall direct the Department of Defense to require, where 
        appropriate and in accordance with criteria prescribed in the 
        regulations, offerors to demonstrate in their offers that 
        products being offered have--
                    (A)(i) achieved a level of commercial market 
                acceptance necessary to indicate that the products are 
                suitable for the Department's use; or
                    (ii) been satisfactorily supplied under current or 
                recent contracts for the same or similar requirements; 
                and
                    (B) otherwise meet the product description, 
                specifications, or other criteria prescribed by the 
                public notice and solicitation.
            (5) Past performance.--The Federal Acquisition Regulation 
        shall provide guidance to the Department of Defense on the use 
        of past performance of products and sources as a factor in 
        award decisions.

                        TITLE IX--EFFECTIVE DATE

SEC. 901. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act and the 
amendments made by this Act shall take effect on the date of the 
enactment of this Act.

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