[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1982 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 1982

    To modernize and streamline Federal acquisition management and 
                  procedures, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             March 24 (legislative day, February 22), 1994

  Mr. Roth (for himself and Mr. Cohen) introduced the following bill; 
  which was read twice and referred to the Committee on Governmental 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
    To modernize and streamline Federal acquisition management and 
                  procedures, and for other purposes.

    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 ``Federal Acquisition Management 
Improvement Act of 1994''.

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--ACQUISITION IMPROVEMENT GOALS

Sec. 101. Reduction in Federal Government procurement costs.
Sec. 102. Armed services acquisitions.
Sec. 103. Civilian agency acquisitions.
               TITLE II--ACQUISITION MANAGEMENT POLICIES

                Subtitle A--Armed Services Acquisitions

Sec. 201. Implementation of defense acquisition workforce amendments.
Sec. 202. Enhanced encouragement of excellence in the defense 
                            acquisition workforce.
Sec. 203. Program management stability.
                Subtitle B--Civilian Agency Acquisitions

Sec. 211. Policy regarding training of Federal acquisition workforce.
Sec. 212. Acquisition workforce management system.
Sec. 213. Enhanced encouragement of excellence in the Federal 
                            acquisition workforce.
Sec. 214. Inapplicability to Department of Defense.
           TITLE III--ORGANIZATION OF THE ACQUISITION PROCESS

                Subtitle A--Armed Services Procurements

Sec. 301. Reorganization of acquisition authority.
Sec. 302. Phase funding and review of defense acquisition programs.
                Subtitle B--Civilian Agency Acquisitions

Sec. 311. Customer-driven acquisitions.
Sec. 312. Review of agency organization for acquisitions.
Sec. 313. Acquisition of noncommercial items.
Sec. 314. Inapplicability to Department of Defense.
                      TITLE IV--CONTRACT FORMATION

                Subtitle A--Specifications and Standards

Sec. 401. Preference for commercial items.
               Subtitle B--Performance-Based Contracting

Sec. 411. Use of incentive contracts.
Sec. 412. Guidance regarding consideration of past contract performance 
                            of offerors.
           TITLE V--PERFORMANCE-BASED CONTRACT ADMINISTRATION

Sec. 501. Contract financing in armed services acquisitions.
Sec. 502. Contract financing in civilian agency acquisitions.
                  TITLE VI--DAVIS-BACON ACT EXEMPTION

Sec. 601. Contracts not in excess of $500,000.
             TITLE VII--MISCELLANEOUS CONFORMING AMENDMENTS

Sec. 701. Modification of the responsibility of the Comptroller of the 
                            Department of Defense for defense 
                            acquisition budgets.
Sec. 702. The defense acquisition work force.
Sec. 703. Procurement procedures generally.
Sec. 704. Research and development.
Sec. 705. Miscellaneous procurement provisions.
Sec. 706. Major defense acquisition programs.
Sec. 707. Service specific acquisition authority.
Sec. 708. Other laws.
                       TITLE VIII--EFFECTIVE DATE

Sec. 801. Effective date.

                 TITLE I--ACQUISITION IMPROVEMENT GOALS

SEC. 101. REDUCTION IN FEDERAL GOVERNMENT PROCUREMENT COSTS.

    (a) Policy.--It is the policy of Congress that, by the end of 
fiscal year 1999, there should be achieved Federal budget savings in 
procurement costs of the Federal Government (including the personnel 
and other overhead costs associated with procurements for the Federal 
Government) in a total amount of at least the $22,500,000,000 that is 
projected for savings from Federal procurement streamlining in the 
report on the National Performance Review carried out during 1993 under 
the direction of the Vice President.
    (b) Annual Progress Report.--The Director of the Office of 
Management and Budget shall transmit to Congress each year, at the same 
time that the President submits the budget to Congress pursuant to 
section 1105 of title 31, United States Code, an assessment of the 
progress made in implementing the policy set out in subsection (a).

SEC. 102. ARMED SERVICES ACQUISITIONS.

    (a) Acquisition Performance Goals.--Section 2301 of title 10, 
United States Code, is amended by adding at the end the following new 
subsection:
    ``(e)(1) It is the policy of Congress that, on and after January 1, 
2000--
            ``(A) the Department of Defense should achieve, on average, 
        90 percent of the cost and schedule goals established for the 
        research and development programs and acquisition programs of 
        the Department of Defense; and
            ``(B) the average period necessary for converting an 
        emerging technology into initial operational capability for the 
        Department of Defense should not exceed 8 years.
    ``(2) Whenever it is necessary in order to implement the policy set 
out in paragraph (1), the Secretary of Defense should--
            ``(A) identify and consider for termination research and 
        development programs and acquisition programs of the Department 
        of Defense that are not achieving the cost, performance, and 
        schedule goals of the programs taking into consideration--
                    ``(i) the needs of the Department known as of the 
                time of the consideration of such programs for 
                termination;
                    ``(ii) the state of the technology or technologies 
                relevant to the programs and to the needs of the 
                Department;
                    ``(iii) the estimated costs and projected schedules 
                necessary for the completion of such programs; and
                    ``(iv) other pertinent information; and
            ``(B) identify existing and potential research and 
        development programs and acquisition programs that are suitable 
        alternatives for programs considered for termination pursuant 
        to subparagraph (A).''.
    (b) Responsibility for Departmental Oversight of Acquisition 
Program Goals.--
            (1) In general.--Chapter 131 of title 10, United States 
        Code, is amended by adding at the end the following new 
        section:
``Sec. 2219. Responsibility for departmental oversight of cost, 
              performance, and schedule goals of acquisition programs
    ``(a) Cost Goals.--The Comptroller of the Department of Defense 
shall evaluate the cost goals proposed for each phase of an acquisition 
program of the Department of Defense.
    ``(b) Performance and Schedule Goals.--The Joint Chiefs of Staff 
shall approve or define the performance and schedule goals for 
acquisition programs of the Department of Defense. The Joint Chiefs of 
Staff shall approve the performance goals for acquisition programs on 
the basis of cost, schedule, performance, and risk.
    ``(c) Annual Reporting Requirement.--The Secretary of Defense shall 
include in the annual report submitted to Congress pursuant to section 
113(c) of this title--
            ``(1) an assessment of the progress made in implementing 
        the policies set out in section 2301(e)(1) of this title; and
            ``(2) any actions taken or considered in accordance with 
        section 2301(e)(2) of this title.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 131 of title 10, United States Code, is 
        amended by adding at the end the following new item:

``2219. Responsibility for departmental oversight of cost, performance, 
                            and schedule goals of acquisition 
                            programs.''.

SEC. 103. CIVILIAN AGENCY ACQUISITIONS.

    (a) Acquisition Performance Goals.--
            (1) In general.--It is the policy of Congress that, on and 
        after January 1, 2000, each department and agency of the 
        Federal Government should achieve, on average, 90 percent of 
        the cost and schedule goals established for the research and 
        development programs and acquisition programs of that 
        department or agency.
            (2) Nonduplication of goal statement.--Paragraph (1) does 
        not apply to the Department of Defense. For the statement of 
        the corresponding goal for the Department of Defense see 
        subsection (e)(1)(A) of section 2301 of title 10, United States 
        Code, as added by section 102(a).
    (b) Responsibility for Agency Oversight of Acquisition Program Cost 
Goals.--The Office of Federal Procurement Policy Act (41 U.S.C. 401 et 
seq.) is amended by adding at the end the following new section:

        ``agency oversight of cost goals of acquisition programs

    ``Sec. 29. The chief financial officer of an executive agency shall 
evaluate the cost goals proposed for each phase of an acquisition 
program of the agency.''.
    (c) Responsibility for Agency Oversight of Acquisition Program 
Performance and Schedule Goals.--Section 303A of the Federal Property 
and Administrative Services Act of 1949 (41 U.S.C. 253a) is amended by 
adding at the end the following new subsection:
    ``(c) The head of an executive agency shall approve or define the 
performance and schedule goals for acquisition programs of that agency. 
The agency head shall approve the performance goals for acquisition 
programs on the basis of cost, schedule, performance, and risk.''.

               TITLE II--ACQUISITION MANAGEMENT POLICIES

                Subtitle A--Armed Services Acquisitions

SEC. 201. IMPLEMENTATION OF DEFENSE ACQUISITION WORKFORCE AMENDMENTS.

    The Congress--
            (1) urges the Secretary of Defense to expedite the 
        implementation of the provisions of chapter 87 of title 10, 
        United States Code, relating to the acquisition workforce of 
        the Department of Defense; and
            (2) reemphasizes the importance of ensuring that the 
        acquisition workforce is educated and trained in accordance 
        with the standards set out in the provisions of such chapter.

SEC. 202. ENHANCED ENCOURAGEMENT OF EXCELLENCE IN THE DEFENSE 
              ACQUISITION WORKFORCE.

    (a) Enhanced System of Incentives and Adverse Actions.--
            (1) Review and action required.--The Secretary of Defense 
        shall review the incentives and personnel actions available to 
        the Secretary for encouraging excellence in the acquisition 
        workforce of the Department of Defense and, to the maximum 
        extent practicable, provide an enhanced system of incentives 
        for the encouragement of excellence in such workforce.
            (2) Required consideration.--The Secretary shall 
        specifically consider whether action should be taken under 
        section 1736 of title 10, United States Code (as added by 
        subsection (b)), in the case of acquisition program executive 
        officers and acquisition program managers.
            (3) Regulations.--The Secretary shall prescribe in 
        regulations a system of incentives for encouraging professional 
        excellence among the functional analysts in the defense 
        acquisition workforce.
    (b) Enhanced Grades of Certain Acquisition Managers.--
            (1) In general.--Subchapter III of chapter 87 of title 10, 
        United States Code, is amended--
                    (A) by redesignating sections 1736 and 1737 as 
                sections 1737 and 1738, respectively; and
                    (B) by inserting after section 1735 the following 
                new section 1736:
``Sec. 1736. Grade of certain acquisition managers
    ``(a) Program Executive Officer.--(1)(A) Subject to subparagraph 
(B), the position of acquisition program executive officer carries the 
grade of brigadier general, rear admiral (lower half), major general, 
or rear admiral, as the Secretary of Defense determines appropriate.
    ``(B) The President may designate a position of acquisition program 
executive officer as a position of importance and responsibility to 
carry the grade of lieutenant general or vice admiral under section 
601(a) of this title.
    ``(C) The President or the Secretary of Defense may designate a 
position of acquisition program executive officer to carry a grade 
above brigadier general or rear admiral (lower half) only when the 
President or Secretary, as the case may be, determines that the member 
serving in that position has performed the duties of the position of an 
acquisition program executive officer with distinction.
    ``(2) Notwithstanding any other provision of law (other than a 
provision of law limiting the number of positions or personnel in a 
certain grade), the Secretary of Defense may fix the civilian grade of 
a position of acquisition program executive officer at a civilian 
equivalent of a grade referred to in paragraph (1). The Secretary shall 
fix the civilian grade for the position of a particular employee at a 
grade above the civilian equivalent of brigadier general or rear 
admiral (lower half) only if the Secretary determines that the employee 
serving in that position has performed the duties of the position of an 
acquisition program executive officer with distinction.
    ``(b) Acquisition Program Manager.--(1)(A) The position of 
acquisition program manager carries the grade of colonel, brigadier 
general, or major general, or, in the case of the Navy, captain, rear 
admiral (lower half), or rear admiral, as the Secretary of Defense 
determines appropriate.
    ``(B) The Secretary of Defense may designate a position of 
acquisition program manager to carry a grade above colonel or (in the 
case of the Navy) captain only when the Secretary determines that the 
member serving in that position has performed the duties of the 
position of an acquisition program manager with distinction.
    ``(2) Notwithstanding any other provision of law (other than a 
provision of law limiting the number of positions or personnel in a 
certain grade), the Secretary of Defense may fix the civilian grade of 
the position of civilian acquisition program manager at a civilian 
equivalent of a grade referred to in paragraph (1). The Secretary shall 
fix the civilian grade for the position of a particular employee at a 
grade above the civilian equivalent of colonel or (in the case of the 
Navy) captain only if the Secretary determines that the employee 
serving in that position has performed the duties of the position of an 
acquisition program executive officer with distinction.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of such subchapter is amended by striking out the 
        items relating to sections 1736 and 1737 and inserting in lieu 
        thereof the following:

``1736. Grade of certain acquisition managers.
``1737. Applicability.
``1738. Definitions and general provisions.''.
    (c) Pay for Performance in Acquisition Positions.--
            (1) In general.--Subchapter II of chapter 87 of title 10, 
        United States Code, is amended--
                    (A) by redesignating sections 1725 as 1726; and
                    (B) by inserting after section 1724 the following 
                new section 1725:
``Sec. 1725. Pay for performance
    ``(a) Pay Rates.--(1) The Secretary of Defense may provide for the 
pay rate of an employee in an acquisition position within the 
Department of Defense to be based, to an appropriate extent, on 
specific criteria that relates the pay rate of such employee to the 
employee's contribution to the achievement of the policy goals set 
forth in section 2301(e)(1) of this title and performance goals 
approved or defined in accordance with section 2219(b) of this title.
    ``(2) A pay rate established pursuant to paragraph (1) for an 
employee in a position referred to in that subsection may not exceed 
the lesser of--
            ``(A) the amount equal to 130 percent of the maximum pay 
        rate prescribed under law (other than paragraph (1)) for the 
        grade or other pay level of that position; or
            ``(B) the rate of basic pay payable for level V of the 
        Executive Schedule.
    ``(b) Relationship of Personnel Budget to Achievement of Goals.--
The Secretary of Defense, in approving or formulating the personnel 
budget of a military department or Defense Agency for a fiscal year, 
shall consider whether increased funding is appropriate on the basis of 
the achievement by the military department or Defense Agency of the 
schedule, performance, and cost goals for acquisition programs of the 
Department of Defense referred to in section 2301(e)(1) of this 
title.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of such subchapter is amended by striking out the 
        item relating to section 1725 and inserting in lieu thereof the 
        following:

``1725. Pay for performance.
``1726. Office of Personnel Management approval.''.

SEC. 203. PROGRAM MANAGEMENT STABILITY.

    (a) Assignment Period for Program Managers.--Section 1734 of title 
10, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) by striking out ``the major milestone'' 
                        in subparagraph (A) and all that follows 
                        through the semicolon in such subparagraph and 
                        inserting in lieu thereof ``a phase in the 
                        acquisition program cycle;''; and
                            (ii) by striking out the second sentence 
                        and inserting in lieu thereof the following:
``Except as provided in subsection (c), a person in the position of 
program manager or deputy program manager may not be reassigned from 
such position before completion of a phase in the acquisition program 
cycle.''; and
                    (B) in paragraph (2)--
                            (i) in the first sentence, by striking out 
                        ``the first major milestone'' and all that 
                        follows in the first sentence and inserting in 
                        lieu thereof ``a phase of the acquisition 
                        program cycle.''; and
                            (ii) in the second sentence, by striking 
                        out ``Secretary concerned under subsection 
                        (d)'' and inserting in lieu thereof ``Secretary 
                        of Defense under subsection (c)''; and
            (2) by striking out subsection (c).
    (b) Waiver Authority.--Such section is further amended by striking 
out subsection (d) and inserting in lieu thereof the following:
    ``(c) Waiver of Assignment Period.--(1) With respect to a person 
assigned to a critical acquisition position, the Secretary of Defense 
may waive the prohibition on reassignment of that person (in subsection 
(a)(1) or (b)(1)) and the service obligation in an agreement executed 
by that person (under subsection (a)(2) or (b)(2)), but only in 
exceptional circumstances (specified in regulations prescribed by the 
Secretary) in which a waiver is necessary.
    ``(2) The Director of Acquisition Education, Training, and Career 
Development shall maintain a written record of the rationale for each 
waiver granted under this subsection.''.
    (c) Conforming Amendments and Definition.--Such section is further 
amended--
            (1) by redesignating subsection (e) as subsection (d); 
        and--
                    (A) in paragraph (1) of such subsection, by 
                striking out ``a program manager, after completion of a 
                major program milestone, whichever is longer'' in the 
                first sentence and inserting in lieu thereof ``a 
                program manager or deputy program manager, after 
                completion of a phase of the acquisition program 
                cycle''; and
                    (B) in paragraph (2) of such subsection, by 
                striking out ``of the department concerned'' in the 
                first sentence;
            (2) by redesignating subsection (f) as subsection (e); and
            (3) by striking out subsections (g) and (h) and inserting 
        in lieu thereof the following:
    ``(f) In this section, the term `phase of an acquisition program 
cycle' shall have the meaning given such term in the regulations 
prescribed pursuant to section 2220 of this title.''.

                Subtitle B--Civilian Agency Acquisitions

SEC. 211. POLICY REGARDING TRAINING OF FEDERAL ACQUISITION WORKFORCE.

    The head of each department or agency of the Federal Government 
should ensure that the acquisition workforce of the department or 
agency is trained to perform effectively and efficiently the 
acquisition functions of the Federal Government.

SEC. 212. ACQUISITION WORKFORCE MANAGEMENT SYSTEM.

    (a) Requirement for System.--The head of each department or agency 
in the executive branch shall, on an expedited basis, establish 
policies and procedures for the effective management (including 
accession, education, training, and career development) of persons 
serving in acquisition positions in the department or agency.
    (b) Similarity to Defense Acquisition Workforce System.--To the 
maximum extent practicable, the department or agency head shall 
replicate within the department or agency the acquisition workforce 
policies and procedures that are set forth in and implemented under the 
provisions of chapter 87 of title 10, United States Code, relating to 
the acquisition workforce of the Department of Defense.
    (c) Authority.--The head of a department or agency referred to in 
subsection (a) may exercise the same authority with respect to the 
acquisition workforce of that department or agency as the Secretary of 
Defense or any other official within the Department of Defense may 
exercise with respect to the defense acquisition workforce under the 
provisions of chapter 87 of title 10, United States Code.
    (d) Nonduplication of Requirements and Authority.--This section 
does not apply to the Department of Defense.

SEC. 213. ENHANCED ENCOURAGEMENT OF EXCELLENCE IN THE FEDERAL 
              ACQUISITION WORKFORCE.

    (a) Enhanced System of Incentives and Adverse Actions.--The head of 
each department or agency in the executive branch shall review the 
incentives and personnel actions available to such official for 
encouraging excellence in the acquisition workforce of that department 
or agency and, to the maximum extent practicable, provide an enhanced 
system of incentives for the encouragement of excellence in such 
workforce. The enhanced system shall--
            (1) in accordance with applicable law, relate pay to 
        performance; and
            (2) provide for consideration of the extent to which the 
        performance of personnel in such workforce contributes to the 
        achievement of cost goals, schedule goals, and performance 
        goals established for acquisition programs of the department or 
        agency.
    (b) Increased Grades for Certain Acquisition Managers.--
            (1) Consideration required.--The head of each department or 
        agency in the executive branch shall specifically consider 
        whether the grade of the position of any acquisition program 
        manager should be increased.
            (2) Applicable criteria and limits.--In carrying out 
        paragraph (1), the department or agency head shall apply the 
        same criteria and limits as apply to civilian personnel of the 
        defense acquisition workforce under section 1736 of title 10, 
        United States Code (as added by section 202(b)).
    (c) Incentives for Technical Specialists.--The head of each 
department or agency in the executive branch shall prescribe in 
regulations a system of incentives for encouraging professional 
excellence among the technical specialists in that department or agency 
who support acquisitions of the department or agency.

SEC. 214. INAPPLICABILITY TO DEPARTMENT OF DEFENSE.

    This subtitle does not apply to the Department of Defense.

           TITLE III--ORGANIZATION OF THE ACQUISITION PROCESS

                Subtitle A--Armed Services Procurements

SEC. 301. REORGANIZATION OF ACQUISITION AUTHORITY.

    (a) Under Secretary of Defense for Acquisition.--Section 133(b) of 
title 10, United States Code, is amended--
            (1) by redesignating paragraphs (3) and (4) as paragraphs 
        (4) and (5), respectively; and
            (2) by striking out paragraphs (1) and (2) and inserting in 
        lieu thereof the following:
            ``(1) prescribing policies for research, development, and 
        acquisition activities of the Department of Defense;
            ``(2) planning, programming, and overseeing the research, 
        development, and acquisition activities of the Department of 
        Defense;
            ``(3) assisting in the preparation and integration of 
        budgets for the research, development, and acquisition 
        activities of the Department of Defense, including assisting in 
        the planning, programming, and budgeting system with respect to 
        such activities;''.
    (b) Defense Research, Development, and Acquisition Agency.--
            (1) Establishment.--Part I of subtitle A of title 10, 
        United States Code, is amended by inserting after chapter 9 the 
        following new chapter:

  ``CHAPTER 10--DEFENSE RESEARCH, DEVELOPMENT, AND ACQUISITION AGENCY

``Sec.
``231. Establishment.
``232. Use of agency for all research, development, and acquisition 
                            activities.
``233. Duties.
``234. Program executive officers.
``235. Program managers.
``236. Functional analytical capability.
``Sec.  231. Establishment
    ``(a) Agency.--There is established a Defense Research, 
Development, and Acquisition Agency in the Department of Defense.
    ``(b) Director.--(1) The head of the agency is the Director of 
Defense Research, Development, and Acquisition who shall be appointed 
by the Under Secretary of Defense for Acquisition from among persons 
who are career professional employees in the acquisition workforce of 
any Federal agency.
    ``(2) A member of the armed forces, while serving as the Director, 
holds the grade of general or, in the case of an officer of the Navy, 
admiral. A civilian, while serving as the Director, holds an equivalent 
civilian grade.
    ``(c) Chief of Engineering and Analysis.--(1) In the Defense 
Research, Development, and Acquisition Agency there is a Chief of 
Engineering and Analysis who shall be appointed by the Director from 
among the career professional employees in the acquisition workforce of 
the Department of Defense.
    ``(2) The Director shall evaluate the performance of the Chief of 
Engineering and Analysis. The Director may not delegate the performance 
of the evaluation responsibility.
    ``(3) The Chief of Engineering and Analysis shall be the senior 
technical adviser for the Defense Research, Development, and 
Acquisition Agency.
``Sec.  232. Use of agency for all research, development, and 
              acquisition activities
    ``Subject to sections 3013(h), 5013(h), 8013(h) of this title, the 
Director shall conduct the research, development, and acquisition 
activities of the Department of Defense, including the activities of 
the research, development, and engineering centers of the Department of 
Defense.
``Sec.  233. Duties
    ``The responsibilities of the Under Secretary of Defense for 
Acquisition that are to be performed by the Defense Research, 
Development, and Acquisition Agency include the following:
            ``(1) Planning, programming, and carrying out the research, 
        development, and acquisition activities of the Department of 
        Defense.
            ``(2) Advising the Secretary of Defense and the Secretaries 
        of the military departments regarding the preparation and 
        integration of the budgets for the research, development, and 
        acquisition activities of the Department of Defense.
            ``(3) Identifying and informing operational commanders 
        regarding alternative technology solutions to fulfill emerging 
        requirements.
            ``(4) Ensuring that the acquisition plan for each 
        acquisition program realistically reflects the budget and 
        related decisions made for that program.
            ``(5) Conducting research on management techniques as well 
        as on individual systems.
``Sec. 234. Program executive officers
    ``(a) Selection and Evaluation.--The program executive officers of 
the Defense Research, Development, and Acquisition Agency shall be 
selected and evaluated by the Director.
    ``(b) Duties.--The duties of a program executive officer are as 
follows:
            ``(1) To manage acquisition programs assigned to the 
        program executive officer.
            ``(2) To manage related technical support resources.
            ``(3) To establish and conduct integrated decision team 
        meetings.
            ``(4) To provide technological advice (including advice 
        regarding costs, schedule, and performance data relating to 
        alternative technological approaches for fulfilling emerging 
        requirements) to users of program products and to the officials 
        within the Department of Defense who plan, program, and budget 
        for the acquisition programs assigned to the program executive 
        officer.
    ``(c) Organization of Personnel.--The program executive officers 
shall be organized on the basis of unique mission areas or, in the case 
of programs for systems specifically relating to certain classes of 
targets, on the basis of target classes. No program executive officer 
may be organized with other program executive officers on both bases. 
The Secretary of Defense shall identify the mission areas or target 
classes on the basis of which program executive officers may be 
organized.
    ``(d) Acquisition Life-Cycle Management.--The responsibilities of a 
program executive officer for a weapon acquisition program shall cover 
the entire life cycle of the program.
    ``(e) User and Operator Interaction.--(1) The Chairman of the Joint 
Chiefs of Staff, in consultation with the Under Secretary of Defense 
for Acquisition, shall prescribe policies and procedures for the 
interaction of the commanders of the unified and specified combatant 
commands with program executive officers regarding the initiation and 
conduct of weapon acquisition programs. The policies and procedures 
shall include provisions for enabling such commands to perform 
operational and acceptance testing of weapons acquired pursuant to such 
programs.
    ``(2) The Comptroller of the Department of Defense, in consultation 
with the Under Secretary of Defense for Acquisition and the Secretaries 
of the military departments, shall prescribe policies and procedures 
for the interaction between the commanders of the unified and specified 
combatant commands and the program executive officers regarding funding 
for weapon acquisition programs.
``Sec.  235. Program managers
    ``(a) Selection and Evaluation.--Each program manager of the 
Defense Research, Development, and Acquisition Agency shall be selected 
and evaluated by the Director and a program executive officer and shall 
report directly to the program executive officer having primary 
responsibility for the system being acquired under the program.
    ``(b) Duties.--A program manager is responsible for the routine 
management of a research, development, and acquisition program, 
including the obtaining of necessary logistical support and support 
services for that program.
    ``(c) Relationship to Program Executive Officers.--The management 
functions of a program manager should not duplicate the management 
functions of a program executive officer.
``Sec.  236. Functional analytical capability
    ``(a) Responsibility of Chief of Engineering and Analysis.--The 
Chief of Engineering and Analysis shall be responsible for ensuring 
that each of the functional analytical capabilities provided to the 
Director, acquisition program executive officers, and acquisition 
program managers in connection with acquisition programs of the 
Department of Defense is the most advanced capability of its type.
    ``(b) Functional Analytical Capabilities.--The functional 
analytical capabilities referred to in subsection (a) are as follows:
            ``(1) Cost and affordability analysis.
            ``(2) Logistics and support analysis.
            ``(3) Reliability and maintainability analysis.
            ``(4) Producibility analysis.
            ``(5) Environmental analysis.
            ``(6) Configuration management.
            ``(7) Warfighting and battlefield performance and utility 
        analysis.
            ``(8) System engineering.
            ``(9) Any other analytical capability that may be necessary 
        for ensuring the timeliness, performance, and affordability of 
        acquisition programs.''.
            (2) Clerical amendment.--The tables of chapters at the 
        beginning of subtitle A of title 10, United States Code, and at 
        the beginning of part I of such subtitle, are amended by 
        inserting after the item relating to chapter 9 the following 
        new item:

``10. Defense Research, Development, and Acquisition Agency.     231''.
    (c) Limitation of Procurement Authority of Military Departments.--
            (1) Army.--Section 3013 of title 10, United States Code, is 
        amended--
                    (A) in subsection (b)--
                            (i) by striking out ``and subject to the 
                        provisions of chapter 6'' and inserting in lieu 
                        thereof ``, subject to the provisions of 
                        chapter 6, and subject to subsection (h),''; 
                        and
                            (ii) in paragraph (4), by striking out 
                        ``(including research and development)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(h)(1) The Secretary of the Army shall be responsible for 
procurements of property and services, and may exercise authority to 
conduct such procurements, only to the extent that the Secretary of 
Defense determines necessary for the sustainment of operations of the 
Army. The Secretary of Defense shall prescribe in regulations the 
extent of the responsibility and authority of the Secretary of the Army 
for procurements of property and services.
    ``(2) In conducting a procurement in accordance with paragraph (1), 
the Secretary of the Army shall be subject to the same laws as are 
applicable to acquisitions conducted by the Secretary of Defense.''.
            (2) Navy.--Section 5013 of title 10, United States Code, is 
        amended--
                    (A) in subsection (b)--
                            (i) by striking out ``and subject to the 
                        provisions of chapter 6'' and inserting in lieu 
                        thereof ``, subject to the provisions of 
                        chapter 6, and subject to subsection (h),''; 
                        and
                            (ii) in paragraph (4), by striking out 
                        ``(including research and development)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(h)(1) The Secretary of the Navy shall be responsible for 
procurements of property and services, and may exercise authority to 
conduct such procurements, only to the extent that the Secretary of 
Defense determines necessary for the sustainment of operations of the 
Navy. The Secretary of Defense shall prescribe in regulations the 
extent of the responsibility and authority of the Secretary of the Navy 
for procurements of property and services.
    ``(2) In conducting a procurement in accordance with paragraph (1), 
the Secretary of the Navy shall be subject to the same laws as are 
applicable to acquisitions conducted by the Secretary of Defense.''.
            (3) Air force.--Section 8013 of title 10, United States 
        Code, is amended--
                    (A) in subsection (b)--
                            (i) by striking out ``and subject to the 
                        provisions of chapter 6'' and inserting in lieu 
                        thereof ``, subject to the provisions of 
                        chapter 6, and subject to subsection (h),''; 
                        and
                            (ii) in paragraph (4), by striking out 
                        ``(including research and development)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(h)(1) The Secretary of the Air Force shall be responsible for 
procurements of property and services, and may exercise authority to 
conduct such procurements, only to the extent that the Secretary of 
Defense determines necessary for the sustainment of operations of the 
Air Force. The Secretary of Defense shall prescribe in regulations the 
extent of the responsibility and authority of the Secretary of the Air 
Force for procurements of property and services.
    ``(2) In conducting a procurement in accordance with paragraph (1), 
the Secretary of the Air Force shall be subject to the same laws as are 
applicable to acquisitions conducted by the Secretary of Defense.''.
    (4) Section 2302(1) of title 10, United States Code, is amended by 
striking out ``the Secretary of the Army, the Secretary of the Navy, 
the Secretary of the Air Force,''.
    (d) Transfer of Functions.--
            (1) Military departments.--Except as provided in paragraph 
        (3), all research, development, and acquisition functions of 
        the Secretaries of the military departments are transferred to 
        the Secretary of Defense.
            (2) Procurement agencies, commands, and offices.--Except as 
        provided in paragraph (3), there is transferred to the Defense 
        Research, Development, and Acquisition Agency referred to in 
        section 231(a) of title 10, United States Code (as added by 
        subsection (b)), all functions of the following organizations:
                    (A) The Defense Logistics Agency.
                    (B) The Advanced Research Projects Agency.
                    (C) The following procurement commands of the Army:
                            (i) The Army Materiel Command.
                            (ii) The Army Information Systems Command.
                            (iii) The Army Strategic Defense Command.
                    (D) The following procurement commands of the Navy 
                and Marine Corps:
                            (i) The Navy weapons systems commands.
                            (ii) The Navy Strategic Systems Program 
                        Office.
                            (iii) The Marine Corps Research, 
                        Development and Acquisition Command.
                    (E) The Air Force Materiel Command.
                    (F) Any successor organization to any agency, 
                command, or office named in subparagraphs (A) through 
                (E).
                    (G) Each agency or command within the Department of 
                Defense not referred to in subparagraphs (A) through 
                (F) that, on the day before the effective date of this 
                section, has as a primary mission or function the 
                performance of a research, development, or acquisition 
                function of the Department of Defense.
            (3) Exceptions to transfer requirement.--
                    (A) In general.--The following functions of the 
                Secretaries of the military departments are not 
                transferred to the Secretary of Defense:
                            (i) Functions that relate to planning, 
                        programming, and budgeting.
                            (ii) Functions to be performed by the 
                        Secretary of a military department pursuant to 
                        section 3013(h), 5013(h), or 8013(h) of title 
                        10, United States Code, as added by subsection 
                        (c).
                    (B) Discretionary exception.--To the extent 
                prescribed by the Secretary of Defense, functions 
                referred to in subparagraph (A)(ii) that are performed 
                by an organization referred to in paragraph (2) need 
                not be transferred in accordance with that paragraph.
            (4) Termination of organization.--The Secretary of Defense 
        shall terminate each organization from which all of its 
        functions are transferred in accordance with this subsection.
    (e) Savings Provisions.--
            (1) Regulations, instruments, rights, and privileges.--All 
        rules, regulations, contracts, orders, determinations, permits, 
        certificates, licenses, grants, and privileges--
                    (A) which have been issued, made, granted, or 
                allowed to become effective by the Secretary or other 
                officer or employee of a military department, the head 
                of a Defense Agency of the Department of Defense, or by 
                a court of competent jurisdiction, in connection with 
                any research, development, or acquisition activity of a 
                military department or Defense Agency, and
                    (B) which are in effect on the effective date of 
                this section,
        shall continue in effect according to their terms until 
        modified, terminated, superseded, set aside, or revoked in 
        accordance with law by the Secretary of Defense, the Under 
        Secretary of Defense for Acquisition, or another authorized 
        official, by a court of competent jurisdiction, or by operation 
        of law.
            (2) Proceedings.--
                    (A) Proceedings not affected.--The provisions of 
                this section shall not affect any proceeding, including 
                any proceeding involving a claim or application, in 
                connection with any acquisition activity of a military 
                department or a Defense Agency of the Department of 
                Defense that is pending before that military department 
                or Defense Agency on the effective date of this 
                section.
                    (B) Orders.--Orders may be issued in any such 
                proceeding, appeals may be taken therefrom, and 
                payments may be made pursuant to such orders, as if 
                this section had not been enacted. An order issued in 
                any such proceeding shall continue in effect until 
                modified, terminated, superseded, or revoked by the 
                Secretary of Defense or the Under Secretary of Defense 
                for Acquisition, by a court of competent jurisdiction, 
                or by operation of law.
                    (C) Rule of construction.--Nothing in this 
                paragraph prohibits the discontinuance or modification 
                of any such proceeding under the same terms and 
                conditions and to the same extent that such proceeding 
                could have been discontinued or modified if this 
                section had not been enacted.
            (3) Regulations.--The Secretary of Defense may prescribe 
        regulations providing for the orderly transfer of proceedings 
        continued under paragraph (2) to the Secretary of Defense or to 
        the Under Secretary of Defense for Acquisition.

SEC. 302. PHASE FUNDING AND REVIEW OF DEFENSE ACQUISITION PROGRAMS.

    (a) In General.--Chapter 131 of title 10, United States Code, as 
amended by section 102(b), is further amended by adding at the end the 
following new sections:
``Sec. 2220. Results oriented acquisition program cycle
    ``The Secretary of Defense shall define in regulations a simplified 
acquisition program cycle that is results-oriented and consists of the 
following phases:
            ``(1) The integrated decision team meeting which--
                    ``(A) may be requested by a potential user of the 
                system or component to be acquired, the head of a 
                laboratory, or a program office on such bases as the 
                emergence of a new military requirement, cost savings 
                opportunity, or new technology opportunity;
                    ``(B) shall be conducted by a program executive 
                officer; and
                    ``(C) shall usually be completed within 1 to 3 
                months.
            ``(2) The prototype development and testing phase which--
                    ``(A) shall include operational tests and concerns 
                relating to manufacturing operations and life cycle 
                support;
                    ``(B) shall usually be completed within 6 to 36 
                months; and
                    ``(C) shall produce sufficient numbers of 
                prototypes to assess operational utility.
            ``(3) Product integration, development, and testing which--
                    ``(A) includes full-scale development, operational 
                testing, and integration of components; and
                    ``(B) shall usually be completed within 1 to 5 
                years.
            ``(4) Production, integration into existing systems, or 
        production and integration into existing systems.
``Sec. 2221. Funding for results oriented acquisition program cycle
    ``(a) Program Phase Details To Be Submitted to Congress.--Before 
initial funding is made available for a phase of the acquisition 
program cycle of an acquisition program which requires congressional 
authorization of appropriations, the Secretary of Defense shall submit 
to Congress information about the objectives and plans for the conduct 
of that phase and the funding requirements for the entire phase. The 
Secretary shall include in such information objective, quantifiable 
criteria for assessing the extent to which the stated objectives and 
goals are achieved.
    ``(b) Full Phase Funding.--(1) In authorizing appropriations for an 
acquisition program that requires congressional authorization, Congress 
shall provide in an Act authorizing appropriations for the Department 
of Defense an authorization of appropriations for a phase of the 
acquisition program in a single amount that is sufficient for carrying 
out that phase. Such an authorization of appropriations shall be stated 
in the Act as a specific item.
    ``(2) In each Act making appropriations for the Department of 
Defense Congress shall specify the phase of each such acquisition 
program of the department for which an appropriation is made and the 
amount of the appropriation for the phase of that program.
``Sec. 2222. Major program decision
    ``(a) Single Major Decision Point.--The acquisition program 
approval process within the Department of Defense shall have one major 
decision point which shall occur for an acquisition program before that 
program proceeds into product integration and development.
    ``(b) Determinations at Decision Point.--At the major decision 
point for an acquisition program, the Under Secretary of Defense for 
Acquisition in consultation with the Vice Chairman Joint Chief of Staff 
shall--
            ``(1) review the program;
            ``(2) determine whether the program should continue to be 
        carried out beyond product integration and development; and
            ``(3) decide whether--
                    ``(A) to commit to further development;
                    ``(B) to require further prototyping; or
                    ``(C) to terminate the program.
    ``(c) Considerations.--In the review of an acquisition program, the 
Under Secretary shall consider the potential benefits, affordability, 
needs, and risks of the program.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 131 of title 10, United States Code, as amended by section 
102(b), is further amended by adding at the end the following new 
items:

``2220. Results oriented acquisition program cycle.
``2221. Funding for results oriented acquisition program cycle.
``2222. Major program decision.''.

                Subtitle B--Civilian Agency Acquisitions

SEC. 311. CUSTOMER-DRIVEN ACQUISITIONS.

    It is the policy of Congress that--
            (1) the purpose for initiating, planning, and executing 
        acquisitions of property or services by the Federal Government 
        be to satisfy the needs of the potential users of such property 
        or services; and
            (2) potential users of the property or services be involved 
        to a significant extent in the initiation, planning, and 
        execution of the acquisitions of such property or services by 
        the Federal Government.

SEC. 312. REVIEW OF AGENCY ORGANIZATION FOR ACQUISITIONS.

    (a) Inspector General Review of Management Structure.--Not later 
than 18 months after the date of the enactment of this Act, the 
Inspector General of each department or agency of the executive branch 
shall--
            (1) review the acquisition process in the department or 
        agency in order to identify each, if any, management 
        organization or position involved in the process that does not 
        contribute to--
                    (A) the efficiency of the acquisition process; or
                    (B) the quality and cost-effectiveness of items 
                acquired; and
            (2) submit to Congress a report containing--
                    (A) the findings of the Inspector General that 
                result from the review; and
                    (B) any recommendations for reorganizing the 
                acquisition management structure of the department or 
                agency to ensure that each organization and position 
                involved in the management of acquisitions is valuable 
                to the acquisition process because of contributions to 
                the process as described in paragraph (1).
    (b) Agencies Without Inspectors General.--In the case of a 
department or agency that does not have an Inspector General, the head 
of the department or agency shall carry out the review, and submit the 
report, required by subsection (a)(2).

SEC. 313. ACQUISITION OF NONCOMMERCIAL ITEMS.

    (a) Results-Oriented Process Required.--The head of each department 
or agency of the executive branch shall develop and implement a 
results-oriented acquisition process for acquisitions of property and 
services by the department or agency. The process shall include the 
identification of quantitative measures and standards for determining 
the extent to which an acquisition of noncommercial items by the 
department or agency satisfies the needs for which the items are being 
acquired.
    (b) Definitions.--In this section:
            (1) Noncommercial item.--The term ``noncommercial item'' 
        means an item that is not a commercial item.
            (2) Commercial item.--The term ``commercial item'' means--
                    (A) property, other than real property, that is of 
                a type regularly used by the general public or by 
                nongovernmental entities in the course of normal 
                business operations for purposes other than 
                governmental purposes and--
                            (i) has been sold or licensed to the 
                        general public;
                            (ii) has not been sold or licensed to the 
                        general public but has been offered for sale or 
                        license to the general public; or
                            (iii) is not yet available in the 
                        commercial marketplace but will be made 
                        available for commercial delivery within a 
                        reasonable period;
                    (B) any item that, but for minor modifications made 
                to meet Federal Government requirements or 
                modifications of a type customarily available in the 
                commercial marketplace, would satisfy the criteria in 
                subparagraph (A);
                    (C) any combination of items meeting the 
                requirements of subparagraph (A) or (B) that are of a 
                type customarily combined and sold in combination to 
                the general public; and
                    (D) installation services, maintenance services, 
                repair services, training services, and other services 
                if such services are procured for support of an item 
                referred to in subparagraph (A), (B), or (C) and if the 
                source of such services--
                            (i) offers such services to the general 
                        public and the Federal Government 
                        contemporaneously and under similar terms and 
                        conditions; and
                            (ii) offers to use the same work force for 
                        providing the Federal Government with such 
                        services as the source uses for providing such 
                        services to the general public.

SEC. 314. INAPPLICABILITY TO DEPARTMENT OF DEFENSE.

    This subtitle does not apply to the Department of Defense.

                      TITLE IV--CONTRACT FORMATION

                Subtitle A--Specifications and Standards

SEC. 401. PREFERENCE FOR COMMERCIAL ITEMS.

    (a) Armed Services Acquisitions.--Section 2305(a)(1)(C) of title 
10, United States Code, is amended in the second sentence by striking 
out ``Subject to such needs, specifications may'' and inserting in lieu 
thereof the following: ``Normally, the specifications shall be the 
specifications of commercial items. When such items cannot meet bona 
fide needs of the Department of Defense, specifications shall''.
    (b) Civilian Agency Acquisitions.--Section 303A(a)(3) of the 
Federal Property and Administrative Services Act of 1949 (41 U.S.C. 
253a(a)(3)) is amended in the second sentence by striking out ``Subject 
to such needs, specifications may'' and inserting in lieu thereof the 
following: ``Normally, the specifications shall be the specifications 
of commercial items. When such items cannot meet bona fide needs of the 
executive agency, specifications shall''.

               Subtitle B--Performance-Based Contracting

SEC. 411. USE OF INCENTIVE CONTRACTS.

    (a) Armed Services Acquisitions.--Subsection (c) of section 2306 of 
title 10, United States Code, is amended to read as follows:
    ``(c) The program executive officer of an acquisition program may 
determine the type of contract to be used when entering into a contract 
under the program. The program executive officer shall use an incentive 
type contract unless the program executive officer determines that such 
a contract would inhibit achievement of acquisition performance 
goals.''.
    (b) Civilian Agency Acquisitions.--Section 304(b) of the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 254(b)) is 
amended by striking out the second sentence and inserting in lieu 
thereof the following: ``The program manager of an acquisition program 
may determine the type of contract to be used when entering into a 
contract under the program. The program manager shall use an incentive 
type contract unless the program manager determines that such a 
contract would inhibit achievement of acquisition performance goals.''.

SEC. 412. GUIDANCE REGARDING CONSIDERATION OF PAST CONTRACT PERFORMANCE 
              OF OFFERORS.

    Section 6 of the Office of Federal Procurement Policy (41 U.S.C. 
405) is amended by adding at the end the following:
    ``(j)(1) Congress makes the following findings:
            ``(A) Past contract performance of an offeror is one of the 
        relevant factors that contracting officials of executive 
        agencies should consider in entering into contracts.
            ``(B) It is appropriate for a contracting official to 
        consider past contract performance of an offeror as an 
        indicator of the likelihood that the offeror will successfully 
        perform a contract to be entered into by that official.
    ``(2) The Administrator shall prescribe for executive agencies 
guidance regarding consideration of the past contract performance of 
offerors in awarding contracts. The guidance shall include--
            ``(A) standards for evaluating past performance that 
        facilitate consistent and fair evaluation by all executive 
        agencies;
            ``(B) policies for the collection and maintenance of 
        information on past contract performance that, to the maximum 
        extent practicable, facilitate automated collection, 
        maintenance, and dissemination of information and provide for 
        ease of collection, maintenance, and dissemination of 
        information by other methods, as necessary; and
            ``(C) policies for ensuring that offerors are afforded an 
        opportunity to submit information on past contract performance 
        and that information submitted by offerors is considered.
    ``(3) The Administrator shall prescribe for all executive agencies 
the policy regarding the period for which information on past 
performance of offerors may be maintained and considered.
    ``(4) In the case of an offeror regarding whom there is no 
information on past contract performance or regarding whom information 
on past contract performance is not available, the offeror may not be 
evaluated favorably or unfavorably on the factor of past contract 
performance.
    ``(5) In evaluating past contract performance of an offeror under 
the guidance prescribed pursuant to paragraph (1), the head of an 
executive agency shall consider the performance of the offeror with 
respect to cost, schedule, and compliance with technical or functional 
specifications.''.

           TITLE V--PERFORMANCE-BASED CONTRACT ADMINISTRATION

SEC. 501. CONTRACT FINANCING IN ARMED SERVICES ACQUISITIONS.

    (a) Reorganization of Principal Authority Provision.--Section 2307 
of title 10, United States Code, is amended--
            (1) by striking out the section heading and inserting in 
        lieu thereof the following:
``Sec. 2307. Contract financing'';
            (2) by striking out ``(a) The head of an agency'' and 
        inserting in lieu thereof ``(b) Payment Authority.--The head of 
        an agency'';
            (3) by striking out ``(b) Payments'' and inserting in lieu 
        thereof ``(d) Payment Amount.--Payments'';
            (4) by striking out ``(c) Advance payments'' and inserting 
        in lieu thereof ``(e) Security for Advance Payments.--Advance 
        payments'';
            (5) by striking out ``(d)(1) The Secretary of Defense'' and 
        inserting in lieu thereof ``(f) Conditions for Progress 
        Payments.--(1) The Secretary of Defense''; and
            (6) by striking out ``(e)(1) In any case'' and inserting in 
        lieu thereof ``(g) Action in Case of Fraud.--(1) In any case''.
    (b) Financing Policy.--Such section, as amended by subsection (a), 
is further amended by inserting after the section heading the following 
new subsection (a):
    ``(a) Policy.--Payments authorized under this section and made for 
financing purposes should be made periodically and in a timely manner 
to facilitate contract performance while protecting the security 
interests of the Government. Government financing shall be provided 
only to the extent necessary to ensure prompt and efficient performance 
and only after the availability of private financing is considered. A 
contractor's use of funds received as contract financing and the 
contractor's financial condition shall be monitored. If the contractor 
is a small business concern, special attention shall be given to 
meeting the contractor's financial need.''.
    (c) Pay for Performance.--Such section, as amended by subsection 
(a), is further amended by inserting after subsection (b) the following 
new subsection (c):
    ``(c) Payments under subsection (b) may be made on any of the 
following bases:
            ``(1) Performance measured by objective, quantifiable 
        methods such as receipt of items by the Federal Government, 
        work measurement, or statistical process controls.
            ``(2) Accomplishment of events defined in the program 
        management plan.
            ``(3) Other quantifiable measures of results.''.
    (d) Terminology Correction.--Such section, as amended by subsection 
(a)(2), is further amended in subsection (b)(2) by striking out 
``bid''.
    (e) Effective Date of Lien Related to Advance Payments.--Such 
section, as amended by subsection (a)(4), is further amended in 
subsection (e) by inserting before the period at the end of the third 
sentence the following: ``and is effective immediately upon the first 
advancement of funds without filing, notice, or any other action by the 
United States''.
    (f) Conditions for Progress Payments.--Such section, as amended by 
subsection (a)(5), is further amended in subsection (f)--
            (1) in the first sentence of paragraph (1), by striking out 
        ``work, which'' and all that follows through the period at the 
        end of such sentence and inserting in lieu thereof ``work 
        accomplished that meets standards established under the 
        contract. The determination of the extent of the work 
        accomplished may be measured on a basis set forth in subsection 
        (c).''; and
            (2) by striking out paragraph (3) and inserting in lieu 
        thereof the following:
    ``(3) This subsection applies to a contract for an amount equal to 
or greater than the simplified acquisition threshold.''.
    (g) Conforming and Clerical Amendments.--
            (1) Cross reference.--Such section, as amended by 
        subsection (a), is further amended in subsections (d) and (e) 
        by striking out ``subsection (a)'' and inserting in lieu 
        thereof ``subsection (b)''.
            (2) Table of contents.--The table of sections at the 
        beginning of chapter 137 of title 10, United States Code, is 
        amended by striking out the item relating to section 2307 and 
        inserting in lieu thereof the following:

``2307. Contract financing.''.

SEC. 502. CONTRACT FINANCING IN CIVILIAN AGENCY ACQUISITIONS.

    (a) Reorganization of Principal Authority Provision.--Section 305 
of the Federal Property and Administrative Services Act of 1949 (41 
U.S.C. 255) is amended--
            (1) by striking out the section heading and inserting in 
        lieu thereof the following:

                        ``contract financing'';

            (2) by striking out ``(a) Any executive agency'' and 
        inserting in lieu thereof ``(b) Payment Authority.--Any 
        executive agency'';
            (3) by striking out ``(b) Payments'' and inserting in lieu 
        thereof ``(d) Payment Amount.--Payments''; and
            (4) by striking out ``(c) Advance payments'' and inserting 
        in lieu thereof ``(e) Security for Advance Payments.--Advance 
        payments''.
    (b) Financing Policy.--Such section, as amended by subsection (a), 
is further amended by inserting after the section heading the following 
new subsection (a):
    ``(a) Policy.--Payments authorized under this section and made for 
financing purposes should be made periodically and in a timely manner 
to facilitate contract performance while protecting the security 
interests of the Government. Government financing shall be provided 
only to the extent necessary to ensure prompt and efficient performance 
and only after the availability of private financing is considered. A 
contractor's use of funds received as contract financing and the 
contractor's financial condition shall be monitored. If the contractor 
is a small business concern, special attention shall be given to 
meeting the contractor's financial need.''.
    (c) Pay for Performance.--Such section, as amended by subsection 
(a), is further amended by inserting after subsection (b) the following 
new subsection (c):
    ``(c) Payments under subsection (b) may be made on any of the 
following bases:
            ``(1) Performance measured by objective, quantifiable 
        methods such as receipt of items by the Federal Government, 
        work measurement, or statistical process controls.
            ``(2) Accomplishment of events defined in the program 
        management plan.
            ``(3) Other quantifiable measures of results.''.
    (d) Terminology Correction.--Such section, as amended by subsection 
(a)(2), is further amended in subsection (b)(2) by striking out 
``bid''.
    (e) Effective Date of Lien Related to Advance Payments.--Such 
section, as amended by subsection (a)(4), is further amended in 
subsection (e) by inserting before the period at the end of the third 
sentence the following: ``and is effective immediately upon the first 
advancement of funds without filing, notice, or any other action by the 
United States''.
    (f) Revision of Civilian Agency Provision To Ensure Uniform 
Requirements for Progress Payments.--
            (1) In general.--Such section, as amended by subsection 
        (a), is further amended by adding at the end the following:
    ``(f) Conditions for Progress Payments.--(1) The agency head shall 
ensure that any payment for work in progress (including materials, 
labor, and other items) under a contract of an executive agency that 
provides for such payments is commensurate with the work accomplished 
that meets standards established under the contract. The contractor 
shall provide such information and evidence as the agency head 
determines necessary to permit the agency head to carry out the 
preceding sentence.
    ``(2) The agency head shall ensure that progress payments referred 
to in paragraph (1) are not made for more than 80 percent of the work 
accomplished under the contract so long as the agency head has not made 
the contractual terms, specifications, and price definite.
    ``(3) This subsection applies to a contract for an amount equal to 
or greater than the simplified acquisition threshold.
    ``(g) Action in Case of Fraud.--(1) In any case in which the remedy 
coordination official of an executive agency finds that there is 
substantial evidence that the request of a contractor for advance, 
partial, or progress payment under a contract awarded by that executive 
agency is based on fraud, the remedy coordination official shall 
recommend that the agency head reduce or suspend further payments to 
such contractor.
    ``(2) An agency head receiving a recommendation under paragraph (1) 
in the case of a contractor's request for payment under a contract 
shall determine whether there is substantial evidence that the request 
is based on fraud. Upon making such a determination, the agency head 
may reduce or suspend further payments to the contractor under such 
contract.
    ``(3) The extent of any reduction or suspension of payments by an 
agency head under paragraph (2) on the basis of fraud shall be 
reasonably commensurate with the anticipated loss to the United States 
resulting from the fraud.
    ``(4) A written justification for each decision of the agency head 
whether to reduce or suspend payments under paragraph (2), and for each 
recommendation received by the agency head in connection with such 
decision, shall be prepared and be retained in the files of the 
executive agency.
    ``(5) Each agency head shall prescribe procedures to ensure that, 
before the agency head decides to reduce or suspend payments in the 
case of a contractor under paragraph (2), the contractor is afforded 
notice of the proposed reduction or suspension and an opportunity to 
submit matters to the head of the agency in response to such proposed 
reduction or suspension.
    ``(6) Not later than 180 days after the date on which an agency 
head reduces or suspends payments to a contractor under paragraph (2), 
the remedy coordination official of the executive agency shall--
            ``(A) review the determination of fraud on which the 
        reduction or suspension is based; and
            ``(B) transmit a recommendation to the agency head whether 
        the suspension or reduction should continue.
    ``(7) Each agency head who receives recommendations made by a 
remedy coordination official of the executive agency to reduce or 
suspend payments under paragraph (2) during a fiscal year shall prepare 
for such year a report that contains the recommendations, the actions 
taken on the recommendations and the reasons for such actions, and an 
assessment of the effects of such actions on the Federal Government. 
Any such report shall be available to any Member of Congress upon 
request.
    ``(8) An agency head may not delegate responsibilities under this 
subsection to any person in a position below level IV of the Executive 
Schedule.
    ``(9) In this subsection, the term `remedy coordination official', 
with respect to an executive agency, means the person or entity in that 
executive agency who coordinates within that executive agency the 
administration of criminal, civil, administrative, and contractual 
remedies resulting from investigations of fraud or corruption related 
to procurement activities.''.
            (2) Relationship to prompt payment requirements.--The 
        amendments made by paragraph (1) are not intended to impair or 
        modify procedures required by the provisions of chapter 39 of 
        title 31, United States Code, and the regulations issued 
        pursuant to such provisions of law, that relate to progress 
        payment requests, as such procedures are in effect on the 
        effective date of this Act.
    (g) Conforming and Clerical Amendments.--
            (1) Reference.--Section 305 of the Federal Property and 
        Administrative Services Act of 1949, as amended by subsection 
        (a), is further amended in subsections (c) and (d) by striking 
        out ``subsection (a)'' and inserting in lieu thereof 
        ``subsection (b)''.
            (2) Table of contents.--The table of contents in the first 
        section of such Act is amended by striking out the item 
        relating to section 305 and inserting in lieu thereof the 
        following:

``Sec. 305. Contract financing.''.

                  TITLE VI--DAVIS-BACON ACT EXEMPTION

SEC. 601. CONTRACTS NOT IN EXCESS OF $500,000.

    (a) In General.--The first section of the Act of March 3, 1931 (40 
U.S.C. 276a), commonly referred to as the ``Davis-Bacon Act'', is 
amended in subsection (a) by striking out ``$2,000'' and inserting in 
lieu thereof ``$500,000''.
    (b) Related Regulations.--Section 2 of the Act of June 13, 1934 (40 
U.S.C. 276c) is amended by inserting after ``engaged'' the following: 
``under contracts in excess of $500,000''.

             TITLE VII--MISCELLANEOUS CONFORMING AMENDMENTS

SEC. 701. MODIFICATION OF THE RESPONSIBILITY OF THE COMPTROLLER OF THE 
              DEPARTMENT OF DEFENSE FOR DEFENSE ACQUISITION BUDGETS.

    Section 137(c) of title 10, United States Code, is amended in each 
of paragraphs (2), (3), and (4), by inserting after the paragraph 
designation the following: ``subject to section 133(b) of this 
title,''.

SEC. 702. THE DEFENSE ACQUISITION WORK FORCE.

    (a) General Authorities and Responsibilities.--(1)(A) Sections 
1704, 1705, and 1707 of title 10, United States Code, are repealed.
    (B) The table of sections at the beginning of subchapter I of 
chapter 87 of such title is amended by striking out the items relating 
to sections 1704 through 1707 and inserting in lieu thereof the 
following:

``1704. Acquisition career program boards.''.
    (2) Section 1706 of title 10, United States Code, is amended--
            (A) in the section heading by striking out ``Sec. 1706'' 
        and inserting in lieu thereof ``Sec. 1704'';
            (B) by striking out subsection (a) and inserting in lieu 
        thereof the following:
    ``(a) Establishment.--The Under Secretary of Defense for 
Acquisition shall establish an acquisition career program board to 
advise the Under Secretary in managing the accession, training, 
education, and career development of military and civilian personnel in 
the acquisition workforce and in selecting individuals for the 
Acquisition Corps under section 1731 of this title.'';
            (C) in subsection (b)--
                    (i) in the first sentence, by striking out ``Each'' 
                and inserting in lieu thereof ``The''; and
                    (ii) in the second sentence, by striking out 
                ``service acquisition executive'' and inserting in lieu 
                thereof ``Under Secretary''; and
            (D) in subsection (c)--
                    (i) by striking out ``Secretary of a military 
                department'' and inserting in lieu thereof ``Under 
                Secretary''; and
                    (ii) by striking out ``in the department''.
    (b) Defense Acquisition Positions.--(1) Section 1722 of title 10, 
United States Code, is amended--
            (A) in subsection (g), by striking out ``Secretary of each 
        military department, acting through the service acquisition 
        executive for that department,'' and inserting in lieu thereof 
        ``Secretary of Defense''; and
            (B) in subsection (h), by striking out ``or the Secretary 
        of a military department (as applicable)''.
    (2) Section 1724(d) of such title is amended in the first 
sentence--
            (A) by striking out ``a military department'' and inserting 
        in lieu thereof ``the Department of Defense''; and
            (B) by striking out ``of that military department''.
    (c) Acquisition Corps.--(1) Section 1731 of title 10, United States 
Code, is amended--
            (A) by striking out subsection (a) and inserting in lieu 
        thereof the following:
    ``(a) Acquisition Corps.--The Secretary of Defense shall establish 
a Department of Defense Acquisition Corps.''; and
            (B) in subsection (b), by striking out ``an Acquisition 
        Corps'' and inserting in lieu thereof ``the Acquisition 
        Corps''.
    (2) Section 1732 of such title is amended--
            (A) in subsection (b)--
                    (i) in paragraph (2)(A)(ii), by striking out ``of 
                the employing military department''; and
                    (ii) in paragraph (4), by striking out ``or the 
                Secretary of the military department concerned''; and
            (B) in subsection (d)--
                    (i) by striking out ``of a military department'' in 
                the first sentence of paragraph (1) and in paragraph 
                (2); and
                    (ii) by striking out ``of that military 
                department'' in the first sentence of paragraph (1).
    (3) Section 1733(a) of such title is amended by striking out ``an 
Acquisition Corps'' and inserting in lieu thereof ``the Acquisition 
Corps''.
    (4) Section 1734(a) of such title is amended--
            (A) in paragraph (1)--
                    (i) in the first sentence, by striking out 
                ``Secretary of each military department, acting through 
                the service acquisition executive for that 
                department,'' and inserting in lieu thereof ``Secretary 
                of Defense, acting through the Under Secretary of 
                Defense for Acquisition,''; and
                    (ii) in the second sentence, by striking out 
                ``concerned''; and
            (B) in paragraph (2), by striking out ``concerned'' in the 
        second sentence.
    (5) Section 1738 of title 10, United States Code (as redesignated 
by section 203(b)(1)(A)), is amended--
            (A) in subsection (a)--
                    (i) in paragraph (1), by striking out ``an 
                Acquisition Corps'' and inserting in lieu thereof ``the 
                Acquisition Corps''; and
                    (ii) in paragraph (5), by striking out ``, 
                serving'' and all that follows through ``Department of 
                Defense''; and
            (B) by striking out subsection (c) and inserting in lieu 
        thereof the following:
    ``(c) Waiver.--(1) The Secretary of Defense may waive, on a case-
by-case basis, the requirements established under this subchapter with 
respect to the assignment of an individual to a particular critical 
acquisition position. Such a waiver may be granted only if unusual 
circumstances justify the waiver or if the Secretary determines that 
the individual's qualifications obviate the need for meeting the 
education, training, and experience requirements established under this 
subchapter.
    ``(2) The Secretary shall act through the Under Secretary of 
Defense for Acquisition in exercising the authority provided in 
paragraph (1). The authority to grant waivers under this subsection may 
be delegated by the Under Secretary only to the Director of Acquisition 
Education, Training, and Career Development.''.
    (d) Education and Training.--(1) Section 1741(c) of title 10, 
United States Code, is amended to read as follows:
    ``(c) Programs.--The Under Secretary shall establish and implement 
the education and training programs authorized by this subchapter.''.
    (2) Section 1742 of such title is amended by striking out ``require 
that each military department''.
    (3) Section 1743 of such title is amended in the first sentence by 
striking out ``require that the Secretary of each military 
department''.
    (e) General Management.--(1) Section 1761(a) of title 10, United 
States Code, is amended by striking out ``prescribe regulations to 
ensure that the military departments and Defense Agencies''.
    (2) Section 1762(c) of such title is amended--
            (A) by striking out the parenthetical material in the 
        matter above paragraph (1); and
            (B) in paragraph (4)(A), by striking out ``an acquisition 
        corps'' and inserting in lieu thereof ``the Acquisition 
        Corps''.
    (3) Section 1763 of such title is amended by striking out the 
second sentence.

SEC. 703. PROCUREMENT PROCEDURES GENERALLY.

    Chapter 137 of title 10, United States Code, is amended as follows:
            (1) Section 2305(d) is amended--
                    (A) in the first sentence of paragraph (1)(A), by 
                striking out ``shall ensure that,'' and all that 
                follows through ``the head of an agency'' and inserting 
                in lieu thereof ``, in preparing a solicitation for the 
                award of a development contract for a major system, 
                shall'';
                    (B) in the first sentence of paragraph (2)(A), by 
                striking out ``shall ensure that,'' and all that 
                follows through ``the head of an agency'' and inserting 
                in lieu thereof ``, in preparing a solicitation for the 
                award of a production contract for a major system, 
                shall'';
                    (C) by striking out ``the head of the agency'' each 
                place it appears and inserting in lieu thereof ``the 
                Secretary''; and
                    (D) by striking out ``the head of an agency'' each 
                place it appears and inserting in lieu thereof ``the 
                Secretary of Defense''.
            (2) Section 2306(h) is amended--
                    (A) in paragraph (1), by striking out ``the head of 
                an agency'' in the matter above subparagraph (A) and 
                inserting in lieu thereof ``the Secretary of Defense'';
                    (B) in paragraph (2)(D), by striking out ``agencies 
                in'' in the matter above clause (i);
                    (C) in paragraph (3), by striking out ``the head of 
                the agency concerned'' and inserting in lieu thereof 
                ``the Secretary of Defense'';
                    (D) by striking out paragraph (7);
                    (E) in paragraph (10), by striking out ``instruct 
                the Secretary of the military department concerned 
                to''; and
                    (F) by redesignating paragraphs (8), (9), (10), and 
                (11) as paragraphs (7), (8), (9), and (10), 
                respectively.
            (3) Section 2307, as amended by section 501(a)(6), is 
        further amended in subsection (g)(7), by striking out the 
        second sentence.
            (4) Section 2311 is amended--
                    (A) by striking out ``Except as provided in'' and 
                inserting in lieu thereof ``(a) Except as provided in 
                subsection (b) and''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(b) The Secretary of Defense may delegate any authority of the 
Secretary under this chapter only to--
            ``(1) the Deputy Secretary of Defense, who may successively 
        delegate such authority only to the Under Secretary of Defense 
        for Acquisition;
            ``(2) the Under Secretary of Defense for Acquisition; or
            ``(3) any acquisition program executive officer or 
        acquisition program manager of the Defense Research, 
        Development, and Acquisition Agency.''.
            (5) Section 2318 is amended--
                    (A) in subsection (a), by striking out ``Defense 
                Logistics Agency'' each place it appears and inserting 
                in lieu thereof ``Defense Research, Development, and 
                Acquisition Agency''; and
                    (B) in subsection (c), by striking out ``Each 
                advocate for competition of an agency'' and inserting 
                in lieu thereof ``The advocate for competition''.
            (6) Section 2320(b) is amended--
                    (A) in the matter above paragraph (1), by striking 
                out ``an agency named in section 2303 of this title'' 
                and inserting in lieu thereof ``the Department of 
                Defense''; and
                    (B) in paragraph (9), by striking out ``the head of 
                the agency to withhold'' and inserting in lieu thereof 
                ``the withholding of''.
            (7) Section 2324 is amended--
                    (A) in subsection (e)--
                            (i) in paragraph (2)(C), by striking out 
                        ``head of the agency awarding the contract'' 
                        and inserting in lieu thereof ``Secretary''; 
                        and
                            (ii) in paragraph (3)--
                                    (I) in subparagraph (A), by 
                                striking out the matter above clause 
                                (i) and inserting in lieu thereof the 
                                following:
    ``(A) Pursuant to regulations prescribed by the Secretary and 
subject to the availability of appropriations, the Secretary may waive 
the application of the provisions of subparagraphs (M) and (N) of 
paragraph (1) to a covered contract (other than a contract to which 
paragraph (2) applies) if the Secretary determines that--'';
                                    (II) by striking out ``head of an 
                                agency'' each place it appears in 
                                subparagraphs (B) and (C); and
                                    (III) in subparagraph (B)(ii), by 
                                striking out ``head of the agency will 
                                consider granting such waiver, and, if 
                                the agency head'' and inserting in lieu 
                                thereof ``Secretary will consider 
                                granting such waiver, and, if the 
                                Secretary'';
                    (B) in subsection (h)(2), by striking out ``or the 
                Secretary of the military department concerned''; and
                    (C) in subsection (k)(4)--
                            (i) by striking out ``the head of the 
                        agency that awarded the covered contract'' and 
                        inserting in lieu thereof ``the Secretary of 
                        Defense'';
                            (ii) by striking out ``the agency head'' 
                        and inserting in lieu thereof ``the 
                        Secretary'';
                            (iii) by striking out ``such agency head'' 
                        and inserting in lieu thereof ``the 
                        Secretary''; and
                            (iv) in subparagraph (B), by striking out 
                        ``agency'' and inserting in lieu thereof 
                        ``Department of Defense''.
            (8) Section 2326 is amended--
                    (A) by striking out ``head of an agency'' each 
                place it appears and inserting in lieu thereof 
                ``Secretary of Defense'';
                    (B) by striking out ``head of the agency'' each 
                place it appears and inserting in lieu thereof 
                ``Secretary of Defense''; and
                    (C) in subsection (a), by striking out ``military 
                department concerned'' and inserting in lieu thereof 
                ``Department of Defense''.
            (9) Section 2327 is amended--
                    (A) in subsection (a), by striking out ``The head 
                of an agency'' and inserting in lieu thereof ``The 
                Secretary of Defense'';
                    (B) in subsection (b), by striking out ``the head 
                of an agency'' and inserting in lieu thereof ``the 
                Secretary of Defense'';
                    (C) in subsection (c)(1)--
                            (i) by striking out ``the head of an 
                        agency'' each place it appears and inserting in 
                        lieu thereof ``the Secretary''; and
                            (ii) by striking out ``such head of an 
                        agency'' each place it appears and inserting in 
                        lieu thereof ``the Secretary'';
                    (D) in subsection (c)(2), by striking out ``Upon 
                the request of the head of an agency, the'' and 
                inserting in lieu thereof ``The''; and
                    (E) in subsection (d)--
                            (i) by striking out ``(1)''; and
                            (ii) by striking out paragraph (2).
            (10) Section 2329 is amended--
                    (A) in subsection (a), by striking out the second 
                sentence;
                    (B) in subsection (b), by striking out ``the 
                Secretary of a military department'' and inserting in 
                lieu thereof ``the Secretary of Defense''; and
                    (C) in subsection (c)--
                            (i) by striking out ``the Secretary 
                        concerned'' each place it appears and inserting 
                        in lieu thereof ``the Secretary of Defense''; 
                        and
                            (ii) by striking out the second sentence of 
                        paragraph (3).

SEC. 704. RESEARCH AND DEVELOPMENT.

    Chapter 139 of title 10, United States Code, is amended as follows:
            (1) Section 2352(a) is amended in the matter above 
        paragraph (1)--
                    (A) by striking out ``The Secretary of a military 
                department'' and inserting in lieu thereof ``The 
                Secretary of Defense''; and
                    (B) by striking out ``of that military 
                department''.
            (2) Section 2353 is amended--
                    (A) in the first sentence of subsection (a)--
                            (i) by striking out ``contract of a 
                        military department'' and inserting in lieu 
                        thereof ``Department of Defense contract''; and
                            (ii) by striking out ``the Secretary of the 
                        military department concerned'' and inserting 
                        in lieu thereof ``the Secretary of Defense''; 
                        and
                    (B) in subsection (b)(3), by striking out ``the 
                Secretary concerned'' and inserting in lieu thereof 
                ``the Secretary of Defense''.
            (3) Section 2354 is amended--
                    (A) in subsection (a), by striking out ``the 
                Secretary of the military department concerned, any 
                contract of a military department'' and inserting in 
                lieu thereof ``the Secretary of Defense, any contract 
                of the Department of Defense'';
                    (B) in subsection (c)--
                            (i) by striking out ``the Secretary of the 
                        department concerned'' and inserting in lieu 
                        thereof ``the Secretary of Defense''; and
                            (ii) by striking out ``of his department''; 
                        and
                    (C) in subsection (d), by striking out ``the 
                Secretary concerned'' and inserting in lieu thereof 
                ``the Secretary of Defense''.
            (4) Section 2355 is amended--
                    (A) by striking out ``Secretary of each military 
                department'' and all that follows through ``Comptroller 
                General,'' and inserting in lieu thereof ``Secretary of 
                Defense, with the approval of the Comptroller General, 
                may''; and
                    (B) by striking out ``his department''.
            (5) Section 2356(a) is amended to read as follows:
    ``(a)(1) Except as provided in paragraph (2), the Secretary of 
Defense may delegate any authority under section 1584, 2353, 2354, 
2355, or 2358 of this title to--
            ``(A) the Deputy Secretary of Defense, who may successively 
        delegate such authority only to the Under Secretary of Defense 
        for Acquisition;
            ``(B) the Under Secretary of Defense for Acquisition; or
            ``(C) any employee of the Defense Research, Development, 
        and Acquisition Agency.
    ``(2) The authority of the Secretary under section 2353(b)(3) of 
this title may not be delegated to a person described in paragraph 
(1)(C).''.
            (6) Section 2367(c) is amended to read as follows:
    ``(c) Funds appropriated to the Department of Defense may not be 
obligated or expended for purposes of operating a federally funded 
research center that was not in existence before June 2, 1986, until--
            ``(1) the Secretary of Defense submits to Congress a report 
        with respect to such center that describes the purpose, 
        mission, and general scope of effort of the center; and
            ``(2) 60 days elapse after the date on which such report is 
        received by Congress.''.
            (7) Section 2369 is amended--
                    (A) in subsection (a), by striking out ``a program 
                for the supervision and coordination of'' and inserting 
                in lieu thereof ``and conduct appropriate''; and
                    (B) by striking out subsection (b) and inserting in 
                lieu thereof the following:
    ``(b) Purpose of Product Evaluation.--The purpose of each product 
evaluation activity established under subsection (a) is to evaluate 
products developed by private industry independent of any contract or 
other arrangement with the United States in order to determine the 
utility of such products in the Department of Defense.''.
            (8) Subsections (a) and (g) of section 2371 are amended by 
        striking out ``in carrying out advanced research projects 
        through the Defense Advanced Research Projects Agency, and the 
        Secretary of each military department,''.

SEC. 705. MISCELLANEOUS PROCUREMENT PROVISIONS.

    Chapter 141 of title 10, United States Code, is amended as follows:
            (1) Section 2381 is amended--
                    (A) in subsection (a)--
                            (i) by striking out ``The Secretary of a 
                        military department'' and inserting in lieu 
                        thereof ``The Secretary of Defense''; and
                            (ii) by striking out ``that department'' in 
                        paragraph (1) and inserting in lieu thereof 
                        ``the Department of Defense''; and
                    (B) in subsection (b)--
                            (i) in the matter above paragraph (1), by 
                        striking out ``the Secretary concerned'' and 
                        inserting in lieu thereof ``the Secretary of 
                        Defense''; and
                            (ii) in paragraph (2), by striking out 
                        ``military department concerned'' and inserting 
                        in lieu thereof ``Department of Defense''.
            (2) Section 2385 is amended by striking out ``a military 
        department'' and inserting in lieu thereof ``the Department of 
        Defense''.
            (3) Section 2386 is amended by striking out ``a military 
        department'' and inserting in lieu thereof ``the Department of 
        Defense''.
            (4) Section 2388(a) is amended by striking out ``The 
        Secretary of a military department'' and inserting in lieu 
        thereof ``The Secretary of Defense''.
            (5) Section 2393 is amended--
                    (A) in subsection (a)--
                            (i) by striking out ``the Secretary of a 
                        military department'' in paragraph (1) and 
                        inserting in lieu thereof ``the Secretary of 
                        Defense''; and
                            (ii) by striking out ``the Secretary 
                        concerned'' in paragraph (2) and inserting in 
                        lieu thereof ``the Secretary of Defense''; and
                    (B) in subsection (b), by striking out ``the 
                Secretary concerned'' and inserting in lieu thereof 
                ``the Secretary of Defense''.
            (6) Section 2394 is amended--
                    (A) in subsection (a), by striking out ``the 
                Secretary of a military department'' and inserting in 
                lieu thereof ``the Secretary of Defense'';
                    (B) by striking out subsection (b); and
                    (C) by redesignating subsection (c) as subsection 
                (b).
            (7) Section 2394a is amended--
                    (A) in subsection (a)--
                            (i) by striking out ``Secretary of a 
                        military department'' and inserting in lieu 
                        thereof ``Secretary of Defense''; and
                            (ii) by striking out ``military department 
                        under his jurisdiction'' and inserting in lieu 
                        thereof ``Department of Defense''; and
                    (B) in subsection (b), by striking out the second 
                sentence.
            (8) Section 2401(a) is amended by striking out ``The 
        Secretary of a military department'' both places it appears and 
        inserting in lieu thereof ``The Secretary of Defense''.
            (9) Section 2403 is amended--
                    (A) in subsection (a), by striking out paragraph 
                (8);
                    (B) in subsection (b), by striking out ``the head 
                of an agency'' in the matter above paragraph (1) and 
                inserting in lieu thereof ``the Secretary of Defense'';
                    (C) in subsections (c), (f), and (g), by striking 
                out ``head of the agency concerned'' each place it 
                appears and inserting in lieu thereof ``Secretary of 
                Defense'';
                    (D) in subsection (d)--
                            (i) by inserting ``(1)'' after the 
                        subsection designation;
                            (ii) by redesignating paragraphs (1) and 
                        (2) as subparagraphs (A) and (B), respectively;
                            (iii) by striking out the second sentence; 
                        and
                            (iv) by adding at the end the following new 
                        paragraph:
    ``(2) The Secretary may delegate authority under this subsection 
only to the Under Secretary of Defense for Acquisition.''; and
                    (E) in subsection (h)--
                            (i) by striking out ``(1)''; and
                            (ii) by striking out paragraph (2).
            (10) Section 2405(a) is amended by striking out ``The 
        Secretary of a military department'' and inserting in lieu 
        thereof ``The Secretary of Defense''.
            (11) Section 2406 is amended--
                    (A) in subsection (a)--
                            (i) by striking out ``head of an agency'' 
                        and inserting in lieu thereof ``Secretary of 
                        Defense'';
                            (ii) by striking out ``with that agency''; 
                        and
                            (iii) by striking out ``head of the 
                        agency'' each place it appears and inserting in 
                        lieu thereof ``Secretary''; and
                    (B) in subsection (f)--
                            (i) by striking out paragraph (1);
                            (ii) by redesignating paragraphs (2), (3), 
                        and (4) as paragraphs (1), (2), and (3), 
                        respectively;
                            (iii) by striking out ``2432(a)'' and 
                        inserting in lieu thereof ``2430'' in paragraph 
                        (1) (as redesignated by clause (ii)); and
                            (iv) by striking out ``the head of an 
                        agency'' and inserting in lieu thereof ``the 
                        Secretary of Defense'' in paragraph (3) (as 
                        redesignated by clause (ii)).
            (12) Section 2411(3) is amended by striking out ``Director 
        of the Defense Logistics Agency'' and inserting in lieu thereof 
        ``Under Secretary of Defense for Acquisition''.

SEC. 706. MAJOR DEFENSE ACQUISITION PROGRAMS.

    Chapter 144 of title 10, United States Code, is amended as follows:
            (1) Section 2433 is amended--
                    (A) by striking out ``service acquisition executive 
                designated by the Secretary concerned'' each place it 
                appears and inserting in lieu thereof ``Under Secretary 
                of Defense for Acquisition'';
                    (B) in subsection (c)(2), by striking out ``such 
                service acquisition executive'' each place it appears 
                and inserting in lieu thereof ``the Under Secretary of 
                Defense for Acquisition'';
                    (C) in subsection (d)--
                            (i) by striking out ``the service 
                        acquisition executive'' in paragraphs (1) and 
                        (2) and inserting in lieu thereof ``the Under 
                        Secretary''; and
                            (ii) in paragraph (3), by striking out 
                        ``If, based upon the service acquisition 
                        executive's determination, the Secretary 
                        concerned'' and inserting in lieu thereof ``If 
                        the Under Secretary of Defense for 
                        Acquisition''; and
                    (D) in subsection (e)--
                            (i) in paragraph (1)(A), by striking out 
                        ``Secretary concerned'' and inserting in lieu 
                        thereof ``Under Secretary of Defense for 
                        Acquisition'';
                            (ii) in paragraph (1)(B), by striking out 
                        ``Secretary'' and inserting in lieu thereof 
                        ``Under Secretary'';
                            (iii) in paragraph (2), by striking out 
                        ``(as determined by the Secretary'' in the 
                        matter above subparagraph (A) and inserting in 
                        lieu thereof ``(as determined by the Under 
                        Secretary''; and
                            (iv) in paragraph (3), by striking out ``by 
                        the Secretary'' both places it appears in the 
                        first sentence and inserting in lieu thereof 
                        ``by the Under Secretary''.
            (2) Section 2434(b)(1) is amended by striking out ``the 
        military department,'' and all that follows and inserting in 
        lieu thereof ``Department of Defense.''.
            (3) Section 2435 is amended--
                    (A) in subsection (a)(1), by striking out the 
                matter above subparagraph (A) and inserting in lieu 
                thereof the following:
    ``(a) Baseline Description Requirement.--(1) The Under Secretary of 
Defense for Acquisition shall establish a baseline description for each 
major defense acquisition program--''; and
                    (B) in subsection (b)--
                            (i) in paragraph (1), by striking out 
                        ``Secretary of the military department 
                        concerned and to the service acquisition 
                        executive designated by such Secretary'' and 
                        inserting in lieu thereof ``Under Secretary of 
                        Defense for Acquisition''; and
                            (ii) in paragraph (2), in the matter above 
                        subparagraph (A)--
                                    (I) by striking out ``The Secretary 
                                of the military department concerned'' 
                                and inserting in lieu thereof ``The 
                                Under Secretary of Defense for 
                                Acquisition''; and
                                    (II) by striking out ``180
                                days--'' and all that follows and 
                                inserting in lieu thereof the 
                                following: ``180 days, establish a 
                                review panel to review such program and 
                                to submit to the Under Secretary a 
                                report on the results of such review 
                                within 45 days after the date on which 
                                the program deviation report is 
                                submitted under paragraph (1).''.
            (4) Section 2436 is amended--
                    (A) in subsection (a)--
                            (i) by striking out ``, through the 
                        Secretaries of the military departments,''; and
                            (ii) by striking out ``senior procurement 
                        executive of the military department 
                        concerned'' and inserting in lieu thereof 
                        ``Under Secretary of Defense for Acquisition'';
                    (B) in subsection (b)--
                            (i) by striking out ``Secretary of a 
                        military department'' and inserting in lieu 
                        thereof ``Secretary''; and
                            (ii) by striking out ``under the 
                        jurisdiction of the Secretary'';
                    (C) in subsection (c)--
                            (i) in paragraph (1), by striking out 
                        ``Secretary concerned'' and inserting in lieu 
                        thereof ``Under Secretary of Defense for 
                        Acquisition''; and
                            (ii) in paragraph (3), by striking out 
                        ``senior procurement executive'' and all that 
                        follows and inserting in lieu thereof ``Under 
                        Secretary.''; and
                    (D) in subsection (d), by striking out ``the senior 
                procurement executive of the military department 
                concerned, with the approval of''.
            (5)(A) Section 2437 is repealed.
            (B) The table of sections at the beginning of chapter 144 
        is amended by striking out the item relating to section 2437.

SEC. 707. SERVICE SPECIFIC ACQUISITION AUTHORITY.

    (a) Army.--Part IV of subtitle B of title 10, United States Code, 
is amended by striking out ``Secretary of the Army'' in sections 
4501(c), 4502(a), 4503, 4504, 4505, 4506, 4507, 4508(a), 4531, 4532(a), 
4533, 4535, 4537, 4538, 4540(a), and 4542 (each place it appears) and 
inserting in lieu thereof ``Secretary of Defense''.
    (b) Navy.--Part IV of subtitle C of such title is amended as 
follows:
            (1) Strike out ``Secretary of the Navy'' in sections 7201, 
        7203(a), 7210(a), 7212(a), 7213, 7229, 7299a (each place it 
        appears), 7301(a), 7309(e), 7311(a), 7311(b), 7312 (each place 
        it appears), 7314, 7341(a), 7342(b), 7345(a), 7361 (each place 
        it appears), 7362, 7364, 7365, and 7521 and insert in lieu 
        thereof ``Secretary of Defense''.
            (2) Section 7203 is amended--
                    (A) in subsection (a), by striking out ``(a)''; and
                    (B) by striking out subsection (b).
            (3) Section 7210 is amended--
                    (A) in subsection (a), by striking out ``(a)''; and
                    (B) by striking out subsection (b).
            (4) Section 7310(a) is amended by striking out ``Navy'' the 
        first place it appears in the second sentence and inserting in 
        lieu thereof ``Secretary of Defense''.
            (5) Section 7311(a)(1) is amended by striking out ``Navy'' 
        the first place it appears and inserting in lieu thereof 
        ``Secretary of Defense''.
            (6) Section 7314(2) is amended by striking out ``Navy'' and 
        inserting in lieu thereof ``Department of Defense''.
            (7) Section 7363 is amended in the first sentence--
                    (A) by striking out ``Department of the Navy'' and 
                inserting in lieu thereof ``Secretary of Defense''; and
                    (B) by striking out ``Secretary'' and inserting in 
                lieu thereof ``Secretary of Defense''.
            (8) Section 7521 is amended by striking out ``contract made 
        by the Department of the Navy'' in the first sentence and 
        inserting in lieu thereof ``contract entered into for the 
        Department of the Navy''.
            (9) Section 7522 is amended by striking out ``Secretary of 
        the Navy'' and all that follows through ``chiefs of bureaus'' 
        and inserting in lieu thereof ``Secretary of Defense''.
    (c) Air Force.--Part IV of subtitle D of such title is amended in 
sections 9501(c), 9502(a), 9503, 9504, 9505, 9506, 9507, 9511(11), 
9531, 9532, 9535, 9537, 9538(a), and 9540(a) by striking out 
``Secretary of the Air Force'' and inserting in lieu thereof 
``Secretary of Defense''.

SEC. 708. OTHER LAWS.

    In any other provision of law providing authority for the Secretary 
of a military department or the head of a Defense Agency of the 
Department of Defense to perform a research, development, or 
acquisition function of the Department of Defense, the reference to 
that official shall be deemed to refer to the Secretary of Defense. 
That function shall be performed as provided in section 133(b) of title 
10, United States Code (as amended by section 301(a)), and section 232 
of such title (as added by section 301(b)).

                       TITLE VIII--EFFECTIVE DATE

SEC. 801. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect on 
the first day of the fiscal year that begins on or after the date of 
the enactment of this Act and, in the case of provisions and amendments 
that set forth contracting procedures, shall apply with respect to 
contract solicitations that are issued on or after such effective date.

                                 <all>

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