[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1368 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1368

   To amend title 10, United States Code, to modernize Department of 
        Defense acquisition procedures, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 30, 1995

    Mr. Kasich (for himself, Mr. Hoke, Ms. Molinari, and Mr. Bass) 
 introduced the following bill; which was referred to the Committee on 
   National Security, and in addition to the Committee on Government 
Reform and Oversight, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To amend title 10, United States Code, to modernize Department of 
        Defense acquisition 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 ``Department of Defense Acquisition 
Management Reform Act of 1995''.

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--PERFORMANCE BASED ACQUISITION PROCESS

                     Subtitle A--Performance Goals

Sec. 101. Strengthened reporting requirement.
Sec. 102. Termination of major defense acquisition programs not meeting 
                            goals.
Sec. 103. Enhanced performance incentives for acquisition workforce.
            Subtitle B--Results-Oriented Acquisition Process

Sec. 111. Revision of regulations relating to acquisition of major 
                            systems and information technology systems.
Sec. 112. Results oriented acquisition program cycle.
Sec. 113. Operational test and evaluation requirements in relation to 
                            low-rate production.
Sec. 114. Acquisition of information technology.
                     Subtitle C--Rapid Contracting

Sec. 121. Goal.
Sec. 122. Authority to limit number of offerors.
Sec. 123. Preference for certified contractors.
Sec. 124. Consideration of past performance and eligibility 
                            certification.
Sec. 125. Encouragement of multiyear contracting.
Sec. 126. Encouragement of use of leasing authority.
           Subtitle D--Performance Based Contract Management

Sec. 131. Unallowable costs.
Sec. 132. Alternatives approaches to contract management.
Sec. 133. Contractor share of gains and losses from cost, schedule, and 
                            performance experience.
                    Subtitle E--Financial Management

Sec. 141. Phase funding of defense acquisition programs.
Sec. 142. Maximized benefit funding.
Sec. 143. Improved Department of Defense contract payment procedures.
               Subtitle F--Defense Acquisition Workforce

Sec. 151. Consideration of past performance in assignment to 
                            acquisition positions.
Sec. 152. Termination of defense acquisition schools.
       Subtitle G--Revision of Procurement Integrity Requirements

Sec. 161. Amendments to Office of Federal Procurement Policy Act.
Sec. 162. Amendments to title 18, United States Code.
Sec. 163. Repeal of superseded and obsolete laws.
Sec. 164. Implementation.
                    Subtitle H--Clerical Amendments

Sec. 171. Clerical amendments to title 10.
Sec. 172. Other laws.
 TITLE II--REORGANIZATION AND REFORM OF THE DEFENSE ACQUISITION SYSTEM

   Subtitle A--Streamlining and Improvement of Acquisition Management

Sec. 201. Reorganization of acquisition authority.
Sec. 202. Joint foreign products development.
                   Subtitle B--Transfer of Functions

Sec. 211. Transfers.
Sec. 212. Savings provisions.
                   Subtitle C--Conforming Amendments

Sec. 221. Modification of the responsibility of the Under Secretary of 
                            Defense (Comptroller) for defense 
                            acquisition budgets.
Sec. 222. The defense acquisition work force.
Sec. 223. Procurement procedures generally.
Sec. 224. Research and development.
Sec. 225. Miscellaneous procurement provisions.
Sec. 226. Major defense acquisition programs.
Sec. 227. Service specific acquisition authority.
Sec. 228. Other laws.
                       Subtitle D--Effective Date

Sec. 241. Effective date.
                   TITLE III--DEPOT-LEVEL MAINTENANCE

Sec. 301. Elimination of 60/40 rule for public/private division of 
                            depot-level maintenance workload.
Sec. 302. Preservation of core maintenance and repair capability.
Sec. 303. Performance of depot-level maintenance workload by private 
                            sector whenever possible.

             TITLE I--PERFORMANCE BASED ACQUISITION PROCESS

                     Subtitle A--Performance Goals

SEC. 101. STRENGTHENED REPORTING REQUIREMENT.

    Section 2220(b) of title 10, United States Code, is amended in the 
first sentence by striking out ``an assessment of whether major and 
nonmajor acquisition programs of the Department of Defense are 
achieving'' and inserting in lieu thereof ``an assessment, for each 
Department of Defense appropriation account, of whether the major and 
nonmajor acquisition programs funded from such account are achieving''.

SEC. 102. TERMINATION OF MAJOR DEFENSE ACQUISITION PROGRAMS NOT MEETING 
              GOALS.

  Section 2220 of title 10, United States Code, is amended by adding at 
the end the following:
    ``(d) Termination of Programs Significantly Under Goals.--The 
Secretary of Defense shall terminate any major defense acquisition 
program that--
            ``(1) is more than 50 percent over the cost goal 
        established for a phase of the program;
            ``(2) fails to achieve at least 50 percent of the 
        performance capability goals established for a phase of the 
        program; or
            ``(3) is more than 50 percent behind schedule, as 
        determined in accordance with the schedule goal established for 
        a phase of the program.''.

SEC. 103. ENHANCED PERFORMANCE INCENTIVES FOR ACQUISITION WORKFORCE.

    (a) Clarification of Requirements for System of Incentives.--
Subsection (b) of section 5001 of the Federal Acquisition Streamlining 
Act of 1994 (Public Law 103-355; 108 Stat. 3350; 10 U.S.C. 2220 note) 
is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) by designating the second sentence as paragraph (2); 
        and
            (3) by inserting ``(1)'' after ``(b) Enhanced system of 
        Performance Incentives.--''; and
            (4) by adding at the end the following:
    ``(3) The Secretary shall include in the enhanced system of 
incentives the following:
            ``(A) Pay bands.
            ``(B) Significant and material pay and promotion incentives 
        to be awarded, and significant and material unfavorable 
        personnel actions to be imposed, under the system exclusively, 
        or primarily, on the basis of the contributions of personnel to 
        the performance of the acquisition program in relation to cost 
        goals, performance goals, and schedule goals.
            ``(C) Provisions for pay incentives and promotion 
        incentives to be awarded under the system only if--
                    ``(i) the cost of the acquisition program is less 
                than 90 percent of the baseline parameter established 
                for the cost of the program under section 2435 of title 
                10, United States Code;
                    ``(ii) the period for completion of the program is 
                less than 90 percent of the period provided under the 
                baseline parameter established for the program schedule 
                under such section; and
                    ``(iii) the results of the phase of the program 
                being executed exceed the performance parameter 
                established for the system under such section by more 
                than 10 percent.
            ``(D) Provisions for unfavorable personnel actions to be 
        taken under the system only if the acquisition program 
        performance for the phase being executed exceeds by more than 
        10 percent the cost and schedule parameters established for the 
        program phase under section 2435 of title 10, United States 
        Code, and the performance of the system acquired or to be 
        acquired under the program fails to achieve at least 90 percent 
        of the baseline parameters established for performance of the 
        program under such section.''.
    (b) Recommended Legislation.--Subsection (c) of such section is 
amended by adding at the end the following: ``The Secretary shall 
include in the recommendations provisions necessary to implement the 
requirements of subsection (b)(3).''.
    (c) Implementation of Incentives System.--Section 5001 of the 
Federal Acquisition Streamlining Act of 1994 is further amended by 
adding at the end the following:
    ``(d) Implementation of Incentives System.--(1) The Secretary shall 
complete the review required by subsection (b) and take such actions as 
are necessary to provide an enhanced system of incentives in accordance 
with such subsection not later than October 1, 1997.
    ``(2) Not later than October 1, 1996, the Secretary shall submit to 
the Committee on Armed Services of the Senate and the Committee on 
National Security of the House of Representatives a report on the 
actions taken to satisfy the requirements of paragraph (1).''.

            Subtitle B--Results-Oriented Acquisition Process

SEC. 111. REVISION OF REGULATIONS RELATING TO ACQUISITION OF MAJOR 
              SYSTEMS AND INFORMATION TECHNOLOGY SYSTEMS.

    Not later than October 1, 1996, the Secretary of Defense shall 
revise the regulations of the Department of Defense relating to the 
acquisition of major systems and of information technology systems to 
ensure that, in the acquisition of those systems, program managers 
focus on achieving results rather than on preparing and transmitting 
reports and building consensus among interested persons.

SEC. 112. RESULTS ORIENTED ACQUISITION PROGRAM CYCLE.

    (a) Cycle Defined.--Chapter 131 of title 10, United States Code, is 
amended by adding at the end the following:
``Sec. 2221. Results oriented acquisition program cycle
    ``(a) Program Phases.--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 the program executive 
                officer;
                    ``(C) shall include representatives of commanders 
                of unified and specified combatant commands, all armed 
                forces (other than the Coast Guard), laboratories, and 
                industry; and
                    ``(D) shall result in the team recommending to the 
                potential user a range of solutions for meeting user 
                requirements or for evaluating opportunities;
                    ``(E) shall be completed within one to three 
                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 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) shall include full-scale development, 
                operational testing, and integration of components; and
                    ``(B) shall be completed within one to five years.
            ``(4) Production, integration into existing systems, or 
        production and integration into existing systems.
    ``(b) Relationship Between Extent of Technical Risk and Completion 
of Phases.--(1) The time constraints set forth in subsections 
(a)(1)(E), (a)(2)(B), and (a)(3)(B) establish maximum limits for 
completion of the acquisition program cycle and for each phase of the 
program cycle. The regulations prescribed for the acquisition program 
cycle shall provide for reducing the maximum time limits for an 
acquisition program in relation to the degree of the technical 
difficulty that is involved in the execution of the various 
recommendations developed for the program in the integrated decision 
team phase under subsection (a)(1)(D).
    ``(2) The regulations shall provide three alternatives for maximum 
time limits that are to apply to completion of the acquisition program 
cycle for a program and for each phase of the program cycle, as 
follows:
            ``(A) In the case of an acquisition that involves complex 
        technical risks and integration issues, completion within the 
        maximum time limits set forth in subsection (a).
            ``(B) In the case of an acquisition of a component 
        primarily using existing technology or of a modification of a 
        component or system primarily using existing technology, 
        accelerated completion.
            ``(C) In the case of an acquisition of a commercial item or 
        a nondevelopmental item, relatively rapid completion.
    ``(c) Single Major Decision Point.--(1) 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, development, and testing.
    ``(2) At the major decision point for an acquisition program, the 
Under Secretary of Defense for Acquisition, in consultation with the 
Vice Chairman of the Joint Chiefs of Staff, shall--
            ``(A) review the program;
            ``(B) determine whether the program should continue to be 
        carried out beyond product integration and development; and
            ``(C) decide whether--
                    ``(i) to direct the program manager to request an 
                integrated decision team meeting;
                    ``(ii) to proceed into product integration or 
                development; or
                    ``(iii) to terminate the program.
    ``(3) In the review of an acquisition program, the Under Secretary 
shall consider the potential benefits, independent cost estimates, 
affordability, needs, and risks of the program.
    ``(d) User Involvement in Integration Matters.--The regulations 
under subsection (a) shall ensure that the potential users (within the 
military departments) of an item being acquired under the program cycle 
set forth in subsection (a) are afforded an opportunity to participate 
meaningfully in the acquisition decisions concerning such item during 
the phases described in paragraphs (3) and (4) of that subsection.''.
    (b) Conforming Amendments.--
            (1) Coordination and communication of defense research 
        activities.--Section 2364 of title 10, United States Code, is 
        amended--
                    (A) in subsection (b)(5), by striking out ``making 
                milestone 0, milestone I, and milestone II decision'' 
                and inserting in lieu thereof ``the integrated decision 
                team meeting, the making of the decision at the single 
                major decision point under subsection (c) of section 
                2221 of this title, and, as appropriate, the making of 
                other acquisition program decisions during 
the acquisition program cycle described in section 2221 of this 
title''; and
                    (B) by striking out subsection (c).
            (2) Survivability and lethality testing.--Section 2366(c) 
        of such title is amended by striking out ``engineering and 
        manufacturing development'' in paragraph (1) and in the second 
        sentence of paragraph (2) and inserting in lieu thereof 
        ``product integration, development, and testing''.
            (3) Low-rate initial production of new systems.--Section 
        2400(a)(2) of such title is amended by striking out 
        ``engineering and manufacturing development'' and inserting in 
        lieu thereof ``product integration, development, and testing''.
            (4) Selected acquisition reports.--Section 2432 of such 
        title is amended--
                    (A) in subsection (b)(3)(A)(i), by striking out 
                ``engineering and manufacturing development'' and 
                inserting in lieu thereof ``product integration, 
                development, and testing'';
                    (B) in subsection (c)(3)(A), by striking out 
                ``engineering and manufacturing development phase or 
                has completed that stage'' and inserting in lieu 
                thereof ``product integration, development, and testing 
                phase or has completed that phase'';
                    (C) in subsection (h)(1)--
                            (i) in the first sentence, by striking out 
                        ``engineering and manufacturing development'' 
                        and inserting in lieu thereof ``prototype 
                        development and testing''; and
                            (ii) in the second sentence, by striking 
                        out ``engineering and manufacturing 
                        development'' and inserting in lieu thereof 
                        ``product integration, development, and 
                        testing''.
            (5) Major defense acquisition programs.--
                    (A) Independent cost estimates.--Section 2434(a) of 
                such title is amended by striking out ``engineering and 
                manufacturing development, or the production and 
                deployment,'' and inserting in lieu thereof ``product 
                integration, development, and testing''.
                    (B) Baseline description.--Section 2435 of such 
                title is amended--
                            (i) in subsection (b), by striking out 
                        ``engineering and manufacturing development'' 
                        and inserting in lieu thereof ``prototype 
                        development and testing''; and
                            (ii) by striking out subsection (c) and 
                        inserting in lieu thereof the following:
    ``(c) Schedule.--A baseline description for a major defense 
acquisition program shall be prepared under this section--
            ``(1) before the program enters prototype development and 
        testing;
            ``(2) before the program enters product integration and 
        development; and
            ``(3) before the program enters production, integration 
        into existing systems, or production and integration into 
        existing systems.''.

SEC. 113. OPERATIONAL TEST AND EVALUATION REQUIREMENTS IN RELATION TO 
              LOW-RATE PRODUCTION.

    (a) Requirements.--Section 2399 of title 10, United States Code, is 
amended to read as follows:
``Sec. 2399. Operational test and evaluation of major systems
    ``(a) Condition for Proceeding Into Low-Rate Initial Production.--
(1) The Secretary of Defense may not issue a notice to proceed with 
production of a major system until--
            ``(A) at least one phase of initial operational test and 
        evaluation has been completed, during the prototype development 
        and testing phase and again during the product integration, 
        development, and testing phase, in order to demonstrate that 
        the system--
                    ``(i) meets the minimum performance requirements 
                established for the system;
                    ``(ii) is suitable for the purposes for which the 
                system is to be acquired; and
                    ``(iii) does not require significant design changes 
                or other significant modifications in order to 
                demonstrate required operational capabilities; and
            ``(B) the Director of Operational Test and Evaluation has 
        certified to the Secretary and to the congressional defense 
        committees that--
                    ``(i) the test and evaluation performed on the 
                system were adequate; and
                    ``(ii) the conditions set forth in clauses (i), 
                (ii), and (iii) of subparagraph (A) were satisfied.
    ``(2) The Secretary may waive the requirements of paragraph (1)(B) 
in the case of a major system if the Secretary--
            ``(A) determines and certifies to the congressional defense 
        committees that the waiver is vital to national security 
        interests; or
            ``(B) certifies to the congressional defense committees 
        that the Secretary has information that demonstrates that the 
        conditions set forth in clauses (i), (ii), and (iii) of 
        paragraph (1)(A) can be satisfied without increasing--
                    ``(i) the production unit cost of the system by 
                more than 10 percent over the production unit cost 
                estimated at the time of the waiver; and
                    ``(ii) the production period for the system by more 
                than 10 percent over the production period estimated at 
                the time of the waiver.
    ``(3) Paragraph (1) does not apply to acquisition of a naval vessel 
or a satellite.
    ``(b) Condition for Proceeding Beyond Low-Rate Initial 
Production.--The Secretary of Defense shall provide that a program for 
the acquisition of a major system may not proceed beyond low-rate 
initial production until initial operational test and evaluation of the 
program is completed.
    ``(c) Operational Test and Evaluation.--(1) Operational testing of 
a major system may not be conducted until the Director of Operational 
Test and Evaluation of the Department of Defense--
            ``(A) approves (in writing) the adequacy of the plans for 
        operational test and evaluation of the system, including the 
        adequacy of the plans with regard to--
                    ``(i) the projected level of funding; and
                    ``(ii) demonstration of the matters set forth in 
                clauses (i), (ii), and (iii) of subsection (a)(1)(A); 
                and
            ``(B) determines the quantity of articles of the system 
        that are needed for operational testing.
    ``(2) The Director shall analyze the results of the operational 
test and evaluation of each major system. At the conclusion of such 
testing, the Director shall determine whether--
            ``(A) the test and evaluation performed were adequate; and
            ``(B) the results of such test and evaluation confirm that 
        the items or components actually tested are effective and 
        suitable for combat.
    ``(3) A final decision within the Department of Defense to proceed 
with a program for the acquisition of a major system beyond low-rate 
initial production may not be made until the Director submits to the 
Secretary of Defense and the congressional defense committees a written 
opinion on the matters.
    ``(d) Non-Major Systems.--Operational testing of a new system other 
than a major system may not be conducted until the head of the 
operational test and evaluation agency of the military department 
concerned determines the quantity of articles of the system that are to 
be procured for operational testing.
    ``(e) Impartiality of Contractor Testing Personnel.--No person 
employed by the contractor under a program for the acquisition of a 
major system may be involved in the conduct of the operational test and 
evaluation necessary for the program to proceed beyond low-rate 
production in accordance with subsection (b). The limitation in the 
preceding sentence does not apply to the extent that the Secretary of 
Defense plans for persons employed by that contractor to be involved in 
the operation, maintenance, and support of the system when the system 
is deployed in combat.
    ``(f) Impartial Contracted Advisory and Assistance Services.--(1) 
The Director may not contract with any person for advisory and 
assistance services with regard to the test and evaluation of a major 
system if that person participated in (or is participating in) the 
development, production, or testing of such system for a military 
department or Defense Agency (or for another contractor of the 
Department of Defense).
    ``(2) The Director may waive the limitation under paragraph (1) in 
any case if the Director determines in writing that sufficient steps 
have been taken to ensure the impartiality of the contractor in 
providing the services. The Inspector General of the Department of 
Defense shall review each such waiver and shall include in the 
Inspector General's semi-annual report an assessment of those waivers 
made since the last such report.
    ``(3)(A) A contractor that has participated in (or is participating 
in) the development, production, or testing of a system for the 
Department of Defense or for another contractor of the Department of 
Defense may not be involved in any way in the establishment of criteria 
for data collection, performance assessment, or evaluation activities 
for the operational test and evaluation of that system.
    ``(B) The limitation in subparagraph (A) does not apply to a 
contractor that has participated solely in testing for the Federal 
Government.
    ``(g) Source of Funds for Testing.--The costs for all tests 
required under subsection (b) shall be paid from funds available for 
the system being tested.
    ``(h) Director's Annual Report.--As part of the annual report of 
the Director under section 139 of this title, the Director shall 
describe for each program covered in the report the status of test and 
evaluation activities in comparison with the test and evaluation master 
plan for that program, as approved by the Director. The Director shall 
include in such annual report a description of each waiver granted 
under subsection (f)(2) since the last such report.
    ``(i) Definitions.--In this section:
            ``(1) The term `major system' has the meaning given that 
        term in section 2302(5) of this title.
            ``(2) The term `operational test and evaluation' has the 
        meaning given that term in section 139(a)(2)(A) of this title. 
        For purposes of subsection (a), that term does not include an 
        operational assessment based exclusively on--
                    ``(A) computer modeling;
                    ``(B) simulation; or
                    ``(C) an analysis of system requirements, 
                engineering proposals, design specifications, or any 
                other information contained in program documents.
            ``(3) The term `congressional defense committees' means--
                    ``(A) the Committee on Armed Services and and the 
                Committee on Appropriations of the Senate; and
                    ``(B) the Committee on National Security and the 
                Committee on Appropriations of the House of 
                Representatives.''.
    (b) Quantities Procured for Low-Rate Initial Production.--(1) 
Subsection (a) of section 2400 of such title is amended--
            (A) by striking out paragraph (3);
            (B) by redesignating paragraphs (4) and (5) as paragraphs 
        (3) and (4), respectively;
            (C) by striking out the second sentence of paragraph (4), 
        as so redesignated; and
            (D) by adding at the end the following new paragraph:
    ``(5)(A) Except as provided in subparagraph (B), the quantity 
determined for a system under paragraph (1) may not exceed the quantity 
equal to 10 percent of the total quantity of articles of the system 
that is to be acquired under the program for the acquisition of such 
system, determined as of the date on which funds appropriated for 
procurement are first obligated for the program.
    ``(B) The quantity of articles determined for a system under 
paragraph (1) may exceed the maximum quantity provided under 
subparagraph (A)--
            ``(i) during a war declared by Congress or a national 
        emergency declared by Congress or the President; or
            ``(ii) if the Secretary of Defense certifies to the 
        congressional defense committees referred to in section 
        2399(i)(3) of this title that it is necessary to do so in order 
        to provide for completion of initial operational test and 
        evaluation of the system and that it is impracticable to limit 
        the quantity of the articles procured to such maximum quantity.
    ``(6) The additional quantity of articles that may be determined 
for a system pursuant to the exception in paragraph (5)(B)(ii) may not 
exceed the quantity equal to 5 percent of the total quantity of 
articles of the system that are to be acquired under the program, 
determined as of the date referred to in paragraph (5)(A).''.
    (2) Subsection (b) of such section is amended to read as follows:
    ``(b) Low-Rate Initial Production of Weapon Systems.--Except as 
provided in subsection (c), low-rate initial production with respect to 
a new system is production of the system in the minimum quantity 
necessary--
            ``(1) to establish an initial production base with the 
        capacity to provide production-configured or representative 
        articles for operational tests pursuant to section 2399 of this 
        title; and
            ``(2) to maintain such production base until initial 
        operational test and evaluation of the system is completed and 
        a decision is made regarding whether to proceed into full-rate 
        production.''.
    (c) Duties and Authority of Director of Operational Test and 
Evaluation.--Section 139(c) of title 10, United States Code, is amended 
by striking out the first sentence and inserting in lieu thereof the 
following: ``The Director reports directly, without intervening review 
or approval, to the Secretary of Defense personally.''.
    (d) Effective Date and Savings Provision.--(1) The amendments made 
by this section shall take effect on the date of the enactment of this 
Act.
    (2) The amendments made by subsections (a), (b), and (c) shall 
apply with respect to programs for the acquisition of systems that, as 
of the date of the enactment of this Act, are scheduled to enter low-
rate initial production on or after October 1, 1996.
    (3) The provisions of sections 2399 and 2400 of title 10, United 
States Code, as in effect on the day before the date of the enactment 
of this Act, shall continue to apply after that date to programs for 
the acquisition of major systems that enter or, as of the date of the 
enactment of this Act, are scheduled to enter low-rate initial 
production before October 1, 1996.

SEC. 114. ACQUISITION OF INFORMATION TECHNOLOGY.

    The Secretary of Defense shall revise the existing Department of 
Defense directives regarding development and procurement of information 
systems (numbered in the 8000 series) and the Department of Defense 
directives numbered in the 5000 series in order to consolidate those 
directives into one series of directives that is consistent with the 
simplified acquisition program cycle provided for in section 2221 of 
title 10, United States Code, as added by section 112.

                     Subtitle C--Rapid Contracting

SEC. 121. GOAL.

    (a) Establishment.--The Secretary of Defense shall establish a goal 
of reducing by 50 percent the time necessary for the Department of 
Defense to acquire an item for the user of that item.
    (b) Action.--The Secretary shall take such action as is necessary 
to ensure that the Department of Defense achieves the goal established 
under subsection (a), including actions necessary to facilitate--
            (1) the definition of the requirements for an acquisition; 
        and
            (2) the selection of sources from among the offerors.

SEC. 122. AUTHORITY TO LIMIT NUMBER OF OFFERORS.

    Section 2305(b) of title 10, United States Code, is amended by 
adding at the end the following:
    ``(5) Under regulations prescribed by the head of an agency, a 
contracting officer of the agency receiving more than three competitive 
proposals for a proposed contract may solicit best and final offers 
from three of the offerors who submitted offers within the competitive 
range. Notwithstanding paragraph (4)(A)(i), the contracting officer 
need not first conduct discussions with all of the responsible parties 
that submit offers within the competitive range.''.

SEC. 123. PREFERENCE FOR CERTIFIED CONTRACTORS.

    Chapter 137 of title 10, United States Code, is amended by 
inserting after section 2319 the following new section:
``Sec. 2319a. Contractor performance certification system
    ``(a) Certification Authorized.--The Secretary of Defense may 
establish a contractor certification system for the procurement of 
particular property or services that are procured by the Department of 
Defense on a repetitive basis. Under the system, the Secretary shall 
use competitive procedures to certify contractors as eligible for 
contracts to furnish such property or services. The Secretary shall 
award certifications on the basis of the relative efficiency and 
effectiveness of the business practices, level of quality, and 
demonstrated contract performance of the responding contractors with 
regard to the particular property or services.
    ``(b) Procurement From Certified Contractors.--The head of an 
agency within the Department of Defense may enter into a contract for a 
procurement of property or services referred to in subsection (a) on 
the basis of a competition among contractors certified with respect to 
such property or services pursuant to that subsection.
    ``(c) Termination of Certification.--The Secretary--
            ``(1) may provide for the termination of a certification 
        awarded a contractor under this section upon the expiration of 
        a period specified by the Secretary; and
            ``(2) may revoke a certification awarded a contractor under 
        this section upon a determination that the quality of 
        performance of the contractor does not meet standards applied 
        by the Secretary as of the time of the revocation decision.''.

SEC. 124. CONSIDERATION OF PAST PERFORMANCE AND ELIGIBILITY 
              CERTIFICATION.

    Section 2305 of title 10, United States Code, is amended--
            (1) in subsection (a)(2)(A)(i)--
                    (A) by striking out ``(including price)'' and 
                inserting in lieu thereof ``(including price, past 
                contract performance of the offeror, and any 
                certification of the offeror under section 2319a of 
                this title)''; and
                    (B) by striking out ``and noncost-related'' and 
                inserting in lieu thereof the following: ``past 
                contract performance of the offeror, any certification 
                of the offeror under section 2319a of this title, and 
                other noncost-related'';
            (2) in subsection (b)--
                    (A) in paragraph (3), by striking out ``and the 
                other price-related factors included in the 
                solicitation'' in the second sentence and inserting in 
                lieu thereof ``, the other price-related factors 
                included in the solicitation, the past contract 
                performance (if any) of the offerors, and any 
                certification of offerors under section 2319a of this 
                title''; and
                    (B) in paragraph (4)(B), by striking out ``and the 
                other factors included in the solicitation'' in the 
                first sentence and inserting in lieu thereof ``, the 
                past contract performance (if any) of the offerors, any 
                certification of offerors under section 2319a of this 
                title, and the other factors included in the 
                solicitation'';
            (3) in subsection (c)(1), by inserting ``past performance 
        of the offerors, any certification of offerors under section 
        2319a of this title,'' after ``(considering quality, price, 
        delivery,''; and
            (4) by adding at the end the following new subsection:
    ``(g) The Secretary of Defense shall maintain a contractor 
performance data base. The Secretary shall include in the data base 
information on the history of the performance of each contractor under 
Department of Defense contracts and, for each such contract performed 
by the contractor, a technical evaluation of the contractor's 
performance prepared by the acquisition program manager responsible for 
the contract. The Secretary shall make information in the data base 
available to acquisition program executive officers and acquisition 
program managers of the Department of Defense and to the contractor to 
which the information pertains.''.

SEC. 125. ENCOURAGEMENT OF MULTIYEAR CONTRACTING.

    Section 2306b(a) of title 10, United States Code, is amended in the 
matter preceding paragraph (1) by striking out ``may'' and inserting in 
lieu thereof ``shall, to the maximum extent possible,''.

SEC. 126. ENCOURAGEMENT OF USE OF LEASING AUTHORITY.

    (a) In General.--Chapter 137 of title 10, United States Code, is 
amended by inserting after section 2316 the following new section:
``Sec. 2317. Equipment leasing
    ``The Secretary of Defense shall authorize and encourage the use of 
leasing in the acquisition of equipment whenever such leasing is 
practicable and otherwise authorized by law.''.
    (b) Report.--Not later than 90 days after the the date of the 
enactment of this Act, the Secretary of Defense shall submit to 
Congress a report setting forth changes in legislation that would be 
required in order to facilitate the use of leases by the Department of 
Defense in the acquisition of equipment, including the use of multiyear 
leases.

           Subtitle D--Performance Based Contract Management

SEC. 131. UNALLOWABLE COSTS.

    (a) Specific Costs.--Section 2324(e)(1) of title 10, United States 
Code, is amended by adding at the end the following:
            ``(P) Labor costs in excess of the labor costs provided for 
        in the offer of the contractor.
            ``(Q) Bid protest costs.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and shall apply 
with respect to solicitations for offers issued under chapter 137 of 
title 10, United States Code, on or after that date.

SEC. 132. ALTERNATIVES APPROACHES TO CONTRACT MANAGEMENT.

    The Secretary of Defense shall prescribe in regulations policies 
and procedures that encourage contract administrators of the Department 
of Defense to submit to program managers, and program managers to 
consider, alternative approaches to contract management. A contract 
administrator submitting an alternative approach to the program manager 
shall include an analysis of the costs and benefits of each 
alternative.

SEC. 133. CONTRACTOR SHARE OF GAINS AND LOSSES FROM COST, SCHEDULE, AND 
              PERFORMANCE EXPERIENCE.

    Chapter 137 of title 10, United States Code, is amended by 
inserting after section 2306b the following new section:
``Sec. 2306c. Contractor share of gains and losses from cost, schedule, 
              and performance experience
    ``The Secretary of Defense shall prescribe in regulations a clause, 
to be included in each cost-type contract and incentive-type contract, 
that provides a system for the contractor to be rewarded for contract 
performance exceeding the contract cost, schedule, or performance 
parameters to the benefit of the United States and to be penalized for 
failing to adhere to cost, schedule, or performance parameters to the 
detriment of the United States.''.

                    Subtitle E--Financial Management

SEC. 141. PHASE FUNDING OF DEFENSE ACQUISITION PROGRAMS.

    Chapter 131 of title 10, United States Code, as amended by section 
112, is further amended by adding at the end the following:
``Sec. 2222. 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 for which an authorization of 
appropriations is required by section 114 of this title, 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 information shall identify the intended user 
of the system to be acquired under the program and shall include 
objective, quantifiable criteria for assessing the extent to which the 
objectives and goals determined pursuant to section 2435 of this title 
are achieved.
    ``(b) Full Phase Funding.--(1) In authorizing appropriations for an 
acquisition program for which an authorization of appropriations is 
required by section 114 of this title, 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. Each 
such 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. 142. MAXIMIZED BENEFIT FUNDING.

    Chapter 131 of title 10, United States Code, as amended by section 
141, is further amended by adding at the end the following:
``Sec. 2223. Maximized benefit funding
    ``(a) Transfers Authority.--The Secretary of Defense may transfer 
funds from appropriations available for a particular phase of an 
acquisition program of the Department of Defense in order to pay out of 
the transferred funds the cost of incentives provided program managers 
who have been certified by the Secretary as having achieved at least 90 
percent of the cost, schedule, and performance goals established for 
that phase.
    ``(b) Limitations.--The Secretary shall prescribe in regulations--
            ``(1) the percent of available funds that may be 
        transferred under the authority of subsection (a) for payment 
        of incentives; and
            ``(2) a limitation that the total amount transferred for a 
        phase of a program may not exceed \1/3\ of the total amount of 
        the cost of such phase that is determined under the regulations 
        to have been saved as a result of the achievement of the goals 
        for which the incentives are to be paid.''.

SEC. 143. IMPROVED DEPARTMENT OF DEFENSE CONTRACT PAYMENT PROCEDURES.

    (a) Review and Improvement of Procedures.--The Comptroller General 
of the United States shall review commercial practices regarding 
accounts payable and, considering the results of the review, develop 
standards for the Secretary of Defense to use for improving the 
contract payment procedures and financial management systems of the 
Department of Defense.
    (b) GAO Report.--Not later than September 30, 1996, the Comptroller 
General shall submit to Congress a report containing the following 
matters:
            (1) The weaknesses in the financial management processes of 
        the Department of Defense.
            (2) Deviations of the Department of Defense payment 
        procedures and financial management systems from the standards 
        developed pursuant to subsection (a), expressed quantitatively.
            (3) The officials of the Department of Defense who are 
        responsible for resolving the deviations.
    (c) Responsibilities of the Secretary.--The Secretary of Defense 
shall take such corrective actions as are necessary to resolve the 
deviations reported pursuant to subsection (b) to within 90 percent of 
the applicable standards developed under subsection (a).
    (d) Enforcement of Responsibility For Resolving System 
Weaknesses.--The Secretary of Defense may not provide any bonus or 
incentive pay to an official identified pursuant to subsection (b) as 
responsible for resolving deviations until the Secretary certifies to 
Congress that the official has resolved more than 90 percent of those 
deviations to be within the applicable standards developed under 
subsection (a).

               Subtitle F--Defense Acquisition Workforce

SEC. 151. CONSIDERATION OF PAST PERFORMANCE IN ASSIGNMENT TO 
              ACQUISITION POSITIONS.

    (a) Requirement.--Section 1701(a) of title 10, United States Code, 
is amended by adding at the end the following: ``The policies and 
procedures shall provide that education and training in acquisition 
matters, and past performance of acquisition responsibilities, are 
major factors in the selection of personnel for assignment to 
acquisition positions in the Department of Defense.''.
    (b) Performance Requirements for Assignment.--(1) Section 1723(a) 
of title 10, United States Code, is amended by inserting ``, including 
requirements relating to demonstrated past performance of acquisition 
duties,'' in the first sentence after ``experience requirements''.
    (2) Section 1724(a)(2) of such title is amended by inserting before 
the semicolon at the end the following: ``and have demonstrated 
proficiency in the performance of acquisition duties in the contracting 
position or positions previously held''.
    (3) Section 1735 of such title is amended--
            (A) in subsection (b)--
                    (i) by striking out ``and'' at the end of paragraph 
                (2);
                    (ii) by striking out the period at the end of 
                paragraph (3) and inserting in lieu thereof ``; and''; 
                and
                    (iii) by adding at the end the following:
            ``(4) must have demonstrated proficiency in the performance 
        of acquisition duties.'';
            (B) in subsection (c)--
                    (i) by striking out ``and'' at the end of paragraph 
                (2);
                    (ii) by striking out the period at the end of 
                paragraph (3) and inserting in lieu thereof ``; and''; 
                and
                    (iii) by adding at the end the following:
            ``(4) must have demonstrated proficiency in the performance 
        of acquisition duties.'';
            (C) in subsection (d), by inserting before the period at 
        the end the following: ``, and have demonstrated proficiency in 
        the performance of acquisition duties''; and
            (D) in subsection (e), by inserting before the period at 
        the end the following: ``, and have demonstrated proficiency in 
        the performance of acquisition duties''.

SEC. 152. TERMINATION OF DEFENSE ACQUISITION SCHOOLS.

    (a) Contracting for Defense Acquisition Education and Training.--
Chapter 87 of title 10, United States Code, is amended by adding at the 
end of subchapter IV the following:
``Sec. 1747 Professional educational development and training programs
    ``The Secretary of Defense shall provide for the acquisition of 
professional educational development and training services for the 
acquisition workforce from commercial sources and through programs 
provided by Federal Government sources for all acquisition personnel of 
all departments and agencies of the Federal Government.''.
    (b) Termination of Defense Acquisition University Structure.--
Section 1746 of title 10, United States Code, is repealed.
    (c) Education and Training of Program Managers and Program 
Executive Officers.--Section 1735 of such title is amended--
            (1) by striking out paragraph (1) of subsection (b) and 
        inserting in lieu thereof the following:
            ``(1) must have completed a course of program management 
        provided for under section 1747 of this title or determined by 
        the Secretary of Defense as appropriate training for program 
        managers of the Department of Defense;''; and
            (2) by striking out paragraph (1) of subsection (c) and 
        inserting in lieu thereof the following:
            ``(1) must have completed a course of program management 
        provided for under section 1747 of this title or determined by 
        the Secretary of Defense as appropriate training for program 
        executive officers of the Department of Defense;''.
    (d) Alternative Proposal.--The Secretary may submit to Congress a 
proposed system of professional educational development and training 
for the Department of Defense acquisition workforce as an alternative 
to the system provided for in the amendments made by this section. Any 
such proposal shall be submitted not later than June 30, 1996.
    (e) Effective Date.--The amendments made by this section shall take 
effect on October 1, 1996.

       Subtitle G--Revision of Procurement Integrity Requirements

SEC. 161. AMENDMENTS TO OFFICE OF FEDERAL PROCUREMENT POLICY ACT.

    (a) Recusal.--Subsection (c) of section 27 of the Office of 
Procurement Policy Act (41 U.S.C. 423) is amended--
            (1) in paragraph (1)--
                    (A) in the matter above subparagraph (A), by 
                inserting ``only'' after ``subsection (b)(1)''; and
                    (B) in subparagraph (A), by inserting ``(including 
                the modification or extension of a contract)'' after 
                ``any procurement'';
            (2) by striking out paragraphs (2) and (3) and inserting in 
        lieu thereof:
    ``(2) Whenever the head of a procuring activity approves a recusal 
under paragraph (1), a copy of the recusal request and the approval of 
the request shall be retained by such official for a period (not less 
than five years) specified in regulations prescribed in accordance with 
subsection (o).
    ``(3)(A) Except as provided in subparagraph (B), all recusal 
requests and approvals of recusal requests pursuant to this subsection 
shall be made available to the public on request.
    ``(B) Any part of a recusal request or an approval of a recusal 
request that is exempt from the disclosure requirements of section 552 
of title 5, United States Code, under subsection (b)(1) of such section 
may be withheld from disclosure to the public otherwise required under 
subparagraph (A).''; and
            (3) in paragraph (4), by striking out ``competing 
        contractor'' and inserting in lieu thereof ``person''.
    (b) Applicability of Certification Requirement.--Subsection 
(e)(7)(A) of such section is amended by adding at the end the 
following: ``However, paragraph (1)(B) does not apply with respect to a 
contract for less than $500,000.''.
    (c) Restrictions Resulting From Procurement Activities of 
Procurement Officials.--Subsection (f) of such section is amended--
            (1) by redesignating paragraph (3) as paragraph (4); and
            (2) by striking out paragraphs (1) and (2) and inserting in 
        lieu thereof the following:
    ``(1) No individual who, in the year prior to separation from 
service as an officer or employee of the Government or an officer of 
the uniformed services in a covered position, participated personally 
and substantially in acquisition functions related to a contract, 
subcontract, or claim of $500,000 or more and--
            ``(A) engaged in repeated direct contact with the 
        contractor or subcontractor on matters relating to such 
        contract, subcontract, or claim; or
            ``(B) exercised significant ongoing decisionmaking 
        responsibility with respect to the contractor or subcontractor 
        on matters relating to such contract, subcontract, or claim,
shall knowingly accept or continue employment with such contractor or 
subcontractor for a period of one year following the individual's 
separation from service, except that such individual may accept or 
continue employment with any division or affiliate of such contractor 
or subcontractor that does not produce the same or similar products as 
the entity involved in the negotiation or performance of the contract 
or subcontract or the adjustment of the claim.
    ``(2) No contractor or subcontractor, or any officer, employee, 
agent, or consultant of such contractor or subcontractor shall 
knowingly offer, provide, or continue any employment for another 
person, if such contractor, subcontractor, officer, employee, agent, or 
consultant knows or should know that the acceptance of such employment 
is or would be in violation of paragraph (1).
    ``(3) The head of each Federal agency shall designate in writing as 
a `covered position' under this section each of the following positions 
in that agency:
            ``(A) The position of source selection authority, member of 
        a source selection evaluation board, or chief of a financial or 
        technical evaluation team, or any other position, if the 
        officer or employee in that position is likely personally to 
        exercise substantial responsibility for ongoing discretionary 
        functions in the evaluation of proposals or the selection of a 
        source for a contract in excess of $500,000.
            ``(B) The position of procuring contracting officer, or any 
        other position, if the officer or employee in that position is 
        likely personally to exercise substantial responsibility for 
        ongoing discretionary functions in the negotiation of a 
        contract in excess of $500,000 or the negotiation or settlement 
        of a claim in excess of $500,000.
            ``(C) The position of program executive officer, program 
        manager, or deputy program manager, or any other position, if 
        the officer or employee in that position is likely personally 
        to exercise similar substantial responsibility for ongoing 
        discretionary functions in the management or administration of 
        a contract in excess of $500,000.
            ``(D) The position of administrative contracting officer, 
        the position of an officer or employee assigned on a permanent 
        basis to a Government Plant Representative's Office, the 
        position of auditor, a quality assurance position, or any other 
        position, if the officer or employee in that position is likely 
        personally to exercise substantial responsibility for ongoing 
        discretionary functions in the on-site oversight of a 
        contractor's operations with respect to a contract in excess of 
        $500,000.
            ``(E) A position in which the incumbent is likely 
        personally to exercise substantial responsibility for ongoing 
        discretionary functions in operational or developmental testing 
        activities involving repeated direct contact with a contractor 
        regarding a contract in excess of $500,000.''.
    (d) Disclosure of Proprietary or Source Selection Information to 
Unauthorized Persons.--Subsection (l) of such section is amended--
            (1) by inserting ``who are likely to be involved in 
        contracts, modifications, or extensions in excess of $25,000'' 
        in the first sentence after ``its procurement officials''; and
            (2) by striking out ``(e)'' each place it appears and 
        inserting in each such place ``(f)''.
    (e) Rules of Construction.--Subsection (n) of such section is 
amended to read as follows:
    ``(n) Rules of Construction.--Nothing in this section shall be 
construed to--
            ``(1) authorize the withholding of any information from the 
        Congress, any committee or subcommittee thereof, a Federal 
        agency, any board of contract appeals of a Federal agency, the 
        Comptroller General, or an inspector general of a Federal 
        agency;
            ``(2) restrict the disclosure of information to, or receipt 
        of information by, any person or class of persons authorized, 
        in accordance with applicable agency regulations or procedures, 
        to receive that information;
            ``(3) restrict a contractor from disclosing its own 
        proprietary information or the recipient of information so 
        disclosed by a contractor from receiving such information; or
            ``(4) restrict the disclosure or receipt of information 
        relating to a Federal agency procurement that has been canceled 
        by the agency and that the contracting officer concerned 
        determines in writing is not likely to be resumed.''.
    (f) Term To Be Defined in Regulations.--Subsection (o)(2)(A) of 
such section is amended--
            (1) by inserting ``money, gratuity, or other'' before 
        ``thing of value'''; and
            (2) by inserting before the semicolon ``and such other 
        exceptions as may be adopted on a Governmentwide basis under 
        section 7353 of title 5, United States Code''.
    (g) Terms Defined in Law.--Subsection (p) of such section is 
amended--
            (1) in paragraph (1) by striking out ``clauses (i)-(viii)'' 
        and inserting in lieu thereof ``clauses (i) through (vii)'';
            (2) in paragraph (3)--
                    (A) in subparagraph (A)--
                            (i) by striking out clause (i);
                            (ii) by redesignating clauses (ii), (iii), 
                        (iv), (v), (vi), (vii), and (viii) as clauses 
                        (i), (ii), (iii), (iv), (v), (vi), and (vii), 
                        respectively; and
                            (iii) in clause (i) (as redesignated by 
                        subclause (II) of this clause), by striking out 
                        ``review and approval of a specification'' and 
                        inserting in lieu thereof ``approval or 
                        issuance of a specification, acquisition plan, 
                        procurement request, or requisition''; and
                    (B) in subparagraph (B), by striking out all after 
                ``includes'' and inserting in lieu thereof the 
                following: ``any individual acting on behalf of, or 
                providing advice to, the agency with respect to any 
                phase of the agency procurement concerned, regardless 
                of whether such individual is a consultant, expert, or 
                adviser, or an officer or employee of a contractor or 
                subcontractor (other than a competing contractor).''; 
                and
            (3) in paragraph (6)(A), by inserting ``nonpublic'' before 
        ``information''.

SEC. 162. AMENDMENTS TO TITLE 18, UNITED STATES CODE.

    Section 208(a) of title 18, United States Code, is amended--
            (1) by inserting ``(1)'' before ``Except as permitted''; 
        and
            (2) by adding at the end the following new paragraph:
    ``(2) Whoever knowingly aids, abets, counsels, commands, induces, 
or procures conduct prohibited by this section shall be subject to the 
penalties set forth in section 216 of this title.''.

SEC. 163. REPEAL OF SUPERSEDED AND OBSOLETE LAWS.

    (a) Repeal.--The following provisions of law are repealed:
            (1) Sections 2207, 2397, 2397a, 2397b, and 2397c of title 
        10, United States Code.
            (2) Section 281 of title 18, United States Code.
            (3) Part A of title VI of the Department of Energy 
        Organization Act (42 U.S.C. 7211 through 7218).
    (b) Repeal of Superseded Law.--Section 6001(b) of the Federal 
Acquisition Streamlining Act of 1994 (Public Law 103-355; 108 Stat. 
3362; (18 U.S.C. 281 note) is repealed.

SEC. 164. IMPLEMENTATION.

    (a) Regulations.--Not later than 180 days after the date of the 
enactment of this Act, regulations implementing the amendments made by 
section 161 to section 27 of the Office of Federal Procurement Policy 
Act (41 U.S.C. 423), including definitions of the terms used in 
subsection (f) of such section, shall be issued in accordance with 
sections 6 and 25 of such Act (41 U.S.C. 405 and 521) after 
coordination with the Director of the Office of Government Ethics.
    (b) Savings Provisions.--(1) No officer, employee, agent, 
representative, or consultant of a contractor who has signed a 
certification under section 27(e)(1)(B) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 423(e)(1)(B)) before the effective 
date of this Act shall be required to sign a new certification as a 
result of the enactment of this Act.
    (2) No procurement official of a Federal agency who has signed a 
certification under section 27(l) of the Office of Federal Procurement 
Policy Act (41 U.S.C. 423(l)) before the date of enactment of this Act 
shall be required to sign a new certification as a result of the 
enactment of this Act.
    (c) Inspector General Reports.--Not later than May 31 of each of 
the years 1996 through 1999, the Inspector General of each Federal 
agency (or, in the case of a Federal agency that does not have an 
Inspector General, the head of such agency) shall submit to Congress a 
report on the compliance by the agency during the preceding year with 
the requirement for the head of the agency to designate covered 
procurement positions under section 27(f)(3) of the Office of Federal 
Procurement Policy Act (as added by section 161(c)).

                    Subtitle H--Clerical Amendments

SEC. 171. CLERICAL AMENDMENTS TO TITLE 10.

    (a) Chapter 87.--The table of sections at the beginning of 
subchapter IV of chapter 87 of title 10, United States Code, is 
amended--
            (1) by striking out the item relating to section 1746; and
            (2) by adding at the end the following new item:

``1747. Professional educational development and training programs.''.
    (b) Chapter 131.--The table of sections at the beginning of chapter 
131 of title 10, United States Code, is amended--
            (1) by striking out the item relating to section 2207; and
            (2) by adding at the end the following new items:

``2221. Results oriented acquisition program cycle.
``2222. Funding for results oriented acquisition program cycle.
``2223. Maximized benefit funding.''.
    (c) Chapter 137.--The table of sections at the beginning of chapter 
137 of title 10, United States Code, is amended--
            (1) by inserting after the item relating to section 2306b 
        the following new item:

``2306c. Contractor share of gains and losses from cost, schedule, and 
                            performance experience.'';
            (2) by inserting after the item relating to section 2316 
        the following new item:

``2317. Equipment leasing.'';
        and
            (3) by inserting after the item relating to section 2319 
        the following new item:

``2319a. Contractor performance certification system.''.
    (d) Chapter 141.--The table of sections at the beginning of chapter 
141 of title 10, United States Code, is amended--
            (1) by striking out the items relating to sections 2397, 
        2397a, 2397b, and 2397c; and
            (2) by striking out the item relating to section 2399 and 
        inserting in lieu thereof the following new item:

``2399. Operational test and evaluation of major systems under defense 
                            acquisition programs.''.

SEC. 172. OTHER LAWS.

    (a) Title 18.--The table of sections for chapter 15 of title 18, 
United States Code, is amended by striking out the item relating to 
section 281.
    (b) Department of Energy Organization Act.--The table of contents 
in the first section of the Department of Energy Organization Act (42 
U.S.C. 7101 et seq.) is amended by striking out the item relating to 
part A of title VI and the sections therein.

 TITLE II--REORGANIZATION AND REFORM OF THE DEFENSE ACQUISITION SYSTEM

   Subtitle A--Streamlining and Improvement of Acquisition Management

SEC. 201. REORGANIZATION OF ACQUISITION AUTHORITY.

    (a) Under Secretary of Defense for Acquisition and Technology.--
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) 
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 and Technology from 
among persons who are career professional employees in the acquisition 
workforce of the Department of Defense.
    ``(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 and Technology 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 and Technology, 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 Under Secretary of Defense (Comptroller), in consultation 
with the Under Secretary of Defense for Acquisition and Technology 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.
    ``(3) The policies and procedures prescribed pursuant to this 
subsection shall include a system for the commanders of the unified and 
specified combatant command to choose among alternatives developed by 
program executive officers for meeting acquisition requirements 
presented by the commanders.
``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) Nonduplication of Functions.--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) 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) 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 of this title,'' and inserting in lieu 
                thereof ``, subject to the provisions of chapter 6 of 
                this title, 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) 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 of this title,'' and inserting in lieu 
                thereof ``, subject to the provisions of chapter 6 of 
                this title, 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) 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 of this title,'' and inserting in lieu 
                thereof ``, subject to the provisions of chapter 6 of 
                this title, 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,''.
    (5) Section 2302c of such title is amended--
            (A) in subsection (a)(1), by striking out the second 
        sentence; and
            (B) in subsection (b), by striking out ``paragraph (5) or 
        (6)'' and inserting in lieu thereof ``paragraph (2) or (3)''.
    (6) Section 2303(a) of such title is amended--
            (A) by striking out paragraphs (2), (3), and (4); and
            (B) by redesignating paragraphs (5) and (6) as paragraphs 
        (2) and (3), respectively.

SEC. 202. JOINT FOREIGN PRODUCTS DEVELOPMENT.

    Section 153 of title 10, United States Code, is amended by adding 
at the end the following new subsection:
    ``(c) Recommendations for Joint Development of Foreign Products.--
The Chairman of the Joint Chiefs of Staff, in consultation with the 
commanders of the unified and specified combatant commands, shall make 
recommendations to the Under Secretary of Defense for Acquisition and 
Technology regarding the desirability of joint development by the 
United States and one or more foreign countries of systems proposed to 
be developed, or under development, by such foreign country or foreign 
countries.''.

                   Subtitle B--Transfer of Functions

SEC. 211. TRANSFERS.

    (a) Military Departments.--Except as provided in subsection (c), 
all research, development, and acquisition functions of the Secretaries 
of the military departments are transferred to the Secretary of 
Defense.
    (b) Procurement Agencies, Commands, and Offices.--Except as 
provided in subsection (c), 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 section 201), all 
functions of the following organizations:
            (1) The Defense Logistics Agency.
            (2) The Advanced Research Projects Agency.
            (3) The following procurement commands of the Army:
                    (A) The Army Materiel Command.
                    (B) The Army Information Systems Command.
                    (C) The Army Space and Strategic Defense Command.
            (4) The following procurement commands of the Navy and 
        Marine Corps:
                    (A) The Navy weapon systems commands.
                    (B) The Navy Strategic Systems Program Office.
                    (C) The Marine Corps Research, Development and 
                Acquisition Command.
            (5) The Air Force Materiel Command.
            (6) Any successor organization to any agency, command, or 
        office named in paragraphs (1) through (5).
            (7) Each agency or command within the Department of Defense 
        not referred to in paragraphs (1) through (6) that, on the day 
        before the effective date of this title, has as a primary 
        mission or function the performance of a research, development, 
        or acquisition function of the Department of Defense.
    (c) Functions Not Transferred.--(1) The following functions of the 
Secretaries of the military departments are not transferred to the 
Secretary of Defense:
            (A) Functions that relate to planning, programming, and 
        budgeting.
            (B) 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 section 
        201(c).
    (2) To the extent prescribed by the Secretary of Defense, functions 
referred to in paragraph (1)(B) that are performed by an organization 
referred to in subsection (b) need not be transferred in accordance 
with that subsection.
    (d) Termination of Organization.--The Secretary of Defense shall 
terminate each organization from which all of its functions are 
transferred under subsection (b).

SEC. 212. SAVINGS PROVISIONS.

    (a) Regulations, Instruments, Rights, and Privileges.--All rules, 
regulations, contracts, orders, determinations, permits, certificates, 
licenses, grants, and privileges--
            (1) 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
            (2) which are in effect on the effective date of this 
        title,
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 and Technology, or another authorized official, by a court 
of competent jurisdiction, or by operation of law.
    (b) Proceedings and Applications.--(1)(A) The provisions of this 
subtitle 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 title.
    (B) 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 Act 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 and Technology, by a court of 
competent jurisdiction, or by operation of law.
    (C) 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 Act had not been enacted.
    (2) The Secretary of Defense may prescribe regulations providing 
for the orderly transfer of proceedings continued under paragraph (1) 
to the Secretary of Defense or to the Under Secretary of Defense for 
Acquisition and Technology.

                   Subtitle C--Conforming Amendments

SEC. 221. MODIFICATION OF THE RESPONSIBILITY OF THE UNDER SECRETARY OF 
              DEFENSE (COMPTROLLER) FOR DEFENSE ACQUISITION BUDGETS.

    Section 135(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. 222. 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 subsection (a), by striking out ``an Acquisition 
        Corps'' in the first sentence and inserting in lieu thereof 
        ``the Acquisition Corps'';
            (B) in the section heading by striking out ``Sec. 1706'' 
        and inserting in lieu thereof ``Sec. 1704'';
            (C) by striking out subsection (a) and inserting in lieu 
        thereof the following:
    ``(a) Establishment.--The Under Secretary of Defense for 
Acquisition and Technology 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 (a), by striking out ``an Acquisition 
        Corps'' in the first sentence and inserting in lieu thereof 
        ``the Acquisition Corps'';
            (B) 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
            (C) 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 of such title is amended--
            (A) in subsection (a)(1), by striking out ``Secretary of 
        each military department, acting through the service 
        acquisition executive for that department,'' in the first 
        sentence and inserting in lieu thereof ``Secretary of Defense, 
        acting through the Under Secretary of Defense for Acquisition 
        and Technology,'';
            (B) in subsection (b)(1), by striking out ``major 
        milestone'' and inserting in lieu thereof ``phase of the 
        program cycle'';
            (C) by striking out subsection (c);
            (D) in subsection (d), by striking out paragraphs (2) and 
        (3) and inserting in lieu thereof the following:
    ``(2) The authority to grant waivers may be delegated by the Under 
Secretary only to the Director of Acquisition, Education, Training, and 
Career Development.
    ``(3) With respect to each waiver granted under this subsection, 
the Under Secretary shall set forth in a written document the rationale 
for the decision to grant the waiver. The Director of Acquisition, 
Education, Training, and Career Development shall maintain all such 
documents.'';
            (E) in subsection (e)--
                    (i) in the first sentence of paragraph (1)--
                            (I) by striking out ``an Acquisition 
                        Corps'' in the first sentence and inserting in 
                        lieu thereof ``the Acquisition Corps''; and
                            (II) by striking out ``major program 
                        milestone'' and inserting in lieu thereof 
                        ``phase of the program cycle''; and
                    (ii) in paragraph (2), by striking out ``of the 
                department concerned'' in the first sentence;
            (F) by striking out subsections (g) and (h) and inserting 
        in lieu thereof the following:
    ``(g) Assignments.--Subject to the authority, direction, and 
control of the Secretary, the Under Secretary shall make the 
assignments of civilian and military members of the Acquisition Corps 
to critical acquisition positions.'';
            (G) by striking out ``concerned'' in--
                    (i) the second sentence of subsection (a)(1);
                    (ii) the second sentence of subsection (a)(2);
                    (iii) the sentence following subparagraph (B) in 
                subsection (b)(1);
                    (iv) the second sentence of subsection (b)(2); and
                    (v) subsection (d)(1); and
            (H) by redesignating subsections (d), (e), (f), (g), and 
        (h) as subsections (c), (d), (e), (f), and (g), respectively.
    (5) Section 1737 of title 10, United States Code, 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 ``, or a 
                principal deputy to a director of contracting'' and all 
                that follows through ``Department of Defense'' and 
                inserting in lieu thereof ``or a principal deputy to a 
                director of contracting''; 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 and Technology 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);
            (B) in paragraph (4), by striking out ``an acquisition 
        corps'' in subparagraphs (A) and (B) and inserting in lieu 
        thereof ``the Acquisition Corps''; and
            (C) in paragraph (14), by striking out ``and the 
        performance of each military department''.
    (3) Section 1763 of such title is amended by striking out the 
second sentence.

SEC. 223. 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 2306b is amended--
                    (A) in subsection (b)(1), by striking out ``for the 
                agency or agencies under the jurisdiction of such 
                official''; and
                    (B) in subsection (j), by striking out ``instruct 
                the Secretary of the military department concerned 
                to''.
            (3) Section 2307 is amended--
                    (A) in subsection (g), by striking out ``Secretary 
                of the Navy'' each place it appears and inserting in 
                lieu thereof ``Secretary of Defense''; and
                    (B) in subsection (h)(7), by striking out the 
                second sentence.
            (4) Section 2311 is amended in subsection (a)--
                    (A) by inserting ``(1)'' after ``In General.--''; 
                and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2) The Secretary of Defense may delegate any authority of the 
Secretary under this chapter only to--
            ``(A) the Deputy Secretary of Defense, who may successively 
        delegate such authority only to the Under Secretary of Defense 
        for Acquisition and Technology;
            ``(B) the Under Secretary of Defense for Acquisition and 
        Technology; or
            ``(C) any acquisition program executive officer or 
        acquisition program manager of the Defense Research, 
        Development, and Acquisition Agency.''.
            (5) Section 2318(a) is amended by striking out ``Defense 
        Logistics Agency'' each place it appears and inserting in lieu 
        thereof ``Defense Research, Development, and Acquisition 
        Agency''.
            (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 2323(e)(1)(A)(iii) is amended by striking out 
        ``military departments, Defense Agencies,'' and inserting in 
        lieu thereof ``Department of Defense''.
            (8) Section 2324 is amended--
                    (A) in subsection (e)(3)(A), by striking out the 
                matter above clause (i) and inserting in lieu thereof 
                the following:
    ``(A) Pursuant to regulations prescribed by the Secretary of 
Defense 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--'';
                    (B) in subsection (h)(2), by striking out ``or the 
                Secretary of the military department concerned'';
                    (C) in subsection (k)(4)--
                            (i) by striking out ``or Secretary of the 
                        military department concerned'';
                            (ii) by striking out ``or Secretary 
                        determines'' and inserting in lieu thereof 
                        ``determines''; and
                            (iii) by striking out ``or military 
                        department''; and
                    (D) by striking out subsection (l) and inserting in 
                lieu thereof the following:
    ``(l) Covered Contract Defined.--(1) In this section, the term 
`covered contract' means a contract for an amount in excess of $500,000 
that is entered into by the head of an agency, except that such term 
does not include a fixed-price contract without cost incentives or any 
firm fixed-price contract for the purchase of commercial items.
            (9) Section 2326 is amended--
    ``(2) Effective on October 1 of each year that is divisible by 
five, the amount set forth in paragraph (1) shall be adjusted to the 
equivalent amount in constant fiscal year 1994 dollars. An amount, as 
so adjusted, that is not evenly divisible by $50,000 shall be rounded 
to the nearest multiple of $50,000. In the case of an amount that is 
evenly divisible by $25,000 but is not evenly divisible by $50,000, the 
amount shall be rounded to the next higher multiple of $50,000.''.
                    (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'';
                    (C) in subsection (a), by striking out ``military 
                department concerned'' and inserting in lieu thereof 
                ``Department of Defense''; and
                    (D) in subsection (b)(4), by striking out ``of that 
                agency if such'' and inserting in lieu thereof ``of the 
                Department of Defense if the''.
            (10) 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).

SEC. 224. 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 ``that military department'' 
                and inserting in lieu thereof ``the Department of 
                Defense''.
            (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 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, 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 and Technology;
            ``(B) the Under Secretary of Defense for Acquisition and 
        Technology; 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).''.
            (5) Section 2358 is amended--
                    (A) by striking out ``or the Secretary of a 
                military department'' in subsections (a) and (b);
                    (B) in subsection (a)(1), by striking out ``such 
                Secretary's department'' and inserting in lieu thereof 
                ``the Department of Defense''; and
                    (C) in subsection (c)--
                            (i) by striking out ``or the Secretary of 
                        that military department, respectively,''; and
                            (ii) by striking out ``or to such military 
                        department, respectively''.
            (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 2371 is amended--
                    (A) in subsection (a), by striking out ``and the 
                Secretary of each military department;''; and
                    (B) by striking out subsection (b);
                    (C) in subsection (f), by striking out ``There is 
                hereby established on the books of the Treasury 
                separate accounts for each of the military departments 
                and the Advanced Research Projects Agency'' and 
                inserting in lieu thereof the following: ``The 
                Secretary of the Treasury, after consultation with the 
                Secretary of Defense, shall establish on the books of 
                the Treasury one or more separate accounts for the 
                Department of Defense''; and
                    (D) in subsection (i), by striking out ``in 
                carrying out advanced research projects through the 
                Advanced Research Projects Agency, and the Secretary of 
                each military department,''.
            (8) Section 2373(a) is amended--
                    (A) by striking out ``and the Secretaries of the 
                military departments may each'' and inserting in lieu 
                thereof ``may''; and
                    (B) by striking out ``or the Secretary concerned''.

SEC. 225. MISCELLANEOUS PROCUREMENT PROVISIONS.

    (a) Chapter 141.--Chapter 141 of title 10, United States Code, is 
amended as follows:
            (1) Section 2381(b) is amended--
                    (A) in the matter above paragraph (1), by striking 
                out ``the Secretary concerned'' and inserting in lieu 
                thereof ``the Secretary of Defense''; and
                    (B) 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 ``and the 
        Secretary of a military department may each'' and inserting in 
        lieu thereof ``may''.
            (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 2104a is amended by striking out ``or the 
        Secretary of a military department''.
            (10) 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 
Technology.''; and
                    (E) in subsection (h), by striking out paragraph 
                (3).
            (11) Section 2405(a) is amended by striking out ``The 
        Secretary of a military department'' and inserting in lieu 
        thereof ``The Secretary of Defense.''
            (12) Section 2410c(a) of title 10, United States Code, is 
        amended by striking out ``Secretary of a military department or 
        the head of a Defense Agency, as the case may be,'' and 
        inserting in lieu thereof ``Secretary of Defense''.
            (13) Section 2410d(a) is amended by striking out ``a 
        military department or a Defense Agency'' and inserting in lieu 
        thereof ``the Department of Defense''.
            (14) Section 2410g(b) is amended by striking out 
        ``notification--'' and all that follows through ``any other 
        Department of Defense contract, to'' and insert in lieu thereof 
        ``notification to''.
    (b) Chapter 142.--Chapter 142 of title 10, United States Code, is 
amended as follows:
            (1) 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 and Technology''.
            (2) Section 2417 is amended by striking out ``Director of 
        the Defense Logistics Agency'' and inserting in lieu thereof 
        ``Under Secretary of Defense for Acquisition and Technology''.

SEC. 226. MAJOR DEFENSE ACQUISITION PROGRAMS.

    Chapter 144 of title 10, United States Code, is amended as follows:
            (1) Section 2432(c)(3)(A) is amended by striking out ``The 
        Secretary of Defense'' and all that follows.
            (2) 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 and Technology'';
                    (B) in subsection (c), by striking out ``such 
                service acquisition executive'' in the matter following 
                paragraph (3) and inserting in lieu thereof ``the Under 
                Secretary of Defense for Acquisition and Technology'';
                    (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 Technology''; 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 and Technology'';
                            (ii) in paragraph (1)(B), by striking out 
                        ``Secretary'' both places it appears 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''.
            (3) Section 2434(b)(1)(A) is amended by striking out 
        ``under the supervision,'' and all that follows and inserting 
        in lieu thereof ``in the Department of Defense.''.
            (4) Section 2435 is amended--
                    (A) in subsection (a)(1), by striking out 
                ``Secretary of a military department'' and inserting in 
                lieu thereof ``Under Secretary of Defense for 
                Acquisition and Technology''; and
                    (B) in subsection (d)(2), by striking out ``the 
                Secretary of the military department concerned and''.

SEC. 227. 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 
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) The following sections are amended by striking out 
        ``Secretary of the Navy'' and inserting in lieu thereof 
        ``Secretary of Defense'': sections 7212(a), 7229, 7299a (each 
        place it appears), 7309(c), 7310(b) (both places it appears), 
        7311(a) (in the matter before paragraph (1)), 7311(b) (in the 
        matter before paragraph (1)), 7314, and 7361 (each place it 
        appears).
            (2) Section 7314(1)(B) is amended by striking out ``Navy 
        supply system'' each place it appears and inserting in lieu 
        thereof ``Department of Defense supply system''.
            (3) 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 as 
follows:
            (1) Sections 9511(10) and 9540(a) are amended by striking 
        out ``Secretary of the Air Force'' and inserting in lieu 
        thereof ``Secretary of Defense''.
            (2) Section 9513(a) is amended--
                    (A) in paragraph (1), by striking out ``Secretary 
                of the Air Force--'' and all that follows and inserting 
                in lieu thereof the following: ``Secretary, in 
                consultation with the Secretary of the military 
                department concerned, may, by contract entered into 
                with a contractor, authorize such contractor to use one 
                or more Department of Defense installations designated 
                by the Secretary of Defense.''; and
                    (B) in paragraph (2), by striking out ``of the Air 
                Force''.

SEC. 228. 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 201(a)), and section 232 
of such title (as added by section 201(b)).

                       Subtitle D--Effective Date

SEC. 231. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
on the date that is one year after the date of the enactment of this 
Act.

                   TITLE III--DEPOT-LEVEL MAINTENANCE

SEC. 301. ELIMINATION OF 60/40 RULE FOR PUBLIC/PRIVATE DIVISION OF 
              DEPOT-LEVEL MAINTENANCE WORKLOAD.

    (a) Elimination of Rule.--Section 2466 of title 10, United States 
Code, is amended--
            (1) by striking out subsections (a), (c), (d), and (e); and
            (2) by striking out ``(b) Prohibition on Management by End 
        Strength.--''.
    (b) Conforming Amendments.--(1) The heading of such section is 
amended to read as follows:
``Sec. 2466. Civilian employees involved in depot-level maintenance and 
              repair of materiel: prohibition on management by end 
              strength''.
    (2) The item relating to such section in the table of sections at 
the beginning of chapter 146 of such title is amended to read as 
follows:

``2466. Civilian employees involved in depot-level maintenance and 
                            repair of materiel: prohibition on 
                            management by end strength.''.

SEC. 302. PRESERVATION OF CORE MAINTENANCE AND REPAIR CAPABILITY.

    (a) In General.--(1) Chapter 146 of title 10, United States Code, 
is amended by adding at the end the following new section:
``Sec. 2472. Core maintenance and repair capability: preservation
    ``(a) Necessity for Core Maintenance and Repair Capabilities.--It 
is essential for the national defense that the Department of Defense 
preserve an organic maintenance and repair capability (including 
personnel, equipment, and facilities) to meet readiness and 
sustainability requirements established by the Chairman of the Joint 
Chiefs of Staff for the systems and equipment required for contingency 
plans approved by the Chairman of the Joint Chiefs of Staff under 
section 153(a)(3) of this title.
    ``(b) Identification of Core Maintenance and Repair Capabilities.--
The Secretary of Defense shall identify those maintenance and repair 
activities of the Department of Defense that are necessary to preserve 
the maintenance and repair capability described in subsection (a). The 
Secretary may identify for such purpose only those activities of the 
Department of Defense that are necessary to ensure a ready and 
controlled source of technical competence for that purpose. The 
Secretary may not identify for such purpose any intermediate-level or 
depot-level maintenance or repair activity.
    ``(c) Limitation on Contracting.--The Secretary may not contract 
for the performance by non-Government personnel of a maintenance 
activity identified by the Secretary under subsection (b) under the 
procedures and requirements of Office of Management and Budget Circular 
A-76 or any successor administrative regulation or policy unless the 
Secretary of Defense determines (under regulations prescribed by the 
Secretary) that Government performance of the activity is no longer 
required for national defense reasons.
    ``(d) Contracting for Performance of Non-Core Functions.--In the 
case of any maintenance or repair activity (including the making of 
major modifications and upgrades) that is not identified by the 
Secretary under subsection (b), the Secretary concerned shall provide 
for the performance of that activity by an entity in the private 
sector, selected through the use of competitive procedures, unless the 
Secretary determines that the performance of that activity by a 
Government entity is necessary to maintain the defense industrial 
base.''.
    (2) The table of sections at the beginning of such chapter is 
amended by adding at the end the following new item:

``2472. Core maintenance and repair capability: preservation.''.
    (b) Revision of Regulations.--The Secretary of Defense shall revise 
the existing Department of Defense regulations relating to depot level 
maintenance and repair activities in order to ensure the consistency of 
those regulations with the policy provided in section 2472(d) of title 
10, United States Code, as added by subsection (a).

SEC. 303. PERFORMANCE OF DEPOT-LEVEL MAINTENANCE WORKLOAD BY PRIVATE 
              SECTOR WHENEVER POSSIBLE.

    (a) Requirement.--Section 2469 of title 10, United States Code, is 
amended to read as follows:
``Sec. 2469. Depot-level maintenance and repair activities: use of 
              private sector
    ``(a) In General.--The Secretary of Defense shall (except as 
provided in subsection (b)) provide for the performance by private 
sector entities of all depot-level maintenance and all depot-level 
repair work of the Department of Defense.
    ``(b) Exception.--The Secretary may provide for the performance of 
a particular depot-level maintenance workload, or a particular depot-
level repair workload, by an entity of the Department of Defense if--
            ``(1) no responsive bids for performance of that workload 
        are received from responsible offerors; or
            ``(2) the Secretary makes a determination that subsection 
        (a) must be waived for that particular workload for reasons of 
        national security.''.
    (b) Clerical Amendment.--The item relating to section 2469 in the 
table of sections at the beginning of chapter 146 of such title is 
amended to read as follows:

``2469. Depot-level maintenance and repair activities: use of private 
                            sector.''.
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