[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 454 Engrossed Amendment House (EAH)]

                In the House of Representatives, U. S.,

                                                          May 13, 2009.
    Resolved, That the bill from the Senate (S. 454) entitled ``An Act 
to improve the organization and procedures of the Department of Defense 
for the acquisition of major weapon systems, and for other purposes.'', 
do pass with the following

                               AMENDMENT:

            Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Weapons 
Acquisition System Reform Through Enhancing Technical Knowledge and 
Oversight Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                   TITLE I--ACQUISITION ORGANIZATION

Sec. 101. Independent performance of acquisition oversight functions.
Sec. 102. Oversight of cost estimation.
Sec. 103. Oversight of systems engineering.
Sec. 104. Oversight of performance assessment.
Sec. 105. Assessment of technological maturity of critical technologies 
                            of major defense acquisition programs by 
                            the Director of Defense Research and 
                            Engineering.
Sec. 106. Role of the commanders of the combatant commands in 
                            identifying joint military requirements.

                      TITLE II--ACQUISITION POLICY

Sec. 201. Acquisition strategies ensuring competition throughout the 
                            lifecycle of major defense acquisition 
                            programs.
Sec. 202. Additional requirements for certain major defense acquisition 
                            programs.
Sec. 203. Requirement for certification of major systems prior to 
                            Milestone B.
Sec. 204. Critical cost growth in major defense acquisition programs.
Sec. 205. Organizational conflicts of interest in the acquisition of 
                            major weapon systems.
Sec. 206. Awards for Department of Defense personnel for excellence in 
                            the acquisition of products and services.
Sec. 207. Consideration of trade-offs among cost, schedule, and 
                            performance in the acquisition of major 
                            weapon systems.

                   TITLE I--ACQUISITION ORGANIZATION

SEC. 101. INDEPENDENT PERFORMANCE OF ACQUISITION OVERSIGHT FUNCTIONS.

    (a) In General.--Chapter 4 of title 10, United States Code, is 
amended by adding at the end the following new section:
``Sec. 145. Principal advisors for acquisition oversight functions
    ``(a) Assignment of Acquisition Oversight Functions.--The Secretary 
of Defense shall designate an official within the Office of the 
Secretary of Defense as the principal advisor to the Secretary for each 
acquisition oversight function specified in subsection (c). An official 
may be designated to perform one or more of such functions. The 
performance of duties pursuant to a designation under this section 
shall not limit or otherwise affect the performance of any other duties 
assigned to such official by the Secretary or by other officers of the 
Department responsible for the management and direction of such 
official except as necessary to satisfy the requirements of subsection 
(b).
    ``(b) Qualifications.--In designating an official for a function 
pursuant to subsection (a), the Secretary shall ensure that the 
official reports directly to the Secretary in the performance of such 
function and is--
            ``(1) highly expert in matters relating to the function;
            ``(2) assigned the appropriate staff and resources 
        necessary to carry out the function;
            ``(3) independent from those engaged in the execution of 
        acquisition programs;
            ``(4) free of any undue political influence; and
            ``(5) free of any personal conflict of interest.
    ``(c) Acquisition Oversight Functions.--(1) The acquisition 
oversight functions to be performed by officials designated pursuant to 
subsection (a) are as follows:
            ``(A) Cost estimation.
            ``(B) Systems engineering.
            ``(C) Performance assessment.
            ``(D) Such other acquisition functions as the Secretary 
        considers appropriate.
    ``(2) Each acquisition oversight function specified in paragraph 
(1) shall cover all phases of an acquisition program, including setting 
of requirements, formulation and execution of budgets, and program 
execution.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following new item:

``145. Principal advisors for acquisition oversight functions.''.

SEC. 102. OVERSIGHT OF COST ESTIMATION.

    (a) In General.--Chapter 137 of title 10, United States Code, is 
amended by adding at the end the following new section:
``Sec. 2334. Acquisition oversight: oversight of cost estimation
    ``(a) Issuance of Policies, Procedures, Guidance, and Cost 
Estimates.--The official assigned oversight of cost estimation pursuant 
to section 145 of this title shall issue the following:
            ``(1) Policies and procedures governing the conduct of cost 
        estimation and cost analysis generally for the acquisition 
        programs of the Department of Defense.
            ``(2) Guidance relating to cost estimates and cost analyses 
        conducted in connection with major defense acquisition programs 
        under chapter 144 of this title or major automated information 
        system programs under chapter 144A of this title.
            ``(3) Guidance relating to the proper selection of 
        confidence levels for cost estimates generally, and 
        specifically, for the proper selection of confidence levels for 
        cost estimates for major defense acquisition programs under 
        chapter 144 of this title or major automated information system 
        program under chapter 144A of this title.
            ``(4) Guidance relating to full consideration of life-cycle 
        management and sustainability costs of major defense 
        acquisition programs under chapter 144 of this title or major 
        automated information system programs under chapter 144A of 
        this title.
            ``(5) Independent cost estimates and cost analyses for 
        major defense acquisition programs and major automated 
        information system programs for which the Under Secretary of 
        Defense for Acquisition, Technology, and Logistics is the 
        Milestone Decision Authority--
                    ``(A) in advance of--
                            ``(i) any certification under section 2366a 
                        or 2366b of title 10, United States Code;
                            ``(ii) any decision to enter into low-rate 
                        initial production or full-rate production;
                            ``(iii) any certification under section 
                        2433(e)(2) of this title; and
                            ``(iv) any report under section 2445c(f) of 
                        this title; and
                    ``(B) at any other time considered necessary by 
                such official or upon the request of the Under 
                Secretary of Defense for Acquisition, Technology, and 
                Logistics.
    ``(b) Review of Cost Estimates, Cost Analyses, Cost Indexes, and 
Records of the Military Departments.--The Secretary of Defense shall 
ensure that the official designated for oversight of cost estimation 
pursuant to section 145 of this title--
            ``(1) promptly receives the results of all cost estimates 
        and cost analyses conducted by the military departments, and 
        all studies conducted by the military departments in connection 
        with such cost estimates and cost analyses, for major defense 
        acquisition programs and major automated information systems of 
        the military departments, and is authorized to comment on such 
        estimates, analyses, and studies; and
            ``(2) has timely access to any records and data in the 
        Department of Defense (including the records and data of each 
        military department and including classified and proprietary 
        information as appropriate) that the official considers 
        necessary to review in order to carry out any duties under this 
        section.
    ``(c) Participation, Concurrence, and Approval in Cost 
Estimation.--The Secretary of Defense shall ensure that the official 
designated for oversight of cost estimation pursuant to section 145 of 
this title is involved in all discussions relating to cost estimation 
and the estimation of resource levels required for major defense 
acquisition programs and major automated information systems of the 
Department of Defense generally at all stages of such programs and 
may--
            ``(1) participate in the formulation of study guidance for 
        analyses of alternatives for major defense acquisition 
        programs;
            ``(2) participate in discussion of resources associated 
        with requirements;
            ``(3) participate in the discussion of any discrepancies 
        between an independent cost estimate and the cost estimate of a 
        military department for a major defense acquisition program or 
        major automated information system of the Department of 
        Defense;
            ``(4) approve or disapprove, at such official's sole 
        discretion, the confidence level used in establishing a 
        baseline description or budget estimate for a major defense 
        acquisition program or major automated information system of 
        the Department of Defense at any of the events specified in 
        paragraph (5) of subsection (a) of this section;
            ``(5) concur in the choice of a baseline description or 
        budget estimate for use at any of the events specified in 
        paragraph (5) of subsection (a) of this section; and
            ``(6) participate in consideration of any decision to 
        request authorization of a multiyear procurement contract for a 
        major defense acquisition program.
    ``(d) Disclosure of Confidence Levels for Baseline Estimates of 
Major Defense Acquisition Programs.--The official designated to perform 
oversight of cost estimation pursuant to section 145 of this title, in 
approving a confidence level for use in a major defense acquisition 
program pursuant to subsection (c)(4), shall--
            ``(1) disclose the confidence level used in establishing a 
        baseline estimate for the major defense acquisition program, 
        the rationale for selecting such confidence level, and, if such 
        confidence level is less than 80 percent, the justification for 
        selecting a confidence level of less than 80 percent; and
            ``(2) include the disclosure required by paragraph (1) in 
        any decision documentation approving a baseline estimate for 
        the major defense acquisition program, in the next Selected 
        Acquisition Report pursuant to section 2432 of this title for 
        the major defense acquisition program, and in the next annual 
        report submitted under subsection (f).
    ``(e) Relationship to Cost Analysis Improvement Group.--The 
official designated to perform oversight of cost estimation pursuant to 
section 145 of this title shall be assigned responsibility for the 
management and oversight of the Cost Analysis Improvement Group of the 
Department of Defense.
    ``(f) Annual Report.--Not later than March 1 of each year, 
beginning on March 1, 2010, the official designated to perform 
oversight of cost estimation pursuant to section 145 of this title 
shall submit to the congressional defense committees a report on the 
activities undertaken pursuant to this section during the preceding 
year. The report shall be in an unclassified form but may include a 
classified annex.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following new item:

``2334. Acquisition oversight: oversight of cost estimation.''.

SEC. 103. OVERSIGHT OF SYSTEMS ENGINEERING.

    (a) In General.--Chapter 137 of title 10, United States Code, as 
amended by section 102, is further amended by adding at the end the 
following new section:
``Sec. 2334a. Acquisition oversight: oversight of systems engineering
    ``(a) Issuance of Policies, Procedures, and Guidance.--The official 
designated to perform oversight of systems engineering pursuant to 
section 145 of this title shall--
            ``(1) issue policies, procedures, and guidance for all 
        elements of the Department of Defense concerning--
                    ``(A) the use of systems engineering principles and 
                best practices, generally;
                    ``(B) the use of systems engineering approaches to 
                enhance reliability, availability, and maintainability 
                on major defense acquisition programs;
                    ``(C) the development of systems engineering master 
                plans for major defense acquisition programs, including 
                systems engineering considerations in support of life-
                cycle management and sustainability;
                    ``(D) the inclusion of provisions relating to 
                systems engineering and reliability growth in requests 
                for proposals;
                    ``(E) the appropriate use of development planning 
                to reduce the time from system development to 
                deployment, to reduce development risk and cost growth, 
                and to provide future benchmarks against which to trade 
                requirements, cost, and schedule;
                    ``(F) developmental test and evaluation generally;
                    ``(G) in coordination with the Director of 
                Operational Test and Evaluation, the integration of 
                developmental test and evaluation with operational test 
                and evaluation;
                    ``(H) in coordination with the Director of 
                Operational Test and Evaluation, the development of 
                test and evaluation master plans for major defense 
                acquisition programs; and
                    ``(I) the use of developmental test and evaluation 
                as part of a coordinated systems engineering approach 
                to system development; and
            ``(2) provide advocacy, oversight, and direction to 
        elements of the acquisition workforce responsible for functions 
        relating to systems engineering, developmental test and 
        evaluation, and life-cycle management and sustainability.
    ``(b) Participation in Requirements Discussions.--The official 
designated to perform oversight of systems engineering pursuant to 
section 145 of this title shall provide input on the inclusion of 
systems engineering requirements in the process for consideration of 
joint military requirements by the Joint Requirements Oversight Council 
pursuant to section 181 of title 10, United States Code, including 
specific input relating to each capabilities development document.
    ``(c) Access to Records of the Military Departments.--The official 
designated to perform oversight of systems engineering pursuant to 
section 145 of this title shall have access to any records or data of 
the Department of Defense (including the records and data of each 
military department and including classified and proprietary 
information as appropriate) that the official considers necessary to 
review in order to carry out any duties under this section.
    ``(d) Assessment of Military Department Capabilities for Systems 
Engineering and Developmental Test and Evaluation.--The official 
designated to perform oversight of systems engineering pursuant to 
section 145 of this title shall--
            ``(1) periodically assess the capabilities of the military 
        departments for systems engineering (including development 
        planning) and developmental test and evaluation;
            ``(2) provide such assessment, along with such 
        recommendations for improvement as the official considers 
        necessary, to the Secretary of Defense and the Under Secretary 
        of Defense for Acquisition, Technology, and Logistics; and
            ``(3) include such assessment and recommendations in the 
        annual report required by subsection (g).
    ``(e) Review and Approval of Plans for Major Defense Acquisition 
Programs.--The official designated to perform oversight of systems 
engineering pursuant to section 145 of this title shall review and 
approve the following plans with respect to any major defense 
acquisition program:
            ``(1) The systems engineering master plan.
            ``(2) The developmental test and evaluation plan within the 
        test and evaluation master plan.
    ``(f) Reporting Through Under Secretary.--The official designated 
to perform oversight of systems engineering pursuant to section 145 of 
this title shall report to the Secretary of Defense through the Under 
Secretary of Defense for Acquisition, Technology, and Logistics.
    ``(g) Annual Report.--Not later than March 1 of each year, 
beginning on March 1, 2010, the official designated to perform 
oversight of systems engineering pursuant to section 145 of this title 
shall submit to the congressional defense committees a report on the 
activities undertaken pursuant to this section during the preceding 
year. The report shall be in unclassified form but may include a 
classified annex.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter, as amended by section 102, is further amended by adding 
at the end the following new item:

``2334a. Acquisition oversight: oversight of systems engineering.''.

SEC. 104. OVERSIGHT OF PERFORMANCE ASSESSMENT.

    (a) In General.--Chapter 137 of title 10, United States Code, as 
amended by section 103, is further amended by adding at the end the 
following new section:
``Sec. 2334b. Acquisition oversight: oversight of performance 
              assessment
    ``(a) Issuance of Policies, Procedures, and Guidance for 
Performance Assessments.--The official designated to perform oversight 
of performance assessment pursuant to section 145 of this title shall 
be responsible for the issuance of policies, procedures, and guidance 
governing the conduct of performance assessments for the acquisition 
programs of the Department of Defense, including assessment of the 
extent to which acquisition programs--
            ``(1) deliver sufficient capability to the warfighter;
            ``(2) achieve timely delivery of such capability; and
            ``(3) deliver a level of value consistent with resources 
        expended.
    ``(b) Assessment of Baseline Quality.--The official designated to 
perform oversight of performance assessment pursuant to section 145 of 
this title shall periodically assess the suitability of the baseline 
descriptions required by section 2435 of title 10, United States Code, 
of major defense acquisition programs for providing a basis for 
performance assessment and make such recommendations to the Secretary 
of Defense and the Under Secretary of Defense for Acquisition, 
Technology, and Logistics as the official considers necessary to 
improve the suitability of baseline descriptions for such purpose.
    ``(c) Earned Value Management System.--The official designated to 
perform oversight of performance assessment pursuant to section 145 of 
this title shall be responsible for the management and oversight of the 
records of the earned value management system of the Department of 
Defense.
    ``(d) Participation in Certain Program Reviews.--The official 
designated to perform oversight of performance assessment pursuant to 
section 145 of this title is authorized to present an assessment of the 
performance of a major defense acquisition program during--
            ``(1) any discussions prior to certification under section 
        2433(e)(2) of this title;
            ``(2) any discussions prior to entry into full-rate 
        production; and
            ``(3) consideration of any decision to request 
        authorization of a multiyear procurement contract for a major 
        defense acquisition program.
    ``(e) Annual Report.--Not later than March 1 of each year, 
beginning on March 1, 2010, the official designated to perform 
oversight of performance assessment pursuant to section 145 of this 
title shall submit to the congressional defense committees a report on 
the activities undertaken pursuant to this section during the preceding 
year. The report shall be in unclassified form but may include a 
classified annex.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter, as amended by section 103, is further amended by adding 
at the end the following new item:

``2334b. Acquisition oversight: oversight of performance assessment.''.

SEC. 105. ASSESSMENT OF TECHNOLOGICAL MATURITY OF CRITICAL TECHNOLOGIES 
              OF MAJOR DEFENSE ACQUISITION PROGRAMS BY THE DIRECTOR OF 
              DEFENSE RESEARCH AND ENGINEERING.

    (a) Assessment by Director of Defense Research and Engineering.--
            (1) In general.--Section 139a of title 10, United States 
        Code, is amended by adding at the end the following new 
        subsection:
    ``(c)(1) The Director of Defense Research and Engineering shall 
periodically review and assess the technological maturity and 
integration risk of critical technologies of the major defense 
acquisition programs of the Department of Defense and report on the 
findings of such reviews and assessments to the Under Secretary of 
Defense for Acquisition, Technology, and Logistics.
    ``(2) The Director shall submit to the Secretary of Defense and to 
the congressional defense committees by January 1 of each year a report 
on the technological maturity and integration risk of critical 
technologies of the major defense acquisition programs of the 
Department of Defense.''.
            (2) First annual report.--The first annual report under 
        subsection (c)(2) of section 139a of title 10, United States 
        Code (as added by paragraph (1)), shall be submitted to the 
        congressional defense committees not later than March 1, 2011, 
        and shall address the results of reviews and assessments 
        conducted by the Director of Defense Research and Engineering 
        pursuant to subsection (c)(1) of such section (as so added) 
        during the preceding calendar year.
    (b) Report on Resources for Implementation.--Not later than 120 
days after the date of the enactment of this Act, the Director of 
Defense Research and Engineering shall submit to the congressional 
defense committees a report describing any additional resources that 
may be required by the Director, and by other research and engineering 
elements of the Department of Defense, to carry out the following:
            (1) The requirements under the amendment made by subsection 
        (a)(1).
            (2) The technological maturity assessments required by 
        section 2366b(a) of title 10, United States Code.
            (3) The requirements of Department of Defense Instruction 
        5000, as revised.

SEC. 106. ROLE OF THE COMMANDERS OF THE COMBATANT COMMANDS IN 
              IDENTIFYING JOINT MILITARY REQUIREMENTS.

    (a) In General.--Section 181(d) of title 10, United States Code, is 
amended--
            (1) by inserting ``(1)'' before ``The Under Secretary''; 
        and
            (2) by adding at the end the following new paragraph:
    ``(2) The Council shall seek and consider input from the commanders 
of the combatant commands in carrying out its mission under paragraphs 
(1) and (2) of subsection (b) and in conducting periodic reviews in 
accordance with the requirements of subsection (e). Such input may 
include, but is not limited to, an assessment of the following:
            ``(A) Any current or projected missions or threats in the 
        theater of operations of the commander of a combatant command 
        that would inform the assessment of a new joint military 
        requirement.
            ``(B) The necessity and sufficiency of a proposed joint 
        military requirement in terms of current and projected missions 
        or threats.
            ``(C) The relative priority of a proposed joint military 
        requirement in comparison with other joint military 
        requirements within the theater of operations of a commander of 
        a combatant command.
            ``(D) The ability of partner nations in the theater of 
        operations of the commander of a combatant command to assist in 
        meeting the joint military requirement or the benefit, if any, 
        of a partner nation assisting in development or use of 
        technologies developed to meet the joint military 
        requirement.''.
    (b) Comptroller General of the United States Review of 
Implementation.--Not later than two years after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit to the Committees on Armed Services of the Senate and the 
House of Representatives a report on the implementation of the 
requirements of (1) subsection (d)(2) of section 181 of title 10, 
United States Code (as amended by subsection (a)), for the Joint 
Requirements Oversight Council to solicit and consider input from the 
commanders of the combatant commands, and (2) subsection (b) of section 
181 of title 10, United States Code (as amended by section 942 of the 
National Defense Authorization Act for Fiscal Year 2008 (Public Law 
110-181; 122 Stat. 287)). The report shall include, at a minimum, an 
assessment of the extent to which the Council has effectively sought, 
and the commanders of the combatant commands have provided, meaningful 
input on proposed joint military requirements.

                      TITLE II--ACQUISITION POLICY

SEC. 201. ACQUISITION STRATEGIES ENSURING COMPETITION THROUGHOUT THE 
              LIFECYCLE OF MAJOR DEFENSE ACQUISITION PROGRAMS.

     (a) Acquisition Strategy Ensuring Competition.--The Secretary of 
Defense shall ensure that the acquisition strategy for each major 
defense acquisition program includes--
            (1) measures to ensure competition, or the option of 
        competition, at both the prime contract level and the 
        subcontract level (at such tier or tiers as are appropriate) of 
        such program throughout the life-cycle of such program as a 
        means to improve contractor performance; and
            (2) adequate documentation of the rationale for the 
        selection of the subcontract tier or tiers under paragraph (1).
    (b) Measures To Ensure Competition.--The measures to ensure 
competition, or the option of competition, for purposes of subsection 
(a) may include measures to achieve the following, in appropriate cases 
if such measures are cost-effective:
            (1) Competitive prototyping.
            (2) Dual-sourcing.
            (3) Unbundling of contracts.
            (4) Funding of a second source for interchangeable, next-
        generation prototype systems or subsystems.
            (5) Use of modular, open architectures to enable 
        competition for upgrades.
            (6) Use of build-to-print approaches to enable production 
        through multiple sources.
            (7) Acquisition of complete technical data packages.
            (8) Periodic competitions for subsystem upgrades.
            (9) Licensing of additional suppliers.
            (10) Periodic system or program reviews to address long-
        term competitive effects of program decisions.
    (c) Consideration of Competition Throughout Operation and 
Sustainment of Major Defense Acquisition Programs.--In carrying out 
this section, the Secretary of Defense shall ensure that, with respect 
to maintenance of a major defense acquisition program, consideration is 
given to capabilities within the Department of Defense to perform 
maintenance functions.

SEC. 202. ADDITIONAL REQUIREMENTS FOR CERTAIN MAJOR DEFENSE ACQUISITION 
              PROGRAMS.

    (a) Additional Requirements Relating to Milestone B Approval.--
Section 2366b of title 10, United States Code, is amended--
            (1) in subsection (d)--
                    (A) by inserting ``(1)'' before ``The milestone 
                decision authority may''; and
                    (B) by striking the second sentence and inserting 
                the following:
    ``(2) Whenever the milestone decision authority makes such a 
determination and authorizes such a waiver--
            ``(A) the waiver, the determination, and the reasons for 
        the determination shall be submitted in writing to the 
        congressional defense committees within 30 days after the 
        waiver is authorized; and
            ``(B) the milestone decision authority shall review the 
        program not less often than annually to determine the extent to 
        which such program currently satisfies the certification 
        components specified in paragraphs (1) and (2) of subsection 
        (a) until such time as the milestone decision authority 
        determines that the program satisfies all such certification 
        components.'';
            (2) by redesignating subsections (e) and (f) as subsections 
        (f) and (g), respectively, and inserting after subsection (d) 
        the following new subsection (e):
    ``(e) Designation of Certification Status in Budget 
Documentation.--Any budget request, budget justification material, 
budget display, reprogramming request, Selected Acquisition Report, or 
other budget documentation or performance report submitted by the 
Secretary of Defense to the President regarding a major defense 
acquisition program receiving a waiver pursuant to subsection (d) shall 
prominently and clearly indicate that such program has not fully 
satisfied the certification requirements of this section until such 
time as the milestone decision authority makes the determination that 
such program has satisfied all certification components pursuant to 
subsection (d)(2)(B).'';
            (3) in subsection (a)--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (2) as paragraph 
                (3);
                    (C) by inserting after paragraph (1) the following 
                new paragraph (2):
            ``(2) has received a preliminary design review and 
        conducted a formal post-preliminary design review assessment, 
        and certifies on the basis of such assessment that the program 
        demonstrates a high likelihood of accomplishing its intended 
        mission or that no preliminary design review is necessary for 
        such program to demonstrate a high likelihood of accomplishing 
        its intended mission; and''; and
                    (D) in paragraph (3), as redesignated by 
                subparagraph (B) of this paragraph--
                            (i) in subparagraph (D), by striking the 
                        semicolon and inserting ``, as determined by 
                        the Milestone Decision Authority on the basis 
                        of an independent review and assessment by the 
                        Director of Defense Research and Engineering; 
                        and'';
                            (ii) by striking subparagraph (E); and
                            (iii) by redesignating subparagraph (F) as 
                        subparagraph (E).
    (b) Certification and Review of Programs Entering Development Prior 
to Enactment of Section 2366b of Title 10.--
            (1) Determination.--(A) Except as provided in subparagraph 
        (B), beginning not later than 270 days after the date of the 
        enactment of this Act, for each major defense acquisition 
        program that has not received a Milestone C approval, or Key 
        Decision Point C approval in the case of a space program, the 
        Milestone Decision Authority shall determine whether or not the 
        program satisfies the certification components specified in 
        paragraphs (1) and (2) of subsection (a) of section 2366b of 
        title 10, United States Code.
            (B) Subparagraph (A) shall not apply to a major defense 
        acquisition program that has been reviewed pursuant to section 
        2366b of title 10, United States Code, prior to the date that 
        is 270 days after the date of the enactment of this Act, or a 
        major defense acquisition program that has not yet received 
        Milestone B approval.
            (2) Annual review.--The Milestone Decision Authority shall 
        review any program determined pursuant to paragraph (1) not to 
        satisfy the certification components of subsection (a) of 
        section 2366b of title 10, United States Code, not less often 
        than annually thereafter to determine the extent to which such 
        program currently satisfies the certification components 
        specified in paragraphs (1) and (2) of subsection (a) of such 
        section until such time as the Milestone Decision Authority 
        determines that the program satisfies all such certification 
        components.
            (3) Designation of certification status in budget 
        documentation.--Any budget request, budget justification 
        material, budget display, reprogramming request, Selected 
        Acquisition Report, or other budget documentation or 
        performance report submitted by the Secretary of Defense to the 
        President regarding a major defense acquisition program which 
        the Milestone Decision Authority determines under paragraph (1) 
        does not satisfy the certification components specified in 
        paragraphs (1) and (2) of subsection (a) of section 2366b of 
        title 10, United States Code, shall prominently and clearly 
        indicate that such program has not fully satisfied such 
        certification components until such time as the Milestone 
        Decision Authority makes the determination that such program 
        has satisfied all certification components pursuant to 
        paragraph (2).
    (c) Reviews of Programs Restructured After Experiencing Critical 
Cost Growth.--The official designated to perform oversight of 
performance assessment pursuant to section 145 of title 10, United 
States Code, as added by this Act, shall annually review each major 
defense acquisition program that has been considered pursuant to 
paragraph (2) of section 2433(e) of title 10, United States Code, and 
which has been certified as necessary to continue pursuant to such 
paragraph, to assess the success of the program in achieving adequate 
program performance after the completion of such consideration. The 
results of reviews performed pursuant to this subsection shall be 
included in the next annual report of such official.

SEC. 203. REQUIREMENT FOR CERTIFICATION OF MAJOR SYSTEMS PRIOR TO 
              MILESTONE B.

    (a) Certification.--Except as provided in subsection (b), beginning 
not later than 270 days after the date of the enactment of this Act, 
for each major defense acquisition program that has not received 
Milestone B approval, or Key Decision Point B approval in the case of a 
space program, the Milestone Decision Authority shall certify, after 
consultation with the Joint Requirements Oversight Council on matters 
relating to program requirements and military needs--
            (1) that the program fulfills an approved initial 
        capabilities document;
            (2) that the program is being executed by an entity with a 
        relevant core competency as identified by the Secretary of 
        Defense under section 118b of title 10, United States Code;
            (3) if the program duplicates a capability already provided 
        by an existing program, the duplication provided by such 
        program is necessary and appropriate;
            (4) that a cost estimate for such program has been 
        submitted to the Milestone Decision Authority and that the 
        concurrence of the official designated to perform oversight of 
        cost estimation pursuant to section 145 of title 10, United 
        States Code, has been obtained regarding the choice of a cost 
        estimate; and
            (5) that a schedule identifying the time and major 
        activities required to reach Milestone B approval, or Key 
        Decision Point B approval in the case of a space program, has 
        been submitted to the Milestone Decision Authority.
    (b) Exception.--Subsection (a) shall not apply to a major defense 
acquisition program that has received a certification as required by 
section 2366a, title 10, United States Code.
    (c) Reports.--
            (1) Relating to cost growth or schedule delay of programs 
        certified under subsection (a).--With respect to a major 
        defense acquisition program certified by the Milestone Decision 
        Authority under subsection (a), the Milestone Decision 
        Authority shall submit to the congressional defense committees 
        a report in accordance with this subsection if, prior to 
        Milestone B approval--
                    (A) the projected cost of the program exceeds the 
                cost estimate for the program submitted to the 
                Milestone Decision Authority in accordance with 
                subsection (a)(4) by more than 25 percent; or
                    (B) the schedule submitted to the Milestone 
                Decision Authority in accordance with subsection (a)(5) 
                is delayed by more than 25 percent.
            (2) Relating to cost growth of programs certified under 
        section 2366a.--With respect to a major defense acquisition 
        program certified by the Milestone Decision Authority under 
        section 2366a of title 10, United States Code, the Milestone 
        Decision Authority shall submit to the congressional defense 
        committees a report in accordance with this subsection if the 
        program manager submits a notification to the Milestone 
        Decision Authority pursuant to section 2366a(b).
            (3) Matters covered.--Any report submitted pursuant to 
        paragraph (1) or (2) shall--
                    (A) identify the root causes of the cost or 
                schedule growth;
                    (B) identify appropriate acquisition performance 
                measures for the remainder of the program; and
                    (C) include one of the following:
                            (i) A written certification (with a 
                        supporting explanation) stating that--
                                    (I) such program is essential to 
                                national security;
                                    (II) there are no alternatives to 
                                such program that will provide 
                                acceptable military capability at less 
                                cost;
                                    (III) new estimates of the cost or 
                                schedule, as appropriate, are 
                                reasonable; and
                                    (IV) the management structure for 
                                the program is adequate to manage and 
                                control program cost and schedule.
                            (ii) A plan for terminating the development 
                        of the program or withdrawal of Milestone A 
                        approval (or Key Decision Point A approval in 
                        the case of a space program) if the Milestone 
                        Decision Authority determines that such action 
                        is in the interest of national defense.
            (4) Time of submission.--A report required by this 
        subsection shall be submitted--
                    (A) in the case of a report required by paragraph 
                (1), not later than 30 days after the Milestone 
                Decision Authority determines the cost growth or 
                schedule delay described in that paragraph; and
                    (B) in the case of a report required by paragraph 
                (2), not later than 30 days after the Milestone 
                Decision Authority receives the notification from the 
                program manager described in that paragraph.
    (d) Definitions.--In this section:
            (1) Major defense acquisition program.--The term ``major 
        defense acquisition program'' means the following:
                    (A) A major defense acquisition program as that 
                term is defined in section 2430 of title 10, United 
                States Code.
                    (B) An acquisition program of the Department of 
                Defense that the Secretary of Defense expects to become 
                a major defense acquisition program (as defined in such 
                section 2430) upon Milestone B approval, on the basis 
                of the cost estimate submitted in accordance with 
                subsection (a)(4) of this section or subsection (a)(4) 
                of section 2366a of title 10, United States Code.
            (2) Initial capabilities document.--The term ``initial 
        capabilities document'' has the meaning provided by section 
        2366a (c)(2) of such title.
            (3) Entity.--The term ``entity'' has the meaning provided 
        by section 2366a(c)(4) of such title.
            (4) Milestone b approval.--The term ``Milestone B 
        approval'' has the meaning provided by section 2366(e)(7) of 
        such title.

SEC. 204. CRITICAL COST GROWTH IN MAJOR DEFENSE ACQUISITION PROGRAMS.

    (a) Authorized Actions in Event of Critical Cost Growth.--Paragraph 
(2) of section 2433(e) of title 10, United States Code, is amended to 
read as follows:
    ``(2)(A) If the program acquisition unit cost or procurement unit 
cost of a major defense acquisition program or designated major 
subprogram (as determined by the Secretary under subsection (d)) 
increases by a percentage equal to or greater than the critical cost 
growth threshold for the program or subprogram, the Secretary of 
Defense, after consultation with the Joint Requirements Oversight 
Council regarding program requirements, shall--
            ``(i) determine the root cause or causes of the critical 
        cost growth including the role, if any, of--
                    ``(I) changes or growth in requirements;
                    ``(II) unrealistic baseline estimates;
                    ``(III) any design, engineering, manufacturing, or 
                technology integration issues;
                    ``(IV) changes in procurement quantities;
                    ``(V) inadequate program funding or funding 
                instability;
                    ``(VI) poor performance by government or contractor 
                personnel responsible for program management; or
                    ``(VII) other causes as identified by the 
                Secretary;
            ``(ii) subject to subparagraph (B), determine whether to 
        terminate such program or to restructure such program after 
        assessing--
                    ``(I) the root causes of cost growth identified 
                pursuant to subparagraph (A);
                    ``(II) the validity and urgency of the joint 
                military requirement;
                    ``(III) the viability of the acquisition strategy;
                    ``(IV) the quality of program management;
                    ``(V) a broad range of potential material and non-
                material alternatives to such program; and
                    ``(VI) the need to reduce funding for other 
                programs due to the cost growth on such program;
            ``(iii) submit the determination made under clause (ii) to 
        Congress, before the end of the 60-day period beginning on the 
        day the Selected Acquisition Report containing the information 
        described in subsection (g) is required to be submitted under 
        section 2432(f) of this title; and
            ``(iv) if a report under paragraph (1) has been previously 
        submitted to Congress with respect to such program or 
        subprogram for the current fiscal year but was based upon a 
        different unit cost report from the program manager to the 
        service acquisition executive designated by the Secretary 
        concerned, submit a further report containing the information 
        described in subsection (g), determined from the time of the 
        previous report to the time of the current report.
    ``(B) A program may be restructured pursuant to a determination 
under subparagraph (A)(ii) only if--
            ``(i) a written certification (with a supporting 
        explanation) is submitted along with the determination stating 
        that--
                    ``(I) such program is essential to national 
                security;
                    ``(II) there are no alternatives to such program 
                which will provide acceptable military capability at 
                less cost;
                    ``(III) new estimates of the program acquisition 
                unit cost or procurement unit cost are reasonable;
                    ``(IV) the program is a higher priority than 
                programs whose funding must be reduced to accommodate 
                cost growth on such program; and
                    ``(V) the management structure for the program is 
                adequate to manage and control program acquisition unit 
                cost or procurement unit cost; and
            ``(ii) the most recent milestone decision is revisited and 
        results in the approval of such restructured program.''.
    (b) Total Expenditure for Procurement Resulting in Treatment as 
Major Defense Acquisition Program.--Section 2430(a)(2) of such title is 
amended by inserting ``, including all planned increments or spirals,'' 
after ``an eventual total expenditure for procurement''.
    (c) Requirement To Include Cost Growth Funding Changes in Report.--
When a program is restructured under paragraph (2) of section 2433(e) 
of title 10, United States Code, the next Selected Acquisition Report 
for such program submitted pursuant to section 2432 of such title 
occurring after the submission of the budget for the fiscal year 
following the fiscal year in which the program was restructured shall 
contain a description of all funding changes included in the budget for 
that fiscal year as a result of the cost growth on such program, 
including reductions made in the budgets of other programs to 
accommodate such cost growth.
    (d) Conforming Amendments.--Section 2433(e)(3) of such title is 
amended--
            (1) in subparagraph (A), by striking ``or (2)(B)'' and 
        inserting ``or (2)(A)(iii)''; and
            (2) in subparagraph (B)--
                    (A) by striking ``or (2)(B)'' and inserting ``or 
                (2)(A)(iii)''; and
                    (B) by striking ``paragraph (2)(A)'' and inserting 
                ``paragraph (2)(B)''.

SEC. 205. ORGANIZATIONAL CONFLICTS OF INTEREST IN THE ACQUISITION OF 
              MAJOR WEAPON SYSTEMS.

    (a) Requirement for Panel To Present Recommendations.--Not later 
than one year after the date of the enactment of this Act, the Panel on 
Contracting Integrity established pursuant to section 813 of the John 
Warner National Defense Authorization Act for Fiscal Year 2007 (Public 
Law 109-364; 120 Stat. 2320) shall present recommendations to the 
Secretary of Defense on measures to eliminate or mitigate 
organizational conflicts of interest in the acquisition of major 
weapons systems.
    (b) Revised Regulations Required.--Not later than 180 days after 
receiving recommendations pursuant to subsection (a), the Secretary of 
Defense shall revise the Defense Supplement to the Federal Acquisition 
Regulation to address organizational conflicts of interest by 
contractors in the acquisition of major weapon systems.
    (c) Potential Organizational Conflicts of Interest.--The 
organizational conflicts of interest considered during the preparation 
of the recommendations required pursuant to subsection (a) shall 
include conflicts that could arise as a result of any of the following:
            (1) Lead system integrator contracts on major defense 
        acquisition programs and contracts that follow lead system 
        integrator contracts on such programs, particularly contracts 
        for production.
            (2) The ownership of business units performing systems 
        engineering and technical assistance functions, professional 
        services, or management support services in relation to major 
        defense acquisition programs by contractors who simultaneously 
        own business units competing to perform as either the prime 
        contractor or the supplier of a major subsystem or component 
        for such programs.
            (3) The award of major subsystem contracts by a prime 
        contractor for a major defense acquisition program to business 
        units or other affiliates of the same parent corporate entity, 
        and particularly the award of subcontracts for software 
        integration or the development of a proprietary software system 
        architecture.
            (4) The performance by, or assistance of, contractors in 
        technical evaluations on major defense acquisition programs.
    (d) Extension of Panel on Contracting Integrity.--Subsection (e) of 
section 813 of the John Warner National Defense Authorization Act for 
Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2321) is amended to 
read as follows:
    ``(e) Termination.--(1) Subject to the restriction in paragraph 
(2), the panel shall continue to serve until the date that is 18 months 
after the date on which the Secretary of Defense notifies the 
congressional defense committees of an intention to terminate the panel 
based on a determination that the activities of the panel no longer 
justify its continuation and that concerns about contracting integrity 
have been fully mitigated.
    ``(2) The panel shall continue to serve at least until December 31, 
2011.''.

SEC. 206. AWARDS FOR DEPARTMENT OF DEFENSE PERSONNEL FOR EXCELLENCE IN 
              THE ACQUISITION OF PRODUCTS AND SERVICES.

    (a) In General.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary of Defense shall commence carrying 
out a program to recognize excellent performance by individuals and 
teams of members of the Armed Forces and civilian personnel of the 
Department of Defense in the acquisition of products and services for 
the Department of Defense.
    (b) Elements.--The program required by subsection (a) shall include 
the following:
            (1) Procedures for the nomination by the personnel of the 
        military departments and the Defense Agencies of individuals 
        and teams of members of the Armed Forces and civilian personnel 
        of the Department of Defense for eligibility for recognition 
        under the program.
            (2) Procedures for the evaluation of nominations for 
        recognition under the program by one or more panels of 
        individuals from the Government, academia, and the private 
        sector who have such expertise, and are appointed in such 
        manner, as the Secretary shall establish for purposes of the 
        program.
    (c) Award of Cash Bonuses.--As part of the program required by 
subsection (a), the Secretary may award to any individual recognized 
pursuant to the program a cash bonus authorized by any other provision 
of law to the extent that the performance of such individual so 
recognized warrants the award of such bonus under such provision of 
law.

SEC. 207. CONSIDERATION OF TRADE-OFFS AMONG COST, SCHEDULE, AND 
              PERFORMANCE IN THE ACQUISITION OF MAJOR WEAPON SYSTEMS.

     (a) Review of Mechanisms for Considering Trade-Offs.--The 
Comptroller General shall review the use by the Department of Defense 
of certain mechanisms for considering trade-offs among cost, schedule, 
and performance in the acquisition of major weapon systems.
    (b) Mechanisms Included.--The mechanisms reviewed pursuant to 
subsection (a) shall include--
            (1) the Tri-Chair Committee, as defined in section 817 of 
        the National Defense Authorization Act for Fiscal Year 2008 
        (Public Law 110-181; 122 Stat. 225);
            (2) Configuration Steering Boards as established pursuant 
        to section 814 of the Duncan Hunter National Defense 
        Authorization Act for Fiscal Year 2009 (Public Law 110-417; 122 
        Stat. 4528);
            (3) any mechanism that is used or that may potentially be 
        used by the Office of the Under Secretary of Defense 
        (Comptroller) for considering trade-offs among cost, schedule, 
        and performance in the acquisition of major weapon systems; and
            (4) any other mechanisms identified as allowing for the 
        consideration of trade-offs in the report on investment 
        strategies for major defense acquisition programs required by 
        section 817 of the National Defense Authorization Act for 
        Fiscal Year 2008 (Public Law 110-181).
    (c) Assessment of Mechanisms.--The review shall describe and 
evaluate the effectiveness of the mechanisms identified in subsection 
(b).
    (d) Report.--Not later than one year after the date of the 
enactment of this Act, the Comptroller General shall submit to the 
congressional defense committees a report on the review and assessment 
performed pursuant to this section. The report shall include such 
recommendations as the Comptroller General considers appropriate on the 
matters reviewed, including recommendations to improve the 
effectiveness of the mechanisms included in the report.

            Attest:

                                                                 Clerk.
111th CONGRESS

  1st Session

                                 S. 454

_______________________________________________________________________

                               AMENDMENT