[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 454 Enrolled Bill (ENR)]

        S.454

                      One Hundred Eleventh Congress

                                 of the

                        United States of America


                          AT THE FIRST SESSION

          Begun and held at the City of Washington on Tuesday,
             the sixth day of January, two thousand and nine


                                 An Act


 
To improve the organization and procedures of the Department of Defense 
  for the acquisition of major weapon systems, 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; TABLE OF CONTENTS.
    (a) Short Title.--This Act may be cited as the ``Weapon Systems 
Acquisition Reform Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

                    TITLE I--ACQUISITION ORGANIZATION

Sec. 101. Cost assessment and program evaluation.
Sec. 102. Directors of Developmental Test and Evaluation and Systems 
          Engineering.
Sec. 103. Performance assessments and root cause analyses for major 
          defense acquisition programs.
Sec. 104. Assessment of technological maturity of critical technologies 
          of major defense acquisition programs by the Director of 
          Defense Research and Engineering.
Sec. 105. Role of the commanders of the combatant commands in 
          identifying joint military requirements.

                      TITLE II--ACQUISITION POLICY

Sec. 201. Consideration of trade-offs among cost, schedule, and 
          performance objectives in Department of Defense acquisition 
          programs.
Sec. 202. Acquisition strategies to ensure competition throughout the 
          lifecycle of major defense acquisition programs.
Sec. 203. Prototyping requirements for major defense acquisition 
          programs.
Sec. 204. Actions to identify and address systemic problems in major 
          defense acquisition programs prior to Milestone B approval.
Sec. 205. Additional requirements for certain major defense acquisition 
          programs.
Sec. 206. Critical cost growth in major defense acquisition programs.
Sec. 207. Organizational conflicts of interest in major defense 
          acquisition programs.

              TITLE III--ADDITIONAL ACQUISITION PROVISIONS

Sec. 301. Awards for Department of Defense personnel for excellence in 
          the acquisition of products and services.
Sec. 302. Earned value management.
Sec. 303. Expansion of national security objectives of the national 
          technology and industrial base.
Sec. 304. Comptroller General of the United States reports on costs and 
          financial information regarding major defense acquisition 
          programs.
SEC. 2. DEFINITIONS.
    In this Act:
        (1) The term ``congressional defense committees'' has the 
    meaning given that term in section 101(a)(16) of title 10, United 
    States Code.
        (2) The term ``major defense acquisition program'' has the 
    meaning given that term in section 2430 of title 10, United States 
    Code.
        (3) The term ``major weapon system'' has the meaning given that 
    term in section 2379(d) of title 10, United States Code.

                   TITLE I--ACQUISITION ORGANIZATION

    SEC. 101. COST ASSESSMENT AND PROGRAM EVALUATION.
    (a) Director of Cost Assessment and Program Evaluation.--
        (1) In general.--Chapter 4 of title 10, United States Code, is 
    amended by inserting after section 139b the following new section:
``Sec. 139c. Director of Cost Assessment and Program Evaluation
    ``(a) Appointment.--There is a Director of Cost Assessment and 
Program Evaluation in the Department of Defense, appointed by the 
President, by and with the advice and consent of the Senate.
    ``(b) Independent Advice to Secretary of Defense.--(1) The Director 
of Cost Assessment and Program Evaluation is the principal advisor to 
the Secretary of Defense and other senior officials of the Department 
of Defense, and shall provide independent analysis and advice to such 
officials, on the following matters:
        ``(A) Matters assigned to the Director pursuant to this section 
    and section 2334 of this title.
        ``(B) Matters assigned to the Director by the Secretary 
    pursuant to section 113 of this title.
    ``(2) The Director may communicate views on matters within the 
responsibility of the Director directly to the Secretary of Defense and 
the Deputy Secretary of Defense without obtaining the approval or 
concurrence of any other official within the Department of Defense.
    ``(c) Deputy Directors.--There are two Deputy Directors within the 
Office of the Director of Cost Assessment and Program Evaluation, as 
follows:
        ``(1) The Deputy Director for Cost Assessment.
        ``(2) The Deputy Director for Program Evaluation.
    ``(d) Responsibilities.--The Director of Cost Assessment and 
Program Evaluation shall serve as the principal official within the 
senior management of the Department of Defense for the following:
        ``(1) Cost estimation and cost analysis for acquisition 
    programs of the Department of Defense, and carrying out the duties 
    assigned pursuant to section 2334 of this title.
        ``(2) Analysis and advice on matters relating to the planning 
    and programming phases of the Planning, Programming, Budgeting and 
    Execution system, and the preparation of materials and guidance for 
    such system, as directed by the Secretary of Defense, working in 
    coordination with the Under Secretary of Defense (Comptroller).
        ``(3) Analysis and advice for resource discussions relating to 
    requirements under consideration in the Joint Requirements 
    Oversight Council pursuant to section 181 of this title.
        ``(4) Formulation of study guidance for analyses of 
    alternatives for major defense acquisition programs and performance 
    of such analyses, as directed by the Secretary of Defense
        ``(5) Review, analysis, and evaluation of programs for 
    executing approved strategies and policies, ensuring that 
    information on programs is presented accurately and completely, and 
    assessing the effect of spending by the Department of Defense on 
    the United States economy.
        ``(6) Assessments of special access and compartmented 
    intelligence programs, in coordination with the Under Secretary of 
    Defense for Acquisition, Technology, and Logistics and the Under 
    Secretary of Defense for Intelligence and in accordance with 
    applicable policies.
        ``(7) Assessments of alternative plans, programs, and policies 
    with respect to the acquisition programs of the Department of 
    Defense.
        ``(8) Leading the development of improved analytical skills and 
    competencies within the cost assessment and program evaluation 
    workforce of the Department of Defense and improved tools, data, 
    and methods to promote performance, economy, and efficiency in 
    analyzing national security planning and the allocation of defense 
    resources.''.
        (2) Clerical amendment.--The table of sections at the beginning 
    of chapter 4 of such title is amended by inserting after the item 
    relating to section 139b the following new item:

``139c. Director of Cost Assessment and Program Evaluation.''.

        (3) Executive schedule level iv.--Section 5315 of title 5, 
    United States Code, is amended by inserting after the item relating 
    to the Director of Operational Test and Evaluation, Department of 
    Defense the following new item:
        ``Director of Cost Assessment and Program Evaluation, 
    Department of Defense.''.
    (b) Independent Cost Estimation and Cost Analysis.--
        (1) In general.--Chapter 137 of title 10, United States Code, 
    is amended by adding at the end the following new section:
``Sec. 2334. Independent cost estimation and cost analysis
    ``(a) In General.--The Director of Cost Assessment and Program 
Evaluation shall ensure that the cost estimation and cost analysis 
processes of the Department of Defense provide accurate information and 
realistic estimates of cost for the acquisition programs of the 
Department of Defense. In carrying out that responsibility, the 
Director shall--
        ``(1) prescribe, by authority of the Secretary of Defense, 
    policies and procedures for the conduct of cost estimation and cost 
    analysis for the acquisition programs of the Department of Defense;
        ``(2) provide guidance to and consult with the Secretary of 
    Defense, the Under Secretary of Defense for Acquisition, 
    Technology, and Logistics, the Under Secretary of Defense 
    (Comptroller), the Secretaries of the military departments, and the 
    heads of the Defense Agencies with respect to cost estimation in 
    the Department of Defense in general and with respect to specific 
    cost estimates and cost analyses to be conducted in connection with 
    a major defense acquisition program under chapter 144 of this title 
    or a major automated information system program under chapter 144A 
    of this title;
        ``(3) issue guidance relating to the proper selection of 
    confidence levels in cost estimates generally, and specifically, 
    for the proper selection of confidence levels in cost estimates for 
    major defense acquisition programs and major automated information 
    system programs;
        ``(4) issue guidance relating to full consideration of life-
    cycle management and sustainability costs in major defense 
    acquisition programs and major automated information system 
    programs;
        ``(5) review all cost estimates and cost analyses conducted in 
    connection with major defense acquisition programs and major 
    automated information system programs;
        ``(6) conduct 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 
            this title;
                ``(ii) any decision to enter into low-rate initial 
            production or full-rate production;
                ``(iii) any certification under section 2433a of this 
            title; and
                ``(iv) any report under section 2445c(f) of this title; 
            and
            ``(B) at any other time considered appropriate by the 
        Director or upon the request of the Under Secretary of Defense 
        for Acquisition, Technology, and Logistics; and
        ``(7) periodically assess and update the cost indexes used by 
    the Department to ensure that such indexes have a sound basis and 
    meet the Department's needs for realistic cost estimation.
    ``(b) Review of Cost Estimates, Cost Analyses, and Records of the 
Military Departments and Defense Agencies.--The Secretary of Defense 
shall ensure that the Director of Cost Assessment and Program 
Evaluation--
        ``(1) promptly receives the results of all cost estimates and 
    cost analyses conducted by the military departments and Defense 
    Agencies, and all studies conducted by the military departments and 
    Defense Agencies in connection with such cost estimates and cost 
    analyses, for major defense acquisition programs and major 
    automated information system programs of the military departments 
    and Defense Agencies; 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 Defense Agency and including classified and 
    proprietary information) that the Director considers necessary to 
    review in order to carry out any duties under this section.
    ``(c) Participation, Concurrence, and Approval in Cost 
Estimation.--The Director of Cost Assessment and Program Evaluation 
may--
        ``(1) participate in the discussion of any discrepancies 
    between an independent cost estimate and the cost estimate of a 
    military department or Defense Agency for a major defense 
    acquisition program or major automated information system program 
    of the Department of Defense;
        ``(2) comment on deficiencies in the methodology or execution 
    of any cost estimate or cost analysis developed by a military 
    department or Defense Agency for a major defense acquisition 
    program or major automated information system program;
        ``(3) concur in the choice of a cost estimate within the 
    baseline description or any other cost estimate (including the 
    confidence level for any such cost estimate) for use at any event 
    specified in subsection (a)(6); and
        ``(4) participate in the 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 Director of Cost Assessment 
and Program Evaluation, and the Secretary of the military department 
concerned or the head of the Defense Agency concerned (as applicable), 
shall each--
        ``(1) disclose in accordance with paragraph (2) the confidence 
    level used in establishing a cost estimate for a major defense 
    acquisition program or major automated information system 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)--
            ``(A) in any decision documentation approving a cost 
        estimate within the baseline description or any other cost 
        estimate for use at any event specified in subsection (a)(6); 
        and
            ``(B) in the next Selected Acquisition Report pursuant to 
        section 2432 of this title in the case of a major defense 
        acquisition program, or the next quarterly report pursuant to 
        section 2445c of this title in the case of a major automated 
        information system program.
    ``(e) Annual Report on Cost Assessment Activities.--(1) The 
Director of Cost Assessment and Program Evaluation shall prepare an 
annual report summarizing the cost estimation and cost analysis 
activities of the Department of Defense during the previous year and 
assessing the progress of the Department in improving the accuracy of 
its cost estimates and analyses. Each report shall include, for the 
year covered by such report, an assessment of--
        ``(A) the extent to which each of the military departments and 
    Defense Agencies have complied with policies, procedures, and 
    guidance issued by the Director with regard to the preparation of 
    cost estimates for major defense acquisition programs and major 
    automated information systems;
        ``(B) the overall quality of cost estimates prepared by each of 
    the military departments and Defense Agencies for major defense 
    acquisition programs and major automated information system 
    programs; and
        ``(C) any consistent differences in methodology or approach 
    among the cost estimates prepared by the military departments, the 
    Defense Agencies, and the Director.
    ``(2) Each report under this subsection shall be submitted 
concurrently to the Secretary of Defense, the Under Secretary of 
Defense for Acquisition, Technology, and Logistics, the Under Secretary 
of Defense (Comptroller), and the congressional defense committees not 
later than 10 days after the transmittal to Congress of the budget of 
the President for the next fiscal year (as submitted pursuant to 
section 1105 of title 31).
    ``(3)(A) Each report submitted to the congressional defense 
committees under this subsection shall be submitted in unclassified 
form, but may include a classified annex.
    ``(B) The Director shall ensure that a report submitted under this 
subsection does not include any information, such as proprietary or 
source selection sensitive information, that could undermine the 
integrity of the acquisition process.
    ``(C) The unclassified version of each report submitted to the 
congressional defense committees under this subsection shall be posted 
on an Internet website of the Department of Defense that is available 
to the public.
    ``(4) The Secretary of Defense may comment on any report of the 
Director to the congressional defense committees under this subsection.
    ``(f) Staff.--The Secretary of Defense shall ensure that the 
Director of Cost Assessment and Program Evaluation has sufficient 
professional staff of military and civilian personnel to enable the 
Director to carry out the duties and responsibilities of the Director 
under this section.''.
        (2) Clerical amendment.--The table of sections at the beginning 
    of chapter 137 of such title is amended by adding at the end the 
    following new item:

``2334. Independent cost estimation and cost analysis.''.

    (c) Transfer of Personnel and Functions.--
        (1) Transfer of functions.--The functions of the Office of 
    Program Analysis and Evaluation of the Department of Defense, 
    including the functions of the Cost Analysis Improvement Group, are 
    hereby transferred to the Office of the Director of Cost Assessment 
    and Program Evaluation.
        (2) Transfer of personnel to deputy director for independent 
    cost assessment.--The personnel of the Cost Analysis Improvement 
    Group are hereby transferred to the Deputy Director for Cost 
    Assessment in the Office of the Director of Cost Assessment and 
    Program Evaluation.
        (3) Transfer of personnel to deputy director for program 
    analysis and evaluation.--The personnel (other than the personnel 
    transferred under paragraph (2)) of the Office of Program Analysis 
    and Evaluation are hereby transferred to the Deputy Director for 
    Program Evaluation in the Office of the Director of Cost Assessment 
    and Program Evaluation.
    (d) Conforming Amendments.--
        (1) Section 181(d) of title 10, United States Code, is amended 
    by striking ``Director of the Office of Program Analysis and 
    Evaluation'' and inserting ``Director of Cost Assessment and 
    Program Evaluation''.
        (2) Section 2306b(i)(1)(B) of such title is amended by striking 
    ``Cost Analysis Improvement Group of the Department of Defense'' 
    and inserting ``Director of Cost Assessment and Program Analysis''.
        (3) Section 2366a(a)(4) of such title is amended by inserting 
    ``, with the concurrence of the Director of Cost Assessment and 
    Program Evaluation,'' after ``has been submitted''.
        (4) Section 2366b(a)(1)(C) of such title is amended by 
    inserting ``, with the concurrence of the Director of Cost 
    Assessment and Program Evaluation,'' after ``have been developed to 
    execute''.
        (5) Subparagraph (A) of section 2434(b)(1) of such title is 
    amended to read as follows:
    ``(A) be prepared or approved by the Director of Cost Assessment 
and Program Evaluation; and''.
        (6) Section 2445c(f)(3) of such title is amended by striking 
    ``are reasonable'' and inserting ``have been determined, with the 
    concurrence of the Director of Cost Assessment and Program 
    Evaluation, to be reasonable''.
    (e) Report on Monitoring of Operating and Support Costs for Major 
Defense Acquisition Programs.--
        (1) Report to secretary of defense.--Not later than one year 
    after the date of the enactment of this Act, the Director of Cost 
    Assessment and Program Evaluation under section 139c of title 10 
    United States Code (as added by subsection (a)), shall review 
    existing systems and methods of the Department of Defense for 
    tracking and assessing operating and support costs on major defense 
    acquisition programs and submit to the Secretary of Defense a 
    report on the finding and recommendations of the Director as a 
    result of the review, including an assessment by the Director of 
    the feasibility and advisability of establishing baselines for 
    operating and support costs under section 2435 of title 10, United 
    States Code.
        (2) Transmittal to congress.--Not later than 30 days after 
    receiving the report required by paragraph (1), the Secretary shall 
    transmit the report to the congressional defense committees, 
    together with any comments on the report the Secretary considers 
    appropriate.
    SEC. 102. DIRECTORS OF DEVELOPMENTAL TEST AND EVALUATION AND 
      SYSTEMS ENGINEERING.
    (a) In General.--
        (1) Establishment of positions.--Chapter 4 of title 10, United 
    States Code, as amended by section 101(a) of this Act, is further 
    amended by inserting after section 139c the following new section:
``Sec. 139d. Director of Developmental Test and Evaluation; Director of 
    Systems Engineering: joint guidance
    ``(a) Director of Developmental Test and Evaluation.--
        ``(1) Appointment.--There is a Director of Developmental Test 
    and Evaluation, who shall be appointed by the Secretary of Defense 
    from among individuals with an expertise in test and evaluation.
        ``(2) Principal advisor for developmental test and 
    evaluation.--The Director shall be the principal advisor to the 
    Secretary of Defense and the Under Secretary of Defense for 
    Acquisition, Technology, and Logistics on developmental test and 
    evaluation in the Department of Defense.
        ``(3) Supervision.--The Director shall be subject to the 
    supervision of the Under Secretary of Defense for Acquisition, 
    Technology, and Logistics and shall report to the Under Secretary.
        ``(4) Coordination with director of systems engineering.--The 
    Director of Developmental Test and Evaluation shall closely 
    coordinate with the Director of Systems Engineering to ensure that 
    the developmental test and evaluation activities of the Department 
    of Defense are fully integrated into and consistent with the 
    systems engineering and development planning processes of the 
    Department.
        ``(5) Duties.--The Director shall--
            ``(A) develop policies and guidance for--
                ``(i) the conduct of developmental test and evaluation 
            in the Department of Defense (including integration and 
            developmental testing of software);
                ``(ii) in coordination with the Director of Operational 
            Test and Evaluation, the integration of developmental test 
            and evaluation with operational test and evaluation;
                ``(iii) the conduct of developmental test and 
            evaluation conducted jointly by more than one military 
            department or Defense Agency;
            ``(B) review and approve the developmental test and 
        evaluation plan within the test and evaluation master plan for 
        each major defense acquisition program of the Department of 
        Defense;
            ``(C) monitor and review the developmental test and 
        evaluation activities of the major defense acquisition 
        programs;
            ``(D) provide advocacy, oversight, and guidance to elements 
        of the acquisition workforce responsible for developmental test 
        and evaluation;
            ``(E) periodically review the organizations and 
        capabilities of the military departments with respect to 
        developmental test and evaluation and identify needed changes 
        or improvements to such organizations and capabilities, and 
        provide input regarding needed changes or improvements for the 
        test and evaluation strategic plan developed in accordance with 
        section 196(d) of this title; and
            ``(F) perform such other activities relating to the 
        developmental test and evaluation activities of the Department 
        of Defense as the Under Secretary of Defense for Acquisition, 
        Technology, and Logistics may prescribe.
        ``(6) Access to records.--The Secretary of Defense shall ensure 
    that the Director has access to all records and data of the 
    Department of Defense (including the records and data of each 
    military department and including classified and propriety 
    information, as appropriate) that the Director considers necessary 
    in order to carry out the Director's duties under this subsection.
        ``(7) Concurrent service as director of department of defense 
    test resources management center.--The individual serving as the 
    Director of Developmental Test and Evaluation may also serve 
    concurrently as the Director of the Department of Defense Test 
    Resource Management Center under section 196 of this title.
    ``(b) Director of Systems Engineering.--
        ``(1) Appointment.--There is a Director of Systems Engineering, 
    who shall be appointed by the Secretary of Defense from among 
    individuals with an expertise in systems engineering and 
    development planning.
        ``(2) Principal advisor for systems engineering and development 
    planning.--The Director shall be the principal advisor to the 
    Secretary of Defense and the Under Secretary of Defense for 
    Acquisition, Technology, and Logistics on systems engineering and 
    development planning in the Department of Defense.
        ``(3) Supervision.--The Director shall be subject to the 
    supervision of the Under Secretary of Defense for Acquisition, 
    Technology, and Logistics and shall report to the Under Secretary.
        ``(4) Coordination with director of developmental test and 
    evaluation.--The Director of Systems Engineering shall closely 
    coordinate with the Director of Developmental Test and Evaluation 
    to ensure that the developmental test and evaluation activities of 
    the Department of Defense are fully integrated into and consistent 
    with the systems engineering and development planning processes of 
    the Department.
        ``(5) Duties.--The Director shall--
            ``(A) develop policies and guidance for--
                ``(i) the use of systems engineering principles and 
            best practices, generally;
                ``(ii) the use of systems engineering approaches to 
            enhance reliability, availability, and maintainability on 
            major defense acquisition programs;
                ``(iii) the development of systems engineering master 
            plans for major defense acquisition programs including 
            systems engineering considerations in support of lifecycle 
            management and sustainability; and
                ``(iv) the inclusion of provisions relating to systems 
            engineering and reliability growth in requests for 
            proposals;
            ``(B) review and approve the systems engineering master 
        plan for each major defense acquisition program;
            ``(C) monitor and review the systems engineering and 
        development planning activities of the major defense 
        acquisition programs;
            ``(D) provide advocacy, oversight, and guidance to elements 
        of the acquisition workforce responsible for systems 
        engineering, development planning, and lifecycle management and 
        sustainability functions;
            ``(E) 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 this title, including specific input 
        relating to each capabilities development document;
            ``(F) periodically review the organizations and 
        capabilities of the military departments with respect to 
        systems engineering, development planning, and lifecycle 
        management and sustainability, and identify needed changes or 
        improvements to such organizations and capabilities; and
            ``(G) perform such other activities relating to the systems 
        engineering and development planning activities of the 
        Department of Defense as the Under Secretary of Defense for 
        Acquisition, Technology, and Logistics may prescribe.
        ``(6) Access to records.--The Director 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 Director considers 
    necessary to review in order to carry out the Director's duties 
    under this subsection.
    ``(c) Joint Annual Report.--Not later than March 31 each year, 
beginning in 2010, the Director of Developmental Test and Evaluation 
and the Director of Systems Engineering shall jointly submit to the 
congressional defense committees a report on the activities undertaken 
pursuant to subsections (a) and (b) during the preceding year. Each 
report shall include a section on activities relating to the major 
defense acquisition programs which shall set forth, at a minimum, the 
following:
        ``(1) A discussion of the extent to which the major defense 
    acquisition programs are fulfilling the objectives of their systems 
    engineering master plans and developmental test and evaluation 
    plans.
        ``(2) A discussion of the waivers of and deviations from 
    requirements in test and evaluation master plans, systems 
    engineering master plans, and other testing requirements that 
    occurred during the preceding year with respect to such programs, 
    any concerns raised by such waivers or deviations, and the actions 
    that have been taken or are planned to be taken to address such 
    concerns.
        ``(3) An assessment of the organization and capabilities of the 
    Department of Defense for systems engineering, development 
    planning, and developmental test and evaluation with respect to 
    such programs.
        ``(4) Any comments on such report that the Secretary of Defense 
    considers appropriate.
    ``(d) Joint Guidance.--The Director of Developmental Test and 
Evaluation and the Director of Systems Engineering shall jointly, in 
coordination with the official designated by the Secretary of Defense 
under section 103 of the Weapon Systems Acquisition Reform Act of 2009, 
issue guidance on the following:
        ``(1) The development and tracking of detailed measurable 
    performance criteria as part of the systems engineering master 
    plans and the developmental test and evaluation plans within the 
    test and evaluation master plans of major defense acquisition 
    programs.
        ``(2) The use of developmental test and evaluation to measure 
    the achievement of specific performance objectives within a systems 
    engineering master plan.
        ``(3) A system for storing and tracking information relating to 
    the achievement of the performance criteria and objectives 
    specified pursuant to this subsection.
    ``(e) Major Defense Acquisition Program Defined.--In this section, 
the term `major defense acquisition program' has the meaning given that 
term in section 2430 of this title.''.
        (2) Clerical amendment.--The table of sections at the beginning 
    of chapter 4 of such title, as amended by section 101(a) of this 
    Act, is further amended by inserting after the item relating to 
    section 139c the following new item:

``139d. Director of Developmental Test and Evaluation; Director of 
          Systems Engineering: joint guidance.''.

    (b) Developmental Test and Evaluation and Systems Engineering in 
the Military Departments and Defense Agencies.--
        (1) Plans.--The service acquisition executive of each military 
    department and each Defense Agency with responsibility for a major 
    defense acquisition program shall develop and implement plans to 
    ensure the military department or Defense Agency concerned has 
    provided appropriate resources for each of the following:
            (A) Developmental testing organizations with adequate 
        numbers of trained personnel in order to--
                (i) ensure that developmental testing requirements are 
            appropriately addressed in the translation of operational 
            requirements into contract specifications, in the source 
            selection process, and in the preparation of requests for 
            proposals on all major defense acquisition programs;
                (ii) participate in the planning of developmental test 
            and evaluation activities, including the preparation and 
            approval of a developmental test and evaluation plan within 
            the test and evaluation master plan for each major defense 
            acquisition program; and
                (iii) participate in and oversee the conduct of 
            developmental testing, the analysis of data, and the 
            preparation of evaluations and reports based on such 
            testing.
            (B) Development planning and systems engineering 
        organizations with adequate numbers of trained personnel in 
        order to--
                (i) support key requirements, acquisition, and budget 
            decisions made for each major defense acquisition program 
            prior to Milestone A approval and Milestone B approval 
            through a rigorous systems analysis and systems engineering 
            process;
                (ii) include a robust program for improving 
            reliability, availability, maintainability, and 
            sustainability as an integral part of design and 
            development within the systems engineering master plan for 
            each major defense acquisition program; and
                (iii) identify systems engineering requirements, 
            including reliability, availability, maintainability, and 
            lifecycle management and sustainability requirements, 
            during the Joint Capabilities Integration Development 
            System process, and incorporate such systems engineering 
            requirements into contract requirements for each major 
            defense acquisition program.
        (2) Reports by service acquisition executives.--Not later than 
    180 days after the date of the enactment of this Act, the service 
    acquisition executive of each military department and each Defense 
    Agency with responsibility for a major defense acquisition program 
    shall submit to the Director of Developmental Test and Evaluation 
    and the Director of Systems Engineering a report on the extent to 
    which--
            (A) such military department or Defense Agency has 
        implemented, or is implementing, the plan required by paragraph 
        (1); and
            (B) additional authorities or resources are needed to 
        attract, develop, retain, and reward developmental test and 
        evaluation personnel and systems engineers with appropriate 
        levels of hands-on experience and technical expertise to meet 
        the needs of such military department or Defense Agency.
        (3) Assessment of reports by directors of developmental test 
    and evaluation and systems engineering.--The first annual report 
    submitted to Congress by the Director of Developmental Test and 
    Evaluation and the Director of Systems Engineering under section 
    139d(c) of title 10, United States Code (as added by subsection 
    (a)), shall include an assessment by the Directors of the reports 
    submitted by the service acquisition executives to the Directors 
    under paragraph (2).
    SEC. 103. PERFORMANCE ASSESSMENTS AND ROOT CAUSE ANALYSES FOR MAJOR 
      DEFENSE ACQUISITION PROGRAMS.
    (a) Designation of Senior Official Responsibility for Performance 
Assessments and Root Cause Analyses.--
        (1) In general.--The Secretary of Defense shall designate a 
    senior official in the Office of the Secretary of Defense as the 
    principal official of the Department of Defense responsible for 
    conducting and overseeing performance assessments and root cause 
    analyses for major defense acquisition programs.
        (2) No program execution responsibility.--The Secretary shall 
    ensure that the senior official designated under paragraph (1) is 
    not responsible for program execution.
        (3) Staff and resources.--The Secretary shall assign to the 
    senior official designated under paragraph (1) appropriate staff 
    and resources necessary to carry out official's function under this 
    section.
    (b) Responsibilities.--The senior official designated under 
subsection (a) shall be responsible for the following:
        (1) Carrying out performance assessments of major defense 
    acquisition programs in accordance with the requirements of 
    subsection (c) periodically or when requested by the Secretary of 
    Defense, the Under Secretary of Defense for Acquisition, Technology 
    and Logistics, the Secretary of a military department, or the head 
    of a Defense Agency.
        (2) Conducting root cause analyses for major defense 
    acquisition programs in accordance with the requirements of 
    subsection (d) when required by section 2433a(a)(1) of title 10, 
    United States Code (as added by section 206(a) of this Act), or 
    when requested by the Secretary of Defense, the Under Secretary of 
    Defense for Acquisition, Technology and Logistics, the Secretary of 
    a military department, or the head of a Defense Agency.
        (3) Issuing policies, procedures, and guidance governing the 
    conduct of performance assessments and root cause analyses by the 
    military departments and the Defense Agencies.
        (4) Evaluating the utility of performance metrics used to 
    measure the cost, schedule, and performance of major defense 
    acquisition programs, and making such recommendations to the 
    Secretary of Defense as the official considers appropriate to 
    improve such metrics.
        (5) Advising acquisition officials on performance issues 
    regarding a major defense acquisition program that may arise--
            (A) prior to certification under section 2433a of title 10, 
        United States Code (as so added);
            (B) prior to entry into full-rate production; or
            (C) in the course of consideration of any decision to 
        request authorization of a multiyear procurement contract for 
        the program.
    (c) Performance Assessments.--For purposes of this section, a 
performance assessment with respect to a major defense acquisition 
program is an evaluation of the following:
        (1) The cost, schedule, and performance of the program, 
    relative to current metrics, including performance requirements and 
    baseline descriptions.
        (2) The extent to which the level of program cost, schedule, 
    and performance predicted relative to such metrics is likely to 
    result in the timely delivery of a level of capability to the 
    warfighter that is consistent with the level of resources to be 
    expended and provides superior value to alternative approaches that 
    may be available to meet the same military requirement.
    (d) Root Cause Analyses.--For purposes of this section and section 
2433a of title 10, United States Code (as so added), a root cause 
analysis with respect to a major defense acquisition program is an 
assessment of the underlying cause or causes of shortcomings in cost, 
schedule, or performance of the program, including the role, if any, 
of--
        (1) unrealistic performance expectations;
        (2) unrealistic baseline estimates for cost or schedule;
        (3) immature technologies or excessive manufacturing or 
    integration risk;
        (4) unanticipated design, engineering, manufacturing, or 
    technology integration issues arising during program performance;
        (5) changes in procurement quantities;
        (6) inadequate program funding or funding instability;
        (7) poor performance by government or contractor personnel 
    responsible for program management; or
        (8) any other matters.
    (e) Support of Applicable Capabilities and Expertise.--The 
Secretary of Defense shall ensure that the senior official designated 
under subsection (a) has the support of other Department of Defense 
officials with relevant capabilities and expertise needed to carry out 
the requirements of this section.
    (f) Annual Report.--Not later than March 1 each year, beginning in 
2010, the official responsible for conducting and overseeing 
performance assessments and root cause analyses for major defense 
acquisition programs shall submit to the congressional defense 
committees a report on the activities undertaken under this section 
during the preceding year.
    SEC. 104. 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, in 
consultation with the Director of Developmental Test and Evaluation, 
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 March 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, 2010, 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.
    (c) Technological Maturity Standards.--Not later than 180 days 
after the date of the enactment of this Act, the Director of Defense 
Research and Engineering, in consultation with the Director of 
Developmental Test and Evaluation, shall develop knowledge-based 
standards against which to measure the technological maturity and 
integration risk of critical technologies at key stages in the 
acquisition process for purposes of conducting the reviews and 
assessments of major defense acquisition programs required by 
subsection (c) of section 139a of title 10, United States Code (as so 
added).
    SEC. 105. 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, as 
amended by section 101(d) of this Act, is further 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).''.
    (b) Input From Commanders of Combatant Commands.--The Joint 
Requirements Oversight Council in the Department of Defense shall seek 
and consider input from the commanders of combatant commands, in 
accordance with section 181(d) of title 10, United States Code (as 
amended by subsection (a)). Such input may include, but is not limited 
to, an assessment of the following:
        (1) 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.
        (2) The necessity and sufficiency of a proposed joint military 
    requirement in terms of current and projected missions or threats.
        (3) The relative priority of a proposed joint military 
    requirement in comparison with other joint military requirements 
    within the theater of operations of the commander of a combatant 
    command.
        (4) 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.
    (c) Comptroller General of the United States Review of 
Implementation.--
        (1) Requirement.--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--
            (A) 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;
            (B) the amendments to subsection (b) of section 181 of 
        title 10, United States Code, made by section 942 of the 
        National Defense Authorization Act for Fiscal Year 2008 (Public 
        Law 110-181; 122 Stat. 287) and by section 201(b) of this Act; 
        and
            (C) the requirements of section 201(c) of this Act.
        (2) Matters covered.--The report shall include, at a minimum, 
    an assessment of--
            (A) 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;
            (B) the quality and effectiveness of efforts to estimate 
        the level of resources needed to fulfill joint military 
        requirements; and
            (C) the extent to which the Council has considered trade-
        offs among cost, schedule, and performance objectives.

                      TITLE II--ACQUISITION POLICY

    SEC. 201. CONSIDERATION OF TRADE-OFFS AMONG COST, SCHEDULE, AND 
      PERFORMANCE OBJECTIVES IN DEPARTMENT OF DEFENSE ACQUISITION 
      PROGRAMS.
    (a) Consideration of Trade-Offs.--
        (1) In general.--The Secretary of Defense shall ensure that 
    mechanisms are developed and implemented to require consideration 
    of trade-offs among cost, schedule, and performance objectives as 
    part of the process for developing requirements for Department of 
    Defense acquisition programs.
        (2) Elements.--The mechanisms required under this subsection 
    shall ensure, at a minimum, that--
            (A) Department of Defense officials responsible for 
        acquisition, budget, and cost estimating functions are provided 
        an appropriate opportunity to develop estimates and raise cost 
        and schedule matters before performance objectives are 
        established for capabilities for which the Chairman of the 
        Joint Requirements Oversight Council is the validation 
        authority; and
            (B) the process for developing requirements is structured 
        to enable incremental, evolutionary, or spiral acquisition 
        approaches, including the deferral of technologies that are not 
        yet mature and capabilities that are likely to significantly 
        increase costs or delay production until later increments or 
        spirals.
    (b) Duties of Joint Requirements Oversight Council.--Section 181(b) 
of title 10, United States Code, is amended--
        (1) in paragraph (1)--
            (A) by striking ``and'' at the end of subparagraph (A);
            (B) by inserting ``and'' at the end of subparagraph (B) 
        after the semicolon; and
            (C) by adding at the end the following new subparagraph:
            ``(C) in ensuring the consideration of trade-offs among 
        cost, schedule, and performance objectives for joint military 
        requirements in consultation with the advisors specified in 
        subsection (d);''.
        (2) in paragraph (3)--
            (A) by inserting ``, in consultation with the Under 
        Secretary of Defense (Comptroller), the Under Secretary of 
        Defense for Acquisition, Technology, and Logistics, and the 
        Director of Cost Assessment and Performance Evaluation,'' after 
        ``assist the Chairman''; and
            (B) by striking ``and'' after the semicolon at the end;
        (3) in paragraph (4), by striking the period at the end and 
    inserting ``; and''; and
        (4) by adding at the end the following new paragraph:
        ``(5) assist the Chairman, in consultation with the commanders 
    of the combatant commands and the Under Secretary of Defense for 
    Acquisition, Technology, and Logistics, in establishing an 
    objective for the overall period of time within which an initial 
    operational capability should be delivered to meet each joint 
    military requirement.''.
    (c) Review of Joint Military Requirements.--The Secretary of 
Defense shall ensure that each new joint military requirement 
recommended by the Joint Requirements Oversight Council is reviewed to 
ensure that the Joint Requirements Oversight Council has, in making 
such recommendation--
        (1) taken appropriate action to seek and consider input from 
    the commanders of the combatant commands, in accordance with the 
    requirements of section 181(d) of title 10, United States Code (as 
    amended by section 105(a) of this Act);
        (2) engaged in consideration of trade-offs among cost, 
    schedule, and performance objectives in accordance with the 
    requirements of section 181(b)(1)(C) of title 10, United States 
    Code (as added by subsection (b)); and
        (3) engaged in consideration of issues of joint portfolio 
    management, including alternative material and non-material 
    solutions, as provided in Department of Defense instructions for 
    the development of joint military requirements.
    (d) Study Guidance for Analyses of Alternatives.--The Director of 
Cost Assessment and Program Evaluation shall take the lead in the 
development of study guidance for an analysis of alternatives for each 
joint military requirement for which the Chairman of the Joint 
Requirements Oversight Council is the validation authority. In 
developing the guidance, the Director shall solicit the advice of 
appropriate officials within the Department of Defense and ensure that 
the guidance requires, at a minimum--
        (1) full consideration of possible trade-offs among cost, 
    schedule, and performance objectives for each alternative 
    considered; and
        (2) an assessment of whether or not the joint military 
    requirement can be met in a manner that is consistent with the cost 
    and schedule objectives recommended by the Joint Requirements 
    Oversight Council.
    (e) Analysis of Alternatives in Certification for Milestone A.--
Section 2366a(a) of title 10, United States Code, as amended by section 
101(d)(3) of this Act, is further amended--
        (1) by striking ``and'' at the end of paragraph (3);
        (2) by redesignating paragraph (4) as paragraph (5); and
        (3) by inserting after paragraph (3) the following new 
    paragraph (4):
        ``(4) that an analysis of alternatives has been performed 
    consistent with study guidance developed by the Director of Cost 
    Assessment and Program Evaluation; and''.
    (f) Duties of Milestone Decision Authority.--Section 2366b(a)(1)(B) 
of such title is amended by inserting ``appropriate trade-offs among 
cost, schedule, and performance objectives have been made to ensure 
that'' before ``the program is affordable''.
    SEC. 202. ACQUISITION STRATEGIES TO ENSURE COMPETITION THROUGHOUT 
      THE LIFECYCLE OF MAJOR DEFENSE ACQUISITION PROGRAMS.
    (a) Acquisition Strategies To Ensure 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)(1) 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 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) Additional Measures To Ensure Competition at Subcontract 
Level.--The Secretary shall take actions to ensure fair and objective 
``make-buy'' decisions by prime contractors on major defense 
acquisition programs by--
        (1) requiring prime contractors to give full and fair 
    consideration to qualified sources other than the prime contractor 
    for the development or construction of major subsystems and 
    components of major weapon systems;
        (2) providing for government surveillance of the process by 
    which prime contractors consider such sources and determine whether 
    to conduct such development or construction in-house or through a 
    subcontract; and
        (3) providing for the assessment of the extent to which a 
    contractor has given full and fair consideration to qualified 
    sources other than the contractor in sourcing decisions as a part 
    of past performance evaluations.
    (d) Consideration of Competition Throughout Operation and 
Sustainment of Major Weapon Systems.--Whenever a decision regarding 
source of repair results in a plan to award a contract for performance 
of maintenance and sustainment of a major weapon system, the Secretary 
shall take actions to ensure that, to the maximum extent practicable 
and consistent with statutory requirements, contracts for such 
maintenance and sustainment are awarded on a competitive basis and give 
full consideration to all sources (including sources that partner or 
subcontract with public or private sector repair activities).
    (e) Applicability.--
        (1) Strategy and measures to ensure competition.--The 
    requirements of subsections (a) and (b) shall apply to any 
    acquisition plan for a major defense acquisition program that is 
    developed or revised on or after the date that is 60 days after the 
    date of the enactment of this Act.
        (2) Additional actions.--The actions required by subsections 
    (c) and (d) shall be taken within 180 days after the date of the 
    enactment of this Act.
    SEC. 203. PROTOTYPING REQUIREMENTS FOR MAJOR DEFENSE ACQUISITION 
      PROGRAMS.
    (a) Competitive Prototyping.--Not later than 90 days after the date 
of the enactment of this Act, the Secretary of Defense shall modify the 
guidance of the Department of Defense relating to the operation of the 
acquisition system with respect to competitive prototyping for major 
defense acquisition programs to ensure the following:
        (1) That the acquisition strategy for each major defense 
    acquisition program provides for competitive prototypes before 
    Milestone B approval (or Key Decision Point B approval in the case 
    of a space program) unless the Milestone Decision Authority for 
    such program waives the requirement pursuant to paragraph (2).
        (2) That the Milestone Decision Authority may waive the 
    requirement in paragraph (1) only--
            (A) on the basis that the cost of producing competitive 
        prototypes exceeds the expected life-cycle benefits (in 
        constant dollars) of producing such prototypes, including the 
        benefits of improved performance and increased technological 
        and design maturity that may be achieved through competitive 
        prototyping; or
            (B) on the basis that, but for such waiver, the Department 
        would be unable to meet critical national security objectives.
        (3) That whenever a Milestone Decision Authority authorizes a 
    waiver pursuant to paragraph (2), the Milestone Decision 
    Authority--
            (A) shall require that the program produce a prototype 
        before Milestone B approval (or Key Decision Point B approval 
        in the case of a space program) if the expected life-cycle 
        benefits (in constant dollars) of producing such prototype 
        exceed its cost and its production is consistent with achieving 
        critical national security objectives; and
            (B) shall notify the congressional defense committees in 
        writing not later than 30 days after the waiver is authorized 
        and include in such notification the rationale for the waiver 
        and the plan, if any, for producing a prototype.
        (4) That prototypes may be required under paragraph (1) or (3) 
    for the system to be acquired or, if prototyping of the system is 
    not feasible, for critical subsystems of the system.
    (b) Comptroller General Review of Certain Waivers.--
        (1) Notice to comptroller general.--Whenever a Milestone 
    Decision Authority authorizes a waiver of the requirement for 
    prototypes pursuant to paragraph (2) of subsection (a) on the basis 
    of excessive cost, the Milestone Decision Authority shall submit 
    the notification of the waiver, together with the rationale, to the 
    Comptroller General of the United States at the same time it is 
    submitted to the congressional defense committees.
        (2) Comptroller general review.--Not later than 60 days after 
    receipt of a notification of a waiver under paragraph (1), the 
    Comptroller General shall--
            (A) review the rationale for the waiver; and
            (B) submit to the congressional defense committees a 
        written assessment of the rationale for the waiver.
    SEC. 204. ACTIONS TO IDENTIFY AND ADDRESS SYSTEMIC PROBLEMS IN 
      MAJOR DEFENSE ACQUISITION PROGRAMS PRIOR TO MILESTONE B APPROVAL.
    (a) Modification to Certification Requirement.--Subsection (a) of 
section 2366a of title 10, United States Code, is amended by striking 
``may not receive Milestone A approval, or Key Decision Point A 
approval in the case of a space program,'' and inserting ``may not 
receive Milestone A approval, or Key Decision Point A approval in the 
case of a space program, or otherwise be initiated prior to Milestone B 
approval, or Key Decision Point B approval in the case of a space 
program,''.
    (b) Modification to Notification Requirement.--Subsection (b) of 
such section is amended--
        (1) by inserting ``(1)'' before ``With respect to'';
        (2) in paragraph (1), as so designated, by striking ``by at 
    least 25 percent,'' and inserting ``by at least 25 percent, or the 
    program manager determines that the period of time required for the 
    delivery of an initial operational capability is likely to exceed 
    the schedule objective established pursuant to section 181(b)(5) of 
    this title by more than 25 percent,''; and
        (3) by adding at the end the following new paragraph:
    ``(2) Not later than 30 days after a program manager submits a 
notification to the Milestone Decision Authority pursuant to paragraph 
(1) with respect to a major defense acquisition program, the Milestone 
Decision Authority shall submit to the congressional defense committees 
a report that--
        ``(A) identifies the root causes of the cost or schedule growth 
    in accordance with applicable policies, procedures, and guidance;
        ``(B) identifies appropriate acquisition performance measures 
    for the remainder of the development of the program; and
        ``(C) includes one of the following:
            ``(i) A written certification (with a supporting 
        explanation) stating that--
                ``(I) the program is essential to national security;
                ``(II) there are no alternatives to the program that 
            will provide acceptable military capability at less cost;
                ``(III) new estimates of the development cost or 
            schedule, as appropriate, are reasonable; and
                ``(IV) the management structure for the program is 
            adequate to manage and control program development 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.''.
    (c) Application to Ongoing Programs.--
        (1) In general.--Each major defense acquisition program 
    described in paragraph (2) shall be certified in accordance with 
    the requirements of section 2366a of title 10, United States Code 
    (as amended by this section), within one year after the date of the 
    enactment of this Act.
        (2) Covered programs.--The requirement in paragraph (1) shall 
    apply to any major defense acquisition program that--
            (A) was initiated before the date of the enactment of this 
        Act; and
            (B) as of the date of certification under paragraph (1) has 
        not otherwise been certified pursuant to either section 2366a 
        (as so amended) or 2366b of title 10, United States Code.
    SEC. 205. 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 such certification components.''; and
        (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; 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.--Not later than 270 days after the date of 
    the enactment of this Act, for each major defense acquisition 
    program that received Milestone B approval before January 6, 2006, 
    and has not received Milestone C approval, and for each space 
    program that received Key Decision Point B approval before January 
    6, 2006, and has not received Key Decision Point C approval, the 
    Milestone Decision Authority shall determine whether or not such 
    program satisfies all of the certification components specified in 
    paragraphs (1) and (2) of subsection (a) of section 2366b of title 
    10, United States Code (as amended by subsection (a) of this 
    section).
        (2) Annual review.--The Milestone Decision Authority shall 
    review any program determined pursuant to paragraph (1) not to 
    satisfy any of the certification components of subsection (a) of 
    section 2366b of title 10, United States Code (as so amended), not 
    less often than annually thereafter to determine the extent to 
    which such program currently satisfies such certification 
    components until such time as the Milestone Decision Authority 
    determines that such 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 all of the 
    certification components of subsection (a) of section 2366b of 
    title 10, United States Code, (as so amended) 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 such certification components.
    (c) Reviews of Programs Restructured After Experiencing Critical 
Cost Growth.--The official designated to perform oversight of 
performance assessment pursuant to section 103 of this Act, shall 
assess the performance of each major defense acquisition program that 
has exceeded critical cost growth thresholds established pursuant to 
section 2433(e) of title 10, United States Code, but has not been 
terminated in accordance with section 2433a of such title (as added by 
section 206(a) of this Act) not less often than semi-annually until one 
year after the date on which such program receives a new milestone 
approval, in accordance with section 2433a(c)(3) of such title (as so 
added). The results of reviews performed under this subsection shall be 
reported to the Under Secretary of Defense for Acquisition, Technology, 
and Logistics and summarized in the next annual report of such 
designated official.
    SEC. 206. CRITICAL COST GROWTH IN MAJOR DEFENSE ACQUISITION 
      PROGRAMS.
    (a) Actions Following Critical Cost Growth.--
        (1) In general.--Chapter 144 of title 10, United States Code, 
    is amended by inserting after section 2433 the following new 
    section:
``Sec. 2433a. Critical cost growth in major defense acquisition 
     programs
    ``(a) Reassessment of Program.--If the program acquisition unit 
cost or procurement unit cost of a major defense acquisition program or 
designated subprogram (as determined by the Secretary under section 
2433(d) of this title) 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--
        ``(1) determine the root cause or causes of the critical cost 
    growth in accordance with applicable statutory requirements and 
    Department of Defense policies, procedures, and guidance; and
        ``(2) in consultation with the Director of Cost Assessment and 
    Program Evaluation, carry out an assessment of--
            ``(A) the projected cost of completing the program if 
        current requirements are not modified;
            ``(B) the projected cost of completing the program based on 
        reasonable modification of such requirements;
            ``(C) the rough order of magnitude of the costs of any 
        reasonable alternative system or capability; and
            ``(D) the need to reduce funding for other programs due to 
        the growth in cost of the program.
    ``(b) Presumption of Termination.--(1) After conducting the 
reassessment required by subsection (a) with respect to a major defense 
acquisition program, the Secretary shall terminate the program unless 
the Secretary submits to Congress, before the end of the 60-day period 
beginning on the day the Selected Acquisition Report containing the 
information described in section 2433(g) of this title is required to 
be submitted under section 2432(f) of this title, a written 
certification in accordance with paragraph (2).
    ``(2) A certification described by this paragraph with respect to a 
major defense acquisition program is a written certification that--
        ``(A) the continuation of the program is essential to the 
    national security;
        ``(B) there are no alternatives to the program which will 
    provide acceptable capability to meet the joint military 
    requirement (as defined in section 181(g)((1) of this title) at 
    less cost;
        ``(C) the new estimates of the program acquisition unit cost or 
    procurement unit cost have been determined by the Director of Cost 
    Assessment and Program Evaluation to be reasonable;
        ``(D) the program is a higher priority than programs whose 
    funding must be reduced to accommodate the growth in cost of the 
    program; and
        ``(E) the management structure for the program is adequate to 
    manage and control program acquisition unit cost or procurement 
    unit cost.
    ``(3) A written certification under paragraph (2) shall be 
accompanied by a report presenting the root cause analysis and 
assessment carried out pursuant to subsection (a) and the basis for 
each determination made in accordance with subparagraphs (A) through 
(E) of paragraph (2), together with supporting documentation.
    ``(c) Actions if Program Not Terminated.--(1) If the Secretary 
elects not to terminate a major defense acquisition program pursuant to 
subsection (b), the Secretary shall--
        ``(A) restructure the program in a manner that addresses the 
    root cause or causes of the critical cost growth, as identified 
    pursuant to subsection (a), and ensures that the program has an 
    appropriate management structure as set forth in the certification 
    submitted pursuant to subsection (b)(2)(E);
        ``(B) rescind the most recent Milestone approval, or Key 
    Decision Point approval in the case of a space program, for the 
    program and withdraw any associated certification under section 
    2366a or 2366b of this title;
        ``(C) require a new Milestone approval, or Key Decision Point 
    approval in the case of a space program, for the program before 
    taking any contract action to enter a new contract, exercise an 
    option under an existing contract, or otherwise extend the scope of 
    an existing contract under the program, except to the extent 
    determined necessary by the Milestone Decision Authority, on a non-
    delegable basis, to ensure that the program can be restructured as 
    intended by the Secretary without unnecessarily wasting resources;
        ``(D) include in the report specified in paragraph (2) a 
    description of all funding changes made as a result of the growth 
    in cost of the program, including reductions made in funding for 
    other programs to accommodate such cost growth; and
        ``(E) conduct regular reviews of the program in accordance with 
    the requirements of section 205 of the Weapon Systems Acquisition 
    Reform Act of 2009.
    ``(2) For purposes of paragraph (1)(D), the report specified in 
this paragraph is the first Selected Acquisition Report for the program 
submitted pursuant to section 2432 of this title after the President 
submits a budget pursuant to section 1105 of title 31, in the calendar 
year following the year in which the program was restructured.
    ``(d) Actions if Program Terminated.--If a major defense 
acquisition program is terminated pursuant to subsection (b), the 
Secretary shall submit to Congress a written report setting forth--
        ``(1) an explanation of the reasons for terminating the 
    program;
        ``(2) the alternatives considered to address any problems in 
    the program; and
        ``(3) the course the Department plans to pursue to meet any 
    continuing joint military requirements otherwise intended to be met 
    by the program.''.
        (2) Clerical amendment.--The table of sections at the beginning 
    of chapter 144 of such title is amended by inserting after the item 
    relating to section 2433 the following new item:

``2433a. Critical cost growth in major defense acquisition programs.''.

        (3) Conforming amendment.--Paragraph (2) of section 2433(e) of 
    such title 10 is amended to read as follows:
    ``(2) 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 shall take 
actions consistent with the requirements of section 2433a of this 
title.''.
    (b) Treatment as MDAP.--Section 2430 of such title is amended--
        (1) in subsection (a)(2), by inserting ``, including all 
    planned increments or spirals,'' after ``an eventual total 
    expenditure for procurement''; and
        (2) by adding at the end the following new subsection:
    ``(c) For purposes of subsection (a)(2), the Secretary shall 
consider, as applicable, the following:
        ``(1) The estimated level of resources required to fulfill the 
    relevant joint military requirement, as determined by the Joint 
    Requirements Oversight Council pursuant to section 181 of this 
    title.
        ``(2) The cost estimate referred to in section 2366a(a)(4) of 
    this title.
        ``(3) The cost estimate referred to in section 2366b(a)(1)(C) 
    of this title.
        ``(4) The cost estimate within a baseline description as 
    required by section 2435 of this title.''.
    SEC. 207. ORGANIZATIONAL CONFLICTS OF INTEREST IN MAJOR DEFENSE 
      ACQUISITION PROGRAMS.
    (a) Revised Regulations Required.--Not later than 270 days after 
the date of the enactment of this Act, the Secretary of Defense shall 
revise the Defense Supplement to the Federal Acquisition Regulation to 
provide uniform guidance and tighten existing requirements for 
organizational conflicts of interest by contractors in major defense 
acquisition programs.
    (b) Elements.--The revised regulations required by subsection (a) 
shall, at a minimum--
        (1) address organizational conflicts of interest that could 
    arise as a result of--
            (A) lead system integrator contracts on major defense 
        acquisition programs and contracts that follow lead system 
        integrator contracts on such programs, particularly contracts 
        for production;
            (B) 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;
            (C) 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; or
            (D) the performance by, or assistance of, contractors in 
        technical evaluations on major defense acquisition programs;
        (2) ensure that the Department of Defense receives advice on 
    systems architecture and systems engineering matters with respect 
    to major defense acquisition programs from federally funded 
    research and development centers or other sources independent of 
    the prime contractor;
        (3) require that a contract for the performance of systems 
    engineering and technical assistance functions for a major defense 
    acquisition program contains a provision prohibiting the contractor 
    or any affiliate of the contractor from participating as a prime 
    contractor or a major subcontractor in the development or 
    construction of a weapon system under the program; and
        (4) establish such limited exceptions to the requirement in 
    paragraphs (2) and (3) as may be necessary to ensure that the 
    Department of Defense has continued access to advice on systems 
    architecture and systems engineering matters from highly-qualified 
    contractors with domain experience and expertise, while ensuring 
    that such advice comes from sources that are objective and 
    unbiased.
    (c) Consultation in Revision of Regulations.--
        (1) Recommendations of panel on contracting integrity.--Not 
    later than 90 days 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 major 
    defense acquisition programs.
        (2) Consideration of recommendations.--In developing the 
    revised regulations required by subsection (a), the Secretary shall 
    consider the following:
            (A) The recommendations presented by the Panel on 
        Contracting Integrity pursuant to paragraph (1).
            (B) Any findings and recommendations of the Administrator 
        for Federal Procurement Policy and the Director of the Office 
        of Government Ethics pursuant to section 841(b) of the Duncan 
        Hunter National Defense Authorization Act for Fiscal Year 2009 
        (Public Law 110-417; 122 Stat. 4539).
    (d) Extension of Panel on Contracting Integrity.--Subsection (e) of 
section 813 of the John Warner National Defense Authorization Act for 
Fiscal Year 2007 is amended to read as follows:
    ``(e) Termination.--
        ``(1) In general.--Subject to 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 mitigated.
        ``(2) Minimum continuing service.--The panel shall continue to 
    serve at least until December 31, 2011.''.

              TITLE III--ADDITIONAL ACQUISITION PROVISIONS

    SEC. 301. 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. 302. EARNED VALUE MANAGEMENT.
    (a) Modification of Elements in Report on Implementation.--
Subsection (a) of section 887 of the Duncan Hunter National Defense 
Authorization Act for Fiscal Year 2009 (Public Law 110-417; 122 Stat. 
4562) is amended by striking paragraph (7) and inserting the following 
new paragraphs:
        ``(7) A discussion of the methodology used to establish 
    appropriate baselines for earned value management at the award of a 
    contract or commencement of a program, whichever is earlier.
        ``(8) A discussion of the manner in which the Department 
    ensures that personnel responsible for administering and overseeing 
    earned value management systems have the training and 
    qualifications needed to perform that responsibility.
        ``(9) A discussion of mechanisms to ensure that contractors 
    establish and use approved earned value management systems, 
    including mechanisms such as the consideration of the quality of 
    contractor earned value management performance in past performance 
    evaluations.
        ``(10) Recommendations for improving earned value management 
    and its implementation within the Department, including--
            ``(A) a discussion of the merits of possible alternatives; 
        and
            ``(B) a plan for implementing any improvements the 
        Secretary determines to be appropriate.''.
    (b) Modification of Report Date.--Subsection (b) of such section is 
amended by striking ``270 days after the date of the enactment of this 
Act'' and inserting ``October 14, 2009''.
    SEC. 303. EXPANSION OF NATIONAL SECURITY OBJECTIVES OF THE NATIONAL 
      TECHNOLOGY AND INDUSTRIAL BASE.
    (a) In General.--Section 2501(a) of title 10, United States Code, 
is amended by adding at the end the following new paragraph:
        ``(6) Maintaining critical design skills to ensure that the 
    armed forces are provided with systems capable of ensuring 
    technological superiority over potential adversaries.''.
    (b) Assessment of Effect of Termination of Major Defense 
Acquisition Programs on Technology and Industrial Capabilities.--
Section 2505(b) of such title is amended--
        (1) in paragraph (2), by striking ``and'' at the end;
        (2) in paragraph (3), by striking the period at the end and 
    inserting ``; and''; and
        (3) by adding at the end the following new paragraph:
        ``(4) consider the effects of the termination of major defense 
    acquisition programs (as the term is defined in section 2430 of 
    this title) in the previous fiscal year on the sectors and 
    capabilities in the assessment.''.
    SEC. 304. COMPTROLLER GENERAL OF THE UNITED STATES REPORTS ON COSTS 
      AND FINANCIAL INFORMATION REGARDING MAJOR DEFENSE ACQUISITION 
      PROGRAMS.
    (a) Review of Operating and Support Costs of Major Weapon 
Systems.--
        (1) In general.--Not later than one year after the date of the 
    enactment of this Act, the Comptroller General of the United States 
    shall submit to the congressional defense committees a report on 
    growth in operating and support costs for major weapon systems.
        (2) Elements.--In preparing the report required by paragraph 
    (1), the Comptroller General shall, at a minimum--
            (A) identify the original estimates for operating and 
        support costs for major weapon systems selected by the 
        Comptroller General for purposes of the report;
            (B) assess the actual operating and support costs for such 
        major weapon systems;
            (C) analyze the rate of growth for operating and support 
        costs for such major weapon systems;
            (D) for such major weapon systems that have experienced the 
        highest rate of growth in operating and support costs, assess 
        the factors contributing to such growth;
            (E) assess measures taken by the Department of Defense to 
        reduce operating and support costs for major weapon systems; 
        and
            (F) make such recommendations as the Comptroller General 
        considers appropriate.
    (b) Review of Financial Information Relating to Major Defense 
Acquisition Programs.--
        (1) Review.--The Comptroller General of the United States shall 
    perform a review of weaknesses in operations affecting the 
    reliability of financial information on the systems and assets to 
    be acquired under major defense acquisition programs.
        (2) Elements.--The review required under paragraph (1) shall--
            (A) identify any weaknesses in operations under major 
        defense acquisition programs that hinder the capacity to 
        assemble reliable financial information on the systems and 
        assets to be acquired under such programs in accordance with 
        applicable accounting standards;
            (B) identify any mechanisms developed by the Department of 
        Defense to address weaknesses in operations under major defense 
        acquisition programs identified pursuant to subparagraph (A); 
        and
            (C) assess the implementation of the mechanisms set forth 
        pursuant to subparagraph (B), including--
                (i) the actions taken, or planned to be taken, to 
            implement such mechanisms;
                (ii) the schedule for carrying out such mechanisms; and
                (iii) the metrics, if any, instituted to assess 
            progress in carrying out such mechanisms.
        (3) Consultation.--In performing the review required by 
    paragraph (1), the Comptroller General shall seek and consider 
    input from each of the following:
            (A) The Chief Management Officer of the Department of 
        Defense.
            (B) The Chief Management Officer of the Department of the 
        Army.
            (C) The Chief Management Officer of the Department of the 
        Navy.
            (D) The Chief Management Officer of the Department of the 
        Air Force.
        (4) Report.--Not later than one year after the date of 
    enactment of this Act, the Comptroller General shall submit to the 
    congressional defense committees a report on the results of the 
    review required by paragraph (1).

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.