[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.