[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 454 Engrossed in Senate (ES)]
111th CONGRESS
1st Session
S. 454
_______________________________________________________________________
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. Reports on systems engineering capabilities of the Department
of Defense.
Sec. 102. Director of Developmental Test and Evaluation.
Sec. 103. Assessment of technological maturity of critical technologies
of major defense acquisition programs by
the Director of Defense Research and
Engineering.
Sec. 104. Director of Independent Cost Assessment.
Sec. 105. Role of the commanders of the combatant commands in
identifying joint military requirements.
Sec. 106. Clarification of submittal of certification of adequacy of
budgets by the Director of the Department
of Defense Test Resource Management Center.
TITLE II--ACQUISITION POLICY
Sec. 201. Consideration of trade-offs among cost, schedule, and
performance in the acquisition of major
weapon systems.
Sec. 202. Preliminary design review and critical design review for
major defense acquisition programs.
Sec. 203. Ensuring competition throughout the life cycle of major
defense acquisition programs.
Sec. 204. Critical cost growth in major defense acquisition programs.
Sec. 205. Organizational conflicts of interest in the acquisition of
major weapon systems.
Sec. 206. Awards for Department of Defense personnel for excellence in
the acquisition of products and services.
Sec. 207. Earned Value Management.
Sec. 208. Expansion of national security objectives of the national
technology and industrial base.
Sec. 209. Plan for elimination of weaknesses in operations that hinder
capacity to assemble and assess reliable
cost information on acquired assets under
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.
TITLE I--ACQUISITION ORGANIZATION
SEC. 101. REPORTS ON SYSTEMS ENGINEERING CAPABILITIES OF THE DEPARTMENT
OF DEFENSE.
(a) 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 shall submit to the
Under Secretary of Defense for Acquisition, Technology, and Logistics a
report setting forth the following:
(1) A description of the extent to which such military
department has in place development planning organizations and
processes staffed by adequate numbers of personnel with
appropriate training and expertise to ensure that--
(A) key requirements, acquisition, and budget
decisions made for each major weapon system prior to
Milestones A and B are supported by a rigorous systems
analysis and systems engineering process;
(B) the systems engineering strategy for each major
weapon system includes a robust program for improving
reliability, availability, maintainability, and
sustainability as an integral part of design and
development; and
(C) systems engineering requirements, including
reliability, availability, maintainability, and
sustainability requirements, are identified during the
Joint Capabilities Integration Development System
process and incorporated into contract requirements for
each major weapon system.
(2) A description of the actions that such military
department has taken, or plans to take, to--
(A) establish needed development planning and
systems engineering organizations and processes; and
(B) attract, develop, retain, and reward systems
engineers with appropriate levels of hands-on
experience and technical expertise to meet the needs of
such military department.
(b) Report by Under Secretary of Defense for Acquisition,
Technology, and Logistics.--Not later than 270 days after the date of
the enactment of this Act, the Under Secretary of Defense for
Acquisition, Technology, and Logistics shall submit to the Committee on
Armed Services of the Senate and the Committee on Armed Services of the
House of Representatives a report on the system engineering
capabilities of the Department of Defense. The report shall include, at
a minimum, the following:
(1) An assessment by the Under Secretary of the reports
submitted by the service acquisition executives pursuant to
subsection (a) and of the adequacy of the actions that each
military department has taken, or plans to take, to meet the
systems engineering and development planning needs of such
military department.
(2) An assessment of each of the recommendations of the
report on Pre-Milestone A and Early-Phase Systems Engineering
of the Air Force Studies Board of the National Research
Council, including the recommended checklist of systems
engineering issues to be addressed prior to Milestones A and B,
and the extent to which such recommendations should be
implemented throughout the Department of Defense.
SEC. 102. DIRECTOR OF DEVELOPMENTAL TEST AND EVALUATION.
(a) Establishment of Position.--
(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 Developmental Test and Evaluation
``(a) 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 acquisition and testing.
``(b)(1) The Director of Developmental Test and Evaluation 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.
``(2) 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.
``(3) 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)(A) The Under Secretary shall provide guidance to the Director
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 processes of the Department.
``(B) The guidance under this paragraph shall ensure, at a minimum,
that--
``(i) developmental test and evaluation requirements are
fully integrated into the Systems Engineering Master Plan for
each major defense acquisition program; and
``(ii) systems engineering and development planning
requirements are fully considered in the Test and Evaluation
Master Plan for each major defense acquisition program.
``(c) The Director of Developmental Test and Evaluation shall--
``(1) develop policies and guidance for the developmental
test and evaluation activities of the Department of Defense
(including integration and developmental testing of software);
``(2) monitor and review the developmental test and
evaluation activities of the major defense acquisition programs
and major automated information systems programs of the
Department of Defense;
``(3) review and approve the test and evaluation master
plan for each major defense acquisition program of the
Department of Defense;
``(4) supervise the activities of the Director of the
Department of Defense Test Resource Management Center under
section 196 of this title, or carry out such activities if
serving concurrently as the Director of Developmental Test and
Evaluation and the Director of the Department of Defense Test
Resource Management Center under subsection (b)(2);
``(5) 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
``(6) 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.
``(d) The Director of Developmental Test and Evaluation shall have
access to all records and data of the Department of Defense (including
the records and data of each military department) that the Director
considers necessary in order to carry out the Director's duties under
this section.
``(e)(1) The Director of Developmental Test and Evaluation shall
submit to Congress each year a report on the developmental test and
evaluation activities of the major defense acquisition programs and
major automated information system programs of the of the Department of
Defense. Each report shall include, at a minimum, the following:
``(A) A discussion of any waivers to testing activities
included in the Test and Evaluation Master Plan for a major
defense acquisition program in the preceding year.
``(B) An assessment of the organization and capabilities of
the Department of Defense for test and evaluation.
``(2) The Secretary of Defense may include in any report submitted
to Congress under this subsection such comments on such report as the
Secretary considers appropriate.''.
(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 Developmental Test and Evaluation.''.
(3) Conforming amendments.--
(A) Section 196(f) of title 10, United States Code,
is amended by striking ``the Under Secretary of Defense
for Acquisition, Technology, and Logistics'' and all
that follows and inserting ``the Under Secretary of
Defense for Acquisition, Technology, and Logistics and
the Director of Developmental Test and Evaluation.''.
(B) Section 139(b) of such title is amended--
(i) by redesignating paragraphs (4) through
(6) as paragraphs (5) through (7),
respectively; and
(ii) by inserting after paragraph (3) the
following new paragraph (4):
``(4) review and approve the test and evaluation master
plan for each major defense acquisition program of the
Department of Defense;''.
(b) Reports on Developmental Testing Organizations and Personnel.--
(1) 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 shall
submit to the Director of Developmental Test and Evaluation a
report on the extent to which the test organizations of such
military department have in place, or have effective plans to
develop, adequate numbers of personnel with appropriate
expertise for each purpose as follows:
(A) To ensure that 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.
(B) To participate in the planning of developmental
test and evaluation activities, including the
preparation and approval of a test and evaluation
master plan for each major defense acquisition program.
(C) To participate in and oversee the conduct of
developmental testing, the analysis of data, and the
preparation of evaluations and reports based on such
testing.
(2) First annual report by director of developmental test
and evaluation.--The first annual report submitted to Congress
by the Director of Developmental Test and Evaluation under
section 139c(e) of title 10, United States Code (as added by
subsection (a)), shall be submitted not later than one year
after the date of the enactment of this Act, and shall include
an assessment by the Director of the reports submitted by the
service acquisition executives to the Director under paragraph
(1).
SEC. 103. ASSESSMENT OF TECHNOLOGICAL MATURITY OF CRITICAL TECHNOLOGIES
OF MAJOR DEFENSE ACQUISITION PROGRAMS BY THE DIRECTOR OF
DEFENSE RESEARCH AND ENGINEERING.
(a) Assessment by Director of Defense Research and Engineering.--
(1) In general.--Section 139a of title 10, United States
Code, is amended by adding at the end the following new
subsection:
``(c)(1) The Director of Defense Research and Engineering shall, in
consultation with the Director of Developmental Test and Evaluation,
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
Congress 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
Congress not later than March 1, 2011, and shall address the
results of reviews and assessments conducted by the Director of
Defense Research and Engineering pursuant to subsection (c)(1)
of such section (as so added) during the preceding calendar
year.
(b) Report on Resources for Implementation.--Not later than 120
days after the date of the enactment of this Act, the Director of
Defense Research and Engineering shall submit to the congressional
defense committees a report describing any additional resources,
including specialized workforce, that may be required by the Director,
and by other science and technology elements of the Department of
Defense, to carry out the following:
(1) The requirements under the amendment made by subsection
(a).
(2) The technological maturity assessments required by
section 2366b(a) of title 10, United States Code, as amended by
section 202 of this Act.
(3) The requirements of Department of Defense Instruction
5000, as revised.
(c) Technological Maturity Standards.--For purposes of the review
and assessment conducted by the Director of Defense Research and
Engineering in accordance with subsection (c) of section 139a of title
10, United States Code (as added by subsection (a)), a critical
technology is considered to be mature--
(1) in the case of a major defense acquisition program that
is being considered for Milestone B approval, if the technology
has been demonstrated in a relevant environment; and
(2) in the case of a major defense acquisition program that
is being considered for Milestone C approval, if the technology
has been demonstrated in a realistic environment.
SEC. 104. DIRECTOR OF INDEPENDENT COST ASSESSMENT.
(a) Director of Independent Cost Assessment.--
(1) In general.--Chapter 4 of title 10, United States Code,
as amended by section 102 of this Act, is further amended by
inserting after section 139c the following new section:
``Sec. 139d. Director of Independent Cost Assessment
``(a) There is a Director of Independent Cost Assessment in the
Department of Defense, appointed by the President, by and with the
advice and consent of the Senate. The Director shall be appointed
without regard to political affiliation and solely on the basis of
fitness to perform the duties of the Director.
``(b) The Director is the principal advisor to the Secretary of
Defense, the Under Secretary of Defense for Acquisition, Technology,
and Logistics, and the Under Secretary of Defense (Comptroller) on cost
estimation and cost analyses for the acquisition programs of the
Department of Defense and the principal cost estimation official within
the senior management of the Department of Defense. 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), and the Secretaries of the military departments
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) establish guidance on confidence levels for cost
estimates on major defense acquisition programs, require that
all such estimates include confidence levels compliant with
such guidance, and require the disclosure of all such
confidence levels (including through Selected Acquisition
Reports submitted pursuant to section 2432 of this title);
``(4) monitor and review all cost estimates and cost
analyses conducted in connection with major defense acquisition
programs and major automated information system programs; and
``(5) 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 certification under section
2433(e)(2) of this title; and
``(iii) any report under section 2445c(f)
of this title; and
``(B) whenever necessary to ensure that an estimate
or analysis under paragraph (4) is unbiased, fair, and
reliable.
``(c)(1) 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.
``(2) The Director shall consult closely with, but the Director and
the Director's staff shall be independent of, the Under Secretary of
Defense for Acquisition, Technology, and Logistics, the Under Secretary
of Defense (Comptroller), and all other officers and entities of the
Department of Defense responsible for acquisition and budgeting.
``(d)(1) The Secretary of a military department shall report
promptly to the Director the results of all cost estimates and cost
analyses conducted by the military department and all studies conducted
by the military department in connection with cost estimates and cost
analyses for major defense acquisition programs of the military
department.
``(2) The Director may make comments on cost estimates and cost
analyses conducted by a military department for a major defense
acquisition program, request changes in such cost estimates and cost
analyses to ensure that they are fair and reliable, and develop or
require the development of independent cost estimates or cost analyses
for such program, as the Director determines to be appropriate.
``(3) The Director shall have access to any records and data in the
Department of Defense (including the records and data of each military
department) that the Director considers necessary to review in order to
carry out the Director's duties under this section.
``(e)(1) The Director 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 costs estimates and
analyses. The report shall include an assessment of--
``(A) the extent to which each of the military departments
have complied with policies, procedures, and guidance issued by
the Director with regard to the preparation of cost estimates;
and
``(B) the overall quality of cost estimates prepared by
each of the military departments.
``(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 Congress not later than 10 days after the
transmission of the budget for the next fiscal year under section 1105
of title 31. 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. Each report submitted to Congress
under this subsection shall be posted on an Internet website of the
Department of Defense that is available to the public.
``(3) The Secretary may comment on any report of the Director to
Congress under this subsection.
``(f) The President shall include in the budget transmitted to
Congress pursuant to section 1105 of title 31 for each fiscal year a
separate statement of estimated expenditures and proposed
appropriations for that fiscal year for the Director of Independent
Cost Assessment in carrying out the duties and responsibilities of the
Director under this section.
``(g) The Secretary of Defense shall ensure that the Director 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 4 of such title, as so amended, is further
amended by inserting after the item relating to section 139c
the following new item:
``139d. Director of Independent Cost Assessment.''.
(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 Independent Cost Assessment, Defense of
Defense.''.
(b) Report on Monitoring of Operating and Support Costs for
MDAPs.--
(1) Report to secretary of defense.--Not later than one
year after the date of the enactment of this Act, the Director
of Independent Cost Assessment under section 139d 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.
(c) Transfer of Personnel and Functions of Cost Analysis
Improvement Group.--The personnel and functions of the Cost Analysis
Improvement Group of the Department of Defense are hereby transferred
to the Director of Independent Cost Assessment under section 139d of
title 10, United States Code (as so added), and shall report directly
to the Director.
(d) Conforming Amendments.--
(1) Section 181(d) of title 10, United States Code, is
amended by inserting ``the Director of Independent Cost
Assessment,'' before ``and the Director''.
(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 Independent Cost
Assessment''.
(3) Section 2366a(a)(4) of such title is amended by
striking ``has been submitted'' and inserting ``has been
approved by the Director of Independent Cost Assessment''.
(4) Section 2366b(a)(1)(C) of such title is amended by
striking ``have been developed to execute'' and inserting
``have been approved by the Director of Independent Cost
Assessment to provide for the execution of''.
(5) Section 2433(e)(2)(B)(iii) of such title is amended by
striking ``are reasonable'' and inserting ``have been
determined by the Director of Independent Cost Assessment to be
reasonable''.
(6) 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
Independent Cost Assessment; and''.
(7) Section 2445c(f)(3) of such title is amended by
striking ``are reasonable'' and inserting ``have been
determined by the Director of Independent Cost Assessment to be
reasonable''.
(e) Comptroller General of the United States 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.
(3) Major weapon system defined.--In this subsection, the
term ``major weapon system'' has the meaning given that term in
2379(d) of title 10, United States Code.
SEC. 105. ROLE OF THE COMMANDERS OF THE COMBATANT COMMANDS IN
IDENTIFYING JOINT MILITARY REQUIREMENTS.
(a) In General.--Section 181 of title 10, United States Code, as
amended by section 104(d)(1) of this Act, is further amended--
(1) by redesignating subsections (e), (f), and (g) as
subsections (f), (g), and (h), respectively; and
(2) by adding after subsection (d) the following new
subsection (e):
``(e) Input From Combatant Commanders on Joint Military
Requirements.--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 (f). 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 justify 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.
``(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 to partner in using
technologies developed to meet the joint military
requirement.''.
(b) Comptroller General of the United States Review of
Implementation.--Not later than two years after the date of the
enactment of this Act, the Comptroller General of the United States
shall submit to the Committees on Armed Services of the Senate and the
House of Representatives a report on the implementation of the
requirements of subsection (e) 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. The report shall include, at a minimum, an
assessment of the extent to which the Council has effectively sought,
and the commanders of the combatant commands have provided, meaningful
input on proposed joint military requirements.
SEC. 106. CLARIFICATION OF SUBMITTAL OF CERTIFICATION OF ADEQUACY OF
BUDGETS BY THE DIRECTOR OF THE DEPARTMENT OF DEFENSE TEST
RESOURCE MANAGEMENT CENTER.
Section 196(e)(2) of title 10, United States Code, is amended--
(1) by redesignating subparagraph (B) as subparagraph (C);
and
(2) by inserting after subparagraph (A) the following new
subparagraph (B):
``(B) If the Director of the Center is not serving concurrently as
the Director of Developmental Test and Evaluation under subsection
(b)(2) of section 139c of this title, the certification of the Director
of the Center under subparagraph (A) shall, notwithstanding subsection
(c)(4) of such section, be submitted directly and independently to the
Secretary of Defense.''.
TITLE II--ACQUISITION POLICY
SEC. 201. CONSIDERATION OF TRADE-OFFS AMONG COST, SCHEDULE, AND
PERFORMANCE IN THE ACQUISITION OF MAJOR WEAPON SYSTEMS.
(a) Consideration of Trade-Offs.--
(1) In general.--The Secretary of Defense shall develop and
implement mechanisms to ensure that trade-offs between cost,
schedule, and performance are considered as part of the process
for developing requirements for major weapon systems.
(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 requirements are established for major
weapon systems; and
(B) consideration is given to fielding major weapon
systems through incremental or spiral acquisition,
while deferring technologies that are not yet mature,
and capabilities that are likely to significantly
increase costs or delay production, until later
increments or spirals.
(3) Major weapons system defined.--In this subsection, the
term ``major weapon system'' has the meaning given that term in
section 2379(d) of title 10, United States Code.
(b) Duties of Joint Requirements Oversight Council.--Section
181(b)(1) of title 10, United States Code, is amended--
(1) in subparagraph (A), by striking ``and'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(C) in ensuring the consideration of trade-offs
among cost, schedule and performance for joint military
requirements in consultation with the advisors
specified in subsection (d);''.
(c) Review of Joint Military Requirements.--
(1) JROC submittal of recommended requirements to under
secretary for atl.--Upon recommending a new joint military
requirement, the Joint Requirements Oversight Council shall
transmit the recommendation to the Under Secretary of Defense
for Acquisition, Technology, and Logistics for review and
concurrence or non-concurrence in the recommendation.
(2) Review of recommended requirements.--The Under
Secretary for Acquisition, Technology, and Logistics shall
review each recommendation transmitted under paragraph (1) to
determine whether or not the Joint Requirements Oversight
Council has, in making such recommendation--
(A) taken appropriate action to solicit and
consider input from the commanders of the combatant
commands in accordance with the requirements of section
181(e) of title 10, United States Code (as amended by
section 105);
(B) given appropriate consideration to trade-offs
among cost, schedule, and performance in accordance
with the requirements of section 181(b)(1)(C) of title
10, United States Code (as amended by subsection (b));
and
(C) given appropriate consideration to issues of
joint portfolio management, including alternative
material and non-material solutions, as provided in
Chairman of the Joint Chiefs of Staff Instruction
3170.01G.
(3) Non-concurrence of under secretary for atl.--If the
Under Secretary for Acquisition, Technology, and Logistics
determines that the Joint Requirements Oversight Council has
failed to take appropriate action in accordance with
subparagraphs (A), (B), and (C) of paragraph (2) regarding a
joint military requirement, the Under Secretary shall return
the recommendation to the Council with specific recommendations
as to matters to be considered by the Council to address any
shortcoming identified by the Under Secretary in the course of
the review under paragraph (2).
(4) Notice on continuing disagreement on requirement.--If
the Under Secretary for Acquisition, Technology, and Logistics
and the Joint Requirements Oversight Council are unable to
reach agreement on a joint military requirement that has been
returned to the Council by the Under Secretary under paragraph
(4), the Under Secretary shall transmit notice of lack of
agreement on the requirement to the Secretary of Defense.
(5) Resolution of continuing disagreement.--Upon receiving
notice under paragraph (4) of a lack of agreement on a joint
military requirement, the Secretary of Defense shall make a
final determination on whether or not to validate the
requirement.
(d) Analysis of Alternatives.--
(1) Requirement at material solution analysis phase.--The
Under Secretary of Defense for Acquisition, Technology, and
Logistics shall ensure that Department of Defense guidance on
major defense acquisition programs requires the Milestone
Decision Authority to conduct an analysis of alternatives (AOA)
during the Material Solution Analysis Phase of each major
defense acquisition program.
(2) Elements.--Each analysis of alternatives under
paragraph (1) shall, at a minimum--
(A) solicit and consider alternative approaches
proposed by the military departments and Defense
Agencies to meet joint military requirements; and
(B) give full consideration to possible trade-offs
between cost, schedule, and performance for each of the
alternatives so considered.
(e) Duties of Milestone Decision Authority.--Section 2366b(a)(1)(B)
of title 10, United States Code, is amended by inserting ``appropriate
trade-offs between cost, schedule, and performance have been made to
ensure that'' before ``the program is affordable''.
SEC. 202. PRELIMINARY DESIGN REVIEW AND CRITICAL DESIGN REVIEW FOR
MAJOR DEFENSE ACQUISITION PROGRAMS.
(a) Preliminary Design Review.--Section 2366b(a) of title 10,
United States Code, as amended by section 201(d) of this Act, is
further amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) by redesignating paragraph (2) as paragraph (3);
(3) by inserting after paragraph (1) the following new
paragraph (2):
``(2) has received a preliminary design review (PDR) 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
(4) in paragraph (3), as redesignated by paragraph (2) of
this section--
(A) 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'';
(B) by striking subparagraph (E); and
(C) by redesignating subparagraph (F) as
subparagraph (E).
(b) Critical Design Review.--The Under Secretary of Defense for
Acquisition, Technology, and Logistics shall ensure that Department of
Defense guidance on major defense acquisition programs requires a
critical design review and a formal post-critical design review
assessment for each major defense acquisition program to ensure that
such program has attained an appropriate level of design maturity
before such program is approved for System Capability and Manufacturing
Process Development.
SEC. 203. ENSURING COMPETITION THROUGHOUT THE LIFE CYCLE OF MAJOR
DEFENSE ACQUISITION PROGRAMS.
(a) Ensuring Competition.--The Secretary of Defense shall ensure
that the acquisition plan for each major defense acquisition program
includes measures to ensure competition, or the option of competition,
at both the prime contract level and the subcontract level of such
program throughout the life cycle of such program as a means to
incentivize contractor performance.
(b) Measures To Ensure Competition.--The measures to ensure
competition, or the option of competition, utilized for purposes of
subsection (a) may include, but are not limited to, measures to achieve
the following, in appropriate cases where such measures are cost-
effective:
(1) Competitive prototyping.
(2) Dual-sourcing.
(3) Funding of a second source for interchangeable, next-
generation prototype systems or subsystems.
(4) Utilization of modular, open architectures to enable
competition for upgrades.
(5) Periodic competitions for subsystem upgrades.
(6) Licensing of additional suppliers.
(7) Requirements for Government oversight or approval of
make or buy decisions to ensure competition at the subsystem
level.
(8) Periodic system or program reviews to address long-term
competitive effects of program decisions.
(9) Consideration of competition at the subcontract level
and in make or buy decisions as a factor in proposal
evaluations.
(c) Competitive Prototyping.--The Secretary of Defense shall modify
the acquisition regulations of the Department of Defense to ensure with
respect to competitive prototyping for major defense acquisition
programs the following:
(1) That the acquisition strategy for each major defense
acquisition program provides for two or more competing teams to
produce 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 on the basis of a determination that--
(A) but for such waiver, the Department would be
unable to meet critical national security objectives;
or
(B) the cost of producing competitive prototypes
exceeds the potential life-cycle benefits of such
competition, including the benefits of improved
performance and increased technological and design
maturity that may be achieved through prototyping.
(2) That if the milestone decision authority waives the
requirement for prototypes produced by two or more teams for a
major defense acquisition program under paragraph (1), the
acquisition strategy for the program provides for the
production of at least one prototype before Milestone B
approval (or Key Decision Point B approval in the case of a
space program) unless the milestone decision authority waives
such requirement on the basis of a determination that--
(A) but for such waiver, the Department would be
unable to meet critical national security objectives;
or
(B) the cost of producing a prototype exceeds the
potential life-cycle benefits of such prototyping,
including the benefits of improved performance and
increased technological and design maturity that may be
achieved through prototyping.
(3) That whenever a milestone decision authority authorizes
a waiver under paragraph (1) or (2), the waiver, the
determination upon which the waiver is based, and the reasons
for the determination are submitted in writing to the
congressional defense committees not later than 30 days after
the waiver is authorized.
(4) That prototypes may be required under paragraph (1) or
(2) for the system to be acquired or, if prototyping of the
system is not feasible, for critical subsystems of the system.
(d) Comptroller General of the United States Review of Certain
Waivers.--
(1) Notice to comptroller general.--Whenever a milestone
decision authority authorizes a waiver of the requirement for
prototypes under paragraph (1) or (2) of subsection (c) on the
basis of excessive cost, the milestone decision authority shall
submit a notice on the waiver, together with the rational for
the waiver, to the Comptroller General of the United States at
the same time a report on the waiver is submitted to the
congressional defense committees under paragraph (3) of that
subsection.
(2) Comptroller general review.--Not later than 60 days
after receipt of a notice on 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.
(e) Applicability.--This section 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.
SEC. 204. CRITICAL COST GROWTH IN MAJOR DEFENSE ACQUISITION PROGRAMS.
(a) Authorized Actions in Event of Critical Cost Growth.--Section
2433(e)(2) of title 10, United States Code, is amended--
(1) by redesignating subparagraph (C) as subparagraph (E);
(2) by striking subparagraph (B); and
(3) by inserting after subparagraph (A) the following new
subparagraphs (B), (C), and (D):
``(B) terminate such acquisition program and submit the
report required by subparagraph (D), unless the Secretary
determines that the continuation of such program is essential
to the national security of the United States and submits a
written certification in accordance with subparagraph (C)(i)
accompanied by a report setting forth the assessment carried
out pursuant to subparagraph (A) and the basis for each
determination made in accordance with clauses (I) through (IV)
of subparagraph (C)(i), together with supporting documentation;
``(C) if the program is not terminated--
``(i) submit to Congress, before the end of the 60-
day period beginning on the day the Selected
Acquisition Report containing the information described
in subsection (g) is required to be submitted under
section 2432(f) of this title, a written certification
stating that--
``(I) such acquisition program is essential
to national security;
``(II) there are no alternatives to such
acquisition program which will provide equal or
greater capability to meet a joint military
requirement (as that term is defined in section
181(h)(1) of this title) at less cost;
``(III) the new estimates of the program
acquisition unit cost or procurement unit cost
were arrived at in accordance with the
requirements of section 139d of this title and
are reasonable; and
``(IV) the management structure for the
acquisition program is adequate to manage and
control program acquisition unit cost or
procurement unit cost;
``(ii) rescind the most recent Milestone approval
(or Key Decision Point approval in the case of a space
program) for such program and withdraw any associated
certification under section 2366a or 2366b of this
title; and
``(iii) require a new Milestone approval (or Key
Decision Point approval in the case of a space program)
for such program before entering into a new contract,
exercising an option under an existing contract, or
otherwise extending the scope of an existing contract
under such program;
``(D) if the program is terminated, submit to Congress a
written report setting forth--
``(i) an explanation of the reasons for terminating
the program;
``(ii) the alternatives considered to address any
problems in the program; and
``(iii) the course the Department plans to pursue
to meet any continuing joint military requirements
otherwise intended to be met by the program; and''.
(b) Total Expenditure for Procurement Resulting in Treatment as
MDAP.--Section 2430(a)(2) of such title is amended by inserting ``,
including all planned increments or spirals,'' after ``an eventual
total expenditure for procurement''.
SEC. 205. ORGANIZATIONAL CONFLICTS OF INTEREST IN THE ACQUISITION OF
MAJOR WEAPON SYSTEMS.
(a) Revised Regulations Required.--Not later than 180 days after
the date of the enactment of this Act, the Under Secretary of Defense
for Acquisition, Technology, and Logistics shall revise the Defense
Supplement to the Federal Acquisition Regulation to address
organizational conflicts of interest by contractors in the acquisition
of major weapon systems.
(b) Elements.--The revised regulations required by subsection (a)
shall, at a minimum--
(1) ensure that the Department of Defense receives advice
on systems architecture and systems engineering matters with
respect to major weapon systems from federally funded research
and development centers or other sources independent of the
prime contractor;
(2) require that a contract for the performance of systems
engineering and technical assistance (SETA) functions with
regard to a major weapon system contains a provision
prohibiting the contractor or any affiliate of the contractor
from having a direct financial interest in the development or
construction of the weapon system or any component thereof;
(3) provide for an exception to the requirement in
paragraph (2) for an affiliate that is separated from the
contractor by structural mechanisms, approved by the Secretary
of Defense, that are similar to those required for special
security agreements under rules governing foreign ownership,
control, or influence over United States companies that have
access to classified information, including, at a minimum--
(A) establishment of the affiliate as a separate
business entity, geographically separated from related
entities, with its own employees and management and
restrictions on transfers for personnel;
(B) a governing board for the affiliate that has
organizational separation from related entities and
governance procedures that require the board to act
solely in the interest of the affiliate, without regard
to the interests of related entities, except in
specified circumstances;
(C) complete informational separation, including
the execution of non-disclosure agreements;
(D) initial and recurring training on
organizational conflicts of interest and protections
against organizational conflicts of interest; and
(E) annual compliance audits in which Department of
Defense personnel are authorized to participate;
(4) prohibit the use of the exception in paragraph (3) for
any category of systems engineering and technical assistance
functions (including, but not limited to, advice on source
selection matters) for which the potential for an
organizational conflict of interest or the appearance of an
organizational conflict of interest makes mitigation in
accordance with that paragraph an inappropriate approach;
(5) authorize waiver of the requirement in paragraph (2) in
cases in which the agency head determines in writing that--
(A) the financial interest of the contractor or its
affiliate in the development or construction of the
weapon system is not substantial and does not include a
prime contract, a first-tier subcontract, or a joint
venture or similar relationship with a prime contractor
or first-tier subcontractor; or
(B) the contractor--
(i) has unique systems engineering
capabilities that are not available from other
sources;
(ii) has taken appropriate actions to
mitigate any organizational conflict of
interest; and
(iii) has made a binding commitment to
comply with the requirement in paragraph (2) by
not later than January 1, 2011; and
(6) provide for fair and objective ``make-buy'' decisions
by the prime contractor on a major weapon system by--
(A) 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 the weapon system;
(B) providing for government oversight 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;
(C) authorizing program managers to disapprove the
determination by a prime contractor to conduct
development or construction in-house rather than
through a subcontract in cases in which--
(i) the prime contractor fails to give full
and fair consideration to qualified sources
other than the prime contractor; or
(ii) implementation of the determination by
the prime contractor is likely to undermine
future competition or the defense industrial
base; and
(D) providing for the consideration of prime
contractors ``make-buy'' decisions in past performance
evaluations.
(c) Organizational Conflict of Interest Review Board.--
(1) Establishment required.--Not later than 90 days after
the date of the enactment of this Act, the Secretary of Defense
shall establish within the Department of Defense a board to be
known as the ``Organizational Conflict of Interest Review
Board''.
(2) Duties.--The Board shall have the following duties:
(A) To advise the Under Secretary of Defense for
Acquisition, Technology, and Logistics on policies
relating to organizational conflicts of interest in the
acquisition of major weapon systems.
(B) To advise program managers on steps to comply
with the requirements of the revised regulations
required by this section and to address organizational
conflicts of interest in the acquisition of major
weapon systems.
(C) To advise appropriate officials of the
Department on organizational conflicts of interest
arising in proposed mergers of defense contractors.
(d) Major Weapon System Defined.--In this section, the term ``major
weapon system'' has the meaning given that term in section 2379(d) of
title 10, United States Code.
SEC. 206. AWARDS FOR DEPARTMENT OF DEFENSE PERSONNEL FOR EXCELLENCE IN
THE ACQUISITION OF PRODUCTS AND SERVICES.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of Defense shall commence carrying
out a program to recognize excellent performance by individuals and
teams of members of the Armed Forces and civilian personnel of the
Department of Defense in the acquisition of products and services for
the Department of Defense.
(b) Elements.--The program required by subsection (a) shall include
the following:
(1) Procedures for the nomination by the personnel of the
military departments and the Defense Agencies of individuals
and teams of members of the Armed Forces and civilian personnel
of the Department of Defense for eligibility for recognition
under the program.
(2) Procedures for the evaluation of nominations for
recognition under the program by one or more panels of
individuals from the government, academia, and the private
sector who have such expertise, and are appointed in such
manner, as the Secretary shall establish for purposes of the
program.
(c) Award of Cash Bonuses.--As part of the program required by
subsection (a), the Secretary may award to any individual recognized
pursuant to the program a cash bonus authorized by any other provision
of law to the extent that the performance of such individual so
recognized warrants the award of such bonus under such provision of
law.
SEC. 207. EARNED VALUE MANAGEMENT.
(a) Enhanced Tracking of Contractor Performance.--Not later than
180 days after the date of the enactment of this Act, the Under
Secretary of Defense for Acquisition, Technology, and Logistics shall
review the existing guidance and, as necessary, prescribe additional
guidance governing the implementation of the Earned Value Management
(EVM) requirements and reporting for contracts to ensure that the
Department of Defense--
(1) applies uniform EVM standards to reliably and
consistently measure contract or project performance;
(2) applies such standards to establish appropriate
baselines at the award of a contract or commencement of a
program, whichever is earlier;
(3) ensures that personnel responsible for administering
and overseeing EVM systems have the training and qualifications
needed to perform this function; and
(4) has appropriate mechanisms in place to ensure that
contractors establish and use approved EVM systems.
(b) Enforcement Mechanisms.--For the purposes of subsection (a)(4),
mechanisms to ensure that contractors establish and use approved EVM
systems shall include--
(1) consideration of the quality of the contractors' EVM
systems and the timeliness of the contractors' EVM reporting in
any past performance evaluation for a contract that includes an
EVM requirement; and
(2) increased government oversight of the cost, schedule,
scope, and performance of contractors that do not have approved
EVM systems in place.
SEC. 208. EXPANSION OF NATIONAL SECURITY OBJECTIVES OF THE NATIONAL
TECHNOLOGY AND INDUSTRIAL BASE.
(a) In General.--Subsection (a) of section 2501 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) Notification of Congress Upon Termination of Mdaps of Effects
on National Security Objectives.--Such section is further amended by
adding at the end the following new subsection:
``(c) Notification of Congress Upon Termination of Major Defense
Acquisition Program of Effects on Objectives.--(1) Upon the termination
of a major defense acquisition program, the Secretary of Defense shall
notify Congress of the effects of such termination on the national
security objectives for the national technology and industrial base set
forth in subsection (a), and the measures, if any, that have been taken
or should be taken to mitigate those effects.
``(2) In this subsection, the term `major defense acquisition
program' has the meaning given that term in section 2430 of this
title.''.
SEC. 209. PLAN FOR ELIMINATION OF WEAKNESSES IN OPERATIONS THAT HINDER
CAPACITY TO ASSEMBLE AND ASSESS RELIABLE COST INFORMATION
ON ACQUIRED ASSETS UNDER MAJOR DEFENSE ACQUISITION
PROGRAMS.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the Chief Management Officer of the Department
of Defense shall submit to Congress a report setting forth a plan to
identify and address weaknesses in operations that hinder the capacity
to assemble and assess reliable cost information on the systems and
assets to be acquired under major defense acquisition programs.
(b) Elements.--The report required under subsection (a) shall
include the following:
(1) Mechanisms to identify any weaknesses in operations
under major defense acquisition programs that hinder the
capacity to assemble and assess reliable cost information on
the systems and assets to be acquired under such programs in
accordance with applicable accounting standards.
(2) Mechanisms to address weaknesses in operations under
major defense acquisition programs identified pursuant to the
utilization of the mechanisms set forth under paragraph (1).
(3) A description of the proposed implementation of the
mechanisms set forth pursuant to paragraph (2) to address the
weaknesses described in that paragraph, including--
(A) the actions to be taken to implement such
mechanisms;
(B) a schedule for carrying out such mechanisms;
and
(C) metrics for assessing the progress made in
carrying out such mechanisms.
(4) A description of the organization and resources
required to carry out mechanisms set forth pursuant to
paragraphs (1) and (2).
(5) In the case of the financial management practices of
each military department applicable to major defense
acquisition programs--
(A) a description of any weaknesses in such
practices; and
(B) a description of the actions to be taken to
remedy such weaknesses.
(c) Consultation.--
(1) In general.--In preparing the report required by
subsection (a), the Chief Management Officer of the Department
of Defense shall seek and consider input from each of the
following:
(A) The Chief Management Officer of the Department
of the Army.
(B) The Chief Management Officer of the Department
of the Navy.
(C) The Chief Management Officer of the Department
of the Air Force.
(2) Financial management practices.--In preparing for the
report required by subsection (a) the matters covered by
subsection (b)(5) with respect to a particular military
department, the Chief Management Officer of the Department of
Defense shall consult specifically with the Chief Management
Officer of the military department concerned.
Passed the Senate May 7, 2009.
Attest:
Secretary.
111th CONGRESS
1st Session
S. 454
_______________________________________________________________________
AN ACT
To improve the organization and procedures of the Department of Defense
for the acquisition of major weapon systems, and for other purposes.