[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 454 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 454

To improve the organization and procedures of the Department of Defense 
  for the acquisition of major weapon systems, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 23, 2009

 Mr. Levin (for himself and Mr. McCain) introduced the following bill; 
  which was read twice and referred to the Committee on Armed Services

_______________________________________________________________________

                                 A BILL


 
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. Congressional defense committees.
                   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.
                      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 for major defense acquisition 
                            programs.
Sec. 203. Maximization of 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. 2. CONGRESSIONAL DEFENSE COMMITTEES.

    In this Act, the term ``congressional defense committees'' has the 
meaning given that term in section 101(a)(16) 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, and maintainability as an 
                integral part of design and development; and
                    (C) systems engineering requirements, including 
                reliability, availability, and maintainability 
                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 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.
    ``(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;
            ``(2) monitor and review the developmental test and 
        evaluation activities 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;
            ``(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) The Director of Developmental Test and Evaluation shall 
submit to Congress each year a report on the developmental test and 
evaluation activities of the Department of Defense during the preceding 
year.''.
            (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 amendment.--Section 196(f) of such title 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) 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 
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 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.

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 and require the 
        disclosure of all such confidence levels;
            ``(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--
                    ``(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.
    ``(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.
    ``(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.''.
    (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.
            (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 2306b(i)(1)(B) of title 10, United States Code, 
        is amended by striking ``Cost Analysis Improvement Group of the 
        Department of Defense'' and inserting ``Director of Independent 
        Cost Assessment''.
            (2) 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''.
            (3) 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''.
            (4) 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''.
            (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 
                Independent Cost Assessment; and''.
            (6) 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''.

SEC. 105. ROLE OF THE COMMANDERS OF THE COMBATANT COMMANDS IN 
              IDENTIFYING JOINT MILITARY REQUIREMENTS.

    Section 181(d) of title 10, United States Code, is amended--
            (1) by inserting ``(1)'' before ``The Under Secretary''; 
        and
            (2) by adding at the end the following new paragraph:
    ``(2) The Council shall seek and consider input from the commanders 
of the combatant commands in carrying out its mission under paragraphs 
(1) and (2) of subsection (b) and in conducting periodic reviews in 
accordance with the requirements of subsection (e).''.

                      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 
                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;''.

SEC. 202. PRELIMINARY DESIGN REVIEW FOR MAJOR DEFENSE ACQUISITION 
              PROGRAMS.

    Section 2366b(a) of title 10, United States Code, is 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).

SEC. 203. MAXIMIZATION OF COMPETITION THROUGHOUT THE LIFE CYCLE OF 
              MAJOR DEFENSE ACQUISITION PROGRAMS.

    (a) Maximization of Competition.--The Secretary of Defense shall 
ensure that the acquisition plan for each major defense acquisition 
program includes measures to maximize competition at both the prime 
contract level and the subcontract level of such program throughout the 
life cycle of such program.
    (b) Measures To Maximize Competition.--The measures to maximize 
competition utilized for purposes of subsection (a) may include, but 
are not limited to, measures to achieve the following, where 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, but for such 
        waiver, the Department would be unable to meet critical 
        national security objectives.
            (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, 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 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.
    (d) Major Defense Acquisition Program Defined.--In this section, 
the term ``major defense acquisition program'' has the meaning given 
that term in section 2430 of title 10, United States Code.
    (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 (D);
            (2) by striking subparagraph (B); and
            (3) by inserting after subparagraph (A) the following new 
        subparagraphs (B) and (C):
            ``(B) terminate such acquisition program, 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(g)(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; 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; and
            (3) 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) where appropriate, requiring that program 
                managers, rather than prime contractors, make the 
                determination whether such development or construction 
                should be conducted in-house or through a subcontract; 
                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.
                                 <all>