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

                                                        Calendar No. 45
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, Mr. McCain, Mr. Nelson of Florida, Mr. Carper, 
    Mr. Kaufman, Mr. Nelson of Nebraska, and Mr. Udall of Colorado) 
introduced the following bill; which was read twice and referred to the 
                      Committee on Armed Services

                             April 2, 2009

                Reported by Mr. Levin, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 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,

<DELETED>SECTION 1. SHORT TITLE; TABLE OF CONTENTS.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the ``Weapon 
Systems Acquisition Reform Act of 2009''.</DELETED>
<DELETED>    (b) Table of Contents.--The table of contents for this Act 
is as follows:</DELETED>

<DELETED>Sec. 1. Short title; table of contents.
<DELETED>Sec. 2. Congressional defense committees.
               <DELETED>TITLE I--ACQUISITION ORGANIZATION

<DELETED>Sec. 101. Reports on systems engineering capabilities of the 
                            Department of Defense.
<DELETED>Sec. 102. Director of Developmental Test and Evaluation.
<DELETED>Sec. 103. Assessment of technological maturity of critical 
                            technologies of major defense acquisition 
                            programs by the Director of Defense 
                            Research and Engineering.
<DELETED>Sec. 104. Director of Independent Cost Assessment.
<DELETED>Sec. 105. Role of the commanders of the combatant commands in 
                            identifying joint military requirements.
                 <DELETED>TITLE II--ACQUISITION POLICY

<DELETED>Sec. 201. Consideration of trade-offs among cost, schedule, 
                            and performance in the acquisition of major 
                            weapon systems.
<DELETED>Sec. 202. Preliminary design review for major defense 
                            acquisition programs.
<DELETED>Sec. 203. Maximization of competition throughout the life 
                            cycle of major defense acquisition 
                            programs.
<DELETED>Sec. 204. Critical cost growth in major defense acquisition 
                            programs.
<DELETED>Sec. 205. Organizational conflicts of interest in the 
                            acquisition of major weapon systems.
<DELETED>Sec. 206. Awards for Department of Defense personnel for 
                            excellence in the acquisition of products 
                            and services.

<DELETED>SEC. 2. CONGRESSIONAL DEFENSE COMMITTEES.</DELETED>

<DELETED>    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.</DELETED>

          <DELETED>TITLE I--ACQUISITION ORGANIZATION</DELETED>

<DELETED>SEC. 101. REPORTS ON SYSTEMS ENGINEERING CAPABILITIES OF THE 
              DEPARTMENT OF DEFENSE.</DELETED>

<DELETED>    (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:</DELETED>
        <DELETED>    (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--</DELETED>
                <DELETED>    (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;</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (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.</DELETED>
        <DELETED>    (2) A description of the actions that such 
        military department has taken, or plans to take, to--</DELETED>
                <DELETED>    (A) establish needed development planning 
                and systems engineering organizations and processes; 
                and</DELETED>
                <DELETED>    (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.</DELETED>
<DELETED>    (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:</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>

<DELETED>SEC. 102. DIRECTOR OF DEVELOPMENTAL TEST AND 
              EVALUATION.</DELETED>

<DELETED>    (a) Establishment of Position.--</DELETED>
        <DELETED>    (1) In general.--Chapter 4 of title 10, United 
        States Code, is amended by inserting after section 139b the 
        following new section:</DELETED>
<DELETED>``Sec. 139c. Director of Developmental Test and 
              Evaluation</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(c) The Director of Developmental Test and Evaluation 
shall--</DELETED>
        <DELETED>    ``(1) develop policies and guidance for the 
        developmental test and evaluation activities of the Department 
        of Defense;</DELETED>
        <DELETED>    ``(2) monitor and review the developmental test 
        and evaluation activities of the Department of 
        Defense;</DELETED>
        <DELETED>    ``(3) review and approve the test and evaluation 
        master plan for each major defense acquisition program of the 
        Department of Defense;</DELETED>
        <DELETED>    ``(4) supervise the activities of the Director of 
        the Department of Defense Test Resource Management Center under 
        section 196 of this title;</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.''.</DELETED>
        <DELETED>    (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:</DELETED>

<DELETED>``139c. Director of Developmental Test and Evaluation.''.
        <DELETED>    (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.''.</DELETED>
<DELETED>    (b) Reports on Developmental Testing Organizations and 
Personnel.--</DELETED>
        <DELETED>    (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:</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (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.</DELETED>
        <DELETED>    (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).</DELETED>

<DELETED>SEC. 103. ASSESSMENT OF TECHNOLOGICAL MATURITY OF CRITICAL 
              TECHNOLOGIES OF MAJOR DEFENSE ACQUISITION PROGRAMS BY THE 
              DIRECTOR OF DEFENSE RESEARCH AND ENGINEERING.</DELETED>

<DELETED>    (a) Assessment by Director of Defense Research and 
Engineering.--</DELETED>
        <DELETED>    (1) In general.--Section 139a of title 10, United 
        States Code, is amended by adding at the end the following new 
        subsection:</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.''.</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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:</DELETED>
        <DELETED>    (1) The requirements under the amendment made by 
        subsection (a).</DELETED>
        <DELETED>    (2) The technological maturity assessments 
        required by section 2366b(a) of title 10, United States Code, 
        as amended by section 202 of this Act.</DELETED>
        <DELETED>    (3) The requirements of Department of Defense 
        Instruction 5000, as revised.</DELETED>

<DELETED>SEC. 104. DIRECTOR OF INDEPENDENT COST ASSESSMENT.</DELETED>

<DELETED>    (a) Director of Independent Cost Assessment.--</DELETED>
        <DELETED>    (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:</DELETED>
<DELETED>``Sec. 139d. Director of Independent Cost Assessment</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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--</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(3) establish guidance on confidence levels for 
        cost estimates on major defense acquisition programs and 
        require the disclosure of all such confidence levels;</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(5) conduct independent cost estimates and cost 
        analyses for major defense acquisition programs and major 
        automated information system programs--</DELETED>
                <DELETED>    ``(A) in advance of--</DELETED>
                        <DELETED>    ``(i) any certification under 
                        section 2366a or 2366b of this title;</DELETED>
                        <DELETED>    ``(ii) any certification under 
                        section 2433(e)(2) of this title; and</DELETED>
                        <DELETED>    ``(iii) any report under section 
                        2445c(f) of this title; and</DELETED>
                <DELETED>    ``(B) whenever necessary to ensure that an 
                estimate or analysis under paragraph (4) is unbiased, 
                fair, and reliable.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(3) The Secretary may comment on any report of the 
Director to Congress under this subsection.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.''.</DELETED>
        <DELETED>    (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:</DELETED>

<DELETED>``139d. Director of Independent Cost Assessment.''.
<DELETED>    (b) Report on Monitoring of Operating and Support Costs 
for MDAPs.--</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (d) Conforming Amendments.--</DELETED>
        <DELETED>    (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''.</DELETED>
        <DELETED>    (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''.</DELETED>
        <DELETED>    (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''.</DELETED>
        <DELETED>    (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''.</DELETED>
        <DELETED>    (5) Subparagraph (A) of section 2434(b)(1) of such 
        title is amended to read as follows:</DELETED>
                <DELETED>    ``(A) be prepared or approved by the 
                Director of Independent Cost Assessment; 
                and''.</DELETED>
        <DELETED>    (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''.</DELETED>

<DELETED>SEC. 105. ROLE OF THE COMMANDERS OF THE COMBATANT COMMANDS IN 
              IDENTIFYING JOINT MILITARY REQUIREMENTS.</DELETED>

<DELETED>    Section 181(d) of title 10, United States Code, is 
amended--</DELETED>
        <DELETED>    (1) by inserting ``(1)'' before ``The Under 
        Secretary''; and</DELETED>
        <DELETED>    (2) by adding at the end the following new 
        paragraph:</DELETED>
<DELETED>    ``(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).''.</DELETED>

            <DELETED>TITLE II--ACQUISITION POLICY</DELETED>

<DELETED>SEC. 201. CONSIDERATION OF TRADE-OFFS AMONG COST, SCHEDULE, 
              AND PERFORMANCE IN THE ACQUISITION OF MAJOR WEAPON 
              SYSTEMS.</DELETED>

<DELETED>    (a) Consideration of Trade-Offs.--</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) Elements.--The mechanisms required under this 
        subsection shall ensure, at a minimum, that--</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (b) Duties of Joint Requirements Oversight Council.--
Section 181(b)(1) of title 10, United States Code, is amended--
</DELETED>
        <DELETED>    (1) in subparagraph (A), by striking ``and'' at 
        the end;</DELETED>
        <DELETED>    (2) in subparagraph (B), by striking the period at 
        the end and inserting ``; and''; and</DELETED>
        <DELETED>    (3) by adding at the end the following new 
        subparagraph:</DELETED>
                <DELETED>    ``(C) in ensuring the consideration of 
                trade-offs among cost, schedule and performance for 
                joint military requirements;''.</DELETED>

<DELETED>SEC. 202. PRELIMINARY DESIGN REVIEW FOR MAJOR DEFENSE 
              ACQUISITION PROGRAMS.</DELETED>

<DELETED>    Section 2366b(a) of title 10, United States Code, is 
amended--</DELETED>
        <DELETED>    (1) in paragraph (1), by striking ``and'' at the 
        end;</DELETED>
        <DELETED>    (2) by redesignating paragraph (2) as paragraph 
        (3);</DELETED>
        <DELETED>    (3) by inserting after paragraph (1) the following 
        new paragraph (2):</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    (4) in paragraph (3), as redesignated by paragraph 
        (2) of this section--</DELETED>
                <DELETED>    (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'';</DELETED>
                <DELETED>    (B) by striking subparagraph (E); 
                and</DELETED>
                <DELETED>    (C) by redesignating subparagraph (F) as 
                subparagraph (E).</DELETED>

<DELETED>SEC. 203. MAXIMIZATION OF COMPETITION THROUGHOUT THE LIFE 
              CYCLE OF MAJOR DEFENSE ACQUISITION PROGRAMS.</DELETED>

<DELETED>    (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.</DELETED>
<DELETED>    (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:</DELETED>
        <DELETED>    (1) Competitive prototyping.</DELETED>
        <DELETED>    (2) Dual-sourcing.</DELETED>
        <DELETED>    (3) Funding of a second source for 
        interchangeable, next-generation prototype systems or 
        subsystems.</DELETED>
        <DELETED>    (4) Utilization of modular, open architectures to 
        enable competition for upgrades.</DELETED>
        <DELETED>    (5) Periodic competitions for subsystem 
        upgrades.</DELETED>
        <DELETED>    (6) Licensing of additional suppliers.</DELETED>
        <DELETED>    (7) Requirements for Government oversight or 
        approval of make or buy decisions to ensure competition at the 
        subsystem level.</DELETED>
        <DELETED>    (8) Periodic system or program reviews to address 
        long-term competitive effects of program decisions.</DELETED>
        <DELETED>    (9) Consideration of competition at the 
        subcontract level and in make or buy decisions as a factor in 
        proposal evaluations.</DELETED>
<DELETED>    (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:</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>

<DELETED>SEC. 204. CRITICAL COST GROWTH IN MAJOR DEFENSE ACQUISITION 
              PROGRAMS.</DELETED>

<DELETED>    (a) Authorized Actions in Event of Critical Cost Growth.--
Section 2433(e)(2) of title 10, United States Code, is amended--
</DELETED>
        <DELETED>    (1) by redesignating subparagraph (C) as 
        subparagraph (D);</DELETED>
        <DELETED>    (2) by striking subparagraph (B); and</DELETED>
        <DELETED>    (3) by inserting after subparagraph (A) the 
        following new subparagraphs (B) and (C):</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(C) if the program is not terminated--</DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(I) such acquisition program is 
                        essential to national security;</DELETED>
                        <DELETED>    ``(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;</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(IV) the management structure 
                        for the acquisition program is adequate to 
                        manage and control program acquisition unit 
                        cost or procurement unit cost;</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(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''.</DELETED>
<DELETED>    (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''.</DELETED>

<DELETED>SEC. 205. ORGANIZATIONAL CONFLICTS OF INTEREST IN THE 
              ACQUISITION OF MAJOR WEAPON SYSTEMS.</DELETED>

<DELETED>    (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.</DELETED>
<DELETED>    (b) Elements.--The revised regulations required by 
subsection (a) shall, at a minimum--</DELETED>
        <DELETED>    (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;</DELETED>
        <DELETED>    (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</DELETED>
        <DELETED>    (3) provide for fair and objective ``make-buy'' 
        decisions by the prime contractor on a major weapon system by--
        </DELETED>
                <DELETED>    (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;</DELETED>
                <DELETED>    (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;</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (D) providing for the consideration of 
                prime contractors ``make-buy'' decisions in past 
                performance evaluations.</DELETED>
<DELETED>    (c) Organizational Conflict of Interest Review Board.--
</DELETED>
        <DELETED>    (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''.</DELETED>
        <DELETED>    (2) Duties.--The Board shall have the following 
        duties:</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (C) To advise appropriate officials of the 
                Department on organizational conflicts of interest 
                arising in proposed mergers of defense 
                contractors.</DELETED>
<DELETED>    (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.</DELETED>

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

<DELETED>    (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.</DELETED>
<DELETED>    (b) Elements.--The program required by subsection (a) 
shall include the following:</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>

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.

                      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. 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 
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.

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 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.
    ``(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.''.
            (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.
            (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''.

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

    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).''.

                      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) 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.
    (d) 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) 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(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; 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 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.
                                                        Calendar No. 45

111th CONGRESS

  1st Session

                                 S. 454

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                             April 2, 2009

                       Reported with an amendment