II 112th CONGRESS 1st Session S. 1694 IN THE SENATE OF THE UNITED STATES October 12, 2011 Mr. McCain (for himself and Ms. Ayotte) introduced the following bill; which was read twice and referred to the Committee on Armed Services A BILL To limit the use of cost-type contracts by the Department of Defense for major defense acquisition programs.

1.

Short title

This Act may be cited as the Defense Cost-Type Contracting Reform Act of 2011.

2.

Limitation on use of cost-type contracts

(a)

Prohibition with respect to production of major defense acquisition programs

Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense shall modify the acquisition regulations of the Department of Defense to prohibit the Department from entering into cost-type contracts for the production of major defense acquisition programs (MDAPs). (b)

Conditions with respect to development of major defense acquisition programs

Section 818(d) of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109–364; 120 Stat. 2329; 10 U.S.C. 2306 note) is amended— (1)in paragraph (1), by striking ; and and inserting a semicolon; (2)in paragraph (2), by striking the period at the end and inserting ; and; and (3)by adding at the end the following new paragraphs: (3)all reasonable efforts have been made to define the requirements sufficiently to allow for the use of a fixed-price contract for the development of the major defense acquisition program; and (4)despite these efforts, the Department of Defense cannot define requirements sufficiently to allow for the use of a fixed-price contract for the development of the major defense acquisition program. . (c)

Reporting of cost-Type development contracts

Not later than 30 business days before issuing a solicitation for the development of a major defense acquisition program, the Secretary of Defense shall submit to the Committee on Armed Services and the Committee on Appropriations of the Senate and the Committee on Armed Services and the Committee on Appropriations of the House of Representatives notice of the proposed award and the written determinations required under paragraphs (1) and (4) of section 818(d) of the John Warner National Defense Authorization Act for Fiscal Year 2007, as amended by subsection (b), and the reasons supporting the determinations. (d)

Definitions

In this section: (1)

Major defense acquisition program

The term major defense acquisition program has the meaning given the term in section 2430(a) of title 10, United States Code. (2)

Production of a major defense acquisition program

The term production of a major defense acquisition program means the production, either on a low-rate initial production or full-rate production basis, and deployment of a major system that is intended to achieve operational capability that satisfies mission needs, or any activity otherwise defined as Milestone C, or Key Decision Point C in the case of a space program, under Department of Defense Instruction 5000.02 or related authorities. (3)

Development of a major defense acquisition program

The term development of a major defense acquisition program means the development of a major defense acquisition program or related increment of capability, the completion of full system integration, the development of an affordable and executable manufacturing process, the demonstration of system integration, interoperability, safety, and utility, or any activity otherwise defined as Milestone B, or Key Decision Point B in the case of a space program, under Department of Defense Instruction 5000.02 or related authorities.