[Congressional Record (Bound Edition), Volume 155 (2009), Part 10]
[House]
[Pages 13047-13057]
[From the U.S. Government Publishing Office, www.gpo.gov]




 CONFERENCE REPORT ON S. 454, WEAPON SYSTEMS ACQUISITION REFORM ACT OF 
                                  2009

  Mr. SKELTON submitted the following conference report and statement 
on the Senate bill (S. 454) to improve the organization and procedures 
of the Department of Defense for the acquisition of major weapon 
systems, and for other purposes:

                  Conference Report (H. Rept. 111-124)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the House to the bill (S. 
     454), to improve the organization and procedures of the 
     Department of Defense for the acquisition of major weapon 
     systems, and for other purposes, having met, after full and 
     free conference, have agreed to recommend and do recommend to 
     their respective Houses as follows:
       That the Senate recede from its disagreement to the 
     amendment of the House and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the House 
     amendment, insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

                   TITLE I--ACQUISITION ORGANIZATION

Sec. 101. Cost assessment and program evaluation.
Sec. 102. Directors of Developmental Test and Evaluation and Systems 
              Engineering.
Sec. 103. Performance assessments and root cause analyses for major 
              defense acquisition programs.
Sec. 104. Assessment of technological maturity of critical technologies 
              of major defense acquisition programs by the Director of 
              Defense Research and Engineering.
Sec. 105. Role of the commanders of the combatant commands in 
              identifying joint military requirements.

                      TITLE II--ACQUISITION POLICY

Sec. 201. Consideration of trade-offs among cost, schedule, and 
              performance objectives in Department of Defense 
              acquisition programs.
Sec. 202. Acquisition strategies to ensure competition throughout the 
              lifecycle of major defense acquisition programs.
Sec. 203. Prototyping requirements for major defense acquisition 
              programs.
Sec. 204. Actions to identify and address systemic problems in major 
              defense acquisition programs prior to Milestone B 
              approval.
Sec. 205. Additional requirements for certain major defense acquisition 
              programs.
Sec. 206. Critical cost growth in major defense acquisition programs.
Sec. 207. Organizational conflicts of interest in major defense 
              acquisition programs.

              TITLE III--ADDITIONAL ACQUISITION PROVISIONS

Sec. 301. Awards for Department of Defense personnel for excellence in 
              the acquisition of products and services.
Sec. 302. Earned value management.
Sec. 303. Expansion of national security objectives of the national 
              technology and industrial base.
Sec. 304. Comptroller General of the United States reports on costs and 
              financial information regarding major defense acquisition 
              programs.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) The term ``congressional defense committees'' has the 
     meaning given that term in section 101(a)(16) of title 10, 
     United States Code.
       (2) The term ``major defense acquisition program'' has the 
     meaning given that term in section 2430 of title 10, United 
     States Code.
       (3) The term ``major weapon system'' has the meaning given 
     that term in section 2379(d) of title 10, United States Code.
                   TITLE I--ACQUISITION ORGANIZATION

     SEC. 101. COST ASSESSMENT AND PROGRAM EVALUATION.

       (a) Director of Cost Assessment and Program Evaluation.--
       (1) In general.--Chapter 4 of title 10, United States Code, 
     is amended by inserting after section 139b the following new 
     section:

     ``Sec. 139c. Director of Cost Assessment and Program 
       Evaluation

       ``(a) Appointment.--There is a Director of Cost Assessment 
     and Program Evaluation in the Department of Defense, 
     appointed by the President, by and with the advice and 
     consent of the Senate.
       ``(b) Independent Advice to Secretary of Defense.--(1) The 
     Director of Cost Assessment and Program Evaluation is the 
     principal advisor to the Secretary of Defense and other 
     senior officials of the Department of Defense, and shall 
     provide independent analysis and advice to such officials, on 
     the following matters:
       ``(A) Matters assigned to the Director pursuant to this 
     section and section 2334 of this title.
       ``(B) Matters assigned to the Director by the Secretary 
     pursuant to section 113 of this title.

[[Page 13048]]

       ``(2) The Director may communicate views on matters within 
     the responsibility of the Director directly to the Secretary 
     of Defense and the Deputy Secretary of Defense without 
     obtaining the approval or concurrence of any other official 
     within the Department of Defense.
       ``(c) Deputy Directors.--There are two Deputy Directors 
     within the Office of the Director of Cost Assessment and 
     Program Evaluation, as follows:
       ``(1) The Deputy Director for Cost Assessment.
       ``(2) The Deputy Director for Program Evaluation.
       ``(d) Responsibilities.--The Director of Cost Assessment 
     and Program Evaluation shall serve as the principal official 
     within the senior management of the Department of Defense for 
     the following:
       ``(1) Cost estimation and cost analysis for acquisition 
     programs of the Department of Defense, and carrying out the 
     duties assigned pursuant to section 2334 of this title.
       ``(2) Analysis and advice on matters relating to the 
     planning and programming phases of the Planning, Programming, 
     Budgeting and Execution system, and the preparation of 
     materials and guidance for such system, as directed by the 
     Secretary of Defense, working in coordination with the Under 
     Secretary of Defense (Comptroller).
       ``(3) Analysis and advice for resource discussions relating 
     to requirements under consideration in the Joint Requirements 
     Oversight Council pursuant to section 181 of this title.
       ``(4) Formulation of study guidance for analyses of 
     alternatives for major defense acquisition programs and 
     performance of such analyses, as directed by the Secretary of 
     Defense
       ``(5) Review, analysis, and evaluation of programs for 
     executing approved strategies and policies, ensuring that 
     information on programs is presented accurately and 
     completely, and assessing the effect of spending by the 
     Department of Defense on the United States economy.
       ``(6) Assessments of special access and compartmented 
     intelligence programs, in coordination with the Under 
     Secretary of Defense for Acquisition, Technology, and 
     Logistics and the Under Secretary of Defense for Intelligence 
     and in accordance with applicable policies.
       ``(7) Assessments of alternative plans, programs, and 
     policies with respect to the acquisition programs of the 
     Department of Defense.
       ``(8) Leading the development of improved analytical skills 
     and competencies within the cost assessment and program 
     evaluation workforce of the Department of Defense and 
     improved tools, data, and methods to promote performance, 
     economy, and efficiency in analyzing national security 
     planning and the allocation of defense resources.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 4 of such title is amended by inserting 
     after the item relating to section 139b the following new 
     item:

``139c. Director of Cost Assessment and Program Evaluation.''.
       (3) Executive schedule level iv.--Section 5315 of title 5, 
     United States Code, is amended by inserting after the item 
     relating to the Director of Operational Test and Evaluation, 
     Department of Defense the following new item:
       ``Director of Cost Assessment and Program Evaluation, 
     Department of Defense.''.
       (b) Independent Cost Estimation and Cost Analysis.--
       (1) In general.--Chapter 137 of title 10, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 2334. Independent cost estimation and cost analysis

       ``(a) In General.--The Director of Cost Assessment and 
     Program Evaluation shall ensure that the cost estimation and 
     cost analysis processes of the Department of Defense provide 
     accurate information and realistic estimates of cost for the 
     acquisition programs of the Department of Defense. In 
     carrying out that responsibility, the Director shall--
       ``(1) prescribe, by authority of the Secretary of Defense, 
     policies and procedures for the conduct of cost estimation 
     and cost analysis for the acquisition programs of the 
     Department of Defense;
       ``(2) provide guidance to and consult with the Secretary of 
     Defense, the Under Secretary of Defense for Acquisition, 
     Technology, and Logistics, the Under Secretary of Defense 
     (Comptroller), the Secretaries of the military departments, 
     and the heads of the Defense Agencies with respect to cost 
     estimation in the Department of Defense in general and with 
     respect to specific cost estimates and cost analyses to be 
     conducted in connection with a major defense acquisition 
     program under chapter 144 of this title or a major automated 
     information system program under chapter 144A of this title;
       ``(3) issue guidance relating to the proper selection of 
     confidence levels in cost estimates generally, and 
     specifically, for the proper selection of confidence levels 
     in cost estimates for major defense acquisition programs and 
     major automated information system programs;
       ``(4) issue guidance relating to full consideration of 
     life-cycle management and sustainability costs in major 
     defense acquisition programs and major automated information 
     system programs;
       ``(5) review all cost estimates and cost analyses conducted 
     in connection with major defense acquisition programs and 
     major automated information system programs;
       ``(6) conduct independent cost estimates and cost analyses 
     for major defense acquisition programs and major automated 
     information system programs for which the Under Secretary of 
     Defense for Acquisition, Technology, and Logistics is the 
     Milestone Decision Authority--
       ``(A) in advance of--
       ``(i) any certification under section 2366a or 2366b of 
     this title;
       ``(ii) any decision to enter into low-rate initial 
     production or full-rate production;
       ``(iii) any certification under section 2433a of this 
     title; and
       ``(iv) any report under section 2445c(f) of this title; and
       ``(B) at any other time considered appropriate by the 
     Director or upon the request of the Under Secretary of 
     Defense for Acquisition, Technology, and Logistics; and
       ``(7) periodically assess and update the cost indexes used 
     by the Department to ensure that such indexes have a sound 
     basis and meet the Department's needs for realistic cost 
     estimation.
       ``(b) Review of Cost Estimates, Cost Analyses, and Records 
     of the Military Departments and Defense Agencies.--The 
     Secretary of Defense shall ensure that the Director of Cost 
     Assessment and Program Evaluation--
       ``(1) promptly receives the results of all cost estimates 
     and cost analyses conducted by the military departments and 
     Defense Agencies, and all studies conducted by the military 
     departments and Defense Agencies in connection with such cost 
     estimates and cost analyses, for major defense acquisition 
     programs and major automated information system programs of 
     the military departments and Defense Agencies; and
       ``(2) has timely access to any records and data in the 
     Department of Defense (including the records and data of each 
     military department and Defense Agency and including 
     classified and proprietary information) that the Director 
     considers necessary to review in order to carry out any 
     duties under this section.
       ``(c) Participation, Concurrence, and Approval in Cost 
     Estimation.--The Director of Cost Assessment and Program 
     Evaluation may--
       ``(1) participate in the discussion of any discrepancies 
     between an independent cost estimate and the cost estimate of 
     a military department or Defense Agency for a major defense 
     acquisition program or major automated information system 
     program of the Department of Defense;
       ``(2) comment on deficiencies in the methodology or 
     execution of any cost estimate or cost analysis developed by 
     a military department or Defense Agency for a major defense 
     acquisition program or major automated information system 
     program;
       ``(3) concur in the choice of a cost estimate within the 
     baseline description or any other cost estimate (including 
     the confidence level for any such cost estimate) for use at 
     any event specified in subsection (a)(6); and
       ``(4) participate in the consideration of any decision to 
     request authorization of a multiyear procurement contract for 
     a major defense acquisition program.
       ``(d) Disclosure of Confidence Levels for Baseline 
     Estimates of Major Defense Acquisition Programs.--The 
     Director of Cost Assessment and Program Evaluation, and the 
     Secretary of the military department concerned or the head of 
     the Defense Agency concerned (as applicable), shall each--
       ``(1) disclose in accordance with paragraph (2) the 
     confidence level used in establishing a cost estimate for a 
     major defense acquisition program or major automated 
     information system program, the rationale for selecting such 
     confidence level, and, if such confidence level is less than 
     80 percent, the justification for selecting a confidence 
     level of less than 80 percent; and
       ``(2) include the disclosure required by paragraph (1)--
       ``(A) in any decision documentation approving a cost 
     estimate within the baseline description or any other cost 
     estimate for use at any event specified in subsection (a)(6); 
     and
       ``(B) in the next Selected Acquisition Report pursuant to 
     section 2432 of this title in the case of a major defense 
     acquisition program, or the next quarterly report pursuant to 
     section 2445c of this title in the case of a major automated 
     information system program.
       ``(e) Annual Report on Cost Assessment Activities.--(1) The 
     Director of Cost Assessment and Program Evaluation shall 
     prepare an annual report summarizing the cost estimation and 
     cost analysis activities of the Department of Defense during 
     the previous year and assessing the progress of the 
     Department in improving the accuracy of its cost estimates 
     and analyses. Each report shall include, for the year covered 
     by such report, an assessment of--
       ``(A) the extent to which each of the military departments 
     and Defense Agencies have complied with policies, procedures, 
     and guidance issued by the Director with regard to the 
     preparation of cost estimates for major defense acquisition 
     programs and major automated information systems;
       ``(B) the overall quality of cost estimates prepared by 
     each of the military departments and Defense Agencies for 
     major defense acquisition programs and major automated 
     information system programs; and
       ``(C) any consistent differences in methodology or approach 
     among the cost estimates prepared by the military 
     departments, the Defense Agencies, and the Director.
       ``(2) Each report under this subsection shall be submitted 
     concurrently to the Secretary of Defense, the Under Secretary 
     of Defense for Acquisition, Technology, and Logistics, the 
     Under Secretary of Defense (Comptroller), and the 
     congressional defense committees not later than 10 days after 
     the transmittal to Congress of the budget of the President 
     for the next fiscal year (as submitted pursuant to section 
     1105 of title 31).

[[Page 13049]]

       ``(3)(A) Each report submitted to the congressional defense 
     committees under this subsection shall be submitted in 
     unclassified form, but may include a classified annex.
       ``(B) The Director shall ensure that a report submitted 
     under this subsection does not include any information, such 
     as proprietary or source selection sensitive information, 
     that could undermine the integrity of the acquisition 
     process.
       ``(C) The unclassified version of each report submitted to 
     the congressional defense committees under this subsection 
     shall be posted on an Internet website of the Department of 
     Defense that is available to the public.
       ``(4) The Secretary of Defense may comment on any report of 
     the Director to the congressional defense committees under 
     this subsection.
       ``(f) Staff.--The Secretary of Defense shall ensure that 
     the Director of Cost Assessment and Program Evaluation has 
     sufficient professional staff of military and civilian 
     personnel to enable the Director to carry out the duties and 
     responsibilities of the Director under this section.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 137 of such title is amended by adding 
     at the end the following new item:

``2334. Independent cost estimation and cost analysis.''.
       (c) Transfer of Personnel and Functions.--
       (1) Transfer of functions.--The functions of the Office of 
     Program Analysis and Evaluation of the Department of Defense, 
     including the functions of the Cost Analysis Improvement 
     Group, are hereby transferred to the Office of the Director 
     of Cost Assessment and Program Evaluation.
       (2) Transfer of personnel to deputy director for 
     independent cost assessment.--The personnel of the Cost 
     Analysis Improvement Group are hereby transferred to the 
     Deputy Director for Cost Assessment in the Office of the 
     Director of Cost Assessment and Program Evaluation.
       (3) Transfer of personnel to deputy director for program 
     analysis and evaluation.--The personnel (other than the 
     personnel transferred under paragraph (2)) of the Office of 
     Program Analysis and Evaluation are hereby transferred to the 
     Deputy Director for Program Evaluation in the Office of the 
     Director of Cost Assessment and Program Evaluation.
       (d) Conforming Amendments.--
       (1) Section 181(d) of title 10, United States Code, is 
     amended by striking ``Director of the Office of Program 
     Analysis and Evaluation'' and inserting ``Director of Cost 
     Assessment and Program Evaluation''.
       (2) Section 2306b(i)(1)(B) of such title is amended by 
     striking ``Cost Analysis Improvement Group of the Department 
     of Defense'' and inserting ``Director of Cost Assessment and 
     Program Analysis''.
       (3) Section 2366a(a)(4) of such title is amended by 
     inserting ``, with the concurrence of the Director of Cost 
     Assessment and Program Evaluation,'' after ``has been 
     submitted''.
       (4) Section 2366b(a)(1)(C) of such title is amended by 
     inserting ``, with the concurrence of the Director of Cost 
     Assessment and Program Evaluation,'' after ``have been 
     developed to execute''.
       (5) Subparagraph (A) of section 2434(b)(1) of such title is 
     amended to read as follows:
       ``(A) be prepared or approved by the Director of Cost 
     Assessment and Program Evaluation; and''.
       (6) Section 2445c(f)(3) of such title is amended by 
     striking ``are reasonable'' and inserting ``have been 
     determined, with the concurrence of the Director of Cost 
     Assessment and Program Evaluation, to be reasonable''.
       (e) Report on Monitoring of Operating and Support Costs for 
     Major Defense Acquisition Programs.--
       (1) Report to secretary of defense.--Not later than one 
     year after the date of the enactment of this Act, the 
     Director of Cost Assessment and Program Evaluation under 
     section 139c of title 10 United States Code (as added by 
     subsection (a)), shall review existing systems and methods of 
     the Department of Defense for tracking and assessing 
     operating and support costs on major defense acquisition 
     programs and submit to the Secretary of Defense a report on 
     the finding and recommendations of the Director as a result 
     of the review, including an assessment by the Director of the 
     feasibility and advisability of establishing baselines for 
     operating and support costs under section 2435 of title 10, 
     United States Code.
       (2) Transmittal to congress.--Not later than 30 days after 
     receiving the report required by paragraph (1), the Secretary 
     shall transmit the report to the congressional defense 
     committees, together with any comments on the report the 
     Secretary considers appropriate.

     SEC. 102. DIRECTORS OF DEVELOPMENTAL TEST AND EVALUATION AND 
                   SYSTEMS ENGINEERING.

       (a) In General.--
       (1) Establishment of positions.--Chapter 4 of title 10, 
     United States Code, as amended by section 101(a) of this Act, 
     is further amended by inserting after section 139c the 
     following new section:

     ``Sec. 139d. Director of Developmental Test and Evaluation; 
       Director of Systems Engineering: joint guidance

       ``(a) Director of Developmental Test and Evaluation.--
       ``(1) Appointment.--There is a Director of Developmental 
     Test and Evaluation, who shall be appointed by the Secretary 
     of Defense from among individuals with an expertise in test 
     and evaluation.
       ``(2) Principal advisor for developmental test and 
     evaluation.--The Director shall be the principal advisor to 
     the Secretary of Defense and the Under Secretary of Defense 
     for Acquisition, Technology, and Logistics on developmental 
     test and evaluation in the Department of Defense.
       ``(3) Supervision.--The Director shall be subject to the 
     supervision of the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics and shall report to 
     the Under Secretary.
       ``(4) Coordination with director of systems engineering.--
     The Director of Developmental Test and Evaluation shall 
     closely coordinate with the Director of Systems Engineering 
     to ensure that the developmental test and evaluation 
     activities of the Department of Defense are fully integrated 
     into and consistent with the systems engineering and 
     development planning processes of the Department.
       ``(5) Duties.--The Director shall--
       ``(A) develop policies and guidance for--
       ``(i) the conduct of developmental test and evaluation in 
     the Department of Defense (including integration and 
     developmental testing of software);
       ``(ii) in coordination with the Director of Operational 
     Test and Evaluation, the integration of developmental test 
     and evaluation with operational test and evaluation;
       ``(iii) the conduct of developmental test and evaluation 
     conducted jointly by more than one military department or 
     Defense Agency;
       ``(B) review and approve the developmental test and 
     evaluation plan within the test and evaluation master plan 
     for each major defense acquisition program of the Department 
     of Defense;
       ``(C) monitor and review the developmental test and 
     evaluation activities of the major defense acquisition 
     programs;
       ``(D) provide advocacy, oversight, and guidance to elements 
     of the acquisition workforce responsible for developmental 
     test and evaluation;
       ``(E) periodically review the organizations and 
     capabilities of the military departments with respect to 
     developmental test and evaluation and identify needed changes 
     or improvements to such organizations and capabilities, and 
     provide input regarding needed changes or improvements for 
     the test and evaluation strategic plan developed in 
     accordance with section 196(d) of this title; and
       ``(F) perform such other activities relating to the 
     developmental test and evaluation activities of the 
     Department of Defense as the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics may prescribe.
       ``(6) Access to records.--The Secretary of Defense shall 
     ensure that the Director has access to all records and data 
     of the Department of Defense (including the records and data 
     of each military department and including classified and 
     propriety information, as appropriate) that the Director 
     considers necessary in order to carry out the Director's 
     duties under this subsection.
       ``(7) Concurrent service as director of department of 
     defense test resources management center.--The individual 
     serving as the Director of Developmental Test and Evaluation 
     may also serve concurrently as the Director of the Department 
     of Defense Test Resource Management Center under section 196 
     of this title.
       ``(b) Director of Systems Engineering.--
       ``(1) Appointment.--There is a Director of Systems 
     Engineering, who shall be appointed by the Secretary of 
     Defense from among individuals with an expertise in systems 
     engineering and development planning.
       ``(2) Principal advisor for systems engineering and 
     development planning.--The Director shall be the principal 
     advisor to the Secretary of Defense and the Under Secretary 
     of Defense for Acquisition, Technology, and Logistics on 
     systems engineering and development planning in the 
     Department of Defense.
       ``(3) Supervision.--The Director shall be subject to the 
     supervision of the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics and shall report to 
     the Under Secretary.
       ``(4) Coordination with director of developmental test and 
     evaluation.--The Director of Systems Engineering shall 
     closely coordinate with the Director of Developmental Test 
     and Evaluation to ensure that the developmental test and 
     evaluation activities of the Department of Defense are fully 
     integrated into and consistent with the systems engineering 
     and development planning processes of the Department.
       ``(5) Duties.--The Director shall--
       ``(A) develop policies and guidance for--
       ``(i) the use of systems engineering principles and best 
     practices, generally;
       ``(ii) the use of systems engineering approaches to enhance 
     reliability, availability, and maintainability on major 
     defense acquisition programs;
       ``(iii) the development of systems engineering master plans 
     for major defense acquisition programs including systems 
     engineering considerations in support of lifecycle management 
     and sustainability; and
       ``(iv) the inclusion of provisions relating to systems 
     engineering and reliability growth in requests for proposals;
       ``(B) review and approve the systems engineering master 
     plan for each major defense acquisition program;
       ``(C) monitor and review the systems engineering and 
     development planning activities of the major defense 
     acquisition programs;
       ``(D) provide advocacy, oversight, and guidance to elements 
     of the acquisition workforce responsible for systems 
     engineering, development planning, and lifecycle management 
     and sustainability functions;
       ``(E) provide input on the inclusion of systems engineering 
     requirements in the process for consideration of joint 
     military requirements by the

[[Page 13050]]

     Joint Requirements Oversight Council pursuant to section 181 
     of this title, including specific input relating to each 
     capabilities development document;
       ``(F) periodically review the organizations and 
     capabilities of the military departments with respect to 
     systems engineering, development planning, and lifecycle 
     management and sustainability, and identify needed changes or 
     improvements to such organizations and capabilities; and
       ``(G) perform such other activities relating to the systems 
     engineering and development planning activities of the 
     Department of Defense as the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics may prescribe.
       ``(6) Access to records.--The Director shall have access to 
     any records or data of the Department of Defense (including 
     the records and data of each military department and 
     including classified and proprietary information as 
     appropriate) that the Director considers necessary to review 
     in order to carry out the Director's duties under this 
     subsection.
       ``(c) Joint Annual Report.--Not later than March 31 each 
     year, beginning in 2010, the Director of Developmental Test 
     and Evaluation and the Director of Systems Engineering shall 
     jointly submit to the congressional defense committees a 
     report on the activities undertaken pursuant to subsections 
     (a) and (b) during the preceding year. Each report shall 
     include a section on activities relating to the major defense 
     acquisition programs which shall set forth, at a minimum, the 
     following:
       ``(1) A discussion of the extent to which the major defense 
     acquisition programs are fulfilling the objectives of their 
     systems engineering master plans and developmental test and 
     evaluation plans.
       ``(2) A discussion of the waivers of and deviations from 
     requirements in test and evaluation master plans, systems 
     engineering master plans, and other testing requirements that 
     occurred during the preceding year with respect to such 
     programs, any concerns raised by such waivers or deviations, 
     and the actions that have been taken or are planned to be 
     taken to address such concerns.
       ``(3) An assessment of the organization and capabilities of 
     the Department of Defense for systems engineering, 
     development planning, and developmental test and evaluation 
     with respect to such programs.
       ``(4) Any comments on such report that the Secretary of 
     Defense considers appropriate.
       ``(d) Joint Guidance.--The Director of Developmental Test 
     and Evaluation and the Director of Systems Engineering shall 
     jointly, in coordination with the official designated by the 
     Secretary of Defense under section 103 of the Weapon Systems 
     Acquisition Reform Act of 2009, issue guidance on the 
     following:
       ``(1) The development and tracking of detailed measurable 
     performance criteria as part of the systems engineering 
     master plans and the developmental test and evaluation plans 
     within the test and evaluation master plans of major defense 
     acquisition programs.
       ``(2) The use of developmental test and evaluation to 
     measure the achievement of specific performance objectives 
     within a systems engineering master plan.
       ``(3) A system for storing and tracking information 
     relating to the achievement of the performance criteria and 
     objectives specified pursuant to this subsection.
       ``(e) Major Defense Acquisition Program Defined.--In this 
     section, the term `major defense acquisition program' has the 
     meaning given that term in section 2430 of this title.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 4 of such title, as amended by section 
     101(a) of this Act, is further amended by inserting after the 
     item relating to section 139c the following new item:

``139d. Director of Developmental Test and Evaluation; Director of 
              Systems Engineering: joint guidance.''.
       (b) Developmental Test and Evaluation and Systems 
     Engineering in the Military Departments and Defense 
     Agencies.--
       (1) Plans.--The service acquisition executive of each 
     military department and each Defense Agency with 
     responsibility for a major defense acquisition program shall 
     develop and implement plans to ensure the military department 
     or Defense Agency concerned has provided appropriate 
     resources for each of the following:
       (A) Developmental testing organizations with adequate 
     numbers of trained personnel in order to--
       (i) ensure that developmental testing requirements are 
     appropriately addressed in the translation of operational 
     requirements into contract specifications, in the source 
     selection process, and in the preparation of requests for 
     proposals on all major defense acquisition programs;
       (ii) participate in the planning of developmental test and 
     evaluation activities, including the preparation and approval 
     of a developmental test and evaluation plan within the test 
     and evaluation master plan for each major defense acquisition 
     program; and
       (iii) participate in and oversee the conduct of 
     developmental testing, the analysis of data, and the 
     preparation of evaluations and reports based on such testing.
       (B) Development planning and systems engineering 
     organizations with adequate numbers of trained personnel in 
     order to--
       (i) support key requirements, acquisition, and budget 
     decisions made for each major defense acquisition program 
     prior to Milestone A approval and Milestone B approval 
     through a rigorous systems analysis and systems engineering 
     process;
       (ii) include a robust program for improving reliability, 
     availability, maintainability, and sustainability as an 
     integral part of design and development within the systems 
     engineering master plan for each major defense acquisition 
     program; and
       (iii) identify systems engineering requirements, including 
     reliability, availability, maintainability, and lifecycle 
     management and sustainability requirements, during the Joint 
     Capabilities Integration Development System process, and 
     incorporate such systems engineering requirements into 
     contract requirements for each major defense acquisition 
     program.
       (2) Reports by service acquisition executives.--Not later 
     than 180 days after the date of the enactment of this Act, 
     the service acquisition executive of each military department 
     and each Defense Agency with responsibility for a major 
     defense acquisition program shall submit to the Director of 
     Developmental Test and Evaluation and the Director of Systems 
     Engineering a report on the extent to which--
       (A) such military department or Defense Agency has 
     implemented, or is implementing, the plan required by 
     paragraph (1); and
       (B) additional authorities or resources are needed to 
     attract, develop, retain, and reward developmental test and 
     evaluation personnel and systems engineers with appropriate 
     levels of hands-on experience and technical expertise to meet 
     the needs of such military department or Defense Agency.
       (3) Assessment of reports by directors of developmental 
     test and evaluation and systems engineering.--The first 
     annual report submitted to Congress by the Director of 
     Developmental Test and Evaluation and the Director of Systems 
     Engineering under section 139d(c) of title 10, United States 
     Code (as added by subsection (a)), shall include an 
     assessment by the Directors of the reports submitted by the 
     service acquisition executives to the Directors under 
     paragraph (2).

     SEC. 103. PERFORMANCE ASSESSMENTS AND ROOT CAUSE ANALYSES FOR 
                   MAJOR DEFENSE ACQUISITION PROGRAMS.

       (a) Designation of Senior Official Responsibility for 
     Performance Assessments and Root Cause Analyses.--
       (1) In general.--The Secretary of Defense shall designate a 
     senior official in the Office of the Secretary of Defense as 
     the principal official of the Department of Defense 
     responsible for conducting and overseeing performance 
     assessments and root cause analyses for major defense 
     acquisition programs.
       (2) No program execution responsibility.--The Secretary 
     shall ensure that the senior official designated under 
     paragraph (1) is not responsible for program execution.
       (3) Staff and resources.--The Secretary shall assign to the 
     senior official designated under paragraph (1) appropriate 
     staff and resources necessary to carry out official's 
     function under this section.
       (b) Responsibilities.--The senior official designated under 
     subsection (a) shall be responsible for the following:
       (1) Carrying out performance assessments of major defense 
     acquisition programs in accordance with the requirements of 
     subsection (c) periodically or when requested by the 
     Secretary of Defense, the Under Secretary of Defense for 
     Acquisition, Technology and Logistics, the Secretary of a 
     military department, or the head of a Defense Agency.
       (2) Conducting root cause analyses for major defense 
     acquisition programs in accordance with the requirements of 
     subsection (d) when required by section 2433a(a)(1) of title 
     10, United States Code (as added by section 206(a) of this 
     Act), or when requested by the Secretary of Defense, the 
     Under Secretary of Defense for Acquisition, Technology and 
     Logistics, the Secretary of a military department, or the 
     head of a Defense Agency.
       (3) Issuing policies, procedures, and guidance governing 
     the conduct of performance assessments and root cause 
     analyses by the military departments and the Defense 
     Agencies.
       (4) Evaluating the utility of performance metrics used to 
     measure the cost, schedule, and performance of major defense 
     acquisition programs, and making such recommendations to the 
     Secretary of Defense as the official considers appropriate to 
     improve such metrics.
       (5) Advising acquisition officials on performance issues 
     regarding a major defense acquisition program that may 
     arise--
       (A) prior to certification under section 2433a of title 10, 
     United States Code (as so added);
       (B) prior to entry into full-rate production; or
       (C) in the course of consideration of any decision to 
     request authorization of a multiyear procurement contract for 
     the program.
       (c) Performance Assessments.--For purposes of this section, 
     a performance assessment with respect to a major defense 
     acquisition program is an evaluation of the following:
       (1) The cost, schedule, and performance of the program, 
     relative to current metrics, including performance 
     requirements and baseline descriptions.
       (2) The extent to which the level of program cost, 
     schedule, and performance predicted relative to such metrics 
     is likely to result in the timely delivery of a level of 
     capability to the warfighter that is consistent with the 
     level of resources to be expended and provides superior value 
     to alternative approaches that may be available to meet the 
     same military requirement.
       (d) Root Cause Analyses.--For purposes of this section and 
     section 2433a of title 10, United States Code (as so added), 
     a root cause analysis

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     with respect to a major defense acquisition program is an 
     assessment of the underlying cause or causes of shortcomings 
     in cost, schedule, or performance of the program, including 
     the role, if any, of--
       (1) unrealistic performance expectations;
       (2) unrealistic baseline estimates for cost or schedule;
       (3) immature technologies or excessive manufacturing or 
     integration risk;
       (4) unanticipated design, engineering, manufacturing, or 
     technology integration issues arising during program 
     performance;
       (5) changes in procurement quantities;
       (6) inadequate program funding or funding instability;
       (7) poor performance by government or contractor personnel 
     responsible for program management; or
       (8) any other matters.
       (e) Support of Applicable Capabilities and Expertise.--The 
     Secretary of Defense shall ensure that the senior official 
     designated under subsection (a) has the support of other 
     Department of Defense officials with relevant capabilities 
     and expertise needed to carry out the requirements of this 
     section.
       (f) Annual Report.--Not later than March 1 each year, 
     beginning in 2010, the official responsible for conducting 
     and overseeing performance assessments and root cause 
     analyses for major defense acquisition programs shall submit 
     to the congressional defense committees a report on the 
     activities undertaken under this section during the preceding 
     year.

     SEC. 104. ASSESSMENT OF TECHNOLOGICAL MATURITY OF CRITICAL 
                   TECHNOLOGIES OF MAJOR DEFENSE ACQUISITION 
                   PROGRAMS BY THE DIRECTOR OF DEFENSE RESEARCH 
                   AND ENGINEERING.

       (a) Assessment by Director of Defense Research and 
     Engineering.--
       (1) In general.--Section 139a of title 10, United States 
     Code, is amended by adding at the end the following new 
     subsection:
       ``(c)(1) The Director of Defense Research and Engineering, 
     in consultation with the Director of Developmental Test and 
     Evaluation, shall periodically review and assess the 
     technological maturity and integration risk of critical 
     technologies of the major defense acquisition programs of the 
     Department of Defense and report on the findings of such 
     reviews and assessments to the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics.
       ``(2) The Director shall submit to the Secretary of Defense 
     and to the congressional defense committees by March 1 of 
     each year a report on the technological maturity and 
     integration risk of critical technologies of the major 
     defense acquisition programs of the Department of Defense.''.
       (2) First annual report.--The first annual report under 
     subsection (c)(2) of section 139a of title 10, United States 
     Code (as added by paragraph (1)), shall be submitted to the 
     congressional defense committees not later than March 1, 
     2010, and shall address the results of reviews and 
     assessments conducted by the Director of Defense Research and 
     Engineering pursuant to subsection (c)(1) of such section (as 
     so added) during the preceding calendar year.
       (b) Report on Resources for Implementation.--Not later than 
     120 days after the date of the enactment of this Act, the 
     Director of Defense Research and Engineering shall submit to 
     the congressional defense committees a report describing any 
     additional resources that may be required by the Director, 
     and by other research and engineering elements of the 
     Department of Defense, to carry out the following:
       (1) The requirements under the amendment made by subsection 
     (a)(1).
       (2) The technological maturity assessments required by 
     section 2366b(a) of title 10, United States Code.
       (3) The requirements of Department of Defense Instruction 
     5000, as revised.
       (c) Technological Maturity Standards.--Not later than 180 
     days after the date of the enactment of this Act, the 
     Director of Defense Research and Engineering, in consultation 
     with the Director of Developmental Test and Evaluation, shall 
     develop knowledge-based standards against which to measure 
     the technological maturity and integration risk of critical 
     technologies at key stages in the acquisition process for 
     purposes of conducting the reviews and assessments of major 
     defense acquisition programs required by subsection (c) of 
     section 139a of title 10, United States Code (as so added).

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

       (a) In General.--Section 181(d) of title 10, United States 
     Code, as amended by section 101(d) of this Act, is further 
     amended--
       (1) by inserting ``(1)'' before ``The Under Secretary''; 
     and
       (2) by adding at the end the following new paragraph:
       ``(2) The Council shall seek and consider input from the 
     commanders of the combatant commands in carrying out its 
     mission under paragraphs (1) and (2) of subsection (b) and in 
     conducting periodic reviews in accordance with the 
     requirements of subsection (e).''.
       (b) Input From Commanders of Combatant Commands.--The Joint 
     Requirements Oversight Council in the Department of Defense 
     shall seek and consider input from the commanders of 
     combatant commands, in accordance with section 181(d) of 
     title 10, United States Code (as amended by subsection (a)). 
     Such input may include, but is not limited to, an assessment 
     of the following:
       (1) Any current or projected missions or threats in the 
     theater of operations of the commander of a combatant command 
     that would inform the assessment of a new joint military 
     requirement.
       (2) The necessity and sufficiency of a proposed joint 
     military requirement in terms of current and projected 
     missions or threats.
       (3) The relative priority of a proposed joint military 
     requirement in comparison with other joint military 
     requirements within the theater of operations of the 
     commander of a combatant command.
       (4) The ability of partner nations in the theater of 
     operations of the commander of a combatant command to assist 
     in meeting the joint military requirement or the benefit, if 
     any, of a partner nation assisting in development or use of 
     technologies developed to meet the joint military 
     requirement.
       (c) Comptroller General of the United States Review of 
     Implementation.--
       (1) Requirement.--Not later than two years after the date 
     of the enactment of this Act, the Comptroller General of the 
     United States shall submit to the Committees on Armed 
     Services of the Senate and the House of Representatives a 
     report on the implementation of the requirements of--
       (A) subsection (d)(2) of section 181 of title 10, United 
     States Code (as amended by subsection (a)), for the Joint 
     Requirements Oversight Council to solicit and consider input 
     from the commanders of the combatant commands;
       (B) the amendments to subsection (b) of section 181 of 
     title 10, United States Code, made by section 942 of the 
     National Defense Authorization Act for Fiscal Year 2008 
     (Public Law 110-181; 122 Stat. 287) and by section 201(b) of 
     this Act; and
       (C) the requirements of section 201(c) of this Act.
       (2) Matters covered.--The report shall include, at a 
     minimum, an assessment of--
       (A) the extent to which the Council has effectively sought, 
     and the commanders of the combatant commands have provided, 
     meaningful input on proposed joint military requirements;
       (B) the quality and effectiveness of efforts to estimate 
     the level of resources needed to fulfill joint military 
     requirements; and
       (C) the extent to which the Council has considered trade-
     offs among cost, schedule, and performance objectives.
                      TITLE II--ACQUISITION POLICY

     SEC. 201. CONSIDERATION OF TRADE-OFFS AMONG COST, SCHEDULE, 
                   AND PERFORMANCE OBJECTIVES IN DEPARTMENT OF 
                   DEFENSE ACQUISITION PROGRAMS.

       (a) Consideration of Trade-Offs.--
       (1) In general.--The Secretary of Defense shall ensure that 
     mechanisms are developed and implemented to require 
     consideration of trade-offs among cost, schedule, and 
     performance objectives as part of the process for developing 
     requirements for Department of Defense acquisition programs.
       (2) Elements.--The mechanisms required under this 
     subsection shall ensure, at a minimum, that--
       (A) Department of Defense officials responsible for 
     acquisition, budget, and cost estimating functions are 
     provided an appropriate opportunity to develop estimates and 
     raise cost and schedule matters before performance objectives 
     are established for capabilities for which the Chairman of 
     the Joint Requirements Oversight Council is the validation 
     authority; and
       (B) the process for developing requirements is structured 
     to enable incremental, evolutionary, or spiral acquisition 
     approaches, including the deferral of technologies that are 
     not yet mature and capabilities that are likely to 
     significantly increase costs or delay production until later 
     increments or spirals.
       (b) Duties of Joint Requirements Oversight Council.--
     Section 181(b) of title 10, United States Code, is amended--
       (1) in paragraph (1)--
       (A) by striking ``and'' at the end of subparagraph (A);
       (B) by inserting ``and'' at the end of subparagraph (B) 
     after the semicolon; and
       (C) by adding at the end the following new subparagraph:
       ``(C) in ensuring the consideration of trade-offs among 
     cost, schedule, and performance objectives for joint military 
     requirements in consultation with the advisors specified in 
     subsection (d);''.
       (2) in paragraph (3)--
       (A) by inserting ``, in consultation with the Under 
     Secretary of Defense (Comptroller), the Under Secretary of 
     Defense for Acquisition, Technology, and Logistics, and the 
     Director of Cost Assessment and Performance Evaluation,'' 
     after ``assist the Chairman''; and
       (B) by striking ``and'' after the semicolon at the end;
       (3) in paragraph (4), by striking the period at the end and 
     inserting ``; and''; and
       (4) by adding at the end the following new paragraph:
       ``(5) assist the Chairman, in consultation with the 
     commanders of the combatant commands and the Under Secretary 
     of Defense for Acquisition, Technology, and Logistics, in 
     establishing an objective for the overall period of time 
     within which an initial operational capability should be 
     delivered to meet each joint military requirement.''.
       (c) Review of Joint Military Requirements.--The Secretary 
     of Defense shall ensure that each new joint military 
     requirement recommended by the Joint Requirements Oversight 
     Council is reviewed to ensure that the Joint Requirements 
     Oversight Council has, in making such recommendation--

[[Page 13052]]

       (1) taken appropriate action to seek and consider input 
     from the commanders of the combatant commands, in accordance 
     with the requirements of section 181(d) of title 10, United 
     States Code (as amended by section 105(a) of this Act);
       (2) engaged in consideration of trade-offs among cost, 
     schedule, and performance objectives in accordance with the 
     requirements of section 181(b)(1)(C) of title 10, United 
     States Code (as added by subsection (b)); and
       (3) engaged in consideration of issues of joint portfolio 
     management, including alternative material and non-material 
     solutions, as provided in Department of Defense instructions 
     for the development of joint military requirements.
       (d) Study Guidance for Analyses of Alternatives.--The 
     Director of Cost Assessment and Program Evaluation shall take 
     the lead in the development of study guidance for an analysis 
     of alternatives for each joint military requirement for which 
     the Chairman of the Joint Requirements Oversight Council is 
     the validation authority. In developing the guidance, the 
     Director shall solicit the advice of appropriate officials 
     within the Department of Defense and ensure that the guidance 
     requires, at a minimum--
       (1) full consideration of possible trade-offs among cost, 
     schedule, and performance objectives for each alternative 
     considered; and
       (2) an assessment of whether or not the joint military 
     requirement can be met in a manner that is consistent with 
     the cost and schedule objectives recommended by the Joint 
     Requirements Oversight Council.
       (e) Analysis of Alternatives in Certification for Milestone 
     A.--Section 2366a(a) of title 10, United States Code, as 
     amended by section 101(d)(3) of this Act, is further 
     amended--
       (1) by striking ``and'' at the end of paragraph (3);
       (2) by redesignating paragraph (4) as paragraph (5); and
       (3) by inserting after paragraph (3) the following new 
     paragraph (4):
       ``(4) that an analysis of alternatives has been performed 
     consistent with study guidance developed by the Director of 
     Cost Assessment and Program Evaluation; and''.
       (f) Duties of Milestone Decision Authority.--Section 
     2366b(a)(1)(B) of such title is amended by inserting 
     ``appropriate trade-offs among cost, schedule, and 
     performance objectives have been made to ensure that'' before 
     ``the program is affordable''.

     SEC. 202. ACQUISITION STRATEGIES TO ENSURE COMPETITION 
                   THROUGHOUT THE LIFECYCLE OF MAJOR DEFENSE 
                   ACQUISITION PROGRAMS.

       (a) Acquisition Strategies To Ensure Competition.--The 
     Secretary of Defense shall ensure that the acquisition 
     strategy for each major defense acquisition program 
     includes--
       (1) measures to ensure competition, or the option of 
     competition, at both the prime contract level and the 
     subcontract level (at such tier or tiers as are appropriate) 
     of such program throughout the life-cycle of such program as 
     a means to improve contractor performance; and
       (2) adequate documentation of the rationale for the 
     selection of the subcontract tier or tiers under paragraph 
     (1).
       (b) Measures To Ensure Competition.--The measures to ensure 
     competition, or the option of competition, for purposes of 
     subsection (a)(1) may include measures to achieve the 
     following, in appropriate cases if such measures are cost-
     effective:
       (1) Competitive prototyping.
       (2) Dual-sourcing.
       (3) Unbundling of contracts.
       (4) Funding of next-generation prototype systems or 
     subsystems.
       (5) Use of modular, open architectures to enable 
     competition for upgrades.
       (6) Use of build-to-print approaches to enable production 
     through multiple sources.
       (7) Acquisition of complete technical data packages.
       (8) Periodic competitions for subsystem upgrades.
       (9) Licensing of additional suppliers.
       (10) Periodic system or program reviews to address long-
     term competitive effects of program decisions.
       (c) Additional Measures To Ensure Competition at 
     Subcontract Level.--The Secretary shall take actions to 
     ensure fair and objective ``make-buy'' decisions by prime 
     contractors on major defense acquisition programs by--
       (1) requiring prime contractors to give full and fair 
     consideration to qualified sources other than the prime 
     contractor for the development or construction of major 
     subsystems and components of major weapon systems;
       (2) providing for government surveillance of the process by 
     which prime contractors consider such sources and determine 
     whether to conduct such development or construction in-house 
     or through a subcontract; and
       (3) providing for the assessment of the extent to which a 
     contractor has given full and fair consideration to qualified 
     sources other than the contractor in sourcing decisions as a 
     part of past performance evaluations.
       (d) Consideration of Competition Throughout Operation and 
     Sustainment of Major Weapon Systems.--Whenever a decision 
     regarding source of repair results in a plan to award a 
     contract for performance of maintenance and sustainment of a 
     major weapon system, the Secretary shall take actions to 
     ensure that, to the maximum extent practicable and consistent 
     with statutory requirements, contracts for such maintenance 
     and sustainment are awarded on a competitive basis and give 
     full consideration to all sources (including sources that 
     partner or subcontract with public or private sector repair 
     activities).
       (e) Applicability.--
       (1) Strategy and measures to ensure competition.--The 
     requirements of subsections (a) and (b) shall apply to any 
     acquisition plan for a major defense acquisition program that 
     is developed or revised on or after the date that is 60 days 
     after the date of the enactment of this Act.
       (2) Additional actions.--The actions required by 
     subsections (c) and (d) shall be taken within 180 days after 
     the date of the enactment of this Act.

     SEC. 203. PROTOTYPING REQUIREMENTS FOR MAJOR DEFENSE 
                   ACQUISITION PROGRAMS.

       (a) Competitive Prototyping.--Not later than 90 days after 
     the date of the enactment of this Act, the Secretary of 
     Defense shall modify the guidance of the Department of 
     Defense relating to the operation of the acquisition system 
     with respect to competitive prototyping for major defense 
     acquisition programs to ensure the following:
       (1) That the acquisition strategy for each major defense 
     acquisition program provides for competitive prototypes 
     before Milestone B approval (or Key Decision Point B approval 
     in the case of a space program) unless the Milestone Decision 
     Authority for such program waives the requirement pursuant to 
     paragraph (2).
       (2) That the Milestone Decision Authority may waive the 
     requirement in paragraph (1) only--
       (A) on the basis that the cost of producing competitive 
     prototypes exceeds the expected life-cycle benefits (in 
     constant dollars) of producing such prototypes, including the 
     benefits of improved performance and increased technological 
     and design maturity that may be achieved through competitive 
     prototyping; or
       (B) on the basis that, but for such waiver, the Department 
     would be unable to meet critical national security 
     objectives.
       (3) That whenever a Milestone Decision Authority authorizes 
     a waiver pursuant to paragraph (2), the Milestone Decision 
     Authority--
       (A) shall require that the program produce a prototype 
     before Milestone B approval (or Key Decision Point B approval 
     in the case of a space program) if the expected life-cycle 
     benefits (in constant dollars) of producing such prototype 
     exceed its cost and its production is consistent with 
     achieving critical national security objectives; and
       (B) shall notify the congressional defense committees in 
     writing not later than 30 days after the waiver is authorized 
     and include in such notification the rationale for the waiver 
     and the plan, if any, for producing a prototype.
       (4) That prototypes may be required under paragraph (1) or 
     (3) for the system to be acquired or, if prototyping of the 
     system is not feasible, for critical subsystems of the 
     system.
       (b) Comptroller General Review of Certain Waivers.--
       (1) Notice to comptroller general.--Whenever a Milestone 
     Decision Authority authorizes a waiver of the requirement for 
     prototypes pursuant to paragraph (2) of subsection (a) on the 
     basis of excessive cost, the Milestone Decision Authority 
     shall submit the notification of the waiver, together with 
     the rationale, to the Comptroller General of the United 
     States at the same time it is submitted to the congressional 
     defense committees.
       (2) Comptroller general review.--Not later than 60 days 
     after receipt of a notification of a waiver under paragraph 
     (1), the Comptroller General shall--
       (A) review the rationale for the waiver; and
       (B) submit to the congressional defense committees a 
     written assessment of the rationale for the waiver.

     SEC. 204. ACTIONS TO IDENTIFY AND ADDRESS SYSTEMIC PROBLEMS 
                   IN MAJOR DEFENSE ACQUISITION PROGRAMS PRIOR TO 
                   MILESTONE B APPROVAL.

       (a) Modification to Certification Requirement.--Subsection 
     (a) of section 2366a of title 10, United States Code, is 
     amended by striking ``may not receive Milestone A approval, 
     or Key Decision Point A approval in the case of a space 
     program,'' and inserting ``may not receive Milestone A 
     approval, or Key Decision Point A approval in the case of a 
     space program, or otherwise be initiated prior to Milestone B 
     approval, or Key Decision Point B approval in the case of a 
     space program,''.
       (b) Modification to Notification Requirement.--Subsection 
     (b) of such section is amended--
       (1) by inserting ``(1)'' before ``With respect to'';
       (2) in paragraph (1), as so designated, by striking ``by at 
     least 25 percent,'' and inserting ``by at least 25 percent, 
     or the program manager determines that the period of time 
     required for the delivery of an initial operational 
     capability is likely to exceed the schedule objective 
     established pursuant to section 181(b)(5) of this title by 
     more than 25 percent,''; and
       (3) by adding at the end the following new paragraph:
       ``(2) Not later than 30 days after a program manager 
     submits a notification to the Milestone Decision Authority 
     pursuant to paragraph (1) with respect to a major defense 
     acquisition program, the Milestone Decision Authority shall 
     submit to the congressional defense committees a report 
     that--
       ``(A) identifies the root causes of the cost or schedule 
     growth in accordance with applicable policies, procedures, 
     and guidance;
       ``(B) identifies appropriate acquisition performance 
     measures for the remainder of the development of the program; 
     and
       ``(C) includes one of the following:
       ``(i) A written certification (with a supporting 
     explanation) stating that--

[[Page 13053]]

       ``(I) the program is essential to national security;
       ``(II) there are no alternatives to the program that will 
     provide acceptable military capability at less cost;
       ``(III) new estimates of the development cost or schedule, 
     as appropriate, are reasonable; and
       ``(IV) the management structure for the program is adequate 
     to manage and control program development cost and schedule.
       ``(ii) A plan for terminating the development of the 
     program or withdrawal of Milestone A approval, or Key 
     Decision Point A approval in the case of a space program, if 
     the Milestone Decision Authority determines that such action 
     is in the interest of national defense.''.
       (c) Application to Ongoing Programs.--
       (1) In general.--Each major defense acquisition program 
     described in paragraph (2) shall be certified in accordance 
     with the requirements of section 2366a of title 10, United 
     States Code (as amended by this section), within one year 
     after the date of the enactment of this Act.
       (2) Covered programs.--The requirement in paragraph (1) 
     shall apply to any major defense acquisition program that--
       (A) was initiated before the date of the enactment of this 
     Act; and
       (B) as of the date of certification under paragraph (1) has 
     not otherwise been certified pursuant to either section 2366a 
     (as so amended) or 2366b of title 10, United States Code.

     SEC. 205. ADDITIONAL REQUIREMENTS FOR CERTAIN MAJOR DEFENSE 
                   ACQUISITION PROGRAMS.

       (a) Additional Requirements Relating to Milestone B 
     Approval.--Section 2366b of title 10, United States Code, is 
     amended--
       (1) in subsection (d)--
       (A) by inserting ``(1)'' before ``The milestone decision 
     authority may''; and
       (B) by striking the second sentence and inserting the 
     following:
       ``(2) Whenever the milestone decision authority makes such 
     a determination and authorizes such a waiver--
       ``(A) the waiver, the determination, and the reasons for 
     the determination shall be submitted in writing to the 
     congressional defense committees within 30 days after the 
     waiver is authorized; and
       ``(B) the milestone decision authority shall review the 
     program not less often than annually to determine the extent 
     to which such program currently satisfies the certification 
     components specified in paragraphs (1) and (2) of subsection 
     (a) until such time as the milestone decision authority 
     determines that the program satisfies all such certification 
     components.'';
       (2) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively, and inserting after subsection (d) 
     the following new subsection (e):
       ``(e) Designation of Certification Status in Budget 
     Documentation.--Any budget request, budget justification 
     material, budget display, reprogramming request, Selected 
     Acquisition Report, or other budget documentation or 
     performance report submitted by the Secretary of Defense to 
     the President regarding a major defense acquisition program 
     receiving a waiver pursuant to subsection (d) shall 
     prominently and clearly indicate that such program has not 
     fully satisfied the certification requirements of this 
     section until such time as the milestone decision authority 
     makes the determination that such program has satisfied all 
     such certification components.''; and
       (3) in subsection (a)--
       (A) in paragraph (1), by striking ``and'' at the end;
       (B) by redesignating paragraph (2) as paragraph (3);
       (C) by inserting after paragraph (1) the following new 
     paragraph (2):
       ``(2) has received a preliminary design review and 
     conducted a formal post-preliminary design review assessment, 
     and certifies on the basis of such assessment that the 
     program demonstrates a high likelihood of accomplishing its 
     intended mission; and''; and
       (D) in paragraph (3), as redesignated by subparagraph (B) 
     of this paragraph--
       (i) in subparagraph (D), by striking the semicolon and 
     inserting ``, as determined by the Milestone Decision 
     Authority on the basis of an independent review and 
     assessment by the Director of Defense Research and 
     Engineering; and'';
       (ii) by striking subparagraph (E); and
       (iii) by redesignating subparagraph (F) as subparagraph 
     (E).
       (b) Certification and Review of Programs Entering 
     Development Prior To Enactment of Section 2366b of Title 
     10.--
       (1) Determination.--Not later than 270 days after the date 
     of the enactment of this Act, for each major defense 
     acquisition program that received Milestone B approval before 
     January 6, 2006, and has not received Milestone C approval, 
     and for each space program that received Key Decision Point B 
     approval before January 6, 2006, and has not received Key 
     Decision Point C approval, the Milestone Decision Authority 
     shall determine whether or not such program satisfies all of 
     the certification components specified in paragraphs (1) and 
     (2) of subsection (a) of section 2366b of title 10, United 
     States Code (as amended by subsection (a) of this section).
       (2) Annual review.--The Milestone Decision Authority shall 
     review any program determined pursuant to paragraph (1) not 
     to satisfy any of the certification components of subsection 
     (a) of section 2366b of title 10, United States Code (as so 
     amended), not less often than annually thereafter to 
     determine the extent to which such program currently 
     satisfies such certification components until such time as 
     the Milestone Decision Authority determines that such program 
     satisfies all such certification components.
       (3) Designation of certification status in budget 
     documentation.--Any budget request, budget justification 
     material, budget display, reprogramming request, Selected 
     Acquisition Report, or other budget documentation or 
     performance report submitted by the Secretary of Defense to 
     the President regarding a major defense acquisition program 
     which the Milestone Decision Authority determines under 
     paragraph (1) does not satisfy all of the certification 
     components of subsection (a) of section 2366b of title 10, 
     United States Code, (as so amended) shall prominently and 
     clearly indicate that such program has not fully satisfied 
     such certification components until such time as the 
     Milestone Decision Authority makes the determination that 
     such program has satisfied all such certification components.
       (c) Reviews of Programs Restructured After Experiencing 
     Critical Cost Growth.--The official designated to perform 
     oversight of performance assessment pursuant to section 103 
     of this Act, shall assess the performance of each major 
     defense acquisition program that has exceeded critical cost 
     growth thresholds established pursuant to section 2433(e) of 
     title 10, United States Code, but has not been terminated in 
     accordance with section 2433a of such title (as added by 
     section 206(a) of this Act) not less often than semi-annually 
     until one year after the date on which such program receives 
     a new milestone approval, in accordance with section 
     2433a(c)(3) of such title (as so added). The results of 
     reviews performed under this subsection shall be reported to 
     the Under Secretary of Defense for Acquisition, Technology, 
     and Logistics and summarized in the next annual report of 
     such designated official.

     SEC. 206. CRITICAL COST GROWTH IN MAJOR DEFENSE ACQUISITION 
                   PROGRAMS.

       (a) Actions Following Critical Cost Growth.--
       (1) In general.--Chapter 144 of title 10, United States 
     Code, is amended by inserting after section 2433 the 
     following new section:

     ``Sec. 2433a. Critical cost growth in major defense 
       acquisition programs

       ``(a) Reassessment of Program.--If the program acquisition 
     unit cost or procurement unit cost of a major defense 
     acquisition program or designated subprogram (as determined 
     by the Secretary under section 2433(d) of this title) 
     increases by a percentage equal to or greater than the 
     critical cost growth threshold for the program or subprogram, 
     the Secretary of Defense, after consultation with the Joint 
     Requirements Oversight Council regarding program 
     requirements, shall--
       ``(1) determine the root cause or causes of the critical 
     cost growth in accordance with applicable statutory 
     requirements and Department of Defense policies, procedures, 
     and guidance; and
       ``(2) in consultation with the Director of Cost Assessment 
     and Program Evaluation, carry out an assessment of--
       ``(A) the projected cost of completing the program if 
     current requirements are not modified;
       ``(B) the projected cost of completing the program based on 
     reasonable modification of such requirements;
       ``(C) the rough order of magnitude of the costs of any 
     reasonable alternative system or capability; and
       ``(D) the need to reduce funding for other programs due to 
     the growth in cost of the program.
       ``(b) Presumption of Termination.--(1) After conducting the 
     reassessment required by subsection (a) with respect to a 
     major defense acquisition program, the Secretary shall 
     terminate the program unless the Secretary submits to 
     Congress, before the end of the 60-day period beginning on 
     the day the Selected Acquisition Report containing the 
     information described in section 2433(g) of this title is 
     required to be submitted under section 2432(f) of this title, 
     a written certification in accordance with paragraph (2).
       ``(2) A certification described by this paragraph with 
     respect to a major defense acquisition program is a written 
     certification that--
       ``(A) the continuation of the program is essential to the 
     national security;
       ``(B) there are no alternatives to the program which will 
     provide acceptable capability to meet the joint military 
     requirement (as defined in section 181(g)((1) of this title) 
     at less cost;
       ``(C) the new estimates of the program acquisition unit 
     cost or procurement unit cost have been determined by the 
     Director of Cost Assessment and Program Evaluation to be 
     reasonable;
       ``(D) the program is a higher priority than programs whose 
     funding must be reduced to accommodate the growth in cost of 
     the program; and
       ``(E) the management structure for the program is adequate 
     to manage and control program acquisition unit cost or 
     procurement unit cost.
       ``(3) A written certification under paragraph (2) shall be 
     accompanied by a report presenting the root cause analysis 
     and assessment carried out pursuant to subsection (a) and the 
     basis for each determination made in accordance with 
     subparagraphs (A) through (E) of paragraph (2), together with 
     supporting documentation.
       ``(c) Actions if Program Not Terminated.--(1) If the 
     Secretary elects not to terminate a major defense acquisition 
     program pursuant to subsection (b), the Secretary shall--
       ``(A) restructure the program in a manner that addresses 
     the root cause or causes of the critical cost growth, as 
     identified pursuant to

[[Page 13054]]

     subsection (a), and ensures that the program has an 
     appropriate management structure as set forth in the 
     certification submitted pursuant to subsection (b)(2)(E);
       ``(B) rescind the most recent Milestone approval, or Key 
     Decision Point approval in the case of a space program, for 
     the program and withdraw any associated certification under 
     section 2366a or 2366b of this title;
       ``(C) require a new Milestone approval, or Key Decision 
     Point approval in the case of a space program, for the 
     program before taking any contract action to enter a new 
     contract, exercise an option under an existing contract, or 
     otherwise extend the scope of an existing contract under the 
     program, except to the extent determined necessary by the 
     Milestone Decision Authority, on a non-delegable basis, to 
     ensure that the program can be restructured as intended by 
     the Secretary without unnecessarily wasting resources;
       ``(D) include in the report specified in paragraph (2) a 
     description of all funding changes made as a result of the 
     growth in cost of the program, including reductions made in 
     funding for other programs to accommodate such cost growth; 
     and
       ``(E) conduct regular reviews of the program in accordance 
     with the requirements of section 205 of the Weapon Systems 
     Acquisition Reform Act of 2009.
       ``(2) For purposes of paragraph (1)(D), the report 
     specified in this paragraph is the first Selected Acquisition 
     Report for the program submitted pursuant to section 2432 of 
     this title after the President submits a budget pursuant to 
     section 1105 of title 31, in the calendar year following the 
     year in which the program was restructured.
       ``(d) Actions if Program Terminated.--If a major defense 
     acquisition program is terminated pursuant to subsection (b), 
     the Secretary shall submit to Congress a written report 
     setting forth--
       ``(1) an explanation of the reasons for terminating the 
     program;
       ``(2) the alternatives considered to address any problems 
     in the program; and
       ``(3) the course the Department plans to pursue to meet any 
     continuing joint military requirements otherwise intended to 
     be met by the program.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 144 of such title is amended by 
     inserting after the item relating to section 2433 the 
     following new item:

``2433a. Critical cost growth in major defense acquisition programs.''.

       (3) Conforming amendment.--Paragraph (2) of section 2433(e) 
     of such title 10 is amended to read as follows:
       ``(2) If the program acquisition unit cost or procurement 
     unit cost of a major defense acquisition program or 
     designated major subprogram (as determined by the Secretary 
     under subsection (d)) increases by a percentage equal to or 
     greater than the critical cost growth threshold for the 
     program or subprogram, the Secretary of Defense shall take 
     actions consistent with the requirements of section 2433a of 
     this title.''.
       (b) Treatment as MDAP.--Section 2430 of such title is 
     amended--
       (1) in subsection (a)(2), by inserting ``, including all 
     planned increments or spirals,'' after ``an eventual total 
     expenditure for procurement''; and
       (2) by adding at the end the following new subsection:
       ``(c) For purposes of subsection (a)(2), the Secretary 
     shall consider, as applicable, the following:
       ``(1) The estimated level of resources required to fulfill 
     the relevant joint military requirement, as determined by the 
     Joint Requirements Oversight Council pursuant to section 181 
     of this title.
       ``(2) The cost estimate referred to in section 2366a(a)(4) 
     of this title.
       ``(3) The cost estimate referred to in section 
     2366b(a)(1)(C) of this title.
       ``(4) The cost estimate within a baseline description as 
     required by section 2435 of this title.''.

     SEC. 207. ORGANIZATIONAL CONFLICTS OF INTEREST IN MAJOR 
                   DEFENSE ACQUISITION PROGRAMS.

       (a) Revised Regulations Required.--Not later than 270 days 
     after the date of the enactment of this Act, the Secretary of 
     Defense shall revise the Defense Supplement to the Federal 
     Acquisition Regulation to provide uniform guidance and 
     tighten existing requirements for organizational conflicts of 
     interest by contractors in major defense acquisition 
     programs.
       (b) Elements.--The revised regulations required by 
     subsection (a) shall, at a minimum--
       (1) address organizational conflicts of interest that could 
     arise as a result of--
       (A) lead system integrator contracts on major defense 
     acquisition programs and contracts that follow lead system 
     integrator contracts on such programs, particularly contracts 
     for production;
       (B) the ownership of business units performing systems 
     engineering and technical assistance functions, professional 
     services, or management support services in relation to major 
     defense acquisition programs by contractors who 
     simultaneously own business units competing to perform as 
     either the prime contractor or the supplier of a major 
     subsystem or component for such programs;
       (C) the award of major subsystem contracts by a prime 
     contractor for a major defense acquisition program to 
     business units or other affiliates of the same parent 
     corporate entity, and particularly the award of subcontracts 
     for software integration or the development of a proprietary 
     software system architecture; or
       (D) the performance by, or assistance of, contractors in 
     technical evaluations on major defense acquisition programs;
       (2) ensure that the Department of Defense receives advice 
     on systems architecture and systems engineering matters with 
     respect to major defense acquisition programs from federally 
     funded research and development centers or other sources 
     independent of the prime contractor;
       (3) require that a contract for the performance of systems 
     engineering and technical assistance functions for a major 
     defense acquisition program contains a provision prohibiting 
     the contractor or any affiliate of the contractor from 
     participating as a prime contractor or a major subcontractor 
     in the development or construction of a weapon system under 
     the program; and
       (4) establish such limited exceptions to the requirement in 
     paragraphs (2) and (3) as may be necessary to ensure that the 
     Department of Defense has continued access to advice on 
     systems architecture and systems engineering matters from 
     highly-qualified contractors with domain experience and 
     expertise, while ensuring that such advice comes from sources 
     that are objective and unbiased.
       (c) Consultation in Revision of Regulations.--
       (1) Recommendations of panel on contracting integrity.--Not 
     later than 90 days after the date of the enactment of this 
     Act, the Panel on Contracting Integrity established pursuant 
     to section 813 of the John Warner National Defense 
     Authorization Act for Fiscal Year 2007 (Public Law 109-364; 
     120 Stat. 2320) shall present recommendations to the 
     Secretary of Defense on measures to eliminate or mitigate 
     organizational conflicts of interest in major defense 
     acquisition programs.
       (2) Consideration of recommendations.--In developing the 
     revised regulations required by subsection (a), the Secretary 
     shall consider the following:
       (A) The recommendations presented by the Panel on 
     Contracting Integrity pursuant to paragraph (1).
       (B) Any findings and recommendations of the Administrator 
     for Federal Procurement Policy and the Director of the Office 
     of Government Ethics pursuant to section 841(b) of the Duncan 
     Hunter National Defense Authorization Act for Fiscal Year 
     2009 (Public Law 110-417; 122 Stat. 4539).
       (d) Extension of Panel on Contracting Integrity.--
     Subsection (e) of section 813 of the John Warner National 
     Defense Authorization Act for Fiscal Year 2007 is amended to 
     read as follows:
       ``(e) Termination.--
       ``(1) In general.--Subject to paragraph (2), the panel 
     shall continue to serve until the date that is 18 months 
     after the date on which the Secretary of Defense notifies the 
     congressional defense committees of an intention to terminate 
     the panel based on a determination that the activities of the 
     panel no longer justify its continuation and that concerns 
     about contracting integrity have been mitigated.
       ``(2) Minimum continuing service.--The panel shall continue 
     to serve at least until December 31, 2011.''.
              TITLE III--ADDITIONAL ACQUISITION PROVISIONS

     SEC. 301. AWARDS FOR DEPARTMENT OF DEFENSE PERSONNEL FOR 
                   EXCELLENCE IN THE ACQUISITION OF PRODUCTS AND 
                   SERVICES.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Secretary of Defense shall 
     commence carrying out a program to recognize excellent 
     performance by individuals and teams of members of the Armed 
     Forces and civilian personnel of the Department of Defense in 
     the acquisition of products and services for the Department 
     of Defense.
       (b) Elements.--The program required by subsection (a) shall 
     include the following:
       (1) Procedures for the nomination by the personnel of the 
     military departments and the Defense Agencies of individuals 
     and teams of members of the Armed Forces and civilian 
     personnel of the Department of Defense for eligibility for 
     recognition under the program.
       (2) Procedures for the evaluation of nominations for 
     recognition under the program by one or more panels of 
     individuals from the Government, academia, and the private 
     sector who have such expertise, and are appointed in such 
     manner, as the Secretary shall establish for purposes of the 
     program.
       (c) Award of Cash Bonuses.--As part of the program required 
     by subsection (a), the Secretary may award to any individual 
     recognized pursuant to the program a cash bonus authorized by 
     any other provision of law to the extent that the performance 
     of such individual so recognized warrants the award of such 
     bonus under such provision of law.

     SEC. 302. EARNED VALUE MANAGEMENT.

       (a) Modification of Elements in Report on Implementation.--
     Subsection (a) of section 887 of the Duncan Hunter National 
     Defense Authorization Act for Fiscal Year 2009 (Public Law 
     110-417; 122 Stat. 4562) is amended by striking paragraph (7) 
     and inserting the following new paragraphs:
       ``(7) A discussion of the methodology used to establish 
     appropriate baselines for earned value management at the 
     award of a contract or commencement of a program, whichever 
     is earlier.
       ``(8) A discussion of the manner in which the Department 
     ensures that personnel responsible for administering and 
     overseeing earned value

[[Page 13055]]

     management systems have the training and qualifications 
     needed to perform that responsibility.
       ``(9) A discussion of mechanisms to ensure that contractors 
     establish and use approved earned value management systems, 
     including mechanisms such as the consideration of the quality 
     of contractor earned value management performance in past 
     performance evaluations.
       ``(10) Recommendations for improving earned value 
     management and its implementation within the Department, 
     including--
       ``(A) a discussion of the merits of possible alternatives; 
     and
       ``(B) a plan for implementing any improvements the 
     Secretary determines to be appropriate.''.
       (b) Modification of Report Date.--Subsection (b) of such 
     section is amended by striking ``270 days after the date of 
     the enactment of this Act'' and inserting ``October 14, 
     2009''.

     SEC. 303. EXPANSION OF NATIONAL SECURITY OBJECTIVES OF THE 
                   NATIONAL TECHNOLOGY AND INDUSTRIAL BASE.

       (a) In General.--Section 2501(a) of title 10, United States 
     Code, is amended by adding at the end the following new 
     paragraph:
       ``(6) Maintaining critical design skills to ensure that the 
     armed forces are provided with systems capable of ensuring 
     technological superiority over potential adversaries.''.
       (b) Assessment of Effect of Termination of Major Defense 
     Acquisition Programs on Technology and Industrial 
     Capabilities.--Section 2505(b) of such title is amended--
       (1) in paragraph (2), by striking ``and'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(4) consider the effects of the termination of major 
     defense acquisition programs (as the term is defined in 
     section 2430 of this title) in the previous fiscal year on 
     the sectors and capabilities in the assessment.''.

     SEC. 304. COMPTROLLER GENERAL OF THE UNITED STATES REPORTS ON 
                   COSTS AND FINANCIAL INFORMATION REGARDING MAJOR 
                   DEFENSE ACQUISITION PROGRAMS.

       (a) Review of Operating and Support Costs of Major Weapon 
     Systems.--
       (1) In general.--Not later than one year after the date of 
     the enactment of this Act, the Comptroller General of the 
     United States shall submit to the congressional defense 
     committees a report on growth in operating and support costs 
     for major weapon systems.
       (2) Elements.--In preparing the report required by 
     paragraph (1), the Comptroller General shall, at a minimum--
       (A) identify the original estimates for operating and 
     support costs for major weapon systems selected by the 
     Comptroller General for purposes of the report;
       (B) assess the actual operating and support costs for such 
     major weapon systems;
       (C) analyze the rate of growth for operating and support 
     costs for such major weapon systems;
       (D) for such major weapon systems that have experienced the 
     highest rate of growth in operating and support costs, assess 
     the factors contributing to such growth;
       (E) assess measures taken by the Department of Defense to 
     reduce operating and support costs for major weapon systems; 
     and
       (F) make such recommendations as the Comptroller General 
     considers appropriate.
       (b) Review of Financial Information Relating to Major 
     Defense Acquisition Programs.--
       (1) Review.--The Comptroller General of the United States 
     shall perform a review of weaknesses in operations affecting 
     the reliability of financial information on the systems and 
     assets to be acquired under major defense acquisition 
     programs.
       (2) Elements.--The review required under paragraph (1) 
     shall--
       (A) identify any weaknesses in operations under major 
     defense acquisition programs that hinder the capacity to 
     assemble reliable financial information on the systems and 
     assets to be acquired under such programs in accordance with 
     applicable accounting standards;
       (B) identify any mechanisms developed by the Department of 
     Defense to address weaknesses in operations under major 
     defense acquisition programs identified pursuant to 
     subparagraph (A); and
       (C) assess the implementation of the mechanisms set forth 
     pursuant to subparagraph (B), including--
       (i) the actions taken, or planned to be taken, to implement 
     such mechanisms;
       (ii) the schedule for carrying out such mechanisms; and
       (iii) the metrics, if any, instituted to assess progress in 
     carrying out such mechanisms.
       (3) Consultation.--In performing the review required by 
     paragraph (1), the Comptroller General shall seek and 
     consider input from each of the following:
       (A) The Chief Management Officer of the Department of 
     Defense.
       (B) The Chief Management Officer of the Department of the 
     Army.
       (C) The Chief Management Officer of the Department of the 
     Navy.
       (D) The Chief Management Officer of the Department of the 
     Air Force.
       (4) Report.--Not later than one year after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to the congressional defense committees a report on the 
     results of the review required by paragraph (1).
       And the House agree to the same.
     Ike Skelton,
     John M. Spratt,
     Solomon P. Ortiz,
     Gene Taylor,
     Neil Abercrombie,
     Silvestre Reyes,
     Vic Snyder,
     Adam Smith,
     Loretta Sanchez,
     Mike McIntyre,
     Ellen O. Tauscher,
     Robert E. Andrews,
     Susan A. Davis,
     James R. Langevin,
     Jim Cooper,
     Brad Ellsworth,
     Joe Sestak,
     John M. McHugh,
     Roscoe G. Bartlett,
     Howard ``Buck'' McKeon,
     Mac Thornberry,
     Walter B. Jones,
     W. Todd Akin,
     J. Randy Forbes,
     Jeff Miller,
     Joe Wilson,
     K. Michael Conaway,
     Duncan Hunter,
     Mike Coffman,
                                Managers on the Part of the House.
     Carl Levin,
     Edward M. Kennedy,
     Robert C. Byrd,
     Joseph Lieberman,
     Jack Reed,
     Daniel K. Akaka,
     Bill Nelson,
     Ben Nelson,
     Evan Bayh,
     Jim Webb,
     Claire McCaskill,
     Mark Udall,
     Kay R. Hagan,
     Mark Begich,
     Roland W. Burris,
     John McCain,
     James M. Inhofe,
     Jeff Sessions,
     Saxby Chambliss,
     Lindsey Graham,
     John Thune,
     Mel Martinez,
     Roger F. Wicker,
     Richard Burr,
     David Vitter,
     Susan Collins,
                               Managers on the Part of the Senate.

       Joint Explanatory Statement of the Committee of Conference

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the House to the bill (S. 454), to improve the 
     organization and procedures of the Department of Defense for 
     the acquisition of major weapon systems, and for other 
     purposes, submit the following joint statement to the House 
     and the Senate in explanation of the effect of the action 
     agreed upon by the managers and recommended in the 
     accompanying conference report:
       The House amendment struck all of the Senate bill after the 
     enacting clause and inserted a substitute text.
       The Senate recedes from its disagreement to the amendment 
     of the House with an amendment that is a substitute for the 
     Senate bill and the House amendment. The differences between 
     the Senate bill, the House amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clarifying 
     changes.

                   TITLE I--ACQUISITION ORGANIZATION

     Cost assessment and program evaluation (sec. 101)
       The Senate bill contained a provision (sec. 104) that would 
     establish a Director of Independent Cost Assessment in the 
     Department of Defense (DOD) to ensure that cost estimates for 
     major defense acquisition programs and major automated 
     information system programs are fair, reliable, and unbiased.
       The House amendment contained a provision (sec. 102) that 
     would require the Secretary of Defense to designate an 
     official within the Office of the Secretary of Defense to 
     perform this function.
       The House recedes with an amendment that would establish a 
     Director of Cost Assessment and Performance Evaluation, who 
     would be responsible for ensuring that cost estimates are 
     fair, reliable, and unbiased, and for performing program 
     analysis and evaluation functions currently performed by the 
     Director of Program Analysis and Evaluation. The provision 
     would also codify the cost estimating requirements from the 
     Senate bill and the House amendment in a new section 2334 of 
     title 10, United States Code.
     Directors of Developmental Test and Evaluation and Systems 
         Engineering (sec. 102)
       The Senate bill contained a provision (sec. 101) that would 
     require certain reports on systems engineering capabilities 
     of the Department of Defense. The Senate bill also contained 
     a provision (sec. 102) that would establish the position of 
     Director of Developmental Test and Evaluation.
       The House amendment contained provisions (sec. 101 and 103) 
     that would require the

[[Page 13056]]

     Secretary of Defense to appoint senior officials to carry out 
     acquisition oversight functions, including systems 
     engineering and developmental testing.
       The Senate recedes with an amendment that would establish 
     the positions of Director of Developmental Test and 
     Evaluation and Director of Systems Engineering and establish 
     requirements on the issuance of guidance and reports on 
     systems engineering and developmental testing. The amendment 
     would further require the service acquisition executive of 
     each military department and defense agency to implement and 
     report on plans to ensure that the military departments and 
     defense agencies have appropriate developmental test, systems 
     engineering, and development planning resources.
       The Defense Science Board Task Force on Developmental Test 
     and Evaluation reported in May 2008 that the Army has 
     essentially eliminated its developmental testing component, 
     while the Navy and the Air Force have cut their testing 
     workforce by up to 60 percent in some organizations. As a 
     result, ``(a) significant amount of developmental testing is 
     currently performed without a needed degree of government 
     involvement or oversight and in some cases, with limited 
     government access to contractor data.''
       Similarly, the Committee on Pre-Milestone A and Early-Phase 
     Systems Engineering of Air Force Studies Board of the 
     National Research Council reported that ``in recent years the 
     depth of systems engineering (SE) talent in the Air Force has 
     declined owing to policies within the Department of Defense 
     (DOD) that shifted the oversight of SE functions increasingly 
     to outside contractors, as well as to the decline of in-house 
     development planning capabilities in the Air Force. . . . The 
     result is that there are no longer enough experienced systems 
     engineers to fill the positions in programs that need them, 
     particularly within the government.''
       The conferees expect the Director of Developmental Test and 
     Evaluation and the Director of Systems Engineering to work 
     with the military departments and defense agencies to ensure 
     that they rebuild these capabilities and perform the 
     developmental testing and systems engineering functions 
     necessary to ensure the successful execution of major defense 
     acquisition programs. In particular, the conferees expect the 
     military departments to conduct developmental testing early 
     in the execution of a major defense acquisition program, to 
     validate that a system's design is demonstrating appropriate 
     progress toward technological maturity and toward meeting 
     system performance requirements.
     Performance assessments and root cause analyses for major 
         defense acquisition programs (sec. 103)
       The House amendment contained a provision (sec. 104) that 
     would require the Secretary of Defense to designate a senior 
     official in the Office of the Secretary of Defense as the 
     principal Department of Defense official responsible for 
     issuing policies, procedures, and guidance governing the 
     conduct of performance assessments for major defense 
     acquisition programs.
       The Senate bill contained no similar provision.
       The Senate recedes with an amendment that would require the 
     Secretary to designate a senior official responsible for 
     conducting and overseeing performance assessments and root 
     cause analyses for major defense acquisition programs.
     Assessment of technological maturity of critical technologies 
         of major defense acquisition programs by the Director of 
         Defense Research and Engineering (sec. 104)
       The Senate bill contained a provision (sec. 103) that would 
     require the Director of Defense Research and Engineering, in 
     consultation with the Director of Developmental Test and 
     Evaluation, to periodically review and assess the 
     technological maturity and integration risk of critical 
     technologies on major defense acquisition programs.
       The House amendment contained a similar provision (sec. 
     105).
       The Senate recedes with an amendment that would combine the 
     two provisions. The conferees note that the technological 
     maturity standard for major defense acquisition programs at 
     the time of Milestone B approval (or Key Decision Point B 
     approval in the case of space programs) is established by 
     statute in section 2366b of title 10, United States Code. The 
     conferees expect the Director of Defense Research and 
     Engineering to establish appropriate knowledge-based 
     standards for technological maturity at other key points in 
     the acquisition process, as well as appropriate standards for 
     integration risk.
     Role of the commanders of the combatant commands in 
         identifying joint military requirements (sec. 105)
       The Senate bill contained a provision (sec. 105) that would 
     clarify the role of the commanders of the combatant commands 
     in identifying joint military requirements.
       The House amendment contained a similar provision (sec. 
     106).
       The Senate recedes with an amendment to ensure that the 
     Comptroller General review required by the provision would 
     address the full range of issues raised by recent legislative 
     changes to the process for the identification of joint 
     military requirements.


                   LEGISLATIVE PROVISION NOT ADOPTED

     Clarification of submittal of certification of adequacy of 
         budgets by the Director of the Department of Defense Test 
         Resource Management Center
       The Senate bill contained a provision (sec. 106) that would 
     clarify the impact of organizational changes made in the 
     Senate bill on the requirement for the Director of the 
     Department of Defense Test Resource Management Center to 
     certify the adequacy of budgets to the Secretary of Defense.
       The House amendment contained no similar provision.
       The Senate recedes. The provision is unnecessary, because 
     the organizational changes to the Defense Test Resource 
     Management Center that required the clarification are not 
     included in the conference report.

                      TITLE II--ACQUISITION POLICY

     Consideration of trade-offs among cost, schedule, and 
         performance objectives in Department of Defense 
         acquisition programs (sec. 201)
       The Senate bill contained a provision (sec. 201) that would 
     require the Department of Defense to implement mechanisms to 
     ensure that trade-offs among cost, schedule, and performance 
     objectives are considered early in the process of developing 
     requirements for major weapon systems.
       The House amendment contained a provision (sec. 207) that 
     would require the Comptroller General to review and report to 
     Congress on mechanisms used by the Department to make such 
     trade-offs.
       The House recedes with an amendment clarifying the required 
     mechanisms. The conference amendment includes a requirement 
     for the Secretary of Defense to review proposed joint 
     military requirements to ensure that the Joint Requirements 
     Oversight Council has given appropriate consideration to 
     trade-offs between cost, schedule, and performance 
     objectives. The Secretary would have flexibility to determine 
     how best to conduct the required review.
     Acquisition strategies to ensure competition throughout the 
         lifecycle of major defense acquisition programs (sec. 
         202)
       The Senate bill contained a provision (sec. 203) that would 
     require the Secretary of Defense to ensure that the 
     acquisition strategy 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. The Senate provision would also 
     establish certain requirements for the use of prototypes on 
     major defense acquisition programs.
       The House amendment contained a similar provision (sec. 
     201), but did not include requirements for the use of 
     prototypes.
       The House recedes with an amendment combining elements from 
     the Senate bill and the House amendment. The Senate language 
     on prototypes is addressed in a separate section.
     Prototyping requirements for major defense acquisition 
         programs (sec. 203)
       The Senate bill contained a provision (sec. 203(c) and (d)) 
     that would establish prototyping requirements for major 
     defense acquisition programs.
       The House amendment contained no similar provision.
       The House recedes with an amendment that would simplify the 
     requirement.
     Actions to identify and address systemic problems in major 
         defense acquisition programs prior to Milestone B 
         approval (sec. 204)
       The House amendment contained a provision (sec. 203) that 
     would enhance requirements for the Department of Defense to 
     identify and address systemic problems in major defense 
     acquisition programs before Milestone B approval, while such 
     programs are still in the technology development phase.
       The Senate bill contained no similar provision.
       The Senate recedes with a clarifying amendment. The 
     conferees agree that greater investment of time and resources 
     in the technology development phase is likely to result in 
     better overall program performance and lower overall program 
     costs. For this reason, increased time or expenditures for 
     early testing and development should not alone be taken as an 
     indication that a program is troubled and needs to be 
     terminated or restructured.
     Additional requirements for certain major defense acquisition 
         programs (sec. 205)
       The Senate bill contained a provision (sec. 202) that would 
     establish certain requirements relating to preliminary design 
     review and critical design review for major defense 
     acquisition programs.
       The House amendment contained a provision (sec. 202) that 
     would establish new procedures for programs that fail to meet 
     all of the requirements for Milestone B certification under 
     section 2366b of title 10, United States Code, and would 
     establish requirements relating to preliminary design review 
     for major defense acquisition programs.
       The Senate recedes with a clarifying amendment. The 
     conference amendment

[[Page 13057]]

     does not include the Senate provision regarding critical 
     design review, because this requirement is already addressed 
     in Department of Defense Instruction 5000.02 (December 2008 
     revision). The conferees view this requirement as a key step 
     in a knowledge-based approach to acquisition, and expect to 
     revisit this issue if the current requirement for critical 
     design review is discontinued or is not enforced.
     Critical cost growth in major defense acquisition programs 
         (sec. 206)
       The Senate bill contained a provision (sec. 204) that would 
     strengthen the so-called ``Nunn-McCurdy'' requirements in 
     section 2433(e)(2) of title 10, United States Code, for major 
     defense acquisition programs that experience excessive cost 
     growth.
       The House amendment contained a similar provision (sec. 
     204).
       The House recedes with an amendment combining elements from 
     the Senate bill and the House amendment. The conference 
     amendment would also recodify these requirements in a new 
     section 2433a of title 10, United States Code.
     Organizational conflicts of interest in major defense 
         acquisition programs (sec. 207)
       The Senate bill contained a provision (sec. 205) that would 
     require the Under Secretary of Defense for Acquisition, 
     Technology, and Logistics to issue regulations addressing 
     organizational conflicts of interest by contractors in the 
     acquisition of major weapon systems.
       The House amendment contained a similar provision (sec. 
     205).
       The House recedes with an amendment combining elements from 
     the Senate bill and the House amendment. Existing Department 
     of Defense regulations leave it up to individual elements of 
     the Department to determine on a case-by-case basis whether 
     or not organizational conflicts of interest can be mitigated, 
     and if so, what mitigation measures are required. The 
     conferees agree that additional guidance is required to 
     tighten existing requirements, provide consistency throughout 
     the Department, and ensure that advice provided by 
     contractors is objective and unbiased. In developing the 
     regulations required by this section for cases in which 
     mitigation is determined to be appropriate, the conferees 
     expect the Secretary to give consideration to strengthened 
     measures of organizational separation of the type included in 
     the Senate bill.

              TITLE III--ADDITIONAL ACQUISITION PROVISIONS

     Awards for Department of Defense personnel for excellence in 
         the acquisition of products and services (sec. 301)
       The Senate bill contained a provision (sec. 206) that would 
     direct the Secretary of Defense to establish a program to 
     recognize excellent performance by individuals and teams in 
     the acquisition of products and services for the Department 
     of Defense.
       The House amendment contained an identical provision (sec. 
     206). The conference report includes this provision.
     Earned value management (sec. 302)
       The Senate bill contained a provision (sec. 207) that would 
     require the Under Secretary of Defense for Acquisition, 
     Technology, and Logistics to review and improve guidance 
     governing the implementation of Earned Value Management (EVM) 
     systems for Department of Defense (DOD) contracts.
       The House amendment contained no similar provision.
       The House recedes with an amendment that would incorporate 
     the requirements of the Senate provision into section 887 of 
     the Duncan Hunter National Defense Authorization Act for 
     Fiscal Year 2009 (Public Law 110-417), which requires the 
     Secretary of Defense to identify and address shortcomings in 
     EVM systems for DOD contracts.
     Expansion of national security objectives of the national 
         technology and industrial base (sec. 303)
       The Senate bill contained a provision (sec. 208) that would 
     amend section 2501 of title 10, United States Code, to 
     address critical design skills in the national technology and 
     industrial base and require reports on the termination of 
     major defense acquisition programs.
       The House amendment contained no similar provision.
       The House recedes with an amendment requiring that defense 
     capability assessments performed pursuant to section 2505 of 
     title 10, United States Code, consider the effects of the 
     termination of major defense acquisition programs. The 
     outcome of this assessment would be incorporated into the 
     annual reports required by section 2504 of title 10, United 
     States Code.
     Comptroller General of the United States reports on costs and 
         financial information regarding major defense acquisition 
         programs (sec. 304)
       The Senate bill contained two provisions (sec. 104(b) and 
     sec. 209) that would require reports by the Government 
     Accountability Office on: (1) operating and support costs of 
     major weapon systems; and (2) financial information relating 
     to major defense acquisition programs.
       The House amendment contained no similar provision.
       The House recedes with an amendment incorporating the two 
     reporting requirements into a single provision.

                 COMPLIANCE WITH SENATE AND HOUSE RULES

     Compliance with rules of the Senate and the House of 
         Representatives regarding earmarks and congressionally 
         directed spending items
       Pursuant to clause 9 of rule XXI of the Rules of the House 
     of Representatives and Rule XLIV(3) of the Standing Rules of 
     the Senate, neither this conference report nor the 
     accompanying joint statement of managers contains any 
     congressional earmarks, congressionally directed spending 
     items, limited tax benefits, or limited tariff benefits, as 
     defined in such rules.

     Ike Skelton,
     John M. Spratt,
     Solomon P. Ortiz,
     Gene Taylor,
     Neil Abercrombie,
     Silvestre Reyes,
     Vic Snyder,
     Adam Smith,
     Loretta Sanchez,
     Mike McIntyre,
     Ellen O. Tauscher,
     Robert E. Andrews,
     Susan A. Davis,
     James R. Langevin,
     Jim Cooper,
     Brad Ellsworth,
     Joe Sestak,
     John M. McHugh,
     Roscoe G. Bartlett,
     Howard ``Buck'' McKeon,
     Mac Thornberry,
     Walter B. Jones,
     W. Todd Akin,
     J. Randy Forbes,
     Jeff Miller,
     Joe Wilson,
     K. Michael Conaway,
     Duncan Hunter,
     Mike Coffman,
                                Managers on the Part of the House.

     Carl Levin,
     Edward M. Kennedy,
     Robert C. Byrd,
     Joseph Lieberman,
     Jack Reed,
     Daniel K. Akaka,
     Bill Nelson,
     Ben Nelson,
     Evan Bayh,
     Jim Webb,
     Claire McCaskill,
     Mark Udall,
     Kay R. Hagan,
     Mark Begich,
     Roland W. Burris,
     John McCain,
     James M. Inhofe,
     Jeff Sessions,
     Saxby Chambliss,
     Lindsey Graham,
     John Thune,
     Mel Martinez,
     Roger F. Wicker,
     Richard Burr,
     David Vitter,
     Susan Collins,
     Managers on the Part of the Senate.

                          ____________________