[Congressional Record (Bound Edition), Volume 155 (2009), Part 9]
[Senate]
[Pages 11900-11911]
[From the U.S. Government Publishing Office, www.gpo.gov]




             WEAPON SYSTEMS ACQUISITION REFORM ACT OF 2009

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 454, which the clerk will report.
  The assistant legislative clerk read as follows:

       A 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.


                    Amendment No. 1052, as Modified

  Mr. LEVIN. Mr. President, I now send a modified Murray amendment to 
the desk and ask that it be called up.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Michigan [Mr. Levin], for Mrs. Murray and 
     Mr. Chambliss, proposes an amendment numbered 1052, as 
     modified.

  Mr. LEVIN. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment, as modified, is as follows:

       At the end of title II, add the following:

     SEC. 207. EXPANSION OF NATIONAL SECURITY OBJECTIVES OF THE 
                   NATIONAL TECHNOLOGY AND INDUSTRIAL BASE.

       (a) In General.--Subsection (a) of section 2501 of title 
     10, United States Code, is amended by adding at the end the 
     following new paragraph:
       ``(6) Maintaining critical design skills to ensure that the 
     armed forces are provided with systems capable of ensuring 
     technological superiority over potential adversaries.''.
       (b) Notification of Congress Upon Termination of MDAPS of 
     Effects on National Security Objectives.--Such section is 
     further amended by adding at the end the following new 
     subsection:
       ``(c) Notification of Congress Upon Termination of Major 
     Defense Acquisition Program of Effects on Objectives.--(1) 
     Upon the termination of a major defense acquisition program, 
     the Secretary of Defense shall notify Congress of the effects 
     of such termination on the national security objectives for 
     the national technology and industrial base set forth in 
     subsection (a), and the measures, if any, that have been 
     taken or should be taken to mitigate those effects.
       ``(2) In this subsection, the term `major defense 
     acquisition program' has the meaning given that term in 
     section 2430 of this title.''.

  Mr. LEVIN. Mr. President, Senator Murray introduced an important 
amendment yesterday and spoke about it last night. It is intended to 
make certain that when the Secretary of Defense looks at the question 
of cost and whether weapon systems should be continued, that at least 
the Secretary looks into the impact on the industrial base.
  The amendment has been modified now in a way that makes this 
acceptable. The Senator from Washington has put her finger on a very 
significant issue, which is the industrial manufacturing base of the 
country. But it has been modified in a way that would not make it 
difficult or impossible for us to do what we need to do relative to 
ending the production of weapon systems which, for instance, are no 
longer useful or have so outlived or outdone the expectations for the 
system and exceeded the expected expense that they are no longer 
practical in terms of their continued production.
  So she has raised an important issue. It will be considered by the 
Secretary of Defense when these decisions are made. But the thrust of 
our bill is to make it possible to end the production of weapon systems 
if they are so costly that they no longer make sense or if they are not 
working effectively. That is the thrust of this bill, the heart of the 
matter. Her contribution does not detract or diminish that important 
point of our bill.
  So we support that modified amendment and ask that the Senate adopt 
it.
  The PRESIDING OFFICER. Is there further debate on the amendment? If 
not, the question is on agreeing to the amendment, as modified.
  The amendment (No. 1052), as modified, was agreed to.
  Mr. LEVIN. Mr. President, I move to reconsider the vote.
  Mr. McCAIN. Mr. President, I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Arizona.


                           Amendment No. 1057

  Mr. McCAIN. Mr. President, I ask unanimous consent to call up 
amendment No. 1057, offered by the Senator from Oklahoma, Mr. Coburn.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain], for Mr. Coburn, 
     proposes an amendment numbered 1057.

  Mr. McCAIN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To require a plan for the elimination of weaknesses in 
  operations that hinder the capacity to assemble and assess reliable 
  cost information on assets acquired under major defense acquisition 
                               programs)

       At the end of title II, add the following:

     SEC. 207. PLAN FOR ELIMINATION OF WEAKNESSES IN OPERATIONS 
                   THAT HINDER CAPACITY TO ASSEMBLE AND ASSESS 
                   RELIABLE COST INFORMATION ON ACQUIRED ASSETS 
                   UNDER MAJOR DEFENSE ACQUISITION PROGRAMS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Chief Management Officer of 
     the Department of Defense shall submit to Congress a report 
     setting forth a plan to identify and address weaknesses in 
     operations that hinder the capacity to assemble and assess 
     reliable cost information on the systems and assets to be 
     acquired under major defense acquisition programs.
       (b) Elements.--The report required under subsection (a) 
     shall include the following:
       (1) Mechanisms to identify any weaknesses in operations 
     under major defense acquisition programs that hinder the 
     capacity to assemble and assess reliable cost information on 
     the systems and assets to be acquired under such programs in 
     accordance with applicable accounting standards.
       (2) Mechanisms to address weaknesses in operations under 
     major defense acquisition programs identified pursuant to the 
     utilization of the mechanisms set forth under paragraph (1).
       (3) A description of the proposed implementation of the 
     mechanisms set forth pursuant to paragraph (2) to address the 
     weaknesses described in that paragraph, including--
       (A) the actions to be taken to implement such mechanisms;
       (B) a schedule for carrying out such mechanisms; and
       (C) metrics for assessing the progress made in carrying out 
     such mechanisms.
       (4) A description of the organization and resources 
     required to carry out mechanisms set forth pursuant to 
     paragraphs (1) and (2).
       (5) In the case of the financial management practices of 
     each military department applicable to major defense 
     acquisition programs--
       (A) a description of any weaknesses in such practices; and
       (B) a description of the actions to be taken to remedy such 
     weaknesses.
       (c) Consultation.--
       (1) In general.--In preparing the report required by 
     subsection (a), the Chief Management Officer of the 
     Department of Defense shall seek and consider input from each 
     of the following:
       (A) The Chief Management Officer of the Department of the 
     Army.
       (B) The Chief Management Officer of the Department of the 
     Navy.
       (C) The Chief Management Officer of the Department of the 
     Air Force.
       (2) Financial management practices.--In preparing for the 
     report required by subsection (a) the matters covered by 
     subsection (b)(5) with respect to a particular military 
     department, the Chief Management Officer of the Department of 
     Defense shall consult specifically with the Chief Management 
     Officer of the military department concerned.

  Mr. McCAIN. I urge adoption of the amendment.
  The PRESIDING OFFICER. Is there further debate? If not, the question 
is on agreeing to the amendment.
  The amendment (No. 1057) was agreed to.
  Mr. McCAIN. Mr. President, I move to reconsider the vote.
  Mr. LEVIN. I move to lay that motion on the table.

[[Page 11901]]

  The motion to lay on the table was agreed to.
  Mr. McCAIN. Mr. President, I believe there is a Senator coming over 
to speak, and I think that is the last speaker on this bill that I know 
of. So in the meantime, awaiting his arrival, I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Mr. President, I agree with Senator McCain that we know of 
no more amendments that are going to be offered. But there are one or 
two Senators who may want to speak on either their amendments which 
have been adopted or on the bill itself, and we will know that within 
the next few minutes.
  What we are exploring in both our cloakrooms is whether we could 
possibly have a vote on final passage in about 10 or 15 minutes. We do 
not know if that is a possibility yet. If not, we would vote on final 
passage sometime probably early this afternoon. But we are trying now 
to identify what the time would be for a vote on final passage, and, 
hopefully, we will have more to say on that in the next few moments.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. COBURN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COBURN. Mr. President, first of all, let me relay my appreciation 
to both the chairman and the ranking member for this bill. It does a 
lot of things that needed to be done for a long time. I would also say 
it will not do anything unless the President puts in the right person 
who has the right character; that is, mean as all get out, thorough, 
and comprehensive in what they are going to do and plans on staying 
there for a long time.
  The other points I wanted to make, and I will be brief--really there 
are two. I have listened to all of this debate, not necessarily here 
but from my office. There is one thing that is missing in the debate. 
We have had the problem with contractors, and there is a problem with 
the Pentagon. But not once did I hear there is a problem with us.
  The real reason we have gotten into trouble to the degree we have is 
because we have not done the oversight. We have not done our job. So we 
are seeing a great response now by the leadership of the Armed Services 
Committee to do some of the right things. But had we been doing our 
job, much of what we see in terms of failed major procurement systems, 
lack of transparency, we could have had that transparency had we been 
doing the oversight.
  I will give you an example. Senator Carper and I did the transparency 
on the C-5 retrofit, and we had a supposed Nunn-McCurdy breach when, in 
fact, there was not a Nunn-McCurdy breach. The people wanted there to 
be a Nunn-McCurdy breach. The fact is, we could in fact cut down costs, 
create transparency, not just with the effects of what this bill is 
going to do, but if we are much more aggressive.
  The last point I will make is that there is no question that the 
earmarking process hampers us far more than it helps us in the 
Pentagon. When we see the amount of time that is spent on most projects 
versus oversight, the American taxpayers are getting shortchanged. They 
are just getting shortchanged.
  I hope people will recognize that although sometimes earmarks turn 
out to be fantastic, the vast majority of times they do not, and we 
spend staff time doing that rather than managing what is happening 
there today.
  Our No. 1 charge under the Constitution is the defense of this 
country, and we do not just spend $500 billion on that or $600 billion. 
When we add up everything we spend, it comes--if we count nuclear 
weapons maintenance and we count the research for nuclear warheads, if 
we count everything that goes through, we are about at $1 trillion. 
When we add everything else, that comes to that. And we are highly 
inefficient.
  I am very appreciative with what is happening within this bill. But I 
think the American public ought to recognize that the earmarking 
process in Congress has hurt the Defense Department because it has 
taken away from us doing our regular job.
  No. 2, Congress has hurt our procurement and our ability to defend 
ourselves because we are not doing the work we need to be doing, the 
oversight on a monthly basis on major programs. We cannot depend on IGs 
and the GAO. We have to ask them: Are you on time? Are you meeting the 
schedule we need to do this because we are putting one-third of our 
assets that we expend every year into defense? It is rich. And when we 
pay out $7, $8 billion for performance contracts that the performance 
contractor did not make, did not meet the requirements, but we pay it 
anyhow, we are the ones who allow that to happen.
  Finally, the last point I will make: Until we address the revolving 
door of working in the Pentagon and going to work for a contractor and 
how that impacts what people do in terms of procurement and major 
decisions, we are not going to solve this problem. Whether it is an 
ethical constraint or a positive statement of principles, somehow we 
have to address that issue because we cannot blame the people who are 
looking for their next job to be less than perfectly independent in 
this job if, in fact, it is going to affect their future.
  So we have not addressed that in this bill, but that is still one of 
the things that has to be addressed because it is problematic not only 
in terms of how well we do but what we get for what we actually pay 
out.
  Again, I thank the chairman and ranking member. I appreciate their 
work. I appreciate them taking our amendment. My hope is that when we 
combine what we have put forward with a--I cannot use the word I want 
to use on the Senate floor--but someone of significantly tough demeanor 
to ramrod this through there, that, in fact, we will see great savings, 
better performance, and better procurement for the American taxpayers.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Let me thank the Senator from Oklahoma for his amendment. 
It was just adopted. It is a very significant amendment, and what it 
reflects is the determination of the Senator from Oklahoma to get the 
Defense Department to do something that in law they are required to do, 
which is to give us a financial statement which receives a clean audit 
opinion.
  They haven't done that for decades. We have tried various ways to do 
it. The voice of the Senator from Oklahoma is a welcome addition to 
this effort, and we appreciate his amendment and his willingness to 
work with us on the exact language thereof.


                              nunn-mccurdy

  Ms. COLLINS. Mr. President, would the Senator yield for a question?
  Some have expressed concerns that changes proposed by this bill could 
cause Nunn-McCurdy breaches even when a program is performing well and 
when the Department has provided well-defined requirements. In 
particular these experts have pointed to the potential for unit cost 
breaches that could be caused by policy decisions to reduce the number 
of units that would be purchased by the program. These policy decisions 
could originate in the executive branch or Congress and could be made 
regardless of past program performance. Do you believe this legislation 
will have that effect, and, if so, was that your intention?
  Mr. Levin. I thank the Senator for her inquiry. This legislation 
would not change the existing Nunn-McCurdy thresholds for unit cost 
breaches. I do not believe that programs that are performing well have 
breached Nunn-McCurdy thresholds in the past as a result of changes in 
the quantity of units procured under a program, and I do not consider 
it likely in the future. In the

[[Page 11902]]

case of a program that is not performing well, a change in unit 
quantities may be sufficient to push a program over the thresholds. 
This is a factor that the Department may consider in deciding whether 
and how to continue with the program. For programs performing well, 
however, the likelihood of a breach is extremely small. Nonetheless, it 
is certainly not our intention to penalize programs performing well, 
and I look forward to continuing to work with the Senator as this bill 
proceeds through Congress to address these concerns.


                    NIP-Funded Acquisition Programs

  Mrs. FEINSTEIN. Mr. President, S. 454, the Weapon Systems Acquisition 
Reform Act of 2009, is important legislation to improve the 
organization and procedures of the Department of Defense for the 
acquisition of major weapons systems and other major defense systems. 
Chairman Levin and Ranking Member McCain are to be congratulated for 
reporting this bill from their committee with strong bipartisan 
support.
  As my colleagues know, many of our most important, and costly, 
national intelligence programs are acquired by intelligence community 
agencies that are found within the Department of Defense. Like the 
Senate Armed Services Committee, the Select Committee on Intelligence, 
where the chairman and ranking member of the Armed Services Committee 
sit as ex officio members, has been concerned for many years about the 
need to improve the intelligence acquisition process and its oversight 
in order to ensure we are making maximum best use of intelligence 
resources.
  The Congress looks to the Director of National Intelligence to manage 
and be accountable for major systems acquisitions funded by the 
National Intelligence Program, NIP, even though these acquisitions are 
executed in other departments and agencies of the Federal Government. 
While many of us have had concerns about the implementation of the 
Intelligence Reform and Terrorism Prevention Act, IRPTA, of 2004, the 
creation of the Office of the Director of National Intelligence, DNI, 
and the establishment of the roles and responsibilities of that office 
were important accomplishments that we on the Intelligence Committee 
wish to see strengthened through robust implementation of the 
provisions of that act.
  The Intelligence Reform and Terrorism Prevention Act gave the DNI 
broad acquisition authorities over the NIP, but for NIP programs 
conducted within the DOD, the act required that the DNI and the 
Secretary of Defense share these authorities. Specifically, the act 
required: ``For each intelligence program within the National 
Intelligence Program for the acquisition of a major system, the 
Director of National Intelligence shall . . . serve as exclusive 
milestone decision authority, except that with respect to the 
Department of Defense programs the Director shall serve as milestone 
decision authority jointly with the Secretary of Defense or the 
designee of the Secretary.''
  Subsequently, Director of National Intelligence Michael McConnell and 
Secretary of Defense Robert Gates agreed in a memorandum of agreement, 
MOA, signed in March 2008 that this joint milestone decision authority 
would be extended to majority NIP-funded acquisition programs as well. 
They agreed that wholly and majority NIP-funded acquisition programs 
would be executed according to intelligence community acquisition 
policy. The MOA states that its purpose is to provide for ``a single 
acquisition process'' for programs covered by it. I am sure that we 
will all agree, as the DNI and the Secretary of Defense have done, that 
it is vitally important that these important intelligence acquisitions 
be governed by a clear process with clear lines of responsibility as 
provided for by the MOA.
  The MOA of the DNI and Secretary of Defense was later implemented in 
DOD Instruction No. 5000.2 on December 8, 2008.
  It should also be pointed out that in fact wholly and majority NIP-
funded major system acquisitions executed in accordance with 
intelligence community acquisition policies are now usually deemed to 
be ``highly sensitive classified programs'' under title 10 U.S.C. 2430
  Because S. 454 would cover all ``major defense acquisition programs'' 
within the meaning of title 10 U.S.C. 2430, not just major weapons 
systems, I appreciate Chairman Levin agreeing to this colloquy to 
clarify the impact of the legislation on NIP-funded acquisition 
programs executed within the Department of Defense.
  Mr. Chairman, is it the case that S. 454 would not extend DOD's 
jurisdiction to any programs over which it does not already have 
authority and that to the extent that NIP programs are outside the DOD 
acquisition system today, they would not be brought into the DOD 
acquisition system by this bill?
  Mr. LEVIN. That is the case. This bill would neither extend nor 
contract DOD's jurisdiction or authority over the acquisition programs 
of DOD components that are a part of the intelligence community.
  Mrs. FEINSTEIN. Mr. Chairman, do you further agree that this bill is 
not intended to change the DNI's roles and responsibilities under the 
Intelligence Reform and Terrorism Protection Act of 2004 or to require 
revision of the March 2008 memorandum of agreement between the DNI and 
Secretary of Defense concerning NIP-funded acquisition programs?
  Mr. LEVIN. I agree with the chairman of the Intelligence Committee. 
S. 454 is not intended to amend IRTPA or to modify the respective 
authorities of the DNI and the Secretary of Defense under that statute. 
S. 454 does not address the March 2008 memorandum of agreement between 
the DNI and the Secretary of Defense concerning NIP-funded acquisition 
programs. It neither ratifies that memorandum of agreement nor requires 
any modification to the memorandum of agreement.
  Mrs. FEINSTEIN. I thank the distinguished chairman of the Armed 
Services Committee and manager of this bill.
  Ms. SNOWE. Mr. President, as ranking member of the Senate Committee 
on Small Business and Entrepreneurship, I rise with my colleague 
Senator Collins, to file this vital amendment to correct disparities 
among the Small Business Administration's, SBA, small business 
contracting programs and thus create a more equitable method for 
Federal agencies to fairly allocate Federal procurement dollars to 
small business contractors across the nation.
  This targeted amendment reflects a proposed rule promulgated last 
year, March 2008, by the Department of Defense, DOD, the Government 
Services Administration, GSA, and the National Aeronautics and Space 
Administration, NASA, which requires the Federal Acquisitions 
Regulations, FAR, clearly reflect the SBA's interpretation of the Small 
Business Act and the SBA's analysis of its own regulations and provide 
an equal playing field for small business firms who participate in the 
Federal contracting marketplace. The SBA's own counsel asserts that 
parity legislation must be adopted because Federal agencies `` must be 
afforded some discretion in determining which small business program to 
utilize.'' Parties agree that small business should be treated 
uniformly.
  Our amendment would provide Federal agencies with the necessary 
flexibility to satisfy their Government-wide statutory small business 
contracting goals. It would provide these agencies with the ability to 
achieve their goaling requirements equally through an award to a small 
business, a historically underutilized business zone, HUBZone, small 
business concern, a service-disabled veteran-owned small business, 
SDVOSB, firm, or a small business participating in the 8(a) Business 
Development Program. Of course this list should also include the 
Women's Procurement Program once it finally becomes fully implemented 
by the SBA.
  For years, it has been unclear to the acquisition community what, if 
any, is the true order of preference when determining which small 
business contracting program is at the top of the agency's priority 
list. This amendment will make clear to purchasing agencies

[[Page 11903]]

that contracting officers may award contracts to HUBZone, SDVOSB, 8(a) 
firms with equal deference to each program.
  This amendment represents the essence of true parity--where each 
program has an equal chance of being selected for an award. And during 
these difficult economic times, it is imperative that small business 
contractors possess an equal opportunity to compete for Federal 
contracts on the same playing field with each other.
  I urge my colleagues on both sides of the aisle to support this 
amendment.
  Mr. CASEY. Mr. President, I rise to express my strong support for the 
Weapons System Acquisition Reform Act, introduced by the two leading 
military experts in the U.S. Senate today--Senators Carl Levin and John 
McCain. This rapid passage, after years of delay and inaction, has 
occurred in part because of the strong support demonstrated by 
President Obama. The President, in public remarks recently on this 
issue, reaffirmed his strong commitment to be a wise steward of the 
American taxpayer's dollars. That commitment to fiscal prudence and 
wise budgeting must apply equally to the Pentagon as it does any other 
Cabinet Department. Those who argue that it is acceptable to tolerate 
some waste and inefficiency in our military budgets because we are 
talking about our national security have it wrong. It is precisely 
because our security is at stake that we must ensure, as Secretary 
Gates has said, every dollar wasted on cost overruns or inefficient 
contracting is a dollar that cannot be spent on our men and women in 
service and making sure they have the right tools to succeed.
  Defense acquisition reform is one of those perennial Washington 
issues that everyone talks about, but nobody ever seems to get around 
to solving. Many of my colleagues, in the debate over the past 2 days, 
have cited the GAO report last year chronicling $296 billion in 
cumulative cost overruns in the 96 major acquisition programs currently 
maintained by the Pentagon. But I would like to quote from another 
report:

     public confidence in the effectiveness of the defense 
     acquisition system has been shaken by a spate of ``horror 
     stories''--overpriced spare parts, test deficiencies, and 
     cost and schedule overruns. Unwelcome at any time, such 
     stories are particularly unsettling when the Administration 
     and Congress are seeking ways to deal with record budget 
     deficits.

  This other report was not published this year or last year. I am 
quoting from the legendary Packard Report, published in 1986, which 
offered a scathing indictment of the defense acquisition process. 
Unfortunately, little seems to have changed in the intervening 23 
years, and in some respects, our procurement system has only 
deteriorated.
  Year after year, we hear of cost overruns and schedule delays that 
cost the American taxpayer billions of dollars. Yet we never seem to 
muster the political will to tackle the problem and crack down on the 
systemic flaws that produce these chronic poor results. So I am very 
pleased that this legislation has moved from introduction to committee 
markup to final Senate passage in a matter of months--after years of 
reports and blue ribbon commission of studies emphasizing the need for 
fundamental reform of the process by which the Pentagon purchases the 
weapons systems used every day by our brave men and women.
  The Levin-McCain bill on the floor today seeks to address key 
deficiencies in the early stages of the acquisition process for a 
weapons system, where many of the problems first materialize. The 
legislation would support the Pentagon's efforts to rebuild its 
procurement workforce, which has been dismantled over the past fifteen 
years and contracted out. It would establish an independent office in 
the Pentagon to assess initial cost estimates provided for weapons 
systems, to ensure that rose-colored cost predictions are no longer 
permitted to pass muster. Finally, the bill reinforces so-called Nunn-
McCurdy provisions to ensure that programs that go seriously off track 
are terminated unless there is a compelling reason not to do so.
  I was also proud to serve as a cosponsor on a series of important 
amendments offered by my colleague from Missouri, Senator McCaskill. I 
applaud the Senator's single-minded determination to root out waste, 
fraud and abuse in our procurement and contracting systems, and I am 
very pleased to collaborate with her on these important amendments, all 
of which have been accepted by voice vote. Briefly, the amendments 
ensure that our war fighters in the field, as represented by the 
Combatant Commanders, provide input to the weapons acquisition process; 
offer an opportunity for the key Pentagon civilian official in charge 
of acquisition to sign off on all acquisition program decisions made 
something that oddly does not yet occur on a regular basis; and 
strengthen safeguards to ensure competitive prototyping for all major 
weapons systems before final purchase decisions are made.
  What matters, at the end of the day, is not just the dollars we save. 
All of us have a fiduciary responsibility to safeguard the interests of 
our young men and women who serve our nation. We cannot continue paying 
excess dollars on out of control weapons acquisition programs while we 
shortchange our troops on time at home from extended deployments and 
the full range of benefits they and their families deserve. That is at 
the heart of why the Levin-McCain acquisition reform legislation must 
be enacted into law by Memorial Day, as called for by the President.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LEVIN. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEVIN. Mr. President, we are approaching the end of our debate. I 
believe the Senator from Alabama wishes to speak for up to 5 minutes.
  I ask unanimous consent that no further amendments be in order, that 
following the remarks of Senator Sessions, the Senate proceed as 
provided for under a previous order with respect to passage of S. 454.
  The PRESIDING OFFICER. Is there objection?
  Mr. McCAIN. Reserving the right to object--and I will not object--I 
thank the chairman and all the staff for the hard work they have done 
on this legislation. Many hundreds of hours have been put in, as well 
as hours of hearings. I thank the chairman for his leadership and the 
kind of nonpartisanship these important issues require for the good of 
the country.
  I do not object.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Michigan.
  Mr. LEVIN. Mr. President, I join in thanking Senator McCain and our 
staffs. The work that has gone into this bill has been extraordinary on 
the part of both staffs. I will get into that after passage of the bill 
and have perhaps further thoughts. The role of Senator McCain has been 
absolutely invaluable and essential. We have worked together very 
closely; as he puts it, in a nonpartisan way. I thank him and his staff 
as well as my own.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I thank Senators Levin and McCain for 
their work. We do need to address wasteful spending. Both of these 
Senators understand it. Senator McCain has always been willing to 
challenge programs he thinks are not justified for the warfighter.
  I wish to note a few things before we vote on passage as well as urge 
support for the legislation. First, the legitimate concerns voiced by 
the Department of Defense about the implications of this bill have been 
listened to and have been reasonably accommodated. I wish to highlight 
a few points identified by a report last month by the Government 
Accountability Office, the independent GAO, titled ``Defense 
Acquisitions, Assessments of Selected Weapon Programs.''
  Since 2003, the number of major defense acquisitions programs has 
grown from 77 to 96. All 96 programs were assessed by GAO. They found 
investment

[[Page 11904]]

in these programs had grown from $1.2 trillion to $1.6 trillion. 
Research and development costs are now 42 percent higher than 
originally expected. The cumulative cost growth was $296 billion. I 
find that to be a stunning number. I almost have to believe that 
somehow they calculated it in an excessive way. Sometimes numbers can 
look misleading. But if it is a third of that, we have a major problem. 
They concluded the cost growth on these programs was almost $300 
billion. The average delay in delivering the initial capabilities has 
increased to 22 months. So we have an excessive delay in producing our 
capabilities. GAO found that only 28 percent of the programs were 
expected to be delivered on time or ahead of schedule.
  To combat cost growth, they found that quantities; that is, the 
number of the weapon systems and vehicles and other things that were to 
be produced, had to be reduced by 25 percent or more for 15 of the 
programs in the 2008 portfolio, and 10 of the largest acquisition 
programs, which account for half the overall acquisition dollars in the 
portfolio, have seen quantities reduced by almost one-third.
  When the price per item goes up significantly, often the compensating 
action is to reduce the numbers. But the net reality is, that the 
taxpayer hasn't received as much as they expected out of the program. 
So clearly these statistics are disturbing and underscore the need for 
this important legislation and reform.
  In summary, our warfighters are receiving less capability at a higher 
cost than was originally agreed upon. I believe this bill will improve 
the acquisition process by ensuring the Department and industry are 
more thoughtful when estimating the production cost at the beginning 
and the total life cycle cost of these programs. While I am mindful 
that acquisition reforms can continue to be improved, I encourage 
colleagues to vote in favor of this legislation. It is clearly a step 
in the right direction.
  I salute our chairman and our ranking member, Senators Levin and 
McCain, for this accomplishment.
  I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the substitute 
amendment, as amended, is agreed to.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  Mr. LEVIN. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be.
  The question is on the passage of the bill.
  The clerk will call the roll.
  Mr. DURBIN. I announce that the Senator from South Dakota (Mr. 
Johnson), the Senator from Massachusetts (Mr. Kennedy), the Senator 
from New Jersey (Mr. Lautenberg), the Senator from New Jersey (Mr. 
Menendez), and the Senator from West Virginia (Mr. Rockefeller) are 
necessarily absent.
  I further announce that, if present and voting, the Senator from West 
Virginia (Mr. Rockefeller) would vote ``yea.''
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Missouri (Mr. Bond).
  The PRESIDING OFFICER (Mrs. Hagan). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 93, nays 0, as follows:

                      [Rollcall Vote No. 186 Leg.]

                                YEAS--93

     Akaka
     Alexander
     Barrasso
     Baucus
     Bayh
     Begich
     Bennet
     Bennett
     Bingaman
     Boxer
     Brown
     Brownback
     Bunning
     Burr
     Burris
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Coburn
     Cochran
     Collins
     Conrad
     Corker
     Cornyn
     Crapo
     DeMint
     Dodd
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Gillibrand
     Graham
     Grassley
     Gregg
     Hagan
     Harkin
     Hatch
     Hutchison
     Inhofe
     Inouye
     Isakson
     Johanns
     Kaufman
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     Martinez
     McCain
     McCaskill
     McConnell
     Merkley
     Mikulski
     Murkowski
     Murray
     Nelson (NE)
     Nelson (FL)
     Pryor
     Reed
     Reid
     Risch
     Roberts
     Sanders
     Schumer
     Sessions
     Shaheen
     Shelby
     Snowe
     Specter
     Stabenow
     Tester
     Thune
     Udall (CO)
     Udall (NM)
     Vitter
     Voinovich
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                             NOT VOTING--6

     Bond
     Johnson
     Kennedy
     Lautenberg
     Menendez
     Rockefeller
  The bill (S. 454), as amended, was passed, as follows:

                                 S. 454

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

                   TITLE I--ACQUISITION ORGANIZATION

Sec. 101. Reports on systems engineering capabilities of the Department 
              of Defense.
Sec. 102. Director of Developmental Test and Evaluation.

Sec. 103. Assessment of technological maturity of critical technologies 
              of major defense acquisition programs by the Director of 
              Defense Research and Engineering.
Sec. 104. Director of Independent Cost Assessment.
Sec. 105. Role of the commanders of the combatant commands in 
              identifying joint military requirements.
Sec. 106. Clarification of submittal of certification of adequacy of 
              budgets by the Director of the Department of Defense Test 
              Resource Management Center.

                      TITLE II--ACQUISITION POLICY

Sec. 201. Consideration of trade-offs among cost, schedule, and 
              performance in the acquisition of major weapon systems.
Sec. 202. Preliminary design review and critical design review for 
              major defense acquisition programs.
Sec. 203. Ensuring competition throughout the life cycle of major 
              defense acquisition programs.
Sec. 204. Critical cost growth in major defense acquisition programs.
Sec. 205. Organizational conflicts of interest in the acquisition of 
              major weapon systems.
Sec. 206. Awards for Department of Defense personnel for excellence in 
              the acquisition of products and services.
Sec. 207. Earned Value Management.
Sec. 208. Expansion of national security objectives of the national 
              technology and industrial base.
Sec. 209. Plan for elimination of weaknesses in operations that hinder 
              capacity to assemble and assess reliable cost information 
              on acquired assets under major defense acquisition 
              programs.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) The term ``congressional defense committees'' has the 
     meaning given that term in section 101(a)(16) of title 10, 
     United States Code.
       (2) The term ``major defense acquisition program'' has the 
     meaning given that term in section 2430 of title 10, United 
     States Code.

                   TITLE I--ACQUISITION ORGANIZATION

     SEC. 101. REPORTS ON SYSTEMS ENGINEERING CAPABILITIES OF THE 
                   DEPARTMENT OF DEFENSE.

       (a) Reports by Service Acquisition Executives.--Not later 
     than 180 days after the date of the enactment of this Act, 
     the service acquisition executive of each military department 
     shall submit to the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics a report setting forth 
     the following:
       (1) A description of the extent to which such military 
     department has in place development planning organizations 
     and processes staffed by adequate numbers of personnel with 
     appropriate training and expertise to ensure that--
       (A) key requirements, acquisition, and budget decisions 
     made for each major weapon system prior to Milestones A and B 
     are supported by a rigorous systems analysis and systems 
     engineering process;
       (B) the systems engineering strategy for each major weapon 
     system includes a robust program for improving reliability, 
     availability, maintainability, and sustainability as an 
     integral part of design and development; and
       (C) systems engineering requirements, including 
     reliability, availability, maintainability, and 
     sustainability requirements, are identified during the Joint 
     Capabilities Integration Development System process and 
     incorporated into contract requirements for each major weapon 
     system.

[[Page 11905]]

       (2) A description of the actions that such military 
     department has taken, or plans to take, to--
       (A) establish needed development planning and systems 
     engineering organizations and processes; and
       (B) attract, develop, retain, and reward systems engineers 
     with appropriate levels of hands-on experience and technical 
     expertise to meet the needs of such military department.
       (b) Report by Under Secretary of Defense for Acquisition, 
     Technology, and Logistics.--Not later than 270 days after the 
     date of the enactment of this Act, the Under Secretary of 
     Defense for Acquisition, Technology, and Logistics shall 
     submit to the Committee on Armed Services of the Senate and 
     the Committee on Armed Services of the House of 
     Representatives a report on the system engineering 
     capabilities of the Department of Defense. The report shall 
     include, at a minimum, the following:
       (1) An assessment by the Under Secretary of the reports 
     submitted by the service acquisition executives pursuant to 
     subsection (a) and of the adequacy of the actions that each 
     military department has taken, or plans to take, to meet the 
     systems engineering and development planning needs of such 
     military department.
       (2) An assessment of each of the recommendations of the 
     report on Pre-Milestone A and Early-Phase Systems Engineering 
     of the Air Force Studies Board of the National Research 
     Council, including the recommended checklist of systems 
     engineering issues to be addressed prior to Milestones A and 
     B, and the extent to which such recommendations should be 
     implemented throughout the Department of Defense.

     SEC. 102. DIRECTOR OF DEVELOPMENTAL TEST AND EVALUATION.

       (a) Establishment of Position.--
       (1) In general.--Chapter 4 of title 10, United States Code, 
     is amended by inserting after section 139b the following new 
     section:

     ``Sec. 139c. Director of Developmental Test and Evaluation

       ``(a) There is a Director of Developmental Test and 
     Evaluation, who shall be appointed by the Secretary of 
     Defense from among individuals with an expertise in 
     acquisition and testing.
       ``(b)(1) The Director of Developmental Test and Evaluation 
     shall be the principal advisor to the Secretary of Defense 
     and the Under Secretary of Defense for Acquisition, 
     Technology, and Logistics on developmental test and 
     evaluation in the Department of Defense.
       ``(2) The individual serving as the Director of 
     Developmental Test and Evaluation may also serve concurrently 
     as the Director of the Department of Defense Test Resource 
     Management Center under section 196 of this title.
       ``(3) The Director shall be subject to the supervision of 
     the Under Secretary of Defense for Acquisition, Technology, 
     and Logistics and shall report to the Under Secretary.
       ``(4)(A) The Under Secretary shall provide guidance to the 
     Director to ensure that the developmental test and evaluation 
     activities of the Department of Defense are fully integrated 
     into and consistent with the systems engineering and 
     development processes of the Department.
       ``(B) The guidance under this paragraph shall ensure, at a 
     minimum, that--
       ``(i) developmental test and evaluation requirements are 
     fully integrated into the Systems Engineering Master Plan for 
     each major defense acquisition program; and
       ``(ii) systems engineering and development planning 
     requirements are fully considered in the Test and Evaluation 
     Master Plan for each major defense acquisition program.
       ``(c) The Director of Developmental Test and Evaluation 
     shall--
       ``(1) develop policies and guidance for the developmental 
     test and evaluation activities of the Department of Defense 
     (including integration and developmental testing of 
     software);
       ``(2) monitor and review the developmental test and 
     evaluation activities of the major defense acquisition 
     programs and major automated information systems programs of 
     the Department of Defense;
       ``(3) review and approve the test and evaluation master 
     plan for each major defense acquisition program of the 
     Department of Defense;
       ``(4) supervise the activities of the Director of the 
     Department of Defense Test Resource Management Center under 
     section 196 of this title, or carry out such activities if 
     serving concurrently as the Director of Developmental Test 
     and Evaluation and the Director of the Department of Defense 
     Test Resource Management Center under subsection (b)(2);
       ``(5) review the organizations and capabilities of the 
     military departments with respect to developmental test and 
     evaluation and identify needed changes or improvements to 
     such organizations and capabilities; and
       ``(6) perform such other activities relating to the 
     developmental test and evaluation activities of the 
     Department of Defense as the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics may prescribe.
       ``(d) The Director of Developmental Test and Evaluation 
     shall have access to all records and data of the Department 
     of Defense (including the records and data of each military 
     department) that the Director considers necessary in order to 
     carry out the Director's duties under this section.
       ``(e)(1) The Director of Developmental Test and Evaluation 
     shall submit to Congress each year a report on the 
     developmental test and evaluation activities of the major 
     defense acquisition programs and major automated information 
     system programs of the of the Department of Defense. Each 
     report shall include, at a minimum, the following:
       ``(A) A discussion of any waivers to testing activities 
     included in the Test and Evaluation Master Plan for a major 
     defense acquisition program in the preceding year.
       ``(B) An assessment of the organization and capabilities of 
     the Department of Defense for test and evaluation.
       ``(2) The Secretary of Defense may include in any report 
     submitted to Congress under this subsection such comments on 
     such report as the Secretary considers appropriate.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 4 of such title is amended by inserting 
     after the item relating to section 139b the following new 
     item:

``139c. Director of Developmental Test and Evaluation.''.

       (3) Conforming amendments.--
       (A) Section 196(f) of title 10, United States Code, is 
     amended by striking ``the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics'' and all that follows 
     and inserting ``the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics and the Director of 
     Developmental Test and Evaluation.''.
       (B) Section 139(b) of such title is amended--
       (i) by redesignating paragraphs (4) through (6) as 
     paragraphs (5) through (7), respectively; and
       (ii) by inserting after paragraph (3) the following new 
     paragraph (4):
       ``(4) review and approve the test and evaluation master 
     plan for each major defense acquisition program of the 
     Department of Defense;''.
       (b) Reports on Developmental Testing Organizations and 
     Personnel.--
       (1) Reports by service acquisition executives.--Not later 
     than 180 days after the date of the enactment of this Act, 
     the service acquisition executive of each military department 
     shall submit to the Director of Developmental Test and 
     Evaluation a report on the extent to which the test 
     organizations of such military department have in place, or 
     have effective plans to develop, adequate numbers of 
     personnel with appropriate expertise for each purpose as 
     follows:
       (A) To ensure that testing requirements are appropriately 
     addressed in the translation of operational requirements into 
     contract specifications, in the source selection process, and 
     in the preparation of requests for proposals on all major 
     defense acquisition programs.
       (B) To participate in the planning of developmental test 
     and evaluation activities, including the preparation and 
     approval of a test and evaluation master plan for each major 
     defense acquisition program.
       (C) To participate in and oversee the conduct of 
     developmental testing, the analysis of data, and the 
     preparation of evaluations and reports based on such testing.
       (2) First annual report by director of developmental test 
     and evaluation.--The first annual report submitted to 
     Congress by the Director of Developmental Test and Evaluation 
     under section 139c(e) of title 10, United States Code (as 
     added by subsection (a)), shall be submitted not later than 
     one year after the date of the enactment of this Act, and 
     shall include an assessment by the Director of the reports 
     submitted by the service acquisition executives to the 
     Director under paragraph (1).

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

       (a) Assessment by Director of Defense Research and 
     Engineering.--
       (1) In general.--Section 139a of title 10, United States 
     Code, is amended by adding at the end the following new 
     subsection:
       ``(c)(1) The Director of Defense Research and Engineering 
     shall, in consultation with the Director of Developmental 
     Test and Evaluation, periodically review and assess the 
     technological maturity and integration risk of critical 
     technologies of the major defense acquisition programs of the 
     Department of Defense and report on the findings of such 
     reviews and assessments to the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics.
       ``(2) The Director shall submit to the Secretary of Defense 
     and to Congress each year a report on the technological 
     maturity and integration risk of critical technologies of the 
     major defense acquisition programs of the Department of 
     Defense.''.
       (2) First annual report.--The first annual report under 
     subsection (c)(2) of section 139a of title 10, United States 
     Code (as added by paragraph (1)), shall be submitted to 
     Congress not later than March 1, 2011, and shall address the 
     results of reviews and assessments conducted by the Director 
     of Defense

[[Page 11906]]

     Research and Engineering pursuant to subsection (c)(1) of 
     such section (as so added) during the preceding calendar 
     year.
       (b) Report on Resources for Implementation.--Not later than 
     120 days after the date of the enactment of this Act, the 
     Director of Defense Research and Engineering shall submit to 
     the congressional defense committees a report describing any 
     additional resources, including specialized workforce, that 
     may be required by the Director, and by other science and 
     technology elements of the Department of Defense, to carry 
     out the following:
       (1) The requirements under the amendment made by subsection 
     (a).
       (2) The technological maturity assessments required by 
     section 2366b(a) of title 10, United States Code, as amended 
     by section 202 of this Act.
       (3) The requirements of Department of Defense Instruction 
     5000, as revised.
       (c) Technological Maturity Standards.--For purposes of the 
     review and assessment conducted by the Director of Defense 
     Research and Engineering in accordance with subsection (c) of 
     section 139a of title 10, United States Code (as added by 
     subsection (a)), a critical technology is considered to be 
     mature--
       (1) in the case of a major defense acquisition program that 
     is being considered for Milestone B approval, if the 
     technology has been demonstrated in a relevant environment; 
     and
       (2) in the case of a major defense acquisition program that 
     is being considered for Milestone C approval, if the 
     technology has been demonstrated in a realistic environment.

     SEC. 104. DIRECTOR OF INDEPENDENT COST ASSESSMENT.

       (a) Director of Independent Cost Assessment.--
       (1) In general.--Chapter 4 of title 10, United States Code, 
     as amended by section 102 of this Act, is further amended by 
     inserting after section 139c the following new section:

     ``Sec. 139d. Director of Independent Cost Assessment

       ``(a) There is a Director of Independent Cost Assessment in 
     the Department of Defense, appointed by the President, by and 
     with the advice and consent of the Senate. The Director shall 
     be appointed without regard to political affiliation and 
     solely on the basis of fitness to perform the duties of the 
     Director.
       ``(b) The Director is the principal advisor to the 
     Secretary of Defense, the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics, and the Under 
     Secretary of Defense (Comptroller) on cost estimation and 
     cost analyses for the acquisition programs of the Department 
     of Defense and the principal cost estimation official within 
     the senior management of the Department of Defense. The 
     Director shall--
       ``(1) prescribe, by authority of the Secretary of Defense, 
     policies and procedures for the conduct of cost estimation 
     and cost analysis for the acquisition programs of the 
     Department of Defense;
       ``(2) provide guidance to and consult with the Secretary of 
     Defense, the Under Secretary of Defense for Acquisition, 
     Technology, and Logistics, the Under Secretary of Defense 
     (Comptroller), and the Secretaries of the military 
     departments with respect to cost estimation in the Department 
     of Defense in general and with respect to specific cost 
     estimates and cost analyses to be conducted in connection 
     with a major defense acquisition program under chapter 144 of 
     this title or a major automated information system program 
     under chapter 144A of this title;
       ``(3) establish guidance on confidence levels for cost 
     estimates on major defense acquisition programs, require that 
     all such estimates include confidence levels compliant with 
     such guidance, and require the disclosure of all such 
     confidence levels (including through Selected Acquisition 
     Reports submitted pursuant to section 2432 of this title);
       ``(4) monitor and review all cost estimates and cost 
     analyses conducted in connection with major defense 
     acquisition programs and major automated information system 
     programs; and
       ``(5) conduct independent cost estimates and cost analyses 
     for major defense acquisition programs and major automated 
     information system programs for which the Under Secretary of 
     Defense for Acquisition, Technology, and Logistics is the 
     Milestone Decision Authority--
       ``(A) in advance of--
       ``(i) any certification under section 2366a or 2366b of 
     this title;
       ``(ii) any certification under section 2433(e)(2) of this 
     title; and
       ``(iii) any report under section 2445c(f) of this title; 
     and
       ``(B) whenever necessary to ensure that an estimate or 
     analysis under paragraph (4) is unbiased, fair, and reliable.
       ``(c)(1) The Director may communicate views on matters 
     within the responsibility of the Director directly to the 
     Secretary of Defense and the Deputy Secretary of Defense 
     without obtaining the approval or concurrence of any other 
     official within the Department of Defense.
       ``(2) The Director shall consult closely with, but the 
     Director and the Director's staff shall be independent of, 
     the Under Secretary of Defense for Acquisition, Technology, 
     and Logistics, the Under Secretary of Defense (Comptroller), 
     and all other officers and entities of the Department of 
     Defense responsible for acquisition and budgeting.
       ``(d)(1) The Secretary of a military department shall 
     report promptly to the Director the results of all cost 
     estimates and cost analyses conducted by the military 
     department and all studies conducted by the military 
     department in connection with cost estimates and cost 
     analyses for major defense acquisition programs of the 
     military department.
       ``(2) The Director may make comments on cost estimates and 
     cost analyses conducted by a military department for a major 
     defense acquisition program, request changes in such cost 
     estimates and cost analyses to ensure that they are fair and 
     reliable, and develop or require the development of 
     independent cost estimates or cost analyses for such program, 
     as the Director determines to be appropriate.
       ``(3) The Director shall have access to any records and 
     data in the Department of Defense (including the records and 
     data of each military department) that the Director considers 
     necessary to review in order to carry out the Director's 
     duties under this section.
       ``(e)(1) The Director shall prepare an annual report 
     summarizing the cost estimation and cost analysis activities 
     of the Department of Defense during the previous year and 
     assessing the progress of the Department in improving the 
     accuracy of its costs estimates and analyses. The report 
     shall include an assessment of--
       ``(A) the extent to which each of the military departments 
     have complied with policies, procedures, and guidance issued 
     by the Director with regard to the preparation of cost 
     estimates; and
       ``(B) the overall quality of cost estimates prepared by 
     each of the military departments.
       ``(2) Each report under this subsection shall be submitted 
     concurrently to the Secretary of Defense, the Under Secretary 
     of Defense for Acquisition, Technology, and Logistics, the 
     Under Secretary of Defense (Comptroller), and Congress not 
     later than 10 days after the transmission of the budget for 
     the next fiscal year under section 1105 of title 31. The 
     Director shall ensure that a report submitted under this 
     subsection does not include any information, such as 
     proprietary or source selection sensitive information, that 
     could undermine the integrity of the acquisition process. 
     Each report submitted to Congress under this subsection shall 
     be posted on an Internet website of the Department of Defense 
     that is available to the public.
       ``(3) The Secretary may comment on any report of the 
     Director to Congress under this subsection.
       ``(f) The President shall include in the budget transmitted 
     to Congress pursuant to section 1105 of title 31 for each 
     fiscal year a separate statement of estimated expenditures 
     and proposed appropriations for that fiscal year for the 
     Director of Independent Cost Assessment in carrying out the 
     duties and responsibilities of the Director under this 
     section.
       ``(g) The Secretary of Defense shall ensure that the 
     Director has sufficient professional staff of military and 
     civilian personnel to enable the Director to carry out the 
     duties and responsibilities of the Director under this 
     section.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of chapter 4 of such title, as so amended, is 
     further amended by inserting after the item relating to 
     section 139c the following new item:

``139d. Director of Independent Cost Assessment.''.

       (3) Executive schedule level iv.--Section 5315 of title 5, 
     United States Code, is amended by inserting after the item 
     relating to the Director of Operational Test and Evaluation, 
     Department of Defense the following new item:
       ``Director of Independent Cost Assessment, Defense of 
     Defense.''.
       (b) Report on Monitoring of Operating and Support Costs for 
     MDAPs.--
       (1) Report to secretary of defense.--Not later than one 
     year after the date of the enactment of this Act, the 
     Director of Independent Cost Assessment under section 139d of 
     title 10 United States Code (as added by subsection (a)), 
     shall review existing systems and methods of the Department 
     of Defense for tracking and assessing operating and support 
     costs on major defense acquisition programs and submit to the 
     Secretary of Defense a report on the finding and 
     recommendations of the Director as a result of the review, 
     including an assessment by the Director of the feasibility 
     and advisability of establishing baselines for operating and 
     support costs under section 2435 of title 10, United States 
     Code.
       (2) Transmittal to congress.--Not later than 30 days after 
     receiving the report required by paragraph (1), the Secretary 
     shall transmit the report to the congressional defense 
     committees, together with any comments on the report the 
     Secretary considers appropriate.
       (c) Transfer of Personnel and Functions of Cost Analysis 
     Improvement Group.--

[[Page 11907]]

     The personnel and functions of the Cost Analysis Improvement 
     Group of the Department of Defense are hereby transferred to 
     the Director of Independent Cost Assessment under section 
     139d of title 10, United States Code (as so added), and shall 
     report directly to the Director.
       (d) Conforming Amendments.--
       (1) Section 181(d) of title 10, United States Code, is 
     amended by inserting ``the Director of Independent Cost 
     Assessment,'' before ``and the Director''.
       (2) Section 2306b(i)(1)(B) of such title is amended by 
     striking ``Cost Analysis Improvement Group of the Department 
     of Defense'' and inserting ``Director of Independent Cost 
     Assessment''.
       (3) Section 2366a(a)(4) of such title is amended by 
     striking ``has been submitted'' and inserting ``has been 
     approved by the Director of Independent Cost Assessment''.
       (4) Section 2366b(a)(1)(C) of such title is amended by 
     striking ``have been developed to execute'' and inserting 
     ``have been approved by the Director of Independent Cost 
     Assessment to provide for the execution of''.
       (5) Section 2433(e)(2)(B)(iii) of such title is amended by 
     striking ``are reasonable'' and inserting ``have been 
     determined by the Director of Independent Cost Assessment to 
     be reasonable''.
       (6) Subparagraph (A) of section 2434(b)(1) of such title is 
     amended to read as follows:
       ``(A) be prepared or approved by the Director of 
     Independent Cost Assessment; and''.
       (7) Section 2445c(f)(3) of such title is amended by 
     striking ``are reasonable'' and inserting ``have been 
     determined by the Director of Independent Cost Assessment to 
     be reasonable''.
       (e) Comptroller General of the United States Review of 
     Operating and Support Costs of Major Weapon Systems.--
       (1) In general.--Not later than one year after the date of 
     the enactment of this Act, the Comptroller General of the 
     United States shall submit to the congressional defense 
     committees a report on growth in operating and support costs 
     for major weapon systems.
       (2) Elements.--In preparing the report required by 
     paragraph (1), the Comptroller General shall, at a minimum--
       (A) identify the original estimates for operating and 
     support costs for major weapon systems selected by the 
     Comptroller General for purposes of the report;
       (B) assess the actual operating and support costs for such 
     major weapon systems;
       (C) analyze the rate of growth for operating and support 
     costs for such major weapon systems;
       (D) for such major weapon systems that have experienced the 
     highest rate of growth in operating and support costs, assess 
     the factors contributing to such growth;
       (E) assess measures taken by the Department of Defense to 
     reduce operating and support costs for major weapon systems; 
     and
       (F) make such recommendations as the Comptroller General 
     considers appropriate.
       (3) Major weapon system defined.--In this subsection, the 
     term ``major weapon system'' has the meaning given that term 
     in 2379(d) of title 10, United States Code.

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

       (a) In General.--Section 181 of title 10, United States 
     Code, as amended by section 104(d)(1) of this Act, is further 
     amended--
       (1) by redesignating subsections (e), (f), and (g) as 
     subsections (f), (g), and (h), respectively; and
       (2) by adding after subsection (d) the following new 
     subsection (e):
       ``(e) Input From Combatant Commanders on Joint Military 
     Requirements.--The Council shall seek and consider input from 
     the commanders of the combatant commands in carrying out its 
     mission under paragraphs (1) and (2) of subsection (b) and in 
     conducting periodic reviews in accordance with the 
     requirements of subsection (f). Such input may include, but 
     is not limited to, an assessment of the following:
       ``(1) Any current or projected missions or threats in the 
     theater of operations of the commander of a combatant command 
     that would justify a new joint military requirement.
       ``(2) The necessity and sufficiency of a proposed joint 
     military requirement in terms of current and projected 
     missions or threats.
       ``(3) The relative priority of a proposed joint military 
     requirement in comparison with other joint military 
     requirements.
       ``(4) The ability of partner nations in the theater of 
     operations of the commander of a combatant command to assist 
     in meeting the joint military requirement or to partner in 
     using technologies developed to meet the joint military 
     requirement.''.
       (b) Comptroller General of the United States Review of 
     Implementation.--Not later than two years after the date of 
     the enactment of this Act, the Comptroller General of the 
     United States shall submit to the Committees on Armed 
     Services of the Senate and the House of Representatives a 
     report on the implementation of the requirements of 
     subsection (e) of section 181 of title 10, United States Code 
     (as amended by subsection (a)), for the Joint Requirements 
     Oversight Council to solicit and consider input from the 
     commanders of the combatant commands. The report shall 
     include, at a minimum, an assessment of the extent to which 
     the Council has effectively sought, and the commanders of the 
     combatant commands have provided, meaningful input on 
     proposed joint military requirements.

     SEC. 106. CLARIFICATION OF SUBMITTAL OF CERTIFICATION OF 
                   ADEQUACY OF BUDGETS BY THE DIRECTOR OF THE 
                   DEPARTMENT OF DEFENSE TEST RESOURCE MANAGEMENT 
                   CENTER.

       Section 196(e)(2) of title 10, United States Code, is 
     amended--
       (1) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (2) by inserting after subparagraph (A) the following new 
     subparagraph (B):
       ``(B) If the Director of the Center is not serving 
     concurrently as the Director of Developmental Test and 
     Evaluation under subsection (b)(2) of section 139c of this 
     title, the certification of the Director of the Center under 
     subparagraph (A) shall, notwithstanding subsection (c)(4) of 
     such section, be submitted directly and independently to the 
     Secretary of Defense.''.

                      TITLE II--ACQUISITION POLICY

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

       (a) Consideration of Trade-Offs.--
       (1) In general.--The Secretary of Defense shall develop and 
     implement mechanisms to ensure that trade-offs between cost, 
     schedule, and performance are considered as part of the 
     process for developing requirements for major weapon systems.
       (2) Elements.--The mechanisms required under this 
     subsection shall ensure, at a minimum, that--
       (A) Department of Defense officials responsible for 
     acquisition, budget, and cost estimating functions are 
     provided an appropriate opportunity to develop estimates and 
     raise cost and schedule matters before performance 
     requirements are established for major weapon systems; and
       (B) consideration is given to fielding major weapon systems 
     through incremental or spiral acquisition, while deferring 
     technologies that are not yet mature, and capabilities that 
     are likely to significantly increase costs or delay 
     production, until later increments or spirals.
       (3) Major weapons system defined.--In this subsection, the 
     term ``major weapon system'' has the meaning given that term 
     in section 2379(d) of title 10, United States Code.
       (b) Duties of Joint Requirements Oversight Council.--
     Section 181(b)(1) of title 10, United States Code, is 
     amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(C) in ensuring the consideration of trade-offs among 
     cost, schedule and performance for joint military 
     requirements in consultation with the advisors specified in 
     subsection (d);''.
       (c) Review of Joint Military Requirements.--
       (1) JROC submittal of recommended requirements to under 
     secretary for atl.--Upon recommending a new joint military 
     requirement, the Joint Requirements Oversight Council shall 
     transmit the recommendation to the Under Secretary of Defense 
     for Acquisition, Technology, and Logistics for review and 
     concurrence or non-concurrence in the recommendation.
       (2) Review of recommended requirements.--The Under 
     Secretary for Acquisition, Technology, and Logistics shall 
     review each recommendation transmitted under paragraph (1) to 
     determine whether or not the Joint Requirements Oversight 
     Council has, in making such recommendation--
       (A) taken appropriate action to solicit and consider input 
     from the commanders of the combatant commands in accordance 
     with the requirements of section 181(e) of title 10, United 
     States Code (as amended by section 105);
       (B) given appropriate consideration to trade-offs among 
     cost, schedule, and performance in accordance with the 
     requirements of section 181(b)(1)(C) of title 10, United 
     States Code (as amended by subsection (b)); and
       (C) given appropriate consideration to issues of joint 
     portfolio management, including alternative material and non-
     material solutions, as provided in Chairman of the Joint 
     Chiefs of Staff Instruction 3170.01G.
       (3) Non-concurrence of under secretary for atl.--If the 
     Under Secretary for Acquisition, Technology, and Logistics 
     determines that the Joint Requirements Oversight Council has 
     failed to take appropriate action in accordance with 
     subparagraphs (A), (B), and (C) of paragraph (2) regarding a 
     joint military requirement, the Under Secretary shall return 
     the recommendation to the Council with specific 
     recommendations as to matters to be considered by the Council 
     to address any shortcoming identified by the Under Secretary 
     in the course of the review under paragraph (2).
       (4) Notice on continuing disagreement on requirement.--If 
     the Under Secretary for Acquisition, Technology, and 
     Logistics and the Joint Requirements Oversight Council

[[Page 11908]]

     are unable to reach agreement on a joint military requirement 
     that has been returned to the Council by the Under Secretary 
     under paragraph (4), the Under Secretary shall transmit 
     notice of lack of agreement on the requirement to the 
     Secretary of Defense.
       (5) Resolution of continuing disagreement.--Upon receiving 
     notice under paragraph (4) of a lack of agreement on a joint 
     military requirement, the Secretary of Defense shall make a 
     final determination on whether or not to validate the 
     requirement.
       (d) Analysis of Alternatives.--
       (1) Requirement at material solution analysis phase.--The 
     Under Secretary of Defense for Acquisition, Technology, and 
     Logistics shall ensure that Department of Defense guidance on 
     major defense acquisition programs requires the Milestone 
     Decision Authority to conduct an analysis of alternatives 
     (AOA) during the Material Solution Analysis Phase of each 
     major defense acquisition program.
       (2) Elements.--Each analysis of alternatives under 
     paragraph (1) shall, at a minimum--
       (A) solicit and consider alternative approaches proposed by 
     the military departments and Defense Agencies to meet joint 
     military requirements; and
       (B) give full consideration to possible trade-offs between 
     cost, schedule, and performance for each of the alternatives 
     so considered.
       (e) Duties of Milestone Decision Authority.--Section 
     2366b(a)(1)(B) of title 10, United States Code, is amended by 
     inserting ``appropriate trade-offs between cost, schedule, 
     and performance have been made to ensure that'' before ``the 
     program is affordable''.

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

       (a) Preliminary Design Review.--Section 2366b(a) of title 
     10, United States Code, as amended by section 201(d) of this 
     Act, is further amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) by redesignating paragraph (2) as paragraph (3);
       (3) by inserting after paragraph (1) the following new 
     paragraph (2):
       ``(2) has received a preliminary design review (PDR) and 
     conducted a formal post-preliminary design review assessment, 
     and certifies on the basis of such assessment that the 
     program demonstrates a high likelihood of accomplishing its 
     intended mission; and''; and
       (4) in paragraph (3), as redesignated by paragraph (2) of 
     this section--
       (A) in subparagraph (D), by striking the semicolon and 
     inserting ``, as determined by the Milestone Decision 
     Authority on the basis of an independent review and 
     assessment by the Director of Defense Research and 
     Engineering; and'';
       (B) by striking subparagraph (E); and
       (C) by redesignating subparagraph (F) as subparagraph (E).
       (b) Critical Design Review.--The Under Secretary of Defense 
     for Acquisition, Technology, and Logistics shall ensure that 
     Department of Defense guidance on major defense acquisition 
     programs requires a critical design review and a formal post-
     critical design review assessment for each major defense 
     acquisition program to ensure that such program has attained 
     an appropriate level of design maturity before such program 
     is approved for System Capability and Manufacturing Process 
     Development.

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

       (a) Ensuring Competition.--The Secretary of Defense shall 
     ensure that the acquisition plan for each major defense 
     acquisition program includes measures to ensure competition, 
     or the option of competition, at both the prime contract 
     level and the subcontract level of such program throughout 
     the life cycle of such program as a means to incentivize 
     contractor performance.
       (b) Measures To Ensure Competition.--The measures to ensure 
     competition, or the option of competition, utilized for 
     purposes of subsection (a) may include, but are not limited 
     to, measures to achieve the following, in appropriate cases 
     where such measures are cost-effective:
       (1) Competitive prototyping.
       (2) Dual-sourcing.
       (3) Funding of a second source for interchangeable, next-
     generation prototype systems or subsystems.
       (4) Utilization of modular, open architectures to enable 
     competition for upgrades.
       (5) Periodic competitions for subsystem upgrades.
       (6) Licensing of additional suppliers.
       (7) Requirements for Government oversight or approval of 
     make or buy decisions to ensure competition at the subsystem 
     level.
       (8) Periodic system or program reviews to address long-term 
     competitive effects of program decisions.
       (9) Consideration of competition at the subcontract level 
     and in make or buy decisions as a factor in proposal 
     evaluations.
       (c) Competitive Prototyping.--The Secretary of Defense 
     shall modify the acquisition regulations of the Department of 
     Defense to ensure with respect to competitive prototyping for 
     major defense acquisition programs the following:
       (1) That the acquisition strategy for each major defense 
     acquisition program provides for two or more competing teams 
     to produce prototypes before Milestone B approval (or Key 
     Decision Point B approval in the case of a space program) 
     unless the milestone decision authority for such program 
     waives the requirement on the basis of a determination that--
       (A) but for such waiver, the Department would be unable to 
     meet critical national security objectives; or
       (B) the cost of producing competitive prototypes exceeds 
     the potential life-cycle benefits of such competition, 
     including the benefits of improved performance and increased 
     technological and design maturity that may be achieved 
     through prototyping.
       (2) That if the milestone decision authority waives the 
     requirement for prototypes produced by two or more teams for 
     a major defense acquisition program under paragraph (1), the 
     acquisition strategy for the program provides for the 
     production of at least one prototype before Milestone B 
     approval (or Key Decision Point B approval in the case of a 
     space program) unless the milestone decision authority waives 
     such requirement on the basis of a determination that--
       (A) but for such waiver, the Department would be unable to 
     meet critical national security objectives; or
       (B) the cost of producing a prototype exceeds the potential 
     life-cycle benefits of such prototyping, including the 
     benefits of improved performance and increased technological 
     and design maturity that may be achieved through prototyping.
       (3) That whenever a milestone decision authority authorizes 
     a waiver under paragraph (1) or (2), the waiver, the 
     determination upon which the waiver is based, and the reasons 
     for the determination are submitted in writing to the 
     congressional defense committees not later than 30 days after 
     the waiver is authorized.
       (4) That prototypes may be required under paragraph (1) or 
     (2) for the system to be acquired or, if prototyping of the 
     system is not feasible, for critical subsystems of the 
     system.
       (d) Comptroller General of the United States Review of 
     Certain Waivers.--
       (1) Notice to comptroller general.--Whenever a milestone 
     decision authority authorizes a waiver of the requirement for 
     prototypes under paragraph (1) or (2) of subsection (c) on 
     the basis of excessive cost, the milestone decision authority 
     shall submit a notice on the waiver, together with the 
     rational for the waiver, to the Comptroller General of the 
     United States at the same time a report on the waiver is 
     submitted to the congressional defense committees under 
     paragraph (3) of that subsection.
       (2) Comptroller general review.--Not later than 60 days 
     after receipt of a notice on a waiver under paragraph (1), 
     the Comptroller General shall--
       (A) review the rationale for the waiver; and
       (B) submit to the congressional defense committees a 
     written assessment of the rationale for the waiver.
       (e) Applicability.--This section shall apply to any 
     acquisition plan for a major defense acquisition program that 
     is developed or revised on or after the date that is 60 days 
     after the date of the enactment of this Act.

     SEC. 204. CRITICAL COST GROWTH IN MAJOR DEFENSE ACQUISITION 
                   PROGRAMS.

       (a) Authorized Actions in Event of Critical Cost Growth.--
     Section 2433(e)(2) of title 10, United States Code, is 
     amended--
       (1) by redesignating subparagraph (C) as subparagraph (E);
       (2) by striking subparagraph (B); and
       (3) by inserting after subparagraph (A) the following new 
     subparagraphs (B), (C), and (D):
       ``(B) terminate such acquisition program and submit the 
     report required by subparagraph (D), unless the Secretary 
     determines that the continuation of such program is essential 
     to the national security of the United States and submits a 
     written certification in accordance with subparagraph (C)(i) 
     accompanied by a report setting forth the assessment carried 
     out pursuant to subparagraph (A) and the basis for each 
     determination made in accordance with clauses (I) through 
     (IV) of subparagraph (C)(i), together with supporting 
     documentation;
       ``(C) if the program is not terminated--
       ``(i) submit to Congress, before the end of the 60-day 
     period beginning on the day the Selected Acquisition Report 
     containing the information described in subsection (g) is 
     required to be submitted under section 2432(f) of this title, 
     a written certification stating that--
       ``(I) such acquisition program is essential to national 
     security;
       ``(II) there are no alternatives to such acquisition 
     program which will provide equal or greater capability to 
     meet a joint military requirement (as that term is defined in 
     section 181(h)(1) of this title) at less cost;
       ``(III) the new estimates of the program acquisition unit 
     cost or procurement unit cost were arrived at in accordance 
     with the requirements of section 139d of this title and are 
     reasonable; and
       ``(IV) the management structure for the acquisition program 
     is adequate to manage and control program acquisition unit 
     cost or procurement unit cost;

[[Page 11909]]

       ``(ii) rescind the most recent Milestone approval (or Key 
     Decision Point approval in the case of a space program) for 
     such program and withdraw any associated certification under 
     section 2366a or 2366b of this title; and
       ``(iii) require a new Milestone approval (or Key Decision 
     Point approval in the case of a space program) for such 
     program before entering into a new contract, exercising an 
     option under an existing contract, or otherwise extending the 
     scope of an existing contract under such program;
       ``(D) if the program is terminated, submit to Congress a 
     written report setting forth--
       ``(i) an explanation of the reasons for terminating the 
     program;
       ``(ii) the alternatives considered to address any problems 
     in the program; and
       ``(iii) the course the Department plans to pursue to meet 
     any continuing joint military requirements otherwise intended 
     to be met by the program; and''.
       (b) Total Expenditure for Procurement Resulting in 
     Treatment as MDAP.--Section 2430(a)(2) of such title is 
     amended by inserting ``, including all planned increments or 
     spirals,'' after ``an eventual total expenditure for 
     procurement''.

     SEC. 205. ORGANIZATIONAL CONFLICTS OF INTEREST IN THE 
                   ACQUISITION OF MAJOR WEAPON SYSTEMS.

       (a) Revised Regulations Required.--Not later than 180 days 
     after the date of the enactment of this Act, the Under 
     Secretary of Defense for Acquisition, Technology, and 
     Logistics shall revise the Defense Supplement to the Federal 
     Acquisition Regulation to address organizational conflicts of 
     interest by contractors in the acquisition of major weapon 
     systems.
       (b) Elements.--The revised regulations required by 
     subsection (a) shall, at a minimum--
       (1) ensure that the Department of Defense receives advice 
     on systems architecture and systems engineering matters with 
     respect to major weapon systems from federally funded 
     research and development centers or other sources independent 
     of the prime contractor;
       (2) require that a contract for the performance of systems 
     engineering and technical assistance (SETA) functions with 
     regard to a major weapon system contains a provision 
     prohibiting the contractor or any affiliate of the contractor 
     from having a direct financial interest in the development or 
     construction of the weapon system or any component thereof;
       (3) provide for an exception to the requirement in 
     paragraph (2) for an affiliate that is separated from the 
     contractor by structural mechanisms, approved by the 
     Secretary of Defense, that are similar to those required for 
     special security agreements under rules governing foreign 
     ownership, control, or influence over United States companies 
     that have access to classified information, including, at a 
     minimum--
       (A) establishment of the affiliate as a separate business 
     entity, geographically separated from related entities, with 
     its own employees and management and restrictions on 
     transfers for personnel;
       (B) a governing board for the affiliate that has 
     organizational separation from related entities and 
     governance procedures that require the board to act solely in 
     the interest of the affiliate, without regard to the 
     interests of related entities, except in specified 
     circumstances;
       (C) complete informational separation, including the 
     execution of non-disclosure agreements;
       (D) initial and recurring training on organizational 
     conflicts of interest and protections against organizational 
     conflicts of interest; and
       (E) annual compliance audits in which Department of Defense 
     personnel are authorized to participate;
       (4) prohibit the use of the exception in paragraph (3) for 
     any category of systems engineering and technical assistance 
     functions (including, but not limited to, advice on source 
     selection matters) for which the potential for an 
     organizational conflict of interest or the appearance of an 
     organizational conflict of interest makes mitigation in 
     accordance with that paragraph an inappropriate approach;
       (5) authorize waiver of the requirement in paragraph (2) in 
     cases in which the agency head determines in writing that--
       (A) the financial interest of the contractor or its 
     affiliate in the development or construction of the weapon 
     system is not substantial and does not include a prime 
     contract, a first-tier subcontract, or a joint venture or 
     similar relationship with a prime contractor or first-tier 
     subcontractor; or
       (B) the contractor--
       (i) has unique systems engineering capabilities that are 
     not available from other sources;
       (ii) has taken appropriate actions to mitigate any 
     organizational conflict of interest; and
       (iii) has made a binding commitment to comply with the 
     requirement in paragraph (2) by not later than January 1, 
     2011; and
       (6) provide for fair and objective ``make-buy'' decisions 
     by the prime contractor on a major weapon system by--
       (A) requiring prime contractors to give full and fair 
     consideration to qualified sources other than the prime 
     contractor for the development or construction of major 
     subsystems and components of the weapon system;
       (B) providing for government oversight of the process by 
     which prime contractors consider such sources and determine 
     whether to conduct such development or construction in-house 
     or through a subcontract;
       (C) authorizing program managers to disapprove the 
     determination by a prime contractor to conduct development or 
     construction in-house rather than through a subcontract in 
     cases in which--
       (i) the prime contractor fails to give full and fair 
     consideration to qualified sources other than the prime 
     contractor; or
       (ii) implementation of the determination by the prime 
     contractor is likely to undermine future competition or the 
     defense industrial base; and
       (D) providing for the consideration of prime contractors 
     ``make-buy'' decisions in past performance evaluations.
       (c) Organizational Conflict of Interest Review Board.--
       (1) Establishment required.--Not later than 90 days after 
     the date of the enactment of this Act, the Secretary of 
     Defense shall establish within the Department of Defense a 
     board to be known as the ``Organizational Conflict of 
     Interest Review Board''.
       (2) Duties.--The Board shall have the following duties:
       (A) To advise the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics on policies relating 
     to organizational conflicts of interest in the acquisition of 
     major weapon systems.
       (B) To advise program managers on steps to comply with the 
     requirements of the revised regulations required by this 
     section and to address organizational conflicts of interest 
     in the acquisition of major weapon systems.
       (C) To advise appropriate officials of the Department on 
     organizational conflicts of interest arising in proposed 
     mergers of defense contractors.
       (d) Major Weapon System Defined.--In this section, the term 
     ``major weapon system'' has the meaning given that term in 
     section 2379(d) of title 10, United States Code.

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

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

     SEC. 207. EARNED VALUE MANAGEMENT.

       (a) Enhanced Tracking of Contractor Performance.--Not later 
     than 180 days after the date of the enactment of this Act, 
     the Under Secretary of Defense for Acquisition, Technology, 
     and Logistics shall review the existing guidance and, as 
     necessary, prescribe additional guidance governing the 
     implementation of the Earned Value Management (EVM) 
     requirements and reporting for contracts to ensure that the 
     Department of Defense--
       (1) applies uniform EVM standards to reliably and 
     consistently measure contract or project performance;
       (2) applies such standards to establish appropriate 
     baselines at the award of a contract or commencement of a 
     program, whichever is earlier;
       (3) ensures that personnel responsible for administering 
     and overseeing EVM systems have the training and 
     qualifications needed to perform this function; and
       (4) has appropriate mechanisms in place to ensure that 
     contractors establish and use approved EVM systems.
       (b) Enforcement Mechanisms.--For the purposes of subsection 
     (a)(4), mechanisms to ensure that contractors establish and 
     use approved EVM systems shall include--
       (1) consideration of the quality of the contractors' EVM 
     systems and the timeliness of the contractors' EVM reporting 
     in any past performance evaluation for a contract that 
     includes an EVM requirement; and

[[Page 11910]]

       (2) increased government oversight of the cost, schedule, 
     scope, and performance of contractors that do not have 
     approved EVM systems in place.

     SEC. 208. EXPANSION OF NATIONAL SECURITY OBJECTIVES OF THE 
                   NATIONAL TECHNOLOGY AND INDUSTRIAL BASE.

       (a) In General.--Subsection (a) of section 2501 of title 
     10, United States Code, is amended by adding at the end the 
     following new paragraph:
       ``(6) Maintaining critical design skills to ensure that the 
     armed forces are provided with systems capable of ensuring 
     technological superiority over potential adversaries.''.
       (b) Notification of Congress Upon Termination of Mdaps of 
     Effects on National Security Objectives.--Such section is 
     further amended by adding at the end the following new 
     subsection:
       ``(c) Notification of Congress Upon Termination of Major 
     Defense Acquisition Program of Effects on Objectives.--(1) 
     Upon the termination of a major defense acquisition program, 
     the Secretary of Defense shall notify Congress of the effects 
     of such termination on the national security objectives for 
     the national technology and industrial base set forth in 
     subsection (a), and the measures, if any, that have been 
     taken or should be taken to mitigate those effects.
       ``(2) In this subsection, the term `major defense 
     acquisition program' has the meaning given that term in 
     section 2430 of this title.''.

     SEC. 209. PLAN FOR ELIMINATION OF WEAKNESSES IN OPERATIONS 
                   THAT HINDER CAPACITY TO ASSEMBLE AND ASSESS 
                   RELIABLE COST INFORMATION ON ACQUIRED ASSETS 
                   UNDER MAJOR DEFENSE ACQUISITION PROGRAMS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the Chief Management Officer of 
     the Department of Defense shall submit to Congress a report 
     setting forth a plan to identify and address weaknesses in 
     operations that hinder the capacity to assemble and assess 
     reliable cost information on the systems and assets to be 
     acquired under major defense acquisition programs.
       (b) Elements.--The report required under subsection (a) 
     shall include the following:
       (1) Mechanisms to identify any weaknesses in operations 
     under major defense acquisition programs that hinder the 
     capacity to assemble and assess reliable cost information on 
     the systems and assets to be acquired under such programs in 
     accordance with applicable accounting standards.
       (2) Mechanisms to address weaknesses in operations under 
     major defense acquisition programs identified pursuant to the 
     utilization of the mechanisms set forth under paragraph (1).
       (3) A description of the proposed implementation of the 
     mechanisms set forth pursuant to paragraph (2) to address the 
     weaknesses described in that paragraph, including--
       (A) the actions to be taken to implement such mechanisms;
       (B) a schedule for carrying out such mechanisms; and
       (C) metrics for assessing the progress made in carrying out 
     such mechanisms.
       (4) A description of the organization and resources 
     required to carry out mechanisms set forth pursuant to 
     paragraphs (1) and (2).
       (5) In the case of the financial management practices of 
     each military department applicable to major defense 
     acquisition programs--
       (A) a description of any weaknesses in such practices; and
       (B) a description of the actions to be taken to remedy such 
     weaknesses.
       (c) Consultation.--
       (1) In general.--In preparing the report required by 
     subsection (a), the Chief Management Officer of the 
     Department of Defense shall seek and consider input from each 
     of the following:
       (A) The Chief Management Officer of the Department of the 
     Army.
       (B) The Chief Management Officer of the Department of the 
     Navy.
       (C) The Chief Management Officer of the Department of the 
     Air Force.
       (2) Financial management practices.--In preparing for the 
     report required by subsection (a) the matters covered by 
     subsection (b)(5) with respect to a particular military 
     department, the Chief Management Officer of the Department of 
     Defense shall consult specifically with the Chief Management 
     Officer of the military department concerned.

  Mr. LEVIN. Madam President, I move to reconsider the vote, and I move 
to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. LEVIN. Madam President, very briefly, we have done extremely well 
with this overwhelming vote for the passage of S. 454, the Weapon 
Systems Acquisition Reform Act. We have done it on a bipartisan basis, 
which is the way it should be done when it comes to matters of national 
defense and a whole host of other issues. I am deeply grateful to my 
friend, our ranking member, Senator McCain.
  Of course, a large share of this moment belongs to our hard-working 
and very talented staff, led on our side by Rick DeBobes and on the 
Republican side by Joe Bowab. Our special collective thanks must also 
be given to Peter Levine and Creighton Green on the majority staff and 
to Richard Fontaine, Chris Paul, and Pablo Corrillo on the minority 
staff. We thank them all for their hard work. It will bear fruit, we 
hope within the next month, when we work something out with the House. 
Then, over the coming years, we will not only save taxpayers' dollars, 
but we will provide the right equipment to our troops who deserve the 
best we can get. We will make sure we don't waste these defense 
dollars, because when we do that, we not only are hurting the taxpayer 
but we are depriving our troops of funds they need for needed weapon 
systems.
  Mr. KYL. Madam President, the bill we passed contains provisions that 
I support and others that I oppose. I want to indicate why I voted aye. 
In the end, I think it is critical for Congress to increase the FDIC's 
borrowing authority to reduce a costly special assessment that the FDIC 
intends to impose on distressed banks, and therefore I supported the 
bill.
  Over the last 2 years the FDIC has had to take over 41 different 
failed depository institutions and in the process has depleted its 
insurance fund. At its current level, the FDIC is required by law to 
increase its insurance premiums on banks to recapitalize the fund. 
However, increasing banks' costs now would only worsen the current 
recession.
  Congress can reduce the size of this assessment by 50 percent if it 
increases the FDIC's borrowing authority from $30 billion to $100 
billion. Doing so will help banks hold onto capital that they can use 
to absorb future losses and make it through these difficult economic 
conditions.
  Unfortunately, this bill would increase the FDIC's borrowing 
authority at the same time that it would expand the HOPE for Homeowners 
Program--a $300 billion program designed to allow up to 400,000 
borrowers to refinance into an FHA-backed loan. The FHA mortgage 
program has exploded with the decline of the subprime industry as 
borrowers have flocked to the Government program. FHA loans are 
attractive due to the high loan limits--up to $729,250 in high cost 
areas--and only a 3.5-percent downpayment requirement. According to 
Inside Mortgage Finance, the FHA's market e jumped to nearly a third of 
all mortgages in the fourth quarter of 2008 from about 2 percent in 
early 2006.
  At the same time, FHA mortgage defaults have increased sharply and 
are diminishing the FHA's reserve fund. Roughly 7.5 percent of FHA 
loans were seriously delinquent at the end of February, up from 6.2 
percent a year earlier. The FHA's reserve fund fell to about 3 percent 
of its mortgage portfolio in fiscal year 2008, down from 6.4 percent in 
the previous year. By law, the reserve fund must remain above 2 
percent. Recently, HUD Secretary Shaun Donovan told a Senate 
Appropriations subcommittee that he did not know whether the FHA would 
be able to continue to pay its obligations. Many believe that Congress 
will have to inject additional funding into the FHA.
  The HOPE for Homeowners Program will sunset in 2011. I expect the 
Obama administration to do everything in its power to guarantee the 
solvency of the FHA mortgage program and will be watching how the 
Secretary of HUD implements HOPE the for Homeowners Program.
  In the end, I believe the broader economy would benefit from an 
increase in the FDIC's borrowing authority. We cannot recover from this 
economic downturn until banks have the capital to lend freely to all 
borrowers. Therefore, I voted for S. 896 despite some reservations that 
I have with other provisions in the bill.
  Mr. FEINGOLD. Madam President, I voted in favor of the Weapon Systems 
Acquisition Reform Act of 2009 but I am disappointed that it does not 
include key reforms of our defense procurement system. While President 
Obama and leaders in Congress deserve

[[Page 11911]]

credit for beginning to address the longstanding problem of wasteful 
and abusive defense contracting, we need to go further.
  Secretary Gates has stated that we ``must consistently demonstrate 
the commitment and leadership to stop programs that significantly 
exceed their budget or which spend limited tax dollars to buy more 
capability than the nation needs.'' Unfortunately, this bill falls 
short in this regard. It permits programs to continue even if they have 
experienced cost growth of over 25 percent. GAO has found that 42 
percent of our programs have experienced cost growth and that, due in 
part to such cost overruns, we have scaled back the number of weapons 
we are buying in 10 major programs by 30 percent. Congress's failure to 
make tough choices and restructure troubled programs is therefore 
having a direct impact on our ability to deliver sufficient quantities 
to our fighting forces.
  Secretary Gates has also stated that ``we must ensure that 
requirements are reasonable and technology is adequately mature to 
allow the department to successfully execute the programs.'' This bill 
encourages such reforms, but unfortunately does not require them. For 
example, it requires additional reporting on the Department's reliance 
on immature, risky technologies but does not prohibit the Department 
from purchasing such equipment. GAO reported this year that of 40 
programs that it has reviewed, the Department will decide to move to 
the production of nearly a fourth of them without requiring realistic 
testing of their critical technologies.
  No company would buy a plane before they have flown it. I don't know 
why it should be any different for the U.S. Armed Forces. Indeed, given 
that our brave men and women in uniform are relying on these weapons 
systems, stricter standards should be enforced.
  Unfortunately, these are not new issues. I first objected to 
inadequate testing of weapons systems in 1998 when the Navy sought to 
rush the F-18 through its tests, notwithstanding the fact that 
preliminary tests had discovered serious problems in the aircraft. I am 
disappointed that a decade has passed and we are still seeing the same 
problems over and over again.
  I suggested that we should require higher level review of alternative 
acquisition strategies before purchasing systems that have not been 
tested in a realistic environment but was informed that this would be 
too strict of a requirement. While I am pleased that the committee at 
least accepted an amendment I cosponsored that will ensure that annual 
reports to the Congress identify programs moving into production 
without undergoing adequate testing, this is just a start.
  Secretary Gates demonstrated his commitment to fixing these problems 
when he recommended the cancellation of several programs that were over 
budget, were behind schedule, relied on immature technologies and were 
designed to combat a military-peer that does not exist. GAO had been 
reporting that these systems were in trouble for several years. If 
these systems had been restructured when it first became obvious that 
they were unnecessary and unrealistic, it would have saved the 
government tens of billions of dollars and sped up our efforts to 
replace our aging weapons systems.
  It is my hope that Congress will eventually forgo the parochial 
interests that have prevented it from making the tough choices that 
need to be made and stop repeating the same mistakes of the past. I 
will continue to work with my colleagues until we have achieved this 
goal.
  I yield the floor, and I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mrs. LINCOLN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. LINCOLN. Madam President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Senator LINCOLN pertaining to the introduction of S. 
997 are printed in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  Mrs. LINCOLN. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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