[House Report 111-101]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-101
_______________________________________________________________________

                                     


WEAPONS ACQUISITION SYSTEM REFORM THROUGH ENHANCING TECHNICAL KNOWLEDGE 
                       AND OVERSIGHT ACT OF 2009

                               __________

                              R E P O R T

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                                   ON

                               H.R. 2101

      [Including cost estimate of the Congressional Budget Office]



                                     

                  May 12, 2009.--Ordered to be printed


                   HOUSE COMMITTEE ON ARMED SERVICES
                     One Hundred Eleventh Congress

                    IKE SKELTON, Missouri, Chairman
JOHN SPRATT, South Carolina          JOHN M. McHUGH, New York
SOLOMON P. ORTIZ, Texas              ROSCOE G. BARTLETT, Maryland
GENE TAYLOR, Mississippi             HOWARD P. ``BUCK'' McKEON, 
NEIL ABERCROMBIE, Hawaii                 California
SILVESTRE REYES, Texas               MAC THORNBERRY, Texas
VIC SNYDER, Arkansas                 WALTER B. JONES, North Carolina
ADAM SMITH, Washington               W. TODD AKIN, Missouri
LORETTA SANCHEZ, California          J. RANDY FORBES, Virginia
MIKE McINTYRE, North Carolina        JEFF MILLER, Florida
ELLEN O. TAUSCHER, California        JOE WILSON, South Carolina
ROBERT A. BRADY, Pennsylvania        FRANK A. LoBIONDO, New Jersey
ROBERT ANDREWS, New Jersey           ROB BISHOP, Utah
SUSAN A. DAVIS, California           MICHAEL TURNER, Ohio
JAMES R. LANGEVIN, Rhode Island      JOHN KLINE, Minnesota
RICK LARSEN, Washington              MIKE ROGERS, Alabama
JIM COOPER, Tennessee                TRENT FRANKS, Arizona
JIM MARSHALL, Georgia                BILL SHUSTER, Pennsylvania
MADELEINE Z. BORDALLO, Guam          CATHY McMORRIS RODGERS, Washington
BRAD ELLSWORTH, Indiana              K. MICHAEL CONAWAY, Texas
PATRICK J. MURPHY, Pennsylvania      DOUG LAMBORN, Colorado
HANK JOHNSON, Georgia                ROB WITTMAN, Virginia
CAROL SHEA-PORTER, New Hampshire     MARY FALLIN, Oklahoma
JOE COURTNEY, Connecticut            DUNCAN HUNTER, California
DAVID LOEBSACK, Iowa                 JOHN C. FLEMING, Louisiana
JOE SESTAK, Pennsylvania             MIKE COFFMAN, Colorado
GABRIELLE GIFFORDS, Arizona          THOMAS J. ROONEY, Florida
NIKI TSONGAS, Massachusetts
GLENN NYE, Virginia
CHELLIE PINGREE, Maine
LARRY KISSELL, North Carolina
MARTIN HEINRICH, New Mexico
FRANK M. KRATOVIL, Jr., Maryland
ERIC J.J. MASSA, New York
BOBBY BRIGHT, Alabama
SCOTT MURPHY, New York
DAN BOREN, Oklahoma

                    Erin C. Conaton, Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

Purpose and Background...........................................    12
Legislative History..............................................    13
Hearings.........................................................    14
Section-by-Section Analysis......................................    15
    Section 1--Short Title; Table of Contents....................    15
TITLE I--ACQUISITION ORGANIZATION................................    15
    Section 101--Independent Performance of Acquisition Oversight 
      Functions..................................................    15
    Section 102--Oversight of Cost Estimation....................    15
    Section 103--Oversight of Systems Engineering................    16
    Section 104--Oversight of Performance Assessment.............    16
    Section 105--Assessment of Technological Maturity of Critical 
      Technologies of Major Defense Acquisition Programs by the 
      Director of Defense Research and Engineering...............    17
    Section 106--Role of the Commanders of the Combatant Commands 
      in Identifying Joint Military Requirements.................    17
TITLE II--ACQUISITION POLICY.....................................    18
    Section 201--Acquisition Strategies Ensuring Competition 
      Throughout the Lifecycle of Major Defense Acquisition 
      Programs...................................................    18
    Section 202--Additional Requirements for Certain Major 
      Defense Acquisition Programs...............................    18
    Section 203--Requirement for Certification of Major Systems 
      Prior to Milestone B.......................................    19
    Section 204--Critical Cost Growth in Major Defense 
      Acquisition Programs.......................................    19
    Section 205--Organizational Conflicts of Interest in the 
      Acquisition of Major Weapon Systems........................    20
    Section 206--Awards for Department of Defense Personnel for 
      Excellence in the Acquisition of Products and Services.....    20
    Section 207--Consideration of Trade-Offs Among Cost, 
      Schedule, and Performance in the Acquisition of Major 
      Weapon Systems.............................................    20
Committee Position...............................................    21
Congressional Budget Office Estimate.............................    21
Committee Cost Estimate..........................................    24
Compliance with House Rule XXI...................................    24
Oversight Findings...............................................    24
General Performance Goals & Objectives...........................    24
Constitutional Authority Statement...............................    25
Statement of Federal Mandates....................................    25
Record Vote......................................................    25
Changes in Existing Law Made by the Bill, as Reported............    27



111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-101

======================================================================



 
WEAPONS ACQUISITION SYSTEM REFORM THROUGH ENHANCING TECHNICAL KNOWLEDGE 
                       AND OVERSIGHT ACT OF 2009

                                _______
                                

  May 12, 2009.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Skelton, from the Committee on Armed Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2101]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Armed Services, to whom was referred the 
bill (H.R. 2101) to promote reform and independence in the 
oversight of weapons system acquisition by the Department of 
Defense, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Weapons Acquisition 
System Reform Through Enhancing Technical Knowledge and Oversight Act 
of 2009''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                   TITLE I--ACQUISITION ORGANIZATION

Sec. 101. Independent performance of acquisition oversight functions.
Sec. 102. Oversight of cost estimation.
Sec. 103. Oversight of systems engineering.
Sec. 104. Oversight of performance assessment.
Sec. 105. Assessment of technological maturity of critical technologies 
of major defense acquisition programs by the Director of Defense 
Research and Engineering.
Sec. 106. Role of the commanders of the combatant commands in 
identifying joint military requirements.

                      TITLE II--ACQUISITION POLICY

Sec. 201. Acquisition strategies ensuring competition throughout the 
lifecycle of major defense acquisition programs.
Sec. 202. Additional requirements for certain major defense acquisition 
programs.
Sec. 203. Requirement for certification of major systems prior to 
Milestone B.
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. Consideration of trade-offs among cost, schedule, and 
performance in the acquisition of major weapon systems.

                   TITLE I--ACQUISITION ORGANIZATION

SEC. 101. INDEPENDENT PERFORMANCE OF ACQUISITION OVERSIGHT FUNCTIONS.

  (a) In General.--Chapter 4 of title 10, United States Code, is 
amended by adding at the end the following new section:

``Sec. 145. Principal advisors for acquisition oversight functions

  ``(a) Assignment of Acquisition Oversight Functions.--The Secretary 
of Defense shall designate an official within the Office of the 
Secretary of Defense as the principal advisor to the Secretary for each 
acquisition oversight function specified in subsection (c). An official 
may be designated to perform one or more of such functions. The 
performance of duties pursuant to a designation under this section 
shall not limit or otherwise affect the performance of any other duties 
assigned to such official by the Secretary or by other officers of the 
Department responsible for the management and direction of such 
official except as necessary to satisfy the requirements of subsection 
(b).
  ``(b) Qualifications.--In designating an official for a function 
pursuant to subsection (a), the Secretary shall ensure that the 
official reports directly to the Secretary in the performance of such 
function and is--
          ``(1) highly expert in matters relating to the function;
          ``(2) assigned the appropriate staff and resources necessary 
        to carry out the function;
          ``(3) independent from those engaged in the execution of 
        acquisition programs;
          ``(4) free of any undue political influence; and
          ``(5) free of any personal conflict of interest.
  ``(c) Acquisition Oversight Functions.--(1) The acquisition oversight 
functions to be performed by officials designated pursuant to 
subsection (a) are as follows:
          ``(A) Cost estimation.
          ``(B) Systems engineering.
          ``(C) Performance assessment.
          ``(D) Such other acquisition functions as the Secretary 
        considers appropriate.
  ``(2) Each acquisition oversight function specified in paragraph (1) 
shall cover all phases of an acquisition program, including setting of 
requirements, formulation and execution of budgets, and program 
execution.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following new item:

``145. Principal advisors for acquisition oversight functions.''.

SEC. 102. OVERSIGHT OF COST ESTIMATION.

  (a) In General.--Chapter 137 of title 10, United States Code, is 
amended by adding at the end the following new section:

``Sec. 2334. Acquisition oversight: oversight of cost estimation

  ``(a) Issuance of Policies, Procedures, Guidance, and Cost 
Estimates.--The official assigned oversight of cost estimation pursuant 
to section 145 of this title shall issue the following:
          ``(1) Policies and procedures governing the conduct of cost 
        estimation and cost analysis generally for the acquisition 
        programs of the Department of Defense.
          ``(2) Guidance relating to cost estimates and cost analyses 
        conducted in connection with major defense acquisition programs 
        under chapter 144 of this title or major automated information 
        system programs under chapter 144A of this title.
          ``(3) Guidance relating to the proper selection of confidence 
        levels for cost estimates generally, and specifically, for the 
        proper selection of confidence levels for cost estimates for 
        major defense acquisition programs under chapter 144 of this 
        title or major automated information system program under 
        chapter 144A of this title.
          ``(4) Guidance relating to full consideration of life-cycle 
        management and sustainability costs of major defense 
        acquisition programs under chapter 144 of this title or major 
        automated information system programs under chapter 144A of 
        this title.
          ``(5) 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 title 10, United States Code;
                          ``(ii) any decision to enter into low-rate 
                        initial production or full-rate production;
                          ``(iii) any certification under section 
                        2433(e)(2) of this title; and
                          ``(iv) any report under section 2445c(f) of 
                        this title; and
                  ``(B) at any other time considered necessary by such 
                official or upon the request of the Under Secretary of 
                Defense for Acquisition, Technology, and Logistics.
  ``(b) Review of Cost Estimates, Cost Analyses, Cost Indexes, and 
Records of the Military Departments.--The Secretary of Defense shall 
ensure that the official designated for oversight of cost estimation 
pursuant to section 145 of this title--
          ``(1) promptly receives the results of all cost estimates and 
        cost analyses conducted by the military departments, and all 
        studies conducted by the military departments in connection 
        with such cost estimates and cost analyses, for major defense 
        acquisition programs and major automated information systems of 
        the military departments, and is authorized to comment on such 
        estimates, analyses, and studies; and
          ``(2) has timely access to any records and data in the 
        Department of Defense (including the records and data of each 
        military department and including classified and proprietary 
        information as appropriate) that the official considers 
        necessary to review in order to carry out any duties under this 
        section.
  ``(c) Participation, Concurrence, and Approval in Cost Estimation.--
The Secretary of Defense shall ensure that the official designated for 
oversight of cost estimation pursuant to section 145 of this title is 
involved in all discussions relating to cost estimation and the 
estimation of resource levels required for major defense acquisition 
programs and major automated information systems of the Department of 
Defense generally at all stages of such programs and may--
          ``(1) participate in the formulation of study guidance for 
        analyses of alternatives for major defense acquisition 
        programs;
          ``(2) participate in discussion of resources associated with 
        requirements;
          ``(3) participate in the discussion of any discrepancies 
        between an independent cost estimate and the cost estimate of a 
        military department for a major defense acquisition program or 
        major automated information system of the Department of 
        Defense;
          ``(4) approve or disapprove, at such official's sole 
        discretion, the confidence level used in establishing a 
        baseline description or budget estimate for a major defense 
        acquisition program or major automated information system of 
        the Department of Defense at any of the events specified in 
        paragraph (5) of subsection (a) of this section;
          ``(5) concur in the choice of a baseline description or 
        budget estimate for use at any of the events specified in 
        paragraph (5) of subsection (a) of this section; and
          ``(6) participate in consideration of any decision to request 
        authorization of a multiyear procurement contract for a major 
        defense acquisition program.
  ``(d) Disclosure of Confidence Levels for Baseline Estimates of Major 
Defense Acquisition Programs.--The official designated to perform 
oversight of cost estimation pursuant to section 145 of this title, in 
approving a confidence level for use in a major defense acquisition 
program pursuant to subsection (c)(4), shall--
          ``(1) disclose the confidence level used in establishing a 
        baseline estimate for the major defense acquisition program, 
        the rationale for selecting such confidence level, and, if such 
        confidence level is less than 80 percent, the justification for 
        selecting a confidence level of less than 80 percent; and
          ``(2) include the disclosure required by paragraph (1) in any 
        decision documentation approving a baseline estimate for the 
        major defense acquisition program, in the next Selected 
        Acquisition Report pursuant to section 2432 of this title for 
        the major defense acquisition program, and in the next annual 
        report submitted under subsection (f).
  ``(e) Relationship to Cost Analysis Improvement Group.--The official 
designated to perform oversight of cost estimation pursuant to section 
145 of this title shall be assigned responsibility for the management 
and oversight of the Cost Analysis Improvement Group of the Department 
of Defense.
  ``(f) Annual Report.--Not later than March 1 of each year, beginning 
on March 1, 2010, the official designated to perform oversight of cost 
estimation pursuant to section 145 of this title shall submit to the 
congressional defense committees a report on the activities undertaken 
pursuant to this section during the preceding year. The report shall be 
in an unclassified form but may include a classified annex.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following new item:

``2334. Acquisition oversight: oversight of cost estimation.''.

SEC. 103. OVERSIGHT OF SYSTEMS ENGINEERING.

  (a) In General.--Chapter 137 of title 10, United States Code, as 
amended by section 102, is further amended by adding at the end the 
following new section:

``Sec. 2334a. Acquisition oversight: oversight of systems engineering

  ``(a) Issuance of Policies, Procedures, and Guidance.--The official 
designated to perform oversight of systems engineering pursuant to 
section 145 of this title shall--
          ``(1) issue policies, procedures, and guidance for all 
        elements of the Department of Defense concerning--
                  ``(A) the use of systems engineering principles and 
                best practices, generally;
                  ``(B) the use of systems engineering approaches to 
                enhance reliability, availability, and maintainability 
                on major defense acquisition programs;
                  ``(C) the development of systems engineering master 
                plans for major defense acquisition programs, including 
                systems engineering considerations in support of life-
                cycle management and sustainability;
                  ``(D) the inclusion of provisions relating to systems 
                engineering and reliability growth in requests for 
                proposals;
                  ``(E) the appropriate use of development planning to 
                reduce the time from system development to deployment, 
                to reduce development risk and cost growth, and to 
                provide future benchmarks against which to trade 
                requirements, cost, and schedule;
                  ``(F) developmental test and evaluation generally;
                  ``(G) in coordination with the Director of 
                Operational Test and Evaluation, the integration of 
                developmental test and evaluation with operational test 
                and evaluation;
                  ``(H) in coordination with the Director of 
                Operational Test and Evaluation, the development of 
                test and evaluation master plans for major defense 
                acquisition programs; and
                  ``(I) the use of developmental test and evaluation as 
                part of a coordinated systems engineering approach to 
                system development; and
          ``(2) provide advocacy, oversight, and direction to elements 
        of the acquisition workforce responsible for functions relating 
        to systems engineering, developmental test and evaluation, and 
        life-cycle management and sustainability.
  ``(b) Participation in Requirements Discussions.--The official 
designated to perform oversight of systems engineering pursuant to 
section 145 of this title shall provide input on the inclusion of 
systems engineering requirements in the process for consideration of 
joint military requirements by the Joint Requirements Oversight Council 
pursuant to section 181 of title 10, United States Code, including 
specific input relating to each capabilities development document.
  ``(c) Access to Records of the Military Departments.--The official 
designated to perform oversight of systems engineering pursuant to 
section 145 of this title shall have access to any records or data of 
the Department of Defense (including the records and data of each 
military department and including classified and proprietary 
information as appropriate) that the official considers necessary to 
review in order to carry out any duties under this section.
  ``(d) Assessment of Military Department Capabilities for Systems 
Engineering and Developmental Test and Evaluation.--The official 
designated to perform oversight of systems engineering pursuant to 
section 145 of this title shall--
          ``(1) periodically assess the capabilities of the military 
        departments for systems engineering (including development 
        planning) and developmental test and evaluation;
          ``(2) provide such assessment, along with such 
        recommendations for improvement as the official considers 
        necessary, to the Secretary of Defense and the Under Secretary 
        of Defense for Acquisition, Technology, and Logistics; and
          ``(3) include such assessment and recommendations in the 
        annual report required by subsection (g).
  ``(e) Review and Approval of Plans for Major Defense Acquisition 
Programs.--The official designated to perform oversight of systems 
engineering pursuant to section 145 of this title shall review and 
approve the following plans with respect to any major defense 
acquisition program:
          ``(1) The systems engineering master plan.
          ``(2) The developmental test and evaluation plan within the 
        test and evaluation master plan.
  ``(f) Reporting Through Under Secretary.--The official designated to 
perform oversight of systems engineering pursuant to section 145 of 
this title shall report to the Secretary of Defense through the Under 
Secretary of Defense for Acquisition, Technology, and Logistics.
  ``(g) Annual Report.--Not later than March 1 of each year, beginning 
on March 1, 2010, the official designated to perform oversight of 
systems engineering pursuant to section 145 of this title shall submit 
to the congressional defense committees a report on the activities 
undertaken pursuant to this section during the preceding year. The 
report shall be in unclassified form but may include a classified 
annex.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter, as amended by section 102, is further amended by adding 
at the end the following new item:

``2334a. Acquisition oversight: oversight of systems engineering.''.

SEC. 104. OVERSIGHT OF PERFORMANCE ASSESSMENT.

  (a) In General.--Chapter 137 of title 10, United States Code, as 
amended by section 103, is further amended by adding at the end the 
following new section:

``Sec. 2334b. Acquisition oversight: oversight of performance 
                    assessment

  ``(a) Issuance of Policies, Procedures, and Guidance for Performance 
Assessments.--The official designated to perform oversight of 
performance assessment pursuant to section 145 of this title shall be 
responsible for the issuance of policies, procedures, and guidance 
governing the conduct of performance assessments for the acquisition 
programs of the Department of Defense, including assessment of the 
extent to which acquisition programs--
          ``(1) deliver sufficient capability to the warfighter;
          ``(2) achieve timely delivery of such capability; and
          ``(3) deliver a level of value consistent with resources 
        expended.
  ``(b) Assessment of Baseline Quality.--The official designated to 
perform oversight of performance assessment pursuant to section 145 of 
this title shall periodically assess the suitability of the baseline 
descriptions required by section 2435 of title 10, United States Code, 
of major defense acquisition programs for providing a basis for 
performance assessment and make such recommendations to the Secretary 
of Defense and the Under Secretary of Defense for Acquisition, 
Technology, and Logistics as the official considers necessary to 
improve the suitability of baseline descriptions for such purpose.
  ``(c) Earned Value Management System.--The official designated to 
perform oversight of performance assessment pursuant to section 145 of 
this title shall be responsible for the management and oversight of the 
records of the earned value management system of the Department of 
Defense.
  ``(d) Participation in Certain Program Reviews.--The official 
designated to perform oversight of performance assessment pursuant to 
section 145 of this title is authorized to present an assessment of the 
performance of a major defense acquisition program during--
          ``(1) any discussions prior to certification under section 
        2433(e)(2) of this title;
          ``(2) any discussions prior to entry into full-rate 
        production; and
          ``(3) consideration of any decision to request authorization 
        of a multiyear procurement contract for a major defense 
        acquisition program.
  ``(e) Annual Report.--Not later than March 1 of each year, beginning 
on March 1, 2010, the official designated to perform oversight of 
performance assessment pursuant to section 145 of this title shall 
submit to the congressional defense committees a report on the 
activities undertaken pursuant to this section during the preceding 
year. The report shall be in unclassified form but may include a 
classified annex.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter, as amended by section 103, is further amended by adding 
at the end the following new item:

``2334b. Acquisition oversight: oversight of performance assessment.''.

SEC. 105. ASSESSMENT OF TECHNOLOGICAL MATURITY OF CRITICAL TECHNOLOGIES 
                    OF MAJOR DEFENSE ACQUISITION PROGRAMS BY THE 
                    DIRECTOR OF DEFENSE RESEARCH AND ENGINEERING.

  (a) Assessment by Director of Defense Research and Engineering.--
          (1) In general.--Section 139a of title 10, United States 
        Code, is amended by adding at the end the following new 
        subsection:
  ``(c)(1) The Director of Defense Research and Engineering shall 
periodically review and assess the technological maturity and 
integration risk of critical technologies of the major defense 
acquisition programs of the Department of Defense and report on the 
findings of such reviews and assessments to the Under Secretary of 
Defense for Acquisition, Technology, and Logistics.
  ``(2) The Director shall submit to the Secretary of Defense and to 
the congressional defense committees by January 1 of each year a report 
on the technological maturity and integration risk of critical 
technologies of the major defense acquisition programs of the 
Department of Defense.''.
          (2) First annual report.--The first annual report under 
        subsection (c)(2) of section 139a of title 10, United States 
        Code (as added by paragraph (1)), shall be submitted to the 
        congressional defense committees not later than March 1, 2011, 
        and shall address the results of reviews and assessments 
        conducted by the Director of Defense Research and Engineering 
        pursuant to subsection (c)(1) of such section (as so added) 
        during the preceding calendar year.
  (b) Report on Resources for Implementation.--Not later than 120 days 
after the date of the enactment of this Act, the Director of Defense 
Research and Engineering shall submit to the congressional defense 
committees a report describing any additional resources that may be 
required by the Director, and by other research and engineering 
elements of the Department of Defense, to carry out the following:
          (1) The requirements under the amendment made by subsection 
        (a)(1).
          (2) The technological maturity assessments required by 
        section 2366b(a) of title 10, United States Code.
          (3) The requirements of Department of Defense Instruction 
        5000, as revised.

SEC. 106. ROLE OF THE COMMANDERS OF THE COMBATANT COMMANDS IN 
                    IDENTIFYING JOINT MILITARY REQUIREMENTS.

  (a) In General.--Section 181(d) of title 10, United States Code, is 
amended--
          (1) by inserting ``(1)'' before ``The Under Secretary''; and
          (2) by adding at the end the following new paragraph:
  ``(2) The Council shall seek and consider input from the commanders 
of the combatant commands in carrying out its mission under paragraphs 
(1) and (2) of subsection (b) and in conducting periodic reviews in 
accordance with the requirements of subsection (e). Such input may 
include, but is not limited to, an assessment of the following:
          ``(A) Any current or projected missions or threats in the 
        theater of operations of the commander of a combatant command 
        that would inform the assessment of a new joint military 
        requirement.
          ``(B) The necessity and sufficiency of a proposed joint 
        military requirement in terms of current and projected missions 
        or threats.
          ``(C) The relative priority of a proposed joint military 
        requirement in comparison with other joint military 
        requirements within the theater of operations of a commander of 
        a combatant command.
          ``(D) The ability of partner nations in the theater of 
        operations of the commander of a combatant command to assist in 
        meeting the joint military requirement or the benefit, if any, 
        of a partner nation assisting in development or use of 
        technologies developed to meet the joint military 
        requirement.''.
  (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 (1) subsection (d)(2) of section 181 of title 10, 
United States Code (as amended by subsection (a)), for the Joint 
Requirements Oversight Council to solicit and consider input from the 
commanders of the combatant commands, and (2) subsection (b) of section 
181 of title 10, United States Code (as amended by section 942 of the 
National Defense Authorization Act for Fiscal Year 2008 (Public Law 
110-181; 122 Stat. 287)). 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.

                      TITLE II--ACQUISITION POLICY

SEC. 201. ACQUISITION STRATEGIES ENSURING COMPETITION THROUGHOUT THE 
                    LIFECYCLE OF MAJOR DEFENSE ACQUISITION PROGRAMS.

   (a) Acquisition Strategy Ensuring Competition.--The Secretary of 
Defense shall ensure that the acquisition strategy for each major 
defense acquisition program includes--
          (1) measures to ensure competition, or the option of 
        competition, at both the prime contract level and the 
        subcontract level (at such tier or tiers as are appropriate) of 
        such program throughout the life-cycle of such program as a 
        means to improve contractor performance; and
          (2) adequate documentation of the rationale for the selection 
        of the subcontract tier or tiers under paragraph (1).
  (b) Measures To Ensure Competition.--The measures to ensure 
competition, or the option of competition, for purposes of subsection 
(a) may include measures to achieve the following, in appropriate cases 
if such measures are cost-effective:
          (1) Competitive prototyping.
          (2) Dual-sourcing.
          (3) Unbundling of contracts.
          (4) Funding of a second source for interchangeable, next-
        generation prototype systems or subsystems.
          (5) Use of modular, open architectures to enable competition 
        for upgrades.
          (6) Use of build-to-print approaches to enable production 
        through multiple sources.
          (7) Acquisition of complete technical data packages.
          (8) Periodic competitions for subsystem upgrades.
          (9) Licensing of additional suppliers.
          (10) Periodic system or program reviews to address long-term 
        competitive effects of program decisions.
  (c) Consideration of Competition Throughout Operation and Sustainment 
of Major Defense Acquisition Programs.--In carrying out this section, 
the Secretary of Defense shall ensure that, with respect to maintenance 
of a major defense acquisition program, consideration is given to 
capabilities within the Department of Defense to perform maintenance 
functions.

SEC. 202. ADDITIONAL REQUIREMENTS FOR CERTAIN MAJOR DEFENSE ACQUISITION 
                    PROGRAMS.

  (a) Additional Requirements Relating to Milestone B Approval.--
Section 2366b of title 10, United States Code, is amended--
          (1) in subsection (d)--
                  (A) by inserting ``(1)'' before ``The milestone 
                decision authority may''; and
                  (B) by striking the second sentence and inserting the 
                following:
  ``(2) Whenever the milestone decision authority makes such a 
determination and authorizes such a waiver--
          ``(A) the waiver, the determination, and the reasons for the 
        determination shall be submitted in writing to the 
        congressional defense committees within 30 days after the 
        waiver is authorized; and
          ``(B) the milestone decision authority shall review the 
        program not less often than annually to determine the extent to 
        which such program currently satisfies the certification 
        components specified in paragraphs (1) and (2) of subsection 
        (a) until such time as the milestone decision authority 
        determines that the program satisfies all such certification 
        components.'';
          (2) by redesignating subsections (e) and (f) as subsections 
        (f) and (g), respectively, and inserting after subsection (d) 
        the following new subsection (e):
  ``(e) Designation of Certification Status in Budget Documentation.--
Any budget request, budget justification material, budget display, 
reprogramming request, Selected Acquisition Report, or other budget 
documentation or performance report submitted by the Secretary of 
Defense to the President regarding a major defense acquisition program 
receiving a waiver pursuant to subsection (d) shall prominently and 
clearly indicate that such program has not fully satisfied the 
certification requirements of this section until such time as the 
milestone decision authority makes the determination that such program 
has satisfied all certification components pursuant to subsection 
(d)(2)(B).'';
          (3) in subsection (a)--
                  (A) in paragraph (1), by striking ``and'' at the end;
                  (B) by redesignating paragraph (2) as paragraph (3);
                  (C) by inserting after paragraph (1) the following 
                new paragraph (2):
          ``(2) has received a preliminary design review and conducted 
        a formal post-preliminary design review assessment, and 
        certifies on the basis of such assessment that the program 
        demonstrates a high likelihood of accomplishing its intended 
        mission or that no preliminary design review is necessary for 
        such program to demonstrate a high likelihood of accomplishing 
        its intended mission; and''; and
                  (D) in paragraph (3), as redesignated by subparagraph 
                (B) of this paragraph--
                          (i) in subparagraph (D), by striking the 
                        semicolon and inserting ``, as determined by 
                        the Milestone Decision Authority on the basis 
                        of an independent review and assessment by the 
                        Director of Defense Research and Engineering; 
                        and'';
                          (ii) by striking subparagraph (E); and
                          (ii) by redesignating subparagraph (F) as 
                        subparagraph (E).
  (b) Certification and Review of Programs Entering Development Prior 
to Enactment of Section 2366b of Title 10.--
          (1) Determination.--(A) Except as provided in subparagraph 
        (B), beginning not later than 270 days after the date of the 
        enactment of this Act, for each major defense acquisition 
        program that has not received a Milestone C approval, or Key 
        Decision Point C approval in the case of a space program, the 
        Milestone Decision Authority shall determine whether or not the 
        program satisfies the certification components specified in 
        paragraphs (1) and (2) of subsection (a) of section 2366b of 
        title 10, United States Code.
          (B) Subparagraph (A) shall not apply to a major defense 
        acquisition program that has been reviewed pursuant to section 
        2366b of title 10, United States Code, prior to the date that 
        is 270 days after the date of the enactment of this Act, or a 
        major defense acquisition program that has not yet received 
        Milestone B approval.
          (2) Annual review.--The Milestone Decision Authority shall 
        review any program determined pursuant to paragraph (1) not to 
        satisfy the certification components of subsection (a) of 
        section 2366b of title 10, United States Code, not less often 
        than annually thereafter to determine the extent to which such 
        program currently satisfies the certification components 
        specified in paragraphs (1) and (2) of subsection (a) of such 
        section until such time as the Milestone Decision Authority 
        determines that the program satisfies all such certification 
        components.
          (3) Designation of certification status in budget 
        documentation.--Any budget request, budget justification 
        material, budget display, reprogramming request, Selected 
        Acquisition Report, or other budget documentation or 
        performance report submitted by the Secretary of Defense to the 
        President regarding a major defense acquisition program which 
        the Milestone Decision Authority determines under paragraph (1) 
        does not satisfy the certification components specified in 
        paragraphs (1) and (2) of subsection (a) of section 2366b of 
        title 10, United States Code, shall prominently and clearly 
        indicate that such program has not fully satisfied such 
        certification components until such time as the Milestone 
        Decision Authority makes the determination that such program 
        has satisfied all certification components pursuant to 
        paragraph (2).
  (c) Reviews of Programs Restructured After Experiencing Critical Cost 
Growth.--The official designated to perform oversight of performance 
assessment pursuant to section 145 of title 10, United States Code, as 
added by this Act, shall annually review each major defense acquisition 
program that has been considered pursuant to paragraph (2) of section 
2433(e) of title 10, United States Code, and which has been certified 
as necessary to continue pursuant to such paragraph, to assess the 
success of the program in achieving adequate program performance after 
the completion of such consideration. The results of reviews performed 
pursuant to this subsection shall be included in the next annual report 
of such official.

SEC. 203. REQUIREMENT FOR CERTIFICATION OF MAJOR SYSTEMS PRIOR TO 
                    MILESTONE B.

  (a) Certification.--Except as provided in subsection (b), beginning 
not later than 270 days after the date of the enactment of this Act, 
for each major defense acquisition program that has not received 
Milestone B approval, or Key Decision Point B approval in the case of a 
space program, the Milestone Decision Authority shall certify, after 
consultation with the Joint Requirements Oversight Council on matters 
relating to program requirements and military needs--
          (1) that the program fulfills an approved initial 
        capabilities document;
          (2) that the program is being executed by an entity with a 
        relevant core competency as identified by the Secretary of 
        Defense under section 118b of title 10, United States Code;
          (3) if the program duplicates a capability already provided 
        by an existing program, the duplication provided by such 
        program is necessary and appropriate;
          (4) that a cost estimate for such program has been submitted 
        to the Milestone Decision Authority and that the concurrence of 
        the official designated to perform oversight of cost estimation 
        pursuant to section 145 of title 10, United States Code, has 
        been obtained regarding the choice of a cost estimate; and
          (5) that a schedule identifying the time and major activities 
        required to reach Milestone B approval, or Key Decision Point B 
        approval in the case of a space program, has been submitted to 
        the Milestone Decision Authority.
  (b) Exception.--Subsection (a) shall not apply to a major defense 
acquisition program that has received a certification as required by 
section 2366a, title 10, United States Code.
  (c) Reports.--
          (1) Relating to cost growth or schedule delay of programs 
        certified under subsection (a).--With respect to a major 
        defense acquisition program certified by the Milestone Decision 
        Authority under subsection (a), the Milestone Decision 
        Authority shall submit to the congressional defense committees 
        a report in accordance with this subsection if, prior to 
        Milestone B approval--
                  (A) the projected cost of the program exceeds the 
                cost estimate for the program submitted to the 
                Milestone Decision Authority in accordance with 
                subsection (a)(4) by more than 25 percent; or
                  (B) the schedule submitted to the Milestone Decision 
                Authority in accordance with subsection (a)(5) is 
                delayed by more than 25 percent.
          (2) Relating to cost growth of programs certified under 
        section 2366a.--With respect to a major defense acquisition 
        program certified by the Milestone Decision Authority under 
        section 2366a of title 10, United States Code, the Milestone 
        Decision Authority shall submit to the congressional defense 
        committees a report in accordance with this subsection if the 
        program manager submits a notification to the Milestone 
        Decision Authority pursuant to section 2366a(b).
          (3) Matters covered.--Any report submitted pursuant to 
        paragraph (1) or (2) shall--
                  (A) identify the root causes of the cost or schedule 
                growth;
                  (B) identify appropriate acquisition performance 
                measures for the remainder of the program; and
                  (C) include one of the following:
                          (i) A written certification (with a 
                        supporting explanation) stating that--
                                  (I) such program is essential to 
                                national security;
                                  (II) there are no alternatives to 
                                such program that will provide 
                                acceptable military capability at less 
                                cost;
                                  (III) new estimates of the cost or 
                                schedule, as appropriate, are 
                                reasonable; and
                                  (IV) the management structure for the 
                                program is adequate to manage and 
                                control program cost and schedule.
                          (ii) A plan for terminating the development 
                        of the program or withdrawal of Milestone A 
                        approval (or Key Decision Point A approval in 
                        the case of a space program) if the Milestone 
                        Decision Authority determines that such action 
                        is in the interest of national defense.
          (4) Time of submission.--A report required by this subsection 
        shall be submitted--
                  (A) in the case of a report required by paragraph 
                (1), not later than 30 days after the Milestone 
                Decision Authority determines the cost growth or 
                schedule delay described in that paragraph; and
                  (B) in the case of a report required by paragraph 
                (2), not later than 30 days after the Milestone 
                Decision Authority receives the notification from the 
                program manager described in that paragraph.
  (d) Definitions.--In this section:
          (1) Major defense acquisition program.--The term ``major 
        defense acquisition program'' means the following:
                  (A) A major defense acquisition program as that term 
                is defined in section 2430 of title 10, United States 
                Code.
                  (B) An acquisition program of the Department of 
                Defense that the Secretary of Defense expects to become 
                a major defense acquisition program (as defined in such 
                section 2430) upon Milestone B approval, on the basis 
                of the cost estimate submitted in accordance with 
                subsection (a)(4) of this section or subsection (a)(4) 
                of section 2366a of title 10, United States Code.
          (2) Initial capabilities document.--The term ``initial 
        capabilities document'' has the meaning provided by section 
        2366a (c)(2) of such title.
          (3) Entity.--The term ``entity'' has the meaning provided by 
        section 2366a(c)(4) of such title.
          (4) Milestone b approval.--The term ``Milestone B approval'' 
        has the meaning provided by section 2366(e)(7) of such title.

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

  (a) Authorized Actions in Event of Critical Cost Growth.--Paragraph 
(2) of section 2433(e) of title 10, United States Code, is amended to 
read as follows:
  ``(2)(A) If the program acquisition unit cost or procurement unit 
cost of a major defense acquisition program or designated major 
subprogram (as determined by the Secretary under subsection (d)) 
increases by a percentage equal to or greater than the critical cost 
growth threshold for the program or subprogram, the Secretary of 
Defense, after consultation with the Joint Requirements Oversight 
Council regarding program requirements, shall--
          ``(i) determine the root cause or causes of the critical cost 
        growth including the role, if any, of--
                  ``(I) changes or growth in requirements;
                  ``(II) unrealistic baseline estimates;
                  ``(III) any design, engineering, manufacturing, or 
                technology integration issues;
                  ``(IV) changes in procurement quantities;
                  ``(V) inadequate program funding or funding 
                instability;
                  ``(VI) poor performance by government or contractor 
                personnel responsible for program management; or
                  ``(VII) other causes as identified by the Secretary;
          ``(ii) subject to subparagraph (B), determine whether to 
        terminate such program or to restructure such program after 
        assessing--
                  ``(I) the root causes of cost growth identified 
                pursuant to subparagraph (A);
                  ``(II) the validity and urgency of the joint military 
                requirement;
                  ``(III) the viability of the acquisition strategy;
                  ``(IV) the quality of program management;
                  ``(V) a broad range of potential material and non-
                material alternatives to such program; and
                  ``(VI) the need to reduce funding for other programs 
                due to the cost growth on such program;
          ``(iii) submit the determination made under clause (ii) 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; and
          ``(iv) if a report under paragraph (1) has been previously 
        submitted to Congress with respect to such program or 
        subprogram for the current fiscal year but was based upon a 
        different unit cost report from the program manager to the 
        service acquisition executive designated by the Secretary 
        concerned, submit a further report containing the information 
        described in subsection (g), determined from the time of the 
        previous report to the time of the current report.
  ``(B) A program may be restructured pursuant to a determination under 
subparagraph (A)(ii) only if--
          ``(i) a written certification (with a supporting explanation) 
        is submitted along with the determination stating that--
                  ``(I) such program is essential to national security;
                  ``(II) there are no alternatives to such program 
                which will provide acceptable military capability at 
                less cost;
                  ``(III) new estimates of the program acquisition unit 
                cost or procurement unit cost are reasonable;
                  ``(IV) the program is a higher priority than programs 
                whose funding must be reduced to accommodate cost 
                growth on such program; and
                  ``(V) the management structure for the program is 
                adequate to manage and control program acquisition unit 
                cost or procurement unit cost; and
          ``(ii) the most recent milestone decision is revisited and 
        results in the approval of such restructured program.''.
  (b) Total Expenditure for Procurement Resulting in Treatment as Major 
Defense Acquisition Program.--Section 2430(a)(2) of such title is 
amended by inserting ``, including all planned increments or spirals,'' 
after ``an eventual total expenditure for procurement''.
  (c) Requirement to Include Cost Growth Funding Changes in Report.--
When a program is restructured under paragraph (2) of section 2433(e) 
of title 10, United States Code, the next Selected Acquisition Report 
for such program submitted pursuant to section 2432 of such title 
occurring after the submission of the budget for the fiscal year 
following the fiscal year in which the program was restructured shall 
contain a description of all funding changes included in the budget for 
that fiscal year as a result of the cost growth on such program, 
including reductions made in the budgets of other programs to 
accommodate such cost growth.
  (d) Conforming Amendments.--Section 2433(e)(3) of such title is 
amended--
          (1) in subparagraph (A), by striking ``or (2)(B)'' and 
        inserting ``or (2)(A)(iii)''; and
          (2) in subparagraph (B)--
                  (A) by striking ``or (2)(B)'' and inserting ``or 
                (2)(A)(iii)''; and
                  (B) by striking ``paragraph (2)(A)'' and inserting 
                ``paragraph (2)(B)''.

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

  (a) Requirement for Panel to Present Recommendations.--Not later than 
one year after the date of the enactment of this Act, the Panel on 
Contracting Integrity established pursuant to section 813 of the John 
Warner National Defense Authorization Act for Fiscal Year 2007 (Public 
Law 109-364; 120 Stat. 2320) shall present recommendations to the 
Secretary of Defense on measures to eliminate or mitigate 
organizational conflicts of interest in the acquisition of major 
weapons systems.
  (b) Revised Regulations Required.--Not later than 180 days after 
receiving recommendations pursuant to subsection (a), the Secretary of 
Defense 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.
  (c) Potential Organizational Conflicts of Interest.--The 
organizational conflicts of interest considered during the preparation 
of the recommendations required pursuant to subsection (a) shall 
include conflicts that could arise as a result of any of the following:
          (1) Lead system integrator contracts on major defense 
        acquisition programs and contracts that follow lead system 
        integrator contracts on such programs, particularly contracts 
        for production.
          (2) The ownership of business units performing systems 
        engineering and technical assistance functions, professional 
        services, or management support services in relation to major 
        defense acquisition programs by contractors who simultaneously 
        own business units competing to perform as either the prime 
        contractor or the supplier of a major subsystem or component 
        for such programs.
          (3) The award of major subsystem contracts by a prime 
        contractor for a major defense acquisition program to business 
        units or other affiliates of the same parent corporate entity, 
        and particularly the award of subcontracts for software 
        integration or the development of a proprietary software system 
        architecture.
          (4) The performance by, or assistance of, contractors in 
        technical evaluations on major defense acquisition programs.
  (d) Extension of Panel on Contracting Integrity.--Subsection (e) of 
section 813 of the John Warner National Defense Authorization Act for 
Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2321) is amended to 
read as follows:
  ``(e) Termination.--(1) Subject to the restriction in paragraph (2), 
the panel shall continue to serve until the date that is 18 months 
after the date on which the Secretary of Defense notifies the 
congressional defense committees of an intention to terminate the panel 
based on a determination that the activities of the panel no longer 
justify its continuation and that concerns about contracting integrity 
have been fully mitigated.
  ``(2) The panel shall continue to serve at least until December 31, 
2011.''.

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

   (a) Review of Mechanisms for Considering Trade-Offs.--The 
Comptroller General shall review the use by the Department of Defense 
of certain mechanisms for considering trade-offs among cost, schedule, 
and performance in the acquisition of major weapon systems.
  (b) Mechanisms Included.--The mechanisms reviewed pursuant to 
subsection (a) shall include--
          (1) the Tri-Chair Committee, as defined in section 817 of the 
        National Defense Authorization Act for Fiscal Year 2008 (Public 
        Law 110-181; 122 Stat. 225);
          (2) Configuration Steering Boards as established pursuant to 
        section 814 of the Duncan Hunter National Defense Authorization 
        Act for Fiscal Year 2009 (Public Law 110-417; 122 Stat. 4528);
          (3) any mechanism that is used or that may potentially be 
        used by the Office of the Under Secretary of Defense 
        (Comptroller) for considering trade-offs among cost, schedule, 
        and performance in the acquisition of major weapon systems; and
          (4) any other mechanisms identified as allowing for the 
        consideration of trade-offs in the report on investment 
        strategies for major defense acquisition programs required by 
        section 817 of the National Defense Authorization Act for 
        Fiscal Year 2008 (Public Law 110-181).
  (c) Assessment of Mechanisms.--The review shall describe and evaluate 
the effectiveness of the mechanisms identified in subsection (b).
  (d) Report.--Not later than one year after the date of the enactment 
of this Act, the Comptroller General shall submit to the congressional 
defense committees a report on the review and assessment performed 
pursuant to this section. The report shall include such recommendations 
as the Comptroller General considers appropriate on the matters 
reviewed, including recommendations to improve the effectiveness of the 
mechanisms included in the report.

                         Purpose and Background

    The purpose of H.R. 2101, the Weapons Acquisition System 
Reform Through Enhancing Technical Knowledge and Oversight Act 
of 2009, is to amend title 10, United States Code, and to 
establish other new statutory requirements, to improve 
efficiency and the quality of outcomes in the acquisition of 
major weapons systems of the Department of Defense.
    The Government Accountability Office performs an annual 
assessment of the major defense acquisition programs of the 
Department. The latest assessment, released on March 30, 2009, 
reported that the Department estimates that its total costs for 
96 major defense acquisition programs will exceed initial 
estimates for those programs by $296.0 billion in constant 
fiscal year 2009 dollars. While these expenses will be incurred 
over an extended period of time, the total is greater than two 
years' worth of salaries and health care expenses incurred for 
all members of the armed forces in fiscal year 2009. The 
Government Accountability Office's analysis of the Department's 
cost overruns, however, measure only one symptom of a larger 
problem. They measure only the performance of the Department in 
fulfilling its acquisition plans. They do not measure the 
extent to which the Department's acquisition plans will allow 
it to fulfill the national military strategy, or the extent to 
which they are consistent with the likely level of budgetary 
resources available to the Department in future fiscal years. 
While there are no clear measures of the Department's 
performance against these benchmarks, it is the committee's 
view that a more complete assessment would reveal that the 
Department's approach to the acquisition and lifecycle 
sustainability of major weapons systems faces greater 
challenges than cost growth alone.
    The committee has worked for decades to improve the 
acquisition of major weapons systems. In 1982, the committee 
created a definition for major defense acquisition programs, 
and required the Department to submit selected acquisition 
reports and unit cost reports on these programs. In 1989, the 
committee established a requirement for the review of major 
defense acquisition programs experiencing certain levels of 
cost growth, an event commonly known as a Nunn-McCurdy breach. 
More recently, beginning in the National Defense Authorization 
Act for Fiscal Year 2006 (Public Law 109-163) and continuing in 
each subsequent fiscal year, the committee has devoted a 
subtitle of each national defense authorization act to 
provisions relating to major defense acquisition programs. As 
part of this subtitle, the committee has enacted legislation 
reforming the processes by which the Department manages major 
defense acquisition programs including how the Department: 
establishes and maintains program baselines; reviews programs 
at critical points in the acquisition process; manages program 
contractors; acquires commercial items for use on programs; 
acquires program technical data; trains and certifies the 
workforce executing programs; and requests authority for 
multiyear procurement. The committee utilized the experience 
gained in these legislative efforts, along with the hearing 
testimony received as described in the section in this report 
on hearings, to formulate its recommendations on H.R. 2101. In 
addition, on March 18, 2009, the committee organized a special 
oversight panel on defense acquisition reform to examine the 
defense acquisition system and possible ways to improve the 
system's outcomes. While the panel's efforts are continuing, 
the panel's input contributed greatly to the committee's 
consideration of the bill.
    This bill seeks to improve the efficiency and quality of 
outcomes in major weapons system acquisition using four primary 
mechanisms. It focuses additional oversight on the early stages 
of major defense acquisition programs, during which time more 
than 70 percent of total program costs are determined. It also 
focuses oversight on programs that demonstrate lack of 
performance: either by failing to satisfy the statutory 
criteria for entering into development for production or by 
experiencing a Nunn-McCurdy breach. It promotes greater use of 
competition. And it promotes and enables the consideration of 
trade-offs between cost, schedule, and performance. The bill 
requires the Secretary of Defense to designate an official or 
officials to perform three critical oversight functions: cost 
estimation, systems engineering, and performance assessment. 
These officials will assist the Secretary in implementing the 
mechanisms the bill establishes. The bill makes other 
organizational improvements in the Department by increasing the 
role of the combatant commanders in setting requirements for 
major defense acquisition programs, requiring the Department to 
address potential organizational conflicts of interest of 
contractors, and rewarding excellence in acquisition. The 
committee believes that in addition to improving the operation 
of the Department, the bill will result in the development and 
submission of more accurate and more objective information to 
support the committee's review of major defense acquisition 
programs.

                          Legislative History

    H.R. 2101 was introduced on April 27, 2009, and referred to 
the Committee on Armed Services.
    On May 7, 2009, the Committee on Armed Services held a 
mark-up session to consider H.R. 2101, as introduced. The 
committee, a quorum being present, ordered reported H.R. 2101, 
as amended, to the House with a favorable recommendation by a 
record vote of 59-0.

                                Hearings

    Committee consideration of the matters contained in H.R. 
2101, the Weapons Acquisition System Reform Through Enhancing 
Technical Knowledge and Oversight Act of 2009, was informed by 
multiple committee hearings. Several hearings were held on 
matters that relate to the acquisition of major weapons systems 
including: a hearing with the Honorable Robert M. Gates, 
Secretary of Defense, on the priorities of the Department of 
Defense in the new Administration conducted on January 27, 
2009; a hearing with Mr. Gene Dodaro, the Acting Comptroller 
General, entitled ``The Department of Defense at High Risk: 
Recommendations of the Comptroller General for Improving 
Departmental Management'' on March 12, 2009; a hearing of the 
panel on defense acquisition reform with Mr. David G. Ahern, 
the Director of Portfolio Systems Acquisition, Department of 
Defense, and Mr. Michael J. Sullivan, Director for Acquisitions 
and Sourcing Management, Government Accountability Office, 
entitled ``Measuring Value and Efficiency: How to Assess the 
Performance of the Defense Acquisition System'' on April 1; a 
hearing of the panel on defense acquisition reform with Ms. 
Laura Baldwin, Director for the Resource Management Program, 
RAND, Mr. William M. Solis, Director for Defense Capabilities 
and Management, Government Accountability Office, Mr. John P. 
Hutton, Director for Acquisitions and Sourcing Management, 
Government Accountability Office, and Mr. Jeffrey P. Parsons, 
Executive Director, U.S. Army Contracting Command, entitled 
``Measuring Value and Risk in Service Contracting'' on April 
23; and a hearing of the oversight and investigations 
subcommittee with Mr. Shay Assad, Acting Deputy Under Secretary 
of Defense for Acquisition and Technology, Lieutenant General 
Ross Thompson, Military Deputy to the Assistant Secretary of 
the Army for Acquisition Logistics, and Technology, Mr. James 
Thomsen, Principal Civilian Deputy to the Assistant Secretary 
of the Navy for the Acquisition Workforce, Lieutenant General 
Mark Shackelford, Military Deputy to the Assistant Secretary of 
the Air Force for Acquisition, and Mr. John K. Needham, 
Director for Acquisition and Sourcing Management, Government 
Accountability Office, entitled ``Acquisition Workforce: Merely 
a Business Expense or a Force Multiplier for the Warfighter'' 
on April 28, 2009. In addition, two hearings were held on the 
bill and related matters after its introduction including: a 
hearing with the Honorable Rudy deLeon, Senior Vice President, 
Center for American Progress, former Deputy Secretary of 
Defense, the Honorable David Chu, former Under Secretary of 
Defense for Personnel and Readiness and former Director for 
Program Analysis and Evaluation, Department of Defense, Mr. 
David Berteau, Director of the Defense Industrial Initiatives 
Group, Center for Strategic and International Studies, and Mr. 
Paul Francis, Director for Acquisitions and Sourcing 
Management, Government Accountability Office, entitled ``Reform 
of Major Weapons Systems Acquisition and Related Legislative 
Proposals'' on April 30, 2009; and a hearing with the Honorable 
Bill Lynn, Deputy Secretary of Defense, entitled ``Department 
of Defense at High Risk: the Chief Management Officer's 
Recommendations for Acquisition Reform and Related High Risk 
Areas'' on May 6, 2009.

                      Section-by-Section Analysis

    The following is a section-by-section analysis of those 
sections of H.R. 2101, as amended, by the Committee on Armed 
Services.

               Section 1--Short Title; Table of Contents

    This section would establish the short title of the bill as 
the ``Weapons Acquisition System Reform Through Enhancing 
Technical Knowledge and Oversight Act of 2009.''

                   TITLE I--ACQUISITION ORGANIZATION


                         LEGISLATIVE PROVISIONS


Section 101--Independent Performance of Acquisition Oversight Functions

    This section would require the Secretary of Defense to 
designate officials within the Office of the Secretary of 
Defense as the principal advisors to the Secretary for each of 
the following acquisition oversight functions: cost estimation, 
systems engineering, and performance assessment. This section 
would allow an official to perform one or more of such 
functions. This section would require the Secretary to select 
officials for these assignments who are: highly expert in the 
function; assigned the appropriate staff and resources to carry 
out the function; independent; and free of undue political 
influence or personal conflict of interest. The officials 
designated under this section would advise the Secretary on 
these functions during the setting of requirements, formulation 
and execution of budgets, and program execution.

               Section 102--Oversight of Cost Estimation

    This section would require the official responsible for 
cost estimation to establish policies and procedures governing 
the conduct of cost estimation and cost analysis in general, 
and in particular for major defense acquisition programs (MDAP) 
and major automated information systems (MAIS). It would 
require the official to issue guidance on the selection of 
confidence levels for cost estimates and guidance relating to 
the consideration of lifecycle management and sustainability 
costs for MDAPs and MAISs. This section would require the 
official to issue independent cost estimates for MDAPs and 
MAISs at milestone A, milestone B, entry into low-rate initial 
production, entry into full-rate production, and after a breach 
of the significant or critical cost growth thresholds (Nunn-
McCurdy breach).
    This section would authorize the official to promptly 
receive the results of all cost estimates for MDAPs and MAISs 
conducted by the military departments and to comment on them. 
The official would also have access to all records of the 
military departments that the official deems necessary. The 
official would participate in formulating study guidance for an 
analysis of alternatives for a MDAP, discussions of resources 
associated with requirements, and discussions regarding a 
decision to request multi-year procurement authority for a 
MDAP. The official would have the sole authority to select the 
confidence level used in establishing a baseline description or 
budget estimate for a MDAP. The baseline description or budget 
estimate used at critical points in the acquisition process for 
a MDAP could be selected only with the official's concurrence. 
The official would be required to disclose the confidence level 
selected for a MDAP, the rationale for such confidence level, 
and justify the decision if the confidence level is less than 
80 percent. The official would be responsible for the 
Department's Cost Analysis Improvement Group. This section 
would require the official to submit an annual activities 
report to the congressional defense committees by March 1 each 
year in unclassified form with a classified annex if necessary.

             Section 103--Oversight of Systems Engineering

    This section would require the official responsible for 
systems engineering to issue policies, procedures, and guidance 
on: the use of systems engineering principles and best 
practices in the Department of Defense; the use of systems 
engineering to enhance reliability, availability, and 
maintainability of major defense acquisition programs (MDAP); 
the development of systems engineering master plans (to include 
consideration of lifecycle management and sustainability) and 
test and evaluation master plans for MDAPs; the inclusion of 
provisions relating to systems engineering and reliability 
growth in requests for proposals; the appropriate use of 
development planning; developmental test and evaluation in 
general; the integration of developmental and operational 
testing; and the use of developmental test and evaluation as 
part of a coordinated systems engineering approach. This 
section would also require the official to provide advocacy, 
oversight, and guidance to the elements of the acquisition 
workforce responsible for systems engineering, developmental 
test and evaluation, and lifecycle management and sustainment. 
This section would require the official to provide the 
congressional defense committees with an annual activities 
report by March 1 each year in unclassified form with a 
classified annex if necessary.
    This section would authorize the official to participate in 
requirements discussions and would provide the official access 
to all records of the military departments that the official 
deems necessary to perform assigned duties. The official would 
be required to periodically assess the capabilities of the 
military departments for systems engineering (including 
development planning) and developmental test and evaluation and 
to provide such recommendations for improvement in such 
capabilities as the official deems necessary to the Secretary 
of Defense. The official would be authorized to review and 
approve the systems engineering master plan and the 
developmental test and evaluation plan within the test and 
evaluation master plans for all MDAPs. The official would 
report to the Secretary of Defense through the Under Secretary 
of Defense for Acquisition, Technology, and Logistics.

            Section 104--Oversight of Performance Assessment

    This section would require the official responsible for 
performance assessment to issue policies, procedures, and 
guidance for assessing the acquisition programs of the 
Department of Defense including the extent to which they 
deliver sufficient capability to the warfighter, achieve timely 
delivery of such capability, and deliver a level of value 
consistent with resources expended. This section would require 
the official to periodically assess the suitability of the 
baseline descriptions of major defense acquisition programs 
(MDAP) for providing a basis for such performance assessment 
and to make recommendations for their improvement to the 
Secretary of Defense and the Under Secretary of Defense for 
Acquisition, Technology, and Logistics.
    This section would make the official responsible for the 
records of the Department's earned value management system. It 
would also authorize the participation of the official in 
reviews of MDAPs at a Nunn-McCurdy breach, entry into full-rate 
production, or any decision to request multi-year procurement 
authority. This section would require the official to provide 
the congressional defense committees with an annual activities 
report by March 1 each year in unclassified form with a 
classified annex if necessary.

     Section 105--Assessment of Technological Maturity of Critical 
 Technologies of Major Defense Acquisition Programs by the Director of 
                    Defense Research and Engineering

    This section would require the Director of Defense Research 
and Engineering to periodically review and assess the 
technological maturity and integration risk of critical 
technologies for major defense acquisition programs and submit 
any related findings to the Under Secretary of Defense for 
Acquisition, Technology, and Logistics. This section would 
require the Director to report annually to the Secretary of 
Defense and to the congressional defense committees on the 
maturity and risk of such technologies. It would also require 
the Director to report to the congressional defense committees 
on any additional resources required to implement this section, 
certain requirements applicable at milestone B, and the 
requirements of Department of Defense Instruction 5000.

Section 106--Role of the Commanders of the Combatant Commands in 
        Identifying Joint Military Requirements

    This section would require the Joint Requirements Oversight 
Council to seek and consider input from the commanders of the 
unified combatant commands in formulating and reviewing joint 
military requirements. The input would include: current or 
projected missions or threats in the theater of operations of a 
combatant commander; the necessity and sufficiency of a 
proposed requirement; the relative priority of a proposed 
requirement; and the ability of partner nations in the 
combatant commander's theater of operations to assist in 
meeting, developing, or using technologies to meet the 
requirement. This section would also require the Comptroller 
General, within two years after the date of enactment of this 
Act, to submit a report to the Senate Committee on Armed 
Services and the House of Representatives Committee on Armed 
Services on the implementation of the requirements of this 
section and of the requirements established by section 942 of 
the National Defense Authorization Act for Fiscal Year 2008 
(Public Law 110-181), and to include in the report an 
assessment of the effectiveness of the input provided pursuant 
to such requirements.

                      TITLE II--ACQUISITION POLICY

                         LEGISLATIVE PROVISIONS


Section 201--Acquisition Strategies Ensuring Competition Throughout the 
            Lifecycle of Major Defense Acquisition Programs

    This section would require the Secretary of Defense to 
ensure that the acquisition strategy for each major defense 
acquisition program includes measures to ensure competition, or 
the option of competition, at both the prime contract and 
subcontract level (at certain subcontract tiers) throughout the 
lifecycle of each program. This section would require 
consideration of such measures as competitive prototyping, 
dual-sourcing, unbundling of contracts, developing second 
sources, use of modular open architectures, use of build to 
print approaches, acquisition of complete technical data 
packages, periodic competitions for subsystem upgrades, 
licensing of additional suppliers, and periodic system reviews 
to address the long-term competitive effects of program 
decisions. This section would also require that the Department 
of Defense's organic capabilities be considered for the 
performance of maintenance support functions.

    Section 202--Additional Requirements for Certain Major Defense 
                          Acquisition Programs

    This section would require the milestone decision authority 
to annually review any major defense acquisition program (MDAP) 
that received milestone B approval due to a waiver of one or 
more of the requirements for certification at milestone B 
required by section 2366b of title 10, United States Code, 
until such time as the program satisfies all of the 
requirements for such certification. This section would require 
a one-time review of MDAPs that received milestone B approval 
prior to the adoption of the current certification 
requirements, and that have not yet received milestone C 
approval, to determine the extent to which they currently 
comply with such certification requirements. MDAPs that are 
determined during the one-time review not to satisfy such 
certification requirements would be subject to annual review by 
the milestone decision authority until such time as they 
achieve compliance. This section would require the Secretary of 
Defense to ensure that any budget request, budget justification 
material, budget display, reprogramming request, selected 
acquisition report, or other budget documentation or 
performance report submitted to the President regarding a 
program that does not yet fully satisfy the certification 
requirements of milestone B clearly indicate the program's 
certification status.
    This section would require annual reviews of MDAPs that 
have been restructured after a critical Nunn-McCurdy breach by 
the official responsible for performance assessment to 
determine the extent to which the restructured program is 
achieving adequate cost and schedule performance. This section 
also would amend section 2366b of title 10, United States Code, 
to require MDAPs to have successfully completed a preliminary 
design review prior to receiving milestone B approval unless a 
preliminary design review is determined to be unnecessary.

 Section 203--Requirement for Certification of Major Systems Prior to 
                              Milestone B

    This section would require the milestone decision authority 
for major defense acquisition programs (MDAP) to review 
programs currently between milestone A and milestone B 
consistent with the requirements of section 2366a of title 10, 
United States Code, relating to the requirements for milestone 
A approval, unless the program has already been subject to a 
review under that section. This section would also require the 
milestone decision authority to submit a report to the 
congressional defense committees within 30 days if a MDAP 
experiences cost growth of 25 percent or more or schedule delay 
of more than 25 percent prior to milestone B approval. The 
report would: identify the root causes of the cost or schedule 
growth for any such MDAP; identify appropriate metrics for the 
assessment of the program going forward; and certify the need 
to continue the program. The certification would: determine 
that the program is essential to national security; that there 
are no alternatives to the program that will provide acceptable 
capability at less cost; that new estimates of cost and 
schedule are reasonable; and that the management of the program 
is adequate. This section would require the milestone decision 
authority to terminate the program or rescind milestone A 
approval if the milestone decision authority determined that 
such action is in the interest of national defense.

Section 204--Critical Cost Growth in Major Defense Acquisition Programs

    This section would amend section 2433 of title 10, United 
States Code, to modify the requirements for review of major 
defense acquisition programs (MDAP) that experience critical 
Nunn-McCurdy breaches. This section would require the Secretary 
of Defense, after consultation with the Joint Requirements 
Oversight Council regarding program requirements, to determine 
the root cause or causes of the cost growth experienced by such 
program and determine whether to terminate or restructure the 
program. This section would require the Secretary to submit 
such determination to Congress, and if the program is 
restructured, to certify that: the program as restructured is 
essential to national security; there are no alternatives to 
such program that will provide acceptable military capability 
at less cost; new cost estimates are reasonable; the program is 
a higher priority than programs whose funding must be reduced 
to accommodate the program's cost growth; and that the 
management structure for the program is adequate.
    This section would require that, after a program is 
restructured under Nunn-McCurdy, the next selected acquisition 
report for the program submitted after a new budget is 
transmitted to Congress contain a description of all funding 
changes included in the budget as a result of the cost growth 
on the program including reductions made in the budgets of 
other programs. This section would further require the 
milestone decision authority for the program to return the 
program to the last milestone decision point for review of the 
program as restructured. This section would also amend section 
2430 of title 10, United States Code, to require unit cost 
reports under such section to include all planned increments or 
spirals of the program in the calculation of total expenditure 
for procurement of such program.

Section 205--Organizational Conflicts of Interest in the Acquisition of 
                         Major Weapons Systems

    This section would require the Panel on Contracting 
Integrity of the Department of Defense to present 
recommendations to the Secretary of Defense on measures to 
eliminate or mitigate organizational conflicts of interest in 
the acquisition of major weapons systems within one year after 
the date of enactment of this Act. The specific areas that the 
Panel would be required to review for potential organizational 
conflicts of interest include: lead system integrator 
contracts; systems engineering and technical assistance 
contracts; the award of major subcontracts to a prime's own 
business units; and contractor performance of technical 
evaluations. This section would further require the Secretary 
of Defense to revise the Defense Supplement to the Federal 
Acquisition Regulations to address organizational conflicts of 
interest by contractors within 180 days after receiving the 
recommendations of the Panel. This section would also extend 
the existence of the Panel on Contracting Integrity until 
December 30, 2011, or a date that is 18 months after the 
Secretary of Defense notifies the congressional defense 
committees of an intention to terminate the Panel, whichever is 
later.

Section 206--Awards for Department of Defense Personnel for Excellence 
              in the Acquisition of Products and Services

    This section would require the Secretary of Defense to 
carry out a program to recognize excellent performance by 
individuals and teams of members of the armed forces and 
Department of Defense civilian personnel in the acquisition of 
products and services. This section would allow the Secretary 
to award cash bonuses as part of the program established under 
this section if such bonuses are authorized under any other 
provision of law.

  Section 207--Consideration of Trade-Offs Among Cost, Schedule, and 
         Performance in the Acquisition of Major Weapon Systems

    This section would require the Comptroller General to 
review the use of certain mechanisms within the Department of 
Defense to consider trade-offs among cost, schedule, and 
performance in the acquisition of major weapons systems. This 
section would require the review to consider mechanisms 
including: the Tri-Chair Committee, a committee consisting of 
the Under Secretary of Defense for Acquisition, Technology, and 
Logistics, the Vice Chairman of the Joint Chiefs of Staff, and 
the Director of Program Analysis and Evaluation; configuration 
steering boards; any mechanism that is used, or that may 
potentially be used, by the Under Secretary of Defense 
Comptroller; and any other relevant mechanisms identified in 
the report on investment strategies for major defense 
acquisition programs required by section 817 of the National 
Defense Authorization Act for Fiscal Year 2008 (Public Law 110-
181). The review would assess the effectiveness of these 
mechanisms and include such recommendations as the Comptroller 
General deems necessary to increase the effectiveness of such 
mechanisms.

                           Committee Position

    On May 7, 2009, the Committee on Armed Services, a quorum 
being present, ordered reported H.R. 2101, as amended, to the 
House with a favorable recommendation by a record vote of 59-0.

                  Congressional Budget Office Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the cost estimate prepared by 
the Congressional Budget Office and submitted pursuant to 
section 402 of the Congressional Budget Act of 1974 is as 
follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 11, 2009.
Hon. Ike Skelton,
Chairman, Committee on Armed Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2101, the Weapons 
Acquisition System Reform Through Enhancing Technical Knowledge 
and Oversight Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Jason 
Wheelock and Kent Christensen.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

H.R. 2101. Weapons Acquisition System Reform Through Enhancing 
        Technical Knowledge and Oversight Act of 2009

    Summary: H.R. 2101 would make several changes to the 
Department of Defense's (DoD's) acquisition procedures and 
regulations for Major Defense Acquisition Programs (MDAPs). In 
addition, the bill would require the Secretary of Defense to 
designate officials to serve as the principal advisors within 
the Office of the Secretary of Defense (OSD) on the acquisition 
functions of cost estimation, systems engineering, and 
performance assessment.
    CBO estimates that implementing H.R. 2101 would cost $55 
million over the 2010-2014 period, assuming the appropriation 
of the necessary funds. CBO's estimate reflects the direct 
costs of implementing H.R. 2101. Although H.R. 2101 might yield 
improvements in the efficiency and effectiveness of DoD's 
acquisition system for MDAPs over time, CBO has no basis for 
determining whether such improvements would occur or to what 
extent they might result in net savings to the government. 
Enacting the bill would not affect direct spending or revenues.
    H.R. 2101 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2101 is shown in the following table. 
The costs of this legislation fall within budget function 050 
(national defense).

----------------------------------------------------------------------------------------------------------------
                                                                   By fiscal year, in millions of dollars--
                                                            ----------------------------------------------------
                                                              2010    2011    2012    2013    2014    2010-2014
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Technology Readiness Assessments:
    Estimated Authorization Level..........................       7       7       7       7       8           36
    Estimated Outlays......................................       7       7       7       7       8           36
Oversight of Cost Estimation:
    Estimated Authorization Level..........................       4       4       4       4       4           20
    Estimated Outlays......................................       3       4       4       4       4           19
    Total Changes:.........................................
      Estimated Authorization Level........................      11      11      11      11      12           56
      Estimated Outlays....................................      10      11      11      11      12           55
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that H.R. 
2101 will be enacted in fiscal year 2009, and that the 
estimated authorizations will be appropriated starting in 
fiscal year 2010.

Title I--Acquisition Organization

    Title I would require the Secretary of Defense to designate 
officials to serve as the principal advisors on the acquisition 
functions of cost estimation, systems engineering, and 
performance assessment. The bill would allow such officials to 
serve other duties that they might be assigned. In addition, 
title I would encourage OSD to conduct technology readiness 
assessments and to expand the use of independent cost estimates 
early in the acquisition process. CBO estimates that 
implementing title I would cost $10 million in 2010 and $55 
million over the 2010-2014 period.
    Technology Readiness Assessments. Section 105 would require 
the Director of Defense Research and Engineering (DDR&E) to 
periodically review the technological maturity and integration 
risk of technologies critical to the success of DoD's major 
defense acquisition programs and report the findings to the 
Under Secretary of Defense, Acquisition, Technology, and 
Logistics (USD AT&L). Such reviews currently take place at 
Milestones B and C in the defense acquisition process. 
According to DoD, although the language in section 105 would 
provide latitude in deciding when to conduct such reviews, it 
might lead to increased emphasis on conducting such reviews 
earlier in the acquisition process and updating such 
assessments on a more regular basis.
    Assuming readiness assessments for all MDAPs also were done 
early in the acquisition process (Milestone A) and updates were 
done every three years, the number of assessments conducted 
annually by the DDR&E would increase from 20 to 70. The costs 
of conducting those assessments would be incurred by both the 
DDR&E and the services. According to DoD, approximately 10 
additional staff would be required to assist the DDR&E in 
conducting these assessments, which CBO estimates would cost 
approximately $2 million on an annual basis. The costs incurred 
by the services for conducting such assessments can vary from 
approximately $50,000 to $300,000 depending on the number of 
critical technologies that are under review during an 
assessment; the average cost of such assessments is 
approximately $100,000. Based on this information, CBO 
anticipates the annual cost to the services would increase by 
about $5 million. In total, CBO estimates that implementing 
section 105 would cost $7 million in 2010 and $36 million over 
the 2010-2014 period.
    Oversight of Cost Estimation. Section 101 would require the 
Secretary of Defense to designate an official within OSD to be 
the principal advisor to the Secretary on cost estimation. The 
designated official would be responsible for prescribing DoD 
policies on cost estimation and analysis, monitoring, and 
reviewing cost estimates within the department, and conducting 
independent cost estimates of programs for which the USD AT&L 
is responsible for advancing through the acquisition process.
    Section 102 would require the official designated as the 
principal advisor on cost estimation to issue independent cost 
estimates in various circumstances, including in support of 
program reviews at Milestone A. Independent cost estimates in 
support of milestone reviews--which are conducted by the Cost 
Analysis Improvement Group (CAIG)--are currently required later 
in the acquisition process (for example, at Milestones B and 
C). Section 102 also would require additional reporting on cost 
estimation. Based upon information from DoD, CBO anticipates 
that conducting additional cost estimates and preparing reports 
as required by section 102 would require 15 additional 
employees within OSD, and some additional contracting support. 
Based upon this information, CBO estimates that implementing 
section 102 would cost $3 million in 2010 and about $20 million 
over the 2010-2014 period.

Title II--Acquisition Policy

    Title II would modify a number of the procedures used by 
DoD to develop and acquire weapons systems and programs. Based 
on information from DoD, CBO estimates that implementing title 
II would not significantly increase administrative costs of the 
department beyond the amounts reflected for title I above. If, 
however, the administrative burden associated with implementing 
title II proves greater than anticipated, the resulting 
increase in costs arising from H.R. 2101 would be greater than 
amounts shown in the table.
    The modifications to the acquisition processes mandated by 
title II, combined with the organizational changes contained in 
title I, might improve the efficiency and effectiveness of 
DoD's acquisition system for MDAPs. However, CBO has no basis 
for determining whether such improvements would result in net 
savings to the government; realizing any such savings would 
require reductions in future appropriations.
    Intergovernmental and private-sector impact: H.R. 2101 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Previous CBO estimate: On May 6, 2009, CBO transmitted a 
cost estimate for S. 454, the Weapons System Reform Act of 
2009, as reported by the Senate Committee on Armed Services. 
The differences in the estimates reflect differences in the 
bills. In particular, S. 454 contains a provision not included 
in H.R. 2101 that would require DoD to reestablish the position 
of Developmental Testing and Evaluation. In addition, section 
104 of S. 454 would require the creation of a Director of 
Independent Cost Assessment, and would transfer the staff and 
resources of the CAIG from its current location within OSD's 
Program Analysis and Evaluation (PA&E). Although section 101 of 
H.R. 2101 would require the appointment of a principal advisor 
to the Secretary of Defense on cost estimation, H.R. 2101 would 
not transfer the staff and resources of the CAIG outside of 
PA&E and therefore, CBO does not anticipate PA&E would be 
required to add personnel to perform cost estimation and 
analysis as would be required under S. 454.
    Estimate prepared by: Federal Costs: Jason Wheelock and 
Kent Christensen. Impact on State, Local, and Tribal 
Governments: Burke Doherty. Impact on the Private Sector: 
Elizabeth Bass.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                        Committee Cost Estimate

    Pursuant to clause 3(d) of rule XIII of the Rules of the 
House of Representatives, the committee generally concurs with 
the estimate as contained in the report of the Congressional 
Budget Office.

                     Compliance With House Rule XXI

    Pursuant to clause 9 of rule XXI, H.R. 2101, the Weapons 
Acquisition System Reform Through Enhancing Technical Knowledge 
and Oversight Act of 2009, contains no congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI.

                           Oversight Findings

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the committee reports that the 
findings and recommendations of the committee, based on 
oversight activities pursuant to clause 2(b)(1) of rule X, are 
incorporated in the descriptive portions of this report.
    With respect to clause 3(c)(2) of rule XIII of the Rules of 
the House of Representatives, this legislation does not include 
any new spending or credit authority, nor does it provide for 
any increase or decrease in tax revenues or expenditures.
    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the bill does not authorize 
specific program funding.

                General Performance Goals and Objectives

    In compliance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the goals and objectives of 
H.R. 2101 are to improve the efficiency and quality of outcomes 
in the acquisition of major weapons systems by controlling cost 
growth and promoting independent oversight. With respect to the 
outcome related goal of controlling cost growth in major 
defense acquisition programs, the objective of this legislation 
is to: (1) require additional oversight on major defense 
acquisition programs in the early stages of development when 
most costs are determined; (2) require additional oversight of 
programs which have demonstrated poor performance; (3) promote 
the use of competitive acquisition strategies; and (4) promote 
and enable consideration of trade-offs between cost, schedule, 
and performance. With respect to the outcome related goal of 
promoting independence in the oversight of acquisition, the 
objective of this legislation is to: (1) require the Secretary 
of Defense to designate an official within the Department of 
Defense to serve as the principal advisor throughout the 
process of setting requirements, formulating and executing 
budgets, and during program execution for cost estimation, 
systems engineering, and performance assessment; (2) require 
the review of technological maturity on major defense 
acquisition programs by the Director of Defense Research and 
Engineering; (3) require input from the commanders of combatant 
commands in establishing joint military requirements; (4) 
require the Secretary of Defense to address the potential 
organizational conflicts of interest of defense contractors; 
and (5) award excellence in acquisition.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the committee finds the authority for 
this legislation in Article I, Section 8 of the United States 
Constitution.

                     Statement of Federal Mandates

    Pursuant to section 423 of Public Law 104-4, this 
legislation contains no federal mandates with respect to state, 
local, and tribal governments, nor with respect to the private 
sector. Similarly, the bill provides no unfunded federal 
intergovernmental mandates.

                              Record Vote

    In accordance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, a record vote was taken with 
respect to the committee's consideration of H.R. 2101. The 
record of this vote is included in this report.
    The committee ordered reported H.R. 2101, as amended, to 
the House with a favorable recommendation by a record vote of 
59-0, a quorum being present.


         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 10, UNITED STATES CODE

           *       *       *       *       *       *       *



Subtitle A--General Military Law

           *       *       *       *       *       *       *


PART I--ORGANIZATION AND GENERAL MILITARY POWERS

           *       *       *       *       *       *       *


             CHAPTER 4--OFFICE OF THE SECRETARY OF DEFENSE

Sec.
131. Office of the Secretary of Defense.
     * * * * * * *
145. Principal advisors for acquisition oversight functions.

           *       *       *       *       *       *       *


Sec. 139a. Director of Defense Research and Engineering

  (a) * * *

           *       *       *       *       *       *       *

  (c)(1) The Director of Defense Research and Engineering shall 
periodically review and assess the technological maturity and 
integration risk of critical technologies of the major defense 
acquisition programs of the Department of Defense and report on 
the findings of such reviews and assessments to the Under 
Secretary of Defense for Acquisition, Technology, and 
Logistics.
  (2) The Director shall submit to the Secretary of Defense and 
to the congressional defense committees by January 1 of each 
year a report on the technological maturity and integration 
risk of critical technologies of the major defense acquisition 
programs of the Department of Defense.

           *       *       *       *       *       *       *


Sec. 145. Principal advisors for acquisition oversight functions

  (a) Assignment of Acquisition Oversight Functions.--The 
Secretary of Defense shall designate an official within the 
Office of the Secretary of Defense as the principal advisor to 
the Secretary for each acquisition oversight function specified 
in subsection (c). An official may be designated to perform one 
or more of such functions. The performance of duties pursuant 
to a designation under this section shall not limit or 
otherwise affect the performance of any other duties assigned 
to such official by the Secretary or by other officers of the 
Department responsible for the management and direction of such 
official except as necessary to satisfy the requirements of 
subsection (b).
  (b) Qualifications.--In designating an official for a 
function pursuant to subsection (a), the Secretary shall ensure 
that the official reports directly to the Secretary in the 
performance of such function and is--
          (1) highly expert in matters relating to the 
        function;
          (2) assigned the appropriate staff and resources 
        necessary to carry out the function;
          (3) independent from those engaged in the execution 
        of acquisition programs;
          (4) free of any undue political influence; and
          (5) free of any personal conflict of interest.
  (c) Acquisition Oversight Functions.--(1) The acquisition 
oversight functions to be performed by officials designated 
pursuant to subsection (a) are as follows:
          (A) Cost estimation.
          (B) Systems engineering.
          (C) Performance assessment.
          (D) Such other acquisition functions as the Secretary 
        considers appropriate.
  (2) Each acquisition oversight function specified in 
paragraph (1) shall cover all phases of an acquisition program, 
including setting of requirements, formulation and execution of 
budgets, and program execution.

           *       *       *       *       *       *       *


CHAPTER 7--BOARDS, COUNCILS, AND COMMITTEES

           *       *       *       *       *       *       *


Sec. 181. Joint Requirements Oversight Council

  (a) * * *

           *       *       *       *       *       *       *

  (d) Advisors.--(1) The Under Secretary of Defense for 
Acquisition, Technology, and Logistics, the Under Secretary of 
Defense (Comptroller), and the Director of the Office of 
Program Analysis and Evaluation shall serve as advisors to the 
Council on matters within their authority and expertise.
  (2) The Council shall seek and consider input from the 
commanders of the combatant commands in carrying out its 
mission under paragraphs (1) and (2) of subsection (b) and in 
conducting periodic reviews in accordance with the requirements 
of subsection (e). Such input may include, but is not limited 
to, an assessment of the following:
          (A) Any current or projected missions or threats in 
        the theater of operations of the commander of a 
        combatant command that would inform the assessment of a 
        new joint military requirement.
          (B) The necessity and sufficiency of a proposed joint 
        military requirement in terms of current and projected 
        missions or threats.
          (C) The relative priority of a proposed joint 
        military requirement in comparison with other joint 
        military requirements within the theater of operations 
        of a commander of a combatant command.
          (D) The ability of partner nations in the theater of 
        operations of the commander of a combatant command to 
        assist in meeting the joint military requirement or the 
        benefit, if any, of a partner nation assisting in 
        development or use of technologies developed to meet 
        the joint military requirement.

           *       *       *       *       *       *       *


PART IV--SERVICE, SUPPLY, AND PROCUREMENT

           *       *       *       *       *       *       *


                   CHAPTER 137--PROCUREMENT GENERALLY

Sec.
2302. Definitions.
     * * * * * * *
2334. Acquisition oversight: oversight of cost estimation.
2334a. Acquisition oversight: oversight of systems engineering.
2334b. Acquisition oversight: oversight of performance assessment.

           *       *       *       *       *       *       *


Sec. 2334. Acquisition oversight: oversight of cost estimation

  (a) Issuance of Policies, Procedures, Guidance, and Cost 
Estimates.--The official assigned oversight of cost estimation 
pursuant to section 145 of this title shall issue the 
following:
          (1) Policies and procedures governing the conduct of 
        cost estimation and cost analysis generally for the 
        acquisition programs of the Department of Defense.
          (2) Guidance relating to cost estimates and cost 
        analyses conducted in connection with major defense 
        acquisition programs under chapter 144 of this title or 
        major automated information system programs under 
        chapter 144A of this title.
          (3) Guidance relating to the proper selection of 
        confidence levels for cost estimates generally, and 
        specifically, for the proper selection of confidence 
        levels for cost estimates for major defense acquisition 
        programs under chapter 144 of this title or major 
        automated information system program under chapter 144A 
        of this title.
          (4) Guidance relating to full consideration of life-
        cycle management and sustainability costs of major 
        defense acquisition programs under chapter 144 of this 
        title or major automated information system programs 
        under chapter 144A of this title.
          (5) 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 title 10, United 
                        States Code;
                          (ii) any decision to enter into low-
                        rate initial production or full-rate 
                        production;
                          (iii) any certification under section 
                        2433(e)(2) of this title; and
                          (iv) any report under section 
                        2445c(f) of this title; and
                  (B) at any other time considered necessary by 
                such official or upon the request of the Under 
                Secretary of Defense for Acquisition, 
                Technology, and Logistics.
  (b) Review of Cost Estimates, Cost Analyses, Cost Indexes, 
and Records of the Military Departments.--The Secretary of 
Defense shall ensure that the official designated for oversight 
of cost estimation pursuant to section 145 of this title--
          (1) promptly receives the results of all cost 
        estimates and cost analyses conducted by the military 
        departments, and all studies conducted by the military 
        departments in connection with such cost estimates and 
        cost analyses, for major defense acquisition programs 
        and major automated information systems of the military 
        departments, and is authorized to comment on such 
        estimates, analyses, and studies; and
          (2) has timely access to any records and data in the 
        Department of Defense (including the records and data 
        of each military department and including classified 
        and proprietary information as appropriate) that the 
        official considers necessary to review in order to 
        carry out any duties under this section.
  (c) Participation, Concurrence, and Approval in Cost 
Estimation.--The Secretary of Defense shall ensure that the 
official designated for oversight of cost estimation pursuant 
to section 145 of this title is involved in all discussions 
relating to cost estimation and the estimation of resource 
levels required for major defense acquisition programs and 
major automated information systems of the Department of 
Defense generally at all stages of such programs and may--
          (1) participate in the formulation of study guidance 
        for analyses of alternatives for major defense 
        acquisition programs;
          (2) participate in discussion of resources associated 
        with requirements;
          (3) participate in the discussion of any 
        discrepancies between an independent cost estimate and 
        the cost estimate of a military department for a major 
        defense acquisition program or major automated 
        information system of the Department of Defense;
          (4) approve or disapprove, at such official's sole 
        discretion, the confidence level used in establishing a 
        baseline description or budget estimate for a major 
        defense acquisition program or major automated 
        information system of the Department of Defense at any 
        of the events specified in paragraph (5) of subsection 
        (a) of this section;
          (5) concur in the choice of a baseline description or 
        budget estimate for use at any of the events specified 
        in paragraph (5) of subsection (a) of this section; and
          (6) participate in any decision to request 
        authorization of a multiyear procurement contract for a 
        major defense acquisition program.
  (d) Disclosure of Confidence Levels for Baseline Estimates of 
Major Defense Acquisition Programs.--The official designated to 
perform oversight of cost estimation pursuant to section 145 of 
this title, in approving a confidence level for use in a major 
defense acquisition program pursuant to subsection (c)(4), 
shall--
          (1) disclose the confidence level used in 
        establishing a baseline estimate for the major defense 
        acquisition program, the rationale for selecting such 
        confidence level, and, if such confidence level is less 
        than 80 percent, the justification for selecting a 
        confidence level of less than 80 percent; and
          (2) include the disclosure required by paragraph (1) 
        in any decision documentation approving a baseline 
        estimate for the major defense acquisition program, in 
        the next Selected Acquisition Report pursuant to 
        section 2432 of this title for the major defense 
        acquisition program, and in the next annual report 
        submitted under subsection (f).
  (e) Relationship to Cost Analysis Improvement Group.--The 
official designated to perform oversight of cost estimation 
pursuant to section 145 of this title shall be assigned 
responsibility for the management and oversight of the Cost 
Analysis Improvement Group of the Department of Defense.
  (f) Annual Report.--Not later than March 1 of each year, 
beginning on March 1, 2010, the official designated to perform 
oversight of cost estimation pursuant to section 145 of this 
title shall submit to the congressional defense committees a 
report on the activities undertaken pursuant to this section 
during the preceding year. The report shall be in an 
unclassified form but may include a classified annex.

Sec. 2334a. Acquisition oversight: oversight of systems engineering

  (a) Issuance of Policies, Procedures, and Guidance.--The 
official designated to perform oversight of systems engineering 
pursuant to section 145 of this title shall--
          (1) issue policies, procedures, and guidance for all 
        elements of the Department of Defense concerning--
                  (A) the use of systems engineering principles 
                and best practices, generally;
                  (B) the use of systems engineering approaches 
                to enhance reliability, availability, and 
                maintainability on major defense acquisition 
                programs;
                  (C) the development of systems engineering 
                master plans for major defense acquisition 
                programs, including systems engineering 
                considerations in support of life-cycle 
                management and sustainability;
                  (D) the inclusion of provisions relating to 
                systems engineering and reliability growth in 
                requests for proposals;
                  (E) the appropriate use of development 
                planning to reduce the time from system 
                development to deployment, to reduce 
                development risk and cost growth, and to 
                provide future benchmarks against which to 
                trade requirements, cost, and schedule;
                  (F) developmental test and evaluation 
                generally;
                  (G) in coordination with the Director of 
                Operational Test and Evaluation, the 
                integration of developmental test and 
                evaluation with operational test and 
                evaluation;
                  (H) in coordination with the Director of 
                Operational Test and Evaluation, the 
                development of test and evaluation master plans 
                for major defense acquisition programs; and
                  (I) the use of developmental test and 
                evaluation as part of a coordinated systems 
                engineering approach to system development; and
          (2) provide advocacy, oversight, and direction to 
        elements of the acquisition workforce responsible for 
        functions relating to systems engineering, 
        developmental test and evaluation, and life-cycle 
        management and sustainability.
  (b) Participation in Requirements Discussions.--The official 
designated to perform oversight of systems engineering pursuant 
to section 145 of this title shall provide input on the 
inclusion of systems engineering requirements in the process 
for consideration of joint military requirements by the Joint 
Requirements Oversight Council pursuant to section 181 of title 
10, United States Code, including specific input relating to 
each capabilities development document.
  (c) Access to Records of the Military Departments.--The 
official designated to perform oversight of systems engineering 
pursuant to section 145 of this title shall have access to any 
records or data of the Department of Defense (including the 
records and data of each military department and including 
classified and proprietary information as appropriate) that the 
official considers necessary to review in order to carry out 
any duties under this section.
  (d) Assessment of Military Department Capabilities for 
Systems Engineering and Developmental Test and Evaluation.--The 
official designated to perform oversight of systems engineering 
pursuant to section 145 of this title shall--
          (1) periodically assess the capabilities of the 
        military departments for systems engineering (including 
        development planning) and developmental test and 
        evaluation;
          (2) provide such assessment, along with such 
        recommendations for improvement as the official 
        considers necessary, to the Secretary of Defense and 
        the Under Secretary of Defense for Acquisition, 
        Technology, and Logistics; and
          (3) include such assessment and recommendations in 
        the annual report required by subsection (g).
  (e) Review and Approval of Plans for Major Defense 
Acquisition Programs.--The official designated to perform 
oversight of systems engineering pursuant to section 145 of 
this title shall review and approve the following plans with 
respect to any major defense acquisition program:
          (1) The systems engineering master plan.
          (2) The developmental test and evaluation plan within 
        the test and evaluation master plan.
  (f) Reporting Through Under Secretary.--The official 
designated to perform oversight of systems engineering pursuant 
to section 145 of this title shall report to the Secretary of 
Defense through the Under Secretary of Defense for Acquisition, 
Technology, and Logistics.
  (g) Annual Report.--Not later than March 1 of each year, 
beginning on March 1, 2010, the official designated to perform 
oversight of systems engineering pursuant to section 145 of 
this title shall submit to the congressional defense committees 
a report on the activities undertaken pursuant to this section 
during the preceding year. The report shall be in unclassified 
form but may include a classified annex.

Sec. 2334b. Acquisition oversight: oversight of performance assessment

  (a) Issuance of Policies, Procedures, and Guidance for 
Performance Assessments.--The official designated to perform 
oversight of performance assessment pursuant to section 145 of 
this title shall be responsible for the issuance of policies, 
procedures, and guidance governing the conduct of performance 
assessments for the acquisition programs of the Department of 
Defense, including assessment of the extent to which 
acquisition programs--
          (1) deliver sufficient capability to the warfighter;
          (2) achieve timely delivery of such capability; and
          (3) deliver a level of value consistent with 
        resources expended.
  (b) Assessment of Baseline Quality.--The official designated 
to perform oversight of performance assessment pursuant to 
section 145 of this title shall periodically assess the 
suitability of the baseline descriptions required by section 
2435 of title 10, United States Code, of major defense 
acquisition programs for providing a basis for performance 
assessment and make such recommendations to the Secretary of 
Defense and the Under Secretary of Defense for Acquisition, 
Technology, and Logistics as the official considers necessary 
to improve the suitability of baseline descriptions for such 
purpose.
  (c) Earned Value Management System.--The official designated 
to perform oversight of performance assessment pursuant to 
section 145 of this title shall be responsible for the 
management and oversight of the records of the earned value 
management system of the Department of Defense.
  (d) Participation in Certain Program Reviews.--The official 
designated to perform oversight of performance assessment 
pursuant to section 145 of this title is authorized to present 
an assessment of the performance of a major defense acquisition 
program during--
          (1) any discussions prior to certification under 
        section 2433(e)(2) of this title;
          (2) any discussions prior to entry into full-rate 
        production; and
          (3) consideration of any decision to request 
        authorization of a multiyear procurement contract for a 
        major defense acquisition program.
  (e) Annual Report.--Not later than March 1 of each year, 
beginning on March 1, 2010, the official designated to perform 
oversight of performance assessment pursuant to section 145 of 
this title shall submit to the congressional defense committees 
a report on the activities undertaken pursuant to this section 
during the preceding year. The report shall be in unclassified 
form but may include a classified annex.

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CHAPTER 139--RESEARCH AND DEVELOPMENT

           *       *       *       *       *       *       *


Sec. 2366b. Major defense acquisition programs: certification required 
                    before Milestone B or Key Decision Point B approval

  (a) Certification.--A major defense acquisition program may 
not receive Milestone B approval, or Key Decision Point B 
approval in the case of a space program, until the milestone 
decision authority--
          (1) has received a business case analysis and 
        certifies on the basis of the analysis that--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) funding is available to execute the 
                product development and production plan under 
                the program, through the period covered by the 
                future-years defense program submitted during 
                the fiscal year in which the certification is 
                made, consistent with the estimates described 
                in subparagraph (C) for the program; [and]
          (2) has received a preliminary design review and 
        conducted a formal post-preliminary design review 
        assessment, and certifies on the basis of such 
        assessment that the program demonstrates a high 
        likelihood of accomplishing its intended mission or 
        that no preliminary design review is necessary for such 
        program to demonstrate a high likelihood of 
        accomplishing its intended mission; and
          [(2)] (3) further certifies that--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) the technology in the program has been 
                demonstrated in a relevant environment[;], 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
                  [(E) the program demonstrates a high 
                likelihood of accomplishing its intended 
                mission; and]
                  [(F)] (E) the program complies with all 
                relevant policies, regulations, and directives 
                of the Department of Defense.

           *       *       *       *       *       *       *

  (d) Waiver for National Security.--(1) The milestone decision 
authority may, at the time of Milestone B approval (or Key 
Decision Point B approval in the case of a space program) or at 
the time that such milestone decision authority withdraws a 
certification or rescinds Milestone B approval (or Key Decision 
Point B approval in the case of a space program) pursuant to 
subsection (b)(2), waive the applicability to a major defense 
acquisition program of one or more components (as specified in 
paragraph (1) or (2) of subsection (a)) of the certification 
requirement if the milestone decision authority determines 
that, but for such a waiver, the Department would be unable to 
meet critical national security objectives. [Whenever the 
milestone decision authority makes such a determination and 
authorizes such a waiver, the waiver, the determination, and 
the reasons for the determination shall be submitted in writing 
to the congressional defense committees within 30 days after 
the waiver is authorized.]
  (2) Whenever the milestone decision authority makes such a 
determination and authorizes such a waiver--
          (A) the waiver, the determination, and the reasons 
        for the determination shall be submitted in writing to 
        the congressional defense committees within 30 days 
        after the waiver is authorized; and
          (B) the milestone decision authority shall review the 
        program not less often than annually to determine the 
        extent to which such program currently satisfies the 
        certification components specified in paragraphs (1) 
        and (2) of subsection (a) until such time as the 
        milestone decision authority determines that the 
        program satisfies all such certification components.
  (e) Designation of Certification Status in Budget 
Documentation.--Any budget request, budget justification 
material, budget display, reprogramming request, Selected 
Acquisition Report, or other budget documentation or 
performance report submitted by the Secretary of Defense to the 
President regarding a major defense acquisition program 
receiving a waiver pursuant to subsection (d) shall prominently 
and clearly indicate that such program has not fully satisfied 
the certification requirements of this section until such time 
as the milestone decision authority makes the determination 
that such program has satisfied all certification components 
pursuant to subsection (d)(2)(B).
  [(e)] (f) Nondelegation.--The milestone decision authority 
may not delegate the certification requirement under subsection 
(a) or the authority to waive any component of such requirement 
under subsection (d).
  [(f)] (g) Definitions.--In this section:
          (1) * * *

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CHAPTER 144--MAJOR DEFENSE ACQUISITION PROGRAMS

           *       *       *       *       *       *       *


Sec. 2430. Major defense acquisition program defined

  (a) In this chapter, the term ``major defense acquisition 
program'' means a Department of Defense acquisition program 
that is not a highly sensitive classified program (as 
determined by the Secretary of Defense) and--
          (1) * * *
          (2) that is estimated by the Secretary of Defense to 
        require an eventual total expenditure for research, 
        development, test, and evaluation of more than 
        $300,000,000 (based on fiscal year 1990 constant 
        dollars) or an eventual total expenditure for 
        procurement, including all planned increments or 
        spirals, of more than $1,800,000,000 (based on fiscal 
        year 1990 constant dollars).

           *       *       *       *       *       *       *


Sec. 2433. Unit cost reports

  (a) * * *

           *       *       *       *       *       *       *

  (e)(1) * * *
  [(2) If program acquisition unit cost or procurement unit 
cost of a major defense acquisition program or designated major 
subprogram (as determined by the Secretary under subsection 
(d)) increases by a percentage equal to or greater than the 
critical cost growth threshold for the program or subprogram, 
the Secretary of Defense, after consultation with the Joint 
Requirements Oversight Council regarding program requirements, 
shall--
  [(A) carry out an assessment of--
          [(i) any design, engineering, manufacturing, or 
        technology integration issues that contributed 
        significantly to the cost growth of the program;
          [(ii) the projected cost of completing the program if 
        current requirements are not modified;
          [(iii) the projected cost of completing the program 
        based on reasonable modification of such requirements; 
        and
          [(iv) the rough order of magnitude of the costs of 
        any reasonable alternative system or capability;
  [(B) 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 (with a supporting explanation) stating that--
          [(i) such acquisition program is essential to the 
        national security;
          [(ii) there are no alternatives to such acquisition 
        program which will provide equal or greater military 
        capability at less cost;
          [(iii) the new estimates of the program acquisition 
        unit cost or procurement unit cost 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; and
  [(C) if a report under paragraph (1) has been previously 
submitted to Congress with respect to such program for the 
current fiscal year but was based upon a different unit cost 
report from the program manager to the service acquisition 
executive designated by the Secretary concerned, a further 
report containing the information described in subsection (g), 
determined from the time of the previous report to the time of 
the current report.]
  (2)(A) If the program acquisition unit cost or procurement 
unit cost of a major defense acquisition program or designated 
major subprogram (as determined by the Secretary under 
subsection (d)) increases by a percentage equal to or greater 
than the critical cost growth threshold for the program or 
subprogram, the Secretary of Defense, after consultation with 
the Joint Requirements Oversight Council regarding program 
requirements, shall--
          (i) determine the root cause or causes of the 
        critical cost growth including the role, if any, of--
                  (I) changes or growth in requirements;
                  (II) unrealistic baseline estimates;
                  (III) any design, engineering, manufacturing, 
                or technology integration issues;
                  (IV) changes in procurement quantities;
                  (V) inadequate program funding or funding 
                instability;
                  (VI) poor performance by government or 
                contractor personnel responsible for program 
                management; or
                  (VII) other causes as identified by the 
                Secretary;
          (ii) subject to subparagraph (B), determine whether 
        to terminate such program or to restructure such 
        program after assessing--
                  (I) the root causes of cost growth identified 
                pursuant to subparagraph (A);
                  (II) the validity and urgency of the joint 
                military requirement;
                  (III) the viability of the acquisition 
                strategy;
                  (IV) the quality of program management;
                  (V) a broad range of potential material and 
                non-material alternatives to such program; and
                  (VI) the need to reduce funding for other 
                programs due to the cost growth on such 
                program;
          (iii) submit the determination made under clause (ii) 
        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; and
          (iv) if a report under paragraph (1) has been 
        previously submitted to Congress with respect to such 
        program or subprogram for the current fiscal year but 
        was based upon a different unit cost report from the 
        program manager to the service acquisition executive 
        designated by the Secretary concerned, submit a further 
        report containing the information described in 
        subsection (g), determined from the time of the 
        previous report to the time of the current report.
  (B) A program may be restructured pursuant to a determination 
under subparagraph (A)(ii) only if--
          (i) a written certification (with a supporting 
        explanation) is submitted along with the determination 
        stating that--
                  (I) such program is essential to national 
                security;
                  (II) there are no alternatives to such 
                program which will provide acceptable military 
                capability at less cost;
                  (III) new estimates of the program 
                acquisition unit cost or procurement unit cost 
                are reasonable;
                  (IV) the program is a higher priority than 
                programs whose funding must be reduced to 
                accommodate cost growth on such program; and
                  (V) the management structure for the program 
                is adequate to manage and control program 
                acquisition unit cost or procurement unit cost; 
                and
          (ii) the most recent milestone decision is revisited 
        and results in the approval of such restructured 
        program.
  (3) If a determination of an increase by a percentage equal 
to or greater than the significant cost growth threshold is 
made by the Secretary under subsection (d) and a Selected 
Acquisition Report containing the information described in 
subsection (g) is not submitted to Congress under paragraph 
(1), or if a determination of an increase by a percentage equal 
to or greater than the critical cost growth threshold is made 
by the Secretary under subsection (d) and the certification of 
the Secretary of Defense is not submitted to Congress under 
paragraph (2), funds appropriated for military construction, 
for research, development, test, and evaluation, and for 
procurement may not be obligated for a major contract under the 
program. The prohibition on the obligation of funds for a major 
defense acquisition program shall cease to apply at the end of 
a period of 30 days of continuous session of Congress (as 
determined under section 7307(b)(2) of this title) beginning on 
the date--
          (A) on which Congress receives the Selected 
        Acquisition Report under paragraph (1) [or (2)(B)] or 
        (2)(A)(iii) with respect to that program, in the case 
        of a determination of an increase by a percentage equal 
        to or greater than the significant cost growth 
        threshold (as determined in subsection (d)); or
          (B) on which Congress has received both the Selected 
        Acquisition Report under paragraph (1) [or (2)(B)] or 
        (2)(A)(iii) and the certification of the Secretary of 
        Defense under [paragraph (2)(A)] paragraph (2)(B) with 
        respect to that program, in the case of an increase by 
        a percentage equal to or greater than the critical cost 
        growth threshold (as determined under subsection (d)).

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                              ----------                              


 SECTION 813 OF THE JOHN WARNER NATIONAL DEFENSE AUTHORIZATION ACT FOR 
                            FISCAL YEAR 2007

SEC. 813. ESTABLISHMENT OF PANEL ON CONTRACTING INTEGRITY.

  (a) * * *

           *       *       *       *       *       *       *

  [(e) Termination..--The panel shall terminate on December 31, 
2009.]
  (e) Termination.--(1) Subject to the restriction in paragraph 
(2), the panel shall continue to serve until the date that is 
18 months after the date on which the Secretary of Defense 
notifies the congressional defense committees of an intention 
to terminate the panel based on a determination that the 
activities of the panel no longer justify its continuation and 
that concerns about contracting integrity have been fully 
mitigated.
  (2) The panel shall continue to serve at least until December 
31, 2011.

                    Additional and Dissenting Views

    Clause 3(a) of rule XIII requires that the report include 
all supplemental, minority, or additional views that have been 
submitted. None have been submitted by the time of the filing 
of the report.

                                  
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