[United States Statutes at Large, Volume 123, 111th Congress, 1st Session]
[From the U.S. Government Publishing Office, www.gpo.gov]

123 STAT. 1704

Public Law 111-23
111th Congress

An Act


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

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <>
SECTION 1. <> SHORT TITLE; TABLE OF
CONTENTS.

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

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

TITLE I--ACQUISITION ORGANIZATION

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

TITLE II--ACQUISITION POLICY

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

TITLE III--ADDITIONAL ACQUISITION PROVISIONS

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

SEC. 2. <> DEFINITIONS.

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


[[Page 1705]]
123 STAT. 1705

(2) The term ``major defense acquisition program'' has the
meaning given that term in section 2430 of title 10, United
States Code.
(3) The term ``major weapon system'' has the meaning given
that term in section 2379(d) of title 10, United States Code.

TITLE I--ACQUISITION ORGANIZATION

SEC. 101. COST ASSESSMENT AND PROGRAM EVALUATION.

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

``(a) Appointment.--There <> is a Director of Cost
Assessment and Program Evaluation in the Department of Defense,
appointed by the President, by and with the advice and consent of the
Senate.

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

``(2) The Director may communicate views on matters within the
responsibility of the Director directly to the Secretary of Defense and
the Deputy Secretary of Defense without obtaining the approval or
concurrence of any other official within the Department of Defense.
``(c) Deputy Directors.--There are two Deputy Directors within the
Office of the Director of Cost Assessment and Program Evaluation, as
follows:
``(1) The Deputy Director for Cost Assessment.
``(2) The Deputy Director for Program Evaluation.

``(d) Responsibilities.--The Director of Cost Assessment and Program
Evaluation shall serve as the principal official within the senior
management of the Department of Defense for the following:
``(1) Cost estimation and cost analysis for acquisition
programs of the Department of Defense, and carrying out the
duties assigned pursuant to section 2334 of this title.
``(2) Analysis and advice on matters relating to the
planning and programming phases of the Planning, Programming,
Budgeting and Execution system, and the preparation of materials
and guidance for such system, as directed by the Secretary of
Defense, working in coordination with the Under Secretary of
Defense (Comptroller).
``(3) Analysis and advice for resource discussions relating
to requirements under consideration in the Joint Requirements
Oversight Council pursuant to section 181 of this title.


[[Page 1706]]
123 STAT. 1706

``(4) Formulation of study guidance for analyses of
alternatives for major defense acquisition programs and
performance of such analyses, as directed by the Secretary of
Defense
``(5) Review, analysis, and evaluation of programs for
executing approved strategies and policies, ensuring that
information on programs is presented accurately and completely,
and assessing the effect of spending by the Department of
Defense on the United States economy.
``(6) Assessments of special access and compartmented
intelligence programs, in coordination with the Under Secretary
of Defense for Acquisition, Technology, and Logistics and the
Under Secretary of Defense for Intelligence and in accordance
with applicable policies.
``(7) Assessments of alternative plans, programs, and
policies with respect to the acquisition programs of the
Department of Defense.
``(8) Leading the development of improved analytical skills
and competencies within the cost assessment and program
evaluation workforce of the Department of Defense and improved
tools, data, and methods to promote performance, economy, and
efficiency in analyzing national security planning and the
allocation of defense resources.''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 4 of such title is amended by inserting
after the item relating to section 139b the following new item:

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

(3) Executive schedule level iv.--Section 5315 of title 5,
United States Code, is amended by inserting after the item
relating to the Director of Operational Test and Evaluation,
Department of Defense the following new item:
``Director of Cost Assessment and Program Evaluation,
Department of Defense.''.

(b) Independent Cost Estimation and Cost Analysis.--
(1) In general.--Chapter 137 of title 10, United States
Code, is amended by adding at the end the following new section:
``Sec. 2334. Independent cost estimation and cost analysis

``(a) In General.--The Director of Cost Assessment and Program
Evaluation shall ensure that the cost estimation and cost analysis
processes of the Department of Defense provide accurate information and
realistic estimates of cost for the acquisition programs of the
Department of Defense. In carrying out that responsibility, the Director
shall--
``(1) <> prescribe, by authority of the
Secretary of Defense, policies and procedures for the conduct of
cost estimation and cost analysis for the acquisition programs
of the Department of Defense;
``(2) <> provide guidance to and
consult with the Secretary of Defense, the Under Secretary of
Defense for Acquisition, Technology, and Logistics, the Under
Secretary of Defense (Comptroller), the Secretaries of the
military departments, and the heads of the Defense Agencies with
respect to cost estimation in the Department of Defense in
general and with respect to specific cost estimates and cost
analyses to be conducted in connection with a major defense
acquisition program


[[Page 1707]]
123 STAT. 1707

under chapter 144 of this title or a major automated information
system program under chapter 144A of this title;
``(3) issue guidance relating to the proper selection of
confidence levels in cost estimates generally, and specifically,
for the proper selection of confidence levels in cost estimates
for major defense acquisition programs and major automated
information system programs;
``(4) issue guidance relating to full consideration of life-
cycle management and sustainability costs in major defense
acquisition programs and major automated information system
programs;
``(5) review all cost estimates and cost analyses conducted
in connection with major defense acquisition programs and major
automated information system programs;
``(6) conduct independent cost estimates and cost analyses
for major defense acquisition programs and major automated
information system programs for which the Under Secretary of
Defense for Acquisition, Technology, and Logistics is the
Milestone Decision Authority--
``(A) in advance of--
``(i) any certification under section 2366a or
2366b of this title;
``(ii) any decision to enter into low-rate
initial production or full-rate production;
``(iii) any certification under section 2433a
of this title; and
``(iv) any report under section 2445c(f) of
this title; and
``(B) at any other time considered appropriate by
the Director or upon the request of the Under Secretary
of Defense for Acquisition, Technology, and Logistics;
and
``(7) <> periodically assess and update
the cost indexes used by the Department to ensure that such
indexes have a sound basis and meet the Department's needs for
realistic cost estimation.

``(b) Review of Cost Estimates, Cost Analyses, and Records of the
Military Departments and Defense Agencies.--The Secretary of Defense
shall ensure that the Director of Cost Assessment and Program
Evaluation--
``(1) promptly receives the results of all cost estimates
and cost analyses conducted by the military departments and
Defense Agencies, and all studies conducted by the military
departments and Defense Agencies in connection with such cost
estimates and cost analyses, for major defense acquisition
programs and major automated information system programs of the
military departments and Defense Agencies; and
``(2) has timely access to any records and data in the
Department of Defense (including the records and data of each
military department and Defense Agency and including classified
and proprietary information) that the Director considers
necessary to review in order to carry out any duties under this
section.

``(c) Participation, Concurrence, and Approval in Cost Estimation.--
The Director of Cost Assessment and Program Evaluation may--
``(1) participate in the discussion of any discrepancies
between an independent cost estimate and the cost estimate


[[Page 1708]]
123 STAT. 1708

of a military department or Defense Agency for a major defense
acquisition program or major automated information system
program of the Department of Defense;
``(2) comment on deficiencies in the methodology or
execution of any cost estimate or cost analysis developed by a
military department or Defense Agency for a major defense
acquisition program or major automated information system
program;
``(3) concur in the choice of a cost estimate within the
baseline description or any other cost estimate (including the
confidence level for any such cost estimate) for use at any
event specified in subsection (a)(6); and
``(4) participate in the consideration of any decision to
request authorization of a multiyear procurement contract for a
major defense acquisition program.

``(d) Disclosure of Confidence Levels for Baseline Estimates of
Major Defense Acquisition Programs.--The Director of Cost Assessment and
Program Evaluation, and the Secretary of the military department
concerned or the head of the Defense Agency concerned (as applicable),
shall each--
``(1) disclose in accordance with paragraph (2) the
confidence level used in establishing a cost estimate for a
major defense acquisition program or major automated information
system program, the rationale for selecting such confidence
level, and, if such confidence level is less than 80 percent,
the justification for selecting a confidence level of less than
80 percent; and
``(2) include the disclosure required by paragraph (1)--
``(A) in any decision documentation approving a cost
estimate within the baseline description or any other
cost estimate for use at any event specified in
subsection (a)(6); and
``(B) in the next Selected Acquisition Report
pursuant to section 2432 of this title in the case of a
major defense acquisition program, or the next quarterly
report pursuant to section 2445c of this title in the
case of a major automated information system program.

``(e) Annual Report on Cost Assessment Activities.--(1) The Director
of Cost Assessment and Program Evaluation shall prepare an annual report
summarizing the cost estimation and cost analysis activities of the
Department of Defense during the previous year and assessing the
progress of the Department in improving the accuracy of its cost
estimates and analyses. Each report shall include, for the year covered
by such report, an assessment of--
``(A) the extent to which each of the military departments
and Defense Agencies have complied with policies, procedures,
and guidance issued by the Director with regard to the
preparation of cost estimates for major defense acquisition
programs and major automated information systems;
``(B) the overall quality of cost estimates prepared by each
of the military departments and Defense Agencies for major
defense acquisition programs and major automated information
system programs; and
``(C) any consistent differences in methodology or approach
among the cost estimates prepared by the military departments,
the Defense Agencies, and the Director.


[[Page 1709]]
123 STAT. 1709

``(2) Each report under this subsection shall be submitted
concurrently to the Secretary of Defense, the Under Secretary of Defense
for Acquisition, Technology, and Logistics, the Under Secretary of
Defense (Comptroller), and the congressional defense committees not
later than 10 days after the transmittal to Congress of the budget of
the President for the next fiscal year (as submitted pursuant to section
1105 of title 31).
``(3)(A) Each report submitted to the congressional defense
committees under this subsection shall be submitted in unclassified
form, but may include a classified annex.
``(B) The Director shall ensure that a report submitted under this
subsection does not include any information, such as proprietary or
source selection sensitive information, that could undermine the
integrity of the acquisition process.
``(C) <> The unclassified
version of each report submitted to the congressional defense committees
under this subsection shall be posted on an Internet website of the
Department of Defense that is available to the public.

``(4) The Secretary of Defense may comment on any report of the
Director to the congressional defense committees under this subsection.
``(f) Staff.--The Secretary of Defense shall ensure that the
Director of Cost Assessment and Program Evaluation has sufficient
professional staff of military and civilian personnel to enable the
Director to carry out the duties and responsibilities of the Director
under this section.''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 137 of such title is amended by adding at
the end the following new item:

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

(c) Transfer <> of Personnel and
Functions.--
(1) Transfer of functions.--The functions of the Office of
Program Analysis and Evaluation of the Department of Defense,
including the functions of the Cost Analysis Improvement Group,
are hereby transferred to the Office of the Director of Cost
Assessment and Program Evaluation.
(2) Transfer of personnel to deputy director for independent
cost assessment.--The personnel of the Cost Analysis Improvement
Group are hereby transferred to the Deputy Director for Cost
Assessment in the Office of the Director of Cost Assessment and
Program Evaluation.
(3) Transfer of personnel to deputy director for program
analysis and evaluation.--The personnel (other than the
personnel transferred under paragraph (2)) of the Office of
Program Analysis and Evaluation are hereby transferred to the
Deputy Director for Program Evaluation in the Office of the
Director of Cost Assessment and Program Evaluation.

(d) Conforming Amendments.--
(1) Section 181(d) of title 10, United States Code, is
amended by striking ``Director of the Office of Program Analysis
and Evaluation'' and inserting ``Director of Cost Assessment and
Program Evaluation''.
(2) Section 2306b(i)(1)(B) of such title is amended by
striking ``Cost Analysis Improvement Group of the Department of
Defense'' and inserting ``Director of Cost Assessment and
Program Analysis''.


[[Page 1710]]
123 STAT. 1710

(3) Section 2366a(a)(4) of such title is amended by
inserting ``, with the concurrence of the Director of Cost
Assessment and Program Evaluation,'' after ``has been
submitted''.
(4) Section 2366b(a)(1)(C) of such title is amended by
inserting ``, with the concurrence of the Director of Cost
Assessment and Program Evaluation,'' after ``have been developed
to execute''.
(5) Subparagraph (A) of section 2434(b)(1) of such title is
amended to read as follows:

``(A) be prepared or approved by the Director of Cost Assessment and
Program Evaluation; and''.
(6) Section 2445c(f)(3) of such title is amended by striking
``are reasonable'' and inserting ``have been determined, with
the concurrence of the Director of Cost Assessment and Program
Evaluation, to be reasonable''.

(e) Report on Monitoring of Operating and Support Costs for Major
Defense Acquisition Programs.--
(1) Report <> to secretary of defense.--Not
later than one year after the date of the enactment of this Act,
the Director of Cost Assessment and Program Evaluation under
section 139c of title 10 United States Code (as added by
subsection (a)), shall review existing systems and methods of
the Department of Defense for tracking and assessing operating
and support costs on major defense acquisition programs and
submit to the Secretary of Defense a report on the finding and
recommendations of the Director as a result of the review,
including an assessment by the Director of the feasibility and
advisability of establishing baselines for operating and support
costs under section 2435 of title 10, United States Code.
(2) Transmittal to congress.--Not later than 30 days after
receiving the report required by paragraph (1), the Secretary
shall transmit the report to the congressional defense
committees, together with any comments on the report the
Secretary considers appropriate.
SEC. 102. DIRECTORS OF DEVELOPMENTAL TEST AND EVALUATION AND
SYSTEMS ENGINEERING.

(a) In General.--
(1) Establishment of positions.--Chapter 4 of title 10,
United States Code, as amended by section 101(a) of this Act, is
further amended by inserting after section 139c the following
new section:
``Sec. 139d. Director of Developmental Test and Evaluation;
Director of Systems Engineering: joint guidance

``(a) Director of Developmental Test and Evaluation.--
``(1) Appointment.--There is a Director of Developmental
Test and Evaluation, who shall be appointed by the Secretary of
Defense from among individuals with an expertise in test and
evaluation.
``(2) Principal advisor for developmental test and
evaluation.--The Director shall be the principal advisor to the
Secretary of Defense and the Under Secretary of Defense for
Acquisition, Technology, and Logistics on developmental test and
evaluation in the Department of Defense.
``(3) Supervision.--The Director shall be subject to the
supervision of the Under Secretary of Defense for Acquisition,


[[Page 1711]]
123 STAT. 1711

Technology, and Logistics and shall report to the Under
Secretary.
``(4) Coordination with director of systems engineering.--
The Director of Developmental Test and Evaluation shall closely
coordinate with the Director of Systems Engineering to ensure
that the developmental test and evaluation activities of the
Department of Defense are fully integrated into and consistent
with the systems engineering and development planning processes
of the Department.
``(5) Duties.--The Director shall--
``(A) <> develop policies and
guidance for--
``(i) the conduct of developmental test and
evaluation in the Department of Defense (including
integration and developmental testing of
software);
``(ii) in coordination with the Director of
Operational Test and Evaluation, the integration
of developmental test and evaluation with
operational test and evaluation;
``(iii) the conduct of developmental test and
evaluation conducted jointly by more than one
military department or Defense Agency;
``(B) review and approve the developmental test and
evaluation plan within the test and evaluation master
plan for each major defense acquisition program of the
Department of Defense;
``(C) monitor and review the developmental test and
evaluation activities of the major defense acquisition
programs;
``(D) provide advocacy, oversight, and guidance to
elements of the acquisition workforce responsible for
developmental test and evaluation;
``(E) periodically review the organizations and
capabilities of the military departments with respect to
developmental test and evaluation and identify needed
changes or improvements to such organizations and
capabilities, and provide input regarding needed changes
or improvements for the test and evaluation strategic
plan developed in accordance with section 196(d) of this
title; and
``(F) perform such other activities relating to the
developmental test and evaluation activities of the
Department of Defense as the Under Secretary of Defense
for Acquisition, Technology, and Logistics may
prescribe.
``(6) Access to records.--The Secretary of Defense shall
ensure that the Director has access to all records and data of
the Department of Defense (including the records and data of
each military department and including classified and propriety
information, as appropriate) that the Director considers
necessary in order to carry out the Director's duties under this
subsection.
``(7) Concurrent service as director of department of
defense test resources management center.--The individual
serving as the Director of Developmental Test and Evaluation may
also serve concurrently as the Director of the Department of
Defense Test Resource Management Center under section 196 of
this title.

``(b) Director of Systems Engineering.--


[[Page 1712]]
123 STAT. 1712

``(1) Appointment.--There is a Director of Systems
Engineering, who shall be appointed by the Secretary of Defense
from among individuals with an expertise in systems engineering
and development planning.
``(2) Principal advisor for systems engineering and
development planning.--The Director shall be the principal
advisor to the Secretary of Defense and the Under Secretary of
Defense for Acquisition, Technology, and Logistics on systems
engineering and development planning in the Department of
Defense.
``(3) Supervision.--The Director shall be subject to the
supervision of the Under Secretary of Defense for Acquisition,
Technology, and Logistics and shall report to the Under
Secretary.
``(4) Coordination with director of developmental test and
evaluation.--The Director of Systems Engineering shall closely
coordinate with the Director of Developmental Test and
Evaluation to ensure that the developmental test and evaluation
activities of the Department of Defense are fully integrated
into and consistent with the systems engineering and development
planning processes of the Department.
``(5) Duties.--The Director shall--
``(A) <> develop policies and
guidance for--
``(i) the use of systems engineering
principles and best practices, generally;
``(ii) the use of systems engineering
approaches to enhance reliability, availability,
and maintainability on major defense acquisition
programs;
``(iii) the development of systems engineering
master plans for major defense acquisition
programs including systems engineering
considerations in support of lifecycle management
and sustainability; and
``(iv) the inclusion of provisions relating to
systems engineering and reliability growth in
requests for proposals;
``(B) review and approve the systems engineering
master plan for each major defense acquisition program;
``(C) monitor and review the systems engineering and
development planning activities of the major defense
acquisition programs;
``(D) provide advocacy, oversight, and guidance to
elements of the acquisition workforce responsible for
systems engineering, development planning, and lifecycle
management and sustainability functions;
``(E) provide input on the inclusion of systems
engineering requirements in the process for
consideration of joint military requirements by the
Joint Requirements Oversight Council pursuant to section
181 of this title, including specific input relating to
each capabilities development document;
``(F) periodically review the organizations and
capabilities of the military departments with respect to
systems engineering, development planning, and lifecycle
management and sustainability, and identify needed
changes or improvements to such organizations and
capabilities; and


[[Page 1713]]
123 STAT. 1713

``(G) perform such other activities relating to the
systems engineering and development planning activities
of the Department of Defense as the Under Secretary of
Defense for Acquisition, Technology, and Logistics may
prescribe.
``(6) Access to records.--The Director shall have access to
any records or data of the Department of Defense (including the
records and data of each military department and including
classified and proprietary information as appropriate) that the
Director considers necessary to review in order to carry out the
Director's duties under this subsection.

``(c) Joint Annual Report.--Not <> later than
March 31 each year, beginning in 2010, the Director of Developmental
Test and Evaluation and the Director of Systems Engineering shall
jointly submit to the congressional defense committees a report on the
activities undertaken pursuant to subsections (a) and (b) during the
preceding year. Each report shall include a section on activities
relating to the major defense acquisition programs which shall set
forth, at a minimum, the following:
``(1) A discussion of the extent to which the major defense
acquisition programs are fulfilling the objectives of their
systems engineering master plans and developmental test and
evaluation plans.
``(2) A discussion of the waivers of and deviations from
requirements in test and evaluation master plans, systems
engineering master plans, and other testing requirements that
occurred during the preceding year with respect to such
programs, any concerns raised by such waivers or deviations, and
the actions that have been taken or are planned to be taken to
address such concerns.
``(3) An assessment of the organization and capabilities of
the Department of Defense for systems engineering, development
planning, and developmental test and evaluation with respect to
such programs.
``(4) Any comments on such report that the Secretary of
Defense considers appropriate.

``(d) Joint Guidance.--The Director of Developmental Test and
Evaluation and the Director of Systems Engineering shall jointly, in
coordination with the official designated by the Secretary of Defense
under section 103 of the Weapon Systems Acquisition Reform Act of 2009,
issue guidance on the following:
``(1) The development and tracking of detailed measurable
performance criteria as part of the systems engineering master
plans and the developmental test and evaluation plans within the
test and evaluation master plans of major defense acquisition
programs.
``(2) The use of developmental test and evaluation to
measure the achievement of specific performance objectives
within a systems engineering master plan.
``(3) A system for storing and tracking information relating
to the achievement of the performance criteria and objectives
specified pursuant to this subsection.

``(e) Major Defense Acquisition Program Defined.--In this section,
the term `major defense acquisition program' has the meaning given that
term in section 2430 of this title.''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 4 of such title, as amended by section


[[Page 1714]]
123 STAT. 1714

101(a) of this Act, is further amended by inserting after the
item relating to section 139c the following new item:

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

(b) Developmental <> Test and Evaluation
and Systems Engineering in the Military Departments and Defense
Agencies.--
(1) Plans.--The service acquisition executive of each
military department and each Defense Agency with responsibility
for a major defense acquisition program shall develop and
implement plans to ensure the military department or Defense
Agency concerned has provided appropriate resources for each of
the following:
(A) Developmental testing organizations with
adequate numbers of trained personnel in order to--
(i) ensure that developmental testing
requirements are appropriately addressed in the
translation of operational requirements into
contract specifications, in the source selection
process, and in the preparation of requests for
proposals on all major defense acquisition
programs;
(ii) participate in the planning of
developmental test and evaluation activities,
including the preparation and approval of a
developmental test and evaluation plan within the
test and evaluation master plan for each major
defense acquisition program; and
(iii) participate in and oversee the conduct
of developmental testing, the analysis of data,
and the preparation of evaluations and reports
based on such testing.
(B) Development planning and systems engineering
organizations with adequate numbers of trained personnel
in order to--
(i) support key requirements, acquisition, and
budget decisions made for each major defense
acquisition program prior to Milestone A approval
and Milestone B approval through a rigorous
systems analysis and systems engineering process;
(ii) include a robust program for improving
reliability, availability, maintainability, and
sustainability as an integral part of design and
development within the systems engineering master
plan for each major defense acquisition program;
and
(iii) identify systems engineering
requirements, including reliability, availability,
maintainability, and lifecycle management and
sustainability requirements, during the Joint
Capabilities Integration Development System
process, and incorporate such systems engineering
requirements into contract requirements for each
major defense acquisition program.
(2) Reports by service acquisition executives.--Not later
than 180 days after the date of the enactment of this Act, the
service acquisition executive of each military department and
each Defense Agency with responsibility for a major defense
acquisition program shall submit to the Director of


[[Page 1715]]
123 STAT. 1715

Developmental Test and Evaluation and the Director of Systems
Engineering a report on the extent to which--
(A) such military department or Defense Agency has
implemented, or is implementing, the plan required by
paragraph (1); and
(B) additional authorities or resources are needed
to attract, develop, retain, and reward developmental
test and evaluation personnel and systems engineers with
appropriate levels of hands-on experience and technical
expertise to meet the needs of such military department
or Defense Agency.
(3) Assessment of reports by directors of developmental test
and evaluation and systems engineering.--The first annual report
submitted to Congress by the Director of Developmental Test and
Evaluation and the Director of Systems Engineering under section
139d(c) of title 10, United States Code (as added by subsection
(a)), shall include an assessment by the Directors of the
reports submitted by the service acquisition executives to the
Directors under paragraph (2).
SEC. 103. <> PERFORMANCE ASSESSMENTS AND
ROOT CAUSE ANALYSES FOR MAJOR DEFENSE
ACQUISITION PROGRAMS.

(a) Designation of Senior Official Responsibility for Performance
Assessments and Root Cause Analyses.--
(1) In general.--The Secretary of Defense shall designate a
senior official in the Office of the Secretary of Defense as the
principal official of the Department of Defense responsible for
conducting and overseeing performance assessments and root cause
analyses for major defense acquisition programs.
(2) No program execution responsibility.--The Secretary
shall ensure that the senior official designated under paragraph
(1) is not responsible for program execution.
(3) Staff and resources.--The Secretary shall assign to the
senior official designated under paragraph (1) appropriate staff
and resources necessary to carry out official's function under
this section.

(b) Responsibilities.--The senior official designated under
subsection (a) shall be responsible for the following:
(1) Carrying out performance assessments of major defense
acquisition programs in accordance with the requirements of
subsection (c) periodically or when requested by the Secretary
of Defense, the Under Secretary of Defense for Acquisition,
Technology and Logistics, the Secretary of a military
department, or the head of a Defense Agency.
(2) Conducting root cause analyses for major defense
acquisition programs in accordance with the requirements of
subsection (d) when required by section 2433a(a)(1) of title 10,
United States Code (as added by section 206(a) of this Act), or
when requested by the Secretary of Defense, the Under Secretary
of Defense for Acquisition, Technology and Logistics, the
Secretary of a military department, or the head of a Defense
Agency.
(3) Issuing policies, procedures, and guidance governing the
conduct of performance assessments and root cause analyses by
the military departments and the Defense Agencies.


[[Page 1716]]
123 STAT. 1716

(4) Evaluating the utility of performance metrics used to
measure the cost, schedule, and performance of major defense
acquisition programs, and making such recommendations to the
Secretary of Defense as the official considers appropriate to
improve such metrics.
(5) Advising acquisition officials on performance issues
regarding a major defense acquisition program that may arise--
(A) prior to certification under section 2433a of
title 10, United States Code (as so added);
(B) prior to entry into full-rate production; or
(C) in the course of consideration of any decision
to request authorization of a multiyear procurement
contract for the program.

(c) Performance Assessments.--For purposes of this section, a
performance assessment with respect to a major defense acquisition
program is an evaluation of the following:
(1) The cost, schedule, and performance of the program,
relative to current metrics, including performance requirements
and baseline descriptions.
(2) The extent to which the level of program cost, schedule,
and performance predicted relative to such metrics is likely to
result in the timely delivery of a level of capability to the
warfighter that is consistent with the level of resources to be
expended and provides superior value to alternative approaches
that may be available to meet the same military requirement.

(d) Root Cause Analyses.--For purposes of this section and section
2433a of title 10, United States Code (as so added), a root cause
analysis with respect to a major defense acquisition program is an
assessment of the underlying cause or causes of shortcomings in cost,
schedule, or performance of the program, including the role, if any,
of--
(1) unrealistic performance expectations;
(2) unrealistic baseline estimates for cost or schedule;
(3) immature technologies or excessive manufacturing or
integration risk;
(4) unanticipated design, engineering, manufacturing, or
technology integration issues arising during program
performance;
(5) changes in procurement quantities;
(6) inadequate program funding or funding instability;
(7) poor performance by government or contractor personnel
responsible for program management; or
(8) any other matters.

(e) Support of Applicable Capabilities and Expertise.--The Secretary
of Defense shall ensure that the senior official designated under
subsection (a) has the support of other Department of Defense officials
with relevant capabilities and expertise needed to carry out the
requirements of this section.
(f) Annual Report.--Not <> later than March 1
each year, beginning in 2010, the official responsible for conducting
and overseeing performance assessments and root cause analyses for major
defense acquisition programs shall submit to the congressional defense
committees a report on the activities undertaken under this section
during the preceding year.

[[Page 1717]]
123 STAT. 1717

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

(a) Assessment by Director of Defense Research and Engineering.--
(1) In general.--Section 139a of title 10, United States
Code, is amended by adding at the end the following new
subsection:

``(c)(1) <> The Director of Defense Research
and Engineering, in consultation with the Director of Developmental Test
and Evaluation, shall periodically review and assess the technological
maturity and integration risk of critical technologies of the major
defense acquisition programs of the Department of Defense and report on
the findings of such reviews and assessments to the Under Secretary of
Defense for Acquisition, Technology, and Logistics.

``(2) <> The Director shall submit to the
Secretary of Defense and to the congressional defense committees by
March 1 of each year a report on the technological maturity and
integration risk of critical technologies of the major defense
acquisition programs of the Department of Defense.''.
(2) First <> annual report.--The
first annual report under subsection (c)(2) of section 139a of
title 10, United States Code (as added by paragraph (1)), shall
be submitted to the congressional defense committees not later
than March 1, 2010, and shall address the results of reviews and
assessments conducted by the Director of Defense Research and
Engineering pursuant to subsection (c)(1) of such section (as so
added) during the preceding calendar year.

(b) Report on Resources for Implementation.--Not later than 120 days
after the date of the enactment of this Act, the Director of Defense
Research and Engineering shall submit to the congressional defense
committees a report describing any additional resources that may be
required by the Director, and by other research and engineering elements
of the Department of Defense, to carry out the following:
(1) The requirements under the amendment made by subsection
(a)(1).
(2) The technological maturity assessments required by
section 2366b(a) of title 10, United States Code.
(3) The requirements of Department of Defense Instruction
5000, as revised.

(c) Technological <> Maturity
Standards.--Not later than 180 days after the date of the enactment of
this Act, the Director of Defense Research and Engineering, in
consultation with the Director of Developmental Test and Evaluation,
shall develop knowledge-based standards against which to measure the
technological maturity and integration risk of critical technologies at
key stages in the acquisition process for purposes of conducting the
reviews and assessments of major defense acquisition programs required
by subsection (c) of section 139a of title 10, United States Code (as so
added).
SEC. 105. ROLE OF THE COMMANDERS OF THE COMBATANT COMMANDS IN
IDENTIFYING JOINT MILITARY REQUIREMENTS.

(a) In General.--Section 181(d) of title 10, United States Code, as
amended by section 101(d) of this Act, is further amended--


[[Page 1718]]
123 STAT. 1718

(1) by inserting ``(1)'' before ``The Under Secretary''; and
(2) by adding at the end the following new paragraph:

``(2) The Council shall seek and consider input from the commanders
of the combatant commands in carrying out its mission under paragraphs
(1) and (2) of subsection (b) and in conducting periodic reviews in
accordance with the requirements of subsection (e).''.
(b) Input <> From Commanders of Combatant
Commands.--The Joint Requirements Oversight Council in the Department of
Defense shall seek and consider input from the commanders of combatant
commands, in accordance with section 181(d) of title 10, United States
Code (as amended by subsection (a)). Such input may include, but is not
limited to, an assessment of the following:
(1) Any current or projected missions or threats in the
theater of operations of the commander of a combatant command
that would inform the assessment of a new joint military
requirement.
(2) The necessity and sufficiency of a proposed joint
military requirement in terms of current and projected missions
or threats.
(3) The relative priority of a proposed joint military
requirement in comparison with other joint military requirements
within the theater of operations of the commander of a combatant
command.
(4) The ability of partner nations in the theater of
operations of the commander of a combatant command to assist in
meeting the joint military requirement or the benefit, if any,
of a partner nation assisting in development or use of
technologies developed to meet the joint military requirement.

(c) Comptroller General of the United States Review of
Implementation.--
(1) Requirement.--Not <> later
than two years after the date of the enactment of this Act, the
Comptroller General of the United States shall submit to the
Committees on Armed Services of the Senate and the House of
Representatives a report on the implementation of the
requirements of--
(A) subsection (d)(2) of section 181 of title 10,
United States Code (as amended by subsection (a)), for
the Joint Requirements Oversight Council to solicit and
consider input from the commanders of the combatant
commands;
(B) the amendments to subsection (b) of section 181
of title 10, United States Code, made by section 942 of
the National Defense Authorization Act for Fiscal Year
2008 (Public Law 110-181; 122 Stat. 287) and by section
201(b) of this Act; and
(C) the requirements of section 201(c) of this Act.
(2) Matters covered.--The report shall include, at a
minimum, an assessment of--
(A) the extent to which the Council has effectively
sought, and the commanders of the combatant commands
have provided, meaningful input on proposed joint
military requirements;
(B) the quality and effectiveness of efforts to
estimate the level of resources needed to fulfill joint
military requirements; and


[[Page 1719]]
123 STAT. 1719

(C) the extent to which the Council has considered
trade-offs among cost, schedule, and performance
objectives.

TITLE II--ACQUISITION POLICY

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

(a) Consideration <> of Trade-Offs.--
(1) In general.--The Secretary of Defense shall ensure that
mechanisms are developed and implemented to require
consideration of trade-offs among cost, schedule, and
performance objectives as part of the process for developing
requirements for Department of Defense acquisition programs.
(2) Elements.--The mechanisms required under this subsection
shall ensure, at a minimum, that--
(A) Department of Defense officials responsible for
acquisition, budget, and cost estimating functions are
provided an appropriate opportunity to develop estimates
and raise cost and schedule matters before performance
objectives are established for capabilities for which
the Chairman of the Joint Requirements Oversight Council
is the validation authority; and
(B) the process for developing requirements is
structured to enable incremental, evolutionary, or
spiral acquisition approaches, including the deferral of
technologies that are not yet mature and capabilities
that are likely to significantly increase costs or delay
production until later increments or spirals.

(b) Duties of Joint Requirements Oversight Council.--Section 181(b)
of title 10, United States Code, is amended--
(1) in paragraph (1)--
(A) by striking ``and'' at the end of subparagraph
(A);
(B) by inserting ``and'' at the end of subparagraph
(B) after the semicolon; and
(C) by adding at the end the following new
subparagraph:
``(C) in ensuring the consideration of trade-offs
among cost, schedule, and performance objectives for
joint military requirements in consultation with the
advisors specified in subsection (d);''.
(2) in paragraph (3)--
(A) by inserting ``, in consultation with the Under
Secretary of Defense (Comptroller), the Under Secretary
of Defense for Acquisition, Technology, and Logistics,
and the Director of Cost Assessment and Performance
Evaluation,'' after ``assist the Chairman''; and
(B) by striking ``and'' after the semicolon at the
end;
(3) in paragraph (4), by striking the period at the end and
inserting ``; and''; and
(4) by adding at the end the following new paragraph:
``(5) assist the Chairman, in consultation with the
commanders of the combatant commands and the Under Secretary of
Defense for Acquisition, Technology, and Logistics, in
establishing an objective for the overall period of time within
which


[[Page 1720]]
123 STAT. 1720

an initial operational capability should be delivered to meet
each joint military requirement.''.

(c) Review <> of Joint Military
Requirements.--The Secretary of Defense shall ensure that each new joint
military requirement recommended by the Joint Requirements Oversight
Council is reviewed to ensure that the Joint Requirements Oversight
Council has, in making such recommendation--
(1) taken appropriate action to seek and consider input from
the commanders of the combatant commands, in accordance with the
requirements of section 181(d) of title 10, United States Code
(as amended by section 105(a) of this Act);
(2) engaged in consideration of trade-offs among cost,
schedule, and performance objectives in accordance with the
requirements of section 181(b)(1)(C) of title 10, United States
Code (as added by subsection (b)); and
(3) engaged in consideration of issues of joint portfolio
management, including alternative material and non-material
solutions, as provided in Department of Defense instructions for
the development of joint military requirements.

(d) Study <> Guidance for Analyses of
Alternatives.--The Director of Cost Assessment and Program Evaluation
shall take the lead in the development of study guidance for an analysis
of alternatives for each joint military requirement for which the
Chairman of the Joint Requirements Oversight Council is the validation
authority. In developing the guidance, the Director shall solicit the
advice of appropriate officials within the Department of Defense and
ensure that the guidance requires, at a minimum--
(1) full consideration of possible trade-offs among cost,
schedule, and performance objectives for each alternative
considered; and
(2) an assessment of whether or not the joint military
requirement can be met in a manner that is consistent with the
cost and schedule objectives recommended by the Joint
Requirements Oversight Council.

(e) Analysis of Alternatives in Certification for Milestone A.--
Section 2366a(a) of title 10, United States Code, as amended by section
101(d)(3) of this Act, is further amended--
(1) by striking ``and'' at the end of paragraph (3);
(2) by redesignating paragraph (4) as paragraph (5); and
(3) by inserting after paragraph (3) the following new
paragraph (4):
``(4) that an analysis of alternatives has been performed
consistent with study guidance developed by the Director of Cost
Assessment and Program Evaluation; and''.

(f) Duties of Milestone Decision Authority.--Section 2366b(a)(1)(B)
of such title is amended by inserting ``appropriate trade-offs among
cost, schedule, and performance objectives have been made to ensure
that'' before ``the program is affordable''.
SEC. 202. <> ACQUISITION STRATEGIES TO
ENSURE COMPETITION THROUGHOUT THE
LIFECYCLE OF MAJOR DEFENSE ACQUISITION
PROGRAMS.

(a) Acquisition Strategies To Ensure Competition.--The Secretary of
Defense shall ensure that the acquisition strategy for each major
defense acquisition program includes--
(1) measures to ensure competition, or the option of
competition, at both the prime contract level and the
subcontract


[[Page 1721]]
123 STAT. 1721

level (at such tier or tiers as are appropriate) of such program
throughout the life-cycle of such program as a means to improve
contractor performance; and
(2) adequate documentation of the rationale for the
selection of the subcontract tier or tiers under paragraph (1).

(b) Measures To Ensure Competition.--The measures to ensure
competition, or the option of competition, for purposes of subsection
(a)(1) may include measures to achieve the following, in appropriate
cases if such measures are cost-effective:
(1) Competitive prototyping.
(2) Dual-sourcing.
(3) Unbundling of contracts.
(4) Funding of next-generation prototype systems or
subsystems.
(5) Use of modular, open architectures to enable competition
for upgrades.
(6) Use of build-to-print approaches to enable production
through multiple sources.
(7) Acquisition of complete technical data packages.
(8) Periodic competitions for subsystem upgrades.
(9) Licensing of additional suppliers.
(10) Periodic system or program reviews to address long-term
competitive effects of program decisions.

(c) Additional Measures To Ensure Competition at Subcontract
Level.--The Secretary shall take actions to ensure fair and objective
``make-buy'' decisions by prime contractors on major defense acquisition
programs by--
(1) requiring prime contractors to give full and fair
consideration to qualified sources other than the prime
contractor for the development or construction of major
subsystems and components of major weapon systems;
(2) providing for government surveillance of the process by
which prime contractors consider such sources and determine
whether to conduct such development or construction in-house or
through a subcontract; and
(3) providing for the assessment of the extent to which a
contractor has given full and fair consideration to qualified
sources other than the contractor in sourcing decisions as a
part of past performance evaluations.

(d) Consideration of Competition Throughout Operation and
Sustainment of Major Weapon Systems.--Whenever a decision regarding
source of repair results in a plan to award a contract for performance
of maintenance and sustainment of a major weapon system, the Secretary
shall take actions to ensure that, to the maximum extent practicable and
consistent with statutory requirements, contracts for such maintenance
and sustainment are awarded on a competitive basis and give full
consideration to all sources (including sources that partner or
subcontract with public or private sector repair activities).
(e) Applicability.--
(1) Strategy and measures to ensure competition.--The
requirements of subsections (a) and (b) shall apply to any
acquisition plan for a major defense acquisition program that is
developed or revised on or after the date that is 60 days after
the date of the enactment of this Act.


[[Page 1722]]
123 STAT. 1722

(2) Additional <> actions.--The actions
required by subsections (c) and (d) shall be taken within 180
days after the date of the enactment of this Act.
SEC. 203. <> PROTOTYPING
REQUIREMENTS FOR MAJOR DEFENSE ACQUISITION
PROGRAMS.

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

(b) Comptroller General Review of Certain Waivers.--
(1) Notice to comptroller general.--Whenever a Milestone
Decision Authority authorizes a waiver of the requirement for
prototypes pursuant to paragraph (2) of subsection (a) on the
basis of excessive cost, the Milestone Decision Authority shall
submit the notification of the waiver, together with the
rationale, to the Comptroller General of the United States at
the same time it is submitted to the congressional defense
committees.
(2) Comptroller general review.--Not later than 60 days
after receipt of a notification of a waiver under paragraph (1),
the Comptroller General shall--



[[Page 1723]]
123 STAT. 1723

(A) review the rationale for the waiver; and
(B) submit to the congressional defense committees a
written assessment of the rationale for the waiver.
SEC. 204. ACTIONS TO IDENTIFY AND ADDRESS SYSTEMIC PROBLEMS IN
MAJOR DEFENSE ACQUISITION PROGRAMS PRIOR
TO MILESTONE B APPROVAL.

(a) Modification to Certification Requirement.--Subsection (a) of
section 2366a of title 10, United States Code, is amended by striking
``may not receive Milestone A approval, or Key Decision Point A approval
in the case of a space program,'' and inserting ``may not receive
Milestone A approval, or Key Decision Point A approval in the case of a
space program, or otherwise be initiated prior to Milestone B approval,
or Key Decision Point B approval in the case of a space program,''.
(b) Modification to Notification Requirement.--Subsection (b) of
such section is amended--
(1) by inserting ``(1)'' before ``With respect to'';
(2) in paragraph (1), as so designated, by striking ``by at
least 25 percent,'' and inserting ``by at least 25 percent, or
the program manager determines that the period of time required
for the delivery of an initial operational capability is likely
to exceed the schedule objective established pursuant to section
181(b)(5) of this title by more than 25 percent,''; and
(3) by adding at the end the following new paragraph:

``(2) Not <> later than 30 days after a
program manager submits a notification to the Milestone Decision
Authority pursuant to paragraph (1) with respect to a major defense
acquisition program, the Milestone Decision Authority shall submit to
the congressional defense committees a report that--
``(A) identifies the root causes of the cost or schedule
growth in accordance with applicable policies, procedures, and
guidance;
``(B) identifies appropriate acquisition performance
measures for the remainder of the development of the program;
and
``(C) includes one of the following:
``(i) <> A written
certification (with a supporting explanation) stating
that--
``(I) the program is essential to national
security;
``(II) there are no alternatives to the
program that will provide acceptable military
capability at less cost;
``(III) new estimates of the development cost
or schedule, as appropriate, are reasonable; and
``(IV) the management structure for the
program is adequate to manage and control program
development cost and schedule.
``(ii) <> A plan for terminating the
development of the program or withdrawal of Milestone A
approval, or Key Decision Point A approval in the case
of a space program, if the Milestone Decision Authority
determines that such action is in the interest of
national defense.''.

(c) Application <> to Ongoing Programs.--
(1) In <> general.--Each
major defense acquisition program described in paragraph (2)
shall be certified in accordance with the requirements of
section 2366a of title 10, United States


[[Page 1724]]
123 STAT. 1724

Code (as amended by this section), within one year after the
date of the enactment of this Act.
(2) Covered programs.--The requirement in paragraph (1)
shall apply to any major defense acquisition program that--
(A) was initiated before the date of the enactment
of this Act; and
(B) as of the date of certification under paragraph
(1) has not otherwise been certified pursuant to either
section 2366a (as so amended) or 2366b of title 10,
United States Code.
SEC. 205. ADDITIONAL REQUIREMENTS FOR CERTAIN MAJOR DEFENSE
ACQUISITION PROGRAMS.

(a) Additional Requirements Relating to Milestone B Approval.--
Section 2366b of title 10, United States Code, is amended--
(1) in subsection (d)--
(A) by inserting ``(1)'' before ``The milestone
decision authority may''; and
(B) by striking the second sentence and inserting
the following:

``(2) <> Whenever
the milestone decision authority makes such a determination and
authorizes such a waiver--
``(A) the waiver, the determination, and the reasons for the
determination shall be submitted in writing to the congressional
defense committees within 30 days after the waiver is
authorized; and
``(B) the milestone decision authority shall review the
program not less often than annually to determine the extent to
which such program currently satisfies the certification
components specified in paragraphs (1) and (2) of subsection (a)
until such time as the milestone decision authority determines
that the program satisfies all such certification components.'';
(2) by redesignating subsections (e) and (f) as subsections
(f) and (g), respectively, and inserting after subsection (d)
the following new subsection (e):

``(e) Designation of Certification Status in Budget Documentation.--
Any budget request, budget justification material, budget display,
reprogramming request, Selected Acquisition Report, or other budget
documentation or performance report submitted by the Secretary of
Defense to the President regarding a major defense acquisition program
receiving a waiver pursuant to subsection (d) shall prominently and
clearly indicate that such program has not fully satisfied the
certification requirements of this section until such time as the
milestone decision authority makes the determination that such program
has satisfied all such certification components.''; and
(3) in subsection (a)--
(A) in paragraph (1), by striking ``and'' at the
end;
(B) by redesignating paragraph (2) as paragraph (3);
(C) by inserting after paragraph (1) the following
new paragraph (2):


[[Page 1725]]
123 STAT. 1725

``(2) has received a preliminary design review and conducted
a formal post-preliminary design review assessment, and
certifies on the basis of such assessment that the program
demonstrates a high likelihood of accomplishing its intended
mission; and''; and
(D) in paragraph (3), as redesignated by
subparagraph (B) of this paragraph--
(i) in subparagraph (D), by striking the
semicolon and inserting ``, as determined by the
Milestone Decision Authority on the basis of an
independent review and assessment by the Director
of Defense Research and Engineering; and'';
(ii) by striking subparagraph (E); and
(iii) by redesignating subparagraph (F) as
subparagraph (E).

(b) Certification <> and Review of
Programs Entering Development Prior to Enactment of Section 2366b of
Title 10.--
(1) Determination.--Not <> later than 270
days after the date of the enactment of this Act, for each major
defense acquisition program that received Milestone B approval
before January 6, 2006, and has not received Milestone C
approval, and for each space program that received Key Decision
Point B approval before January 6, 2006, and has not received
Key Decision Point C approval, the Milestone Decision Authority
shall determine whether or not such program satisfies all of the
certification components specified in paragraphs (1) and (2) of
subsection (a) of section 2366b of title 10, United States Code
(as amended by subsection (a) of this section).
(2) Annual review.--The Milestone Decision Authority shall
review any program determined pursuant to paragraph (1) not to
satisfy any of the certification components of subsection (a) of
section 2366b of title 10, United States Code (as so amended),
not less often than annually thereafter to determine the extent
to which such program currently satisfies such certification
components until such time as the Milestone Decision Authority
determines that such program satisfies all such certification
components.
(3) Designation of certification status in budget
documentation.--Any budget request, budget justification
material, budget display, reprogramming request, Selected
Acquisition Report, or other budget documentation or performance
report submitted by the Secretary of Defense to the President
regarding a major defense acquisition program which the
Milestone Decision Authority determines under paragraph (1) does
not satisfy all of the certification components of subsection
(a) of section 2366b of title 10, United States Code, (as so
amended) shall prominently and clearly indicate that such
program has not fully satisfied such certification components
until such time as the Milestone Decision Authority makes the
determination that such program has satisfied all such
certification components.

(c) Reviews <> of Programs Restructured
After Experiencing Critical Cost Growth.--
The <> official designated to perform oversight of
performance assessment pursuant to section 103 of this Act, shall assess
the performance of each major defense acquisition


[[Page 1726]]
123 STAT. 1726

program that has exceeded critical cost growth thresholds established
pursuant to section 2433(e) of title 10, United States Code, but has not
been terminated in accordance with section 2433a of such title (as added
by section 206(a) of this Act) not less often than semi-annually until
one year after the date on which such program receives a new milestone
approval, in accordance with section 2433a(c)(3) of such title (as so
added). The results of reviews performed under this subsection shall be
reported to the Under Secretary of Defense for Acquisition, Technology,
and Logistics and summarized in the next annual report of such
designated official.
SEC. 206. CRITICAL COST GROWTH IN MAJOR DEFENSE ACQUISITION
PROGRAMS.

(a) Actions Following Critical Cost Growth.--
(1) In general.--Chapter 144 of title 10, United States
Code, is amended by inserting after section 2433 the following
new section:
``Sec. 2433a. Critical cost growth in major defense acquisition
programs

``(a) Reassessment <> of Program.--If the
program acquisition unit cost or procurement unit cost of a major
defense acquisition program or designated subprogram (as determined by
the Secretary under section 2433(d) of this title) increases by a
percentage equal to or greater than the critical cost growth threshold
for the program or subprogram, the Secretary of Defense, after
consultation with the Joint Requirements Oversight Council regarding
program requirements, shall--
``(1) <> determine the root cause or
causes of the critical cost growth in accordance with applicable
statutory requirements and Department of Defense policies,
procedures, and guidance; and
``(2) in consultation with the Director of Cost Assessment
and Program Evaluation, carry out an assessment of--
``(A) the projected cost of completing the program
if current requirements are not modified;
``(B) the projected cost of completing the program
based on reasonable modification of such requirements;
``(C) the rough order of magnitude of the costs of
any reasonable alternative system or capability; and
``(D) the need to reduce funding for other programs
due to the growth in cost of the program.

``(b) Presumption <> of
Termination.--(1) After conducting the reassessment required by
subsection (a) with respect to a major defense acquisition program, the
Secretary shall terminate the program unless the Secretary submits to
Congress, before the end of the 60-day period beginning on the day the
Selected Acquisition Report containing the information described in
section 2433(g) of this title is required to be submitted under section
2432(f) of this title, a written certification in accordance with
paragraph (2).

``(2) A certification described by this paragraph with respect to a
major defense acquisition program is a written certification that--
``(A) the continuation of the program is essential to the
national security;


[[Page 1727]]
123 STAT. 1727

``(B) there are no alternatives to the program which will
provide acceptable capability to meet the joint military
requirement (as defined in section 181(g)((1) of this title) at
less cost;
``(C) the new estimates of the program acquisition unit cost
or procurement unit cost have been determined by the Director of
Cost Assessment and Program Evaluation to be reasonable;
``(D) the program is a higher priority than programs whose
funding must be reduced to accommodate the growth in cost of the
program; and
``(E) the management structure for the program is adequate
to manage and control program acquisition unit cost or
procurement unit cost.

``(3) <> A written certification under paragraph (2)
shall be accompanied by a report presenting the root cause analysis and
assessment carried out pursuant to subsection (a) and the basis for each
determination made in accordance with subparagraphs (A) through (E) of
paragraph (2), together with supporting documentation.

``(c) Actions if Program Not Terminated.--(1) If the Secretary
elects not to terminate a major defense acquisition program pursuant to
subsection (b), the Secretary shall--
``(A) restructure the program in a manner that addresses the
root cause or causes of the critical cost growth, as identified
pursuant to subsection (a), and ensures that the program has an
appropriate management structure as set forth in the
certification submitted pursuant to subsection (b)(2)(E);
``(B) rescind the most recent Milestone approval, or Key
Decision Point approval in the case of a space program, for the
program and withdraw any associated certification under section
2366a or 2366b of this title;
``(C) require a new Milestone approval, or Key Decision
Point approval in the case of a space program, for the program
before taking any contract action to enter a new contract,
exercise an option under an existing contract, or otherwise
extend the scope of an existing contract under the program,
except to the extent determined necessary by the Milestone
Decision Authority, on a non-delegable basis, to ensure that the
program can be restructured as intended by the Secretary without
unnecessarily wasting resources;
``(D) include in the report specified in paragraph (2) a
description of all funding changes made as a result of the
growth in cost of the program, including reductions made in
funding for other programs to accommodate such cost growth; and
``(E) conduct regular reviews of the program in accordance
with the requirements of section 205 of the Weapon Systems
Acquisition Reform Act of 2009.

``(2) <> For purposes of paragraph (1)(D), the
report specified in this paragraph is the first Selected Acquisition
Report for the program submitted pursuant to section 2432 of this title
after the President submits a budget pursuant to section 1105 of title
31, in the calendar year following the year in which the program was
restructured.

[[Page 1728]]
123 STAT. 1728

``(d) Actions <> if Program Terminated.--If a major
defense acquisition program is terminated pursuant to subsection (b),
the Secretary shall submit to Congress a written report setting forth--
``(1) an explanation of the reasons for terminating the
program;
``(2) the alternatives considered to address any problems in
the program; and
``(3) the course the Department plans to pursue to meet any
continuing joint military requirements otherwise intended to be
met by the program.''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 144 of such title is amended by inserting
after the item relating to section 2433 the following new item:

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

(3) Conforming amendment.--Paragraph (2) of section 2433(e)
of such title 10 is amended to read as follows:

``(2) If the program acquisition unit cost or procurement unit cost
of a major defense acquisition program or designated major subprogram
(as determined by the Secretary under subsection (d)) increases by a
percentage equal to or greater than the critical cost growth threshold
for the program or subprogram, the Secretary of Defense shall take
actions consistent with the requirements of section 2433a of this
title.''.
(b) Treatment as MDAP.--Section 2430 of such title is amended--
(1) in subsection (a)(2), by inserting ``, including all
planned increments or spirals,'' after ``an eventual total
expenditure for procurement''; and
(2) by adding at the end the following new subsection:

``(c) For purposes of subsection (a)(2), the Secretary shall
consider, as applicable, the following:
``(1) The estimated level of resources required to fulfill
the relevant joint military requirement, as determined by the
Joint Requirements Oversight Council pursuant to section 181 of
this title.
``(2) The cost estimate referred to in section 2366a(a)(4)
of this title.
``(3) The cost estimate referred to in section
2366b(a)(1)(C) of this title.
``(4) The cost estimate within a baseline description as
required by section 2435 of this title.''.
SEC. 207. ORGANIZATIONAL CONFLICTS OF INTEREST IN MAJOR DEFENSE
ACQUISITION PROGRAMS.

(a) Revised <> Regulations
Required.--Not later than 270 days after the date of the enactment of
this Act, the Secretary of Defense shall revise the Defense Supplement
to the Federal Acquisition Regulation to provide uniform guidance and
tighten existing requirements for organizational conflicts of interest
by contractors in major defense acquisition programs.

(b) Elements.--The revised regulations required by subsection (a)
shall, at a minimum--
(1) address organizational conflicts of interest that could
arise as a result of--
(A) lead system integrator contracts on major
defense acquisition programs and contracts that follow
lead system


[[Page 1729]]
123 STAT. 1729

integrator contracts on such programs, particularly
contracts for production;
(B) the ownership of business units performing
systems engineering and technical assistance functions,
professional services, or management support services in
relation to major defense acquisition programs by
contractors who simultaneously own business units
competing to perform as either the prime contractor or
the supplier of a major subsystem or component for such
programs;
(C) the award of major subsystem contracts by a
prime contractor for a major defense acquisition program
to business units or other affiliates of the same parent
corporate entity, and particularly the award of
subcontracts for software integration or the development
of a proprietary software system architecture; or
(D) the performance by, or assistance of,
contractors in technical evaluations on major defense
acquisition programs;
(2) ensure that the Department of Defense receives advice on
systems architecture and systems engineering matters with
respect to major defense acquisition programs from federally
funded research and development centers or other sources
independent of the prime contractor;
(3) require that a contract for the performance of systems
engineering and technical assistance functions for a major
defense acquisition program contains a provision prohibiting the
contractor or any affiliate of the contractor from participating
as a prime contractor or a major subcontractor in the
development or construction of a weapon system under the
program; and
(4) establish such limited exceptions to the requirement in
paragraphs (2) and (3) as may be necessary to ensure that the
Department of Defense has continued access to advice on systems
architecture and systems engineering matters from highly-
qualified contractors with domain experience and expertise,
while ensuring that such advice comes from sources that are
objective and unbiased.

(c) Consultation in Revision of Regulations.--
(1) Recommendations of panel on contracting integrity.--Not
later <> than 90 days after the date of the
enactment of this Act, the Panel on Contracting Integrity
established pursuant to section 813 of the John Warner National
Defense Authorization Act for Fiscal Year 2007 (Public Law 109-
364; 120 Stat. 2320) shall present recommendations to the
Secretary of Defense on measures to eliminate or mitigate
organizational conflicts of interest in major defense
acquisition programs.
(2) Consideration of recommendations.--In developing the
revised regulations required by subsection (a), the Secretary
shall consider the following:
(A) The recommendations presented by the Panel on
Contracting Integrity pursuant to paragraph (1).
(B) Any findings and recommendations of the
Administrator for Federal Procurement Policy and the
Director of the Office of Government Ethics pursuant to
section 841(b) of the Duncan Hunter National Defense
Authorization Act for Fiscal Year 2009 (Public Law 110-
417; 122 Stat. 4539).


[[Page 1730]]
123 STAT. 1730

(d) Extension <> of Panel on Contracting
Integrity.--Subsection (e) of section 813 of the John Warner National
Defense Authorization Act for Fiscal Year 2007 is amended to read as
follows:

``(e) Termination.--
``(1) In <> general.--Subject to
paragraph (2), the panel shall continue to serve until the date
that is 18 months after the date on which the Secretary of
Defense notifies the congressional defense committees of an
intention to terminate the panel based on a determination that
the activities of the panel no longer justify its continuation
and that concerns about contracting integrity have been
mitigated.
``(2) Minimum continuing service.--The panel shall continue
to serve at least until December 31, 2011.''.

TITLE III--ADDITIONAL ACQUISITION PROVISIONS

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

(a) In <> General.--Not later than 180 days after
the date of the enactment of this Act, the Secretary of Defense shall
commence carrying out a program to recognize excellent performance by
individuals and teams of members of the Armed Forces and civilian
personnel of the Department of Defense in the acquisition of products
and services for the Department of Defense.

(b) Elements.--The <> program required by
subsection (a) shall include the following:
(1) Procedures for the nomination by the personnel of the
military departments and the Defense Agencies of individuals and
teams of members of the Armed Forces and civilian personnel of
the Department of Defense for eligibility for recognition under
the program.
(2) Procedures for the evaluation of nominations for
recognition under the program by one or more panels of
individuals from the Government, academia, and the private
sector who have such expertise, and are appointed in such
manner, as the Secretary shall establish for purposes of the
program.

(c) Award of Cash Bonuses.--As part of the program required by
subsection (a), the Secretary may award to any individual recognized
pursuant to the program a cash bonus authorized by any other provision
of law to the extent that the performance of such individual so
recognized warrants the award of such bonus under such provision of law.
SEC. 302. EARNED VALUE MANAGEMENT.

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


[[Page 1731]]
123 STAT. 1731

``(8) A discussion of the manner in which the Department
ensures that personnel responsible for administering and
overseeing earned value management systems have the training and
qualifications needed to perform that responsibility.
``(9) A discussion of mechanisms to ensure that contractors
establish and use approved earned value management systems,
including mechanisms such as the consideration of the quality of
contractor earned value management performance in past
performance evaluations.
``(10) Recommendations for improving earned value management
and its implementation within the Department, including--
``(A) a discussion of the merits of possible
alternatives; and
``(B) a plan for implementing any improvements the
Secretary determines to be appropriate.''.

(b) Modification of Report Date.--Subsection (b) of such section is
amended by striking ``270 days after the date of the enactment of this
Act'' and inserting ``October 14, 2009''.
SEC. 303. EXPANSION OF NATIONAL SECURITY OBJECTIVES OF THE
NATIONAL TECHNOLOGY AND INDUSTRIAL BASE.

(a) In General.--Section 2501(a) of title 10, United States Code, is
amended by adding at the end the following new paragraph:
``(6) Maintaining critical design skills to ensure that the
armed forces are provided with systems capable of ensuring
technological superiority over potential adversaries.''.

(b) Assessment of Effect of Termination of Major Defense Acquisition
Programs on Technology and Industrial Capabilities.--Section 2505(b) of
such title is amended--
(1) in paragraph (2), by striking ``and'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(4) consider the effects of the termination of major
defense acquisition programs (as the term is defined in section
2430 of this title) in the previous fiscal year on the sectors
and capabilities in the assessment.''.
SEC. 304. COMPTROLLER GENERAL OF THE UNITED STATES REPORTS ON
COSTS AND FINANCIAL INFORMATION REGARDING
MAJOR DEFENSE ACQUISITION PROGRAMS.

(a) Review of Operating and Support Costs of Major Weapon Systems.--
(1) In general.--Not later than one year after the date of
the enactment of this Act, the Comptroller General of the United
States shall submit to the congressional defense committees a
report on growth in operating and support costs for major weapon
systems.
(2) Elements.--In preparing the report required by paragraph
(1), the Comptroller General shall, at a minimum--
(A) identify the original estimates for operating
and support costs for major weapon systems selected by
the Comptroller General for purposes of the report;
(B) assess the actual operating and support costs
for such major weapon systems;
(C) analyze the rate of growth for operating and
support costs for such major weapon systems;


[[Page 1732]]
123 STAT. 1732

(D) for such major weapon systems that have
experienced the highest rate of growth in operating and
support costs, assess the factors contributing to such
growth;
(E) assess measures taken by the Department of
Defense to reduce operating and support costs for major
weapon systems; and
(F) make such recommendations as the Comptroller
General considers appropriate.

(b) Review of Financial Information Relating to Major Defense
Acquisition Programs.--
(1) Review.--The Comptroller General of the United States
shall perform a review of weaknesses in operations affecting the
reliability of financial information on the systems and assets
to be acquired under major defense acquisition programs.
(2) Elements.--The review required under paragraph (1)
shall--
(A) identify any weaknesses in operations under
major defense acquisition programs that hinder the
capacity to assemble reliable financial information on
the systems and assets to be acquired under such
programs in accordance with applicable accounting
standards;
(B) identify any mechanisms developed by the
Department of Defense to address weaknesses in
operations under major defense acquisition programs
identified pursuant to subparagraph (A); and
(C) assess the implementation of the mechanisms set
forth pursuant to subparagraph (B), including--
(i) the actions taken, or planned to be taken,
to implement such mechanisms;
(ii) the schedule for carrying out such
mechanisms; and
(iii) the metrics, if any, instituted to
assess progress in carrying out such mechanisms.
(3) Consultation.--In performing the review required by
paragraph (1), the Comptroller General shall seek and consider
input from each of the following:
(A) The Chief Management Officer of the Department
of Defense.
(B) The Chief Management Officer of the Department
of the Army.
(C) The Chief Management Officer of the Department
of the Navy.
(D) The Chief Management Officer of the Department
of the Air Force.
(4) Report.--Not later than one year after the date of
enactment of this Act, the Comptroller General shall submit


[[Page 1733]]
123 STAT. 1733

to the congressional defense committees a report on the results
of the review required by paragraph (1).

Approved May 22, 2009.

LEGISLATIVE HISTORY--S. 454 (H.R. 2101):
---------------------------------------------------------------------------

HOUSE REPORTS: Nos. 111-101 (Comm. on Armed Services) and 111-124
(Comm. of Conference) accompanying H.R. 2101.
CONGRESSIONAL RECORD, Vol. 155 (2009):
May 6, 7, considered and passed Senate.
May 13, considered and passed House, amended, in lieu of
H.R. 2101 pursuant to H. Res. 432.
May 20, Senate agreed to conference report.
May 21, House agreed to conference report.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2009):
May 22, Presidential remarks.