H.R. 3586 (103rd): Defense Acquisition Reform Act of 1993

103rd Congress, 1993–1994. Text as of Nov 20, 1993 (Introduced).

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HR 3586 IH

103d CONGRESS

1st Session

H. R. 3586

To amend laws relating to defense acquisition, including provisions relating to the formation of contracts, contract administration and major system management, procurement of information management systems and commercial activity contracting, the small purchase threshold, intellectual property rights, defense trade and cooperation, and the acquisition of commercial items.

IN THE HOUSE OF REPRESENTATIVES

November 20, 1993

Mr. BILBRAY introduced the following bill; which was referred jointly to the Committees on Armed Services, Government Operations, and Small Business


A BILL

To amend laws relating to defense acquisition, including provisions relating to the formation of contracts, contract administration and major system management, procurement of information management systems and commercial activity contracting, the small purchase threshold, intellectual property rights, defense trade and cooperation, and the acquisition of commercial items.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Defense Acquisition Reform Act of 1993’.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

      Sec. 1. Short title.

      Sec. 2. Table of contents.

TITLE I--CONTRACT FORMATION

Subtitle A--Congressional Policy, Definitions, and Applicability

      Sec. 101. Congressional defense procurement policy.

      Sec. 102. Definitions.

Subtitle B--Competitive Statutes

      Sec. 111. Contracts: planning, solicitation, evaluation, and award procedures.

      Sec. 112. Kinds of contracts.

      Sec. 113. Encouragement of competition and cost savings.

      Sec. 114. Advocates for competition.

      Sec. 115. Preference for nondevelopmental items.

Subtitle C--Truth in Negotiations Act

      Sec. 121. Stabilization of dollar threshold of applicability.

      Sec. 122. Exceptions to cost or pricing data requirements.

      Sec. 123. Limitation on authority to require a submission not otherwise required.

      Sec. 124. Additional special rules for commercial items.

      Sec. 125. Right of United States to examine contractor records.

      Sec. 126. Required regulations.

      Sec. 127. Consistency of time references.

      Sec. 128. Repeal of superseded provision.

Subtitle D--Research and Development

      Sec. 131. Delegation of contracting authority.

      Sec. 132. Research projects.

      Sec. 133. Awards of grants and contracts to colleges and universities: requirement of competition.

      Sec. 134. Elimination of inflexible terminology regarding coordination and communication of defense research activities.

      Sec. 135. Cooperative agreements and other transactions.

      Sec. 136. Contracts for research.

Subtitle E--Procurement Protests

      Sec. 141. Sense of Congress on single forum for review of contract protests.

      Sec. 142. Review of protests; effect on contracts pending decision.

      Sec. 143. Decisions on protests.

      Sec. 144. Regulations; authority of Comptroller General to verify assertions.

      Sec. 145. Nonexclusivity of remedies; matters included in agency record.

Subtitle F--Other Related Statutes

      Sec. 151. Delegation.

      Sec. 152. Determinations and decisions.

      Sec. 153. Undefinitized contractual actions: restrictions.

      Sec. 154. Production special tooling and production special test equipment: contract terms and conditions.

      Sec. 155. Contracts: regulations for bids.

      Sec. 156. Supplies: identification of supplier and sources.

TITLE II--CONTRACT ADMINISTRATION

      Sec. 201. Contract payments.

      Sec. 202. Cost principles.

      Sec. 203. Consolidation and revision of authority to examine records of contractors.

      Sec. 204. Administration of contract provisions relating to price, delivery, and product quality.

TITLE III--MAJOR SYSTEMS AND COMMERCIAL ACTIVITIES

Subtitle A--Major Systems

      Sec. 301. Selected acquisition reports; unit cost reports.

      Sec. 302. Unit cost reports.

      Sec. 303. Independent cost estimates; operational manpower requirements.

      Sec. 304. Enhanced program stability.

      Sec. 305. Major programs: competitive prototyping.

      Sec. 306. Major programs: competitive alternative sources.

Subtitle B--Testing Statutes

      Sec. 311. Repeal of testing requirement for wheeled or tracked vehicles.

      Sec. 312. Major systems and munitions programs: survivability and lethality testing.

      Sec. 313. Operational test and evaluation of defense acquisition programs.

      Sec. 314. Low-rate initial production of new systems.

Subtitle C--DOD Commercial and Industrial Activities

      Sec. 321. Factories and arsenals: manufacture at.

Subtitle D--Industrial Base and Manufacturing Technology Laws

      Sec. 331. Policy objectives relating to defense international trade.

Subtitle E--Miscellaneous

      Sec. 341. Obligation of funds: limitation.

      Sec. 342. Repeal of limitation on length of contracts.

TITLE IV--SMALL PURCHASE PROCEDURES AND SMALL BUSINESS PROVISIONS

      Sec. 401. Use of small purchase procedures for procurements conducted through Federal acquisition computer network system; implementation of system.

      Sec. 402. Small business reservation.

      Sec. 403. Exemptions for contracts not in excess of the small purchase threshold.

      Sec. 404. Small business amendments.

      Sec. 405. Notification of small business concerns in locality of procuring agency.

TITLE V--INTELLECTUAL PROPERTY

      Sec. 501. Department of Defense acquisition of intellectural property rights.

TITLE VI--STANDARDS OF CONDUCT

Subtitle A--Ethics Provisions

      Sec. 601. Amendments to Office of Federal Procurement Policy Act.

      Sec. 602. Repeal of superseded and obsolete laws.

Subtitle B--Additional Amendments

      Sec. 611. Contracting functions performed by Federal personnel.

      Sec. 612. Repeal of executed requirement for study and report.

      Sec. 613. Waiting period for significant changes proposed for acquisition regulations.

TITLE VII--DEFENSE TRADE AND COOPERATION

      Sec. 701. International cooperative agreements.

      Sec. 702. Acquisition, cross-servicing agreements, and standardization.

TITLE VIII--COMMERCIAL ITEM ACQUISITION

      Sec. 801. Procurement of commercial and nondevelopmental items.

TITLE IX--EFFECTIVE DATE

      Sec. 901. Effective date.

TITLE I--CONTRACT FORMATION

Subtitle A--Congressional Policy, Definitions, and Applicability

SEC. 101. CONGRESSIONAL DEFENSE PROCUREMENT POLICY.

    Section 2301 of title 10, United States Code, is amended to read as follows:

‘Sec. 2301. Congressional defense procurement policy

    ‘(a) The Congress finds that in order to ensure national defense preparedness; conserve fiscal resources; enhance science and technology, research and development, and production capability; provide for continued development and preservation of an efficient and responsive defense industrial base; and ensure the financial and ethical integrity of defense procurement programs, it is in the interest of the United States that property and services be acquired for the Department of Defense in the most timely, economic, and efficient manner consistent with achieving an optimum balance among efficient processes, full and open access to the procurement system, and sound implementation of socioeconomic policies. It is therefore the policy of Congress that--

      ‘(1) full and open competitive procedures shall be used by the Department of Defense in accordance with the requirements of this chapter;

      ‘(2) to the maximum extent practicable, the Department of Defense shall acquire commercial items to meet its needs and shall require prime contractors and subcontractors, at all levels, which furnish other than commercial items, to incorporate to the maximum extent practicable commercial items as components of items being supplied to the Department;

      ‘(3) when commercial items and components are not available, practicable, or cost effective, the Department of Defense shall acquire, and shall require prime contractors and subcontractors to incorporate, nondevelopmental items and components to the maximum extent practicable;

      ‘(4) property and services for the Department of Defense may be acquired by any kind of contract, other than cost-plus-a-percentage-of-cost contracts, but including multiyear contracts, that will promote the interest of the United States and will provide for appropriate allocation of risk between the Government and the contractor with due regard to the nature of the property or services to be acquired;

      ‘(5) contracts, when appropriate, shall provide incentives to contractors to improve productivity through investment in capital facilities, equipment, flexible manufacturing processes, and advanced and dual-use technology;

      ‘(6) contracts for advance procurement of components, parts, and materials necessary for manufacture or for logistics support of a weapon system should, if practicable, be entered into in a manner to achieve economic-lot purchases and more efficient production rates;

      ‘(7) procurement protests and disputes be fairly and expeditiously resolved through uniform interpretation of relevant laws and regulations;

      ‘(8) the head of an agency shall use advance procurement planning and market research and develop contract requirements in such a manner as is necessary to obtain full and open competition with due regard to the nature of the property or services to be acquired; but may restrict competitions to suppliers of commercial items to foster accomplishment of the above objective; and

      ‘(9) the head of an agency shall develop and maintain an acquisition career management program to ensure a professional acquisition work force in accordance with the requirements of chapter 87 of this title.

    ‘(b) Further, it is the policy of Congress that procurement policies and procedures for the agencies named in section 2303 of this title shall, in accordance with the requirements of this title--

      ‘(1) be issued in accordance with and conform to the requirements of sections 22 and 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 418b and 421);

      ‘(2) promote and implement the Congressional policies in subsection (a) of this section and section 2 of the Office of Federal Procurement Policy Act (41 U.S.C. 401);

      ‘(3) be implemented to support the requirements of such agencies in time of war or national emergency as well as in peacetime;

      ‘(4) promote responsiveness of the procurement system to agency needs by--

        ‘(A) simplifying and streamlining procurement processes; and

        ‘(B) providing incentives to encourage contractors to take actions and make recommendations that would reduce the costs of property or services to be acquired;

      ‘(5) facilitate the acquisition of commercial items and commercial components at or based on commercial market prices, without requiring contractors to change their business practices; and

      ‘(6) promote the acquisition and use of commercial items, commercial components, and nondevelopmental items by requiring descriptions of agency requirements, whenever practicable, in terms of functions to be performed or performance required.

    ‘(c) Further, it is the policy of Congress that 20 percent of the purchases and contracts entered into under this chapter be placed with small business concerns.

    ‘(d) It is also the policy of Congress that qualified nonprofit agencies for the blind or severely handicapped (as defined in section 2410d(b) of this title) shall be afforded the maximum practicable opportunity to provide approved commodities and services (as defined in such section) as subcontractors and suppliers under contracts awarded by the Department of Defense.’.

SEC. 102. DEFINITIONS.

    Section 2302 of title 10, United States Code, is amended--

      (1) by striking out paragraph (3) and inserting in lieu thereof the following:

      ‘(3) The terms ‘procurement’, ‘procurement system’, ‘standards’, ‘full and open competition’, ‘responsible source’, ‘technical data’, and ‘major system’ have the meanings provided such terms by section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).’;

      (2) by striking out paragraph (4) and inserting in lieu thereof the following:

      ‘(4) The term ‘small purchase threshold’ has the meaning provided that term by section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)).’;

      (3) by striking out paragraph (5) and inserting in lieu thereof the following:

      ‘(5) The term ‘nondevelopmental item’ means any item of supply that is not a commercial item but which is--

        ‘(A) previously developed and in use by a department or agency of the United States, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement;

        ‘(B) previously developed and requires only minor modification in order to meet the requirements of the procuring agency; or

        ‘(C) currently being produced but not yet in use.’; and

      (4) by striking out paragraph (7) and inserting in lieu thereof the following:

      ‘(7)(A) The term ‘commercial item’ means--

        ‘(i) property other than real property, or a combination of such property and related incidental services of the type customarily combined and sold, leased, or licensed in combination, that--

          ‘(I) has been sold, leased, or licensed to the general public;

          ‘(II) has not been sold, leased, or licensed to the general public, but has been offered for sale, lease, or license to the general public; or

          ‘(III) is not yet available in the commercial marketplace, but will be available for commercial delivery in a reasonable period of time; and

        ‘(ii) services used to support property and combinations of property and services described in clause (i), whether such services are procured with the property or combination of property and services or under separate contract, if such services are or will be offered contemporaneously to the general public under similar terms and conditions.

      ‘(B) With respect to a specific solicitation, an item meeting the criteria set forth in subparagraph (A) if unmodified will be deemed to be a commercial item when modified for sale to the Government if the modifications required to meet Government requirements--

        ‘(i) are modifications of the type customarily provided in the commercial marketplace; or

        ‘(ii) would not significantly alter the nongovernmental function or purpose of the item in order to meet the requirements or specifications of the procuring agency.’.

Subtitle B--Competitive Statutes

SEC. 111. CONTRACTS: PLANNING, SOLICITATION, EVALUATION, AND AWARD PROCEDURES.

    Section 2305 of title 10, United States Code, is amended--

      (1) in subsection (a)(2), by striking out ‘(other than for small purchases)’ in the first sentence and inserting in lieu thereof ‘(estimated to be in excess of the small purchase threshold)’;

      (2) in subsection (a), by redesignating paragraph (3) as paragraph (4);

      (3) in subsection (a), by adding after paragraph (2) the following new paragraph (3):

    ‘(3) The head of an agency, in issuing a solicitation for a contract to be awarded using sealed bid procedures, shall not include in such solicitation a clause providing for the evaluation of prices under the contract for options to purchase additional supplies or services under the contract unless the head of the agency has determined that there is a reasonable likelihood that the options will be exercised.’;

      (4) by adding at the end of subsection (b)(4)(B) the following: ‘The regulations implementing this chapter shall--

      ‘(i) establish the criteria for determining whether an unsuccessful offeror is entitled to a debriefing;

      ‘(ii) provide that any required debriefing shall be conducted to the maximum extent practicable within 15 calendar days after the date of award; and

      ‘(iii) provide that any required debriefing contain information on the strengths and weaknesses of that offeror’s proposal.’; and

      (5) in subsection (b), by redesignating paragraph (5) as paragraph (7) and inserting after paragraph (4) the following new paragraphs:

    ‘(5) Where a protest is filed pursuant to the procedures in subchapter V of chapter 35 of title 31, United States Code (31 U.S.C. 3551 et seq.) and where an actual or prospective offeror so requests, a file of the protest shall be established by the contracting activity and reasonable access shall be provided to actual or prospective offerors. This file should contain such information as would ordinarily be releasable under the section 552 of title 5, United States Code (commonly referred to as the ‘Freedom of Information Act’).

    ‘(6) If a protest is filed and if the head of the agency determines that a solicitation, proposed award, or award does not comply with a statute or regulation, the head of the agency may take any action which the agency is authorized to take under subparagraphs (A) through (F) of section 3554(b)(1) of title 31, United States Code.’.

SEC. 112. KINDS OF CONTRACTS.

    Section 2306 of title 10, United States Code, is amended--

      (1) by striking out the first sentence of subsection (b) and inserting in lieu thereof the following: ‘Each contract in an amount in excess of the small purchase threshold awarded under this chapter after using noncompetitive procedures shall contain a warranty that the contractor has employed or retained no person or selling agency to solicit or obtain the contract under an understanding or agreement for a commission, percentage, brokerage, or contingent fee, except a bona fide employee or established commercial or selling agency maintained by the contractor to obtain business.’;

      (2) by striking out subsections (c), (d), and (f);

      (3) by redesignating subsection (e) as subsection (c); and

      (4) by redesignating subsections (g) and (h) as subsections (d) and (e), respectively.

SEC. 113. ENCOURAGEMENT OF COMPETITION AND COST SAVINGS.

    (a) REPEAL- Section 2317 of title 10, United States Code, is hereby repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 137 of such title is amended by striking out the item relating to section 2317.

SEC. 114. ADVOCATES FOR COMPETITION.

    Section 2318 of title 10, United States Code, is amended by striking out subsection (c).

SEC. 115. PREFERENCE FOR NONDEVELOPMENTAL ITEMS.

    (a) REPEAL- Section 2325 of title 10, United States Code, is hereby repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 137 of such title is amended by striking out the item relating to section 2325.

Subtitle C--Truth in Negotiations Act

SEC. 121. STABILIZATION OF DOLLAR THRESHOLD OF APPLICABILITY.

    Section 2306a(a)(1)(A) of title 10, United States Code, is amended--

      (1) in clause (i), by striking out ‘and before January 1, 1996,’; and

      (2) in clause (ii), by striking out ‘or after December 31, 1995,’.

SEC. 122. EXCEPTIONS TO COST OR PRICING DATA REQUIREMENTS.

    Section 2306a(b) of title 10, United States Code, is amended to read as follows:

    ‘(b) EXCEPTIONS- (1) This section need not be applied to a contract or subcontract--

      ‘(A) for which the price agreed upon is based on--

        ‘(i) adequate price competition;

        ‘(ii) established catalog or market prices of commercial items or of services regularly used for other than Government purposes, as the case may be, that are sold in substantial quantities to the general public; or

        ‘(iii) prices set by law or regulation; or

      ‘(B) in an exceptional case when the head of the agency determines that the requirements of this section may be waived and states in writing the reasons for such determination.

    ‘(2) This section need not be applied to a modification of a contract or subcontract if--

      ‘(A) the contract or subcontract being modified is one to which this section need not be applied by reason of clause (i) or (ii) of paragraph (1)(A); and

      ‘(B) the modification would not change the contract or subcontract, as the case may be, from a contract or subcontract for the acquisition of a commercial item to a contract or subcontract for the acquisition of a noncommercial item.’.

SEC. 123. LIMITATION ON AUTHORITY TO REQUIRE A SUBMISSION NOT OTHERWISE REQUIRED.

    Section 2306a(c) of title 10, United States Code, is amended by striking out ‘by subsection (a), such data may nevertheless be required to be submitted by the head of the agency if’ and inserting in lieu thereof ‘by reason of subsection (b), submission of such data may not be required unless’.

SEC. 124. ADDITIONAL SPECIAL RULES FOR COMMERCIAL ITEMS.

    Section 2306a of title 10, United States Code, is amended--

      (1) by redesignating subsections (d), (e), (f), and (g) as subsections (e), (f), (g), and (i), respectively; and

      (2) by inserting after subsection (c) the following new subsection (d):

    ‘(d) ADDITIONAL EXCEPTION REGARDING COMMERCIAL ITEMS- (1) To the maximum extent practicable, the head of an agency shall--

      ‘(A) conduct procurements of commercial items on a competitive basis; and

      ‘(B) exercise the authority provided in subsection (b)(1)(A) to exempt the contracts and subcontracts under such procurements from the requirements of subsection (a).

    ‘(2) In any case in which it is not practicable to conduct a procurement of a commercial item on a competitive basis and the procurement is not covered by an exception in subsection (b), the contracting officer shall nonetheless exempt a contract or subcontract under the procurement from the requirements of subsection (a) if--

      ‘(A) in accordance with regulations implementing this paragraph, the offeror, contractor, or subcontractor, as the case may be, provides the contracting officer with information on the price charged by such offeror, contractor, or subcontractor for the same or similar products in the commercial marketplace; and

      ‘(B) the contracting officer determines in writing that the information provided is adequate for evaluating the reasonableness of the price of the contract or subcontract.

    ‘(3)(A) The Government shall be entitled to a reduction in price and the return of any overpayment, with interest, if an offeror, contractor, or subcontractor provides materially inaccurate or misleading information to the contracting officer pursuant to paragraph (2).

    ‘(B) Nothing in subparagraph (A) is intended to preclude the head of an agency from negotiating any contract clause that provides additional price adjustment authority for the protection of the Government’s interest in specific types of contracts, including multiple ordering agreements.

    ‘(4)(A) The head of an agency shall have the right to examine all information provided by an offeror, contractor, or subcontractor pursuant to paragraph (2) and all books and records of such offeror, contractor, or subcontractor that directly relate to the information provided in order to determine whether such information is materially inaccurate or misleading.

    ‘(B) The right under subparagraph (A) shall expire 1 year after the date of award of the contract, or 1 year after the date of the modification of the contract, with respect to which the information was provided.’.

SEC. 125. RIGHT OF UNITED STATES TO EXAMINE CONTRACTOR RECORDS.

    Section 2306a of title 10, United States Code, is amended by striking out subsection (g), as redesignated by section 124(1), and inserting in lieu thereof the following:

    ‘(g) RIGHT OF UNITED STATES TO EXAMINE CONTRACTOR RECORDS- For the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted by this section, the head of an agency shall have the rights provided by section 2313 of this title.’.

SEC. 126. REQUIRED REGULATIONS.

    Section 2306a of title 10, United States Code, as amended by sections 124 and 125, is further amended by inserting after subsection (g) the following new subsection:

    ‘(h) REQUIRED REGULATIONS- (1) The Secretary of Defense shall prescribe regulations identifying the type of procurements for which contracting officers should consider requiring the submission of certified cost or pricing data under this section.

    ‘(2) The Secretary also shall prescribe regulations concerning the types of information that offerors must submit for a contracting officer to consider in determining whether the price of a procurement to the Government is fair and reasonable when certified cost or pricing data are not required to be submitted under this section because the price of the procurement to the United States is not expected to exceed $500,000. Such information, at a minimum, shall include appropriate information on the prices at which such offeror has previously sold the same or similar products.’.

SEC. 127. CONSISTENCY OF TIME REFERENCES.

    Section 2306a of title 10, United States Code, as amended by sections 124, 125, and 126, is further amended--

      (1) in subparagraphs (A)(ii) and (B)(ii) of subsection (e)(4), by inserting ‘or, if applicable consistent with paragraph (1)(B), another date agreed upon between the parties’ after ‘(or price of the modification)’; and

      (2) in subsection (i), by inserting ‘or, if applicable consistent with subsection (d)(1)(B), another date agreed upon between the parties’ after ‘(or the price of a contract modification)’.

SEC. 128. REPEAL OF SUPERSEDED PROVISION.

    Subsection (c) of section 803 of Public Law 101-510 (10 U.S.C. 2306a note) is repealed.

Subtitle D--Research and Development

SEC. 131. DELEGATION OF CONTRACTING AUTHORITY.

    Section 2356 of title 10, United States Code, is amended to read as follows:

‘Sec. 2356. Contracts: delegations

    ‘(a) AUTHORITY- The Secretary of a military department may delegate any authority under section 1584, 2353, or 2354 of this title to--

      ‘(1) the Under Secretary of his department;

      ‘(2) an Assistant Secretary of his department;

      ‘(3) a Deputy Assistant Secretary of his department; or

      ‘(4) except as provided in subsection (b), the chief, and one assistant to the chief, of any technical service, bureau, or office.

    ‘(b) LIMITATION- The authority of the Secretary of a military department under section 2353(b)(3) of this title may not be delegated to a person described in subsection (a)(4).’.

SEC. 132. RESEARCH PROJECTS.

    (a) AUTHORITY TO CONDUCT BASIC, ADVANCED, AND APPLIED RESEARCH- Section 2358 of title 10, United States Code, is amended to read as follows:

‘Sec. 2358. Research projects

    ‘(a) AUTHORITY- The Secretary of Defense or the Secretary of a military department may engage in basic, advanced, and applied research and development projects that--

      ‘(1) are necessary to the responsibilities of such Secretary’s department in the field of basic, advanced, and applied research and development; and

      ‘(2) either--

        ‘(A) relate to weapons systems and other military needs; or

        ‘(B) are of potential interest to such department.

    ‘(b) AUTHORIZED MEANS- The Secretary of Defense or the Secretary of a military department may perform research and development projects--

      ‘(1) by contract, cooperative agreement, or other transaction with, or by grant to, educational or research institutions, private businesses, or other agencies of the United States;

      ‘(2) by using employees and consultants of the Department of Defense; or

      ‘(3) through one or more of the military departments.

    ‘(c) REQUIREMENT OF POTENTIAL MILITARY INTEREST- Funds appropriated to the Department of Defense or to a military department may not be used to finance any research project or study unless the project or study is, in the opinion of the Secretary of Defense or the Secretary of that military department, respectively, of potential interest to the Department of Defense or to such military department, respectively.’.

    (b) AUTHORITY RELATED TO ADVANCED RESEARCH PROJECTS-

      (1) REPEAL OF REDUNDANT AUTHORITY- Section 2371 of such title is amended--

        (A) by striking out subsection (a);

        (B) by redesignating subsections (b), (c), (d), (e), (f), and (g) as subsections (a), (b), (c), (d), (e), and (f), respectively;

        (C) in subsection (a), as redesignated by subparagraph (B)--

          (i) in paragraph (1), by striking out ‘subsection (a)’ and inserting in lieu thereof ‘section 2358 of this title’; and

          (ii) in paragraph (2), by striking out ‘subsection (e)’ and inserting in lieu thereof ‘subsection (d)’;

        (D) in subsection (d), as redesignated by subparagraph (B), by striking out ‘subsection (a)’ and inserting in lieu thereof ‘section 2358 of this title’; and

        (E) in subsection (e), as redesignated by subparagraph (B)--

          (i) in paragraph (4), by striking out ‘subsection (b)’ and inserting in lieu thereof ‘subsection (a)’; and

          (ii) in paragraph (5), by striking out ‘subsection (e)’ and inserting in lieu thereof ‘subsection (d)’.

      (2) CONSISTENCY OF TERMINOLOGY- Such section, as amended by paragraph (1), is further amended--

        (A) in subsection (c)(1), by inserting ‘and development’ after ‘research’ both places it appears;

        (B) in subsections (d) and (e)(3), by striking out ‘advanced research’ and inserting in lieu thereof ‘research and development’; and

        (C) in subsection (e)(1), by striking out ‘advanced research is’ and inserting in lieu thereof ‘research and development are’.

    (c) REDUNDANT AND OBSOLETE AUTHORITY FOR THE ARMY-

      (1) REPEAL- Section 4503 of title 10, United States Code, is repealed.

      (2) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 431 of such title is amended by striking out the item relating to section 4503.

    (d) REDUNDANT AND OBSOLETE AUTHORITY FOR THE AIR FORCE-

      (1) REPEAL- Section 9503 of title 10, United States Code, is repealed.

      (2) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 931 of such title is amended by striking out the item relating to section 9503.

SEC. 133. AWARDS OF GRANTS AND CONTRACTS TO COLLEGES AND UNIVERSITIES: REQUIREMENT OF COMPETITION.

    (a) REPEAL- Subsection (c) of section 2361 of title 10, United States Code, is repealed.

    (b) AMENDMENT- Section 2361 of title 10, United States Code, is amended by inserting ‘or nonprofit organization other than a federally funded research and development center (FFRDC)’ after ‘college or university’ in each place it appears in subsections (a) and (b).

SEC. 134. ELIMINATION OF INFLEXIBLE TERMINOLOGY REGARDING COORDINATION AND COMMUNICATION OF DEFENSE RESEARCH ACTIVITIES.

    Section 2364 of title 10, United States Code, is amended--

      (1) in subsection (b)(5), by striking out ‘milestone 0, milestone I, and milestone II decisions’ and inserting in lieu thereof ‘acquisition program decisions’; and

      (2) in subsection (c), by striking out paragraphs (2), (3), and (4) and inserting in lieu thereof the following:

      ‘(2) The term ‘acquisition program decisions’ has the meaning given such term in regulations prescribed by the Secretary of Defense for the purposes of this section.’.

SEC. 135. COOPERATIVE AGREEMENTS AND OTHER TRANSACTIONS.

    (a) NONPROCUREMENT AGREEMENTS- Section 2371 of title 10, United States Code, is amended as follows:

      (1) Subsection (a) is amended by striking out ‘cooperative agreements and other transactions’ and inserting in lieu thereof ‘nonprocurement agreements’.

      (2) Subsection (b)(1) is amended by striking out ‘Cooperative agreements and other transactions’ and inserting in lieu thereof ‘Nonprocurement agreements’.

      (3) Subsection (d) is amended by striking out ‘cooperative agreement or other transaction’ each place it appears and inserting in lieu thereof ‘nonprocurement agreement’.

      (4) Subsection (e) is amended by striking out ‘cooperative agreements and other transactions’ and inserting in lieu thereof ‘nonprocurement agreements’.

      (5) Subsection (f) is amended--

        (A) in the matter before paragraph (1)--

          (i) by striking out ‘cooperative agreements and other transactions (other than contracts and grants)’ and inserting in lieu thereof ‘nonprocurement agreements’; and

          (ii) by striking out ‘cooperative agreement and transaction’ and inserting in lieu thereof ‘nonprocurement agreement’;

        (B) in paragraph (1)--

          (i) by striking out ‘cooperative agreement or other transaction (as the case may be)’ and inserting in lieu thereof ‘nonprocurement agreement’; and

          (ii) by striking out ‘agreement or transaction.’ and inserting in lieu thereof ‘agreement.’; and

        (C) in paragraph (4), by striking out ‘cooperative agreement or other transaction’ and inserting in lieu thereof ‘nonprocurement agreement’.

    (b) DEFINITION- Section 2371 of such title is further amended by adding at the end the following new subsection:

    ‘(h) DEFINITION- In this section, the term ‘nonprocurement agreement’ means an agreement other than--

      ‘(1) a procurement contract, grant, or cooperative agreement, as those terms are used in sections 6301 through 6308 of title 31; and

      ‘(2) a cooperative research and development agreement (CRDA), as defined in section 12 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a).’.

    (c) OTHER DEFENSE RESEARCH AND DEVELOPMENT AGENCIES- Subsections (a) and (g) of section 2371 of such title are each amended by inserting ‘and other defense research and development agencies’ after ‘Defense Advanced Research Projects Agency’.

    (d) SECTION HEADING AMENDMENT- (1) The heading of section 2371 of such title is amended to read as follows:

‘Sec. 2371. Advanced research projects: nonprocurement agreements’.

    (2) The table of sections at the beginning of chapter 139 of such title is amended by striking out the item relating to section 2371 and inserting in lieu thereof the following:

      ‘2371. Advanced research projects: nonprocurement agreements.’.

SEC. 136. CONTRACTS FOR RESEARCH.

    (a) REPEAL- Section 7522 of title 10, United States Code, is hereby repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 645 of such title is amended by striking out the item related to section 7522.

Subtitle E--Procurement Protests

SEC. 141. SENSE OF CONGRESS ON SINGLE FORUM FOR REVIEW OF CONTRACT PROTESTS.

    It is the sense of Congress that there should be a single forum, in the Office of the Comptroller General in the General Accounting Office, to review government contracting protests.

SEC. 142. REVIEW OF PROTESTS; EFFECT ON CONTRACTS PENDING DECISION.

    Section 3553 of title 31, United States Code, is amended--

      (1) in subsection (b)(1), by striking out ‘working day’ and inserting in lieu thereof ‘calender day from the date’;

      (2) in subsection (b)(2)(A), by striking out ‘25 working days’ and inserting in lieu thereof ‘25 calender days’;

      (3) in subsection (b)(2)(C), by striking out ‘10 working days’ and inserting in lieu thereof ‘25 calendar days’;

      (4) by striking out ‘days thereafter’ in subsection (c)(3) and inserting in lieu thereof ‘calender days from the date of the finding’;

      (5) by striking out paragraph (1) of subsection (d) and inserting in lieu thereof the following:

      ‘(1) If a Federal agency receives notice of a protest under this section after the contract has been awarded but (A) within 10 calendar days after the date of the contract award, or (B) within five calendar days from the debriefing date offered to an unsuccessful offeror for any requested and required debriefing (provided that the unsuccessful offeror requested the debriefing in writing within three calendar days after the contract award), whichever is later, the Federal agency (except as provided under paragraph (2)) shall, upon receipt of that notice, immediately direct the contractor to cease performance under the contract and to suspend any related activities that may result in additional obligations being incurred by the United States under that contract. Performance of the contract may not be resumed while the protest is pending.’; and

      (6) by striking out subsection (f) and inserting in lieu thereof the following:

    ‘(f)(1) Within such deadlines as the Comptroller General prescribes and subject to any order made under paragraph (2), upon request each Federal agency shall provide to an interested party any document relevant to a protested procurement action (including the report required by subsection (b)(2)) that would not give that party a competitive advantage and that the party is otherwise authorized by law to receive.

    ‘(2) The Comptroller General, under the procedures established pursuant to section 3555 of this title, may make an appropriate protective order specifying that, notwithstanding any other provision of law--

      ‘(A) access to documents or information, including any Federal agency documents or information, may be had on specific terms and conditions;

      ‘(B) procurement sensitive, trade secret, or other proprietary and confidential research, development, or commercial information may not be disclosed or may be disclosed only in a designated way; and

      ‘(C) any hearing shall be conducted with no one present except persons designated by the Comptroller General.’.

SEC. 143. DECISIONS ON PROTESTS.

    Section 3554 of title 31, United States Code, is amended--

      (1) in subsection (a)(1), by striking out ‘90 working’ and inserting in lieu thereof ‘120 calendar’;

      (2) in subsection (a)(2), by striking out ‘45’ and inserting in lieu thereof ‘60 calendar’;

      (3) in subsection (a), by redesignating paragraph (3) as paragraph (4) and inserting after paragraph (2) the following new paragraph (3):

      ‘(3) Amendments to protests which add new grounds of protest should be resolved, to the maximum extent practicable, within the time limits established under paragraph (1) of this subsection for the initial protest. If amended protests cannot be resolved within such time limit, the Comptroller General may resolve the amended protest through the express option under paragraph (2) of this subsection.’;

      (4) by adding at the end of subsection (a) the following new paragraph:

      ‘(5) If the Comptroller General expressly finds that a protest or a portion of a protest is frivolous or has not been brought or pursued in good faith, the protester or other interested party who joins the protest shall be liable to the United States for payment of, and the Comptroller General shall order the protester or other interested party to pay, all or that portion of the United States costs, for which such a finding is made, of reviewing the protest, including the fees and other expenses (as defined in section 2412(d)(2)(A) of title 28) incurred by the United States in defending the protest, unless (1) special circumstances would make such payment unjust, or (2) the protester obtains documents or other information for the first time, after the protest is filed with the Comptroller General, that establishes that the protest or a portion of the protest is frivolous or has not been brought in good faith, and the protester then promptly withdraws the protest or portion of the protest.’;

      (5) in subsection (c)(1)(A) by adding ‘and consultant and expert witness fees’ after ‘attorneys’ fees’; and

      (6) in subsection (e)(2) by adding at the end the following: ‘The report shall also describe each instance where a final decision was not rendered within 120 calendar days.’.

SEC. 144. REGULATIONS; AUTHORITY OF COMPTROLLER GENERAL TO VERIFY ASSERTIONS.

    Section 3555 of title 31, United States Code, is amended to read as follows:

‘Sec. 3555. Regulations; authority of Comptroller General to verify assertions

    ‘(a) The Comptroller General shall prescribe such procedures as may be necessary to the expeditious decision of protests under this subchapter, including procedures for accelerated resolution of protests under the express option authorized by section 3554(a)(2) of this title. Such procedures shall provide that the protest process may not be delayed by the failure of a party to make a filing within the time provided for the filing.

    ‘(b) In computing any period of time prescribed or allowed by this subchapter, the procedures shall provide that the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, a Sunday, or a legal holiday, or, when the act to be done is the filing of a paper at the General Accounting Office or a Federal agency, a day on which weather or other conditions have made the General Accounting Office or Federal agency inaccessible, in which event the period runs until the end of the next day that is not one of the previously mentioned days.

    ‘(c) The procedures may provide for electronic filing and dissemination of documents and information required under this subchapter and in so providing shall consider the ability of all parties to achieve electronic access to such documents and records.

    ‘(d) The procedures shall address the implementation of the provisions for payment of costs under section 3554(f), including the composition, proof, and calculation of such costs, the special circumstances that make such payment unjust, and what constitutes prompt withdrawal of the protest.

    ‘(e) The Comptroller General may use any authority available under Chapter 7 of this title and this chapter to verify assertions made by parties in protests under this subchapter.’.

SEC. 145. NONEXCLUSIVITY OF REMEDIES; MATTERS INCLUDED IN AGENCY RECORD.

    The first sentence of section 3556 of title 31, United States Code, is amended to read as follows: ‘This subchapter does not give the Comptroller General exclusive jurisdiction over protests, and nothing contained in this subchapter shall affect the right of any interested party to file a protest with the contracting agency or to file an action in the United States Court of Federal Claims.’.

Subtitle F--Other Related Statutes

SEC. 151. DELEGATION.

    (a) AMENDMENT OF TITLE 10- Section 2311 of title 10, United States Code, is amended to read as follows:

‘Sec. 2311. Delegation

    ‘(a) Unless expressly prohibited by law, the head of an agency may delegate, subject to his direction, to any other officer or official of that agency, any power under this chapter.

    ‘(b) To facilitate the procurement of property and services covered by this chapter by each agency named in section 2303 of this title for any other agency, and to facilitate joint procurement by those agencies--

      ‘(1) the head of an agency may, within his agency, delegate functions and assign responsibilities relating to procurement;

      ‘(2) the heads of two or more agencies may by agreement delegate procurement functions and assign procurement responsibilities from one agency to another of those agencies or to an officer or civilian employee of another of those agencies; and

      ‘(3) the heads of two or more agencies may create joint or combined offices to exercise procurement functions and responsibilities.

    ‘(c)(1) The Secretary of Defense shall prescribe regulations that prohibit each military department participating in a joint acquisition program approved by the Under Secretary of Defense for Acquisition from terminating or substantially reducing its participation in such program without the approval of the Under Secretary.

    ‘(2) The regulations shall include the following provisions:

      ‘(A) A requirement that, before any such termination or substantial reduction in participation is approved, the proposed termination or reduction be reviewed by the Joint Requirements Oversight Council of the Department of Defense.

      ‘(B) A provision that authorizes the Under Secretary of Defense for Acquisition to require a military department approved for termination or substantial reduction in participation in a joint acquisition program to continue to provide some or all of the funding necessary for the acquisition program to be continued in an efficient manner.’.

    (b) CONFORMING REPEAL- (1) Section 2308 of title 10, United States Code, is repealed.

    (2) The table of sections at the beginning of chapter 137 of such title is amended by striking out the item related to section 2308.

SEC. 152. DETERMINATIONS AND DECISIONS.

    Section 2310 of title 10, United States Code, is amended to read as follows:

‘Sec. 2310. Determinations and decisions

    ‘Determinations and decisions required to be made under this chapter by the head of an agency may be made for an individual purchase or contract or for a class of purchases or contracts except when expressly prohibited under this title. Such determinations or decisions are final.’.

SEC. 153. UNDEFINITIZED CONTRACTUAL ACTIONS: RESTRICTIONS.

    Section 2326 of title 10, United States Code, is amended--

      (1) by striking out ‘AND EXPENDITURES’ in the heading of subsection (b);

      (2) by striking out ‘or expended’ in subsection (b)(1)(B);

      (3) by striking out ‘expend’ in subsection (b)(2) and inserting in lieu thereof ‘obligate’;

      (4) by striking out ‘expended’ and ‘expend’ and inserting in lieu thereof ‘obligated’ and ‘obligate’, respectively, in subsection (b)(3);

      (5) by redesignating paragraph (4) in subsection (b) as paragraph (5); and

      (6) by inserting after paragraph (3) in subsection (b) the following new paragraph:

      ‘(4) The provisions of this subsection may be waived if the head of the agency determines that waiver is necessary in support of contingency operations, as defined in section 101(a)(13) of this title, or is otherwise in the best interests of the United States.’.

SEC. 154. PRODUCTION SPECIAL TOOLING AND PRODUCTION SPECIAL TEST EQUIPMENT: CONTRACT TERMS AND CONDITIONS.

    (a) REPEAL- Section 2329 of title 10, United States Code, is hereby repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 137 of such title is amended by striking out the item related to section 2329.

SEC. 155. CONTRACTS: REGULATIONS FOR BIDS.

    Section 2381 of title 10, United States Code, is amended in subsection (a) by striking out ‘The’ and inserting in lieu thereof ‘The Secretary of Defense or the’.

SEC. 156. SUPPLIES: IDENTIFICATION OF SUPPLIER AND SOURCES.

    Paragraph (2) of section 2384(b) of title 10, United States Code, is amended to read as follows:

      ‘(2) Paragraph (1) does not apply to a contract that requires the delivery of supplies that are commercial items, as defined in section 2302(7) of this title.’.

TITLE II--CONTRACT ADMINISTRATION

SEC. 201. CONTRACT PAYMENTS.

    (a) CONTRACT FINANCING- (1) Subsection (a)(2) of section 2307 of title 10, United States Code, is amended by striking out ‘bid’ before ‘solicitations’.

    (2) Subsection (c) of such section is amended by striking out the last sentence and inserting in lieu thereof the following: ‘Such lien is paramount to all other liens and is effective on the date the first advance payment is made, regardless of whether the United States has notified the contractor of the lien or taken any other action.

    (3) Subsection (d) of such section is amended--

      (A) in the first sentence of paragraph (1)--

        (i) by striking out ‘The Secretary’ and inserting in lieu thereof ‘Except as provided in paragraph (4), the Secretary’; and

        (ii) by striking out ‘commensurate with the work, which meets standards of quality established under the contract, that has been accomplished.’ and inserting in lieu thereof ‘commensurate with the work that has been accomplished and that meets standards of quality established under the contract.’;

      (B) by redesignating paragraph (3) as paragraph (4) and amending such paragraph to read as follows:

    ‘(4) This subsection does not apply to contracts awarded using simplified procedures.’; and

      (C) by inserting after paragraph (2) the following new paragraph (3):

    ‘(3) When payments have been made for work in progress, the United States shall take title to all work in progress properly allocable or chargeable to the contract. Title shall vest in the United States regardless of any prior or subsequently asserted security interest in the work in progress.’.

    (4) Such section is further amended by adding at the end the following new subsection:

    ‘(f) For contracts made by the Department of the Navy, the Secretary of the Navy--

      ‘(1) shall provide that the rate for progress payments on any contract awarded by the Secretary for repair, maintenance, or overhaul of a naval vessel shall be not less than--

        ‘(A) 95 percent, in the case of firms considered to be small businesses; and

        ‘(B) 90 percent, in the case of all other firms; and

      ‘(2) may advance to private salvage companies such funds as the Secretary considers necessary to provide for the immediate financing of salvage operations, provided such advances are made on terms the Secretary considers adequate for the protection of the United States.’.

    (b) REPAIR OR MAINTENANCE OF NAVAL VESSELS: PROGRESS PAYMENTS UNDER CERTAIN CONTRACTS- Section 7312 of title 10, United States Code, is repealed. The table of sections at the beginning of chapter 633 of such title is amended by striking out the item related to section 7312.

    (c) ADVANCE OF FUNDS FOR SALVAGE OPERATIONS- Section 7364 of title 10, United States Code, is repealed. The table of sections at the beginning of chapter 637 of such title is amended by striking out the item related to section 7364.

    (d) PROGRESS PAYMENT FOR WORK DONE; LIEN BASED ON PAYMENT- Section 7521 of title 10, United States Code, is repealed. The table of sections at the beginning of chapter 645 of such title is amended by striking out the item related to section 7521.

SEC. 202. COST PRINCIPLES.

    (a) ALLOWABLE COSTS- Section 2324 of title 10, United States Code, is amended--

      (1) by striking out subsections (e), (f), (g), (i), and (k);

      (2) by redesignating subsections (a), (b), (c), (d), (h), (j), (l), and (m) as subsections (b), (c), (d), (e), (f), (g), (h), and (i), respectively;

      (3) by inserting at the beginning of the section the following new subsection:

    ‘(a) For purposes of this section, the term ‘allowable cost’ means a cost, whether it is direct or indirect, that the Department of Defense reimburses a contractor for carrying out a defense contract. In determining what constitutes a cost, the Department of Defense may use any generally accepted method of determining or estimating costs that is equitable and consistently applied. The allowability of costs shall be determined in accordance with the Federal Acquisition Regulation and the Department of Defense Supplement to the Federal Acquisition Regulation.’.

      (4) in subsection (c), as redesignated--

        (A) by striking out ‘subsection (a)’ in the first paragraph and inserting in lieu thereof ‘subsection (b)’; and

        (B) by striking out the period at the end of paragraph (2) and inserting in lieu thereof ‘, plus interest to be computed as provided by paragraph (1)(B).’;

      (5) in subsection (d), as redesignated, by striking out ‘subsection (b)’ and inserting in lieu thereof ‘subsection (c)’;

      (6) in subsection (e), as redesignated, by striking out ‘subsection (a) or (b)--’ and inserting in lieu thereof ‘subsection (b) or (c)--’;

      (7) in subsection (g), as redesignated, by striking out ‘United States Claims Court’ and inserting in lieu thereof ‘United States Court of Federal Claims’; and

      (8) in subsection (h), as redesignated--

        (A) in paragraph (2), by striking out ‘committees named in paragraph (3)’ and inserting in lieu thereof ‘Committees on Armed Services and the Committees on Appropriations of the Senate and the House of Representatives’;

        (B) by striking out ‘in regulations prescribed under subsection (e) or (f) or in any other regulations of the Department of Defense’; and

        (C) by striking out paragraph (3).

    (b) CONTRACT PROFIT CONTROLS DURING EMERGENCY PERIODS- Section 2382 of title 10, United States Code, is repealed. The table of sections at the beginning of chapter 141 of such title is amended by striking out the item related to section 2382.

    (c) TRAVEL EXPENSES OF GOVERNMENT CONTRACTORS- Section 24(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 420) is amended by inserting after ‘Under any contract’ the following: ‘requiring the submission of cost or pricing data or the negotiation of final indirect costs’.

SEC. 203. CONSOLIDATION AND REVISION OF AUTHORITY TO EXAMINE RECORDS OF CONTRACTORS.

    (a) AUTHORITY-

      (1) IN GENERAL- Section 2313 of title 10, United States Code, is amended to read as follows:

‘Sec. 2313. Examination of records of contractor

    ‘(a) AGENCY AUTHORITY- The head of an agency, acting through an authorized representative--

      ‘(1) is entitled to inspect the plant and audit the records of--

        ‘(A) a contractor performing a cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable contract, or any combination of such contracts, made by that agency under this chapter; and

        ‘(B) a subcontractor performing any subcontract under such a contract or combination of contracts; and

      ‘(2) shall, for the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted pursuant to section 2306a of this title with respect to a contract or subcontract, have the right to examine all records of the contractor or subcontractor related to--

        ‘(A) the proposal for the contract or subcontract;

        ‘(B) the discussions conducted on the proposal; or

        ‘(C) pricing of the contract or subcontract.

    ‘(b) SUBPOENA POWER- (1) The Director of the Defense Contract Audit Agency (or any successor agency) may require by subpoena the production of records of a contractor, access to which is provided to the Secretary of Defense by subsection (a).

    ‘(2) Any such subpoena, in the case of contumacy or refusal to obey, shall be enforceable by order of an appropriate United States district court.

    ‘(3) The authority provided by paragraph (1) may not be redelegated.

    ‘(4) The Director (or any successor official) shall submit an annual report to the Secretary of Defense on the exercise of such authority during the preceding year and the reasons why such authority was exercised in any instance. The Secretary shall forward a copy of each such report to the Committees on Armed Services of the Senate and House of Representatives.

    ‘(c) COMPTROLLER GENERAL AUTHORITY- (1) Except as provided in paragraph (2), each contract awarded after using procedures other than sealed bid procedures shall provide that the Comptroller General and his representatives are entitled to examine any records of the contractor, or any of its subcontractors, that directly pertain to, and involve transactions relating to, the contract or subcontract.

    ‘(2) Paragraph (1) does not apply to a contract or subcontract with a foreign contractor or foreign subcontractor if the head of the agency concerned determines, with the concurrence of the Comptroller General or his designee, that the application of that paragraph to the contract or subcontract would not be in the public interest. However, the concurrence of the Comptroller General or his designee is not required--

      ‘(A) where the contractor or subcontractor is a foreign government or agency thereof or is precluded by the laws of the country involved from making its records available for examination; and

      ‘(B) where the head of the agency determines, after taking into account the price and availability of the property and services from United States sources, that the public interest would be best served by not applying paragraph (1).

    ‘(d) LIMITATION- The right of the head of an agency under subsection (a), and the right of the Comptroller General under subsection (c), with respect to a contract or subcontract shall expire three years after final payment under such contract or subcontract.

    ‘(e) INAPPLICABILITY TO CERTAIN CONTRACTS- This section is inapplicable with respect to contracts for utility services at rates not exceeding those established to apply uniformly to the public, plus any applicable reasonable connection charge.

    ‘(f) RECORDS DEFINED- In this section, the term ‘records’ includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether such items are in written form, in the form of computer data, or in any other form.’.

      (2) TECHNICAL AMENDMENT- The item relating to such section in the table of sections at the beginning of chapter 137 of title 10, United States Code, is amended to read as follows:

      ‘2313. Examination of records of contractor.’.

    (b) REPEAL OF SUPERSEDED PROVISION-

      (1) REPEAL- Section 2406 of title 10, United States Code, is repealed.

      (2) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 141 of such title is amended by striking out the item relating to section 2406.

SEC. 204. ADMINISTRATION OF CONTRACT PROVISIONS RELATING TO PRICE, DELIVERY, AND PRODUCT QUALITY.

    (a) REPEAL OF PROVISION RELATING TO CONTRACTOR GUARANTEES ON MAJOR WEAPON SYSTEMS- Section 2403 of title 10, United States Code, is repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 141 of such title is amended by striking out the item related to section 2403.

TITLE III--MAJOR SYSTEMS AND COMMERCIAL ACTIVITIES

Subtitle A--Major Systems

SEC. 301. SELECTED ACQUISITION REPORTS; UNIT COST REPORTS.

    (a) AMENDMENT OF TITLE 10- Section 2432 of title 10, United States Code, is amended to read as follows:

‘Sec. 2432. Selected Acquisition Reports; unit cost reports

    ‘(a)(1) The Secretary of Defense shall submit to Congress at the end of each fiscal year quarter a report on current major defense acquisition programs. Except as provided in paragraphs (2) and (3), each such report shall include a status report on each defense acquisition program that at the end of such quarter is a major defense acquisition program. Reports under this section shall be known as Selected Acquisition Reports.

    ‘(2) A status report on a major defense acquisition program need not be included in the Selected Acquisition Report for the second, third, or fourth quarter of a fiscal year if such a report was included in a previous Selected Acquisition Report for that fiscal year and during the period since that report there has been--

      ‘(A) less than a 15 percent increase in program acquisition unit cost and current procurement unit cost; and

      ‘(B) less than a six-month delay in any program schedule milestone shown in the Selected Acquisition Report.

    ‘(3)(A) The Secretary of Defense may waive the requirement for submission of Selected Acquisition Reports for a program for a fiscal year if--

      ‘(i) the program has not entered engineering and manufacturing development;

      ‘(ii) a reasonable cost estimate has not been established for such program; and

      ‘(iii) the system configuration for such program is not well defined.

    ‘(B) The Secretary shall submit to the Committees on Armed Services of the Senate and House of Representatives a written notification of each waiver under subparagraph (A) for a program for a fiscal year not later than 60 days before the President submits the budget to Congress pursuant to section 1105 of title 31 in that fiscal year.

    ‘(b)(1) Selected Acquisition Reports for the first quarter of a fiscal year shall be known as comprehensive annual Selected Acquisition Reports.

    ‘(2) Selected Acquisition Reports for the second, third, and fourth quarters of a fiscal year shall be known as quarterly Selected Acquisition Reports.

    ‘(3) Each Selected Acquisition Report for the first quarter of a fiscal year shall be designed to provide to the Committees on Armed Services of the Senate and House of Representatives the information such Committees need to perform their oversight functions. In the interests of consistency and streamlining of reporting, the Secretary of Defense shall include in the Selected Acquisition Reports such information as is used by the Department of Defense to manage major defense acquisition programs. The Secretary of Defense shall determine the scope and form of the items to be included in both the Comprehensive Annual and Quarterly Selected Acquisition Report and issue guidelines to ensure consistent reporting procedures. The Secretary of Defense may approve changes in the content of the Selected Acquisition Report if the Secretary provides such Committees with written notification of such changes at least 60 days before the date of the report that incorporates the changes.

    ‘(c) Each comprehensive annual Selected Acquisition Report shall be submitted within 60 days after the date on which the President transmits the Budget to Congress for the following fiscal year, and each Quarterly Selected Acquisition Report shall be submitted within 45 days after the end of the fiscal-year quarter.

    ‘(d) The requirements of this section with respect to a major defense acquisition program shall cease to apply after 90 percent of the items to be delivered to the United States under the program (shown as the total quantity of items to be purchased under the program in the most recent Selected Acquisition Report) have been delivered or 90 percent of planned expenditures under the program have been made.

    ‘(e) Total program reporting under this section shall apply to a major defense acquisition program when funds have been appropriated for such and the Secretary of Defense has decided to proceed to engineering and manufacturing development of such program. Reporting may be limited to the development program as provided by the guidelines of the Secretary of Defense promulgated pursuant to subsection (b)(3) before a decision is made by the Secretary to proceed to engineering and manufacturing development if the Secretary notifies the Committees on Armed Services of the Senate and House of Representatives of the intention to submit a limited report under this subsection not less than 15 days before a report is due under this section.

    ‘(f)(1) The Secretary of Defense shall require the program manager for a major defense acquisition program, on a quarterly basis, to submit to the service acquisition executive designated by the Secretary concerned a written report on the unit costs of the program. It shall be submitted not more than 30 calendar days after the end of the quarter. The Secretary of Defense shall issue regulations implementing this requirement.

    ‘(2) When a unit cost report is submitted to the service acquisition executive designated by the Secretary concerned under this section with respect to a major defense acquisition program, the service acquisition executive shall determine whether the current program acquisition unit cost for the program has increased 15 percent or more over the baseline program acquisition unit cost for the program.

    ‘(3) When a unit cost report is submitted to the service acquisition executive designated by the Secretary concerned under this section with respect to a major defense acquisition program that is a procurement program, the service acquisition executive, in addition to the determination under paragraph (2), shall determine whether the current procurement unit cost for the program has increased by 15 percent or more over the baseline procurement unit cost for the program.

    ‘(4) If, based upon the service acquisition executive’s determination, the Secretary concerned determines (for the first time since the beginning of the current fiscal year) that the current program acquisition unit cost has increased by 15 percent or more as determined under paragraph (2), or that the current procurement unit cost has increased by 15 percent or more as determined under paragraph (3), the Secretary shall notify Congress in writing of such determination and of the increase with respect to such program within 45 days after the date of that report and shall include in such notification the date on which the determination was made.’.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 144 of title 10, United States Code, is amended by striking out the item relating to section 2432 and inserting in lieu thereof the following:

      ‘Sec. 2432. Selected Acquisition Reports; unit cost reports.’.

SEC. 302. UNIT COST REPORTS.

    (a) REPEAL- Section 2433 of title 10, United States Code, is repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 144 of such title is amended by striking out the item relating to section 2433.

SEC. 303. INDEPENDENT COST ESTIMATES; OPERATIONAL MANPOWER REQUIREMENTS.

    Section 2434 of title 10, United States Code, is amended to read as follows:

‘Sec. 2434. Independent cost estimates; operational manpower requirements

    ‘(a) REQUIREMENT FOR APPROVAL- The Secretary of Defense may not approve the engineering and manufacturing development, or the production and deployment, of a major defense acquisition program unless an independent estimate of the cost of the program, and a manpower estimate, has been considered by the Secretary.

    ‘(b) REGULATIONS- The Secretary of Defense shall promulgate regulations governing the content and submission of an independent estimate of the cost of the program and a manpower estimate. The regulations shall require that--

      ‘(1) the independent estimate shall--

        ‘(A) be prepared by an office or other entity that is not under the supervision, direction, or control of the military department, defense agency, or other component of the Department of Defense that is directly responsible for carrying out the development or acquisition of the program, and

        ‘(B) include all costs of development, procurement, and operations and support, without regard to funding source or management control; and

      ‘(2) the manpower estimate shall properly consider, prior to the engineering and manufacturing development and production and deployment phases of the program, the total endstrengths for personnel required to operate, maintain, train, and support the program upon full operational deployment.’.

SEC. 304. ENHANCED PROGRAM STABILITY.

    Section 2435 of title 10, United States Code, is amended to read as follows:

‘Sec. 2435. Enhanced program stability

    ‘(a) BASELINE DESCRIPTION REQUIREMENT- (1) The Secretary of a military department shall establish a baseline description for each major defense acquisition program under the jurisdiction of such Secretary.

    ‘(2) The baseline shall include sufficient parameters to describe the cost, schedule, and performance of such major defense acquisition program.

    ‘(3) No amounts appropriated or otherwise made available to the Department of Defense for carrying out a major defense acquisition program may be obligated without an approved baseline description unless such obligation is specifically approved by the Under Secretary of Defense for Acquisition.

    ‘(4) A baseline description for a major defense acquisition program shall be established--

      ‘(A) before such program enters engineering manufacturing and development; and

      ‘(B) before such program enters production and deployment.

    ‘(b) REGULATIONS- The Secretary of Defense shall promulgate regulations governing--

      ‘(1) the content of baselines;

      ‘(2) the submission of deviation reports by program managers to the Secretary of the military department concerned and the Under Secretary of Defense for Acquisition; and

      ‘(3) procedures for departmental review of deviation reports and submission and approval of a revised baseline.’.

SEC. 305. MAJOR PROGRAMS: COMPETITIVE PROTOTYPING.

    (a) REPEAL- Section 2438 of title 10, United States Code, is repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 144 of such title is amended by striking out the item relating to section 2438.

SEC. 306. MAJOR PROGRAMS: COMPETITIVE ALTERNATIVE SOURCES.

    (a) REPEAL- Section 2439 of title 10, United States Code, is repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 144 of such title is amended by striking out the item relating to section 2439.

Subtitle B--Testing Statutes

SEC. 311. REPEAL OF TESTING REQUIREMENT FOR WHEELED OR TRACKED VEHICLES.

    (a) REPEAL- Section 2362 of title 10, United States Code, is repealed.

    (b) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 139 of such title is amended by striking out the item relating to section 2362.

SEC. 312. MAJOR SYSTEMS AND MUNITIONS PROGRAMS: SURVIVABILITY AND LETHALITY TESTING.

    (a) SUBSTITUTION OF VULNERABILITY TESTING FOR SURVIVABILITY TESTING- Section 2366 of title 10, United States Code, is amended--

      (1) by striking out ‘survivability’ each place it appears in subsections (a)(1)(A), (a)(2)(A), (c)(1), (d), (e)(3), and (e)(6)(A) and inserting in lieu thereof ‘vulnerability’; and

      (2) in subsection (b)(1), by striking out ‘Survivability’ and inserting in lieu thereof ‘Vulnerability’.

    (b) LESS THAN FULL-UP TESTING AUTHORIZED- Section 2366(e)(3) of such title is amended by inserting after ‘configured for combat,’ the following: ‘or, if the covered system is a high value system, by firing such munitions at components, subsystems, and subassemblies (or realistic replicas or surrogates) together with performing design analyses, modeling and simulation, and analysis of combat data,’.

    (c) WAIVER AUTHORITY AFTER FULL-SCALE DEVELOPMENT BEGINS- Section 2366(c)(1) of such title is amended in the first sentence by striking out ‘, before the system enters full-scale development,’.

    (d) REFERENCE TO CONGRESSIONAL COMMITTEES- Section 2366(d) of such title is amended in the first sentence by striking out ‘defense committees of Congress (as defined in section 2362(e)(3) of this title)’ and inserting in lieu thereof ‘Committees on Armed Services and on Appropriations of the Senate and House of Representatives’.

SEC. 313. OPERATIONAL TEST AND EVALUATION OF DEFENSE ACQUISITION PROGRAMS.

    Section 2399(b) of title 10, United States Code, is amended--

      (1) by redesignating paragraph (5) as paragraph (6); and

      (2) by inserting after paragraph (4) the following new paragraph (5):

    ‘(5)(A) The Secretary of Defense may, for a particular major defense acquisition program, prescribe and apply different operational test and evaluation procedures than those provided under subsection (a) and paragraphs (1) through (3) of this subsection if the Secretary first transmits to Congress--

      ‘(i) a certification that such testing would be unreasonably expensive and impracticable, cause unwarranted delay, or be unnecessary because of the acquisition strategy for that system; and

      ‘(ii) a description of the actions taken to ensure that the system will be operationally effective and suitable when the system is introduced into the field.

    ‘(B) Alternative operational test and evaluation procedures prescribed pursuant to subparagraph (A) may not be used to proceed with a major defense acquisition program beyond low-rate initial production.’.

SEC. 314. LOW-RATE INITIAL PRODUCTION OF NEW SYSTEMS.

    (a) EXCEPTION FOR STRATEGIC DEFENSE MISSILE SYSTEMS- Subsection (c) of section 2400 of title 10, United States Code, is amended--

      (1) in paragraph (1), by striking out ‘and military satellite programs’ and inserting in lieu thereof ‘, military satellite programs, and strategic defense missile programs’;

      (2) in paragraph (2), by striking out ‘and military satellite program’ and inserting in lieu thereof ‘, military satellite program, and strategic defense missile program’; and

      (3) by striking out the caption of such subsection and inserting in lieu thereof ‘LOW-RATE INITIAL PRODUCTION OF NAVAL VESSEL, SATELLITE, AND STRATEGIC DEFENSE MISSILE PROGRAMS- ’.

    (b) SUBMISSION OF TEST AND EVALUATION MASTER PLAN- Paragraph (2) of such section is amended by striking out subparagraph (B) and inserting in lieu thereof the following:

      ‘(B) any test and evaluation master plan prepared for that program;’.

Subtitle C--DOD Commercial and Industrial Activities

SEC. 321. FACTORIES AND ARSENALS: MANUFACTURE AT.

    (a) CONSOLIDATED SECTION- Chapter 148 of title 10, United States Code, is amended by adding at the end the following:

‘Sec. 2538. Factories and arsenals: manufacture at

    ‘(a) The Secretary of Defense or secretary of a military department may have supplies needed for the Department of Defense and its components made in factories or arsenals owned by the United States.

    ‘(b) The Secretary of Defense or secretary of a military department may abolish any United States arsenal that the Secretary considers unnecessary.’.

    (b) CONFORMING REPEALS AND TECHNICAL AMENDMENTS- (1) Sections 4532 and 9532 of title 10, United States Code, are hereby repealed.

    (2) The table of sections at the beginning of chapter 433 of such title is amended by striking out the item relating to section 4532. The table of sections at the beginning of chapter 933 of such title is amended by striking out the item relating to section 9532.

    (3) The table of sections at the beginning of chapter 148 is amended by adding at the end the following new item:

      ‘2538. Factories and arsenals: manufacture at.’.

Subtitle D--Industrial Base and Manufacturing Technology Laws

SEC. 331. POLICY OBJECTIVES RELATING TO DEFENSE INTERNATIONAL TRADE.

    Section 2501 of title 10, United States Code, is amended by adding at the end the following new subsection:

    ‘(d) POLICY OBJECTIVES RELATING TO DEFENSE INTERNATIONAL TRADE- It is the policy of Congress that the United States attain the national defense technology and industrial base objectives set forth in this section by fully coordinating domestic defense acquisition practices with defense trade and cooperation, under chapter 173 of this title, and foreign military sales and assistance.’.

Subtitle E--Miscellaneous

SEC. 341. OBLIGATION OF FUNDS: LIMITATION.

    Section 2202 of title 10, United States Code, is amended by striking out subsection (a) and inserting in lieu thereof the following:

    ‘(a) The Secretary of Defense shall issue regulations to be followed by all agencies of the Department of Defense for the procurement, production, warehousing, or distribution of supplies and related functions.’.

SEC. 342. REPEAL OF LIMITATION ON LENGTH OF CONTRACTS.

    Section 9081 of the Department of Defense Appropriations Act, 1990 (Public Law 101-165) is repealed.

TITLE IV--SMALL PURCHASE PROCEDURES AND SMALL BUSINESS PROVISIONS

SEC. 401. USE OF SMALL PURCHASE PROCEDURES FOR PROCUREMENTS CONDUCTED THROUGH FEDERAL ACQUISITION COMPUTER NETWORK SYSTEM; IMPLEMENTATION OF SYSTEM.

    (a) INCREASE IN SMALL PURCHASE THRESHOLD-

      (1) IN GENERAL- Section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403) is amended--

        (A) in paragraph (10) by striking ‘and’ after the semicolon; and

        (B) by striking paragraph (11) and inserting the following:

      ‘(11) The term ‘small purchase threshold’ means--

        ‘(A) $25,000, except as provided in subparagraphs (B) and (C);

        ‘(B) $50,000, in the case of a procurement--

          ‘(i) that is conducted by a procuring activity that has implemented the FACNET system in accordance with the requirements of section 29(f)(1)(A) and (B)(i); and

          ‘(ii) in which notices of solicitation for all contracting opportunities are issued through the FACNET system; or

        ‘(C) $100,000, in the case of a procurement--

          ‘(i) that is conducted by a procuring activity that has implemented the FACNET system in accordance with the requirements of section 29(f)(1)(A) and (B)(i), (ii), (iii), and (iv); and

          ‘(ii) in which--

            ‘(I) notices of solicitation for all contracting opportunities are issued through the FACNET system,

            ‘(II) responses to solicitations and requests for information may be submitted to the procuring activity through such system,

            ‘(III) information pursuant to those requests is available through such system,

            ‘(IV) orders are made through such system, and

            ‘(V) public notice of awards is provided through such system; and

      ‘(12) the term ‘FACNET system’ means such system developed by the Administrator under section 29.’.

      (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall take effect on, and apply to solicitations made and orders placed on or after, the expiration of the 60-day period beginning on the date of issuance in final form of revisions to the Federal Acquisition Regulation under subsection (b).

      (3) INTERIM RULE- Notwithstanding paragraphs (1) and (2), during the 5-year period beginning on the date of the issuance in final form of revisions to the Federal Acquisition Regulation under subsection (b), procuring activities shall continue to report, pursuant to section 19(d) of the Office of Federal Procurement Policy Act (41 U.S.C. 417(d)), procurement awards with a dollar value of at least $10,000, but less than $100,000, in conformity with the procedures for the reporting of a contract award in excess of $25,000 in effect on May 24, 1993.

    (b) IMPROVED SMALL PURCHASE PROCEDURES-

      (1) REVISION OF FAR- The Federal Acquisition Regulation shall be revised to ensure that--

        (A) procuring activities of executive agencies comply with the requirements of section 8(a) of the Small Business Act (15 U.S.C. 637(a)) and section 2323 of title 10, United States Code, in awarding any contract with a price exceeding $25,000;

        (B) the authority under part 13.106(a)(1) of the Federal Acquisition Regulation (48 C.F.R. 13.106(a)(1)), as in effect on May 19, 1993, to make purchases without securing competitive quotations does not apply to any purchases with a price exceeding $2,500; and

        (C) procuring activities of executive agencies comply with the requirements of section 15(j) of the Small Business Act (15 U.S.C. 644), relating to the small business reserve, in awarding any contract with a price below the small purchase threshold.

      (2) NOTICE REQUIRED REGARDING ORAL SOLICITATIONS- Section 18(a)(1)(B) of the Office of Federal Procurement Policy Act (41 U.S.C. 416(a)(1)(B)) is amended in the matter preceding clause (i)--

        (A) by inserting ‘(including orally or by any other means)’ after ‘intending to solicit’; and

        (B) by inserting after ‘ten days’ the following: ‘before contract award (except for any procurement in which public notice of contract opportunities for the acquisition of property or services by a procuring activity of an executive agency is performed through the FACNET system),’.

      (3) PARTICIPATION BY ALL RESPONSIBLE SMALL BUSINESS CONCERNS- Section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416) is amended by adding at the end the following:

    ‘(e) An executive agency intending to solicit offers for a contract for which a notice of solicitation is required to be posted under subsection (a)(1)(B) shall ensure that all small business concerns are permitted to respond to solicitations for the contract within the time specified in the solicitations.’.

    (c) PERFORMANCE TEST AND REPORT-

      (1) PERFORMANCE TEST- The Comptroller General of the United States shall monitor and collect data on the results of the amendments made by subsection (a)(1), to ascertain the effects of the amendments on the participation of small business concerns (including small business concerns owned and controlled by socially and economically disadvantaged individuals) in procurement awards of less than $100,000 and the benefits and detriments, if any, to the buying activities of the various Executive agencies.

      (2) DATA TO BE COLLECTED- Data collected under paragraph (1) shall include data regarding whether the amendments made by subsection (a)(1) have improved the acquisition process in terms of reduced paperwork, financial or other savings to the Government, and any increase in the number of contractors participating in the contracting process.

      (3) PERIOD- Data shall be collected for purposes of paragraph (1) during the period beginning with the first full fiscal year quarter after the effective date of the amendments made by subsection (a)(1) and ending September 30, 1996.

      (4) REPORT- By March 1, 1997, the Comptroller General of the United States shall report to the Committee on Government Operations of the House of Representatives, the Committee on Governmental Affairs of the Senate, and the Committees on Small Business of the House of Representatives and the Senate on the effects of the increase in the small purchase threshold made by the amendments made by subsection (a)(1).

    (d) FUNCTIONS OF ADMINISTRATOR FOR FEDERAL PROCUREMENT POLICY- Section 6(d) of the Office of Federal Procurement Policy Act (41 U.S.C. 405(d)) is amended--

      (1) in paragraph (7) by striking ‘and’ after the semicolon at the end; and

      (2) by redesignating paragraph (8) as paragraph (10) and inserting after paragraph (7) the following:

      ‘(8) developing policies, in consultation with the Administrator of the Small Business Administration, that ensure that small businesses and small businesses owned and controlled by socially and economically disadvantaged persons are provided with the maximum practicable opportunities to participate in procurements that are conducted below the small purchase threshold; and

      ‘(9) developing policies that will promote achievement of goals for participation by small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals.’.

    (e) IMPLEMENTATION OF ELECTRONIC DATA INTERCHANGE FOR PROCUREMENT INFORMATION- The Office of Federal Procurement Policy Act (41 U.S.C. 401 et seq.) is further amended by adding after section 28 the following:

‘SEC. 29. ELECTRONIC INTERCHANGE OF PROCUREMENT INFORMATION.

    ‘(a) IN GENERAL- The Administrator, in consultation with the Office of Information and Regulatory Affairs, shall establish a program and assign a program manager for, and provide overall direction of policy and leadership in, the development, coordination, installation, operation, and completion of implementation by executive agencies, by not later than 5 years after the date of the enactment of the Defense Acquisition Reform Act of 1993, of a Federal Acquisition Computer Network system. Such system shall be known as the ‘FACNET system’. The FACNET system shall involve enabling technology and procurement electronic data interchange transaction sets. The enabling technology shall consist of a computer network, supporting data bases, and interfaces that interconnect Government automated systems to the network. The procurement electronic data interchange transaction sets shall facilitate the electronic interchange of standard procurement information between Government and industry automated acquisition systems.

    ‘(b) FUNCTIONS OF ADMINISTRATOR OF GENERAL SERVICES- The Administrator of General Services shall do the following:

      ‘(1) Provide technical support for the FACNET system by doing the following:

        ‘(A) Coordinate with the Administrator to facilitate the efficient and widespread implementation of the FACNET system by executive agencies. This shall include interfacing the FACNET system to other systems, such as the Government bank card and Electronic Funds Transfer payment systems.

        ‘(B) Assist the Director of the National Institute of Standards and Technology in the development and application of appropriate Federal Information Processing Standards.

        ‘(C) Prepare a technical plan for coordinating the design, development, implementation, operation, and maintenance of the FACNET system. The plan shall include roles and responsibilities, major milestones, cost estimates, and performance requirements.

      ‘(2) Ensure compliance with section 111 of the Federal Property and Administrative Services Act of 1949 in the implementation of the FACNET system by executive agencies, including by limiting the scope of delegations under subsection (a) of that section.

      ‘(3) Evaluate progress by executive agencies in implementing the FACNET system, and recommend changes in that implementation to the program manager assigned by the Administrator under subsection (a).

      ‘(4) Submit to the Congress, on the date that is one year after the date of the enactment of the Defense Acquisition Reform Act of 1993 and on that date in each of the 5 years thereafter, a report on the overall progress by the executive branch of the Government and by each executive agency in implementing the FACNET system.

    ‘(c) IMPLEMENTATION OF FACNET SYSTEM BY EXECUTIVE AGENCIES-

      ‘(1) IN GENERAL- The head of each executive agency shall cooperate with the Administrator and the Administrator of General Services to implement the FACNET system for the agency.

      ‘(2) DESIGNATION OF AGENCY PROGRAM MANAGER-

        ‘(A) DESIGNATION- The head of each executive agency shall designate a program manager to implement the FACNET system for the agency and otherwise implement this section.

        ‘(B) FUNCTIONS- A program manager designated under this paragraph for an executive agency shall--

          ‘(i) report directly to the senior procurement executive designated for the agency under section 16(3);

          ‘(ii) be responsible for the timely and cost-effective implementation of the FACNET system for the agency in a manner that is responsive to the procurement needs of the agency, national business needs, and the public’s interest in open government;

          ‘(iii) develop plans for phasing-in the implementation of the FACNET system for the procuring activities of the executive agency and phasing-out local network systems that perform comparable procurement functions;

          ‘(iv) participate in the interagency development of standard procurement electronic data interchange transaction sets;

          ‘(v) using the resources of the agency, develop and implement a standardized and comprehensive training program for agency employees in the use and management of the FACNET system; and

          ‘(vi) in carrying out this section, comply with guidelines issued by the Administrator under this section and program directives issued by the Administrator of General Services under section 111 of the Federal Property and Administrative Services Act of 1949.

    ‘(d) FUNCTIONS OF NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY- The Director of the National Institute of Standards and Technology shall--

      ‘(1) ensure that the FACNET system complies with Federal Information Processing Standards;

      ‘(2) issue additional standards for the FACNET system as necessary; and

      ‘(3) establish tests to facilitate the aims of this section and support policies established by the Administrator under this section.

    ‘(e) FUNCTIONS OF SMALL BUSINESS ADMINISTRATION- The Administrator of the Small Business Administration shall--

      ‘(1) develop plans to coordinate and promote the use of the FACNET system by small businesses, that incorporate outreach efforts by the Small Business Administration, agency Offices of Small and Disadvantaged Business and Utilization, Small Business Development Centers, and other appropriate organizations; and

      ‘(2) use the resources of the Office of Procurement Assistance and Office of Advocacy to develop a standardized and comprehensive training program to train small business concerns in the use of the FACNET system, through Small Business Administration district offices and Small Business Development Centers.

    ‘(f) FACNET SYSTEM COMPATIBILITY STANDARDS-

      ‘(1) IN GENERAL- The Administrator, in consultation with the Office of Information and Regulatory Affairs, the Administrator of General Services, the Administrator of the Small Business Administration, and the Director of the National Institute of Standards and Technology, shall prescribe policies for ensuring convenient and universal access to the FACNET system, and shall develop a set of system compatibility standards for each FACNET system interface and FACNET system support data base. The system compatibility standards shall specify the functional capabilities of each FACNET system interface, and the minimum set of data elements of each FACNET system support data base. The system compatibility standards shall ensure that the following FACNET system functions are satisfactorily performed by each executive agency, executive agency component, or procuring activity:

        ‘(A) Provision of widespread public notice of solicitations for contract opportunities issued by the agency, component, or activity and of orders to be made by the agency, component, or activity below the small purchase threshold.

        ‘(B) Allowing private users to electronically--

          ‘(i) selectively access and review solicitations issued by the agency, component, or activity;

          ‘(ii) respond to solicitations issued by the agency, component, or activity;

          ‘(iii) receive orders from the agency, component, or activity; and

          ‘(iv) access information on contract awards made by the agency, component, or activity.

      ‘(2) BINDING STANDARDS- The FACNET system interface and FACNET system support data base of each procuring activity shall comply with the system compatibility standards developed under paragraph (1), except to the extent the Administrator has waived application of such standards to the activity under paragraph (3).

      ‘(3) WAIVERS- (A) The Administrator may, in writing, waive the application of any system compatibility standard to a procuring activity if the Administrator--

        ‘(i) determines that compliance with the standard by the procuring activity would adversely affect the accomplishment of the mission of the activity or cause a major adverse financial impact on the activity which is not offset by Government-wide savings; and

        ‘(ii) approves a plan, developed by the procuring activity, for complying with the standard by not later than 1 year after the issuance of the waiver.

      ‘(B) The authority of the Administrator to issue waivers under this paragraph may not be delegated.

      ‘(C) A waiver under this paragraph may be issued by the Administrator only after receipt of a request for the waiver submitted by the program manager designated under subsection (c)(2)(A) for the procuring activity for which the waiver is requested.

      ‘(D) The Administrator shall promptly submit a notice of each waiver under this paragraph to the Committee on Government Operations of the House of Representatives and the Committee on Governmental Affairs of the Senate, and promptly publish the notice in the Federal Register.’.

    (f) TECHNICAL CORRECTIONS-

      (1) Section 18(d) of the Office of Federal Procurement Policy Act (41 U.S.C. 416) is amended by striking ‘(e)’ in the first sentence and inserting ‘(a)’.

      (2) Section 18(a)(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 416(a)(1)) is amended--

        (A) in subparagraph (A) in the matter following clause (ii) by striking ‘notice’ and inserting ‘notice of solicitation’; and

        (B) in subparagraph (B) in the matter preceding clause (i) by striking ‘a notice of solicitation described in subsection (f)’ and inserting ‘a notice of solicitation described in subsection (b)’.

SEC. 402. SMALL BUSINESS RESERVATION.

    Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) is amended to read as follows:

    ‘(j) Each contract for the procurement of goods and services which has an anticipated value not in excess of the small purchase threshold and which is subject to small purchase procedures prescribed by section 2304(g) of title 10, United States Code, or section 303(g) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(g)) shall be reserved exclusively for small business concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices and in terms of quality and delivery of the goods or services being purchased. Nothing in this subsection shall be construed as precluding the award of contracts with a value not in excess of the small purchase threshold under the authority of section 8(a) of this Act, section 2323 of title 10, United States Code, or section 712 of the Business Opportunity Development Reform Act of 1988 (Public Law 100-656; 15 U.S.C. 644 note). In utilizing small purchase procedures, contracting officers shall, wherever circumstances permit, choose a method of payment which minimizes paperwork and facilitates prompt payment to contractors.’.

SEC. 403. EXEMPTIONS FOR CONTRACTS NOT IN EXCESS OF THE SMALL PURCHASE THRESHOLD.

    The Office of Federal Procurement Policy Act (41 U.S.C. 401 et seq.), as amended by section 401(e), is further amended by adding at the end the following new section:

‘SEC. 30. SMALL PURCHASE THRESHOLD.

    ‘(a) EXEMPTION FROM CERTAIN LAWS- Purchases made and contracts awarded with a value that is not in excess of the small purchase threshold shall be exempt from the following laws:

      ‘(1) Section 2313 of title 10, United States Code.

      ‘(2) Section 2393(d) of title 10, United States Code.

      ‘(3) Section 2631 of title 10, United States Code.

    ‘(b) EXEMPTION FROM CONTRACT CLAUSE REQUIREMENT- Unless otherwise determined by the Administrator, for contracts awarded with a value that is not in excess of the small purchase threshold and which are subject to small purchase procedures prescribed by section 2304(g) of title 10, United States Code or section 303(g) of the Federal Property and Administrative Services Act (41 U.S.C. 253(g)), no contract clause shall be required to implement the following laws:

      ‘(1) Section 2207 of title 10, United States Code.

      ‘(2) Section 2306(b) of title 10, United States Code.

      ‘(3) Section 3741 of the Revised Statutes (41 U.S.C. 22).

    ‘(c) SPECIAL RULE RELATING TO EXEMPTIONS- A provision of law hereafter enacted shall not be construed as applicable to purchases of property or services not in excess of the small purchase threshold unless that provision of law specifically refers to this section and specifically states that such provision of law modifies or supersedes the provisions of this section.’.

SEC. 404. SMALL BUSINESS AMENDMENTS.

    Subparagraph (A) of section 8(a)(1) of the Small Business Act (15 U.S.C. 637(a)(1)) is amended in the first full sentence--

      (1) by inserting ‘(i)’ after ‘in his discretion’;

      (2) by striking out the period at the end of such sentence and inserting in lieu thereof ‘, or’; and

      (3) by adding at the end of such sentence the following: ‘(ii) to award such procurement contract directly to a socially and economically disadvantaged small business designated by the Administration provided that the small business does not request that the award be made through the Administration.’.

SEC. 405. NOTIFICATION OF SMALL BUSINESS CONCERNS IN LOCALITY OF PROCURING AGENCY.

    Section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416), as amended by section 401(b)(3), is further amended by adding at the end the following:

    ‘(f) NOTIFICATION OF LOCAL SMALL BUSINESS CONCERNS- An executive agency intending to solicit offers for a contract for which a notice of solicitation is required to be posted under subsection (a)(1)(B) shall ensure that small business concerns located in the jurisdiction of the Small Business Administration District Office nearest to the agency, and other small business concerns in the State in which the agency is located, are sent notices of the solicitation.’.

TITLE V--INTELLECTUAL PROPERTY

SEC. 501. DEPARTMENT OF DEFENSE ACQUISITION OF INTELLECTUAL PROPERTY RIGHTS.

    (a) AUTHORIZED ACQUISITIONS- Section 2386 of title 10, United States Code, is amended by striking out paragraphs (3) and (4) and inserting in lieu thereof the following:

      ‘(3) Technical data and computer software.

      ‘(4) Releases for past infringement of patents or copyrights or for unauthorized use of technical data or computer software.’.

    (b) REDUNDANT PROVISION-

      (1) REPEAL- Section 7210 of title 10, United States Code, is repealed.

      (2) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 631 of such title is amended by striking out the item relating to section 7210.

TITLE VI--STANDARDS OF CONDUCT

Subtitle A--Ethics Provisions

SEC. 601. AMENDMENTS TO OFFICE OF FEDERAL PROCUREMENT POLICY ACT.

    (a) APPLICABILITY OF CERTIFICATION REQUIREMENT TO CONTRACTS IN EXCESS OF $500,000- Subsection (e)(7)(A) of section 27 of the Office of Federal Procurement Policy Act (41 U.S.C. 423) is amended by striking out ‘$100,000’ and inserting in lieu thereof ‘$500,000’.

    (b) APPLICABILITY OF RESTRICTIONS RESULTING FROM PROCUREMENT ACTIVITIES OF PROCUREMENT OFFICIALS TO CONTRACTS IN EXCESS OF $500,000- Subsection (f) of such section is amended--

      (1) by adding at the end of paragraph (1) the following new sentence: ‘This subsection applies only to contracts, extensions, and modifications in excess of $500,000.’; and

      (2) in paragraph (2)(A), by striking out ‘$100,000’ and inserting in lieu thereof ‘$500,000’.

SEC. 602. REPEAL OF SUPERSEDED AND OBSOLETE LAWS.

    (a) REPEAL- The following sections of title 10, United States Code, are repealed: Sections 2207, 2397, 2397a, 2397b, 2397c, and 2408.

    (b) TECHNICAL AMENDMENTS- Part IV of subtitle A of title 10, United States Code, is amended--

      (1) in the table of sections at the beginning of chapter 131, by striking out the item relating to section 2207; and

      (2) in the table of sections for chapter 141, by striking out the items relating to sections 2397, 2397a, 2397b, 2397c, and 2408.

Subtitle B--Additional Amendments

SEC. 611. CONTRACTING FUNCTIONS PERFORMED BY FEDERAL PERSONNEL.

    (a) AMENDMENT OF OFPP ACT- The Office of Federal Procurement Policy Act, as amended by sections 401(e) and 403, is further amended by adding at the end the following new section:

‘CONTRACTING FUNCTIONS PERFORMED BY FEDERAL PERSONNEL

    ‘SEC. 31. (a) LIMITATION ON PAYMENT FOR ADVISORY AND ASSISTANCE SERVICES- (1) No person who is not an employee may be paid by an agency for services to conduct evaluations or analyses of any aspect of a proposal submitted for an acquisition unless employees with adequate training and capabilities to perform such evaluations and analyses are not readily available within the agency or any other Federal agency.

    ‘(2) In the administration of this subsection, the head of each agency shall determine the standards of adequate training and capability of employees to conduct such acquisitions.

    ‘(b) DELEGATION OF PROCUREMENT AUTHORITY- With respect to an acquisition that is subject to section 111 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 759), the Administrator of General Services may not issue a delegation of procurement authority for the acquisition unless the request for the delegation of procurement authority includes a determination of the contracting agency that--

      ‘(1) such agency has and will utilize employees within the agency, or employees available from another agency, who are adequately trained and capable of conducting evaluations and analyses of proposals submitted for such an acquisition; or

      ‘(2)(A) such agency does not have employees within the agency who are adequately trained and capable of conducting evaluations and analyses of proposals submitted for such an acquisition; and

      ‘(B) adequately trained and capable employees are not readily available from other agencies in accordance with regulations promulgated by the Federal Acquisition Regulatory Council.

    ‘(c) DEFINITION- For purposes of this section, the term ‘employee’ has the meaning given such term in section 2105 of title 5, United States Code.’.

    (b) REQUIREMENT FOR GUIDANCE AND REGULATIONS-

      (1) GUIDANCE AND REGULATIONS REQUIRED- Not later than 90 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council established by section 25(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(a)) shall--

        (A) review part 37 of title 48 of the Code of Federal Regulations as it relates to the use of advisory and assistance services; and

        (B) provide guidance and promulgate regulations regarding--

          (i) what actions Federal agencies are required to take to determine whether expertise is readily available within the Federal Government before contracting for advisory and technical services to conduct acquisitions; and

          (ii) the manner in which Federal employees with expertise may be shared with agencies needing expertise for such acquisitions.

      (2) DEFINITION- In paragraph (1), the term ‘employee’ has the meaning given such term in section 2105 of title 5, United States Code.

SEC. 612. REPEAL OF EXECUTED REQUIREMENT FOR STUDY AND REPORT.

    Section 17 of the Office of Federal Procurement Policy Act (41 U.S.C. 415) is repealed.

SEC. 613. WAITING PERIOD FOR SIGNIFICANT CHANGES PROPOSED FOR ACQUISITION REGULATIONS.

    Section 22(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 418b) is amended--

      (1) by striking out ‘30 days’ and inserting in lieu thereof ‘60 days’; and

      (2) by adding at the end the following: ‘Notwithstanding the preceding sentence, such a policy, regulation, procedure, or form may take effect earlier than 60 days after the publication date when there are compelling circumstances for the earlier effective date, but in no event may that effective date be less than 30 days after the publication date.’.

TITLE VII--DEFENSE TRADE AND COOPERATION

SEC. 701. INTERNATIONAL COOPERATIVE AGREEMENTS.

    (a) DEFENSE INTERNATIONAL AGREEMENTS-

      (1) TERMINOLOGY REVISIONS- Section 2531 of title 10, United States Code, is amended--

        (A) in the subsection captions for subsections (a) and (c), by striking out ‘MOUS AND RELATED’ and inserting in lieu thereof ‘INTERNATIONAL’;

        (B) in subsection (a), by striking out ‘proposed memorandum of understanding, or any existing or proposed agreement related to a memorandum of understanding,’ in the matter above paragraph (1) and inserting in lieu thereof ‘proposed international agreement, including a memorandum of understanding,’;

        (C) by striking out ‘memorandum of understanding or related agreement’ each place it appears and inserting in lieu thereof ‘international agreement’;

        (D) in subsection (b), by striking out ‘memorandum or related agreement’ each place it appears in the second sentence and inserting in lieu thereof ‘international agreement’; and

        (E) in subsection (c)--

          (i) by striking out ‘A’ after ‘AGREEMENTS- ’ and inserting in lieu thereof ‘An’; and

          (ii) by striking out ‘memorandum or agreement’ and inserting in lieu thereof ‘international agreement’.

      (2) EXPANDED SCOPE OF AGREEMENTS- Section 2531(a) of title 10, United States Code, is amended by striking out ‘research, development, or production’ in the matter above paragraph (1) and inserting in lieu thereof ‘research, development, production, or logistics support’.

      (3) TECHNICAL AMENDMENTS-

        (A) SECTION HEADING- The heading of section 2531 of title 10, United States Code, is amended to read as follows:

‘Sec. 2531. Defense international agreements’.

        (B) TABLE OF SECTIONS- The item relating to such section in the table of sections at the beginning of subchapter V of chapter 148 of such title is amended to read as follows:

      ‘2531. Defense international agreements.’.

    (b) REPEAL OF UNNECESSARY AUTHORITY-

      (1) REPEAL- Section 7344 of title 10, United States Code, is repealed.

      (2) TECHNICAL AMENDMENT- The table of sections at the beginning of chapter 635 of such title is amended by striking out the item relating to section 7344.

SEC. 702. ACQUISITION, CROSS-SERVICING AGREEMENTS, AND STANDARDIZATION.

    (a) LIMITED WAIVER OF RESTRICTIONS ON ACCRUED REIMBURSABLE LIABILITIES AND CREDITS FOR CONTINGENCY OPERATIONS- Section 2347 of title 10, United States Code, is amended by adding at the end the following new subsection:

    ‘(c) The Secretary of Defense may waive the restrictions in subsections (a) and (b) for a period not to exceed 180 days upon a written determination that the armed forces are involved in a contingency operation or that involvement of the armed forces in a contingency operation is imminent. Upon making such a determination, the Secretary shall transmit a copy of the determination to the Committees on Armed Services of the Senate and House of Representatives.’.

    (b) COMMUNICATIONS SUPPORT- Section 2350f of title 10, United States Code, is amended--

      (1) by redesignating subsection (d) as subsection (e); and

      (2) by inserting after subsection (c) the following new subsection:

    ‘(d)(1) Nothing in this section shall be construed to limit the authority of the Secretary of Defense, without a formal bilateral agreement or multilateral arrangement, to furnish communications support and related supplies to, or receive communications support and related supplies from, an allied country in accordance with this subsection.

    ‘(2) The Secretary of Defense may furnish or receive such support and supplies on a reciprocal basis for a period not to exceed 90 days--

      ‘(A) in order to meet emerging operational requirements of the United States and the allied country; or

      ‘(B) incident to a joint military exercise with the allied country.

    ‘(3) If interconnection of communication circuits is maintained for joint or multilateral defense purposes under the authority of this subsection, the costs of maintaining such circuits may be allocated among the various users.’.

TITLE VIII--COMMERCIAL ITEM ACQUISITION

SEC. 801. PROCUREMENT OF COMMERCIAL AND NONDEVELOPMENTAL ITEMS.

    (a) ADDITION OF CHAPTER TO TITLE 10- (1) Part IV of subtitle A of title 10, United States Code, is amended by adding at the end the following new chapter:

‘CHAPTER 174--PROCUREMENT OF COMMERCIAL ITEMS

      ‘Sec.

      ‘2951. Policy.

      ‘2952. Acquisition of commercial items.

      ‘2953. Precedence; relationship to other laws.

      ‘2954. Specific acquisition procedures and restrictions.

      ‘2955. Pricing; remedy for inaccurate documentation; audit; nonexclusivity.

‘Sec. 2951. Policy.

    ‘To further achieve effective, efficient, and economic administration of the Federal procurement system, the Secretary of Defense shall, in accordance with applicable laws, Government-wide policies and regulations, and good business practices, implement a preference for the acquisition of commercial items by--

      ‘(1) whenever practicable, stating specifications in solicitation for bids and proposals in terms such that bidders and offerors are enabled and encouraged to offer to supply commercial items in response to agency solicitations;

      ‘(2) reducing impediments to the acquisition of commercial items in agency procurement policies, practices, and procedures not required by law; and

      ‘(3) requiring training of appropriate personnel in the acquisition of commercial items.

‘Sec. 2952. Acquisition of commercial items.

    ‘(a) MARKET RESEARCH- Before soliciting bids or proposals for a contract for property or services, the Secretary of Defense or the Secretary of the military department concerned shall conduct market research, appropriate to the circumstances, to determine whether the needs of the department can be met by the acquisition of commercial items.

    ‘(b) ADVOCATE FOR ACQUISITION OF COMMERCIAL ITEMS-

      ‘(1) ESTABLISHMENT- There is established in the Department of Defense the position of Advocate for the Acquisition of Commercial Items (hereinafter in this subsection referred to as the ‘Advocate’).

      ‘(2) FUNCTIONS- The Advocate shall--

        ‘(A) monitor compliance by the Department with the preference required under subsection (a) for the acquisition of commercial items;

        ‘(B) make recommendations and proposals to the Secretary of Defense regarding the reform of procurement statutes and regulations to implement that preference; and

        ‘(C) report to the Secretary of Defense on the prospective effect of proposed statutes and regulations on the acquisition of commercial items.

‘Sec. 2953. Precedence; relationship to other laws

    ‘(a) EXEMPTIONS FROM PRESENT LAW- In the acquisition of commercial items or commercial components by the Department of Defense, the following sections of this title do not apply:

      ‘(1) Section 2207.

      ‘(2) Section 2306(b).

      ‘(3) Section 2313.

      ‘(4) Section 2384(b).

      ‘(5) Section 2393.

      ‘(6) Section 2397c.

      ‘(7) Section 2408.

      ‘(8) Section 2410b.

      ‘(9) Section 2631.

    ‘(b) PRINCIPLE OF CONSTRUCTION WITH FUTURE LAWS- Notwithstanding any other provision of law enacted after the date of the enactment of this chapter, no provision of this chapter or of any other law expressly referenced in this chapter shall be held to have been amended by another law unless that law specifically refers to and amends such provision of this chapter or such provision of law expressly referenced in this chapter.

    ‘(c) RELATION TO SIMPLIFIED PROCEDURES- When commercial items are being procured by the Government, the provisions of this chapter, and regulations issued under this chapter, shall take precedence over regulations issued pursuant to section 2304(g) of this title. Nothing in this section shall affect the set-aside for small businesses established by section 15(j) of the Small Business Act (15 U.S.C. 644(j)).

    ‘(d) SET-ASIDES PRESERVED- Nothing in this chapter shall prevent the Secretary of Defense from restricting the award of prime contracts for commercial items to any source as may from time to time be prescribed or permitted by law.

‘Sec. 2954. Specific acquisition procedures and restrictions

    ‘(a) RESTRICTION TO FIXED PRICE BASIS- The Department of Defense shall purchase commercial items and components acquired under this chapter on a firm, fixed price basis or on a fixed price with economic price adjustment basis.

    ‘(b) ECONOMIC PRICE ADJUSTMENT- To the extent practical, contracts for commercial items shall not require contract performance for a term longer than customary industry practice for the product being acquired. Contracting officers may consider the use of economic price adjustment provisions if an extended period of performance cannot be avoided.

    ‘(c) REQUIREMENTS FOR COMMERCIAL AND NONDEVELOPMENTAL ITEMS- The Secretary of Defense shall ensure that, to the maximum extent practicable--

      ‘(1) requirements of the Department of Defense with respect to a procurement of supplies are stated in terms of--

        ‘(A) functions to be performed;

        ‘(B) performance required; or

        ‘(C) essential physical characteristics;

      ‘(2) such requirements are defined so that commercial or nondevelopmental items and commercial components may be procured to fulfill such requirements;

      ‘(3) such requirements are fulfilled through the procurement of commercial or nondevelopmental items and commercial components; and

      ‘(4) prior to developing new specifications, the Department conducts market research to determine whether commercial or nondevelopmemental items are available or could be modified to meet agency needs.

    ‘(d) CONTRACT QUALITY REQUIREMENTS- (1) To the maximum extent practicable, regulations issued under this chapter shall permit contractors providing commercial items to use their existing quality assurance systems and quality programs.

    ‘(2) To the maximum extent practicable, regulations issued under this chapter shall prohibit Government inspection or test of commercial items prior to tender of those items by the contractor for acceptance by the Government.

‘Sec. 2955. Pricing; remedy for inaccurate documentation; audit; nonexclusivity

    ‘(a) REQUIREMENT FOR DETERMINATION OF PRICE REASONABLENESS- (1) When a procurement for a commercial item or component by the Government or its contractors, using other than sealed bid procedures, has been based on adequate price competition, or when the price agreed on is based on prices of items or components sold in sufficient quantities to the general public to establish a market price, the contracting officer shall presume that the price contained in the most advantageous evaluated offer (price and all other factors considered) received in response to a solicitation, or a price based on established market prices, is fair and reasonable unless the contracting officer has information that the price is not fair and reasonable. Prior to the award of a contract where price is based on market prices, the contracting officer shall make reasonable efforts to establish the currency and accuracy of such prices.

    ‘(2) When paragraph (1) is not applicable, the contracting officer shall use price analysis to determine whether or not the price is fair and reasonable.

    ‘(3) When required by the contracting officer prior to award or contract definitization, the contractor shall promptly furnish documentation adequate to demonstrate the market price of the item or items or otherwise needed to establish a fair and reasonable price. All documentation received from an offeror, if not otherwise in the public domain and if requested by the offeror and marked as confidential, shall be treated by the Government as confidential and exempt from disclosure to the extent permitted by section 552 of title 5.

    ‘(4) If the contracting officer determines under paragraph (1) or (2) that the price is fair and reasonable, no cost or pricing data may be required under the provisions of section 2306a of this title.

    ‘(b) GOVERNMENT’S REMEDY FOR INACCURATE DOCUMENTATION- When documentation is submitted pursuant to subsection (a)(3), the Government shall be entitled to a reduction in price, and the return of any overpayment, with interest thereon, if an offeror knowingly or negligently submits materially inaccurate or misleading documentation in support of a contract or modification, the contracting officer relies on such documentation in reaching a determination that a price is reasonable, and because of such reliance the price significantly exceeds that which would otherwise have been accepted. For purposes of applying this subsection, a contracting officer will be rebuttably presumed to have relied upon all material documentation supplied by an offeror.

    ‘(c) GOVERNMENT’S RIGHT TO AUDIT- The United States shall have the right to audit all documentation provided by an offeror under subsection (b) and all books and records of the offeror directly relating to such documentation, except that, if the offeror has made no representation as to the completeness of the documentation supplied, the United States shall have no right to audit for completeness. The audit right created by this subsection shall expire one year after the date of award of the contract or the date of the modification of a contract with respect to which documentation was provided. When contract price is established under this section, the Government shall have no audit rights other than those set out in this subsection.

    ‘(d) NON-EXCLUSIVITY- The Government’s rights and remedies available in this chapter are in addition to those otherwise provided by law.’.

    (2) The tables of chapters at the beginning of subtitle A of title 10, United States Code, and at the beginning of part IV of such subtitle are each amended by inserting after the item relating to chapter 173 the following new item:

2951’.

    (b) REGULATIONS AND SIMPLIFIED FORM CONTRACTS-

      (1) REVISION OF FAR- Unless otherwise specifically provided in this Act, not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulation issued under section 25(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(c)) shall be revised to implement the amendments made by this section.

      (2) SIMPLIFIED UNIFORM CONTRACT- (A)(i) The revision of the Federal Acquisition Regulation under paragraph (1) shall include issuance of one or more simplified uniform contracts for the acquisition of commercial items by the Department of Defense and shall require that such simplified uniform contract or contracts be used for the acquisition of commercial items to the maximum extent practicable. The uniform contract or contracts shall include only--

        (I) those contract clauses that are required to implement provisions of law applicable to such an acquisition; and

        (II) those contract clauses that are determined to be consistent with standard commercial practice and appropriate for inclusion in such contracts.

      (ii) In addition to the clauses described under clause (i), contracts for the acquisition of commercial items may include such clauses as are essential for the protection of the Federal Government’s interest in--

        (I) a particular contract, as determined in writing by the contracting officer for such contract; or

        (II) a class of contracts, as determined by the Secretary of Defense or Secretary of the military department concerned, in consultation with the Administrator for Federal Procurement Policy.

      (iii) Contracts for the acquisition of commercial items may not include any clause other than those clauses authorized under clause (i) or (ii).

      (B)(i) Except as provided in clause (ii), a prime contractor under a Department of Defense contract for the acquisition of commercial items may be required to include in subcontracts under such contract only those contract clauses that are required to implement provisions of law applicable to such subcontracts.

      (ii) In addition to the clauses described under clause (i), a contractor under a Department of Defense contract for the acquisition of commercial items may be required to include in a subcontract under such contract such clauses as are essential for the protection of the Federal Government’s interest in--

        (I) a particular subcontract, as determined in writing by the contracting officer for such contract; or

        (II) a class of subcontracts, as determined by the Secretary of Defense or Secretary of the military department concerned, in consultation with the Administrator for Federal Procurement Policy.

      (iii) The Department of Defense may not require a contractor for the acquisition of commercial items to include in a subcontract for that acquisition any clause other than those clauses authorized under clause (i) or (ii).

      (C) Notwithstanding subparagraphs (A) and (B) of this paragraph, the Department of Defense may use uniform contract clauses developed under paragraphs (2) and (3) of section 824(b) of the National Defense Authorization Act for Fiscal Years 1990 and 1991 (10 U.S.C. 2325 note; Public Law 101-189) until September 30, 1995.

      (3) WARRANTIES- The Federal Acquisition Regulation shall require that, to the maximum extent practicable, the Department of Defense shall take advantage of warranties offered by commercial contractors and use such warranties for the repair and replacement of commercial items.

      (4) MARKET ACCEPTANCE- The Federal Acquisition Regulation shall direct the Department of Defense to require, where appropriate and in accordance with criteria prescribed in the regulations, offerors to demonstrate in their offers that products being offered have--

        (A)(i) achieved a level of commercial market acceptance necessary to indicate that the products are suitable for the Department’s use; or

        (ii) been satisfactorily supplied under current or recent contracts for the same or similar requirements; and

        (B) otherwise meet the product description, specifications, or other criteria prescribed by the public notice and solicitation.

      (5) PAST PERFORMANCE- The Federal Acquisition Regulation shall provide guidance to the Department of Defense on the use of past performance of products and sources as a factor in award decisions.

TITLE IX--EFFECTIVE DATE

SEC. 901. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.