FY17 Defense Authorization Committees' Key Acquisition-Policy Provisions - AT&L

Transcription

1 FY17 Defense Authorization Committees' Key Acquisition-Policy Provisions - AT&L Procurement (Title I) HASC Bill (H.R. 4909) SASC Bill (S. 2943) Section 111: Multiyear Procurement Authority for AH 64E Apache Helicopters Section 113: Multiyear procurement authority for AH 64E Apache helicopters This section would authorize the Secretary of the Army to enter into one or more multiyear contracts for AH 64E Apache helicopters beginning in fiscal year 2017, committee recommends a provision that would allow the Secretary of the Army to enter into a multiyear contract for AH 64E Apache helicopters for fiscal in accordance with section 2306b of title 10, United States Code. years 2017 through proposed multiyear procurement will produce significant savings and facilitate industrial stability. AH 64E is a core aviation program and is approved for fullrate production through the current future years defense program. minimum need for the AH 64E is not expected to decrease during the contemplated multiyear procurement period. If the proposal is approved, the Army buy will consist of 275 AH 64E Apache helicopters between fiscal years 2017 and request for proposal (RFP) was released with a minimum quantity of 46 per year, with options for remanufactured quantities up to 75 per year. RFP included new build quantities, as a contract option, of up to 30 per year. In no year would total quantities of remanufactured and new build aircraft exceed 90 per year. Section 112: Multiyear Procurement Authority for UH 60M and HH 60M Black Hawk Helicopters Section 112: Multiyear procurement authority for UH 60M/HH 60M Black Hawk helicopters This section would authorize the Secretary of the Army to enter into one or more multiyear contracts for UH 60M and HH 60M Black Hawk helicopters beginning committee recommends a provision that would allow the Secretary of the Army to enter into a multiyear contract for UH 60M/HH 60M Black Hawk in fiscal year 2017, in accordancen with section 2306b of title 10, United States Code. helicopters for fiscal years 2017 through proposed multiyear procurement will produce significant savings and facilitate industrial base stability. UH 60M/HH 60M Black Hawk is a core aviation program and is approved for full-rate production through the future years defense program. If the proposal is approved, the Army buy will consist of 193 UH 60M aircraft and 75 HH 60M aircraft between fiscal years 2017 and Navy is not expected to participate in this multiyear procurement. request for proposal solicitation was released with a minimum quantity of 36 helicopters per year and a base quantity of 50 helicopters per year with options to increase the maximum quantity to 72 helicopters per year. Section 121: Procurement Authority for Aircraft Carrier Programs This section would provide economic order quantity authority for the construction of two Ford-class aircraft carriers and incremental funding authority for the nuclear refueling and complex overhaul of five Nimitz-class aircraft carriers. Section 122: Sense of Congress on Aircraft Carrier Procurement Schedules This section would provide the sense of Congress that the Secretary of the Navy s schedule to procure 1 aircraft carrier every 5 years will reduce the overall aircraft carrier inventory to 10 aircraft carriers, a level insufficient to meet peacetime and war plan requirements. section also recommends that the Secretary begin construction for the Ford-class aircraft carrier designated CVN 81 in fiscal year 2022 and align advance procurement activities with this accelerated programming. Section 123: Certification on ship deliveries committee recommends a provision that would require the Secretary of the Navy to deem ship delivery to occur at the completion of the final phase of construction. Secretary would be required to submit a certification to the congressional defense committees not later than January 1, 2017 that certifies ship delivery dates have been adjusted, including the ship hull numbers and delivery date adjustments. adjustments would be reflected in the budget of the President submitted under section 1105(a) of title 31, United States Code, as well as Department of Defense Selected Acquisition Reports. committee notes that justification materials, which accompanied the President s fiscal year 2016 and 2017 budgets, as well as Department of Defense Selected Acquisition Reports for the CVN 78 class aircraft carrier program, list the delivery date of USS John F. Kennedy (CVN 79) as June However, the Navy plans to deliver this ship in two phases. Phase I delivery, scheduled to complete in June 2022, will deliver the ship with full propulsion capability, aircraft launch and recovery systems, and safe to sail navigation systems. Phase II delivery, scheduled to complete in September 2024, will add the remaining electronics and ordnance equipment, including the Ship Self-Defense System, weapons systems, and Enterprise Air Search Radar. committee believes CVN 79 delivery should be deemed to occur at the end of Phase II delivery. Similarly, the committee understands all three ships in the Zumwalt-class will employ a dual delivery approach with hull, mechanical, and electrical (HM&E) systems delivery at the shipbuilder in Maine and combat systems activation in California. In the case of USS Zumwalt (DDG 1000), HM&E delivery is scheduled for 2016 and combat systems activation is scheduled for committee notes the President s fiscal year 2017 budget lists April 2016 as the delivery date. committee believes Zumwaltclass delivery should be deemed to occur at the completion of the dual delivery approach, following combat systems activation. committee is concerned the variance in the Navy s definition of ship delivery may obscure oversight of the program s schedule, including whether or not a project has breached its threshold delivery date. committee is also concerned Navy ships are being delivered in various degrees of completion and then, after a period of availabilities and shakedowns, possibly several years later, the ship is delivered to the fleet for operations. CVN 79 and the Zumwaltclass programs illustrate this practice. Section 123: Design and Construction of LHA Replacement Ship Designated LHA 8 This section would authorize the Secretary of the Navy to enter into and incrementally fund a contract for design and construction of the LHA Replacement ship designated LHA 8. Section 121: Incremental funding for detail design and construction of LHA replacement ship designated LHA 8 committee recommends a provision that would allow the Secretary of the Navy to enter into and incrementally fund a contract for detail design and construction of the LHA Replacement ship, designated LHA 8. Subject to the availability of appropriations, funds for payments under the contract may be provided from amounts authorized to be appropriated for the Department of Defense for Shipbuilding and Conversion, Navy, for fiscal years 2017 and Section 124: Design and Construction of Replacement Dock Landing Ship Designated LX(R) or Amphibious Transport Dock Designated LPD 29 This section would authorize the Secretary of the Navy to enter into and incrementally fund a contract for design and construction of the replacement dock landing ship designated LX(R) or the amphibious transport dock designated LPD 29. Report p. 25 Amphibious ship replacement LX(R) budget request included no funding in line item 13 of Shipbuilding and Conversion, Navy for advance procurement of the amphibious ship replacement LX(R), which is expected to functionally replace LSD 41 and LSD 49 class ships. committee supports accelerating the construction of LX(R) class ships, provided the ships are competitively awarded. refore, the committee recommends an increase of $50.0 million for this program. Section 125: Ship to Shore Connector Program This section would authorize the Secretary of the Navy to enter into a contract for the procurement of up to 45 Ship to Shore Connector vessels. Section 126: Limitation on Availability of Funds for Littoral Combat Ship or Successor Frigate Report p. 25 Littoral Combat Ship This section would prohibit the Department of the Navy from selecting a single contractor for the Littoral Combat Ship or frigate program until the Secretary of the budget request included $1.1 billion in line item 11 of Shipbuilding and Conversion, Navy for procurement of two Littoral Combat Ships. committee notes Navy certifies to the congressional defense committees that such a selection of a single contractor is conducted using competitive procedures and is performed for unjustified unit cost growth in the other cost ($24.0 million) and other electronics ($4.0 million) categories, which increased without justification despite a quantity the purpose of constructing a frigate class ship. reduction compared to fiscal year refore, the committee recommends a decrease of $28.0 million in procurement for this program. Section 122: Littoral Combat Ship committee recommends a provision that would require an annual report on Littoral Combat Ship (LCS) mission packages, a certification on the acquisition inventory objective of LCS mission packages, a limitation on the use of funds to revise or deviate from revision three of the LCS acquisition strategy, and a repeal of a reporting requirement related to LCS mission modules. Section 126: Limitation on procurement of USS John F. Kennedy (CVN 79) and USS Enterprise (CVN 80) committee recommends a provision that would limit more than 25 percent of funds authorized to be appropriated by this Act or otherwise made available for fiscal year 2017 for advance procurement or procurement of USS John F. Kennedy (CVN 79) or USS Enterprise (CVN 80) from being obligated or expended until the Secretary of the Navy and Chief of Naval Operations submit a report to the congressional defense committees. Section 134: Prohibition on Availability of Funds for Retirement of A 10 Aircraft Section 141: Extension of prohibition on availability of funds for retirement of A 10 aircraft This section would prohibit funds authorized to be appropriated by this Act, or otherwise made available for fiscal year 2017, for the Department of the Air Force to committee recommends a provision that would amend section 142 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law ) by retire, prepare to retire, or place in storage any A 10 aircraft. This section would also maintain a minimum of 171 A 10 aircraft designated as primary mission extending the prohibition on obligation or expenditure of funds to retire or prepare to retire A 10 aircraft until the Secretary of the Air Force and Chief of Staff of aircraft inventory, and prohibit the Secretary of the Air Force from making any significant reductions to manning levels with respect to any A 10 aircraft squadron the Air Force submit a report to the congressional defense committees describing their views on the results of the F 35A initial operational test and evaluation or division until the Director of Operational Test and Evaluation, and the Secretary of the Air Force, submit reports to the congressional defense committees on the (IOT&E). Section results and findings of the initial operational test and evaluation of the F 35 aircraft program, as well as the comparison test and evaluation that examines the 142: Limitation on availability of funds for destruction of A 10 aircraft in storage status capabilities of the F 35A and A 10C. committee recommends a provision that would limit the availability of fiscal year 2017 funds for the purpose of scrapping, destroying, or otherwise disposing of any A 10 aircraft in any storage status in the Aerospace Maintenance and Regeneration Group (AMARG) that have serviceable wings or other components that could be used to prevent total active inventory A 10 aircraft from being permanently removed from flyable status due to unserviceable wings or other components.

2 Section 135: Prohibition on Availability of Funds for Retirement of Joint Surveillance Target Attack Radar System Aircraft This section would prohibit retirement of Joint Surveillance Target Attack Radar System aircraft in fiscal year Section 146: Limitation on availability of funds for Joint Surveillance Target Attack Radar System (JSTARS) recapitalization program committee recommends a provision that would limit the availability of fiscal year 2017 and beyond funds for the Joint Surveillance Target Attack Radar System (JSTARS) recapitalization program unless the contract for engineering and manufacturing development (EMD) uses a firm fixed price contract structure. Research, Section 216: Prohibition on Availability of Funds for Countering Weapons of Mass Destruction System Constellation Development, Test, This section would prohibit the Department of Defense from obligating or expending any funds in fiscal year 2017 for research, development, and prototyping of and Evaluation the countering weapons of mass destruction situational awareness information system, known as Constellation. This section would also require the Chief (Title II) Information Officer of the Department of Defense, in consultation with the Director of the Defense Information Systems Agency, to submit a report to the congressional defense committees by February 1, 2017, on the requirements and program plan for the Constellation system. Section 217: Limitation on Availability of Funds for Defense Innovation Unit Experimental This section would limit the amount of authorized funds available to be obligated or expended for the Defense Innovation Unit Experimental (DIUx) until the Secretary of Defense provides a report to the congressional defense committees on the charter for and the use of funds to establish and expand DIUx. Section 219: Restructuring of the Distributed Common Ground System of the Army Section 111: Distributed Common Ground System-Army This section would require the Secretary of the Army to discontinue development efforts for any component of the Distributed Common Ground System (DCGS) of committee notes that DCGS A is operationally suitable and effective when operating from fixed sites and providing direct support to operational and strategic the Army after Increment 1 where commercial software exists that is capable of fulfilling at least 80 percent of the system requirements. This section would also forces. However, the committee also notes that DCGS A is not suitable or effective in providing a reliable capability to tactical forces operating in the field. Army require a review of the acquisition strategy to ensure commercial software procurement is the preferred method to meet program requirements. This section would BCTs and battalions are required to improvise to overcome unreliable hardware and complex software. Operator knowledge and proficiency is low because of this also prohibit the development of any capability for DCGS if such capability is available for purchase in the commercial market. complexity. Unit readiness is adversely impacted. committee recommends a provision that would require the Secretary of the Army to take action to improve training of DCGS A operators and their leaders at division and below echelons. Secondly, the Secretary of the Army should rapidly identify and field an effective, suitable and survivable solution for division and below tactical units. Secretary of the Army shall acquire a commercially available off the shelf, nondevelopmental capability that meets essential tactical operational requirements for processing, analyzing and displaying intelligence information; is substantially easier for personnel in tactical units to use; and requires less training. Secretary of the Army may not award any contract or expend any funds for the design, development, procurement, or operation and maintenance of any data architecture, data integration, cloud capability, data analysis, or data visualization and workflow capabilities, including various warfighting function-related tools under or contributing to any increment of the distributed common ground system of the Army for tactical units at division or below unless the contract is awarded not later than 180 days after the date of the enactment of this Act and uses procedures relating to the acquisition of commercial items pursuant to part 12 of the Federal Acquisition Regulations (48 CFR et seq.), and the contract uses firm fixedprice procedures. In addition, the technology to be acquired will begin initial fielding rapidly after the contract award; achieve Initial Operating Capability (IOC) within 9 months of the contract award; and achieve Full Operating Capability (FOC) within 18 months of the contract award. Section 234: Pilot Program on Modernization of Electromagnetic Spectrum Warfare Systems and Electronic Warfare Systems This section would allow the Secretary of Defense to carry out a pilot program on the modernization of spectrum warfare systems and electronic warfare systems. Sec. 897: Enhancement of electronic warfare capabilities committee recommends a provision that would amend section 806(c)(1) of the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (Public Law ) to add a new subparagraph addressing the rapid acquisition of electronic warfare capabilities. This provision would enhance the abilities of the Secretary of Defense to respond to the increasingly urgent threat in the area of electromagnetic spectrum warfare and more quickly field critical electronic warfare technologies. Operation and Maintenance (Title III) Section 323: Limitation on Availability of Funds for Defense Contract Management Agency This section would limit funding for the Defense Contract Management Agency (DCMA) until the DCMA Director provides a briefing to the Committees on Armed Services of the Senate and the House of Representatives on the agency s plan to foster the adoption, implementation, and verification of the Department of Defense s revised Item Unique Identification policy across the Department and the defense industrial base. Health Care Provisions (Title VII) Section 706: Incentives for Value-Based Health Under TRICARE Program This section would authorize the Secretary of Defense to develop and implement value-based incentive programs as part of the TRICARE contracts to encourage health care providers under the TRICARE program to improve the quality of care and the experience of the covered beneficiaries. Not later than 1 year after implementation of a value-based incentive program and annually thereafter through 2022, the Secretary of Defense would be required to brief the Committees on Armed Services of the Senate and the House of Representatives, and any other appropriate congressional committee, on the quality performance metrics and expenditures related to the incentive program. Sec. 726: Acquisition of medical support contracts for TRICARE program Would require the SecDef to conduct a new competition of all medical support contracts, except the overseas medical support contract, with private sector entities under the TRICARE program by January 1, 2018, upon expiration of each such contract. Acquistion Sec. 801: Revision to authorities relating to Department of Defense Test Resource Management Center This Policy, Acquisition section would amend section 196 of title 10, United States Code, by limiting application of the existing law to the Major Range and Test Facility Base and those test and evaluation facilities that are used to support the acquisition programs of the Department of Defense. amendment would align the statute to the original Management and enactment in the National Defense Authorization Act for Fiscal Year 2003 (Public Law ) and would prevent reporting requirements from being broadened Related Matters (Title VIII) to small laboratory and educational test and evaluation facilities. section would also define the term significant change in test and evaluation facilities. Sec. 801: Rapid acquisition authority amendments committee recommends a provision that would amend section 806 of the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (Public Law ) to better integrate and conform the provision with the rapid acquisition authorities established in section 804 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law ). Sec. 802: Amendments to restrictions on undefinitized contractual actions This section would amend section 2326 of title Sec. 816: Modified restrictions on undeifnitized contractual actions 10, United States Code, to require the Department of Defense to consider the cost risk to the contractor as of the date that a qualifying proposal to definitize a contract was submitted if the contract was not then definitized within the statutory 180-day period. section would also apply the 180-day definitization period committee recommends a provision that would amend section 2326 of title 10, United States Code, to revise policies regarding undefinitized contractual actions (UCAs). committee is concerned that over the past decade the use of UCAs by the services and defense agencies has grown significantly while the speed at to foreign military sales contracts and would amend the definition of a qualifying proposal to a proposal that contains sufficient information to enable a meaningful which these UCAs are definitized has lagged. To address this situation, the provision would: (1) require a written determination by senior officials to extend a UCA audit of the definitization proposal. beyond 90 days; (2) require UCAs to be awarded on a fixed price level of effort basis; and (3) extend the 180 day definitization requirement to contracts in support of Foreign Military Sales cases. Sec. 803: Revision to requirements relating to inventory method for Department of Defense Contracts for Services This section would amend section 2330a of title 10, United States Code, to revise the current requirement related to how the Department of Defense accounts for and reports contracts for services. Sec. 820: Modified data collection requirements applicable to procurement of services committee recommends a provision that would amend section 2330a of title 10, United States Code, to clarify the applicability of the contractor inventory requirement to staff augmentation contracts and to reduce data collection and unnecessary reporting requirements. committee notes that the RAND corporation is undergoing a review mandated by section 807 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law ) to examine and report to the committee the current approach taken by the Department of Defense to comply with section 2330(a) of title 10, United States Code. Sec. 804: Procurement of personal protective equipment This section would amend section 884 Sec. 829D: Avoidance of use of brand names or brand-name or equivalent descriptions in solicitations Would (1) of the National Defense Authorization Act for Fiscal Year 2016 (Public Law ) to clarify source selection criteria to be used in the procurement of personal prohibit the use of reverse auctions and lowest priced technically acceptable (LPTA) contracting methods for the procurement of personal protective equipment protective equipment or critical safety items. criteria are that best value, rather than reverse auction or lowest price technically acceptable, contracting methods where the level of quality needed or the failure of the item could result in combat casualties; and (2) establish a preference for best value contracting methods when should be used in source selections to the maximum extent practicable. procuring such equipment.

3 Sec. 804: Modernization of services acquisition Requires the SecDef to revise the Department of Defense Instruction , dated January 6, SecDef would be required to provide more guidance as to how the acquisition community should address the changing nature of technology and services markets and also perform a review of the instructions current categories of services acquisition and make changes as necessary. SecDef also required to issue new guidance to address the training and development of the acquisition workforce, particularly those involved in the acquisition of services. Sec. 805: Revision to Effective Date of Senior Executive Benchmark Compensation for Allowable Cost Limitations This section would remove the retroactive application requirement of section 803 of the National Defense Authorization Act for Fiscal Year 2012 (Public Law ), which implemented a cap on the allowable compensation of contractor employees. As a result of this revision, section 803 would apply to compensation costs incurred after January 1, 2012, under contracts entered into on or after December 31, Sec. 805: Modified notification requirement for exercise of waiver authority to acquire vital national security capabilities Would amend subsection(d) of section 806 of NDAA for FY 2016 (Public Law ) to provide for a notification to Congress not later than ten days after the any use of the waiver authority to acquire vital national security capabilities outlined earlier in section 806. Note: FY 16 assignment spreadsheet shows 5000 update needed Sec. 806: Amendments Related to Detection and Avoidance of Counterfeit Electronic Parts This section would modify section 818 of the National Defense Authorization Act for Fiscal Year 2012 (Public Law ) by replacing the term trusted suppliers with the term suppliers that meet anticounterfeiting requirements, as well as related conforming amendments. committee is aware that the term trusted in this context has created some confusion, since trusted suppliers refers to a specific category of microelectronics suppliers that have been accredited by the Defense Microelectronics Activity. Counterfeit parts refer to a much broader set of circumstances and require a broader definition of the supplier base needed to address counterfeiting concerns. Sec. 807: Amendments to Special Emergency Procurement Authority Section Sec. 829C: Special emergency procurement authority to facilitate the defense against or recovery from a cyber, nuclear, biological, chemical, or radiological 807 would amend 41 USC section 1903, to expand the permissible uses of special emergency procurement authorities to include support of international disaster attack Amend 10 USC assistance and support of a national emergency or natural disaster relief efforts in the US as defined by the Robert T. Stafford Disaster Relief and Emergency Assistance Act. chapter137, to add a new section that would grant the SecDef special emergency procurement authority for property or services that would facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack against the US. Section 1631: Cyberspace-related Matters Would modify the current special procurement authority in 41 USC section 1903(a)(2), to include use of such authority for recovery from or defense against cyber attacks. Sec. 808: Compliance with domestic source requirements for footwear furnished to enslisted members of the Armed Forces upon their initial entry into the Armed Sec. 671: Compliance with domestic source requirements for footwear furnished to enlisted members of the Armed Forces upon their initial entry into the Armed Forces This section would amend Forces Would require the Secretary section 418 of title 37, United States Code, to require the Department of Defense to adhere to the requirements of section 2533a of title 10, United States Code, and of Defense to furnish athletic footwear directly to memebers of the Army, Navy, Air Force and Marine Corps instead of providing a cash allowance. Such footwear issue 100 percent American-made athletic shoes to new recruits upon entrance to basic training. This section would also allow waivers to be granted in cases of must comply with 10 USC section 2533a. medical necessity. Sec. 809: Requirement for policies and standard checklist in procurement of services Would establish a procurement policy checklist to ensure accountability in the acquisition of services. Sec. 809 A: Extension of limitation on aggregate annual amount available for contract services Would extend the cap on the total spending for services contracts by 1 year. Sec. 905: Limitations on funds used for staff augmentation contracts at management headquarters of the Department of Defense and the military departments committee recommends a provision that would limit the amount of funds available for staff augmentation contracts at the Office of the Secretary of Defense and the headquarters of the military departments for fiscal years 2017 and 2018 to not more than the amount expended for those contracts in fiscal year provision would further require a 25 percent reduction to the fiscal year 2016 funding for those contracts after fiscal year Sec. 809 B: Extension of authority for enhanced transfer of technology developed at Department of Defense laboratories Would amend Section 801(e) of the National Defense Authorization Act for FY14 (Public Law ; 127 Stat ; 10 U.S.C. 2514) by extending the authority for enhanced transfer of technology developed at DoD laboratories from 2017 to Sec 899: Extension of enhanced transfer authority for technology developed at Department of Defense laboratories committee recommends a provision that would amend section 801 of the National Defense Authorization Act for Fiscal Year 2014 (Public Law ) to extend the authorization granted to the Secretary of Defense and service secretaries in the Act until committee notes the importance of the ability for the Department of Defense (DOD) to license DOD-owned intellectual property that may not have been patented yet and to maintain associated royalties for the advancement of DOD laboratories and innovation. Sec. 811: Change in date of submission to Congress of selected Acquisition Reports amend section 2342(f) of title 10, United States Code, by changing, from 45 to 10, the number of days after the President s budget request transmittal that comprehensive annual Selected Acquisition Reports are due to Congress. Would Sec. 811: Defense cost accounting standards Would create a new Defense-specific CAS Board to create standards addressing the measurement, assignment, and allocation of contractor costs. This action would result in unnecessary overlap and duplication with the functions of the existing Government-wide CAS Board and could result in contractors with both Defense and civilian contracts having to comply with two different standards for the same cost issue. Requiring the use of generally accepted accounting principles (GAAP) would impose inappropriate constraints on the Board's ability to carry out its responsibilities. GAAP focuses on reporting the financial results of overall operations, and addresses neither the allocation of costs to individual contracts nor the allowability of contract costs. Section 811 also imposes inappropriate limitations on the Defense Contract Audit Agency (DCAA) despite its historical success in savings on average of $3 billion annually due to findings, primarily those related to noncompliances with CAS and the Federal Acquisition Regulation Cost Principles. Commercial audit firms would audit GAAP costs, while DCAA would be limited to audits of direct costs on cost contracts and to audits of indirect costs only at contractors where their Government cost-type contracts are more than 50 percent of the entities' total sales. This would exclude some of DOD's largest contract from DCAA oversight. Audits by both DCAA and commercial audit firms would create burdens and inefficiencies for both contractors and Government agencies. Sec. 812: Amendments relating to independent cost estimation and cost analysis Amends 10 USC 2334 & 2434 to reemphasize that Office of (CAPE) conducts or approves independent cost estimates (ICEs) for all (MDAPs) and (MAIS) and authorizes CAPE to approve ICEs conducted by Services rather than conducting all ICEs itself. Provision also requires assessments of risk and potential consequences in independent cost estimates, rather than current reporting of confidence intervals, and standardizes/increases scope of cost data collected by CAPE to create an DoD-wide enterprise cost data repository for costing and acquisition functions. Sec. 803: Conduct of independent cost estimation and cost analysis Amends 10 USC 2334 & 2434 to remove ambiguity concerning the roles and responsibilities for the conduct of independent cost estimates (ICE s) by designating D,CAPE to ensure standards are met, and ensures that SECDEF is only approving MDAPS after reviewing a full life-cycle cost estimate conducted by an independent entity that may also provide cost-saving and risk reducing alternative courses of action. Sec. 836: Amends 10 USC 2Disclosure of risk in cost estimates 334(d) to remove requirement for disclosure of confidence levels for baseline estimates of MDAPs, and requires D,CAPE & Service Secretaries to: (1) issue guidance requiring discussion of risk for program; (2) ensure required cost estimates are developed based on historical actual cost information (3) ensure that information required by new guidance on risk be included in any decision docs approving a cost estimate. Sec. 812: Increased micro-purchase threshold applicable to Department of Defense procurements Would amend 10 USC Chapter to establish the micro-purchase threshold for Department of Defense activities at $5,000. DPAP Leg proposal: Increase to $10K. SAP advocates to $10K & be broadened to entire Federal GovernmentAdds new 10 USC 2338 to establish micro-purchase threshold for DoD activities at $5,000. Sec. 813: Revisions to Milestone B Determinations This section would amend section Sec 835: Modification of certain Milestone B certification requirements 2366b of title 10, United States Code, to remove the requirement for the milestone decision authority, prior to milestone B approval, to determine affordability and committee recommends a provision that would amend section 2366b(a)(3) of title 10, United States Code to eliminate the need for waivers that are regularly funding levels for a major defense acquisition program relative to the Future Years Defense Program submitted during the year in which the determination is made. submitted to the committee for programs that are executed at the beginning of the fiscal year but before the future years defense program (FYDP) has been Since the Future Years Defense Program is not developed until the end of the year, the current requirement is typically waived. section would maintain the requirement to determine affordability based on unit cost and total life-cycle cost, as well as determine the expected funding for product development and submitted, and should receive Milestone B certification as long as there is funding in the current FYDP. This provision should reduce the number of required waivers and therefore reduce unnecessary staff burden. production. Sec. 813: Enhanced competition requirements Would amend 10USC section 2306a to clarify the definition of competition and the role of the prime contractor in determining whether a subcontract meets the competitive or commercial test under the section.

4 Sec. 814: Review and report on sustainment planning in the acquisition process This section would require the Secretary of Defense to enter into a contract with an independent entity with appropriate expertise to conduct an assessment of the extent to which sustainment matters are considered in decisions related to requirements, acquisition, cost estimating, and programming and budgeting for major defense acquisition programs (MDAPs). This section would require the Secretary to provide a briefing to the Committees on Armed Services of the Senate and the House of Representatives not later than March 1, 2017, on the preliminary findings of the independent entity. This section would also require the Secretary to submit to the congressional defense committees by August 1, 2017, the final report of the independent entity, his comments on the final report, and proposed revisions to laws or regulations. Sec. 814: Elimination of bid and proposal costs and other expenses as allowable independent research and development costs on certain contracts Would amend 10 USC section 2372, to clarify in what circumstances that independent research and development costs are considered fair, reasonable, and allowable expenses on DOD contracts. provision would authorize that up to 5 percent of the total amount of the work performed by a contractor on procurement and research, development, test, and evaluation activities during the preceding fiscal year could be spent on qualified independent research and development (IR&D) and be determined fair and reasonable by the Department. Sec. 815: Revision to distribution of annual report on operational test and evaluation This section would amend section 139 of title 10, United States Code, by including the Secretaries of the military departments in the list of people who receive and who may comment on the annual report of the Director of Operational Test and Evaluation. section would also extend the annual report through January 31, This amendment would supersede section 1080 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law ). Sec. 815: Exception to requirement to include cost or price to the Government as a factor in the evaluation of proposals for certain multiple-award task or delivery order contracts Section 815 would simplify proposal requirements for certain services under Multiple Award task order contracts. Administration estimates that multi-agency contracts or Government-wide acquisition vehicles account for approximately half of all service contract dollars awarded each year. To receive the greatest benefit of this section and create parity among acquisition vehicles, the Administration supports expanding this provision to all multi-agency contracts or Governmentwide acquisition vehicles including the Federal Supply Schedules. Administration also appreciates inclusion of section 868 which would provide pilot authority for the Department to acquire, on a pilot basis, innovative commercial items in the same manner as it acquires research and development, but urges the Congress to broaden the pilot to include the Department of Homeland Security and the General Services Administration so that they too may take advantage of the pilot to obtain emerging technologies more efficiently. Sec. 817: Non-traditional contractor definition Would amend 10 USC section 2302(9), to clarify the definition of a non-traditional contractor. To address the definition of entity which was intended to be interpreted as allowing specific business units within a corporation to be considered as a non-traditional contractor. Sec. 818: Comprehensive small business contracting plans Would amend 10 USC chapter 137 to add a new section that would codify the authority to conduct small business subcontracting plans. Sec. 821: Revision to Definition of Commercial Item This section would amend section 103 of title 41, United States Code, to expand the types of nondevelopmental items that may be considered commercial items to include items that the procuring agency determines were developed at private expense and sold in substantial quantities on a competitive basis to foreign governments. Currently, nondevelopmental items are limited to items sold to multiple State and local governments. This section would eliminate the requirement that a nondevelopmental item be sold to multiple governments to be considered a commercial item. This section also would prescribe that nothing in this section shall affect the meaning of the term commercial item under section 2464 of title 10, United States Code, regarding core logistics capabilities. Sec. 822: Market research for determination of price reasonableness in acquisition of commercial items This section would amend section 2377 of title 10, United States Code, relating to the preference for acquisition of commercial items by adding a new subsection that would require procurement officials of the Department of Defense to conduct or obtain market research when determining price reasonableness for commercial items. Sec. 823: Value analysis for the determination of price reasonableness This section would amend section 2379(d) of title 10, United States Code, by adding a new paragraph that would allow contractors to submit information or analysis pertaining to the value of a commercial item when responding to solicitations. This section would also allow contracting officers to consider value analysis, in addition to historic pricing data, when determining price reasonableness for commercial items. Sec. 824: Clarification of requirements relating to commercial item determinations This section would amend section 2380 of title 10, United States Code, to expand Department of Defense centralized records relating to commercial item determinations to include market research and price reasonableness analysis. This section would also eliminate the requirement that such records be publicly accessible. Sec 821: Government Accountability Office bid protest reforms Would amend 10 USC chapter 137 to add a new section to outline the role of GAO in bid protests on certain contracts with the DoD. would require a large contractor filing a bid protest on a defense contract with GAO to cover the cost of processing the protest if all of the elements in the protest are denied in an opinion issued by GAO. Would also impose a withhold on payments above incurred costs on any bridge or temporary contract to an incumbent contractor who submits a protest and that protest results in the issuance of a bridge or temporary contract. Sec. 823: Treatment of side-by-side testing of certain equipment, munitions, and technologies manufactured and developed under cooperative research and development agreements as use of competitive procedures Would amend 10 USC section 2350a(g), to add a new paragraph to clarify that the general solicitation and testing competitive procedures used under the program are competitive procedures under 10 USC chapter 137. Sec. 824: Defense Acquisition Challenge Program Would amend 10 USC section 2359b(a)(2), to expand the scope of the defense acquisition challenge program to include alternatives to existing acquisition programs and to clarify that the general solicitation competitive procedures used under the program are competitive procedures under 10 USC chapter 13. Sec. 825: Pilot program for authority to acquire innovative commercial items using general solicitation competitive procedures This section would allow the Secretary of Defense to carry out a pilot program under which innovative commercial items may be acquired through a competitive selection of proposals, resulting from a general solicitation and the peer review of such proposals. Sec. 868: Pilot program for authority to acquire innovative commercial items, technologies, and services using general solicitation competitive procedures Would grant the SecDef the authority to carry out a pilot program to acquire innovative commercial items on a fixed-price basis using general solicitation competitive procedures and a peer review of such proposals. May not enter into a contract under the pilot program for an amount in excess of $100,000,000. authority shall expire on September 30, DPAP Leg proposal: SAP urges the Congress to broaden the pilot to include DHS & GSA. Sec. 831: Review and report on the bid protest process Would require SecDef to contract with an independent entity within 30 days to conduct a review of the bid protest process related to MDAPs. Requires a review of bid protest processes related to MDAPs to include an assessment of incident & duration of bid protests, whether bid protests have delayed procurements actions, and whether bid protests are frequent by, or provide financial benefits to, incumbent contractors. SecDef to brief on interim findings by March 1, 2017, and submit a final report by July 1, Sec 822: Report on bid protests Would require the SecDef to contract with a research entity to carry out a comprehensive study on the prevalence and impact of bid protests on DoD acquisitions. Report due to the congressional defense committees 1 year after the enactment of this Act. Sec. 847: Promotion of value-based defense procurement This section would require the Sec. 825: Use of Lowest Price Technically Acceptable source selection process Would require Department of Defense to avoid using the lowest price technically acceptable source selection criteria when the procurement is for the acquisition of information technology services, systems engineering and technical assistance services, audit or audit readiness services, or other knowledge-based professional services (with exceptions? How much info on this). DoD to revise the DFARS to limit the use of lowest price technically acceptable (LPTA) source selection criteria in circumstances that would potentially deny the Department the benefits of cost and technical tradeoffs in the source selection process. Department would be required to only use LPTA criteria in specified circumstances and avoid to the maximum extent practicable for the procurement of knowledge-based professional services such as information technology services. Would requiresecdef to submit a RTC detailing instances for Which LPTA source selection criteria was used annually for the next 3 years.

5 Sec 826: Penalties for the use of cost-type contracts committee recommends a provision that would require the secretary of each military department and the head of each of the defense agencies to pay a penalty for the use of cost-type contracts in certain cases that are awarded in fiscal year 2018 through fiscal year penalty would equal 2 percent of obligated funds in the case of new contracts using procurement funds or 1 percent in the case of new contracts using research, development, test, and evaluation funds, with some limited exceptions. Sec. 827: Preference for fixed-price contracts Would require the secretary of each military department and the head of each of the defense agencies to pay a penalty for the use of cost-type contracts in certain cases that are awarded in FY 2018 through FY penalty would equal 2 percent of obligated funds in the case of new contracts using procurement funds or 1 percent in the case of new contracts using RDT&E funds, with some limited exceptions. Sec. 828: Requirement to use firm fixed-price contracts for foreign military sales Would require SecDef to prescribe regulations to require the use of firm fixed-price contracts for foreign military sales not later than 80 days after the enactment. would grant the SecDef waiver authority if the Secretary determines that a different type of contract is in the best interest,of the US taxpayers Administration objects to section 828, which restricts the contract type for FMS. Frequently, DOD combines requirements with FMS requirements on a single contract, or has contractors concurrently producing weapon systems for its requirements and FMS requirements under separate contracts. If the Department were precluded from using the appropriate type contract in any particular environment, it would effectively constrain DOD's ability to deliver best value to the FMS customer, and eliminate opportunities to achieve efficiencies by combining U.S. and FMS requirements on the same contract. Sec. 829: Preference for performance-based contractual payments Would amend 10 USC section 2307(b), to establish a preference for performance-based payments to contractors. Administration objects to the provision of section 829 that would preclude DOD from conditioning performance-based payments on costs incurred. Performance-based payments are a method of contract financing and should not be used to pay contractors amounts in excess of costs incurred in advance of the Government's receipt of the item or service. Sec. 829A: Share-in-savings contracts Would amend 10 USC section 2332, to require DAU to develop and implement a training program for DoD acquisition personnel on share-in-savings contracts not later than 180 days after the enactment. Sec. 829B: Special emergency procurement authority to facilitate the defense against or recovery from a cyber, nuclear, biological, chemical, or radiological attack committee recommends a provision that would amend chapter 137 of title 10, United State Code, to add a new section that would grant the Secretary of Defense special emergency procurementauthority for property or services that would facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack against the United States. Sec. 829E: Sunset and repeal of certain contracting provisions Would require the SecDef to ensure that DoD bcontract language does not specify a brand name in solicitations unless justification for such a specification is provided and approved IAW 10 USC section 2304(f). Sec. 829F: Flexibility in contracting award program Would: (1) amend 10 USC, to sunset sections 2212, 2220, 2228, 2304e, 2421 by September 30, 2018; (2) amend 10 USC, to sunset section 1706 by September 30, 2019; and (3) repeal10 USC sections 2245a, 2225, 2302c, 2378, 2387 Sec. 829G :Products and services purchased through contracting program for firms that hire the severely disabled Would establish an award to recognize defense acquisition programs and acquisition professionals that make the best use of flexibilities and those authorities granted in the FAR and DoDI (Operation of the Defense Acquisition System) meant to increase the efficiency of programs. Administration strongly objects to section 829G, which would jeopardize approximately 33,000 existing jobs that DOD provides to people with severe disabilities, to include 2,800 veterans. Furthermore, this provision would effectively preclude the Department from awarding near-term contracts to enable opportunities for future employment for countless others with severe disabilities. Department is by far the largest single procurer of goods and services from Ability One within the Federal Government. provision would require DOD to perform several statutory duties that are currently performed by the Committee for Purchase From People Who Are Blind or Severely Disabled, the Federal agency that administers the Ability One Program. For example, section 829G would require DOD contracting officers to determine when a firm's (nonprofit agency) employee is significantly disabled and ensure their hours equate to the 75 percent Direct Labor Hour (DLH) ratio in this section. Current law requires the 75 percent DLH ratio to be calculated based on all DLH in the firm's entire facility during the fiscal year. Additionally, there would be no mechanism available to legally add products or services to the Procurement List, restricting contracting with non-profits that employ people with severe disabilities to those items that are currently on the List. re is no practical way for the Department's contracting officers to meet the pre-contract formation and post-contract administration requirements of section 829G and would therefore bring these contracts and renewals to a standstill along with the employment opportunities that these contracts provide. Sec. 829H: Applicability of Executive Order Fair Pay and Safe Workplaces to Department of Defense contractors Would prohibit the SecDef from arranging contracts through AbilityOne, or its central non-profit agency, SourceAmerica, and instead require the Secretary to contract directly with qualified nonprofit agencies for the severely disabled until the DoDIG certifies that: (1) the internal controls and financial management systems of AbilityOne and SourceAmerica are sufficient to protect DoD against fraud, waste and abuse; (2) there are fair opportunities for qualified nonprofit agencies for the severely disabled to compete for DOD contracts under the procurement list; and (3) pass-through contracts to contractors who are not qualified nonprofit agencies are limited to the maximum extent practicable to providing services and supplies necessary for qualified nonprofit agencies to assemble or produce a final product for use by DoD. Administration strongly objects to section 829H, which would limit DOD's application of EO ("Fair Pay and Safe Workplaces") only to contractors or subcontractors who have already been suspended or debarred as a result of Federal labor violations covered by the EO. Such limited applicability would undermine broader safeguards established by the President to ensure that agencies are identifying and working with contractors with track records of compliance with labor laws, which enhances productivity and increases the likelihood of timely, predictable, and satisfactory delivery of goods and services. Narrowing the scope of the EO to those contractors that have already been suspended or debarred would limit contracting officers' ability to identify contractors with track records of non-compliance. It also would limit enforcement agencies' ability to assist contractors with significant labor violations to improve their labor law compliance, including through the use of labor compliance agreements, before suspension and debarment becomes the only option. Sec. 829I: Contract closeout authority Would limit the application of the acquisition regulations mandated by Executive Order to contractors or subcontractors of the DoD that have been spended or debarred as a result of the federal labor law violations referenced in the EO in effect on May 28, 2015 Sec. 829J: Closeout of old Navy contracts Would grant the SecDef the authority to close out contracts entered into prior to fiscal year 2000 without completing further reconciliation audits other than those described in this section. Sec. 829K: Would grant SecNav authority to close out contracts entered into between FY 1974 and 1998 to design, construct, repair, or support the construction or repair of Navy submarines without completing further reconciliation audits other than those described in this section. Sec. 831: Repeal of major automated information systems provisions Would repeal chapter 144A of title 10, USC: Committee believes DoD does not need a separate acquisition process for large IT and that if these programs (particularly national security systems) meet the threshold of an MDAP they should be managed under that acquisition pathway tailored where applicable to the specific needs of large software development programs under the DOD 5000 series regulations. For business information technology systems the requirements of 10 USC 2222 would apply. Sec. 832: Revisions to definition of major defense acquisition program Amends 10 USC 2430 to revise MDAP definition to exclude fixed price prototypes not planned as part of an MDAP and those programs/projects developed under rapid fielding or rapid prototyping acquisition pathway, as per Section 804 of FY16 NDA (Pub. Law ).