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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle B—Amendments to General Contracting Authorities, Procedures, and Limitations

P. L. 117-81

Joint Explanatory Statement

(a) In General.--Chapter 9 of title 10, United States Code, is amended by adding at the end the following new section:

``Sec. 239c. Certain multiyear contracts for acquisition of property: budget justification materials

``(a) In General.--In the budget justification materials submitted to Congress in support of the Department of Defense budget for fiscal year 2023 and each fiscal year thereafter (as submitted with the budget of the President under section 1105(a) of title 31), the Secretary of Defense shall include a proposal for any multiyear contract of the Department entered into under section 2306b of this title that--

``(1) the head of an agency intends to cancel during the fiscal year; or

``(2) with respect to which the head of an agency intends to effect a covered modification during the fiscal year.

``(b) Elements.--Each proposal required by subsection (a) shall include the following:

``(1) A detailed assessment of any expected termination costs associated with the proposed cancellation or covered modification of the multiyear contract.

``(2) An updated assessment of estimated savings of such cancellation or carrying out the multiyear contract as modified by such covered modification.

``(3) An explanation of the proposed use of previously appropriated funds for advance procurement or procurement of property planned under the multiyear contract before such cancellation or covered modification.

``(4) An assessment of expected impacts of the proposed cancellation or covered modification on the defense industrial base, including workload stability, loss of skilled labor, and reduced efficiencies.

``(c) Definitions.--In this section:

``(1) The term `covered modification' means a modification that will result in a reduction in the quantity of end items to be procured.

``(2) The term `head of an agency' means--

``(A) the Secretary of Defense;

``(B) the Secretary of the Army;

``(C) the Secretary of the Navy; or

``(D) the Secretary of the Air Force.''.

(b) Clerical Amendment.--The table of sections at the beginning of chapter 9 of such title is amended by adding at the end the following new item:

``239c. Certain multiyear contracts for acquisition of property: budget
justification materials.''.

The Senate amendment contained a provision (sec. 820) that would require the Secretary of Defense to certify, as part of an existing certification required under section 2306b of title 10, 174 United States Code, that the Department of Defense will not reduce the quantity of end items that would be procured with a multiyear contract in each fiscal year of the future years defense program planned at the time of contract award without prior approval from the congressional defense committees.

The House bill contained no similar provision.

The agreement includes the Senate provision with an amendment that would require the Secretary of Defense to include a detailed proposal with the President’s budget request
materials if the Department is proposing to cancel or not fulfill certain Government obligations under a multiyear procurement contract.

S. 2792--Senate Report117-39

Multiyear contract authority for defense acquisitions specifically authorized by law (sec. 820)

The committee recommends a provision that would add an additional criterion to the certifications required for approving a multiyear procurement contract.

The committee notes the budget request would breach a multiyear contract for Arleigh Burke-class destroyers entered into under authority provided in section 2306b of title 10,
United States Code. The committee believes such an action would set an unacceptable precedent and undermine future confidence in entering into these highly cost effective and stabilizing contractual agreements.

Accordingly, this provision would require the Secretary of Defense to certify, as part of an existing certification required under section 2306b of title 10, United States Code, that the Department of Defense will not reduce the quantity of end items that would be procured with a multiyear contract in each fiscal year of the future years defense program planned at the time of contract award without prior approval from the congressional defense committees.