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

Subtitle C--Contractor Matters

P. L. 111-

House Conference Report 111-288

    (a) Authority To Reduce or Deny Award Fees.--Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall revise the guidance issued pursuant to section 814 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 129 Stat. 2321) to ensure that all covered contracts using award fees--

    (1) provide for the consideration of any incident described in subsection (b) in evaluations of contractor performance for the relevant award fee period; and

    (2) authorize the Secretary to reduce or deny award fees for the relevant award fee period, or to recover all or part of award fees previously paid for such period, on the basis of the negative impact of such incident on contractor performance.

    (b) Covered Incidents.--An incident referred to in subsection (a) is any incident in which the contractor--

    (1) has been determined, through a criminal, civil, or administrative proceeding that results in a disposition listed in subsection (c), in the performance of a covered contract to have caused serious bodily injury or death to any civilian or military personnel of the Government through gross negligence or with reckless disregard for the safety of such personnel; or

    (2) has been determined, through a criminal, civil, or administrative proceeding that results in a disposition listed in subsection (c), to be liable for actions of a subcontractor of the contractor that caused serious bodily injury or death to any civilian or military personnel of the Government, through gross negligence or with reckless disregard for the safety of such personnel.

    (c) List of Dispositions in Criminal, Civil, or Administrative Proceedings.--For purposes of subsection (a), the dispositions listed in this subsection are as follows:

    (1) In a criminal proceeding, a conviction.

    (2) In a civil proceeding, a finding of fault and liability that results in the payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more.

    (3) In an administrative proceeding, a finding of fault and liability that results in--

    (A) the payment of a monetary fine or penalty of $5,000 or more; or

    (B) the payment of a reimbursement, restitution, or damages in excess of $100,000.

    (4) To the maximum extent practicable and consistent with applicable laws and regulations, in a criminal, civil, or administrative proceeding, a disposition of the matter by consent or compromise with an acknowledgment of fault by the person if the proceeding could have led to any of the outcomes specified in paragraph (1), (2), or (3).

    (d) Definitions.--In this section:

    (1) The term ``defense contractor'' means a company awarded a covered contract.

    (2) The term ``covered contract'' means a contract awarded by the Department of Defense for the procurement of goods or services.

    (3) The term ``serious bodily injury'' means a grievous physical harm that results in a permanent disability.

    (e) Effective Date.--This section shall apply with respect to contracts entered into after the date occurring 180 days after the date of the enactment of this Act.

   The House bill contained a provision (sec. 824) that would prohibit the payment of award and incentive fees to any defense contractor that has been determined to have caused the death or serious bodily injury of Department of Defense personnel.

   The Senate amendment contained no similar provision.

   The Senate recedes with an amendment that would: (1) require the Secretary of Defense to consider any such contractor misconduct in assessments of contractor performance; and (2) authorize the Secretary to withhold or recover all or part of award fees for the relevant period of time on the basis of the negative impact of such misconduct on contractor performance.

House Report 111-166 - NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2010

SECTION 824--REQUIREMENT FOR SECRETARY OF DEFENSE TO DENY AWARD AND INCENTIVE FEES TO COMPANIES FOUND TO JEOPARDIZE HEALTH OR SAFETY OF GOVERNMENT PERSONNEL

This section would require the Secretary of Defense to prohibit the payment of award and incentive fees to defense contractors who are determined through a criminal, civil, or administrative proceeding, to be responsible for causing the death or serious bodily injury of any civilian or military personnel of the government through gross negligence or reckless disregard for safety. This section would apply to both prime contractors and subcontractors. The prohibition would apply to contractors after a criminal conviction, a civil proceeding, or an administrative proceeding resulting in a finding of fault and payment of a fine, a penalty, reimbursement, restitution, or damages. The Secretary of Defense would be authorized to waive the prohibition on the basis of national security and would be required to notify the congressional defense committees of the waiver. This section would require the Secretary of Defense to issue implementing regulations within 180 days after the date of enactment of this Act, and the prohibition would apply to contracts awarded 180 days after the date of enactment of this Act. This section would also require the Secretary of Defense to determine whether the defense contractor should be barred from contracting with the Department of Defense.