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

Subtitle F — Improve Acquisition Act

P. L. 111-

Joint Explanatory Statement of the Committees on Armed Services of the U. S. Senate and House of Representatives on H. R. 6523

From H. R. 6523

SEC. 861. IMPROVEMENTS TO THE MANAGEMENT OF THE DEFENSE ACQUISITION SYSTEM.

(a) Management of the Defense Acquisition System- Part IV of title 10, United States Code, is amended by inserting after chapter 148 the following new chapter:

`CHAPTER 149--DEFENSE ACQUISITION SYSTEM

`Sec.

`2545. Definitions.

`2546. Civilian management of the defense acquisition system.

`2547. Acquisition-related functions of chiefs of the armed forces.

`2548. Performance assessments of the defense acquisition system.

`Sec. 2545. Definitions

`In this chapter:

`(1) The term `acquisition' has the meaning provided in section 4(16) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(16)).

`(2) The term `defense acquisition system' means the workforce engaged in carrying out the acquisition of property and services for the Department of Defense; the management structure responsible for directing and overseeing the acquisition of property and services for the Department of Defense; and the statutory, regulatory, and policy framework that guides the acquisition of property and services for the Department of Defense.

`(3) The term `element of the defense acquisition system' means an organization that employs members of the acquisition workforce, carries out acquisition functions, and focuses primarily on acquisition.

`(4) The term `acquisition workforce' has the meaning provided in section 101(a)(18) of this title.

`Sec. 2546. Civilian management of the defense acquisition system

`(a) Responsibility of the Under Secretary of Defense for Acquisition, Technology, and Logistics- Subject to the authority, direction and control of the Secretary of Defense, the Under Secretary of Defense for Acquisition, Technology, and Logistics shall be responsible for the management of the defense acquisition system and shall exercise such control of the system and perform such duties as are necessary to ensure the successful and efficient operation of the defense acquisition system, including the duties enumerated and assigned to the Under Secretary elsewhere in this title.

`(b) Responsibility of the Service Acquisition Executives- Subject to the direction of the Under Secretary of Defense for Acquisition, Technology, and Logistics on matters pertaining to acquisition, and subject to the authority, direction, and control of the Secretary of the military department concerned, a service acquisition executive of a military department shall be responsible for the management of elements of the defense acquisition system in that military department and shall exercise such control of the system and perform such duties as are necessary to ensure the successful and efficient operation of such elements of the defense acquisition system.

`Sec. 2547. Acquisition-related functions of chiefs of the armed forces

`(a) Performance of Certain Acquisition-related Functions- The Secretary of Defense shall ensure that the Chief of Staff of the Army, the Chief of Naval Operations, the Chief of Staff of the Air Force, and the Commandant of the Marine Corps assist the Secretary of the military department concerned in the performance of the following acquisition-related functions of such department:

`(1) The development of requirements relating to the defense acquisition system (subject, where appropriate, to validation by the Joint Requirements Oversight Council pursuant to section 181 of this title).

`(2) The coordination of measures to control requirements creep in the defense acquisition system.

`(3) The development of career paths in acquisition for military personnel (as required by section 1722a of this title).

`(4) The assignment and training of contracting officer representatives when such representatives are required to be members of the armed forces because of the nature of the contract concerned.

`(b) Rule of Construction- Nothing in this section shall be construed to affect the assignment of functions under section 3014(c)(1)(A), section 5014(c)(1)(A), or section 8014(c)(1)(A) of this title, except as explicitly provided in this section.

`(c) Definitions- In this section:

`(1) The term `requirements creep' means the addition of new technical or operational specifications after a requirements document is approved by the appropriate validation authority for the requirements document.

`(2) The term `requirements document' means a document produced in the requirements process that is provided for an acquisition program to guide the subsequent development, production, and testing of the program and that--

`(A) justifies the need for a materiel approach, or an approach that is a combination of materiel and non-materiel, to satisfy one or more specific capability gaps;

`(B) details the information necessary to develop an increment of militarily useful, logistically supportable, and technically mature capability, including key performance parameters; or

`(C) identifies production attributes required for a single increment of a program.

`Sec. 2548. Performance assessments of the defense acquisition system

`(a) Performance Assessments Required- Not later than 180 days after the date of the enactment of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011, the Secretary of Defense, acting through the Under Secretary of Defense for Acquisition, Technology, and Logistics, the Director of Procurement and Acquisition Policy, and the Director of the Office of Performance Assessment and Root Cause Analysis, shall issue guidance, with detailed implementation instructions, for the Department of Defense to provide for periodic independent performance assessments of elements of the defense acquisition system for the purpose of--

`(1) determining the extent to which such elements of the defense acquisition system deliver value to the Department of Defense, taking into consideration the performance elements identified in subsection (b);

`(2) assisting senior officials of the Department of Defense in identifying and developing lessons learned from best practices and shortcomings in the performance of such elements of the defense acquisition system; and

`(3) assisting senior officials of the Department of Defense in developing acquisition workforce excellence under section 1701a of this title

`(b) Areas Considered in Performance Assessments- (1) Each performance assessment conducted pursuant to subsection (a) shall consider, at a minimum--

`(A) the extent to which acquisitions conducted by the element of the defense acquisition system under review meet applicable cost, schedule, and performance objectives; and

`(B) the staffing and quality of the acquisition workforce and the effectiveness of the management of the acquisition workforce, including workforce incentives and career paths.

`(2) The Secretary of Defense shall ensure that the performance assessments required by this section are appropriately tailored to reflect the diverse nature of the work performed by each element of the defense acquisition system. In addition to the mandatory areas under paragraph (1), a performance assessment may consider, as appropriate, specific areas of acquisition concern, such as--

`(A) the selection of contractors, including--

`(i) the extent of competition and the use of exceptions to competition requirements;

`(ii) compliance with Department of Defense policies regarding the participation of small business concerns and various categories of small business concerns, including the use of contract bundling and the availability of non-bundled contract vehicles;

`(iii) the quality of market research;

`(iv) the effective consideration of contractor past performance; and

`(v) the number of bid protests, the extent to which such bid protests have been successful, and the reasons for such success;

`(B) the negotiation of contracts, including--

`(i) the appropriate application of section 2306a of this title (relating to truth in negotiations);

`(ii) the appropriate use of contract types appropriate to specific procurements;

`(iii) the appropriate use of performance requirements;

`(iv) the appropriate acquisition of technical data and other rights and assets necessary to support long-term sustainment and follow-on procurement; and

`(v) the timely definitization of any undefinitized contract actions; and

`(C) the management of contractor performance, including--

`(i) the assignment of appropriately qualified contracting officer representatives and other contract management personnel;

`(ii) the extent of contract disputes, the reasons for such disputes, and the extent to which they have been successfully addressed;

`(iii) the appropriate consideration of long-term sustainment and energy efficiency objectives; and

`(iv) the appropriate use of integrated testing.

`(c) Contents of Guidance- The guidance issued pursuant to subsection (a) shall ensure that each element of the defense acquisition system is subject to a performance assessment under this section not less often than once every four years, and shall address, at a minimum--

`(1) the designation of elements of the defense acquisition system that are subject to performance assessment at an organizational level that ensures such assessments can be performed in an efficient and integrated manner;

`(2) the frequency with which such performance assessments should be conducted;

`(3) goals, standards, tools, and metrics for use in conducting performance assessments;

`(4) the composition of the teams designated to perform performance assessments;

`(5) any phase-in requirements needed to ensure that qualified staff are available to perform performance assessments;

`(6) procedures for tracking the implementation of recommendations made pursuant to performance assessments;

`(7) procedures for developing and disseminating lessons learned from performance assessments; and

`(8) procedures for ensuring that information from performance assessments are retained electronically and are provided in a timely manner to the Under Secretary of Defense for Acquisition, Technology, and Logistics and the Director of the Office of Performance Assessment and Root Cause Analysis as needed to assist them in performing their responsibilities under this section.

`(d) Performance Goals Under Government Performance Results Act of 1993- Beginning with fiscal year 2012, the annual performance plan prepared by the Department of Defense pursuant to section 1115 of title 31 shall include appropriate performance goals for elements of the defense acquisition system.

`(e) Reporting Requirements- Beginning with fiscal year 2012--

`(1) the annual report prepared by the Secretary of Defense pursuant to section 1116 of title 31, United States Code, shall address the Department's success in achieving performance goals established pursuant to such section for elements of the defense acquisition system; and

`(2) the annual report prepared by the Director of the Office of Performance Assessment and Root Cause Analysis pursuant to section 103(f) of the Weapon Systems Acquisition Reform Act of 2009 (10 U.S.C. 2430 note), shall include information on the activities undertaken by the Department pursuant to such section, including a summary of significant findings or recommendations arising out of performance assessments.'.

(b) Clerical Amendments- The table 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 148 the following new item:

2545'.

From H.R. 5136:  National Defense Authorization Act for Fiscal Year 2011

SEC. 101. PERFORMANCE MANAGEMENT OF THE DEFENSE ACQUISITION SYSTEM.

(a) Performance Management of the Defense Acquisition System-

(1) IN GENERAL- Part IV of title 10, United States Code, is amended by inserting after chapter 148 the following new chapter:

`CHAPTER 149--PERFORMANCE MANAGEMENT OF THE DEFENSE ACQUISITION SYSTEM

`Sec.

`2545. Performance assessments of the defense acquisition system.

`2546. Audits of performance assessments.

`2547. Use of performance assessments for managing performance.

`2548. Acquisition-related functions of the Chiefs of Staff of the armed forces.

`Sec. 2545. Performance assessments of the defense acquisition system

`(a) Performance Assessments Required- (1) The Secretary of Defense shall ensure that all elements of the defense acquisition system are subject to regular performance assessments--

`(A) to determine the extent to which such elements deliver appropriate value to the Department of Defense; and

`(B) to enable senior officials of the Department of Defense to manage the elements of the defense acquisition system to maximize their value to the Department.

`(2) The performance of each element of the defense acquisition system shall be assessed as needed, but not less often than annually.

`(3) The Secretary shall ensure that the performance assessments required by this subsection are appropriately tailored to reflect the diverse nature of defense acquisition so that the performance assessment of each element of the defense acquisition system accurately reflects the work performed by such element.

`(b) Systemwide Categories- (1) The Secretary of Defense shall establish categories of metrics for the defense acquisition system, including, at a minimum, categories relating to cost, quality, delivery, workforce, and policy implementation that apply to all elements of the defense acquisition system.

`(2) The Secretary of Defense shall issue guidance for service acquisition executives within the Department of Defense on the establishment of metrics, and goals and standards relating to such metrics, within the categories established by the Secretary under paragraph (1) to ensure that there is sufficient uniformity in performance assessments across the defense acquisition system so that elements of the defense acquisition system can be meaningfully compared.

`(c) Metrics, Goals, and Standards- (1) Each service acquisition executive of the Department of Defense shall establish metrics to be used in the performance assessments required by subsection (a) for each element of the defense acquisition system for which such executive is responsible within the categories established by the Secretary under subsection (b). Such metrics shall be appropriately tailored pursuant to subsection (a)(3) and may include measures of--

`(A) cost, quality, and delivery;

`(B) contractor performance, including compliance with the Department of Defense policy regarding the participation of small business concerns owned and controlled by socially and economically disadvantaged individuals, veteran-owned small businesses, service-disabled, veteran-owned small businesses, and women-owned small businesses;

`(C) excessive use of contract bundling and availability of non-bundled contract vehicles;

`(D) workforce quality and program manager tenure (where applicable);

`(E) the quality of market research;

`(F) appropriate use of integrated testing;

`(G) appropriate consideration of long-term sustainment and energy efficiency; and

`(H) appropriate acquisition of technical data and other rights and assets necessary to support long-term sustainment.

`(2) Each service acquisition executive within the Department of Defense shall establish goals and standards (including, at a minimum, a threshold standard and an objective goal) for each metric established under paragraph (1) by the executive. In establishing the goals and standards for an element of the defense acquisition system, a service acquisition executive shall consult with the head of the element to the maximum extent practicable, but the service acquisition executive shall retain the final authority to determine the goals and standards established. The service acquisition executive shall update the goals and standards as necessary and appropriate consistent with the guidance issued under subsection (b)(2).

`(3) The Under Secretary of Defense for Acquisition, Technology, and Logistics shall periodically review the metrics, goals, and standards established by service acquisition executives under this subsection to ensure that they are consistent with the guidance issued under subsection (b)(2).

`(d) Responsibility for Oversight and Direction of Performance Assessments- (1) Performance assessments required by subsection (a) shall either be carried out by, or shall be subject to the oversight of, the Director of the Office of Performance Assessment and Root Cause Analysis. The authority and responsibility granted by this subsection is in addition to any other authority or responsibility granted to the Director of the Office of Performance Assessment and Root Cause Analysis by the Secretary of Defense or by any other provision of law. In the performance of duties pursuant to this section, the Director of the Office of Performance Assessment and Root Cause Analysis shall coordinate with the Deputy Chief Management Officer to ensure that performance assessments carried out pursuant to this section are consistent with the performance management initiatives of the Department of Defense.

`(2) A performance assessment may be carried out by an organization under the control of the service acquisition executive of a military department if--

`(A) the assessment fulfills the requirements of subsection (a);

`(B) the organization is approved to carry out the assessment by the Director of the Office of Performance Assessment and Root Cause Analysis; and

`(C) the assessment is subject to the oversight of the Director of the Office of Performance Assessment and Root Cause Analysis in accordance with paragraph (1).

`(e) Retention and Access to Records of Performance Assessments Within the Military Departments and Defense Agencies- The Secretary of Defense shall ensure that information from performance assessments of all elements of the defense acquisition system are retained electronically and that the Director of the Office of Performance Assessment and Root Cause Analysis--

`(1) promptly receives the results of all performance assessments conducted by an organization under the control of the service acquisition executive of a military department; and

`(2) has timely access to any records and data in the Department of Defense (including the records and data of each military department and Defense Agency and including classified and proprietary information) that the Director considers necessary to review in order to perform or oversee performance assessments pursuant to this section.

`(f) Inclusion in Annual Report- The Director of the Office of Performance Assessment and Root Cause Analysis shall include information on the activities undertaken by the Director under this section in the annual report of the Director required under section 103(f) of the Weapon Systems Acquisition Reform Act of 2009 (Public Law 111-23; 123 Stat. 1716), including information on any performance assessment required by subsection (a) with significant findings. In addition, if a performance assessment uncovers particularly egregious problems, as identified by the Director, the Director shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on such problems within 30 days after the problems are identified.

`(g) Definitions- In this section:

`(1) The term `defense acquisition system' means the acquisition workforce; the process by which the Department of Defense manages the acquisition of goods and services, including weapon systems, commodities, commercial and military unique services, and information technology; and the management structure for carrying out the acquisition function within the Department of Defense.

`(2) The term `element of the defense acquisition system' means an organization that operates within the defense acquisition system and that focuses primarily on acquisition.

`(3) The term `metric' means a specific measure that serves as a basis for comparison.

`(4) The term `threshold performance standard' means the minimum acceptable level of performance in relation to a metric.

`(5) The term `objective performance goal' means the most desired level of performance in relation to a metric.

`(6) The term `Office of Performance Assessment and Root Cause Analysis' means the office reporting to the senior official designated by the Secretary of Defense under section 103(a) of the Weapon Systems Acquisition Reform Act of 2009 (Public Law 111-23, 10 U.S.C. 2430 note).

`Sec. 2546. Audits of performance assessments

`(a) Audits Required- The Secretary of Defense shall ensure that the performance assessments of the defense acquisition system required by section 2545 of this title are subject to periodic audits to determine the accuracy, reliability, and completeness of such assessments.

`(b) Standards and Approach- In performing the audits required by subsection (a), the Secretary shall ensure that such audits--

`(1) comply with generally accepted government auditing standards issued by the Comptroller General;

`(2) use a risk-based approach to audit planning; and

`(3) appropriately account for issues associated with auditing assessments of activities occurring in a contingency operation.

`Sec. 2547. Use of performance assessments for managing performance

`(a) In General- The Secretary of Defense shall ensure that the results of performance assessments are used in the management of elements of the defense acquisition system through direct linkages between the results of a performance assessment and the following:

`(1) The size of the bonus pool available to the workforce of an element of the defense acquisition system.

`(2) Rates of promotion in the workforce of an element of the defense acquisition system.

`(3) Awards for acquisition excellence.

`(4) The scope of work assigned to an element of the defense acquisition system.

`(b) Additional Requirements- The Secretary of Defense shall ensure that actions taken to manage the acquisition workforce pursuant to subsection (a) are undertaken in accordance with the requirements of subsections (c) and (d) of section 1701a of this title.

`Sec. 2548. Acquisition-related functions of the Chiefs of Staff of the armed forces

`(a) Assistance- The Secretary of Defense shall ensure, notwithstanding section 3014(c)(1)(A), section 5014(c)(1)(A), and section 8014(c)(1)(A) of this title, that the Chief of Staff of the Army, the Chief of Naval Operations, the Chief of Staff of the Air Force, and the Commandant of the Marine Corps assist the Secretary of the military department concerned in the performance of the following acquisition-related functions of such department:

`(1) The development of requirements relating to the defense acquisition system.

`(2) The development of measures to control requirements creep in the defense acquisition system.

`(3) The development of career paths in acquisition for military personnel (as required by section 1722a of this title).

`(4) The assignment and training of contracting officer representatives when such representatives are required to be members of the armed forces because of the nature of the contract concerned.

`(b) Definitions- In this section:

`(1) The term `requirements creep' means the addition of new technical or operational specifications after a requirements document is approved.

`(2) The term `requirements document' means a document produced in the requirements process that is provided for an acquisition program to guide the subsequent development, production, and testing of the program and that--

`(A) justifies the need for a materiel approach, or an approach that is a combination of materiel and non-materiel, to satisfy one or more specific capability gaps;

`(B) details the information necessary to develop an increment of militarily useful, logistically supportable, and technically mature capability, including key performance parameters; or

`(C) identifies production attributes required for a single increment of a program.'.

(2) CLERICAL AMENDMENTS- The table 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 148 the following new item:

2545'.

(b) Phased Implementation of Performance Assessments- The Secretary of Defense shall implement the requirements of chapter 149 of title 10, United States Code, as added by subsection (a), in a phased manner while guidance is issued, and categories, metrics, goals, and standards are established. Implementation shall begin with a cross section of elements of the defense acquisition system representative of the entire system and shall be completed for all elements not later than two years after the date of the enactment of this Act.

From H.R. 5013:  Implementing Management for Performance and Related Reforms to Obtain Value in Every Acquisition Act of 2010

SEC. 101. PERFORMANCE MANAGEMENT OF THE DEFENSE ACQUISITION SYSTEM.

(a) Performance Management of the Defense Acquisition System-

(1) IN GENERAL- Part IV of title 10, United States Code, is amended by inserting after chapter 148 the following new chapter:

`CHAPTER 149--PERFORMANCE MANAGEMENT OF THE DEFENSE ACQUISITION SYSTEM

`Sec.

`2545. Performance assessments of the defense acquisition system.

`2546. Audits of performance assessments.

`2547. Use of performance assessments for managing performance.

`2548. Acquisition-related functions of the Chiefs of Staff of the armed forces.

`Sec. 2545. Performance assessments of the defense acquisition system

`(a) Performance Assessments Required- (1) The Secretary of Defense shall ensure that all elements of the defense acquisition system are subject to regular performance assessments--

`(A) to determine the extent to which such elements deliver appropriate value to the Department of Defense; and

`(B) to enable senior officials of the Department of Defense to manage the elements of the defense acquisition system to maximize their value to the Department.

`(2) The performance of each element of the defense acquisition system shall be assessed as needed, but not less often than annually.

`(3) The Secretary shall ensure that the performance assessments required by this subsection are appropriately tailored to reflect the diverse nature of defense acquisition so that the performance assessment of each element of the defense acquisition system accurately reflects the work performed by such element.

`(b) Systemwide Categories- (1) The Secretary of Defense shall establish categories of metrics for the defense acquisition system, including, at a minimum, categories relating to cost, quality, delivery, workforce, and policy implementation that apply to all elements of the defense acquisition system.

`(2) The Secretary of Defense shall issue guidance for service acquisition executives within the Department of Defense on the establishment of metrics, and goals and standards relating to such metrics, within the categories established by the Secretary under paragraph (1) to ensure that there is sufficient uniformity in performance assessments across the defense acquisition system so that elements of the defense acquisition system can be meaningfully compared.

`(c) Metrics, Goals, and Standards- (1) Each service acquisition executive of the Department of Defense shall establish metrics to be used in the performance assessments required by subsection (a) for each element of the defense acquisition system for which such executive is responsible within the categories established by the Secretary under subsection (b). Such metrics shall be appropriately tailored pursuant to subsection (a)(3) and may include measures of--

`(A) cost, quality, and delivery;

`(B) contractor performance, including compliance with the Department of Defense policy regarding the participation of small business concerns owned and controlled by socially and economically disadvantaged individuals, veteran-owned small businesses, service-disabled, veteran-owned small businesses, and women-owned small businesses;

`(C) excessive use of contract bundling and availability of non-bundled contract vehicles;

`(D) workforce quality and program manager tenure (where applicable);

`(E) the quality of market research;

`(F) appropriate use of integrated testing;

`(G) appropriate consideration of long-term sustainment and energy efficiency; and

`(H) appropriate acquisition of technical data and other rights and assets necessary to support long-term sustainment.

`(2) Each service acquisition executive within the Department of Defense shall establish goals and standards (including, at a minimum, a threshold standard and an objective goal) for each metric established under paragraph (1) by the executive. In establishing the goals and standards for an element of the defense acquisition system, a service acquisition executive shall consult with the head of the element to the maximum extent practicable, but the service acquisition executive shall retain the final authority to determine the goals and standards established. The service acquisition executive shall update the goals and standards as necessary and appropriate consistent with the guidance issued under subsection (b)(2).

`(3) The Under Secretary of Defense for Acquisition, Technology, and Logistics shall periodically review the metrics, goals, and standards established by service acquisition executives under this subsection to ensure that they are consistent with the guidance issued under subsection (b)(2).

`(d) Responsibility for Oversight and Direction of Performance Assessments- (1) Performance assessments required by subsection (a) shall either be carried out by, or shall be subject to the oversight of, the Director of the Office of Performance Assessment and Root Cause Analysis. The authority and responsibility granted by this subsection is in addition to any other authority or responsibility granted to the Director of the Office of Performance Assessment and Root Cause Analysis by the Secretary of Defense or by any other provision of law. In the performance of duties pursuant to this section, the Director of the Office of Performance Assessment and Root Cause Analysis shall coordinate with the Deputy Chief Management Officer to ensure that performance assessments carried out pursuant to this section are consistent with the performance management initiatives of the Department of Defense.

`(2) A performance assessment may be carried out by an organization under the control of the service acquisition executive of a military department if--

`(A) the assessment fulfills the requirements of subsection (a);

`(B) the organization is approved to carry out the assessment by the Director of the Office of Performance Assessment and Root Cause Analysis; and

`(C) the assessment is subject to the oversight of the Director of the Office of Performance Assessment and Root Cause Analysis in accordance with paragraph (1).

`(e) Retention and Access to Records of Performance Assessments Within the Military Departments and Defense Agencies- The Secretary of Defense shall ensure that information from performance assessments of all elements of the defense acquisition system are retained electronically and that the Director of the Office of Performance Assessment and Root Cause Analysis--

`(1) promptly receives the results of all performance assessments conducted by an organization under the control of the service acquisition executive of a military department; and

`(2) has timely access to any records and data in the Department of Defense (including the records and data of each military department and Defense Agency and including classified and proprietary information) that the Director considers necessary to review in order to perform or oversee performance assessments pursuant to this section.

`(f) Inclusion in Annual Report- The Director of the Office of Performance Assessment and Root Cause Analysis shall include information on the activities undertaken by the Director under this section in the annual report of the Director required under section 103(f) of the Weapon Systems Acquisition Reform Act of 2009 (Public Law 111-23; 123 Stat. 1716), including information on any performance assessment required by subsection (a) with significant findings. In addition, if a performance assessment uncovers particularly egregious problems, as identified by the Director, the Director shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on such problems within 30 days after the problems are identified.

`(g) Definitions- In this section:

`(1) The term `defense acquisition system' means the acquisition workforce; the process by which the Department of Defense manages the acquisition of goods and services, including weapon systems, commodities, commercial and military unique services, and information technology; and the management structure for carrying out the acquisition function within the Department of Defense.

`(2) The term `element of the defense acquisition system' means an organization that operates within the defense acquisition system and that focuses primarily on acquisition.

`(3) The term `metric' means a specific measure that serves as a basis for comparison.

`(4) The term `threshold performance standard' means the minimum acceptable level of performance in relation to a metric.

`(5) The term `objective performance goal' means the most desired level of performance in relation to a metric.

`(6) The term `Office of Performance Assessment and Root Cause Analysis' means the office reporting to the senior official designated by the Secretary of Defense under section 103(a) of the Weapon Systems Acquisition Reform Act of 2009 (Public Law 111-23, 10 U.S.C. 2430 note).

`Sec. 2546. Audits of performance assessments

`(a) Audits Required- The Secretary of Defense shall ensure that the performance assessments of the defense acquisition system required by section 2545 of this title are subject to periodic audits to determine the accuracy, reliability, and completeness of such assessments.

`(b) Standards and Approach- In performing the audits required by subsection (a), the Secretary shall ensure that such audits--

`(1) comply with generally accepted government auditing standards issued by the Comptroller General;

`(2) use a risk-based approach to audit planning; and

`(3) appropriately account for issues associated with auditing assessments of activities occurring in a contingency operation.

`Sec. 2547. Use of performance assessments for managing performance

`(a) In General- The Secretary of Defense shall ensure that the results of performance assessments are used in the management of elements of the defense acquisition system through direct linkages between the results of a performance assessment and the following:

`(1) The size of the bonus pool available to the workforce of an element of the defense acquisition system.

`(2) Rates of promotion in the workforce of an element of the defense acquisition system.

`(3) Awards for acquisition excellence.

`(4) The scope of work assigned to an element of the defense acquisition system.

`(b) Additional Requirements- The Secretary of Defense shall ensure that actions taken to manage the acquisition workforce pursuant to subsection (a) are undertaken in accordance with the requirements of subsections (c) and (d) of section 1701a of this title.

`Sec. 2548. Acquisition-related functions of the Chiefs of Staff of the armed forces

`(a) Assistance- The Secretary of Defense shall ensure, notwithstanding section 3014(c)(1)(A), section 5014(c)(1)(A), and section 8014(c)(1)(A) of this title, that the Chief of Staff of the Army, the Chief of Naval Operations, the Chief of Staff of the Air Force, and the Commandant of the Marine Corps assist the Secretary of the military department concerned in the performance of the following acquisition-related functions of such department:

`(1) The development of requirements relating to the defense acquisition system.

`(2) The development of measures to control requirements creep in the defense acquisition system.

`(3) The development of career paths in acquisition for military personnel (as required by section 1722a of this title).

`(4) The assignment and training of contracting officer representatives when such representatives are required to be members of the armed forces because of the nature of the contract concerned.

`(b) Definitions- In this section:

`(1) The term `requirements creep' means the addition of new technical or operational specifications after a requirements document is approved.

`(2) The term `requirements document' means a document produced in the requirements process that is provided for an acquisition program to guide the subsequent development, production, and testing of the program and that--

`(A) justifies the need for a materiel approach, or an approach that is a combination of materiel and non-materiel, to satisfy one or more specific capability gaps;

`(B) details the information necessary to develop an increment of militarily useful, logistically supportable, and technically mature capability, including key performance parameters; or

`(C) identifies production attributes required for a single increment of a program.'.

(2) CLERICAL AMENDMENTS- The table 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 148 the following new item:

2545'.

(b) Phased Implementation of Performance Assessments- The Secretary of Defense shall implement the requirements of chapter 149 of title 10, United States Code, as added by subsection (a), in a phased manner while guidance is issued, and categories, metrics, goals, and standards are established. Implementation shall begin with a cross section of elements of the defense acquisition system representative of the entire system and shall be completed for all elements not later than 2 years after the date of the enactment of this Act.

The House bill contained a provision (sec. 101 of division D) that would: (1) codify certain requirements for the defense acquisition system; (2) require periodic performance assessments for elements of the defense acquisition system; and (3) codify the acquisition-related functions of the chiefs of staff of the armed forces.

The Senate committee-reported bill contained no similar provision.

The agreement includes the House provision with an amendment that would: (1) codify a definition of the defense acquisition system and the responsibility of the Under Secretary of Defense for Acquisition, Technology, and Logistics and the service acquisition executives for the management of the defense acquisition system; (2) codify the acquisition-related functions of the chiefs of staff of the armed forces; and (3) require periodic performance assessments for elements of the defense acquisition system.

From H. Rpt. 111-465, accompanying 
H.R. 5013,  Implementing Management for Performance and Related Reforms to Obtain Value in Every Acquisition Act of 2010

SECTION 101--PERFORMANCE MANAGEMENT OF THE DEFENSE ACQUISITION SYSTEM

This section would create a new chapter 149 in title 10, United States Code, entitled `Performance Management of the Defense Acquisition System', adding the following new sections: section 2545, relating to performance assessments of the defense acquisition system; section 2546, relating to audits of performance assessments; section 2547, relating to the use of performance assessments for managing performance; and section 2548, relating to the acquisition-related functions of the Chiefs of Staff of the Armed Forces. This section would direct the Secretary of Defense to implement the requirements of the new chapter 149 in a phased manner over a 2 year period beginning on the date of enactment of this Act.

Section 2545, as added by this section, would require the Secretary of Defense to ensure that all elements of the defense acquisition system are subject to regular performance assessments at least annually. It would require each service acquisition executive within the Department of Defense to create metrics for each element of the defense acquisition system within system-wide categories developed by the Secretary. Each metric would be associated with specific goals and standards. The metrics, goals, and standards would be tailored to, and negotiated with, the specific element of the defense acquisition system being assessed. The Director of the Office of Performance Assessment and Root Cause Analysis (PARCA) would be responsible for overseeing all performance assessments in the Department and this section would provide PARCA with the authority to access and retain all records necessary to fulfill this function.

Section 2546, as added by this section, would require that the performance assessments performed under the new section 2545 be subjected to periodic audits to determine their accuracy, reliability, and completeness. Audits under this section would be required to meet generally accepted government auditing standards; use a risk based approach to audit planning; and appropriately account for issues associated with auditing assessments of activities occurring in a contingency operation.

Section 2547, as added by this section, would require that the results of the performance assessments performed under the new section 2545 be used in the management of elements of the defense acquisition system through: adjustments to the size of bonus pools available to the workforce of an element of the defense acquisition system; changes in rates of promotion; awards for acquisition excellence; and changes in the scope of work assigned to the organization. Section 2547 would require that actions taken to manage the acquisition workforce under such section would be subject to existing requirements relating to labor negotiations and the issuance of regulations, as referenced in subsections (c) and (d) of section 1701a of title 10, United States Code, as added by section 201 of this Act.

Section 2548, as added by this section, would clarify that the Chiefs of Staff of the Armed Forces may assist the secretaries of their respective military departments in the following acquisition-related functions: the development of requirements; the development of measures to control requirements creep; the development of career paths in acquisition for military personnel; and the assignment and training of contracting officer representatives when such representatives are required to be members of the armed forces.