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

Subtitle A--Acquisition Policy and Management

P. L. 112-

House Conference Report 112-705

SEC. 801. TREATMENT OF PROCUREMENTS ON BEHALF OF THE DEPARTMENT OF DEFENSE THROUGH THE WORK FOR OTHERS PROGRAM OF THE DEPARTMENT OF ENERGY.

(a) In General- Subsection (d) of section 801 of the National Defense Authorization Act for Fiscal Year 2008 (10 U.S.C. 2304 note) is amended--

(1) in the subsection heading, by striking `Defense' and inserting `Applicable';

(2) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;

(3) by striking `For the purposes' and inserting `(1) Except as provided in paragraph (2), for the purposes';

(4) in paragraph (1), as designated by paragraph (3) of this subsection, by striking `defense procurement' and inserting `applicable procurement'; and

(5) by adding at the end the following new paragraph (2):

`(2) In the case of the procurement of property or services on behalf of the Department of Defense through the Work for Others program of the Department of Energy, the laws and regulations applicable under paragraph (1)(B) are the Department of Energy Acquisition Regulations, pertinent interagency agreements, and Department of Defense and Department of Energy policies related to the Work for Others program.'.

(b) Conforming Amendments- Such section is further amended by striking `defense procurement' and inserting `applicable procurement' each place it appears as follows:

(1) Subsection (a)(1)(B).

(2) Subsection (a)(4) (as redesignated by section 805(a)(3)).

(3) Subsection (a)(4)(A) (as redesignated by section 805(a)(3)).

(4) Subsection (b)(1)(A).

(5) Subsection (b)(1)(B)(ii).

(6) Subsection (c)(2)(F).

The House bill contained a provision (sec. 801) that would exempt procurements through the Department of Energy (DOE) Work for Others program from requirements applicable to interagency transactions of the Department of Defense (DOD) under section 801 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181).

The Senate amendment contained no similar provision.

The Senate recedes with an amendment that would clarify procurement requirements applicable to DOD procurements through the DOE Work for Others program for the purposes of section 801. In general, the conferees understand that DOD officials are required to comply with the requirements of the Defense Supplement to the Federal Acquisition Regulation (DFARS), but that DFARS requirements are not applicable to officials of other federal agencies, except to the extent that they implement statutory requirements specific to interagency transactions.

Accordingly, DOD procurements of property and services through the DOE Work for Others program comply with the requirements of section 801 if they are consistent with the Federal Acquisition Regulation and other laws and regulations that apply to procurements of property and services by Federal agencies generally, and with the following laws and regulations specific to DOD transactions through the DOE Work for Others program:

(A) the Memorandum of Agreement Between the Department of Defense and the Department of Energy Governing Department of Defense Funded Work Performed at the Department of Energy Laboratories and Facilities (dated September 16, 2010), or a successor agreement;

(B) the Memorandum of the Director of Defense Procurement and Acquisition Policy on Department of Defense-Wide Policy for Using the Department of Energy's Work for Others Program to Access DOE-Owned Research, Development and Production Facilities through Interagency Agreements (dated September 30, 2011), or a successor policy;

(C) the Standard Interagency Agreement Part A for DOD Components and all DOE activities (dated December 16, 2010), or a successor agreement;

(D) the Department of Energy Acquisition Regulations; and

(E) Department of Energy Order 481.1C, Work for Others (Non-Department of Energy Funded Work (dated January 24, 2005) as amended, or a successor order.

House Report 112-479

SECTION 801--PILOT EXEMPTION REGARDING TREATMENT OF PROCUREMENTS ON BEHALF OF THE DEPARTMENT OF DEFENSE IN ACCORDANCE WITH THE DEPARTMENT OF ENERGY'S WORK FOR OTHERS PROGRAM

This section would authorize a 24-month pilot exemption for certain procurements performed by the Department of Energy on behalf of the Department of Defense from duplicative and unnecessary Inspector General of the Department of Defense reviews and compliance certifications required by section 801 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181). This section would also require the Under Secretary of Defense for Acquisition, Technology, and Logistics to certify to the congressional defense committees within 20 months after the date of the enactment of this Act that the procurement policies, procedures, and internal controls of the Department of Energy provide sufficient protection and oversight for Department of Defense funds expended through the Department of Energy's Work For Others Program, and to provide a recommendation regarding whether the pilot exemption should be extended.

Section 801 of Public Law 110-181 requires the Inspector General of the Department of Defense to annually review the procurement policies, procedures, and internal controls for all non-defense agencies that perform procurements on behalf of the Department of Defense to determine consistency with defense procurement requirements. Section 801 also requires the Inspector General to certify compliance with these requirements for procurement of property or services performed by a non-defense agency on behalf of the Department of Defense if the procurement is above the simplified acquisition threshold. The committee believes that these requirements are inefficient and duplicative, and that the Department of Energy's methods for overseeing contractor procurement and efficiency are equivalent to those used by the Department of Defense.

Furthermore, the committee understands that the Department of Defense has issued an annual exemption to the requirements of section 801 each year the statute has been in effect. The committee notes that these waivers have been issued because the Department of Defense believes the requirements of section 801 are unnecessary and that the requirements have the potential to impact the Department of Energy nuclear security laboratories' ability to perform critical national security work for the Department of Defense under the Department of Energy's Work For Others Program.