NDAA for Fiscal Year 2012

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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS Subtitle C—Provisions Relating to Major Defense Acquisition Programs
P. L. 113-66	Explanatory Statement, H7894
SEC. 823. ADDITIONAL RESPONSIBILITY FOR PRODUCT SUPPORT MANAGERS FOR MAJOR WEAPON SYSTEMS. Section 2337(b)(2) of title 10, United States Code, is amended-- (1) in subparagraph (G), by striking `and' at the end; (2) in subparagraph (H), by striking the period at the end and inserting `; and'; and (3) by adding at the end the following new subparagraph: `(I) ensure that product support arrangements for the weapon system describe how such arrangements will ensure efficient procurement, management, and allocation of Government-owned parts inventories in order to prevent unnecessary procurements of such parts.'.	*Additional responsibility for product support managers for major weapon systems (sec. 823)* The Senate committee-reported bill contained a provision (sec. 823) that would amend section 2337 of title 10, United States Code, and section 823 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112-239), to provide an assurance that all product support arrangements explicitly state how the arrangement will maximize use of government-owned inventory before obtaining inventory from commercial sources. This provision is a result of a Department of Defense Inspector General investigation into the Defense Logistics Agency. The House bill contained no similar provision. The agreement contains the provision with a technical amendment. Senate Report 113-044 Additional responsibility for product support managers for major weapon systems (sec. 823) The committee recommends a provision that would amend section 2337 of Title 10, United States Code, and section 823 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112-239) to provide an assurance that all product support arrangements explicitly state how the arrangement will maximize use of government owned inventory before obtaining inventory from commercial sources. The committee notes that this provision is a result of the recommendations of the Department of Defense Inspector General (DOD IG) report dated April 25, 2013, that found the Defense Logistics Agency (DLA) did not cost-effectively manage 118 high mobility multipurpose wheeled vehicle (HMMWV) parts valued at $11.1 million while purchasing these parts from AM General, LLC for $17.6 million. The committee notes this occurred because the DLA did not review DLA-owned inventory at key contract decision points to maximize use of its own stock. As a result, the DOD IG identified $9.7 million of excess inventory that could have been used for HMMWV maintenance requirements. The committee notes that this particular DOD IG investigation and report only focused on one particular weapon system at one particular depot. The committee believes there could be an opportunity for greater and similar inventory efficiency across all Department of Defense weapon systems.