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

Subtitle C — Amendments To General Contracting Authorities, Procedures, And Limitations

P. L. 114-

House Conference Report. 114-840

(1) in subsection (e)—

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

(B) by inserting “(1)” before “The head”; and

(C) by adding at the end the following new paragraph:

“(2) If a contractor submits a qualifying proposal to definitize an undefinitized contractual action and the contracting officer for such action definitizes the contract after the end of the 180-day period beginning on the date on which the contractor submitted the qualifying proposal, the head of the agency concerned shall ensure that the profit allowed on the contract accurately reflects the cost risk of the contractor as such risk existed on the date the contractor submitted the qualifying proposal.”;

(2) by redesignating subsections (f) and (g) as subsections (h) and (i), respectively;

(3) by inserting after subsection (e) the following new subsections:

“(f) Time Limit.—No undefinitized contractual action may extend beyond 90 days without a written determination by the Secretary of the military department concerned, the head of the Defense Agency concerned, the commander of the combatant command concerned, or the Under Secretary of Defense for Acquisition, Technology, and Logistics (as applicable) that it is in the best interests of the military department, the Defense Agency, the combatant command, or the Department of Defense, respectively, to continue the action.

“(g) Foreign Military Contracts.— (1) Except as provided in paragraph (2), a contracting officer of the Department of Defense may not enter into an undefinitized contractual action for a foreign military sale unless the contractual action provides for agreement upon contractual terms, specifications, and price by the end of the 180-day period described in subsection (b)(1)(A).

“(2) The requirement under paragraph (1) may be waived in accordance with subsection (b)(4).”; and

(4) in subsection (i), as redesignated by paragraph (2)—

(A) in paragraph (1)—

(i) by striking subparagraph (A); and

(ii) by redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively; and

(B) in paragraph (2), by striking “complete and meaningful audits” and all that follows through the period and inserting “a meaningful audit of the information contained in the proposal.”.

The Senate bill contained a provision (sec. 816) that would amend section 2326 of title 10, United States Code, to revise policies regarding undefinitized contractual actions (UCAs). Over the past decade the use of UCAs by the services and defense agencies has grown significantly while the speed at which these UCAs are definitized has lagged. To address this situation, the provision would: (1) require a written determination by senior officials to extend a UCA beyond 90 days; (2) require UCAs to be awarded on a fixed-price level-ofeffort basis; and (3) extend the 180 day definitization requirement to contracts in support of Foreign Military Sales cases.

The House amendment contained a similar provision (sec. 802).

The House recedes with an amendment that would eliminate the requirement that undefinitized contractual actions be awarded on a fixed-price basis, ensure that allowable profit reflects the cost risk at the time that a contractor submits a qualifying proposal to definitize a contract, and specify that such a proposal contain the information necessary to conduct a meaningful audit of the proposal.