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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) has established in writing a preference for a different contract type; or

(2) requests in writing that a different contract type be used for a specific foreign military sale.

(c) Waiver Authority.—The regulations prescribed pursuant to subsection (a) shall include a waiver that may be exercised by the Secretary of Defense or his designee if the Secretary or his designee determines on a case-by-case basis that a different contract type is in the best interest of the United States and American taxpayers.

(d) Pilot Program For Acceleration Of Foreign Military Sales.—

(1) IN GENERAL.—The Secretary of Defense shall establish a pilot program to reform and accelerate the contracting and pricing processes associated with full rate production of major weapon systems for no more than 10 foreign military sales contracts by—

(A) basing price reasonableness determinations on actual cost and pricing data for purchases of the same product for the Department of Defense; and

(B) reducing the cost and pricing data to be submitted in accordance with section 2306a of title 10, United States Code.

(2) EXPIRATION OF AUTHORITY.—Authority for the pilot program under this subsection expires on January 1, 2020.

The Senate bill contained a provision (sec. 828) that would require the Secretary of Defense to prescribe regulations to require the use of firm fixed-price contracts for foreign military sales not later than 180 days after the enactment of this Act. Additionally, this provision would grant the Secretary waiver authority if the Secretary determines that a different type of contract is in the best interest of the United States taxpayers.

The House amendment contained no similar provision.

The House recedes with an amendment that would clarify that foreign countries that are counterparties to foreign military sales may select a contracting vehicle that is not firm fixed-price. The conferees direct the Secretary of Defense to develop a process to determine the contracting preferences of foreign counterparties and to brief the Committees on Armed Services of the Senate and House of Representatives on the elements of the process no later than 6 months after enactment of this Act. The conferees further expect that the Secretary shall waive the requirement for firm fixed-price contracts only in exceptional cases. The conferees expect that the Department of Defense will not interfere in the process of the host nation selecting a contract type. If a contract type other than firm fixed-price is selected at the request of a country, the Secretary of Defense shall be prepared to notify Congress that the Department of Defense did not encourage the country in the decision to pursue that contract type. The amendment also would establish a pilot program to accelerate contracting of foreign military sales by allowing the Department of Defense to base price reasonableness determinations on actual cost and pricing data for purchases of the same product for the Department.