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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 the subsection heading, by inserting “Preference For” before “Performance-Based”;

(2) by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), respectively;

(3) by striking “Wherever practicable, payment under subsection (a) shall be made” and inserting “(1) Whenever practicable, payments under subsection (a) shall be made using performance-based payments”; and

(4) by adding at the end the following new paragraphs:

“(2) Performance-based payments shall not be conditioned upon costs incurred in contract performance but on the achievement of performance outcomes listed in paragraph (1).

“(3) The Secretary of Defense shall ensure that nontraditional defense contractors and other private sector companies are eligible for performance-based payments, consistent with best commercial practices.

“(4) (A) In order to receive performance-based payments, a contractor’s accounting system shall be in compliance with Generally Accepted Accounting Principles, and there shall be no requirement for a contractor to develop Government-unique accounting systems or practices as a prerequisite for agreeing to receive performance-based payments.

“(B) Nothing in this section shall be construed to grant the Defense Contract Audit Agency the authority to audit compliance with Generally Accepted Accounting Principles.”.

(b) Regulations.—Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense shall revise the Department of Defense Federal Acquisition Regulation Supplement to conform with section 2307(b) of title 10, United States Code, as amended by subsection (a).

The Senate bill contained a provision (sec. 829) that would amend section 2307(b) of title 10, United States Code, to establish a preference for performance-based payments to contractors and would re-establish the policy objective laid out in Federal Acquisition Regulation 32.1001, which established performance-based payments as the preferred Government financing mechanism.

The House amendment contained no similar provision.

The House recedes with an amendment that would clarify that nothing in the provision authorizes the Defense Contract Audit Agency to perform audits of a contractor’s compliance with Generally Accepted Accounting Principles.