NDAA for Fiscal Year 2012

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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS Subtitle H - Other Matters
P. L. 114-	House Conference Report. 114-840
SEC. 894. IMPROVED MANAGEMENT PRACTICES TO REDUCE COST AND IMPROVE PERFORMANCE OF CERTAIN DEPARTMENT OF DEFENSE ORGANIZATIONS. (a) In General.—Beginning not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall designate units, subunits, or entities of the Department of Defense, other than Centers of Industrial and Technical Excellence designated pursuant to section 2474 of title 10, United States Code, that conduct work that is commercial in nature or is not inherently governmental to prioritize efforts to conduct business operations in a manner that uses modern, commercial management practices and principles to reduce the costs and improve the performance of such organizations. (b) Adoption Of Modern Business Practices.—The Secretary shall ensure that each such unit, subunit, or entity of the Department described in subsection (a) is authorized to adopt and implement best commercial and business management practices to achieve the goals described in such subsection. (c) Waivers.—The Secretary shall authorize waivers of Department of Defense, military service, and Defense Agency regulations, as appropriate, to achieve the goals in subsection (a), including in the following areas: (1) Financial management. (2) Human resources. (3) Facility and plant management. (4) Acquisition and contracting. (5) Partnerships with the private sector. (6) Other business and management areas as identified by the Secretary. (d) Goals.—The Secretary of Defense shall identify savings goals to be achieved through the implementation of the commercial and business management practices adopted under subsection (b), and establish a schedule for achieving the savings. (e) Budget Adjustment.—The Secretary shall establish policies to adjust organizational budget allocations, at the Secretary's discretion, for purposes of— (1) using savings derived from implementation of best commercial and business management practices for high priority military missions of the Department of Defense; (2) creating incentives for the most efficient and effective development and adoption of new commercial and business management practices by organizations; and (3) investing in the development of new commercial and business management practices that will result in further savings to the Department of Defense. (f) Budget Baselines.—Beginning not later than one year after the date of the enactment of this Act, each such unit, subunit, or entity of the Department described in subsection (a) shall, in accordance with such guidance as the Secretary of Defense shall establish for purposes of this section— (1) establish an annual baseline cost estimate of its operations; and (2) certify that costs estimated pursuant to paragraph (1) are wholly accounted for and presented in a format that is comparable to the format for the presentation of such costs for other elements of the Department or consistent with best commercial practices.	Improved management practices to reduce cost and improve performance of certain Department of Defense organizations (sec. 894) The Senate bill contained a provision (sec. 893) that would require all Department of Defense entities, with the exception of the Centers of Industrial and Technical Excellence designated pursuant to section 2474 of title 10, United States Code, which conduct commercial or non-inherently governmental work to establish cost baselines for their operations and begin to adopt best commercial and business management practices to reduce costs and improve the performance of such organizations. The House amendment contained no similar provision. The House recedes.