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

Subtitle B — Amendments to General Contracting Authorities, Procedures, and Limitations

P. L. 115-

House Conference Report. 115-404

(a) In General.—Section 828 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 10 U.S.C. 2430 note) is amended—

(1) in subsection (a), by striking “each fiscal year beginning with fiscal year 2015” and inserting “each of fiscal years 2018 through 2022”;

(2) in subsection (b)—

(A) in paragraph (1), by striking “or underrun”;

(B) in paragraph (2)—

(i) by striking “or underruns”; and

(ii) by striking “,Technology, and Logistics” and inserting “and Sustainment”;

(C) in paragraph (3)—

(i) by striking “and cost underruns”; and

(ii) by striking “or underruns”; and

(D) in paragraph (4), by striking “, except that the cost overrun penalty may not be a negative amount”;

(3) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively;

(4) by inserting after subsection (b) the following new subsection:

“(c) Total Cost Overrun Penalty.—Notwithstanding the amount of a cost overrun penalty determined in (b), the total cost overrun penalty for a military department (including any cost overrun penalty for joint programs of military departments) for a fiscal year may not exceed $50,000,000.”; and

(5) in subsection (d) (as so redesignated)—

(A) in paragraph (1)—

(i) in the paragraph heading, by inserting “OR PROCUREMENT” after “EVALUATION”;

(ii) by striking “each fiscal year beginning with fiscal year 2015” and inserting “each of fiscal years 2018 through 2022”;

(iii) by striking “each research” and inserting “the research”;

(iv) by striking “evaluation account” and inserting “evaluation or procurement accounts”; and

(v) by striking “percentage” and inserting “amount”; and

(B) in paragraph (2)—

(i) in the paragraph heading, by striking “AMOUNT” and inserting “AMOUNTS”;

(ii) by striking “percentage reduction” and inserting “reductions”;

(iii) by striking “evaluation accounts” and inserting “evaluation or procurement accounts”;

(iv) by striking “paragraph (1) is the percentage reduction” and inserting “paragraph (1) are the reductions”; and

(v) by inserting “, when combined,” after “equal”.

(b) Prior Fiscal Years.—The requirements of section 828 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 10 U.S.C. 2430 note), as in effect on the day before the date of the enactment of this Act, shall continue to apply with respect to fiscal years beginning on or before October 1, 2016.

The Senate amendment contained a provision (sec. 827) that would amend section 828(b) of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 10 U.S.C. 2430 note) to remove the use of cost underruns to offset cost overruns and avoid the cost overrun penalty, beginning in fiscal year 2018.

The House bill contained no similar provision.

The House recedes with an amendment that would limit the maximum penalty to not exceed $50.0 million per service and to clarify the accounts to which the penalties are applied.