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

Subtitle C — Provisions Relating to Major Defense Acquisition Programs

P. L. 115-

House Conference Report. 115-404

(a) Requirement For Regulations.—Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall amend the Defense Supplement to the Federal Acquisition Regulation to provide for the appropriate use of the should-cost review process of a major weapon system in a manner that is transparent, objective, and provides for the efficiency of the systems acquisition process in the Department of the Defense.

(b) Required Elements.—The regulations required under subsection (a) shall incorporate, at a minimum, the following elements:

(1) A description of the features of the should-cost review process.

(2) Establishment of a process for communicating with the prime contractor on the program the elements of a proposed should-cost review.

(3) A method for ensuring that identified should-cost savings opportunities are based on accurate, complete, and current information and can be quantified and tracked.

(4) A description of the training, skills, and experience that Department of Defense and contractor officials carrying out a should-cost review in subsection (a) should possess.

(5) A method for ensuring appropriate collaboration with the contractor throughout the review process.

(6) Establishment of review process requirements that provide for sufficient analysis and minimize any impact on program schedule.

The Senate amendment contained a provision (sec. 803) that would require the Secretary of Defense, within 180 days after the date of enactment of this Act, to amend the Defense Supplement to the Federal Acquisition Regulation to provide for the appropriate use of the should-cost review process in a manner that is transparent, objective, and provides for the efficiency of the systems acquisition process in the Department of Defense. The regulations required would incorporate, at a minimum, the following elements: (1) a description of the feature distinguishing a should-cost review and the analysis of program direct and indirect costs; (2) establishment of a process for communicating with the contractor the elements of a proposed should-cost review; (3) a method for ensuring that identified should-cost savings opportunities are based on accurate, complete, and current information and are associated with specific engineering or business changes that can be quantified and tracked; (4) a description of the training, skills, and experience, including cross functional experience, that Department of Defense and contractor officials carrying out a should-cost review should process; (5) a method for ensuring appropriate collaboration with the contractor throughout the review process; (6) establishment of review process requirements that provide for sufficient analysis and minimize any impact on program schedule; and (7) a requirement that any separate audit or review carried out in connection with the should-cost review be provided to the prime contractor under the program.

The House bill contained no similar provision.

The House recedes with an amendment that would delete element seven on the requirement to provide any separate audit or review carried out in connection with the should-cost review to the prime contractor under the program.