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P. L. 107-107

House Conference Report 107-333

SEC. 822. FOLLOW-ON PRODUCTION CONTRACTS FOR PRODUCTS DEVELOPED PURSUANT TO PROTOTYPE PROJECTS.

Section 845 of the National Defense Authorization Act for Fiscal Year 1994 (10 U.S.C. 2371 note) is amended--

(1) by redesignating subsection (f) as subsection (g); and

(2) by inserting after subsection (e) the following new subsection (f):

(f) FOLLOW-ON PRODUCTION CONTRACTS- (1) A transaction entered into under this section for a prototype project that satisfies the conditions set forth in subsection (d)(1)(B)(i) may provide for the award of a follow-on production contract to the participants in the transaction for a specific number of units at specific target prices. The number of units specified in the transaction shall be determined on the basis of a balancing of the level of the investment made in the project by the participants other than the Federal Government with the interest of the Federal Government in having competition among sources in the acquisition of the product or products prototyped under the project.

(2) A follow-on production contract provided for in a transaction under paragraph (1) may be awarded to the participants in the transaction without the use of competitive procedures, notwithstanding the requirements of section 2304 of title 10, United States Code, if--

(A) competitive procedures were used for the selection of parties for participation in the transaction;

(B) the participants in the transaction successfully completed the prototype project provided for in the transaction;

(C) the number of units provided for in the follow-on production contract does not exceed the number of units specified in the transaction for such a follow-on production contract; and

(D) the prices established in the follow-on production contract do not exceed the target prices specified in the transaction for such a follow-on production contract.'.

The Senate bill contained a provision (sec. 805) that would authorize the Department of Defense to enter follow-on production contracts for a limited number of items developed pursuant to transactions (other than contracts, grants, or cooperative agreements) on a sole-source basis.

The House amendment contained no similar provision.

The House recedes.