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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. 116-

House Conference Report   116-617

(1) In general.--Section 2306a(a)(1) of title 10, United States Code, is amended--

(A) in subparagraph (B), by striking ``contract if'' and all that follows through the period at the end and inserting ``contract if the price adjustment is expected to exceed $2,000,000.'';

(B) in subparagraph (C), by striking ``section and'' and all that follows through the period at the end and inserting ``section and the price of the subcontract is expected to exceed $2,000,000.''; and

(C) in subparagraph (D), by striking ``subcontract if'' and all that follows through the period at the end and inserting ``subcontract if the price adjustment is expected to exceed $2,000,000.''.

(2) Applicability.--The amendments made by this subsection shall apply to any contract, or modification or change to a contract, entered into on or after the date of the enactment of this Act.

(b) Report.--

(1) In general.--Not later than July 1, 2022, the Secretary of Defense, in consultation with the Secretaries of the military departments, shall provide to the congressional defense committees a report analyzing the impact, including any benefits to the Federal Government, of the amendments made by this section.

(2) Elements.--The report required under paragraph (1) shall include the following elements:

(A) Data to illustrate any efficiencies achieved, costs avoided, and acquisition timelines improved.

(B) Analysis of associated costs to the Federal Government, if any.

(C) Analysis of underlying causes or factors that limited the benefits described in subparagraph (A).

(D) Other matters the Secretary deems appropriate.

(3) Form.--The report required under paragraph (1) shall be in an unclassified form but may contain a classified annex.

The Senate amendment contained a provision (sec. 842) that that would modify section 2306a of title 10, United States Code, by establishing a standard $2.0 million threshold for
application of the requirements of the Truthful Cost or Pricing Data statute (commonly known as the Truth in Negotiations Act) with respect to subcontracts and price adjustments.

The House bill contained no similar provision.

The House recedes with an amendment that would require the Secretary of Defense to analyze the impact of this provision and document any resulting benefits to the Government.

The conferees note that section 811 of the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115-91) raised the applicability thresholds for section 2306a of title 10, United States Code, limiting the requirement for certified cost and pricing data to those contracts, modifications, and subcontracts that exceeded those thresholds. More recently, section 803 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116-92) included mechanisms to protect the Government's interests with respect to contracts and subcontracts not subject to requirements for certified cost or pricing data.

The Department and the military services have represented to the conferees that the authority in this provision will promote efficiency, improve acquisition timelines, and reduce administrative costs associated with executing certain contracts with lengthy periods of performance. The conferees note that the purpose of this provision is to streamline the administration of cost accounting, and to reduce inefficiencies associated with the need to maintain dual accounting systems, not to reduce governmental oversight over contracts beneath the applicable threshold. As the Department uses the flexibility associated with this authority, the conferees emphasize the importance of rigorous oversight by acquisition executives to mitigate risks of paying higher prices that are neither fair nor reasonable.

Senate Committee Report 116-236 to Accompanying S. 4049

Truth in Negotiations Act threshold for Department of Defense contracts (sec. 842)

The committee recommends a provision that would modify section 2306a of title 10, United States Code, by establishing a standard $2.0 million threshold for application of the
requirements of the Truth in Negotiations Act.