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

Subtitle C--Provisions Relating to Software and Technology

P. L. 116-

House Conference Report   116-617

(b) Selection of Initiatives.--Each Secretary of a military department and each commander of a combatant command with acquisition authority shall propose for selection by the Secretary of Defense for the pilot program at least one and not more than three initiatives that are well-suited to explore consumption-based solutions, to include addressing software-intensive warfighting capability. The initiatives may be new or existing programs of record, and may include applications that--

(1) rapidly analyze sensor data;

(2) secure warfighter networks, including multilevel security;

(3) swiftly transport information across various networks and network modalities;

(4) enable joint all-domain operational concepts, including in a contested environment; or

(5) advance military capabilities and effectiveness.

(c) Requirements.--A contract or other agreement for consumption-based solutions entered into under the pilot program shall require--

(1) the effectiveness of the solution to be measurable at regular intervals customary for the type of solution provided under contract or other agreement; and

(2) that the awardee notify the Secretary of Defense when consumption under the contract or other agreement reaches 75 percent and 90 percent of the funded amount, respectively, of the contract or other agreement.

(d) Exemption.--A modification to a contract or other agreement entered into under this section to add new features or capabilities in an amount less than or equal to 25 percent of the total value of such contract or other agreement shall be exempt from the requirements of full and open competition (as defined in section 2302 of title 10, United States Code).

(e) Duration.--The duration of a contract or other agreement entered into under this section may not exceed three years.

(f) Monitoring and Evaluation of Pilot Program.--The Director of Cost Assessment and Program Evaluation shall continuously monitor and evaluate the pilot program, including by collecting data on cost, schedule, and performance from the program office, the user community, and the awardees involved in the program.

(g) Reports.--

(1) Initial report.--Not later than May 15, 2021, the Secretary of Defense shall submit to the congressional defense committees a report on initiatives selected for the pilot program, roles, and responsibilities for implementing the program, and the monitoring and evaluation approach that will be used for the program.

(2) Progress report.--Not later than October 15, 2021, the Secretary of Defense shall submit to the congressional defense committees a report on the progress of the initiatives selected for the pilot program.

(3) Final report.--Not later than 3 years after the date of the enactment of this Act, the Secretary of Defense shall submit to the congressional defense committees a report on the cost, schedule, and performance outcomes of the initiatives carried out under the pilot program. The report shall also include lessons learned about the use of consumption-based solutions for software-intensive capabilities and any recommendations for statutory or regulatory changes to facilitate the use of such solutions.

(h) Consumption-based Solution Defined.--In this section, the term ``consumption-based solution'' means any combination of software, hardware or equipment, and labor or services that provides a seamless capability that is metered and billed based on actual usage and predetermined pricing per resource unit, and includes the ability to rapidly scale capacity up or down.

The Senate amendment contained a provision (sec. 884) that would direct the Secretary of Defense to establish a pilot program to explore the use of consumption-based solutions to address software-intensive warfighting capability, including criteria for selecting initiatives for the pilot, direction on certain contracting elements, requirements for monitoring pilot activities, and a series of congressional reporting requirements.

The House bill contained no similar provision.

The House recedes with an amendment that would expand the pilot criteria to include military applications beyond software and that would delay the reporting dates.

The conferees believe that the Department of Defense should take advantage of ``as-a-service'' or ``aaS'' approaches in commercial capability development, particularly where the capability is software-defined and cloud-enabled. The conferees note that, in its final report, the Section 809 Panel on Streamlining and Codifying Acquisition recommended the adoption of consumption-based approaches at the Department of Defense, stating, ``More things will be sold as a service in the future. XaaS could really mean everything in the context of the Internet of things (IoT). Consumption-based solutions are appearing in many industry sectors, from last mile transportation (e.g., bike shares and electric scooters) to agriculture (e.g., tractor-as-a-service for farmers in developing countries). Most smart phone users are familiar with software updates that provide bug fixes or new features. A more extreme example of technology innovation enabled by the IoT is the ability to deliver physical performance improvements to vehicles through over-the-air software updates . . . In the not-so-distant future, cloud computing and the IoT will enable consumption-based solution offerings and delivery models that are hard to imagine today.'' Therefore, the conferees support the Department of Defense's commitment to new approaches to development and acquisition of software, and believe that the Department should explore a variety of approaches, to include the use of consumption-based solutions for software-intensive warfighting capability.

The conferees expect that, in conducting activities under the pilot program established in this section, the Department will consider the use of the Adaptive Acquisition Framework's
Software pathway.